tv Fast Money Halftime Report CNBC July 25, 2016 12:00pm-1:01pm EDT
not kidding around. and dow down 103. volume's light because to move today is to step in front boj and amazon. >> and the fed. >> google and the fed. even if you think it's a dead meeting or not, a lot to come over the next five sessions. let's get back to headquarters, check in with wapner and get "the half." carl, thanks. welcome to the "halftime report." i'm scott wapner. top trade this hour, bracing for a biowreck? though the secretator had a sha turnaround since june, is the worst over? with the democratic national convention kicking off today in philadelphia. look at a key part. there's a live shot of philadelphia, but we want to show you part of the party platform. and i quote, "the profiteering of pharmaceuticals is simply unacceptable." could have a major impact where the stocks trade from here. with us today for the hour, joe
terranova, jim lebenthal, josh brown and pete najarian. how worried should people be this week for a sector that's made a nice comeback? >> not worried at all. the sector is rallying into this dnc and a big difference between word and deed. very easy to put things in a platform, harder to actually enact them. and history suggests that these things typically don't play out based on the worst case scenario. most important thing here, scott, technically speaking, look at xpi, equal weight biotech index. a much better measure of the broad sector than the ibb. that is on the verge of a breakout. $60 resistance and a pattern of higher lows. exactly what you want to see. sellers are less aggressive. buyers more aggressive, and once this thing gets going, typically set up for a nice run for a little time. i would not be worried about headlines this week. they're just headlines. they're not actual policies. >> pete, word alone, though, to sort of refute what josh is saying, has already crushed the
space? >> doesn't refute what i'm saying. that's making my point. >> no, no. it's not. >> we had the reaction prior. >> talking about -- >> now rallying into the news. >> you don't think if the platform gets loud this week yet again. >> no. they killed these stocks already. the market -- how the market works. it doesn't react. the market pictures what could happen and spends time adjusting itself. when you get to the actual veept, it's a naan event. how markets work. they don't necessarily need to have a linear relationship with the news of the day. we've crushed stocks two years based on what will happen in the next two days. when it doesn't happen, a lesser version happens, you get a green light. not a red light. the red light already happened. >> to josh's point, you'll get the lesser. he means by that, look how bad they were knocked down, scott. a little rise ever since and a lot of the smartest guys on the street covering the space covered it very well talking about in cases michael ye one of
these, some cases these companies are beaten down to the point, their briced as if there is no pipeline left in their names. because of that, i think there has been opportunity there in some of these names in biotech as well as the big pharma, but the threat was out there and now that the threat's been out there, to josh's point, i don't disagree. these names were absolutely bashed to the down side. >> so a clinton administration, josh is going to be all hunky-dory for the drug companies? >> the way that markets work is, they envision -- >> listen to me. you don't need to school me on how it works. >> not schooling you. making point, there's a shooting incident somewhere. there's a huge hubbub, ban guns. what happens? gun sales explode, and the stocks go wild. markets have already priced these biotechs for really, really terrible news flow, and now you see people coming into these names as the event is about to happen, because they know the adjustment has already been taken place for years.
>> okay. since the end of june, or there abouts, i'm talking about the sector comeback. the ibb up 12%. xlv up -- xbi up 13% and biogen up 25 and many other names followed suit. are they about to get smacked down to earth or to josh's point, the damage is already done? >> the damage is already done. josh is right. to answer the question you asked a second ago. >> buyers, stocks then? all three of you? >> absolutely. to answer the question you just asked a second ago is everything hunky-dory in a clinton administration? this is rhetoric. you can tell it when there's points in there, things like these companies are spending too much money on advertising versus r & d. the lft thing the government needs whether democratic or republican for the federal government to dictate how much a company or industry should spend on advertising or r & d. the sort of thing would never get through congress. would never be accepted by the american people. >> in a republican congress. okay. joe? >> glad we understand how the markets work, first of all.
second of all, important to understand is the change in the style of the sector itself. this was a sector in 2015 where if you were a portfolio manager you chased it as growth. it's almost become value. the biggest value name to me in the space reports tonight after the close. that being gilead, josh is 100% correct. a series of higher lows going back to the middle of next year. >> how markets work. >> markets work -- how they want to work. confusing to most people. so gilead could be a very significant contributor. >> how do markets work? >> moving. >> platforms don't move stocks. >> the other part of that. >> the importance of gilead i don't think can be underestimated going into tonight's report. trading $87. price target on the stock, pete, you follow it, well above 115, 120. gilead comes out, and helpsy numbers look good.
entire sector off to the races. if gilead does not do that tonight, then the sector, modestly rebound since june may go a little sideways. >> or be careful are and not give a knock-out quarter because they see the government is on top of it and know hillary clinton is -- >> one quick one. >> do this first. bring in two more voices and continue the conversation with les frontlighter, east squared asset management right here on the set with us as well. it's good to have you here. thanks for coming in. >> thank you. >> you take issue with anything you heard or agree with everything? >> i've learned how markets work. >> my job is done. >> the -- >> the answer is i agree that we are -- historically, biotech's been bad or down and by democratic administrations only to run a lot afterwards. saw it clinton first, obama. going to be a very good time. i would just say one caution. there's a connection between interest rates. so we don't think interest rates
will ever go up. should they go up, bio tech is very sensitive. >> you don't think that that language, the profiteering of pharmaceutical companies is simply unacceptable as part of the party platform that will be on display this week in philadelphia, has the chance of taking the gains that have been enjoyed since the end of june out of the picture? >> i think that most people, other than some very, you know, non-news-aware people, realize that a democratic administration will be status quo, and they're going to look through it. i don't see -- i just don't see that scaring people as much as real policy -- real policy choices that will actually do what they say they want to do, and that's been absent. if they could tell us how they were going to do that, then there may be some more substantial concern. >> bring in michael ye live in san francisco with us. michael, welcome to be program.
>> thank you. >> love to get your opinion on where you think this stock, these stocks, could go, and how much risk is in there from this week's events? >> yeah. i think you guys hit on a couple, the major key points. number one is, we've been talking about this in and democrats talking about it so long and the stocks reflect that. already still down 25% off the highs. so look where we're coming from. number two is, i think we appreciate that, and still maintain control of congress. none can actually get done. controlled by republicans. third, when i go out talking to institutional investors long in the tooth. in other words, talking about this so long, talking about pricing, at this point i think people are willing, and the market is willing, to look past it and with the stocks where they are traded no point values we move higher. earnings are important this week, too. you mentioned gilead, amgen and
se celgene that will set the toenchts which do you like the best in the environment we're in? >> well, i think given what we just said, i think amgen and celgene are poised to move higher. celgene, important one. trades at 14 times below the market. i think that one's best poised to move if money flow starts to come forward into this space. >> michael, you've bought this up, i totally agree about the whole idea the pipelines have not been priced in. because of that, who has the best pipeline of some of the big four or five you cover now? who has the most excitement right there? >> yeah. so i think celgene, number one. i think biogen number two, with the alzheimer's pipeline and third i think is vertex, a great move in the last month, put up good numbers this week a new cystic fibrosis pill, billion dollar drug reads out next year. another big one poised to move. >> and amgen, trading in a channel, not going anywhere
since essentially christmas 2014. now a 13 forward pe. how is this not a screaming buy? what is keeping this thing at a below market pe? >> yeah, well, you know, amgen has been sort of a tweener, trading sort of flat. i think the key is that as money comes sbook biotech, in sis a laggard in biotech. we can move higher. i think, again, good earnings this week would be the one that sets the tone. i think i've got more confidence on amgen's numbers this year than any of the our four biopics. confident in the guidance. >> a great point. interest rates. sensitivity to the sector. explain that and your expectation going forward? >> the nonprofitable bio techs that they are capital use egg. cost of capital goes up, they go down. access to capital goes down, too. not the big guys, like the celgenes but the small caps, making up a lot of the nasdaq index will go down. just make the point that we say
the heck with biotechs anyway and own some of the med devices like boston scientific and hmos like united. if you really wanted to be in biotech own the real estate, the reit that owns the property underneath the biotechs and don't have to worry about pipelining and get yield. >> thanks for coming out. >> thank you. michael gye, thanks. talk to you soon. >> thank you. marissa mayer want to stay at yahoo!. verizon, non-committal. up next, former interim ceo of yahoo! ross levenson, his choice to weigh in and do it exclusively, new at noon on the "halftime report." there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be.
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it is official. verizon buying yahoo! for $4 billion. a one-time sill con valley heavyweight, one time during the height of the boom, capped $125 billion. for more on what the deal means for the company and its ceo marissa mayer, former ceo, ross levenson. ross, welcome back. >> thanks, scott. >> so marissa mayer said, "a very proud day for us." is that how you see it? >> well, i think it's an exciting day, if i were an employee at yahoo!. you now get a purchaser that
brings you incredible scale, deep, deep pockets to invest in this business, distribution on not just phones with fios tv and the like. a really, really tremendous operator in tim armstrong and marni walden and the team at verizon and aol who understands the business and is committed to it. so if i were an employee, i'd be excited that this is the, perhaps, the beginning of a revival. not without pain over the next, you know, year, but certainly as good a strategic a buyer as there could have been. >> interesting you say that. rosenzweig, dan rosing zweig, former coo was on the prior program saying it's "a disappointing day" for employees. meld three different cultures. who nows how it will shake out?
long-term employees of yahoo! whichever are still there? >> i'm okay disagreeing with dan. we don't always have the same view but he's a super, bright guy. look, there's six different cultures at yahoo! alone right now. so this is not anything new for anybody who's spent a month, a year, ten years at yahoo!. and it's true for any company. i think what yahoo! has yearned for, at least my experience in dealing, from the inside and outside, is clear strategic direction, and, you know, hats off to tim for what he's done at aol. he took an asset that when i was at yahoo! and he and i had conversations, was there something to do? at the time aol was a quarter of the size of yahoo! and now, you know, 4.5 years later, acquiring it. he's done a remarkable job getting the company focused, getting the transaction to verizon through and now you've got a company in verizon that's really put stakes in the ground
in and around the digital business and are committed to it. so congratulations to them, and, again, if i were an employee, i'd be excited, if i remained. i'd be certainly, there's going to be a lot of consternation inside about what happens next, but i think, you know, this is not a company that's, you know, likely coming in to just slash and burn. this is a company that has publicly stated it wants to be a powerhouse, and certainly has the resources to do it. >> so in a digital ad market in the u.s. that's, let's call it about $70 billion, and if, if google and facebook have half of it, and yahoo! has 3.5% of it, what does yahoo! look like in three to five years? what's the headline going to be as we turn the, the book open three years from now? >> well, that's clearly will depend on the strategy, but if you just take a look at what tim focused on at aol, and what
verizon has been doing in an around the content space and monetization space, you're probably looking at a digital media/technology media company that embraces premium content, embraces ad technology and monetization and marketing solutions for advertisers, puts its arms around commerce, and thinks about how it can leverage its hundreds if not billion-plus users globally to monetize through ecommerce. you know, and then you have the wherewithal and the opportunity in and around virtual reality, augmented reality, because of the premium experiences that these companies are embracing. i think you have, and you have a scale player that's an alternative to google and facebook that really has focused on premium content. so -- i know this sounds a little like a broken record,
because i've been saying it a long time, but tim took that strategy, really invested in ad technology and now has massive distribution and capital with verizon. so i were an ad buyer, they love tim, what he's done since his days as google. i'd say it's an exciting time and why i disagree with dan and the employees are great at yahoo!. they just need to be pointed in the right direction. >> so marissa says she wants to stay. kara swisher of recode says that's not going to happen. what do you think her legacy will be? one of the spectacular stock return, since she first took that job? or one of value destruction that some will say, if you look at the greater picture of some of the moves that didn't work, some of the opportunities that were missed, and the like. what should it be? >> well, hard for me to say. i think you'll look at somebody who came in with incredible
enthusiasm, and, really, you know, at least from the outside, a very clear direction in her own mind what she wanted to make yahoo!. and as i said last week with you guys, you know, clearly the numbers show that it didn't work. so you know, she took -- definitely got the company focused on mobile. obviously put a lot of energy into search, and i think we could look at the asset today and say, even though the market was changing, the company probably eroded faster than -- than some of its competitors. aol being a prime case where tim, you know, over invested in a positive way in monetization, and buying huffpo and it seems to have paid off. and marimarissa, not just on he this is a company that struggled to find a direction for ten
years, not just four years, but certainly over the last four years the erosion has been, you know, troubling, and that's probably why i'm, you know, clearly i was in the mix. wanted to see the right outcome here, and i think this is probably the most strategic and right outcome it could have had. so, look, the pundits and analysts will write her legacy is, but she worked really, really hard to try to get yahoo! in the direction that she saw fit. the numbers don't belie that it paid off, and it's, i think, as a shareholder, you know, i think tough to sit here and say, gosh, four years later, the company, when you extract the real estate value and some of the ip value, this thing's selling at low 3s? couldn't have believed that four years ago. >> ross, appreciate you coming to the phone. leave it there. breaking news to run to. always enjoy speaking to you. ross levenson for us, former
interim ceo of yahoo! this other new at noon story, just breaking now, a big call hitting the street. downgrading apple and it's to a sell. $85, the price target. colin's on the phone with "the call of the day." scott, why this move? >> look out at the back half of the year, we are not excited. the sixth grade upgreat cycle has been slower than the sixth and we think you'll see a continued slowdown when the next iphone hits. >> a lot of people are going to be very surprised at this call if for no other reason than the 7 is what is generating the enthusiasm for the expectations moving forward? >> and that's right. you know, the concern is, that you're not going to get the growth that people are expecting. particularly in the september and in the december quarter. so, you know, a year from now, when we get the, the next phone,
the anniversary phone, that may be a slightly different situation, but you're looking at a smartphone market that's fully matured. right? that's growing, you know, less than 1% and looking at a management team that has not diversified revenues away. in five years the only product category they've opened up is the watch. that hasn't had material impact on revenue. squandered domestic cash buying back stock and we think that, look at the next $100 billion in value, that's to the down side. >> you think they should have taken some of that cash and, look, lord knows they have a massive pile of it. you think they should have made some sort of transformational acquisition? >> the bit that really -- you want to say, why now? right? why now is again because of expectations or concerning that september and december numbers come down. but when we saw soft back buying arm for $32 billion? a company with a margin profile
would have fit beautiful with with apple. let them leverage overseas cash. received the tax benefits and letting that slip through their hands. we see a company that's just stuck on increment's iterations. >> stocks at the lows of the day, i should say as well. down nearly 1% hanging right around that. made a hire today that will be dealing with maybe a car. what impact do you see things like that having on the story? >> you know, fine. right? 2021? we talk -- wait. >> so all you care about, if you're looking at the apple story, is the phone, the phone and the phone, and what the phone is going to deliver moving forward? >> yeah. you know, we also want to point out that the phone characteristics could become a lot like the pc and the tablet market. you realize, ipad revenue declined nine consecutive quarters in a row?
we hit peak pc in september 2011. yeah, the phone, the phone, the phone. >> i want to make that the last word. colin, thanks for -- on the fly. we're glad no one disturbed you while you were calling in. we'll talk to you soon. all right. colin gillis with a down grade of apple from bgc. >> breathless down grade. >> apple has been one of the worst dow performers, i think, along with goldman sachs, the two worst. how should we view what colin said, it throws a lot of shade on the expectations what the 7 was going to deliver, which people had so high hopes for? >> those expectations have actually been coming down over the last weeks. this is not the first time somebody's come kout and thrown shade on the iphone 7 upgrade cycle. also talking about stock action over the last week, scott, gotten to 100 and bounced off to the down side two or three times
now. the fact it can't break through it is worrisome. frankly, look ak the earnings report, i believe tomorrow afternoon. if it doesn't break through 100 on that, no way it's going through 100 anytime soon. >> guys? >> the thing i think of here is the significant waiting that apple has in the technology space. it was, was colin making a sell call on apple and saying it's reflective of the entire sector? >> no, not saying that. saying the phone is, is going to be a, a dud. >> but you are -- >> that's what i thought. right? >> talking about a name with a significant waiting in technology itself. so for viewers out there, take it as a stock-specific call on apple to your point. allocate the funds elsewhere, whether a facebook. heaven's forbid, an ipm, but somewhere in the technology space. maybe a google. i don't think you treat the call as an indictment on the sector. >> not at all. it's just -- he's going right after apple. >> a lot of he'll will see it that way. >> they shouldn't. what we just heard from colin now is this is apple and
apple-specific. the fact he's disappointed in the fact that the culture at apple has been, we don't make large acquisitions. they missed the arm holdings deal. mentioned that one as well. big deal? $32 billion. >> do they need to make a big acquisition? if they would have bought arm holdings would you have come on, said this is the move i've been waiting for them to make? >> for me, the answer, yes. years ago should have bought netflix. years ago, other names to potentially considered buying and they've continued to pass and pass and pass, and the biggest acquisition is still bee beatz. look at apple's culture within they don't want to go with that big dollar, don't want to put the check out there. we know how much cash they've got. he addressed the idea of u.s. cash used up on buy backs. this is apple consistent. >> shaking your head? >> i don't know if buying a chip supplier is the answer to what supposedly apple. the track record of large
acquisitions within large cap tech is terrible, actually. microsoft, nokia, skype, do we want see apple taking shots for a chip supplier? probably not. >> should apple buy twitter? >> no. they should aggressively partner with twitter but don't need -- i'd be glad if they did, but they don't need to. >> anytime you can get yourself positioned to become that much more such within your own space, think how that hits the bottom line? >> like delta buying the refinery? >> that's a great example of what i want to make right now. because whenever we talk about acquisitions with apple we're talking about sort of lofty acquisitions. buy tesla, netflix. very pricey acquisitions. and much like delta buying the refinery. >> pay to play. >> and delta buying the refinery, apple should look outside of the high-priced tech world. they want to get into cars, buy
gm or ford. six times earnings. yes, everybody knows i own the stock. still, six times earnings is a good use for cash and strategically gets them where they want to go. >> think quick about the passive versus active argument last week. kind of goes back to the stock itself. active side. carl icahns off the stock. feel good. passive side, warren buffett is in the stock feels pretty good about it. really, what it's your thesis on apple? over the next six, nine months, the stock will accelerate to 120 or believe over the next three to five years the stock's going to make that move, and i think that's how you align your position. >> and colin getting ahead of earnings and what happens if apple really disappoints? what does it mean for the overall market itself? don't forget, dow component. keep stressing that. >> no, no, i don't think it's that important. we saw -- saw the s&p 500 rally almost 40% on a total return basis in 2013. and apple did nothing that year. was a loser. that link does not exist. >> i don't know.
>> it's a trope. >> kramer talking about the market today. >> but -- >> apple looms large for me, what he's saying. >> but josh is giving evidence. >> is kramer in the ho us? get limb over here. >> josh is giving you evidence what i just argued. >> kramer, are you here? >> big companies, when they stumble, if the overall market is going up, money comes out of that company share price and goes into the others. so facebook could take over leadership, or another name. this is repeatedly what happens. no one stock that can totally tank the market for more than 20 or 30 minutes before people realize, wait a minute. why would i sell this company because apple is having a slow quarter on their phone? doesn't exist in the real world. >> apple's off 30% in the last year and the connection is broken. >> okay. we are at 12:30 on the east coast. a quick look where the market's at right now. boy, a big downgrade of apple to a sell. see was the impact is.
dow down 114 peepoints. seems to be the low of the day. nasdaq is off today and one big name industrial stock tanking as well and one big name trader on the desk has been a huge fan. is te bhe buying more? that's next. with usaa is awesome. homeowners insurance life insurance automobile insurance i spent 20 years active duty they still refer to me as "gunnery sergeant" when i call being a usaa member because of my service in the military
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hi, everybody. i'm sue herera. here's what's happening at this hour. a federal judge banning uber from using information ob taked by an investigative firm in a background check of a plaintiff who brought a price fixing lawsuit. saying that the firm irgo engaged in fraudulent and arguably criminal contact. at least 18 homes were burned in a california wildfire that erupted over the weekend in los angeles county. the fire is threatening more than 1,600 mountain-side homes in that region. more than 1,300 personnel are battling the blaze that's mostly burning out of control. four people were killed when a dallas cowboys bus and a vehicle collided in arizona. the four fatalities were apparently in the vehicle. no players on the bus which carried some team employees. no what caused that accident.
and evidence signs of alzheimer's disease could show up decades before diagnosis. according to new research presented in toronto at a conference, the research describe as condition called mild behavioral impairment which has more to do with mood than it does with memory. that is the news update this hour. scott, back to you. >> okay, sue. thank you so much. i want to take you through what's happening with crude oil right now. there's your look. could break below. that's wti, could break below $43. lowest level for wti and brent by the way, since may. and the stock's within the space, near and dear to many portfolios exxon, chevron, the ones getting hit, but wti could go below 43 any moment now. >> you got two reasons for this. going to continue. one, rig count steadily going up. supply is picking up. the other thing is demand is starting to go down as refiners enter the shoulder season where they start to take down refineries for maintenance and switch over to the heating oil
season. that's happening in august. the market is getting wind of that. >> joe? >> same as last year. easy trade. >> same as every year. >> no. the same as last year in terms of when the opportunity for an easy trade was in the oil space, and that was february ran its course through the end of may. time to ship, shift out of the high beta names. look at the large cap names. i know josh and pete played the xle. i like that strategy and think you could look at higher-end refiners like a psx. jim is right. talking about rising global inventories. global inventories not just domestic. >> look at catalysts for the market up, up or down? right? so oil, say that's one. maybe that continues to go down. we don't know. earnings. the busiest week thus far. one-third of the s&p reports, stephanie link with us to talk about those names. look at calendar. a lot of big names there. mcdonald's, caterpillar, i could go on. you get the picture. exxon mobile, chevron towards
the end of the week. steph, are you there? >> hi. how are ya, scott? >> how are you? so if oil is a catalyst, earnings are going to be a big one in determining whether this market is overvalued or not. what's your view? >> well, i think earnings so far have been kind of impressive. i think expectations were low. i think certainly numbers had come down. but i think that you are seeing companies not only deliver on the bottom line but also on the top line and what's been impressive to me, scott, has been the margin story. everyone thinks that the margins have actually peaked. actually quite a few companies see margin expansion. >> you're with tiaa, in case people forgot. didn't say that at beginning. so welcome. >> thank you. >> which particular stock -- when you own caterpillar, looking out noor. mondalez in the headlines and lilly. >> yes. so just start with mondalez. i think this is the most interesting staples stock. it's lagged the group. only up 1% year to date. the group's up 15 to 20%.
i like it fundamentally as well as a catalyst. fundamentals are global brands, good global brands. good distribution and margins are expanding. you've got positive leverage and m & a. i don't know if they're get hershey. you'll see a higher bid. if they get it, i like it from a distribution basis. don't get hershey a chance kraft heinz 3g comes after that. i like the story one way or the other. again, i say, it's the margin story fundamentally that has me very intrigued. >> sounds like you're more optimistic than not about the overall market? >> i mean, we've had a nice run. we're going to be -- it's going to be volatile, but i am optimistic. i mean, i have three companies, you mentioned, mondalez, lilly, caterpillar, all three i want to buy on dips, buying on pullbacks. i see strong visibility. you don't want to own every sector but certainly there are
stocks out there that are going higher. >> one sector. steph, thanks. see you back on the desk soon. i know we will. stephanie link. one sector tough to own today for certain. energy is having its worst day in a few weeks. crude just breaking below 43 bshgs we said it might. following ta story. wti, september contract. a quick comment? >> i think the federal reserve, people are really complacent about what the federal reserve is going to do and i think they are going to put the september rate hike right back in the headlines. >> all right. straight ahead, remember the big retail drop earlier this summer? styles may be changing again, and we're back. we'll talk about it on the "halftime report" in two.
do the trader blitz. four stocks make news today. first up, deere. got downgraded at piper. josh, you've been, i don't know, pounding the table on this one a while? >> yeah. a little higher than i first started buying it and probably a buyer in this range. basically the corn harvest will be better than expected. hyper jaffray saying a fourth consecutive year as a result of weak commodity prices. i don't think anyone thought was turning this year anyway and a
tough space, which is why you can own deere with a 3% yield and you can buy in yield directly at a pretty cheap price, right where berkshire hathaway is continuing the stock quarter after quarter. it's a buy, i'm sticking with it. >> is that how the corn market works? >> exactly how, scott. next up, a double dose of retail from the high end to the low end. pete's looking at nordstrom's and target? >> interesting is, yeah, somewhat flying under the radar today when you look at retail names. out there talking positively about how july has been really starting to ramp up for these it retailers. look at target, look at tjx as well and some other names. nordstrom up 3.5%. these names moving to the upside and pay attention to these. as a matter of fact, tjx, 52-week highs. >> blackstone, the scoop? >> 350 aum, the financial story is a begun. i like the stock, the momentum, a nice play on a recovery in terms of the energy credit
portfolio these financial institutions have. secondarily, the real estate portfolio, monetizing some real estate. interesting. i like t. jimmy, beoeing report wednesday before the bell? >> looks like an order from malaysia airlines for up to 50 planes. takes care of a big hole in the production pipeline. however, the iran deal, selling up to 100 planes to iran looks like it's under pressure in congress. ultimately i think this deal goes through, though, because it's not just boeing sales, also airbus sales that would be prohibited if congress got involved, and i don't think the europeans will stand for that. >> all right. something unusual is happening under the golden arches. pete is watching it closely. we're back in a flash. put down that big mac. people talk about deals on their auto insurance.
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shares. that right there is the result of a down grade to sell from bgc analyst colin gillis. one of only three analysts out of 50 or so on the street who has a sell rating, but there it is. reaction is down 1.25%. apple below 98 dollar as share. colin doubting that the upcoming iphone 7 will be as big a hit as some others think. so that's why he, a day beforenings down graded that stock to a sell. there's apple. our resident options expert pete
najarian is tracking big moves in a food stock. pete? >> looking at a food stock with earnings tomorrow, scott. mcdonald's. interesting to see. look at this chart here. this area here interesting, brexit low after everything seemed to sell off just immensely. one of the names, mcdonald's dragged down. you see where it's gone since then. but we're looking at now, we've got earnings and huge buying today. fairly early in the day. the september 120 calls. somebody the out there on a negative day stock's off a little. paying $1.50 getting extra time, scott. not sticking with the very immediate time in terms of august. they're going all the way out to september. somebody expects this stock to be able to recover. maybe the numbers will be better in europe, better in the u.s. than people expect. >> you in it? >> i am in it. bought it soon as i saw the options hit. love it. like the look of it, like easterbrook and the direction he's going. >> options only? >> not the stock. options only. >> you guys? >> every so often from a
technical standpoint look at name lime mcdonald's you have an opportunity to find a phenomenal point of reference. that's what you have surrounding brexit. below 115, the story from a technical perspective, changes on the stock. no reason from a fundamental perspective not to be in the stock. there's your protection mark. 130 calls bought to the up side. go with it. >> the wrong stock. yum is the one breaking out as we speak. doing what mcdonald's did last year. mcdonald's couldn't get any love. for years trapped. when it started going, forget it. exactly what i'm seeing with yum here. above 90, 91 convincingly, no reason why this stock isn't triple digits. >> pete, not like playing the momentum option with mcdonald's. the stock hl a brilliant run? >> incredible run. a great ceo and i think turned the corner. a lot more elements to hit on,
scott. we don't talk about the real estate option anymore. haven't heard mcreceipten. >> because easterbrook turned it so well in every other category the stock is moving. no reason yum and mcdonald's can't both upside. >> i agree with pete. that's true. >> two different core products. >> i also think from a positioning standpoint that sharp selloff that you had surrounding brexit, you had a lot of longs get out of the marketplace now scrambling to get back in again, so the market is not as long as it was in june. you get a solid earnings report more flows going into a name like mcdonald's. >> i'd say mcdonald's is working because -- >> why is it flat over the last fl three months? >> it's digesting a monster move. to jim's point it's auz fully valued as you've ever seen stocks in this sector. it's a consensus long. and they've done a lot of good things fundamentally, but that's been reflective in the price. >> there are other names because it's 33% over here. underscoring exactly what you guys are talking about. >> scott, they pay a nice yield
as well. there are a lot of reasons why people are looking at the stock when it was close to 100, still looks like a strong yield even up near 130. >> pokemon all fun and games unless you stayed long nintendo. the lesson to learn is next. "halftime report" with scott wapner is the place for market moving interviews. >> you don't call a company a sewer because a company made a mistake. >> real money. >> we're short tesla and solaredly city. >> competition's a good thing. i don't want to have -- i don't want to go back to a single marketplace. >> the most profitable hour of the trading day. >> i love this show! all i get to do is tweet about the show. i'm on this show. this is like the greatest moment of my life! >> "halftime report" weekdays at noon eastern.
we're back on "halftime report." short interests really started spiking a week ago on nintendo and turns out while the players like pokemon it doesn't make so much money. and since then the stock's down 27%. it is a lesson for all investors, be ware of the bump. and that brings us to the trade school on short interest. short interest is high on under armour 28%, nordstrom 19%, good lesson to be learned, pete, on nintendo? >> well, i think so. look at sometimes the negativity gets so high look at something like nordstrom. it's not like valuation. we were just talking off air but talking about under armour valuation, when you look at nordstrom it's not valuation, it's just people starting to get more and more on the short side of this name and that's why you're seeing some of these moves to the upside that get a bit exaggerated with a day like
today. >> short interest has always been kind of high on under armour, right? even though the company has sort of knocked it out of the park, it's -- >> it's a very different example than nintendo. anyone ten done was very clearly speculative mania. it's nice these things play out over the course of five days now instead of five months. so i don't know if the stock doubled or whatever it did, but over $10 billion added to its market cap. and now being taken away just as quickly. and that makes sense because it was based on a product that they don't even really fully own and it was kind of a fad. the names you flashed on that screen though i think those are more like investment shorts where people are looking at nordstrom and the decline of the mall and the department store, or chipotle. and they're saying this company will never justify its multiple now that growth is gone. i think that's very different. >> one thing, i think josh is right, short interest can often be a contra indicator. if the shorts are wrong and something moves the stock,
herbalife was a great example two weeks ago, when the shorts come in to cover they can move the stock higher on positive moves. >> important point company got acquired today by apollo called outer wall, we know it as coin star and redbox, the parent. 52% short interest going into today. and they get bought by a private equity firm. very, very dangerous to have an investment short on in today's day and age. >> let's do final trades. and let's do it with under armour looking ahead to their earnings. pete, your outlook for under armour, in a week where remember we had this exclusive interview on the network with the new ceo of lululemon who said athleisure is a bubble. now, obviously there are lead who are are going to be just fine, but how do you read that into where -- >> i think real quick what i would say look at under armour and they are just starting to get themselves with international exposure and they're trying to get more and more of the female market as well as the male market that they're getting and the shoe area. so there's still levers i think
they can pull in terms of growth. so that's why i think under armour still beats. >> here. >> i think you do buy it here, but i think it's a longer term type of strategy. understand there's always something on the other side of that short. >> thanks, guys. all of you as well. thank you. >> and that's how markets work. we'll see you tomorrow. >> perfect last word. >> that's great. scott, gentlemen, thank you very much. i'm tyler mathisen. welcome everybody. thanks for joining us on "power lunch." and here is what is on your menu for the next two hours of power, a done deal. verizon buying yahoo for $4.8 billion. what it means to you the investor straight ahead. also ahead, the russia factor. how russian hackers could be playing a big role in the race for the white house. and later, the pokemon pop. we got fresh data on how retailers are cashing in on the pokemon craze.