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tv   Fast Money Halftime Report  CNBC  April 9, 2015 12:00pm-1:01pm EDT

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>> that is true. >> that is true. asp all important. >> market has been steady here, dow down about 23 points. s&p is hovering around 2080, a busy afternoon. over to scott wapner headquarters and the half. about ♪ ♪ douglas lane and associates, dan gre house and randy frederick managing director of trading and derivatives at charles schwab. our game plan looks like this. crisis warning, why jamie dimon says another big one is coming. what it could look like and how to protect your money. crude reality, fidelity four star fund manager is john dowd joins our summit where he's placing his bets now.
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we begin with that warning from jpmorgan's ceo saying in his annual letter to shareholders, some things never change, there will be another crisis and its impact if felt by the financial markets. going on to say no investors will be safe. a very provocative piece he's written on page 32 of the 38 page letter in terms of what's going to cause it. they're not going to guess at the potential cause but you can say geopolitical, commodity price collapse, bubbles, all the things we have a' been talking about lately. >> no doubt about it. why we try to pound the table when we see something like this in terms of volatility is we're underneath the 50-day, the 200-day for the volatility index and now today here we sit at around 14 or just below 14, that's when you want to buy. not when there's panic, not when we know of all the risks out there, but when the unknown is sitting somewhere out there and now you've got an opportunity to be able to protect your portfolio. buy it through put spreads. something that will protect your
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position depending on where your exposure levels are. is it in the nasdaq, the spiders, in whatever sector you might be heaviest weighted in but have protection for the reasons that jamie has laid out. >> steve weiss, not like jamie is saying a crisis is coming tomorrow or the in exday or week or year after but we hope a real crisis is many years down the road. there are concerns about there being far less liquidity in the marketplace. he says recent activity in treasury and currency markets is sort of a shot across the bow of what we may be witnessing. what are your thoughts here? >> i think he's also talking about the unintended effects of dodd/frank and what they've done is forced the banks of which, you know, obviously jpmorgan is one, but citi, b of a, anybody in capital markets to restructure their balance sheets and have to put capital where they can get capital and not be charged for capital. and plus, they're not going to be there to help save anybody unless they get complete immunity from any ongoing
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litigation like we've seen. where i think it happens is when i'm talking about unintended consequences is that people that need and companies that need credit can't get it from the traditional sources. so they're paying up to get it from like bdc, business development companies, direct lending, you know, peer to peer lending, those are potential bubbles because they are basically supported by the public markets at the end who are just buying the yield and with a low rate return on credit instruments searching for yield and being i think somewhat lackadaisical in terms of the end market and looking at what the credit risks are. >> dan green house, he does say that banks are better able to deal with the potential crisis but doesn't mean it's going to be less easier to deal with as a financial system. >> sure. >> and investors no matter what kind of investor you are, an individual investor, corporation, mutual or pension or hedge fund. >> i'm talking to a client about this very topic the concept of
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worrying about a crisis. worrying about a crisis is not a rewarding investment strategy in the short term in any way, shape, or form. they are infrequent, violent obviously, volatile and costly but very infrequent. to that point not surprising to have jamie dimon say there will be a crisis, i won't tell you with when, nobody knows. weiss was making about liquidity in the bond market a number of conversations with clients this morning, i knew we were going to talk about this, i cannot stress enough speaking on behalf of our fixed income clients if you will how many people think this is a total abomination in the sense that liquidity in the market has effectively gone away and the best example i can use before the crisis, for instance, if you wanted to quote a client buy 5 million bonds you would call up a dealer and they would put you up on 75% of the trade and shop the remainder. now you see nothing like that. every order is as i'm told subject which means we're going to have to go shop it and get it done. a complete change. to the fixed income flash crash
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that everybody is aware of in october this is really to some regard the biggest risk there is, that liquidity is absent. >> is this a regulation induced crisis? is it a fed induced crisis? is it an all of the above induced crisis among other things such as asset bubbles being inflated, asset prices being inflated to the point of being a bubble? >> and also before we move on i want to be -- i don't like the word crisis if you will. i certainly think speaking for myself here, there are obviously as there always are unintended consequences with respect to government regulation and the drying up of liquidity in the fixed income market is one of those but i would hesitate to use the word crisis at this point because we're nowhere near what you would -- when you think of crisis you think of '08 the depression. to a large degree you can make the case the financial sector is better suited today to deal with one of those instances whether there will be one because of those because of those policies is a separate story.
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it's hard to imagine the financial sector is not better prepared today. >> i think you also have to be careful because you have a lot of individual investors who don't know what they own when they buy things like mutual funds that act as hedge funds with daily lickty. you need a clearing price. if people have way more sellers and everybody has talked about here the desk can't hold them the selling price, the clearing price will be so much lower than what people expect. that will then start selling on selling and use leverage on top of that and by the time people get a price, a levered etf or liquid at you will not get what you think you are owed. >> they've been talking about a great opportunity, a company like arias which has 60 or $80 billion out there, it's an opportunity to make money in new asset class, but i would say that to dan's point you can't invest with a crisis in mind all the time. what you can do is take positions and buy out of the money protection which is cheap on any historical measure to
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protect yourself. i remember if you go back to 9/11, way back, people say i can never invest. when is the next terrorist attack. guess what? if you didn't invest you missed a run up to '08. bad strategy. >> lucky enough to have randy from charles schwab and it's interesting, obviously, by virtue of the business you do with the individual investor, what you think about the provocative nature of this shareholder letter that jamie dimon has penned, and how investors no matter sort of what category of investor they are should be thinking about this today. >> the way i look at it, i ask the question, he seemed fairly optimistic about not only the u.s. economy but banking sector and the question i have is he saying anything that surprises anyone. i mean is that like forecasting that there's going to be another bear market at some point. of course there is. we know that. >> bear market, different than big financial crisis. >> certainly. i think that's true. again i think he was fairly optimistic overall and as you said he didn't put a timeline on
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it. to say there may be another financial crisis maybe ten years from now is that a big surprise? i don't think it's a huge surprise overall. like again looking at a bear market. >> are we sewing the seeds to another crisis by virtue of what the fed has done, the longer the fed stays in the game, does it rfk putting us more on the path of a potential problem? >> the regulations i think -- >> the regulation which has the unintended consequences? >> yes. i think that and a couple weeks ago we sat on the desk and some of the traders were disagreeing and said there's plenty of liquidity in the bond market. i don't know where they were looking because everybody i talked to including during the show, i'm getting hit from people all over wall street telling me, there is no liquidity, that is a huge problem, the regulators are all over it. to your point i think you have to have that in the backdrop of your mind as you're thinking about this. jamie dimon sees it every day. they took leverage away from the banking stocks. when you look at what these businesses are now, scott, without that liquidity there,
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that is something that you've got to know about because that is going to be a problem. when is the only question. >> if i could add -- >> please. >> the people that really get hurt by this lack of liquidity are the individual investors. are the pension plan participants corporations because it's them, it's their asset managers that are going to the street saying, can you help me out, take me out of this price, facilitate the trade, when the answer is no, they know there's a big sell there. it's the little guy that gets hurt. not wall street necessarily because they'll still get their vic. we have to be conscious of that as well. >> with respect to the topic of an asset bubble, it's become fashionable obviously in the wake of the crisis, anything that goes up is in a bubble and anything that goes down was in a bubble. gold comes to mind. oil comes to mind. that's not the case. sometimes things are just overvalued and they come back down to reality. i think ben bernanke, now the most prominent financial blog egger on the internet his last post on whether the fed should raise rates for financial stability concerns and this is,
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obviously, the major topic in markets right now in the wake since there's no inflation then why would the fed raise rates to prevent the building of asset bubbles. >> based on a story we've seen before. right? when people say greenspan kept rates too low too long and thus that fueled the gigantic asset bubble that exploded. >> listen, i think there's a strong case to be made that is the case. at the same time if alan greenspan was sitting here he would remind everybody that he in '05 about a conundrum. i keep raising short term rates and long-term rates are not going up. why bill dudley you should read every word out of his mouth he talks about preventing that again. >> how do you view the market as we sit here today? the valuation of where we are, where you think we could go, when the fed will raise rates and investors want to be, irregardless of the conversation about a crisis or not? >> so at lot of points there. one is that we've seen a lot of
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short-term volatility not just measured by the vix but in the day to day swings. january especially was volatile, february settled down, march shaky economic data and see huge market swings. our perspective we'll see that a while longer and probably until we've reached a point where we get an interest rate rise. if we get one the recent weak data has pushed that date out to late july meeting or mid-september meeting rather than june. but in the meantime we probably will see more volatility. longer term we continue to believe this is probably going to be a positive year like last year, but the bulk of the returns will probably come in the second half of the year. >> interesting you like consumer staples, more of a defensive historically play, and technology more of a cyclical play. >> yeah. >> what are you betting on? >> technology, we've had on technology several years and turned out to be a good sector. consumer staples was an upgrade to overweight we put in place when we did take in a little more defensive move and i think
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the way the market has played out in the early part of this year has been pretty good. going forward, i think that to some extent there's probably a pent up demand in consumer discretionary right now. data that says people are paying down debt, putting money into savings accounts and doing those sorts of things because of the lousy weather, now the weather is getting better people's savings accounts are filling up and debt down. >> march retail sales, were not exactly stellar despite the fact that gas prices have been low. >> we've had disappointing retail sales three months. we may see that change. the weather is getting better. tomorrow i think here in new york and we'll see people maybe going to restaurants and doing shopping. consumers love to shop. >> the important quote from carl caddie, scared money don't make money. in regards to a crisis that's all i would say. >> scared money saves a lot of money sometimes. >> yeah, but this what is carl said. >> randy, thanks for coming in. >> sure. >> appreciate it. >> the sudden departure of
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zynga's ceo. >> mark pin cuss is stepping back in. can he save the company and the stock. we will get all the trades coming up. plus time ticks closer to when consumers will be able to get their hands on an apple watch. preorders start tomorrow. a review on the tech giant's latest gadget next. our halftime energy summit continues with fidelity fund manager john dowd. are we closer to a bottom in oil? stay with us. we're back after this break. yoyour friends have your back. your dog's definitely got your back.
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welcome back. zynga shares taking a hit after a major shakeup, down 15%. founder mark pincuss stepping back in as ceo. don mattrick stepping out. julia boorstin has that story. julia, there was so much fanfare when mr. mat trick came in because of where he came from and what people thought he was going to do? >> there was. there was a lot of fanfare when he came in and the stock is plummeting as he's leaving. really just the latest step for struggling game maker zynga to figure out what's next. zynga shares down 15% today on the news that ceo don mattrick resigning. less than two years since he took on that ceo role. founder mark pincuss is returning to the role of ceo. now under mattrick, a veteran of microsoft's xbox empire the maker of hit farmville managed to shift from social to mobile games which represent 60% of its bookings, more than doubling since mattrick joined. the company has failed to create a successful mobile game
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franchise on the level of farmville. mattrick drew criticism for hurting zynga's poker franchise by prioritizing graphics over speed and simplicity and a number of analysts have raised concerns about the company's bloated cost structure including mattrick's paycheck. take a look at skin da ga stock performance under mark pincuss versus don mattrick. stern says that the ceo change makes him more cautious that it clouds the potential for a near term turnaround at zynga. btig analyst rich greenfield said the departure is a good thing but calls the new he's been replaced by pincuss worrisome. >> thanks. i was surprised to say the very least when i heard about this news. >> i think any time you get a ceo that didn't do well coming back, it just portends that the stock has nowhere to go and they probably shopped it around, nobody there to buy it, so probably dead money for a while. >> i was surprised to hear about the news. who cares. you know.
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but -- >> people only care because it was mattrick who was sper sieved to be the savior, the big boy in the room, now out and pincuss back. >> the results weren't there either. she showed some of the rate of return under each one of the ceos, but when you look at what's been going on there, they mentioned the cost structure, look at the stock it continues to go down, they've got one game at the apple app store in the top 50. they just are -- they've become irrelevant. >> the caution here, the bigger message, beware of fads. so you bought one game, that was very successful, hoping they could build on that, but it's a fad. just don't buy pure fads. >> well the reviews are pouring in for the apple watch and our next guest says it took three long often confusing and frustrating days for him to fall for the apple watch. but once he did he fell hard. welcome farhard, the tech columnist for "the new york times" out west. it's good to have you on.
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>> hey, good to be here. >> take us through your experience. >> yeah. so as you said, i mean it took a few days to get used to it. there's a bunch of different settings you to set, and basically also have to get used to the interface the fact it doesn't work like an iphone and kind of there's various screens and and figuring out what to do with it is confusing at first. you know, around day three or four, the thing that really got to me, the thing that i really started liking i'm sitting here right now, the watch is on, and it's like kind of tapping me to tell me things are going on on twitter and e-mail. it's very like intimate connection with the digital world but not intrusive. nobody knows that i'm getting messages from everywhere on-line. >> would you make the recommendation that people go out and buy the first model? >> i think it's good for some
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people. for people who get a lot of notifications on their phone and who are kind of overwhelmed by them and wanting some other way to deal with them. i don't think it's good for everyone right now and there's a bunch of -- if you're not very comfortable with playing with the settings in your phone, with notification settings, with kind of figuring out how -- which apps you want to notify you on different devices, it's a little technical and so i don't think it's for everyone right now. i think most of the problems right now are software than hardware problems and those will get fixed with updates. so, you know, you could buy this and it will get better over time. the kind of the main hardware problem people were worried about was the battery life and for me i have actually noticed it's great. there hasn't been a single day so far in about a week where it's run out of batteries and by the end of the day it's about 20% left which, you know, is better than my phone most of the time. >> that's where i was going to
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go is the battery. since you covered that and said it was good i've heard the opposite from everybody else who's actually had this experience so far, but i have a quick question for you in terms of the speed of downloads, apps, that was another complaint that people have talked about as well. have you noticed that? >> yeah. so there are times when it's a little slow. initially, kind of syncing it with your phone takes time. you only do that once. the times where it's slow is when you open an app that you haven't opened in a while and hasn't updated itself. open the weather app and needs new data. the spinner on the screen. sometimes it lasts for a while, five to ten seconds which is a while on a watch. i do notice it happening with the screens that you use often. the kind of thing it did most was get notifications from various things that were going on my phone and clicking tapping on the notifications and reading them quickly and that stuff happens very fast. so, you know, i would agree na some parts of it are slow but
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not the parts you use most often i think. for me, that hasn't been a huge problem. >> we're assuming that watch on your wrist is going back to the folks in cupertino. will you buy one yourself. >> yeah. this is going back and this is one of the more expensive ones. 650 or so. i will buy one but probably the $350 one. >> all right. it it's great having you on. thanks for spending time with us. >> thanks. >> all right. what do you think? >> i think if it took him three to four days to get used to it and he's a techi -- >> he's a techi, though. that should be something -- buying the first generation of this is kind of problematic. i would rather wait until the next one comes out. >> one of the things about apple is ease of use. people use this because you can just set it up within minutes and use it. if it's going to take somebody who's so advanced three days, who's going to use this other than a 16-year-old who has the time to do it. >> yeah. >> greenhouse maybe. >> first of all -- >> i have -- i think i might get one, but i think the short answer here, why no -- including
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ourselves and we have a buy on apple why nobody really factors this in from a revenue standpoint. >> no expectation. >> very little expectation. i agree with weiss. >> i think it's going to be a surprise. a surprise hit. >> i will say at -- >> expectations are so low at this point. >> except apple. apple talking about tremendous interest in this whole thing. >> they're talking their book. >> of course they are. >> but gene munster has thrown out nice numbers. >> for someone such as myself with low self-esteem walking into a room with the first generation apple watch is going to give me something to talk about. >> know how to use it properly. >> that doesn't matter. >> irrelevant. >> what's the time. >> props. >> for one minute i will be of interest to people in the room. >> you don't have a watch on now. >> i'm waiting for the watch. >> you're a prime candidate. >> that's right. my wrist is naked. >> look at that. >> coming up, linkedin shares seeing a nice move up over the past year. the business networking site announced it's buying learning site linkedin up.
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crude prices rebounding after yesterday's slide. are we close to a bottom? we will ask fund manager john dowd as the energy summit continues after this. ♪ [ male announcer ] andrew. rita. sandy. ♪ meet chris jackie joe. minor damage, or major disaster, when you need us most, we're there. state farm. we're a force of nature, too. ♪
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there is not such a great looking chart. pulte group. phm down. lower after jpmorgan downgraded the stock saying the home builder likely to underperform its peers. the others are trading lower today. what do we think about this group? >> they've been on a massive run. we talk about this sector for the last couple weeks. >> a lot of downside risks to this group. >> i actually think you want to look at these names on pullbacks. we haven't had any pullbacks. now that we have this downgrade it does offer an opportunity. >> i'm going to compare this to our favorite investment the airlines, right. so if you weren't in early you missed it. you look at these and go should i be in them. on a pullback when people don't want to own these, get downgraded and miss a quarter -- >> can we define what a pullback is? >> 10%. >> off 52 lo 2-week highs. >> good question from greenhouse but also real questions about where housing truly is. and where is it going.
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and where it is going in terms of the airlines. it's not real any question in terms of whether their business models have made them a better investment, correct? >> but i think in terms of housing what you have is you don't have the credit flowing like you did in '08 and '07. you have companies here that are sound balance sheets if the consumer stop saving and starts buying again here's a place they will start putting more money into. >> the yield on the 10-year note is moving higher after yesterday's fed minutes. jackie deangelis at the nymex with the futures now crew. hey. >> good afternoon, scott. we are seeings bonds sell off a little bit. brian, i'm curious what you think about where we're going to see yields go from here? is the bond trade over? >> well you mentioned that 2% mark, that was a key support a couple months ago and we broke below that. now the 2% acts as resistance here. i'm not certain rates go considerably higher. consider the fact that the fed
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probably doesn't raise rates until september, maybe later in the year, going to put pressure and headwinds on rates rising. you heard the guys talk about buying home building stocks on pullbacks. agree. rates stay low for a considerable amount of time good for the housing market and don't see the 10-year getting too much above 2% too fast tooen. >> jim, what's your take? levels here? >> i agree. i think it goes to 2% now. not because the fundamental story has changed because it hasn't. still have french 10-years around 5%, a fed that's not tightening and data that's somewhat crummy if you think about it. so i think we go to 2%. that's a corrective phase. medium term we probably continue lower. >> all right. make sure you logon to the on-line show today 1:00 p.m. eastern time talking to louise lamada talking about crude today. she says it's going to break out. you will want to hear why. see you then. >> thanks so much. coming up here, energy in the green, that sector leading the gainers today. our halftime energy summit is next with fidelity's john dowd.
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here's your news update for this hour.
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iran's supreme leader says he's neither for or against the framework nuclear deal reached last week. he did demand all sanctions on iran be lifted at the same time any final agreement is reached. secretary of state john kerry meeting with morocco's foreign minister at the state department as the two countries look to strengthen ties in four areas, political and economic affairs and cull surl and security issues. hackers who say they're linked to isis seized control of a french tv network hacking 11 channels and website. a french news channel showed video of journalists working in the newsroom overnight while the attack was ongoing. and blackberry is still regarded as a status symbol in africa. the use of its phones on the continent is expected to rise to 16% from 6%. blackberry introduced most of africa to the idea of a smartphone. that's the cnbc news update for this hour. back to you. >> thanks so much. i want to get back to the conversation they were having on futures now for a moment on
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bonds. with our friend dan greenhouse who is aggressively pointed out something. >> i just want to make a point for the viewers here. the 10-year yielding 1.93 the fed will not tighten aggressively, inflation is low and so on and so forth these are accurate observations but when we talk about how the 10-year is not going anywhere or the fed will only hike once i want to remind people in 2004, when the fed first hiked, the yield -- >> this is the chart we're looking at from january 1, 04 to january 1, 05. in advance of the fed hiking rates in 2004 the yield on the 10-year rose by 110 basis points in three months before the fed hikd. looking on my computer of a chart of the 10-year during the taper tan trem trum in 2003 that went from 160 to 3 in about three months time with fundamentals that are not necessarily meaningfully different today. obviously this is not going to be an aggressively tightening
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cycle and the yield on the 10-year is probably not going back to 5 or 6% any time soon. i don't want to lose the phrase lose control but the bond yield can move quicker than the people on the network or show take account for. >> anybody want to chime in? >> we saw what was last year or the year before yields go up to 3.5. >> sure. >> with everybody saying there's no tight nening in sight. the market is a discounting mechanism. >> what that will do for the individual investor when they look at their statements you will have lost value and that will start the should i be in equities and do other things. people need to understand this can happen and will happen. >> it raises the issue of whether the fed is going to be in jeopardy of losing control of the curve in this whole conversation. >> and that's why i didn't want to use the phrase lose control. >> i'll use it. >> i will say this when the taper tantrum -- >> that's what people say, that's one of the risks.
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>> it's not going to happen. i will buy you dinner anywhere you want if they lose control. >> going on open table right now. >> i don't think they go out as far as you would have to go. the problem with respect to the fed and bond market we can get back to the taper tantrum every one of my clients to a t, every one of btig's clients when the fed backed off when the bond yield did what it did said they missed an opportunity because they want to take some of the excess out of the market. maybe the 10-year went too far, maybe the fed didn't anticipate that happening to the degree it did but to some degree, it's a financial equivalent of the stupid phrase to make an omelet you to break a few eggs and something to be said for losing control however temporarily that might be. >> people have said okay, the yield can go down to 1.5, it can go below that, this story sounds like the moral of this story is, don't buy bonds at all right now. >> stay short. stay short. you don't have to go out ten years.
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if you want to buy two to three years better than zero, but go out longer the danger is you are going to lose capital. >> you're saying stay short duration. >> stay short duration. >> the caveat this by saying we could have had this discussion on "squawk box" japan in 1997 and the same conversation and that trade has been nothing but profitable for 20 years. >> yeah. >> i'm not endorsing that idea. i'm just saying. >> all right. we're going to take a quick break. on the other side our energy summit with fidelity's john dowd after this. when the world moves, futures move first. learn futures from experienced pros with dedicated chats and daily live webinars.
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hope you join us top of the hour for "power lunch." take a look at what's been happening in china and hong kong in the past two months. the asia focus etfs, fxi is up about 19% and the ewh is up more than 10%. should you get in now? one of the dilemmas that faces homeowners. should you rush to pay off your mortgage before you retire in key question for baby boomers and our sharon epperson says it may not be your best financial move. would you let your life insurance company track your every move if it meant you would get a discount on your policy. the man behind the plan will join us.
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scott, back to you. >> thanks so much. oil prices rebounding today after diving 6% yesterday on higher than expected inventories and record saudi out put. everyone wants to know how long oil prices will remain under pressure. we are continuing our energy summit this week and welcome in john dowd, four-star energy fund manager at fidelity beating more than 90% of his peers over the last five years. welcome. >> good to be here. >> you must have an opinion on whether you think we've put in a bottom or near a bottom or about to retest some lows or find new ones? >> so i'm constructive op oil prices. the bear case is based on rapid inventory builds and high inventory levels, but the story of the past year when we were seeing a lot of nonopec production growth and sluggish demand, appears to be reversing. we've seen the rig count in the u.s. get cut in half for oil rigs, virtually there's virtually no incremental
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investment going to work putting new rigs to work internationally, and so i think we're going to see the supply growth slow in nonopec significantly, and the demand has been fairly good. looks like it's recovering. >> what do you see on the upside for oil given that at -- what level does oil start going up? is there a cap when more drilling comes on? >> well, i think it's going to be a slope. i think as oil prices go up and as cash flow of the enp companies improve you're likely to see their spending levels improve. what price is going to be sustainable over the long term has a lot to do with how much cost deflation the industry can wring out of the system. >> hi, it's -- >> go ahead. >> it's dan greenhouse. a more general question. a lot of people compared, myself included, compared what's currently happening with respect to oil to what happened in the mid-1980s. do you see similarities there or something specific about what's happening here to isolate to determine that a bottom is, indeed, in?
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>> in the mid 1980s you saw a lot of supply growth. you saw opec increase production in order to push down the oil price. i don't think that's quite what we're seeing. i would draw an analogy closer to natural gas in the u.s. over the past five years, where new technology resulted in a lot of production growth, pushing down the break even natural gas prices for the companies in the mar sell has, and putting pressure on the existing natural gas companies. if there's a -- >> go ahead. >> no, you go ahead. >> i think if there's a longer term structural bear case on oil prices it would be that we are seeing significant cost improvements in the united states, not just cyclically with a glut of drilling equipment and price income coming down in the oil services industry but the productivity continues to improve. on the flip side, we're not seeing that internationally and the u.s. is a small portion of incremental oil production in
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the world. we continue to see inflation in international costs, when i'm looking at the companies, and owe opec, most opec companies need north of $85 to balance their budgets. the cost profile isn't consistent across the energy industry. we are seeing pockets where the companies are successful at cutting the costs and improving productivity but i don't think that's true inaggregate. >> tell us why you like anadarko and noble energy right here? >> so anadarko and noble are two of the holdings in my fund. these companies have been very successful at exploring and finding new reserves. this has been a unique skillset. the exploration track record of the industry has been abysmal. two companies that have the acreage and teams that have proven to be very, very successful at going out and developing and finding new reserves. i think that is -- that's a differentiated skillset they have. they have strong positions in
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the u.s. shale and i think it's a small list of companies that are going to be able to incre pleasantly reduce costs going forward. anadarko and noble have large positions where they can apply factory drilling to reduce drilling costs. seeing that consistently. >> john, appreciate you coming on today. thank you so much. >> thank you. >> all right. fidelity's john dowd in our energy summit. we can talk about this but want to play a sound bite from mark moebus, on cnbc asia had interesting things to say where his highest conviction trade is right now. let's listen and react on the other side. >> right now, it's commodities, believe it or not. >> commodities? >> commodities are so out of favor. oil is something you've got to watch. i think there will be a recovery in oil. >> agree? disagree? >> i think it's a tough call. i think you could have made the same call, we look at hedge funds and don't invest in them
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and they haven't made money in four or five years and so many have folded. you could have called the bottom in commodities, jim rogers has, how many times has he called it, it's a tough one to make. you need a strong china and they're going towards a consumer consumption than infrastructure build so they will bottom at some point. i don't think you have to play the bottom or try to pick the bottom. >> if i can add two things for people who weren't following this the crb index the measure of commodities is as low as it's been dating back to 2009. crisis era lows in commodity prices in general. taking a step back from this, the idea that you would play commodities is largely a derivative of the dollar trade at this point. if you think the dollar has paekd and the dollar is going to come down for whatever reason in theory commodities would benefit and emerging markets as well. >> the other interesting note as well as jeff currie from goldman with us yesterday, on -- answering the question if we would see another commodity
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super cycle said we're currently still in the super cycle just in a different phase and it will come back around to a bullish opportunity in commodities. >> right. but it sounded like he was pushing that out that time frame out. >> not talking about tomorrow. >> extending it out. to steve's point wait and see some of the fundamentals actually start to show up and then you're not going to be too late because there's plenty of upside. >> it if you're bullish on commodities you have to be long-term bullish on global gdp growth and nobody today is talking about long-term gdp global growth being above trend. so i think you have to be careful if you're going to chase commodities you have to be a true optimist. >> trader blitz on stocks making news and one is linked in announcing the deal to buy an on-line education company. how to play that stock next. "the halftime report" with scott wapner is the place for market moving interviews. >> when you see large currency moves and large price moves in a commodity like oil, you have to be worried. >> real money.
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>> what makes things cheap is uncertainty. >> real debate. >> interest rates are going to go up, they can't drop as much as they did last year to this year. >> the most profitable hour of the trading day. >> if a stock is doubled you haven't missed it. >> the "halftime report" weekdays at noon eastern. leadi. we cut the rates on personal income taxes. we enacted the lowest corporate tax rate since 1968. we eliminated the income tax on manufacturers altogether. with startup-ny, qualified businesses that start, expand or relocate to new york state pay no taxes for 10 years. all to grow our economy and create jobs. see how new york can give your business the opportunity to grow at
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it is time now for our trader blitz, four trades on four stocks news today, intel's acquisition today, does not look like it's happening. >> like they want to give them the heisman now, and that's pushing the name down, but intel, folks criticized me talking about intel, the fact it was up $31 because of the deal, but now the deal's falling apart, it's still above $31. i like the name, showing support here, if options give me something, be in it, it goes higher. >> why a reversal in the stocks today? altera was getting hammered. >> to the downside, maybe they feel like somebody's out there, felt like the $50 level was not enough. maybe it's ip tell or somebody else. i don't know about that. margins are incredible there. margins exceed intel's.
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>> what's the read on alcoa? >> we want to keep buying at these levels, they changed the business, it's a specialty parts maker now, moving away from the commodities, and it's been -- it's the parts in your airplanes, parts in the f-150, it's cheap. we like it. >> steve weiss, bed, bath, and beyond earnings today, right? >> he said your airplane, congratulations on the new purchase. >> i'll take that. >> yeah, look, they missed in terms of the guidance, in terms of same store sales, but seen it before with the company, and it's sort of ridiculous to trade that. if it's a stock you're happy with, it's a buying opportunity for you, quarter to quarter, month to month, difficult sales. >> linkedin is buy, who wants to talk about it? >> i will say when i heard they were buying, i thought it was a website for something else entirely. turns out -- >> and you would know.
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>> which i would know which is why i was caught off guard. there's a $25 membership fee. i don't know the details, but is making revenue. they just didn't buy a website to have fun. >> we talk about the growth stock, internationally, showing growth, similar in a wow lot of ways to netflix where growth is from outside thenitis in a big way. >> i don't follow the stock, but if the labor market is better, i wonder if these stocks and companies that catered to the unemployed market suffer as labor market turns around. >> linkedin focuses on operations, fees, recuring revenue. >> it's a great business model. >> the valuation is too rich for me, but it's a workable model. >> three hours left in the day, and game plan for the second half of the day is coming up after this quick break.
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three things traders watching you might have missed today, what's one of them? >> i think look at the offer made, and in play, pargo in play. >> steve? >> i was looking at netflix, and i was looking at amazon. they had great runs, up 20, 30 % this year, and within 10% of the all-time highs, and it's been very stealth move, and netflix has tremendous growth because broadband rolls out in force in europe. i think those stocks could make new eyes open in the next six months or so. >> is a purchase in the future? >> that's nosebleed territory for me at those multiples. >> sounds like you're making the case, though. >> talking yourself into it. >> i don't think netflix, by the way is expensive. i think amazon is. >> talking yourself into it?
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>> i am. i could use help. i owned it before when cuban had it, obviously too soon. mark did not answer the calls, i was asking for direction. >> amazon? >> would i touch it right now? >> yea. >> i like the name, but i stay away from. more interested in netflix at this point. >> the sentiment that was so negative, seems to have completely turned. >> because of the first quarter. >> he showed if you want to make money, he can. >> the reason amazon is breaking out for the first time ever. with their cloud business. >> the question is, to dan greenhouse's point, did he only show it because he knew wall street was, like, all right, dude, come on. >> don't forget how poor -- i don't follow them, but don't forget the poor sentiment. amazon had a terrible year the prior year. a show-me moment. >> does he go back to the old way? >> he showed us what he can do. >> what if they come out and show the retail business is
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actually making a ton of money and cloud business is losing a ton of money, and you get speculation that, okay, they break it apart, so you have plenty to keep it going. that's in september. you got time to wait, but it could be interesting. >> what about unusual activity? >> well, along with what's talked about, mylan, on tuesday, we had a giant buying on the outside. stock traded $58. now it's at 60 to $70 level. today, more follow-up going out to july, buying the july calls, selling the 80s, looking for the stock to basically potentially get up to $8 0 a share by july. >> okay. so we have, what, three hours to go? three hours and a few seconds left in the trading day. what's your final trade today as we look towards the enof the day? >> i think i stick with what we talked about before, the mylan. there's money to be made. >> greenhouse, leave us with a final thought. >> i don't know what's happening in the next three hours, but health care is an overweight for us. hard not to be overweight on
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health care. >> you really don't know? >> i would buy -- >> you have an apple watch? >> holding up the watch. [ laughter ] >> all right. that's all for us. thank you so much for joining us, have a great day, a enwe'nd see you tomorrow. "halftime" is over, and second half of the trading day begins now. >> i don't know what's happening in the next hour, but it will be good. welcome to power lunch, and we ask you, do you want to save money on your life insurance bills? may be a new way to do it, but you have to give something up, information. are you willing to do that? new report card grading airlines, on time performance, lost luggage, everything else that a business traveler needs to know before booking the next flight rk flight, but we begin now with a perennial question that faces retirees and near retirees. should


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