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tv   Fast Money Halftime Report  CNBC  October 22, 2019 12:00pm-1:00pm EDT

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twitter, one of the great fcc chairmans in that regard meantime dow has been within a range. what can you say the drag from boeing, a little bit to a lesser extent today obviously a mixed picture overall. proctor and utx with nice earnings prints but mcdonald's and hasbro has been disappointments and let's get to the judge. >> carl, thanks. i'm scott wapner front and center the dow download, four components reporting, two other making stock moving news. it's 12:00 noon. this is the "halftime report." big beats, big misses. how to play the latest round of earnings from p&g, mcdonald's and more united tech not only beating but raising its outlook. the number one industrials analyst tells us why this is the stock to own in the group. under armour names a new ceo. the stock down 25% since its last earnings conference call two and a half months ago. should you buy on the shakeup?
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biotech getting a bounce in the back of biogen two names you need to watch in the space. "halftime report" starts right now. welcome. good to have you with us our investment committee today, joe, stephanie, josh, brynn is back let's begin with this big day for earnings stefrl dow stocks are moving this hour. let's talk about some of those right there. stephanie link, you go first mcdonald's is a drag comps below. they had the first eps miss in two years. oh, my goodness, your sale completely out of this company earlier or later last week, whenever it was, looks good today. >> i actually thought it was going to be worse than what they put up today a 5.9 global comp is impressive but the problem is they have to investment invest substantially to keep up with the competition. while i liked the story a while
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ago because of the digital initiatives and the ceo and all the things he has been doing they have to spend you don't get the operating leverage positively i was looking for. i got lucky, but i think it's a great company and if it weakens further i might get back in. >> still like 50 something percent margins, though, and they're spending they said $300 million on tech. seems like it's in line with what they should you wouldn't do anything differently -- >> you want them to spend but the easy money has been made the stock was up 18% it trades at 24 times earnings. >> right. >> that's expensive. >> that's a good point. >> no matter what number they put up. >> has the easy money been made. i like the way you raise that question on the conference call, traffic was negative in q3, though cramer has the same take as stef, not as bad as expected though he likes wendy's more than mcdonald's today. >> i think mcdonald's has been in the multiyear recovery that stephanie has been way early too, but it ebbs and flows,
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right. sometimes they go into a quarter that's up against a very tough comp it doesn't mean the company is not executing. it doesn't mean it's not worthy of being invested in but you have a huard hurds until front of you when you've had a great quarter in the prior year or decide to push some spending programs into a particular period of time i think for long-term investors they're unfazed. people a little more tactical they said you know what, this thing has made me a lot of money, there might be somewhere else to be then bigger picture, this is still a company that at some point will return into the law of large numbers and it's very hard to grow 10% off a base this size maybe you'll just have to shift to more of an earnings growth story, less of a revenue growth story and nothing wrong with that. >> joe, has the story turned here is this an attractive stock to own today? >> i don't think the story has turned i think stephanie has done a good job and did a great job guiding me through selling out of mcdonald's as well. thank you for that i do think that you just had the classic example of an
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overattraction to an equity name and it was very popular with portfolio managers, hedge fund community, speculators, everyone kind of piled in and now you're seeing a little bit of that allocation being paired back fundamentally i think it is disappointing, the u.s. story. does that warrant -- does the type of decline you're having today? yes, it does because as i said there were so many people involved in the stock. >> maybe you have too many people who, you know, you had to pile in, maybe you have an unfair piling out. steph and came wear say it's not as bad as expected. >> it's not as bad fundamental -- no. i agree with that. fundamentally it is not as bad but i don't think from a standpoint of who is in this name, that you've got the all clear signal i think there potentially could be further downside as a lot of large pms unload this name or pair back their holdings and that is going to present an opportunity because i agree that fundamentally it's still a solid company and josh's point they're emphasizing technology which i like. >> there are 75% sell side buys on this name
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i mean that tells you where the sentiment is. >> utx, that's a significant story today as one of these dow components that beats, raises guidance as well, stock was up, shares are up 30% this year, as maybe a headwind to how much acceleration in the stock price today. but how do you see this among the industrial names >> i think you want to look first of all it's nice to see it's really close to breaking out or may have broken out from the october 28 -- >> it's a point. it's going to happen. >> if it can break through and stay above that that's a positive thing i think you're seeing some other companies starting to break out of those old 2018 levels it's been a great name and a great company. they had good numbers and so i think if you see it technically break above that, i think it gives it solid support to go further. >> stock was 141 going back to september of 2018 right before the market crashed and then we tested that level in may, failed. you don't see a lot of triple tops in this business. i think the third time will be the charm. if you want to wait for that breakout, maybe look at a weekly closing breakout, for some
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confirmation, vooeven if you mis out but i agree and think this is a breakout in progress. >> aerospace was on fire and margins up 250 basis points year over year in aerospace that is so incredibly impressive free cash flow, the generation was much higher than expected. solid set of numbers across the board. >> we'll bring it back to the desk let's bring in steven, the number one industrials analyst on wall street, the senior analyst from jpmorgan. good to talk to you today. >> thanks. how is it going? >> you heard i think some of the commentary around utx. how would you sum it up? >> yeah. so keep in mind this is a story that's been many years kind of on the come. they've been in a heavy investment cycle for five or six years now and every year it was kind of a bit of a false start on street expectations as to when this thing would inflect. i think we are kind of finally here and i think that's important because the whole profile of this group right now
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remains that, you know, at least a couple months ago when i talked to you guys, was that the defensive growth names were getting high multiples and the cyclicals were getting very low multiples and people were nervous about those. i think you've seen that reverse a little bit here in the last obviously month or so which i have my views on, but utx is one of those where it should really be in more of the defensive growth camp and it was trading like it was a beaten down cyclical and frankly with the 6% free cash flow yield going higher, actually, you know, remains that way what we like about it is, you know, with the visibility of this portfolio in the long cycle nature of the business is, kind of this inflection in free cash flow, this is one where, you know, given the bounce in some of these more beaten down cyclicals you can actually buy visibility and growth at a really cheap multiple and you don't have to worry about this
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kind of, you know, prevailing sentiment trade which can, you know, change with each ism print. >> josh was making the point a few moments ago, you can wait for the breakout if it floats your boat, but it's coming and maybe you're suggesting as well that you can get ahead of this rather than wait for it because there's a compelling enough story it to do that. >> yeah. there's not that many stocks out there. you know, the visible growth stocks are expensive and you now actually when you look at the cyclicals and the moves they've had a cyclical name like rockwell in my group is trading at 20 times earnings, you know, 14 times ebitda, these cyclicals are frankly expensive. this is in my view one of the best of both world stocks and again, what i think long only should like about it and people looking longer term is that this really is much more about kind of a five to six-year investment
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cycle coming to fruition when you get the long cycle investments right, these turns can be -- can take many years almost decades to play out that's really where we think this company is, especially with their, you know, turbo fan on the aviation on the aerospace side. >> do you think utx specifically and other names in the industrial space in general benefit from money coming out of boeing and ge and companies like that are there other areas that you would look at as candidates for a rotation within the sectors? >> yes so our favorite pair has been over the last -- since we reinitiated on utx was long and short ge because when i look at these -- to these two engine businesses, again, ge has really cleaned up over the last several decades based on their dominance of the aero body market.
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they own close to 65% of departures globally. in our view that's a market share that can do nothing but really go down from here and we believe the utx turbo fan technology is ultimately a better technology and they are the shared gainer over the next call it, you know, one to two decades. by the way, very minimal exposure to the max with these guys really only in their business. that's a sole sourced ge engine. you know, on several fronts we think this aviation business and utx is better positioned than ge's and you're getting it for, you know, a six and change percent free cash flow yield versus ge on our numbers is trading obviously a lot more expensive. i think this is one company that can certainly benefit from any money that comes out of those guys and then obviously honeywell is another we've liked for a long time. that's a little different story.
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plenty of capital deployed a bit more on their front foot as a defensive growth stock and a little bit more expensive, but still, the balance sheet differentiates there when they deploy their capital i think that's the next kind of catalyst for that guy. >> you and our joe terranova who has a question in a second on honeywell likes it as well one more on utx before we move on what do you make of the carrier softness and the strength? how do we square that? >> i think first of all in carrier, you know, as we've said before, you know, with a diversified industrial refer rose has its thorn to quote breath michaels but this is carrier and i think that there a cyclical and secular element to this. the cyclical part is their truck refrigeration business which is down significantly and totally understandable and we think bounces back pretty hard in the second half of next year on the more secular side we
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think that the residential business probably has, you know -- requires a bit more investment perhaps some distribution channel restructuring and that is an issue. that being said, their carrier business is trading at implied multiple of less than ten times ebitda, a 15 to 20% discount to most of the peers out there. so i think that in the sum of the parts, that risk is fully discounted and not something that, you know, worries us from an overall stock perspective otis, a higher multiple business deserves something in the range of 14 to 15 times ebitda hitting bottom and now turning for the next couple years similar to the aerospace story. on net still very positive on both commercial businesses. >> we got to hod on utx the high of the day joe, what do you have? >> i think you would agree it's been challenging to find industrial opportunities over the last 18 months for me it's been odd names, sintas, masco and yes, it's been
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honeywell. do you think a report like we've gotten from utx opens the eyes of industrial portfolio managers and name looming out there that's going to report on thursday that has been awful, and you though it's 3m, any possibility 3m, $100 billion company, gives the type of performance we're seeing here from utx >> so keep in mind again, as a long cycle portfolio, that, you know, really grows off of its backlog, utx is definitely not the best indicator for the kind of real-time short cycle industrial economy a bit of a different story even though it's a diversified mega cap. 3m much more short cycle in nature you know, we remain negative on 3m here. it's had a nice bounce i think that you're going to continue to see sluggish trends. there's probably downside to the numbers and i think there are, you know, stocks that are a little more, you know, levered to the industrial economy that
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are going to probably react a little bit better to moderate weakness i don't think 3m will be a disaster especially in the context of what they put up in the first quarter, but i still see a downside buy as to numbers and it's not cyclical enough to get re-rated like, for example, a rockwell or a caterpillar might on weaker results. and they also have the overhang of this liability that i think is keeping some long-term investors on the sidelines even though, you know, the numbers have come down a decent amount 3m is a bit special because of that, you know, overhang on the liability side. >> steve, i have a good and well studied portfolio manager in front mef today, stephanie link, has been buying this stock adding to it, ge she believes in that story long term you reiterated the $5 price target recently. when do you think that story turns around what do you tell somebody like
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stephanie link who has done the work, who believes this story is going to work in the long run and is willing to wait >> yeah. i really -- i have great admiration for stephanie and the people over there. you know, the bottom line to me has always been, you know, what's the free cash flow trajectory for the next couple years and i think that over the next several months we're going to get much more visibility on what i consider to be the bridge year which is 2020 and ultimately i don't see an inflection here in the next couple years on both fronts. you know, i think we put out a decent amount of work on our views on the various businesses and i just don't see the free cash inflection, especially in the context in light of what's going on in aerospace even outside the max. i think that franchise is closer to significantly closer to a
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peak than a growth trough and so that's part of the differentiated pieces that i think people are going to probably start to learn about over the next three to six months which, as a dramatic cornerstone of value for this company, needs to, you know, to be looked at a bit more closely to validate what i think is an optimistic bull case on, you know, growth there for the next couple years. >> steph do you have something for steve? >> well, hi, steve, how are you? >> good. >> so i understand on aerospace. what about power gen i know that's been the real problem for the company. do you think that there is a bull case to be made on that part of their business or is it just maybe gets less bad and is that good enough for the stock do you think >> yeah. i don't think -- i think power gen, first of all, we will delivers gas turbines, the gas turbine business is not, you know -- there's not going to be zero gas turbine delivery.
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i have never really made that call what i will say, though, is, you know, if you believe that renewables will continue to take market share and the levelized cost of energy curve will continue to move lower, then the longer term, you know, cannot be positive for, you know, centralized generation and gas turbines i understand that there was a -- perceived to be a better result of that business in the second quarter. what i -- first of all, they resegmented the businesses it's unclear how good that quarter actually was we don't even have restated financials going back a year on this business. secondly, i would like to see them put up profits when they actually deliver turbines. they've delivered one of their marquee turbines year to date out of their forecast of 13. each turbine is significantly loss leading i just don't think it's
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appropriate to say a business is turned when one of the ways they're doing this is not delivering any product that's not sustainable i've never run a real business before, but i think you have to deliver products to put up profit, to put up profits and revenues over the long term. i think it remains a tbd and levelized cost of energy forces price down for their products which means time will not heal all wounds here and we remain pretty negative on that gas turbine franchise. >> good for our viewers to hear from you today steve, we appreciate your time very much. talk to you again soon. >> thanks a lot, guys. that's jpmorgan's steve tusa you guys want to kick this around i mean industrials as you talk about them, the cyclical stocks, some ways value stocks, are tied to the china trade issue in many respects and other issues that are individually, you know, directional to all of thes stocks, but what are we to make of these names >> so, you know, for ge, we don't own it, but we certainly understand so many people do
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such great work on it. it's a value name. so many metrics, i think there's so much negativity on the stock, i can totally see the other side of the trade that if they do less worse, i do think there's an ability for that stock itself, for that stock to be better i do think it's a juxtaposition between utx and ge the best of times and worst of times. that's why we have a stock market. >> steph, what do you -- what do you do after your back and forth with tusa? >> i don't do anything i'm staying patient. i right sized this in my portfolio. it a it is a position. i'm much bigger in cat and united rentals and much bigger in union pacific. >> you didn't have to be in this at all and you are >> it's too tempting for me. i understand what he's saying, but at $8, a lot is priced in here anything, anything could go right and the stock is going to go up. by the way, it has had a nice year, pulled back from its high for sure, but it was at one point up 40% on the year it will come back.
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culpp is a great ceo and i think he's going to execute and deliver and you will see baby steps of improvement at this company and i think you're going to see a higher stock price a year from now. >> i think steve's comments underscore the importance of free cash flow $5 billion up to $5.7 billion, honeywell, same type of situation, if you are not increasing your free cash flow in the environment as you defined where you've got the challenges of trade tensions, steve was clear, this cannot be extrapolated to mean the global economy is accelerating. if that was the case oil would be $2 higher today and that global demand. it's not this is about a specific story this is about why boeing is pricing lower, but ultimately will recover because they will regain momentum in terms of free cash flow. that is the singular most important thing when you look at the industrial space. >> that'they raise the higher ef their forecast, sales and epps growth. >> 7% organic growth that's crazy the only problem i have is valuation, but b, you're going
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to start to lap very difficult comps. very difficult comps going forward. >> you don't want to buy paper towel at 25 times forward earnings. >> even though they're delivering so well, executing so well a great company but i have a hard time. >> why hasn't this ridden the tide of the staples trade? >> it has for sure. >> $300 billion market cap you got all the benefit of that two spot you already got it >> you already got it. >> an above -- >> but not much. >> s&p dividend yield i think is 1.9. you're getting 2.6 here. >> look at these gains. >> yeah. no -- >> you won. >> if you're in the stock you won. you won already. >> i think with procter & gamble you have to think about what's interesting as an investment, u.s. investor wanting to invest in a multinational, like 56% of the business is international and of that 56%, two-thirds is emerging markets and heavy exposure in china and southeast asia and so as these millions of
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people are going to, you know, not quite middle class but moving up on the economic scale, they want to buy the best brand in the world and that's p&g. >> you won you look at the names, the gains are remarkable year to date. is it time to take profits >> i'm not saying -- i'm not saying like run out of the stock. i'm just saying, this is not like something that you look at and say, i'm going to get in right here because it's a great opportunity. >> you trim a little what do you think? steph did this with some of the -- >> i'm not a fan of this staples, you know, in general, so this is one of the better names. i don't think i'm getting paid enough in yield and i feel like a lot of the upside has been captured >> within the staples something like a costco makes sense. a great moat. >> stock is on fire. >> every time i trim it, i always say this on tv, every time i trim it it goes up and i regret it. >> seen target lately. >> i know. >> they have the moat. they have the recurring revenue stream that's the one i'm willing to pay a high multiple for.
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not necessarily a consumer -- >> we have two more dow stocks on the move. we'll get to that. dominic chu has a flash on lyft which is moving. >> it is it's moving up to the session highs right now currently just about 5% higher on roughly 4.2 million shares worth of volume the reason why is because of dow jones/wall street journal headlines saying that lyft sees profitability on a measure of pre-tax income early a year earlier than analysts expected, that the comments are coming in context of a "wall street journal" tech conference event that's happening right now in laguna beach, california, where they are interviewing the co-founders of the company we'll continue to monitor those headlines, but this particular conference, these comments, h helping to drive lyft shares higher >> i'm going to send them to josh one time uber investor maybe still. >> no. >> not lyft? >> no. >> this what is matters most, a real road to profitability. >> can i tell you something?
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they have gotten the message of the street over the last three weeks, given all the tumult in pre-ipo valuations and post, and you're going to hear this now from every one of these break-neck growth stories that said we don't really care ability profitability. it's a huge shift in narrative maybe there will be layoffs and maybe growth initiatives that they'll cut short. they get it. they understand now that the investor class in the public markets is not interested anymore in what they were selling when they first went public i wouldn't look at this like there's some dramatic change with the business. this is a change with the rhetoric that's fine. i'm cool with that but we'll see. >> yeah. i think when you look at lyft and uber they're actually such different companies. uber has so many other channels. i think they're easy to compare from a first orderer effect because they're both doing, you know, taxis on demand, but i just think it's hard to value these companies from a valuation standpoint we don't own them. we can't value them and put a
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multiple on it i do think that the narrative and the wrote torhetorics a cha. >> we'll get to verizon and disney the stocks are on the move here's what else is coming up on the "halftime report." >> a major shakeup in under armour kevin plank stepping aside for a new ceo. the stock getting crushed since its last earnings conference call in july the traders take their position. plus, biogen having its best day ever other biotech stocks getting a bounce s the names you need to watch from here. pne "halftime report" with scott waer and the traders is back in two minutes whether your beauty routine is 3 steps... or 57, make nature's bounty hair skin and nails step one. it's the number one brand uniquely formulated for silky hair, glowing skin and healthy nails. nature's bounty, because you're better off healthy.
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♪ welcome back to the "halftime report." i'm elon in washington a growing and bipartisan group of senators is raising concerns about plans to invest federal retirement dollars in chinese companies. republicans and mitt romney and josh holly and democrat kirsten gillibrand are signing on to a new letter spearheaded by marco rubio and jeanne shaheen sent to
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the board that oversees the federal retirement program asking the board to reverse its decision to benchmark one of its key funds to the all world index. they say this index includes chinese companies that have been sanctioned or blacklisted. roughly $50 billion is astake and outside consultant is set to deliver a report to the board on its decision on monday and scott, marco rubio will be on cnbc tomorrow to talk about these issues back over to you. >> there you go. 8:00 a.m. for the senator. we appreciate it let's get the headlines from sue herera. >> hello, scott. everyone here's what's happening at this hour the top u.s. diplomat in ukraine testifying in the congressional impeachment inquiry. ambassador bill taylor arriving at the capitol for a joint closed door appearance before the house intelligence, oversight and foreign affairs committees secretary of state mike pompeo says some progress has been made as the five-day cease-fire along the syria/turkey border comes to an
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end this evening he spoke at the conservative heritage foundation think tank meeting in washington. >> the truth was that it was not in turkey's interest as a nato ally to continue with that incursion and set back our shared fight against isis. we think now we're in a better place. actress lori loughlin's daughters are no longer enrolled in usc according to the university says bela and olivia no longer attend usc but unclear whether they dropped out or were kicked out after their mother was charged in the college admissions cheating scandal you are up to date that's the news update at this hour back to you. >> we appreciate it very much. thank you, sue herera. dow at session high, two stocks helping it get there today, disney and verizon verizon saying it's going to give its customers free disney plus for a year. you own both stocks. verizon and disney >> i love the deal i think it's a coup for disney this is a huge installed user
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base the vast majority of people i think if they get a trial on the service, will probably stay with it i think it's really strategically smart of disney to pursue the deals i don't know what the financial terms are. what's going to matter for disney come november and beyond, at least in the short run, is going to be how many people, not how much each person is paying do five more of these deals. i'm thrilled with it for verizon it's a marginal positive. i don't really like verizon as a quote/unquote content play or anything like that i like the utility-esque aspect of what verizon does this was an obvious breakout at 60. >> that's why i like verizon so much it is not a content play they are so smart at not being asset heavy, they are asset light. they are the complete opposite versus what at&t has done. at&t is about acquiring the content. >> time warner. >> verizon is about partnering
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for that content that's what they're doing here with disney. incredibly smart. >> it was a clown show -- >> t-mobile, you will get netflix on t-mobile. listen, i told you i think verizon will break out above the october 99 high at 6230. this is a company that you have to think of as a little bit of a technology company and that's credit to the former executive who created the foundation for that. >> the only negative on verizon is a huge amount of debt and people always -- like the bears always point to the balance sheet. but my counter would be, well debt is essentially free for this company at this point and in five years it may not be the case if they're going to have a high debt load in order to do 5g and whatever else they're doing, like this would be the correct time to have that. i don't have an issue with that side of the story. i know that's kept people out of the stock since the '40s sorry. >> but you both like verizon
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over t at&t >> i do. >> i like verizon over at&t, but i acknowledge that at&t right now has a lot of strong momentum behind it and we do have to discuss the negative impact on netflix because i do believe there is one i think after that earnings report the other day, the stock has traded horribly. i don't know why people got all excited it spend two hours -- >> netflix was down on the news today. >> it should be down on the guidance. >> by the way, for all the talk of cord cutting want to see two of the best charts in the entire u.s. market, charter, which is unstoppable and comcast, parent company of this network i don't either i don't knowwhy. i must have been taking a nap. look at these charts for all the talk about cord cutting, it's not really being felt financially by these companies in a way that's worse than what the street has assumed, i would say. >> i think at&t is interesting but i want to get through the analyst day. the analyst day is coming up and they will have to give guidance and lower guidance. >> keep your eye on that one. >> i like it better than verizon
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at this point. it's cheaper that's for sure. >> interesting disney obviously part of the story. ceo bob iger is coming up on "the exchange" at 1:15 eastern time >> i'm watching. >> big interviews today and tomorrow as well looking forward to mr. iger. under armour shares higher on news ceo kevin plank is stepping down stephanie link owns that stock which means we're going to teeb debate it coming up. shares up 5% as we speak the s&p sectors, led by energy, s&p at the high of the day, one quarter of a percent and the "halftime report" is back right after this ted! goin' on a trip, huh? takin' it off road station wagon, eh?
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let's get to -- there he is, dominic chu, right there sorry. >> no worries. what we're looking at are shares of facebook right now. the social media giant hitting fresh session lows hovering about the levels after a state-led anti-trust probe ramps up here. 47 attorneys general investigating facebook over potential anti-trust concerns as elon pointed out this hour, up from the seven that started in
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september. the expanded state inquiry happening along two other anti-trust investigations by the federal trade commission and the justice department as well, ahead of ceo mark zuckerberg's appearance on capitol hill tomorrow where he's expected to testify on facebook's cryptocurrency plans, facebook shares down 3%, down more than 10% from the recent highs in late july. still average bigger than expected volume, 9 million shares, back to you. >> we appreciate that. thank you very much for that what do you do to you care? i don't mean to be glum. i raise the issue of all this stuff for the last couple years. >> makes it hard to own. >> the stock has been resilient. >> makes it hard to own. you have to ignore it or day trade it i can't day trade it >> ignoring it -- >> i have been i try. it's hard. it's like this every day there's something new. for the stock to outperform you have to get out of the headlines and i don't think that's going to happen with this company. i've been trimming and adding back to google, alphabet,
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because i think that the risk/reward there is a little bit better. >> interesting. >> headlines less so. >> i would offer something that's probably what controversial. a lot of people will take the opposite side of that. i have not been on -- in facebook or on facebook, but i think now the clock has hit midnight it's too late. the 2020 election is facebook prepared for the 2020 election, number one. >> no. they doubled down. >> number two -- >> russian propaganda again. >> are they going to be the culprit on either side, republicans or democrats, and i think that perception, that public relations nightmare, is going to linger with this stock for the next 18 months and i don't see the stock should be above 200 and i can't see -- >> they have bill barr's hanging over their heads if they start censoring conservative channels and kicking off the eastern european bots and mischief makers that will be perceived as they're not
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being fair to the republicans and 100% the investigations will commence for the next year you have as much, if not more, misinformation, coordinated attacks from foreign governments, et cetera on that facebook platform as you had in 2016 no way around it i think he doesn't care. they asked him, they said, what do you -- what do you say about the ramping up of attacks on other candidates and he said i don't think there's anything we can do about it. there isn't. >> it's 40%, you take some money off. >> honestly the whole thing makes me sick. i don't care if the stock goes to 500 i will never buy it again. i don't. i've had it. enough already it's enough. they -- they say we're -- they say we're a media company, when that's preferable. when it's not preferable they say we're just a platform. it's this game of hopping from one foot to the next, depending on who they're facing whether it's congress or advertisers or whatever they are not living up to the
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responsibility that a company of this size i think should have in society and if you're one of the libertarian nut jobs that wants to scream their only responsibility is to make a profit, congratulations, here you go profits for everyone. >> why do you give twitter a free pass? >> i don't think they do a great job either. >> you own the stock. >> i do. i think that they're in the same conundrum as facebook and addressing it differently, but twitter has the same problem the investigations can open on them too if they're perceived as being biased and trying to quote/unquote help a democrat or whatever i think both companies are in the same box i think facebook is a little bit more blasé about it. probably because financially they have the resources to defend themselves in a way that jack really doesn't have i mean that's my take on it. i really don't think they care i think they're going to let this stuff run rampant once again. if you're one of these people that's like, well, it's only
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fair, and well, i support the president so i'm -- are you happy about that let's see what happens the next time some foreign actor is doing that on behalf of a democrat you might not like it so much. >> let's move and talk about shares of under armour they're higher this hour kevin plank, the founder, announcing today he will step down as ceo on january 1st with president and coo patrick frisk assuming that role here's what he told courtney reagan this morning about why he's making that move now. >> somebody needs to have their hands on the wheel and you can't have somebody yelling go left, go right i'm going to be there and we'll make our inputs and suggestions and drive on a strategic basis and make sure we're aligned with that but patrick on a day-to-day basis has to turn that wheel and that's where i think his ability to have a 30 plus year most of which was spent in this industry a veteran being able to join having the ability to work together, side by side, the last two and a half years >> one of the most visible ceos, you know, in america what do you make of this move? you own the shares
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>> i bought it when frisk joined i actually did that because i thought he would be a very good addition to the company and he has been he's doing the day to day, he's doing product revenues he's doing all kinds of relationships, supply chain. he hired a great person in on the supply chain of things they've done a lot of good i think it's very good to have plank still involved in the company from a strategic basis i think it's like the best of both worlds really i'm surprised it's up 5%. >> the other interesting thing he said was the company is moving from defense to offense this, you know, defending through some trials and tribulations around the company, defending itself against, however where you want to characterize it, do you agree that they're in a more offensive mode nowt e defensive posture that, you know, he admittedly says the company was in is behind it now. >> i think they're in the third i think of the turnaround and i do think they are still playing a little bit of defense, but they are certainly headed in the right direction and i think this
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move today signals that they feel confident what i was worried about, i was worried they would make this announcement and like preannounce negatively the fact that they didn't was a very good sign. >> what do you make of the stock move on this news? >> i'm shocked 5% is a big number but the stock is down 25% from last quarter when they lowered guidance or tweaked guidance kind of thing. the fact that they didn't have to preannounce negatively makes me feel better we have to see progress in north america, absolutely. this upcoming quarter. i think you will >> but you get the feeling that he, you know, they're on that path. >> yeah. >> right it's baby steps. they have operating margins of 3% nike up 15 even in the mid single or upper single digits that's a lot of positive operating leverage if there was still so much defense to play you would be surprised to see him move on at this juncture if he feels they really are in a transition from defending now they can seriously play some ball, that he's comfortable. >> i think -- >> being the company with frisk. >> re-set the table and re-set
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the narrative and i think that, you know, what's interesting also technically is that the stock fell off a cliff from 25 down to 16 or so and then as, you know,crept up slowly, 21 today, 19 or 20, 21 today. i think technically it's really healing itself and basing out and looks like you could get it probably around 22, maybe 23 if it starts to fill that gap as it dropped off from 25. >> all right interesting news today from that company. stock is up 5% as we speak biogen shares are surging and pushing the rest of the biotech sector higher for the best day since early january. we will debate the space and do it straight ahead on the half.
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how about biogen on pace for its best day ever news that the company will seek the fda's approval for its alzheimer's drug seven months ago biogen pulled late stage studies leaving it all but dead jpmorgan today calls it simply shocking aducanumab is back what do you do with this nobody owns it, right? >> i don't have ownership on the desk of this name.
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>> it is interesting because in march when it fell from 320 to 230, on the reverse of this news, it has not gone back up to 320. i think it hit 318 at the peak today and sold back off to 292 it is interesting from that. you didn't get a full reversal of what you lost just six months ago. >> because you have to get the final results, right until you get that you kind of can't analyze it at this point it has the potential to be huge. you have to wait for the final data >> yeah. of course. the other issue is, which we wanted to get into with jon who is in chicago for us today, whether he saw unusual activity in this game this kind of news, jon, begs that question, i suppose >> indeed, scott and the 2nd of october we did see a lot of unusual activity. we saw it at the 220 strike, 220. and as bryn said it hit nearly
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320 today. did it in the premarket go through 322. the calls were at one point $102 those calls were at one point $102 in the money and they were paying just 2 bucks for them at the beginning of october they bought november 250s and november 270s. they reaped the reward of those purchases. where it is right now, i agree with the panel's assessment you got to wait for stuff to move further along and we're not seeing at he of upside speculation, mainly we're seeing today's activity, out of the premium money, they sold those 300 calls, i think, they got up as $122 and sold it down to 1 buck today so, that's a lot of selling pressure, saying they don't
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really think it goes over 300. >> were you running with this one, too >> we had small position on here it's just, biogen's been both a heartbreaker and generally these kind of bets have been much more present to the downside. this time, i didn't put enough money on the winning horse, judge. i wish i did. >> that's all right. joe, do you something on this. >> i just think there's long way to go before fda approval and you have to question why the reversal, why the reversal and the evidence from march and now. if the fda approves this drug we know what it means but i think to jump in today on this and expect that you're
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going to see significant m momentum there's a long way to go on the part of biogen a lot of evidence they need to present to reverse bryn's point. >> by the way, biogen's ceo will be on squawk tomorrow. don't miss that given the move today and more importantly, that potentially incredible news coming out of that company. coming up the traders are answering your questions we're going to do it now joe, you're doing it first from todd in boston, why is it trading like this, is it a long term hold? >> it is a long-term hold. it's struggling. it report earnings on october 31st rolling out beyond sausage on november 6th ahead of the january 2020
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launch, apparently, they tested this in new york i don't understand what's wrong with new yorkers the number two sandwich. >> i like the coffee, i don't eat that stuff >> not my thing. steph, william in california, what do you like in the semiconductor sector >> i like amd, it's up 72% year to date. it's not cheap i wouldn't buy it here if you own it i'd hold it. >> what is your opinion on carnival. >> a little painful, when we did buy it, we sold calls. the stock hit 40 earlier this month. bounced a little bit to 42 if you get less worse news, you know, out of europe, they do have x poe sure there, a little bit of move in the stock >> okay, josh, for you, keith
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from florida, hasbro the right stuff in. >> i don't know. missed earnings by 17% >> it doesn't have the right stuff. excuse me. >> complained about ties with china -- should i stop, do you want to finish now you can continue >> don't buy >> that's it yeah, i don't know sorry, brian, not a buyer. right here on cnbc >> it's not personal the stock was up 50% going into the number but i feel like when you're going to miss earnings per share you should say something at some point during the quarter and, look, you have every excuse
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in the book. you have tariff issues, retailers cancelling orders because they're spooked by china. o don't see what the rush is t buy this thing down. they've got issues. >> we'll step away we'll come back and do final trades is the monolithic view of emerging markets obsolete? at pgim, we see alpha in the trends driving specific sectors of outperformance. where a rising middle class
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right here from credit suisse today. number one top picks, more than 40 names they consider just that as u.s. stocks you should own right now. i want to run through some of these. what do we think of chipotle is after the bell today united pacific ibm. ibm. salesforce honeywell. >> i like alphabet on that list. it fell just below 1300 going back to april. they had this magnificent quarter last time they recorded. i think google will challenge that high and i think it will get it above that's my belief i'd be a buyer here. one of the most reasonable valuations buyback happening. lots of things will ultimately can be spun off, et cetera >> on google also, their drone
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delivery just got faa approval so going into rural areas that's a huge game-changer as well. >> steph, best name on this is what >> i like union pacific. it stalled a little bit recently after having a really good run if you think the economy is growing 1%, this company will do it pretty women. >> salesforce. >> let's do finals josh >> i just want to mention, i really think one -- the financials, the only group in the s&p 500 that's negative year to date in terms of flows to the etfs that has negative flows last week almost broke a record for buybacks in this space >> atlantic goes overweight on bank today, bac.
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bryn >> another value area, the energy names follow the financials >> reiterate on the financials with josh. >> good stuff. "the exchange" begins now. thank you, scott hi, everybody. here's what's ahead. magical comeback new deal new streaming service. stock near all-time high we'll speak with disney ceo bob iger in just a few minutes as shares of rival netflix are down again today. and big business, a blockbuster drug for biogen and mcdonald's big miss today. plus, it gets worse for wework, a payout for the founder is raising eyebrows.


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