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tv   Fast Money Halftime Report  CNBC  August 3, 2016 12:00pm-1:01pm EDT

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>> exactly. >> a long, strange trip it's been. >> wow. >> david, thanks for joining us. thanks, as always. heading towards noontime on the east coast, over 0 to scott wapr and the "halftime report." all right, kayla. thanks. welcome to the "halftime report." i'm scott wapner. top trade this hour, pullback or push forward? it is the central question for investors these days, especially with the dow at rick of its longest losing streak in some five years. all of this as some of the biggest names in the business now from gundlach to gross, and within 1% of record levels, is the so-called smart money right? with us for the hour today, steve weiss, josh brown and jon and pete najarian. pete, this question to you.
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a lot of anyway snaysayers. smart money, right or wrong? >> smart money right in terms of we've had an incredible run to the up side, considering where we came from brexit. rather be in the market an buy cheap protection. paul briton on, talking about volatility, we bring it up constantly. if you can ride this market, this bull, you've been able to ride probably the last couple of hundred points in the s&p because of the fact low volatility has given the opportunity to buy that protection at a cheap level. if you weren't doing that, and you're just sticking with these stocks, i do think you're playing with fire. at some point in time we're going to see a pullback. werther that means 5%, 10%, whatever, i don't think you should be in the market if you don't have protection. >> josh, it started back in april. paul singer make as great deal of sense to own gold. stan druckenmiller, bull market exhausting itself. get out of the stock market. icahn, june, false market. jim grant in july, still bullish
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today on gold. see it at 1320. bill gross, i don't like stocks or bonds. i like gold. gundlach, sell everything. right or wrong? >> listen, it's -- i don't know if it's right or wrong, because you're talking in some cases a question of perspective, others time frame. a lot on the board are bright and successful. not to take anything ewa away f them, but they've been saying this a long time. you know they're wrong because the rationale keeps changing in general. china, europe, china again. junk bonds blow up the economy. fed's going to do it. ultimately it comes to an end. timing is smot something a regular person should engage in. i could have laid out similar reasons in 2011 to run for the hills, and that was one of best buying opportunities probably of my generation. so these things ultimately will
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knock the market loose at some point. we'll have another correction. we just had two of them, 11% each in august and january. it will happen again. >> doc, the market's rebounded, right? down seven straight days for the dow. even in that time frame, down 1.5%. >> right. >> these smaller sort of incremental moves. but are we at risk, do you think, of a larger august correction or a summer swoon in the market after reaching those new highs? >> we would be, judge, if, indeed, the consumer cut back significantly. we know the consumer had to tap into savings. we talked about it this network talked about it ad nauseam yesterday, how the numbers we saw indicate the consumer continued to spend. that's how they got the gdp number on the consumer spending side, consumer spending up 4%. whereas business was still cutting back. so the consumer which is 70%, continues to carry us, and they tapped into savings to do it.
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if they decide, i'm not going to tap into savings anymore, in fact, put more money away, that could be one of those catalysts, but to your point. 300-point drop in the past week. since last wednesday to now for the dow that is. and you had mr. gundlach talking about christopher wolf painting, citing when he said, sell everything, sell the car, sell the kids. he's talking about a painting, folks. he happened to say he agreed with the sentiment that the artist was expressing, but i think he's a smart guy and he's buying wiggle room. >> and taking grundlock out of context. >> the naysayers, if you call them that, too negative? look at the metrix out there. peak auto, $18 million, gdp, jobs solid. retail sales 2.7% in june. doc mentioned gdp number in consumer spending.
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consumers, alive and well spending at a 4.2% annual rate. the most negative, too negative? >> i don't think they're too negative. i think there's reason to be negative. we're in a world that, who knows what's going on? i mean, pick up a paper every day. more negative news. number one. number two, the economy trades off consumer confidence and we're looking at two of the most disliked candidates regardless which political affiliation, in history. how do you have confidence to go out spend? how do ceos have confidence to go out and spend when you look at what the next four years could be? that aside, i spend, and again yesterday, so much time talking to people that you put up on the screen, and the public markets both in bonds and equities are severely challenged by so many different paradigms. your guests today on "squawk" mentioned it astutely. what we see. unless you have really long duration capital, patient capital in more of the private markets, i think that the
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returns in the public markets are very muted and i mean single digits. then you say to yourself, what's the risk on that? i think it's pretty much in balance with a slight grind up to the upside providing yields and treasuries stay where they are. >> put it this way. in more plain english in a simple question. given where the stock market is today, in light of some of these comments from the gundlocks to gross, jim grant and others, are you more apt today to buy or sell stocks? pete? a simple question. >> it is a simple question. i find myself buying more than selling. i'm taking off positions i put on maybe a week, two weeks, two months ago, but i'm taking off positions and finding new opportunities. think of this. a couple weeks ago going into the earnings season how great did chips look at that time? not that great. suddenly a great move to the up side. look at serous logic, intel ran up towards 36. pulled back since that time, but look at qualcomm. there's always opportunities,
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scott. always searching for that opportunity, but it's like everything else. a rotation. looking for the best spot to be, to buy, and taking off things that have performed. >> rarely if ever buy markets. finding situations i like. a healthy dose of cash. >> individual equities. >> right, as pete said earlier and i said monday, you've got to be really, really foolish not to buy protection in this market, because it is so, so cheap. >> there are breakouts in every sector. >> yeah. >> individual stories that have been setting up for months as the market has been grinding against that old high, and now they've broken out, and we're not talking about penny stocks or one drug biotech companies. we're talking massive stocks that haven't done anything for a long time now taking out historic levels. it's important to pay attention to that. the other thing, again, comes back to a question, when you say, buy or sell today? are you funding a retirement with the money and taking it out next month? that's a very different question. i'm 39 years old. i'm probably live to see dow
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100,000. that would be a compound annual return of about 7%. so when you ask me that question, i'm not a seller -- i think the question's greater than that. i think it is, we've mentioned it already that these other experiences we've had in the markets since let's call it last summer. since last august when china started to blow up a bit, the market had a pretty steep correction, almost 10%. if i recall. >> uh-huh. >> then came back. then there was another event and the markets sold off pretty steeply and then it came back. then a brexit, market came back. we're at this point, people are nervous about the market whether folks i mentioned top of the show, touting alarms, larry fink from a month ago, not that far ago saying the market isn't justified at these levels. it's been resilient. in danger of missing something good if you heed this advice? >> the thing to keep in mind, the terminal problem with
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pessimism and perma bearishness, bears tell you 10. ten, they say 20, 20, new bear market, down 35. down that much is where they come out on the network say we're going to zero, folks. it's never enough. we had an 11% correction starting the year. another one last august, and when you were at the depth of those corrections, the people who were saying, it's in big trouble, they actually get even more bellicose and make it sound like it's worse. it's never enough damage to the down side. >> never enough up side. trades up 5%. no, up 10. dow, 50,000. >> always rational. >> it has. >> historic will. >> always rational. >> it's not like we're hitting mega new highs. how far have we actually moved in a year and a half? flat until the recent move and under current, under the top line keep churning and churning. >> should you believe the positive or the negative?
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you could paint the picture, however, since you're talking about paintings earlier, paint a picture to look however you want to do support your case. negative, say, europe's a mess. look at banks. deutsche banks, record low. italian banks worrisome. >> markets are smart. it's the smartest people on earth participating. all of the equities we talk about all of the commodities on a daily basis are repricing based on these reality. this information is in the market. we all are aware that europe is not doing well. what do you got for me next? >> and that's where it could turn, judge. in other words, okay. do you want to bet on armageddon? bet that between deutsche bank and some of the italian banks and so forth we fall off a cliff in europe and they can't save them? i'd take the opposite side on that bet. that could be one of the catalysts driving markets higher. carney, likely to make an interest rate cut at the next
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meeting's another thing that could buoy the markets in my opinion. i'd ratheren bill gross or mr. gundlach making the call here at record high rather than 100 points ago when drunkenmiller made that call. it's 100 points higher. >> been in the minors successfully, year to date. gold up 26%. miners up a lot. stay with that trade? take it a step. >> i say yes, because only because we always are tracking. jon and i talk about it all the time. tracking unusual activity in the marketplace. it wasn't just in december, first flagged this to everything. looked in march and continued to see aggressive buying and now even yesterday, now seeing a little pullback, one day. gold miners a little today. but we had newmont buying, scott, stock breaking out. see it constantly across the board. miners moving to the upside, continue to do so.
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silver wheaton i continue to ride along with slv in terms of silver itself. proven this year, i don't think, despite the fact the market isn't near record highs, we've seen these, these stocks, gold and silver moving towards highs as were el. it didn't mean they can't work together. >> new highs in and of themselves are not a reason to sell and not aberrational. the -- stock market on all day going back to 1926, spends about 25% of its time within proximity of a new all-time record high. it's not weird, not a signal, and it's certainly not something you wa unt to have a knee-jerk reaction to. oh a new high. let me fade it. markets are at new highs a lot of the time. >> the market trades up 80% of the time. however, in between that 80% of the time, you have extended periods when it goes down. could be ten-year periods, as we've seen. it was a 16-year period with the nasdaq, when it didn't reach the high it previously reached. so that's why you don't buy markets. why you buy stocks.
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so you can cut numbers any way you want to cut them to make your story. but i think you have to be tactical and always keep dry powder to take advantage of those opportunities. >> okay. by the way -- bill gross -- >> are you done with us at this point? >> for this discussion. >> an earful? >> i am. not at 2:00 p.m. "power lunch," bill gross, janus capital group on to discuss his outlook. much more as well. do not miss that at 2:00 p.m. eastern time today. just getting warmed up on the "halftime report." straight ahead, a big jump for twitter, but watch out below. we have news that may knock that stack down. also ahead -- >> announcer: our partners say after oil falls 10 buck as barrel or more in two months, one month later crude lost another 3% on average. one an 4ri69s see something in the oil patch he likes a lot. telling investors to get in now. that's next. also ahead, we're getting you ahead of two big quarterly
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reports. those stocks could be movers. talking herbalife and tesla coming up. this is the "halftime report" with scott wapner on cnbc. my experience with usaa is awesome. homeowners insurance life insurance automobile insurance i spent 20 years active duty they still refer to me as "gunnery sergeant" when i call being a usaa member because of my service in the military to pass that on to my kids something that makes me happy my name is roger zapata and i'm a usaa member for life. usaa. we know what it means to serve. get an insurance quote and see why 92% of our members plan to stay for life. man: ♪ you're beautiful [click]
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back back to the "halftime report." new at noon, i hesitate to bring it up, sees far femped if not completely out there. twitter shares up a little more than 4%.
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up more than 6%alities while ago on a market rumor of a possible takeover by two folks well known to most of you. steve ballmer and the prince. no more than that, given the stock's move i called bob peck who covers the company for suntrust, you know. he tells me a deal seems unlikely and he doubts twitter's board would eastern be willing to sell the company that they're 100% behind ceo jack dorsey and his turnaround plans more that mr. dorsey would be willing to sell now or anytime soon amounting to admitting failure. mr. peck telling me a deal in 2017 of some sort wouldn't surprise him, but now is simply too soon to give up on the dorsey plan. i should also let you know that i reached out to steve ballmer for a comment. he e-mailed me back saying, no comment. so in any respect, as i said, hesitant to even put it out there. since twit sir a closely followed name, stock up more
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than 6%. tell you bob peck told me he doesn't think that that's likely at all. >> well, look -- >> comments, complaints? >> complaints, we only have an hour show. >> why -- let me say, why are these guys even mentioned? as far as we know, they do, towards -- as of when? >> last october. >> at of last october, both balmer and prince ali have stakes in twitter. >> 10 % stakes. >> not like they're coming out of nowhere. >> a huge investor base and huge install base, rather and not likely they get bought. the question is always valuation and who thinks they can take on the task of changing? i disagree with bob peck. if dorsey's able to sell than a higher price than when he came in, it's a win. you can spin it whatever way you want tht don't you have to take into consideration price is not the only thing that matters to dorsey? in some respects this is his
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baby. he came back -- >> doesn't matter. the clippers, $2 million. >> spin it any way want. move on. pretty soon people forget it and it won't damage his reputation. a very successful silicon valley v.c. plater. no every one works. this work spectacularly well for him. does it work, still a declining business asset or not? you don't own a stock just for take-out. fundamentals, no reason to own t. people seem to own twitter at this point simply for a take-out. says don't do it but a lot of people truly are. >> around that 14 level, judge, you do buy it and i don't want to ever short it here because jack is on a relatively short leash according to what we've heard. something has to happen with this name. >> where is he? what's the -- >> got a year basically about a year from the time that they put him in place, and not a lot longer than that, to get this thing ready. >> the only foot kicking dorsey
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out of the door is his own. >> disagree. i think his focus will be on square, if he can't get this turned around. and one of the ways that, one of the exits for the rest of the investors and the insiders who he cares about, this is not a slam on jack, is that they would have to actually explore a sale. now, balmer and -- anybody's guess. this would make sense for someone and at some level. that's why i can't be short the name, judge. i can be a buyer at 14. more or less, you know -- i see -- >> the share of the name -- you're the shareholder. >> i hope this is false. i'm a shareholder. >> you're not going to fire jack, though, right? >> no. >> why do you hope this is false? >> because i think that the problems of today with monetizing the platform are very well known, although the solution is not well understood, and i don't believe i have a solution for it but i believe there is a solution anywhere
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that you can get 350 million people to congregate on a monthly basis, you can make money from it. they haven't hit upon the solution as to how. they may never but while the chance is still out there, to sell this company for $20 a share i think would cut us off at the legs's one last thing. >> they are the two largest -- the third and fourth largest holders of twitter shares. >> yeah. listen, i hope they don't -- they would be stealing the property. it would be a great deal for them. running away with it ats 20ds $ share. >> you need an operator. synergistic business. who's going to run it? look say, hey, wait. dorsey has to -- >> has to be -- >> exactly. >> who's going to run it? how the fact they continue to lose executives every day seems like we read they've lost somebody else. today a communications head. there are people there, scott that continue to want to hit the exit doors. why is that? it makes you kind of question the whole thing, but it does sort of set up the idea that
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somebody could be looking and gui guys are wanting out in front of this whole thing. >> moving on. kate spade plunges on a big miss. fitbit is off and running on a surprise beat. we'll hit both stories next in "the blitz." plus, did he believe ponytails, double unusual activity, nach the najarians are watching is coming up. 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.
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welcome back to the "halftime report." green across the picture, slight gains. we'll take it. wti crude, a gain of some 3.25%.
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sharon epperson has the latest news headlines. >> scott, what's happening at this hour. a police officer with the d.c. metro transit system charged with providing support to isis. 36-year-old nicholas young was arrested and is due in court later today. he's been under surveillance since 2010. it's the first time a law enforcement officer has been accused of aiding the terror group. mastercard says 80% of its consumer credit cards in the u.s. now have emv chips representing an 88% increase in chip card adoption since october. the shift puts responsibility of fraud on merchants if customers use a chip card but the merchant does not have a chip card reader. u.s. news and world reports ranks the mayo clinic in minnesota as the country's top hospital. it compared nearly 5,000 medical centers across the country. the cleveland clinic came in second. swimmer michael phelps named team usa's flag bearer. phelps is the most decorated olympic athlete of all-time and
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will lead the american athletes into rio stadium during friday's opening ceremony. that's the cnbc news update at this hour. back to you, scott. >> sharon epperson, thanks. time for the blitz. kate spade sinking after missing earnings slashing full year forecasts as well. doc, whoa. 21%. >> yeah. >> almost 22%. 14 million share turnover, judge, a nightmare. however, i put on a spread, a longer term spread, way out therance because of this big drop in the options. didn't buy the stock. which i'm always tempted to do on a big drop like this. instead, put on an options spread. see if it bounces by the end of the year. >> show me shares of scott's miracle grow. pete, you nailed it yesterday. >> i was following on firestone, credit to her, great call in the stock, continues to be in the stock. valuation and the yield that you're getting out of the stock now. they performed well considering the fact weather was difficult in may and june.
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had a great quarter and then look forward and some of the engineering they're doing, buybacks of dividends, high hitting 52-weeks highs. >> papa john's. crushed it yesterday. up 4.5%. >> this has ban really great run for the stock but only now eclipsing its high from a couple years ago. pizza is hot. people don't want to go anywhere. look at the news. it's like the news is coming to an end every day. i just order stuff like on the app and whatever. dominoes is working, papa john's working. i think it goes higher. >> and what's up with -- >> i wouldn't go over, for me. >> daily, papa john's. >> we are still on cable. you could say it. these stocks can't get out of their own way. trends disastrous, every time they move up with the markets and people like health care, the one segment that doesn't work. emissions down.
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saw today health care beat up because they missed. today it's community cyh got beat up. the strength and power remains in managed care. however, those stocks are trading at high pes. so i like them. i'm waiting for them to come back, managed care. stay away from the hospitals. >> fitbit, doc, surprise? >> what a great report, yeah. and this one's not a rumor not like the twitter rumor you spoke of the segment before. this one was blowout earnings. 22 million share turnover, judge. i said last week, lucky enough to talk to the people at the company, not about earnings but about the product and they're pretty psyched. i'm psyched about it. >> i'm a seller. a really, really big, fat short position in here. a little bit of pain for these guys might have overstayed their welcome. every one of these earnings, a better opportunity to sell them by. >> look at your face. >> what? just saying. >> oh, by the way, i meant to mention, thematically, well on
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pops and drops today or the trader blitz. >> wasn't pops and drops. >> trader blitz. >> think about it. scott's miracle grow and -- got fitbit, you work out. you got hospitals. >> papa john. >> i got the pizza stock. >> scot's miracle grow. >> it is a rogaine substance. >> thanks for the reminder. >> sorry. >> talking about his hair? [ laughter ] >> let talk about -- biotechs. >> supposed to be switzerland. neutral. >> sometimes you got to join the fight. talk biotech. ibb on pace for a sixth straight positive session hitting a six-month high. back to you, bullish biotech. love the space? >> bullish a while, still love the space. i don't know if biogen takes off or not. where i like the take-outs mid and small cap, solid amongst themselves. and for consolidation by the big companies. here's what you have to watch out for. some of these companies have actually morgue gamped the future not in a bad way but
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licensed with the big capgiven and limited to one buyer. i like biosciences, partnered with one indication, they still have a big pipeline that's essentially their own. so they'll benefit from that stock that's done well. a phase three going through now. dealing with central nervous system, very strong, keeps moving up every day. probably decision within the next month'sthe space will continue to be hot and given we'll be another four years of a do-nothing administration do-nothing congress i don't see any type of drug pricing getting done. so i continue to love the space. health care grows every year whether recession or not. it will continue to grow. >> josh? >> listen to me now and believe me later. this is a sector that the broad health care, xlv, is flat over one-year period. the ibb is still down 22%.
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and you talk about, where can i earn a return on my money in a low rate environment, low return environment? growth of the reasonable price continues to flop to these names because they're all growing. even if the overall economy is not. they've got earnings growth. they've got innovation. they're reasonably priced. at a 20% discount where the they were a year ago in some cases and some cases more because earnings have grown. so i think this is a good place to be. technicals are matching with the fundamental story. exactly what you want to see. >> what i like about bio -- quick, what i like about biogen. morgan stanley a note out, value, $290 a share. add in the pipeline, $95 a share. a price target makes a lot of sense. look at the pipeline, scott, 13 in mid-and late-stage drugs and a lot involved in the alzheimer's area that is something that cannot be discounted enough, i mean by these guys. shouldn't be discounted as much as it is now because that could be huge. >> going off bio tech,
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allerganallergan, $ $40 billion in cash. will make an acquisition. doesn't matter. smart with acquisitions continue to be smart plus their own pipeline is very, very strong and exceedingly well managed. that's a great story as well. >> and meg terrell knocked it down relating to allergan early. next up, one analyst says now is the time to get into this oil name. our call of the day. tesla's quarterly report due after the bell. elan must deliver. >> always a bull market somewhere. >> nasdaq, echolab and the ice. exchange doing well. back after this. at the marine mammal center, the environment is everything.
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we want to do our very best for each and every animal, and we want to operate a sustainable facility. and pg&e has been a partner helping us to achieve that. we've helped the marine mammal center go solar, install electric vehicle charging stations, and become more energy efficient. pg&e has allowed us to be the most sustainable organization we can be. any time you help a customer, it's a really good feeling. it's especially so when it's a customer that's doing such good and important work for the environment. together, we're building a better california.
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for phillips, two things. valuation, you mentioned. price target actually didn't change with the upgrade. just a matter of the stock sort of retracing to some attractive upside to that level and then secondly the company has a pretty significant spending decrease next year.
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a couple major projects rolling off to contribute cash. we see potential for catalyst or dividend or buyback front. stated stay the same investment levels. oil this low, the idea production slow down, seems a good time to redirect profds to the shareholders. >> heard a lot of love on the desk lately for refiners and maybe there is a newfound love or they're coming back. pete najarian on the desk has a question for you. he is in this stock. >> i got in just yesterday. as a matter of fact, unusual activity yesterday, buying short term and also today came back and looking even further term in a november. looking somewhere close to your price target, frankly. but a quick question. is this a call on generally the refiners or i know it's specific to psx. do you like the entire refiner world right now? >> from a sentiment standpoint i do. outperform ratings on all four refining names.
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phillips the last one to join the group, and so, yeah. phillips, a valuation call in isolation. general refining is very hated right now. i think a big thing we needed to get through this earnings period where results were broadly weak. there might not be much near-term upside because a lot of supply of refined products out there pressing on margins but if you're looking through the cycle, certainly the down side is limited. from that standpoint it is a bit of a broader call as well. >> sam, i also bought this yesterday and noted that activity pete talked about as far as unusually heavy out at the 82.50 strike, way out in november this year. but as far as mid-stream and chemicals does that help play into this, or is it mainly on the refining side and the growing strength there? because the reason i ask is i'm also long valero. >> well, so that other exposure would actually make phillips less li
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less levered. a big move in refining phillips might underperform the others just from that piece alone. the mid-stream side we think has good prospects, too. production growth declining this year. that's a problem for sort of pipeline transportation companies. and the fractionation companies as well. phillips has all that in the business. chemicals i think a little more muted on. that is a little -- more oil exposed, because obviously european chemical companies consume oil to make their plastics and the u.s. consume natural gas. a lot of it is the cost advantage between gas and oil. the cycle there might be a little slower to materialize, but the other segments i think are progressing through the cycle, too. so it's all coming together for phillips. >> sam, appreciate it. sam march -- margolin. talk about the energy on tap. continental, marathon, apache, who likes what? who owns what? >> i think that -- i don't own them. by the way, joe terranova all over phillips.
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i mentioned it monday. i think the demise of oil is really overstated. we've seen the lows. that was a while ago in january. so i think it's sort of safe to play the group, and i also don't believe they're going to be hits to the bank ball ins sheets as we saw in the past. got to be selective. stay away from the ones that have really the hurt balance sheets. but overall, i'm going with the gassier name. if nat names. sold off 10%. i like that. can't own them a quarter. own for a couple quarters and going into winter, a good time. >> josh, not that selective? own xle? >> i don't want equipment names. too hard for me. i want to err to the side of caution but still want to be there. i'm in the dividend paying entities that are engaging in bibacks, good balance sheets. phillips is in that group and worked out well so far. i think it will continue to. >> for much more on oil and the story there head over to cnbc.com or you can head there to cnbc.com/pro.
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coming up, the najarians brothers trying nike you someone. and look at the heat sector map. highs today. up four points. "halftime report" is back after this. i sleep extremely hot. >> announcer: follow us on cnbc.com. close it in the middlef the night. he'd open it in the middle of the night. it was a nightmare. my new tempur-breeze stays cool to the touch. not cold but cool. it naturally adapts to your body and somehow creates the perfect temperature for you. i feel like this was made just for me- like they had me in mind. i don't know how they do that. (vo) sleep cooler, wake more refreshed. discover the new tempur-breeze.
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the najarian brothers always on the hunt for unusual trades in the options market. they've made their way to the telestrato telestrator. doc what do you see? >> well, activision blizzard, jump. stock bottomed in february. call it $27 a share. now back up to $40. mkm cut their recommendation on it, but moved the price target up last uniqweek. a correction. getting back to work now and what we saw was september 43 call, judge. stepped in there, buying these calls. calls are already up i think 12% on the day. stock's making about a half percent move basically unchange. to tee me lome looks the stock e by september. probably be in there buying the calls. probably in, in two weeks. >> owned it a while. a great story. move to digital still happening away from console, higher margin.
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>> heard that from, what was it? ea today? electronic arts. >> yeah. one of the games they're about to release or releasing, 10 million beta users. by far, a record.all cylinders gaming is not going away. >> buyers in there as well. interesting chart, you can see this entire just complete decimation of the stock, but then look at what it's been lately, scott. talk about retail all the time. consumer all the time. tell you what, what i saw was interesting today, somebody come out buys the august 25 calls. most interesting part, these particular calls, 4,700 trade, expire friday. somebody looking for a very violent, quick move, maybe do exceed 25 in a hurry between now and friday, i jumped in these. i know your question. yes, i will be out by friday. i have to be. >> yeah. you know me too well. guys, thank you. >> yep. >> thank you. the growbrothers najarian. dollar hitting its lowest level in six weeks. coming uptesla reports earnings
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we are watching the dollar index and ahead of the jobs report friday got a little bounce on our hands. jack, let me ask you this. a strong jobs number could set the stage for a fall rate hike. what does that mean for the dollar index?index? >> well, if we do have a rate hike, certainly that would mean the dollar index would be screaming higher. but that's not the sentiment here in chicago, jackie. end of july we saw it really elevate above 97. but that anemic gdp number chop blocked the dollar index, brought it down to 95. but i think it resumes upward bias in the face of all the central bankers influencing the markets overseas. >> the fed has always been hard to know what they're going to do. we're testing that level of 95. do you think we breakout or break down? >> you know, that's the support right there, jackie. i actually think we break above that -- or stay above that number. because as jeff mentioned you have central banks around the world adding stimulus and also fed lockhard and one of the other members talking about raising rates before the end of the year. looks like the dollar is going
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to go higher and hold a 95. >> we'll watch closely. meantime, for more on futures head to the website futuresnow.cnbc.com. scott, we have the show at 1:00 p.m. tomorrow. >> which is why we'll be there then. jackie, thank you so much. three hours left to trade today, we're going to look ahead to the big earnings on deck. tesla, herbalife, more when "halftime report" comes back. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade.
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one of the best performing sectors. there's bank of america citi group up better than 2%, the others, are we feeling any better about the banks or no? >> you know, i'm surprised they've held up so well. they came down a little over the last week. held up better than most groups. look, i'm feeling better there's some stability there, but you're not going to see the big move unless rates move up. so yields aren't that big in most of them so the answer is i don't own them, i don't feel any rush to get in. they're okay. >> used to, that's the point, right? sort of threw in the towel for a while on the banks. >> yeah, and haven't missed anything. >> for sure. >> talk about stability i think the one thing that turned the market around a little bit on monday was when jamie dimon was getting interviewed and said, look, there are some issues. it's not a great market for us right now but we see ourselves moving higher. and by him putting his money where his mouth is that stands out. still, look where that stock is right now. even today, scott, we talked trading little under 63, here it is 64, gets a yield, to your
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point. you can understand j.p. morgan being one of the banking sector long focus. >> much of the bank is about that chart and others in europe, that was deutsche bank we just had on there. but the italian banks have been a real flash point of concern. >> yeah, well, look, you got past the stress tests, which by the way were not pass/fail. they were a little more subjective. more like a beauty pageant than a test. but that's fine. deutsche bank is trying to double bottom here. if you look at the lows from july when we were at max pessimism on the heels of what happened with brexit, it's right now at those same levels. but the selling doesn't seem to be quite as aggressive. if it can bounce off these levels maybe it takes a bit of a down -- >> down 27% in three months. that's pretty aggressive. >> sure. i'm talking the price level. we know it's been a dog. but if it doesn't break below those july levels, which is still an if by the way, but if it doesn't and can recover from here, it could be another leg to
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the u.s. banks because this is just one more albatross. >> there's one thing with the banks being disintermediated by companies like airies. you've got these one-off investment banks that have come out and they're taking some of the prime business. so they're being picked apart. so in terms of loans, in terms of investment banking engagements. guggenheim is another one. >> wealth management. >> wealth management also. they're getting it from all ends. >> let's move ahead and talk about some earnings after the bell. there's some big name companies. let's lead it off with tesla. steve. >> look, you got to be crazy to own a company like this with such poor corporate governance. to go out and buy solarcity, to think i'm going to go in and buy a tesla and buy a solar panel, i think that's lunacy. i think you got tired of funding solarcity with spacex, now i'll fund it with tesla. i think it's a mistake. i wouldn't own the stock. >> josh. >> no position. too tough. it's too hard.
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>> i think the most impressive part about it, scott, quite frankly is how teflon it's been. i mean, you throw as much as tesla's had thrown at it and they've done it to themselves, let's be honest, but as much as you could possibly throw at them and look at where the stock is. it still holds those averages. i think until it cracks under both the 50 and 200-day which are almost right next to each other, until it breaks that, scott, it's been an absolutely roll. >> it's still a cult of personality. >> yep. >> and they have not given up on him. >> it's a $14 straddle right now, judge, so means up or down by friday $14. this one is one that clearly does move about that. let's call it 7% when they do announce earnings it usually moves to the upper end or lower end of that. and if musk doesn't come up with the targets that he's set for himself -- >> that's the whole thing. >> -- it's going to hit the lower end. >> what would you be more apt to do from an options standpoint today in tesla? >> i'm mildly bullish on the company right here.
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despite of what i just said as far as does he make those optimistic projections that he himself has put out there. >> fundamentally bullish or stock price. >> stock price, not fundamental. >> i wanted to specifically sort of separate the two. >> yep. and i think most people that invest in it have to do that too. >> what about herbalife? how are we viewing that sort of now that we've made a significant move forward in the progression of the narrative there after the settlement with the ftc. >> it's not a name i feel i have to be involved in. but if i were to be involved in i think bill ackman's right. it's a short. given what the government's come out and said. they've basically said you're guilty but we're going to let you be in business and run the business off. i mean, there's basically no value in people buying it for themselves. it's like, you know, buy it, use it for yourself. and we brought this company public and did the same work, is it a pyramid scheme? it mildly avoided being deemed a
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pyramid scheme. but, look, i think it's a short. i mean, the handcuffs they put on are incredible. >> let's bring the conversation full circle back to where we started the hour, and that's the broader market look. you're getting towards the latter stages of earnings season and earnings are what we're talking about now. what will the headline be at the end of this earnings season about this reporting period? >> that we stepped over a very low bar in many, many cases, i would say. and we started that with the financials. the bar was set extremely low. they all seemed to be able to beat it pretty significantly. and that really started to kick off this catalyst of getting back to the upside. >> more importantly than that to pete's point earnings estimates now started to tick up again, which we really haven't seen for a while. for $127 a share over the next four quarters we're about a 17 forward multiple. the historic average multiple over the last 25 years is about 16. so we're a little bit above historically where we've been,
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but given where interest rates are it's entirely rational. >> fair enough. >> is that what we're going to remember earnings season as, justifying this market. >> it's the same type of earnings season we've seen going back the last couple years. >> guys, good stuff. see you tomorrow. all of you as well. power starts now. welcome to "power lunch." i'm michelle caruso-cabrera. and here's what's on the menu, trouble in trumpland. john harwood will join us with a coming intervention they're calling it to save the campaign. also ahead, a fashionable disaster du jour, why a soho staple is getting crushed. marriott is checking in on you, and also everything you do on social media. and they're not alone. we'll explain. "power lunch" starts right now. indeed it

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