tv Fast Money Halftime Report CNBC April 19, 2022 12:00pm-1:00pm EDT
relatively skeptical about the path forward here for musk. >> i don't blame him he made some good points however, what i would say to that is don't necessarily sleep on big tech with regulators, would a big tech company have it rather than elon musk and what about the crypto billionaires or dow? these are all new money options potentially? i don't know >> we'll watch it, obviously, as the episode unfolds. don't forget netflix and ibm tonight. let's get to the half. ♪ welcome to "the halftime report." i'm melissa lee in for scott wapner your stocks setting up for a near-term rally and it's just gotten better and we'll debate all of that and much more with our investment committee, stephanie link, jason snipe, jim lebenthal and jon najarian of marketrebellion.com. the dow up 58 points the nasdaq up by almost 2% and the yields hitting fresh highs
and ten-iary yield hitting its highest since december 2018. right now we are two 888s, lucky triple 888s and its highest level since april 2019 stephanie link, what just happened and why the huge reversal particularly because we're seeing not just the mega-cap tech stocks on the nasdaq and we're seeing the lower quality innovation names and ark is up 2% today >> well, i think also you have the re-open names that are doing really well after the mask mandate, and some of the airlines and the tsa were lifrtlifte and underneath it was all multifamilies and maybe the housing market is not as hot maybe the economic data continues to be mixed. maybe the fed doesn't have to go as much. i mean mueller was crazy and
they want to get ahead of the curve because i know they're behind the curve we've been talking a lot all year long, melissa, about all of these unknown, right and that it's going to be a choppy market because of the unknowns with the war, with inflation and the fed. that's the reason why the market is down, the s&p is down 7% year to date. that being said, i was really encouraged by the banks and what they had to say. the big six last week and then yesterday and what they said mainly was that the consumer is ng thatting in and they're really strong. j.p. morgan said that the consumer is in an extraordinary good shape so to me that's encouraging and they talked about jobs and wages and savings and all of that, but they also then talked about how there's a shift more toward services and reopen. why is that important? a, the consumer is 70% of the economy and b, services is 70% of u.s. consumption. so we are rooting for the consumer and from what we're hearing from the banks they're fine they're better than fan.
what does all of this mean and that's supportive for stocks and you want to be balanced between cyclicals and quality growth i've been leaning more toward buying quality growth on the pullback because you know i've been on the cyclical side. i'm really encouraged by the re-opening names and there's a lot to choose from here. i don't think you have to pay up and chase. by any means, stay patient and be valuation sensitive >> diamond had an underbelly of caution and bank of america's moynihan was bullish when it came to the consumer and that was yesterday morning and jason snipe, we had bullard yesterday float the idea of 75 basis points one hike of 75 basis points and the market's okay with that. >> yeah. >> yeah, mel i guess what i would start by saying is obviously last week we've got a slew of macro data
we saw a cpi number thanks in line and we saw a ppi number that was explosive and when we go back to core cpi which was lights lighter than expected which was a pullback in used car sales and the durable goods had declined some and i'll go back to what steph's point just made on financials in the state of the consumer the consumer is still healthy at this stage so i think these are all positive sentiments going forward. let's see if the market can do some of the work, you know in easing some of the supply chains which obviously will be beneficial for a number of sectors. so i know there are -- there is some light at the tunnel and possibly, you know, inflation, you know, potentially topping out here it's likely it will continue to persist, but maybe we don't see higher numbers from here, and i think those are all positive tailwinds for the market going forward. >> i don't want to get bowled up on one session here, jim lebenthal and to put in perspective, the nasdaq is off
16%, 17% from its highs and we are just on the precipice of earnings season and we've gotten so far is a mixed bag. what's your take on what could be inconsequential given the guidance companies especially with the there are this is something that we talk about, but the impact of the dollar could be huge for multinationals this quarter and it will be interesting to see what companies say and how they navigate that guidance >> it's certainly what they say and not just the guidance on the dollar's impact and the guidance on the war and the guidance on margin pressure from inputs going up, and i think you're right, mel, to start off by saying one day does not a rally make, but i would like to put it into perspective here. we were in rally mode until two and a half weeks ago and in that two and a half weeks just looking at the s&p 500, which i'd like because it's broader than the nasdaq and we're off that peak, two and a half weeks ago. it's not a moment to say oh, my
goodness there is a talk of war between the markets right now and it's between a very aggressive fed on the one hand, very aggressive as witnessed by mr. bullard yesterday and earnings which you pointsed out we're just on the very cusp of we've had 8% of s&p companies report and that's just not enough to hang your hat on, but so far 79% have beat estimates which is close to the historical average and at least during the last week you've seen aggregate s&p 500 tick up albeit by a little bit the main point is it's too early to hang your hat on earnings, but the initial indications are good this week will be very, very important and the next three weeks will be important because that's the heart of earnings season that could be enough to overcome a very negative fed or very aggressive fed particularly when the s&p 500 is off 9% from its january high, meaning a lot's already priced in on the down
side. >> jim raised an interesting points in terms of the s&p 500 and how far off of its high it is it isn't that far off, actually, dr. j although it feels world away we're off 8% from the 52-week high in your mind does that make you feel better or worse, worse that maybe there's more damage that needs to be done on the s&p 500 because we haven't priced enough in >> well, mel, i was just looking at that structure for the vix and looking at that, if you look at the spot vix and in other words, the second by second trading vix, that is basically under 21 you would say, pretty nice drop today. people muftd be feeling pretty bullish and obviously the markets are higher, but you look out at the curve and look at it out into june and that's north of 25 still. that's telling me there's a lot of uncertainty potential for
volatility out there in the june, july timeframe for sure. what does that mean? okay, we're getting through this early earnings cycle right here, but out the curve, not nearly as bulled up as some of the short term moves would tell people i would say we haven't sounded the all clear. it's nice that the market is able to trade up in the face of these much higher interest rates. i suspect a decent amount of that is also the mask mandate that steph mentioned how good that is for the reopening as well as crude oil coming off by better than 4%, i think, today i think those two factors are pretty significant in the short term, but won't be nearly as significant out there three and four months into the future. >> steph, how are you feeling about technology as we look out to netflix earnings tonight after the bell and i know that's not necessarily a name that you
dabble in, per se. netflix is sitting at close to a t two-year low and a lot of the stocks will be key to watch in the s&p 500. so do you think r that we are in an environment where large cap do well? >> i don't think really expensive technology stocks are going to do well non-earners especially will not do well, but i think there are a lot of places within technology that you can find bargains i've been saying this for a while now and i've been wrong on facebook i owned it before it fell. i still am a believer long term and it is nine times ebitda and this has a $50 buyback and they have facebook and instagram which is getting no credit whatsoever so that's an idea i like very much you know ibm reports tonight and i own that, as well and that's a transition into the cloud story
under new fairly new management. he's been there for a wehile, bu he's been doing things that are under the radar. fortinet and the stock fell at one point this year 16%. i had owned it, i sold it and then i bought some back because i like the cybersecurity total addre addressable marks and it's not cheap, and i can't defend it, but it got affordable to me or attractive to me and i added to apple. on the margin i've been shrinking the number of technologies that i own in my portfolio, but i have been building bigger positions with the ones that i do own where i have a lot of conviction >> yeah. jim lebenthal, on the 5:00 show "fast money" we like to play a game and this will have a long maim and i can tell you the scenario and you tell me what the outcome would be and if i'd told you yesterday this rates
would be up 2% in the ten-year yield and i would ask you what the tech stocks would do today, would you say up 2%? >> i like the game you're playing and i'll willfully play it the answer is no, i would not have said that, but the market gives you what the market gives you and now you have to digest that and what is the market saying melissa, i think the market is saying we've gone too far on interest rates and let's put it in perspective the last month you've seen 80 basis point increase in the ten-year the ten-year yield has doubled over the last four months and granted, there are valid reasons whether it's inflation or the potential impact of quantitative tightening, but whenever you see an asset do a sort of exponential rise like that, i'm talking about yield in this case, usually, there's a little bit of giveback, and i think the tech sector is sniffing that out. by no means am i saying the ten-year will go back to 2%, but to go to 2.7% and stabilize
there as we really figure out what's going on with inflation, that seems like a reasonable call to make and i think that's what the tech sector is saying today. >> peak rate think that's a good one. let's get your senior economics reporter steve liesman with more on this great rate debate especially following bullard's comments made to the one and only steve liesman and you're monitoring charlie, vans evans speaking now, steve. >> just turning down the volume on that. the economy should do well even in a rising -- he's talking about the economic club of new york has been monitoring it. he also sees the fed needs to monitor for the risk of a wage price spiral and the bullish outlook for evans dove tails with what bullard told me yesterday. he is one of the most hawkish and also pretty bullish on the economic outlook one of the more bullish ones bullard believes it should raid
3.5 basis points by year end and he thinks the u.s. will have above trend growth and declining unemployment >> that one was successful and did set up the economy for a stellar second half of the 1990s. one of the best periods in u.s. macro economic history so it was successful and in this cycle, was there a 75 basis point increase at one point. so i wouldn't rule it out and it's not my best case here >> he was talking about when they had the 57 basis point hike we're not ruling it out and the key is making clear to the public and the markets that the fed is in a new inflation-fighting regime and that it means what it says about fighting it if it gets that right, bullard thinks the fed will have declining inflation and the new unemployment,
melissa, as you know, not shared by many right now. >> to understand what we're talking about, he's saying sequential 50-basis-point interest rate hikes to total, what an additional 3.25% by then of the year -- >> 3.5%. >> 3.5% excuse me and above trend unemployment. >> you got that right, melissa i raised my eyebrow three times on that and went back at him and he pointed to a paper written by tom sergeant in 1982 when there was similar skepticism about theablity of the federal reserve to fight inflation back then and he pointed to vaefl european efforts to fight inflation in the early part of the 20th century this were successful according to time sergeant, the nobel prize-winning economist and inflation magically disappears because both the fiscal and monetary authority went to a new inflation-fighting
regime and that paper argued that he did not have to have a big cost in unemployment >> stay right there, steve i want to go to my traders if i may, i can see the four box of the traders and i can see them up all at once. show of hand, do you agree with james bullard in his assessment of what will happen if we hike rates 3.5% by the end of the year do you believe that there will be above-trend growth and declining unemployment raise your hand. raise your hand. >> oh, stephanie link, you're the only one okay why are you so confident >> i like to be a contrarian >> so you looked at all of the other guys first and then you raised your hand >> no. i can't see anybody! i can't see anybody. i'm looking at a camera. >> all right so -- it goes back to what i said in the beginning. the consumer is 70% of the economy and they have to stay healthy and i do believe they're
in strong shape after i heard the bank ceos tell us all of the great information over the last couple of days that's number one. it's a big number one. number two, i do think inflation is in that peakish area right now and i do think supply chains eventually will improve inflation. that doesn't mean that inflation is going away. wages and rents will stay high and they're more sticky and i do think inflation will come down from these levels. that will help the consumer who have jobs and have wages and have savings to spend, right and they are spending and then i think you also think about gdp certainly not going to grow 6% like we did last year and we'll grow 3% to 4% and that is because we -- i already thought that back in november, december of last year that we were going to see slower growth and we don't have the fiscal, monetary policies that we've had in the last two years so you're clearly going to slow and you'll have war issues, as well and that's a problem and
we'll have to see how that pans out and add it all up maybe it's 3% gdp and that's above trend and we have lower inflation and lower growth and still above trend growth and that's good for stocks >> steve, did you get a sense of what this scenario would be that would have bullard advocating fair 6 basis point hike. >> he was pretty clear and this was something he did not want to rule out and not something he wants to do, but something that he might consider if the fed did a series of rate hikes of 50 basis point rate hikes and still did not seem to have control on inflation. he clearly wants to get the fed up to neutral and the fed is not restraining the economy which is true by definition if the fed does get to a place which is, in fact, neutral which is an unknowable number and it is neutral as to whether or not it is helping the economy grow or holding the economy back and
then we'll see what happens with inflation and the idea being that if the inflation regime is appreciated, the inflation fighting regime is inflated by the public end markets and he also points out, melissa, i think jim was talking about an awful lot of heavy lifting already and you will not get an additional $300 basis points of tightening and there are 100, 150 to come and the bulk of it is already done. the bulk of it, anyway the heavy lifting is in the bond market already and is there a stock market or a disconnect, jason, in your view? >> the point i would absolutely makes is the fed -- there is a credibility story. a lot this is just is talks and
sent lights and i do believe that these two hikes i'll have them base basis points a piece which are priced into the market, they will be data dependent at this point. let's how things evolve and as jim shared earlier the market will do a lot of the work and will continue to do so especially as supply chains ease and the fed will be on autopilot and we'll take a step back and see how things develop. >> steve liesman, our thanks to you as always. >> pleasure. still ahead on "the halftime report," trades on some of the biggest analyst stock calls of the day plus j'son latest trades in you unusual activity and why there is pain ahead for one key area of tech area of tech halftime returns in two minutess to the nasdaq-100 innovations, like real time cgi.
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and the reason is quite simple ask that's the sanctions against russia and the inability to get things out of ukraine, the bread basket of europe and food prices continue to go higher and i'm not saying they're wrong for taking money off the table, mel. it's up 97%, mosaic is up 97% year to date so are you dumb to take money off the table? no, but these sanctions and the damage done to the infrastructure of, crane will mean that this is extending out years into the future. this isn't a fix that happens with the passing of just a couple of weeks or a couple of months, mel. so i would continue to own those just like i would continue to own coal names like pea body energy, btu, like paterson energy pten and like the oil and gas names because again, all of this is going to continue to
play out for years this will be much higher prices for a long time, sadly, mel. >> yeah. halliburton's earnings this morning, steph, gave us a good glimpse into this industry and also the tight supply chain found across sort of the scale of oil in north america. >> yeah. >> and it's look a -- i'm sorry. >> all right >> sorry, jon. yeah so i own schlumberger. i call it my hidden technology play because they have technology that helps customers become more productive and more efficient so bond market parties win so i wouldn't surprised to see halliburton do well. i expect schlumberger do very well on friday when they report and it is one of my larger energy positions in ag, i own kortiva and it's the number one player in ag and they have a fairly new ceo focused on new products and
margin improvement and for those of us who owned honeywell in the past, he was brilliant and he is now the cfo at cortiva that's my play on the upside cortiva, new high in today's session. getting a price target cut for j & p securities and we heard steph adding to her position jason, how are you feeling about meta >> yeah. so met a i sold actually a couple of months ago that was big for me to just the ios changes that apple made, so i decided to unload the position you know what? i think it's going to take some time it's a show-me story here and obviously the name has grown tremendously since the ipo, but i think, and also, too, investment that they've made into the metaverse to kind of see how that plays out so for me, it's not a position i own currently, potentially look
at something down the road and as far as entering back in, but it's not something we own right now. >> moving on to lulu, and the firm raising its price target on the stock to $495. jon, you own call, is that right? >> i do, mel, and you know, this is one that, you know, knock on wood, courtney gibson really got me into it and i haven't wanted to get out of it and that's the same story, mel, with people that buy their clothing and whether it's men or women, and they love the feel of the clothing and the production quality of the clothing. so i think this is one you do hold on to, despite the fact that, you know, they've done as well as they've done i don't see the competition, really out there i mean, yeah, they have lower price brands even for big producers like nike or gap stores through their various
lulu competitors i just don't see people migrating or being as nearly as loyal to those brands as they are to lulu, mel >> all right we've got to take a break here jon meantime is tracking unusual activity in the options market hilasts te trades are next on halftime ♪ ♪ ♪ an approaching car, a puddle, and knew there was going to be a situation. ♪ ♪ ntis. ♪ really? today she's a teammate at truist, the bank that starts with care when you start with care, you get a different kind of bank. hybrid work is here. it's there. it's everywhere. but for someone to be able to work from here, there has to be someone here making sure everything is safe. secure. consistent.
♪ i'm bertha coombs. here is our cnbc news update at this hour. james and jennifer crumbley back in court seeking a lower bond and house arrest after being charged with involuntary manslaughter for the 15-year-old son ethan's school shooting rampage. prosecutors maintain that the crumbleys were negligent in no preventing the shooting. their defense arguing that the prosecution has unfairly portrayed them as bad parents, and as the prosecution's understanding of the facts change e the crumbleys may be found not guilty the judge has set their trial date for october 24th. the family of police shooting victim patrick lyoya hiring
forensic pathologist dr. warner spitz to complete an independent autopsy concluded that a single large caliber bullet shot through the back of lyoya's head was the cause of the murder. he also noted he did not see defensive wounds suggesting there was no altercation spitz has looked into many notable deaths including president john f. kennedy and martin luther king jr.'s and ride-hailing giants lyft and uber say riders and drivers will no longer be required to wear face masks. the move comes one day after a federal judge in florida struck down the biden administration's mask mandate riders will still have the option to wear masks which are still recommended by the centers for disease control and prevention back over to you, mel. >> all right bertha, thank you. bertha coombs. time now for unusual activity and jon, what are you seeing in the options market today? >> well, for a change, mel, it's not all just really, really short term
the first one is alibaba, baba this one, there's call buying, 11,500 of the calls all of the way out to june at the 120 strike the stock was roughly $93 when they were buying those, mel. so that represents quite an upside move. obviously, the stock has been in big trouble as many of the chinese stocks have falling rather dramatically from last fall until now, but it's made a bit of a recovery and i'd be willing to bet on this one, as well second one is stone, s-t-n-e and they bought 500 of the stock at $10.60 it's thin tech out of brazil for merchant, digital sales and all of the rest and very cheap compared to where this one was as well. so those are two big stocks that people are betting on, bounces
after just some horrible hits that they've taken third and final, mel, is snap, s-n-a-p, a $33 stock right now they bought 10,000 of the end of april 35 calls again, just out of the money at $1.50 out of the money i like the play. i think snap could have a little snapback, mel, and so i'm in all three of these trades and obviously, snap's a little bit of a play on what goes on between elon musk and the twitter board, as well >> so people think snap's going to go higher because what scenario with twitter and elon musk >> well, maybe they get that poison pill and other measures being keep mr. musk for getting it that's bad for twitter and good for shareholders, but good for snap which is basically eating
twitter's lunch as far as fund goes >> up next how huj fends are repositioning and we'll tell you all about it, plus semistocks up 20% from the recent highs. is there more pain aadhe for this group how the committee is plague the se se committee next on halftime alright, so...cordless headphones, you can watch movies through your phone? and y'all got electric cars? yeah. the future is crunk! (laughs) anything else you wanna know? is the hype too much? am i ready? i can't tell you everything. but if you want to make history, you gotta call your own shots.
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green light capital's david einhorn is out with this hour. >> green light capital's david einhorn revealing a bearish portfolio posture from the first quarter that paid off in its returns. einhorn added more index hedges and increased macro positions and credit default swaps that the firm has directed its research efforts to focus primarily on short ideas as such, einhorn said the firm added no long editions during the long quarter compared to with a 4.6 decline
in the s&p 500 einhorn delivers a considerable space to monetary policy, implying the fed -- he said if the fed was serious about stopping the inflation problem it would be as aggressive and creative in tightening as it was when it was easing einhorn analogized the debate versus a quarter-point cut and a half point hike, whether it was better to clear snow with a laider or an ice cream scooper prices are leaikely to lead to higher energy prices and inflation is destroying demand which is slowing the economy, melissa. you can see some of his bearish posture is playing out in how he feels about the macro environment right now. >> the performers in the quarter, interesting, because he got into a coal name and a
copper name just before war broke out and he only added very small positions to a lot of other ones with the transport and energy space >> he announced the new editions including international seaways and ryanair holdings and southwestern energy and weatherford international and again, these are very small positions. you can see there are some kind of play whether directly or indirectly, which he spells out in the letter a little bit that he thinks there is some bullishness with commodities and things that would not benefit from higher energy prices and the like and you can see that in his positioning and interestingly that the short side of the book is where he's been focused on especially since prior years that's been a real difficult place for any hedge fund manager to make money. >> yeah. when you take liquidity away it will make this game easier for them >> leslie picker, is now the
time to look for shorts in this market, jim lebenthal? i don't think so melissa, you're probably aware that scott calls me mr. all in >> i know. >> if there were a criticism of that i would think that is way too early and i don't think so because i did this in the end of february and early march and i don't think this is a market to short. i know you don't like it when i bring up my frenemy, steve weiss. he would answer the opposite and he has a thesis that we'll get down to a 14 multiple on forward earnings for the s&p 500 i just don't see that because i see earnings continuing to grow and again, back to what i said in the beginning of the show this is a tug-of-war between earnings growth and the fed. the market's been pricing in the fed for three months it hasn't been pricing earnings growth that i think will continue and i think it will be early in the earnings season and we've seen it already. >> jon, i'll ask you the short question do you think now is the time to
look for opportunities in the market >> no, i don't, mel. i think jim's been right the market isn't just going to dismiss higher greats. the question is how much higher do they go the bond has done a lot of work. you've talked about that, mel, for the fed already. the question is are the rest of the fed market participants on the fomc, the voting members and are they going to be of the same mind as mr. bullard, i think not, and i don't think bullard said it's an absolute slam dunk that he'd be in for 75 basis points he just said it's at least in the discussion that doesn't mean that he thinks it's likely. so i think the bond market has already done as much as you need to do and then we'll see in the next fed meeting how they'll shake out. >> the chip etf down 20% and
nearly every stock in the smh is down double digits and today wolf research says that the semis lack of a support of the key technical level means they could break down even lower. seth, you recently reduced your chip exposure. which names? >> nxpi and lam research and it was just taking profits because i had bought these two years ago and i was up trij ple digits in these names and i'm nervous that as supply chains start to ease and they will eventually and we just don't know the timing, but i think you'll have inventory issues, because we keep seeing double and triple ordering just so that the companies meet demand and they said it on the conference calls i don't know the timing of when it will happen and lam in particular, wafer equipment. it trades on that stat, right? and the numbers are starting to go down for 2023 you've seen 15, 16, 20% growth over the last several years in
wfe spend and down single digits and not the end of the world and i don't think the stock will outperform when that happens i own broadcom it's a huge position and they've done a great job navigating the challenges and they're buying back stock and increased the dividend and they have cloud and data center and they raised numbers last quarter by monster numbers and i like that company and if that one were to fall i like the diversification and i would be buying that one >> nxpi getting a downgrade and an analyst talks about peak margin it was a margin expansion story for? time when the stock was up jim, you own this one. what do you think of this thesis i still very much like the stock and the sector you know, i would net that nxpi is off a little over 20% from the 52-week high and that sort of comment from the analyst and i would have liked to have heard, like three months ago, but it wouldn't have changed my mind though, because the biggest
market for nxp semiconductors is the automotive sector just simply can't get enough chips and they can produce enough cars, trucks and suvs to sell all they want right now and that demand has not been destroyed and it is pent up and nxp is in a condition where they can name their own price and i don't see the margin pressure that's being talked about here. >> you have a couple of long term holdings and you will look hard on them, given their declines >> obviously, i own qualcomm and nvidia if i look at callqualcomm as tremendous value and it's down over 20% year to date, and i just look at the tire industry it's a 500 billion tam, and jim makes a great point on the automotive sector. i think there's so much demand there and yeah, obviously they've struggled as of late and for me, i'm not really looking to make any moves here and i'll
be watching as the quarters to come and the supply chain is important to note so i'll see how things unravel. >> netflix shares falling over 40% this year. some of the committee owns this one and we'll debate the trade ahead of earnings when halftime returns. are you following "the halftime report" podcast what are you waiting for in actionable debate and advice if the investment committee plus unusual activity and more. look for us on the podcasting app. app. follow the is spread equally across the s&p 500, which reduces potential concentration risk and helps keep your portfolio in balance. stay in balance with invesco's rsp.
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netflix reporting earnings after the bell and they're expecting subscriber growth to slow and this was netflix's downfall and it was a disappointing forecast and they've traditionally not been good at forecasting their own subscriber growth. so war you looking for this quarter? >> yeah. i mean, mel, it's been obviously very disappointing, north of 40% year to date and down over 12% in the last week so i'm really interested to see how they're doing in the far east netflix has done well here in north america and latin america, and in western europe, but let's see how they do in the far east. subscriber growth, i expect to slow they were a huge pandemic winner and they benefited from the environment with folks shifting to services and experiences, i think netflix will have some trouble going forward.
so let's see how it plays out and here we'll see very soon after the bell today that's how i'm playing it here. >> international growth has always been the bulls' tenet for this -- for this stock dr. j, we got a report from cantor that said uk households were cutting their subscriptions by 1.5 million, that's up by 500,000. mark mahainy said that growth in latin america has been disappointing. what happened to this part of the growth story does this make you concerned you own calls. >> i do, mel, and one of the levers i thought they had to pull was the idea that they could move up the subscription rates without losing too many subscribers. whether it was the content whether it was economic cutbacks by consumers and perhaps that outlook by me was wrong, that they didn't have nearly the pricing power that i thought they did i thought because of all of the shared passwords and so forth,
that is within a given household, that they could do that, mel, but at least what has borne out so far that is not the case i still hold the, i believe, 360 call, mel, which are $10 out of the money and i'm short after e tonight, whether or not -- i mean, it certainly looked like 330 to 350 was where we've bounced several times. three times basically in the last three months. if that doesn't hold here and we don't go higher, then it's probably time for me to fold them up and go away. >> all right ibm is another big stock to watch ahead of earnings after epniowll sthae ns it. sthae ns it. we'll get you set up forps me fe i got it all under control. voya. well planned. well invested. well protected. (ted) after talking and texting for years, we got married... one next on the halftime report.
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stephanie, you own this one. >> i do. i do own it. it's another restructuring turn around story i hope that 2022 they will be able to deliver for tonight, i don't really expect a lot they have head winds from currency you asked that question at the top of the show. they are going to feel it. that's a head wind and this is a weak quarter, the first quarter is for them. that being said, i think you're going to see a good encouraging development in consulting. high single digits and software as well, high single digit growth led by red hat. an inline quarter i think would be fine.
i think gross margins will do better than expected because they'll have a software mix. the key will be guidance, and the free cash flow number i'm looking for is 10.28 billion for the full year and it gets them to 35 billion guidance over the next three years in free cash flow a 5% yield it's outperformed the xlk nicely year to date i think this is going to first quarter that starts a good 2022 turn around year for the company. >> it's been a relative outperformer versus the peers and the s&p 500 versus a lot of other indices. jason, stephanie mentioned the valuation is low is it low for a reason or do you think it's value >> that's a good question. obviously i don't own ibm, but what i would say is it's clearly in the value space, and i think if you're looking at this market and watching inflation and
watching where rates are, obviously the investor base is now looking more closely to valuation than they have in the last three years so i think it's to steph's point, it is a turn around story. let's see how it develops over the next couple quarters and i think that's the market is the take on it we'll see how it works out ll right if you wake up thinking about the market final trades up next on final trades up next on halftime and proactive alerts on market events. that's decision tech. only from fidelity. [sound of helicopter blades] that's decision tech. ugh... th♪ ♪found me. nice suits, you guys blend right in. the world needs you back. i'm retired greg, you know this.
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we'll break down all the details on netflix and ibm earnings and take a look at the king dollar kingpins where you should invest when the green back is rallying as it is right now a number of stocks hitting new highs in today's session among them, raytheon >> i've owned it a couple years. defense spending is going up around the world and the demand for raytheon's products in that regard, they really produce what the world wants right now. the other half of the story is aerospace which is picking up as the global economy recovers from the pandemic there's two reasons to own the stock. >> j&j hitting new all-time highs. a mixed quarter. i thought what was interesting was the commentary about the expectations for the covid vaccine. it met internal expectations but there was a disconnect from what was street was expecting. >> it was a little confusing think the bigger story is pharma continues to hum along excovid
it came in at about 9.3% growth. also the device business, the reopen play. and that actually saw very nice growth and acceleration to 8.5%. they're going to combine these two businesses and spin off the consumer business. to the extent med tech is doing well and has momentum, i like that for the valuation >> let's get to the final trades here jason? >> i like pnc. this is my fairs regional in the space. i think the acquisition will continue to be good for the balance sheet. i like it here stay long. >> stephanie >> gxl logistics flawless execution total addressable market is huge, 8.6 trillion >> citi group. the yield curve is steepening and rising that's going to benefit jason's pnc, but also the senment on this name has changed since
earnings came out last thursday. it's easy to tell. >> dr. j >> charge point. i bought the april 16th calls with the stock trading right here at about 1580 just minutes ago. >> all right that does it for us here on the halftime report. fast money 5:00. meantime "the exchange" begins right now. >> thank you hi, everybody. i'm kelly evans. here's what's ahead this hour on "the exchange. stocks are rising with 1% gains across the board the nasdaq is leading the way even as yields surge higher. the 30-year popping 3% the ten-year getting close to that level is the rally in stocks just a head fake or not we have both sides of that debate plus masks now optional on planes but this win for the airline comes as yet another one has to trim its peak season flight schedule and as covid case