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tv   Fast Money Halftime Report  CNBC  January 9, 2018 12:00pm-1:00pm EST

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>> just a lot of information meanwhile, markets continue their tear dow is up 118. we mentioned earlier being led obviously by the higher priced stocks boeing at 315 is up 99% now over the past 12 months. >> the ten-year yield hitting the highest level since march 17th so another one to watch for show. >> big show on "the half "let's get to the judge. and welcome to "the halftime report." i'm scott wapner we begin today with a cnbc exclusive. the group of investors targeting apple over the iphone's impact on children. jana partners along with the california statement teacher retirement system bert known at calstrs sending an open letter to the is capital gain it's not address the issue enough, apple responding to the criticism and promising new features are coming john is managing partner and barry rosenstein is here along with charles person, a partner at jana as well. we're also joined from california by the director of corporate governance for calstrs
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ann sheehan. welcome to you all. >> thank you. >> i think the question on everyone's mind today is why apple? of all the companies out there, why apple? >> why apple >> apple is unquestionably a remarkable company, most valuable company in the world, and -- and a very responsible company, but there's no question that we need to be more responsive to children's needs and children's activities, and there's lots of research that has indicated that excessive usage of smartphones is damaging to kids, and so, you know, this should be an easy fix for apple. apple, in fact, came out with a press release as you saw this morning that i was very encouraged by. they indicated that they acknowledged that there's an issue, that it's an important one and that they expect to
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further improve their interactions, parents interactions with the kids' phones. >> you could perhaps take their statement though as a why us maybe you guess have targeted the wrong company, that we're already doing a number of these issues charlie, from my sources apple was blind-sided by this, suggest that they are at the forefront of this. apple, quote, has always looked out for kids we work hard to create powerful products that inspire, entertain and educate chin while also helping parents protect them online we lead the industry by offering intuitive parental controls built right into the operating system and think deeply about how products are used and the impact they have on the people and people around them we're committed to exceeding and meeting our customers' expectations, especially when it comes to protecting kids you're suggesting that they don't. >> no. it's really a two-part question. there's, first of all, why
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apple? >> you know, first of all, they are a leader in both innovation and kind of setting a standard for the industry, an -- and, you know, it is not part of their business model to encourage overaccuse or kind of improper usage the same way it is arguably for a facebook or a twitter. it's actually part of their business model to get people to bite phone, be really happy about and it be excited about the next one that comes out. i think also you have to move away from issues of fault here you know, apple is not responsible for global warming either, but they have a great policy on climate change in the same way that if you see a kid suffering you don't say that's not my fault and move on if you're in a position to do something about it you do why do you think that the controls that they have right now aren't enough? as i acknowledged last night in the statement they will have new ones coming out. one as barry said they are not front and center and integrated into the setup of the phone. two, they are not really what the research would suggest is effective.
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they have very binary. it's either on on off. the research suggests limited levels of use, actually not only harmful but probably beneficial. kids use their phone for an hour a day have more positive mental health outcome that kids who don't use it at all and even within the most problematic usages like the one you mentioned in terms of social media sites that people are the most worried about, even within those categories there's graduations so, for example, young adults who go to more than three social media sites a day have worse mental health outcomes as you get older, the negative impacts that we're seeing with social media actually start to phase out and are gone by the time you are 30 so you company kind of phase that out as well so the basic issue is that the controls are good and we applaud them for having them and since 2008 a lot has changed there's more research out there, and we think that the controls, and these would all be optional for parents to choose to use or not to use and can be brought up to date to align with the research and also the developments and technology.
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>> plus, you know, they cite apps that are available, and there's so many apps, and, you know, nobody really knows the research upon a lot of these apps are based so parents need help, and, you know, i will tell you based on the response we've gotten with hundreds and hundreds of e-mails and letters and -- and phone calls yesterday and "the wall street journal" told us they have never had a response like this to an article, i just think there's overwhelming agreement in the general public about the need for this. >> you would admit though, charlie, would you not, that the controls that they do have on the iphone are very easy to enable, for parents to enable and there are a number of controls >> we'll show as we have this conversation, a producer demonstrating on an iphone how
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easy it is to go to the settings and general restrictions and how many settings you can actually enable on the phone. >> but look what you're actually doing on that. you're flipping things on and off. that's, again, not -- there's actually research out there from a researcher named alexander samuel who actually shows that parents who just focus on restricting screen time as opposed to guiding it, their kids actually have worse outcomes in terms of engaging in inappropriate behavior like finding obscene material online and pretending to be other people online than parents who actually guide their usage so the actual kind of on-off binary approach is actually the really wrong approach think of all the other things for youion can do. for example, when you go to sleep at night, a lot of kids are having trouble sleeping because there's a blue light that shoots out of your phone that tricks your brain into thinking it's daytime. you can shut that off on your phone. can you do a lot of things on your phone, but having all these kind of different promises, and
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as barry alluded, to we've got hundreds, maybe thousands of e-mails yesterday, 50 from app developers for other ideas one app that somebody has proposed where you would have to answer a bunch of aiming-appropriate questions to kind of buy yourself more screen time there's more you can do than flipping stuff on and off and apple intends to do more which we found very encouraging. >> "the wall street journal" said they got letters of support as well as the many you got, there's been a lot of critics and you've heard the criticism over the last 24 hours, notably from ourim cramer who calls your letter duplicitous making everyone think apple does nothing. goings has not done nothing and there's several companies in the s&p who need to be more responsible. >> it's clear he hasn't read our left because our letter does not say that apple does nomping oth. our letter applauds apple's efforts and says he can do more.
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>> the point he tries to make is says facebook has its own tremendously large platform along with instagram android is a much larger platform than the ios operating system is and those phones are all over the place google has youtube as well why not a video company who is making violent company that kids are getting their hands on >> for the same wore you wore one tie today and go after another one. we can go after one company today and focus on others in the future as i said at the outset, apple is the smartest place to start they are the leader in the industry what they do would send a powerful message to those other companies, by the way, the other companies that you mentioned are -- they are not unaware of these issues, and they are starting to address them two, as i said, they are the gateway to a lot of these more problematic apps and sites and it's like a hose if you can squeeze the hose you won't focus on every drop of
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water, you'll try to squeeze the hose and a s&l in an incredibly powerful position to do that fault doesn't matter if you can focus on the most impactful way to help kids you should do that, and lastly we're shareholders and folks at calstrs are shareholders this is smart business for a toll do this when you invest in apple, you're not investing like if you're investing in a tobacco company if you are investing in a tobacco company you're investing in making people sick and if you invest in coke you're investing in potentially giving people diabetes this is different. this is not what apple investors signed up for. what they actually signed up for is people happy about their products and, again, i don't know -- apple -- look, if you are smart, customer-oriented company the way apple, is your response would not be, well, this isn't our fault and by the way in a related story, that's not what they have said. they said we want to partner with parents on this issue to make them feel happy about our phones and it's a smart business
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sense. if you can improve young people's mental health outcomes and make customers including parents better about the phones they buy, it would be a win-win. >> long-standing wave that apple has thought about this i mean, i've been in small gatherings with tim cook he strikes me as the kind of ceo who cares deeply not only about his customers and also >> why -- >> and apple as a corporate citizen. >> why have most of the original designers of the iphone, including one who came out yesterday. >> tony fiddel. >> and says there needs to be more improvemans you're making a straw man argument we've not said apple is not a simmon company, incredibly responsible on issues like the environment, on supply chain issues and even on this issue, but we think there's an opportunity for them to get out ahead of the curve keep in mind that with everything they have done you still have 94% of parents who say they try to do something every school year to limit their kids' phoneusage, but half of them feel like it's a constant battle and more than half of them worry about their kids'
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social media and more than half feel like their kids are atampd, their words, to the phone and also half those kids feel like they are addicted to their phones >> you know what >> this is easier for apple to do than maybe some of the other companies you mentioned because this is not going after the hardware this is a software fix, so it's not going to the essence of their product as it would be with one of the other social media sites. >> the other criticism, i know you've heard over the last, you know, many hours, is that you're essentially asking tim cook and apple to play the role of parent where at the end of the day this is a parental issue, that apple has given tools and tin tends to give more as it has said in the response to -- to your letter, but that, you know, at what point does it -- does it become the parent's responsibility and tim cab is not the parent to hundreds if not hundreds of
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millions of people around the world. >> we haven't heard that from the company. read apple's statement what you're saying contradicts apple's own position it's completely inaccurate to say what we're saying or what apple is say is we're imposing a nanny state idea i encourage everybody to read the letter late night pitch man where you can read the whole letter. we say, first of all, parents bear ultimate responsibility for this, full stop, but when you have kids using their phones on average four and a half hours a day, when they check it 100 times a day, most parents, particularly working parents, can't follow their kids around all day, and when you have that level of usage, a company that makes such a powerful product has a responsibility to partner with kids, and, again, we may be arguing with you or cramer, but we're not arguing with a we're all on the same page to this to the extent that we're having
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a debate and the quality of controls out there right now and apple said last night in response to our efforts that they are putting out new tools, so we're looking forward to a constructive discussion with the company. i don't really think either of us care what cramer thinks most people are supportive of this if you actually read the informed analysis about this, and we're looking forward to a constructive discussion with the company about this enveloped by the experts. >> do you think you'll have a conversation with either tim cook or other members of the board? >> we hope to. >> we will. >> have you attempted to reach out to him already >> we have. >> mr. sghook. >> we've sent him a left we expect we'll get a response. >> yes. >> ann, thank you for your patience how did calstrs get involved here >> well, we've had a long relationship with jama just like a lot of other activist investors, and as we've shared with them our esg priorities which has been in calstrs' dna for over 40 years, these are issues that we care deeply about because they affect shareholder
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value and could be a risk to our poll, so as we look at these issues and we continued our discussions with jana, this is one that came up in the discussion about apple being our largest holding in our portfolio, so it resonated with us we have a long relationship with a. we think they are a responsive company, they are sop. they take their social license to operate very seriously as evidenced by the values that you see on their website and that they espouse as charlie talked about, human capital, supply chain, so this is one that was a natural for us, especially as the teachers fund. we heard from so many teachers yesterday about the positive response on this because teachers in the classroom see the impact that these students are suffering and having as a result of these iphones and other telephones and other devices, so it resonated with calstrs, and it was natural for us to partner up with jana and to communicate with apple on our concerns about this, and most
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importantly how they are protecting long-term shareholder value. we'll be a share holder in apple for a very long time and so we want them to step up and respond, and as you said they are -- they do have responses for this the statement that they issued yesterday was very positive, but one of the things we want them to do is to share more about what they are doing and to bring in some of the stakeholders and maybe talk to the shareholders about this concern and how they are addressing it. >> i'm just curious. we've looked through your ownership of other stocks, and you owned facebook, and this is current, and forgive me if it's not. facebook, google, coca-cola, pepsi, mcdonald's, activision, blizzard are you concerned about childhood obesity and are you concerned about violent video games and concerned about the other technology companies and their impact on children >> we are concerned about all those issues and the impact that it can have not just on the children butalso on the reputation of the company. we have a very active engagement program and have communicated
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with all of those companies on a variety of issues. >> but you don't have a problem owning those stocks but not taking an active role in contacting those companies >> we are taking an active role in contacting apple, and we'll continue the discussion. it was a natural for us to go talk to apple. they are the laenchingt holdirg. that's a good place to heart dialogue and hear what they are doing on this issue. >> charlie, let me tell you. jim cramer is e-mailing me saying he did read the letter. he didn't insult you at all, and he raises the issue of when you guys were holders of wall green, why didn't you take a big stand against tobacco? >> i'll respond to that since i was on the board of walgreens. one, we had a standstill agreement. two, i was on the board so i had no ability to speak publicly and three i did raise it privately
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with the company >> i don't know. i just fine this line of questioning with all due respect kind of ridiculous you can say you're doing this good thing but why aren't you doing 100 other good things. >> these are the kinds of questions that people are asking. >> i'm not on jim cramer's show. what questions do you have >> i've asked you all the questions that are the relevant questions. >> relevant to the question you asked anne about her holdings. you know, from hour perspective this is a new fund we're starting this is our first investment you've just -- erin just listed a number of companies. you can be sure we'll be looking at all of them. >> we haven't had a social impact fund. >> nobody has ever done this before. >> but you don't think these are relevant questions. >> did i say that? >> it's our first one. we can do others >> i don't know. but you questioned why i'm asking the questions. >> i've answered the question. >> which i am. >> i feel like we've answered the question. >> how did sting get involved with you >> sting's been a longtime
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friend of mine obviously everybody knows him as a rock star but he and his wife trudy styler have been long-term sustainability advocates including with their very successful rain forest foundation project and so i expect, you know, sting not being specifically involved in apple and they are interested in the issue and will be on the advisory committee and will help us understand a lot of issues with a lot of companies and will certainly bring awareness to this effort. >> i'm curious as to what the -- what you realistically expect the end game to be you also could have, i suppose, put this on a proxy and -- and made it a shareholder proposal, but you didn't is that something that you would consider in the future >> well, possibly, but hopefully we don't have to do that you know we've conducted over 80 activist campaigns in our 18-year history. we've only had to run one proxy fight so we've been able to
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create change every single time generally without a fighting >> what will your metric be to determine whether apple's done enough in your mind to meet the demands that you suggest they should >> yeah. you know, that's a good question here's what we've asked for and i think that will lead to kind of the answer. we've asked them to convene a committee of the experts and we've recommended some people who can play that role and there's obviously a lot of others review the research with those experts and then kind of determine what you know now and what more you can fine out, and in the same way that other tech companies have done like, for example, with the family online family institute which, you know, facebook and google, and other folks have done and then take something that you need to do additional research and help to facilitate that off your other resources, and, again, there's certainly plenty of capacity at apple toll do that, and then kind of go where the research tells you we're in the attempting to micromanage the company and calstrs isn't attempting to micromanage the company.
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we are not software or childhood software experts get them out there and see where the research takes you and implement their recommendations. obviously under the guidance of the company in the same way that apple has always had an incredibly intuitive user friendly approach to do this and then monitor the same way they do again, i know this is a feeling that at least in some quarters that companies don't have to take these issues seriously, but as anne said apple has a tremendously admirable record in taking these issues serious lit same way they do on supply chain issues and the environment put people in charge of it and follow the progress of t.issue reports ton and this is particularly important because as the technology continues to develop you have to kind of stay one step ahead of it, and that's what we like to see you. >> mentioned, barry, that this is your first sort of campaign of this message. why the is now the right time for jana to be doing this when it comes to socially responsible investing? >> why not just as in 2001 when i started
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jana and virtually nobody was doing corporate activism, there was a need for it which we identified and we fully took advantage of it, and we've created an industry and we feel similarly about the social causes that we're looking at and the change that we can create to better the world, and, you know, to answer the -- the cynics who might say you're doing this about money. of course it's got to generate a return but i don't think there's any conflict with generating a positive return about doing corporate good >> do you think that socially responsible investing will get more play and more attention here in the u.s. it is a has elsewhere but it's been slow to catch on here? >> it's getting a lot of attention and there's a lot of interest in it, but nobody has done it this way there's been passive funds
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quantitatively invested and companies that rate well and exclude companies from their portfolio that don't rate well from a social standpoint taylor's private equity firms that look at small private companies or pension funds and small share holders who don't have resources ant the platform that we have so we felt that this was a really interesting and -- and productive area to go into. >> you intend to be long-term share holders? >> yes. >> a. >> yes. >> how long have you been share holders? >> not very long. >> again, i just want to -- sayuri to interrupt, barry one technical restriction here this is a new fund for us which doesn't even have any investors yet. we didn't want to sit on the apple idea because we thought it was incredibly timely, and we could do some good new and maybe a difference opinion about that. we feel like we've already made progress in that regard, but to be clear, it's a small position. as barry said it's a new
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position there's not an actual social impact fund. we're in the process of raising one. >> and i don't think people are quite used to calstrs being an activist per se. is this a new role and one that you all intend to expand >> actually calstrs is an activist if you talk to some of the shareholders out there and some of the companies, you can see we we've been active owners and index investors and moefb our global equity is in the index. we're active owners. let me say something about the esg strategy we're actually pleased that barry and others are looking into this space and raising money. calstrs since 1978 has had a statement of investor responsibility the whole esg risk issues and our engagement is built into the dna, so which think it's great that the market is finally catching up and seeing the importance of these issues and how they can have an impact on the shareholder value. we look at these issues as risk management when it comes down to portfolio
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management as risk management and these can present a risk to the portfolio, so for us who are the universal long-term owners, we'll be in the markets as long has there are teachers in the state of california so we want companies like apple, like others paying attention to these issues so we think it's terrific that the market has finally caught on these esg issues that they actually matter to the long-term returns of these companies. >> yeah, and when will you be snide, anne, that apple has met the needs that you say they should we've heard from barry and charlie on what they are expecting. you've asked for a committee to be put together. >> yeah. we'd ask for them to talk to the experts and to bring together a group to look at these issues and look at the research we now apple is already addressing this issue. they have responded in their statement yesterday that they are, but the issue is what more can be done? what is the newest sflech what are the steps that they are taking we have found apple to be incredibly responsive on shareholder engagement issues over the ten years that we've worked with them and even
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longer they are terrific as i said before so we're looking to see what more can be done and sharing that information with the shareholders as to how they are responding to this >> barry, before i let you go. i would love to ask you about the market in general. what do you make of where stocks are and these enormous gains that we've seen? >> probably last person you should ask about it since we pick stocks one by. >> unit's harder to find value >> actually not. the economy is growing earnings are growing rates are at all-time lows it just seems like the market is going to continue for a while. >> you know, i've been speak on our program over the last several days about our conversation that i had with david stepper who suggested to me contrary to what a lot of people say that the marketis not expensive, that if you take a look at what the tax cuts are going to mean for earnings and where interest rates are. >> i agree with david completely, and in fact we -- we are more invested today than we've ever been.
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>> is that right >> we've found more ideas that meet our threshold than at any other time. >> appreciate you coming on. >> appreciate you having have. >> barry rosenstein and charlie summer anne sheehan as well thanks for your patience. >> thanks. first up, a very bight call of the day this analyst holds no punches when it comes to this beaten down retailer. plus, the five big-name stocks bernstein is calling on clients to buy, buy, buy before the break, our data partners at kensho showing oil is a good buy this time of the year up 2% in first quarters, dating back to 20 so. for more go to "the halftime report" with scott wapner is back in two minutes.
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all right. welcome back to "the halftime report." with us for us, joe terranova, stephanie link and pete najarian stocks just off the highs though the dow, s&p, nasdaq, russell 2000 all hitting records earlier today. pete, the beat goes on >> yeah, the beat goes on. the strength continues the rotation continues industrials continue to be absolutely unbelievable, and then you get over towards the healthcare side of it as well, scott. we talk about this rotation. i think it's been very healthy i think i would also add to the rotation is volumes. volumes for 2018 are off the charts if you look at the derivatives world we're averaging, like i
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said the other day, about 21 million a day. another very busy day yesterday. >> steph, you heard end of the conversation this with barry agreeing with david tepper market is not expected, not where earnings are expected to be and where rates currently are and the fact that he's more invested now than in a long time. >> and we've talked about pockets of the market being very attractive and some being more expensive. i'm noting that the financials today actually are catching a bit. if you look at the yield curve it's steepening and that's after japan is buying a little bess of the jgbs and that might be the beginning process of what we've been talking about, the global monetary policy starts to change and the narrative starts to change and, therefore, rates start to go a little bit higher. it's encouraging to see the financials participate because they have been kind of sloppy the beginning of the year. >> 250 on the ten-year and you made a move as it relates to the bond market. >> yeah. i think it's interests to try to
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get in there's always the demand the buyers come in march of 2017, the highest 2.62. i bought some -- it would be the equivalency of what pete does in the option market. i went in and bought bond futures playing for this move towards 2.62 you have a tremendous amount of supply, $60 billion in government bonds here coming from the uk, the u.s., germany and japan. let's see if the demand is there on the other side. if it's not, you'll see a breakout above 2.62. >> under armour shares down 50% in the past year susquehanna's sam poser believes that stock has another 30% downside ahead and is here with us on set. good to see you. >> thanks for having me. >> oh, boy i mean, of all the negative notes i've read, this may vault itself right up to the top you say it's a call to action. sell under armour. the under armour brand remains at risk given poor distributions, we believe under armour risks are more like
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reebok than nike really >> i mean, if you look at what they did i've been a firm believer that underarm zor a great brand and it belongs in time in the moderate channel however, their decision i think to go hastily into, you know, cole's, famous footwear and dsw without having a broad enough product to effectively segment it is creating a lot of problems, both across the board for them. >> you think that's hurt their -- the stature of the stade de gerland very definitely. >> already hearing from some of their big bert cut america you know, if retailers such as academy, dick's and others that, you know, that they are planning the business down significantly because they haven't segmented it enough so they are able to buy very similar if not the same product for less money at kohl's than they can buy at those stores, and -- and so the consumer is starting to go there so there's no incrementality in the sales, and, you know, the
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reputation of selling kohl's versus dix is probably not the best thing in the world. >> you call for a rather drastic move at this point you want them to pull all under armour product from kohl's, dsw and famous foot ransomware. >> basically if you look back about ten or so years when they did women's apparel the first time and men's -- men he's non-cleated foot ransomware they did not do it well they did the shrink it and pink it with the women's apparel, and rather than sticking with a bad program they sort of scrapped it and went back to square one which we think was a very, very good idea and then at the same time they were taking their time building out their international business while getting a lot of pressure from the investment community to be more aggressive because they realized that if they went up too fast they would go down too fast and we want them to take the same approach when they are dealing with this poor distribution choice the reason that we think that they did it was because they have to salvage some sales from
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the closures of sports authority, sports chalet and gander mountain where they lost a lot of business and i think they had to take growth over brand and i think, unfortunately, they may have chosen the wrong way for now >> you say the two-month rally of near 30%, basically you say it's a sucker's rally. >> well. >> don't believe it. >> well, listen, we had a sell on the stock before. we had a $12 price target and upgrade it had and put an-11 price target ton and the stock went up. nothing has got bert and the longer they stay in that bad distribution things are getting worse by day in that respect because the better customers continue to plan their future sales down more and they can't offset that, and iffy in offset it with sales to the more moderate channel then they do damage to the brand. >> what about on the investment cycle? i'm kind of curious as to when you think gross margins will sort of bottom and maybe inflekt high higher versus lower. >> tell me when they will be selling the better product and
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then they will inflict unfortunately, there's a situation where they can either stop selling those guys, make a hard decision that who hurt them in the short run and be very good for the brand or i'm scared we'll see a slow bleed might get a quarter where they are doing something good getting an e-mail every day from kohl's saying 25 off and from under armour saying on sale. >> yeah. >> and when you hear that with under armour you think under armour the brand so if you're a customer that buy it at dick's and you say it's not on sale why should i buy it from you it's just not working in the right direction here, and it all comes to brand, and unless they fix the brand you can't get a sustainable margin recovery. >> what are your thoughts on what some would say would be the biggest misstep if you want to call it, simply mission out on fashion, athleisure at the expense of performance and innovation and technology? >> well, i think it's -- it's --
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if you look at competitors like nike or adidas it's not that they don't have great technology it's that they position it differently. if you look at nic and the vapor max which is a shoe that has gotten a lot of hype and is doing quite well when they launched the vapor max at the end of last year, they launched it as a collaboration on the runway in paris had a good technology but they were launching it in a much more, you know, in a way to think about it differently if you want to run and work out in the gym you can do it, but it was -- it was beyond that on the way they approached it and under armour stays very focused on performance. >> i mean, hence, that shoe has a pretty big -- it's like a $190 price point as a result of that, and if you look at some of the similar strategies what have adidas has done, you know, vis-a-vis all these other things over the years -- >> it's not a price point issue. if you look at what nike did
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with the roche, an $85 shoe that they put in the better channel as a cool shoe and they have done that. it's not price point because like the nmd from adidas is $1 hospital it's all bert when do you that ceo shoe as a performance shoe it doesn't sell well in dick's t.sells well in the right place with the right market is under it and under armour takes much of their marketing and focuses it on performance rather than a broad lifestyle thing. >> pete, we talk about this all the time. >> the valuation level is still scary. even at these level, safe. that's part of the concern are they losing big time in shoes also when you consider what nike is doing and what adidas is doing and where under armour sits in that category and that's something that kevin plank made, a specific point a few years ago and have they made the right he had wear are they doing it actually with their sales of shows >> they have made decisions that haven't been good.
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the product hats been good but arguably not good new. again, they focus a lot on performance, not on sort of general lifestyle and so you have shoes that you can wear on court and on field but people aren't necessarily wearing them with whatever they wear it with. i watch -- i wrote another note earlier last year. i watched the grammy awards, you know you saw a lot of people come out wearing adidas, wearing nic there. wasn't a pair of underarmor or anything to be seen in the audience, and that in a nutshell sort of describes their problem. >> right. >> they did sign f.roche and that's something that got going under way in that time period. >> we reached out to under armour as well to comment on this note, and we've yet to hear back from the company. coming up, pete is tracking
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unusual activity in a financial and a healthcare stock we'll find out which way the options traderare tts being those stocks are going to move when we come back in two minutes on halftime. ♪ dad! dad!!! can you drive me to jessica's house? uuughhh! ♪ this is what our version of financial planning looks like. tomorrow is important, but so is making the most of the house before they're out of the house.
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all right. welcome back i'm brian sullivan here's what's coming up on "power lunch." you just heard from barry rosenstein and are they right to place some of the responsibility for kids' behavior on apple? it's a huge debate, and we will continue it. plus, a very bullish call on amazon you won't believe this price target, and that analyst is here >> and wings and makeup. yeah, they go together, at least today, because jim cramer sits down exclusively with the ceos of both elf beauty and wing stop quite the combo, scott back for you. >> all right, bri. thanks so much, brian sullivan.
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>> let's head to the consumer electronics where julia boorstin is there with a new alert regarding hulu hi, julia. >> reporter: hulu is announcing it now has 17 million subscribers, up 40% from the 12 million subscribers it announced back in may of 2016 it now says it has 54 million viewers which gives a sense of its advertising reach. now this growth is meaningful for kids any remember, that disney is acquiring a majority stake in howlu as part of it acquisition of the fox entertainment asset disney ceo bob eiger says he's going to invest in building out hulu as an alternative to the traditional bundle making it a destination for the adult-oriented rather than the disney action. back over to you. >> pete najarian will do unusual activity in a financial stock and the biotech space as well. pete, we're going to do that in just a second. do i first want to go to the white house and the president
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who is taking questions from reporters. >> seems to me not actually has changed here in terms of your positions. >> no, i think it's changed. i think my positions are going to be what the people in this room come up i am very much reliant on the people in this root i know most of the people on both sides. i have a lot of respect for the people on both sides, and my -- what i approve is going to be very much reliant on what the people in this room come to me with i have great confidence in -- if they come to me with things that i'm not in love, i'll do it because i respect them thank you all very much. thank you. thank you. >> can you beat owe perhaps by the way? >> yeah, i'll beat oprah oprah would be a lot of fun. i know her very well you know, i did one of her last shows. she had donald trump before politics, her last week, and she had donald trump and my family it was very nice no, i like oprah i don't think she's going to run. >> but you'll beat her >> i don't think she's going to
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run. i know her very well >> thank you, mr. president. >> it's phase two. comprehensive will be phase two. i think -- i really agree with kick i think we get one thing done and then we go into comprehensive the following day. i think will happen. >> thank you all >> yes >> we'll -- >> let's wait one second. >> thank you all very much i hope we gave you enough material this should cover you for about two weeks. >> that's the president of the united states there commenting first and foremost on the issue of the week, whether oprah winfrey is going to run for president in 2020. the president saying he doesn't think she well knows her well but doesn't think she will run and saw him flanked there by a couple of democratic leaders, the minority whip steny hoyer and senator dick durbin. eamon javers is at the white house watching all that have
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unfold eamon? >> reporter: yeah, scott that's right the president says he thinks he could beat oprah and knows her well and doesn't think she will win. that's an issue for the democratic party to figure out what they are going to do in 2020, what type of candidate on the democratic side to challenge this very unconventional president. united states, and speaking of unconventional, we definitely get a sense that the president here has broken fundamentally with the steve bannon wing of the republican party because he's broken with steve bannon personally in the wake of that michael wolff book now we see him sitting there in the white house negotiating on comprehensive immigration reform with democrats in the room we also seat president saying that he's going to davos which is sort of the world headquarters of globalism, so we'll she what kind of a speech he makes to those world economic leaders in davos, switzerland when he goes there at the end of this month, but this is a slightly different tone from this president clearly wants to make some progress here legislatively in 2018 the conventional wisdom is that will be very difficult to do
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because it's a mid-term election year this. president would like to get immigration reform done. he just said he would like to get infrastructure done. he has said he's talked about welfare reform as well, so he's got a long list of things he still would like to do you see the president there engaging in bit of a charm offensive with democrats and republicans in the white house trying to get them moving on the agenda that they would like to push forward. >> he has talked about certainly recently a lot, eamon, about bipartisanship and that picture certainly told that story. not lost ounce as well, stocks are at the highs of the day once again, eamon, and investors win creationly optimistic that more is going to be coming from this white house from a policy standpoint be it infrastructure or other things that are going to be more stimulative to the economy and thus stocks. >>-ins a confident white house right now. despite the fallout from that michael wolff book and we still have the tweet over the weekend where the president insisted
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he's a very stable genius, the president allowed the white house press corps into this meeting for nearly an hour to record the whole thing, all the negotiations between democrats and republicans over immigration and daca and where they need to go as they laid out their agendas in competing forums. you know, that's not something you do if you're feeling defensive. that's something you do if you're leaning forward and on the miskt, so the question is what does that mean for markets? do they like that immigration deal would they like some certain on work force and labor and immigration and all that have if in a could be achieved this year it's a big lift though this is an election year, after all, and this is washington after all which was designed by the founders not to necessarily move at lightning speed. >> speaking of big lifts, 25,409 points is where the dow jones industrial average currently sits eamon, thanks so much. eamon javers on the north lawn as always for us pete najarian still at the telestrator with the unusual activity in a financial which i guess financial stocks, pete, are liking the moving rates. >> absolutely. we had the kre paper we talked
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about yesterday, a huge xlf. let's start off about the gilead, very volatile stock when you look at this chart and got into this area where it's chopping around in the mid-70s somebody came out on the may 90 call 10,000 were bought for 80cents pretty aggressive buying in there. waiting for something like that. got the healthcare conference going on right now i wanted to see something in a positive way in any of the biotechs, this is the one that stood tout for me now and is hitting. i bought the stocks. the i'll sell upside calls against my position for the next several months watching this stock hopefully making a move up around 80. bought these around 80 cents and the stock around 76.60 when they purchased the calls. got a financial on top of that though kkr. >> you better after i said you did. >> very aggressive buying in kkr as well today. this is something we always love seeing when somebody had a winning trade hand now they want to roll it up. so, in other words, the march 22 calls, they were bought today with 52-week highs those are getting taken off. 5,000 of those were sold, but
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they are rolling them to the march 24th 5,000 times so that's pretty aggressive movement as well and expecting this to break out now to the upside. goldman sachs today talked about this stock on an upgrade as well so keep an eye on kkr. they say it's one of thekkr. they say it's one of the most imp expensive in that category as well. >> how long will you be there? >> at least all the way to the expiration unless this has to rock and roll, and then you would have to start selling it. bernstein is out with a new note talking about their five best conviction ideas. i want pete to talk about tart that stock is up today but there's delta air lines, joan, you want to take that? >> delta reports this week, but e uismt g, talking about the permian basin, and a return rate
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with $40 oil andnatural gas prices around 250, you're talking about 30%. the think the problem with we look at this area as being mature, and it's not, and the growth will be there. >> stef, which names pop out we have delta, tapestry, eog. >> one of my largest is eog, but if you think oil prices are high higher, you want quality, which eog is, for sure, and i own anadarko and look at some of the service companies that have acted well one of the other names is broadcom, one of very few semiconductor names i own. this one is trading at about 14 times forward estimates, a steep discount to the whole group.
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32 discount to texas instruments, we're walls for the qualcomm bid if they get it, great. if they don't, a lot of other leaves they can pull top notch ceo, so this is one i would stay patient with. if it falls -- or just as volatile, this is one i would slowly pick at. >> pete cornel >> yeah. it's almost as if the bernstein note should have been out there. everything they highlight, the stock is much lower, the digital is working, add the leverage of the 1800 stores, that's working as well. i think it gets to 75 in a hurry. >> crude oil is rallying jackie has that story. >> good afternoon. wti jumping to the highest level
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since december of 20 when i saw that study, it made sense, what do you think >> there was a correlation, for sure, but we saw them kiss the high today, and right now it is not a coincidence that the stock market, all-time highs is coinciding with obviously the crude oil futures. i don't think the momentum is going to wane until you see a storm roundup. but the coordinated growth, that goes into the demand for crude oil. >> are we ready to break out of thinks ranges? is it time to go higher? >> jackie, we're now at the top of this trading channel, but it now looks like we've shifted into another gear, one we got
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the news that crude oil has fallen below 50 million barrels, so all of the work that the saudis are doing to said the table for the ipo is paying off. look for it to continue. >> thanks, guys. on the live show we're joined by real much acamp ora. plus tom lee will tell us why bitcoin about libel in 2018. final trades with the halftime final trades with the halftime crew back after this options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. hey, ian. you know, at tdn for ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated.
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step-by-step options trading support from td ameritrade they cahow many of 'em?e, sir! we don't know. dozens. all right! let's teach these freaks some manners! good luck out there, captain! thanks! but i don't need luck, i have skills... i don't have my keys. (on intercom) all hands. we are looking for the captain's keys again. they are on a silver carabiner. oh, this is bad. as long as people misplace their keys, you can count on geico saving folks money. fifteen minutes could save you fifteen percent or more on car insurance. at ally, we offer low-cost trades and high-yield savings. but if that's not enough, we offer innovative investing tools to prepare you for the future. looks like you hooked it. and if that's not enough, we'll help your kid prepare for the future. don't hook it kid. and if that's still not enough, we'll help your kid's kid prepare for the future. looks like he hooked it. we'll do anything... takes after his grandad. seriously anything, to help you invest for the future.
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okay within the last hour, have downgraded a number of banks they say, quote, now the market is euphoric with trump tax cuts, we perhaps counter-consensually take the opportunity to downgrade the tooks. the market is underestimatingsing the risk of a turn in the cycle for corporate loans and credit ca s cards. >> i think bank of america is 30, i'm still loan bank of america. they're probably longer financials than i am i think bank of american will go to 35. >> dere lace, you do have tax,
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better economy, i get that the stocks have rallied huge, so if you want to take some money, i get it the earnings are coming up, but i think there will be opportunity. just keep in mind, they've also had a sell on goldman sachs all the way up so trying to pick your spots, they call it -- >> they call citi the most risky, jpmorgan is the most offensive. >> is the run recently justified inch i don't think the run has been that crazy. the beginning of this year, the group really hands parted. >> it was run, nothing, then run. >> you have fits and starts, so now you'll have earnings, expectations are pretty high they'll be some essy headlines. >> do you want to get ahead of the numbers?
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>> if you can get out and two one or two points? >> i'm not talking about a quick trade. >> three months ago you want to ahead with far pour flexible with ccar. >> what's your take? >> you speak with what you own. >> i ocity, city calls, bank, xlf, wells fargo, i disagree with the call. stef points out the most important heart. that is this particular gal or guy been right no wells fargo got an upgrade as well i think there's banks with still so much more upside, and we've had they pauses that i think this is not a note that i want to hold too tight. we'll discuss this perhaps more in depth tomorrow i want to do final trades. joe? >> lnc, liven lincoln finance. >> dupont. >> industrials have been
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running, in fact we're about at the highs of the day pete we've had unusual activity with the financials the you know what i'm seeing as well xlf. xlf, financials, they're going up giddyap. we'll see you seen, stef that does it for us. "power lunch" starts now. i'm michelle caruso-cabrera. here's what's on the "power lunch" menu. your portfolio is power to new highs today president trump wearing in on the wall and infrastructure plan, and a rare break, trump is headed to davos to attend the world economic forum, even though members of his team said that davos -- and unintended consequence


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