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tv   Fast Money Halftime Report  CNBC  June 3, 2015 12:00pm-1:01pm EDT

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under $10. in the past they've only offered free delivery for a certain amount of products or premium delivery. it's in top 10 of the nasdaq top 00 gainers. >> which weighs eight ounces? >> one toothbrush. >> that does it for "squawk alley," let's get to headquarters and the half. ♪ ♪ guys, thank you, welcome to the halftime show, let's meet the starting lineup for today. jon and pete najarian, along with josh brown and jim lebenthal. our game plan looks like this, amazon primed, we'll hear from one analyst on why he raised the company's price target. do the traders agree with that call? lutnick live, the bgc boss on the biggest story on the markets today, the spike in global yields, the fed and much more. we begin with stocks picking up steam in the past couple of hours.
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the euro is ripping again and the big focus on what's happening to bond yields around the globe today. spiking in germany. here at home, the 10-year above the highest closing level of 2015. pete najarian what are you watching today? bonds are a big story and the pick up in stocks in the last couple of hours. >> i'm going back to the financials, i mean those have been one of the best reactors and also you look at the technology space. even this morning, when we were up, when we were down, you look at the tech names, the microsofts of the worlds, the old tech, the financials moving to upside and starting to catch a little bit of the ride as we watch the rates as you said. we are pushing the upper end of the range in terms of the rates. i expect to see them actually loosen from here and maybe start to ease back. but for right now, rates are over 230. >> josh maybe we're having a bond pan trum today. i don't know what it is. there's a selloff in yields spiking all over the place. >> you had a bund yielding less than 50 basis points about a week ago. now closer to 80. you have the tlt, down another
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1.6% today. that looks like it wants to challenge the november lows, which opens up the door to the september lows, which is pretty substantial decline. utilities, every single name in the utility index is red today, down about 1.4%. so maybe it's a temper tantrum junior. the most notable thing is the transports ripping, 1.5% on the index. almost every name is in the green, even the airlines with a big downgrade. if you look under the hood, what's working, it ain't the rails and it ain't the airlines, it's the shippers and the expediters, fedex, u.p.s., ch robinson, expediters international. that group is the group leading higher. that tends to coincide with people starting to believe in the economic story once again. >> so many good stories all over the place today. perfect segue to what we really want to focus on off the top of the show here, and that is a battle that is brewing, between the fed heads, ben bernanke and janet yellen. a difference of opinion on
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whether u.s. stocks are too pricey. the former fed chairman writing in his latest blog post quote stock prices have risen rapidly over the past six years or so, but they were also severely depressed during and just after the financial crisis. arguably the fed's actions have not led to permanent increases in stock prices, but instead have returned them to trend. interesting, those comments stand in contrast to janet yellen, who recently said this -- >> i would highlight that equity market valuations at this point, generally are quite high. now they're not so high when you compare the returns on equities to the returns on safe assets like bonds. which are also very low. but they're are potential dangers there. >> so who's right? also with us on set. senior economics reporter steve liesman, who's right? bernanke or yellen? >> it's hard for me to say who is right on stock valuations, because these guys here know
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more about whether or not stocks are highly valued. i look back at what's happened in this recession versus other recessions, have is the metric that bernanke used. >> he says he's got the math to back it up. >> i made the zero month, the last month of each recession. and the green line is our current expansion. and the red line is the one he compared us to and the blue line is the '91 expansion, you can see we've had more points in the current expansion than either of the two expansions. >> what you're telling me -- >> your math tells a different story. >> it's another way of looking at it, whether or not it's over-valuation, especially as yellen suggested relative to the underlying risk-free bond rate return, that's another question. it has been a very stellar expansion for the stock market. >> so doc, who's right? bernanke or yellen? are u.s. stocks too pricey or not? >> well, both are right of course. and the reason, judge, is that bernanke is smart enough to
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basically put it out there that if you're measuring from the trough, in march 6, for instance of '09, sure, the performance is absolutely astounding. and stocks would be overvalued if that was the only measure. but stocks had come down by 40% nearly as they've just tanked and many of the stocks in the financial space almost taken out during that turmoil. so when you look at that, then and if you were to basically be able to smooth that out, which we can't, bernanke is saying well, back to a trend of where we were at that time, we are relative to that, pretty much okay. now there were some sectors back in '07 and '08 that were pretty over-bought, judge. and those same sectors would probably come into focus here. but with a 2.3% yield like pete said today, where we are right now, for the 10-year, i still think stocks are relatively cheap. so i think ben is more right
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than janet is, as far as on a relative basis, against that risk free rate. i think this is still a better place to be in stocks, rather than in the bonds. >> jim lebenthal. who's right and who's wrong? >> i like the way john just said they're both right. >> who is right or wrong? >> i think they're both wrong. i don't think either of them really care about what the level of stocks are. i think they both have different agendas. now i -- >> i think they do i think janet yellen does. >> i think so -- >> why is the fed chair commenting on the stock market to begin with? >> that's a very good question. >> i can weigh in on that. >> why is a former -- before you do that why is a former fed head opining on anything? he should just be in academia or private equity or whatever. i don't think ben bernanke woke up and said i'm going to royal the markets one way or another. i think janet yellen had a very strong purpose when she made the comments a couple of weeks ago and it was to brace the markets that this is not going to be a
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2016 rate hike. it's going to be a fall of this year and most likely september, which by the way, is why the 10-year is over 230. because the market is getting it. >> jeffrey gundlach in the last hour on cnbc said the obvious, stocks love zero interest rates. >> and he loves zero interest rates. >> and people say they're not expensive because of interest rates and he also said that the fed is not going to hike at all. >> scotty. >> i don't think -- >> in 2015. >> i don't think jeff gundlach who i have a lot of respect for or other people i have a lot of respect for, janet yellen or ben bernanke are the correct barometer for stock prices. the latter two are good barometers of what the economy is doing and what the fed fund rate is going to do. >> i think you're wrong in at least one respect is that complaining about bernanke speaking, he's just part of the whole cacaphony of people who have a thought on what's happening. but say ben bernanke shouldn't
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talk is -- >> i didn't say that. >> you asked why he's talking. >> yeah. >> which is the same thing as asking why he's talking. >> it's a way of saying it's not relevant. which is neither one of these -- >> that's different. i want to hear everybody talk and i feel like i'm smart enough to parse who's relevant and who's not think scott did a service by bringing up the two points of view. where you are correct is yellen has a specific reason for saying this. taking the markets off the boil to the extent possible. to pave the way for a smoother increase in rate hikes and no taper tantrum in the stock market is in her interest. >> that's one of her tools. jawboning is an age-old fed tool. they've all done it going back to the '60s, there's documentation this is the one of the things they try to do the problem is it doesn't work that well. when greenspan gave his irrational exuberance speech, it was 1996 and i dow went up from
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there. >> the stocks had really good reasons to go up. >> it's a perfect conversation and you hear more about whether the u.s. is the place to be or globally is the place to be. i want to bring in our next guest, kevin kelly, recon capital. cil, under $215 million under management. you make the case, as many do, don't look to the u.s. any more, look overseas. >> we saw this morning that europe was up. off the heels of the euro being up. we have the markets and their currency actually going up. and now we're bantering about who's right, who's wrong about the fed. we know the facts, over in europe ecb, quantitative ease something happening. the interest rates are down, inflation is up. >> it's working. >> if we look at yesterday, at the auto sales, everyone is talking about american auto manufacturers are coming back. the best numbers were german automobile manufacturers, daimler, mercedes benz was up
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12.2%. audi was up 11%. bmw up 4%. gm was up and ford was down. we're focusing on 30% of the gdp in europe is germany. go to the blue chips over there. invest in the dax index, 18% the dax index is the german manufacturers. >> what do we think, best here, best away? >> well, i think you're best to have a balance to your boifr. so in other words, i wouldn't liquidate -- i know that's not what you're saying. but i wouldn't liquidate u.s. holdings to pile into dax. i think it should be an allocation. >> help me out here. >> that's the single best value. >> the in worst possible markets, brazil, the places that you wouldn't dream of sending your worst enemy's money. >> what's the risk/reward. that's the thing you have to put into the conversation. when you look at u.s. and two specific sectors that are still undervalued, it's financials and tech. and where are they getting most of their monies in terms of tech? it's overseas, as things start
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to improve. that should really boost those multinational technology names. hewlett-packard, microsoft, those kind of names. >> say your wrong, lest we think there's going to be a big u.s. catch-up trade like tom lee and others have mentioned. we're only up 3% relative to far superior gains around the world. >> it's hard to sew that, right? one of the reasons is we're talking about valuation as well. if we look at the dax, it's at 14 times pe. 2.8% dividend yield. look at the fatse 100, they put the election behind them and are up on the year. this year we have election overhang. the ftse 100 gives a 3.7% yield trading at 17 times earnings, next year 15 times, they had the most dividend -- >> one small point, scott, all financial research shows that people are over-invested in their home base. that they are not globally diversified. and a lot of financial research
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shows that global diversification is the only free lunch that's out there. being invested in the entire world is the best free lunch you can get. and most people are overinvested at home. >> let's unpack that a little bit. actually when you add, so you're correct. but i think the nuance is key here. >> by the s&p 500, you get -- >> this is what we do. and the argument is not that foreign stocks are additive to returns with, above and beyond the s&p. over any given five-year period. the argument is by adding foreign stocks to the mix when the u.s. stocks go through lost decades of underperformance, foreign stocks will pick up the baton and carry you the rest of the way. the last time we saw that was obviously from 2000 to 2009. the s&p gave you doughnut as a return, but if you had emerging markets and if you had europe you did very well. you made a lot of money. add in the russell and you did much better than just the s&p. the argument is not one or the
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other. it's got to be a basket of all the asset classes and reconstituted as things move. >> i think we have to acknowledge there's a global recovery under way right now. the u.s. is coming out of its economic doldrums, scott, you mentioned in you're right, quantitative easing is working in europe. china has a ton of stimulus to throw at things. it will to your point, josh, lift the brazils and indias out of their ma lays, it's a global recovery. you should have a strategic allocation. >> who is best leveraged to that, jim? aren't u.s. companies supremely leveraged to global recovery? >> i'm going to play right into your hands here, you're absolutely right. >> play into my hands. >> i have a home-court bias, i'm a u.s. investor. i happen to agree with you. but i think it should be called the peter lynch effect, people invest in what they know. >> a good way to end, steve, thanks, kevin, thank you as well. see you soon. coming up, it's the call of the day and it is amazon. piper's gene munster upping his price target on the stock. it's on the move, one of the
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year's top performers, dot traders agree? with munster? plus, senator elizabeth warren slamming s.e.c. chair, mary jo white sending her an unusually personal and long letter. we have the letter, we have the conversation coming up. and google's annual shareholder meet something just kicking off off in mountainview, we're monitoring that event for any breaking headlines. you know we will bring them to you. there's a difference when you trade with fidelity. one you won't find anywhere else. one-second trade execution. guaranteed. did you see it? in one second, he made a trade, we looked for the best price, and the trade went through. do the other guys guarantee that? didn't think so. open an account and find more of the expertise you need to be a better investor.
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we're back. playbook time, jim lebenthal is still in the lead. 15% gain. josh brown getting a little bit closer. jon najarian is barely hanging on in the green and moments before the show he made a trade. you sold cast light. >> sold cast light. and got on the harley-davidson. the reason i got on there is stock is near it's 52-week low. but it did look like it found a bottom down there. just below 54 and has been moving to the upside. we've, i was speaking with jake novak here at cnbc. one of the stories that i'm about to tweet out by jake is that of course there's going to be a lot of focus on harley over the next several months of the campaign. because scott walker, governor of wisconsin, who is running for president, is going to be riding those harleys and i think there's going to be a lot of
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coverage of him riding those. free publicity. judge. >> hang on, back it up a little bit, right. you're telling me that you bought the stock because scott walk certificate going to be righting a harley on the campaign trail? >> one of the reasons. they increased their dividend, scott. the stock was near a 52 wo-week low, on the technicals it looked like it bottomed on the 352-week lows and is turning to the upside. there's at the money call volume as well. i had plenty of reasons to like the stock and i decided well, castlight had been a nice performer for me. the question was, whether i buy into the idea that rates just get up and keep running from here. i've been wrong in the short-term now on that interest rate call. do i dump that or do i dump castlight? i dumped castlight. the health care play instead and got on to harley. >> you're still stihl holding vxx? >> yes. and the rest of the portfolio remains the same. >> i sold harley when "sons of
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anarchy" announced the final season and if you take a look at the chart, it was good decision. >> remember you can follow all the action on cnbc.com/pro. >> i can't even waste any time with that. because we move on. amazon rallying 40% year to date. does the online retailer have more room to run? our next guest thinks so, piper jaffrey raising amazon's price target today by almost $50, up to $520 a share. gene mnster did it joins us live. why the move today? >> two reasons. first, is even though this whole margin story people are well aware of it and that's been the driver that 40% moving the stock more recently. we think there's more to go with that and particularly the guidance for the september quarter. should be higher than where the street is at and that should confirm and reassure investor who is think that amazon is unpredictable about margin expansion that three quarters in the role does represent a trend and people will get more
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comfortable on the whole margin story. that's part of it. the new piece which we're adding is the idea of revenue growth. amazon invested heavily in 2014 in terms of same-day delivery and other things like lower pricing, and broader shipping, we think that ultimately will have a positive impact on revenue growth. investors have been less focused on that piece, more focused on the margin. we think ultimately that the combination of both of these means there's more upside to the stock over the next couple of quarters. >> the thing that jumps out to me i think the most and i sort of take issue with it is your comment here that e-commerce is still in its infancy. by what measure? >> well, by, that particular comment was from e-marketer, a third-party data that suggested that 6.5% of what's bought is bought online. in the u.s. and it's overstating the obvious, but in some respects, it's important to do that. because i think sometimes we lose track. because we've talked about e-commerce for ten years, this is still in its infancy. and amazon is a market share
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gainer. the fact that they're going after same-day. that's going to have traditional retailers that have had in-store pick-up. when you think about the number, 6.5% or some people have it as high as 10%, either way you cut it. ultimately the number is going to be 30% in 10, 20 years, so amazon is in a great position to have secular growth. >> hey gene what do you think in terms of the cloud itself. isn't that another area where you see extreme growth going forward over the next five years? >> it is. the note today we focus less on that. but ultimately, that cloud is a big part. any business that's, that's less than 1,000 employees is going to be based on the cloud. and today that really is still in the early stages. amazon's done a little bit less, been less aggressive than some of the aws price cuts, positive for margins. but ultimately that's another part of the story that's just undeniable secular themes. in some ways we're overstating the obvious. but in other ways, i think the street doesn't fully understand the magnitude of these themes.
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>> hey, gene, you must have to dance at least with the possible negative that last quarter was just beez zos throwing the marka bone and he was going to go back to his spending ways and just crush margins again. what do you think of the possibility? >> the message they've had for two quarters in a row in their conference call is they're focused on long-term productivity. which is code for margin. so we think that their message is that that's going to continue to improve. if you look at their actions, they show that they're moving towards better margins. in particular a year ago -- >> i would think that's code for spending. >> well, i see it as a little bit different. but the, i think if you look at their actions about some of their spending, it's been less aggressive in this june quarter. and so i think that some of those -- i don't think they're going to have any sort of wild projects like the firephone for example and the significant aws price cuts. so i feel like those are going to be leaning towards more
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progressive margin improvements. >> gene, thank you, talk to you soon. who buys the stock in who likes it or doesn't like it? >> i think we're getting set up here. not by gene, gene's analysis is terrific. but i think nobody knows what's in bezos' mind. long-term productivity to me is spending on driverless cars and drone delivery and that does not equal near--term margin improvement. >> they're trying to deliver faster, cheaper, for customers and then margin. >> it costs money to do that. that's going to hurt margins. so i'm on the sidelines. >> stock broke out in the middle of april. there's a big gap and that's really been support now and i think what you want to focus on is the 50-day moving average. it seems like every time the stock guess gets close to that level, that's when the buyers are coming in. if you're a value investor you're not involved in the name. but if you're training momentum stocks, that's the guidepost you want to use to manage risk. coming up, shares of both linked inn a e
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linkeden and wendy's moving higher. look at the s&p sector heat map. s&p sup 2. cla telecom is the driver. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. ♪ ♪ it took serena williams years to master the two handed backhand.
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back, it's time for the blitz. four trades on four stocks. making news today, first up, the nfl partnering with yahoo. >> yeah, think it could in the future be something. right now it's free, it's going to be interesting. interesting to see how much activity there really is there. and the folks who could watch it on tv versus those that actually want to watch it through the streaming. this will be very interesting. it's a great test market. it's something for yahoo, but this is not going to move the needle that much. >> jimmy, bank of america downgrades american airlines. >> yeah, this is more on this whole capacity thing. and a lot of analysts are worried that they're adding planes across the industry, and that's going to lead to lower margins, lower capacity utilization. my own feeling on this is there's no evidence that capacity utilization or load factor as it's known is going down. i think the selloff is a little overdone. this is great time for airlines with the price of oil where it is. >> pete, you would probably
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agree with that. >> yes. >> linkedin, josh, jp morgan says it's on the focus list and they can fix the guidance they had recently. >> i read the first couple of pamgs on the note. it's up on rumors that carl icahn or some other activist might be accumulating showers. if you look at the way it's traded and bottomed, that wouldn't be so far fetch that they could be trading shares. it got knocked down 60 points after reporting earnings, i like it here. >> doc, we didn't want to give our hamburger correspondent two in a row, so we're giving you wendy's, what's the story? >> well, judge, may 20th, we saw some strong upside call buying at the 11 strike. today tryon comes in of course and says they're doing a modified dutch auction for up to 24% of shares, stock pops to a new 52-week high and obviously peltz is hitting it out of the park as usual. >> you did say if there's one
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thing you know is cheeseburgers. >> i don't eat wendy's. >> your own words. >> i eat cheeseburgers at bobby vann's. scott. >> one of the biggest market stories of the day if not the biggest. who better to ask about it than bgc boss howard lutnick, eel join us first on cnbc next.
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inches. prince ali bin hussein says he welcomes the unexpected resignation of fifa president, sepp blatter. the prince who was defeated against blatter in last week's election, said the world needs to change its view of fifa. harvard university has received the biggest gift in the school's university. a $400 million donation from prominent wall street investor john paulson. paulson is a 1980s graduate of harvard business school.
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southwest has dropped its fares in a 72-hour sale that has some round-trip fares going for under $100. the sale ends tomorrow based on distance and it covers travel from august 25th through december 16th, minus the holiday periods. and since it's lunchtime. a red lobster, cheesecake factory and sonic are among restaurants that nutritionists have singled out for extreme calorie counts. red lobster topping the 2015 extreme eating rewards with a meal and a drink that hits 3600 calories. that includes, however, the 890-calorie 24-ounce lobsterita. back to you. >> i was going to say -- is it like the ginormous lobster mac and cheese or something? >> it's a number of different things combined in a seafood meal, let's just put it that way. >> sue, thanks. crude oil reversing course today, after hitting its highest level of the year, bertha
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couples at the nymex in new york city with the futures now crew. >> yeah, very strange today we did get a number in line as far as the inventory numbers, crude supplies down 1.9 million barrels. gasoline down about 300,000 barrels. scott nation, brian stutman, joining me the next big event is the opec meeting on friday. scott, opec says they're going to stay put. is that going to mean another sell-off? >> it will mean another sell-off. they meet on friday and all the news we've gotten has been bearish for crude oil. whether coming out of iran or if it's saudi arabia, saying recently that their strategy for driving down prices of crude oil in order to kill off new sources of supply is working. so they're not going to change their policy. that doesn't mean prices are going to change. in fact prices are going to continue lower. >> speaking of continuing lower, brian, we are close to falling below $60 again here. what are the levels to watch? >> well i think when you're
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looking at crude here, the range has been set. it's been 57 on the down side and 62 on the top side for wti. and i think you continue to trade around the $60 level if scott's right and we get a selloff on friday, i would be a buyer around the 58.50 level here. until we see a major break out of those levels i'm not going to stand here and take a big position. i'm going to trade around a core value around the $60 level. i think we're in the tight range, there was so much volatility six months ago a lot of that that has come off the table. the range-bound market for crude oil is set in place and i think you trade around the $60. >> thanks for joining us. we'll be back with a live show tomorrow. but do check out futuresnow.cnbc.com. especially about the piece of elise yamata's warning about the dow this summer. let's go now from the energy trade to the bond trade. certainly one of the biggest stories in the market today. howard lutnick is the chairman and chief executive officer at bgc partners.
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he joins us live from the global exchange conference in new york city. an interview you will see first on cnbc. howard, welcome back, nice to see you again. >> great do see you. >> we've got the 10-year treasury as we're having the conversation, at the highest level now, the yield, the highest since november of '14 and we're seeing rates around the globe explode today. what's happening, do you think, in the global bond markets? >> well, you've seen the central government has put this bomb blanket of volatility crushi ii quantitative easing on the bond market. they've pressed interest rates long for so long in such a weird, unnatural way that the world is trying to buck up against that bomb blanket and eventually it's going to come out. but the way it's going to come out in america is they're going to raise interest rates. a half a percent, a quarter of a percent. and let's face it, to people like us, that's not an interest rate. that's you take a million
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dollars, you gets a quarter of a percent, you and your family can go to starbucks and grab a cup of coffee. these are not interest rates, these are really, really low interest rates, which is great great great for real estate and our company has made a great, gigantic investment in real estate brokerage and it's been doing extraordinarily well, probably going to be up 45% this year because of those low interest rates. >> i mean 30-year business or so, is now dedicated to real estate -- a third of your business. >> what happens if rates continue to go up? certainly in the manner and magnitude in which they are today? >> well so we've got you know, bgc partners has got the greatest you know, the way i describe it is we've got the world's biggest sale. as you guys have talked about volatility has been so low, sort of suppressed with the quantitative easing, any volatility is a nice breeze and with the world's biggest sale, you know our company will just take off. we've been living with the
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low-volatility world. in the conference today they called our company, bgc partners, the best trade you could make if you're betting that volatility is going to come back to the markets. rates are going to come back and there's going to be business to be done back in the bond market so the way you're talking today, i another we're having a great day in business because we love volatility at our company. >> no doubt. do you think bonds are in a bubble? >> well, no, i just think bonds have been crushed so low. that it's only a matter of time before they come back up. but it's going to be, i mean the governments are going to take their feet off the gas so darn slow. so slowly, that it's going to be exciting for you to talk about. you know interest rate is up a quarter point. interest rates are up a quarter point. but for the real world it's going to be a slow, slow, steady path through low interest rates. they're going to be with us for four or five years to come, these low interest rates. >> the gang in front of me has some questions for you as well. >> howard lutnick, jon najarian. questions about some of the
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municipal bonds and liquidity or lackof. volume is great for you guys on the real estate side and the regular bonds, but how about the munis where we hear so much of the volume isn't there. the liquidity isn't there any more? >> the problem is, municipal, municipalities have had credit issues. so they've become more of a credit story. they used to be more of a rates story about what's the interest rate. now you really got to study when you look at municipalities, you got to study the credit quality, of those municipalities. people have seen detroit have problems and other cities have had problems. so they've become a credit story and therefore, that needs to change. so buyers of municipal bonds need to become more credit-sensitive. and they're going to demand higher yields and as that friction works its way through, it's going to be a while before you see volume back in the municipal bond market. it will take a while. but as interest rates start to rise, you'll start to see the volume come back again. but it's going to take a little bit of time.
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>> howard, it's josh brown. one of the things we keep hearing over and over again and granted there's some partisan element to this is that because of new financial regulation, when the market needs broker dealers and the wire houses to be out there providing liquidity in a dislocation, they're not going to be. because they've been forced to shed so many of their trading desks and so much of their expertise in that area. do you buy into that? or is it really a benefit for guys like yourself, who are willing to step up when some of the bigger firms have been taken out of that business because of the deposit side of what they do? >> so you're right, but the way it's going to play out is the big banks are getting their capital sort of, their wings clipped every day by the regulators. more cost to capital, less trading, more koth to capital, less trading. what you're seeing happen is those traders, those individual people are now leaving banks, some of them and they're going to funds who will back them with capital. so the same people are still in the business, what's happening
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is, it's fragmenting. so instead of 100% of the business being in the top 12 banks of the world, now 89% or 92% are in the bing b.i.g. banks and 8% have gone to other funds backing the traders. so what we're see something more clients coming into the market. but they're not different people. they're still the same traders going out and finding capital to back them as they want to make markets and they want to trade. so what you're going to see is a growing fragmentation. but i don't believe that you're not going to get that liquidity. because i think what's going to happen is the opportunity to make money and providing the liquidity will just be offered by new firms backing those clients. you're going to see you know new broker/dealers, new hedge funds, firms like blackstone and citadel stepping in a that space and i think you're going to see a new class of broker. remember in the government securities business, it used to be ten years ago, eight of the top ten firms with a household names that you would think and
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when we sold esb two years ago, two of the top ten were names that you would think of. everyone else were people who left the big banks and went to new firms to trade. that's the future. it's going to be a fragmentation. but not a gigantic fragmentation, fragmenting along the edges. >> thanks for playing "halftime" with us, we'll see you soon. >> great to see you. >> bgc's howard lutnick. coming up, senator elizabeth warren slamming s.e.c. chair mary jo white. is her criticism warranted? or just over the top? first look at the major averages right now. dow hanging on to gain of 63. the s&p is barely hanging on to green, up three, we're back after this.
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big questions wall street has faced, do you get an mba or go for the cfa, which is the better investment? and the fed's latest pulse on the u.s. economy, talking about the beige book being released during our show. and of course, it may be a market mover. lots of things coming up. back to you. >> we will see you in a few. s.e.c. chairwoman mary jo white finding herself in the crosshairs after receiving a harsh letter from massachusetts senator elizabeth warren criticizing the s.e.c. head's leadership. amon jafars joins us from d.c. with the story. 12 pages and the senator rips into the s.e.c. chair pretty well. >> it's an unusually personal fight here between the senator and the s.e.c. chair. and that letter, it's 12 pages and maybe 13 depending on how you count. look at the bit from the letter in which warren writes to write. based on a meeting they had earlier. warren says you have been s.e.c. chair for over two years and to date your leadership of the
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commission has been extremely disappointing. now s.e.c. chair white responding with a statement saying i am very proud of the agency's achievements under my leadership. including our record year in enforcement. scott i'm told by an s.e.c. official, that the two women have not spoken since this exchange of letters and statements yesterday. but obviously a lot to unpack here. what is this all about? a couple of the big issues raised in warren's letter, include the question of whether or not white gave senator warren some misinformation in a meeting that they had over this whole rule-making process out of dodd-frank about executives at large financial institutions disclosing their pay packages and how those pay packages relate to the rank-and-file workforce at their firm. warren says that mary jo white told her they would be ready by the fall. but in fact an s.e.c. filing in omb filing suggests it won't be ready until the spring. warren clearly feels in her letter she got some misinformation. the s.e.c. says, however, this is simply a paperwork
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misunderstanding and if warren's staff had called them they could have cleared it up in the first place. another big issue here between the two relates to this question of recusals. this is an issue that came up in mary jo white's confirmation battle. she is a a former corporate lawyer. her husband is a corporate lawyer, both at big-time firms that do a lot of business with the s.e.c. there's some question about how much mary jo white has it recuse herself from ongoing s.e.c. business. warren wants an answer to that question. i can tell thaw "the new york times" estimated earlier this year that there have been about four dozen cases where mary jo white has had to recuse herself from ongoing s.e.c. business. so a lot to unpack here, scott, but real personal nature to this battle here. and really intense criticisms from elizabeth warren. >> no dot and after further review, 13 pages, you're right, the signature is big and it takes up -- >> the signature goes on to the 13th page. call it what you want. >> amon, thanks so much. coming up, the najarians cooking up something unusual in the financials, jon and pete to the telestrator, next.
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>> double the trouble. what unusual activity has you guys at the telestrator today? >> start off with a financial. aig. one of the stocks are part of the bailout. take a look at year to date.
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bottom here basically around 49. today trading towards 61. not surprising, they came in and were buying the 61 calls. they have run them all the way up to about 30 sends so far here today. a nice big purchase and it goes higher. they are spinning off the airplane and leasing business. they own 51% of aer and that was unusual activity about a month ago. you in? >> i'm in the calls here. >> for how long? >> probably one week. these are june calls. i am not going to overstay my welcome. >> talk to me, pete. >> sticking with a little bit of playoff financials. met life. sort of similar to what john had up there a minute ago. look at where it bottomed out and where it is now. it's above the 50 and 200 day moving average. they bought aggressively early and they were starting to take
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that off. i never got in the trade. i tried to be patient and tried to buy them where everybody was buying them. i couldn't get them. 4500 trading and they are off to the races. they have donated two tickets to their own invest like a monster conference. to bid on the tickets search invest like a monster. 100%. all of it going to sloan. coming up, we go under the radar and give you your playbook for the second half of this day.
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concerts. they think it's going to be a banner year. 70 different festivals happening around the world. here in the u.s., concert box office should break every record out there. that's good for a stock called live nation. they have a strangle hold on the industry and they own ticket master. they are getting paid left and right. stock looks great on a technical basis. if they continue to compound, free cash flow growth in the mid-teens. this can double once again. i like this name. >> i am looking at the solar name. we are all talking about energy and we focus on the oil and it's somewhere around 61. 61 or 58. we look at the stocks and a year to date, great run. the last couple of weeks, not so great. something to keep an eye on. maybe on the pull back, that creates an opportunity. >> every wednesday we get reports from the mortgage banker's application. for six weeks, we have been down
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and down big. this flies in the face of the housing results that are doing well. what it told me is housing is selling without mortgages. there is a lot of deep pocketed consumers who are buying houses with cash or with their investments and that would explain why sales have been punk the last five months and told me the same consumers are going to be furnishing the homes in the coming months. that bodes well for retail and why the final trade for today is jcpenney. >> herron therapeutics. we are talking about this last friday because of the activity earlier in the week that preceded it. that's when it was a $12 stock. they came out with the treatment positive results for nausea for folks that are going through chemotherapy, god bless them. this drug is a godsend and the stock has more than doubled. the stock has more than doubled. it was $12 stock last wednesday and now it's trading towards
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$26. >> let's go to the 10-year yield. i want to talk about the time we have left as we set up for the second half. this morning, that yield was at 2.27. it's like 2:33 to 2:38. in the span of a few hours, that's not normal. >> the thing is that first of all, the only market that has gotten the rates right so far is the fed funds futures market. all the economists have gotten it wrong. when you look at what they are pricing in, they haven't budged. under a 30% chance of a move in september. greater than 50% chance of sometime early 2016. that's not necessarily the market agreeing unanimously that something will happen in september yet. >> i'm going to point out something. this is healthy to be at 2.38% with a roughly 1.9% inflation
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rate. >> is it healthy when you were at 2.27% three hours ago? >> yes. that was not the right number. here's what i'm driving at. you have a real rate that is 47 basis points. a real 10-year rate is healthy. >> that's the last word. power begins now. >> halftime is over. power lunch and the second half of the trading day starts now. >> indeed it does. i'm mandy drury with brian sullivan. it is rally time and stocks are on a roll at this hour and they are even picking up. >> growth in the usa. steve liesman going through all of the data and he believes it said something important about growth in the second quarter. >> and the meal that ha has the food watch watchers aghast. 3600 calories, the list of the restaurants with the highest calorie counts. the offenders. we begin with the major averages

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