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tv   Fast Money Halftime Report  CNBC  October 26, 2015 12:00pm-1:01pm EDT

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investors are trying to find a fine point on what xerox could be valued at. >> let's get over to scott wapner. he's got the half back at hq. >> all right, guys, thanks, welcome to the halftime show. let's meet our starting lineup. joe terra nova is here, jim liventhal, josh brown. housing top. why billionaire sam zell is moving out of part of his portfolio and what it means to your money. we'll ask industry expert bill palti. the apple trade. with the stock suffering trou its worst day in a month, can it get back on track with earnings looming? we begin with a week for the markets. twitter, dow, dupont, merck, alibaba, so many more reporting along with apple. then there's the fed meeting. and all of it coming against the
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backdrop of the best month for stocks in four years. can this week keep it going or grind it to a halt? >> suddenly we see the market take off. absolutely incredible run. you're talking a move up 4% today, just to get it back up over 15. we start it off way back in september. they get back to october, in the mid-20s. now back at the 15 area. it's been sustained underneath that for a while now. i think we're seeing right now this great rotation. energy was initially, when you got into the middle of september. that was really the catalyst starting to push things to the upside. pharmaceuticals have basically stalled for a while now. but you got different leadership. because of that, i think this rotation has allowed the market to continue to elevate up to the
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upside. >> retail rollover too, which is really interesting. it sort of started last week, maybe a little before that. you have some downgrades today macy's, michael cores. something going on. that retail is not performing well. >> one is the amazon numbers which seem to indicate very few people are shopping in stores. most of them are doing it online. so if you're a brick and mortar retailer, you have to have a strong online presence. you should see some distinction when earnings come out next month for retailers. as for companies like nordstroms, jcpenney, that have a good online press an en. an ance. the concept that people aren't buying things so much as they are buying experiences. where that's travel, entertainment, dining out, it is clear from the sales figures they haven't been buying things. going into the all-important fourth holiday season.
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that needs to turn around right now for this to be a solid play. >> you own apple. let's segue there. the drum roll as we await the earnings is sort of beating right now. what's the deal with the stock? over the last month, apple's up 1%. i'm going to name a list of stocks that are up in the big tech space. intel's up 20. microsoft, 22. google, amazon, with huge gains. a lot of that came of those two stocks at least last week. facebook, up 11. apple's been kind of left behind. why? >> i think the simplest explanation is the right one. this is a ji gaptic stock. it's very well owned. everyone's already in it. there isn't a lot of catalyst right now. the cycle was phenomenal. i'm not sure anyone expected the 6-s cycle to meet or exceed that. it's paying a good dividend. a lot of buyback activity supporting it. the other thing i think worth
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pointing out, you talk about chip stocks up big. they got crushed earlier. that's why they were able to have great rallies for traders able to identify them. just not the case for apple. >> some in the chip space has given a boost to those names. it is having an impact on suppliers but apple itself. maybe that's the catalyst today, down some 3%. it is the worst day in at least a month for that stock. how many does apple get back on track? is too much big money coming out of apple and going into the other names that i mentioned? googles, microsofts, amazons and elsewhere? >> that would be the appearance. leapt's list let's listen to what they say. let's hear what the actual numbers are. most importantly, what is the guidance going forward. i think the suppliers are really the ones right now who are feeling the strain from what's going on with apple. they're the ones that most need a little bit of positive
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momentum to come in what apple is going to report. i'm less concerned on a 6 to 12 month horizon. >> maybe the miss is a bad omen. do we think that? they make chips for the iphone. >> i guess that's interpretation of what people are looking at. if you go back and start looking at some of the other chips that reported already. they have some huge numbers. it's really difficult to absolutely say categorically hey, this one supplier is the reason that apple's going down. it is today. but will that really be the effect when apple actually reports to joe's point. >> we talked about sectors and rotation and where money is coming out of retail. today, health care's having a pretty good day. it's one of feud sectors in the green led by some big names. one day phenomenon here. is the momentum still gone in
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this space? >> the reality with health care is earnings report were solid. you didn't have a lot of guide downs on revenue or earnings. it actually makes sense to see a sector like this catch up a little bit. it has underperformed since the market bottomed. it has been a sore spot for the market on a lot of those big green updays we've had. it's not completely wacky to see these stocks at least take the lead for a day or so. the bigger issue's that linger over them don't just go away quite so easily. the pricing issue is going to be a major issue between now and the next election. you're going to hear about it a lot. >> pete, merck, pfizer, big pharma on the big stage with earnings. >> i had been in lily. i flipped out of lily to disney. i have calls on a couple of these areas as well. we've talked about this for a long time. it's about pipelines. it's about what they are doing and how that pipeline looks.
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this is far more about the guidance than it is about the reports. >> perkin, midtronic, all health care equipment names. they've been very resilient in the wake of the bio tech decline. where are they taking the money from? bio techs are taking the money, staying in the health care space. >> speaking of health care, valiant, fighting back today against accusations made by short selling firm citron last week that slammed the storm. attempting today to reensure investors. >> they said its outside counsel is calling for the sec to investigate them. the board also came out early, reiterated its unanimous support for the ceo. of course that specialty pharmacy is works with. saying that in light of some of these allegations that have arisen, it will review that
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relationship. the trading today has been interesting. right after the call, it did briefly pop into the green. now it's down maybe 2.5%. analysts coming out and saying they did a good job clarifying these accounting questions. however, saying investors are saying they need to do awi with this relationship entirely. just get out of it. it's too complicated. analysts saying they did a great job on this narrow issue today, clarifying these concerns, but there's a lot more out there that people are still worried. >> so the sell side is largely sticking with the positive story, that many of them have had for many months. the big investor side and some that i've spoken with today are saying this is a long-term process. this could take 6 to 12 months before confidence is restored, if at all. to get the stock back to a
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valuation they think it should be trading at. and if confidence isn't restored, he might not be the ceo and maybe even the company gets sold. that's the kind of talk i'm hearing from investors i speak with about this particular stock. >> especially if the big investors are willing to wait that long. because right now the company really has a lot of overhangs. it's got multiple government investigations. now it's got this ad hoc investigation and whether or not it's going to keep that, you know, option to buy, whether it's going to acquire it. they said all options are on the table. so all these things are outstanding questions. that really can't be good for how the stock performs. >> i am not an expert in valiant but one thing that's true no matter what stock you're looking at, there's a reason why they don't let a surgeon who made a mistake in an operation go back in to fix it. because the tendency there is to cover up a prior mistake rather than have the patient's life be the central idea of what they're accomplishing.
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when you talk about a sell sign analyst with that buy record now defend the stock, bear in mind a lot of what they're doing is saying, nope, our original thesis was still intact, we weren't dead wrong on the growth. so you have to take that with not a grain but a spoonful of salt. >> that's exactly why i sort of bring up what the investor base is thinking about. more important than what the analysts say. >> i think those are great both points, josh what you're making with records to the sell side analysts is absolutely true and, you know, as far as the time this is going to take. i think there's one key element you've got to look for if you're an investor or potential investor and that's cash flow. the report drew a lot of parallels to enron which has a fraud that had 20-year contracts with no hope of ever being worth what they were valued at on the balance sheet. if you look at the cash flows, it would have told you a different story. cash flows have increased at valiant. i don't have a position long or
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short. i'm just reading the financial statements. cash flows have increased a long with sales. if there were channel stuff, which seems to be the main thesis of the report, you would expect accounts receivables to go up far in excess of sales. that has not happened. now, to be clear, both of those numbers, sales and accounts receivables, have tripled. that's a break-neck speed. you could certainly bury something in that sort of growth rate. if you were really looking for smoke, you would look at accounts receivable. >> makes the investor uncomfortable when many of them are learning more about the relationships that they had no idea either existed or the extent they existed. i'm hold your thought before you respond to that. amman with some breaking news. >> this new poll from university, a poll of likely iowa voters on the presidential primary. huge move here for ben carson in iowa moving into first place
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over trump. according to this latest poll, carson tops the list at 32%, trump at 18%, holding second place. the two were tied the last time around that manmouth university did this poll. ted krutz at 10%, rubio at 10% and jeb bush trailing at 8%. the other candidates mired down in the single digits. all this ahead of cnbc's republican presidential debate on wednesday. we'll have to see how trump and ben carson handled being at center stage in that debate. they are the two leaders of this pack going into a year when premier voters clearly prefer somebody who is not a professional politician. >> we'll see how the numbers continue in the lead up to our debate. so back to the issue that we were talking about. the fact it's going to take investors with real money on the line a longer period of time than i think maybe some people think to come to their own conclusion as to whether they can have their own confidence
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restored in their story which can keep the stock around where it is for quite some time. >> i think a lot of people are concerned that things weren't disclosed. specifically this option to buy the pharmacy. that one had an interesting slide. slide number 22 here. where it says it paid up front for this option for the next ten years to acquire them for zero dollars and they didn't ever disclose this $100 million spend for this option to buy it and folks are saying they should have been more transparent. so there's a lot of concerns about what people will need to get comfortable with to invest long term. coming up, real estate investor sam zell selling a big chunk of his holdings. should you be getting cautious on parent of the housing market as well? bill joins us next with his take. plus, pep boy strikes a deal. find out what the merger means. and the nfl on yahoo!.
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new home sales laying an egg last month. calling for more than 11%. now there's word billionaire investor sam zell is selli ing
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part of his portfolio. bill palti, welcome back, good to see you again. this zell news is interesting. is he calling a top in the apartment market? >> he's a pretty smart guy. i think he's capitalizing on what we see right now is a plateau in the housing market. i think you've seen a number of head winds for housing. number one, you have an economy that's generally soft. number two, you have a labor market in housing which is preventing homes from being made. what does that make happen in the housing market? housing affordable gets hurt. you see home prices very high. and po potentially rising interest rates. the easy money's been made there i think. in the long term, it's a very smart move to get out. >> rents are up 28% over the past five year. it gives you kind of an idea of how hot the multifamily market has been. maybe he sees some signs like perhaps he did when he correctly called the top of the market in '07, that it's time to ring the register so to speak.
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>> absolutely. everybody was saying in '07 or '06 in housing, well, it's just getting that much better. for instance, you cited the 20%. you know, when it is good enough to get off? i think this is a brilliant move. we'll see what will happen. housing stocks have done pretty well. i think you'll see a plateau for the short term. still fundamentally believe in the housing market. >> a rough go today, new home sales. >> i think a lot of these seasonal numbers are just noise frankly so i wouldn't really get caught up on this month or that month. the reality is until we have a robust economy, the housing market really isn't going to grow. in fact, over the last seven years what you've seen has more to do with inventory levels than intrinsic demand recovery. you see that and know better than the fact you're starting to see some of these housing numbers go down. it's hard to put 20% down on a house when the economy is soft. until we have a robust economy, we're frankly not going to see
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the type of recovery we'd all like to see in housing. >> question for you on this plateau you're talking about. just mentioned inventories which to me seemed to factor in heavily. existing home sales, those figures seem to be doing really quite well. i'm wondering if this is part of the plateau that so much inventory from existing home sale owners that it's putting the pressure on new home sales. if that's the case, doesn't it work its way through the system? maybe before the winter comes, you'll get new homes picking up? >> it will work its way through the system. again, housing prices are also very high right now. and that's frankly getting back to the inventory level. you have a labor shortage. for instance, one of the larger air conditioning systems in the united states. we have builders calling us every day seeing we need more. there's only so much you can get done. we had a housing economy that collapsed ten years ago and people are still trying to
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recover. >> you've liked the suppliers for some time. is that still where the best money is to be made? >> you know, you hate to say it, but it is. not those in new residential construction but home improvement, retail, remodel. leapt let's say we have softening of the economy. they're going to invest in their home. they're going to remodel their kitchen. put in new cabcabinets. building products are a very smart way to play this. housing, you have to be smart money i think to play housing right now. >> bill, we will see you soon. appreciate your insight on the industry. >> i would say it's really tough to discuss the housing market as though it's all one big market. it's very regional. it's very localized. it even differentiates when you're looking at different strata of income levels. so companies building mcmansions are not the same as companies building multifamily. the two names that look the best
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for a trade, d.r. horton and lenar with a slight edge to horton. both are up trends. both riding that 50-day moving average. i think you could move either one. >> i still stick with home improvement. i always have thought the derivatives -- >> like home depot -- >> right, and we look at those numbers every quarter, we look at home depot, then lowe's. people are doing exactly what bill is discussing. even if the housing market shows softness, it's been those derivative plays that continues to be the place to be. >> making a move as we speak. the banks have been dead money all year. our call of the day offers hope for one stock in particular. plus, drivers might be feeling like this when they fill up their tanks this week. gas prices down 62 cents a gallon since the spring. how much lower can they go? the futures to find out next.
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pretty good about what we're seeing at the pump ahead of the holidays. at the nymex with the futures crew. >> happy to report gas prices are down 10 cents in the last two weeks. gas futures near year to date lows. let me ask you this, seasonally, traders do expect to see these prices come down at this time of the year. do you think there's more downside ahead? >> jackie, i do, i think there's a little bit more downside. i'm looking to sort of retest some lows of a few weeks ago. when you look at the season al trade, october to december has been horrible if you're trying to be a buyer of gas prices. that's why consumers start feeling good heading into that christmastime, i think you'll see that again, especially if the dollar stays strong here, jackie. >> aaa saying we could so the national average at 2 bucks by the end of the year. do you buy that? >> that makes a lot of sense. if we look at the wholesale
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price, we see we're bouncing at 1.30. the low in january is 122. i think we'll retest that leave. even on the days where it closes lower, it closes well off its lows for the day. traders are looking for sponsyness down below. we'll retest 122.65 from january on our way down to 120 even. >> bottom line, good news. we'll see you on the show. we'll be back. >> thank you so much, we'll be there. is it time to jump back into energy? a portfolio manager says it is. plus, a loss for the bills but a touchdown for yahoo! following the first ever live streaming game. our resident football expert gives you the play by play on the stock just ahead. here at td ameritrade, they work hard.
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hello, everyone. here is your cnbc news update this hour. pakistani officials say the death toll in their country from the afghanistan quake has risen to 45. bringing the overall total to at
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least 180. the u.s. geological survey says the epicenter of the 7.5 magnitude earthquake was in the hindu kush mountains. on the back of populist anger at the political class. after huge protests helped oucht the last government. the 46-year-old moraleless will assume the presidency in january. american airlines planning to offer no frill airfares starting next year in an effort to compete with fast growing rival spirit and frontier. the plan could include fares that are nonrefundable. the world health organization cancer agency reporting that ham, sauce knowledge an, bacon and other processed meats. it says red meat is probably cancer causing as well. it put processed meat in the same danger category as cigarettes and asbestos. that is your cnbc news update this hour. meat industry is pushing back
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big time. >> there's a lot of guys i'm looking at on this desk -- >> eye contact -- >> making it with everybody, right? >> and you only need to eat less than two ounces of meat to up your cancer risk. so go figure. >> let me tell you, let me tell you, they'll be another study in two months saying it's good for you. i stir my coffee with bacon strips. i'm not changing. it is what it is. >> sue, thank you. >> you're welcome. european market closing right now. let's head to the new york stock exchange. >> europe stocks consolidating after last week's 4% surge. the german economy may be being an seaccelerating despite the v scandal. vw rescheduling earnings call in order to join angela merkel on her state visit to china. the german transport minister
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visits d.c. this week to lobby the epa. rival persia reiterating it never cheated on the emissions as it reports a 3% decline on elsas mostly on china. results at phillips overshadowed on news that the sale may be blocked to china. and wpp co is warning of inane pricing in the advertising industry in response to what he caws growing caution from clients. talk talk hiring defense contractor ba systems in response to a third data breach. hackers reportedly posing as staff to extract money from customerings. and a top gainer, denying reports it's up for sale after stock market turmoil hammered its assets under management and share price this summer. back to you. >> our next guest likes some of the value he sees in europe. he is the chief equity investment officer where he overseas $300 billion in assets
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under management. welcome. good to see you. >> good to see you. >> credit suisse. why? >> it's one of my favorite stocks. they had their strategy day last week. the new ceo laid out the credit vision. they're raising $6 billion of fresh capital which they needed. but that puts the capital issue, takes that off the table. now they can cut costs and really focus on asia and some of the asset light businesses they have and i think it's going to be a great stock over the next three years. >> do you have a price target on it? >> i think it's a double over the next three years. i don't know if that will happen right away or as the story unfolds but i think they'll deliver over the next three years. >> how about the debate that has bubbled up, value over favor. why is it going to come back in any kind of meaningful way? >> we, i think you've seen it this earnings is be, right? some of the more beaten up value
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oriented sectors like industrials that have been reporting some mediocre earnings. a sector like health care seems really out of favor. so i think there's a real sort of sector shift that's going on in the market. >> you're making a longer term call? i mean, that's sort of the tone of why i ask the question the way i do is yeah, of course, value's been back in favor lately. aren't we just going to go right back to the way we were investing and continuing to buy growth stocks or no? >> i think not. i'm a value investor. but i think when you've had a period like we've had, certainly over the first eight months of this year, where growth stocks outperform value stocks by seven percentage points, they ink it's time for value to catch up a little bit. >> do you then it's a nomenclature issue because when you talk about value, you're talking specific sectorings. when you talk about growth, you're talking -- like when you say growth, you're basically talking about technology media,
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health care, consumer discretionary. when you say value, we're saying that the industrial economy that neemds a weaker dollar and stable oil, neither of which you have. you're making kind of a macro bet by saying it's time for those stocks to perform or not. >> to josh's point, one of your top picks is united tech. >> i like united technology. >> is that a statement on united tech itself or like josh is suggesting a bigger macro call on the state of the economy and the industrial economy? >> i think it's a bit of both. i think it's a stock that has a lot of self-help going on. there's portfolio reshuffling. the new ceo at the beginning of the year greg hayes is really driving a lot of change there. it's not been a great stock year to date, but they're now talking about buying back their stock rather than engaging in m & a and i think that will make a difference for utx. >> fellow value investor over there, jim. >> i'm in the same boat with you. value is an awfully broad brush
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stroke. if we cut out the basic materials and energy names which has just been a vaporization. let's talk about value where there is some element of growth to it. last six weeks, you've seen resurgence in value. my question to you, because i'm asking myself this, is it sustainable or is it just sort of the puff of wind and maybe it's in comparison to a growth sector that apropos of health care and some darlingings have had some hiccups but in the past has shown us, just to say a name, when netflix has a hiccup, it rebounds. it's a question, how sustainable do you think this snapback for value is. >> it will require some help from the macro. the dollar is the key reconciling element to all of this. the dollar, although it's been strong, it's been pretty flat since the end of january. i think dollar might start to become a tail wind for those multinational companies that have been hurt by a strong
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dollar this year. i think a weak dollar is the reconciling factor that allows stocks to work even if the economy's not in great shape. i think everyone's positioned the way you're describing. everyone knows the dollar's going to be strong. when there's that many people on one side of the boat it doesn't take much to swing back the other way. >> what are you doing, basic materials and energy, just stay away? >> i want to stick with the companies that have the strong balance sheet. if it lasts six months, then you'll probably want to own the more levered companies. so i want to own the bigger companies with good balance sheets that can put capital to work and strategically smart ways during the downtown. >> so if the dollar doesn't work for you, i mean, you probably have the same viewpoint as a value investor at the beginning of the year. now you're eight months into it. dollar moving lower doesn't work. what is it about the fundamentals that is the
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catalyst? >> earlier in the year, we were very pro-growth, even in our value port follows. and over the sum, as the market gave us an opportunity, we took more risks, put more money to work in those stocks that were really beaten up. sometimes you don't need a catalyst, you just need valuation to be on your side. energy is so beaten up that even on bad news, the stocks are moving higher. the opposite in health care where it's been nothing but good news fundamentally. >> good things happen to cheap stocks. >> exactly. >> that's right. >> eddie, nice to see you. your money, your vote. this wednesday, on cnbc. tune in for the republican national debate. we're live at the university of colorado boulder. our coverage starts at 5:00 p.m. eastern time. well, yelp is getting a much needed boost from amazon today, up 11% on a collaboration between the two, but is it enough to make josh a buyer of yelp? wow, up more than 9%. and not so fast, joe terra nova.
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one of his stock picks is going in the wrong direction. find out how he's dealing with the losing trade. okay? >> totally fine. >> you're watching cnbc, first in business worldwide.
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we're back. it's time for our blitz. goldman sachs upgraded. citi gets downgraded. they say multiple could expand and call it a tactical buying opportunity. >> it's an excellent report. well written. they think citi can still appreciate 25% but they're saying in the near term the catalysts with there. to realize a quicker precious. they don't see the necessary tail winds to get citi moving
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any time soon. >> what do you make of this yelp amazon collaboration? >> it's obviously a positive. you do have some growth there. that growth is desiceleratedece. it's a cloud hanging over the story. the other thing is this company's hugely dependent on google to send it search traffic. it's not a name i want to be involved in. >> some deal making in the energy space. duke and piedmont national gas. duke is buying piedmont. >> fairly small deal. notwithstanding the dollar value. the company operates in three southeastern states. i'm not quite sure what this does for duke but it's great for the shareholders of piedmont. this is natural gas space. this seems way too early to come in and make being an an what signatures. you're going to be seeing
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companies like duke able to pick up assets out of bankruptcy for much cheaper than this deal went here. >> is that why duke shares are down? >> i like that jimmy is talking natural gas. we don't talk about natural gas enough on this show. natural gas is down 9% today. it's approaching $2. hasn't done that since april of 2012. weather forecast looking forward, incredibly warm. the last thing in the world natural gas and even to a certain extent energy needs is a warm winter. >> yahoo!, 15 million unique viewers. first live streamed nfl game yesterday. >> a third of those international. when you go through this whole time change thing, that is a problem. when you consider where you are in the midwest or west coast. you've almost eliminated that group. they did sell out the ads but they also cut the price of those ads. is it mixed?
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i would say this is absolutely mixed. did they have some success? i wouldn't say this is a raging hit for yahoo! but it did prove this can be done. i still think the third string is the way things are happening now and the thing screen is not the way people watch the game, it's how they communicate. >> especially ahead of alibaba reporting this week. >> he owns alibaba now. if you're bullish on alibaba, think yahoo! is going to be able to continue to be the mirror, be able to move exactly as alibaba. i'm not so sure how excited i am about those earnings. >> all right. pep boys strikes a deal with bridgestone. find out what it means coming up. plus, only 37 trading days left this year. can you believe that? no front-runner left. now josh brown's in first place. >> what, i'm the front runner.
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>> there's a nice little race going. >> the only thing that's clear -- >> one of them's a negative. >> moving back and forth a lot. moving back and forth. >> we know what's clear. >> yeah, yeah. who loves you? we got some type. >> can you tweet us plea please @halftimereport. ideas for pete, something he has to buy. >> what do you got to get rid of? >> so bad, now we're asking for help. #helppete. back after this. >> i'm working on it. good. very good. you see something moving off the shelves and your first thought is to investigate the company. you are type e*. yes, investment opportunities can be anywhere... or not. but you know the difference. e*trade's bar code scanner. shorten the distance between intuition and action.
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all right, merger monday in the auto space. bridgestone buying pep boys for more than $800 million. if you don't know by now, a portfolio manager at tiaa-cref with $834 billion in assets under management. she's live today from new york city. stef, welcome back. >> hi, scott. >> big smile on your face. this is the space you love. >> i do. i like this. i like this deal. i think that bridgestone can do a lot of good for pep boys in terms of improving the service, doing some m & a, selling some noncore stores. i think if i were to be putting new money to work today, it would be the auto parts companies versus the auto retailers because the valuations are still really compelling. especially at companies like leer and delphi which are trading about nine times forward
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estimates. >> you like them more so than, say, auto zone for example? all the stocks have done really well. leer as you said is no slouch, it's up 19. 9.5%. >> yeah. but if i look at the valuations, you're looking at, again, nine times forward estimates at lear. they just beat, they just raised, their backlog was up year over year. they have margin upside which i really like. you have that operating leverage potential, and they've got $1.3 billion in excess liquidity that i think is going to find its way out there somehow in terms of shareholder value creation. so i think you've got more upside at a lear given that valuation could see a rerating as they continue to do better and execute. >> you still like these names over the traditional automakers, the gms, fords, which for some reason cannot perform up to the level of the parts makers in a
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red hot market for auto sales. >> yeah. i think that general motors, that report last week was really very good, and i have to tell you that i'm tempted to actually buy it just given that we're finally seeing scale and profitability at general motors, the first time we've seen such things in all of their regions in many, many years. their balance sheet is strong proshti, product cycle is good. but it's just a little more of a su cushion where you have exposure to more oems. there's nothing to complain about in that report and certainly in the low 30s it's very attack tiff. >> we'll see you back on the desk soon. >> see you tomorrow. >> stephanie link. pete, what do you think? >> very similar to the housing trade. we talk about that all the time but we look at the housing trade and everybody looks at the builders and most everybody wants to go to the derivative
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play. this is the same thing. you look at a lot of auto names that people talk about. we get the earns and numbers that are fantastic and yet it's been the derivatives trades that have been a better place to be. >> i'm long gm, and so i share your sort of wonderment why it trades at something like six times earnings. i think the problem is that there are indications that this may be an auto company of old which is to say labor problems. labor is really chomping at the bit to get some of the profits you were just talking about or steph was just talking about. that was a great earnings report last week. unfortunately, it's poorly timed as the uaw is negotiating with gm right now and they want some of that profit. that may be the problem here. >> if you say why bother with those names when there's clearly better money to be made elsewhere and still get the benefit of the auto trade. >> the saving grace here, and i have said this time and time again, cash, scott. there's a lot of cash on the balance sheet. when you strip out the financing
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arm, there's a lot of cash on the balance sheet for gm. a very high dividend yield and they're buying back shares like crazy. eventually that does matter and i know some people think that's financial engineering, but when you have a company that's growing profits, it's the best of both worlds and i'll take it. >> speaking of pep boys and the auto parts makers, legendary investor mario ga belli will join us on this set on friday. his firm is the biggest pep boy shareholder. he's talked about auto zone before. he's talked about o'reilly before. we're going to get his take on the deal, what else he likes in the current market environment and that is this friday noon eastern with super mario. three hours left in the trade today. the desk breaking down the key earnings to watch this week and there are many. we sized up apple already. we'll talk alibaba, go pro,
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exxon, baidu, coach, cheesecake. we're back after this. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. can a a subconscious. mind? a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?
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♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪
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well, not so fast joe terranova. our traders are quick, they're not always right know and about a month ago joe made a bullish call on a materials stock. >> martin mare yeietta, really domestically based. that's a name again, stay with it, it's worked. it's going to continue to work. >> i don't know why we were looking at aos stock there but that's neither here nor there. >> revenue growth in q2 for mln, 13%. highest in nearly ten years when you talk about cement. you will see demand exceeding capacity in the coming 18 months. >> you still like the stock. it's down double digits since then but still have a really good year. >> it's having a great year. started the year at $110, got up to $1.76.
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i would stay with the name or buy the name. speaking of earnings, wall, please. i mentioned some of the names on top. there you go. chock-full of companies reporting this week. jim, pick one. >> i'll tell you what, let me pick a sector, old pharma. bristol, pfizer, novartis, these are supposed to be stable names, cash flow generating high difficult levidend yielding nam. they have moved about over the summer. let's see if the earnings report gives a little stability back to the names. i suspect it will. they're going to be buying back shares. they're going to still have a high dividend yield. >> exxon, who wants it? exxon? >> in their portfolio? not me. >> who wants to talk about it? joe? >> i mean, the expectations are
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muted for sure. i don't think the time is now. i think you could look at a chevron or a conocophillips and make the argument why those two names would be better, but that style of investing i don't think is the right style right now in the energy space. >> okay. survey says wall, once again please, calendar. josh brown. >> let's talk twitter and linkedin because these are two companies that you have minimal expectations here. in the case of twitter we know about the management shake-up that's now been resolved. i think they will be able to clear the slate and talk about the future. bock pe bob peck was out talking about maus probably stabilize and a lot of revenue stuff is now starting to kick in gear, e-commerce, et cetera. linkedin, it's been in a down trend pretty much all year. it's not got a crazy valuation and i think they have the opportunity shock some people. stock up 50 points, by the way, off the august low and still down huge. >> what's the fed going to say
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this week? oh, yeah, the fed meeting. >> i think the key thing is what do they say about the economy? do they downgrade their view of the economy? that's what matters most. >> i think you're right. so much going on with earnings, the fed meeting, our debate on wednesday that we're so excited about. >> the world series. >> the world series. >> it's all happening. >> that does it for us. "power" starts now. scott, thank you. even with all that that's coming up nothing will top yesterday's red skin victory. welcome to "power lunch." along with mandy drury, i'm tyler mathisen. valeant explaining their business model to analysts. investors giving that stock a bumpy ride. right now it is basically flat at $115 but this was a 260-some dollar stock not that long ago. >> apple shares taking a hit right now. they begin shipping their new apple tv this week. how big a deal i


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