tv Fast Money Halftime Report CNBC December 11, 2012 12:00pm-1:00pm EST
had huge damage psychologically. it still does. >> it's amazing just to look at those pictures and consider everything that came as a result of that. painful episodes left and right over the past four years. >> for sure. >> good to have you back. see you tomorrow. don't miss a special episode of "60 minutes" on cnbc tonight. find out from ruth madoff what it was like to live with the operator of the largest ponzi scheme in u.s. history. "mrs. bernie madoff" premieres tonight 9:00 p.m. eastern time. that does it for us. back to headquarters. scott wapner and the "fast money halftime." a government -- a market paralyzed. a call to action. as our nation careens toward the raiser sharp edge of the fiscal cliff. cnbc has challenged lawmakers to rise above partisan politics. seek compromise. and find a solution. the clock is ticking down. the stakes are getting higher. now we are turning up the pressure. this is a cnbc special report.
"mission critical: rise above dc." >> welcome to the second half of our special all day coverage "mission critical: rise above dc." we are in washington holding lawmakers' feet to the fire on the fiscal cliff. it had been quite a busy morning. here's what we now know. we're expecting house speaker boehner to give us an update on the fiscal cliff negotiations at any minute. in have been sberp rating the previous silence from the administration and speaker's office as a good sign real progress was being made. from what we have heard from our guests so far this morning there's a general sense of optimism a deal will be reached. perhaps not in a forum that's widely expected. that optimism seemingly reflected in the markets. we are up more than 100 point ossen the dow. >> i'm maria bartiromo along with brian sullivan. representative patrick mchenry,
republican from north carolina. good to have you on the program. thanks for joining us. let's talk about where we are. what would you say? where are we in terms of a deal? >> not as bad as last week and
not as bad as the week before. not really in a great position to get things done. the president's more interested in campaigning around the country and telling people to send twitter messages to me on my twitter account. i haven't really seen much. we haven't seen much in the way of phone calls either. that's what he's trying to do. this campaign style rather than sitting down and actually negotiating. >> we did see a tweet earlier from the president basically saying, look, if your taxes go up, it's the republicans' fault. what are you willing to give on? >> what is he willing to give on? this is an interesting question. the president has spent the last month talking about tax increases. and my question to him is, where are the smepending cuts? come to the table with this. we in the house put forward the ryan budget. for two years we got the heck beat out of us based on
our plan for medicare. so we've already put this on the table on how we fix these entitlement programs. which are the real cost drivers for our government. and how you do tax reform so you can actually gain revenue to government and help the economy
groe. >> congressman, with all due respect, the tax -- >> that's a wonderful start for any southerner. >> the tax hikes are about 5% if that of our deficit problem. they're occupying 95% of our national dialogue. it's all we're talking about. why not give in on that so we can get to the stuff that matters? >> the president's leading this debate. obviously the president if you -- >> we're going to get to john boehner right now. he's speaking. let's listen in live. >> we're still waiting for the white house to identify what spending cuts the president is willing to make as part of the balanced approach that he promised the american people. where are the president's spending cuts? the longer the white house slow walks this process, the closer our economy gets to the fiscal cliff. here's what we do know. we know that the president wants more stimulus spending. and an increase in the debt limit without any cuts or reforms. that's not fixing our problem. frankly, it's making it worse.
on top of that, the president wants to raise tax rates on many small business owners. now, even if we did exactly what the president wants, we would see red ink for as far as the eye can see. that's not fixing our problem either. it's making it worse, and it's hurting our economy. i think the members know i'm an optimist. i'm hopeful that we can reach an agreement. this is a serious issue and there's a lot at stake. the american people sent us here to work together. towards the best possible solution. and that means cutting spending. now, if the president doesn't agree with our approach, he's got an obligation to put forward a plan that can pass both chambers of the congress. because right now the american people have to be scratching their heads and wondering when is the president going to get serious? i yield back.
>> gentleman yields back. >> speaker boehner there talking about the president and waiting on the president for -- for those spending cut ideas. this is exactly what we just heard from representative mchenry. your thoughts on what you just heard from boehner. >> i think he's spot on. i think if you look at the question that many folks had about boehner's strength and his ability to keep his conference in line, i think he remedied that when he had a unanimous vote coming out of the house republican conference to be renominated speaker. he's in a very strong political position with his colleagues here in the house. probably the best political position he's been in since he got elected to the house. so he does have the authority and the ability to sit down and negotiate. the president should understand that. he's our point man. >> the president has said many times that if a deal does not get done by year end, it's the republicans' fault. do you feel that pressure? do you feel it's the republicans' fault if a deal doesn't get done? >> i think we live under the obama presidency. historians are going to look back and say this president did these things.
it's his opportunity to lead. it's his opportunity to seize the moment to fix the big entitlement programs, to be this transformative figture that he pledged to be four years ago. look, boehner said the day after the election, he wants the president to lead. now, it's pretty sad, though, that it comes to this. that we in congress are calling on the president to lead and actually try to do something. >> we're not talking about the big issues. all we're talking about is the tax hike which as i noted is a tiny percent of our fiscal problem. >> right. >> why not give into that so we can get to the big issues. >> why not actually talk about the 95%? and i would say that with all due respect to you as well. because all the questions i'm getting are about this tax question. boehner's already said he put revenue on the table. read the bob woodward book, the price of politics. it showed that boehner went much further than any republican has been willing to go when it comes to revenue and funding the government. the second issue when it comes
to president obama saying we want to return back to the clinton era rates, it wasn't the rates that netted government revenue. it was unprecedented economic growth in the tech bubble. so the brilliance of this -- >> and no war. >> well, that's -- that's the rate question. the income to government. spending side of the equation. if we simply return back to the spending rates as a percentage of our economy of the clinton era, this thing would be fixed like that. >> that's what we keep hearing. anyway, representative, good to have you on the program. >> thanks for having me. >> can't wait to hear what the traders have to say about this. "fast money halftime report" with scott wapner and the crew begins right now. all right, brian and thanks so much. welcome to "halftime." traders are mike murphy, joe terranova, josh brown and steven weiss. lots to talk about.
we'll start with the fiscal cliff and stock market. stoc stoc stocks paring their gains just a bit. amid reports in washington talks on the fiscal cliff have taken a positive turn. steve weis, market seems to be anticipating a deal. >> all we've done is ratchet up the now if there is no deal or it's an ugly looking deal we've got much more risk in the market. because the market is assuming that a deal will happen. it's assuming we won't go off the cliff. if you take what boehner just said, to me it's actually good news that the market didn't really respond. because it's negotiation as usual. boehner was really only talking about the cost cuts that he's looking for from obama. obama's just trying to negotiate. so i don't even know why he spoke today. maybe to throw some cold water on the notion or maybe throw hope. we don't know. the point is ignore the
headlines. let's just -- just invest for longer term. >> josh, what do you make of the 100-point move we're seeing in the dow today? it is the fifth straight session that the dow has been higher. we haven't had a stretch like that since march. >> scott, bank of america merrill lynch is out with a report today. they look at fund flows. what they've seen is something remarkable. individuals have been selling. but institutions and he think funds have been net buyers for the last four week institutions have bought an average of $300 million in net worth of stock. what that's telling you is that they're way more concerned with getting in position for next year and whatever the fed's going to do. tomorrow it's widely expected bernanke's going to announce some kind of a transaction in which he buys basically $650 billion worth of mds. another $500 billion in treasuries. throw that on the pile. it's very tough to be overly focused on fiscal cliff stuff when you have the central bank doing what it's been doing all year in the background. that is what the market is watching. much more so than anything boehner has to say.
>> joe, has santa claus -- is he coming early because of what the fed may do over the next couple of days? what the negotiations may turn out to be in washington? the overall sentiment leaping into the end of the year? >> i think relative to santa claus i think ben bernanke is coming tomorrow -- >> they both have white beards beards. >> that environment in essence, why be in cash? why be in treasuries? they're forcing you to go out and acquire risk -- whether you believe it's artificial or not. i think there is credibility in the belief that the lot of it is artificial stimulation. >> doesn't matter. >> it doesn't matter. >> market's going up. you want to be a part of it. >> the market, you are being forced into risk assets. it looks like europe is improving. looks like i merging markets are improving. there's other places for the flows of capital to go. not just the u.s. >> i think boehner sounded like today he was overplaying his hand a little bit. if you step back from the rhetoric, the back and forth posturing in washington, i think you have a market that if you look back in october, the s&p
was trading 1470. it pulled all the way back after the election. now we took right out the 1425 level which was major support on the way down. we cut right through it this morning. the s&p is trading up over 1430 right now. i don't see anything between this 1430 level and 1450. and from there i think we could close on the highs of the year. i think the market's telling you right now, put washington in the backseat. you need to be part of this rally. >> let's go to mary thompson at the market flash desk. >> we are watching apple. of course, apple is higher today up just about 3%. couple pieces of news. fox con, chinese manufacturer that makes parts for apple coming in and saying its november revenues were at record levels. this according to digit times. also we had positive comments out of morgan stanley talking about apple tv. this long rumored product. morgan stanley noting that there's a 13 million unit opportunity domestically and the consumers said they're willing
to pay $1,060 for apple tv. a 20% premium. apple is up just about 3%. >> mary, thanks so much. guys, give me if you would please the intraday of apple again. because from a technical standpoint a stock that's been having a lot of trouble, josh, broke through some key resistance about the 535, 538 level. >> yeah. >> pushing to where it is now at 546. a lot of technicians are looking at that as a good sign that it could push higher now. >> apple's become something of a casino for intraday and swing traders lately. i think the way to look at this is it probably stays under some pressure into the end of the year because of tax law. i don't think that's going to abate. it is acting better than obviously a week ago. i think what's really key about apple in the bigger picture, most of what we're seeing are very short term traders. the vast majority of shares are not moving quite as much as the volume. the turnover is really guys at the margin at this point. >> joe, do the technicals in this stock now matter as much as anything?
>> i mean, yesterday i called apple a casino. to me that's what apple is now. all i care about is earnings. are we going to hit the 50 million target in the iphones? there is opportunity in the tech space today related to the positive news that you are getting from china. and that points you towards a qualcomm. that points you toward nxpi. >> you could throw up google. that stock went back over 700 today. technology is one -- >> google is not tied directly to the sales of those smartphones. >> i understand that. i'm talking about just technology -- >> barclays came out and said technology is one of the two favorite sectors for next year. >> one data point i want to get out here. we're bringing up apple in china. right now they're saying iphone 5 sales are running 50% ahead of what iphone 4 sales were in 2010. that's fairly significant if it turns out to be true. the source for that is macbook translating data from chinese. that's making the rounds.
i think people are looking at this aspect of wait a minute. this is a whole growth market that maybe is not in all the -- people are bullish on the china story. but maybe not enough. i think that's giving it to credence here. >> stocks off session highs after those comments from speaker boehner. really, we're hanging in there truth be told. dow up 106 points. when "halftime" returns we zero in on the health of financial stocks from the floor and more companies announcing special dividends as the nation gets closer to the fiscal cliff deadline. deutsche bank top u.s. equity strategist david bianco tells us who can be next. later, can amazon deliver more joy to investors as holiday crunch time takes a new level. shares up 45% this year. we debate it. back after this.
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i think it's expedia and the ability to grow internationally. again, trip adviser. 38 bucks. i think there's more upside potential in that. >> joey, let's revisit that. what do you think? >> i think first of all every so often a blind squirrel does find a nut. expedia and trip adviser, these are two names you continue to own. let me say this for trip adviser. it did trade above 45 today. at that level the valuation gets a little full. >> stock up 9%. >> trading here 40 bucks, 41. stay in it. expedia, definitely stay in. international expansions are awesome. >> rally in financials is also gaining steam today with morgan stanley leading the back on news. it may ask regulators to green light a stock buyback next year. which bank is your best technical bet now? the floor of the new york stock exchange and steve grasso. what are you looking at? >> i compare jpmorgan, goldman and citi, bank of america. all these names. obviously consensus is jpmorgan
is still probably the name to own. but if you look at goldman sachs trading at $119, it looks like it wants to make a run at 130 bucks. it definitely has to hold here, though, $118 to make that move. or else you're just looking at a sliding market. a declining economy and everything else that goes with it. technically the setup here, either jpmorgan or goldman sachs. i think bang for your buck, goldman sachs. bank of america right now overbought. looks like it wants to come back in. >> guys? >> grasso, i think if -- to kind of give people an easy way to choose, if you think we're going to have -- meaning an up equity market, lots of issuance, maybe goldman is your pick. if you don't think that's the case jpmorgan is probably the better of the two. both of them look great technically. i agree with you. >> from a technical standpoint i agree with steve. he's spot on. goldman looks like if it can peek its head up above the near term trend line it goes higher.
bank of america if you're in the name you need to take it off. way, way, way overbought. >> what are you smiling for? >> i like to smile. i enjoy smiling. it makes me feel good about the day, scott. i'm a happy guy. >> facial expressions are priceless. >> i looked at you. we shared some quick eye contact. i smiled. fundamentally -- >> should i leave? >> no. understoodmentally you have to look to financials. look at the move in them. look at the repair of the balance sheet. you have to look at all these reserve releases that you're going to continue to see in 2013. you have to look at the expense management also. i think financials are one of the leading sectors in 2013. you don't move away from it whether it's goldman sachs, morgan stanley or jpmorgan. you actually invest more in it and trade less. >> i own b of a. i'm not taking anything off the table. it's a compellingly cheap stock. from a technical standpoint, i'm not talk to speak about that. from fundamental. >> longer term bank of america
is a good investment. if you're playing it fast money like the show pull it back. >> i want to play smart money. >> i want to play make money. >> you think bank of america is coming in 30 cents or 40 cents. sit on the sidelines. air out profits. morgan stanley very close to becoming overbought on the heedlines today. look for it to hold that 17.20 range. last sale 17.62. >> as we've seen today fiscal cliff headlines continue to drive the direction of the markets. how high could stocks go if we do, in fact, get a deal? let's bring in deutsche bank chief of u.s. equity strategist david bianco. welcome back to "halftime." >> thank you. good afternoon. >> the market today obviously seems like it's looking beyond the fiscal cliff negotiations. maybe it's rallying in part because it thinks there's going to be a deal. we've got the fed looming. other events happening between now and the end of the year. how do you see things unfolding? >> you're right. with the s&p 500 at about 1430, i'd say the market's putting an 80% chance on there being a fiscal cliff deal before year end. we do think there will be a
fiscal cliff deal before year end. i think that could take the s&p to 1500 by year end or early january. but for what the market does from 1500 over the course of next year, i think really depends on the details of the fiscal cliff deal. we're looking to see just how much fiscal drag there will be in 2013 overall from both spending cuts and tax hikes. and also we want to see just the amount of tax hikes. i hope that those tax hikes are not greater than 1% of gdp. >> how much fed stimulus does the market need to hit some of the targets that you're thinking about it might be able to do? >> the 1500 that is our 12-month target would take the fiscal stimulus, take the monetary stimulus that basically folks are talking about, just a fed balance sheet getting above $3 trillion. i don't think necessarily 4 trillion. i think the key to get the s&p well above 1500 is looking at the fiscal policy, the tax hikes in particular, and probably the
best litmus test is the dividend tax rate. expectations for the dividend tax rate, a lot of optimism has been lost since the election there. before the election 80%, 85% of clients i spoke to expected the dividend tax rate to go no higher than 25%. right now it's only about 50% of clients that expect no higher than 25% dividend tax rate. i think it's key we keep dividend taxation low to get to a 15 p.e. and 1600 or higher on the s&p. >> david, josh brown. i'm curious, one of your colleagues at goldman sachs is talking about getting over the hump. and their reacceleration of gdp growth going into the second half of 2013. you think he's on the money or where would you differ from that opinion? >> we do agree that gdp should accelerate over the course of 2013. i think the real question is, what is the first half of 2013 look like? i think if the overall fiscal drag is greater than 1.5% it's going to be data dependent. there's not going to be a whole lot of confidence or willingness to immediately assume we get
healthy gdp growth in that first half. >> david, i'm sorry. finish your thought quickly. i apologize. >> the first half i think is the key focus of investors. and in the first half seeing what china does and there's some signs of moderate acceleration and importantly what business spending and u.s. exports do, that's key for the s&p earnings outlook. and we, too, think that the earnings outlook in the first half will be relatively meager in terms of growth. but we're expecting stronger earnings growth on the back half of next year. >> we've been highlighting almost on a daily basis companies that have come out and paid special dividends. you're actually looking at some names that you have on your list that you think could, in fact, do that. what kind of names are we talking about? >> the special dividend theme has become very popular in the past weeks as about a couple of dozen s&p companies have announced a special dividend before year end to take advantage of the 15% tax rate. it tabulates to about $13 billion worth of dividends. about $1.25 per s&p share.
not a huge deal. it matters for the companies that have announced it. a little bit of a pop. i think this is more of an option valuation issue than stock valuation issue. but we do think there'll be more announcements over the rest of this week and next week probably taking the total to about $2 per s&p share. a few companies we've screened, we've looked at companies with high cash balances, strong balance sheets, high inside ownership is an important factor. also making sure cash is largely onshore. a few names we think are likely to do it would be norm stroms, stryker and robert half. all buy rated stocks that i'm comfortable suggesting that there could be the additional catalyst there. i don't think this is the only factor you should be considering when picking stocks. >> good to have you on the show. thanks so much for coming on. >> my pleasure. >> david bianco is with deutsche bank. weis, what do you do as you start to look at -- you know, we're trying to name names in special dividend payers. are we going to get between now and the end of the year, which we haven't seen thus far, a flood of technology companies
pay special dividends? people want to know about microsoft. they want to know about apple and some others. >> you could but i don't think so. >> why not? >> because if it's not in their operating plan, if it's not what they've done historically, they're not all of the sudden going to change right now. keep in mind a lot of that cash is also offshore. they have to pay taxes on it first before they do that. one other quick point. going back to what josh said about institutions and hedge funds wuting more money in the market. you've continued to see outflows. if you could parallel that to what corporate america does where they've been worried and not spending, like fund manages, then they go and spend regardless of the fiscal cliff like fund managers, you can get a very strong first half of next year. i'm not there yet. that's an opportunity. up next, shares of amazon soaring this year. we debate whether the holiday rush can keep this stock glowing in the green. and we head to the pits to find out what the gold bugs are doing ahead of the big fed
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welcome back to the "fast money halftime report." let's get a quick check of the markets. stocks are back near session highs. having their best rally thus far in this young month of december. dow has been up five straight days. if it closes up today it will be the best run for the dow since march. so it has been quite some time since we've been able to string together five straight up days for the 30 stocks in the dow. meantime, it's a critical period for amazon as the holiday shopping season ramps up. the question investors want answered, can the stock's 45% climb this year continue? josh is our bull. joe is our bear and says it's time to take profits. boys, let's debate it. why take profits now? >> i think, well, first of all, let's get right out of the way the valuation is full as you obviously know. let's talk about platforms. let's think about what amazon has zone here with the introduction of kindle fire. they now captured 10% of the tablet market.
but that's not enough. they need this ecosystem. they need the ecosystem, josh. the risk is this. in 2012 the recovery has been about margins rebounding. the concern that i have is in 2013 in building out the ecosystem, the serial spenders, they're going to go out. they're going to try to get into the smartphone game by actually owning the hardware. >> i think the way to look at amazon very simply is the ecosystem is clearly the play. if you think about sales growth, that's really what they're after. the investor base is 88% institutional. they fully understand that they're not interested in dropping most of that revenue to the bottom line at this point. they've bought into the division. division is get as many kindles in as many hands as possible. 10% is a nice start. i don't think we're into the 8th inning. it's okay they haven't gotten to 20%. where else are you seeing that in this market? >> does that by getting the kindles in the hand of their large customer base, does that
really address this move from media, from physical to digital? does it really address being able to have that google or apple platform? it doesn't really give them that. >> with that logic they never would have gotten cloud hosted. i think it's worth taking a little leap op faith that besos understands different vert kls and doesn't just have to sell books. i want to bookend this conversation with a technical picture. i'm guessing if you own this stock you're a momentum investor. this stock is ten points off its all-time high. i completely understand the platform concerns that joe has. but i got to tell you, if money continues to flow into this market and it is, a lot of it is coming into amazon. >> good point. >> the bottom line is, ten points off its high. give it the benefit of the doubt. because if it rips through 250 you're not going to want to be short. >> last word. >> i'm more worried about the downside. amazon's had a good year. you want to talk techny cams? 200 day moving average is rising.
220. that's going to be a reference point or focus to get out of the market. institutionally you mentioned 80%. institutional ownership. >> higher. >> think about facebook for one second. i think in 2013 facebook institutional ownership increases dramatically at the expense of names like amazon. i think amazon is in a vulnerable position with that 220 price point. >> there's room -- >> i'm going to end the conversation. right to the jury. who made the more compelling argument? >> i think joe did. here's the issue. you can't talk about point gains like ten points on a $250 stock. because that gives you 4% upside where as the downside is much better. much more. much greater. on the other hand, amazon's a great stock to own because they can't do anything wrong. besos has come out and say you know what? i'm trashing next year's earnings. stock will trade down 10% and be up 15%. for me i can't play the momentum game. to me that's the greater fool
theory. i'd rather go for stocks that are more reasonably valued and have equal percentage upside. >> murphy, a quick take on who made the more compelling argument here. >> real quick, both. i would side more with joe. amazon is one big tech name that hasn't gone lower. the opportunity is there for it to trade a lot lower. >> close this case for now. thank you. stocks are rallying meantime ahead of the fed's two-day meeting. curiously gold is not. why is that? jackie deangelis is host of cnbc.com's futures now. >> good afternoon, scott. gold's been on a tear the past few sessions. but the rally has stalled right around the 1700 level. could this week's fed meeting be the next catalyst that gets gold going again? let's talk futures now. rachel chizen is at the cme in chicago. anthony is at the nymex in new york. let's start with you. if stocks are rallying in hopes of some sort of fed action why wouldn't that extend to gold as well? >> i think what's happening with gold is it's separating itself in the fed meeting. its focus is on what's happening
with the fiscal cliff. you saw that a few minutes ago. when speaker boehner talked gold actually -- it was a negative reaction of what's coming out of washington. gold bounced off its lows. yesterday we had positive news out of washington and gold was lower. the market seems to be reacting -- gold market seems to be reacting to what's coming out of washington good or bad. >> rich, do you feel a resolution to the fiscal cliff would be bad for fwoeld? what are the levels you're watching? >> i think short term it would be bad for gold. you'd probably see the market drop and retest that 200-day moving average. i did a little impromptu jury on the way up here. out of ten guys everybody seems to be a little long. i think that's market sentiment. people have positions on. now we're waiting for the fed to make the cue to see if the market can continue higher. the line in the sand we've been talking about it for weeks, the 200-day moving average, also backed up by the 13-week low. around 1674. gold bugs, if you're long the market, stay long above that level. fit breaks tomorrow that could be it for a while for gold. >> okay. the longs are still out there in the market.
now you know what our guys are thinking. the question is what about you? are you buying gold, bonds or stocks into the fed meeting? logon to futuresnow.cnbc.com. vote in our poll. we'll give results on our website. that's where you'll find today's live streaming show. we'll continue to give you the setup for the fed meeting with george goncalves. he's going to tell us what the fed has up its sleeve. today 1:00 p.m. futuresnow.cnbc.com. >> look for it in about 25 minutes. of course on cnbc.com. still to come on the "halftime" show, our top three trades retail edition. plus, don't get burned by a losing stock. which stocks to sell with the cliff deadline inching closer. ben bernanke arrives for day one of the fed meeting. there he is. we promise you, he's in that suv there. where currentcy traders are placing their bets as speculation of further easing gr
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it is time now for our top 3 trades. we'll focus on the consumer. dollar general topping expectations remains cautious, though, on the rest of the year. the company citing increased competition. josh, the stock is paying the price for that today down nearly 7%. >> there's no secret here. they've had to ramp up advertising spending as well. margins are coming in. it was a good quarter. people don't like the guidance. the stock's okay. if you look at it technically it's broken a pretty important trend line. i can't find a reason to be long this one. you could be long walmart. limited brands has declared a $3 special dividend ahead of the cliff. stocks not moving much. it is slightly lower. >> look at the movement in limited here the stock has made a move from 46 up to north of 50 in anticipation of this news, i
think. now this is one of those sell on the announcement, sell on the news stories here. $3 special dividend is nice if you're a holder of the stock. it's no reason to go out and chase the name here. >> stock's had a pretty good year as you can see. look at urban outfitter. stock up 5% after the retailer said same store sales are increasing in the high single digit range this quarter. the street likes that news. >> street does. it's been a name we've talked about all year. they've got the awesome e-commerce platform. they've invested a lot in that. you also have a relatively low store base that you could build upon. lastly, you've got the anthropology premium brand that's experiencing turnaround. cfo and ceo have done a phenomenal job. a name you stay with. >> as negotiations continue in washington, which winners should you sell now? as a change in tax policy looms. i want your best ideas. we talked yesterday of the best bets if you think we're going to get a cliff deal. look, you guys got to be prudent traders, know when to sell the
winners. >> one of the names i would sell is sprint because i don't like it fundamentally. frankly the fiscal cliff, josh and i have talked about this, wouldn't cause me to do anything. i don't run my fort folio purely for tax consequences. if something's near your price target and you're a holder, then you want to sell. but truth of the matter is is that it's not going to affect that many people. you're talking about what's not a huge increase in terms of the capital gains on a percentage basis. go from 20% to 25% is not that big of deal if you're looking for 30% upside in a name. >> there are people who are selling stocks based on an expected rise in the capital gains rate. >> it may be a huge mistake. >> why not sell and buy it back? >> because then you're pushing your taxes you're paying forward. those taxes that you're paying, you're losing use of that capital for compounding. that's why you don't do it. if you're in the upper, upper brackets maybe you want to consider it. >> let me push back on sprint.
there was news david faber was talking about. this sprint/clearwire deal is closer. that doesn't change -- >> not at all. a distant third in a two horse race. i don't think soft bank coming in does much for them. they don't know the operating environment in the u.s. as well as the big two. i would not buy sprint. i would sell it. take the profits. >> josh, as many people are sitting there saying, calling their financial advisers saying who should we sell, what do you say? >> i hope their advisers know what the correct answer is to give these people. obviously some of this is an individual situation. but for the most part any time i've seen investors do anything en masse because of some kind of idea it's usually been the wrong idea. i'll give you a really great quick example. in late 1999 you had so many people say, well, i'm not going to sell all these dot coms because look how big the taxes are going to be. had they made that move and not worried so much about the taxes, a lot of them would have saved some 50%, 70%. stocks just got absolutely crowbared. i think this is the kind of scenario where, look, you really got to look at your own tax
situation and not try to figure out the broader picture. but for the most part, viewers that are watching this show, a lot of them have money in tax advantaged or tax deferred vehicles. they should not try to play this as though someone else is going to come along and sell. they should kind of sit tight and think about more of the longer term and why they own these stocks to begin with. >> joe? >> i just like that. crowbared. that's one we got to use going forward. i would sell gap. we're talking about a stock here that had secular challenges over the last couple years. this has been a turnaround momentum story. it really is about momentum. it's losing some of the momentum. banana republic, old navy. >> 71% near to date. >> some of the numbers in november look a little soft. it doesn't mean i don't like consumer discretionary. i just think this is about a turnaround story and a rebound that's not really going to have much momentum looking forward. >> murph, le nar.
>> it's had a huge run as the rest of the builders. if we do not get a deal, if we go over this fiscal cliff i think one of the areas that could get hit hardest is the home builders. that whole space could get hit. so many people, concerns pushing out purchases of homes. i think this is an area that has a huge run but could sell off on this news. get out of lennar. pay the short term gain now. if i want to, if i feel a deal is coming, i can replace that money in either the home builder etf or i can look in one of the other home builders. for right now i'm out of the space. up next on "halftime" the treasury is getting out of aig. should you be selling, too? traders take their positions. what happens to the dollar if the fed moves to add more stimulus? we're back in two minutes.
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from the cnbc headquarters, coming up at the top of the hour on "power lunch" mission critical, rise above dc. we'll speak to democrats about solutions. wall street says, of course, the fiscal cliff number one threat to the economy. so what are top economists saying if we don't reach a deal? exclusive results from our cnbc fed survey. and the government cashes out of aig. what's next for the insurer and the ceo robert benmosche? and a special surprise. a member of the rolls stones
will be with us in studio today during "power." scott? >> wow. hard to top that, ty. see you in about ten minutes. >> you got us. you got the four of us versus one stone. >> all right. >> our ages don't add up to that one stone, actually, by the way. >> the dollar index is weakening today ahead of tomorrow's important fed decision. how will the fed's announcement impact the dollar? let's bring in paul richards of ubs with your money in motion trade. he joins us on the fast line. nice to talk to you again. >> how are you? >> good, thanks. talk to me first about euro/dollar. are you surprised where we sit right here giving the news we got yesterday? moti leaving early? berlusconi coming back maybe? >> i think the market is overreact ing. at the end of the day it's italian politics and berlusconi we're dealing with. it doesn't surprise me we bounced back to 1.30. it's not a december trade. when we get closer to an election in february we'll start to take a look. it was way too premature to
react given all we know about italian politics, scott. >> we're watching the fed i know as you are. how does your trade factor in to the fed meeting if at all? >> look, i don't think the market will get much out of the fed tomorrow than we already know. you know, we're likely going to see operation twist get replaced with longer dated bond buying to the tune of $45 billion. we know that. i think the surprise would come if they set the target at a specific unemployment rate. i think that's premature, scott. it's january, more more likely helping along of that ilk would come out. i don't think the fed does a lot for the dollar. >> you're trading euro yen. >> a good proxy for risk. i like buying it at 107. i'm starting 110.50, stop-loss at 106. two reasons, number one, boehner and obama get a deal done realistically by the end of the year. that takes a lot of pressure off the financial markets. the second thing i remain a big bear on the yen and i think boj
meeting, we could see inflation tart rate of 2%, commitment to longer jgbs that will weaken the end. you put that together it's a good buy at current levels. >> always good to talk to you. talk to you soon. umbrellas, paul richard. trades like these every day, every friday on cnbc's money in motion. up next pops and drops in trading. two stocks on fire. is the good run about to end? our trader tell you whether to hold them or fold them when we come back ♪
welcome back to halftime report, i'm mary thompson with market flash. aig higher 4 1/2% treasury news selling 16% steak in property casualty. over 234 million shares average price of $32.50. this means the government will net a profit of $22.7 billion on that aig bill that guarantees loans and treasury investments. back to you. >> mary, thanks. paper is growing. >> if it stabilizes i'll buy more. two negative data opponents i was rating to come out.
one was the hurricane damage, when he know what that is or the maximum will be, and the treasury overhang. full guns ahead. >> pops and drops, first one monster beverage, a pop. >> trading at a 50% discount to its 52-week high. stiffel came out with a buy rating. >> google back over 700. >> they want tech at the end of the year, same thing every year. google a clean name. not a lot of flies on it. challenging 50 day moving average of 58, looks like she wants to take it out for good. stock looks terrific. >> delta. >> delta is fantastic. stake in virgin. they are buying a company that had a $130 million loss in the last calendar year. the better trade who got the 360 million, singapore airlines if you're in the emerging marketplace, i think that's the
main going. >> best buy getting a drop. >> no nice, just one day away. no reason to walk in the store and buy anything when you do it online probably cheaper than free delivery. continue to stay away. >> a drop for twinkies of it's a sad day for twinkie fans around the world as the final shipment of snacks hit the shelves this morning. 20,000 boxes sent to a chicago-area chain where customers lined up early to get the sugar fix. could be a lining, investors are looking to buy, may not be good-bye to twinkie the kid. final trades are next. americans believe they should be in charge of their own future.
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