tv Fast Money Halftime Report CNBC August 9, 2019 12:00pm-1:00pm EDT
so you can go to 26, 2700 very easily >> more tactically, 2820 or so is where we hit the lows this week for this move >> all right, bob pisani, thank you for joining us that's going to deit for us here at "squawk alley." melissa, mike, thank you for joining me let's get to scott wapner and the half >> thanks. front and center, the wild week for stocks what it says about where your money will work best in the months ahead it's 12:00 noon. this is "the halftime report." >> big swings in the market this week has investors wondering what to do with their money. one wall street strategist says stocks will likely regain their previous highs that live interview is next. >> plus, semis fall after president trump says the u.s. is not going to do business with chinese telecom giant huawei we'll trade those names and what it means for the tech sector "the halftime report" with scott wapner begins right now. >> welcome good to have you with us on his friday our investment committee
jim terranova, jim lebenthal, jon najarian jpmorgan's top strategist saying stocks will return to their highs. let's bring in one of them today from new york. welcome. >> thank you >> got the note in front of me after this wild and turbulent week, why do you think we're going back to the highs? >> well, look. i think that the market is set up, when you look at just the market, when you look at the business cycle and so forth, it's set up for further upside i think the profit cycle is going to get easier as we go to 4q, something to say about the cycle accelerating positioning is very low. sentiment is extremely negative. i think there's a setup or a case to be made for upside obviously, the market is currently being held positive by policy, trade uncertainty and so forth, and that's where ultimately we need to make a call, and we're sort of thinking we won't necessarily get much more trade escalation as far as the next layer of tariffs go
>> some people, with all due respect, think we're going to get a lot more that you have a trade war morphing into a currency war, and who knows what the next step is going to be as it relates to tariffs. how do you deal with that? >> look, so far, we had phase one and phase two implements and now they're threatening phase three. phase three is directly targeted at the u.s. consumer, or the u.s. voter given that we're entering 2020 and the re-election, i think that's a very risky thing. something that would knock down the possibility of a potential re-election. that's why i'm not very convinced that's something they go forward with. in the meantime, we could see more noise >> you think that trump put, if you will, for lack of a better way of saying it, he's going to try to protect the house, if you will, as best he can and keep the stock market from deteriorating to a meaningful level. >> yes, i definitely think there's a trump put. you could make a case that temporarily there's also a trump caller meaning some of the upside is also being capped for sure due to the escalation
but yes, there's a trump put in addition to that, we're getting also a global central bank put as well not just the fed, but globally central banks are responding relatively quick to the slowdown, which is primarily induced by trade that will basically provide stimulus and act as a tailwind to the broader cycle in the months and quarters ahead. >> how much visibility do you think you have on earnings giving the uncertainty around trade? >> there's a million question marks and what i will say is the following, the most trade sensitive stocks, yes, they have taken a hit. and i think prices are -- that's being reflected in the prices. the sort of call it higher margin, more service based stocks, sort of the bellwethers of the u.s. economy, i think have generally done much better. if anything, in 2q, many of them have revised their guidance higher i think that they are basically coping with all of this relatively okay. high momentum, the high quality stocks should be able to hold up >> it's joe, thanks for coming on today do i need to now think about
profit margins differently than i was thinking about them prior to the president's tweet and as you have indicated, consumer products potentially now are going to be caught in the crosshairs of this trade dispute. >> i am not as worried about the profit margins, let's say, as far as phase three is concerned. we're basically estimating if the president moves forward with this 10% tariff, that's going to basically shave off about $2 off s&p eps. mainly through margin contraction. full 25% would be higher, about $4 off eps so i think s&p can weather that. i think the bigger question is what happens to the consumer, the private side of the market, the small businesses that's the area that is more vulnerable >> i'm sorry, please finish your thought. >> that's the part that's more vulnerable, and that's where i think the focus should be put at and given that, again, the consumer, you know, the consumer at the end of the day cares the most about their wallet, their
wellbeing, their economic wellbeing and so forth, it's a very, very sort of tricky and risky for the u.s. administration to basically impose, call it some form of regressing tax on the consumer, which would basically be phase three. >> you have 10% upside between here and midyear of next year. what role does the fed play in all of that? >> look, the fed is, i think, basically responding to the data, which has weakened again, most of this is really manufacturing slowdown or some form of manufacturing recession engineered on the back of this trade escalation so again, i think the benefits of fed easing, i think, are only going to be starting to basically kick in now. in the coming months typically, there's a 6, 9, 12-month lag, response, if you will, between call it falling rates and eventually sort of the pass through effect into the economy. i think definitely the fed plays a very big role here and the fact that rates are coming down,
i think that's very stimulative. i'll give you one simple example. look at the 30-year mortgage rate it's down 100 basis points that has to help households, consumers, their wallet. >> maybe the drop in oil prices is to some extent as well. we appreciate it we know you made some time, carved out some time for us. we'll talk to you soon >> thank you >> let's open it to the floor. doc, what do we think? signs of a bottom are visible. a selloff is a medium term buying opportunity the macro is far from perfect, but the fundamentals justify higher equity prices is he right? >> i believe he is, scott. i'm sure you're shocked to hear that because i'm usually an optimist about these things. what i'm seeing right now in the data is also that there are very small moves projected. as far as sustained moves. now, this week, obviously, we have seen massive moves. up and down. to be basically unchanged coming in today, slightly up on the week, prior to the 240-point
selloff we have right now. but what i would point out, scott, is 240 points, a, is not that much to the upside or downside b, the projections based on which calls and puts that people are buying right now are very small moves. they're basically pricing 1% to 2% net moves between now and next week. so when you look at things like that, when you look at str straddles, strangles, any way you might want to analyze the data, what i'm seeing more than anything, i guess, is protection being put on out in september by the qqq, the tech, and that's the weakest part of the market here today i'm not surprised to see that. s&p, not so much it's all just very short-term, and again, it's 1.5% and 2% moves. it's not nearly where it was this week when we popped up to the 24 vol we saw perhaps tuesday this week. >> is he right is he right or is he ignoring too many of the risks that are now screaming? >> i wish i could say i know he's right the rb is very little is
knowable my actions speak louder than my words. i haven't sold anything in the last week and a half and remaining fully invest said. i think he's right the reason i can't just slam the table on that is it really depends for me on china, because if things continue to worsen there, corporate confidence will probably drop off as well as consumer confidence. and that will hurt economic growth across the globe. >> we the tom lee on the other day, who said famously now in the last week or so, back up the truck. today, he reiterates it. and he doubles down. he says we urge investors to back up the truck, please. even adds a please to it he thinks the environment is set up that stock prices, joe, should continue to go up tony dwyer said he thinks the s&p to move back to the lows and then you buy where do you fit it. we have back up the truck, and maybe more near term sanguine is dwyer who says wait and then buy
it >> that's indicative of the last week where we were monday evening, i think we would take 2900 in the s&p all day. certainly at the 2822 lows, things didn't feel good, but i think it is about equities and it is about the ability to sustain those profit margins as bubrovko highlighted and it goes back to the u.s. consumer. if you tell me the u.s. consumer is going to endure, stay engaged and continue to spend, then i think we'll be able to see over the course of time a reacceleration towards the highs. >> you're telling me the consumer enough. the consumer strength -- >> it's the key. >> is it enough to take stock prices back to the highs you're telling me to ignore the manufacturing weakness or ignore the global weakness in other areas that the u.s. consumer -- again, such a large part of the u.s. economy but is it that important a part of the stock market relative to everything else? >> i do believe when you're mining for opportunities, when you're mining for opportunities in the equity markets, yes,
that's the critical component of it we know global manufacturing is weak it's reflected in a lot of the industrial stories that's understood. if we lose the u.s. consumer, we have a problem >> a big problem >> we're not revisited the old highs once again the other part of this that's incredibly important is what's going on with energy and what's going on with the financials in the last five days those are the two sectors that are losing the most ground in the last five days we need to at least see some form of stabilization. >> let's welcome in another guest. liz ann saunders is schwab's chief analyst. welcome back >> thanks, guys. how are you? >> crazy week, a wild one. i'm sure your clients are wondering what to do now what are you telling them? >> well, you know, this week was really a microcosm of what's been going on since january of 2018 we're only about a percent up from that level. so a lot of sound and fury not getting us anywhere, and what our message has been since the
end of 2017, which was the time where we moved from an overweight u.s. equities to neutral is don't try to time the market but rebalance more frequently the beauty of that rebalancing it is forces investors to do what we know we're supposed to, buy low, sell high add low, trim high, and your portfolio is telling you when it's time to do something. you don't have to worry about which one of us on "halftime report" has the best short-term market call. that's been our message. don't try to trade around tweets on trade, but really go back to sort of defensive diversified, go back to your kind of tried and true disciplines in this kind of environment. >> what do you make, though, of folks like what dubrovko, who just joined us, a thoughtful strategist at jpmorgan, who says if you're thinking big picture, as you're suggesting people should do today, you have a buying opportunity, the macro environment, while it has issues, is still justifying higher prices.
and that you're going to get signs of a bottom are there. and all of that is enough to carry stock prices higher in the months ahead >> well, in the short term, i think the more definitive sign of a possible bottom is really just limited to the sentiment situation where you saw the spike in bearishness in aaii and some other measures. i think that provides some short-term support for the market but i just don't see how the macro environment is supportive of this being a true bottom here i think that the uncertainty with regard to trade and the knowledge that really, with something as simple as a tweet, it could move the needle in either direction that's just treacherous to try to guesstimate around that i was listening before i joined, and talking about -- one of the guests was talking about profit margins not being under terrible pressure the rub is profit margins for manufacturers of capital goods tend to be much wider. the manufacturers of consumer goods, which is where the next
tariffs hit, are on average less than 5%. unless they want to eliminate the profit margins, you're going to see a greater percentage of companies and industries start to pass those costs on to the consumer if the tariffs kick in, which means less likely a deal is going to happen in the near term, if the weak sentiment on the part of business leaders goes beyond that and you start to see it impact pay rolls and claims, then it morphs more definitively into the consumer side of the economy. that's worst case scenario, but it's hard to bet that's absolutely not going to come to fruition because we have no idea what either side is likely to do next here. >> that's for sure have a good weekend, liz ann, we'll talk to you soon doc. >> i was just going to say she mentioned, liz ann did, about whether or not you could say this is a bottom and certainly not at 2900 do i think it's a problem it's a place where we have hit
resistance several times and i'm sure she would agree the question is was thatbatim on tuesday a buyable bottom that will withstand another negative tweet or another implication exactly. >> will it stick >> exactly >> so in other words, joe's number 2822 or something like that, roughly where the s&p bottomed this week, i believe it will withstand that and that each one of these just becomes less and less impactful to the down side. and that's why i believe dubrovko's outlook, optimistic as it is, is the right one >> let's go a little deeper. below the surface of here. where we're talking about market levels and where we may go let's talk chips for a minute, because they're again in the news today the president says a few moments ago, we're not going to be doing business with huawei smh is having a tough time chips are down a couple percentage points for the week jimmy, you're invested in chips. >> look, you're seeing the effect of the huawei ban in a lot of reports
skyworks and korvo, both had good reports except for the fact they couldn't sell to huawei, and that's hurt both stocks. it's hurt the sector overall look, that is a direct transmission of the trade war into a very important sector for the market very important sector for the economy. it's not getting etter, and there's no reason to think that the huawei ban is going to get lifted any time soon >> you're staying with these stocks that are directly impacted from that >> so i am, but let me be clear about this within the smh, the semi-conductor industry, there are safer plays than certain other ones i like intel here. i think with the balance sheet it's got the dividend yield, the multiple, i find that much more safer than an nvidia or an amd, which i have been talking about for quite some time as being too rich and in this environment where the semis are under pressure, you don't want to be in the richer names there >> yeah. what about intel, jim? i'm going to pish you on that a little bit stock's done nothing
>> you're correct. it has the unfortunate thing is every time the stock price gets going, something knocks it down you may not recall it because it was only three weeks ago, but they had a very good earnings report, and they guided higher and the stock was in the mid-'50s and everything seemed great. what happened is trade war hits. you get the feeling that, remember, the chip sector brought a lot of inventory forward earlier this year on the hopes that the trade war would get cleared and then they could produce more well, guess what the trade war is not getting cleared so that inventory has to get worked off that hurts all of the chip sector, including intel. >> this is a big underperformer. you know, a huge underperformer. why stay with it >> well, because, okay, look, because if you look at intel versus amd, which is right up there, right, amd, i don't have the numbers. >> do you really want to do that >> do i want to be in a 35 multiple chip stock going into a possible economic downturn or a 12 times chip multiple with a heck of a lot of scale
this is an important point that gets lost in the chip sector when times get bad, you want to have the biggest scale so you can still keep your margins. that's intel, baby not amd. i know there's a lot of amd lovers >> what if you want the better chips, which some say amd has a better one than intel? >> and they're trading, i don't have the numbers at my fingertips, but several turns higher on price to sales and about three turns higher in terms of multiples on earnings more than baked into the cake, scott. more than baked into the cake. >> amd has recovered all the losses it had since july 30th earnings it's right back where it was when it began to fall. the equipment side of the semi story is something you want to look at. lam research is going to give you a great indication that's not really recovered. had a great quarter. got up to about $218 and down below $195 it's a name i would look at. i think that's going to give you an indication when sentiment rises again and we see money flowing back into the chips.
i don't think it's there right now. except if you're looking at amd, that seems to be the one outperforming. >> when you look at the movement that micron has made, for instance, today i have unusual activity in micron not going to use it for our unusual activity highlight, but certainly unusual activity out in september, at the 41 strike now, the stock has basically gone from 41 to 48, back down to 41 that's micron. over the last 30 days. that's 18% to the upside, same thing to the sell-off, back down to where it is to joe's point, amd made all the recovery, all the way back it's outperformed all year long. year to date, i have it up 83% that's year to date, not year over year. but year to date, up 83% versus micron, up 30% i think both of these stocks continue to work this epic chip as they're pricing that in for what that's going to do for the servers and so forth, skault, that's the amd
chip going to be huge, and it's not priced in yet. that's why i think that breaks to the up side >> but it is rich. i agree. >> public service announcement here everything that we're saying about amd reminds me of what we were saying about nvidia a year ago. okay it's not that the technology isn't great. it is great. but look at nvidia it's basically half of where it was a year ago don't think that that can't happen to amd, no matter how great their chips are. nvidia's chips are great >> okay. >> public service announcement >> you're allowed to make that let's kick around apple. katie huberty is publishing today, and she's thinking about once again the impact of tariffs and these consumer focused, if you will, tariffs that go into effect on september 1st. she says she expects apple to take multiple steps to limit that impact. yes, she's not, you know, naive to the earnings hit that you could have, but they'll figure it out by working with their supply chain and this is a stock that's like a battleground stock now
>> well, it's a battleground stock because you're concerned it's going to become weaponized. >> right >> i'm not necessarily sure given what the actions have been from apple in terms of buying back their stock that you should have that concern. listen, i don't own the stock anymore. i traded it awfully. i'm stepping out i'm the one person on the desk that doesn't own it. i'll allow everyone else to talk about. >> you violated jim cramer's golden rule. don't trade apple. >> that's why i sit here today because i'm a human being like everyone else. and jim is right in that sense i'm sure jim makes mistakes like that, too. but this is a company that is serial in its attempt to buying back its stock you look at a name like alphabet, which people talk about on the desk all the time you almost wish alphabet would do the same. i think that buffers the decl e decline. >> i'm going to task you this question it brings it back to the top of the show if you competing macro calls on where you think the market is going to go, what does apple see first? do they see $215 or $185
>> well, given that i have got an outlook, judge, on how positively people will react to the announcement of the phones that we all know, because you can put it on your calendar and uand i have been out there when they made the announcement of that new phone, this will be a september announcement at either the apple headquarters or at the masconey center. we know that's out there on the calendar we know based on suppliers and everything else that this is going to be a big deal it won't be the 5g phone that won't come until next year. but none the less, there will be a pretty good surge into apple so i'm going to say $215 before $185 >> even if you get, you know, tariffs on september 1st joe, you take this $185 or $215 >> of course i'm going to be wrong, but i'm going to say $185 i'll tell you why. the sea of liquidity, in the last five years we talked about don't fight that don't fight the fed, don't fight the central banks, don't fight the sea of liquidity
it's coming back to the capital markets and going to geo into al asset classes. the sea of liquidity is not coming until september the vulnerability is you see the $185 before the $215 you see it, you buy it you're smiling >> i'm glad we have different views. jim, you settle it for me. >> i'm with joe, but here's how you square the circle. if you're not in the stock, you have to buy some here. you don't back up the truck, but add some here because you don't know for certain it's $185 the degree of confidence has to be low because it teeters on what china's response is to the latest threat of tariffs >> what if you think if tony dwyer is right and stocks have not hit their low yet in this part of the rally cycle, if you want to call it that barry is on the network a lot. he emails me saying dwyer is
correct. if he's correct, $185. >> you have to hedge your bets if you don't own the stock, own a little bit right here at $200, because the degree of confidence from tony or katy or myself or joe or jon on whether it's $185 or where the markets go from here has to be low when there's so much unpredictable. >> dubrovko says don't worry >> i think he's right, but i don't think you can say that without having some element of worry. >> if tony dwyer is right, you need to emphasize what we have failed to do in the conversation of the markets this week and that's all these other asset classes that continue to perform well i think josh has done a great job talking about reits. >> like what, bonds and gold >> but scott, reits have done well utilities have done well investment rates high yields, spreads widened out in the last couple days. high yields, that's an opportunity. if you think tony dwyer is right, okay, and you're going to first get the pullback, then
hold on to all those other asset classes in your portfolio. maybe equities in isolation isn't the place to be, but all the other asset class are working for you. >> we'll come back here's what else is coming up on "the halftime report." >> next, uber shares plunging after record reporting a record quarterly loss, but one analyst says now is the time to buy. >> plus, jon is traching unusual activity in the market >> and our experts are ready to answer your questions. go to cnbc.com/halftime or tweet us at "halftime report," using #ask halftime. "the halftime report" is back in two minutes. tell him we're flexible. don't worry. my dutch is ok. just ok? (in dutch) tell him we need this merger. (in dutch)
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hey, everybody jim lebenthal here you know what my favorite part of "the halftime report" is? it's when you send your questions in and we get to answer them. so please, send us a question. cnbc.com/halftime, and we'll answer it on-air thanks >> go to cnbc.com/halftime, or get us on twitter with the hashtag #askhalftime welcome back, everybody. i'm sue herera here's your cnbc news update at this hour. hundreds of anti-government demonstrators packed hong kong's international airport in what is planned to be a three-day protest. the move is the latest challenge to the government's strategy of
waiting out the ongoing political crisis, which is now in its tenth week. the airport is one of the busiest in the world >> facebook is once again trying its hand at news the economy is planning to launch a new news tab. according to the wall street journal, facebook has approached prominent news outlets with monetary offers to secure the rights to license their content. the news tab is expected to launch this fall >> and tiger woods has withdrawn from the northern trust tournament in new jersey, citing a mild oblique strain that has caused him pain and stiffness. he struggled in the opening round, posting a 4 over 75 >> i just didn't play well you know, just one of those things where i just didn't hit any good shots, and didn't make any putts. other than that, add it up to a round that broke 80. >> you're up to date that's the news update this hour back to you. >> sue, we appreciate it thank you. also want to point out since sue was just talking about hong kong, that etf, the ewh, is near
session lows i should say, there it is, down 2% today down more than 10% in the last month as well. the chinese yuan is weakening against the dollar in today's trade, doc, you have a comment on that? >> i think the issue is obviously hong kong, fraught with a lot of issues because of the hand off from the brits to beck over to china just 20 years ago or so, and this is an issue that's going to continue to rile folks because of taiwan and what's going on with that. as well as the trade war going on with the united states. so xi jinping is fighting on a lot of fronts and that's a difficult position to be in. >> uber now, those shares are getting hit and hit hard after the company reported a record quarterly net loss of more than $5 billion deutsche bank and several other firms are sticking with that story, though. they reiterate their buy rating. raise the price target to $60. of the calls today, joe, this was the one that had the highest
price target >> it did. >> so talk to me about this. so you can -- you can spin it if you want to use that word, a number of ways they had several nonrecurring expenses in the quarter. okay, that clouded the balance sheet picture. they still lost a lot of money they still have an uncertain road to profitability. >> correct >> you tell me, what do you do >> so i have tried buying uber two times. and both those instances, one was successful, one was rather unsuccessful the equity compensation is not unique everyone knew going into this quarter that that was going to be reported. that's normal coming out of an ipo. >> the i po expenses, the drive recognition awards x that, back that out. they still are losing a lot of money. >> two words that are
concerning, that if you believe deutsche bank is right, you have to have growth accelerating. how is growth decelerating for this company >> i have three words that are important, too cash flow negative >> exactly >> forgive me, i don't know if it was mark cuban that might have suggested it, but i know i have spoken about this i still think that uber is being punished for ipo'ing too late. they should have done this a couple years ago >> too mature. >> i don't know if the -- you may well be right about the ipo timing, but i don't think that's relevant going forward the issue here is what you said, is negative cash flow. at least in the reports i saw, projected out to 2022. and the ceo didn't exactly sound buoyant as far as when profits would show up. what you have is a company that is eventually probably going to have to raise capital. this kind of reminds me a little bit of tesla, which has not been a great stock to be in, except for that initial ride, which was all propagated by this luminous
personality of elon musk you don't have that at uber. all you have is a company that's going to have to raise a lot of cash cash flow losses as far as the eye can see, and nothing to prop up the stock >> judge, one of the positives here was they say although it's wildly competitive, ride-sharing, that is, and the ceo cited this, on our network that as competitive as that is, he sees that bottoming out as far as the pressure on the price per ride however, what they own right now in their uber eats is what they're most vulnerable because that's not defensible, really. that pressure is going to push much lower because that's been one of the bright spots in uber. i think that's one of the reasons that people are dumping it so aggressively here today. >> i thought that, you mentioned the ceo on the network this morning, and faber participated in that. i thought he raised a really good point earlier, just before our show,
whether they were always going to be fighting a battle somewhere. whether it's fighting with, you know, to get market share and keep the market share from lyft. if they're fighting to get into these other bigger markets if they're fighting regulators like, you know, embroiled in this controversy in new york city and elsewhere. is that ever going to go away? >> that's a great point. and it's indicative of why i believe they ipo'd too late. i disagree with you on the growth i'll get to that in a second, but think about the culture. they were fighting the culture fight for many years at uber and that pushed off the timing of the ipo why i respectfully disagree with you, jimmy, is growth is so relevant to this company if we are at the point where this is a mature company and you're not going to see the reacceleration from 12% growth, then this is a company long-term that's not going to hit the $60 ma mark you need to see this company have the growth deceleration
trough right now, 2019, '20, '21, '22, it has to reaccelerate or that's a problem. >> i'm not sure you're disagreeing with my pain point, basically, they have to raise cash do i want -- >> coming up, options bulls are betting on a year end rally for a chinese internet name. first, we give you a sectser check on the s&p 500 stocks in the red. every s&p sector is. almost to the lows of the day, down 34. we're back after this. dear tech, dear tech, let's talk. we have a pretty good relationship. you've done a lot of good for the world. but i feel like you have the potential to do so much more. are you working for all of us, or just a few of us? can we build ai without bias? ai that fights bias? ai that helps us see the bias in ourselves? we need tech that helps people understand each other.
that understands my business. dear tech, dear tech, dear tech, dear tech, let's champion data rights as human rights. let's use blockchain to help reduce poverty. let's develop new solutions with the help of quantum technology. let's show girls that stem isn't just a boy's club. let's make a difference in people's lives. let's do it all. together. let's expect more from technology. let's put smart to work.
welcome back shares of jd.com are down more than 10% in the past month, but bullish options traders betting on a big rally in the year's end. and that's what john najarian i telling us tell us what the trade looks to be >> as you said, stocks up pretty good though from $21 to a high of about $32 or $33 a share. but now it's back down to $27. and at this $27 level, you might see it looks like a double bottom there, and it's starting to bauns off there i believe that's why somebody came in, bought a lot of calls at the january 35 strike that's a lot of upside so you take a look at that january 35s.
initially about 4,000, then 5,000. and i believe pushing up higher than that right now. this is a great example, scott, of somebody who is controlling the amount of risk they're putting on the table because instead of buying the stock at $27, owning these calls for 75 cents, that's what they were trading for this morning, means they're spending about 1 35th of what they would to buy the stock. i'm in these calls i'll probably be in them two to three months second one's angie's list. i haven't talked about this one much, but as it sells off rather harshly, down to $9 or thereabouts, take a look at the upside calls in november 12 1/2 calls i think this thing can get back by the november timeframe fairly easily if the markets stabilize at all, and with interest rates down, a service like this that people use to find people to come into their home to fix it up, which at these low interest rates you might see a lot more
of that, i bought these calls, the 10 1/2s. actually, i bought the 10s, sold the 12 1/2s. i'll probably be in this about two months >> good stuff. come on back over. because we'll probably have a question for you, doc. in fact, the investment committee is ready to answer your questions on mcdonald's, cbs, dropbox, and more you can reach us at cnbc.com/halftime. we'll do that in a little more than two minutes -driverless cars... -all ground personnel...
- ( phone ringing ) - get details on this state program call or visit cbs down 5% today after reporting earnings according to our data partners, two weeks after similar drops, the stock tend to rebound. outperforming the s&p. for more, go to cnbc.com/kensho. >> welcome back to t"the halftim repor report". let's answer some of your questions. jimmy, i have one for you. cbs/viacom we did the kensho on it. walter, viacom or cbs, what's the play based on the merger >> if the merger happens, i think viacom is strengthened more by the merger than cbs is if your question is to pick one or the other, viacom
but if the merger doesn't go through, i think cbs is stronger the stocks are off today because it was supposed to happen by a self-imposed deadline of yesterday. they couldn't get it done in time, but every report is they're still working on it and a deal is going to come through. >> joe, mcdonald's, all-time high today what do you do >> a couple weeks ago, stephanie link and i were talking. we both own mcdonald's we felt the valuation was getting high i'm glad i didn't sell any once again, mining for information on what this company is doing they're refranchising. they're now up to noichb% in terms of refranchising the digital transformation, the kiosks, the self-serve, it's moving the needle, lifting margins. think about the stock over the last four years. this stock is a double since august of 2015 so a little rich on a valuation standpoint, but i think it deserves the premium in this environment. >> doc, jane in florida has a question for you on dropbox, which is getting dropped
right? so do you just run for the hills? get out of it, do you buy more >> god, i would be tempted to get in here, judge i mean, the stock, last year around this time, the stock was over $33 a share, i believe. now you're looking at it today trading at $18 or thereabouts, $18.70 at midsession after just a brutal whack this week i kind of like it down at that level. it looks like the end of december lows that we saw in the market, this one might be right back at that level now i certainly like that as a potential upside play. so yeah, i would buy it. >> cool. we appreciate all your questions. let's talk oil prices. they're higher on expected opec kutsz. we have your energy trades first, dom chu tells us what's coming up thon exchange. >> uber's ceo says the market is not understanding the company's story. is he right? if so, what exactly is it that investors are actually missing
there? plus, why lower rates may not be giving a boost to the housing market this fall a look at what could be holding some of those buyers back. and the global hot spots that could move markets and investors. they seem to be ignoring some of these guys we'll have that and more coming up on the exchange "the halftime report" is back after this break your family is. there are so many of us doing so many different things. (vo) that's why verizon lets everyone mix and match different unlimited plans. sebastian's the gamer. sebastian. this is my office. (vo) and now with more plans, everyone gets what they need without paying for things they don't. new plans start at just $35. the plan is so reasonable, they could stay on for the rest of their lives. aww, did you get that on camera? thanks, dad! (vo) the network more people rely on gives you more.
expectations of more opec production cuts. seema mody in the futures now team have more there >> yeah, it's an interesting divergence stocks are lower but oil is up about 3.7% today even after the iea reported demand grow is at its lowest level since 2008 so let's bring in our traders. jim, anthony anthony, crude is down about 30% now from its highs do you think the bounceback can continue i know they're talking about cutting production >> yeah, they're going to have to cut about 500,000 barrels a day, in my estimate, seema, to keep these prices up in another two months, we'll be out of the season which means crude oil prices will be pressured due to lack of demand. 500,000 a day looks like it's it u.s. production has grown about 700,000 a day since the beginning of the year. they theed to make that up somehow. i'm long right now i think it could work its way back to about the $55.50 area, but after that, who knows. >> jim, what do you think? do you believe in this bounce?
what levels are you watching >> i don't anthony and i spoke about this on air yesterday we both said the same thing. the way the rejected the lows two days ago meant it was due for a short-term bounce. my objective is $55.50, like anthony pchs was i would like to see trade of $54.80 today but after that, i think it's going to have a difficult time getting much high hthan that. it's one thing talking about production cuts and another thing to get the market to believe it >> for more futures now, check out futuresnow.cnbc.com. >> thanks so much. rahthe og up, final trades are stig aadn "the halftime report." this is my headquarters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed
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all right. welcome back let's kick around some earnings. here's your calendar for next week it's chalked full of good ones you got macy's and sysco and invidia. i know you love walmart. i am troubled by walmart and i'll tell you why. theexpectations are incredibly high they're going to need a really strong quarter i am going to be interested to hear ceo comments as well. >> there's been a breakout stock. >> it's been a breakout stock that has pulled back, broke out above 110. i had walmart and i had target i got out of target. i still hold walmart, and i plan on holding it for the duration i think it's -- what's jim's watch? right. that's part of jim's watch, his watch list jimmy. >> cisco systems we really don't talk about this too much but this stock just consistently quarter after quarter beats on earnings it's got knocked down on 7%.
but i think that's a buying opportunity. you got to remember they're making a lot of acquisitions on the software and security side, and that continues to get their multiple moving higher right now at 15 times. i think that's a little too cheap. >> you on this too >> yes it seems a little gratuitous, my friend [ laughter ] >> i don't miss an opportunity you know that. dock, you got a lot on this list >> i like deere, and i like them because of where you started us at the top of the show, scott, talking about apple and whether or not we would buy it at 185. do we see that first before we see 215? this one is one of those also in that kind of a range and it is also about a $15 range, whether it drops from the mid-150s back down to 140 or whether it shoots up, it's been hanging in there very strong despite what happened over at cat so i like this one also keeping an eye on nontech, but tilray just because cannabis
sector has been very volatile. so i've been watching that one in these low 40s >> you've also got macy's and that's kind of the start of the retail sector. boy, what a sector -- i've just never seen something this badly hurt across the entire sector. and, frankly, you look at these earnings reports, what are they going to say about the upcoming quarter and the upcoming holiday season with all the tariffs that are planned to go into effect? it's really a bad setup here i'd be very weary of any of those names. >> the stock has just been awful with invidia the december low was 124 the trade's 153 right now. it's well below the highs from last year. it's lost all of its momentum. the gaming part of it is, but this is a story when you're talking about invidia where the air just came out of the balloon so quickly and i'm not sure what reverse it's like the dow is right now. >> you know what, i just want to tell you about that. take a look at the major
averages a second ago the dow is down 200 plus i think i even said not that long ago in the show s&p's down 34 when we were doing the second check. halved the losses almost across the board. >> here's one reason perhaps, scott. >> -- talking about on the email. >> i know you you know greg, and greg had put out a nice piece this week, kudos, about whether it might be a smaller deal that gets done now rather than a big deal that won't come until after the election so i think that might play into this because maybe they could announce a smaller deal in the relative future. >> we'll see there it is dow though making a u-shape at the lunch hour today. dow's down by 109. that's well off the lows there is the 10-year yield as well it rises, stocks rise. there's the 10-year at 171 final trades doc, why don't you start it up
>> pg&e. this one after the camp fire, wildfires last year just taken apart from 50s down to $6 or thereabouts. it has now tripled off of that $6 level they're buying upside calls. so i like this one on a further recovery >> jim >> so it did this earlier in the week northrop grumman, particularly in the areas that they service satellites, communications, drones, and also, excuse me, missiles as well you think about the new space command that's proposed to be put into place, and that's absolutely going to benefit northrop grumman so we've got a difficult tape here on the market overall this stock continues to perform well, and i think it's going to go higher. >> i can't believe what i'm about to say [ laughter ] snap i mean, years ago, and i was one that beat up on snap the $4 stock back in december i know a lot of people are along twitter on the desk. and rightly so, the momentum, the technicals look good
>> because there was no belief in snap. but snap looked back >> cannot ignore the technical formation. cannot ignore the strong momentum that it is garnering and a tape that's been very, very volatile trading well >> all right you guys have a great weekend. >> you too, scott. thanks so much for watching. "the exchange" begins right now. thanks very much, scott. welcome, everybody i'm dominic chu in for kelly evans today. here is what's ahead searching for direction, another wild ride for stocks today as the president says we may not have a trade meeting in september. should investors hold tight in this tweet-driven environment or is it time to make some moves? plus, it's not all about the rates. a breakdown of why low mortgage rates do not necessarily mean the housing market is about ready to take off. and warming up, we'll go around the world for a look at the global hot spots that are starting to simmer and could soon become the next big issue