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tv   Fast Money Halftime Report  CNBC  February 28, 2017 12:00pm-1:01pm EST

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the dollar will be key. the key rally we had seen post election has stalled. it's down for this year. it's up a percent for the month of february but still that whole trump pro growth better economic outlook, animal spirits that rick is talking about. you will see that on a dollar reaction. >> piece so not having the best year. >> sale on the inauguration story in history. >> back to the election on the pace so and emerging markets. let's get over to wapner and "the half." thanks so much. welcome to the "halftime report." i'm scott wapner. top trade this hour, stocks and the speech. why tonight could be the moment of truth for the trump rally. with us for the hour today joe terranova, stephanie link, josh brown, jon najarian and pete najarian from minneapolis. expectations that president trump's agenda including tax cuts and big spending on infrom structure will stimulate economic growth. it makes the address before a
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joint session of congress all the more interesting for investors who will be looking for more clarity. jon, you're the one who suggested if we don't get that clarity, a correction could be in the cards. >> yeah. if he stumbled and didn't give us basicalically what the marke wants we all know the market, us collectively, we can act like bad children and when that happens of course the markets generally react negatively. i don't think that's going to happen. i think he's going to hit repatriation hard. i've got an example for you. you take a look at some of the activity in the derivatives contracts. the options. these companies folks have the most money overseas. microsoft, g.e., a 8, pfizer, ibm. we have unusual activity in virtual lit every one of those over the last week. what does that tell me? tells me that people are betting on upside after the talk on repatriation tonight and that 2 1/2 or more trillion dollars that could be pouring back into the country. >> do you think, josh, the
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ramally as we know it sort of ranks in the balance based on what the president says? >> yeah. >> and how specific he gets tonight? >> i'm much bigger on thinking about how to look at a reaction than i am on making a prediction. so, scott, i'll tell you what the number one thing i'm hearing from people is what if he says everything the market wants him to say meaning the tax stuff is on track, the health care, they're going to be specific details coming soon, on and on and on with respect to mergers and repatriation as jon talks about the defense budget. what if he gives us everything we hope and think he's going to give us and market sells off anyway? to me that's the biggest risk because it will tell you psychology is changing. up until right now, keep in mind the stocks are actually trading in line with the president's day-to-day favorability rating which is probably not sustainable. but that's actually what's been going on since the inauguration. if that cycle breaks we might have a hiccup here. >> joe, is the market reaction right now ahead of the speech an indication investors are, in fact, waiting to hear what the
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president has to say tonight and then make a decision on what it means for the rally? >> no, i don't think necessarily if they will make a decision on what happens with the rally going forward based on what they hear tonight. i think what's important is that financials and that treasury yields react in the wake of whatever the president says tonight in a benign capacity. you don't want to see financials roll over. you don't also want to see technology roll over. it's been financials and technology that have led us higher and those will be the two sectors you have to look at most importantly to understand if jon's correction were to happen. >> why would they roll over? >> there has to be something that he were to talk about tonight that would upset investors and lead them to believe that as the outlines the agenda maybe there are not varieties related to repatriation, corporate taxes being cut or something that has impacted the enthusiasm surrounding his -- >> or just run of the mill style news. it could be -- it doesn't have to be anything negative. >> what if we didn't get
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specifics? the market is only going to be patient for so long. >> to joe's point, somewhat the market is looking for to say if he's positive and think he can still get things done i don't think you will see volatility. if he's becoming negative and being held up -- >> media, blah, blah, blah. >> starts going after congress and saying already without even putting something out, i think that's an issue. and then coming back to your point, i think a time frame is point. we've bb waiting, waiting. he might not give us specifics but if he can give us milestone, by august or september this is what i expect to get done. >> and cohen did that last weak, right? i think a lot of these people, a lot of adviser, judge, as well as treasury secretary mnuchin and so forth, what they i'm part is more important but because this is the big stage if he steps out from what they've said, that's the risk. >> the ream question is how quickly the president's agenda can make it through congress. john harwood with new reporting on that key issues.
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john is live from washington with the latest on that, john? >> scott, you were talking about clarity. if you get beyond the rhetoric the one thing that's clear is that president trump's agenda is in deep trouble across the board. let me just run through some of the ways. first of all on health care. we have no white house plan yet on repealing and replacing obamacare. secondly, you had an influential group of conservatives within the house say last night that they op potion paul ryan's plan because they think it's too liberal, too much like obamacare. at the same time, you've got republican governors and members of the senate who want more protections for current beneficiaries than the conservatives do in the house. we do not have claurity there. secondly on the budget, the new budget director yesterday outlined the plan to shift $54 billion to increase defense and take it out of domestic spending. here's the problem. to do that you do not have filibuster protection. you need 60 votes and that means it's a big problem because
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democrats are not going to support that. some republicans won't support it either. if you don't offset the cuts then you've got an added problem as they try to raise the debt limit which republicans still have to do. finally, on the issue on tax reform you've got a delay in obamacare because of the sequencing they have. means that tax reform would be delayed. second of all, you have no white house plan again. third of all, you've got senate republicans opposing the border adjustment plan that the house is pushing. and our next guest senator orrin hatcher chairs a senate committee, eager to learn what he has to say about how he's going to get around that. we don't have a senate plan yet. feep finally, on infrastructure. >> john harwood from the nation's capital. chairs the senates finance committee live from the capitol today. senator, welcome. glad to have you today. >> nice to be with you as well.
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>> would like to start where john harwood left off. do you support the border adjustment tax? >> i think we have to look at it. i don't know -- i don't think we've had a definitive statement of what that tax would be. we certainly have to look at it. the house seems to want it. some people in the house want it. and i have some real reservations about it. but i'm open to good ideas from wherever they come. >> there are some suggestions that it would be so-called doa in the senate and now there's news today apparently that chief strategist in the white house steve bannon and paul ryan that the house speaker have now come to an agreement on the border adjustment plan which could be big obviously in the house. >> well, i don't know about that. all i can say is i think it's got a long way to go and it's going to be a difficult matter to get through both bodies. i haven't heard anything about mr. bannon and the speaker. but, you know, i always listen to the speaker. i always try to leave -- we've
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been great friends all these years. i always want to help him if i can. >> let me ask you about the budget, which we certainly are getting more information on and we started that process yesterday. the president wants a $54 billion increase in defense spending, cuts on the other side to offset that including to the state department. do you support that, sir? >> well, it's been a long time. we have needed to beef up our defense budget. i'm with the president on that. i hope we can get that done. it's going to be difficult because the democrats don't seem to want to support anything that the president wants. and they haven't even had a period of good will. but usually occurs in the first few months of the new president's tenure. but we'll have to see. i would not count donald trump out. he's a fighter. he's a strong personality. he's able to articulate what he wants. and the people are with him right now. >> do you though support the
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proposed cuts to the state department? i only bring to your attention the comments that we've gotten from general mattis, now secretary of defense mattis, who says, quote, if you don't fully fund the state department then i need to buy more ammunition. what's your reaction to that? >> well, i have to look at those things first. but i had a tendency to want to support those cuts. and the state, it could stand a lot of cutting because a lot of people over there, it's a lot of dead wood over at the state department. it hasn't been doing the job for our nation. so, yeah, i think there's room there. but we'll just have to see. the president is going to have a fight on whatever he does. and i'm going to certainly try and help him. he's crucial to america right now and, frankly, the americans need to get behind him and the democrats have got to get out there and start supporting and helping or we're going to wind up in a real mess here. >> the president wants tax cuts,
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infrastructure, border wall. doesn't seem to want to touch entitlements. how is he going to pay for that? >> it's going to be difficult without touching entitlements. sooner or later woog going to have to do something about shoring up entitlements and getting them repaired to the point where they work right now. they don't work like they should. frankly, the -- if anybody can do it it will be donald trump with the help of some of us up here on capitol hill. >> sure. do you consider the budget that was put forth at least the skinny budget as some people are calling it do, you consider it serious? >> i think any budget put forth is serious. generally, regardless of what budget they put forth, congress in its own wisdom will try to manage that and change it the way it feels it should be changed. so who knows. all i can say is we're very early in the preliminary stages of these matters and i think we'll just have to move with the punches, that's all. >> i mean, tax reform, for
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example, may very well fall on your watch, specifically, just -- given the fact that, you know, you chair the finance committee in the senate. >> that's right. >> are we going to get that in this calendar year? i ask you in the context of we're watching the stock market which has risen almost unabated since the collection on the hopes that we're going to see some real tangible tax reform, repatriation and otherwise. can we expect that in calendar year '17? >> there's $2.5 trillion overseas we can get back if we just use the right methodology and principles. we have a loan that would be very, very helpful. as far as -- as far as changing the current system it's going to be very difficult because the democrats are not cooperative. that it don't seem to care. it seems to me when you get a brand new president you ought to be at least want that president to see what can be done. but they're not only not supporting it, they're fighting him with everything they've got. and it's -- i've been kind of
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concerned about our colleague on the other side. the country is more important than any of us. and frankly we ought to all be working together if we can. and i would sure like to see more of it. >> there are some suggestions, though, sir, folks in your own party may be against some of the president's agenda. if you're talking about a huge infrastructure spend, tax cuts, i said a border wall, and how you're really going to pay for all of that. it can't be on the hopes of future economic growth, can it? >> well, it can, but i think it's -- i think that's a wish list rather than something that's practical. so i think we've got to support donald trump to the extent that we can. and we do have some ripples in our own ranks here. so it isn't just within side or the other. i think we've got to sooner or later arrive at a conclusion where we all work together and get something done. >> of course it seems might not see any of this until the folks on the hill, you guys, and ladies, figure out what to do
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with obamacare. >> that's right. >> former speaker boehner says, full repeal and replace is not going to happen. senator rand paul says, if you do repeal it alone, the disaster continues town fold. those are her words. what do you think? >> i think we have to repeal it and replace it. that's what the american public wants. that's what they need. and i think it can be done. but we're going to have to solidify the republicans in congress and i believe that can be done. we're having some very important meetings today and we'll just see what happens. >> do you need to have a replacement in hand, however, before you repeal it? >> well, not necessarily. i think we can repeal. keep the money coming so that nobody is going to be hurt by it. and then replace it down the line when they can get more solidarity and get everybody together. that's the smart way to do it. and we should -- everybody knows that obamacare has put us 25 --
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25% in huge debt and it's not going to work. it's ruining our country to a large degree and we've got to change it. the best way to do that is for the democrats to get off their dime and start working with us and for us to work with them and see what we can do in a buy partisan way to get this country back on its feet. >> i think the point that your colleague senator paul was making is that it would be a mistake to just repeal it without having something tangible in hand to replace it with. so that folks on the rolls already don't get left behind. >> keep in mind, you don't have to replace it immediately. but you do have to keep the money flowing so the people are not hurt. and i don't see -- i don't see the point in saying that you can repeal it but you've got to replace it -- you've got to replace it immediately, no. repeal it and then we're going to have to take time to replace it because it's going to be well thought out and we're going to have to just pay that price of taking the time to do it.
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and, you know, it's nice to talk in terms of unreality but i'd rather talk in terms of reality. >> do you think that's a realarity that the american people would be willing to accept? i ask you that in the context of some of the town halls that we've seen where people have certainly appeared, at least some, to be quite upset at the thought of at least losing their health care coverage from what they have now. you seem to be suggesting that you can repeal it now and then, however long it takes, to come up with some kind of replacement. do you think the american people are ready for that? >> i'm suggesting that we repeal it and then get ready to replace it but keep the monies flowing so the people are not hurt financially. and at the same time i guess you could say that's not repealing it completely but we can repeal it completely, keep the monies rolling until we come up with a final legislative fix or solution here and that can be done. that's the only way it can be done, in my opinion.
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you can't just, you know, knock obamacare care out and replace it immediately without an awful lot of work being done between the two parties. >> since your party is the one sort of obviously leading the charge here, when can we expect that to happen? >> well, you know, some people think that can happen overnight. it can't. i think we're going to have to work on these issues and hopefully the democrats will get off their dime and start helping us a little bit and try to see if we can come up with a bipartisan solution. i spent a lifetime here coming up with bipartisan solutions, working with the democrats, you know, relationship with perfect illustration but it wasn't just kennedy, it was a lot of others, too. i want to see people over there that are willing to stand up and do what has to be done for our country. that sometimes means moving off their rigid positions and we've got to move, too. republicans are going to have to be in the mood to work things out with the democrats and
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that's the way legislation gets done. and there's no other way around it. >> senator treasury secretary mnuchin was on this network late last week and said that the stock market should be a report card on the president or at least he agreed with the question that was asked to him on that premise. do you agree with that? should president trump be unlg,unlg judged by what the stock market is doing? >> no, i don't grow with that. i think very highly of secretary mnuchin and worked very hard to get him into that position. but, you know, there are a lot of factors that work and don't work. so i think it's a whole bunch of things we've got to be constantly working on. we're going to see ups and we're going to see downs. that's always been the case. i don't see why it should be any different with donald trump. the fact of the matter is he's done pretty good so far. and let's see what he has to say tonight. i think it's going to be have or, very interesting state of the union speech. >> the former president george
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w. bush said this week of -- on the issue of russian interference in the election, quote, we all need answers. this morning speaker ryan told the "today" show, quote, we need to make sure that nothing happened that shouldn't have happened as we go forward. we need to get answers. can those answers be achieved, sir, without a special prosecutor? >> sure. my gosh, we've got tremendous people in place to do this. now, if we find down the line that it can't be done, you know, ethically or in a very good way, yeah, you can then make that decision then. but, no, i think we have the people in place to be able to move and shake in that area and get things -- get to the bottom of these things. >> senator, i appreciate your gracious time today. we'll all be watching the speech tonight. hope to talk to you again soon. >> okay. thanks. >> senator orrin hatch, republican from utah. >> i think that's the problem for the market. that very interview is the problem for the market because it seemed as though it was not a
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narrative about civility. not a narrative about getting things done, which is what investors in the marketplace believe they were going to get with the republican congress, senate, congress, senate, and president. they thought we would get action. that interview didn't sound like that it needed to be oh we. >> is there a coincidence -- is there a coincidence in the market instant reaction to perhaps some of the comments or at least the tone that joe is speaking of? >> sure. it's president's job to get the sides together and to make it work. and up until this point we haven't seen or heard donald trump be more partisan. he has to do that tonight, too. in addition to all the details all of us want about the pro-growth plan, he actually has to come out and say, i'm willing to work with both sides to get these policies done. that is what's going to keep this high confidence levels that
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we have been seeing from businesses and from consumers. i don't know. i don't know. the businessman and -- of course not but i'm just saying that is something that has to come through clearly for the market to rally. >> i agree with you but nothing that we've seen so far suggests that that's on the horizon. >> okay. i'm just putting it out there. that's what the market needs to rally. >> i don't know if the market is getting that now. pete, volatility spikes, s&p sales off, maybe for the exact republicans that joe was articulating. >> well, and i think it's sort of interesting though because senator hatch was actually talking about, hey, question we do need bipartisan. without saying the word negotiate it seems to me that's where he was going. this all about a negotiation going forward. and he talked about the three primary topics you bring up and we all bring up all the time. he was talking about essentially the border tax adjustment, talking about obamacare, he's talking about tax reform. all those types of things.
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i think if you listen closely what mr. hatch was saying there, he was talking about how this is a negotiation going forward. and i do think that this is a president that will negotiate, quite frankly, i don't think he's as rigid. >> the implication though, pete, is that you're not going to get the things that the market is banking on until you can get over the hurdle of obamacare and whatever they're going to do with that. that's sort of already been stated and senator hatch just made the point, at least certainly i could take away from that, that they're far from the finish line on figuring out whau to do. >> far from the finish line. far from the finish line of a replacement but not of a repeal. that's what i took away from it and i thought that was interesting, quite frankly, because he was talking about the idea that, hey, look, we've got to find the replacement but in the meantime, there will be monies there for that during the repeal process. so i don't think -- i think part
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of the problem that we've seen going forward ever since just a couple of -- a little over a month ago people wanted instantaneous. that will never happen in the government. >> i'm tell you there's no way -- political conversation, but there's no way the republicans are going to repeal obamacare and risk breaking it and then owning it. >> i agree. >> if you repeal it and -- first of all, these are all euphemisms and semantics. >> turns the market into more turmoil. >> you're just playing games with words because, first of all, there's a substantial people that demand the appeal of obamacare that didn't even know it was synonymous with aca. that's who we're dealing with in 2017. number two, look, you have a stock market right now that's selling as though you're going to substantive moves on tax and repatriation, et cetera, et cetera, on down the list. and i'm going to tell you, if you're banking on, well, we're just get obamacare done, we'll tackle the tax thing. this has been going on since
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2010, 2010 there's not going to be a wand waved and they'll, quote, unquote, deal with obamacare. >> lows of the days for stocks. here's what else is coming up on the "halftime report." the ceos of apple and jpmorgan meeting with shareholders today. both stocks picking up ground since the inauguration of president trump. are both set to move even higher? before the break, sectors and stocks that fair best after the annual address to congress from the president according to our partners at kensho. health care and consumer discretionary beat the s&p. jpmorgan, disney, jnj, united technologies are the single stock winners. for more on this go to cnbc.com/pro. my business was built with passion... but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one.
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home security. every situation is a little different. it could be about billing, simple questions like changing the phone number. sometimes, they want to upgrade, downgrade, but at the end of the day, you want to take care of the customer. one of the great things about comcast, there's always room to move up. of course, it depends on you, how hard you work. ♪ the dow's best performer in february. trying to lock in the best monthly gain in nearly a year for apple. joining us now is the number one apple analyst on the street, tony sacconaghi. welcome back. >> glad to be here. >> how should shareholders feel today as this meeting gets under way? >> obviously the stock has done well year to date. i think typically shareholder meetings are much more of an
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issue when the companies have been underperforming and that certainly hasn't been the case with apple. so i expect the meeting to be relatively straightforward. largely in line with their voting with the company's recommendations. >> is this stock because of the run that it's had? toni, we said it's the best performer in the month. is it starting to run out of steam again? >> you know, our analysis suggests that the stock is highly anticipatory of new product announcements. as widely followed it as we found that the stock appreciates out performs the market by an average of 1600 basis points in the six months prior to an iphone product launch. we're at about that stage. history would suggest that as you get more news flow around what the product is around what initial builds might be, that the stock will continue to outperform. we also believe that if there is
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more chatter or definitive knowledge about the potential for cash repatriation to the u.s., that would be a potentially very significant impact for apple because they could bring back over $200 billion in offshore cash and deploy that to buy back shares potentially. >> what do you make of what buffett had to say yesterday? not only their apple position in and of itself as second largest now valued at $17 billion but in the way that he views the company, part of it is our sort of own interpretation. he talks about apple having quite a sticky product in his words. you could take that to mean that he is solely focused on the area that's been the bread and butter whole time. that the innovation question isn't front and center for him or the folks who are running a good portion of the portfolio there. >> yeah. i mean, if we think about what mr. buffett's historical buying pattern has been he loves great
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consumer franchises, which obviously apple has. he loves recurring revenue. he likes discipline capital deployment. he issues large acquisitions. apple fits the bill on all of those things. and i think, you know, apple has 90% plus repurchase intention on almost all of its products. and that's reflective of very strong consumer franchise. so ng mr. buffett is correct in all of that. i think the real question is that the apple products are not true subscriptions and the risk to the products are that replacement cycles get pushed out which is what we're seeing with the pc market today. and if the apple iphone replacement cycle goes from 2 1/2 years to 3 1/2 years, customer loyalty could still be extremely high but the revenues per year would go down. and that's ultimately the risk, i think, longer term to the business. >> how big of a backstop, is buffett himself? >> look, he has a very strong following on wall street and so
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his step up in the investment is going to draw additional attention. but this is a very large, very liquid stock. he only owns 2 1/2% of it. so it's certainly positive but not in the way that it can be for other stocks that are less visible and where mr. buffett has a more concentrated position. >> toni, appreciate the time. see you soon. >> my pleasure. pete? >> well, i think the most interesting thing is, and mr. buffett used the word sticky, right? listen to what toni sacconaghi is talking about, he was talking about the retention levels. that's what really stands out for me, scott. and also he talked about the cycle, talked about 2 1/2 years, but the chinese market is very sensitive to the upgrade cycles. foreign factors, technology, all of those things mean a lot. 2015 was the beginning for them. now you get into 2017, you start looking towards the end of the year. i think although i've pounded the table for services now for about, what, the better part of
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a year, i think it's services and now you can add on that now the next leg up will be coming from the demand that we'll chee in china. >> it's only been a year. feels like it's been ten years. >> when ever the judge scoffs at you, pete. >> yeah. next time you scoff, pete -- >> 200 million hand sets they sell a year expected to grow at 8%. i think universally on this desk we would believe that that number will be bigger with the tenth anniversary phone this fall. to toni's point about how much we ramp, that was how much they ramped in the past, judge, versus what they could do now with this very significant upgrade. >> let's do our trader blitz now. first up, target. they missed the weak guidance is at the heart of today's sell-off. the stock is getting hammered today. >> right. right here in my own backyard. i've liked this stock. this is painful for me today. this is not good. but when you look out at the guidance it was awful. the stock is reacting exactly like it should be.
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and again focusing on groceries being one of those levels. they're really is painful for them right now. they've got to figure out off sets, scott. i'm not shaur what the answer is there. but the digital side was great. it was within if stores that's poor. that's something that brian is going to address immediately. >> you know when he's going to do it he's going to do it today on "power lunch," pete, because we have an exclusive interview coming up with the target ceo at 1:00 eastern time. all right. next up, valeant reporting its third straight quarter of double digit sales decline. doc? >> this is a situation where they beat top line, beat bottom line. but people sold immediately when this number came out, judge. the stock opened over 16 bucks a share. trading done under, $15, i believe, right about now at or near the lows of the day. this just was a signatul for people to say i'm just out. >> tenet health care. revenues below estimates. >> ugly. >> another stock getting hammered today.
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down 14%. >> absolutely hammered. stock resistance to a lot of selling pressure it's having over the long term. it's in the heart of the conversation regarding whether we're going to repeal and replace the affordable care act or not but i think longer term this is a name that on this pull back you want to acquire. >> amd, josh, a ten-year high. i think the stock is up like 40% in a month or something -- it's up 40% in one month. >> listen to me. this thing has not yet been fully discovered. by retail investors, by institutional investor, by hedge funds. it is in all the right places. very similar to nvidia. new ceo. tons of stuff done with the debt and the balance sheet. and now -- and now the innovation is what's starting to drive this stock. look, it's 23% above its 50 day. it's 80 something percent above 200. it's going to be volatile. today it hit a new high. dropped 4%. i'm going to be using these opportunities to own more of it on the way up on days like
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today. i really like it. >> sarat, give me something on price line. all time high today. >> all time. this is a good read through to travel. i would look at other web sites like exceedia and airlines. this is good for the economy. you're seeing the stock reflect it. >> brokered stocks under pressure today after another wave of trading fee cuts. steph? >> so i actually bought sochlt,trade, down 9%. the whole group is getting hit. i don't think the fidelity news is surprising. i expect all of them to cut prices. this is not where their bread and butter is. about 20% of earnings but, guess what, they make more money, much more money on the spread business on rates and the shape of the yield curve. plus, this company has very company specific things they're doing with a new ceo, cost cutting, and if it doesn't work they will sell out. aim buyer. all right. want to show you the market as well. there is the dow. it's down 45 points. senator orrin hatch who chairs the senate finance committee with us just a short time ago. in his words, very difficult to
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change the current tax system. maybe that has something to do with how the markets seem to react in the wake of our interview. we'll be right back on the "halftime report." what if technology gave us the power to turn this enemy into an ally? microsoft and its partners are using smart traps to capture mosquitoes and sequence their dna to fight disease. there are over 100 million pieces of dna in every sample. with the microsoft cloud, we can analyze the data faster than ever before. if we can detect new viruses before thespread, we may someday prevent outbreaks before they begin. the market.redict but through good times and bad...
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power lunch starts in 22 minutes. here's what's coming up at the top of the hour. big exclusive. you can't miss it. it's target ceo. he's going to weigh in on the retailer's profit miss. the big miss in guidance. the stock is getting hammered, off by 12%. you knew that if you were watching "halftime." does the ceo have confidence of the board. charles schwab, cutting fees. what it means for the brokerage stocks beyond the big sell-off today. and then, the countdown to president trump's big speech tonight before congress. a lot of promises. can he make the sale? now, sue herera has a news update. >> i do. thank you. here's what's happening, everybody, at this hour. hundreds of former employees of sterling jewelers the sarnt company behind jared and kay jewelry chains is claiming that its ceo and other company leaders presided over a culture that fostered sexual harassment and discrimination. that's according to a private class action arbitration case
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made public over the weekend. signet is the parent company of sterling and it responded with a statement saying, these allegations publicized by claimants counsel and reported in the media yes eight a distorted, negative image of the company. the company says the arbitration is about pay discrimination, not sexual harassment. colon and rectal cancer rates are surging among millennials and gen-xors. people born in the '90 verizon double the risk of colon cancer and quad drruple the risk of rel cancer. they were not able to determine the reasons for those changes. tourists are flocking to lake hyoko in central japan to see swans migrating. the lake had been closed for the past three months due to bird flu. that's the news update this hour. "halftime report" is back after a quick break.
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one year. for more on the cbs iq100 go to cnbc.com/iq100. welcome back to the "halftime report." i'm jackie deangelis. watching crude oil falling more than 1% on u.s. supply concerns. jeff killburg, oil has been trading this tight range. what's going to break us out? >> well, i think we are going to see a breakout. but remember, since december 1st we have been seen crude oil elevated above $50. we've seen record pubullish positions being established. we've been locked in this $3 range. still focus on the opec cuts which effectively, jackie, have moved the price of crude oil and now we're seeing that the opec committee move up to 60. i think right now the market wants to break out to the upside. >> jim, opec flexing its
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muscles, keeping it supported here. are the charts tell you a breakout is possible to the upside? >> last five days it's made an attempt. simple characteristic to almost all five of the days. putting highs and finishing solid and most of those days lower on the day. the breakout although some point in time it's coming right now it's rejected. on the other side of the story is nigeria increasing production. we know the opec story. there's also a little bit of a bir story, too. we go back to lower end of that trend, not out of it. 51 1/2. >> we've keep an eye on the bearish risks as well and more of an eye on the oil conversation on the online show talking to tom kloza, xloe globd of energy analysis. that's all at the top of the hour on futuresnow.cnbc.com. hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade.
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sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. welcome back to the "halftime report." consumer reports out with its annual topics in terms of autos. we're not going to go down the specific models for each category but the top brands is interesting. you've got audi number one, then porsche, bmw, lexus, subaru. the same top five as compared to last year. what's top american braid? tesla coming in at number eight. by the way, this is the first year tesla can be rated because it now has two models required
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to be rated. the weakest of the american brands, those coming from fiat chrysler, jeep rated by consumer reports as the second worst auto brand. as you look at shares of fiat chrysler, we get auto sales tomorrow. it's interesting when you see these types of report and you see jeep rated poorly in a report like this or from j.d. power, doesn't impact sales. they continue to be outpacing the industry. guys, back to you. >> interesting. where are the american automakers. you only wonder when mark fields and mary barra go back to the oval office what the questions are going to be now, phil. >> i wonder if donald trump is paying attention to the top autos pick. >> somebody in the white house probably is. phil, we'll talk to you soon. thanks. >> maybe. you bet. >> phil lebeau with that interesting news there. you guys want to chat autos? >> i own a jeep. love it. so to phil's point -- >> are you kidding me? >> you do have a jeep. >> you do. >> i've seen your jeep.
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>> that's right. bust around through snow and pothole sglsz gm is cheap. >> jon has a yosemite sam mud flaps on his jeep. >> i do. back off. >> homebuilders you wanted to hit, josh. >> i just feel like we have to talk about this because kay shiller numbers came in 2016nd they are screaming hot. and, look, the december number alone is almost a plus 6% seasonally adjusted. the national index is now above the bubble, about 1 1/2% above bubble levels from a decade or more ago. i want to point out. itb, pure play homebuilders etf. just broken out in the last week, perhaps anticipating this. it's already through. the more popular xhb, which has a lot of other housing related stocks in there. that's on the cusp of breaking out. hasn't happened yet. you can find a lot of individual names that haven't done anything since last july. recall, we had negative rates
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and then rates shot up after brexit, mortgage rates, too. that put a top into the home building stocks. now rates are simmered down a little. the ten-year specifically. simmered down a little bit and the stocks are launching. it's it's definitely worthwhile to keep on your screen. >> all right. we're trading financials as well, as jamie dimon gets ready to address jp morgan shareholders. we'll do that on the other side of this quick break.
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shares of jp morgan. always good to hear jamie dimon, wilfred. >> it is, indeed, scott. as you say, he's due at 2:30 pm. earlier today i got a side show with him in terms of the benefits of tech investment that jp morgan is seeing. he was very keen to highlight some of the quirky points there, the fact that they've cut the race to issue a corporate loan in half in terms of their tech investment delivery and the level of take-up in which they've got smart phones. what they expect from deregulation, what do they expect from tax reform. they were touched upon but those are the kind of topics we're hoping to hear more from on jamie dimon coming up at 2:30.
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the clear commitment that she sees more capital return to shareholders because they've hit an inflection point in terms of capital levels. that's even without any deregulation needed. so payout ratio expected to rise regardless of what we hear from jamie dimon later. >> wilfred, good stuff. jp morgan later today. >> i know josh thinks it goes above 100. i'm looking for bank of america to go above 25. move away from the banks unless there's an energy slant. market plays in the financials of where the money is going right now. kkr, evercore and amg all performing very solidly. it seems as though we forgot the transactional plays in the financials, visa having a tremendous year. that's a hundred dollar stock to me. >> you're suntrust. you like the regionals, right? >> i do. suntrust i like for
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company-specific regions. they've reinstructed the bank and have done a good job and can offer more in terms of the restructuring. in the southeast they're positioned well for above-average growth nationally. i like that one. i own jp morgan. so far, the comments are pretty much in line. but, i mean, if you look at their return on equity targets of 15%, that's quite good. it still is the bellwether. it still is quality bank. it's not where i think you'll get your alpha. you'll get that from a suntrust and e-trade hopefully and bank of america. >> 15 seconds. >> sure. daniel pinto put up some slides and said not a single losing day last year. and average 80 million a day, judge. so exactly what we all talked about here did kick in. fixed income trading and everything else, killing it. >> a quick break and then final trades.
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yes to low fares with nothing to hide. that's transfarency. sfx: clap, clap, ding just a few minutes right now, that man right there, brian cornell, target ceo, interview. i'll make that my final trade. >> i don't even think it's his fault. there's a secular change in the way we shop. and all of these retailers, one after another, will have these hit and miss quarters. i don't think we're returning to the glory days of store traffic, foot traffic. so the online has to work better. even if it does, there's massive
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price deflation. >> i'm sorry. >> you think it lies at the feet of mr. cornell? >> i do. >> i don't. >> walmart saw the writing on the wall and made huge investments. stock fell 10% that day, took months to recover. it's now back well above where it was when they made that announcement. cornell has been slow in trying to restructure this company. and now he's taking his medicine. it's going to take a long time to figure out. he should have been quicker, in my opinion. >> do they have the logistic capability that walmart or amazon have? >> they should have -- they haven't been investing. they haven't been investing. they haven't even focused on what have their store is, which is groceries, and getting their butts kicked on that part of it. >> quarterly number, amazon doesn't. >> that's not how you run a company to make the quarterly number. >> i totally agree. >> you have to strategically roll it out for long term.
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i totally disagree that it's not not cornell's fault. he should have been rolling it out a long time ago. i have questions. >> we have very capable people that will be asking him those questions. >> i'm sure they are. >> i would be happy to. because guess what -- >> "power lunch" starts right now. "power lunch" does start right now. as scott and the gang noted we are moments away from the interview of the day. the ceo of target, sitting down exclusively with us as that stock suffers its worst day in more than 18 years. target, reporting terrible holiday results, missing on both the top and bottom lines, slashing guidance for the current quarter and the full year. what we want to know. how can consumer confidence be at a record high, but target struggles so much? a can't-miss interview is seconds away. hi, everyone. m

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