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tv   Fast Money Halftime Report  CNBC  March 18, 2015 12:00pm-1:01pm EDT

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productivity and how much it's going to cost companies and you don't care. >> come on. i mean it's -- it's normalized year over year. once you annualize it we're just as productive. >> least productive day the kay after the super bowl. >> also true. >> productivity today as we await the fed. let's get to wapner and the half. ♪ >> the final countdown indeed. let's meet our starting lineup, stephen weiss the managing partner of short hills capital, jon and pete najarian are the co-founders of optionmonster, michael block is chief strategist at rhino trading partners, paul richards head of fx at ubs and joe davis head of ininvestment strategy at vanguard. apple and the dow. as america's most loved stock enters the index after the close, will it fall victim to the curse of the dow or buck that trend. losing the lockup with alibaba
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insiders finally tree freeh to sell, now the time to buy or beware. a stock that seems to have lost its luster. we begin with decision day. a day investors have been waiting for, maybe dreading. the moment we may learn how much closer the fed is to raising interest rates and the markets truly ready? stocks lower ahead of that. rates move to the downside. it's a simple question, are we ready for the fed to raise rates? >> i think we are. the market seems to have given yellen a free pass. >> we you or we the market? >> i'm always ready. we the market is ready and i'll tell you why. as far as the markets are concerned patience comes out. having said that i'm not sure it does, inflation front and center, even though wage growth isn't there, inflation is going lower, deflation. so i think if they do come out and remove the word and, you know, go ahead with the telling
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us what the schedule is for raising rates a knee-jerk reaction down, nervousness in the market today and yesterday but still off to the races because the spread, the equity risk premium, between bonds and equities equity risk premium applies purely so high that means that markses will go up. >> paul richards i was surprised to read your notes rate hikes are coming in june, you say rate hikes are coming in october. and you say rate hikes may come in december as well. you think we could have three this year? >> absolutely. but that's good news, scott. first of all she's going to go today. patience will get taken out. she is the master at appeasing markets and gets to speak after the message and that's key. a lot of commentators on the street think they will go at every meeting for two years. i'm not in that camp. i think they'll go when economic conditions justify it. kick it off in june, they always avoid the meeting after labor day, go in october and optionalty on december.
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two, maybe three, the markets really and she'll message it. >> doc, the markets ready or no, not not folks got up and saw the cover of the ft where they talk about ray warning of a big mistake, 1930 style mistake that caused the market to take a big hit. it caused what some have called a recession inside a depression. here's what ray said throw up the quote and discuss it. to be clear we don't know nor does the fed know exactly how much tightening will knock over the apple cart. what we do hope the fed knows which we don't know, is exactly how it will fix it if it knocks it over. fair point, doc? >> it's a very fair point. >> ray dal yo warning of a major market issue if the fed starts to raise rates too early. >> and all they're going to do today judge is exactly what they have told hillsenrat at "the wall street journal" remove a word. they didn't say whether or not they would replace that word. that's one of the things i'm
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looking for for them to pull open the they saurus and say, something to the equivalent of, patience going forward. and they may address pace as far as the speed at which they will move. so paul richards -- >> don't you think -- >> gutsy call -- >> come up with any sin na them they want. take the word patience out. >> it will be out. >> and the market will have a problem. >> the market may or may not have a problem but again, we're talking june at the earliest, judge, if no other in puts are there -- >> three months from now. >> still, that's three months from now for guys that trade daily that's forever. >> if you had to guess what percentage of people have come on the show or on cnbc and said the word patience is coming out? >> i mean more lately but i don't know, mine -- >> seems like 90%, maybe 80% if you want to be conservative. to me that means it's priced in already. >> i don't think it's priced in. people think it's coming out because they say they want to say it's coming out. >> usual knee-jerk reaction and people realize you have central
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bankers around the world easing and all it means is put more money in europe where they're beginning. >> is ray right or wrong? >> i'm in the ray dal yo camp and put jeff begun lock in the conversation. before he talked about 1937 jeff gave a presentation where he warned the fed saying the market can't handle it and used the example and i've been using the ecb back in 2011, raising rates. look what happened after that. spain almost left the eu. we think it's unthinkable and now we're laughing like it was funny but that almost happened and he's warning that there's a parallel there. so both what dal yo is saying and gun lock are saying makes sense. i agree with steve and you, 90% are like patience is going to the point it doesn't matter. what does matter is what message does yellen send if they raise and markets don't like it. we could get into the spiral, we have could have a problem here. i think data dependence is bunk. it doesn't exist anymore. it's about asset price and
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volatility dependpens and with that i don't think -- i think if they remove patience they will put a sin na numb in there and i don't think they're ready and i don't think they're ready to do it this year. >> steve liesman you're in d.c. going to be asking chair yellen questions later today. does they shake out patience because we wants to gauge how the market is going to react to the removal of a word without an increase in an interest rate? >> i would think she's not making policy as a natural experiment, scott. i think the word patience comes out to provide the federal reserve flexibility to raise rates. a sense given where the economy is, where unemployment is, and this is the important thing, given where they think inflation is going to go, that zero interest rates may not be appropriate to the current environment. the word patience comes out to provide the fed flexibility. doesn't tell you that they're going to raise rates tomorrow or even in june or doesn't tell you
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about september. the next question is the question about chair yellen, what do you need to see to have confidence that inflation is moving back to your 2% target. that's key. and i just want to say this, talk about 1937 is really interesting. it is exactly what monetary policy expert talks about. it's one of four instances where fed central banks have made mistakes in the middle of recessions or deep depressions, sweden and japan also come to mind when they came off the zero lower balance too early, and europe is another one and went scurrying back. >> why are we having the conversation about the fed raising rates this year? if they're students of history look, on this network for as long as i can remember has been talking about the possibility of a 30 style mistake. ray dal yo gets something in the front page of the ft, we're all wondering whether the markets can withstand this. the economic data in february was squirrely at best. we're wondering whether the
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economy is getting better or if it's getting worse. why would they raise rates? as steve weiss says inflation is nowhere to be seen? >> well, just because they had it wrong four times in the past doesn't mean they'll get it wrong again, scott. there has to be a time to come off the zero. i don't know if this is that moment. what i do know is the fed would like the if flexibility to consider such a move and removing patience and the real thing we're talking about is not the removal of patience and not a quarter point. let's get off of that. this is not a trivial discussion. the discussion we're having is once that happens, in the nan no second after the removal what does the market price in down the road, what future does it bring forward to the present? how much does it price in in the words of rates, how much does the stock market price in? that's the discussion we're having. we're not having a discussion over eight letter word or a 12-point scrabble word as brian sullivan points out.
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a discussion about the future path of interest rates an its potential effect on the economy, p you had it right yesterday. it's a historic moment. >> yeah, look, paul richards with us, now, thinks june, october and maybe even december. and that's what the market is going to have to start getting its arms around once the word patience is removed and whatever else words are in there and how the market wants to react. joe davis, how are you playing it of all the assets under management at van guard, how do you see this? >> i think we'll see a statement that's fairly dovish and i think steve and others on the show really, you know, comment on it very well. i think what i'm looking for is the mention around the pace. i still think it's possible they move in something like [ inaudible ] but that's out of c consens consensus. i think they want to move in a reserved pace and signal that pace going forward. >> how are you playing the market? you've been bullish. >> yep. >> are you a buyer on these days where you've had turbulence.
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>> yes. yes, i think those have been opportunities. if the reaction is just because she removes the word patient out of what the text is and they go to flexible or any other thing, i think the one part i do agree with paul richards is, i think that part absolutely examines out. i think some time this year we do get a raise. i don't and i disagree with paul on one side of it, love him to death, i don't see that pace being three raises this year. i think that seems to be something that's a little bit faster than i would accept and i don't know that the market is ready for that. i think the market will be ready and they're going to be determining are we ready each and every time they meet for a rate hike and obviously that's going to be very data dependent. >> paul? >> you know, you get a lot of good guys here with a lot of really good views. the critical thing here is everybody makes a good point and highlights one thing. today is a very big day. this is a day where prospectively we'll see five years of work come to an end and prospectively normalization of monetary policy.
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that's a big day, scott. around 2:00. >> can i pick up on that some. >> yeah. >> what paul was saying. what's important, i think when paul talks about five years coming out, the fed has given something of a guarantee or a promise before and that's what patience and considerable time represented. using a tool in the toolbox which they call forward guidance, and i think that the history of today is that forward guidance comes out the tool no longer in play and data dependent which is kind of like the old days if you remember, scott, before you were shaving, right? >> and steve, that's what fisher has been saying recently as well. i agree with you. >> so -- >> right. >> and by the way, i mean you did have the fed president on the air saying rip the band-aid off. you will have to take it off at some point, why not just rip it off. joe davis before i let you run, $3 trillion of assets at vanguard where do you want to be positioned no matter what happens today at 2:00 p.m.? >> you certainly want to stay invested.
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look through the short-term volatility we're seeing very strong cash flows across multiple asset classes and i think investors are being rewarded. stay invested in this market. ultimately a positive if we see rate rises this year. >> thanks for joining us. steve thanks for hustling up. paul see you later. i know thanks as all for joining us. ben, can't wait, 2:00 p.m. when it's going down. >> can i debunk the 1937 analogy? >> yeah. >> 1937 we were coming off a deep, deep recession. a lot of it was driven by that growth from there, was driven by the government spending by roosevelt, by wpa. right afterwards wages drop by 35%, you had the economy rip -- just ripping down. that's because the government stopped spending. the government has not been supporting this other than through easing. corporations are just more flush than they've ever been and they've been driving the economy not the governmentses. >> someone says to me on the e-mail who cares if the stock market goes down, the stock market and the fomc's
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congressional mandate no may not be but in mr. and mrs. america mandate. the it fed is going to be cognizant of the fact if the stock market has a major issue depending on what it does. we could continue this conversation. they'll continue it at 2:00 p.m. eastern this afternoon when the decision and then the news conference comes down. coming up, joe terranova dropping an airline stock from his portfolio. wow. he just got into it. will it help him move out of third place in our competition. what are you laughing at? >> i know. >> i'm jealous these guys are trading all around me. >> pot calling the kettle. >> old school games going high tech. and herd alert. the traders and you are on the same side of the stock. is it a safe play to run with or should you go your own way? it's coming up on the half. ♪ you can go
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sometimes romantic. there were tears in my eyes. and tears in my eyes. and so many little things that we learned were really the biggest things. through it all, we saved and had a retirement plan. and someone who listened and helped us along the way. because we always knew that someday the future would be the present. every someday needs a plan. talk with us about your retirement today.
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let's check the leader board in our halftime portfolio competition. lebenthal holding the top spot up 9%. dr. j nice turnaround this year. >> thank you. >> but up 5% after being down in the dumps where your brother is right now. >> i'm getting the boot. joe terranova is up 4.5%. brown link positive and joe, by the way, who just got into
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virgin america, he sold out. i think that stock got downgraded today. he only has two stocks in his portfolio right now. valero and pioneer. >> and used all 52 trades already. >> yeah. just kidding. i kid because i love . >> making a trade? >> this week. >> could be today after the fed. >> i know. i feel you on me, man. when this turns i tell you scott will be riding along for this thing. it will be great. >> i knew it all along. holding on and they came through. >> yeah. >> you're not in the competition to sit on your hands right? >> you're right. you're right. >> let's hit our trader blitz four on four stocks making news. first up fedex, it's down after reporting weak full year guidance. mixed report. >> they blew out the number as far as the bottom line number and the weak guidance turned
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things around. stock traded to 180 in the premarket crashed down through 172. now 171 and change. so big reversal in fedex today. a lot of people took the profit and ran. >> herbal life, stock we've never spoken about. >> yeah. what do they do? up 11% based through the judge in california dismissed a suit. i don't think it should be up 11%. the suit was poor reason for going after them saying ackman's presentation created fraud by the company because they didn't disclose it. i don't think that goes to the heart of the matter. i think the suit will still be alive maybe not in california but bring it again. >> am ex in your portfolio. >> i like this. we've had a couple guests talk about how they like this company down here. it's been sold off. a lot of that due to that whole thing, getting pulled away from costco but now getting themselves in this loyalty program. i don't know that this is a huge story but it's one more way that am ex is trying it to make up for the loss in terms of cost co.
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i think the stock has room to the upside. >> oracle, michael block. >> these guys are killers wipe out competition looking good here. the wildcard here is everyone talks about enterprise spending in europe. china hurdles to get over. my money on these guys to get over them and do well there. >> all right. little more than an hour and a half away now from the fed and check out the most used words from the last fed statement in january. no surprise here. inflation making a big appearance what about the buzzword patient. is the market ready for a rate hike. plus, we go under the radar. nintendo making a move you might haves missed. it is shaking up the stock. and we count down to the european close as well. equities across the pond mixed today ahead of the fed's decision and its statement and news conference we're back after this. sometimes romantic. there were tears in my eyes.
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and tears in my eyes. and so many little things that we learned were really the biggest things. through it all, we saved and had a retirement plan. and someone who listened and helped us along the way. because we always knew that someday the future would be the present. every someday needs a plan. talk with us about your retirement today. ♪ ♪ (under loud music) this is t♪ ♪lace. their beard salve is made from ♪ ♪ sustainable tea tree oil and kale...
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talk about what the 10-year is doing as well today. yields moving lower, 202 the last i saw bertha coombs at the nymex with more on that. and they've been moving lower, leading up to this day.
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>> yeah. you wonder whether it's the market rather than the fed that's really getting impatient here. will they drop the word patient from the statement this afternoon. we won't know for more than an hour but jeff and scott, so jeff how do you play this here today? >> i think dropping the word see mantics we are seeing yields go lower that has a lot to do with the fed policy. 4 trillion worth of purchases. that induced the s&p 500 companies to buy 2 trillion of their own paper back in the six-year bull market. yields are going lower out of default because there's torque in the system. the torque comes out investors will find the treasuries as a safe haven. >> scott, does this mean i get another bite at the apple in terms of refinancing? are we going to drop below 2? >> we probably will if they leave the word in. patient stays in that means they're not going to raise until september. if it comes out and replace it with a word like flexible this is probably as good as it's
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going to get. no matter what, remember, when they start raising rates that's not the finish line. they're just getting to the starting blocks. >> all right. we're going to leave it there. of course if you want more as always, head to futures we're always on and have new stuff to see. back to you. >> bertha, thanks so much. under the radar three things traders are watching you might have missed today. michael you are up first. >> i'm looking at the hedge japan etf here. everyone talking about the ecb and how they're in easing mode. don't count out the boj. they're it far away from the infligs objective and they will keep going if china keeps making easing noises this should work well. in japan fanook responding to activists, big trend by some smart guys. >> doc? >> nintendo, judge. just take a look at this and super mario. they didn't just make some half you know what mobile system, they worked with one of the big
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powerhouses in mobile this dena company out of japan. that's why the stock is reacting like it did. if you just took mario and put it on a mobile the kids could play it on the phone i don't think it would get nearly the push it's getting now. >> pete, unusual activity and it's sap. >> right. >> on a day we're talking about oracle. >> and we've talked how many times weeks in a row about germany and the strength in europe. look at sap over the last week, stocks has gone from $67 a share, pushed over $70 a share today and they were also buying the april 70 calls, about 5400 traded. now they're over 7,000 of those being bought around that 1.65 range. somebody thinks this stock after bouncing off the 50 day moving average is ready to go higher. >> all right. european stocks are mixed ahead of the fed's decision today. that market is few minutes away from closing. we will bring you the numbers across the pond next. plus, the three biggest headwinds facing the oil market. oil is also on the move big time today. we talk to one expert trader who
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says crude could see a three handle in the very near future. don't forget to visit us for the trades and analysis from our team. we'll be right back. ♪
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show you the markets an hour and a half before we get the fed decision about the lows of the day. dow down 11 points all of the major averages to the downside. staples in discretionary sectors leading us lower today. european markets about to close. let's go to simon hobbs at the new york stock exchange for a look at today's action. simon, no doubt the attention being paid in europe, is at sharp as it's being paid here to what the if fed says today. >> absolutely. last chance to square up in europe before the fed and if you look at the top right of our map, stocks in sweden surging as its bank cut rates again deeper into negative territory at an unscheduled meeting promising more qe after mistakenly raising local rates in 2011. as lesson perhaps for everybody. greek banks under pressure,
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scott, as analysts warn that risk of an accident in the standoff with the rest of europe is growing. prime minister tsi pras is pushing for a vote for free electricity and food for broke greek households in parliament. refusing to update creditors on a conference calls yesterday. the german prime minister is warning athens time is running out to do a deal to unlock more cash in order to pay the bills that it has for the rest of europe ahead of tomorrow's big eu leader summit. in the meantime bmw leading auto stocks lower on conservative guidance and perhaps a realization that currency hedges mean that it and others could be slower to capitalize on that lower euro. back to you. >> all right. thank you so much. now over to sue herera who has our cnbc headlines. >> hi, scott. here's what's happening at this hour. tunisia dealing with one of the worst militant assaults ever in that country. officials now saying that gunmen have killed 19 people, 17 of them tourists at a major museum
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that occurred earlier today. tunisian security forces raided the museum and killed two of the militants. authorities say that real estate heir robert durst on a suicide watch. they reportedly found more than a quarter pound of pot and revolver in his hotel room over the weekend. he's charged with murder in the killing of a friend 15 years ago. he's also suspected but not charged in his first wife's disappearance in 1982. syracuse university says its coach jim boeheim will retire in about three years. the school's basketball program under investigation by the ncaa for academic fraud and failing to enforce the university's own drug program. syracuse director left less than two weeks ago. president obama predicting the kentucky wild cats will remain undefeated and take home the title in the ncaa tournament but his track record isn't all that good apparently because the
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president hasn't picked the right national champion since his first year in office when north carolina won in 2009. so we'll see how he does this time around. back to you. >> all right. sue, thank you so much. the president going on a limb. >> stretched it out there, the undefeated team, wow. >> who called that. >> another day, another drop for crude. our next guest has been trading oil for more than 20 years. let's welcome in mark, international fc stone codirector of energy trading. good to talk to you. >> thanks for having me. >> as we see this sort of renewed plunge in the price of crude today it's on the inventory data, you could cite any number of factors you want to, are we getting to 30 something a barrel imminently? >> i think that's pretty around the corner. we will see something with a three handle on it. this q3, q2 time frame the storage numbers picking up capacity is starting to get squeezed a little bit and numbers are growing consistently every week. it will start to meet itself a little bit by the end of q2
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where we come out of turnarounds and refineries to take the wti but in the meantime it does look like a one-way street. >> where does it end? >> where does it end? i think we get somewhere into the 30s at the outside maybe a full retrace back to the 2009 lows about 32.5 at the outside but that -- i want to temper that saying that's a spot month. we look at forward oil to still $10 higher. it's more time structure and a storage game. >> how does it end? that's when it ends. how does it end? >> great question. >> what's your timing for that? >> okay. i think q2 into q3 make our bottom more or less. going into q4, what we're seeing right now is we're seeing a lot of rig count drops every week the baker hughs numbers coming out dropping, capex budgets slashed huge the rest of the year. these aren't things to turn on and off like a light switch when the price starts to pop up. there's been a lag effect we
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haven't seen those production numbers cut although we've seen the rig counts being cut every week. i think you'll start to see those effects towards the end of the year as we come out of the turnarounds again after q2 when using more of the wti stuff and you start to increase the demand there. and we start working back into where the forward curve is right now into the $50 range. the back half of the year. also, the rest of the world, dollar based commodity. it still hasn't become that cheap in the rest of the world. the u.s. is enjoying it. the rest of the world hasn't enjoyed the same effects. the price is higher than everybody else in terms of their currency. >> once the bleeding stops, so to speak, is the patient patient up and then running again? and if so how fast or is it going to be a slow move back higher? >> i think it will be a systemic move back higher and i'm looking for a new low range if you will. my target would be around 60 to $65 going into the q1 in exyear.
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>> we could get to 60 by the end of the year. >> the december price is 52. we're not that far from it as some of this forward carry comes out of the market and we roll forward and absorb some of the excess crude now that you'll see refiners and everyone putting in storage. >> mark, what are the demand drivers we should be watching that perhaps we're not noticing? what are you looking at to see how demand will play out? >> that's interesting. i think some of the real demand is more on a global sense. just because the price of a gasoline goes down you're not necessarily going to go out and buy two suvs and drive twice as much. that will be incremental in the united states and developing counties. places like india where demand has been robust even at the higher prices this is a huge economic boom to them. steady growth in the refined products they're using, building their own refineries and more of that developing emerging markets giving you real global demand for the sustainable future.
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also, it's anticipated china will be filling up a lot of their sprs at the end of the year, that program was supposed to be early, pushed back toward the end of the year. more demand side factors probably help contribute to a higher price. >> appreciate you coming in. thank you so much. herd alert. coming up a stock that all of the traders are bullish on. so should you follow that trade or could they get trampled. counting down to the big fed decision today 2:00 eastern time. the clock is on the wall. is fed chair yellen losing patience? halftime continues after this. "the halftime report" with scott wapner is the place for market moving interviews. >> when you see large currency moves and large price moves in a commodity like oil, you have to be worried. >> real money. >> what makes things cheap is uncertainty. >> real debate. >> interest rates are going to go up, they can't drop as much as they did last year to this year. >> the most profitable hour of the trading day. >> do you think dick costolo will leave that job? >> we think there's a good
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chance he's not there within a year. >> the "halftime report," weekdays at noon eastern.
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how do longer term investors position their portfolio? we have a number of five-star money managers with their best plays from individual stocks to etfs to dividend plays. this is all leading up to the fed chair yellen's news conference at 2:30 p.m. eastern. which we will carry live for our viewers. two very big hours of power ahead. back to you on fast money halftime. >> thanks so much. we'll see you then. starbucks annual shareholder meeting is set to kick off moments from now. jane wells is live in seattle where there's a lot on the plate or in the cup today. jane? >> scott, starbucks has just announced it is rolling out a delivery service along with a new mobile ordering and pay system for its app. the app function rolled out in the pacific northwest this week will be national by the end of the year starting in seattle in the second half of this year teaming up with post mates to deliver starbucks a second option will be starting in new york around the same time called
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green apron a service to let customers order starbucks and have it delivered. this will be talked about in the meeting in the top of the hour along with the new initiative called race together shareholders were lining up before dawn, not the most diverse group, wanded by security, the ones we spoke to are fans of schultz who want to hear the idea of writing "race together" on cups to encourage dialog. >> i'm kind of mixed on that. i don't know how baristas will have time to have conversations. >> starbucks seems to promote, you know, socially progressive things and i think that's a terrific thing. >> it's a forward moving company and i think it's going to work, whatever he puts out there. >> now, critics point out that the whiteness of starbucks' board and there is 42% they say of their vps women, 16th ethnic minorities, the meeting will be starting shortly. howard schultz will answer
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questions and talk to cramer on "mad money." back to you. >> cannot wait for that. the meeting and interview with cramer. thank you so much. pete, you did own the stock. >> owned it for a long time. >> no longer. >> i don't. >> interesting what that shareholder said. it's basically been the gospel according to schultz. >> absolutely. since his return the stock has been incredible and the way that this company has been able to manage. we talked about this time and again about the idea every time we've seen coffee prices go up they've been able to raise those prices. you don't see the price of the coffee we're buying going down and because of that these margins are incredible. when you look at their growth potential they've got in terms of stores and obviously we talk about the asian markets all the time plenty of growth still in front of this company. the only reason that i'm not in the stock because the fact from a valuation perspective i would love to see a pullback. buffet talks about these. you don't want to buy them at the high. look when the pain is there. >> buy high because they're going to go higher. >> it could potentially go higher. >> what is the cause as
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everybody here is part of the so-called herd we're saying, everybody bullish on starbucks and for that matter almost everybody is bullish on starbucks. >> sounds like apple at 130 a share now pulls back and gives you an opportunity. >> you can't own every stock. while i would never bet against howard schultz because he's done a great job and i like starbucks and the brand and i think they have growth opportunities we see they're always innovating. look at it as a coffee company is a mistake. the reason i don't own it because valuation and that's been a huge mistake because the valuation is always looked expensive. >> then you could say right, to your point, pete, i would say okay, you don't have a problem with a name like under armour. >> they don't have anything close to the growth of under armour. when i look at under armour i see growth and the potential going other places than now. starbucks has penetrated the international markets still plenty of growth for them to go. under armour is just getting started. >> do not miss my buddy jim
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cramer's interview with starbucks be' ceo howard schultz tonight on "mad money" at 6:00 eastern time. coming up next, apple in, at&t out. today's the day the tech giant moves into the dow. can it overcome the curse. the apple trade on the other side of the break. the alibaba lockup expiring today. what does that mean for the stock? we are counting down to the fed. hour 15 away, 2:00 eastern, we're back after this. news alert! message! email! calendar update! most of us admit to being overwhelmed by information at work. that's why ibm created verse. it uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. it continuously learns how you work. and helps you prioritize the people and projects you need to focus on.
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all right. after the bell today, apple replacing at&t in the dow. stocks added to the the dow have underperformed the stocks removed so will apple beat that curse? weiss, you own it, pete, weiss you first. >> i do own it and not paying attention to it. >> i know you're not. >> i'll throw the stat out. >> it's interesting nonetheless. >> it is an interesting stat. >> since '99 the dow one month later nine of the 15 lost an average of 6% the remaining 6 gained three on average the average loss of all new dow components one month later was 2.5%. one year later 7 of the 15 lost an average of 29%. we're taking it since 99. >> right. >> grain of salt somewhat because microsoft intel cisco were a disaster because of the tech discaster. >> right. >> there are a lot of people
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that buy in advance of it going in the dow since the announcement made. naturally when they buy it they're going to sell it after it went in because that's the only reason they own it. that's the reason for some of the pressure. overall i look at a fundamentally i think the dow as we've all said is increasingly irrelevant. i'm not paying attention to it. paying attention to the fundamentals and apple's tv initiative the iwatch no expectation. >> the apple tv service and multiple other things if you got a chance to see tim cook defending the watch the other day incredible because it talked about how people really didn't understand what they didn't already know about what they were next innovative product was going to be. obviously the watch is the latest and greatest of that line of everything that apple is bringing to us. you own apple for those reasons. you don't own it because it's going into the dow. >> stay with tech. alibaba stock flooding the market today. the lockup expiring. take a look at what the stock is doing right now. there it is. it's barely a mover joining us by the phone is an analyst at cantor fitzgerald.
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welcome back. >> thank you, sir. >> are you surprised that the stock is holding up as well as it is today? >> a little bit. little bit. although this has been discussed and talked about for quite some time. i mean i do think that over the next probably several months, it will be a bumpy ride. the stock, you know, settled above $100 for an extended period of time and lost quite a bit of its actually been one of the worst performers in our group, so the fact that it's still relatively flat on a day like this only tells you that people may have actually actd before the d-day. six months from now if today people are talking about the 437 million shares coming unlocked, six months from now we will see 1.6 billion shares or almost two-thirds of all shares outstanding. >> wow. >> the next six months will be interesting for this to say the least. >> you think the stock is going to 100. that's your target.
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we had an analyst make the case yesterday who had just upgraded the stock. it was scott devit who was behind the fundamentals, that the counterfeit issue was in th in. the stock was dealt with. and the monetization expenses or the efforts that they've been putting forth to improve the monetization of the business are working as well. are you as much behind the fundamentals of the company as he is? >> yeah, i am. scott and i see eye to eye on this one. kwloin look at the growth rate, this is one of the fastest growing ecommerce plays in the world. you have amazon and these guys as the only two candidates large cap looking for growth in this category. mobile is so -- so mobile on a user growth and transaction is definitely a tail wind but from
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the monetization perspective is it a head wind but we have seen that with google. and we think over time alibaba will come out of it as well. >> youssef, thanks much. >> block, trade? >> i mean, this is the kind of thing we are look at the supply coming out. it's more interesting than it is here. everything has its time and price. i look at get beg low 80 and my radar goes on and say if you are a china bull you need to be here. >> steve? >> i don't need to be there. this is a battleground stock -- >> people talking about it a lot. >> i can talk about hedge funds that are shorted and longed. they are named like jd. they have their own fulfillment centers. the counterfeit issues haven't gone away. the s.e.c. issues haven't gone away. at the end of the day you are buying chinese government and jack ma could be gone in a
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heartbeat. >> how does a stock go from the most highly anticipated ipo in memory with hype the likes we have not seen in so many years to talking about a company with issues and a stock that has fallen out of favor so fast? >> youssef points out the positives as well. positives, fundamentally, this is an incredible company. mobile, the growth there, incredible. the issues are exactly that, though, the counterfeit issues that came out just in front of the earnings, the stock has not been able to recover. >> and judge, when ma was talking the talk, not walking the walk, there were rumors about lions gate and all the things he was going to do. what have they done? they made a $200 million investment in snapchat with a $16 billion market cap, so they tell us. they are make this much of an
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investment. >> did you own it? >> not for the last six weeks. >> put me in the mind of the investor. you were clamoring for a piece of the ipo. >> we got the ipo. >> that's what i'm saying. >> and we had them sell as the stock had the run up. i bought for myself after that. we got in, the stock made a nice move. we thought the thing could see the 130s and 140s a share. it got to 120 and fell like a rock. and at 84, i agree, at below 80 it looks interesting. but steven's points are well made. coming up the fed's moment of truth, the decision 2:00 eastern, an hour from now, stocks are lower in anticipation of that. and three and a half hours left in the trading day. we're going to set you up for the second half when we come back.
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just about an hour away from the fed's statement. i was trying to think of as many sports cliches as i could. moment of truth. backs are against wall. one moment at a time. >> got to take them one at a time. >> sudden victory. you always win on defense, right? maybe yellen -- >> a defense is a good offense. >> the water buoy is on the kickoff team. >> don, give us a pre-fed check. >> here is your full-court press ahead of the fed meeting, dow is down .6% and the nasdaq down by .25%. all in the red so far. now moving on to where the heat is and the action in terms of the stock market. the s&p 500 floating near session lows. energy and utilities the outperformers despite the oil prices being lower.
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you can see consumer staples down by around 1%. and the macropicture. the dollar index down 1/3%. and crude down by 2 1/2%. and gold prices up by .5%. and check out what is happening with the ten-year yield, 2.03%. we'll say that's a benchmark for right now. we'll see if there is any movement before or after the meeting. >> let's talk about what is going to happen here. janet yellen is number one on your tie if not in your heart. >> she is riding a dove which tells you. >> the more you know. >> i think it's going to -- >> if you think regardless of the word coming out the fed is still going to be as dovish? >> i do. >> what do you do?
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>> i think you should be long bonds because i think they rally. the ten-year kicks below 2 and trades lower still over the next 30 days. that's what i think. as far as the second half -- >> stocks and bonds go up? >> i believe so. and the german software company, s.a.p. they benefit from the euro being so weak. i don't know if it continues to go to parity, but i think is it attractive. >> we look at the financials. they are trading off the high year to date. >> even with rates? >> i want to see sentiment come into the options as well. if we see that flow, morgan stanley have been in positive territory. >> michael block? >> we are noticing stocks down here. >> i want to own europe and do
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it through the hedj. if the fed goes, europe is easing. you can take japan as well. they are starting the easing in europe. if the fed doesn't go that market is cheaper. i think it is knee jerk reaction. >> that does it for us, "power lunch" is next. >> halftime is over. >> see if you can find us along over here along with amanda drury. she is tanned and rested and back and ready for the fed count down. >> the fed decision is less than one hour away. we here are getting you ready for market moving event over the next 59 minutes. >> the word to watch here is "patient." you can be impatient as we wait to see if patient is still in the language. will the fed change their statement? >> these are


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