Skip to main content

tv   Fast Money Halftime Report  CNBC  March 21, 2017 12:00pm-1:01pm EDT

12:00 pm
u.s., europe, and emerging markets. last time we were at the level of our stock allocation, it was mostly u.s. that was the playbook. right now the playbook is much more diverse and you're getting the lower correlations of global equity markets to created a really good opportunity for us right now. >> thanks, phil. see what the afternoon brings us. let's get over to headquarters and the half. welcome to "the halftime report." we begin with a market alert. the sudden sell-off for stocks. the first triple-digit loss for the dow in weeks. big moves in weeks. some signaling out that looming vote in thehouse on the health care plan and whether the president has the votes he needs. with us for the hour today, joe terranova, josh brown, josh leventhal, john najarian with us as well. 110 days since a 1% decline or worse for either the dow or the s&p. is this about washington or something more? >> look, i think you had a lot
12:01 pm
of overbought charts, i think you had a lot of people with a lot of gains. yesterday you get some news that may be tampered, you know, dampens expectations for legislation, the health care bill is not looking great and people say, well, what does this do to all the tax stuff i was hoping for? we've been talking about this forever. at the end of the day, scott, though, the headlines are worse than the actual action. the vix is up 111%, which sound scary, but we had 12 spots 64. that's a total snooze. s&p is still up 11%. and then take a look overseas and everything's fine. >> so, doc, you've got bank of america down 5%, right? it's the banks that are getting ripped. goldman is getting hammered today. what's the story with some of these areas that are really getting hit the hardest, whether it's biotechs or the banks, under armour is the worst name in the s&p today. it's a broad-based sell-off. >> and you take a look quickly,
12:02 pm
judge, at exactly what you spoke of. you look at the region theal banks, for instance. those regional banks, since the first of march are down between 6 and 9%. the regional banks. meanwhile, jpmorgan, is down 2.5% over that same period of time. goldman is falling right there with the regionals. so there's definitely somebody that's drawn a line here, saying, here's the ones i like, here's the ones i don't, and they're dumping the ones they don't right now. >> joe, tell me about washington and this looming vote thursday in the house or is this about something more? you heard a voice not that long ago on the network saying, maybe the trump rally has topped out. >> maybe you're taking the policy away from the market, but we don't know the answers to that and we we won't know the answer to that for a couple of months. for traders, money managers, head fund managers, today's move is a little bit more sequential as it relates to a possible correction. you raise awareness, you -- i don't enecessarinecessarily thi raise cash, but go into the derivative markets and find
12:03 pm
protection. >> jimmy, goldman is below its 50-day moving average for the first time since the very, very beginning of february. transports, as i said, are weak. ian weiner pointing us out today of huge level he's watching there. that fedex reports tonight, let's not forget. 13% of the index coming from fedex. >> listen, i don't think that this is the big sell-off correction. you're already seeing things bounce back maybe a little bit. we'll have to see how it closes today and how tomorrow's action is. but i do want to say to your question, is it washington? yes, it's washington, but a lot of other things, as well. we haven't really talked about the atlanta fed survey, which has first quarter gdp at 0.9%. by the way, the ten-year treasury at 2.43%. that's 17 basis points off of last week's high. is there trouble in the u.s. economy? got to answer that with a solid maybe, but if there is, the earnings recession being over, which we've postulated on this desk for many months, that might be the wrong call, if we get a slowdown in the economy. that worries me. >> this is what kashkari was
12:04 pm
worried about when he wrote that article, judge. the article, of course -- >> why he dissented. >> yeah, why he dissented. and just to jim's point, down 17 basis points, that's about 5% off of the ten-year already, just since last wednesday. in terms of yield, and that is telling a story that kashkari was -- >> so tell me, then, why are yields and the dollar falling the way that they are? is that making the market nervous in and of itself? >> oil is not rallying as well. again, if your optics are short-term, that's a problem for you, because oil should be rallying as the dollar is falling. capital flows, not monetary policy, are what dictates the ten-year at 243. >> let's get down to d.c. right now. kayla tausche standing by for us on capitol hill, catching up with some of the folks coming out of that big meeting today with leadership and the president. kayla? >> reporter: the president was asked the question you just posed a few different ways this morning, whether he has the votes for this health care bill to pass it.
12:05 pm
at one point he said, i think so. another point, he said, pretty much. just a few minutes ago, democratic steny hoyer says he's pretty confident that no democrats will be voting for this bill. that means the house freedom caucus votes are the ones that hang in the balance. and at the meeting with the republican conference earlier this morning, the president personally called tout leader of that group, congressman mark mad meadows, threatening to go after meadows if it was the votes of the freedom caucus that cost the white house that win. just after those comments, speaker paul ryan was ask idea that group stands now. >> we have a lot of freedom caucus members who are supporting this bill. we've been working with all of our members on many of their concerns. and i would simply say that a lot of the members' concerns have been incorporated in this process. >> reporter: you take a look at some of the changes, the fact that obamacare taxes will be repealed this year versus next year and that medicare expansion will be further kushed, those
12:06 pm
are efforts to that end. but we will get a new cbo score this week, scott, and that could further complicate things. any delay this week, of course, would obfuscate the timeline, the calendar for this administration. but i think there would also be, scott, a bigger question raised, of whether the business of governing is something the president can be a quick study on or whether he'll face further backlash when he tries to do tax reform or infrastructure. >> kayla tausche on capitol hill, thanks. how patient are the markets going to be if it gets even messier and delays the things we've banked on already. >> back up to the beginning of the year, where we all said, virtually universely on the desk, we're not going to see tax until the late second half of 2016. none of us here on the desk thought we'd see tax reform, repatriation, all the rest of it, until late 2017, if that early. so how patient are they going to be? josh said, top of the show, 12.5 is as high as we've gotten in the vix. we were 14 beginning of january.
12:07 pm
we've barely been able to get over 12. i think they're being very patient here. rather than seeing a panic, i think there's some people -- >> i don't think he read the bill. i really don't. i'm going to tell you right now, he was talking about in two to three weeks, folks, we're going to have an amazing tax plan. that was five to six weeks ago. i really don't think he read the health care bill. i think he was given the cliffs notes by his advisers. i think he thought, this is something we could do quickly, the american people wanted it, i think that is all being called into question. you can ignore all the russia stuff, and i won't even go there. i don't think he read the bill. if he did, he would say, this is the exact opposite of what i was promising people in the most down trodden counties in michigan and pennsylvania, states i was not supposed to win, wisconsin. this is the absolute opposite of what i said. and i think if he had read it, we wouldn't be here with health care and maybe tax reform would have been put to the front of the list. >> let me ask you this, what
12:08 pm
happens if they don't get the votes? what happens if it doesn't pass on thursday? >> we're in trouble. >> today's the day to start preparing for that. >> he needs the freedom caucus votes. >> here's the problem. we have all -- well, i'm not going to say all, but conventional wisdom has said, the president has 100-day honeymoon to get things done. we're running out of times. we're bogged down. none of the even inflammatory things he's wanted to get done that has gotten done. >> earlier this morning, when the market -- stocks were higher, and maybe people started focusing on, okay, they come out of this meeting with the president on the hill, they sound less than certain that they definitely have these votes. other internals of the markets start to weaken. it's the small caps, it's the dollars, rates, transports, things that really matter to the way the market works. >> and scott, i'll disagree with josh on this. i think yesterday waactually mattered a lot? >> i didn't say it didn't matter, i said, put that aside. >> okay, nonetheless, i think yesterday mattered a lot. the idea that the fbi really
12:09 pm
thinks there is some connection between trump and russia -- >> the stock market opened higher today. >> and it reversed lower because the correlations have that be working broke down. the dollar broke lower. this is something we have not seen. that's the against the consensus of positions. when you have correlations the break down like that, you get an intraday market reversal. >> let's bring in paul richards right now on the phone with met lee global advisers to talk about where the dollar may be go. paul, good to talk to you today. you're not surprised today. where's it going and how long will it last? >> firstly, i think the market got the fed wrong last week. three months ago, they were surprised by three dots and last week they expected four, and now we have affirmation of three. there's disappointment there. they shouldn't be disappointed, but they are. i think eu politics needs to be taken into account. everybody has worried about a frempk election surprise with le pen, but macron bought her last
12:10 pm
night. that looks good for france. and lastly, i think they're really, really worried about health care. if he fails there, then realistically, you know, everything that we've been banking on in terms of reflationary reform could be out the window. so, thursday just got bigger and bigger. i would say, half of the dollars's fall is related to thursday, and i would say that if he can get -- if that vote can pass on thursday, the dollars will be rallying again. and i think markets overall will do well. but thursday's a very, very big day. >> what do you do between now and then? do you continue to lean on the dollar, or assume that the votes come about, the president gets what he needs, and the dollar has a rally if they pass it? >> i think that. i think he's got to assume that it's in the price now, scott. this is the adjustment. you get 48 hours of real nervousness. but overall, i don't think you lean anymore on this. you sit on your hands and you wait. and you react to what you get on thursday. otherwise, it is now in the price. >> paul richards, appreciate
12:11 pm
your time very much today. paul richards joining us from medley global advisers. meanwhile, a trio of big calls today on some of the most closely followed stocks in the market, apple, disney, and facebook. all these analysts, bernstein, sacconaghi, d sacconaghi, d'clemente. first, the about-face. on facebook, shares are on the move this hour. rich greenfield joins us now to discuss it. rich, good to talk to you again. >> thanks for having me. >> you're very frank in your note. not having a buy on facebook has clearly been a mistake, you say, and we're not going to allow that mistake to continue. what switched? >> when we downgraded it last summer, the stock was a little over 1201. we were looking at what seemed to be incredibly high expectations for the stock. looking into 2017, where management was actively looking for a slowdown, and it really just seemed like the stock had kind of run out of steam.
12:12 pm
that was certainly the right call for six months. but what became really apparent as you moved into the first few months of this year is that facebook is still crushing it. and instagram stories, which has been their newest launch, has really reinvigorated and taken instagram to all-new heights. and some of the things we were really worried about on the video side, in the core facebook video product, have been altered pretty materially, all in the last few weeks. you put all of that together, it really seems like, with the secular tailwinds that facebook has, how can you not tone facebo facebook here? the stock is not expensive, it's not expensive. and the growth deceleration, while i still think growth is decelerating, i think it's going to be a lot slower o eer of a deceleration than the market is anticipating. so we're well above the street for 2018 revenues and on an adjusted ebitda revenues and earnings. you look at that and say, how do you not want to own this stock at this level looking out over the next 12 months? >> even amongst the bulls, it's
12:13 pm
josh brown, by the way, the big disagreement seems to be, is facebook going to get to their numbers with ad load or better ad pricing? are they going to clutter our timelines or find out a way to charge more? where do you weigh in on that debate? >> i think that's exactly what part of our downgrade was premised on, was the fear that as the ad loads sort of hit a peak, that video became that much more important. and we were kind of uncomfortable with how slow facebook was in addressing video. they went off and did a lot of live video. and i looked at a lot of the live video that facebook was pushing to me and everyone i knew, and it looked like generally bad, unexciting content. >> worse than youtube. >> yeah, it was just, most people don't shoot good video. if you tell consumers to shoot live video, you get really bad video content, not the great stuff whether it's cnbc or cnn or, you know, pick your source, but it wasn't great content. i think as they've refocused away from live in recent weeks and instagram stories, just being an absolute monster,
12:14 pm
instagram stories gives them video inventory to sell. so it gives them greater engagement, so more time spent, which helps the ad load problem, because you're spending more time on the plairapplication, a gives them video, which is a much higher cpu ad unit to sell. so the push away from live into higher quality on-demand video, those two things gives me comfort, even as the ad load peaks, there is a way for them to continue to drive very, very robust revenue growth. >> lastly, though, rich, how far from perfection is facebook currently priced? trades at an above-market multiple, stock's been up 25% in not that long period of time. what's the answer to that question? >> hey, look, over the last nine months, the stock is up 15%. and for six months, it did nothing. it kind of settled, had really kind of flatlined. and now, as it becomes clear that there is a meaningful new growth, when we were looking t it back in june, instagram
12:15 pm
stories hadn't launched. we were looking at really video, you know, kind of being slower than we expected. now we have instagram stories, an unexpected blowout surprise on the upside, helping drive that product, and then you've got the video strategy finally starting to materialize. look, we probably should have done this a few weeks ago. but as we look out, i think when you look at this stock at 23 times earnings, it's not an expensive stock, growing it over 20%, over the next few years. and so i think that this really isn't expensive. and more importantly, when you're looking for growth in the media sector, pick up any of your phones or any viewer that's watching this. pick up your phone and look at your home screen, there's no legacy media apps anywhere. they've made no progress addressing their probably problem. the only ways to play mobile is through facebook and people like google. there aren't ways to put dollars to work in mobile. >> rich, appreciate the time, as always. i know some of you own it, some of you don't.
12:16 pm
>> well, meaningful growth lag, as he said about instagram stories. that's the thick we've been pounding the table about. that's why they killed snapchat. snapchat has rolled over in terms of engagement. these guys are accelerating to the upside and you're drawing from a much bigger audience. they already have 1.8 billion users on the overall facebook. you push this to that audience, other than saying there are 6 billion humans or 6.5 billion humans throughout and snapchat could end up being on all of those. not the case. as the dow comes off its lows of the day, we are talking now about a key dow component and it's isn't the spotlight. nike set to report earnings after the close. jonathan krinsky of mpp partners is on the phone. last time you told us to sell and say, just sell and you were dead on. today, you say, nike, just buy it. why will you be right now? >> thanks, scott. there's a couple of things. first, i think is the sentiment positioning of the market. if your call, when we made the call back in october of twoo201
12:17 pm
there was something like 85% of sellside analysts had buy ratings on it and people were jumping over themgss to upgrade the stock. the stock has since pulled back. it's up 14% off its lows, but still down about 18% from those highs. and in the midst of that pullback, we've seen analysts pull back their optimism. there's now about 62% of sell-side analysts with buy ratings. but really, it's a function of the fact that the trend has now finally turned from the last couple of months being a bear trend, and now we finally have a rising 200-day moving average. and it's really just setting up nicely. to be clear, this isn't a call on the quarter. it's not a one-day call, but i think the main picture here is that the trend is now, for the first time in about 18 months, really strongly in favor of the bulls here. >> yeah, i just wonder where sentiment plays into the whole thing, as well. you mentioned, sort of, the tide feels like it's turned a bit. top of the show, we note that under armour is the worst-performing stock today in the s&p, as here we are having a conversation about how maybe nike has gotten at least a little bit of the mojo back.
12:18 pm
>> that's a good point. there's a lot of bifurcation among the whole retail and discretionary space. there's a lot of names that are differentiating themselves and are actually, you know, hitting close to 52-week highs. but you have a lot of traditional, more of the big-box retailers that are near 52-week lows. i think nike can work on the upside, even if something like an under armour continues to move lower. >> jonathan, thanks for coming to the phone. talk to you again soon. let's kick around nike. >> well, first of all, i think what's important to look at is the north american future orders. remember, last time, they guided flat to down? are we going to see a significant recovery there, in terms of pricing, you've seen recovery. but fundamentally, i want to listen very closely to this call and see what their guidance is going to look like as it relates to not onlyn north america, but globally, future orders. >> you're the one who said that the tide has turned. >> this important isn't the most
12:19 pm
important quarter. it isn't seasonally. and the verbiage you're talking about, joe, is going to matter. i would frankly like to see a miss. i would like to see the stock come down a little bit, so i could buy more. i don't own enough of it, frankly. i think the long-term trend is going to continue. jonathan is exactly right that the sentiment has turned. i would like to own more of it. i just need a little price break. >> you mentioned seasonality, not being strong in the prior. and as part of his note, he points out it's strong now through may and april is traditionally the best month for the xly over the last 15 years. >> jim's talking about the fundamentals of the business. john's talking about price. so they can both be right on that. i'm long the stock. i bought it at 50 the last time they disappointed. i think it's one of the best-run companies in the world. and when i've bottom-fished in this name in the past, it's typically been, uh-oh, nike's over, under armour will beat them, blah blah blah. never works out that way, stock usually recovers. regardless of what happens in
12:20 pm
the earnings tonight, i'm with jim, if there's a meaningful pullback, i'll probably add to my position. >> good stuff there. we're just getting started on the halftime report. >> next time, another big call and the analysts behind it. toni sacconaghi, the number one the analyst covering apple makes a change that has investors considering their next move. plus, despite disney's 21% rise since november, another top analyst says the jump is just beginning. he says the disney is still in beast mode. miss the blitz, the call of the day, or unusual activity with the najarians? no problem, go to cnbc.com/halftime for all of that, today's top stories, and more. cnbc.com/halftime. scott wapner and the halftime traders are back in two minutes. fidelity, trades are now just $4.95. we cut the pri otradeso gi investo even re vue d $4.95, you can tre with a car advantage.
12:21 pm
fility, whwhsmarter investors will always be. d $4.95, you can tre with a car advantage. thmarkets change. at t trowe price... our diiplinednge. approach remains gl marketseuncert.. but yocan feelge. cocoiden remains our itmenexperien cas yourwld.lge. advisor...emains t. rowe price. investith confidence.
12:22 pm
12:23 pm
we're back on the halftime report. apple shares reversing their early gains today, still heading
12:24 pm
for the best quarter in five years. and one influential analyst thinks there's a lot more upside to come. bernstein's tony si sacconaghi raising his price target from $120 to $140. you say, how long and how far? and what makes you all of a sudden think that apple can continue to climb, even with the gain that it's had? >> well, good afternoon, scott. our belief is that the stock is still very inexpensive, trading at an enterprise value to free cash flow multiple of just over ten times. that's dramatically below the market and below peers. moreover, we do think that the iphone 8 cycle will be significant and we think there's upward revisions likely. consensus estimates are close to ours around 1029 for fiscal '18. we wouldn't be surprised if that number went north of $11, in part because apple might use repatriated cash to do a
12:25 pm
buyback. >> best quarter in five years. how much of that, toni, is due to apple? and how much of it is frankly due to the trump bump in the market itself? >> well, certainly, the market has appreciated about 6%, year-to-date. so, all stocks to a certain degree are benefiting from that. additionally, apple could be poised to benefit significant from any change in repatriation laws. so, you know, it's been batted around that ultimately, companies, u.s. companies may be able to repatriate at 10%. apple that has $230 billion in offshore cash, which many investors had discounted before. and i think increasingly, they're ascribing more value to that cash now, given that it looks like there's a good chance at repatriation, and i think apple's stwininstinct would be bring it all back. >> tony, it's jim leventhal. being long this stock, it seems to me like we're getting an early response to the upgrade
12:26 pm
cycle to the iphone 8. normally that's something that builds into the spring, into the middle of the summer and you start to think about getting out of it. do you think we're borrowing those gains now? >> we're certainly seeing some of those gains. you're absolutely right, jim. on average, historically, we've seen outperformance of about 1,600 basis points in the three to six months prior to the iphone announcement. i would note that both the iphone 6 and iphone 7 cycles had some gains before and had further gains after because the cycles were better than expected. the six was very strong, the seven was simply better than feared. and our belief is that it's certainly possible that we could have upward divisions based on the strength of the upgrade cycle. we believe that users have been holding off, that their last two products have been relatively incremental and evolutionary, and that the iphone 8 will be a significant form factor change. >> hey, toni, it's josh brown. tim cook has said publicly that
12:27 pm
the thing that he's most excited about in the future is augmented reality. he thinks it's better than virtual estimated. it's been estimated that could be a $165 billion market. apple is in a position they could own it if they decide to start incorporating those features with their cameras and going further with wearables. do you see it as that big of a deal, or is this just another thing like appletv and apple automotive that kind of hangs out there and then fades away? >> i certainly see it as an opportunity. i don't know if it's ultimately apple's biggest opportunity. but what we can have with augmented reality is much more significant and immersive experiences, particularly in gaming. and what we've seen from apple over the last couple of quarters, that the dominant driver of app store growth, which has been significant, has very high margins, has been in gaming. with things like pokemon and mario. so if you add in augmented
12:28 pm
reality, i think that presents a revenue opportunity in and of itself, where you have more gaming and ultimately, something that apple can monetize on the app store. i think beyond that, you know, anything that increases the utility of a device or can create the need for an upgrade is positive for apple. but longer term, you know, i think apple's fortunes are really going to be predicated on its ability to deliver new products and services beyond the current portfolio. >> toni, talk to you soon. just ahead, we'll hear from the ceo of lockheed martin. it's the world's biggest defense contractor. plus, disney is still in beast mode. that's according to analyst anthony d'clemente. he'll tell us why he thinkses that when the halftime report comes back. my gave me those es, you ?
12:29 pm
12:30 pm
he ran tt co. tta mana yourisk. ward jones makon is how e of invesng ward jones makon is how e of invesng rious: (shouting) heh! ho! ( ♪ ) 'off to worwe go! won: on the gulf coast, new exxoil procts 'off to worwe go! ed each jobreatedr 400jobs. byhe ergy indust pports tershe cmunity. together ththe are jobs tt naralgas ispi, ion ne. all whe reduci amera'issions.
12:31 pm
energy liv here. when the dollar uses 1% or more, the top-performing etfs are slv, which tracks silver, up 9%. the gold minerminers, and for mn
12:32 pm
this go to msnbc.com/pro. you know what's happening in our markets. let's take you across the pond there. ftse, dax, over in france are all in the red this hour. sue herrera has the latest headlines for us now. hi, sue. >> hi, scott. indeed, i do. here's what's happening at this hour. on capitol hill, supreme court nominee neil gorsuch continuing his testimony before the senate judiciary committee, telling senators that he keeps an open mind when issuing his rulings. >> everybody wants a fair judge to come to their case with an open mind deciding on the facts and the law. one of the facts and features of law you have to decide on is the basis of precedent. >> u.s. attorney preet bharara
12:33 pm
will join us the u.s. law school april 1st. he refused to resign from his post as attorney for the southern district of new york as the trump administration had wanted. he was ultimately fired. actor george clooney surprising an elderly but very avid fan in england over the weekend. he visited pat adams at her assisted living home to celebrate her 887th birthday. he brought a card and flowers and as you can see, he stopped by for a chat and a picture with his admirer. that's so sweet. that's the news update. >> that's why it's clooney. >> all right. for more on the euro's big move, let's get to jackie deangelis and the futures now team. >> the euro rallying today, highest level guinneagainst the dollar since early february. my question to you, is this an unusual move for the current seat, given the upcoming brexit plans? >> i think it's very unusual, and we have the prospect for two more rate increases here this
12:34 pm
year. i think the ecb, which has always been about two years behind us, is about ready to start increasing rates themselves. and they're going to be less tentative. also, it speaks to inflation. something we haven't talked about. this would make sense if markets expected the u.s. to experience more inflation for the next couple of years. >> brian, the euro rallying, dollar index falling below 100. would you be a buyer of the euro or the dollar at these levels, given everything that's going on? >> yeah, jackie, when you take a look at it, look at the german boon, it's been on fire and trading where it is now, i'm taking a look at that. if we see that pushed above 50 basis points, which i think it has ultimately bottomed for quite some time now. as we push above 50, i think the euro trades above 110 and it continues to move higher. i think it looks like the euro has hit a bottom here. i don't see it going back below or testing that 1-to-1 parody level anytime here. >> today on "futures now," we're going to dig deeper into today's sell-off with citi's private
12:35 pm
bank, david bialin and stephen sutmeyer. tyler mathisen, over to you. >> coming up at the top of the hour on "power," the drama in d.c. coming to wall street today. concerns about the health care bill, calling into question what could come next on the trump agenda. the d.c. drama derailing the rally, but will it also derail the rest of that agenda? we'll take a look at that. and tech and trumpanomics, ginny rametty will join us since her first meeting in the oval office just days ago. halftime report returns after this. [pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm m azy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly
12:36 pm
with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameriade. i work with people everywhere on sea, on land, and in the ai inspecting towers way up high avoiding turbulence in the sky. personalizing treatments with dna and recommding who shld play. a dress that tnks, which crops to grow, tax prep to help keep payments low. you n find me on an rig, i answer questions small and big. hello, my name is watson.
12:37 pm
12:38 pm
there's your market picture. dow down 5153. disney closing down today. anthony diclementi joins us now. how much of this was due to the
12:39 pm
box office, "beauty and the beast"? >> yeah, look, this is the biggest ever march box office opening, you know, in history. this is the seventh biggest opening weekend of all time. and so, scott, it was a little ahead of our estimates for the film. we were looking for $120 million, done $170. so what i did was, i just raised my estimates for disney studio segment. and i just think at a higher level, it really demonstrates the consistency and the global power of the disney film studio, which is, you know, i think vanishers a pretty full multiple, and as a result, we took up our target price on the stock, which is a great buy. >> i'm with you on being bullish on disney, but kind of a broader question, is there any way you would have an 18 times multiple on disney, if the market right now were selling for, 15? or really, are you just forced to kind of be drifting your multiple higher along with where other stocks are going for?
12:40 pm
meaning, if there's a market pullback and other stocks lose their high multiples, disney probably doesn't keep its, either, even if the fundamentals are great, which i agree with you, i think they are. >> yeah, look. the fact -- where the s&p 500 market multiple is, is important when i look at a big bellwether stock like disney, because i think the market is moving on things that are relevant to disney. those are things like consumer confidence, like, the macroeconomic environment. i think the bigger question around disney's multiple, away from the market is, does it deserve to be compared to a broader consumer, which tends of a higher p/e multiple. i'm thinking about stocks like nike or pg&e or estee lauder or coke, or is it a media company where the u.s. company trades at a lower multiple than disney. i think the market is telling you the truth is somewhere in
12:41 pm
between. if you wanted to be more optimistic and bullish, you would say, you know, why doesn't disney trade more like a coke or a nike, at like an 18 to 20 times multiple, as opposed to, you know, like a viacom which is trading at 11 times earnings, right? so that's the real question, is how do you define disney, media versus splconsumer? >> anthony, it's joe. i'm with you. i think the stock continues to move higher. if you're buying it here at 112, are you okay with the headwind espn has passed or do you think we're out of the woods? >> i think we're out of the woods on traditional cord cutting. these newer bundles like youtube tv, like the soon-to-be launched hulu will include espn, joe? so i think the affiliate growth for espn stays in the fairway. what i'm incrementally concerned about, actually, is advertising, because ratings on the shoulder programming, like sports center, ha have really rolled over. so even though we took up the
12:42 pm
overall earnings estimate, our espn advertising estimate went lower. so we'll continue to kind of look at it, you know, you heard some press reports about layoffs up in bristol. they have a big step up in their nba rights this year, which hurts operating income. i think as we get the affiliate renewals at 18, 19, and 20, i think it's possible we get a little bit more stability and some comfort around espn. >> anthony, thank you. anthonyny diclementi, the options market showing traders something very interesting about the broader stock market. john najarian is on the case, as always. more "halftime," back in two minutes. ♪
12:43 pm
know you have a dedicad advisor and team who derstand whyou come from ow you can c an investmt t an as strong yr lues ow you can c an inves♪mt t an ow that together, you caestaish a meaningful ly widedicated pnc alth manag. and suppor your
12:44 pm
manot always be clr. but at t. rori, we can hp guide your retirent savings. so wherever your tirent journey takes you, can help you reacoals call us or yr sort.owe ice. inveitconfidence. happeningefour eyes.xty sente shifin hum htory at pm elp investorsevery year. e e implications haof long termegatresty trimee shof urban eansion, pintpartner with pgim toapture alphain real ts e globalnvestment manament
12:45 pm
good to have you back on the "halftime report." doc, what have you got? >> at the top of the show, we talked about how little fear there was in the market. and yet, wherever people come on, they always say, i would like to buy it, but i would like to buy it lower. that's just what some very smart traders are doing right now. take a look at arconic. they came in and have been aggressively selling at the 20-point put strike. they get to keep the premium. the same thing going on in vale, unusual activity, the stock's right here at 9.54. they're selling the 9 puts
12:46 pm
aggressively. general electric, i'm seeing this across many, many sectors, not just concentrated in one, that people are willing to sell puts, which means they take on the responsibility of buying at a lower price. they keep that premium, if it stays above there. in other words, they're using the sell-off today to get bigger in some of these positions or to reload, if they already got out. >> like shorting through options. >> yes, sir. >> doc, you're in all these, right? >> i am, except for ge. i'm not in ge, yet. but vale and arconic. the defense company holding its media day in arlington, virginia. that's where we found morgan brennan who just spoke with marilyn hueson live with us right now. hey, morgan. >> so once lockheed martin opens its doors to media. today is the day, i did just a few moments ago sit down with ceo and chairman marilyn hueson. she says she's optimistic of the company's growth, which is expected to be 3 to 5% over the
12:47 pm
next years, and that the f-35 joint strike fighter will be a big part of that. on the defense budget, both the fiscal 2017 supplemental and the new 2018 budget blueprint that was released by the trump administration last week whereby she says, a lot remains to be seen. that increase in spending does potentially move forward. her biggest concern, continuing resolution. budget stability is a key part of costs coming down. on regulation, pointing out the 20 cents of every dollar goes towards regulation and compliance. thag according to industry reports on equipment and service. so that industry does see room for reform as well as tax reform. now, when i asked her specifically about whether she's concerned for those business-friendly policies are potentially getting sidelined with the president, osaying she doesn't overreact to the tweets. that her focus is on congress and that she anticipates health
12:48 pm
care to get done before tax reform. on m&a, remember, lockheed did require sikorsky back in 2015. there's been a lot of talk that we could see an increase in m&a activity, especially of smaller companies. she says they constant look at accusations, but very happy with the portfolio. lastly on the international side, they're still on track to grow international sales to 3% over the coming years. f-35 will be a big piece of that. last stat for you, more than 50% of f-35 sales over the next five years expected to be from our allies. guve stock? >> i don't and i just sold boeing and i might actually buy lockheed martin. i'll keep this really simple. it's about the f-35 and all of trump's tweets that he's going to replace it with the f-18, i'm sorry, it's nonsense. it's not the same plane, it's not even close. the f-35 is the cutting edge plane. it's going to sell hand over fist. >> john's going to get one. >> i was thinking about it. >> an electric one.
12:49 pm
>> coming up next, it is a cnbc exclusive with ted leonsis. a former aol executive. we'll hit a number of tech names and get his point of view on them, when we come back after this break.
12:50 pm
12:51 pm
we're back front and center is big business.
12:52 pm
former executive at aol, mr. leons is joining us now in a cnbc exclusive interview. welcome to the show. good to have you on. >> thanks, scott. who is your favorite hockey team? >> i was going to leave that for the back but i'll mention it right up front. it's the caps. i'm proud of that. i'm proud of that. i take a beating here in town for that, but i can carry the torch for us here. >> thank you for the support. >> you got it. let's start off talking some sports and i want to talk some tech with you, given your background. i would like to address this letter that the nba commissioner, adam silver, has sent to all league owners. yesterday i believe you all received it, resting of star players. fans are up in arms about it. network partners are up in arms about it, commissioner calling it an extremely significant issue. what can you do about it? does something need to be done? >> i responded immediately to adam and said put the washington
12:53 pm
wizards on national television and i'll make sure our players show up. it's an honor to play on national tv. networks paid a lot of money for the programming and they want to drive ratings and they deserve to have our best product out there, the best players. so i empathize and support where our commissioner took a stand here. >> does a new rule need to be put in place? how do you really deal with what has become a significant issue in the league? >> well, it's a slippery slope if you put a rule out because if a player is hurt or player is banged up, he should be able to sit out. you have all sorts of issues around the cba and what the -- what's in the best interest of the player. i do think when you sit out
12:54 pm
three players, arbitrarily in the game of the week, that's probably inappropriate. >> knock on wood but that's another topic for another time. let me talk some tech with you, if we could. i want to mention a name. you give me your thought on the company. i want to start with twitter. you're on twitter as well. what do you think of the company? >> um, i'm disappointed in the company. i thought twitter was an outgrowth, frankly, of instant messaging, re-created aol and would build a large and growing community because it was marketed and would be able to drive more revenue streams. i think that growth has slowed and i'm concerned for the company right now. >> how about snapchat? >> snapchat, i think, has real
12:55 pm
interesting positioning. same with your camera company for next generation is interesting. i think it's all about self expression. the reason people blog, the reason people take selfies and share is they want to self express. snapchat has really grabbed that position with younger people in the gen-z generation and they have a lot of upside. >> lastly, i read an article, an interview you did with ricoh's kara swisher with regard to apple and said it needs to start making things here. same thing with nichke. you called it a social responsibility. it caught my attention that you singled out these two companies, with what's happening in washington and the president. >> you look at the most valuable company in the world is apple computer. and, you know, while they're a global company, in selling their products and services
12:56 pm
everywhere, they need to celebrate american craftsmanship. it's hard and it's expensive. they're a profitable company. all of us -- we're big investors in a company called shinola that is trying to bring manufacturing and the art of luxury manufacturing back to america. we opened our plant in detroit and are hiring veterans and people out of high school. and are training them. it's hard and it's expensive but it's the right thing to do. the american-buying public will gravitate to products made here in america. >> good to have you on. go caps and wizards. talk to you soon. >> thanks, guys. >> ted leonsis, the owner of the washington wizards and the capitals. market. t through good times and bad...
12:57 pm
...at t. rowe pre... stay cfidentor your advisor.all us or t. rowe price. invest with confence.
12:58 pm
12:59 pm
the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. let's get back to the markets. bio down. on pace for its worst today since 2011. >> it has nothing to do with the, quote, unquote, trump train. you see the selling come in there, it tells you that we may not be done with this spike and volatility and fear. >> watching that. banks are getting hammered today.
1:00 pm
both etfs that follow that space. final trades. doc? >> other than caterpillar lately, take a look at tractor supply. serves many of the same markets. >> winnebago. >> jp morgan. take advantage under 90. >> staying with wynn resorts. >> thank you. good stuff. "power lunch" starts right now. i'm melissa lee. on the menu, stocks sliding this hour. is the teflon trump rally starting to get a little sticky here? lots of big money advice coming your way. banks under serious pressure right now. 4% drop in the kre. etf. we'll go inside that sell-off straight ahead. and unplugged, new electronics ban going into effect on certain international flights. what you need to know about the big changes. a busy two hours of "power lunch" starts right now.

41 Views

info Stream Only

Uploaded by TV Archive on