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tv   Fast Money Halftime Report  CNBC  March 18, 2013 12:00pm-1:00pm EDT

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are you fed up with your bank? one start-up is attracting customers by simplifying the whole customer banking experience. a banking start-up actually not a bank that has beals with federally insured banks to provide customers money and provide online mobile tools to help manage funds effectively. simple began signing up customers in july of last year. since then it has over half a billion dollars in transactions and signed up more than 30,000 customers with another 200,000 on a waiting list to gain access. josh reisch is the co-founder and ceo of simple and joins us here. morning. >> good morning. happy to be here. >> you have a big waiting list. >> we do, yeah. >> what is it you offer these people want? >> we provide marriage of high technology with personalized
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customer service. we treat our customers like people, like people want to be treated and find that from the large banks so people are moving in droves from the large banks to simple. >> are you basically an app technology working on the banking industry, you're not fdic insured? >> we're not holding the deposits ourselves, going out to partners fully insured and we ripped out the technology and replaced it with realtime very information rich. we want to give our customers a sense of control about their finances and couple that with ah system personalized customer service. >> the way you make money is split the net interest margin with the banks who hold the money. why is there a waiting list? why aren't you funling that money to the banks craves deposits and make half of that money on the nim? >> we're a start-up started launching seven months ago. we need a whole customer relations team. we're hiring quickly now and will get through that list
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quickly. >> interesting story. sorry such a short time. john, the co-founder and ceo of simple. coming up tonight, continental. notice apple shares are higher, the day before the anniversary of their initiation on the dividend. >> that's all 4 "squawk on the street" this morning. thank you for watching. let's get the "fast money" "halftime report" back at hq. >> thanks, simon and melissa. welcome to the "halftime report." four hours before we close. here's where we stand. dow and s&p and nasdaq off their lows of the session. nasd dow only off by 17. major improvement following the opening. cash is king at least at h hewlett-packa hewlett-packard. katie who rarely does television is talking to us about the
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stock. morgan stanley, can this banking giant with stand the heat from europe? one stock and one-half time brawl. silence, will it silence the bulls? streets stung and rallied on a surprise move to tax bank deposits in the small island country? is this the start of a pullback many warned about? our traders this hour. stephanie, what do you think? how are you trading today? >> it depends if this spreads to other countries, that's the big thing. right now, it looks like it's contained. i focus going to areas of the world strong and the u.s. is still strong. housing continues to recover. manufacturing, got good numbers the best since 2011. consumer remains resilient. last friday we got the stress test from the banks. that was pretty impressive. i think those stocks could be poised to pull back, just because they've had such a nice run, those are the areas you
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want to focus. i also focus on replacement cycle stories, trucks, ah toes, aerospace, rigs. i think there are places you want to buy on weakness and the u.s. is where you want to be. >> mr. new world, are you as sang gin? >> i don't think so. let me go back to last night and what i tweeted out and how you handle this market right now. it is not a binary call you say i will get out of my actual equity holdings themselves. this is where you access derivatives market and options. last night i sold some and thought this looks like a terrible trade and it appears it is because the market appears to be gaining momentum and going back positive. longer term, this story on cypress, you know better than i, the fact the russians are involved in this and in 2011 made a $2.5 billion loan to cypress that needs to be
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restructured, that tells me this will linger in the marketplace in a longer term so seek protection in derivative markets. >> we talked a long time about this being a goldilocks market. i think you can use a different met for. like the boy who cried wolf. we have seen this news from europe several times. >> italian election, cypress. >> it never amounted to anything. we were hearing on twitter, television, how bad things were, this is the start of the sell-off and now it's 12 noon and markets are flat looking like they want to go higher. this will not have a major impact looking long financials and construction and housing. it could amount to something, what's going on in cypress but you stick to the same portfolio you're working on and buy the puts beneath the market. >> if you step back and take the
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emotion out, you say it's a very good thing for the euro and markets. here's why. the euro, they're basically saying we're going to sacrifice the smallest member, a half per seventh cent of the total gdps who banking section is eight times what the gdp is. if we loaned them whatever they need for the bailout, $17 billion instead of making them pay they could never pay us back. it's two times gdp. so angela merkel can stand up in front of their constituents and say, we drew the line here. the limit will raise up, the limit will go up. >> you think it will change. >> i think it will change. >> the genie is out of the bottle. >> here's the risk. the risk is people in other areas, spain and italy come out and say, you know what, we're fog going to take our money out. the backstop at interest rates 75 basis points compared to ours
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at zero and able to go in there and but the liquidity back in the system coming out of the system through people taking deposits out. >> truckloads of money. >> to me. 's the backstop and why it's positive. furthermore, with the market recovering, it's saying get in, there's no sell-off. investors are still missing the point when it comes to europe. tobias, welcome to halftime. >> thank you very much. >> who's missing the point and what is it? >> everybody has been focused on the sovereign issues in europe and it's deja vu all over again. what's happening in europe, corporate credit is very very tight, even as sovereigns have been able to borrow at a rate cheaper than a year ago, two years ago, the ecb liquidity is not flowing through the banks to the corporate sector and the lending standards survey stayed
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tight a long time compared to the feds in the u.s. and suggesting we will get continued expansion. >> the bottom line then is forget cypress, there's a bigger issue in europe and europe is still the issue? what does that mean in terms of how you're allocating capital? >> you look at direct sales for europe to the s&p 500, somewhere in the 11 or 12% of s&p 500 sales, a little bit higher you think of indirector and ship something to asia that eventually ends up in the u.s., i would be much more concerned about the cyclical exposure, a place 20% or more sales into europe from the u.s. places like the auto companies and component suppliers and chemicals and materials and capital goods and industrials those have cyclical exposure and corporate corporations cannot borrow cheaply. >> tobias, does this current situation have the ability to linger in the markets, whether the fact you don't get imf
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supervision or have a chilling going on between europeans and russians? >> i think the chilling between europeans and russians have been going on a long time. not significantly new. gas exports from russia have been threatened as well into europe. i'm not sure that's new news. i think the idea -- this is what gave the shiver through the markets, the idea if you have a new precedent in terms of how you fund these things, do you start expanding it around the rest of europe. the pushback has already been so severe just on this one small country, if you tried to expand this to some of the larger entities in europe, it would cause some level of social unrest. i doubt that this is quite the precedent. i'm far from an expert on it. >> somebody tobias, you see thi does the make the point u.s. financials are a better place to be investing and leave europe to the side and let them work their problems out and focus on the
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u.s.? >> certainly our global strategist believes the u.s. is a good place to be, japan a good place to be, emerging markets better place to be than necessarily europe. in my opinion, europe's problems are not as much debt related as labor inflexibility. what we've seen one of your earlier guests was talking about, issues around manufacturing coming back in america as we become very cost competitive in a variety of areas, not just in relationship to the energy sector because of low cost tide oil and shell gas. there are some benefits in the u.s. unique, housing coming back, employment coming back, stock market wealthy helping investors get some wealthy and feel better about consuming. there are a lot of good things going on here. >> is that the reason why you don't think we will get a sell in may this year? >> we could get something more, sell in july as we get companies gearing down their expectation for the second half, those that
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have large exposure to europe and don't get the recovery in europe fast enough. look at may through october. the weakness might end up being more very summer related and not necessarily in may. >> tobias, thanks for joining us. >> thank you very much. >> how do you trade it? >> i think you look at the financials. they've gotten us here. we love bank of america at these levels. one of the main reasons is the results of the stress test we got last week. you can stay long. look at the price action today. opened weak and rallied, i think it's a great place to be. >> i agree with you on bank of ameri america. contagion is not an issue. the key issue is china. we look at europe and china is in much worse condition. we're not seeing the new regime coming out and put growth policies there. it's estimated by moody's 60% of
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their bank debt is bad. 400 in steel alone don't make any money. i think commodities remain under pressure and stay in the u.s. financials are a great place to be. >> housing, commercial construction. i would say china, that market is one of the very few markets down year-to-date so i think a lot of bad news is already priced into that market. >> let's look at the flash test. josh. >> jc penney surging higher today. analysts out with a note saying while the retailer seems to be headed towards serious financial and liquidity issues, investors could be overlooking an intriguing option here, specifically the option to isolate its top 300 locations and transform them into a low risk highly profitable reit-like entity. this could drastically change the way the market values jc penney. the stock up 10% right now. >> marshall. >> i think jc penney was looking for a reason to rally.
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it got it today. a few months ago, best by was down 11, 12, now in the 20s. you could see shorts. >> murphy had a phenomenal call on the stock calling just for this. i can't believe they didn't have the vision to predict it, one of the top real estate investors in the world. i think it's a great to sell it, still going down to five bucks. >> the european close is less than 20 years -- except minutes away. coming up on halftime, our traders call the analyst who's always throwing touchdowns. >> i look over to katie at morgan stanley i think is the peyton analyst when it comes to am. >> morgan stanley's katie huberty making a big call today on apple. she rarely does television.
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one of the big losers, morgan stanley but is it a buy on the pullback? one analyst says yes and one y says no. we'll discuss it when halftime continues. s platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. governor of getting it done. you know how to dance... with a deadline. and you...rent from national. because only national lets you choose any car in the aisle... and go.
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european concerns putting pressure on the financials today. morgan stanley the worst performer down 3%, down 2.5% as
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it's come on off the lows. should you jump in the weakness. joe, the bull. and mike our bear. 90 seconds on the clock. mr. new world, you go first. >> i get to go first? awesome. tangible book value is $27. it's really about the path back to tangible book. let's talk about the weaknesses of morgan stanley, fixed around fixed income trading. they say they will reduce exposure to these assets by 30%. he had the environment in the first quarter to do it. credit spreads contracted significantly, volatility low. let's go to the strength of morgan stanley, global wealthy management. investment banking. profits up 50%, no one is talking about the hiring of gary cominski, our gary cominski. >> that's a game changer! >> let's not laugh it off. i've known gary over 20 years. morgan stanley is reaching out
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to do something interesting. gary is not going to go to an entity in which he believes the stock of that entity will fall. >> did he bulldoze? >> i agree with the points he's making. i'm long on financials. from a trading aspect, perception is reality as you well know. whether it's true or not, when there's concern out of europe, morgan stanley gets hit first and hardest. i want to stay long on the jpmorgans but morgan stanley is sittingprecariously on the long day average. if the banks go below the $22 range i think it's going back to 20. >> stephanie, who won? >> i think mike did, not necessarily for the european commentary but because i think the global wealthy management piece they're building and will buy the remaining piece, that has a lot lower returns and will be a larger portion of the total
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company obviously. to me, if you're play iing capil markets, georgia, oldman sachs way to go and sold off is the stress test. >> tell us who you think won the debate. tweet us using either #bull or #bear. we'll have results at the end of the show. shares of hewlett-packard getting nice results after a call calling the stock overweight. joining us the managing director, katie huberty. good to see you. >> hi, michelle. >> tell us why you upgraded hewlett today? >> we think handicp under the direction of meg is under the direction of healing the employee more ral and ultimately the company will top their free cash flow guidance by 35% this year. that will improve earnings
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quality and generate high reserves. >> everybody in a better mood will drive better cash flow? >> what you saw in the fiscal first quarter, the company reported free cash flow, $2.1 billion. that's one quarter of strong cash flow performance. they guided to $5 billion. we're expecting they will do $6.7 billion and already executed on better free cash flow. we think meg is focusing the manage. team on free cash flow metrics versus prior ceos focusing the leadership team on revenue metrics. >> or who nose whknows what? i can never tell. >> we've been through three ceos in just as many years. meg is taking a different tact focusing on capital efficiency,
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focusing the team on rigorous cash flow. >> how do they grow revenues with 50% of their business in pcs and printers? >> it's a really great question. the frank answer is i don't think they need to grow revenue in the next nine months. the call right now is about earnings and free cash flow recovery. if analysts stay in october, they have to answer the cash flow growth. they are making smart investments, away from the wind tell in computing and launching new power efficient servers that sell into internet data centers and cloud data centers. they're making the right investments. i wouldn't expect to see revenue growth any time in the next nine months. >> hold on, we want to tell everybody the dow jones industrial average turned passive, helped in part by pack ard. take credit for that, down by four points. still, as we talked about at the
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top of the show making an attempt of a positive close by the end of the day. are you raising your hand? >> yes. here's the question. you have two declining businesses, pcs, printers. you have a board that has just shown they are prone to huge mistakes of which meg whitman is actually part of that board that made some big mistakes. i understand the financial reengineering an eventually that runs out. if they use that to buy a lot of stock, and remains to seen if they do, you're still stuck with two bad businesses. this is just a trading call the next two quarters. >> i'd love to come back in nine months and talk to you about the revenue story. i don't think that's what matters, the earnings recovery and cash flow recovery meg and the team are driving. >> joe bought apple this morning
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and mike murphy thought about it but didn't. who made a mistake? >> sure. i do believe that apple is approaching a bottom. as you have heard, they're talking about returning more cash to shareholders. we think they'll do that over the next few weeks in the form of higher dividend and buyback. ultimately, that's not why investors own am. they own apple for innovation. the samsung galaxy s 4 launch last week showed you the innovation cards are still up for grabs. what lacked in that product was a killer feature, killer app. we actually believe that's where apple will surprise this year. we do think they'll do a low end phone. ultimately we think they'll do a tv. not always about the device, about the software. this 5s cycle will be about a killer feature that drives consumers increasingly to the platform and increases the value
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of those 500 million accounts apple holds today. >> great to see you thanks for joining us on the call moving the stock higher, thanks for having me. coming up on halftime, should you be greedy while the world fears cypress. we'll be right back. how do traders using technical analysis streamline their process? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. we like this idea so much that we've applied for a patent. i'm colin beck of fidelity investments.
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be greedy when others are fearful. is that the best trade right now? our next guest is calling it right saying you should buy u.s. stocks when investors are freaked-out about europe and the election, mostly cypress. what do you think investors should be doing today? is this a tease like the roman elections was? >> indeed. fear is to be faded.
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there have been three big fear points you could have faded. the markets are going back to the end of december. number one, the congressional fear, i thought was a decent fear. the vix was at 23 then. the italian fear, february 25th, vix at 19 and this morning, you had pretty low quality fear, cypress fear with the vix at 15. you're making lower lows on vix and higher highs on stocks. until that ain't broke don't fix it. >> what do you do now? >> buy more. this morning, it's a lot easier to buy more when people are trying to advertise down 20 on the futures. look, the three big things that actually changed fundamentally today, this is what we look to first, opposed to looking at some russian mobster or greek cypriot. we look number one at the dollar. that's the fulcrum point of our bull case and what the strong dollar does, takes down the price of oil and point number two and oil was down this morning and finally looking for
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confirming data points on the economy, consumption economy doing well on strong dollar and down oil. >> keith here. looking at financials. great call. i love the way you switched the call and got long on this market. you have one name you guys are focused on you think can lead the financials? >> bank of america because we're so bullish on housing. our call on housing is people aren't bullish enough. we go to the spring selling season we think 25% on existing homes. >> that's the music. we have to go because the european close is coming up. coming up on halftime, sleeper threats to the rally. what else is lurking beneath the surface that could shake the bears out of hibernation. just 2:39 seconds away, we have it covered. keep it here. investor. yeah, i'm a serious investor but i'm a busy guy. it used to be easier but now there are more choices than ever. i want to know exactly what i am investing in. i want to know exactly how much i'm paying.
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the european markets are closing now. >> you can see european is closing very much in the red, though we have record some of the earlier loss, partly because wall street hasn't fallen out of bed and partly because we're now not sure whether cypress will get their political act together in order to pass that levy on the bank deposits.
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that is the dominating story. the bailout of greece and that one time tax on deposits that is really concerning everybody. the most obvious thing to say is will it cause contagion and bank runs in other countries? as you look at these banks falling and you see it's not just in italy and spain. something else is happening very important. policy is changing and confirmed to hatch changed within the european union. the last time that island bailed out its banks, the government bailed out the banks and the rest of europe stood behind the irish government. that's not happening now. it's sharing and the fear that the semien bondholders will hold it going forward and ranked in the same way as positive bondholders in the structure. the point i want to make here very importantly, this has not been a bad day for sovereign debt in europe. those yields have not risen substantially, because at the
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margin, this takes the pressure off the sovereign in baling out the banks. michelle, back to you. >> all righty. thank you very much. simon hobbs. you hear him talking about senior bondholders in europe might take a hit. any of you trading european banks at this point. >> no. >> because of that? >> i wouldn't trade the french banks because france is as close to socialism you're going to get over there. if anybody is going to do it, it's going be them and why they're down 5% today. no point in playing european banks when you have such value in european banks without the risk. >> if you are playing banks on europe, you have the ability to look at the london exchange and etb in russia, they have the greatest exposure in this entire crisis in russia and you buy puts on it. >> i think you want to own the u.s. regionals. these companies will benefit with the steepening yield curve. they just passed the stress test with flying colors. some like suntrust will issue a dividend and just raised it and
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things are getting better for the regional players. >> too many unknowns. you don't need to jump in front of that when you have the value you have in the u.s. there will be a time but not ye yet. >> keep mind, this is not an issue with italian banks or spanish banks. an issue with cypress because they had no changes of repaying anybody for the bailout. an isolated incident. know it and move on. let's go to the biggest drops and pops in trading. hp dropping 4%. >> the other hp down big today. you can look at this name as a setup you can get into. their guidance isn't bad so you can look at a long here. a >> and what do you do with slb? >> i think expectations are very high. the company is speaking out on a conference today and the same
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kind of demand year-over-year. if you can't get growth, i can't pay a premium multiple for this stock. >> a pop in intuitive surgical. >> the stock is up today. here's how i look at it. the balance sheets of hospitals are better than they've ever been and gives more ability to spend on the devices, expensive, seven figures, i wound buy at this level but any pullback, i would be a buyer. >> i love that code. tells you everything. >> pop in btu. peabody energy. >> reduced to neutral. $21 price target on it. short interest, has risen 56% in the last couple of weeks. for a quick trade, go knock yourself out. you would be long. longer term, there's no fundamental strength in this name. you won't see it with additional interest. coming up on "halftime," an interesting way for the individual trader to trade
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hey, everybody, coming up on the top of the hour, europe's plan to tax deposits in cypress, a population the size of san diego triggered a global
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sell-off in stocks. what it means for u.s. investors on these shores. while boeing has been fighting to get its dreamliner back in the skies, it just lost out on the biggest plane order in history. what does that mean for boeing, whose stock has been rising. the ceo of the struggling blackberry company says apple's iphone is out of date. really? back to michelle on "fast money" halftime. >> wow. i have to hear that. okay, tiler, good tease. let's get to josh lipton at the markets desk. >> hey, michelle. gold has been under pressure. strong economic data surging stock market but rising today as the investors bailout has them searching for safe haven breaking 1600 for the first time since late february. miners rise iing, all higher ri now. >> given the reason that gold has risen today, i think you can
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short it today and cover your short tomorrow. it will fall back. >> i would fade this rally. i don't think gold has a fundamental reason to go higher and will continue the downward trend. >> no gold owns >> i would rather own silver where there is industrial exposure. >> platinum. you have potential for supply disruption in south africa. if you have precious metals, where you go. >> wow, no china play here or nothing? >> other ways to play china, not necessarily just gold. >> i was thinking inflation everybody loves to talk about. >> if gold is still above 1600 when we get off air, i am going to short it. >> final trade. the new york exchange optioning its mini option. what is a mini option, bob? >> a smaller version of the regular options. >> why do you need it, >> we do because small investors want to get in on options trading. today, the they will begin trad
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it. now, you can trade a mini contract one tenth the size, 10 shares. they introduced a mini futures contract a while ago. that was a huge success. the main object is to make it's easier to trade options for average guys. they're doing this with five big securities, all of which have high prices, amazon, apple, google, spiddr gold trust and n. suppose you had $25,000 of apple stock, you couldn't buy a minimum contract because it required 100 shares. now, you can buy five or six to cover your ability to buy protection against apple dropping. i don't know what you think about this. i like the idea. the options business is not
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growing as fast as five or six years ago. they have been looking for innovative ways to keep expanding. i think an interesting idea. >> i love the concept of product innovation. everybody said there's been no product innovation in the financial world way too long. derivatives. >> i think it's long overdue. i think it's a great educational tool for the younger generation to get introduced to equities and options and how to utilize them. i like you're able to do it on the s&p overall and gives you the ability to hedge your portfolio and higher priced stocks. there's nothing but upside, by introducing these, i think it's good. >> i think most of the volume is in apple, don't you think, bob? >> i think the s&p 500, remember, they used to have a main contract that traded for 500 times the value of the s&p. then, when they went to the e mini contract a traction of that, volume in the e mini
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exploded and eventually took over that business. i think the smaller -- if you want to get the average investor involved, a smaller contract is the way to go. >> the ease of liquidity in e mini is there. as i said at the top of the show, that gives you the ability and gave me the ability last night where the tape was and edge out the risk i had long exposure in the portfolio. >> and reason for the higher priced stocks. it's not a coincidence these are all high priced stocks. >> and the reason joe is not on the show today, they're out celebrating right now. >> thank you so much. coming up on 'halftime", not so fast, mike murphy, your turn to show us how to manage a losing trade. you tweet it, we trade it. our four trades on stocks you asked for on twitter. coming up. [ male announcer ] when it comes to the financial obstacles military families face, we understand. our financial advice is geared specifically
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apple is trading higher on the one year anniversary of the company issuing its dividend. that must be it. guys, what are you thinking of katy earlier said buy it. >> i was looking at apple on friday and looking at it to buy before the opening, i didn't, joe did, a great trade.
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looks like it's reversing its downtrend here. a lot of talk down there. the analyst estimates on the dividend are 50% higher where they currently are. a lot of people following the company expect cook to increase the dividend dramatically where it is. if this continues, i think you can see a strong push. >> i'm worried. mike gave me a kiss of death calling it a great trade in only a couple hours. >> i'll take it. >> i think what mike is referencing, keep apple simplistic here, technically, look at a chart, take apple off the chart and look at it, you have a nice price gap that happened thursday to friday, from 434.64 to 437.25. you have a low point of reference with low risk in order to make the trade and that's what i did. >> here's what happened. you remove the competitive thread. a few weeks, everybody was worried about samsung, the new
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phone that came out. it came out, launch it last week and didn't surprise anybody except for people bullish on samsung and negative on apple think they'd lose more share. there's really nothing new there. the screen is a little bigger. that competitive thread gone, blackberry launch is actually going okay in terms of pre-orders from what i've heard. that's not enough to derail apple. to me, apple is still right now a product story. if you're buying it, you're putting faith you will have innovation when there is a new phone. when they announced the dividend last year, the stock was up 3%, not a new move, not why anybody is buying. >> how long will you hold it for? >> until i'm stopped out. that's not necessarily what i'm logging for. you had the high beta move in ikea and ikea has fallen back significantly. there is a secular challenge that blackberry faces the same secular challenge, blackberry is getting to the moment you have to have patient as whitney told
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us on this desk, i think blackberry is setting up for the same type of negative price action. >> and now to the market flashiflash. >> dow jones report iing the liberal media is negotiating a deal to buy 22% of charter. the purchase would be mr. malone's first purchase of a u.s. cable system since selling cti to at&t in 1999. >> i was going to say, this is back to the future, right? >> i think you will see in this space a lot. a lot of consolidation. rumors out there regarding cable vision. >> cable vision is moving higher as we speak. your intuition is right there. what's driving the consolidation and why do they need to do it? >> i think there's a lot of cash looking for deals and these companies can come in and create cost synergies and unlock
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shareholder value. cable is one off because management is so old but for the intrinsic value. >> john malone is a serial acquirer. has been great in terms of unlocking the value of any individual deal such as this one. that is a little more difficult for him to do if you look at sirius. more value there. you can't second-guess him. if he sees value there as one of the original investors in the space. cable vision is one of but the dolans have such a strangle on it i don't know if anything can happen. >> it's a big valuation. people look at that in terms of valuing the stock. if that's stabilizing, i think that that is very interesting. it's a name we're not going to chase it here but one you want to keep on your radar screen. >> you guys know there's only one cable company to know. >> that's true. comcast. can i say it? >> thank you. all right. when you the viewers ask, we deliver with our trades. on four stocks that have lit up
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the "fast money" twitter feed. cisco, rack space, ssi, and first up, channels they distrib the stores. it's the hot brand of the moment. however, selling right now at about almost i would say 27 times next year's estimate, it's kind of expensive to me for what is by definition a fashion stock. i don't think it's a short. i'm saying that it's rich now. if you own this and you haven't taken a profit, take partial profits on it. >> a fashion stock, you've got to worry about the sicycleness the consumer. >> yes. i do stick fashion trends? >> you do. i can tell. >> before and after picture right here. >> right. >> i'm not willing to buy this one. >> cisco, what do you think? >> final forward, hewlett with a
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lot of cash, they have a lot of cash. trading at ten times estimates. the company is transitioning away, a little also away from routers and switches and more towards software security, more visible revenue, more recurring revenue. i like that transition. we like it. we own it, we've been buying it. >> how do you trade this spot, rack space. >> the stock had a nice pop this morning. there's a rumor circulate that ibm was looking at the company a month ago. that could be a reason why you're getting this pop. i think you can look at it, again, don't know if ibm is interested but there is value. >> technology company, not a closing company. >> yes. >> all right. finally, the fxi. >> the fxi is china mobile, bank of china, i don't want to name names that are equities in china. what i want to own is the consumption of china. what are they going to utilize, materials, energy, baby formula,
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whatever it is. i don't see significant strength right now in terms of the china recovery. i do believe it comes around in 2013 and that's the way you play it group don't play that side. >> earlier in the show we asked you to weigh in on the morgan stanley debate. we tallied the results. you said, joe, our bull won the debate. congratulations. >> well-done. gary kaminski must have voted a lot. >> you feeling a little stung? >> a little stung, yes. >> final trades, next, up on the "halftime report q. "
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welcome back. let's get the three market movers. first up, trans ocean, the offshore driller rejecting proposals from charles icon issue a cash give vend. murphy, what do you think? >> i think you have to be
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careful with this set-up here because icahn has a history of stepping a way from something if he doesn't like what the board is doing with him. if he steps away he could have more moves to the downside on rig. >> another cool symbol, by the way. >> yes. >> next up. best buy, overweight to neutral. jpmorgan, stock upgraded last week. >> this stock has had an amazing move and i missed all of it. apparently the thought is becoming the sense that there's room for one electronics retail. that's best buy getting their cost down. i think it's ready for a pullback. finally, office depot, the company's largest shareholder nominated board of directors. >> key bank up drgraded the sto too. this deal between office depot and officemax doesn't kick in until 2014 when they shed a lot
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of costs. i think the one you want to play in a tough environment is staples. it's quite cheap. i think they're going to take a lot of market share over time. not so fast murphy, the last month on "halftime" mike took the bears side during the debate on the gap. take a listen. >> here's where you are running into trouble. if you look at the chart, joe, it's sitsing around 200 day. stock is rallying up and now petering up. what the gap has in front of them is same-store sales numbers, up 4%. they missed that number, pierce below. >> well. gap shares have risen about 12% since that call. murphy, what say you? >> i think it's been a strong s&p. the gap has been very strong but i would say almost the exact same argument here on the gap applies as it did back then. the stock looks like it's petering out. up here at these levels still. i still think they run into trouble versus last year's

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