tv Fast Money Halftime Report CNBC May 24, 2012 12:00pm-1:00pm EDT
that his memory is never far away is really important. because he was a founding father of this network. he maintained the standards throughout his tenure at this network and the degree to which we can remember him and keep those standards close, that's one of the most important things for us. >> what of your thought of a three-hour "squawk on the street," i'm not sure. >> that does it for us today. let's get back to headquarters and the "fast money" halftime report. ♪ all aboard ha ha ha >> all right, carl, thanks so much. four hours to go until the close and here's where we stand. behind me on the wall, red arrows but essentially flat on the street. the european economic data very weak. a defensive kind of day, staples and utilities get a bid as the street fights it out to try and get into positive territory. take a look at gold and oil. we continue to watch the commodities space, and these are in the green today. there's gold higher by 1 1/3%, shooting higher. crude oil hovering barely above $91 a barrel, something really
interesting we'll be following on today's show. along with these top stories we always follow on the halftime show. lackluster luxury. tiffany, are the cracks forming at the high end? eagle eye on value. we're talking to the manager of the renown first eagle global fund, $48 billion at work in this market and he'll tell you where he's seeing the most value in the world right now. and fast on facebook. billionaire mark cuban says he's only buying the stock for a trade, not an investment. our traders give you their playbook on how the fast money can be made in this volatile ipo. welcome to the "fast money" halftime report. let's start doing it with the street fight over the facebook listing. i'd love to get the traders' opinion as we learn now that nasdaq executives making an aggressive push behind the scenes to try and stem the damage from the facebook ipo. stephanie link, they're reaching out to prospective companies that may list ones that have committed already, perhaps
trying to talk them off the ledge at this point. reaching out to bankers, as well. this comes from a source with direct knowledge of what's happening over there. behind the scenes. >> this is an mess. an absolute mess. the nasdaq totally messed up. so in my opinion, you know, i think that you have to let the dust settle in this stock before you are going to buy it. i know that 30, 31 is interesting in terms of it coming down 20% and looking on a revenue basis, it's a little bit better in terms of valuation. but if this is -- this is going to be an overhang on the stock in the short term. >> you're talking facebook, not nasdaq, right? we're showing nasdaq. >> i think that facebook -- from the facebook point of view, i don't think you touch it from nasdaq. i don't think you really touch it, obviously. >> if you're a believer in what the nasdaq is doing and assume they can deal with the fallout here, correctly, and keep the companies that have already given them the word they're going to list there, and obviously not lose facebook. >> i think it's reputational risk, right? why go -- why go there? you don't have trust? and i think that there's just
too much head winds. i don't think you have to go there -- there are a lot of values in this market right now, scott. i don't think you need to be chasing it. >> as you know, nasdaq, for all the flaws in the ipo, nothing to do with the fact the stock is now trading 31 or 32. so, again, if the stock was trading 40, 41, i'm hard-pressed to believe we would be having the conversation. to answer your question about nasdaq, just in terms of valuation, given the sell-off in the stock, i think it's probably pretty interesting. i do think -- you might question how they handle it, but i think they've tried to be in front of it. so i think this will be one of those places in time where you say capitulation moment, you might see that in the stock ndaq. >> rob, let's tackle nasdaq and the question that exists here forward. obviously, it would be terrible news from a nasdaq perspective if they were to lose the facebook listing now to the new york stock exchange. but you can talk us through whether you believe these stocks are worth taking a look at here, given what guy said, the pullback we've seen. >> in the exchange stocks themselves?
>> yeah. >> look, i don't know. i think that's a question that i am probably ill equipped to deal with in a certain sense. nasdaq is still there. i'm more concerned about market structure issues. we've had this fiasco with facebook with respect to the technological problems that nasdaq had. we had the exchange go public on its own exchange and then withdraw and not go public, which was another question about market structure. i mean, as much as it makes me sound like a ludite, i miss a centralized exchange, we have 13 to 16 exchanges now, and market integrity is a big issue. and i think that's an issue individuals are, you know, being hurt by that we don't have. i would love to go back to the old new york stock exchange struck turks to be quite frank with you, and be in there. >> thanks, ron. thanks. >> any time, grasso. and the gentleman who bears your last name, would have done this a lot better, i think. >> grasso, i don't want you to speak as an advocate of the new york stock exchange.
>> yeah, i want to try to be as unbiased as i possibly can. >> i want you to speak strictly at this point to whether you think the exchange stocks are a place you should be in this market, specially nasdaq, if you liked it before, do you like it even more now on this pullback or do you just not want to be in these areas right now? >> the first thing the exchange stocks have to worry about is volume. and obviously, that's where they're -- where they have to get paid on it. but for me to look at the nasdaq, you know, last week when we had facebook, the most talked about ipo that we've seen in quite some time, if ever, basically. and, you know, i thought they should have been prepped a little bit better. but i think it's a perception issue, as stephanie just touched on before. if you have a perception issue, where on earth -- and i don't care where you're listed, it's going to be a problem getting those new ipos, getting those people to list, having them feel more secure, that there's actually somebody at the wheel. so -- so basically, trying to be
as unbiased as they possibly can, with -- obviously, i've made my living down here since 1993. >> i hear you. >> i believe our model is substantially better, having said that, you do have to worry about volumes across the board when an exchange stock is concerned. >> yeah. no, i hear you. let's move the conversation forward and talk more about facebook now. here's how a billionaire is trading that stock. mark cuban writing in a blog post he bought 150,000 shares of facebook. he bought them in chunks at prices between $31.97 and $33, but he says and makes this key point, it's for a trade, not an investment. and then in his words, mobile will crush facebook. guy? >> agreed. mark makes it -- first of all, for him, this is just -- he's playing right now. he's -- he loves to trade and i think he's getting a kick out of this. and i think he had to be in facebook, because to his words, it's like buying a babe ruth card and mays, and i probably
have the wrong ball players. the fact that it came out on the eve their ipo spoke volumes, not only about the facebook model, but about advertising going forward. you made the point, they're also pulling from the super bowl, which i'll push back to you and say if gm says they can't find the value in advertising in the super bowl, what is does that say about ad spend going forward? facebook, obviously, that's where they're making their money. and they said themselves, the mobile forum, they're having trouble monetizing. so i don't think it augers well for facebook going forward. >> but just to push back on you, guy, to use your term, what about ford's comments? they're still going to be advertising. maybe it's gm specific, behind closed doors meeting about where they have to cut some fat. so -- guy? >> i was going to say. let's tackle the issue that cuban brings up in his blog post. and that specifically, again, in his words, that mobile is going to crush facebook. i mean, if you do believe that
companies like facebook, google, and for that matter, some of the other biggest names in the business are having trouble figuring out how to best monetize mobile -- that seems to be the key issue going forward here, ron. what do you do? >> scott, this is a question for any provider, any platform system operator, whether it's cable television, broadcast television, any provider of content is now faced with a challenge that mobile brings to the table, which is increasingly difficult to monetize the content because of screen size, because of the way in which these devices are used. so, yeah, facebook is definitely going to be challenged by this. but so will a host of other players in a variety of different platforms. and so i think everyone has to think through this question. i mean, it's not just are you going to buy facebook, but are you going to buy other providers of data and content, or platforms that distribute content when you're looking at a real disruption in the marketplace, that three to five years from now is going to be very importance. >> scott, really quick if you
look back to the trading issue about what mark cuban said, if you look at facebook and apple, as soon as they start selling apple, they start buying facebook. we thought it was apple/google price line, but it's specifically apple. watch the intraday trades if you're doing what mark cuban is doing with facebook. >> we talked initially, a few days ago where he mentioned the fact, if you were getting a nice pop in apple, at the same time you were getting the weakness in facebook, speculating perhaps there was money coming out of facebook, going into a tried and true name like apple, or, you know, money that instead would have been going to facebook, but instead was going to apple. >> absolutely. but now you're absolutely starting to see the machines take over, where guys are programming it and it's a direct play. of apple, facebook, when one ticks off, the machines are taking over. if you get that lead step, you can be quite an effective day trader. unfortunately, that's where you have to be when it comes to facebook. >> here's the next story, probably surprised some people. hp up sharply after the company reported earnings thabeet the
street. the pc maker announcing plans to cut 8% as a larger company restructuring. today on "squawk on the street," hp ceo meg witman talked about its reorganization efforts. >> we're at the beginning. i would say we're probably 10 to 15% of the way there. we've laid a lot of pipe, we've laid a lot of groundwork, we have a clear, focused strategy for the company. we have a clear, focused strategy for each of our operating groups. and now we have to execute. >> well, not everyone is convinced that they'll be able to do just that. let's bring in rob seara, analyst with evercore partners. welcome to the program. >> thanks for having me. >> i guess these results on the surface would have surprised someone like you. >> well, no, actually. i mean, the quarter was a little better than expected. but most was really a rebound in the hp's pc business, which was dismal the prior quarter. so i don't really think there was any change here. i think it was a better quarter, but then the guide was actually a little weaker.
so -- >> what then do you think is ahead for hp in terms of its restructuring, its ability to restore investor confidence? clearly people are buying the stock today, so they must believe that meg whitman has this company headed in the right direction. >> i think there are probably some people who are starting to think that way. i am not giving then the benefit of the doubt at this stage. to me, the problem is, i think it's a lot of the, you know, same old thing. i mean, she says that hp is starting to restructure here. hp has been restructuring for about the last decade. and so, you know, cutting more heads, taking more write-offs, to me is just kind of going back to the same playbook. i actually tend to think in some ways hp may have cut too far, which is why they're seeing erosion in their top line and profitability. and yet here they go and start cutting again. >> rob, i look at some of the margin contractions, some of their business segments and then i look at the guidance, third quarter guidance you just mentioned and i'll ask you the question, is the rally today in the stock just a relief rally
off what appeared to be aca pitch lathes bottom yesterday? >> i think so, yeah. if you look at the stock up today what it was down yesterday. and it's been pretty darn weak. so i think it's a little bit of a bounce. and don't get me wrong. i may be wrong. this may actually be the bottom for hp. i just -- i'm not sure where one gets the confidence to see that, because, again, it looks to me like it's the same old thing. >> i mean, how would you then take a look at -- i think most of the street expected after what dell delivered, or didn't deliver, depending on how you look at it, that hp was going to probably come in with something negative. so let's switch the conversation relative to dell. are you more negative on dell? does it seem to be dell-specific issues that it is having, especially in spaces and the company mentions it in its own commentary that they're choosing not to be in areas where consumers are moving to. >> right. i think the same pressures are impacting both companies, dell and hp, and i think both of them are kind of struggling to figure
out how they can offset pc erosion with higher value-added businesses. i actually tend to think that dell is probably doing a better job of that in some ways. for one thing, dell has a stronger balance sheet. so they're making acquisitions, trying to buy their way out of it. hp has actually done a lot of damage to their balance sheet over the last several years, buying back stock and making acquisitions. i think dell looks better. with the quarter specifically, i think hp did better in pcs. dell certainly did worse in pcs and the problem there is dell continues to walk away from what it considers overly aggressive pc pricing. the problem i see there is i think pc pricing is just always aggressive. so i'm not sure how that's going to change. >> i'm surprised, looking at both your ports and i'll ask you to be brief, you could have dell higher rated than hewlett-packard, given what dell just delivered, and even i would extend that it by saying, if it hp is stealing share from dell, but yet you still rate dell a higher company. >> right. so i have -- well, so dell is
equal weight -- hp is equal weight. so i wouldn't actually be in a rush to own either of them. >> northbound no, i understand that. but you clearly view dell more favorably in context. >> yes, as i said, i think with dell, i think dell is at least doing the right thing. i think they're making forward moves, making acquisitions, trying to grow the higher value-added businesses. hp, i feel like they're still cram scrambling, trying to figure out a correction. >> rob, thanks. who is scrambling and who is not. >> they're both scrambling. dell is smaller, so more agile and can make more acquisitions quicker. maybe more value-added, right? i think hp is slowly turning, but we really have to wait a couple quarters to see. and we want to get -- see progress being made. i did think it was interesting that they are going to use their cost savings from this restructuring to put into faster-growing businesses like cloud, like big data, like security. and that to me makes me more positive about emc, because
they're the leader in these businesses. and those are secular growth parts of technology, where you want to be. and emc is down 6% today. >> so you're saying you would own neither hpq, nor dell. >> no. >> interesting. you had had that big selloff -- emc was a monster until it went from 30 down to 24. i think in terms of trading hewlett-packa hewlett-packard, i'm sort of in the analyst camp. you can trade it against this 25057 low yesterday we saw on huge volume. everything is interesting, and i think hpq sets up that way. goldman sachs holding its annual shareholder meeting today in new jersey. let's get out to mary thompson at the meeting with the very latest. and mary braving the rain for us, we appreciate that. >> reporter: yeah, there were a couple thunderstorms here, scott. thanks so much. you know, the meeting cleared about 45 minutes ago. all of the directors were reelected. all of the shareholder proposals failed and the say on pay plan they passed with a margin of a 94% in favor of that. there were some protesters here. they arrived late. they were kept about a block away. and they left early.
not much of an impact there from the protesters. the tone of the two-hour meeting was very civil. ceo lloyd blankfein fielding questions on europe, and jpmorgan's losses. he also defended director michelle burns, who was criticized by some shareholders for her role on walmart's board's audit committee. burns said the retailer is looking into reports that it has paid bribes in mexico. blankfein also deferred to new lead director james sheerer when asked what the company did following reports of rival jpmorgan's multibillion dollar trading losses, sheero saying goldman constantly reviews its risk controls. blankfein answered questions about europe, the firm is examining contracts and looking at its exposures in the events. he says concerns about europe, the political and budget impasse here in the u.s., as well as some concerns about where china's growth is headed, all of that, he said, is contributing to what he calls a dampening of
activity and enthusiasm in the economy. scott, back to you. >> all right, mary, thanks so much. mary thompson outside the goldman meeting. as we head to break, we're going to trade all of the banks after the break. but take a look at the nasdaq 100 here, at session lows, leading stock index declines. net app f5, joy global dragging the most on the index. coming up, tis the luxury boom going bust? shares of tiffany plunge. much more "halftime report" on the way, including the banks.
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welcome back to the "fast money" halftime report. let's trade the financials. ron, do you believe the earnings prospects are getting better for the banks? >> well, you know, scott, i don't know. i mean, it's interesting that the stocks are behaving badly in the fdic came out and showed today that banking profitability was enormous in the first quarter. i think we already knew that. i think there is some open questions going forward. i haven't been a big fan of financials. what worries me is the way
they're trading. when you looked at goldman sachs trading around $96 when it peaked at $132 not too long ago, this gives me pause. the fact that the financials cannot really get a rally going. while i'm less concerned about the broader market, there seem to be somin osin accuratic things about financials now that are not helpful to the cause. long-term, i do think they're all a buy. short term, i think you're catching a knife here. >> yeah, stephanie, how much of what we're seeing in the financials has to do with just the unknown about what ultimately may take place in europe and what the exposure really kocould be. >> it's europe, it's regulation, net interest margins have been flat the last year, two years. i think it can still look at some of the regional banks. i think usb is still the bellwether. but actually was very interested, earlier this week, sum sun trust had an analyst meeting and were positive about mortgage originations and doing a good job on expense control. so i think there are some pockets in banks you can own. but i think you've got to be careful. >> all right. our next trade, tiffany's first
quarter earnings beat expectations but the stock is down on weak guidance. let's welcome cnbc contributor robert frank. he literally wrote the book on the wealthy with rich stan and the high beta rich great to have you in the family. >> great to be here. >> how concerning is this if you tie it together with a couple days ago. ralph came out, and their comment was customers in if their words restrained with luxury apparel spending. we have a real problem? >> we're starting to have a problem. here's what happened with tiffany's. they had weak sales in the united states. especially weak sales at their new york store. and, you know, the united states and is the americas is nearly half of their revenue. so that was big. more importantly, they lowered their expectations for the year. people were looking for profit growth of around 10 cents. they're now 10%, now looking at 7 to 8%. so the outlook and the future is not looking bright. >> guy -- >> i'll ask robert this question. the thing that struck me about the quarter is -- tiffany's
doesn't discount. inventories were up 27% year over year. so obviously, i don't think margin is going to be affected, because they're not going to -- i don't believe it bodes well for tiffany's going forward. >> no, not at all. let's look broadly at the wealthy consumer. you remember the story going into this, let's bet on the high-he said consumer, riding out this recession, incomes up, wealth up, buy class and sell mass. what we're seeing now is a very quick reversal where people are saying, know what, the wealthy are not spending all of a sudden, no one knows really why. but we're seeing weakness on the high end. another jeweler came out that showed weakness on their high end, where zale's, the lower end is doing better. so we're seeing this sudden reversal and no one is quite clear why or how bad it will get. >> it's been an interesting story in the retail space in general. as you mentioned, if you look at tjx, for example, the stock doing great.
pvh, right? phillips-van heusen, and patty edwards called this a couple he days ago. is that the place you want to be because of what robert is reporting? >> i think the high end got overloved and overowned. and i think the dollar stores, by the way, are overloved and overowned. and i think the mass, to your point, i think you're seeing some tradedown. i think you're also seeing several companies got their act together. walmart, target, costco, maybe even kohls. that's a little bit -- i'm not sure about that one. but i think you are seeing a definite shift, and the valuations are not extended and some offer good dividends. i think there are places you can kind of nibble in the retail space. and i think the mass -- maybe the ones more interesting. >> what about the luxury index being a leading indicator of what perhaps we should expect going forward? >> right. so i have the frank theory of luxury is that luxury is now attached to the stock market. because wealth and wealth creation is really driven by stock markets today. when the wealthy see their stocks going up, the wealth effect flows over to luxury companies. so i looked at tiffany sales and
broader market indexes, and guess what? they are highly correlated. so people that were expecting a strong quarter this quarter were not looking at stock markets. so i would say, if you want to follow luxury, look at what the stock markets are doing. >> ron, i mean, that's been a long correlatiocorrelation, rig? >> long-standing historical correlation between the behavior of the stock market and luxury goods, certainly between wall street bonuses and luxury goods and things like that. and i think, you know, the interesting part here is that -- and i would agree that luxury has been overloved in the last several months. we had a great run since the bottom in the market of 2009, luxury did very well, because bonuses in the stock market bounced back so hard. the question here is, you know, do you trade down, do you go into the middle of the market as financial services become a smaller share of gdp, as manufacturing does better, as energy does better, as an industry. do you want to maybe take a few chips off the table. we love tiffany, coach, a whole host of names in that space for quite some time. the warning is very disturbing. so i think maybe you just have to at least certainly take some
profits, step away and reconsider, see what's going on, whether or not europe really takes everybody else down in the short run. >> and i would just throw out, you know, as we wrap it up, then you would have a toll brothers, for example, at the high end, right, deliver really good results the other day. so it's very interesting, depending on what segment of luxury you're still talking about. >> absolutely. totally agree. >> good to see you. >> thanks. >> look for you again soon. coming up on the halftime report, don't be fooled by to y today's pop in crude. we're checking the charts to see if a selloff is coming. we'll be right back. sometimes investing opportunities are hard to spot. 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.
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welcome back to the "fast money" halftime report. here are halftimes, top three trades. take a look at this chart here on the wall. pandora up nearly 15%, better chan expected earnings. positive guidance, as well. nice pop on an otherwise down tape. >> better than expected loss, which is always a bit of a warning. listen, every rally of this magnitude since the stock went public has been a huge opportunity to sell. 30% short, getting squeezed. i think you sell it on the close today. costco beat the street and said same-store sales rose 5%
versus a year earlier. stephanie link, up 1.5%. >> this is classic very low expectations. but the quarter was okay. margins expanded for the first time in a couple quarters. they actually said new membership growth grew 9.9%, good data point. we like it. >> the miners etf down today, a third of a percent move. >> so many different phases in the gold trade and the gold miners have underperformed. at this time i believe you are seeing the second phase move through where weaker hands are flushed out of the market. i'm looking for higher prices. >> crude, is today's rebound part of a longer-term trend or short-term bounce? let's check the charts with jc o'hara. welcome. >> thank you, how are you? >> good, thanks. good to have you. let's take the crude first. we're looking at 9 or so. where it's sitting now. >> crude as a commodity, you have to remember when
commodities move, they move fast and get to where they want to go in a hurry. so originally, we started entertaining a long trade about -- thinking about under 93, making a short-term pop. that didn't come to fruition. all of a sudden we see 89, erase the gains on the year. we said we might be in for a short-term pop after an oversold condition. however, i really like this for a short-term -- very short trade, anything above yesterday's high. you have to remember the longer-term trades are down. >> grasso, comment on oil? >> yeah, you know, for me, i thought it was just too much baked into the cake when we thought we were going to rip straight through the sky here. i think we're going to be looking at slower global growth, we're going to be looking at recessions possible, depressions in the eurozone. still negative, basically, on the price action in crude. >> how about, jc, what's going on in small caps? it's an important part of the market. what's your read about where that section of the market could head and i guess what it would mean for the overall market if it heads where you think? >> fundamentally, an interesting story. and even more interesting about
it, taking a look at the iwm. and you show this chart to five different technicians and you'll have five different trend lines on this chart. what really caught my eye was, and caught everyone else's eye, in 2012, we saw a head and shoulders pattern developing. now all of a sudden you breach the next line around 78. and you start falling. it has very bad, bearish implications. what's also important, not only was the next line breached at 78, you reached the 150-day moving average and breached longer-term support going back to 2010. so yesterday's move higher was good, wasn't great. we felt there was a lot of overhead support which now is resisttant, hard for small caps to fight through. >> if that's the case, what does it mean for the broad market? >> none of this is a good sign. financials, technology, small caps pulling back. one thing i would caution on a head and shoulders, you see that move back to the up side, if you get a nominal break at the neckline, something is speaking to what was said earlier, five different interpretations of a
chart. if you get just a nominal break. neckline and then rally back, kind of invalidates the previous pattern. but if it stays under pressure, those head and shoulder tops can be pretty powerful. so, again, i'm not fully worried about the whole market yet. i think the real wild card is if europe absolutely collapses. other than that, if you look at all our economic data, we look better than everybody else. our market is in the middle of the pack so far. so i think the jury still is out. i'm not ready to walk away. might even be ready to nibble a little bit. >> jc, thanks so much. >> thank you. >> talk to you again soon. let's get a real-time trade on oil, president of merck block. what are you looking at? >> i'm looking at rowen, a driller, offshore driller. i think the fundamentals -- first of all, if you ignore the energy trade, you're really making a mistake. if you've been able to gauge the bottom in energy for the past two summers in '10 and '11, you've really been able to gauge the bottom in the stock market. and i really think we're trying to form a bottom here in oil,
somewhere between the mid '80s to the high '80s. that means we might get another down draft or two, but basically nearing, you know, the bottom for the summer in oil. and that means that there are some real values out there, i really think it's an offshore drilling, because the rig rates are incredibly high, they're as high as they were at the end of the cycle the last time in 2007. they got $650,000 a day for one of these ultra deep water rigs. and everybody has contracted out to 2013 and 2014 and this sector has gotten pummeled with the oil market going down since march. there is value here. rowen i think is one of those values i've had a lot of luck buying around $30, bouncing around near there,000 now. i've started to develop a position in rowen. i think it may go lower, the oil price may go lower, but in the end, i think this is a good time to just start nibbling at some of these offshore drillers. >> dan, this rowen has done a great job on jack-ups, transitioning to water.
are they going to execute, especially versus the bee home oths like an enskoe and sea drill? >> there's so much tightening in these rigs, so much demand and so few around, i think rowen is smaller, more nimble than transocean, they're all over the globe, in the gulf of mexico. i think they're the ones, if it they make a transition, there's so much demand for these rigs, they'll really execute. it's going to be one of those great stories going forward. >> thanks. >> we'll see soon. coming up on the halftime report, searching the globe for the best investment bargains. find out what best eagle is investing in right now when "halftime" comes back in a couple minutes. ♪
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welcome back to "halftime." let's get to a viewer tweet. stephanie, this one is for you. trader jive asks, i would appreciate it if stephanie link could update her united rentals trade. major tumble since her recommendation. >> i like it still. the stock has fallen because industrials have fallen. this one, kind of is an exception.
i like the fact they just bought their number two competitor. it's going to be huge synergies and the company was at an industry conference last week reiterating how strong the synergies are. i like the rental equipment, especially compared to a c caterpillar or deere. our next guest says a greek exit is not the most likely scenario. but markets will still react in preparation for a split. let's bring in willie williams of society general with today's "money in motion" trade. good to see you. >> likewise. >> how far are we going down on the euro? >> in the near term, a break below 120 is possible. the market was right to fade the greek elections and now concerns are accelerating. how will the june elections go? it. >> yeah, so obviously you must be trading it, right? >> yeah, so before we initiated a short with the break of 127, i liked being short still at these levels and lowering the stop loss to 127.50. my target is roughly around 121.
i think there are some concerns that the ecb or policy makers might come out with some initiatives that might cause a short term spike, but longer term, even if the greek elections go well, there is still the spanish growth story, the slowing global economy. a lot of other issues that should put the euro under further pressure. >> that's a tough thing, becoming a crowded trade, which as you said the risk is that you do get a headline that causes a spike. >> i agree with that. but in the near term, i still think the move is lower, and the fundamentals are working against the euro. >> willie, good to talk to you as always. ron, give me a comment on what you think about this whole situation over in europe. as it relates directly to what the euro is doing. >> well, look, i mean, you know, we've got until june 17th, absolutely no leadership out of anyone from germany, france, wherever. i mean, cannot make up their minds over putting some stimulus in place, you're owe bond
offerings, ecb action. unlike what happened here, scott, in 2008, 2009, which even delayed was still a very rapid response to a large crisis, this is a slow-motion train wreck that's been going on for three years. the risk is that if greece leaves, you'll see a speculative attack on the bond markets of spain, italy, portugal, ireland, and it could be very, very difficult for european banks to get through this without extraordinary amounts of help. so i'm concerned about it. i'm not sure that the greece -- greece leaving the eurozone is as low a probability event as everyone thinks. and they may, in fact, be already prepping for it. the question is, will the knock-on effects be so large they spread across the atlantic and give us something even worse than we've seen the last two years. >> and to that note, citi clearly agrees with you, ron. they expect greece to exit the eurozone as of january 1st of 2013. >> and i think they have quite frankly for a long time, a view held inside for quite a while. if you talk to for ex money
managers involved with a variety of different programs, they have been preparing for that for a while. you know, taken on its own, it means absolutely nothing. but taken -- taken to the illogical extreme where you see the leero misseta and other currencies coming back and falling dramatically, then the liabilities of european banks which stayed at 1.2 trillion. >> we're seeing the euro move lower. top value trades around the globe with a portfolio manager with $48 billion at stake. plus, stick around. we're checking what's trending so you can make some trades on that. more "halftime" report is up next.
today on "power lunch," politics and the fed. steve liesman with his exclusive interview with new york fed president william dudley. what would the politics be of more qe in an election year? fallout from facebook. find out whether the ipo fiasco has bummed out the best and the brightest out in the valley. and could the yankees really be for sale? find out on power. now back to scott and more "fast
half." >> thank you. our next guest has $48 billion at work. at the first eagle funds. he joins us now with his top value picks worldwide. great to have you on the show today. welcome. >> thanks for having me. >> you finding more opportunity here in the u.s. or elsewhere? >> you know, first eagle, it's very much of a bottom-up approach to investing. it's not a top-down approach. i will say, though, that the weightings of the u.s. domiciled companies have inched up over the years in our global fund. so that's some indication of where we're finding value. >> okay, let's take your global fund. i'm looking at the top five holdings here. i really want to try and give people some quality and investment ideas. 5% of the portfolio in gold bouillon. so you still are bullish on gold? >> wouldn't say we're bullish on gold. i don't think we have a view on the price one way or the other. i think that our approach to gold is that we use it as a potential hedge either against currency debasement or fractures
to the monetary architecture we all operate under. so it's not a directional bet. it's really a hedge. >> how about your take on technology, given the fact that you've got both cisco and microsoft among your top holdings in that particular space i mentioned, that being the global fund. >> yeah, i think many of us at first eagle never expected to own those types of companies, because during the internet and telecom bubble, they were valued at north of 100 times earnings. what's happened since then is that the operations of these businesses have grown. they've remained very profitable. and we were able to buy them at single-digit multiples to operating earnings. and so we're not at first eagle, just like geographically, we're not opposed to owning or not owning a given sector. it's really a function of the quality of the business and
whether or not we can buy it at the appropriate margin of safety. >> we spend a good portion of the time we talk about stocks on the show talking about what's happening in financials. your top u.s. pick happens to be bank of new york. why? >> yes. bank of new york is a very interesting company. it's an old company that was founded by alexander hamilton in the late 19 -- 17th century -- 18th century, i guess. the -- the bank of new york really derives -- it's about 80% of its revenues from fee-oriented businesses. so these are a combination of assets servicing businesses, custody clearing, that really don't have much to do with banking. and they also have a very big -- many people don't realize, they're one of the largest asset management companies in the world. and so the -- that strong fee income at the bank of new york is an attraction that we're very well-positioned in the number one and number two in the businesses that they compete in. >> yeah.
>> and they're able to earn very attractive returns on tangible capitals. and even now in the mid 20s. the trouble with bank of new york is that in this low interest rate environment, they've been suffering, both directly because of -- not interest margin, but also because of money market fee waivers they've had to extend to their customers. so when we look at bank of new york, we think that $2 a share, which is roughly what they earned last year, is pretty much the bottom, never say never. but we feel reasonably comfortable with that. and management is taking steps, cutting costs, and so i think the view is that, you know, $20 a share or so for this type of company -- >> right. >> it's at a reasonably decent discount to itsin twinsic value. >> thank you, thanks. good to have you on the show. >> thank you. ron, what do you think of the call on bank of new york melon? >> as you said -- as i said earlier, long-term, i've always
liked the financials. they're getting knocked around here more than i'm comfortable with. but listen, they have a huge asset management business, bny melon, which also includes dreyfus that seems to be working fine. the generational play since pla 2009 have been a good bet. there's been a lot of turbulence, but generically speaking i like them. most of the names i like individually. again, absent a catastrophic shock, i think most of them are attractive here. >> you've talked, stephanie, about the regionals. bny. >> i think it's a good story. they have to prove a little bit to me that they can cut expenses a little bit more. that's one of the issues along with the net interest income and net interest margin pressure. it's a good story, but i think there are other better ones. >> guy. >> the stock's trading around $20. it's not been a performer. i think there are better places to go. i think morgan stanley off yesterday's reversal is interesting with like a $12.75 stop. >> keep your tweets coming
because we are going to trade them next. right back on halftime. to provide a better benefits package... oahhh! [ male announcer ] it made a big splash with the employees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. ♪ ha ha! in your fight against bugs. ortho home defense max. with a new continuous spray wand. and a fast acting formula. so you can kill bugs inside, and keep bugs out. guaranteed. ortho home defense max. ♪ so you can kill bugs inside, and keep bugs out. guaranteed. [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪
welcome back to the "fast money" halftime rort. let's talk about using to your trading advantage. seema mody is on that beat for us as she always is, seema. >> hey, scott. let's focus on the stock the heat map. once again a lot of buzz around tech. earnings reaction and exec ty shake-ups dominating the
headlines. start with research in motion. shares falling below $10 this morning over more concern on rim losing market share in the smartphone market. let's get straight to the tweets. traders online taking rim's side on this one saying we like it. out with the old, in with the new might be a good thing. brad tweeting, head of global sales is replaceable. in fact, new blood might be a good thing. so that's just a preview of the heated debate on twitter. the bulls saying rim is looking to reinvent itself. a new fresh face heading up sales is what it needs. >> yeah. but, guys, isn't the issue it's not a new face? if he was bringing a new product people actually want today buy, that would be something. >> yeah. could have said turnover has been spot-on and here we are going now. i'm just on a risk/reward, rim sets up interesting. i'm hard pressed to believe there's a lot more downside, although i've said that for a couple bucks. but somebody's going to come out
of the wood work at some point. patents are worth something, so to sell it short is dangerous. >> scott, it's a patent play. and a patent play only. think palm. i think that's where your mind should be when it comes to rim. better places to put your money. if you want to trade it based on this sale of patents, so the sale of the firm because of the patents, that's one short-term way to play it. but longer term, they don't seem with or without a new head of global sales to be affirmative here. >> seema, another tech. >> another tech trending is ntan, falling sharply after trading last night. a lot of traders surprised with this sharp move. let's get straight to the tweets. one tweeter saying i've never seen anything like this before. analysts are hammering that out for not cutting expenses given the weak macro environment. it's trading at $28. now, if you're a bull, you would say forget those four analyst downgrades. this is a good time to buy-in. so, guys, what's the trade?
>> i don't know. guy, is there a trade here? >> yeah, there is. it was a disaster, but seema just said, you know this stock is going to trade monster volume today on lows we haven't seen probably in four or five years. so i think you let it flush out today. there are no one-day events, but for a trade off this move with this volume is going to be very interesting. >> $10 a share in cash. it's cheap. we prefer emc. but it's getting hammered. >> scott, one kind of practical tool, if you're investing and you say you've never seen anything like this before, you should not be in the market. >> right. okay. final trades next when we come back. like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering, web-based trading platform.
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