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tv   Fast Money Halftime Report  CNBC  August 11, 2015 12:00pm-1:01pm EDT

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the gate, down 9%. as demand for commodities, steel, oil, barely above 53. >> oil at a five-month low. of course, we get alibaba tomorrow morning. >> let's get to scott wapner on "the half." all right, guys, thanks, welcome to "the halftime show" stocks at this hour under significant pressure. is it a sign that the economy there is worse than investors thought. with exposure to china, apple included getting hit and hit hard today. we're going to discuss all of it what it means to your money with your panel of experts. steph, joe and pete on it with us on the desk. and also joined by the group terry duffy. independent macro strategist
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paul richards is with us as well. joe, investors seem to be taking ace as exactly as i said in the intro here, that china is much worse than people thought. >> i'm surprised by it. i was talking with paul before the show started. you think back three years ago, if you mentioned the word reflation, you brought every asset around. that's exactly what the chinese are doing right now. they're going out there regre replating. it's a game of hot potato. passing it around. the chinese are getting aggressive and trying to exploit their deflation over the mainland. >> the problem, paul, from investors that i speak with, they looking for more than just this move. that this doesn't go nearly far enough. it needs to be accompanied by some sort of fiscal stimulus. the pboc needs to cut interest rates. we need to cut the reserve requirement as well.
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and do it as some sort of a package thing to relieve any concerns that the market was out. the chinese market did nothing overnight. and we're selling off and selling off hard, directly related to china. >> i think you're never going to get a big bang, scott. we were sitting here friday, nobody was thinking about china saying they needed to do something. they just move third currency the most in 20 years. if that's not symbolic, i don't know what it is. fiscals, what are they going to do, they'll keep moving until they arrest the fact that the economy is in trouble. what they told you last night, they're going to get it. >> terry duffy, great to have you. ceo of exec tough group. commodities are a great part of the your wheelhouse on a daily basis. ba do you think of the carnage we've seen oil is ripped tommy. copper is getting destroyed. >> well on the oil market, scott, i've been saying a long
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time sitting on $82 a barrel. and the people that had the most were the saudis and the most to lose were the saudis and other part of the cartel in the middle east. and they were going to take that pricing down. that's exactly what they've done. i've said that before and i continue that think that's going to happen. you see what they're doing today. they're putting even more on the market. so the price is probably going to decline some. they're looking at lifting the ban on the u.s. export of oil. i testified on this in congress just two weeks ago. an i think there's bipartisan support to do that. it doesn't mean you give all of your oil away. there say gentleman by the name of mr. hamm that believes you could add one percent to the gdp in the u.s. just by lifting a 40-year ban on exported oil. that's a staggering effect. these products are going to continue in my opinion to withstand the pressure. >> pete, what the markets giv h
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giveth, the markets taketh away. industrials, materials, all across the board. >> if you look, if you talk about the legs of the rally on the upside have been the financials and the health care names. those continue to move up, scott. still above their 50-day averages. they're holding up. you're exactly right oias yes, they're higher. i don't know that yesterday was the right reason for those to go up the way they did. felt like there was some relief. let's buy some of these absolutely brought out to the woodshed stocks. >> steph, the big yield, 214 or thereabouts, this move by the chinese sends the fed farther
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off. the fed cannot raise interests rates now. >> that's the question how strong does the dollar get? that's a thing from a u.s. investor like myself and my firm. i think we're just trying to figure out how strong does it get and what are the implications for earnings. if you look at the s&p 500, two-thirds of their earnings come from domestic, right? you're either going to focus on domestic-only demand stories. or you can play the reflation trade and buy europe and the economy. for me, today, i'm buy something consumer stocks, $43 oil, that's a big boon for consumers in general. i think you want to own them. i think you want to own housing. domestic stories, nonresidential constructions. i think there's stuff you can buy just got to be more selective. >> from a guy maybe looking at to rate hikes this year, i wonder if this move forces to
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you rethink that? >> well, we're still going to get september or october, i'm sure. what they're doing, they're just doing what we did five years ago. remember, we had a weaker dollar. for the dollar to strengthen that, that's fine. i think we get september, october, we see how thing, in december. we could still go again. >> you don't think this is a game-changer? >> no. the feds communicate very well. they're sticking to plan. we could well see that. >> obviously the chinese and europeans are significant trading partners. what's the impact on the euro? >> i think what we'll probably see, if the euro is the at 1.11, 1.12, when drachma gets back, he'll use that to get down.
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but i think the euro starts to stabilize but you'll get a stronger second half dollar. you need to be longer on a european basis european stocks in the second half. >> terry is the fed going to make a policy error if it moves in september? >> i'm not sure. i thought the fed should have moved over the last done years when we had an opportunity to do that. you can never get to the most optimal time. you get to eight years without doing anything. you get unemployment do you, you get other macro down to where they want to get it down to, and they're still not doing anything, my concern, i think this thing has got politicized. i think it's gotten politicized because too many people have gotten in the market. 25 basis rate move means absolutely nothing for the consumer for the most part. what's going to be impressive is the price of oil, how much money they can save at the gas pump on a weekly basis. that's more important than the
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25 basis points move. i think they'll wait until next year. >> it's funny, you've heard people say as well, if you didn't know anything at all about what was going on and you were just dropped on earth and you looked at the economic situation not only here, but globally, you would say we should cut rates. why would we hike rates now? the global economy clearly is sending a signal, isn't it, paul? >> no, it's not. look, it's a very good point about being dropped on earth. you say what's going on -- what's going on is volatility. we have limited markets fuelled by stimulus. several years ago, tapering now be looking at hiking rates. this caused volatility in the markets. it's going to continue to do it. what i like, the u.s. is about to enter one cycle because it can afford to and it's getting fueled by the rest of the world printing money. it's going to mean a lot of volatility from investors. >> scott, we don't need policy
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right now, 2 1/2, 3% gdp. we've got jobs improving every month sequentially, we want wages to improve but there are pockets that are quite strong. i just don't think you need zero. >> i just want to know what happens to an already nervous market, had been down seven straight days before yesterday. whether this news out of china acts as a tipping point to push you into the correction that so many people had thought would be finally here. >> i don't know if that's necessarily your first choice or first decision. i think the first is to understand what the world is dealing with massive deflation. you look at the united states, we're handling and digesting the deflation the best. and in the environment who retains pricing power. and some of the names in sectors that stephanie and pete have mentioned, that's the evidence as their ability in the consumers means, housing means to retain pricing power. that's where you want to focus. >> i'm looking at this list
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right now on the wall. all of you who can see it and wherever you're watching on the desk, apple's not on the list. why is apple down? apple is down because the price of a phone in china has gone up. the still untapped market is a problem. >> i think the other thing that's interesting to me, if you listen to morgan stanley who has been dead on at apple forever. she's talking about this an opportunity, scott, as it was a week ago, stock sold off the same as today, everybody is focused on china, we've only rethrust a third of what's here in the u.s. and the u.s. is still a huge chunk of what apple is doing. >> people are making big bets on apple in part bother of the growth opportunity that exists in china. if you suddenly put a noose
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around apple's neck in china because of the currency move, among other issues, that stock would have a serious issue. >> but all that does is that creates a temporary environment of perception. and that's what's going on with apple right now. the perception that the possibility exists. just like if you look at today and look at the actions from the chinese. and look at gold. we were all told deflation. and exactly what's going on in the world with currencies is the perfect environment to own gold. the reality is, obviously, it's not, given the performance of gold today. >> do you want to touch gold, terry. do you have a thought on it? >> i have had a thought for years. i never thought that gold got to the levels that it should have go back to '81 or '82. gold should be $5,000. it's not. it's $1,000. >> we have so much more ahead. terry is going to be here.
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paul richards coming up -- the selloff has made big names like kors and retail and is it time to go bottom fishing? and twitter, shares are higher, is it a long-teller buy or buyer beware? you're watching cnbc, first in business worldwide. we want to hear your crowd noise, tweet us@halftimereport. more halftime after this. halftime is sponsored by fidelity investments. 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. call our specialists today to get up and running.
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all right. it's time now for our "trader blitz." three trades on three stocks. shake shack, beating estimates sales up nearly 13%. pete, okay, the stock is up. undeniably great quarter. >> yeah. >> a gentlemen came on "squawk box" and said the selloff is -- >> yes, the comps get interesting when you get outside of new york where it's been so popular. is that going to comp out as it expands and gets to other cities, i don't know, you can't jump on it. not enough on there to even have options right now. for me, it's a no touch.
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>> one simple misstep sends the stock 20% lower. >> we've seen that. from the ipo all the way down to 46, up to 48, here we are at 71. scott, you better put your seat belt on if you want to be in the shack. >> gap disappointing sales in july. weak guidance, joe. >> yeah, overall, the stock is washed out so far this year. i think the price reaction today is pretty good. given overall, the news i don't think is good. but yet the stock has rallied a little bit. i still wouldn't step in and buy it just yet. wait until you hear the conversation for the rest of retailers. >> steph, gm shares, weak china demand. bmw at least a week ago talked about weak china demand. should we be surprised? >> no, not necessarily all of the auto parts flagged that china was slowing.
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july did slow down 7% on top of june's down 3%. so you're getting kind of worse as you go along. i think you don't really want to be involved in the oems at this point. if you want to be in the space, i still think the auto parts give you geographic exposure, product diversification, and they're focused on kind of the smart car going forward. you're getting some of these des like adele fi or a maga pretty much on. >> and like so many, alibaba set to report earnings. that stock is going to report tomorrow, ahead of the play. what do berkshire hathaway and google have in common? one analyst says a lot. a lot more than you think. he joins us -- next. halfway report is sponsored
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my technology can help you choose the right portfolio. monitor it. and automatically rebalance it. all without charging advisory fees, account service fees or commissions. that may be hard to compute. but i'm a computer. so trust me. it computes. say hello at we are back and following its big restructuring announcement, our next guest says google is now the berkshire hearthway of the internet and could rally big time. scott devet is an analyst joins
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us on the phone for call of the day. scott, thanks for jumping out of a meeting to come on. help us to understand something here. in january of this year, you downgraded the stock and you said that growth was coming from structurally lower margin businesses that the best days for shares may behind it. i sort of wondered all day if they were getting too giddy about what amounts to to a corporate reorganization. >> thanks, for having me back on the show. what we have here, they've been waiting a long time for increased transparency from this company. given that point of view, back at that point in time which was well prior to the new cfo coming in, a more disciplined approach in reporting results in higher results based on last quarter. and then where you're breaking
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apart the business. and giving investors the opportunity to buy the business. and similar to berkshire hathaway, i think that disciplined approach and two brilliant minds at the top of the enterprise as well are some of the similarities. there's certainly differences between the two companies but those are some of the similarities between the two. >> you've upgraded the stock today. you've got an $850 price target but are we to believe that greater transparency equals greater earnings power? >> greater transparency is something that the investment community likes and they like precision and clarity, so that they can assign values to a pysyk part of a business. and so, by doing this, you can get more of a summit approach to a business. it has nothing to do with earnings power, i would argue you're starting to see
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indications of potentially better earnings power because of a more disciplined approach to running the business. but this is more about presentation and assigning multiples. i would argue that these nonoperating businesses are the best actually detrack from value when google is looked at that those businesses are going to be showing losses. when you apply multiple to aggregate business it detracts but when you add it, it added to the value. >> hey, scott, it's joe. do you suspect that maybe part of this has to do with a larger acquisition that could be coming down the line and maybe gives it a little more degree of clarity on that integration of whatever the acquisition target would be? >> this would certainly give more flexibility around m & a,
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particularly in terms of the positioning of an acquired asset and which side of the business is goes into. and particularly if an acquisition were to be diluted from that regard. i think it does give more flexibility. >> scott, like i said, thanks for jumping on the phone with us to give your insight to google. scott devitt. what's your take, terry, on this story? >> i'm trying to understand it, to be honest with you. on a scheduled call on friday, i was talking with folks today, just trying to understand the split between the company, "c" shares and "a" shares. and the only question i can guess, what your guest raised here with the question, going outside of the box to not be putting another search engine company with google. they're had looking to expand their businesses and diversify their revenues and they're going
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to do it through a separate entity. that's all i can think of. so i think that's where they're going with it. >> i wonder what if anything around the m & a idea, whether it does anything around speculated around twitter? >> that's been it for a while. i actually think one of the things against google has been that their margins have been so depressed because they've been spending so much on all of these various different technology initiatives. and a lot of analysts and investors they couldn't kind of come to grasp with how they're going to monetize that. to me, they put this entity to the side so they can continue to invest. and they leave the google people where people can appreciate the growth. the margins can recover and you'll see operating leverage very much like at amazon when they actually broke out aws. so i think that's what's going on behind the scenes. and i think it's quite positive. >> do you buy the stock here,
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pete? >> i think you can, yeah. because mark mahaney was talking about this earlier as well, to your point, steph, now you really do -- you've got the core business and now you've got this other business, this alphabet. and now the stock i think goes higher. >> so you have this other separate business that's focused on long-term investments. >> moon shots. >> ridiculous amount of cash. right it's all organic growth. they've had all organic growth over the years. >> no, it's not going to be. that's where you get the m & a. >> i think that's what they're telegraphs to the market. a lot of m & a is going to be coming. coming up as the market continues to decline, lots of stocks look like they're on sale but are they value traps? stick around for the stocks that
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are smart buys. and one analyst still sees opportunities in the energy names. he's the top-ranked analyst in the space. he's going to telling us why coming up.
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herera. here's your cnbc news update. former secretary of state hillary clinton giving a sworn statement about her controversial e-mails. she said she turned ove s 55,000 e-mails in her possession, reflecting official government business. the signed statement which carries a penalty of perjury was submitted to the federal court this morning. airline consumer complaints rose 20% in the first half of the year, according to the transportation department. in addition, in june, airlines reports two tarmac delays of more than three hours on domestic flights which are now under investigation. streets in east london were evacuated after an unemployed world war ii era bomb was found at a building site. bomb disposal experts successfully removed the bomb which was believed to be dropped over london in the early 1940s. and columbia house which starts offering 11 music albums for a penny is closing its
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doors. it said the advent of digital music made its business model obsolete. it's hoping to sell its club at a bankruptcy auction. as stocks fall, many of the momentum names that have driven the market higher are starting to look cheap are the stocks good values now? let's bring in jim decamp. good to see you. >> good to see you, scott. >> the market in the context of a seven-day rout, a big jump, and the china news which has taken everybody by surprise. >> well, look, i think the market still looks impact, this is the time of year that gets activity anyway, late july you usually see speed bumps in the
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road. a major market top is usually a reflection of a new recession or an overactive fed. we're not going to have an overactive fed here especially in light of the chinese news. i think we're going to have volatility now, early october. and the ones you're talking about, the above average earnings growth, those are the names you want to come back to and the rally to the end of the year. >> so you're not going to have value all of a sudden come back in vogue? >> i don't think so. let's look at what's happened this year. small cap, midcap and large cap, those are being led by growth name, not value names. look, if you hadn't had had a stock that's moved up in the last six years because under valued, what's it going to move? these value names should have been moving by now. a lot of people are pointing to energy space as possible value,
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too, but that's really a call on oil prices with the chinese move today, commodities are under pressure and the dollar is probably going to remain relatively strong. will there be value in the oil space? absolutely. are we ready for that now? i don't think that. i think you're seeing relative value in the peak heated growth rates. and in most cases you don't have ridiculous valuations. you have a pretty good value relative to its growth rate. >> what if china has a hard landing? >> well, that's certainly an issue. but what we've seen in the last several years is that the chinese market is not a harbinger of either their economy or the rest of the stock markets around the world. but the chinese economy is. and so, if the chinese economy continues to deteriorate, then we're looking at a deflationary global environment. >> why should we -- jim, why should we believe that the
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chinese economy isn't going to continue to deteriorate and then why do we seem to be ignoring the obvious risks that u.s. investors would face here? >> because our own economy has been relatively impervious to the slowdown in china. our own economy is still growing. if you look at service sector that showed pretty good strength across all parts of the u.s. economy. i'm saying we're still growing probably more than 2% for the rest of the year. probably north of 2.5%. while china is moving rapidly, still growth there. i think maybe we're overreacting a little bit to this and maybe their government's overracketing a little bit. i think we have issues there. i think we have issues there. i'm not saying the market goes up another 10%.
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if i look at where it is now and where it will be by the end of the year, i think monies will flow into markets, particularly the u.s. market, because europe is still very untrustworthy, china and the rest of asia becomes untrustworthy by proxy. so what looks better by comparis comparison? probably u.s. assets and i think that translates into higher prices for our market. >> jim, we'll leave it there. jim la camp joining us from ubs. this idea, guys from stocks that appear to be cheap, intel, xerox, monsanto, on and on. >> i agree with jim. we talked about the focus, earnings, back to macro. you see what reacted best. it was health care, financials.
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you've got growth, you've got valuation. i agree with him there. in terms of stocks that have gotten slammed. is michael kors, i look at what they've done, the numbers they've put out the growth they've got and lack of exposure. they're going to get exposure, obviously a big deal in the asian markets. they still did well in japan. they still did well in europe and they're doing just fine in north america as well. that's one of those names that i see the potential. >> terry is a trader at heart. do you have a idea what jumps out at you? >> what jumps out is american express. it's down from the other ones. more to pete's point with michael kors, go ahead and buy it. i look at american express, i think their business model could be flood. visa, mastercard, the cost of using american express, every
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penny counts right now and i think more businesses are shying away from them. i'm a little concerned for american express. >> bad news for you in your portfolio. >> you're looking for me to make a trade, aren't you? >> no, i'm not. i'm just saying. joe. >> it's interesting the way you look at this, i was talking to stephanie before the show about this. someone like stephanie is looking at the market saying i've got to buy something here. coming from the background of the futures market you're always afraid of what can happen. i saw sugar go to one tick. i saw natural gas go from 5 to 25. when i look at names, monsanto comes to mind, down 13%. >> why would you put yourself in the down the least? why wouldn't you look at what's the best company that's down that's the best opportunity? >> because i look at a company down 30%. it could be fundamentally a great company, but there's something about it that it's
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down 30%. the market's smarter than i am, i'm not going to take that risk that it goes down 40%, 50%, because, again, i was trained in an environment to always focus on how much you could lose, not how much you can make first. and you can see things go from 20 to 5 in a matter of weeks to months. >> i think you really want to be stock specific. i don't think you want to look at this list and say, okay, they're all really cheap and we want to buy them. i think you have to look at some of these names that have change. like a mattel, for example. new management, new products. putting more money into their core business. getting better shelf space. working with partnerships like hollywood and silicon valley. trying to change the culture that, for some reason, wleent ay that might be worth a look right now, in the meantime, you get a good yield. i don't think you want to paint this whole list with the broad brush. >> we mentioned the board, traders trading.
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take a look, stephanie is in the lead. someone is leading our competition. stephanie up 10%, josh brown, paul najarian and pete you are up. >> the least trades at some point. i think joe and jim are the most trades so far. it just shows you a different approach. sooner or later, we're going to start to see this whole thing sort out. but we're only about halfway through the year, so we're find out soon. >> joe is actually making some trades here. what are you doing, joe? >> just -- >> maybe some are going to rub off on pete. >> basically neck and neck. he's done 100 and i've done 1. >> i'm going to sic duffy on you. >> i think i've done somewhere in the mid-20s as far as trades but that doesn't matter. we have 52 that we can do during the course of the year, poncho energy selling at 101, selling
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at 109. there's more at times, ruckus, what's the point of holding on to it, doesn't look like it wants to go up anymore. i don't where it's gone from here when in doubt get out. coming up a look ahead to alibaba, the guests taking their positions on that company and the stock, ahead of earnings tomorrow. >> announcer: the "halftime report" with scott wapner with market interviews. >> it's great for the markets. >> it's difficult for the fed to raise rates without phenomenal gdp. >> real money. >> a big market gap. >> real debates. >> could be quite good in 2016. yellen will raise rates. >> the most profitable hour of the trading day. >> don't leave, done get shaken
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dangerous threat to the market. we'll talk to a former hacker who makes his living rooting out hackers. that's ahead on "power lunch." not every day we get that to start our trading day. shares of alibaba dropping.the chinese ecommerce company set to announce acquisitions. >> scott, the thing fell apart, unfortunately the government was coming after them and they had had so many different things going on. you look at the option market. stock was trading around $80 a share. now $77. they're expecting a pretty. monstrous deal. yesterday they got more bullish. today, a little more neutral. >> did you ever own it? >> i did own it, for a very long time. i owned from virtually here, all the way back up to 120. did not sell it and exited to
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the place where i was. >> terry, you have a strong opinion on this thing. >> i don't know strong opinion. when i was first on your show, we were talk about the opi coming out. i don't want to chase anything that's hyped up. i think you have to take it and look at it and evaluate it and it was the right thing to do. as pete said, it had the big one-up and it's been significantly up since. if you look at the executive chairman of alibaba, his vision is not five or ten years down the road. it's multiple years down road. this is long term play because that's leadership of the company. >> that's not a strong opinion? >> small opinion. >> joe, wrap it up. >> i think there's this company domestically here you could buy, called amazon. does the same thing with less risk. >> coming up, the euro market
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reviewing its slide. we're going to talk to terry next. plus the top rated oil analyst with his top plays. right now crude down 4% now.
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oil is trading at its lowest level since march. the slide continuing despite the selloff, though, one of the top analysts on the street still sees some opportunity with us today is paul sankey, the
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managing director and analyst. welcome back. >> thanks. >> is there really opportunities out there? the dynamics look so poor. >> so look so poor. besides the china news, we had a major refinery go down in the chicago area, a bp refinery. if one refinery could have this impact on crude, it's hard to think what could happen in october or november when we lose another million, million and a half barrels of crude. it does look terrible. we do actually like refinery. having said that. the oil low prices and strong demand making refining very much the sector we like. as you say, selective picks and exploration, very selective, we have many sells as buys. >> which is the names or oil names you like most?
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>> very much in line with the themes you've been talking about we're all about quality. like the bad house in a good neighborhood. that's eog. one of the best in the world. it's super quality. veryunconventional oil and very much levered to you the upside when eventually it comes back. we call it the apple of oil. it's got that position in the market in our view. >> paul, it's joe. any time oil declines as significantly as it is right now down to $43, the conversation goes into the credit markets and the opportunities for energy credit names. the other side of that, the insurance that those who are buying the energy credit are taking is they're selling energy equity names. >> right. >> do you believe that is valid? do you think that's occurring right now. >> yes. >> can you give some examples of names where you believe that potentially there's artificially a sell-off that's correlated to the hedging against credit and really that makes evaluation of the energy equity names below what it should be?
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>> yes, i heard a trader say the equity was zero and the credit has become the equity, alongside your theme. we're looking for names that could survive what could be a low price oil environment for the next year. we're waiting for the opec cut, that's what we need. there's so much oil out there, so we won't touch anything this week, anything we think could well go to zero, we're not interested in. i always think that we can still see significant downside pressure on the sector and as i said, we're hiding amongst high quality names like the eogs and an dar cos. even chevron is an underweight weighting. so don't underestimate the scale of the blood bath. the only way we see this is playing through this we love the refiners. >> paul thanks for joining us today, sobering view of what's taking place in energy and oil specifically, terry, the world
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we live in today. >> it really is. you talk about the refining business the last time we built a new refinery in the united states was 1975, so we have all those old refineries around the world basically refining for non-u.s. crude products so they have to restool all the refineries if we ever refine our own product in the united states and once they do that, we'll put more oil on the market which will put pressure on prices and the supply of oil. >> terry, you have the opx, oil volatility index for people that don't know. now that we're back up to the april levels we ratchet it up much faster. are you seeing more volumes come in to something like that? >> year-to-date or year over year, pete, when you look at four maimer asset classes, interest rates and equities, interest rates at zero, equities at highs, nobody is trading either one. foreign exchange and energy are the other two asset classes, up 25% to 35% because the massive
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moves we saw in the dollar and massive moves on the oil. we'll continue to see that the volatility is in both asset classes and continues to be there. >> any opportunities in this space right now? >> i agree with paul on eog and it's such a quality company. the only problem is it doesn't have a really big dividend. that would be my question to paul because i feel you can hide some of the names for the time being when the yield gets to 4.5, 5%, 6%, if the balance sheets are strong. debris on chevron the balance sheet is not strong. >> you like royal dutch sheller. >> i like it here. it's a controversial name because they made a big acquisition. it will take a long time to see the payback. >> a name you like? >> i like the european exposure, the balance sheet, i like the management a lot, too. it's pulled back. that's kind of the example i would give in terms of the 6% dividend yield so you can pay while you wait. >> it is pulling back year-to-date. come ing up, the second hal
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right now, get $300 credit for every line you switch to at&t when you buy any iphone for $0 down with an eligible smartphone trade- in. welcome back. i want to show you what the markets are doing at this hour. it remains not a very pretty picture. you have the seven-day route for stocks followed by a bounce back yesterday but the selling resumed today in a big way. many of the areas of the market up yesterday, whether it's industrials or materials or energy are getting absolutely hammered today on concerns that the chinese economy is slowing perhaps more dramatically than some investors had been anticipating by virtue of the devaluing of the yuan. so you have seen the s&p 500, basically at the lows of the session. terry, give us some knowledge here. you've seen a lot of markets. you've been a trader. now you run an exchange group.
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what should we be thinking about on these days and weeks ahead? >> they're scary, when you look at them, because of the levels we're coming off of. it's no different if you took interest rates instead of going up 20 basis points you went up 300 basis points, scaring a lot of people. you have an equity market at the lofty levels and the massive sell-offs, it scares folks to the point of do they get out because a lot of people were in fixed income, got no yield, chased uities, now they think do i need to get out of those, are we going back to fixed income. it's a dicey market here. volatility is on the doorstep of all the asset classes and we're going to continue to see some. it will be tough to trade here, the water will be dicey. >> pete, the vix is up significantly today. still sitting at 14. >> under 14. >> golden opportunity for people here or no? >> the fact it's under the averages it is. you'll always want to get this, if it's anywhere between 12 and 14 it's a great opportunity. we talked about it closer to 12, even here, i agree and this grind, i don't think we need to
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panic, when we look at the market. we are still in the exact same range we've been in. >> even one of the biggest bulls around, jeremy siegel saying dow 20,000 by year's end is still a real possibility, though the next five to six weeks could get rocky. >> i think one of the most insightful comments on the network i heard in a long time, david costin, flat is the new up. how true that is, flat is the new up in this environment. i'll repeat what i talked about yesterday over the next couple of weeks, blackout window is over. companies are buying back stocks, hopefully that will be the catalyst for some appreciation but he's right, flat is the new up. >> i think he'd take flats over massive pullback obviously. steph, you know, looking at your portfolio at kraft, what kinds of things are you thinking about? >> the beginning of the show i mentioned if you're long-term you want to take advantage of some of these declines. i don't know when the bottom is going to be but i know fundamentals and you have to look at stock specifics where
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you want to be and i still think you want to find the areas that will benefit from all these lower input costs coming down, that's consumer, some industrials and i'm tempted to buy some energy stocks given that they've come down so much. >> terry, you want to do this again sometime? >> absolutely, any time. >> terry duffy, executive chairman at cme. power lunch" picks the market sell-off story right now. >> announcer: lace 'em up. halftime is over. the second half of the trading day starts now. >> scott, terry, gang, thank you very much. remember yesterday's big rally? forget about it, it's gone, all of the gains basically out of here. take a look at where the market stands right now. how now the dow? yesterday the dow jumped over the moon. not today. down 1.3% off about 232 points right now. 17,373 is your coat, nasdaq composite off as you see there by about


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