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tv   Fast Money Halftime Report  CNBC  June 20, 2016 12:00pm-1:01pm EDT

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li linkin. news of a deal with walmart in china as well. thanks for joining me here on "squawk alley." that's it for us. it is noontime on the east coast. that means "fast money" halftime starts now. thanks so much. welcome to "the halftime report." i'm scott wapner. stocks surging around the world as investors brace for a possible brexit. with us for the hour today, joe terranova, jon najarian. let's kick it off with the vote whether great britain will leave the european union and throw the markets into uncertainty. let's go to london for the very latest on what polling and predictions are showing.
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>> reporter: thanks very much. we are seeing a brexit relief rally today. sterling up over 2%. european equities closed up over 3%. there were four separate polls out over the weekend. the result that the ft poll of polls saw a five-point lead for leave eradicated. it now stands at 44 points for both remain and leave. it also results in the betting markets seeing odds change such that the implied probability of a remain is close to 80% now. so stark of a move over the weekend, it's somewhat surprising. i caught up with tony blair's former communications strategist, a very well respected political consultant in the uk, alistair campbell, and asked whether the moves over the weekend were exaggerated. >> i do think it's exaggerated. i do. i think there are millions of people still making up their minds. people say the bookies always get it right. they don't. they got the last election wrong. >> reporter: that is an
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important point to note about betting markets. the bookies got it significantly wrong last year at the 2015 general election. the other point he made was a big difference between london, cosmopolitan center where the remain camp is expected to do well compared to the north of england which he said is very hard to find significant support for remain. of course, currencies traders, equity traders, predominantly based in london and leading the moves we have seen in markets today. either way, campaigning back to full speed today and the rest of the week after a suspension of campaigning the last three days, just three days to go until the vote. big moves in markets today off the back of those polls. >> thanks so much. live in london for us. it's going to come down to the wire and you are nervous. >> yeah. we went under weight uk equities some time ago, neutral european equities and partially hedged on the currency for quite a long time now. we actually bought a few bonds in may for our clients' portfolios. hard to love bonds with these yields and prices, but when you
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are facing this kind of binary risk and it's not just brexit, but everything this year, we felt it was better to go in a little cautious than take too much risk. >> what about u.s. equities? >> we are over weight u.s. equities. >> which is the most important story at the end of the day for the folks who are watching now, we want to know what do we think the u.s. market is going to do if there's a vote to leave? >> if there's a vote to leave the u.s. will get pulled down too at least in the short term. we think it will be the prettiest house in a bad neighborhood sort of situation. in times of stress, even if it's u.s. created stress, like our debt issue in 2011, u.s. stocks relatively speaking will tend to outperform in part because people bring dollars home. the dollar helps the value. >> jon, you have been watching this moment by moment. >> yep. i are. i'm lucky with timing here, judge, because put on some uvxy, that volatility play just days before the big ramp-up last week and didn't get out at the top,
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got out over 15.70 as far as the uvxy, a 60% move on that levered volatility play. i think right now, what you are seeing from the british pound from volatility and from gold tell you that it's going to be remain. i said it time and time again, i care more about those markets than i do about any poll or about any of these data points that other people point to, because this is trillions of dollars being wagered in these markets. not necessarily wagered but basically putting their chips on the table, saying i like them here and i think it's going higher. for the pound higher, for vix lower, for gold most probably lower as well. short term. >> so steve weiss, best day for the dow in three months, best day for retail since april. the xrt, retail etf, up 2%. it's a risk on kind of feel at least for this moment a few days out. >> it is. but this is sort of like the
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nba. last night we had a pretty tight game that was going through to the fourth quarter, then all of a sudden they pulled it away. so we will be in day four of this week and i think you have to wait to then before we see what happens. right now if we keep running up, this is going to be a sell on the news event after the brexit vote. look, it only makes sense for them to remain. there's so much damage that occurs and we don't know, there's no playbook as i said last week, as to what would happen. however, i'm keeping lots of dry powder. this is not the only issue that markets are facing. we have still got an overvalued situation. however, if the market does sell off dramatically, the european markets more so than u.s., the u.s. will be dragged down, i agree, i'm putting money to work in europe. so the u.s., there are opportunities there, but i'm not buying the market overall. >> well, here's where the so-called bond king and what he thinks is going to happen. >> well, i have been absolutely steadfast at predicting that brexit was not going to happen.
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i called it bremain. that's going to happen. today's markets are sort of reflecting a little bit of increasing belief in that. so i think as a trade, i think it's risky but i think as a trade you are supposed to buy the european banks, as much as people hate them, it makes me think maybe they are sold out and when bremain happens, we got a pretty big pop last night but still, they are low and i think as a trade, i think it's a reasonable thing to do. >> that was late last week but it sets up a good conversation for some of the beaten up and beaten down trades. european banks, our banks have been hit a bit, too. >> i love the usage of the word core trade. he's identifying exactly what it is. the markets have gotten volatile in the last couple weeks but what's important as it's gone volatile, jon poipnts this out, look toward the derivative market. look in the corporate bond market over in europe which moved significantly overnight. cds has relaxed, the most it has
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done so since march. i would add to what jeffrey is suggesting for a trade. i would be looking at the corporate debt market in europe right now. back to what you asked before regarding u.s. equities, i agree with jeffrey. i think bremain remains in the outcome for all this and i think it is time to play in the u.s. equities market for that, because i don't think the u.s. equities market was pricing in a couple days ago bremain. i think it was pricing in brexit. now it has to reprice higher. i think the unfortunate killing of the british lawmaker changed the dynamic and the narrative of all this. that's why i think bremain remains the outcome and that's why the u.s. equities will go higher. >> last week, almost to the day, i believe, we were talking about deutsch bank and credit suisse and you asked whether or not for instance they were the canary in the coal mine. one of the things we said was no, that was the buying
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opportunity to pick up deutsch bank. i sold puts in that one, i told you last week on air, and this is the third day of rally that we have seen out of deutsch bank. it's coming off of 14, pushing up towards 17. this is one of the biggest moves you have seen out of a global bank. so i think when you are looking at that and taking it in the context of the british pound and all the other things we cited, this is all positive and that's big money going after a remain vote on thursday. >> you have had 18 successive weeks of outflows in european equities. at one point the dax was down 10% this month. so it's natural to see it come back. 18 weeks were the longest run since 2011. we know what happened to europe then. in the u.s., you have come in with net for hedge funds nets that were down 30% year over year, gross was down 15%. so much cash on the sidelines, it's smart to believe that there's going to be a rally. however, it will move up very
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very quickly as we are seeing today. so it's not just short covering. you can't blame short covering on the rally. there's real buying going on there. here's the caution. the caution is that the gamblers, the polls or the odds that are being placed, we were at 85% probability of remaining just a few weeks ago. now we are back up to 80. there's going to be volatility. it will move around. we are only 50/50 on the polling. >> i hope they do remain. i think it's better for the global economy, the uk and the markets. but i think you have to be very careful with polls that say 44-44. i'm not putting a lot of money on that. it could go either way. >> margin of error. >> as we get closer to thursday, the liquidity in these markets is going to get less and less and less and we will see more swings in both directions. >> what would you do euro-dollar? what makes the best sense today ahead of that vote? >> we are right now -- >> nothing? your reaction sort of suggests maybe nothing. we sort of watch and wait. >> if i have a bias i think it's that the euro is still likely to
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head lower against the dollar. the federal reserve right now, the market's taken out hikes almost exclusively through early next year. so if janet yellen even hints this week at our congress testimony or later on that maybe they're still in play for this year, the dollar gets a little bit of lift from that and even if you have the uk staying that helps your short term. in the medium term they're still fighting deflation in a major way. >> that's a tough call. what bullard had to say last week would sort of give you the indication that if anything, the dollar could maybe stay lower which the euro would catch a bid if the vote is to remain. >> bullard's a known dove. he's saying what we usually hear him say. >> he had sort of swung over and this felt like a complete and total capitulation. what matters more than anything else is what the fed chair herself has to deliver starting tomorrow. >> right. it's going to be a tricky conversation. she probably won't want to go too far ahead of thursday
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because it's an event that could indirectly affect the global economy and her mandate. >> the safety nets are in place. even if they go for brexit the bank of england will be there to support. it is not, when you look at financials in europe, and even finances here, we aren't talking about liquidity crisis. we are talking about an earnings growth crisis. what the federal reserve has done over the last week is provide the safety net for u.s. equities over the last couple weeks to almost build a bridge to where we get to earnings which should be good. >> sterling's going to go down at least 10%, probably more if you have an exit. they have a current act deficit of almost 5% of gdp. if they exit, short term that money's not coming in and sterling's going to fall. the bank of england will be forced to cut rates. that's going to be a weight on the euro and push up the dollar. >> we will get more of your thoughts throughout the hour. happy to have you with us. here's what else is coming up. >> still ahead, netflix. the analyst who is expecting a
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slowdown at the streaming giant joins us with the call of the day. plus, $80 oil? one forecaster says we could get there as soon as next year. we'll tell you how to trade it. and the crowning achievement of king james. what last night's big win in cleveland means for the battle between athletic brands. it's all coming up. there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be.
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is a slow-down for netflix ahead? they are slashing its price target today on the stock over concerns about a possible international subscriber growth slow-down. let's bring in the u.s. media and internet analyst anthony diclemente. good to see you. i looked through this. this by no means a negative note. you say international subscriber growth and the key word is may decelerate from here. no evidence that it is, though, right? >> i mean, look, i think a few reasons we wrote the note. we just thought given that we have this third party data set which talks about app download data checks, we have seen a little bit of a slowdown since january. that's not unexpected. you expect when netflix would launch in a new country or region that you see a big bang initially, then a bit of a slowdown from that point forward. but we just think the street is a little bit aggressive when you look at the pickup it's showing both on a sequential basis 2q to
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3q and the growth that other analysts expect year over year for international. the other thing is the olympics. you have that this summer. in 2012 for the summer olympics, netflix called it out as something that could defer subscriber acquisition. then i would say finally, this again is not something people aren't aware of, for those who have been netflix members in the u.s. prior to may of 2014, they will see their price increase at some point before the end of the year from 7.99 to 9.99 for the most popular plan. we think that could drive a little bit of incremental churn or marginal cancellations in the u.s. our long-term view remains constructive and bullish but we thought for those three reasons, we should take a little more of a conservative stance. >> it's an interesting thesis around the olympics and whether big viewership there will maybe cause people to not stream so much. >> the other thing about the olympics, it's being held in rio
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and other than the u.s., brazil has been in netflix's words a rocket ship. that's been according to our data checks as well, the biggest country in terms of mobile app download activity other than the u.s. >> is that right? >> yeah. >> that's interesting. >> brazil, mexico as well. you look at a region where the olympics are close to home and that could perhaps have an impact. >> it's interesting, the stock has had a bit of a reboot, if you will, up 3.5% over the last month. i just wonder as you think about this company, how much you think about the overall performance of the u.s. stock market in the way you sort of determine where this stock could go in the environment of maybe fang stocks, the so-called stocks of facebook, amazon, netflix, et cetera, are coming back into favor or not. >> well, that's a good point. i wrestle with that all the time. it's basically thought to be a risk on stock. this is a high multiple stock. it trades at a valuation that i
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think at times is not for the faint of heart. for that reason, i think when you have risk on days like today, actually netflix seems to trade better on a beta adjusted basis, so to speak. on the other hand, you may say well, it's unsafe or a risky stock. i wouldn't put it that way, because there's such a dearth of companies with real growth ahead of them. this is one that really has true revenue growth and we worry a little here and there about churn or the pace of subadditions but in reality, the price-value relationship is very attractive. it's walmart and a chinese online retailer called jd.com. i will note right now they are
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halted for trading for news pending, it has been halted for about five minutes or so. you may recall that earlier today, dow jones put out some headlines that walmart was possibly looking to sell its china business to jd.com. we have got some more source reporting from the "wall street journal" and dow jones in essence confirming on their side that walmart is going to sell part of its china business to jd.com and what they say is an all share deal. in this case, jd.com would take control of walmart's china marketplace business. jd would issue new shares to walmart. it looks like walmart could become an investor or owner of part of jd. the deal would give about 5% of jd.com to walmart and the deal values the walmart china business at roughly $1.5 billion. again, this is source reporting from dow jones. however, we will note that jd.com is halted for news pending. we will see what that news is. it could be tied at least to
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what's going on with these headlines. back to you guys. >> dom, thanks. little air traffic control. we will get back to anthony in just a second to finish there. you have owned jd. >> i have. i have. jd has had some rough spots over the last month or two, down 20%, 25% in that period. this would be big news. it just shows that you need to partner up if you are going to do business in china. walmart has been there for awhile. they can't get it going, apparently, which is one of the reasons why they are picking on jd. jd is, i would say, well, if you talk to jim, he would tell you it's the antithesis of baba. they don't have the counterfeiting issue, it's a more legit company. that's why he owns it. it would be interesting, i think you would see the stock really pick up. >> anthony, you still there? >> i'm still here. >> back to anthony. we finished the conversation on netflix. let's spin it ahead for a final comment on disney, if we could. i'm curious your reaction to sort of where we are. if you could sort of set us straight. nba finals, huge.
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the games were great. go to game seven, goes down to the end. we know ratings were fabulous. you have finding dory in the theater, the studio, if you will, performing one hit after another. what's your rating on disney and where do you stand today given all the variables i mentioned and those that i didn't? >> i have a buy on disney. i think the concerns around the traditional media environment as it pertains to espn are relatively well documented. we don't expect acceleration and cord cutting. the performan ancance of the nb finals, what a game, but the ratings and monetization of that game reflect and validate the value of live sports. i would also say the studio has been really solid. you think of zootopia, around $1 billion, jungle book, almost a billion, now finding dory, which given the opening weekend can do between $1.3 billion, $1.4
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billion, you got another "star wars" spinoff later this year. this company has a lot of visibility around the content and i.p. pipeline at the studio and of course, the "finding dory" record release is validation of the acquisition of pixar in 2006. this is just a content and i.p. monetization machine globally. they planted the flag in china, you talked about china. i think from my perspective, i'm willing to pay a premium on earnings. this is a company people think trades expensively on earnings, trades around 15, 15 and change times earning, i would pay high teens for it. that's why we continue to be positive on disney over the long term. >> anthony juggling a little today but i appreciate it very much. talk to you again soon. >> that's cool. thanks. >> you have a comment here? >> i saw finding dory yesterday. something that ties all this together. the director actually came out on set before the movie started and said thank you for coming to
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a theater rather than watching this on your app at home. i had never seen that before ever. you had a personal thank you for going to the theater. they know they need to do something to keep you in the seats. >> interesting anecdote. thank you for that. yelp, why deutsch bank is giving that stock a positive review. the trade is ahead in our trader blitz. plus, have we reached peak spandex. why one long-time retail executive says the trend is running out of steam. before the break, a look at the major averages. the dow is having its best day in some three months, up just shy of 200 points. all three of the major averages up at least 1%. in the nasdaq's case, 1.5%. back after this. it's more than a network. it's how you stay connected. with centurylink as your trusted technology partner, you get an industry leading broadband network and cloud and hosting services.
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it's not just security, it's defense. bae systems. we are back on "the halftime report." let's head over to sharon epperson. >> here's what's happening at this hour. british lawmakers returning to parliament today to honor fallen colleague jo cox, slain last week in her home district. the suspect, 52-year-old thomas mair, reportedly appeared in
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court today via video link from the prison where he's being held. syria releasing footage that was said to show fierce fighting against rebel forces where heavy artillery was used. it said government forces were in control of a tower and school, in a village where many casualties were reported from both sides. closing arguments today in the case against a baltimore police officer charged in the death of freddie gray. caesar goodson is the third of six officers to go on trial. he opted for a bench trial before a judge. cleveland is basking in the glory of their cavaliers winning the nba championship by beating the golden state warriors last night 93-89. wai it was the first major sports championship in the city in 52 years. lebron james was named the series mvp. that's the cnbc news update at this hour. back to you, scott. >> sharon, thanks so much. some saw the final series as a battle between under armour and nike, given the fact high profile stars such as steph
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curry and lebron are endorsers for those companies. the stocks have led the charge in the athleisure trade which may now be showing signs of wear. welcome back, glenn. good to see you again. it's interesting, through the prism of retail and this trade that some viewed a little sidebar of this finals series, you think that trend is a little stretched? >> i think a lot of people are in the category now and when a lot of people enter a category, it can start to peak. >> it's interesting, if you look at the stocks, it would suggest that. both over the last three months are down roughly the same amount. nike, 13%. under armour, 12%. which do you feel is best positioned moving forward? >> i'm a huge fan of underarm our. it's a young company, 20 years young.
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he's just getting into several categories. i think the way he's approaching celebrity sports people is just pure genius. i think he's been very systematic the way he's going after one category. >> talking about kevin plank, whose mantra is we're just getting started. i had the chance to speak with him actually in oakland before game five or at halftime of game five about the steph curry impact. where it's 70% of their footwear growth is traced right to steph curry. you like that positioning. >> well, i'm not a sports expert but i love what steph curry stands for as a person. i think it was just genius to go after someone who has much more meaning than just sports. as it was misty copeland or michael phelps. >> interesting. when you look at retail, it's a good day to have this conversation because the retail etf is up 2%. discretionary stocks are now positive on the year. how would you score where retail
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is as a trade or investment right now? >> for me, this is one of the most exciting times ever in the history of retail and i think the game changer is technology. i think when people think about technology, their mind tends to go to e-commerce. for me it's all about access to information and what that's done is shifted the power to the consumer. if you think about someone looking at a smartphone today, they have instant access to price, country of origin, origin story. going back to under armour, they know about kevin plank's passion. they know about the beginnings of that company. >> amazon. how does this factor into the way you think about the entire retail landscape? former ceo of brick and mortar big shots. >> yeah. amazon has changed our service expectations but it's more than just amazon today. if you live in a city, you use uber. if i can tap on uber, get a car in less than five minutes and
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have an exceptional experience which i do almost every time, then why can't i expect that from every retailer, every restaurant, every airline i do business with? that is my expectation today. people who don't deliver on that expectation have a problem. >> what does the future look like for the big department stores, the malls, how did we assess that? >> i think there's no middle anymore. i think people who can't deliver exceptional products and services with terrific -- with a terrific customer experience, they have to deal with price and with price, you have pure transparency. so it's a race to the bottom. if you have exceptional product, then you can thrive. >> interesting. great to have you here. thanks for your insights today. front row partners ceo. back to dom chu now with more on walmart which we were talking about just moments ago. >> that's right. now we in essence have a confirmation of the headlines brought earlier today by the dow jones/"wall street journal" side of things. in this case, walmart and jd.com have now jointly issued a press
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release saying they are confirming details of what they call a strategic partnership between the two companies in the terms of the agreement here, we do have walmart ceding some of their business interest in china to jd.com, collaborating on others in terms of strategic initiatives. basically jd.com will operate the marketplace for walmart china and they will do a couple of other different subtle things with regard to business partnerships. as part of the transaction, it is also that jd.com is going to issue about just shy of 145 million new of its class a shares to finance the purchase here. walmart will become about a 5% owner of the company at that point in jd.com. again, confirmation of the details. shares of jd i will note are still halted. they were up about 8.5% before the trading halt went into effect. we do not yet have a time on when they are expected to reopen for trading. but of course, we will treat it as a news alert as soon as they do become available for trading again. back to you guys. >> dom chu, thanks so much. i know i thanked you, but while
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i have you here, what do you think of this kind of story? >> in what sense? >> here we have walmart and sort of their exploits in china, how they are tying to extend their brand, this kind of deal, what do you think about as a retail executive when you hear about something like this? >> again, i think there's no middle. i think it's either a race to the bottom or it's a -- it's two tales. either a race to the bottom or it's high. and it's either stories of authenticity, of exceptional product, exceptional services, or race to the bottom. >> are you a fan of the walmart business as it sort of undergoes a number of different changes, whether it's downsizing, the size of the stores, the minimum wage moves they have made, their expenses going up, at the expense of you know, what the stock price is able to do in the more recent past. >> honestly i think it's too
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early to say. i think amazon is a good competitor for walmart. it's too early to see. >> jury's still out. thank you for real this time. what about you guys? we talked about the jd side of things. what about walmart? >> initially you think they will take sam's club china and put it online with jd.com so that's a good thing. that gives them a different presence. i don't think it will change much of the actual physical structure that exists currently. but i think it's a new avenue. again, your question as it relates to amazon, i fully view that everyone is playing defense versus amazon. the brick and mortar -- >> you have to. >> the brick and mortar retailers have to -- >> i wouldn't say they're playing defense but they are, companies are investing heavily. target and walmart, investing heavily in their online presence. that's a little bit of offense, is it not? >> compressing margins by doing so. okay? which impacts earnings and not showing the ability that amazon
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does to deliver on the two key metrics that the consumer wants. that being convenience and time. they haven't figured that out yet. so the brick and mortars to me are still clearly challenged living in this amazon universe. >> the greater that they can come towards what glenn detailed as far as that exceptional experience, some people are doing it and they will thrive. but in any case, the online presence, whether it's amazon or anybody else online, i would argue, basically is that you are going to compress these margins and compress the pes of a lot of these firms we talk about every day. >> lastly, let's do this. the consumer, i said what's happening in retail today, elsewhere, discretionary stocks. your view? >> we still think the consumer especially in the united states is doing well. they are benefiting from low interest rates, relatively low gasoline prices.
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overall, the job market improving. we think this is a good backdrop for the consumer. you see the brick and mortar headlines out, you get spooked. is it telling us something about the consumer. you have to read through that to everything glenn said about how shopping is changing structurally. it makes it harder to analyze from the bottom up view. >> here's the perfect capper on this conversation. our data team, our markets team, telling us amazon is now pacing for its best day in more than a month. it has the most positive impact today on the nasdaq 100. so it's all sort of relative to what we are talking about. coming up, oil prices rally as brexit concerns decline. we will head to the futures pits for how the energy traders are playing that. plus, it's the fang stock that's managed to continue its rally in 2016. but what facebook is doing right and what to expect from that big shareholder meeting that kicks off in just over an hour's time. let's take a quick break. as we did that, a look at the dow 30 heat map, dow on pace for its best day, up nearly 200
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how's check it out. lights.? meeting configuration. blueprints. call hruska. we've gotta set up a meeting. sure. how do you spell that? abreu, albert, allen, anderson c, anderson r.... you know what? i'll just tell him myself. door. andrade... it's about time business communications caught up. call anyone in your network just by saying their name. call hruska.
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vonage. business grade. people friendly. coming up, facebook kicks off its shareholder meeting, up about 10% this year. what should do you with the stock this year? they are the most attractive employers in america and are the most attractive stocks for investors. we'll name names. the ceo of draft kings will join us in an exclusive. back to you guys on "halftime." >> see you dpiguys in just a bi. crude oil making a comeback. jackie deangelis? >> crude is over 49 in the session, trying to make a move for the $50 mark. brian, what's driving crude today? lot of people talking about the fluctuations we see in currency. >> you are hearing word about the currency but i think it's more of a picture basically, the
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brexit, oil has become a risky asset. risky assets are on the move today. certainly that's why you are seeing oil go higher. obviously a vote of staying here in the british, that probably drives demand. it's been a demand picture for oil. that's what's taken it higher. we have seen reports that at least demand is starting to keep up with some of the supply. at least that's taken us to 50. how much higher we can really go, i'm a little skeptic about. it's time to take some profits on this nice move off that 45 level up to 50. but certainly, demand is driving us higher. that's pushing us to 50. >> he brings up a great point. we are really stuck in that trading range up here around 50. tough to get over, tough to get much higher from here. how high do you think we go? >> my belief is if we can settle today above 49, to me it will confirm that the up move's intact. i think 53.80ish is about my next stop from there. we are talking about the fact that stay is the greater possibility but the fact that the dollar has been hit to me means that the market doesn't believe that the fed is going to
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be emboldened even if britain decides to stay. that's part of the reason that oil's got wings. >> we will continue to watch. gentlemen, thank you. scott, back over to you. we have the life show tomorrow. >> wings is an understatement for where raymond james thinks we could go. $802017 wti forecast. you like energy here? >> we have been under weight. we actually decided in late february, early march to play indirectly through emerging market equities. we increased our weight in emerging market equities. they had benefit from commodity prices broadly. we have some exposure but have been under weight. >> if you missed the oil rally, though, if you have been in emerging markets you captured that. >> absolutely. >> i wonder, the question as it pertains to that is, is that overdone? brazil is ripped since i don't know, maybe it still is the best performing market around the world year to date. >> we are neutral. we haven't put a huge play on because it is a risk on, risk
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off trade. in terms of oil, i think what has made us a little more hesitant is the inventory situation. if you look at the united states, we still have record high inventories and there is a link between prices and inventory levels. so that's one worry. i guess our other worry is a lot of the disruptions that's helped prices over the last few months, we view a lot of those as temporary. if those supply issues get taken care of and the inventory drag is still there, can we just keep climbing higher. i think a lot of companies want to fix their balance sheets before they start drilling again in the u.s. >> high beta energy names, we talked about that at the beginning of the month. it's proving that was the right strategy to get out of those names. take a look at them. they are both down 4% for the month. eog basically performing up 1%. there's a new trade in energy. it's a real trade. it's natural gas. it's not getting talked about. natural gas is up 20% for the month. take a look at rrc. that's a way to play it. take a look at swn. that's an alternative that you did not have in the last three
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months. that's actually going to be negative for these high beta energy trades. i want large mega-cap energy, i also want natural gas, please. >> coming up, we count down to facebook's annual shareholder meeting. julia is on site in redwood city, california with what to expect. hey, julia. >> reporter: we will see if sparks fly at the upcoming meeting where a big proposal aims to solidify mark zuckerberg's control over the company. that's after the break. >> there you go. that's the cleveland cavaliers coming off their plane. they are officially back in cleveland as nba world champs. first professional title for that city since 1964. cleveland browns won the nfl championship back then. wasn't even the super bowl. so it is a big day in cleveland. maybe they will bring the trophy out. maybe lebron will carry it down.
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huge game last night. winning it within the last minute or so. coming back from 3-1 deficit, first nba franchise to do that in the finals. what a series that was. players coming off the plane right now. maybe some team staff. where's lebron? >> coming soon. he flies private. >> something tells me he's the one who will be bringing the trophy off. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade.
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our julia borson there in redwood city where the meeting will take place. julia? >> that's right. there are two key agendas. items on the agenda for today's meeting. vote for relekting all of facebook's board and proposed class new shares. mark zuckerberg as long as he's running the company to maintain his voting control of the company. even as he slowly sells shares to funneled the charitable initiative and the company makes acquisitions or gives shares to employees. and zuckerburg is guaranteed to get the entire board reelectsed and there is a proposal approved because he controls about 60% of the voting shares for the company.
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shareholders both oppose the establishment of a clafs nss of nonvoting stock. iss only approves saying other board members support the new share structure. now northstar apple management comes out against the multiple classes of shares saying shareholders no own the most stocks, outsiders have no say in issues affecting the company. we'll have to see if any shareholders bring up the recent controversy about peter teal backing a lawsuit against gawker. he told me recently that both she and the company support peter shield's role on facebook sports. scott? >> going to be an interesting day. doc, you own calls? >> i do own calls. >> you'd be a buyer? >> i do and i would. but you have to know going in just as every shareholder has, zuckerberg has the power to do whatever the heck he wants. same thing with surgy and larry
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over at google. >> there have some that would suggest -- i know it gets criticized. people have a negative view in some corners. some say it's a good thing, the ownership structures like underarmor and kevin plafrpg. is it good or bad? >> you have to be comfortable with it. steefrn is not comfortable with situations where the shareholders don't have that vote. you don't have the vote. >> you know, it depends. i'm comfortable with it here. >> you trust the ceo. >> right. there are so many stocks to own. don't own it. don't waste your energy fighting over it. move on to another one. so i'm comfortable with it. i'm comfortable with kevin plank and with all of those. i'm not going to fight him and waste my money, my time taking them to court. just move on. >> overweight technology right now. you like it? >> yeah, we've been overweight technology and health care. it's a bottom up view. we find companies that we like and gets us that sector. >> all right. coming up, -- we're going
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under the radar. it should be positive for the markets. before we go to break, take a look at the halftime portfolio leader board. who is at the top? dr. j still is. barely. tight race for the top. it's more than a network. it's how you stay connected. with centurylink as your trusted technology partner, you get an industry leading broadband network and cloud and hosting services. centurylink. your link to what's next.
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see what the power of points can do for your business. ♪ i could get used to this. now you can. when you lease the 2016 es 350 for $329 a month for 36 months. see your lexus dealer. we were telling you moments ago that cleveland cavaliers landed back in cleveland. there she bron wiis lebron with.
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kevin smith, kyrie irving, bringing that first professional sports tight toll cleveland since 1964. and the final's mvp is the one holding up the trophy. favorite son, obviously from nearby akron. lebron james returns with the trophy, he said, that he was hoping to bring that city when he came back to his hometown team of cleveland. just moments ago, arriving back in that city with the hardware after all that hard work. there is the championship belt as well. i think that is kevin love with that. but that's a big story up in cleveland today. congratulations to the team and the city for that. let's go. >> narrator: radar now. two things our experts are watching. you may have missed to day. rebecca, you start us off. >> one thing that i've been watching last month or so that i think is actually a really good sign is that the chinese currency is weak ening again and no one seems to care. i think that is really g.
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>> that's a good thing. >> if we saw this move in january that, would be the discussion we would be having. >> we did see this. and that's why we had all of that upset and unrest in the stock market. >> i think now investors are getting more comfortable with the idea that china has a relatively more flexible regime. china capped off the holes in the capital accounts. the reserves stabilized. it doesn't mean they won't surprise us in a negative way. right now, we're looking at a relatively calmer situation. >> if i could add to that with the chinese have done also to stem the capital outflows is sell significant amount of u.s. equities, 38% of the holding in the last year, and also sell u.s. treasuries. again, it's a very good thing in what they're doing and, yet, markets have not rioted. i agree with you. this time is different. folks suggest we have that to watch for. i think it's different. >> it's different for now. i wonder, right, there is going to be another moment. who knows when that's going to be. >> right. >> when we're once again
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reminded of the fragility of what china is. >> who knows if that moment isn't now? who can believe that they've gone from, you know, from capital flows of $100 billion a month to nothing. >> your point is whether things have changed at all. >> right. >> they haven't changed. >> funnel >> have fundamentals changed? >> they just stopped completely on a dime. you know, just seemed unrealistic. >> i don't think they can make it up though. i don't. i think china has to -- >> i agree they've done a good job. >> yeah. there were a lot of links in that capital account earlier. >> doc, give us a quick look at conagra and what you see there. >> normal activity in this one. cag is 1500 contracts a day on the called side. it traded over 4500. most at the july 49 strike. i bought them. i'll be in for two weeks. >> by the way, janet yellen on the hill next couple of days.
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what should we be listening for? >> any change from what she said last week. that's going to be the most interesting. i don't think she k she can't move. >> thursday is still coming up. >> keep your eye tomorrow on earnings. i think that's an excellent bell he weather of what is going on. >> great having you here the whole hour. >> thank you. >> come see us soon. >> i will. >> rebecca patterson. "power lunch" begins now. thank you, scott. "power lunch" does begin right now. the gang is all here. brian is here. melissa, michelle and i'm tyler mathisen. stocks are rallying but off session highs. latest polls showing support for britain's staying in the eu. regaining momentum ahead of thursday's crucial vote. >> all of the major averages gaining more than 1% this hour. the dow is higher by 1%. a gain of 207 points. nasdaq, higher by 1.5%. gain of 72 points, 4 snchl

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