tv Fast Money Halftime Report CNBC August 13, 2015 12:00pm-1:01pm EDT
people making the argument, prime day on july 15th. probably helped elevate that number. on the headlines. >> and potential boon for fedex and u.p.s. we'll see. >> home depot earnings, there's a lot to look forward to. >> let's get over to headquarters, scott wopner and the half. ♪ welcome to the halftime show. let's meet the starting lineup. joe terranova, along with josh brown and pete and jon najarian. secondary school what our experts say you need to know at this hour about the shake shack and tesla stock offerings. calls of the day, gopro, microsoft, yahoo getting love from the street. now we find out whether our own analysts agree. we begin with the markets, it's been a wild 24 hours, the sell-off, the reversal, china remaining a major story with yet another currency intervention. which has sent the dollar higher
against the basket of currencies. joe what does it say after coming back from 275 points down on the dow to close positive. no follow-through, even though we've managed to get back on the green as we come on the air. >> the absence of follow-through has a lot to do with the spot price of oil. no bounce in the spot price of oil. it looks like it wants to go sub$40. the market is in place where it's battling headwinds and tailwinds, focusing on the s&p it's a fool's game. let's go back yesterday, we talk about the monumental reversal. much of the reversal came from apple. why did everyone step in and buy apple yesterday during some point of the day. was it fundamentals that dramatically arose out of nowhere at 11:00 a.m.? no. think it goes back to what we talked about. that being buy-backs. and the opportunities this month for buy-backs to be in place. you would have to think apple looking at the value of their stock, approaching 111, 112,
steps in and buys back some shares. on big sell-offs you have to keep your eye out for things like that. >> doc? >> i thought yesterday josh talk about as it turned. it was 12:25. >> 12:26. >> when that happened we did see a dramatic turn to joe's point. it was buy-backs and things like that? certainly that had to be part of it. >> was it discouraging you've gotten virtually no follow-through from that today? >> no, because i think the real positive i got from it is dom chu was the first who highlight this for me. monday the big rally came on the average turnover that came as 65% of the full-session average. nobody was buying into the rally monday. the big sell-off on tuesday had a bunch of buyers into that, as far as people that believed that it was going to keep going. yesterday when we flipped, we did so, judge on about 150% of
normal volume. not only did they catch shorts, but there was commitment of capital by longs or companies to joe's point. i thought that was the story. so much money came back into the market, as we were hitting the lows yesterday. >> josh today maybe it's the oil, the drag. what's going to have the biggest impact as we move forward? >> i'm going to keep it real with you, scott there are no buyers, it's only corporate activity. the only thing happening in this market this summer heading into september is corporate buy-backs on down days. there's absolutely no bullishness whatsoever. you look at the aaii poll, the latest one, it's desolate, it's 28% bulls. and that's consistent with a lot of the other sentiment readings. people do not want to get long this market right now ahead of whatever the fed does or does not do. half of wall street is on vacation anyway. and so when you see the market
down 240, and you see a midday turn-around, that's not like an investor with a trumpet on the hill blowing the rallying cry, that's apple coming into the market, with a portion of their $200 billion and sparking the rest of the corporate buy-back machinery back into action after two days of selling. and if you want to make more of it than that, you have my permission. but it's foolish. the one thing that i will point out is a big positive, the leadership in this market has been growth stocks all year. value stocks have been negative. growth stocks have been positive. and if you look at what's really still leading the charge on up days, take a look at xlv, which is health care etf, take a look at the qs, neither of them retested their 200-day. both of them found support at the 50-day. that tells you buyers are most eeg anywhere those names versus the rest of the market. >> pete, you can't blame some companies for looking at their stocks and say wow they've fallen so much. and we went through the list yesterday.
50-plus percent of the s&p that's in correction territory. despite what the overall average has done. year to date. big names, the duponts of the world. freeport mcmoran. wynn resorts. some well-known stocks are down, 70, 60, 50%, you can't help but look at some of those. >> i think apple is one of those names. these guys are talking about apple may be potentially being who stepped in at those levels, we got to 109.60 something yesterday. i mean that was an absolute beating. how about the folks getting out, scott? the huge volume of sellers that panicked down what a great opportunity yesterday. i didn't get an opportunity yesterday. i looked at apple, i never got it because we were sitting here on the air as the stock started to turn. we also talked about the rangebound markets that we're stuck in right now. and josh was just bringing up health care. if you look at health care, it stopped virtually on the 50-day.
yesterday it got through it by the time we closed, health care and the financials, the big legs of this market, they both held on to the 50-day. you look at the s&p, that bounced as well. we talked about it at the top of the show. huge sellers of volatility yesterday, selling that basically telling you, we think the volatility going to stay within a range, that's where we are right now. we got over 16, we pulled back. back under the 200-day. back under the 50-day and back to where we are right now, under 14. look for volatility to stay between 12 and 16. >> the only problem with those being leadership groups which pete and i are highlighting is that health care is selling four times book. financials just to give you some reference point, one and a quarter times book. it's clear farther in the way the most expensive sector, second most being consumer discretionary, which is close to four. if the leadership stocks are the most expensive stocks and you're not getting the lift in revenue and earnings growth that you need to justify where they've already been, that's what sets
up the sideways summer to continue. think that that's a problem that's been plaguing this market for longer than most people think. >> our next guest things we're going to do anything but go sideways for the rest of the summer and the rest of the year. remains one of the bigger bulls on wall street. one of the chief strategists at oppenheimer, you're sticking to 2311 on the s&p. a bull undeterred by global events or here at home. >> we've got to stick with the 23 when we look at it. have to think that right now we're working out a lot of the kinks in the system. so to speak. the most recent of course the chinese devaluation. but all of it points to greater stimulus, qe and progress around the world. probably the biggest hiccup we got to watch for is a further strengthening of the dollar as the fed begins raising rates. >> that's a real headwind. that's a big, huge push in the face. >> in terms of the dollar, yeah, but the market may already be discounting that. that's what all this, all this
business over the last few weeks, may have been about. when we look under the hood. by the end of the summer. it may very well be that the market had discounted what would be the effects of the dollar's strength coming up. you add more with the chinese, what the chinese have done, it was a surprise to a lot of us. that they did it when they did it when you look at it in hindsights, it makes all the sense in the world. they had to provide additional stimulus, they're doing it by giving a boost to their exports. >> john, it's josh brown. the median stock was down 15% on a year d.u.i. date basis. the median s&p 500 u.s. large cap stock. way before whatever china just did with the yuan. why are we pinning market weakness on that story, the dollar has been rising for months and months. and that's just something that
came out. -- the s&p 500 is up .2%. at least as of yesterday's close. what we look at it. any transitional market is tough to deal with but the risks and opportunities ride side by side and the problem is the rotational nature of this market. as you pointed out. half the desks are gone fishing at this point. is a what you do have is a lot of action in large caps, basically corporates buying their own stock. we'll get greater clarity when people come back. my guestimate is that everybody is afraid that the fed is going to raise rates, as we get closer
to it. they'll be more concerned if janet yellen doesn't pull the lever. i'm looking for 10 to 15 basis points as the first hike in september. >> not even 25? >> so 2311 with an s&p target for the end of the year, i say no way with energy down 11%. you have to have a significant reversal in those sectors. i think you would agree with me, what would be the catalyst to get those sectors to reverse higher? >> i think what would be the catalyst is the market is discount mechanism. recognizing the potential for growth to come online in 2016. and you have adventurous nature of buying early on that. i think we could see the market move higher. we're not getting competition from the bond market here. equities still look like the only deal and you've had a huge sale. josh was just saying, the median stock offer on 15%.
if pink shirts had a sale, 15% off or prado shoes, wouldn't people run to the store? >> macy's can't lose you another 15%. >> macy's may be a bad example considering the quarter they just reported. >> john thanks so much. talk to you soon. what about the notion that some of the stocks off the list that i read off. and many more that i didn't mention, are too good to pass up at the levels they've fallen to. which ones to you guys, dock, what are some of the names that jump out to you on this list? >> one is out on the list that jumped out to me. sandisk for one, sndk. joy -- >> off 46% from the most recent intraday high. >> and joy, i would say joy global. even though it's in the mining sector. which is upside-down. and none of these do i own right now, judge, but -- >> ralph lauren, rl.
i like these stocks. and i think if you're putting together a shopping list, and you buy some of these, six months from now, you're going to have a very nice return, i think you got beta in these names that are down this much. >> we talked about this one the other day. this is a stock that's been bashed. when you look at the last quarter, strong in north america. that's where their presence comes from and starting to get sot some growth. footwear and accessories. the beating it's taken in the low 40s. i haven't stek stepped in yet. i would love to seat options step in there. that would be the trigger for me. >> 48% the decline from the highs. >> buying stocks that are down 20, 30, 40% is not my strategy, it's not what i do. it works for people, it hasn't work historically for me in the past. that being said, i would recommend a name like consol
energy. it's being punished for the decline in coal. consol comes out on other side of this as a significant winner. on the debt side, go to the debt side with consol energy. that's where you're going to get the most bang for your buck. and john mentioned joy global, great example of a company you want to play through an options strategy, on the belief that the potential m&a could be a target. >> so many of the names continue to fall. what's taking place in the energy patch. coming up, shake shack, tesla both issuing more stock. investors are having different reactions as well. tesla is in the green by 2%. look at shake shack. up more than 8% what is the better play? a supersized edition of our blitz plays of the day.
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been trading? >> i think that's more a function of what they think they can get away with. i don't think it has to do with valuation, 80 versus 60. i think they want to get the deal done. you do a secondary, you don't want it to sit there. you price aggressively to get it done. in this case, the difference between this and the tesla one. the tesla one is about raising more money in order to continue to fund the giga factory and some of their plans to ramp up model s production. what shake shack is about is clearing out some insiders. and so obviously investors are going to react to the two. >> here's what cramer said about the tesla. i would love your reaction, it's so interesting to wave at both of these stories today are being viewed by the street. here's cramer from this morning. the most orchestrated job i've ever seen, boosted the stock in the last quarter. talks positively, gives a hint that there may be a capital raise, comes in with a common stock, not a bond. buys $20 million on it, i don't
know what to say other than bravo, bravo, this guy knows how to run a stock. >> he knows how to maneuver a stock, as well as financial engineering as well as sentiment. this was classic. when we've had bob peck on here talking about the opposite. how twitter guys have basically ev may be selling hundreds of millions of dollars worth of stock. in twitter and yet they if he cuss on a guy who purchases a few thousands worth of stock this clearly was a much better message. jim nailed it and obviously the reaction from the stock from tesla -- >> what's the message -- if it's got enough for elon, it's good enough for me? >> yes. >> it's not his job to help short-term traders p and l. if his job is the long-term and what's best for shareholders. this is what you're supposed to do. you raise money when your stock is up high and you do buy-backs when your stock is down low. it doesn't work that easily. but that's what's supposed to
happen. nd and clearly everyone knows this company is capital needs, number one and number two, the alternative is doing the financing when the stock is dropped i don't see any controversy -- >> this is a guy who has made comments about his stock price, he's been out there before. >> he's not afraid to say -- >> he's talked about their stock being way too high. essentially in thinking it's frothy and here he is making this kind of commitment. it says a lot about what elon is thinking about forward in terms of tesla. >> we love the reaction of all of you on twitter and social media someone asked the question of all of you. i'd love your reaction. what's the best sector etf to invest in for the next six months? we talked at the top of the show about what lies ahead for the market over the remainder of the year. pete you have an idea? >> easiest answer su know how much i like the financials, i think there's going to be a boost. >> so xlf? >> i would go with the xlf. >> right on the 50-day moving
average. >> yup. >> take away the move in interest rates. which has for the quarter so far, utilities up 8%, i take the other side of that and the sector that's up the most in this quarter is financials. financials are up 5%. clearly the market is in advance of what's coming here over the next three to six months. and i think you have to understand on the institutional side. a lot of money managers have played financials through the debt side. they've avoided the equity side. thee wanted to capture a lot of the hoarding of cash. >> are you saying the xlf? >> yes, and the reason why you're going to see flows that have been looking over the last couple of years at the debt credit side. and now they're going to look at the equity side for the opportunity. they're going to have the net interest margin expansion behind it as well. >> josh? >> i guess maybe i'm reading too much into this but the next for six months, meaning you need the money in six months, i'm going to tell you iei, the eye shares
barclays three 0 seven year etf if that's what the question is. >> what etf is going to perform well over the next six months. can we stick with that? >> the nine major -- >> six months -- i've never heard somebody phrase it that way. specific timeframe to try to make money in. with an etf. >> i would say xly, consumer discretionary. why? because we're going into the time when consumers are going to have the jingle they've had in their pocket all year. this is when it gets spent. third and fourth quarter. fourth quarter in particular because you've got thanksgiving and christmas coming up. when that happens, consumer discretionary names are going to be moving up xly. >> if i could add a last point. i think when you look at the sectors right now. look at what has been working. what are the leading sectors and expect them to continue to do so. what are the laggards, energy, materials, industrials, don't touch them. ? >> retailers, jcpenney and nordstrom set to report earnings, will they fall flat like macy's and cokohl's?
>> plus jon najarian seeing activity in a stock he thinks could be a takeover. 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.
we are back, we're taking you to the leaderboard in our halftime portfolio competition. josh brown is back in first place, stephanie link was there. they're neck and neck, jon najarian is third at 8%. you had a good runned a you're making a move. >> yes, i am, these guys have lane bryant, dress barn and more. it's asena, they've got 18% short interest. that helps me unusual call activity as well. so it's both a combination of unusual activity and inn this case, for a stock that's down 20 some-odd percent year to date. why are they buying upside calls? back to school with some of the justice and dress barn and some of the others? perhaps, it's a cheap retailer. as i said i believe consumer discretion is going to pick up in the second half of the year and that's why i followed the fast money into this one. >> what do you think of the trade?
ascena? >> sounds good. >> for the category it's in. >> it sounds strong. i like it especially when you you staring up at jon. i'm not going to go against his pick. >> you follow the action, cnbc.com/pro. you can keep up with the leaderboard. okay. oil falling more than 2%. sitting near multi-year lows, jackie de angelis live at the nymex. with the futures now crew. what are we barely over 42, jackie? >> we're still over 42 right now. scott. on track to break the six-year low. 4203 is the level we want to watch for at the close. jim, let me ask you about what's happening today. is this dollar action that's pressing us down or something else, you think? >> i think the dollar action should be doing other thing, because over the last couple of days, we know that china going to devalue. that should call into question the tightenings that we had priced in. and the interest rate markets are calling those into question. it seems like crude should be bouncing, but it's not.
i don't want to be the one guy who stands to pick a bottom here. it looks ugly. if it shows me a little bit of strength, i think it might be time to buy it, not sell it. >> jeff killberg, a lot people think we might crash 40, do you agree? and if so, how fast should it happen? >> i do agree. we should see crude under $40. look what's going on. strip out the supply, strip out the dollar conversation what is the focus here in crude oil? it's the shorts. have such a strong hold on the market. they're going to go under $40. you're going to see a plethora of stops. 2009, 33.55, look at $38 in the next couple of weeks. >> we'll be talking about crude on the online shoi and talking to ron paul about the global currency wars, 1:00 p.m. futuresnow.cnbc.com. don't want to miss it. >> we won't. >> we're glad gym's not doing it, either. joe? >> yes, scott.
does it go un$40? >> yes, it goes under $40. it goes under $40 and -- does it bottom there? that's the question. i don't know necessarily that it bottoms there. keep in mind, there's one week until front month expiration for the spot price of oil. i think that's important that could keep the pressure on. >> i would say the option pits have been telling you, no one has decided -- >> the equities. >> the equities. >> that was a good one. >> coming up, after -- >> after years -- after years with a hold, one analyst pulls the trigger and says it's time to buy microsoft. why not? and contrarian call, one wall street firm says the gold miners will shine again. does your desk agree? here at td ameritrade, they work hard.
wow, that was random. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this. have you touched the stuff?. it's evil. and ladders. sfx: [screams] they have all those warnings on 'em. might as well say... 'you're gonna die, jeff.' you hired someone to clean the gutters. not just someone. angie's list helped me find a highly rated service provider to do the work at a fair price. ♪ everyone can shop, but members get more with reviews, live customer support, and better pricing. visit angieslist.com today.
the drought is affecting at pg&e we've definitely put a focus on helping our agricultural customers through the drought. when they do an energy efficiency project and save that money they feel it right in their pocket book. it's exciting to help a customer with an energy efficiency project because not only are they saving energy but they are saving water. we have a lot of projects at pg&e
that can help them with that and that's extremely important while we're in a drought. it's a win for the customer and it's a win for california. together, we're building a better california. here's your cnbc news update for this hour. secretary of state john kerry expressing grave concern to his russian counterpart about a
sharp increase in separatist attacks in eastern ukraine. he urged an immediate cease-fire. in a telephone call to sergei lavrov, he voiced concerns about an iranian elite force leader visiting moscow. three people were injured when a ceiling collapsed at a minneapolis concert venue. according to the minneapolis fire department, the section gave way due to a broken water pipe. lawyers for the nfl and the players union return to court this morning over the deflategate. brady and nfl commissioner roger goodell are not at that meeting. and people from around the world have been looking to the sky to watch and catch what's considered to be the best meteor shower of the year, the perseid meteor shower happens this year at this time when the earth passes through the debris from the swift-tuttle comet.
dan and i pitched a tent in the yard with the kids, we laid down and we caught it, it was so much fun. >> it was excellent. go except the kids went to bed at 1:30 a.m. which not going to be excellent this afternoon. >> all right. sue, thanks. sue herera. too many calls of the day to bring you just one. which is why we're giving you four today, first up, cowan outperform on gopro. they initiate coverage. like the expanding product line, new software will increase ease of use. >> the desk is not in full agreement. when you look at the company. trades at about a 50 times earnings, trades about 27 times looking forward. they've got considerable growth in front of them. not just in the u.s. but going globally, you can see where the company could go. i think it's all about brand. everybody says it's easy to mimic what they've got. brand is brand and that's what's carrying cache around the world now and they've got the content element. i think nick woodman has an
opportunity to make some huge dough there. >> ha do you make of the upgrade at deutsche to newmont and baric. newmont is on the list we've been discussing, down 35% from its most recent intraday high. i presume baric has got to be down substantially. >> diamonds in the rough. not diamond miners, gold miner and deutsche likes these guys. because of the ramimbi and what's going on in china because. weakening of their currency. it had a nice pop, gold did over the past two or three days. today it's having about a 4% correction. i think it goes right back to the up side. bernstein upgrading yahoo, outperform from market perform. they say the current share price already reflects the worst-case scenario for yahoo.
here we are back talking about sum of the parts and what's going on in the future for yahoo. they're optimistic. are you? >> no. the thing with sum of the parts, is it's fine to take the view. but the market doesn't care and you're not bigger than the market. and the market is right this is a company that is trading based on what's going to happen with alibaba, where alibaba trades, i think the correlation is something like .9, which is basically it's like the same stock. and i don't see why all of a sudden that's going to change. just because some of the other businesses under the apple umbrella are trading you know, at a worst-case scenario. you have to tell me what's going to be the catalyst that separates this thing out. i don't know what that is. >> a good little pop for yahoo, up 5% and microsoft getting love from stiefel. two years from having a hold. so it's a big change of heart. we're joined oh the phone by brad reback. the analyst who made the call. brad, welcome.
>> thanks very much for having me. two years at hold, why get in now? >> the bottom line for us is that the windows business is bottoming from our perspective after a really difficult 15 and they're emerging businesses, especially their commercial cloud businesses, office 360 and azure are beginning to accelerate and the profitability there is really picking up. >> interesting line that you have here. no alphabet soup here. just good, old-fashioned execution. a little bit of a dig at google? >> well take it for what you want. this is a company -- >> i'm definitely taking it for that. >> this is a company in microsoft that has, i would say over the last 18 months, under new management, really gotten back to its knitting and what it's good at, which is delivering strong software to enterprises. while the nokia deal was an unmitigated disaster, no two ways about that, this is from our perspective, a gift that's going to keep on giving, as they take a business that was
operating $2 billion of operating expenses in 20 157bd a take it to zero on a burn basis over the next two years. >> don't we need to wait a little longer before we declare what sachin nadelia and the team is doing as good old-fashioned execution? isn't the jury still out? >> from my perspective, i don't think so this is a deem that's reinvigorated the office and server side of the business with their move to the cloud with office 365 and azure. and then on the expense side of the equation, you know c dpmpb o amy hood has done an excellent job of beating expectations, basically every quarter she's been there. since taking over guidance. and you know the moves they've made on nokia a couple of weeks ago cutting 7,000 heads. clearly leads you to believe that they'll easily deliver $le 00 million to $1 billion in savings in that business. >> let's go around the desk.
i think everybody has a good opinion on microsoft. doc, i'll go to you first, you may be the most outspoken in this name over the last six to 12 months. >> i still like it i think it trades into the 50s by year end. i know that's not a huge jump from where it is right now. but i think satya has done almost everything right since he's been there as far as reducing force, that's sad for the folks getting the pink slips, i know that, i'm not trying to gloss over that. nonetheless, i think it was a little bloated. i don't think the right steps had been taken in that regard. i think this is the right direction for microsoft now. >> pete? >> they talk about expense control. that's what brad was highlighting as well. he also in that note was talking about how some of the margins, the operating margins were going to go higher as women. i've liked the name for a long period of time. i'm with jon, think it goes through $50 a share. so $55 does not seem ridiculous to me. when you look at the balance sheet, the direction of this management team as opposed to some of the previous, think it's
the right team at the right time with the commercial cloud, being the leadership roext windows taking a second place to that. >> surprised that it didn't get through 50 after the earnings report. we had talked about it possibly doing that. interesting conversation that i had with a value fund manager. right after earnings where he said if microsoft continues to display the type of earnings that they've had over the last multiple quarters, it's no longer going to be value, it's going to go back to being a growth stock. >> totally agree with your point on 50. ways going to say three attempts at 48.50 failed. that's your trigger. you don't need to own it right now. when it gets through as joe says, maybe on the next earnings report. that's the buy. a monster move higher by monster beverage. shares up 38% this year. we ask our experts if they think it's a good pick for your portfolio. plus pete finding something unusual today in one oil refiner. stick around to find out what it is. hello. i am technology that is changing investing forever.
after yesterday's big drop and the steep recovery. we're asking where that leaves the bottom for stocks, goldman sachs is riding the buy-back boom. we'll have the five stocks that the firm says really pay to own. and then in this kind of environment, the markets we'll tell you where to find value in small caps, ahead at the top of the hour on "power lunch," back to you. time for or trader blitz, four trades on four stocks making news. the first up is cisco. a strong quarter under the new ceo. what some have termed reassuring. >> welcome chuck robbins. it's a good quarter. particularly as it relates to the domestic business, up 7% year on year. i think that's excellent. no job cuts. for the first time in multiple quarters. i think it looks good.
cisco returns above 30. >> doc, morgan stanley takes monster to overweight. >> yeah well they say they can do a share repurchase, judge. there's nobody who wants to be short this thing. short interest is down to i think 1% or something like that. so they've cleaned out all the folks that had been betting against them. now the stock just trading higher, morgan stanley pushing it pretty hard today. >> new president and coo for coca-cola. pete? >> this guy has been very instrumental in a lot of m&a that's been about going on with coca-cola. you would have to read through that that's going to accelerate with him in place and maybe someday being the ceo. because of that the spread they've gotten away from just the soft drinks into the energy drinks, into just about everything else in the liquid area, they're not going to expand into snacks but i like the growth model. monster was a great piece of that acquisition. >> what do you make of the kohl's quarter. the stock is getting absolutely blistered today. down 10%. maybe we shouldn't be surprised after what we heard from macy's. >> you know the department store
complex all of these names, none of them have anything good to say. so maybe it's not a total shock. but this is a stock that earlier this year had gone from 60 to 80. it's erased all of that. it's taking out 2014 lows in the process. it really looks bad. the most charitable thing is you have a 3% yield. >> macmacy's, kohl's, jcpenney. the read-through here? >> we've had unusual activity to the down side in jcpenney. the stock is it flirting with the $8 level. i know jim is still holding it, lebenthal in his portfolio. i'm not rooting against him but they've been lining up on the bearish side of the stock. >> pete continues to talk about it athleisure, think is the play. you continue to stay focused on it as it relates to retail. >> and the discounters. you look at tjx the way it's
performing, hitting new highs today. there are certain segments, it's all about what you've got and right now they've got all the right stuff. >> jcpenney has been finding support at $8 since a gap up back in april or may. it's tested the level several times, bounced off successfully this time not so much of a bounce, it looks like it's going to break through to the down side. if it does, the selling could pick up a hurry. i think the name is in trouble. >> egg prices breaking all-time highs on the bird flu outbreak. morgan brennan looking at the impact at the iowa state fair. >> hey, scott. well the iowa egg council may be giving away these eggs on a stick here at the fair. but you as the consumer can expect to keep paying higher prices when you go to the grocery store. we've got that story, when the "halftime report" returns. mornings.
so instead of waiting on hold, we'll call you when things are just as wonderful... [phone rings] but a little less crazy. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. all right. starting off the trading day right with a nice balanced breakfast, is about to get harder as the price of eggs could soon shoot up to $6 a dozen. morgan brennan joins us live at the iowa state fair for talking about how eggs have gone to $6 a dozen. ag stocks and the like have been very much in the conversation, certainly since during our show, almost 24 hours ago, when jane
wells was talking about the crop report. and you saw from corn to soybeans, wheat, whatever else, was on the nose dive down. >> i think when you look collectively at the commodities based on what area that could turn turn the quickest could be ags as relates to what's going on in the devaluation of the chinese currency. i think you also have in particular some deals to look at. cf just did a deal with chs lifting obviously cf. agrium is a name i would look at. getting away from pot ash. unfortunately in the world there is a lot of pot ash. >> the actual stock pot ash is down 27% year to date. >> so intrepid potash. potash. those are the names you want to say clear from. ag agrim is a name i like. i think there is more upside for
cf industries. i think that's a $70 stock. >> monsanto is interesting to me, too. this stock has had a tough year but it seems to want to bottom just above $100. i think this is a really easy trade to make. your stop would go just below $100, to break support, evaluate. this company will grow on earnings over the next five years, selling at 16 times forward multiple. a leader in the industry. >> morgan brennan is in des moines at the iowa state fair with that story, morgan, of these $6 a dozen eggs. >> reporter: yeah. that's right, scott. we're not there yet but we could be. right now egg prices are actually at record levels. for wholesale price of a dozen midwest large eggs is now 142% higher than it was in april when bird flu first really ripped through the midwest according to market research firm.
the usda forecast fourth quarter egg production in the u.s. will be 6% lower than year-ago levels and down 4% in q1. since facilities that were providing eggs to food companies were the hardest hit, businesses continue to be impacted by this, including shake shack which earlier this week mentioned that bird flu is affecting egg prices for things like custard and sauces. even as some farmers begin to get clearance to restock now, officials say this is going to take 12 to 18 months for u.s. production -- egg production to get back to normal levels. that's it. bird flu doesn't come back, which is expected to do this fall when wild birds flying south and carrying the viruses continue to come through the area. bb&t capital recently warned that egg prices could jump as high as $6 a dozen if we see the virus wipe out more flocks, that's particularly true in the southeast where you have producer that have yet to be
affected. not just eggs. turkey prices have been rising. you are even seeing supply shortages at some stores in the midwest where turkey deli meet is concerned. one area where we've seen poultry prices come off because of bird flu -- that's dark meat chicken which is at eight-year lows right now. that's in part because of import bans in places like china an north korea. analysts say that could start to affect production and pulling back on chicken production for companies like tyson, pilgrim's pride and sanderson farms. >> morgan, thank you. the iowa state fair. coming up, jon seeing unusual activity in a name that could suggest something's going on there. could a deal be in the works? >> yep. plus your game plan for the second half is up next.
three things traders are watching you might be missing today. pete, you're up first. >> valero. it is the one area in energy that's been a performer and folks are looking for this stock to potentially maybe even break out to the up side. the september 75 calls getting bought. over 5,000 of those trading. very aggressive buying, well over the open interest. definitely something to keep your eye on. >> okay. josh? >> pete mentions the financials. if you're just focusing on the four big banks you're missing a lot of winners in this space. i'm going to give you cincinnati financial. here's a name we very rarely talk about breaking out to an all-time high. this is a $9 billion market cap with a 3%-plus yield. it is just one example of several financial names that are not paying attention to the rate debate, just grinding their way up. >> dr. j. >> very strong activity in hartford, hig. it began in mid-july. it really accelerated today. they're buying very short-term options that have like that much time before they're right or
wrong. when we were getting ready to do this one we thought it might even get halted before it went on air. the stock popped up to $51. we called the company, a number of others called the company. the response was a little different, judge. usually they say we do not comment on things like that. . right? like, for instance, a takeover speculation. instead they said "we cannot comment." now that might just be semantics by me. reading into what they're saying. but when they say they "cannot comment," that's different than saying "we do not comment." >> we're going off nothing else but rumor, speculation, phone call to company interpreted by you as fishy -- >> yes. what did we say to the people that follow us in the trades on the blog and things? we said we'd take some off on this pop. it popped to almost $51. now it is right around $49. if something happens there's speculation all the way out to september at the $50 strike that
it goes higher. we'll see whether it is a rumor or a flash in the pan. we have about a minute to go in our program. three hours left in this trading day. based on what happened yesterday, joe, who knows what the rest of the day holds. >> so -- >> what's the most important thing to keep an eye on? >> i just think this issing it. oil down $1.06 but yet the s&p futures are now near the highs on the day. josh talked about it before, pete and jon have talked it -- consumer discretionary is coming back strong, retail sales not so bad today. we've been waiting all year for this. maybe the low price affect is going to trickle down to the domestic consumer. they are going to go out and spend on retail. >> you see what joe's talking about in the chart. look at xly verse us the price crude, it is almost a perfect inverse correlation over the last year. it doesn't means things have
picked up necessarily for the companies but the stocks are already getting the benefit of the doubt. risk there on a crude pop, how much do they pull out of those discretionary names, i'd be more focused on that than the continued up side. that does it for us. thank you so very much for watching. enjoy the rest of the day. "power lunch" begins now. >> announcer: "halftime's" over. the second half of your trading day begins now. thank you very much. tyler mathisen here. "power lunch" welcomes you today after yesterday's big drop. we're asking was that at least a temporary bottom for stocks? a top quality firm has a new note attracting a lot of attention this hour, calling for investors to follow the money and buy companies that are buying back their shares. we got a list of companies most likely to be involved in buybacks. forget about new coke. we're talking about the news at coke. the company naming a new president and chief operating officer, james quincy is now the second-highest ranking executive