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tv   Fast Money Halftime Report  CNBC  February 20, 2018 12:00pm-1:00pm EST

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high-flying tech stocks getting a bid, invidia up four >> near session highs, but looking at the dow, it is pairing those losses, but walmart still the biggest drag worst day since october 2015, down 9%. >> with all that, the back to the headquarters with the judge and "the half. and welcome to "the half-time report." i'm scott wagner the great stock debate after the correction and now the comeback, where will your money work best in the months ahead? two market watchers offering two different views on that question their notes are the talk of wall street, both will join us live in just a minute to discuss and debate with us to do the same for the hour, joe, steph, kevin , i want to get right to the debate with
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you. kevin, upgrades on u.s. equity they say fiscal stimulus is super charging u.s. earnings growth morgan stanley has a bit of a differing opinion. they talk about, you're going to get good gains through the first quarter. and then all bets are off after that >> you know, the effective tax rate and whether you should be overrated u.s. domestic versus europe is really the call of the day. i say there's nothing wrong owning u.s. stocks and there's lots of opportunity in the mid-cap space to see the change in earnings but to ignore europe, the black rock call, is wrong. make the nestle, let's assume you think the u.s. dollar's bottomed out half these companies have their companies in the united states why wouldn't you want to own them when you have a currency going back up if you have growth if black rock makes a call against europe, they have to make a call. i'm putting every dollar domestic i buy europe as well
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i want to own nestle and american british tobacco because the earnings momentum is just as interesting as what we have going on in the united states. and their dividends are succulent. >> okay, so then, josh, how do we figure what the benefits of the trump tax law are versus rising rates they play right into one another and will impact where stocks go from here. do they cancel each other out? >> you can almost make the argument one might cause the other. so if -- i'm not convinced on this, if this huge corporate tax boon does generate at the levels of activity that secretary mnuchin and others have suggested in gary cohen, then you're going to generate a need for higher rates, just by default. >> those are two different questions, though. it's like, okay, is it going to spur level the of economic growth that they say, that remains to be seen is it going to -- >> but that answers your rate
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question. >> does it increase cash flow? does it encourage companies to spend more, to invest more, to buy back stock more? all of which seem to be givens it's going to have a dramatic impact on the corporate bottom line whether it translates to gdp to the level they say is another story. i gave you the scenario as to why stocks could go up because of that. >> if the administration is right, that this is the thing that's been necessary all along and the timing is right, to jump us into the 3% to 4% gdp growth rate range, well, that's great however, along with that, unfortunately, does come rising wages for employees, does come more demand for commodities. as a result, higher prices and let's not act like we have never had a capex bubble before. we had one 17 years ago. as a result, we had to have higher rates and that choked that off and ultimately we ended one a mild recession in the real economy, but an absolute disaster the
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stock market. >> can you make the case that earnings will be super charged enough that that's a reason right now to upgrade u.s. equities as black rock has done today? >> i think you are upgrading u.s. equities you want to make it look exactly the way it looks today, because technology is leading the way. and when you compare europe to the u.s., the composition of the u.s. equities market has far larger of an inclusion from the technology side. and that growth story. so if you believe that growth technology is going to continu to outperform as it has, then yes, you like the u.s., but i kind of agree with what kevin said before, part of this is a currency call. and given where valuations are on all of asset prices, the right strategy is to be diversified and have the u.s. have the european exposure and the emerging markets >> what if you just factor in the u.s. earnings boost, super turbo charged, whatever words you want to put behind it, that it's going to happen as a result of the tax law >> well, we have been saying
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that, though we talk about fundamentals all the time when the market corrected two weeks ago, you have to go back to just the fundamentals and focus on what matters. you'll have gyrations in the market, volatility in the market, but if fundamentals are strong, people will come back to the strong fundamental stories i don't know if i want to say i want to buy the entire s&p 500, because it's actually not that cheap. but there are individual stocks that have corrected 10%, 15%, that i think definitely are interesting to buy here. now, in terms of europe, actually, i own, i run a u.s. fund, right? i actually have been adding to some european stocks because the valuations are so much lower and i think the upside, especially in margins, there's a big margin story, i think, overseas so again, it comes back to fundamentals, i'm stock picking and i think you can own both. >> it's a big deal when the world's largest asset manager goes upgrade on u.s. equities.
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the opposing view to put forth today, you'll hear both sides, it's from morgan stanley, which says, again, it's going to be good through the first quarter and then a tricky handoff into the latter part of the year. mike wilson who has been on the program numerous times, you go to 3,000 on the s&p, but you could have at least one if not several 10% connections after that >> well, look, i think we're talking about timing here, okay? josh, you mentioned something like the capex bubble has happened before, it certainly has. we have seen higher interest rates before we are talking about when this happens, though. i'll be very blunt, i think we have one last glorious leg up in the bull market. the bull market that start in 2009 i think it will take longer than a year for this bull market to run its course so the morgan stanley article that says that maybe through april, you've got the gains and then the volatility really starts to roll over, look, we'll have increased volatility, but i think the gains are going to extend through the end of this year for all the reasons, steph, you pointed out. basically, the fundamentals are
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intact, number one number two, if you don't like the market multiple, you can find plenty of stocks and build a diversified portfolio at multiples lower than the market. finally, you have to observe the writing on the wall. look at the market today, right? after a fabulous week last week, we started out in the red and picked up a little steam to the red. and then just surged back and we're positive now. >> because it was mostly walmart steam to borrow -- the morgan stanley strategy -- t >> we are back to where we were at the beginning of january. >> the dow recovered 6% of the sell-off, the nasdaq, joe's point talking about tech, recovered 80%. >> and it's going to continue. i don't see anything fundamentally that has interrupted this and from a technical point of view, this market is surging. >> let's get the opposing view, if you will, on the other side of blackrock today, it's morgan stanley. andrew sheets, the gentleman who wrote the note says the recent pull-back was an appetizer, not
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the main course, warning that gains will be harder to come by after the first quarter. he's with us from london welcome to "the halftime report." nice to have you here today. >> nice to be here. >> what's your argument? >> so i think there are a couple of factors if we think about this year, and i think when the best environment for returns is going to be, i think it is in the first quarter and through april when global growth is going to look the best, when inflation is going to look the most stable, when real rates are still within the range that they have been in over the last five years and i think as you move out of that period, we're going to face an environment of rising inflation, we're going to face some, i think, normalization and mean reversion in indicators like pmis and economic surprises. and i think that will present a tougher and trickier market after as we move into the back half of the year. >> do you agree with your u.s. colleague, mike wilson, who is looking for at least, if not several 10% corrections in the mid to latter part of the year >> i think that makes a lot of
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sense, to be honest. i think that is also pretty common if we think about late psychmecycle environments and we are in a late cycle environment with gains but with a lot more volatility and attention between rising inflation and tightening policy and that growth environment. so i think that that playbook that mike's had, i think he's been very consistent with that, both last year and this year, is, i think, makes a lot of sense. >> but wouldn't you have made the argument and couldn't you make the argument, and i am sure some did, we were in a late cycle environment or you could have made that case before the tax law was passed, and now that this transformational tax law happened, it almost reset the game isn't that a fair way of portraying sort of where we are? >> well, look, i think that is a very fair point. calling the end of the bull market is very dangerous and tricky it's not something that i think anyone claims to have great precision over, but i think specifically to tax, i think in our view the real important point is that you have seen a big change in the estimates.
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the estimates have soared. and that is a change, that is not something there two months ago or three months ago. so i think in our view, what that sets the market up for is a much more standard pattern for earnings observations going throughout the year where they start out too optimistic and come down. so on the other side of that -- >> i'm sorry, the other side of that, some make the case they may get revised but revised up because expectations were still too low after the tax plan because no one truly knows what the turbo boost could potentially be if you want to characterize it as that. >> well, again, i think we're a little more on the skeptical side of how much boost that that will have. i think about our growth estimates for this year in the u.s. it's 2.3 on gdp or 2.4 i think a number that is good by the standards of the post crisis era, but certainly not something as high as others. so again, you know, i think when
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we look at those earnings, how much they have been revised up, how broad the revisions have been, i think that is leading us to think that you may see more of the standard pattern that as the year goes on, as pmis moderate, three or four months from now we'll be discussing inflations rising, pmis at the peak, and that may cause more uncertainty in the markets >> hi, andrew, josh brown. one of the most popular themes in all of the macro research coming out on the street over the last few years has been the idea of handoffs and each time we were approaching a quote/unquote handoff, it was a question of whether or not risk remained through it and whether markets would be able to fight their way through. so just like very quickly, the case you're laying out is, global growth will moderate or activity will moderate into the second quarter but, at the same time, that's happening inflation pressures will continue to rise. so that is a handoff
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we heard similar things about the election cycles in europe and here in the u.s. in '15 and '16. that was another handoff we heard about the fed doing its tapering and then tightening that was a handoff the markets have been very resilient through each one of these things that the macro strategists were concerned with. what is it about this one that you think is different or why we should be more concerned given how much we have already been able to fight off? >> quell, look, i think that's a very good point. you can go back to early 2015 when pmis had peaked and were coming down and the fed was tightening and inflation was rising and that was way too early to turn bearish on markets. but a couple things specifically do give us pause i think we are coming off of a period, a real exceptional period last year, that was about consistent downside surprises and moderate inflation in light of strong growth so i think the market hasn't really had to handle and struggle with that tradeoff between rising inflation and
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potentially weakening growth indicators for a long time and the fact that it's been a long time increases the risk we have also had very large upgrades to earnings we have had a catalyst arrive in the u.s. in the form of tax policy so it is already here. and that makes the aftermath a little bit harder. so again, i think these things are always very difficult to time it's very fair, you can find trades in history where inflation was rising, the fed was tightening and it was far too early to sell. but it is a reason that we really like the european market. and we think that the european market from here is poised to outperform i think it is in a very different place when it comes to the evaluation of equities versus bonds i think it is an earlier part of the policy cycle >> one wage number does not inflation make, right? is it possible that the market overreacted that friday to that number and then the correction was extensive by other factors, by some of the volatility
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products, et cetera? >> well, look, i think the challenge as we all know markets love to extrapolate. summer of 2016, the market was convinced there was never going to be inflation ever and by december of 2016, they thought there would be a lot of inflation quickly. and then we swung back and so i guess i think the challenge that investors are going to have to face is, if we think about core inflationary measures in the u.s. and europe and japan, you know, the numbers, the march numbers reported in april will show a pretty sizable jump. now, there are some one-off factors at work there. then the numbers rise again in may and rise again in june and all of a sudden, it's going to start to look like a trend. it's not necessarily about inflation going to 3%. it's, i think about a trend in inflation that is steadily downward for much of the last 12 to 18 months, starting to look like it's turning up and markets doing what they often do, which is extrapolating based on that. >> great conversation. hope you will come back. thank you for joining us today
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>> thank you good to be here. >> andrew sheets from blackrock. sorry, that is morgan stanley's andrew sheets. and the man who upgraded u.s. stocks to argue about the trump tax cuts pushing stocks higher is live with us today by phone. good to have you on the phone. welcome, richard. >> great to be here. thank you very much. >> i don't know if you heard much of the conversation, but it is a great debate on the street today in the sense it is blackrock that says stocks are going up, earnings are going to be turbo charged, morgan stanley says maybe in the near term, but not so fast longer term. there are a number of other issues we'll have to deal with, maybe estimates coming down or inflation picking up higher. >> i do think a key issue is what is driving the market in the next few months. and that is going to be earnings and we have seen a spectacularly
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strong earning in the u.s., not just for growth but for revenues you are see strong earnings picture now being super charged by tax cuts. so when i look at the headwinds for the market going forward, those are headwinds of higher rates, high evaluations, those are all relevant, but i think the most important determine of the market returning, which is always true this part in the cycle, is corporate earnings >> but you don't think that rates could rise enough that it's somewhat of an offset to the multiple that you could justify because of those higher earnings in which you mentioned? >> i think you're going to see the rising rates are going to cap any re-racing of the market, any rise in the multiples. when you're looking for higher return, one of the things very different about 2018 from 2017 is going to be driven much less
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by revaluation of the markets or ratings going up and much more about earnings but just think about the buffer of those things, you're going to get close to 20% earnings growth in u.s. stocks this year 20%. that gives you huge protection from any potential rate in the market you'll see over the next 12 months. >> hey, richard, it's joe. in 2017 we saw strong dispersion does it concern you that in your call in 2018, it seems as maybe we have lost a little bit of that clearly when looking at small caps underperforming, the dow underperforming, and you are seeing this be a growth-oriented type of rally so far year to date led by technology does that concern you from a dispersion standpoint? >> not yet and the reason is, when we still look at the rest of the market rally, it's still strong so this isn't just about technology yes, technology is doing very well yes, many technology stocks are
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leading the way driven by earnings, but you can see strong earnings and price momentum in sectors across the market. 10 out of the 11 sectors delivered significant positive earnings in the last quarter so we look at that momentum that is coming, it's the breath of that momentum by sector. and actually the breath geographically it is not just a u.s. story, more positive on the u.s., but it is not just that momentum to give us confidence >> we mentioned already that maybe part of this call is dollar-related, both yours and morgan stanley where do you see the dollar going? and ultimately, what does that mean for the way that you've tried to factor in where stocks could go >> well, this up doesn't play a huge role in this -- what we do see is dollar stability over the next few months. and the dollar stability is enough for the u.s. market to do very well. when i think about what are the risks to, not just the u.s. market, but global markets going
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forward, and one of the risks is we get a significant spike in the dollar as u.s. rates rise. that's exactly not what has happened it is very different from the tape where they did get the dollar rise and you saw rates cause a disruption in the market we have not seen that, that's a positive sign going forward, but a spike in the dollar as a risk, it shouldn't be a base case. the base case is dollar stability. that's enough. that allows the earnings power in the u.s. to come through. >> would you have upgraded u.s. equities without the most recent correction >> yes, we did that. i think the recent correction provides attractive entry points and i think, many investors have been talking about the opportunity to buy the dip but the reason for the upgrade is really about the changing view of earnings that we see coming through before we saw the recent dip in the markets. >> sure. that is precisely why i ask you the question, i mean, in the way that i did
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surely you can make an easier case, perhaps, to upgrade u.s. stocks after the tight pull-back that we have had, even given the fact that we have recovered, what did i say, 69% that the s&p has of its losses. is it the case, though, it certainly is easier to make if evaluations are much cheaper than pre-correction. >> valuations are here with the mark market both sides of the evaluation occasion have improved one of the head winds is they are more expensive than many international stocks we think they should be more expensive. you typically get higher growth and higher quality, stronger balance sheets in u.s. markets so that improvement in valuation, think i, does give you an attractive entry point. coming back to what we think is going to drive the market going forward. it is not a re-racing of the market we are not calling for valuations to go higher, but we
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are calling for that sustained earnings growth across many sectors, specifically tech not, also financial to benefit from higher rates, is those higher earnings across the sectors that will be important in driving u.s. stocks over the next few months >> richard, appreciate your time thank you for dealing with the technical issues we had and jumping on the phone for us. talk to you again soon >> my pleasure >> blackrock's richard turnill who is right >> the issue around going deep into u.s. domestic is this idea that you're underestimating the earnings power due to the tax change but we have started to see the s&p report and nobody really knows what the actual tax rate should be. the miss by walmart is actually 250 basis points on a tax judgment i think if you buy richard's story, you don't have the risk you basically have a situation where you have the full impact of the tax adjustment and this
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comes out of mid-cap companies >> you have made this argument before >> that is my question to him. why is small caps underperforming? >> well, i'm still saying that elastic band is winding up and getting ready to spring. because i've talked maybe 11 or 12 of those companies now in the mid-size and saying, what is a tax rate and they say, we don't know yet. we have not had the taxes interpreted for us by the irs and we are small so we're not going to make any estimates until we know what the code says. i think the upside in the back quarters is going to be in those mid-sized companied to the upside >> yeah, but if you believe in global growth, then the multinational companies aught to do very well i mean, if you -- >> but they are not benefiting from the u.s. tax cut. if the play is that you are underestimating the impact, look at the miss by walmart. >> i'm not just playing tax, tax plus good fundamentals from all the companies i listen to on conference calls, every one of them are talking about
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momentum to the upside internationally in brazil and even in china. i want to capture that and have the upside also from some tax benefits some of the companies are going to benefit from it but they have the fundamentals to fall back on. >> i get that, but you're not getting the turbo charge from the tax. they are 30% increase in cash flow you don't have that in brazil. you don't have a president there, i don't think >> but i'm talking u.s. companies with exposure globally they will certainly get -- they will certainly get the benefit from -- >> you know why that argument doesn't work i'm with stephanie on this the reason that argument doesn't work is because george w. bush passed a bigger tax cut, actually, in 2003. and for the next four years, international stocks did way better than u.s. stocks. you can look it up, it's a fact. >> it wasn't the same. >> you get the accelerated cost. >> there's always a caveat, fine but i just want to make the
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point, i think stephanie is hitting on something important, just in terms of where there is earnings growth. people are finding a way to own the stocks if you look, this year, what is leading the market, it's still the companies in the highest earnings growth. the q's are up 20% this year in the biggest fastest growing company within the index so you don't have to look very far. >> that's multiple expansion, not earnings growth. >> but why are the multiples expanding, kevin multiples are expanding in companies where earnings growth is justifying that multiple expansion this year. it's not the same as in prior years, i'll grant you, there was a lot of multiple expansion because companies could do buy-backs. >> you don't think that to play kevin's side for a minute that companies aren't going to buy the you know what back out of their stock? >> what does that do ge bought 10% of the flow in 2016 look at the stock right now. >> okay. >> that doesn't save a bad stock. and it's not the sole reason to own a good stock so i think if you focus on -- look, if you're in the business
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of trying to be in sectors that have the possibility for outperforming, it hasn't -- >> you take a rate from 35 to 21 >> i'm just making the point that it has to be more than just what the tax cut is for the very straight-forward and simple reason that come later 2018 and early 2019, we're already lapping the results with that tax rate. >> can i point out that the bear argument from andrew seems to be focused on inflation and rates he laid out the extrapolation argument that march, april and may are going to get worse there's no evidence for that there's no evidence for that first off, the number, scott, that you mentioned from three fridays ago, the average hourly rating at 2.9%, there's a lot of questions as to whether there was noise in that. in you look at the supervisor workers, it was 2.5% that's 80% >> it was one number. >> that's exactly the point. you can't extrapolate from one data point, especially in such a choppy series. so look, i go back to what i said at the beginning, this is a question of timing
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yes, we're going to have higher inflation, we'll have higher interest rates i can make an academic rate that interest rates on the ten-year should 100 basis points higher it's not going to happen this year. >> you think we'll get one if not several corrections in this calendar year 2018 >> i don't think you'll get another 10% correction, no. >> how can you possibly say that >> i said i don't think. >> wait, wait, wait. let's be clear on what i'm saying. >> what planet are we on we could have a 10% correction for absolutely no reason >> i did not say you could not have one, i said i don't think we're going to have one. >> oh, okay. i think we are >> i want to point out the russell 2000 is underowned any allocation is light. people don't own small cap stocks and didn't have to for a long time. >> i think that's the bigger question the entire conversation, why is the russell underperforming when it seems as though it has all of the tail winds behind it now, it might do what it did last year in september when the
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russell basically broke out and was strong into tend of the year but when you have right now the tax policy changing, maybe the -- >> maybe the russell priced in more of the tax -- >> have you looked at starting valuations in the russell? let's not pretend they sell it at a discount. >> we have to take a break we have to take a break. we'll do that briefly in a couple minutes here's what else is coming up on "the halftime report." two big dow components, both on the move after reporting quarterly results. we'll hit walmart as the stock declines and home depot, next. plus, why another wall street voice says run from snap fast before the break, our data partners at kensho indicate you should buy the s&p after it crosses after the steep drop the "halftime report" is back in two minutes.
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welcome back to "the halftime report. just before the break, we were in the midst of a hearty debate on small caps versus big cap stocks kevin making the case that small caps are where you want to be. and you used walmart as part of the example of using today's earnings report. maybe the expectations on walmart had just gotten a little too high. >> i want to take it from a different angle of walmart the street had this thing at
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31.5% tax rate and big guesses was, the consensus got down to 22.5% tax. that's where they were on walmart. they print 24.5. that's two basis points on the miss that means a lot of revenue came from outside the u.s they got it wrong 200 basis points on a bohemuth like walmart, that's a lot of dollars. go back to 2000, there's a lot of rates in the russell 2000 they are not part of the tax reform they are not affected by the tax rate reform. >> they are negatively impact bid the rates. >> that's not what you want to own. they are making money at the old rate of 36-plus now down to 21 call the companies up and what they tell you is, i have no idea i'm a small company. i bet they're going to surprise to the upside. so it's a stock picker's market in the russell is my argument. you have to go find the names
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and own the names. and if you find them, vail resorts or something like wasteco, i have never heard of those names. those are the names i'm working on, and i say these will surprise to the upside back in the q3 and q4 of this year >> you might be right. >> i usually like to think i'm right but sometimes i'm wrong. >> you might be right, but i think there are plenty of large cap companies back to the argument of where you want to be how do you own a blend you can own a little bit of the large caps and small caps. but there are so many companies in the large cap universe in the s&p 500 that actually had very positive -- >> they don't get the secret juice. >> no, no, no. look at the financials they pay one of the highest tax rates out there. and they are going to come dun to the low 20s the hmos pay 38% in health care, 38% tax rate that's going to 22%, 23%. >> you got something against small companies? >> no, i don't have anything
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against small companies. that's why i say you may be right, but i don't think it can be one or the other. it could be a combination of both. >> let me ask you, i know your answer will be let's be stock selective, but are you concerned that to stephanie's point maybe the market is sniffing out the higher rates, wants more cash and wants to focus on debt surfacing. >> you would have thought that makes sense until you look at the volatility of the russell versus the s&p you would have less vol in the s&p. not the case the russell 2000 has had less fall than the s&p, which is remarkable, which means that maybe, maybe, maybe, they just pointed out the valuations are crazy, because most of the companies don't make money you have to take them out. >> are you negative on the market now, josh >> no, i'm looking at this like a portfolio manager for a full portfolio and not one sleeve and i think kevin is right, you
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have to own small caps if you want it to focus on small cap value, you probably would be doing yourself a favor but it's never a buy now it's never a large or small. >> which market, by the way? >> the u.s. market >> okay. so -- >> the philippines market. >> no, because that's -- nasdaq. which part of the market >> if there's an event, they are all going to trade together. they did a week and a half ago >> would cuban ever ask you a question like that >> he would ask me more questions like that all the time >> would damon >> yes, he would. >> i take that as a compliment, by the way carry on. >> we don't play this more or less cautious, we have to be cautious, we have to be. we have to be. but i'll give you something that i think is worthying about in light of that. >> would anyone say, no, i'm not cautious it's a question that can't be answered in any other way. >> josh to be sounds pretty positive >> i'm always positive
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i'm always positive. >> now, i don't get that vibe from you i sense -- >> do you want an answer or -- >> let me finish and i do want to answer. i sense doubt about the true worth of this tax plan on the stock market, on corporate earnings, what they're going to do >> there's no room to have any doubt. we're already seeing it. the market has had am huge move since we got closer to passing the bill and in the aftermath. there's no room for any doubt. the market loves the tax plan. and it should. there's no -- that's not in question whether or not it's going to have the impact on the segments of the economy that the architects of the tax plan said it would, that is an open question and will be for a long time. >> that's fair. >> okay. here's what i want to say, i have to always be cautious, because i'm managing money directly for individuals people who i look eye to eye with and the idea that anyone in that position would be like, now, we're not cautious right now it's like a ludicrous premise. so there is no other answer
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beyond what i gave you however, it's fair to say we are still in an up trend we did not turn into a down trend because we had a 10.2% draw-down from the s&p we held all of the important monthly moving averages. we may not yet going forward, but so we're still in an up trend. >> that's what we're looking for. >> it's even better. >> you answered my question. >> i have more the most important thing i want to get across, and kevin made this point earlier in the show, and i think he's right you've got to be internationally diversified now more than ever because of where valuations are. so we went into last year overweight international now we are more overweight international. u.s. stocks are great, i don't have a problem with them, we still own them i don't think there's as much opportunity because of the tax cut left in these markets on a go forward basis than a lot of other people think there is. >> i'm concerned about the market because of the vix at 20. >> what market >> whatever one you want whatever one you want. i'm concerned about the market. >> that was funny, i have to give him props on that
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>> what would you buy the vix at >> come on >> to buy the vix? >> you can't buy the vix. >> we're not buying the vix. >> everybody hates that thing. you can make money on it if you own it at the right time. >> the right time is ten minutes long it is literally ten minutes long. >> you can make money betting on top giants if you picked one of the two games they won last year. >> it's a tool speaking of tools, what do we have next you know, you literally took the words out of my mouth. i didn't want to insult them, so i didn't say that. you did. one big dow stock on the move today after earnings we talked about walmart already. what do we do? well, you can never say enough about walmart. >> we have talked about walmart. >> are you a seller? i would buy. i would buy. >> hold on >> right here, holding the gap up from november. >> what part of the vix would you buy walmart? >> i'm still long walmart. i sold some of it today from a
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risk manager standpoint. fundamentally, the company is fine it was disappointing to your point that you did not see the ecommerce growth they guided to, i think they said 40%. they have to question themselves, why domestically they are not getting that customer, which spends more money online and they have to get that customer i believe in the company, fundamentally, i'm still long. risk management, you have to sell someone's stock >> i don't have a problem, i don't own it so for me, i don't have any embedded reason to take a profit or anything. so i would actually consider buying it. one of the reasons that ken pointed out, a lot of the quote/unquote disappointment was tax related, but then another thing factored in was higher capex than when was expected they should do it. that's exactly what they should be doing that's what most of these companies should be doing. >> retailers aren't going to work if you don't get operating leverage the reason you don't get operating leverage the sh. >> i don't need it now, though
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>> it's tax related. >> i don't need it now >> spending on the infrastructure to compete with amazon. >> i understand. but for the stock to work and to move higher, you're going to need margins to stabilize. and they are an investment mode this year, clearly, they should be. >> what was the stock up last year, like 50% >> 40% in the last 12 months >> after doing nothing for like ten years. >> i don't own it and would like to buy it. but i think you have to -- >> you have a 10% on sale today. >> what price would you buy it at dplr >> 85. >> then i'm buying it at 85. >> i hope it is a mid-cap stock. >> that would be a 2.8% year >> what price would you buy it at it's a question of how much would you have just relax in the next two weeks, this is the start of the retail earnings reporting season we know that sales were great. we have no idea what margins were we have no idea what everybody gave up in terms of profit margins to get the sales
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i'm saying we don't know i don't know if i can make this any clearer. until you get reports from kohl's, target, macy's -- >> i thought we had to wait until sears drops the bomb to get retail. >> you do. and i'm telling you, i'm telling you, you don't have enough information to get the retail numbers. >> even home depot posted an amazing quarter. they are not selling the same thing. you have to think about marges, and we're getting data points that margins are not robust. >> i agree with you, steph why are we arguing i agree with you, but we are not getting the full picture until the end of next week. >> you don't have to step in to buy walmart today. >> why are we arguing? we are saying the same thing. >> i'm buying at 85. still long on walmart. it's a consumer staple why we don't know that and the question is it has a premium multiple do you believe the multiple it gets right now because of the information today, does it maintain that multiple that doesn't have a problem >> all right
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i have a problem if we don't get to michelle caruso-cabrera with the headlines. thank you so much. here's what is happening at this hour, 1,000 students from west boca high school are walking out of their classes and heading to parkland high school to protest the lack of gun control laws last week a 19-year-old student killed 17 with an ar-15 rifle at parkland the retired principal of columbine high school is speaking again for gun control 20 years after the first mass school shooting. frank deangelis is sharing his story in myrtle beach. >> it's not to put the fear into communities, but when these communities say it can never happen here, and i know with the recent shootings in florida, there were people saying, it can't happen well, it can, unfortunately, and i think that's where we need to come together and to say enough is enough. >> at least 98 people were kill in syrian government air strikes on rebel-held suburbs of damascus that's according to syrian monitoring groups. the syrian civil defense said more people were trapped under the rubble among the killed, 20 children,
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15 women and that's the cnbc news update at this hr.ou "halftime traders" are back right after this in two minutes. a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley you myour joints...thing for your heart... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement in drug stores nationwide.
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hey maya. what's up? hey! so listen, i was taking another look at your overall financial strategy. you still thinking about opening your own shop? every day. i think there are some ways to help keep you on track. and closer to home. i'm all ears. how did edward jones grow to a trillion dollars in assets under care? thanks. by thinking about your goals as much as you do.
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first up, ubiquiti is sinking and sinking hard
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the sec issued it a subpoena we were talking about ubiquiti, it was called, quote, a fraud, his word, not ours that was several months through a citron note and through our program. >> it was not just a subpoena but mlt billiultiple. accounting practices, financial information, auditors, trade practices, it is like this endless list of things they want to know more about none of this is good for the stock. so if you were in it casually trading it, this is probably not the best thing to be doing right now. >> we invited him on several times, robert para, the founder and ceo of the company to come on the show and discuss the accusations made by andrew left. and he has refused to do that. he's always welcome if he decides to do that qualcomm raising its bid for
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nxp semiconductors. >> this makes the bid by bro broadcom harder to complete. the deal is not dead but harder now that they raise the bid for nxp. part of the reason is i wanted them to own it, so i like them raising the offer. this increases the chances of the deal getting done. so i like it here. >> mosaic, top and bottom beat kevin? >> if there's ever a company that in the russians control, it has to be this one on the price of the potash. it's a fun thing to look at, the total commodity. i don't touch this kind of stuff. >> joe, on mosaic? >> i like the agricultural name. so i think mosaic is one of those, obviously, but i also like -- >> albertsons announcing plans to acquire the remainder of rite aid. steph? >> albertsons is a great company, it's a private company. very well managed and they are going to be able to turn around in a big, big way.
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so i am more nervous about cvs and walgreens because of this. so i don't own this space, it's very hard. you have amazon threats and now more competition domino's beating estimates joseph >> the variety of reasons tocom. a variety of weans why you should still own domino's this quarter was disappointing, but the fog should be on the comments of patrick doyle, who is talking about international growth being very strong 60% of the sales are digital stock is now at 225. yes there's these rumors swirling about takeover. that's not why you're buying the stock. if it is you're foolish to do so the reason you're buying it is cae beusi got out at 180 we're that you canning bitcoin next
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we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. and at $4.95, you can trade with a clear advantage. i thyou never got the brakes looked at?l... oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital. building a smarter grid, investing in new technologies, energy is changing fast and we're changing with it. that's aep's road to the future. and the international brotherhood of electrical workers helped make that happen. the ibew's outstanding union professionals
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have the skills and training to get the job done right. that's good for our customers and for our bottom line. ibew members are our power professionals. they should be yours as well. welcome back to "halftime report." bitcoin futures tracking for one of their best days ever, up more than 16%, both contracts touching their highest level in three weeks. still below the all-time highs, scott, what's the outlook here >> i think the news today is really helped. that is that south korea wants to actively, that's the word they use, actively support the trading. i think the irony is it's getting a big boost because a national government wants to
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help i thought it was supposed to be beyond the reach of any particular nationality maybe it's becoming more mainstream we would have assumed. jim iuorio, what are you looking for. >> i generally go for technicals the downward trend seems to be violated >> all right thanks, guys we're keeping the conversation going today with beiruten kelly. he's going to trade them live, that's all at the top of the hour final trades with the halftime guise, coming up. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that.
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jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.
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i we worked with pg&eof to save energy because wenie. wanted to help the school. they would put these signs on the door to let the teacher know
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you didn't cut off the light. the teachers, they would call us the energy patrol. so they would be like, here they come, turn off your lights! those three young ladies were teaching the whole school about energy efficiency. we actually saved $50,000. and that's just one school, two semesters, three girls. together, we're building a better california. excuse me, are you aware of what's happening right now? we're facing 20 billion security events every day. ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that? we did that. really. we analyzed millions of articles and reports. we can identify threats 50% faster.
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you can do that? we can do that. then do that. can we do that? we can do that. can we do that? oh thanks. say, yeah, i took your advice and had geico help with renters insurance- it was really easy. easy. that'd be nice. phone: for help with chairs, say "chair." phone: for help with bookcases, say "bookcase." bookcase. i thought this was the dresser? isn't that the bed? phone: i'm sorry, i didn't understand. phone: for help with chairs, say "chair." does this mean we're not going out? book-case. see how easy renters insurance can be at geico.com. we've been preparing for this day. over the years, paul and i have met regularly with our ameriprise advisor. we plan for everything from retirement to college savings. giving us the ability to add on for an important member of our family.
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welcome home mom. with the right financial advisor, life can be brilliant. this is where i trade and 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. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.
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still avoids snap. roku long. >> mr. wonderful. >> sti are are. us, going to benefit from the tax reform, in russell 2000. "power lunch" starts right now. >> welcome to "power lunch" here big battle on the street about where we should go from here, about where the market goes from here was the sell-off an appetizer. will tax bets and strong earnings continue to fuel the bulls. the stroke on track for the worst point drop in its history, missing estimates, what's that for for the company as well as investors. calls for stronger gut control how do big ban

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