tv Fast Money Halftime Report CNBC November 19, 2015 12:00pm-1:01pm EST
welcome to the halftime show. joe along with john and pete, and also joining us on set for the full hour is bonnie baja. a top portfolio manager at jeffrey gundlorh's double line capital. our game plan looks like this. citadel exclusive. we take you inside the super secret hedge fund today. kate kelly nabbing a rare interview with a top stock picker there.
we do begin with the fed and the markets and the realization that the free money mania of the past six years could be about to end. most importantly, investors seem ready. stocks taking off after those fed minutes appear to lay more ground work for a december rate hike. >> the reason that we at double line are cautious though, when you look at broad indicators today, we're worse off than in 2012. at the end of 2012 gdp -- want only gdf was off by 1%. now it's around 3-esh. moderateties are at all-time
lows in some indicates. china is slowing. it just doesn't strike me that things are so hot that you have to accelerate. >> are they so bad you have to be at zero? >> i guess the fed -- price stability. with regard to the price stability, we're nowhere near the 2% inflation target. with unemployment by conventional measures, 5% it looks like we're there. however, what i thought was jarring is when you parse through the numbers of the last unemployment report, 271,000 jobs added. that's great. it was shocking to me jobs added for workers over 55 years old. 378,000 swrobs. the cohort between 24 and 55. a loss of 35,000. the quality of the jobs being
created is suspect. >> just so we're clear. jeffrey told us in the past he didn't think there should be a rate hike this year. he didn't think there would be a rate hike this year. has he changed his view at all? i mean, does he now believe as well that there will be a rate hike in december? >> he does believe there will e be. >> how could some people be so confident that we're going to see 100 to 125 basis points move higher over the next 12 to 18 months. is that a flawed expectation? >> the fed is going out of its
way, and. >> i think she made it pretty clear that they felt like a rate hike was needed, but that did not really mean that you would run a glide path for higher rates on a consistent basis. >> i laid out the beginning of the program investors are ready for this. the market yesterday wasn't that the statement that the minutes come out, they're hawkish, more ground work, fed speak yesterday lays more ground work. market goes up. big-time. is that a sign that investors are ready? are we finally ready? >> i think we have the majority of people, even convincing miss baha and jeffrey gundlach that here going to make this move. the consensus has moved strong this that direction direction. it's a minority of people that they will move. >> tell me how to play it then.
into december, what happens? >> they're going to go into december, and it's going to be a quarter point in my plea of. if you are in the nurielrabini camp, you think it has to be at least half a percent based on what his outlook is for three rate hikes to get to us -- i think we get a quarter percent. nothing happens, judge. we just go about our business, and then the next one, how fast the next one comes and how big the next one is because if the next one was that half point move, then i think it's a different story. >> just saying does the market continue to rally? that's what i'm trying to get at. help me out. >> is that a sell on that news when the realization finally happens? >> i do think i agree with john. i think it's a quarter point. when you look at what everybody was talking about, including this morning. richard fisher was talking about he expected to be way back in sept september, and now he absolutely expects it. the market expects this to happen is it in december,
approximate if it doesn't, there's going to be huge disappointment. that would be an even more aggressive sale. i think you asked the other question as well along the way, scott, which is what's going to be working? financials. look at the way the financials absolutely rocketed yesterday. look at the way the technology names rocketed yesterday as well. i think there are certain sector that is will respond to this rate hike in the way that obviously most of us would hope the entire market will, but i don't think the entire market will. i think there will be segments of the market that won't be able to respond very well. >> i think leaders continue to lead. i think laggards continue to lag. i don't think you picked the bottom in energy. today is a classic example. you have the u.s. dollar down. pulling back, okay, .8%. oil is lower. i think that's telling you all you need to know. >> i think they're going higher.
certain segments, unfortunately, got weight on them right now. >> we think rates are going to go up sooner rather than later now. do you sell bonds? >> well, no. in fact, the bond markets basically have done the fed's tightening for them. ever since that employment number came out, you know, treasuries have been on a tear higher. now, what's interesting is that really if you look at the shape of the yield curve and on the short end of the curve, tightening started four years ago. it's really that ten-year and then the 30-year that's still an out liar. >> now to the latest in the paris terror attacks. french authorities confirming that the alleged mastermind of those attacks was killed in yesterday's raid in saint-denis. michelle caruso cabrera live for us again today. michelle. >> scott, we're going play for you a new piece of videotape that has surfaced, which was
recorded during that raid. it's pretty compelling. we now know that raid, as you said, killed the alleged mastermind or the alleged architect of friday neat's attacks, and the piece of audiotape that we're going to play for you is recorded by a neighbor who was there. it is a recording between the female suicide bomber before she blew herself up and one of the members of the swat team. take a listen. >> once again, you are hear the tremendous amount of gunfire, and can you hear this woman's voice wrosh who is she? three police officials telling the associated press she's 27-year-old abdel aimmediate
abaaoud's cousin. sne say they have three police officials who have confirmed this. this was obtain bid french broadcaster, and once again, it was reportedly recorded by a neighbor, and it must have been an incredibly frightening moment for that person as they listened this unfolding and the tremendous amount of gunfire that was going on. >> that is for certain. michelle caruso cabrera. >> one stock, one ceo. jack dorsey is now doing double duty with twitter and square. knee both rallying today, but which is a better bet for your money? the largest u.s. health insurer is getting cold feet about the affordable care act. what united health is warning about the insurance exchanges means for the sector, and the retail disaster of the day. best buy tumbling after its earnings report. top portfolio manager from citadel joins us with his take on the retail rut. you're watching cnbc first in business worldwide.
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little bit. shares of swear. first of all, surging its debut here. the stocks now up about 43%. can you see there, it did go as high as 64% to the up side. $14.78 after opening at $11.20. that was below the expected range of $11 to $13. shares are trading on the new york stock exchange. heavy volume as well about 34 million shares have trade sod far. that means the entire sale in the ipo has changed hands already. meanwhile, dating site operator mamp group also making its trading debut. you can see here up by 13%. the owner of dating sites like tinder, and okq at $12 a share. the lower end of that expected range. it was $12 to $14 expected. the stock open for trading $13.550. the shares are trading under the ticker ntch. heavier trading there as well. again, a lot of ipo at least attention being paid certainly to these two stocks. scott, back to you. >> dom, thanks. seems like the share ipo was
priced well. >> they priced it well, but it is a down round, and by that i mean, of course, the previously they had priced $12 a share before coming into this one. they have to make that up. they promised they don't have to actually, but they promised in the last offering that they would make it up to anybody that participated in 12. in other words, a down round like this -- only meaning that if it was actually priced higher, you wouldn't be seeing where you are seeing now. >> it's more or less financial engineering to get you to this point where you basically brought out a very thin float and created a lot more demand. swrak has done a great job, so i'm not putting him down. i would buy the stock. i hope to, judge. right now i have pay pal in a number of our accounts because like carl icahn, i think that is
one of the big winners in the payment space. >> you debt get any allocation on the ipo. >> for clients we did. i know this was this thin. it was way over subscribed. you got maybe one share for every 100 you wanted. so what, if anything,s the right price to buy stock today? >> well, i don't know if you get another chance to get back in right around 11, but, i mean -- >> you wouldn't buy 13. >> no, i wouldn't. i'm going to give it some time to see if we can get it in at 11. >> it's a business that i don't really understand well enough to understand why i'm going to be involved in this. some of the profit losses, maybe. >> i mean, you know -- >> rocket science stwrsh. >> well, it is sort of. it is like holding up a crucifix to dracula for these guys because this is absolute -- that
was a horrible lead-in for this match to have basically interactive and trying to bring the companies out after ashley madison is out there with all these fake sxkts things. now, people have not said that about match. it does raise concerns and so that's one of the reasons i think that it's not as high. >> i like the idea of sorry, joe, but square. when you are looking at square, though, the problem i have with it, compared to what john is saying is competition. we just heard about it yesterday. you know, when hardib was here talking about the different motifs. that is such a competitive world right now that whole world of -- >> they have a place within it, right? >> they have a place within it, but there's so much competition. how much is that going to drive things down? how will the margins be going forward is this. >> both of these companies have lots of competition. the only difference is one has fat profit margins. the other has no profitability at all. i mean, i'm not sure what the compelling thesis is to invest in either of them. i mean, i'm with you. i think it's kind of an unsavory
business. no thank you. >> you have limited visibility with ipo's. you need to hear multiple quarters of earnings. kind of what you got from zucker berg and facebook when they had the turnaround. you don't have the visibility. you don't know exactly what you're buying. you think about match. what do you think of? you think about barry dillon. that gets you more excited about potentially buying because you're investing along with barry. he has a long track record. >> can he run both successfully. our guys pushed him in the interview.
he didn't give were, but we're used to that at this point. >>ed paultd space and the fact that this is burning money in the payments area, yes, everybody -- the user square tebdz to love it. not just like it. love it. >> i like using it as somebody who charges a lot of tough tough stuff. however, they're not making any money. what's the road when pay pal and all the others are out there. >> p that willing dorsey is taking another company public and it's going to deserve a lot of his time. he suggests i can run between buildings and stop at coffee and use my -- >> you asked that question a while back, and my answer would be you wait a couple of quarters for twitter and see if twitter,
a, starts to get any kind of -- >> haven't we waited? >> yes, we have, but -- let's remember, we just brought in dorsey again to take over as the ceo. he was, you know, in a position a while ago, came back, and here he is. i think you have a little bit of time for him to actually get his feet back into this company the right way to be able to get this monotization working in terms of growth. the monthly active users. it's been stuck at 300,000 for -- 300 million for how long now? that number has to change. that number has to change. it might take a couple of quarters for jack sitting that n that ceo seat to get that turned around. >> there's nothing exciting in the earnings yet. pete nails it. what have they told you at twitter and in earnings report that gets you excited that you see visibility in terms of prochts accelerating. >> exciting things going on. >> great. those are ideas. ideas, right? those things aren't out there yet. >> what about the users? they can't figure out how to grow their users. that's the bottom line. >> you are right. >> coming up, the unaffordable care act. that's what united health care
is claiming after cutting its guidance. sending the insurance stock and others in that space reeling. we'll explain what it means for your money. plus, how one of the most respected hedge funds in the business is investing amid the retail sell-off. we'll talk consumer stocks with a portfolio manager inside citadel. a place tv cameras don't often go. we got one there today. kate kelly is coming up. ♪ i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet? if ynow's the time to get your ducks in a row.
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a shocker. that's what our own jim came cramer is calling united hblg's disappointing outlook today. the company cutting its guidance blaming the affordable care act and saying it may leave the exchanges at the heart of the president's health care plan. for more on how investors should be thinking about today's news, let's bring in steve weiss. he is one of our experts, of course, on the sector. steve, welcome. does this force you to rethink how you would invest in any of the stocks in the insurance space? >> well, i think it does, but actually it may force you to think about getting back into the hospital at this point. let me just put numbers to
what's going on here. this has been -- jim is right. it's shocking that you nh is doing at this point. >> of course, the point is he makes that point because they just guided higher in july. >> right. that's what's shocking about it. the hospitals actually led you to -- because of this and because of the aca. what happened was when the affordable care act first started, you saw a big pick-up in interest. >> that was a criticism when it came into being because it's health care socialism. the people that couldn't afford care before or were uninsurable, now we're taking our health care
whereas the one thats that don't need it initially took it because why not? it's fairly inexpensive. now they're saying i don't need it. they would rather pay the penalty. the penalty for not taking health care insurance out is a cost to the bronze plan. if you took a bronze plan, it's basically going to cost you 300 a month if you are in new jersey. plus out of pocket can go up to 7,000. they're paying the 300. that's why they're not doing it. that's why people are excited. >> you are kind of our man on the hedge fund perspective here.
>> it's become -- particularly for the hospitals. the hery in the hospitals was that, okay, the government is not going to guarantee all the bad debt. that's now changed. you have a lot of uninsured. in terms of the -- in terms of the health insurers, you are seeing mass consolidation. part of this may let the governments go ahead and allow them to consolidate on one hand, but that's going to drive prices up. they need those economies to scale. let's just see those consolidations continue, you don't want to be there yet. more than that, you also have allergan that's down today because of what may happen with off shore being able to --
>> bbz hit in the milgtsz of the month, and you have to give 45 days notice. you will continue to see selling. probably into next year. it will be a hot campaign issue. >> we'll catch you back on the set soon. thanks. >> thanks so much. >> live from citadel, we go to chicago for a rare interview with a portfolio manager at the hedge fund. more "halftime" coming up next.
hi watson. annabelle, your birthday is tomorrow. i'm turning seven. what did you ask for? a princess. and a pony. you like things that begin with p. i like pink frosting too. will you have a cake? yeah. i was too sick to have one last year. the data your doctor shared shows you are healthy. are you a doctor? no. i help doctors identify cancer treatments. i want to be a doctor someday. i can help with that too. watson, i like you.
welcome back to "the halftime report." atlanta fed president dennis lockhart making a speech right now saying "i'm comfortable with moving off of the zero rate soon." lockhart says it is appropriate to begin a new policy phase. does it nail down september? doesn't say specifically. he says the economy is on a reasonably solid trajectory, and he expects once rates rise there to be gradual rate rise tlafz. he says he has thought about the low inflation risk. he has thought about global risk. he has thought about the issue of resource slack. he does not find those arguments persuasive. he says the rate hike should affirm that the economic outlook is positive. i guess i go back to cot now.
scott, you can capture the centrist. lockhart had been on board with the rate hike. then had his doubts after the flare-up in august with markets. now back on board with what looks like a december rate hike. scotts. >> steve, thanks. >> conceal discuss that in a moment. first, sue herrera has the latest headlines. >> scott, thank you very much. here's your cnbc news update this hour. a police raid is underway in the town about 230 miles north of paris, about 150 miles. it's near the border of belgium. there was an explosion in order to open the door of a home there. it is not yet clear, though, whether that raid is linked to the paris attacks. >> the house debating a bill that will make it more difficult for syrian refugees to enter the country. yesterday president obama vowed to veto the bill. a vote is expected later this afternoon. democratic presidential candidate hillary clinton is laying out her plan to fight the islamic state. in a speech in new york she says the goal is not to deter isis, but to defeat and destroy it. she says the u.s. should
encourage arab nations in the -- to defight the militants. >> county officials say a police officer who was shot to death last night was targeted. officer richard galvez was in his personal car at the downtown police department parking lot where two gunmen opened fire. there had been no arrests so far. you're up-to-date. that is the news update, scott. back to you. >> sue, thanks. it's not often that investors get a view inside the secretive hedge fund citadel. it's all changing today, though. our kate kelly live in chicago at the firm's headquarters where she joined exclusively today by one of $25 billion funds top portfolio managers jack woodruff. take it away. >> hey, thank you so much, scott. as you said, whoer here in chicago at the risk center of citadel's headquarters, and i'm here with jack woodruff who is a consumer portfolio manager at surveyor capital, which is part of the overall equities platform. jack, welcome. thank you for doing this. >> thanks for having me. welcome to citadel. >> thank you very much.
you guys have been very hospitable. let's start right off with sort of a macroview if we may. i know that you focus on consumers which has a lot of subcategories the way you organize, but give me your high level view on the u.s. markets. is the four-year equity rally finally starting to fizzle here? >> well, we really focus on the stories within our consumer book or, you know, other sort of areas that we also participate in. you know, citadel has 70 equities teams. we cover 3,500 stocks. we don't spend a lot of time thinking about like the general view of the market. we're more focused on our stories. that being said, there's a few things within the market that i've got my eye on. you know, first is obviously the fed. we're concerned about the direction of rates and how that's going to impact affects. that will have an impact on earnings. we're also worried about the level of corporate profits. in 2007 and 2008 as we enter the financial crisis, these
companies had a lot of fat on these income statements, and eight years later with earnings being pretty strong over this time, we don't think there's that much fat to cut. if we already had any kind of demand, speed bump, or shock or even a recession, which we don't believe is going imminent, we do think that would cause real down side to earnings. >> if anything, corporate earnings are starting to contract just a hair for the first time since twooirn, right? we're starting to wonder if the valuations are going to come in here. >> well, it's been interesting. i mean, the breadth of the market is actually quite weak. it's only a few names that are really leading the indexes, so if you actually look like underneath the surface, the market is -- it's not as pretty. >> how healthy and confident is the consumer right now? that's something you obviously focus predominantly on. >> right, the consumer has been actually pretty food. we're pretty confident in, you know, what we're seeing. the big picture macroindicator that is we focus on, employment,
wages, housing, confidence, they're all moving in the right direction. >> but the money in the wallet, it's going in a different direction than it would have five, ten years ago. >> we've noticed a pretty big shift in spending trends just in the last few years. one thing that we've noticed is. >> being improved. what's your overall take? >> well, they set the bar pretty low going into earnings. last month wal-mart had their analysts day, and because of the fact that they have been overearning for the last several years, they haven't really
invested in gross margins. they haven't really invested in their people. their sgna has been flat for, gosh, in the u.s. i want to say in the last seven or eight years. >> define sgna. >> it's really just the operating expenses of the retailer. they haven't really made the necessary investments they needed make on their on-line, and they've really lost their price advantage over the rest. >> time will tell if these investments leave them out of the doldrums, but they have a lot of wood to chop. >> they have shown that they can make a profit. are they overvalued, though, here?
>> it's hard to say. amazon gave us much more insight into the aws business, and i think that the profitability and the growth metrics of this business were far in excess of what anyone was really anticipating, and that has been a pretty big part of the outperformance of the stock. within, you know, their e-commerce business, the trends are good. they continue to take share. the margins have been strong, and, you know, prime is a real differentiator in this fight for consumer market share. >> in terms of pockets of strength, how do you like athleisure, and are there any names that you would single out in that as stronger than others? >> it seems like pure speculation that under armour might take over lulu? do you expect to see more of that chatter? >> athleisure is a strong category, and it goes back to what i was talking about with health and wellness, and it's one of the areas where consumer dollars are going. people are working out more. you've got nike is doing
fantastic. lulu lemon, their stock has been under pressure, but it has a lot more to do with lulu lemon. if underarmour wanted to make an acquisition, its stock is in pretty good currency right now. it's something to watch. i have no opinion on whether or not there's anything out there. >>. >> you don't tend to put too much stock into holiday retail sales. why not is this. >> at this point everything has sort of been said. you know, there's a lot of guys that will come out and talk about promos in the market and all these things. these guys don't plan these things a we're in advance. we're much more focused on 2016. we are interested to see how trends play out in the holiday and whether or not any of those trends lead us into adjusting what we think will happen for 2016. >> jack woodruff, thank you so much for being here. scott, back to you. >> news alert now on intel.
that company's guidance, dom chu, what's the -- >> the investor outlook here, they're saying they expect full year 2016 sales growth to be in mid single digits. that's solid compared to what analysts were looking for in terms of a 4% gain in revenues for the full year of 2016. that's helping things. also helping matters out, scott, the idea that intel says that in the starting of the first quarter 2016 they will raise their quarterly dividend to 22 cents per share. it was 24 cents before. a dif debbed hike. perhaps we'll call it solid sales outlook here for full year 2016 helping to put those shares up by 2.5%, 3%. intel shares currently the best performing percentage gainer in the dow and the third biggest contributor to today's gains. >> highs of the day. right now in intel -- >> we talked about certain areas of the market. we talked at the top of the show about looking at the financials and looking at technology. take a look at microsoft, for instance, right now as well. one of the names that's pushing towards 52-week highs.
obviously this big bump on this positive coverage in terms of the outlook for 2016. you can understand why those areas is where people are putting those money and people are going towards some of high flyers. >> be good to get non-fang x moving, right? >> i'm with you. >> facebook, apple. >> amazon. >> netflix. alphabet. >> yeah. >> google. >> yeah.
coming up at the top of the hour on "power lunch" a big blow for obama care. one of the nation's biggest health insurers threatens to pull out of the public exchanges. what now of the health care? russian stocks are up more than 10% this year. is it time to be looking at the emerging markets once again? this is a shocking story that you need to hear. isis setting up a 24-hour help desk for terrorists. how far-reaching is it? also, the role of -- we'll discuss all that. make sure you join us at the top of the hour. back to you. >> thanks. >> another bad day for crude. oil sliding more than 1%. sima and the futures now have more. hi, sima. >> once again, we're seeing oil futures struggle to hold at $40 level.
>> ultimately i think we have brokenness in the market so to speak. volatility index spiked above the 45 level i've been talking about. i think we're starting to see a little bit of disjuncture taking place between supply and demand, which ultimately a longer term i think sends oil to about $36, $37. temporarily, yeah, we can get a bounce off of 40. >> what stinz would you look for to tell you where oil is headed from here. >> well, the first thing i would actually look at is gasoline. crude oil and fwas lean today going in absolutely different directions. if you look at the gasoline market, monday was a really fascinating day. gasoline, we got a key reversal in that gasoline futures made a contract low, and then rallied through the course of the day about 4% to finish higher on the day. that's really important. continuing today, it's gasoline higher, crude oil lower. that makes me wonder if we
haven't seen the bottom in crude oil. >> interesting trend to watch. get more from scott and brooirn on our live show where tom lee will give us his bull call on what the market has in store rash that's live at 1:00 p.m. eastern. futures now.cnbc.com. scott. >> sima, thanks. we'll be there. keurig green mountain following soaring erjz. 62% this we're. we have that trade coming up in our blitz and just one week until thanksgiving. that's why jane wells breaks down the cost of all of the fixings. we look forward to this, jane, every year. 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 to help you anticipate potential price movement. there's no way to predict that.
doc, goldman sachs. >> yeah. and take a look at what that means. just like with apple a day or two ago, judge. you add something to the conviction buy list. >> they did that yid. >> turnover is dramatic. it's already traded about 170% of normal volume. obviously that's not all goldman. >> more up side. wendy's or mcdonald's. >> wendy's. for the next 12 months. >> next 12 months. >> he just qualified. >> bonnie. >> keurig green mountain. joe. >> well, it's perculating for one day, but it's not going to
>> there was also deflation. a gallon of whole milk is a full 51 cents cheaper than it was a year. miscellaneous ingredients like condensed milk, coffee, eggs down 30 cents. whipping cream down 6. cranberries, peas, relish trays all down a nickel or less. why cook? go out and take out a second mortgage, guys, if you plan to go to the old homestand steakhouse in new york. champagne, ruffltruffles in ins the bird, a diamond engagement ring. don't eat it. give it to her and she will be very thankful. >> i'm in. >> that was dr. j, not surprisingly, jane. >> don't eat it. >> jane wells, thank you very
much. >> that's a lot of money that's just going to go to waste, if you know what i mean. >> yeah. >> yeah. i want to talk to bonnie before we go about part of that note of what i saw that you said yesterday about this potential accident from the fed. but you also make note of m&a. >> yes. >> you say there's been a lot of m&a but bad m&a. what do you mean? >> a dollar of debt is not the same depending on the final usage. what has us concerned in the credit space, m&a activity is up according to deal logic 89% year-over-year. only 13% of the credit that's been issued so far this year has been for capital expenditures. most of it's been for doing things that, you know -- i'm a bond dealer so i know you stock guys love this, issued dividends, buying back stock. i mean, when you issue debt to build something, to make something, to hire people to generate income to repay the debt, it makes a lot of sense, but this is just dead money.
that's a very worrying concern. >> so-called financial engineering. >> yes. give it whatever name you like. it's sort of like let's borrow a bunch of money and give it away. it's the corporate version of helicopter ben, i suppose. >> high yield energy debt, where are you looking forward into 2016. >> before you answer that as it relates to emerging markets, is that part of the ripple of an accident that you would see as a result of what the fed may do in december? that the emerging markets which are already having a bit of a tough time could have a worse time whether it's currency, debt -- >> definitely on the currency side. and again a lot of emerging markets going back to energy are, you know, energy producers, consumers. the energy space is a space that we're underweight, and i know that there's been a lot of press lately about hedge funds in particular putting on this big trade and thinking they were buying on the cheap. just because something is cheap doesn't mean it's a deal. i'm now seeing some pundits
looking for oil to go to $60 a barrel in like 2018. i tell you, there's a huge, huge oversupply and declining demand. >> wow, so where do you see oil in 2018? like way lower? i mean -- >> in 2018? >> 2018, do you have that visibility for us? >> i mean, i get the point you're making here. you're scoffing at that. >> this is somebody else's forecast, and, again, what was oil? over 100 bucks a barrel a year and a half ago. that's quite the decline. wr >> we have to take a quick break. retailers reporting the rest of the week and set you up for the second half of the day as well. proud of you, son. ge! a manufacturer. well that's why i dug this out for you. it's your grandpappy's hammer
and he would have wanted you to have it. it meant a lot to him... yes, ge makes powerful machines. but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you? go ahead. he can't lift the hammer. it's okay though! you're going to change the world.
i actually would go back towards ross stores. i like what we heard from tjx. they're very, very similar, not exactly the same but very similar. they don't have carol in charge either, but this is a company that's been basically doing very similar in terms of its sales growth, and i think they will once again. i think the earnings i would expect to be very positive. >> okay. before the bell tomorrow, footlocker, abercrombie. >> i would go footlocker with that one rather than abercrombie. i was just out at mall of america, i didn't see as much traffic in the abercrombie as i'd like. >> you were doing some channel checking? >> yes. >> that's really reliable. >> thank you. >> you did make a move with jci? >> i did. bought johnson controls, air conditioning. been checking up on that, too, as well as for automobiles. heating and cooling and air conditioning. this one today for my account as well as the portfolio. >> best thing to do in fixed income right now is what? >> stay diversified.
stay diversified. >> what's the most attractive area right now? >> you know, jeffrey was on the tape talking about a particular breed of investments which i think is very interesting, closed in funds. certainly they're trading a the a discount. you have some cushion there because of that in the case of a rate rise, but as a manager with closed in funds that are invested in credit -- >> right. >> -- a rising rate may hurt your net asset value but it helps investment managers reinvest the proceeds at higher levels. >> thank you for being here. "power" begins right now. scott, thank you so much. welcome, everybody, to "power lunch" along with mandy drury, i'm tyler mathisen. a big blow for obamacare. one of the nation's largest health insurers threatens to pull out of the public exchanges. the news taking down health care stocks. what now for the affordable health care act a