tv Fast Money Halftime Report CNBC August 11, 2017 12:00pm-1:00pm EDT
north korea appears to do that right now. >> next week is busy as you pointed out with major retail earnings wal-mart, target, t.j. max, coach, which has been doing well, michael ckors up 20%. >> people are crowding into the practicend. >> and out of the department stores. >> have a great weekend. let's go over to the "halftime report." >> and welcome to the "halftime report." i'm scott wapner the vix surging this week and 40% in the category, is your best bet to stay with stocks or take profits joining us is our panel. also with us from lake joseph, ontario, kevin ilowery, o share's etfs stocks are bouncing after three
days of selling. volatility is back and in a big way. do you say the course origin to move to the side lines for a bit? >> i think you stay the course i'm sure everybody is shocked to hear that that's what i would say obviously, people were seeking protection they did that in many cases through the s&p 500 the iwm, the qqq, of course, the vix, but that's really the deep end of the people the vix itself. so what i think move yesterday that was 44% in a single day, the ninth largest move in volatility in the vix is history, only the ninth largest. the big set over 65% but nonetheless, what that told me was a lot of the people that had been putting on these ratio spreads, one by three, one by four, they have been getting more aggressive with that, so if they have some protection against a small move in volatility, you get a big move like this, they chase, they're the ones also throwing gasoline
on the fire. >> yes. >> that's why a 1.5% move results in that. >> what an incredible move in just a few days. >> yes. >> it's been for the vix it's been a huge week on halftime as you know, several notable investors weighing in on the state of the markets and why they are growing more cautious >> i believe that the market will drop 3% at a minimum, sometime between now and december from let's say now grinding at a higher level when it does, i think the vix will not be a 10. >> i think the market is fully valued on a fundamental basis. how i get there, i think we are heading to normalization. >> there is nothing that's cheap today. you know, there is nothing that cries out and says "buy me." it may be fairly priced. stockmarket, bond market it may be rich nobody argues that it's cheap. >> all right so kate moore, ray dalio, risks are rising he writes today
you we heard what these other folks said on our show this week what are your thoughts >> i don't think that was an overly bearish commentary. i think it's consistent with what we have been hearing the last seven months. it's been hard to find someone that likes this market and was constructive in 2017, a 3, pull back, a 5% pull back, these are normals. volatility is expected we have all been waiting for it, calling for it. >> 40-plus percent volatility in the span of three days >> this is not a change? volatility regime in our view. eighth pickup in geopolitical risks, technical forces, i think a real pickup in volatility regime, something that's consistent will coincide with either a significant decline in terms of the economic prospects or financial shock neither of which we are getting in the last three days, this is just making people uncomfortable, when they were already uncomfortable and fatigued by the market. >> what is your gut sort of
telling you? you hear from great investors, dalio with his own words of caution. what should, you know, the average advisor be thinking about where the stockmarket is today? >> you don't have to look at the levels of the market all you have to do is look at the bond in march of '09 to where we are now 2017, it saves getting a little longer, too, you look at the level, it's fairly valued. so i think the market always looks for a reason to go down and so we've got it down all right. we got some instability, geopolitical risks those are always temporary risks. however, we potentially have that three-and-a-half more years with this white house, so volatility will pick up. i think what you do in situations like this, the same game plan i have before, i've got cash it's really cheap. he hit it in the head. you see the spike, that's definitely where he got that, it was pressure on his part too bad we don't have the
smarter brother on today sorry. >> yu the better looking one >> exactly so, look, i think you looking to upgrade the portfolio. i got rid of lower conviction stocks i have been trimming the ones that hit the price target. that's critical. otherwise, you play momentum in getting euphoria then i bought some bobby, it kept going down, i got stopped up this morning on that extra part i bought. >> kevin, it's funny, lee cooperman made the point earlier in the week with us, there is a rolling correction in the market people may not realize it. we said, 40% of the s&p is in correction territory from their most recent highs. you are looking at macy's is 55 pars off its highs, cigna, mosaic, foot locker, hess, via com, kohl's, are those bargains?
>> not yet it's a systemic rate going on in retail no, question about it there is also a residential and commercial real estate aspect to the whole retail space, with i is resolving itself at the same time putting pressure on these names. because there is a question about how many locations actually need, even if you are a successful retailer. so i'd like to see all this stuff getting resolved if are you in a b class mall and 60% of your out. s are there. there is a chance that mall actually goes out of business. which forces you to shut down locations. there is all kind of this overhang retail. i remember the cooperman conversation and lee basically was non-committal. he didn't feel comfortable buying into the valuation. he's turned out to be right in a mini correction. what bothers me, a market that goes straight up never goes up and never corrects is very troublesome. now we have a pause that refreshes. you know, people are finding ways to assure themselves.
i prefer the bsx i never had a 34% move in two days sentence i owned it that's what i got. but you know, it's an insurance policy that doesn't pay until it does and so i argue that parking capital, maybe a 5% rating of the oum is not a crazy thing and trading opportunities. yesterday for me was to move into mid-caps. i saw value there. i didn't do anything in the large space, i was a mid-cap guy. so far i have been awarded i like the values there, first >> boy, how right was gun block with us this week? his highest conviction trade was a return of volatility okay >> that worked >> what's wrong with a notice? >> it is sort of stunning what's happened from a volatility standpoint, and how it's forced people to sort of re-think, where we are and also some very bright investors to sort of double down with their caution >> yeah, a couple thoughts
about. that first off, we're only 2% off the high in the s&p 500. and the second point is, because of that, i don't see anybody running around like their hair is on fire saying, oh my god, you got to get out economically the global looks pretty darn good profits look good. we are predicting growth nothing out there says a bear market is if front of us what we are all saying, though, is you can have a correction at any point in time. i think kevin said it. this is the pause that usually refreshes. all i see going on right now is the broad market catching up with individual stocks you mentioned a 40% correction. >> is there the time where the market just pauses and refreshes? nothing more for the most part, every time people have gotten incredibly more cautious, it's been short lived. stockmarkets recharged itself. they come right back up. >> i have to see profit growth or projections start to get wheeled in i don't think you will see that
with economic growth in the u.s. and abroad you just put up some stocks i am looking at there i got to tell you, i got dry powder >> tractor is on my list, down 39% off its 52-week high. >> look the overall retail space has had a tough time i have been wise to watch that the point being, steve may have said this. have you to be disciplined if individual stocks get past your sale point. can you ride them higher when they start to crack, you got to take them out i have my watch list you've seen it there i'm not buying today this is august this is usually groupie time, liquidity dries up a little piece of news that didn't matter a month ago starts to matter. i got my dry powder. i'm ready to commit on those names at lower prices. >> just when you look at the statement by mr. marks yesterday on this program over at the new york stock exchange. he was saying, look, i'm not
saying get out >> right. >> i'm saying i have done very well, this mr. marks, not done p john he said i have done very well throughout my history knowing when we should lighten up and heavy up a little bit. in other words, be fully committed on times when he thinks that the market is a little oversold and by perhaps pulling back, which is what he said yesterday not getting out, but pulling back i think that's just prudent. you get to take advantages of moves like this, but to your point, jim, it hasn't really manifest itself in a lot of stocks it's manifest in volatility that kevin talked about but it hasn't been from a lot of stocks. >> the question is if it's a pause and refresh like it has been in these v-shaped recoveries, we've seen, which parts of the markets lead to that v recovery? is it going to be tech, once again? you know, as we're going to have a conversation about invidia and what that means to the overall
techs trade? which parts are the ones that lift the boats again >> okay. i think it will be tech. i think it will be most of the same names the reason being, by technic also, i don't mean the charge. i mean the apple traders that have gotten so huge, they go from liquidity, those aren't tax efficient vehicles they're in for a couple hours, maybe a day. you've seen some corrections in those numbers, western digital, netflix, those are more than 10% off the highs as well. so i won't call tell value yet micron, one i own and got rid of yesterday, i got stopped out of it it was my safety trade on what's happening, so much capacity. >> this is such a monster list that i have and names that are far and wide, too. >> no offense, when you look at it. >> disney, goldman, delta, gilead, dish, american, heinz,
costco all 10% many percentage points more than that >> nothing we seen the last few years the headline averages have been violent we saw it in health care we seen it over and over, it keeps rotating >> viet. >> we saw nit financials, we have to ig floor the top line to understand the real health. >> i think it's about dispersion, too. this is what you are saying. it reminds me of something that kevin is referencing before. if the market continues to grind higher, everyone was moving in lock step. if there was low volume and low conviction, it's not a great market for us investors. this dispersion, the spread between the winners and losers is what makes the interesting stocks, taking idiosyncratic risks. it's normal. >> there are bellwhether names out there, amazon is 10% off its inter-day high if you haven't been in that name and you watched it go up you are looking at this as a
potential opportunity to buy in. that's what probably keeps this from getting worse people wake up and say maybe i don't want to buy the whole market these individual stocks that have been leaders, they get into that that's why they probably lead back up. >> so, kevin, what about invidia and what it says about where techs should be? because as that stock has moved lower on occasion over the last, you know, few weeks or months, it has dragged technology down >> it was the darling. it really became the momentum darling stock. i think it's just giving back that element to it as it falls to earth with all the rest it's still one of the best names to own going into the back end of the year. ly overweight myself in august to get ready for the september-october volitive i was looking this morning at the blog, overweighted consumer goods, technology, health care, going into the back end of the year a. lot of safety on that. i don't want to give up the upside on tech
i think amazon being a buying opportunity. remain there, down 8 or 9% but there's lots of buying opportunities. i'm a bold going into the back end of the year. i think we will really ends up with good earnings on the year top line growth 6% earnings growth close to 11. i think it sets up the next year, the first two quarters, where we get similar growth. so the sectors that give me the most warmth and fuzziness. they have good cash flow, low leverage, lots of growth i love j.j.. i love apple i even own exxon, because it's so hated so much i even took a long position believe it or not on ge, the calls out there in the 19s, the 25s. i think activists will tear it to pieces, i lover equities above any other asset right now. this is a good correction. >> if this is a correction, it's a mild one to say the least, given what the stockmarket is
doing today. >> top line insignificant. we were here two weeks ago it means nothing, compared to what we were down yesterday. sure it happened in one shot than over a few days we seen before, you can't get -- >> the situation with forth korea doesn't get any worse than it is right now. make a case for getting out of the way of the stockmarket it's hard to do? >> i have a large dose of cash, look for opportunities, select opportunities, market opportunities. i'm looking for specific equity opportunities. and the global economy is improving. it looks like you may have longer rates for longer, if inflation numbers keep coming out as they are. if you have a 220 ten-year, you don't have competition in the broad asset classes versus equity. >> i don't know, they talked about it today, it is so soft on the inflation side but i don't know they can make a
case for anything prior to the december meeting i don't even think they can make that case. i think they're done for the year here. >> we're still on course we think we are on course for one more like this year. >> the crossover. >> the difference is we have different inflation cross currents we know people thinking coming out of earnings, they were competing for labor. you got good numbers earlier this week. but then we have significant disinflationary pressures when it comes to goods and to some services i think trying to figure out what the long-term trend there is a challenging theme for the fed. i wanted to mention something else when we are comparing the after classes against eachother. it's hard the truth of the matter is it's hard to look at another class and say like credit or anything in the world, say those valuations are not extended i mean, i'm not looking at a multiple expansion. >> others are making all assets across the whole broad spectrum.
>> yes. >> are pricey. >> we would absolutely agree with that. that's where you need to be a little more themematic and specific about the investments in any class maybe not expect significant multiple expansion in the markets, in fact, think that prices will move inline with earnings in the back half of this year. >> off to a good start here's what else is coming up on the halftime report. >> our call of the day t. retail stock that is one of this year's top dow performers gets an upgrade. one firm seeing upside performer of more than 13% from here our traders debate it. plus, oh, snap the social media stock dies after a disappointing earnings results. media insider ross levin zoson l be along with his report that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades
with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
looking at the halftime report wal-mart up 15%. the firm stevens thinks there is room to run. they've upgraded the stock it is our call of the day. kevin o'leary, you own it. you own wal-mart still >> yes, i do, yes, i do. i still own it and my thesis is, it is the anti--amazon name. i know they overpaid for their online assets. i'm willing to forgive them now. because the whole, you know, sentiment about wal-mart has changed in the last six months
they were thought to be brain dead when it came to competing against amazon that's not the case anymore. most analysts give them credit for the integration of competing online what they will become with whole foods, the best competitor for that is wal-mart they're already in the grocery category in a much bigger way. they have the same technology in being able to dlimplt i'm extremely bullish. if you want to own retail, two names to own are amazon and wal-mart these are the two companies that will craft the future of what america does in terms of when it buys commodities and when it buys goods and services, they're the two. they will end up the big competitors and i think leaving wal-mart out of your portfolio is a mistake because it's giving you the stability in retail that you haven't got from pretty well any other name they have all been decimated everybody blamed amazon for it the truth is part of fault and
others failing is wal-mart being better at what they do and having so much distribution in so many different markets. so i'm extremely optimistic what people will do in the next two years. >> the stock performance tells the exact story kevin is telling us wal-mart, year-to-date, kroger down two, target down 23 and amazon, of course, is up. >> paul ryan with the border adjustment tax and what's leaked out about that being dead, that was one of the big boogiemen in the room that could have really smacked them of border adjustment tax now that's dead, i think this continues to work, judge, we have strong buying calls, they're starting to roll some up stocks moved up from 78 to 80. not a huge move. i agree 100% with this call. >> as mentioned in the note by stevens? >> that's a part of it when you are running institution alimony, you need a waiting retail, because if you don't
have a waiting, it depends how much want to short it. the s&p waiting. so you are saying, i can't buy anything else, buy wal-mart. i have to continue to track the institution alimony. for me, i have never been that attractive to it i always thought it was too big to grow, clearly wrong, it has been growing. >> up next, john is tracking unusual activity in the options market as always stick around for his latest play. plus we get an update on his hotel trade. take a look at the s&p sectors today. reunce back on wall stet we are back right after this
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get ready, because we're helping leading companies see it- and see it through-with digital. >> all right we are back on "halftime." doc, what did you see on the new one first? >> we see norwegian cruise lines, very large upside call buying take a look at this, stocks down, it was down a buck 20. now it's down 69 cents the recent high was just over $69 not too long ago take a look at the 57.50 calls they were bought about 7,000
bang, bang, bang big numbers, very quickly. there you see it about 7,000 of those september 57 calls, time frame about a month 57.50 or higher. i like the trade i piggy backed on this, probably be in it two-to-three weeks. >> about a couple hotel trades >> happy to. let's start with wyndham this was a loser i bought into this, paid about a buck 40 for some september calls. and a buck 45, a buck 50 maybe even, sold them out for a dollar 30, a dollar 35. something like that. took the loss, moved onto the next one the other i loved, that was marriott they got great news when ali baba, the day of tear earnings, in the morning, they announced that deal t. stock popped. so you can see, basically, we got in here around a buck 55, a buck 60. there it is, trading up to almost $3 on that trade.
so you win some, you lose some, but you got a controlled amount of risks when you are trading options. you know what your risks are you defined your risk and the potential reward certainly paid off in this case. >> good stuff. come back over here, let's go do sue herrera who has the latest headlines. >> i sure do the associated press reporting that the u.s. has been engaging in back channel diplomacy with north korea over its nuclear program for several months the dialogue involves the u.s. envoy for north korea policy and a senior north korean diplomat stationed at the united nations. a head-on train collision near egypt's coastal city of alexandria, killing at least 36 people and injuring 100 others no immediate word on what caused the accident egypt's rail system has a poor safety record due to poor maintenance and bad management.
billionaire head fund manager daniel loeb said a plaque woman in the united states senate has done more damage to people of color than anyone who has ever donned a hood, end quote. this because of her support for the teacher's union. loeb says he regrets the language he used about senate minority leader andrea cousins. the first round of the pga championship he used a 6 iron he is the 86th ranked golfer in the world. >> thanks so much. nice stouf there >> nice stuff. right. >> it was. why him, not me? >> he may favor you one day. >> it kept on going off the green, probably into a tree. >> not necessarily to a hole to the right or left. >> exactly
j.c. penney is getting crushed on earnings, record low, lowest level, jim, in 45 years, wider tan expected loss, gross margins missed you have been making the case this is a stock to own. >> listen, i'm very disappointed in this result obviously, i have been on this show multiple times saying i believe in this company. clearly, i've gotten it wrong, now, i'm looking forward from here that's all can you do. you wake up in the morning, the results come in. the stock price is where it is this stock for the immediate term is not going to go anywhere there's two things that have to happen in the next month or two. there has to be a strong back-to-school selling season. >> they said they're off to a strong start. >> okay. that's good. >> the other thing that has to happen i look at this earnings report i see some good things, i'm not going to senselessly cheerlead here i see free cash flow is up debt levels are down a lot of things are positive
the wall street community isn't buying it. they have a new cfo, he had a background at watt mart. he has to come out of the shed and communicate about things going right with specifics, appliances omni channel. >> so you say they need to come out and tell a better story, essentially? >> yeah. >> wall street seems to say, i don't really care what they say. >> there is no story to tell. >> there are too many hurdles to get over. >> yeah. >> that's yb one, if you look at their guidance, it's you know as wide as the atlantic ocean. >> you mean the earnings per share guidance, 40 to 65 cents >> yeah. that's a fair comment. >> the company has no visibility of any great sense, how in the heck can you or any other investor >> well, so, you're absolutely right. and this business, scott, is about predicting the future. so to predict the next six months, is awfully difficult which is why they have the wide range. >> the range is like 25 cents.
>> 40 to 65 cents. i'm narrowing that i'm saying, the next month, back-to-school selling season has to be good you guy versus to complun indicate it. i'm not sticking around to the end of the year where in that range you fall or it's wrong i'm an investor long with stock, continues to think it's the right company. i'm not in it forever. you guy versus a month to convince me i'm right s. that strong enough? >> he's thrown down the giarrantano u gauntlet >> the trump trade that won't give up. defense stocks we are talking about. they keep going higher as tensions with north korea rise as well. are those stocks getting ahead of themselves? tech has been a high flyer a lot of those names are in corrections territory. is eight warning sign? and snap shares are getting whacked on the back of a weak earnings report. why it's growth may lie with a
dancing hot dog. "halftime" report is back after this, but don't miss "power" at the top of the hour. miss the blitz, the call of the day? no problem, go to c nbc.com/halftime to see the moves, the trades, who's winning and who's losing anys, breaking news and alis of all the top stories, c nbc.com/halftime report. th reca. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember. whuuuuuat?rtgage offer from the bank today. you never just get one offer. go to lendingtree.com and shop multiple loan offers for free!
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back on the "halftime" report, snap getting another disappointing earnings report. ross levinson is a c nbc contributor. ross, good to see you. >> nice to be here. >> you were critical of q1 what about q2? >> well, we talked about this last time. i was oncerned i think what we saw, clearly, is a miss on every key metric but on the flipside, i'm actually encouraged. i have been long there stock in the 20s. if i was long in the 20s, i'm long now i saw some signs that were pretty encouraging to me a lot of work to do in front of them a lot of competition, but i'm bullish. >> give me the encouraging signs you saw. >> look. the user engagement numbers were
really good. people under 25 are spending 40 minutes a day. that's great people over 25, over 20 minutes a day. so start right there start and stop there a little slow on the overall user growth, but i'm encouraged by the engagement numbers. i'm encouraged that people are saving over 250 million snaps to memories a day i'm encouraged with this new maps product i'm encouraged that it doubled more than a year ago those are good signs for me. >> a red comments from an ad executive this morning said quote snap has gone from industry darling to troubled child overnight. how long is it going to take to reverse that >> yeah, these are true growing pains. you are starting to see some movement you know, they said 60% of their ads are being sold programmatically, which means advertisers are coming into the auction. >> that takes time >> that doesn't happen
overnight. so i'm encouraged by that, but, they really have, in my mind, four key products within snap, put specticals aside for a second four key products and each one need to be sold differently. so while programmatic fills the pipe, i think some of their key products need to be sold directly >> that also takes time. they have a new leader in jeff lucas. it takes time to go to the agencies and do it this does not happen without a lot of roll up your sleeves hard work i have experienced there over the years so you have to get out there and do it, hand-to-hand combat they are faced with big competition. >> that's my question the instagram competition, on the facebook side of the street, as you have already mentioned with mr. lucas, this could be turned around and hopefully if you are a snap fan would be turned around, but certainly has not been fully addressed yet how long do you give him before this is something that impacts their bottom line?
>> well, let's me start with the food news. i'm a fan of the godfather there was a great line when don core leone was shot. we hit him with six shots, he's still alive. i feel that's story here facebook has turned its sights and put a bulls eye on the back of snapchat and doesn't everything it could to knock this things down, including what i understand from agencies, not selling within the facebook platform, in some cases offering buy one get one free. >> bundleing sort of thing >> that is really tough. >> that said, i really don't think of snapchat in the same light as i think of facebook i actually think it's a different company. and the fact that mark zuckerberg and sheryl sandberg and the team are that focused on
killing the company, means to me that they're worried so if i'm evan, i keep innovating he said it yesterday on the call i want focus on tin no rate ising. a ton of things on the ad side >> that i have to overdeliver, go back to google, when i was at yahoo, the thing google was doing, i'm sure they're still doing it they were saturating the agencies with anything they wanted research, free people. free ads cutting prices, just to get market share and i think snapchat has to be really smart about how it goes to the agencies and overdelivers to them at this stage of the company's life they have the most desirable audience under 25 and they have a really unique set of products, but each one has to be sold differently, because what they're going to do in maps, which to me is one of the more exciting things they've inno valted on and launched what they will do to monetize it versus media, totally different.
>> ross, kevin o'leary is with us i can see him on the monitor hef has a look on his face like he would on "shark tank" if somebody cale before him with a pitch he didn't like he wants to say something. kevin. maybe i'm reading you long i was watching you during ross' answer >> no, yeah, ross is right i must say something about this name i have not considered it until today. there's two things that i think make this intriguing, one is they've added seven new geographys, so i think it's about 40 or 39 countries now, so that impresses me. but most of these countries like india, the app actually doesn't work yet because most people don't have a phone that can use the features that you have. snap is a functionalist. here's the thing that i wesh i could do, i have been looking at putting on some of this name i who you would like to sit down with evan for half an hour and tell them how to do an
institutional conference call. he really needs adult supervision that call was hor risk yesterday and every time he gets on the phone, he kills his company, because institutional investors listen to that, i don't want to be too critical, he's a really brilliant young entrepreneur he needs someone on the board to explain to him how this works, how you block a 25-minute call, what you say in the first ten minutes, what you do in the second, how you answer questions. you don't insult or in anyway belittle analysts. it's a huge mistake. the reason the stock is getting slaughtered, 50% is he just made a whole lot of people angry yesterday. it's the truth i give him a lot of credit i'm considering putting on the name i think it will go single digits and half the problem is him on the conference call. >> that is something he has control over.
>> i love your response to that. >> well, look, that's a really food points. super fixable. you are talking a communications problem, which we talked about here before. i agree with kevin, this is a little inexperience, certainly to miss the first two quarters coming out of the gate it is a little inexperience. but those are really pretty easy to fix i think, you know, they strip the next conference call -- script the next conference call. obviously, it's about how they perform. i am encouraged about the metrics, but if i'm sitting in that office in venice, california, i'd get really laser focused on a couple of things, those four sort of key areas of media messaging, maps and memories just focus on doing the best job can you on making those kour products work. two, i'd overdeliver for the advertisers in a way that they haven't done yet
three, i would be really focused on my outreach and my communication, both on the ir side to wall street, to the market, to consumers, really focused on that. and lastly, internally, i think they have to get a clear set and a transparent way of talking to the staff about, sheer what we have to deliver -- here is what we have to deliver here are the kpis we have to deliver if they do that, they will be fine >> that i do have user growth, remember, evan said outen the call yesterday, which i was a little concerned with, that, you know, they haven't really set their attention internationally yet. so i think they've saturated the market in north america mostly for their audience set but the growth should come internationally and ten if they can turn up the monetization domestically and communicate as seven e kevin said in a real i clear way, i'm bullish on the
company. >> the only other point i guess i would make, ross, to go back to your god father story, morocco zuckerberg and the folks over at facebook, they have a lot more bullets in the chamber and in their hands to use, do they not >> well, they do, for sure, and to their credit, they have the leeway to bring instagram along slowly, they've put some great talent in there and you can see the difference when you bring great talent and they have a really well oiled machine. all that said, you would probably agree that snap has stumbled a little bit here over the first six, seven months since their ipo and facebook has turned up the jets on them, but they haven't killed them so i think, you know, in some ways, i think the problems snapchat is having right now are fixable. and you got a brilliant guy. really, give evan credit he's a brilliant guy
he created a product that doesn't exist before but again, i think he's got to surround themselves with a deeper bench they got to get their messaging right. >> i own puts. i'm staying with my puts let's not forget there is 50 million in compensation stock to employees. they're not going to be happy. wee seen the movie before. >> have you another hockup. >> right the lockup but those employees get paid if stock, because they want to catch that rising star in that well if they don't see it, it gets recruited away that's an issue here, a $250 million hit, which is about a billion two the first quarter is an issue the fact is that, the fact that facebook didn't kill them doesn't matter okay they're not going to die in a quarter or two quarters. i've got a management now i can't trust. the first two quarters out of the gate, which should be lay-up quarters, where they should be under promising and over
delivering for those to build a stock price, they blew then i got corporate governance issues, which is that the ceo controls all the voting stock. >> the problem is user metrics were going down into the ipo. >> right. >> so the tone was set before a share was even available to buy. mop aetna thanson puts out a note the title is huberis. snap should have never gotten public within they did for a company so young, snap monetizization, you have that this early. >> i don't think they would have been able come public if they done do it then. >> with these apps, the windows is so short in order to get a critical mass. now they're 175 million users. i have to think that window is closed and there are other apps, frankly, it's the teen community. they are already embracing them. unfortunately, you will not see the growth ever. >> in terms of the list of what
worries zuckerberg, and sheerl sandberg, i don't think this is in top ten not snap. >> ross, thanks, for the time. we'll talk to you soon, i'm sure kevin ileery, our thanks, to you as well. up next, we are talking the blitz on goldman sachs, the defense stocks and europe when the halftime report comes back right after this
defense stocks are on the move, lockheed, northrop, from the most obvious trades ever. >> this would certainly be in that category, i'll take obvious trades for 1,000 these are really hitting obviously the reason is what's going on in the korean peninsula and our potential response there. but the stocks and volumes there and they just continue to move right to left. >> goldman downgraded by hsbc. >> who i get it look, there's -- >> is there a history there? >> thanks for being there for me, john all of these company will be challenged by what we have now, below 2.2 ten-year. they have transitions going on and these are all companies and all of these finance companies have been threw the wars, i'm sticking with them i think it's a great story.
>> blue apron downgraded again during our show again. oppenheimer throws shade on these guys >> i think you stay away, scott. i'm looking at the most recent earnings report i'm trying to find something positive to say i can't find anything. they've got debt -- are they going to do it try a new lunch box. >> the irony is rich. >> lunch box business. listen, i think you stay away from this. this is very dangerous >> they got debt and losing. >> what happens in the second half >> we have to watch what happens to the currency and how much further we go in the euro and watch draghi comments and watch what happens to further downgrades to earnings division ratios falling below one
the performance in the first half, not rep putable. >> do you like those that outperformed it? >> really constructive after the u.s. earnings season, good guidance and good numbers, good number of sales beats, i think we should pay attention to u.s. equitilies equitiliesties we think it's well owned but i wouldn't be selling. >> scott i was over there twice in the last two weeks. >> working. >> i saw your instagram picture. >> working. >> i'm telling you a lot of folks are nervous, talking about exactly what -- really difficult to do what they did in the second half what they did in the first. >> we'll do final trades before we do that take a look at the dow apple is leading theayup w, almost 1 3/4 percent back after this. where, in all of this, is the stuff that matters?
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welcome back, we close out the week in a few hours. >> we haven't talked about the stock very much in the cyber security place, fire eye seems to be formed a base here, starting to power higher here. i think it's going to continue because we don't see the cyber security threats going away. it will soon turn profitable. >> radius health, judge, it was a $34 stock this morning and moved up a buck to $35 stock buying the 40 calls, i'm in there with them right now. >> baba, earnings next week. >> thursday. >> i think what you're seeing today is an overflow of the reaction in that market in china versus the u.s. market i think it's going to recover. >> i'm actually talking about em asia, think it's an interesting
trade. i don't think the geopolitical risk continues to last we've had good strong three-month updates to earnings and i like the breadth a good fundamental place. >> thanks for being here. >> thanks for having me. >> thanks to you for watching as well nice snap back for stocks, "power lunch" picking up the store right now. >> here's what's on the menu retail wreck jc pen neon track for one of the biggest drops in decades, reporting a huge loss. what's ahead for the struggling store and its vifrivals >> locked and loaded accused of driving the korean peninsula to the brink of nuclear war. shares of snap tanking 10% right now. why it's future may lie with an augmente