Skip to main content

tv   Fast Money Halftime Report  CNBC  February 24, 2017 12:00pm-1:01pm EST

12:00 pm
i looked back. the s&p was about 2300 last time, ten year was here. not a lockstep relationship but sending you a signal maybe there's at least a pause in the cyclical trade. >> good weekend, everybody. let's get over to the judge and "the half." ♪ >> carl, thanks. welcome to the "halftime report." i'm scott wapner. top trade this hour. markets big moent. stocks up 3% in february. with the dow setting a record close for the tenth straight day. longest streak since 1987. so why then is one of our experts saying a correction could be in the cards as early as next week? with us for the hour today stephanie link, jim lebenthal and the brothers najarian and kate morris at blackrock. let's begin with stocks. they are pulling back today. prediction of what might happen next. i don't know, doc, you're the one who thinks that you could get a correction.
12:01 pm
you've been bullish. >> i am bullish. >> you think we could get a correction next week. >> i think there are two catalysts. one, the president's speech before congress. that's the 28th, folks. >> tuesday. >> that will be in the evening. tuesday, in the evening. in other words, really the trading begins of course the first of march for that. i know there's after-hours trading of the s&p in particular at that time. but, what you had today was the president at cpac of course, judge. he threw the red meat out there. the audience loved it. he side i care about you guys. not about the globe. i represent you, not the globe. that's why he's been able to drag so many folks into the republican party. because the workers have listened to that rhetoric. he also talked about repealing obamacare. those two things, how far, are not going to be as big as his speech tuesday because that's going to be all about do we hear a lot about taxes like we did from mnuchin.
12:02 pm
>> if he thinks that cpac that he's speaking to because congress isn't going to be jumping up and down and cheering like cpac, that audience was. i don't think he's going to forget. but the repeal and replace obamacare as well as, hey, i represent you guys and not the globe, that isn't going to be as big for wall street as taxes -- >> you think the president needs to come with real substance. >> yep. >> -- on tuesday night. that the market wants to hear. >> mnuchin needs to do that and i think they want to hear about regulations. the roll back of regulations can keep this rally on track. then you've got the 15th of march. two potential catalysts in the month of march. the other one of course being the fed meeting on the 15th. >> kate moore, do you get the feel as some people have suggested that there is a sort of an overoptimism in the market? an overload of optimism around
12:03 pm
this ralry? >> people love talking about this being a trump rally but i think there's a lot of fundsmentals underpinning the market moves over the last couple of months and a sigh of relief and people have been willing to take risk. i agree that trump's speech next week needs to have detail on policy. if we don't get it on tax reform, if we don't get it on a regulatory reform, if we don't have a road map, i think that's when the market starts to say, okay, i need to figure out what i can price into earnings. >> you know, that's absolutely right, but let's point out we've been without a road map really since november 8th. we've been talking about this is going to come, tax reform, regulatory, roll back. all we've gotten really are distinct actions often the wall and the immigration ban. so the reason i'm pointing this out is, jon, i do think you're right. we should have a correction at some point in time. but the key words there, scott, are at some point in time. i don't know when. i don't know if it's when the tax plan is rolled out and somebody doesn't like something in it. >> we're trying to figure out when and what ultimately causes
12:04 pm
it. >> i don't think you can figure that out. and if i told you that it's -- that it's monday and he tweets something about i'm going to make this up, north korea, if i got that right it would be luck. not analysis. this is not an analytic point, when the market will correct. it will correct. >> i think so next week is important but i also think the european elections are important. i think that's what's driving rates lower. look at the ten year today. it's almost at new lows. but anyway, the point of it is there's a lot of uncertainty. there's a lot of volatility to kate's point, though, into volatility you want to be buying because fundamentals are improving. and the economy is not only here but globally, the economies are getting better. we get good data points just about every day but everybody is so obsessed and trump and what that means and valuations. i would be much more concerned fbt economies were not improvings if guidance wasn't as positive, if balance streets weren't as strong. >> you're buying stocks though.
12:05 pm
>> i am buying stocks. >> you're not overly concerned, cautious, or anything if you continue to buy stocks. >> well, i'm buying stocks that actually have gotten hit hard but where i think the prospects are pretty good. so i'm trying not to get caught up in the minutia because if i do i wouldn't buy anything. freeport ma mcmorran down 20%. improving balance sheet. i like the reflation trade as you know but i'm also buying mgm grand. down t% since reported. milan labs. no one likes those names. i'm starting to pick at that one. i'm just looking for where there's opportunity and where the stocks have corrected and where i think fundamentals going forward will improve. >> we're look at strong fundament fundamentals. i agree. strong earning season, i gragre. you want to find something out there, scott, i don't think it's just about trying to find value. why not find value with growth and we've done that and those are the areas that have
12:06 pm
performed. look at how the financials have been performing. look how technology has been performing. i think you can stick with that and there's opportunities every single day. as steph is talking about other areas as well and what we're seeing is every single day, used to be quarterly. used to be yearly. then turn quarterly, now daily, the rotations. we're seeing semi is having a great day and then not having a great day. there's rotations very rapid in this marketplace. but that's also why i think we're hitting these record highs almost daily. today's big pullback is 47 points. 47 points on a market that's been screaming up how many points since trump got into office. >> are you suggesting we don't think we're right for a pullback? >> at any moment, to jim's point -- >> over bought and then say, i don't care, overbought doesn't mean over. >> you can stay overbought for a long period of time. >> i think the reality is that at any moment in time there could be something that obviously triggers this to pull back. fundamentally right now and you were saying that as well,
12:07 pm
fundamentally right now whether you're looking here or globally it doesn't look that bad as much as everybody wants to say we've got to get that correction. >> bigging in buying the vix, for instance, buying in april. buying april call spreads and things. why? koch nati combination of tax policy. >> $11. that's why. >> cheap. >> cheap. >> it's cheap. >> buy when you can, not when you have to. >> it's been cheap for weeks, months, and they haven't been buying as aggressively as now. big iwm spread. puts spread bought in there. upside calls sold. those are hedges. like i say, these are not straight out bearish bets. they're hedges because nobody is selling 2.5 million ibm naked. >> we are talking about the u.s. market which is important and a number of catalysts or big events over the next few weeks but one thing we've focus and outside of the u.s.
12:08 pm
yes, there's a lot of fear being priced into the european equities even though we're getting a little bit of in turn in terms of earnings thankfully after six years of real malaise. we've seen as we're talking about a global reflation trade and actually lots of good companynd macro data around the world so we would say when we're looking for value and opportunity, let's see where outside of the u.s. we can have a good structural and cyclical tail wind. >> some are not giving up on the u.s. rally just yet. citigroup says there is something that could fuel the rally enfurther. robert buckland is the chief global equity strategist at citigroup, live with us from london. bob, good to see you again. >> hi. >> you say animal spirits are alive and well and in no sign of abating. >> yeah, i mean, m&a activity is a key contributor to bull markets. we saw that in 1990-2000. we saw it in 2000, 6-7. the percentage of global market
12:09 pm
cap that has taken out any time, any year. that number hit around 9% or 10% in 1990 to 2,000. it hit around 9% in 2007. it's currently only 6%. so the companies have not really piled into this bull market yet. >> do you feel that the u.s. markets right for a correction or not? >> markets never go anywhere in straight lines. far instance -- >> this one almost has since november. >> they don't -- yeah, that's four or five months, right. our target is only 3% above the current level for the s&p. that is suggesting to us u.s. strategies thinking probably rather buy into bit of a setback. on a 12-month view we're bullish. but buy it maybe right now. >> when you look at this market, it's jimlebenthal, by the way. this looks like a classic stair
12:10 pm
step of 20 years ago. you went up after the election. paused in december. it was basically flat. we've gone up in january. we're kind of trickling higher but mostly pausing here. you know, when you look at that do you see that continuing through the end of the year or is there -- can you see a hiccup coming to the upside i think it would be hard to predict. but to the downside there are so many pitfalls out there, particularly with regards to policy. >> absolutely. we think that globally the big risk to markets from here is the bench election in april and may where potentially we could have an anti-emu candidate win that election. that's the major global risk out there. whether that -- that's going to hit every equity market including yours if it occurs. >> so just so i'm clear what's your target for the end of the year? >> our target for the s&p for the end of the year is 24, 25. that's as i said, only 2% or 3%
12:11 pm
where we are now. >> bob, good to talk to you. appreciate it. bob buckland of citi. how does it fit in? >> some of it makes sense. when they put this target out there the market was well below here. they're sticking with what their call was which was something north of 2400 on the s&p. because of the run there's not as much room. so that says to me we'll still see rotation within, a little bit of a rise, but i don't know necessarily that you can be an absolute raging bull right this second. >> are you -- do you agree with the whole m&a sort of thing, animal spirits taking hold and propelling the markets further because the companies are going to do deals? >> m and a would be a great indication of animal spirits returning. but we need to see lots of other activity as well. we need to see lots of r and, in. we need to see growth productive cap x. we need to see even more hiring i think to indicate companies are feeling confident. as we were talking about we don't have the policy program in place yet. >> you could actually make a
12:12 pm
case that companies are more confy decon con confyfy dent. we've been hearing from companies coming to our office, that since december companies small, medium businesses and large businesses are much more confident since there's a pro-growth potential. >> all you need to do is listen to what they say when they come out of the white house. >> one after another from industry after industry. >> i think that's a good sign because i think that is going to lead to better business investment. this cycle has not had any business investment. so we would all be very much welcome to see something like that. i would also just say that within the market what's happening is you're starting to see this rotation. so it's starting to broaden out so it's not just the cyclicals like we've talked about ad nauseum. it's actually health care now. it's actually consumer staples. look at utilities. they've actually done very, very well. i think that's a healthy sign and maybe that's just what we need. maybe we rotate, we don't have
12:13 pm
to have a big massive sell-off. we have this rotation that happens. >> we have seen that big pick-up in sentiment indicators. across the board, small and medium size businesses, large businesses and private corporations all kind of saying the same thing. what we want now is follow through. >> sure. >> we can't tell if some of the announcements in inactivity are bringing forward activity already planned to apiece the new administration or if we're really talking about a step change in terms of spending money and investing. that's where i'm holding off judgment until we get to the middle part of the year. >> in terms of your rotation that you mentioned, we haven't enseen, have we, the biggest rotation of all and that meaningful move from bonds into stock. look where the yields are. >> absolutely true. >> right back down to 232. >> that's a function of the concern about the european election. that's not like -- >> that's netanyaherlands about pen and merkel now trailing for the first time. >> ten year is 232. >> i know.
12:14 pm
it's up. >> 0.6%. kate, 0.6% or 0.5%. we're in that range. that's what's anchoring this down. what you can see, scott, if the fed does make more interest rate moves, that people forget about the international bond markets and they just focus on where short term rates are here in the u.s. and where the yield term -- >> if people are getting more nervous about the state of the equity rally. >> i don't think so. look, we're talking a lot about a correction here. any good adviser is going to tell their clients don't try to time a correction. you can't. now, what we're not talking about is a bear market and why are we not talking about that because there's no indication of a recession here in the u.s. or anywhere in the globe. you've got strong labor market. you've got all sorts of industrial surveys shooting the moon now. philadelphia fed was crazy last week. there's no sign of a recession, hence, no bear market. new at noon today, veteran short seller andrew left is making a big move and joins us now on the phone. andrew, are you there? >> yes, i am. hi. >> it's good to talk to you.
12:15 pm
your move is you have covered now your nvidia short all together. you think that that's run its course? >> well, december 28th i suggested when nvidia got to 119, i thought the move was a bit overdone post-earnings. so i thought at the time it was a good short. thought it would trade closer to $90. this morning it was close to $96. i thought obviously you can't hit everything on the head. if somebody wanted exposure in the area right now as a short it's not nvidia anymore at 96 but a focus on mobileeye. >> which is a stock, by the way, you've already been short. you took the profits, i guess, from nvidia and rolled them into what is now a larger position in mobileye. >> what i discussed the mobileye short i compared it against against individualia. >> we're watching a mobileye at $47 and change. do you have a price target on
12:16 pm
moblieye? >> short term, $35 number. obvio obvious. a one trick pony. you're so much better off -- you can even buy google and get that whole area for free after the search, alphabet, that is. obviously nvidia has also dedicated significant amount of resources to autonomous. unfortunately it's not just me. i put out a note today on twitter and you can see, follow the insiders. when you're insiders sales are so much greater than even your r&d right now mobileye is bringing a knife to a gunfight. they're a first mover, no doubt. first million miles that they acquired very valuable and that's why they were able to go ipo. but since then, everyone is caught up to them. their management knows it. look at the amount of sales. and now they say last quarter we might have to invest more in r&d. that's something they should have thought about two years ago
12:17 pm
as movements for autonomous has happened so fast. >> are you looking for more short ideas as we speak? do you feel there are more opportunities that are right for the picking just given where the market itself has gone? >> i mean, good question. the answer is it's -- when i hear your show, it's, yes, but you have to be patient. you have to scale into the opportunities. you have to be short a stock that you want to short higher. when an eventual and inevitable correction does come, you will get paid. but you have to be prepared to take a lot of pain in the meantime. >> pete najarian has a question for you. >> andrew, i agree with you when i see all that insider selling obviously that tells me a little something. when but when you see the revenue growth and the percentage about 70% of autonomous is what they own right now. is your fear or your conviction is that they are losing that, two others in the space right now? >> 70% of oautonomous.
12:18 pm
the advance driver safety. it's a big difference. autonomous, the level that we're looking at at future is where they're not. the contracts they have right now, revenue growth is coming off a very small base. so obviously you're going to see that type of growth. okay? but the contracts they have right now, what we see in last quarter were things put in a year, two years ago. if we look towards the future and how this company is priced, it's all about the future. and if you look at the future, they are not even close to being the leader in autonomous. every single deal that investors got excited about over the past few months with mobileye, intel, volkswagen, or bmw, nvidia has deals with them as well. for anyone to think that mobileye owns the future of autonomous driving is an uninformed person. >> they are not taking the move we're watching as we speak down 2%. that stock is up 24% since the election. that is mobileye. it's up 61% over the last year,
12:19 pm
reflecting, andrew, the optimism that investors have had not only in this space but in this stock in particular. >> well, it's optimism that investors have had in the market. and it's sometimes just a blind optimism. for people who are detail oriented and just go read about it and understand where it is, you have to give them credit for saying, hey, awe on the mousz is the way of the future but then everyone has just leap frogged them. it's not even close. and you can just look at it in the r&d spend. you can look at it in the new install base for where autonomous is going and, like i said, the key thing, nobody knows the company better than the ceo, better than the insiders. look at the size of the company of nvidia and amount of insider sales on a gross basis is significantly lower than we see in mobileye. when the ceo sells more in stock in a year than the company invest in r&d investors should be weary. >> yep. andrew, appreciate the time.
12:20 pm
thanks for coming to the phone today. >> have a great weekend. >> you do the same. andrew left of citron. do you want to take both on as to whether you think that the -- enough damage has been done to the stock price of nvidia where now it's time to maybe get positive again? maybe atit's a neutral. what do you think? >> this one, i haven't seen it perk lating on our heat seeker, judge, as far as to get me excited about it. if i had shorted it at the top i certainly -- which andrew nailed it, when i certainly would be covering here because i think he's got a lot of profits. but i've been in for just slices of that drop, not the whole drop. so i got no interest. >> what about moblieye? >> we've been talking about this for a while now. the jamie dimon bottom. >> have you been in that stock? >> i have been in that stock and got fortunate in there and missed this big run to the upside. according to what he's talking about now it makes sense that everything he brings up when you see the insider buying, when you
12:21 pm
see them losing some of that -- what they had in terms of that space and they owned it and now all of a sudden he says the intels and nvidia of the world takes over, that does make you nervous. insider selling is just as telling. here's what else is coming up on the "halftime report." >> a bold call on goldman sachs after the mondaymental post-election run. up 36% since election day. do you want to go with the analyst who says sell or stick with mr. blankfein and keep on riding? also ahead. road rage. shares of tesla having a bumpy ride this week. down 7%, while gm is flat. jon and jim are ready to go head to head on this trade. the "halftime report" with scott wapner and the gang is back in two minutes. my business was built with passion... but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one.
12:22 pm
with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet?
12:23 pm
ways wins. especially in my business. with slow internet from the phone company, you can't keep up.
12:24 pm
you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. we do expect to hear in the president at the white house following his return from c park at the national harbor. here's donald trump. >> the biggest in the world in terms of manufacturing and business. some of the people involved are ken fisher and ken frazier, chairman president ceo of merck, alex gorse i can, chairman, ceo of johnson & johnson, marilyn and she has been very tough to
12:25 pm
deal with but that's okay. she's a very tough noeg eighter. president of lockheed martin. gregory hayes, chairman, ceo of united technology. andrew livers, chairman, ceo of dow chemical company. mario longy, president/ceo united states steel corporation. juan, chairman and ceo. denise morrison, president of campbell's soup company. lee styleslanger iii,chairman/ceo of alte inc. mark sutton, international paper. and ian, chairman of 3m company and we have made tremendous progress with these great business leaders, amazing progress. they're getting together in groups and they're coming up with suggestions about their
12:26 pm
companies and how to bring jobs back to the united states. and i think it will be a fantastic day for the country and we met yesterday and met with these folks and some more excessive regulation is killing jobs, driving companies out of our country like never before. i must say i think we've stopped it to a large -- large part, marilyn, right? >> right. >> we reducing wages and raising prices. i've listened to american companies and american workers. i've been listening to them for a long time. i've been listening to them complain for a long time. but today this executive order directs each agency to establish a regulatory reform task force which will ensure that every agency is a team of dedicated and a real team of dedicated people to research all regulations that are unnecessary burdensome and harmful to the economy and, therefore, harmful to the creation of jobs and
12:27 pm
business. each task force will make recommendations to repeal or simplify existing regulations. t regulatory burden is for the people behind me and for the great companies an impossible situation. we're going to solve it very quickly. they will also have to really report every once in a while to us so we can report on the progress and so we can come up with some even better solutions. this executive order is one of many ways we're going to get real results when it comes to removing job killing regulations and unleashing economic opportunity. we've already issued an order which says that for every one new regulation, two old regulations must be eliminated. so that in itself is going to be tremendous. but what we're doing is much more than even that. every regulation should have to pass a simple test. does it make life better or
12:28 pm
safer for american worker or consumers? if the answer is no, we will be getting rid of it and getting rid of it quickly. we will stop punishing companies for doing business in the united states. it's going to be absolutely just the opposite. they're going to be incentivized to doing business in the united states. we're working very hard to roll back the regulatory burden so that coal miners, factory, w workers, small business owners can grow their businesses and thrive. we cannot allow government to be an obstacle to government opportunity. we are going to bring back jobs and create more opportunities to prosper, maybe more than ever before in our country. we've made tremendous strides over the last period of time. this is, i guess, we're four weeks into it. i think for four weeks i've done a good job, wouldn't you say? >> yes, sir. >> but again, i want to thank these great business leaders. so much of them are with us in the white house and they've had
12:29 pm
tremendous success. reid and jarrod and so many others and in business and they are helping us sort out what's going on because really for many years, even beyond -- long beyond obama, president obama, i will say that it's been -- it's been disastrous. this is going to be a place for business to do well and to thrive. and so with the signing of this executive order, i would like to just congratulate everybody behind me and, andrew, i would like to thank you for initially getting the group together. fantastic job you've done. >> thank you. >> should i give this pen to andrew? dow chemicals. i think maybe, right? >> well, the president of the
12:30 pm
united states yesterday or andrew yesterday of dow chemical you saw getting the pen there. he did say that this was the most pro-business presidency since the founding father. so perhaps in return for that statement he gets the pen. as the president signs an executive order today on regulatory reform. flanked by a number of ceos also there among the two dozen who are at the white house yesterday. you saw there andrew of dow, alex of johnson & johnson, marilyn houston once again from lockheed martin surroundsed by many those as well. eamon javers, you're at the white house? >> some of the ceos are going to have to open permanent offices here at the white house. they did not tell us that these ceos were coming back today for another round with the president. but cheerily a lot of them wanted to be in the room for that particular executive order signing. what the white house is telling us about this executive order is that it requires every single federal agency to establish a task force that would then go through the agency and look at
12:31 pm
all the regular lagsz tions and eliminate costly and unnecessary ones as they can. that squares with what one of the ceos told me privately leaving the white house meeting yesterday here saying that the president had asked him and all of the ceos he dealt with yesterday to come up with a list of ten regulations each that each company would like to see eliminated. the white house said they would consider all ten of those for eliminati elimination. clearly the business community here very excited. the president has also said today he wants regulations. he doesn't believe in eliminating all regulations but up to 75% of them he feels are unnecessary but he does want strong environmental regulations and other things. none the less, they're hope heaping a lot of blame on the obama administration for piling up too many unnecessary and costly regulations, scott. >> president eamon who likes to be surrounded by ceos and at the oval office as well. >> he's asked all of these ceos to come back quarterly for this manufacturing group here yesterday. you saw the photo-op here in the
12:32 pm
oval office today. the question is, beyond the photo-op what are the ceos saying inside this white house in private? clearly there for more than just the picture although the picture is a highlight today. what else are they asking this white house for? that's going to be the subject for reporting here and we will try to find out if each of these companies are in there talking a broad game about the overall u.s. economy or if they're in there pitching their own book of business and specific narrow interests each company has with the federal government. >> maybe the pictures worth a thousand or a few thousand points for stocks as well since the election. thank you so much. eamon javers on the north lawn. the business optimism. >> yes. >> you see it in the oval office and wherever else the president has decided to have the ceos come into the white house. >> i was surprised it started back in december. so quickly after we got the election results. it was so instant. it had -- we had heard from so many different companies that this was the theme. so i think this is very positive. and i'm not underestimating it.
12:33 pm
i really do think this is going to lead to better growth, better business investment which is exactly what we need for the next leg of this market. >> stocks are given a little bit back today. dow is down 35 points. 20,775. within that, financials are pacing for their worst day in over a month. led by goldman sachs after being downgraded to a sell at barrenberg. they did raise to $190. we made it our call of the day. not much you see doc goldman get hit with a sell. when it does, you've got to pay attention. >> you can't blame them. looking at the graphs since the election, 38% out of goldman sachs. a lot of it deserved and you is certainly understand people saying in a three-month period that's an awful big run. i don't mind stepping to the sideline or neutralizing it with puts. >> 36% since the election for goldman bank is 42%. jpmorgan, 28 1/2%. morgan stanley, 33 1/2%.
12:34 pm
go on and on. >> year to date, goldman has lagged morgan stanley and jpmorgan. if you're going to peck on one i'm not sure this is the one to do. i'm think there's more they can do. people underestimate the technology at this company and how efficient and productive they are. i do think they've done a good job in terms of cutting costs group still have operating leverage. without the rate story. i wouldn't be selling. i wouldn't be selling any bank right now. >> to the point steph hit at the top of the show when she talked about the elections and pressuring rates and things like that, obviously pressuring the euro/dollar and other currencies around the globe. and that is something that goldman will benefit from. the trading, the hedging that goes on there. >> the trading was i 25% year over year, right? at goldman sachs. it's interesting because not to bash this analyst so much, judge, but he went from a neutral to a sell and price target at 140 to 190. stock is nowhere close to any of
12:35 pm
those types of things. it's really difficult to say, you know what, i'm going to listen to this analyst because he's been right the whole way. he has not been right. not even close to right. >> isn't it a relevant broader question as to whether stocks that have been up 28%, 36% and 42% -- >> trades barely -- >> ring the register? >> multiple over one right now when you look at it, where i think there are better opportunities in financials? i do. i like goldman sachs. it's had a huge run in front of it. bank of america now trades value of book. >> what is oh sxwloe the citi. citi and where it trades percentage wise, that board you had up there, it was the lagger of the big banks up in. >> it's only up 27 1/2%. >> right. but i still think that there is something, there's a reason why they've lagged but that doesn't mean they can't play catch up as well. >> best name in this group? >> sun tretrustsuntrust. it's off the radar screen.
12:36 pm
i own all of these. >> regional than big? >> i do. it's trading at 1.2 times price to book. they're doing a good job in terms of cost cutting and improving their fsht si ratio. they made management changes coincidentally today that helps them achieve those efficiency targets that they are looking to do. they also have been i proving balance sheet. returning it to shareholders. so i think that's a big theme still yet to play out in the banks. that all of this cash they are generating gets returned. >> do you think it's time to take profits here? >> no, we're bullish on financials. it's been a call we've had in place for some time and we're going to continue to say that financials should out perform the market. we think over the balance of 2017. the three tail winds and three kind of drivers are still in place. getting steeper yield curves. maybe not today -- >> when? what do you mean, not today? >> 235 on the ten year. >> we're expecting rates to move up gradually throughout the balance of the year and this is going to be a good environment
12:37 pm
actually for net interest income. plus, we're in a good global growth environment we keep talking about. if we have good growth, better activity and then i think an echo of what we just heard from the president, right sizing regulation across the board. if we're past peak regulation for the banks, smaller and regional banks or big banks, i think that's very good news. >> if rates aren't moving, the fight over dodd-frank is going to be ugly. >> it's rates are not moving today. >> catalyst. >> you know, you have to take more than one day or one week kind of view on this. >> i am. i'm taking like months worth of view. >> it's also positive is the tax reform because they pay a lot in taxes. and that is happening. so there's some pieces that aren't happening but then there are other pieces that are. i think if you look at it as a whole there are more plusses than minuses. and, yeah, rates, they're being influenced by other situations at this point. maybe we have to get past march and april, may for if rates to go much higher.
12:38 pm
>> let's do our trader blitz now. jim, you look like you want to say something there, jcpenney. a miss on the top. now plans to close up to 140 stores. >> didn't miss by much. less than 1% from where estimates were on the top line. beat on the bottom line. i thought they guided very well for the coming year. >> why is the stock down 6% then? >> you know, scott, there's no good oons for that. i'm going to tell you bluntly. i think the market is getting it wrong. i think this is a great buy here. they have about a billion dollars last year. $1.1 billion this year, ebitda. they've got a market cap of $1.9 billion. those two numbers don't compete. the market cap should be much higher for that amount of cash flow generation. just give it time. today is nonsense. >> okay. nonsense. doc, foot locker, best day since august of '16. comps very strong. the stock reflects it up. up 10 sgl%. >> even with cautious statements about how the outlook looks, the quarter was just phenomenal. and so a big beat.
12:39 pm
and same-store sales up 5%, judge. just a strong quarter out of foot locker. >> speet, restoration hardware. look at this stock today, up 28%. >> and this is one of those names we have for activity on february. buy back is 300 million on that side of thanks. guide aga guidance was strong. stock is up. on the lows. but a great move in the last month and a half. >> what do we say, judge, when we were talking earlier in the week? where are values? ralph lauren and restoration hardware. look at this one today. 28%. it's got 40% short interest and those guys are -- a squeeze. >> -- not getting any ice cream this weekend. >>ing looking for props on that? is that what you're fishing nfo? >> we'll give you props. >> great call. >> hewlett-packard enterprise, missing revenue forecast. cut their guidance, too. >> this is a mess. talking about lack of execution and when a management teams says they didn't execute well i think
12:40 pm
you have time to buy even though it is cheap at 11 times, i think it's past its prime. >> all right. look at shares of tesla down almost 6% this week. we have a road rage debate on our hands. >> wow. >> doc, you're the bull. >> yeah. >> who says that's bull, you know what. >> i know he does. >> put your money in gm instead. >> here's why you like tesla. it's elon musk. two, it's elon musk. three, it's elon musk. those are three great reasons. i'll take them. and i'm reading this new book right now "the biography" and i love it. also they don't have the legacy cost, scott. we talk about it a lot as far as i'm not saying gm, ford, chrysler need to dismiss the obligations they took on when they negotiated the contracts that they did. not saying that they grid rid of those obligations but those obligations cost them thousands per car. elon musk does not have that legacy cost with each of the cars he sells. and he sells basically the
12:41 pm
iphone of cars. apple didn't invent the cellular phone. they just made it a lot better. that's what he does with tesla automobiles. >> jon? >> yes. >> you're out of your mind. i love you but come on. all right. i'll grant you that elon musk is an awesome guy. >> yep. >> look at the market caps. roughly the same. and tesla produced 100,000 -- going to produce probably 100,000, maybe 125,000 cars this year. gm is going to produce 10 million cars. i'm not going to do -- >> it's profit. >> i'm not going to do what you expect me to do and highlight six times earnings versus 150 times or 8 billion in free cash flow versus negative free cash flow. i'm going to give you a new way of looking at it. for every car sold the market cap in gm is $5600. you know what it is for tesla? $336,000. that's what the market cap is. 60 times more valuable per car produced. that better be one heck of a car. i'm going the tell you it's not. as greats a elon musk is, he has
12:42 pm
10% of the electric vehicle market. the traditionals have the rest of it including gm, including bmw, including honda. i just don't see -- >> i like the volt. i like the bolt a lot better than if volt, judge. and it is "b" bolt, right? versus "v" volt. neither one of them can compare with the tesla. when the model three comes out, judge, at around that $30,000 price point, even better. >> what was that? come on. it's you and me. >> he's the judge. >> volt and bolt. >> i love what he does. >> he has a unique ability to put himself into a cork screw after -- >> and just keep going after he was fine. >> musk, musk, musk. >> i tell you, the interesting part for me on tesla is the fact that elon musk addressed the two elephants in room. production of the model three and he said, you know what, this thing oh. >> what's the other one? >> their financial situation which is they're going to have
12:43 pm
to probably raise cash again. >> because of? >> right. because of the solar city acquisition. >> right. >> but -- in the past that has been actually a catalyst for them on the positive side. >> which only was losing a billion dollars a year when they bought it. >> they don't worry about the cfo? >> yeah. well, you know, we've got enough. >> lack of cfo. >> let's not pile on. >> okay. since the election the trump trade has been working. dow, s&p, nasdaq, russell all near record highs but there are stocks left out of that run according to eric chimy. >> there's no doubt stocks are in ral i mode and this rally has had two phases. phase i, between election night and inauguration with phase two between the inauguration and now. most stocks up in both periods. almost all the rest are up in one of the phases. but a few stocks have stood out dropping both after the election and again after the inauguration. so take a look at some of the big household names not getting
12:44 pm
the benefit of a rising tide. you've got ralph lauren, nordstrom, l brands, under armour, gap, a lot of household brand namesed. and even things like michael kors, mattel, qualcomm, expedia. it ranges across industries. you see general mills there. it's not just these companies, a full 28 companies in the s&p 500 have been losers since the election and again since the inauguration. >> and the aforementioned eric chemi is here. >> the question i have for traders is you look at 28 companies. we know about interest rates hurting the dividend plays but are these value trades to come or is the market rightly just saying forget these 28 companies, we got 472 to work with, we don't need these? that's my question for you guys. >> a lot of these companies it stands out they have company-specific issues. right? and so you want to make sure that you can -- >> very well known names on that
12:45 pm
list. show the wall again, guys, please. >> love hormel. ralph lauren i talked about. >> gilead, nordstrom, ralph, qualcomm, mattel, general mills, gap, under armour. >> they all have something in common. each of them have an issue. they're not just cheap because yields were going up and no one wanted the yield plays. >> you see a lot of them, food companies, a lot of companies just didn't make the list like tyson foods, coke is bauer lbar positive since the inauguration. >> what about the idea that to chemi's point and the stock on the list, if you say there's a number of retailers, the ones hit because of the border tax conversation, if that is doa and goes away, do some of these stocks get the lift, thus making them the good values to be in now. >> i would say the easy answer to that is yes. now, there are names up on there that have nothing to do with order tax and stock specific. under armour, struggle, trying
12:46 pm
to compete. putting money into that what they're doing. >> the over hang of the border tax. >> when you look at the other names, absolutely, scott. if you eliminate that or tweaks to that whole thing, absolutely that's going to be a tail wind for some of these names. >> the department stores are structurally in secular decline. listen to every one of them including nordstrom. >> but with nordstrom the one argument i would have become with you would be, hey, look, they are growing incredibly well in terms of rack and online. >> i know, but still. >> those elements. >> jpmorgan. >> 7% in their stores. that's just huge numbers. you can't get people in the darn stores. >> big stores for the most part expand og the rack side and expanding online presence. doing the right thing. >> matthew boss, jpmorgan, told us earlier this week, maybe even late last week, wouldn't buy -- wouldn't touch a department store. >> they're hard. >> none. >> it's hard to do. truly is. and when other parts of retail have gotten hit and look
12:47 pm
attractive like a costco or a nike, with good strong fundamentals, those are the ones you want to buy on the dip, not the struns structurally and secularly in decline. >> jimmy, thanks. >> sounds like she's not a buyer. not a value trade for stephanie. >> there's one of them i was buying. >> eric. pete striking unusual options activity on an etf up almost 10% this year. what is it? we'll tell you next.
12:48 pm
i can't wait for her to have that college experience that i had. the classes, the friends, the independence. and since we planned for it, that student debt is the one experience, i'm glad she'll miss
12:49 pm
when you have the right financial advisor, life can be brilliant. ameriprise sometimes they just drop in. always obvious. 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.
12:50 pm
all right. warren buffett taking your questions on "squawk" on monday morning. use the #askwarren. starts at 6:00 eastern on monday morning. becky will be with the . caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim. the global investment management businesses of prudential
12:51 pm
12:52 pm
welcome back to "the halftime report." i'm jackie deangelis.
12:53 pm
crude oil falling nearly 1%. scott nations u.s. production, 9 billion a day. is that the biggest problem for oil right now? >> i think the biggest problem for oil is 519 million barrels in stockpiled, the biggest stom stockpile, highest level since 1982. if there is any good news it's that we saw the smallest build this year. it's tough to see because we have so much crude oil. but it looks like opec is finally turning the tide with their production cuts. >> brian sutland, what will it take for oil to break out of this range? we've gotten very close to 55, but can't get out. >> right. we are stuck in this range, top side of 57 going back a couple of years is where we're at here. it will need a change in the demand curve. we've seen the supply side, meet and bump up against opec and russia. somehow they've all come to the same page. everybody is happy right now. everybody is making money at these levels. this tight range will continue.
12:54 pm
57 is probably the high. i'll probably be a seller more above 55. on the downside, that train continues to be up, high or low. so, 52 is probably an area we look to buy. >> for more trade ideas, head to more "halftime" after the break. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on
12:55 pm
all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet? companies across the state are york sgrowing the economy,otion. with the help of the lowest taxes in decades,
12:56 pm
a talented workforce, and world-class innovations. like in plattsburgh, where the most advanced transportation is already en route. and in corning, where the future is materializing. let us help grow your company's tomorrow - today at
12:57 pm
two najarians on the desk. >> started in december, then more at the very beginning of february. buying out to april. now they're going all the way out to september. september 127 calls aggressively bought in the gld. open interest was 127 coming into today. so, somebody is paying $3.10 that gold is not at the end of its run, scott. this run will continue all the way up into the fall. >> gold is at $12.57. >> yeah. >> i wonder what the message in all that is. people are calling calls in gold. >> right. >> you've got yields not moving. and stocks at all-time highs. >> some sort of protection? who knows. so there's room. >> doc? >> nuskin, judge.
12:58 pm
nus. at 509 strike. stock had a big drop in the last month. fell off a cliff from about $55 down a share down into the 40s. big up move today. on the up move instead of betting on more, they're buying puts. >> including you? >> including me. they paid 6%. to me, judge, that says somebody is really cautious and doesn't see much upside. >> markets close in about three hours. the weekend is in three hours. for us. steph? final trade. what have you got? >> eli lilly. great drugs, good pipeline and an operating margin, going to 30% by 2020. as the organic growth can grow 5% to 6%, you've got operating leverage. >> jimmy? farmer jim. >> pharma jim. >> okay, pharma jim. >> very clever. >> pharmaceuticals.
12:59 pm
>> quicker. >> you know, a month ago, month and a half ago, we were talking about pharmas. they were left for dead, talking about pricing controls. nobody has been talking about them. they're slowly percolating higher. look at pfizer, merck. everybody is focused on everything but drug prices. let them rally. >> did i say you were getting quicker? >> you did. >> doc? >> l brands, lb. horrible earnings, stock down 27% on the year. as of yesterday. big rebound today, however. gary cohen's comments as well as the president's might be helping to drive that. watch this one. >> completely disagree with the downgrade of goldman sachs. it's an opportunity. stock coming off its high end. what's interesting is january 18th, they blew the numbers out. and that's what we're looking at right now. any favorableness going forward, great. >> less than 20 seconds.
1:00 pm
my final trade, as i normally throw one is spy. because we'll be watching next week to see if doc's thing comes to fruition here, depending on what happens with this speech tuesday. what are you watching? ten second. >> emerging markets still. big upgrades. valuations are not demanding. i don't think the dollar is ripping this year. >> for blackrock. that does it for us. "power lunch" begins now. welcome to "power lunch." i'm melissa lee along with brian sullivan and tyler mathisen. retail etf, xrt, chief economic adviser gary cohen does not support the house version of the border adjustment tax. the man who broke this story, dan primac. welcome to the show. what did you find? >> gary cohen spoke in front of the u.s. business council, group of


info Stream Only

Uploaded by TV Archive on