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tv   Fast Money Halftime Report  CNBC  May 4, 2017 12:00pm-1:01pm EDT

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maybe they're eating into snap. so good week for a lot of people. >> the weakness really centered around commodities, miners and retail to some extent. not a good day for those sectors at all. we'll keep our eye on oil. let's get over to brian sullivan and "the half." all right, carl, and thank you. welcome to "the halftime report" today. four big issues threatening the markets and your money. falling oil prices, fear over all the market complacency, d.c. dysfunction, of course as we await the big health care vote, and the fed's next move. these are all big topics and we tackle them over. scott is out, i'm brian sullivan. welcome, let's get going. we start with threat number one. oil falling below $46 a barrel. it's at $45.75 right now. that is a five-month low.
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john, are you worried about the overall market and oil? will oil drag down equities? >> it has held us back. i think we'd be higher were it not for that downward pull, brian. but will it stop us from working our way up? no, i don't think so. i think it will slow the rise. i don't know how much further we go, brian. i know into the november opec meeting where they were talking about production cuts, the ovx, which is the volatility metric for crude oil, it spiked to 55. started at 33, spiked up at 55. you know where it is right now? 33. what does that tell you? to me it says that not as many people are in this commodity right now. joe probably has done a nice job of telling folks don't try to draw a hyline in the sand here. but the producers are the ones hitting it here. i don't think this is traders. i don't think traders are actively in crude oil at this point. >> time flies. we've got the six-month
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production cut deal opec famously made expires may 25th. that's the next opec meeting. more expectations they will either continue to cut. saudi arabia needs higher prices but the u.s. shale boom is defeating opec if you will, joe. will this oil slide, to the same question, hurt the s&p 500? the big sector. >> well, it's 6% of the s&p. >> that's enough. >> it has not hurt it so far year to date. i think you have to take a long-term view on oil. you had a great trade last year in the second quarter. oil snapped back sharply. people were predicting mid-20s to low 20s. oil came right back again. so collectively energy equities were up 27% last year, they're down 12%. i think you still continue to avoid the space, let things shake out. there are other growth opportunities in the market. to your original question, no, i don't think it defeats the depreciation in the overall s&p. you break below 40 and you have a much bigger problem. the bigger problem comes as we
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have this avalanche of debt maturities that you'll see in 2018. that hits the credit markets and then becomes a problem. we're not at that point yet. >> i would argue that things have already shaken out. take a look at this downtrends in these sectors. extraordinarily well defined, has not been a panic but certainly has just been relentless selling. and some of these, if you're just looking at like sector etfs have already come into areas they found support previously. so let's start with oih. this is the services names. absolutely hammered, down 30% from the highs, but $26 a share on the oih etf was support in the past and that might be an area to say here's where maybe the buyers come in. the producers down 26% from the highs. my preference is xle, only down 15% from the highs. that tends to be your larger, more integrated names. you also have refineries in there that are not necessarily day-to-day sensitive to the price of crude itself.
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>> exxonmobil is 23%, chevron 17%, so you must be comfortable with the big integrateds? >> comfortable is relative. they're down 15% versus services down 30%. they won't have the same upside on a snap-back but you've got a nice return play. all of these companies are buying back oceans of stock. all of these companies are paying above market average dividends. and at the end of the day there is some crude oil sensitivity but it's not quite linear, it's not one for one. a dollar down in crude oil means a dollar down in companies' earnings. >> we tend to talk about oil being the same. one of the reasons the big integrateds have done better is because they're cutting payments to the service companies. they're cutting capital spending and saying cut your contract by 30% or we'll go find somebody else. >> exactly right. i'm in the xle as well. i think that's a good spot. i got in not too long ago. because it continues to go to the downside --
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>> does that make us brothers or something? step brothers? >> we've got enough najarian brothers already. >> i've been in the stock or the options. right now i'm in the options. what i like about it is the pipelines generally, you're just moving things around. i think in this environment when you look at the yields that you're getting, these guys did cut down their yield about a year ago now, but i thought that was the smart move. i think most people would agree. i continue to like this name. i think they're well run. i think there are places to be. we had some options and noble energy continues to outperform despite the fact oil has been getting slammed. let's move on to topic number two and this is an options story, guys. while the major averages are sitting near record highs, the vixs has fallen to a low. also think -- you and i have talked about this off camera, is it relevant anymore? >> it is. >> why? >> here's the reason, brian. if you look at the last six
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days, this is the data that we're actually trading on, right? the last three days, the spy has moved an average of one point, one point. you divide that by 238 where the spy is and you get that it's moving 0.4 a day. thevale vix is at 7, at 7 but pricing at 10 clo.60. >> a lot of numbers there. what does it all mean? >> they put over 52% higher vol in the options than are justified by the movement in the market. so rather than being complacent, they are not. people that are buying and hedging are smart, i think, because we're at the low end of that -- if it's a rubber band and it goes back and forth, brian, we're definitely on the far left side of that. but right now i think it is not underpriced, it is overpriced.
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>> so you've got a potential europe shaking election in france, you've got kim jong-un sabre rattling, you've got all this d.c. dysfunction and yet the vix is at 9 something. >> i think you have to look at other things also. if you talk to anybody, nobody is happy about saying i've got cash on the sideline. there is still some fear. we keep on talking about what is the next big thing? it's going to happen. we don't know what will cause it but there will be a market pull-back. then you get a 2%, 3% down day and have a down trend. now potential threat number three, d.c. dysfunction and we've got a developing story on capitol hill right now. tracking the health care vote that is set to begin soon. >> reporter: it's been a whirlwind morning here on capitol hill. the house just wrapped up a series of procedural votes as they move toward what they hope will be final passage of the health care bill. republican leadership is confident that they have the votes to get this done, but even if they do, there is still big
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questions looming in the senate. majority leader mitch mcconnell told reporters this week there will likely be big changes to the bill in the upper chamber. he's already reportedly started convening working groups of conservatives and moderates to try to reach some consensus within their own caucus. some names to watch, ted cruz, rand paul, mike lee, they could be the wild cards in this process. remember, we still don't have a cbo score so we don't know how much this compromise bill the house is voting on will cost us. the best case scenario, the bill makes it out of the house today but there's still no path forward in the senate, back to you. >> so another issue for the markets to digest. washington complacency, energy, everything like this. what does it all mean for interest rate policy at the fed? that is, my friends, your fourth possible threat. richard fisher is the senior advisor at barclays and a cnbc contributor. richard, first off, stick with
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the fed. yesterday we know nothing happened. do you believe june a rate hike inevitable? >> the market is pricing in a move in june. i thought the statement encouraged that. they basically said the weakness in the first quarter was temporary. one statistic that came out this morning is going to catch their eye, which is hourly wage compensation is up 3.9% in the first quarter. this came out with the productivity numbers. and wages are running at the 2 plus range, but that number is going to catch their ear or their eye. and the fact that they made it very clear that they felt it was a temporary setback in the first quarter, i think they're going to follow through. they also want to have some money in their pocket for when we eventually turn down. the real issue should be that you should be focused on and the traders should be focused on is what do they do with their portfolio, the system open market account, and there is discussion now of what do you do with the longer six-year duration plus portfolio that
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they're sitting upon, which is gigantic. a trillion 750 billion in mortgage backed securities. 2.75 trillion in treasuries. where do they position themselves on the yield curve. >> do they let it mature? do they let it roll off? true to roll it back to a shorter term maturity themselves? >> this is the big question. i think you want to be shorter in on the yield curve. you also want to have some capacity. don't forget, we are eight years into this cycle. we are fully employed. we're seeing inflation rising in terms of wages and pressure on inflation and we're waiting to see what comes out of washington and see if there's some relief on taxes and the ability to engage in cap ex and the regulatory front. so there are a lot of variables at work here. nonetheless, we're very long into a cycle. the markets are priced to perfection. the second subject you talked about, low vix and we'll have to see where they want to position
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themselves because they want to have dry powder. i agree with ben bernanke, the portfolio doesn't have to be cut way back, it's a question of where they position themselves on the yield curve and what they can do when the economy turns downward. so they want some money in their pocket on the short side, fed funds, and be positioned to affect the yield curve for economic growth purposes. they will have the capacity to do it. >> a quick question for you. how important is it for them to actually message what they're going to do or should they just do it first and say this is what we're doing with the long-term bonds? >> you know, given the group, given the leadership of the group in the case of janet yellen, who i think is quite thoughtful, they want to message as much forward as they possibly can. i think that was the purpose of the statement that they issued after this meeting just concluded. they are messainageimessaging. they still remember the temper tantrum.
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but they want to give as much information as possible and i think they'll signal as much as possible going forward. >> it's josh brown. >> hey, josh. >> how are you. so in prior years we had seen the federal reserve back off of rate hikes that we thought would happen in any given month. >> yeah. >> sometimes the justification used was something outside of the purview of inflation or employment. they would cite international conditions. so now it's the flip side. if you take a look at european stocks, they are absolutely going powerbolic to the upside, the euro is breaking out as i'm speaking to you. even china, i wouldn't say reacceleration but maybe an end to the deceleration. so would the fed look at that as something that might make them biased toward one side or the other if they were looking at it to the downside? >> i'm guessing that they're looking at the global system right now despite the significant problems i just came back from china, there are real
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problems there with their credit system. it's not just their slowdown. but the balance of things are much better, less threatening to our economy, and i don't think that's a major issue presently. as far as the markets are concerned, usually -- and i think there's a little skeconce here. the markets feel if they have a bad patch, the fed is going to back off. i think the committee now is realizing they look at the vix numbers and all the internal entrails. these markets are priced to perfection. a correction would be reasonable or reset, i like that word better than a correction, and i think they can digest that right now because they have made it clear they're going to move forward on the fed funds rate and do something with their portfolio. >> you've probably gotten this question a million times and it's probably stupid but i'm going to ask you anyway. >> what a stupid question. >> thank you, thank you. we're down 67 right now. lows of the session. does the stock market or does the fed care about the stock market? i mean i'm sure they don't want
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it to collapse, but do they look at it? >> sure. >> do they talk about it? do they realize their oversized impact on it? >> they talk about, and this is relatively new in the last three or four years. before i left we had lots of discussions about financial stability. the real issue is does any kind of volatility in the marketplace infect the real economy? their purpose is to create monetary conditions for maximum employment growth without creating inflation or leading to deflation. so if there's a risk of infection like we had, and we've always heard about 1937 or other years, or the recent case we went through. on the other hand, 1962, 1987, dotcom, et cetera, they might say something in the short term but that doesn't infect the real economy which is their real duty and purpose. >> richard fisher, it's always a pleasure, sir. thank you for joining us. >> thanks for having me. appreciate it. here is coming up on the rest of "the halftime report." big movers in the blitz from
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duncan to tesla. plus, get set for a knockout debate on facebook. and when a company announces share buybacks, should you pile in or run away? "the halftime report" is back in a flash. we've done well in life, with help from our advisor, we made it through many market swings. sure we could travel, take it easy... but we've never been the type to just sit back... not when we've got so much more to give
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i'm in the puts. so i am in the stock but on the short side. we were telling our subscribers yesterday it was setting up to be a little beat but not a big beat. instead they missed but the stock traded up and i said no matter how it trades initially, they're going to fade it. sure enough, they did. it was up around 3:17, i think, or something like that, brian. pulled all the way back to 300, just above 300 in the after hours and today rips to the downside. >> i maintain that amber heard is the tesla top. >> and square up after a revenue beat. it was up after lower cost. >> this stock is approaching $20. jon, are you still in this one? >> yes. >> i got out way too soon on this one and this earnings report this morning, this is a solid report. they're hitting on all metrics. i think ghouggenheim called it e sweet spot.
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if you're in this like jon, stay with it. don't do what i did, which is get out too quick. >> l brands reporting a 5% drop in comparable same-store sales which is not that bad in today's retail environment. >> it actually isn't. >> worse than expectations. they have a great brand in victoria's secret. it's turning around. it's something you want to own. it's got a good dividend to support it. >> duncan brands beating on revenue driven by increase in breakfast and coffee. josh loves dunkin brands. >> wait, i wasn't prepared. i didn't think you would call on me. revenue was flat, earnings was good and guidance was good. remember, they don't own the stores. this is a royalty story. i'm going to tell you one other thing. this company is starting to look at mcdonald's this way as well. amazon cannot come in and drop doughnuts on you from a drone so this is a great business. people want to be invested.
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>> is that a challenge? >> he's throwing down the gauntlet. >> listen let rally, people just want to get their coffee. but that being said, the act is -- app is on fire. over 2 million people just like starbucks, it's going to be a big feature going forward. i like this, i'm with them going forward. >> doughnuts from drones, no, but make munchkins from a sling shot. that could work. >> anyone else? >> finally, facebook -- >> let's go to "power lunch." >> i'm down. facebook beating on the top of the bottom line. pete, you are in the stock. >> i am, and it's bounced back pretty well. last night it went all the way down to 146 after they were talking about how many more ads can we put on here and started talking about constraints. when you go through the numbers and look at the growth, ad growth and look at engagement
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time and the growth. every single category, mobile, and some of the acquisitions. look at instagram and the numbers, how they're dominating snap right now. they were at $150 million last quarter, now over $200 million this quarter. growth is there. they have all the different levers they need for zuckerberg to execute on the plan, which is facebook going towards 200 at some point in time. >> facebook has two services that are snap-like services that are now bigger than snap. >> right. >> inside the business. and just overall the scale of this thing, 1.94 billion active users, that's like 2.5 trump inaugurations. that's a lot of people. >> buybacks, cash flow. >> there are a lot of companies out there that have that many people to sell things to. >> i think management did a really good job of expectations. they're saying, look, guys, we're going to slow but i think they'll manage that growth in a really good way. secondly, the stock had a 30%
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run just in a few months. >> i've actually argued that facebook is becoming the internet. and i only mean that semi sarcastically. it's eating the web. >> and talk about monetization. he talked about multiple ways to m monetize that. the dow jones industrial average is not down 100, it's down 92 points right now. as we discussed, guys, energy stocks are the big drag. the energy sector is now down almost 10% so far year to date so you wonder what the markets could have done if oil had held neutral. >> keep in mind people have argued and said facebook, alphabet, apple, they were going to be a source of funds if the market corrects. i completely disagree with that. i believe they're a defensive play because of the strong balance sheet and strong growth that they have and they'll be safe havens if the market
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corrects. >> you've got caterpillar down 2.5%. exxon down 2%. very defensive top of the dow. a few stocks up. procter & gamble, coca-cola and 3m so we're seeing a little defensive shift. caterpillar one of the best performing stocks this quarter in the dow. the worst today. you wonder if caterpillar was owned -- >> look at the big insurance names. cigna, anthem, all of them, united health, all of them making 52-week highs. almost regardless of the outcome of the vote. i don't think enough people are talking about that because these are giant stocks. >> you start looking at some of the pharma names on top of that and some of the biotech names, yes, they have been slammed but they have been starting to make a little headway. >> it was a sector that was flat completely last year. if you were in health care, you got killed as an active manager, so they're actually getting -- >> and by the way, to josh's point, that health care vote, very big one in the house, is expected to happen today. it could happen really at any
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given time. the republicans can only lose 21 votes. one member of the republican out because of a family emergency, so they need 216 votes. the vote will probably happen during "power lunch," it could happen during "closing bell." apple is about to spend another $135 billion buying back stock. is that really the best thing for shareholders over time? we'll have a debate. plus an appear list who sees big opportunity in, get this, a retail stock. he says you've got to own this department store. that name and why coming up as the dow is down 90 points. stick around. excuse me, are you aware of what's happening right now? we're facing 20 billion security events every day. ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that?
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we did that. really. we analyzed millions of articles and reports. we can identify threats 50% faster. you can do that? we can do that. then do that. can we do that? we can do that.
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consumer staples jump .45% after a week. the s&p and energy fall. now back to "the halftime" gang.
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all right. oil continues to be the big drag here. patty just getting a note saying oil is what brought us down. oil back below $46 a barrel. when we started the show, oil was below $47, now it's below $46 at $45.80. so oil continues its slide. it is bringing down exxon, chevron, which is dragging down the dow. the dow is down about 90 points right now. in its earning report this week, apple said it would buy back $35 billion worth of cook. jim cramer asked tim cook about it last night on "mad money." >> we can invest in our company and invest in our stock, and we do believe it's undervalued. and so we're buying it back. so from that point of view, there's an opportunity in that as well. but over the long haul, i think it will -- i strongly believe that it will be at a fair value.
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so that's how we look at it. >> financial consulting firm fortune advisers has a report out on buybacks that shows that s&p 500 companies that announce buybacks saw an 11.2% gain between 2011 and last year. it sounds great! but get this. the broader market has topped that, returning 14.6%, guys, so our buybacks, all that. >> that's very misleading. >> you just had a five-year bull market in there as well. you need to look and say -- broad discussion here. if you've got excess cash, you know increase dividends, buy back stock or invest in plant equipment. if companies go into dividends, that's what investors want. you have to have sustainable dividends over time. >> but you're making the point somewhat against buybacks and josh says it's an irrelevant statistic we just gave. >> not irrelevant, misleading. >> why is it misleading?
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>> apple just did something not enough people give them credit for, absolutely miraculous, unparalleled in the history of the stock market. apple in the three years leading up to 2012 went up 300% and people said that's it, apple is done. and then in the middle of 2012, apple starts a dividend and buyback program. and they end up in the five years since then, brian, buying back and paying out dividends worth a cumulative $202 billion. to put that in perspective, there are only 17 companies in the united states that are bigger than $200 billion. so apple bought itself the equivalent of a large cap. the net effect of that is the s&p 500 in the last five years up 93%. so is apple. they managed to match the market after tripling and starting from a point where people said it's too big, can't get any better. so they didn't do that in the absence of reinvesting in the company because if you look at r & d, it didn't double, it didn't
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triple. in that time that they spent $202 million on buybacks and dividends, r & d went up 5 x. >> companies have no obligation to buy back one share of stock. they can say they're going to do it but they don't have to do it. they probably will at apple. >> i gave you the net number they actually did. >> apple probably would. but it's important to note they don't have to buy back one dime. >> you have to be very stock specific because if you have so much cash on your balance sheet, you get activists coming in and saying what are you doing. so management -- >> it's a fine balance. >> it's a fine balance. then if you start buying back, investors say you don't have any opportunities out there, what are you really doing. >> i think the key is, are you a serial buyback? we have a whole strategy based upon are you just doing this for financial engineering, brian, or are you doing this because this is something your company really believes in and you've been doing this a number of years. >> isn't it also saying we have nothing better to do with our money? >> no. i just demonstrated that you can do both. there are plenty of companies
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that do. this is a company spending a lot more in innovation and buying back stock and, oh by the way, paying a great dividend. it's not either/or. in this day and age when apple can take $88 billion of debt onto a balance sheet to account for the money it's got overseas that's locked up and they can still have it all, this is probably the new prototype of how companies should be thinking. >> when you look at the cash flows coming in, look at the great use you're doing in many, many of these cases where these stocks are going to all-time highs, brian, so they have done the right thing. >> it's also because of where the debt markets have been that you've had companies buying back so many. >> let's get the oracle of omaha's take on buybacks. he said this a couple of months ago, this is warren buffett. for continuing shareholders, however, repurchases, buybacks, only make sense if the shares are bought at a price below intrinsic value. >> so they announced their first buyback and said 1.3 times book is where they would get
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interested in buying back shares. so that's not something that's going to happen every day because berkshire sells at a premium to its assets. but if you look at the makeup of the stocks in buffett's portfolio, you will find oodles of buybacks. i think what he doesn't want is a repeat of 2007 where companies destroy capital by buying back right ahead of a crash. but i don't know that that can really be timed by a corporate executive. >> oodles, somewhere between a metric and a ton. speaking of warren buffett, berkshire hathaway's annual meeting is this saturday already. time flies. of course in omaha, nebraska. and warren will sit down with our own becky quick on "squawk box" monday morning at 6:00 a.m. after addressing shareholders. charlie munger and bill gates will also be there. 6:00 a.m. all the way through "squawk box" monday right here on cnbc.
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ahead, it is a double dose of unusual. the brothers najarian, but they're also tracking unusual activity. see what i did there? >> i did. >> stay tuned for their market plays. plus, one department store shares rising over 10% over the past month and this analyst says you've still got to buy the call. our call of the day is a retailer. stick around. as we go out to break, oil quickly becoming your big story. wti crude kick pushing its way below $46 a barrel. it is down 4% to $45.90. we'll leave you with a little lupe. we're back after this. you could fill a book
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the cnbc iq 100 index tracks big caps seeing some big movers today. 3m hitting all new highs. the slide in energy sending shares of schlumberger to its lowest. for more go to now back to "the halftime report." all right, we've got two unusual options. let's start with pete, the handsomer of the two. pete. >> what? >> he's right. >> when we're looking at budweiser, i just want to point out a few times they have already bought. i'm already in this trade so i'm not adding to it but it gave me a lot of encouragement going forward. in march look at the huge oi this area right here, we saw some massive call buying coming in there. 22,000 of the upside may 1 '15
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calls $1.10. those were sold today. there was also a buyout in april but those were sold today. the september 1.30 calls, very, very aggressive buying out there. they paid a dollar initially, now they're paying $2.25 today. take a look at what the stock is doing. it's been moving to the upside. i'm in these trades. i'll stay in this all the way probably until the september expiration cycle. we'll see what happens, brian. >> all right, jon, the handsomer of the two, what do you say? >> that's right. now you got it right, brian. take a look at snap. not my favorite stock, as josh knows, but nonetheless i'm in it. i was long last week because of unusual activity. today they come back in in a big way. they have got earnings next week, wednesday. take a look at this, nearly 8,000 of these calls trading at the may 27 50 strike. that's $5 above where the stock is right now. i will likely be in this to and
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through earnings next week. >> so your holding period is a week maybe, five days, seven days. >> because that's the catalyst. once the baby is born, bang. >> i'm always waiting for this segment to end with someone yelling snap into a slim jim. would you just do it one time? >> another food reference! >> now you know why, josh, with the food references. got a quick update from yesterday, that french stock we talked about, digital marketing company, crto, take a look at that one. paying off again. they were buying those puts when the stock was around 55 yesterday. as you see falling to 52. >> that has been a hot stock. that is one of the hottest -- that's sort of the tesla of europe in some ways. european traders love that name. >> they were nervous into the election and/or because of those big gains we talked about. that's why they were buying puts yesterday. >> thank you both very much. now let's get to sue herera with the latest headlines. >> hi, brian. here's what's happening at this hour, everybody.
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former president barack obama throwing himself into the french presidential election, which as you know will take place on sunday. he endorsed centrist candidate emmanuel macron whose campaign released this video on twitter. >> i know that you face many challenges, and i want all of my friends in france to know how much i am rooting for your success. because of how important this election is, i also want you to know that i am supporting emmanuel macron to lead you forward. vive la france. >> nissan of great britain unveiling a prototype that it calls the signal shield. it prevents distracted driving. once the mobile device is placed inside the car, the shield creates a silent zone and blocks all of the phone's incoming and outgoing connections. and "morning joe" co-hosts joe scarborough and mika
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brzezinski are saying they are engaged. the two are ruling out an offer from president trump to do the honors. we wish them many, many happy years together. that's the news update at this hour. brian. >> and i can't wait to ask them. i look forward to the invitation. >> don't we all. >> so, joe and mika, if our it there, i will lead the macarena. >> that's worth the price of admission. >> congratulations to them. coming up at the top of the hour, we are waiting for that big health care vote in the house. we could have it live in the show, we're all over it. plus the white house responding to apple. and shark tank's kevin o'leary will weigh in on apple stock. when it comes to managing money, it does not get any bigger than this. the ceo of van guard, they run $4.5 trillion on where the market goes from here. you need to hear their outlook. "the halftime report" rolls on right after this. ♪ (music plays throughout) ♪ ♪ ♪ ♪ ♪
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is the department store making a comeback? maybe one. atlantic equities thinks so and says nordstrom may be one of the best ways upgrading the stock to a buy saying, quote, a number of long-term drivers make current levels a good opportunity to buy a high-quality name.
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this is our call of the day. let's trade it. pete, you dare to own nordstrom stock? >> i do own it. i think i'm down a little bit right now frankly on this thing. what i like about them, brian, is obviously they got themselves in the off brand side of it with nordstrom rack. >> doesn't that then bastardize their own business? >> probably a little bit but they're also very strong online. when you combine those two, they were one of the early adapters going into the online world and competing there. they have done an excellent job. when you look quarter over quarter, they have seen growth there in their company. so the main story, yes, they have had some problems. but they are talking, not me, those that are upgrading today and raising the price target, they're talking about some of these things. >> should there be a smidge of a potential takeover premium? >> no. i don't know if i'm going there. >> we've seen deals like that. >> if you want that, brian, you go to l brands. the stock is down today. it's a stock on my radar anyway for some sort of private equity
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or some sort of deal with somebody else. i like that one as that. >> do you have a view on -- so do you like -- do you agree with your brother? >> i do, i do. but at $50 a share, i see a lot more upside for l brands than i to for nordstrom. >> because a thesis has been some some respects luxury and nordstrom will be a lot harder to amazon than nonluxury. do you buy that at all? >> no. >> no. >> no. >> why? >> if you're buying an $800 dress, i presume you want to try it on. >> free shipping, free returns. >> the next generation will not be as oriented toward the luxury shopping experience as their mothers were. it's going to be a really tough thing. i don't see it. look, i don't hate nordstrom, i think it's probably the best of all of them. i personally like the shopping experience. but even in my household and we have a nordstrom card, we order stuff online and send it back exactly like pete's saying. i don't know why that's going to change. basically this is the highest
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cost distribution type of outlet to get retail goods. why would you want to invest in that? i don't understand. >> atlantic equity said so. >> they have a piano player there. >> every time people bet against the american shopper, josh, they have lost. >> i'm not betting against the shopper. >> you want to buy commodities. people like to go out to stores. >> i'm betting against the highest cost version of a point of distribution. that's not quite the same as betting against the shopper. >> nordstrom, your card was just cancelled. >> he's buying it online. >> it's not personal, it's just like this idea that every day i come home from work, there are three or four cardboard boxes stacked up in front of the house. >> is there anything else you want to talk about here, not related to the show? >> i'm just saying this is what's popping right now. people do not care as much to get to the store. sometimes they go, but sometimes doesn't work for these business models. >> you know who wins from amazon? you drive up to milwaukee from
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chicago? that u line box maker, it's about a ten-mile long warehouse as i'm going 94. does this building ever end? >> today's hottest trade, cardboard. >> plastic, now it's cardboard. energy the market story today. we'll hit the futures pit next. plus just three days until the sohn conference in new york. we'll take a look at how some of last year's picks are faring. "the halftime report" back in two. edictable. the comfort in knowing where things are headed. because as we live longer... and markets continue to rise and fall... predictable is one thing you need in retirement to help protect what you've earned and ensure it lasts. introducing brighthouse financial. a new company established by metlife to specialize in annuities & life insurance. talk to your advisor about a brighter financial future.
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♪ welcome back to the halftime report. let's take a look at crude oil falling 4% to its lowest level since late november. jeff, we're seeing losses accelerate with the commodity complex tracking for its worst day in two months, that's crude oil. but the complex coming lower. the stock market coming down, too, after crude broke 46. what's the deal here? >> well, investors are selling with both hands saying the crude oil space, like you talked about, $2 lower. once we get through technical level, it was like a hot knife through butter. i think it's really important to remember the sense of urgency we will now see out of opec and non-opec members. only have 21 days to talk about extending another six months of production cuts to help buoy the price of crude oil. they are crushing crude. >> opec is one piece of it, but
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the other piece is china and what we're seeing reflected in copper today as well. >> that's right. when you look at some of the chinese numbers the data numbers coming out, pmi in particular, it's been very weak. so traders are worried about demand coming from there. we brought up the technical level of $47 in crude yesterday. once it traded through that, all bets were off. you can trace this back to gasoline demand. gasoline is what supports crude oil. we're headed to the summer. that's what it's refined to in the most. i see it down $500,000 barrels a day. >> we'll talk crude on the online show as well. we've got a jammed show for you on this busy day for commodities. we're joined by ed yardeni. he'll discuss a seinfeld market. plus, bill strazzulo has a bold case for crude oil at the top of the hour halftime is back after.
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hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade ♪ ♪ i'm dr. kelsey mcneely and some day you might be calling me an energy farmer. ♪
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energy lives here.
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so you miss the big city? i don't miss much... definitely not the traffic. excuse me, doctor... the genomic data came in. thank you. you can do that kind of analysis? yeah, watson. i can quickly analyze millions of clinical and scientific reports to help you tailor treatment options for the patient's genomic profile. you can do that? even way out here? yes. even way out here. >> welcome back. some of the best and the brightest investors will gather next week at the 22nd annual investment conference to present their best ideas, but how did some of last year's picks pan out? leslie picker is here with that story. >> pick's pickers. >> i love it. not a peck of peckers. >> we've tallied up last year's
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picks and if you followed some of the advice, you could have made a lot of money. they recommended longs in west stock up 44% and hyatt trading 17% higher. and shorts and depo med and group that are each down more than 18%. some investors made bold long-term predictions. >> you have have to think of the long-term secular trends in its favor with amazon. people want to buy things more conveniently, that has an immediate tail wind to the retail business. >> well, amazon is about halfway through and up 40% over the last year. others, though, had tougher time. carson block of muddy waters called for short on the bank of the ozarks. that stock is up nearly 20%. and some of the predictions spanned beyond the market. here is jeff gunlock with a very prediction about the election in
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may 2016. >> he's going to win. and he's very comfortable with debt. we know that about donald trump. >> of 16 picks last year, ten were directionally accurate. that's a success rate of about 63%, guys. >> the market was also up 15% since the elections, so you could ride that a little bit. >> also nobody tells you which ones to listen to and which ones not to. >> well, if you bought equal basket of all of them, you were up. >> you have to do some work. >> yeah. >> lot of good information. >> well, the halftime report will be live from the sohn investment conference next week right here in new york city. we'll hear from the aforementioned gunlock, keith meister, david ionhorn and many, many more. leslie, we'll see you there as well, i'm sure. let's get a check on the markets. we were down 100 points 20 minutes ago, we have now recovered more than half of our losses. the dow jones industrial average now down just 27 points.
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this despite the fact that crude oil is down more than 4% to 45.82. all right with the markets closing in about three hours time, let us get now to our final trades. i'll start over here, pete? >> general mills, minnesota company in the news today. talking about the idea is anybody interested. he said he has heard that they're not. i see a lot of paper in there. i think they are. >> going for the homer. minneapolis company. john? >> fedex. some call activity percolating in this one, folks. so because of that call activity, i'm calling it for the last trade. i will be in it probably a week. >> watch the banks, especially interest rate sensitive banks the fed is on target. >> in a good way? >> i think they'll have tail wind for the next few days. >> josh brown, dunken brands? >> no, i'm -- i yield my time to joe. >> pnc i think will break above 125. we talked about it. listen we talked about
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financials breaking out all of us on this desk. you have a couple of really important days coming here. the labor report tomorrow. that is going to be important. do we get the snapback from the 98 figure we saw last month? then obviously we have the sohn conversation, french elections. >> lot going on. >> thank you, brian. >> thank you all. that does it for "halftime." "power lunch" begins right now. tyler mathson here. welcome, erb. here is what is on the very jam packed busy menu for two hours. take two on health care. the house expected to vote on the republican plan in the next hour or so. even if it passes, it still faces major hurdles, of course, in the senate and elsewhere. we will break it all down with the ceo of a managed care provider become the role model for 21st century health care in america. commodities crushed today. oil breaking key support levels hitting five-month lows. gold six-week lows. we will go inside that


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