tv Fast Money Halftime Report CNBC June 6, 2012 12:00pm-1:00pm EDT
totally different story. >> yes. i can't wait to get back. i will miss you. it has been a great couple of months. thanks a lot and i'll see you at the exchange soon. >> travel safe. talk to you soon. that does it for us here on "squawk on the street." as we hit noon, we'll go back to hq and the "fast money" halftime report. carl, thank you so much. four hours to go until the close. this is the best rally for the markets since march looks like. it is literally a sea of green behind me on the heap of financials very much leading part of this story today. in fact, as you saw across the top of the border there, many financials are the best performers. look at where the dow is today, it is up 2%. energy having the best day since january. take a look at gold and crude oil today. there is crude higher by 1 1/3%. gold is higher by 1.3%.
sell the rips. the market on fire today, but is the best strategy right now to sell the rips and buy the dips? the traders have your playbook. coin stars kiosks, the company is expanding beyond dvds and vending machines. we are talking to paul davis about where else he's looking for growth. and betting on bernanke with the fed chairman delivering it tomorrow and how you should be trading it, tony from pimco breaks it down. there's a lot of trade today, so let's do it. stocks are very much in the green. we'll find out what the traders think is behind all of this. joe, what is this? this is the beginning of what some suggested a rip-your-face-off rally? what is it? >> this is short rally representing ancestry.com in the financials, bank of america, morgan stanley, groupon. those are the names rallying today. secondarily, i go back to yesterday. the services number we got
domestically says the u.s. potentially, the fundamentals are not slowing down. you know know that the federal reserve is going to help the consumers more. it goes back to the overall theme of 2012. this is how you want to be invested. who has the triple assets globally? the united states, that's the theme and that remains the way to trade. >> mike murphy, we are at the highs of the day. the dow is good for 207 points. how are you trading today? >> it is simple. you have to take some profits. this market, what's been working, is buying the red, selling the grain. and today you have a lot of green out there. we have talked a lot of different sectors as joe eluded to, pretty much everything out there is working today, but you have to take money off the table here. if this rally is just based on the hope that you get something out of bernanke tomorrow, we could have a sell-off just as we are up almost 2% today. you can see that go back tomorrow. so sell, reload and be ready to rebuy. >> look, one big firm has taken
the short off the consumer discretionary names because it expects qe3. that's the main thesis for why they made the move. they expect the markets to perform because of that. >> on the may 17 show, we wrongly criticized goldman sachs for the consumer discretionary. now anticipating you'll empower the american consumer, goldman sachs has taken that off. i still say, look at the regional banks here. i own texas capital bank, no one has heard of this. it is in opposition today. pnc, another name that i added as well. i like the regional banks to get mortgage-backed security from the fed. >> stephanie, how long does the rally last? >> well, if we hear good things later today and good things from bernanke tomorrow, it could last a while. but i think mike is right in terms of taking money off the table, we have had a pretty good run. that said, earlier in the week when getting hit, some of the stocks were -- that we were
looking at were yielding attractive levels. even jpmorgan at 3.7%. wheaton at 3.25%. you have to take advantage. that's what we have been doing when the yields get attractive. you have to scale out of the names just give the big runs we have had. >> grasso, we last talked about the moving day average at 284 and change. now we are back over 1300. >> obviously, with the volume light, you can't get the wimpy moves. this is based on qe3 and the collapse of the eurozone not taking place. yes, you need to be prudent. sell some stockses. you had loss a couple days ago, quick profits a couple days later, you have to be smart about this. trade the market. it is truly uninvestable at this point. and it is very difficult to trade as well. so you have to lock in the profits when you can. >> all right. financials are having the best
day in three months as we said at the top of the show leading the market higher today, at least helping. mary thompson is looking to d.c. for the reasons why. >> there's a senate banking committee hearing being held as we speak. and at the hearing the regulators are bearing the brunt of the criticism from lawmakers. it is a wide ranging hearing today touching on dodd-frank, volcker and the jpmorgan multi-billion trading loss. essentially what's out of the hearing is regulators and lawmakers say the bank can easily withstand losses that are not a threat to the financial system. but the question from lawmakers is why didn't regulators, specifically the occ, catch the losses. we have one regulator again pointing out the criticism of all the new regulation that has come through in the wake of the financial crisis. keep in mind, it is typically loan, not trade, that verbally cause bank failures. questions as to whether or not the volcker rule would have prevented the losses at jarks
jpmorgan, investors say it is too soon to tell, but this could affect how the volcker rule is eventually written. this is also a positive for regulators and lawmakers commenting on the higher capital rules instituted in the wake of the financial crisis. one thing a number of people were watching for today's hearing that we have not heard yet, the fed governor, a lot of people were wondering to hint on whether banks, specifically the big banks, need additional capital requirements. no mention of that yet. but the one who is under fire today, scott, is the office of the comptroller. the head of that is thomas curry. his office overseas the big banks. specifically jpmorgan. he's been dodging questions about why his examiner failed to catch the trading losses at the bank. back to you. bank of america having its best day of 2012. can you buy the big banks here? he likes the regionals, do you like the big ones? >> i like the regionals.
jpmorgan, there's more to come with the trading loss here. looking at it and speaking to people close to it, we talked yesterday about the nasdaq and the way the ipo went. now looking at the way the jpmorgan trade has gone, from what i understand, the trade is still open. if that starts to leak out or when it has to come out, i think you can see jpmorgan trading quite a bit lower. >> why would you take the risk? the headline risk just to murph's point. when you have u.s. bank, bbnt, all the names we talk about on air, but it's for good reason. you have too much headline risk with jp morks michigan. the stock could be down 5%. >> you have headline risk, but the stock is trading below tangible value. it is only trading three times below tangible book value yielding 3.7%. i'm not saying the risks aren't there, but a lot of bad news is priced in. >> if you look at the charts on these, they have given back their whole year on all the bigger banks, they have given
back the whole year. the market is always forward looking. i understand the a little bit of a window, but you cannot say we are past that, the congressional meetings have not started yet. >> there's risk for jpmorgan, but searching for why the market is up or where the bottom is, you won't find it. >> there's risk in everything. you want to look at the reaction of folks. look at the analyst community. the analyst community over the last couple days capitulated on jpmorgan. they have taken down estimates on it. stephanie accurately points out how cheap the evaluation is. it is priced in here. we know the los is going to be well beyond $2 billion or closer to 5. the short trade to me in jpmorgan is over. >> jamie diamond himself, regardless of what you think about the hit to his credibility he may have taken in all of this, has come out to say, it is not going to be a problem, even if the loss does grow, right? >> that will be a problem.
that would be the first time i have heard a ceo not talk his stock. so for me, i would rather just look at the overall market. let's be quite frank here. if we all think you should lock in profits here and the market might turn around and go back below 1300. jpmorgan is not a buy here. that simple. >> joining us on the phone now with the real trade in financials, judge? >> last night we saw moody's talk about six german banks. i'm seeing just the positive reaction rather than negative reaction to that. so you know what we say, judge, when you get a positive reaction to what should be bad news, that means things were priced in. indeed these were ready to spring higher. they have unloaded to the upside, in fact. you'll look at barclays up 6.5%. that's not a german bank, but as far as the effects for the region, credit suisse is up 3.9%. deutche bank up 3.9%. i own that one.
up usual call activity here, judge. they came in and just bought a town of july 2012 calls. that i traded seven times that already. these are edrs, so you don't see as much action in these as the u.s. banks, but big institutions coming in, not just short coverings but opening up new positions because it is beyond the open interest. that means people are betting for the upside on these. and the moods have continued throughout the day. >> doc, are you telling me you are putting money into these banks right here? >> i did into all those three. barclays, suisse and deutsch bank. here we are back to whatever 33, and i said the range for jpmorgan, 31, 34, i don't disagree with either side of the panel's arguments about jpm, but i'll point out even as people have said the loss is going to be $4 billion, or it could be $5
as joe said, the stock is up another 3.5% today on that news. that news about the $4 billion loss was out yesterday. it was up a buck yesterday, too. >> doc, thank you so much. >> thank you, guys. >> one big reason for today's monster move, it could be the expectation that ben bernanke's qe3 could be updated in his talk with congress. tony, great to have you on the show. thank you for spending time with us. >> thank you. >> you have yellin tonight, which the market will be paying close attention to. maybe she says more than bernanke does tomorrow. what are your expectations on qe3? >> the more important point for investors is that the fedry mains activist instead of pessimistic. it is well thought in the market that the fed is a bunch of activists and deciderses. wherever they decide this month, if needed, the fed will do more.
so i think that so long as they convey the idea, that they will do more and are activists, whether or not the act won't be immediately consequential to markets, ultimately it is because markets seem to need this fuel, of course, to keep going, because in the absence of the physical authority being able to do much, the monetary authority must. so there are several options for the fed. they could extend so-called operation twist, but that gets very difficult because in operation twist, the fed has been selling short-term maturities on to three years and buying longer-term maturities. but there's only $160 billion of maturities left when the operation twist ends in june. so there won't much to twist. remember, the last operation was $400 billion worth. plus, if the fed does allow more in terms of operation twist, it will own a lot of maturities ten years or longer. already it has 30% of all u.s. treasuries ten years and older.
and in terms of maturity, this is versus 15%, the normal rate over the past years. if it does operation twist, lit have 40% of treasuries maturing ten years or longer. that could be a bit much in terms of keeping the market functioning normally. the second thing to do is a different form of operation twist, to use the repo market. it gets complicated but essentially they are buying long-term securities without selling the long-term securit s securities -- the fed could conduct a qeoutright and buy mortgage-backed securities. that's the likely option in the future at some point because of the other options i mentioned and disadvantages of the bigger thing they have done and will do is communicate rates will stay low for a long period of time. that has a very big impact in terms of lowering interest rates and the uncertainty embedded in the long-term interest rates. >> does the fed move get
diminished by the rates that are already so low? >> that's one of the reasons why the fed will move into mortgage-backed securities. many on the fed opposed the new qe which could be ge, which would rather see a form of credit easing in the sense of mortgage rates coming down. in the recent number of trade yields coming down, this has not come down nearly as much. so perhaps the fed, those who want more qe, can convince those who don't to get on board by engaging in practices of nbs. >> we are seeing a spike in the ten-year yield as we speak. how much lower, if in fact, you do believe yields will go lower, how low do they go? >> it's the same question to ask as how much worse will europe get? because what is driving treasury yields is that insurance premiums that investors are
placing in it, it depends. it is below fair value. fair value is probably closer to 2%. the way you arrive on this is to take nominal gdp where this trade at historically, subtract 75 basis points for the fed's activity and another 75 for the macro, and you arrive below the fair value yield. more than likely yields will creep up. again, we can't be sure because of this potential for uncertainty. >> tony, steve here. just to dumb it down, i often say i need it dumbed down. the average retail investor like myself wants to understand what we are looking at. you get the granularity of it, but is this based on the chatter or talk or thought of qe? should we be selling into this instead of buying it? >> arguably, treasury and rates are not rallying because of qe. because the fed in whatever it does --
>> i'm talking about the effects of the volatility market, about buying assets? >> the rallying asset today are more because of the spanish banks recapitalizing through the efsf or some other form of funding because of what's being seen is finding the money to recapitalize banks. there's some chatter about that possibility of the banks being recapitalized by its european nation. so that's probably more likely rallying markets than speculation about the fed. remember, what the fed has done is sort of cumulative with the stock effect that's more powerful. more important than the flow effect that would come from the new operations. so to say that a new operation or speculation about it might be driving us, even before they are speaking tonight and bernanke tomorrow. >> we have to run, but who is likely to make more news, yellin tonight or bernanke tomorrow?
>> a combination of them. and they are two of the trio considered most powerful at the fed. it is important to listen to both of them. so you have two-thirds of the trio. >> all right. tony, thank you so much. >> thank you so much. >> joe, reaction? my reaction overall goes back to the marketplace itself. i think we are having this discussion on whether or not we believe there's sustainability in this rally. the ultimate strategy comes down to owning stocks and franchises that you believe. go why a whole foods or emc on the sell-off. then have singular protection against it. i talked ant the short s&p futures today. i know mike likes sds. have singular protection in the market to hedge against what ails europe but own equities here in individual names. >> stephanie lincoln, can the conversation move beyond the safety of just looking for high dividend payers, u.s. centric, joe made suggestions right here that are not from the usual.
i want at&t, verizon, all the dividend payers, can you move beyond that now be it risky in the stocks you pick or not yet? >> you can look for company that is are growing the dividend. you are not looking at the at&texas, but looking at something like the eaton to grow dividend over time. i think you want the support and that income. >> okay. the dow and subpoena are at session highs now. the energy, financials, technology among the sectors leading the way higher. there's the s&p with the high at a 2% gain. same for dow industrials. the dow having the biggest gain for the markets overall since march. there's the energy spider, the xle is the energy sector with the best day since january. that's a 3% move in the xle. coming up on "halftime," the mid-cap growth manager is making a big move. he'll give you his picks. scott mullinix reviews his picks
next. and paul davis reveals his next big thing in the halftime exclusive. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.
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welcome back to "the welcome back to "the halftime report." stocks suffering nearly half the market value on mattress stocks. >> these guys are losing so much market share. they brought the value down of their earnings down so much. the stocks getting hit today but deservedly so. when you look at the name here, there's no reason to jump in to try to catch it. there are plenty of names out there trading at discounted multiples down here. >> mattress names, you mean? >> no, other names. where you wouldn't have to jump in to see a stock down 50% and say you need to buy it because it is under value. they are losing market share to other names in the mattress category. no need to jump in here. let the dust settle. >> how would you like your fort
folio up 7% this year? this is the best performing fund in the morning star category. driving the growth, we'll bring in scott mullinex. welcome to the show. >> thank you very much. >> you have had pretty good gainers. pet smart is at a new high today. ulta salon is up today. monster beverage is up year to date. you have been killing it on that end despite your negative contributors. >> yeah. those have been very positive contributors. the consumer space has been a space that we have done very, very well in. it fits our process. we focus on exceptional growth companies. and those have done well. >> yeah. we are talking earlier about how goldman sachs has taken its short position off the consumer discretionary. the discretionary space has held your fund to the 7% gain that
we've seen thus far. you see that continuing, is that still a place to look for opportunity within this market? >> we think it is. there are many, many companies gaining market share in the consumer space. the consumer space is quite large. and at the moment it's not growing very fast, but it's not declining either in the domestic united states. so there's a lot of opportunities like ulta and pet smart and monster beverage that are doing really well and making money. >> where else can we look? dollar tree is on your list. the dollar stores are continuing to do well. give our viewers other picks today. >> well, so right, dollar tree services the lower-end consumer. they are executing very, very well. we've owned that for three-plus years. my favorite name right here is petsmart. we think that's a good stock. >> stephanie?
>> oh, yeah. hi, scott, congratulations on the good performance. on monster beverage, they have 29% market share in the energy drink space, how high do you think that can go? >> well, it's been growing against red bull and other competitors at a nice, steady rate. their rehab product is pushing that market share growth. so we're thinking into the mid-30s. the category is growing 15% in the united states, which is great. and they are finally seeing some profitability in international markets and international markets are 14% of their business right now. and that's growing rapidly. so they have a lot of good things going at monster beverage. >> steph, are you going to follow-up or are you done? >> i was going to follow-up, then i have someone talking in my ear. actually, i was -- >> welcome to my world. >> just talking about the raw
material cost, the company is guided for it to remain elevated, is there a chance that the company is being conservative, especially since raw costs are coming down and that being another lever or two to the earning story? >> that could be. the gross margins in the last quarter were a positive surprise, so we don't see that impacting them negatively for sure. >> scott, thank you so much. scott mullinex. murph, a mid-play for me? >> perigo has a ton of upside. these are the guys when going to cbs, instead of buying the nyquil brand, that's one of the products these guys make. they have had phenomenal growth and a large upside. huge buyout candidate. you look on down days when the market is down 3% to 4%, you punch up prgo, it will be slightly up on those days above 100 with a ton of up side there.
>> pxd, great way to play the oil and natural gas domestic. okay, coming up on "halftime," is the bottom in for groupon following a 50% slide this year? and friday we'll be joined by the ceo duncan niederauer of nyse euronext. you don't want to miss that. we'll be right back. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.
the teacher that comes to mind for me is my high school math teacher, dr. gilmore. i mean he could teach. he was there for us, even if we needed him in college. you could call him, you had his phone number. he was just focused on making sure we were gonna be successful. he would never give up on any of us.
welcome back to "halftime." time for the top three trades. groupon is up 8% today on the upgrade over its steeple. the growth areas have developed. murph, short covering here? >> yes, you have short covering here. groupon has not performed close to rally, it is near 8% today. if you love the name, sell it on the rally. the rallies you need to sell. >> chesapeake up 7%. in talks to sell most of its pipeline assets with the upgrade as well. >> if they do sell, the rumor is
near $4 million. they need to close the gap this year and next year. it is trading nine times and the group is on five times. i would rather own gas. >> facebook and jmp securities, joe, you have been vocal about this one. let's listen to this. >> no options, no earnings. it is overhyped, number one. we don't know, they have not had any earnings. you don't step in and buy this ipo. you need to hear the earnings story that you'll get later in july. >> all right. you have been right. >> i have been right on facebook. what do you do now? >> i would not buy facebook. it goes back to the earning story. now the analysts tell you how great the earnings are going to be. it remains uncertain. you know when potentially i would buy it, maybe facebook should reannounce. that would be the best positive step they can take. >> they have come out already and made a comment regarding the
ipo and the fiscal performance. >> who are they? they have said absolutely nothing. they should come out and pre-announce after the close today. >> owe joe, when you are getting along with facebook, put the hoodie back on. >> would you buy facebook here? >> no. i wouldn't. you need to see more from the company. the fact they are not coming out to make an announcement speaks volume. >> i love the fact that this was the most -- >> it was worth a shot a couple days ago when you thought you had momentum behind it and the bad headlines trickled in again. you always have to have your limit down on this. so you look at 2575. that's your low. you have to shoot against that. if it breaks that, it goes much less. >> tim -- the global power of apple, tim cook came out and even tried to lift facebook by saying they are going to develop a closer relationship. it went up from 82 hours the next morning. >> they brought a boat load more stock to market, so everyone was
very positive right up until the end. and then we figured out, well, maybe the timing will be oaks. maybe the market will be able to absorb it, but it was the extra stock they brought to the market that really cracked its back. >> stephanie, pretend the stock didn't open at 8, it opened at 25, do you like it at 25? >> well, i think it is interesting at 25. i do think a lot of the activity has been because, to steve's point, there's a lot of fares out there, but it came out at a bad time in the market. 25 is interesting but there's still a lot of noise. i don't ever want to buy an ipo below its price, number one, and two, let the dust settle here for a while and let it find its base and floor. i do think the online advertising sector is growing in double digits the next several years. there's going to be a price, but just let the dust settle. >> all right. just trying to get you stirred up a bit. >> you are doing a good job. cortez, yesterday you told
me you shook the world by going long. freeport, you took off the short on the euro. that was short lived, huh? >> it was, scott. no one ever accused me on the football field in old days of being fast, but in this case you have to be. that's the biggest reason i did this. i have never owned this before. it rallied 5% in 24 hours from a money management perspective. i think it is more important from a grander perspective to keep this in context. one year ago today, fcx was at $50. it rallied great over the last couple of days, this is still a stock in a long-term downtrend. this is a dog with flees. more broadly for the macro, there's way too much central bank hopeyum. now this is on bernanke tomorrow, that's a dangerous premise. >> you think the central banks of the world are going to sit
back and let the world fall apart? >> i'm not sure about that. ichk it is a shaky promise. keeping the context, we have had a great rally. in may, we saw the s&p at 1400. back to 1309, it's a great move if you got along friday or monday. but in the context of investing, it is irrelevant. >> what type of pay are you willing to take here with 1310 basically the s&p, probably another 2% to the upside looks like real resistance to the marketplace. what type of pain are you willing to take if your shorts are on? >> i'm not sure. let me be clear on that. i'm taking profits on longs. i'm hoping for a bernanke rally. if he does hint at qe, i'll step in and shorten that. i would like the area adding resistance up near 1325 s&p. and that's where i'm looking to give short again. >> adios, cortez. talk to you soon. with the highs of the day, the best gain for stocks since
march. you can point to financials having a great day today. the energy sector is having its best day since january. the aforementioned financials best day in three months. bank of america having its best day at 2012. that stock is up 7%. if you look at the top line gainers, morgan stanley having a great day, citi, bank of america, housing stocks off to the races today as well. coming up on halftime, coin star introduced the barista of the future, coffee kiosks. but what is this big thing of the future? we'll have paul davis just after the break is up. today, our financial advisors lead from a new position of strength. together with bank of america, they have access to more resources than ever before. a steadfast commitment to help you achieve your financial goals in life. that's the power of the right advisor. that's merrill lynch.
welcome back to "the halftime show." our traders are fast but sometimes they do get burned. take a listen to what joe and steph had to say about aig last month. >> i like it long term. if its weak on the news tomorrow with earnings, you want to be financed. >> 107 million shares so far today. you have the wash out this morning. the stock right now is on the highs for the day. touching the 50-day moving action. i like that trade. shares of the insurance giant have plunged 14%. since you first made the call,
steph, you did say if it goes down by more, so how good is your conviction here on this one? >> and we have been buying more. and i would continue to do so. i don't think that the story has changed in any way. i think a lot of the reason that the stock is down from the quarter is it was up 47% into the print. so you had very high expectations. and the quarter wasn't so clean, if you will, but i do think the restructuring is good. they are getting more simple in terms of focusing on property casualty and life. and the balance sheet strength is also very important. .5 times value is too cheap to ignore. >> i guess the ultimate question would be, am i willing to buy it here on the sell-off, and i'm not. therefore, i made a bad incorrect call. >> hey, judge -- >> why? >> in terms of reaction to the earnings itself, i would have expected more favorable price action, more relative outperformance to the overall s&p itself understanding it has declined, and i hadn't seen that. >> quickly. >> we should see the tape earl
earlier from jpmorgan and do a double fast-fire the next couple of weeks. just saying. >> we keep all the tapes, including yours. >> that's right. we die by the sword. >> yeah. the next chance, coinstar and starbucks joining forces to hope several thousand coffee kiosks. fall davis is joining us exclusively with what's brewing at the company. paul, thank you so much for joining. >> we are really excited with the opportunity with seattle's best. this is the automated footprint and we have two terrific businesses in redbox and coinstar. now this opportunity we see it across thousands of stores and across large format accounts. >> i'm sure you're excited, you should be, but what makes you think people want to buy coffee through a kiosk. a number of people said that to me in preparation for the interview with you. >> that's a good question. we have been buying this for a year and a half to two years.
and what we have found is the consum consumer, we continue to get 90% satisfaction. so we are convinced there's a terrific business opportunity there. >> let's talk to the core of what you do. that being the dvd kiosks, update us on business at the current time? >> business continues to be strong. we continue to pick up market share. we are excited about continuing to expand our footprint across north america. we are expanding into canada this year. >> the competitive landscape is growing more crowded. you have obviously -- you have netflix but others are trying to do essentially what you're doing, partnering up with deliverers of contents, how do you separate yourself and standout from the crowd? >> we think we are going to be
uniquely positioned given our footprint across the country. so new releases at the kiosk is leveraging about 30 million in consumers. you have access to digital verizon subscriptions. this is very competitive. >> it appears you have been aggressive in your strategies lately. i saw that you signed on to family dollar, can you speak to that? >> we have been testing with the dollar channel. there's great micro trends for that. the test market, they did incredibly well, so we just recently signed that and we are really excited about expanding in that chapter. >> when do you think that would take place? what does it mean when you are west testing? >> we are going through that
right now. we have test pilots before we agree to sign off on the account. we have been doing that for a few months. so now through the end of the year we'll start expanding, but we see it as a terrific opportunity. >> what worries you? you have an optimistic story to tell. you just did a deal for the coffee kiosk and the deal with verizon later this year. do you have a deal on that? >> we are saying the second half of the year is our target to be in market with the product. >> so as i said, what worries you then? get away from the optimism for a second. tell me what worries you at night. what do you worry about for your business? >> any time you're experiencing the growth we are experiencing, it is always how do you prep your organization and get the right people in the right jobs and get the organization that can handle that kind of growth. we are very fortunate we have a terrific team, a great leadership bench. but those are the things that we are always concerned with. always looking at new ways to innovate. we have eight seeds or new ventures in the pipeline, so getting those into the market,
coffee is our first step of getting that into the market. we have seven behind it in the pipe line as we speak. >> paul, mike murphy here, quick question. great job in the expansion. looks like you are doing a great job going into other areas of the business, but when you set out, you had the kiosks and competing with netflix, at least to the market that was the main competition. now at this point as you're looking to go into all different areas, was that a plan from the beginning to be in all different areas, or did it start out as expanding into the market conditions? >> it's a great question. the strategy is near automated retail. consumers love it because they don't have time on their hands or comfortable technology because it takes underutilized space in the store. and we like it because we can innovate in the space and deliver products that consumers
want. we are focusing on that area. we are doing thing that is are natural extensions to the product, like we talked about with digital expansion with verizon. but our core is really in remains of automated retail. >> what's one thing that may surprise you that you are looking at? >> what may surprise you is our success in some of these new products that we are putting in the market and are testing. we are optimistic. we have not talked a lot about it, but we have a lot of optimism about running a lot of the new ventures we are working on. >> my control room is going to kill me, but what's your opinion of facebook? >> we don't talk much about people, other companies. >> i'll reserve that right. >> come on, you are not going to give me anything on that? >> okay, good to have you on the show. thank you so much. >> be well. guys, coinstar quickly. >> i think you can still own it.
>> nasdaq getting the biggest pop, energy financials continue to be the big winners. coming up, copper is having the best day in two months. gold is moving higher. is there a way to trade the metals and a new one at that? dennis garman is going to figure that out next. i'm ryan sullivan. cnbc is heading down to atlanta for a town hall event on small business. we are going to be hosting some of the greatest entrepreneurs of our time, small business owners will share their challenges. we'll look at opportunities and we'll learn new strategies for success. join us as part of the studio audience for free tickets. go to firstname.lastname@example.org. we hope to see you in atlanta. [ woman ] for the london olympic games, our town had a "brilliant" idea.
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spectacular day in the big town. today on "power lunch," ride the rally or time to do the opposite? time to be afraid? see why some say a rally like today's is just what we don't want to see. plus, two sea suite executives on today's market in the health of the overall economy and what it's going to take to get them hiring again. and finally bracing for bernanke. that and more top of the hour. "power lunch," scott and more of
welcome back to the "fast money" "halftime report." our next trade, copper's having best day in two months on expectations that big metals consumer, china, about to cut interest rates. dennis gartman joins us now on the fast line. dennis, welcome again. what is the trade? >> well, the trade in copper, if you wish to own it, is that you're just getting a bounce. we know that the chinese are going to cut their reserve requirements again.
they've only cut it twice thus far. usually when central banks begin the process of cutting reserve requirements, they cut them, five, six, seven, eight, nine times. there's plenty more to go. i would be careful of being an owner at copper down here. for now you have to consider the bounce in copper to be nothing more than that, a bounce. it is up. it's up sharply today. but we have to remember copper at the start of may was at $3.85 a pound. it got all the way down to $3.25. the fact it's trading back to $3.35 is nothing more than a technical correction. you don't get bottoms formed or one shouldn't think that a bottom is formed just because you've come 4% or 5% from the lows. it takes several days, it may take a week to prove that a bottom has held. so be careful. >> dennis, on the concept potentially that the chinese do cut interest rates, you look at the australian dollar using the etf as the instrument to get long, but do you think the trough is in here and a cut would be favorable? >> well, i'm not sure that a cut
would be favorable in china yet. the last time they cut you had a bounce of one-day in the shanghai composite and went to new lows again. the concern is if they cut it's because the chinese are fareful that their economy is weaker than we thought. i would just be very careful. even the bounce in stocks here in the united states is simply from an oversold condition. it may continue for a while, but usually bottoms are not formed in a pattern of a v where you simply slide into oblivion and bounce violently higher. usually you get a bounce violently higher and go back and test and retest and test again that low. again, be careful. >> is that, den any, why you have barely any equity exposure in your funds? >> that's exactly the reason why. i think you have to be very careful. we have sold off so much. we've done so much psychological damage, we still have economic news that is obviously deleterious, not supportive.
i'd like to see the ism numbers turn for the better, not for the worst. i would like to see economic data that comes out where the revisions are for the better and not for the worst. and we haven't seen that yet. we've done a lot of damage. usually when you do that much damage it takes some time for -- for everybody's sores to heal. >> dennis, appreciate your insights as always. have you back soon. >> thanks, sure. >> murphy. >> dennis likes gold. i think the gold miners are a way to play, look at gdx moving up today. but i think it's even better or more safe way to play the gold trade as a fare trade. >> why safer than just the gld, for example? i mean, is it more expensive, right, for the miners to get gold? it's difficult. if you think gold is going up, why not the gld? >> i think the gld has too many other x-factors involved. if i can get a smaller basket of higher beta names, i think it could outperform. >> final trades when we come back.
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