tv Fast Money Halftime Report CNBC January 5, 2015 12:00pm-1:01pm EST
and welcome to the halftime show. let's meet our starting lineup. stephanie link the coportfolio manager of jim cramer's charitable trust joe terranova at adver ts tis investment partner and josh brown rid holtz management and john najarian co-founder of option munster with us paul richards head of fx at ubs and dan dicker joins us on the phone to talk about that story today and our game plan looks like this, trader of the
year, the stocks and strategy that made joe terranova's playbook a winner in 2014 and what new names our packagists are betting on this year. barry banister's target for stocks and why he's staying the course with his outlook. we begin with the rough day for stocks. the major averages all falling sharply today. but that's only part of the story. fresh new lows for oil briefly dropping below 50. the ten-year yield slipping again and the euro falling to its lowest level versus the dollar in nearly a decade. we're trading it today. happy new year. >> happy new year. >> nice to see everybody again. josh what's going on? this sounds like history repeating from last year. >> right. >> we slid 6% at the start of last year. are we in the pro cess of doing this once again? >> it could be. just because the calendar rolls over doesn't mean the primary trends in force have to obey. if you look at the tape today it looks like almost any day during the month of december other than
the s&p overall being weak. the euro down, oil crushed, the dollar ripping. same old song and dance. energy stock the worst, health care leading. it looks like an extension of what's been happening. i would also add that this probably some exacerbation given the fact that it's the first real business day of the year and a lot of money that's in wealth management accounts is being rebalanced. you're seeing gains trimmed in u.s. equities and eventually that money will find its way to whatever has been underperforming. i think all of those things happening today along with the stuff in europe, it just is a very, very red ta. like you said at the top, this is how 2014 started off. didn't matter in the end. >> i wonder what you think this is about. is this about oil breaking below 50? is it about a possible greek exit pushing the euros to levels we haven't seen in a decade? >> the euro below 120 is a good
thing what mario draghi and the ecb is trying to accomplish. today this is about oil. i don't think there's surprise that energy equities and futures are being sold today understanding we will have dan on in a second and ask him this question, but commodity indexes the weightings to both crude oil and to brent crude oil are going to be reduced so you're going to see some of those indices have some selling pressure in the first week here. this is going -- this isn't going to abate quickly. i would not be picking a bottom in oil. >> dan, you're joining us on the phone as we said. feels like the most dangerous thing to do in the market these days is to joe's point, and that's pick a bottom in oil. >> yeah. i think look, scott, this is a disaster. this is a freefall. this is -- there are five major reasons i picked out for this sort of black swan event in oil. you've touched on a lot of them. the dollar, bad em growth, the kind of chase down to lower currencies in europe, you know, opec in saudi arabia,
overproduction here in the united states, and a lot of these from speculative groups inside the investment banks. all five of those are gone now. and in 2015, going forward, i see perhaps one of those changing and only changing slowly and that is in obviously the shale players in the united states who have to like back away from production now as lynn is doing with blackstone. so these five things have all combined to make oil a freefall mark. there's really nothing in the thesis right now to make any of those five turn around except for one that will take five or six months. right now a bottom calling i wouldn't do it. >> stef, make the case to me then that stocks can go up if oil continues to go down. >> well, i think we need stability in oil prices for sure. i've said that all along. the move today is surprising. the velocity of the speed of the decline. but i would say that lower oil prices are good for the
consumer. lower oil prices are good for a lot of industrials, a lot of companies, and unfortunately right now, we are kind of captive to this macro right now, right. but in a week we get alcoa earnings and hear from companies and they will be able to quantitify. i don't think you want to play in the energy spaces or industrials that have exposure to energy, but technology, i think you can still buy and buy certainly today on the drop. i think there are some industrials you can buy and consumer names too. >> bottom feeding is dangerous here. you're learning it a little bit yourself in the way the playbook is shaping up. it speaks to the point of trying to pick bottoms or catching a falling knife and people are getting burned bad. >> it's tough to spook a guy who starts the day off with two flat tires on his jets and has greek track ma in his pockets. i have the next worgs thing, energy stocks in my portfolio. not a great day here for dr. j.
however i'm third person now, too, stef. >> nice. >> as far as what is going on here, the two big unknowns whether or not greece gets kicked out of the euro zone, an unknown, and what the ram itfications are if, indeed, they do, and number two still on big down days in energy, we worry about the derivatives tied. over the counter derivatives, judge, which is what i've said all along. stef wants stability in energy. i would love that too. i worry about what are the over-the-counter contracts that have been written op days like today when the -- they're unwinding so quickly are forced to sell other things part of that package. that's what i worry about. those two big unknowns, greece and then the derivatives tied to crude. >> paul richards i bet you're surprised as negative as you were on the direction of what the euro was going to be, you must be surprised by the ferociousness of this decline in the euro versus the dollar. >> i am, scott, but what happened actually was on the
first trading day of the year, in asia, in very liquid markets, the euro went to a nine-year low. why did it go there? we know the ecb is about to embark on qe, but actually angela merkel called greece's bluff and the thing is, essentially the election in 20 days time is a referendum on the euro. from any greek individual that i speak to, they tell me that 60% of greek electorate want to stay in the euro. i think in 20 days time we will be looking at first trading day of the year and thinking we overreacted. we no what it would start to look like and you can thought that move in the euro was something last night would be severe like 110 but i don't think it's going to happen. we're overreacting but ta is a great sign of volatility in 2015 and january will be no except n exception. >> find out one of the biggest bulls on wall street thinks about all of this, barry banister is just that, has a big
target for stocks the chief macro strategist at stifle. welcome back. >> hey, scott, how are you? >> i'm good thanks. weigh in on what's happening in the market and how that could upset what you have as a pretty big upside for stocks, some 2300 by the end of the year? >> yeah, that's about 15% price, 2% in the yields, 17%. keep in mind 40s% of years in the last 50 have been that level or higher. it's not that much. late in the bull market you get a big move as people climb the wall of worry as your speaker mentioned the dollar is key here and that's when energy bottoms when the dollar tops. >> but are you making a bet that energy is near a bottom, that it's going to find its bottom? the dollar will stop going up? i think the consensus is the dollar will continue to rise, energy at best is not going to start rising, so how does that mess with your forecast? >> shabsolutely you said the wo
consensus. i haven't heard a single argument. the ecb knows what needs to be done. the market's massively front run the ecb. factored in about a 7% balance sheet expansion already into the euro. and what's going to happen right now is that you're calling out on growth initiatives globally to help catch up to where the u.s. has been. the deflation from the dollar is probably going to keep the fed on hold, so stocks look okay with about almost a 6% earnings yield on a forward basis. >> that's the debate. goldman sachs out with a note this morning saying they're looking for a total return of 4% this year, s&p at 2100, they say when the fed hikes rate in the third quarter the p/e multiple on the market will slip to 16 and you will not have the kind of year people are expecting, it's just not factored in, if the fed acts. >> i would be more worried about the p/e going up because the earnings go down than i would be
about a compression of the p/e. i don't see that level of ten-year yield that would argue for that. it's very attractive. i would disagree with their forecast. >> i know we'll talk to you multiple times throughout this year and see what ends up happening. barry banister, thanks. >> i have two calls in my hand barry at 2375 and i've got kostin over at goldman sachs saying 2100. who's right? >> i think -- what you want to focus on is goldman sachs is more of a near term call and to look at their near term call you have to go back to the fall and look at the significant bounce we got from october. you had a catalyst. the catalyst was earnings, the catalyst was buybacks returning on november 1st again. right now the challenge for the market and the answer can be presented quickly, what's the bullish catalyst? the market is in a prove me state. you can get a lot of good tail winds going back into the market but the market needs to prove
itself. >> i think the caught ta list will be -- catalyst will be earnings. we got a good ism number, lower than last month, but 19 consecutive months of expansion in ism. how about these auto sales? we didn't start talking about the auto sales. over another 17 million for the month of december and november was a record month. so i think the economy is going to continue to show strength. that's good for earnings, good for revenue growth and i think that lower oils prices helps in addition. >> yeah. virtually everything judge that we look at, is going to be positively impacted once we stop falling 4% a day in crude oil. when does it happen? i thought it would have happened already which is why i picked some of the stocks i picked. if it's going to continue to fall 4% a day we don't have too much further to go if that's the case. i don't see that in the cards. could we see a 40 handle in crude oil? we did today, right or pretty close to it. and i think we could see it again.
but if it's not falling precipitously it's going to be bullish and good for the economy. >> dan, thanks to you. paul richards, thanks to you as well. coming up david westin, former president of abc news weighs in on everything from the sony hack to yahoo!'s potential acquisition of a cable network. he's going to reveal the biggest threats to television right now. then it's the moment we've been waiting for all year long. joe terranova receiving the coveted cup. crowning him trader of the year. his portfolio ended the year up nearly 25%. and after the break we find out exactly what trades got him there and what he thinks is going to happen this year. we're back after this.
welcome back. it's been a rough start to the trading year in 02015. dow jones industrial average down 1.5% the worst start for investors since 2008. you can point to a number of factors. crude falling below 50 bucks, fresh 5 1/2 year low, the euro sinking to levels we haven't seen in nearly a decade and a number of other factors for pushing the markets lower. sure was a different cry in 2014. a great year for the markets and better for joe terranova our official winner of our playbook playoffs. he came in first place, made ten trades ended up with a gain of
more than 24%. congratulations. >> thank you. appreciate that. >> spoke to different strategies, some made no trades at all. >> yes. >> you made a number of trades and held one stock for the entire year. apple wasn't your top performer, palo alto your profitable trade. speaks to the strategy can you employed. >> >> this what is my chosen profession is to be an active trader. whether it's marty or mark who caught me, my focus and strategy was simple never lose a lot of money on one position. look at my losing positions, i would certainly be very confident that they're smaller in terms of their losses versus others that participated. >> i love how interesting it is that, you know, it does speaks to the different styles of playing a market whether it's tactical trading, versus investing picking stocks and riding them throughout the year
or taking opportunities to get in, get out and ride the winners and bail on the losers? >> i think that's a struggle for investors at home, this dbinary call passive or active. there's a hybrid, something in between. i don't want you to take the quartly statements stick them in the drawer and forget about them. i want you to be involved, talk to your financial adviser and change your behavior. >> give me a comment from somebody on how your view of joe's portfolio worked out and the strategy employed, how it maybe differs or meshes with the way you play the markets in your own right? >> i think the genius there was he was cutting his losses as quickly as he was. again, i've heard joe say it many times and mark fisher say it a lot as well and that is, you never ask how much can i make. you ask how much can i lose. and if you do that, to joe's point when he saw a trade that wasn't working out he cut it and moved on to another trade. so that's when people talk about
dry powder, that's what you're doing. keeping your powder dry, because you're not just going to let the stuff get soaking wet so you can't do anything with it. so joe, that's one of the reasons i think you outperformed this year. you made veries niy ies -- very picks but cutting the losses that kept you in the lead as long as you were. >> were you surprised at any of the stocks how they performed? you owned a couple of stocks multiple times. >> yes. >> not like you picked them and rode them. bought them, sold them, bought them back when you sensed there was an opportunity. eog is one and palo alto which ended up being the most profitable owned it twice. >> that's an important strategy to understand talking about and being active versus passive. i listened to jim cramer, stephanie, many others. palo alto, beginning of the year i believed in. they had a bump in terms of their first quarter report, i stepped aside when the earnings got better, i had the confidence to go back in and buy high and sell higher. >> you will make a donation to a
nice charty. >> we talked about making a donation to the winner of the charty of choice. great year in 2014. i'm blessed. i'm going to turn around and fortunate to meet dr. jonathan simons who works with michael millken, faster cures.org. i will be making a donation to celebrate the great year i and my family had, anyone out there willing to do so i urge you. brilliant physician, scientist. >> a great thing you're doing. make that an annual thing around here. >> let's do it. >> joe terranova, taking this cup home. kate kelly has breaking news back at the news desk. >> thanks so much. an update on the shooting death of hedge fund manager tom gilbert. according to wnbc our colleagues and sources have, the police consider the son of the slain man tom gilbert jr. to be a suspect in his death. criminal charges are expected to be filed later today.
the gun belonged to the son, according to wnyc and police believe he brought it to the apartment. they're tracking how he obtained the weapon. in terms of a motive or possible motive our colleagues have learned tom gilbert jr. was having financial problems among other things. very sad developing story on this death yesterday in mid-town manhattan. the son brought in for questioning overnight and was thought to be a possible suspect. sounds like we're hearing confirmation of that. more details today. >> we'll get them from you. thanks so much. >> thank you. >> kate kelly with the latest. stocks at session lows. coming up after the break after joe's trader of the year win, we turn to another trader, stephanie link who's fine tuning her strategy for 2015. she's going to reveal the unconventional picks in her portfolio. the competition is already under way so far. stephanie, joe and jim are duking it out for the lead. stocks off to a rough start. mare our traders are off to a rough start. thank goodness there's plenty of
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a sea of red for stocks since 2008. the s&p 500 down more than 1.5% right now. see the worst performing sector is telecom. energy is a big story. with oil below 50 bucks for the first time in a long time. 5 1/2 year low for crude oil as we follow this sell-off to start the year on wall street. one of the big stories for investors this year, besides the overall markets how media companies continue to adapt to a changing and in some cases more challenging landscape. from netflix to twitter to facebook and beyond the entire industry is positioning for the future and our next guest is helping them navigate their way. david westin is the former president of abc news and runs witherby which invests in media. happy new year. >> great to be here. happy new year to you. >> what do you think the biggest
trend we're going to be talking about several months from now is going to be in the medias business this year? >> in my part of the media which comes out of it television is going to be streaming. over the top. and it's inevitable it's coming and going to be big. how fast does it come and how quickly do the traditional companies who are in the media business adapt to it. >> you think these traditional large companies should be more fearful of a netflix or should a netflix be more fearful of competitors in its own realm taking it on. >> it depends on the company. going back to my old shop, espn, i think has done really well at this. and i don't think espn is particularly fearful. i think they're smart and cautious but movz aggressive ly. other companies may be sanquine and in for a bumpy ride. >> do you think we're going to see big deals. murdoch made a play for time warner, they said no, thank you, couple big deals on the table for regulators to assess. >> i cannot predict what deals
will come but it does strike me in the cable programming area, for years, the '90s, that business was growing for the cable programmers. because they were adding more subscribers and they were charging more. and those days are largely over, i think. for all sorts of reasons. so you're not going to go to your top line and that leads to consolidation as a practical matter in any business. >> if espn did stand-alone like hbo go and some other of the networks, if espn said here's the cost, you can have this on your -- on the web however you want it, iphone, ipad, et cetera how many people would unplug? would say this is all i watch so good-bye and just pull the plug? >> it's interesting to me, if you looked at the last nba deal where the prices went up so much there was a piece that espn took to go directly to consumers if you noticed. some of the games. i think -- i don't know this, i didn't talk to them, but i would surmise knowing the people that run the place this is their looking at how can we put some money on the table in that area
and still preserve what we have. which by the way is what bob iger has done largely with disney. let's not suts down the new. keep the old and experiment with the new. i think it will be gradual. >> forgive me for interrupting. we have breaking news from our julia boorstin out on the west coast. >> thanks so much. that's right. dish's sling tv is announcing an over-the-top streaming video service for $20 a month, the key thing here is that it will include live television, specifically espn. so there will be a package of content of about 10 channels including espn, espn 2, tnt, tbs, food network, live television as well as some on demand. the key thing talking about content over the top, $20 a month for a live sports, which has been one of the most important factors, keeping people subscribing to their cable tv bundles. to be able to get espn outside the traditional cable tv bundle is quite a big deal. this news coming from dish.
they say they're going to be announcing more content partnerships down the line. right now it's $20 a month for the core bundle of this handful of channels and then also pay an additional $5 a month for a kid's -- for kid's content and additional $5 a month for more news content and that they're planning to launch more sports content for another $5 a month coming up in coming weeks. they also say they plan to launch more channels and more varieties of packages down the line. the deal here scott as we look to the future of streaming video and the role dish wants to play in changing the way people address that bundle. >> thanks. timely for this conversation, right. >> you couldn't make it any better. i feel like i'm on newsroom or something. >> that shows you how many people are trying to do what you're talking about. >> surmising about espn. just having watched john skipper who runs it, but also bob iger who runs disney they've been sophisticated throughout. bob years ago said you never want to get between the consumer and what technology makes
possible. he's been very savvy in figuring out how to move into that space without giving up the core businesses they have which is profitable. >> you have a quick thought on twitter and facebook and how that landscape is shaping up and how people view twitter's role in this changing universe? >> i have a reaction, a thought about twitter from my own personal experience, i use twitter regularly because it's breaking news and a way to keep up with what's happening as it's happening which is useful. facebook has become a much more forceful presence in the news space. a lot of people are getting their news by their friends referring linkses to facebook. the thing about twitter for me, i haven't understood why they haven't to the best of my knowledge moved into the newsroom. they could be an ap, they could be a reuters essentially if they packaged it well and had a way of vetting what was coming across in the tweets so you would get immediate fuse and breaking news. >> good to see you. >> thanks very much. happy new year. >> thanks a lot. >> david westin. we have a dow jones industrial average right now that is down
nearly 300 points. we're at session lows. dominic chu, you want to take us through it from the market flash desk. >> absolutely. one of the things that's dragging things down for the dow is caterpillar shares, one of the laggards on the dow today the stock moving lower after jpmorgan analysts downgraded the stock from an underweight to neutral weight on its direct gas business and the mining business. u.s. construction and emerging markets play into that thesis as well, all under pressure as a result of the lower oil prices. those shares you can see down by 5% in trading today. not just the energy side but agains the ripple effect coming out of the industrial sector as well. back to you. >> thanks so much. again, perspective, went through this last year, probably felt many of the same ways we're feeling now as we're watching the major averages decline in the manner they are to start off this year. not changing anybody's overall dynamic on where we think the market could end up several
months from now or is this different? >> i think there's salient points where maybe we got carried away with this idea that u.s. is the best house in the bad neighborhood just buy u.s. stocks you'll be fine. then you start to think about the second level thinking where you say to yourself, wait a minute, how badly does this ever increasing dollar wreck the economy overseas and what might the hit to earnings be sector stock, you name it. think about a cat ter pilar, number one, you have declining revenues in these markets it's great, it's a u.s. stock, it's a ton of exposure, and probably not the same risks people were worried about with caterpillar and those intensify the longer the crude sell-off goes on and foreign currency sell-off and taking in foreign revenue in a foreign currency selling at a discount and gap continues to widen. important thing to think about. >> let's do it. the way we talk about this captain america thing, america
being the best place as josh said. >> i see it first of all, being able to look towards the end of the year and getting an understanding of where the s&p is going to be is challenging. almost impossible to do. i see the good things stephanie talked about at the beginning of the show. they resurrect themselves and act for the market. as i see it now i think we borrowed at the end of last year a lot of the gains from the beginning of this year and the market is going to be incredibly challenged until the catalyst you talk about which i believe in they prove themselves. >> you have people like jeffrey donelapp thinking we're going to challenge some of the historic lows on the ten-year, that gdp is going to be far more disappointing than many are expecting and thus it's going to be a difficult year for investors who are playing this equity game. >> you're talking about then e recession being experienced in the emerging markets spreading. you're talking about a
significant slowdown in the chinese economy and that then impacting a lot of treasury buying here in the u.s. i think that's the equation. >> this debate of which story is the one to believe in? the falling rates. >> you could believe in -- >> falling oil getting it right. >> believe in both, but you can believe in both stories happening concurrently and then ask yourself, which one is more powerful. so is the return of the u.s. consumer and by the way, wage increases started to happen, the dollar strength, drop in gas prices does that overpower weakness in emerging markets. >> and also low interest rates very powerful. >> continued low interest rates. >> that's powerful along with what you said about lower oil prices. >> unless it portends something that's going to come. >> if it is demand more than the oil we've talked about oil prices, is it more demand or supply, i think it's a combination of both. these other factors that are happening now, it's very positive for the consumer which is 70% of the economy. >> the simplest thing don't give
up holdings in municipal bonds which everyone was telling you to do. make sure you hold on to them. >> we will follow the big sell-off on wall street plus from starbucks to under armor, some consumer names taking a big hit today. a number of downgrades to a number of well-known and widely held stocks. find out if the traders agree with those calls. a new year means new opportunities. stephanie link is taking the bull by the horns in this year's competition for trader of the year heading to the hot seat and going to reveal her portfolio next. our back. your friends have your back. your dog's definitely got your back. but who's got your back when you need legal help? we do. we're legalzoom, and over the last 10 years, we've helped millions of people protect their families and run their businesses. we have the right people on-hand to answer your questions, backed by a trusted network of attorneys. so visit us today for legal help you can count on.
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there's the continued picture of a nasty sell-off on wall street. stocks are at session lows. a look at the dow down 300, s&p down 35 and nasdaq down 60. losses of more than 1.5% for the dow and s&p. the s&p looking at its first four-day drop in 264 trading days, longest streak in 87 years. time for today's calls of the day and there are plenty. first of ford downgraded to neutral at citi citing valuation concerns. this is one we're getting auto
sales across the board. >> but they were only up 1% at ford and they get a downgrade. so when everybody else is posting even general motors, what was it, 19% -- >> up to 19%, yeah. >> when you compare those two and hoping that you actually get a real positive out of ford and you don't, that's why a lot of folks are basically hitting the exits along with the market. >> starbucks downgraded to neutral at janney, on growth concerns. >> well i don't agree with that but i agree with taking profits because the stock up 15% from the third quarter report which disappointed and stock fell to the 70s. we were buying the stock then and trimmed some last week because it's had a nice move. i still like this very much long term. i still believe they're a double digit grower for the next several years. >> josh, tiffany downgraded at key bank. >> i get the rationale, talking about the overs seas concerns and they're saying the dollar might have an impact on earnings. that's possible. but the reality is, this stock is in a two-year uptrend, still
looks fantastic. i would tend to stay long the name, so long as it remains in that trend and i wouldn't do a knee-jerk sell based on this key bank report. >> downgrade for under armour as well to hold. all these calls to hold. >> with a 75 price target. stock trading at 65. i wouldn't panic too much. all of the names, gm, starbucks, tiffany, under armour supposed to do well in an environment when falling oil prices. in three of these names, gm, starbucks under armour you will get them on sale, if things it turn around and earnings support it, names you want to buy. >> mkm upgrades intel. talk about that one. another big performer this year? >> i still like tech, broadcom more than intel because of of the communication side of their business is killing it. at ces this week it will be about the chips not coming now, but the ones a year from now, two years from now that people
are building basically adopting some of these measures to use that power going forward. broadcom over intel but like intel. >> $10 upside on their price target where the stock is trading, they're looking for 45 for intel. let me hit one more, citi downgrading chevron. downgrading chevron. you do not own -- >> we did a while ago. >> you guys still own royal dutch shell? >> yeah. i still think if you're going to play in this space and in volatility at least you can fall back on a restructuring story, certainly has not helped the stock price but at least in the meantime i get a nice yield over 5% which is attractive and the balance sheet is improving. chevron i've never understood why it got so high as it did because i don't have the growth to support it. i kind of agree with that call. >> give me one more. i lied. give me lulu, blair upgrades lulu. bright spot in a down market. they upgrade lulu put a $70
price target on the stock. >> i saw a bunch of those shopping bags in a lot of different locations over the last couple weeks. everywhere from new jersey to florida, to new york to long island. i would not -- >> lot of analysts have saids the turnaround is going to take place here. >> stef was right. i was very, very skeptical. i think stef was right. this brand is coming back. >> all right. meg has a look for us of another name in the green. i guess there aren't many, mek meg, notable ones bus butt you found one. >> news on gilead. last month the stock took a hit after a pharmacy benefits manager at expression scripps was going to exclude gilead's drugs from its largest plans in favor of a competitor from abby. all the speculation over what pharmacy managers would do. we have an answer from cvs caremark saying it will cover gilead's hepatitis c drug, sew
valedy and har voeny on major plans. it took into consideration treatment duration, cost effectiveness, all the kinds it treats but this is causing a rebound for gilead up about 2.6%, causing abvi to fall 2.2% and bringing up the entire biotech index a little bit with the gilead news. so much speculation about pricing pressure and all these different competition going on between companies. good news from gilead today. back to you. >> thank you so much. coming up, we continue to trade this big sell-off on the street and we will do that when we come back. "the halftime report" with scott wapner is the place for market moving interviews. >> when you see large currency moves and price moves in a commodity like oil you have to be worried.
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since 2008 and remember what kind of year that was. a big triple digits loss on the dow. ticking time bomb for stocks, a big signal. the one chart that every investor needs to see. plus, fears about europe's debt crisis coming back to haunt investors yet again, but is now actually the time to put some money to work in europe? and new developments in the shooting death of a hedge fund manager in his manhattan apartment. we'll have the latest on that. scott back to you and the team, happy few year. >> same to you. thanks so much. not so much for investors as tyler noted a big down day on wall street. once to show you some of the culprits according to what's dragging down the dow. goldman is the biggest drag. might not realize that. goldman the biggest drag, more than 47 points to the downside followed by visa and chevron and then caterpillar. >> these are the high priced stocks. it's noticeable the weakness in the ten-year. you have the financials acting worse than the rest of the components in the tings.
the pharmas in the index are holding up well, the sector holding up well. >> i keep hearing financials, that's the place to be are they the place to be if rates stay low? >> no, i don't think they are the place to be. >> almost. >> i don't think the pure banks are the place to be if rates stay low unless the economy really takes off and loan growth can you have seat the net interest margin pressure. they will see it and that will be a problem. i think there are places in financials you can buy. the credit card companies are across the board all of them are buys, especially with them down this much if you think the consumer like i do is going to stay strong and companies have been investing aggressivery in 2013 and 2014 and should see positive operating leverage in 2015. >> is this the week to invest in europe? >> it's the week to invest in general, judge, because i mean i'm sure we all wish, especially me since i'm losing right now, wish we could start the clock at the end of this week, but i talked about it last week. not that i had this crystal ball but at the people that held
those gains too long into year end to try to avoid the tax and the implications of that tax that are due then this april, they wait an extra week just to kick it off until 2016, right. for all those people that did that, take a look at the blood letting today. in goldman sachs, in apple. many of these stocks, goldman and apple down worse than the market here today. why is that? because they were up big this last year. those are the stocks, the heavy cap stocks, that people are piling out of right now. is it overdone? of course it is but it happens every year. the big winners hold them too long, it rolls over into the next year, you can buy them cheaper at the end of this week. >> part of my point, people say europe is the place to be, where the real value is. >> b.s. >> oh -- >> if you believe -- >> what's your time frame, 15 minutes. >> if you believe in europe you have to believe the turnaround is going to occur in germany. that's the story. is germany going to turn around. if germany is able to turn itself around, stabilize as the united kingdom was able to stabilize what was going on last
year in europe. back to the financials for is a second, when financials bottom the first place you want to look and see the turn will be in the regional banks. and potentially see a deal there as well. >> it tell me why europe is the place to be? >> well -- >> if you think the value is there. >> i do think the value is there. trading at 1.5 times -- >> today and the euro goes down, what draghi wants to have happen and you know he's going to act at some point why not invest in europe? >> i think you can. i don't think you want to be all in. i would own u.s. companies out of exposure in europe but also to china and also to india, to japan. international is a place to put some of your moneys this year because the valuation proposition is attractive. but also because those central bankers are flooding the zone in terms of monetary policy. we're getting more restrictive. they're getting more accommodative. see what draghi does. >> and fully open the spigot again. >> let's see what happens with draghi. i think there is value there and so that's why i do think you can
have some exposure. >> the data suggests s that if you're waiting for a full recovery on something like gdp or whatever measure you want to use before you get involved in any stop market, u.s. >> is germany going to turn around just as united king democrat was. bank to the financials for a second. when financials bottom, the first place you want to look will be in the regional banks. and potentially you'll see a deal there, as well. >> tell me why europe is the place to be. if you think the value is there
and the euro goes down, what draghi really wants to have happen, yp iwhy not invest in europe. >> you can. i don't think you want to be all in. i'd own u.s. companies with exposure in europe. i think internation [container door closing] what makes it an nx is what you can get out of it. ♪ introducing the first-ever lexus nx turbo and hybrid. once you go beyond utility, there's no going back. so ally bank really has no hidden fethat's right. accounts? it's just that i'm worried about you know "hidden things..." ok, why's that? no hidden fees, from the bank where no branches equals great rates. i take prilosec otc each morning for my frequent heartburn. because it gives me... zero heartburn! prilosec otc. the number 1 doctor-recommended frequent heartburn medicine for 9 straight years. one pill each morning. 24 hours. zero heartburn.
checking in on the market once again. worst beginning to a year since 2008. there is the s&p at the lows of the day. 1.75%. i wonder as we talk strategy, regardless of where you think the market is going to be, utilities led the way this year and what was a good year for stocks. what is a traditionally defensive area of the market, but offers yield and that's why in the search for yield world that we're living in, people
went there. >> and they love them again. 2.08 or depending on what jeffrey begun lack, talking with if crude oil falls to 40, could you see a 138 handle on the ten year. i don't necessarily disagree. >> rick santelli, what to you make of what we're seeing. >> it's fascinating water cooler talk. but i will tell you this, if you're trading interest rate, just look up, see the dow, see the s&p and if they're going down, it's pretty much like
january of 2014. what is the only hedge, where is the only place to hide if equities look i have if i temperature treasury. if you look at one and two day, you can see it's going down big temperature treasury. if you look at one and two day, you can see it's going down big. but it's not only the equity markets. the dax didn't look too good, cac didn't look too good and dynamics of the fundamental side of the european economy will be the gift for 2015 that keeps on giving. >> maybe buy grin backeenbacks. >> i wouldn't be adverse to that, but yi don't see the yen debate anytime soon. so definitely not going to hurt the dollar at all and technically, judge, dollar got room. it's an open highway. >> people being tthink the euro room, too. thanks for scrambling to the
camera. appreciate it. rick santelli at the cme. again, talking strategy, where you want to be in '15. >> the thing that taps out to me, and i certainly would be looking at over the coming week, it seems as though this deflationary world and environment is back again. in that environment, you look at an asset and say does it have the ability to retain its pricing power. if it does, that's something that should interest you you you when there are so many different assets losing their pricing power. >> health care, yield, you utilities. >> health care retain s pricing power. mckesson is a name i held on to. >> does feel like it did in january of last year. remember the s&p did not have a four day losing streak at all in 2014. it's working on its first one in more than a year today. certainly looking unless there is some sort of huge reversal that will be just that.
we're a force of nature, too. ♪ hello, everybody. happy new year. i'm tyler mathison. for many, is this like me the first day back from vacation and the bears have stormed out of hibernation. right now there you see the dow down nearly 2% at 17.523. s&p 500 hanging on above 2,000. nasdaq down 1.3% and the russell also off broke 1%. dominic chu rti