tv Fast Money Halftime Report CNBC October 19, 2015 12:00pm-1:01pm EDT
thing though. that must just be a handle. otherwise the wipeouts would be classic. >> bring it on set. ride around the trading floor. >> i'll do almost anything on tv. >> that does it for us here. dow's down about 12 points. let's get over to headquarters, sco scott wapner and the half. >> all right, welcome to the halftime show. pete here along with josh brown, joe terra nova and mr. steven weis. the markets reacting ton those softening china gdp numbers. some numbers from morgan stanley that were a miss. let's talk about that right now. josh brown, so what's your take? we got the softening china gdp numbers. market doesn't seem to be reacting to quite heavily. morgan stanley was a miss though. you also have some pretty good analyst notes out today that are moving some stocks around. >> i'll give you the sunny side of things.
market doesn't believe chinese gdp data one way or the other. actually if you take a look at the source of so much investor consternation, it's up 19% off its lows. let's take a look at u.s. morgan stanley down 5.5%. investors are not taking that negative quarter and extrapolating it any further into the rest. that's a good sign. one other positive sign, the nasdaq has record highs. stocks like google, facebook, amazon, within a couple percent of making record highs. these are leadership names. people are watching them starting to break above the 50 day. all positive developments today despite anything on the china front. which it's better to not talk about. because it's really not so great. >> how do you assess it? >> october is going to lend itself to being appreciative
overall. what i like today is names like amazon come back again once again. the bio tech names. they're coming back once again. you're seeing a little bit of pullback in energy. i think that's okay. i think that's healthy. u.s. dollar is strong. i think ultimately where this ends after october will be a challenge to unchange for the s&p 500. >> it's tough to disagree. >> that's why we all think this market is -- this rally, this three-week winning streak, whatever i said, is going to keep going. because you think we're going to -- you still think we're overvalued. you think we could retest. josh's sentiment has clearly changed to more positive from where he was. >> first, chinese numbers, i don't believe any of them either. but there's a benchmark. while they were bad, they weren't as bad as what expectations were. so that has been pretty well --
people know it, so there's no surprise there. where my concern lies is that we're going to get into the heart of earnings season now. and once we get there, we've got to see what companies are going to say about going forward. emerging markets have not been a great story. china's market rising, that's not indicative of their economy, how their economy bleeds into europe and other economies. now, the underlying european economy is actually five emerging markets. so the base case for me was that 40% of earnings in the s&p 500 come from emerging markets and outside the u.s. so i still think we're in trading range. unlikely we'll break out big to the upside. >> a reminder how tough the environment from a trading standpoint at least has been for the banks. there's some other issues there. a stock that people have loved for a while now. >> morgan stanley had a nice move to the upside into this. they're giving all of it right
back. when you look at the trading volumes, yes, that was a problem. i think people expected, i being one of them, would expect they do much better in that particular field. take a look at the airlines. take a look at the broader picture. the financials themselves continue to trade well. look at delta, over 50, at ten-month highs. you can look at different parts of the market. october 1st, we were 25. the next day, we break underneath the moving average. now we've broken under the 2 hushths-dthe 200 day moving average. they have to understand, with volatility, when we're trading in the 20s, that means a 1.5% move every single day. and if not, that volatility's going to come out. that's exactly what's happening. we're seeing less movement in the market. volatility is coming out very, very rapidly. that's the opportunity once again. there was an opportunity to buy stocks, sell that high premium. now it's an opportunity to buy
protection. >> i still wonder, guys what apple's lack of participation in this recent move says about where that stock is. a positive note today. he calls it the top pij. >> i'm sure he told you how great apple is. >> she's talking about this cycle of the refresh. that's going to be big. think that's not priced into the stock yet. i think that will be one of the elements. >> why hasn't the stock participated? >> that's a great point. it's gigantic. it's so big. it's nothing new. the phone is out. the watch, you know, it's sort of like a bust. so what are people going to buy into? they know the story too well. money's coming to the market -- >> is it because a lot of money had come out of apple, you know, as people ringing the register on where the market was and it's just found a home elsewhere? >> right, value investors have an opportunity with apple.
i still think longer term it's a great story. you've got other exciting names. you've got amazon. alphabet. google, face book. if money is going to come into the market in that space, they're going to look for momentum and momentum is not with apple. >> we have the debate about value versus growth. our next guest. tom lee, the head of research. good to see you. are we at an inflection point with between value and growth? where value is back in favor to stay? or is this just a momentary thing we're going to look back and say growth is still the place to be? >> you haven't really seen value do well since mid12 to mid13. a few things have happened that really build the case that we're in like a 6 to 12 month period where value will beat growth. things like the yield curve steepened. it's a really reliable six-month lead time. the dollar reversing, right, because, remember, the dollar
peaked early this year. that leads value versus growth by six months. in health care historically, it's pretty much a poster child for growth. as health care starts to lose its leadership, five of five times since 1990, value -- >> are you reassessing the target for where you're going to be the end of the year? maybe you already have. 23, 25? >> it's a big number. >> you still believe? >> yes, i do. i'm not betting my limbs on this number. >> because other straight jichts have -- >> how about 100 bucks? >> how about $100? you want to bet 100? i don't want someone to think i'm a gambling addict. i'll bet 100 off camera. the reason i think so is i think the dollar effect on earnings is a bit of a mir raj. as the dollar was strong it wiped out 10 bucks out of earnings this year. already a third of that is coming back next year. but, remember, petro currencies are going to start to stabilize.
qe was the reason why euro, japan and the pound weakens. i think you can make a case the dollar could be weakening. that would reverse a lot of that. >> you're legitimately looking for nearly 300 more s&p points? >> yes, i think you have to remember, the market has a massive synthetic short position. hedge funds have negative data. we've been talking to a ton. the last 50 days have been brutal. they've derisked. their beta. the last time you saw hedge fund, at this beta and mutual fund was october '11. look at the return, 13% to 20%. >> the only sectors relative to the s&p actually doing well during this growth better than value period, you have consumer discretionary, consumer stables for some reason. >> it's a growth sector. >> outside of that, if you're going to say, this is a regime change, we go into value, you
have to kind of be bullish on global cyclicals, on energy, on all the stuff that, quite frankly is not seeing any bump to the upside in earnings. how do you bridge that gap and make that leap of faith? >> one, there's a really well-known and strong correlation. we've written about it. weakening dollar, always good for industrials. i think it leads by six months. you're seeing with ge. you can find value in health care. >> you've got an activist in ge too. and one that may not be the most active of positions within ge. but that has sort of reignited the stock more so than maybe changing fundamentals, wouldn't you agree? >> but that is a flow of capital too. that's really what gets people to rethink value stocks. >> does the weak dollar though do anything for the real problem with industrials which is slack demand all over the world? >> you know, it's not going to come -- you know, the one big change, and i think i hear this every time, and i don't have a great answer, but china was a big end market for many years.
just like japan was, into '89. you have to remember, japan literally hit a wall. like 0% in two years. u.s. growth really picked up the slack. i just think that's the transition. >> if u.s. growth does pick up the slack, which means the dollar -- i think the dollar eventually is going to strengthen again. we're the only major central bank that's tightening. so right now you've got a pause because the tightening probably won't happen in october and december's a question. once it happens, okay, shouldn't the dollar reverse? this is kind of tenuous to hang your investment case on a weakening dollar. >> i'm going to tell you, i'm not a currency strategist. you can say -- if i make a forecast for a dollar, you know, not high conviction. but the u.s. has pent-up demand. look, housing. we're building 1 million 1 starts. that's where we were 1990. that's literally 500,000 below
just organic growth so massive pent-up demand. nonrisk construction still the low nest like 50 years. remember, cap ex, stinks. the u.s. has literally got $1 trillion a year of pent-up demand. >> if you were in your 30s in 1990, you were buying your first house or you just did, if you're 30 years old now, seriously think about starting a family, the house is like number eight on the list of your top ten priorities, and you're much more comfortable continuing to rent. why should we expect the housing market of the late 20-teens to look anything like the housing market -- >> before you answer sort of what is a more macro question, you pick lenair within the stocks you like. why? because maybe that will help answer josh's question. >> it's a paradoxical thing. you have to watch the home builders. if we're midcycle, the home builders will literally move with housing starts.
and that's what they've been doing this year. i mean, housing, home builders telling us we're only midcycle in housing. i disagree, the market's telling us something differently. but in terms of house, it's a really great question. in 1990, you were coming off a decade of double digit unemployment inflation. nobody thought about long-term spending. because we were in a -- falling inflation period. but once that stabilized, you got big cap-ex boom. you know what, you're right, the mentality is just not there. social media, smart phones. but eventually, as those needs and hierarchy needs are met -- >> toll brothers is building in the city. they're not interested in single family housing like they were, you know, that's -- >> just remember, for a young person, especially living in new york, you know living in a city is more, expensive than living in suburbs. >> thanks for coming out here.
>> you got anymore? >> one of the smartest guys. we could talk to him all day. >> we could but we only have so many minutes. >> i'm all set. >> tom, thanks for coming out. coming up, it may be an all-time high. one stock says one name in particular is only going higher. not only will it double, it will be the next big global jugger nut. he'll going to join us head. oprah known for making her audience very happy on her show. >> you get a car! you get a car! everybody gets a car! everybody gets a car! >> okay, so whose day is she making now? we're going to tell you next. in panama, which is a city of roughly 2 million people, we are having 5,000 new cars being sold every month. this is a very big problem for us with respect to fast and efficient transportation.
it's kind of a losing proposition to keep going this way. we are trying to tackle the problem with several different modes. one of them is the brand new metro. we had a modest forecast: 110,000 passengers per day in the first line. we are already over 200,000. our collaboration with citi has been very important from the very beginning. citi was our biggest supporter and our only private bank. we are not only being efficient in the way we are moving people now, we are also more amicable to the environment. people have more time for the family and it's been one of the most rewarding experiences to hear people saying: "the metro has really changed my life."
it's time for our trader blitz. deutsche banc announcing a restructuring. top execs also getting removed in that process. >> well, they're finally looking at the capital requirements that have been placed on them by regulators. u.s. banks have done this in years prior. expect credit swiss to follow.
u.s. banks are still the favored banks. >> you spoke about mattel last week. this is down 7%. >> mattel popped a little bit on that. look, basically, these companies, they did well because of the movie tie-ins. you can buy toys so many places. and there's so many other options for kids. such as video games. so i think it's appropriate the stock's down. >> josh mcdonalds, credit suiss loves this stock. feels like sentiment has changed around this name. i don't know if it's all day breakfast. maybe a better feeling about where they're going to take this company. you tell me. what was fairly negative consistently for months, has it changed? >> i'm going to keep it real with you, scott. >> you usually do. >> sentiment has shifted because stock price has shifted. this is like sell side 101. everyone that's now covered by
credit suisse. it broke through on a gap up and has not stopped even to take a breath ever since. you got to have a buy on it now. now everyone wants to have a buy. here's what's really going on. all day breakfast is a hit. momentum has shifted. people are coming to the stores. whether or not that will last more than a quarter, we don't know. >> what about the real estate idea? that's what got you something last week too. >> first of all, even when it happens, it's not great. they've been talking about that at mcdonald's for more than ten years. >> momentum's changed clearly. i'm still there. i still think it will move upside. it is the all day breakfast driving it. if real estate happen, it could be a been nus and pop to the stock. >> you might get a retest of that. i would say don't chase it.
if it retests 100 and holds this is a strong stock that's going higher. >> are you kidding me, nearly 100% gain. >> yeah, nearly a 100% gain. this is a company that has nothing. when you look at earnings, when the stock started to plummet, that's been the problem. now she's going to not only be a member, she's going to be a board member. and obviously this ownership position. i'm not so sure you want to chase this thing right now. certainly she has the kind of cloud, the kind of power that actually not only is going to move it because of her 10% stake, but because she's involved the way she is, i would not want to be shorting the stock. >> proven obviously to have a tremendous effect on book sales. she comes out and says, i like a book. the next thing, the book sells off the charts. >> the whole celebrity thing to weight watchers -- >> can it make that much of a difference -- >> when it's oprah, the answer's yes. >> there's no one else on the
planet like her. when she does it, it's real. >> i'm not buying stock just because she's there. >> this is short -- >> this is as big as any -- >> this is as big as any activist getting involved in this stock. because she has that kind of power. >> all right. coming up, after falling nearly 5% last week, the pain for crude continues today. one trader says we're nowhere near the bottom. and some unusual activity in a stock set to report this week. sp jumps in. breaking it down next. (patrick 1) what's it like to be the boss of you? (patrick 2) pretty great. (patrick 1) how about a 10% raise? (patrick 2) how about 20? (patrick 1) how about done? (patrick 2) that's the kind of control i like... ...and that's what they give me at national car rental. i can choose any car in the aisle i want-
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nym nymex. what are you looking at? >> you hit the two main points of what's driving oil lower this morning. it's china, iranian sanctions being lifted. you also have refinery turnarounds in the u.s. crude oil isn't being refined right now into product. it's building supply. so with all that weighing on the market, i think we see a 30 handle again before we see a 50 handle by the end of the year. >> it seems as though this is a supply story. we are starting to hear from suppliers. from the drillers. that maybe it's time to start throwing in the towel and cut back. >> yeah, you are hearing that a little bit. to me, that's a surprise call right there, $30 a barrel. i don't think that happens. when you look at the range in oil now. you're looking basically 44 1/2 to 50 has been the rank. when you look at the oil volatility index, it's making lower highs. in other words, things are calming down. the fear is coming out of the market. i think you continue to play
that range. 44 1/2 up to 50. i think we'll see that range for quite some time. equilibrium has now been met. i think we'll see that range. if you get long, just keep a tight stop and play. if we break 44 1/2, you can play to the downside. until then, that range is going to continue for the next couple of months. >> for more, of course, head over to futures now.cnbc.com and of course we'll be back with a live show tomorrow. back to you. >> bertha, thanks so much. now it's time for a little unusual activity. pete at the telestrator with what he's seen today. >> one of the big names. we don't oftentimes go to that. really, the performance, not all that much, but you can see that movement and volatility. huge buyers of next week, next week's expiring october 30th, they're looking at the 49 and the 50 calls.
the interesting thing is a lot of the time you're look at a spread. that's not what happened here. they bought 20,000 of the 49 calls. we call this a call stupid. you're buying and buying. you're not buying and spreading it off. somebody's awfully bullish about these earnings. that's going to be on the 22nd. >> you in it? >> i am. i immediately pounced on it. i wanted the excuse to get back in. >> you like the fundamentals as well as what the option activity is telling you? a quick trade but not a real belief in the company? >> i have a belief in the company. i was one of the guys out there the in front saying he is the guy. i believe he's the guy. i love the direction. they actually have some growth. we understand, it's going to take a little time before that cloud's going to be as big as we want it to be in terms of microsoft. but they're moving in the right direction. they hired the right ceo. i think everything's moving. 15 forward pe. these guys give the money back. they're shareholder friendly.
i think the stock sees 50 not far from now. >> coming up, our call of the day. the stock one analyst says will be the next mega cap juggernaut. you may want to listen ton his advice as well. by the name, it's up 172%. and a ferrari is definitely a hot car but is it a hot investment as well? our experts tell you if you should hold out or jump in. here at td ameritrade, they work hard. wow, that was random. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies
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hello, everyone. here your cnbc news update. texas is cutting off medicaid funding to planned parenthood clinics across the state. they received the news in a letter today. the move is in response to undercover videos released by an anti-abortion group. cnn says federal authorities are investigating whether cia director john brennan's personal e-mail was hacked. the attack reportedly targeted brennan's aol account.
it's unclear if any classified information was accessed. amazon continuing its crackdown on fake reviews. the company filing suit against more than 1,000 individuals for selling reviews for as little as $5. the online retailer filed a similar suit against websites back in april. well, the movie may be far, far away, but tickets for star wars, the force awakens, goes on sale in just a few hours. once the final trailer airs, fans can go online and buy their seats. the film hits theaters december 18th. that's the cnbc news update. back to you, scotty. can't wait. >> the yield on the 10-year note right at 2% today. dipped below that level last week as worries over global growth remain front and center. our guest is a fixed income institutional portfolio manager at franklin temple tol overseeing $770 billion. thank you for being here.
where do you think yields are headed? we've got under 2. going much lower? >> in the way the 10-year normally runs is off off macro economic factors. clearly, there's a lot of concern still about the divergent global expansion and the lack of inflation particularly in the united states. >> that tells me you think they're going lower. >> not necessarily. i think there's still a lot of demand out there from this divergent policy and growth that's led to a lot of lower long-term rates around the globe giving demand to u.s. treasuries. part of it is a risk offtrade we've been seeing true the summer months. >> when do you think the fed moves finally? >> we think they have a window of opportunity to make the move. clearly, a lot of commentary out of the september meeting. the fed themselves still expect a move this year. we would be in the camp of hoping that happens. >> why so? >> zero interest rates are not reflective of current policy or current economic growth. anit's emergency situation. and we tonigdon't think we're t
anymore. >> what about the risks front and center all around the world? frankly, we don't know quite how bad they really are. >> you saw that out of the commentary. the fed citing global factors now as something they're watching. we still think the u.s. economy's stroke enough on its own to withstand a rate move. and that the strength of the labor market is a good support for the initial move. plus, they're going to be very dovish we think. >> you think fear is in high yield. which is the principal reason you're here today. to talk about high yield. you think it's overblown. let's listen to what carl icahn said to me the last time he was on. >> the high yields for many reasons are very vulnerable. too many companies borrowed against. some will not be able to pay back. they have very poor covenants. there really is -- this is the real fair part, there's no liquid for them and people think
there is. >> true, no? >> we've seen a lot of price volatility, particularly around oil volatility. we would expect continued volatility, particularly on the price side. we think the market is aggressively pricing in the downside. that's created some longer-term risk/reward potential opportunities. >> would you look at that in the energy space or looking at other high-yield sectors that have been pulled down because of the energy resources? >> as energy's done, the broader high yield market has done. you've seen that contagion spread through. we still like energy. we think there are companies within the energy space, particularly those that have a more diversified balance sheet that can weather the price volatility. we could see a marginal trend of companies needing to restructure. but dough thnt think what is being pricinged in is reflective of the broader fundamentals. >> you think some energy high yields attractive? >> we think there are some particular names within that space that can weather the volatility. >> you talk names or not talk
names? >> no, not names. >> what's the historic yield been on the high yield sectors over the last 15, 20 years, versus what it is now? that's why a lot are seeing that, you know, it's not cheap. >> absolutely. we've seen a lot of volatility in this year. blew out to around six. if you take the sub sectors of energy or mining, there are over 1,000. we've come in a little bit. we came to a period where we had a lot of repair in the high yield spread through tight, yieldings were low. that's part of the reason we think we've had great buying. the energy sectors have created broader sector volatility. >> if you x energy out, what's the spread over treasures? >> still in the 500 to 600. >> still historically expenseive? >> we still think if you look at the -- so yes, outside of energy and the metals and mining sectors, it's pretty name
specific. we think the broader fundamentals of an improving moderate growth environment supports corporate assets and can be a good buying opportunity for the next part of the cycle. >> it's interesting you say the fed still has a window. you'd like to see them move. but yet doesn't a fed move trigger potentially a run for the exits in high yield? >> we don't think that's the case. we do still think it's the path, not necessarily the initial move, and that they will remain in a very accommodative policy stance. on the back of an improving growth environment in the united states, which we think benefits corporate america. >> it's good to have you here. thanks for coming in. thanks of course to christine. coming up, this week, packed with earnings, ibm set to report after the close tonight. we've got an alert on the stock. which way are the traders leaning? you're watching cnbc, first in business worldwide.
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morgan stanley wrapping up the financial earnings. now to the biggest sector. tech. what investors need to know. plus, the big business of flu. the pharma stocks that may get a boost. should companies be made to disclose the health of their top execs to investors? we'll debate that. it's an interesting topic. very timely. back over to you. >> thanks, we'll see you in just a bit. nike shares up more than 38% this year. it's the best performing dow stock. one analyst thinks it could double in the near future. that's why it's our call of the day. the analyst over at ever core. it's good to see you. you know how to write a
headline. the next mega cap jugger nut. you say nike is the best story you've ever seen. why? >> well, listen, obviously, it's a great brand. it's been around for a long time. has had tremendous success. we really see a change in nike in how they run their business, how the consumer views the category and how that feeds through the eighal ga rhythm. they discovered massive amounts of pricing power in the last couple of years. especially after decades of deflation driven by low-cost manufacturing in china. that's fantastic for their p & l and shareholder also as well. >> a growth of 7 bucks in earnings and double in the stock prices. what period? >> we think, i mean, if you run through from top to bottom line, accelerator profiler, even some unintended levels, we think the company can get to 7 in the next two or three years. so the stock looks a little
expensive on near-term earnings. looks cheap if you look out a few years. >> i got a quick question. you talk about innovation in your piece. can you speak to that? why that's so important as to why this is potentially a $200 stock? >> yes, for so many different reasons. number one, the way nike changed the way it approaches consumers. segmenting the different sports categories. and then sub segmenting those categories. nike is now able to develop sport specific innovations and technologies that really speak to the consumer. and that's part of the reason they're able to charge higher prices. for essentially better products that have more innovation, more quality, more technical attributes. again, flows through the p & l in such a dynamic way. >> close your eyes and one can hear you making the case for apple. you're talking about them in the same sort of perspective. >> essentially, yeah. i think nike for years -- it's obviously a high profile
consumer discretionary stock. leading apparel and footwear maker for sure. the market perception of this stock and this company is transitioning from that old category of cohorts to the apples and googles and facebooks and april zomazons of the world. i don't see why this can't be a 200 or 300 some day. when you think about the fact that margins really could almost double from here in a very reasonable way, in addition to the sales profile, it's unbelievable. >> omar, scott mentioned apple. if you think what apple did over the last couple of years to its competition and its pieers in te sector, what does this tell you about what could happen potentially to underarmer? does underarmor have the appreciation you expect for nike? or basically obliterate the performance we've seen there? >> we follow underarmor. we love underarmor as a stock as
well. i think they're much more complementary than sub lamentry. underarmor, i mean, nike's growth last year was an entire underarmor. what nike's doing is growing the market category and the size substantially. in almost some ways they don't fall on each other's radar screen. when i look at underarm, the number one valuation dynamic that i consider looking at underarmor stock essentially nike's market stock. underarmor's clearly emerging, at least in the u.s., in north america, which is the number two -- the number one sposhts market in the world. underarmor's emerging as the clear number two player. if nicotike continues to do wel that's beneficial to underarmor which is continuing to merge as the number two brand. >> i'm beyond eawondering about timing of note and how it relates to the most recent commentary we got from the company about its sales and business over in china and whether it's not by accident
given what they said at a time of great concern over what's happening in the chinese economy that now you've put this note out. >> i follow the luxury good stocks as well which have had a lot more difficulty in china. i think nike and the athletic sector in general went through its difficult moment in china following the beijing olympics where there was a ton of growth. inventory's built up too big. nike's reset their position in that market place and rebuilding it in a much more sophisticated way. that's why you're seeing this reacceleration in the chinese business. it's not about the luxury consumer, it's about the mass market consumer as well. >> that's part of my point as well. maybe we shouldn't be surprised. if you hear from blackstone, all the malls they own there, they talk very positively about mall traffic. for that very reason for why you may like nike more. >> absolutely. i think they've gone through the pain in china and positioning in the marketplace is more sustainable with the rising middle class.
every part of nike's business is accelerating, driven by higher asps, the global acceptance of health and fitness and rising margins. it's not just the china story. nike's business growth market the last few years continues to be north america which you or i could have looked at and say, hey, this business has more than doubled since then. >> i'm wondering if we're making this apple comparison, is it a little bit of a cautionary tale. apple has 100% of the profit of the smart phone market. they own almost vertical they compete in. yet it's a ten multiple. even if nike becomes as dominant as apple, at a certain point, doesn't it get stuck in this situation? >> so, i mean, what's apple's cap? 500, 600? when they get to 900 -- >> so not too big yet? >> it's a long ways off. >> the law of large numbers that can get a lot, lot, lot larger if you're right.
thanks a lot. appreciate you coming on. a lot of people talking about it today certainly. omar over at overcore. >> i like the stock. i don't really do price targets. it's going up. people want to own it. it's under accumulation. they continue to surprise to the upside. and there really isn't any competitor of the same side and size and scale. i don't know about 200. >> it's an iconic brand. there are very few of them out there. that happens to be one of them. i own lulu. it's a depressed stock. it's now gotten new management. i don't know. pete and i were talking about it. because now they're cutting into it. >> i didn't know they made lulu kids. >> that's just not right. >> no, but they're -- >> it's great. >> it is interesting when you look at the market cap and you see nike at 100 billion, as he said. some of the stocks that should be in its universe. whether it's apple, 600-plus
billion. google's about three, four times. >> category of brand. >> we talk about brands all the time. i would put nike as that category. when you look at what they're doing with underarmor. yes, there's competition, but they absolutely dominant the space. if they can have that expansion, then it makes some sense, why he's putting that type of move on the stock. and actually fit noolgs a lower multiple than people think. >> the economic evidence is overwhelmingly strong. look at the future orders in china. last quarter, reported 30%. look at the e-commerce, the ability and narrative to grow it from 1 billion to 7 billion. and the revenue target. all those things put together, strong margins, acceleration. >> ferrari revving up for its public debut. is it too early to buy the stock? plus, with more than 100 s&p companies set to report this week, we dive into the names that should be on your radar. a lot of big ones, as you see on
that calendar. we'll get to as many as we can next. at mfs investment management, we believe active management can protect capital long term. active management can tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive. it's active. that's the power of active management. good. very good. you see something moving off the shelves and your first thought is to investigate the company. you are type e*. shorten the distance between intuition and action.
we're back. iconic carmaker ferrari getting set for its ipo. phil lebeau is in chicago with the details. >> hey, scott. earlier today we heard from ferrari when they released or fiat chrysler released the latest s-1 before we have pricing tomorrow. 17.2 million shares coming in between $48 and $52. that's the expectation.
a lot of people are saying what's in this for fiat chrysler and what's sergio's grand play? they're going to raise $5 billion of this for fiat chrysler from this ipo. that's partially going to help pay for the $55 billion expansion that fiat chrysler is undergoing over the next four years. the target by 2018-2019, $7 million in annual vehicle sales worldwide. jeep is a big part of that. look how much jeep has grown under sergio's leadership. when they took over back in 2009, primarily a north american brand, just 276,000 were sold, up to more than 1 million last year, and the target is to reach 1.9 million by 2018. part of the way they're going to do that is by adding plants and production overseas. some are being built in italy. the first one rolled off the line in china. remember, 75% of jeep sales for fiat chrysler are here in north
america. so the world is their oyster so to speak in terms of demand for a brand that should do very well overseas and that's why we need to take a look at shares of fiat and chrysler. there's a lot of speculation about how much it's going to benefit because of this ferrari ipo and you see the stock up once again today, but don't forget, at the end of the day, sergio wants this to be part of the grand play which is to grow fiat chrysler on a global scale. he needs to fund that expansion. it's self-funded by the way over the next four years. >> phil, going to be exciting just given the name alone and the timing and all that. phil, thank you so much. what do you think here? want a piece of it or no? >> i don't hate it, but i think it's very, very much contingent on how the market is doing because i think this is just a traditional wealth brand, luxury brand, and i think so if around -- >> you're talking about their business, not so much the ipo. >> yeah, both. the business is great business
because they have scarcity, but i think generally speaking how is this ipo going to be received? tell me how the market is doing, tell me where the vix is, tell me what the latest calamity out of asia is. >> kind of a precarious time to go public, right? >> yeah. >> i think it also gets lumped into overall the auto industry and you look at the auto industry and fundamentally it looks very strong but yet you look at the performance of a gm or a ford and the performance is not there. well, enter a new dynamic which is a far more complicated auto model to understand and for me that makes you want to have pause, look at the name, and completely avoid it for multiple quarters. >> that being fiat or ferrari? >> i would say both of them at this point. >> coming up, we'll go under the radar, steve weiss looking at a health care stock hitting the tape and we'll game plan a super sized week of earnings straight ahead.
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time for second half trades. there you go with a look at some of the big names reporting. ibm after the bell today. and then a whole reason through of major names. no one on the desk likes ibm, right? >> right. >> nobody? >> no. >> crickets? >> jim is not here. >> well, right, jim had it in his portfolio. i think he owns it personally. we'll hear from him in the days ahead on what the results are. i want to take people through some of these names that are coming out the rest of the week. there you go. steve weiss, you're up first. look at the board and pick one. >> hog will be coming out tomorrow. i think it's a great story and i think stock is going to do well. from what i'm reading sales are picking up. it's a unique brand again. i think it will do quite well. i'm looking for better action from some of the consumer companies domestically than some of the non-u.s. companies where
there's non-u.s. exposure. >> somebody give me some amazon. >> that's exactly what i wanted to talk about. is amazon 578ish trading today? pete mentioned before microsoft and the $50 level. last earnings time around i thought we got above $50. i think we get above it now. you will see a similar type of reaction post-earnings for amazon that could take that stock 625, 650. >> yahoo!? >> so i would say not from an investment standpoint but purely for entertainment purposes, that is the call of the week. what are they possibly going to say? every week is another high-profile executive leaving. i doubt there's much business momentum there. stock price certainly isn't telling you there is. in the meantime, they try to save money on taxes by not selling alibaba. stock has been cut in half since then. i can't imagine what the tone of the call is going to be or what the latest innovation or initiative is going to be that they think is going to get people positive. >> close of the week is going to be american. >> but i'd focus on two other
names as well. i'd look at eli lilly and look at biogen. pharma and big cap biotech. we've seen a little bit of a rally recently. can that continue? >> look at valeant today? >> good stuff. we'll see you tomorrow. "power" begins now. good afternoon, everybody. welcome to "power lunch." thanks for joining us. along with mandy drury, i'm tyler mathisen. financials out of the way. now to earnings from the biggest sector of all, technology. the fourth best performer this year. we'll tell you what investors need to know. united airlines giving no details on the health of its ceo after he suffered a heart attack, but will decide today on its governance process. should companies be made to disclose the thealth of their tp executives to investors? and do you own a drone? if you do, there will be new government rules affeg.