tv Fast Money Halftime Report CNBC October 20, 2017 12:00pm-1:00pm EDT
ge, the story to this morning. >> an amazing turnaround and investors liked what they heard from john flabry in our exclusive with faber in the conference call. heard that from faber and jim cramer who has faith that he heel make these changes. >> let's get to wapner and "the half." and welcome to "the halftime report." i'm scott wapner our top trade this hour, electric shock ge tumbling on earnings today. its worst day in years, but is that drop finally, finally are the opportunity now to get in? with us for the hour, jon narnlg narnlg john and josh brown, kevin o'leary is with us, good to have him with us as well. we begin with shares of ge off the lows of the day. still getting slammed though, this after a disappointing third
quarter. the company also cutting its forecast josh, you were in this stock a long time ago. you've since been out. what do you make of the quarter and what's happened with the stock? >> so, i'm not getting back in but i would tell you if you're looking to sell, make you already had that opportunity, i'm watching the canned. i want to see how she goes out, because when you have a stock that's down almost 10% pre-market and it gains back as much as it has in that day, psychologically you're just thinking like anyone that want to be out of this thing may have already gotten out maybe we saw the worst of the news that we expect to see all year this. stock has been downtrending into the news it's not like it's a shock, and i think the reaction is more important than the anticipation. >> did you miss your best chance to get in? >> i don't feel like there's any rush, but it's just like do you want to put shorts on now that all of the bad news is now they kitchen-sinked it and it was worse than expectations but if you're running around saying ge is in such bad shape, yeah,
we know. we get that. so what's next is the question >> maybe the dividend is next if they address that mid-november maybe that's the next shoe that potentially drops. we just don't know. >> and i think that's the final shoe if it drops the kitchen sink comment is being thrownout there a lot, and that's what a new ceo does, right? he comes in, he lowers guidance. he overhauls the c-suite but there is a problem with the dividend which will be an overhang whether it gets cut or not it's an overhang through the end of the year the other thing that i think will put pressure on this is tax law selling, and not every investor out there is a taxable investor, but enough of them are that with a stock like this and with gains that people have had this year, there will be tax law selling going into the end of the year, so for both of those reasons together, i wouldn't buy it here. look, it will be relevant again. we're not, you know, consigning it to the dust bin of history. just not for this year. >> what's the bigger standout today? is it the disappointment of the quarter and the outlook, or is it the reversal in the stock
you have an 8% reversal. >> it's the reversal in the stock and i think it was pete that talked about somebody that stepped up and got 108,000 puts, just basically looking for some downside, and i think, scott, what i saw in the pre-market because i -- i timed them from basically two hours before the market started trading right up until the market opened, 18 million shares changed hands a fair amount of it below $22 a share. now, obviously for every buyer there's a seller, but -- and vice versa what we saw was big buying coming in as that conference call and the rest got going into the trading day today, so 18 million shares turning over. they needed about 10 million shares to hedge the puts that they bought. this could be a windfall if the stock just gets closed >> imagined it turned out. it's nelson peltz, and like updates in 13g other by the way, i bought your panic --
>> i bought your 10 million shares on the dip? >> bill nygren with us earlier in the week, thought that the stock would go higher, that the worst was behind the company was looking forward, not back kevin o'leary, what do you make of what we're seeing today from ge, a rather remarkable turn in the stock, albeit still lower and not much to hang your hat on from the quarter clearly >> well, when i hear a stock taken out behind the barn and i hear it being shot right out of the gate when the market opens, i get really interested, so i'm a buyer today. i went two ways. i actually own the stock and i bought some calls, 2019 and to.5 i think we'll get div cuts if i'm the new ceo and i'm going to talk about it in november, why not finish the kitchen sink story and complete the div what happens is a shareholder base into more guys like me.
i don't care if they pay dividend or not. i see lots of activism in the next 24 months i so a good 20%, 25% upside on this story i think the stock trades down as low as 20 on the concept of tax law selling. might happen i'll buy some more i like a disaster. i like it when everybody absolutely hates it. i can't find even guys in my office that want to touch it that's a great sign for me. >> wait a minute mr. dividend himself tells me he doesn't care if they cut the dividend you bought the stock today on november 13th, 15th, whatever that date, is they could come back and say we're cutting the dividend maybe the stock takes a tumble back to where you bought it from if not lower, kevin. >> no, no, no. if they cut the dividend, the stock is going up. that's what's going to happen. that's my assumption this thing is an unmitigated disaster and most hated name can't find anybody that likes it that's why i like it i don't know if i caught the bottom it may go to 19, who knows, but this story has asset value
you're going to chop it up and makes lots of changes. i bet you can make 20%, 30% on this stock in 24 months. >> rob >> you've been neutral on industrials and industrials are up in line with the market here's an example of a stock that didn't participate but if you look across the entire s&p, you can see stocks that haven't participated in that and that's where the opportunity lies within these lag yards as long as there's a catalyst to propel it forward. >> kramer this morning, although, you know, fairly positive on flannery and thinks that john flannery the ceo can turn the ship around, he gave a scathing critique of what's going on at ge let's listen to jim. >> i think the company was run like a country club. i think the company had very little accountability. i think the company, they paid the highest price for oil assets at the absolute top and sold finance at the absolute bottom and bought a second-rate infrastructure company in france and was not able to ration alize
it because of the government they were one of the companies that i would say that did the single biggest kabuki act i've ever seen in my lifetime other than the companies that crossed the line directly, and i do not believe they did, but they played it as close as possible, and i've got to tell you, it was a disgrace >> all right so what do you guys make of that, right? >> he's accurate. >> jim didn't hold back at all. >> he certainly did not. i'm not going to go as hard as he did in what seems to be a personality call on the company but they bought the baker hughes at the top of the market and sold out of their financial asset, near the low, not quite at the low but near the low so you can certainly say they have made missteps. i think the other thing that you've got to consider here is whether it's jim's damning critique or what we're seeing here on the desk is there are a lot of dividend-oriented funds out there that are basically going to say we don't want this in advance of what should be a dividend cut. >> are they unsurmountable issues at ge
that's what every investor needs to consider today. >> no, they are not unsurmountable. >> it's a question of when do you get in. >> especially since we have a global synchronized recovery and they have an opportunity to participate in that. there's no doubt. >> all right the number one analyst on industrials put out a note after poring through ge's earnings today writing the bottom line is that there are more questions than answers jpmorgan's steve tusa is live with us from new york city good to have you back. >> how is it going >> i wonder what you make of what you heard, what you were most surprised about in this quarter, if anything. >> yes a couple key points. first of all, i respect john flannery i think he's taking the right approach but he has a very high hill to climb. you know, there's a lot these guys need to do, and i want to simplify it for everybody because i think there's a lot of numbers being thrown around. it's obviously a very complex, maybe too complex for some sell side analysts to figure out, but there's a number being thrown
around of $7 billion in annual cash flow. that is cash flow from operations, including cap "x." that cap flow moves down to roughly $3 billion, and then with required pension contributions you are basically getting available cash flow this year of $1 billion compared to a dividend payment of $8 billion the stock recovered here a little bit because the cfo on the call talked about a couple billion dollars of structural headwinds that are depressing this year's number in order to pay that dividend, you don't need a couple billion dollars of improvement, you need a multiple of that in order to just get to the dividend and then, oh, by the way, you need available cash to grow the business in the future number two on earnings, the real earnings here are still not $1.05 to $1.10 compared to the $2 they were expecting six months ago on a true gap basis you're looking at 65 cents of industrial earnings, so just to
make those numbers kind of clear to people to how kind of bad this is, i know there's not so much modeling going on, but part of our job is to do that, and those are the facts. and so based on those facts, there is no way these guys are going to be able to maintain their dividend unless they sell assets which would ultimately be dilutive and if they cut the dividend it has to be a substantial cut, and if they do that, they are getting like a 2% dividend yield on what it should be, still with not a lot of available free cash flow, and i'm not quite sure why that's so attractive to people in the common text of it everything else that's out in in the market. >> and you're saying on november 13th on this investor day that that is in fact what's going to happen they are going to cut the dividend >> i don't know if it's going to happen on the november 13th day. i think if i kind of crawled into the board room here, i would be trying to engineer a soft landing which means, you know, reset, provide some hope and kind of get this news out
over the next couple of weeks, so whether it's monday morning, next wednesday, i don't know it will probably be sometime before that, because if i were john flannery, i would want to get on stage on november 13th and, you know, talk about the future, not about, you know, pension contributions and all this other kind of stuff, so i think this is the start of that, but people are being very presumptuous in going out and using terms like $7 billion in cash flow. it's much worse than that this year no doubt there's no debate on that. that's neighboring news, 7 billion. >> he said that number is, quote, horrible and not the new normal do you take issue with that? >> i mean, i agree with him it's a pretty weak number i think that there's probably improvement off of that, but, again, let's be very clear $1 billion to $2 billion of actual free cash flow, not seven, so whether that's the new normal or not, it has to improve multiples to be able to get it
to a point where, you know, you have optionality to do something for the shareholder or remotely pay a dividend that's even cut from here, so i absolutely think that they will do things to improve cash flow and to improve earnings we certainly have earnings growing. i don't know any sell side analyst out there that doesn't have earnings growing. that's objection lit default for anybody that does its business, when it troughs it has to grow, but this is not a kitchen sink this is an indication of the base level of the business and more importantly trends in the core businesses like power, oil and gas, renewables that are all under severe secular pressures right now. >> it's interesting. you list, you know, a few different major businesses of ge whereas ge seemed to, flannery clearly this morning seemed to single out power in the sense, and here's what he said. he said it's a localized issue, not a sweeping thing across the whole company. it sounds like you disagree with
that statement, that you say that this is a broader issue. >> no, no, no. i'm saying obviously oil and gas, you know, the total mark in oil and gas is a fraction what have it was a couple years ago so not a lot of growth there longer term. for power, you know, the issue is -- you know, it's a huge issue for them it was $5 billion of profits expected this year in power. it's a huge business you know, almost as big as aviation, okay so if this business is not going to bounce back and we are kind of resetting is and then going lower because of secular pressures, it does actually matter what power, you know, does going forward it's a key lever in this argument that ge is at trough or how much we should pay for ge. in fact, power is probably relative to my peers power is probably i would think a $5 at this stage of the game $5 to $6 difference and on a $22 stock that's a huge debate and everything we got this quarter and everything we're getting from our field work suggests that this quarter is an
indication that it's bad, and i believe it's getting worse. >> you say it's not a simple restructuring. ge as we know it, 12 months from now, how different does it look? is the conglomerate that we've all come to know and the quintessential conglomerate, how different does it look >> we put a note out a couple days ago basically talking about what we think the progression would be i absolutely agree with -- you know, with improving the portfolio. i do not think this portfolio is going to be in place a year from now, and, remember, you know, on a sum of the parts basis our number is 18 to 19 bucks so if you want to make it a break-up play and want to include pension overhangs, $115 billion finco and 10% tax rate, they sell receivables to ge capital for god knows what economic purpose, there's a lot of what i would call contingencies around this portfolio built up over the year that are now unwinding
again, this is not a cyclical issue where, hey, a market went down and it will bounce back in a couple of years so whatever you do, you have to keep those contingencies in the back of your mind. it's a lot more complicated that, hey, it's $1 so let's give it 20 times. >> billnygren, one of the most respected value investors and he's beaten 90% of his peers over the last decade told us earlier this woke and i quote, this company will show much better than average growth and he owns this stock, that they have higher than average quality business eds most of their income comes from parts and services, so we think this is a business that deserves to get back to a market multiple if not a premium i mean, this is a great investor who is saying that is he missing something or maybe you're too negative? >> look, you know, i'm just -- i'm just a kid from connecticut trying to do a bit of analysis here i'm not warren buffett or anything like that, but, you know, like -- i think the -- the bull case has always been high level that these are great businesses why are they generating $1
billion in cash flow this year if they are a great business and by the way this services business in power is under attack orders are down, you know, double digit strong and even the locomotive services, csx booked a $3 billion service contract through 2030 that they took out of their backlog services are under attack because of technology as well, so this is -- that's a statement that could have been made about jack welch in 1999, but i believe the game has changed here, and that's really what they are paying for is they are resetting to this level that is more normal, and, in fact, you know, it may not grow over the long term. it hasn't grown in a while so i don't know the guy but, you know, we can discuss my model, you know, my model says it's going lower. >> i just bring it it up clearly as an example of an investor who -- that's what makes a market, right? someone is on the other side, a well respected value guy. >> sure. >> who thinks that maybe the worst is behind ge that's the only reason to bring it up and to have that debate and maybe we'll have it with him
sometime on this program. >> absolutely. i'll -- you know, look, we can go and visit the power gen conference in vegas this december and sit down with our peers and competitors. their peers make high single digit margins in power and were making 20% margins before this all unwound. how do you see sales down 4% in that business and profits down 50%? this is moving back to a more sustainable and normal level which is not cyclical. it's a secular pressure that's unwinding here. >> finally before by let you run, i've got kevin o'leary here on "shark tank" and i'm putting you in the tank. he bought the stock and thinks if you cut the dividend the stock actually goes up here's your moment in front of kevin o'leary, what do you say >> yeah, i mean, it may goup o the day, but ultimately if they cut the dividend to 50 cents you're getting basically like a 2% group here. my group is yielding 2.2, 2.3 and growing its dividend 10% so
i can pick any other one of my stocks and -- and still outperform kevin. >> let me ask you a quick question about the dividend. i agree with much of your analysis and it's well done, and i think a lot of people are already baking in a $1.2 billion to 1.5 billion free cash flow in this story there's only one day to cut the dividend it's going to be on the 13th there's no other option. i don't see how he doesn't own this problem if he doesn't throw that into the kitchen sink story that day do you agree, because if he doesn't cut div on the 13th -- >> absolutely. >> that div is not getting cut, so i'm waiting to hear that story. >> yeah. i -- it's not -- my point is it's not on the 13th i think it's going to be before the 13th so i wasn't saying it's going to be after the 13th it's definitely going to be before the 13th, like no doubt about it, and by the way, i don't think this stock is reflecting $2 billion of free cash flow. it's a 200 billion market cap so
i can't even really do that math but 100 times free cash flow i don't think this is reflecting one to two times free cash flow. i completely disagree with that. steve, good to have you on thanks for spending time with us. >> hey, guys, by the way, i know your former guest says he was number one since 2010, we crossed him this year. just clarified him. >> steve tusa joining us from jpmorgan. >> a question of whether the u.s. is the best place to vest mr. loeb also has a new pick that's jumping and that's all on "halftime". >> and more from david faber's interview with question khoe john flannery. >> the cash flow is horrible, 7 billion number, way off of our expectations, anyone evenings pectations that's not -- that's not the new normal 7 billion is not the new normal. there's a number of steps we're going to take to improve that in
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released today, leslie picker here with more on that as well as where dan loeb stands on the overall market which he's been positive on and done well this year. >> and continues to be. >> doesn't sound like he's changing his point of view. >> not at all. continues to be very bullish on equities writing in today's note that we expect the markets will continue to move higher driven by strong consumer and business confidence, combined with synchronized global growth now, third point focuses on forecaster visions for the thesis which the firm says has propelled an equities driven rally, that factor more than anything to do with trump and brexit it says it could rise another 5% if it gets done. bullishness appears to be paying off. third point is up 13.5% today, marginally beating the s&p 500 they are less optimistic about credit saying it reduced its
exposure by two-thirds since the beginning of 2016. kind bread and butter of how the firm got started. corporate leverage is high and interest rates are rising. the firm also detailed its case for a new investment, as you mentioned, scott in dover, the maker of industrial machinery has been up about 5% today on that reveal. their plan there, they say they have been speaking with management and pushing for separating the energy segment and boosting margins on the industrial segment and pursuing a better capital allocation strategy the firm also praised management in leave it its other investments, dow dupont, honeywell and nestle so not much contention on the action. >> while we have increased exposure to europe overall primarily through nestle, the majority of our portfolio remains in u.s. equities josh >> so i say, you know, thank god for people like that
he totally gets it it is the global recovery. you saw it in stock prices and they broke out last year and then you had the economicies in confirming what all the enthusiasm was about, and the poom people who have been buying and selling based on is tax reform going to happen in august or -- that's not what's going on dan 100% nails it. it's so much more important that the rest of the world is now growing with us as opposed to fighting back against us and having that disinflation creep in, and that is the story and that will continue to be the story, and i think price action has been way early to that and has been telling you that along the way so i totally agree with what he has to say about the overall market. >> kevin ollie, how about this point of view that dan loeb puts forth? do you agree with you? >> i do and i would enpect with it what's happened with a lot of domestic names that we think are american companies that have become european as they move away from the domestic tax rates which is one reason why we
should correct taxes, there's a lot of great global companies that are now european plays held in british pounds and euros and i think they have their wind at the back in some sense because, you know, the whole currency thing is getting interesting they have better operational margins as a result, and also the whole brexit analysis, i'm beginning to think that these london guys aren't going to exit and i think we'll get a lift on a lot of european lifted euro stocks in british pounds i'm not saying it's a certainty, but it's so complex for them that i'm actually buying more of those stocks that are british-based on the assumption like american british tobacco that they are never leaving. they figured out it's a stupid idea. >> josh is spot on what makes loeb in part, lesley, a great investor, he doesn't try to get too cute and read into too much of what's happening it's fairly simple as he said of why markets have gone up, and that's because of the easing of financial conditions that have
started in the first quarter, you know, of 2016. >> and that's what he says. >> hello doesn't have to be more complicated than that. >> and when you look at what's going on with the dollar and interest rates people are still putting money into equities. we're starting to see some of those flows leaving equity more recently and that said the market continues to move higher and we're seeing what's happening on the passive investing side that people kept putting money into those instruments and that's why he's bearish on credit. >> talk about the worldwide easing of financial conditions. >> like one important thing is that i mentioned a reference price action, like if you're experienced and you've been in the markets for a long time, this is like the most elemental concept. it's like -- you might ultimately end up being right and things might fall apart for the reasons that you stated in advance and that's brilliant, but there's no evidence of that right now. this week might be the first perfect week since 1998.
five days in a row of the s&p going up we have not had that in like almost 20 years. there have only been 17 occasions of a perfect week in 90 years, and 94% of the time we've resolved higher after. does not represent a market top, so loeb is experienced he sees what's going on in the market look, at a certain point this will end, but there's no evidence of it right now. >> home builders is on the move today. thanks, leslie picker. citi group taking a look at which stock to buy and which to sell we'll reveal coming up on "halftime. powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential.
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welcome back i'm courtney reagan. here's what's happening at this hour a florida congresswoman calling white house chief of staff john kelly a liar representative frederica wilson said kelly lied yesterday when she took credit two years ago for securing funding for an fbi field office in south florida. wilson says she wasn't in congress when that funding was approved. also in washington, the senate passing a budget last night, a big step towards passing the gop tax reform plan this year. and the television academy has voted to begin disciplinary proceedings begins disgraced film mogul harvey weinstein. the academy which oversees the
emmy awards says, quote, sexual harassment in any form is abhorrent and totally unacceptable and the newly refurbished "uss constitution" setting sail for the first time in three years this morning "old ironsides" as it's known is the oldest commissioned warship. that's a cnbc news break for this hour. back over to you, guys. >> courtney reagan with the headlines. citigroup is picking favorites and pitting two names against each other upgrading shares of lennar to a buy and downgrading pulti to a sell. jim lebenthal. >> this sector moves in unison right now household formation going well and low rates the only thing that would worry me is if rates started to meanfully crop up. i read his note and there's valuation questions. there's questions as far as, you know, has polti run too far in the sector will move in unison. >> the stocks have absolutely killed it this year.
>> pulte is up. >> pulte year to date is up 49%. >> mm-hmm. >> kbh, 52, lennar 23, toll 33 and dr horton 44. >> yeah. i disagree with the note it's not just because i do have a personal relationship with the folks at pulte, but it's because their margins are 24% for god sake the gross margin is 24 versus 21.5 that's what lennar put up last quarter. >> look at the itb right now it's breaking out like yesterday and today. >> 32% year to date. >> but look at recent break above 37 you can just own the itb i don't understand why it has to be so complicated. >> the only risk is if rates go -- meaningfully higher, like 3% that will spook the sector. >> but you're coming off a low base and let's not forget the potential impact of tax reform on the marginal tax rate, that
will bring more buyers the peak earnings year, there's a lot of tailwinds to the home builders that are very positive. >> one of the things that may not be so positive even though there's demand for housing and repairs, whether it's houston, louisiana, florida, california, fastenel, a stock we talked about for unusual activity that makes just about everything that goes into putting things together in a home u.s. gypsum. the prices are going up. i mean, the inputs for these guys and those margins i spoke toy think they are going to be squeezed, the margins for all of these guys because the demand is so strong, they are not going to be getting the deals. >> the mortgage industry, too, is working on a solution in terms of how to figure out how they deal with student loans and student loans potentially rolling in to mortgages. >> it sounds awful. >> it does not sound awful it will completely change the pace of household formation. >> i admire your optimism, but
that sound a lot like what happened ten years ago home equity loans -- >> what does >> of rolling student loans into mortgage debt. that's a bad idea. >> without even understanding -- just dismiss it out of hand, that there's no way, restructured debt? >> it smells bad. >> restructuring debt that is $1.3 trillion rocks signature on our shoulders. >> didn't we learn anything from the auction. >> he didn't say repackage or cdo. i don't even know if i like it, but i don't think -- >> let me stop you for a second. that wasn't the only problem the problem was people were withdrawing home equity to pay down credit cards or buy things other than home equity. >> as long as the standards of lending is maintained tand and it's thought until, the issue back then was the standard. >> well then the issue, rob, would be that right now you can't dismiss student loans in a bankruptcy, but you can walk away from your mortgage, so if you could roll student loans into a mortgage and then walk
away, i think you'd accelerate the walkaways in any kind -- >> the devil is in the details. >> yes. >> after the worst day in two months for apple, we will hear from the company's top executive on retail. angela ahrends as she reveals the new strategy for the iphone. but first, here's what's coming on "power. >> thank you investment they say everything is bigger in texas. well, that's true today, especially with "power lunch." we're live in houston at the toyota center with the billion dollar buyer who bought the rockets behind us for $1.2 billion. we have a huge show. with us all two hours. we've got mayor turner to talk about the recovery you'll remember six weeks after harvey, still a lot of work to be done. look at those two guys, chris paul and james harden now teammates. they will join us as well and the man that many consider to be the greatest hedge fund manager of all time with a rare and
exclusive interview, john arnold, guys "power lunch" live from houston and more "halftime report" right after this short break dairy and apple producersthe ne in the eastern united states supported by innovative packaging that extends the shelf life of foods and infrastructure upgrades that help us share our produce with the world. all across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov ♪ it's not just a car, it's your daily treat. ♪ go ahead, spoil yourself. the es and es hybrid.
store in chicago more on the company strategy and the lauren of the iphone x he's live in the windy city. josh >> reporter: well, scott, this new apple store in chicago right behind me here is going to open its doors for the first time at 5:00 p.m. local. i did have the chance to speak with apple retail chief angela ahrendts remember, one week from today that new iphone x will be available for pre-order and when apple does come into supply/demand balance, meaning when you can walk into that store and get your hands on that new iphone x, angela arndt is telling her retail sales force they shouldn't feel any pressure to upsell you to that ten and that's because she says there's an iphone for everybody. >> of course you want those fans to have the latest and greatest, but everybody is at a different phase of their apple journey, if you will, and i think it's most important that we give you the thing that you need at the right time in your life that you need it if it happens to be the x,
terrific, but if it's a young child, i would much prefer to have them have apple and then be able to come in and learn everything they can about that device and i think they will gradually go up to the others. >> now, some people might be surprised by that answer some might have assumed that apple would want you to be buying the highest priced phone in their iphone lineup but angela ahrendts saying that's not her retail strategy. i caught up with gene munster about the rumors and reports that supply is going to be limited for the iphone x at least initially maybe more so than usual remember, it takes about three months typically for apple to come into supply/demand balance when a new iphone is launched. it's estimated that will be extend topped four month with the iphone x scott, back to you. >> josh lipton, thanks very much guys, what do you think, apple, after this terrible day yesterday? >> i think we feel better about defending it yesterday and
saying any time you get a chance to buy it on rumor, unsubstantiated rumor that they had cut by 50% iphone 1 and 8 plus, demand from their manufacturer, i think you've had a great trade here, and it continues to be a great trade. like i say, i still say mid-is 60s to 170 by year end. >> i think you're going to see more of these rumors come out and what i'm waiting for and it's coming shortly is the day in which it goes up in response to one of these rumors it's having less and less of an effect it was down big yesterday, but it's bouncing right back today and it was marching higher, you know it's still about 5% off of its high from september, but, look, you're going to have a day soon when somebody cuts an iphone 10 projection, and the stock goes higher and that's where the floodgates are going to be open for it to go higher. >> kevin, you still own, it right? >> nope, i haven't been with you guys for a while just before i left to shoot "shark tank" in september. around the week of the 21st i
sold my apple. i'm going to wait out the cycle. i would like to get through a complete two quarters and see how we go through the 8th through the 10 the only reason i'm concerned it was adding volatility to my portfolio because as the other guys were saying, these rumors are moving the stock all over the place, and i figured i garnered most of the gains in this last cycle. this is a stock you want to own when your trends are your friend now a cycle we're about to go through on unit sales by money i'm going to step aside. i'll look at it the again in march next year. >> you're really going to try to trade it, right? you think that's the best strategy to be a trader in apple? >> it's not a trading stock. it's -- i'm getting out of two quart efforts, maybe even three, so i'm going to -- i want to avoid this cycle because this is a big one. there's a lot of assumptions about margin and a lot of assumptions about how accelerated the services business is going to go over the next two quarters, i'm going to
accept out for three quart efforts, maybe ford and wait we've had a hell of a run with this stock i find better places in the market i look at all the other opportunities i took it and bought tom pfizer and j&j and exxon. that's where the proceeds went i think i'll do better in those stocks in the next three quarters. >> okay. >> you know, the other thing that no one talks about is apple representation in the indices, whether that's a tech index or the s&p and the indexification of the way investors invest today. as long as we're in a risk-on period, it will be a beneficiary of apple flows the other thing is i think this product cycle rollover is going to be something that has the potential to be enormously supportive, so -- >> when are we going into a cycle that wasn't a big cycle, it felt like life or death since the three. have no idea what that means. >> and why wouldn't it continue to be in each and every example, the stock continues? >> have they ever been launching a phone and you're like this is not the big one?
>> that's my point. >> it's getting shrugged off quicker and quicker and quicker. negative news isn't going to affect it anymore. >> steve weiss is on the phone and he would like to add to that. >> thanks for being here we'll see you soon >> i know he's golfing. >> kevin o'leary, i know we'll see you back here sometime soon. coming up here dr. j. tracking unusual activity, a telecom and utility stock. find out his plays and how you can profit first, check on the dow 30 let's have a look. a down day for ge and p & g picking up the rear today, united health, goldman, jbm, boeing, boeing has been a big winner "halftime" back after this >> we're going to take rates up. >> you want to bet against the
♪ ♪ my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony financial helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony financial. what are you working forward to? all right. we're back on "halftime. dr. j. is tracking the options market as always bring is us two unusual trades today. >> two, judge, that's right.
>> century link up. >> right about $19.10. they came in not just for one expiration or two, but they came in for three separate expirations, really huge buying. take a look at this one, judge stock was 28 bucks back in july. now it's 19 bucks, and if you look at the strike they are buying, they are buying the 20 strike calls in november they are also buying the 21s and 22s out as far as january. big institutional buying we call it sweeping because they bought everything offered at a given price. somebody wants in fast when they are doing that, so we scrambled in with this one as far as the november calls i'll probably be in these two weeks. i might set up some spreads out there for january betting that it trades into the low 20s by then. >> and i see we have letter x on the board. this, of course, is u.s. steel u.s. steel up shy of 3%, 80 cents right now and breaking to the upside really strong
they are buying calls in here. also november time frame, judge, they are not buying as far out as they were in century link, but they are buying at the nov 29 strike. a full month out thereto into the future i bought these i'll probably turn this one into the spread and i really like th freeport yesterday as well. >> all right, good stuff, doc, come back over >> thank you, sir. >> nearly 3% as well. buckle up, next week the busiest week of earnings season thus far going to hear there tech, energy, auto, pharma ompanies, consumer companies boy, the board's big next week 'rgoto trade them ahead of the numbers next.
all right. there is the calendar for next week rest up this weekend going do be a big one. josh brown, what are you looking toward so many big names on the board. >> i have no position in this one. i'm obviously going to watch mcdonald's in the same group, chipotle. this is a stock that seems to have found a bottom. i don't know if it's because of enthusiasm about the new products and the queso rollout i feel like this is a battleground stock, still a lot of shorts in this name i'm not one that thinks that it actually did find its bottom even though 300 has been rock solid support. if they have anything to say other than queso was a stunning success, you'll see a two handle in this name. >> okay. jimmy, gm. >> yeah, gm's up there. >> a lot to live up to considering what the stock's done. >> you're right, it does have a
lot to live up to. think about this for a second, though, had six quarters in a row in which it's beat by a meaningful amount. in just about every one of the cases the stock popped on the open then dribbled down. really hasn't held it. what changed now in the last six weeks you've seen this stock break out. expectations still as far as earnings are really quite low for this quarter i think they'll beat it again. the real question is, does it hold gains which i think it will see in the early morning on tuesday? if it does, i think you're going higher from there. >> all right, doc, looking at the board, alphabet, firework so microsoft on thursday. >> microsoft, ton of unusual activity i love that name abbvie, stock hit 95% this morning and bled off and is negative on the day. i'm out of abbvie, still holding and focused on microsoft, think it's going to be a fabulous quarter just like adobe. >> robert? >> same reasons. >> obviously going to be a down shift quarter from what we've seen q1, q2, tech and energy
comps are pretty difficult going to be storm-related costs. i think it's broaddy ly expecte. >> all right we'll take a quick break we'll kick around names to expect next week as well dow up, 23,287 "halftime" is back right after this. missed the blitz call of the day? unusual activity or final trades it's never too late to get in on the action just go to cc.m/nbcohalftime win an uncertain world?k predictable income pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses.
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there's a reminder, we said it's a huge week for earnings. who better to talk about the market with leon cooperman, legendary investor, omega advisers he'll be with us on tuesday to discuss all of that. can't wait for that. always entertaining, insightful. also watching shares of ge before we get out of here for the weekend. way, way off the lows. josh, you said wouldn't be surprised if this one goes green. >> i wouldn't be surprised. >> profound statement considering how far back it's gone. >> you know, john brought up the market action yesterday. we gap lower and then if you look at a two-minute chart, you can't find a downtake in the dow or the s&p or the qs for that matter so this is the type of market we're in when we have these gap down opens, whether it's in individual stocks, or the overall indices, you should never be shocked at that grind higher it's almost mechanical it's really an interesting point of time, i don't know if it will
go on forever, but don't be surprised if this ends up flat. >> what's the statement, then? give me the comeback it's had already. >> the statement is the market is smart, you know this is a stock that's been underperforming for years. a total -- the industrials over the last year are actually up 30% as a sector and a lot of big caps in there are up, like, 45 or 50. this thing is down the market's not dumb. it was aware of these issues may not have been aware of the severity but a lot of that is in the stock by the time they announce it. >> by the time melissa says welcome to "power lunch" the stock could be in the green. >> don't fall out of your chair, judge. >> i'm not going to. one hell of a comeback the dow is up 120. even though procter & gamble is having a bad day doc, what are you watching the rest of the day? >> texas instruments, earnings next week. tuesday when leon cooperman is
here earnings after the bell. unusual activity today. >> final trade >> sure. that was my final trade. >> new all-time high yet again in nvidia. i feel like a broken record. it's worth pointing out. semiconductors look incredible on the week. banks, too. >> cisco systems has been moving higher on no news. i like that. >> robert? >> kre regional bank etf. >> oh. >> all right. >> thank you. >> that's it good weekend "power" starts right now. hey there, i'm melissa lee, here's what's on the menu. josh is right, shares of general electric still lower trading at levels not seen in two years ge ceo speaking ex-cluively to cnbc saying the current cash flow is horrible and the latest earnings are completely unacceptable. what do you do with the stock right now? tax reform back in play, the senate narrowly passing a budget blueprint clearing a major hurdle in the president's tax plan has the trump rally been reignited? apple's new retail strategy. we take you inside the tech giant's new flagship store, what it's revealing and will the big bet pay off?