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tv   Fast Money Halftime Report  CNBC  November 3, 2016 12:00pm-1:01pm EDT

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musk will onus from the baron conference. that is exclusive. be sure to tune in for that. crazy day for tech, iac up almost 50% >> facebook under pressure. tech the worst-performing sector in the s&p. financials the best on higher yields. there's your picture with the dow and s&p higher. the nasdaq underperforming. >> thanks for being with me on "squawk alley," sarah. now it's time for the halftime report and scott wapner. >> guys, thanks so much. our top trade from post nine at the new york stock exchange today is face plant. why facebook shares are selling off today, despite a strong earnings beat. is it the best sign yet that tech is in trouble? with us for the hour today, john najarian, and our resident shark, kevin o'leary, the etf investments chairman. i want to kick things off with facebook.
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you have a strong earnings report and the stock sells off. what is the bigger message, perhaps, in this move today? >> i think facebook just gave you the green light to take a profit. if you've been long this stock for a while, and many people have, it's become one of the consensus longs of growth investors and growth fund. it's a huge weight in all the passive averages and it's very popularly traded at all the brokage firms, all the online brokerage firms released this data. everyone's been long facebook. if you have for a long time and your time horizon is short, they just gave you permission. number one, 2017 will be a year of big investment for us. that's code for, don't expect the same magnitude of earnings beats and earnings growth accelerations that we've shown you for the last couple of years. the other thing i thought was notable was that they talked about, look, at a certain point -- >> ad revenue growth rates to come down meaning theful ing th. >> facebook and google have this duopoly over online advertising, they're 85%, and they're more
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than 100% of the growth in online ads. so at a certain point, you can't grow at the same rate you have. they're talking about 1.7 billion users. there aren't another 1.7 billion waiting. so i think they gave you the green light to say, all right, i've done well, i've made money, now maybe i don't need to be long. >> maybe the green lights, kevin, are in google and facebook are the tells as we ask the question at the top of our show today as to whether tech is really in trouble. nasdaq's down seven straight days now. >> i don't think tech's in trouble. i think advertising's in trouble. last week, right here on cnbc, a new index was launched called the cnbc iq 100. a machine reads patents and assigns them to the companies. the theory being, if you have more patents, you are able to keep your margins higher longer. guess who's not in that index? facebook. facebook does not actually have a lot of patents. it's built a massive platform it's able to monetize through advertising. 2.5% gdp growth next year, best
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case, maybe only 2, a very difficult time to glean more advertising dollars you have to domestic markets. so, unfortunately, what you're really seeing here is the company admitting it's going to be hard when most of its advertising revenue comes from domestic markets to make these numbers. and i agree with this concept of, when you start signaling, we're putting a lot of new stuff through the income statement, that never ends well. >> just wondering, doc, is whether tech has gotten ahead of itself. the message of the market of alphabet, of facebook, and some of these other tech names that have had a really bad week. you know, apple was down 3% or so. you go across a whole array of well-known technology stocks from chips to internet, et cetera, and they've been hit recently, raising those questions as to whether this better-performing sector is rolling. >> right, and then you have some great earnings from like qualcomm today, just to throw that one out there, too. there were so many examples, judge, of companies that people were betting on, because they're great companies, because they
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may unique chips like qualcomm, like nvidia, that have absolutely been on fire this year. and the question is, and i think you and josh started it at the top, when do you take some profits? doesn't mean you have to get short these stocks. and i doubt that josh was saying that. i don't think he said that at all. i think he's saying, it gave you the excuse to take some profits. >> people are clearly taking profits in tech. as i said,s that dak's been down seven in a row. >> it's one of the few places you have profits. most of the s&p sectors are up this year, but most are up less than 5 or 6%. it's not as though you have all of these areas from which to say, i've done well, election coming up nah week, fed meeting right after, i want to lighten up. you'll probably lighten up from your winners, that's human behavior. the big winners are in technology. >> that's been the story over the last few years. if you weren't in utilities and health care, you didn't make any money. so are consumer staples. the same thing the year before. if you weren't in utilities or
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yield-driven stocks, you made no money. so how the market's met new highs, the churning has been underneath. a lot of it's driven by the algo players. so microsoft doesn't deserve the valuation that it has. sure, the new ceos improved some things. a lot of that was the groundwork laid by steve ballmer, because it's impossible to change things at a company that quickly for the time he's been there. >> if you lose these leadership names. let's say apple has come back, that starts to roll over, amazon's earnings were a disappointment. that stock got hammered, alphabet gets sold off. what happens to the leadershspa large? >> leadership finds someplace else to go. we'll see it in bank stocks, in financial. you'll see pickup in trade dramatically. i think you mentioned this the other day, i agree. we'll have the new brexit in er terms of the trading volume. you'll see this major rush for
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new high-yield issuance, and that will drive the bank's earnings again. i think that's not going to be sustainable through next year. there's always a rotation underneath. we'll see it in, also, you'll see it in equities, but you know what, it's not going to translate into trading profits. >> i'll tell you very quickly, where this money is rotating to. i think the biggest story of this week is what's happening in yields, in a steepening curve, the explosion of new creations for the t.i.p.s. etf. there are stories about the base metals from a technical standpoint, now starting to break out, both relative to the s&p as well as on an absolute basis. you've got multi-year down-trends being shattered. things like aluminum, zinc. these are areas that people have ignored. we're now talking about health care costs skyrocketing, talking about gasoline prices higher. labor, wage inflation, these are
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all new stories for the market and i think we're see floegs, go to some areas of this market that represent a bet on higher interest rates. >> let's get another voice into the conversation. rich greenfield downgraded facebook to neutral back in july and he's with us live today from new york, right here in new york city. rich, good to see you again. >> thanks for having me, scott. >> a little early, i guess, gu correct. >> we were really concerned that growth expectations for the street, especially the massive beats that facebook were having, were really hard to sustain, and the reason we were concerned was looking at their shift to being more of a video company. and if you shuift to more of a video company, it's really hard to see how you monetize at the same rate that you've monetized through the legacy news feed. and i think facebook is still working on what that's going to look like. and i think that's part of signalling the slowdown into 17. >> part of the issue may be, i don't want know, were shares
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overcrowded? andrew left of citron made that case. >> it's a great company, it's a $350 billion company that everybody loves. it's still a great franchise. it's going to have a great business. it's going to have a significant impact on the media space. but as you look into next year, they're trying to chase snapchat. they're making the camera first. they're basically making it, just what they did with instagram stories. they're going to try to create that camera-first experience, which sounds a lot like an app i know called snapchat. you're pivoting technologically and doing what happens because of the snapchat engagement. you have to go through technologically with the product. and you monetize it the way facebook has monetized historically. that's going to be a challenge for the company to keep up this
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level of growth. >> rich, it's josh brown. so they're talking about monetizing video and they seem to want to push more into this area. that's not as high a margin business as what they've been able to do on mobile advertising, et cetera. that requires like a lot of infrastructure investment. maybe even paying talent. should we be looking at this company now and start to value that part of their future earnings, like we would value a traditional broadcaster? >> well, it's a great question. i wish we had jimmy fallon on right now. jimmy fallon puts his content up on facebook, gets tens of millions of views and gets paid nothing. the question is, like, how is -- how long is that sustainable for, as you saw with vine, if you don't pay the talent, they ultimately go someplace else. i think talent is very frustrated with facebook not paying them. and yet facebook having a $350 billion market cap. they're starting to say certain people little bits of money. but i think it's a great question. they don't want to be valid like a media company, they want to be a tech company. the question is, how, exactly,
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when you get into, you know, four, five, let alone 30 or 40-minute video, how are you going to monetize? how are you going to compensate the talent. and is the profitability going to look like the massive margins they get on their traditional business, where they really haven't shared that revenue with creators. >> rich, it's a damned shame they have earnings. so they're also damned if they do, damned if they don't, because they've got to get into media, because they can't not be there. because that's going to be the attraction ultimately for the user to stay there and be engaged for longer periods of time. >> it's a really important point that you just made. they've been so successful. the news feed has been this printing press over the course of the last several years. and it's exploded, but now trying to pivot into the this business of video doesn't really have the monetization. are they going to run pre-roll. sheryl seems opposed to pre-roll. if you go into mid-roll, do you
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stop in the middle and say, we're going to skip to commercial break for a few minutes of unskippable ads? it's not clear how you monetize longer form video the way they've monetized in the past. it's an intellectual challenge right now. >> for someone watching now, maybe they're in the stock and they're going to stay there. but if you don't own it here, rich, what is the good entry point? henry blodgett was on the last hour saying, you should celebrate their willingness to invest the way they are. jim cramer earlier this morning said, and i quote, facebook's the greatest gross margin free cash flow story of all time. i'm not backing away from it one bit. so what's the right move? >> look, everything has a price and a value. you know, we were huge fans of facebook stock for the last few years, up through july of this year. we're looking for a better entry point. look, i think, we're always re-evaluating where to stand. and i think right now with numbers having to come down across the street, a lot of people trying to justify next
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year's growth versus valuation, i just don't think the stock is a compelling must-own here. and i think there'll be a better point to own it. >> rich, thanks for joining us today. we'll talk to you again, soon. the shares are down more than 5%, just around the lows of the session here. what do you do with this? >> one thing we didn't touch on that they brought up in the call, facebook live. now, the facebook live model, it's only a few months old, but i'll give you an example. in the etf industry, every one of the companies, every manufacturer has gone to compliance to ask them, would they allow us to broadcast tickers and descriptions of new products on facebook live? not one compliance department has agreed to do this yet, but this is a brand-new model to get to customers. and frankly, if i could do it, i would do it. and i think there's a model there where people like me get in there and advertise on their own channel, actually embedded with any information they can that's beneficial to them. and the platform's there. i tried a facebook live last
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week, just talking about financial literacy and families, 110,000 people were there live. this could get to my head. this is a big problem. >> it's youtube, but with a more live feel than a prerecorded video. >> josh, how else can i get to my customers? any other faster way than that? >> halftime report, sir. >> you have by all accounts a great growth story. a juggernaut. the earnings were great, it reminds me of under armour, of the other day, where the earnings were good, it's just -- they have a competitor. >> their growth rate. >> you have to revalue -- >> but they take a break for a few headquarters. they don't have to exceed everyone's expectations every quarter forever. some of the great stories throughout history have said, all right, we need to pause here, to make some investment. >> no, no, no, that's the point i'm trying to make about the under armour. you just have to revalue, maybe,
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what the stock should be, based on the fact that the growth rate might not live up to the expectations that investors had. >> major differences. under armour is not the gorilla in the room. facebook is. number one. number two -- >> well, there's google. >> number two, facebook has executed flawlessly. under armour, far from flawlessly. coming off one good quarter of metrics. the prior quarters had not been so good. under armour is much -- it's valued more egregiously than facebook. and i don't know that facebook's egregiously overvalued. so -- >> i'm simply talking about the growth rate of a great company coming down and how investors need to revalue the way they think about the stock. >> i don't think so. i don't own facebook -- >> they told you that the ad revenue growth rate is going to come down meaningfully and they're going to invest heavily in the business. >> and they should. and i applaud that. >> one quarter of every year, amazon tells you the same thing.
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it's called resetting expectations. it's responsible. >> i want to see them do that. if i own facebook, this would not shake me out of this. >> rich said we're looking for a better entry point. we would all like a better entry point. one of the places you do that is go to options and sell out of the money puts. but that's not the advice here right now for the rest of the audience. i would say, this was a significant beat on revenue and bottom line. same thing they did back in august, beginning of august, when they had that quarter and the stock ran $14. this creates an opportunity -- >> let me right now start the institutional drum beat. if this big monster is slowing, time for a dividend. it started in the same way apple started institutional investor says, if you're going to slow this down and it's not going to grow any faster than the economy, send me a dividend. start today. >> icahn versus zuckerberg.
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>> at least it stabilized. it could be much, much lower. >> i disagree. >> you should disagree. i would rather get my capital back sooner, before i die. >> meantime, you've missed other stories that have returned capital if you had sold the stock. >> you're going to give me google? i give you domino's, my friend. it beat it. >> as you can tell, i don't eat a lot of pizza, but thank you, anyway. >> you can get your cake and eat it, too. follow me into the wild world of dividends, you'll love it. coming up, a man set to play a key role in shaping the next congress is with us next. ahead of the freedom caucus, representative jim jordan is live in the battleground state of ohio. don't want to miss that interview. also ahead, a big list of movers today including qualcomm, whole foods, fitbit, and starbucks. more halftime in two minutes.
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what are you doing? getting your quarter back. fountains don't earn interest, david. you know i work at ally. i was being romantic. you know what i find romantic? a robust annual percentage yield that's what i find romantic. this is literally throwing your money away. i think it's over there. that way? yeah, a little further up. what year was that quarter? what year is that one? '98 that's the one. you got it! nothing stops us from doing right by our customers. ally. do it right. let's get out of that water.
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all right. we are back. i want to bring your attention to oil right now. take a look at that, breaking below $45 a barrel. it is a five-week low. how concerned do we need to be if oil continues to go even marginally lower? >> very! you'd need to be very concerned. even though it's good for, of course, consumers, we've always talked about that, and great for the airlines, great for
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truckers, who it's not good for, of course, are some of the banks that have the debt out there. the guys that need to refinance, in particular, in the bakken and marcellus areas. but i think, judge, we should all be focused in on november 30th if vienna, austria. that's, of course, the opec meeting. this feels eerily similar to two years ago, where oil was rolling over at $78 a barrel or $80 a barrel. going into that meeting and no one expected anything and they didn't get anything, but the oil market just fell apart. this is kind of like that. >> the 8th, election day, five days away if investors are not only focused on the race for the white house, but also the race for control of congress. john harwood joins us from ohio with one of the most influential conservative members of the house. john? >> reporter: scott, i'm here in lima, ohio. this is trump country, with a very formidable figure in the house, as you mentioned.
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not just because he was a two-time nca wrestling champion, he's also the chairman of the house freedom caucus. very powerful block of republicans in the caucus and a lot of interest about where the republican party is going after the election and where the house republicans are going after the election. congressman, thanks for being with us. >> good to be with you. >> you had a meeting yesterday that got a lot of attention of the freedom caucus. and everyone's focused on whether paul ryan is going to remain the speaker if you guys keep the majority or not. some dissatisfaction within the freedom caucus with him. tell me about your meeting yesterday. what happened. >> i don't think everyone's focused on that. i think everyone's focused on who wants to be the next president. we want that to be donald trump. that's what these folks are foxed on. they want donald trump to be the next president. they want republicans to rain up and down the ticket -- >> understood. >> -- so we can start tell the voters what we're going to do, getting rid of obamacare, getting ahold of this ridiculous spending, putting in place policies that are conducive with economic growth and help with the wage stagnation that so many families have had to deal with
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the last several years. so that's the focus. look, we have conference call with our boards when we're on extended breaks. we thought with the lame-duck session coming up and with what looks like now a great chance that donald trump will be the next president, the good policies we have to be enacted when he's the next president. we were talking about that yesterday. >> how much dissatisfaction there in the freedom caucus with paul ryan? >> we are not focused on that. we've got five days. we've got this major election. who's going to be the commander in chief to have the greatest election -- >> but your nominee. your nominee, donald trump, said a couple of weeks ago that paul ryan was a weak and ineffective leader. do you think he's got a point? he was talking about the way that he kept his distance? >> the next five days, we'll be focused on what we can do to help 80%, 80% of this country thinks that washington is rigged against them, not standing up and fighting for them. donald trump is giving voice to
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that 80%. we've got to make sure that he wins so we can begin to do what needs to be done to help put this country on the right path and do what families want us to do. in fact, what we told them we would do when they gave us the privilege of serving. that's what we're focused and need to continue to stay focused on over the next five days. >> mike pence, your former colleague, vice presidential nominee -- >> good man. >> -- who has campaigned here, gave an interview the over day with "national review" and refused on three different times to say that he thought that paul ryan should remain the speaker after the election. are you willing to say he should remain the speaker? >> that's a question for down the road -- >> so you're not willing o say he should remain the speaker? >> he's a good man and a friend, but we're dealing with trying to get donald trump to be the next president of the united states. >> you're not committed to supporting him right now? >> i'm committed to supporting donald trump for the next
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president, that's what i'm committed to. >> i talked to one of paul ryan -- one of your colleagues and a friend of paul ryan who said the freedom caucus can deny paul ryan the 218 he needs to be nominated, to be elected speaker on the floor. and that he thinks that paul ryan will be well-advised if you keep the majority to declare victory right after the election, and say, i don't want to be speaker anymore, and step away. do you think that is a potential scenario. >> you would have to ask speaker ryan. again, i think what the american people care about. 60% of americans think they're better off than their parents, but their kids won't be better off than them. when 60% of the country thinks that the american dream is no longer possible for their children, that is a problem. that's what we've got to focus on. we've got to get a handle on this $20 trillion debt. we've got to build a wall and fence so our border is secure. we've got to get rid of the tax code and put in place a tax policy, a regulatory policy that lets small business owners create jobs so people can have
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rising wages and pursue the american dream. those are the kind of things -- we have to get rid of obamacare. we've got a 27-year-old son who's looking at his premium increase, a healthy guy, who's looking at so many families who have to deal -- that's got to be the -- and we frankly, we've got to restore equal treatment under the law. right now, this double standard, where there's one set of rules for you and me, and yet if you're hillary clinton, there's a whole different standard that the justice department applied to her, that's got to go. and that will go when donald trump's the next president. >> last thing before i let you go, and that is that -- i know what you don't want to talk about, but what i'm not hearing you say is that -- and i'm not hearing it from donald trump or mike pence either, that paul ryan and his leadership are essential to achieving the goals that you're describing. you're not saying that it has to be paul ryan to leave this house and achieve these goals? >> i'm saying that is a question for another day. that is a question for the house republican conference. and that is a question that will
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be dealt with in due time. i think paul ryan is a good man, he's a friend. but that is a question for later. right now there is one focus. electing republicans on election day, making sure donald trump -- think about what the justice department did, where the subject of the investigation husband got to met with the attorney general just days before the subject of the investigation was interviewed by the fbi. they gave immunity to five people. three of those five take the fifth in front of congress. when have you ever seen something play out like that? so that equal treatment under the law is a hallmark. it's fundamental to what this country is about. and when we deviate from that, that's a problem. donald trump will not allow that to happen with his justice department. that is a huge issue. americans are sick of the double standard. that's got to change. that's why we're going to elect trump as president. >> congressman, thank you very much. scott, all i can say is, he didn't win the nca championship by giving in easily. you saw that demonstrated right here. >> john, i was going to say, maybe it says everything, in fact, that one of the most
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powerful congressmen on the hill was unwilling to answer your question, not to mention the five or six follow-up questions that you tried to give to the congressman, was unwilling to go there. >> i do think that that is significant. paul ryan is someone who those of us who cover washington have assumed has got a strong grip over the republican caucus. remember, he was drafted when john boehner was forced out of the speakership with help from people like congressman jordan. paul ryan took over and we are not hearing a unbreakable commitment to him. obviously, we'll see what happens after the election, if they hold the majority, we assume they will. but what happens is very much up in the air. and what paul ryan chooses is very much up in the air, because this is somebody who if donald trump loses, may want to run for president himself, scott. >> good stuff, john. thanks so much, john harwood live for us today in ohio. so, the lack of answers notwithstanding, when you look at the makeup of congress, how
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things could shake out, but the way that the market is trading now in this creep up to election day, it's just clear to me that nobody wants to take any kind of bet one way or the other. look at the activity in the mark. i don't think volume is doing much today. you could see the dow is, what, up six points. people are sitting on their hands, waiting to see what happens, because it's still unknown. >> why would you? you're within the margin of error for the polls. forget about brexit. brexit is not comparable. that was a concept that most people as the survey showed afterwards didn't understand. this is more black and white. do you like trump? like hillary? hate them both? whatever. but it's also the aftermath. it's congress. and then if the republicans hold on to the house and senate, what happens to paul ryan? he's generally viewed favorably as a voice of reason. do you go far right of that to this. rodney king, can't we just all get along. >> staying out of the partisan
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debate, can we agree that the margin of error in these polls has been creeping up year after year. it used to be 300 basis points, 3%. i'm going to argue with you guys right now that the error rate now on the poll of polls is as high as 7%, particularly the state polls. and the way i'm going to trade this thing, and i've been all week long since last week raising cash, raising cash for the domestic portfolio. for u.s. stocks. my thesis is, i'm going to bet 50/50 that trump gets in and the market corrects 5% that day. it's going to be the wednesday morning, you don't like the brexit analogy, i remember what happened there. and i think stocks will sell off hard and it's going to be the buying opportunity of 2017 that may determine your performance if you have the cojones to step in and buy multiple sectors. zpr but 5% is not a buying opportunity. >> another 5 gets you into serious correction zone and
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that's what i'm calling if trump gets in. i'm not saying good or bad for the guy, i don't care about that. but when reagan got in, the commentary, how is it possible that an actor cowboy got into the white house, what a disaster, woe is me. you staid long 24 months, you made a ton of dough. and i think that could be the same case -- forget about the trump thing, yada yada yada. >> but john, by virtue of doing this interview today, he just raises a good issue of potential chaos in the capital. >> exactly, and that was my other point. >> it's a different chaos to worry about. >> they're not going to have a civil war in the republican party if trump wins. they're going to be focused now on going after hillary. and forget about if she wins. look, it will be brutal if she wins. >> correct. >> so, look, i think the market doesn't like either outcome at this point. >> what's the trading opportunity, josh, on wednesday morning? >> you say 5% barclays, says 11 to 13%.
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and they're doing that quantitatively. they're looking at positive headlines, how markets are affected. they think they can actually get in the presidency, creates an even bigger buying opportunity. but i'm with you. i think the trade is buy, not sell, if you get market chaos on the heels of the election. >> i think you're not necessarily correct that there's not going to be. let's assume that, let's just say if trump wins, you're not going to have, everything's just going to fall back hunky-dory, everything's going to sing kumbaya in the republican party and fall in line -- that is not going to happen. >> trump did something they couldn't do on their own. mitt romney couldn't get elected president. if trump gets elected president, they missed the calling that he heard and now he deserves what he got. he's now the president >> do you think the people that went against him, judge, are basically the ones that are hung in effigy. the people that didn't support him. ryan's on that list. ryan's basically saying, yes, i voted for trump, but wouldn't go out and campaign with him.
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>> it's a bad wednesday morning meeting between the two of those guys. >> do you think ceos who have billions of dollars to allocate, who have mergers they want to do will say, hey, i'm super comfortable with this guy wlost never been an elected official. >> don't go partisan. we know where you are. >> i don't like them both. i wake up every day and at some point during the day, i spend too much time worrying about, how the hell did we get here. >> if it goes down 13%, are you going long u.s. equities on wednesday? >> i will trade it. if hillary gets elected it pops, i will short it. the good news is, i don't have to declare right now. i've got my list of what i want to buy. and if the right opportunity, depending upon how memotional i is, i will go in long or short. >> what the market's saying, very quickly, sorry to cut you off, i think what the market is saying is that it doesn't like hillary's policies, but understands what's likely to happen and what she's likely to get approved, which is very
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little. trump's policies are massive slashing of taxes, combined, concurrent with a massive fiscal stimulus, who knows how that will be paid for. and i don't think the market believes any of that is likely, either. >> when reagan got in, the exact same movie, it was a disaster, oh, no! >> the question is, can he get it through. >> this is the last point. >> we've been buying portfolios -- >> actually, we're not going to go to break. >> we're buying vix calls, selling out of the money vix calls. we've kept rolling that up. that trade, judge, the vix is up 40% in the last four days. so, if you have that kind of protection, you can do exactly what everybody on the desk is saying. then you can have the cojones to buy on a big dip. >> the second largest position. >> cojones? >> no, vix. i've been accused of that,
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though. >> all right. european markets are just closing. seema mody has that story for us. hey, seema. >> hi, scott. just how politics are driving global price action. here's another story. the brexit once again in the spotlight for the global investor. the uk pound rallying after the uk's high court ruled that the government cannot trigger article 50 without a vote from lawmakers in parliament. it's a decision that disempowers prime minister theresa may and potentially delays britain's divorce from the european union. while the decision would likely be appealed by the supreme court in december, there are now questions around whether article 50 will be invoked in march of 2017, as may intended. potentially slowing down the overall process of the brexit, and that's why stocks in europe are rebounding. important to know, though, that may's party, the conservative party, do have the majority in parliament. in terms of stocks that are on the move. the banks are witnessing their first positive day in five. more halftime report with scott wapner after this short break.
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all right. here's what's on deck. what black swan author and big thinker is seeing from his crystal ball for next year. plus, facebook's big slide. has the digital ad market finally topped out. and with just days now until the
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election, new data on how millennials plan to vote and it may surprise you. "the halftime report" back right after this short break. they may want the latest products and services, but they demand the best shopping experiences. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers
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and banning edibles that would appeal to a child. raising a teenager, that regulated system makes a lot more sense than what we have now. plus, 64 taxes marijuana to fund priorities like after-school programs. personally, marijuana's not for me. but my mind's made up. i'm voting yes on 64. but my mind's made up. he's the drug company big shot who raised the price of a lifesaving pill by five thousand percent. said he wished he'd raised it more. prop sixty-one targets drug company price-gouging to save lives. the drug price relief act will save californians nearly a billion dollars a year. join the california nurses association and aarp and vote yes on sixty-one. the drug giants won't like it. and he'll hate it. all right.
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welcome back to "the halftime report." i want to show you where the markets stand. you may look and say, they're just muted declines. yes, in fact, they are. however, if you look at the intraday chart, you can see a steady sell-off in the stock market. rich peterson e-mailing me today from sp global saying, the s&p 500, if it closes down for its eighth consecutive day would be the largest consecutive downturn since october of 2008. that's the kind of mark it's been lately. well, value investor sirastat. has his eye on some. whole foods eliminating his co-ceo structure. good to have you here. you own the stock? >> we do. we have not been adding to it. we've been waiting for this earnings release, to see where the company is going. they been repositioninging, margins were improved. it's a hold to this point. not sure i'm going to start adding to it. >> what about qualcomm? beat on the top, the bottom
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line. it's also buying kpp. >> one of my favorites. i've owned this for a long time. they're firing on all cylinders. all their deals almost done. it's 14 times earnings, with 3% dividend yield. this is definitely a buy. >> guys what do you -- do you have thoughts here on qualcomm, whole foods? >> sirat, it's josh, how are you? >> what's going on? >> let's talk about qualcomm. what's the next steps for this company, assuming they be actually assimilate these businesses and how do they now communicate to the street about what they are? does this really become the global semiconductor giant in every sector across the globe, and won't that result in a discounted multiple? >> 14 times earnings still a discount to the market. and i think you've got to see them come back to that. they're going to be so well-diversi
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well-diversified, especially now in the auto cycle, in the home, as well as in wireless. so that, in effect is going to give them the next growth rate. and even if they stay, josh, at 14 times earnings, high single digit epps growth with a 3% dividend yield, i would hold the stock for another three five years. you're still going to be at a discount to the market multiple, but great cash flow and growth. >> i look at you and i just see, like, hundred dollar bills fluttering from the ceiling. you look great. >> let me ask you about whole foods. what's the deal with the management change there? anytime i see a ceo, co-ceo leave, get whacked, leave for health reasons, or i need to spend more time with my family win see bad things happen. >> i think the co-ceo thing didn't really work. it's hard to have two people make decisions. they need to figure out how to grow margins. how to be the right place for the right person and not just be it for everybody.
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and that's the issue that i think this ceo will have to deal with. that's why i'm not as aggressive on whole foods. i think you've got some time to wait here. >> a good run for airlines lately. what's the story here? you own many of them. delta, american, united. >> we do. and this has been a painful trade. it's been nice in the last month. but scott, what you've seen here, in the bing of the year, you had a couple of issues, oil going below 30. that really hurt the airlines, people thought that was forecasting a recession. then you had brexit, that was going to be global travel. but what the airlines have done is something very smart. they have cut capacity and now have started to raise prices. so for the first time, they're actually comping next quarter is going to be what we call positive passenger revenue. and that, i think, will take these airlines that are turning at seven times earnings, positive cash flow, dividends. delta almost has a 2% dividend yield. and i think going into next year, they're going to get some earnings acceleration. and again, multiple at seven times. so if you get expansion, great.
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but if you don't, the stocks are going to kind of ride along with it and you'll get a 10, 15% pop, at least from here, from the bottom. >> weiss? >> airlines used to be like beer, you only rented it now. now you can be owners of these for a long time. and delta is almost an o'leary stock, because they're giving back so much cash to shareholders through a dividend, through buybacks. >> he is a wise king mosabi. >> yes, i have zero basis. it's a good trading vehicle, 36 to 40 if it holds 40, pardon the technical jargon, josh, i think it breaks out. very, very cheap, very stable, but there's a segment of the population that will never own airlines. >> coming up, tom brady's take on athleisure and that is coming up after the break. the pursuit of healthier.
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what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley patriots quarterback, tom brady, helping under armour celebrate the opening of its first store in boston yesterday. he commented on the company's growth. >> and what he's created over 20-plus years in business is really amazing. so, i mean, i think he's living the american dream and to start, you know, at maryland and think of one shirt and how that could transform the entire sporting world is pretty remarkable. >> well, the he, there, of course, was kevin flank, founder to have under armour. we've talked about growth concerns in the athletic apparel space, athleisure. >> and margins.
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>> margins. the disappearance of sports authority and what that's meant to all of these brands. how do we see it here? >> the whole industry with the exception of as steve has accurate called foot locker and some of those stores that have the multi-product offerings, judge. the individual product offerings, those are not doing well. so even lulu. lulu got a very nice pop to almost 60 bucks a share last week and has now pulled back into the 55, 56 range. so it doesn't matter. athleisure is not exactly where people -- >> it's fair to say it could be a seasonal lull, though. >> could be. >> you could see an uptick in the holiday. >> anybody like the theory that this sector can't get amazon easily. that's why they're opening all these megastores. you want to try the goods, you want to see them. you want to feel the texture. >> nike story, footlocker story, people actually enjoy their time there. >> people are investing heavily in their retail presence. >> if i said to you, okay,
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between under armour, nike, and lulu, under armour is down 19%. if you had to buy one of those stocks today, which one would you be, kevin buy one, which up. >> frankly, the numbers have been so erratic on the emergencien, one guys up one, 90 days later, i can't believe the volatility. none of the analysts get it right. so if you like the sector, buy all three. market cap weighted. >> take a quick break. halftime back in just a couple of minutes. will your business be ready when growth presents itself? american express open cards can help you take on a new job,
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good for a door. and a network. comcast business. built for security. built for business. welcome back. we are focusing in on talls today. silver town more than 2%. gold is lower as well. anthony, what's your take? what's going to do worse? gold or silver? >> you know, i actually think gold. because silver has a lot of industrial uses for it. it's expected to increase wii bi20% by 2018. both are county, but the trend is higher and yes, silver is taking a break, but it's more a technical move. >> jeff, you were watching the met dahls as well. which are you focusing on? >> looking at gold, $1300. these are historic times. we're going into the jobs number
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tomorrow. h historic election on tuesday. i don't think you're going to see 1400 anytime soon, but it's not going to be 108 years. >> for more, head to the website at 1:00 p.m. because we've got a commodities showdown today. dennis gartman taking on helima croft. we're talking crude oil and the rest of the energy complex. you don't want to miss it. more halftime report after the break. hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias.
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we're back. just a few minutes to go heempl i want to show you the vix. look at the spike. now, it's over 20. you own the skrrks xx? >> i do. i've owned it for a while. i added to it after the close yesterday because of my view in the market, which identify been pretty clear b about. i don't only own it as a hedge, but as an outright investment. anytime you buy that with a 12 or 11 handle, it's gold. it's going to pop. >> an indicator like the peso is? >> i think it's even bet. >> yeah, it's. it's become a general nervous indicator. you could even short, you know what, the dax right now. europeans seem much more nervous
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about the election than we do. you've been there, too. >> yeah. again, same thing. we have that hedge on portfolios and things like that. long one call, short several strikes. >> so many people with so hedged rits now. mark cuban. >> the people who have been fading it are being squeezed now, too. so, the it election news, perhaps? is it people that are short vix by virtue of not having protection and they're scrambling now to get it? that will continue tomorrow and monday next week. obviously, tuesday. >> i think it's worth pointing out, you guys are usinging it in a professional way. the vix is not like a long-term portfolio. nothing reverts like the vix and if you look at the last two spike, one was in september. the other was around brexit both times just above 20. you had two or three days to unwind that position. it's otherwise, owning vix contracts even rolling them. it's like paying insurance. >> the reagan sell off was 28%
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and it proveded to be the buying opportunity of a generation. >> to your point, you can't oversay, you got to watch it. >> you've binching toward this is way. it sounds like are you predicting a trump win? >> no, but i'm look at these indices, the vix. the peso. like everybody else. i'm watchinging these every day become more and more volatile and what i'm doing, my domestic portfolio, raising cash. that's my way of feeling comfortable. so i can lair in my positions all over again. wednesday morning, week later, a month later if it's true trump takes it. >> if that's true, you would use it as a buying opportunity and be overweight on the u.s.? >> i peeled back. way underweight in the u.s. now because i've got cash. i go back up to 50%. that's always my mix. by the way, asia outperformed again this year. xwen.
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>> last week, we told you about the charity, wings over wall street, benefitting the fight against als. kevin o'leary helped that cause by auctioning off a dinner, the chance to dine with our resid t resident. it raised $34,000. you can doe anytime. that's great. good to see you. >> whoever i'm having dinner with, i'm buying the win and they're going to love what i buy. >> back to hq and "power lunch." >> i'm melissa lee. new numbers on the millennial vote. just five days to go until the election. also, more on facebook's big slide. is the digital ad market hitting a top and it's a party 108 years in the making. coming up, you'll hear from a part owner of the chicago cubs following their win. batter up. "power lunch" starts right now. welcome to "power lunch." three hours left in the

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