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tv   Fast Money Halftime Report  CNBC  August 5, 2019 12:00pm-1:00pm EDT

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joining us on the phone today. the dow is down, 25898 the s&p is also down 65. 2866 is your level there >> and stocks continuing to take a hit as you mention it is major indices, apple we talked a lot about it at the fining is down, continues to be more than 4% let's get to the half. >> all right john, thanks so much i'm scott walker front and center this hour, the trade war with china escalates, the s&p on pace for its sixth consecutive down day, the longest stretch since last october. welcome to the halftime report we are joined on the desk. the chief investment officer at boston private wealth is here and adam parker is back, the ceo of trivarian capital management. an ugly day is shaping up on wall street. you know china is retaliating in
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the trade war, the sell-off in stocks widespread this hour from semis to broader tech to retail to almost all parts in between you tell me what you are doing >> i saw current takeoffs from risk last week i took a little off this morning. i think they're good sales i'm not putting money back in. i think what's happened here is we all knew or most of us had sensed this would come because the lack of stableization deleadership level it's like making a deal with the devil. we're paying for it. without a clear resolution of trade, china having multiple levers to continue to pull with that potentially impacting the economy while on the other side of it the fed it doesn't matter what they do, frankly, it doesn't help, nick, take a year to impact as well. i just think it's prudent to put the market going into this being up 20% in the year
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nobody's got a problem taking money off the table. so sit back. take it easy, just observe you shouldn't liquidate everything you definitely shouldn't liquidate stocks where your tax implications will exceed the tax that you have or the loss you may assume so i'm waiting to see. >> so do you is down 606.5 we'll call it that this last tweet from the president seemed to catch so many people. >> which one >> off guard the tariffs on september 1st >> kay >> the people i talked to say they were totally caught off guard you had a scenario in the market where you wanted to be fully involved because you were going to get the rate cut. maybe you were going to get more it felt somewhat confident in where it was going, now from being fully involved to not wanting to be involved at all. you just don't know what will
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happen >> that seems like, that seems like a take that is absent any sort of memory at all about how easily it is for us to change our narratives based on price. what if he put that tweet out and the dow went up 400 points because people said, you know what trump is going to play hardball. the fed has our back even further now that more tariffs go into effect. would that same person have made that statement absolutely not >> the likelihood of that is -- >> i don't think that's accurate it seems far fetched to me. >> does it because -- does it because the reigning monologue on wall street from every house going into the election of 2016 is trump's market. then we ripped five straight days, all of a sudden people said, all right, trump's a little crazy, but he's great for the market this is the way this works unfortunately. first of all, we're always caught off guard nobody knows what's happening
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tomorrow at times of natural uncertainty, that's when are you shocked. we were making highs monday and tuesday above last september's high, which was above february 18th's high, everything e everyone felt great. the shocking thing comes along >> let's remember where we were going into last week you knew you were going to get a rate cut you knew you were going to likely get dovish commentary out of the fed okay you got your cut the day after you got a tweet about more tariffs going into effect which they may be >> you don't know they're related. >> but nobody, nobody expected that was going to be the outcome. the day after you got a rate cut that you were going to get an announcement of tariff itself on september 1st. that's what's thrown the markets out of whack they're down six straight days it can all be traced from there. what do you say? >> i don't get why people are still panicked the s&p offers you what a 2%
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dividend, a 2% net buyback i think earnings will probably grow i think the market had 17 times, how does that look versus any bond or anything else? i'm pretty optimistic to be honest with you. >> despite you have a retaliation by the chinese which was pretty severe. it could get worse you have a complete escalation >> you always sound dumber when you are bullish. you always sunday dumber at the end of the day, money has to go somewhere. you think you should buy french bonds that guarantee a negative loss for ten years or treasuries of one set i don't think so i think there are plenty of good companies out there that trade at 17 or 18 earnings, that looks good to me as long as you think corporate earnings are higher next year. i don't care are they 11.6 expectations
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even for 5 i'll take 5% growth earnings over next year >> does that make sense? what do you do then? >> it makes sense. i think it's important at the beginning of the show you really outlined last week, fully allocated. i think that's where most people on the equity side got comfortable in the last five days before the tweet on thursday you finally got comfortable. fully allocated. >> in the calls that i make, that's exactly what i'm telling you. exposure to high beta names, came back again. are we saying you rip up your portfolio? how you have municipal bonds >> i'm not saying sell everything and run for the hills either >> if you finally got comfortable. like i did in the last five days, you took that equity exposure to 100% and levered it a little bit more. of course, the tweet which was perpl perplexing, which was stunning you and i spoke about it you pulled back on your equity exposure you have to.
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>> that's called management. you are managing volatility. you are not managing less. >> you are not managing volatility. >> what's the risk i have done it for 25 years. >> it's a conversation that's something separate. >> volatility. wait why did you risks materially go up before or after the tweets? strictly because the marks got more - >> when you increase the amount. >> what's that >> let me finish you go from 80 to 80%. you put a stop in. >> okay. >> okay. the market declines 5% it's got nothing to do with volatility i9 has to do with -- >> are we saying, wait, wait, wait, are we saying that most people last week got fully exited because people, data does not indicate that people got very bullish that's what i'm hearing. people became fully committed. high beta got favored and they
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got fully invested and had to reverse that quickly i don't think that's what most beam are doing >> you are categorizing saying most people. i started off saying portfolio construction doesn't get touched. this has to do with the equity component. the equity component where people went and got fully allocated. specific to equitieequities >> i can't speak to that >> thank you over the last six months or so i actually don't disagree with the comments here. since the pullback in the fourth quarter people have gotten comfortable over the first half of the year, part of that they felt a evaluations were appropriate. perhaps they're a bit outsized however, if you are trying to play the potential outcome of these tariff talks as being a done deal and that you got comfortable in the fact that this is going to continue to kick the can down through the election of next year, i think that's naive, so i think from a positioning standpoint what you
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are seeing in the markets today is once again you are seeing the same names pulled back over the last year every time there is a tweet on tariffs, to be honest with you a lot have come back. they have rebounded over a simmering of escalation. i think you need to be looking at the companies you want to own for the next three-to-five years. there are going to be buying opportunities. i know there will be buying opportunities based on our outlook for the second half of the year >> on august 24th, 2015, there was a yuan overnight fix crisis. people went nuts i looked back and seen what i did. i was fought reacting to volatility, i was doing what shannon said, here are stocks i owned, j.p. morgan, next flicks. no position. i had obscene limited. i never thought in a million years i'd get hit. i did. the dow wasdown 1,300 points
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over two days. on the worst day it was down a thousand closed 588 i got filled on stocks i had no business being able to buy at that price >> that i think is maybe the -- a more constructive approach than saying this is the big one, we're going down 30% >> first of all i never said this is the big one. >> i'm saying like joe says, you have to manage risk. there is as a portfolio manager, you have to manage your risk risk is not volatility volatility creates opportunity they're into the the same thing. however, things did change and you have to keep that in mind going into last week, first of all, you had optimism about china. why. >> the narrative is let's be optimistic you had optimism about the feds. you knew 25 bits however, when you get tweeted at 3:00 in the afternoon confirming your fears, right?
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tweeteding that magnitude. a knee jerk reaction gets all the advice that creates change and by the way as good as trump has been for the market, the two best markets happened under the two worst presidents for business, obama and clinton so could say that okay different circumstances come out of obama basically had a gift whatever, that's what it is, you can make the data say anything you want to say. so i think it's prudent to take off the high beta names. i sold the smash smh. i think but wait if you can't recognize that things have changed and depends on your time riser your mandate is to invest. mine is to invest and protect capit capital. >> things have changed. >> different mandates. that's a good point, too
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>> my kid are looking ahead, looking out 50 years, you know >> that's exactly what we talked about. i like your strategy, there is four names i can give you. if i can get chipotle back at 745, i'd take it mastercard 255 vish i'll take it i like that. >> you have to have some liquidity. >> i raised the liquidity last week because i couldn't find any last week because i was reach, buying apple at 220? here's the point we're back to discussing the what if scenarios, morgan stanley if the trade war es ka lates further, recession will be here in three quarters fourth round of tariffs may prove to be a game changer we are back to have to having this conversation about trade we haven't talked about the fed, trade was on the back burner, now it's on fire
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>> because we thought we had until september. that's why >> josh is responding from you based on price i looked back december 1st from the big two equity firms this year, i look at their equity market outlook these guys had four hikes now they had two cuts they had economy is basically coming what they thought with inflation and jobs and gtp it's the old nobody knows nothing. to me you have to look around to find good securities i don't agree necessarily the fed gets work done i'm not sure 100% the market will react to that more you can gross up more and generate, take a bicker balance sheet in these things are definitely better than they were >> hang on hang on. things are worse today than -- >> on the margin they're definitely worse than they were
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last week. that's right are they enough worse than you should panic and sell? >> i don't think it's panic. my investment case was the following that earnings were discounted completely down, right? we came out with an okay earnings season. yes, earnings growth was negative right? i wouldn't call it a complete recession. we discount that on the market we had a fed that was going to ease despite inflation picking up and we had a benign trade situation they were working towards. that was my investment thesis. so i didn't panic. i took a look at what changed. we no longer have a benign trade environment. we no longer have inflation in my view going forward. because this will make you know this will drop the economy drop price and earnings around so sure anymore >> do you think people if they trade short on horizonings can make money selling than adding a little after it's up a little i'm saying it's worse than
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worse. >> i don't think that's the call >> chop your account up, period. we are down, i'm selling up five. back in do that for three years. show me how it goes. >> i can smell the smash >> is it more active than people that work for a living >> most people can't ahave been selling more boeing look at verizon this is the best, i'm long curious what your thoughts are what do you do if you tiltles hold up great these are the stocks i'm talking about. is your answer based on whether or not your whole outlook is changed around you are bearing rates or do you just take that strength for what it's worth and say fortunately my portfolio is balanced and i have this stuff what is your take on the market? >> i think you have to be bar beld, a wimpy stance i like these, select reits
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those are the best performing sectors him some are expensive it depends which one i apply more to recent use and the stuff that sold offside, i personally want to load them into semis i don't like the hardware. i'd say to many namtsz are attractive. >> digital banks are down 8% in days >> to me that makes some sense probably not on earnings, the curve where it is, it's hard to make money i think the answer is you can buy stuff relatively out performed here and things that have fallen and better i avoid semis. >> would you sell semis? >> i would to me, it had some issues going night. i think the answer is you want to buy stuff and gross up you can generate more return >> i actuallily the there will be a full plane currency war >> that's what i was going to ask. >> if you can call that, good
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luck i told you the two big firms have no idea it's tough >> i think you ask if something has changed. i think the dollar story is changing we talked about the consumer staples over the last few months, the valuations in that sector we're looking at a potential strengthening dollar this is very similar josh you mentioned the 2015 time period, similar to what we saw then, economic growth selling outside of the united states we had pressure prices coming from a stronger dollar here in the united states so we're a very similar scenario absent the fact that you know we have a looming trade war. where does that put us i think it puts us in the position if you were looking at the dollar, emerging markets this year, you were looking at a potential waste of play a stable if not weakening dollar i think we're moving to a steeper dollar >> you know at that point first of all you had the uncertainty of what people felt was a high stakes u.s. presidential
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election plus brexit we have the results of both of those in and you had the fed and tapering and this is the opposite so it is very similar to that situation. however, with maybe like a down mattress waiting beneath us. >> but from a relative rate perspective, we're so much higher than everybody else even though we are potentially becoming looser monetarily, we are highest than a delta perspective. >> we are one 28th tweet away from a reversal. >> that itself the risk of become >> it's much more negative it's scheduled for september >> genes, he and i are getting together >> we're joking about it >> you've seen it. >> that is the unfortunate. >> that's why you can't get to a negative it's awfully hard today and over the last six days to be overwhelming positive.
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>> should that make me feel better or worse than the mark change 5% on a tweet >> you know what it makes you do, it makes you people i have been placing phone calls to, it makes you not want to be involved >> that doesn't mean sell everything and go home it means what you thought was good, you thought you had a handle on how to play it now you don't, you were so surprised as everybody was by the timing of that tweet you were stunned and the policy that looks like it will come along wit on september 1st >> you were stunned and you were perplexed. i don't think anyone at this table is being overtly negative. josh is correct, if you are a retail investor, managing your portfolio, you are sitting back looking to acquire things in your portfolio, what does that mean >> i have limits >> that's what it means. >> it's so complicated. >> are you, joe, affairing these things at the top of the show i gave a couple of names. i gave chipotle, mastercard.
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those are names, facebook a name i have not been in so, yes. >> what would look at? are you buying it or fought? >> chipotle 735 to buy, mastercard 255 to buy. facebook 177 to buy, thank you. >> i have berkshire hath a way somewhat lower this is a name that i have not been in, has not performed has actually been flat year-to-date with the market up 18, 19, 20% at its best levels now the markets pulled off a little bit berkshire came out with earnings over the weekend the operating business is boring nothing good is happening there however, earnings are growing because of the sheer financial growing sheet. berkshire is not a hedge but this is a wane that will take advantage. berkshire has 121 billion in cash sitting there earning
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nothing awaiting market opportunity that has not come in years. for me, that's the kind of thing i i want to do in a tape like this that is where i want to get it lower >> that is exactly where i want to go. where are you going? >> salesforce, we talked about it on the show last week, they're fairly insulated i.t. spending could come down they're the type of long-term company i'm talking about. >> i was talking crm for me it's also facebook and i cut back my adm, amd, rather it's about rounding up the position again, it gets down to about 25, i'm do that. it got ahead of itself i wasn't going to sell so i sold higher than where it is now. >> anybody buying real names that have been destroyed >> i'd like to blythe more amazon, frankly. i own target it came down way too quick. >> updated today >> i can target pretty well. >> joe, you have been out of target >> i did
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i got stopped out of target. it is what it is. >> another retail names. >> i'd love lulu to get crushed. i own it >> i put an order in for a down mattress >> another name on the retail side, down 11% is best buy 2r5iding somewhere around $68 i think that's a name you can talk about. >> you know what is getting hit is apple >>. >> i'd buy more down lower there down lower >> i'm not buying. >> cramer basically says you are looking at names like apple and some other which would seem attractive if not overdone he thinks you should wait for a downgra downgrade. >> here's what's unique, though. there is another story >> that's what he's talking abou about. >> there sa mar jo trade war going on in japan and south korea. they took them off the white
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list of 27 approved countries. on july 4th, they said there were three key ingredients, that go to etching. to chips, that affect all the technology if they can't get that then they have three month supplies generally, july 4th it happened. then will you have some major major issues on that channel which means -- >> cook is intimating that apple will be taking the brunt of the price increases that get passed along as a result of tariffs so if are you the consumer of an apple phone, you are paying somewhat the same. am sure isn't. >> ours show you want to buy when margins are expanding to me it looks like an s&p type of stock goes down with the market or up i think you have to really be confident. so i agree that point. >> do you guys agree you need to wait on apple? if you do get some downgrades, which you rarely do?
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>> i sold a little last week. >> you bought in front of the number, after the number then you bought more >> i bought after the number made that mistake so unfortunately jim makes a great point, are we going to see on the fundamental side analysts begin to downgrade a lot of these companies, the other thing, we keep using the term most people okay the last three or four days most people did this most people did that 99% is being driven bial go myth rick models you have a ten-year treasury the momentum has gone down in 30 basis points in three days what are they doing in that environment? that's the significant change. that's what's really driving >> you get a more retaliatory atmosphere, if you will, or environment, around apple in china, which maybe you haven't fully gotten
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>> they haven't expressed. >> yet >> you got if terms of that you know we're going to keep putting tariff itself on phones now. so we've retaliated against apple on our own >> i don't think china is doing well in either way it's a huge mark it's very key and important for them. >> apple 13% of their revenues. >> pre trump they were struggling they had battles with china mobile they had issues versus local competitors that still persist tariffs or not, the apple-china story is not a fairy tale. i think that's discounted into the price. no one is valuing apple as though china is going to become half of sales one day. >> you can't possibly think it's fully reflected in the price >> apple lost 40 billion in market cap >> it doesn't take much for a stock to do that. >> much more do you aq2 ir it ain't a $40 billion business.
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how much is reflected? we'll find out in two months i think, though, if you think about apple as a name where you might have edge based on how you think tariff discussions are going? probably the wrong direction, i think it's more reasonable to say at what multiple do you have dip buyers for getting into apple, regardless of how good or bad the news flow was, maybe use that as your the parting point if you don't own it or are severely under weight. severely 99% people watching this have massive, it's in every etf. it's not like the world is materially short apple pretty much everyone is in this stock whether they want to be or fought directly or indirectly. >> i have news, everybody owns the stock in one way shape or form i do think what we are discounting is the execution, potential price increases and determine how they want to pass those down just for older phones?
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not in the handsets? i think tony was on earlier. >> he was talking about the price increase and what the hit to earnings would be >> i think it was a really good comments he made that they may have a little leeway to make up for some of this they don't expose themselves to the entire hit of of the tariffs. i think it's important for apples about to execute and whether you want to own this long term. >> i guess the one thing, i sat next to him ten years. i listened to him. he knows a lot more than me on that stock one thing i would have been listening here that i struggle a little bit with everyone seems to say i put the limits in, whether they were effective or not, for data i've analyzed, i'm not ault always good at setting limits, sometimes i destroy alpha by setting an entry price that's good. you think it's a good buy,
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momentum is weak when it goes up, you are selling it too early i'm not 100% sure. >> adam, for me, it's a psychological pool i know myself when you have a stock that you want to own like facebook in 2015 for example here was a stock that dropped. i know my own personality. me seeing it do that i like breakouts so me seeing it do that and reading the headlines and digesting all the negativity on a stock that's falling in price will keep me from doing the trade, almost forcing myself to go through at this time news is better and better which is why here hit so hard i am not good enough to counteract my own negative psychology when i see stocks that look like foreign knives i know i won't screw with it
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setting limits, it's not science like there is no price that's being derived. >> whatever your time frame is >> we have apple and facebook, if you put your buy in here, wherever it is, you look over market cycle, you will make money. if you do the same thing on a brunswick corps, who knows you do the same thing on these other companies. >> the quantitative work says you have to be about six months, you are right. so i guess it challenges the short term >> the other quantity model portfolio which myself and most advisers utilize that's rules based and quantity driven and when you will rebalance. >> right. >> then as a psychological trick you start to look forward to
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these market events and you have a couple stocks that you wanted at an obscene price. what it does, it orients your brain towards new highs. rational >> let me point out quickly as we now are approaching 12:30 on the east coast on wall street. we're the lows, worst day for stocks the dow is down 6:45 as this trade war escalates, more substantially by the chine eechlts that is really a sat a list losses almost across the street. the nasdaq as you can see, a lot of talk about the semis, the apple, the nasdaq is down more than 3%. >> let me ask you this question, josh so you buy breakout. you throw more capital at names like twitter even though you owned it >> sometimes not all the time >> so you technically oriented in some regards. what would you need to see break
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down in order for to you sell? markets aren't a one-way street. we can go to you >> it's how you go in, though. >> you say this yourself >> this is a trade, where i want my risks at, meaning i say to myself look i'm going to use vwoped on 50-day exponential moving average i will keep it tight i'm going into this with the intention of trading >> i'm not asking you that i'm asking what would cause you to get out >> no, i'm making my point you would set your stop on your way in you are pre defined. i think that's reasonable for a trade. for an investment, though. i think it's very different to look at it. >> i'm talking about for investments, what scenarios? you guy versus gone to cash? what scenario would cause to you do it. >> that's a good question. one is tactical. it's 100% rules based. my gut instinct were terrible and don't factor into when that model would reduce exposeier
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i'd point out we don't think most long-term investors should have a lot of their capitals invested most of their capital should be strategic and the rules in advance are when you rebalance, so you are buying panic almost by default and i think it's a reasonable way to say there are times when things in the market change and you do want to have less exposure. but not most of the time and not most of your money should be moving around to that degree >> for you, marks got more than 80% of the time. >> right >> so do you wait out every down draft regardless of the reasons for it >> no, you don't, you you certainly don't make a binary decision for cash. there is incrementally to bring a client's overall allocation down usually based on something that's happening in their situation. >> in our situation. we have brought our equity allocations down all year this year since you know the 3rd of
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march or so we have been going from an overweight position. >> what are you basing it on >> to a neutral position i think on the overya'al landscape, we have been -- overall land cape, we have been overweight now our models are built a certain way. i don't feel there is one way to be one way or another, overweight or underweight. we moved back to a neutral decision >> in what causes you to go to an underweight >> clear deterioration we view the u.s. economic picture the number one reason the markets will correct that when we will go to an under weight position. >> let's go for sue herrera with the broader news headlines >> thank you very much, scott, here's what's happening at this hour, dayton mayor telling worters that president trump told her he will visit the city. she was also asked if she was surprised by the resiliency of
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the dayton community >> nothing prizes me i really expected dayton to respond the way it did last night. >> that is our community our community comes together a little angry, you heard some event at the 8:00 vigil. respectful all the taim same calling for action >> that is dayton. >> wal-mart says there has been no change after the recent imagination shootings. it stopped selling assault style rifles back in 2015 and raised gun purchases from 18 to 21 in 2018 walmart is the largest firearms retailer in the country. and the rate of people dying increased australian researchers studied trends in 23 highing in countries since 2000 the rate has stalled in half of those nations. but here in the u.s., the hate ras increased. you are up to date that's the news update at this
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hour scott, back to you. >> we appreciate it. thanks, so much. that's sue herrera let's talk about another stock in the news, it plays into the news, ali baba we made it the call of the day, for the simple reason it's relevant to this day initiated by jefferies $216 is the price target weiss, you previously owned it what do you make of this call or whether it's too ricky to get into china exposure given what's going on >> so i owned it because they're saying they're going to have a dual class stock what i meant is dual listing they will continue to list into demand we got out relatively quickly when frankly stocks started to deteriorate. so even though i didn't use a formal stop but i saw just
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because you know you can't have those kind of trades on in this kind of environment. it dropped like a rock so china is going through their own economic issues, obviously and weakness in the economy. i just don't believe it's a stock to play at this point. when it's come down to this level before, you seem to move up to about 180. so if you want to do that you need stabilization in the economy there and trade talks. >> gutsy, yeah, somewhat the put a call like this out in the environment that are in. >> it's an nishgati initiation. >> so having run a big research department there is when the analysts want to get the product out there it will be a long-term buy and will work out at some point. >> if you think that the president of the united states is intervening with u.s. companies and ceos, what goes on over there is 10x and you can't read the natural language newspapers, so you have no clue
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what's going on. i'm sure this is good research i think at the end of the day if you are someone that wants exposure to chinese internet companies, i've stayed with k webb and trade along with baba and the other large caps there would you look at tech >> i would not own it here because there is no trend. but in a trending environment for those stocks, i'd like that better than picking baba look what they did to ten cent the -- tencent, the government decided too much video games they cut the stock in hampl. >> that can happen at any time with these names so if you really want exposure, a, i'd wait for an uptrend, statistical uptrend, not technical. b, i would buy the matter of fact >> that said there is a listing, a hong kong financial services firm >> you can have it >> the stock is having a look at that that on the opening day
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loop by the way full disclosure. loop is one of the coe >> we're having a debate investing versus short term. when you bring forth ali baba, you immediately think of the troubles overseas and the emerging markets okay, you want to go buy ali baba, step right in, assess class. put it in the portfolio if you an a longer term perspective baba is going to work. >> a p. not feeling it. >> the other issue is because i've seen this, i've owned companies, chinese companies that listen to kayman that's right here which is where baba does, where there has been a fully financed let's say 15 dollar intex table they are so liquid, the stocks come down in trade 9 bucks. they can surprise you to the
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upside so much is coming out of the markets. like xi labs >> i said if i did nothing but catch up for five years, i i would still know less than they know now it's every u.s. company combined it went down 40% i think it's impreginable to any research that i could get comfortable with >> i agree, it's the same. driven by the indices mump more so >> the dow the down more than 650 points we're right in the lowest levels of this trading day. this is down six straight days unless there is some fantastic reversal over the next four hours or so right now, it's looking, joe, pretty ugly. >> it sure s. you see the high beta fames getting hit
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one of the things that stand out is energy companies are having and the debt accumulated you wonder if when you are looking at energy as a sector, that presents itself as a problem to the marketplace we saw a little in 2016. that's one sector that to me i'm a little concerned with. >> energy is on the move in fair territory. bob pisani has that story for us. >> reporter: hello, scott, oil etfs are tanken unique trade worries. the oil and gas bop a more than 3-year low on tariff escalations. let's break all this action down kevin o'leary, dave, i love oil. it's a classic supply and demand story. the markets seeming to telling us right now there is a massive over supply situation. is that going to change? >> i think that's absolutely
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true we are in a global glut. we have opec doing something about it all on the backs of saudi arabia that's not going to last forever. there is nothing i can look at other than a calamity driving places up. on the demand side, we're seeing science of a global recession possibly in the worksen in of that is grate for energy prices. >> it's 3% of the s&p 500. you looked at me in the past about using currencies in play there is a relationship there. explain that >> here's what i want to do i'm started to get interested. time to buy oil. they're hating it a lot right now. you can buy the currencies and indices of countries that are tried to tank oil prices i'll give you an exam australia. the one that is closer is
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canada you can transfer dollars by an index like the stocks in energy and banking. here's the sweetcher if oil moves you get a lift in the index. plus an added bonus on the cade story. it's a socialist government, getting kicked out for right wing business. >> that could help the currency. >> there is a little head fake if you look at the sle you say it's up 3% it's not that bad. the sle is only being held up. your chevron and exxon are essentially up everything else is just awful here why are we getting a couple big caf names up >> chevron and exxon are the truly big performers here. they in their right up reports
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they can whether some storm. they are wielding blue chips the rest of the sector can't keep it together. >> if you look at range resources, concho is down 30% for example. the services names, diamond offshore is down 25, 30%, transposition, noble, joe brings up a good point here >> those are their acquisition targets. you expect exxon and chevron to survive and have sol it balance sheets >> essentially a lot of energy hedge funds are going out of business they're simply gone. i can't call the same people, they're not there. companies are basically down at this point is there any future? is it always going to be 3 or 4% remember in the 70s, it was one of the largest two or three sectors? energy was, back in the 1970s? >> i think there is another shoot in drugs you touched on it.
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you might think of the bottom credits in the world, 18%, single season, the majority of which are energy oil stays down here, that's going to be a bad outcome for that bottom 18, the single cs, double cs, those are a nasty piece of the paper you will see a big correction on the bottom end, anything that has to do with single c credits. it will be a bad outcome >> we heard about the debt issues go every time we have a problem in energy, they say, this is where the problems will be >> watching the high yield sector thank you for joining us, for more edge, don't go anywhere, hour live show we'll dive into safety trade, get the slow down on where the etf business has been this year. talk with the man behind scott. over to you. >> bob, reappreciate it. thanks so much we will stick with the market sell-off, clearly there, the dow
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is down just about pushing 300 points, the worst day in stocks since january, there is a part of your picture today in the red. we will answer your questions ahead, reach us at tweet us as well, questions and answers coming up in 30 seconds. >
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. well some back to the halftime report, everybody i'm kelly evans. we will have more coming up on the exchange today we definitely will talk about managing this environment. do you want more or less exposures to stocks and bonds, "mad money" jim cramer say more on the political unrest and the currency evaluation in china we will connect all of those dots and talk about what's going on and what sparks this big move and the former ambassador to china max baucus he says they will continue indefinitely we will talk about the cost of all that the senator joins us live, we have that and more ahead on the exchange a halftime report. back over to you, scott. >> we look forward to that about 14 minutes or so welcome back we will answer some of your questions as we do our halftime segment. shannon, stewart in chicago. las vegas sands, a lot of casino stocks have gotten hammered as a
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result of this news and this story. so what do you do with lba >> we actually bought this at the end of june. we like what is hindering this stock today. there is concerns around the situation in hong kong, that creates a disruption in tourists go going from hong kong to macaw. we talked about this. >> josh, we talked about the wreckage, stitch fix in baltimore down big, what do you do >> leave it alone. >> sit it out? >> i'm saying, like, like everything that's gone on right now. >> be nice. >> i'm saying there is really really high quality names woes puts are much more certain and have gotten knocked down big i guess in this kind of tape i'm not looking for tertiary names >> why for you fed-ex from pete
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in new york city what do you do you talked a lot about xpo >> yeah, yeah, yeah. >> on the logistics side what about fed-ex >> fed-ex was a different company. sprint has been weak anyway, the companies came out with a good quarter relative on the margin side, missed top line and bottom line and consensus for next year it was down on fed-ex. i would wait, i'm not putting money in this market however, that stock has come down significantly and it's one that should be on a buy list it's not going away, still two primary companies, fed-ex and ups. >> okay. i'm going to continue to point out what is now the worst day of the year for stocks. the dow is down more than 700. about 703. so one of the areas in the market i've heard today, hey, it may be a good place to look. you don't fet the worry and
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maybe a china healthcare that's where the question comes from you what do you think about it >> i like healthcare, it depends on what you are talking about. you got med tech up 15 and pharma down maybe 5. i think it depends i think there is a lot of good ideas in pharma and biotech. the biotech one versus growth and probably an under valued pipeline the stuff is really lag. you take all the risks in there. i like healthcare, our process can generate a good spread between the names. >> i want to keep the conversation back on what's sort of happening at the moment here in the market. you just sent me, joe, an interesting article which is the headline being mom and pop crushed by 5% route in stocks after adding to etfs the point being that you came into last week feeling fairly positive about where the marks could go over the weeks and months ahead because of the fed. now you are left with a lot of people, whether it's pros or average joes worn caught big time off side by an environment
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that has changed as we said. >> yeah, i also think one or two in the hedge fund community had been a little restrictive in going full in and adding exposure to the high in over the names and the last couple of weeks i think they got a little more comfortable i don't know what the ramifications of that might be but it seems the sentiment shifted. >> since march 2009 there have been now, including today, 25 moments where the s&p has fallen by 5% or more. not one of those times turned into a minus 50% generational crushing in the stock market, and so as a result there are 73 million millennials who go to work every day about 50 brs of them have access to a 401(k). every two weeks they're adding so on those down 5%, some turn into down 10%. last year we had two down 15% and one 20%.
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do they look stupid for 15 minutes after buying at an all-time high? yeah, it's going to happen part of the risk that's why you get 8% annually instead of 2% in bonds annually over a long sfretretch of time if you're not willing to do that, that's fine. park your money in a bank and earn nothing and watch your cost of living accelerate. >> it's made a little worse, i will use your words, not mine, made to look like an idiot when thought you would be pretty smart. the environment doesn't change overnight often and it literally did. >> it's back to the time horizon question you look at allocation, i put my equity position at the top of each market and wait long enough, you still did better. >> worse timing on earth. >> i'm curious as to how all of this is playing out at the white house. that's where our aeamon javers i
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live the dow is down over 700 points. there are some saying this was a self-inflicted sellout about the president's tweet against the advice of some of his advisers. >> yes, the white house tells me they don't expect to have an official comment here other than what's the on the twitter feed officials are very focused to the president's response to the shootings over the weekend that's consumed much of the morning at the white house the president is tweeting his thoughts on china. you see some of the comments but the president suggesting americans are not paying tariffs. he said china has always use the currency manipulation to steal our factories and businesses, depress our wages and hurt our farmer's prices. not anymore. the president is simply wrong
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about that, scott. the tariffs are being made by companies inside the united states importing from china. over time you know that can hurt the chinese economy. but the fact of the matter is when the treks are being written to the united states treasury, they're coming from importers in the united states who are importing that material from china. so the president -- his staff knows that, muck mulvaney, acting chief of staff told me that and it's been a couple of months ago they're aware the people paying the tariffs are american importers but the president is using the language -- >> he knows they're not paying it almost, eamon i don't know what we need to do. fly a plane with a banner saying china is not paying? >> he knows. >> i had an conversation with mick mulvaney, acting chief of staff, and he said the chinese economy is worse to them than it is to us so, therefore, net-net
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they're paying that's the broad argument you get. but the president is just flatly line when he claims the americans are not paying the tariffs. >> the other thing is the president seems intent at this point. he voiced his concern or displeasure is a better word after j powell and company cut rates last week. he didn't think the fed went deep enough. and he seems absolutely intent one way or another of getting rate cuts that he wants. and if that means this situation that we're in, so be it. how would you respond to that? >> i asked the president several times last week what rate cut do you want to see from the fed he said that the quarter point wasn't enough but he hasn't specifically said what he wants, what his number is i asked him several times last week face to face that question, he just simply didn't answer it. he hasn't put out a target number he would like to see. and not putting that number out there gives him the political
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flexibility to continue to say that the fed is not doing enough, really no matter what the fed does here moving forward. so going into his re-election, if the economy softens between now and 2020, the president is going to likely want a political foil he can blame for any softness in the economy. the fed looks like foil number one for now. >> you have to believe a sell-off like this is getting the presidential attention for a president who views the dow as a pretty good barometer of what he thinks his job performance is. now you're done four six consecutive days in what was the worst day of the year. maybe we'll get some comments from the white house to you later on, eamon. we know you will be looking for it maybe we will see the president again late they are afternoon, in which case you will have the opportunity to ask him directly. >> that's right. >> eamon javers, always, thank you. on the north lawn of the white house for us. >> just answered joe's question about head funds, i looked at
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numbers that came out last week, net buyers on thursday and however decreased their investment strategy. they were net solid securities lev aj leverage was at a high over the recent years but it's just a different strategy. >> yes, down 750 on the dow. >> you don't look at this, do you 750, ignore it but we're trying to define the environment and what has happened there has been something that has changed since the president's tweet on thursday. there's a reason why the u.s. ten year has gained such negative momentum in its yield and pricing at 1.72. there's a reason behind it and global impact with the rates and
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you're understanding the buying. >> 1.36. >> we're not even there yet. but that's something we have seen in recent history be i wouldn't rule it out. they are selling mortgages in denmark at a negative interest rate if they can sell a mortgage at a negative interest rate, i'm not sure why the ten-year has to hover around 2%. >> i'm looking to give you a news buzz if you will, i'm looking at a reuters report according to chinese state tv, state media that chinese firms have suspended purchasing u.s. u.s. agriculture products and that china says it doesn't rule out the possibility of slapping tariffs on u.s. u.s. agriculture products, that china has purchased after august 3rd. >> they came out and denied that that came out overnight. they denied it and now say they're doing it you can't believe the news story from one to the next they put out a statement denying
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it. >> i'm back to where we were 20 minutes ago, risk reward, you get one tweet and oh, this is kind of bad, and get to beijing and it's a risk fest after that. >> from what level >> just as likely as anything else one-day momentum, sure, it sells off all day but two days you can get a tweet to the contrary. >> part of our conversation and broader message we're trying to get across is seven days ago you weren't expecting this either action or rhetoric to be with us this wasn't on your radar. even though the trade war was still in the backdrop. >> we didn't have the resolution i don't understand why people would have thought the ninth time mnuchin said we're 90% close to a deal, why all of a sudden they started to believe that >> they weren't thinking about it they were fixated on the fed fixated on the fed.
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>> i was thinking about it. >> i don't understand how in one month it got crushed unless they put all of their net worth in last week. >> last week, this is it that's the dispute joe and i had. it's not a real fund we're talking past each other. we all agree most people did not get fully invested last week. >> part of my buy piece was that we wouldn't get anything substantive from china -- on the china trade front until september, the meeting in september back here. and then that quickly faded. nobody expected them to fly over to china, have dinner, and then say this is falling apart. this is done definitely didn't expect the tweet. but you never -- the markets always collapse and this is somewhat of a collapse, even though we're still very close to the highs, on unexpected news. your unanalyzable. >> the worst day all across the
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board for the year pete najarian just tweeted this stuff, stuff on gold so i want to push you there. as we cover the worst sell-off in the united states stock market of the year kelly evans and "the exchange" picks up that story right now. thank you, scott hi, everybody. welcome to the "the exchange." here's what's ahead, we have a massive sell-off across the globe with u.s. indexes hitting their lows right now the trade war seems to be turning into a currency war with china letting its yuan fall to a 10-year low. now it's the worst day of the major averages this year the 10-year yield is not only above 1.75%, it's now


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