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tv   Fast Money Halftime Report  CNBC  August 19, 2019 12:00pm-1:00pm EDT

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well up 6%, positive news around things they are doing around graphic chips, the chips have been a little volatile, but micron is up about 3 1/2%. that's a good sign for people in that trade. >> and watch retailers as we're going to get a bunch of earnings over the next few days let's get to the judge. carl, thanks, i'm scott wapner, front and center, the current state of stocks, the big week for your money underway it's 12 noon, this is "the halftime report." >> stocks rallying and yields rising was the selloff overdone. a crucial week for retail. earnings from home depot, target and more will the great american consumer keep spending? and a bullish new call on a major apple supplier it's our call of the day this committee is ready to go. "the halftime report" starts right now. >> welcome, good to have you with us on this monday, our
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investment committee, josh, steve brown, we begin with the markets, stocks continue to stage their rebound, rise in bound yields giving relief there. you finally can take a little bit of a sigh of relief that yields have stop going down, maybe they bottomed and stocks did too. >> i feel like we're in one of those moments and we have had them off and on over the years it remind message a lot of that risk on, risk off kind of market environment that we had previously spent months in different years throughout the recovery 2011 stands out. we probably did this in 2015 too. where you have days is obvious, today is a risk on day, and so they sell off all the bond proxy, defensive sec ttors, and lasts a di or two days, and find yourself in other days, they're taking up consumer stable stocks and utilities and everything else gets dumped
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i don't know that we're definitively in that for a long time, but we have definitely been in that the last week or so maybe that's the way it has to be until we get to the next fed meeting in september that's my best guess one thing i think is interesting, itb near a 52 week high, very few industry groups can say they're doing that right now outside of defensive stocks. these are home construction, obviously companies that benefit from lower borrowing rating. what these stocks are telling you are that lower rates are a permanent feature of the landscape. that could end up being wrong, but that is what they seem to be pricing in, and there were some really really cheap names in the group that thought the housing rally was over, perhaps not. >> anastasia do we need to have a conversation on which market is right, the bond market or the equity market. >> this is an ongoing conversation i don't know that either one of them is wrong or one is right. i think what the markets are pricing in is the backdrop of growth that is sluggish, but also policy makers are going to
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be increasingly active here. if you think about the g 10 global ten-year yield, it's .6% and could be headed lower if you have additional central bank easing, which we expect. this is not necessarily so strange, the yields are where they are now, i will say that the yields are pricing in growth rates that are south par, and below what our forecasts are. stocks on the other hand are saying, look, at some point, there is a trump put, a fed put, a ucb put, and that's what the stocks are trading on. >> if you think that still exists, nmike wilson throws col water on that says there's no such thing as the trump put, fed put, they have expired, is that right? >> i think that's true except for a call for a hundred basis point cut. if that happens there's a pretty big fed put under the market absent that, the markets price continued easing i don't know what trump can do other than jawbone it because
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we're out of fiscal policy in terms of the ability of congress to do something. >> feds can jawbone it this week >> they can but you've got an issue with the credibility of powell, so you don't know which way he's going to do he has changed his mind a few times. i don't think the market is putting a lot of stock as a matter of fact, i think the market is leading the dialogue, not the fed. i don't really see that changing i believe you have two choices in this market, you can stand pat the way you are, come back in a year, two years, don't even look at because the volatility is going to continue, or you can try and be opportunistic, selling these major pops and buying the major highly emotional lows that's where you've got to be. >> what about all points in between? you know, if you get this sort of steady, if you get some of the volatility to go away. >> that's my base case, you don't. i think the dialogue continues to be, you know, backwards and forwards in terms of china trade
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and there are two factors driving the market one is yields, i don't think it's accidental or coincidental that you have the ten-year trade back up in the yield today, and now it's come up a little bit, and the market trading higher today or on friday, nor is it accidental we have the china narrative calm down a little bit, if anything be net positive slightly. >> bonds versus stocks, you know, the bond yield is coming down, joe, gave everybody the feeling that a recession not imnegligent but going -- imminent but going to happen sooner than we thought, and economic data is good, stocks should be higher than where the bond market is suggesting they should be. >> 147 on august 15th for a ten-year, that was the lowest since 2016 both steve and josh have cited the relationship between bonds and equities, and i think an stay stasia, you also mentioned the relevancy isimportant wherewe
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are now because of the algos you look at a day like today, and the market rallies, but now look at a ten-year and see it at 158, falling back to your point, how do they respond to that, and you can't as an investor get caught up in the temptation of which way an algo is going to drive. >> as long as bond yields are where they are or lower. >> relevant, that's the question. >> the questions are going to persist as to is there a worsening picture in the u.s. economy, then the data is suggesting right now. >> let me finish this thought real quick the bond yield is relevant because it is being put in at the top of the criteria for an algo, just as oil used to be now it's the bond yield. 6 months ago, it wasn't the bond yield. it will be replaced by something else at some point, but right now, that is what's driving the criteria in these algorithms. >> i think you're absolutely right, the bond yield is the
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yield curve and last week we were saying it's impossible for stocks to rally if the yield curve is going to flatten and invert i think they had a lot to do with the price action we have seen in treasuries as well we look at market depth and liquidity, it was also very low for the treasury markets as well, so i think the fundamental fears got exaggerated by the treasury technical i wouldn't say the treasuries are flashing this imminent recession sign because there's more at play. >> with respect, yeah, the equities can't rally with the yield curve inverting is not necessarily true i know we don't cheer for an inversion. i understand what the ramifications are, but if you look at the last five inversions going back to 1970, in four cases, stocks actually went on to rally for at least a year into the onset >> he pointed that out. >> historically the day of the inversion it doesn't mean -- >> it's an average of 15% gains for the stock market, and i don't know what the fundamental
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reason for that is i would just suggest that -- i would just suggest that historically we had not been following the yield curve as closely as we follow it now. we're about five minutes from cnbc putting a box above the right hand corner where they put the s&p 500. you're going to have an inversion and it's going to say how many basis points, you don't think we're going there, remember when gold had an all time high, a permanent spot on cnbc, oil the same in '07 and '08, bitcoin that will happen at a certain point. maybe it's after the yield curve has inverted or stays inverted for a week or two weeks. this is going to joe's point, this is going to dominate, sentiment and the way we talk about recession. it's also going to dominate the software programs that are written to trade this market are going to behave, and i just think we need to be aware that it's not normally a good sign but also we should beware there's something called the
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hizenberg uncertainty principal, something observed is going to act differently than not being observed and we are so focused on this yield discussion, it's possible that we are talking ourselves into something that need to happen. >> opthey say the selloff is wa over done to make the point that stocks got too beaten up. >> only 3% off the high. >> i don't think it's way over done >> a nice come back in the last two days. >> even at the bottom, this selloff wasn't 10% this sell off was half of that, but, you know, some of the caterpillars, they're oversold the facts are that we're still -- and i'm saying we shouldn't be to the old thinking which is that when you have yields come down the way they are, it presages economic slow down the curve wasn't inverted long enough to predict a recession.
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my view is the textbook isn't written. negative rates and the sovereigns around the world, is now you have 20% sovereigns yielding negatively than you had just a few months ago. there's this drive for yield, and as those instruments roll off, you'll see the u.s. treasuries yield go lower till >> if you knew that, and just playing into the theme of jackson hole this week, if you knew that global central banks were going to do to borrow a comment from a few years ago, whatever it takes, you know they are. they're going to at least try. whether they have to say those words explicitly or not, then the risk is getting too negative because central banks are going to be all in, so to speak if they have to. >> that's right, and then to tie that with josh's point because i can't let him have that one, you mentioned stocks rally, even though the yield curve is inverted, they rally over the next 12 months what i was saying over the near
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term it's very difficult to rally, why they ultimately rally is because the fed recalibrates the policy and this gets me back to the point on jackson hole, the fed cannot just idly sit by and let the trump tariffs threaten further the u.s. economy and see the yield curve where it is, and not do anything so my base case is that sometime between now and september, they will likely acknowledge the risks that are building to the economy, whether it happens at jackson hole this week or not but ultimately this is why we want to be buying in dip in august for september. >> if trump said no more tariffs tomorrow and actually meant it and fired navarro, are we too easy, are we back to the fed has to tighten or things permanently in this cycle slowed for the global economy, and u.s. central stimulus brings us back from the brink. >> a lot of damage has been inflicted on the global economy for the last year, it's not about one more incremental tariff there's a big hole we have to dig out of this morning we were talking
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about germany adding fiscal stimulus i don't think we're all that easy i think we do need to continue stimulus if rates fall back to 0, and president trump does pull back from the worst of the tariff escalations, that could be a pretty good -- >> the market will trade up. >> there's no question. >> if he fires navarro without doing anything else, the market trades up significantly. >> i agree. >> in terms of lowering rates, you have met the point of diminishing returns. i just don't think it drives anything >> stock prices will probably go up. >> they will go up, but i don't think it improves the economy. >> may not. >> you had another disappointing inflation report out of europe today. they have taken it down from 1.1 to 1 it's not helping there he have had negative rates for a while. >> but you're still going to have a bazookas. >> i think the biggest risk what
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josh alluded to, you keep looking at this, you're going to talk yourself into a recession, and that's a bigger risk than an actual recession, slowing economic conditions in the u.s. >> to scott's point, if you know they're bringing out the bazooka, europe is dealing with a yield move fundamental in its nature more aggressive monetary easing is only going to push yields down further and further, the impact on that in the u.s. is a technical yield move, not a fundamental yield move flows of capital continue to go here on a day like today, we began talking about, you don't give up the bond proxies on a day like to today. if the market believed there was a bottom in yields and we were shifting back to an environment where the selloff is way overdone and you want to go in on equities, you would see the faang is up 4% today. >> some positives, though, apple is getting some momentum again the most important stock in the world, about 10% off the august
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1st lows which ain't nothing google is starting to act better, and it deserves to twitter, big gap up after earnings and guess what, that gap held throughout the volatility nvidia has been bottoming for months, now starting to turn higher and guess what the two best performing sectors are performing today u you have retailers, acting really well, and look at energy stocks, more money has been lost in energy stocks than any other set, worse than the banks, i have never seen anything work so bad. having a risk on day and a risk on day where everyone plays,eniplays i think it's constructive. now, oversold, we're down less than 4% from all all time high how can you make that statement as an adult, and expect to be taken seriously afterward. we're nowhere near overdone. tariffs that go into effect on september 1st, and whatever they c concoct next, i'm telling you,
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we're not overdone, the market is going lower the market despises anything to do with increases on tariffs. >> your firm says wait until september to buy it. that's when the time to buy is >> yeah, and the rational for that is we know what august liquidity is like. there has been so much escalation that we're quickly put in the bottom drawer, but the reality is china, the currency manipulate tor, if chia doesn't buy ag products, could we do something else i think the answer is yes. there's plenty of ways for trump to escalate this, and probably the biggest risk is going into jackson hole, i think the fed should acknowledge the yield curve moves. what if they don't the market is pricing aggressively, 60 basis points, what if they dismiss and don't act on that. >> september, they're not going to do all the rate cuts before september. >> no, no, no. >> but on the way to the lead up down the runway.
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>> right >> they'll take a look, too, at retail this week, right, the pillar of what the economy strength has been has been retail you have a flood of earnings next week. >> i want to say one thing that larry kudlow, the of-- a lot of people are giving him hell, bringing up that he was wrong about the economy in '07 he's doing his job, and larry understands something, he may be totally wrong and just saying what the president wants but larry's job is so cheer lead the economy and the market and somebody has to do that because sentiment is unquantifiable, we don't know why all of a sudden people buy $50 at a store one month, and the next month only spend 30, and that happens on mass when we go to recession we don't understand exactly why that happens, we don't know what caused the last recession. we know that the markets and the economy got bad after. you need somebody who will do that role, and i actually think
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larry is doing a decent job of it, but if and when things turn and sentiment shifts permanently. there ain't going to be nothing that the white house can do at that point that's why this stuff is so important for not to get out of hand because when it does turn, we're in trouble. >> okay. this is the week that could, i think, seal the fate on a rate cut and the size of the cut you get because of the retail, because of what it is. right into jackson hole. >> is it 50 basis points. >> can the consumer remain, all day today we're going to look at the state of the consumer. can the consumer remain strong enough to fend off any weakness that's maybe on the other smaller part of the economy. >> the consumer has been very strong i would say this week home depot and lowe's is going to be important. that's going to give you the puzzle of what the consumer is doing. we know the strong numbers from walmart, and we know the strong
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numbers from some of the online, but home depot and lowe's gives you a glimpse into the consumer, and i think the interesting thing is the big ticket items. are consumers walking into cars? >> no, they're not >> are consumers walking into home depot. >> are they walking -- >> big ticket items and cars and things like that had dropped in sentiment. >> but i think getting that insight and seeing what home depot's guidance, are they going to have to cut guidance, the lot of analysts believe home depot is going to have to cut guidance refinancing activity has been incredibly strong, that suggests a very strong environment for home depot and for lowe's. i'm not sure if you're going to get that, you've got commodity deflation. you've got fears of what the economic outlook is about. i think home depot and lowe's this week is going to complete the puzzle. >> and it will be the puzzle for two days, and something else is going to dictate where we go i think that in normal investing
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environments, that's true. i don't think it's healthy that everything is up to date. >> what would you watch more closely retail sales or credit card spending. >> credit card spending has been straight up, right, retail sales, it depends who you're watching, there are winners and losers, retail sales were strong, but if you're watching walmart, then you're all in. i just don't think they're indicating that. >> what's more important to you. before you mplay mc. >> i think the market is driven by the algos, you can't have everything going up on recovery days, you need to have equilibrium on the market in some sense, and you're just not getting that. >> to answer your question, josh, i think credit card sales are more important to watch. there's a whole host of ale alternative data, to gauge what is the football traffic look like, and you know, the credit card receipts that are in people's gmail accounts and i mean, we're seeing such strength
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in payments to me that's just that the u.s. consumer is on solid footing. back to your point, is consumer important or not, if we were amid this slow down, and we had concerns about the u.s. consumer, then we would be in trouble. >> you get to that point and you're in trouble. >> that is not the case today. >> not today. >> you look at jobs and wages, i sound like larry kudlow now. >> if we say the consumer is the best part of the united states, and it's been for a while, and it's the only thing holding this up, the stock market becomes an indicator of the stock market and an economic indicator more so than the past if you're looking at retail same store sales, you're not capturing what's happening in the economy. if you're looking at credit cards and the credit card stocks, you are capturing, almost realtime sentiment because people do a lot more than buy things from retail stores on credit cards they pay for all the services like apple, et cetera which has
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become the engine of the economy. i would focus on mastercard, visa, how are the stocks trading, the payment process, square or pay pal. i think that's the whole shooting match, if the consumer loses confidence, that's it. >> i can't remember where i read it, that, you know, the consumer is smart enough to see the fact that the fed cut rates, you know, does that make the consumer a little more squeamish, they see the environment, they see the fed cutting rates, they start to wonder if the economy is weakening at all >> the average consumer is not looking at it, they don't care >> they may have have looked at it or cared normally but when you had the cut in rates and all of the conversation about the inverted yield curve. >> most consumers don't know what the fed is doing, but they are hearing the r word. >> they saw that and saw the story and newscasts and newspaper, they're smarter than you want to give them credit for. >> when they turn on msnbc, and
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fox, and is a recession bad for the country, is it good, is trump causing t they are hearing that more so than they are paying attention to what the fed is doing i think that r word conversation to your point will do more to shake consumer confidence than anything powell might say. >> this is why all day today we're profiling the great american consumer on cnbc today on "power lunch. at 2:00 p.m., a major boom in the restaurant sector, and we're talking about the sector and the companies with room to run. let's talk about the mission statement from the business round table, sparking debate about the purpose of a corporation, and maximizing shareholder returns is no longer the main goal. a statement signed by almost 200 ceos, including jamie diamond, including employees, customers and local communities. this is interesting. what do you guys think about this story today >> very politically correct. one of the biggest asset gathers
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is esg, environmental social and governance, they picked up an extraordinary amount of funds stolen from other active managers if you don't have a high esg rating then your stock is going to be sold that's the bottom line however, i would say that you have to believe in it also if you take your stake holders, i believe your stock will do better you'll have a better company, a happier work force, happier customers. i think it's the right thing to do it's a politically correct statement. >> remember, anytime you would ask a ceo about hey, why dwryouo this deal, why are you doing this it's in the best interest of shareholders you can't necessarily give that answer anymore it reminds me, i want you to watch this clip. when i saw this, it reminded me of this conversation that david faber had with mike pierson from a deal from back in the valiant
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days in 2015, you know, when valiant was under fire for being a roll for deal after deal, and when the music would stop if ever here's the exchange and i'll tell you why i bring it up. >> you don't need to do deals to continue to have the growth you have. >> we absolutely don't. >> why do you? >> it creates more value for shareholders, that's my job, and it's our board job to do whatever we can to create value for shareholder. >> the overriding value over everything else is to create value for shareholders. >> it's the environment that collectively is not only politically correct but it is the future of in that role, i don't think pierson is going to be able to give david faber that answer anymore, and the question that i would have is what happens to the role of activism in this new dynamic that we're going to create. activism, are they able to just go in and basically argue that you're not creating shareholder value and you have to aggressively in some mechanism,
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do something to incite -- >> i don't think things change >> i disagree, but i think maybe i'm just a little bit more idealistic i don't think this is just the future to joe's point, i also think this is the past in the 1920s, henry ford gave his entire company a raise everyone that worked on the line, the assembly lines and they asked him why he did it nobody made him do it. he said if i don't, how are these people supposed to purchase automobiles from us i think that form of capitalism that used to exist, there is room to come back, and benefit the shareholders and here's exhibit a, walmart, a company that unilaterally, after getting destroyed in the press for coaching employees to utilize welfare benefits better, and under paying people, he said, you know what, here's what we're going to do going forward, they took concrete steps to make it a better quality of life for the people working
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mcdonald's did it also go look at the share price of walmart, go look at the share price of mcdonald's. if you don't believe happier employees make your customers happy in the process of serving them, you don't know anything about business, you should leave. you learned how to be rapacious. that's not how to run a business. >> marc benioff puts out on twitter, and it's sort of to your point as the face of the work force, you know, is changing, getting younger, whatever, americans overall say ceos should take a stance on public issues, support for such action is overwhelming, among those ages 25 to 44. among those 25 to 34 in the fortune poll 80% say they want to work for engaged companies. >> and you have companies that are republican and companies that are democrat, and google is going through this right now they had conservative employees who voiced certain opinions and they ended up with massive protests outside their headquarters i don't know how you do marc is suggesting he's done a good job of it
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i don't know that every company can do that. here's what else is coming up on ""the halftime report"". >> shares of this major apple supplier are up 40% this year. and a bullish new call saying they have room to run. our desk will debate it in our call of the day. plus, john the gianajarian seeing unusual activity. "the halftime report" is back in two minutes. announcer: fidelity is redefining value with zero account fees for brokerage accounts. and zero minimums to open an account. at fidelity those zeros really add up. ♪ maybe i'll win ♪ saved by zero
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hi, everyone, it's joe from the half-time report any questions for me or the other traders go to cnbc.com/half-time >> go to cnbc.com/half-time or get us on twitter with the hash tag ask half-time. welcome back everyone, i'm sue herera here's your cnbc news update this hour. in an interview, british prime minister boris johnson said the uk will be ready to leave the european union with a deal or not on october 31st. >> i'm not going to suggest there won't be, six on the steps of dina streets, there may be bumps in the road. we will be ready october 31st, deal or no deal. in the meantime, we have to get ready for a no deal outcome. >> but today the eu said britain would be hit harder by a no deal
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brexit than the european trading block from eu commission deputy spokesperson natasha bertaud. >> said in an interview a few weeks on the 10th of august, if it comes to a hard brexit, and this is in no one's interest, it is the british that will unfortunately be the big losers. this is the situation that we see. >> and that is the cnbc news update this hour scott, back to you. >> sue, thank you very much. sue herera shares of nxp conductors getting 40% this year. raymond james says there's another 11% upside ahead that's our call of the day does the desk agree? steve weiss? >> i own the smash and that's enough, so participating, 11% doesn't get cryou terribly excited. >> i know, but after 40%. >> i think the semis keep going. i like them, particularly with
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huawei, if you keep relaxing, they'll go, but i like the sector, the only place you're going to make money in the market, or the best place to make money is in growth, and you still have growth. stay away from the commodity stocks, but nxp, sure. >> for you to believe that nxp can return, it's actually traded relatively well considering it's had four consecutive quarterly declines because of automotives. we have to believe there's a cyclical bottom in the automotive component, which is the biggest revenue driver for nxpi the cyclical bottom is not really about north america it's about europe, china if you believe in that, you follow along, go with nxpi, takes out the highs, you would offer you're better off in texas instruments until you get confirmation. >> you have had consolidation in the providers to the autos >> yes. >> so that's helped. >> diode is another one. >> i think it's important to decouple from some of the secular growers. we think semiconductors is one of the best ways to position for
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a lot of secular growth happening in 5g, that's happening in artificial intelligence and so forth, so i actually like owning semiconductors here because we did get a bit of a reprieve from huawei, but also it's the data center spending, this quarter slowed to about 7% year over year growth rate, and next quarter, expecting it to pick up to 21% couple that with a bit of a trade war reprieve, i think you have a strong race. >> 108 is resistance if it gets above, stock doesn't have resistance until 120. decent risk reward but if you wait pulling the trigger, if you're a trader, better off if you're an investor 14 times earning, sounds cheap, there are a lot of semiconductor companies selling for less, and it's hard to get excited about cyclical semis and the ones that really need a strong economy and you're just not going to get it, there are other names i like better. >> let's give wia quick thoughtn
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nvidia stocks up another 6% today >> it's coming off strong earningings a earning, last year the hot of missteps and the stock fell off the cliff. seems to be in a bottoming process for a couple of months has not broken out or anything like that. if you're long, you're feeling much better about it right now than you did earlier in the summer but i think that it looks exactly like 50 other chip stocks i could give you. like it's not -- it hasn't differentiated itself lately a lot of them seem to be asking this question, are we global recession or not, and that might determine the next 20%. >> it's also a magnet for speculators in the chip space. it's one that people love, interested in gaming in particular >> it moves. >> they get rewarded. >> are you confident that's the bottom in gaming. >> no, i'm not comfortable that it's the bottom in data centers either it's been a rough year for them, rough year and a half, dxc which i just bought is shoving three data centers i would love to see it come
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back i think it will as 5g rolls us. >> i think nvidia is an example of a secular growth opportunity. it used to be a gaming stock, and now more about ai, and we have hot chips conference in california this week, so at lot of these ai chips companies are getting some notice. coming up, if you think bond yields are bottoming, what are the best sectors to be playing right now? we'll give your trades for today's etf edge, first, though, a check on the s&p sectors, energy leading the way "the halftime report" is back after this 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.
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i can't believe it. that sophie opened up a wormhole through time? (speaking japanese) where am i? (woman speaking french) are you crazy/nuts? cyclist: pip! pip! (woman speaking french) i'm here, look at me. it's completely your fault. (man speaking french) ok? it's me. it's my fault? no, i can't believe how easy it was to save hundreds of dollars on my car insurance with geico. (pterodactyl screech)
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believe it. geico could save you 15% or more on car insurance. half-time report, i'm bob, etfs, bonds amid rising u.s. treasury yieldings and easing fierce of a recession. is -- yields and easing fears of a recession. joining me, don dovey of the story portfolio advisers we have seen rates, consumer staples outperform for the most part this year, last few days they have not. cyclicals have done a little bit better
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is there any reason to switch ideas around here? >> i don't think so. i think we're still looking at an earnings recession. we know we're going to have three quarters of extended negative growth. it's tough to see that being a giant risk on the cyclical signal. >> i think the concern here is that basically, yields are moving in response to concerns about a possible recession here. let's not confuse causes and effects here yields have been rising as recession fears have been easing in the last couple of days the president out talking about that is that enough reason to switch and start buying nmore cyclical names. how do you play this right given the gyrations. >> i would stay away from the cyclicals and look more at quality, dividend growers so we have talked about it before in the show, dtrw, evid, for emerge market dividend growers and we still like merging markets and international markets and i think there's three things you want to wait for a risk on period
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first of all, you need real progress in the trade towers, and we haven't had that yet. you want the yield curve to stop flattening you want it to inflect higher, and second you want to have central banks actually start to stimulate. there's the old saying that investors stop panicking when the central banks start to panic. there's no reason fed funds rate should be above the 30-year treasury we need ameaningful drop in rates, and the last thing, like dave said, you want to have stability in earnings. those three things. >> dave, people ask me if yields are bottoming, what's the right way to play it using etfs, what dough do you like in terms of yield plans. >> not a fan of junk because of the problem with coronet earnings those can be riskier than they look i think agency mortgage backs are the play here, mbb, mortgage backs, etf, 7 basis points, 2 1/2% yield, 3 or 4 year duration, that's kind of the
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sweet spot for me right now. >> and that's been a slow gainer throughout the year. on the home builders as well >> a little bit. a little bit there's some risk there of, you know, early prepayment penalties, things like that, and that hurting but honestly, the yields there for the risk you're taking really do seem like the sweet spot for most investors. >> is there any way to play this, is there any way to argue that once you go long, cyclical stocks and short, defensive names at this point, there's ways to do that using etfs. >> direction is a long shore if you're, you know, you want to play that view, there's a short-term tactical trading vehicle you can use. >> anywhere else to go on that. >> yeah, i mean, like i said, if you're looking for that core equity exposure, i would be shy of jumping into tech, and all of those things the thing i would be most worried about is health care that's often used as kind of a defensive play in markets like this, but not in an election year >> suppose we are going into a recession in 2020. i'm not in that camp
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suppose we are is it obvious play to stay in more defensive names where they outperform, should you go into it. >> it's not a hundred percent. the jury is out there. there was a great article, to play this with the purchasing manager index, and how that doesn't work if you are going to play defense, my big advice is avoid health care. >> earnings goes down across the board. that's what i think dave is trying to point out here you're not going to go hiding under a particular sector, correct. >> correct >> guys, thank you very much, m on eft, live show starts at 1:00 p.m. eastern time and dive deeper into the bond yield break down, and a man with over 400 etfs, with what's new in that space. >> the desk coming up, answering your questions straight ahead. you can still reach us at cnbc.com/halftime. tweet us as well we're back in 30 seconds
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welcome back to the half-time report a lot of great questions joe turn it over to you from steve in philadelphia. joey t., do you still feel good about ulta cosmetics. >> sure do your blush looks great today. >> how about my eyelashes. >> looks good. they did extra work on them. >> it was a week from today, mary dillon, the ceo is doing a fantastic job with the company this is a genz play, you think of it to have unreasonable valuations, it doesn't, trades at 28 p, high interest, beta of .96 and 100% u.s. revenue exposure, staying with ulta. >> teledoc, are you still bullish. >> the stock had run up after reporting great earnings and the
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market pulled it down. it's coming back, i'll probably get back into it at some point i don't know that it's a long-term investment for me, but i do feel that when it definitively gets back into the 70s, that will be a real breakout, but the overall outside market definitely has an effect on these things, and so that's what i think i would opt out, but i'm very bullish on it long-term. >> jeff in winterset, iowa, google, 15th anniversary of the ipo, what's your opinion of it. >> i still like it, still own it it seems like it's been longer. >> it does, actually. >> here's the way i think about it, and think about the potential regulation if you try to regulate google, you're going to make it tougher for any competitor to come in, just with the banks, because the cost of doing business will go up to me, this is a stallward of the economy, a stallward of the tech sector, and a stallward of the market it moves slower than others. that's okay. i'm confident this will continue to rise, at least mine will rise over the years. >> last for you, james from
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connecticut, real estate, should i invest in real estate stocks, he wants to know. >> i think you should. real estate, if you look at the read index has done well month to date and year to date, up 3 1/2%, so short-term i think there's a little bit of this rally has been overdone, but longer term if you think about the catalyst for real estate which is lower rates that bode well for the relatively high yielding play, i think that's good cap rates should stay low because of the fed funds rate, so that supports real estate prices and you have a lot of secular opportunities in real estate so specifically i would look in data centers, and i would look in warehouses. >> good stuff. thanks for the questions as usual, and coming up, jon is watching the options market, and found unusual activity today stay with us for his latest trades has a for for you. first, becky quick tells us what's coming up on the exchange >> good to see you, finally in the house, get to spend a little time here. today's gains, the dow and s&p would be high for the third
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straight session what's behind the sentiment change, we're going to take a look plus, trump and top lieutenants say all is well with the economy, why then does he want the fed to cut by a hundred basis points and the battle to become parents juice box heroes, that's ahead in rapid fire. i'll see you cing iomupn a little bit meantime, "the halftime report" will be back after this quick break. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪
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we're back, nvidia has surged fortune 10% in the past after earnings and the carry-ons up 6%. options traders are calling for the bounce to continue jon najarian joins us from chicago with some unusual activity doc? >> indeed, scott i heard josh talking positively about nvidia just moments ago, and, yeah, i'm very positive on it, too. short-term trade though, they are buying the 23rd expiree, friday expiration for the calls, buying all the way up to the 172.50 strike. also bought the 170 strike that was with the stock at 164 or 165 this morning. they started buying about 5,000 of these very quickly like that, judge. now they have traded up over 8,000 of them instead of that
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5,000. they have almost doubled on the session. i'm in these it, and i'll probably be in them close to friday but maybe be out of them by late thursday afternoon second one, take a look at this one in the ag space because these guys are a big one in there with john deere. they don't just do ag, but it's an awful lot of big tractors, and that's cnhi. this one they are buying the september 10 calls only paid about 25 cents this morning. right now they are still i believe right there, 20 or 25 cents. bought an awful lot of those stock at 9.23. again, they are buying the september 10 strike. in about a month i'll in that about that same month. lastly, talked about this one with you, scott, on friday microsoft. huge buying on friday in microsoft. well, it's paying off already today. in the only were they still buying today, the 140s that expire this coming friday, but they were also buying the 142.50s that expire this coming
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friday, so a lot of activity in microsoft. 86,000 of these calls. big numbers in this particular stock, and they love it going into the end of the week people are betting on some positive news. scott? >> love that. >> yeah, we appreciate, it doc, thank you. that's jon najarian in chicago for us. >> thank you, sir. >> speaking of buying, got some moves made on the desk >> weiss, tell me what you did, dxc. >> this is a hot stock i own cxc. mike lowry, the chairman of the board of cxe it's been a disaster however, not to hone in on the najarian brothers' franchise activity has picked up in the options. shorter term, september act at 37, above the share price now. look, i think one of two things happens here, and they have missed the last three quarters, so they do two things. they help clients with their digital technology, and they also do i.t. services. a lot of that business, i would
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say a lot, that business was down 7% and it's going to cloud. down here it's seven times earnings on adjusted earnings after they took the quarter down it's extremely cheap for a company. now, they are not growing, right? it's flat, but growth will resume, and, look, i think it's a perfect acquisition for a private equity firm like vista partners, it's low risk. i believe from my time horizon, i bought the calls and the stock. good stuff what did you do, joe >> swpd out a beapped out a besd took the money from best buy, put it into usb. you're getting usb here at a price level below their reported very solid quarter back in july. >> undeterred by forecasts stock. >> undeterred, 100% u.s. revenue exposure i love usb. >> best chart out there, u.s. bank corp, by far. >> recently traded to its high elf level in two years. >> what about russell. >> i'll pass >> all right we'll step away and quickly do
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final trades still ahead on "the halftime report.
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online now, hunting for yield. read the article on ldgoman sachs' big on trading stocks go to tradingnation@cnbc.com
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all right. we're back time for final trades. it's been great having you. >> likewise. >> final trade >> european healthcare is what i'm looking at it has a nice dividend yield it's a sector that typically outperforms both the fed cut, and it's insulated from some of the political headwinds in the u.s. >> good stuff. >> mr. wooesz. >> disney. it really hasn't recovered but i think it's attractive. >> josh brown? >> new all-time highs for reits and utilities. i think google is a name i like this name and i'd be a buyer. >> you would be an owner >> yes.
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>> mr. terranova >> motorola solutions, msi and i think it trades back to its march high at 225. that's where i think this will go big week, jackson hole, the dow right now up now 300 point, and that does it for us. "the exchange" begins right now. >> thank you, scott and welcome everybody. i'm becky quick in for kelly evans. here's what's ahead today. where did the fear go? a calm sets over the market since bond yields rise what has changed since last week we'll debate a new corporate purpose. for decades the ceos of the business roundtable have put shareholders first, but it appears the tide is turning and the group is redefining its mission. and the great american consumer will a love for online shopping and fast food keep the economy and the markets going? we're going to begin today with the rally. dom chu has those numbers. >> it will today, and i saw what you did, becky i cleared it before be

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