tv Fast Money Halftime Report CNBC October 6, 2021 12:00pm-1:00pm EDT
forget the chip shortage and how that's impacting all of these players and then we'll see what happens with regulation and facebook, carl, that's what we've been talking about really a lot for the past couple of weeks. >> yeah. as the dow's trying to once again inch its way back to some milder losses, down 221. the s&p back to 4324, as we work our way through the week headed to the jobs number friday. let's get to the judge. carl, thanks so much welcome to "the halftime report," i'm scott wapner. how to ride the volatility up, one day down how long is it likely to last? we will ask the investment committee and get their best plays for your money this hour joining me for the hour, brenda vanjello, and john teranova and jon najarian and let's check the markets. the stocks are lower by now and the ten-year yield sits at 151 the stock's up, as i said, all
around this week especially recently take a look at this. the nasdaq is a good picture of the volatility that all of us have been enduring for the last several trading days if we can get you that, we'll show it to you, but it's been tech, the epicenter of the most volatility in the market inflation fears and that's where the culprit lies rates go up, tech seems to go down joe teranova, you say the market is in a tenuous position >> sure. i think we can use that word and that is where we remain and i don't see this as a risk off environment where 15% to 20% down for equities is going to be the path i think there are too many conditions that suggest otherwise. credit markets are good, high-yield investment grade is trading well and it's not the risk in the crypto market as that approaches new highs and that's a continuation of what the theme of 2021 has been and where it's been rotating based
on what the strategy is going to be why is it more tenuous this time around because you've had a 15% pullback in facebook and an 11% pullback in apple, 7.5 for microsoft, so this time around it feels a little bit different because they've come for the big five mega-cap equity names, but i think they hold the path moving forward of where this market is going to go, and i think we're getting to a point where we are closer to a bottoming out process than a further deterioration for markets. >> you say it's being dragged around because of your words what the strategy is going to be this doesn't feel like that much strategy it feels like rates go up one day and rates ease off a little bit and let's buy them back. >> pull back the lens, scott, if you would and look at where we've traded since the middle of september and that's where you will find mega-cap technology stocks find their peak and that's where we began this rise
in yields from below 1.20 toward 1.50 so we've settled in here on yields, but if you pull it back overe weeks you'll see what's dictating that in the market in relation to the faangs >> speaking of the faangs and we've been mentioning the last couple of days the moves lower not only in big tech, but the nasdaq itself. internally the stock's there, 65% and 65% of the nasdaq 100 is down from the 52-week highs. i ran through a whole bunch of names which i can get through some of those again in just a moment i do want to focus on apple, jon najarian yesterday i asked the question as it relates to not only the 65 or 70% of stocks that have pulled back 10% or greater or related to the mega-cap tech like the faangs, when enough is enough and apparently you've seen enough is enough because
you've now called apple calls fresh. >> yeah, when it broke 130 to 148 to the down side we saw people starting to nibble while they took bigger and bigger bites today i will say that the action is short term the calls that we saw are this week expiry calls at the 142 strike with the strike crossing 140, but nonetheless, if you're somebody who is looking for some of the tech that's not getting wrecked this is one of those, and netflix, just a week ago was in the, what, 490 range, 585 and netflix has zoomed to the upside pushing towards that all-time high of 640 or there about
i think it hit 637 or something today, scott so wow some of those certainly show you, when some of these stocks have made pretty decent corrections rather than balog som bailing and apple is one that i added to some of those calls today. >> cramer makes the case if inflation is the big culprit cramer makes the case to ignore it at least in terms of what's happening with this pullback in tech and buy some of these stocks on the cheap. you know, jon, i look at a crowd strike which you have calls in is down 14% off its high tesla's down 13. starbucks down 13. some of the other names and the activisions and the qualcomms
and you're look at 25% across the board of those names off of the 52-week highs. so how far does it extend into looking at some of these names and saying this is just too much they've gone down too much i'll give you a couple of examples scott, and yesterday we started seeing across the board buying in the chinese stocks that and they'd taken one of these out and it's ten stamped and it's p.d. and billy. they were just hammering all of these stocks now you look at what are people buying to your point when is it enough that people actually start saying even with that much pressure and even with an entire government coming down
on it, its own stock market. people are stepping into those names. over the last two days, scott, that's exactly what they've been doing and they have been buying baba and they have been buying billy and many of those more or less after you take this much of a haircut which is certainlyno the 10% or 15% that we were talking about for u.s. tech, many of those stocks have lost half or more of their value during this time, and i think that's pretty noteworthy, as well >> which is probably why, steve weiss you covered all of your china shorts and plays right off of what dr. j. is talking about. you've seen enough to the downside that it is time to cover the moves in the buying and the money going into some of those names? >> shorts, as i've repeatedly said, you have to trade around your shorts most of the time because the marked dynamics are to sit with one. i deserve to be down when they're down, but when you have articles coming out now in
conferences where the largest asset manager is saying stay away from it and the stocks are basically flat then the trade's over for now so i've covered them before only to come back in, and i don't think it's over by a long shot, but you know, they've been good trades and they've clearly found a bottom as jon points out so i covered them. >> the other thing that you did they find interesting and you have to give me the most up-to-date thing because one of our price, patty martel was going through your trades this morning and okay, he was short the xlk -- on he's short the xlk and he covered it and now he's short again and by 12 noon did you cover it again where are you at, weiss? >> in the xlk i'm not in it anymore, and i decide not to >> so you're not in it right
now. you're not shorting the xlk. just so hour viewers know. >> i know -- well, if you let me talk i'll tell you >> i'm just trying to make sure we get it. okay let me make it very clear for you, and i'm not sure any indices at all now i was short, as you know, the qs and the smh. i shorted the xlk yesterday when i saw that rates were moving higher and that was reason the market has actually lagged it if you take a look it used to take pursue, now it's lagging it so i shorted yesterday coming into today i covered this morning when you got the news coming out of russia about them willing to contribute to the oil production that took rates, you know, bonds rallied and rates came down. so i covered all my shorts at that point
so, look, you know, 90% of my portfolio is long term 10% i trade around, and guess what when the opportunity presents itself you have to take advantage of it. i don't recommend everybody do it at home i don't recommend other people in the show do it. jon does it actively and joe does it a little bit and others like brandon launch it everyone has a different strategy and that's fine >> i just want to make sure people understand the rapidity of the moves that you're making and it could go short again and at a moment's notice, it may not be the easiest or best strategy for whoever happens to be watching and thinking about it >> and the reason -- let me explain it, okay i use stops. so when i go into a short term trade i use stops and i'm not going to stick there once i get the stop hit i'll sit back and i'll take weight and say okay, do i want to go back in or not and i'll move on because it's very
distracting, and there was opportunity to make money. >> i hear you. thank you for the explanation. appreciate it. >> brenda, you own it. paypal down 16% from the high and what is your view of not only those particular stocks that you happen to have of your own book and the nasdaq in general and whether enough is enough and whether it's time to buy the stocks as jim cramer would say on the cheap and not necessarily him referencing these individual names per se, but the idea >> yeah. i think we're getting close, and i think adding some of these more growths-oriented names would be wise at these levels especially because i think what's happening in the market is we're in this terrible couple week period where we just don't have a lot of answers. we don't have answers on what's happening with the debt ceiling and we don't have answers on how disruptive the supply chain impact will be to company earnings we don't know about oil supplies
globally and how that will impact growth and inflation and we're at a cusp where many of these things could impact economic growth and to that extent you want to have exposure to the growth names that will be able to grow even if the economy doesn't recover as quickly as we all think it might, but i still think it is important to have exposure to more cyclical industries as well because we may end up growing through it and it may not be as impactful as we think it is if we're looking out to a year or more. i think it's still important to have exposure to the growth names. i think now it's the time if you don't have exposure to pick away to understand that over the next couple of weeks we're likely to have this volatile bounce so you just have to stick with it. >> joe, how concern rd you in what is a 9% decline for apple becomes a 12% to 15% decline or an amazon and that becomes a 10
or 12 and alphabet becomes a 7 to 9 you know where i'm going with that does this market feel like these stocks need to shake out a little more or not >> absolutely. that's why i use the word tenuous. if, in fact, we do see further declines then you will see the overall index go down lower. the likelihood of that occurring in the period that we are now currently pricing these stocks at is higher than it's going to be in the next couple of weeks why is that? because right now you've got this blackout period i keep talking about the significant amount of buyback authorizations that are in play for these mega-cap technology companies and they're just not enacting on them right now because they're waiting to report earnings. so we're in this period right now where the vulnerability, as you suggest is there, and it is something that if we see further deterioration, the s&p is going down >> what do you make, joe, that the street is continuing to
defend these names do we pay attention to the apple, reiterated overweight >> facebook, reiterated by bank of america, 425. microsoft reiterated overweight and morgan stanley, 331. >> well, i would say that i'm reiterating, too, on my existing positions and whether that will be apple, alphabet or microsoft. i'm not hedging against them and not buying puts because ultimately they resolve themselves to a path that is higher in its nature and we went through the reasoning behind the larger problem that is going to lead to sentiment destruction for facebook itself, but i think these faangs overall are going to be able to afford investors the type of company that you want to be allocating towards in a rising inflationary environment. what's that? strong operating leverage, strong balance sheet and capital
allocation strategy and double-digit revenue growth. >> dr. j, how much of a volatility that we've seen in the last many days has to do with what's taking place energy >> natural gas is going crazy in europe it's been a big story here we're watching oil prices as well pushing $80 a barrel, pardon the pun, it fuels the inflation debate what are we to make of what's happening there? >> well, you're absolutely right, scott and india is down to a four-day supply of coal as far as those power plants and so forth that they're reliant on. there is a global squeeze on energy right now there's no doubt about that, and some words, soothing word, i guess which we rarely get from mr. putin helped reverse the 45% jump overnight in natural gas
over in europe putin said i have all of the natural gas you want and he didn't give a price, scott they're paying more than five times for natural gas than we are here in other words, we're very lucky to be energy independent europe is not in that position and they'll continue to rely on mr. putin and others for the energy that we need and clearly, that is impacting prices of a variety of things and that inflation will be something that, you know, this jobs report, we're all looking for it on friday after today's good or even great adp report. so to brenda's point, yeah, we're waiting on the debt ceiling and we're also waiting on the jobs report and then how is the fed going to react to the inflation that is clear and present and it's a danger, scott. >> clear and present danger, i'm stealing that, but that's
nonetheless, what it is. >> it's one of the reasons why people are growing more bullish about commodities. what i find interesting is even in the current environment you are selling scx. freeport mcmorran and it's not going work despite the good news from the commodity space, vis-a-vis what i'm talking about with doc >> right here's my view on commodities. whether everybody's pushing them that's when you have to be cautious about them. >> copper price and it's all of the commodity charge the capital price has held up and it's atrophying a bit. the stock's not responding and it hasn't been responding. so copper is not a growth story and aluminum is not a growth story. so commodities go up and down, and i just -- they're impossible
to analyze because so much speculation comes in and drives the prices >> is steel a growth story is steel a growth story? >> steel is not a growth story >> why do you love cleveland cliffs then? why do you love cleveland cliffs >> number one, i don't love cleveland cliffs. >> you love cleveland cliffs you might not love it as much as farmer jim loves it, but you love cleveland cliffs because you talk about it all of the time and it has a decent position in your books, too. i'm calling you out, weiss >> you can ask farmer jim about the offline conversations about cleveland cliffs i don't want love cleveland cliffs i'm there, and the reason why cleveland cliffs is different and it's a fully integrated producer and you've had a major decline. $100 decline in the price of iron ore guess what the feed stock is it's iron ore and that's why i'm in cleveland cliffs and that's a
different story completely versus a pure play like freeport and copper and basically it's a pure play. let me tell you one thing about the market which i think everybody is missing here which is that the market got to where it is with pretty good growth and great comparisons from the pandemic and multiple expansion. when rates go up and we're in a tightening cycle and make no mistake about it and compression is the multiples and we're seeing the down side of multiple compression right now and that's what keeps the market low and that's what remains cautious and i don't think it will be a good quarter at all for earnings. >> that's what matters most. that's why there is so much emphasis on the coming numbers because if you're getting a compression of multiples when you are only getting to where you were in large part because of multiple expansion, you need to have something to hold up the foundation if the multiple expansion will stop. back to cleveland cliffs
they upgraded today to buy and they upgraded the priss target and they take it from 26 to 24 and it's a decent amount of upside jon najarian you own cleveland cliffs calls do you want to take issue with anything that your buddy weiss said in the box next to you? >> oh, weiss was sharing those nuggets with all of us, scott, and i always love it when he does, but i do love cleveland cliffs although as you probably saw in my disclosure, stocks cleveland cliffs i do only own the options on cleveland cliffs, and the reason that bhp and freeport and rio tinto and valle are stocks they own versus cleveland cliffs is that, you know, there's been a lot of pressure, obviously on the iron ore sector in particular and
that a lot of it came from china itself again, i'm going plblame them because they did do that, scott, as well as evergrande because if you take a look at whenever evergrande was about to or thought that they would defought on either their loans to banks or payments, that's when you saw iron ore, in particular, the iron ore futures that they trade over in china, that's when you saw that bottom went from 200 to about 94 if memory serves. it has bounced back up to about 118 now, so is that a dead-cat bounce or is that a bounce that's sustainable i think now that we have a little more insight into how china will deal with evergrande and that these houses will likely or dwellings will likely still be completed, scott, but the debtors and the folks who lent that money, the lenders, i guess i should say are not going to be taken care of.
that's good for the future side of things in particular for that iron ore, but that's why i like cleveland cliffs, stephen. i like cliffs. i like fcx because the demand is just going to be overwhelming going forward. >> if jim lebenthal, the farmer, if mr. all in was not in cleveland cliffs weiss, would you say loves it he's tweeting about it right now. he even says how much you love it and i should stay on you about it which i intend to do. >> i also ask farmer jim in an offline conversation, you should check on your love affair with the ceo. any time you fall in love with the ceo you can probably find smshs, double-check. it doesn't mean you're not right, but let's be careful about this and take the emotion out of it. if you recall, i sold valet at $15 and that's iron ore. >> so it's a position. it's not a big core position
>> i have heard you wax poetic at moderna let's not kid ourselves here, weiss. you've got to check yourself on the story. i've got other ceos they think are phenomenal you don't own a company unless you think a ceo is a great ceo all i'm saying is when it goes from an affection that you're putting up posters like our farmer jim where he has walls and walls, then you have to check yourself >> weiss, you need to check yourself >> you might be in trouble you might be in trouble. i don't make those decisions thankfully, there are others who deal with that we'll see. vulcan materials, upgraded to buy at luke capitol. that's at hold dr. j, let's wrap the conversation since you own vulcan calls >> yeah. and this is courtney gibson is
the president over here of luke capital. i think this is a good call. i certainly like vulcan and for all those reasons i spoke of, scott, i think that we've seen a bottoming in the sell pressure on those iron ore futures and the other things that go into exactly what vulcan and steve's favorites, the steel side of the street, what they need to basically get back to work, and u.s. steel, i think all of them need what vulcan and these guys do >> speaking of stocks in correction territory, this is 11% off of itsierly high is vulcan we have a lot more ahead and jon has unusual activity and cnbc's financial 100 list is out and we have the number one adviser cong uhemip re at the half we're back in two minutes. inc,
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development that will save countless lives. more than a quarter million children in africa under age 5 die from malaria every year. >> six former defense secretaries raise the debt limit. they say it must be done to avoid, quote, catastrophic consequences for the u.s. military and america's position of leadership in the world on the news, the prospects for a deal in congress and the latest following this afternoon's expected debt limit vote in the senate that's tonight at 7:00 eastern >> federal regulators will introduce new rules requiring most major railroad and air transport companies to approve their cybersecurity measures reuters says the announcement will come later today. >> nato is expelling eight russian leaders. they are undeclared russian intelligence officers. the kremlin will retaliate, but did not give specifics scott, back to you >> leslie, thank you very much we'll see you in a bit for another story with us.
>> phil lebeau, with cnbc investor day and he did speak with the ceo mary barra just moments ago. what did she have to say >> she laid out an ambitious plan they'll be briefing analysts in 45 minutes on this plan for general motors to grow revenues and grow them substantially throughout the rest of this decade general motors has set a target of doubling its annual revenue by 2030. they also plan to grow their ebitda just in margins and get this, be the leader, the leader in ev market sales here in the united states. just a few minutes ago i talked with mary barra about how she plans to grow the revenue. here's what she had to say >> we think it will be additive in the early days as people will want to adapt evs as early as 2035, we want to have the light duty fleet be all ev, but in that time we see growth. so what i will say is there are business plans behind everything
that allows us to say those numbers with confidence. >> all right what about this target of being the leader in electric vehicle sales. we're showing you general motors shares and yes, those are gm at the bottom versus tesla over the last couple of years for some perspective. tesla has 63% of the u.s. ev market right now gm is third in the u.s. with 9% of the market. that's a daunting task to catch tesla. mary barra says they believe they will have a portfolio of evs to do that >> we start to launch all-new technology and all new battery chemistry and there is a steady stream between now and 2025 we'll have hay-volume segments as well as truck segments so the way that we'll kaptcapture that number o leadership position is what we do every day, to have widespread portfolio and the funkality and the price points that are important to them. >> as you take a look at general motors over the last three
months they did a lot say nine months ago when they got credit for the investment in the ev market and it's not done much because of the ev market. mary barra believes they're in a better situation in terms of the chip situation she'll be talking about that today, but the bottom line is this they plan to grow their revenues through services and subscriptions and scott, we want to see more of this interview go to cnbc pro. the entire interview is there, and we talk about whether or not you can grow services and subscriptions because right now, there's resistance from car buyers to say, yeah, i'm going to give you x amount of dollars every month on top of the auto payment that i'm making for a new vehicle. there are some who are doing that and tesla with full self drive, they have people who are paying a subscription and there are people who pay onstar once a month. can general motors generate recurring monthly revenue through the software and services they plan to roll out in the electric and autonomous
vehicles and it's a daunting task, but they can double their revenue. >> it will be a company along with a vehicle company. >> joe teranova has a question for you and it's related to ford competing with general motors in trucks joe? >> hey, phil, great job giving us the details here. the ford f-150 and how gm will respond with silverado do we have guidance on how that will be unveiled >> silverado e will be showed at the consumer electronics show on january 5th and when we actually see that in showrooms and when you can buy one, that remains to be seen. i wouldn't be surprised if they're showing it in ces in january that they plan to stop deliveries perhaps -- more likely you're looking at something in the 2022 range, but they realize they cannot just let the lightning go out there and not respond and they have
big plans for silverado e and we'll see more of that from gm mark royce >> thank you so much a gm meeting today jon najarian, weiss sold general motors not that long ago and he's been in volkswagen which he's been getting hurt in lately do you still have your gm calls, dr. j? >> yes, i do, scott and i bet phil would agree that one of the issues here is exactly what does that backlog look like how many people are being added to the lists of people which i'm on there i put a down payment for both the hummer and the lightning, the ford truck that i thought were both pretty compelling, scott. we'll see, you know, how many of us actually get delivery of those, but the point he was making about that reoccurring revenue or that you were stressing, it does become more of a tech play just as tesla has, and so that
reoccurring revenue and/or revenue when you sell the vehicle, a lot of people don't understand that when you sell the vehicle that particular i.p. went from everything from autopilot to a lot of the other neat things that teslas do that doesn't just go with the vehicle. that new buyer needs to pay them again for that and i imagine general motors and ford are saying that's a pretty nice revenue stream for us, as well and that's a good business plan mr. musk set up. >> dr. j, thank you. from job loss to nearly depleted retirement accounts. the pandemic forced many to re-evaluate their lives and take charge of uncertainty. cnbc's financial adviser 100 list recognizes the top investment advisers helping their clients get back on track. the number one adviser on that list joins us next on the half the doisw down 327. we're back after this.1,200 gu
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>> today, cnbc with the financial list representing $440 billion under management they had a methodology prided by cnbc look with acupoint solutions. average account size and total accounts under management. joining us now the number one firm on that list for the first time is dana investment advi adviseors represented today by joe moran. good to see you. >> you guys have been in business for 75 years and 7.3 billion in management. what's your strategy >> we run a number of fixed income and equity strategies across the board and two mutual funds, as well so really a number of strategies that run the gamut in the public markets. >> you're the cio. what looks good to you today in what is an increasingly volatile
environment? >> well, i know we've been talking about that a couple of specifics on us. we are equal weighted in sectors and fully invested at all times and we handle the delegation outside of the actual strategy and one name we like right now is te connectivity, tel. >> tell us why. >> so, you know, tel, really a main line industrial company they make sensors and electrical connectors, but that exposes them across the board, medical industry, auto industry and data connectivity, industrial automation and a couple of key things about te. they expect to continue to grow earnings they've actually surprised right through the pandemic so they have positive earnings sur poises for the last six quarters, both first and second quarter of last year and into the recovery they are also a play on the electric ev market which you
were just talking about. so the product they've put into the ev market is about double the value of what they've put into a non-ev vehicle. >> what about the market at large. i mentioned the volatility that seems to be increasing are we setting up for a correction are you going higher how do you generally see things when you are sitting with your investment committee >> we see a continued re-opening covid cases peaked about a month ago and fatalities have peaked very recently. so we see a stronger market going forward. also, we've been talking about this correction in the mega-cap growth stocks. we think that's healthy, as well we've gone through a number of years where mega-cap growth outperformed the general market and if they come together more through some of these mini corrections, we think that's healthy for the market >> one of my investment committee members has a question for you. joe teranova >> joe, congratulations on the
top rating you mentioned mega-cap growth companies and clearly we're in a search for yield environment and for an older generation searching for income and it's been very challenging. the mega-cap growth names seems to offer a solution. would you agree with that strategy or how is it you resolve the problem of seeking income generation in a low-yielding environment >> well, it's problematic. i think the federal government both the fed and treasury actually want a little bit of financial repression here so they're happy if they can keep interest rates low and inflation runs above that. so that makes it difficult to generate income anywhere in the fixed income market. dividend equity plays i think makes sense here financials have somewhere to go. there is usually strong yields in the financial sector of the market and the financials are a beneficiary this year and may continue to be energy, as well. integrated energy pays a pretty
fair dividend yield as well. >> joe, congratulations to you your firm. i know it's a proud day for all of you a good day for us to name the number one financial adviser of the financial adviser 100 list we'll keep following you and best of luck >> thanks. thanks for having me jon's unusual activity is next and before the break, take a look at the sector and it's been a down day for stocks and led to the downside by -- there's your major average. the s&p is down -- there you go. there's the dow heat map we'll just go with that. kr m'poticrs sive, and cisco isn't either nor is axp. we are back right after this
payments and so forth. they teamed up with twitter and perhaps that's why we're seeing such active speculation in the 22nd of october expiration 65 calls. the stock was only about $60.50, i think, scott so they're buying an upside call that's nearly 4.50 out of the money. i bought upside calls in twitter and i already owned some in other words, i added to a position here and i'll be in those two weeks. second trade, take a look at coin base and this is a weekly trade that expires this friday and they're buying the 250 strike calls with the stock at about $249 a share obviously, the big surge in bitcoin in particular, but a lot of the others like ethereum back up over 3500 and bitcoin through 54,000 and that is helping drive many of these stocks like mara, like riot block chain and so forth. it's great for coin base, and it should be good for robinhood, as
well and this is the one we're citing and 250 calls that expire this friday. i'm in those calls, scott. >> brenda, you're in coin base, right? >> we are. this is an underappreciated opportunity that no one talks about. crypto world speak to different languages and we've seen so many people come to us with tremendous amount of wealth they've we ecreated in the cryp world and engage the traditional finance world and no one has a good solution except for coin base so we really think that presents a tremendous opportunity for the company in terms of growth and that institutional side of their business. >> joe teranova, are you in coin base >> one of the best trades for me this year was at 3.25 and quickly selling at 3.18 and saved a lot of money there scott, you have to acknowledge there's been a lot of disappointment in using coin
base as a proxy for crypto overall. yes, it can rally in the near-term, but if you can buy in the actual crypto itself and there are other ways in the exchange world to play this and interactive brokers and more diversified products and yes, it offers crypto. to me it would be a better play. >> we have more trade ahead and show you the s&p sector heat map as we break the day as the s&p is under some pressure and led to the downside by energy. strong point of late energy, though, aas sector is down 2%. we are back right after this move your money to sofi. ♪ ♪ ♪ ♪ ♪ ♪ move your money to sofi. earn up to $930 when you download the app and feel what it's like to get your money right.
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i want to welcome you back show you the major averages here dow is under pressure today, down 258, 260, three-quarters of 1% s&p is down about 30 nasdaq, where a lot of the volatility has been where as we showed at top of the program, is down about 64 points how about this i got a new note that just dropped. joe terranova, thank you for tending this to us it is by way of jpmorgan who has interesting thoughts about where the market is not only now but more importantly where he sees it going in the near term. how about this he and the team say oil can go to 130 or 150 without causing much trouble, their model shows. he says the fear of higher yields are over done they say given the earnings pour of corporate america and the
relative valuation premium over bonds, they believe the market can absorb a ten-year treasury yield about 200 basis points higher than we are right now they say, we don't expect a broad market sell-off unless yields were to rise 250 basis points on the ten year which we don't see in the near term that's are incredible comments, joe. what do you make of that >> well, i think i also love the sentence where he says, we believe it was the last significant wave and effective end to the pandemic. i love that. i know you do as well. i will tell you one thing. if those are the conditions, taper and tighten by the end of june in 2022 i will tell you this i think the federal reserve is already behind november 2nd is the next meeting. the price of oil could be towards $90 by the time that meeting resolves itself. so if we get from washington, d.c. a resolution towards the infrastructure bill and the social spending bill, i think the next day the federal reserve
should be announcing tapering. i think it is so critical. the market needs it and, yes, we can endure much higher energy prices and much higher treasury yield pricing for sure and still see risk assets move higher. i agree with him on that we need to taper and we need to taper faster than we are doing now. >> doc, you believe that 130 to 150 oil - >> no. >> 2 1/2 ten-year and stocks are a-okay >> no, no. you will see and i know joe has a long history in energy, but joe and marco are dead wrong about this you see 130 crude, can we handle it well, i guess we'd have to, scott, but can we handle it? no that would impact the market in a negative way almost as bad as 2.5% interest rates would, scott. that's just a nonstarter that's going to blow things up if we see crude oil over 130 >> well, they say that the economy and the consumer did
just fine from 2010 to 2015 when wti averaged $100 a barrel so you got to factor in things like inflation and all of that >> sure. >> yeah. >> and you have to factor in things that i don't know that this is the call that i would make i would certainly be betting against it if we see those numbers, it will be long on puts. iot>> g to bounce sorry, doc we will come back with final trades of the things that matter to you most. i promise to bring you advice that fits your values. i promise our relationship will be one of trust and transparency. as a fiduciary, i promise to put your interests first, always. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com
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cathie woods but i'm on the negative side. puts at the 71.50 strike in october. >> wow, buying puts in that. that's interesting joe, quick with a name and then weiss. >> netflix, staying long >> volkswagen, staying long. great opportunity here >> good stuff. thanks, everybody. "the exchange" starts now. ♪ ♪ thank you very much, scott hi, everybody. i'm kelley evans here is what is ahead on "the exchange." stocks can't seem to string together a rally here. energy concerns and slowing growth signs sending the dow lower. energy is leading the declines bit coin is bouncing, up to 55k. we will look at why all of this is taking place. vladimir putin swoops in to say he will save europe from the energy crisis. that has nat gas plummeting 8% after a huge spike earlier on, why energy is now underperforming but is