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tv   Fast Money Halftime Report  CNBC  May 25, 2012 12:00pm-1:00pm EDT

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you certainly put chesapeake in that category. >> yes, carl has made a lot of money. you tend to go back where you've made money in the past. this is about deleveraging. not the greatest combination. >> have a great weekend, guys. see you on tuesday. have a great memorial day weekend. that does it for us on "squawk on the street." >> carl, here's where we stand. the markets are flat today. there's the dow industrials down a tenth of a percent. only four up days in the entire month of may. that goes a long way to tell you the story about where the markets have traded as of late. take a look at oil and crude. we continue to watch the commodity space. gold is higher by 1/2 of 1%. the euro hitting a two-year low
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versus the dollar. mark faber gives us call on what happens next in europe and beyond. jpmorgan's other risky bets. we're uncovering what the unit maif been must have been investing in. and why this market is a stock picker's dream. welcome to the "halftime fast money report." we've only had four up days in the month of may. europe is on the table and the euro weakness continues. >> right. that's why you're seeing the volatility index up on the day. you know you've got the extended it weekend and yet you look at the volatility index not at 22 but just below those levels. i wouldn't be surprised if we see that come back a little bit more. when everybody is looking at greece, they are looking at europe and the confusion, no
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clarity whatsoever as of right now, you are seeing it trade as they are. >> you are always looking at what the euro is doing. is that the biggest and most important metric to look at the euro dollar and figure out what our market is likely to do? >> it's an important metric and i don't think people are taking into account what that does for buying power of tourists in the u.s. nor what it's going to do for multinational earnings in terms of pressuring those. but for me it's all about greece, it's all about spain. we had news out of spain that one of their wealthiest regions is having problems funding. that's not a surprise but it may be a surprise to retail investors. be cautious. i would expect the market to sell down going into the close. a three-day weekend. that's what should happen. >> with all of the worries, we
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have a flat market today. there is opportunity to be found. >> right. and to steven's point, he's absolutely right. that region or province in spain asking for money from the ecb or the germans, they are doing it because they don't want to go and borrow money at the rates that they would have to borrow at. that's one of the keys going forward. a lot of companies that have these issues, way beyond ours, it's how much they collect and how much they owe. greece is at the top of the list and it's followed very closely by portugal and spain. they don't want to go out and finance at the rates that they have to. and particularly if they leave the euro zone. i am not surprised at aum ll bye fact that they are asking for money there. germany is loathed to be part of that. >> the chatter on the floor. if selling does pick up into the holiday weekend, what are the levels that we really need to pay close attention to as we get
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set for next week? >> well, you want to look at this market. the 1328 is the recent high. we could bing and bang. if we breakdown to the 1310 level, that's going to be the key indicator. we're going to slip back below 1300. the way i would play this is to be safe. i don't know anyone who knows that we are so headlined dependent, who would want to rush into this market. so for me i would pay it with a high dividend play. >> he's known as one of the biggest contrarians on the street. rightly predicting numerous meltdowns. marc faber. >> the euro zone defaults on the obligation to foreigners. >> joining us on the fast line
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is mr. bloom, boom and doom, marc faber. good to have you. >> thank you for having me. >> what do we think is likely to develop over the next several days? how messy will it get over in europe? >> well, i think what should happen, i just mentioned a week ago, namely that greece and some other countries should exit the euro zone but what will happen is probably that germany will show more flexibility and that eventually they will issue euro bonds and the whole quality of the euro will diminish and that has already been reflected in the marketplace in that the euro has been very weak and i happen to think that now the euro is on the oversold side and that it
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has rebound with stock markets in the world. >> your fellow doom sayier told us a couple weeks ago that he sees europe, in his words, a slow motion train wreck. given the news that is starting to develop over there, is the speed of the train wreck, in your mind, picking up if you do in fact believe that that would be the case? >> europe has many problems but, believe me, the u.s. has also many problems. it's not that europe is an isolated case but other countries have the same and, by the way, as an observer of markets, when anybody focuses on just one thing at the present time, greece and europe, maybe there are other issues that are far more important, such as meaningful slow down in india
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and in china. >> what takes the situation over in europe to the next more dangerous stage? there are already reports of issues in spain, regions there, worries about banks, you have stories about potential bank runs in greece and perhaps elsewhere. is that what matakes it to the next danger level? >> well, i think the next danger level would be an outright default. that would be a danger level. as i said, it started to take the loss now. it would have been better to take the losses three years ago and the longer you postpone, the more likely you will eventually have a gigantic systemic failure. >> you know, sot-gen was out saying that it could hit
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european stocks. for the benefit of our viewers, u.s. traders and investors, would would the impact to our markets be? >> actually, to tell you the truth, i disagree with that. the market will be relieved if greece exited the euro and there would be some clarity. it wouldn't be good for bank shares and in general the markets in europe are very oversold and on an exit on greece, i think the markets would rally because that would be some solution, maybe not the best solution, the best solution would have been never to accept greece into the eurozone. it would be some solution and i think the markets would actually rally. >> one of my traders has a question for you, sir. john? >> welcome to the show.
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you're living up to the name, boom bloom and doom. the market perhaps getting oversold in particular, if there is an exit for greece and that road maps need to be drawn, if that happens, we're going to see a decent rally out of both the euro and markets around the world because of the recognition of the simple fact that, as you said, they shouldn't have been in the zone in the first place and the debts are too staggering. would you think that we are closer and closer, perhaps just days away from that sort of a boom rather than the gloom? >> yes. i mean, i wouldn't call it a boom because if i look at the marketplace around the world, there are more and more stocks that are breaking down. in particular, economic sensitive stocks and stocks that are for the well to do people,
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like tiffany's. and when this happens, it tells you that the economy is likely to weaken and that the huge asset price run for which the well to do class has benefited is likely to come to an end with some kind of significant asset deflation. >> you're not looking for a recession here, though, in the united states, are you? >> well, i think that we could have a global recession sometime starting in the fourth quarter of this year, early 2013. >> is there a possibility of a one in three chance? where would you rate it? >> would i rate it at 100%. >> where would you want to be invested if that was the case?
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>> cash u.s. dollar. >> what about gold, mr. faber? >> investors must own some gold but as i've maintained for the last six months or so, we are still in a correction period and maybe gold breaks down below the low that we reach on the december 29th, 2 011, which was 1,522. that's a possibility. but sentiment is now quite negative about gold. by the way, it's negative about the euro and about equity. as i said, we can count the trend rally but new highs for markets, that dies down. >> mr. faber, it's great to have you on the show. thank you for taking the time to call into the "halftime" show. >> head of g-10 strategy at
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namura is making a call on that. you'll want to stay tuned. nice reaction to faber? >> i agree that if people are slowing dramatically, i think china is close to a hard landing than a soft landing. in terms of greek, the way i look at a greek exit is like the u.s. credit downgrade that we saw by s&p, that will be moving the markets higher except that you need other steps by europe. what i'm looking for in near term is the ecb coming out and ensuring deposits in the banks to stop the outflow of capital. the u.s. did it. i think that's next and the ecb will cause the markets to rally.
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>> let's move to the next trade. facebook moving to a public company. shares down nearly 20% and of the 17 tech companies it's the only one that has declined in the first week. are you a buyer of facebook shares and if not, why? >> i am underwater on those same shares and i'm waiting for the options to come out. i think there's going to be opportunity to do some hedging and recover some of the money that i'm out right now for facebook. i understand the whole story of facebook, the fact that it trades at these valuations, 2013 earnings. >> doc? >> i think people hit the nail on the head with the options next tuesday. when we come back after memorial day, the 29th, the options will be listed often facebook and based on what we saw so far, volatility would have been sky high. it would have been up over 100.
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now as the stock has stabilized, moving only like 2 or 3% a day, it will probably be somewhere in the mid-60s for a volatility which is still a rich premium for those who own the stock and would like to sell options against it. for the rest of the folks that didn't want to buy facebook, setting up for an upside or betting on the downside with the puts will be fabulous. this will be very active options. >> scott, one last thing on facebook. 500 some odd mill yecion shares. today you're seeing the volume come down. i understand what is going into today. take a look at just how different you're looking at facebo facebook based on some of the volume. >> it's key bank downgrading lululemon to a halt. concern of consumer spending. the stock is up 54%.
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if you take this and put it together with tiffany and throw in ralph lauren which their commentary was negative about the luxury space, how concerned are we about the luxury and cracking something we discussed yesterday with our own robert? >> it has been a huge outperformer. so the luxury brand that scott was just talking about, you look at ralph lauren and tiffany and tiffany broke down pretty hard yesterday on a second miss, i believe, in a row there. i think that if you try to buy and i don't know how to take a
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look at nike and they are all over $100. so we're talking about much more of an apple's to apple's comparison. i look today as an opportunity to get in. i did get in. >> you have that international growth, domestic growth. you make the analogy with nike but you can't get this type of growth anywhere in the space. lululemon is coming out with new buys. >> you have no broad concerns that this falls under a slow down in high end. you guys are buying more of the stock? >> you haven't seen this at tj max ever. if you see the stuff loaded up at t.j. maxx which i see for ralph lauren, unfortunately, that's a sign that they are not pushing it out. you will not see lululemon
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discounted. >> judge, the reservation will be 70% of stock will come in as well. lululemon exclusively, that's your growth area right there. >> judge, i think you're starting to see pressure at the high end. not necessarily at the foreign consumer, currency is not worth as much and coach is now 85 stores in china. 350 in the u.s. i think you see pressure on them. >> coming up on the "halftime," a real-time trade that will grab your attention. much more on the way.
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chesapeake is down 30% year to date. let's go to a cnbc contributor.
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murph? >> we talked about this name before. if you look, the last six days, it could be blackrock buying, chesapeake has been up for six days in a row, up to over $15 currently. we bought the stock right after the open. it's a combination of things. yes, it's southeast, the largest shareholder and it's icahn, blackrock. the company is that this company is not in a short-term cash crunch after they got the name from goldman sachs a week ago. there is one option and that's to sell the company. you're looking at a push into the low 20s at least on this stock. we're going to be along for the ride. >> a lot of activity i know on
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the desk as well. >> the last thing i want to do, no offense, is to buy stocks some six days in a row. blackrock owns lots of stocks, averaging down. icahn may be averaging down and i can guarantee you one thing, with the debt load that this company has, there's no chance that it will be sold. there are other assets out there that are more attractive and better balance sheets. i'm not commenting on the holding period. >> absolutely. you look at it like the stock is already up 3% from where we bought it. it's tough to put a guarantee out there that no one is going to buy this company. i completely disagree with that. they have been selling off pieces of this company all along and i don't see why we can't continue to do that.
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>> you have to look at the balance sheet. they've got $11 billion in debt. you've got to look at what their assets are. i'm not saying that they aren't good but they are impinged by the debt. it's a major -- >> stock down at the $15 range and not up at the -- >> it would be a diluted action. >> guys, we're going to leave it there. enjoy the holiday weekend. we'll talk to you soon. >> thank you. jpmorgan still reeling from the loss of a risky bet. an article on the front page of wall street journal. joining us now is gregory zuckerman. welcome. >> good seeing you. >> this gives more insight into the level of risk that the cio unit was willing to take? >> that's exactly right.
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we talked about this new group within cio group and the private equity investment that they are making and the key question all along is where the volcker rule would have prevented any of this. i try to think about things. is it possible that because volcker hasn't been implemented, and they know that, they are trying to put as much risk on the table as they can now while they are allowed to do it? >> i doubt that. i don't think it's a case of gaming volcker. they had a group that had done very well over the years, the cio group. it kept feeding money to this group and they ran into losses and this is just another example of what they are making there. >> i guess the only thing that could have been worse is if they
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invested in john carter. stone losers right out of the gate. the light squared investment is interesting. what do you make of the fact that they are making of lightsquared and pretty much going into liquidation? >> there are some winners but it obviously has not been one of them and private equities and how well or not well that this group was policed for lack of a better word? >> to me it shows that no one knew about him. no one heard about this group let alone the private equity kind of investment. >> you have a question? >> yeah, i do. in terms of lightsquared investment, it's going to work out to be a good investment in terms of the auction.
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in terms of where it is, isn't that the real issue? rather than the investment itself? >> well, yeah. the lightsquared was an equity investment. to me the larger issue is that the largest bank in the country is making the investments that we didn't really know about. >> grasso? >> just because they were stupid, doesn't mean that the industry is stupid. can we make that he had indicated guess that we're going to hear a lot more about this and a lot more in firms or is this a one off in your mind? >> this is a last gasp where you had them move through this period and they thought they could make them. i don't hear about others making similarly risky investments. >> greg, one more question. you can't possibly think -- i'm not saying that you do -- that this is unique. when i was at solomon, they just made investments. lehman had one where a
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particular guy was a largest profit operating the firm, untold call on capital, don't you think every firm is doing this in some way? >> not anymore. they've been used to and pulling back in anticipation of the volcker rule and just sort of no one wants the headline risk. they want some of it but not to this extent. >> greg, it's good to talk to you. enjoy the weekend. guys, let's just trade jpmorgan. weiss, you've loved jpmorgan. then you've been worried about jpmorgan. >> clearly not happy to see this. jpmorgan was known as a trading firm and then dimon came in, he cleaned it up. i'm uncomfortable with this. i don't have a position in jpmorgan. i'm not there now because european contagion risk.
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>> too many headline risks for jpmorgan. if you want to not get hurt or get hurt the least, i still wouldn't be buying financials. wells fargo, u.s. bank, you've heard us all talk about them. that's where you would go. i wouldn't go into jpmorgan. >> if you're going to go into any big bank, wells fargo is the place to go. and they were told that they were stopping by and buying stock. it's sort of a sign where it is. not sure where the bottom is. >> 31 to 34. probably for the next 60 days. >> you bought jpmorgan the day -- >> i did. >> -- that the news originally came out? >> i did. as soon as jamie was not going to do any share repurchase, that's when i lowered my range from 36 to 39 down to 31 to 34.
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welcome back to the halftime show. taking a look at shares of facebook, almost at the lows of the day. 3.5%. this is the one-week anniversary of facebook's ipo. there 2 is. 3184. a rouch patgh patch for faceboo. is yahoo! seeing october calls seeing that peak. the options are lighting up pretty good and then is suddenly stopped. one large block trading and then it basically stopped. i'm more excited about this company for now about this access, which is the mobile search tool which is going to be very, very interesting. and all of the reasons from this
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past week, yahoo! is a must own stock. >> here is one of the ugliest charts. down 16%. we're talking about verifone and better than expected earnings. >> the stock being punished for it and just like tiffany or any other stock, there are no one-day events, folks. be very careful trying to catch the falling knife. i can looking for an entry point at 37.5, roughly where the tstok is trading now. i think one of the ways that you can take a pump in volatility as well as the drop by selling puts at about that strike. you can pick the 37 strike if you'd like or the 38 strike. those 38 puts are trading for nearly $2. that would mean effectively if you were a put stock you'd be putting it at 36. i like the stock a lot. down at 36. that's where it might get to between 36.5 and 38. >> always looking for opportunity.
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and yields on the ten-year hovering below 175. there it is at 173. we've got the euro zone concerns persisting. >> >> you know, this is the ultimate fear index. it says that everybody stare. to me bonds are in a bubble. i'm not willing to pick the bottom anymore or the top. i'll wait for them to turn and then get in on the short side. >> all right. our next trade is food prices. could eating healthier save you money? jane wells is looking at a new usda report and joins us live from l.a. hey, jane. >> scott, if you base it on per calorie, healthy food is more expensive but it costs less money per proportion size. it's all in how you bill it. stock is up over 60% and it's
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dealing with higher costs. double digit increase with corn and wheat. >> it is a concern. how do we take costs out of the system and given the recent acquisitions, we have an opportunity for global sourcing, for example. >> they are passing along those costs. there was a buy yesterday saying organics and natural foods only have 6% of the market with a lot of room to grow. citi has the ability to double the number of units being sold at walmart and traditional grossers. and milk prices are falling not so much at the retail level. the difference between raw milk is 177.
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shares are trading at their highest level in two years. finally, my must have item. i can give up everything but coffee. prices are down 35% this year after a huge run-up. starbucks you won't see the benefit until next year. the average coffee drinker spent $165 a year on java. scott? >> i think we're all in agreement with you about not being able to live without our coffee and i know pete is in agreement with you on starbucks because i know you like it. >> i like the peet's coffee, too. but this brings you down to whole foods. i looked at the market and it seems like people are willing to pay up for the organics. >> enjoy the holiday weekend, okay? >> whole foods gained margins. gained margins. i don't know how they do that.
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>> giddy up. >> right now, 30% of hain. the stock would go another 10 to 15% higher from here. it's probably still a buy still a buy. >> coming up on the half time report, a fund manager reveals his must own stocks in online retail and banking. david goerz is naming names, next.
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let's take a look at the stocks in the social stratosphere. >> a platform that we -- traders use to talk shop, let's get into it as we gear for the long holiday weekend. let's zero in on long holiday weekends. peter is wondering if it's too late to join the bandwagon. bookings have been going through the roof. europe will continue to be a head wind and when you take a look at the charts, the online
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players are up better than 55%. do they have room to run? a trip adviser on expedia, the most interesting thing possibly is that business for europe has been relatively strong and stronger than a lot of people had expected. weiss, hello? >> i'm here. i'm here. >> to me it's a complicated space because europe is picking up shares and to me austerity means that consumers don't have the money to prices have to go down. >> >> hotel bookings have been a surprising end point. >> if indeed people are saying -- marc faber earlier said the world is blowing up or may have a blip higher and then a blowup, they are spending a
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lot of money on pets, on traveling, take a look at what walmart has done over the past 30 days. you look at that and that's painting an entirely different picture of what people are doing and how they are spending their money n particul money, in particular. >> expedia, very quick, cut marketing expenses and then we hear the einhorn disclosure. seema? >> let's zero in on consumer goods. deck, the troubled uggs maker, may be moving in sympathy of foot locker which is trading at a 19-year high. analysts saying that the technicals look good. guys, is this the time to buy in? >> the technicals do look good. when you look at nike and underarmour and all of that people are going out, judge, and
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they are buying these $100 tennis shoes. >> i don't see kevin garnett running down the court with uggs on. you're making the same thesis for deck as nike and sporting goods? >> it may be more of a fad space. >> no doubt. >> this is like a look into grasso's closet. you look at uggs and lululemon -- i may look at the rain clothing companies. >> this is be nice to bad trader's day. i'm not even going to respond to that. >> good. because i want to move on. meanwhile, equity fund is one of the best performing large cap mump you'll funds. up 7.5%. what are the stocks behind this success? let's bring in chief investment
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officer david goerz. welcome to the show. i am glad that they are what they are because i know that my traders will have a lot of input. let's start with ebay. why do you like it? >> well, ebay is a very interesting story. years ago they bought pay pal and it's been a strong driver of the business. you've got to have a brand and a reputation. securities obviously become a very big issue with respect to the credit cards and echt bay with the combination of the marketplace is a really exciting story for our investors. >> let's get a comment from john. >> ebay, love it. and that's another reason that you like the stock here. with the pay pal side of their business, on the global payment side, it plays into the same sort of space at the pay pal.
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>> david, western dig. >> it's a really cheap stock. after we saw the flooding in thailand, it's a commodity space generally but our need for unstructured data and data storage, all those pictures and applications that we're using on our computers continue to drive growth in the industry. i really like the fact that they finally closed the hitachi deal. this will scement them into the enterprise deal. how do they deal with the movement towards tablets? they have to get into the solid state drives. but business growing 20%. it's trading at five times multiple of earnings. >> weiss, wdc.
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>> are you adding to it or something that you've held for a while and looking at it as potentially fumly fully valued? >> wife we've held it for a while and i think you could see 12 months of this stock doing well as i think the hard disk space continues to maintain pretty good pricing. again, i think the demand for data, growing exponentially right now is a really he can siting story. at the high end, we like emc. we think both could be beneficiaries in a portfolio. i hold it personally and we hold it broadly across the firm as well. i think data is a theme that investors need to be aware of and get ahead of. >> david, thanks for coming on. >> thank you. >> david goerz, thank you. home depot, they hold apple, exxon -- >> eight largest holding being
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apple, you wonder after the big trim off the highs of the lows, did he shake? i see an almost 7% position right now. coming up, is a decisive decision for europe ahead? that's after the break. i haand then i have eleven my grandkids. reak. right when you see them, they're yours, it's like, ah, it's part of me. it's me again. now that i'm retiring they all have plans for me. i'm excited.
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cop coming up at the top of the hour, we're going to go live to athens and see why despite the bleak aspects there, a bigger problem has them worried. and what about and what about your money? whars the currency play? why is the price of oil going down actually making things worse? a special hour is coming up next. now back to scott and more fast half. back to you guys. >> michelle, thanks so much. look forward to that special hour coming up. how low will the euro go? our next guest says 1.20 is highly likely if greece exits the eurozone. let's bring in jens norvig with money in motion trade. how soon do we think that can happen? it seems it's quickly heading there. >> yeah. it's certainly on that track at the moment. i think there's two things to consider. if we have the second round of the election result showing the radical left winning again or thooes need it to be a part of the government. and then the exit is likelier,
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we're going to see 1.20 after that. i think there's another scenario potentially playing out before that. and that is the one where you have capital flight out of the eurozone. and we have start today see evidence in our capital flow indicators that eurozone investors are exiting themselves and buying other currencies such as dollars. and that's actually putting in motion this trending move lower. and we could actually get to 1.20 before the election if that capital flight continues. >> what's the next key level you're watching? i mean, i know your trade mentions with a target of 1 at no time 20. say we're at 1.25 now. what do we have to breech to accelerate that decline? >> i think 1.25 itself is a pretty important figure. but to be honest, i think we've broken already. so if you're looking to add to shorts, i think you're going to look for owning relatively small bounces. i think 1.26 is a good level to add to shorts. i think there's new dynamic on
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the capital flow side really means that the bounces are going to be much more moderate than we've seen in the past. and therefore you want to be involved even on a small bounce. >> let's go to euro levels quickly. >> so i think the target is 1.20. i think you want to add on a bounce to 1.26. and stop should be just about 1.28. >> jens, thanks so much. we'll see how it all develops. >> thank you. >> jens norvig. steve weiss, are you short euro? >> i am. just because it's been a great trade. my concern is they wanted to keep the euro lower, it's great for trade. keeps them competitive. >> how are you shorting it so viewers understand how we're doing this? >> yeah. there are two etfs. i happen to be long the uup, which is the single one. i'm uup. >> that's the leveraged one, right? >> no. that's the nonleveraged one. >> oh, yeah. right. >> and it's against a basket of currencies, not just the euro. >> got ya.
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two stocks in particular led the market this week or were certainly standouts. apple and walmart. there's a look at the charts. apple on the week up about 7%. walmart's had a good week as well up nearly 5%.
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guy, i'm wondering, look, if this is some support now, if apple starts to pick up, does that supply some overall support for the market just given its size? >> certainly could. it was pretty amazing, scott, that the market didn't tumble more when apple gave up 644 all the way down to 530. worldwide developer conference june 11th through 15th. that was a reason to own it as well as the facebook ipo blip last week. apple i think you own into that worldwide. >> look at retail. >> look at walmart, target, dollar stores, all performing very well. says something about the economy right now and some of the trades. >> okay. final trades, speaking of trades, next on "halftime report." fro omrevi htalielzeping t a neigbrhbooklyn..or.ho financing industries that are creating jobs in boston... providing funding for the expansion of a local business serving a diverse seattle community... and lending to ensure a north texas hospital continues to deliver quality care. because the more we can do in local neighborhoods
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get 200 free trades today and explore your next investing idea. lelts let's go around the horn for final trades. weiss. >> safety, yield, verizon. >> grasso. >> i'm not crazy about adding exposure here, but if i had to, it would be al tier group. >> dr. j. >> people be throwing a lot of beef on the grill this weekend. th


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