tv Fast Money Halftime Report CNBC December 16, 2016 12:00pm-1:01pm EST
there's not a whole lot else going on. >> the biggest mover in tech that i see is go pro. up 6%. that stock is volatile. who knows? >> busy week next week. fair amount of earnings as cramer said. the story of next week will be the gap between the earnings now and the promise of earnings with all the policy changes down the road. pay attention to that. let's get over to wapner and "the half." >> all right, guys. thanks. welcome to "the halftime report." i'm scott wapner. our trade this hour, 20,000 watts. trying to help that when rotation is in and out of certain sectors and continues at a frenzied pace. what does all of that mean for the trump rally, and how far it may be able to go? with us for the hour today is jim leventhal, scott brown, john najarian. with us today from toronto is kevin o'leary. he is the o shares etf chairman. let's talk about this, jo. you've got money sloshing around. you've got the paper today wall street journal says stock rally
is more hope than entrance. what should people be thinking about? the way that the market is trading. >> i have a couple of thoughts that i'll get to really quickly. i asked the producers to make this chart for me. i wanted to show you rsi on the industrial average because it's at the highest -- it's at the highest levels that we've seen really going back 20 years. now -- >> if the for the dow at these levels. we saw it in 2003. frequently that it will be at the beginning of a leg higher even though it does mean a short-term pullback. i think people need to not lose their head when this thing goes off. >> i mention at the top this notion of this rotation that's going on. you know, hour by hour in some
instances. day by day. out of sectors into others. some stocks that are up, you know, a couple of hours later. they are down. money starts to move elsewhere. jim cramer said the following this morning. i want to go through it. he said -- i'm quoting. "by the way, the rollover in tech is incredible. the rotations are amazing. adobe up two. now down. i just warned people the rotations are so vicious, said jim," find a stock you like and use the rotation to buy it. here's what else he said about what investors should do. >> don't, like, oh, wow, it's my day and then, like, buy it at the top and then sell it because it's been the exact opposite. just be aware that things are really nuts out there in terms of the rotations where, they're way too fast for me. >> right. you get the point. i mean, how are we supposed to as investors think about what's taking place internally within the market? >> it's hard on a day by day bays. you can either day trade or take a longer term approach. i am worried about the dollar. it's up 13% from the may lows. if you asked me something that
bothers me, that bothers me. a lot of the s&p companies do business outside of the state. >> dollar has been going up. now all of a sudden. now we're -- >> i would just like to see it pause, says and in terms of what josh just said about the markets overall, maybe this rotation is kind of healthy, right? i mean, the fact that the pharma stocks are starting to do a little bit better. the telecom, like at&t and verizon are telling a bit. that is not every single day that the cyclicals are going sky-high. >> a company -- >> some would say, okay, maybe that's a sign and maybe jim said it yerm in the week as well. maybe that's a sign of frot. >> i think it's a sign of maybe we're going to just pause a little bit. we've had a really nice run. i don't think the narrative changes between now and the end of the year or until we get earnings, which is in the middle of january. i think we're still going to focus on there is better growth ahead. we've got to get the fiscal policy detailed. when we do, we can analyze it then. i don't think you change your strategy between now and
earnings for sure. just watch the dollar. >> financials up 18%. telecom up 10. energy 10. industrials 8. you want to stay with those areas? >> no, i don't. i don't -- you don't need to sell them outright, but, you know, steph was just alluding to this. if you look in the health care sector or if you look in some of the old line technology sector, stocks like apple. we haven't talked about apple in a long time. apple has a nice uptrend that's been developing here. it's like a delayed response. a one-month delayed response to what everything else has gone on since the election. it's about time. i think that is the rotation that you are seeing. yes, you may be seeing these intraday rotations, but what they're really indicating is that some people are taking profit in these sectors like banks, like the materials, that have run really, really high, and they're saying, hey, you know what, there are other cheap sectors that i can invest in. health care is one of them. pharma is certainly staging a recovery here. also, old line technology. take a look at intel. intel had a bad quarter last quarter, but now started to
march steadily higher. as we get later and later into this month, the possibility of them preannouncing gets smaller and smaller, and i think you can see that crescendo and go into the new year. >> i mentioned at the top this headline and part of the journal today, the stock rallies more both in substance. josh said it's always that way. >> this forward look. >> of course. >> just wonder if there's going to be a day of reckoning if the hope doesn't turn to reality when you get q on earnings. >> the hope that earnings are going to accelerate into 2017, you're not going to see that this quarter, are you? >> no. >> no. >> what about commentary is a little more down than people were expecting? >> i think people need to remember what last january was like. it was the worst start to a year for u.s. stocks in history for as far back as we have data. the first 28 days of last year, we lost, like -- something like 10.5% in the s&p. the russell, you've lost 17. it was an absolute nightmare. no one was ready for it because it was a relatively quiet end to
2015. it didn't end up mattering. it did a lot of damage. it threw a lot of people off their game, and you could get something similar this year. there's no reason to think that you couldn't. i know i'm going to have a better tax rate next year, so i'll have to wait until next year to do some selling. what about the first week in january. there's always the winter thing. the econ data urns it down. we have a minirecession, and then it's all fine afterwards. these combined with earnings and combined with the inauguration, and whatever goes on with that, you could see people making some big sales in the first two weeks of january. my whole point is don't let that throw you off and completely change your entire narrative to stephanie's point. you are looking for companies. you are looking for sectors that employees do well for more than a few days or a few weeks zbloosh if you are expecting things to rotate slowly, it's
only going to happen on days when there's really low volume. otherwise, if it's a normal day, i'll call today a normal day. you're going to see fast rotation because the people that are trading are fast. with that as a back drop, obviously murphy oil, williams, a bunch of these stocks are just rampant today. up 4%. up 5%. in the energy sector. lily is up for $5 or $6. >> preannounced yesterday, by the way. >> goldman's conviction list. >> upgrades. >> and then they got morgan stanley today.
>> it is interesting we got a negative preannouncement or negative news from caterpillar. we got negative from he honeywell. both of those stocks are higher. honeywell is up today on news, and cat is where it was. maybe people are willing to look through 4q and look through -- >> not make. >> the uncertainty. let's see. >> the point of it is that maybe there's stuff that can look forward to in 2017 and you buy on any pullback. >> we're talking about the rotation into the industrials. ge rises 8%. now one firm sees another 25% gain from here.
>> welcome back. >> thanks very much. >> we're talking about some of the industrials that seem to be throwing up some red flags. yet, you are giving the green light on this unwith, where why? >> i also point out your prior conversation on honeywell and their numbers today. their fourth quarter is actually at the low end of their range, and the only difference is 1 cent was fully tax rate at 1%. their actual operational expectations, nothing has changed for them, and that's one of the reasons that stock has been doing just fine today, and the pension was better too than we expected. ge, my view is -- we had downgraded ge at about $32 last april. the concern was the stock had gotten too far ahead of itself. we wanted to see some of the proof points in their big restructuring efforts that are going on. since then we are sitting at the same level.
$31 roughly right now. my view is that this company has done -- has a lot of things going for it. power business is doing well, and then we are positive on oil and gas trajectory as well. health care is strong. you start ticking down these things, and you can work your way towards $2 eps in 2018. very controversial. we think they're going to get there, and then the multiple i put on that is probably one more point of expansion versus the 19 times they're trading at right now. i take $20, and get $40. that's the up side over the time period. >> are any of these catalysts that you mention offset by fx head winds? >> i mentioned at the top of the
program about one of our panelists. >> absolutely. i'm concerned about -- if i had to say where i'm concerned here, where is the biggest risk to my perspective, it's on the oil and gas side. should we be wrong there? the second piece is currency, right? currency, of course, higher u.s. dollar. generally bad for my whole sector. it is not good for ge in the near term. we've built in roughly 1% headwind, which is comparable to some of the other names. close to spot rates right now. certainly that's a headwind that they'll have to overcome with increased productivity, with better pricing in their book, and, frankly, services which i forgot to mention before. this company makes 80% to 85% of their profits from after market. that's the kind of strength i'm looking for to help give them pricing power in that part of their business and to push through what are potentially continued currency headwinds through the year. obviously i would like to see that abate across the sector and that is one of the negatives here. >> does the trian and peltz presence also give you reason to
think that if not putting a floor in the stock, there's an external force, if you will, watching the store very closely? >> so i think there are certain stocks in at least my experience with trying to pass like ingersoll rand and others where it's incredibly helpful to have them in the board room, and their advice on the table. i think with ge it is, of course, helpful to have an investor that savvy sitting at the table helping you think of your capital indication. no question that's important. look what ge has already done. they announced investments. they're planning for water industrial solutions. obviously ge capital. there's no accident that these things are happening. they're happening under jeff immelt, right? it's not like we needed a change of ceo for that to happen over the last several years. for us it was for about the question of the right buy-in points and waiting for the stock to kind of hedge up to where forward earnings and cash flow
are going to be ohh owed, and i accident loo like cash flow conversion looks like a positive ten points from where they are. that's one of my big criticisms for them. i think they're going to improve working capital. >> enjoy the conversation. be well. you do the same. steve -- >> i own it. >> yeah, i know you do. >> i love the setup. this is the six worst performing stock on the dow this year. up only 1.5%. for all the reasons cited, it sat out a lot of the -- >> that's -- let me tell you, this stock is now facing off against that 32.5 resistance point. it's also facing off against a 17 year all-time high. it's right there. you need to respect break-outs. you learned this with the bank stocks earlier this fall. we're going to learn it again some of the industrial names, and ge is the type of stock once it gets above an all-time high. there are no sellers. all of a sudden it's going to become highly popular. you cannot think -- >> we -- some would say, okay, we didn't see this moving forward. >> stock had this run, right?
>> i tell you what -- >> you could say the same thing then. don't get in front of it. >> it really hasn't budged. you cannot believe, and i don't, but a lot of people do now. you can not believe in this whole trump rally, trillion dollars in infrastructure. you can't believe in it and not think that ge isn't going to feast if that's what ends up happening. >> very highly exposed on the ku currency sigh side. i would much rather own rails and steel and airlines. they don't have as much of a problem with currency. they also don't have much of a problem in terms of organic growth accelerating. >> the problem with the rails and steel thing, though, not the problem, the difference is ge as has a big leg in the internet of
things. it's highly involved in medicine and health care. if you think those are going to be growth areas, then whatever the estimates are for the industrial part of the business, which not graed is large, that's want the whole story for the next five to ten years. >> kevin o'leary, you want to weigh in on this conversation as well? >> you talk about billions spent on a french energy deal. you're dealing with the french. there's no pricing power. the government is going to decide what the margins and cash flows are there, and i think if you want to play any sector that ge covers, you can go get a pure play in it. i look at that balance sheet, and i say to myself, do i want to spend the next four days trying to figure this thing out or should i go buy the sectors i like? i have to give it to immelt.
i've watched him now for 17 years. i remember the day he took over. he gave a speech in boston. i went to it. i thought this guy is going to have a tough job, and that was before the black box financial thing. remember, this has been -- i love josh that he would take the guts to do it, but i think the thing is -- i want to have respect for it, but it's the old style conglomerate. you don't need to do that anymore. you can get plays in every single sector without the french government deciding what your margins are going to be. >> it's a good point. i think the complication of the balance sheet largely is what the company has tackled over the last year. when you take a look at what this business looks like a year from now, substantially less complicated than it used to be. >> i don't know if it's been a dog's breakfast of a stock. over the last five years. you've cleaned up where. >> what do you pay for it, josh? it's at 22 times forward estimates. you're getting single digit growth.
>> i don't look at a stock like this and compare to it everything else that's out there. i only want to own ge. i don't mind the conglomerate aspect of the company as much as other people do. i think that's an opportunity to unlock value as they simplify or emphasize and to the point that the analyst raised capital indication, we really don't know where the emphasis will be over the next few years, but for long-term investors, and we look at the intelligence that will go into these decisions going forward with someone like peltz on the board, we have to think the future looks pretty brighter than the recent past. >> we also -- we already talked about honeywell as being, you know, where they took down their numbers. are we overly optimistic about the industrial trade given fx, given many of these trump
policies? >> look, things can go wrong. >> he is not in office yet. we don't really know what we're going to get. you think about higher rates and the impact on emerging markets where boeing and airbus have sold a lot of planes that have yet to be delivered. full disclosure, i owe bowing. i'm on that side of the trard. look, ge sends -- sells a lot of engines to boeing and airbus that may not come through if airplane options don't come through. there's both the sector specific and there's the company specific. a lot has to go right. they're priced a little bit for perfection. let's see what happens in the market. >> if the market is smart. i think the market understands all these potential risks.
>> they got that on camera. >> it's the christmas season. what can i say? >> you sure you're done? >> i'm a giving individual. >> he is a giver. >> dow chemical? >> yeah. so i like the story a lot. >> i do think if the dupont deal gets closed, it's sinnern ene n synergistic. for obvious reasons we're waiting for depont, but as the calendar turns, we'll get closer to the approval, and the stock starts to work where. >> a lot manager ahead on "the halftime report." >> next up, the stocks kevin o'leary says buy before the first quarter of the new year begins. plus, when the president-elect tweets, is that a buy sign for you? we're going through the stocks, mr. trump has hit and where they stand a few days later.
before the break a look at the cnbc iq 100. an index made up of innovators. up 22% this year. ge is on the list. getting a big upgrade today. for more on the q 100, go to cnbc.com/iq 100. more halftime with scott and the gang coming up. what i love most about tempur-pedic mattresses... is that they contour to your body. it keeps us comfortable and asleep at night. get your tempur-pedic.
ways wins. especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. . >> welcome back to "the halftime
report." nine trading days left in 2016. we're now looking ahead to next quarter. kev, you have some names on your shopping list, some big ones at that. >> i do. here's my investment thesis. i have decided to take my financials down from a 20% allocation down to ten. i basically sold off all the regionals and gone short on the regionals, and all the money -- i've cut my positions in half. the question is where do i go? where do i redeploy that capital? what i don't want to have happen to me in q1 is he don't want to have downgrades on earnings because i'm so worried that the markets have such a huge move on the animal spirits that we've been talking about and all the wonderful things that are going to happen, but there's been no earnings upgrades at all. what i'm trying to avoid with the names i'm giving you here is low risk of down i had ggrades earnings in approximate q1. >> i see no chance that they're going to down gra i had their earnings.
it's the best balance sheet in energy out there. if you are going to have an energy position, it's the only one. i go here. >> microsoft. >> they're killing it on the cloud. i've owned this name all of 2016. it is delivered. it is made it on earnings. i see no chance. well, anything is possible, but they're not going to miss q4 or q1. i stay long. >> at&t. >> boring, boring, boring, safe. you know, they're going to generate cash where. i like it. i just don't see a downgrade coming. >> forgive me. i stepped on john's feet. >> no, that's right. i was just agreeing with them on microsoft. >> yeah. cloud as well as car because microsoft is doing an awful lot in vehicles right now, and that's going to be huge, i think, going forward. ubs moved the target from 66 to 70. that's one reason that he was smiling when he went to trump tower the other day. >> hey, kevin, it's -- >> i love microsoft. >> i got a question for you on
at&t. interesting call. obviously that sector is going -- undergoing m&a activity, and it's probably going to continue into the new year. here's the risk. >> i'm getting there, scott. >> you know, we don't have all night. all right? >> all right. here's the question. here's the question. yesterday you got news that yahoo -- that deal might break with verizon. what happens if that -- if the same thing happens with at&t time warner? what if there's all these failed mergers that go on. does that worry you at all with at&t? >> let's assume it doesn't work. my good buddy mark cuban was up on the hill trying to pitch for it, where. >> you can argue that you're going to have -- derisking my holdings.
>> back in 2014 it was six and change in earnings. in 2017 they may get the $3, and we like that stolk. that's a risky, risky, risky play based on the whatever animal spirits that came in on the trump election promise. why own a stock like that when you can own something that isn't going to miss on cash flows in q1 , q2. i'm getting more boring. that's all i'm saying. i like boring. >> kevin, i kind of disagree with you on some of these staple stocks. procter & gamble and philip morris. while they are fabulous companies, and i still own a little bit of p & g, but i have been trimming it. i'm out of philip morris now. how do you get comfortable with 1% to 2% max organic growth trading at 20 to 22 times forward, and in terms of earnings richks, how are they going to deal with currency without actually taking a price which hurts volumes? >> every name you own that sells abroad and that is over 50% of
the s&p earnings, now over 50 coming abroad, and it's got the headwinds of the dollar. every name you own for any sector, you have to deal with the dollar issue. this is no different. what i'm trying to avoid with these names is i don't think there's a single name in this list that's going to get a miss on earnings. they could get downgraded over concerns, but they're not going to break my heart missing earnings by 10%, 15%, and there's plenty of risk in the financials and the -- and the energy stocks where you might get that. i try to de -- this portfolio is a derisk portfolio. that's what i'm arguing. if you got to redeploy the profits, i'm going here. are they boring? you bet. you just said that -- you just called my stock a boring stock. i love you for that. >> all right. we'll take a quick break. up next, nordstrom under pressure following a downgrade to underweight. stephanie owns it. we'll find out what her next move with the retailer is today. plus, the new star wars hits theaters this weekend. will the force be with disney? find out next. ♪ well, if you want to sing out, sing out ♪
♪ and if you want to be free, be free ♪ ♪ 'cause there's a million things to be ♪ ♪ you know that there are ♪ and if you want to be me, be me ♪ ♪ and if you want to be you, be you ♪ ♪ 'cause there's a million things to do ♪ ♪ you know that there are ♪ is it because so many go after it the same way? chasing after short term returns. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim.
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.
>> all right. thanks. let's do our trader blitz. first up is oracle. they reported a mixed quarter. disappointing crowd growth. jimmy, it's all you. >> a little bit of guidance that disappointed going forward, but ultimately i think this stock, like a lot of the old line technology, intel, microsoft, qualcomm, i this he these are very honorable here. safe going into the new year. this is a buying opportunity on the dip. >> okay. give me the scoop on adobe. it beat on the bottom. stocks down 1 3/4%. >> i think there was a lot of enthusiasm in the name already. >> this is the one cramer was mentioning. remember, i said what he was talking about in this rotation, right? adoiby goes up and then it goes down. >> you know, it could be a big seller that's being cleaned up,
and a couple of traders piling on, and that could go away in a second in the stock and be right back up. i tend not to want to fade companies like this. i continue to beat and have good news. >> anadarko, they boost their five-year view. >> they close the freeport deal, and then they raised their guidance for oil. this is a great restructuring story. they've been doing a lot of asset sales. picking and choosing what to buy in the down turn. i like it. it's are up 46% year-to-date. i just -- if you own it, you hold it. >> lily, got upgraded, doc, to overweight? >> as we said earlier, on this drop on that alzheimer's drug, steph and i both bought it. we thought it was an extreme value down at $65 a share. we upgraded it, steph. then goldman upgraded it yesterday, judge. took it to the conviction buy list. i believe morgan stanley did it as well this morning to the equivalent of the same and set the price target up in the 80s's. love the name. i'll be out of it today because i wrote calls against it today.
>> kevin, give me the scoop on disney. new star wars this weekend? you're in the stock still or no? >> still in it. still in it, and you can see the analyst now starting to move their numbers up. we're starting at 107 to 110 range where they're calling it. here's the whole story on the stock. it's under owned. everybody hated the espn story of three months ago, and now you've got lots of institutions not owning this name, and i think this rogue one will go way past $150 million, which is less than half of the last star wars, but if they could pop one of these out every year, this is the content story, right here. i bet you could be even better. rogue one can do half a billion bucks. they have five out of the top ten movies. this is a content machine. i think it's a way to own a pure play on content. >> josh, rig. transocean gets -- that stock is up where. >> well, these stocks have had a huge recovery recently. i don't think that they're terribly bearish, but what they're basically saying is industry chatter is talking about needing sustained prices of $60 a barrel in order to feel
comfortable of that estimate for the deep water names. they're just kind of steering you towards other names of the sector and away from the deep rigs. i don't know if that's something really actionable for a momentary investor. >> steph, did people get too optimistic about retail too quickly? nordstrom today gets downgraded to sell by matt botts. he is the best. he is the number one ranked retail analyst. jp morgan. >> the stock rallied 65% from the lows. i was buying it in the 30s. it got to 60. i started to trim it. i still own it. i was trimming a little bit this morning too because i do agree with him. i think it's still up 50%. even with this correction today. i am going to hold to a small piece because i do think that this company out of all the department stores really runs the best show. they have the best presence or the greatest presence in e-commer e-commerce. i've done a good job in ermz it of cost cutting. i'm going to stick with it. you'll see where it settles in. i might even buy it if it pulls back more. >> kev, what's your view on viacom?
you got sumner redstone leaving the board. you have sherry redstone that doesn't want the deal with cbs where, what do you do with this? >> i'm hoping shaer redstone eventually now that her dad is leaving the board brings some adult supervision into this name. you know, just the last ceo they whacked they paid him $95 million in comp. the new guy is only getting $12 million. i hate story stocks like this. there's too much moving parts and drama. i'm a content guy. if she brings in more of an adult supervisory role, give me a couple of quarters where they don't miss, maybe i would look at it again. it's been such a hair ball. >> doc, what do you do with chipolte? they get four new board members. >> they're acquiescinacquiescin. >> do you buy the stock based on the board changes? >> no, i don't. and, in fact, deutsche just, what, beginning of the week i think deutsche came out and said they have a $280 tarlgt. not $390 where it's trading here. not saying they're going to be
right. i do think that you'll still see some tax loss selling over the next couple of weeks in this name. >> kev, see you next week. thanks for joining us. have a good weekend, okay. >> thank you. >> all right. kevin o'leary joining us. why you should buy the next stock that donald trump tweets about. don't sell it. buy it. first, though, brian sullivan with a look at what's coming up on power lunch. >> you might have heard about this dow 20,000 thing. we're just wondering has santa already left town? in other words, have the gains, the trump rally already been priced in and we could be on hold? i know kevin o'leary thinks that for a while we'll continue to dig into the market. speak approximating of jobs in america. we'll speak with the ceo of a toy company that brought jobs back to the states from china. we'll ask him why and how much of a cost difference he is seeing. plus, we are waiting a waiting way live press conference from president obama. should take place around 2:15 p.m. eastern time. we'll bring that to you live when it happens. street talk and a bunch of great stuff on power lunch at the top
keeping the power lines clear,my job to protect public safety, while also protecting the environment. the natural world is a beautiful thing, the work that we do helps us protect it. public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. we want to keep the power on for our customers. we want to keep our community safe. this is our community, this is where we live. we need to make sure that we have a beautiful place for our children to live. together, we're building a better california.
>> i'm sue herrera. here's what's happening at this hour. a chinese navy warship has seized an underwater drone deployed by an american oceanic graphic vessel in international waters in the south china sea. it triggered a formal protest from the u.s. and demand for its return. army sergeant bo bergdahl who faces charges of dessertion while walking off his post. the pre-trial hearing will include arguments on whether prosecutors should be allowed to the aed amitt evidence to injuries to service members who searched for bergdahl. vermont senator and democratic presidential candidate bernie sanders had a skin cancer removed from his face. his office says he had a small basal skrel cell carcinoma on his cheek on thursday. tomorrow is super saturday for the retailers. according to the national retail federation, nearly 156 million americans will be out buying, and that's good news for the retailers because only one in ten people have finished their holiday shopping.
i will be out there with my running shoes on. i'll see you at the mall. that's the news update. scotty, back to you. >> see you next week. coming up, buy the tweet. we're tracking the performance of the companies trump has been tweeting about and taking down on twitter. next. >> "the halftime report."
we love knowing what's happening. so the nest cam security camera looks after things and alerts your phone if something's up. hey, need a glass? no matter what it is. hey, dad. ♪ hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade.
>> we're back. president-elect trump using twitter to call out individual companies, and many cases the stocks have dropped quickly, but then they've turned around. let's get to dom with the lowdown there. >> it is a turnaround story, right? you take a look at all the companies that trump has talked about. some of them have seen those really, really sharp moves to the down side right off the bat, but do they last? typically they haven't. we only have a small sample size. remember, ford, rexnor, boeing, amazon. many companies the target of donald trump's iyre. this was not a tweet, but it was an overall impact of an
industry. this was a time person of the year cover. donald trump the president of the divided states of america saying in that story "i'm going to bring down drug prices," donald trump says. "i don't like what's happened with drug prices." the next day, the i abobb, biot etf dropped by 5% at its lows to rebound a bit, and take a look at that now though. sharp move lower. we've rebounded since then. a short-lived move here. if you take a look at some of the other examples recently, of course, you have what happened with boeing in that tweet. air force one, the costs out of control. it calls the shares of boeing -- they've recovered all those losses since then. even some more just a couple of days ago, and lockheed martin, which perhaps we know $4 billion of market value wiped off the value of lockheed martin because of the f-35 tweet cost overruns there. lockheed has gotten back losses. we talk about many of the sectors, and the question becomes whether or not some of these moves are sustained.
it's all going to depend, scott, guys, on whether or not trump actually follows through with some of these tweets and maybe those tweets in the future will have more teeth. back to you, guys. >> thanks so much. all right, jimmy. you're on the spot here. you said -- >> right. >> to buy lockheed when trump tweeted that the stock would be up. you guaranteed it would be up by the end of the week. it was a guarantee. >> he is a registered person. he can't guarantee anything. you can't use the g-word. >> it is up from -- >> i'll make a citizens arrest if he uses the g-word. guarantee. >> i'm just kidding with you. >> listen, it's up about 2.5% off the low. to be fair, i thought it would be higher. i thought it would be up 5%. frankly, i think what dom just reported is absolutely accurate. you now have a definable pattern that you can predict if a stock like lockheed martin or maybe pfizer goes down 5% on the day of one of these tweets. that's absolutely a short-term buying opportunity. to that point, scott, i actually did put it in the halftime
portfolio competition as a short-term trade. that competition -- >> he put his money where his mouth is, scott. let me tell you something. we did this already in 2013 when carl icahn first joined twitter. he would send a tweet will apple. the stock would add $18 blg in market cap. you had a 10% move in one of the biggest stocks in the world. then he would send another tweet a month later and go up 6%. then 3%. by the fourth or fifth tweet it's like, oh, carl is tweeting about apple. there's a law of diminishing returns on all this stuff. whether we are talking about einhorn or whatever it is. at a certain point the market says, all right, big deal. there's somebody talking about a stock and maybe it fluctuates a little bit. i do not think we should be rearranging our investment style or strategy based on what somebody might tweet. >> all right. we have unusual activity in a solar stock. john is on the case with that trade. first, though, the chips, micron applied materials, both hitting
so what do we see today? well, someone buys next week's calls, 34, and 35 strikes. so watch this. the calls last night closed right here around 40 cents. so far today, they shot up to a buck. that's the 34 calls. so that did i do? bought those. i'm going to try, judge, to sell some other calls against this as the stock rallies here. it is already up 5% today. here is the 35 calls. you can see similarly these have gone up and doubled your money overnight. obviously crude oil is moving higher, judge. often when crude oil moves higher, some alternatives to crude oil, like first solar, since it is so beaten up, gets a little love. that's what's happening today. shares up 5%. i'll probably be in it three days. >> all right. good stuff. come on back. coming up next, the dow continuing to flirt with 20,000. it can't seem to breach that level just yet. what history says about that delay. that's coming up.
♪ how else do you think he gets around so fast? take the reins this holiday and get the mercedes-benz you've always wanted during the winter event. now lease the 2017 gle350 for $579 a month at your local mercedes-benz dealer. there he is. farmer jim. slow mo. >> super slow mo. that was directed at you, scott. >> look at the -- rolling his eyes like a teenage girl. >> anytime he starts to go on a little bit too long, he's going
to remember the picture. know that it can be brought out at any moment. he's going to think twice. >> like dancing dr. j. >> a warning for all of you. >> we haven't seen the dancing dr. j in a while. >> creative people in the control room. that serves as a warning to everybody. >> yes, sir. >> with mr. roberts sweater on today. >> i don't roll my eyes off camera. i do it on camera. >> i wasn't talking about that. all right. let's show you the market. dow is negative. trying to get to 20,000. thought we hit it earlier. eric with what history says about that milestone and others. >> the dow has been struggling to get over 20,000. now the fourth day since we crossed 19. this could be a self-fulfilling prophecy that we don't get over 20 k, we may struggle to get there for a while. let's look at a few examples. the dow crossed 4900, no stopping it. consider the move to 15 ,000, we
blew right by 14,900 and hit 15,000 on the same day, holding a close two days later. we hit 9900 and then had to wait three trading days to touch 10,000, but then had to wait 12 trading days to close above 10k, including a close of 9997 and 2625 before coming back. here we are at day four, this could be the make or break day. >> doesn't look so good. why the trouble, you think? out of breath? market needs a breather? >> the market of stocks. it is not an index. it is individual stocks that have to advance or decline in order to make -- that's why it is called the dow jones industrial average. it is four stocks that matter. >> is this how markets were? >> part one. >> i open the hood and you can see the mechanics.
it is a market of stocks. apple and gold don't have a catalyst propelling them higher on a given day, the dow is not moving. we can talk about bank of america all we want. but it is not relevant. >> there is a feeling that things have, i don't know, stalled or taken a little bit of a break. a breather. >> the feelings are not as relevant as they might have been at dow 10,000. all of the volume and all of the activity that is ultimately going to push this market through, if, in fact, it goes, is going to be generated by unfeeling, unthinking, uncaring, algorithms, software programs, bots, computers and some of us will trade around the fringes of that. but the thrust when it goes could be as simple as a dia, the dow diamonds. that could be all it takes. >> speaking about not carrying and not thinking, who cares about the dow jones industrial average. >> i care. >> it is a sign, to some
respect, still -- >> relevant to main street. >> i'm sorry. >> i don't care about the dow. the s&p 500 is far more relevant. these 30 stocks, they're always picked but -- >> the front page of the paper says dow 20,000 in every newspaper or website from here to los angeles means something. >> no professional money manager cares about -- >> he's talking about the fringes. the fringes, retail, that's who gets involved with the big numbers. they're the ones reading usa today. >> they end up in the same place, they can say that one is not relevant, this is the professionals index and that's true. they end up in the same place in the end. the dow is a really good tool to watch. >> most statistics, you need 30 things in any sample to get what the rest of the universe is doing. 30 is good enough. they move up and down together, even though it is not for -- the rest of the world is -- >> $200 billion, only like 7 or
$8 billion in the diamonds, i think. to jim's point, like serious investor, if they're buying an index or trading an index -- >> we get the point. we're talking about a measure -- it is a reinforcement of where the tone has been since the election, what the level of optimism is and has been. has to mean something moren this than a big number. >> it has been a tough year. massive rotation. first half of this year was all defensive. the second half of the year is all cyclicals. and people are not positioned and haven't been positioned all year. maybe a little tired, maybe take a break, wait until we get earnings and then make better decisions. >> all right, final trades. we have three hours. thanks for being here. >> nobody is paying attention to apple. it is marching higher. that's one to watch.
keeps going higher. >> a couple of posz caitive cal this week. >> i've been bullish on bristle myers. get long. >> walgreens. >> photonics. >> thank you. >> "power" starts now. hi, everybody. i'm brian sullivan. well, after being red hot since the election, why have stocks turned as cold as the weather? dow 20,000 seems as far off as santa answers where the questions are and where the market is. plus, with just nine days until christmas, the clock is ticking on retailers nationwide, why many may be growing nervous ahead. will the force be with disney as rogue one hits theaters? power up your lightsabers, "power lunch," your father, begins right now.