tv Fast Money Halftime Report CNBC March 20, 2013 12:00pm-1:00pm EDT
no they don't. hey son. have fun tonight. ♪ ♪ back against the wall ♪ ain't nothin to me ♪ ain't nothin to me [ crowd murmurs ] hey! ♪ [ howls ] ♪ ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history...
we're making it. check check out these pictures that we have got in from the ukraine where parliament was briefly suspended after fists began to fly. the leader of the parliament labelled one of the opposition parties as neo fascists after they booed a speech he made in russian. the leader was besieged from the opposition parties sparking a brief scuffle. we should note fights like this are common apparently in the ukraine parliament. as regular viewers are aware. >> and neo fascists, i mean those are fighting words that's
for sure. >> yeah. they are in eastern europe, believe me. okay. what are we looking for tonight? >> we have one economist a chief economist who thinks that the fed will give us a surprise. we'll see if she's right later on. also, of course, fast money madness continues so tweet us who you think will win. because you're the fifth trade tore break the tie out there. you the viewer. >> that's all for "squawk on the street" as we hit noontime on the east coast. it's "the halftime report." >> hi, thank you. welcome to "halftime show." live from the new york stock exchange, and four hours to go until the close. right now green across the board. the dow is good for 54 points. one-third of 1%. the s&p and nasdaq is higher as well. here's what we're follow, hunt for growth.
the top fund manager for the next great plays. and the two najarian brothers will debate whether the hot stocks will hit a wall. forget cyprus it's the fed that holds your money in the balance today. will bernanke and company push stocks higher to a record for the s&p 500? our traders the najarian brothers are both here. and mike murphy is in the house as well. doc, how do you it seem we're not talking about cyprus today. we're talking about bernanke. we're watching the market higher in the face of some head winds like we heard from fedex. >> fedex and sintos said their business is slowing. whether it's the hospitality side where they put in the rugs or uniforms or fedex with moving the product about the world. things aren't as good for either of the two companies. but then you get a whole bunch of other good news from elsewhere. in particular, i think the way
europe reacted to cyprus was one of the reasons that people actually are heartened and pieing. it wasn't just a pop on the opening. we held the pop and now we might build on it into the close. >> is there a story that the rally is still intact? bernanke and company will come out with the statement today. maybe they say that the economy getting better than it was when they last met. maybe they say we're not going anywhere. we're not leaving this party. the punch bowl stain don't worry, all is good. if that happens today, what happens to the market? >> we'll go higher. we talk about the financials and we'll have a debate later on with my brother and myself, i'll be the winner once again. but the housing is telling us a story and that trickles down to everything in the financial world. i would like to emphasize this. we have been talking about the financials for a long time. the big money center banks and then you get to the insurance level, and the asset managers is where we continue to see upside activity, but not short term.
in the other areas of the financials because of the lack of clarity and because of europe and sequester, all the things we have talked about for the last three months they're all in the short term. you look at the big asset managers, black stone, all the names, fortress, we are seeing activity going out to january of 2014 and '15. they think this is a bull market going higher. >> i'm going to agree with everything that pete said about housing. but one concern i have here, a lot of people are looking at bernanke today. everyone is taking it to be gospel that he'll say that we'll be here, we'll keep the punch bowl there and seeing signs of a pickup. kind of again a goldilocks type of scenario. my concern we're pricing to perfection here. he has to deliver to keep the rally going. i think it should keep going, but the set-up is if bernanke disappoints we'll roll over. >> i'm much more cautious. caterpillar and federal express
are very large internationally exposed companies that are showing you that international demand and growth is just not as strong as it used to be. not just the company's earnings, but if we look at manufacturing data in china and europe, it's much weaker. if you look at amgen making highs today, it's not a total bull market. >> speaking of bulls, i'm holding this thing for merrill, talking about caterpillar. global sales down 13% in the three months ended february. that that's not good. >> that's not good. you look at what's going on in china and what's the real story in china? the u.s. data seems to be getting better. some of the economic data in other parts of the world maybe not as good. i think there he's reason to have caution. when you look at the financiafi, when you look at what's going on in the big pharma names that's a sector that's moving higher. people feel some safety there. but not only safety they look at
the valuations. that i love the yields they're getting there and i think there are names like merck that have underperformed the rest that can outperform and get to the next level. >> i think a big important point here, staples has been a favored sector over the last years. they're much too high with having a similar dividend and yield. if you look at the stocks like general mills today or proctor and gamble, i would stay out of those. >> if you go back to caterpillar, if you do get a turn around in china, if caterpillar does start to pick up, where is the market going? there's upside to the market if china joins the party. >> our next guest is looking for stocks to move higher on mr. bernanke today. let's bring in the deutsche bank chief economist. >> happy to be here. >> are we going to get the so-called goldie locks scenario from bernanke today?
>> yes, we will. the fed sees a lot of monsters under the bed. and they don't want to remove any stimulus prematurely. they have been committing and they'll reinforce they'll keep policy ultra accommodative which means more q.e. and more rates. i would be stunned if the chairman and his colleagues did anything other than that. >> what do you think they're thinking right now about cyprus and what's taking place in europe and how it plays into their whole decision? >> they have been very nervous about europe. we have seen that over the past year in the f 1 c minutes. they won't specifically cite europe in today's statement, but that's an underlying concern. the sequestration, all the negatives are the reason that the fed will stay on the course they are until they're confident that the u.s. can withstand the supposed head winds. >> is there anything that could happen today that could spook
the market, beside the fact of bernanke taking away the punch bowl away sooner? which is highly likely. he won't say that the economy is worsening. we know that. what if there's a dissent from a middle of the road person who now descends and thinks they should take it away sooner? >> the odds of that, scott, i think are very low. but if it did happen, i think equities would pause. look, the stock market -- investors might find something negative in today's statement, but the reaction of equities tends to match what the fundamentals suggest and that will be very easy for a long time. and then with the economy strengthening led by housing and we have been very bullish on growth, this really still is a sweet spot for risk assets. >> you raised your gdp forecast last year. >> yeah. 3% for the full year. i mean, growth could be better. i think 3% isn't strong historically, but boy, 3% would be great given the kind of
numbers we have seen over the last couple of years. >> all right. joe, we'll see you again soon. >> all right. doc, do you have a comment to make? >> i don't think the fed will buy into the bail-in they talked about, judge. in other words, the european central bank when they basically tell them -- cyprus that is, we think there's going to be a need for you to tax the depositors, i don't think that dog hunts. so if they address it at all i think they'll say that that's a bad way to approach it. i think. >> this is going to come to a head in a couple hours from now. stay tuned for our special coverage of the fed decision at 2:00 p.m. this afternoon. let's go to josh lipton. he's on the market desk for us as usual. >> hey, scott, the airlines are flying higher. now up 29% this year versus a 9% gain for the s&p 500. some big moves this year.
delta rocketing up 41%. united up 37%. u.s. airways surging 25%. scott, back to you. >> guys, let's go around the horn a little bit on the airlines. the stocks have been a complete turn around story as much in performance as well as sentiment. murph, sentiment is amazing. >> absolutely. about a month ago we had this discussion on the show and i said i'd stay away from the airlines. i just booked a trip, i'm taking my family away tomorrow. the prices that the airlines are getting, they'll continue to get that pricing power. i think there's still more upside. >> your thought process, what was wrong? right? you said stay away. now you have a changed opinion. >> to me, so for the last 15 years looking at airlines the last time i traded delta was 15 years ago. it's an industry as a whole that makes a habit of losing money. >> except for consolidation.
you've got consolidation. >> there wasn't. but how about the fact you talk about what's the one that outperformed everyone else, delta. do you think it might have something to do with the fact they made that great purchase of the refinery when everyone said that was a terrible move? i love that move. i remember we talked about it on air, judge. that was a brilliant move by richard anderson. i don't understand why other airlinesn't have gone in that direction. >> i think structurally to your point, structural consolidation has had a huge impact on this industry. also, the fact that they're re -- they're increasing revenues through all of the small tack-on fees. since there are fewer competitors they have all moved the revenues higher. >> kudos to both jim cramer and to kate kelly because kate kelly was the one telling us, breaking the news about the refinery buy. then you look at cramer's pick
and lcc, u.s. air, with the merger, making them the largest carrier. >> cramer, whether it was a week or two ago, recommending airline stocks for the first time in maybe ever. but certainly for a long time. >> well, we're going to talk about home builders later. i would much rather own airlines than home builders -- >> i'll debate that tomorrow. >> the valuation is pricing in at a low point. >> we have to fire up a good debate on that one. let's do the biggest pops and drops in mid day trading. adobe is up 4%. >> they gave you some great projection. they're doing everything right awe adobe. i think it's in front of itself, judge. great opportunity. >> what's happening with chesapeake energy? this is dropping 2%. >> chesapeake has had a real struggle ever since the earnings numbers. i think it's one to stay away from even though icon has been offed off and on for a while.
>> anadarko is getting a pop. >> yeah. this could be the biggest ever in the gulf of mexico. it is down there better than a mile, but the early data is very strong and the stocks are reacting to it. people are aggressive buyers here. >> murph, cintas. i think they missed, but it's an overreaction here. it's interesting to see why they guided lower and could be an opportunity there if we get the right answers. coming up, blackberry up 130% over the past six months and it's higher again today. but have you missed the run? find out in our top three trades. investors are falling in love with private equity stocks again. they're hot, but are they worth your money? the answer when "halftime" comes back. how do traders using technical analysis streamline their process? at fidelity, we do it by merging two tools into one.
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welcome back. welcome back. time now for our top three trades on the half. first up, blackberry. the smartphone maker getting an upgrade from morgan stanley. >> that upgrade was two notches from where they were. and moved the target from $10 to $22. the real focus is on margins. they're talking about the margins being 20% on the latest phone and it will compete with the iphone. and 30% out of the next phone, the qwerty keyboard.
i think it's going higher. i love the beta of the name. i think it's going towards 20. >> the analyst mentioned unheroic assumptions on the numbers as well. meaning they could beat them. >> absolutely. i think they're well positioned when you have 79 million folks in front of you have. the eyeballs are there. i think they have the right devices. >> here's a good one, general mills is up next, reporting better than expected earnings. by the way, the ceo ken powell is going to be on "mad money" tonight at 6:00 and 11:00 eastern time. so i want to have a quick little debate on what the scoop with this stock is, enis. then maybe the ceo will have to hear who won or lost, whether it's a buy or not. >> i think it's a hold because it's a 3% dividend name, but it's priced at 17 times. it's only going to grow earnings 5% a year. but the business is very stable. i'd much rather own like i mentioned at the top of the show
an amgen or abbott labs or merck. you're getting a 10, 12 valuation. >> i eel take the other side. i think it's a great name because of the stable growth. over the last five years. although you're going to pay a premium because it's a premium name because of the dividend and the number they're putting up you own general mills here. >> my problem right now is the fact that their margins are going down. i think it's priced to perfection. great stock, well managed. they're doing everything they can. but i think they have priced themselves perfectly. i would wait for a pull back. >> corn and wheat prices have come in though. if they stay in, i don't believe they will, and hopefully the guys are putting on some hedges that's their business. putting on the hedges for the inputs, wheat, corn, rice the rest of it. i think general mills is a good do here, but it's scary. >> sounds like we're split. interesting, again. cramer will have the ceo on
tonight. finally ebay says it will overhaul fees for sellers in a bid to step up competition with amazon. murph? >> so ebay had a major pull back, came down below 50. but also out of jefferies they came out with a note today, they have a $62 target on ebay. they expect next week when they have their investor day, ebay may raise their guidance. so i think it's a great opportunity to buy the stock on this pull back. >> investors are showing new love for equity stocks like black stone. we have more details on that. hi, kate. >> hey, scott. this sector has been dogged by poor stock performance in recent years, perhaps led by the black stone group which went public at $31 and then traded at half that. but notably kkr and fortress are going gang busters these days. one name that investors are particularly liking as well is
fortress. its shares are up nearly 70% over the last 12 months beating the s&p and peers by a long mile. some bulls are worried that it will get too late to get in as the rest of the market catches on. fort veress is the cheapest of equity stocks. figures from goldman sachs shows none of them are generating cash carry at the moment, whereas some funds are doing so. it may be a while before that scenario changes. perhaps because of the factors the business has been undervalued according to some analysts and investors and its credit and liquid hedge funds are showing strong potential. fortress recently increased the base dividend to 6 cents per share. a 20% uptick. repurchased over 50 million shares of give dendz paying stock. goldman upgraded it to a buy stock and mentioned these reasons to give it another look. >> thank you. murph, do you like these stocks? >> i like the entire space, but
i would go to black stone. that's head and shoulders above the rest. i think if this thing continues to move higher, you get the nice dividend, but also it's a way to play the economic rebound. i would still own the name here. >> the assets on the balance sheet have been there at much lower valuations than they are right now. black stone has some 20,000 houses and has agreed or -- or is going to be raising more money for that fund so they can raise another $2 billion worth of stuff. that's not telling me it's over, but a lot of the things on the books are just starting to bear fruit. >> one interesting data point about the private equity points, carlyle will have an ipo this year. black stone had their ipo in 2007 as the market topped. so the private equity sellers are pretty much people. i mean, black stone looks cheap. >> we're watching those stocks. fed this afternoon, we haven't
taken our eye off of what's taking place over in cyprus as well. we want to get the latest from there. michelle caruso-cabrera is standing by. michelle? >> hey, there, scott. cyprus has to move on to plan "c" because plan "b" has been rejected by troika. cyprus went to the troika and said instead of depositing the deposits in the bank what if we we raided a pension fund? like 4 billion euros and they don't like that because if you raid it now, you get cash. you've got to pay the workers down the road. so you still have liabilities. you have increased them. doesn't do anything for your debt sustainabilities. what if we sell the good banks to the russians, and the troika said it's the bad bank that's the problem. who who's going to absorb the losses so we're back to square one. ultimately now if the european union doesn't blink and if the russians don't come through with
another plan, cyprus faces a choice. they either wind down the two big banks and a lot of people are taking a lot of losses though the insured depositors can be protected or they leave the euro. we'll have to hear a decision within the next couple of days. in the meantime, we have three graphics to show you how cyprus got into the situation. look at the growth in their assets and their loans. it has been enormous. they grew this thing enormously. then look at what happened to their gdp. it has done nothing like a lot of the rest of europe. that means a lot of bad loans, fewer assets as well. what did we see if their interest rates as a result when they went to ask for help? they went through the roof. so that's the situation. some hard decisions have to be made and very, very soon, guys. >> thanks so much. michelle crusoe ka brer aruso-c
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welcome back, everybody. well, gold bugs know that we're looking at the worst quarter in almost eight years so it could promise of more qe from today? jim, what matters more to you and to gold investors, the fed or what is going on in europe? >> well, at first right now it's what's going on in europe. and now, if the chairman goes back on what he said last time, remember last time he said global risks have eased. i'm not sure he can say that now. if he starts to talk more, you know, implying more liquidity and accommodation, gold can rally here.
>> it hasn't been fun to own gold these past few months. do you find we're finding some technical support? >> well, 1600 is basically the line in the sand. the bulls want to see it close above 1620. perhaps new money comes into the market and we start to take off. if we those on the down side below 1590 the market retests the lows. >> all right. we're hitting about 1600 right now. in the meantime, scotty, back over to you. >> thank you. the european close is next. and a big debate as well on henar. [ male announcer ] just when you thought you had experienced performance
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to deposit checks from anywhere. [ wind howling ] easier than actually going to the bank. mobile check deposit. easier banking. standard at citibank. the european markets are closing now. the european markets are closing now. >> so the markets don't care if the cyprus banks implode or more accurately they probably think that a deal will be done to get international aid to prop them up. most of europe has rallied through this session as you can see. except for the u.k. we'll come back to the u.k. in a moment. but the me riffual of europe, the periphery of europe, the italian and the spanish banks the ones that fell yesterday
have come back nicely today. if urge looking for a point of contagion from what's happening in greece, you might look at spanish and italian sovereign debt. if anything, on a longer track, the yield since the italian election has actually been declining. today and tomorrow is when the italian president will bring all parties together to try and form a new government. he will probably fail at that. therefore, we will be looking at fresh elections in june and a caretaker government until then. which if you're an american investor is like a get out of jail free card. meanwhile, the home builders are rallying into the close. check out the guys,ys,oe simmon, all gains. george osbourne here has given his annual budget. he told the bank of england to do more to stimulate the u.k. economy. 2% is a target, it's not enough. he wants more extraordinary measures.
in other words, he wants more qe. don't forget the bank of canada's governor is taking over the bank of england in june. what's interesting is that the recent bank of england meetings actually they have rejected the idea of more qe above half a trillion u.s. dollars for fear of what it might do to sterling. this is important going forward. look at the decline this year that you have had for sterling against the dollar compared to the decline that you have had on the euro. it's a much bigger fall. it's a much smaller economic area. beware of sterling crisis in 2013. scott, back to you. >> thanks so much for that. so what does the situation in cyprus mean for your money? joining us now from london is gemma godfrey, which oversees over $7 billion in assets. good to have you on the show. >> thank you. >> so yoeurope's up, so do we
think there will be a deal? >> cyprus has revealed sort of cracks in the floor. we are seeing a lot of market exuberance, but it is a bit of a game changer. the reason behind that is that the words that we heard coming out of drachi has provided support. and cyprus has highlighted there are some key issues that still have yet to be addressed. so first of all, what are investors looking for? they're looking for guarantees for their deposits. this is raising questions if they can suffer losses. secondly, they're looking for liquidity. they're looking to try to wean banks off of e.u. funding and encourage them to lend to each other. that's heavily undermined. finally, the whole talk about a banking unit is to break the link between the health of a banking system and the health of a sovereign which obviously causes spikes in sovereign bond deals and instead we are seeing
the bond strengthening. so there is certain cause for concern concern. we think that the concern coming out of the fed will overshadow what's going on in europe. >> that's all right, because we're focused on the fed, obviously. and the market here appears to be as well. right? we're up 60 points. not to down play what's taking place in cyprus or be dismissive of it, but does it really matter to investors in the united states who look at our major averages and see that the s&p 500 is marching ever closer to its all-time high? >> i think it's crucial for where investors are specifically putting their money. it's going to become more and more of a stock picker's market. we have started to see correlations forward and what this highlights is that weaker banks are going to suffer from higher funding costs and banks that have capital adequacy, good capital positions are going to
deserve a premium. so, you know, whether we're talking about when a market is going to fall, you know, have we topped t t reached the top, et cetera, you say in banking there's a greater divergence between the stronger and the weaker. >> all right. gemma, good to talk to you. we'll see how it unfolds over there. a big story not to be missed. all right, lennar shares continue to surge after better than expected earnings but is the trade running out of steam? it is time for a najarian brother debate. who is the bull? john is the bear. 90 seconds on the clock. bull, make your case. >> well, i think when you look at things right now you're looking at low interest rate environment. that's something we have been in for a long time. i think that's going to continue certainly we'll know more about that when we hear more from the fed. i think that's one. when you look at buying a home, versus renting a home, i think the advantage goes to the
buying. look at what lennar has going, new orders are up 34%. we're up at $43, i missed it. i think it's doing higher. >> doc, what's going on? >> for 2013 i do think it's going higher, but in the short term the index of home builder confidence, these are the actual people swinging the hammers and so forth is now at a three-month slide. in other words, after having eight months of just very positive outlook, now they're negative. and you've got input costs. all the costs because of superstorm sandy and all the rest have increased for the guys. the problem for the home builders is supply. they don't have enough of it. so demand is there. supply and demand that's what you have to balance out. but they have too much demand. they don't have enough supply right now. in other words, all the wind has been at their back.
that's why you wait for a pull back to get into this one. >> murph, you're dying to get into. i know what side you'll come down on. i'm going to stop the clock and go right to the jury. >> i'm long lennar, just to point out doc said wait for a pull back. of course, these names have given you an entry point to buy on pull backs but the backlog is what you want to focus on. look at lennar, the demand is there. they're getting pricing. the reason i was smiling the ceo made a statement this morning, he's not looking at 2013. he's no longer looking at 2014, but he's looking at 2015. they're going to start building homes for two years old. there will be a demand and supply there and they'll expand the markets. >> unfortunately i look at that as a positive negative and what if they're overpaying right now? when you look out that far, we have heard many time in the fast
when they go out 14 or 15 -- >> unresolved question about whether everybody is getting too optimistic about what's taking place. stocks have run a long way. your better think that the story not only continues but continues to even get stronger. >> right. >> if you think that the -- >> you should see volatility easing in the stocks because of the fact that like i say, they have got a supply problem. the demand is definitely there, but they can't -- just like apple, they can't sell them if they don't have them in the store. >> to pete's point, i think visibility is not as strong in 2015 to make a reliable prediction. >> it's not about 2015. i love the way that the brother jumped in and stuck up for his other brother there. but is he simply saying he's going of out the 20 is a because they need to plan ahead. they don't buy the land tomorrow because you ordered the home a week ago. they're spending money. they're buying this land at depressed levels. still, they're not overpaying for the land. when they have the numbers that
they're putting up, everybody wants to make the argument that it's a valuation stand point. but they continue to perform quarter after quarter. the valuation won't serve as a ceiling right now. >> material costs we have to remember. >> we started with the debate, we ended up with a scrum, right? we were all in there. we want to know who you think won the debate. tweet us @cnbcfast money. use the hash tag bull or bear. coming up next though, going global for growth. lewis kauffman with thornburgh investments is finding the next big play in some unusual investments. he's up next. 64 stocks but there can only be one winner. from favorites like google to mid major comebackers like netflix, it is time for "fast money madness." who's the best stock in the land? the traders and you make the picks.
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help for aid. we're live on the ground in moscow for the latest developments. and it may be one of the biggest hack attacks, yes, south korean media outlets have been hit. fingers has been pointed at north korea. at what point does it constitute an act of war? back to scott now on "fast money halftime report." >> thank you, tyler. see you in about 17 minutes or so. shares of fedex getting hit today after they failed to deliver on third quarter earnings and yesterday on "halftime" two traders were debating the name. let's listen. >> it's a great growth story. it's the way to play the u.s. economy on good growth and e-commerce. it looks strong, fundamentally it looks like a good effort. you need to own the stock, the next biggest competition it kills the u.p.s. >> simon? >> it's a great company. you missed the trade. >> well, let's bring back in the man who made the bold case
yesterday. see if he's changed his mind now. simon baker on the phone. simon, rough morning for you, huh? >> yeah. clearly, the timing wasn't ideal. you know, one of the foipoints made it might be a soft quarter. i think it was the magnitude of the earnings miss. but bottom line, the story is very much intact. it may progress on the restructuring. still one of the best ways to play in the recovery in the u.s. economy and the continued rise of e-commerce. they go up 8% very much in line with the s&p. >> so you must have bought more this morning. >> no. i mean, we have been a holder of it before christmas. still up over 8%. but look if you're a trader in the stock market, it will still be choppy. but long term, buy on the dip. >> what -- >> i was going to say i disagree, simon, because if you look at the guidance going
forward, it trades at 17 times, but still having trouble meeting analyst estimates. what do you see that's going to change on the international revenue front? >> okay, i think it was over the last five years, only two estimates that missed, which is last quarter and this quarter. a big part of that is the miss on guidance. because we know they go through a massive restructuring. so i think the problem isn't identified yet. it's a choppy area. but to be fair to the country and the guidance, you have massive restructuring. you're taking people out of retirement. get massive cost cuts in the area. it will be difficult to give guidance. we hate it when companies miss. you really lose confidence in it. and i think they have a plan to get out of it. it's a great company and great in the u.s. economy and compared to the competitor, the u.p.s. i'll be buying it all day. >> we're looking at a picture of you on the screen, you have a big smile on your face. >> well, you know what? that smile was when i was
talking about lulu yesterday, should be another picture where i'm not looking so happy today. >> a little bit blue today. all right. simon, we'll talk to you soon. >> thanks, gentlemen. also, u.s. stocks climbed to all-time highs, emerging markets are getting behind. the index has fallen 7% % inhe last year. lewis kaufman runs the thornburgh developing world fund. welcome to the halftime show. >> thanks for having me on. >> why is now the time for emerging markets to catch up, at least some of them? >> well, to be honest with you, i'm not sure that it is. you know, ultimately, earnings estimates and earnings development drive stock prices. i think this is a period where by and large there's been a lot of disappointment in the major emerging markets. brazil is a market that was expected to grow gdp at 4.2% and enter into 2012 it will clock in at about 1.5%.
india is a market that's been growing 9, 10% for a better part of a decade. i think you're seeing 5.5, 6% gdp growth this year. china is bottoming frommen a economic standpoint, but i don't expect a sharp acceleration in gdp growths in that country either. overall this is a liquidity driven rally around the world. really hasn't been there and the one other thing that i would mention is the indices continue to be dominated by names like petri bass and they're attractive, but not so attractive. i think they're driving down the performance of the overall indices. so, you know, that's an area to avoid. >> you're seeing interesting opportunity that we don't talk about on an every day basis. in asia, where?
>> southeast asia is an area i would highlight as perhaps the only part of the emerging markets with the potential to surprise positively on gdp growth rates. again, i think that's important because it's hard to make money in stocks if earnings estimates for the companies you own aren't going up. so southeast asia is 21% of our portfolio. it's 10% of the index portfolio. i think that it's a market where, you know, by and large, thailand, philippines, are on the early stages of an investment stock. and share prices reflect that. those markets are up 8% to 10% this year even after strong performances last year. that stands in contrast to the bricks where every brick market is down this year. so that's a pretty big difference. >> lew, i think you were spot on about the call that some of the stocks in these emerging market indexes are what overweights everything. i mean, petrobas for instance. and pbr is done 46% year over
year. that's a huge negative and there are limited amount of ways that people that provide access can do it through big stocks like that so one big one can skew all the results. >> no, i think you're spot on and i think when you think about what you're actually buying as a retail investor when you buy an emerging market etf, and for that matter most active managers what you're buying is maybe a little bit less emerging than you might think. let me talk about that for a second. >> if you wouldn't mind. >> sure. if you look at the emerging markets index, 25% of the index is in korea and taiwan. our fund has 2% of capital in the markets. where's that money? southeast asia. it's in the u.s. multinationals like meade johnson which have 70% of their business in the emerging markets. in companies like the prada, and emerging asia. i think that's where you want to be. not korea or taiwan.
>> lewis, we appreciate it very much. sorry to jump in there and interrupt you. i wanted to get the picks. >> my pleasure. >> nice to talk to you. coming up on "the half," we'll deliver on the plays from sony to goldman so you can make your next move. ♪ [ male announcer ] this is karen and jeremiah. they don't know it yet, but they're gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other, which isn't rocket science. it's just common sense.
off-season highs but it's still in the green. the business softwaremaker pricing above expectations. telling dow there has been strong demand because vc firms have been overlooking business focus software in favor of consumer focus. up 3% right now. >> the stock is doing quite well. successful ipo. oracle is expected to report solid growth when it reports earnings after the bell. let's go around the horn and take our positions. murph, you first. >> i would not want to own jorlcle. i said the last thing last quarter and they had a nice rally. >> so you're patting yourself on the back and now saying you're going to do it again. jil, su i will, sure. >> a lot more compelling stories. >> i like oracle so if we have to, i guess i'm fighting murph on this one. >> again. >> i do like it. i think --
>> debates are good. >> the management team is strong and some of the pent up buying that did not occur in 2012 has been occurring in this quarter for them. >> pete? settle it then. we have one buyer, one seller. >> we not get this whole thing settled but i'm going to go with the guy who looks a lot like me. what has been working recently? big cap tech. intel has been moving to the upside. microsoft has been moving to the upside. i like what oracle is doing, great management team. it's moved toward the 52-week highs. it's valuations look completely fine. i think they do well. >> dennis? >> it's interesting. i was going to say on the chart 36.5 is a long term resistance level. if it breaks above that you could see a bit of a bell. >> we deliver with trades on four stocks. goldman social, sony, the power shares, db, agricultural funt and holly frontier.
murph is on the hot seat again. >> goldman is a name you want to own. this i think out of all the financials i would own bank of america but number two would be goldman sachs. it has had a nice pullback. i think they trade a lot higher in the long term. >> samsung is down the street unveiling new tv things today. sony is right in front of you right now. what do you do? >> sony is an interesting stock. when you go back a year ago, they were trading over $20. it got under $10 a share and now it's back to $17. low volumes. i'm not sure what they're doing. they haven't recovered since the walkman failed versus everything apple. they have the potential of going forward with the watch. only one analyst following the name, i think there are other names you'd rather be in. >> ag etf. >> i think in the long run this is probably a secular bull market still. i think agricultural is a long run bull story, but if dollar
strength continues you could see weakness. >> holly frontier? >> the crack spreads are working for them big time, judge. that's not going to abite. i continue to like this one. gasoline prices, i don't like this, but if you're a shareholder of holly, you have done this. gas line prices up 45 cents per gallon this year. who does that go to? it goes to guys like this,h hfc. >> give me the intraday again. was that a jon najarian pop? >> could be. >> look at that. >> look at that. >> you said you like it and bang -- >> giddyap. >> final trades when we come back. ♪