tv Fast Money Halftime Report CNBC June 25, 2018 12:00pm-1:00pm EDT
whether that's being blamed for a general skepticism around chinese stocks, jd not faring as poorly that's down about 3.75%. >> watching key headline names jpmorgan and boeing, sorry, caterpillar, with lows for the year let's get to melissa and the half welcome to "the halftime report." i'm melissa lee in today for scott wapner top trade this hour, the tech wreck, the hottest trade of the year under pressure. is it time to take cover here to debate that, joe, steve, sarot, and jon also, erin gibbs so we have trade war fears, the selloff the likes of boeing, t caterpill caterpillar, but today, we have a sharp rollover in technology what do you make of this >> this is what we talked about last week. pete and i dialogued about the volatility being low
you had such an incredible divergence between technology stocks continuing to move higher and dow stocks continuing to move lower you need to see something break in one direction i talked about last week, it seemed to me to be prudent in the near term to seek protection, i bought key qq puts last week, and you're seeing the benefit of that. technology clearly is rolling over you're seeing a lot of the funds that went into technology coming out. i think the important thing to understand is we're in a blackout window. i think that's going to be a little problematic in the near term we're in a blackout window technology was a significant in terms of a sector, strong buyer of their own stock over the last month or so. can't do so right now ahead of earnings i think that's why you're in a little bit of a vacuum >> sounds like you're saying this is temporary. >> i think it's temporary, but you need to seek the protection. >> at what point do we say maybe it's time to get cautious? >> i think now >> oh, okay. now.
why? >> here's the reason she who's, you know, head of china for life, doesn't have voters he has to appease they always take a long-term view there anyway. they're talking a much longer term view. i would turn your attention to an issue on micron and the issues they went through trump, on the other hand, has a 90% approval rating with republicans. while you would think people feel the markets, his voting constituency, the core of it, doesn't. so then when you get into earnings you're not going to get relief unless you see the trade war settle so you have two leaders stuck in their positions. and the dialogue rather than how tax, the tax law is helping them, that we saw in the first quarter, that by the way, didn't lift earnings anyway, now it's going to be, we're very cautious because trade wars kill our business so even if you're a u.s. company who just does business in the u.s., you have to look at what the inputs are and what they'll do to your margins so i think there are lots of problems, lots of issues to
navigate in the last, you know, i would say innings of a bull market in economic cycle >> do you think we have lost the leadership of technology, erin >> certainly in the short term we look at it even more broadly between just growth and value. and we already saw this a couple weeks ago where the spread between growth and value was at its absolute peak. it almost hit a 12% difference, which is as large as the full spread for last year so for us, that was already concerning that we're getting to these really high valuations, the leadership in the s&p 500 is heavily concentrated in just one area and for us, it's very healthy for this to come down and that most of that growth overvalue is coming from the tech sector. >> anybody buying technology today? we have netflix down 6%, facebook down 3.5% any takers of these dips no, you're shaking your head >> if things, if the trade talks went away, mel, or something like that, if they calmed down significantly, then yeah, i think you stick your toe back
in, into netflix and things like that other than that, i had an awful lot of stuff get called away i left for europe june 15th. which was expiration a lot of my stuff was called away nats not to say i don't have plenty of losers in here, because i do american airlines, delta airlines are two that are hammering me right now but letting a lot of tech stocks get called away because of the big run they were on, that's working out. i mean, i'm in cash instead of in those right now i'm even out of apple. and apple was my only major big cap holding. >> how much cash do you have - >> 77% right now and i'm usually at 5%. in other words, i don't like the market much right here doesn't mean that i'm right. doesn't mean that the market continues to go down but i didn't like the run in tech being the only leg of the stool that was holding the market up. and so i decided - >> let the stuff get carried away >> retail was doing pretty well.
>> a percentage basis, you can't say retail is holding up the market >> no, but i'm saying not holding it up, but other sectors were doing well. >> i think the point is that technology was basically holding up the market on a percentage basis in terms of performance. >> you're right because it's hard to chase technology if you look back a month and say it's still higher than it was, but there's so many part of the market in terms of value that if you have cash on the sideline, i'm not saying get full in right now, but now start legging in. contrary to what you're saying, if you look at it two, three years from now, we'll look at it as a blip on the screen. >> that's always the case, but from what level lower do you start? >> another 5%, 10% lower because i think they're both leaders are looking at this -- >> value like what value like staples value like - >> i wouldn't look at staples. yes, because those are kind of, to your, i think where you're going is those are kind of where we want to be defensive. i don't want to be defensive because interest rates are
lower. i want to go where there's good return on capital and good opportunity to grow. i think industrials that have been really hammered is a good place to start nibbling. >> the poster children of the trade war you want to buy now. >> you don't want to buy them when they're 23 times earnings and you look at. >> 16, 17, going down to 13, 12. it could be, but look at financials they were 12, they were 16 last year they have great balance sheets dividend is growing. that's a big area. >> mel, here's a couple things the one new low for the year, right? the chinese currency, new low for the year you look at the german market. it's fallen, what, from 13,107 to 12,305 just like that in two weeks. i mean, so you look at our adjustment they're already down 6%. the german market, in these two weeks. i think there's a lot going on with the german market, with the ten-year bunt, which was
.77-year-old, now it's .32 again. now they're heading back down towards zero as far as the yields on those bonds. that's telling you a lot of what you need to know about how europe is doing right now. >> it also holds down our-year-old curve >> yes >> another troubling sign for the trade war is that the chinese released reserves held by the banks so they cut the reserve requirement by half a percent. so they're stealing themselves where they were going the other way, tightening things up, tightening up debt what that means is perhaps they're preparing the economy for a slower economy, slower growth and a trade war >> when markets get volatile, as they have gotten here in the last couple of days, i think it's important to keep things in a very simmplistic capacity and understand, i said this last week and i'll say it again today, this is not a portfolio event. you're not blowing up your portfolio here this is a trading event. a trading event. understand that, when it's a trading event, we quo this full well, where is the source of
funds? where is the so-called capital market etm, and i think that's going to be technology and i think you have to understand that, to your point, you're always looking for opportunities, but those opportunities are going to come on the other side, probably, of july >> let's say i'm in technology, this is a trading event, and everybody around me, pulling out money from the atm, what do i do do i also pull out >> i think you seek protection in the options market, which last week you could have done 30% lower than where the vix is today. >> let's look at it this way, that when you get to the stage of the bull market, and things look so good, technology looks so good, you buy things you don't really know what you own you're buying momentum momentum trade takes over. you have to clean that out first. then you have to take a look, what you're betting on, the only bet you're making by staying in some of these stocks is will the u.s. come to terms with china? the eu is like riding along, so forget about them. >> resolution of the trade war
with china will equal a higher tech trade that's what i'm waiting for? >> to your apple point, how much of the apple story, like katie huberty, china growth, how much of china is apple's business in china going to grow with this going on i don't think it's going to grow much personally. i think if it does grow, they steal the technology >> that's the next question about technology is technology a sector that will be impacted tremendously by the trade war? is that what we're seeing in the market today >> i don't believe so. >> no. >> it's a source of funds. where do you take money from the biggest source of profit >> even for chips? >> yes even for chips you can do two things at once. take it off the table and put it in cash or redeploy in other sectors. you're seeing take it off the table. >> you could also protect, and the other question you need to ask yourself right now is have we reloaded, have we leveraged up once again in terms of the short volatility trade let's remember what happened from january 26th to february
5th, tbecause of folks being so levered short volatility i think it's something to be watchful for because then that obviously is going to accelerate to the downside any move we might see. >> the vix that joe's talking about and he and pete were talking about last week into the weekend, obviously, about a 30% move today in that vix i think the 13th, before i left, mel, they had some 50,000 -- i'm sorry, calls, i have to remember the inverse nature, 50,000 calls were bought in the vix really aggressively with the vix like at 1214. that was the underlying vix, not the actual cash, and today it trades up over 1750 or something like that, that's a huge move. so in other words, a lot of people were doing what joe and pete were talking about last week, buying a lot of that protection >> absolutely. >> last week, and now today, i see a lot of people buying puts in the s&p 500
way out in september and they're way out of the money puts these aren't the kind of bet you would put on if you thought the market was -- yes, you know because you see this all the time that's a hedge when you see something pretty far out of the money, the 2.17 puts is what they were buying today in september. that's with us at 2.70 you're not going to buy something that far out of the money unless it's a hedge against your broader portfolio >> my last question about technology, that is for so long, strategists, investors have been making the case that buying technology, you're buyingindio syncratic growth even if you're seeing a slow down in europe, a slowdown in the united states, you want to buy it, and that attributed to the run in technology. is that true >> that's no longer the case right now. >> all of a sudden it's not idyiosyncratic growth >> we have been looking at this for ages and we said ever since the beginning of 2018, it's been very tied to the broader markets.
and even when you look at earnings growth and projections for this year and next year, it's almost exactly the same as the s&p 500. at 22% so for us, it's really become much more correlated and much more aligned with the broader market and we don't see as much of that - >> that's if you're buying indexes, if you're buying, you know, if you're buying semis oifrb all, but there are some that will do better, if you're buying technology overall. netflix really doesn't get impacted in trade wars, yet the stock is down. >> down 6% >> why is it down? because it shouldn't be where it is the stock was overbought, at least in my view everybody came out, there was a race to raise the price target >> you're telling me every single tech stock should never have been where they were? >> no, i think microsoft deserves to be where it is >> you can find that risk within the individual stocks, but as a sector, it's become more and more looking like the larger indices. >> erin, what should we expect
in september as you mentioned before, technology is 25% of the s&p, and that's not even with amazon. now you have to reconstitution you have the creation of this new sector, communication. what should investors expect with that? >> so i hate to talk about seasonality, but this is pretty memorable that we get a swoon in july and august. so now that it's starting in june, this isn't completely unexpected one, get through earnings season, right. but amountimately, that will come back. and we have been in a very slow but steady up trend since the correction back in february. so we just had these basically these bounces, and right now we're in a bit of a dip. for us, maybe holding steady for the next two months and september get back in. >> the nasdaq and s&p 500 just offercepti session lows. one market watching seeing cracks form in what could have been a rally jonathan joins us now on the phone.
jonathan, specifically, you're seeing a potential breakdown of some of the more defensive sectors, namely staples and reits. walk us through what you're seeing in the charts >> actually the opposite we're seeing a reakdown in som of the cyclical sectors. industrials at 2.5-year relative lows to the s&p and financials at a vulnerable level as well. at the lowest level of the year. any further weakness in financials and also in the home builders which are also very cyclical we're seeing relative weakness there and relative strength in some of the defensive areas, consumer staples and the reits >> right and that's what i was talking about, the potential near term breakout in some of the more defensive sectors like staples and reits. so can you walk us through the charts we're showing the chart of staples now. >> yeah, so this is one of the worst performing sectors of the year going back a couple weeks ago. starting to stabilize. we have seen interest rates pull back which is helping them
i think consumer staples are a good place to hide here, to kind of ride out some of these -- some of the volatility here. names like procter & gamble, sl green, some of these defensive areas we think are pretty attractive here, given that we're seeing money come out of the more cyclical areas. >> let's show the reits chart, and if you could walk us through exactly what you're seeing, walk us through the lines and how you get to your conclusion we're on the verge of a breakout. >> so the reits, if we're looking at the rmv index, was in a narrow range for most of 2017. it broke down below that as we entered this year, now we're back above that. so the fact that you had a pretty meaningful support level that wasbreached and now you'r able to reclaim what was resistance, i think that's very powerful for the reit index. we think it probably gets up towards the 1200 area which was resistant part of last year. >> taking a look at the reit chart, the 200-day average seems
to be sloping in the past couple months or so i'm wondering, does that matter much to you that it looks like the momentum may be slowing down i ask that to you because we're talking today about the s&p 500, for instance, breaching its 50-day moving average, the dow breaching its 200-day moving average. does it matter the slope of these moving averages? >> well, usually what's important with the slope of the moving average, you want to trade in the direction of the slope. generally we have if you're talking about the s&p, it's pulling back to a rising 50-day moving average generally speaking that's a good area that you'll try to find support. if we're going back to the reits, the first test of the declining 2-day moving average, we saw consolidation but now it's above and we're starting to see the slope turn up. that's a positive sign for reits. but as far as the broad indices, most of the long term primary moving averages are still rising that's why we're not getting too
cautious we think it's an internal rotation out of some of the offensive sectors into defensive and that will probably reset itself as we head into the third quarter. >> i want to zero in on some of the financials you mentioned, a potential breakdown in the sector you have concerns about two names in particular, citi and goldman sachs. can you walk us through those charts >> this is nothing new, right? citi and goldman have been kind of relative laggards for a while now. they have been walking through some weakness, and we think there's a bit more downside maybe 5% to 10% in these names >> okay, we're going to leave it there. jonathan, thanks for phoning in. anybody a buyer of the sell that jonathan has on goldman or citi? >> yeah, i shaved citi i think it was last week or the week before never shaved enough so i'm sitting with it. i think at some point you have to give up the ghost on these. you have a flattening yield curve, a 10-year below 2.90. it's tough
there would be a lot less angst if you just short rates instead of buying the banks. a lot simpler. >> speaking of citi, it is the value play of all the financials it trades at one times book at this point everything else is 50% >> value player or value trap? >> value trap right now, but - >> it's not that much more expensive? >> about 50% more expensive. >> but still relative to on historic long-term book value, long-term multiple book, which everybody looks at >> that's talking about three times book, but boa is a different category, but i want to go back to one of the things about reits. there's an interesting reit we're buying, equinext that's something that's going -- >> is the status -- the data centers? >> yeah, but unlike digital reality, they're connecting right to the internet so you pay the interconnection fee. they're going to grow 8% to 10% organic growth you're getting that growth out
of a reit where everybody is kind of hating it because of interest rates because you get a combination of a good valuation and groying within the sector. >> everybody has loved this. everybody may have hated reits, but everybody loves this forever. >> long-term chart, it's been a monster, a great name. >> you're down 15% off its peak. you have an opportunity to buy >> i agree >> let's move on here. harley davidson announcing it will be shifting some of its motorcycle production overseas in response to tariffs imposed by the eu. phil lebeau joins us live with that story >> this is not surprising given the fact for harley davidson, the hit to the bottom line by these new tariffs in europe is substantial. and here's what we're talking about. the european union and we have talked about these retaliatory tariffs for some time. it's forcing harley to shift some production for u.s.-built motorcycles shipped over to europe because the tariffs are going from 6% up to 31%. what does that mean for somebody in europe buying a harley
davidson on average, the price is going to go up about $2,200. harley says we're not going to raise prices we'll eat that and nobody, no company can put up with eating another $2,200 per unit, so harley davidson not only shifting some production but also saying it plans to open up a european manufacturing facility now, this is going to take anywhere from 12 to 18 months for them to have a location in place and start manufacturing over there overall, the eu tariffs are going to hit the bottom line of harley davidson by $90 million to $1 h00 million harley davidson's second largest market is europe in terms of their global sales, they get about 16% of their global sales from europe. also remember this is a company that is also struggling with slowing sales here in the united states it already has high tariffs over in asia. so it's got a number of things that are swirling right now that are pushing shares lower but the latest being these new tariffs from europe on
motorcycles built in the united states and then sent over to europe >> phil, thank you phil lebeau in chicago this is sort of an example of these policy - >> perfect >> it's perfect? >> perfect example >> of? >> of what a trade war can do. >> oh, yeah. >> you would think harley davidson because of their brand has some pricing power, like you would think apple has tremendous pricing power in asia, in china. well, guess what what they're telling you is they don't. they don't want to raise prices because they're afraid of losing share. and losing that share may not be a temporary thing. harley was struggling anyway, as he mentioned losing that share may not be temporary. then you have to get the share back if tariffs come off so long-term effects of this, if they go on for, pick a period of time, i don't know, can have long lasting implications. >> starting to get a glimpse of what this will cost? last week, we got the example of daimler. today, we get the example of harley is this the theme of earnings season every conference call, are we
going to get the potential impacts of the trade war and like the weather is to retailers? >> we did some very back of the envelope, but this is going to wipe out their profits for the next 18 months and so, you know, it's $100 million is almost 20% of their total net income it's impactful so if we suddenly have companies who say actually, we're not going to make any money -- >> are you surprised they would say something like we're going to eat it? we're going to eat this $2,000 or whatever? >> that's a combination. >> makes no sense to me. >> it's such a significant hit to your bottom line. >> who is their competition? when you look at the competition, it's indian and a couple other brands. as far as this particular type of motorcycle. because it's not the ninjas and the kawasakis and the rest this is, you know, a big american-made cycle, triumph, the big british one and so forth that's competition, but how
could you say i'm going to eat the entire amount of this? >> it's worse than that because they're not even raising prices to the dealers typically, you'll squeeze the dealers a little bit they're eating it all. that's with this company uniquely about how precarious their situation is if they have no pricing power whatsoever. >> and only 15% of revenues. i don't understand - >> growth. >> it's growth, but you're protecting 15% of your revenues and you're taking a 20% hit on your profit? >> it's razy >> let's get to another big mover. carnival cruise on pace for its worst day in more than six years after cutting guidance seema mody has the details >> that's right. an ugly day for carnival shares after they cut their yearly outlook due to higher fuel prices, a stronger dollar and signs of weakness in the caribbean. carnival has a home port in san juan, puerto rico. there's also interesting comments from arnold donald where he said the chinese are still not going to korea at this
point in time, and inthat changes, that could open up the possibility on some itinerary planning and maybe help the situation. now, remember, china implemented an unofficial boycott on south korea in 2017 in opposition to the deployment of the thaad device the statement, some analysts say, from carnival's ceo is evident of how china's boycott is having an impact on the travel sector, though donald says he expects china over time to become the world's largest cruise market. all the cruise stocks are down today and on the year, led by carnival back to you. >> seema, thank you. >> we should note that carnival ceo arnold donald will be on the closing bell today at 3:00 p.m. eerb in the meantime, how are we trading these stocks they had been darlings of the travel sector. >> they have been. i think it's a little surprising though here in terms in particular of what we're hearing in terms of the guidance the consumer domestically in the
united states is in such a strong position. we have highlighted over the last couple weeks that there is a softening to this global growth story and you're seeing a report giving you the evidence and now you have to extrapolate that forward and think to yourself, if we're seeing the slowdown in global growth, there are going to be more companies, consumer oriented that are going to give guidance like that that's a concern you have. the strategy itself is to continue to focus on u.s. domestic type of companies that are selling directly to the u.s. consumer, not having the exposure to the global consumer. >> the other reason here why it's down, fuel costs. which is one of the reasons why i sold basically - >> all of their costs were higher than consensus expected >> which is the other issue, wage growth. fuel cost specifically, they don't hedge anymore. very few -- very little of their buying fuel is hedged at this point. so they're wide open it worked great for them while just going down, now they're
going the other way. we'll see big adjustments in my view to that in this quarter coming up. >> erin, you like the retailers on the other consumer side of it >> ulta beauty is one of my favorites. the retailers that are really focused on the experience of the consumer, so ulta has a salon so you can buy your makeup and get your hair done at the same time. >> they know that already? >> you're all aware of this. >> those types of experiences, types of companies are something we look for. >> all right, erin, thanks for joining us great to have you here >> here's what's coming up next on the half. >> an upgrade for one big tech stock that's already up nearly 40% over one year. the desk will debate it. >> plus, the state of the space in our call of the day >> and before the break, a look at consumer discretionary, which is up about 11% this year. according to our data partners at kensho, after similar moves in the first half of the year, the bullish trend tends to continue through the rest of the
year with the group averaging a gain of another 9.9%. trading positively 90% of the time for more, go to cnbc.com/kensho. "the halftime report" is back in two minutes. (indistinguishable muttering) that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches
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1.6 first. and nasdaq is also off its session lows but still down by 2.4% microsoft is up nearly 15% this year atlantic equity said the run is far from over. today, the firm upgrading the stock to an overweight, raising the price target to $125 a 25% upside from here this is our call of the day. and you gotta wonder when microsoft becomes fully valued, sarat. >> i think you're getting there, but actually what i like about the story is compared to a lot of its competitors, it has everything going for it in the sense of the cash flow, the balance sheet, the dividend, and they don't have really pieces of their business anymore that are holding them back. a lot of their competitors do. in this time where everybody else selling their tech, this is a good place to, quote, hide or even actually add to because i think you're going to be fine for the next few quarters. >> i also think you're seeing significant enterprise i.t. spending, and microsoft is a significant beneficiary of that and i don't think that cycle is over
again, not i'm looking to do something like sell microsoft. i have the good fortune of being long microsoft from the mid-60s. i would stay with this company just maybe you want to hedge against it whether you're using the options market or something like that, but the cycle continues. i think saratd is right. i think the balance sheet is incredible, a tremendous amount of cash, they have grade leadership, and also, i would add when we had the troubling news, as privacy concerns with facebook, microsoft, there's something about this company that management makes the consumer feel secure that privacy is present i think that's incredibly important in this technological environment that we're in, and it's one of the reasons why, okay, if it pulls back a little, i'm willing to stay with it. >> the analyst forecasts for asia is strong, but they're saying more than $100 billion in revenues over the next decade in what the analysts estimate to be
a $450 billion market opportunity. they're essentially saying microsoft will have about a quarter of the total addressable market in cloud. is that something that you believe? seems like it's still early stages >> it's still early stages still very competitive where microsoft has the advantage is that they have already got like apple and some other things, that ecosystem there it's a mistake just to think, some people still do, microsoft is just an operating system. it's not it's a.i., it's cloud. it's across the spectrum, and they're going now technology driven, and putting more money into r&d so that's why i still like it. it's a good place to be. not impervious to a drawdown >> competitors are amazon and google, and microsoft knows how this game is played. google's trying to get up there, but amazon is by far the leader in this space, but i don't think from our understanding is amazon doesn't have the ability to go
where microsoft goes >> i let it get called away. so to joe's point, if you're in it, in a taxable account, do you want to sell it to buy it back 7% cheaper if it corrects like that of course not, but because it was tax deferred status, i decided to let it get called out. but what i really like about their model is the reoccurring revenue. the monthly reoccurring revenue. even though google sheets and everything that powerpoint and excel used to be for microsoft is not a freebie because google gives it away, these guys, nonetheless, have the enterprise stuff that gets that reoccurring revenue, just like adobe does. so i think you don't throw this one out. i think you hold on to it like i say, with that caveat about the tax deferred status. >> going back to our discussion at the top of the hour in terms of a day like today when we're seeing tech used like an atm, is this the stock you buy on this
weakness or is this the kind of stock you let go away? thinking that technology could have some trouble. >> again, longer term portfolio objective, sure, i would buy it here but understanding, as i said before, this is a trading event. stock is $98 it could fall to the low $90s. easily >> i think you could buy this or most of the leaders we have seen i like netflix i'm just saying that the valuation is a little higher for me but to me, that's also just a solid company with a moat around the business i think just think if you do your work, but this one in particular is, and famous last words, relatively safe holding >> i agree with joe. i would nibble into this if you did not have a position, but i would not use this as a source of funds i think this is much more opportunity. >> up next, jon's got unusual activity bullish options moves he's following in one stock up 4% in a month. >> plus, let's take a check on
the s&p 500 sectors. and no surprise, the more defensive sectors are managing some gains today utilities, staples, and telecom. halftime back in two >> miss the blitz, the call of the day, or unusual activity with the najarian brothers no problem go to cnbc.com/halftime to see the moves, the trades, who's winning and who's losing plus, breaking news and analysis of all the top stories just go to cnbc.com/halftime ♪
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welcome back, everyone i'm sue herera here's your cnbc news update at this hour. rising waters preventing divers from moving deeper into a cave complex in northern thailand forcing them to suspend their search for 12 boys and their soccer coach they have been missing for two days but officials say they believe that they are still alive. >> a german rescue ship remains
stranding off malta with 234 migrants onboard and no port at which to dock. both italy and malta refuse to give entry authorization to the ship five lawmakers from three different countries went onboard to try to negotiate a settlement >> a plane crashed into a canal at orlando executive airport before takeoff this morning. four people were onboard but they escaped injury. officials believe the plane did not gain sufficient air speed before trying to take off. >> and senator joe manchin cracked one of senator claire mccaskill's ribs while performing the heimlich maneuver on her at a luncheon for senate democrats on wednesday he dislodged the blockage and cracked her rib in the process she quipped she probably won't be hugging people in the near future scary stuff. >> thank you, sue. time for unusual activity. jon is watching the aungzs moves in omnicom what are you seeing?
>> what i like to do with unusual activity is especially follow somebody who's been right before in this case, somebody took really big profits off the table because of this bounce that occurred from right around the 70 level in omnicom all the way up to 75 they pulled a lot of money off the table, but then they put it right back to work in some august calls that's the pat that i love to follow. august 80s are what they bought. another $5 out of the money than where it is. they bought about 4,000 of them. 400,000 share equivalent, mel. so i bought these. i intend to sell a higher strike if indeed the stock does see more of a bounce from here down about 1% today. so you're getting in at a better price that last friday i like everything about the setup. i'll be in it about a month. >> thanks for that, jon. >> next up in the blitz, the trades on kroger, american express, estee lauder, and american ieairlines and let's lo at the markets
a down day across the board. flis&p 500, ditto, the nasdaq iseeng the pain, down 2.5% "halftime report" is back right after this alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. need a change of scenery? the kayak price forecast tool tells you whether to wait or book your flight now. so you can be confident you're getting the best price. giddyup! kayak. search one and done.
and i am a senior public safety my namspecialist for pg&e. my job is to help educate our first responders on how to deal with natural gas and electric emergencies. everyday when we go to work we want everyone to work safely and come home safely. i live right here in auburn, i absolutely love this community. once i moved here i didn't want to live anywhere else. i love that people in this community are willing to come together to make a difference for other people's lives. together, we're building a better california. trader blitz first up, shares of kroger under
pressure after being downgraded to a hold over pivotal research. >> this company has actually performed relatively well here since the earnings have been reported price target raised from $30 to $31. the analyst gives it a hold. i want to take a different angle to this and talk about socially responsible companies, and this is one that identifies as such over the next couple years reducing electricity consumption by 40%, and with an initiative that they call zero hunger, zero waste. socially responsible company, that's why i think i like this >> all right, american express higher an the supreme court rules anti-steering provisions do not violate federal antitrust law wheres sarat owns this >> yes, it's an overhang the stock had a lot of things against these cards, amex, the stock has done well. >> american airlines trading at lows not seen since march of 2017 >> rub it in, mel. rub it in. >> just stating facts.
>> i have tried to catch this falling knife a couple times and each time i have got exactly what i deserved, i guess this one continues to fall because the price of crude oil continues to rise. after the opec meeting last week going into it, we were right around $65 for crude now $68. that's, of course, horrible for any of the big consumers >> why do you hold on to this then >> i have calls. but in all likelihood, i'm going to have to dump those calls. >> estee lauder lower today after the stock was downgraded to equal weight at morgan stanley. >> they had a great call they have been on since 2012 you can never fault an analyst for taking profits i like it long term. a pretty unique franchise, great company, but unquestionably, had it a great run i think if you own it, it's a point of conversation we had, you don't sell it. >> this is one of the premier companies that it's hard to buy because it always trades at a premier valuation. kind of like ulta on the retail side there are times you get to buy it, but very few and far between. >> it's been a volatile year for
let's get started. show of hands. who wants customizable options chains? ones that make it fast and easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online. that you don't think about is very much. counties it's really not very important. i was in the stone ages as much as technology wise. and i would say i had nothing. you become a school teacher for one reason, you love kids. and so you don't have the same tools, you don't always believe you have the same...
outcomes achievable for yourself. when we got the tablets, it changed everything. by giving them that technology and then marrying it with a curriculum that's designed to have technology at the heart of it, we are really changing the way that students learn. and i can't wait for ten years from now when i get to talk to them again and see, like, who they are. ♪ s&p energy on pace for its worst day in a month, but bmo is bullish on oil and gas saying it remains undervalued. you're dipping you toe in. >> very small toe in i think there's a floor to oil
in gas, where on the oil side, we were looking 30, 35 that's going to be more 45, 50 some of the guys in the u.s. like apache, very small positions to start it's easily you can get burnt on these, but if all goes down, a lot of other things work better, but this are good high-quality companies to start positions with >> how should we think about investing? this says to increase exposure to north american oil and gas versus other oil and gas companies who may have more exposure is this a call on stronger u.s. economicgrowth backdrop? >> i would say yes to all and yes to continuing to have exposure to energy i think that the paper asset demand for it in the last couple years has been so significantly depressed that so many came into this year really underinvested in the energy space itself i think you're beginning to see
the alignment of fundamentals being married with the paper asset demand finally after years of not having it >> paper asset demand? >> paper asset demand just basically means on the speculative side when you're designing when you are designing portfolio and allocating towards it. that really kind of is different from a fundamental rise higher you have different reasons varying inflations and expectations to whatever the case may be and the sodownside energy that's the environment so far. the appearance to me is that once again you have a cartel and generally when you have the cartel, the downside is limited and there is the limited coordination between the saudis and the chinese. the conspiracy theorists would believe that's the case.
the iranians in the scenario are losers >> so i have seen -- let me address the point when you say of the paper, that's my issue with the sector. there is so much speculations that everything think you are energy expert and there is so much leverage that you can play. like andy hall had a fall up if they can't get it right with their pipeline, pard ton the on into direct resource how do you get it right? i do believe that you got the bottom end of the pricing is okay and firm and of course how far it goes up and go. private equities want to get paid >> in terms of the argument that investors are under wait to energy and that'll be another factor to push the sector higher
do you buy that dr. james? we are talking about rotation and taking money out of technology, why not energy they can look at a lot of these stocks and again to the contour to it, the opposite moving of the airline stocks they move in versely i thought and i pick bottoms many times for the airlines stocks and then i got what bottom pickers get, stinky fingers. i think you will see more positive moves out of the energy space because of the opec move not being as large as people thought. >> all right, on that note >> these guys are holding in stinky fingers >> that's what bottom pickers get. >> let's get a check of s&p 500. technology is the leading lagger of the group smh is down about 4% right now "halftime report" is back right
after this with the final trades once there was an organism so small no one thought much of it at all. people said it just made a mess until exxonmobil scientists put it to the test. they thought someday it could become fuel and power our cars wouldn't that be cool? and that's why exxonmobil scientists think it's not small at all. energy lives here.
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welcome back to the "halftime report." now, we are taking up your questions. shane asked, is any bullish on lenard >> i am not. these are one of the stocks that you would think it would do okay because of the economy i just don't think you can see it from tomorrow's earnings, although i could be wrong. they have done a great job prior earnings next up, jim, he tweets us, can you explain why walmart is up today on a bad day of the market joe, you recently bought walmart? >> i do think walmart lower 80s
is the opportunity and the investment they made in flip card, that'll pay off longer term jim, as to why it is up today, i could not tell you >> more defensive do you think because of low prices on consumers? >> we can speculate all we want. >> or the competition of amazon and having to collect the taxes and the stable sector. >> i am glad you may have an etf issues here. >> final trade time. dr. jay, what do you say >> pg&e, utilities they were in the headlines and some of the california wildfires and whether or not they have the responsibilities there you are buying at 41 here. upside call today, i bought it >> i got the stinky fingers here, delta. it is hitting 50 delta has a refinery business and that hedges some of the downside for it. >> can joe follow that
>> my final trade is micron. they reported their quarter and did great quarter and great guidance i like micron. >> adding the walmart, costco and target, those are names you can buy and these gentlemen at 1:00 got a killer tie going on >> that tie starts right now it is a killer >> stocks are tanking as president trump is doubling down, he's planning to block china on investing in u.s. tech firms. are we heading towards a major correction the fallout for tariffs. harley davidson expects the cost to spike the stock is getting slammed we'll talk about the road ahead for h.o.g. the best performer this month, does that trade have to keep going? "power lunch" starts