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

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he thinks that maybe they're leading wall street on. as you heard him say, he does not at all. >> we'll watch that. of course, the fed decision coming up at 2:00 eastern time. skblo let's get to scott wapner and "the half." >> welcome to "the halftime report." i'm scope wapner. a lot to get to today in the markets, including the rollover and the continued one in tech stocks. first, new at noon today a new letter from paul singer's elliott management. >> hey, good afternoon, scott. i was about to say good morning. interesting words from elliott management. they always have a pretty long and well considered letter to investors. this one is no exception. for starters, they were up 8.4% year-to-date. this is through the end of september rather than october,
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but still, a very nice performance relative to the markets or the average hedge fund there. continuing to do well. they, of course, are no fans of zero interest rate policies, and they talk about that at some length in this letter as they often do. recall that last quarter they talked about the biggest bond bubble in history may be where we are now. now they're saying the macroenvironment that concerns us the most is accelerating inflation, which is interesting because there have been concerns here about the opposite in the market. this may seem like a strange thing to worry about under the current circumstances, but the tide towards inflation could turn rather abruptly for a number of reasons. they go on to say that if you had a quick spike up in inflation, the immediate impact could be the collapse of bond prices and possibly but not inevitably a stock market crash. now, a couple of other things, scott, that i think are points of interest. in terms of gold, they say we s
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been. >> it's the way we're going to end the year, and there are a lot of returns that he has enjoyed beating the market have come from that energy materials space. >> the concept of inflation that's being talked about. blackstone has talked about it. the reality is the u.s. dollar keeps moving higher. the price of oil is actually on
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the defense right now. i keep hearing about a $50 to $60 range in oil. that's not the reality. that's how they've made that money. at the end of the year, that could be a little >> it's not doing all that much. gundloch has said if it closes below the level twice, if the s&p breaks below 2,130 twice, that's a big warning. it did that already. >> jeff is more technically driven, i would say in equities than most of the managers that i have talked to, the equity managers more fundamentally driven. yeah, i mean, i'm cautious on the market. i don't know really anybody who isn't cautious on the market. i've got the few irs positions on that i have ever had. not ever, but in modern memory.
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as you know, i've been consistently pairing back positions, says and those are very idiocyncratic special situations. i viewed the market for a while as having limited up side. run away inflation would be a black swan event. however, i don't see it. i am staying away from consensus in terms of -- >> is what for the most part has been -- would be an unexpected trump win at this point, is that a significant enough of what you would consider a black swan event, considering that it's not priced into the market and on november 9th if that, in fact, is the case and people aren't positioned for it, if if you could have an issue in the market? >> here's what i would say. i would say that long only is not positioned for it. they have no choice, right? they can only hold a certain amount of cash.
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>> we have investing and etf strategies. we don't know how they will respond to an expanded market correction. particularly since the 2008 crash or recession, both, because they balloon. i would use it as a buying opportunity if the market really went down significantly because i still think this the economy is doing okay. you've got the senate also. will anything get done? that would be your knee jerk reaction. >> he was talking about the election process. i'm not sure what you used to describe it. >> as you know, he could have a poison pen at times. he is not at a loss for words, and nor are paul singer and his partners, where. >> they talk about the election as an important sort of event that they need to be mindful of, but they stayed away from any strong words about the preferred outcome or what will happen specifically. i -- when you said black swan, though, it got me interested
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because they talk about the sort of black swan watching in this letter and say, you know, we're not looking for anything specifically like that. on that note if i could just point out, they make sort of a defense of fees in here, which i think is interesting in this environment. they actually don't say what their fees are, and i don't know if you know. i'm not sure if they're 2-20 or do something even more than that. they do impose what they call a capital surcharge of 1.75%. they do that to not disadvantage current investors when new ones come in, and they have to get into illiquid positions or they're having to raise cash to meet redemption requests. they do that to even out the expense of some of those things. that's interesting. they basically say, look, we are in business almost 40 years. we've had only two down years. we've outperformed benchmarks during that time. we think you should consider value of your investment more than profits to the service
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provider. now, they're talking their book, but it's interesting in the environment that we've been talking about. >> right. thanks. whatever they're doing is working. they're up 8.5% year-to-date. >> not bad at all. >> kate kelly. let's turn to the broader market. what i said was we have this rollover in tech. where do you go in this market? >> the defensive plays of the telecoms have looked like they're rolling over. where do you go on the market? >> jp morgan. best of breed. not because it's jp morgan, but because of what will happen if it's a brexit-like event here. >> given that will that might happen and we might have an event that they need to try to stabilize the markets in between the election and the december
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meeting i think that's all the more reason to own a stock like jp morgan. trading volumes and trading revenue from the fixed income side, that's where they're going to kill it. >> the banks are interestingly enough, having their worst day in two weeks. >> worst day and not so bad. i mean, let's look where the banks are right now. >> we've had volatility in the 12s. yesterday we hit in the 20s. expect to see the volatility continue over the next couple of days. i think the next couple of weeks, quite honestly, sko the. you want to use this volatility to your advantage, and when we see -- because i do think we're going to see a bit of a sell-off. when you see it, that's going to be the opportunity i think to pounce on some of these tech names and some of these financials. i've reduced my positions probably by half of what i did. maybe two weeks ago. why did i do that? we are going to see more and more volatility coming into the market as donald trump and hillary fight this thing out, and it's getting a little bit
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more dicey every single day, and we start to see trump ahead in some polls. when you see that and you know the uncertainty that that brings, you have got to be prepared for that type of thing. you want to own that low vol or stock replacement strategies taking off positions, but what did we learn in earnings season? hey, financials are doing extremely well. >> the one week performance. apple down 3.5%. marvel, texas instruments. facebook down -- alphabet down three. amazon down three. >> you're take a small sample set. what is going into the earnings? they were moving it towards the earnings. most of them continued on. if they delivered. if they delivered the right numbers, look at the way google has traded. even look at the nice bounce you're getting out of amazon and some of the names, scott. when you look across microsoft holding pretty well, when you look across, those that
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performed with their earnings when they delivered the earnings that people wanted and expected to see, those are the names that you're going to want on a selloff. >> the valuations were all inflated, and their momentum trades kept going higher. for them to be at 3%, even 10% shouldn't be alarming. >> i'm wondering if it's getting started. that's what i want to -- that's what i want to ask our next guest. paul meeks is with us now. he is the chief investment officer and portfolio manager. he joins us live from seattle. paul, welcome. what do you do with these names? do you sell them? >> i think some of the tech stocks you have to be very opportunistic. as i have said on previous programs, i want to be laser beam focused on the cloud computing segment within tech, and here's a good example. i listened to the dialogue of all your contributeors the last couple of minutes, and technology stocks started out horribly at the beginning of 2016. they actually had a pretty nice rally, but before the conference calls, you know, they became
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over bought, and so what i do in a situation like that is i wait for some temporary bad news and hopefully it's not long-term, and, for example, last week i bought amazon down 6% on an earnings report because the stock had simply been overbought. there was a worry about the e-commerce business. >> aws was on my list because much the cloud thing that you said. what about crm, work day. who else? >> they've had a couple of rough quarters, and i'm very, very happy they didn't buy twitter. that was the opportunity to buy salesforce.com when it came down based on that threat. i think that qualcomm is interesting. not because have qualcomm stand-alone. i very much like this deal that they announced i would not buy
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facebook or microsoft trading at their essentially all-time highs. obviously i'm very intrigued about what facebook is going to say tonight. >> you wouldn't buy it at $128. >> no. >> you think you'll have a chance to get it cheaper? >> that's an excellent question. i don't know. i think in the meantime what would happen to dip the stock if it dips at all would not be something facebook oriented. it might be something macroeconomic. >> and what about apple? >> apple, i don't like. i think the deal with apple is this. with two-thirds of the business come from the iphone, i was never impressed even at the announcement with the iphone 7. i said that on cnbc. i think the stock given its free cash flow generation cannot possibly go below its recent low, which was $89 to $90. what i do is i buy that stock under $100 with protection at $89, $90, and then we hold it and wait for the iphone 8 ramp. that's the trade. i wouldn't buy it below -- or higher than 1 00.
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>> i agree with you 100% about the crm trade in particular. we were highlighting it that day. well, do you more than benihoff. i don't know more, of course,ing and i said the market does not want this deal. the market would kill his stock if he did. the stock was $67 that day. now look where it is. $75. obviously twitter may make sense for somebody to partner up with, paul, and maybe it's a media company. maybe it's i news company. i don't know. there's a little more speculation today than there was, but twitter is still something that's on people's radar for getting done sometime in the next three months, i think. >> that stock gets down to about 15, then i may hold my nose and buy it, and i say hold my nose because i don't think the company has a lot of value at higher prices. it would all be based on speculation that the company will be bought out hopefully in the low 20s.
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>> we'll see what happens. paul, thanks for joining us today. good to see you. paul meeks is with us. facebook reports after the bell. let's bring in rbc's mark mahaney. welcome back. >> hey, scott. >> paul meeks said he would not buy facebook right here at $128. is he going to get a chance tonight to buy it cheaper or not? >> i think given what we've seen with google, albaubibaba, i'm n sure dramatically cheaper, though. what we may be dealing with is dead money. i do think there's a heck of a lot of value wag support for the stock. however, in the low 120s range. there will be $5 of earnings in it the stock. i think that would floor it. barring a major market roll-over, there's some down side to the stock. i don't think it's double digit down side. i think the bigger risk is dead money near term. >> what is the reason that the stock may go down?
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what could happen tonight that may second it there? >> three things to watch out for. the three most important numbers on facebook tonight are, one, this ad revenue growth year-over-year. it's been north of 60% the last two quarters on an fx basis. adjusting out for foreign exchange. if it were, that would take the stock below the 120 level. second is this mau growth, monthly average user growth. it's been clipping on very consistently kind of the mid teens, 15%. if that were to crack down like 12% to 13%, which is highly unlikely, that would cause the stock to crack. third, is the issue of whether engagement at the company is declining. it's that snap chat concern that maybe that's eating away at the lower -- at the usage of the younger users. if you saw that engagement levels are starting to come in like they did a little bit last quarter, that would cause the stock to crack. i don't think any of the three scenarios happens, but that's what i'm watching out for brsh.
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>> we've seen a bit of a rotation. some have gone from large caps last year to the small caps this year. yelp is one of them. zillow is one of them. we think yelp here gave you a really nice beat in the quarter, and they're starting to show new revenue streams. it's called transactions. that's adding to the overall revenue mix shift. >> are you concerned that tech is rolling over. do you think it's taking best of breed down with it? >> gin what's happened the real surprise to me and the tell for me on how the stocks are trading is google. i thought that stock should have traded up afterwards. i didn't think amazon should have given a miss on the bottom line, but google should have, and the fact that it's rolled over a little bit, want dramatically, but rolled over, it tells me the leading tech
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names, we've had decent appreciation tv the stocks year-to-date. we may be in dead and have debt money risk for the next month. certainly as we go through the next week, and we figure out what the future looks like. >> interesting stuff. mark, thanks. appreciate the time today. >> thanks, scott. rbc's mark mahaney. let's talk about what he said where. >> you know, lispi inlistening everyone, it's obvious. these stocks could easily go lower near-term. >> i think everyone is a little suspicious and a little bit cautious about the market right now. where is the market overall going to go? the s&p 500 is approaching the 200 day moving average. it sits at 2080. we haven't seen a violation of that since the first quarter. oil is coming close to its 200 day moving average. i think the question you rightfully want to ask yourself right now is you're not going to go to cash. cash on a longer term basis, that position hasn't worked since september of 2008. okay. you're going to be in the market. what are the type of names that you can be in that will not be highly correlated to a market decline? i think what mark is talking
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about when he talks about a facebook and you talk about technology, i heard pete say earnings in technology have been strong. >> i believe that the market goes down like technology and financials. they will be able to not go down as much. otherwise, just go to cash. >> a lot of managers can't go to cash. i don't have dry powder unless i go to cash. >> you're going 100% the cash. >> i didn't say that. only in special situations. i don't go 100% cash. i only put money to work when i believe the reward -- or substantially outpaces the risk. i just don't see that. i will get paid to invest at lower levels. >> hold your thought. pay some bills. here's what else's is coming up on "the halftime report." >> how worried is the fed about the election? an insider gives us a look at what could be going on inside
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>> gawker has agreed to pay hulk hogan and -- nick denton saying the most unpalettable part of the deal is the fact that three true stories are being removed from the web, including that one about hulk hogan. now, denton did not comment on the number, but he said -- but he did note that it is less than the it $140 million that was the original verdict, and denton said that hulk hogan's retirement will be comfortable. he goes on to say that he will work on topic forums to bring people together. back to you. >> thanks so much. the election now is less than one week away. john harwood has the very latest on where we stand this hour. john. >> scott, we are in tip city, says ohio, just outside of
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dayton, and the question is going to be whether ohio in the midwest can tilt this election to donald trump. also tilt the senate away from the democrats who had been favored and keep it in republican control. let's take a look at where we stand. first of all, in the senate race, rob portman, the incumbent republican has a comfortable lead over ted strickland, the former governor. he looks very safe at this point. that is good news for the republicans because this is one of those states that barack obama carries twice that republicans had a seated up on the ballot. if you look at ohio in the presidential race, donald trump also has a lead. he is up three points in the rear clear politics average. if you look at the map, we see hillary clinton is still having enough states leaning in her direction or solidly in her direction to be over 270.
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what's the national picture? well, take a look. it's 2% lead for hillary clinton over trump in the latest real clear politics averages. some tracking polls this morning showed them tied. i can consulted a range of pollsters in both parties today. all the ones i talked to privately said that they believe that hillary clinton is ahead by margins ranging from 2% to 6%. still got six days to go before election, and we'll be watching both here and elsewhere. especially in the midwest whether things change. guys. >> all right. john harwood. thanks so much. live in it tip city, ohio for us. all right. let's size this up. still unknown. trump still not priced in. >> the interesting thing is that most still believe that if hilgry wins, there will be a rally afterwards. i actually think i would sell that rally because i'm not so sure that everything will be done and settled. i think you stand a much better
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chance, as we've all talked about before, if the senate remains in republican hands because it's sort of a stalemate and if schumer takes over for the democrats and reince for the republicans. there's some reasonableness there. the fbi can keep going on. you have uncertainty there. >> do you think we'll get fairly muted market activity between now and election day? do we still have the possibility of some, you know, wild swings of higher volatility? >> it's a question of fluz flow. you have a question on -- not expecting very much to come from the federal reserve, but do the disenters possibly step back in what their messaging could be? i mean, if donald trump does win, do we believe that the federal reserve will actually give a normalization of 25 basis points in december? that's if the market goes down. >> wrier going to take a quick break. when we come back, the street appears to be following our
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desk. >> i would go with footlocker because footlocker is cheaper than both. let them fight it out. i'll just sit there and, you know, says let them both fight it out and be the beneficiary. >> all right. well, today web bush initiated footlocker and finish line outperform as their rating. it's our call of the day. plus, the options market is betting that one beaten down consumer name could beat big. john will brake that down when we come back.
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>> welcome back to "the halftime report." here's your european close. renewed election on uncertainty. not just having impact on stocks here in the u.s., but abroad. asian markets closing lower. this despite another positive read on the euro zone economy. german unemployment fell to a record low of 6% in october. this follows the upbeat manufacturing data. we got it earlier this week. take a look at italy. down more than 2% on some rumors that the up coming referendum may be delayed, although the prime minister mateo renzi, his office denying those rumors. financials, specifically the
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italian banks. if we switch to retail, hugo boss, reporting earnings that estimates sending shares higher around 5 measures from the day. however, shares are still down about 36% over the past one year with stiff competition from fast fashion retailers and ongoing weakness in china. it's now trading at 19 times forward looking earnings, which when compared to some of its european peers, maybe a bit of a slight discount when you look at burberry, lvmh and prada trading a bit higher. if we switch to currency, the u.k. currency bouncing today. reaching its highest level in two weeks. this comes ahead of tomorrow's bank of england meeting. the governor faces a tough decision on whether to cut rates, growth in the u.k. has been stable. inflation has risen thanks to the sharp drop in the currency. we'll see what happens in tomorrow's meeting. now over to sue herrera with a
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news update. zhoo hi, seema. thanks so much. here's what's happening at this hour, everybody. turkey releasing footage showing a convoy of trucks carrying tanks heading for turkey's border with iraq and syria. the country's defense minister says it is making preparations for all kinds of possibilities as it deploys troops to the border. italy releasing aerial footage recorded by drones flying over the central italian towns hit by sunday's earthquakes. thousands of displaced people from the region are staying in hotels and temporary accommodations. a woman was rescued from the ohio river on tuesday after fleeing from the scene of a car crash and jumping into the water to dodge police. police say she spent 45 minutes in the frigid waters before a nearby tugboat came to the rescue. get this. she tried to fight off the good samaritans who tried to save her. and there is another world series going on. it all took place last night before 39-year-old -- won his
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first world series of poker bracelet beating fellow finalist gordon with a pair of kings over a jack. he won $8 million for his efforts. veo took home $4.6 million for coming in second. you're up-to-date. that's the news update this hour. halftime report is back after a quick break. is happening before our eyes. shift in human history sixty to seventy million people are moving to cities every year. at pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. partner with pgim the global investment management businesses of prudential.
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>> welcome back to "the halftime report." the final countdown is on towards the election. the fed wrapping up its two-day hopeful meeting. how could the election influence the fed? for his take we are joined by richard fisher, the former president of the -- president fisher, welcome back. >> thanks. >> put me in the room. what are they saying about the election? >> i think they're probably already finished with whatever decision was made. they don't want to interfere with the election. as you know, this election -- i just came back from london a few minutes ago. it's a monty python type election. nobody knows where things are, and i don't think the fed will want to have any influence whatsoever on these markets. >> no, but it's not so much a matter of that. it's what are they talking about in terms of if the election comes out this way versus if it
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comes out that way and how that could influence policy? that's what i'm trying to get at where. >> yeah, i don't think it has any impact whatsoever. i think they're looking to try to make a move before the end much the year. across europe about the failure of negative interest rates. the failure of zero interest rate policy in terms of the way both impact financial institutions. stan fisher, who is probably the most prominent individual at the fomc table, other than the chair. the chair gave a speech last week echoing what the bank of japan just issued in their semiannual report, which is enormous damage is being done to the process for banks, to insurance companies, to pension funds. my guess is they're going to use this opportunity to dwell and drill down a little bit on right now rather than worrying about
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who is going to be elected president. it's a toss-up here. i think monetary policy and zero interest rate policy has come under a lot of criticism recently. not just from the one candidate, but more importantly from the marketplace. rates have backed up. we got that at 136 on the ten-year bond right after brexit. >> right. >> trading at 180 right now. >> i'm glad you went there, and that's what we've been talking about did he top of our program in relation to a note that the famed hedge fund manager paul singer has sent out to his investors which says, in part, and i'm paraphrasing here, and i want your reaction to it. the tide towards inflation could shift for any number of reasons. he is concerned about accelerating inflation and a big move up could collapse bond prices and possibly lead to a stock market crash. do you share his view about where inflation could go in the near-term and what it could cause in the bond market and then thus, the stock market? >> well, paul is a friend of mine. i shared many of his views. i would add something further.
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the market is beginning to have a gag reflex. austria offered a 70 manufacture year bond. it's already often 5%. the german ten-year is in positive territory. barely. >> cpi is beyond the target. i think it's a market reaction. the market is saying enough. this is damage being done again to pension funds, insurance companies, the net in interest as far as the banks, and it's a destructive force, not a positive force. we've seen a huge sea change in the attitude towards central banks on that front in the last month or so. in addition to the fact that we're seeing, for example, truck drivers getting a settlement yesterday or the day before at a
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little over 8% in the terms of the year-over-year october wage increases. we haven't sign that for a long time. i think that's what paul is referring to. i think whether it leads to a crash or a correction, whatever, that's his judgment. the point is assets need to be repriced, and they will be repriced, and we'll see what happens. >> well, how dramatically? okay. there's a couple of questions then. is december a formality? is december priced into the market? if the fed goes, be are we going to see a more dramatic spike in interest rates, and is that what sets off for assets being repriced as you just said they need to be? >> look, when you cut rates to zero, you flatten the yield cur curve. >> the market was set all the way back in 2009. you can discount future cash
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flows literally to infinity. when you change that formula by moving rates however small, you are going to impact the way tradeable assets are discounted. whether it's stocks or bonds or even cap rates in real estate. the real question is how gradual do you do it? they talk about slow and gradual. even though i was against qe3, and i was against cutting rates to zero, i do think it is appropriate to be slow and gradual here. they're trying to communicate as much to the marketplace as possible. they would like to move. the marketplace is 70% or so probability right now in december. i think if they don't move in december, they will have egg all over their face. i think that's the critical issue. whether they signal in the statement right now, that's a matter of wording, but i think it's fairly clear certainly from chair yellen's comments to the last time she speaks, she would like to get rid of this asymmetry of risk that she spoke about, have a little bit to give back, but do it gently, do it
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slowly. my former chairman said, you don't go from cold turkey as a favorite drink -- excuse me. you don't go to cold turkey from wild turkey overnight. we've been at wild turkey for a very long time. we can't go to cold turkey overnight. it will be a gradual process where. >> some might say that you're being generous with the egg on the face. some might say frittata all over the suits at this point. >> these are my friends and former colleagues, so i will be as diplomatic as i possibly can be. >> good to talk to you as always. see you soon. >> richard fisher. crude prices falling -- now, how are energy traders playing that dip? we'll talk about it next. first, though, michelle caruso cabrera has a look at what's coming up in "power lunch." starts in 18 minutes, scott. coming up on "power lunch" the latest decision on interest rates set to drop right around 2:00 p.m. policymakers are expected to stay on hold for this month.
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the language in the statement is what could be a market mover. just like you're talking about. they're going to try to cement december for a move. we're going to be all over it with instant analysis and reaction. listen to this line-up. scott menard. black rock's rick reeder, and bill gross of janis among the line-up. >> halftime report is after -- is back after this.
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zbriefrmts welcome back to "the halftime report." the futures now traders. gentlemen, obviously we have that inventory report today. the largest build ever on record sending crude prices down more than 3%. in fact, crude oil down more than 10% since october highs. some may be tempted to buy the dip here. are you? >> i'm selling any rally that comes into this market. 2016 was -- right now crude are 70 million barrels above last year at this time. 230 million with the five-year average. if opec can't come to an agreement at the end of november, december, we're going to see a 30 handle in oil prices. >> 45 at that key level of support we broke through for just a second today. do you think we're going to break through at some point and hold? >> we've had -- we've not broken
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through it enough for me to think that that trend is broken. i would be tempted to buy it. the reason we're selling it, inventories obviously, they're not talking about production cuts anymore. that's going to be gone in a couple of days, and assuming things fall out okay, i -- >> all right. for more head to the website, futures now.cnbc.com. we're back with the live show at 1:00 p.m. tomorrow. meantime, stay with us. more halftime after the break. 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. cme group: how the world advances.
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>> welcome back. let's do our call of the+++>yay initiating coverage on finish line, sports locker, all with outperform ratings. if you watched the show the other day, you initiated your own coverage with outperforms on foot locker at the minimum. in our conference about nike, under armour, adidas, you would rather go to the place selling the stuff than the manufacturers themselves. >> the multiples are lower than the manufacturers. if they're going to fight it out, particularly if there is a price war, which, you know, nike is going to lower prices up to 25%, and there is going to be excess inventory, i would rather benefit from the retailers. because they'll be
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beneficiaries. so why not own those? and that way you're agnostic to the fashion, whether it is adidas or under armour or nike. so it is the easier play. and foot locker clearly has been the winner out of those three. >> pete what is your play? it is up 60% year to date. >> yes, you look at it from a valuation perspective, it is great. the problem for dick's for a number of quarters quite frankly was that everybody kept focusing on those golf galaxy, such a small factor you consider what dick's sporting goods offers. for that reason, they give you a yield, the thing is still trading underneath a 20 on the multiple and all the advantages you're talking about in terms of foot locker, finish line, the others. >> sports authority is gone. >> you think it has more upside. >> absolutely. >> more than foot locker. >> finish line. >> because there is more sporting goods at dick's. and i know you've been in there,
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because you a couple of young guys. >> i got you. i'm talking stock price, but you can't get everything those guys need in a foot locker, right? you can get some of it, but can't get all of it that you get at a dick's sporting goods. >> you're still in school season. basketball season just started. you get refresh on sneakers. >> but then i got to worry about so many other sports. i've got to know the trends in hunting. i've got to know trends in golf. >> not anymore. >> who buys golf stuff now. >> if i own it more than najarian, i own it more than three and a half hours, i'll have to worry about it. i'm only kidding. >> i think for a trade you go with the financial engineering play, finish line. finish line is telling you they're going to sell the jack rabbit running shoes line,
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aggressive acquirer over the last couple of years. that's the strategy. acquire all the small satellite type running shoes. now they're basically making a call on the high end shoes, sneakers, saying that they believe they're a little expensive. they're going to make a sale. that's going to benefit the top and the bottom line for them. the stock has pulled back 14% this quarter, still up year to date. for a trade, i like -- >> what sold off nike and under armour wasn't what they're doing. it is the money that under armour has to pump in. the numbers themselves, that wasn't the concern. it is suddenly that -- >> it was the growth outlook. >> based on -- >> not going to meet their growth outlook laid out at their 2015 investor day. the outlook was disappointing. >> disappointing. look at under armour, they have incredible growth. nike, still have growth. adidas, they have growth. across those factors, scott, if you're the retailer, you're
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pretty pleased with the kind of growth numbers you're seeing out of those three. >> all right, up next, why have we seen an intraday reversal for alibaba? there it is. we'll talk about it, get the trade next. plus, the bullish options activity that caught jon's attention today. he'll tell you about it next. ♪ is it a force of nature? or a sales event? the season of audi sales event is here. audi will cover your first month's lease payment on select models during the season of audi sales event. (bing) what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods?
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welcome back. we talked about the intraday reversal for alibaba. posted stronger than expected
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earnings, shares as you see now have turned lower, below 100 bucks. what do we make of this? you used to be in it. >> i wasn't. i'll tell you what, you go through that report, you can understand why the stock was trading up, got up over 104 today. go through every single metric, all looks great. we all do remember what jim chanos was talking about when he was here. he talked about accounting issues that he was raising. but he wasn't taking them off, because you were getting e-mails during the show that day, from alibaba. they were saying, hey, look, we'll invite jim to come to china and visit to see what he's saying is not particularly correct. >> never accept the invitation to a fight you're invited to. a new york post story that said alibaba was cooperating with the s.e.c., the s.e.c. was working -- or the report said that the s.e.c. was working with one or more whistle-blowers as it investigates accounting practices. baba said it is cooperating with the s.e.c. interestingly enough, in part of the s.e.c. -- in the alibaba
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release, or call, they talked about taking short sellers to court. we sort of talk ed about head t head thing, little fight going on between chanos and joe cy, taking them to court. >> when you hear that type of language, it is like why am i going to get involved in a stock like that? that's been the criticism of a longer institutional holding in alibaba is there is no transparency, really. no transparency to really look inside the accounting and the balance sheet and then hear language like that, for a trade, yes, you can own it, longer on the institutional side. >> other market participants say they don't like a short seller, now they're going to take them to court? >> jim is not worried. you know jim. >> i'm sure he's not. i'm sure he's not. >> smart not to take that trip to china. >> he's not going to china anytime soon. >> amazon take anyone to court, by the way?
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>> no. >> short interest there. just keeps going. all right, let's do some unusual activity. go pro. >> go pro, you know, there have been people saying apple should take a run at them. that was beginning of october, judge. then ten days later, another person should take a run at them. stock was 17, then it was 14, now it is 12. today they're buying the 13 calls into earnings tomorrow. big volume in those 13 calls, gone from 47 cents to 80 cents. so somebody's betting big that they have a beat tonight. i bought calls along with them. >> let's try to hit a couple of more things before we go. kate spade is down 3.5%. their ceo cites a clefhallengin retail environment. what do you do with that stock? >> hope for a white knight. that's where it is at. $2 billion market cap. >> down 3.5 earlier, now it is down 8. it is getting crushed. >> wait for someone, an activist, to come in, a white
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knight, something along that line. >> the oil stocks getting hammered today. what do you do with those in 15 seconds, oil is down 3%. >> avoid energy. >> i think the energy stocks are carrying 65 to 75 oil as we have a number of guests have said, as we say. i don't mind lightening up on those. >> crude down more than 3%. that does it for us. thanks so much for watching. see you tomorrow. "power" starts now. i'm melissa lee. it is the final countdown. less than one hour from now we hear from the fed, less than six days from now we head to the polls. will janet yellen surprise the markets and the entire nation ahead of the historic vote? we'll find out straight ahead. front lines of the u.s. economy taking the pulse of small business, just days before the election, money, power, politics, "power lunch" starts right now. welcome to "p

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