Skip to main content

tv   Fast Money Halftime Report  CNBC  August 18, 2016 12:00pm-1:01pm EDT

12:00 pm
a note saying that twitter's 28% share of users is going to shrink down to 27%. not expecting growth. >> obviously still muted, for now let's get back to post nine and the half. thanks so much. welcome to the "halftime report". we begin with a story new at noon this hour. valiant being sued by one of this country's largest mutual fund companies. they are alleging a fraudulent scheme that cost investors billions of dollars. the suit claiming valiant's drug pricing and use of the specialty online pharmacy exposed investors to massive risks. david covers the company. he joins us with more on what
12:01 pm
this means. welcome to the show once again. good to talk to you today. you with me? >> can you hear me? >> i can hear you now. what are you making of this news. i'm holding the suit in himy hands. >> is a big deal. you have one of the largest mutual funds saying your business was a fraud for a period of time and that you cost us $70 billion as a group. so this is something we've warned about and this isn't playing around money. this isn't write a check and move on. this is big news. >> at the same time was any of this to be expected just given where the news flow around valiant and filla dor had been within the last 12 to 18 months. >> i think so. i think when you look at the news flow for the first half of this year, we knew there was a
12:02 pm
problem. we knew what they said and did may not have been matching up so the fact that there are already other lawsuits, this isn't the first lawsuit, but this is from a big named company that's not used to going after companies they invest in so i'm sure they didn't take it lightly and reading the suit it's pretty critical. i think investors who are invested in it should take a look at it. >> you have a sell on the stock if i'm correct in a which in which we've gotten a couple of upgrades for valiant, thinking the worst was over and the bottom had been put in. the stock is down today likely on this news, but it's certainly higher than it had been. >> yeah, if you ever throw a pebble down a steep embankment it bounces around a lot so i wouldn't take that to mean anything that it's up a lot in a week. if you look at the people who are upgrading, they were the same people saying buy it at
12:03 pm
$200 and they down graded at $50. we do things differently. we ask ourselves would you look your mom in the eye and say you should buy this today? with valiant we just can't do that. maybe others can. >> you're not gonna make any friends with comments like that. joe has a question for you. >> obviously the mutual fund is looking for monetary loss coverage. according to the filing in june they only owned about 500,000 shares of valiant. do you suspect that they would come forth and seek the same type of actions that you're seeing here? >> so we haven't talked to them about this or the other mutual funds about whether they would join the suit or whether they would file their own suits. we know another fund has already done that separately and i think
12:04 pm
that i wouldn't be surprised if others join in, but t. rowe price is one of their largest holders and probably looks at this as more serious. >> there was debt news today. there's been something for investors to consider is if $30 billion worth of debt. how do we reconcile today's news with the continued issue of such a large overhang. >> so it's very confusing for the average investor but the new debt agreement that they came to means that they can perform worse and not trip any con vents. you shouldn't view that as a good thing. you should view it as the business isn't doing as well as many thought before. it means they won't trip the cover nans and it gives them breathing room but the business is still weak. it doesn't give them an unlimited amount of time to pay off the debt it just means they have extra time.
12:05 pm
we expect they will restructure the debt. when they did their last debt it was around 5.5% and they were investment grade. they are no longer at that grade. restructuring is going to cost them a lot more money. >> is the suit here and the issues around the company have any impact whatsoever on proposed asset sales core or non-core or other larger transactions. >> from an m&a standpoint the company says they think barb and lawmaker is worth $20,000 or more. if that were true someone would buy the company. that's not happening. let's put that aside. i think from the asset sales they're gonna do like they said a number of asset sales but they're promising to do $8 billion worth of asset sales
12:06 pm
based on a multiple they set themselves. i think they will sell piece by piece so will be difficult for the average investor to figure out if they're lowering numbers because the business isn't doing well or they sold stuff. >> they sent that stock up more than 20% in a single day seven to ten days ago at the most. >> yeah. if you're going to talk to debt holders and renegotiate a waver are you going to say i don't think i can make the second half year numbers or you say as of right now if i close one eye i think i'm gonna make it and then go to them with the stock rallying and say now we want to change our waivvers. i think it's going to be a challenge for them to make second half year numbers and that's one reason they'll be selling assets too. >> wouldn't they have had every excuse in the book to say look because of all of these issues maybe our full year outlook is
12:07 pm
going to be challenged. in fact they didn't though you seem to be throwing shade all over it. >> yeah. just look at the prescription trends. they're largest product is starting to go negative. i look at it and say they had every incentive not to do that. so we'll see. time will tell. that's a great thing about the market is that eventually time will tell. what i'm saying is maybe they can get out of this. i'm not saying it's differeefin. if i owned the stock i would sell the stock. >> i appreciate you going to the phone and having this conversation with us today. we reached out to t. rowe price and they said they will not comment beyond the lawsuit. probably no surprise there. the bears dock on this name are going to say this is why we've said it's uninvestable because you don't know what's going to come down the pike.
12:08 pm
>> right. tiaa is in there of course. already has their suit going. this one was not a -- >> it's not a class action. >> this didn't join that. this is a separate suit. a judge obviously is going to have to decide exactly what the merits of the cases are and then allocate co allocate some monies to the plaintiffs and it seems like they're lining up. but the issues also is the magistrate likely to put them out of business, give them b basically a death sentence. i don't think they are. i have no position in the stock but i would be unlikely to be as bearish as david is. >> it's like tell us something we don't know, pete. you knew there was this potential of bad news. >> what was the case about the bullishness was restructuring and he talked about they can
12:09 pm
restructure this and david says the restructuring process won't be as easy as people expected it to be. i think the most important thing is we've said this is a no touch unless you love risk. if you look at the implied volatility it is significantly off not just a year but even in the last three months. >> i'm trying to think of all the ways to push back and have a good conversation here but couldn't you make the argument that a lot of the risk has been removed, that the risk/reward equation -- >> which is why i disagree with david and if i were an owner which i'm not, i would not buying the stock or selling the stock i would be buying puts because of what i said. we were talking about 300% implied volatilities at one point time. three months ago it was high. and now it's inverted and now it's below historical average. >> the risk at 200 was big.
12:10 pm
the risk at 28 is what. >> something we don't talk about with regard to class action lawsuits is there's been a wave among judges saying why should we punish existing shareholders for the sins of the past. there have been judges that said go after the individuals at fault on a criminal basis but don't punish existing shareholders to give to a select few. i think you have investors like bill ackman who are doing the opposite. he's trying to fix things. that's what should be happening here. >> when you talk about this on the equity side there has to be more to come. david presented a very bearish view because as pete rightly points out we wanted to hear how the debt reinstrustructuring wag to occur and there are positive things in that restructuring. it gives them a pathway to sell
12:11 pm
off assets they couldn't do before. they're going to issue short-term bonds. those are favorable things unless no one buys that debt which i don't believe that someone's not going to do that but the last thing that has to happened is we have to know the legal costs. what's the set aside legal costs for the investigation and things like that and then the equity becomes a possibility. >> we'll make it a wrap for that conversation w conversation. we have a look at stocks right now. >> the private prison stocks that are grabbing the attention of investors as the justice department is reportedly planning to end the use of private prisons because they're seen as less effective and safe for providing services. that according to "the washington post." these are private prison stocks. they're under pressure. they've been halted a number of times in the last two hours. the geo group has resumed trade. it's down 40% and corrections
12:12 pm
group was down around 40% but it is halted at this moment. we'll keep an eye on it. back to you. >> all right. wow, i don't know if you guys invest in these stocks. hopefully you haven't been in any of the facilities. >> corrections group and there was a big crowd over there but i believe it's still closed at this moment, halted. that stock four times normal volume just in the first hour of trade and that included a number of stops. so this is going to be volatile and an issue throughout the rest of the day just trying to get it restarted again. >> down 39 and 40% for those stocks. let's look at the overall market picture and talk about this hunt for yield. trades that have worked all year long may have received an extension as it remains unclear if the fed is ready to make a move any time soon.
12:13 pm
we've talking about the sectors that have led, the telecoms and utilities. i said it earlier today but at 159 yesterday those sectors looked like they were going to be sells and they had been down over the last month and then the fed comes out with what's perceived to be a more dovish minutes and then the trade's back on. we don't know what to do. >> it's interesting. i think there's plenty in there that you could sink you're teeth into as maybe saying they're becoming more hawkish. they saw a lowering of economic risks internationally and a pick up domestically and you've had more timely speeches from fed speakers saying september is on the table. what should you do here? there's plenty yield out there there's not as expensive as the utilities and consumer tastaple.
12:14 pm
there's car manufacturers or refiners that have good yields so look for cheap yields. >> maybe they're not that expensive if you think that rates are still going to remain low for even longer than we thought. that's going to be the question. a considerable amount of conversations being had on our desk and others and other programs here of whether you should start rotating into more cyclical places within the market. we've heard it every day and now i wonder if that is shefd by what the fed had to say in the minutes. >> we're looking for opportunity. where has the opportunity been? we've seen where tech had not been performing and suddenly there's a great push out of tech and you see yield and growth. look at the nice moves you've had off of some of those lows whether it's brexit or going back to february you can see where some of these names where you've got yield you've got growth and you're on the way to
12:15 pm
something great and if the story is there, if you look at disclosures right now i have an unbelievable amount of tech and energy right there now. >> energy is driving it right now. energy is about $48. >> about $50 for the first time in six weeks. >> oil was $42. think about the dramatic move right there. oil surge is above $50. you can have a slant going forward because that's going to take the s&p along with it higher. >> i love the way they said it was a split decision on the fed because split decisions for most of us might be like 2-1, something like that, a split decision. as far as a split decision with the fed it was unanimous in the june meeting that they wanted to leave rates where it was. it was 9-1 in the july meeting. that's a split decision but i don't call that a split
12:16 pm
decision. i call that somebody trying to grab headlines. we have big news from the olympics next on what they're calling watergate. the story on whether or not there was a hold up in brazil. time to take chip stocks off the stable? we'll answer that question next. or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis and a $200 savings card
12:17 pm
12:18 pm
we are back and more on this developing story about the u.s.
12:19 pm
swim team in brazil. we are live with the latest. andrew what do with he know now? >> reporter: this story just keeps getting stranger and stranger. ryan lochte said heened a his teammates were held at gunpoint and now that story has changed and now there's questions about whether it happened at all. we have video to show you. this is from a security camera showing them at a gas station which is where all this did happen or may have happened and the story and the reports now saying a very different story happened. they were not pulled over at at gas station. they went into a bathroom. you'll see these guys go into the bathroom and they may have broken the door or something inside the bathroom, that an altercation may have taken place, perhaps a gun was then pulled at some point by a security guard there but they apparently paid the folks at this gas station and then left, which of course is a very very different story than the one
12:20 pm
that they told police and the one they told billy bush on the "today" show. that headline reverb rating around the world and playing into the scares about the security issues here in rio. the local people here of course this is an olympics, a showcase for this city and this is something that had damaged the city and its reputation, now new questions about whether that story is in fact true. there's going to be a press conference at 3:00 p.m. this afternoon. it's a business story because there are sponsors behind these teams, lochte himself, many companies behind him. we'll see whether they will stay behind him if in fact this is not true. we're going to continue to report this story out and bring you the news as we get it guys. >> not the last we've heard on this one. we all know that's true. thanks so much. back to the markets now. the tech sector has been on a
12:21 pm
terror this quarter. it's the top performing secretary or up nearly 10%. cisco announcing it will cut 7% of its workforce. the ceo was on earlier today talking about the quarter's hits and its misses. >> what we really saw was a weakening of demand in q-4 in our service provider secretary or around the world and emerging companies. those businesses combined were negative but the rest of our business was up 5%. overall good performance there. >> okay. pete, you're long on the stock. >> i'm long on the stock and options as well. >> what do you do today. >> you have to understand what you need to focus on. we've been talking about this is what are the companies focussed onened a are we focussed on that as inveszers. they are in this transition. we know about the transition and
12:22 pm
i think robbins has done an unbelievable job. this stock is off the 52-week highs. i see we're pulling back but i think the transition is in place. security is one of those foc focuses. this cloud is another focus. they're moving out of hardware into software, that takes time. people have to understand that but i see the growth and the dividend yield fits perfect. >> jim, you're in the name too as to whether investors got overly optimistic. >> it had one heck of a move. it was up about 20% in about two months. they're earn gings were okay. to the question of what you do with the stock going forward, i think you can hold it for all the reasons that pete mentioned but what you're looking for is what are they going to do with this cash. this is a cash had. horde.
12:23 pm
this is over $65 billion. that's a number they have to say what are they going to do with it. are they going to recapitalize the capital structure and these ads of i'm going to buy jasper, that's not enough. they need a strategic decision of what they're going to do with the cash. >> i want to talk about tech as it relates to chip. i bring it up because the s&p is up 4%, the chips are up 14%. pete's been all over it. >> clearly the earnings have provided the evidence that chips are the place to be but i also think there has been a little bit of a recovery in the emerging asset class specifically as it relates to ausha. the fact the u.s. dollar has gone lower is benefitting. i think it's more -- it was driven by the domestic demand initially but now you have
12:24 pm
global participation and i think that provides a continued tail wind. >> you want some crazy numbers, over the last three months ividia is up 63%, arm holdings is up 62% texas instruments, 21%, do you get the point? >> we've seen some takeovers as well. this week we were talking about some of the incredible paper in micr micron. >> intel is up 16. >> after earnings it was sold down and i think the desk collectively and i know you were one of the many said this is tupt on the pull back and now it's trading near 35. they are doing the right things. >> if i can pick up on what
12:25 pm
pete's saying this is a time where you need to be selective in the chip space. i look at micron and texas instruments and they make chips that go into things like toasters. they've had a great run but you're not going to get that much growth from the toaster industry. you need to look at the more specialized chip factories. >> they called apple a toaster company. maybe the toaster is the new place to be. >> certainly anyone who is picking stocks can have a different opinion than mine but i think in the chip secretaryto have to make distinctions. i like to be in video or a qualcomm which is gaining its footing as the iphone 7 comes out. >> if you look at the sis koe call i heard cloud lock and source fire. those are two ways they are securing the cloud. that's the future for sis koe
12:26 pm
and that's why they're not going to need as many folks. thank goodness it's not 14,000 jobs lost. but 5,500 is going to hurt. >> a double dose of unusual is am cooing up next. one trade comes from the rails and the other from the road. first a check on the dow, 30. the dow is down 24 points. walmart after its earnings is up 1.5%. that's the lead of the day. sis koe is down one and two-thirds%. oh watson, your japanese is very good. thank you. (speaking japanese) exactly. i can understand nuance, context and idiom in seven languages to help companies all over the world with everything from retail solutions, to banking, to cyber security. (speaking japanese)
12:27 pm
we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.
12:28 pm
an ordinary experience into an extraordinary one. get great offers at the lexus golden opportunity sales event. lease the 2016 es 350 for $329 a month for 36 months and we'll make your first month's payment. see your lexus dealer. hthis bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade
12:29 pm
two unusual options trade. you're at the telestraighter and you go first. >> quickly, csx, people riding the rails. pete's been on this one several times, you look at it there and it was up less than a month ago, it was $24 and now this has had a nice run to $28.52. they're looking for 29 calls. bought aggressively on the offer today. i bought those. these are september 29s. i'll likely be in there for two to three weeks. >> okay. i'm looking at something you talked about.
12:30 pm
i'm in tires. this is goodyear tire. we have an activist in there as well so that's sort of shaking things up a bit. you can see this dramatic drop we'd seen in the stock but it's been on the rise since. call it near the brexit times and we're starting to see 29. the september 29 calls aggressively were bought today as well. 6,700 of those are in the money and they're paying up to 90 cents for these calls. we'll see how fast that happens. i'll be in for at least two to three weeks. >> good stuff. it is 12:30 on the east coast. let's get you caught up with where the market stands. the dow is down 32 and s&p is a fractional move and nasdaq not doing much either. welcome back to the halftime report. here's what's happening at this hour. the united nations has suspended
12:31 pm
it's humanitarian mission in syria. the u.n. special envoy for syria says it makes no sense to plan aid deliveries when they're not being lead into the worst hit areas. authorities in brazil have called a news con trens to update the investigation into the reported armed robbery involving u.s. swimmers. the athletes claim they were held up in rio by gunmen posing as police. screening for prostate cancer seems to be working. fewer men are diagnosed with early stage prostate cancer. data shows a 19% drop in ael stage prostate cancer in the first year after the recommendations were released. the world's largest aircraft has made it's maiden voyagvoyag. it's the blimp.
12:32 pm
it is 302 feet long, filled with helium, carry ten tons of cargo using less fuel than conventional aircraft. things i never thought i would say on television. >> i was gonna say you get a lot of credit for being willing to read that. >> somebody's got to do it. >> maybe you were saying what we were all thinking anyway. you are brave. we salute you for that. >> thanks. twitter shares are sliding. now is the time to sell the stock. it's been on a tear of late. we'll talk to the analysts behind the call next. a complex . people want power. and power plants account for more than a third of energy-related carbon emissions. the challenge is to capture the emissions before they're released into the atmosphere. exxonmobil is a leader in carbon capture. our team is working to make this technology better, more affordable
12:33 pm
so it can reduce emissions around the world. that's what we're working on right now. ♪ energy lives here.
12:34 pm
12:35 pm
twitter is down more than 5%. cutting the stock to a sell. the firm sites competition among other reasons. we are joined live from new york. ken, welcome. >> thanks. >> explain the core reason? it's really about snapchat. >> it's about snapchat in part but it's about efficiency for
12:36 pm
advertisersened a i think the company is acknowledging that advertisers are acknowledging that there are competition now. when you marry that up with the user growth trends and signs that snapchat and others are going after influencers and in part users, i just don't think the risk/reward relative to the valuation makes sense. there's been obviously a big run in shares since the quarter which i think showed some fundamental breakdown. there's a lot of speculation as to why that run up has happened but i do feel when you look at the take out price that microsoft which gets sited as a level for twitter much of that premium is in the stock price when you look at the fact that twitter has a higher amount of stock based comp and it's slower growing and there's less recurring revenues. >> do you think the primary reason that the stock has gone up 35% over the last three
12:37 pm
months is all about m&a and a possible transaction. >> i think mostly yes. in our report we tried to walk through some of the thinking there and i think it is very attractive to look at twitter and say this has many applications when you're starting to think about larger secular tech trends around machine learning and the application of that data but i think in truth you're looking the a a company that is offering an advertising product that is not competitive with the market and also has user growth issues. looking at that ahead of a likely ramp for snapchat this year i feel like your risk/reward is not attractive. >> does there come a time when the board looks at these deteriorating trends which you cited today which is nothing new they look at the stock price and
12:38 pm
say enough's enough, go run square, do the best job you can but let's figure out what we're doing because it's not working. >> possible but i don't have a view on that. >> you don't have a view on whether or not -- >> whether or not the board keeps jack. it's a hard question to be answer to be honest. >> why? >> i feel like jack does have a lot of history with the product. he helped invent the product. as you're looking at the applications of where twitter could go there are few people that have a better idea than jack but as far as their patience level that's a tough question to answer. >> i appreciate you joining me today. >> sure. >> all right. >> ken doesn't mention live experiences. maybe with all these deals
12:39 pm
there's a lot of things that are potential there now but i think the way you play twitter right now is the way i have picked to do it is the volatility is low relative to historical and because of that why not have risk/reward. i like the risk/reward. if it goes down i'm gonna lose some money but i'm not in the stock so i'm gonna lose what i paid and i have upside potential. >> both you and john are in calls. are you only in that position because you think that the speculation about a deal is going to become reality? >> i think that and on a day like today when you have a 5% decline, i haven't added to it yet but if it goes further i will add to the long call spreads that i have because of what's coming up, pete mentions the nfl i think that's a significant driver for them so i'm willing to take a shot and
12:40 pm
have a three or 4-1 risk/reward on a call spread to take advantage of the boost i think could come from the nfl and from what they're going to be doing with them. >> here is a good tease. a hog, cat pillar and models are in the blitz which is why you want to stay tuned because it's next.
12:41 pm
♪ approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five, but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent of part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in. like all standardized medicare supplement insurance plans, they could help pay some of what medicare doesn't, saving you in out-of-pocket medical costs. you've learned that taking informed steps along the way really makes a difference later. that's what it means to go long™. call now and request this free decision guide.
12:42 pm
it's full of information on medicare and the range of aarp medicare supplement plans to choose from based on your needs and budget. all plans like these let you choose any doctor or hospital that accepts medicare patients, and there are no network restrictions. unitedhealthcare insurance company has over thirty years experience and the commitment to roll along with you, keeping you on course. so call now and discover how an aarp medicare supplement plan could go long™ for you. these are the only medicare supplement insurance plans endorsed by aarp, an organization serving the needs of people 50 and over for generations. plus, nine out of ten plan members surveyed say they would recommend their plan to a friend. remember, medicare doesn't cover everything. the rest is up to you. call now, request your free decision guide and start gathering the information you need to help you keep rolling with confidence.
12:43 pm
go long™. ♪ more on what is sending prison stocks plummeting. the biggest name in the group has lost half its value today and what is feeling the oil rally and how to invest around it and we have the latest drama surrounding ryan lochte. new information that suggests his story may be beginning to unravel. >> let's do our trader blitz now. first up caterpillar reporting a 42% drop in year over year
12:44 pm
machinery sales. >> wow. it's jaw dropping. it's also jaw dropping is it isn't one month. the stock still trades at 22 times the earnings multiple. i love this company but i hate this stock. i think you have to wait for a cheaper entry price. >> people have been trying to decide if there was a trough in this and -- >> we're talking actually about two years that statistics are quoting today have been down and you look at the earnings estimates this year versus next year. there's no growth projected and you got a 22 times earning multiple. it doesn't make sense. it's a fabulous brand and company but not at this price. pick your points, people. wait for this to get cheaper. >> l brands on the move. up nearly a 5%. raise the outlook. >> beating above low
12:45 pm
expectations. low expectations on this one. a lot of cost controls. that's what's driving the beat. analysts are going to revise estimates higher. that stays the stock around 80 where it broke down in april. longer term there's still some issues here. you have an extensive amount of inventory that has to be worked and management is in a transition. >> morgan stanley with an upgrade pushing this stock higher. this is a name we've loved for a long time. i think they did the right thing in terms of the dividend, they've been able to move themselves forward and they also talk about infrastructure. i think the stock is going to be 24. >> you're predictable. >> harley davidson, they came out and they're screaming eagle kit. they do not meet epa standards.
12:46 pm
this is not the same as volkswagen. they didn't try to beat the emissions test by jacking with the engine. this is an after-market kit so they had a settlement announced 20 minutes into the day today so the stock traded down hard to 50 and made a sharp rebound because the settlement was $15 million and the stock is back to $53.50. >> one stock we haven't talked about is walmart. it's up 20%. new 52-week high. the company reporting its best comp sales in eight quarters. it raised its full year forecast. walmart makes it clear that the problems at target are target's problem. target was a disappointment. you wondered what walmart was going to deliver. >> i have the confidence in target's management to respond the way that walmart has responded to their challenges making the necessary investments
12:47 pm
online going out and doing a purchase with jet.com and improving the experience understanding it was losing customers to the amazon.coms of the world focusing on paying employees more and making sure when the customers came into the store they stayed longer. i believe target will do the same thing. >> you mentioned how do you like them apples, shopping. right. >> i'm glad you got that. >> i got what joe was pitching and i got what you were pitching. i like this one. it's come off almost $2.50 for the highs in the premarket. it traded up through 76 so cut some people short. i have no position in the stock. >> at 17 times. i asked this question earlier is valuation full here or can you still buy the stock. >> it's okay. you can own it for the long term. bear in mind it has gained back all it lost last fall when it was abandoned by the investment community. 17 times is in line with the
12:48 pm
overall market. it's neither cheap or expensive. 2.7% dividend yield. >> crude prices up six straight sessions, longest streak in more than a year. a trader says it has a long run here. the s&p goes negative today. i want to faytake a look at the sectors behind that move. energy the best and telecom the worst. mostly flat day. back after this.
12:49 pm
12:50 pm
12:51 pm
welcome back to the halftime report. i'm jackie deangelis with the futures now traders. today we're talking oil prices, inching closer to 50, hitting a six-week high. anthony, your take on what's happening today. is this dollar-related? >> yeah, definitely. it's dollar related. it's also chatter related. saudi arabia -- not saudi arabia, but other opec members have been trying to talk this market up, trying to get those production cuts. i don't think it's going to happen. i think the market is a little overdone to the upside. jackie, here's a figure for you. if you count up crude oil, spr and all the products, we're looking at 2 billion barrels of supply here in the u.s. >> that's a lot of crude to work through. scott nations, he doesn't think it's going to get to 50. do you? >> it certainly looks like it. listen, it's overdone, it's overbought because of all the news he just mentioned. the fact that we did have a bigger draw than expected. 50 would be the next nice round number. above that would be 5167.
12:52 pm
but i agree with him. i think both would be pretty tough to get to. >> crude is actually going to 60 bucks and you're going to want to hear why. futuresnow.cnbc.com. back to you. >> thanks so much. give me the scoop here. >> again, before i talked about oil going from 42 to 48, the velocity of the move over the last week, specifically when it was cited how short the hedge fund community was, that's a scary proposition. i myself thought that energy equities needed to have a further shakeout when we were trading down at $39. i really believe sentiment has caught positioning on the wrong side here. but that tends to lead to continuation of further pricing higher. >> i want to show you the leaderboard now in our halftime portfolio competition. wow is all i can say. jim leventhal. unbelievable.
12:53 pm
you're up 28.5%. >> if i weren't for him, i'd just move to the beach, scott. >> wow. got to fight for the next few months. and you made a trade. >> with five stocks, by the way, nobody is out of this thing. there will probably be another 100 lead changes between now and the end of the year. getting a little bit invested today. i put corvo in and added it to my gm position today. just trying to stay conservative here. it's a nice lead, so i want to keep cheap stocks in there. things that have been beaten down. have a good dividend yield. gm, i think the whole peak auto thing is well overdone. if you continue to have labor market gains, you'll still have auto sales, so that's why i'm adding to it today. >> you can follow all the action at cnbc.com/pro. three hours left. your trades for the second half of the trading day are coming up next.
12:54 pm
what is freedom? yes, it's riding a horse across fields and stuff. but it's mostly getting to watch your directv with unlimited data from at&t. we're setting families free. so they can stream away - and not squabble over who's using how much. so go, family. watch. freedom. ha! seize the data! get our best unlimited plan ever so you can stream and surf all you want...with unlimited data from at&t
12:55 pm
narrator:kubo: est place come on, this way.e... narrator: ...is in the forest. kubo: wow. narrator: so grab your loved ones monkey: don't even. narrator: and explore a world of possibilities. kubo: it's beautiful. narrator: visit discovertheforest.org to find the closest forest or park to you. across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, creative business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. let us help grow your company's tomorrow- today at business.ny.gov
12:56 pm
you know a lot happens in an hour here. a lot more happens during the commercials. so here's your fast break. >> the fed is an absolute joke. >> this is going to be a repeat of may, when the minutes came out and you had two weeks of fed speak that we're going to raise rates. >> i think next friday, she says something that makes the market
12:57 pm
believe they could raise rates. >> we'll see. >> jackson hole. that's going to be the story. >> i do believe that. we came into this year believing the federal reserve offered what they said in december, that there would be a move in rates, okay? we've overcome the concerns as it related to the chinese economy and their currency. the rn can as it related to oil prices. we've overcome the concerns as it relates to brexit. i have to start worrying about this. it's time to move rates. what are they waiting for? >> there's a fight, i guess, within the fed. we'll see if we get any clarity next week. i wonder if the market stays in this wait and see mode for another week. yes, it's the end of august, so you're already getting low vols. people are at the beach. they want to hear what the fed chair says. i said it earlier. you can have all of these fed speakers. dudley can speak 40 times between now and next week and
12:58 pm
you can have everybody else lined up and say the same thing as well. it doesn't matter until the fed chair herself speaks. >> she skipped it last year, right? i mean, this year, janet yellen, the chairperson, is going to be there and that is going to be why, as joe said, it's potentially market moving. i don't think after the minutes that were released, however, yesterday that there's anything other than just -- there's nothing that's changed from the time those minutes were prepared until now that would cause her to say yep, really looking strong for september. >> the labor report was good. >> you've had a couple of good jobs reports. it reminds me of back when the fed chair was at the economic club of new york. you remember that? there were all of these speakers leading up to that that appeared to be a little more hawkish. then janet yellen took the stage here in new york city and was more dovish and that's what everybody focused on, because at the end of the day, it's the only thing that mattered. and it is the only thing that
12:59 pm
matters. >> i have a slightly different take on it. first off, i agree with you that janet yellen matters. but in that particular sequence, what came out was the june jobs report. excuse me, the may jobs report, which was an absolute clunker. prior to that, you had so many speakers saying we're going to raise rates. that's really what turned the tide. but i think we were both -- we were all just saying this. if the economic activity continues to support, particularly on the jobs front, they're going to have no choice but to raise rates. >> it's lumpnchtime for us. foot locker is tomorrow. i think before the bell -- >> i would expect there to be a strong number. if you go based upon what we've seen out of some of the sponsorships, the under armors of the world, the nikes, the adidas, the puma, we know how strong they are. you look at the valuation levels presently in foot locker. i would expect something impressive. if not, i think that would be very depressing because of the fact that -- and if you look at this run, though, that's the one thing that might hang on them. they have had a run since brexit
1:00 pm
that's been astounding. they're up about ten bucks. >> what about deere? that's a josh brown special. >> unfortunately, there is a partially negative read-through from cat to deere. the distinguishing feature is that they're in agriculture. >> we'll see you tomorrow. "power lunch" starts now. >> scott, thank you very much indeed. i'm tyler matheson. here is what's on the menu. shares of two publicly traded prison companies getting crushed. one down more than 50% right now. we've got the breaking details straight ahead. valeant under fire, too. the latest legal drama surrounding this controversial pharmaceutical stock. those stories, plus breaking details on ryan lochte and what actually went down at the olympics with those swimmers in rio. "power lunch" starts right now.

33 Views

info Stream Only

Uploaded by TV Archive on