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tv   Fast Money Halftime Report  CNBC  August 16, 2016 12:00pm-1:01pm EDT

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fed speak adding uncertainty into the equation on both sides now might get a shake-up before that. >> certainly the lesson today on the ten year trying to work its way back to 16 for the first time in a while. see what the afternoon does bring. for now over to headquarters, wapner and "the half." carl, thanks. welcome to the "halftime report." i'm scott wapner. today's top trade, the activist and morgan stanley. shares on the move this hour on news that value act has taken a billion dollar stake in the bank. the fund's ceo telling me last night she supportive of ceo james gorman and the bank is being misunderstood by investors. all comes with morgan stanley shares down more than 20% over the past year. he tells me investors are too focused on trading and lending businesses and not given credit to higher growth segments like wealth and investment management. with us for the hour today, our
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panel. pete najarian to you first. down over the past year. worst performer of large banks. kbw indention down ten. what's the problem? >> everybody puts banks in the same pocket right now together, and i think when you look at morgan stanley, goldman sachs, they're separate and particularly morgan stanley. focus and emphasis put on wealth management and that's what i think value act is lookingality now, where the focus should be. give you a small example. how many quarters in a row did we hear when dick's sporting goods reported everything was actually pretty good, golf galaxy awful and everybody started selling that stock. look at morgan stanley. the focus, wealth management. where they're moving themselves into that field more and more and more, getting more exposure and because of that, people need to focus on, is that the right thing? i think it is. i think that bodes favorably for morgan stanley. >> joe, the point of making. focus on the low captain intensive businesses like wealth management, investment business,
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investment advisory and the like and the market seems overly focused on other issues, fixed income, currency, commodity, regulatory trading, saying feels like missing the forest for the trees? >> this is an incredibly interesting position that he's taken, because, really, this is unique. you don't see a lot of activism in the financial space in particular a time when you have to get regulatory approval to increase your dividend and buy back. i think he goes after morgan stanley because 0 on a market cap size it's the smallest of the six bigging banks. the question becomes does this open a larger narrative surrounding what over the past seven year has been the position for many, including myself, banks need to hoard cash and leave it on their balance sheet? leaves it open to conversation. morgan stanley is in transition. stock went from 20 to 35, from 2013 to 2015 and fell back.
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talk to many in the wealth management division, which i do. right now a little bit of uncomfortableness with a lot of the loss of what they did. and greg fleming's is not there. he's a rock star on wall street. the fact he's not there, problem for the wealth management division. a lot going on there right now. >> and golden goose. steph, how do you view this now that value act even though not saying that -- gorman is the problem. their point of view, at least at this point is the market is the problem. they're the ones getting it wrong. not gorman? >> seems like a friendly activist, certainly, for sure. so i don't know how much pressure he'll put on gorman or the board for that matter. the problemsy morgan stanley, it's been inconsistent. the ceo has been inconsistent. the businesses inconsistent. i think the strategy has been very good. getting more wealth management, more fee-based businesses, improving cost structure, balance sheet is very good, but it's been every other quarter where the company's been able to
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deliver versus something like goldman, which is consistently delivered. you can see why this stock trades as a discounty. that said, though, scott, this stock outperformed the big five year to date. i think -- >> sure, the big picture view is what we're looking at over the past year. >> right. >> it's lagged and lagged somewhat dramatically, especially looking at the broader kbw index? >> and just be kircht and deliver a couple quarters in a row and div good guidance, i think that will go a long way. >> i'm going to be very contrarian here and say that this focus on wealth management may be a little bit looking in the rearview mirror. i don't think the wealth management franchise is at the wire houses will be anywhere near as dominant at the brokerage businesses that these things used to be were. >> and sure as heck where the money's going and investment which is -- paid off. >> but it's not. >> handsomely for morgan stan
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think, at least until the stock wept down. >> done an excellent job. cut costs moved in the right direction. the right thing to do. going forward, i don't any that business will be as good as it has been. i think barriers to entry in wealth management fall a little every month that passes, and i'm in this industry. take my word for it, there's nothing going on at wells fargo advisors or morgan stanley wealth management or bank of america merrill lynch that proprietary. shift from focus to lending, it's a lending business, where all revenue growth is coming from. securities-based lending is huge at these firms. they're making a ton of money. i think a lot of the money that's been made you won't see those growth rates stay there. >> take the conversation then this way. looking for a catalyst to invest in the banks, obviously higher rates are the thing everybody's been waiting for. get that net interest marge margin up and you hear until
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year crazy, red in the face. right? is this the catalyst to buy morgan stanley today? knowing that value act will be there. even though they're not in a critical role of the management and the leadership and the way that they've run the business. is this reason enough to buy the stock? because they're, now you got somebody really paying attention? >> there has been enough of a pullback and he's getting in or you can get in here at basically ten times which is a strong valuation point. unless josh is right. the raa business obliterates. >> it's already happening. >> unless the raa business obliterates the wealth management business on a longer term basis, then all of these wealth management businessless have a problem. for morgan stanley itself i think and the stake taken here, i think correct on it and going as i said at the top of the zhao, introduce a conversation that we really haven't had in the last seven years. do these banks need all the captain on balance sheets because of regulation or not? >> find out more what this means for morgan stanley.
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bring in now the bank analyst my mayo joining us today on the phone. mike, welcome back. >> thanks for having me. >> you heard news of this like we all did. i suspect. what was your reaction? >> i think this is great news. it's great news for morgan stanley. banking sector, what it needs. i'm not blaming the market, though. i'm quoting morgan stanley accountable. holding them accountable. they have an excellent franchise. three mergers, two in wealth management, one in equities. the glass is three-fourths full with good businesses but execution has fallen short. this should be the third year of flat earnings. the last year, equity write downs and most important issue, single digit -- need to get to double digits going from value destruction to value creation. and if they don't, then i think we need to have another conversation. >> you are saying that it's not
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so much the market getting it wrong, that gorman hasn't executed to the way that the street would like? more unnoticed today? >> well, you have a friendly activist involved, and that friendly may not be so friendly if morgan stanley misses their 2017 targets. so i think this increases the pressure for morgan stanley to achieve targets in 2017. by the way, scott, as you recall, i went to the annual meeting, in new york, and i talked to morgan stanley and asking questions. i asked almost all the questions at the annual meeting and also got the lead director erston boles to say he expects morgan stanley to achieve their targets next year. friendly activists because the ceo and lead director of the board said next year we think we're going to get our targets, but if you don't get the tarts, absolutely look out. by the way, the consensus for
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morgan stanley expects morgan stanley to miss their targets next year. so if the consensus is right, look out. if the consensus is wrong and we're above consensus, then, you know, gorman is fine. >> what do you make of the fact, i guess my understanding from people i spoke with last night, as trying to report on this story, that inside morgan stanley there was a concern at the very minimum since the beginning of the year that this could happen. that an activist could actually be taking a look at morgan stanley, because of the way the stock traded below its book value and the fact it's underperformed to peers over the prior year? truth to that? >> absolutely. i mean, i talked to, you know, most of the largest shareholders. in fact, four years ago we went from negative to positive on the stock ats 13ds. we said either the stock prize goes up or morgan stanley needs a new ceo. stock price went up. morgan stanley repositioned their business more aggressively
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than any other of the largest u.s. banks. they'd gone from one-third to one-half wealth and asset management. they've gotten that part right. now you have to get the job done. think about the olympics. if we had great in balance beam and floor exercise and uneven bars and vault and the u.s. gymnastics team didn't bring home medals, you say, what's up? maybe we need a new coach. they have the ingredients. get the job done now and the target next year. >> stay with us. pivot to yoanother bank. jpmorgan. down grades jpmorgan today, mike. he says the big banks are stuck between hope and fear. we've made it our call of the day. you've said, i believe, that jpmorgan is the "lebron james of banking." so what do you make of this downgrade today? and how it fits into the prism of your own view? >> well, you have to talk to some investors who want to take some money off the table with
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jpmorgan, and i think that's absolutely the wrong move. feature jpmorgan as lebron james of banking because jpmorgan is good on both offense and defense. and on offense they continue to gain share in their businesses, especially with the europe poon banks trading. this is a market share grab for jpmorgan. on defense, you have this dividend yield of 3% and management down side risk awe you saw with the second quarter earnings with the brexit concern. wrong time to take money off the table with jpmorgan. the best performing of the global whole sale banks this year, it's still underperformed the s&p 500. you're kind of leaving before the party's gotten started. >> they say, look, agree with you. they view it as best in class. say those words in the very note they put out, but sat the same point saying less upside over the last 6 to 12 months in this name in particular that maybe
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some of these names at this point are better at rentals, so to speak, than longer term investments at this point. >> absolutely long. you know, this is -- i've been doing this 25 years. this is one of the best times, rewards well up to the level of risk. focus on the level of risk at the bank. record capital. record liquidity. the best balance sheet in decades. the best earnings stability in a decade and the market's ignoring itted. and they can, and the market's wrong. just like it was wrong on potential down side a kedecade ago. as banks management through incidents likes brexit and dislocation, everything we had in february when they're concerned about european banks failing, banks continue to chuck through earnings, increase dividends, return capital, you'll see steady eddie bank return more through bond proxy performance. >> mike, appreciate the time. i know it's personal time you're taking. so i really appreciate you taking the moment and calling in. >> sure.
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my pleasure. >> mike mayo on the hot line on this story. what do we do now with jpmorgan? talked morgan stanley what this could mean. interesting note from the number one ranked analyst? >> stock is down. interesting, too. banks caught a bit and a lot because of interest rates have backed up, but this stock is always going to be expensive as long as jamie dimon is running the company and the balance sheet strong as it is and 3% dividend yield. mike said all the thing ice adegree with. what i have done is bar bell. i own jpmorgan. the steady eddie, then i also have citi group and bank of america, a little more beta. it we get a bank ral toy continue they will outtomorrow jpmorgan but i can sleep at night owning this company for sure. >> pete? >> from the beta perspective, a bank of america along with you, painful, sooner or later we'll get rewarted i think. morgan stanley today look at what's going on with the value act, that gets more and more attractive to me with the potential of if the execution
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isn't there they'll act. for now, more passive. jpmorgan, though agree completely with plik. look at the name, what it's done. i'm not in the name, because because i see less up side. somebody easy got to be in bank and three, jpmorgan woulden one because of the balance sheet what they look like right now and i get a 3% yield in terms of execution nobody is better than jamie dimon. >> look at financials now, takes me away from jpmorgan and sort of the big banks, and i want to look more at the exchanges. look at asset managers. black rock is having a fantastic year. up 8%. rewarding the investors with strong capital allocation returns. that's a place i want to look. look at a name like ice. cme. exchange working well. look there, look at regionals, bb & t. >> would you be concerned in exchanges? i bring it up, just yesterday talking about volumes, thaw they're going into this june,
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july, now august being really awful, when i see volume starting to come down, i think i'd be a little more concerned with the exchange. >> i would say over the last four to six quarters that was a concern that we've now lapped i think, a lot of the ex-changes are learning to live in an environment of low volumes and looking at earnings and the earnings producing, strong earnings and again reflected in the stock prices. >> now 27 days without a 1% move in either direction for the s&p, which is the longest stretch back to late summer of 2014. history suggests these periods don't go on forever. volumes will come back. the vix is dead as a door nail right now. even 0en a down day for the market still under 13. but that's not a forever thing. that's a now thing. i'd would be not crazy concerned to joe's point with volumes on exchanges. on morgan stanley, secular things afoot that no activist hedge fund or ceo for that matter can really do much about. and then on jpmorgan, i think
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steph nails it. this may nob have the most upside. this is the name to own. inverse head and shoulders in the chart, breaks above 68, resistant back to early 2015, say good-bye. stock could be high 70s. >> good stuff. we are just getting warmed up here at the "halftime report." >> announcer: some pain doesn't taste right. shares trashed after the company missed guidance and announced possible accounting concerns, and one of our traders got caught in the celestial trap. she what he's doing next. and also ahead, a stock that fits your portfolio? several big names reporting today, tomorrow and thursday. and two big calls on energy. is the sector worth the risk? more "halftime report" with scott wapner in two minutes.
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welcome back to the "halftime report." shares of hain celestial downward, saying it doesn't expect to reach its anticipated sales and profit levels for the year. jon najarian pointed out unusual activity in hain friday. bought calls thinking a buyout was possible. listen. >> the calls are up 45% just on a very small upside move in the stock. so that's a big bet. they're betting that a deal happens and happens pretty quick. >> jon najarian is with us now from chicago. always accountable.
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doc, what you are. it's a tough one, at least options. >> yeah. that's the only good news here, judge. yeah. this is -- you know, we saw unusual activity in white wave. wwav, that was a take-out. this seemed to fit exactly into that mold as far as the way it was trading into the weekend. normal activity, 1,300 contracts, trades into the 30,000 and 40,000 contract range, a feedy frenzy. should have been buying puts, i guess. george sorrow got fooled, we got fooled. soros, 14f admitted he was in this thing too. the read i believe was correct, judge. unfortunately, the reasons that people were buying anticipating a takeover or something else, it was a take under, and you know, here it is basically took about $10,000 out of my account today. >> wow. >> you say luckily i had options, and the point being,
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sort of these, teachable moments we have every now and again on this program, you make the distinction between options versus equities, and how this one i suppose worked in your favor by doing it that way? >> well, yeah. again, it lessened the amount of exposure. they are a risk transfer vehicle. options. the reason all of those folks behind me trade them every day is because of that, but what i did, judge, i bought the 55 calls i cited out in september and i sold 60 calls against it, paid a net of about, whatever, $1.20 for that spread. unfortunately, that spread went to 15 cents today. so that's that $10,000 i'm talking about. it i were in 10,000 shares of the stock, would have lost almost $140 grand. again, shows risk-reward, definitely with options not the stock. >> trying to minimize the damage, we talk about, when it comes to these things. >> yep. >> doc, thanks. appreciate you calling in, or returning over there for us.
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>> sure. >> just a little ancient market wisdom. never buy a stock based on long island. seriously. with the exception of northrup grumm grumman, maybe cablevision, can't hold these companies. >> give me another one. >> as a resident of long island -- think about it. >> claim entertainment. bankrupt. >> one of my dear and close friends. >> computer associates under $35. >> thornorthrup offsets. >> that's the exception. >> absolutely. >> back to gains, if we could. >> the dear friend line didn't work? >> las vegas, south florida, you don't buy -- >> corporations that sponsor stadiums oftentimes are not so great. trying to keep it 100 out here. >> dick's sporting goods, home depot report potoday. stock shops next and google debuts duo, and the desk take is
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mapping the oceans. where we explore. protecting biodiversity. everywhere we work. defeating malaria. improving energy efficiency. developing more clean burning natural gas. my job? my job at exxonmobil? turning algae into biofuels. reducing energy poverty in the developing world. making cars go further with less. fueling the global economy. and you thought we just made the gas. ♪
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energy lives here. all right. retail earnings roundup. movers to talk about today. kick it off with tjx, shares
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lower today on a weaker outlook. stephanie a shareholder. >> i am. though i was -- >> disgruntled. >> talking yelled about taking profits hoping to get a rally. expectations are super high pap good number. beat on sales. beat on earnings. >> outlook? >> stock is 1% off of its all-time high. i'm not crazy about this space right now because i think it's very crowded. i don't think it's -- it's expensive but i do think at the same time this is a sek skew letter wsecular winner. torn short term. long-term probably okay. >> after the pullback, would get more interested than i was and probably in it before the end of the week. i like what they said, nome bought bat shares but want to expand and been doing remolding. all things they've had to do continue to do i think management has been absolutely unbelievable. you know what? the guidance was the only issue.
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that was the only issue. >> you say you love it. >> yep. >> you've said consistently you love it but don't own it? >> i did own it. i got out a couple weeks ago. when it made that -- this was my brexit stock, if you recall. a couple stocks to pick out. i said, this name's getting sold off for the wrong reasons. i think they'll do great in brexit, stock did well. i got taken out of the stock and would like to get back. >> roth you thought more interesting. >> but not the home you pointed out yesterday as well. the home aspect of what tj's is, flat this time. interesting, but doing great in europe. look at the franchise, which is almost all u.s., europe was strong, canada was strong, u.s. was very strong as well. >> move to dick's sporting goods. the sporting goods retailer higher today pap strong beat surprised increase in same-store sales as well. who has a take on dick's starting goods? nice move. 7%. >> talked about it yesterday closing the show. >> we did. >> felt they would gain market share from the closings of the
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sports authority and that's kind of what you're seeing now. this is a strong report. i think you've seen the turn in the stock. stock is approaching 60. i expect it to continue to see it accelerate as well move into the fall, above 60. i don't think there's any change to the momentum xzibexhibiting terms of revenue growth. >> people stopped looking and don't care about golf galaxy. waiting for a sentiment side, scott. that's huge. golf galaxy down another 3.4% and nobody looking at this time. finally looking past that saying, look, dick's sporting goods is doing great. >> online sales up 26% versus up 15% last quarter. impressive acceleration. >> what did you do with home depot today? reported in-line. you like the stock is a fractional mover lower? >> very much like tj. over owned, well sponsored, secularly you want to be there the long term. on department stores, reversion
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trade? i think so. longer term, still want to be in this end low because -- >> lowe's reports later. >> i like home depot and loews lowe's. >> numbers in house r housing, construction last june and numbers recently, decent enough. people definitely putting money towards the house. tjs put up good numbers and numbers from home depot. not bad. in-line and impressive. >> target, a sell call by josh on the desk. why? i mean, everybody else is a buy. you're the only sell. debate this. >> listen, company's fine. had a nice rebound off the brexit lows. should not have been beaten up as much as it was earlier this spring. so we gained about two-thirds of the loss, say. but the charts kind of a mess. nothing is happening here. and when you think about what
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the company essentially have doing, competing with walmart. it's just not -- a great business, that i think people are excited about right now. so this is not a name i want to have taking up space in my portfolio. >> someone take the other side? >> trading at a 3% discount to walmart. totally lagged walmart by 16% year to date. the ceo is in there restructuring, taking longer than expected. people are frustrated, myself included. have to said a realistic guidance. that might come tomorrow and if that pulls the stock down, want to own and -- >> high 60s. >> the yield, i think brian cornell does an absolutely outstanding job and i disagree, i don't think they're competing with walmart. i think target and walmart, everybody puts them in the same bucket. i think they're different stores. >> not pulling a minneapolis homer call?
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>> agen little on this, but different items and different ways of approaching. >> he always thinks the twins are going to the world series. >> twins are not going, the vikings are going to the super bowl, though. count on that. >> wow. >> if they miss, i'm a buyer in, mid to high 60s, where the stock repeatedly bottomed. the question not whether or not they can turn it around. the question is opportunity costs. a market trending higher. there are winners everywhere. there are companies where it's much less complicated and much less difficult and so we're talking about opportunity costs. that's all. >> we talked last week about no one really feeling though there would be a strong back-to-school season for anyone xeps amazon, asked the question, where do you buy your clothes? that's where the potential upside is, a strong back-to-school season both online and in the store for target. getting the accessories and apparel for the kids that you asked about last week. >> okay. >> go to sue herera who has the latest headlines. hi. >> hi, scott. what's happening at this hour,
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former fox news chairman roger ailes is advising donald trump as he prepares for presidential debates this fall according to the "new york times." the paper says ailes' role could extend beyond the debates, trump's advisors see as pushing into back into strong can't tension for the presidency. and trump receives his first intelligence briefing tomorrow in new york conducted by the office of the director of national intelligence. presidential candidates received briefings during the general election sinsz the 1950s. vice president joe biden arriving in serbian greeted by the serbian prime minister. holding talks amid simmering tensions in the still volatile region and travel to kosovo later today. and pennsylvania's attorney general kathleen kane convicted of all charges. accused of leaking grand jury information and lying about it in an effort to discredit a political rival.
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that's the news update at this hour. scott, back to you. >> sue, thanks so much. debating crude's rally as oil prices hit one-month highs. on the street today, talking about whether it's a good entry point for oil and oil service stock. first, the s&p sector heat map, energy materials, the only sectors in the green. we're back right after this on the "halftime report." >> announcer: follow us on twitter and tell us what you think. we want to hear from yo you @halftimereport. 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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crude oil hitting one-month highs up 8% in the past week. >> oh, boy. >> get serious now. >> let's do it. >> today two firms weighing in on the space. citi group weary of an opec-related head fake and bank of america upgrading the energy sector to overweight. who's right? ed morris said, could be a head fake. bank of america says, no. worst is over. who the right? >> a difficult call here and i think the right strategy is focus on energy companies with proven global reserves, taking you to the large mega cap-type names. exxon mobiles. i know pete and josh have owned
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the xle throughout this energy move. i like those type of names. talk about refiners. they win here as well and then you look at select names with a shall orientation, also a little natural gas spiced in. range resources pulled back below 40 here pap strong performer year to date below 40. i think that's a trade of opportunity. >> go through other names. bank of america calls out in a positive way. upgrade to a buy. marathon, noble upgraded to neutral. patterson, neutral. devon added to us 1 list reiterate there buy. >> going for beta. well, if you think that oil prices -- >> go for beta. >> then you want the beta names. i agree with morgan stanley. the next couple weeks rocky, volatile to get through the gas oversupply, but between now and the end of the year, want to build positions bet nor beta. a you like baker hughes. last night concho a secondary.
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bought that on the deal. buying good assets on the cheap. to joe's point. you do want to find the quality companies and when they get hit, you want to buy those, of course. >> i'm opposed to this sector now. >> and the xle. >> also devyn, i took off yesterday, put back on today, something came out, started buying more. marathon has a great opportunity. >> you took devon often. >> took off and put back on. >> because of upgrade? >> no. options i was seeing. pretty interesting. kmi. talk about the pipelines,'s stephen weiss is big into this. today, mon sister te monstrous . over 7,000 calls bought at the 22 strike. just above where we are right now. this stock keeps moving no's ut side. can perform in a hurry and inexpensive shot. >> go pack a second talk
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technically. two weeks ago talked about the price of crude oil and said to pay attention to the $37 level. on a longer term basis, ens stugs money runs to sidelines. up side, oil breaks out above 50 a strong technical breakout that could drive oil towards 60 by the end of the year. >> josh? >> i would say marathon, if you want a slightly sexier version of xle. high correlation between that stock and the index it's a part of. a little more beta. over the last year down 10% while the index has just broken positive, but year to date, marathon now slightly outperforming. so if you do want that beta trade, but you're not looking to go, let's say until, like, into a shale driller or a land driller like patterson, maybe mro is the play. >> they say, bank of america, again on the upgrade, marathon remains one of the most oil levered of the large cap u.s. oils. >> yep. >> yep. >> that plays into the --
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>> if you want to go out there and be somebody, that's probably not a bad play. if xle continues to work, on the verge of breaking out, mro will give you that and some to be up side. >> easy specially quality emp names, conoco and emg. >> if oil goes, sure. >> talking about the energy sector moving significantly higher in the next three months where does that take the s&p? takes the s&p, my opinion, much higher than here. >> we'll talk about how it hurts the consumer. >> after over 60. >> a long island consumer for sure. >> traffic on the lie, gas prices. hitting the blitz next. also on the list today, seagate, alphabet. nor "halftime" just two minutes away. 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
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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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at business.ny.gov hello prashant bhuyan. co-founder of the fintech services start-up. hello watson. your analysis of social media and conversations on various trading floors, helps us uncover insights. insights that help investors predict market closes, well before markets close. you know, your analysis has helped us improve our predictive accuracy by over 500%. 550.2, to be precise, but we can always do better. i like your attitude watson. all right. welcome back to the "halftime report." time for the blitz. four trades on four stocks making news today.
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first up, seagate reiterated a as a whole, pete? >> a commodity-type stock and the way they trade. the cash they generate, phenomenal. last year incredible. tie it to the pc market. doing well 46% reserve nuer coming from there. pc market getting better, apparently not at bad as people thaw, it's a own. >> joe, universal health services below the 200 day? technical damage being done. >> okay. reported earnings on july 29th. obviously, not of strong representation at their hospitals and local service centers. you're seeing a pullback you haven't witnessed a technical pullback in the stock in about three to six months's that comes off earnings. less lesson being, earnings come out, don't act. see what the price does. >> and this up 2%.
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>> i like software securities base a lot. i don't think a lot of people are paying attention to it. elliott management announced their involved in this and pushing for imperva to do consolidation. palo alto, industry leader, and 11 times free cash flow and growing. down and out i like it. added to to my portfolio last week. >> alphabet, unveiling video application called duo. josh. >> the question, does the world need another version of facetime? maybe it does. i'm open minded on this one. i will try it out and give it a shot. maybe it's great. maybe it's terrible. there's no way to know. but if it's successful, could be another great business for them. >> all right. pete is tracking bullish options activity. one chip stock talking a lot about lately, coming up next. plus the dollar dropping to seven-week lows against the yen. to the futures pits for the trades, when the "halftime report" comes back.
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welcome back to the "halftime report." i'm seema mody. atlanta fed proceed dennis lockhart making comments downplaying the recent weakness in the economy saying the economy's underlining fundamentals remain healthy in the u.s., indications f s q3 gr fixing for a rebound. not believing growstalled and o more rate rise in 2016 "could be appropriate."
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lockhart not a voting member but still an vesting comment itere say the least, scott. >> seema mody, thank you for that. i guess the market will believe it when janet yellen goes to jackson hole and says it herself or at least leads us and the market to believe that it's going to happen? >> yeah. >> we had a comment this morning from somebody else. >> vice chairman dudley suggested september's not off the table. this conversation i believe at the beginning of the month, right after the labor report was released. talked to steve liesman about the significance of jackson hole. i have the personal belief they should go in september. all of the evidence is there for them to go from an economic standpoint to an actual asset pressing standpoint which to me is the most important thing. and they overcame the fears of brexit. they should go in september. >> i don't believe the market believes that they will. >> it doesn't. >> and even december odds are too low. >> so what happens when janet yellen what is it? next week?
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what if she lays the groundwork and -- telegraphs it's going to happen and the market's caught offsides? >> i think dovish. but you need a couple more econ points, particularly another jobs report. because that last jobs report was so good, i think people are wondering if maybe there's some momentum there. >> let's play what i think, what if, what if she's not dovish? >> okay, then the banks rallied. and the market can probably rally if you can get the banks and to your point on energy new groups leading this market you can actually see -- >> knee jerk reaction is down followed by a ridiculous rally in financials that could without a doubt virtually every other asset class other than anything with a duration north of 10 and all those silly yield plays that are now trading at ridiculous valuations. >> and guys like value act, micron, if you get a move out of the banks and throw micron into that whole mix, suddenly --
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excuse me, not micron, morgan stanley. >> i was like where are you going with this? >> it sure looks like the timing of getting themselves in there with 2% sure looks good. >> what could they possibly be concerned about? >> that's the thing, they're da data dependent until brex sglit they were worried about low oil prices. brexit, go already. >> let's go back to speaking of going already, let's go to pete for unusual activity. >> i think that's what was in my head already. when i said micron, because micron over the last couple trading sessions we saw buyer, buyer, buyer. today, it's a seller. but it's a seller of puts, scott. that's what makes this so interesting is because the positioning now is huge. 17,000 in the november 15 puts today were sold in micron. essentially telling you somebody's very bullish, not only the upside call we've seen day after day including today, but sellers have put on top of that says something about the position people think this stock is going to continue to move to the upside.
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>> are you in it? >> i am. >> move to currencies. yen falling below 100 level for the dollar for the first time since brexit. let's go to bertha coombs and the futures. >> we got the dollar here at a one-month low today. swoon definitely impacting the commodities market. all this fed talk, really still seems to be about lower for longer. what does that mean for the dollar? >> okay. to put in perspective what bill dudley said today really that the market reacted to for a short time was that a rate hike was possible. the market i think forgets sometimes what the word possible means. of course it's possible. a lot of things are possible. the interest rate market price went from pricing a 9% to 18. i'm sure they're going to start to rethink that soon. i think the dollar will probably continue lower after they digest the talk of possible and we plum those 93, 92 lows again like we
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did in the past. >> jeff, do you agree that dudley was basically sort of saying don't make me turn this car around? >> you know, ber tha, it's so hard to believe. we saw a letter come out last night from san francisco fed president williams saying we should move the inflation targets. so there's a lot of rhetoric. we're going to be scrutinizing the fomc minutes tomorrow, but remember the u.s. dollar index has not moved in a year. it's been tethered in 95. that brings a big smile to janet yellen, allowing all these other central bankers throwing a lot of easing on the fire. there's 260 billion monthly of qe-across the seas between bank of japan, ecb, that's just a wonderful thing for janet yellen to sit still and do nothing because her track record she's done nothing but be dovish. >> meantime seems like fed's lockhart is not the only one who is bullish on the economy. joining us on the show today on futures now we've got jim paulspau paulsen, he's bullish on global
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growth. and michael cohen will talk to us about what all this dollar weakness means for oil in particular going forward. join us. it's going to be a little bit after the hour, guys, because i'm wearing two hats today. we're talking about two types of commodities, not just oil and metals, but health care. more on that coming up on "power lunch." back to you. >> all right. bert bertha, thanks so much. up next, final trades, just three hours to go. before the break one more check on the dow. down 41.5 points. apple is the outperformer. johnson & johnson the drag. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.
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and use less fuel. helping you save money and reduce emissions. and you thought we just made the gas. energy lives here. welcome back to "halftime report." i'm john harwood in washington. donald trump's presidential campaign is pushing back against a report in the "new york times" that roger ailes, the disgraced former head of fox news, is advising him on debate preparations for the four -- or the three faceoffs he's going to have with hillary clinton this fall. the spokeswoman for the trump campaign says they're friends but he has no formal or informal role in the campaign. we'll let you know as we know more, scott. >> good headline. john, thanks so much. john harwood live in d.c. markets close in about three hours. let's do our second half trades. joe, i'm going to you first.
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>> you are? is it possible? i don't know if the control room has this chart for me, but i want to talk about a company that's got $10 billion in annual growth of revenue. okay. we're talking about a $13 billion market cap company. we're talking about a company that in 2011 was $60 and today is $165. josh, do you want to take a stab on that one? long island based henry shine, hsic. >> that's awesome. >> nassau or suffolk county. >> you have painted a very broad brush. >> oh, god, i'm joking. this is a joke. >> stanley bergman -- >> now you're fact checking me on long island companies. >> he did. >> pete, what's your last trade, your trade to go. >> you got something for me too? >> no, i'm not coming at you, man. we talk about all the various leadership we've had and one of them being tech and big tech. and obviously apple quietly now as steph and i were talking about is now trading over 109,
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continues to move to the upside. how about cisco with earnings coming out? old line tech. we look at these names even when intel didn't blow things away, it bounced back. i think cisco is poised that's why i own it to continue to go to the upside. >> we haven't mentioned apple. >> i was just going to say -- >> o-m-g. >> that's what i was going to say. >> buffett raised his stake -- well, berkshire, he's probably not involved directly, berkshire raised their stake 55%. >> double down. >> well, you have everyone else selling it. i think singer is short it. you had soros sell it. you had a bunch of guys lighten their stake. it's interesting. >> it's interesting a stock has gone from 90 to 110. >> right. the end of june. >> interesting to see. >> more a buyer than a seller here? >> i knew you were going to try to get something out of me. no, that's what i like it. >> that's what you're saying.
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>> when everybody starts to get on the same trade it gets me worried. but i don't think everyone's still there yet. >> that's what i'm saying. >> 115, if it gets past that, you're technical, isn't that a big number, 115 or something like that. >> i don't know, made that up. bye-bye. power starts now. all right. i'm brian sullivan. health care topping your power menu today because there's another big blow to obamacare, why aetna is now saying it cannot make any money on the president's plan. plus, rolling the dice on clinton. you're going to hear from one vegas ceo who's crossing the aisle because of donald trump. and a look at our exclusive power city indexes, is your city topping the list of the best performing stock markets this year? you got to stay tuned to find out as "power lunch" starts right now.

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