Skip to main content

tv   Fast Money Halftime Report  CNBC  June 17, 2015 12:00pm-1:01pm EDT

12:00 pm
of the galaxy," it's probably marvel saying, you don't have to choose, we love you, too. we'll have some sequels over there. that does it for "squawk alley," keep your eye on the dow. some of the bids have been lost, as we get closer to the fed statement and the presser. now to headquarters and the half. thanks so much. welcome to the halftime show, let's meet the starting lineup. joe terranova sheer with jim lebenthal and pete najarian. our game plan looks like this, stock shock, one analyst says to sell bristol-myers and our desk is fired up about it. is our call of the day a bull's eye or simply full of bull? the right fit as fitness company fitbit prepares to go public. we take the pulse of this latest and greatest ipo. kayla with what you need to know. the fed's decision on interest rates, just two hours away now, but it's janet yellen's news conference at 2:30, where the real fireworks
12:01 pm
could happen. that's where we kick things off today. steve liesman will likely be asking the fed chair a question today. but first he joins us from washington with what investors should really expect to happen. and steve, the fed chair's communications skills are going to be put to the test today, i think. >> i think that's right, scott. what we're going to see is the fed will almost certainly upgrade the economic outlook today. the question ask whether or not it's going to be strong enough to definitively signal a rate hike in the months ahead. the cnbc rapid update says gdp is running about 3% rate in the second quarter. job growth averages 250,000 the past two months. wage growth, 2.3% year over year. up p brn 3% compared to the last payroll report. so clues about whether the hike is coming, we'll be watching the dot plot. watching it closely. are the fed members' own forecast for rate hikes in the years ahead. the new improved cnbc dot plot
12:02 pm
shows us. the more fomc members are at 0.63 for 2016. for 2017, 3.12. can you see how the bubble has changed in the next chart. from 2015 from december to april. the range got smaller. there it is. and the mid-point came down. in the april estimate, 15 of the 17 members had at least a quarter-point hike built in for this year. 14 of them had two quarter-point hikes built in. if that's still the case, you would think at least one rate hike has to happen this year and likely two if this, if they don't change them much. so leadership at the fed, guys, still grappling with whether or not the second quarter rebound was strong enough. the contraction in the first quarter. it also has to factor in the consequences of the stronger dollar. if europe continues to ease and the u.s. hikes. finally brace for possible fall. from a possible greek default.
12:03 pm
all of that combines to tell us why the fed will likely wait today on rates. and possibly signal a rate hike for sometime tomorrow. scott? >> i think we're going to be riveted in a couple of hours' time. we know we'll see you in the news conference. look forward to hearing from you. what's your fed playbook, joe here? >> sell utilities, sell bond proxies. >> utilities up 1%, biggest gain since may 15th. still worst year to date. got a nice bump today. >> and sell any rebound that you're going to get in utilities because the overall trend for utilities so far this year has been down. get rid of the bond proxies, go to pete's favorite sector which would be financials, more specifically i would be looking at regional banks. i think the federal reserve has to acknowledge the financial conditions have tightened over the last quarter versus what they witnessed in the first quarter. >> i think obviously you want to look at the u.s. 10-year, does it get back above 2.5%.
12:04 pm
you've got the concerns with greece. >> you're betting she lays the ground work. she being the fed chair with respect to the office obviously. you think that she, janet yellen lays the ground work for a fed rate hike later this year? >> i think that potentially she's more dovish than we expect her to be. which would not be consistent with the strategy that you're asking me for. i don't -- >> you think she's going to be more dove snish. >> she might be. >> she might be concerned. she might be concerned about what's going on with greece. but i think the reality of what the next six to nine months are going to present for the markets is going to have to have the federal reserve move on rates. i want folks to be prepared for that i don't think the market believes her any more. i think they have to move. when you look at the labor markets and the modest uptick in inflation, think the federal reserve is going to move at the end of the year and i think rates are going to reflect that. >> pete? >> depending on the economy. i think you'll hear a lot less
12:05 pm
about greece and you'll hear more about the economy the first quarter. >> you know they're going to be dependant, data-dependant. >> right. it's there for them to do did now. but they're not going to do it as my answer. >> do you think that janet yellen then lays the groundwork today for something to happen later in the year? >> in september and maybe even one more this year. think the gradual quarter-point. another potential quarter-point before the end of the year. >> joe's betting on rates going down today. >> no, no. in terms of a actual investment strategy. the rhetoric might there be. the rhetoric might be there to balance what comes in in the eurozone the next couple of days. but don't believe it. exactly what pete's telling you, go with the strategy to expect rates to rise, that's the reality of what's going to happen. >> i still look, you talk about some of the areas you might look to and joe mentioned utilities, i'm not sure i'm looking there right now. i'm looking at i still stick with the financials.
12:06 pm
we had paper just yesterday in key, one of the regional banks, we're seeing it in the regionals, in the supers, many of those involved, the goldman sachs and morgan stanleys of the world. we're seeing paper just about everywhere in the financials. but don't discount health care, this is the spot to be. >> you guys hold your thoughts, i've got to go down to washington, d.c., breaking news from eamon javers, the fcc plans to fine at&t $100 million for misleading customers about unlimited data plans. they say it violates transparency obligations. the fcc saying that its investigation alleges that at&t severely slowed down the data speeds for customers with unlimited data plans and that the company failed to adequately notify its customers that they could receive speeds slower than normal network speeds, that at&t advertised. this conference call is ongoing right now.
12:07 pm
scott, we'll listen to it and bring you more details as we have them. >> eamon, thank you so much. down in d.c., so much activity. jim lebenthal sitting with me as well. i want to get to our first guest of the day, the number one ranked strategist by institutional investor, want to find out where he thinks the markets are heading now. atul leilei is with delltech international. welcome back. nice to see you. >> give us your view on what you think is going to happen today and how you would invest as a result? >> good question, so today we think the fed is going to come out and reiterate that the first quarter was a soft patch. and also, increase their confidence in the economic outlook and we f we look back at what's happened since the fed last spoke to us in this formal setting, we've seen all the data across the board improve for the u.s. on the consumption side, it's improved. housing market index up.
12:08 pm
on the cap ex side we're seeing companies which are planning to invest so across the board we've seen an improvement in data and the fed will be reflecting that. they're a data-dependant fed. >> you want to short the xlu? >> absolutely. >> you want to get out of any sort of bond proxy in. >> absolutely. tactical portfolios, we are short xlu, 20% of the portfolios, short that ticker at the moment. as well as that we're long on some of the areas where we are -- >> it's a big position. >> it's a big position, we want to be moving out of those bond proxies. as well as that, it's a good way to capitalize on the fact that markets are expensive in absolute terms. so in a sense it's a little market hedge. as well as being a hedge against the area which we do thing are going sold off more aggressively which are the interest-rate sensitive stocks. >> i'm going to synthesize what everybody is saying here. i strongly believe there will be a september rate hike and that janet yellen will make that clear.
12:09 pm
data has been very positive and revisions to earlier in the year data which was quite terrible has been revised upward. i think that's a no-brainer. where she comes in dovish is along with the rest of the fomc, the dot plot is going to come down. what it's going to say is you're going to have a shallower lift-off into 2016. the way to play this is i hear you guys on the xlu, but i think the overall stock market is going to rally on what will be perceived as a dovish lift-off trajectory and it's going to support just about everything in there. >> sustainable rally? >> sustainable through the end of today, joe. but tomorrow, the answer to your question is tomorrow it's not going to be about the fed, it's going to be going back to what's happening in greece. the train is coming to the end of the tracks and it's still going at full speed. >> yields are 2.37 on the 10-year note. the high of the day ahead of the fed statement and the news conference. where do you want to be in this world that we're about to enter into? >> from an asset allocation
12:10 pm
perspective, still overwhelmingly favoring equities over fixed income because rates are moving up. globally within equities, number one preference is for japan. two reasons, japan is a single best leveraged economy to recover in global growth. number two if you look at japan versus other developed markets, it's got the highest percentage of oil imports as a percentage of gdp so it's leveraged to both of them. japan is number one. followed by the u.s. in certain sectors, in u.s. retail, technology, playing that cap ex theme in u.s. industrial production and europe, we've got broad european exposure in european banks as well. >> one thing we've been looking at a lot and i'm curious of your opinion, companies that have not just strong balance sheets, but a lot of excess cash. it goes to old-line tech into which i include qualcomm, certainly kisco. but apple -- cisco. a quarter-point raise in september and a quarter-point in september of next year. that's a lot of extra interest
12:11 pm
income shares that are quite lowly valued in these old-tech companies. >> we are holders of apple and google which is starting to become old-line tech in some senses. we do like them for the fact that they've got very robust businesses and very robust balance sheets what we're looking forward to them doing is actually putting the cash to work. it's still a very good environment for m&a. as much as we're all talking about rates going up, the outright rate environment is still quite low. we would like to see the tech companies putting those to work. we're believers in the u.s. capital expenditure cycle picking up in 2015 and 2016. >> strategy in the fixed income market, the high-yield market would be a little bit vulnerable. why not looking at a lot of the etfs that have the potential liquidity issues, why not look at the hyg, try and go out and try puts underneath the market. do you view high-yield as
12:12 pm
potentially problematic in the economic scenario and market scenario that you're projecting? >> absolutely. that's a good point. since june last year so june 2014, and through to the end of september. 2015 14, we removed all of the high-yield exposure from our client portfolios, we advised our clients to do the same. we're out of anything carry trade sensitive. it's slowing globally. it will pull the rug out. we would be looking at a short opportunity in high-yield credit. right now our allocation is zero. >> i see in your top list of names, one is ford. this is a name that just cannot seem to get things right, cannot seem to go to the upside. what is it that you see and what kind of a timeframe do you have on that? >> we're bullish on the u.s. consumer. u.s. savings rate has been restored and consumer confidence is very high. asset rises are rising. so that's the number one thing.
12:13 pm
underpinning our ford call. as well as that, it's undervalued if you look at the pay it's trading sub10 on some consensus numbers. >> is this a long-term hold for you? >> i see the stock continuing to get hit to the down side and like you, i see the positives, i don't see when and why that's going to kick in. >> we've held ford for six months, and we expect that over the next six months you'll start to see the u.s. consumer recovery come through and ford along with that. >> mitchell, thanks for being here. >> atul lele. shares of bristen myers up 40% but one analyst thinks it's out of steam. bristol-myers. plus time to get back in the ring from wwe? that's the call from one firm. wrestlemania over this name, pete. coming up. and the fed, the decision, 2:00 p.m. eastern, the news conference after that.
12:14 pm
"power lunch" with an all-star lineup today, including pimco's scott mather, bill gross of january "ui janus. right now yields at the highs. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. and it's only on fidelity.com. open an account and find more of the expertise you need to be a better investor.
12:15 pm
12:16 pm
12:17 pm
women, there's the market picture, a couple of hours to go before we get the fed statement and the all-important news conference in washington, d.c. with fed chair janet yellen taking center stage today. stocks at their lows, modest losses, bond yields have been ticking higher, watching it for you ahead of that big event in a couple of hours' time. big call on bristol-myers, piper jaffrey saying the pharmaceutical company is modestly overvalued. slapped an underweight rating on the stock. it is our call of the day. pete this is a sell to a stock that over the last year has been up 40%. year to date up 12%. what do you think? >> i just bought some more last week when we had an opportunity when the stock got hit to the down side, traded down 65, after asco and some of the news not what everybody expected. this is a biopharma stom stock, not just a pharmaceutical company.
12:18 pm
that's transformed themselves. when you look at the oncology pipeline they've got now, this is a company that's been in transition, everybody talked about all of the patents going away. this is one of these names where i look at it and i think every time there's an opportunity on the selloffs to buy, i think at 65 it was a steal. i think it's going back towards 70. >> jim cramer -- >> bristol-myers. he doesn't like the call, either. i'll tell you that. >> jimmy is a sharp guy. >> your comments on "squawk on the street." thereafter an exchange i had asking what he thought about it. part of the point here is that much so much m&a going on in the space and i think jim mentioned this today, they could be bought tomorrow by somebody. >> they could be bought tomorrow, an excellent point and fundamentally. think about the immunooncology component of it. how valuable is that, what's their potential market share as it relation to the lung. possibly as much as 50%.
12:19 pm
while they're slapping a $60 price target onnen this i'll go the other way, slap a $70 target on bristol-myers, you're going to sell the stock at $65 because you think they're going to $6. who would ever make that trade with any understanding of risk management. >> i'm going to add to the unanimous voices here this seems like a classic analyst initiates an underweight so he can kbrup yup grade a couple of months from now and look like a hero. it's the leader in the leading edge of oncology which is as joe pointed out is immunology, oncology. there's no way the market share or market overall is shrinking. you've got 0 to show me evidence that they're losing leadership. >> it's about partnerships and acquisitions and just yesterday, it's interesting when the guy has this call, because morgan stanley reiterated the buy and put an $80 target on it. so the street does not necessarily agree. credit suisse has 75. >> they initiate shares of
12:20 pm
lilly, pfizer, abvi with buy equivalent rate tlgs. those stocks have done incredibly well which is interesting that they flag modestly overvalued. when some of these other nation, lilly's, pfizer, abvi are among the best performers. >> and i love lilly. you look at the move that lilly just made in the last week or so, scott and that name is not somehow on the list. lilly jumps up to $87. you think if you were going to attack any of these names right now, it would be lilly. >> pfizer has not performed as well as either lilly or bmy so on a relative value basis, i can understand why he would put it at buy. >> pfizer is up 5% year to date. lilly, 23% year to date, 43% over one year. and over one year abvi is up that way as well. >> you got to go back to the
12:21 pm
function of these analyst notes and for those that follow them, okay. these are for the clients, these are for those that potentially have bristol-myers on, we're thinking rate of advance moderates for bristol at a 60 stock. people that take these at a sell and say let's initiate a position if you're going to put a sell on something, do a david inchhorn style. tell me it's going to go down 50%, that gets you interested if selling it short, naked, not thinking it's going to did go do $5 on a $65 stock. >> he was trying to compare to peak earnings, peak numbers from 2011. i don't think you want to go there. i think you got to look at what you've got now, what the company is now versus then. a completely different company and they've gone bio, versus just being big pharma. >> i know you're not taking that call this seriously. coming up, wwe gets a buy, but is it a good pick for your
12:22 pm
portfolio? plus fedex missing street estimates what it means for the u.s. economy. how about fitness band maker fitbit? expected to price its ipo tonight. the competitive edge in that space is coming up. 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. leave early go roam sleep in sleep out star gaze dream big
12:23 pm
wander more care less beat sunrise chase sunset do it all. on us. get your first month's payment plus five years wear and tear coverage. make the most of summer... with volvo. americans. we're living longer than ever.
12:24 pm
as we age, certain nutrients... ...become especially important. from the makers of one a day fifty-plus. new one a day proactive sixty-five plus. with high potency vitamin b12... ...and more vitamin d. when you're not confident your company's data is secure, the possibility of a breach can quickly become the only thing you think about. that's where at&t can help. we monitor network traffic worldwide, so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most.
12:25 pm
time now for our trader blitz, three trades on three stocks making news today. all right, pete. fedex missed on the top and the bottom. >> they missed on the earnings and revenues. but they were still up 8% when it comes to their earnings, so i look at that number and i think it's pretty impressive. stock is up 25%, you expect to see a pullback, i think the pullback might be overexaggerated. i think there's a level where can you step back into this name. >> you have u.p.s. in your playbook? >> yes. >> i don't think, when i looked at this and i look at ground
12:26 pm
shipping up 19%. some of the numbers were very good. there's other reasons why they missed. it was less about the business and more about within the employees themselves. >> u.p.s. doing something better that fedex isn't? >> i think u.p.s. is making the catch-up. i think the problem with u.p.s. has been the holiday quarter. two years in a row, i think they make up for that and maybe the stock actually gets back up towards the 110 level. >> bob wechbs a beat and a big one. >> bob evans with a beat. >> a good beat. frankly there's inconsistency in the results here so the stock sup, it's not up that much. i think the reason is because it is pretty expensive, about 26 times forward 12-month earnings for a company that has somewhat inconsistent earnings, i think can you hold it here, but i wouldn't initiate a position here, it's too expensive. >> joe, i feel weird giving this to you and not to pete for obvious reasons. >> obvious to everybody watching. the guy looks like he could be
12:27 pm
jesse the body. >> well maybe the najarians got signed as a new tag team wrestling duo. >> that almost happened at the end of my football playing time. >> world wrestling entertainment initiated with a buy, btig, joe? >> what category is this if i'm a money manager? is this entertainment? >> entertainment. >> so i -- i'll ignore some of the other names and go with this one. this stock had an incredibly volatile 2014. up to 30, go down to 10. i don't like stocks that make that kind of move. yes it's at 16 right now if they sign the najarians as a new tag team duo, then i'm interested. >> who was your favorite wrestler back in the day? >> jesse the body ventura. he became a governor, a navy s.e.a.l. >> minnesota guy. >> went to a local high school. he was a competitor of ours. great guy, roosevelt high school in minneapolis this guy is the best. >> women's threat, the man's
12:28 pm
regret. you know. gap's shifting strategy, closing stores, laying off workers, retail expert dana tellcy joins us next. and the countdown to the fed decision is on. about an hour and a half to go before we get that decision. more sectors in the red than green. stocks pretty much at their lows, we await the big event in d.c., we have all of it for you live. it took serena williams years to master the two handed backhand. but only one shot to master the chase mobile app. technology designed for you. so you can easily master the way you bank.
12:29 pm
it's part geek and part chic. part adventure. it's part relaxation and part exhilaration. it's part sports car and part suv. and the best part? the 2015 gla. it's 100% mercedes-benz. what if there were only one kind of dog? then it would be easy to know everything about that one breed. but in fact, there are over three hundred breeds of dogs. because no one can be an expert in every one... an app powered by ibm watson will help vets tap specialized knowledge in the cloud for every breed... and whatever else walks, flies or slithers through the door. ibm watson is working to make medicine smarter every day.
12:30 pm
12:31 pm
. hi, everybody, i'm sue herera with your cnbc news update. a fifth juror has been dismissed from the james holmes murder trial. the judge responding to a motion by the defense. the juror had told the court that she had recognized one of the trial's witnesses. holmes is on trial for the aurora, colorado theater massac massacre. a setback for uber, the california labor commission ruling that a san francisco-based uber driver was an employee of the company and not a contractor as uber had argued. that opens uber up to higher costs, including social security, workers compensation and unemployment insurance. the bird flu outbreak that has raised prices on turkey and
12:32 pm
eggs has lowered prices on chicken in the u.s. according to the department of agriculture, because many countries have restricted imports of poultry products, chicken is more plentiful in the u.s. and burger king is introducing an all-red chicken burger. in japan. yum. it's samurai burger goes on sale july 3rd. red buns, red cheese and red hot sauce, the chain improving its black hamburger which it introduced last year. back to you, scotty. >> i'm down with that. >> i don't know if i am. how do they get the bun to look that red? it's good to have food coloring in it and -- >> maybe so. >> anyway. back to you guys. >> beet juice. >> chew on that. >> where's dom? >> our sandwich correspondent. >> he's at shame shack right now. sue, thanks. shares of gap under pressure. comes after 23 hours after gap
12:33 pm
gave color to investors and analysts on how it plans to revamp the brand. the retail, actually closing a bump of stores and laying off a lot of workers. retailer is down 10% this year. here to discuss whether a comeback is in the works is veteran retail analyst dana telsey. were you in san francisco at the investor meeting, what's your take away on gpa? >> i think overall this is going to take time. spring of 2016 is when you should have the no excuses time period so to speak when the gap brands merchandise is what they would like to see it to be and the same thing for banana. the closing stores of gap brand, a long time in coming, the stores have been around for quite some time and some of them may not have made the hurdles that they would have liked. while it is contribution-neutral, getting the brand to be stronger on the product side will help to drive traffic over time. old navy is working and banana and core gap have work ahead of them. >> let's talk about other names,
12:34 pm
joe terranova is here on the desk with me. and has a question for you. >> dana, i got to ask you a tough question, the last time we spoke, we talked about mike many kors, have your feelings changed since the free fall price target changed your opinion of the stock? where are we now on it? >> we lowered our price target, we lowered our rating and frankly, handbags slowdown is certainly a concern. we're seeing other categories pick up. cosmetics foot wear, improvement in jewelry. it's disappointing, certainly the growth you've had at kors is still going to grow, but not at the same rate as expected. other categories that consumers are becoming more interested in. >> what's the rating and what's the price target? >> market perform rating went from an outperform, to a price target of $50. this year overall you'll see more modest growth. we'll have to see if europe and extended categories take up the growth next year. >> dana, when you speak, people listen. when it pertains to this space.
12:35 pm
what would cause to you put a sell on kors? you sound like the wheels are off this train. >> i think it's basically it's more modest growth rate than what it had been before. i think you have a category that's growing at a lesser rate. kors has still new products that continue to gain share. or that small leather goods, whether it's jewelry, the handbag category itself, the outlet store it is has, along with the full price stores, these full price stores that they have, it's the weakness in tourism that's hurting some of the businesses in urban areas. you still have a business overall that it's quite robust in terms of the size and scale of the business and categories they're adding. it's a more modest rate of growth this year than what you've had in the years past. >> dana, jim lebenthal. gap closing stores, going into the negative story on kors. are you worried in particular about consumption overall? we've had a thesis at our firm that consumption is set to grow
12:36 pm
just with the labor market overall and the end of deleveraging, but some of the stories, gap closing 900 stores makes you wonder. what do you think? >> gap is closing around 175 stores. think it's where consumers are spending that's the shift. look what we've seen with travel and lodging and look what we've seen with restaurants and in certain areas of discretionary, whether it's active or cosmetics, those are the areas that are growing. along with off-price, i think brands matter, we're going to see nike's earnings come out next week and i think we'll continue to see robust growth out of the whole active category. it's much more defined, it's not everything as it's been in the past. but you've seen value certainly take hold. and on the high end side, look what neiman marcus saw also, you saw a slow-down in the rate of comp store sales. >> the slowdown in handbags for kors. is that a industry-wide issue?
12:37 pm
and means that you got to beware of kate spade? you've got to beware of coach and even some potential higher-end names? >> i think we've seen that. i think anywhere where it gets significant dollars, out of tourist areas, whether it's ralph, whether it's tiffany, whether it's kate. we've seen slower growth in tourist areas. i think businesses that whether it's rejuvenated product, like what you'll see from tiffany by the fourth quarter. i think we'll see a traction change and that will improve. what you're going to see with kate spade, it's not as big as what kors is or what coach is so there's more opportunity for higher rate of comp growth than what you have out of the others. >> dana, always a pressure. dana telsey. dr. j, welcome to the party. a little airline issues, but good to have you in the house. >> mechanical. you want to talk retail? >> sure, as you know, we bought
12:38 pm
kors on the big dip a few weeks ago after the report. still hold it for client accounts, we a believer in the turn-around and as far as jim's comments about gap, i think overall, jim, with old navy doing as well as it's doing, i would love to change the name of the store from gap to old navy. target did that when they were dayton hudson and they flipped over to target. don't be surprised at some point if they flip over and say hey, old navy is our brand, not gap. >> bonds moving lower ahead of the fed's statement that means yields are moving higher. jackie de angelis at the nymex with the futures now crew. >> that's exactly right. everybody watching the 10-year yield. what's interesting obviously the market participants believe we're going to get a rake hike in september. but jeff killberg, do you think there could be any surprise from yellen today? >> i don't think yellen has surprises yet, jackie. she's not about to now.
12:39 pm
here in the heart of the treasury market in chicago we're getting excited about the engine being started. let's be clear, we're not going to hear from yellen say ladies and gentlemen start your engine. what we are going to hear is ladies and gentlemen, consider to potentially start your engine. i think it will be slower, lower for the longer rates, the 10-year is at 2.37, but look for it to gravitate back down after the meeting. >> chris, how about 3% on the 10-year, maybe this year? >> i don't think so. i see 2.49 as the next level of resistance, then 2.63 to 2.37. i don't think we're so much concerned about the first interest rate right now, the think the hike, think it's the second one we have to worry about. and janet yellen will make the landing, like the gymnast. making it as soft as possible. >> meantime, more on the futures market. head to the website, futuresnow.cnbc.com. coming up, starbucks shares hitting an all-time high.
12:40 pm
lus, fitbit set to go public tomorrow morning. account fitness band maker compete with the other heavy hitters like apple and nike. back after this. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets
12:41 pm
and drive forward with broader possibilities. cme group: how the world advances. every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪
12:42 pm
usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year?
12:43 pm
in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business. coming up at the top of the hour, monster two hours ahead. we have the feds latest rate decision and statement. and fed chair yellen's news conference. will investors get new clues about future rate hikes, an all-star line jup. pimco's ceo scott mather. and bill gross of janus. just to name a few, a lot more you can't afford to miss, join us two hours on "power lunch." all here for fed day. >> we'll be there, thanks so much. shares of david's tea and starbucks on the move. dom chu at the market flash desk with that. >> shares of david's tea, very
12:44 pm
much in hot water, please forgive the pun. the stock down about 20%, the canadian specialty tea retailer reported a loss in its first quarterly report as a public company. high-profile ipo this month. the company blames costs related to the poir aipo and a stronger dollar. we will say it's tough, no analyst coverage, no comparable estimates, they do say though, current quarter they're going to post a loss, that's why the shares are down. starbucks in the news, closing its 23 existing la boulange pastry shops, starbucks will continue to sell the la boulange products in its stores, but says the separate boutiques for la boulange and the operations are a distraction, they'll continue to sell the pastries, just not in their individual stores, keep them in starbucks, back to you. >> pete, starbucks? >> you still can stick with it i'm not in it now but i like the name and i've rotated into other areas, i like what starbucks is doing. sometimes you have to flush something when it's not working. look what target had to do and cornell made the great decision
12:45 pm
with canada. this is what we're seeing here, $100 million, they bought 23 stores, they're closing those up. still going to use the food there. 16% year over year the past quarter. you look at breakfast food, up over 30%, they're keeping that aspect of it. but they want it within the house of starbucks. >> i'm surprised you're out of this. >> i know i should be in it. i should be in it foolishly sold it on what i thought was going to be the top and there has not been a pullback. the calorie-counting trend continues with fitbit set to debut tomorrow. but can it compete with apple? our competitive edge is next. plus we count down to the fed decision, 2:00 p.m. eastern. news conference to follow. both live events here. [ male announcer ] at northrop grumman,
12:46 pm
we've always been at the forefront of advanced electronics. providing technology to get more detail... ♪ detect hidden threats... ♪ see the whole picture... ♪ process critical information, and put it in the hands of our defenders. reaching constantly evolving threats before they reach us. that's the value of performance. northrop grumman.
12:47 pm
12:48 pm
fitbit is expected to finalize pricing tonight. ahead of the debut, the ipo tomorrow, kayla tausche joins frus the new york stock exchange. with the details. a lot of anticipation yet again about another supposedly hot ipo, kayla. >> and from the outside the fitbit ipo does carry some of those markings of a successful road show. raising the price range of shares to 17 to $19 apiece, from 14 to $16 apiece and also increasing the amount of shares being sold by insiders. now adviser was only do that if
12:49 pm
the demand they saw from the street was exceptionally strong or perhaps if they kept expectations low in the beginning. and to be sure, growth is nothing short of impressive. the company has grown from $5 million in revenues in 2010 to $745 million last year. it posted a 200% rise in revenue in the most recent quarter compared to the prior year. it has distributors like macy's dick's sporting goods, amazon, best buy, target. that's a very strong channel for the company. it's valuation on a mid-point range about $3.7 billion. that would be about 28 times trailing earnings for the company and it's almost exactly the same valuation as garmin. which is the closest public comp for this company. they are still a lot of questions about how much the company will be able to flourish in the public markets, while it is the most profitable in the recent year, it needs to show it can pose repeat profits especially as a lot of of the
12:50 pm
tech companies are citing rising costs, you're issuing more stock to employees and seeing employees sell more stock and possibly diluting other shareholders and also seeing legal costs rise, they have a couple of outstanding lawsuits from jawbone. the million dollar question raises by everyone from zillow ceo on squa"squawk alley" wheth the business model is sustainable as a standalone or whether it's a takeout play for apple, for under armour which invested in tech or nike though the company did exit the wearables market last year. that's going to play out over the coming months and years. what matter how the stock prices today and the trade given the darth of ipos in the market. >> we'll get headlines from kayla later on as well. doc, you got a jawbone? >> i used to have a jawbone. i don't use it anymore.
12:51 pm
i didn't like it. -- it was too heavy, i like skinny little things. >> you help underscore a moint that i was going to ask about. >> yep. >> what do you got. >> it's a fitbit. keeps track of everything. i know exactly what i've done at the end of the day. >> what are you, 6'4". >> whatever. >> 200-whatever. there's a mirror and blood test. >> i agree with joe. >> you stand in front of a mirror you know. >> the ipo. >> i look at this right now, i think it will probably actually attract folks. i don't want to get trapped in it because it feels too close to what i'm seeing happen to garmin, steadily selling off. i don't know whether or not this has legs. is there enough to it now for fitbit? they've got to start putting out more content of what they can do, gps, maybe it turns into a watch, a lot of different things have to happen. >> this strikes me like gopro. >> i was going to say gopro.
12:52 pm
>> we're thinking alike. >> except gopro, you are missing the story. it's about the content. >> pete, i don't neen -- >> that's what some say about gopro to jim's point. >> if you go back to the ipo. >> it can't be about one product. can fitbit be a standalone product? >> if you want to be a great business, this is a hot ipo, it has all indications of than it's a nice ipo. in terms of a great business that you want to hold for long term, there's no defensible mote to competition. this was the problem with gopro. i said tonight the show, there's a point where somebody velcros an iphone to their helmet when skydiving and have the same effect. >> i disagree. >> let's not turn it into a gopro. >> he brought it up. >> it's a singular product. >> four on one. >> it's a singular point.
12:53 pm
>> that's the point i'm making. it's a one-trick pointny. >> apple watch keeps a lot of the same stuff. >> also, judge if you're not in on the ipo, i agree with pete i wouldn't chase it, and with jim. but fourth quarter is when they light things up. if you wanted to wait, for after the ipo sizzle kind of fizzles out a bit, i think you get a chance in september, october for the fourth quarter pop. that's when you get in, if you're not already allocated. >> a firm named dougherty initiate fitbit with buy ahead of the ipo, $28 price target based on multiple consistent with high growth peers and consumer electronics. >> and potential somebody takes them out. >> right. all right. coming up, three hours left in the trading day. one hour until the news conference. i accept that i'm not 21.
12:54 pm
i accept i'm not the sprinter i was back in college. i even accept that i live with a higher risk of stroke due to afib, a type of irregular heartbeat, not caused by a heart valve problem. but i won't accept giving it less than my best. so if i can go for something better than warfarin, ...i will. eliquis. eliquis... reduced the risk of stroke better than warfarin, plus it had less major bleeding than warfarin... eliquis had both. that really mattered to me. don't stop taking eliquis unless your doctor tells you to, as stopping increases your risk of having a stroke. eliquis can cause serious and in rare cases fatal bleeding. don't take eliquis if you have an artificial heart valve or abnormal bleeding. while taking eliquis, you may bruise more easily and it may take longer than usual for any bleeding to stop. seek immediate medical care for sudden signs of bleeding, like unusual bruising. eliquis may increase your bleeding risk if you take certain medicines. tell your doctor about all planned medical
12:55 pm
or dental procedures. i accept that i'm not as fast, but i'm still going for my personal best... and for eliquis. reduced risk of stroke... plus less major bleeding. ask your doctor... if eliquis is right for you. when you're not confident you have complete visibility into your business, it can quickly become the only thing you think about.
12:56 pm
that's where at&t can help. with innovative solutions that connect machines and people... to keep your internet of things in-sync, in real-time. leaving you free to focus on what matters most. if you have a business idea, we have a personalized legal solution that's right for you. with easy step-by-step guidance, we're here to help you turn your dream into a reality. start your business today with legalzoom. we're here to help you turn your dream into a reality. ♪ ♪ at chase, we celebrate small businesses every day through programs like mission main street grants. last years' grant recipients are achieving amazing things. carving a name for myself and creating local jobs. creating more programs for these little bookworms. bringing a taste of louisiana to the world. at chase, we're proud to support our grant recipients, and small businesses like yours. so you can take the next big step.
12:57 pm
we're back. we've been watching the market, stocks and bonds today. stocks had been moving lower. bond yields moving higher, just over an hour now until we get that fed decision on interest rates. plus, we do have the news conference with fed chair janet yellen which everybody's keying on today. steve liesman will be in the room. you can bet he'll probably be asking a question as well. but, guys, this really -- not to overstate it -- is a critical meeting because it's going to likely set the path for when the fed's going to raise interest rates. what are you thinking about in an hour's time as you hear this statement? >> i'm going to be thinking they're going to raise rates, it's going to come in the fall and no matter what they say, whether it's incredibly dovish or slants to the other side, that's the view, that's the strategy i'm implementing.
12:58 pm
they might come out more dovish, i'm not going to believe them. i don't think they have the credibility. >> i'm convinced they will raise rates in september, so the question is what does the dot plot, what does the expectation of future economic conditions, reflect as far as a change in mind-set? what i expect it to reflect is a much slower lift-off after this first rate hike in september. i think the market will respond very pottisitively to that with stocks up. >> i agree with the guys. i hate to throw that in there. >> everybody's trying to read. the market tends to be volatile after, it takes a while for the read through to happen and investors to figure out exactly what they're saying in the statement. >> yeah. >> and then any comments that she subsequently makes in the news conference. >> we're seeing more volatility, judge, before today. i mean on days where you wouldn't see volatility in markets, we're seeing volatility.
12:59 pm
normally going up significantly to the upside you don't see volatility start to spike. we're holding underneath the 200-day moving average and it's a threat. says something about sentiment. >> interesting if anybody asks about christine le guard's question regarding the imf saying, please don't move on rates. >> i'm sure somebody will. >> i think they should. they should ask the question about some of the leaks that have been coming out of the fed. but that one i don't believe will be addressed. i agree with the gentlemen. i think we're going to move in the fall. it's just a question, have we priced that in at one and done. >> you have seen what rates have done. people are keying on that story. 2:37. rates are at the high of the day, at least for the ten-year note. the dollar, let's not for get about that, too, right. comments likely to drive activity in currency markets. >> absolutely, 100%. you have on the other side greece and you have to pay attention with bond yields over there. >> financials really the sector, you think, that's most in play
1:00 pm
today? >> absolutely. i do. i think financials and obviously the etfs, tlt, tbt. >> i like retail as well, very much so. >> we'll see how it goes down. you have stocks at the low of the day, yields moving higher, and that fed decision one hour away. "power" starts now. indeed it does. thanks very much. welcome to "power lunch." with mandy drury, i'm tyler mathisen two very big hours of "power" coming up. the fed's latest decision on rates set to cross followed by janet yellen's us news confere >> breaking news naught toe industry. >> this is one of those headlines that will make people say, wait, did i hear that correctly? according to jd power and its new report on initial auto quality, japanese auto brands slumped to their lowest level in 29 years below the industry average when it comes to quality. according to j.d. power, 3% fewer problems

37 Views

info Stream Only

Uploaded by TV Archive on