tv Fast Money Halftime Report CNBC October 30, 2014 12:00pm-1:01pm EDT
here we are moving up again. things have gotten calmer. >> shaken up? >> yes i was shaken by it. everything is a lot easier when the markets doing well though. >> we appreciate you spending an hour with us today. >> great to be here. >> that's a all for "squawk alley." nearing noontime and with that we send it to the halftime report. welcome to the halftime show. meet our starting lineup for today. josh brown, stephanie link, jon najarian is the co-founder of option monster and --. we begin with the end of qe and what it means to your money. stocks had an incredible run. today they are mixed in what
we're calling the easy money aftermath. the question now, can the rally continue even without janet yellen's help. >> couple of things. first and forecast now europe becomes more the focus. and with that don't expect yeeds to run away. on a competitive basis european yields will remain low. the biggest story today is oil is down significantly and s&p is rallying. to the algos that is a nightmare. they have been oil down sell equities. >> crude is down more than 1% now. >> not going work now. oil down. equity is going up. that's the first time we've seen it in many weeks. that's a good thing. if you are trading that correlation you are going to lose money. i don't think it is going work anymore. >> the fed gets out. rates still stay low. what do you do between now and the end of the year. markets set up for a run here? >> i've been in the camp that it is better to be more cautious than aggressive here.
not to say being out of the market or betting against it. but there are a lot of reasons why it is likely to me we've seen the best we're going to see this year. and we're in the midst of a consolidation. but the internals are telling me i'm wrong. if you look a high low index which is the new york stock exchange names t new 52 highs subtracting out the 52 week lows. thats a swung back positive. and it's even higher than september 19th when the price index supposedly had topped out. you can't say expanding leadership is bad. it's a big positive and confirms the vicious rally we've seen. and it is really hard to want to fade that. >> even the fed announcing qe ending. are you worried about the market's ability to stand? >> i'm not. the economy is better. and they basically told us they are feeling better about the economy. and when i listen to companies
and conference calls from third quarter, you know, alcoa, eaten, cummins, pan panera, sun trust. all are saying the u.s. is better. we're not going up to 5, 6% kind of growth. but 3, 3 and a half is good. at the same time interest rates are not going to explode higher. lower interest rates and lower oil. i think that sets up for consumer i and would be buying. we have been buying much more overweight on the consumer side. i like the financials and industrials too. we didn't change anything from yesterday but i do feel better about where we're going. >> where else you going to put your money doc? >> yeah. >> this is the place to be relative to almost everywhere else. >> and today in germany. they were down 1.6%. biggest economy in germany. look where it's finishing. it went positive in the last few minutes. now up 20 on the day. in other words it went from 8900 to 9100 today. so far.
we'll get the update at the bottom of the hour. but that is a big move, judge. look at the tlt and tbt. everybody said oh many i gosh when qe ends we're going to go rocketing up to. what joe said and steph and josh, none of us really believe that is the case. because there is continued pressure from europe on rates, that is. and that is going to make our t rates more attractive which means the strength is going to continue to draw people in as well. so i don't know how people have a view that yields are going to be jumping up, judge. they will move up gradually. >> i think it's really important to keep in mind. doc makes good point. you still have a 4. -- something trillion dollar balance sheet at the fed. there is an on going thing. and there is no reason to think there is any rush to raise rates. you have no inflationary pressure. and frankly, you can't afford to pay higher interest on that
balance sheet just yet. we are in nowhere as good a shab as would be necessary. so when they say lower for longer you should believe them. >> muhammed al arian is chief economic adviser from aaliance. >> thank you scott. >> what is your reed yesterday? was it more hawkish? >> i'll call it more open ended. yes we exited qe but we are reampling policy guidance. they are trying to keep all options open and rightly so because as the fluid global economy. >> what would be your play then. if you are sitting there trying to figure where where he go from bonds and stocks today relative to what the fed said yesterday and the months ahead what would
your best strategy be. >> two facts. fact one is yes, qe is over in the u.s. but easy policy is not. fact number two, qe may be over in the u.s. but there is going to be more qe in europe and japan. i don't think the qe trade is over. i think it is evolving. the old trade was all about the fed's ability to repress volatility across the board and boost asset prices and it worked very well. the new qe trade is about the multitrack world of the currency banking. it's more on the currency. i would expect for dollar strength. more behavior in the bond market. and the -- those are three things from the qe side. >> where do you think rates go? >> i'm with those who say we're going trading in a range of 220 to 260. bauds the economy is still weak and the fed will continue to give a signal.
i'm also with with what pimco said yesterday on cnbc which is focus on the destination rather than the timing of rate hikes. and if you put the two things together, then we're going to have relatively well-behaved rates for a while. >> mohammed, it is joe. with the election coming in the u.s. and the republican's position to take strong gains in both the house and senate. do you have any concerns surrounding the federal reserve and the pressure that may be exerted on them next year by the republicans for some of the actions on, you know, the remaining aggressively easy so to speak. >> i don't think we're going to see a big change. it is already feeling the pressure. entered qe three it suspected it it would e exit in a much more vibrant economy. it realized the marginal benefit of qe three was coming down and
the marginal costs and risks were going up. i think the fed has felt some pressure. we've seen it. i don't expect a significant change. >> you said you think things are going to be more differentiated in the stock market. are you saying that certain areas of the market are going to likely go up now versus others? what exactly do you mean? >> couple of things. i think the bet on the u.s. always outperforming is a more delicate one right now. secondarily, within the various markets you are going to see different behaviors because fundamentals in the u.s. are going to become more important and policy is going to be more important in europe. but the main action is going to be in the currency market. we've had a bit of a pause in october because there was some doubt as to whether the qe three exit would happen. but i suspect you are going to see renewed strength and renewed fx volatility that is going to translate into other markets.
>> how strong drooung dragdy acts. >> you are going to see quite a bit. because he has no choice. the rest of the policy apparatus is pretty paralyzed. >> do you think qe was effective mo haemd? or not. >> i think it was effective buying time for the economy to heal. buying time for washington to get its act together. washington hasn't gotten its act together. so therefore the debate is on. but it did buy time for the economy to heal and that is important. >> made a lot of investsers an awful lot of money. >> oh it did. and if you repress volatility and tell not only the fed is your best friend but we are in a low level gold locks on the economic front markets will will do what markets should do.
so great for markets. less good for mainstream. >> we'll see you soon. with qe official ending rates expected to rise. how should you trade it? dominick chu has the run down. >> here is what we do not. dr. elherian just said he el-erian. the last time we saw a huge rate rise was a back in last year, mid october. rates went up about 140 basis points. take a look at this rising rate loser screen we have. the worst performing sectors in the entire s&p 500 as interest rates rose were the ones that you would expect would do poorly when interest rates rise. the ones that have big dividend yields. those yields become less attractive as rates go up. as you look at rising rates winners. financial, consumer discretion skris industrials. all rose. the sectors like these are the
ones that benefit if interest rates rise. at least they dade the last time we saw a rate rise of the likes of which some are predicting. >> thanks. do you want to take this on? >> one area that didn't get mentioned here as a loser. real estate investment trusts. not they are guaranteed to lose. they can go up. but if there is a sharp rate rise they are going kill that sector. and that is a crowded overbought, overexcitable sector as it is. 52 week highs for most of those and they will come down in my view if rates go up. >> but you said a sharp rise in rates and you don't expect a sharp rise. >> could have a sharp rise in near term rates and virtually nothing in long-term or vice versa. a lot of things can happen. but that is a sector that has not gotten hit yet and it could. and it's crowded trade. >> munies. >> they have been one of the
reason why is the retail investor was able to weather the storm in october. i would stay with it. you were going to have an event in february surrounding puerto rico needing to restructure. you might get dislocation there but that is an opportunity. >> coming up. hoop dreams rekindled in cleveland lebron's home coming is having impact well beyond the basketball court. morgan brennan is live in cleveland for us. also is starbuck's brewing up a another strong quarter? we're going to trade tonight's report in an earnings preview edition of the blitz but up next your best bets on the internet. a tech fund manager with three names in mind and one is a chinese e-commerce company not named alibaba. we're talking with ken allen of t rowe price when the halftime show comes back. there's a difference when you trade with fidelity. one you won't find anywhere else. one-second trade execution.
and provide a well-rounded education. and torlakson's plan calls for more parental involvement. spending decisions about our education dollars should be made by parents and teachers, not by politicians. tell tom torlakson to keep fighting for a plan that invests in our public schools. tim cook is proud to be gay. jon fortt is at the stock exchange with the talk of the wall street today. >> widely known in many circles. but there is a special significance to him penning this essay where he not only talks about that but also talks about the importance in business of diversity and of being one's authentic self.
just a couple of peaces from the essay. "being gay has given me a deeper understanding what it means to be in the minority and provided a window into challenges that people in other minority groups deal with every day. making me empathetic and leading o a richer life. he goes on to talk about how he expects this to have an impact. he says i don't consider myself an activist but i realize how much i've benefitted from the sacrifice of others. so if hearing that the ceo of apple is gay can help someone struggling to come to terms with who he or she is or bring comfort to anyone who feels a i lo alone or inspire people to insist on their equality then it's worth the tradeoff of my own privacy. he still wants his own privacy but he's penned this essay today. >> well said. jon thanks. our next guest managing more
than $3 billion, and he's got three stock picks that might surprise. ken allen who runs t. rowe price science and technology fund. maybe if first and biggest surprise is amazon. people are running away. you are running in. why? >> amazon is pretty controversial right now. i think investors are pretty frustrated after the most recent quarter's results but i think taking a step back, the big picture is we're extraordinarily early in the move from off line to online e-commerce and cloud promise to online commuting. and i think it will be dramatically larger in terms of revenue and higher margins. >> you are comfortable with the level of spending that has so many others up in arms? >> i see why people are up in arms. the phone has been a tough
investment so far. it's unclear where that will go over time. but i this i the overwhelming things that are more important are the scale amazon has built and will build going forward and that will make it increasingly advantage and better costs and pricing versus competitors. i think the market has largely forgot about amazon web services which is a crown jewel in cloud computing will and provide value over time. >> one of your picks is linkedin. it's still strong at 43% for the year but down considerably from the mid 50s and 60% left wae saw last year. at the same time you see expenses going up. that is the problem with all of these internet plays and social media plays are facing. do you think that is factored in? and how do you address it? >> good point in terms of the highest growth companies are the investing aggressively and
therefore marginsn hadn't been coming through like investors hoped. facebook and linkedin. linkedin is the --. if you think about what linkedin in building they have over 330 million users. thats a massive global customer base. what they are going to provide via network effects where each user gets more value from additional users comes in. they are able to command nor business value and create more over time from that. so linkedin is one i think is overlooked and is really promising from here. >> talk to me about vip shop. how long have you been in that name? as the chinese internet stock. >> we've owned that in my portfolio for around 4 or 5 months a in the point. like a lot of internet and growth-related stocks in the spring. it sold off a lot and we were able to get an opportunity
there. it's had, as i think you are suggesting a dramatic run since its ipo. wish we owned it the entire time of course but it's very promising from here in terms what they built. if you look across the large cap network it is very fast growing. >> how do you view alibaba versus this company. >> approximate good question. in thinking about it the key things to me are the focus and the expertise that vip shop is building in the apparel space. and a lot of things are unique there. so i think vip shop is establishing both online and offline barriers that will be difficult for alibaba to deliver the same kind of very positive experience for the merchants and the user. so i think they have a strong niche. >> talk to you soon. thanks for coming on. ken allen, t. rowe price.
>> amazon. we heard many years ago. >> are you short still? >> i'm not short anymore. i'm concerned that most people will not step in and buy it when you have the conversation with all of us on the desk and you have the holiday season coming. but longer term i heard the story about e-commerce and the story about icloud build out many years ago. to me with amazon maybe potential for a trade it works. longer term he's bringing uhm names that i would be attracted to. linkedin and vip, i've heard of that. he didn't talk about it. his second biggest holding is google. that also looks attractive into 2015 and you begin to get a move in the equities market away from weak balance sheet companies to stronger balance sheet companies. >> he's liking his visa holding today. that is for sure. about three percent of the portfolio. >> i'm actually the other way on amazon. i think everybody hates it now. it is kind of consensus to be
really negative on it. everybody knows about the operating margins and deleverage. and i think down 25 percent year date ahead of holiday season with a very strong consumer which is what i'm expecting, i think it is interesting. >> not a fan. below a declining 50 day, 200 day. no signal telling you this is where you want that knife to plunge into your back. gift it time. i still think it is on the way lower. >> i bought it last week. it's higher. i think it goes back up through 300. i'm with steph. 50/50 split here. although when kel ken allen was addressing the crown jewel, certainly amazon web services is a great product and offering. but this is one that's under pressure like crazy from microsoft, google, everybody. so it might be a crown jewel but certainly not hidden jewel. >> it's been one of the most closely watched moves on the street. crude oil down nearly 30% since
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welcome back. let's do our trader blitz earnings tile today. four strads on four stocks reporting after the bell today. gopro, it's lower into the report. >> lower 30% since it hit highs just a little bit ago when they a all of a sudden put the shares into the foundation to create that charitiable trust. this is very interesting. an $8 straddle. a 12% move. this stock is all over here. i'd tend to be a buyer on the dip. >> starbuck's. >> this is difficult to call. the expectations are muted. eps in 2015 are they going to
guide lower from the 15 to 20%. that is the key question. what are they going around coffee pricing? they have toe hedge out. overall everyone likes it including myself. >> groupon. >> seems to have found support here twice before. i would do nothing and see what happens. >> expedia. >> numbers have come down. i like the set up. earnings look good in terms of the hotel business as a whole. i like the online travel. >> our next says he's so bullish it hurts. why paul richard thinks market are primed for the big move. back right after this with the final trade in europe. ♪
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recently, greece. and bonds continue to sell off. so yields rising on the political situation there. top dwans gains in europe. alk tell lucent. and is second line oil producers are in negative territory and it's been a bad week for oil service providers, those that build the rigs in the deep sea. and gold and silver, silver down 5%. miners in europe are also in negative territory. huft ha lufthansa. real problems in pricing in particular its flights from north america. >> let's get to our next guest. says he is so bullish it hurts.
paul richards is head of fx a and -- >> if fed every took it as a negative. for a somewhat conservative chairwoman and her committee to change the language is a sign of confidence. then we see that gdp number come today and it was a great number. >> head line, yes. internal, i don't know about that. >> scott, take the head line. and it will be packed up by payrolls next week. the u.s. is just fine. that leaves europe. in europe's case we've got political clearly inflighting. we are not seeing reform there. they have had an ltro. avs the lower currency. and till the economy is struggling. that's why i think the next major macro trade if not qe at least the hint of qe.
>> are you more bullish on the spo stock market or dollar or equally on both. >> i'm equal but on a timing basis i would take the stock trade. when you look at positions right now everybody's had a tough october. they need a new trade and they will be dragged into this trade in my opinion. so i could go with the stock market first but very quickly be following it by selling the euro and buying the dollar. >> as the little bit of a reversal from what i remember. the last time you were on you thought the dollar was potentially topping out. we should be on concerned about the impact on earnings. now understanding that you think the dollars going to rise significantly. any concern with earnings being troubled by a rising dollar. >> the only thing i would say is that most u.s. corporates do manage the foreign exchange very well. i this i they are position for this and they can see the dichotomy between the respective central banks of europe and the u.s. so i'm not concerned about that. active currency management can overcome that issue.
>> do you have a view on where you think rates are going to be? by the end of the year even? >> i think rates -- i made this comment last time relatively boring then then they went to 1.85%. but i think rates are stable. yield is above 260 and i think the move comes next year probably in the summer but meanwhile rates are relatively stable. >> see you soon. appreciate it as always. >> any time. >> well the precious metals are moving today. silver trading at a 4 and a half year low right now. jackie is with us. >> it's been a rough year for silver. as a matter of fact it's down more than 15% year to date and as you mentioned these are the lowest levels since march 2010. talk to me about why silver has been weak? is this all the dollar here? >> no it is not all the dollar.
it is mostly the dollar. silver usually trails gold and catches up quickly. that is not what we've seen. we've seen silver lead the way a little bit. and i this i that is because silver is suffering from the dollar story. but then the global growth as well. remember silver is more an industrial metal than gold. so i think that one two punch is pushing silver lower. >> having said that. brian do you think we've seen a bottom in silver? >> i don't think so for sure. basically last week i was dumping gold positions. i don't like holdings metals. people wanting to hold a paper currency is so valuable versus owning a metal. that is putting downward pressure. so i'm not sure we have seen a bottom. we're in the adequate rant of low growth but we have a little growth. that means own paper, don't own metals. and that is the trade going on. silver may have more to go.
. . >> joe, do you have something on silver? >> it's interesting to me when you look collectively at the entire commodity space on where they are pricingwise. and think about the trend following funds that are out there. and they are all right now short. they are short gold, short oil, short silver. and it is a trade i wouldn't follow. i wouldn't short silver here at 16 bucks. where is it going to the downside? there is the industrial component, u.s. economy paul is telling us is going to get better. think for a second in oil. goldman sachs pauts target of 25 dollars on oil? i'm not saying step in and buy it but i don't want to follow and be short on that trade.
>> trong dollar trades. what do we like? it makes me think financials and it's a great reason to own financials themselves. not having to concern yourself well, where are interest rates going. think domestically the expose your the overseas revenue. pnc, wells fargo, u.s. bank corp. i. >> i actually prefer the credit card companies to the regionals at this point. although i still own some of the regionals just because of the rate situation. it is still doing to be a head wind. but the stronger dollars telling you the -- >> are you saying am ex? >> yeah. i like am ex a lot. and visa and mastercard had really good numbers but i think am ex is too much of a discount that i think the opportunity is there. i also come back to consumer. lot of consumer stocks are
really u.s. centric. and i like that and the economy getting better and and for jobs and the whole package. >> i think for a longer term thesis when you look at regionals, this is going on the this massive decision that portfolio managers have to make regarding energy. and they are going to look at financials and say okay, we're not necessarily sure that rates are going to rise domestically. so we don't know if we want the bank of americas, the citis t jp porgs. i think it goes to the regionals and understanding the dollar can rally themselves. we haven't seen m and a. i think you will begin to see the animal spirits in 2015. for me i think regionals is going to be great in 15. >> coming up one off our traders made a bold call on twitter back in the first week of september it's been a rough ride. we're going to find out how he or she is managing the losing trade. also can some of the biggest oil names withstand the major decline in oil prices?
up next top of the hour, power lunch, the end of quantitative easing. how are the biggest bond investors and traders positioning now? we'll weigh in. and some people made a lot of money predicting where the u.s. housing market will head next. now google is getting in on the game. we'll explain just how. and talk about awkward, san francisco giants won the world series but what gm gave the mvp is what's really got people talking now. and now back to scott on the fast money halftime report. >> look forward to that. and let's do a market flash now for a look at what ear swe're s on the move. dominick. >> shares of glu mobile. the makers of the kim kardashian hollywood game. the stock is hitting four month lows after third quarter sales
came in below expectations. as a result the fourth quarter guidance came up short as well. now this stock has a current market cap of about $362 million. they are currently down by 18%. so yes on the smaller cap side but one that got a lot of head lines because of that kim kardashian game. >> beaten up today almost 18%. not so fast stephny link. in september she made a bullish call on twitter. let's listen. >> really the engagement numbers. they were better than expected in the quarter and i think monetization will as a result improve going forward with new products and better ad loads etc. but i think for the kind of growth you are getting the kind of potential you are getting this stock is still down 22% from high. so i see an easy $10 upside. >> i know you are not happy with the most recent quarter. i i've heard jim talk about. i also heard you weren't giving
up yet. >> no. so a sound 19% this week alone. that is just a huge, huge decline. and it's gone from kind of liked, a lot of support into the quarter to really now hated. four or five downgrades. numbers coming down and no one has an understanding about the business model all of a sudden. to me it seems extreme. and if you step back, i don't think my thesis has really changed much in that ad revenues grew over 100%. monetization actually grew 83%. you looked at margins and they were up 1900 basis points. so i think that those are the reasons why i liked it to begin with. yeah i wanted to see better engagement and there are questions about that. but i do think the expectations have got son low at this point. and i think the analyst meeting sets up well if they can do a better job explaining the long-term vision. >> some of the biggest questions seem to be not so much around the fundamentals.
it's a premiere franchise. >> yeah. >> it is management, right? >> jim raised serious questions about the cred of management the other morning. >> well the ceo did not do a good job on the call for sure. but the qfo did. >> everybody likes nodo. >> i think he is setting the company you will better though for the next quarters. because he brought numbers back. he knows wall street. he knows maybe things got out of of hand. i think that though he knows the business. he certainly i think wouldn't have gone to twitter if he thought it was a broken model. and now low expectations and an immediate catalyst in this november 12 analyst meeting. i like it down 19%. it's hurt but i still like it. >> there is nothing wrong with their financials and very little nodo could be doing better. they doubled advertising revenue year over year and data sales growth is up too. the problem is engagement, which they classify as timeline views
for monthly average uses are were down 7% year over year. and that is really tough for a cfo to have any impact on. >> the stock is down 44% by the way from its high. >> and that was another reason why we actually got in it. because it was a high flyer that wasn't really a high flyer. so now it's gotten hurt even more so. and ad revenues per 1,000 views which is monetization is up 33%. so this is not a clean quarter and you needed a clean quarter and beat and raise and you didn't get it. but if i think if you go throw the details you can see the growth story is still there. >> one more thing. you have twitter down 44% from highs. and since we're there i want to this now. yelp is down 44%. groupon down 53%. zing ga, 60. pandora. 54. of the stocks which drou take a bigger not on right now? >> can i have the bullet
instead. >> i would buy a package. i would buy a bundle. because it's very hard. and in this area, growing at these levels i think it is very hard to manage the growth and expenses at the same time. so some quarters you are going to have a good twitter number. some quarters a better facebook number. yelp etc. if you buy a bundle you are going to win on more than you would lose. as a long-term play that's what i would do. >> coming up some stocks have gotten slaughtered this month. halftime with some performance that's so bad it's scary. and the king james dominated had off season to his return to the cavs but his homecoming may mean more off the court to cleveland than on. >> well he is not just king on the court lebron james is one of the most valuable athletes in the world and his homecoming here in cleveland is expected to add to that. that story after the break.
haunted. today's theme, bloodbath stocks of october, stocks that are down double digits this month. all right. joe. you first. you want to take bhi, baker hughes? >> no, i want to take urban. >> take urban. >> me. >> urban or steph. urban is a name. you have it in your playbook. urban is a name that i would love to come here and say scott at $31, i think you should buy it and i've done that. the problem is that the real foundation of what urban has been which is free people and anthro is beginning to decelera decelerate. that's a problem. you now have a company that's in transition. retail's all about momentum. urban has lost it. >> dr. j, netflix, down 16% over the last month. still up 3% year to date. what do you do? >> right. and it was down, whatever, 28% after that earnings report. >> you bought it the day that mark cuban came on the show. after he tweeted that he bought it. >> i still hauled half of that. make made a heck of a call and i was just coattailing him. this is one i do think you want
to have in your portfolio on dips. that was a very significant dip, judge. so i put some in mine. >> steph, baker hughes. baker hughes, down 20% this month. >> yeah, down 31% from its high and down 6%. >> three months down 26%, 5% year to date. >> big, it's ugly. all of oil services stocks are really down big. so i'm tempted, right, because it's down so much. and i think it's a quality company. but of all the services companies, these guys missed. the other guys didn't miss and the stocks are also down. so the one i would actually focus on would be slumberger because the numbers are actually going a little bit higher. but the stock's down almost 20%. so a baker hughes, though, i think also you have the issue of overall the oil commodity and do projects get canceled? so i think that's kind of the headwinds, unfortunately. so i wouldn't touch it. >> josh, first solar. >> this is a severely misunderstood stock. this thing came down with oil prices. people that can't think more than five days ahead of time are using this as a secular reason
to get out of a solar stock. really it's a longer-term story. i think you want to be in this name. it's 12% short interest. selling at 12 times forward earnings. the last eight quarters they've averaged 13% revenue growth. this is a no-brainer. i bought some on the pullback. and i think it should be held. >> okay. well, tonight marks lebron james's first home game of the season back in cleveland against the knicks, no less. who looked awesome last night. morgan brennan joins us live from outside the quicken loans arena. hey, morgan. >> reporter: hey, scott. well, i've got to tell you, it is the talk of the town here. lebron james and the cavs' first game of the season here tonight, four years after that dramatic departure to the miami heat. this homecoming is huge. it's expected to add $50 million to $500 million to the local economy annually. but what about for king james himself? in addition to a $42 million contract, he has a slew of sponsors including mcdonald's, coca-cola and just recently kia.
he also reps beats by dre and pulled in a recorded $30 million from the apple acquisition. and then, of course, there's nike which has the lebron sneakers. james has a $90 million contract there. so this is seen as a huge marketing opportunity for these companies, but given the national attention this is garnering, it should boost the lebron brand as well. now the cavs just have to win some games. scott, back to you. >> all right, morgan. i'm sure they're going to win more than some. i don't know how many they'll end up winning. you think they win 60 games, doc? >> yeah. and i think the betting line is that they're going to be one of the teams in the finals, judge. adding love was a big deal for them along with lebron. i think they rounded out the cash nicely. >> yeah, they've got a nice team. >> absolutely. >> and they play the knicks tonight, as i said. >> and you've got the knicks. coming up, we're debating big oil and final trades right after this break.
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exxon and chevron set to report before the open tomorrow. and with oil prices falling, what does it mean for big oil earnings? let's debate it. 1:30 on the clock. doc, go ahead and make your case. >> well, these both have great dividends, judge, which makes them attractive. but not if you think oil's going to continue to go down. the canary in the coal mine i have said is exactly what josh talked about the segment previous, which is the solar sector. i think that's the canary in the coal mine. that lets you know that they've sounded a bit of the all-clear. in other words, i don't think they're going to warn and go lower here. i think they're actually have already experienced the dip. and they're about to go higher. i like chevron, down 12% from the highs, and exxon down 9. i like each of them, josh. i think they basically thrown out all the bad news already. >> okay. i'll make this really simple. crude oil is 17% below where it was the last time both of these companies reported.
and i think the key here is yes, they have decent dividends, but those yields can go higher, especially in the case of exxon where it's sub-3%. this may not bottom until it's a 3.5% yielder. they're cheap when you look past the surface. especially chevron. six of the last eight quarters they've had negative growth. i have no idea somebody would want to buy this when you've got so many other stocks acting better with better prospects for earnings. >> i could be wrong, steph, do you own chevron? >> no, we sold it. >> you did, though. >> yeah. well, no, no, no, we sold it a while ago, yeah. and actually at, like, 119. it had run after that. we actually bought royal dutch shell. they had a very good quarter. the reason we own that one is because of the restructuring story. it doesn't really matter that much about where the commodity -- underlying commodity goes. >> okay. let's do some final trades. joe, you can give us a thought on big oil quickly and then a final trade. we have time. >> michael kors next week reports.
i think michael kors will beat, they picked up market share from coach. big oil, home gamers, buy it. >> doc. zroo dr. pepper, snapple, dps. >> you still like the royals not to win the series in game seven? >> yeah, i do. >> steph. >> allison transmission trucks. >> you guys hear that yesterday? >> josh. >> discover financial. >> "power" starts now. "halftime" is over. "power lunch" and the second half of the trading day start right now. >> all right. look at that. the dow up 152 points. it is up big. but appearances sometimes deceive. most of the gain for the dow is one stock. visa. visa shares up almost 10% there, 9, almost, at $233. and after that, it's not really such a great day for the bulls. remember, the do you is a so-called price-weighted index. so a big move in a high-priced stock like visa has an outsized impact on the overall index. coca-cola's up, but look at jpmorgan. it's just basically at