tv Fast Money Halftime Report CNBC August 18, 2020 12:00pm-1:00pm EDT
>> i know you'll be watching that as we close out let's get back to headquarters with the judge and the half. all right,sir. thank you very much. welcome to "the halftime report." the record run for stocks as the s&p 500 hits a new intraday high can the remarkable move from the march lows keep going. joining me for the how are stephanie link, josh brown and brynn. we do begin with a look at stocks we did lit the record on the s&p. josh, it's hard to believe that the s&p was at 21.91 back on march 23rd and here we are having rallied 55% to this new
intraday high. it's remarkable to look at that but it's al important to think about where we could go from here >> my director of research took a look at the median time when you print a closing high until the nec time it's actually on average about 90 days. we're 126 days out from that date that you mentioned. every time the stay at home stocks look like they will roll over, somebody comes in and buys them look at zoom that looked like it was in trouble. teledoc had this really nice
comeback then you think about docusign, peleton. all of them when they looked shaky have came back those stocks have been fairly important. take a look at home builders you cannot find a name in this index that doesn't look incredible on a technical basis right now. the industrials are trading sideways after digesting a huge move to the upside materials are hanging in there they are at record highs they are not going anywhere. i think when you consider the balance of all the different things that look good right now, yeah, we're justified making a new high you might not like how much of it came on the back of multiple expansion but what do you want me to do about that. >> steph, it makes me think of what jim cramer said the other day of this grand slam you have all of these different areas that are working at the same time when you really consider, i think it's important to consider how we got here and
why we are here off of those march lows more important as sort of now what is the big question >> the market is higher because the economy is recovering faster than expected. it's discounting the profitability covered faster than expected. they have seen a recovery in their earnings faster than expected just imagine if you got some of the laggards to start to see operating leverage just imagine if you saw fedex increase their profitability by 50% and they could do it if they get demand because they cut cost so much. i'm looking at sochl these stocks that haven't really recovered as much.
where there potential into 2021 in terms of that operating leverage, in terms of the better earnings, i'm not saying it's all or nothing that's why i want to see it widen out. i can still see the winners win but i want to see the laggards play catch up as well. i think you'll see that in 2021. >> it took less than five month to get back to the new highs. >> i want point to the amount of oomph it causes to get the stocks to these levels this is not easy a lot of folks was the law of large numbers and michael
santolli tip of the hat to you for that what we reasonsed is jovolumes f trade into these names these volumes are not just high in the options, they are high in the underlying stocks as well. some of that is driven by etfs when you're buying these, they are buying the shares. the more people index in that way, the more that provides that oomph. this is some serious lift, serious heavy lifting that these stocks have done hasn't been easy and yet, as josh pointed out at the top, very fast. extremely fast holding onto these gains building on them virtually every single week, scott those are all positives rather than just a sharp jump up and then a sharp sell off right back down that dip back down just hasn't come >> i just wonder, what are the
catalysts there to take stocks higher than where they are now i think it's a statement in the market today that retail, these big box blow out numbers and yet the stocks are lower why? i think there's some doubt in the market as to whether it can continue is it sustainable? >> yeah, i think what's coming soon to a theater near us are earnings upgrades for the s&p and probably year end price targets as so many people pulled those earlier. estimates were right under $23
that's about a 20% beat on the upside i think as we start moving later on in the year, we're going to get better guidance because i think quiet frankly these earnings have been exceptional some people had negative earnings for second quarter. we'll come into play we're at almost $28 for the quarter. that's incredible. i think more green chutes are on the horizon as you get nor earnings on the upside. >> earnings are better than expected expectations have come down so much is it really that much to celebrate? the market is funny. it makes of things that you want
to >> if you think back to two, three months ago, most companies were coming out with no guidance at all and we didn't know what we'll see in the fall. a combination of both those are going to get well rewarded by the market it could be good to see that come through not just in technology but some of the industrial companies some of the others that can take advantage of this. i think coming out of this, what is really pleasant surprise is how fast some companies have reacted and have turned their margins in the positive stance i think there's more good things to come.
>> materials are up 63% from the march 23rd low >> you have to look at stocks like honeywell, aggregate companies. those companies that haven't come back as well. the indexes have >> josh, any part of you feel like there's some level of complacency with all of this we're going to senter the fall schools will open. the 14-day infection rate is down but it's still up there the virus is still spreading in states we don't know what the fall will look like from a flu standpoint. there are some pretty nasty predictions from people like the cdc about the health environment in the fall.
are we taking any of that into account as we talk about the market today >> it ends up reenforcing the drivers behind the rally if you're right and we get these nasty surprises, they open some schools and there's some infection outbreaks, et cetera, yeah, i think at first the market's reaction will be to freak out. think about the drivers that come about as a result of that it reenforces work from anywhere it reenforces e-commerce in shipping and fulfillment which are the best stocks in the market i think like you've got the second order of magnitude where it pumps up home building because the longer this nightmare is part of our lives, the more inclination it will be to renovate a home that you are defacto stuck in or find a new
larger home to move into, one that's got room to build an office those are the best stocks now. >> doesn't that keep a lid on the potential of these value cyclical reopen epicenter stocks >> it doesn't matter those stocks don't matter. they have no market cap. i wish that weren't true maybe they matter for sentiment. maybe they matter if you're a large cap manager and you have some benchmark where you have to own a certain amount of value stocks they meat in the context of these calls coming out from the strategist that say you should rotate from the winning stocks you said into these laggards
this is the type of stock that will work if the worst case scenario doesn't develop and life starts to get back to normal this fall despite the risk of reopening schools, et cetera simon property is down $100 from its pre-covid high and down almost $150 from its all time high every one understands the challenges for malls and indoor shopping and dining. every one gets it. if there is that reversal and all the strategists are talking about, simon will be one of the biggest beneficiaries because it's almost at its low it has a bounce but hasn't gone anywhere
i think the dividend is safe and the fundamentals are better than what most people think they are back to collecting much higher rate of rents than they were this spring occupancy is about 92% which is in line with simon's historic average pre-corona times >> there are a lot of people who are trying to pound the table and say now is a good time for value. josh makes a good point. he gave you good reasons as to why he thought that was the move to make. saying now it's time to rotate from tech and growth into value and let's say industrials and some of these other cyclical stocks why are those stocks going to work now
energy industrials and financials are 20% of the s&p 500. that compares to 27% for technology. those are the names you want to look for >> which names come top of mind for you? >> union pacific, u.p.s., ppg. many retailers come top of mind. i still believe in the consumer. i still think you want to have some of these names. i also have argued and debated an discussed whyyou want to ow some of the defensive secular growth names too because the total addressable markets are so
powerful therefore, i'll bet you anything the stay at home situation that we have makes several technology companies and their total addressable market on the low side maybe we see upside to the internet of things or to cloud or wearables i still want to have exposure there. i want to be careful and tactical. i think you want to have a combination of both of these names. i don't think you want all or nothing. >> why do you think that depot is down today, walmart is down today? do you think it has anything to do with they have blow out
numbers. astonishing metrics within the report this notion that unless the consumer who is struggling mightily gets more stimulus from washington, the good days are over for those trades. you've already seen it >> well, i would nervous about home depot we talked about it last week and yesterday with you on squawk box. home depot is up 30% it's 29 times earnings get it the whisper number for the total comp, 20 to 23%. they did 23.4% it was basically an inline versus the expectations. you know stock picking it's all about expectation this is a one way trade there's not one thing i'm going to poo poo on this quarter. transactions, tickets, inventory
down they are seeing record digital sales. on walmart, it's a 15% year to date the comp at 9.3% i think that's about what expectations were. e-commerce up 100% that's sick. that's crazy >> i hear you. >> it does speak to the consumer shifting their trend it's aum about expectations. if you want to sell the stocks off today, go ahead. >> it has to bode well for lowe's and target tomorrow that's where the bets are being placed as you have seen in the options market
these other two have been out performing like crazy target and lowe's they are neck and neck, scott. over the last three months, lowe's has just been extending much more than home depot has. only 25% of those people who go to homedepot.com actually go over to lowe's next. the folks at lowe's have shopped at home depot. 50% have gone over to lowe's shopped there after checking out home depot this is a trend just in the last three months that we have noted
here, scott. it's really out performance for lowearthqua lowe's that's why it's doubled up on the performance over this same period target, the online searches at target again, they are not a grocer you know that pizza is all time. the target doesn't want to be the grocer that for instance, walmart is they just want to get that search and have you buy the other stuff at target. they've been winning in that regard they're up 100% on search versus where they were flat just in the last three quarters. it's explosive.
>> would you take profit in lowe's today why wait >> i like lowe's the thing to look for lowe's, it's more of a restructuring store. now, if they do hit those and they give us some guidance, i would like to own the stock for a longer time. it's a portfolio manager have been taken profits and a couple of shows ago i did take profits from masco if these stocks keep running and if question get more money in
for the consumer, i wouldn't be surprised if i take more money off of these and put them into other areas. >> i'm wondering if the stocks are too expensive. we had the valuation of lowe's up there it was what was at 21 something forward. i've got pe on lowe's here of 27 or so. are these stocks just valuations have gotten too big as all this money has plowed into these stocks >> valuations in general let's be clear have come up across the board. i think when you deconstruct the three of them like a walmart, home depot and lowe's, i think walmart will have head wind because the expectations were so high and because i think it was around 80 million people getting $1200 checks that's in the stock. it does have a nice yield. i will say with home depot and lowe's, housing starts which we haven't talked about came out today up 22% which annualizes about a million and a half new
starts that's incredible. really bodes well for lowearthquakelowe's than home depot. i think as the economy recovers this long term move into the suburbs whether you're remodelling or buying a new home will bode well for those two names. >> i agree that's such a key point. household formation was already poised to explode before the pandemic we didn't know if the 29-year-olds of 2020 were going to be renting in large metropolitan areas or going to be buying and moving into actual
houses in the suburbs of those metro areas. i think we have our answer based on data sets from all over the place whether you want to look at credit and debit spending or what zillow is saying about searches for real estate we know there's going to be a deurbanization to some extent and home depot and lowe's that plays right into their strength. you get a yawn at great news >> what about this other thing that carl flagged something from trim tabs that i thought was interesting. trim tabs says august is on track to be the third month of the past four where insiders selling exseepdsed $15 billion at pace unseen since 2006. if insiders are selling at that pace, what does that say about where we are in the market and how their typical investors should be thinking about stocks?
>> i don't think you have to apologize for taking a profit. we know the s&p is up 50% from the lows i've always believed that people sell for all different reasons they buy because they believe in foundation of what they are doing. i pay more attention to buys, insider buys versus insider sells. >> how should we look at this, josh >> we should not look at it at all. prior peaks of huge insider selling have occurred in 2009. 2013, i remember being on the air. we did a whole raft of programs focusing on insider selling. if you sold in 2013, i think you sold just as the market was making a new record high and
entering into the bull market that we have been in for seven years. there's no signal but makes for such a great newsletter or headline so when you get that information in your inbox, you think you're in position of this is the sell signal i've been waiting for. doesn't work don't do it. pay attention to it for context. do not formulate a forward looking investments plane based on aggregate insider buying or selling. >> all right let's focus on our investment committee buying and selling you sold snap. tell us why. >> tiktok seems inevitable that it's coming to america with an american ompany.
with instagram reels and facebook and tiktok getting bought by a big u.s. tech company, i think that puts pressure on snap and the chart shows that i think the charts terrible. it's holding in support here once again, i have a finite amount of money i want to invest and buy stocks that are going higher that have tail winds, not a head wind. >> tell me about teledoc which i understand you bought as well. >> i hadn't owned it before. i think it's one of those unique opportunities the buy one of these really new growth companies.
it was a strategic merger. they only have 25% overlap the management said that teledoc and lovongo will create 500 million in revenue and they still kept their guidance over next few years of 30 plus percent revenue growth i thought it was great opportunity. it was at 250. i think it got into the 180s i bought it yesterday close to the close. i think it's a good opportunity to get into a company that the market misunderstood i think over sold it and i think it's going to be a big winner disruptive they own this space. i think it's a great strategic merger >> coming up, look at this mystery chart. a stock that is more than double this year just got a new price bump as well to a street high. almost every one in our invest m committee owns it as well. we have the name, the debate in our call of the day. he's one of the most exciting golfers on the pga tour.
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welcome back it's time for the headlines. >> hello, everybody. here is what's happening at this hour the administration top's arms control envoy is not ruling out a meeting between trump and vladmir putin on extending some strategic arms reduction treaty measures those measures are due to expire in february but he says nothing has been scheduled so far.
nbc news has reported president trump wants an in-person meeting with putin before the election the chambers two leaders have two different interpretations of the senate panel's report on russia and the 2016 election. republican mitch mcconnell says it reaffirms that president trump did not collude. chuck schumer says it shows how much the trump campaign relied on hacked russian information while trying to connect with moscow's operatives. saying it would be impossible to get a fair hearing, roger stone is dropping his fight to reverse his conviction for lying to congress president trump's commutation kept stone from going to prison but it did not affect his conviction you are up to date i will send it back to you we appreciate that let's talk about nvidia hitting
>> i was looking at the stock this morning this is a stock that's never traded at a reasonable valuation. i use y charts to look at this stuff. even when i bought into the stock it was trading at an elevated valuation relative to the s&p as well as the semiconductor sector right now it's like a 90-multiple. i would say that is way higher than it's average multiple over the last five years. it's probably discounting some situation where all the things we have been saying about the potential for their platform will all just magically materialize and happen
a lot of that is already being priced in. i'm up 700 something percent in five years with this name. the higher it climbs on mull approximate expansion, the less happy i am about it. i hate to sound a somber tone as the stock heads towards $5$500 a share. that is the reality. we are really getting up there in valuation >> that's up 40% in three months to josh's point. what say you >> the expectations are so high and everybody has jumped on this stock at this point. it makes me weary as to what they will say and really to josh's point, if they don't fire on every cylinder, you will see this this is what happened to the stock. if you look at the chart it dud pull back after earnings when expectations are this high as a long term holder, i would buy more given the opportunity if it comes back especially for
new accounts and clients who are not exposed for it it's a core holding. i think it's one you want to own. >> core holding which means you have no inclination to take some profits at all >> if it starts growing then yes. >> the mull approximate here is up 150% just in the last year. we talk about multiple expansion for home depot, let's say the s&p is 25 times earnings and we're saying home depot is 29 times earning. that makes sense to me it's 20% premium to the overall market can anyone argue that home depot is not doing better than 20% of the market itself.
they are doing well in video games. i think this quarter will be first time that cloud and data center will eclipse video game sales maybe that's something to cheer about. >> why not -- what do you tell people if not now, when? when do you know it's time to say. i checked that box, checked that box. i got to sell this i have to take the profits if not now, when >> it's gate question. this is a stock that all along the way hundreds of percentage points to the upside has given you multiple cardiac arrest moments. this is a stock that's fallen 15 to 20% after certain earnings reports. it was a very notable one in the end of 2018. that scared every one. it had to do with cryptocurrency
sales. the stock fell 40% on that one. you say i'm going to have to put up with some really bad months when do you decide you're done, let the company screw up they haven't yet let intel get serious about competing. they haven't yet that's kind of where i am with this >> let's bring in someone who says could lead the market higher from here lot of energy names. >> these are stocks that have 50% buy ratings with upside to their 12-month price target. most of these names are energy bank of america out with a note
today questioning if it's a value comeback pointing out that energy saw its biggest weekly inflow since early june. citigroup is on this list. among these names, the top performers for market lows, devin energy, diamond back, hartfort and general motors up >> thank you what do you think about the list >> i think it's a good list. i think it's interesting because energy, if you take a step back from the low of the mark, a lot of these stocks are up threefold. they went to very low level. i think there's some of them are really cheap
i think the energy space is a really good list or sector to stock pick we like names like energy transfer, plane or western you don't want to buy a stock because of the yield i think we're in this environment where you can get a really nice distribution yield with these energy names and get capital appreciation it's like maybe they got off fossil fuels too quickly this needs to be part of our eco system we need a strong energy independent united states of america. i think it's great time to look at some of these individual names. they have cut capex, spending and being better allocators of capital. i'm an owner and a buyer >> spoken like a true houstonian pete, does it all the time
i totally get it coming up, jon is following unusual options activity today his new trades are coming up next first we give you a check of the s&p sector heating up. 33.89 is where we are after dropping off a bit it's a big day for retail earnings you can watch or listen to us live on the go on the cn abcpp we're back after this. u can gets that helps you master your backhand... ...then you should be able to get a bank account that helps you master your budget. virtual wallet® for digital banking from pnc. it's time to get more from your bank. [ engine rumbling ] [ beeping ] [ engine revs ] uh, you know there's a 30-minute limit, right? tell that to the rain. [ beeping ]
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as you always know, this is deep end of the pool. something that's expiring this quickly, you got do be quick to react and quick to take profits. it was a 40, 45 cent option when they bought it second trade, vst, this is a delivery they are buying september calls in this one. a little more time the 21 strike calls paying about 40 cent for these with the stock just beneath $20 a share i'll be in theseabout a month. >> good stuff. the dollar dropping to its lowest level in more than two yea years. what traders are saying about where the green back could go from here. halftime is back in two minutes. ♪ come on in, we're open.
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all right. let's do the futures outlook the dollar falls to its lowest level since 2018 let's bring in jim of tjm services good to have you just when we thought maybe the dollar was going to bottom week ago, the trend is still in tact, it appears, jim. >> no doubt about it you know when you have to look at a three or four years chart to get the context that it's a pretty big deal. today when it gave up 92.40, that took it out of a consolidation that went back to july 28th. that makes the measuring down to 88.50 which happens to coincidef
months of 2018 if it snaps back up, that will mean i'm wrong i'm long on silver and gold. if the dollar will move 5% lower, those things will shoot higher as well >> i keep hearing how the economy is performing well why isn't the dollar starting to rise well at all in. >> negative real rates killed the dollar if you sub strakttract 100 basi points, you're under water we're not the worst house on the block. germany is even more under water. their negative real return is about 100 basis points
how do we know that all the other economies are opening. copper is up 6% since the beginning of july. if you really want to see what's going on in asia then you can look at iron ore prices and iron ore prices are up more than 20% since the beginning of july. everybody else in world is getting back to work and that means they don't need any dollars. >> guys, thank you talk to you soon straight ahead, a halftime exclusi exclusive. we're back in two minutes.
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with three wins on the pga tour this season, our next guest sits at number 1 in the fedex cup standings. justin thomas joins us now in a cnbc exclusive justin, welcome back nice to see you. >> thanks for having me. >> coming off the wyndham championship as well i tell you what, tiger has always talked about peaking at the right time you certainly seem to be right there. >> i'm trying to, that's for sure i think all of us try to be peaking around the majors and the fedex cup playoffs it's what we all work for throughout the year. obviously you want to play well every single week and every time you tee it up, but there's
definitely times of the year ask weeks that are a little bit better to play well than others. >> give us a little bit about what you expect as the playoffs get underway, and just in general what it's been like being out on tour with covid in the background and no fans at any of the events. >> it's been different, obviously, but what hasn't since march? i would say normal is about as far from you could possibly describe something, or anything, really but the pga tour has done an absolutely unbelievable job of making sure that we have not only been able to start up, but how successful we've been since we started back up with colonial it's a testimony to them, the staff, the board members putting the time in not only to make sure we're playing golf, because safety is more important than anything that we're out here doing, but the fact that we're able to be out here playing at the highest level. obviously we would love to have fans but that's not where the world is right now in what we
can and can't do, but we've been doing a great job, so hats off to them. >> the u.s. open next month. cameras caught you yesterday out at wingfoot out in new york with tiger getting a practice round in tell me about that >> it was hard wingfoot is very difficult i had never been there before, but i do have to say just my first experience, it was one of my favorite courses i've ever played i love the old school design of just -- it's not terribly tree-lined, there's not a lot of trees out there, but the holes have just very defined definition with the rough, and the bent fairways and extremely severe greens. it's a very true u.s. open test. >> it's interesting, we're lucky today. we happen to have a wingfoot member on our panel today who is a member of our investment committee. his name is sirat, and he has a question for you >> okay. >> justin, so i would love to find out when you play like a wingfoot and then you play some
of these stadium courses, like when you play tpc, what are you finding are some of the big differences and what do you find is better for your game, being one of the longest hitters out there on the tour? >> well, there's many differences. i'm definitely not hitting as many 5 and 6 irons this week as i did the last two days of wingfoot i hit a wood on a par 3, which is something i hadn't done in a really long time, before the pga a couple weeks ago it's just -- you know, it's a long, tough, very, very difficult golf course. in a place like here, it's going to be a little soft. the course is short to where we're going to have a lot of birdie opportunities but the other day the lowest score wins no matter if it's four over or 21 under. it doesn't matter what it is, you just need to play better than everybody else. >> give me a -- >> so did you have a -- >> go ahead, sirat go ahead, scott. i was just going to say, do you
have any favorite holes or a hole that you think is going to change the match around at the open >> i think the finish is great it's a tremendous finishing stretch. it seems like a course that's going to be very difficult to hold onto a lead you know, you could really see someone in the last par 3 on a course with 14, so i think that finishing stretch, as we saw, i guess it was '06, that was kind of a freak thing, but a lot of guys didn't play 18 well and 17 also to change the tournament. >> lastly, before i let you go, j.t., you're 27. what's your fancy when it comes to investing do you watch the markets at all? are you a real estate guy? i hear you're a bit of a sneaker head you have a lot of air jordans in your closet but you tell me. >> if i was spending that much money on pairs of shoes, i would need a new financial adviser
i'm fortunate to have a great team and my dad is great on the investment side. most of all, i'm just fortunate to accumulate the wealth i have at such a young age to where i'm just letting it compound and grow to something where -- that way when i'm done with golf, i don't have to worry about it too much i know the urge is to just spend it all, but fortunately i have people not letting me do that. >> be well good luck in the playoffs and we'll see in you the u.s. open >> sounds good, thanks >> that's justin thomas. the fedex playoffs are september 20 on our sister station more on that straight ahead. and "more to savings." sitting on this couch so long made me want to make some changes...starting with this couch. yeah, i need a house with a different view.
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final trades bryn, you're first >> let's stick with energy transfer energy transfer is one of the largest midstream pipe lines had a distribution yield of close to 18% you can get income and potential capital appreciation >> okay, good stuff. sirat? >> uber. watching this one, they just launched a subscription basis. i think they will like this and it could be a catalyst for the stock. >> jon najerion. >> workhorse seeing some interesting things in this one right now.
>> and we both doubled our income in store capital. very pleased to be alongside them >> steph >> john deere, quality reopen stock. tractor sales are on the rise. they're using technology to gain shares and increase margins. they're reporting on friday. hope i get a buying opportunity. >> thanks, everybody "the exchange" begins now. and thank you, scott hi, everybody. here is what's ahead this hour after days of anticipation, the s&p finally hits a record high, may even close there, but it's barely holding on. this after blowout numbers from home depot and walmart, but they can't even keep those stocks afloat it's all the good news baked into this market that is the question of the day. plus, truly spectacular. another spac hits the market we'll discuss the two names going public and discuss the potential risks.