tv Fast Money Halftime Report CNBC December 13, 2012 12:00pm-1:00pm EST
always a good thing. of course, more on where we should trade for 2013. >> exactly. right now we're leaving you with the markets fairly flat. the s&p 500 down by 3.5 points. the vix is higher today by 1.5%. and we do have apple trading lower by about 1% right now. nice setup for "the halftime report." >> indeed, it is. down 27 points on the dow. the rally from the fed, of course, relatively short-lived as things turn out. let's get with it, then. here we go. this is now "the halftime report." >> guys, thanks so much. welcome to "the halftime report," four hours to go until the close, and here's where we stand on this day on the street. take a look. we do have red arrows across the board. here's what we're following. fedspeak. what did the chairman really say yesterday to the markets, and are stocks just getting it plain wrong? rally in motion as r.i.m. shares hit a seven-month high.
our traders square off on the suddenly surging smartphone maker. google has battered apple over the past six months, and the two stocks are going in very different directions yet again today. which one is your best bet right now? we do have them set up in the wrestling ring here for the battle royale. our traders for the hour, josh, joe, stephanie, jon, which one is your best bet now? because they've been going in opposite directions. >> they are. apple up 31%, google up 9% but that doesn't matter because more recently apple falling 20% and google 6%. which is the better bet longer term? they are in apple. that's what i believe longer term. the right investment is. it does not say that i do not believe google is not a good investment because i do believe that it is. >> harry reid is speaking right now. let's go down to capitol hill. >> -- calling on speaker boehner
for tax cuts to the middle class. today senator cornyn, the second ranking democrat in the next congress -- i'm sorry, don't i wish -- the second ranking republican in the next congress -- joined the chorus in calling on speaker boehner to do the reasonable thing. here's what he said. i believe we're going to pass it sooner rather than later. we really don't have much leverage there because those rates -- >> i'll take it back from harry reid while we try and figure out this audio issue that we're clearly having from the majority leader and his comments down in the nation's capitol as the democratic leadership gets its turn, if you will, at the microphone for an update on the fiscal cliff. we've already heard from speaker boehner just a short time ago. i think we have that cleared up. let's go back to mr. reid. >> at some point reality should set in. the only question is how much financial stress middle-class
families and our entire economy will have to endure during this process. there are many other pieces of business critical to middle-class families that we could be working on if we resolve the fiscal cliff and the three leaders here with me today will talk about that for a little bit. but instead of getting things done, we're forced to wait and wait and wait for the press conferences the speaker is holding, hoping that reality will finally set in. it hasn't yet. he just finished another one just a short time ago. and each one of these press conferences he holds, he's ignoring the voice of the american people. speaker boehner knows or should know that the middle-class tax cut that we have to pass would sail through the house of representatives. democrats would overwhelmingly vote for it. i would doubt there could be any democrat that would vote against it. and as we know from the course
of republicans, that are added to every day, more republicans join every day. now, i understand the house is gone. i think one reason they're asking to leave is so more republicans walking down the halls won't be saying, i think what he's doing is wrong. they're leaving. it's hard to comprehend. but they are. we have nothing to do until they do something. nothing to do with these other issues because we have -- we're waiting for them to do something that will help the middle class. the american people shouldn't have to have their tax cuts held hostage to these neverending press conferences that he's holding and live self-interest. it's time to really put the middle class first. senator durbin? >> thanks, senator reid, for
allowing us to join you this week. >> dick durbin steps up to the microphone down in washington. we also want to bring in our own eamon javers. what happened to the talks taking a positive turn? because you certainly wouldn't know it by the comments from either the speaker of the house or the leader of the democratic party in the senate. >> yeah, absolutely. we're playing press conference ping-pong here in washington for the past two days. and we haven't really seen any behind-the-scenes progress since that flurry of paper exchange on tuesday when we had an offer and a counteroffer from the white house and the house republicans. since then, things, at least publicly, have seemed frozen. and what we're seeing today is a little bit of a hardening of the public rhetoric, anyway. clearly they're negotiating behind the scenes. and neither side is happy with what the other side is offering, and that's why we're seeing this press conference ping-pong going on today. but where they are privately, you know, we're just not able to get those details right now.
clearly there's some kind of impasse here. >> correct me if i'm wrong, but wasn't there supposed to be a public moratorium? >> reporter: yeah, well, there was a moratorium on leaks, right? so we saw some of those details leak out on tuesday. and they had said that they weren't going to talk in public about what the specifics were that they were exchanging. but ironically, they both come to the podium and say the other side should put out more specifics even though they agreed not to. there's a little bit of kabuki theater and this manufactured outrage we're seeing on both sides. both sides know that they need to get to a deal. the question is whether any side is now really seriously contemplating actually going off the cliff. you do hear that in a minority of both parties, saying you know what? we could get what we want if we go over the cliff. and there are some republicans who might feel more comfortable voting after we go over the cliff in early january. that vote, then, would be a tax decrease vote if they let the taxes automatically escalate and then vote to bring them down but not as far down as they were under president bush. that would be an easier vote for
a lot of republicans. so that's one option they have in their hip pocket. definitely a hardening of the rhetoric. >> i want to talk to the traders but one more question. you've maintained throughout when we get these public news conferences and these ping-ponging statements, if you will, that it was largely theater, that there was actually progress being made behind the scenes. what i'm hearing from you now is a suggestion that not much is going on in a positive nature behind the scenes now. and that seems to be a bit of a change. am i right? >> reporter: i think it is a bit of a change, yeah. we definitely saw an exchange of offers on tuesday. and we know that they -- they are negotiating, and these negotiations are continuing. we haven't seen anything that's come to light since then. so we don't know whether things are -- where things are progressing behind the scenes, but just judging from this public rhetoric now, it does feel a little bit like a hard hardenning of positions. i wouldn't say that's cat strask but definitely hard-nosed negotiations. >> eamon javers in the nation's capital.
guys and stephanie, you're being held hostage because our lawmakers simply don't want to rise above and they continue with the news conference and the ping-ponging comments back and forth. josh? >> i think, you know, as i've said for a while now, i really think this is boehner negotiating with the house republicans. this is not really boehner negotiating with obama or the democrats. and i think that's the way it's going to continue to be. so i really distrust anything that any of these guys are saying at a podium because i think there is a much deeper-level conversation going on. and again, if this is just based on what i read and hear, i don't have any other information, but, you know, i don't get the sense that things are quite so dire or quite so close at any given time. i think it's just really the media trying to pick up on clues and hints. and that's really hard to do. >> maybe the market itself is trying to pick up on clues and hints as well. we're in negative territory across the board. it's not like we've gone off another cliff, if you will, in the stock market, but we're certainly not where many thought we would be or even should be
after what the fed chairman had to say yesterday in the more accommodative policy that's continuing to come from the central bank. >> there's two conversations. number one first is the fiscal cliff. and i think the market itself is expecting, as josh had said, that there will be some form of a grand compromise coming. that is a little bit concerning because i think everyone really is treating it with not so much cautiousness. and the vulnerability to the down side, is pretty significant if we fail to compromise. on ben bernanke and his ability to once again give the market what it was supposed to want -- >> and we'll talk more about that later. >> -- and we'll get into that, but let me say this and i'll walk you through it later. i think the message of the federal reserve since the beginning of this year should not be listened to by investors. >> steph, so how do you try and navigate the stock market, again, when we're getting these comments out of washington, and as our own eamon javers reports, perhaps things have taken a
small step back in negotiations? >> i think it's interesting we're only down 29 points on the dow. that's number one. and this is just what negotiations are, right? and so okay, fine, maybe they're at an impasse for now, but that could easily change next week. you kind of have to ignore this. if you're a long-term investor. >> if you have a stock that you want to buy -- >> i'm looking for it -- sure, i'm looking for it to pull back. i'm looking for costco at $95 or yeoman under $65. i'm looking for stocks to buy with strong fundamentals and where there's at least some good visibility and good friends. we've talked about kind of the industrial recovery and the global recovery in china and in brazil. and i think that theme still is very, very powerful. and i think home here, housing. and i think the fed yesterday, the nbs purchases, reinforces that housing will continue to be a theme. >> all right. we're going to take a quick -- i'm sorry. >> that 6% surge -- no, that's okay. out in california, those housing numbers, highest in several years, that's a good sign. and all we've got to do is get harry reid and john boehner out
of that alternativalit john mcafee is in because they seem to be living in that same weird world that that tech entrepreneur lives in. they've got to get and rise above, as we've said over and over again, they do that, this market's got a lot of gas to the upside. on the way, judging big ben. where traders stand on the markets today after the fed chief delivers fresh thoughts on the economy. and r.i.m. shares trading at seven-month highs. can they continue to deliver returns to investors? first, is the magic in the makeup for estee lauder? executive chairman william lauder gives us his read on holiday sales, the economy and of course the fiscal cliff gridlock. he's next up on "halftime." "fast money" isn't just about a bull market. it could be going up, down or sideways. >> in the blink of an eye, everything changes. you've got to be able to surround the trade. >> we're all doing what we do for a living, and we're all together as a team. but we all come at it from a
different perspective. >> it's all about moving the odds into your favor. >> it's really what drives up the value of the show. >> i am jon nagarian. i am "fast money." >> i'm stephanie. i am "fast money." >> i am steve grasso. i am "fast money." ss? at fidelity, we do it by merging two tools into one, combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. we like this idea so much that we've applied for a patent. i'm colin beck of fidelity investments. our integrated technical analysis is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. try running four.ning a restaurant is hard, fortunately we've got ink.
the schact is watching something. four times its average daily volume. of course, reports in "the minneapolis star tribune" that richard sculze, founder, might take a bid for $5 billion to $6 billion that could come within a week. the stock even with the 16% pop, guys, still down about 40% year to date. >> brian, thanks so much. doc, biggest gainer in the s&p, that's best buy. >> yeah, and they're betting at that 15 strike in december, scott. in other words, they're thinking over the next day or into next week, we see a pretty significant upside out of those calls. they've been bought very aggressively for right around 50 cents today. they've moved up to into the 60 cent range, only a 10 cent gain, but on a percentage basis, that's pretty good, and they've got a week to go for those calls. >> do you buy the stock in hopes that he's going to get what he wants, he's going to pay the price and he's going to take the company? >> no. that's why you buy these calls. because you've got a 50 cent
risk instead of a $14 risk if you do that, if something does come out that's like that $6 billion bid, then the stock moves up into the 17 range. then these calls, you know, you've got a nice quadruple on that trade if you get that. >> yeah. that's what i was hoping to get out of you there. you know, the options strategy obviously pays off a lot better sometimes than -- certainly cuts down on the risk, right? >> cuts down on the risk, and the increased investment on those calls and the return on those calls can be astronomical. that's why the institutions are playing there. >> yeah, okay. so best buy is the biggest gainer in the s&p 500. stocks, meantime, are at session lows right now. perhaps reacting a bit to the comments coming from speaker boehner and also senator reid down in washington regarding the fiscal cliff. meantime, there are just 12 shopping days left until christmas. if you include today. and big questions remain over just how much consumers will spend this year. nowhere is that being watched
closer than at high-end brands like estee lauder with licensing agreements with everyone from coach to coors. john lauder is on with us. thanks for coming on. >> thank you for having me. >> you have as good a read as anybody on the high-end consumer and what they're doing now. what can you tell us? >> well, right now we see the high-end consumer is continuing to spend. she has a great deal of confidence in north america, not perhaps as aggressive as we'd like to see her, but she's doing pretty well. we're seeing the high-end consumer in asia continues to be strong. there's been a lot of noise about the demand in china. the reality of what we're seeing is high-end demand in shanghai, beijing and other very developed cities is not as strong as it used to be, but it still continues to be very strong. but the demand in tier two and three cities continues to be extremely strong and fueling a lot of the growth we have in asia. >> do you have a feeling that you'll have a pretty good holiday season? >> so far the numbers seem to be pretty good. you know, there's talk about the
last ten days. last ten days is a very important part of the success of the season. and i think everything we're seeing is, we've got great confidence for the last ten days. >> why do you think the stock has underperformed the overall market slightly? it's been a tremendous gainer over the last five years. it's up more than 170%, but this year it's up 7%, which is obviously nothing to sneeze at, but if you take a look at what the s&p 500, for example, has done, it has trailed a bit. >> you know, quite honestly, i'm in the business of selling a lot of lipsticks, fragrance and great skin care products. and the reasons why people enter and buy our stock are based on maybe some reasons that have something to do with perhaps what was said before, buying options and calls. all i know is we've got a fantastic portfolio of brands with fantastic people in all our stores. we've got great demand from consumers. we continue to consistently deliver over the long term. what our company is great at is long-term delivery of success. and that is what we ask all of our investors to look at our
company with, long term. long term for us as a decade. >> let me ask you about the fiscal cliff. certainly a topic we've been speaking about on a daily basis and many times during the day. we've just gotten comments yet again from mr. boehner and reid in washington. do you think that's having any impact on the type of people who buy your products? >> you know, i think any time when there's a lot of talk about what the future may hold for government, for taxation, for financing, that's going to give some people some trepidation about spending. if there's word about the fact that you are going to have higher taxes come the new year, won't have as much to spend, maybe you hold back a little bit. what we like about our business is, it's a relatively low barriers to entry. consumers can buy the luxury of our beauty for $17, $18, $25, $30. this is not a huge investment. and so we're finding a lot of consumers are finding their way into beauty because they don't want to spend $1,000, $2,000 or $3,000 on very luxurious, larger
items like a handbag or a new car, for example. so beauty has its frequency shoppers. but that being said, overall, if the consumer is not certain she has the disposal income, perhaps she holds back a little bit. >> sir, one of my traders, joe, has a question for you. >> yes, mr. lauder, how concerned are you in terms of the personal care management industry in 2013 being exposed to really a contraction in spending from advertisers as they look at growth going forward and see that it will be muted? >> you know, i'm really not certain because what we see is personal care products are consumers buying it again and again. and our job is when they come back to replenish what they like and need to use and want to use, we show them something else we have that's new that intrigues them and interests them. contraction in advertising and the voice you have out there may not drive as much awareness, but the fact of the matter is is there's still a basic level of
traffic of consumers going to the stores and shopping. >> let me ask you, you mentioned china. you mentioned how things are going fairly well there. on a scale of one to five with five being the most robust, where would you assess the chinese economy is of right now and how it directly relates to the types of products that you sell? >> well, as compared to most of the rest of the world, i'd put china at about a six or seven because the reality is is the rate of growth of china, if you look at the long-term prospects for china, they're extraordinary. you realize that china is just in the first phases of a long-term domestic development. they're building an infrastructure of transportation, building an infrastructure of consumption in so many different parts of the world. it's such -- so many different parts of the country. it's not just what shanghai, beijing does. it's what so many other parts of the world are doing. and i think the long term over the next 20 to 40 cleyears of
development for china. >> thanks for coming on. william lauder, talk to you again soon. i mean, china, their overall story, steph, sounds pretty good. >> it does. >> whether it's chip that or here in the united states. do you run with that? >> it's trading at 23 times forward estimate. it's expensive. certainly great double-digit growth. they're doing a great job on margins. based on his comments, look at coach, 12 times forward estimates and they've got a great presence in china and trying to increase their market share. they've got a great brand and they're growing their products here and all that. i kind of like these comments, but i'm just going a little bit cheaper. >> the industry since 2007 has return returned over $100 billion to investors mostly through dividends. if there is a change in the dividend taxation policy, this is a sector that will be most challenged. i also think that the advertising contraction in 2013 is going to be problematic. >> let me just interrupt you for one second. i apologize. look at the headline on the bottom of your screen. s&p 500 puts negative watch -- or negative outlook on the uk's
aaa rating. you see the pound taking a pretty big hit versus the greenback on that news. you can also see, you know, our stock market's already been under, you know, a touch of weakness given maybe some of the comments out of d.c. but there's the s&p 500 down 6 points, nasdaq down as well. we're at the weakest levels of the day. that's certainly a headline to keep an eye on and the impact it's going to have in the currency markets throughout the day. >> i think that's a commentary on austerity. cameron came in and stripped austerity measures. it's been problematic. be careful how much austerity you actually induce into an economy. shares of back referlackber r.i.m. trading at seven-month highs. whether the company has its mojo back. we head to the trading pits to find out why gold is falling on its post-fed decision gains. we'll be right back. bob, these projections... they're... optimistic.
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we had today. and that's apple versus google. i want to bring in investor porter bibb who has plenty of opinions on both companies. welcome back. i know you're smiling at that comment. never one to hold back on either of these names, right? >> that's right. i mean, it's ironic because you've got google going up. and they ought to be going down because all of the comments that have been made today on your program about advertising being soft in 2013 is going to really impact on google. >> so why is it going up? why is it above 700 bucks? why has it so far outpaced apple over the past six months? because it's not even a contest if you look at it within that time frame. >> that's right. you'll have to ask the market because the market is penalizing apple which is the best-managed company in not just the country, in the world. >> why did you sell your position, then, porter? >> because we make profit on a day-to-day basis. i'll be back in there. there's a lot of growth left in apple. but the perception in the market is, they don't have any more i
kn innovation. tim cook may be an okay manager but he's no steve jobs. the fact is that everyone was hanging on the apple tv project, which is a head fake. they don't have a tv project. and they're never going to have a tv project in terms of a flat-screen set. that's a crazy business. >> but porter, the thing with that comment is -- and you've made it here before -- is you're an outlier. everybody else on the street -- and there were credible reports earlier this week from all things "d" i think it was -- that they're actually testing components. and if you read into some of the comments tim cook made to brian williams of nbc news, it certainly sounds like he's working on something with a flat screen and a bunch of switches on the side. >> i think they're playing around. but where the apple tv project is going to lie is not in hardware but in software. they're going to put software into the ipad mini or into some other device that's a portable device that's going to stream internet tv and other tvs into the set without a set top box,
without the cable system's clunky remote control. and they'll also make it interactive so you can buy things off the tv screen. and that's apple's business. they are not in the hardware business of selling low-margin commodity tv sets. ask samsung, ask lg, ask sharp, ask sony. they're all losing money on those products. >> porter, i just want to shift back to google for a moment. clearly the stock's acting very well. a lot of that just has to do with, i think, technicals, the fact that it doesn't have some of the same issues apple has in terms of people worrying about competition right now. it also has $139 a share in cash trading on a market mumt peltim. i'm interested in the time frame and the possibility of success for google fiber. i know it's very early and they're just testing it, but could that ever take on the big cable companies and be a viable national product? and if so, how should we think about what that would be worth? >> theoretically, they can
certainly take on cable and satellite and the telcos because they've got a better, cheaper, faster system of delivering video and other content to people on any device. television or otherwise. so whether or not they ever roll it out is a huge problem. they've got to deal with the fcc. they've got to deal with the ftc. and they have to deal with the cable companies. and the satellite guys who have a virtual lock on distribution right now. >> last question. when do you buy apple back, porter? i mean, when does the buy siren go off for you? you said you're going to do it at some point. >> i think apple right now is a steal. i think that 2013, you're going to see them scraping $700 again. >> porter, what's the catalyst to get it to $700? >> well, what people forget about apple, everybody looks at innovation. what are the new products that tim cook is going to break onto the world? they own the whole distribution channel. they don't have a middle-man
retailer. they have the best distribution system in the world, and their margins are terrific. sure, their margins will go down because they invented a category with the tablet. and they're going to be competitors. but nobody's created a product yet that can come close to touching the ipad. >> porter, i always enjoy our conversations. we'll have you back soon. >> great. thank you. >> you be well. gold losing luster today, dropping sharply post-fed. so what does the latest round of qe really mean for the yellow metal? let's go to jackie deangelis. >> the headline in the pits is clear today, sell gold but the came blame the dollar. falling over 25 bucks despite a flat dollar. what's behind the selling, and is gold done for the year? let's start talking futures now. rich is at the cme, anthony is at the nymex in new york. you've been bullish on gold. what's behind the selling today, and will you still stay long? >> yes, jackie, i will still stay long. what hatched yesterday, traders
were waiting for the fed meeting, they got the decision. they were looking for gold to go above that 1730, 1731 area. it couldn't break through and the liquidation started. it's not new shorts coming into the market. >> all right. rich, over to you. we dip below 1700. is the technical picture still intact for gold? >> it is long term, short term probably not. we won't get that big rally till next year, in my opinion, 2013. jackie, pull up the chart. the two levels to watch on the upside will be 1730 -- excuse me, the one level on the upside, and the down side will be the 200-day moving average around 1667. as anthony noted, a lot of us came into the market long expecting the market to break out. it didn't. it got above 20 to 25, petered out. a lot of guys did the same. after the market closed, we saw the market liquidating. i came into the market today a little short against that trend line. so point being, break out either side of the range here, and we'll get a big move. i don't think it happens until
after the end of the year. 2013. >> okay. well, let's go arnold the hooun. are you buying now? >> yeah, about $15 lower, i'm a buyer. >> rich, you said you went into the market short today, but would you buy it at any point? >> yeah, if it gets down to the 20046 day moving average, i'm a buyer and i'll keep buying it until it fails. >> now you know what they're doing when it comes to gold. how about you? is the top in for gold or does it still look good? logon to futuresnow.cnbc.com we'll give the results at 1:00 a.m. we'll also talk with b of a's technical strategist. why he has a price target of 5,000 bucks an ounce in two years. you don't want to miss it. scott, back over to you. >> thanks so much. we'll be sure to catch that. still to come on "halftime," our top three trades. plus why the do you may be w bee of the down side. bernanke's land of confusion. what exactly did the fed chief say, and how are traders acting
on it? we'll get answers. then we have our big debate coming up on research in motion as well when we come back. we're halfway through the trading day. next, we cover the day's dead cat bounces, the island reversals, the breakouts and breakdowns in "pops & drops." plus, they say the dumb money trades in the morning. and the smart money trades into the close. so we reveal what that smart money is buying and trading before that final bell tolls. when "the halftime report" continues. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars.
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weaver . we've made the turn. international paper, that's i.p., selling its business products unit to georgia pacific for $750 million in cash. and stephanie link, the stock is up a little less than 1%. >> the company continues to shed noncore assets. it really validates the acquisition with temple inland. it was a little bit more than expected, $750 million. i think more importantly, shipments for the most recent pulp trends, up 12% year over year. and inventories are flat.
so i think this sets up for another price increase for the industry, i.p. benefits. >> if you listened to david faber, you'd know this was coming and wouldn't be surprised because print is offering $2.1 billion to buy the 49% of clear wire. it doesn't already own just like he said they were going to do. doc? >> yeah, kudos to faber. he gave us that, i think, on tuesday this week, judge. and the stock today up 13%. obviously, they've got the backing of soft bank. so you would think because soft bank just put that big investment into sprint. i think there are some betting that maybe the deal could be sweetened a little because obviously it's trading above that takeout price. >> good for sprint, doc, quickly? >> i do think it's good for sprint because this is that spectrum they bought from at&t and then got in bed with sprint to expand that. the system across the country. and i do think it's good for sprint and ultimately soft bank. >> i think sprint is the best performing stock in the s&p 500 year to date. i'll have to double check that but i think that's the case.
lexmark has been downgraded to sell from hold at deutsche bank. the analyst there calling the stock, josh, overvalued. >> well, this thing's up 30% since august when they j jettisonned the inkjet printing. we've already seen the best we'll see in terms of cost savings. all of the positives from that spinoff are baked in, and there's probably not a lot of opportunity. and i think that sounds right. >> all right. well, you've taken a look at the markets since mr. bernanke made his comments at the news conference yesterday, answered a few of steve liesman's questions at the very top of that as well. the markets are still trying to digest what he actually said yesterday. you guys, i mean, you tell me. josh, didn't he say that they're going to buy more bonds and they're going to keep interest rates low for an awfully long time? why is the market doing what it's doing? >> 48 of 49 economists surveyed expected exactly. >> how did you read it? >> there's only one way to read it. cash is going to continue to be inhospitable, and bonds will be asymmetrically risky and that's
not going to change until there's a meaningful improvement in the economy. so really i don't think it's very difficult. one thing i do want to point out and i think steve will agree with me, this is very similar to what we saw when qe2 was announced in 2010. you had a four-week selloff before the market figured it out. and then we had remember the rally started. the markets said wait a minute, this is actually happening, this is actually for real. so i wouldn't be surprised if the market needs time to digest. i do not think the knee-jerk reaction is always the correct one. i don't think people digest every headline immediately. and i think this is a case of that. >> joe, how are you trading what happened yesterday? >> i look at it differently. i look at it as the federal reserve gives me a message. and i interpret and digest the information as either actionable or not. kind of like a research analyst that i believe is hot or a trader who walks into my office with an idea and i know that idea is going to be a good one. i think the message from the federal reserve to traders is now lost. if you go back to march and think about the march 13th meeting, we were coming off of
three consecutive headline labor reports well north of $200,000. you had both ben bernanke. you had the minnesota fed chairman -- >> coach likota. >> thank you for bailing me out. >> liesman will be happy i knew that. >> the economy was getting better and the ten-year went from 1.8% all the way up to 2.40. what happened in april? you printed 68,000. the message of the market was wrong. fast forward to september, same thing. the announcement of qe3 was supposed to be reflationary. within one week it was the high of the s&p. >> let's go to stephanie link before we bring in the professor to decide if any of you are getting an "a" on this pone. >> i think the fed will continue to keep rates low because we're only growing gdp at 2.7%. we're looking at the fiscal cliff and austerity and he's doing what he can just to keep this thing afloat and to not go back into a recession. i think rates stay low for an
extended period of time. i don't know if we get to 6.5% next year or in two years from now, but that's not -- it's not going to be like all of a sudden we get to 6.5 and bam, he lifts -- he stops what he's doing. i think that they're going to take into account a lot of what's going on in the economy. and we'd better see some pickup in a lot of different fronts for them to actually stop these programs. >> liesman's here. he's typing away as each of you were giving the answer. so who's right, steve? the market seems to be perplexed here because the stock market sold off during the news conference that you were at. and got your three questions in, by the way, i think at the top. and then it's down again today at the lows of the day. >> you know, it's interesting, should i be grade being the students or grading the professor? i guess that's the question i have. in a sense, they get to always be right in the following way. bernanke wants you to have a message. if you don't get that message, it's his fault. and it's not clear to me that -- he may have failed in this regard. i thought stephanie came closest
to what i think the fed chairman's trying to do, which was yesterday convey a policy that we are easier than we thought -- than you thought we would be. and that 6.5% unemployment is supposed to convey that we're not calendar day certain. we are data certain. and unless that data gets down to being closer to what we want it to be, then we're going to stay on hold. and by the way, that is either equal to or better than what you thought before. you were the only one to kind of mention that. so i'm thinking maybe joe is also right in the following way. that the message is being lost somewhere along the line. i disagree with you. >> the market seems to disagree. >> it's six hours worth of option. how can we make a conclusion that the market disagrees -- it's six hours. >> because i didn't say you were right first doesn't mean i think you were wrong. let me tell you that the federal reserve agrees with what you're saying in the following way. it does not believe that the continual purchase of securities
is what causes markets to move. it believes that the cumulative amount that it has, the stock of debt taken off the market rather than the flow of debt is what influences things. so there still may be time for bernanke to get this right. >> steve, thanks so much. guys, thank you as well. up next, rally in motion. we debate where blackberry maker, r.i.m., can keep its momentum going and the dow gaining 10% over the past we're. why the strong run may be in jeopardy. details when "halftime" comes back. she keeps you guessing.
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oh, the things we want to say but can't. today on "power lunch," translating bernanke, the three questions left unanswered following the big fed announcement yesterday. and the changes you should be making to your portfolio right now to get ready. strong retail sales numbers last month, but as anxiety over the cliff this month, is it keeping shoppers from spending at holiday crunch time? not doing a thing for me, baby. i'm out spending. and the google map app is back on the iphone. the story today. now back to scott. >> see you at the top of the hour. it's been quite a turnaround for shares of r.i.m. at their highest level in seven months. is there more black and blue ahead for the blackberry maker? josh says it's time to buy. joe says huh-uh. boys, let's debate it. why buy now?
>> i was on the show two weeks ago with the same debate at 11 and i said this thing's got legs. you could play it with a short-term stop. i still think that's the case. let me be a little nuanced. the rsi is like 80. short short term, very overbrought. expect a small pullback. however, the trend is higher and i've got it tell you, i would sell the news when blackberry 10 does launch. but between now and then, this virtuous cycle of analyst group ja upgrades probably continues and you do not want to be short. >> january is the launch. case closed. >> i would sell it before. >> let me say this before. >> six weeks, joe. >> you could make a lot of money in six weeks. >> you can. if you are interested in chasing beta, absolutely, knock yourself out. up around 20%, go do it. i'm more interested in creating offer. it's either a huge home run or a
strikeout once blackberry so is released january 30th. >> it's not quite so black and white if you're a short-term trader. the people playing the stock right now are not value investors coming in at 14. they're momentum people. but that trade has been working. in addition to which institutions have got -- >> so what we are arguing is -- >> it just upgraded again. >> absolutely. the margins are going to get better. units will get better. you know what won't? market share. because that is where in terms of making an investment and actually creating some alpha, you want to graf state towarvit. you want to identify going out and chasing beta? go ahead, knock yourself out. but i don't want someone watching the show saying i listened to those folks and wake up in march and the stock's back down to 9. there's no value in that content. >> there's no risk management when you do something like that. i think the viewers that actually -- >> you have risk management,
most of the viewers that watch this show, they're deficient in terms of risk management. >> which i think is our job to make them better investors. do not play this and then wake up in march. you need a tight stop. i agree with joe. all i'm saying is shorts are being carried out of here feet first 20% of the flow at 100 million shares at last count. plus -- plus -- and this is really important -- >> i'm going to have to bang the gavel in a second. you're going a little overboard here. >> my final point, don't look at it as an investment. if you're a trader, this is exactly what you want to see. it is a great set-up. rsi is a little overdone. let it pull back a bit but i think you can still play this. >> i'm getting old. >> you both are in contempt of court. >> now, the fed announces new easing measures. plus, why you should brace for a double-digit decline next year.
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welcome back as stocks react to the fed's decision. currency traders are also analyzing chairman ben bernanke's words yesterday. let's hear from willie williams from new york. willie, we are looking at it on the screen here, give me the word of what is happening with the pound. you saw a big drop versus the dollar. >> yeah, i think that downgrade that we saw today, i didn't see the exact headlines, but i think that downgrade is in line with
other rating agencies and i think that a part of this story is going forward while a lot of governments have made an effort to stimulate their economyes. we're going to have to see stronger revenues and stronger growth in order to help these countries come back to us fiscally sustainable path. >> what's the likelihood that that's going to happen? by the way, the headline you may have miss said that s&p puts negative outlook on the uk's triple a rating. >> okay. i think that impact, the likelihood of it happening, going forward with the current path of growth we have, is going to be a very tough path. i think we will see the u.s. continue to outperform, going into 2013. that's one of the reasons i like being along the dollar here, versus the euro. >> all right. willie, good to talk to you. we'll have you back soon. >> thank you pl. today's move may be nothing compared to what our next guest is predicting for next year. city fx technicals head tom fitz joins us with his 2013 outlook.
>> thanks for having me. >> you are making one heck after prediction. dow falling 20% in 2013. what's going to cause that? >> we're still very much on the bias. the picture we are seeing today is very similar to what we saw in the mid/late 70s. with the housing market, economy. the president is tracking that very closely. if you go back to the period, you will see after the fall of 1973, 1974, subsequent recovery of the dow got back to 70% of its highs before we fell again. this time, a move to within 3.5% of the 2007 highs would have taken us to 13,700. the highs so far being 17,661. we replicated that very closely. the oil price may be the catalyst to give a second effect which may send the stock market
down. after that tone in the 70s, the next move down in the stock market was about 27% over an 18-month period. >> can you tell me in 20 seconds why you think gold will hit 2400? >> every nation in the world is printing money. gold is a hard currency. they'll continue to print in this monetary experiment because they've got nowhere else to go and a cause of when we believe gold will continue to outperform. technical pattern looks good. doesn't look like a bubble. it is nowhere near in percentage terms of what we saw in the 70s. >> good to have you on the show. thanks for coming on. >> tom fitzpatrick. final trades when we come back. having you ship my gifts couldn't be easier.
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