tv Fast Money Halftime Report CNBC September 7, 2016 12:00pm-1:01pm EDT
in favor of effective government, gone back and forth and been all over the field on. interesting point of view, nonetheless. >> and trump and clinton continue to make headlines. obviously, the apple event this afternoon. hpe tonight. a lot to watch. over to headquarters and "the half." carl, thanks so much. welcome to the "halftime report." i'm scott wapner. top trade, chipotle's new champion, bill ackman a 10% stake just about in the restaurant chain. is it enough to turn around the closely followed but troubled stock? with us for the hour today, joe terranova, josh brown, pete najarian, jon najarian along in a few moments, but, pete, can bill ackman turn things around for chipotle? >> i think they need an activist involved. i think the only thing i question right now for chipotle now is that he'll speed the
process up. they've been trying to get this turned around over a year now. ever since the first outbreak in july and all of a sudden last october got a little worse. spread around, and they've had a difficult time collecting back those same-store sales numbers they'd had. aren't getting that now and trying to figure out the best ways they can. trying every promotion to get back those valued customers. that's the problem. are they doing it at the kind of speed that wall street wants? obviously not. bill ackman is the kind of guy to change that, but i don't think it happens immediately either. i think it still takes time and bill's a little early. >> josh, analysts today say, no quick fix. they say, ackman's eyes are bigger than ace stomach. they says, steval, we cannot fathom mathematic or or investment thesis. what are they missing? >> i would not go as far to say it's a negative, having an
activist in the stock. persian square involved with the stock, but i don't know if it's an immediate positive. obviously other than today's big move, but i think there's, there is an important point to consider, which is that chipotle has a revenue problem. right? not the traditional activist placebook. go in, sale lease backs of the real estate, let's cut costs. maybe there saddle cost-cutting, because the company has not yet fully come to terms with the fact they have a smaller base. what is an activist going to do to make feel want to eat of second or third bar receiurrito proit lei? it's more of an image problem than an operational problem. not a negative but i don't know really he can move the needle in a big enough way on the revenue side. >> so joe, looking at the restaurant bets, right? people like to knock ackman around lately because of his
performance of late, but look at his track record in the space. whethers mcdonald's, wendy's, burgee king, landry's, great success in this particular area. >> but the four of those did not have 10,000 employees filing a lawsuit about possible wage theft. didn't have an fda oci investigation going on. maybe he's betting on the same type of fda reaction that herbalife got two years nag 2014 a slap on the wrist for chipotle. i agree with what pete and josh were saying. it's not a negative to have an activist in a company like this, but there are many, many head winds for a funaround stoturnar. goldman sachs put out a great note. they are the one restaurant, it appears, you're seeing rewards momentum slowing. it's actually increasing for domino, yet slowing for chipotle. >> have people writing thin
company off too quickly? >> no. we've talked about trends. in the time werd from chipotle was going through all of these issues, p.r. and otherwise, customers who were loyalists sampled other products. they went to other places. >> you know -- other places, taco bell even. >> everywhere. >> be honest. >> but they have the brand. they do have brand strength. >> they have -- >> lost all the -- >> the officer, because this poor guy is unfortunately found himself on the other side of the bad side of drugs. i mean, they've got nothing but problems. what does this remind you of, scott? a little of lululemon. issue after issue after issue stock was hammered. losing to nike and finally able to get themselves moving back in the right direction. the fact ackman is there is helpful. doesn't mean a quick fix. i totally agree with that. over time he were maybe help direct them as he did with suggestions probably with some of the names on the list you just -- >> management's willingness to
be receptive. you need to understand and hear that. the co-ceos elected with 90%. >> who knows the conversation held at this point, but judging by the company's statement, this is a welcome, not get out of my face. >> sure. >> well, sure. >> as he can add something to it. >> it should be welcomed. listen, if you want to buy along with bill ackman here i don't have a problem with that, but don't try and buy and believe that this is going to be a quick three-month to six-month turnaround story you'll be rewarded fast. >> no. >> also don't buy with bill ackman. you wait -- >> and depends on the investor you are? not looking for fast money but a longer play. >> a better entry point than today. you'll get a better opportunity. why you don't chase ackman into this but younds why he's put himself into this position at chipotle. >> scott, the most important point, the spell has been
broken. this was a teflon company and it was a habit-forming thing for a whole generation of white collar workers and in cities, with great locations, and it was just, you never questioned what you were getting from your c chipotle experience. people are trying other qdoba, others, not that it's dead meat nor trouble but never going to be the chipotle it was from 2006 through 2014-2015 a much, much different scenario that you're looking at now. money can be made to the upside but people should not expect a return to the high multiples, the rapid growth, the bullet-proof standing of the business. >> you're also talking about consumer spending slowing here. you have to question, are we having a possible restaurant recession right now? >> no. i think -- >> is that a possibility? >> i don't think it's a possibility. i think by most accounts we're in one. >> okay. >> so you look at the timing of
that. >> for this turnaround story, again, clarify, i'm not saying go in and buy here. i'm saying, if you're going to be daring go in and buy understand this is going to take a long time. >> a few years? why is now not the time to buy? if you want to be a longer-term player -- >> because to pete's point, you think it's going to go lower. >> we saw the stock last night trading over whatever it was. 440 something. this morning, 441. here we are at 434. scott you'll see some of this come off, and two years down the line is a couple of dollars going to matter? probably not. why not just have a little patience? >> what happens if chipotle, throwing it out here. you've seen the success for mcdonald's. not that they'll come out weren't aall-day breakfast. what if they introduce breakfast itself? >> a positive on the stock, two quarters later, see ifit works
one of the things in the work, launches and tasty maid is the burger concept. roll out in ohio, a good place to test something like that. >> a pizza, too? >> yeah. if one of those things hits similar to, you know, apple, sell more macs? wait a minute. it's a phone. ha, ha, ha, can't do phones. wait a minute. they can do phones really well. that's a wild card. >> ackman wants to focus back on chipotle itself and not expansion -- >> he's got to cost cut whancht they've said, the pershing square statement. we believe the stock has a strong brand differentiating strong visionary and leadership. >> what about the lawsuit from om employees? not mentioned there. that's a head wind. again, what the other companies he invested in the past not have, look, some are say, look what happened jack-in-the-b jack-in-the-box? >> no credit bofor wendial.
that's nelson peltz. >> and mcdonald's -- >> in wendy's two different times. >> doc's point of sprview. welcome to the party. >> thank you, judge. not wholly disagreeing but i don't think the activist has as much impact on a stock lice cha chipotl chipotle. private equity would take it apart. get rid of anything not working 100%. >> tried that with burger king. >> try to basically cobble the thing back together and get that magic back. >> dismantle. the only thing wrong is perception. >> well, true, but, like, to josh's point, a lot of people figure the magic is gone. it's not something they have to have every week anymore. i mean, when you take away the unlimited bread sticks and salad over at olive garden or something like that did that make a significant impact, judge jie think activists don't have the same kind of -- xep accept
for mr. peltz, have had the same sway in fast food or fast casual as they could have, a private equity firm could have in the same example. >> what else really grinds my gears. no melted cheese on the nachos. selling you tortilla chip, but -- like that -- alone could be, like, one or two multiple points on the stock. >> never nachos there. i can't speak for the experience. >> just chips, scott. >> you'll never get an herbalife shake there. >> and no drive throughs. when i want a burrito on the go, you know? i just feel like there are some -- that actually san issue that came up. drive-thrus. something they should roll out. not a joke, it's to for real. >> i don't ever make jokes. >> never? >> do they have the app? can you order on the app? shake shack doesn't have -- >> yiv used the app. >> someone else joining the conversation, kate kelly follows hedge funds, follows big ackman.
a lot riding on this for mr. ackman given the track record of late? >> yes. a rough 12 moss for ackman. down 14%, improvement from the first quarter, which he ended down almost 26%. his biggest loser by far, valeant, embattled drug company and down 70% over the year to date. short stake in herbalife also a problem. trading in about the same range as may 2012 when he first shorted it but year to date, key benchmark, it's up 16% going against him and that's even despite a major settlement with the ftc which ackman promised would erode herbalife's earning power over time. see how that plays out. ackman called into "squawk box" recently to crow a bit hour carl i juan wcahn was poised to sell. asked intermediaries to find an interesting buyer and approached ackman himself in the process. at his words, i kwcoahn fired b
stating commitment to the economy on which he has five afill yents on the board. knocked high profile redemptions this past year including from pension funds in the likes of new mexico, illinois among ohs says the first half of 2016 was only the sixth worst redemption period in pershing's history and eight quarter redemption process should give runway. meanwhile, hunting for new opportunities. early august sold stake in canadian pacific. a big win. 2.6 billion dollars in apparent profits. said at the time he would use those proceeds to fund one or more new investment. the chipotle began the next day, the rough paper math that cost $1.2 billion. >> say he returns to his wheelhouse? right? 2004, wendy's. 2005, mcdonald's. 2006 border's, target, wendy's again. landry's, pennies, yum, burger king chipotle. these dabbled often and done well in more times than he has
failed in consumer-related stocks. >> yeah. that's actually a truism of activism in general too. apparently activists feel like tech companies, and there are exceptions, elliott, for example. tech companies and commodity companies can be tricky. it's just you've got these head winds in terms of commodity prices, for example. technology, not necessarily the product you know in terms of the warren buffett principle, could be hard to make innovations and shift margins's in this case, ackman has a track record as you point out. other activists have done well with the names. one quick counterexample, though, david einhorn lost big time on a chipotle short remember that? october 2012 shorted the stock. closed out about 18 months later total loss. said it gave him gas. >> borders was -- was whatever the opposite word for success is. >> a failure. >> jcpenney, another consumer play. don't think it was a success. >> okay. and jcpenney wasn't good either,
but if you mention it -- you have to mention the names in this particular genre. >> but this is a growth company. this is a growth company trading at a growth multiple that has negative comps. that's different than a mature business like burger king where there's a lot of management fat we cut out and, oh, look. a brazilian private equity firm basically buying anything. this is not getting resolved by a brazilian private equity firm paying a reasonable multiple. an expensive stock, even if operations get better, that multiple still contracts. an important difference between what we're discussing with mcdothdal and burger king, et cetera. >> i get it. ackman's track record, good success across different sectors. think about a transport company, cp. general growth properties. >> no doubt. >> and mbna, dramatically huge accounting and balance sheet exercise he got very right. he has experience with the food business, scott, and he has a good report card as well.
>> we'll see. interesting. if nothing else. like talking about it. kate, thanks for being here. >> thank you. >> kit kelly. >> wonder what jeffrey gundlach is thinks? >> right. a blockbuster lineup for the sixth annual alpha krrchs taking place next week, new york city. more details and tickets available at deliveringalpha.com. good news. we're just getting started right here on the "halftime report." >> announcer: seeing the next generation of apple products. is it enough to help the stock find its way higher? the number one analyst on wall street is with us live, next. plus, under armour's next big game. nba star steph kur around ceo kevin plank give us exclusive access to their asian road trip. live in taiwan, coming up. this is the "halftime report" with scott wapner. hey gary, what are you doing? oh hey john, i'm connecting our brains
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this is the new comfort food. and it starts with foster farms simply raised chicken. california grown with no antibiotics ever. let's get comfortable with our food again. ak. back on the "halftime report." want to show you a live shot out in san francisco. apple event. where ceo tim cook's company note speech starts in less than one hour. for more on what to expect today, bring in the number one ranked analyst who covers apple on wall street. toni sag sacconaghi.
>> the success of the iphone is integral to the success of the company but not just this one product. apple puts out a new product every year, and, know, the question is how strongly received will this product be and how strongly received will the product be next year? this is, you know, the product itself, the iphone is 70% of the profits of apple. so it is very, very important, but if the product is largely in line with expectations which it will likely be, we'll have to wait to see what consumers think of it. i think confident over the next year, year and a half, the iphone will grow. lots of people with older phones who need to upgrade, and you know, whether the device is viewed as better than expectations or in line with expectations today, i don't think it's that critical. >> amazing, toni. i look at other notes from other analysts on wall street who use words like ambivalence when it comes to the way peopleview this
event out in san francisco and i just can't remember another time when a company like this with a product of the iphone is going to be met with such a ho-hum expectation going into it, like it appears to be today? >> yeah. i mean, what's a little bit different about this iphone is typically the number generations phone, so this is the iphone 7, have notable differences. so the iphone 6 introduced larger screen sizes. the iphone 5, incell display and notably thinner. typically on these new numbered iphones, there's something really distinctive about them. this different. more incremental. next year's iphone, the tenth anniversary iphone will be more novel, an o-lead display, a sheet of glass, potentially
bendable. truly differentiated. i think relative to other numbered iphone cycle, expectations are nor ho-hum, as you said, and more muted as a result. >> i wonder about this rumor or expectation, if it's even, if it's even risen to that level of this, no headphone jack? and i'm wondering what kind of risk exists in that when talking about something that people are so used to, and then making a dramatic change, in fact, forcing your customers to make a change, and they may not be ready and willing to do that? >> yes. i mean, i think it's very likely that the new phone will not have a traditional headphone jack. now, that said, it sounds worse than it is. you'll still be able to use a wired headphone through the charging port on the iphone. stow will have a different connecting port and it will likely be an adapter to use your existing headphones, but apple is always about pushing the
envelope, and certainly the envelope is about bluetooth and wireless headsets. but the absence of a traditional port doesn't mean that people won't be able to use a wired headset. >> yep. we'll see what happens. toni, interesting as always. appreciate your insights and we'll talk soon. toni sack naug sag naug -- toni sacconaghi. what do you think? >> probably rightly so, but nonetheless, i will be a buyer, i believe, on a dip, were fe get down to 103 or so, judge. not saying we will. or 107 and change, but if we get down around below the 105 level, i like getting back in the stock. so we own it for clients. i'll own it more for myself if it dips there. >> this notion there are more compelling tech buys out there, more sexy buys, that's where the money's going? whether it's facebook, morgan
stanley raises price target today just before we came on the air to $160. >> i agree with that premise. i think when you look at constructing a portfolio i am not at all talking about a trade now. because from a trading standpoint, the stock is rallied nearly 20% from $90. a phenomenal short-term trade. an institutional money manager for technology, the first time in years you have technology names you could go into you couldn't and almost had to go into apple in years' past. now you find yourself in oracle, cisco, text instruments, the list goes on and on and, yes, of course, facebook. that's to the detriment of apple. >> long term. longest holding i have. i continue to like it. still think plenty of upside. the transition, trying to get more into the services based industry, their growth engine now. i'm okay with that. i'm okay with the fact people will be refreshing these phones and so forth. i think when you really look at what's happening in front of us today you brought up everything.
it is the low expectations. what did we come into earnings with this past quarter? low expectations across the board. nobody expected the banks to do well. they did just enough better. what i think this event will be today. just enough better than the low expectation the street now for apple. i don't think this stock skyrockets or sells off. i think it continues to make the plotting move to the upside. >> stock has resistance at 110. going back to the spring. it has not gotten above. it got turned away at that level. but if it can get above you'll see a lot more aggressive traders talking positively about the stock and you'll see more excitement. meantime, triple bottom at 90. i think risk/reward fairly well defined if you know how to use sell stop limits and, look, just because there are other stocks that act better now doesn't mean that you can't be involved in both. i bought google yesterday. has nothing to do with apple. google is its own thing. a four-digit name. i want to be long, it's break
out. apple is not yet. look at each situation at its own story, not one verse the other, unless you are in a situation where your pot follow yo can only own one stock. i don't know anyone that lives that way. >> maybe expectations are simply too low? more people will upgrade than the street is willing to give them credit for? and maybe that is what the narrative is going to be for an event that is -- >> just what toni said about the charging port with the, you know, people hear about the headphones, and a lot of us are not big fans of bluetooth. >> i didn't even know -- >> even though it's 20 years old. >> maybe my own ignorance. i didn't know what toni was saying. >> the lightning port, going to charge, no the just charge, use your headphone through there. that's great. i think they may shock a lot of people, judge, with some of the things they do as far as how they make that phone better. if, indeed, they do, then that's the upside you're talking about. i don't see a lot of downside here. i just see people that are saying, well, blah -- i happen
to like netflix more than apple in the short term. that's why i'm long the one and not the other. >> add that if the earbuds don't have cords, then i'll have to figure out something else to do in the first 20 minutes when i get to the gym. you know what else am i going to -- at this -- >> drink your burrito from cmg? >> right. >> leave the apple conversation there. much more ahead on the "halftime report." >> announcer: a bullish call on facebook from a big name. how high can the stock go? and buckle up. the airlines taking off today. talking about the possible distance and altitude of stocks like american, delta, united and southwest, coming up. before the break, how the apple suppliers do after a big apple product launch. if you buy the day of the a vent, one day later micron leads the way. up and average of 2%. five days after an apple event, corning leads the way, up 4%. followed by serous, logic, and
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what's apping at this hour -- syria will reject deals struck by the u.s. and russia on syria's fate that is different from its own transition plan. their chief negotiator presenting the group's road map to a new political settlement for syria in london. it would require syrian president al assad to leave within six months. a train derailed south of cairo, egypt killing five people, injuring 27 more. the cause of the accident, not immediately known. but the derailment comes during one of the busiest travel times of the year in that country. fewer americans are without health care insurance than ever before. a new government report reveals 8.6% of the population was uninsured at the gipping of this year. nearly half from 2010 when 16% of americans lacked health insurance. and the wait is over. dose sekkese revealed the most interesting man in the world.
wri a more adventurous character than the predecessor. scotty i think you're the most interesting man in the world. i don't know why you didn't get that spot. >> oh, stop, sue. stop it some more. should have never even gotten rid of the other guy. >> he wanted to do something else, actually. i guess he was done with the world. >> he's interesting. >> all right. he's still interesting, though, in our book. >> the ceo of twitter. >> all right. let's go our trader blitz. first up, sprouts farmer's market tanking after cutting sales in profit outlook. josh? >> tough, tough business. tough for whole foods and competitors. traditional supermarkets are getting better at the organic produce oriented game and that just makes it of youer to attract foot traffic and keep prices high. so not a fan here. >> doc, western dig, raised quarter earnings forecast? >> one of the reasons they cited, sandisk.
take out the competitor, flash memory side, hard drives, put them together, expand the base. stock making a 12% move. upped guidance by 15% last night. >> pete, talking about chips. amd. secondary. >> up 150-plus percent over the last year. did a secondary, also a dead offering and absolutely making that balance sheet much more clean than it once was moving forward. today's move is actually an opportunity to grab a little more. >> okay. ahead, a historic trip to asia with sara eisen. sara? >> reporter: scott, it's been an amazing few days with nba superstar sef kur around under armour ceo kevin plank and his team. up next, how they plan to change the game and win internationally, when "halftime report" comes right back.
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our mission at clover is to highest quality dairy products. clover has relationships with 27 different family farms. the environment is who clover is. without it, we're nothing. pg&e's been a great partner. they're the energy experts, we're the milk guys. pg&e worked with clover on a number of energy efficiency projects to save energy every month. if you're part of the fabric of the community, you've got to ensure that you do things right, environment included. learn how you can save at pge.com/save together, we're building a better california. welcome back to the "halftime report." under armour that seen incredible growth. now looking overseas for more gains there. sara eisen join us live from
taiwan. hi, sara. >> hi, scott. good to see you. the centerpiece for under armour's quest for growth here in southeast asia is steph curry and the rising popularity of basketball and sports across this market of the world. like it is based in u.s., under armour knows nike has two decades headstart. look at the top-selling basketball styles in china, according to citi group, the top five are all nike athletes talking lebron shoes, kobe, jordan, nike air max and kyrie irving. here next week on his 12th asia tour, this is curry's, but this is why curry and plank, the ceo of under armour are thinking so hard about the strategy in this market. for this tour, for instance,
they launched new design, a new style of the curry 2.5 basketball shoes to reflect and inspire by an old popular chinese folklore. he was greeted by thousands of fans wherever he went. especially here in taipei outside the under armour store, inside a basketball clinic where he coached and played with some high school students, and inside a massive arena in front of 5,000 people where he went around to take selfies with them. this clearly comes at an important time for under armour. its stock has stalled, and actually fallen so far this year after multiplying more than 24-fold since the ipo as questions linger about where the next leg of growth is going to come from and whether it can grow into its above industry valuation in terms of a stock that growth could lie certainly in international, and in the growing line of steph curry. on that note, i did have a chance to talk to curry himself about his vision for the brand,
and also that outcry on social media from the release of his chef curry white shoes. you know? on social media? they called them dad shoes, made fun of. they actually sold out. i asked curry whether that was a painful experience to get all of that backlash. listen. >> that was amazing, because -- i obviously thought the stories and the kind of tag alongs behind it were pretty funny. >> reporter: dad shoe? >> the dat shoe. for you have people wondering, you're on the right track. >> reporter: more dad shoes? >> i wouldn't call them that but more white-based shoes open for interpretation. >> reporter: and that came in response to a conversation about his ambitions to actually take the brand beyond performance basketball shoes and really into more of nike's territory where it's the sneaker head market, scott, where people line up. you have a special limited
editions that sell out and go up in retail which they haven't managed to do yet. but first, certainly, is these asia tours where under armour parades him around. you see the results and how important it is for both the strategy of the company and curry himself. >> yeah. no doubt. sara eisen, thank you so much. sa sara with that exclusive access with chef kur around tcurry and armour. stock down 20% in one year. it's down 5% year to date. is it a buy here? >> i bought it yesterday. as you know. bought it, said i bought it here on the "halftime." set myself up with some call spreads. i think a lot of analysts when they see the reaction that sara's seeing firsthand over in asia, scott, i think they will react to it. so, you know, the stock popped to 39.5 this morning. thought we'd get momentum, bush through 40. didn't, pulled back, but i'm
still holding. >> valuation, josh, come back into the comfort zone for you? >> i don't think valuation is the catalyst for what's going to make this stock work in the short term. you know, the long run, much more important, but short term, i really think it's going to be momentum of the business, deals they sign. teams they sign up with. things like curry's release. those will be the things that move the stock day to day, not a pe multiple. from that standpoint, talk about price action. really had a rough low at the beginning of the year. it's been selling off repeatedly, however, it's been making a pattern of higher lows. meaning, the sellers' exhaust themselves earlier and earlier on each sell-off including the latest one. jon may be on to something with his purchase yesterday. timing might be really, really, good. that said, not awilling to commt on the long term. >> i think the stock bottomened and clearly a strategy having
been in that store in baltimore and seeing how much of a focus on trying to gain share as it relates to women's apparel. if they're able to do that, if they're able to get women's sneakers, the actual power, maybe drawing away from lululemon or nike, then i think you could see the stock accelerate, but i think the stock has bottomed in the near term. >> caterpillar shares soaring more than 20% so far this year, but is there more room to run? deutsche bank upgrades the stock today. it's our "call of the day." debate it next. first, melissa lee. coming up top of the hour on "power lunch," all about apple's business product gets under way. release of the new iphone 7 and will there be one more thing? all over the headlines, instant reaction and analysis plus apple's been a lagging stock. what other tech stock should you be buying right now? that and much more on a very special edition of "power lunch." "halftime report" is back right after this. announcer: "halftime report" with scott wapner is "the" place
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all right. back on the "halftime report." caterpillar shared enjoyed a near 20% run this year. deutsche bank believes more room to run. the firm initiating the stock with a buy rating saying it's their top pick in the machinery space, looking for 21% upside from here. we've made it our "call of the day." they're calling a bottom. what say you? >> well, one thing i don't like, judge, is -- i love that it's bounced as much as it has, but saudi cutting back because they're just overspurnedingover everspurneding. cutbacks up to $20 billion on infrastructure and so forth. i think that is a potential that holds caterpillar back rather than a catalyst that drives them forward, after a 20% jump. >> a good debate, because they initiate deere with a hold. josh, you like deere. >> yeah. >> how do you debate these two? >> well, look. they're both equipment companies, and they both have suffered from the commodities
swoon, but the commodities they're involved with are not really related. deere is more agriculture. and depends on farm incomes. caterpillar's problems are much more connected to mining and metals and if you actually read the report, i think, what they're not saying is they expect a massive recovery in cat's underare lying markets, saying that things aren't getting worse and maybe that's enough, but i think $85 is a tough out in crack that's real resistance on cat. gets above, revisit from a trading standpoint. but from right now, just looks like yet another rally that gets to that level and falls apart. >> pete, i like your read. a difficult stock to get a read on. the notes that i'm reading from. a difficult stock to get a read on because the ceo is bullish no matter what. >> no matter what. you know, this analyst, interesting, because as bullish at this call is, talks it being a top pick upside, 21%, whatever. i don't want to appear overly enthusiastic. we're talking about an interesting call here, because that's a pretty enthusiastic
call, to say this has that much up side pap what time sgramfram? i talk about shorter time frames. look at forecasts and where they are and believes metals and mining bottomed, seems to me the stock already made that move. is that already priced in, or is this analyst right, there's another 20% on top of it. >> i think more of reasons, dom whoever wins the white house has to stimulate the economy, rebuild bridges and roads and thatefits a lot of these. >> industrial space, ge. >> i prefer ge, mentioned curtis wright on the show yesterday. a host of industrials that i think will benefit what what joe is talking about if it actually happens, that don't have as much baggage and caterpillar with the massive investment they made pretty much at the top of the cycle that really are still suffering from. it's possible earnings troughed.
who knows. down 60% from the peak in 2012, but i think we've seen a nice bounce in the stock. so unless you tell me there's really good news coming, from metals and mining in general -- >> right now you think ge has better upside? >> yeah. >> i do, too. >> it's a whole different -- >> and exited themselves as much out of the financial world. a lot of different things they're able to do with their books to move forward. >> moving, airlines soaring. more passengers hitting the skies. after a rough year are they finally a good bet? speaking of travel, just how low gas prices could go in the coming months. ne buzzing] some things are simply impossible to ignore. the strikingly designed lexus nx turbo and hybrid. the suv that dares to go beyond utility. this is the pursuit of perfection.
all right. we're back on "halftime report." take a look at the airlines today. new reports showing a 5.9% increase in passenger air travel for the month of july. pete, one of the catalysts here today seems to be these comments made at a cowen conference today had all the stocks buzzing higher. >> we've all been waiting for this. how many times have we sat on the desk talking about how inexpensive these stocks are and how things are improving. obviously the big three, those are the ones really moving today, especially delta and american great moves to the upside. all over these names for a very long time, sometimes it's been a bit painful. sometimes we've seen the stocks selloff and they're finally starting to catch mojo. you got to like what the balance
sheets look like. these companies seem to finally be getting a little bit of that momentum back. >> you guys agree? >> well, do you go out of the rails into the airlines now? i mean, the rails have been where -- >> why can't you be in both though? just transports in general. it seems as if the transports -- >> let's talk about the transports in general. throw up a chart for me of the iyt. i think this is an important chart for the overall market. here you have an inverse head and shoulders on the candles, perfect right there. sorry? >> is there any dandruff? >> no, it's inverse. the bottle's been turned upsidedown. do you want to make some money? >> inverse, head and shoulders, candle -- >> worse than -- forget it. >> no. >> listen. financials and technology together are 40% of the market. if you have those two acting at least well if not good, it bodes well. but when the transports are not acting well, that's the thing that you'll repeatedly hear from
technicians, that's quote/unquote, the problem with the rally. y don't have that now. you've got the transports here, all of them by the way with the exception of like fed ex and u.p.s. challenging those old highs going back to the spring. if they can get through, that's a big if, i think that could give you another leg and probably lend a hand for the industrials as well. >> say if the transports are poised to do what you think they could do, then the overall market view of yours must be pretty positive. >> it's a big if. keep in mind if you pull that chart look back a little further, you're still in a down trend. but if it gets through, it's another feather in the cap. it's confirming what we've seen in the dow industrials already. >> okay. talking a little bit about travel here. speaking of that, history shows that gas prices typically don't do well in the fall, which is a good thing for the consumer. jackie deangelis at the nymex has the futures now traders with her today. >> good afternoon to you, scott. that's right. we're heading into the seasonal downturn. if you look at gasoline futures, you can see they're down 10% in the last month alone. scott nations, is it just
seasonality right now behind that drop? it's pretty steep. also, how is that going to translate to prices at the pump? >> well, i actually think it's a couple different things. you pointed out the chart. the chart for gasoline is much weaker than it is safer. crude oil gasoline hit a low in september, that was lower than what we had seen in july and august. that's not the case in crude oil. also, we see fewer imports, less imports into the united states. and, yes, we import gasoline than we've seen since the middle of july. so there are a couple of things going on. i think we may have seen a bottom here in gasoline because of both of those. >> jim, do you agree we've seen a bottom or do you think gasoline can go lower from here? >> doi. if it trades 1.32 in the october contract, i'll consider that a sell signal. it's not just because of the remarkable consistency, it's also cause of weak dollar, widening can tan go means oversupply. >> more gasoline talk on the live show tomorrow. >> jackie, good stuff.
final trades are next after this quick break. we are just minutes away now from apple's big product event out in san francisco. just more than five minutes, nvt, all the breaking headlines coming up right on cnbc. we're back after this. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. [ala♪m beeping] ♪
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to predict the highs and lows of diabetes, hours in advance. and i am working with orreco to use biomarker data to boost the performance of athletes. hello, my name is watson. working together, we can outthink anything. jon and pete are both here, that means we have a double serving of unusual options activity today. pete, what are you up to? >> looking at starbucks.
i'm already in this position, scott. so i didn't have to add to it today, but i saw interesting activity. somebody going for very short term 56 calls that expire friday, buying these basically as a surrogate for stock. stock 56.25, paying about 55, 60 cents for these calls, looking for a nice little pop in the next couple of days into friday's expiration. keep an eye on this thing. we had the buying before, which is why i'm in. i'm out in november. i still think there's $60 on this stock by november. >> doc, what do you see today? >> look at fxe. this is guggenheim/euro hedged trust. and this one, judge, the stocks -- or that trust is virtually unchanged today and yet they're buying the 1.13 calls in december almost with abandon. it's a bet almost the fxe goes significantly higher by the december timeframe. it's a bet against what most of the street is doing, so that's why it's interesting. >> okay. we got about a minute and a half left in the show. the apple event is about to take
place. i asked this question yesterday and some of you are different than who were here. what's the headline going to be after today, doc, on apple? >> innovation. johnny and eddie haven't lost it. that's going to be the headline because -- >> this from a guy who was seriously questioning whether they still had that mojo. >> well, and -- >> you've said that on this show. >> i have. and i still think that those guys have the magic. let's see. >> pete, headline's going to read what? >> i think that they're able to step over the extremely low expectations that are coming in. because if you listen every one of these analysts including the analysts we had on earlier in the show, he sounded like the whole thing's going to be a big blob. if there's anything and they step over the top of it, that's the headline. >> i think the headline is going to be about the headphones and the bluetooth. i think you'll probably see the extremes on both sides, like, hey, this is great. they're doing something really bold again and innovative. and then people complaining, probably me, because i've invested in headphones with cords. >> there's always a backlash when there's something new. >> we'll see like a week later
the people that are angry will probably get over it. >> joe. >> strike about what's going ob in the next iphone, ten-year anniversary. >> already, today? >> yeah. >> you guys throw the stock back up if you wouldn't mind. there it is. just shy of 107 and 40. happening right now. power picks it up. we do indeed pick it up, scott wapner. thank you very much. you're looking live at the bill graham civic auditorium in san francisco. right now apple kicks off its annual product event, eagerly awaited, anticipated. apple ceo tim cook expected to take the stage at any moment. the excitement building all day long. this was the scene outside the auditorium just a few short hours ago. people waiting in line to get in on a crisp fall/summer morning. it is going to be a busy two hours, folks. we've got the best team in place to break it all down for you.
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