Skip to main content

tv   Fast Money Halftime Report  CNBC  March 3, 2017 12:00pm-1:01pm EST

12:00 pm
next hour is going to be rock 'n rolling, fed time. >> fed time. >> as we work our way through powell and yellen and fisher. >> we'll recap all of them on "closing bell" today at 3:00. >> love that show. >> let's get over to headquarters. sc scott wapner and "the half." ♪ >> welcome to the "halftime report." i'm scott wapner. top trade this hour, why the tom tramped financial advisor in the country according to barron's thinks the trump rally is far from over. how high can stocks climb? steven weiss, steve lebenthal, jon najarian. let's begin with stanley chais from stanford. andy, welcome back. >> thank you. thank you. >> how much higher do you think the market can go? >> it depends over what time frame i suppose. but my guess over the next couple or three years is another 50% or something like that.
12:01 pm
would be my guess. i just give it to you mathematically. but with interest rates at 2%, and maybe they go to 3%, but you could argue with -- i'm talking about five- and ten-year rates now, not fed funds. you could argue that multiples should be up at 25 times earnings. and pretty easily you could argue that. you do that math with any earnings growth and you get like 50% over the next few years. so i think there's a long way to go actually. >> you still have people now somebody trying to come out of the woodwork and saying, well, you know, maybe we're kicking down the door of euphoria. maybe we're getting ahead of ourselves. mark faber was on the program yesterday call for an of large avenue lanlg of selling, too much being put on the trump agenda, et cetera. you don't subscribe to any of that? >> i don't subscribe that this is a trump rally or things like that. i think it's been pent up. i mean, the amount of cash and
12:02 pm
many2 has been rising. i think it was under 10 trillion. now under 13 trillion. i think people were frozen for a long time on the election stuff. and they've just been frozen. i have to laugh every time i hear the markets hitting new highs. i saw an article in "the journal" yesterday banks a new high after ten years. housing may have been hitting new highs now for every day because every day even if your house goes side way it is you own the house you get rental income from it. which in a sense is saying it's hitting a new high. when you deal with stocks, you don't get the operating earnings from the company. so you -- it just feels like the stock has to go higher or not higher. but they're earning money every day. businesses are basically doing okay, not doing as well as ceos and politicians like in some cases. but sure feels like the economy is okay in here. and when you look at the interest rate environment, it
12:03 pm
just feels like the one asset class that has lagged and funny you say people are euphoric on stocks. i see the opposite. i see a lot of chicken little skies falling only as it pertains to business. i don't like to say stocks. i don't see the nervousness in reales state or others a stet classes. i hear a lot of nervousness frankly on this show and things like that. it doesn't feel that bad to me. >> so what then -- what's the payoff for folks? what would you be invested in? what would you be buying in today if you still think there's that kind of highway ahead of us? >> it's hard not -- it's like what you want to invest and what you don't want to invest in. on the positive side i would want to be certainly i think financials have further to go which surprise some people. they're up to like 12 or 13 times earnings. still trading 25% cheaper than the s&p.
12:04 pm
and i think the fed are raise rates one or two times next year. i kind of doubt three. i think that's going to be a fascinating thing to watch donald trying to inflate and grow the economy and yellen can brick his balloon any time she wants to by raising fed funds a few times. this will be fun to watch. >> what if you're underestimating the fed? at 1:00 you're going to hear from fed chair yellen herself today. we heard from jay powell, he's a voting member with steve liesman yesterday who said, three seems about right. maybe more. maybe less, depending on how the situation sort of bears itself out. >> plays out. yeah. the thing on the fed, i don't really care as much about one day money. i think they'll raise rates a couple of times. the thing that i've taken a step back recently and started looking at global interest rates. i do find funny that everyone says our rates have to go higher and we have to get rates up. i do care a lot about the five and ten-year treasury. that's where i take my cue, how
12:05 pm
it affects americans. but our rates are already higher than sweden, switzerland, japan, germany, england, france. the ones that blow me away is our five and ten-year treasuries are 50 to 100 basis points higher than spain and italy. and it's hard to imagine this world of globalization, i don't think we're a riskier credit. i don't think we're growing less well than them. so how are their rates, you know, 1 1/2% and 2% for their ten-year treasuries and our rates are 2 1/2%, i don't see how our rate is going to go 3%, 3 1/2% with the dollar where it is. it's going to be interesting to watch. i think the fed will go a little more slowly than they talk. that's been traditionally what they've done. one or two times in the fed funds are in the cards because i think, once again, we're doing kind of well. but to tell american voters, i guess, that we're doing so well, we can slow things down which is kind of what fed raises do.
12:06 pm
they're contractionary. i think they're going to do one in march and then wait and see. it will be another quarter or two and maybe we get good economics, maybe we don't. i think things will keep limping along in a positive way. enough on that. >> i would love to open it up for debate. kevin o'leary is joining us as well today. he's selling financials. kevin, what do you make of andy chase's thesis on where stocks can go? do they matchup with yours? >> i agree on andy on many of the bullish sentiments of the overall markets but i'd like to focus in on financials because prethe president's speech on the 28th by the way i thought was like many others, the most presidential he's ever sounded which is encouraging for the markets the next day as we saw. focusing on financials the assumption going into that discussion around financials, there were going to be two engines for growth. in money centered banks and g d goldman sachs.
12:07 pm
we were going to unlock the harness in two ways. one was going to be deregulating the dodd-frank, let's call that a ball and chain on them because it was going to let them put more leverage on the balance sheets like the good old days, if you want to call it that. or a derivative of that. and the other was going to be between two and three fed hikes which is always good for banks. what i heard, i heard three things i didn't like regarding financials. again, staying on that is an engine of growth for the s&p. why i would reduce my position after the speech. i did not hear the agenda on bank reform on dodd-frank was anywhere near 2017 target. in fact, i saw it lose momentum. my feeling now is less than 20% chance that gets tabled. he didn't even reference it in the speech and i would look around the table, call my contacts, nobody is excited about that whole move anymore. secondly, i'm not sure at all that the rate hikes are as bullish and you've even suggested that, andy, that probably not. maybe two, maybe 50 basis points. and the thing that bothered me
12:08 pm
the most was i don't see a parallel path with health care on reduction of corporate tax rates, which is the mother's milk for all s&p earnings. all of a sudden that's a 2018 story. i'm like that robot in lost in space, warning red leader, warning red leader. all of a sudden the great growth drivers are taken out of the story. what's your take on that? >> on the bank -- first on the bank side, they were in the penalty box and they have been in the penalty box coming out of litigation from '08 and '09. everyone loves to hate wall street. i think they got sucked in the political process little bit. i think this first bump wasn't so much on fed funds going up and we both know all that -- those raises accrue to the banks. it doesn't accrue to the guy with the checking account. the banks take all that money and float. so -- and i think the litigation side getting behind them so that banks can just do a little bit, i mean, i'm not -- a little bit innuendo of government
12:09 pm
regulations of being lifted. i think they'll do better and get back to 13, 14 times earnings if the market is at 17 and 1. still trade at a slight discount but a little bit of earnings growth, which i think they will get. i think they're good for another multiple point going from 12 -- all kind of like 12 times earnings, going up to 13, something like that. 45e health care i think is going to rip in here, is my gut. that's another sector in the penalty box. >> kevin, even weiss who is sitting here was rolling his eyes before the show. o'leary, get off the bearish footba financials already. weiss wants to get in on this conversation. let's have a little debate. >> can i first -- >> absolutely. i want to see weiss. where is he at on the regional banks? i think those are toxic wastes right here. >> i know. and you've been saying that. we've disagreed in the banks for three or four months now. i've been very long financials. and you've been on "shark tank."
12:10 pm
so, kevin, first -- >> first of all, i want to interject, you're probably making more on "shark tank" than weiss was making in the financials. >> i don't think so. >> leucadia. i'm going to give kevin some respite here. wint the go back to andy and the market going up 50%. i think it will go up to 25 pe because rates are where they are. andy, we didn't get to a 25 pe when the ten-year was at 1.3. so how are we going to get to a 25 pe now when rates are going up? i think they go up three times but i think -- i don't even know where to begin on that. i just think that's ludicrous. you're going towards the end of a cycle, economic cycle. right now we're on one of the longest economic cycles we have. it's only going to be extended because we have tax reform coming because we may have infrastructure coming. that's why it's being extended. otherwise you're so long in the tooth here you're not getting to a 25 pe. the only way you get to a 25 pe
12:11 pm
is if the economy completely crashes and the earnings go down and the price -- the price stays the way it is. that won't happen. so, look, it does trend up. it does go up. financials are the place to be. and by the way, you also talk about the spread with interest rates, european rates are so low because of qe. because the banks have no choice but to buy sovereign there's. so it doesn't have anything reflection. should not be a benchmark for where our rates are trading. so that's the difference there. that's been the way for quite some time, three years. >> andy? >> yeah. well, i mean, i looked back at 50 years at the ten-year treasury and i always flipped the fraction and look at earnings over price, not pe. and for 50 years those things track pretty darn closely. and it all start eddie verging five, ten years -- eight years ago. i don't know why -- companies, a buck on 17 is 6%. earning 6 bucks right now on 100
12:12 pm
on a buying a business. and you're earning 2 bucks, 2 1/2 bucks by buying a bond. and businesses grow over time. and if you really think rates are going to keep going three, four, five, i get why wow you say -- >> i didn't see three or four, five. i said three times. >> earning three bucks on a bond and you're earning six bucks on a business, i would rather own that business, right? and i think -- people forget if you -- >> i'm not disagreeing. you haven't eewhen was the last time you saw 25 pe in the market on a sale. >> the last time the market was over priced in 2000. we're at 30 times earnings. and earning -- >> exactly. >> well, but your door number two was a ten-year treasury at 6%. now your door number two is 2 1/2 to 3%? >> he's not saying what's going to happen once we go up 50% in three years. he's just making a case that we could get there. >> talking about the case getting there that the markets should be trading at 25 pe and
12:13 pm
that just doesn't happen. it only happens right before a blowoff. i also take issue with the fact that he's saying everybody is so negative in the market. that's not true. you've got very bullish in the market otherwise you wouldn't have the market levels that it's had. so, yes, there's always a wall of worry, particularly when markets move up like they have. >> markets are at normt normal multiples. >> normal multiples are 1 times on the market. that's is average pe. >> i'm liking at kind of the current, next 12 months kind of a thing. and you're looking at a little bit of trailing. but you can debate multiples. >> i'll take 15.7 times on the forward. >> kevin, do you want to -- do you want to come back? >> my issue is i can't recall in the last four cycles when rates started to go up and i call three rate hikes a trend, okay? i don't see pes expanding in those periods ever. so the idea that we go to a 25 pe while the fed is raising
12:14 pm
rates not on this planet. i haven't seen it happen on the planet earth. maybe somewhere else. that never happens. so -- >> what do you think -- what do you think the five and ten-year treasury are going to do over the next year or two? i'm guessing they don't move a whole lot. that's my guess. every time the fed made contraction moves on one-day money the long end of the curve has flattened out a little bit and i think investors will take their queue more from where a five- or ten-year is trading rather than the fed funds rate. that's amy gut. boy, i'm still seeing pretty negative -- look at the amount of catch in m2 and the core of balance sheets. it feels like people are still pretty pessimistic to me. that's my gut. >> you can judge that a number of different ways, to the cash, that's still on the sidelines, to andy's point. people are looking at where bond yields are and saying, well,
12:15 pm
maybe that's a reflection even though others would suggest there's too much monetary policy in the system. that's a reflection, josh, of -- >> i don't see pes -- >> i had to hear him again. sorry. >> weiss was playing your voice back, kevin, he was so enamored with what you were say sxwlg we must be a point on inflexion because nobody can agree on anything. i like this conversation. >> i agree with kevin. >> there's nothing that's clear. >> josh? >> this is andy. one comment i would make, you know, cap rates, which i was looking interest rates, cap rates, i look at market multiples, cap rates 20 years ago were up at eight. now they're at four. that's the equivalent of the market pes doubling and that hasn't happened. most people think of interest rates dropping as helping the person with the credit card debt or mortgage debt. it usually inflates asset prices in a pretty big way. and stocks haven't had the multiple inflation that's occurred in some of these other
12:16 pm
asset classes like real estate. i just -- it feels like, when the money comes into the dollars and i think the dollar will stay strong given our rates are higher than the rest of the developed world, it goes into treasuries and real estate. it hasn't trickled into johnson & johnson and apple. it just feels like sooner or later the love date wall street stuff will slow down. and that's my gut. >> i want to open it up on the desk. it does feel like we -- maybe we're not at the pouint of maximum debate on both sides if we think we're overstretched or not stretched enough. but maybe to andy's point, to some respects we're getting there. what do you think? you the take it from the extremes of the faber to extremes of jerry siegel saying i thought this thing was on thin ice and now i don't think so anymore and that was after the speech. >> i think it's a mistake to look at the stock market overall. i've been saying this for weeks and it becomes more and more true. there is such a dispersion amongst valuations within industry sector, between
12:17 pm
industry sectors. i can find stocks to sell on any day. i can find stocks to buy on any day. i'm not worried about where the s&p 500 is going from here because, frankly, i don't know. >> but our point though, jim, is that a lot of people look at that as the sort of benchmark hk barometer of where we are going and you could make that statement no matter what the stock market is doing. well, there's always stock somewhere in the market you should be buying. >> that's not always true. there are times you can't find things to buy. when you get into a euphoria phase that's where everything is priced at the 25 multiple that andy is talking about or steve, even a multiple before you get to 25. there are stocks out there that are trading. good companies that are trading at low teens and yet we talk about the market being at 18, 19 times earnings. it's wrong discussion. go out there and do what we like to do. dpibd good companies at great prices. >> tell me one of them right now. >> sure. how about verizon. and we can debate it. but on the valuation and on the size of the company and their reach, that's a good one. another one that maybe isn't as cheap, alphabet.
12:18 pm
the peg ratio there is something worth buying. look at peg ratio always, not just the multiple but multiple versus the growth rate so i think debates about average pe ratios are academic and very disleading because there's never been a bull market in history that stopped because we've reached a certain pe level and there's never been a bear market that's ended because we've gotten so low at a certain pe. the pe is unknowable. if you want to talk about long-term average pe for the last 25 years, 89% of the time we've sold at a level above it. it's completely irrelevant from a day-to-day standpoint. from a longer term perspective, to me, there is no doubt that you're not going to make your asuffer shup shuns if you're mostly u.s. stocks from today forward. it's just not going to happen. i'm sorry. however, if you can put together a portfolio with international stocks selling at much lower levels, almost no confidence in those markets whatsoever, if a few things go right or a lot of
12:19 pm
things that a lot of people say is going wrong, don't happen, you're going to out perform. we took action in january. we're slightly underweight u.s. stocks. it's literally the most uncomfortable asset allocation move you could make right now given what's going on but we feel we wille be rewarded. not tomorrow. cheap and going up are not synonymous. so we have to look at i think so this in longer term time frames and when you do that, you have to think about expected returns. you have to think about the starting multiples, what you're paying for it. if you're trade iing, it's irrelevant. >> andy, you're on the other side of that, too. what you say and you can characterize it more for us, very domestic now in terms of where you're putting your money to work. >> yeah. yeah. i also want to say -- i don't want to come over too bullish. there are lots of issues in the world but i laugh when i hear these things because i think i said this once on the show. my grandfather built a bomb
12:20 pm
shelter in the '60s at his house. and in the '70s impeaching presidents in vietnam. there's always been stuff going on in the world. but on the scale of things, i don't feel like things are any worse today than they were in a long time. but going back to diversifying international, i agree international stuff is cheaper. but i tend to use real estate analo analogies. i just would not buy, you know, a department in berlin or london or paris or something like that, london, but because then you own in euros. and when you go to sell it in three to five years, i'm going to repatriaeat tratriate our mo dollars. i think the euro is going to go lower. i think the yen is going to go lower. >> you could be right but, again, the reason why international stocks work as a diversifier is because of the currency risk. currencies tend to trend in regimes of between five and seven years. so if you think about the
12:21 pm
'03-'07 period the euro out performed the dollar. european stocks did great. we've had the reverse for almost eight years now. i don't know when that changes but the whole point is it works because they'll differ and currency is a big part of the reason why. >> i like the diversification side of it, josh. i think all the viewers know this as well, scott. the likely hood of regulation rollback in europe has to be like that versus the likelihood that we're going to get regs rolled back here. that is what's going to make things better for the financial institutions and it's one of those rare times when i'm taking the other side of kevvin o'lear. i think, kevin, that's one of the reasons that financials move a lot higher so, in other words, i'm with andy on that because i think they will move higher. i hate to be against you, kef. but i think they will move higher because we're going see that regulation rollback. and when we finally do get the tax treatment changed, which might not be until 2018, when we
12:22 pm
get it a lot of those regionals are going to rock on that because they pay the highest tax rates. >> i want to go back to this issue around real estate that andy brought up using it as an index to look at markets overall because i'm a real estate guy, too. >> yes, sir. >> historically when you bought real estate at an 8 cap and you sold it at under 5, you made a lot of money. that's some of how the greatest wealth has been created in north america in the last 100 years. we're now sitting where prime real estate in new york city is trading at 3 1/2 cap, which we every metric, no matter how far back you go, is always a top. and the reason that's occurring is german, canadian, asian money coming in and buying these properties at ridiculous prices with the assumption -- that does not include the capital expenditure you have to do to keep the place looking nice. you're talking about the lowest cap rates in history. andy, how can that make money for anybody? help me out there, buddy. >> no, i'm with you.
12:23 pm
that was my point. i mean, i think real estate is more in the eighth or ninth inning. i don't think real estate is going down. why would you sell something paying 3 1/2 or 4 if door number two is a treasury at 2 1/2, right? because occasionally the landlord can raise the rents. look at rents versus the stream of interest and i'll take 3 1/2 or 4 that might grow at 1 or 2%. and i don't think real estate is going down. i just think it's had a much bigger move. and i do find that ironic that if you leased a building to a fortune 500 company you definitely would be getting a 3 1/2, 4 cap, right? but if you bought the same business, earning six bucks. one over market multiple, and i just think ceos can raise their earnings. 5%, it's nothing great. it's not what businesses like. i think ceos can raise their earnings 5% much more easily than a landlord going forward can raise rents.
12:24 pm
landlords can raise rents 1%, 2%. you get 3 1/2% or 4%. buy the business with the same tenant and get 6 bucks growing at 5%? i think real estate has had a much bigger move -- i mean, i could get a long discussion on this -- than equities have. yeah. >> i was going to say we're going to leave it there. really good conversation. thanks for spending so much time with us. we'll talk to you again soon. >> thanks. >> andy chase, morgan stanley wealth management. here's what else -- kevin o'leary is sticking with us, by the way -- coming up on the "halftime report." >> comcast gets in. the stock jumping again today. opportunity or run away? that's next. and coming up on "power lunch" an exclusive interview with the ceo of miylan, heather bresch at 1:00 p.m. eastern. more "halftime" coming right back.
12:25 pm
usaa gives me the peace of mind and the security just like the marines did. the process through usaa is so effortless, that you feel like you're a part of the family. i love that i can pass the membership to my children. we're the williams family, and we're usaa members for life. the market.redict but through good times and bad... t. rowe price... ...we've helped our investors stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence.
12:26 pm
12:27 pm
welcome back to the "halftime report." i'm fill lebeau. look at shares of general motors moving higher after reports out of europe that general motors and psa group have reached a deal for the sale of openle and box haul from general motors to psa group. the deal will be announce and monday. this has been expected for some time as the negotiations moved along. we heard from general motors ceo mary barrow this week that they were making progress on a potential deal. now it appears it will be
12:28 pm
announced monday. that's when we will find out what the final price tag here is. most believe it's 1.8 to $2 billion range although it remains to be seen. obligations general motors admitted to in terms of pensions and opel and box haul but it's important because general motors essentially saying we're throwing in the towel when it comes to europe. never made money there since the year 2000 on and if you lose $15 billion they're finally saying enough, we're out. we're not going to grow good money after bad money. >> you know we're coming to you. >> i don't know if phil is still on and wants to give me feedback on this but basically i wouldn't say they're throwing in the towel. they were right about to make money on this. what they threw the towel on is politics in europe. they didn't like brexit. they didn't know what was going on in france and europe. they said enough is going right in north america and china we don't need the headache. i think they were right on the cusp of making money in europe. i'm sad to see it go. >> they were right on the cusp of making money in europe but i
12:29 pm
have to be honest with you. having covered this company in 20 years, do you know how many times i heard this company saying we're right on the cusp of doing it in europe and we have new management there. >> that's fair. >> to your point politics is a big part and the other part of the problem here is the labor in europe is a mess. an absolute mess in terms of shutting down plants when they need to be shut down and that umt mautly was really what was crippling general motors in europe. good luck to psa group. these guys not the healthiest company in the world. much better than they were a few years ago but they were on death's doorstep not too long ago. now they can try to see if they can make ago of it with opel and box haul. >> 4 1/2% dividend yield. you're supposed to own it regardless of what's going on in europe. >> true. good point. >> phil, thanks, man. >> you bet. >> thanks for sticking around for the conversation as well. nobody else -- i know you don't like gm. >> i'm stick -- >> where is this stock at the
12:30 pm
beginning of the year? >> geez, i want to say 34. i might have that wrong. maybe the chart will come up here. i'm not far off. >> up 10% year to date. >> i had a very good first quarter earnings report. you've had february sales come in that were very nice. idea of peak autos is done, off the table. we're fine. breaking news with steve liesman, senior economics reporter. steve? >> thanks very much, scott. fed vice chair you stan fischer speaking here at the boost school of u.s. monetary policy conference. making no comments on current fed policy but he is talking about a current issue politically here. he is warning of the risks of a rule-based fed policy which is something that some republicans in congress have favored. he says, a committee, the way the fed operates now, makes better policy than a rule would. the rule is useful in terms of making that policy. more central banks around the world have adopted a committee-based approach rather than a single person or a rules
12:31 pm
based approach. and the reason is because, he says, a committee provides diverse opinions, especially in the united states, from all around the different economic areas and economic industries of the country. finally, he says a committee can react faster, be more creative than a rule can be. doesn't dismiss the idea of a rule which is something put forward by john taylor, preimminent stanford economics professor. and also liked by many people in congress. stan fischer taking a swipe at that and saying that's not the best way to make monetary policy. in half an hour we're going the have an important speech by fed chair janet yellen. we will gauge whether or not she leans against or in favor of the policies that have been put out by several fed officials in the last several days which have prompted the market to believe a rate hike is coming this month. scott? >> maybe he just doesn't want to front run the fed chair yourself knowing in less than 30 minutes she's going to be giving her own speech. as you said, steve, do you feel like we've reached the point now
12:32 pm
where march is a formality rather than a question? >> i think the fed chair would have to lean substantially against it right now. what the fed does not want to do, having reversed the markets' opinion -- remember if you look at this fed proshlt chart we were down with the probability below 10% and even for a long while there just in the 25% range. then in a few days this week, a couple speeches by several key fed officials, that probability rocketed up in a way i've rarely seen before to now it's in that 75% and what we're suggesting, scott, is that it's a foregone conclusion percentage point and i think, look, there's one other thing that can change it which is next friday you got that jobs report. if that's very weak and there were revisions downward, yeah, then you could change the possibilities and the probabilities but the market would do that itself. by the way, beginning today the fed enters a new and extended blackout period of ten days and not seven days. what you you hear from janet
12:33 pm
yell season going to be the last word on fed policy before that meeting from the fed. >> we will be listening for certain, less than 30 minutes time. steve liesman, live with us. you guys have a comment on this issue? whether you think it's a foregone conclusion in march and market appears to be okay with that? >> at the beginning of this week it would have been a surprise. the fed does not like surprises. they spent all week communicating this. so it would not be a surprise. they are clearly going out. >> they put it out through the "wall street journal" as well. obviously they want to get ahead of what's going to be happening politically in europe. so this makes sense to get this done now. if they don't it's a mistake. >> i thought they were going to go when a week ago, no expectation. and you had the ten-year down 10.3. i think they're going now. now it's a freebie. >> the ten-year go? does it breakthrough 2.6? >> depends on what the language is to know where it's going to
12:34 pm
go afterwards. but, no, i think it's at 2.5 because it's assuming it's going to go. >> i think the earlier point though, forget about the ten-year, where does the long end go? do we flatten further? that was the thing -- this is the thing that haunts you at night if you're thinking about '07 and you're saying, the fed raises 13 times whatever it was from '04 to '06 and for some reason they can't get the long end to behave and act like they're raising. telegraphing everything that was to come. that's probably more interesting to watch p t. shape of the curve rather han the immediate price of the ten-year deal. dow is up almost 5% in a month and nasdaq 100, 4%. almost the same as the s&p. first, michelle carusoa russo c '. >> coming up at the top of the hour, regulation. cutting the costs of drugs and the epipen fallout. exclusive with mylan ceo heather
12:35 pm
bresch. another interview, the man who oversees vanguard's $4 trillion is telling us why he's getting nervous about this record breaking rally scott was just talking about. and janet yellen set to take questions and answers about the economy could very well be a market mover considering everybody is expecting a rate hike next month. is she going to confirm that? we're going to carry it live. this month, it's march, right? "halftime" returns after this quick break. this actually makes sense. now on the next page you'll see a breakdown of costs. what? it's just... we were going a about it buwe wen't sure when. so thanks. yeah, that's great. being clear and upfront. multiplied by 14,000 financial advisors, it's a big deal. and it's how edward jones makes sense of investing.
12:36 pm
this is where i trade andrs. manage my portfolio. since i added future i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meang i can dod- what i need to do, then i can fus on what i want to do.o. visit to see what adding futures can do for you.
12:37 pm
this bad boy is a mobile trading desk so tt i can take my trading platform wherever i go. you know thathinkorswim seamlessly syncs across all your devices, ght? oh, so my cuom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. ly at td ameritre
12:38 pm
take a look at snap surging again today after skyrocketing 44% yesterday. now another analyst is taking a shot at the company though. atlanta equities downgraded, underweight. call of the day. this stock is must ripping again. now our parent nbc universal gets in on the ipo, 500 million. they've invested. the stock is about half of the
12:39 pm
gains that it had earlier in the session. you got some. >> yep. >> and you -- your brother had some, too. he dumped yesterday. >> i sold today. >> you sold today. >> yes. the lock-up -- not the lock-up, but the settlement, t plus 3 meaning the stock issued yesterday on the ipo and basically on tuesday becomes available for lending, that is going to be interesting to watch. >> you can short it? >> yeah. right now you have to pay a lot to short it. you might not pay quite as much after tuesday on next week though. it's still going to be a very tight stock. >> i don't know if you can borrow it yet because it hasn't is theled. >> this is a really important point. >> i'm sure. >> i'm saying it, so i think it's pretty important. no, no. this is a small float. >> about time to get lunch? >> this is 200 million shares -- you're not one to talk. >> 200 million shares. if you think about that in terms of the relative size of all of the asset management that ain't a lot of stock out there.
12:40 pm
this can go for a while. think back to gopro, public at 24. within three months, with un00 share. didn't stay there but would you imagine you started shorting on day three? for it g it. steak shack, 21, $98 a share in four months. you've got to keep in mind, there's an artificial scarcity here. i don't know if you want to get run over by that. >> kev, good points that josh makes. stocks he mentioned held back up the point. what do you think? >> i got offered this stock but it was with a caveat to it i couldn't sell it for 90 days. i tried to borrow it to shorten my position, couldn't. i think that happened to a lot of people, too. i think this stock is. >> reporter: much like a gopro. very much like a twitter, very much like a facebook. if i want to own this thing i'm going to wait 90 days until that lock-up ends because a lot of the institutional stuff had the covenants on it.
12:41 pm
what is it, trading 70 times sales or something? it's ridiculous. >> let me pose it to you this way. just bear with me on this. if our -- are people so scarred at this point by what's happened with gopro and especially what's happened with twitter that they're now just in general -- a lot of hater on this stock as we're finding out on wall street of those who cover it and generally around the desk. >> scott, it's a $30 billion valuation. >> 40. >> nobody is scarred. the company -- >> i'm saying the opinions on the stock now, nobody wants to touch it with a ten foot pole. >> forget opinion. look at the market value. tells you everything you need to know. right now the investor class is bullish on snapchat. >> look at the price targets on the stock. >> so what. >> but to the point he's making people are looking t this not as twitter or gopro. facebook. they're ignoring the first year where it was under water. they're saying this thing can go to 130. i've got people calling in and saying buy this for me. i don't want to buy it.
12:42 pm
it's not a valuation. i wouldn't buy this. there is hype. >> there's emotion to it. momentum that's driving it. institutional players keep dumping into it because they don't have big enough positions for it to matter. they're peeling out and retail coming in. >> so small. best way to phrase it is can you imagine you don't own it and it is facebook and you had some opportunity to throw some of this in your book at $20 a share? that can change on its mind. >> kevin, thank you. we will see you back here i hope soon. >> take care, my friends. >> kevin o'leary. costco, amd, in the blitz. first though, the dow 30 heat map. take a look. there it is. goldman is the best on a down day for the dow. down ten points. we're back after this. the future of business in new york state is already in motion.
12:43 pm
companies across the state are growing the economy, with the help of the lowest taxes in decades, a talented workforce, and rld-class innovations. like in plattsburgh, where the most advanced transportation is already en route. and in corni, where the future is materializing. let us help grow your company's tomorrow - today at the markets change... at t. rowe price... our disciplined approach remains. global markets may be ununrtain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence.
12:44 pm
12:45 pm
what if we could bring you by having better values? at blue apron, we work directly with more than a hundred family farms. so instead of spending on costly middlemen and supermarkets, we can invest in the things that matter most: making farmland healthier. cutting down on food waste. and bringing you higher quality, fresher ingredients for less than you pay at the store. because food is better when you start from scratch. blue apron. hi, everybody. welcome back. i'm sue herera. here's what's happening. thousands of civilians fleeing mosul as iraqi forces push into the city's western region. since the operation to take back mosul from the islamic state began two weeks ago, 28,000 people have been displaced. an oklahoma based native american tribe suing several oil companies in tribal court. the pawnee nation alleging
12:46 pm
triggered the earthquake in september due to their fracking activities. that earthquake damaged several historic buildings. it is going to cost more to get a costco membership. club retailer announcing that it is raising basic membership fee $5 to $60 effective june 1st. costco last raised fees in 2011. the new york jets releasing three big names from their roster according to reports. wide receiver brandon marshall as well as nick mangold and durrell reevis. the move saves the team $46 million. that's the news update this hour. more "halftime" after a quick break.
12:47 pm
so with our ally cashback credit card, like what? like a second bee helmet with protective netting. or like a balm? you know? or a cooling ointment for the skin. how about a motorcycle? or some bee repellant. i'm just spit-balling here. nothing sts us from doing right by our customers. ally. do it right. told you not to swat 'em. ally. do it right. usaa gives me the and the security just like the marines did. the process through usaa is so effortless, that you feel like you're a part of the family. i love that i can pass the membership to my children. we're the williams family,
12:48 pm
and we're usaa members for life.
12:49 pm
welcome back. i'm sue herera where this news alert concerning one of the fed members. the lot of them are speaking this week. mr. bullard specifically saying economic conditions have not changed since january to justify a march rate increase. he says using the march statement to set up a may rate increase is a, quote, more traditional approach. he says he's not sure that we can cite inflation as a reason for a march rate increase. he says the recent rise in equity i prices reflects expectations of tax overhaul and other fiscal changes. so basically, scottie, he's saying that economic conditions have not changed enough to justify a march rate increase which might come as a surprise to the market because they've been thinking they will get a march rate increase. >> which i think they could
12:50 pm
theoretically. he's a voting member. >> he's a voting member. >> he could get a descent. >> exactly. >> this is interesting though, sue, thank you. jay powell obviously told liesman on the inflation question, i think his exact words were we're getting awfully close. >> yep. so you'll have a debate, do you have to be close enough that you think you're going to get there. >> to sue's point, you could get a dissent. >> bullard is not a voting member, i'm being told. >> i agree with your earlier comment. it's a chairperson's board. and everything else that goes on is basically commentary. if she wants to do it, that's what's going to happen at the end of the day. >> drilling stock. john will break it down for us,
12:51 pm
tell you which one it is. 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? the value of capital is to create, not just wealth, but things that matter. morgan stanley
12:52 pm
12:53 pm
12:54 pm
welcome back. dr. j has made his way to the telestrator. we said it's a driller. there it is. >> there it is. ensco, judge. basically from the october timeframe, september, october, until january this year, shares nearly doubled. but they're still a far cry from where they were. offshore drilling primarily. and today they stepped in. you can see these calls have moved up pretty dramatically today, virtually doubling from yesterday and now like i say, i'll probably hold them at least a week. if this thing breaks through 10, looks like 12 is the next stop, turning that into a four times your money on this trade. >> interesting stuff. there's the movement, too, of about 2.5%. doc, all right. make your way back here. >> all right. >> we also, before we close the
12:55 pm
week out, we think it's only appropriate, for obvious reasons, we pay our respects to judge joseph wapner. no relation, by the way. passed away last weekend. age 97. he was laid to rest yesterday. the original, the one and only judge wapner. but we didn't say anything on monday. we were on to other things, but we didn't want to miss the moment to send our own -- >> pass the gavel to you. >> pay our respects for obvious reasons. >> the gavel pass been passed. >> the nickname is for obvious reasons but it is just that, a nickname. he is the original, the one and only. we didn't want to end the week without giving respects to his family as well. >> it's a nice way to honor somebody, judge. >> yep. >> he will be missed. >> yeah, he he will. he he will. final trades after the break. a selusive today.
12:56 pm
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. the global investment management businesses of prudential dearthere's no other way to say this. it's over. i've found a permanent escape from monotony. together, we are perfectly balanced. our senses awake. our hearts racing as one.
12:57 pm
i know this is sudden, but they say...if you love something set it free. see you around, giulia
12:58 pm
it is time for final trades. mcdonald's tells the advisory group raise the price target and raise their estimates. what do we think? 127.81. >> look, they're doing really good stuff. i think the shareholder response was tep id if only for the reason they're addressing technology for the most part,
12:59 pm
which is fine but they're not doing enough, in my opinion, and those at rbc, about the quality of the food. you can have the best delivery, app and all that. but if people aren't in the food that's where you'll run into a wall. >> i never heard those words put together. >> what? >> quality and mcdonald's. you don't go there for quality. you go there for convenience. >> they could do a better job. >> up their mcnugget game. >> you're not paying that much more. >> i'll take your word for it. >> you're not paying that much more for something like panera, chipotle. my final trade is health care seems to be moving. i like bichlt otech. i still think it goes. >> another andy chase thing, overweight. >> i don't like biotech. no, i like biotech. >> never -- just relentless. >> go. what have you got? what have you got?
1:00 pm
>> just poisoned the well. >> give me a final trade. give me a final trade! >> oh, my god! all right, all right. i still like the banks here. i disagree with the -- >> "power lunch" starts right now. i'm brian sullivan, along with michelle caruso-cabrera, and wilfred frost. welcome. huge news friday. krechlt o of mylan coming up. right now, breaking news from the federal reserve. let's get right to cnbc' own steve liesman. >> fed chair yellen, in no uncertain terms said a march rate hike would be appropriate if, when the committee meets later this month and judges the fed is on track to meet its goal. she goes on to say conditioned report, three rate hikes this year as far as she can tell. she says to markets, expect faster removal of the combination, aka rate hikes in 2017 than you've seen in the past couple


info Stream Only

Uploaded by TV Archive on