tv Fast Money Halftime Report CNBC June 4, 2012 12:00pm-1:00pm EDT
plans are not going fix europe, a constitution is. >> we will see you back tomorrow. time for the "fast money "halftime report. >> thanks so much. four hours to go until the close. it's a loss of 35 points. and the nasdaq holding up quite well. keep an eye on during the show today. take a look at what gold and crude oil are doing today. you do have gold has been very much in the news. seeking return.
>> the dollar stores and discount realtors will trade that top space. and betting on bernanke. will helicopter ben come to the rescue? debating the fed's next step. welcome to the halftime show. we're going to start talking about the uncertainty about what the fed will do next. out with a big note this morning that the fed is poised to do more. it will purchase a mixture of mortgages financed with balance sheet expansion possibly coupled with balance into 2014. on thursday when chairman bernanke testifies. what do you think the fed chairman is likely to do?
>> could be. i don't think he is going do anything as long as you keep calling him helicopter ben. i think he is unsulted by that. he is just going hold on. >> here is the thing. a couple of things going on. represents one of the guys out there thinking the fed is going move and move aggressively. saying this is 80% probability acting in june. we pulled 60 of them. how much?
this is what is interesting. 450 billion. that number is long there. i fwess you had a problem with graphic graphicics. it goes right to left. it was right. it should go left to right. you can see it had been quite a bit higher. my take is this. is that i think bernanke predicted this downturn in jobs in a labor market speech he made a month or two ago this is pay back. i don't think he is quite ready to push the panic button. we have a couple of cross swings happening. >> you're telling me that the job picture probably looks better than reality. and it will correct itself.
what do you think will happen and why. unemployment will rise. that's not a reason for the fed to panic. the other question is how serious do you gauge europe to be right now. >> i don't think they have any illusions that they are the ones to drive down interest rates. has way more to do with recession i think the idea that the fed is out there fixing this
market. i think they got a wake-up call. the fed may will having a 20, 30, 40 basis point effect. europe blow up, they run scared and that's what drives the yield down. >> futures overnight were certainly showing a different story than what we see here. >> you have a greek election coming up. surely followed there. there is a critical point here. i have been in the army.
>> let's go back to the monetary policy. >> i care what the fiscal policy initiatives are going be going for. in europe you need fiscal unity. you need fiscal measures. so bernanke i don't want to get out of holdings. >> if you are looking at the s&p. >> be a liquid market. these are 2012 markets. there are options.
>> i am asking you to speak directly to the retail investor. >> retail investors who right now is sitting on the sideline. this market is being driven by hedge funds. >> and by high yielding stocks. >> you get my drift. >> but back to you. your question is do crow think the retail investor is going buy anything that is the third or fourth level dividend play. the answer is no. they are going be buying the slus. >> go ahead. >> hold on. >> i give you one more that the retail investor can play at home. corporate balance sheets have never been better.
>> i got a question. i want to know when you will grow up enough to trade major. i think some of our guys are man enough. >> that would mean the floor is still open. >> you tell me if we had a report bernanke suggests qe coming, you would not have a concern? >> the problem is to take joe's side of it, most people have factored in and they are the ones that dictate direction in the market.
>> there is so much liquidity still even on days like this, days like friday. you can time and get into or out of. when you see an opportunity like we may have seen friday and you know, if we get any kind of a whoosh today then you take advantage of it. we have got plenty of liquidity to get in and out. we will see what the fed
chairman has to say. >> exactly what these guys are saying. >> as a a trader, how are you going lift asset prices? >> the central -- ecb is not able to do that. >> our next trade, seeking return. the historic opportunity and dividend paying stocks. >> less than one and a half percent and you johnson and johnson yielding almost 4%.
but you have a time horizon of almost ten years. i believe you have got make more money in johnson and onson. >> it's the first time in 06 year nas the dividend yield on the market exceeds long term interest rates. you don't need gains in stocks to have a higher return than gains in bonds. >> is there a -- that you would not go under when looking at a company that pays a difd snend. >> well, i think he nailed it as far as johnny john. johnson and johnson. if you want the higher yield. obviously it's one of the highest yields among those.
i don't think you have to chase that one alone. if you are talking about less than 1.8%, if you are there for those dividends and that's your primary driver, that's where i draw the line in the sand. >> 3.2% yield. going take the risk in the equity. >> trading 86 bucks right now. the story is clearly there. >> the s&p falling more than 4%. but is it near correction territory? let's hit the charts for some answers. >> good afternoon. >> we have to respect the technicals, obviously. i think we learned that on
friday. broke below the moving average, what's the next move? >> obviously we are in 10% correction. the market has corrected. we hit our high back earlier this year. we broke our down trend line. we're in solid correction territory now. you look back at where the support level is. the other number to keep in mind is 12.58 is where we closed the year last year. and last year was flat. so it is also the close rather than seeing much further downside. >> more perhaps on the s&p 500. >> the bottom is 12.49. there is nothing below that. we go straight to 1205 basically
right? when you take out significant construction levels, you are looking for a much harper correction. >> that's a problem for me. if you would say that the downside is limited at best. who is going to be the buyer when we get to that level of a re-do of flat on year. who is going to stand there and say i own him? >> we have come back strong at year end. we have the election coming up. as we get closer to november.
>> that's a critical support level and that is what we were talking about a minute ago. having broken such a critical support level. oil is not like a stock where you have got a balance sheet and ta to value. oil is very sentiment driven. >> until it does that. >> that has really helped bring the market in. >> look at today. you have got a little bit of support falling off a little bit
but a lot of this is demand oriented. when growth begins to slow, the first place you will look is shrinkage. >> what is that telling us from the charts? >> if we are talking about quality names that we are jumping to, look at the chart. obviously the stock has corrected but in the last week or so, we have seen the dead cat bounce. we have seen the volume laelly tapering off. the stock has ended its falling knife pattern and i think it's a good opportunity to step in and buy the high quality stock. >> thank you. what do you think of that call? you step in with jp morgan and think the worst is over? >> obviously wells fargo in that space.
>> energy, financials leading the market lower today. coming up on halftime, the trade that works when the economy slows. we will name names for you next. looking for a better place to put your cash? here's one you may not have thought of -- fidelity. now you don't have to go to a bank to get the things you want from a bank,
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>> i think what you have seen us talk about so many times on your show and others is we see this incredible movement to our customers becoming a social enterprise. they are amazing. they are figuring out how to use the consumer world and facebook and how to bring it into their businesses to make them stronger. >> the company announcing today that it is buying buddy media.
you are looking for retailers that can provide value to consumers. >> is there one over the other? >> i have been recommending family dollar and dollar general. they are aimed at low income consumers. dollar tree is a great company, too. it is aimed at selling things to people that are more discretionary. but everything is a dollar so the value is definitely there. >> stocks have obviously done quite well. all three of the ones we are showing here year to date. >> the valuations are not that low in the case of dollar general. it is still owned significantly by private equity. i can't see why they would want to do that. it is not always the greatest strategy. >> is there a risk at all? we are sort of going through the charts here and they all look almost the same right?
from here all the way up to the other corner. so the stocks have run quite a bit. what makes you think that there is still more room to go. >> a lot of that is just, you know, stocks move when companies can perform. just another thing to keep in mind is these guys all have growth. unique growth. none of them have saturated the country. >> obviously it has not hurt walmart but it certainly benefits these guys. that is where they are drawing the growth. >> be careful.
dg and family dollar are not everything for a dollar, only dollar tree. i would really say it is convenience. you can get into and out of the stores quickly. there are not a lot of distractions and the image is strong. if you are on a limited budget, i'm not sure that you will have the time or energy to go to a large store. >> you like these names? dollar tree, dollar general or another? >> i like another one which is kroeger. it has been involved in grocery angles. i would be a buyer of kroger. >> she has a lot in her coverage universe. i woultd be interested to see why wouldn't private equity look further at some of the names if the growth is there.
>> one of the 2.3% dividend yielders. it is a stay occasion or the folks that are really going fix up the home and make it a nicer experience since they might be spending more time there. >> and a drop for the walkman. sonny has gone from dropping beats to stocks. shares now falling below 1,000 yen for the first time since 1980. that was the year after the walkman was released, forever
changing the way that people listen to music. this is an apple story as much as sony. >> it is. i still think sony when you look at them longer term, sit a name that you want oto own. >> coming up, a realtime trade to help you navigate the world of no returns. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today
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down 2.5%. >> if you look at a couple of different things. so yes there are audiotape couple of head winds. very well run company. if you want to phase into it, just be small on the way down. here is a result of this one having a good day. >> ever on friday. there is a report out. could be a potential acquisition side. >> initiating coverage. $25 price tarkt.
basebook continues to slide furlter here. >> then as the market drops, which it did today, they come in and sell puts very aggressively. that's not the same group, i don't believe. people are willing to acquire stock. that would be another. but they are basically riding this thing down. >> our next trade, one person who has been calling for an economic slow down. >> until this market proves itself.
firms just got done presenting at a huge cancer conference. tweeting that the drug's success gave the giant a boost in the field. take a look at the 4% dividend yield. >> i can't imagine there is a trader who doesn't like bmi. >> i think we are all in unionson here. it looks like itd is making a reversal. >> great variation. >> you have a name in the space? >> some of the hospital names. i would stick with the hospital
names. >> watch cigna in terms of what is going on with the supreme court. the 4% dividend yield as well as the great performance. that is two great reasons. >> a lot of chatter tort on services. >> trending right now. one stock that traders don't seem to be a fan of, getting slapped with a downgrade on to our tweets. financial traders saying broke out on heavy volume. get short as the steps for lower prices. >> you are shaking your head no. >> the people's pank of china, that is going to happen in the second half of the year.
>> and it's on sale right now. they have a lot of exposure over in china. exposure with the koernl over there? >> we disagree. >> thank you. >> our next trade. global concerns driving oil. gold is getting a boost in recent days, though. more on commodities. which are you watching specifically today? we saw a rang from 15.45. just like dr. j. and his brother, we like to focus on the
minors. specifically the jr.s, the folks who can play that the gdxj. the jr. minors, the cheapest it has been. >> if you think gold is going higher, why wouldn't you buy the gld. they are cheap for a reason. it's harder to get the gold out and it's expensive. >> i am long. i like gold making a new high here. taking out that 19, 23. i want to buy everything in the sec sor here. the 12 year cheapest discount we have seen. >> you could see a bounce in oil. the chart shows otherwise. why will you right and he's wrong? >> i don't know if i am right.
>> they don't call me the killer for a reason. the guys on the desk what their thoughts are. right now you are seeing a balance because people are very, very sensitive. the european master plan. if we see any type of traction, you will see oil relatively quickly. there are shorts in the market like you expressed. >> there are shorts. listen, you go real inside baseball with oil, which i can. and there is a backwards phenomenon where the front of the board is being purchased and the back of the board is being sold aggressively. so you really can't look at oil today and make a determination in terms of whether it is bottoming or not. >> we will see how it shakes out. thank you.
>> time now for a double fast fire. sometimes they get burned. let's listen to what simon baker said about u.s. steel a few weeks back. >> you are much closer to the bottom than you are to the to be. i would rather be a buyer versus a seller of it. >> pushing over the 50 which is a strong support level. could be above it. >> here is a metric that apt on your side. >> the price right? i guess so. >> you walked into this one. down 30% since the call. >> for basically the last couple of months i have been saying we are flat on the year. for me, trying to marry those two, i was burned by it. i should have listened to myself. you are definitely catching a falling night. basically 7, 8%. probably lower to 7. at this point it is anybody's bet.
i think you stick with the season alty. >> the last time i take an idea from him. that's all i'm going to say. in all seriousness, the technical buy was up. you are going to have a stock loss. it looks interesting right here. looks attractive. it could be a nice move. >> that is actually the best point that simon made ichlt goes against you 3, 4, 5%. >> all right. coming up on halftime, europe, jobs. we found a way to play it. the trade is next on the halftime show. and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus - i can custom build my own screens tdd# 1-800-345-2550 or use predefined ones. tdd# 1-800-345-2550 and i can trade wherever i want,
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let's shoot for the stars. let's invest in our teachers and inspire our students. let's solve this. >> citigroup cite iing retail reinvestment. joining us now to break it down. how much has to do with what we are seeing along the yield curve. you can probably throw in the facebook ipo debacle in here somewhere? >> i think it is the sum of all fears. market sentiment being what it is. we indicating -- and secondarily
it affects margin balances. we would say we speak to the fragilecy of seeing the stock pricing. more destructive for the industry is what happened with the interest rates. across the entire yield curve. >> if you could speak to face book in the context is do you think it will have a lasting impact and has had a significant impact hurting the psyche? >> the impact on the retail investor. i think all of that adds up to fatig fatigue. >> with the downgrade for the folks at home, do you then have to believe that you take a td a
like a price, etc., than it is for others. that being said, they areschwab. that being said to the extent retail equity flows continue to be outflowing, that will continue to put pressure on earnings for the segment overall. >> thank you. >> bill, thank you. >> okay. thank you. >> doc. >> yeah. i was just going to say that a lot of folks were betting on higher rates, judge. you remember when we heard those upgrades of both t.d. and schwab. >> right. >> because of that upgraded look for interest rates. and now just to his point, when you flip that around, you have to pull it back. that's why they've given up those gains of earlier in the year. >> give him credit. that was an excellent answer to my question. no. it's not a short. it's dead money. >> do you think it's the most significant headwind to these guys? >> i do. i think it is. i think you're going to get a lot of capital markets earnings reports here in july. those are clearly effecting the way morgan stanley and goldman sachs is trading and that's on the back from what we heard of
jpmorgan a couple weeks ago. and clearly the dynamic going on in europe. yes, it's going to stay with us. >> yeah? >> i would say on the plus side the nice thing of those two companies unlike jpmorgan, morgan stanley, they're not involved in the investment banking deal. they don't have egg on their face in terms of wall street. so money coming out going into schwabs, there's going to be momentum that way. >> coming up, the hunt for yield in places you might not expect. kayla tausche is seeking return for us next. [ male announcer ] at scottrade, you won't just find us online,
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where else can you hunt for yields besides the stock market? cnbc's kayla tausche is exploring alternative ways to find returns. she joins us now with more. >> scott, you're looking for yield, go to the place where the name says it all. that's high yield. prices are falling and spreads are widening, but overall yields are coming up. if you look at the barclays high yield index hitting 8% average yields for the first time since december. so with the high hurdle rates for pension funds and the like, traders expect fund flows to move back into these assets but only in the highest safest yield credits. the sweet spot are double names. strepgt evidenced in recent weeks when ford was upgrated from junk status at moody's. a good day for the biggest holder of those notes, which is bill gross over at pimco. ford is a widely held credit and now looking for a new home. investors are looking at other potential rising stars. i spoke with the head of credit stratet barclays. he says cit group is another
story that in the long run will likely become investment grade as well. charter communications also a good example of a bb name that treats like a low risk credit with high volume. volume is key here because there's a so-called buyer strike for anything but these top credits, meaning the lower you go, the more thinly traded the credit and the higher the inherent risk there and potentially exiting those securities, other high volume napes that a lot of traders seeing get snapped up, community health, hca, and mostly in the near-term maturities. >> joe. >> just talked about this at the top of the show. >> the etf world. jnk or hyg, which is what i own. intel is in there as well. i agree. >> the most widely held credit right now in the high yield space is sprint though. >> which is in there as well. yep. >> but why would you buy sprint with all the risk there with where the equity is trading? where in the capital structure do you get there? >> in terms of pricing and the way the spreads have moved right
now, i think it's favorable. we take risk everyday. i'm willing to take risk on the debt side, not the equity side. >> a safer place to go. >> all right. that story continues. kayla, thank you. let's do a tweet. let's trade a tweet right now. douglas asks, other than macro issues, why is apple down? samsung, galaxy iii, how low does it go? doc? >> there could be a couple reasons, judge. the samsung, number two, friday we heard netflix actually outsold apple in terms of video for the first time. that was pretty big. and a lot of folks focused on that as one of the reasons to get back into netflix. and it did have a nice $2 pop today before giving most of that up. >> okay. final trades when we come back from this short break. if you are one of the millions of men
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