tv Fast Money Halftime Report CNBC November 11, 2013 12:00pm-1:01pm EST
red. on friday art was saying it seemed thursday it was the bears in control, friday was the bulls and today it's a draw. >> that's right. back to headquarters. wapner, just spoken to icahn. time for the "halftime". >> thanks so much. what we're following today ahead of the curve everybody what apple is reported to have up its sleeve what it means for the stock and the latest conversation between icahn and cook as well. technical trouble. reality check on what the charts are really saying about where the markets could go next. we begin with a big call on some of the market's biggest movers. morgan stanley saying internet stocks from google to groupon have gotten too pricely. it still likes most of the names the group has gone too far, too fast. it's halftime. pete, you first, time to fail on some of the internet names?
>> i don't know if -- i'm glad you said some not all of them. you've got to put them in various categories. a name like yelp, they have done everything right when you look at their revenue growth, it's spectacular, since 2010, last year, again, but, when you look at some of the costs they've got, and you look at the valuation which they'll have a valuation, it will be a forward valuation now, over 325. has this gone pretty far, pretty fast and there's downside? absolutely. i wouldn't stick with a name like that. i got out of facebook around that 50, 51 area, not long ago. i think there's downside for facebook, not because they're doing anything wrong but there's room to the downside before i have to step in again. i'm looking for a number, low 40s, not where it is at this point. >> wow, 50 is the number that people are hanging on. dan niles, big tech investor, out of facebook at 50 bucks. and the firm selling one-third of the facebook for close to 50. pete's getting out of facebook.
yelp up 230% year to date. pandora, 200%, facebook 75, priceline, groupon, amazon. >> downgraded it one notch, google. that's one of the cheapest at 19 times forward estimates. group revenues 23%. across the board, very solid numbers. and they've got cpc growth opportunity as head of them about they've got youtube and dominate that space and mobile. that's the one that i think is attractive, should it pull back. we too sold facebook at 52 and change. still own some. that quarter was phenomenal in terms of every metric across the board. the company's yet to benefit from video. that's the next leg up. >> steve weiss, they love the stocks. they say the valuations are too high, relative to the long-term growth prospects. >> i didn't get it. to me the -- sitting on the fence, i'm keeping a buy on the
stocks. i'm lowering rating on what is the cheapest low with priceline, but if they go down i don't get credit if they trade off. the market looking at momentum in a different way? maybe a short time basis. to me they're working as they've have been working. we talked about before the show, each of the companies has raised earnings in their quarterly reports. >> analysts, did, too, across the board. >> i have no idea what the analysts is talking. >> the same analysts who hated the stock at 21. why are we paying attention to analysts. >> they made it a point of of saying earnings aren't going up, multiples are going out. >> certain names you could have had the same discussion on 50 points, 100. >> 200 points. >> doesn't matter if amazon makes or loses money. netflixes, the same thing, they have the defensible positions and ultimately maybe god willing
make money someday. >> timing not withstand, what's the big hurt with calling out froth? everybody's talking about froth in the market, froth in individual areas. a guy who looks at the space, triple-digit gains. >> vote with the wallet. if you think they're frothy, say i'm downgrading because they're frothy, don't say look, maybe they're frothy, if they had conviction they would have downgraded them. i don't play in this space. i'm not involved. >> revenue growth facebook 60%. earnings growth 82%. the mobile, 49%. >> i'm shocked to hear both of you guys say you wanted to sell facebook. >> 92% into the quarter, there's no way i was not going to take money off the table but we held on to quite a bit of it. >> i love facebook. we're using options to hedge our position in facebook. i think the next -- the fundamentals on facebook support a higher stock. short term, yeah, you'll get chop yone
choppiness in the market. >> i did sell the rest of facebook, i bought as momentum. so i'm out. to me it's purely momentum stock. >> i'm out with you. i'm out as well. i've been in this for over a year, scott. they took me out of the 52 1/2 calls i've sold against my position. once they took that away, i feel like there's other places i have far more upside. >> getting another opportunity to get into twitter today. >> yeah. that's another name. >> talked about that on friday. >> sold that thing on friday. got a great opportunity to sell it at 44, 44.5, somewhere in that range. i don't think this is a buy until low 30s, that's where it should have been. >> it's a market call. big cap biotech sold off as well. a rotation of groups that maybe haven't performed as well, since financials the move. i think ultimately the super growth players come back as well. >> what do we think about groupon and pandora? they still -- i mean in the note today, they're recommending
those stocks, part of the overall trying to read exactly what they're trying to say as part of the note. >> groupon and pandora, names i missed, i'd rather look at facebook where you can talk about the growth that's going to be there going out. groupon and pan door ra if you have a pullback in the internet space these are two leading it lower. >> lower quality. groupon, building warehouses. stick with the business model. >> stock up 100% year to date. >> now's the time to sell. >> what else? >> twitter is vulnerable trade agent double multiple on a rev n revenue basis 22 times. so we go back to facebook, go back to google, they've proven themselves and are showing results. >> are you worried about facebook at all? when you start to hear that -- because this was something that came up a while ago, they talked about users, younger users are
starting to shy away, using it less. that wasn't true a few month ago but now it is starting to be. they address it themselves. that's a concern for me. another reason to pull away. >> younger users are going to video. instagram yet to impact the company yet. it hasn't started. >> depends what video. >> of course, that's also a reason why i think that google is interesting with youtube. >> google is interesting because of youtube. >> one more stock. then we'll move to netflix. >> if they hit with cable companies in being put on set top boxes stock takes a whole other leg up. >> international story, growth. >> big call of the day, comes as u.s. stocks on a five-day -- five-week winning streak. s&p up 25% this year, and that's one reason our next guest he's looking for value outside the u.s. greg fisher with gerstein fisher. live in new york city. welcome. good to have you on the show,
greg. >> thanks for having me. >> give us your read on the u.s. market. where do we stand, where you think we're going. >> i think people have to be exposed to the u.s. mark in their portfolios. but you know, there's a lot of discussion around multiples, prices, we've just come 9,000 points since the bottom of the market in 2009. so i think investors can't help themselves but wonder, what will the future be like after this run? i think perspective that people should have take their eye off the u.s. market and look at other areas around the world where things might look more fairly valued perhaps. >> at least the economy seems like it's improving. the jury's out on what's happening on various continents. >> certainly our economy's improving, and i'm not suggesting that that might change. but when you look at price to book, price to earnings, if you take a position that marks do a reasonable job pricing risk, of course they're not perfect, look at emerging market stocks down 4%, 5%, u.s. market up 25%,
that's a 30% difference in returns year to date. investors might consider taking a look. is it possible there are risks and our economy's strong in the u.s. is it possible there's also some opportunities that we should be focusing on as opposed to the frothiness of the u.s. market. >> greg, mike murphy. i agree with your stance on investing outside of the u.s. one of the main reasons we're positioning ourselves that way is we're coming up again january, february, we're having the debate, the debt ceiling debate. i think there is more growth. reversion to the mean, one area we like is brazil. another area is europe. i agree with you. i was wondering, for me, once the debt ceiling issue, if it's put to bed, i overweight the u.s. >> the u.s. represents 50% of the world's capital markets right now. and we're approximately 20% of worldwide gdp. so if i'm an investor thinking about putting a portfolio together, you start with the market weighting of 50%, most
investors are i think are largely invested in the u.s. than that have and less than 50% of portfolios in foreign markets i'm think that, yes, i would take a look at u.s. market and i would stay diversified why limit yourself to one you'd curve with everything going on with the u.s. government, interest rate changes, inflation, deflation, i think diversifying across yield curves, across markets makes good sense. >> take a look at emerging markets, when the shutdown occurred, those markets came down significantly. so the reason why you invest in the u.s. is because you have transparent accounting, you shouldn't be 100% there but should be in my view 50% there, and countries such as brazil, where the economy's not going so well, india, not going so well. countries that are tinting rates. we're still easing. they are extremely dependent on the u.s. economy. why go with the tail when you can go with the dog? >> realize there are risks with being in foreign markets, the
political issues, the transparency issues, et cetera. if you take the position risk and return are related there should be a premium for taking on the risk and investors are well served long term by having exposure to the areas. what the percentage is a function of the risk tolerance. to avoid emerging markets and be in the u.s. by it elf, i think would be a mistake. >> good to have you on the show. >> thank you. >> murph, before we move on, defend the brazil call. talk about risk tolerance, you better have big time risk tolerance. >> exactly what steve weiss was saying. that's why i'm buying it the reason he's selling it. right now a lot of negatives in brazil but they'll turn -- the economy's picking up, inflation is under 6% there. and you have the world cup coming up shortly. >> time for halftime's fop three trades. first up, tesla. the owner of this model s which caught fire said he'd buy another. what are shares doing? they're popping. maybe on that comment.
>> there's no other story lines to find out there, scott. >> other than the fact, look, it could be a technical snapback. >> could have bounced off. >> the worst stretch in three years. >> the cfo of panasonic defending the battery and the safety of the battery. a lot of reasons why it's bounced. as we talked about, took off half of the put spread i had on. i think there's downside but we're seeing a lit out of the stock. >> if you told me my car's going to burn up in six months and i'm getting a new one, i'm going for that one. >> it didn't burn up. >> fire. >> moving on. eli lilly. >> goldman downgrades lilly to sell today. i agree with the call. there's a lot of other players, even pharma, get more upside for your dollar than here, earning for the next four years are not
due to grow. i'd rather be in pfizer than lilly or the pharmaceutical names. >> i bought lilly on the downgrade i thought it was too much. >> transocean and our friend carl icahn. >> he's gotten some of what he's asked for. in terms of the dividend and more board seats. what's more important to me, from a fundamental basis, the company has retired ten older drill ships and they're going out and they're -- excuse me, they are ordering more drill ships and retiring older ones this is a big deal. a company that's had older technology and haven't been able to compete effectively to ensco-like company. i have not liked this story. i preferred ensco but like the announcement. >> a big win for carl. he told me a short time ago, they're going to ipo the mlp, that's positive, as well as
adding a gentleman to the board that he wanted. hopes that they can raise the dividend again. >> a lot that they can do, because it's a lot they haven't done. if you compare it to ensco, the company's not done the right things, so there's low hanging fruit. >> great step in the right direction how mr. icahn crashingized it to me a short time ago. could reports that apple coming out with a curved phone boost the stock into the green before year's end? and the comments from carl about his conversation with apple's ceo tim cook. chart watchers say we're going down. three charts to decide where the market's going next. that and more up on "the half."
shares of apple, had been down 1%. right at 515. the stock as you see moved off the lows of the day, after carl icahn told me a short time ago he has spoken again with tim cook in the last few days, that they had a good conversation, that they're studying the buyback situation, continuing to study the buyback situation. and that they both continue to believe that company is undervalued. jon fortt at the new york stock exchange with us. jon, what do you make of the fact they've spoken again in we know what tim cook said on the call most recently with
earnings, that they were going to have more to say or consider more in the new year. you can characterize it better than i can. what do you make of the whole thing? >> i think tim cook's playing chess. he has talked, apple has talked about how their domestic cash is being depleted by the dividends and buybacks. they've already committed to. and he's pushed out people's expectations a few months saying we're going to talk to investors through the end of the year, they tell you something first quarter of next year, if the board decides to do something different with cash. he all but said they would. he pointed to that kind of used that kind of language. but then at the same time, you've got apple doing things like this plant in arizona that they have bought, that they're going to then lease to a supplier for their sapphire glass that they need for camera backs, for the touch i.d. sensor and maybe other things like watches if they are in fact coming out with those going down
the line. a lot of reasons for apple not to fully embrace icahn's proposal. i'd be shocked if they did. tim cook doing quite a job with diplomacy. >> it's significant in and of itself, i guess, they're talking, right? apparently tim cook hasn't dismissed the idea outright. correct. >> >> i mean, how can you stop talking to carl icahn when he wants to talk? >> you make a good point. >> you know what i mean? >> you make a good point. in all seriousness, right, if there is this ongoing dialogue, and cook has said on the call and elsewhere they'll revisit this in the new year, at least the idea is going to continue to be discussed over the next few months. >> definitely. still got a ton of overseas cash, the repatriation question that lots of ceos in silicon valley, the question they've been asking, are we going to get
a tax holiday? if that happens, that gets a lot easier. i expect they will do something with that cash one way or the other in the next few months. maybe a slight bump to a dividend or buyback. probably not what carl icahn's asking for. but probably he doesn't think he's going to get all he's asking for here. >> you make a good point. jon, good to talk to you. jon fortt at the new york stock exchange. >> talk about the crashdown on wall street. instant messaging. banks looking to cut down traders' use of that in chat rooms. kate kelly has more. interesting story. not a big surprise. >> i guess not. although it's creating a bit of tizzy on the trading floors today. with the big banks under fire for so many different regulatory issues looking to clean up the written records and may start by eliminating chat rooms. recent weeks jpmorgan, citi group, barclays and credit
suisse have begun reviewing traders' use of online chat rooms, people gather for private conversations via instant message. in addition to small talk, there are discussions about specific trades or ideas and therein may lie a problem. ten banks under scrutiny for attempting to manipulate -- >> we have a partial list of that on the screen. numerous investigations under way, including jpmorgan's chinese hiring practices, for instance, and also their alleged manipulation of u.s. power markets, to name a few. as they review internal trading documents bank lawyers are finding chat room records is taking an inordinate amount of time. in an ironic twist, a new service, market collaboration services backed by ten major banks including ones i named launching today. >> what do you think traders are saying and thinking in the sort
of post-s.a.c. settlement world? >> i spoke to a bunch of them this morning. one guy said, it's miraculous, that we instant messaging on the other hand regulators are on pace with us and they're cracking down on records. eventually you're go back to a can with a string. he also pointed out to me this "new york times" story about president obama literally putting up a tent in an adjoining hotel room when he's on business so he can have noise canceling software and truly private conversations. i mean it's like you have to go undercover just to have a phone call or something. >> i bet the traders on our desk have some interesting thoughts about this move in chat rooms. >> yeah. look, instant messaging's been around a long time. like e-mails ha they have to be archived three years. it's a critical function for a trading desk because it's an intaken yus communication with
your accounts some firms don't allow orders by instant messaging but it's great because it allows particularly with wall street firms that have cut back significantly on their man power, number of plays they have, to me it's a critical thing. my advice, hire more honest people. >> you know what's interesting? i assumed all phone calls were taped but only some of them are. one of the i've issues i encouraging people to go back to the phone. we're in a cubical coupulture, there's no privacy you, may want a moment of privacy or quiet. at s.a.c., most phones don't rink. >> it's too cumbersome. so much easier to multitask and do things you're doing and then paying a few people about different data points and that's what would be a problem. if it's legal, and it's regulated better, that's a good thing. i think it should stay as lon as it's regulated. you have to hire more people to do that.
>> it's going to cramp style on wall street. it's going change the way business is done, to a degree. >> kate kelly. the three charts you need to see before deciding where this mark is heading next. singles day in china. what does that mean? a multibillion dollar day for e-commerce company ali baba. how to get in on the action. plus the or stocks that could get a boost from the lonely hearts club. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal
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because it offers a superior level of protection and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. back to our discussion on internet stocks. up more than 75% in 2013, but after giving weaker than expected guidance, can priceline negotiate its way higher? steve weiss the bull, mike murphy the bear. 90 seconds on the clock. not 90 minutes. >> 90 for me.
>> 45 seconds for you. >> the story on priceline. too many focus on the fact it's 1,000 price tag or it's been up. that's not the issue. it's not where stocks are coming from, it's where they're going to. if you invest whether it's a dollar or 1,000 it's your return of the investment. priceline is a cheap stock. it's growing faster than its p/e, 20 times on next year's numbers and we're in next year. not only that, it's got a lot in terms of europe and the u.s. the most traveled to site, pardon the pun, murph. the stock goes higher, it's done as well as it's done with europe. now it's recovering and it will do better. >> sales up 74% in europe. the quarter was phenomenal. when a stock's up 75% and guide lower for next quarter that is a red flag. they have a new ceo who spent ten years working at microsoft.
i don't know if this is the right guy for the job to come in at this point in time for a company like priceline, coupled with the fact there's a ton of competition out there. >> always been the competition. >> buying the stock at 1100 a share, absolutely not. >> you know better than that. >> that's where it's trading now. i'll buy it at 800. it's 1100 right now. >> right now you're buying 20 times next year. g g growing at 25% or better. >> you saw, when they guided lower the stock traded off 70%, $75. it recovered it but that's the precarious nature of the stock. >> the stongs moviin stock's mo >> who made the more compelling argument. >> it's unfair, i'm leaning to the bull side. i've been a bull on this many different times. throw out the 1,000, this stock trades cheap.
great balance sheet. look at booking percentage and growth, outgrowing competition, it's going higher. >> i want the other judge to get in here, too. >> you're not going to get a different answer there. >> you can shop around. >> i actually do like the priceline story. the international grew 41%, u.s. up 16 percent. talk about visibility, that's what like. valuation, yeah, 20 times. >> guide lower? >> i think the guide's conservative. i think guide's conservative. how do you -- that's why i look at bookings numbers. that's a visibility tool. and the numbers are just -- they're self-explanatory. >> we want to know who you think won the debate. use #bull or #bear. we'll give you results at the end of the show. investors are loving the rally. technicals are getting bearish. dominic chu here with that story. what should we look at. >> what carter braxton worth is looking at, he's seen a number
of different signs in the charts that say that, yes, maybe things may be due for a pullback for the stock market overall. one of the things he's looking at is the financial sector. remember, financials lead or again lead or lag during these bull and bear markets. so financials and s&p, versus the s&p 500, what has the outperformance or underperformance been? underperforming over the past week, month, three months, five months to a wider extent. that's a big warning sign. financials lagging overall market. one in particular tells a big story. jpmorgan, because this chart shows you this dome, this rollover that's happening. it's it's no just jpmorgan. i can put up a chart of citi group, bank of america, looking the same way. financials rolling over, not a good sign. one more thing, carter wants to look at he says check out s&p 500 every subsequent high that it's made this year, we've seen market breadth deteriorate. what he means by that, the
number of stocks in the s&p 500 afraiding above their medium term batting average, high. 468 earl krer thier this year. every time higher a number of stocks above that mark has gotten less and less. there's a slowdown coming. a storm possibly for stocks. here are some of the reasons why. >> thanks so much. i guess, guys, it speaks to the market's resilience, right, over the last several months as financials underperformed we hit new highs. >> financials are underperformed because the yield curve went from getting steeper to flattening out. we had mixed data. since then, in the last couple of weeks, we've had better data, isms, the nonfarm payroll on friday was better. you've seen the ten-year yield go up. >> yeah. closer to 270. >> that's right. maybe they go to 3%, i'm not saying they're going to get carried away. that's positive for the financials. >> i think the financials when you look at them, they needed to
take a breather. they underperformed because they went flatline for the quarter. i think we're going to see that in the end of the year. what tells me the options everywhere i look, bank of america, citi, we talked about that on friday, look across financials now, i think they're percolate, ready to explode to the upside. >> i look at charts citi group, bank of america, trading off between 5%, 3% from the yearly highs. i think they're poised to go higher than this. i think they rally. >> into financials, look at insurers. those haven't corrected at all. >> financials, percentage of the s&p historically. it's lower than it's been. not as low as '80 or '09, it's not as meaningful. i go with fundamentals. my favorite technician quote, if it goes lower, i'll sell it, if goes higher, i'll buy it. >> cheer up, single people. you're celebrated in china today. happiest revelers could be retail companies.
bachelors and bachelorettes shopping up a storm in chine nap in honor of singles day, one of the biggest online shopping days in the world. josh lipton joins us san jose to break it down. plum assignment. >> a shopping frenzy in china. november 11th the big effort shopping day of the year for chinese consumers. singles day, it really does offer a window into why investors are excited about the possibility of alibaba going public. last year on singles day, sales on alibaba's platform $3.1 billion, that was more than cybermonday and black friday combined this year alibaba says sales on the platforms were bigger, 5.7 billion. that is a new record. alibaba is compared to amazon but it's not accurate. alibaba does not directly sell goods. it's a platform to which companies and consumers buy and
sell with each other. alibaba then makes money off of advertising the bulk of its reven revenue. the company's growing fast, 2.3 billion in 2011, 4.1 billion in 2012. recently for the april through june period, alibaba reported revenue of 1.7 billion. that was a 61% jump year-over-year. alibaba is planning an ipo that people familiar with the matter tell cnbc could take place in early 2014. possibility that ipo is one reason yahoo! stock soared yahoo! has 24% stake in alibaba. >> thanks so much. let's trade these. yahoo! who likes -- >> we own yahoo! i think the alibaba deal is going to be as big, if not bigger, than what some people are anticipating. they only 24%. but ya ya hhoo!'s core business
>> marissa mayer figuring out, faster than expected you want to own yahoo! even if the piece becomes smaller over time. that's going higher . >> china net names. >> interesting. i have been looking at it more closely, our friend glenn, he's been on there. owning those. here's the deal. they have protected businesses, the chinese government basically has to grant them a license. so you can't get in there. so that's why i like about the stocks. i don't think they're overvalued at all and business will keep growing, particularly the chinese government, more consumers, better for the company. >> high-end retail tiffany's shining this year, as shares soared more than 40%, option traders betting big on the stock. hit unusual act fiivities now. jon najarian, good to see you. >> great to be here. you wish you were here as well. >> yeah. i do. the hometown. what kind of unusual activity do
you see? >> a lot of buying right away, judge, in the december 80 calls for tiffany, tif. bought very quickly. the stock responded immediately. and is trading up near the highs of the day here, judge, but it's not the only retailer where we were seeing unusual activity. i i that's noteworthy as we're getting ready to spin into thanksgiving mode, judge. it's not just singles day like josh was talking about. it's black friday, which is going to be, i guess gray thursday or whatever. because a lot of the retailers are opening on thursday. take a look at best buy, as well. best buy, somebody bought a lot of calls at the 44 strike and sold calls up at the 49 strike, that's a called vertical or bull call spread. very strong activity. and that one. two retailers caught our eye for unusual activity. >> stephanie link, are we underestimating what holidays could mean this year? people are writing it off left
and right. >> i think so. we are going to see promotional activity which we've been hearing about from different company but was heard from companies that just in october business started to pick up, traffic trends started to pick up weather's cooperate, oil prices down. expectations are low. so, i think there's some upside. i think the tiffany's story is interesting. i've not been positive on the story but they made a couple of hires in the u.s. business that can turn that business around. they had problems in the u.s. international, the storty we know that, margin, there's a lot of upside. this is interesting to me. >> i bought a little coors last week, to move so much, but to me they're just doing a lot of work on it. they really are accelerating, if you go to stores. it's a great place. optimism's come back. macy's up 10% off the lows. >> i think when option monster points out unusual activities a lot of times calls end up being right. when i see tiffany trading up over 80, it's something i want
to stay away from completely. best buy, if that's going higher, i'm dead wrong. best buy's had a huge run and it needs to roll over, go back to 40. >> china's retail trade. now we'll dig deep into opportunity in the country in the light of the biggest reforms there in the decade. the former chairman of morgan stanley.
coming up on "power lunch" at the top of the hour, i'm at the schwab investors' summit. schwab impact, in washington, d.c. we'll find out whether the individual investors back. a big lineup of private investment. i see my money man, drembert. stocks go up or down from here? what the technicals and fundamentals are signaling now. three big issues that are keeping your financial adviser up at night. i'll find out -- it's my money keeping rembert up at night. >> chase him down. look forward to seeing you in d.c. halftime play book, the world's second largest economy, that country's come mist party sets its economic agenda for the next decade. the most anticipated political event in some time and will factor into how you should game plan your own investments. stephen roach, former chairman of morgan stanley asia.
welcome back to the halftime show. >> good to see you. >> you bring good insight on the topic. what are we going to hear out of china? >> you have the right story focusing on the chinese consumer. there are two pieces to the puzzle. one providing opportunities for jobs and urbanization but really changing behavior incentives to inject dna into chinese families to prevent them from saving excess and spending. and that means building out a soeshl sa social safety net. i'm hopeful we see major announcements. >> how successful do you believe that china can be? over what period of time can we really expect real results in moving away from an export and investment-driven economy into a consumption based one. >> i think they're going to surprise everybody by moving aggressively. consumption share of gdp is 35%.
our is double that. they've got a lot of low hanging fruit in terms of creating jobs in an embryonic services sector, raising incomes to urbanization. if we don't do the safety net, retirement system, health care, reforming residential permit system, interest rate, liberalization, money they create through jobs and urbanization will be saved, it won't be spent. that's where i'm keeping my fingers crossed. >> what do we do when we see, as investors, the inflation rate going up, they want to keep growth moving but there are concerns. about a feeding of a credit bubble? >> well, i think, you know, you've got to put those all in context. inflation rate is 3.2%. it's hardly serious problem. the credit issues are concentrated in the business sector, not concentrated in the household sector. and they're very tight about
maintaining control over financial stability and irrational markets. i think you've got to stay focused on the big picture, don't get caught up in the day-to-day fearmongering you get on your program. >> one more question. are we ever going to get to a position bar we're not asking the question what's real and what's not real when it comes to data coming out of the country? >> probably won't be. we'll be asking that forever. if you question what's real you're ignoring trade flows into that country, the dynamism of its ability to export capital and to purchase treasuries. there's a lot of change going on in china. if you question accuracy of the data, you'll miss the whole story. >> thank you, as always. >> thank you. >> he makes a good point. i mean it's inevitable that you know stephanie, you see things
differently than stephen does. >> right. talking about the new regime since the beginning of the year talking about reform, getting credibility and the numbers right. it's going to take a long time. but the data has gotten better because they've been putting in targeted stimulus efforts just like he was saying. so i think you have to be selective. i think that the fxis a broad representation, if you want that. but you can look at some of the companies like -- some of the industrials are interesting because valuations are cheap. conference calls, ge positive discussions about china. >> but ibm did not. >> i think -- yes. you'll get very much mixed, right? i think on the industrial side, you can play a couple of names. on the consumption side, we've held on to yum brands and coach is -- >> there's a time skepticism of what's happening there, you're a buyer of the fxi, if i recall. >> i traded a few times. i'm not involved in it now. it's very difficult to play
china directly. so when playing it, you can play the internet companies, we talked about before, those are reasonable plays, tried to play it through companies like cummins or cat, you're getting more with that. i go with good companies rather than a lot of the companies that do business in china reported disappointing numbers there and are back tracking some investments. there are other places to go. >> we'll take a look at intuitive surgical despite questions about the main product the company is getting defense from goldman sachs. we take a look at the s&p leaders and laggards right now.
all right. there are a lot of stocks on the move today. dominic chu has another one that you should keep your eye on. >> that's right. shares of medical robotics maker intuitive surgical weaker in trading early on but now vying for session highs. investors are dealing with concerns resulting from a number of adverse event reports collected by the fda involving systems made by intuitive surgical. now this is not to say that there's any direct link between negative reports from these medical device makers an the company's products but it's still a potential worrying point for investors.
stay tuned to "street signs" this afternoon where cnbc contributor herb greenberg will talk about this story. herb was one of the first ones out there to flag some of these concerns with medical robotics. we'll be tuning in for sure on that one. >> thanks so much. steve weiss? >> here's a story, missed a couple quarters, we saw the stock really took some gas. the question has always been, what's saturation for million dollar da vinci machines with health care trying to cut back. for me i would rather wait to see if they're on level footing before i step into it even though the multiples come down quite a bit. so do the earnings. >> goldman defending the stock. not so fast michael murphy, traders are quick but not always right. >> again? >> mike made a bullish call on dry ships. let's take a listen. >> the entire space has been on fire on dry ship up over 8% on massive volume. these -- the entire shipping space, what i think it boils down to, they're charging rates right now that are three and four times what they were able
to charge last year. i think dry ship can continue to run here. >> don't worry, the library is large for weiss himself too. >> only one clip. when steve gets fast fired they have six or seven bad calls in a row. >> that's what the people want to see. >> dry ship was a momentum name that tried to get above 4 and sold off. terrible call jumping in at that point. however 2.80 your line in the sand. you can own more of it here. increasing pricing. there's upside with the whole economy but have a designed limit to the downside. >> let's move and do some of your tweets and trades. we deliver with trades on four stocks that have lit up our twitter food. good year tire, mosaic, ibm and grum mond. mr. weiss the trade on gt. >> the stock had a poor quarter, but here look i think the fundamentals are good for goodye goodyear. manager finally started giving cash back to shareholders. stock has corrected. down here is a reasonable buy. >> murph, mosaic. >> mosaic right now to me seems like it's in no man's land.
i wouldn't buy it here, wouldn't short it here. too much news that needs to hit the tape until you have assurance on where they're going. for right now if you're in it you can hold it. >> stef, talk to me, ibm. >> i did not like ibm at 210. we sold a lot of our position there and then at 200. under 180 i think this story gets more interesting. this is not a revenue growth story. this is not a high flyer by any means but trading ten times forward estimates. you get the buyback which was recently increased and dividend. >> pete, give me buy, sell, hold on northrop grum mond. >> buy it, still cheap, great upside. >> final winner of the debate on the other side of this break.
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expected. the world spins on its axis. >> you won because i backed you up. bank of america, it's going higher. >> tbf, buy it. >> buy unh. >> stephanie. >> i mike macy's. >> that does it for us. have a great rest of the way. more fast at 5:00. "power" begins now. >> "halftime" is over, "power lunch" and the second half of the trading day starts right now. >> is the retail investor really back? the markets are hitting new records and lots of money is pouring back into mutual funds. some of the smartest money managers in the world will chime in on that. where are stocks going from here? there's a divergence up up up says one group of analysts and strategists. down down down says another. we have the signs you need to watch. and then, of course, we are following this still developing story in the philippines, relief workers are struggling to reach victims of that deadly super typhoon that slammed into the philippines. it killed an estimated 10,000