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tv   Fast Money Halftime Report  CNBC  April 1, 2019 12:00pm-1:00pm EDT

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manufacturing number, but lyft is what has all kinds of people's attention $69.42 now, down 1 1.5%. >> roku up almost 8% watch a movie if you got those shares >> and apple hovering near the flat line on the price cuts cnbc has put out there. >>let's goet to the judge. i'm scott wapner survey says our exclusive look at where wall street thinks stocks and your money are heading in the months ahead revealed right now it's 12 noon and this is the "halftime report." >> stocks surge. the s&p and dow now less than 3% from all-time highs. is a second quarter breakthrough on the way plus, the halftime report's stock survey see where money manager manager investment officers and other big name wall street investors stand on the state of stocks plus -- lyft's big drop.
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and a giant energy play is today's call of the day. the "halftime report" with scott wapner begins right now. good to have you with us here to debate and trade the big stories of the day, the first trading day of the quarter joe, jim, josh brown, john najarian, also liz saunders from charles schwab stocks surging to start the second quarter after scoring the best start to a year since '98 the big question now is, now what we picked up where we left off on friday. only 80 s&ps away from a record high is that where we're going? >> i feel that's the most likely and, look, it's been a long time we've been consolidating for a very long time and there's been a ton of noise i'm going to give you a statistic that's going to blow you away since january 17th, 2018 when the dow peaked, the dow has since traveled a cumulative
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58,000 points. that's up and down 58,000 points. and in all that time the net gain for the dow is just 40 points think about how much noise we've endured over 15 months but now the s&p 500 is at the highest point since just before that big october flush now you have transports up big yet again. you have stocks like cisco going bananas. large cap, big names that are not expensive stocks you have semis up big. the banks are acting well. so, yeah, if you ask me what is the weight of the evidence, what do you think is most likely, i don't think it's going out on a limb to say we'll test that old high i hope we get through it we'll see what the volume looks like and how internals are acting then. but ten days ago we were screaming about recession and inverted yield curves and the worst guest you can imagine coming on every financial network and giving quotes that recession is imminent and look
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how quickly price changes sentiment and the rhetoric and changes the tone >> liz ann, broad-based rally. what's not to like >> well, the breadth has been great. we've got a couple of breadth trusts the whole idea invented by my first boss in this business. that's a good technical underpinning and this really continues to be healthy. some of the cracks you started to see with the lack of participation, josh talked about it, by the transports. that's turned around the cyclical bias. i think, though, that really important in the near term is what we see during earnings season not just companies reporting relative to what has been just an unbelievable slash in q1 estimates down into negative territory but with the outlook expressed for the second and third quarters where you only have marginally positive earnings i think that's the next big hurdle the market has to get over whether we can get to new highs in advance of that
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>> is this justified, the move we've seen do earnings expectations, where we are, this run we've had since the bottom of december, is justified? >> yes, justified. and with the china manufacturing numbers that we got today and impact this is, what, the first time in four months that they've gotten back over 50 highest reading since july of last year, i believe out of china. we've also got draghe talking about the stimulus they've got to apply, they will apply. that headline out this morning that didn't hurt i think we're going to see this bar stepped over very easily by a lot of these companies because the numbers have been taken down so far, judge. and even with bad numbers like there were several stocks that had not great numbers today and still moved up by five and seven and 8% because of short interest being so large in some of these. do i expect it to continue
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i do and i think the numbers for the first quarter as they start to come out are going to be reflect exactly that >> i mentioned our exclusive halftime stock survey. jim, i'm going to lead to you with that. of all those we asked, 81% say stocks are correctly valued right where they are the most stunning thing is that the overall outlook, nobody is negative at all. zero percent of those that we asked about the stock market right now, 70% are positive. 30% are neutral. 0% are negative. that cool? >> we must not have had any bond managers in that survey, scott but, no, look, i'm in that camp. i have to say the thing that worries me here is we're talking just a second ago about china stimulus and monetary stimulus fed on pause maybe a rate cut this late in the cycle. that gives me pause. i think liz ann sonders has a good point that earnings
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expectation, you pointed out were at fair value, everybody says around 17 times. they are down from 180 about nine months ago. so that shows you we're at fair value. we would have been cheap if those earnings estimates stayed where they are the second half of this year, you have to see a pick-up in earnings for this market to go higher how do you get that? the only way is a significant easing of trade tensions not just with china but also with the eu. if you get those two things easing, maybe past brexit. start to see earnings growth again, you need that >> why wouldn't sentiment be good you know if you are managing money professionally you need to be a part of nat some way, shape or form and that act of buying and joining the circus is going to change the way that you speak and think. you almost have to convince yourself that's what this business is you can say i don't like it. you can say that's not rigorous and -- i'm just giving you the
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way the world actually works it confirms what our survey concludes. bank of america, merrill lynch does the sell side indicator they look at strategist calls. they're showing that we're matching a cycle high back to 2011 in terms of optimism on people on the sell side on the street so you look at that and say, oh, everyone is bullish. that's it. but then understand something. that can persist for months and quarters on end provided the market continues to provide the backing for people to feel good about that decision to be bullish. and that is what we've seen throughout the first quarter >> it can change in a dime, though you mentioned it yourself. >> it has changed on a dime. >> it persists forever >> but why wouldn't sentiment be good if people were rewarded for -- >> the rug could be pulled out from everybody's feet if you don't get a trade deal on china. if that thing gets worse, this thing will turn on a dime. >> i'm going to let my attorney explain --
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>> i have to disagree. we've gotten here without that >> no, we haven't. >> you can say it's all baked in it is not baked in >> it's totally baked in >> we have no idea what the deal is going to look like, do you? >> no, you just need a deal. the market hates uncertainty >> i agree the market doesn't like uncertainty, but it can't be cooked in because we're uncertain about what's out there. what might be the deal we don't know. >> some of it is undoubtedly baked in but there could be to -- >> optimism that we're moving towards a deal is what's baked in, yes. >> you could get 5% to 6% pop. the reason why sentiment is, in part, so good, joe, is people are afraid to get out or be negative because you'll miss what siegel says is a 5% to 6% pop on a deal. >> okay. >> who wants to be on the other side of that >> in the reality of successful investing what matters is rates, the economy and profits. and that's what's important.
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>> and friendship. >> this fixation on the trade tension headlines is disruptive to the process this is about profits and where do we go from here you look at s&p companies. 140 companies that have already guided eps for 2019 lower. so the expectation has been taken lower. if you reflect on q1, and we're having this equity conversation. the reason sentiment is so good is because the sentiment surrounding equities blends itself and extends into other asset classes that are incredibly important companies with western european sales up 20% companies with international sales, up 20%. high yields which did not have one offering for december is having a record quarter. this is not just specifically about equities >> the reason i say is it justified, is it you judge that? >> well, it's hard to judge at this point i'll go back to the discussion
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we were having on trade. i think a deal, some sort of deal is priced into the market that's part of the reason for the rally we're seeing i think, therefore, there are kind of binary risks there's a risk if there's no deal, especially if the additional tariffs kick in and then the administration turns its attention to europe, remember, the usmca has not been ratified yet that's a worst case scenario i think the market sells off i think an actual full comprehensive deal that has most egregious has m practices, that probably isn't baked in to the numbers. the other thing i would say in a specific to valuations which you were talking about, a couple things about valuation one, it depends on which metric you're looking at. we concentrate on p/e. there's the cyclically adjusted p/e, valuation mess rick metric. equity risk premiums, the fed model, the rule of 20. you can go longer term, price to
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sales, the buffett model it really is a function of what metric you choose to use let's also admit that valuation is as much a sentiment indicator as it is in the roots fundamental indicator. there are times investors are willing to play nosebleed valuations for stocks and times where investors don't want to pay anything for stocks. so this idea that it's sort of this hard and true fundamental number belies the fact it's a sentiment indicator. >> it's josh brown we've had quite a drop in the ten-year quite a drop, not quite as big of a drop in the longer end of the curve but mortgage sub-4%. there was a lot of concern about housing numbers falling off a cliff this winter, allegedly, although we know how cold it was and, whatever. but is that an area of concern that you would say has now been amply addressed by falling rates? >> yeah, i think the prospects look good for housing.
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remember, though, it's a smaller driver for overall gdp and kind of what's picked up in relative terms is the capital spending side of the equation and the export side of the equation. that's where you still have a negative offset if we don't get some sort of deal on trade but i think the housing piece of the economy looks pretty decent right now. >> so let's go back to the survey we know where we are in the market just told you how optimistic people remain. what about where you want to be within the market itself the fed made a great pivot in the last few months. do investors need to pivot away from what's worked or stick with what's working the best sectors, 19% was best for tech the top sector buys tech 78%. by far and away the winner of where the folks we asked in the survey think you should continue to be is the winner thus far
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that make sense to you 78% say tech then health care, industrials and energy >> so technology is where the growth is. the market, though, over the last year has been a defensive oriented market. so far year to date you're actually seeing going global is better than actually going domestic i think if you are looking at where you want to be, the question becomes in these earnings, do you gravitate more toward a cyclically oriented portfolio? that's the question yet to be determined with a strong degree of confidence, the missing metric in this economic conversation is the consumer if you look at 2018, consumer spending grew by 2.6% p consumer spending is still expected to grow closer to 2.9%. why is it that mcdonald's, starbucks, visa, abbott labs, waste management, why are they working? because they're in the services business whether it's health care, whether it's consumer oriented,
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whether it's professional and consumer services. they are in the services component of the economy and that's where the strength is that's where you want to be. >> you asked the question, where should we be i'm going to dovetail with what he said. i want to be in stocks that have a story behind them. and you left it hanging. should we be in cyclicals? i want to be in stocks that are cheap and have a potential to go higher no matter what the market does example, cvs i bought it about a month ago. i've added to it today that's a stock that's gotten clobbered on the idea of medicare for all i don't think that's going to past muster at the end of the day. at the end of the day, one i initiated a couple weeks ago, marathon petroleum i don't want to have a position on whether oil is going higher or lower from here i want something that's going to make money no matter what direction oil goes those are the picks i want >> doc >> you are looking at cliffs like when we talk about
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industrials and inputs for that whether it's freeport or clf, both of these just over the past five days, 6% rally out of one 8% out of the other. i think you're seeing money surge into both of them again today as well as rig, transocean and diamond offshore, do all of those pull from what the survey said as far as survey said it says industrials and energy and there it is. industrials and energy and they've been working in a big way. >> josh, give me your view where do you want to be? what was best tech, real estate, industrials, energy? you want to stay you want to pivot? >> we don't do those type of sector bets but we are overweight international we were last year also did not help this year it is helping on balance. we are absolutely on a strategic basis more overweight, overseas assets, u.s. slightly underweight. doesn't mean we don't own u.s. it means we own less than the
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average financial adviser is recommending to their clients. >> in the survey when we asked people, where's the best place to invest right now? 78% says u.s developed overseas you see that number? >> emerging -- we're actually -- >> emerging is 18. >> if that outperformed this year, everyone will flip >> our job is to manage very long-term money. and there is a higher correlation with better returns when you overweight less highly valued assets. it doesn't work over every time frame. fortunately clients are judging us on whether they can actually retire and have money to spend when that happens. they're not judging me on did i outper form the s&p this quarter. i have the latitude to do what's right for the long term. a lot of managers don't. i'm privileged to be in that position and i think that's a result of explaining the stuff to clients before they invest i don't know what the best thing is to do for the next 90 days. >> speaking of the next 90 days,
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one of the key questions heading into the second quarter is what the fed will do with interest rates? amid a storm of criticism from inside and around the trump administration late friday the president tweeting, had the fed not mistakenly raised interest rated, especially since there's very little inflation and had they not done the ridiculously timed quantitative tightening, the 3% gdp and stock market would have both been much higher and world markets would be in a better place that followed the president's top economic adviser larry kudlow right here on cnbc a few hours earlier. >> i am echoing the president's view he's not been bashful about that view he would also like the fed to cease shrinking its balance sheet, and i concur with that view looking at some of the -- the economy looks fundamentally quite healthy. we just don't want that threat there is no inflation out there so i think the fed's actions were probably overdone
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>> perspective fed nominee steve moore calling for a 50-basis point cut. he said i thought the december rate increase was inexplicable we're joined by steve liesman. joe lovorno, the chief econom t economist. 80 points from an s&p all-time high the administration has been touting how great the economy is and now we need 50 basis points? that makes sense >> maybe just 25 >> does that make sense? need to cut rates now? >> the futures mark set saying a 30% chance of a 25-point basis point reduction by the end of july and a full 25 by year end and maybe a little bit custs next year. so fine tuning inflation is not an issue. and we are losing some momentum on the growth number yes, it makes sense to me. >> this view that was put forth on friday by -- >> scott, hold on a second
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the data was a little better today. i want to call the white house and ask the fed what they think they should do never mind yeah they are running down to the white house now. >> i thought the point view of put forth on friday was nothing short of stunning in that the economy is doing great the president says it's the best economy we've ever had the stock market is, as i said now, 80 points away from a new all-time high. but just in case, we need to immediately cut interest rates by 50 basis points what do you make of that >> i'm a little speechless on this one, scott. when this first happened, i said that it should be nipped in the bud right now because it's a slippery slope and where does a slippery slope lead to? the pit. now we're deep in the pit of the white house essentially trying to run federal reserve policy. and i think about, what is conservatism conservatism starts with, things
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were a certain way before and before we change them we should think about why they are the way they are and there's a reason why we departme didn't have presidents running -- right now what i'm concerned about is the market gets confused. that the market hears the president and the white house talking about cutting rates, and they no longer know what animates the fed and why they're going to do what they're going to do. that may be the right call, but shut up about it >> has it been a bridge too far? have we gone too far in calling for the fed to make these moves? >> no, i mean -- >> you think it's perfectly okay for the white house economic adviser to say cut 50 basis points now >> the fed is not above criticism. the fact invited a lot of criticism upon itself in a confusing market we had this conversation powell did a terrible job communicating late last year, and they fixed it. if you look at the change in rates from the trough, we talked about the shadow rate, the fed has gone significantly and the yield curve is very flat
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and the u.s. is a very much high yielder among the gg20. rates should be low are. >> the markets are -- >> it's different from letting the people you appointed to do something in an independent way get there on their own is there any doubt that the fed would have stopped hiking if the president hadn't said one word >> sure. >> really? >> i'm saying the fundamentals would have argued for them to cut. >> i'm with you on that or maybe either way it's a different debate from the white house running fed policy >> liz ann, what do you make of this argument that now has fermiated everything that the fed -- when you have the president and top economic adviser, respective nominee, all saying you need action and you need action now. at the same time we're having a conversation about where growth is andu make of it >> with all due respect to
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larry, who is a friend, i don't really understand in the same breath saying the economy is fundamentally sound and we need a 50 basis point rate cut. it's easy to look back and say december was a mistake and, frankly, might have been put in place in order to deflect concern about heeding to political pressure so that was kind of the irony maybe of part of what justified in the fed's mind the december move i also can't imagine that the market would see it as a really good thing if, barring any significant deterioration from here and economic fundamentals the fed came out and did such a 180. by not only cutting but cutting 50 basis points instead of the 25 basis points the narcmarket expects right now. i think that would be troubling for many investors >> i think the market has a dependency when larry came out on friday, what was the result of the stock market after he said that? stocks went up >> 100%.
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>> nobody thinks what's happening today has anything to do with a view that the fed is -- >> the chinese economy not going off the cliff -- >> over the weekend a lot of analogies being drawn to your point about the chinese economy and the fact the federal reserve in '98 in a very strong economy cut rates and cut rates specifically having not much to -- >> you'd agree that was an emergency. that was the taibot and latin america -- >> long-term capital, but it was about -- >> global -- >> 89% to the survey, 89% say the fed's next move is nothing raise four, cut seven. so overwhelmingly the people asked in our survey say the fed is going to do nothing and i'm presuming they think the fed should also -- >> why would you be doing a 50 basis point rate cut with wage growth as close to 3% as we've seen in the cycle and unemployment under 4%.
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on what planet would anyone look at that and say that's either keynesian or anti-keynesian? you can say the fed is too tight if you consider things like structure unemployment or labor force participation could be better we can look at the neutral rate and play games with ngdp but i think it's a bigger concern if the fed actually responds to the white house than it is if the white house just says things. so i'm actually with joe i think it's okay for the president to have a view in the modern era as long as it's not being acted on >> you can also have the view the fed made a mistake in december you don't have to make a mistake just because -- >> i think we ought to think about the long game here think about the idea that the fed is going to get to a place where it's going to have to make a decision >> right >> and the question is going to come from the market, what's the reason for the decision? because the white house is pressuring you or because you
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think it's right for the economy? these things go both ways. they -- rates go up and rates go down now i think the reason why there's maybe less pushback at the table here is because the president is leaning in a way that is sort of -- the same idea that people have of where rates ought to go. what if it's the other way what if the fed has to hike. unemployment continues to fall what if we run through this oil price decline and it starts working out of the data and you have inflation firming >> jay powell better wear a bag over his head if he hikes rates. >> by the way, it's not enough pressure on the fed. now you create a political populist pressure around it, and you guys think that's okay >> you think it's okay >> i do. here's the thing -- >> really? >> he went down this path of transparency and forward guidance you can't close pandora's box but a more greenspanian, not sure what he or she said running
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the fed would be more effective. the fed's ability to influence the economy is less than it was 20 years ago now they are accountable for all the things they've put forward so they've put a big bull's-eye on their back and, yes, it's okay >> if i took the word economy out of that and substituted stock market, the fed's ability to influence the stock market has not been diminished in -- >> that's actually gone up that's why we're talking about this >> that's what i'm suggesting. >> the qe was designed to work specifically through asset prices, forcing investors into taking risks >> and the stock market is the transmission >> that is the transmission mechanism. >> everything to do with, jon, a lead-up to a 2020 election if you're worried that the inverted yield curve, which larry mentioned specifically in the interview on friday, is a forward leading indicator and you'll -- more times than not, history says, you may have a recession. if you have an inverted yield
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curve. that would be shortly before an election they're trying to head it off now by urging for rate cuts of this magnitude the stock market is near a new high and the economy just printed 3% or thereabouts for the entire year. >> because they had that down tick in the outlook for inflation just recently, scott they've got a little wiggle room to do that i think they do. >> what do you think they should do now, cut rates? >> i think they should freeze. stand pat. i don't think they need to cut rates here i know based on what mr. kudlow said, that he'd like to see some cuts and see them immediately. i think we're fine i don't think we need to do it immediately and i'd wait until after this brexit thing plays out to see -- >> every president has had views. they just haven't all had twitter accounts i'm going to step away quick break. we'll finish this conversation on the other side. for more on our exclusive survey go to and check that out. it's online right now. here's what else is coming up on the "halftime report."
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>> a d-r-o-p for lyft. is this a bust already or is this your real opportunity to get in plus, wall street's big call on a big name energy stock the call of the day is next. before the break, our data partners on the sectors that fare the best after the ten-year falls below 2.4% on the list, consumer staples and health care. both trade positively 90% of the time when sold a month later both up more than 2% for more, go to the "halftime report" with scott wapner and the traders is back in two minutes at pgim, our bottom-up approach uses a technology lens to identify long-term winners. from energy... to real estate... to retail. finding such opportunities for alpha is the true value of active investing. and around the world,
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welcome back dow still up better than 250 points continuing our conversation right now. steve liesman, apropos to what we were talking about, you just got a rapid update >> manufacturing on the up side. retail sales terrible for february but revised up for january. up 0.2% on q1. at 1.5%. jpmorgan went to 2%. some other folks out there up near 1.7 that's why we're where we are. and i think it's the right idea and i think joe agrees with this is take a step back and let these things clarify right now before cutting rates or hiking
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rates or doing anything. we're letting it see how much of this weak quarter we could get >> q1 will be weak but you'll get a bounce in q2 >> maybe not as weak >> it's still going to be closer to 1-ish if not a bit less a weak q1 followed by a stronger q2 the bounceback isn't as strong as people think but things i look at suggest it won't be. and by the time you get to the third quarter, if the economy is not that robust and inflation is low, you'll be talking a fed cut late in the year >> liz ann, last question to you, how dependent is the stock market itself, this rally, this march to new highs how dependent is it on the fed >> i think it has a lot to do with the fed the most attention on the december meeting powell had at the economic club of new york. i was there in person. clearly the focus was on his 180-degree shift that the fed funds rate was well below neutral to at that point just
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below neutral. but at that point the more important message at that meeting as it relates to what's going on now is it's important for the fed to distinguish between financial market volatility and financial system stability. we've talked about the fact the stock market is only a few percentage points from all-time high we're not at risk of financial system instability we don't even have stock market volatility which he was cautioning against as a trigger for the fed to do something. cutting here, especially twice as much as what would be expected, i think it's premature. i agree with the notion this pause mode the fed is in is probably the right place to be the next couple of months. >> our survey says that people expect them to be. liz ann, great having you on schwab's liz ann sonders i think as ann said, if the administration is right and 3% growth this year, which kevin hasset this morning doubled down in the survey, you don't cut basis points 50 points if joe is in that camp with, if
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the administration is right about this, you talk about transparency they ought to be answering both sides of their equation. on the one hand doing 3% on the other hand a 2% fed funds rate >> i don't think we'll be at 3% growth for starters but you could argue because the fed's cutting and because they're lifting financial conditions, that's why you get 3% growth you get there because of easier monetary policy. >> can i just point out the last 30 years before every recession you've had a fed funds rate above 5% and a fed balance sheet that's one quarter the size it is right now i think the fed is looking at this and saying, if we cut too early, japan, the last 30 years, looms out there. i think large in their head. >> yeah, it's way too complicated. this is about the inverted yield curve. how do we fix the inverted yield curve. the white house is concerned about it you could fix it by being more aggressive on the balance sheet and pushing the buying for the treasuries further out >> the inverted yield curve
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scared the bejesus out of the administration you're not that far from an election cycle >> when you look at why the back ebd has rallied it's been equal part lower inflation expectations and lower real yield. the bond market is sending you a message it expects much weaker growth going forward great having you here. joe, steve now to sue herera with the headlines. >> before his trip to washington to mark nato's 70s anniversary, nato schieffe stochief suggesti not reducing their commitment. >> what we see now is a strong commitment by the united states in nato, and i say that partly because that is what has been stated by the president. he has stated again and again. >> michael avenatti will be back
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in federal court later today in california this on charges he fraudulently obtained a $4 million in bank loans and pocketed $1.6 million that relonged to a client. he's also facing charges in new york alleging he tried to extort millions from nike and the auburn tigers basketball team arriving home last night to a hero's welcome that after they defeated kentucky in overtime advancing to the final four for the first time in that program's history they will face off against virginia on saturday you are up to date that's the news update, scott. back to you. big call of the day on big oil. that's coming up next. plus, lyft's drop. more "halftime" is up in two minutes. first a check on the s&p sectors. s&p up nearly 25 points. "halftime" back after this that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow.
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every year, our analysts visit thousands of companies, in a multitude of countries, where we get to know the people that drive a company's growth and gain new perspectives. that's why we go beyond the numbers. t. rowe price. invest with confidence. we are back. lyft shares sinking further this hour trading below the ipo price of 72. opened $87 and change. >> now down below issuance price
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which is what a lot of people are looking at if you're an investor you get that allocation before it starts trading or the morning of. you want to ride this higher you want to see it succeed the question is, where is this turnover coming from what's going on with any support mechanisms taking place. >> people were wondering about that on friday like where, as it goes below that certain level, it's like, okay, the support is going to come in, right >> one would think >> i've been making calls on this all morning i've not been able to find any evidence of support coming from any of the underwriters at this point in time. that doesn't mean it's not happening. i have not been able to solidify or confirm evidence that it's happening. >> what they call the green shoe >> what they call the green shoe which means it gives the underwriters the ability to purchase 15% more shares than were issued in the ipo at this point this could raise an additional $315 million for lyft now that only works if the price is above what their ipo price is if it's below what the ipo price is, the banks can effectively
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close -- it's not a short position but it looks technically like a short position which allows them to support that stock and make sure that it doesn't drop too much further. >> speaking of shorts, you can't even short it yet. >> not yettwo days t-plus two days,s three days depending on the deal and who is running it. so i think the earliest you could short it would tomorrow >> just dipped under $70 >> scott, they've got options on the 4th so to leslie's point -- >> used to take three months amazing they're able to do that. >> most of it depends on the market cap when you have a market cap this large and certainly uber will be large enough to get them almost immediately. you are seeing -- we don't have much of a history but you're seeing enough volume here at around the 70 level that tells me that the folks that you expected to support it at the ipo price, 72, there's a lot of
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trading activity right here at $69.90 to 70.10, something like that big volumes at this level. we'll see if that's the same level people defend into thursday >> i don't know if the motivation to defend the green shoe is what it was 15, 20 years ago. the investment banking community has changed so dramatically. i wasn't on friday and didn't have the chance to talk about this i think investors are rightly focussing on what this company is it's a company that loses a significant amount of money. and it's right to ask the question in a survival element between lyft and uber, probably lyft isimately is going to get squeezed out >> it's why we raised the issue on friday during the ipo of whether they should buy the stock or not and the twitter ipo had a huge pop as did alibaba and snap but yet a month later the stocks were flat, down 6.5
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and down 8 that's twitter, baba and snap. maybe waiting and seeing where it settles out is the best move? >> the safest way to go. and to be clear, the first trade on friday was where retail investors could the retsically get in that was effectively the highest price of the day and highest price since this company has been public. if you are a retail investor, if you did not get allocation in this ipo, you're under water >> leslie picker joining us and following the money. big call on big oil is coming up next in our call of the day.
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welcome back to the "halftime report." morgan stanley initiating coverage on u.s. integrated oil stocks saying chevron looks the best of the group. overweight rating is what that stock gets $146 is the price target we've made it our call of the day. oil has been a lot in the conversation lately. >> it has. >> crude at 61 wti 2% this make sense? >> it does make sense. i think big oil is the way to get the exposure to energy right now which is unique to the environment of the last couple of years it's not a high beta
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environment. i've been wrong on the exposure to energy so far i'm an oxy i'm going to get out of oxy and go into either chevron or ex exxonmobil given the defensive quality of what the investor wants and the portfolio managers want, chevron, exxonmobil and conoco phillips check all the boxes for you. >> they look at 18% up side, jim. >> i like the call, scott. as you say, 18%. i think, that's kind of on the low side of what you'd be looking for. when you're in these big oil -- >> low >> i think it's low. >> i'm questioning whether -- >> let me put it in perspective. if you think this is a faang name you'll not get those returns from a major integrated oil. not unless oil is going to $100 a barrel just ain't going to happen >> but you clearly have to believe that $61 and change, brent is at $69. >> yeah. >> that oil is going to take another leg higher if chevron has another 18% up side.
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>> well -- >> one is not going to happen without the other, is it no >> i think what they're saying is looking at west texas intermediate at this level is where they get to the 146. their bull case is $70 on west texas intermediate and i think your skepticism is well placed, by the way. 18% is a large gain for a supermajor integrated oil. these names when you play them, you should be looking for low double digits like 10% to 15%, plus a 3% to 4% dividend yield it's going to get that 10% to 15% and it may be a reach but it's a good call >> the etf edge focuses on transports on track for their fifth straight day of gains. first, kelly evans has a look at what's ahead on "the exchange. mark zuckerberg wants stronger internet regulation what he's asking for and what it could mean for investors if you're in the market for a home, your timing could be excellent. we'll tell you why and was kellogg sugar shamed we'll talk about that.
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plus, lyft's big drop you've been hitting also walgreens is sticking with cigarettes. that's all coming up in "rapid fire" next hour. the halftime report is back after this for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life.
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welcome back time for the etf edge. the iyt rallying 2% and exiting correction territory today bob pisani with the etf edge for us today bob. >> the transports, trucking
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stocks being all higher today. iyt up for five straight sessions but that is not the only way to play the space it is a price weighted etf like the dow industrials. and then the spdr and of course the jets that tracks the airlines rick adelman, even okevin o'lea joining us transports up five days in a road union pacific near a new high. what is it telling us? >> transports are the continue ex-of all i index of all indexes it is telling us that the domestic economy is firing on all pistons. even warren buffett gave a few warnings about potential slowdowns but that speaks more the international markets. this is telling us that we have a good domestic economy. i don't like market cap weighted indexes though >> and the iyt is a price
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weighted index, a dow index. they are price weighted. the problem i have here is that you've got ten stocks that are 70% of the index union pacific and a few other smacking around. what do you tell your investors? >> you have to watch out for price weighted indexes for exactly that reason. the s&p 500 is the same thing. top 50 have more money than the other 450 combined it might make sense, but it is a lousy investment strategy. >> so you prefer equal weighted indexes. what is the -- let's take the other said biggest companies out there by sharing outstanding and price should have a bigger weight. doesn't that make more sense >> the reason it won south partly because they are trying to track what is going on in the sector and the bigger companies have a bigger impact, greater liquidity, easier to trade
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and so that is kichbtd ratind o rationale. but if you're going to buy 10 to beings and put 90% of your money in three of them, why own the other seven. >> a good argument for more, tune into our live show 1:00 p.m. and we'll be joined by jerome schneider back to you. >> final trade straight ahead.
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welcome back
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let's answer some of your questions. jimmy, from john thanks for the question. stabilization in bond yields is now a good time to look at the banks like bank evof america >> i like where your head is, but you may have to wait for a long time here yeah, you have the yield can you think, but you will wait for this trade to work >> and josh from alan in louisville, thank you for the question, check point looks like it is poised for a liftoff what are your thoughts >> when i looked it up for the first time in months, i say how am i not in it this is one the best long term enter immediate a intermediate and short term charts i'm looking at a five and ten year being weekly closes i would trail it with the 200 week moving average. that seems to have been where support has happened i would somewhere my risk pa rail ter be per parameter be 97.
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and they expect global demand to outpace supply i like goldman started following them >> all right dow up 267 first day of the second quarter. starting a lot like the last day of the first quarter ended big day for stocks let's do final trades. >> chinese internet kweb, unusual activity >> and massive up side for jpmorgan act like you know. >> and john mentioned cleveland cliffs earlier they have a tough ceo renegotiating contracts. this is a buy. >> mid cap space cprt, an industrial name and continuing to move higher >> and kevin brady on tomorrow
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tax cut law. we'll discuss that, the economy, the fed, and everything with mr. brady. that is coming up tomorrow the exchange begins now. thank you. hi, everybody. here is what is ahead. talk about a v shaped rebound. best quarter for the dow since 2013 for the nasdaq since 2012 and for the s&p since 2009 and more good data to kick off the second quarter today we'll look at what worries the market still has if any. plus lyft is falling below its ipo price. we'll go behind the wheel and see what is happening. and apple comes up empty on a new product. walgreen's can't quit cigs and wa


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