tv Fast Money Halftime Report CNBC August 7, 2019 12:00pm-1:00pm EDT
match, tinder, people are swiping right, at least on that. >> dating and -- something about dating and easing financial conditions go hand in hand consumer staples are the only pocket of strength within the overall market look to dividend paying safety stocks that do well no matter what the economy is doing. >> with that, we'll send it to scott wapner and the half. >> i'm scott wapner. the stunning drop in yields weighing heavily on stocks this hour the ten-year note hitting a three-year low welcome to the "halftime report." investment committee today, steve weiss, jim lebenthal, pete najarian megan shoe is here, senior investment strategist at wilmington trust also tom lee, fund strat's head of research. let's start with the latest on the sell-off the focus, of course, is on the bond market. pete, i come to you. 1.595 was the low on the ten-year note yield today.
the lowest since october of '16. stocks are going to continue to have a tough time as long as yields keep falling the way they are. >> and it doesn't seem like -- where are we stopping is the next question? we talked about this up over the 3s started getting toward 3.25. now looking at the down side it's amazing to see how much pressure that we're seeing right now in terms of the yield and how much that's moving to the down side. volatilities have been spiking we know that we had that pullback but stayed above 20 still trading around the 22.5 area the markets remain very, very volatile for all the right relationships. when you look at the mix of what's going on. whether it's the ten-year, the trade wars or you talk about any different issue that's going on, the president and some of the commentary, what people think about what larry kudlow might have said yesterday. all of that combined, there is a lot of unease out there right now. no doubt about it. and the only safe places that i can find right now is if you want to be long vol fatility or
long precious metals >> we've been steadily decreasing risk in our portfolios over the past year. when trade talks disintegrated in may we took our longstanding overweight inequities to neutral. at the time, that seemed maybe a little premature, a little too defensive, but in reality it was in anticipation of this heightened volatility that we're seeing today so we are seeing an environment that is deteriorating globally, particularly in manufacturing, and i think it's important to point out that the fall in yields that we're seeing is because of not only some weakness in the u.s., but really global weakness. and we had german industrial production come out today at negative 5% on a year-over-year basis which is consistent with what we saw in the economywide recession. this is expressing global weakness and so we have been a little more cautious but i don't think you can get too defensive. >> tom lee, the man who on
august the 2nd told me to, quote, back up the truck and buy the pullback you feel that confident about that today, tom? >> i do. i think people are getting a chance to buy it lower i do think markets are grapple with this new regime of, what if rate goes below 1% it's coming up in our conversations with clients and it is a risk off rethink at the moment, but lower rates means corporate bond yields may go to sub 2. that's a big drop in cost to capital. it's going to drive an m&a boom. mortgages can drop into the 2% range. that would be quite bullish for the u.s. consumer. so i think that this is going to be one of these moments that we look back the last 18 years and say is this 7% draw down bringing the top or a huge buying opportunity and i think it's a buying opportunity. >> if yields keep falling the way they are it's going to be hard to make a bullish case.
cent simt goisentiment is goingn where it is and people questioning why the rates are going down the way they are. >> it's an evolution of the thesis i think that falling rates is bullish for stocks in the sense that there's t-note. it's going to help large cap and asset light stocks or asset heavy. but it's not as positive as reflation and the fed is forced to raise rates >> you talk about how low rates can go and pimco with their note getting a lot of talk on the street today, not absurd to think that nominal u.s. reserves could go negative. that's where we are? >> first to respond to tom's comment really quickly the point about there being so alternative. since the fed eased at the end of july we've had financial condition tightening despite the fact that yields are moving lower it's happening
against a growth backdrop that's weakening so you aren't getting that lift or benefit you would if financial conditions were easing and with regards to the view on long-term interest rates, the comment about rates going below zero is a -- if we go into a recession which we don't expect offer the next year but during the next recession, we will have rates firmly below zero but nominal yields also approaching the lower zero bounds as well. and i think the point to make right now, that's important, when you look at the u.s., vis-a-vis the rest of the world, u.s. yields are still at 1.5%. you actually can get some yield in buying u.s. yields. when you look at italy or germany, we're talking about it on the desk earlier, you're getting significantly lower yields the u.s. is still seen as a place where it pays to be long duration >> so do you want to respond to that >> well, financial conditions have tightened
and i'm not surprised because i think the fed gave a hawkish, dovish comment i don't think it was what the market was looking for there's a lot of things that can ease financial conditions in the next three or four months. one is if trade tensions if they de-escalate and i think the fed is looking like it's going to have to do something in september. and if it involves q/e, that would be a real easing of financial conditions and i think that as long as the u.s. remains resilient, when the dust settles it's a story of equity, and i think people just want to buy the u.s. markets >> weiss >> i need to say this is all extremely confusing. i don't think that stocks trade down because yields are trading down i think they're trading down because the uncertainty behind yields trading down. >> but you did see that move earlier today, right >> took it right down. >> steep drop in yields, and stocks went down in tandem >> right exactly. but what i'm saying is, it wasn't that yields dropped
because lower borrowing costs are good it was why did they drop >> unless the message in that is there's a problem that's about to get worse with the global, if not u.s. economy >> exactly so i don't know what was behind it so aberrational, we don't see that we've seen yields compress like this in the '08 financial crisis, but that's what the parallel you were drawing when it dropped so it's had some uncertainty which i believe is taking markets down today but also, as i look at it, i think my best investment today is a bottle of suntan lotion and going to the beach and hanging out until this is over i'm not getting paid to put money into the market. there's already been an m&a boom it's been the biggest we've seen over the last few years in '17 and 18 private equity over a trillion dollars of drive powder. they'd rather buy is to a certain market but their funding
costs -- and have been what i think you do here is you don't take risks the down side at this point is much greater than the up side. will we realize the down side? i don't know so you keep your core positions. once again, i've said you don't trigger tax impact on long-term held positions but what meghan has done is right. i don't know how you sit there and say with -- and i'll read into what you're saying that you still got the same view because then you have to say nothing has changed since august -- since you came out and said that and so much has changed since that point in time that's got to give you some pause in terms of your very bullish back up the truck view >> go ahead and respond. i think it's a valid question. >> it is valid >> you tell people to back up the truck. you know, those are powerful words, tom people listen to what you say. here we find ourselves in what many people, like steve say, is a changed environment. >> at least say back up the
station wag orngs not the whole truck. >> it's just a matter of time frames because what's changed in the last few days is some escalation of trade tensions of markets confusion about -- and dissatisfaction with fed commentary and the result is a movement in markets. now that's played out many times in the last, you know, since we've had this president and each time, everyone has felt the markets were being pushed to the breaking point every time this crisis emerges, there's a feeling the market is so weak, so late cycle that this is enough to break it. so i think the reason i'm saying we need to back up the truck here is i still have a lot of confidence that we're midcycle in business cycle. one of the best, most sage yield curves is the ten-year minus -- 30-year minus ten-year it's steepening. that's been a good 16-month lead to what the pmi is doing
it tells us cyclical growth is probably better next year. i think i'm looking at a time frame that says i need to back up the truck here. >> i want to help tom out here you made a prediction and got hit by a falling ining piano lt thursday with the tariff tweet i'm going to say it more vociferously things can go the other way. we tend to forget nine months ago, 3.2% for the ten-year and jamie dimon, ceo of jpmorgan were saying it's going to 4.5% the thing that's changed is the worsening of trade tensions, particularly with china. as you're trying to point out, and i want to make this more clear. those trade tensions sometimes ease as well if and when they do ease again, the ten-year will go back up not to 3.2 because damage has been done but this whole thing teeters on when trade tensions ease if they don't ease and you get to the end of the year and we're still in this standoff, not only over trade -- >> they look like they're going
to get worse, not ease >> if that happens then yields continue to go lower >> you guys played a probability, right >> well, okay, but -- >> where's the probability that it's likely to get worse before it gets better >> probably 2 to 1 but you can't ignore the possibility a 1 in 3 that things get better you can't ignore the probability that things in china get worse both economically and socially we talked a little about the social aspects of that yesterday. you can't sit there and say that china has the ability, no matter what, to wait to the election in 2020 it's just not a factual statement to say it's 100% >> so what do you want me to do with that or what do you do with that when you are saying -- >> good question >> twice as great a chance that things worsen than get better, do you want me to buy stocks on that 1 in -- >> yes, i do, steve. because you know what? that's priced into the market, the 2 to 1 it's priced more than 2 to 1 that things get worse. >> what really concerned the markets today was that donald trump came out on the white house lawn and discussed the
fact that he thought the markets would be down more which suggested, i think, to all of us in the market that the trigger for him counteracting this with easing back the trade tensions is actually less than the market thought. >> which he told to eamon javers before he was about to get into marine one that he knew that the market -- these are the president's words to eamon that he knew the market was going to fall this whole notion that -- >> he was also at ground zero on september 11th >> there's this notion that, well, you know, come hell or high water the president cares about what the level of the dow is over everything else. and i think that's overplayed a little bit, too. >> i think it's a timing thing and i don't think you can ignore the political considerations at stake here and president trump is now playing for the 2020 election. he's not playing for the next couple of months of s&p 500 returns. but the problem is, though, that the economy is a battleship that
cannot be turned on a dime and so if we are escalating tariff tensions while the u.s. economy is slowing, we're not at a point of calling a recession but at any given time, there's this margin of error and now if you're going to talk about playing with trade tensions while you have this slowing growth, it risks a misstep >> okay. so the next question becomes, what is, if anything, the fed going to do about it part of tom lee's thesis is that you have a fed put the fed is going to continue to cut rates. steve liesman is here, our senior economics reporter. you thought based on your reporting and the conversations that you're having, that the market was probably still ahead of where the fed likely is now we have what is essentially a race to the bottom, if you want to call it. with three more banks today. >> that's a big factor in fed thinking based on the economic data alone. i was thinking a lot about tom's bullish case here and i think you have to ask yourself a question
if you said to yourself, we're going to have what looks to be an intractable trade war between the u.s. and china, and the result is most likely to be that everything is going to be okay, or you said to yourself, global bond yields are falling and there's really no negative signal in that the signal is that everything is going to be okay both of those assumptions defy a little bit of logic. bond yields are falling globally i think because of global concerns about the fallout from the trade war. and about generally weakening economies. i don't think that there's any -- i don't think there's any research that shows that bond yields falling and central bank rate cuts are a perfect or even reasonably even offset to what's happening in gross domestic product and growth generally fed may cut another quarter or another half if the idea is that you'll have this general weakness that's going to justify these kind of
levels of the ten-year, you'll have real economic weakness out there. >> the administration is pushing, arguing because of the weakness that we're seeing and their argument that there's no inflation, that the fed should cut rates further. that navarro is out there saying that, which is a little bit like the arsonist calling the fire department, if you will, because the policy's an architect of this hard-core policy which is affecting the economy. there's no doubt about that. you could say you're in agreement with going after the chinese in the magnitude in which they are like many do. it's the method of doing that which kovasovich was arguing on the last program >> there's something different about what's happened today with this latest round of tariffs the tale of the tape is that our fed survey showed, twice, the market was convinced in, a, there would be a deal between the u.s. and china the market was then subsequently convinced, scott, that there would not be a deal, but they'd
keep talking the market has been wrong about both of those. the question becomes now, how can the president get this back? if there's a tweet in the next second that says china/u.s. talks are on and everything is going well, we're close to a deal -- >> larry said the chinese are going to come here >> but does anybody believe that does anybody believe that? >> i believe the chinese are going to come here for negotiations i believe that >> does anybody believe that's going to result in a deal? and you buy that >> maybe not result in a deal. there's a cried wolf thing there's a lot of information -- >> it may result in a put-off, if you will, of those additional tariffs. you just don't know. >> but where's the better bet, scott? >> may i point out -- >> based on recent history >> no deal, but you don't need a deal >> the tweet is all you need >> what we are talking about here the market is flat for two years. for two years it's flat, scott
okay >> s&p was lower today than where it was 12 months ago >> exactly 12 months ago. so the up side here is that i don't lose more. but there ain't a whole lot of up side if we don't get a deal or -- >> that's my point i agree with that completely so no doubt in my mind they'll come back with more of a positive dialogue. but -- >> really? >> just the positive dialogue. i'm not saying a deal. >> not a deal. >> i don't think there's going to be a deal >> it doesn't take much on either way and either direction we've learned that, right? it's a tweet, a headline, a this, a that, a tariffs or no tariffs. >> so i disagree >> it doesn't take much to pull this market. there's this renewed level of volatility. >> i disagree. i think the market is becoming wary of the fact that even if they have a good discussion, it doesn't result in anything and what once xi flies back and hits china, he comes out with another tweet imposing more tariffs. and we still have tariffs with respect to europe which are under discussion with boeing early this fall and then with
german auto manufacturers later in the fall. trade tensions between the uk and europe and you have trade tensions now between korea and japan. >> and can i add to that you've also got brexit, no-deal brexit which isn't going to just affect the uk and then the heightened rhetoric that's going to come out as we get closer to 2020 election which, when you narrow those -- >> can i button this up? >> the way biden is going, you could have warren and sanders up in the front and think of what that's going to do with the market >> if tom lee is right, which i don't disagree that there's a 2 to 1 higher chance that we have a worse outcome than a better outcome. i am happy to buy the market if my payoff is 3 to 1. but right now, my payoff is even, right? >> i think it's 3 to 1 >> if it's 3 to 1, that's fine but right now if i've taken that bet, i'm flat. if i took it and followed najarian over there and when we're at these bottoms you would
have bought because the market is very, very rocky in this road but over the long haul, it's flat over this time of the trade war. >> you want to talk about volatility and -- >> is there a way to -- >> is there a genius way to play this >> if you listen to a lot of the very smart people that talk about the volatilitvolatility >> we're talking to you. >> the one area a lot of people agree upon is when you get somewhere between the 20 and 24 range, that's a no man's land. under 20, things start to happen and you feel more comfortable. over 25, there's a lot of distress out there and a lot of that -- i don't want to say panic, but certainly fear. one thing that gets created out of this, steve, when we get these sell-offs, and if they sell off quality names, i am one of the guys along with these guys where i'm looking for a quality name and i can use that implied volatility that's spiked to sell. >> i want to read you, this is kind of off topic, but it's interesting nonetheless. the editor in chief of the chinese and english editions of
the global times in china has just tweeted, a few moments ago. i'm going to read it washington's repeated bullying has made it meaningless to continue trade talks in the short run. china is mobilizing internally to fight firmly with the u.s. and all official media is participating in the mobilization china and the u.s. are caught in a stalemate worse than last round. okay so that's some of the rhetoric, if you want to call it that, that's out there >> and i want to go back to the fed. this is an important point and case for those who are more bullish. you have to decide how much of the slowdown that we're seeing is from trade and how much is from the lagged effects of fed tightening back in 2018. this is hard to do n it's a discussion we have a lot at wilmington trust you have to sort that out. because if a portion -- if it's all from trade, then the fed really does not have the medicine to treat the ales of
the u.s. economy if some of it is from the lagged effects of the fed, which some of it is, then the fed pulling back and easing should help to give a little bit of a support to growth. >> let's bring in another voice. paul richards is the president of medley global advisers. he joins us on the phone paul, you there? >> i am. hi, scott. >> size all this up for us >> i think that the market needs to think where we were a week ago. a week ago, things looked pretty good and then one tweet changed everything now we're so focused on central banks. i'd argue that it's not the central bank issue now this is actually about in 25 days' time whether president trump chooses to go ahead with tariffs. if he does, then i think we've got a major currency war on because i think that the retaliation for tariffs is clearly a very clever move by china by targeting the currency in and around seven. so to me you've got 25 days. i think the president knows that if you look at his history this year, a four to six-week
shutdown in washington then he had the spat with mexico that was three to four weeks, and then the issues early summer threatening more tariffs on china. he tends to fight for four to six weeks and then does a deal and i think ultimately, diplomacy will occur or not occur at the end of this month between xi and trump they'll have the sunday afternoon call that something happens or doesn't this is not about central banks anymore. this is all about a trade war. >> let's talk about this morphing into a currency war as you talk about i know the kinds of people that you speak with, paul i know how closely you watch the flows in the currency markets. is there an expectation among those that you follow, speak with and see the flows around that the chinese currency is going to go even lower >> their view right now, and my view as well is that this is on a cliff edge and again, it's down to trump. i'd say that overall the bias has shifted. they're very concerned that
things will deteriorate between the u.s. and china and, hence, we'll get a move to 740, 750 in the yuan and that would be a disaster for currencies globally. my personal view is it won't happen i think the u.s. and china will get back to speaking but the risk is inevitably there, scott this wreaks of 2015 again, and we know what that did to the markets. >> we do we do. >> huge nervousness. >> we certainly remember the summer of '15. bank of america is talking about that today, about that level, if these tariffs go into effect, steve. >> i think one of the things we make a mistake in trying to talk about market reaction as a logical set of linear functions. you get dislocations like this, scott, and i don't want to go back -- i think i need to go back and recall what happened in '08 and '09 when things blew out that had no relevance or connection to anything you have dislocations here big moves in yields around the world. maybe this is all visible to us what's happening, which is a rally in bond yields and a
falloff in stocks. but maybe there's other stuff that goes on in the repo markets and in the plumbing of the financial system that gets dislocated those are my concerns. and i don't think those are entirely -- >> i don't think, you know, people are prepared to want to deal with. >> i think that underlies the trade here a bit you have this kind of dislocation in markets, and you cannot know everything that's going on all at once >> paul richards, thanks for calling in wanted to get your thoughts on the currency market. and all that said, if you talk about what do you do in the market, to be a little more granular than tom lee who is talking at a higher level of the market at large, you're short the xlf today. not a surprise with financials getting creamed. >> i know the value story. i've been hearing the value story for ten years. i don't know how many value players still have their jobs that can go do it, sflft tinvesh
banks for so cheap they trade in correlation to rates. rates are going lower. they're not staying where they purpose i can't bet on a trump deal with china. i just need some protection against the rest of my portfolio that still is in the markets that's why i did it. also bought the sh again, that's just a hedge i found some of the premiums to be attractive in terms of selling calls or buying puts, but not enough of them where i really wanted to mess around with that. >> steve, let me come at you from the other side. you say you're doing this for protection -- >> hold on it's not just protection if i said that, i misspoke it's also because i believe that bank earnings continue to climb. >> you mentioned that with regard to rates. why not go short the overall market here's why i'm saying that if you're wrong, and there's a tweet tomorrow, or if the -- if everything is priced in for the negativity that's there today and you start to bushel higher,
the banking sector is washed out. the market may not be washed out but this sector is washed out. citigroup, goldman sachs, down 10% plus and they rebound quicker than the overall market. >> of all of the things to look at in the market as being opportunistic around, why in the world would it be the banks? why? >> let's milwaukee sure we're asking the right question here >> i thought that was a good one. >> he's talking about shorting it that's a lot more dangerous than what you're implying which is, why buy it okay that's a different question. he's shorting it i'm saying there is risk that this goes to the up side more than it goes to the down side if you want to -- >> i'll make so much more money in the rest of my portfolio which has more gabeta in it tha the xlf. >> i'm doing it for a call overall. >> i think there's limited room to the up side even if you see a trade truce, which i don't think is going to happen any time soon, you'll still not see business
confidence snap back and not see the consumer confidence snap back either. i think what the problem -- >> are you shorting the financials >> i'm under weight the financials, absolutely >> are you shorting them that's a different answer. >> well, yeah, it's -- i run a balanced book. i'm underweight the market overall. what's concerning me right now is getting back to pete's earlier comment about volatility is that the currency market right now, look at the cvix. you're not seeing any volatility in the currency market that's the heart of where you'd expect trade tensions to hit i think the market is still too complacent and we could see more room to the down side in a very lack of -- in a market that's not very liquid. >> they're adding to loan loss reserves still adding >> speaking of pete. as gold continues to rally, how many times have you come on with unusual activity around the gold -- >> gld since june 1st is 27 times its hit. we haven't highlighted every time of the 27, but we've done it at least once a week, either
jon or myself and the gdx. look at the miners they were 22, scott. now pushing at 30 and pushing above 30 and they continue to see option volumes come into these things and they are looking more and more and more. i was about to take off my entire gld position i had on today. i took off what i had but i rolled it up because what are they doing they're buying the 150 strikes in november and december so people expect to see gold continue on this move to the up side i'll give you a teaser i've got something in the medals world that's going to be part of the unusual activity >> what would it take, september 1st seems to be the big deadline that's the tariff deadline then another fed meeting after that what would it take for the fed to do something between now and september? >> there are some mixed messages -- >> between now and september >> yeah. >> what would have to happen a precipitous drop in the stock market probably. and i don't know one or two economic reports that suggest
that there's a higher probableity of recession >> the fed must know as other central banks continue to act and as i have said earlier, this race to the bottom, it gets further and further away from the rest of a slowing world by not doing anything more. >> yeah, but it's like walking toward somebody who is walking away from you. right? the fed cut rates and what happened today is other central banks cut rates more so i don't think the fed is going to be in the game of chasing other central banks though it does think it has to probably bring its yields in line let me say one more thing, and finish that up, which is, the fed does not want to be in the game of cutting rates in response to tariffs being put on >> they may have no choice, right? the game is being played >> i think where it wants to be, and i cannot know if it will actually have this choice is cutting rates in response to tariffs hurting and visibly
being seen hurting the economy i think that's the rationale it's looking for it wants to -- it desperately does not want to be seen as an arm of the administration executing administration policy by cutting interest rates in response to tariffs as an offset >> i'll give you that. the flip side of that is a fed that -- >> you don't have a choice you have to take that. >> a fed that you could make an argument was too slow to see the initial impact of the trade war and the tariffs on business. and may not have tightened in the magnitude or the speed in which they did had they had a better handle on data that's harder to see rather than the data they're used to looking at. >> i don't know about data that's harder to see what you are saying is that the federal reserve should have assumed that president donald trump would put tariffs that the broad market did not expect on one time and would put broad tariffs on that the market did
not expect a second time >> even at the beginning of the tariffs -- >> which person around this table had a double bet on the increase of 25% for the first $200 billion and had another bet on the 100 -- on the 10% on the remaining 300? i don't think anybody at this table did. maybe the fed should have understood that president trump is going to put higher tariffs on and taking out preemptive cuts that's not your independent federal reserve, is it >> they make a credible argument that the december hike was a mistake. i think you can make -- >> i think you can make that argument i don't know that i agree or disagree with it it's pretty clear that what's happening now is this manmade, i guess i mean that manmade, artificial weakness to the economy and chaos in the economy. >> i think fairly can say what happened with the 3 p.m. is a self-inflicted sell-off that we've seen -- >> it can go away with a tweet you want to make policy on that? >> tom lee's point
we're getting all bent out of shape and falling off our shares and tom lee says we can get right back to where we were with a tweet or a headline. >> let tom lee -- >> and i think part of the discussion and jim brought it up is how much is priced in we put out a piece this week on this a 3% decline in one day for the s&p, it's pretty rare. three months later, market is up 87% of the time. more importantly on the vix if you look at the term structure, the four-month is now lower than the one-month. we had an inversion. five of the last seven times that term structure inverted we bottomed within days so i think the market has repositioned more than people think. that's why -- >> just to add to that i don't want to give the impression i'm more bearish. i have more exposure more long exposure now than i had on monday but still not back to where it was. >> all right >> just choosing my spots. >> tom lee, thank you. steve liesman, thanks to you as
always i want to give you a programming note for you as well tomorrow on "halftime," billionaire investor carl icahn will be joining me for an exclusive interview. lots to talk about you could say the least. we'll obviously touch on what's happening in the markets it's also the day anadarko will vote on the deal to be acquired by occidental, a deal mr. icahn has been critical of he has a nearly $2 billion stake in occidental. the $10 billion deal with berkshire hathaway got taken to the cleaners by buffett. icahn also wants four board seats which the company has rejected it all adds up to our interview tomorrow on "halftime. we'll find out what carl's next move may be and we'll do that tomorrow on the show there's oxy shares down about 5% let's talk about another stock that's down about 5%, too. disney missing on the top and bottom lines they blame the disappointing results on the ongoing
integration of fox, increased streaming costs and the weak theme park attendance. i'm going to turn to you >> this is a name i thought, when you look at the run, it makes sense we'd see a pullback. when they delivered the miss and the miss, that gave people fuel to say i'm going to back off i think that's a mistake i am looking at this stock now as it's pulled off as an opportunity. i look at the quarter and i understand all of the different integration issues that they have had to go through the disappointment with some of the fox in terms of the studio but i still think when you are looking at content and a monstrous content provider luke th like they are. they've been late to streaming, and the money they're spending now is what we're talking about when they're saying late they're having to flush all kinds of money that direction right now. and because of that, that's been a little bit of an issue a bit of a headache. this is still a great company and iger, i think julia boorstin was saying he's extended multiple times will he continue to extend most likely. so i think he's the right guy
for the job. >> 150 is the price target that moffett nathanson reiterates along with their buy rating. >> if it got to 150, i'd be out. i mean, i am looking at 150 as well i think that's a level it can get to but given where it is right now on this pullback, that's the better opportunity to buy some if it got that high i'd absolutely get out >> the content push and investment to get the content for direct to consumer streaming is really interesting. and we talk a lot about disney versus netflix what we heard from bob iger was quality over quantity. and i think this is a really important point. netflix is catering to a different audience than disney especially if we're talking about their bundle disney plus, hulu and espn if i think about netflix and how you have to generate that constant stream of content for your adult audience compared to the disney audience. i have a 4-year-old. she does not need to see a different movie every day. i can recite the words to
"finding nemo. it's that brand and it's that quality. >> what about netflix since you mention it netflix is down 20%, a little less than that, over three months >> look, i think -- >> what turns that stock around? >> i think what turns it around is when you see what the offerings are going to be from apple, from comcast. and when you see how the disney offer takes off. i think there's room for two players. i think disney has a very defined universe i don't think it's got a big adult universe because hulu and espn plus, while espn plus has 2 million subscribers now, they'll have commercials when you go on streaming, you don't want to pay for a service that has commercials however, for the kids' content which won't have it, that's positive if you are an daushltadult, i'm sticking with netflix and prime which i get as part of my prime membership >> so disney is on a list today of bank of america's 17 idiosyncratic growth stocks at what they say is a reasonable
price. and there are stocks we talk about a lot. amd, salesforce. we can stop there. domino's hilton, carmax, merck. how about those names in this environment. >> i don't agree with the eight. i don't agree with the amd call but i haven't agreed with it for quite some time. it's simply too expensive for a chip stock if you think this chip stock is different from the rest of the chip industry -- >> didn't it just get a lot cheaper? >> not cheap enough. and if we're talking about this, the bank of america, the context there is, what do you do in an environment where trade tensions linger every chip company is going to feel that. every chip company the 2 to 1 odds in my opinion are what continues chips of any type are not going to perform well in that environment. >> that's a fair point what about salesforce? no one >> i love that name. i've been looking at that. i'm very close to deciding if i'm going to actually put that position on because, hey, we
talk about implied volatilities and all that scott, you can go out two months, sell it just out of the money call right now against the salesforce long position and get about 7.50 that gives you that protection to the down side and up side room and if they take it away, they take it away those are the kinds of stude opportunities that are out there. the biggest issue anybody on the desk would have it trades at an incredible valuation yes, it does, but this guy knows exactly what he's doing with the acquisitions and that's a really well-run company >> valuation umbrella around the whole market that supports this valuation. so i can't put it on a position until i see it stabilize, the market that is and this would be one of the first ones i bought facebook, by the way. >> tell me why >> it's one of the names on my list it came down enough. sure more down side to it. >> you've been in and out of a lot of stuff super short term is this one of those or is this long-term discount bargain, i'm buying >> yeah, not a full position by
any stretch of the imagination, but i also added a little to boeing i got down to a minimal position in boeing. i added to it. foolishly at this point but hopefully works out. >> and i think there are places you can pick your spots at this time we tend to think in sectors where in my world particular, but i think boeing is a good example where we like, within industrials, we like your aerospace and defense over some of your machinery companies because those are going to be more tied to what we're seeing with trade and uncertainty in the global slowdown. options bulls. they are jumping in to one commodity trade up big today pete alluded to it earlier what the next big bet could be first, a check of the s&p sectors this hour. we'll take a look and see what is driving today's action. it is a down day for stocks as you know s&p under some pressure. there we go. materials and staples and real estate are in the green. everything else is in the red. 6.p down 2 "halftime" is back in a little more than two.
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today. they started this buying exactly here, june 3rd and it just continued on the way up there's been about six or seven different hits in the slv. one just a week or two ago this one today, what i really like is, here you can see at the september 17 call, stocks trading almost exactly where it is right now at 16. these calls are only 35 to 40 cents. i think i got in somewhere around that range, 37 cents, something like that. it's a great risk/reward always looking for those kind of trades i love the fact right now it seems like the acceleration of silver if this continues, and they've been right, if this continues, this acceleration to the up side could test the five-year highs of 19 bucks a share. we'll see if that happens. right now i own both the 15s and the 16s in september in terms of these calls. one more for you as well everybody on the desk hates these banks it seems like. a lot of us have talked about how little that they've done look at first horizon, however this is an interesting one because it's not done anything special. i mean, it's up a little bit it's kind of looks like a lot of
the various bank stocks. it's moved a little bit. but today, they are actually buying a very inexpensive call once again september 16 calls with the stock trading just below that level. so it gives you a month. you can see here approaching about 11,000 or 12,000 right now. i love what we're seeing there the risk/reward. i had to buy these do i love the regionals and all the rest of that no when i see this kind of paper, i've got to be involved. maybe this is a name that has something else as a catalyst that pushes this to the up side. i'll be in these for a month >> thank you, pete come back over here. we'll answer some of your questions. we'll do it next and there's still time to reach us we'll hit the big movers as well part of some of your questions please, reach out to us. let's give you a check on the markets as well as we head to break. the markets are off their worst levels of the day. dow at 25,790. a loss of 238 points s&p is down 20 i don't know are we moving at all on these
charlie evans headlines? says development since the federal reserve policymakers cut interest rates may present headwinds that warrant more easing that's what the chicago fed president is saying to reporters over breakfast in chicago. we're back after this. fun fact: 1 in 4 of us millennials have debt we might die with. and most of that debt is actually from credit cards. it's just not right. but with sofi, you can get your credit cards right - by consolidating your credit card debt into one monthly payment. you can get your interest rate right - by locking in a fixed low rate today. and you can get your money right. with sofi. check your rate in 2 minutes or less. get a no-fee personal loan up to $100k.
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we're back let's answer some of your questions. first up, weiss. what to do with weight watchers. ww >> i haven't been involved in it, but they've been putting up numbers, executing for the most part b of a had an upgrade on it from sell to buy. i'm not involved, and i'm not buying it up here even if i were involved, i wouldn't add to it >> jimmy from ralph in san diego. cvs. you talked about that one in the last couple of days. tell me what to do with this one that's up big. >> one of my top stocks. they beat on earnings. beat on revenue. they raised their guidance paid down debt which they have a lot of from the aetna acquisition. that's going to continue through the rest of this year. you're supposed to own this stock. >> joe from malvern, pa. 3m long-term investor is it a buy? >> i am not positive that it is. and i say that as an owner right
now but i'm very disappointed. post earnings, this stock had beaten and they talk about cash flows. some headwinds from china and yet the stock has not performed. so for those reasons, i'd say, i think there are better names out there right now than 3m. >> thank you for your questions. let's talk dollar. it's pulling back after hitting new highs last week. wel ve'lgi you your trades next on the half. welcome back to
"halftime report." i'm seema mody, and this is "futures now." the u.s. dollar following rates lower today. it is down more than 1% since breaking out to new highs just last week. our traders today brian and scott. scott, starting with you, where is the sudden collapse of the dollar coming from >> well, seema, when things get chaotic, it's easy to lose track of what really drives the dollar and over time it is relative interest rates so let's look at some relative interest rates since the end of june, the ten-year yield in germany has fallen by 14 basis points and our ten-year yield has fallen by nearly three times that amount so where would you want to invest here where it's tough to make money by investing in the dollar or someplace else? >> so, brian, where does the particular go fr dollar go from here? it was overbought. and i was a seller now we have dropped quite a bit. they have sort of tracked each other in the month of august here i think 97, traders are watching that if we break below 97, i think
it'll be a sharp move to 96.5, maybe even lower that's something i'm going to watch if i'm going to short the dollar even lower. >> for more "futures now," check out ouweitr bse futuresnow.cnbc.com. "half time" is back with final trades next. >> "futures now" is sponsored by think or swim by td ameritrade think or swim by td ameritrade and cme group. through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade we're pretty different. we're all unique in our own ways. somos muy diferentes. muy diferentes. (vo) verizon knows everyone in your family is different. there are so many of us doing so many different things.
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we also look forward to delivering alpha one on one with vice president mike pence and you can register for tickets at deliveringalpha.com we've got about a minute left. let's do final trades. >> i want to stay defensive in this type of market right now, so iwr, i think it's a good way to get some equity exposure but also long bond proxies >> looking for some yield. meghan chu >> we're looking at higher dividend stocks and dividend growers. so structurally we like these because there tend to be lower volatility and actually outperform the market over time. >> and another yield player. pete >> i'm going over kroger's i've already seen two strikes today, one a little bit further out into september
but maybe there's some upside in krogers. i do not own it yet, but i'm looking at it very closely >> northrop grumman has got good momentum, it's in satellites, communication groans, et cetera. >> agree realty, which is one of the biggest tenants is cvs >> thanks for watching "the exchange" begins now. thank you, scott hi, everybody. here's what's ahead, the great rate scare yields are plunging around the world, and that has investors fleeing the stock market again today. we will look at the global race to zero and what it means for your money plus, the man who called it. the strategist who said the ten-year yield was lower and an even bolder defensive strategy he will join us later this hour. and as trade war worries dominate, what the administration's next move may be and how much market pain they are willing to tolerate. dom chu is here with those