tv Fast Money Halftime Report CNBC June 22, 2018 12:00pm-1:00pm EDT
strategically with all these new pieces that have been bolted onto intel, a couple of the biggest acquisitions ever who can keep that going and figure what they should be grabbing onto next. >> quite the week. so many headlines and more to come in the days ahead have a good week, everybody. let's get over to the judge on the half all right. welcome to "halftime report. does it even matter if tech and small caps keep running higher here to debate that is our panel. stocks higher with the dow poised to snap its longest losing snap in more than a year. kate moore, we go to you first. >> great to see you. >> how do you see the market the dow is giving up this losing streak what does it mean for the
overall picture? >> equity markets are range bound this year. i'm not particularly fussed about what we've seen in terms of a giveback in recent days i am a little bit more worried, though, as we think about how companies are going to be digesting this trade tension and i think there's a lot of hope and desire and expectation that companies will increase their spending significantly during the course of 2018. and that will help propel earnings and gdp growth to a new level as we look forward if that doesn't happen because companies lose confidence and we saw this from the beige book and heard this from recent ceos, then, you know, it's a little bit more of a question and i think that's -- >> so you're saying you have this report. you guys just dropped this report >> we did. >> we got our hands on it first, thank you. are you suggesting capex is not necessarily going to be good for the stock market >> okay. so we have to look back at history and say companies that have spent a lot in the past have not historically outperformed the market. you know, especially in its
post-crisis period, we've seen companies who have been more conservative spenders who've thought about returning shareholders outperform the market we're not saying that's going to be a bad thing if companies spend now. but we really have to look and i think really scrutinize what they're spending on, which companies are spending it's mostly technology companies. >> not all spending is created equal and may not necessarily have the same bump in each stock that does it >> i think we have a chart on this it shows that the big pickup in spend we've seen over the last 12 months has come from technology stocks. when you take out technology and a little bit of a pickup we've seen recently, there's not been a lot of spend and tech companies have the money to spend, so we're not calling for a bad market as a result of this >> right let's discuss the divergence we've seen over the last eight days of this dow slump and that's what we're calling it and it has been. dow is giving up the loss of 3.4% you've had the russell since may 1st up 9.5%.
tech has done well right? the small caps and nasdaq have totally diverged what's the message in that, if anything >> i think this comes down to the china issue. when we talk about the dow in the losing streak, the two stocks that come to mind are caterpillar and boeing which have been hit hard over the last couple of weeks with what's going on with this china trade scuffle or whatever you want to call it. the flip side of that is the small caps aren't as affected. and technology seems to be a little bit immune. it needs to get resolved when it does, this will move high per >> you look at the losses, steve, of these dow stocks over the last nine trading days it includes today. sure, we're having 160-point rebound. cat is down 9.5% boeing 8.5%. we know about ge's issues. it's down 8% travelers 5%, 3m, apple, intel what do you do with that
are they bargains? do you continue to stay away from most of these names in the dow? >> i think it's a stock by stock basis. i don't think that intel is necessarily corrected enough off of this to go in all the way, but i think you start buying it. the bigger picture is that you've got active portfolio managers that are taking a look right now at what's performed the market and what hasn't there's a lot of pressure not to lag behind, not to lose money. so performance numbers have been very choppy from long only, from hedge funds. so it's typical to think at this point you're going with the winners. in terms of capex, it's interesting. but i don't like buying companies when they're starting out or in the middle of capex. because intense pressure earnings particularly if they don't have to grow. they want the next level of growth >> thesis at least part of it in this note. we hear all this hey, capex is going to be awesome for the markets, right we'll wait until the company starts spending money.
it's going to be great for everybody and everything >> right the connection is it's going to be awesome for the economy look who benefits from that economic push. so you want to not buy the capex spenders until after they are through a large part of that cycle. however, the tech companies which are growing dramatically and are just cash flush, they can have capex and you can still buy those. so i think that's also part of why the industrials -- but to me the overhang is china. and the trade issues >> let me ask it this way then, josh is the market as strong as we would like to believe it is if you have this huge divergence and you have tech and then these small caps carrying the load here >> so i think if you just look, like, look on balance and people are saying, like, oh, it's an eight-day streak we're almost at nine days. the dow is down 3.1% during this period it's irrelevant. we took a look back.
there were almost 400 days during which throughout the course of history, you had a 3% decline in a single day. so i'm not sure -- >> it's not the -- it's not so much the dow's decline all by itself >> right >> but the way the nasdaq has act acted in a completely reverse option, you never see it in this manner you got the dow falling out of bed a little bit then you have the nasdaq just continuing to rip higher there have only been, like, two other times where it just happened >> part of that is a function of what technology stocks are in the dow. because when you look at something like -- so look at the fang names faang. the one that's most affected by international trade issues is apple. apple is the biggest weight in the dow. it's the biggest in the dow by extension.
if you had a different name in the dow instead of apple, it might not be a divergence at all. and c, it doesn't have google or anything up 0.6% on the week. 0.4% on the week the s&p is down 0.6% it's a wash. so i don't think despite the fact it's eight days of a closing lower than the day before, i don't think the market has changed at all materially from where it was two weeks before i just don't believe it's important beyond today's look. >> mentioning in terms of momentum i think this is indicative of investor sentiment growth at any price it seems like has continued to be most people's strategies. and, you know, everyone is
looking for uncertainty in the markets. given the policy and trade and, you know, regulatory questions people have in their minds at this point that means further crowding into these trades that have excellent fundamentals will be more vulnerable to these shocks and perhaps to selldowns >> i think that's a good point and one thing i want -- you know, it's a little -- it's lazy to say, oh, this year is exactly like some other year that you could pick out but i do think it's worth thinking about the late 1960s where we kind of ended up with this group of stocks that they were just seen as impervious to any threats. and multiples went up and up and up they were growing earnings just like the giants that we have today and they were just as dominant and everyone knows the whole list that really continued into the early '70s then it was inflation that ultimately killed pretty much
everyone and almost no one escaped for it whether you owned a growth stock or a value stock, you got killed >> those rates were ridiculously high >> i totally agree there's always differences i'm not saying it's the same thing. but that go go market in the '60s that ultimately lit to the nifty 50 in the early '70s and the big thing, we had amazing growth and the backdrop was similar to now with great growth. nobody could picture a reason why -- >> let me ask it this way. >> that's the risk to me. >> do we get out of this long road to nowhere, this zigzag market where you started unless we fix what's going on with these big blue chip names. they start participating a little bit more. it's going to be a tech and small cap world. and just stay there. >> the big thing is trade. that's why we're in the range. >> i disagree. i think inflation is a bigger point. >> let me finish my point. we're talking about capex and what it's good for
if it's product activity capex, that could keep it going without inflation going crazy. we all know productivity just hasn't been there. that's what i'm looking for. i don't care if it's hard capex, if caterpillar is digging holes and buildings are being built on those holes. it should enhance productivity and extend this. >> but it doesn't. >> answer the question i asked rather than -- i don't think we have an economic round table >> i think some of the blue chips that are there are having trouble with their business models ibm being one of them, for example. caterpill caterpillar. you're talking about farmers being harmed by the trade issues so i think until china settles, you're going to have issues. while you have some goods that will be high tariffs like soybeans that will bring down prices here and hurt the
farmers. the other pressures to josh's point are inflation. inflation just because it hasn't reared its ugly head in a big way doesn't mean it's not going to as a matter of fact, it means it will swing much further the other way. that's what's keeping pressure on the market. what's going to work during inflation where you don't really have to worry about the input costs? i think that's technology. >> one of the things to ask ourselves is which companies, is it the large megacaps or the small caps that have the ability to absorb higher cost. if we're talking about inflation, they have better pricing power. don't most of them tend to have brands that are, you know, much more important to the end consume. >> sure. but you're also dealing with -- >> no. i wouldn't say sure. take a look at campbells look at procter & gamble look at all those big brand name companies. >> some of that in the consumer space is getting disrupted no question. >> kate's point is not that they're not impacted just they have an easier time, if they will, for lack of a
better way to say, digesting it than a small >> they have to pay their employees more it's easier for them to up the benefits which is a wage inflation that doesn't show up in the data. it's easier for large multinational companies -- they can move jobs. i'm not saying it doesn't. i'm just saying it is easier they can move jobs elsewhere they can replace people with technology in an easier way than a smaller company. i don't think that's what we're disputing. i think back to your original point and your study, just because companies start investing a lot in capex, it's not going to automatically hurt. investors lost everything. we had it in the year 2000 with technology we had a massive capex bubble in the '90s it didn't happen. >> i read the numbers. cat is down 9.5%, boeing 8.5%, okay are these bargains at this point? or are you still worried about
trade and these other issues that's what i'm trying to get at >> i think boeing's valuation was stretched. you know i know it's a duopoly, but it was stretched. i don't think it's necessarily a buy there. i'd like to see it come down lower. caterpillar, i think you're in the very, very mature end of the cycle. so i don't think that's a buy there either i like the u.s. companies because that's where the economy has boomed >> but no one thinks tech is stretched? >> of course it is of course it is. >> overbought? >> it is a great opportunity i don't care whether it's tech or dow to pick stocks. those top names that are decliners in the dow, right? ge, caterpillar, intel over the most recent period you can find stocks there that i don't think anybody on the desk is going to touch. you can find stocks there that most of us really like like intel. and you can find stocks that steve and i will fight about whether it's caterpillar or whatever the point being is this is a market that may not be going anywhere but you can find bargains and
overpriced stocks. this is a stock pickers market >> unfortunately the stocks that have been working this year are not the underpriced stocks not the bargain names. >> that's the issue. >> you can find undervalued stocks and then the market spits in your face and says, hey, pal. they're underpriced for a reason. >> if you're a ceo and a good part of your compensation is geared to options and to stock, right? the quickest way to get your stock price up is to shrink the number of shares outstanding because that gives you the immediate growth in earnings, the immediate growth in the stock price, not the long-term capex spend. >> but we're seeing it pick up across all of these buckets this year a pick up in terms of m&a. a pick up in terms of capex. all of this stuff is coming on the back of the tax cuts the real question is how sustainable will it be next year and to the question about capex, do we break it down between maintenance capex which is necessary to keep the lights on?
or something that's going to be productivity enhancing over the long-term? >> we think the nasdaq's frothy? is it getting uncomfortably so or is this the way it's going to be >> depending which part you're looking at i would look at apple and would not say it's frothy or too expensive. i would and people can take shots at me say something like a netflix is too frothy. and to the earlier point if i've got a choice of netflix at $90 and a peg ratio of two or caterpillar at 11 times earnings, i am going to take cat. hang on. i may not be right. >> what are the cues up year to date >> i don't know the number they're up a lot but the question is is it frothy i'm saying taking a look at a broad market index whether it's the dow or the nasdaq, you got to look at the constituent parts. i think you were saying this earlier. >> i asked about the cues because, you know, there are a lot of people who are invested in tech through that are we getting a little over
>> we don't want to be because if tech doesn't continue to work, then the market is going to -- >> this is the key point right? the one that weiss makes rieg t now. if tech starts to have an issue -- >> on a sustainable basis rather than the quick corrections that are over in a month. if we have sustainable -- >> we've been saying that all year. >> if we have sustainable correction, then yes >> and back to market composition bid. a quarter is made up to technology at this point nevertheless, if we see a big falter, it's not just a question of nasdaq or single stock positions. >> hold on hold on. it's not true. it's not true that nothing else could pick up the slack. >> enough. not enough to make a difference. >> well, this week we saw it the semiconductors have been demolished this week
very tough week and it may continue into next week. we don't know. meanwhile, the xrt which is retail, for crying out loud, a sector that many people have not liked and even people that are buying it say it's just a trade. up 2.7% this week with the dow being down eight straight days by the way, new 52-week highs for almost every large component. it's not that other parts of the market can't step up and do their job. the consumer side of the market, some of these are in the q's they're doing great. because the consumer is doing great. >> right and cramer made the point today that tech and retail, the strength there is masking weakness all over other parts of the market >> there's always a rotation >> exactly there's always a rotation. but, you know, until further notice, i think that we can't opine on that the issues with the retail being over. we know the consumer's pretty strong, but, you know, we looked at the banks six months ago when
the 10-year maybe three years ago went over 3% and we had explosive rally. look what happened i think most retail investors identify the market with technology stocks. with the brand name technology stock. and once they start to take on gas, if they do, i'm not saying they will. i think you'll have a different sentiment on the market that will bring it lower. >> your question on breadth is important as well. i think it makes investors itchy and uncomfortable as well. even if they share our view that the earnings story is strong and even if the fundamentals square well, you know, it's a question of whether or not we can see a broadening of this market nine years into the cycle. and if the sustainability of like some of the consumer stuff is really there. >> wouldn't you be more nervous if i told you that every sector in the s&p went up 4% this month? >> yes i would be more -- >> why would that be better than a rotation where there are winners and losers
>> you can take a look you can replay the tape on this show and every other show from two years ago, three years ago, four years ago breadth is too narrow. the market can't keep buying back all this stock. that's always been the story we've heard that refrain over and over tech can't keep going. so my advice is ignore it. do your bottoms up work on stocks and buy there >> history matters here. you look at times where a sector has gotten as large in the overall market as tech is now. think about financials in 2007, energy in 2014, technology in 1999 traditionally when it gets this big, that's not the place to be. i'm not saying it can't continue to go higher but i'm saying this is a time to the question of something's always rotating or the comment something's always rotating that you want to look at the things that have been beaten up and at some point should start to perform. unless the world goes to hell in a hand basket, they should start to perform as soon as the issue is resolved. >> you talk about tech as if it's one sector.
i could make the argument that apple is really a consumer name. you know or retail. it's not technology. >> luxury retail it could be a lot of things. i think that's actually a very big point that just bauss somebody decided that certain companies are tech, look targets a consumer discretionary. walmart's a consumer staple. why? don't you buy the same thing in both so let's calm down >> to industrials. >> right so let's calm down with obsessive over the sector classifications and ask ourselves which are the companies that are growing earnings and growing revenue and don't need 3% economic growth. and don't need to start from the fed. those are the stocks working and yes, we can call them tech we can call them many other things because they do not stop their tentacles from getting into every industry at a certain point you say ant financial in china, is it financial is it financial technology is it just technology? >> is it a house of cards? >> i'm making the point that
companies do whatever they want. >> jim mentioned the banks okay stress test, finally now what >> still constructive on financials there have been parts of the year that haven't felt great >> most of this year >> just parts. there have been a few good moments as well. but the tostory is really sound. i think the market got it too moved up and whether banks that to pay out too much to keep deposits. that's not really the case for the biggest banks. it's much nor the case for the banks. i'm feeling good about next week as well. and i think we're going to see, you know, continued support on multiple different levels for the banks. >> year to date, xlf down 2% jpmorgan hasn't done anything. bank of america hasn't done anything cit citi's down 9% >> look at the brokers though. flying look at the credit cards >> morgan stanley has been horrible this year. >> no, no, no.
the brokerage -- >> sorry keep going >> e-trading interactive broker look at the exchanges. cme. look at credit cards you've got to stop saying -- >> which underscores the point -- >> for big banks, fine >> it's not all about the banks. >> of course i'll show you insurers that are up this year >> those things will continue to do >> i'll show you reits reits that should not be working that are at or close to all-time highs. >> hoshow me. >> stor should not be going up and yet i'll show you asset management firms all day we hear about basis point schemes and fee competition. i'll show you asset manager stocks that have outperformed. >> show me >> take a look at any of the companies involved in etfs any involved in institutional asset management opposed to retail there are areas within finance the problem is they're nowhere as big as citigroup and
jpmorgan regional banks kre -- >> what about the world's biggest asset manager? >> look. >> a phenomenal place, i must say, scott. >> blackrock is not having a problem right now. so i don't know that when we say financials it makes sense to just look at xlf given how many others there are >> if you don't even have to say xlf and just pick a bank because it's so heavily weighted >> you can also look at agree realty which is a reit that has a great business model it's walgreens, has all the drugs. >> what i'm hearing on the desk is i can buy everything but the big banks. >> no. what you're hearing is that you have to be select i have aive at look through what an etf is identified >> give me one big bank right now you would buy. >> jpmorgan. >> if i were investors, i would buy every share of citi and b of a so i could get out >> your point is well made that it's broader than sector money
banks. but look at the market caps of the big money center banks and throw in goldman, morgan stanley. tallying up in my head, that's about a trillion dollars of market cap it's an important part of the market just based on that size that needs to start performing for this market to move higher >> here's the shame about the banks. i'd say the group of ceos that are left whether it's dimon, you know, whether it's brian at b of a, are probably the best ceos we're going to see in our generations. because what they've had to go through, away from innovators like steve jobs. what they've had to go through to navigate their companies through what hit them right between the eyes is amazing. however, you know, they're constrained somewhat by what their businesses are in the models >> they've been constrained less, though, in the last year and a half of the administration >> agreed. >> i think one of the reasons why these stocks are selling at low multiples and might always for the rest of our lives is while there is some
deregulation, basically they've become utilities de facto. and they are actually going to be competing with fin tech companies. >> think about it as income stocks then. that's what i'm seeing could be the next kicker. >> they'll have to compete with companies that do not have big branches with marble lobbies and 100,000 employees. >> scott, some companies -- >> those are all restaurants now in new york city >> lending club has been a disaster some industries just never made that transition to higher pe sectors. autos being one. banks being the other. they're slightly above where they were. >> all right we'll step away for two minutes. here's what's else is coming up on "the halftime report. just hold it one firm downgrading nike. stock seeing a run of more than 40% for one year the desk debates it in the call of the day plus we want to hear from you. the traders will be answering your questions live. tweet us @halftimereport
and before the break, a look at dow come poeponent boeing. shares down about 5% over the past week. according to our data partners at kensho, after similar drops the stock bounces back gaining a percent a month later. "the halftime report" with scott wapner and the traders is back in two minutes well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all.
well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.
welcome back to "the halftime report. i'm kayla tausche in washington where the house of representatives just passed the largest and most comprehensive package targeting the opioid epidemic since the epidemic has come into being. this is a package of 58 individual bills among the things it targets is a directive for the national institu institutes of health to have a non-addictive drug -- as well as the distribution to those drugs. it's unclear when the senate will take um this bill or craft its own version. it did have overwhelming bipartisan support 396-14 was the vote. back to you. >> thank you kayla tausche in washington, d.c. for us. nike set to report next week analysts at buckingham are downgrading them to neutral.
we've made it our call of the day. what do you think of this? they raise the price target as we said from $80 to $75. they say it's time to tap the brakes the stock could rise more from here the valuation the company has reflects the fundamentals that are in place >> it just broke out, though i don't understand why you would sell a stock that, like, is just starting to get going after such a long period. >> it's up 15%. >> i know he's looking at something different. >> they could get to 80 but downgrade here so they aren't saying sell it. they're saying hold it you got a little more upside there's nothing wrong when you've had good numbers. and portfolio management is when you had a price target don't keep raising your price target even though they did it here find something else to go into so i get that. so look. but nike, i agree with you
>> if you like a stock and you're saying we like it but maybe let it come down a point or two, what are we doing here >> i think it could come down more than a point or two i'm not -- she chart does look a little -- >> he's not saying it will >> look. i know the stock i've been in it plenty i sold it about two months ago at 27.5 times earnings, knowing the stock for decades now, that's ahead of itself could it come down 10% to get to where it normally trades it certainly could i don't object to this call. notwithstanding that yeah things have been great, but you know what i think i see a turn coming. i like analysts who do that. instead of riding the momentum >> i think it's fine what the analyst did. but if it's 23 to 25 times and now it's 27 times and you have a consumer that's more flush with cash than they've been in a decade or more, why don't you
think they will get to the historic multiple? >> maybe it does go to a 30 multiple maybe. i don't think that's justified i don't think a 27.5 multiple. i think it's more likely -- let's call the next 10% in nike. i'm not saying a crash the next 10% i think is lower in nike >> no way to know that >> i said i think. i don't say i know i have an opinion. >> so if you're an investor you say i can withstand 10% down if i like the stock long-term -- >> what do you think it's trading at in ten years, nike? >> probably right around where it is right now. i've known this stock for a long time when it gets to 27.5, i'm not saying there's a crash there. >> you think it's going to be where it is? >> i'm not excited at buying here for a two-year trade. i'm a long-term investor >> we could be in a recession in two years. it's not a farfetched thought. >> i thought any stock on any day has 10% downside
that your downside is 10%. >> i'm placing probabilities on it and these are only opinions. all right? we're in the investing world we're predicting the future. >> judge, you might want to bail this guy out and go to a commercial >> let's go back to intel. >> even placing kate moore in between you guys doesn't calm everything down. >> why would we do that to kate? >> come in here very civil and jim aggravates me. >> next time, kate come around this way let's get to the headlines with contessa brewer. contessa >> -- so by a 5-4 vote the supreme court has issued a ruling that police have to get a search warrant before they can get cell phone records to track consumers. it's a victory for privacy in this digital age arizona police say the human backup driver in an autonomous uber suv was streaming the tv show "the voice" just before that vehicle hit and killed a pedestrian in march. investigators say if the driver
had been paying attention to the road, she could have stopped the car before the fatal crash a volcano in japan violently erupted this morning spewing smoke as high as 8500 feet from its crater japan's meteorological agency put the alert level at 3 on a scale of 1 to 5 and today is take your dog to work day. 20% of workers will celebrate by taking their pooch to the office 37% of americans would sacrifice benefits including vacation time -- they're willing to give up their vacation in exchange for a dog-friendly workplace you know, many of us work with a lot of dogs. they're just not the four legged kind i don't know too much guess who's not with me today, scott? >> weiss is a dog lover. i just don't have any. >> i have three. >> they should all be here today. >> okay. >> weiss came instead.
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3w4r57. facebook is on a tear the last two months. shares up about 20%. what are the options traders betting on next? pete, good to see you, pal >> good to see you i'll tell you. it's pretty interesting because just a couple of days ago on facebook, we had some upside call buying aggressively as the stock was actually moving towards this 200 and above that 200 level. they are aggressively going after the august 230 calls now they're coming back again. and so we're seeing this aggr s aggressive movement in the stock. they're putting on a spread this time let's focus on the 230s. paying about $1.70 for these things this is a large trade. this is a large trade when you look at the dollar value of what's going on into this trade right now. somebody expecting over the next
month, two months for this stock to actually make a nice move to the upside not just this breakout we've seen so far, but maybe something further. i'm in the august calls from the call buying just the other day so i'll be holding onto those. here's another one for you halliburt halliburton. this hit the other day as well there are the august 50 calls getting bought just the other day. today they're buying the july, expire the last week in july the july 27th expiring these are the 47.50 calls. $1.25 is about where they were paying when the purchase was made and i gave you where the options were trading i like this trade as well. i think halliburton maybe looks like and josh could talk to this he knows charting far better than me. but it looks like 45 is sort of a base that it's bounced off of several times now. so maybe this is a stock that's going to catch some of the momentum of what we're seeing in energy take a look at exxon and chevron. these names are powering us forward today.
they have been when we've seen oil start to make these turns. >> let's ask josh. you see any candles? >> the buyers showed -- lol. >> what you got? >> we come on the show, talk about price action every day i'm the only person that actually wants to talk about the price. the stock -- the buyers came into the stock exactly where they should have in the spring the stock had some decent support at this level. had a nice rally now it's back. so if you were to say this is the point where they should be buying, they did, maybe that's where your stock goes 41, 42 if you want to be long this name. personally, not for me it looks trendless >> head and shoulders there. >> no, it's not. >> what about facebook >> i can't believe we're talking about the 230s on facebook it's unbelievable. the speed with which they came in and bought this name on legislation related weakness and by the way -- >> that's 50% over where it was.
>> oh, it's unbelievable >> remember the 149 and change >> you know what i think i think he went to europe and h them europe should have been harder than d.c. >> they're not harder on anyone. see the soccer players they get brushed, they fall down and cry. >> they loved him. by the time he was leaving there, if you didn't buy the recovery of what happened between the washington thing and when they left, maybe that was the signal, like, oh, he's going to be fine >> it was a bonus, too, that at least when he was down on capitol hill, nobody knew what they were talking about. the questions weren't all that different. >> it was hilarious. >> it was. >> pete, have a good weekend, pal. >> thank you take care. up next we'll give you the trades on red hat, carmax, m
micr micron first a look at what's coming up on "power lunch. >> bitcoin down 30% since that unforgettable "power lunch" stock draft. gordon made it his first round pick right now this pick is going down as the sam boey of draft choices. he is going to defend the indefensible on "power lunch." plus "power lunch" will tackle leftovers. yes, meet the start-up helping companies to stop wasting food and money in the process and our mystery stock of the day. up more than 30% in 2018 86% in the past year how much higher can it go? the ceo will join us ahead it's gotten very quiet in the newsroom here. "the halftime report" will return right after this. i'm april kennedy and i'm an arborist
with pg&e in the sierras. since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future. all right. we're doing the blitz. red hat, guidance is killing the stock today. what do you do down 12% >> look. i can remember when they called me in for this company five years ago. yet it survived. one quarter shouldn't bother you in the stock that's this
volatile i think their ceo is going to be on cramer tonight. >> yes thank you for the promo. >> i would pay attention to what the ceo said and take it from there. i'm inclined to buy if the trade is down a little further >> this gives you an interesting window into what earnings season may be like. you can beat on the top, beat on the bottom, but if you don't meet a high bar on guidance given what the stock market has done, you're going to be killed -- >> look at micron. >> we'll get to that all right, carmax. jimmy? >> a very good company i think everybody knows i like the auto industry. i happen to play the oems through gm but the used car part of this as carmax is doing well used car prices were up 3% year over year. that's good for carmax and should continue. this is a good name. >> all right let's do micron right here let's talk about that for a minute we'll do china in just a second. my bad give me micron because there's a note out today from ubs
it's a weird note that says potentially a big correction is coming in 2019. >> guy has a sell rating on it then says they're executing perfectly. like, he's saying -- tell me if you agree with this. he's saying they're doing a great job focusing on the things they can control but then he's saying the only thing that matters is the one thing they can't control which is the glut for pricing in 2019. >> okay. and so there is no glut. >> are you in? are you long >> yeah. >> i have no position. >> i shaved a little before the quarter. look they reported slightly better than the street. they didn't have the huge bit. but the guidance was still favorable. i know people have met with the ceo about a month ago. and they tell a great story. so the concern is more capacity coming on. but that's always been the story. and, in fact, you got to separate both. the fundamentals are good now. and technology continues to
grow memories continue to be important. and there's just not a lot of capacity coming on >> why does he think there's so much >> well, there have been some announcements. and there's kmotty pa tycommodi the business like anything else, there's the low end, upper end, sophistication technology. they make almost all of it in the higher end trying to bail himself out it's like i got to sell, i want to be special. >> oil is on pace for its best day in almost two years. trades from the futures pits are next on "halftime.
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welcome back to the halftime report this is futures now. we are watching crude oil prices soaring as opec convenes in vienna oil tracking for its best day since late 2016. giving the energy sector a boost along with it. they told us they were going to add back 1 million barrels probably more like 600,000, and the market thought it was oversold. >> crude oil is fun. people are afraid of its volatility but it is a supply and demand game. they didn't expand production enough to cover what we lost from venezuela let alone what we lost in libya. when you look at crude oil you are looking at supply disruption much more likely than oversupply given the production levels. you add in 96% refinery
utilization now. that in the physical oil patch is considered unsustainable. there is demand. the dmabd is growing as evidenced by the refinery production >> hadn't touched 70 since late may. 65 was the sweet spot. are we ready to ratchet that up? >> it turned around at a reasonable level south of 64 looks like it's heading above 70 in that long term trend. my fundamental side disagrees. i think it suits opec better to say they are not going to increase production and then make more and increase production i think this level here turns around in the medium turn to figure thing out before it starts heading higher. >> we are bahalftime is back afr this this is my headquarters.
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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we answering your tweets as well today on halftime the first one, one viewer wants the know your thoughts on sell gene >> we have been talking a little bit about pharma and biotech there is a wide disparity in valuations so i actually like sell gene here it's gotten insanely cheap because of some blown trials i think the valuation is compelling i think if you look at the chart it's looking like it's forming a bottom here. you may actually see former jim, to use my known deplume in this name before too long.
>> down 24% year the date. >> it was cheap 20 point ago but it continues to go in. you don't want to catch a falling knife. you have to wait to for the bottom. >> he threw everything in there. is there anything he won't comment on, scott? >> no. >> no. why? >> did you just wake up. >> is there any opening you won't give me. >> kate moore. >> next week, two things banks,cgar and capital returns and also china trade, what that's doing to people's perception of some of the u.s. mega caps i think we need to focus closely on the impact to chinese names domestically oriented. we have seen outflows out of emerging market stocks i think it's being overdone and i'm still staying constructive. >> mike weiss. >> micron.
ubs says they are executing well i think they are at a hold price. >> i mentioned stitch pics. ier this week. there were rumors that oprah was taking a stake those were denied by oprah's people the stock continues higher now about to challenge the spring high. >> where did you get in? >> 26 and change. >> "power lunch" starts now. i'm michelle caruso-cabrera, the dow with its gains today trying to avoid its longest losing streak since the '70s however, as investors keep pulling money out of the market could now be the perfect time to dive in? we'll be the on "power lunch." gm is bringing back the blazer it's building the suv in mexico. it comes as president trump fires another warning shot on trade calling for a tariff on cars. this red hot stock is up