are the first refiners that have been added personally i own valero. personally i own eog, pioneer. i think overall when you're looking at energy, it's the one aspect of the cyclically sensitive area of the equity market that i don't think you can move away from i don't think you can move away from it just because the pure fundamentals when measuring supply versus demand, there's just too much potential risk if in fact you move into hurricane season and we have an effect on gasoline supplies or natural gas supplies or as we move into the fall and we know that there's going to be turmoil and tumult surrounding gas supplies into europe so i don't see this as the one sector that you can move away from your overweight allocation and think to be tactical. >> we've got a lot of energy ownership on the desk. i want to point to a carter worth tweet back on may 31st he was telling me to short the xle and be long the spy. ten weeks later, we're thinking take the money and run the s&p 500 energy sector down 15% since may 31st the s&p 500 index up fractionally bre

we took positions in refiners for the first time, phillips 66 and valero. >> mm-hmm. >> we also introduced energy product partners, epd. >> epd. >> that's the first on trade there as well so the supply challenge is moving into the winter where increasing the energy positioning concerned on the cap "x" side for industrials outside of the agriculture story, and by the way, we bought mosaic i think you'll hike that up. >> you without devon you bought diamondback, and what's notable here, and you said it, you are almost double the weighting of the s&p for energy. >> that's exactly where we want to which kind of balances out increase in growth that we're seeing for technology. >> okay. you bought data dog. >> i did. >> which is very interesting to me why? >> hyper growth if you think about it that's the first -- that's the first step towards hyper growth. >> hyper pe? >> hyper pe, absolutely. i will acknowledge that, but the first step towards it -- >> does it have an e >> revenue growth 7% year on year how about free cash flow generation above 20% for thisp can. this company is universally, th

they're also going to be reporting, valero's going to report in the next couple of days you're talking about cash flow generation, that is absolutely unprecedented. the margins right now are double what they were from the '04 to '07 period for the refiners. >> final trades after this break. ic playing] ♪ dreaming. ♪ ♪ dreaming is free. ♪ (dad) we have to tell everyone that we just switched to verizon's new welcome unlimited plan, for just $30. (daughter) i've already told everyone! (cool guy) $30...that's awesome. (mom) it's their best unlimited price ever. (woman) for $30 a line, i'm switching now. (vo) the network you want. the price you love. only from verizon. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire [ "back to life" by soul ii soul ] what if you could change match your surroundingsiption. with the touch of a finger? now you can. biometric id... inside the innovative, new c-class. >>> overtime

i think you can buy them on any pull backs >> 52 week highs conoco phillips, marathon, valero, 66, apache jim, you have kinder more began. you don't own marathon >> sold it a few weeks ago, wish i held onto it it had done so well, i decided a bird in the hand is worth two in the bush i have kinder morgan, a nice dividend play to the natural gas discussion we were having, three quarters of their business is natural gas. i really like that one my sleeper for the next couple years is transocean. i will admit i bought it more as a trade, i think of supply demand imbalance, we'll be drilling everywhere. the rigs they have cold stacked are going to come out of cold stack. new builds honored get immediately put in production andat higher and rising day rate i like transocean. >> reminder, do not miss a new cnbc with david faber. june 22nd, 8:00 p.m. eastern time on cnbc. >>> a list of cheapest stocks in the market see if the committee thinks you should buy any of them you might be surprised by some of the names when we come back ♪ ♪ we all need a rock we can rely on. to be strong. to overcom

environment, if you look at what's leading and running, i feel that we have some energy exposure, in valero, eog think that's the right place to play the energy space. we have more beta to the sector in those two names we are trying to get full movement of energy names i think the thing to think about is is it right now the time to add from a cyclical perspective, and again, i see other opportunities in other sectors, given what energy has already done. >> josh, wasn't long ago you added ieo, you don't add things often, but this is certainly one place you looked >> yeah. i actually don't think stock picking in this space matters at all. i think this is a one way trade and that is predicated on oil and gas prices remaining elevated and u.s. companies continuing to invest less than they ordinarily would have during commodity price spikes. if this was 2005, 2006, they would be fracking and drilling their heads off. they're not doing that because i think the signal from wall street is keep up the great work, guys, with the profit growth these are companies that many of which had been private co

pioneer, august of '97 valero, 1980 just when you ask the question can it really continue it does. >> it can, these companies are minting money. that's the theme here. even if oil were to go back to prewar, $80 a share. these companies have gotten more religion in terms of esg and returning free cash flow to shareholders i have been doing a barbell within energy. chevron is a dividend pair slumber jack diamondback, they offered a special dividend on top of increasing dividend, so they have so much cash they don't know what to do with >> josh you own ieo? >> few months ago i put on two etfs i felt were defensive and right places to be this year one was defense, ita the other ieo. u.s. oil and gas explorers and producers etf. top ten holdings, every win of these to stephanie's point looks incredible c not only is the fundamental story that wind at their back, but the stock market is buying the stocks on every dip. i think the etf will take out a record high, recent record high it set on may 6th. maybe today, maybe tomorrow. there's a fresh breakout coming in the space so long as oil is

. >> valero, joe 52-week high speaks to the energy trade right here gasoline in particular driving season i'm pretty sure this is a favorite name of our good friend, mark fisher. i think there's a lot more upside to come i heard him talking about it on the 5:00 show as well. i'd stay in the name you're a one-man stitchwork master. but your staffing plan needs to go up a size. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire age before beauty? why not both? visibly diminish wrinkled skin in... crepe corrector lotion... only from gold bond. (vo) verizon is going ultra! with 5g ultra wideband in many more cities, you get up to 10x the speed at no extra cost. plus six premium entertainment subscriptions, included! like disney+, music, gaming, and more! (mom) delightful. (vo) saving you over $350 dollars a year. and for a limited time get a 5g phone on us! no trade-in required. (mom) amazing. (vo) this is the offer you just can't miss! verizon is going ultra, so you can get more. >>>

next, valero this is another one of the names within the energy space, talk about it a lot of the time trading 1.07 they rolled some calls, sold calls working well, 110 calls, and they're buying the june 125 calls. they bought 8200 of those calls. those are going for about 1.50 i am in all these positions, expecting to see with nokia tomorrow, finding out pretty quick. >> people were thinking nokia may have the first big quarter in ages. getting this from industry people pete, let me ask you, isn't $5 a great call option in itself? >> yeah. that is. that's a call that never expires, jim, unless they completely tank. these are inexpensive options, 27 cents they have a shot if this can perform, get a nice earnings number. >> i like the risk part of that, pete >> let me ask you about energy if other things in the market are falling because of concerns of slowdown, if the only thing keeping oil from falling is geopolitical, if there's resolution on the geopolitical front, is oil and energy related stocks, are they at risk >> there are two types of oil stocks, ones returning capital at inve

so take a look at valero doubled since october of 2020. i'm showing the april 1st, '00 calls. stocks 90, and they're buying the 100 calls in big numbers today. i bought the 90 strike my intention is to sell higher strikes against it as it rallies. second one, equitrans midstream etrn they're buying the march 7th calls next friday, expiration. to $7.50 stock 3.5, $4 billion. i like this one. i think any single digit energy names can see big moves. it's not quite the same since just transmission, but nonetheless, i like this one, too. i'm in both of these trades. >> for that, final trades after this break ♪♪ ♪♪ ♪♪ (vo) this is a place for ambition. a forge of progress. a unicorn in training. a corner to build a legacy. a vision for tomorrow. a fresh start. a blank canvas. a second act. a renewed company culture. a temple for ideas. and a place to make your mark. loopnet. the most popular place to find a space. at ameriprise financial, our advice is personalized. based on your goals, whatever they may be. all that planning has paid off. looks like you can make this wo

few things you want to look at and energy as bryn stated and the name that we like in that space is valero, and i'm not going to go into too much detail because she did a great job of talking about why energy and why now materials tends to be positively correlated with inflation. we also have this looming build back better idea which is not as sizeable as once thought and there is clearly a desire and a bipartisan desire to fix the bridges and ports with the supply chain issues that we have the largest aggregate producer in the united states very involved in residential and non-residential construction could be a beneficiary of that and then taking this inflation one step further and seeing the reaction to inflation by the fed. you want to make sure that you're looking at financials and j.p. morgan, although they had a disappointing, earnings report in this quarter and i think you look at your opportunity to increase the financials exposure j.p. morgan has a faceted business and if you're looking overall at the cyclicality, and particularly if you own some of these big tech names outside o

we used to use the integrateds both exxon and chevron and we've taken our bets in the mp space with valero because we feel like there's additional juice there and that probably persists a little bit longer, but i do think energy prices are going to start to stabilize here so if you are overweight like pete's been like other members of the committee have been i think it probably does make some sense to take profits here that you'll see this quarter. >> all in pital, scott, a couple of interesting positions. >> marathon petroleum, marathon oil. they're reporting next week along with conoco and bp >> listen, i hear what shannon just said. shannon knows i love and respect her. i disagree i don't think you're supposed to trim here. i will note that the market for energy stocks, traditional energy stocks, it seems really jittery. okay it seems like people are quick on the trigger to sell and you have great quarters from chevron, exxon and philips of 6 and all of them are off of the intra-day highs and here's the end of the day story you've got a huge supply/demand mismatch that will last well in

. >> valero energy >> i like nike here. >> moderna >> bac, bank of america. >> good stuff. thanks, everybody. "the exchange" is now. >>> thank you very much, scott hi, everybody. i'm kelly evans. here is what is ahead this hour. >>> stocks are resuming their slide as we kick off the new week with tech back to leading the decline. the nasdaq down 2% semiconductors down nearly 3%. we dissect the downturn to look at what is causing it this time and whether we're in for a fourth quarter to forget >>> meantime, the chase is on for energy, those stocks bucking the down trend again as oil hits a seven-year high, remaining the best sector for the year, only one in the green last month an

but this is a hidden energy play chevron, exxon, valero some of the big clients are those companies. you have a new ceo trying to change the culture cutting costs, focusing on organic growth of 4% to 6% margins can go high are as they cut costs and you see the operating leverage both of the stocks up 20% or so but there is more they can do going forward >> emerson is a new high today as well. josh brown, you're looking at mlm, martin mar yetta. >> i would say most of the stocks look good to me i'm not like an expert in materials or construction companies. but vulcan looks good. this technically looks better. and vulcan is in the midst of the big acquisition they're making i think it's obvious mlm is looking for 400. i don't see what stops it. i would caution people against, quote, unquote, infrastructure like bets, because pelosi is going to tie this thing up in the house until the fall they're going to try to turn this into a bigger bill and make a big show how high they want tax rates on, quote, the wealthy or corporations. that's dragging out. you should not buy the stocks because

little bit until then i think there's more room for crude to move to the upside >> shannon, eog and valero are the stocks you own you sold chevron six months ago maybe. what is your view on this trade? we talked about it, probably more than we have in an awfully long time for the last few weeks for the reasons that crude has gotten that bump crude is pushing $72, so we have obviously hit a trade we haven't talked about all that much it is a small part of the s&p 500. that's one of the reasons why. the stocks seemed to be out of favor for a number of reason including esg investing and the like what do you think here >> you know, i want to put -- and not to put pete's comment on the spot but i think it is an important would have been. so what are your expectations here we're not reentering into a commodity super cycle. we are not going back to china flooding the market with demand and really creating support for inflation of both energy as well as, you know, commodities. so if i go back to look at historical constructs for the oil market, for instance, i'm not looking at this supply/demand i

valero, 48%. now, i totally get the fact that it is a tiny part of the s&p and these stocks have been shunned and they were in the basement. so these gains, while great, are over a short period of time. you go back a year, we're coming through the pandemic, obviously the stocks went down a lot demand dried up. now they've come back a lot. range resource is up 118%. kari, none of those gains sound good to you? you're in the jim camp of it is just -- i can't sell it to my peeps so i don't want any of it? >> well, all of those returns sound great to me. i mean fantastic but if you have clientele that say they don't want any fossil fuels, you don't say, hey, sorry, we're going to buy them anyway, is that okay, because the answer would be know the answer, in fact, is no for about $30 trillion of assets managed around the world now, i'm not making a case that joe and steve or jim shouldn't own these stocks because they're going up, because the cycle has been so horrible for them. i have to make the case

that's putting more demand on gasoline valero, largest refiner out there, vlo, they are buying 10,000 of the june 80 calls. so both of these trades are in june, so plenty of time. june 80s, but the stock was only 71.44 this morning that's a lot of upside, scott. so i'll buy something a little lower and sell that higher strike, but i love that they're projecting great things into the 4 it 4th of july which is normally when we see driving peak in the united states. >> yeah. given the amount of traffic back on the road already in this area and probably in the big city where you live, jon, i can only imagine what it will be like this summer as we really get out and about. >> yeah. >> you are already getting a flavor of that, so it is a very interesting trade you bring us thank you for that we will do ask halftime next send your questions by video, we'll put th oemn the air. e-mail us, askhalftime@cnbc.com. we're back after this. (vo) nobody dreams in conventional thinking. it didn't get us to the moon. it doesn't ring the bell on wall street. or disrupt the status quo. t-mobile for busine

you have hotels like hilton, valero, charles schwab, schwab,i what do you make of the list freeport >> yeah. i think the theme among them that they look like a really dispratt list of companies the theme just as life gets back to normal, their businesses will return to normal and they are underpriced i think as we broaden, the valuation gap narrows. so as that valuation gap narrows, the companies should -- these are the ones that have the most impact and they should start to improve they should just start to resum normal life. one interesting thing is when march and april came, right, all of these facts, all of the financial that's we always depended on to be so true were thrown out the wund yoe. and stories stock surged st but facts and financials will start to matter again and we have seen that happen. i think we'll see that happen more and more as q-3 earnings come the list of stocks own that wall, they're going to be the direct beneficiaries of fact, financials, and dependability just returning to the normal process of investment and analyzing their companies. >> wise, you're buyi

. >> what are you waiting for eog down 29, valero is down and chevron is down 19 you love these and they konand y continue to kill you giuys. >> absolutely. we think the refiners are well positioned we are anticipating that through next year. >> i don't know if i heard you laughing or not pete but energy has been punching you around >> turn me around too. >> you have chevron. we know what's going on with energy you also have u.p.s. up 50 what's the name that stands out to you are they best or worst if you're making any moves forward i love both draft kings and cr yorks port because bauz ecause of that, i n the name has plenty of upside. i met the ceo at one event >> these guys are outstanding. when you look at what they are in terms of the annual potential of the online betsing world, we're talking about 50 plus billion dollars. it's almost a new 50-week. good stuff we he avpete's latest trades in unusual activitactivity we'll do that next >>> virgin galatic is up >> this one is pretty gr interesting. it's performed nicely. some are expecting a great performance this month they are going

valero is in that camp >> weiss, you couldn't stay away from moderna, could you? >> no. it really got crushed yesterday. i said, let me go back in. the wild card here is when the next set of data comes out there's no timetable while dr. fauci talked about july remember july is not that far away, but you will be getting results of the remaining 37 patients or trial subjects that were in there. i think it's going to be positive based upon the initial data i don't want to be out of it completely i think it pays to have a bookmark position in there and just cause you never know when it's going to work. we don't know how it will turn out and having litigated against chinese companies based in the cayman's, it's not fun thing to do i'd still sale >> shannon, you want to take the other side of baba >> absolutely. we just bought the stock i want to give steve credit. he has a lot of experience many this space i don't discount his caution to any extent we feel like with the e-commerce platform and with crowd up 58% year over year, these are great results for baba i think there wi

we like names that are somewhat more insulated our highest conviction name in the energy space is valero we also like chevron we think there are opportunities to own some energy names in smaller percent ans. i think there is going to overall be a cap on the price of oil. i would limit your exposure to natural gas through the end of the year european prices continue to fall and we are not nearly as optimistic about that portion of the energy market. >> these stocks joe have stunk i am looking a of the the returns over a year. there is no other way to say it right. >> uh-huh. >> everything is ugly. >> et cetera impacting high kbreeld refirst and foremost i am with jenny. i have one oak marathon, capital efficiency when you are speaking that language in the energy space shareholders will pay attention. they did so in the case of chevron. that's one of the reasons why chevron has the ownership that it does. but a company that is ahead of where marathon wants to be is apache, apa. take a look at that. but you need to gemmy's point a recovery in oil provides and natural gas prices. >> okay. le

we've got them bank of america, amgen, valero, maybe more in two minutes. mmm... good. so i've spent my life developing technology to help the visually impaired. we are so good. we built a guide that uses ibm watson... to help the blind. it is already working in cities like tokyo. my dream is to help millions more people like me. it is already working in cities like tokyo. looking to get your business off to a fast start in the new year? it's go time! switch to comcast business and get fast internet on the nation's largest gig-speed network. plus, complete reliability with 4g lte backup. and, cloud-based security to help protect the devices on your network. greenlight your business in 2020 with fast internet and voice for $64.90 per month. switch now and get a $100 prepaid card when you add comcast business securityedge. call today. comcast business. beyond fast. >>> the dow transport it's are set to end the year above 18%. according to our partners at kens kensho that tends to bode well for stocks a year later. the s&p gains an average 10.10% trading 75% of the time. f

valero which has had a strong year and pulled back from its november high and phillips 66 psx, which has done a similar type of price pattern and a bit of a correction since november i think that is where a potential opportunity is looking forward. >> and so phillips is the one name that we own in energy and it has been a way for us to play the sector without being in the enp business they don't have drilling, they don't look for drilling. they are not in the shale business they are one of the few refiners left sells for undermarket multiple it is up 34% year to date. we think that it has more room to run the question is whether we add another energy name and i think that the question for many -- >> are you getting out of it >> it is something that you have to consider. the truth is, in has beaen thern divestment by so many institutions and that creative this sort of x factor there may be less demand than we think even if we think that the stocks start to move higher. but if you have a group that has gone down consistently for a decade, there is definitely -- >> to your room, we talk

valero cracks it crack spreads are great right now. they'll get better you want to know why all nice turmoil in the middle east, venezuela, libya, russia, it favors big refiners like valero great place to be right now. >> thank you for your questions. coming up, the euro is hitting a new two-month low ahead of the ecb meeting tomorrow we'll give you your trades, straight ahead ng the future. so, every day, we put our latest technology and unrivaled network to work. the united states postal service makes more e-commerce deliveries to homes than anyone else in the country. e-commerce deliveries to homes - stand up if you are first stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. i will tell you this, southern new hampshire university can change the whole trajectory of your life. i'm seema mody and this is futures now. the euro currency hitting a two-month low ahead of tomorrow's anticipated ecb meeting. our traders, bob, let's start with you plenty of speculation about a

you'll get valero report on thursday, and that starts the earnings sequence for all of these companies. i see great value here >> joseph? >> tough deliberation. i have two names the first name i'll congratulate my friend jimmy here on qualcomm it has not pulled back >> no. >> qualcomm is 85. the final trade i give it, the stock is going down. >> the settlement was darned good to jim. >> it sure was, but listen, that stock has not pulled back since we got the announcement the other day. it continues to march higher and higher. >> it was upgraded today >> morgan stanley. >> and i'm just kidding. you were positive that stock and a holder of it long before that settlement was announced but it was like the day after you had it as your final trade >> since we're talking about it, give an opinion i think it's a $96 stock, based on the re-rating of the earnings up to $6 to $7 a share, give it a reasonable 15 to 16 times multiple does it pull back at some point? i was talking to you about this yesterday, it has to pull back a little bit when you get more upgrades like you got from morgan stanle

/investinyou >>> all right, 30 seconds left on this friday final trades shannon, you're up first >> valero energy, we like this here >> liz, nice to see you, again what do you have for us. >> sector industrial group similar. oil and gas. we're seeing a lot of profit potential going forward. >> zogenix got beaten down early in the week. >> good weekend, everybody you, as well thanks for watching. "the exchange" with kelly starts now. >>> thank you, scott hi, everybody. here is what is ahead. stronger jobs growth this morning, but weaker wage numbers. and the president hammering the fed to cut rates, again. we'll look at whether the ten-year yield is going back below 2.5% >>> self-inflicted wounds. the president is not changing the housing market enough and that fannie and freddie still need to go how likely that outcome is >>> plus, a big milestone in music terms for apple. is this a sign the services push is working if so,he

. >>> shares of valero 13 administers high13% higher pete, what do you think? >> well, i'm seeing someone who already had a profitable trade they owned the june 85 calls and they are rolling up and buying the june 90 calls. 5,000 of those being bought today. so that is interesting and part of the interest that i have there is we don't hit the refiners as often. we talk about the exxons and chevrons and a lot of the other players in the energy space, but we don't hit these as often and it is interesting to see that the refiners, is that a pretty big trade. over $3 is what they are paying. and that is somebody rolling up on those so that is aggressive. i like what i'm seeing i've been increasing my energy exposure this is a name i jumped on i'll be in there for a while >> and an update on anything for us >> i got some updates, but one more option for you as well. in the financial world we have rf and the march 16 calls have worked very well we talked about those not that terribly long ago and they are rolling up 15,000 of those bought today so i bought those, i h

valero bob from the bay area wants to know buy, sell, hold on vlo. >> i do think that oil is going to bottom around 50ish this one oil peeked at 77 bucks, that's wti west texas intermediate october 3rd it has come straight down since then the stock has gone down so, bob, i would be a buyer right around these levels for both crude oil and for valero. >> good one for youer, joe eem. mike miller as we go into '19 what percentage of my portfolio should be allocated to emerging markets? and this comes a day after we talked about morgan stanley with that double upgrade of the em. >> it's a great question by mike i would say in a minimum you want it to be 10%. listen, we're coming off a lost decade for the emerging markets, i understand that. if you go back over the 30-year total return the s&p is about 10.5%, emerging markets 60 basis points lower than that you increase from 10% if you believe you have a rebalancing opportunity which i think we have right now of very low correlation .53 between the emerging markets and the s&p, both very volatile that's a great recipe for the ability to reb

mandates that will strengthen or going tighten the market further and we think whether it's endeavor, valero, marathon petroleum or phillips 66, all those stocks will do well, and we think that they will uth perform the market as well. can oil stay around $60 a barrel, wti, not brent, doug, if we get a million barrels a day added in same the permian basis or eagleford shale in the next 12 to 24 months? >> we think that wti and brent are going to be well above that level. i mean, we think that the forward curve is 15% too low and let me make a couple of points about that first on the demand side, we have a goldilocks scenario in place, global gdp is in positive territory and the u.s. which is 25% of gdp will have lower taxes next year and our economics team believes that will lead to better economic growth which bodes well for oil demap the demand side is not talked about as much because the focus of the debates is on the supply side as you pointed out it's on u.s. shale hand whether or not cooperation between opec and non-opec can continue. so we fully believe that u.s. shale output us going

i reallylike it, i think it's going at least $100 or higher. >> joe, valero, an all-time high. >> yeah, i think it's -- the benefit obviously of what we have heard in terms of taxes the last couple days obviously valero with a higher tax rate, that's coming into place. what we witnessed unfortunately down in houston was a catalyst i'm surprised by of move i'm obviously wrong with that one. >> pete, you bought it >> i did i think people are looking for that, when you hit a 52-week high, 10% or higher, that's what people are playing off. >> did you tell him about the options activity why didn't you hook him up >> i do -- when we have an opportunity to talk, i'll kick him over some of those things. >> we keep it quiet, though. >> obvious i. >> carrie, blackrock. >> they're having some of the same moves it's moving up on interest rates, marks are up, there in all types of markets so we don't own blackrock, but i think it's a reasonable trade in an environment where financials can go higher. >>> range resources is the worst performer in the s&p 500, and joe, you own it? >> i absolutely own

marathon, valero not so bad. this might be an opportunity if you're stuck in the refiners to actually bail yourself out of them. >> yeah. quick, go ahead. >> it's been like pushing on a string investing in energy i don't see that changing. there's enough to analyze there that hardly anybody can analyze without having now to figure out how to be a weather man. if it takes that capacity, great. i may take a look at it. otherwise, i just don't see it there's unending seems supply. >> joe mentioned marathon. great segue for john najerian who joins us doc, good to see you you have unusual options activity in that name. which way? >> exactly, judge. in marathon. well, mamarathon 52.50 strike, judge. i'm going to give you a trifecta >> good stuff. >> not all of them in the energy space. 52.50 strike take a look at that. they bought them for 57 cents. it traded big. a big print of 5,000 contracts, half a million share equivalent, bang, right away what joe taranova is talking about. they're finley ohio based. perhaps how

we haven't talked about the valeros and the 66 and some of the other names you just saw on your screen. what do you do with those stocks? >> i own them. i think this is, again, the time now when oil goes down, it's easier for them to make more money, volume comes in, you want to own these stocks. they have really good balance sheet s now and good dividends that have been increasing. if you're going to buy them, buy them at this time. >> i think sirott's vision is longer than mine has been. i think in the energy trade, you cannot mary a position. it's something that we wanted and desired and it's here. and now we have to learn how in terms of asset pricing to deal with it, because it's not going away and it's going to create environments where you're going to see like we saw yesterday the tremendous build until inventories. >> it's a classic commodity trade, right? commodities by design are supply and demand. the other issue, scott, that you mentioned, with rates rising, guess what, our dollar will get stronger. commodities all sold in dollars. all of a sudden, maybe the market is disco

you have phillip 66 and valero, but this is sector that has momentum to it. you can't build a new refinery. >> joe, adobe. >> adobe reports tomorrow, eight consecutive quarters of strong revenue and eps growth. i think that continues. i think this stock will accelerate. this is a name that has been long talked about as possibly being an acquisition target for some of the older technology names that kevin o'leary spoke about earlier in the show. >> josh, you bought mastercard today. >> yeah, i look at mastercard and visa as two of the better financials. companies that benefit from the woes of american express, forging new deals with costco that were once somewhat off limits to them. you see mastercard doing things with pay pal, becoming an exclusive partner on that platform. a lot happening in finance away from money centered banks. i made that point earlier in the show. it is important we don't throw out 13% of the s&p because rates aren't rising or might rise or won't rise or whatever. >> you're watching the financials. >> i'm watching to see how they separa

sarat owns valero and marathon. >> and me, too. buying these as a long-term play. what's happened is oil's come back down. if you think more people are going to be driving, which we do. think more refining outlets coming across, and one of the big things about refiner, look at capacity. very high. i think at this point, cost increases, consolidation and eke out, longer term benefit of strong balance sheets, good dividends. want to be a long-term investors, stay here. >> steph, why are you in oil? >> a little bit more beta. been kind of slowly building more empss and service. even though there's volatility in the next couple of weeks trying to get the gas inventory down, an opportunity to buy quality names, high quality. number one, number two in the space. end of the year, oil will be higher. next year a lot higher. i don't think refiners -- lag, fine, but lag some of these other groups if oil does get to where i think it will get. >> if you don't believe goldman sachs and think oil will go higher, maybe you do believe goldman sachs and oil will be slightly higher

and valero and the -- >> connick oh and xle. spread out. i really like energy. the way i've seen paper coming in scott, including last week, continues to be bullish. talking about xle, the crack under the 50-day moving date. technically a concern a moment. for a moment. suddenly bounced back above we're off to the races again. >> the hedge fund community got a short crude oil as in many, many months. largely contributing to why you see it rebounding. >> cnbc contributor, croft, who made that comment about the bear trap in oil. that people have gotten too negative. >> same people that are mega long in the tlt right here, by the way. hard to admit when a trend has changed. there's a tendency to want to double down sometimes. we've all been guilty of it. i think that's what you see in the big macro trades right now. >> stick with oil. stephanie link with global asset agent betting on an energy rebound near the end of the year and today bringing latest picks in that space. a segment we like to call "the missing link." how are you? >> good. how are you? >> good. stoc

because the reason i ask is i'm also long valero. >> well, so that other exposure would actually make phillips less li less levered. a big move in refining phillips might underperform the others just from that piece alone. the mid-stream side we think has good prospects, too. production growth declining this year. that's a problem for sort of pipeline transportation companies. and the fractionation companies as well. phillips has all that in the business. chemicals i think a little more muted on. that is a little -- more oil exposed, because obviously european chemical companies consume oil to make their plastics and the u.s. consume natural gas. a lot of it is the cost advantage between gas and oil. the cycle there might be a little slower to materialize, but the other segments i think are progressing through the cycle, too. so it's all coming together for phillips. >> sam, appreciate it. sam march -- margolin. talk about the energy on tap. continental, marathon, apache, who likes what? who owns what? >> i think that -- i don't own them. by the way, joe terranova all over phillips. i

valero only thing hanging in. my favorite, my go-to valero and not as damaging when you look at exxon and chevron and connick oh and names beat up today. we talked about last week. technical and xle. i own the xle calls in january and josh does as well, maybe in the actual xle itself. it broke down, either case, one it broke down harks s to find support and could move to the down side in a rapid pace. ovx, moving up. still in the range. breaks through 48, you have to pay attention. >> josh, xle? >> look at rsi. 37, 38 right now. say oversold to 30. more work to the downside to be done. possibly move in crude below 40. not the end of the world. you may not get as oversold in february. scott, these stocks on a year-to-date basis down as much as 15% rallied up as much as 15%. the truth, like always, somewhere probably in the middle. look for rsi down in the low 30s for a broad bounce in the sector and then pick your favorites. i would err to the side of better balance sheets, larger companies, more financial flexibil

valero, though a hold. make the distinction between the two calls on those two stocks. >> sure. so earlier this year we thought that it was pretty likely that earnings for refiners were way too high. unfortunately had to come down 50%. for that reason we haven't wanted to have as much exposure in refiners. having said that, refiners awful this year. underperformed in the market significantly. the concern i have, take those present in the curve and run through the earnings models for refiners, estimates to be too high next year as well. still on the sidelines with refiners as a whole. we are getting better valuations, though. valero close to a 5% dividend yield recently and when i started to get interested. >> i got to run. before i do i heard you say today and want to be clear, that even if exxon/mobil and chevron have another nasty quarter, in the current quarter, and three months from now we're talking about the same kind of story, you sound undeterred that you wouldn't change your rating on these stocks? >> i am undeterred. i think that these companies are probably likely to

you could look at -- >> i like va valero. >> let's me jump over to don. >> the latest in the ongoing saga the twist here is the ongoing dispute has taken this turn a massachusetts judge has denied a motion to dismiss a lawsuit filed over the removal of viacom ceo and board member. that's the red stone entity that controls both. the judge denied an immediate request for examination of r redstone's mental competentsy. >> a lot ahead on the halftime report. ♪ you've wished upon it all year, and now it's finally here. the mercedes-benz summer event is back, with incredible offers on the mercedes-benz you've always longed for. but hurry, these shooting stars fly by fast. lease the cla250 for $299 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. >>> following facebook's earnings blow oout. amazon, shares are up 40%. >> not willing to bet against it. it's an economy of convenience and time. every time i've tried to go against amazon that's proven to be the wrong thing. if you get a pullback fantastic. >> we were talking about it into their prime day as you r

. >> nothing but option paper going into valero over the last couple weeks like you wouldn't believe and looking for this move to get up through the 50 moving average up towards 55. we see that happen, interesting, because the xle continues to technically hold right on to that 50 day, which has held up a long period of time. >> chevron read through? maybe just -- >> exxon, chevron, right. >> not that great an operator. bp struggled so long. >> i'll take the other side of that xle last week. sold last week. oil still had a best recovery in the last 20 years. we upgraded in early january. it's done well. sold that last week entirely. you've got oil prices, headed up dramatically near 100% move and three things working against it. global growth not at certain and two, supply continues to come through in the market. number three, u.s. dollar liquidity pulled back negatively impact all commodities. >> schlumberger, short barrels a day is a bad call? what they're saying? >> no. i think within oil we like refiners. not big oil. dividends look healthy, even though, we see investors, why they

look at where valero was. i think you've got to look within the oil space. oil itself, like i say, very choppy, very tight range. but when you look at a lot of these stocks, you're seeing stocks that are pulling back dramatically. >> josh, is the s&p in trouble if oil and commodities just do a roll? >> i think that's more of a dollar story than just a straight-up commodity story. but to a certain extent, yeah, there's a real negative correlation between a lot of this new reflation trade with the m-stocks and metals, with base stuff, and with oil. i think that's what everyone's watching. >> i suggested josh, you know, joe says i'm not making a call on the s&p. i just wonder, in a sense, are you? >> well, kind of. but -- >> the thing about correlations is, you can cite them and they can be ironclad, but they change. correlations are dynamic, not static. especially as it pertains to commodities in stocks. bigger picture, let's look at the xle. i think this is important. you have mega-cap and large-cap oil companies coming into earnings seasons with very light e

>> valero. why? because last year at this time crude oil was in the 50s. crude oil is now in the low to mid-30s. guess what, gasoline is still $2 or just under $2 a gallon. these guys are killing it. they will continue to kill it because of the oversupply. >> jimmy. >> i think the bargain retailers are the beneficiaries here. we've been wondering where the consumer is after this so-called tax cut from lower energy prices. we've been thinking they've been spending on experiences. i think that comes to an end soon. where do they first start shopping? at the discount retailers. we're talk walmarts, dollar stores, even jcpenneys. >> what he's been buying on the heels of the fed rate hike. plus, john goes dumpster diving. >> for stocks this time. more half up next. >> instead of those hasbro dolls. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. so wi got a job!e

one of our mutual funds owns valero. it benefits not only from just increasing domestic demand but increasing demand worldwide. and u.s. expects to be a big exporter of gasoline for years to come as well as diesel. valero's really a pure play way. >> we've talked a lot about psd on this show. you have on multiple occasions as well as others. you like it as well. >> we do. clearly pxd is a crude oil producer. the great thing about pxd is where it's located. it's located in the heart of the basin. specifically in the midland portion. in midland county, that's the only place you can find where the rig count has actually increased this year. everywhere else, the rig count's down. but if you're in the right spot and a company like pxd who has a large position, they will continue to produce oil even at this low oil price environment. >> pete. >> are you surprised not to see the flush of many of these companies? because i am. i would have expected we'd start to see a bunch of the smart companies going out of business, the press

>> i think valero is the big daddy in the space. phillips, obviously, we know warren buffett has a position there. you know, mlp's, i think you have to look at enbridge, and even though it's no loernk an mlp, kinder morgan is cream of the pop as far as pipelines. >> what do we make of this unbelievable move really that we've seen in energy? both crude itself and the stocks within the sector. >> so just in time. what they were looking for is at least an expectation of opec and meeting in december will cut production. what's involved them recently, who knows if that happens. i personally doubt that it will. it's enough to get them going. also they point to shell pulling out of alaska. you are starting to see production be cut in the u.s. $7 billion project. can't go for another five years. putin and syria. i don't think that's about protecting syria's regime, about the i think that's about the best way for them to get russian oil prices up is to control what's happened in the middle east. he knows he wants to build an empire. i think

berkeley, you have brought some picks, two energy picks, valero and holly frontier, 2.5% yield. why go with such a low yield in the energy space in these guys in a session with chevron at 6%. >> big debate in baron's about value stocks. >> sure. >> they are so exposed to the price of oil where the refiners like holly and some of the other names valero are benefiting from the lower input costs so as long as the economy is still doing well and refining spreads are still very wide these are actually the better plays. >> lower risk but lower yield. >> yeah. >> and these are the stocks that have been -- >> you can sleep at night over dividend. >> stocks in the bull market for a couple of years now as refining margins have improved. >> and the stocks look good. >> you're talking about a stronger dollar so if we do get the stronger dollar or it continues to be strong do you think energy and commodities in general can work, or are you taking the other side? >> kind of taking it the other side with the refiners, yeah, so if you're looking for more pressure on commodities and oil prices i

>> i would go into josh's camp of certain specific names i do like at this time and i think valero is one of those names that stands out. i have a position in bp. i have a couple of positions, short term because the volatility of this market that we've been talking about, that's what everybody has been attacking. very short interpret and a lot of the less quality names but they can give you some incredible moves at an incredible rate, but you've got to be very, very careful in this market. >> exxon mobile. >> i bought it last weak on monday. happy to still be holding it here even though it gave up some of those gains. i've about now written calls against it. weatherford is one. wft, watch that one. that's a pretty decent drop. i'm watching that one. >> coming up, football fans rejoice. cbs sports embracing the streaming culture. there are a few more games you'll now be able to see on your smartphone, plus, josh brown, there's one less thing for you to worry about. >> there is? >> that's what they say. >> okay. >> we stop serving breakfast at 11:30. >> rick, have you ever heard the exp

the move lower in energy being led noble energy, exxon mobile and valero. for more, let's head over to jackie de angelis on the floor of the nymex. we thought it was dizzying here watching stocks, it's been crazy to watch oil. >> a 24% gain or 27%. sorry in the last three days. very volume tiff swings in crude oil. what's your take on what's impacting it. it appears to be that every day it's something different. >> you know, yesterday it rallied on really jaw-boning and rhetoric from opec and i didn't expect that to last at all. it was definitely overdone to the upside. the bottom line is there's too much oil in the world. and unless that changed, i know the u.s. dropped a little bit. unless that changes by a million barrel as day, oil is going to be pressured to the down side. that's probably why we're seeing a reversal, scott nation's volatility. how much longer can it go on? >> given what we're seeing in oil, we saw shorts get squeezed almost to death, i think we're going to see more volatility. we're going to see it to the down side as people start real

valero, some of these names that had been on our radar long ago and finally started to see the buying in terms of energy. velocity, volume, volatility, that's really what's going on in the market. >> the three ds. you have been cautious, right, on this market. i know you're watching airlines on the back of this energy move. >> airlines have been trading up and there's been that inverse correlation which in my view should break apart and should have broken apart and these are the les vestiges of it. they're afraid that they're going to miss it. so the first tick up, the first news story they can bite on, they run in. i'd say nothing has changed. as a matter of fact, i think e opec is permanently impaired. anything that comes out of there, i would pretty much just ignore unless saudi arabia comes out and says we're cutting production. >> they're major producers. >> they are. oil is so cheap now, right, that you haven't seen any production come in. as a matter of fact, if you have production, the shell producers pick it up again. >> the u.s. has been the swing producer there. let's talk

. >> valero. it is the one area in energy that's been a performer and folks are looking for this stock to potentially maybe even break out to the up side. the september 75 calls getting bought. over 5,000 of those trading. very aggressive buying, well over the open interest. definitely something to keep your eye on. >> okay. josh? >> pete mentions the financials. if you're just focusing on the four big banks you're missing a lot of winners in this space. i'm going to give you cincinnati financial. here's a name we very rarely talk about breaking out to an all-time high. this is a $9 billion market cap with a 3%-plus yield. it is just one example of several financial names that are not paying attention to the rate debate, just grinding their way up. >> dr. j. >> very strong activity in hartford, hig. it began in mid-july. it really accelerated today. they're buying very short-term options that have like that much time before they're right or wrong. when we were getting ready to do this one we thoug

. >> refiners have been very strong, in particular a anytime i like is valero. i think the easy money as it relates to the spot price of oil and the energy equities has been made. i think the opportunity is complete ly on the debt side. you want to go out, look at high yield energy bond, stick them in your portfolio if there's a company you believe has the potential two to three years to go to investment grade, that's where the easy money will be made. >> big hedge fund managers of late talking about that. we'll hear from another one later on in the program. what about this thought on energy, are you looking for opportunities? at some point soon you're going to have to pounce. is it still too early? >> that's one of the reasons the group is rallying today and precision castparts which has 17% of their revenues tied to oil. i think he found value there. >> the stock had come down because of the exposure to energy. >> sure, right. he got a good price. he's a good buyer. he sees some value there. it's not going to go completely to zero. you can make the argument th

valero, tessaro, they're all making a ton of money. >> joe's got those in his playbook, doesn't he? he's there. >> we added a whole handful. >>> coming up, ebay and paypal make their -- uncoupling, decoupling official, whatever. trade something two separate companies starting on monday. a look at what the street is expecting. plus around the desk for the traders' takes. halftime is back after this. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. can a a subconscious. mind? a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive? dentist appointment when my teeth are ready? ♪ can it tell the doctor how long you have to wear this thing? ♪ can it tell the flight attendant to please not wake me this time? ♪ the answer is yes, it can. so, the question your customers are really as