yesterday. we got a little bounce as europe closed at 11:30 eastern and the all-important 2:30 hour remains. >> absolutely. a little market stat from market maven peter shcek. the s&p has yet to rise in back-to-back days this month and we're poised for that yet again today. welcome to the halftime report scott is off, i'm in and if you thought it was safe to get back in after yesterday's record surge -- you may want to think again. >> the market starts taking back what it gave yesterday volatility the order of the hour, date, the week, the month, the year. today, the traders debate how to know when it's time to put some risk on. plus, a big call of the day on one big name that's bucked the down trend is visa everywhere you want to be the halftime report starts right now.

>> it is good to have you with us on this busy thursday, here to debate, discuss and trade, the biggest headlines of the day. and maybe find you ways to make money or save money are joe terranova, and rob chan of ubs private wealth management. and also joining us from boston, is carrie firestone, ceo of oreus asset management and carrie, we'll start off with you. i'm sure none of your clients has called you at all in the last couple of days, right i mean nobody has emailed or called so can you help us understand these crazy record-breaking market moves >> maybe not. >> you know, the question was so good -- you nearly completely -- it was like this

carrie firestone, are you there now? >> yes, i can hear you >> what i was saying, i'm sure you've taken no calls from any of your clients over the last couple of days at all. please note the sarcasm. how do you explain to them, these crazy record-breaking market moves >> well, the market started to move down in september, so we've gotten conditioned and our clients, i think have heard from us a couple of times. about what to expect in markets that seem to be fallen and this one, has fallen to the level that i've got to give it credit i'll call it a bear market 19.7% rounding up is a bear market so at least we take off the table the risk that we've been hearing about for three years, is that the market has gone up for almost ten years, when is it going to correct? guess what, guys, it corrected so now let's try to hit a restart button, evaluate whether stocks are cheap enough at 14.5

times last 12 months' earnings and if we can find reasons to say, there are buys out there. we see good things about the economy. yes, there were risks, 20% lower means a lot of that risk has been priced into the market. and you know, we are long-term owners, we believe that there are opportunities and if you stack up two years on top of each other, 22% in '17, the market is down this year, it's still a positive return that's -- >> fair enough >> carrie, you're making great points, here's where i would push back. we open it up to the traders here you mentioned past 12 months 14.5 times does look pretty good if you're looking backwards. think the market's question, is what is that, the pe, the denominator going to look like for the next 12 months >> well the market is saying that we're really in a no-growth

environment. the market is not giving any credit for growth we would say you give 2% just from stock buy-backs, give us a few percent higher we know that the big tech names are going to grow and perhaps with energy down we know that we know that there's certain sectors, autos are going to have a tough time very small percent of the economy. we can come up with 5% to 8% growth and even if it's 4 or 5, we're still only at 15 times earnings for next year. is that too expensive? the market seems to be suggesting or was, that it is too expensive. we think that there are opportunities. >> all right mr. top 100 on multiple lists, what are you advising your clients to do right now? >> some lists you didn't even mention that >> there's too many lists. >> a lot of lists. to me this is a headline-induced tax loss induced, algo-induced bear market that's completely detached from the fundamentals so yes, what we're telling clients to do? we're getting involved we're starting to selectively

buy. we look some of the cyclical areas, we've gone global with some of what we're doing, because the economic trajectory globally is, looks look it's going to be better than that of the u.s. next year we're encouraging clients absolutely not to panic. >> are they listening to you are they panicking you can advise them to do anything ultimately they're going to say rob pull the trigger, or the market was down 600 one day, up 1100 the next, i don't understand it, i'm out. >> i think what we did in late september was helpful to position clients to do something today. we rebalanced in late september. a little early from when we traditionally do it. so that gave us the power to do something today, and right now and we're looking to do that >> first of all, i'm going to be in cabo like minnuchin was and i have no intention of calling the

top six banks. >> are you going to call the bottom six in. >> they're more likely to take my calls i want to say a couple of things, carrie, she's a long-term investor and she's looking out two years, not just next year, but two years, three years, four years, and frankly, that's a good strategy for a lot of people to do, right, carrie? i'm not misspeaking, am i? >> no. although you do disagree with me often so to that extent, you were >> he disagrees with me often. don't feel bad. >> i'm going to go to rob. but i think you must have misspoke, because it's not just headlines, i think that really it belittles what has occurred in the market. you've had a fed chairman, there's clearly in misspoken, which is caused the markets some concern. you still have global growth declining, not increasing. >> and in quantitative tightening >> let me -- >> that's real >> we've not been built the wall

that trump has one we built another wall, which is the wall of worry that we are going to climb maybe fed chairman powell didn't say things as elegantly as you would have liked fed futures are indicating that there's not going to be a tightening next year the dots are saying two tightenings next year. >> and scott minor said there's a 50% chance of a rate cut >> that leaves incredible latitude to deal with what happens prospectively. i guarantee you when speaks on the 4th that he's going to be much more careful with his words. yes, there's no word that the market was scared. but that doesn't -- >> let's talk why the market is scared the market is scared, because i read your notes, contrary to what you put in there, ceos have retrenched gdp numbers show that. cap ex numbers show that so there's clearly -- >> what's the most important -- >> let me finish they're clearly factors going on

in the market. that indicate a slowing, that's not headline that's fact. as i mentioned the global economy, the global economy continues to slow. we're not in in an easing cycle anywhere we're in a tightening cycle. scott miner's words become fact. so i still think there are real worries. here's where we are, we're down 20% in the market. lot of stocks have been crushed more are there opportunities here if you take out longer-term timeframe? and i believe that there are i put a little money to work i say 5% cash. huge weight in treasury bills. short-term duration. >> when you think about that, all of these things that are on our dashboard that are flashing red, what's going to make you continue to drive down the road? when some of those start not flashing red any more. think that's what's going to cause people to get reengaged.

>> i'll give you data, too any time the fix is above 20, 28 and you have federal -- loan officers surveys indicating that credit is still loose, credit is the lifeblood of the economy and any time it's still loose, you've always had a positive market in the perspective 12 months, okay going for it, always there's never been a case where it hasn't, okay? you tell me that when stocks are trading at 14.2 times of the fundamentals which have been absent from this market, period, the end, they're on vacation, the algos are running right now, tax loss selling is running everything right now when they return to work -- they're going to put money to work and they are going to buy risk assets and look relatively attractive >> i want to move on --

>> over history. what's the average -- >> over the last 20 years,it's 15 and change, 14.2 now. if you want to go back to the '30s, that's great. >> let me finish how many times during that period have you had as unstable an administration as you have now? shouldn't that factor into your weighting? that's not headline news >> shouldn't the growth -- >> guys, a good discussion, good -- your point, steven, we have an hour show, it's 44 minutes with commercials joe terranova, let's talk about the federal reserve for a minute they both make good points if you believe it's not the rate hikes, it's the quantitative tightening, the reduction of the balance sheet. the u.s. storkt has lost over $1 trillion in market cap not quite as big as the fed's entire balance sheet, but not far off. do you think all that tightening has been built in? >> i think in the last three days all the conditions that we're talking about, the dysfunctional perceived to be

dysfunction administration, the federal reserve, the trade dispute with the chinese, i think all of that in the last three days, nothing has changed. what has changed what has changed is the behavior in the market is getting even more volatile. su had an historic christmas eve day followed by a boxing day that was historic. and then you had an opening this morning that's down 500-plus at one point and you extrapolate upon that just looking at purely a price by the end of today. two consequences, one, if you have an inability to rally this market from down 364 from where we are and you close on the lower end. you say to yourself, there's not much of a validity in what happened yesterday however if you're able to make a run. i'm surprised the market has done this yet. make a run towards unchanged what all speculators need and grasp on to what they invest and that's the ability to measure

risk they need a point of reference, the point of reference is yesterday's low. if the market perception is that yesterday's low is where you could measure your risk and potentially we have a bottom and you can live from there. in the last three days that's really all that the market is ail to digest based on new information. all the fundamental information is all the same. >> i feel like it's the final episode of the sopranos. >> they're in the diner and you're leftto speculate -- did he get watch what does that mean. if we ended today right where we are, monday and -- >> it's zero effectively, two days of drops to about 1100 points we would end at zero what about all this insane action >> what has this told if you anything if we end flat. >> we said yesterday during the show

when we weren't up 1100 points when we were up 240 points or whatever, brian that we saw some very positive action for the first time in weeks. we were up 288, sold to down 79 or down 80 and came up to 240 when we were on noon yesterday we started to move up when your friend scott from guggenheim started talking about the possibility of a 50/50 chance that the fed gives us a rate cut next year it had some impact on psyche and the way people were committing capital i saw a lot of buying yesterday. not by the dip it wasn't all these folks scrambled in from up 288 to down 80 if felt like another one of those days when we could be down 500, 600 and just go lower we saw real buying i want to cite it for you. apple, when you look at an 8%

rally out of apple without the facebook news of their big buyback and facebook was positive until they had that disastrous instagram update but then you look at amazon, 9.5%. netflix was 7%, the give-back has been small in those stocks on a relative basis. 2% to 3%. >> facebook is up this week. amazon and google, up 3% and 2.5%, even with today's declines. >> there are shopping lists that people are putting together because you're near the exhaustion point for what steve talked about as far as tax loss selling that closes on year end. can you do it up until the 31st these days, you don't need to wait until stocks settle but that means that that motivation to sell is going away at the end of next week. those stocks i named are some they're going into now.

>> assume you got my point you chimed in if we end at zero, tomorrow let's say we're flat and through all of these machinations of the market, have we learned anything so far this week about the market heading into the new year >> well i think the point made is where if it's flat, it's positive and one of the reasons that the market has been going down is that as i call it, it's stop the pain effect. if every single week we're ending on a down note, people just want that pain to stop and if we can end this week. flat or positive they feel better investors and maybe the machines feel better, too so i would take that as, and excellent close to the end of the year point i also think that the effect we call it the dry heaves effect, where -- >> yikes. >> there's so much selling that there's no more to sell if we get to that point, as john was

alluding to. where you begin to see buyers who come in and legitimately are picking up shares that have just come down 25, 30, 35%, because they're attractively priced and hit on various measures of valuation, that's good it doesn't mean that the market can't test these lows, it means we're seeing something that gives some stability and base to a market that's fallen 20% >> i want to quickly touch on something. >> we seem to continually be placing blame on algos and machines let's leave that aside and let's say we remove the algos, remove this trading from the marketplace. once again, you're losing potential liquidity and volume and i think more importantly than the treasury secretary mentioned this last weekend. a much larger issue, that i think we need to deal with is

the velker rule and what the velker rule has done when no longer can you have proprietary trading decks at a lot of the big investment banks. and that's a huge issue. >> it's a huge issue in the markets. >> we're -- we're placing the blame, we're placing the blame when the market goes down exactly to your point. we're trying to finger-point why is the market going down well when the market goes down, brian, you're going to need liquidity. you're going to need a warehouse, a warehouse of equities and it's not there. >> i agree, there's something that's been taken away from the market and that's the fundamentalists that sat on these trading desks and provide liquidity at attractive prices it's different than the liquidity than the algos provide. which are momentum based >> the algos took you up, also

>> from this point, i think to be negative here, to be really negative, you have to think that we are fundamentally rolling into a recession you can't be negative at these price levels you might be moderate in your assessment of whs going to happen you cannot be incredibly negative unless you're worried about one of two things, one, the structure of the market which is challenging. two, quantitative tightening and whether the patience -- >> i'm not negative on the market >> i'm looking at the market i'm saying my risk-reward is in balance. when it's in balance i don't feel compelled to put cash to work. >> how about this, carrie? we always associate markets going down with selling and negativity people are negative. i think there's such a thing as a positive seller. what i mean about that is if you made a ton of money. doubled your money in the last five or seven years and you want to buy low and try to replicate

that maybe you want to sell for tax reasons or raise some cash, you're 100% invested, you have no cash. you sell, you sit on it, if you think the markets are going to go down, and buy back. are you seeing that from anybody? can you be a good news seller? if that makes sense? weiss is shaking his head. >> i'll tell you something interesting. there are a number of people who have been selling over the past six months, look there have been people who have been selling for three years. the ones who have sold recently or for whom we have sold recently and we have said to them in the last week, these stocks that you own before are now down 18%, 25%, 35%, and then there are the other stocks, we would like to buy. that are down more than that biotech stocks, oil service stocks, some of the industrials are down 50% or more you say to those people, how about buying let's buy now. and there is is an enormous reluctance to buy when what you

see on your screen is red. the answer, logically, is yes, brian we would like to buy and people should buy. when they sold it was much higher and there are much more attractive price levels it doesn't mean they act on that. the impulse is to weight until they've seen something like a stable market. >> it's the flat-panel tv syndrome i want a flat-panel tv, it's 1500 it will be 1200 next month but you never buy it because you know it's going to continue to go down in price at some point you either buy the tv or walk away. >> but flat panel tvs don't have earnings >> they do if you watch krnk nbc. >> strong point. >> carrie firestone thank you very much. >> check out cnbc.com/halftime carrie had a commentary piece on there that's worth a read. er here's what sells coming up

with visa up more than 11% in the year, one analyst is doubling down on the stock sort of. we're debating one of this year's biggest big-name winners. before the break our data partners at kensho on january market performance dating back to 1980. the nasdaq leads the way in the first month of the year. up 1.87% the s&p and dow also up. for more go to cnbc.com/kensho the "halftime report" is back in two minutes. and last year, i earned $36,000 in cash back. which i used to offer health insurance to my employees. what's in your wallet?

from capital one.nd i switched to the spark cash card i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back. which i used to offer health insurance to my employees. what's in your wallet?

hi, i'm joe from the halftime report. we want to hear your questions go to cnbc.com/halftime and we'll answer those questions at the end of the show. >> go to cnbc.com/halftime or get us on twitter with the hashtag, ask halftime the dow is down 350 points, it feels like we're going to make a run out of the way. we'll see what happens in the last two and a half hours of trading. today the call is visa the stock like so many others down 2%, 10% from its october high technically a correction but visa is still up 12% for the year, not bad. today cfra says with the drop it's a good buy for buyers,

upgrading visa to a strong buy is visa the stock everywhere you want to be in the markets? >> i own it it's one of the core positions i've kept, i don't think it's compellingly cheap. but i think the business model is compelling and it should be selling at a premium i have no idea what he is talking about when he says 25 discount pe. a price target that's dropped, you could think you could get to its old highs. over the next you know, two years. so they're very few companies like this and you can't replicate this global payments is another very solid company, as is mastercard, pick one and go from there >> can you throw paypal in that equation and put square in there as well. i think you're going to see a lot of those notes as the calendar flips to 2019 analysts are going to look at names like that that performed positively but suffered in the wake of the

heavy selling we're seeing >> the analyst talks about a $7.5 billion buyback just because you announce something doesn't mean you need to do this that's a big buyback program. >> masterkard visa, they both over the last couple of years have been aggressive and consist innocent their buyback program i don't think it stands out as unique in this time. >> with american kpe not making those same missteps they made a couple of years back, brian when they lost costco for instance and had some other blow-ups. the stock has performed admirably and there's another one to put on your shopping list >> i think you marry into that the exposure to the consumer and the strong secular growth story from plastic digital mobile payments and what near doing there as your secular growth investor, you'll want to look at stocks like this >> very few people use cash any more it's all cards that's still going on.

the demographics of the company. demographics of the population lend itself to this. >> is that why you own visa? >> i use cash from those cash businesses. >> you're cutting grass still on the weekends >> 9,999 out of the bank. >> i'm supposed to be the mean one. >> nobody is mean. >> josh is mean. >> you can say that. the call -- on deck. hug it out, boys we're going to dig into trades on well-known names. apple, nvidia. apple, nvidia and the emerging markets, plus john says he's got a big call for you in options action we'll get to that while we go to break, the s&p 500 sector check, energy is the worst performer along with discretionary, materials. the dow is down 1.5% the s&p, 1.8%.

there are chefs, bakers and food order takers. doctors and surgeons and all the life savers. the world is alive as you can see, this time of the year is so much more than a bow and a tree. (morgan vo) those who give their best, deserve the best. get up to a $1,250 credit on select models now during the season of audi sales event. ♪ you mighyour joints...ng for your heart... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life. so, they say that ai is the building block of the future.

super. but today you're building wind turbines. morning sir. chief, the blade isn't passing quality gate. that's why you work with watson. i detect frictional loss on the midspan. it can detect the tiniest defects from just a few images to help production stay on time and on budget. i optimized the fiberglass finish to reduce frictional loss and maximize airflow. i was also part of the maximizing. for ai that can do more with your data, choose watson. hello. the best ai for the job. i've done all sorts of research,

read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪ market, john what has caught your eye today >> it's yelp that has caught my eye. the reason is it had a really

disastrous earnings report just back in november that's this drop right here, folks. that's when it fell because they were expecting to be down 35 cents, they earned 17 cents. the stock traded down to basically $30 a share. but now it's rebounded to about $33.5. we're looking for a lot more upside somebody certainly betting on that because they came in today and they bought upside calls what strike, bri, february, 35 calls, it covers by the way, the earnings report that's in early february i think the 6th of february. watch this one they came in buying upside calls. almost $2 from where the stock is right now it's softer today. the stock is by 1.7% i like it here at this level i think you're getting a steal and a lot of people may have their eye on this one next year. >> we are watching that, yelp. a big call there from jon.

see you back seeing what's happening outside the world of money and business with your headlines. >> here's your cnbc news update. utah will soon implement the toughest drunk driving law in the nation beginning this sunday. the legal blood alcohol concentration for driving in the state will go from .08 to .05. state rep norm thurston proposed the lower limit. >> we really don't want people making the call for themselves saying i've had some to drink, i'm a little impaired. the reality is if you've been drinking you are impaired, at least a little bit and you shouldn't be driving >> the american cancer society says the percentage of cancers linked to obesity varies widely by state from a high of 8% in washington, d.c. to a low of 6% in hawaii. and dash cam video from an illinois police cruiser showing how close the officer and two other cars came to getting hit by a train a car in front of the cruiser

there you see it crosses the track, the stop arm is not down. the train comes and just misses the car. the officer swerves out of the way just in time the railroad says a short in the equipment at the crossing was to blame. it was immediately fixed i worry about that every time i cross the tracks, that's the cnbc news update at this hour. >> somebody, somewhere, was looking over both of those -- that's an unbelievable -- what a terrifying piece of video, thankfully everything was all right. kelly evans thank you very much. let's go back to the markets time for your trader blitz firks up on the blitz is jd.com. they're launching an extensive bid for their operation. splitting into three units the adr is down 47% this year. >> i'm not buying it what we've seen in a lot of these chinese stocks, i own a

few is that they're basically controlled by the etfs, and while the negative sentiment in china, these will not rebound. plus china is slowing quite a bit. the economics don't make sense. >> next up on the trader blitz is nvidia, once a trader favorite now rbc capital markets cutting the price target to $200, that's 56% upside even with the cut and the price target. >> i own calls in here, the 135 calls, brian, got a couple of months for them to play out so hopefully that works out we also had rbc, reiterating them with the buy because of the gaming side of their business, they're saying it's underloved and i certainly say given where the stock is 126, $127 a share, i think it's got a lot of upside apple supplier voxcom. may start making higher-end iphones in india next year according to a report from "reuters." what do you make of this >> i make that this is probably

the sixth or seventh time we've heard something in the past year that's going to be a tremendous headwind to the fundamental business of apple. when you look at apple right now, it's simple if you're an owner of app apple, you're probably holding on to it because you believe in the business long-term i believe in that investment strategy otherwise if you're sitting and don't have a position in apple, i mentioned at the top of the show you want a point of reference, 146.83 is the low. 157 is the high yesterday if you get above 157, you have no problem with you stepping in initiating a long position >> what if this will help them bring the costs down they can produce a lower-cost iphone for the indian market? >> you're pointing towards a fundamental story that i don't disagree with you. but in terms of making the philosophical difference whether to buy apple here or not, the fundamentals of this company we already know, there's nothing new that's come out

fundamentally. >> all right rob, so let's talk about emerging markets, you're not picking the stock, you're picking basically all the world minus the developing markets what makes e.m. attractive >> we're down a lot year to date down 16% since we've upgraded what's gone quietly unnoticed is e.m. has outperformed in the sell-off it's down a couple percent and i think it's a price-and-growth story. we're trading at a pe of 11 and change times on emerging market earnings, we're growing at the economic level and word-leading rates and at the profit level of 9-plus%. when you marry those together it represents good value. >> do you just buy the e.m.? that's an asia play. >> i'm not able to talk idiosyncratic positions. however -- >> are you bullish on asia that's really, e.m. is an asia play >> i am, we are.

>> i think it's south african gold company for good measure. >> there's a lot of stimulus coming out of china right now. >> the iron fist, not the velvet glove. a viewer question coming in on nike. asking if the stock is a buy after the latest earnings, the desk will answer that coming up. reach out, cnbc.com/halftime or tweet us using the hashtag askhalftime. first, what's coming up on "power lunch"? >> we are tossing to each other. here's what's coming up on "power lunch." we'll break down the volatility strategies to deal with the roller coaster ride in the markets, 2019 playbooks, looking at the global hot spots that could dominate the front pages and move the markets next year and why the sell-off could be good for your tax bill next year we'll explain ahead on "power lunch.

selling is intensified we're seeing the dow down 412 points

you add up monday's loss with today's losses, that wipes out what we gained yesterday we'll have to see what the market does. welcome back, it's 12:40 in the afternoon here in the east traders are set to answer your questions. first up, john, on nike? >> i like it i thought the earnings report was strong i think these guys argus just set a target, $94 a share. a couple of others have ratcheted their targets down i still like it. i think they're doing great job especially internationally. >> that question came from tyler in ossaning, new york. >> probably one call where sing sing is, right? >> is it >> joe, the next question -- >> the next question -- >> steve the next question comes from steve in lincoln, nebraska, for joe. you often hear that cash, to

hold your cash and wait for opportunities. what, joe, if you are already fully invested what do you do now >> well first of all if you are fully invested in the marketplace. then you're not really investing, you're trading, because when you're looking at investing, there's multiple asset classes. that's the problem i have and rob can speak to this, there's bonds, emerging markets, international markets, there's reits, there's mlps. so to be fully diversify is what you do if you're investing if you're trading i think you always want to have some cash to wait for opportunities, that's the right thing to do. i would argue right now given the marketplace that we're in. if are you an investor and you see the volatility in the marketplace, take a very small percentage of what you could afford to put into the markets, go in there, tactically, have some fun in the marketplace. and basically get it out of your system that you're not participating in the volatility i think it's a good exercise and

i think longer-term behaviorally it will help your investments. >> next one comes to steve weiss from phil, in arizona, a little technical on the etfs, i want to start a position in the biotech. do you have an opinion on xtb, or should we split is evenly between the three. >> i think if you look at the chart. what you're going find at least with the xbi which is the s&p and the ivb, which is the nasdaq, is that the chart patterns are almost identical. so some points, the ibb outperforms, so i think can you go into either one they give you good liquidity but biotech suffers more from credit cycles than other industries. >> because they're debt-heavy. need to borrow, borrow to stay around. >> they need to go to the market just in equity not just borrow. >> is there a good lesson here

>> we always used to stay in the old street signs know what you own. >> which is why phil's approach. rather than buying single stocks, because very real institutional investors, carrie is a biotech investor, she was great at it, can discern which is a good biotech stock and which is not there's so many catalysts, et cetera i think the only way for a retail investor to own is a basket or the xbi or ibb, that's the best way. >> that's a very binary outcome. >> 60% of it is three days, you've got to know the balance of what you buy. okay, guys, trader blitz down. oil prices slipping a bit after the big rally yesterday. what should you expect from energy next year smart guy coming up in your energy playbook, next.

hey! yeah!? i switched to geico and got more! more savings on car insurance!? they helped with homeowners, too! ok! plus motorcycle, boat and rv insurance! geico's got you covered! like a blanket! houston? you seeing this? geico. expect great savings and a whole lot more. allow you to take advantage of growth opportunities with a level of protection in down markets. so you can be less concerned about your retirement savings. talk with your advisor about shield℠ annuities from brighthouse financial, established by metlife.

oil is lower after posting the best day in more than two years yesterday, 2018 overall. a pretty terrible no good, very bad year for energy prices and energy stocks. both wti traded crude and the xle energy etf down 22% year to date oil has lost about 40% from its highs of just 90 days ago. the question is, is the tide getting ready to turn or is there more trouble ahead a very nice guy with a look at what to expect from energy next year

>> 2018 was the year oil prices collapsed, along with the stocks in many major oil and gas companies opec tried to reassert its power. 2019 could be very different here are predictions one, oil prices recover. but only by a little it will take time for opec's recent production cut to impact the market but ultimately the drop in exports from saudi arabia along with a likely flattening out of u.s. production should support slightly higher prices look for oil to be in the high 50s to low 60s per barrel by fourth of july two, texas-sized deal making heats up the biggest global players know that now more than ever, scale matters. bigger is better when controlling costs, look to exxons and other big players to sell the assets they don't want and spending to wrap up some of the best acreage in america. three, opec gets smaller as the no-pec bill rolls through congress look for another major opec player like iran, iraq or both

to realize going their own way is the way to go also a bill being pushed in congress to make oil cartels like opec illegal. gain steam could, and could pass and that means that the relationship in the middle east could take a significant turn. >> no way i sound like that. >> you sound -- >> that is you >> any view on energy stocks >> they've been walloped >> 40-year low from a price-to-book perspective, trading at 12 times pe you have to believe we're rolling over into recession for these not to work prospectively. we're verweight energy >> ten years of nothing for investors. >> i got it and a lot of it more recently has been the price headwind steve and i were talking offline. you're seeing yields on some of these mlps that are over 9%. are they permanently impaired? i think not. i think investors will start to

go back toe that asset class >> the weighting on the s&p is somewhere around 6%. having that 6% exposure for s&p equities is a good hedge from a geopolitical risk standpoint they have a a humanitarian crisn venezuela that might have to be dealt with energy provides an opportunity for the investor to hedge against geopolitical risks given where the price is now, it's a good time to do it >> we'll find out. the opec cuts take place in january. they have not taken place yet. a lot of people say they didn't work they have not been effective as of yet >> let's get down to jackie deangelis. >> we're watching prices yesterday after that huge run up today we're seeing a bit of a decline, more than 2%. jim and jeff are with me from the cme in chicago i will start with you, jeff. looking at these levels now, crude is holding 45. what happens next?

>> i think that's important. $45, just crept back above what a sensational wild ride yesterday of nearly 10% move to the upside look at the correlation to u.s. equities we'll see on a chart it go back up to 50 the global growth story of being too slow that's been overdone and crude has been oversold. look for a bounce. >> jimmy, over to you. there was a point where you said we would not go under 50 technically speaking do you believe me? >> hold it that change. >> you have that consolidation period for two weeks between 50, 54 we thought if it broke 50 t would trade down to 42ish. i didn't know it would sprayed there so swiftly, it did that's lows from back in 2016. it seems like it's finding support there. i think a bounce up to 50 is in the cards. now i don't think it goes above 50 i think you sell it there. >> we are also talking to peert boockvar, he says there's more

trouble ahead for the markets. it's all ahead at 1:00 p.m. eastern time >> you let them off too easy, jackie >> limited time. >> limited time. we'll do it for you as well. jackie, thank you very much. your final trades straight ahead on the "halftime report. (indistinguishable muttering) that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo!

you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade.

and all thro' the house. 'twas the night before christmas, not a creature was stirring, but everywhere else... there are performers, dancers, designers the dads and the drivers. there are doers of good and bringers of glee. this time of the year is so much more

than a bow and a tree. (morgan vo) those who give their best, deserve the best. get up to a $1,250 credit on select models now during the season of audi sales event. ♪ ♪ ♪ ♪ ♪ what if we could turn trash into money? plastic bank is doing just that, by exchanging plastic for digital credits redeemable for everything from food to education... powered by ibm blockchain. when you understand the potential of new technology, you can put smart to work. your but as you get older,hing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered...

in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. the new capital one savor card. earn 4% cash back on dining and 4% on entertainment. now when you go out, you cash in. what's in your wallet?

welcome back the dow is down 391 points could be a wild last three hours in these markets i think we've proven this week anything can happen. i want to say first off you're welcome. you're welcome okay >> thank you >> unlike whop napner i left two minutes for the final trades joe, let's start with you. you can speak slowly >> so, i think gold. fundamentally you're in an environment where clearly the rest of the world, as i mentioned to scott yesterday, it's basically importing inflation -- deflation here to the u.s. so in that deflationary environment gold works well. the investment community will look for an opportunity in 2019. i think they'll clamor towards gold i think gold starts out '19

strong >> steven? >> i'll give you two one is cat, which i bought i nibbled on some equities >> i bought it, too. >> did you buy it? >> mm-hmm. >> i'll say short cat then >> that was actually funny >> thank you very much, brian. >> he writes his only stuff. >> your standards are low. cat trades in this range of 120 to 130 it's my hedge, in case i'm wrong on the economy going forward it's more robust >> i like it you're bonding over cat. >> yes >> fantastic >> we're close >> don't say caterpillar give us a different final trade. >> i will marry cyclical with countercyclical exposure i do that through tech, energy and emerging markets in the cyclical side. on the countercyclical side you could buy the ten-year and if you were to talk to lee cooperman, you would never own the ten-year and leave yourself some cash.

>> i like allergan, my final trade yesterday, and i like slv. joe picked gold. i'm picking silver upside call buying in silver today. >> we'll call that the berl ives trade. thank you. "power lunch" begins right now thank you. i'm melissa lee. the bears are back stocks hit again after the biggest one-day point gain in history. time for some tums and portfolio protection and the double downgrade taking down semistocks today. this sector taking a beating the past three months. down 20% and selling your stock losers on purpose. sounds counter intuitive, but investors are doing this all across the market. smart strategies to ease your pain "power lunch" starts right now ♪ welcome to "