Skip to main content

tv   Fast Money Halftime Report  CNBC  May 17, 2016 12:00pm-1:01pm EDT

12:00 pm
central control panel thus far. ecoassumed that position. we have to see how deeply they go in building out that platform >> or how developers build out for it. >> maybe we learn more after the meeting. no cameras at the meeting today. mean while, dow tries to trim loss. let's get over to scott for the half. guys, thank you so much. welcome to the "halftime report," i'm scott walker. amazon's shareholder meeting, ceo, jeff besos, expected to take the stage any moment there. josh lipton is there to start us off today, josh? >> reporter: scott, call it trump versus besos round two. maybe that's what we'll see here in seattle. listen, we know the real estate mogul and amazon ceo have been publicly brawling. trump accusing amazon of
12:01 pm
antitrust violations without getting into specific, and "washington post" ran an article saying trump posed as a publicist to generate stories, a claim trump denies. bezos would offer trump a ride to space. would he field any questions at the meeting about trump? we'll wait for that. the brawl has not worried investors yet. look at amazon stock, outperforming the market this year, and still up more than 60% over the past 12 months. adding to the drama today, though, ultra violet, a group fighting sexism, lhas a petitio to ask amazon to stop selling trump's line of men's waear. why is amazon continuing to support the trump empire, and
12:02 pm
now, ultraviolet says 1500 shareholders signed the petition and commissioned a plane that will be circlingover head today at the meeting with a banner saying, #dumptrump. for its part, amazon declining to comment on that. i'll head into the meeting right now, listen to bezos and bring you headlines as they come. josh, back to you. >> maybe political fireworks to watch for today. the stock is the story, not so much the politics. >> absolutely. we were talking about this yesterday, talking about jeff bezos, the man, what he's done in innovation, and someone gave me flak on twitter yesterday saying, pete, he's not done everything right. that's why he did it right. in failure, he's had success, great job of cutting when they needed to cut and moves on. when they get themselves into private label, the youtube competition, everything, they are going after everybody and every industry. that's a guy on tv you don't
12:03 pm
want to bet against. >> convinced value investors to buy his stock. >> right. >> you bought the stock. of all the people on the desk who would have argued, look, i can't touch it because the valuation is too rich, you finally got in. >> i got in. i'm market weight from underweight looking from a pullback -- >> no disclaimer, you bought the stock. >> underweight to market weight. they are a disrupter. the gross merchandise volumes in the quarter grew 38% year over aeroyear, an acceleration, and number of prime users went from 11% to 19%. they are real numbers. they continue to drive the story and continue to disrupt, that's not to say department stores are over. i do believe you can pick at those names in the carnage, but i wanted to involved in amazon because they are a leader and i
12:04 pm
want to be with a leader. >> a firsthand look at the disrupter over the last week to ten days, killing everybody, but today, there's a reminder of what e what we talked about every day leading up to home dep depot's earnings, a few companies amazon can't touch, and there's more representation of that today. comps up 7 preponder7.5%. you want to be a buyer of this stock. back to amazon, why you want to own the stock is because they have spent over the last couple years, but they are seeing a high return on their spending, something that a lot of companies, in particular in the large cap tech space, they do not have or share that kind of success, so i think that's the bullish argument for amazon, and that continues lifting margins going forward. back to home depot, clearly we talked about it yesterday, they seem insulated to what amazon
12:05 pm
could do to them. stock selling off a little bit today, but if they give it to you below 130, take it. >> why is it selling off today? a great quarter, comps were 7.5, expectations were 4%. they crushed it. >> everybody knew they were. looking for a surprise when everybody else already is. i think home depot is probably the best retailer in america right now. they've been for years. the stock is consistently in above market multiple, but deservedly so with the company growing faster than anyone. they are amazon-proof, i'm not sure about, but they are incredible at their own e-commerce game. they really know what they are doing. they really have blended the in-store versus out of store combination for the customers, probably better than almost anyone else i can think of, and that showing up in the quarterly numbers, not just the fact that no one's ordering 2 x 4s on the
12:06 pm
internet. >> if you need advice for the house, you go to the store to get it. spring planting season, you're likely going to home depot to get it. they are maybe the most of the amazon-proofs out there. >> yes. but they are continue -- by the way, macy's is good too. they latched on the idea of being in communication with the customers, even when not in the store. moment depot does it better than most, frankly, and they do e-commerce, frankly, and a lot of heavy promoting on the internet and do a good job. innovator. >> online sales grew 21% in the quarter and spent a long time talking about that. they can grow online, but, obviously, they are more proofed than some of the other retailers. >> tjx, pete, you were here from the get-go as many of you were at the desk. comps up 7%, and that blew it away also. >> look in the earnings growth,
12:07 pm
10%, a home run. they have gone through a transition themselves and this is a company doing everything right. as a matter of fact, scott, they exfapanded themselves 5% more i terms of square footage, and yet they continue to grow. look what they are doing in europe, canada, and, obviously, the united states, it's tj maxx and home goods and marshalls. seeing the growth there. where are people willing to spend? for their homes in one way or another. >> people love home goods. >> their guidance is not like it was knock you on the floor amazing guidance. >> always conservativconservati. >> it was good enough, but a positive effect in the overall market. people talked about the particular selloff, sell in play may, go away for the summer,
12:08 pm
market down 10%. there's a kcomeback from apple, and then you see retailers, home depot, tjx, offering to the consumer and economy an argument that's maybe not as bearish as we talked about last week at having this broad negative -- >> tough to say that. >> why? >> here's why. they are in a completely different category. that changes dynamic -- >> what another category? >> home depot. >> they are spending money. >> home depot is not macy's. they are not in competition, joe. >> i'm not saying they are. >> you can't categorize -- >> a hundred bucks in the wallet, concern last week of what i was told is that consumer's not spending the hundred dollars. >> we knew that was wrong. >> that's the argument. he's not spending -- >> this does -- >> he's spending at home depot -- >> spending at lowe's -- >> tj maxx. >> it doesn't mean it makes the department stores looking up any better because that's the problem. >> no. >> that's part of the dynamic to understand. >> here's the one that said department stores out there are not as dead as they look. >> well -- >> or are they?
12:09 pm
>> no. they have secular issues for sure. their valuations have been -- they have been hammered, and they are hated, and everybody says they are getting amazoned, including me, but some companies are doing the right things. i think nordstrom spent a lot of money to get it right. they have a long way to go, but at 13 times forward estimates with returns strong as they are buying 3% of the shares each year, that's what you pick at for a longer term horizon. i said i think you can pick your spots, just be careful where you do it. >> the question, tjx at this level, trading 22, can you chase it? i love the name, but i'm out as it got to 70, and now here it is, over 78 today, and you look, go, they are doing everything right, do i own it? well, do ya? >> i sold two months ago too, at this level actually, and it fell a little bit, but not cheap
12:10 pm
enough to buy back in, but it's not a trend going away in terms of offprice, and they are leading. so impressive, every single concept, every region, two year stack basis accelerated. that's something you cannot ignore, and i think if this pulls back, i would absolutely pick at it. >> stock pulled back flawlessly. >> this is the last point. >> sorry. >> it's pulled back, it can be bought, and if it's above 79, resistance going back to march, mash much is triestraight to tr digits. >> i thought i was serious about that. this is what else is coming up on the halftime report. >> still ahead, the short seller who called the valeant reveals he's going long on the staff. levitt joins us exclusively to explain a change of heart and discuss the stock he thinks has even bigger problems. plus, our call of the day is? sell on intel. we'll debate it.
12:11 pm
and -- >> magic mirror on the wall, who is the fairest one of all? >> josh says he's found the best looking chart in the market right now. hale envail the sector he finds appealing these days. that's all coming up on "the halftime report." no one surface... no one speed... no one way of driving on each and every road. but there is one car that can conquer them all. the mercedes-benz c-class. five driving modes let you customize the steering, shift points, and suspension to fit the mood you're in... and the road you're on. the 2016 c-class. lease the c300 for $359 a month at your local mercedes-benz dealer.
12:12 pm
12:13 pm
valeant shares moving higher after andrew left said he's now long the stock. what makes the investment so
12:14 pm
intriguing is that mr. left was largely responsible for the big slide in the first place releasing a report last year questioning whether the company was the next enron. why the change of heart and position now, andrew left, joining us now in a cnbc exclusive interview. andrew, welcome back. >> hi, how are you today in. >> you said it was uninvestble. those were your words, what changed? >> uninvestble and untradeable are two different things. you could say it's uninvestble. it's cut back another 30%. i bought some stock, protected myself, and bought out of the money puts. i saw the news flow from valeant increasingly negative, and then they installed papa, they were not getting ready for bankruptcy. whether or not the stock stabilizes here seemed like something that could have. a decent proposition for
12:15 pm
stabilization, obviously, i don't believe valeant is going back to $60 a share. it was a trade i thought good, not to mention when you finish saying all the negativity come out on the stock. >> are you -- >> most importantly, it's a pear tree. listen, because i'm short melon. >> right. we'll get to that in a minute, but as it relates to valeant, are you an opportunist or believ believ believer? they are two different things, could be in the for the short term as a trader. >> well, listen, i mean, we're we're cnbc right here, all about calming the market on minute by minute. i'm not in the stock minute by minute, but opportunist? yeah. it was an opportunity to buy a stock hated by everyone at a price i thought attractive, and at the same time, i hedged myself by buying out of the money puts. i thought it was a good opportunity. would i hold this for the next 18 months? i would need more information on it, but i think right here, it's a good opportunity to buy some
12:16 pm
as a larger portfolio. >> i can't help but notice, andrew, pull the stock chart back up. as we have the conversation, a stock that was at the highest levels of the day immediately started to go lower when you said i don't think it's going back to $60, in fact, you pointed out quite clearly, i think, the market place is taking it as such that this is for a trade. that you don't think, perhaps, the worst is over for valeant despite the fact that the board, and joe's in the driver's seat. >> saying the worst is over and saying $60 are completely two different things, scott. the worst can be over and stock go back to 40 bucks, still a good rate of appreciation from here. two different arguments. >> do you think the fears, though, about valeant at this point, $31 billion in debt, for example, those sorts of facts, do you think that's overblown at this point? >> i need more information from
12:17 pm
the company. coming to the job, not bringing in nip who looks like they prepare for bankruptcy could be conceived as a positive. i don't think anyone's going to happen. i don't believe the company is going to go under in the next 12 months. now, what plays out over time? a lot depends on how serious the government is, on the insurance companies, and pushback on insurance and so forth. >> you are long valeant now -- short, you take it as you are short in the same size of position you had before? not covered it all there? >> i really don't discuss the size of the position, but it's simple. if, in fact, valeant goes lower, ma mallincrot goes lower. the problems are here, then their problems are here. you know, everyone night sit
12:18 pm
around, talk about increasing prices, but we never discuss the efficacy of them. 40% of the income not tested, and i said it before, and it got to a point, actually, i figured i'm going to put my money where my mouth is, and i got $1 million check, cashier's check, to the ms society, and this is my money, not the money of my hedge fund or investers, and all i want mallinckrodt to do is test the drug, test it against the same synthetic you bought to put on a shelf. i can tell you one thing, if valeant did what kmeemallinckro doing, they would have water boarded him. this is really bad. for claire, the way she talked to bill ackman and the way she talked to pier son, all she had to do was walk across st. louis,
12:19 pm
nine miles away from her office, and she would find mallinckrodt and find the real offenders of the system. >> on what basis do you have to make the suggestion that the drug mallinckrodt uses, doesn't work? the fda approved it for 13 different uses. what studies have you looked at? >> scott, scott, how about this? i'll give you one better. what studies have i not looked at? every major clinical journal discussed that this has no proper clinical test. this was approved as an orphan drug 50 years ago where you did not have a prove that a drug worked. you had to prove that a drug was safe. those are two different things. it comes out weekly. as a matter of fact, three years ago, when the insurance policy companies had pushback on
12:20 pm
mallinckrodt, it was not because of the priesh, even though we talk about a drug that's $36,000 a vile. used to be under a thousand. it's $36,000. insurance policy companies said -- scott, very important, we should practice evidence based medicine, there is no evidence based medicine here. >> i will give you the fact that the approval was grandfathered in a long time ago when the fda acted in another way in which it does now. the fact of the matter is that the fda approved use for 13 doimpbt thing, and hospitals and doctors continue to prescribe it and use it. >> why hospitals prescribe it is a complete different argument. i think i was on the -- not your show, but cnbc, with the ceo, and i asked them about how many of these dinners he was buying people at olive garden to get this prescribed, not to mention if you look at the number of
12:21 pm
honors they give out to doctors. why it's prescribed is two different things. it's a simple thing. everyone made valeant the poster child of what's wrong with the american pharmaceutical industry. so bad, valeant is thinking about changing their names right now because it's become a bad word. >> you're talking about two companies -- >> what i say before anyone looks at that, the real offender, e and it's amazing that mallinckrodt donated money to the mckaskill's campaign. if she's serious on cracking down, you have to look no further than across your city and look at mallinckrodt. >> they are two entirely different companies. hillary clinton, the presumptive democratic nominee for president targeted valeant in some of her ads. it is, by all indications, and fairly characterized that it has been the poster child of the drug pricing issue.
12:22 pm
they took their numbers -- >> they -- >> let me finish. they took the numbers down. mallinckrodt for two straight quarters has beaten and raised, not having the business issues that valeant has. why do they have to be so linked in your mind? >> exactly. that's why every day you have to imagine they go to work, hoping he doesn't pick up the newspaper and people actually realize what the business model is and discuss it. valeant is not just the poster child. valeant has become the pinatta for it all. and one day, if people understand that mallinckrodt is not clumped in as a company that raises prices, but, rather, it's a company that raises prices, bought competition to put on a shelf, and then is going -- never done a proper clinical trial, once people realize that, then hopefully this will become the poster child, and when that happens, unlike the thousands of products that valeant has that becomes more difficult to actually analyze the business
12:23 pm
going forward, mallinckrodt, everything's based on two drugs. the main one is over 45% of the income. >> let me finish by asking you one more question. what do you say to those who say that specialty pharma in general, valeant, mallinckrodt, those embroiled in the issue of drug pricing and the like, that that's a tinderbox right now, and you're the guy running around with the match, and that's why stocks like this are and continue to be under pressure. how do you respond to that? >> respond to the fact that we have a country paying a billion dollars a year for $36,000 a vile for a drug that's 50 years old and never been tested. a tinderbox and match means for someone in the tinderbox did nothing wrong and the match stirs things up. to stir things up for the sake of stirring things up is minimizing the importance of
12:24 pm
rising price of pharmaceuticals and people profiting off our system unfairly. >> well, i think the issue, look, has been raised on capitol hill. people like bill ackman sat on this set, and admitted the fact some of the prices raised at valeant may be reversed, and they may reduce prices on drugs in question. >> by the way, it's a simple thing. last ly if they reduce the pric to $17,000, which is still ridiculous, and all the sudden prescriptions fall off between 30 and 40% and go back to the initial indications of five years ago, the company could be a donut. that's it. very simple. and there's no reason why valeant should have to reduce pricing and mallinckrodt doesn't. that's it. do your testing, make sure the drug works, fairly price it to america, and see where the stock price is. >> all right.
12:25 pm
we'll see where that check that you brought with you goes. >> i hope -- i want -- i would like to give it away. >> andrew left, we appreciate the time. i should let you know, we reached out to mallinckrodt for comment, and they wanted to siosee what he had to say before responding, and if they respond, you'll be the first to know as soon as we hear, if we do, from that company. how do you proceed with this? he sees an opportunity in valeant. >> yeah. >> guys? >> i think people see there's aspects of it that make some sense on why there's value there, scott, and with the value, you have to understand that he's hedging himself a little bit by going out into the future somewhere. he won't say where and how far out or the strike, but he's buying protection, scott, because he's not 100% belief that this company is completely turned around. a great run to the downside. >> i thought the stock move was telling in the conversation saying, look, it's not going
12:26 pm
back to 60, the stock immediately went from the highs of the day, starting to tick lower. is there opportunity in valeant? >> no clue. sometimes that's the best trade. no clue. it's too volatile. the story is too uncertain. there's not enough clarity. we hear from ackman for an hour. time will tell. >> it's interesting there's a new ceo, right, a lot of assets that could possibly be sold, spun off, whatever it is, but you don't know. this whole group has been annihilated, and the way i view it is like a better bet at this point given the risk-reward, down 27% from the high, it's growing 10%, trading at 13 times forward with a pipeline of 17 products in the pipeline, and there's a lot down the pipe, so i think, like, you can pick your spots in this space. >> you go into this name short, you better keep in mind it's retested that low 24, 25 area, with much less force to the
12:27 pm
downside. much less selling the second time it got to that level, and subsequently down. there's a ton of shorts in here. loads of amateur shorts getting ideas from the magazine articles and tv. they will be the first to cover, take the stock up ten points on zero fundamental change whatsoever. i think it's probably more dangerous short than long. in the short term, long term, there's 6,000 publicly traded names. i'm not sure this is the one. >> i also -- he's not on an island so to speak when it comes to the issue of drug pricing related to mallinckrodt. people vfocus on valeant, as twitter rings out today from our pal, greenberg, saying mallinckrodt should have been the poster child. >> less well known, doesn't have a celebrity hedge fund guy involved in it. >> right. >> did not have the stock price appreciations like valeant had. was not a hedge fund hotel, much less well-known, and the other
12:28 pm
company got raked over the coals first. >> right. >> doesn't mean it can't happen to both, though. >> pandora on the move after an activist invester announces he's shaking things up at the streaming music company. we'll debate the stock coming up, and a bullish call on a miner. the gold trade crowded? nothing unleashes power... quite like the human foot. introducing the 255 horsepower lexus is 300 all-wheel-drive. with twenty-five percent more base horsepower. once driven, there's no going back.
12:29 pm
12:30 pm
12:31 pm
welcome back to the halftime report, going to sharon now who has the latest headlines for us. >> reporter: here's what's happening at this hour. the national transportation safety board holding a hearing in washington, d.c. to announce probable cause of last year's amtrak train crash in philadelphia. it said the engineer of the train went from, quote, distraction to disaster in a matter of seconds because he was so focused on radio traffic about a commuter train that had been hit by a rock. the u.s. has eased sanctions on myanmar to support political reforms and economic growth in the country. the moves include easing reinstructions on the country's financial institutions. john kerry will visit the nation next week. the defense department has released videos showing air strikes on isis targets in iraq and syria last month. isis has not gained significant ground since it took the iraq
12:32 pm
city a year ago, which it then lost in december. planes all american pipeline says a california grand jury indicted the company and one of its employees in connection with a pipeline break that spilled more than 100,000 gallons of oil along the santa barbara coast a year ago. the indictment contains 46 charges of state law violations. that's the update at this hour, back to you, scott. >> thank you so much. it's a power play for pandora, the stock moves higher after disclosing 10% stake and urged the company to pursue a sale. guys, what do you think about this? josh, i know you don't like the stock, at least you haven't. >> yeah. >> but now shaking things up. >> i love the product. it's one of those, like, great product, users love it. but it's just been a terrible stock because nobody really makes money in streaming music, spotify is bigger than pandora, doesn't make money, apple fails there. it's not a business.
12:33 pm
i agree that it should be sold, and that it's user base, and it's advertising capability specifically local do have value to a buyer, so i'm not saying nobody can make money doing it, but pandora as a stand alone is not great to be invested in. >> should you buy it on the prospects, pete, of a deal? you said sometimes stocks are good. >> right, yeah. >> are good to buy in anticipation of m&a. >> if a deal doesn't happen, suddenly that stock tests new lows. i think what we're seeing today, scott, based on this deal -- at least the anger and the fact that an inside folk wants to make it happen with a 10% stake, look at the option activity seen in there today, so people are hoping, and that's hope, so i'm not going to be in the business. >> i wonner who you think of to be a potential suitor. >> google.
12:34 pm
>> google, amazon, apple. >> google play, absorb it, take the user bit. what they are able to do pretty well is their biggest achilles heel. those paying to pandora, i'm one of them, are not shown ads, so i never hear ads, but i'm the person the advertisers want to reach because i buy stuff. the free users hear ads, and nobody wants to reach them because they are deadbeats, so i think that's, like, a terrible business model, so somebody else needs to take on this user base and figure out another way to monetize it. >> over to dom chu. >> the shares have recovered a bit. they took a leg lower just in the last five minutes or so here, and this after ratings agency standard and poor, are downgrading icon enterprise, lp, that particular issue credit rating, moving from a bbb minus
12:35 pm
rating to a bb plus. that moves it into the noninvestment grade or junk status in terms of the credit rating scheme. the reasons behind it include their loan to value ratio remains a key threshold 45%, cited previously, in order for a downgrade and say key portfolio companies share price performance within the company remained weak so far in 2016 and performance at ieps investment segment negative again in the first quarter. they are lowering the credit rating there, saying the outlook now moved to stable, so ie iep icahn publicly traded vehicle for the investments took a leg lower, but, again, they are now just ticking positive, so, again, the short move lower, about 1 .5% to 2% of the low is gaining ground on this downgrade. scott, back to you. >> this is the publicly traded holding company that mr. icahn
12:36 pm
has, first downgraded in the middle of february, if i recall. it's not entirely a surprise. >> no. >> given movement back in february, but it just shows you sort of how the portfolio has dope, obviously, with exposure to energy and trade that had gone the other way. >> and to your point, they had put some criteria in place the last time around about whether or not they would downgrade if certain things were to or were not to happen. in this case here, they cite prominently up top about the loan to value ratio among the company, and that was what they previously cited for downgrade as well, again, perhaps, not a huge surprise, but moved the stock beefly intraday, now recovering losses, scott, over to you. >> thank you so much. the breakdown with josh brown, the charge of telling josh to buy in the market you overlooked. he'll explain what it is next. they found out who's been hacking into our network.
12:37 pm
12:38 pm
12:39 pm
who? guess. i don't know, some kids in a basement? you watch too many movies. who? a small business in china. a business? they work nine to five. they take lunch hours. like a job? like a job. we tracked them. how did we do that? we have some new guys defending our network. new guys? well, they're not that new. they've been defending things for a long time. [ digital typewriting ] it's not just security. it's defense. bae systems. there he is, the segment is called "the breakdown with josh brown." this is about the charts? >> all about the charts. well, i want to point out a stealth bull market that really, we never talk about, it's surprising almost, and no one talks about it.
12:40 pm
it's just been incredible, defense stocks. so let me just show you defense in aerospace etf. there are two of them. this is the bigger one. ita. gives you a sense, this is a sector that's basically at all-time record highs issue and most of the constituents in the group, i'll show you in a sec, have had a pretty good year. to the next chart here. so talk about honeywell, much more in the aerospace side, we'll talk about ratheon. >> lockheed? >> a good one too, lmt. there's honeywell. look at that, clear breakout, nowhere near moving average, took out congestion from this spring, and lockheed on the defense side, but all of these companies are responding to one very simple thing, defense spending globally is on the rise. defense spending in the u.s. just had its first positive year of growth since 2011. all that sequestering stuff is
12:41 pm
over. a trillion spent last year. that number's going north. these companies, u.s. based, are less dependent on u.s. government defense spending. asian and middle east spending is up. think of a company, rtn, one in three dollars comes to the company internationally, and that's only going to grow. it's a great sector. stocks breaking out, little resistan resistance. continue to roll. >> to your point, honeywell up 14 -- >> explosive. >> just the three month period and one year gapes are impressive. >> trump or hillary clinton, she's a hawk, he's a wild card, between the two of them, they both do well. it's not an either/or in the election. >> anyone own the stocks? >> yes. >> absolutely. it's a fundamental story, too,
12:42 pm
and josh highlights turn seen in defense spending domestically and overseas, cyber security, diversifying businesses as well. >> drones. >> and a lot of times things seem so obvious that they are difficult to put the trade on, but this is one you clearly buy high because anticipation as you sell in a later date and higher price, certainly as josh correctly identifies, whoever comes into the white house, defense spending increases. >> we have to split, but you own rtn. gambling globally, a bold prediction on "mad money," so is it time to be all in on casino stocks? that's coming up. crude closer to 50 bucks, but there's many reasons to be bracing for a pullback. what are they? we'll go to the future bits to find out. >> "the halftime" report with scott walker is the place for interviews. real money. >> we are short tesla and solar city.
12:43 pm
>> real debates. >> people think globalization hurt business. it's not. it's technology that hurt businesses. >> if you can't charge hundreds of thousands of dollars a year, there will be no drugs. >> i love this show. i just tweet about the show, i'm on the show. this is the greatest moment of my life! "the halftime report" weekdays at noon eastern 7. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ don't put off checking out your medicare options until 65. now is a good time to get the ball rolling. medicare only covers about eighty percent of
12:44 pm
part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in. like all standardized medicare supplement insurance plans, they could help save you in out-of-pocket medical costs. taking informed steps really makes a difference later. that's what it means to go long™. call now and request this free decision guide and explore the range of aarp medicare supplement plans. all plans like these let you choose any doctor or hospital that accepts medicare patients. these are the only medicare supplement insurance plans endorsed by aarp. call now and request your free decision guide... and start gathering the information you need to help you go long™.
12:45 pm
coming up on "power lunch" 14 minutes away, the good, the
12:46 pm
bad, and the ugly. the three sectors to watch in this market right now, plus, rebuilding america's infrastructure, what needs to be done, how to get it done, and the best way for investors to make money from it at the same time. what is the biggest problem with housing right now? the ceo of lennar tells us, joining us for an exclusive interview on "power lunch," and now back to you, scott. >> see you in 15 minutes or so. talk about crude oil above $48 in today's session, up nearly 20% in the last month alone, so is this the start of a longer term rally or just a short term bounce, we have answers at the imex. >> good afternoon, scott, one of the reasons we're over $48 a barrel is because of the disruptions seen around the world. i'll walk through them. we are concerned about outages from the wildfire in canada. we're worrying about nigeria and venezuela as well and rumors in the market that russia may cut production because of oil
12:47 pm
production taxes that have not been eased. at the same time, you got to balance this out with those countries that are actually ramping production. look at this map. the iraqis, iranians, libyans, and the united states. we could see shale produce irs start to ramp up production as oil prices go higher because they are more profitable. how does it balance out. the factors are a wild card in the marketplace, but there's other downside risks to be aware of. seasonality capping demand, something traders are concerned about saying it's a summer bump up. also, the dollar could be an issue, what the fed decides to do, and if we do see a rate hike, we get a stronger dlollar. that's a problem for crude prices. opec, we have a meeting with other producers invited to pick up where we left off. god knows what happens there. people think there's a short term bounce in oil and then we go lower from here, and anthony, what say you? >> yeah, jackie, exactly.
12:48 pm
i think a summer bounce is more what i call it. definitely the seasonal factors drive oil prices right now as well as everything you mentioned before. i'm a buyer. at least for the next couple months. we can test that 50 and $55 with geopolitical issues. >> scott, what are the levels you are watching? >> $50 marketplace likes nice round numbers, 45 is the bottom of the channel we've been in. the strong number is 70, we're a hair from being overbought. >> a live show at 1:00 p.m. eastern, more on the crude story. see you then, scott. >> we'll be there, thank you so much. joe, going to you. >> yep. >> the one who made the call. >> yeah? >> what happens now. pushing on 50. over 50, do you go to 55 like the traders said? >> no. who knows. >> how significant is 50, though? how significant is 50? the focus has to be on the energy names. i think that is the most important thing, and what --
12:49 pm
>> you say them you trade them. >> what i emphasized over the last couple days is navigating from high energy names over to defensive names. xle names are the right names to be in, large integrated names, if you have exposure, that's how to have the energy trade. you're coming at me from this with the frame work of that i made a bearish call. >> no. remember where i'm coming from, ringing the register. >> right. >> on energy from a risk to rewards standpoint is the right thing to do. >> a great place to be. ringing register with gains, that's a great place to be, you can do that while making a bearish call. you think oil's coming down? >> i'm not thinking it's a bearish call. i'm telling you that from a risk-reward standpoint, where it's currently priced now -- listen, i bought xle puts for a week and a half and recognized that's not the right trade. i got out. my energy exposure right now is limited versus where it was three months ago.
12:50 pm
again, it's risk versus reward. i'm not saying price of oil falls. >> ringing the register is better than ringing your hands. i'll give you that. i'll give you that. >> okay. coming up,that. coming up, chip wrecked, the analysts -- >> analysts slapped to sell on intel. already snorted once on the air. >> well, you made me snort, man. here at td ameritrade, they work hard. wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: 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. td ameritrade.
12:51 pm
with usaa is awesome. homeowners insurance life insurance automobile insurance i spent 20 years active duty they still refer to me as "gunnery sergeant" when i call being a usaa member because of my service in the military to pass that on to my kids something that makes me happy my name is roger zapata and i'm a usaa member for life. usaa. we know what it means to serve. get an insurance quote and see why 92% of our members plan to stay for life.
12:52 pm
12:53 pm
12:54 pm
12:55 pm
welcome back to "the halftime report. request ""power lunch" gets ready to come on the air, shares of intel under pressure this year, down 12%.
12:56 pm
clsa thinks the company's troubles are far from over, that firm initiating the stock with an underperform rating. cla's chris caso joins us now. our call of the day. chris, good to have you. >> good afternoon. thanks for having me. >> why the sell? why throw this thing in the can? >> underperform rating at csla it's a relative rating so the stock is in a pretty tight trading range right now. you know, the problem with intel is they are a company in transition now so about more than half of their revenue comes from the pc market. it's no surprise that people -- no surprise to management that that is in secular decline, but as they grow into other market segments and some of the things they are looking for, internet of things and new memory technology and cloud servers, we think they will have to compete on a more level playing field, and it's just really hard to replicate the dominance that they have in pc and the competitive advantage that they have there. >> do you think they get headwinds, the kind from other companies that get such a large
12:57 pm
percentage of their revenues overseas? >> for intel and for the semiconductor industry in general, what's more important is the price of the end goods. so what happens if we've seen the fx headwinds, the price of say a pc or smartphone or local currency in some place like russia has gotten very expensive so for the semi companies it's been more about a unit impact than a direct currency tranceational impact, but if that changes, that will certainly be a benefit to probably the whole industry, not just intel. >> i wonder what, you know, you think about where enterprise is right now. the juniper ceo was on exclusively in the show prior to ours. who had some pretty optimistic things to say about where enterprise is going to head over the remainder of the year after there were some real concerns over that very issue? >> you know, that's right. i think for intel specifically, and tying that back to them specifically. >> sure. >> when you look at the part of the business tied to enterprise service, somewhere around 10% to 15% of renew. that's also been an area that's been difficult, but it's also
12:58 pm
tied to the migration to the cloud so cloud servers have been very strong, but i think that actually has a bit african ballistic impact on the enterprise server, even if enterprise tends to grow, i think more spending actually happens in the cloud which benefits intel, but if also hurts the enterprise part of their business. >> chris, i appreciate you coming on today. >> thank you. >> chris caso with clsa. markets close in three hours. let's finish this up and talk about the home builders. our stock desk is pointing out they are near the highs of the session. data out today. do they seem to go very far? >> like intel, like you can take a look at where polti is today and go back a month. doesn't seem like you'd get the kind of movement you would see, especially when they give out great numbers. we don't see the numbers we like to see. >> so that's a no? >> that's a no. >> push and pull, tightening employment market is good. the atlanta fed's wage tracker
12:59 pm
which is probably more accurate than what the bls puts out in terms of wages suggests the fastest year over year wage growth since 2009 and not just for college graduates. that's starting to spread to lower strata of the wage market, but then you have the possibility of rates going up, mortgages being a little bit tougher to attain, not that they are easy now, and that tug-of-war keeps these stocks going nowhere, so maybe there's some stosh-specific tough happening but overall not a great place to be. >> one of the confounding things. you look at you're at peak auto and having that conversation you're saying auto has been strong and yet you're wondering why auto stocks haven't been that well. the house market has been strong, but looking across the spectrum, bieser, go down the list, lennar, house healed. >> formation is the key and it's not happening fast enough. >> and the profitability has been disappointing, and if you're going to play it -- the way i like to play it through
1:00 pm
the materials coming. i still like louisiana pacific, the oscb prices are firming. >> you like the parts over the automakers as well? >> i do. that's kind. way i play it. >> interesting way to look at it? joe? >> i like the home builders and think they could move higher from here especially if we get clarity on rates. >> guys, good stuff. see you tomorrow. "power" starts right now. ♪ welcome to "power lunch" where if the music didn't give it away we are ripping a page right out of clint eastwood's playbook talking the good, the bad and the ugly, but it's not a movie. all about your money and what the right moves are. along with melissa, michelle and tyler, i'm brian sullivan and thanks for riding along with us today. we have come on the air as stocks are hitting session lotion right now. dow, s&p and nasdaq are losing steam. the dow down exactly 100 points. we begin this tuesday ride with some very interesting things happening in the wild west. stock market, so let's get to them and what


info Stream Only

Uploaded by TV Archive on