tv Fast Money Halftime Report CNBC October 26, 2017 12:00pm-1:00pm EDT
$20 billion. carl, back to you. >> aditi, thank you for that of course it comes on a day where the president has declared a public health emergency regarding opioid health addiction and says the wall, a big part of it, is to restrict the flow of drugs into the country. the dow is up almost 80, as john said a big night tonight for tech giants michelle, thank you. let's get to the judge and "the half." welcome to the halftime report, i'm scott wapner as carl just said, our top trade this hour, big techs, big night. amazon, alphabet and others. will they deliver and keep that sector climbing? with us is joe terranova, pete najarian and erin brown. let's begin with that countdown to some of the most important earnings report of the season.
those big techs heavily owned and closely followed pete, especially on this desk you own microsoft and intel calls. you have a big idea of where you think this space could go next. >> right i've been talking about the value prospect of this entire group for a long time, but it's not about value, it's also about growth if you look at the growth aspect of intel, look at the acquisitions they have made. they have continued to grow themselves into a.i., all the different areas of growth. that's what they have needed to do they have done a great job of executing on that. and we said the day he was hired at microsoft, it's time to own this stock once again. that stock was $35 now you're talking about nearly an $80 stock why? because this guy actually had the vision forward to say, you know what, the growth is in the cloud. that's what microsoft is going to become. that's why tech is working, because they didn't just stay old tech they have gone to the next level and they have found growth. >> joe, this is where the money is, right? year to date amazon 29%, google
25.5%, microsoft 27% and facebook 49% this is where investors have been placing their bets all year long should they continue to do it? >> i certainly believe microsoft they should. you have less volatility than you have found in alphabet and amazon as well obviously i agree, pete and i are both long. i agree with everything pete is saying about the ability of this company to diversify into three business models. they clearly are emphasizing office 365, clearly emphasizing the hybrid cloud that's going to equate to a revenue growth consistent with what we saw last quarter up 7%. >> who's got the most to prove tonight? >> of the three, amazon. >> that's the one who's had a step back. it stepped back, down 7.5% goldman thinks they may disappointing on their guidance tonight. >> here's the thing, nobody really knows i read the goldman report, nobody really knows. the variability in amazon's earnings report is tremendous.
you never know how much they're spending on new initiatives and that impacts the earnings. so that's the one that has the big question mark hanging over it that's the one that's of the most interest from a sporting point of view. i think there's a theme that joe and pete are talking about that i really wanting to take further. pete, i think you pulled your punch frankly. there is -- in the tech space, there are value stocks that are becoming growth stocks. >> but we hate the word "value," jim, honestly. i love the fundamental story defensive and value, throw those out. >> you can hate it all you want. you can make a ton of money buying value stocks that matriculate to growth stocks case in point, microsoft you go back about three years ago, that was a value stock and it was left for dead and nobody cared about it. >> it was a value stock without growth that was the problem. >> but here's the comment that i'm making the growth -- i better get the punch line in here the point is if you look at an intel, that is a value stock that's becoming a growth stock
if you look at a cisco systems, that's a stock that has much, much earlier in the transition from value to growth my point is you can make a lot of money when these value stocks get rediscovered eed for their growth potential. >> erin, what's your take on where the sector goes? >> tech earnings -- aside from energy, tech is the best performing sector in terms of earnings beats operating income is growing 10%. you look yesterday at amazon's performance over the last couple of trading sessions and that to me is an opportunity to buy. i wouldn't bet against the sector and certainly wouldn't bet against amazon do you want to buy right into earnings maybe not. from an earnings trajectory perspective, tech is the place to be. it's the only sector you're seeing innovation, consistent performance with 10 plus percent operating income growth and i wouldn't bet against that. >> do we all think amazon has the most to prove tonight just because the stock has taken that step back?
>> the issue for me is the one area we talk about is the margin area, aws. last quarter it's not that they stumbled, but the growth is not quite what it had been and that's something everybody had been looking at for a very long period of time i think part of that is, and that's why this is an important night, is are some of the competitors out there finally able to get themselves in there and divide aws where they're not getting everything, because they are the king but are they going to get dethroned. >> aws revenue was 42% year over year if they're coming in somewhere around 45, i think that's enough given that there are some muted expectations surrounding amazon, so i would be a little bit cautious looking at amazon and believing that tonight they have to have blockbuster earnings i don't think they need to. >> there's this big bet that amazon needs to eventually show big profits. david einhorn was on our network yesterday. it's been suggested that this is a stock that's in his, quote,
bubble basket. here's what he said about amazon and we can react on the other side >> if you look at the value of these companies, it's assuming really, really large profits in the future, and it's hard to see where they come from the truth is that sometimes when you compete away the profits within an industry, those profits are just gone. amazon might be just a great example of transferring profits from corporate america back to the consumer that might be socially good, but i'm not sure why that's particularly valuable to amazon shareholders. >> that's david einhorn, don't hear from him all that often what about that comment that he made >> there's a lot in that comment and in the letter that he wrote. basically what he's saying is maybe the stock market isn't valuing profits anymore. maybe that's not what matters. it's innovation, erin, which is a word you just used maybe that's what it's valuing i've got to tell you, i've got some gray hairs and history may not repeat itself but it does have a history of rhyming.
this sounds like julian robinson in 2000 when he said for quite some time i don't believe these tech numbers that was much more of a bubble period than we're in right now, and he pulled the plug on managing money. >> is there going to be a comeuppance on amazon because of this issue >> no, i don't see that. here's the problem that i have with it. amazon has created an infrastructure that allows them an entree into other industries that we never expected them to be in. could they be in health care some day yeah, probably they could. i go back to whole foods think for a second, three years ago did you ever think amazon would bring your groceries to your doorstep? look what they were able to do to pricing >> but investors seem to -- and maybe this one is at the top of the list of the stock that gets the benefit of the doubt about everything. >> but they're not -- but they could be profitable if they wanted to. if they stopped innovating, if they stopped reinvesting in their business, they could be profitable today, this quarter i think that's why investors are willing to give them the benefit of the doubt
they're willing to take the leap that they're going to be profitable in their future enterprises because they have been a good consolidator of different businesses and disrupting sectors like whole foods, like the restaurants, like the supermarkets base. >> we're leaving one big thing out. petey, i love you, man, but you pulled your punch again. when you're talking about competition in aws, how about competition in the main meat of the business that is amazon. jet is out there jet has proved itself a viable competitor target has an online presence that is starting to gain a lot of traction. what if amazon actually is no longer the monopoly, not because governments have come in but because the capitalist forces of competition have come in. >> they dominate the space, we all understand that, and i totally agree with you, by the way. i think that amazon, there are those out there that are beating them at their own game walmart is one of them the jet acquisition was something that put them right in front of it but they have been doing investing for years. how about best buy, another company that goes right after them there are plenty who can go
after them target is on their way, but they were a little late to the game there are companies out there that can get the e-commerce. aws is what's really swinging things that's where they get the margins. and if that starts to disintegrate, scott, that's where this thing starts to come apart. if it comes in at 40%, hey, man, if people see this thing start to slide, it's like we talk about under armour yesterday, when you have a great valuation, an extremely high valuation but you suddenly start to slip, that slip is the beginning of the end. >> the other one with a heck of a lot on the line today is intel. right? jim and pete, you're involved in the name in one form or another, whether it's equity or options that stock in one month is up 9%. >> big. >> you just called intel a growth stock. >> it is. >> i said it's in the transition from value to growth now, that's got to be proven that's an assertion, it's an opinion, it's not a fact it's not a fact until it's proven they made a big acquisition. alterra is a very good one to
point out. i had forgotten that because i believe the mobile i acquisition is bigger. all the data collection coming in from cars today, a modern car, you need chips in there and the mobile eye acquisition gets them in there. it's definitely a growth industry the question is is it a big enough growth industry to matter. >> let's debate it right now we've got the number one ranked chip analyst joining us now. stacy, welcome back to "halftime. it's good to have you. >> good to be here, thanks. >> you have an underperform on intel so that tells me you don't think they'll live up to the hype today >> define the hype i wouldn't be surprised to see a slight upward bias. >> that's the hype i'm talking about. pardon my interruption, that's the hype 9% in a month, almost 18% in three months. >> see, look at why it's gone up it's underperformed year to date most of its peers are up and it's still underperformed and trailing even after the run.
i think there's a view that numbers broadly are safe, which i kind of agree with, but i worry about the mix. i think data center expectations are really what's key here those have to have gone up markedly, given the run. i'm not convinced that we're going to see any upside to that data center number and that's what you need to keep the stock going higher if that doesn't come in with upside i'm not sure it can support where it is right now. >> did you hear the conversations by some of the folks here who say intel is making the transition from value tech to growth tech again? >> yeah. so alterra, they said $30 billion in acquisitions for $2 billion in revenue intel's history with acquisitions is not great. with mobile i'll see, but they're trying to sell us on a 20-30 story and paid $15 billion to do it it tells you they didn't believe they could build that capability on their own, even with that
kind of a time frame in terms of being a value stock, i admit it's cheap on earnings but they have made some accounting changes that have boosted that on free cash flow, it's 19 times or more. that is not a value stock. >> jim has a question for you, i'm sure. >> you answered the question what you think about mobile eye which i think is one of the growth areas, but let's go back to data center because what i just heard you say is that's what matters. >> he also said it wasn't going to live up to maybe the expectations that you have. >> i heard him thank you for repeating it >> just making sure you heard it correctly. >> i heard it correctly, scott. >> before you go back and tell him he's wrong. >> i'm asking him a question. >> go ahead. >> data center expectations, haven't they come way, way down? you go back a year ago, expectations were, i believe, solidly above double digits. now you're talking mid-single digits don't you feel like that hurdle has become kind of low to clear?
>> it's high single digits right now is the guidance, not mid-single digits. even with that, they have had a hard time getting there and they were calling on the last call making the point that comparing it was high. i made the point over five years they're still looking for low double-digit growth. the compare is always going to be 10% i don't think that they need to think about it as a high compare, but they were calling that out in general, you have potential competition coming in. you have the shift from enterprise to the cloud, which is deflationary. you have growth even where they're looking at it more and we've seen margins come down as long as -- at the same time that the growth has come down as well and i think given the stock performance, it's broken out of, what, a 17-year trading range? i have to believe that at least buy side investors are looking for more from the data center than what has been currently
promised and i'm not sure we'll see that tonight. >> let me ask you about nxpi which you downgraded today. >> yes. >> but you keep the price target -- you put the price target at 125 so you raise it. >> yes. >> i'm assuming that has everything to do with expectations of the qualcomm deal and what the ultimate price may be, am i right >> that's absolutely right, yeah look, i think they said that it might push out a little bit, and so we're going to get an interesting game of chicken as we go to the end of the year but i do think that a boost, a bump to the price is likely. i think the tender rate right now is 3%, needs to be 70. we've got activists involved i do think it's likely but i also think nothing happens yet at least until the eu and china approvals come through once that happens, we'll go into overdrive. but it's not hard to see a fair value in the deal situation of 125 but from a sale side
perspective it's not quite enough to keep the buy on it we took numbers up, took the target up. at least from where i'm sitting, it's time to get off the bike. >> a lot of people are on the bike on nvidia >> it will work until it doesn't. that's another one where data center i think is key. people are looking for an inflection as we go into q3 or q q4 they have called out a little pause on the older generation as customers are waiting for volta. i think the stock will work. >> stacy, thanks for the time as always. >> thanks, guys. >> stacy rasgon joining us today. what do you think? >> he kept point out the one area that we all know you'll be looking at and that's data center is there growth there. there's a reason people are coming in aggressively 18,000 of the november 41 calls were bought today. why are they coming in today on
that because the stock looks like it wants to break to the upside. >> are you talking about intel >> absolutely. and i think that would be true of nvidia as well. right now data center, cloud, those are the areas people are looking for growth they have been buying into the growth area and intel, i know they have had to spend a lot of money but it puts them there almost immediately 13 times you look at their cash position, you look at the growth on earnings and revenue, this is a company that i think can very easily break out to the upside. >> we'll see what happens after the bell. how about twitter today, it's on pace for its best day in more than a year our josh brown owns it and he joins us on the phone. a respite today because it's been down eight straight sessions and now you get a massive bump is it deserved this high >> hey, scott, how are you i think -- i think 50 million shares short is probably helping the cause a little bit today i didn't think it was such a great quarter, but who cares
what i think but there were a couple of highlights and i'll just point out two of them. the first is that they're talking about the high end of their guidance indicating the first profitable quarter on a gaap basis that the company would have reported since coming public so that's kind of a big deal if they even get close to big deal the second positive, and not a lot of people are talking about this one, daily active user growth year over year is up 14% this quarter that's over a 12% advance last quarter and it's double what they did this quarter last year. so daily user growth is accelerating it's actually doubled year over year so the people that are there, 330 million of them, are on there more and that's one of the things that people have always said, twitter is a novelty, facebook is your life maybe that's shifting a little bit and maybe they're getting people more engaged.
maybe the algorithms they use are actually doing the trick and keeping people on there more look, i'm not willing to say this is going to continue forever. you've got to see like two, three quarters of that to say, okay, this thing is actually now figured out what it is. >> well, stock is back over 20 as we're talking, albeit by 5 cents. >> yay i am buried in this stock. >> you are suggesting that this could be a potential change to the narrative for the better >> so one thing about technology stocks, and i think everyone on the desk will agree, there's this -- there's this binary thing where either they're growing or they're dying and there is no in between and so when you think about even like social networks my space was growing and the minute it wasn't, it was over, it was dead and they wrote the obituary before it was shut down the narrative on twitter is it was dying and that's not true. so if it's not dying, then it is growing. it's not growing fast, it's not
instagram. but if we're not calling it dead anymore and we're talking about profitability in sight this year, then it's a new narrative and maybe that's enough to keep this thing out of the teens. but again, we've seen one of these quarters every year where they astound us with out of nowhere things getting better, but then the traction doesn't come back in the next quarter and everyone gives up again. so that absolutely could be the case here. that's why i don't have pompons just yet. >> thanks, josh. we'll see you back here tomorrow. >> see ya. let's go to meg terrell who has a news alert. >> we are looking at nses therapeutics a director of that company has been arrested and charged with racketeering associated with the company's practices around the opioid-related drug fentanyl the stock down now almost 10%.
this loads on top of previous charges against former executives of this company, insys. this is the first criminal action around the opioid crisis here in the united states. kapo kapour, the majority owner, is expected in federal court today. so insys back 10%. let's get back to twitter and get some commentary from the desk what do we think here? >> personally -- >> this is one heck of a gain. >> it is and i think josh brings up the best point it's 50 million shares short the average daily volume is somewhere around 60 million. 50 million shares short. now look at the analysts coverage of it i think there's 36 major analysts that cover the stock. only three of them have a buy on it i think this is the unwind how long and how far that unwind of skepticism and negativity surrounding the stock can go, i don't know it's $20 right now, but there's more to come clearly than what
we're seeing just in a couple of hours. >> the suggestion josh makes is that maybe you do have a narrative change for the better. >> he talked about it minimal, but 4 million users. yeah, i think it makes it very interesting. my read-through right now is they talk about the click through and all the rest of it being very strong. video, that stood out for me what does that mean? it means facebook. because facebook, where is their growth area, where has mark zuckerberg been pushing things more and more, they talk about video. is video is working for twitter at this stage, how's it doing right now at facebook? my guess is very, very good. coming up, bank of america's ceo, brian moynihan, is with us live and exclusively yeah, there's a lot on the agenda as well rates, the fed, his soaring stock price. it's up 65% in a year. can't wait to talk to him about at "halftime report" is back in two minutes.
like bristol meyers about a year ago when they failed that drug test stock came down and started to rally back from there. but this had a different smell and not a good one they cut their guidance, there's no catalyst for this it seems they're not aware of what sales were going on for their product. that's concerning. it draws into question whether management knows what's going on if you're not in this, i would stay away. if you're in it, take evaluation of what management is doing. buffalo wild wings up 15% -- oh, my god, 20% now. our friend mick mcguire is having a pretty good win here. this morning he gets a 20% bump in the stock stock looks good at 120. who new boneless chicken wings were the answer. >> let's do bristol meyers reporting a mixed third quarter. >> revenues are already. i like the guidance that they gave they raised that up a little bit and i think that's the most
important part of what was delivered today. it's a name i'm not in right now. i prefer to be in pfizer and merck, but bristol-myers gets very interesting. >> transports are down after posting the worst day. >> you have industrial volume which is really strong and incredibly tight capacity driving pricing for 2018, so i think the future looks bright for the transports i would say here, i do think the large cap transports are for better value >> all right bank of america is the top performing financial stock in the past month, up 12% our wilfred frost is in new york city with an exclusive interview with bank of america chairman and ceo brian moynihan it is his first interview since the bank reported third-quarter earnings >> i'll here with brian moynihan very good afternoon to you thanks for joining us. >> thank you for being here. thank you for coming to our house. i see you've got your branding
up. >> we did. we managed to squeeze one side in alongside about a hundred of yours. i hope you don't mind that let's talk about markets in general because they continue their extraordinary rise of late when you consider also that central banks are changing direction, and also that huge flow of money that's gone into passive products, does it concern you that we might have a pullback due that could be bigger and come sooner tha perhaps some are expecting >> i think you start with the central bank unwind, never been done on the other hand, i think no central bank will unwind and hurt the economy and hurt the underlying economy because that's their role in life, to make sure there is growth and things like that so i think it will be -- until it's passed us, it will always be a question of will it happen right, will the markets receive it right, will the stuff land in the right places and i think that's a concern i think it's one everybody is thinking about and forewarned about. in terms of the broader market and the structure of passives
and actives, there's a lot of flows in but there's still underlying shares held by a lot of different types of people at the edges, everybody gets very concerned about this and we rightfully are we think about it all the time the reality is everybody has looked at the last flow in as opposed to thinking about the broad underlying holdings so we'll see it play out. there are possible outcomes with more volatility in the short term right now there's so little, it could help a little bit from trading revenue. >> in terms of the record stock market closes that we've continued to see recently, is the president right to take credit for those has he helped deliver them >> i think my 200,000 teammates think they have something to do with the fact we delivered $500 billion in earnings and i think people at every other company think that at the end of the day the environment of a pro business environment with tax reform but more importantly regulatory rebalancing, not taking it away but coming in the middle, those are good ideas for business. and then you forget that the economy is fundamentally growing
at 2 plus percent and that ca compounds into earnings. i don't take credit when things go right or wrong. i think it's a multi-facetted question but on the other hand the environment you create is the same environment you're working in, it's more pro business and people like that. >> when you talk about loan growth, year to date for the industry, it's essentially been flat it's only up 1% and slow corporate loan growth has been a big part of that if we did see a tax reform bill, do you think there would be an immediate impact on metrics like that and the economy straightaway >> i think there will be immediately impact and that people will have the optimism which is built around and is part of the problem for many policy decisions, the optimism wasn't fulfilled is there danger of a retrenchment if it doesn't pass? yes, absolutely. do we need it as a country yes, we need a lower tax rate to be excessive
we need to have territorialism so people don't move business around for tax reasons i think it's very important to the country and i think people will drive their expectations off that if they're more optimistic, they'll borrow more and loans will grow up but we're seeing decent growth every year 5% to 6% up we're not growing as fast as other people two or three years ago but we've been steady. >> let's talk about your company and the earnings recently. you've executed a pretty impressive cost-saving turn-around. core expenses over two years down $2.4 billion, yet core revenues of the same period up $4.6 billion, which a lot of the analysts have been commending and focusing on. do you now need to invest in order to grow or can that cost cutting alongside revenue growth continue for a couple years more >> well, there were -- if you think about what we've been able to do, we've been investing the
whole way through. even when we had $72 billion in operating expenses five, six years ago down to the 50 odd we have now, we were investing the entire way more sales people, new branches, whatever, new physical planting and stuff so we've been investing along the way and that's what we talk about as part of our responsible growth thought process. we have to be sustainable. we have to be able to invest in the future in a slow growth environment. what does that mean? we have to become incrementally more efficient as we reach the $53 billion target we have next year, we tell people to expect those expenses to maintain flattishness not necessarily keep coming down but as revenues rise that's power for an operating leverage platform this quarter it was 1% revenue growth, 3% expense decline other quarters it's been 4% or 5% revenue growth and spenexpens went up a little bit in the aggregate, you expect we hold expenses here while revenues grow and that's powerful leverage in a company
like ours. >> part of the cost cutting has been reducing your head counting 5,000 head count reduction over the last two years since you took over, the head count is down 74,000 since 2009 or 26% does the pace of that head count reduction continue or does that taper off as well? >> it's tapered, and it's different. it's tapered because there was so much to do back then and we're kind of in a different place. let's think about it year over year we added 2,000 sales people at the same time we took the head count down by a thousand or so of total head count. what we're always doing is repositioning people so we're applying technology to process and that allows you to reduce head count. then you go and put in a front line if you think about that dimension, that's a very powerful dimension if you think about the amount of sales people in a company, it's up from 40ish, but the head count has been down a lot more which means we have more and more customer help, customer
relation managers. >> you mentioned technology which lots of the banks talk about, you do as well. are we at an inflection point for digital banking where this is going to take off and transform the industry or is it a slow move into digital banking? >> it depends on which aspect how fast the growth is we still are seeing double-digit growth in core mobile banking. people doing mobile banking with us active, having used it for something in the last 30 days. and we have a pretty -- pretty high level of them, pretty high penetration. getting double-digit growth means there's still demand for customers that don't so i think another question is what you do underneath it that gets to the auto loan mobile capabilities we have now and the mortgage loan mobile capabilities you keep adding feature functionality capabilities that the customers demand under that and that's where you'll see the benefits of it
so the top line of people that are mobile bank customers used to grow 50% year over year, 20% and now at 10%, but the reality is underneath that, the way they use it is tremendously helpful one of the points i used with our board is you're seeing our calls to call centers drop 15% per year because people are using the digital devices to help them, to do the work, to find the answers and stuff like that that's a powerful trade for us, even if it doesn't result in a sale what it's resulting in is people getting better customer service. >> and lower costs as well brian, we've got a couple of questions from the studio. >> brian, it's scott womanneapn, thanks for coming on the program. i do have a question as we look forward to what will be the next chairman of the fed. do you think janet yellen has done a good job and she should be reappointed by the president? >> i think the reappointment is up to the president and others the fed has done a great job i think of guiding this economy,
the largest in the world, back from over the last eight, nine, ten years now into a place that's very constructive, growing at 2%. so i think -- but i'll leave the appointments up to the people that actually make them. >> do you think it matters to the markets who the next chair of the fed is? given what you said, it would seemingly not matter to you. you must have an opinion of who may be better for your business in the way the markets work? >> i think any -- you know, i think just like when i became ceo, the seriousness of the task when you take over a stewardship of in that case the federal reserve monitor policy i think will result that there are many members on the process committee and the development of data. i think where people make great differences between a or b or c, at the end of the day the real facts bear out what you need to do and i think it will be less impactful than people might
speculate. >> i'm look at a story with a headline, big banks score win with scrapping of consumer class action lawsuit rule. it refers to that senate vote, rolling back that. it would have given consumers the ability to file class action lawsuits, as you know. given the shenanigans that went on at wells fargo and some of the other things that have happened at the banks throughout the last many years, do you think that was the right decision yesterday by the senate >> well, i think you have to sort that out. as it relates to our company, we haven't had arbitration in our documents since 2009 in deposit products a similar length of time and mortgages before that so it really wasn't a relevant issue for bank of america. we don't have those clauses and haven't for many years when you think about it in the broader context, as you think about the industry, the lessening of regulation of small
and midsize banks is a real issue. we as big banks have been for that in helping to try to create the atmosphere for which that happens. so i think this is another case where there's a belief in the system of the small and midsize banks that they're overregulated and this was another intrusion and that's what you saw reflected in the vote. but to bank of america, it wasn't a relevant question. >> given that the wells fargo scandal has rattled on so long, has that annoyed you and some of your fellow ceos as banks that started to come out of the cross hairs a little bit have you felt that it's dragged the industry back into them a little >> our customer scores are as high as they have ever been, higher than they were before the crisis, higher than when the stock price was this or that and so i think our customers see in our company what we do for them the way we run the business model, you know, we've been doing it for many years now. it's responsible growth. we try to get the primary checking account in the household. we want the products to be used. so i think it hasn't really been that impactful on us. >> switching focus, brian, a lot of your peers have mentioned
bitcoin recently which camp do you fall into, the fraud camp or the opportunity camp >> i think the question is something that has to be thought through from a policy decision the ability to track massive amounts of money moving through is tricky. the idea of digital currency is nothing new. half of our consumer payments are digital. so this is not something new and different. it's the anonymous thing that causes debate from an operational perspective. from the speculation, i'll let you and your colleagues talk about what it's worth. but there ought to be a hard look at the policy of anonymous currency because the ability to track is one of the things we use against terrorism and improper, you know, illegal behavior and that's the reason why there's only $100 bills in the u.s. economy you don't want large amounts of money to travel without
attribute. >> so bitcoin is partly used for crime. >> you can read the stories, as i can. >> question from joe. >> good afternoon. this is joe terranova. i check both boxes, both as a shareholder and a customer and i'm very happy with both of those conditions you've done a fantastic job over the last couple of years nearly nine years ago you picked up the merrill lynch franchise for $50 billion. as we sit here today, you see the movement towards passive investing. i read so many analysts' notes and the first thing they say is it's time for mr. moynihan to spin off merrill lynch or even to sell it where does merrill lynch fit in right now in your vision for this company moving forward? >> well, the issues facing the investment management business from revenue compression, passive investing trends, automation, robo advisers and all those things, we will drive that through, applying the technology in a way that's good for our customers and good for
our teammates and you'll see us continue to do that. our merrill lynch is one of the fastest growing on that side of the business we're getting 1 million above investors. the question is how do you handle the between where the investment strategies and stuff have to be very efficient for the investor given the amount of money and revenue streams for that so andy and terry and keith and katie are all working on this. spinning it off would be not good for anybody and it's a valuable part of what we do and it's an integrated part of what we do. we'll have tremendous referral flow between merrill lynch u.s. trust, between the consumer business to merrill lynch, between the 401(k) platform, all these businesses are much more powerful aligned and driven on a customer focused basis than a stand-alone company is and so it provides great value to our customers and our teammates and our shareholders and it will continue to do so. >> brian, this is pete najarian. it was so impressive this last quarter, the customer loan
growth that you guys were able to put up. by the way, i'm a shareholder since 2014 i believe in the company. >> thank you. >> just like buffett i continue to think you guys are doing everything right how does the loan growth look to you going forward from here as we start to see the ten-year and all the rest of the movement that we're starting to see in the bond world >> well, we see -- if you start from what drives the economy, the consumers do we've seen year-to-date consumer payments, cash, checks written, debit/credit cards are up, 6%, 7%, which is almost twice the rate they were up the last couple of years year over year and that's through ten months almost the consumer will drive that economy. loans will follow that our jab is not to create the economy, our job is to facilitate it and provide the grease that makes it happen and our loan growth is reflecting that capital markets are wide open so that puts pressure on people, but that's part of the flows and we do that business also so i think you'll see good,
solid mid, single digit loan growth in the consumer businesses you'll see slightly faster in the core businesses because of the catchup in market share they're getting. >> just a quick question on brexit we heard from lloyd blankfein they said he was going to spend a lot more time in frankfurt you're moving some head count toward dublin. how significant a move is that do you feel brexit is shaping up the way the negotiations are going to be a significant threat to london as a financial center? >> i think it's not good, because without brexit hanging overhead, we'd just be out plugging away, working for customers, you know, adding people, bringing teammates into london all of that gets pulled into question so it's not good. it's not necessarily what everybody thinks about traders like this on the floor, it's the accountants who support them, the hr team that supports them, the legal team, the investment bankers, the corporate bankers, the people that run the cash management franchise so the idea to have a hub that
supported a region of that size as big as the united states is no different than new york for the united states. when i think about i can't quite operate this way, it's disruptive every industry is going through this it behooves us all to get a set of rules we can understand the people voted did we all want it not to happen sure but they voted and now the question is what are the rules i think if we can get some rules we can figure out how to mitigate the impacts to everyone if we do this perfectly, the clients don't get any better service. so there's no upside, it's just can we avoid the downside. whether it's lloyd or myself or jamie, james, everybody is trying to figure out how do we make sure the downside doesn't occur, there's no disruption in the markets. that's what we're trying to avoid. that never plays well to the incumbent and that's what lloyd is facing. >> brian, thank you for joining us and congratulations again on the last set of numbers, the share price up nicely since then an it's been great to be back
here thank you very much. >> thank you >> thank you guys on the desk too. >> scott, back to you at hq. >> thank you very much thank you, mr. moynihan, very generous with your time. i'd like to welcome you back to "halftime. ahead, pete tracks unusual activity in a tech stock we'll be right back. you know who likes to be in control? this guy. check it out! self-appendectomy! oh, that's really attached. that's why i rent from national. where i get the control to choose any car in the aisle i want, not some car they choose for me. which makes me one smooth operator. ah! still a little tender. (vo) go national. go like a pro.
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welcome back to "the halftime report. shares of tenet health care are falling sharply. the hospital operator has ended a process to sell itself this follows the departure of its ceo this month sources tell those reuters reporters that the decision will allow tenet to focus on selecting a permanent ceo who can make decisions about the long-term future of the company. that's one of the stocks we're watching, down 9% ghrit now. keep it right here on "the halftime report. we'll be back after this commercial break zar: one of our investors was in his late 50s right in the heart of the financial crisis, and saw his portfolio drop by double digits. it really scared him out of the markets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68.
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welcome back to the halftime report. the dollar index hitting a three-month high and accelerating gains against a weaker euro. the dollar index rising through the 94 level is this marking a turn around for the greenback? >> it is for me. i have been saying for a couple of weeks if it settles above 94 i would become more of a bull than i was i am now it's a 1-2 punch you mentioned the ecb announcing they would buy less bonds which you would think it would strengthen the euro but the market thought they would be more aggressive on that. there is a second punch. the rumor that perhaps janet yellen isn't in the running for the fed position might mean for a more hawkish fed those things combined mean for a dollar rally. >> 94 is a key level where do we go next? >> well, i don't have any resistance until 94-98 we have a little ways up above
i think the ecb is a big part of the statement. i think he's happy with the recovery in europe but not convinced that it's real yet that's why he's delaying interest rate hikes until 2018 or 2019 rather that's put pressure on the euro making the dollar stronger. >> meantime on the live show today we are joined by the chief investment strategist at nuveen with his latest on the news, earnings season and state of the market rally at the top of the hour on futures now.cnbc.com halftime is back after this. this is where i trade andrs. manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7.
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all right. final trade time pete, you have unusual. >> nuanced january 16 call stock was lower. keep an eye on it. i bought him today. >> short uk stocks. >> phillips 66 is going down. >> keep buying marriott. >> that does it for us thanks for watching. power lunch begins now. >> here's what's on the menu the battle to be the fed head. a group of house members asking president trump not to reappoint janet yellen we'll find out why and what impact it might have on your money. the opioid crisis. the president expected to declare it a public health emergency. you'll hear from a former wall streeter set to tell you about his experience with addiction and how he's helping in the recovery efforts plus, the morningstar mirage the "wall street journal" slamming the star rating system. morningstar defending itself you will hear from their head of research about it. i'm brian sullivan power lunc