tv Fast Money Halftime Report CNBC April 18, 2022 12:00pm-1:00pm EDT
purported model? >> i just want to know if they will stick with what they said >> it will be spicy beginning tomorrow travelers, and that is before we get to ibm and netflix that was great, let's get to the half zlnlts welcome to "the halftime report." front and centerpiece inflation rally. where it went and why some say a deeper pull back is still likely we'll debate that jenly harlington the cofounder of market rebellion let's go to the wall let's go to the bonds. that is what the ten year is now yielding joe, i'm serious what happened to this peak inflation rally? i thought it came out, the
market was like all right, this is as bad as it will be. the stocks rallied, and thursday game and we didn't have any follow through friday was a holiday, and now here we are. what happened? >> since the inflation report, the price of natural gas it up 23%. the price of wheat is up 7%. we have commodities reaching decade highs, $8 peak inflation doesn't look like it to me >> yeah, i mean there is that, as we said, you have another great call from mark fisher who came on a couple times and said that gas was going higher, are we done with the peak inflation move we sort of started to hang our
hats on that thinking the market could go higher. i think that very day suggesting that lows are in, this is fine, remember scott last week inflation is peaking, stocksge higher, is that gone >> let's say it has peaked and my money would be that we have seen peaks. but that doesn't mean that inflation will not sustain at a past couple decades of two to three percent. what happens then. say there is 8.5%, fine, that is over, but it sustained at five to six percent, valuations contract there is a neat chart there, but there is a neat chart that shows when it sustains, the market trades at a multiple of is a
t 1 times. so it is jus luke we didn't fight the fed on the way up, we can't fight the fed now and what is happening is as we're tightening, inflation remains higher than it has been historically, valuations are contr contracting. we'll have glimmers of hope, but the bigger picture says that valuations are contracting and that is painful and also unbalanced so what we will continue to see is the tostocks with extended multiples continuing to contract they will make up the market >> we made this opponent in a
few times, if you say don't fight them when they have the fire hose out, but then you say fight this own the way because we all know it is coming and in the market, that doesn't work. maybe we're learning that. >> yeah, i think we are, slowly. not very vfast, but slowly i think the most important part of the week, and joe hit is exactly on that doesn't mean you turn and burn to the downside, either i think a lot of people just expected that. look at gold, look at all of the various different commodities and especially natural gas we have sun taned and built on
some of the inflation products that we're looking at each and every day, right when you go across and you look at erg, yeah, there is still inflation. did it peak? maybe a little bit, but if it has, that does not mean it doesn't sustain, and right now i think we're seeing that process of that sustaining mechanism that is part of what we're seeing right now and clearly a lot of nervousness about that and we're seeing that reflected in a lot of the various stocks >> you don't think it peaked or that rated peaked because you came in today long to start. right? so you must think the rates will continue to go up, multiples on higher multiple stocks continue to impression. and that those stocks they continue to go lower >> that is right, i think is the
only problem, but let's talk about inflation. if it peaked what does that mean does it mean it is coming our way so we're not going to tight n? of course not. we're still in an emergency fed funds environment. meaning that race that we're set, when we went into the pandemic, an they have not come up meanfully and we have yet to come up from there. the feds can keep tightening because we can't continue to come upside down what is also wearing the market. what if putin uses tactical nukes in that is a bad event for
market, and they come under pressure you get relief from the banks, but last week we had good numbers, and that is what happens when earnings are good what happens when they're poor so the market is not going up. don't they was a peak inflation rally. i this it was a bear market rally and we're still in a bear market i would use those rallies. if they're meaningful enough to sell and i will question date some positions >> i thought that earnings were going to save the day, and that they would be good and earnings growth is expected to slow, not enough to make a big dent in the economy. companies will be doing just fine, earning wills be great, doesn't matter >> revenue growth will also be good if you want margin completion that's what you're getting if you're going to get tepid
commentary on a part of a lot of the congressmenation then what you have is earnings overall that are not going to broadly exceed expectations. and i think this earnings season is about that. you're going to need to see the collective -- exceed all of the expectations, and if you have inconsistencies, where you have a bank of america that tells you that things look troubling, that is not enough. >> just good enough, it is not good enough, not as bad as it could have been. that is not good enough. >> no, there is too many
headwinds. if you have a fooeer and it peaks at so 3 and one week later you have 100 you still have a fever. that will be you need overtly bullish. where do i find that >> even mike wilson has been among the best strategists on the block. he says that earning wills not save the day that is a 10% pull back-ish. does that sound reasonable can we deal with 10% from here and we see where the landscape sits where valuations are where the earnings picture is.
see what the fed is talking about? >> i think it is reasonable, and i think when we talk about earnings saving the day it goes back to the magnitude of what the expectations to the downside are. so far i think it is like 75% or 76% of company that's reported beat does that mean it saves us from being down 10% i would actually say -- >> yeah. what if i said that is exactly what it means? >> i think so. and i would say yeah, i think earning wills save the day and i think the strong consumer will save the day and that doesn't mean that the market will be up 16%. all it means is we won't have a real bear market where we're down 20% we have a strong economy, consumers, and court rations earnings will save the day, that
doesn't mean the market will rally. it means it's not going down as much as it could otherwise >> our next guest says -- >> sorry, i was going to say the talk on the consumer being strong is going to be short lived from here. now with gas prices raised and going where they are not with oil going where it is not with prices on clothes and food going where it is the consumer will not be that strong the consumer will be fighting to stay a live as a long segment are right now. not the 1% no offense, joe, that hit golf balls and drink wine that is the issue. they won't be that strong. >> it may not be -- >> it may not be as strong, weiss, but it may not be as weak as some suggest. i mean, let's not forget about where wages have been going as well
not that they're keeping up with the pace of broader inflation on food and tough luke that, but none the less, right, that could have an impact, too. jenni, you wanted to say what? then we'll move on >> you took at words out of my mouth. take what you said and add $15 trillion in cash burning a hole in consumer pockets. >> that make it's remain to be seen how much slowing down they will see at all. the s&p may, may, break below 4,000. let's bring in jonathan krinsky. so you have to have -- good to see you, help me figure this out. you were saying if we could go below 4 thought, but then i felt lie you were waivers on that and almost moving away and now your note today, here we go again, calling for a break below 4,000 likely on the s&p, help me understand that. >> really what we had, scott, is
this market. you have defensive bond markets. the high dividend paying stocks. and that has been a relative strength of the market, and on the other side of the spectrum, you had high growth names and cyclicals and banks, software, homeb homebuilders and the strong name that's have continued to get stronger, but they have gotten to a point now where we just really can't defend them tactically any more. you look historically they're so stretched relatively to their 200 day moving average a great name we liked it in the past, and that is about as extreme as it gets really it is at the apex there of their up trend.
you're also not seeing much of a rally. so ultimately that leads us to the believe that the strong names will catch up to the downside and the weaker names and that will get your final capitulation >> we put out a note in the last couple weeks saying to sell utilities. they have not come down much, but they have not rallied much there is almost a -- you can win two ways, right? if things improve a little bit, i think people may let up on the gases, and they should under perform dramatically but it is everything that kind of gets sore and then they succumb and you can see throughout history people do it
it for along as they can >> 4,000, he suggests and he uses the word this is a fair value level. we have been very focused on it. does that make sense to you. is that your level, too? somewhere close to that. >> i think when you look at the inte internals, and we go back to the mega cap tech names, i would also look at health care the big names, that is an area that is quasi defensive. there is a second biggest sector in the market. i think we're starting to see early signs of that coming to fruition they break down that 4,000
>> that is jonathan, it brings me to you. playing offense to where, you know, at least commodities go. we're looking at both of them hitting new 52 week highs today. both have been on huge runs in the last few months. why does it continue for both? the trade for me right now, while it looks like you may have extremely strong momentum, i think this will be parabolic there is no spr or cartel for
agriculture prices thinking about the effect of natural gas as a raw material being utilized in a lot of ammonia based fertilizers and that will exacerbate the costs prices down 40% for corn and wheat domestically you're seeing plantings that are challenged i will tell you if it is mosaico fames that i bought today, i think the exposure to agriculture is one that you have to stay with even at these levels >> even at these levels. i don't see a resolution on the supply side that will be able to see a form of reversal can you get a correction in these names?
yes, buying opportunity. i'm talking about a peak in all of the agriculture names i don't see that fundamentally >> good stuff. >> by the way, you're not talking about an expensive sector >> i'm looking at bungee, for example, their eps is 13.5 if price to sales is less than a buck let's do this, take a quick break. come back, talk about twitter. why? pete is making a move there i want you to know about it. plus, jack dorsey is ripping into the board and we will debate the whole thing, next
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somebody out there feels like this will get resolved one way or the other, whomever the bidder is. is musk going to team up with oracle that has been some of the talk out there. who would he team up with if he does indeed team up with someone else a think a lot of people would be interested in being a part of this whole thing i bought the october 50 calls. sold the 55 calls. gives me more room to the downside and on the upside i'm okay capping what my inside would be on that and the inflated volatility on those options. they gaye me an opportunity we talked about this, too
we never know what next move will be but it seems to be stirring up the pot right now and i think there will be other people buying in >> i don't buy any of it and nor am i following someone in that bought 3,000 calls i have no idea who they are. they could be the beggest dope in the world look, look, i just don't -- it doesn't matter to me i don't know if they're smart or dumb all i know is they have money. musk is not going to buy it. the fcc is not done with musk. he filed as a passive investor and then an active investor while he was having conversations. they may come out and say you know what? you can't be ceo of any public
company any more what would that do to the bid? i doubt that he would go along, and i don't think there is any value in twitter they have been off of the block forever and no one stepped up. so now they're stepping up with the stock inflated based on his bid? don't think so i would rather find other places to lose money which i'm doing okay at by the way >> joe, what is your perspective here, joe? >> it is that if elon wants to buy twitter, he will and it will be just through the price. how can twitter turn down a price that let's say is above 54-20. i like his strategy because it
is focusing on the completion of the transaction. after that my personal view is that twitter is literally done if he buys the company you're going to disenfranchise part of the user base. if he doesn't -- >> aren't they already feeling disenfranchised? >> 100%, but this now just raises it to are crescendo and find me a dmaen is as politically devisive as twitter. this is, to me, a company that has to be a private company if they're going to increase their free cash flow which they have no ability to do in the last five to seven years. various people talked about
extracting the value, they have been unable to do so and to me it is just about okay, where is the final price going to be and then go off into the sunset and be a private company. >> who will finance the acquisition? nobody i think pete is with more options. >> that is legitimate questions. jenni, literally 20 seconds. >> people want ub stance and cash >> all right, still ahead, unusualtivity, we'll tell you about the etfs that you need t h as well. we're back after this. you need to hire.
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leaps and bounds like signer security, clean computing, but now the etf market is seeks to expand by offering narrow bets are you ready for a long and sort etf let's talk to two of the leaders trying to make this happen we have the head of product destruction. dave, in february you filed for 21 new etfs each offering exposures to the leverage returns of a high pro file stock. how is this going to work and when do they need to give a thumbs up or down on your application p. >>. >> so let's be clear thar not yet available for traders today. they provide daily exposure to
either an index or in these filings to signal stock etfs these are for traders because of that daily reset mechanism so if they didn't have the ability to monitor a portfolio, these particular instruments are not necessarily for them with that being said, they're intended to function similar to other etfs >> will, you have also filed for a series of leverage and inverse etf's here how upset will the fcc be to all of this. he says they composed risks even to sophisticated investors can you handicap the odds that they will approve these products >> the good for these products
is that the structure has been around for many, many years and people are comfortable with how these products work. we have been running something similar to this in europe for three years. and i have to say that it has been popular they say they're more short term, so more sophisticated by nature, but there is just not many ways to accurately express short sided bets or long sided positions on single stocks and that's what these products do for people. >> we'll get more on this, much more on the future of leverage and inverse single stocks with dave they be joined by the financial future oerwn
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and christina partsinevelos. the boston marathon is under way this morning the race returning to it's regularly scheduled date taking first place, the men's wheelchair race, the women's wheelchair race. in mischigan, a young girl brought the drink to class to share with their classmates that said they felt woozy and dizzy the school says it is unfortunate that these types of adult bev reaserages can be easy
mistaken >> eight million people through upstate new york are looking at weather alerts parts of new york and pennsylvania scott? dr drinks and snow. >> thank youfully it is not arod here bank of america the last of the big banks to report. leslie picker here to tell you more because she broke down the numbers, yes, on the heels of earnings, you can see bank of america firmly in the green there, but they're firmly lower year to date it was a quarter of beats with relative expectations. but the culprit investment banking fees took a major slump in the quarter with underwriting
drying up essentially. sales and training held up better reporting stronger than expectedti activity. some of the less value tide businesses held up as well as was to be expected they all saw deposit growth and loan growth and they should benefit from rising interest rating in the future they warned about the increased race of stagnation and mixed signals. the ceo said it can only be described as complexion and uncertain and jp morgan said of jamie dimon there is almost no chance you won't have volatile markets. contrast that with brian m moynihan saying the strength of
the consumer makes it different. >> does this make you want to own the banks or avoid them? >> we're just back to the same place we were before we started. >> right, the only reason to own these is if you believe the curve will steep n right now i'm leaning towards one but not because of the yield curve being inverted there was no surprise to me and many others that banking volumes would be way down. they were, however, ipos seem to find a price they need to get out of the gate eventually so i don't expect that to continue unless the market really, really sellings off. i own them and i'm staying with them, specifically goldman and b
of a >> you said you were looking at bank of america, right you looked to see if you still wanted it in your portfolio. the very day that we had this conversation last. so what would make you sell it >> what would have made me sell it is if they didn't capitalize on the trading environment and if they weren't able to pull other levers out and if they're loan growth was negative they put up low growth numbers and think about what will happen as you get a better spread so if they missed on other areas in addition to banking which was not their fault then they took some off of the table, but it is also price dependent the stock was about 10% higher than it is now >> joe, you own bank of america and morgan stanley, same
question to you, do you want to own them or avoid them >> makes me want to own the two that i own, morgan stanley and bank of america because they were able to perform with trading revenue zero days of trading losses that's a pretty good quarter i would not go out and seek additional exposure in the one bank that i think everyone is looking at right now is j.p. morgan and wondering if you don't own it why not buy it. and i think the concern there is is that i would sell bank of america and morgan stanley if we secret losses. credit jamie dimon for going out and building reserves. they protect against inflation and the war in ukraine and the potential credit losses. i think ultimately the path to the final institutions will be traced out upon whether or not we begin to see these credit
losses and ouch of the banks will have to build and reserve for potential losses >> you own bank, goldman, you sold calls in city and wells fargo. >> my biggest take away is that they just lived up to what we were talking about it was too expensive it was two times and you look at the different levels, some are more on the trading side joe has morgan stanley i like what goldman sachs is doing. they're half of the value of morgan stanley that's why i'm in those names. i think they're less expensive bank of america i compare to jp morgan that is why i picked what i got, i have that u.s. bank exposure as well.
>> speaking of, jenni is all about the regionals. >> so what i leek about the regional banks in this environment is that in the environment that we're in,wher it is complexion and uncertain, you can look at the community banks, and you can know exactly what they're interest rate exposure is. they become immune and i like that level of granularity. i don't want to read the report and see they had russia exposure you only want to own those in a rising rate environment. some are hurt by rising rates,
there is too much complexity this is not the environment where you want overly complex businesses and that's what all of the rest are. stick with your transparent banks right now. >> we're going to talk shares coming up. phil lebe a au got a look at the challenges we'll see how the committee is playing that space here is tim seymour. yo young people in this country are our most valuable assets teaching her to prepare for the future it's about helping her become independent and charting her own path in the world.
that's because nobody... and i mean nobody... makes hybrid work, work better. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire well, the challenges continue shares are down 80% from their 52 week high fill recently got an inside look at the production plant in ilsz. what did you find, phil? >> there is three assembly lines. forget about what r 1 t, how it will do against other employees.
and when the we plaque in the plant, this is what wall street is focused on right now. increasing dramatically in the fist quarter and it is down from what many analysts thought and what they thought they could build if they had more parts and components. how comfortable are you with the improvement of the supply chain. here is what he had to say >> i think high 90%. a small percentage of parts. and whether or not those are semi conductors, that's how we try to expand our supply that second-degree really what
will moe this symptom, we talked about this, guys they have 83,000 orders for their vehicles and that extends them through the end of 23 it is expected to deliver more than 2.2 million electric vehicles by the end of 25. and as you take a look at these companies there is combined, between these three companies, over 100,000 orders. it is a question of rarping up production and we start to talk about battery supply and battery cell supply. >> part of that, the biggest challenge is the smallest percentage of parts are the most difficult to get and the ones they may have to wait the
longest for. let's not kid ourselves. >> there is no doubt about that, and rj feels more comfortable about that supply for the industry, but let's be clear, you heard other auto executives say we'll be fine the end of tht quarter. ridiculous everybody in the industry admits this is going to extend into 2023 that is going to be a constraining factor, not just for rivian but all the auto makers we're seeing a gradual improvement, but it's going to take time. the pie is not big enough. we need more foundries building more chips >> phil, thank you pete, you know the pain pretty close. right? you own rivian calls >> yeah. yeah there's no doubt and there's full pain there. those disend grated not long after i bought them. i still own them, but they're unsellable tesla, it's all about supply chain as you were talking about with phil, i think that's the
most important key you were talking about semis that's it. i think that's the advantage at times that tesla might have. that's why tesla is not that far off the highs back in november when it was 12 00 or just this past march where it was $1100 a share. i think it has the potential to get there at a very rapid rate under the right circumstances in the market >> good stuff. pete has unusual activity after this quick break don't go anywhere.
all right. pete, what you got for unusual today? >> you know, sot, we started off the day talking about oil and the price movement we've seen there natural gas how about uranium. the stocks have been on fire as well kameko has been going to 52-week highs. it was trading around $31 a share. today a pier of 4,000 of the september '32 calls that they hedged that. the 32 calls, pieing a lot of time for the uranium stock to make another new high. xbi is the next one. the biotech spider this is interesting. i normally won't go into an etf, but this captured me
they bought 20,000 for a little over a dollar. this is a bio tech etf that the largest percentage ownership is under the 1.25%. very diverse when you're looking at this name in a vid ya, we talk about this and see the size buyers walk in. 24 hours of this week's expiring on friday, the april 22nd expiring 220 calls bought today for anywhere, call it somewhere close to $3. a lot of buyers. we were talking about chips with rivian, tesla. this is another one of the biggies. we talk about this one all the time as far as automobiles and everything else. that's why i think we're seeing this kind of call activity today. >> i appreciate that, pete thank you. final trades are coming up next.
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lot of travel and the planes are packed the airports are packed and it's going to be a great summer for airplanes. for those who can afford to travel >> give me your final trade, steve? >> cash. just haven't changed my view >> okay. still cash jenny? >> ibm they're reporting tomorrow 5.2% dividend yield. >> we'll see what they deliver stock upgraded pete >> i continue to see a lot in the energy space i'm going to give you et i think this is a name with the natural gas we were talking about earlier. pipelines everywhere i think it's going higher. >> the natural gas story is something. it's over 8 as we speak. 8:03 >> joe, you're been watching it closely as well. >> it's not peak inflation it looks like surging inflation to me. now that places the entire
natural gas board all the way to february of next year above $8 my final trade is oneok, a natural gas in california. good to see you guys i'll see everybody in "overtime" "the exchange" begins right now. thank you very much. hi, everybody. more on the natural gas price spike in the next couple hours the highest we've seen on the ten-year treasury since 2018 and means mortgage rates aren't done going higher and stocks, you should dump growth and go for the dividend payers. we're doing three buys and a bail rising rates edition. three stocks to buy now and one to stay away from in the higher rate environment and the missing link in the clean energy revolution ishe