tv Fast Money Halftime Report CNBC June 8, 2016 12:00pm-1:01pm EDT
also recognized the success of indian americans scientists and doctors and engineers, and also a special shout out to the spelling beecham pi yons which i enj enjoyed as well. thank you. >> and seema, thank you for t t that. see ma moody there on capitol hill. >> and so we will see where that takes us this afternoon. over to scott wapner and the half. ♪ all right. carl, thank you so much. welcome to "halftime report." i'm scott wapner, and the big trade is power surge and what the move in oil means for your money, as stocks are marching to new highs. joe terranova and josh brown, and jon and pete najarian joining us. and with the stocks going higher lifted by another jump in crude, and energy is the biggest performing sector year today, and why we are here, doc, because we are calling it a power surge because over the last month wti is up 14.5%, and
the energy is up over the last month or three months, and that is why we are here, right? >> it is a big portion of why we are here, and of course, a lot of folks have mischaracterized how much the american public would save if you have basically took a look at the gasoline, judge, and figured that you would average family consumes 600 gallons through the vehicles and so forth through the year, and gasoline prices are up a dollar from the lows, and in m some parts of the country, they are, and that is $600 in additional what would have are been savings in the year earlier in january and now the savings is -- >> it still goes up, and you buy the stocks? >> no, they are topping out here, and many of the oil e&p plays are topping out. one of them that i added to the portfolio that i will talk about la later that has legs, but e&ps is topped out. >> and who is on the other side? >> energy itself? >> yes. >>n't i don't believe we are
topped out for energy itself, but what has happened in the beginning is that money managers have come in underweight and playing catchup. and josh have stayed with the xle and right trade, and i might have gotten out too soon, but i believed in the bottom in februa february. >> you naught the air was thin up where we were at that point, and a super charged comeback sips the february bottom. >> i thought that it made since to take profits on a trade that was significant one. i think that energy needs to be included in your portfolio for the remainder of the year, and overall, looking at the s and the p and the rally right now, all of the asset classes are performing well, a and this is the investor, and the money manager, and noefs times, they are looking to align themselves with the momentum, and the hot trends and the hot trade, and you can't make that distinguish right now in any sector or asset class, and what is the hot sector or the asset class running away right now, and good dispersion, a good for the market. >> and i go back to the conversation that the big money,
the smart money with a tough time in the market, and who saw this coming? who said that at the end of or mid-february oil would have nearly double d? it is up more than 90% since then. >> and at loft people are on the wrong side of it, and now you doubled, and those stocks have run are, and energy itself since the lows are up, and the sector up 27%. >> well, i think that, i think it is worth taking a step forward and not just that the energy prices have come back or the energy stocks have done w l well, because they have clearly, and the second derivative of the discussion is what does that mean overall, and it means some pretty good things for the investor, and the first is that it looks like we may not have this commodity-driven mass wave of bankruptcies that we were all talking about in january and february or maybe it is put off a little or maybe a little bit more narrowly focused than what it otherwise could have been. >> and now a commodity-wave of inflationary pressures.
>> and the second thing is more e key for sentiment more than anything else, the emerging markets are coming back, and it is becoming breathtaking, and the speed with which these names and sectors and countries have been rebought by people who had utterly thrown in the towel is absolutely part of the energy/dollar discussion. talk about the eem, and up huge off of the lows, and up 8% year-to-date, and brazil specifically up 4.2% today, and up 40% year to date, and who was overweight in brazil in january as we rolled into 2016, so it is crazy development. >> and that is what people have missed and now, pete, what do you do? >> well, trades, and you use the same word, scott, not investments, but trades. has brazil made some incredible turn? i don't think, so and i use some ewz and i'm in there for the trade and the options and not in the actual ewz in terms of the equity, but the options and the derivatives side of the option, and you look at how oil is trading and looking at this
higher lows, and we are seeing it ratchet it up higher and yesterday getting through 50 and now 51 and looking at xle and how tech nick areally it has traded above the two-day average and held it extremely well, and scott, what is interesting and worth pointing out, take a look at the the trash names and what i mean by that leverage. >> and you have been talking about those names for at least a month. >> and yes, yesterday i got lucky and got into the chesapeake and saw some option paper there, and going into the names that were given up for because of the leverage and made since when the oil was under $30, but here, you are getting a little revival, and seeing the guys moving to the upside, but there much more behind those right now than exxon and chevron and conoco though they have had a great run. >> and can we declare the rotation real, and i mean the rotation from the utilities and the telecoms and the staples and things that worked before and now into the energy, materials and financials, staying power? >> well, it is a temporary rotation. >> that is what i am asking.
>> it is rotating week to week. >> why temporary? >> well, collectively where we sit right now in june, everything kind of looks good. so it is not a matter of there's a sector right now that is significantly underperforming around and the financials are flat for the year, and year-to-date, but josh tweeted out in the last ten yearsb the financials are down, and they have underperform and they will continue to underperform until the environment is better, but what contributes to the conversation is the federal reserve. what are they going to do? how do they respond to the prices, and the improvement of the emerging markets, and these were all of the concerns of the federal reserve, and we have to look at it right now. >> and the markets themselves have, and you are tell thing me that brazil comeback matches what the stock market there has done? no way. >> and the fundamentals don't match it, but we are seeing a recovery in the chinese economy, and healing in the emerging markets and the credit markets and the federal reserve runs the risk here of creating an asset bubble in equities themselves if
they do not do what they want to do which is to give more people more points. >> and we have been talking about that for months if not years. and now, marching to new highs while ignoring potential concerns including the upcoming election. hillary clinton becoming the democratic nominee, and some of the markets feel that the market will fare better under a clinton ed administration, and bob princeton is joining us. welcome back. and we will do politics in a moment, but weigh in on the conversation that we are having, and the march to the new highs and what is getting us there, and whether it has staying power? >> i think it does, and we did not talk about the technicals a whole lot, but the advance to climb line is improving and the small is beating big, and the kinds othings you want to see if a market is broadening out, and i think that the new high will convert some of the massive amount of cash, and we will get a little bit of the rally, and
what has to happen that post that is earnings to back it up which we could get if oil stays up, and the dollar is down, and the isms and the pmis remain okay. >> and you said the market widening out, and so in other words, the breadth is much better this time around, if you will. >> absolutely. remember how sick breadth was and the deterioration in it as the market struggled over the last 18 month, and we are getting some brooendi ibroadeni that is a good indication in my view. >> go trump/clinton, and why would a hillary clinton presidency be better for the stock market? h >> two reasons, and is noitt that hillary is great necessarily, but two reasons to worry about donald trump. one, uncertainty. markets hate uncertainty, and we don't know what the guy's policies are, and maybe by november we will, but we don't at the moment, and we have had a lot of the back and forth, and the other are reason is that he has been are pretty clear, i want to start a trade war with china and mexico and a few
places, and we know that trade wars are not good for economic growth, and therefore not good for the markets, and those are the two things that have me concerned about trump at this juncture. >> and hang on a second, but the political rhetoric, and political reality, bob, are two different things though, wouldn't you agree? >> absolutely. maybe we are not going to be starting a trade war with those places, and maybe we will back off that, and then, i could have a different viewpoint, but trying to figure out what they are saying versus what they are going to do, and look, if it is a hillary clinton administration, and the democratic congress which is only going to happen if hillary won by a landslide which is not a zero probability, the markets would react negatively to that as well. so the configuration underneath the president is clearly important as well. >> and bob, real quick, jon najarian here, and the issue of the what the next president says now, he or she will do and what they can do as far as the trade war or hillary clinton going
after the drug companies and so forth, and obviously, they have the bully pulpit at that point, and they can talk, and jawbone a lot, but can they really get legislation through that could actually be that trade war in trump's case or be the detriment to the drug companies and to american evolution of entrepreneurial spirit and so forth? is that something that you worry about? >> that is a great question. and right question, no question that that is a big issue. on the trade, the presidents have more power than at least i thought until we did some research on it. they can do a lot with congress just complaining as opposed to needing approval. drug pricing is a different story, because it needs legislation, and depends on the issue, i agree. >> and bob, it is joe. clearly, when it comes to the reality and rhetoric, both of the potential candidates could be guilty of osome of it, but specific policies donald trump has talked about the deficit spending and the infrastructure
itself and something that this country really needs, and why not the possibility that given most likely a republican congress of him being donald the builder to go out the build the infrastructure in the country to get the economy to instill itself? >> well, it would be good to have smart fiscal policy, we could add a half a point of gdp growth, and roll back some of the regulation, and maybe another half point which could have us growing at 3 and instead of two, and that markets would like that, so i wo wonn't dismi that possibility. >> bob, appreciate the time, and lastly on the markets, june off of the table and july more likely? >> i think that june is off of the table given the visibility of the employment report, and i hope they go in july, they have to get going, and remember, they are at 25 basis points, and not 1.5 to 1.75, but it is 25 going to 50. get on wit. >> thank you, bob doll with
nuve nuveen. here is what is to come on the "halftime report." and still, the analyst who got it right on valeant with a new call today, and should you have faith on the turnaround story or not? we will debate it. and the ceo of one of the biggest trading firms in the world, and doug cifu of virtu. >> and when pigs fly. >> you could use bacon to make bacon and tomato sandwich. >> and we are heading to the pork world to look at one tof te most profitable trades coming up on the "halftime report."
back to "halftime are report" and here is the analyst who has called valeant right every time. and going 50% for wells fargo by cutting the price target saying that things can get worse. and it is our call of the day, and david joining us from new york city. and thank you, david. welcome back. and you were shocked by what you had the other day with valeant. >> and just when we expect everything bad, they surprise to us the negative. >> they kitchen sinked it, and what is wrong with that narrative? >> well, sometimes you kitchen sink it, and bad things happen.
what is happen iing here is a l of things that people did not expect a day or two ago have emerged like a wall green deal they are not making money on, and the kitchen sink things, and you can kitchen sink it from the revenue standpoint, and maybe, and you might say, here is some expenses that we will have that they don't end up having, and frankly, products underperforming, and so that the product sales are not going to be going where people expect, and cash flow is not coming in where people expect, and things are worse than people anticipated a couple of days ago sglcht and wou >> would joe papa take the head of the "titanic"? >> people do it all of the time. >> did joe make a mistake coming to this company? >> well, joe i spoke to him yesterday is that he said that valeant ruined the reputation of the entire drug industry, and if he can turn it around, it helps
the industry, but i say, good luck with that, and this is not a one person job, but a culture negative for a while, and also, the products are just not selling, and the deal they did with walgreens is worse than anybody expected. >> what are you expecting for this company? >> well, so, one of the things that we did is that we looked at how much cash they are generating and looked forward and looked at the debt due. we don't know if they can actually have enough cash to pay the due that is due in 2020. so what happens when a company doesn't have enough cash to pay the debts, and they either go reorganization or sell the assets to pay the debt. well, if you are going to start selling the assets, then the earnings numbers come down, and the equity holder, the equities numbers come down, and the valuation comes down, so it is a slippery slope. >> you are saying that the bankruptcy re-org is potentially in the cards. >> potentially in the cards, and they will have other options, selling the assets or getting a additional loans or waivers from the debt holders, but we have spoken to a number of the debt
holders, and to you were and you owed across the maturities and debt owed in 2020, 2023, and you think that somebody cannot eventually pay you, you are g going to be pushing it out or say pay me more or give me in the money, and you sell the assets and give me the proceeds from that, and guess what, the equity hold ser last in line in that list. >> and so, bill ackman has sat right here on this set, and we have had a conversation about the asset sales, and he said no plan plans at all to sell core assets, but is it ultimately going to be coming down to that move? >> yes, of course. nobody who is going to be selling a cores asset says, listen, fire sale and we are selling it, because they have to sell core assets, and the first few are small, and $100 million product, and that is going to get the market, they hope, market excited a little bit. but i think that when people are looking at the size of the debt, and $31 billion, that is -- $32
billion, it is a little bit too much for a $1,100 million or $200 million sale, and there were a lot of smart investors who said it is a bargain at $200, and at $150 and $100, and so whether it is a noted investor or not, i look at the numbers and i make my own decision. >> and anybody to come in to take the company out at a premium? >> no. who wants the headaches of all of the prices, the irs investigation, and s.e.c. investigations, and a whole bunch of products that were just propped up with high prices. so, no. if it does not make sense from the cash flow standpoint from the debt holders, i don't see anybody stepping in to buy the company. >> dave, congratulations on a great call, but i will push back on the things can get worse, because as you say, in all likelihood, we will see the sales regardless of what mr. ackman says, but if we see them, cou couldn't the sales be better, because like you say, it is not a fire sale, because they may have a little bit more time, and because the market may be in a
better place going forward, and couldn't that at least be one scenario to play out for them? >> okay. imagine a consumer has a big mortgage that they cannot afford, and credit card debt they can't afford, and then they start to sell their furniture, and you say, well, look, that is good. at least it pushes out the debt, and you won't get a foreclosure right away, and that is what valeant is in store for. you will see the asset sales, and realize that the ebida comes down, and so, they have to sell larger thing, and asset sales could get people excited just like a new ceo could, but that is about $10 ago. >> and david, we continue the follow the story and the research as well. thank you for being here. >> thank you. >> wells fargo's david maris. and lulu lemon on the mend, and they are hitting a 52-week high, and what do you do with that trade? we will debate it. and the gold miners are back
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significant stake in that pulte group, and now, doc, they are saying that more changes are likely and expect deutsche bank and meaningful strategic shifts ov over to the next monthses, and the stock is at at a high. >> yes, and the gentleman talking about it on the show, bill, he is pleased by the endorsement of perhaps some changes for pulte. still under 5% as far as we know, but it could change at any time, judge. >> and what do you do with the stock? >> well, i -- >> do you buy it on the the expectation that singer is going to be shaking it up more? >> well, it is a nice ride in the month of may up 5%, and it looks like it is going to contin continue. >> all right. according to reuters, the lending club reneault leclaunch
is talking about lending club. >> well, it is revolutionary, and to lend to people with bad credits, butt is dangerous even at this level. >> and now sh, on the upgrade c the steel dynamics go up? >> well, again, these are for the trades that if you are going to pick one, pick steel dynamics, and u.s.-centrist focus, and globally, we have not worked off the surplus. >> and lululemon? >> well, they missed on the earnings, but everything else is unbelievable. if you look at the revenues up 1 17%, and this is a company that is clicking right now, and the management is on top of the inventory as well adds going in -- as well as going into the summer, and i know that the former ceo is not happy about how things are going, and he is
wrong, because the stock is up 27%, and they are moving to pit behind them. >> and the stocks are ramping here. >> and the inventories that you touched on, and that is where the narrative is that the inventories are correct iing to the level of investor. >> yes, they reached the area they need to be and the efficiency of the company is much better and the fact that they are opening up more stores, and the same-store sales were strong, and everything is working for lulu. >> and now, the biggest high frequency trading firm in the world is going to join us, the ceo, doug cifu, and also, we have talked about oil being a big winner, but the second biggest oil commodity can be found down on the farm. we are going live to the world pork expo, and how to profit from it straight ahead. i was working in the yard, my chest started hurting
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was the chairman of chesapeake oil. maria sharapova has been banned for two years from the world tennis association for the testing positive to drugs earlier in the year. sharapova releasing a statement saying that she will appeal that ruling. >> and russia unveiled the mc-21 airliner in the siberian city of ra ra tusk and it is to reduce the reliance on western planes and the deliveries are to start in 2018. the french bank associate general says it will appeal the decision to pay jerome kerviel for unfair dismissal after he was accused of the biggest trading fraud in history, and soccgen called the ruling incomprehensible, and they will be appealing. and now, joining us is
jackie deangelis with the futures at the cme group. >> yes, it has been volatile for gold lately and now back over the 1250 level, and now, what is the market saying about gold overall now, investor sentiment? sgll welel -- well, that there fear in the overall market, and i know they are trying to make a push, but after we got the jobs report, we saw people buying vix, and gold, and people buying treasuries and the fear of trade, and the safe haven trade is back on, and that is why there is a rally in gold. so i wonder if the stock market rally can last with the people out there hedging themselves, and worried about where things are going right now. >> and jim, i am curious where you are standing on the gold trade at this point in light of what is happening in europe right now. >> well, i actually think it is different than what brian is
describi describing. and i know that the fed has been screaming, but if the euro goes lower and the brexit, it might be another reason to buy the gold, and that is why i like it right now. >> so now, go to the with website firstname.lastname@example.org and catch our show there. >> thank you, jackie, and it is always on. and today,t the global sandler o'neill conference, we are joined by doug cifu, ceo of virt virtu. >> thank you. and we are here with one of the
best known global traders, and what are we have aing? >> in the second quarter muted volatility, and that is what a marketmaker will eat on. intraday volatility is disconnected from the implied volatility and so we have seen a narrowing of the spreads, and particularly in europe where the volumes are down 20 p and less interest and conviction by the traders. >> and strange, because we have the markets at a new high, and i won't ask you about that right now, but the market at a new high, and volatility is at a new low, and what is that telling you as a trader? >> well, the dynamics in the markets have changed. the central banks are the drivers of the volatility, and they are telegraphing the moves, right. and last year when the swiss national bank depegged, that was a surprise move to create volatility and telegraphing the moves and another thing is that when you have a broad interk
interconnected marketplace, and the instruments trade in correlation, it can be volati volatility muted more efficiently, and the last thing, instruments now that people can trade against each other, so if you want to be long on crude, you don't have to necessarily have to buy physical crude or future, and you can go buy thet etf and do it in all parts of the world and lots of ways to x express the interest. that has muted the volatility to a certain extent, and that is with one of the good things that a firm like vir tu has created by trying to define the markets and make them more efficient, we are able to distribute the volatility more efficient ly. >> and you are kwaunts and not technical analysts, but the markets are at the new highs and you are one of the biggest traders in the world, and how does the market feel to you right now? >> it feels like not significant conviction, and in other words, people are not shifting the portfolios and the big macro traders moving the portfolios and looking at the 10-year german bond trading at three y
basis point, it is hard to put on big currency positions, and perhaps with the fed doing something in june or july or with the brexit, you are seeing the shifting of the portfolios and the portfolio, and that is a good thing for the business. >> and i want to ask you about the stock price, and holding up pretty well, and you got hit on the recent earnings report, and dropped 15 or 18%, and can you explain what happened there? >> well, i think that it is really part of the business model, and we are very diverse, and we don't have a particular segment of the marketplace or the business that is more than 20 or 25% of what we do, and so it is hard for the street and the buy side to predict where our earnings are going to be coming out, and that is a strength of the business model, and we have to do a better job to educate the street, and the buy side, and this is what is driving the earnings, and that is why we are here today, and talking about the investors and trying to be more transparent, but ultimately, it is a strength of the model, but the street has to learn and become more convinced as to where we are going to be growing ultimately. >> and scott with a question. >> hey, doug, thank you for
coming on the show, and appreciate it very much, and i wanted to get your reaction to something that the head of trading at blackrock said today whether the stocks are traded in too many places. he said the followinger and i'd like your reaction, i struggle with the basic cone set of how does another venue help, he said, because we need to bring the pendulum back. and what are your thoughts there, and are stocks traded in too many places? >> yeah. i everybody knows richie prager, and he is a smart guy, and i agree with him. over fragmentation of markets doesn't help anybody. we as a marketmaker, we want to interact with the owners of retail and other institutions, and if they are in five or ten locations, we can concentrate the liquidity there, and provide a better service, but when you have 450 dark pools and 15 stock exchange, that is not helping, so i want to collapse the number of pools where we can interact and others can send the oorders. >> and does it happen or is the g genie out of the bottle?
>> well, look, competition is a good ing this, and i don't want to go back to the single marketplace, and we operate in markets where there is a single exchang exchange, and single clearinghouse, and expensive to transact and that is not a good thing, but i love the competition, but one thing that people can think about, should you be a protected venue, and should you quote be protected if you don't have a significant market share. in canada, if you don't have 2.5% of the market share, you are not a protected quote anymore, and so that is something that the regulators in washington may want to look at. >> and more or less dark pools for example or in favor of reare deucing the number of those, because it is 40% of the volume almost. >> and yes, again, overprague mentation, and it is not a friend. we have to connect all of the place, and we want to interact with the institutional orders and we have to be everywhere, but it is difficult to say, hey, you can't be in business, because the market forces are going to have to force a consolidation of the atss or the dark pools and on the registered securities exchange that is reg la toirlly driven and a loft the venues exist, because they are
getting quote fees and market data fees and so a lot of the revenue come from the market data fees and not from transaction fees. >> yes, that is true. joe terranova with a question as well. joe? >> hey, doug. as it relate s s to the market, itself, and the volatility that we are seeing going up and down, and how does it impact you specif specifically or as it relates to the company and your stock and your growth? >> well, look, i mean, at the end of the day, we are driven by volumes and also volatile ticker and i talked about it before, realized volatility, and when the realized volatility dislocates from the implied volatility, it is more difficult to be profitable for us, and joe, we clearly enjoy higher volume, and lower volatility venue venues, and one thing with virtu, we are trying to provide services across a broads asset classes, and geographies, and 32 countries that bob talked about before, and so we are trying to capture the volatility where it comes and arises, so if there is a brexit vote that surprises people or a fed announcement that surprises people or the
deviation in the jobs number, and those are good things for the business. >> and doug cifu, thank you for joining us, and appreciate your coming on, and scotty, i am going to be here all day at the sandra o'neill conference. >> thank you, bob. and india is the focus today as prime minister modi is speaking to a joint session of congress. >> and even jeff bezos is hot on the region. we will talk about trading it next. and before the break, the heat check, and there it is with the dow up 32. we will be right back after a quick break.
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to double and the analysts are deciding to go higher, and should you get in? we will tell you the name. and as smartphones are growing and what it means for apple and the upcoming iphone 7, and jeff bezos is making a big play in india, and how do you invest with bezos? we have the answers. see you in 17, scott. >> and in about 15, melissa. and from amazon to apple to google, and betting big on i india, and the stock market is one of the best performing emerging markets year to date at 3%, and is this the place to put yo money? seema mody there on capitol hill where prime minister modi just appealed to congress. >> and yes, there is growth over 7.5% in india, and inflation is coming down due in part to the drop in oil prices, and you have a pro business leader and prime minister modi who is prioritizing the u.s./indian relations and bilateral trade
which he did address to congress, and with china slowing down, the u.s. companies are taking notice of the growth in india, and jeff bezos, ceo of amazon, mentioned the growtht in the country, and announcing in front of modi last night, the inv investment of 3 billion tlrz in a company that puts the toe -- total inves tment in tech. and now, yesterday, prime minister modi and president obama announcing a nuclear energy partnership to include the production of six westinghouse toshiba nuclear houses, and so that is a big step going forward to, and become a member of the nuclear powers which they are not a member ofment and also, westinghouse's partner emerson electric, and i spoke to the ceo ed monster who expects $1 billion of revenue from the produck is shun of the six
nuclear plants in india. scott? >> thank you, seema mody for your coverage at the capitol today. and scott, where does india fit into the equation of emerging market investment now? >> and india is interest, because that i have a guy modi who is what people are calling reagan reaganesque, and he wants to come in to with the disparate beliefs and political provinces, a ed he wants to break a lot of the chains that have held the country back from doing things like china has done which is really, really hard to do, and doubtful that any one leader can do it, but he wants to set them down the road. in the meantime, if you were to wa weight the markets by the class of the market cap, it is a small market, and only until recently that western companies could even come in and make investment ins the indian companies and let alone money flowing back and forth, and so that is changing slowly, and important market, and you want to be there, but i
don't think that you want to make the individual country bet there unless you are attuned with the macro, and that is the bread and the butter, and for most people own it as part of the broad index. >> and josh is right. modi has been fabulous for the country, and you would not know it by match iing them in terms matching the market, and some of it is the foreign direct investment that josh talked about it, but it is a $550 billion retail potential there, and a lot of it is what jeff bezos wants to tap into obviously, and whether he wants to partner up with the companies over there to do it and get it done effectively, and it is going going to be done, and these guys have moved up 13 spots since modi came into power, and now number two retail demand wise, and around the world, and people are looking at them behind china, and it is a big deal. >> and if you want to be involved in india, go to the epi and i would rather play through names like apple and amazon and toez trying to get over there,
and take advantage of the billion-plus people. so there are many ways to play it, and again, i think that it is a longer term play however where earlier we were talking about brazil, that is short term, and you trade brazil, and you can invest in india. >> and joe, you think it is a top play? >> yes, i do, because of the cost of the urbanization, and the appeal of the consumers for the consumer staple companies, and the discretionary companies to deliver the goods to the people. i believe right now, you are talking about prime minister e modi who is has enacted the fiscal policies that india has not seen in decades. favorable, and pro growth, and good for the banking industry, and you are clearly seeing a turn. it is not a turn to happen in three to six months, but a turn over the next three to six years, but the focus of that turn is deliver ing ing to the consumer, and this is where the focus should be, those products. >> and to joe's point, the first is they have professionals running the monetary system in
india, and they have somebody from the university of chicago, and a very, very well respected tenured individual who served in the central banks elsewhere who is going to be involved with the currency, and the big winners are probably not public yet. you think of flip cart and some of the other internet startups that have global ambitions, but based in india, and that is where a lot of the money is going to be made. tough for the retail investor to get access to. >> and coming home, bringing home the bacon. kelly is on location in iowa with one of the hottest commodities of the year, and i wonder what that is, kate? >> scott, can you guess? we are live at the world pork expo here, and with a couple of the prized products behind me. we will be talking about the market, and what is boosting it higher when we come back.
welcome back to the halftime report as everyone is focused on oil, it is a another commodity. lean hogs up more than 40% this year. kate kelly in the thick of it today joins us from the world pork expo in des moines, iowa, kate? >> reporter: hey, there, scott, thanks so much. yes, i'm here at the iowa state fairgrounds where we are on day one of what is expected to be an event that will attract 2,300 pigs and about 20,000 pork producers and other whose are involved in the industry, as well. it's a time of growing confidence as you said because prices for lean hogs are up some 40% right now in a year.
part of the reason say analysts is growing demand out of china here is how brett steward described it. >> we're seeing a shortage of pork. demand is high in china. they are scouring the globe trying to find pork to fill that demand. when you see chinese hog prices literally double the price of u.s. hogs, the markets start to get a little excited. >> reporter: and there is also the growing demand for bacon, of course. you have mcdonald's last october introducing an all daybreak fast menu. that's one example of the growing demand and of course, getting into something industry folks refer to as blt season. not only is there hot demand for pork bellies that go into bacon but tomatoes will be coming into season quickly and that will be a menu item they think will boost demand. all in from what i'm told, people expect the prices we're seeing recently in the 80 cents per pound range to potentially reach the 90 cent mark by the
end of the summer. so a lot of upward pressure here. at the same time, scott, it's a far cry from where we were about two years ago when there was a horrible virus that spread around the industry killing an estimated 7 million pigs in the u.s. and shooting prices to what was then an all-time high of about 1.33 per pound. >> kate, thank you so much. kate kelly down at the world pork expo. i'm going to go to our pork official for comment, doc. >> she had me at blt season. pete is our pork expert here. because pete has wrestled them. >> yeah. let's not go there. >> obviously, china -- [ laughter ] >> -- huge demand for this product out of china. we saw the bidding wars for various u.s. companies in hog production, and i think this is just going to be continuing the trend that -- >> i like to get a good look at the jaws, that's how you really pick out -- >> not the belly? >> no, i really want to see
movement in the jaws when it shakes it's head. >> the reason they come back to earth is capacity in terms of packaging. there is not enough pack caking for it to be shipped globally and works off the over supply. >> okay. coming up -- >> he's -- okay. [ laughter ] >> if you say so. [ laughter ] >> john is making big moves in the halftime portfolio challenge. those trades are coming up next. ♪ ♪
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all right. final touch on power lunch for the show kicks off in three minutes. we want to bring you a quick programming note. halftime report is going to san francisco next week. we will be covering the apple worldwide developers conference all things tech and what it means of course to your money and we will have an all-star lineup with us joined by the number one apple analyst, former apple chief of guy kawasaki and bred gerstner and mammon hamid. may have surprises for you, as well. depending on how the nba finals shape up. >> yeah, hey, now. >> we'll see. let's check in now on our battle for top trader. joe is leading the way. jim is in second and dr. j is making trades today. >> liquidated a bunch of stuff today, judge and take it right back to the top of the show. we talked about hillary clinton, donald trump, what hillary might
do to the drug sector. i think it's one of the things that held back gilead, gild. i bought that because of unusual weekly activity so i might be a very short-term trade in that one. bought that today and weatherford in the energy space. that's one of the stocks we talked about again. top of the show, drilling, production, i love this one and i bought it today. >> let's throw up shares of tesla and pete, yesterday was an interesting day for the stock. >> yeah. >> because of what ron baron said on the billionaire investor, what he said on "squawk box". >> interesting. >> ten to 15 to 20-year. >> 20-year and he talked about $300 million investment he predicts could be in the bills. it's incredible but also tied in the battery factory being a much better factory. he thinks it will surpass the autos themselves so there was a lot to that whole thing and the paper that was coming in there, option paper was absolutely staggering yesterday in the weekly options. i jumped in late in the
afternoon -- >> that's why i bring it up. this is the epitome of "fast money." i sold it today around 10:00 in the morning and the options went from $1 to $3. that's the option world. get a 3% gain in the stock today, the options different kind of gain and that's why i mess around in there. that's why sometimes i look at the trader thing. it's a little different. i'm in options almost exclusively. i have positions on but i love the options for exactly like something that happened yesterday. >> how about the baron investment to the overall fundamental story that exists with tesla? we said okay, buffet, burke shire gets into apple. what about a guy like ron baron and tesla. >> it was the first time i heard of strong institutional argument for tesla. it's really on the retail side
for a trade. i think that was good. i think it gave validity to the story going forward. >> i think he's extrapolating present trending assuming things will be linear. they will not be. this is going to be a tougher business than easier business. it's a tough call. >> guys, good stuff. "power" starts now. ♪ ♪ once again, we've got some pretty big moves and commodities today. oil off session highs but above $51 a barrel. gold hitting the highest level in nearly a month and look at the action silver up almost 4% today. welcome to "power lunch." i'm melissa lee with tyler and michelle and brian starts us off with a look at oils run. >> yeah, let's talk about oil. crude oil on the highest level since last july and with us cnbc contributor and partner with again capital. john, we love you, you know that. >> thank you. >> i'll throw you