tv Fast Money Halftime Report CNBC May 1, 2017 12:00pm-1:01pm EDT
the forecast is for 4.3%. that is very optimist ik and would mark a strong rebound from the weakest quarter we've seen in years. >> they started, down over time. we'll see what happens. it is a pleasure to welcome the judge back to the half. let's get to scott wapner at hq. >> and welcome to the halftime report. i'm scott wapner. our top trade this hour, the bernanke buzz kill. while the former fed chair says the economy won't be as strong as some think and what ma meta to your money and the market. with us today -- want the begin with those controversial comments from ben bernanke. the former fed chair telling squawk box this morning economic growth is unlikely to hit and sustain 3% anytime soon. >> i think if there's a big tax cut for example that lowers tax rates, you might have a bump. because of the increased demand,
consumer spending. >> gets you over 3%. >> probably not. i would take the under on that. >> very interesting comments from the former fed chair. >> he was great and listen, he deserves a tremendous amount of credit for what he did for this economy. the recovery was called the obama recovery i believe he had the large hand, but he's 100% right. getting to 3% is going to be difficult because the driver of gdp in this country now is software. is services. it is the technology component and that is incredibly difficult to measure. we are a different economy, we are a time and convenience economy and to get the 3%, it's not going to be the old bulk economy that's easy to measure. >> the treasury secretary says it's going to take two years to get to 3%. economic growth. this is the market debate. over the next few years. either you're going to get levels of economic growth to
sustain stocks at high levels, profits and otherwise or you're not. >> let me cast a scenario in which you get that 3% growth and a lot faster than two years. you get one major piece of legislation done. say it's tax reform. when bernanke is responding to that, he's just looking at the first impact of what is the size of that tax cut and spending it back to the economy. what he's missing and what's important here, the derivative effect of how do people feel. what are the so-called animal spirits. during this bernanke recovery, you know, you haven't had consumption going up much at all. people have not felt good, even though job growth has been happening. if you have people feeli ining , they'll start consuming again. >> he's not dismissive of thachlt he says, yeah, you'll get a pop. but be unable to sustain. >> what do you mean car purchases?
you think, are you going to buy two cars? >> what if bernanke bern is right? what does that mean if you look down the long runway? >> rig before we came on, sarah said that the atlanta fed came out and said 4.3% gdp is what they were looking for, so 3% would be groueat. it's a lot further. it's good to see him, who i think now is finally getting it right in the administration, which is let's underpromise then overdeliver. give ourselves more runway, so you have to worry b about what are the politics of what they're saying. >> 4% was thrown out at some point. >> we're dialing it back. right now, let's put it out there. we're not promising anything. nothing's going to happen right now. we've got a do nothing presidency, lots of executive orde orders, but no physical stimulus.
so you'll continue to see rotation underneath and i think right now, what we're seeing is al goes drive and a very narrow advance. now you be the kis. joe's point is dead on. we don't know how to measure this. we were measuring the economy as if it's still a midwest rust belt economy. that's not the case. >> talking about the economy in the way the president himself is pledging to people that he can bring the kind of economy he's talking b ining about. >> does he understand the impact of technology? does anyone in washington understand technology? >> they deny it. i think he has to say that because the mexican, chinese story is better for the football stadiu stadiums, but the reality is no. bigger picture though, investors
not invest ng the economy. they have to live and work in the economy. investors invest in the stock market. go back to 1900. look at 16 marriage markets. the long run correlation between economic growth and stock market growth, returns, is effectively zero. .06. we all feel better when the economy grows, but that's not comma dictates the ups and downs of the stock market. you can have a panic in a great economy. a great stock market in a lousy economy. i think we need the focus on forward returns. >> is it lagging? contemporaneous? >> can i give an answer? okay, united states, united k g
kingdom. 190 to 2009. literally, the u.s. was able to grow gdp by a full percentage point fehr year greater than the ut. returns if were the same. >> cycles. >> cycles are a different conversation. there is no correlation. >> cycles and economic growth. >> none. does not exist. >> larry kudlow were sitting here, he'd say something like corporate profits are the mother's -- >> he's also say stocks. there's a lot of things we can strikewhileitshot trot out, but they're not reality. >> giving you the data. no, you're giving me data that's managed to include. >> who's managing it? >> i'm giving you data from the london school of business. >> josh, josh, you got to listen. very carefully. numbers can tell you anything you want them to tell you. i tell you look at cycles. >> the only numbers that exist. gdp versus stock. >> somebody help me. >> there's not another set of numbers. >> this is a difference betwe
between -- and practical knowledge. you've got to look at cycles. how the economic data. >> we don't disagree on that. you're making a different argument. you're shifting what i'm saying. i'm not deny iing that for economic cycles. >> stock market cycles a dove tail economic. >> there's no disagreement. the question is do investors require greater than 2 or 3% growth in order to make money and the answer is no and this does not negate the fact there are cycles. that has nothing to do what what i said at all. >> what was your point? >> we agree. >> 3%. >> 3%. how do you get 3% in this economy right now? first of all, gdp is incorrectly measured. if we were properly measured and incorporating software and services, we might be at 3%, but let leave it how it is now. how you get to 3%, we had larry on friday. simple. you need a grand infrastructure plan. you need to build out the
midwest, you need to build out the bridges, the roads, the infrastructure in the country. if you do that, then you get to 3%. >> the president's party doesn't want to do it. doesn't want to blow a $4 trillion hole in the deficit to do it. >> let's bring in another voice. jeremy siegel at the university of pennsylvania. professor, welcome back. >> happy to be here. >> i know you've been listening to this. >> a lot of back and forth. >> why don't you weigh in. >> there is a lot of things, you know, you could say why do value stocks in the long run give better runs than growth stocks who have better earnings. it has to do with the pe ratio. that you're paying for. and slower growing stocks have lower pe ratios and higher dividend yields and they can do fairly well. that's why you can earn quite decent returns in a lower growth environment. but all that said, the biggest
shock to macro economists of a last ten years has been the growth of productivity. we useded to grow 2.5% a year. now, we're between zero and one. productivity is what makes wages grow, what makes the standard of living grow. so we can get a lot of jobs, but our standard of living isn't increasing, there's a lot of dissatisfaction, so we could argue about what effect it has on stocks, but it certainly has a lot of effect on people. on individual people and why it is economists are arguing, i would say one is a lot of excess regulation that we've had over the last ten years. a little bit of it might be mismeasurement because of technology. we're not preparing our students, i think well for the 21st century. and type of jobs that are available. i mean, there's a whole host of reasons we need faster
productivity growth for standard of living to feel better. we can then argue about how much better it is. >> let me ask you about the market. nasdaq is above 6,000. people feeling good about where the major averages are. s&p is not that far away from an all time high. you were starting to waiver. then seemingly grew more bullish following the state of the union address from the president of the united states. we had that conversation on this program. on march 1st. where are you today on that view? >> well, i think clearly, first of all, i don't think nasdaq is -- the tech sector's pe we know based on this year's earnings is the same at the s&p. so, we're talking about 18 to 19. in a low interest rate environment. that's very reasonablreasonable. it's a world of difference. it's anticipation. the market does want corporate
tax reform. and will be very disappointed if we don't get it this year. it seems in the last few weeks, moving on the health care and that is a prelude to moving on corporate tax reform, we could get that before personal tax reform. i also think the border adjustment tax, he didn't make it clear whether it's dead or not. i do not think it's a good idea. personally, i would leave that out and i wouldn't get overly panicked about the deficit that might result, but the deficit of hawks are clearly only three votes are needed of republicans against the trump plan and it dies in the senate. that's not very much. zpl let me ask you this. i have a jpmorgan note in front of me today. question they asks, their question of the day, how expensive are equities. they say and i quote, investors are concerned about ek quities
being too expensive, focused on the level of u.s. earnings multiples and recent rise. we are not worried about either. do not consider equities expen cy and should stay long. is that your view? >> very much. first of all, where they've been is not important. it's where they are now. right now, we're at 18.5 times this year's estimated earnings without a tax cut. now, energy may disappoint. a lot of those are assuming energy is 55 to 60. we've below that, but none the less in an environment where the ten-year is at 223, wow, that's not an expensive place and i still think equities are a place to be. >> so, you bring up a ten-year, 2.33. we've heard all year about the concerns about revenue dprogrow. we see it approaching 9%. we heard concerns about europe. it seems those concerns are now alleviated. why is it we are sitting with a
market where a ten-year trades at 233 and we began the year at 250? >> investment demand. >> it is, it is, we have had a softening of economic activity, we had .7% gdp growth and yes, we're going to have better. i don't think it's going to be 4% like the fed. i think we're going to be close to 3.5. so we're still stuck in that 2% range. look at what's happened to the surprise drop in consumer prices and the pce inflation's not a problem and don't forget, the long bond is the ultimate hedge. against a stock market crash. if there's going to be a bad event internationally, north korea, europe or whatever, everyone runs to the long bond, to insurance policy. it gives it a premium and a premium means a low yield on that instrument. >> you think we're taking the threats of something like that
seriously enough? as investors? >> well, as a very good outcome from the first round election. i don't think le pen at all has a chance. in the second round, i'm not fearing a confrontation on north korea. i think it's it's saber rattling. i don't see it, but there are a lot of investors that want to hold long treasuries because if managsomething happens, they wi up if the stock market goes down 500 points. >> it's good to talk to you. thanks so much for coming back on the halftime show today. >> thanks for having me. we have a news alert. phil lebeau just spoke with boeing's ceo. hey, phil. >> hey, scott, you guys were talking about the strength of the economy. here are some fresh comments from chairman and ceo of boeing talking about commercial airplane demand and the fact that the amount of traffic or the number of people flying worldwide is e exceeding expectations.
>> big picture when you look at the 20-year look, is very positive. more than 39,000 airplanes needed around the world. traffic growth continues to be good and stable and in general, growing. first quarter this year, 8.8% up. so even over the longer term trend. so, traffic growth patterns the positive. overall, the market is very healthy. combined with the backlog we have of about 5700 aircraft, that gives us the able thety to wramp up production and do it in a productive, long-term way. >> one other thing to think about when you consider the comments from dennis. guy, remember, it was just three months ago ha the president was tweeting out boeing air force one contract, maybe we should rip it up and people were worried about the impact on boeing. think about how things have changed since then. you've got the prospect of more defense spending. export import bank is going to be up and running again and you have got boeing looking at the prospects of more defense spending on top of that, so a
number of these factors together, boeing is looking at things far different in terms of itself relationship with the trump administration than it was swrus a few months ago. >> interesting. good stuff. thanks so much for popping on. yet you threw in the towel on boeing recently. >> it's the i don't think uf michigan m. the stock had done so darn well that there are risks out there. not with standing. we've got to factor the emirates for instance has 150 orders for the triple 7 x yet that airline has seen demand fall off in the wake of the trump various manifestations of the travel ban. there are other risks. today, in fact, american airlines is deferring some 787 orders for a couple of quarters. i'm by no means saying you should short this stock. i think this is one of the best companies in america, but at 182, i found it too price issy. if it comes down 2%, i'm in big.
>> back to the conversation we were having with professor siegel and wrap that up then we'll take a quick break. sell in may. people are, may 1st, first trade ing day of a new month. anybody thinking about that? because the question is -- >> would show you in the first year of a presidency, it doesn't work. >> what are you sell selling because if you look at multiple assets now, whether it's fixed income, taxable fixed income, high yield, emerging markets, european stocks, everything is performing well, so just to say i'm going to sell in may and go away and come back again and buy back at a later date. >> no one literately does that. just because advice rhymes doesn't make it good advice. >> it's crazy. you never do it. if hem lines are too long, are you supposed to sell? >> to bring it back full circle to where we started, and i know we started off by talking about
this 3% growth notion. being sustain bable, which be bernanke says it's not. do investors just need an ov overall reality check on where we are? where the markets are today? nasdaq seems like it doesn't want to stop going up. >> i think there's unexplained behavior. no way you can justify the valuation certain stocks like m amazon, but you never could, so you're buying the story and the excuse. throng as long as they kopt to execute, there's no reason to continue to sell it. so it's a narrow advance we've seen before. there are other names that continue to work. >> we have a company like apple, when they report on tuesday, they're going to tell us they have a quarter of a trillion dollars in cash. now, it's not all incumber ed, understand that, but just the point, never in history, you can go back to the east india company, the south seas company. there has never been a publicly traded security that people could invest in that had this much cash, this much power, this much dominance over its
industry. and apple is one example of many companies that are at this stage in the game now consolidating power over huge verticals all over the economy. and it's not just the four we always talk about. so, i think that we need to think about you know, relative valuations in this context that look, there's something going on here. that we have never witnessed in market history. the it's just not happened before, so we have to have some humility and can't just point to, well, i don't like the pe ratio versus what it used to be. >> how much what? >> humility is in the market. >> hold your thought. we want to show you the president. the independent community bankers association. this happening moments ago. >> sit down, please. beautiful hats. well, thanks, mike pence and mike has been so great and he's on your side. he's on everybody's side. it's a pleasure to welcome the community bankers to the white
house today. i want to in particular thank cam fine. cam fine. stand up, cam fine. pret it well-known guy, too. congratulations, cam. for leading the independent community bankers of america and thank you for all being here today. very, very special. it's also a very place, isn't it? when they say how about coming to the white house, urnl ly usually about 130%, we try to find the extras who are coming. we have to be careful. the it's a great place. i want to thank our small business administrator, linda mcmahon. is she around some place? yes, thank you. where? thanks, linda. for joining us today, she's doing an incredible job helping small businesses just like you. some of you i know you, you're not that small, i hate to tell you. you're not small. a lot of people would like to be small, right, cam?
they'd like to be small like these small business people, but they're great people. employ a lot of people and what they do through community development is amazing. community banks are the backbone of small business in america. many of you are the reason that young families can purchase their first homes. farmers can buy their next tractor and entrepreneurs can can can open up their next business. so true, community banks. over half of the small business and loans going to small business and it's really a a substantial number higher than that, come from their community banker. you provide critical access to capital, especially for the rural communities. that's why in the first 100 day 0 days, i have taken action to roll back burdens and regulations that undermine community banks, especially i know you're going to be disappointed of this.
dodd-frank. it's out of control. and by the way, not only for community banks, for banks period. we can take community out of that one, right? now, dodd-frank, we're working on that right now and you'll see a very big difference because you want to get out and make our country work properly. i've directed by administration to provide regulatory reform and relief those those rules don't shut down community banks which have been shutting down and small businesses and put them on a competitive disadvantage against the larger institutions. that's what it's done. it's really made you and given you such a tremendous, competitive disadvantage. i have friends that are community bankers and they've gone through hell over the last long period of time. it's really a much longer period of time than people would understand. i've also directed the treasury secretary to review damaging dodd-frank regulations that encourage risky behavior from wall street.
everybody knows what that means. we're also working to achieve tax reform and dramatically lower taxes on businesses and the middle class. we're proposing one of the largest tax cuts in history even larger than that of president reagan. tax cut is bigger. bigger. my administration is committed to working with each and every one of you to help americans achieve their financial dreams. so that look, we're all here for the same thing. you know, we have a statement. it's really, i like it much better than even your hat. it says make america great again and that's what we all want. right? we want to make it great again and that's what's going to happen. so, i want to thank you all for being here. very special people. you do a very, very special job. and the community really understands it. i know community bankers are the most popular person in their community and they built
communities and they've really been so badly hurt over the last number of years, so we're going to change that, change regulation, give the incentives back and you're going to grow and thrive and prosper. and maybe even more importantly, you're going to have businesses all over the country growing and thrive iing and prospering. so, i want to thank you for being here. it's a fragreat honor for honord you'll see things happening like you've never seen before. thank you very much. thank you. thank you. >> that's the president of the united states speaking to the community bankers association telling the group you are going to grow, you are going to thrive and prosper. joe, we've debated this space in the market as part of the financials over and over and over again. president makes a good investment case. >> he does and i think the performance of financials makes a pretty good investment case. i think we were correct when we identified the financial sector has consolidated the large gains since november. i think we were correct in
saying you stay with the financials. some of the regional banks have come back nicely, but look at the large banks. bank of america. these are names that most of us have stayed in. we're being rewarded for doing so. i think that is the right trade and i also think the impact now on what's going to come forth with c car in june has to be considered when you look at financials. we had mike mayo on. i think it's been the right trade and trade you stay with. >> xlf is up today. a lot more is sfratraight ahead. back after this. ba after this. online u.s. equity trades... ♪ ...you realize the smartest investing idea, isn't just what you invest in, but who you invest with. ♪
hey, i've got the trend analysis. hey. hi. hi. you guys going to the company picnic this weekend? picnics are delightful. oh, wish we could. but we're stuck here catching up on claims. but we just compared historical claims to coverages. but we have those new audits. my natural language api can help us score those by noon. great. see you guys there. we would not miss it. watson, you gotta learn how to take a hint. i love to learn.
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shares higher on news it's working on a deal worth at least covering $117 billion as part of the new deal, they'll pay 425 million up front for mortgage servicing rights. last month, you may recall at least attorneys generals and other regulators and consumer financial protection bureau had been scrutinized, so again, those shares up by 40% so far, back to you. >> one heck of a rip. correct me if i'm wrong, i think this is a name you've been in in the past. >> yeah, i was long and short it
and made much more money on the short side in this. stock got cut in half last week and there's still a question of solvency going forward. looks like they may beat that. but massive suit, billionaire, the chairman of all these companies. >> you remember when this was one of the henl fund darlings, two years ago? >> maybe longer. >> this was more so. they owned them all. some are still trading. came in, we had lost, been lost on this show. they talked about that very topic. and he to his credit was the only hold out on the regulatory front with aqua and brought it all down and firsted him to resign. >> people were pitching this name on the conference circuit. >> never saw anything like it. we had one fund, that they told us they would get out of it, they didn't. we got out of them. but every fund had this.
>> the value. >> exactly. >> seems, this cycle seems to repeat itself. i saw it with edison. give you like ten off the top of my head. >> let's switch and talk about technology. that rally continuing today. nasdaq hits a new high after positive results from amazon, alphabet and others last week. we're going to hear from apple and facebook as well. can those two keep the run going? there's chatter on apple today. they've got 250 billion in cash. people are clambering for them to do some kind of big acquisition. what should they do with the money? >> well, listenen. what they should do is simple. they're going to be the beneficiary of a large repatriation. you talk ed about should inves tors, not sure, maybe mentioned complacent or -- reality check, sorry. here's the reality check when you look at technology. you've got five companies that -- collectively, they make
up over 13% of the s&p 500. you're talking obviously about facebook, amazon, apple, alphabet and microsoft, these are all companies that number one are hitting on all cylinders in terms of earnings, but have the ability to bring the cash home. that's the one component of all the fiscal policy we're hearing in washington, d.c. that most directly impacts an investor in the company. >> brian white, drexel hamilton, the analyst, has long been really the face of the bulls. on the sell side. he says apple remains among the most underappreciated stocks in the world. >> $750 billion market cap. i think we preeappreciate it. >> one thing is 15 multiple. >> 17 times earnings. >> i don't think it's that high, but if you compared that toal bah pha bet or facebook. >> talking about the ability of
this company to continue to grow. he thinks they're going to return to revenue growth in the first quarter of fiscal here 2017. >> with the new phone, they will. that's the key. >> i think he's right on that. >> what's going to matter is 2018. 2018, this is a holding period right now. i know we've got earnings tomorrow. they don't matter. >> yes, they do. >> no, they don't joe, let me finish. it will give us insight, but that's about 15% of the business. >> what are they going to talk about on the conference call? >> what they're not going to talk b about is iphone sales. nobody's buying. they're waiting until the fall when you get the iphone 8. >> majority of the questions will surround what are you going to do with the capital if president trump and congress have the ability to repateuate. >> you're not apple. >> all of us -- >> doesn't matter about all of us. >> it matters about apple. what is apple going to do? >> quarterly calls we've asked that question. >> i think it was cramer this
morning who suggested they needed to do some larger acquisitions to better enhance their services. >> here's my suggestion. buy cuba. join nafta. they have favor bable trading relationships, costs come way down, there you go. >> the interesting question is if they get favorable treatment and can do acquisitions here in the u.s., what does that do to the stocks that have been frequently mentioned like netflix? i think that's an interesting conversation to have, but we're talking about corporate tax reform and repateuation like it's some kind of a slam dunk. it doesn't happen on it own. it's part of a much larger conversation. >> shrinking by 20%. >> the gains here to date in tech, that's where we started this part of the conversation, are they sustainable? >> apple's up 26%. facebook which reports. amazon, 26,al bah bet, 18. >> amazon reporting a 25%
earnings quarter. apple is growing its earnings. google is growing itself earnings at a 20% clip. these are not like you know, stock bubbles happening based on exciting new business models. these companies are i said it before. consolidating power and living up to the promise of ten and 20 years ago. it's all happening today. that's what's being reflected in share prices. >> just ahead, the area one technical analyst says can buck the sell in may trend. plus, rbc upgrades duncan brand. the stock is making a nice move. we'll talk about whether there's any upside left. any upsi left. unlimited data on t-mobile, now that's a treat. why did verizon take so long to offer it?
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sell in may go away won't work at yun sector. jonathan, welcome back. why is this not going work? >> thanks, scott, well, i think we know about the sell may go away for the market, but within that, there's a mix of sectors. if you look at health care, it performs well in may. been up eight of the last ten year, averaging about a 1.4%
gain and relative to the market: it tepids to outperform. so you have that as the backdrop, then take a step back and look at the bigger picture and health care has gone sideways for two and a half years. we have this nice base in the sector. good seasonality and quloyou're starting to see health care break out as well. so we think it bodes well for the sector, both on the absolute and relative basis. >> i appreciate this call. can you throw out two or three large cap name, either bio tech or whatever within the sector, you think that our viewers should be focused on if they want to try to play it? you could look at a name like humana or aetna. even some of the large bio tech names. it's really broad-based. that's the important point here. you have equal weight of the cap weight index is at a new high, so when you have broad-based breath under the service
surface, that's more important, but there's names that do it better than others. >> appreciate the call. continue the conversation on the desk. this make sense to you? kudos to many of you this this desk who said even back when trump was tweeting about health care a lot, stay strong, stay with the health care name, they're going to have a bump. >> yeah, jim i think was very vocal saying you can't govern by tweet. is he okay? >> feeling faint. >> no, you were. >> stephanie said, other guys said that. i don't think any of us said the opposite. >> no, but you've been saying buy health care for a while. >> we all agree these tweets come and go and don't really change the fundamentals of these company's business. mig temporarily affect sentiment. >> joe, you've been playing it through the devices. >> medical devices have worked. pki is a number wuf stated throughout the year. >> back into it last week, i
think it's got new highs again today, but check the boxes. on the things that you want as an investor, whether it's dividends, the ability to le pateuate cash coming back home and we'll find out more. >> there's, i agree with this. there's nothing to say that june, july and august of this year is the time you've got to own and these are long-term investments. >> halftime report back right after this. after this.
action lawsuit has been filed in california against the organizers of the fire festival claiming a lack of basic amen theties. it was promoted as a luxury music experience on a remote island in the bah hamas with tickets costing up to $12,000 or more. it was canceled. at least five were killed in south korea after a crane collapsed and fell on to a construction site. 20 more injured, six in serious condition. the crane owned by samsung heavy industries. several thousand protesters gathering outside greece's parliament as may day rallies kicked off around that country. this is union's braced for more austerity measures. here at home, tyson foods anountsing the it will go antibiotic free by the end of the year. saying its pledge will apply to poultry it sells in supermarkets under its own label. they join purdue and pilgrim's pride in ridding its chickens o of the antibiotics. that is the news update this
hour. over to brian sullivan with what's coming up on "power lunch." >> we are los angeles for the global conference and we have big interviews here at the conference. check this out. an exclusive with the ceo of chevron. we'll speak first with the ceo of celgene and blackberry. plus, a rare interview with u.s. transportation secretary and trump infrastructure adviser and real estate mogul. plus, apple and facebook hitting new highs. all ahead of their earnings coming out and ryu rupert murdoch. that's on "power lunch." the halftime report is back right after this. ghafter this.
(cheering) at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready. because we're helping leading companies lead with digital. it is missing link monday. that means tiaa manager stephanie link joining us live from new york with her latest stock pick.
nice to see you again. >> hey, scott, good to see you. >> what's your pick today? >> dxc fonlg. technology. all computer science and hewlett-packard services business and they merged and the deal caulosed on political 3rd. they're now going to be third largest it services company in the world behind ibm and ak ancientture and the story is really simple. all about synergies. merging these two together, supply chain efficiencies, people cuts, productivity and they have a goal of growing earnings from this year from 385 a share to $10 over the next three years. that's just on the synergy side. if you get revenue growth, which they're targeting 1 to 4%, if they get that, that's icing on the cake. i think it gets to 100 just on the story alone. >> is this sustainable? i was just reading from our
market's desk. xlk at the highest level since 2000. >> the growth is is there and valuations aren't as rich because the companies are growing into that growth. so clearly, it has legs. is it the easy money, no, the group is up 15% year to is up y. you have to be more selective. i do think some value tech, which has lagged, like a dxt, actually can work. maybe value can come back over growth but i still like the sector as a whole. it's not my favorite but i still like the sector. >> see you tomorrow. >> shares of dunkin, an upgrade. josh brown owns it. we'll debate that stock next. it is our call of the day. the d.
the d. i like russo. his on/off splits are the best here. yeah, but his offensive win shares didn't even break 4. come on, check out that stop-and-pop! what do you think? my trade-off analytics indicate no one creates more space on offense. this allows him to nail a jumper from a densely populated urban area. what you're trying to say is from way downtown? i am still learning. i can see that.
we're back on "the halftime report." rbc upgraded dunkin' to outperform. the company is at the beginning of a turnaround. it's our call of the day. and because it's dunkin' and josh owns it we're going to you first oocht cool. so there's a really great up trend here that's been in place for quite a while and every time the stock gets downgraded it tends to bounce right along exactly where you would want to see it bounce. you have a committed shareholder base. they're accumulating on down days. they don't own the stores. they collect a royalty fee. it's all franchise owned. this will sound silly. i look at it like a yutility.
if america runs on dunkin' everyone along the same route get their coffee the same day, there's a lot of reliability. actually i think jimmy has a couple of things he wants to say on that note. >> 440 stores west of the mississippi. a little alcove. the growth penetration, the potential is huge and just to put it in comparison new england has 4,000 stores. new england versus the western two-thirds of the u.s. and one-tenth of the stores. >> a hard left turn. i want to show you the banks right now because apparently the president of the united states has said -- i'm not sure if it was in an interview or that community bankers event that we showed you he was hosting, he's
considering breaking up the big banks. that is what donald trump has said. you can see the reaction in names like citi, at least the initial one. there's jpmorgan. you will likely see similar charts across the spectrum of the banks. >> when he came back from wisconsin, all of a sudden it's, hey, we're in a trade war with canada now because they're killing the farmers. you don't know if this is the last thing coming out of the bank meeting. there's really nothing to worry about now. >> here is a meeting with jamie dimon let's week and he says i'm considering breaking up the small banks now. stop, stop. don't base your portfolio on this news. >> you see how the market reacts. >> algore rhythms.
>> they are not out there thinking trump's next big thing is to disrupt goldman sachs. >> what if he is serious? >> it will take years to have that breakup. >> it's very good, by the way, veering back for dunkin' donuts because the investment bankers will be up figuring out how do you break up the banks. >> the dow is negative now by about 12 points. we'll take a quick break on the other side. ♪ ♪
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time for final trades. >> i'm going netflix as expensive as it is. i wouldn't expect much of a down side. >> pfizer, how many shares did they buy back because they are shrinking the share base at a rapid clip. >> josh? >> we have $100 trillion economy, it will be $200 trillion. buy jpmorgan whenever algorithms sell it to you. >> juniper networks will break out now and will shoot above $32. we haven't talked much about-face book. facebook comes the next day. what do we think? >> you have to go with it until we don't. they're dominant. the acquisitions we thought were
too expensive are adding to the company. >> that's the problem. you haven't gotten one. >> i got out too soon. >> these big, high-flying sexy technology names. >> google fell 50 points. >> that's good stuff. see you tomorrow. "power" starts now. i'm melissa lee. facebook and apple hitting all-time highs. nasdaq had record levels, too. a trip inside the numbers straight ahead. one of the big interviews of the day here on cnbc ben bernanke doubts we can get to that magic 3% growth number. this as the atlanta fed says we could see a forehandle on gdp real soon. netflix soaring to new heights. this is the streaming giant becoming the latest victim of hackers. orange is the new black eye. "power" starts right now. welcome to