tv Fast Money Halftime Report CNBC May 22, 2019 12:00pm-1:00pm EDT
since november of '17. >> yeah. big moves on the heels of earnings with lowe's and nordstrom also down. >> and pure storage down more than 22 on the miss and lower guide. fed minutes going to give us a glimpse. let's get to the judge carl, thank you. i'm scott wapner, as goes apple, so goes stocks, shares falling again today, new warnings about the company's exposure to china. are earnings now at serious risk it is 12:00 noon, this is "the halftime report. >> announcer: apple's china trade war troubles just how much risk is in store for this stock, which is down 10% in a month plus, the return of morgan stanley's former chief equity strategist, adam parker, who believes that trade war is not priced into the markets. and wait until you hear what he has to say about the state of the great american consumer and
target nails the target. the stock is jumping and the halftime investment committee is buying in. should you "the halftime report" with scott wapner starts right now. >> welcome, good to have you with us on this wednesday. here to debate and trade the big stories of the day, joe, pete, jon najarian adam parker, the ceo of trivariate capital management, lp let's begin with the markets, zero in on apple today goldman-sachs cutting the price target to $178 from $184 also offering up fresh concerns about how much earnings might be at risk if the trade war gets worse. pete, i'm turning to you on this they cut the price target. does goldman-sachs they're talking about -- if there's a, like a retaliatory ban because of the huawei thing, they're looking at a possible eps hit of 29%, more than $3 a
share. your favorite analyst, katy huberty of morgan stanley out today, worried about additional tariffs being a $3 hit apple's going to have to absorb the cost, which she calls the most likely scenario how big of an issue is this? >> i think it's a pretty big issue, obviously i think this is something that can't be looked past because of the fact that we don't know when and if we're ever going to get to the point where we need to get to in terms of this trade war so will there be some retaliatory sort of moves? i think we will, scott so we already know this. we know that earlier on, when apple went over there and priced their phones as they did, that was a major issue for the stock. and obviously, they had to come back down with the price who's going to absorb it now that's something that katy gets into, do they still with the $160 more for the phone. >> they're going to have to absorb it, right >> you would certainly think so. >> the phone's already expensive. >> i totally agree with you. so yes, there could be a major impact to apple when it comes to that now, does it still seem like it's -- i think, quite honestly,
that it's already priced in some of that based upon where it was before, scott, when there was a $200 plus stock to where it is now. is there a lot of downside i don't view it as an incredible amount of downside but certainly some >> weiss, you worried about the position >> i think it will drive price elasticity and they'll be able to make it up. of course i'm worried about it hitting a market that was completely saturated the next phone was so much of the press talking about 5g, i think that you're going to put off buying habits until 5g comes out. and apple, of course, is a little behind the others in 5 governmentg. however the way this quarter's going to shape up for tech overall is you're going to see massive supply chain loading in advance of -- that's by huawei and others in china -- in advance of the bans coming on. so, the trick is, not to get deluded by that and think it's
i'd probably look to if it goes down to $175 or $178 >> this is one of the reasons you think the trade war is not priced in. you can't figure out what the worst case scenarios really are, can you? >> i think it's at a market level, the s&p's maybe 3.5% down from its all-time high, the vicks is at a two-week low, we've been in this ban plus or minus in the s&p for 11, 12 days so there's a little bit more stability at the market level than maybe a trade war that's heating up would otherwise indicate there's stuff happening underneath, for sure and there's dispersion and i think you can make money long and short in individual names but the market's a little bit calmer than i would have thought it would be and i think earnings expectations not just for apple but for the broader market you're seeing that in the guidance where ceos, why would they give you aggressive guidance into the fall now >> how important do you think apple is in the big picture. >> i don't think tech as one big bucket i know none of these guys do i think you have to think about software and semis and other stuff very different apple is about phone replacement
cycle and it's about that services business, which has been on fire it seems like both would have slowed a little anyway independent of this. >> they are. >> you know, trade war so, but a lot of that could be priced in. certainly not involved but i would say i don't see how -- i liked your joke about i don't see how it's not about pricing for them they've got to cut pricing of the phone. >> i think the bigger issue is, rather than is deal priced into the market, is it -- what happens if the deal doesn't occur? is that priced into the market and with the numbers that you cited, 3% off the highs, the market -- i wouldn't say it's complacent they don't know what to do so if you don't know what to do, you just basically do nothing but clearly, if you move out past, i think, the end of june when xi and trump are meeting at the g20 and nothing happens or you get more negative news, the market takes a big fall down >> i think there's risk, though, too with a company like apple that the more prolonged this is, and the nastier it gets, that you might end up with a
situation where chinese consumers sour on american brands and don't want to buy them so that also could hurt a company like apple that's, you know, really reliant on selling products to the chinese consumer >> no one feels like there's been any level, joe, of complacency around the apple issue. yes, we've made this move against huawei i don't know of a whole lot of people out there saying, oh, you know, there's going to be a backlash now, they're going to stop buying apple phones, it's like, well, it's going to work itself out well, the tariffs are hanging over the market a little bit, but they're going to work something out. the additional tariffs aren't really going to go into effect well, what if both of those worst case scenarios happen, you get some kind of ban of apple products and you get additional tariffs. just when you think things aren't going to happen, it's been proven out that they actually have. >> exactly well, let's put it this way. what's the probability on a ban? does anyone know the answer to that no that's the great unknown if a ban was to occur, yes, i think all of us would agree there's going to be a hit to eps
as it relates to apple i also think within the goldman-sachs note they bring out a very good point and i think it's a mistake for people to think that very quickly you could take production volume and move it out of china so quickly and i have heard that often and i don't think that's correct i think that is a slower process that's more like turning a battle ship. as it relates to the apple note and to your comments, though, just think about the variety of the change in sentiment, so the goldman analyst just one month ago raises the price target from $140 to $184, why? because tim cook is on the conference call talking about how things are going well, things are getting better in china and now here we are three weeks later talking about a complete ban so, the last point and i think this is the important part of the tariffs, is understanding the real problem and specific to the consumer, is going to be if we place tariffs on the remaining $325 billion the first $50 billion that was machinery, industrial equipment, the next $200 billion, yes, you've got some consumer
products, but you go to the $325 billion, and that encompasses the bulk of consumer goods and that's where it becomes an issue >> i was just going to say, i mean, i wouldn't -- i only worked 18 years on the cell side but i wouldn't marry myself to the price targets too much they tend to turn the fasten seat belt sign on after it's turbulent so i think you want to, when you own growth stocks and you own tech stocks, you don't want the sell side to love it and be raising the target so i have some sympathy for they take it down a little bit and you can have an opportunity to get it >> scott, when you asked a good question about, well, what do you see going out past june and so forth, we've got a lot further runway than that, because of the 90 days that he has put out there, the president, in two different occasions. so, extending it out, june, could we -- to steven's point, have a positive or negative or nothing out of the meeting with xi jinping of course we could and any of those three scenarios, neutral, bearish, bullish, could happen at that point. if nothing really happens, then
i think july and august are more in play, people will be more in focus on it into the fall rather than just at that specific moment is my thought, steven, and to the apple point, scott, there have been people aggressively buying puts in this stock, my biggest holding, so i have a lot of puts against it, since may 1st. they started buying the $190 puts when the stock was $209 they were buying the 190 puts. so $10 out of the money, $20 out of the money, they were buying aggressively at the $200 strike and at the $190 strike, now the stock's at $183. this would not be the time that i would be exiting the position. i'm not selling my puts yet but i'm very close because basically at $180 or $178 was about where i thought we would get it's not written in stone that we'll get there. but if we do, that's where i would basically take the profits on the puts and flip over to a more bullish position in apple >> one thing we're trying to figure out is how much does the market need apple to perform
we've seen most recently when apple's been down, the market's been down, when apple's up, the market's been up it's so widely held. >> but i don't think that's necessarily true anymore i think the bloom's off that rose in terms of being a market leader true, it's still a big part of the index and adam can talk about that in greater detail, but we saw apple and its decline down to $150, the market was still moving higher. so, i look at apple, if you take the chart -- if you take the names off the charts of nvidia or apple, you would see the same exact pattern, right both stocks moved up without any really good news the news wasn't as bad as originally advertised, but the news definitely wasn't good as we saw services growth rate slow, still growing, and we saw sale, you know, phones of sales come down. so, look, i think the best way to play this is to, if you can, and the problem is most people come on this show have to be long and have to be fully long, there's no flexibility, but if you can take at risk, you always talk about, you know, buy in volatility so you buy or sell in
volatility, in this case, you sell it. so, i'm not -- you know, i took some risk off the market as i mentioned before, i'm just not comfortable going in there these are unanalyzable bets. we can make a great case, it's why china has to, as to why we have to, the facts are it's going to drag on and then the final point is, then, two weeks after the meeting in osaka that may or may not happen, you have the heart of earnings season and are those ceos going to come out and be extremely bullish no, they're going to give themselves room. and that's me as the delta on the market >> i'm not a huge believer that, you know, apple and the market have to stay tightly correlated. i think if people sell apple they go into other areas or keep going to winners software's up, what, 24% year to date i did some work recently, the 50 most crowded names by hedge fund managers have just had their best one month performance in like eight or nine years so people sell and go back to the winners that are growing and our work shows the more that happens, the more careful you have to be, you get that situation to where when they beat they're up six and you're
starting to see a little with that in the market with retail so i worry about people sell apple, crowd into more software, ride it up, head into the summer earnings season and then you get some real bumps. >> and steve talked about unanalyzable events, right that's exactly where we are right now. you're 100% right. but the tradeoff of that is, look where the volatility index is trading when you get down 15 or below and we were talking about this just yesterday, that's the time you're buying protection or you're replacing stock replacements because usually when you're getting that low you're seeing the market go higher, you can maybe take off stocks and put on positions in the options so you can do a stock replacement as we call it or on the upside you're buying stocks when the stock's getting hammered and selling upside calls at a 22 vicks or something like that, scott so it really might be very difficult to analyze exactly how the events are going to play out, but you can certainly see where you can look and when you think the buy time is and when you think the sell time is >> one thing i think we can say is that without technology performing well, the market's going to have a problem,
correct? it's such a large part of the s&p. >> and you saw that q4 >> that's right. so are you concerned with the way semis have traded most recently >> they had a multiyear run that was fantastic and now it's -- there's inventory issues and, you know, look at micron or other companies that i doubt in mid june or late june when they report they're going to say things are awesome they get a huge chunk of business from china also so despite the fact semis have really lagged i don't think you want to be piling into the most sensitive parts of the market on the trade war. >> unless you want to make the bet that they're going to, you know, that there's going to be so much tightness on chips that huawei and the others come and buy a boat load of micron products and others and then you get the trade agreements and then you see the growth going forward. >> let's not forget too that semi sales have been slowing, you know, regardless of the trade war. >> right >> it's not like everything was rosy >> they stockpiled like we were talking about last week. >> there's a lot of crypto in the numbers. >> nvidia, up to last year,
there's been some underlike issues, intel has had some demand issues and i don't want to put them all in one bucket, you have different types of semiconductors but generally they've lagged in my mind about the appropriate amount so far and maybe not even enough. so the fact they're down a lot recently doesn't mean to me they're like a great buying opportunity. >> but it's about the outsize sales exposure that they have to china, 48% sales exposure the overall s&p has 2% sales exposure so i think it's the pricing out more than anything else of what we believe 30 days ago which was what we were going to get a resolution. the s&p -- >> it's not like the global economy's ripping, joe >> absolutely not. but the s&p topped on, what? was it on the trump tweets related to tariffs or was the day that the federal reserve came out and said, oh, you know what you're not going to get the price -- the cut that you're expecting for the market >> i think also, you know, one thing that we're not taking into consideration here is just looking at or we are taking into consideration but i'll say it's
really important issue here that the trade -- the trade war used to be about steel. it started there but it's morphed into the biggest sector of our economy that's driven a lot of growth, 57% comes from overseas sales, the s&p 500 tech sector, that's huge, so if we get some slowdown and particularly if there's not a pickup in the back half, which there's large expectation for the semiconductor sector, there's going to be this second half pickup. if that starts to come into play that that's really not going to happen, i think we run the risk of earnings coming down for the back half of the year and the market now is pretty fully valued, using the current 2019 earnings estimate so i think we could get a further downside from here even if there is some resolution but if it takes longer than we're anticipating >> let me just break away from this conversation for just a moment, get down to washington we have breaking news. >> reporter: scott, house speaker nancy pelosi and senate
minority leader chuck schumer just speaking to reporters about that contentious and very short infrastructure meeting at the white house. pelosi said that despite having agreed to an overall number for an infrastructure plan, despite having agreed to priorities for infrastructure, when they walked into the meeting with the president, president trump, quote, simply took a pass. chuck schumer said that when it came time to make the hard decision about how to pay for infrastructure, that's what this meeting was supposed to be about, he said that president trump ran away he said that democrats have come in with a 35-page plan of how to potentially pay and fund infrastructure and the president was not interested, that he had planned to derail this meeting from the very beginning. that's why they were preprinted signs on the podium in the rose garden for the president's press conference, and so while everyone expected that the roads and infrastructure agreement would be a rocky one, certainly this environment in washington has become even more politically
charged and that raises questions about sensitive discussions that are currently under way over how to fund the government past september, over how to raise the spending caps and perhaps most importantly about raising the debt ceiling those conversations have been moving forward in a productive manner but certainly the acrimony that we saw today could throw a wrench into those negotiations as well, guys >> we may have gotten a whiff of all this with the president in the last few days saying that, before infrastructure's going to happen, he wants the congressional democrats to pass the new nafta. >> reporter: right i mean, chuck schumer pointed out there's been roadblock after roadblock sort of thrown into the agreement at the last minute first it was, you must pass the usmca, that came out in the letter earlier this week, and then it was you must stop all investigations before he would consider negotiating on infrastructure and just this morning, house democrats had a caucus meeting in which they discussed the path forward on
those investigations, the possibility of impeachment it sounds like nick paton walan holding the line in not moving forward with impeachment for right now but instead they're using a term, cover-up, which is their new lingo for describing the the president's actions so there is pressure amongst democrats on the hill to be tough on the president and to make sure they are holding the president accountable and that is the backdrop for some of the debates over these tough bipartisan bills that are clearly not getting off the ground >> thank you very much giving us that update in d.c not to really get into politics all that much but how do you think about just what's going on in washington, what sort of political risks are within the market or not >> i've learned that it's not super correlated to what you think is going to happen i remember right before the obama second election everyone thought if he wins the market's going to stink and it ripped in 2013 and if trump wins it's a disaster and -- ultimately, you follow the path of earnings. the reason the market sold off
last year is because earnings expectations peaked in june and went from 18% 12 month forward to 2 where they are now so that's what happened in q4 so now the question is can they grow a little bit in the second half or is this trade war and uncertainty going to suppress them so i think it's kind of balanced 50/50 i think if you're running a fund you should be about your average gross and net right now and then look for opportunities to change but i don't see why i'd be super bearish on it but i also don't think politics means x, y, z i think it's too uncertain >> even with the trade issue out there and the acrimony in d.c., the fed pivot, the powerful nature of that, the way it had a obvious and dramatic impact on the stock market >> i've learned over the time the bond guys always say they're smarter than the equity guys but what i have learned is that they were all saying three, four more hikes six months ago, now we're at two cuts. i will have to change how i'm
thinking about different sectors in the market. i think that will really change the microstructure but right now i'm of the mindset you're going to remain in the nothing zone for a long time. i think that's my base case for the next three to six months is do nothing either way. >> the power of the pivot itself, did that put a little charge under the market again? do you think that carries? >> i think it did for a while until we got some of this uncertainty. my personal view is going to two cuts as the base case is too extreme with the strength of the unemployment data and where we are with inflation i think it's probably more balanced to wait and see and you have to see a bigger degradation to get people to really start easing >> yeah. let's talk qualcomm. it's pacing for its worst day in two years after a federal judge ruled the company violated antitrust laws jim lebenthal has owned that stock since 2017 he joins us now on the phone to tell us what he thinks about this big news and jim, you know, every bout of turbulence you've
been sticking with it. now what >> i'm selling it. i've already sold it this morning, scott, so that's obviously a big change but the facts on the ground have changed. >> the whole position. >> the whole position. if you're a value investor, you have a thesis that usually relies on a mote to competition. the mote to competition here has been the impregnability of the intellectual property portfolio at qualcomm. this judge's decision really ruins that mote to competition and yes, qualcomm will appeal but that will take time. i can't stick with the name at this point in time because i'm expecting more lawsuits from other countries and from other companies that will be emboldened by this lawsuit -- by this win now, scott, if i may, i'd like to tie this into the bigger picture that you all have been talking about with regards to apple and with regards to china. may i have a moment to do that >> go ahead. >> okay. you know, we were on -- >> after that preamble, how could i say no >> how is he going to say no >> he makes me look so bad by being polite >> we were on together on monday
with ron and we were talking about this trade war being a military aspect here and i want to point out that the department of defense, along with the department of energy, petitioned the ftc to not pursue this case against qualcomm because they know that the military battle grounds going forward, it's not going to be the deep oceans of a tax submarines against other or the open skies of bear bombers being tailed by f-15s. it's going to be ships it's going to be cell phones this is the battle front of the 21st century, and we have taken our best warrior, the 5g leader in the world, and we've just shot a torpedo into the mid ships. i've never seen anything like this we're saying we're going up against the chinese and we're going to win in 5g and we've taken qualcomm and really gutted their intellectual property rights here. i want to say one other thing. we were talking about apple and i was listening to everybody say what they were saying earlier. apple's no babe in the woods
here they have a lot of responsibility for what's gone on here today. they incentivized the ftc to take this case, they were the lead example in the trial of where it was presumed that qualcomm had monopolistic power. apple is in a war with china as well and they've just gutted one of their allies. i don't like anything about this but regardless, the stock is too hard to own right now. >> yeah, i mean, normally, you know, let's take a look at an intraday if we could of qualcomm i think the stock's around the lows of the day. normally somebody like you, jim, would say, you know what, i've seen this movie before, there have been antitrust issues, there's the fight against apple, et cetera, and somehow it always sort of gets settled whereas the old jim may have looked at this and said, this is a huge opportunity to get into these shares, i still believe in qualcomm in the long-term, and you're not saying that today >> no, i'm not and thanks for bringing that up because i think there's an analog here if you go back two years ago when the ftc case was
first brought and the apple case was first brought, the stock went down and languished for most of the last two years until the recent apple settlement. i do expect that qualcomm will eventually prevail but it's in the penalty box for quite a while now not because of their own defaults but because of this legal ruling so you've got time to wait here >> anybody want to opine on what jim -- >> i think jim's right >> this is one of your bigger positions, i believe >> because jim, as you say, when a federal judge basically comes out there and says, scott, that they must renegotiate, because that's what i believe she said, you must renegotiate, judge koh or something like that, k-o-h, when she said that, that's something that really causes the value of those patents of their intellectual property to diminish greatly versus where they could have exacted a much higher price from apple, many of us had priced in that much higher price, so the fact, jim, that it's down here now and that you've got a federal judge, i mean, who's going to overturn
that at this point that's a long road >> jon, if i may, you make a very good point. yes, they have been told they have to renegotiate. there's such a thing as renegotiating from a position of power. this is not it they are renegotiating from a position of weakness >> true. >> and anybody on the other side of the negotiating table knows that fully well. now, look, in terms of scott, to your comment, well made of, geez, the old jim or a value investor would typically say i loved it at $85 and i love it here down at $70, there are bullish cases to be out there, that maybe the government and led by this particular president, might do something from an executive position to turn this around, because really, if we are going head to head with the chinese, this is not the way to win that war and i think our president will recognize that but i cannot and will not invest on that premise. that is way too flimsy a premise on which to invest >> yeah. jim, i appreciate it very much >> thank you, scott. >> thanks for making your way to studio, coming on to talk about this you know, therein lies some of the risk that's out there
you know, stocks that have had a big move, remember qualcomm's move after the settlement with apple. and here we are, making a sudden reversal >> yeah. my strategy whenever there's a lot of legal elements to it that i can't analyze, we just have fundamental filters to remove those so it's more on a discipline approach, build models for predict return, not worry about where we are at inflection points and do the fundamental filters, i'm going to avoid things that have a huge legal element all day long, you can't get an edge unless you're really an expert >> let's sort of go full circle, bring it back to the broad market areas of the market that you would maybe venture into now are what what looks attractive to you >> i like this healthcare rotation we've seen a little bit. this does really lag year to date it's acted a little better the last month if you like innovation there's some undervalued things in boy tech, boston and all the sectors are on fire in the private market there, you know, i think
you have some growth that's trading at a discount to the market there in services, so i kind of like that little rotation, especially with the ten year now below 2.4% so some of the yields look pretty good you know, i think you could have this nice trade where some of the big banks look a lot better than the mid cap banks i like the fact that they're discount ago much higher probability of a recession than, say, the broader market, you know, cheap, return a lot to shareholder, i get mna is light and volumes are down but it feels like if things end up being okay things are too cheap so there's areas to go into for sure i just am probably most cautious on these really crowded tech names that if they miss they're going to go down a lot and i would say some of the retail stuff you started to see unfold here still doesn't make a lot of sense to me until they actually do lower fed funds >> though some of the retailers are saying, tariffs are fully priced in with our guidances, look at what target delivered today in terms of results but
you say avoid discretionary stocks >> not across the board. i mean there's a lot of idiosyncratic risk there, if you look at the preponderance of it, you're missing, you're down 9 or 10 and we've got 3 or 4 of of those happening whether it's kohl's and yesterday, you know, nordstrom. >> lowe's. >> that looks like a nordstrom tie, for example might be the only thing sold this quarter so, i mean, i think it's more risk reward and idiosyncratic but broadly i don't think i want to own those when you have wages and tariffs and other things that are going to hit their margins. >> joe, you want to take the other side as someone who has argued this week how great the consumer is. >> consumer is fine. consumer spending was, what, 1.2% in the last quarter, it's going to double. consumer's are afraid to the recession and afraid of oil prices you mentioned before the federal reserve. oil is up 40% in 3 months too so that could hurt later and i think that did hurt in terms of looking at retail sales and seeing autos in april, that's why you saw the weakness but i
still believe that the consumer is in a good position. i don't think they are going to change the behaviors unless we're talking about $325 billion and we're basically taking all the consumer goods and we're slapping a 25% tariff on that. you could have a consumer that's going to react to the headlines but consumer behavior historically reacts to headlines and what thinks toirkly has been in the headlines have been recession. >> some of the headlines have been xyz company is raising their prices tooff set the tariffs that are already in place. that doesn't have any effect >> there's confidence in the c suite that they have the ability to do that i think that's why the walmarts and the targets are talking about that their confidence, they're talking about in their guidance, they're incorporating the tariffs on the $200 billion and the potential price increase, so there are survivors in the retail space there are survivors in the retail space >> i agree what are they going to say >> i would say, look, i don't
disagree that -- i don't think we're going to be in a recession and the u.s. consumer has to be much worse so that element i'm on board with but just like i said earlier, we all know management's don't have great guidance okay and so -- and those two things are correlated so what else are they going to say? i think readjusted for it. by definition, even legally, you have to say your guidance is your best current guess, when these miss and lower it the stocks are going to go lower >> and managements are looking out and boards are looking out years. investors are looking out minutes. >> i'm trying to thinking -- >> tweets. >> are home sales ripping, are auto sales ripping, is apparel ripping? >> that's been -- that's really been the issue, that traditionally, when you have seen a booming economy and a booming market, the pillars have been auto sales and home sales and we haven't had that for a while. >> different economy, right? >> yeah, completely different economy and could be different reasons. >> it's all about execution. when it comes down to it, who's executing now and who's not? >> target's executing and some
of their competition, nordstrom, absolutely not that might have been the worst earnings report i have heard from any company ever. i mean, it was absolutely -- they talked about how they were wrong in merchandise, they were wrong in digital, i mean, they were wrong in every single category and it's like you're looking, going how could you be this far off and meanwhile you look at target, their digital sales are higher, every single metric, there's growth, growth, growth, growth, and so it comes down to, are you executing right now or are you not? and do you have margin -- do you have the ability to raise price to be able to hold on to some of those margins. target's margins did come back very, very little. >> joe bought it earlier today >> he told me he's going to sell it >> i might have to sell it i'm getting a little bit nervous about that >> are you serious >> no, i'm not serious it's still too cheap >> cornell almost fell over in his chair. >> brian and i will be talking this weekend >> i'm sure you will that's why he almost fell over in his chair pete's selling >> not selling not selling.
i sold calls against it, though. i will say that. >> i think you do have to be careful, though, because despite, you know, best -- despite having best execution, if your prices are going up and your customer is sensitive, like the walmart, target customer, you're likely to see some impact there. historically, the walmart customer have been very sensitive to price increase, especially on things like gas but if you look beyond that, they're buying more than just gas so prices are going up >> why can't the outcome be that everyone perceives this to be inflationary, steve liesman will tell you this thatat this possis the opposite effect where it becomes deflationary >> yeah, i don't see that as my base case argument but i know economists can, you know -- >> that's adam parker's no >> i work with a lot of economists some are right, some are wrong >> he's been on the show enough over the years that's -- he's being nice. >> can i answer it for you no chance. >> that doesn't make a ton of sense. thank you. >> let's get steve liesman >> well, yeah, i just -- one
thing i'll tell you, a couple years ago, i did this work, i got a bunch of people like this and i said, what do you want to know a year from now and unemployment rate, fed funds, we went around the room i took all that data, back dated over the market and pretended a i knew that stuff and i was still only 50/50 on whether the ratio was up or down so i think this is short-term noise you got to focus on the earnings trajectory i don't see an argument this improves the earnings trajectory >> you could have a deflationary environment and a consumer who's still tapped out >> i get it that we just inherently disagree. you disagree with my view that the consumer is strong you continue to play that. i get it >> i'm not saying the consumer is weak but there's a fair amount of evidence -- >> if you think there's deflation, you should be more negative >> absolutely. >> i don't think there is. >> you just said get leasemstev liesman out here >> is it a bull or a bear
market >> replay the tape >> the sky is blue, no there's a cloud up there >> putting words in my mouth as usual. >> i said people like steve liesman will tell you. you did say that, right? you heard that >> he did say, steve >> he did. he wants to call liesman out here to make his case. >> i'm not making the skcase >> deflation is bad. we got some puts >> parker knows what's up. >> adam, scott's got a view. >> let's leave him, man. >> stay with us for the rest of the show what the hell. all right. here's what else is coming up on "the half." >> announcer: just ahead of the unofficial start of summer, one analyst gets bullish on a classic summer stock that's next. the najarians are on deck. they both found unusual options activity jon and pete have both made calls in the last week that doubled or tripled in days see what they see now. before the break, how target fares after jumping 6% or more in one day
our data partners at kensho showed two weeks later, it's higher 100% of the time by an average of 1.23% for more, go to cnbc.com/kensho. " thcoalftime reportwi stt wapner and the traders is back in two minutes (indistinguishable muttering) that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade.
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he added that he had told her and senate democratic leader schumer, who had gone to a meeting with him on infrastructure, that he could no longer hold a meeting with them. >> i want to do infrastructure i want to do it more than you want to do it. i'd be really good at that that's what i do but you know what? you can't do it under these circumstances. so, get these phony investigations over with >> eli lilly announcing its own generic version of the company's top-selling insulin. it's now available it is called insulin list pro and is being sold for $137 per vile or $265 for a five pack the company is still selling the name brand, which costs about $275 per vial. nascar is buying international speedway, which owns some of america's most well known car
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we're back the chinese internet etf on pace for its sixth negative week in the past seven options traders are betting that streak continues jon and pete are at the telestrator for unusual activity that must mean they don't think the trade war going anywhere positive any time soon >> not in the short-term anyway, judge. take a look at this. as you say, it's come from 45 up to 50. that was the end of april and then straight down since then. so, what are we seeing people took a lot of profits, they owned the 46 puts in kweb, now they're buying 9,000, nearly a million share equivalent of the 41 p$41.74 i know it's an odd strike but that's the put strike they're buying, they bought them in big numbers, i bought them too, i'll probably be in these until about the first week in august or so >> thank you, doc. pete, what do you got? >> freeport, we haven't seen this in a while, the july 10
calls, 4,500 of these were bought today, very aggressively, positioned to see if this stock can't spike to the upside, we're pushing closer to 8,000 of these calls. they're just in the money stock was trading just over $10 a share. i got another one that hit as i was walking over here. kmi, this is a stock that i have owned for a long time, i'll be in these calls later on but kindergartener -- richard kinder continues to buy that stock, and today, they're starting to buy these july calls to the upside as well, so before i -- right before i walked over here, i saw these calls trading. get aggressive these july 21 calls, 8,000 of those, those are going to continue to go higher, i expect. >> good stuff. because we have a viewer question coming in on uri, otherwise known as united rentals. we're going to get after that one next, plus a few more. you have time to reach us on cnbc.com/halftime. you can tweet us we're back in two minutes. bye snowball.
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guggenheim >> it's clearly defensive play, it's not a fast grower, they expect growth to accelerate by 10%, 20 over 19, still got to get through '19 where it's flat. i think it's okay. it's a defensive call in this environment. beer sales haven't been great. you need a very warm, hot summer to make it -- to drive it. >> they stay with $103 as the price target by the way, this replaces coca-cola, pete, which you own >> still own coke, own pepsi, this is a name i'm going to look more deeply into just like decker yesterday they've got the better organic growth right now than coke or pepsi. and so based upon that, and you look at the p.e. and they do have some growth, their revenue growth looks okay, i like what i've seen out of this company, does it go to 103? i don't know about that. but $95, sure. >> now let's answer some questions. weiss, you're up first united rentals, in case you didn't know that was coming. jerry in chicago, thank you, jerry. what happens with uri and infrastructure legislation over the next year, which the president today says is dead unless the democrats call off
all the investigations >> well, to adam's point, i think it's a mistake to bet on anything political or legal because it's unanalyzable. as i mentioned on the show last week, i had sold some of my positions, still some left because it's incredibly cheap. however, deere reported bad numbers, farm equipment's not doing well their biggest industries are oil and gas and chemicals and not really in the farm equipment industry but look, things are slowing unescapable. so that's why i shaved some. still cheap. >> brenda, exxonmobil from tennessee. dead money here? that's the question. >> yeah, i think in order to make a case for the stock to move higher from here and it's just i'll say that it's actually perform performed in line with the market despite fundamentals that haven't been great we need to see asset sales and paying down debt if you want to own something in the majors, i actually think chevron's a little better bet here they're getting a billion dollars break-up fee from walking away from the anadarko acquisition and i think that's a
better bet >> doc, for you on he can, calls or puts. >> calls i said last -- i meant to say it last week on the show but we got extended and i basically used it as my final trade. unusual activity in the xlv, that's a broad healthcare etf. i brought it i think this one goes etf. i bought it. i think this one goes higher. >> okay, thank you copper prices trading around four-month lows. mow futures from the crude is up next or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life.
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welcome back to "the halftime report. this is futures now. copper trading at its lowest levels since late january. this is global growth fears and trade war tensions sending demand for the red metal tumbling let's bring in our traders now scott, let's start with you. copper is down 10% since april what's the next catalyst here for the metal? >> i think that's the question it has to be trade but the fundamentals for copper are horrible now it's going to be at least a month until we get to the g20 and any resolution for the tariff battle that's going on right now. existing home sales here, that was disappointing. that's not going to help copper. last week we got horrible news out of china as far as industrial production is concerned and we're still feeling the hangover from that then you add the fact the dollar's been really strong and dixie is above 98, that hurts
all commodity prices, copper as well as crude oil, which is also getting killed today. >> scott, thank you. anthony, let's bring you into the conversation, looking ahead, what are the technicals telling you about where copper could get next >> right now i'm calling it the trifecta trouble scott covered all of those levels that i was talking about. we broke the 200-day we averaged four sessions ago, broke through the 50 and 21-day. i don't see a lot of support in this market until we hit the 263, 262 which is about 2%, 3% below where we are now. >> that does it for us, scott nations, anthony grisanti, thank you. for more on copper, check us out online at cnbc.com final trade with the "the halftime report" guys next this is my headquarters. this is where i trade and manage my portfolio.
since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you. dear tech, let's talk. we have a pretty good relationship. you've done a lot of good for the world. but i feel like you have the potential to do so much more. can we build ai without bias? how do we bake security into everything we do? we need tech that helps people understand each other. that understands my business. we've got some work to do. and we need your help. we need your support. let's expect more from technology. let's put smart to work. ♪ ♪
is 75% liquidity is in the u.s. >> your microphone fell off. let's do this. ly i will do this way and we will come back to you. >> final trade for me will be disney i think they're absolutely clicking now with the combination of disney plus and hulu and good friend of mine telling me everything's going their way. >> doc >> sc, digital financial services edge up. >> cme group, if we see a pickup in volatility with all of the uncertainty we have in the world, we think they will be a beneficiary. >> all right >> buy target, sold marriott. >> interesting so we have about nine seconds or so >> i don't think our viewers heard any of that. >> i like the u.s. more.
all of the liquidity's in the u.s. and i think europe is more for vacationing than stocks. >> you don't think things have bottomed or improving, w.a.r. may be better there than here? >> i think you don't have growth like in biotech you have in the u.s. so to me if we get a big rally, the u.s. is going to participate pretty fully if we get a huge global sell-off, the u.s. will probably hang in better i don't see the need to allocate away from the u.s. in an equity line. >> you're not liking emerging markets at all then i'm assuming >> no, exactly yeah >> i agree with that i think the liquidity of the emerging markets are a directive in the u.s. when it's going well and europe's is not going well at all. >> you have that risk/reward question to answer relative to where we are, why they are and where we have gone.
>> it seems like the u.s. is fully participating now in the up markets and still has more defense attributes and way more liquidity. something like 77% of all of the names that trade $30 million or more a day are in the u.s. >> great having you back best luck on the new firm. dow is down right now about 100 or so points that does it for us. "the exchange" starts right now. thank you, scott hi, everybody, here's what's on tap, you're a hero or zero in retail today nordstrom becomes the latest department store to get pounded after missing badly on its bottom line. we will look at answers ahead. and shares of qualcomm of tumbling after a judge said they broke the law with chip competition. and the key settlement with apple an cross the tech industry plus, boomers are bucking the downside trend wall street is piling on tesla now and bieber i