tv Fast Money Halftime Report CNBC April 17, 2013 12:00pm-1:00pm EDT
also to a senator -- senator shelby's office has confirmed the existence of a suspicious package. the hill trying to get some work done regarding the gun bill today. but all of it happening ahead of this carney presentation in a few moments. that does it for us. we'll hand it off to the fast "halftime report." >> it's a tongue twister. welcome to the "halftime report." we're waiting for jay carney to t take to the podium to discuss the two letters that have tested positive for ricin, one to the president and one to the senator. we'll bring it to you live. perhaps one of the reasons we sea market weakness. four hours to go until the close. here's where we stand now. we are off the lows. dow jones industrials average lower by 148 points. it had been down nearly 200 points. 14,608. a decline of 1%. the s&p and nasdaq are lowing by 1.5 and nearly 2%. they have apple in them. that's probably why they are
outperforming on the downside even more than the dow. the nasdaq now below its 50-day moving average. we're also going to be talking a lot about gold and copper to see what they are telling us when it comes to the world economy and what clues they can provide to the sell-off we're seeing today. the renewed sell-off after yesterday's rebound. here's what we're following -- golden student. it's the widowmaker of the year, but the sell-off in gold, and miners, that we'll be talking about. is it overdone? jenna godfrey will join us. bank on morgan stanley. bankers aric thatting a beating after bank of america's weak report. will morgan stanley post better results? two of our traders debate. first, the top story. the sell-off returns. energy, technology, financials, industrials leading the declines. consumer staples doing poorly as well, and theoretically they should be a defensive sector. what is the way to navigate the massive moves this week?
good thing we brought our trader to guide you through it. bk? you're bearish? >> i'm bearish, bearish for about -- i guess four weeks now or so, three or four weeks. and i cover a lot of my shorts yesterday, particularly european stocks, and this morning i put them all back on. i covered my -- i was long bonds yesterday. i sold them just to take profits. this morning, i went back and bought tlt, bought canadian bonds, bought u.k. bonds. i am as short and as bearish as i ever could be. >> how low could yields go on the ten-year, for example? >> who knows? look at japanese, they're .5%. why couldn't we go there if we continue to go down this road? >> you're a bear, too in. >> yeah, a lot of warning signs from this market for the last month. as bk mentioned, the defensive sectors have been outperforming, but the price action in the commodities is very concerning from the standpoint of liquidity slash ability of counterparties to take risk. when you see dislocations in the broader market like that, and
you see the way the vx is moving, now back back to 17, it shows serious concern in terms of liquidity. >> beyond the whole issue of when the commodities sell off, are they telling you that the economy is weakening all over the world, add to that the issue of people who are stuck because maybe they're getting margin calls and now have to do other things they wouldn't normally do. >> exactly. in the short term, i think the technical effect of having big dislocations in other asset markets is to transfer volatility to an asset market like equity, which has been relatively calm. you see some panic because of that. >> we have a panel full of bears, right, stu? >> not completely. >> okay. >> i've been cautious on the market. i haven't been bearish on the market, looking for a correction of 2%, 5%. no surprise that it's here, because nothing goes up in a straight line. i think, frankly, any talk of dr. copper is crap. >> what's the premise of dr. copper? >> they call him doctor, because he had a ph.d. in economics, and
the way copper goes is the way the global economy goes. copper's purely an indication of oversupply in the channel. that's true of iron ore, true of the other metals, as well as china slowing. so obviously, when any company slows, when any commodity slows, you've got to look at supply/demands. >> -- perfect indicator. >> it's only one. >> yeah, but copper used to be in tight demand until recently. >> but don't -- every commodity. look at the -- >> i'm not -- i've been negative. i've been short with metals. short iron ore -- >> right. the point is that goes right to the fundamental question of this market, is that is it oversupply? the commodity route we've seen, is it oversupply? if it is, that's great for the -- >> dr. j, any insights for options, what's going on? >> i think he mailed it in terms of the markets. when you have margin calls being made, and clearly they were being made, and people being in
forced liquidation mode, just as jim cramer says, when that happens, they're not asking questions. they're telling you what you're going to do, and then that wags the dog of our side of the market on the s.e.c. regulated products. >> the next guest was the first on the street to call for the s&p 500 to reach 1,600, and despite the sell-off, he is still sticking to his bullish forecast. recently upping it to 1,700. barry banister joins us from baltimore. what we've seen in the last three days, barry, doesn't make you nervous about your call on 1,700 for the s&p? >> we had a nice run for the nine months through march. but then the march 15th event was the cyprus bail-in. that's when you had the rotation to defensive u.s. stocks and away from cyclical stocks. so this is a multiyear change. we have time to be deliberate about it, but i think investors should position themselves for positive change overseas. the u.s. is leading the world. >> so bottom line, if people are watching today, is the message buy here because ultimately
we'll go higher? >> yeah, we're just consolidating after a powerful run. if you remember the day after the election, we began to take off. we had a huge run. we became within a breath of 1,600. right now, it's just a consolidation around these levels pending better global growth opportunities overseas. if you look at gold, it's telling you the implicit dollar is rising. that's deflation. deflation is destructive to earnings. so we need overseas to embrace some of the u.s. policies we've led on. >> bk has a question. >> yeah, barry, brian kelly. you talked about deflation. we're seeing it in commodities. ultimately, you said that hurts earnings, so that should hurt the stock market. how, knowing that, and using that analysis, can you say that the u.s. stock market can going to go to 1,700? >> yeah, keep in mind, though, that some of the best moves in the s&p are relief rallies. when the cuts turn out to be smaller than expected. so what you'll probably see is earnings revisions. we cut our estimates $3 below
consensus two weeks ago. when the revisions turn out smaller than expected, you get a powerful market rally, plus high inflation -- high p/e on low inflation. >> i'm curious, you mentioned earnings from international revenues. how do you see the earnings shaping up for the cyclical sector? so far in financials, we haven't seen the oomph we'd like to see over the next month. what do you foresee? >> you see tremendous p/e compression on peak earnings fears. in a way, they're oversold relative to sustainable earnings. the question, though, again is global growth. the u.s. was first in, first out of a global recession. the rest of the world really has to follow the fed and the fiscal script that we've written. the resistance to that, which you've seen in germany and china, is really causing this deflationary scare. and as that alleviates, we would
look for better global gdp growth going forward. >> that's pretty optimistic. barry, thank you. a little against consensus now, and i like that. >> thanks. >> okay. another buzz kill for apple investors. shares of the tech giant hitting their lowest levels since january 2012. the sharp decline seemingly related to a warning from suppliers cirrus logic who announced disappointing sales estimates this morning. down another 24 buck, $402.33 a share. joining us on the fast line to break down the move is brian blair, an analyst at wedge partners. what do you think of the move, brian? is it justified or overdone? >> it is justified, because what the cirrus logic report did last night preannouncement is verify a lot of investors' concerns, which are that apple -- the apple iphone and the ipad are really slowing down right now. you know, they basically said -- cirrus said in their announcement, they're taking a charge of $23 million due to decreased forecast for
high-volume product. that's clearly iphone and ipad. whether or not that's because of a new product ramping or whether the 5s coming or decreased demand, either way it's a negative in the eyes of apple investors. >> the third one i could see would be negative. if the first two, just relate to maybe a shift or waiting to spend money, isn't it? aren't they different, actually? >> well, you know, what it comes down to is we already know that demand is a little softer coming off the holiday season. but if the forecast is being decreased within the quarter, you know, it's probably a little bit early. because the 5s isn't going to come out until probably july. so my sense is, if this was a normal -- >> i mean, whew! that's three months from now! [ overlapping speakers ] -- that's going to kill everybody. let me ask you this. what point do the valuations become so compelling, because they have so much cash that in some way they're going to be able to deploy? it's getting absurd almost. >> i think it's been absurd for a while. once you got into the mid-400s,
it's been trading below 10 times, i think it's been in a silly phase. now, it's not about valuation. it's more about investor sentiment. i think it's going to take getting the june quarter guidance out of the way, i think, for investors to care about the stock again. i mean, everybody knows now that iphone's going to be weak for june, the june quarter, ahead of the 5s launch. we have to hear the guide, and then investors will likely to wade in with the risks removed. >> got it, brian. thank you so much. >> you bet. >> all right. let's trade this. steven, what do you think? >> well, he points out three things. the one that i'm not concerned about, actually, is the product changeover. >> yeah. >> because they do cut back. however, i don't think that's what it's about. what it's about is they are losing market share to android. the whole tech space that's related to smartphones is selling off and selling off meaningfully. but to me, it's a market share gain both in smartphones and ipads sort of satiated the demand for the near term. that's negative for apple.
apple does not become a buy until they come out with some compelling new product, not a 5s, and until they get realistic about their margins, which are twice what every other company is in the space -- so, yes, looks cheap. ex cash. >> at lows, bk. what do you think in. >> with apple, you have to separate the company from the stock. still obviously great products. but when you look at apple, who's going to be that buyer? you won't have that high-growth momentum investor in there. people are buying it, because they think they'll get a dividend. that's a different buyer of the stock than when the stock was -- >> but it doesn't matter! the dividend doesn't matter. >> i don't think it matters to what kind of investor is coming in there. that type of investor september somebody that will -- >> nobody is buying apple? nobody is buying apple? >> i'm not saying it's going to happen. that's my point. it's not going to help. >> i have not taken a position in apple yet today, michelle. at the end of the quarter, ale was around 4 60 q1, and the
volatility for vx apple was 27. today up around 44. in other words, the fear factor in apple is quite high. that's what you want to take advantage of is take advantage of either an overconfident market or an overly pessimistic, in this case. i think apple is overly pessimistic at 400. so i'm close to pulling the trigger -- >> pessimistic at 375? >> i would love to see a flush. i was hoping we would break 400, because it's a psychological level, that if we break 400, or close 396, you will panic people out -- >> these are expensive shares at 400 bucks a pop. >> yes, they are. >> what do you do instead that's cheaper in the options market? >> you buy a call spread. the stock gets right down there to that level, i'm talking about, folk, the 400 level. buy the may 400 calls and sell the 410s against it, something like that. you're defining your risk when you do that. >> i actually agree with john. we're getting to a point where it's very pessimistic in apple. it is much more of a value stock than a growth stock, which is
different investor based. if you get a sell-off on earnings, i would love to get in the stock around 375 after a bad number where all of the value investors will own it, like microsoft, even though it doesn't grow. >> the two-minute warning from the white house to hear from jay carney talking about the two letters preliminarily tested positive for ricin. one sent to the white house, one sent to the senator. we will carry that live. in the meantime, let's talk about unusual activity. dr. j, what is catching your attention today in. >> there've been a lot of big hedges put on. on monday and again today. and as that margin selling that we opened the show with in commodities and so forth was really hitting, people were raising cash. a lot of those settlements are happening today, quite frankly. and a lot of the pain that was experienced on monday, people were aggressively buying puts. today, iwm. that's the russell 2000. buying the may 91 put, selling the 77 puts.
they've got a four-point spread. this is a bet to the downside. >> and a sharp one. a big one. >> 30,000 times. that's 3 million share equivalent to the iwm. >> seeing something similar in china. a huge trade. >> we'll tell you about -- >> well, right now. >> massive trade in china. somebody made about $15 million over the last little bit. along the 3850 puts in april. that's the fxi 3850 puts. they sold 53,000 of those today. that's a big trade, 5.3 million shares' worth. what did they do? do they bank it and give the money to bk or the rest of us? no. what they did, they bought more puts out in may at the 35 strike. they bought 160,000 puts, and ennis was saying that's the biggest trade -- it's the biggest trade of the year. >> you'll see trades this year, but this year, 2013, we have not seen a trade on a single etf that -- >> so incredibly bearish bets on china, which falls into this
whole idea of fear to inflation, buying the treasuries, et cetera, right? >> yeah, i think the commodities are signaling that china might be in a deflationary spirals. they have the empty cities people have talked about for years now. they have very difficult means of making profits for these companies. >> as we wait for jay carney, the white house spokesperson, to talk about the situation with the two letters that have preliminarily tested positive for ricin, does this affect your trading at all? >> the ricin doesn't affect it at all. although, you know, many of those stocks -- the same ones that were going in vogue after 9/11 and so forth, as far as anthrax and things like that, stocks that work on not cures but work on the remedy for that, they are popping today. outside of that, i don't touch it. >> if i thought this was the reason for the market being d n down, it would affect me, because i'd be a buyer. >> i agree. >> however, because every time we've seen a terrorist act hit the market, i mean, they're horrendous acts, obviously, but they've been opportunities to step in as the fear factor takes
hold. >> because ultimately, the underlying economy is the story and its comeback. >> and they're isolated events. you know, they've been relatively small. so i think they're great opportunities. but china, just go there for a second. to me, that is the biggest credit bubble we're going to see -- >> yeah? >> -- in decades. the real estate bubble is going to make our real estate meltdown look like an economic expansion many people just don't understand it. >> they do. they come back and say, yeah, they got $13 trillion worth of u.s. treasurys. only, a $2 trillion problem. cash some in. >> but you also have -- >> you think of the whole country as a balance sheet. >> a new regime there, and they're not that generous, the governing, the ruling party. >> until they stare into the abyss. >> yeah, but -- they're two months into 10 years. >> yeah. >> like the ceo going to the kitchen sink order. for them, it's more important to take back corruption. the local government won't bail them out --
>> hold on. we've got to go to jay carney. >> good afternoon. >> let's listen to the white house. >> thank you for being here today. i know there are several matters that i'm sure you'll be interested in discussing today. a couple of issues that are under investigation by the fbi, and i thought i would start with that and then take your questions. as you saw from a statement from the fbi, as well as a statement from the united states secret service, there was a letter sent to -- addressed to the president that -- at a off-site mail facility, was noticed to have contained a suspicious substance and tests were undertaken. the fbi has the lead in that investigation, of course, and has said in its statement that they will be conducting further tests to determine what the nature of the substance is. of course, there was another letter, as you know, sent -- or detected by capitol police that was sent to a united states senator. that, also, has been -- is the
subject of the investigation by the fbi. and for more information about these matters, i refer you to the fbi. the president, i'm sure, you'll ask this, the president has, of course, been briefed on these letters. he was briefed last night and again this morning. secondly, there is obviously a lot of interest in the explosions in boston, and i wanted to make clear, as you heard from the president yesterday, that our hearts and prayers go out to the victims and to their families who were injured. those who were injured as well as killed in this heinous and cowardly act. the full weight of the federal government is behind this investigation, which is being led by the fbi. and as the president said, we will find out who did this. we will find out why. and we will bring those responsible to justice. with that said, it is very important that we allow this investigation to run its full course and to ensure that we retain the integrity of that
investigation. therefore, on matters related to the investigation, i would direct you to the fbi. as you know, the fbi is giving the press briefings on the ground in boston, and i believe they will be holding another briefing today. the president, as you know, has been briefed regularly on the incident in boston, beginning almost immediately after it took place. this morning, the president again convened a meeting in the oval office with his national security team on the ongoing investigation. participating in that briefing was the attorney general, eric holder, fbi director, robert mueller, the chief of staff, dennis mcdonough, his homeland security adviser and counterterrorism adviser lisa monaco, deputy national security david blink and kathy rumbler, deputy chief of staff alyssa
monaco, ben rhodes, and the vice president's national security adviser jake sullivan. as you know, tomorrow morning the president will travel to boston to speak at an interfaith service dedicated to those who were gravely wounded or killed in monday's bombing. i have a scheduling update for you on that. the first lady will be joining the president on the trip to boston. with that, i will take your questions. >> obviously, the public is already pretty nervous given the situation in boston. has the fbi told the white house anything about whether the letters that have been received are related to the boston incident? >> i would point you to the statement that the fbi put out. it is my understanding they have not made that connection. i would refer you to the fbi for that. >> do you know if they're not making that connection or they ruled out that -- >> i would refer you to the fbi. >> so there's nothing you can say to the public to reassure them -- >> well, i can tell you in line -- as you know, for a long time, there's been long-established procedures and
protocols. anytime a suspicious powder is located in a mail facility, it is tested. and i would underscore that the mail is screened. the mail sent here is screened and that these tests are undertaken at remote sites to mitigate the risks to both the recipients and the general population. the fbi has a lead for determining whether is suspicious powder is a dangerous substance, such as ricin. and those take place at accredited facilities, and they take a certain amount of time, as the fbi has indicated. you know, these procedures are in place. the procedures are effective and in operation now. and we are in the midst of that process, which the fbi is undertaking at this time. >> but again, there's nothing you can say about whether there is any connection between the letters and the boston incident? >> i would point you to the fbi, which has the lead investigation -- the lead in the investigation into each matter. and what they have said about this and their assessments on that -- on any connection
between these two matters. >> i imagine you will point me to the fbi on this, as well, but i'll ask. is there any indication on the boston explosions on whether this looks to be a foreign terrorist incident or a domestic incident? >> what the president said yesterday remains true today, which is that there is an active investigation ongoing. we have the full weight of the federal government behind this investigation being led by the fbi. all components of the federal government are assisting, including the intelligence community and others. assisting state and local authorities and the fbi in this investigation. as the president said, we do not know at this time yet whether it was an organization or an individual, foreign or domestic. but we will find out. and we will hold accountable and bring to justice whoever is responsible. but this investigation is now
not even 48 hours old, and it is important that we maintain the integrity of the investigation. it is important as -- >> all right. that is jay carney, the white house press secretary, acknowledging the two letters with some kind of questionable substance in them, but not acknowledging whether or not they were related in some way to the bombings of the boston marathon on monday. let's bring in john harwood to discuss more about -- any big news out of this, john? >> reporter: no. as you said, michelle, he was ratifying the notion that they've received the substances, initial positive tests. don't know for sure whether either the letter intended for the white house or for senator wicker actually contains ricin, but there was a field test that was initially positive. lots of false positives associated with that test. and secondly, he referred to the fbi statement saying that investigators do not believe that these letters were related to the boston marathon bombing. in fact, the fbi has said they
think they knew who sent them. we heard some chatter yesterday from other united states senators, that roger wicker was the intended target of one of them, that they believe that the letter may have been sent by somebody who sends lots of correspondence to politicians in washington. and so, that would suggest the more visible and known person that is, that would cast some doubt on the idea that it was related to boston, and that's what the fbi believes. >> john, and a highlight once again that they have not been able to say whether or not this is a foreign terrorist act or a domestic terrorist act. >> reporter: absolutely right. and even as the president and michelle obama have announced plans to go to boston tomorrow to commemorate the victims and commune with people in boston, they do not know whether it was a group, whether it was an individual, and whether that group or individual is foreign or domestic. >> john harwood, thank you so much. all right. the s&p 500 at session lows as we continue to watch the sell-off. we're going to talk about one of
the reasons why. bank of america bringing down the financials. one of the weakest groups in the s&p right now. we'll break it all down for you. plus, we're going to look at the mining stocks, many of them hitting new multiyear lows. but is now the time to buy? we're going to get her take on the gold play after this. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪
fngtss. one of the weakest groups of the session. the financials here lower by more than 2%. 2.5%, led lower by bank of america following their earnings report. kayla is here to break it down. >> revenue growth, michelle, has been elusive for banks. bank of america doing pretty well year over year, but it had a few issues that hit the bottom line. mortgages first and foremost. of course, mortgage origination is slowing down. they saw a big gain in the home loans. they're underwriting. half of them, most came from government-supported program. when asked on the call how they're going to increase that activity, they said they'd try to underwrite broader products, but they couldn't identify which ones those would be. the other issue is there are still a lot of legacy litigation, today settling $500 million lawsuit with some holders of the countrywide mortgage-backed security. this wipes out 80% of the claims. so it's overall a positive development. the problem is, the investors thought the issue was long gone and they were hoping it wouldn't
be a resurgence as it has been. expenses were masked. they were cutting costs and finally investment banking was a bright spot. bank of america showed fine numbers, but it wasn't outsized to gains as some of the peers were. >> and this isn't a question for you but for everybody. has the moment arrived? is this the moment we knew what happened in the middle of the financial crises, when we knew they would be regulated to the death that they're just utilities now? their profitability will forever be limited because of everything that the government says they can or cannot do? >> i'm not sure it's about regulation at this point. they do have a lot of capital. the issues here are low interest rates. they're trying to ferociously underwrite new loans, but they just can't do it at the pace to keep up with income where -- >> i think kayla's absolutely right. low interest rates have hurt all these banks' earnings powers going forward. on the commercial side, wells fargo and usb outlined this issues. the nims are going down. i think the first quarter was
the best it will get for the sector. i'm a seller for the rest of the year. >> i own b of a. it's still a 50% discount. >> asset managers, not the banks themselves. >> right. >> and then the margins were up. >> thank you, kayla. coming up, copper's warning to the world. maybe, maybe not. the metal touching a fresh one-year low. we'll head to the pits to see how the smart money is trading copper's next move. ♪
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i'm feeling like a broken record, but once again, s&p 500 hitting fresh-session lows. being led lower by financials, technology, and energy. all of those spiders are lower by more than 2%. here's the financial spider getting weaker and weaker throughout the session. ditto, same intraday pattern for the technology, lower by more than 2%, and energy is lower, holy smokes, 2.75% for the xle. which brings us to crude, lower by 2.66%. down more than two bucks.
bk, while we were sitting here, you sold brent. >> yes, i sold july brent about two minutes ago. and i was shorted yesterday. i covered it just about these prices. i wanted to get back in. so if you look at the inventory numbers today from the u.s., we had gasoline demand down, we've had production at highs since 1992. so you can go with the commodity oversupply story, but if demand isn't there, this is going to be that perfect storm -- >> you marked the low in the session. it just rebounded. >> there we go. >> copper down over 3%, falling to the lowest level in a year and a half. let's get to jackie deangeles. >> hey, good afternoon. copper is just one of the commodities that's gotten crushed this week. so how much more pain is ahead? that's the question. and what are commodities telling us about stocks? let's start talking futures now. rich is at the cme in chicago, and anthony is at the imex in new york. rich, how low can it go?
>> three fundamental stories. copper down 3% on imf, cutting estimates of global growth, down to 3.3%, substantially lower than what they estimated in january. chinese data, of course, weaker than expected, showing slow growth. and auto sales down. those are three components fundamentally that will drive the market lower. but this is a story that started about six months ago. take a look at that chart we've been in a steep downtrend, and the kiss of death in the first week of april was the death cross, the 50 crossed the 200 day, so technicians aren't in control of this market. if we close below 319, i'm guesstimating the next support is around three bucks. still a ways to go. >> griz, how worried should investors be about the declines in copper? >> i don't think too worried about it. obviously, today is not showing it. but if you look from the beginning of the year, the stock market has been up 11%. copper has still been down. i would argue that actually cheaper commodities -- commodities across the board have been down since the beginning of the year, but cheaper commodities are good for corporate america. so i don't think i'd worry too
much about the correlation between the two. >> okay. so not worried about that correlation. of course, we'll be watching the prices very closely. now you know how our guys are making money. what about you? our commodities delivering a warning to stocks? log on now and vote. michelle, back to you. >> that is such a key question right now, thank you so much. next up on "halftime," trading gold's wild week. the precious metal holding steady after yesterday's slight rebound. but where to next? gemma godfrey will manage us. she manages $7 billion at brooks macdonald. we're halfway through the trading day. next, citigroup, sales force, soda stream. what aren't we covering? google. gold, green mountain? we want to hear from you. tweet @scottwapnercnbc and the judge will give your stocks to the jury, next.
precious metal and miners getting hit hard, too. slews hitting multiyear lows today. are the fears overblown? let's bring in gemma. she has more than $7 billion in assets under management. gemma, you do think the fears are overblown, especially when it comes to the fear of central banks selling the gold, correct? >> exactly. the risks are overstated. what we're hearing in the headlines of newspapers at the moment is this fear that cyprus will be selling their gold assets, which is fostering these fears, the investor fears that european central banks will sell, which will provide a downside to the gold price. however, two points to note here. first of all, cyprus' holdings of gold are minimal, so that won't be a significant impact. secondly, there is this accord with european central banks whereby they are limited to the amount they are allowed to sell to 400 tons a year. so for those two reasons, we think the risksy overblown. however, we would be looking at equities, gold equities -- >> i was going to ask, what is
the trade? you think the gold miners? >> we think equities as opposed to physical gold. you can still see selling, because the gold is not giving you that yield which investors are so desperately looking for, whereas if we look at the miners, not only are they able to give you dividends, but they actually factors in a lower gold price and cutting the cap ex significantly, which is going to protect their margins. >> gemma, i tend to agree with you. i think the gold miners are starting to look attracted from valuation slash yield perspective. i'm concerned about the longer term outlook for gold. but given the very oversold nature of the miners, you could play a short-term bounce. what's your longer-term view? >> well, exactly, and, also, they are factoring in a lower gold price. so the gold price could continue to come off before they feel any pain in the bottom line. what do we think longer term about the asset, about gold? we do see certain longer-term dynamics. for example, emerging markets central banks need to diversify
their currency risks, diversify the foreign reserves. we're seeing this era of easing which is going to devalue the currencies. and if you look at the likes of china, et cetera, they have low single-digit exposure to gold, where in the u.s. it's around 65%, 70%. sri lanka came out yesterday and said specifically they see a buying opportunity for gold at these levels. >> so maybe jumping in here. okay, thank you, gemma. good to see you. today on big data download, the buzz on samsung's new s4 galaxy smart phone. according to yahoo! a huge jump in searches for the gadget, including the release date and the price. so who stands to benefit the most from samsung's big relegal? find out today at bigdata.cnbc.com. next, a retirement portfolio designed just for you, whatever your age. get this. it's courtesy of cnbc. details when we come back.
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december of 2011. so what do you do on a down day? we have the advice you need coming up at the top of the hour. now back to michelle and "fast half." >> yeah, key questions today, sue. thank you. never too early to begin planning for retirement, no matter what your age. bob is down at the new york stock exchange, as well, and going to look at new-age-based portfolio ideas to help you plan your future. bob? >> thanks, michelle. cnbc is proud to unveil the new series of retirement portfolios. these are three separate age-based portfolios designed by independent etf experts to help you invest in stocks and bonds and commodities all over the world using low-cost etfs. joining me now to discuss those and how you can use them is kim arthur, a member of our advisory council that put this together. the council has three etf portfolios, one for a 30-year-old, one for 50-year-old, one for a 70-year-old. let's talk about the first couple here. what's the main idea behind all of this? >> hey, bob, thank you. and thank you, happy birthday to 24th birthday to cnbc.
>> thank you. >> so what we wanted to do, bob, is we wanted investors to have some exposure to most asset classes, that would be stocks, bonds, cash, commodities, and even real estate, depending upon your age. and you can do all of this with etfs that are liquid, transparent and diversified. >> the thing i like about this, the core holdings, really three of them -- a domestic etf, international stock etf, and a bond etf, okay? so now, let's take a look at what they look like here. for the 30-year-old portfolio, 17.5% in the spider. that's the biggest etf in the world. 17% in the vanguard, old world etf, 2,000 stocks in 46 countries outside the u.s. and finally 2.5% in the i-shares bond market. treasuries, corporate, bonds, all at once. what's the purpose here? >> yeah, bob, it gives you broad exposure to stocks and bonds at a low cost of almost 10 basis
points, or .1%. >> all right. so for the 30-year-old, there's more here. you have exposure to dividend-paying stock s using te schwab, and more international exposure. you have a lot of international. why the emerging market? >> specifically with the emerging market consumer, you have the consumer exploding in the emerging markets. so we want to make sure we own companies that give you direct exposure to those emerging markets. >> all right. and then you have exposure to other asset classes. i like the fact you're reaching out here. you have some exposure to gold miners, a bad week for them. real estate. high-yielding bonds. senior bank loan portfolio that's got floating rate debt in it. why do you like floating rate debt? what's the point of getting people into that? >> bob, if the interest rates go up, and you own fixed-rate treasuries, you're in trouble. but with floating rate instruments, as rates go higher, your coupon you're paid will also rise, plus these
instruments are collateralized. >> a very good point here. finally, why global real estate? why not just u.s.-based reits? why global, international reits? >> we want to own the international reits that own real estate in places like singapore and the rest of asia, and they're trading at half the valuations that the u.s. reits are trading at. >> all right. thanks very much. the important thing here is you can see all of the etfs at retirement.cnbc.com. and if you have more questions. and on the closing bell, i'll run through the portfolios for 50-year-olds. we're proud to bring this out in financial literacy month. i want your opinion on what you think about these etfs once you've had a chance to take a look at it. >> and happy 24th birthday to cnbc. thanks for telling us, bob. >> i know. thank you. looking at the 10-year treasury, yield plunging as we see people moving into bonds away from stocks. should investors be running for
that was the level he was watching. below 400, watch for 365. guys back to you. over the long -- over a six-month period. >> i don't know what the real concern is about u.s. equity market. just another company and it has been relative. >> the producers want to do it now. >> i'm not buying yet. in terms of the market, these things happen. the trick is not to get emotional and throw out your core positions. if you think the fundamentals are good and you have done your wo
work. if the ten-year yield has fallen for a month straight. >> there is always a causational relationship. if i had money in europe, in banks and i'm getting zero interest rate but yet i find out that 60% of my money could go away? so i'm not getting paid anything and now i have a risk of losing half of it. i'm not buying european bonds. >> this is a company that does have a 3% dividend yield. i think the stock is reasonably valued. >> missed earnings, lower guidance. it's defense related and i
wouldn't buy it. >> car max, drop 4%. what do you think? >> this is one that has been on fire. i think it's breaking here and broken down. >> a little bit of a safety tree here. slightly better. people are looking for safety. >> positive stock and a very negative day. [ female announcer ] it's time for the annual shareholders meeting. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪
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