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tv   Fast Money Halftime Report  CNBC  February 28, 2020 12:00pm-1:00pm EST

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or just much more broadly, the fact that we live in an environment that has a lot of disruption. >> david thank you. good stuff david hen shell of citrix. next welcome back we get a jobs number pmi, we will look for the south carolina primary over the weekend and see how the race is shaping uchl let's get to the judge, and the half. i'm scott wapner the fastest correction the stock market has ever seen getting a little bit deeper. welcome to the "halftime report," where we are focused on your money, as always. the investment committee is here with me. stephanie link, jon najarian, shannon saccocia, benn brent venn gel audio rob seechen of ubs dan greenhouse is back he's chief economist and strategist at solis management
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steve leishman alongside us helping us make sense of everything going on what the fed is thinking about all of this. the worst week for stocks since the financial crisis the vix surging, bond yields falling the even new lows. stephanie link, a minute ago the nasdaq was positive. it went from positive to down 1.5% in about ten minutes, if that. >> i know. >> what does that tell you about sort of where we are is that how a bottoming process happens? doong we are close >> i hope so i think people are very confused obviously. right? it is not surprising that the market went down because of this, because the virus has gotten so expanded the surprise has been the speed of the decline to lose $6 trillion in market company in six days, that's remarkable i don't know when we are going to bottom. but i am looking at an rsi on the s&p at 20. and vix, jon you can talk more about that but a vix at 47, to me it seems a bit extreme. then i look at what happened in the shanghai index
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it fell 14% the beginning of the year and then it bounced on february 3rd it is 14% and 2% off its highs that could happen to us. i don't know what the catalyst would be maybe it is a global central bank coordinated evident that's the rumor, i think that's why we are bouncing around a bit today. as you know, i have basketball slowly big i have been wrong. but when i have coke going from 60 to 50 when i have nike going from 104 to 85, twitter from 41 to 38 >> have you been adding. >> all three of those. >> today. >> yesterday. >> in the same wheel house of what we are going through. >> yeah. >> do you want to touch doc on this vix. >> sure. >> i asked your brother the other day what was the number to suggest maximum pain i asked if it was 50. >> right into we got to 49 >> as usual. >> he said 38. but you needed to see something more elevated than where we were. >> you did. >> what does it tell you that we hit 49 >> yeah, 49, 48, or something
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like that -- so 49.50, let's call it. that was a huge spike. it happened in the premarket we got to 47 during the regular session as you say we got to 49, 50, or thereabouts. and one thing that really stood out to us, scott, both in terms of the vix and in terms of, to stephanie's point a lot of the stocks that she talked about as well as the indexes we had just been seeing selling and volumes accelerating on any rally. people were selling rallies. now, actually, on dips, we are seeing likewise volume surgeon our excusers we are seeing volume surge like for instance the qqq is this morning. which is the nasdaq. >> which went positive. >> right. >> and the semis are acting like that today today. >> surged on volume. five, six times normal volume. popped that things up from the lows of the day which was around 199 for the qqqs, drove it all the way up to about 207, and
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then once again volume surged and this time it was selling pressure so we had seen the selling pressure for six straight days every rally was sold right no now, today is the first time after that big pop in the vix when we are seeing buying -- or volumes increase also on the dip, not just up at the top. that's a good sign that we are finally starting to get -- i am not saying it is over, scott. >> sure. >> but to your point and pete's point we need to get to that cathartic sort of flush. a vix at 49.50 certainly feels a lot closer >> why don't we go to this fed notion that steph mentioned, the market -- maybe you used the word hoping is the best word to use for the coordinated statement of some find waush is talking, bullard is making comments. the market is looking for a 100% move by march. what do you think is going to happen this weekend, if anything >> i think it is possible something is going to happen
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my suspicion here is that the federal reserve is looking for some creative responses to this. i think they -- my best guess is they have internalized this idea that the rate cut has a very limited effect in this environment. and so my guess is that they are thinking about alternative responses here that might mirror some of the alternative responses from the global financial crisis for example. when there is a hurricane, scott, the federal reserve is -- there is an enter agency that goes out where they urge banks to give rely to borrowers in the case of difficulty of repaying i think the fed can make a statement that it is ready to provide liquidity, and ready to cut rates. but before i do that, this is now on the screen here what has been coming out of the fed has been the opposite of this they have very much held the line, and really, bullard sort of ups the ante touchdown when he says rate cuts are a possibility if a global pandemic actually develops. and they move to the right evans also said it is premature.
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there is this comment from bullard which i think the market sold off a little bit before he decided to sell off on other thing that were out there. look at those three statements then let's go to the probability starts it is not a hope it is definitive, we are sure it is going to happen, 100% on a rate cut with a 53% probability of a 50 basis point. >> there were headlines before we came on from goldman sachs's expectations they see the fed cutting 75 basis points in the first half. >> okay. >> four rate cuts built into the structure. >> all sides and what you just had on the wall there. >> the reason i asked before the show started what time futures open on sunday which is i think if we open to the downside in a serious way 6:00 on sunday night, i think either because of that, or even if that's not the case you could have some statement from global central banks and certainly an interagency statement. i think it is too long now for the fed leadership not just
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evans, bullard -- to have been quiet. my guess is powell is sitting there working with some very good people to have on the fed trying to design some creative responses. >> is there a chance that they would want -- powell would want to do something, make some kind of a statement during market hours today? is it more likely to wait, digest things a little bit on the weekend, see how futures look, and then do something? >> i don't think so, skochltcott i tell you, it was walsh this morning who -- he has been there in the crisis before he said they want to get to the weekend. they want to get to the weekend. and they would like to make the decision in the absence of this strong downdraft out there although, you remember -- and you guys are old enough to be there, maybe not everybody on my left here, the women of course but when all it took was greenspan in 1987 to say we are there to provide liquidity. >> that's it in a nutshell. >> that was a big deal he didn't have to do anything.
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>> i couldn't agree more you need a plan of action, not action so far there has been a vacuum of information i don't care if that's monetary policy, fiscal policy. i actually think there is some risk of action too early when it is not supported by the economic data i just think if you start to treat a patient that's not critically sick yet just because the markets are pressuring you into doing that. everybody is saying the fed is behind the surf. >> the patient may be totally happy with an ice cream cone. >> correct. >> rather than the actual medication. >> exactly right. >> makes you feel better. >> exactly right i think there is a number of catalyzers one is progression in containment. you get some progression in contain tent there could be a valuation catalyzer here typically, markets are over sold i talked to lee cooperman before coming on the show today he spent a lot of time on the structure of the market. this is not fundamentally based. it is headline based
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it is the elimination of the uptick rule and you have got the downward momentum being sold i think that's a really bad thing. when you have fear gripping the market like we have today. any time somebody is fearful, public speaking anything like that, they are not going to make decisions rationally i think we have to make rational decisions right now is this let's try to hag some rational discussions. >> can i make a simple point, which is important to the fed? which is the market has cleared to the downside. there has not been disruption in the market, which is the kind of thing that would bring the fed in for sure. >> uh-huh. >> but as we have gone down, nobody is happy that it has gone down but you have to be at least somewhat -- what's the right word -- becalmed the idea that it has gone down in an orderly way without disruns i am sorry to interrupt i take total issue with the fact this has been orderly. three to five days, i am sitting
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on the desk, watching the screens. the only word you could use i would argue is crash whether it is justified or warranted or not aside the market is effectively crashing i would take issue with characterizati characterization. >> it is different than you cannot buy or sell a security. that's what i am talking about that was when you had real plaque in the arteries of the financial step and the fed had to step in and provide liquidity to those markets i am not saying it is not serious. i am just saying in the way it has happened it is in a way that does not engender fear so far of the market. >> when the parent was very sick -- right, when the patient was very sick wooshs definite essentially a healthy patient. in '08 when we saw that same type of price action i think it was justified. you said whether justified or not, dan i agree. we are having major price moves completely fear based. i think if we have a catalyzer it is going to be a totally different situation than '08 you don't have the same forced
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selling that you do in '08, which i think is your point, steve. into what i want to know and what people are trying to figure out, the biggest of the big investors i have been speaking to, to the smallest of the small, who i am thinking about, whether you should feel comfortable enough yet to buy, shannon, the dip, so to speak, right? goldman sachs says today it is too early to add risk tactically there is a lot of commentary out. barclay says it is too early morgan stanley says we are sellers of rallies which seems to be some of the action we have seen in the market as i said when we started that real rip in the nasdaq to get it positive was sold immediately i mean it barely lasted longer than i have been speaking now. what do you think we should be thinking about, telling people what are you thinking yourself >> i think you have to consider why we are selling and why the uncertainty is different than,
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say, the financial crisis or what we are facing now the uncertainty is that we have something that we cannot anchor to a particular situation. and so that creates a lot -- it creates a lot of difficulty when you are thinking about your overall asset allocation and you are thinking about whether it is time to add risk or decrease your risk to the overall portfolio. if your expectation was is that we were going to continue to garner the gains that we had last year into this year, then it is difficult to add here. if your expectation was that we were going to have muted global growth and that we potentially have strength in the back half of the year based on a reexcelation of manufacturing then there is still an opportunity here to add to stocks you think about the alternative. if you didn't like the ten year at 155 you certainly don't like it at 117. and you are not earning any money. if you think about it in just a short -- whether it is a short-term perspective or a longer term perspective, if you need to gain -- if you need to have money that's garnered from your portfolio you are not getting it in bonds. for me, i feel comfortable
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adding to stocks here. i think that based on our expectations for the next five to ten years we believe that stocks will continue to move higher our view is that this is probably overstated. i went on -- you know, i went on a show last week and said that i thought that a fed cut would be an overreaction. i certainly think two or three will be an overreaction. i believe you can add to risk thoughtfully that's how we have done it you really need to think about where you are adding. >> what does thoughtfully mean, to where, where have you added >> we have taken our more cyclical names, we realized the rotation to value we were anticipating would be later in the year if not happen at all. we have taken the cyclical names and concentrated our positions in higher quality, good balance sheet, higher dividend paying names. stephanie was talking about some of the names that pulled back. they are great companies that are going to be insulated that
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that are going to grow their business outside of gdp that you can add to your portfolio. >> with good balance sheets and dividends that are strong and safe. >> sustainable. >> not tied to a commodity you can't look to the energy stocks for yield although i own a few of them because they have gotten just hammered i think if you are looking at higher quality companies, the blue chip names that are starting to yield 3.5, 4% it is almost a no brainer to me to b picking way at those kinds of names. >> cramer's perspective, too. >> i agree. >> some of these things -- he didn't use the words no brainer but the message was almost the same that some stocks have gotten decimated to the point that if you have some cash to put to work that you have got to put some to work i am paraphrasing what he said i think the spirit of what he was saying is that easy for me to say. >> it is not just coke and p and g though both are more attractive it is like a cisco, like a
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caterpillar. it is some of the cyclicals i got it, i understand why you are reducing exposure there, but some of the stocks not only are they hit on valuation but they are also yielding 3.5, 4%. that's attractive. >> the goldmans don't buy the dip, don't add to risk from another firm there is another side this that says we are going to get a v shaped bounce. tom lees word today. doesn't say where the bottom is but they believe a v shaped bounce is coming. >> i think we can all pontificate what we think might happen and nobody knows exactly what is going to happen. but i think if you have a long term view and as shannon was saying if you look at where bonds are today, for people with a diversified allocation what is going to work over the next 1 months, stocks versus bonds, if you are putting a dollar to work today? our view is it is likely to be
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stocks that outperform bonds over that period assuming that this overall panic sub sides i don't know if it is really going to be fed action that causes it. i think it is going to be probably an announce men from the world health organization calling this officially a pandemic and you get a max fear moment and maybe that's the moment where the line in the sand is drawn and we get more constructive buying. >> has anybody come on your show and said over the next 12 months we think bonds will outperform stocks it came out derogatorily but i didn't mean it that way. it just hasn't >> we were talking about orderly, disorderly. other thing worry watching closely to see if things are spreading outside of the norm. high yield is a place that people are watching. i know you are you have been talking about it already on the air bank of america is certainly thinking about it today. you have had the third largest outflows ever this week out of
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high yield they say the risk of a credit event is, in their words, surging. maybe that's overdoing it a little bit >> yeah. >> i don't know. but there is activity taking place in high yield that is making some at least nervous your eye is on the right ball there. that's the thing that changes this dynamic here. this is one of the situation where is the tide is rapidly going oumt we are going see for lack of a better metaphor who has a swimsuit on and who doesn't. we know we have been living in a very low rate environment and it is something that the market has learned to rely upon in such a way that perhaps some of the lending criteria out there was not as strong as it might have been and perhaps banks begin to be concerned about these things i don't want to be the one to start this bing before it is out there but the fact that bank of america is looking at it. >> it is out there. >> the fact we are thinking about it and i have to just question the panel a little bit on this, scott, in that underlying all the talk is that somehow this
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all goes back to normal. i am trying to think of a person who is 75 years old that has been running a portfolio like a 35-year-old because they have been allowed to for the lack of risk that's been out there they look at this now, and they say wait a second. a 10% in three days means i really cannot get out of the way of this. my portfolio is for lack of a better term, misshapen for my age. and i just wonder if this is a humpy dumpty case where maybe you can't put all of this back together again let me finish this thought real quick. there are times that come along where there is a trend perhaps the trend is lower rates or whatever it is. and the shock comes along and accelerates your move to that moment lewis banking used to say that oftentimes when you are a trader something comes along and noxious into a different atmosphere meaning it is totally changed the game
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2008 being an example of how people think, how people allocate i do not think this is that event. i just cannot see that playing out. you know, when somebody is sick they get a kidney stone, they go into the hospital, a relatively healthy person they get addressed they resume normal activity. if they have a bad case of it they stay in the hospital for a hoang time, their muscles atrophy and you have significant damage that's sustainable. i think there is something about the pace of this transition and whatever the catalyst may be, hopefully it is a progression towards containment in the markets that it started. you can start to see it play out in other markets but if it is not, there is going to be other possible catalyzers, whether it is the fed providing liquidity, not cutting rates to me, i don't know -- you are pushing on a string there in some regard. or it's some fiscal policy response or effort that is at least talked about. >> let me do this. mike santoli is at the stock he
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can change again today listening the all of this. i know you have opinions on what you heard. what stands out the most >> i guess first of all on the whole question of is it time, are we oversold enough i do think it is always mart to kind of excuse yourself from the idea that you are going to catch it right and essentially assume that this kind of movement is highly stress markets that are going to be spring loaded in their moves. her going to make almost everybody on every side feel stupid periodically as you go along. if you kind of give yourself permission kind of not the try and get every wiggle right, that helps. i think everything you look at if you want to go down the checklist of are we washed out enough, have we administered enough pain in a short period of time, have we gotten enough of the concentrated unwinding of overcommitted positions by poefl investors out of the way i think it says yes coming into today. but we overshoot all the time. i don't know that the time element is something that we can
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yet say is our friend. simply because i think we have to stress test the market for the headlines everyone knows is coming right? we kind of know we are going to see more about the spread of the disease, about corporate responses to it, about economic restrictions, all the rest of it so that will tell us if the market is discounted enough in a short period of time, the history of buying washed out markets with a multimonth time line going ahead tends to be favorable. but with feeling stooped along the way because it doesn't happen in an instant it doesn't happen as a moment. it happens as a painful process. all of those things are in the mix right now. i mean, today you can look at some areas that were leading us into this situation and got really bombed out they are trying to rally. but that could simply just mean everybody who got it right is just taking some money off the table. it is difficult to extrapolate. >> so difficult because there are so many unknowns you can't determine what price
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stocks should be trading at if you have no idea where earnings are going to be impacted by all of this. >> hold on to that. >> goldman is talking this week about no earnings growth that's not how we came into the year stocks were not priced for that scenario they may not be priced appropriately gore that now either. >> with idiosin at contractic events like this at some point you pivot beyond them and start thinking about 2021 earnings when you do there is no very that the s&p can recover in a v shaped form. 202 earnings are going to be higher and we can get into them at a lower multiple. >> something that's relevant with respect to what he just said, the assumed v shaped rebound. i want to be chris tal clear i am making no political comment whatever except to accept the market's assumption that a
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bernie sanders presidency is worse for the market than a trump presidency if we accept what the market says then the v shape comes out of the democratic convention when you are nominating someone who the margaret believes is not as friendly. and as you look at forward earnings, you are in a different environment. if you believe that the virus reduces the odds of a trump re-election and increases the election of bernie, not the case i am making then you have to row assess how you view earnings for the next 8, 12, and thereafter. >> you don't have to qualify it ten more times we get it. i save you, and everybody else, frankly. >> steve, just on one thing. steve, do you remember -- i am older than you. >> i don't want you hitting me >> fist bump. >> good at running and ducking >> it used to be we would always say you should have a percentage of your assets in fixed income
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strategies like bonds and so forth that match your age. in other words, that 75-year-old would have 75% of your assets in bonds. >> no way that's true. >> which would be a 14% positive on the year more than offsetting the 12% or 14% on the 25% of their portfolio. all i am pointing out. i am not saying everybody should go out and rebalance and do that but if you are in assets that all go the same direction, so you are in efa, you are in eem, in the u.s., so forth. when you have something like this that's hitting stocks around the world it shows that you are overweighted in those equities. >> everybody at this table can hang their head high because i happen to know everybody at this table having told people you have got to rebalance when the market surges. >> right. >> you have to have to have a mix of assets and you can't be reckless relative to your age. there is nobody at this table who hasn't said that at least once on this show. >> i think you are right about
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it. >> how much -- >> if the stocks like the microsofts and the apples and the amazons, if they led you on the way up and now those kinds of stocks have gotten decimated, $1 trillion loss in season of days from the most marquee of names in the market right now, and certainly where a lot of the focus has been in big cap technology, do you need these steph, to rally back, to led you know that it is okay to take the market back? if they led you up before and they have gotten hammered now, do they have to lead again >> it sure will help, being 26% of the s&p 500 weighting, right. >> industrials are not going to lead you back, right i mean it got to come from here. >> this is the biggestity with aing so this -- they should but here's the problem, microsoft is still up 1% on the year nvidia is still up 12% on the year most of these stocks are still -- maybe they are flirting down 2, 3, 4% but nowhere near what the energy stocks are doing or the industrials are the financials even some of the
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consumer discretionary i would argue you do need tech certainly to support but maybe you also need consumer stocks to support. you are it radio, industrials energies and financials collectively are not that big. >> i was going to follow up with a question to you as you were just describing the stock is still up on the year whether that's a tough sign in and of itself that it needs to come down even more. >> exactly right technology i think in general has to come down more. the only technologies name i am buying is already down 12% that's cisco that i was talking about. >> the biggest sector of the market hasn't finished correcting yet $1 trillion loss in seven days could get worse. there is thou -- the market can't bottom until those stocks are done going down, right i mean seems logical how can you have a bottom if those big cap stocks, the biggest cap once are going down in the biggest group in the s&p. >> because, scott, because the human race will get over this. we know a couple things. >> i am not saying the margaret can never bottom.
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>> this is not the plague -- i want to answer your question it is not the plague pretty sure it is not the spanish flu yet. we lived and markets prospered in this country when polio was more rampant, smallpox was much more rampant we have the ever-present flu i think the question to answer and i would love stephanie to answer this, is when all this is done, and when we have learned to live with this virus as part of the human existence, will i be happy having bought stocks right here >> absolutely. absolutely not a question in my mind. not a question in my mind. >> so i can buy stocks here. i can go to the bahamas to what i want to create is a carina-free zone right there. >> you know what you can do right now, you be upgrade your portfolio. you can buy blue chip quality names that are down 10, 15, 20%, diversify out. >> will i be happy you will be very happy. >> the opportunity -- i understand microsoft is not down
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for the year but it is down a lot from where it was weeks ago. there are people -- youe saw inflows into bonds in the last two quarters you had people who still have cash on the sidelines looking for names that they feel are longer term what we call quality growth companies already going to be buyers for stocks for these companies the next few days. >> buyers for microsoft because it is green. we are getting more green out of the s&p 500 heat map it is still a deline for the s&p. i am not trying to make it feel or sound better than it is but at least you have something there. >> i want to make a point on technology needing to be there in order for us to come out. in 2008, financials were a incredibly large percentage of the s&p 500. the same questions were being asked, did we need financials to lead the morkt out the answer ended up being no, you don't. the market broadened out
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there were different catalysts and we went on a big run and financials didn't participate in a lot of the way. >> i don't know that financials have as much money in them as tech. >> the percentage of the s&p. >> it is not as big as tech. >> not now back then it was, it was 35%. >> also the assumption was in a the financial sector was essentially not going to be the same after the crisis as it is now. i don't think there is any of us saying coronavirus is going to change the prospects for technology and the integration of technology throughout every other sector and part of business i understand where you are coming from. >> my point is you don't need it you can have a broadening out of the market it can be something different that ends up leading the way in my -- >> like what >> communication services. that's not tech either >> you made i sound like you were going to say well it is industrials or whatever. you are trying to be cute with that >> i am cute. >> he is too cute. >> some of the stocks that would be considered tech stocks moved
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into the communication services group. >> but they have different catalyze catalyzers. >> our cfo survey we did in the last 72 hours shows 62% of the cfos we interview are increasing the ability of pli yoes to work from hem virtual work. >> there you go. >> change towards trend. >> can i ask you a question about cap ex are you going to write it off for 2020. >> stephanie, you answer your questions without me you put yourself in the c suite and say is now the time to break ground >> not now second half of the year. assuming the virus gets controlled. >> i think what you need is clarity. >> i doubt it. >> i will add this i don't think -- >> i doubt it. >> yeah. >> just say no >> i don't think the company -- i don't think the company ceos have more visibility on the outlook than we have right here.
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right? i don't think they can sit there and say you know what, six months from now my business is going to be x. that's a big part of the way the market is trading. if microsoft could come forward and say here's what we see, we are sure that our order book tells us six months from now we are going to be reaccelerated. but they can't say that i don't think. >> you have to contend with the fact that this year's expectations may have been punked big time. >> yeah. >> because of the expected front led of the gains you could potentially get this year. which a lot of people talked about. you front load the year before it gets messy with the election cycle. now you just wipe out 13% of your market. so did you just blow your opportunity to have a nice part of the year? >> this is an atrocious link in the market obviously to be clear, most of it is the multiple it is not earnings, which raises two potential outcomes one is there are further downside to come once we start haircutting earnings because you have had a a contraction in the
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s&p because you hold markets flat a 2 1/2 times contraction is fairly high. over in high yield and distressed where solis lives it is not the greatest widening out we have seen but it is darn bad? when i mentioned earlier, the high yield, and what is happening the outflows some of the spreads opening up a bit it raises the risk of defaults. >> yeah. >> there have been people warn being leverage, corporate leverage, too much debt skpk wondering what the catalyst would be to sort of tip it over. now you have some people opining maybe this is one of those things that you could never forecast. >> let me take 30 seconds and paint the backdrop, when you think about the fed being accommodative, the desk and our viewers treschly will view it through the market multiple. the fed accommodated we can pay 20 instead of 19 or 20 instead
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of 18 times earnings in the credit market one of the way it manifested itself is in tighter spreads and where companies are able to borrow money from the market and effectively never pay it back. i am oversimplifying it. but you have created an environment where tons of companies can get financing on super accommodative terms when they don't -- when they shouldn't. they are also hiding their leverage metrics, another long story. the combination of which provides a lot of tinder for that lower end of the credit market. >> you are talking yourself into an interesting place if you are the fed chairman, is what you want to do to make that worse? >> let's just cut rates again. >> cut rates. >> so they can put more loans out there with lousy -- >> i don't know if you meant to go there >> i have got -- >> the fed should not care at all about the companies that i am talking b. this is not microsoft. this is not apple. these are insignificantly
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smaller companies in relation to the overall economy that should not be on their radar. >> i am going to take a quick break. thank you for being here, dan greenhouse mike santoli, grateful for your time get yen i have a report in my hand from mike mayo, banking analyst talking about taking down some numbers. you will want to hear this that's next. big banks getting better mike may's cutting targets our desk owns some of the stocks we will debate it next and send in your questions amid the mardi gras turmoil to reach us, go to"ask halftime." skop skop and the traders are back in two minutes.
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i'm sue herera here's your cnbc news update at this hour. secretary of state mike pompeo sharply criticizing government-led attacks in the country's idlib province saying there is, quote, an enormous iranian problem inside syria end quote. >> these attacks that are syrian regime-led, iranian supported hezbollah supported,
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underwritten by iran, along with the russians, are now causing a humanitarian calamity in syria some tourists are starting to leave a quarantined hotel in spain's canary islands 130 guests getting the go ahead to check out the remaining 600 vacationers at that hotels are to stay under lockdown for a total of 14 days after being exposed to the coronavirus. many heavy smoke remembers not getting screened for lung cancer cdc researchers looked at data from ten states and found over 87% of the people who met the criteria for a lung exam had not gotten a ct scan in the last 12 months lung cancer is now the leading cause of death in the united states you are up to date that's the news update this hour scott back to you. >> we appreciate that thank you sue. now to phil lebeau >> gm is going to be hiring 1200 workers this spring as they ramp up production at two plants in
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lancing michigan adding 400 workers at the grand river plant for the cadillac ct 4 and a of then at the delta township plant they are adding 800 workers and a third shift so they can increase production of the chevy traverse as well as buick enclave. what is interesting about this, this is a case of the company saying look we still see strong manned demand out there special on crossovers, that's why they are adding the shirt shift when it comes to the enclave as well as the traverse. gm adding 1200 work thers spring and workers at two of its plants in lancing michigan. let's talk about the banks i mentioned a notefrom mike mayo banks have gotten hammered this week mike mayo is out with a note today. he cut price targets on every big bank in his coverage universe citing the obvious, really, interest rates we have told you what the ten year is doing. really all along the curve, how rates are just dropping like a stone. he takes -- bank of america goes
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to 40 from 42. by the way, he keeps overweight ratings on everything. he hasn't downgraded the stocks, just cut his ratings city goes from 94 to 100 goldman sachs goes from 260 from 300. jp morgan to 148 from 1 5. morgan stanley from 50 from 58 reiterates his equal rate on morgan stanley he downgraded them after the e trade deal important to note that steph, why don't you have the first shot on these. >> not surprised it is not only the yield curve but it is the fed. if they do cut, 75 basis points is not priced into these stocks and slower economic growth on the flip side i think they will benefit on the mortgage side on the housing side there is that. i think the capital levels at these companies is still very
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robust wells fargo is yielding .75% back to the yield story. actually added to that one, i think it is a housing play, a turnaround story, and then you get the yield. my goodness i agree. i hope every analyst lowers numbers next week, get it out of the way and move on. >> maybe by the end of the day it is harder to look at a bank stock brenda when you have the ten year, we just showed it, at 116. >> it is hard in that environment and hard in an environment where there is all kinds of other attractive growth companies whose talks have also fallen when you are looking where to put incremental fun, the financials are inexpensive, but the environment is just -- it is challenging. it seems like it could become even more challenging. when deciding where to put money, financials wouldn't be our first choice no dak, if you didn't like the banks when the ten year was at 130, you are going to hate it at 116. what do you do with these stocks are they all no touch? are they down -- look, i mean,
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in a month bank of america -- every bank on my list here is down double digit percentage points in a month. now, it has been a horrible week, so a lot it happened this week nonetheless, 15.5%, bank of america. 18.5% for citi and 18.5 for goldman, et cetera, et cetera. >> right to mike mayo's point, and perhaps somebody reacting to it, kre, regional banking etf, scott, one of the unusual activities here it is they bought puts in there bigtime today at the 45 strike about $3 under where that stock is is that somebody like a stephanie link or a shannon or brenda that's managing a big chunk of money and wants to shore up a little something underneath the market so they can ride out the volatility? maybe. either that or it is a straight out downside bet i would, you know, not know which one of those two it is right now, scott but it is a big trade. and obviously, the kre is that
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regional. >> abouting index is one of the ones woe keep our eye on a lot because the big banks aren't going to be merging with each other. these guys could. >> you know, i agree with everything that everybody has said we are neutral >> okay. >> let me make the point, though everybody is in the same boat. when everybody is in the same boat, it is reflected in price i think if you are really patient there are some selective opportunities to buy but i would argue there is really high quality banks that as we come out of this you can make money on over time. >> the boat has taken on a lot more water. >> no question. >> as rates have dropped. >> and potentially more water coming into the boat depending on fed action. but i think you know sometimes these stocks discount that in advance. they are trading at a significant discount relative to any other sector of the market >> so just -- >> plus i wait for -- you get a jamie dimon coming out saying he
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is buying his own stock in situations like this. >> exactly right. >> the dimon bottom. that's not out of the realm of possibility. not speaking about bank ceos more broadly, you start to get commentary, i bought -- >> tepper brought mlps at the end of 18 and they went on a moon shot rally because they were so oversold. >> i think it continues to define how you look at financials i think there are areas in financials, jp morgan or exchanges, there are areas within the financial sector that you can avoid being completely focused on net interest income i think as long as you are looking at it from that perspective this will lead the opportunities to add to your financials exposure. it may be in one of the larger banks provided they are focused on increasing their fee revenue. we were looking for a tail wind for financials this year
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it has certainly taken winds out of it. >> there is some talk today -- i have so many notes in front of me i don't remember who said it but somebody was out there urging you should buy a mastercard or credit card stocks that bulled down hard as some of the other stocks have gotten hit. forgive me for not having it at the top of my hide what do you think about that they are still trading at 33 times forward estimates. i know they are great companies, but they are to the cheap by any means and definitely have earnings risk. we saw with mastercard i think paypal is more derisked because the multiple is much less and the stock has come in so much year and they had a crappy year last year and i think they are turning it around this year. if you are in that space that would be -- i actually own it. that's the one i have been pigging away at. but the other two are sell the just to rich on valuation. >> jim did a segment on stay home stocks. >> i have those, too >> sorry >> go ahead. i will find those, too. >> i think when you are looking at it in terms of how the
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consumer is going to spend money, i still think that if we get continued increase in the be in of coronavirus cases and we start to stay home more i think there will be less consumer of we were -- less consumer purchasing >> walgreen's. everybody stocking up on -- not just the masks -- the masks are for protecting your expeck forrate from going on somebody else it is not keeping you from inhaling it. >> i think amazon is a better play because i don't want to go into the store >> costco is the better place, buy in bulk. >> i was in the city trying the get hand sanitizer major chains, no one had it. >> let's do the credit card thing. >> okay. >> my executive producer told me
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which note it was, so i was able to find night all right. >> wells fargo advises picking up credit card names, several are down double digits from recent highs following mastercard's preannouncement a fair thought >> i think even though they are expensive, if you look at visa, it is expensive, but this is a stocks that never has historically gotten to a point where everyone said back up the truck valuation is attractive. lots of recurring kevin. are they going to be impacted? most likely yes. but i think you have to have a longer term outlook and say is this a good moment for me to pick away at a high quality company with incredible mother-in-laws unmatched under. >> the cramer stay at home stocks, which you mentioned. we have them on the wall let me mention these again we did a short shrift of the segment. zoom, teledock, josh brown has been talking about that for
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weeks and weeks. persona, et ceteray, ring central, square, shop phi, nvidia, adobe. we mentioned some of the chip stocks had gone positive look at nvidia today what about this list the rest of these names? >> these, i understand where he is coming from, i thing there are names on here. i think you should probably look at these names whether you would with an to hold them beyond the coronavirus. a name like adobe. we have that in our portfolio. we think it has a great competitive market position. you know, for zoom, i mean that is also clearly an up-and-coming. this telecommuting trend isn't going -- may be accelerated to steve's point but that's not changi changing that's going to continue to go move forward. >> zoom hack on this run, as you know, in one week it is flat it has given back 10% today it has had a great week. my pal i see him in my
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peripheral vision is -- do you want to sit down. >> no i am going to just stand here. >> go, jimmy. >> i thought you were walking up here >> put me in, coach. >> the linkster -- >> what made you run out. >> edon't have a microphone on you. we will talk amongst ourselves. >> what made me run out is you mentioned the stay at home stocks. >> stay at home stocks cramer. >> this is not a natural time. >> we are getting a mic for you, jim. some of the other names. square no one owns square. >> i own square. yeah, through 85 yesterday or something like that. >> tell our viewers why you agree or disagree with him then we will get jimmy set up. >> it is just a processor, as you know i think a lot of things they are doing to compete with a venmo, even, i think are effective, jim. they are not going to be taking out paypal and venmo, but i think what they are doing as far as square, sq. >> they have this tremendous business where they have your
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receipts so you can get a loan, and it is great -- their cash app is great. you have to read lisa ellis. she is at behalfate nathanson. i like this -- lighting is not . >> i miss him already. >> lighting isn't good there. >> you look like the shadows over there. >> we love when spontaneous stuff like that happens. absolutely. >> i thinksquare is -- i like this taken over very seizely. you know that paypal could buy them. >> can i ask you this? moving away from this for a minute what do you make of the action in the market? >> it is very constructive. >> an hour ago, the nasdaq went positive wept from positive to down 1.5% again in the blink of an eye. >> algos wow. move forward the chair.
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>> fix your mic. >> i think what's happened is that -- recouping. machine control. it just immediately flashes to read so this is a great opportunity if you believe in certain stocks to buy them at a discount particularly high growth tech. >> watch your mic. >> my daughter got me this tie from new orleans. >> we should be championing that because it creates irrational volatility. >> they're - >> watch your mic. >> guys? give me a hand here. take my seat out outrageous that i just dropped in but these are special times. >> yeah. >> talking about some of the stocks and i'm here at the office imperative to come in because we all want to find
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things, i believe, that actually work and the ones i picked were ones that work better remotely than they do at the office. >> you don't worry that the stock that is you picked aren't down enough? >> trade desk. i kept waiting for trade desk to be down but then reported a great quarter. it is not going away because what do they do? if you cord cut, advertise, use them to get the millennials who love cord cutting. my kids have cable, insulting. but there is absolutely without a doubt a zoom i know people feel zoom moved too much they're saying i'm the collaborator with a company you love there's a lot of stocks i think are problematic i don't want to buy. not yet. >> do you think some -- we said these -- what is it? like five or six of the big cap tech names that the -- marky
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ones they have erased $1 trillion out of the stocks in 7 days. have they come down enough >> i'm not a chartist. okay when you look at the longer term chart for apple, i love apple, it is still too early for me that's the chart oh my. okay right now steph is looking at the exact same chart i'm looking at it's rolling over. >> the five-year. >> i love microsoft. i believe in instagram not as much facebook i think that alphabet will break out so i don't mind buying amazon look these are companies -- built for nonchina commerce that is at home uniquely at home for these you know whether it be search at home or whether it be amazon at home so they work in this environment. i mean, maybe just work in every environment but this one in particular you want to stock up? go to amazon. >> did you say -- did i hear you correctly that apple -
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>> i think apple can still fall more because there's atwin problem of manufacturing in china and selling in china and i think we all recognize that whatever we hear about china seems like a pack of lies. we own apple from a charitable trust. don't need to buy more i would love to tell people this is the level i think it can come down a little. >> 50 bucks off the high. >> but that's not that much. but look here's my problem. say i come in on monday and world leader got sick. or we have this community outbreaks everywhere where it's almost like for all of us, no one is as old as i am. the measles broke out or polio broke out. i was alive for these. these are far worse than this coronavirus. it was like wreck your life. measles can kill you and polio, we know what polio did to people so -- this is what happens when you come out and just -- you're
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not supposed to drop in. i love you, though i never miss your show. >> we appreciate that very much. how do you then sort of advise people to parse what you're saying with if you have money and thinking long term, you got to put some to work with apple, the biggest -- >> right. >> best name in the market, most valuable, could come down more >> i recommend this morning, i don't think travel and leisure has place in a portfolio when i spoke to doug yearley at toll, he said wait and listen. i don't think housing belongs in a portfolio. listening to phil i don't think you want to be -- i like boeing but now i don't want it in the portfolio because the airlines may not be able to pay those are sources of funds to buy the really great stocks that we have been waiting for them to come down and can't avoid them high growth works.
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does everyone agree -- high growth no >> to your point, though, some of the airline stocks are basically -- >> please. southwest should be at 36 where it was before the president was elected. i'm just saying that's where -- most of the people don't have money. they're already -- >> should be $10 >> should they buy nvidia? they have to sell something. i'm offering the source of funds. >> how do not own something housing rates where they are >> made me feel -- doug made me feel badly about it. >> that's doug >> toll is pretty good lenar? >> home depot down 5% today. >> home depot works. they reported a long time ago. >> yeah? >> what? 72 hours ago home depot plus work and gardening season you garden whether -- you can be sick think about this you can be sick for two, three weeks. i'm at an age i know cdc says
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i'm at risk. i will hopefully get better and then i do my planting like i always do. and so it's a corona and once you get it you're not supposed to get it again and wish the chinese would tell us but i think home depot uniquely you just found out. >> i would do a ppg. >> wow wow. you would do ppg with mike snal. >> down 20%. >> i see you and raise you costco. >> why we talked about that before. >> j & j finally back aaa balance sheet. great pipeline oh no, i'm sorry i might feel sick. >> health care as a group? >> you know, if bernie is knocked down on tuesday, you wish that you bought even the worst of the worst. >> agreed with that. >> you know? you may want pfizer. >> how about uniteded health care the hmos >> i'm in a fight with united health care so it's a different story. i think that i like cvs.
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i know it's hated and merlot is hated. change the name to pino. he is just hated i like cvs and got -- i don't think it's too much. i know people worry about the debt i prefer gill. i think gill is very good. >> so we have only a couple minutes left. >> i know. >> i do want to get final trades if you all have them. >> i want to apologize what i did was rude to everybody. >> no. we love it k. you leave the viewers with sort of the most important thing that you are watching for the rest of the day? >> i have not liked one in ages. i'm watching at&t. i cannot believe i said that i think it's second rate company but a first rate activist involved and i love that yield against what the treasuries are doing. >> paul singer right? >> i like him. he's actually really nice. people don't get this. >> watching the treasuries hard to feel good about a bottom if you have these yields that continue to go down. really across the board.
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below -- >> look at those if the chinese sell the trillion dollars in treasuries we'd get a lift they're uniquely doing everything wrong i mean, you know, he's krus chef not stalin >> we love the stont nayty. >> i like people to pick at things as i said this morning. stop with the fear okay go buy some lysol but stop with the darn fear. do what the cdc says do what they say you're going to beat this thing and then come back and say what the heck i didn't buy any microsoft because i got sick >> let me -- 30 seconds left "football night in america" trade? >> far fetch ftch got a couple upgrades today. buying the april call. >> dividend growers and quality at a reasonable price. two etfs. >> disney. significant correction
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disney plus should be well positioned in this environment. >> okay. interesting call talked about a lot this week. >> anthem. expected to grow 10% to 15% on cost. >> bernie's done. >> sowetis i emailed you this morning. >> this is what it was like. jimmy, thank you again. >> thank you, buddy. have a good weekend, everybody stop fearing. >> "the exchange" starts now thank you, scott and jim. hi, everyone i'm kelly evans. welcome to "the exchange" today. another wild day on wall street as the record sell-off continues. here's staggering stats that sum up where we are today. the dow, s&p, nasdaq and russell down the major indices have a worst week since october of 2008 and we remember as the heart of the financial crisis every dow stock is in correction with nearly half of th


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