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tv   Fast Money Halftime Report  CNBC  December 2, 2016 12:00pm-1:01pm EST

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about education. >> there's a question about whether starbucks is -- that was a passion project of schultz's in particular. >> yes. look out for this weekend. referendum. we'll see what we wake up to on monday morning back here. have a good weekend. let's get over to headquarters and "the half." >> with why one notable market rally -- and could bring another 5% gain for stocks in december. with us for the hour today, steven weiss, jim levinthal, john najarian as well. also on set is paul richards, the president of medley global advisors. we want to begin with that call. it is by wharton professor jeremy seagall. we welcome him in today. happy back. >> happy to be here. >> this rally doesn't feel a little long in the tooth? >> no, not really.
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we really had stagnated market for almost two years. barely inching up highs. i think that trump's and republicans' program which the market is much more in favor of than just trump's program can certainly spark another 5% or even more increase. now, whether it comes by the end of the year, we'll have to see, but i think we have to be very encouraged by the choices certainly they pick for treasury and commerce. i mean, these are men that are very aware of markets. they're very aware of the globalization of our economy. what's important is that if he goes into an extreme protectionist or import mode, tariffs is greatly reduced with these advisors he has chosen
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where. >> he deserve all of our respect. you deserve as much credit as anybody. you have been saying 20,000 on the dow for the better part of a couple of years, if i recall correctly, but nothing has happened yet with the trump administration. these are projections that things are going to happen, and the market has run as if everything has already been passed. >> i think ae hatsds lost the aud audio. we'll try to fix that. 20,000 on the dow, for at least a couple of years that i can recall. for the most part there's been some peaks, valleys, but he has been right. >> he has been justified. in other words, would an optimistic guy -- would i be surprised that he sees a 5% rally at year aend after the 5% rally that we've seen since the election, since moments after the election. i don't think that's a surprise. i agree with you, scott.
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>> forget the surprise. is it the rally long or not? >> the critical issue facing every single investor watching this, and frankly, everyone who is trying to invest in themselves is the fact that starting valuations matter a great deal for forward return looking at five years, seven years, ten years. starting valuations right now are just not great for that type of investment time horizon in the s&p 500. >> what are you going to do for going out a decade? i think it's very, very difficult. even the value stocks are historically expensive right now. in most cases, in most areas of the market. i think you have to be looking at small cap. i think you have to be looking overseas. i really don't see any other way around it. >> i think that's an excellent point. >> the u.s. has tapped out? >> well, it goes back to what we've said so many times. you don't buy markets. you take rival shots.
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you buy where there's value. >> maybe you don't buy the united states right now. >> it goes for both arguments, but what areas are there value within the u.s. large cap stock market? i don't think there are that many. >> i do. i think that there's still value in financials. i think there's still value in certain bank stocks. b of a. i think if we get some of the -- we don't even need, frankly, a roll back dodd frank, and they talk about not enforcing the relg las vegass. the banks aren't going to lend if they don't enforce the regulations because then a democrat comes in maybe and they say, hey, you know what, another 75 billion, please, bank of america. >> you can still be a buyer of the banks. >> i still own b of a. i recently bought lucadia. look at the meat business. my point is there are values. look, in terms of the u.s., yes, i like the values.
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>> the fact that there are issues is the whole point of investing because so many people say there are issues i won't allocate there. that's why money will ultimately be made. >> at some point, yes. that's a whole -- >> a year ago, you could have made it two years ago. you have to be able to see what's going to kill these issues. >> the timing is a little bit tougher. >> good to have you here as well. the risks to this so-called trump rally. italy this weekend. rising rates. rising dollar. any of that matter? >> it all matters, but just to that point, before we get to that, going into thanksgiving the market was feeling somewhat extended on the trump rally. we need something to consolidate this rally. the market was pulling back a little bit, and then we got opt knicks. for years, yes, now we if into europe, and this thing to your
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previous commentator, i would say that europe next week represents pretty serious risk, but i would say in weeks time he is going to feel very, very right because i think that we're going to be feeling a lot better about markets, a lot better about europe, and then we run into year end. i think, frankly, people don't know what to do with their money, and i think that equities are going to win, including the u.s. >> that's a good point, right? the markets run a lot. people look at the market, and they hear people like josh say, hey, things look expensive now. don't know about europe because the risks that exist. what in the world? >> you have a 35-year bull market in bonds. okay? there's no reason why you can't extent the bull market in equities. we're basically flat. we're up 2% versus where we were 18 months ago. we're up 7% year-to-date. it feels like the market is run over. okay? if you are a growth investor this year, you've lagged that. if you are a value investor, you're feeling miserable. now you're doing better than the market. >> so we have the professor back. professor, can you hear me now? >> yes, i can. >> it's good to have you back
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with us. what i was saying -- >> thank you. >> -- before we had an audio issue is you deserve all the credit in the world and certainly the respect for the calls that you have made. you have been correct by and large on where this market has gone, and you have said dow 20,000 for the better part, as lisa and i can recall, for the last couple of years. however, the market seems to be reacting as if the entire trump agenda has already been passed. not taking into account that things could get a little bit messy. >> yeah. no, i don't agree that the entire agenda -- i mean, just -- >> lowering corporate taxes, which is something that even on many of the democrats agreed needed to be done. i mean, that boosts s&p earnings by 10%. i mean, that will give you a 10% boost even without extra growth. if we have some extra growth in there, if we have less regulations there, i mean, i think that's another 5% to 10 %. now, that is a full agenda of
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occurrences, but no, i do not agree that we have moved to discount all the favorable factors that could occur, and i say could occur, certainly not a slam dunk under a trump administration. >> what about the risks? what about the italy referendum? at what point do those become so prohibitive? >> they haven't become so prohibit i. i don't -- first of all, you know, i mean, i hope the referendum in italy passes. i don't think it will, but i do not believe we're going to get a crack up of the u. i do not believe any country is going to leave the euro. again, there's going to be some tensions, to be sure. i don't view a crack up there. i know draghi is going to move just like he always has in the banking system to prevent any collapse on that side. as far as the interest rate side is concerned, certainly that's a bit of a challenge. if interest rates were still
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1.8%, we would see dow well above 20,000. certainly the interest rates are a challenge, but they're certainly not challenging to what kind of returns you can expect in the stock market. i mean, 2.5%, even 3% on a ten-year is well below what i think the returns are going to be to shareholders under a trump administration. again, yes, they are challenges, but not serious challenges. certainly not yet. >> hey, professor, it's josh brown. so the skeptic would say, okay, the dow goes to 20,000. jeremy goes on tv and says 22,000. what would it take for you to -- what would it take for you to say the next move is down 5% or 7%, or 8%, or 10%? what would have to be going on in the markets? >> if he moves -- if he does with carrier, with every corporation, who says it's impossible for anyone to
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leave -- i mean, if he really moves on that and starts putting on tariffs and restrictions, all bets are off. >> why? would that -- >> we certainly tried to -- the situation that occurs under global economy. we cannot deny that. you know, certainly if the rhetoric gets much more heated and much more protectionist, all bets are off at that time. at least at this point where the appointments indicate that there is more hope for a growth agenda than there is for a protectionist agenda. >> we've been looking at, let's say, what are the trump trades that would work, and carrier's situation says, okay, maybe we should buy industrials because trump is going to protect the manufacturing economy in a way that others have not and try and bring it back. you make the point, though, that the carrier situation could be somewhat of a pandora's box and
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that it leads -- >> definitely. >> it leads to other companies that propose risks. >> there were credits, from my understanding, given by the state of indiana, but there was also this occasion, hey, guys, we have some defense orders, several billion. i mean, he didn't say i'm going to pull them if you move, but when he makes a statement like we're going to make it very, very difficult, you just wonder, you know, what -- it's not all going to be carrot and no stick. that's not going to be good. i mean, that's an open question on the trump administration, says and we certainly have to see how that plays out. >> are you happy with the market since election day? >> i am surprised. i thought in the short run we were going to get a downward reaction, but i felt in the long run it was favorable. i just never felt that short run was going to be six hours long and then everyone -- i think his
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first acceptance speech i'm all americans, i'm going to make it for everyone sort of set the tone, and when people realized he went to paul ryan right away, that's -- don't forget, the market loves the republican agenda, so the more that he moves towards ryan and the republican agenda, that's very positive, so, you know, basically yes, the markets put on the rose-colored glasses and said, you know, i like what i see so far. keep up that trend, and i'll go with you. i think that's exactly what has happened in the markets. >> you know, i just think we're thinking way too hardworking our brains way too hard about this. this is relatively simple. it's eight years of negativity, it's eight years of suppression of success to having somebody coming out and say, hey, you know what, it's okay to be successful, it's okay to be american, and it's okay to put america first, and i'm going to do that for you. he did it with carrier.
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the industrials yesterday just flew. i mean, it was just amazing. people feel good about themselves. >> it's a renaissance. clearly -- >> that's what's driving the market. >> the fact -- yeah, the fact that people say, hey, you know, someone got rich, someone has produced value, yeah, there were bumps along the way, but, you know, this anti-rich tone that per v pervaded the democrats is not something that will serve america well, and i think the fact that people are saying, yeah, hey, you know, let's see if we can get some pro-business investment agenda going and see how that works. >> the change of tone is striking. it's striking. i mean, there is something clearly happening. >> does nobody remember the 2000's? am i the only person who remembers the president that ripped up all the rule books and what we got as a result of that? who celebrated success above anything else. >> we have a huge bear market
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and bull market. which part are you referring to? >> we started out with a tech sector that was 150 times earnings. that was crazy. i mean, the dot combubble was the biggest bubble in u.s. history. >> sure. >> yeah, he is going to have a bear market after that. actually, we had a rather mild recession even with 9/11 coming. then we had good expansion until the bubble in the property markets and the lehman moment and all that. the 2000 was a very, very different situation on valuation. >> professor, i guess -- >> and at much higher interest rates, by the way, than we have today. 2007 was much more severe. >> 2007 valuations versus today, you think it's ricall radically different? >> about the same. >> that was by greenspan. >> that is correct. we had higher -- we had higher interest rates. we had the ten-year at 4.5, 5.
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we had much lower interest rates. now you have valuation that was the same, and we don't have all the that risky stuff and, you know, on the balance sheet of all these critical financial institutions. they're flush with reserves. more cash than ever before. >> professor, have a good weekend. we'll catch you soon. always fun to bat it around. what do we think? what are we thinking? >> i said yesterday tech. bought several tech stocks. facebook $2 off the bottom already. just in 24 hours, judge. i think there are a number of stocks in that space when you look at the corrections that have been 10% to 15% in tech. i'm still buying airline stocks. i know these are a favorite of steven's. i'm still buying them now. i already held american airline and delta, and i'm adding to them. >> biotech. biotech has been decimated.
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it's bounced a little in some areas, but biotech still a great area. >> the next 5% is higher. unequivicolly. >> people who didn't even vote for mr. trump have recognized the change in the tone and the perception of what is going on. a billionaire i was with last night recognized the same thing. he didn't vote for mr. trump. it's unmistakable. that's why the market has reacted the way it has. >> i think it's the other way around. i think the market is doing what it's doing, and people really, really are happy seeing it, so everyone's mood is lifted. i could not disagree more. the tone is set by price. >> i could not disagree with josh more and agree with you more, scott. >> sentiment follows price. not vice versa. >> when you ask professor seagal about the 5% and you said isn't it fully priced in?
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no. 20% is what we're going to be looking at here, judge, with what professor seagal talked about. >> go back to cnbc.com. >> we're going to see tax rates cut. hold on. i'm the one talking. you're going to see tax rates cut. you're going to see regulation rolled back. those are going to drive markets, and it's not going to be a 5% rally. it's going to be 20%. your turn. >> look at all the op eds on cnbc.com written by people. obama hates business. bad for the stock market. bad for billionaire. bad for rich people. blah, blah, blah. we have never seen a stock market like this in decades. we have never had this level of wealth creation at the top 1.0%, .1%, 1%. the narrative around a new president is not always right. the first 20 days after someone gets elected does not always set the tone for the next four years. >> no, but -- reality has a way of -- >> the narrative -- >> you're looking at just people in the market. most people don't look at the market every day, every week,
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every month. >> where is the tone changed? where outside of the markets? >> the biggest cyber monday you've seen. >> it's always a bigger cyber monday. >> keep it simple. is anyone here selling today? is anyone here selling stocks? >> by the way, i'm a money manager, so i hope you are all right and i'm wrong. i'm a money manager. this would be fine for me, believe me. be fine for my family. great for my clients. >> people think there is a renaissance for business. >> people are maybe getting a little bit of ahead themselves. >> who cares? keep it simple. if you are selling stocks today, it's the wrong move, and if you are selling stocks, why are you selling it? on valuation? that historically has not been a bad call, and i certainly hope you're not shorting. if you are selling on feelings, it's also not a great call. we agree. >> what are you selling on? are you selling on a lack of economic growth? no. there's economic growth rsh are you selling to rates going up? they've already gone up. you've got a much better labor market than we expected three months ago. if you are selling today, you have to ask yourself why, and valuation is not a good reason
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to be selling. >> i disagree with josh on one point. following price except on major events. look at brexit and now trump. this is a major renaissance event. i think sentiment is the driver right now, and i wouldn't fight it. >> i think sentiment is driving, but i think it's because of price. that's all i'm saying. >> listen, hope i'm wrong. i hope it is a renaissance. we all love renaissance. >> i think it's a renaissance. >> good to have you here, paul. here's what else is coming up on t"the halftime report." >> if you are long lulu, you may need to sign yourself up for another stress-reducing yoga class. it's about an a downward dog for three months. losing almost 20% of its value. on the bright side there may be an opportunity here. the rest of retail, though, scoring big in november. one of the best months for the s&p retail index in years. which retailer should you consider for stocking stuffers? more "halftime" coming up. ways .
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accidents and two injuries associated with the issues. scott, i just pointed out this comes after ford shares hitting a four-year high yesterday on the back of upbeat auto sales. >> all right. thank you so much. let's talk about shares of lulu lemon. right now they are under pressure. there they go. the stock was cut to a sell. what do you think of this call? they say denim is back. frech forget lulu pants. >> i have baird and mkm on my side too because both of them upgraded, the and the targets are 79 and 90 out of those two firms. i was at the mall of america. biggest retail space in the united states. there were lines to get in at 2:00 in the afternoon. that's a picture of it. lines to get into the store, and people are coming out with bags. they talked about discounting and things that are going on on-line. i just know when you are paying $80 for a pair of, you know, yoga pants, they're making a pretty good edge on that trade.
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>> we like that. >> you get the same valuation in nike. almost the identical valuation. by the way, i did finally pick up nike this week in my portfolios. look, for the same valuation i would rather take the bigger -- just like you should have covered with gm, but you probably didn't. >> back on nike. >> oh. >> back on -- >> this show is all sorts of sassy today. >> back on nike. you get a much bigger company, a global brand. a brand that i would say is worth more than lululemon. i think you get the same valuation at a better company with nike. i'm not selling lulu. >> i don't know what he he was saying everything was on sale. they didn't run a black friday sale. they didn't run a cyber monday sale. >> you are talking about the analyst? >> yeah, the analyst. i was on their side and in the store, and no more clear -- >> inventory levels are rising in the stores. >> you know, i didn't see it.
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i was in the store. i wear their stuff. you know, i used to not, and now i think it's the best quality workout stuff that's there. now, i don't wear it to the office. i don't wear it around during the day, but i can't imagine somebody throwing on a pair of jeans instead of that. i like it. i'm waiting for the stock to come down. i hope he is right about that price target. that would make it compelling. somehow it got one of the best growth rates. >> he turned so negative. >> i don't think they are, by the way. >> i agree. >> what about -- forget the lulu part of the nike conversation? what about lulu -- i mean, nike as a buy now? >> jimmy spent more time looking at it than i have recently, judge, so i can't really make that call. i'm not right now. >> the fact that i bought it doesn't mean that it's going up this week. that's not what this is. this is a long-term investment. i'm not saying this is the perfect price. they've got earnings coming up later this month, and once that happens, i will probably fill
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the rest of what's about a two-thirds position right now. this is a long-term investment. i'm not saying that this quarter is going to knock the sox sox off. >> what about the srt? it's coming off one heck of a month. best month, in fact, in -- well, they changed the screen on me. >> just make it up. >> best month since 2011 they magically tell me in my ear. retail? hello? anyone? >> it is a great month. i don't think they're out of the woods yet. i think that is a big inflation trade. i think they've done some things write. i think it was fairly indiscriminate on the way up. we had good numbers from macy's. i just think they rerated those and we've said in the show before to multiples that we haven't seen in a long, long time. there's good reason for that. i think we've got to be very, very careful there and be more selective. i like when they're beaten up like nike, and i agree with that strategy. buy some now. you haven't seen the prices in a long time. >> xrt looks like a break-out. they ran the whole index up 9% in a few days.
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it's already rolling back over. found resistance exactly where it should at prior highs. you have to be more selective at retail than any other sector. this is not a good bet. >> not quite exactly as i would have put it, but i agree. >> i also say that retail is actually in danger of getting a hangover after the holidays. the two-month sentiment trade that we're talking about before, then what do you do? i kind of think -- i think retail after january starts to tail off. >> the trump rally, clearly the focus of investors here in the united states, but europe, as we mentioned, has two market-moving votes. we'll get you ahead of that important trade next. plus, a surprise move at starbucks. howard schultz, ceo, will step aside. the stock is getting hit today on that news. it's straight ahead. >> before the break our partners at kensho on the best performing retail stocks in december over the last five years. groupon up almost 16%. rite aid, super value, and
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what's in your wallet? there is your market picture on the friday.
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s&p adding two. the nasdaq, which has been banged around recently, is adding a little more than 8.5 points. a new jersey judge has declined to appoint a special prosecutor to investigate a citizens criminal complaint against governor chris christie over the george washington bridge lane closures. judge bonnie misdahl said private citizens do not have the legal standing to make such a request. gatlinburg, tennessee, mayor raising the death toll from that region's deaf stating wildfires to 13. >> who use their swearing in ceremony to stage apparent protests against beijing. and the white house has launched
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a reality app called 1600. when users point their phone at a $1 bill, the app builds a tiny interactive version of the white house on george washington's portrait. look at that. love that. all right. you're up-to-date. back to you, scottie. >> thanks so much. two big votes in europe on sunday could rock the markets. italy voting on a referendum which, if rejected, could lead to the resignation of renzi. >> it's a yes vote or no vote. we don't bet on our portfolio. we look at things with down side protection. look at the bookie market. 75% of people think no, employ the one thing that we have really recently is that you cannot trust those poll numbers. >> you can't trust the polls, the bookies, or anybody.
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regardless of the outcome, you think the market could still go up regardless? >> i think if a yes vote comes in, it is definitely going up. the reform that they're looking to put through and the refer den up gives them the permission to do that and it's very positive. on the no side, don't forget. we've got -- the recap of that bank and that will become uncertain in an uncertain market, and then we don't know what's going to happen on a political front. >> austria is not getting any play. should it? >> it isn't, actually. it's kind of interesting that it's really fallen by the wayside, and a lot of the focus has been on italy. you could have another rise of populist conflict and threatening to leave the e.u. >> does it spill over here snl
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obviously, we're a little nervous ahead of what might happen over sunday night here and only a little nervous. the vix is, what, 13,800, 14,000. in europe significantly higher. do you think that stays higher for longer because of what you've named about montepesha as well as france? >> i think in europe the political situation is so messy that it makes a bowl of spaghetti look like it's neat and tidy. you know, you have all these different elections. even if we get past italy, we get past austria, we have the french election coming up. we have the german election as well. i think u.s. investors aren't paying enough attention to it. >> pardon me for interrupting you. at least from an investment standpoint, the u.s. market has done so well. it's forced people to look here rather than europe. do you see great values in europe right now that are worth investing in? >> i do, but i think what you actually, though, have in europe is a potential for a similar
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type of rally if we get the italian referendum with a yes vote. i look over at france, and we have a new candidate that's coming up against lapen, which is the riders candidate, and he is what we call a modern day margaret thatcher. he is pro-business. if you have him coming in, to me it's almost like having trump coming in in the united states. you have germany. if merkel gets back in. >> we have those service names and trades just ahead in the blitz. also, a name that has been a trader favorite here on the show is surging today. are the guys selling or will they buy more pandora? first, the names hitting new
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>> welcome back to "the halftime report." want to call your attention to some other stocks that are on the move at this hour. the minors. sector moving higher. newmont in the trade. there's a good debate going on in the market as to whether the gold ship has sailed even as some say. you know, it's going to come back. >> what did jeff gundlach tell you yesterday when he shot that in at, say, i hi bonds have topped out. i'm paraphrasing. bonds have topped out. dollar has topped out. for the short-term. i believe he said he was getting back into gold. we talked about that yesterday with that unusual activity. march calls. gold is up small. you know, it's up $1, gld is, or something like that. you have a 4% move out of the miners. good timing. >> i don't think this got a lot of media play, but earlier this week glen corps, the big
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commodities producer, said it will reinstate a dividend. it's going to return cash to shareholders. that's actually a big, big deal. they're one of the biggest players. not necessarily in gold. much more in the industrial metals. they're clearly saying that the commodity rally is not a fizzle that's going to come back down. i think that's an important thing for anyone who is playing in the miners. >> pandora is popping. is a sale in sight? that trade and more just ahead in the blitz. first, though, take a look at what's coming up on power lunch. >> thank you very much, scott. we are all over the jobs picture. we've got a guy that is basically described as sort of mr. america because he has brought back jobs to build furniture here in the united states. we are live in mexico at that carrier factory in mexico where jobs exist now and where those jobs would have gone. of course, we're also all over this market picture, guys, as well. not a big gain for the market today, but still could have our fourth straight week of gains for the dow jones industrial average, and you mentioned miners. how about a deep tease? on monday the ceo of the
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aforementioned newmont mining will be our guest on power lunch as well. that's coming up in the next hour, and after the weekend is over. more halftime report coming up after the break. ♪ approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five, but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent
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so call now and discover how an aarp medicare supplement plan could go long™ for you. these are the only medicare supplement insurance plans endorsed by aarp, an organization serving the needs of people 50 and over for generations. plus, nine out of ten plan members surveyed say they would recommend their plan to a friend. remember, medicare doesn't cover everything. the rest is up to you. call now, request your free decision guide and start gathering the information you need to help you keep rolling with confidence. go long™. ♪ >> we want to remind you not to miss jim cramer's exclusive interview with greg hayes. he is the ceo of united technologies. carrier's parent company. carrier, as all of you probably know, agreed yesterday not to move 1,000 jobs to mexico.
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that is monday at 6:00 p.m., and you will only see that interview with jim on "mad money." let's do our traders blitz. first up is starbucks falling today as ceo howard schultz steps down as ceo to focus on that line of high-end coffee shops. here is what he had to say earlier today on "squawk" about the stock performance. >> this is a great time to own starbucks. if i look at the stock price, i'm not -- i probably regret saying this on air, but i think the stock is under valued. >> all right. well, bernstein initiate -- you want to talk about that first? >> it's not the first time we've heard that, but do you agree? >> on a long-term time horizon. it's a great brand. if he does what he thinks he can do with coffee shops, yes. >> i think he is smart to focus in on the high-end because the rest of it's just -- i'm not very much a fan of the rest of starbucks, so you might as well just pump it out.
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clean up the stores a little. that would be nice. >> i would rather buy at mcdonald's mc-kay yea for $1.90 than $3 .45 for starbucks. >> 52-week high. there's a high-end. there's i guess you would call it the middle of the road. maybe mcdonald's at the low. i don't know. >> bernstein initiating halliburton and transocean to outperform. jimmy. >> we'll keep this very simple. if you think the price of oil is going higher, then buy these stocks. i personally don't, and if you don't, then you got to look at the fact that halliburton has rallied quite a bit so far in both of these prices are very fairly valued. in fact, over valued if you ask me. >> all right. amberilla down today on weaker guidance despite being on the top and bottom line. the stock down 10%. what do you do? >> look, everybody is nervous in
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the space. i think you've had a great run in this stock and in the -- all of a sudden the bloom is off the rose, and this isn't going to help it much anymore. i don't think this will bring a bunch of buyers in. particularly with the fluff. i think you stay in the sidelines. you pick your spots. >> ebay among the top performers in the s&p 500. it is up 17% in the past six months as well. doc, you got activity today in that. >> i do, and it's strong activity, but the open interest is huge. whenever we get that, i don't make an out and out call on it, judge, but traded this one today. it's a nice pop again today. about a 4% or 5% pop, i think, but it was just a day trade for me. i like it. the listings are up, and i think they're going to do well into the holiday season, so it's outperforming everybody else i think in the s&p today. >> all right. pandora is higher today. could be willing to make a deal? could be open to selling itself. let's bring in joe terra nova on the phone who owns the stock. he bought it earlier this year. joey, you there?
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>> i'm going to be buying more this afternoon. >> i was going to ask if you were selling? >> no way. no way. you know, listen, i know pete and job had some unusual activity the other day. it was an excellent call on their part, and i actually like the price action today because it's falling off. maybe that's an indication that some of the short-term money is taking profits, but that's great. go short the stock. it only adds to the short interest, and it builds the fundamental story, and that's the case for this name. >> you remember keith meister, the activist investor with corvex who has been pushing them to do something. have you owned it since around the time that he got in and was on the program, or give us a little idea of some color on how long you have been in the name. >> what i have done is i have patiently followed this stock. i listen to what keith said when he was with us in september. i waited until they had a bad quarter, which they did. the fundamentals of the quarter showed slowing revenue growth, and the real problem with the quarter was softness in ad
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demand, but what people don't do their homework or -- with and really study is they sacrifice ad inventory, about $4 million worth, for subscription promotion. they're coming out with -- they've had pandora plus. they're coming out with pandora premium. there's new product coming on to line, and i think in any good trade, you want to measure what your risk-reward is and what the stock -- where i purchased it at the end of october at $11.25, i thought fundamentally the down side was protected. there was a lot of fundamental up side, and i'm not even talking about an acquisition, which possibly could happen if that happens as an $18, $19 stock. >> doc, you're shaking your head. you agree? >> well, joe is right about the unusual activity too, judge. pete talked about it just tuesday this week. somebody stepped in and bought multiple thousands of the 12 calls that are, i think, december, 12 calls. that was when the stock was below 12. now it's pushed today -- it pushed up through 13. it's back to $12.60 or so.
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i see a lot of up side just like joe. >> see you back here monday. have a good weekend. >> the options expert is in the house. dr. jay, next, who will tell you the unusual activity he sees in an airline stock. first, the s&p sectors today. take a look at real estate and utilities. defensive kind of day. financials which have done so well since the election giving 1% back. we're back after this. >> "the halftime report" with scott wapner is the place for market moving interviews.
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good doctor made his way over to the telestrator for some unusual activity. doc, jetblue. >> yeah, well, judge, the stock was 24 bucks back in march. got all the way down here to about 17 bucks and now it is back to 21 bucks. somebody's putting down a big bet it is going to be over $22 in the not too distant future. why? they were buying the january 22 calls. bought them in big numbers and big blocks. some of them as large as 6,000 contracts, total of 13,800 traded, and they moved up from
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right around this level, it is called 45 cents yesterday, pushing all the way up to about 75, 80 cents right now. i put on a spread on here, judge, i'll likely be in this one for two to three weeks. remember, buffett's in this sector, in united and delta and american. american is the most undervalued of the group. but this one is getting the love today. so i bought it. >> yeah. you have a thought? >> i do. let's keep in mind they don't hedge as much as they used to. if you see fuel really go up, you start to have concern. this goes with our theme, the renaissance theme, what are people spending more money on than in retail, experiences. that's travel, that's airlines. they said that a couple of quarters ago, they're going to cut back in capacity, that's the mean issue to help the stocks back. i think they go higher. >> doc, come on back here. >> thank you. >> take a quick break. coming up, the long and short of it. jpmorgan's list of stocks set to pop and those they think could drop.
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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. get help on options trading with thinkorswim, only at td ameritrade.
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jpmorgan out today with a list of stocks they say are good shorts and stocks that could have a big rally in 2017. let me go through the names on the short list. i think you'll find them interesting. general electric is on the list. >> very surprising. >> i like it long. >> you have. they say -- i'll read part of what they say. we see material risk to earnings coupled with weak cash flow
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conversion, stock trading at a 40% premium versus the group, free cash flow and 5% premium on a weighted basis. >> you can't believe in all of the businessman renaissance story without thinking that ge is going to get a nice piece of it. they're involved in every business that should get a boost if all of these things come to pass. so that's not why i bought it. i think they have a lot of optionality. but at the end of the day, this is a stock that son tis on the of making a 20-year breakout. >> stocks could rally 50% plus. facebook, you said you bought that. >> i thought it was one of the cheapest stocks -- i call it, you call it advertising. >> i call it whatever. >> i like it. and i think it continues to work its way back higher. and i think it was unfairly hit, now second time you've got to buy it at -- >> this only works if there has been a sentiment shift and a reweighting of portfolios away from tech and --
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>> queues are flat since labor day. >> does it come back? >> i think it should. >> why do you think that is? >> why hasn't it made me progress? munro taoney rotates from one t another. people looked at cyclicals. at the end of the day, they're still chugging along. >> the rotations have been violent. the rotation has been killing it. you have financials up 17%. 15% in the last month. crazy. but to doc's point, yeah, facebook is advertising, google is advertising, not tech stocks. but ge, why buy ge? and pay commissions on a single stock when you can buy etf on the s&p? >> what about -- a couple of other names, good year tire,
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they see deep value in gt. >> if you're a believer that peek autos is a false thesis, this is a way to go. >> which you are. >> i am. if you look at whether it is the auto oems or parts suppliers like good year, they underperformed a lot during the past few years. this is a safety of principled trade here as well. >> they say a short, a good short would be adm, archer daniels-midland or long in lilly. they see 29% upside. >> i like the lilly trade. >> so jimmy and i are on the other side. i bought lilly on the dip two weeks ago when they had that nasty response to their phase -- i think phase three trial they had to -- >> oh, yeah. >> bought it at 65 bucks. not moved all that much. only 66 or 67, but i still like it. i would stick with it. i understand where jim is. >> i'm not that against it. you have to wait, though.
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easier trade is bris totol myer >> i'm watching bonds. we talked about the yield but i'm not so sure. >> good to see you. paul richards with us today. "power" starts now. i'm melissa lee. here's what's on the menu. trump's deal to save the jobs at carrier. should business cheer an activist president or fear government gone wild? michelle is going to join us live from a plant in mexico. jobs, jobs, more jobs, the unemployment rate falls to its lowest level in nine years. is the jobs picture, though, really that rosy? we'll debate that. and why one wall street firm wants you to bet the farm on chicken, beef and bacon. a sizzling edition of "power lunch" starts right now. ♪ get it hot come on baby ♪

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