Skip to main content

tv   Fast Money Halftime Report  CNBC  August 2, 2016 12:00pm-1:01pm EDT

12:00 pm
in fact, triggered the whole process, because we started the p4, a little fda on which the tpp falls and just has become this important initiative. the economic arguments for the tpp in terms of trade i think the president has presented them eloquently. what the benefits are to american companies. it's a deal which the countries have negotiated, each one providing market access on their side in return for gaining market access on the other side. each one committing to rules in exchange for the other side committing to rules. it's a hard-fought bargaining process. the negotiators spend many trips, many nights, many dawns, and fought it out, but actually at the end of it, everybody must decide, is it a plus or a minus for them? and i think in your case, a very
12:01 pm
good yob at ustr. our various trade representatives and negotiators did their best to make sure they could bring back something which the political leaderships could stand by and support, and it's an achievement that all the members of the tpp at the end of this are still with us and nobody has dropped out of this. so obviously, there is something in it for each one of us, and i think we should also look at the other side of the economic benefit, which is not the producers. i am making, i am exporting, therefore i'm earning a job, but also, i am spending, i'm consuming, i'm importing, and because it's free dock trade i'm getting a wider range of products, of services, of opportunities which will improve my livelihood. people talk about walmart. the products come from all over asia. who benefits? walmart. many people in, in america. not just exporters, but even people living in the rust belt, people living in the midwest.
12:02 pm
these are part of your everyday invisible standard of living, and yet it's real, and it's valuable. so in terms of economic benefits, the tpp is a big deal. i think in terms of america's engagement of the region, you have put a representation on the line. it is "the" big thing which america is doing in the asian-pacific with the obama administration, consistently over many, many years of hard work and pushing. and your partners, your friends who have come to the table, who have negotiated, each one of them has overcome some domestic political objection, some sensitivity, some political cost to come to the table and make this deal. and if at the end waiting at the altar the bride doesn't arrive, i think there are people who are going to be very hurt, not just
12:03 pm
emotionally, but really damaged for a long time to come. mr. abe, for example. several of his predecessors thought seriously about and decided not to participate in the tpp. they came very close. they prepared the ground. they walked away. but mr. abe came through and decided to commit. why? because he wants to help. he wants his country to benefit and to open up its markets, and this is one way to do it. and you don't do this while it hurts mr. abe is one thing, but it hurts your relationship with japan, your security agreement with japan, and the japanese living in an uncertain world, depending on american nuclear umbrella will have to stay on trade, the americans could not follow through, if it's life and death, who do i have to depend upon? it's an absolutely serious calculation, which will not be set openly, but i have no doubts
12:04 pm
will be thought. i think if you go beyond that i'd like to link up the tpp question with an earlier question from nicholas which is, where do we go over the next 50 years? and that really depends whether we go towards interdependence and, therefore, peaceful cooperation, or whether we go for self-sufficiency, rivalry, and, therefore, a higher risk's conflict. asia has tried both. the world has tried both. in the 1930s, with the, with the depression, with a very difficult international environment. you went for protectionist policies. you had a rivalry with japan which led to war. after the war, because america was open, because you promoted trade, because you encouraged invisits and encouraged other countries to open up, therefore, the asia-pacific has been
12:05 pm
peaceful and the americana has been a pact and not a war. if over the next 50 years you continue to work towards interdependence and cooperation and mutual prosperity, then 50 years from now we can say, these have been peaceful years, and we have made further progress together. but if you go in the opposite direction, and you decide that this is a big pacific, but it's big enough to split it down the middle and one chunk is mine and the other chunk belongs to some of the asians, china or india or japan, i think that's a very different world. one of the reasons why you don't have a, you have a manageable relationship with china now is because you have trade with them. it's enormous. it's mutually beneficial. both sides want to maintain that relationship. if you didn't, it would be like the soviet union during the cold war. when you had negligible trade and while you still had to find
12:06 pm
ways to work together, but it's much harder. now, the tpp doesn't include china, although some people think it does, but the tpp points a direction towards the world, towards your whole orientation of your society, and if you set the wrong direction, maybe in the next 50 years sometime you will turn around, but it will cost you many years, and the world will have to pay quite a high price. yes? >> my name li wn in the singapore news. two questions. first, follow-up to the tpp. a lot has been said, everyone knows what's at stake, but what is the future of the tpp, if it does not get ratified by january, the lame duck session what -- the fear is that if things wait too long, and it
12:07 pm
might need to be reopened up for renegotiation, and that will probably kill the deal. so what is, post-january, how can you reassure the tpp nations and the people that there is the political will to get this done as soon as possible? the second question is for president obama. we are almost at the end of your eight years in office. i would like you to evaluate the progress of the u.s. as it relates to asia. what is something that you're most proud of? is there something you would vo done differently and what is your message to your successor, whoever he or she may be to continue to engage singapore, southeast asia and the rest of the asia-pacific. thank you. >> well, with respect to tpp, i thought that prime minister lee's points were right on
12:08 pm
target. and this is an economic agreement, but what we've learned in history is that you can't separate out economic interests and issues and security issues. and interests. and the prime minister is absolutely right. we have benefited from enormous peace and prosperity around the world. an unprecedented period where the great powers were not engaged in conflict. in part because of growing interdependence. if you think about those parts of the world where we still see conflict, where we still see high levels of violence, there are typically places less integrated into the world economy and there's a reason for that.
12:09 pm
so -- i think there is a powerful economic case, just a basic bread and butter case to be made about why this is good for american workers and good for american exports, and ultimately good for american wages, if it's structured properly, but i also think that there is a strong security component to this, and what i also think is important is for people to recognize that the alternative is not tpp or some imaginary circumstance in which suddenly we're able to sell goods around the world, wherever we want, but nobody's able to sell goods to us. where we can operate anywhere around the world under fair rules, but they can't operate here. in that fashion.
12:10 pm
that's not, whatever is being imagined as the alternative is not the alternative. the alternative is what we have today. a situation in which we don't have as many protections around labor and environmental issues as we'd like. a situation in which there are countries, like japan, that sell a lot of goods here, but that keep pretty restricted access for u.s. companies and u.s. workers to their markets. and prime minister lee is right that prime minister abe of japan, for example harks taken some significant risks, because he knows that he needs to make his economy more competitive. and as a consequence is willing to open up action that we haven't seen in the past. and that's a big market. still one of the top three economies in the world. so the last point i'd make around this is, china. as prime minister lee mentioned,
12:11 pm
china's not a part of tpp. but if we don't establish strong rules, norms, for how trade and commerce are conducted, in the asia-pacific region, then china will. i mean, china's already engaging all the countries in the region around its own version of trade agreements, and they're sure not worried about labor standards, or environmental standards, or human trafficking, or anti-corruption measures. so you get a low standard, lowest common denominator trade deal, and if america isn't creating high standards, then china's rules will govern, in the fastest growing part of the world. that's bad for us economically.
12:12 pm
but it's also bad for security interests. it's also bad for the interests in promoting norms against child labor, or against human trafficking, or -- making sure that everybody's working harder to raise conservation standards and that's the alternative. that's the option. so i think it is very important for us to get this done. in terms of assurances, nothing in life is certain, but we've got a pretty good track record of getting stuff done when i think it's important, and i will say this. that -- you know, this actually is not just a obama administration initiative. this concept began in a republican administration. we pushed it through.
12:13 pm
we made it happen. we made sure that the things that i care about in terms of labor environmental standards were incorporated into it, but historically this has had strong bipartisan support. so the bottom line is we'll go out there, make those arguments and ultimately i think we're going to be successful. in terms of my rebalance legacy, you know, across the board we are just in the game. we are focused on asia in a way we weren't when i came into office, and the countries in asia have noticed. our alines aliances are stronge. our security arrangements are deeper. whether in australia or the philippines, or singapore. our defense budgets reflect our commitment to things like
12:14 pm
maritime security in the region. the -- the continuing efforts around building the east asia summit architecture means that there's the kind of date-to-date interaction around a whole range of issues. whether it's disaster relief or public health issues, or counterterrorism. there's consultations taking place today that were not taking place eight years ago. so i think on every dimension we are in a much stronger position to engage, influence and learn from our asia-pacific partners. the thing i probably enjoy most has been our young southeast asian leaders program, just because whenever i meet with the, the young people from asean
12:15 pm
countries, i am inspired. it makes me very optimistic about the future and what's going to happen over those next 50 years, ba you ecause if you them about the future they want to see, they are very much committed to an interdependent world, a world in which people are learning and exchanging ideas and engaged in scientific and educational exchange. and a world in which people's different cultures and backgrounds are a source of strength and cooperation as opposed to conflict, and fear. and that's true in southeast asia. that's true in africa. that's true in latin america. that's true in europe. you know, a lot of this fear, the choice that was posed by prime minister lee between interdependence and self-sufficiency that is not achievable and ultimately
12:16 pm
rivalry and conflict, those who opt for rivalry are folks who are looking backwards. you talk to young people around the world. they understand that interdependence is the way that we're going to assure peace and prosperity for all of us. for years to come. and so, that may be the thing that has some of the most lasting suspect in some of the town hall meetings i've had, future presidents and business leaders, not-for-profit leaders that are going to do great things and i'm glad to have play add small paed a smal that. >> thank you. all right. i want to welcome you to the "halftime report." we have been watching that news conference from the white house today with president obama and
12:17 pm
singapore's prime minister lee, and an event that spent most of its time focusing on trade and the trans-pacific partnership but at the very outset mr. obama was asked about that ongoing controversy between the republican nominee donald trump and comments made about that gold star family, the khan family. the president saying, "i think the republican nominee is unfit to be president, and he keeps proving it." when asked to respond to those comments and the controversy that still lingers around mr. trump and his campaign. going on to say that "mr. trump lacks the basic knowledge on critical issues." i should also tell you at this very moment donald trump is holding an convenient of his own in loudon county, virginia. we've been monitoring that for any comments he may be making in response to what warren buffett had to say yesterday in that scathing critique he gave in omaha alongside hillary clinton. so far no mention of warren buffett's name by the man on the right-hand side of your screen,
12:18 pm
donald trump. but we will continue to keep our eye on that and take you there if, in fact, that topic does come up. i should also let you know that stocks right now are at their lowest levels of the day, and we do have a special event for you today on the "halftime" show. the dow, a triple digit loss. seventh straight down day for the dow. real concerns now over whether an august correction is coming. we are joined today by the top ranked financial advisers in the united states, that according to barrens, andy chase, with us exclusively today from palo alto. andy, welcome. >> hello. how are you? >> good, thank you. first off, congratulations on this, on what barrens has said about you, being the top ranked financial adviser in the united states. >> thank you, thank you. >> a very good day to have you, just considering some of the consternation going ow where stocks may be headed from here. how do you see the market as we sit here today?
12:19 pm
i would call myself a relative bull. i mean it's hard to be wildly bullish about anything in the world, but at the end of the day, equities companies are probably the only asset class that hasn't had serious price inflation because of interest rates dropping the last few years. still valued at normal kind of 20-year multiples, every other class, real estate, et cetera, serious price inflations. it's hard not to like them. >> are you still putting your clients' money to work in u.s. stocks? >> yeah. i mean, i'm not a deep global thinker, but i certainly am not a big fan of the euro, not a fan of the yen. i don't have the guts to be in the merging markets yet and am staying close to the vest domestically, and i just feel there are better values for example, than a lot of chasing yield and things like that. yes. >> when you say a better value, in terms of value, u.s. stock market look expensive to you? does it look fairly valued? how would you characterize where stocks are today?
12:20 pm
>> well, so 17 times earnings on future multiples depending whose estimates you use, a normal valuation. given that interest rates are 1.5% on the ten year versus 6% normally, you would think that those multiple should have crept up. certainly cap rates and real estate crept down, and i always keep telling people, it strikes me that ceos, companies, have the ability to grow earnings better than landlords have the ability to raise rents the next few year. my general sense is, even though the world's going to be slow, i still think the world's going to be in an economic funk. i still think companies can eeek ow gains. comes down to how you valley them, and it's, i've never seen the s&p's dividend yield still outyielding a five and ten-year treasury. it's hard not to like them. >> 80% of the s&p has a yield higher than what the ten year
12:21 pm
treasury is yielding agency we have this conversation today and the ten year today at least for this moment is somewhere around 1.5%. though it's obviously been fluk k fluctuating. with what sounds like a cautiously optimistic view of the market, do you see a summer correction, a somewhat sizable august pullback in the cards, or no? >> a $99 question. i have no idea. i think corrections will be very short lived, primarily because there's no place for the cash to go. as i said, when you're getting a higher yield on the s&p than in treasuries and what have you, it strikes me that anything's possible, because of the headline risk, but my general sense is corrections will be short lived, and that the market, people still love to hate wall street and there's been a healthy amount of skepticism, with chicken little, sky falling, et cetera, for a long time and hard to imagine it getting that much more negative. >> fun e you say that.
12:22 pm
the last couple of weeks we've earn tai entertained that question, a hated rally was actually starting to see a sentiment change. are you not convinced yet that that's taking place? >> it feels like -- well, i think you know, news agencies are partially responsible, creating angst, but my general response, people are about as negative, i can't put my finger on why. certainly as i said other asset classes, real estate considered safe and i'm not sure why companies, don't like to say stocks, company, seem to be doing generally okay are considered so risky, given a 1.5% interest rate environment, but anything's possible. my general sense, as i said, that i think things are moving a little higher. >> you would flat take issue with, say, a jeffrey gundlock for example, earlier this week in an interview with reuters basically said, look, everything is overvalued. not looks good.
12:23 pm
sell everything. >> yeah. i would. so you've got to put your money somewhere and it's hard to say, cash is paying nothing. bonds are not paying too much. so, and as i said, real estate has had serious price inflation. virtually every asset class, except equities sitting here at very normal 20 year, 30 year multiples, and most companies are doing okay. i don't -- as i said, i think we're in an economic funk and i don't think growth is going to be such that it's going to make any politician or ceo really happy for the next three, four, five years, but it's not -- we're not falling off a clifr and people had us kpaul falling of a a k4ri67 at the beginning of the year. thought china was dragging us down. >> sure. a seemingly new crisis every several months we sort of get a lot of angst over and the market has shown a unique ability to show its resilience when it seems to be maybe the most dire.
12:24 pm
i have folks in front of me on the desk with me, andy, i'd like to bring in the conversation. joe tear ra floev virginia, stephanie link, josh brown and pete najarian. joe terranova has a question. >> andy, as it relates to client portfol portfolios, a choice between equities and fixed income. fixed income worked incredibly well. what do you tell clients what the expectation is over the snet 6, 9, 12 months? >> hard to like the fixed income space. i have a big bond business, but it's hard to like the fixed income space with the rates down as low as they are. i don't even honestly understand negative interest rates. i go to a lot of stuff in stanford to try to understand this and don't even get it, but i don't think rates are going up. as i said, i think rates will stay down a decade and been saying that for three or four years. unfortunately it hasn't gone from ten years down to seven years. i think we're looking at a ten-year decade, funny, that mentality has sunk into real
12:25 pm
estate investors. it really hasn't sunk into equity investors. my general sense on bonds is that you're not going to get hurt. they're better than cash. cash is paying nothing, and if you don't have the guts to be entirely in real estate or equities you clearly will have a bond deponent your portfolio but not something to go into, i love the ten year at 1.5% or cal uni at 1 or 2%. it's hard to love that. >> andy, you brought up sort of the ale locations in some respects. what does the ideal portfolio look like right now from an allocation standpoint to the top ranked financial adviser in this country according to barrons? >> well, there's no one portfolio, one size does not fit all on that one. so you're clearly taking into account liquidity, time frame risk, all the normal stuff. i would say right now i'm
12:26 pm
leaning more, way more towards equities, as i said. which is an odd thing. even if you're dealing with an elderly person that wants income, you're getting 50% more income for being in an s&p portfolio than a five and ten-year portfolio. if you're telling me you don't think companies will grow a little or raise dividends over the next three, five, ten years i'll tell you you're nuts, and i'm very overweight health care, for example, both cheap and has nowhere to go but higher, which has been painful, you know, six, nine months ago, but my sense is you've got to be in equities. and hang on. hold on to the equities. >> uh-huh. >> andy, it's josh brown. so just to play a little devil's advocate. stocks, u.s. stocks, large caps in particular, on a cyclically adjusted rash earnings ratio are actually in the 95 percentile evaluation going back to when we have data. you can look at other measures, price to book and we're the most
12:27 pm
expensive large stock market in the world. so you're not in europe. not particularly jazzed about em. is there a signal that happens where you say, okay. i don't want to have most of my equity exposure be in the most expensive market, even though it's the best house in a bad neighborhood or whatever. is it a feeling that gets you back into those assets leaves? what would you tell us? >> i think a lot of the rules in the past are being thrown out the window, because in the past, the world was growing at a faster rate. in the past interest rates were 5%, 6%, 7%. we're looking at a very different kind of a decade. i hear asset modifications, i suspect people would make these models from ten years ago meaning data from 11 to 30 years ago, people have a different outlook if they wrote the book in 1950 after going through the '30s and '40s and my general sense is things are incredibly
12:28 pm
negative on companies, for whatever reason. and they're okay in real estate. okay in art. okay in collectible cars. every other asset class has gone pretty much nuts and had the inflation you'd normally expect, multiple expansion, from interest rates dropping, and you know, pe should be a function of interest rates. should be a function of growth, which i think will be a little challenge and should be a function of psychology. i think the psychology is so negative now as it pertains to companies. i just find it kind of odd. most companies are doing general -- energy had a rough year last year, but most industries are doing okay. not great, but okay. >> so if you're making the case, andy, that stocks are not, you know, expensive or even overly expensive relative to where interest rates are, and you believe that interest rates are going to remain low for an awfully long time, how much of your view. >> yes. >> how much of your view is predicated on the fed not moving
12:29 pm
at all this year? would you be surprised? would it upset your view if there was a hike in september? funny, i asked about jeffrey gunlock, i have a feeling he's living to our conversation, because he said to me, it's the bob dylan market. the times, they are a changing. what happens if they change from a rate standpoint upsetting the way people feel about stocks? >> that would change my opinion if i thought interest rates were going up. and i've been hearing rates are going up now for three, four, five years. we all have, and they haven't. and i got -- finally they did the raise last december. and my general sense, it was like the taper, when we stopped the taper, rates have to go up. fed's buying treasury bonds, rates go up. sure enough, i'm not sure about that because they did that to expand the money supply and goose things along. it's hard to imagine, i think image over substance. hard to imagine the fed raising
12:30 pm
rates for me and telling voters, yeah, we got to really slow things down, and whether you -- americans sometimes, it's kind of a foreign concept for us to think that rates are going to go down and stay down, because we're just not used to this rate environment, but to say that germany's going to raise rates on europe or japan's going to raise rates on their citizens, i think people come to a pretty quick conclusion that that's probably not going to happen. that we really have to slow the world growth down. so i just don't see it in the cards, and even if they raise it one time image over substance, i don't really think, what i really care about is the five and ten-year treasury, five and ten-year mortgage. what would happen to housing if they did that? all remodels are based on variable rate loans. i just don't see it happening and i think for a long time. i'm talking five or ten years long time. >> right. now, you said your overweight health care, and sort of made the case there. >> yes. >> are you in favor of yield plays?
12:31 pm
so to speak? if you believe that interest rates are going to remain as low as you think they will? the utilities, telecoms and in respects some older technology stocks that still pay a somewhat juicy yield? >> i like dividends. it's hard not to like -- i like cash flow. i'll say that. i've always been a believer you own a gas station, put cash in the owners' pockets. i like cash flow, and i -- but i like companies that have the ability to raise their dividend. chasing a yield on a utility right now, or some of the telecom companies, which i don't know will grow a lot and have the ability to raise, you know, their dividends. my kids don't have, haven't figured a way to get out of paying most of their phone ill weres if they can with some of these apps so i'm not really wanting to chase the utilities and things that are regulated by the pucs. some of the older tech companies i think can keep nudging ahead. they have challenges, transition
12:32 pm
to the cloud, whatever it is. it's a longer conversation, but i don't mind good dividends. i'd rather be, have the ability to raise their div dents. >> yeah. >> one more question from stephanie link before i let you run. >> hi, andy. curious if you have a bias towards growth or value? talking about very low growth the next several years. so that would tend to favor growth overvalue. but curious on your thoughts about kind of stylistically where your thinking? >> both. that's the answer. i like to buy cheaps things i think will grow, value that will turn into growth, part of the reason i like health care. beaten up the last year. japan, europe aging up, everyone's spending health care, don't know what to do about it. eth ethical question, lard to imagine it not growing. i like growth. i can't pay 50 times earnings for things. it's hard to get super excited
12:33 pm
about paying for things. if you can find growth, and i think you can, then just can't pay too high a price for it. >> i think that's pretty good place to leave it. andy, so much appreciate your time today. hope our you viewers did as well and hope to have you back soon. >> thank you, andy chase, morgan stanley, private wealth management balled by barrons top ranked financial adviser in the united states. call of the day now. steeple, buy rating on home depot and lowe's today. spending in home improvement sector. steph, you own lows? >> i do and like the space. i think a lot of easy money has been made. both raet great companies. i prefer lowes over home depot's in a process of restructuring, rear organizing, working on efficiency, productivity. there's more to get out of the margin story and more to get out of the preside of the business, because they don't have as big a
12:34 pm
presence. only an 18% market share in this entire market. so more room for this to grow as well as home depot. i just prefer lowes. >> pete from a hope depot standpoint, steeple says, buy rating. 157 dollar price target. not only that, but -- they point out that home depot is the sixth largest internet retailer. >> right. >> catalyst for -- >> and got 20% growth and you just mentioned the i.t. spend. the i.t. spend at home depot la absolutely been something they've been rewarded by and the fact that you've got to love both companies. i just think the management aspect now of home depot, where they are at stocks, because they tend to catch up with one another. right now they seem to be moving together even closer than ever and under those circumstances, if lowes was lagging, i'd be gore for lowes. right now, home depot. >> cliff notes version of the note. the industry is only in the middle innings of a recovery in home remoldals projects.
12:35 pm
sixth laergest internet retailer, 4.5 billion run rate. return to shareholders, 17% return on the market cap through dividends and buy pacs. >> exceptionally strong balance sheets. the margin story used to favor lowes before the great recession. after that, home depot took over in terms of margins and showing the real growth. that's why investors have rewarded home depot more than they have lowes. i like both companies. i think the turnaround potential more favors lowes, because of the margin story. they can lift again. >> home depot doesn't need a turnaround tht listen, neither company -- >> not that lowes needs it. >> neither needs a turnaround, in terms of financial engineering you're going to pay a higher valuation for. >> they think they can close the gap with home depot. that being -- >> they're going to have to do it on the margin side do it free cash flow is down. 16 versus 15.
12:36 pm
throws are the metrix to make the turnaround. involvements, $100 million fulfillment center they're building in tennessee showing focus on ecommerce, to pete's point, i think on a longer-term basis, home depot and lowes, lowes will catch up because the metrix i'm highlighting. >> good news, an expanding category. neither of these companies have to cut each others throats and both can do well. it's not quite what you see in a lot of other categories where you've got to duopoly of retailers and that said, both very aggressive competitors. i like lowes a little better. i like both. i've been on these stocks for years now. lowing broke out in may. retested three times. now it's back, back in an up trend. think about the last year, both stoc are up 20% but year to date, lowes is up double what h.d. is up and i think that can continue. >> because they had a way better quarter. >> no question. >> executed better as well.
12:37 pm
>> no question. i think the stock is probably under owned relative to home depot and i think this could be a triple digit name over the next couple years. >> good day for an intervut with home depot ceo and you're going to get that on "the closing bell." also on the list, ceo of u.p.s., cfo of -- well -- is it the ceo or cfo? not sure. the cfo. >> that's what happened. >> someone from the c suite. >> the ceo of delta will be on and the head of the atlanta fed, all with kelly evans today in atlanta in the 3:00 hour. we got that right. show you transports by the way. there they are. transports are down 2%. >> thanks to delta, maybe. josh? >> yeah. looks like it. >> pete? >> yeah. absolutely it's delta. >> rails, too. >> talking airlines, by the way. >> it's the rails, too. also giving back. the quarters were mixed there as
12:38 pm
well. union pacific had a good number, and others didn't. the debate is still out, are these stocks about to take off? is coal getting priced into these things and just too many questions. you're seeing profit-taking. >> we thought airlines may be ready for a, some kind of reboot, if you will. do we not think so now? does this make you change your view, or no? >> a lot of things hitting the airlines now. we know about it. easy, zika. talk about europe and all of the issues going on over in europe. some concerns about travel. all of these different elements are right now i think hurting the airlines. hurt them not right now and going forward over the next couple of months. if this continues, people pull back, see it in the numbers delta put up today. very disturbing. >> look what expedia had to say about the forward outlook. look at hotel occupancy rates in places like paris. not an ideal climate.
12:39 pm
>> i think it was two or three weeks ago we had a conversation on the floor of the new york stock exchange, or down at post nine one day, thinking that maybe the airlines were poised for a nice comeback. >> they had one. >> coming bay back down to earth. it was short lived. >> been consolidating since march but transports a sloppy mesa couple years now. >> you see -- you're right. you see a come baback but in th moss. >> look at issues with iisis. even here now getting alerts about miami, this is going to be a headwind for these guys. absolutely no question about it. >> and it's good that the ceo is coming on. the ceo, airline if you're a ceo, someone in the auto industry, the rail industry, you're challenged what the next story will be. what's the next chapter? a lot of recovery, a lot of financial engineering, in particular as it related to the auto space. in the airline space a lot was
12:40 pm
just the reduction of capacity, increase of fees. purchasing in terms of new routs, a lot of airlines did that. becomes a question, what it's your next story? how do you drive the growth? and to me kind of questionable in that industry. it's not somewhere i think i would want to be right now. >> all right. to sue herera with the latest headlines. hi, sue. >> hey, scott. what's happening this hour, president obama you saw here on cnbc, holding a joint news conference with the prime minister of singapore after meeting with him at the white house, but the president immediately blasted donald trump. >> i think the republican nominee is unfit to serve as president. i think what's been interesting is the repeated denunciations of his statements by leading republicans. >> new york city mayor bill beblahsio announcing the police commissioner william bratton will retire in september to be
12:41 pm
replaced by department chief o'neal. bratton, 68 years old, held the post since january of 2014. and you thought daily flossing prevented gum disease and cavity, didn't you? think again. apparently there's no proof it works's when the federal government issue any other latest guidelines this year, the flossing recommendation had been removed. in a letter to the a.p. it admitted the effectiveness of flossing had never been researched. dentists all over the world are aghast. that's the news update at this hour. back to you. >> thank you siege, so much, su and new at noon, joining u.s. with what ian reid had to say. >> just got off the phone. it a lot of questions for pfizer. whether the company will split itself into two. reiter ai reiterated they'd make the decision by year end. didn't want to talk about it. questions about m & a and last quarter everybody asking now
12:42 pm
that bio tech valuations came down, start to get better deals? now that biotech recovered a little, asked if that changing the equation again. he said on the phone, i'm not sure they really have come back that much. kind of very interesting to think about. we also talked about whether they're going to consider another potential tax inversion. deitered from that deal with aller gen and in the short term, not something with this administration they'll do. hopeful for long-term tax reform. and drug pricing. strategy in cancer, a suite of cancer drugs to do their own combinations. kind of similar to what we see with gilead and hepatitis c, have that pricing power on combinations. he said that's an appropriate model and the u.s. needs to appreciate the innovation that goes into especially what we've seen in hepatitis c and cancer. talked about the election finally. difficult to predict the outcome but believes both sides of the aisle believe in innovation inherent in the pharmaceutical
12:43 pm
industry. >> pete, owner of the stock? >> love the nail. pulled back today, but coming after a huge run and numbers still impressive today. emerging markets, talk about that at all? something that stood out for me. how well they're doing in china and india. >> good question. didn't check on that on the call. i can check back and see what they think. >> i'm not involved in pfizer. great you own it a nice run. i prefer allergan and i like lilly. those quarters, at least lilly's quarter was much better than expected and that stock lagged substantial pi lp question for you is, do you think that the leaders will continue to lead like the pfizers or do you think people will start to dip into some of the value guys? >> it's a really great question and actually i want to turn that around on you. i think with lilly it's completely fascinating to be in that stock heading into the phase three alzheimer's data. are you betting 0en that or get out before we get there? >> depends what the stock does. the stock lagged the group.
12:44 pm
10 percent brs to 15% compared to brift's meyers or pfizer. i think the value is there and a nice yield. >> great growth in the products and this is a cherry on top. that's something i think is out there. if you get that, a home run. even without that, right now you look at lilly. numbers are impressive and continue to grow. >> right. answer to your question, whether people will stay with the biggest guys in the industry, as people are a little nervous about the risk you see those companies potentially benefit. the alzheimer's question is huge for the entie bir biotech industry. not justifiesor. >> thank you very much. and pete najarian, bullish bet on one mining stock is coming up next. first, though, michelle caruso-cabrera has a look what's coming up on "power lunch." >> just about 15 flints now, scott, wh minutes now. slammed, a view from the lot. "halftime report" you heard them, talking about the
12:45 pm
airlines. royal ka r al caribbean shares right along with them. is it the zika news? joining us exclusively on "power lunch," the ceo. and carl icahn, backing trump, cuban, winfrey in clinton's corner. whose message matters when it comes to november? "halftime" returns right after this break. "power" at the top of the hour. don't move. announcer: "halftime report" with scott wapner is "the" place for market-moving interviews. >> you don't call a company a sewer because the company made a mistake. >> announcer: real money -- >> we are short both tesla and solar city. >> announcer: -- real debates. >> people think that globalization has hurt businesses. it's not. it is technology that's hurt businesses. >> competition is a good thing. i don't want to go back to a single marketplace. >> announcer: the most profitable hour of the trading day. >> i love this show! all i do is get to tweet about this show! i'm on the show. this is the greatest moment of my life! >> announcer: the "halftime report." weekdays at noon eastern.
12:46 pm
12:47 pm
12:48 pm
. . we are back on the "halftime report." pete najarian what do you see in a mining chart? >> huge buying of gdx wept out to june. didn't see a lot extending further than that, scott, even a lot of individual names. we've had some. had ken ross a couple name.
12:49 pm
newmont stands out, trading 45, 50-ish, not far from where it is now. look at that chart. absolutely extraordinary how the stock moved. came in today buying the september 49 calls looking for even more to the upside here. very aggressive buying there. 19,000 of these bought today for $1. it's a big in terms of size, huge trade. dollar, huge trade. somebody expects this stock not only to break out like it is already, 52-week highs but a lot of the times people are looking for another 10 % on top of that, if it's truly a breakout, that's what this stock looks like right now. >> you in? >> i am in. >> options only, equity, too? >> just options. and in probably at least about a month, because i like what they're doing here in september. >> pete, thanks. >> thanks, man. >> pete najarian. unusual activity. a lot of big names to talk about, including kroger, wendy's and p & g. and heading for a seventh straight down day. the first seven-day losing streak in a year. dow down 107.
12:50 pm
we're back after this.
12:51 pm
12:52 pm
we are back now with the trader blitz. four trades on four stocks making news today. first up is wendy's downgraded to sector perform at rbc. josh. >> i don't hate this. it's a little bit sloppy. it's got this channel it's traded between 9 to 11, 11.5. >> you don't hate the stock or you don't hate the call? >> oh, i thought you meant the
12:53 pm
food. the call is a little bit -- a little bit wishy-washy. not telling you to get out of it. it's a sector perform. i don't hate the stock. they've done a ton of work over the last few years to improve the business. they've done just as much as work as burger king had. i think once it's above 11, 11.5 convincingly, the problem is it's had resistance there. long-term investor, 2.5 yield, pretty decent total return play here. >> joey, what do you think of this kroger downgrade? >> great, finally all the analysts are coming in on this stock and throwing in the towel. that's exactly when you want to buy the stock. fuel prices are coming down. the story for kroger in terms of a balance sheet has stayed strong. gross margin was a little bit under pressure because of expens expenses. >> i thought that kroger was benefitting from some of the
12:54 pm
issues at whole foods, but now you have to wonder if walmart is eating into what kroger's doing. >> i disagree with that. and i think you're highlighting that this was a favorite name over the last couple of years. it's under performed year-to-date. what i said at the beginning, analysts now we're all throwing in the towel and acknowledged it hasn't done year-to-date what's expected. that's the time you want to buy the stock. >> okay. talk about p&g. pete did warn current quarter earnings would be effected by currency. steph, you are long the stock which is virtually flat today. >> yeah, i mean, who isn't worried about currency? honestly, especially in this space. they do derive so much revenues overseas. but i would say i thought the quarter was good. they're making progress in terms of organic growth of 2%, mid single digit sales growth. and gross margin is expanded as well. so their guidance is conservative. i'm glad they're conservative. i still like this very much. trading at a discount to clorox
12:55 pm
and colgate. >> yeah, pete, seagate? >> year over year it is down year over year. that might be an issue. the fact it's up over $10 in close to a month is also a bit of an issue. the stock the most interesting part i think about this is they're keeping their dividend where it is. by the way, it's yield 7.8%. i think this gives you an opportunity closer to $30 a share to own this stock. all right, from fitbit to papa john's and kate spade, trading ahead of earnings. game plan for those right there coming up next. like centurylink's broadband network that gives 35,000 fans a cutting edge game experience. or the network that keeps a leading hotel chain's guests connected at work, and at play. or the it platform that powers millions of ecards every day for one of the largest greeting card companies. businesses count on communication, and communication counts on centurylink.
12:56 pm
[text message alert rings] [texting keystrokes]
12:57 pm
12:58 pm
huge week for earnings so far they continue to roll in after the bell today. fitbit, papa johns, joe, fitbit. >> still don't want to buy the stock. still don't believe in the stock. echoing josh's comments about what he wears a fitbit around his waist, i think a mirror and blood test are all you need. >> does anybody believe in fitbit? no one. no one willing to go there. how about papa john's? josh. >> i believe in papa john's. >> food contributor. >> listen, real talk. if you want to see what a stock under accumulation looks like, punch up pzza, the last time they reported a quarter was a momentary disappointment. the stock knifed through the 50-day to the downside, recovered within like hours and got right back on track with the longer term trend. this thing is going to make a new all-time high, and i think
12:59 pm
continues to roll up. pizza is hot right now. anything delivery is hot right now. and this one dominos, they do not disappoint investors. >> okay, steph, you have your eye on aig, which is tomorrow. >> yeah. actually just recently bought it. it's a small position, so we'll see how it does. but i like the fact there's a restructuring story here. the ceo knows he needs to improve underwriting margins. and if he doesn't, you have activism in there trading at 0.7 times book value and i think there is some value here. plus, it's not sensitive to rates and that i kind of like. >> i think peter hancock will be on tomorrow on "squawk on the street," so tune in to that. pete. >> yeah, that's tomorrow morning. karen firestone stitting here last week, look at the way the stock has traded. it's a growth stock. valuation is not incredibly awful. when you look at everything right now you see this trading right near the 52-week highs. they announced a deal with a hydroponic group as well today. >> you have a green thumb,
1:00 pm
right? >> i have a bit of a green thumb. >> home depot every saturday. >> you have an opinion. >> strong dollar going to weigh. >> there's the dow down 137 points going for seven-day losing streak, hasn't done that in a year. "power lunch" picks up that story right now. indeed we do, scott, thanks very much. welcome everybody, i'm tyler mathisen and here is what's on the menu. hitting the skids, the big three automakers down big on sales that suggest they may be plateauing. certainly not growing at the explosive rates of the past couple years. we're going to hit the car lot ahead. rough seas, royal caribbean shares plunging on earnings news. what will it take to right the ship? the ceo will talk to us exclusively. and e-mail exhaustion, the real cost of our out of office overload. buckle up, folks, busy two hours from power starts


info Stream Only

Uploaded by TV Archive on