tv Fast Money Halftime Report CNBC April 20, 2015 12:00pm-1:01pm EDT
but interesting news. >> yeah, whole swap of america saying what are you talking about, never heard of that. meantime, ibm tonight, that'll be a big story for tomorrow. in the meantime, headquarters, check in with michelle and get the half. welcome to halftime report, i'm michelle cabrera in for scott wapner. jim lebenthal, jim teranova, josh brown. what are we think of today's rally? what is driving this? chinese stimulus, earnings season, let's go. >> central bank policy. it's globally coordinated efforts and it continues to what happens at the end of the month is two key central bank meetings coming. that's the federal reserve at the end of the month. think about this for a second, bank of japan, april 30th, are
they next. >> game plan. got ahead of ourselves here, retail downgrades, lululemon. tech nol in the house, next frontier for apple and google who will come out on top when it comes to technology in your house. and we begin with today's big rally, stocks bouncing back on more global stimulus, this time in china, it's the biggest week of earnings season, 40% of the dow are reporting this week. jim, we already heard from joe, what do you think is driving the market? >> listen, i think today's rally is the snapback from friday's selloff which i didn't quite believe. frankly, i think what we're seeing in earnings reports thus far is that earnings exceptions were set too low. we'll see if that continues. the one thing i'm keeping an eye on here is whether dollar strength plays through in the earnings reports. that's what dragged down earnings estimates and clearly if you look at intel and others, its been dragged down too low.
the big daddy is ibm tonight. they have a lot of overseas exposure and we'll have to see how the dollar hits them. >> what's your assessment of earnings? what it's doing for the markets? >> earnings season is pretty much on track with where it's been. i don't see any real major surprises, but turning to price action, michelle, couple of interesting things that traders are talking about, i think worth pointing out, because they're somewhat rare, the dow is leading which is something that hasn't happened this year. four out of the top five performing dow names on the day are up more than 4% looking at boeing, apple, looking at 3m. then you look at ran itnys, up with 1.7% -- >> we to want look at that? >> the good kind, not the kind that gets you put in jail. look -- here's what i would say on it. you know, this was something that the technicians had been pointing to all year. they've essentially been saying, look guys, it's not confirming,
dow theory says the break out, the new highs are false. you have them up 1.7% on the day, false breakdown on april 6th. strength seasoning important psychologically and structurely. the third thing quickly, if you look at the top s&p 500 names for april. 11 of the best 15 are energy stocks, not many people would have thought that going into the spring. that i think helps a great deal when you look at where some of the damage had been prior to this period of time. >> what does morgan stanley tell us? >> investment banking is still solid, trading is good, wealth management, trading turn around is still in tact. to josh's point on energy, it's a very contributor to why the s&p is moving forward right now. the mutual fund community, back in january, bailed on energy, many basis points behind in terms of their wading to the benchmark. underweight to have to play catchup now in the energy equities. i have said, i think april is
going to be a strong month for equities on friday they didn't look so good. we're coming now into a very critical week. a technology-driven week. there are three very important names that i would look at this week, but i think right now, the s&p has the potential to do exactly what i thought it was going to do and take out its all-time high by the end of the month. >> wow. what are the three names you're watching for? >> i think you want to look at the names that have been winners year to date, tuesday, wednesday, thursday, tuesday, under armor, wednesday, facebook, then thursday you get amazon which i've been absolutely awful in trading the last couple of years. and even talking about on this show, but you want to see the positive momentum and the underlying growth story dmont each one of those three stocks. josh has done a great job highlighting over the last month that a premium is being preyed for growth. when you're talking about three names where you want to see the growth, these are three strong barometers to take the pulse and the temperature of the collective s&p market.
>> how important is the rise on whether or not the fed is going to raise the rate? how important -- generally, it's extremely important. >> i'm surprised by this. when i say surprised, i'm talking about going back to the beginning of the year. i did not think we would have this rough patch in economic reports that we've had over the last really now almost two months. that's a long time. and that to it seems to me what's holding down the ten-year note, absent that, there would be more emp distance from the fed to raise rates earlier. i know there's a lot of people out there who are going to say yeah, but, europe is still slowing down or not growing as fast as we expected, and that's going to keep long-term interest rates low. i disagree. i think that there is definitely potential for the u.s. tenure to rise well above 2% by year end, but we've got to get through the soft spot in economic reports. >> core inflation crept back up to 37b9 8% according to the measure that the fed watches. they're going to go in june or
september pretty much regardless. i think they'll look at it like a test and see how the market reacts. i don't think they're expecting a lot of damage. i don't know what that means for ten year or 30-year treasuries or whether or not you want to buy a dip that may come. they are going, and i think the inflation data, which has really been the problem is starting to give them the room to do that. >> here's my question, the front end that they control, they don't control the long end anymore, they're out of the market. what if that long end doesn't move? what they do on the front end doesn't seem to matter at this point, right? >> that actually is what happened in the middle of the last decade. the fed did not have as much of an influence as the long rates. >> ripple through. >> yeah. and that told you about the state of the economy and obviously after 17, 25 days at this point, rate hikes consecutively, the market said no more. >> how much of your thinking about the overall market is baked into the idea that the long end of the curve doesn't move. rising interest rates impact
earnings, impact your expected return, they impact the competition i can choose or the stock market. >> i think what's changed from prior rate hike cycles is how globalized the bond market has truly become. >> uh-huh. >> especially with respect to investor and investment capitol flows. i think it's difficult to invision a scenario where there's sustained upward move in long rates if it's not happening globally, based on monitor policy elsewhere, it's hard to imagine. >> it makes great headlines to talk about. the federal reserve, finally after historically easy policy coming forth and raising for you want to call it a token rate hike, fine, whatever it is. it's going to be a raise. where are they six months to 12 months from now. if you're managing money, what's the cycle going to be? historic the way its been in year's past where we go to a meeting, okay, you get a hike. the streak doesn't believe you're going to see that.
ultimately, where are you going to be 12 months from the start of this? are you going to raise rates? the streak is a low degree of confidence that's going to happen. and it's going to continue to create an environment that searches for yield. >> josh is convinced about this year, i am not convinced. >> i think they will do it this year. i think very much for josh's reason which is maybe symbolic, i think it's a little bit more than that. everything we're talking about here is how will the markets react whether it's the ten-year or the stock market to a fed rate hike. what we're ignoring here is there hasn't been a fed rate hike in nine years at this point. this is like taking a car that's been in the garage for nine years, and you're turning on the ignition, right? the first thing you want to make sure is that the engine turns over. you're not going to race this thing and take it on a long road trip. >> that empty click. >> right. >> it turns on. >> stanley fisher told you he's raising rates. i don't know why -- >> he's one guy. it is a committee -- >> but it's stanley fischer.
they will do one this year. i think part is an exercise to see what happens with the market. it'll not be material to the economy. >> that's true too. >> it's not going to be material, i agree josh, they are going to do a rate hike before the end of the year. think about the rest of the world, every other global central bank, except for maybe the bank of england that is possibly faced with the u.s. situation. everyone else is in an easing cycle. that's treasury yields, german boom versus the u.s. treasury. >> it makes it look good right in the united states. exactly. coming up, shake ups in asia and across global markets today. we're going to go around the world in search of the best placed globally beyond the borders of the united states to put your money. battle for your home is on, apple and google are at forefront. there are smaller companies hot on their heels. we'll dig into that. target tried a special offering of lilly-brand items
this weekend. as piper jeffrey noted, it was crazy. does this move the needle for target? that and much more coming up on the halftime report. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. if you're looking for a car that drives you... ...and takes the wheel right from your very hands... ...this isn't that car.
with all eyes on china. verss in hong kong, shanghai focussed on the announcement that authorities were tightening up on margin trading and neigh easier to short sell stocks. closed lower by 2%, ended by 1.7% and also slipped by 2%. now china's policy makers though put a floor on the selloff. over the weekend, the chinese central bank cut the reserve requirement ratio by 100 basis points, the biggest cut since the global financial crisis and that move is to help stimulate the economy. now shanghai initially rallied on the move, but later fell back as investors continued to fret over the tougher stance on margin trading, michelle. >> all right, come join us here on the set as we discuss this with a guest joining us now. good to have you hear. >> thanks for having me. >> what do you make of the move by the chinese central bank? the banking system there? is this a really good thing or a
sign of desperation? >> i think they're doing what they're supposed to be doing. when you have ppi, negative territory for more than two years. cpi below 2% or emerging economy, monetary policy should be easing right now. that's what they're doing. now the reason they're sending signals if you will is they also don't want a bubble in their hands. hence, on one hand, they're restricting some of that rise in the equity market, on the other hand, they're helping the overall economy. >> so they did one, now they do two, three, four. >> possibly. >> or are they data-dependent. >> i mean, they are. in essence. right. i think one question is what would i do? i'd probably ease more, but i'm not them. they're probably going to wait for data to come out, if it gets worse, they'll probably ease more. >> what exercise should we be about 7% growth. this is the lowest growth since when, 2009. but the size, the overall size
of the chinese economy, right now compared to 2009 is a lot larger. isn't there a law of large numbers where you can only grow so fast after a certain point? >> yeah, i'm not concerned about the 7%, 6%, it's how they get to a slower growth rate. they should to your point, it's not the same china of '80s. they're trying to engineer the slowdown. >> but i'm not even sure whether or not that move is going to have so much of an impact. five, ten years ago, that kind of move would have an impact. but now, the problem is that the money isn't necessarily going to the right places, right or private companies. then another issue, is that the overall environment is one where there's excess capacity, tons of unsold property. you have an export in an environment where exports just really aren't so strong. and so in that kind of environment, do companies really want to invest? >> let's put it this way. they're not in a good place, but
they're in a much better place than we were back in '08 when they have reserves. from that perspective, one they could continue to ease and not a zero balance like most of the developed world. two, they have a ton of reserves to try to help a situation not to deteriorate. the way we look is don't fight the same ways. there's going to be volatile, at times, try to contain the market from turning, but at the same time, they have a lot more to go. >> now the other trade this year. russia. i mean, boy, you want on the stock market, and on the currency if you've got that timed at the right moment, russia up 27%. is there more to go there? >> yeah, so, if you think about russia, all we've gotten so far is rereading of the currency. valuation has gone up to around six times, and actually five and a half times future earnings, emerging markets trading around 13. we think there's still more room on the equity side, on the currency side, fair value in our mind.
>> guys, how would you trade emerging markets at this point? >> stay clear of russia. i'm not disagreeing, just marking the obvious that you have a person basically that market is going to trade with putin, right. i think the reason that things have stabilized right now is simply that ukraine has stabilized and you cannot count on that. in terms of emerging markets and andreas, i'll be curious to hear your thoughts, every portfolio have a small, 3 to 5% allocation and not look at it day-to-day or month-to-month. you have to get used to, any day may wake up and the bank of psi press may fall out or root p may devalue. anything can happen. don't watch it day-to-day. >> mr. new world. >> the interesting thing on china is if you go back a couple years and thought about the historical trade that would be aligned with the pboc, you want to buy copper, steel, you want
to buy gold, those aren't the trades that are working this morning. and the question becomes what are they trying to lift? obviously trying to lift on the private side, the consumption. >> to the point, the transition mechani mechanism, theirs is the toughest. >> it's interesting that the government is really encouraging investment in equities. they are pushing that. >> if they want to encourage investment and equities in terms of how you're trading and investing as a money manager, what do they do with the currency? do they lose the peg to the u.s. dollar? i think that's the next move to be understood in terms of strategy which comes out from the chinese government. if that happens, obviously equity's get a huge lift. but does it happen? >> that would be a moment. right. we been waiting for a very long time. >> we see that the movement is there. the stock connects, it's exciting. money spilling all over into hong kong and one of the reason why is there's a rally. it is. people have been talking about what's going to happen.
let's move on to greece, european equities shooting higher with greece still in the focus. the euro group finance ministers will meet on friday, how worried is everybody here about a greek exit? are you worried about a greek exit? >> not as much as two years ago. it's a concern, but -- >> you're saying you don't think it's going to happen or if it happens, it doesn't matter so much. >> second one. i think even if it happens, it's not the same situation as two years ago. europe is seeing growth outside of the greece situation. so, it's not quite the same situation. >> anybody here planning a potential greek exit? >> there's several questions wrapped up in here. first off, do we think greece is going to exit, at this point, it is likely. two though, what you have to understand is this does set the stable, not for right now, but for future crisis, whoever is the problem child, and three, to the overall main point, this does sort of bring about the beginning of the disillusion of the european monetary movement.
that's kwha i see happening. >> that's a doomsday. >> i disagree. >> let me be specific. you have greece doing it this time. you know, three years from now, whoever's in trouble, they do it. >> that's why it won't happen. that's why it won't happen. >> i think it will. >> should it happen, probably? will it happen? i don't think it will. it'll create a lift. >> greece leaving won't happen. >> within the next ten days they'll get it done. i don't think greece wants to leave, there's too much weigh invested, very careful with all of this. i think if you are the core economies, you really don't want greece to leave because your currency and the impact that you're going to have right now. you want to drive exports. what's going on in the currency is ultimately the best thing for europe, in an environment they can't be competitive -- >> you're saying if greece leaves, it's stronger. >> absolutely. take out the weak link. why would you do that? they have way too much invested. way too much invested by the end
of the month, i think it gets done, sorry, i disagree. >> it's fine. >> thank you everyone. coming up, a downgrade for lululemon, one analysis says that's as high as it goes. kors slapped with a downgrade, one guy owns it in the competition for trader of the year. is he going to hang on anyway? and it's the busiest week of earnings season. traders cut through the noise for the numbers you need to watch. halftime will be right back. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro.
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there's no way to predict that. for all the confidence you need. td ameritrade. you got this. welcome back, look at how high oil is trading. $56.38 per barrel. sticking with energy, let's talk petro. it's the most indebted company. and world, that's saying a lot. also a huge run of 57%. really up sharply, they're finally going to release the financials on wednesday. we don't mean q1, fourth
quarter, they're like 90 days behind because of the scandal. i'll be in rio to have the coverage. would any of you buy? >> it's not in my wheel house, anything with accounting issues is something to stay away from. >> i'm a tax capital loss later in year, i'll let you know. i've traded the name, talked about it, maybe all the bad news is fully recognized. its had a nice bounce, i don't know if i'm interested at this prices. >> what do you think andreas? >> i can't speak about this specifically, but similar to brazil which has had a nice bounce from the bottom this year. what we like about brazil now that we didn't before is that the currency has gone a long way closer to fair value. one of the most expensive. >> so it's weakened substantially. much to their chagrin. >> not as much as the ruble did,
but that's -- let's put it this way, we have been under brazil for the last two years. we're not ready to say, everything's priced in, but we're much closer than we have been in the past. >> it's a train wreck of a place, right? all the things they should have done when times were good, they didn't do. then it all comes home to roost, right? the interest rates in the united states start to turn against them. oil turns against them in a big, big way. then, you know, the corruption gets revealed. >> the best thing that happened to them, now they're being forced to make those reforms, unfortunately, that's the only way that you get to view them. >> prices. >> that's one of the incremental positives that we're waiting to see. actually the worse things get, the better brazil will look to us, the more reforms will likely to occur. >> all right, coming up, the battle for the smart home. who's winning between apple and google? plus how to trade it. a sour call on lululemon, now the time to get in or stay away? and don't forget to visit
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cnbc news update at this hour. u.s. authorities have charged six men from minnesota with planning to join the islamic state and fight for the militant group in syria. all six had allegedly been conspireing for the past ten months and were arrested as part of a year-long fbi investigation into young men from that area trying to travel to syria. the supreme court left intact the 2012 insider trading conviction of former goldman sachs director. he is the highest ranking corporate official to be convicted in the government's multiyear probe of insider trading in the hedge fund industry. he is serving a two-year prison term as a result. firefighters have gotten the upper hand on a wild fire burning in southern california which charred more than 1,000 acres. it was started on saturday by an unattended cooking fire. 300 homes were threatened and evacuated. justin timberlake shared a photo of his new baby on instagram. silas randall timberlake was
born a week ago. social media users responded to that post with more than 800,000 likes. that's your cnbc news update at this hour, everybody go, aw. >> such a cute baby. >> such a cute baby. >> look at the parents, i mean, really. >> thanks. all right. more news from comcast and time warner on the merger talks. morgan bren season here, she has the latest. >> hey michelle, sources tell cnbc that comcast and time warner will meet with officials on wednesday to negotiate possible concessions to get their planned $45 billionmerger approved. regulatory outcome for this potential deal could also affect other deals pending within media. charter communications, acquisition of tv customers as well as its programming agreement with bright house and also at&t's proposed $49 billion merger with directv.
checking shares of comcast and time warner. it's about flat down slightly and thyme warner up about 1%. >> all right, thank you, let's trade it. what do you do? >> first off, if you get a dip in the names, you guy. here's why. we've owned it over a long period of time. this is the government getting it wrong. they're looking in the rvmd, they're neglecting the fact that it isn't just cable, over the air, isn't just satellite. there's telephone, there's also the internet, their main complaint is they don't think this is for the benefit of the consumer, what they're missing is there are so many fragments channels of distribution out there that this is a wrong place to look. they're squelching future deals, but in other industries as well. >> people should buy the stock because the doj is going to see the light? >> i think they're going to face anonymous pressure is the answer. now, that doesn't necessarily mean that the government responds to pressure, i do realize that, so maybe this is a
little bit pope becoming the father of the thought. you know, but having said that, i do think that the world and the government at some point will get its eyes on the ball here and realize this is not a merger worth blocking. >> there's no break up date. so i don't know if it's terribly ownerous for anyone involved if it doesn't go through. i agree with jim, there are enough competing options in this day and age, whether it's netflix or satellite or people unploughing, hbo will offer a stand alone. espn is next. they'll be able to make that case and get the deal to go through. in the meantime, you have a stock that's trending gently higher, it's an inoffensive chart. it's above -- >> you're talking about comcast or time warner? >> comcast. they have nice channels. i think it's an okay long. this is a gigantic company, and still planning to grow its earnings by more than 20% based on what they've guided the street to. i like the name, and i would be a buyer. >> joe. >> i agree.
i agree. and i think jimmy brings up some good points in terms of -- >> go ahead. >> what if it doesn't happen? what if what the doj wants from them is so big that it's not worth it, do you bother to own the stocks? i don't know if that's a possibility. >> i think the entire space, i think many have talked about it, they have come on the show, mario adjusted the potential for there to be a lot of consolidation in the space. a lot of mna. we've seen there. there's a premium on the entire group for that. clearly comcast has a desire to get in the new york and l.a. markets, time warner gives them that. yeah, i don't think it's particularly ownerous for the performance of the stock names themselves. i do think something will get done. i'd be surprised if it didn't. >> okay. it's earth week. we're taking a look at the battle for the smart home. with us is michael nunez.
popular science. >> thanks for having me. >> the race for the home to make a smart home so i can turn on the ice maker from some remote location, who's winning between apple and google, who's number one? >> well, they're both implying different strategies. apple's taken a software approach. right now they have about 40% of the market share in terms of smart homes in the u.s., i'm sorry, smart phones. in each iphone, something called apple kit is baked into it. that's what's running this smart home technology on apple's side. >> really? so on my phone right now, i can find this thing. >> if you have a new iphone, something in there is called apple home kit. there's not a lot of products available for it yet, but in the next few years, you'll see a number of them coming out. and anyway, you'll get the same type of ease of use that you get with the iphone. >> you think this is better than google? >> well yeah, google has taken a different approach. they own nest, they're keyed in
on hardware, samsung and arms holdings which is a big computer processing company. and they're basically working with these different hardware manufacturers to have each of these devices communicate with each other. this is all part of the internet of things movement, and google thinks the answer to that is having as many different products communicate with each other as possible. >> are there any other companies in the space that we should know about? >> yeah, absolutely. there's, so you know, important thing to know about this smoet home movement, it started with hackers and do it yourself enthusiasts. so some of the best stories are from just very entrepreneurial types. my favorite is something called eden, and it's a smart garden -- >> edyn. >> edyn. it reads the weather the report, determines the quality of soil you're trying to grow plants in. and it'll tell you how frequently or infrequently you need to water your plants and whether you can grow a plant within a specific area. super helpful for anyone who has a garden at home.
>> cool, michael, thank you. guys, let's raid trade it. buying apple or googed based on this? >> no. >> no. if i need an app to tell know water the plants, that's ridiculous. i think apple's strategy will be the same strategy that it has been successful with in all its products. . allows the competition to go out, be first in the environment, test out the products, see what the consumer likes, doesn't like, then apple comes in, one step, surveys done by someone else. they've done it with everything else, then they give you the product they know the consumer wants in the capacity. that's the strategy. that's what makes them successful. >> first mover advantage is no advantage at all. >> it has not been. >> joe's home though is fully wired. >> you have a smart home? >> yes, when he walks in, taylor swift is playing. the lights are dimmed. he's fully -- >> joe's middle name is jettison. >> yeah. >> and the dog sparky. >> is this going to be enough of a market to actually move the
underlying stocks? google, whenever i look at the earnings report, oh yeah, they're doing this stuff, but they're a search. >> that's right. this is great stuff and maybe one of the half dozen things, whether it's wiring the home or driverless cars or drone deliveries, i know i'm mixing companies here -- >> but all of them are right. >> maybe one of these days, one of those dozen or half dozen initiatives will become the new google, the new apple, the new amazon, right now that's not what it is. google is search, amazon is retail, and apple is consumer electronics. >> ironically, when energy prices plummet, it actually sets innovation and adoption back for some of this stuff because your bill from the utility is less ownerous, you have less of a reason to to search out things like -- >> nest. >> solar, do i need nest, thermostat being controlled? but you know, this moment will pass and we'll get to a point where people do care more and
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coming up on the top of the hour on power lunch, it is gearing up to be the biggest week for earnings. it's still early in the reporting season, but a worrying trend is starting to emerge. if it continues it could undermine the bull market. we'll explain. also some of the big names in tech getting ready to report, the three tech stocks you may want to buy this week. and big cat versus mid caps. where should your money baa be? the stocks on your shopping list. now it's back to michelle on fast money halftime. >> all right, calls of the day are in the retail sector today. first up, lululemon getting
downgraded to underperformed. michael kors getsing downgraded, and piper weighing in on the competition. calling this weekend's blowout sale, crazy. jim. >> well, i own the stock -- >> you own target. >> target, yeah, sorry. there's some people who are saying this is bad news. this is terrible news. i beg to differ. i think this comes under the heading of any publicity is good publicity. >> lines out the door, and you run out in ten minutes. >> here's the thing, you don't want your website to stink, especially the issue with the credit cards two years ago with the breach. it draws into question again your overall technology suitability. yeah, i think your point is well made, this shows a lot of demand, and it puts target back on the tip of people's tongues when they're thinking about where to shop. nothing but positive. >> return to cool is the idea. remember when it started it was cool, then it got stale. >> i don't do cool. i do classy. >> lilly pulitzer is cool, then
i'm davis. i'm sorry, so not that. i think you saw the enthusiasts out in force, and that's great. and they'll expend themselves, and everyone who was really dieing to make their house look like new england threw up all over it -- >> palm beach, palm beach. >> it'll be back to business. i think that, i think that this is similar to like a gopro thing, everyone who wants one, gets one, then they wonder, well where is the next wave of consumer coming? this is a very, very niche thing. i don't think target -- >> what about target's ability to get back to the idea that they pair with designers. >> this is cool. this should what they should be doing. i don't get bulled up on an $80 billion company because they throw a sale and a lot of people come out one weekend. i think there are better reasons to own target, and i like the stock. >> let's get to michael kors. >> wait a second, all bulled up because his ownership of lululemon clothing was -- >> please don't bring that up again. >> the comfort of it, the feel
of it. you get excited over clothing at some point obviously. >> yeah, but i don't buy the stock because of it. >> okay. >> i used to be a muppet, then i realized, good product doesn't translate to good buying opportunity in a stock. >> how did muppet become such an insult? i'm sure miss piggy wouldn't be happy. >> i want to talk about michael kors. michael kors -- >> as of this morning? >> the playbook that we've been running on so far this year, it's gone straight down. i mean, i bought it, it's gone straight down. now the fact that i'm getting out of it today means it'll go straight back up again at some point. from a risk management standpoint, when something goes down as quickly as it's going down right now, you really have no reason or understanding why does the expression -- >> what went wrong? >> i have no idea. it's a bad trade. i don't to want manage the money. >> i was shopping this week, and i know there's no comparison to
this, i think it's a worthwhile observations, there were tables and tables and tables filled with michael kors and ties that were 20% off, 50% off, that's a radical change from the band even a year and a half, two years ago for christmas 2013 for example, and now you're starting to hear about the accessories, which was supposed to be unimpeachable popping up in places like t.j. maxx. >> the minute you're a publicly traded fashion company, you need ubiquity. the minute you get there, nobody wants you anymore. >> the cachet is gone. >> it's gone. >> it's a tough balancing act. there were a handful of companies. >> ralph lauren's done it. >> and i'm not going to be the person that's able to do that in advance. which is why, if i'm trading these names, i'm trading technically, kors has been in a down trend since last christmas. >> it's like coach all over again. >> perhaps. >> you would know better than any of us, michelle. >> sorry about your trade.
>> it is what it is. >> all right, remember, you can follow all the action at cnbc.com/pro. coming up, the big business of pot, sellers are raking in the cash, i almost said parking in the cash. how can you invest in the booming business of pot? first though, a look at the s&p 500 sectors right now. they are all in the green. the utilities are higher by 1.8%. consumer staples lagging, but still higher bay half percent, we're back after this. automotive innovation starts... right here. with a control pad than can read your handwriting, a wide-screen multimedia center, and a head-up display for enhanced driver focus. all inside a redesigned cabin of unrivaled style and comfort.
all right. there's the dollar index as you can see, off the highs of the session, still up today by a third of a percent. let's look at the dollar here for a second. what are you telling your clients? >> yes, so, i this the dollar is actually is the biggest trade for any asset class, as has been the last year. i think it could continue to affect earnings here in the u.s., for the e.m. space i think it's the biggest risk, how people talk about the taper and super-taper tantrum worries. we welcome higher interest rates in the u.s. that would mean the u.s. is doing well, everything is fine. the biggest concern for us is stronger dollar. i would use the tantrum as an opportunity buy. the dollar could ground easily. that worries me. >> are you predicting that it will? >> it has already. >> and we think there's probably some more dollar strength to
come, though not as significant as the last two years, so e.m. -- do you stay with an economy that looks on sound footing like india? i haven't heard you talk about that. >> yeah, we're actually now, especially for a value-tilted portfoli portfolios, we're underweight india. we think valuation is too expensive, and it's depreciated significantly the last year let's talk about some other high-growth opportunities. our next guest estimates that the cannabis market will grow to a $15 billion industry by 2020. here is deanna, c oeismt of frontier financials. thank you for being here. >> thank you for having me. >> how do we get to a $16 billion industry. >> today we're looking at a 4.5 billion industry, growing at about 27% per year, so we're projected to reach over $15 billion by 2020.
>> how do you invest in that? >> carefully, to say the least. what we have found, once we looked at our dat ra from colorado specifically, we found some interesting indicators of how the industry may be moving forward. for instance we found very high demand elasticity, specifically in the adult-use sector. as more cultivators come into the space, a drop in price will significantly increase demand. so that's something that cultivators and folks looking to invest in cultivation should take into consideration. in fact we expect to see some price wars in colorado and other states, again in adult use. other interesting indicators are sort of on the legislative side of things we found that states where illicit use was over 12% have been more likely to decriminalize or move forward on some kind of legalization of marijuana. that would be interesting looking at what stakes will come
on board and change the legislative space. >> that makes sense. and last but not least, the tax structure. we also saw that in washington and colorado, where folks projected much higher revenue streams, the sort of -- the reason why they felt sort of the mark was the tax structure was likely too high. what that does is fuels more revenue toward the black market and ultimately decreases the ability of the state to capture more revenue. so something else to -- >> which was the point in the first place. giada, thank you for joining us. >> thank you i never knew there had be so much price elasticity. >> if our a pot-preneur out there and trying to figure out how to make hay, i would say hurry up. at some point this will tip over and see big established
companies, alcohol businesses perhaps, they're going to come in and institutionalize the whole thing, and a lot of the entrepreneurship will be washed out with the tide. things will get more corporate. i would hurry up. >> which is what many people had predicted through this whole conversation. coming up u. just three hours left in the trading day. game plan for the second half is next. plus the big earnings you need to watch. [ male announcer ] we know they're out there. you can't always see them.
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portfolio. expectations are so low right now i think they can beat those low expectations, but bear in in mind this is a multiyear turnaround. >> any kind of short-term trade? >> i'm already in. i can't be more in. >> joe? >> let's talk about blackstone which laus week we had americansed the possibility beating earnings. i like it. ite name halliburton, they beat today, again 48 bucks, stay with that game. next focus is wednesday, texas instruments, i see this as north of 60. stay with that one. >> keeping an eye on facebook as well. you said this at the top of the show, but remind it for everybody. >> facebook, hugely important, facebook is wednesday, amazon on thursday, both very important. >> downtown josh brown? >> the drama queen in me will be watching yahoo. i have no position, but that will be tomorrow night.
they're saying this is in fact the make-or-break. >> so -- but fine, i think it will be interesting either way. underarmour, surprises tend to happen in the direct of the prevailing trend, this is one that could surprise the striae. stock made a new all-time record today. head -- is tomorrow the report? tomorrow. >> andreas, what are you watching? >> i think this greek situation is something we have to keep an eye on. it won't -- it definitely will give you a sentence of risk. you're talking about the bick meeting on friday, do they come to a deal? >> i'm guessing no. >> i have no edge on that, but i
think it has big implication. they've been see green shoots s. >> got it, guys. that is does it for us here on "halftime report." "power lunch" begins right now. >> halftime is over. "power lunch" and the second half of the trading day starts right now look who's along for the ride for old times' sake. tyler is out today. the rally is on. let's look at what they're doing, currently up by 1.3% with a gain over 2 -- up by 1.2%. the s&p 500 is gaining 1% exactly. the little guys are doing very well today with a gain of 1%. >> as we know, a lot of people like to trade etf. you can see the gauge