tv Fast Money Halftime Report CNBC March 14, 2018 12:00pm-1:00pm EDT
you've got some gdp estimates getting trimmed. retail sales did worry some. trade worries intensify and then you've got additionally just concerns about the ten-year and 280. >> some industrial names pulling down boeing down almost 5% and johnson controls down almost 3% too. >> lets get to the judge all right, welcome to "the halftime report. i'm scott wapner we do begin with a sell-off in stocks as fears of a trade war with china continue to ripple through global markets with us for the hour today, jim laichb thaul, jon and pete najarian kevin o'leary, the chairman of otf. and we begin with stocks under pressure industrials, techs, financials pete, tell me what's going on. inflation a little hot, retail a bit weak real worries about a trade war and escalating one with china
and all of it is having an impact on the market red in many sectors today. >> on the top of that list i'd put the concerns i don't want to overplay this, but the concerns of a trade war, scott. we saw it yesterday right before you went on the show, the market was looking pretty strong. we start to sell off and i think a lot of that sell-off in the latter part of the day was some of the concerns that people have about what this administration is doing and how they're going to be operating going forward. that puts everybody at a little bit of a disadvantage right now because they really don't know. >> i'm wondering if we're at the risk of underplaying it. not taking it seriously enough if you have a real knockdown, drag-out battle with china, that could have serious ramifications on so many different levels. >> but we don't know enough just yet and that's why i think yesterday you sell off a couple hundred points from where you were at the highs and today we're up 100 points. now i'm looking over and down 271. so 370 points already today. volatility will start to creep back into the marketplace which is interesting too because vol
has been hammered. 16 means 1% move every single day on the s&p here's where we are right now. >> kevin o'leary, your boeing trade looks to be potentially in trouble. if we're talking about trade wars, boeing is the big decliner to the downside for the dow today. look out below here? >> absolutely. i don't think look out below boeing's sell-off is partly because it was the best performing stock last year in its sector on the other hand, the concerns about a trade war would really impact orders for very large equipment like that. you know, i want to caution everybody on this. >> you've got boeing accounts for 100 dow points today that tells you -- >> i know where it is. >> that tells you about the power of this stock. >> yes, it does. but remember this stock was a major performer. had you been selling it down to a 5% position, which is a discipline i endorse, the pain is less because you've already booked a lot of gains. let's go back two weeks on this
trade war issue when trump was rattling chains at canada and mexico in nafta discussions. then out of the blue he slams in the aluminum and steel tariffs that woke everybody up in the nafta discussions. everybody sits up and says this guy is serious all of a sudden, they work something out at least behind the scenes to come to an exemption that's still being negotiated within nafta. i think what's going on here and i'm betting as an investor, trump is using a different negotiating style than previous administrations and is going after china. if i'm china, at some point i don't want a trade war either. maybe there's a compromise but i agree with this, during the period when we're going to figure this out and renegotiate what that compromise is, volatility is here to stay and maybe that's not a bad thing it's what we used to have all the time now it's back. >> kevin, when you say volatility is here to stay, what do you mean by that? what i mean by that is where do you predict volatility will be is it going to be at the 20 level, in the 15, 16 level or
where do you project volatility to be? because 16 is getting back closer to normal levels and we obviously were trading in the 10 to 12 for a lot of the 2017. >> why do we have to suggest that the vix is the most accurate read on how the market views volatility in all cases. can't you just look at a rollover in certain parts of tech and say the leadership groups that we've come to rely on, things could get a little more volatile there, maybe we're primed for a leadership change if this sabre rattling continues. >> which has been a phenomenal thing for the markets to have leadership change. we talked about it all last year it went from one group to the next group to the next group that's why i say when kevin says volatility, what does that mean? 16, i'm all right with 16. you start talking about in the 20s, 25s, 30s, people don't like to see that. >> at least parts of f.a.n.g. i'm not worried about. if i look at apple, just
yesterday it set an all-time high google is doing well but look, i think the point that's going on here -- look, the market is 4.5% offof its all-time high. we're not in disaster territory but some yellow lights are flashing and frankly they are all coming from washington you can't ignore that rex tillerson was let go yesterday that was a calming voice that was some voice other than the echo chamber that exists in the white house as far as trade goes on and international politics that is a negative for the market but it's not a disastrous negative for the market. the other thing, this special olympi election in pennsylvania in a district that was heavily republican is giving an indication that next year 2019 will not be a unified republican congress. >> what if i told you giddy-up on the economy is not as good as people are expecting. >> i'd be surprised by that. >> why would you be surprised? look at the retail number, it was weak for some reason people aren't
spending money as much as maybe we thought. >> it is a fair point, but will you grant me this. over the last literally three years, retail sales have been disappointing. and yet the economy still grows. there is some disconnect going on now that has to be admitted between the stated retail numbers and what the economy is doing. >> you've got two-thirds of the economy consumer spending. if you have not as much as you expect as a result of the tax law, what's the problem? maybe there's an issue in the economy that people aren't focused on enough. you've got 2% quarter, 2.5%, maybe if you're lucky. that's not what people are expecting. >> well, but let's put into perspective. look, i'm not taking away from what you've saying but i'll say this, the last three or four first quarters of the year have been around 1% 1.5%. we can't ignore totally the retail sales you're pushing back on me, i get it there are more signs when you look at things like the ism,
construction spending, there are more signs that this economy really is picking up and, frankly, because of the tax cuts. >> maybe the ten-year doc doesn't want to hear it. the yield on the ten-year note is dropping today. maybe it's sniffing out something in the economy we should pay attention to. >> i think that has a little bit to do with russia too. when theresa may kicks out 23 diplomats, i believe now, they have a week to leave, but they're going to be leaving the uk when you've got that going on, when you've got the sabre rattling with the trade war potential out there and all these sorts of things, safe havens we would expect the yen, the swiss franc, gold as well as our treasuries to all see bids and for the most part you are. to pete's point and kevin's about volatility, i'm not pushing back against you on volatility, but the rotation when you look at the whole s&p 500, which of course is what you're talking about, pete, then
sectors seeing unusual pops in volatility, judge, like we're seeing right now in industrials like boeing, i mean boeing 100 plus points out of the dow today on that "new york times" article among other things about the potential losses for them in a trade war. 80% of their planes are sold overseas, 80% outside of our borders. so obviously they are one of the people that could be -- or one of the groups that could be impacted the most here overall, though, i think this is just more fluff until we see real action out of either china or some of the other trading partners. >> i think some are wondering, frankly when you look at areas of the market that have led like tech, as we're talking about whether the trades are overcrowded -- >> yes, they are >> whether high growth stocks have gone a little bit too far. >> they are. i'm just going to go back to boeing another factor is the thing has been a blowout success for a year and a half. it was trading around 110 two years ago. so yeah, almost a triple
at some point it's called priced for perfection if you get the slightest wobble like trade wars coming out of china, that will cause this stock to pull off. as far as the f.a.n.g. stocks, which is what you've asked, i've said for quite some time that f.a.n.g. is the wrong acronym. you can't put apple and google in the same valuation and growth characteristics as netflix and amazon there's no way to value the other two in comparison with the first two. there should be some dispersion among those nails ames and thats occurring. >> kevin, the dow is down 305 points do we need to seriously consider whether there's going to be a change in leadership in the market that tech has the possibility because of this trade war talk of giving up these gains that we've enjoyed? you saw the chips go down yesterday. we're not going to make too much of a single day rollover, but there are those thoughts in the market that maybe we need to
consider because of some of this trade tough talk if there's going to be a change in the stocks that have led >> if world conditions, whether they be political or trade war, whatever, are going to cause the vix to go up, and i don't think it's unreasonable to get to 25 that's the good old days of vol. when you have vol people like securities so go back to f.a.n.g. you can own tech with a cushion, you can own microsoft, own apple. you get a nice dividend, you get growth but you also get protection of vol. i think the market will move to that conservative palette. people who like the taste of a dividend once in a while and don't have to realize or rely only on capital appreciation so many tech stories are just it only goes one way. it's up until vol returns and all of a sudden you say, gee, what's that dividend all about again? i'd like to get that when i'm going up and down 2.5% a month i think that's the rotation we're going to see not necessarily out of tech but to more safety by the way, that long ten-year bond, it's not going past 3%
if you don't breach 3 and you want security and cushion, you go to dividends. and i think those stocks are going to shine the next couple of quarters. >> pete, the rate question impacts the bank trade financials are one of the stock groups leading to the downside today. >> no doubt about it let's just take one step back. whether you want to go to the financials or chips yesterday. chips were at multi-year highs yesterday, ten-year highs. so they pulled back because a lot of people just said, you know what, as we're watching this unfold before us, and obviously that was the exact sector where mr. trump and those folks have some disagreement, so that's the sector that started to get pushed to the downside. in terms of the financials, though, the financials have performed well whether or not we've seen the ten-year at a 2.5 or all the way up to a 2.9 so they can still execute, scott. but we are looking forward we had the conversation before i left, i took a week off. before i left the conversation was, hey, if the ten-year is at
a 3, can this market still do this and can the financials handle 3% the answer is, yes, they can handle it at 3%, yes, they can hands it at 2.6% and 2.8%. >> when you say the ten-year is sliding back down, coroda had dovish things to say he said too soon to talk about exit for their quantitative easing that they're doing and more or less draghi said the same thing. >> maybe we're reading the retail sales part of the economy and suggesting that maybe it's reacting too to the fact that the growth here is perhaps not going to be as strong as people are expecting. >> it is not as strong based on the early january numbers that we talk about today. these aren't the finals, these are the projections. but the early january retail sales numbers today, they are soft but not horrible. >> look, i think kevin has said actually to me the smartest thing so far which is that it is
not in china's interests to get into a trade war any more than it is in our interests obviously trump is doing a lot of sabre rattling in this regard but we've got to think at the end of the day both sides are rational a trade war decembimates both sides. i'll emphatically say i'm buying stocks here. it's inconceivable that we would get into a trade war with the second largest economy it would be akin to a world war. >> let's talk more about what's happening in technology. let's bring in the portfolio manager and vice president at eaton vance. yanna, welcome back. it's good to see you again. >> thank you for having me back. >> much ado about not much or are we in danger of giving up a leadership space with tech. >> well, it's interesting that we talk about vix spiking and the market being down but technology is one of the highlights and that's what we've seen to date is that leadership has been very similar to what we saw in 2017.
technology is leading the market to the tune of 3-1 even when vix is spiking, tech as a sector is holding up significantly better primarily because of the fundamental backup >> do we think that that's going to continue? can it continue to lead amid all of this talk about potential trade wars and picking a fight and perhaps a big one with china? >> we think it can obviously every day we wake up to another notion of monetary fiscal or political tweet that we are trying to digest and see what the implications are to the earnings and sales that's what we watch we almost wrapped up q4 earnings results that have been outstanding. over 70% of companies beat on earnings and sales line item technology again shined. as you look forward, you have earnings that are accelerating and sales growth that is going to exceed 10%. this is in the market that is expected to post 6% growth for next year.
so again if fundiamentals continue, we think that the trend can continue. >> you have a mostly f.a.n.g. driven at least top end of your holding group. you expect these high-growth names to continue to outperform? >> listen, as long as they perform and they execute, you know, the beauty of the technology space is that there's so many diverse industries within it and actually you see the divergence that you guys talked about in terms of the performance of the industries. if you look at the percentage of companies outperforming s&p 500, it's less than 45% when you look at companies outperforming within the tech space, it's close to 60% and that just, again, goes back to the secular growth stories within security networking, within software, within applications, within so many different incredible growth engines that we think have legs for years to come, not just for quarters. >> yana, does that play into the
idea why you have a couple of names that have pretty high pes? the valuation levels look pretty tolerable but you look at palo alto and salesforce, names i love but it seems like those are significantly different. that's just growth, is that for beta, is that what you're looking for? >> yeah, we look at a lot of different valuation metrics. many of these companies make a lot more sense we look at price to sales and others but again i go back to just a couple of names that you mentioned. we're talking about a sizeable tam opportunity for many of these companies that as they continue to execute and continue to have the leadership position, we think they can garner significant sales growth opportunity. >> you own some twitter. do you think the story has wholly turned for that company >> it's been a very strong stock. you know, i think that if they continue to do all the right things and trying to attract
more user base, there's a lot more that can go right than wrong. >> yana, give me one sector that for a growth manager you think everybody else is overlooking. we all know tech but give us one sector that you think as a growth manager everybody is overlooking right now. >> i'd have to go with consumer discretionary. if you're looking for diversity of different engines that can go in your favor, i think that's one of them. consumer discretionary, usually you say it and everybody defaults to retail but there are so many other things working within that space. if you think about autonomous vehicles, if you think about e-commerce and population of that as it relates to amazon and many others, there's a lot to like within the consumer space i think that's one of the reasons why it's been the second best performer to date. >> today's retail number doesn't concern you, though? >> listen, it's one number i think we've been sort of conditioned to react to daily, monthly data points that sometimes get adjusted we saw that with inflation
numbers not that long ago. we're monitoring all different data inputs. to us it comes down to stocks and execution by the companies and the markets that they're in. >> yana, appreciate the time thanks for coming on kevin, what do you think of some of the picks that yana has in her book? >> i agree on half of them but i always question names like twitter. i love to talk about twitter because there's no stock on earth or ever that is discussed in the media in every continent every day multiple times given trump's use of it, it's always around the world being discussed and yet the company cent seem to monetize that i always try and figure out when i hear people talk about investing in twitter, what is the investment premise increased cash flow one day, a takeout? what is the reason you would buy that thing if you actually took the name off and looked at the income statement and the balance sheet, it is a piece of -- you know what i --
>> kevin, but don't you think it's just -- >> profitability finally doesn't lead you to believe that the business has in fact turned? why hate on a run that the stock has had? >> no, no, no, i'm not hating. i'm just saying take the name off it look at the income statement look at the multiple you're paying, look at the balance sheet and look at every other social media stock and tell me when you look at that why you would ever take real money and own that stock. >> because, kevin, people think it's going to be facebook. that's the answer to your rhetorical question. people think it's going to do what facebook did in terms of its income statement >> okay. i hope that's true i just -- i look at it from the discipline of just looking at the income statement and balance sheet saying to myself how can a professional that has to put money in harm's way ever allocate to that thing it is a dog. call a dog a dog it has four legs and it barks. sometimes it's called twitter
and sometimes it barks that's all i'm saying. >> maybe it had a good bath and a haircut and the fleas are gone investors certainly seem to think so kevin, thanks. good stuff kevin o'leary from miami we have a big show tomorrow. we're going to be live from virtue financial's client conference in ft. lauderdale we're going to be speaking with vinny viola, doug sefu, glenn hutchins as well a lot of stuff to talk with these gentlemen about tomorrow at 12:00 p.m. right here on "the halftime report. let's go to dom chu with a market flash. we're watching shares of invision health care down 7% after saying it may be dropping out of the bidding for the company. that report right now is sending those shares lower so we'll keep an eye on this one but a big deal in the health care space that looks to be getting a little more complicated given some of the developments
currently, guys. back to you. now let's get to julia boorstin in los angeles with breaking news on disney. >> disney announcing it's reorganizing, creating a new division direct to consumer services, technology and international media operations that will include the upcoming espn and disney-brandinged apps. the company naming kevin mayer who's been known for his deal making disney is expanding the responsibilities of bob chapek naming him as chairman of the new division that's park experiences and consumer products this lays the groundwork for integrating fox's businesses and could create some potential successors for ceo bob iger. here's what else is coming up on "the halftime report." >> one analyst says it's time to rev up on ford the call of the day is next. also ahead, the specific names morgan stanley says are healimor stock shoppers.
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we're back we do have a news alert we want to get to in washington. >> scott, "the washington post" reporting that president trump is telling republican leadership that he is open to a narrow immigration deal that would include money for the border wall in exchange for a pathway to citizenship for daca recipients now, this would be a step back from a previous promise from the white house to pursue four pillars for immigration that include limiting family sponsorships, what the president calls chain migration, as well as changing the visa lottery system now, president trump of course just visited the border wall he had previously said that he wants to seek a bill of love for these so-called dreamers we will see if this moves forward and what vehicle republicans on capitol hill might be using in order to pass it and how those negotiations continue, guys back over to ou. >> thank you very much, we'll keep our eyes on that story as it develops.
meantime ford is on the move today following a rare double upgrade from morgan stanley. the analyst is adam jonas, well known, raising from underweight to overweight. he sees a 30% upside jim, we go to you for obvious reasons, an owner of general motors what do you think of this call >> i like the call but i prefer to own gm. >> why >> because the management there is doing more of the things that need to be done in the 21st century if you run a car company. they're doing autonomous vehicles, electric vehicles. today they are making some announcements in what they're doing in ride sharing. on all three of these fronts they are ahead of ford i'm not shorting ford or saying you should sell ford, i just very much like general motors more than ford i will say this, though, for the industry at least we're done talking, i think, about peak autos. remember that from a year, year and a half ago every monthly sales figure we were talking about peak autos.
both of these companies can thrive gm is the better pick. >> pete. >> i don't own ford. but you know what, i'm curious, now i am because of what adam jonas points out in this note. what he's really saying, if you go through everything, what he's really saying is, hey look, the truck division of ford, f-150 -- >> this is an f-150 based call. >> that is the call. he's saying that that alone makes ford stock worth a heck of a lot more than it is right now. whether you buy into that i'm not so sure. but with an infrastructure bill and the potential of what that could mean in terms of truck usage and what we'd see, it benefits gm as well but i think that helps out ford. >> this comes, kevin, as some suggest don't own an automaker at all given what's happening with trade. >> that's one issue. the other is if you assume it moves to the way of a rail car, there is a company that makes all the rail cars in america but nobody gives a damn who they are
or even cares. if every five years or seven years it becomes a box with four wheels that drives itself around and parks itself and charges itself, not not good for any of these companies. i'm not excited about ford at all because they are the back end caboose in the new trends of automated driving. they're so far behind gm or tesla. but trade war plus y utilitization, i just can't pull the trigger on any of this stuff. >> one of the things pete was touching on and adam jonas touched on is the construction and infrastructure spend ford with that f-150 and pete's got one of them, i know, that's such a popular truck it dwarfs everything else in the space. granted others have multiple brands, but this is a great one. >> i've got to jump to breaking news to meg terrell who's at our
breaking news desk. >> the s.e.c. is charging elizabeth holmes and former president sonny belwani with raising more than $700 million from investors through an years-long fraud they made false statements about the company's technology, business and financial performance. theranos and holmes have agreed to resolve the charges against them they're stripping her of control of the company she is going to pay a $500,000 penalty and be barred from serving as an officer or director of a public company for ten years as well as returning the remaining 18.9 million shares she obtained during the fraud. this is after the scandals that unfolded over a year or so where theranos essentially made what they say were misleading claims about their blood testing
capabilities so elizabeth holmes here in a settlement with the s.e.c. the s.e.c. saying that neither theranos nor holmes admitted nor denied the allegations in the s.e.c.'s complaint as for the former president, the s.e.c. says it will litigate its claims against him in federal district court we'll bring you any more news from this theranos story >> it is if nothing else just a remarkable turn, just underscoring this downfall, meg, of somebody who was once mentioned in the same breath as steve jobs remember, it was a magazine that put elizabeth holmes on the cover asking that very question as to whether she was the next steve jobs. >> she was this captivating figure, a young woman in silicon valley who dropped out of stanford and often wore that signature black turtleneck where a lot of those comparisons were made at one point the valuation of theranos was pegged around $9 billion and she owned about half of that. so after all of this unfolded with all that remarkable
reporting by "the wall street journal" uncovering false and misleading claims the company has been making, really an amazing downfall of a company to watch. >> interesting story and developments meg terrell for us this hour. let's get to the headlines, more broadly what's happening in news today sue herera has that for us. >> here is what is happening at this hour, everyone. the commanding general of u.s. forces in afghanistan says he believes increased pressure on the taliban has led to the possibility of reconciliation with the afghan government >> we've been striking at sources of taliban revenue and inflicting very high casualties on the taliban i think this is one of the reasons why they're willing to talk now. >> the s.e.c. charging a former chief information officer of a unit of equifax with insider trading. the complaint alleges he sold all of his vested shares, reaping profits of nearly $1 million a month before the announcement of the company's
massive data breach. and more problems for united the airline says it mistakenly flew a kansas family's dog to japan. the dog's owners went to the cargo facility to pick up their 10-year-old german shepherd but were instead given a great dane, which was supposed to go to japan. the airline put the dog on a flight back to the u.s this, of koefcourse, follows th death of a dog on a united flight just the other day. that is the news update at this hour, scottie, i will send it back to you. i saw that headline and i was like are you kidding me? >> thank you very much jon and pete najarian following unusual options moves in a few stocks today. we'll get their new ideas coming up. first, we'll get a check on s&p sectors. we thank kevin o'leary for being with us today. we'll see you back soon and look forward to that. we are back in two minutes
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minutes. coming up, the administration getting ready to get tougher on china when it comes to trade is there anything that they can do that won't start a trade war? plus 43% of americans don't have enough savings for retirement and now states are stepping in. we'll tell who's leading the charge and what those states are doing. also the market is selling off again after closing at the lowest level this month. are stocks resting here or relapsing? we're going to debate and of course we'll have a lot more coverage of the news coming out of theranos. that and more ahead on "power lunch" at the top of the hour. scott, back to you. >> michelle, we look forward to that. meantime the najarian brothers have made their way to the telestrator. pete, you're going first today what have you got? >> well, this is unusual, jon usually goes first but i've got the hartford take a look at that chart. a little bit of movement here, scott, but for the most part look over the past year, give or take the stock is virtually dub nothing. but today somebody walked in, bought the april 55 calls, 7,000 of those traded.
$1.25 is what they paid. stock was trading a little bit higher it was about 54.40 when they bought these so those options might be a little cheaper. i bought along as well i like what we're seeing here. maybe this stock can finally start to break back to the upside because it's been basically flat lined for the last year. >> doc, you go. >> paypal, pypl. this one they were at a conference, a barclays conference yesterday they actually said, hey, we're up for a big deal. you want to read into that stock is up pretty good today, even on this negative day. and they come scrambling in to buy calls. by the way, they have another conference tomorrow. they bought the 87.50 calls. you look now, they are well over 4, 500 of those. they have been buying them several months out as well, not just april's so what did i do i bought them. i'll probably hold them ten days. >> i think cramer has the ceo tonight. he's out in san francisco so you
don't want to miss that. >> no. >> see what he has to say and maybe what the stock does. all right, guys, come on back this way. straight ahead, the blitz. we're trading adidas, signet, united continental as well "the halftime report" is back right after this miss the blitz, the call of the day or unusual activity with the najarian brothers? no problem just go to cnbc.com/halftime to see the moves, the trades, who's winning and who's losing plus breaking news and analysis of all the top stories cnbc.com/halftimereport.
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after the nasdaq falls more than a percent in a day, our data partners at kensho show ea and activation blizzard are a good place to put money. a week later they're up 1.86% and 1.53% respectively for more go to cnbc.com/kensho. we're back with the blitz. let's do adidas first, jimmy, on earnings. >> really there's nothing bad that you can say about this. they have grown into their
multiple, doing a massive share buyback. i sold nike about a month ago and i've got to take a hard look at adidas replacing it this is a really good stock right now. >> up 11% at we speak. signet jewelers, multi-year low. they missed on same-store sales and going to close 200 stores. that's a potpourri of bad news, doc. >> they threw the kitchen sink at it here we thought they did that back in november when they did the same thing. they warned about full-year 2018 earnings they announced a whole bunch of store closings they said that same-store sales were falling off a cliff stock was 76 back then it's 39 today. >> what's going on with baba >> their close volume is unreal, double digits, strong. they're strong you look forward and very inexpensive. i love this name i'll take this name over amazon. >> pushing $200. copper prices hitting the highest level in two weeks
we'll find out how the futures traders are playing the metals next. first we'll take you for a check of the dow metal heat map. the dow is down 232 points there it is. a lot of red on the board. we're back right after this. ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.
february now off those highs. is this move all about the industrial numbers we got out of china? >> absolutely. we found that industrial production in china in the first two months of the year increased by 7.2%, much better than expected so now it's got us back in the middle of the range, the bottom of that we saw at the beginning of december. rallied 16 days in a row, so we're right now in the middle of that range. >> they were trading about 315 now. what are the key levels to watch? >> two weeks ago we gave 304 to 299 on the downside. it held that on the upside there's a bunch at 325. we need for it to get through that for it to go higher there was fears that the chinese crackdown on heavy polluters would hurt production. that hasn't done it so far so it looks good for dr. copper right now. >> meantime we're back with a live show at 1:00 p.m. eastern time on cnbc.com >> jackie, thank you very much. we do have breaking news and major news from washington now let's go to eamon javers at the
white house for us. >> according to a source familiar with the deliberations, the president has asked larry kudlow to serve as the next national economic council director succeeding gary cohn here at the white house. the president offered larry kudlow the job last night and larry kudlow has accepted the job. we're prospecting an announcement of that formally could come as soon as tomorrow this is a significant development because, as you know, larry kudlow has been opposed to the president on the issue of tariffs, but we saw president trump say this week that larry kudlow has come around on the issue of tariffs as a negotiating tactic. so the president seems to be willing to bring in a very high-profile economic advisor here who disagrees with him on a key issue but agrees that that issue can be used to bring other nations to the negotiating table. the president has said he wants a diversity of voices in his cabinet and around him at the white house. that appears to be the case with this decision. so to wrap it up here for you, scott, according to a source familiar with the decision, the president has offered larry
kudlow the job and larry kudlow has accepted that could be announced as soon as tomorrow. but remember, the president is at a boeing factory later today in missouri where he's going to be talking about the economy he might make mention of it at that point as well so we'll watch that speech very carefully. >> big development for our friend and our colleague, larry kudlow, once this gets announced, eamon, somebody who returns to the white house to try and carry out the president's economic agenda. >> reporter: right he's a veteran of the ronald reagan white house he'll be in the donald trump white house as well. his old office would have been in the executive office building right next door, the office of management and budget. but now he'll be in the west wing itself. he'll have an office on the second floor where gary cohn has been camped out overseeing the tax battle now the question is in what direction will larry kudlow change economic thinking here inside this white house. you know his old slogan as we've all known for many years is free market -- capitalism is the best
path to prosperity overall so the question is will he offer additional changes to the economic thinking here in the white house? we've seen this increased and stepped up protectionism coming from this white house. will larry kudlow bring additional ideas to the table and will we see a more multi-faceted economic approach than we've seen over the past four or five weeks or so. >> big development out of d.c. good stuff, eamon, thank you very much for that doc, you know larry quite well. >> yep. >> you know how the market views him. in fact i believe you're on his radio show on a frequent occasion. >> yeah. >> what do you make of this news. >> love it. >> now that it appears to be moving closer. let's just say that, closer to becoming official. >> yep you know, i've encouraged him because i think he is a calming voice that will steady things for the president. the president virtually said this yesterday, judge, when he was talking about larry kudlow and saying, look, we haven't agreed on everything, but i think this is the kind of guy i need he said that, the president said that i encouraged him to accept it.
not that he listened to me, i'm sure he listened more to his lovely wife and the rest of the family as far as making this kind of commitment but he is the right guy at the right time, i think. this is a great fit administration and i won't be a bit surprised if some of this trade war talk dials it back significantly. >> he is a big believer, pete, in the president's agenda. >> he is. >> particularly when it comes to tax policy, supply sider and however you want to characterize it larry believes in that policy. he believed under president reagan and now under president trump. >> and he's been in an advisory role for quite some time and i think he is a great fit. the interesting thing will be he is not going to get shoved around we know larry too well he will not get pushed around. he will stand on his principles and work with the president which is the best way for it to be for them to not agree on
everything larry is not a yes-man >> though larry will learn it is not the easiest environment -- >> i agree. >> easiest sand box to play in. >> will he be there for four years. >> as others have learned most recently, not lost on the departure -- the firing of the secretary of state rex tillerson who openly disagreed with the president on policy. >> exactly and you pointed out in the interview with anthony scaramucci last week that there is one heck of a resolving door at the white house you are absolutely right on that we have to adjust to the fact that is the way that administration is going to run yesterday we lost a sober, speaking figuratively, a sober individual in rex tillerson but a very thoughtful and colorful and friendly to the market adviser which is what this administration needs will he last four years? i doubt it because nobody does. but thank goodness he's come in even in a different position that rex tillerson left. >> the key for many, jon, has
been since it became clear that gary cohn was leaving was to get somebody in there with the ability to not only understand the intersection of wall street and washington, but to be able to speak the language, speak to you and other people who have real money at play in the market it is a changing environment there is so many moving pieces on tax policy, on trade, on the economy. >> right. >> i agree with all that. i think larry is a great fit for the job. i think he's going to do a fabulous job of counseling the president. and i doubt if he'll come out publicly against the president at all i think that will be behind closed doors, scott, and that is more or less where it should be. i don't think the fights should be out there in the public and they should discuss it behind closed doors and come out with a unified voice. >> let's go out to san francisco to the other half of what was cud le and cramer at one time on this network jim, you were the one the other day who said your sources were
telling you that kudlow was the top candidate. now it appears he is getting the job. >> well, i've got to tell you, larry, as an old friend, we argued every night and then we fist pumped at the end of the every show. we saw nothing eye to eye. nothing. and yet i loved him. and i like to think -- and i believe he loved me. and that is what kind of guy larry is he's a gentleman he argues tough and he arg use hard and argues rigorously but at the end he's a consensus guy and that is good for president but the hawks did lose scott, the hawks did lose. >> did the marks win, jim? >> i think that the -- capital won over labor the stock market is basically a market that likes free trade, not fair trade i believe larry has in the last month moved close to the president on fair trade which is
goad e code for we have to stop the chinese from targeting our industries he did back the president early on but yes, the markets won if you want to believe that the markets need free and unfettered trade without any regard to who works here and what industries are being hurt. >> but how important was it to you, jim, and the people you talked to, whether it is ceo's or other money managers after gary cohn left to have somebody with the market chops like a larry kudlow. >> i think that it mattered tremendously and i think there is a lot of belief that the direction of the new trump team is about fighting a trade war, fighting back at china. i don't think that larry -- look, larry will fall in line. he's working for the president he's not a freelance guy whatsoever but he is a ronald reagan guy and ronald reagan stood for patriotic proamerican views everywhere but did not alienate
and spoke softly and carried a big u.s. stick that is what i think larry will advise the president you'll get more done by being softer i don't know if the president has a softer style but larry, again, is a gentleman. now does that mean he won't stab you? i'll say is he'll fight you. but in the end he wants consensus. >> i'm looking at twitter here, jim, and our friend ben white of politico is saying the president offered larry the job over the phone last night while larry was dining at chip renny in manhattan and he accepted and will start asap. that is from ben white, frequent guest on the network who we all know well. >> the chip angle. i spoke with him over the weekend. and vetted him repeatedly with a lot of different people. larry is a loved figure. why? because larry is so gentlemanly in the way he argues that you -- he's hard to hate.
he's just hard to ate -- to hate and i went at him every single night. i can't remember what we agreed on i didn't even like chipriani. >> and maybe you could take this appointment as it is -- it appears to be announced, that he grew up if you will as a businessman in new york and in many ways grew up watching people like larry kudlow himself on this very network so there is a familiarity on this path of policy now together >> well, look, i think that having larry out there on tv -- i won -- i wouldn't put anybody else out. larry can talk on every issue and a fabulous speaker when you talk with larry, as we know from the network, you always feel better after you talk to him. now there are people -- and i'm from this camp -- that believe that the chinese have had the
run of the joint and if we continue to let them do that, we'll lose in technology and lose in industry i think larry has to embrace that view in order to be able to get along with other people who surround the president but when he is on tv, he comes on at -- at 8:30 on the labor number, you will sit there and say, yeah, that is -- you bet. because that is how larry is you feel like agreeing with him even if you don't. and that is a very powerful concept. >> jim, we appreciate you jumping on with us we know you're busy. >> and i love larry. look, i'm -- i love him. he was my partner. i love him gotta say that. >> well there are a lost people in this building that feel the same way have a great amount of respect for this larry as well we wish him best can't wait to hear from him in his own words what this is all going to be about. jim, thank you we'll see you tonight at "mad" at 6:00. >> and let's bring in michael
farr who told us this would be the right choice, the choice he would make are you there? >> i'm here. thanks for having me back. >> we've already recounted sort of larry's famous saying, free market capitalism, the best path to prosperity. the real challenge, if you want to call it that, for larry at this point, is getting the president to fully buy into that. >> it will be. but i think that the president understands that the free market concept. i think that he clearly struggles with protectionism and i think he struggles with a base looking for a more american message. i don't think you can -- you're going to find anybody better than larry kudlow to deliver that american message. remember larry's other two points, king dollar so he is looking at the strength of the dollar and not watch that fade off and fall off the abyss and that earnings are the mother's milk of stock prices over time so larry gets it but to me, scott, the thing that is really important about larry is he's been through the reagan
white house. he knows his way around the west wing we have this huge increasing deficit, we do have these protectionist strains playing in the background and i think it is really important that he knows how to walk into the oval office and say, mr. president, this isn't working. and he can do it diplomatically. and we've all been on the other end of a difference of opinion with larry and to jim cramer's point, you do come away saying -- i know the guy doesn't agree with anything i say but i still like him and sit down and talk with him again. that is a remarkable talent. >> good respective we'll keep it brief. thanks for calling in. we'll talk again soon. michael farr from washington joining us there on the phone. around the horn. we continue to digest this but final trades for the folks who want tock names before we get out. >> i'll give you igt international game technology and they are buying upside
calls. >> monsanto. buying calls in this one today. >> and retail is a sector that most people hate but within it there are winners and dick's sporting goods is one of them. that is one to own. >> we're going to send it over to "power lunch. dow is down 242 points more reaction that president of the united states is expected to name larry kudlow as the next nec director according to cnbc sources. let's send it over to "power lunch. >> welcome to "power lunch." i'm michelle caruso-cabrera with tyler and melissa. we begin with breaking news in d.c. president trump closer to naming cnbc larry kudlow his next top economic adviser let's discuss, guys. joining us on the news line is -- cnbc contribute jared bernstein, economic adviser to joe biden. jared, what do you think >> well i have a ph.d in larry kudlow so i'm thinking a lot about this i've been arguing with him for 30 years intensively, literall