model and deployed it very successfully >> yeah, capitalism tends to work pretty well, and people feeling good about buying a pair of shoes because somebody else gets one, doesn't always extend long term. >> unfortunately >> unfortunately, yeah that will do it for "squawk alley. let's get to the judge and "half. all right, jon, appreciate it i'm scott wapner front and center the year ahead for your money as stocks could post the best performances in more than went years but how far can that momentum go? it is 12:00 noon and this is "the halftime report." stocks are poised to make impressive returns but under pressure today as the market makes its final push to year end. your next money moves are coming up plus, the big targeted increase for one faang stock one is poised for a blowout. it's our "the call."

>> "the halftime report" starts right now. welcome, good to have you on this our investment can, jim lebenthar at gilman hill asset management we begin with market, stocks suffering the biggest one- quest lies ahead when it is time to take some profits as the calendar turned and continued to ride the momentum, and we do, joe, have a lot of momentum. you're not going to fault anybody for taking chips off the table given the run we've been on >> no, and consensus very optimistic which is unique to the environment we were in one year prior listen for someone very tactical it makes sense to believe that you will get a correction sometime in the next couple of months, this validity in the assertion and you can tactually

trade around that. defining the playbook for 2020, what particular sectors are going to carry you where you want to be for the end of the year and if you reflect on $2019, scott, been all about technology you take the s&p year to date. the s&p tech return, up 31%. do you know technology is the only sector outperforming the s&p total return so if you're lucky, which the desk did a great job at encouraging get be ownership to financials as well, that was up by about 28% you've got a little extra added performance but you had to have the technology performance. and i think 2020 you're going to have to have that same move for it to be the same year technology oriented. >> shannon, what do we do in the coming year? >> i think there's the shorter term and longer term there's a bit of evidence that we could be a built overbought here, especially on thesmall

capsize, russell 2000. joe and i talked about this over the last year, think about diversifying if you look at the dollar, the dollar is down flat this year. we're seeing movement in international stocks and goldry is a nice safe haven continuing with the momentum you're seeing in some of the names in the u.s. market but also diverse feig your portfolio, expanding your universe because there's going to continue to be equities outside as well. >> do you think people are too positive, jenny, on the show, fear has left the building? >> i don't think fear has left the building i have a lot of clients who are feeling fearful but hopeful to invest thinks oh, it's at new highs, oh, it's at new highs when i think of my playbook for next year, you're both exactly right. statistically, it's likely that

we'll be hire, but it's also statistically a probability that wohl have a lot of pain in the interim. so just prepare yourself for 2020, do lamaze breathing, stressor, whatever you need to do stick with that market when it gets scary because probably we're going to have an okay year >> longer, jim, we continue to have the uptrend december has been a good month santa claus rally typically lasts for a little bit longer. the longer this goes, do you get more nervous or continue to ride the momentum that you seeming have at your back? >> yes, you get a little more nervous is the answer to your question i look at next year, scott, i do think from where we are now and the end of the year, if we're calling for 7% profit growth, we can keep the s&p 500 up 7% year to year. if we shoot up like we did in january 2018, if you're up janu

for the rest of the year i don't think we have to have some corrective selloff in january, i don't think that's the case but a little flattening, and then let the earnings reports come in in the second half of january what we're looking for, what do companies say of the future, are they optimistic, that's what you got to look for the second half. >> what's the real question of whether you get a front-loaded year, because of all of the stuff in the back half of the year and then how front-loaded is the first half, if it is such? i mean, ed ardenny who is on our show never waivered from that. he says if you continue to get a push, you can get a 10% to 20% correction if you have a melt-up in the near term which is not that crazy to think you can have a push >> sure, we had that 12 months ago in the correction.

looking forward to that, saying is there a pull forward to the end of the year? again, that's a consensus expectation because consensus expectation scares me a little bit because particularly that can be long. specifically relating to financials, financials, the last three or four months have been pulling their weight expectations are trading and i want to see financial performance here from earnings be very strong so that moment item carries with financials we don't want to lose financials in this formula. again, i go back to technology itself i also would say lastly you're playing a dangerous game if you believe you're going to flatten out in the middle of the year and not believe it would come back in november or december i would be very careful playing that game. >> it just depends, there's a lot in front of you. you've got more trade stuff. we haven't even had the impeachment trial yet. >> right >> we haven't even thought about getting the names of nominees on the slate yet.

>> but we're going historically successful investing is predicated on controlling the emotion, controlling the behavior, yes, these are volatile moments and things that we want to do in the rebalancing process but you have to endure your way through 2016, we talked about the exposure, high yield that allowed to you get through the volatility you felt during the summer i think in 2020 what is going to be important having diversification geography-wise >> hey, scott -- >> i'm helping you out there >> you were going through a list of risks there and you were putting them in the second half but i think there's one nearer term than that which is the february -- early primaries. anything could come out of that. but if you all of a sudden have a progressive candidate leading after new hampshire that may boil down the markets. but elizabeth warren or bernie

sanders coming out of new hampshire in the lead would definitely -- >> to me, the biggest test for the market are going to be earnings, right? i, you know, raised the issue i can't remember a period where you have stocks that are -- that are this high, at this multiple, setting new records with this kind of momentum with such uncertainty about what earnings growth is going to be. predictions are all over the map. >> yeah. i think the market is going to want to seat growth companies perform well from that perspective. we're looking for that reciprocal rotation. the etf, the third largest etf was minimal volume etf, that's mcdonald's, that's visa. you're looking for good earnings on both but the values we're looking to rotate to >> i don't know if earnings are that big of a risk

i wonder if earnings in 2020 are just going to be, just don't screw up you don't need market growth to jim's point, it's not surprising it's something political. i think we're marching on and i wonder if we're more on track to be almost like an australia with a really long expanded expansion so we don't need to hit that >> but don't you think the market has come to these levels on the expectations -- >> i'm not sure. >> -- that earnings are going to live up to what we just put to the market >> i don't know if they need to be strong. not because earnings are going to be huge but it's that dearth of other opportunities >> well, strong is a relative term >> okay. >> what would be an acceptable level of earnings growth to justify stocks being either where they are, or potentially higher into the new year >> to me, high single digits is fair i think because i can't really

get fixed income and because private equity mutual returns are calibrating forward towards public equity, i think all of that gives you fewer alternatives i think that gets you to that 18 or higher pe or earnings >> jim talked about january 2018, if we hadn't had the tax cut at the end of the 2018 into january 2018, we would have been looking at valuations that would not have been that supportive for the gains that we saw so i'm concerned about that because i feel if you're looking at it from a valuation perspective, it's not to say you won't be invested in u.s. stocks but the other opportunities outside of the u.s. become more compelling if we're sitting with meaningful lackluster earnings growth coming into the year >> one of the issues, we sort of discussed it, but the theme is if it's time to fear the cheer, so to speak. our mike santoli is taking a look at that, where sentiment is

for the new year, mike >> yeah, scott, it's a little elevated as we might expect from the one-way rally up through december, from august, where you got people caught too defensive and too pessimistic, that's been turned around. i would very much emphasize this is a short-term, tactical atmospheric condition that you have to be aware of. kind of a cross segment are showing extremes i would say highest since january 2018, but not up to the levels of january 2018 is how i would characterize them. that creates a backdrop that maybe you're susceptible to a shakeout on the news flow. we have seen a tendency over the last couple of decades to have a minor gut check in january that being said, i don't think there's anything really in the broader trend to suggest that this would be a major peak, especially corporate credit

conditions remain amazingly strong so watch in the early part of 2020, how the bond market absorbs what is going to be a rush of new corporate issuance, where there has been a rush, and a new one, that's going to push out the day of reckoning for debt levels of corporate america. so those things seem like they create a bit of a foundation you know, in hearing the conversation, the most plausible thing in the world right now is to say, oh, well, maybe the market can go up in line with modest earnings growth this year and we can have a ding single dt growth in 2018, had you stocks up and down and this year, earnings basically flat and stocks up and it alerts for things that you don't see coming one thing i would point out, almost nobody seems to think bond yields go in any direction right now so that's something i'd focus on. >> rates, perhaps, aren't a risk

that people aren't considering enough mike raises a good point not fed-induced, but just market-induced >> market-induced that is determined by market participants as may be motivating the federal reserve to act faster than the federal reserve communicated at the end of 2019. to me that would be the risk maybe there's a rise in yields or acceleration in the market growth where the market says wait a said the federal reserve has to go back to raising rates once again to me, that is the risk. >> are they going to raise ricks if they get 2.25, 2.10 >> no, 2.25 or 2.10 are not going to get it done >> not that far away >> so talk to me at 2.75 >> the other thing, mike, history is on the side of the bulls. if we put together a calendar

gain like we're going to do with the s&p, you're up 75% of the time in the year ahead not only that you're up on average more than 11% when you put in the kind of gain we did in the s&p >> that is true. obviously, the market goes up 2% anyway it's not as though it's telling you that the odds are super in your favor how many 25-percent plus years have there been, is that a significant number to say this is what the market does after this kind of year? i would say no but the real point of what you're saying, there's nothing that says a big up-calendar year that makes it seem like a peak i think you should probably say if there's no recession the market tends to go down a lot and not day down for long. >> to that point, jim, goldman today says there's less than a 20% of a recession coming into 2020 >> yeah, i'm certainly not making a recession call 2020 you don't have inflation, you

don't have aggressive fed and a strong labor market. >> oh what a difference a year makes right? this is where we were a year ago? >> but what we do need to think about next year is what we've had in the last two years is the continuation of trade topics we're all talking how things are that phase one is agreed to and potentially signed and there's a brewing war between the u.s. and the european union we're slapping tariffs on argentineans and by the way, brexit really looks like it's going to happen in the first quarter these are things when you take them en masse, what that means you're going to have involved volume difficuvolatility i think you get 7% increase in s&p but with a heck more volatility >> how about a weaker dollar, too? that can be a catalyst in driving u.s. stocks potentially higher as well >> well, i mean, joe talked

about the treasury, if you think about the potential for european yields to go higher we could see money kind of flow out of treasuries i think all of those are potentially a cattlist that could happen, to your point, scott, in the first half of the year that could create asset flows that are different than what we've experienced over the last two or three years. >> mike, we appreciate it, very much that's mike santoli joining us there. i find it interesting in stewart of talking about, stocks that have gone up a lot in the early part of this selloff today, even though you've cut the dow's losses in half, only down 100 points now, it was a lot of the leaders that people were taking some money off the table. and i look at your roku move today. you sold roku. so just take us through the explanation. you've trade it a lot this year. >> yeah. >> why before the end of the year was it time to take yourself out of the picture? >> yeah, the direct answer to your question is the momentum has been lost in this name

that was the trade it was a momentum name i happen to think what the company is doing is fabulous, but i can't justify the valuation on any metric. place to sales i think is 15 times. i just don't need that the momentum has been lost so i want to be out of it scott, you have talked about it a lot, and this is clearly something i'm out of my lane on. but my new year's resolution is, scott, i'm serious about this, i'm not going to trade roku anymore. it's out of my lane. >> you're not going to trade roku >> you can hold me to that, we can have fun with that >> is that a broad statement of stocks that you're not going to deal anymore there are other stocks out of your lane? >> yeah, you raise a very good point. we keep talking about the s&p sm and the markets multiple but individual stocks are not moving in lockstep with one another. and something way over value i

want to be out let's take an alphabet which has had momentum over the last few months but something that's valued, that's something that i'll stick to. deeper finance or energy definitely a flag in the ground as far as 2020 goes. i think these are places that you can, regardless of what goes on in the markets overall, so the hackneyed phrase it's a market of stocks not a stock market applies to 2020 >> i was wondering what you were going to do with this. stocks down 4% look, there are a lot of stocks in the universe that mirror roku's performance >> i think that's critical in trying to be tactical in 2020. the semi, semi equipment names have had a fabulous year software in technology have, again, had a blessed year as well that's where you identify the pockets of strength. and then you find, you want to get lucky with a copart which is

a leader or chipotle, those are the names that are going to help out your performance i go back and look at health care and i look at the underperformance for health care in 2019, and i wonder which, and i'm positioning for it if you can find similar opportunities in health care, particularly with the narrowing around the upcoming election and the regulatory risk combagtsing th impacting that sector, i think the sector has opportunity >> in health care, i think you guys were talking about on the show the other day, densefly, a great example. consumerables. not as insulated from hmo changes. i worry about in health care, you're going after areas that have performed much better than the end of the sector. i understand you're insulating yourself against potential drug changes i wonder if there are changes in some of those names

like j & j to pick that up and have exposure and still have gains this year. >> what about, look, you deal with yield and dividends and al of that, what is the outcouple for stock outcomes for stocks. the yields for utilities and staples, the kind of ones you look at are out of favor >> you know, i don't want to paint it with a broad brush. sixfive, and b & b foods all have an interest just because of dividend yields they should all be down or all should be up. it's interesting, like at a mini reit conference, i was reminded that people historically look at reits like a yield play, yield play, yield play and that's not really the case anymore. there's only two segments within

reits which -- sorry, health care, health care is one of the only ones left where there is even yield left, right so, i think you can't paint the yield stocks badly still what i do, i'm always picking off individual companies. this year, i've just about kept up with the market but i haven't been in any other big names or sectors i think that could be a strategy, too. just look for the companies out there that were left in the dust not because they're bad, maybe because they weren't in an index that was popular or they were until a sector that was a little underweighted but this has terrific growth potential. i think this mike a stock market year but could be trading really good >> we'll take a quick break. here's what else is coming up on "the halftime report." faang stocks having a banner year in 2019 but will the group continue to outperform and a new bullish call from one of those names

the investment committee is ready to debate it in "call of the day. and healim"t hfte report" with scott wapner and the traders is back in two minutes

looking to get your business off to a fast start in the new year? it's go time! switch to comcast business and get fast internet on the nation's largest gig-speed network. plus, complete reliability with 4g lte backup. and, cloud-based security to help protect the devices on your network. greenlight your business in 2020 with fast internet and voice for $64.90 per month. switch now and get a $100 prepaid card when you add comcast business securityedge. call today. comcast business. beyond fast. hi, this is joe from "the halftime report. i've got to tell you, i love the ask halftime segment keep the questions coming. we love answering questions at

the end of the show, how do you do it? >> go to cnbc.com/halftime or see us on twitter and welcome back, everybody. i'm sue herera here's your cnbc news update at this hour. the white house says president trump and russian president vladimir putin discussed counterterrorism cooperation and the potential for arms control in a phone call on sunday. putin called trump to thank him for information the u.s. provided that helped foil a potential holiday terrorist attack in russia syrian opposition group the white helmets releasing video showing what they say is shelling on russian forces in the village on the southern aleppo countryside a moderate group said russian warplanes carried out a total of 19 raids in that region. three people including a child were killed in an early morninn kansas several others were rescued by firefighters no word on what caused that

fire and the new york giants have fired head coach pat schumer he won only nine games in his two seasons at the helm. the team also announced that dave gettlemanological remain as general manager. scotty, back to you. facebook son pace for its best since since 2013 getting a new bullets price target to go along with that. ages capital raising its capital to $300 per share. highest on the street. strong fundamentals heading into 2020 all right. keep on counting the gains in facebook does that make sense 300 bucks? >> yeah, we own it i like this call the call talks about we're going to power through regulatory pressure and increase advertising. we agree with that it should have 40% earnings growth year over year next year. we think it's just a powerful

company with a long runway ahead of it. >> and there is a belief that companies like this that tech space under fire are going to get a slap on the wrist rather than getting snacked upside the head >> yeah, clearly an example of that, we had that with facebook in europe. and it seemed when facebook left europe, there was this general feeling okay it's not going to be as bad. i think it correlated to that's where facebook began to rise in terms of its performance you reflect back on stock, you think about it for the decade, this is obviously the most successful ipo for the decade. 450% above its ipo price and there have been a series of acquisitions that have allowed it to endure a lot of the regulatory headwinds that it face, instagram being the obvious one. think about of the contribution in terms of revenue that instagram has had to this company in the last couple of years. it's one of the reasons why it sits $15 below it's all-time high >> well, just think about, you

don't even need look back the decade, just think of this year. the beating that facebook took in the court of public opinion and on capitol hill, and the stock is still better than 50% year to date >> right >> that tells you everything you need to know >> okay. i don't think the sentiment around the privacy concerns has changed. i actually think what's changed, they've shown that they can possibly monetize some of these applications that they purchase. so, if you're seeing the montaization from what's out there and from instagram, that's what everybody is looking for from the stocks. so they're able to put the privacy concerns aside and if you actually get renewed strength in the core facebook app as well, that's kind of an extra cherry on top for owners of this stock. >> duopoly, it's not going to be broken up, that's what you have. that's why the noise around zuckerberg and facebook all year long haven't meant much to investors. every time the stock has pulled back it's been bought. >> right i also think mark zuckerberg did

a really good job of taking the bull by the horns, addressing it people are beating him up for this, i think he genuine and earnest and forth right in addressing the concerns. >> i'm sorry, but you can make an argument -- that's a little bit much, i think. you can make an argument that they can completely clueless at the beginning of the year in terms what the actual issues were there wasn't a week that you can go without a new facebook are you kidding me story hitting the tape >> but he came out and addressing it. and i think they're genuinely trying also, people are aware of what the privacy is, i use it i just post what i don't care ed everyone knowing about i don't know anybody that dropped facebook or insta because of it. >> in general, are we going faang as a group again in 2020 you had -- nothing everything traveled together in 2019. what about 2020?

>> i don't think we can trade them as a group. and i've always felt that for several years. i think you've seen some breaking away. apple's performance is a clear breakaway to the positive. by the way, going into 2020, i'm not bullish on facebook, i take the side that the regulated tore issues are not going to matter i think they are going to matter i think they're a pinata in the debate >> it was already a pinata what's the difference? the candidates are talking about them >> exactly wait, i was saying earlier this year in general for market and individual stocks you can see a very good year over year return with volatility. facebook is that name where you'll see the highest volatility this was ground zero in the 2016 election for meddling in that election it's certainly going to come up in the primaries and the debates. >> why is that going to impact the stock's performance? >> i think your question is why

didn't it impact in 2019 i think that's inherent in your question >> it was the biggest punching bag in tech. >> yeah. and it mattered in 2018. it didn't matter in 2019 the derivative of that, you can say it's not going to end up in 2020 i'm in alphabet. my theory is number one, the issues are less. and google has good momentum right now as soon as it turns i'm probably going to be out of it because of regulatory concerns bottom like is this, it's a market we can see and some of us on our desk say we don't think it's going to matter. i'm on the other side of the trade saying it is going to matter for that reason, i'm not on facebook, when google's momentum, alpha's outlook changes i'll be out of it. >> and it doesn't matter why is it going to start

mattering now if elizabeth warren talks about it on the stump? >> it didn't matter in 2018. it didn't matter in 2019 my point being you can't derive from those two pieces of testified that it won't matter in 2020. >> most important for me is amazon got up to 1900 last week now, you have an area technically to see if it breaks out. does it break out in 1900? we need amazon to participate in 2020 in the fang conversation, just given the size of it. >> yes, underperformed the s&p -- >> it was okay when it underperformed because you had apple, you had facebook, you had microsoft. >> right so as long as you have those continuing to outperform why does it, to use your words, have to >> well, let me say this, if we're going to have apple perform the way we did this year in 2020, look for a really great 2020, okay >> i would agree with that >> let's just say that apple and microsoft and facebook have a

little meme reversion. just look at that performance, sand i need from amazon to see strong outperformance. >> that's a fair point options bulls are betting on tech and energy. pete as two trades coming up in just a little bit. first, though, let's give you a check of the s&p sectors today energy and financials are leading the way. stocks have pulled off their lowest levels of the day the s&p ilstl down nearly 10 points "half" is back after this. this piece is talking to me.

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welcome back to "the halftime report. i'm frank holland. take a look at shares of cannabis stocks. xo down 4% canopy down 3% ticker mj on pace for its fourth down day in the last five. close to last month's record lows, this as illinois gets set to join michigan and the recreational market on new year's day industry competition is expected to heat up scott, back to you >> all right, frank, we appreciate it. transocean shares are having their best month in nearly two decades. and options traders think there's more upside ahead in 2020 pete najarian joins us from

minneapolis. pete >> hey, how are you, scott good to see you, talk about transocean, go back to late november, 4.5 stock. oil was trading to 55, but now today, 62. this stock has moved up towards $7 a share they're buying the january 24th expiring seven calls in other words, they're extending out an extra week looking for a little bit of room for the upside for this to break out even more than it has. that's been a very swift mover since november 20th. they mayed only about 35 cents for the calls. stocks are virtually where it was before i like this call buying. we talked about energy, energy hitting time and time again now in the last call in the last two months now they're accountacontg for transocean and now a second one, we're looking at microsoft

microsoft is interesting, you talk about performance and what's going to happen in 2020 microsoft had an unbelievable year, right? well, they were owning the january calls going into today, the january 157.50 call they're buying the 165 strike. so given where the stock is right now or where it was, it was trading about 157.25 and now buying 165 strike calls. really aggressive. looking for the upside i hastock, scott we talk about this all the time i like the calls right now i'm bowled up with microsoft >> yeah, wondering how much these stocks have the potential to pull back so many of them have done well, right? software stocks and cloud stocks? >> yeah. they're going to have to continue the performance to justify the move s we've seen i some of these stocks, pete

>> yeah, it's interesting. they've had a great run when you guys were talking about facebook and apple and all of the names in microsoft as well in this space in software, what i liked the most about what i'm seeing here, this transitional stock that have turned themselves -- let's call them a cloud company. they still have so much potential upside they're not the top dog, aws, amazon, that's the top dog in cloud. can they eat into that market share? and i think they can i think there's plenty morein terms of growth, exalscott. i think it's go growing at enough of a clip that this stock could be stock that we might be talking about at $200 a share. >> wow, good stuff, pete >> thank you >> that's pete najarian for you today. a lot of cloud stock, adobe, salesforce, microsoft, joe, adobe, microsoft

>> docusign, that's a new one. one i think is a potential acquisition target from microsoft or adobe that's the e-signature company one of my names i'm going to hold for 2020. >> what about the outlet for some software names? >> i think it's about the enterprise spend at the corporate level. joe and i were talking about this a few minutes ago, you talk about what is the enthusiasm for stocks performing very well in many of our portfolios we need to continue to the see enterprise spend maybe not over the same space over the last years but i think that is something interesting coming out of corporate earnings this quarter. all right. coming up next, it's all about you because we're ready to answer your questions. send them to us. we've got them bank of america, amgen, valero, maybe more in two minutes. mmm... good.

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when you add comcast business securityedge. call today. comcast business. beyond fast. the dow transport it's are set to end the year above 18%. according to our partners at kens

kensho that tends to bode well for stocks a year later. the s&p gains an average 10.10% trading 75% of the time. for more go to cnbc.com/kensho we're back with some of your questions. joe, i'm coming to you first from howard in milwaukee, wisconsin. explain your new position in tips >> sure. >> it was right around the time we were visiting with gunlock as well >> it was absolutely at cost jeff gave great commentary a lot of what jeff had to say gave credibility to it it's out of consensus, it's power to the portfolio it's the belief that maybe, okay, we're going to get a little faster rise in rates and inflation expectations than right now is consensus so, i have no problem adding that into the portfolio, i believe out of consensus allocations sometimes will help you gain throughout the year >> okay.

jenny, to you from franklin in new york amgen, should i stay long? >> sure, so, we're long amgen in our portfolio, it's trading cheap. 15 times earnings, high single-digit earnings are for the next few years there's a push between existing drugs and revenues in our case, we're holding to it and we might trim it if we need to buy something new and use it as a source of funds >> shannon to you, from tom. what do you think of valero in 2020 >> performers outperformed this year with the energy and the play on shale. i think if you look at valero over the next few years, they have several projects coming online between now and 2022. it's a great yield for investors between the share buyback and dividend yields.

i would bite uy it for 20 went. >> jimmy, coming to you from gabby in staten island is bank of america at these levels a buy or sell >> hi, i like bank of america here i think bank and citigroup are one of these with jpmorgan the money center banks will appreciate as the yield curve continues to steepen a little bit and rates go a little higher having said that, i like citigroup better than bank of america. slightly better price than book. >> good questions. coming up, disney movies dominated this year. shares up 30%. can the stocks continue momentum we're going to debate that next. but first, joe is here >> like ships passing in the night. >> like where are you? >> thanks, scott, 2019 saw the

biggest wage gains in a decade can that trend continue and what sectors could see the biggest growth in 2020 right around the bend. plus, it's the best-performing tech stock of 2019 up 330% and far outpacing the competition. the name and whether there's more room to run and with $66 billion in play for sports media rights a oklo at who could come out on top that and more on "the exchange." that and more on "the halftime report" back after this. and how much better i look. myww join for free + lose 10 lbs. on us.

welcome back let's talk about more stocks as we look ahead to ones that may work in 2020 according to barron's buy large cap stocks with low lower costs. work buy large cap stocks, viacom, netflix, coca-cola >> the labor costs don't matter to me that much. i guess they are going to cut some fat out of the combined companies and spruce themselves up for a sale. when we talk about cutting out fat, that usually means labor costs, so i'll give them that. but i think it's woefully undervalued. in the month of december it's had a good return and i think that will continue in 2020. >> it says to play a profit squeeze, buy large cap stocks with low labor costs. >> it would be disingenuous for me not to talk about netflix since i own it and i sort of agree with jim

i think that the issue with netflix is that the competitive environment for them is very difficult with the launching of all of these other streaming services i do think that they probably are ahead of the game as far as creating efficiencies in their business around streaming and being able to get more content to the international markets so that's why i own the stock right now. i do think they're going to continue to grow subscribers and they probably know how to do that without spending too much and other companies may have challenges with that. >> no ownership of coca-cola >> i'll let you pick apple or coca-cola. >> jenny doesn't own any of the four. >> don't own, wouldn't own, so take it away. >> i own apple obviously i'm believing that apple is in the midst of a sweet spot in terms of its revenue growth, potential after experiencing a year where there was multiple expansion so i think the revenue growth will come back in 2020 coca-cola has been a strong performer. pepsi has been a strong performer as well.

i think pete najarian owns both of those both of those have recreated themselves they've moved away from the carbonated beverage and that's helped the business. consumer staple oriented, i like both of those, coke and pepsi. >> big underperformer this year. it was up 16%. >> in a market that goes up 28%, you're going to get -- >> i know, but it under-performed by 50%. >> it did. it's not that type of year where you're going to have coca-cola and pepsi and walmart outperform the market, thankfully. >> within my debbie downer not owni owning, the one i would be most likely to own is apple it's the highest cash flow and lowest multiple. >> we will take qua ick break and come back with final trades.

♪ ♪ ♪ ♪ don't get mad. get e*trade, dawg.

>> announcer: one of wall street's biggest bulls, sees signs of a potential pullback percolating in the market. for more, head to cnbc.com

>> we are well off the lows of the day. the dow is down now about 88, s&p has come off as well s&p came into today with a third of a percent way from having its best year since 1997 you've got the best year since 2017 no slouch at all we've got a little more work to do the final trading day of the year if you're going to set a bigger milestone there santa claus rally is supposed to last into the new year someone remind santa of that >> i think he heard you. >> i hope so let's do final trades. we have about a minute and a half or so you can give me a little more detail than you normally do as

to why you like the stock. >> we're having the discussion about the christmas rally and does it continue and the fact is we have a question, what happens in january? i don't know and i don't think anybody can say with definite certainty what will happen in january >> waiting for the new year or what do you mean in january? >> definitely i think that some of this gain has been the absence of selling because people don't want to recognize gains. and also people are on vacation. so who knows what happens in january? i'm going to play it safe. one stock in one area that i think will do well in january is financials and citi group. >> good stuff. jenny. >> i'll double down on the financials we just added american express, which should have 10% earnings growth for the next two years. trades at half the multiple of its peers. so we think it's a great time to own it. >> split the 30 seconds we have left. >> joe talked about it earlier amazon were in spending mode this year. we've got potential revenue acceleration and i think when you look historically when you want to buy amazon, it's after

they've spent a lot of money. >> o' reilly automotive, i think it's a strong performer. >> that is your list of final trades nice to see all of you, and especially see all of you as well that does it for us on the "halftime report." "the exchange" with joe kernen starts now >> thanks, scott welcome to "the exchange." i'm joe kernen and here is what is ahead despite the sell-off, the markets are on pace for a blow out year, with gains of more than 20% with such big moves, we're going to ask the question are stocks too expensive? we're asking it, maybe they're not. plus 2019 saw the biggest jump in wages for employees in a decade we'll look at whether the trend can continue and what areas we'll see the biggest growth and c suite changes, menu revamping and a huge tec