tv Fast Money Halftime Report CNBC August 20, 2012 12:00pm-1:00pm EDT
>> our time is up. at 5:00, head of emerging payments at mastercard. >> that is it for "squawk on the street." looking forward to that. thank you for watching. the "halftime report" starts right now. >> thank you, guys. welcome to "halftime." modest losses across the board. the dow in shouting distance of four and a half year high. here is what we're following on halftime today. america's favorite stock. apple the richest publicly traded company ever. what's next for the juggernaut. find out from an analyst who just met with a top app exec. anti-social returns, facebook falls to another record low. one of our traders just bought it. plus the analyst that upgraded that stock today. we're trading big movers today. first our top story. that's the market meltup. the s&p rally for six straight weeks but how much longer kat bulls climb the wall of worry. guys, a wall of worry it is.
if you were to take a look at what's happening with the market, we're worried about the fiscal cliff. we're worried about china growth. gas prices are the highest they have been ever on this day in history. there's the fiscal cliff. yes, we have the election and also have europe concerns. doc. >> there's an awful lot to worry about. the range of the market right now, again, that's what we look at when we're talking about the vix. pem keep telling me the vix is broken or contango and how steep the curve is with that. the simple fact is the movements in the market are much smaller now. that's why that spot vix has continued to shrink. look at it today, a tenth of a percent to the upside or downside, s&p or dow jones. that's why the vix is shrinking. that's unfortunately misinterpreted people saying there is no concerns at all. there are concerns. you named a bunch. there is a bunch of good stories, apple is one of them.
>> steve, you're the contrarian. is it going higher? >> i don't think it's going higher. it's a summer we're paid to worry. >> how often have you thought we weren't going higher? >> how long? for the last couple months. >> a four and a half year high on the dow. >> listen, when you talk about the market climbing a wall of worry, the market so far has been predominantly talking about europe. i don't think europe is the real worry here. it is china. now, can there be a several month lag? yes, harking back to history, 2008, china started rallying out of the hole, out of the crisis depths long before the united states in 2009. i think we're seeing the exact inverse right now where china is trading terribly. a four-year high, china traded last night to a three-year low. >> china's low, who cares what the shanghai market does. >> we heard in 2008. no one cares until everyone
cares. i think we're very close to that point where chinese worries and international worries in general but china in particular are going to weigh very heavily. by the way, they are weighing heavy on sectors, industrial, cyclicals, caterpillar, already. not as if no pain from china. so far apple and google so strong they are keeping u.s. indexes higher. >> far more breadth to the really we've seen than that. stephanie, do we go liar from here? >> i think we can. there are a lot of reasons to be concerned. i would say this. evaluations are trading at 13 times forward estimate. a lot of bad news priced in. we just came off of earnings that were okay. better than feared. margins were the real highlight in my view. i think they can stay strong. maybe they don't expand from here. i think they can stay strong. companies are doing a great job with cash flow, returning it to shareholders, buybacks, dividends. i still think stocks are really the better or more attractive
place to be. in terms of china, i think we're about to see a real aggressive monetary policy easing there. we're going to get ecb at some point as well. i think, yeah, industrials and mining stocks have gotten crushed but that's your opportunity. >> steve grasso, it's probably good to talk technical levels. that as much as anything could decide where we go. >> 1422 is the level you want to watch. we backed off that. that's been resistance for the last couple of weeks, months. but if you look at it, 1361, that was the defining line when we started to move up and ratchet up, 4 to 5% from there in s&p cash. that's where you want to make that change or change of direction. but the problem now if we break through 1422, then steve cortez will change his mind again, 1442. then 1468, then 1494. then back up to that level.
real quick question, the reason, the other problem with steph's portrayal of it, we're still not seeing buying in that hey beta, global gdp dependent names. people are going for dividends. yes, there are things to buy in this market but not -- >> some industrials have rallied substantially. look at eaton up 26% from its low. they are not close to where they were back in march but made a nice rally. >> cortez, i'm not saying there aren't things to worry about. goldman sachs gives a laundry list of things to worry about, that's why they take their forecast 12 r50 infantry the year end target. don't you feel like the banks have a put under the stock market. >> that's certainly consensus. but i think you should be careful and skeptical of that consensus. here is the main point policy, central bank put. i think this midwestern drought could not have come at a worse time from china.
does china want to ease policy? absolutely. the market is in serious trouble. they are between a rock and hard place with food prices rising so fast. the average chinese citizen spends the majority of their money on food and money. with this kind of rise, i don't believe china it ease aggressively. if they don't, most of the bulls arguments are not on growth, it's about the issue of central bank put. that candy works so long until it doesn't. it's jackson hole, a hole of money where we find out bernanke is unwilling to act before the election. >> how can he when we have housing prices increasing, see the market, as scott said, at a couple weeks high. i don't know how we can anymore other than saying he's there, ready, able, how can he at this level. >> if that happens, the united nations dollar already doing well accelerates even more. i continue to own the dollar. i think the dollar is a major problem for multi-nationals. we've seen it with certain
reports from names like makds and p&g. i think we see dollar head winds from large caps -- >> more on wall of worry, not keeping one well-known strategist sticking by his target for s&p. you've heard the opinions of the traders on the desk today. why are you so confident we go another 85 points higher on the s&ps. >> i'm not a big believer this is about the fed. i think the biggest catalyst here is the u.s. economy is giving a lot of evidence it's facing a soft patch. a couple months ago, there's widespread fear we were headed for recession. really, it never left since last year. a lot of reports, housing reports, universally good. unemployment claims new lows on a four-week basis. good retail chain store sales. two back-to-back confidence numbers which surprisingly went up for consumers. it's a broad array of data.
i think that's the primary catalyst. do you want to be out of this market at 14, 13, 14 times earnings with sub2% treasury when the u.s. economy is reaccelerating again? i think that's the biggest catalyst, scott. in addition to that we're getting help again from the same thing investors have gotten used to now for two years, europe flares, market falls, armageddon runs amok. everyone goes away. european fears calm down and we rally back. that's also helping now. the third thing yet to come is a concern voiced by china. i think by the fourth quarter most emerging market officials will have been easing for about a year, starting late last fall, late last year. then by that time, we'll start to see evidence merging world their recovers are starting to pick up. if you have the united states reaccelerating, europe under
control and china picking up, i think that could be a pretty good catalyst to put us over 1500. >> adopt you think, jim, the markets have been rising because of the floor under the market by better than passenger? if bernanke doesn't give stimulus, if he doesn't come through with action that matches the talk, we could have a problem? >> well, i think that what he's doing and the mood to monetary accommodation in europe is a good thing. i think they should be. practicing only fiscal austerity in europe, there was no way out of that. it was just making things worse. i think what's happened there, germany is headed for recession. that's put the leadership and the periphery all on the same page so we now have an economic union there for the first time all with one goal. they need growth. that's going to bring more easing. i think that's going to help that crisis. here the best thing that can happen here, scott, in my view is the fed stands down. >> that would mean that the economy is starting to really
show some steam certainly better than it has been. >> i just think if we recover from this soft patch, if the market goes on to new highs without any involvement from the fed, the first time in this crisis the economy and market stood on their own two feet. it will start to kill off the idea this is a monetarily addicted market, we're on a sugar high. it will start to bring about this idea in a sustained recovery that will stand on its own. that might raise what we're willing to pay for earnings. >> i happen to agree with you. what we're likely to see just as the fed has said multiple times and will continue to say, they are going to keep rates low through 13 and 14. the fact that they are doing that and there might be some sort of coordinated effort whether it's very apparent owned opaque or whether it's not so opaque will remain to be seen with ecb. in other words, will they once again help bail out europe.
they have done it before. i think they will do it again. if they do, i think that speaks to steve's point about china, because that's china's biggest customer right now. you bail out europe a little bit, china comes back as well. >> i don't disagree, john. i think i'm finally feeling better about europe simply because they are practicing monetary accommodation instead of fiscal austerity. it did not work for herbert hoofer in 1929, it's not going to work for europe. now that they have moved to accommodation, i think with lowering rates, expanding ecb balance sheet, ultimately buying periphery bonds, i think we're going to start moving that crisis in the right direction. that in its own light will help the valuation you can put on the global cycle if it seems more sustainable out of europe. it's certainly going to help china. i think they might revive on their own with the easing over the past year.
>> jim paulson with capital management. jim thanks as always. talk to you soon. >> thanks. >> monetary policy is like a drug and loses efficacy with increased dosage. that's what we're seeing now. as proof, don't take my opinion for it, take the mark, chinese stock market, industrial metals, copper and aluminum. both of them trading in boring, low price ranges. they do not see global growth or global accommodative move higher. >> check in with courtney reagan at the desk, watching stocks with good reason given what lowe's delivered today. >> take a look at shares of lowe's and home depot, both trading lower, lowe's lower than home deposit after disappointing earnings, lower margins and sales. they say they are in the middle of this turnaround. so far it's not working. on the conference call the ceo said it will be likely mid 2013 before they fully complete this phase of the transformation. we'll see if investors can hang on. year-to-date home depot up 33%.
not the same story with lowe's. we'll have to wait and see what can happen here. by and large, i know many analysts prefer the home depot over lowe's in the home trade. >> main traders do as well. stephanie link, certainly seems as if home depot is kicking lowe's you know what. >> the comp differential between lowe's and between home depot actually narrowed 2.9%, differential in terms of comp. that decelerated from last quarter and last year. i think this is a transition story. this is a turnaround story. it's taken a lot longer. you don't necessarily need to rush in today. down %, falls a couple more percent it's interesting. home depot, a good story. it's well-known and not cheap. >> grasso, did you buy that? pullback or how about right here? the difference between the two stocks is quite startling. >> i think you have seen that transition where home depot has been the favorite for a while
now. i think to buy it here is a little late to trade. i did notice in lowe's the comments from its management shifting to every day low prices versus promotions, sounds an awful lot like jcpenney, don't you think? >> you know, what i was literally thinking the same thing today. they were offering fewer discounts. allen talking about the former ceo of jcpenney and so many other retailers. consumers want to know about the discounts. they want it in front of their face. when they walk into the store they want to know things are going to be discounted. the strategy of not doing that seems to be back firing for penney's and lowe's. >> points to a macroscale, disinflationary scale. i don't think retailers have pricing power. when you buy retailers, you have to be extremely careful and choosy about the ones you do buy. although bonds backed up, we have a yield below 2% it's
because lowe's of the world -- >> you look at the walmart, where you see markdowns all the time. walmart sells that to you as soon as you walk in the store. it works for them. world's biggest retailer. >> it's known for transforming the kptd and cell phone industry. we're slicing and dicing one of america's favorite stocks, apple. later, the call of the day, facebook falls to fresh lows. gets in while the going is tough. we'll have answers coming up. how do you know which ones to follow? the equity summary score consolidates the ratings
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all right. welcome back to halftime. i want to point out the markets erased the losses we saw earlier. we're still down modestly across the board. nasdaq went briefly into positive territory. it is positive now, almost 4 points or so. apple obviously helping yet again. go more to apple. cnbc shining a light on america's favorite stocks. we crunched the numbers for the top performing and widely held stocks in the u.s. this hour we're looking at the new market cap king apple, which just became the most valuable stock
to ever have traded. brian marshall analyst spoke to apple cfo and joins us on fast line. welcome to the show. >> thanks. >> you must be in the know if you talked to the cfo. a lot of optimism about what's coming down the pike. what can you tell us? >> obviously apple is a secretive company. we definitely expect the iphone 5 to be coming out in a month or so. i think it's rumored we'll get the launch or introduction on september 12th. my view it probably launches on that last weekend september 28th. obviously they are going to be penetrating the tv market as well as perhaps top spot. there's a lot going on and i think the company feels confident in its position today. >> apple gets the iphone's 70% of profits is what theim phone accounts for. you cannot dismiss the fact this is going to be a monster product either way. it's either going to live up to the billing or it's going to be
a disappointment. ct. we estimate the iphone generates 65% of the company's gross profits, the ipad generates another 20% of profits. so those two products alone generate 85% of a apple's product. there's tremendous scrutiny around the product launches. that's what we're focused on the most going forward. >> why are analysts thinking the apple tv is a given at this point. i can't remember a single person who came out and said i don't think it's happening except for one person we spoke with at the end of last week. i want you to listen to what he said then we'll react to it. >> it will never happen. that was steve jobs dream and vision but it will never happen. the television set business has gone south. everybody is exiting. >> so why is he wrong? brian? who is missing the story here. >> i think just because the
market has gone south doesn't mean apple can't succeed. handset market has gone south but apple does a good job penetrating the planet with best products and making the most money out of it. i think the key to apple, penetrating large markets where they can make a difference. tv will be one of them. will it move the needle from a financial perspective for apple, i'm having a hard time figuring out how but i think that's something going forward. >> brian, steve cortez, i want to ask about another stock going forward, cisco. with apple getting so much attention cisco having a better august, actually outperformed apple. cisco was outperforming. what do you think of cisco from here? can he hold gains, fairly priced? what should investors be doing with cisco? >> i think there's growth opportunities better elsewhere. if you think about cisco, a company with 75% of market
share, switching, growing low- to mid-single digit. there's not much of a growth market opportunity at cisco. therefore i think the focus is transitioning more to capital application, how they basically monetize and lever their balance sheet. now we're seeing the country my great to that. in tech that's a challenging proposition over the long hall. i think investors will be better suited to look elsewhere for the long hall for returns. >> brian, quickly, chances of a stock split with apple. >> i think it's slim. my guess, 20% if i had to throw up an under-over. >> why so small? >> the company likes the larger stock price. obviously it minimizes volatility, we'll say. shares traded. i think that's what the company prefers, if i had to be in their shoes. from a market perspective, most
would like it. from a company standpoint, i don't think it's in their favor. >> brian marshall, thanks. >> stephanie link, what do you do with apple here? do you keep piling onto a stock that seemingly can be undeterred. >> it's hard to chase with the stock having a performance in the last month or so. >> you said that a couple hundred bucks or so. >> we're not going to chase it. its expensive. i think there's better value elsewhere, emc, 11 times forward estimates. i like that story a lot. if brian is right on the networking space in terms of juniper call, very interesting, you have to see the service provider revenues and cap ex start to improve. i'm really not sure you really want to be there. i'm not sure i want to be in either cisco. i think it's a good stock. >> dr. j, how much of the stock run has to do with the fact the market is expecting apple tv. the overall market is up because
the market is expecting qe3. >> there's a little juice because of itv and seven-inch mini. >> what happens if we don't get it. >> a little boost, the main boost is the iphone 5. then, of course, the fact they make in the most recent quarter, scott, $2 billion in revenue from their apps store for god's sake. they are making a third of the money on apps store on apps other folks are writing for them. 600,000 apps on that store. the macstore as well. obviously with people upgrading to mountain lion, an awful lot of revenue flowing through there. people are missing it if they are not focused on answer later businesses that feed back into apple and we haven't touched on itunes. >> america's favorite stock series continues later on "power lunch," the outlook for software giant up 25% over the last year. find out which software stock america is in love with. that coming up at the top of the hour. still ahead, new
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welcome back. time for top trades best buy names turnaround expert hubert joly as new ceo. secret takeover talks apparently broke down over the weekend. all of this ahead of earnings due tomorrow. stephanie link, here is what you get ahead of that, 7%. >> interesting story. the interesting thing about the new ceo hire, no retail experience. you need somebody to coin and understand the business, which is why having the founder coming in wanting to take over made sense. not a name you want to be involved in. >> coventry soars on a deal with aetna, the move will make aetna one of the largest providers of government financed health care. steve grasso, stocks up big on this one as you probably would expect. >> aetna will triple medicaid business. the buy here is aetna. stephanie and i were talking
about this on break. you want to be buying that asset. margins are shrinking. they are trying to offset it. offset it with numbers. that's what they are doing with coventry. coventry is flirting with the deal price, takeover price. don't buy that, buy aetna. >> the market thinks, grasso, it was a good deal. >> exactly. margins are shrinking so you have to make it up in volume. >> premium rights from movies of hollywood's biggest studios, doc, interesting news, he does not mind spending money. >> no. that's the moat he's building. netflix does not have one. if you've got the content you can strangle off the rest of your competitors that can't get that content that everybody really wants. so netflix opened lower, traded up nearly a dollar on the
session. i like the way it's moving here and the fact that in the ireland and uk subscribers went over a million in seven months. that's the fastest penetration they have ever had at netflix. it shows you the growth story isn't just about united states. >> all right. after a six-week gain for stocks is it time to look at bonds again? our own steve cortes is finding ways to get less risky returns. >> you want to get liquid in lqd. represents investment grade bonds. i call this the matlock trade, something your grandma or grandpa would have invested in, walmart, at&t. ltd crushed in auk, most defensive plays, utilities, pharmaceuticals, including lqd. it's an opportunity. technicals oversold. good technical support. most importantly you get a 4%, very safe 4% dividend yield.
i think when you can get 4%, more than double what the ten-year note yields with relative safety, as close as you can get to treasury safety. >> unless rates keep going up. unless you get this rotation or continued rotation. let's face it. people have sold bonds and bought stocks because they are more optimistic about the market's prospects, what may come out of europe and certainly the economic prospects in the united states. >> certainly. i think a significant break on 118 on lqd would indicate that kind of continued move. if that happens a close below 118 would tell me i'm wrong and time to get out of this trade. >> ahead why one leading economist is telling investors not to bet on more easing. facebook gets upgraded as shares fall to a new low. you bought that one, too. >> sure did. >> the logic behind that call and upgrade. you do what you do... because it matters. at hp we don't just believe in the power of technology.
ro ro rory maher. sorry for butchering your name, though i knew exactly what it was. why? >> valuation call. it's a very good media company. they are going to put together industry leading growth rates and continue to steal share at about 16 times 2013 ebitda, i think the risk-reward is looking attractive. >> you could have given me the sales pitch when it was going to ipo. is it that the stock price pulled back, the valuation looks too attractive now. all the other things you could have told me before. >> that's true. as i said, it's primarily -- i think it's fairly cheap down at this level. when it was in the 30s, when it went public, two to three times a premium to the group. i just felt that at that point they had a very solid core
business. i didn't think growth potential from there supported that evaluation. but down here, you know, 50% of that level began. i think it's a pretty good time. >> interesting, it's been a sentiment story as much as anything else. people can debate fundamentals and everything else with facebook. but lack of sentiment from a positive standpoint has driven this down as much as anything. do you get a feeling it's about to change? >> i think the first quarter they came out of the gates, i think investors were hoping it would be better than it was. after that kind of settles down, i do think they will put some pretty good quarters together through this year. i think as that happens, septemb sentiment should return and investors will get more positive on it. >> rory, how do you get comfortable with operating expenses, how much they went up in the quarter and lack of visibility we have on that front from the company. second, how are you viewing the lockup in november, far bigger
than the lockup that came out last week. >> just to start the second part, the lockup. in my note, i mentioned there probably will be pressure clearly as shares come to market. however, this is a fundamental call. i'm looking at one year out. i think that, you know, $19 is a pretty good time to get into it, albeit with the lockup coming down the pike. >> sorry. good to have you on the show. rory, talk to you again soon. >> thanks a lot. >> cortes, you like what he has to say. you bought the stocks today. >> i bought it today. i've gotten my hoodie out and i'm in of the reason is sentiment. >> whether zuckerberg was in over his hoodie. >> could be. the reason for me, the rational is sentiment and technicals. i hate it. i was on the day of the ipo saying i hated it, hated it in the 40s. this is the paradox of wall street, loved it's in the 40s, hates it in the 20s.
you need to zig while it zags. as long as it holds below market, i want to be long. i think we climb back in the 20s on facebook. >> doc, you like it, too. getting love on wall street for the upgrade. >> i don't know if it's love. >> highs of the day right now, 3.5%. >> it's still loathed on wall street. >> i said today. >> today it's up and up mainly because the sellers are being exhausted by this stock. as you said, i'm long it. i'm also long one by two spreads on the market. i think bill gurley nailed it last week when he told us the moat is bigger than any other stock. you can't create another facebook. you can create another groupon, look at all the folks that have done it. this, to steve's point, down 50% from the ipo gives you a little shot. doesn't mean this should be a lot of your capital. this is risk capital.
still a loathed stock. >> no hill to die on. as a trader i'm personally willing to risk my own on this. i'm not sure i've heard in my career more complaining and carping about a single name than they are about facebook. when they are crying, i'm buying. >> the social stocks have produced anti-social returns for people. do you like any of the others? groupon has taken a huge slide. >> the reason mentioned, such a low transfer there. again, this is not an investment for me, a trade. back in the 20s, i think it makes sense. this sentiment has gone too far. >> more "halftime" report up next, what's behind the stealth rally in trade? reasons behind pops and drops when we come back. no problem. you want to save money on rv insurance? no problem. you want to save money on motorcycle insurance? no problem. you want to find a place to park all these things? fuggedaboud it.
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coming up today, 1:00 p.m. eastern time on "power lunch," one of america's most widely held stocks. up 25% year-to-date. believe it or not, it's microsoft. has it finally turned the corner? lower trading volume could mean bigger opportunities if you know where to look. bob pisani is going to join us to show you. feeling like a million bucks for a couple hours, bmw expands its car share service. see you at the top of the hour with that and much more on the augusta story. back to scotty. >> thanks for that. recent run-up in stocks keep the feds on the sidelines. cut the chances of the fed doing another easing to 40%. the firm's u.s. chief economist
joins us now. sir, good to have you on the show. >> pleasure to be here. >> interesting way to enter the segment. how much do you think market gain has to do with the fed's way of thinking now. >> i think the market is optimistic. we have had a bounce in the numbers. there's some sense the economy is doing a little better. people are counting on qe coming soon, i think they are likely to be disappointed. >> people would say the fed, obviously aside from what's happening in the economy that the stock market matters inside the fed. right? you have this wealth effect. stock market doing bad. fed at this point in time would not want to see that. how much do you think it matters we've had this nice rally in does it take some of the pressure off bernanke to have to act? >> well, financial conditions do matter for forecast. there's no forecast. stocks are a big part of that. there's no question that that works in that direction. but i also think that they are very concerned about what's going to happen to europe and
filter back to financial conditions. they are concerned about the fiscal cliff in that as well. so i don't think it will be driven by that one thing. >> lewis, steve cortes, the gold market seems to agree with your view. gold has basically gone sideways all year long since the beginning of may. since there is no qe, do you think gold is a sale here? >> i wouldn't good that far. not by september but the end of the year. i wouldn't make a huge bet on gold. have you seen commodities come off over the last six months or so as the economy has weakened. oil has been a bit of an exception, agriculture prices a bit of an exception for specific reasons. but with slower growth in china, that's one of the things driving that. >> it is interesting. i suppose i find you're talking about a matter of timing. that's what we're looking at here. you're still expecting the fed to act. what difference does it make in any sort of forecast for that matter whether they act in
october, november, december or september if they are going to be there when push comes to shove? >> to some extent i agree with that. to some extent what the market is doing is taking comfort from the fact the fed said it's prepared to act if needed. as long as that's still the case, if the numbers are decent, that doesn't mean they have to act right away. i would agree with that to some extent. i think there's some sense people are getting out over their skis. we've got, for example, the minutes from the last meeting coming up on wednesday and we have chairman speaking on the 31st. those are potential negative surprises. >> grasso. >> lewis, people talk about fiscal cliff concerns. should they be more worried about the rolling off of the tax cuss since that accounts for $400 billion versus $65 billion when you talk about sequester? >> absolutely. i think from a macroperspective, they are the bigger deal. there's obviously the question if we roll into january without
a deal, what's going to happen. everyone's expectations at that point, strong pressure to do a tax cut after january 1st if we get there. i don't think people should assume if we get to january 1 without a deal those taxes are necessarily in place for the duration. >> lewis alexander. thanks so much. >> pleasure. >> hope to have you back soon. let's hit pops and drops. midday market movers drop for waste management cortes in the dump. >> big drop for garbage. one problem little known garbage volume in the united states has been sideways to dropping for years because of recycling and lower industrial demands. i don't like this stock here. i will say it's got a nice 4% dividend if you're looking for dividend plays. >> wynn resorts. >> all the companies up on stronger revenues out of that region, up 9% on a run rate basis. i wouldn't chase the stock. i. >> lvs over wynn. >> strong eer nagerian from sal
conference. valero. >> west coast refinery sparked buying over the whole space of refineries. it should have been a net recipient or the buy said. i think it's long-winded. i wouldn't be a buyer. >> doc, speaking of you, cortes tells me zig, you say zag. >> down 18%, founder of zagg quit. if it breaks down to five i might be interested. >> listen to this one, miss world drummed up excitement with her unusual talent beat boxing while most showcase more classic skills. miss philippines, we'll listen for a second took a gamble. while it wasn't enough to win
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not so fast, stephanie. our traders are quick but not always right. take a listen to stephanie link's call earlier this month. >> we've been picking out stocks hurt. hit today. again, we are doing a diversif diversified approach and buying bristol-myers. >> they're hammered down about 12% since that call. what do you think here? >> we're buying more. we like it. the reason it's down is because one of his help titus-c compounds was suspended. not good news by any means but i don't think that the 5 billion in market cap it lost since the announcement is justified. they put up 8% global growth in the quarter. they have a good pipelineso at cheap. i think it's getting more realistic in and reasonable in terms of valuation. >> strong rebuttal. credit for that. jpmorgan raising the estimates
on banks today saying they're underowned and benefiting. cortez, you like the financials or hate them all? >> i don't like financials. betting on banks is betting against bonds. i don't think that move's sustainable. it's an interest rate play almost purely here. >> given your outlook for the market and the bond market, you simply cannot like the bonds. doesn't work with your strategy. >> the banks, yes, correct. i just do not think this is the place. nor am i short them. this is a neutral stay away type play. >> international banks i'm really nervous about. deutsche banc. at least four european banks investigated as part of the iran money laundering situation that standard charter was tagged with. people are basically just taking a shot on who those other banks may be. i think all of those banks are under pressure so in other
words, deutsche bank, wouldn't touch it here. >> we have liked the banks. this is a call i actually got right with jpmorgan. >> you have gotten a lot right. >> well, anyway, i think that the bank rally is real but you want to be very selective in terms of which banks to own. i'm less focused on the capital markets financials and much more focused on the banks with mortgage exposures. if you read this note, it's better net interest margins. mortgage originations are up. re-fis up 17% year to date. you have positive tail winds. i like wells fargo and suntrust. >> grasso, the names bank of america and then the regional players we hear about a lot. >> the one i would add is the one you just said to stephanie's list is bb&t. we have covered the same names.
but she really did just top it off with jpmorgan. i was on the show with her. called it at 32. i thought it was a sell. she thought it was a buy. >> thanks. >> talking much more about the markets coming back. final trades and talk about another stock that's had a stealth rally. outperformed apple over the past three months. do you know who it is? we do. we'll tell you after the break. this man is about to be the millionth customer.
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when i slam apple, i get terrible tweets. >> why? >> fundamentally -- >> why? >> fundamentally google has a better plan for international growth at a lower price point and apple does. >> they gave up on china. >> yes. it hasn't hurt them. >> oh, it has hurt them! it has hurt them. >> you know how i feel about china. i'm not saying gig against apple but google is a stealth name without respect for the mammoth rally. stephanie? >> yes? i like it. we have liked it for a while. 14 times earnings. a lot of the social money, the money that was in the social stocks are hammered has gone to google. i also think that their cost per click in the last quarter improved substantially and a big problem of investors had so that's a good sign. we own apple in the fund. not google. like them both. >> doc? >> i like them both. nothing against google.
i just point out that -- >> against cortez? >> no. >> we're chicagoans. >> i think that they seeded china and i think that was a bad move for google going forward. >> all right. >> it's not such a gross outperformance either. >> just pointing it out. looking for more ways to trade like a monster, join us in d.c. for the invest like a monster conference. let's do final trades now, guys. grasso? >> sticking with etna. we mentioned it in the heart of the show and i think it's a buy here due to the medicaid exposure expanding. >> 5.7 billion deal today. stephanie link? >> floor. the largest enc company. a big beneficiary of higher oil prices and projects placed. these guys are the leader and the valuation is below the his lore call standard. >> a lot of big money call buyings. >> cortez? >>