tv Fast Money Halftime Report CNBC May 8, 2012 12:00pm-1:00pm EDT
very sage man was alluding to with regard to equities and how possibilities of the way europe is going to turn out, particularly greece, aren't going to be pretty. if you look out, it's going to be the equities that are going to be the last life preserver as the water comes out of the pool, carl. back to you. >> we'll see you tomorrow, rick. that does it for us here. let's get to the headquarters and the fast money halftime report. >> four hours to go until the close, carl. here's where we stand right now. the dow jones industrial average lowered by more than 1%. the s&p 500 also lower by more than 1%, as is the nasdaq off 37 points. this, folks s a big improvement compared to what we see earlier today. we're seeing a big selloff in commodities across the board. let's see what's going on with oil and gold. oil is down $1.79, 1.8%. gold is lower by $36, 2.2%. let's get to the top stories that we are following on the halftime show. we're calling it the socialist selloff. gold, copper, mcdonald's,
caterpillar, everything getting hit on european election chaos. are there names that you should be buying and everybody else is selling? can disney avenge global slow down? you get it, right, avengers? we have the trade ahead of its earnings release later today. and we're watching a key level on the s&p. should you get ready to hit the panic button? our traders are here with the answers you need to know. welcome to the fast money halftime report. we have lots to trade today. let's get to it. we're going to start with the market selloff and the euro breaking through a key technical level. gentlemen, what do you think here? does this mean you have even more pain if we continue to see the euro fall from here? >> absolutely. >> why? >> you've broken all sorts of technical ceilings. confusion breeds contempt in any market. doesn't matter whether it's currency, debt, soy beans. things are confused, and that means lower prices. >> clearly darkest before the dawn. this market is very interesting here the way we bounced off the
47 level. remember 1340 was the low in the s&p back in march. now give them a little hope. now there's a chance if we put in a low for the month, which i don't think we have, but you've got to be somewhat agnostic. let the tape be your guide. there's a chance we go out and take the upper ranges out and put in crazy outside month to the upside at some point. i'm not in the camp at all. let the tape dictate that. the action of names like caterpillar and other names we talked about that have been sort of the proxy stocks of the global growth story have not performed well since february. >> what do you think? >> i'm going to say i think -- i still think lower. we did bounce off those levels that guy was talking about, but the truth is we've seen these bounces before. a failed bounce closed below the 1360 range in the s&p. still weak, still in the bears camp, still lower on the macro level. >> tell me how you're looking at this if you see the euro below 1.30. >> this is still what we were
looking for yesterday. as i said last night, the reason i was not an aggressive buyer yesterday was we didn't see this yesterday. this was what we all anticipated. nearly a 3% sell-off out of france. bill sell-offs over in europe, and a bit of a whoosh to the down side here. when i was asked, john, why aren't you buying here? do you think it's going to bounce? it's because we didn't get that. now we are getting it, to guy's point, now that we are at least so far bounced off those levels and come up rather nicely, that gives us some hope. >> dennis, here's what i don't understand. if we're thinking that today it's more likely that greece leaves the euro, doesn't the euro get stronger because one of the weakest players leaves? >> not until the day is announced. not until greece makes the announcement it's out. i think there will be panic that day. two days, three days thereafter, absolutely. a northern euro made of greece -- made of germany, made of luxembourg, made of the netherlands, will obviously be a much stronger currency.
until then, you're going to have confusion. that tends towards lower prices. >> even if they do leave, the eurozone is going to be left paying the tab. >> germany will be left with the tab, no question. that's the problem the germans have had to face. they've had the tab to bring in east germany. they've only forgotten the cost of that just recently. >> here's the guy causing the sell-off, alexis sipras over in greece. he's saying all these crazy things, he wants to governmentalize the banks and not make the payoff, et cetera. he still thinks he can do these things and keep greece in the eurozone, take a listen. >> translator: i don't think it would be wise to leave the eurozone because greece is a member of the eurozone, and that is our competitive advantage. >> he is convinced that he can convince the european central
bank they should lend directly to greece. stop laughing. he's only 37. >> we're talking about a baby here who has not been through anything yet. to take him terribly seriously, i think, is a great leap of faith i'm not ready to make yet. he is a leftist. let's not forget that fact. >> not a communist. he refuses to call himself a communist because he's not pro soviet union. >> you've been over in europe enough to know, i wish it was just greece. but it's not. spain is a mess. italy's not much better. 17 countries combined that make up the eurozone, they're the biggest economy, folks, on the planet by about 3 trillion more than the u.s. it's a major deal if things go pear shaped there. you throw on top of it a china, even though we would kill for half of their growth, is slowing, probably by their own hand. they're still the best capitalists in the world. you put all those things together, and it doesn't auguer well for us going forward. >> here's what i'd counter with.
what greece is going to give you versus what the politicians are saying now is the road map for the exit from the euro. that's what all the journalists are writing about now. i believe that's exactly what's going to happen. that's a road map that doesn't exist up until now because there was no way to force you out of the euro or for you to opt out of the euro. i think greece is going to do, once they have that road map. to dennis' point about uncertainty, it will be pretty darn certain how you get somebody out in the future and what the consequences are. i don't think anybody else is going to want that, michelle. >> so we have half of the eurozone, john. we basically have three, four, five, or six eurozone countries just wal owing in their own sub-mediocre economies. then what happens? it's either a short blip higher or just sell it now and get it over with? >> not necessarily, grasso. you're exactly right. these are very small economies you're talking about as far as greece and as far as portugal,
okay. they used to be big in telcom. that's not so big anymore, right? >> i think you guys just pointed out the per mutations are endless. when you intersect personality and politics and money and everything else, we're in unknown territory. the commodities are getting really hammered today. copper the biggest casualty of the chaos pressured by a weak euro and european concerns at a two-week low. dennis, what are you doing here? >> you've got to be a seller here. it's not going to rally. slowing economic growth around the world. as guy said, china is slowing, it might well be of its own volition. slowing from 8%. not the 10% or 12% we've had had before. the only place you have any growth at all is in africa in some places and some places southeast asia. not enough to keep the demand higher. put weakening equities on top of it. throw on top of that changes in margin requirements on the cme. >> any price you're getting at? >> lower. >> but, dennis, the problem is we knew that china was slowing,
and to your point, it was their own decision to slow. and 8% growth is still decent growth. i think people are throwing out fcx with the whole eurozone entity, and i think that's probably a mistake. michelle, to your point, i've been looking at freeport from the 39 level here. you never go in and buy anything 100% of the time. just buy 10%. 15% until you run out of cash basically in that one stock. but the truth is you've got to have your downside targets as well. you have to have the exit is more important than the entry. >> the other side, stevie knows this. fcx has not traded well since basically december of 2010. it's missed the lion's share in the s&p. it's the side that everybody talks to. another global growth stock, kinly has not traded well. these stocks like fcx and cat, they always overshoot to the
upside when it's great, but also overshoot to the down side when it's not so great. there's nothing to indicate to me it's going to go much lower. >> copper and metal not the only one taking a hit. gold dropping as well, going to its lowest level in four months. why is gold breaking down? shouldn't gold be moving higher in today's market when you have all this uncertainty? >> it should, and the fact that it's not, that's the telling tell. it should be going -- it should be trading at $1,750, and here we are trading at 16. >> what's the problem? >> i'm going to go to the same problem causing a problem in copper is causing the problem in crude oil and causing the problem in gold. changes in margin requirements, slowing economic growth, and a stronger dollar, all those things, and weakening equities markets around the world. same thing that is sending copper down and same thing putting pressure on grain prices, same thing sending rubber lower is sending gold lower. >> steve, you want to jump in? >> dennis and guy could both speak to this. as far as gold is, you don't want to own gold until you want to own gold. i own the gdx, i own the miners,
and i'm staying long the miners. one day we're going to talk in with the headline that gold isn't going to trade with the risk assets, and gold is going to pop, 10% or 15% on the way up of the that's why you stay long gold. it's your safety bet. even though it's not acted like one for the last six months. >> i'll say quickly, dennis has been spot on the gold story, great job by him. what i think is happening, every time the s&p has lousy days, it feels as if somebody or some group of people are getting squeezed out of their gold longs. i'm a gold bull, and i'm not a gold bug by any stretch, but i think at some point in the next year or so, we'll come back, and instead of a $1,000 handle on gold, we'll have a $2,000 handle. not to say you can't have days like today, but i'm still in the camp the world is set up for the gold to go higher. >> dow industrials, moving back to stocks, caterpillar extending the losses for the day. ceo is saying he is bracing for near term weakness in china. dennis, exactly what you were
saying before. let me get to john najarian who hasn't had a lot to say so far. what do you make of this? >> caterpillar is getting down to the levels where it does, to me, get interesting. like i say, i'm not necessarily a value investor, but i'm looking at this stock as it comes down, just like joy global, and manatuac, a whole bunch of these companies that weaken as dramatically as they have, that's when they get interesting to me. i'm waiting for a little more of that guy adami whoosh, that volume, that signals that all is clear. >> this seems to feed into your topic earlier? caterpillar seems to confirm your belief in this world. >> the reason why caterpillar going down is the reason why -- >> copper is going down and gold is going down. is there anything to buy? sounds like a doomsday thing? >> nothing to buy. >> treasuries? >> hard to believe, but you have to still own them.
it's astonishing, but people forget, when you get down to these numbers in yields, people forget the value of an 01. when you move 14%, the impact on price is nothing. when you move an 01 down here, you move almost a third of the point in the bond market. all you have to do is move loan rates down one or two basis points, and you get a big move. >> here's the thing. there's got to be 40% of the s&p 500 must yield more than the ten year. >> yes, they do. >> why wouldn't you own the stock? you get a better yield, and boy, in theory, at some point the underlying asset actually appreciates. >> the stocks can go lower. as we've seen. >> yes, the stocks can go lower. >> there is an inherent risk being long stocks that i think we found out about the last few years. to the yield point, i don't think it's ever been about a chase for yield in a lot of these treasury plays. look at the underlying asset that basically you trade to get that yield. the assets have moved much more than the actual yield. you're playing these security more than you're playing the actual yield. if you look at a tlt, for
example, it's had a nice move percentage-wise. i think people are using it as vehicles to trade. not necessarily trying to capture a 1.8% yield. >> and people are only using it as a vehicle to trade. let's not kid ourselves. nobody is investing it. gary schilling is the great bull on the bond market. gary will tell you without equivocation, he's not buying them as an investment. this is a trade. >> multinationals, as we mentioned, dragging down the dow. caterpillar, one of the biggest drags. how should you trade these names? dan nathan is founder and editor of risk reversal.com. he joins us with the realtime trade. what are you doing with these names? >> mr. nathan, i like that, michelle. this is a salty crew today. everybody is a little bearish here, huh? >> collectively. maybe that's a sign for a bottom. i don't know. >> no. i'm going to throw a little more fuel on the fire here. mcdonald's, i thought that whole yield conversation was really interesting. here's a stock that yeeltsieldst 3%. the stock is down on the year 6.5%. they just missed same-store
sales estimates for the second month in a row here. obviously, the stock is breaking down. to me, this one kind of -- i don't love pressing shorts on days like this, especially a stock that's down like this, underperforming the market, but it's kind of the trifecta here. i have some decelerating fundamentals. i have a technical picture that looks horrible. stock yuft broke the 200-day moving average for the second time since 2009. when i look at the options market, i'm looking at the realized volatility, about five year lows here. the implied vol is about two points higher than the 60-day realized. what does that say to me? if i want to make a bearish bet in a down market on a stock that's underperforming, i want to use options to do it and define my risk. >> and as opposed to buying the stock, you wait for the yield to get even better. >> forget about buying. i want to press the short. i believe these multinationals with a lot of exposure internationally, they're going to have a tough couple of months. when mcdonald's as $94, i bought
the june $92.50 at the max risk. my break even is 90 on the down side. >> in the interest of being even and balanced, we're going to bring on matthew defrisco at lazard capital markets. he has a buy rating on mcdonald's. what do you say to him, sir? >> i think he brings up an interesting point about the dividend. that's very attractive. when you look on the earnings basis, 2013 is trading roughly 15 times right now. i think it has factored in some of the negative news and has adjusted its earnings growth outlook probably around 10% or slightly less than that for this year. i think the bad news is priced into the stock and more upside given the current valuation. >> mcdonald's is a name wee've loved for a long time. the global comps were disappointing. asia pacific, middle east, probably the worst we've seen in quite some time. does that not bode well going forward? do you think this is a one-off type of situation? >> i think it is concerning
given they gave guidance on april 20th. it looks like the u.s. is actually where they fell probably short also. that's concern in giving new competition from burger king. they estimated 4% back on april 20th. they came in at 3.3 globally. it was more of a miss, i'd say, in the u.s. there. we're going to look at how it bounces back. how some of these maybe they respond with a different promotion. >> matt, wasn't the investing narrative on mcdonald's that it does well in a downturn because people are trading down? they want the cheaper food. is there anything in their u.s. results suggesting that the economy is getting better? >> that's actually an interesting call also in that the last couple of years we've had higher inflation in the grocery channel. the value equation was go out to mcdonald's. it's cheaper. you're seeing cpi at the grocery channel come down as well. it's now around 3% versus 6% the last year. that is a concern. it puts a pricing ceiling on them. that could be a pressure point as well. so it is -- the world's definitely more challenging. i think in the broader picture of overall retail and big cap
consumer names, the stock isn't under performing today. it's out performing. it's a staple to some of the more discretionary names. >> you have lowered your price target to $105 and $108. still higher than it is right now. why bring in the numbers? >> it's a basis off my 2013 number and the multiple that i'm applying, 17 times, and our 2013 $618, slightly below the consensus. that's just adjusting from prior. it was a higher number. >> mr. najarian, you heard mr. nathan and heard mr. difrisco, who wins? >> i think they both could be very right. dan is going to be right, i think, in the short term because i think mcdonald's is a victim of both the pink slime, michelle, as well as the mad cow. i think that's having an effect on same-store sales. i think you're seeing that over at wendy's, and you're going to see it at burger king as well. that's not just isolated to one of those burger producers.
but i do think that then about the $88 level, you want to load up. >> both, oddly enough, michelle, pink slime and mad cow both nicknames of guy adami from college. that's weird. i just wanted to flag that. >> i was keeping that secret. i knew him back then. all right. take a look at the s&p 500. near session lows. got it? there it is. take a look. it's resumed its downturn but not at the lows of the session. still down 17 points. declined more than 1%. 1352.3. we found a bull market, though, in mobile payments. we're going to trade it with the men leading the charges at mastercard. get it? gary flood coming up.
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top of the sell-off we've seen the last couple of days. pretty incredible. $96 for wti. commodities king dennis scarpman, what are you doing? >> i wish i could tell you i'm aggressively short. i have no position at this point, none in crude oil. >> why not? >> wish i had. if i had to do something, you'd be selling it. i'm not going to buy here. i think the reason you've had this amazing break. you heard me talk about it before. i'm going to talk about it here. when the cme reduced margins on members, it reduced the quantity in that market. anybody who had the propensity to trade 100 lot or 1,000 lot is saying i have no liquidity to buy here. i'm out. the funds are by definition long. they're scared. they want out. >> look at the refiners. we've cautioned folks for a while, especially with the massive double tops around 30. that stock's down. trading either side of 21 right now. the knee jerk for a lot of folks this is a value name, jump in. again, stocks like this overshoot. i think tesoro is going to do the same.
would not be surprised if we saw a 19 hit on the stock in the near future. >> bull market. with the continued exponential increase of mobile devices around the world, people are able to pay on the go in all ways. dennis faber joins us live in new orleans with gary flood, mastercard worldwide president of global solutions. >> a lot to learn here in terms of mobile payments. a lot of an audience. i don't know if you brought a little entourage with you, gary, or not. we've got a nice audience. >> i don't know any of them. >> your booth is right there. i've learned a lot, having spoken to visa earlier and you as well. in terms of mobile payments, how far away are we from that day where you can use your mobile phone for so many things, including paying for things and managing your digital money life, so to speak? >> we're in the throes of a pretty big transformation. i think the technology that's out there today, the capability to provide consumers with the experience that they're looking
for. i think equally important, merchants. as this develops around the world, we have to be very firm in figuring out how we deliver what's important to consumers, their experience, as well as how we enable merchants to sell more goods. >> are we there, or how many years away are we? >> it varies. we released a study on monday talking about a development index from 34 countries around the world. it really represented the stages vary dramatically. what's kind of cool, though, is they're moving. they're all advancing. and that the technology from a consumer side is really ramping up. so the consumers, i think, are going to be ready. the affluent population, the young adults, are all very well steeped in this technology. they know how to use it. and they're thrilled. >> right. of course, a lot of europe is, in fact, as much as 60% of your revenues does not come from the u.s., it comes from overseas. a lot of growth markets clearly. in countries that sort of are still dealing with checks and paper and a mail system that may
not work, you're in 210 countries, there may be others. can they just leap frog? >> i think the technology is going to enable them to do different thing. as i was listening to speeches earlier this morning, i've been in this business for a long time, started over 25 years ago, and i can remember when term limits just started to be introduced, converting from paper to electronic back then. i just see this as a great opportunity for emerging economies, economies that can step back and say, this is what we want to do. merchants, consumers, banks, and governments interested in advancing, you can get an awful lot done. >> and you guys continue to see growing transaction volume around the world, even europe? >> the best part about our business is we are in 210 countries. you see a wonderful distribution of growth and growth opportunities, and that's probably one of the most foundational elements of why mastercard is a great company. >> what about security? i would imagine, when some people have their phones enenableneables
and the chip sets are going to be there, it's going to be a huge cost for you guys and the banks as well to meet security requirements >> we've run a network for 45 years. security is front and center. our network needs to work everywhere around the world every time you want to use your card, and it needs to be very secure. we focus on that every single day. there are multiple layers. >> also guys in the former soviet union focusing on it every single day. >> we're at it every single day. actually, with the devices, it's kind of interesting. as the devices are smart, you can actually use them as part of your security device. they're smart devices. authentication and different things that perhaps weren't available with a physical card are there because that device is smart. >> so security is actually enhanced, potentially? >> it can be. you have to stay on top of it. you have to stay after it. >> how many years until we're finally using our phone and saying here you go? i'm paying. >> like i said, the development industries around the world are all at different stangs. >> three years, four years? >> i think it depends on economies in the u.s., five,
six, seven. you need a range because a lot of partners have to come together to make it happen. >> gary flood, appreciate it. >> you're welcome. >> i don't know if you can see them, we've got a lot of nice audience members as well. michelle, send it back to you. >> the set looks beautiful. very impressive. that's always a great conference, mobile payments. john najarian, you heard that whole conversation. how are you trading mobile payments? >> i'm trading it two ways, nxpi for near field communications. i'm going with the technology side of it. just as the gentleman was talking about from mastercard, and texas instruments, which is sort of an under the radar. their we link chip is a fabulous way to play it. that chip is going to be in virtually -- well, not every mobile device, but in a lot of mobile devices. it's not just for bluetooth. it's for payments. that's going to be huge. >> mastercard and visa are monster stocks. consumer credit had the highest
rise since november of 2001, some $20 billion. maybe it's an outlier, maybe it means nothing, or maybe we're at a point where this could teeter. something to keep in mind. >> taking a look at gold as we head to break here. teetering on $1,600. right now $1,601.30. another $1.30, and we're below that level, down by 2%. coming up on the halftime report, bank of america is offering to cut principal on mortgages. what is the bank really hoping homeowners do with their letters? maybe they're thinking it's going to be junk mail and just throw it away. tomorrow scott wapner is going to be back, live at the salt conference with co-host pierre lagrang and black rock's rick rieder. thursday, joined by gulf and capital's albert greenback. very big line of power players. sometimes investing opportunities are hard to spot.
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the key level of 1345 on this down day. >> i think 1345 is your 100-day moving average in the the s&p. the march level you want to look at is the 1340 level. 1345 is your speed bump basically. we're starting to drift a little lower. as i said before, we're still below the 13-day moving average. if we close today below 13.60, still lines up for the bears. >> procter & gamble, leading dividend player, outperforms today. utilities also higher. >> you said procter & gamble, utilities, guy. good job by you. everybody talks about p&g, put up a chart of church and dwight over the last three years. it's completely outperformed procter & gamble. obviously, not the same dividend. it's a much better stock to own. made an all time high yesterday, obviously off today not that much. that's where i'd go, michelle. >> government bond etfs jumping
for a second day as we see stocks selling off. i-shares, barclays, etf up 0.7% today. john, what are you doing with this? >> it's not really a trade that excites me that much, michelle. i think jeff is right. we could see a push down to that 160 level or so for the ten-year, but with it hovering here in the 180s, 190, does it excite me? not so much. >> okay. bank of america shares are falling today. that's despite the bank's new mortgage reduction program, maybe because of the mortgage reduction program. right, guys? we going to roll through this so i can get to diana? >> i thought you were going to throw right to her. >> now in a mass mailing, b of a is offering underwater borrowers a special deal. does bank of america really want people to ignore those letters? diana joins us live from washington. we are so cynical. we're wondering if bank of america says, they're going to
offer principal reduction, but when the envelope comes, they're hoping it looks like junk mail and people are going to throw it out? >> i don't think they want you to ignore this because this is what they have to do to comply with the $20 billion robo-signing mortgage settlement. their cuss t of that was $11 billion, and they have to reduce principal. they're offering 20,000 customers $150,000 off their principal balance. they claim they have done the math and it works. >> what we look at is what the value of the loan will be if we make the principal forgiveness modification and make it a current paying mortgage. and then we compare that to the alternative value, which is if they take that -- we continue to let that mortgage go into default. it goes through a lengthy foreclosure process. we then evict the borrower and sell the property. >> there's your net present value. they do admit the numbers could go higher than $11 billion and say they've already accounted
for that. execs also say they don't expect anywhere near 200,000 customers offered this deal to actually answer. how do you not say yes to free debt reduction? >> we're just worried that some of them get that letter and say, too good to be true. don't trust it. i have been solicited by people who are less than trustworthy, and we find out they don't follow through. that's what we're really encouraging to get the word out for our customers. please take this seriously and please respond. >> now, remember, 200,000 borrowers is just 20% of the 1 million delinquent borrowers bank of america is currently serving. a lot of those are fannie and freddie owned. we know fannie and freddie still not doing principal reduction, michelle. >> i am a bit cynical, dennis. if this were so economically justified, as the guy says, why did they wait for the government to force them to do it? they should have done it before. >> and they're sending a signal, i looked at the numbers. in order to be involved, you already have to miss two to four
payments. you have to be behind. if you're not behind in it, what are you going to do? you're going to try to get behind so you can qualify. that's a terrible signal to be end issi sending. i really do. >> it was a great trade. pete and john najarian had that one called. even here, even the selloff, i wouldn't go near bac at all. it scares me. i think there are a lot more skeletons in the closet. candidly, you could see this at $6 if this goes completely pear shaped. the best bank continues to be u.s. bancorp, by far heads and shoulders above. >> none of us can make heads or tails of this reduction. we don't know the true bodies that could be buried here. you want to look at it technically. it's right at its 100 day. so it's already pierced a bunch of other moving averages. at this point, i'd stay abway
from the name. this stock got down to $5. if this got down to $5, would you give in? >> sure. on these dips, michelle, i think you do that. as guy says, usb, one of the best managed. i know warren buffett likes that. we know he likes wells fargo putting his money where his mouth is. he's a big stake holder there. i think wells fargo could see the same sort of pressure that bank of america is seeing right here. i'd kind of back off on both. >> coming up on the halftime report, are there buying opportunities amid the sell-off? our traders are naming names. don't move.
all right. what are the buying opportunities in the sell-off? grasso, you're going shopping today. >> you want to limit your european exposure. you look at a lot of these names, the ones with the biggest european exposure are falling the most. you look at the coaches, those are down a lot more. down a lot more percentages than your jwns, your north stroms. i'd be a buyer of jwn or a buyer of macy's on the sell-off. >> you're looking at pharmaceutical sector.
>> big cap pharma doing well. pfizer not down that much. floating around levels we haven't seen in quite some time. pfizer on the sell-off, if you're looking to get out of the high flyers you've done well with, might look at pfizer. >> video game maker electronic arts, hit ting a new 52-week lo. drop in active subscribers at the music for its star. it makes me feel 12 again. for the star wars video game. our next guest says not to focus on the near term concerns. john mcgowan is an analyst at needham. he joins us with more. you upgraded electronic arts today. why? >> i've been waiting for this. the weakness as round the business have been well documented and known by investors. i've been waiting for the stocks to get cheap enough and take advantage of relatively weak guidance for the first quarter. >> do you think investors knew the stock got hammered?
a lot of people were really surprised. >> might have been surprised by the first quarter, but the company has been talking about having growth for 2013. that's what they projected. star wars is weak. there's no question about that. that was probably a surprise. tl that's one title out of many they have. less than a single digit percentage of their total profit >> new 52 week low, trading around $14. where do you think it can recover to? >> my discounted cash low suggests about a $17 valuation and $5 a share in excess cash. i'd put a $22 target on it. that's not an unreasonable multiple of forward looking earnings a year out from now. >> i like what you did here. would this make sense from microsoft and apple, anybody? seems like it's gotten whacked enough where this could be an interesting play, just on the m&a front? >> absolutely because of the content. the land grab going on in mobile gaming is all about the content. this company has ten brands that would be nice sized companies on their own. we've seen acquisitions happen
in this space, couple hundred million dollars for one product, and this company has 10 or 15 brands bigger than most companies. >> that would be nothing for microsoft. let's trade it. guy, it sounds like you like the stock. >> we talked about it last night. today is going to be a washout day on huge volume. this is an analyst that is value added. you're looking at something. there's obviously down side here. i think there's tremendous upside. to risk a buck to make five or six in ea here makes a lot of sense. >> john najarian? >> i would go with that exactly as guy laid it out. the risks are merely a fifth of the upside potential. pick it up right down here where it's been hammered to. >> coming up on the halftime report, speaking of entertainment, can disney avenge a global slowdown? that's the aconvenient jury joke. what we achieved here. what we learned here.
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top of the hour. now back to michelle and more of fast half. >> tyler, all right. volatility striking again. the vix surging over 10% today. it's back above the key 20 level. dr. j, what's the trade when fear is so high? >> michelle, it was the first time in 15 trading sessions that we actually got up to that level yesterday, up to almost 20. we've pierced it, just as you said, today. i'd look more for a break about the 22 level to signal any kind of panic. otherwise, the longer we sit here at just over 20, the more people are going to come in and sell volatility. >> all right. disney "the avengers" are super heroes at the box office. the film has smashed the old record for best opening weekend in hollywood history. $207 million they took in. now the question is will disney do the same when it reports quarterly results tonight? joining us on the fast line is janning capital markets analyst
tony. good to see you. how important are "the avengers" for the results we're going to see? they're not in this quarter, right? >> "at convenient jurithe avengs quarter. they have the "john kacarter" hangover. pay attention to the parks. you're going to get much needed diversification with that. these parks have been very resilient in the slowdown. and we're seeing much more of a recovery as they keep rolling out new projects around the world. >> we talk about the ad market. what can we glean from a cbs quarter that was very strong. the stock didn't perform well in the aftermath, but the quarter you couldn't argue with. >> cbs is a leader in broadcast, and espn is going to be a leader in cable. sports again continues to be a very profitable part of the disney story, a. accounting for 80% of the overall operating
income. at the end of the day, i think they're going to be better positioned as they renew the deals with the cable and satellite providers over the coming years, and they command even more in the monthly affiliate fees. >> completely off the subject on sports, if you look at what's going on in the energy market with crude and gasoline prices falling, that's going to help the parks dramatically. >> tony, what's the bottom line? you like the stock. it goes to where from here? >> we've got a $49 target. frankly, i think it could move even higher. disney has the possibility to free up cash flow as they complete some of these park projects. i wouldn't be surprised if we see a future dividend increase or a buy-back as they end up doing that. >> tony wible, thank you so much. disney chairman and ceo bob eiger will be on the closing bell today in another interview you'll see first on cnbc. grasso, trade disney for me here. what are you doing? >> everyone gets so preoccupied trading netflix and seeing where that ball is going to go. i don't want to go where the
ball was, where it's going to be. i stick with the content providers. you could make the case on netflix as well. the truth is disney is a content obviously, what dennis said as well, with gas prices coming it helps the parks out. i still think it's a buy. >> dr. j? >> i like disney as well. and i think people are perhaps not considering the ancillary benefit of avengers, michelle. goes far beyond the movie. it could even extend into the theme parks. that's one of the reasons they bought pixar back in the day, was those characters making them part of the theme parks, and -- >> a new ride! >> right. >> awesome. >> new ride and new characters for the theme parks because they own marvel now. >> and the apparel business. i mean, steve grasso just yesterday went out and bought a captain america costume. >> that's right. i want to dress like an avenger. >> i remember when disney bought marvel i was short an awful lot of marvel that monday, that friday. it was not one of my -- >> you hate superheroes. >> i hate superheroes. >> it's okay. coming up on the "halftime report," what is the next stop on the euro as it breaks a key technical level?
all right. welcome back to the "fast money" halftime report. we want to show you the greek index. it's at a 20-year low. that's the greek a.s.e. composite index. ended the session down 3.6% to close at 620 points. today's move comes on the heels of yesterday's sell-off with the stock sliding 7% after elections over the weekend failed to create a new coalition government. there's talk about permanent nationalization of the banks. one of the candidates there
that's really punishing those greek banks which have already suffered so much. all right. as a result of all that the euro breaking through the key buck 30 level on the heels of two momentous european elections and continued woes on the continent. how's that going to impact the currency markets? how can you make money off global news? let's bring in todd gordon of aspen trading group with your "money in motion" trade. what happens to the euro from here, todd? >> you know, i don't know, michelle, to be completely honest, but the point is from a currency trading perspective there's a lot of news and obviously the news is bad. but from a down side action obviously the reaction to greece and france, tensions with germany has pushed the euro lower and it's barking this risk-off move. but euro tested below 1.30, came back. i'm not trading it per se. i'm more using it as an indicator to get short the risk trade. on more, say, sensitive currencies. >> what are you trading then? >> a couple good currencies and dennis will know this. norway's trading really well. there's a great tie to crude oil market, specifically brent. the spranl dollar with the rva cutting 50 basis points.
weak economic data last night. probably further room to cut. i actually like being long dollar against the norway. we had the trade down for research customers. we took profits. we're going to put the trade back on with the entry here. >> so you're looking ultimately for what levels? >> so what you can do is dollar/norway on the daily chart's breaking a key level, about 5.84. so we tested it initially as the s&p was selling down through 1350. and as soon as 1350 held in the s&p dollar/norway came off, so i want to buy the reaction. we're trading around 5.8350 right now. go long. stop loss down around 5.80. then you can take a take profit around 5.95 for a long-term break through 13.50 on that s&p. >> dennis, you like that trade? >> yeah. i think it's the right trade. the only equivocation i would have, you're risking 4 to make 9. and i'm not a big fan of something worth 2-1. but i think the direction's the correct way. and playing off the crude oil market is the exact right way to do p. >> >> for more currency trades watch money in motion every friday 5-30 p.m. eastern time
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tdd#: 1-800-345-2550 and bring your old 401(k) into the 21st century. tdd#: 1-800-345-2550 all right. let's go over some of the big trades of the day. the s&p 500, 100-day moving average is at 1340. right now it's at 1350. guy, bring back an old tradition, call the closer. >> i think it's probably going to close right around here unfortunately. not good for bulls or bears. i think tomorrow we have to see how it reacts after a two-day sell-off. >> let's show what's going on with copper which has gotten hit really hard today. commodity king dennis gartman your thoughts as we head toward the close. >> doesn't look pretty, don't want to buy it, hard to sell in the hole like this but you don't want to buy it. >> final trade let's go around the horn. stevie grasso. >> procter & gamble. you want to look at what's working. wait for a pullback. if the market bounces this one comes in a little bit you can buy proker. >> jon najar yn. >> pitney