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tv   Fast Money Halftime Report  CNBC  May 13, 2014 12:00pm-1:01pm EDT

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whether or not they have a gold membership. jon, some people wonder why this wasn't done earlier. >> nadella continuing to offer more at a premium basis. we'll see the move. >> the stock not getting much of a bounce. we'll keep an eye on it. 1,897, we'll continue to watch the levels on the s&p. melissa lee will take us through the next hour. hey, m. >> yeah, we'll talk about whether the momentum names have a chance here, because they do seem to be fizzling at midday. guys, thank you for that. here's today's playbook. bubble trouble. how the race to buy the next big thing is brewing a bubble in silicon valley. drone wars. jane wells joins us with a sneak peek at the battlefield of the future, and we're trading it. giants quarterback eli manning making trades on wall street today. we're talking football and raising money for a great cause. but the two-time super bowl champion. let's meet the lineup. another all-time high for the dow and s&p, but is there hope for a rebound in those momentum
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names? pete, some could argue we're just simply taking a breather from record highs that we have made. but some of the biggest gainers yesterday are really taking a big breather if you look at fireeye and twitter and gogo. >> right. and certainly, i think you can stick with the theme of what's been working consistently. it's been the big-cap names. that continues to be the story. you look at the transports yesterday, the industrials yesterday, even look at the financials. i mean, really didn't get covered yesterday. the financials back above the 22 on the xlf, you're talking the big-cap names. when you get an 18-point move in the s&p, you're sweeping everybody along the way, and the mo-mo stocks absolutely were able to ride along with it. can they do that consistently? i don't know. i like the big-cap names and i prefer them, particularly big-cap tech. >> steph? >> yeah, i would agree with pete. what's most important this week is retail earnings, right? sales were disappointing today. there's no sugar-coating that one. i don't think earnings will be that good for the retailers, but i think it will be about commentary and we'll have to
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look at april and may trends together. and here with these companies -- hear what these companies are saying, gross margins, and who will be best positioned. i think it's macy's. it's tgx, and we like pbh. and what we're also doing is just circling back to earnings. who had good earnings, right? we're picking at the companies that are down from when they reported the good earnings, stanley/black & decker, ge, and that's the strategy for -- >> if we do get good retail earnings, mike, will that make you more comfortable with the economy? when we're watching the russell lag? >> yeah, it will. i'm confident already, mel. there is a lot of upside to this market. we got through 1,900. yes, we sold off a little bit. it doesn't mean we have to stay above there today. i think the economy is improving. i think the market is where it should be. i think if earnings come in inline to better, you'll see the market take the nice shot off,
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1,920, 1,925, and a lot of quality names that aren't trading at expensive prices. >> joe, i know you want to jump in. at this point, is the trend still your friend? pete was talking about the continued play for the big-cap names that have been working over the past month when momentum has been getting crushed. you look at energy specifically. close to all-time highs, right? and still holding onto close to all-time highs at this point. >> yeah. and i think, you know, the consensus, again, is what you have to focus on and what the expectations, melissa, coming into this year were. again, everyone is wrong. last evening, gary co-min ski, morgan stanley, anthony scaramouc scaramouche, talking to a lot of advisors, who are uncertain about the direction. and pete is 100% right. large cap's the place to be. you asked the question about momentum names. i wouldn't touch them. again, today, it's confusing. melissa, you don't have the participation from small caps. you don't have the participation from the nasdaq.
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it's all s&p-driven. financials are not participating. so it's confusing. s&p keeps moving higher. i, myself, i'm caught basically chasing the tape moving higher. but i don't have the confidence and conviction that this can extend itself throughout the remainder of the quarter. >> but, steph, you're stepping in. you're buying energy. you're buying in the place that's working right now? >> well, we took some profits in chevron a couple of weeks ago, probably a little on the early side. but we do look at other names like marathon, the quarter was good, sold off on the in yous. so to my point before, we're looking at companies that reported good numbers and have pulled back since then. marathon is a restructuring story. we also actually added to ensco, out of favor, deep water, and the risk-reward is attractive. >> and also a refiner name. you look at valero today, huge caught activity out there, mel. because of that, you look at the energy space, this has been the space over the last three to six months where we've seen the most continuous activity, looking for more upside, hits new sides,
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more upside, hits new highs, and the integrators are starting to participate. the exxons, chevrons, conocophilips, had great participation establishing new highs. >> throw bp in there. >> and even throw in petrolbras. and there's all kinds of activity across the spectrum of energy. valero specifically today. >> murph, you made a great trade on twitter when twitter pulled back. if somebody is outside right now watching, they missed it, is it too late? >> for the trade i did, yes, it's done. i'm still in the name, but i wouldn't jump in and buy more at this level. the volatility you're getting now, and what joke spoke about, the uneasiness or lack of conviction from a lot of people in the market, to me that creates. opportunity. i see twitter at that level, i won't sell, i'll buy more. i have a stop loss in there. i get it around 30, i'm a buyer. high 30s, i'd be a seller. that's what you want to look
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for. have a quality name, like steph talked about, quality earnings, that you believe in, and look for pullbacks, own it, and on the rips, sell it. >> let's get to the "market flash" desk for what's moving right now. sheila? >> melissa, rack space, the shares are spiking up about 9% after the cloud-hosting company posted first quarter earnings that beat on sales and profit. also forecasting second-quarter sales ahead of estimates. it's been a rough going for rack space before today. the shares were down about 30% this year. and it's really a similar story we're seeing with other cloud stock, like salesforce. all of the names have been down in the past month. the big issue is concerns over slowing growth and pricing pressure from the likes of amazon. also, can't forget that cloud stocks had an incredible run in 2013. so perhaps a bit of profit taking happening, as well. >> all right, sheila, thanks for that. you know, what gets me about a name like rackspace is you have an amazon, a microsoft, google, all of them slashing prices on cloud services in
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which rackspace is competing by 30%, to 80%, over the past year. joe, is there a trade here at all? in your view? >> yeah, the trade is to run from rackspace as quick as you possibly can. this stock has been freefall throughout 2013. revenue growth is slowing. you've highlighted the competitive disadvantage they have versus the other large players in the space. and you're not seeing the i.t. cap ex spending accelerate like you wanted in the cloud space. so i think overall, when you look at it, rackspace is specific, i don't want any part of it. you could look at a name like ffiv, it's pulled back. you could potentially put money in there. and put money into emc. emc is a leader in the space, a defensive way to play it. yes, it's slow money, but on a longer-term basis, given the volatility, it's where i might want to be focused. >> i'll add to that joe, and i agree. microsoft is an interesting way.
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>> sure. >> kwle >> everyone thinks of it as a big old tech name that doesn't move that much. if they get ramp-up in the cloud space, they could move into the mid-40s. >> and i would not say if, it's when. nadella came from there. that's where he ka imfrom, and he'll develop that out. i actually look over to ibm. i look to hewlett-packard and the big names that maybe are late, maybe they're slow, but they're getting themselves -- >> you don't go to seagate? >> i do love those names and the big data, analytics, that type of space. i love those names. specifically seagate because it hasn't participated the way western digital has, and it's trading as a discount. >> what's interesting is all the sectors aren't rally on rackspace news. none of them are participating in this rally. so it tells me it's short-covering on rackspace, and you want, to pete's point, go to quality where valuations are palatable. >> they did add thousands of new
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customers, rackspace did. [ overlapping speakers ] >> -- yeah, absolutely. i'm not as negative as what i feel like i'm hearing right now about rackspace at this level. >> you wouldn't run away -- >> i wouldn't run away from it, but i'd rather be in microsoft, which i am. >> ibm ceo sat down with david faber earlier today. here's what she said about the outlook for the company. >> i have unwavering confidence. it's a very clear strategy. i have a world of confidence in the people in this company. at its heart, it's an innovation company. it's not a product company. it's an innovation company. >> it's an innovation company. it's a company that's been promising new revenue growth initiatives for years. and it's still seeing single digit revenue growth. stephanie? >> yeah, we own it. and we don't own it for the revenue growth. we own it for the earnings predictability, and that's what
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you get. double-digit earnings, maybe flat to 1% revenue number, but getting buybacks and dividends. and they are making progress in terms of acquisitions. i don't think it's going to move the needle in the near term, but you're kind of safe with this one. that's what we wanted. >> joe, is safe good enough in your view? >> yeah, i think it is. i listened to the debate yesterday coming out on the plane between pete and steve, and i think pete made great points and i voted for pete from the plane. >> you were right to do so. >> absolutely. by the way, you look even larger on a screen on an airplane for some reason. >> i don't know if that's good or bad. >> but ibm is a favorite name. and stephanie hits it perfectly, earnings predictability. in that environment, that's what you want to focus on. is it going to take off and see $200 print in the next three months? no. but your downside here is somewhat protected. i like what they're doing. i like the european recovery they're a part of. all right. still ahead on "the half," what does the future hold for defense?
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>> reporter: i'm jane wells in arlington, oregon. over the last 25 years, no weapons system has gone further than drones, unmanned aerial vehicles. coming up, how far will they go in the next 25 years? then, is a bubble brewing in silicon valley? we'll find out if the hunt for the next big thing could spell trouble for tech investors. as we head to break, look at names hitting all-time highs in today's session. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience.
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let's hit the trader blitz. four trades making news today. coca-cola exercising its option to increase the stake in green mountain coffee from 10% to 16%. joe t.? >> it makes you think of two things. m&a is alive and well in 2014. sodastream. you have to answer to what coca-cola did here. >> the investors don't believe that, the stock is down 2%. murph, you're long? >> yeah, it's been working three times now. i hope it happens again. i'll be buying more down here around the 39 level. i don't think it has to be pepsi, joe. i think starbucks is in play. >> anybody. >> i also think dr. pepper is looking. >> yeah, longbow research downgrading whirlpool. >> it's a great stock last year.
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and they have to -- they are really priced to perfection at this point. that said, i do like this story. i think they're making good headway with the maytag acquisition and gaining market share. 12% earnings growth in this kind of environment, under 150, i like it. >> multiple reports that at&t is in talks to buy directv for about $50 billion. murphy? >> yeah, it makes great headlines. it's not something i want to invest in. the current market cap on directv is about $45 billion. if they get a $50 billion deal from at&t, great. i don't think you jump in and chase this for 10% upside. >> take a look at elizabeth arden, shares falling after they allowanced a loss in the quarter. it's not that, pete. i don't get this. it's down significantly, even though it said it hired goldman/sachs to explore alternatives. >> you can understand why they're selling this off. it was an absolute monster miss. missed 84 cents and looking for flat. that's incredible. you look at the revenues, beat up as well. and you announce that goldman sachs will be working with you to try to figure out -- >> that should be a good thing!
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>> normally, it gives you a good spike and it's not really happening now for arden. this is a company that's under some huge struggles over the last -- not just this quarter but the last four, five quarters. >> all right. as cnbc turns 25, year looking 25 years into the future. what will the defense industry be like then? jane wells is asking that question in orlando today. jane, drones, a major role here? >> reporter: yes. melissa, that's what they're hoping, that drones are huge in the future at this show in orlando. the headline, iran claims it's cloned a drone, a u.s. unmanned aircraft it allegedly captured in 2011. but 25 years ago, the drones didn't work well. the pentagon wasn't that interested in them. boy, what a difference a quarter century makes. now multibillion-dollar industry. if the faa allows them in domestic airspace, they could employ 125,000 people by 2025. on a field in eastern oregon, the scan eagle takes flight.
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over the next quarter century, expect to see more unmanned aircraft, even in our own air spas. >> there will be more unmanned aircraft in the u.s. military than there are manned aircraft in the military. >> reporter: in 25 years, uavs, or unmanned aircraft vehicles, will fly faster, do more, and fly with manned aircraft as a team. boeing insitu is testing a program where one person can test multiple drones at once. >> that system is designed where one operator can operate up to four aircraft. >> reporter: the next big step is the u-class which can take off and land on aircraft carriers. northrup grubman's type has done it. one built in lockheed martin's skunk works. a lot is riding on it. 2015 will ab critical year for the skunk works, and it needs some winds to guarantee continued funding. lockheed is developing several uavs, like one that can be
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launched with a bungee cord, an it's also looking outside the pentagon for customers. >> let's say you want to look at power lines, oil lines, infrastructure. >> reporter: the scan eagle is already doing that under a restricted license from the faa. ryan hartman believes in 25 years these aircraft will fly in u.s. airspace as their reliability is ensured. but they will also become increasingly autonomous in war, though he doubts they'll ever be given the decision on when to kill. >> i think it's a low probability. i think there are some things, some decisions that humans make that make -- that make the doctrine of war work. and so, i think that's a very low probability. >> reporter: meantime, congress is thinking of holding up funding for the u-class over dispute of what it should be able to do. insitu has an interesting business model. rather than selling systems, it leases them to customers like the marines and leases them the
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operators, and then when the marines in afghanistan are done with them, they take the scan eagles back and refurbishes them for commercial customers like conocophilips. next hour, we'll go inside the most expensive pentagon program ever. back to you. >> wow. jane, you're going to stick around. let's talk about some of the defense stocks, because there's probably only one publicly traded pure drone play out there, ava, but in terms of the lockheeds, boeings, raytheons, steph, where do you stand? >> boeing, we own it. i like boeing. because you get two parts to the story. you do get the defense piece, which they have been shrinking and they should given the macro backdrop and then get the aerospace cycle. in fact, we also own united technologies which is an aerospace parts company. couldn't get that out. parts company, which has more leverage to the aerospace cycle. >> would you, boeing -- >> love it. >> it's commercial as well as the -- >> yeah, and because of that, that's what i do like, along
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with steph. when you really look at the fact they get -- approximately near 50% of each, you're not completely dependent of one over the other. when you look at the backlog, they seriously have been eating the lunch of the competition so far, and it continues. >> and the production in the backlog with airbus and boeing combined. very powerful. >> yeah, and nice consolidation around 130, so i think there could be more upside. i also like boeing. >> jane, go ahead. >> what i think is so very interesting about all of the defense names, especially like a lockheed or a northrup is how they're trying to find international customers, not just in defense, but commercial application for the defense products. so they are less and less -- at least that is the hope -- dependent on the pentagon. >> yeah, you hear reports, jane, such as the commercial plane almost going into a drone? and that could be a real setback in terms of the commercialization of this technology to move away from the government uses, correct? i would think that -- >> well, i do think over the next -- the next few years,
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despite all the concerns of drones -- you have this american airlines commuter jet pilot saying he almost are ran into one over florida, there are lots of concerns about the uav. s. they will be worked out and more reliable and you will see them in domestic airspace, either for training, amazon, or whatever, by 2039. >> jane wells, thank you for that. great job. coming up next, how do you top being a two-time super bowl champion quarterback? how about helping raise millions for charity? new york giants' eli manning is manning the phones on the trading floor today. we'll talk to the nfl great coming up. and is northface a fit for your portfolio? a good old-fashioned halftime debate ahead.
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let's go to sheila at the "market flash" desk. >> melissa, let's talk about the tr transports. leading the way, two airlines. delta up about 40%, alaska air up 34%. union pacific is also a winner, up 14%. ryder also up 14%. and conway up 13%. all of these are powering that index higher, which, of course, a lot of people say is a good sign for the economy. >> sheila, thank you for that. mike, you have two ways you're playing this, air lines as well as railcars? >> yeah. one thing i'd be cautious on, i think the news shows the economy is picking up. we'll see that in the next three to six months out. also, you don't want to chase a lot of the names up at all-time highs or recent highs. so i look at a name like american rail, talked about it last week, raii, had a pullback of about 20%. i think the coming quarters will be much better than the past
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quarter. so seeing that name at a 20% discount, it's one you can own. >> what do you see for the options activity for the airlines? >> it's incredible. three weeks ago, the upside buying in delta -- >> upside, like how far and how far out? >> already has performed, going out to june, options. >> uh-huh. >> and that's went from $1 to $5. that gives you a little idea of the explosive moves we've seen in some of the areas. i have, like, remorse because i got out of canadian pacific yesterday, and looking at it, it's down, i might want to get back in there again. i don't think it will go through 162 again. i think it can get up to 170. >> even the truck companies, like a cummins, they blew it away. and they raised. and so few industrials that beat and raised. they remain conservative. i think the truck cycle is very strong. you can still own that one. >> and one name that i don't think anyone would have thought you'd see hitting new highs, the stock's performed well. they need ealuminum. >> coal names have seen a pop,
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as well? >> they have. again, largely, coal is tied to what potentially could occur in a recovery from china. you saw today the industrial production figures, factory orders not as strong. so i'm not ready yet to say you want to go to coal and look at it as you did back in the hey y heydays of '08, '09 and 2010 when the performance was there. i'm still staying on the sidelines. >> speaking of materials and china, good times for copper. the industrial metal up more than 2% in a week. y jackie has more. >> good afternoon, melissa. that's right. we're watching copper prices carefully. they're town a little bit today, but close to a two-month high, despite the fact we got a weak industrial production number coming out of china. scott nations, first of all, welcome to the "futures now" family, but what's holding copper up here? >> momentum and warehousing. the chinese have been buying copper over the last couple of months, not in expectation of great prkz now, but because they want to be squared away for the
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summer. they expect the summer and the rest of 2014 to be really good. so they're buying it, warehousing it. you mentioned today it's down a little bit. but momentum is going to keep driving it higher if, if -- the tale will be crude oil. if crude oil can follow along, that means production in china is really picking up and it's not a matter of warehousing to have it later in the year, i think that's the tale. also the fact that we're not doing as much housering here in the united states, entry-level housing, a problem for copper, as well. >> all right, anthony, scott focusing a lot on china in his response. do you agree with him? and at what point can we stop worrying about china? >> jackie, china has implemented a bunch of reforms to boost short-term growth. back to scott's point of why they're warehouse copper. they're expecting production to pick up. not only for them, but domestically, but internationally, also, with the trade. as long as our country starts picking up, the u.s. starts picking up, the economy, it will
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be good for china. we might have to stop worrying about them at this point. and, scott, welcome aboard. >> all right. >> thank you. >> for more on "futures," check out our live show at 1:00 p.m. eastern, because we're going to be talking to bank of america's mcneil curry, he will break down his positioning and his call to short gold. we'll also have deutsche bank's joe la vergna. melissa, back to you. >> thank you. tim cook, sitting oen a cool 180,000. it's a pretty penny to pay for a q&a with cook. we'll find out what the traders would ask him. no money, no problem. maybe some bubble trouble in silicon valley. that and more straight ahead on "halftime." ♪
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welcome back. vf corp. getting an up grade. and lululemon a potential acquisition target. the parent of brands like nautica and the northface a good fit for your portfolio? let's debate it. murph's the bear, steph the bull. steph, go. >> you mentioned quality names. we know them. i think they're positioned very well to grow them. and to continue to see double-digit earnings growth. they're going to grow internationally, grow through scores, dtc, and they're going to expand the outdoor business. the outdoor business is 50% of sales and it carries the highest margin. so double-digit earnings and margin expansion. they have industry high return on equity of about 19%, and 15% cash flow growth. >> yeah, all great points, and you can't debate that the company put up a great quarter. what i want to point out, that is right now would i go out and buy vf corp. today at current price? no. they're trading 15 times next years earnings, and their last
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quarter was so good the weather helped them. i don't think they'll have that the next quarter. you can't argue they're a great company doing a lot of things right, steph. however, my point is, i wouldn't buy it here. if you look at a one-year chart on the stock, up in the level, it's failed three times. i'd be a buyer down there not up here. >> i think the margin expansion story is actually very underappreciated. they bought timberland recently. as they expand the outdoor line, that carries the highest margin out of all of the categories they have. so my earnings forecast, don't show it at 19 times, more like 17 times. growing earnings 14%, 15%, and very strong cash flow. so they can plow that back into the business, buy back stock and as well as -- >> yeah, that's what i would look at. look at a vf corp., if they buy a lulu -- >> i think it drives the stock higher? >> i don't. i think you'd get at least a 10% pullback. but the chart will work that
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out. you can argue it's breaking to the upside, but i would take the other side. it's hitting overhead resistance. on a pullback, i'd look at it. >> pete najarian, weigh in here, 19 times, much makes a good point. it's all-time high today. at 19 times in this sort of retail consumer space, when you're talking about the best executers, is that really expensive? >> i think to murph's point, technically, it sure looks like it's bumping against resistance. on the other side, i go with steph here. anytime i see expansion of the margins, i think this is a stock that actually can go much further to the upside. and then you talk about the cash flows, as well. they're doing everything right. they're executing the way they'd like to. and i think there's actually more upside. i think it breaks through the technical levels and that becomes support. >> you said, steph, you would like the lulu acquisition, but they also named puma and lands' end as potential targets. if either of those were, in fact, what they bought, would that make you less bullish? >> no, more so. i want them to expand their product line. look at you. i want them to expand the
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product line, and expand the higher margin product line. you buy a retailer when the margins are going up, and they are. >> a tough environment for retailers overall. and last quarter was as good as it gets for vf corp. >> we want to know who you think won. tweet us @cnbcfastmoney, and use #bull or #bear. compared to the $1 million spent to have a stake with warren buffett, lunch with tim cook is shaping up to be an auction. speaking of charities, he's usually on the gridiron for the giant, but today, eli manning is working the phones on the trading floor for the charity. that's next on "the half."
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good afternoon, everybody. we hope you'll join us on "power lunch" at the top of the hour. another day of new records. the s&p 500 touching 1,900 for the first time ever. and one of the ten s&p sectors that's been leading the way is utilities. are there opportunities there? plus, the real reason why americans aren't getting into housing. it's worse than you think, and what fannie and freddie are doing now to make it easier to get a mortgage. and the high-frequency trading debate. are the markets rigged? senate lawmakers are holding
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hearings today to discuss that and how to level playing field. we'll have a key player who testified. join us first on cnbc and you'll want to hear what that person has to say. back to melissa and the "halftime" team. what happens on "halftime" stays on "halftime." [ laughter ] >> thanks, tyler. every year, btig holds one of the largest charity events where all of the day's commissions are donated to charity. bob pisani is live with new york giants' quarterback eli manning. bob, take it away. >> and everybody's here. we have over 50 celebrities -- sports celebrities, film celebrities, model superstar here. everybody raising money. everybody donating their time, including new york jets quarterback eli manning, and what charity are you representing? >> do work with the march of dimes, the walk a few weeks ago, and also do a lot of work with robin hood, raising money for the event last night where they raised a lot of money. the two main ones up here in new york.
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>> and you made a couple of trades, honorary trades when you walked in here. that's part of the fun of it. donating money to charity. donating $4 million to $5 million. >> it's great. i've been here, i think, the last five years. you'd think after five years i might have some sort of idea what i'm trading or what i'm doing, but i don't. yeah, you get on the phone, i just try to listen and repeat what they say, and obviously, a lot of great people here raising a lot of money for different charities. >> let's talk about football for a minute. we were talking about the nfl draft thing. it's become a media event of and by itself these days. i don't know how you feel about that. you have four picks for the giants, three of them offensive guys. are you happy about that? >> yeah, very excited about our new draft picks. o'dell beckham in the first round. receiver. and then the second round, got offensive lineman, and the fourth round a running back. from the quarterback standpoint, a receiver, lineman, running back, you feel really good about that. >> let me ask you about managing the p.r. side of your career. you do a lot of charity work. you do a lot of public events.
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you're in the public eye a lot. how do you feel about the importance of that in your career, particularly as you get older? i mean, last year, you didn't have a great year last year, for example. and yet, here you are, you walked into this room, the whole place erupted. do you still have the backing of the public? how do you manage the public persona guy? >> you try to be a good die. -- guy. or the best season of your life, or a season where you don't do as well, you still want to be nice to people and go out there and work hard. and so, you know, i think as a quarterback, as a leader of your team, you have to be a leader in your community and help out and do -- you know, do different things with charity and try to set a good example. >> i think so, too. my colleague, pete, has a question here. pete, take it away. >> sure. eli, i'm just curious, obviously you have to be excited about the draft and what you guys did to help you on the offensive side of the football, and it sounds like tom coughlin was extremely excited going into training camp with the new rookies you're bringing in there. what's his excitement level like? i know he's one of the older coaches in the nfl. what do you do right now?
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do you get involved with your brothers at all and try to get together and work on business deals or do you keep everything separate? do you mingle together, or no? >> you know, yeah, right now, coach coughlin and the whole organization is excited right -- about what's going on. we're in the middle of spring practices right now. we had practice this morning. as an offensive, a quarterback, we have an offensive coordinator, so we're learning a new offense and putting that together. it's bringing urgency to the offseason, learning the new system and getting ready, and as with working with peyton, this time of year, you know, peyton is in denver, i'm in new york, and we're focused on football and making sure our game's right so we can go out and have a successful season on the field. >> eli, we have to let you go. i know you're a reebok endorser for the past ten years and understand you were spotted with under armour. >> well, ten years with reebok, and they've kind of gotten out of the nfl. so still trying to some new
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productions right now and trying to figure out what direction i want to go in. >> always working on the brand name. eli manning, thanks for the inspiration over the years and thank you for coming out and supporting charity on wall street. >> thank you. >> new york giants quarterback eli manning. >> all right, bob, thank you for that. a great charity event every year. top venture capitalists and entrepreneurs and innovators gathering today in san francisco to find out if there's bubble trouble in silicon valley. josh has that story. josh? >> reporter: yeah, melissa, certainly valuations of start-ups are surging. now, that's in part because you've got big-name vcs like the ones at this conference who are committing a lot of capital and driving prices higher. so airbnb and dropbox both at $10 billion. pinterest and uber both at $4 billion. the vcs i'm talking to at this conference, they don't see signs of a bubble. they say, listen, unlike the tech bubble in '99, a lot of the start-ups today, these are real
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businesses, they argue, with real revenues. because start-ups are attracting a lot of capital and headlines, it certainly doesn't mean they're in any rush to go public. aaron levy could be delaying the ipo, given the hammering that some public cloud companies have suffered. square, another start-up that's facing challenges as it looks for new revenue streams. so not a lot of bubble talk here today, melissa. then, again, of course, venture capitalists are in the business of championing their investments. so you wouldn't expect to hear too much talk about when or why another tech bubble could be coming. melissa, back to you. >> all right, josh lipton, thank you for that. i mean, you can't have it both ways, right, guys? you can't see the high valuations in silicon valley, or perceived high valuation, and see a crushing momentum on the street, can you? >> well, i think -- well, you can't. but i think the next time a bubble comes -- and whoever that will be, housing, tech, whenever the bubble comes -- we won't be talking about it weeks leading up into advanced of it. i think that in and of itself dispels the notion of a bubble. if you look at what happened
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recently, momentum stocks that we talked about in a bubble, they corrected themselves. so i think right now the private market, which we're involved in pretty heavily, i don't think that's a bubble at all. there's a lot of money out there that needs to go to work. very smart people are valuing these companies, and there's money going to work in them. so i think it's business as usual out there. >> joe, jump in. >> i think technology had its bubble, and that was 15 years ago. i think where technology is now, it's in a much better place. look at a name like microsoft. yo, there's components of technology that are momentum-driven that don't have the predictable earnings that traded a rich valuation, and this year's not the environment for those names to appreciate. whether it's an apple, an ibm or a facebook, those names have the growth. they're going to continue to move higher, and, no, technology is not a bubble. >> i think that's a good point there. i think that is differentiation between what we're seeing today versus what we saw 15 years ago. 15 years ago, it was a bubble -- it was something that lifted all boats. this year, what we're seeing is we see the big-cap names, right,
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like an ibm or microsoft do well. we're seeing the gogo high flier names like a fireeye, twitter taking it on the chin a little bit. there's a differentiation here. it's not a bubble in that all tech names, right, pete, are being inflated? >> right. we talk about it all the time at noon and at 5:00 talking about the fact it is separated out. there's the haves and have nots right now. you look at the big-cap tech names, they have the areas that are perceived as growth, certainly. but then the solid side of their engine that continues to work to the upside, whereas in some of the names you're talking about names that have absolutely no earnings yet. and that's obviously concerning. >> and if i could just add real quick, you know, what pete's talking about here is what they also have on the technology side in the large caps in particular, a tremendous amount of cash. whether the cash is domiciled here in the u.s. or overseas, there's $400 billion worth of it. it's going to be put to use, whether it's to go out and buy companies or to spend, that's important. and again, not indicative of a bubble. >> all right. coming up neck, pete najarian
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didn't have the heart to step into gilead a few weeks ago and missed a nice rally. how does he feel about that now? that's next. ♪ about speeds and feeds. it's all about latency. it's all about how fast does it run. i often sit with enterprises who ask me about how mission critical and how's the performance of the cloud. and i tell them, if you can maker gamers happy, you can make anybody happy.
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they're rolling up and out. what that means is somebody is taking profits out of may 23 calls and rolling them to the june 24 calls. in a nutshell what that means is they're taking their money off the table, but putting more money back to work. they think dr horton will get at least through 24 very soon. >> stef, if you like whirl book and stanley black & decker, must you like home builders? >> not necessarily, but i think toll brothers is interesting, because it does have the high end, which is less economic sensitive, if you will. but i also like that they're expanding their products, right? into citi, into adult community. they have industry-high margins, and stock in the low 30s. it's had nice support here. >> joe, you like the builders or material plays, or make a home depot? >> masco? >> i think i like the second derivative types of trades. i know jeffrey gunlock suggested shorting it.
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>> which makes no sense. >> i disagree with that call. pete, you probably know the impact of the buying you're seeing doesn't have much of that overall, but i disagree, i like the secondary play. >> it's a combination of both. when you really look at it -- >> that's why i said it makes no sense. it has everybody to do with the vehicle with which he makes the trade. >> but dr horton, i'm long -- but their quarter couldn't have been much better, so the stock had a bit of a pullback, and was a great entry point. now i think it goes higher. >> not so fast, pete najarian. pete made a bearish call on gilead. let's listen. >> it was off 20%, now a bit of a bound of 4%, or 5% today. i think that's exactly what we're getting, one of these bounces, where people are trying to get the bottom. i don't know that we're there yet. i think if you look at it,
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you've got to wait a little while longer. >> since the call, the stock is up more than 20%, it seems like we've seen a bottom in in the i about. b. >> i was trying to be patient, because i didn't want to try to catch in falling knife. josh brown had a couple great trades, getting short. i'm not sure where he covered it at which point, but i didn't -- i wasn't short the name. i just never got the opportunity to get in and i don't want to chase it up here. >> it's like being sort of wrong. i'm not trying to rescue you. >> i missed the trade. it's been a great run out of the stock. absolutely. >> but the ibb, this was another area that got crushed, but very different from the likes, joe, of a fire eye or go go. and now look at this, 230-plus. >> okay. maybe it did, maybe it didn't. again in 2014 environment it's confusing enough. it's not the place where i want it to be. i'm sure that josh covered it
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perfectly at the bottom on his short. >> wait, wait. is that sarcastic? >> no, no, no. wait a second. that came out wrong. i'm sure he did. i'm sure josh did cover it perfectly, but again biotech, these real high momentum spec type of names are where i want to be. i do think josh covered it perfectly. all right, coming up next final trades and winner of our -- and (mother vo) when i was pregnant...
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hour or so. if you have the opportunity to break bread with tim cook, what would you ask him? stephanie link. >> what's the next best thing? what's the best technology that he thinks will be revolutionary? >> pete? >> i would want to know how he's going to capitalize on the streaming, why they haven't jumped in. >> why they missed the boat? >> a subscription model of some sort. >> joe? >> i would ask him in steve jobs' final days, what did he share? what did he believe the company should be? >> i would at upon that, i want to know if she shares jobs' disdain for google. he made it clear he wanted to go after gugle. if you can't ever get to this, the true feelings on carl icahn. >> those are two questions. >> yes. >> for $180,000. >> i guess you would deserve a couple questions. >> murph's got the money. he could pay double. >> i think the bottom line here is we want to know what his's
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going to do with the cash, what is the vision for the company? that's the driver here. what's the next catalyst for the stock here. we should note that a coffee day with cook went for more than $600,000 last year. so this is a discount, guys. we've tallied the results. for the street fight on bf corp, you said murphy, the bear, won the debate. he's taking home the trophy today. time for the final trade. pete in a yar jan? >> i'm sticking with energy. we had seen some activity in valero. i think it's going to break to the up side. >> i like armstrong world. i like the non-res and res recovery in the u.s. this is an energy and industrial play on the whole economy, long american rail, arii, and on this 20% pullback, i think it's a great name to own. >> joe? >> i'm long lilly, long the salt conference, off to be part of a panel with gary, anthony, scott is going to moderate.
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excited for you to come out and join us. it's a great conference. >> we are hitting the road, joe, we'll see you live. we're headed to vegas for the salt investing conference. the best ideas from wall street's smartest investors, tune in starting at noon and 5:00 tomorrow. that does it for us, see you on fast tonight. "power lunch" begins right now. . halftime is over. "power lunch" and the second half of the trading day start right now. >> melissa, thank you very much. the s&p 500 fresh territory, 1900 for the first time, earlier today. the dow also setting new highs. how much higher if at all can we go from here is a big pullback ahead? the key levels you need to watch now. epic rally in utilities, one of the ten sectors leading the charge are those stocks up 10% so far this year despite the recent sell-off. what is fueling utilities? t


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