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tv   Fast Money Halftime Report  CNBC  May 12, 2015 12:00pm-1:01pm EDT

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higher, which they would appear to be, arguably led now from the united states. more than what was happening in germany. >> a note from our markets desk saying the 10-year yield in the u.s. hitting a high it hasn't seen since november. not december. so certainly some action. but for now it's nearing noon on the east coast. so we'll send you over to scott wopner and the halftime show. ♪ ♪ guys, welcome to the halftime show. we meet our starting line jup for today, steve weiss is here ayalon with jim lebenthal. and pete najarian and paul richards is with us and our game plan looks like this you've got $4.5 billion, what verizon's deal with aol means. and the disrupter 50rks the ceo of cloud-based twilio is here with us. if you ride uber you've used his
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service. but we gink ginn with tbegin wi. bonds around the world selling off. yields moving higher. stocks have been falling. falling more sharply than they are at this hour. all of it raising serious questions about what it means to your money. josh brown, you've had the ten-year yield at a six-month high. european equities getting smashed as rates rise. what is this about? >> i really think it's people looking at their portfolio, looking at a play book that's worked for years on end and having that feeling that things are changing on the fixed-income side. they may want to make some equity adjustments, i think it's perfectly healthy. it's what you should expect, if this is a turning point for bonds, then certainly the reach for yield, the quote-unquote defensive sectors, the areas of the market that have been giving people 3%-plus dividend yields, that's the area under pressure and it's a big component of the market. so you see it dragging things down. i don't think it's a reason to panic.
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i think again you don't need to have a million different grade trades each year. you just need a few. utilities look like they're on the verge of a significant breakdown. i would continue to avoid. and the regional banks, which i mentioned yesterday and the week before that's the hottest sector. i think there's a megabreakout coming for a lot of those names individually and the kre etf looking at the sector and the aggregate. >> rates are off the highest levels of the day. it's clear the bond market is driving the train. >> that's exactly right. you've seen the ten-year just to pick a particular security rise 35 basis points in about the last month. i think this is very simple. i think this is europe getting back on its feet economically. this is where europe should have been about a year ago. >> the fundamental, you cannot tell me that the fundamentals either here or there have changed dramatically enough to push rates up with the speed velocity -- >> scotty, i can and will. but if you want to throw it to steve. i'm coming back at you. yes, i can. if you go back a month ago -- >> i did a qe like ten minutes
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ago. >> this isn't about qe. what this is about is russia is now stable with ukraine. that's what this is all b. it's not about qe. this is where europe would have been a year ago, if russia hadn't invaded ukraine. >> well, here's what i think is going on. the trade was so obvious, everybody said here's what the fed did, here's the playbook in the u.s. we're going to copy that playbook in europe. we're going to copy it in china. we've seen it work in japan to a certain extent. not wildly successful. it's an extremely obvious trade. quiet you have to ask is do obvious trades that are this obvious work? and a lot of times they don't. so that's my concern. however, what i think we're seeing here is a blip. europe you do see some improvement there. but it's nowhere near on its track. because draghi made the determination to just go one time already. he's going to keep going through 16 in terms of that just started. it didn't start and it wouldn't have started with all the resistance from germany. if things were that much better
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there. >> paul, maybe this is because the fed and other central banks are just losing control of the situation. you hear people talking about that today. >> i do but i think just to the earlier points, i think that europe started this. you know the fact is that everybody got on the same train because the ecb was buying everything under qe te all went long bonds, they had a positional issue that led to liquidity issue. i think the point about russia and eye crane ukraine is valid. is the fed going to move? not going to move? what is the data all about? ultimately everybody says i don't know. and when they do that, that's when you see markets get dislocated. and that's where we are right now. i think what we need is more evidence of data in the u.s. so we know what the fed is going to do. we're going to get that. there's a lot of data coming out over the next week, we get clarity. right now people are a little scared. i would say one more thing -- 10-year approaching 2.3% represents something we haven't seen since november last year, and that is yield.
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that's an alternative to stocks that i think investors are looking at right now. >> kenny, you're on the floor, dow down as much as 180. why should equity investors being so concerned with what's happening in the bond market. >> all of those comments are correct. but let's not, let's not bypass the issue -- goldman sachs puts out that report this morning telling you that there's overexuberance, overexpectation in europe. that ignited that fire. because what really changed between yesterday and today? other than the goldman note to come out all of a sudden saying it's overvalued. just like janet yellen did last week she said it was overvalued. you saw the anxiety creep up and causes this all of this action. and so notice what happened. we traded right down to support. 2080 on the s&p. we sat there, it found support and it moved higher. i think it's an overreaction. i don't think that you're going to see this big sustained move in bond market right now. i think it's like last week, think it's going to come back and settle down. we're 2100 on the s&p once again as the market continues to tease
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with the highs. >> pete, we making much ado about nothing? >> i think to paul's point. i think it's not necessarily much ado about nothing. think the point is we're in this grind and trying to figure things out. unfortunately there's no clear path. other than to say when you're looking at where the volatility is right now, you actually are starting to see that move up. if you looked at some of the paper in the volatility index yesterday. scott, they traded over one million contracts on one specific style trade. looking for a major spike. not a grind to the upside. but a major spike in volatility which tells me there's folks out there that are either expecting that. or protecting against something like that in the marketplace. >> i don't know where the euphoria is in europe. i know people think it's going to work. i think it's going to work. i haven't talked to as many hedge funds as we have over there, they all think the market is slightly ahead of itself. two of the funds that we're invested in are net short germany at this point. so -- it's going to work. but it -- >> one other thing on that, just to scream out that something is
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a crowded trade because two other people, three other people say they like it i think is premature. i agree with steve. people forget, japan is up 1% this year. not even the dollar hedged version. actual japan just look at ewj broadly, that's a 15% gain year-to-date and everyone said last year it's a crowded trade. the year before, it's a crowded trade. these types of trends don't tend to come and go on a 30 or 45-day basis. so when you hear people bullish on something, the knee-jerk contrarianism is going to run you over like a train if you take it as your buy and sell signal every time. >> isn't this a warning shot for buyers of stocks that this is the kind of volatility that you're going to get as you move closer to the inevitable fed rate hike whenever that is? and what's taking place over in europe with their bonds? >> scott, what happened in october last year, when the fed exited the qe, you got volatility. we're seeing more linear markets
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in europe and now we're wobbling a little bit. but once the fed said look, i'm done with qe and i'm thinking about raising rates that equals volatility. get used to this. you're still going to get direction, but you need to have a lot tougher sans if hang on to that direction. >> if rates keep rising in the manner that they do, pardon me, stocks are going to sell off. >> no, they're not. >> why not? >> i disagree. if you look and i've looked going as far back as you can, when rates go up, they're going up because the economy sim proving. you still have a year to a year and a half before stocks start taking it on the chin and then it's a question of selection if rates are going up, paul talks about bonds being more in track with the 10-year at 2.3. the pain that bond-holders are going to feel as rates are going up is a lot more significant than what you're going to be feeling in the equity market. where i still think you can harvest gains if you're in the right sectors. >> but steve, are rates going up because the economy sim proving? or are the rates going up just because the fed is backed in a
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corner and they've got to do something? >> they don't have to do anything. >> that's the difference there. >> nobody is saying doing something. the fed is raising rates because the economy is going, doing better. because employment has hit their target and because inflation has moved to 2%. that's why they're raising rates, not because the clock has rub out on qe. >> i think steve is onto it here. we're talking about rate hikes from very low levels, to still very low levels. you know the rates are going up because they should not have been as low as they were. and they were that low because of europe. so 2.3 does not derail this trade. >> you're so far away from restrictive money. >> why is the market so skittish every time you talk about rates going up 25 basis points? >> it's an adjustment process. >> a market is made of buyers and sellers. >> 25 basis points are nothing. >> we will get spikes, in my opinion, very short-term both to the upside and to the pullbacks to the down side. on the illusion that there is
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going to be a hike and once we get those, that's when we trade through that. >> i know you have the perspective. the moves we've seen in the market are nothing, we're still in the third longest period without a 10% correction. we hit, new all-time highs before we hit another all-time high it's going to take a little bit to consolidate and then push through it. >> listen, i agree with you. i think the markets is well ahead of itself it needs to flush out. >> i didn't say it was ahead of itself. i don't think it is. >> i think it is. >> we're going to leave it there, kenny, thanks for joining us, paul richards, our thanks to you as always as well. we have new developments today, out of the ukraine, here with the very latest is michelle caruso cabrera. >> new indications that ukraine's debt negotiations are going very poorly. there's a new statement out from the ukraine finance ministry, criticizing the country's creditors for the approach they've been taking to the negotiations saying they haven't been transparent, responsive and criticizing the country's creditors for choosing to communicate unconstructively through the media.
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we've been so focused on greece's negotiations, but this is another important negotiation going on in the world. ukraine is waiting for a massive international bailout of $40 billion. one of the conditions imposed by the imf is they've got to get the debt that they owe to private-sector creditors reduced in dramatic fashion. that negotiation is ongoing if they don't get it done, their whole bailout comes into question. on the other side of the table includes organizations like the russian government and also frank--templeton which owns $7 million in face value in ukraine. this statement shows that things are going poorly on this debt negotiation, back to you. >> that's yield right there, right? we're getting all in a little tizzy about 225. what is that, 21%? coming up, the huge deal of the day, verizon buys aol for $4.5 billion. we'll talk to an investor who called the aol acquisition a year ago. and then what josh brown
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says could be the hottest trend of the year. is that space whatever it is, poised for a breakout? >> it's capri pants for men, scott. the hottest. >> no one rocks 'em like you do. >> and the battle of the year -- the leader making a surprising trade today. we're digging into their portfolios and much more. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity
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verizon buying aol for about $4.5 billion. our next guest made the call at the beginning of the year, eric jackson is the founder of iron fire capital. eric, welcome back. >> so you said that you think aol is going to be bought, going 0 get acquired. that's what you said on your sleeper ideas list of january 5th of 2015. i know you thought it would be something else doing the buying, what do you think today? >> well verizon definitely has been a name that's been out there for several months. back in january tim armstrong had to deal with questions about whether there was an imminent deal in the offing with verizon. it's not a total surprise. but i think this deal is sort of
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a verdict on tim armstrong's tenure at the company. he comes out looking positive. he's not perfect. i'm sure if i was him and i could go back to 2009 i'm not sure i would take this job in the first place, once he got in there he sort of had to play the hand he was dealt. i think he's made smart m&a decisions all along the way. i'm a yahoo shareholder, i wish marissa mayer was half as smart with her m&as tim armstrong has been with with his shareholders. i think shareholders are happy with that. >> a potshot at marissa mayers, is it not? >> i think tim has been a great shareholder on behalf of aol. this is 4.4 billion-dollar company. yah yahoo, if you back out the cash as well as their asian assets is worth about $negative 5, negative $6 billion. think that speaks volumes about
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the leadership of both companies. >> eric, jim lebenthal, your last point begs the question, why wouldn't verizon have bought yahoo. i argue it's a better site and they get it for a negative value. what's your thought? >> i'd like that as a yahoo shareholder, too. but i think marissa mayer has been fearful of something like that happening. and so she's had basically two poison pills, wrapped around the core business. preventing anybody from coming in here and taking a run at the business. first it was the alibaba stake. now she's said that she's going to spin that off late they are year. and hopefully she will. but she kept hold of the yahoo japan stake that they still own. so if somebody wants to come along whether it's verizon or whoever and bayh hoo, they got to spend an extra $7 billion at least to buy that asset. it's not fair, she should stand on her own two feet. if somebody can do a better job than her in running it, and wants to take her out, they should be able to. >> you've been in yahoo, i guess
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since then the conversation seems to have tilted in that direction here. you've been a yahoo shlder for a long time, right? you've enjoyed the benefit of the pop in the stock since marissa mayer was named the ceo, correct? >> yeah. for sure. >> so the alibaba part is already baked in. right? that's why the stock has gone up to in the method that it has. why not just sell out of yahoo if you're so unhappy with the performance at this point of marissa mayer and get into something else? >> you know, whether you're talking about aol or yahoo, these are two hated stocks. nobody wanted to touch aol when this was $11 stock. nobody wanted to come on tv and talk about yahoo back in 2011 when it was kicking around in the low teens. in reality that's the perfect time you should be buying. even though yahoo has had a great run, this should be a stock that gets to $80 a share. i think it will eventually. i think there might be some
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things that has to happen for that to play out. today, here, owning yahoo reminds me of 2011. when everyone is just tired of it. it's had its run. i'm going to the exits -- no, now is the time to double down. >> in your sleeper ideas list was aol gets acquired. yahoo, to $80 a share. you've got some time left in 2015. eric jackson, iron fire. so guys, weigh in pete? >> it was interesting. aol on april 16th, somebody bought 4,000 of the 42 call. stock was trading under $42 a share. now today, these things are trading about $8.50. not such a bad trade there eric's point in terms of yahoo, the tradeable thing that still exists, i think your down side is so limited that this is something that you can hold on to. but of course you have the risk that still out there, in terms of anything negative in terms of alibaba. so that's, that's really your risk. but the rest of the company to his point, there's something there, right now it's a negative value i don't necessarily believe that but that's what's priced in right now.
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i think there's nothing but upside there. >> does this make aol a much stronger competitor to face -- >> yahoo? >> facebook, google. >> it seems the playing field has gotten much more threatening for yahoo. somebody coming in and buying them, that seems to be the play. it's going to be the play. and i just don't know if you can hang on with such a bad ceo. >> i can't believe zuckerberg let this jewel slip by. i can't even believe we're talking about this. it's literally a company -- >> he still has an aol email address. it's only $4.5 billion. that's your point. how small that thing is at this point. >> pete is a traditionalist. it's two million people that forget they have an account, paying dial-up fees, about 98% of the company's revenue. "huffington post" is okay. i guess as a media property. >> re/code says they might spin it off. >> that's great. i get why they're doing this the reality is, cash is free. they're throwing off a ton of cash. this is something to do in
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addition to just buy-backs. i think the real hero here is armstrong, he didn't have a lot of options, this was probably the best option for him. and he made the deal happen and he did this for shareholders. and that's really the take-away to make. what else were they going to do? >> all right. coming up, gap shares are falling. tesla's popping. the stories behind those moves and the trades next. plus we've got one of the execs from cnbc disrupter 50 list. jeff lawson is the head of twilio. and here's a look at how stocks are faring right now. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all?
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time for our trader blitz, four trades on four stocks making news. the first one is the gap beat comps down 4%. >> these april numbers were absolutely awful. when you look at some of the sales, it was not just gap, it was banana republic. the only saving grace is old navy. but this stock also got a downgrade as well. so everybody is piling on. i think i'm down at these
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levels, it's probably going to be the opportunity to start buying. >> jim, pall corp? >> it's now on auction, the price seems to be set by the market. i don't think it's go got to hold them. >> currency is hurting backspace, the stock is down about 15%, a very volatile name. they missed quarters, that's time to get in i got to take a closer look to see if now is time to get in this time. >> maryland's governor signing a bill, tesla can sell to maryland consumers. josh? >> these kinds of battles in new jersey, in the state of michigan, these are going to continue to happen. i think the important thing to know and what the market is now telling you, is that given the fact that the ftc, the federal authorities are on the side of tesla, ultimately they should prevail in most of the country and if there are a handful of states that want to go back to
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the 1800s, they're welcome to do that i don't think the car dealers will end up winning in the long run. what josh brown thinks what could be this year's hottest trade. beyond the capri pants he's been wearing around new york city this spring. and join the halftime team tonight we'll be at the dream hotel downtown in manhattan. at ph.d. at the dream hotel, bartending for a great cause ahead of the wall street decathlon. ♪ ♪ it took tim morehouse years to master the perfect lunge. but only one attempt to master depositing checks at chase atms. technology designed for you. so you can easily master the way you bank.
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hello, i'm sue herera with breaking news. sources telling dow jones industrial average that u.s. authorities are near the end of their at&t and directv review and they are unlikely to block that deal. sources telling dow jones, at&t stock is on the move and directv son the move as well. take a look at directv better than 1%. at&t is on the move, modest percentage move. better than .1%. but directv is on the move. authorities apparently near the end of the review process, and according to various sources, they are unlikely to block that deal. back to you. >> and yeah, sue, shares on the
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move by about 1%. meantime, goldman sachs is calling for a decline in crude oil prices today, jackie de angelis is at the nymex with more. >> goldman out with a note this morning, warning that the recent rally we've seen in oil prices may be premature. jim urio, why is the market sort of shrugging this off, buying oil today, crossing over the key technical level of $60 again? >> well today's movement kind of underscores exactly why goldman is incomplete and it's analysis. you have to look at what started this today. that was everybody started selling bunds and then they started buying the euro. as a reflectionive move. as the euro goes higher, crude goes higher. the move in the bund has dissipated a little bit and crude has continued on its path. that could be a market positioning thing. euro strength probably equals crude strength going forward. >> brian, let's talk about levels, if we close over 60
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today, what's the next stop? >> i think the next stop is 65 potentially. i don't think we ever get above there for some of the reasons that goldman does state. a lot of reports stating about supply and demand concerns that would put downward pressure. so i think the range really 55 on the down side, 65 on the upside. we're in the middle. if we break 60, think we push a little higher through. volatility is compressed in there. that's a good thing for oil and hedgers to start to buy oil for whatever they need to do, that will push it to 65. >> for more on the oil trade, check out the online show. we'll be talking about the stock market with cart eer worth talkg technicals, he's got an interesting stat. 1:00 p.m., futuresnow. this is a big note by jeff curry at goldman sachs. headline, a self-defeating rally, picking up where those guys were talking. the relief rally is overshot. we review the recent rally as premature. crude prices expensive relative to current and forecast fundamentals. agreed? disagreed? >> partially.
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partially. you've got conflicting trends here. on the one hand crude oil did shoot up higher than it should have. so goldman is right in that regard. but you are finally now seeing from the eia, some predictions that crude oil production and the shale plays in the u.s. are going to go down by 86,000 barrels a day starting in june. that's the first time you've actually seen that call of lowering production. and that, that change, that production is now not growing. is actually something that could support higher prices. so it's not an easy call to make. >> i think there's a conflict here. right, between the opec nations and nonopec oil producers. how much pain they can take. not only pain to the u.s. producers, it's pain for them as well. some are well capitalized, like saudi arabia, but most aren't, they need the cash. think that's going to play to curry's hand. if they come on and start producing more and more, that's going to drive oil down. it seems very quick for saudi arabia to say -- okay, we we've
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done what we wanted to do. >> josh you think commodities will be the one of the hottest trades of the year. >> think it's begun. the s&p is for all intents and purposes up a percent or two year to date. the dollar rally seems to have subsid subsided. but the one thing that's been happening over the last few weeks that's really different from what's been happening on the last few years is strength in commodities. not going to talk about the equities, i'm going to talk about the materials themselves. and then you can extrapolate from there. let's take a look from the top down. first thing is the dbc. the deutsche bank etf that tracks the commodities index this thing has been making a move. such that it really hasn't in a really long time, you look at some of the components of it. base metals, dbb, that's a smaller version, that's just the metals, a 12% return. just since the middle of march. and then you look at some of the components individually. copper just had its longest rally since 2005. eight straight days of 10% gain. silver sup on the year.
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something we haven't seen in quite a while. so that trade is already starting to work. scott, and brent obviously up 24% in the first half of the quarter. >> we think that fundamentals are in part what is driving rates higher. okay. the economy is improving. rates are going up for the right reason. isn't the dollar going to follow? isn't that going to hurt the commodity trade? >> maybe, maybe yes, maybe no, there's not a direct inverse correlation between shorter-term moves with some of these specific commodities and the dollar. i think the bigger picture is what is the area within commodities that have not rebounded yet. i look at agriculture, dba is the way you can trade again. not the companies, but the actual commodities tracking etf itself. it's just starting to lift off the lows. a lot of traders that i talked to are pointing at this mul multi-year base that's been forming, rsi is starting to build, which means momentum is showing up here, that's a trade that hasn't happened yet. but if it does catch up with
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crude, with base metals, precious metals, there's something there and it's an underowned area. nobody likes this area. >> it's one of those things, scott, you look at copper, it's still early and these things have made a move. you can see the stocks moving nicely. signs of life. the freeport mcin a thenamaras world, joe gloibl and caterpillar with an upgrade as well. you're starting to see the move in the various areas. >> the market is down and the commodities index is up 1%. >> we've seen that before, commodities have been the worst asset class for the last five, six years. so it's overdue, i don't know if it's a sustainable move with china going to consumption economy, versus -- >> morgan stanley had note about the fact we were at a level where the expectations are so low that names like u.s. steel have plenty of upside. coming up, a mid may look at the battle for top trader and a big move made by the leader. is your portfolio summer-ready?
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northrop grumman. return. there's two catalysts, one is earnings coming up next week. but the other one, which is the big one, is if and when
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regulators, department of justice, ftc and others approve the merger with office depot. if that happens, this stock is easily up 20%. if it doesn't happen, the stock is fairly priced right now. with some jobs growth, some further economic activity. particularly in europe. i see it increasing from here. >> okay, anybody have a comment on somebody has to have a comment about getting out of citi. >> i still like it i'm still there. haven't sold any, hold it for a long time. i think what jim is saying he is he doesn't disagree, he's taking a short-term gain and getting out. >> my performance has been abysmal for the entire year, down about 4%, 5%, it's because i haven't been attentive enough. i haven't been taking what i have in the gains and getting rid of those that are losers fast enough. >> and the weather, also. there's a lot of factors. i haven't been aggressive enough. >> why are you still saying in axp, your worst trade, it's down
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15. >> right when i was about to puke it out, we had mario gabelli on here and he soothed my worries about the stock and the fact that maybe the costco thing wasn't going to be any more than it already hasth and actually then i viewed it as more upside there. i basically -- quite honestly look the same way at u.p.s. right now, judge. it was that, there was the miserable quarter again for the holiday season. that kicked that stock in the teeth to the down side. but then the rest of the year last year, the next three quarters, they managed to do just fine and the stock rallied back off of that. >> i'm not pushing you, but -- i expect to see some trades pick up in the second half of the competition. >> i'm with you. >> i got gym over there with me in apple. >> got it. >> i'm with you. >> got it? >> kind of intimidating. >> i think he is stuck with axp for the same reason he's stuck with his aol email address. >> how many people are willing to get in pete's face? >> not me. >> you know -- >> i'm doing it from over here.
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>> what, what are we talking about? >> your portfolio. disney the best, starbucks the second best. you're doing all right. third place, up 5.5%. >> i bombed last year and i think because i was trying to be like too cute and get way outside of my zone of competence. this year, what i'm doing is a little bit more akin to what i do in real life. which is rules-based, a little bit more systematic. and a little bit less dependant on hopping from one headline to the next. and so what i'm essentially trying to do is own market leaders, trying to be disciplined on the sell side. for gains and losses and i've had bothth and i'm really trying to allow for the stocks that are already in a defined uptrend and under accumulation to take me where i need to go. it's not you know, knocking the cover off the ball. but i'm up about double the s&p and i guess i'm comfortable. it's a pretty low-mand innocence way to tackle this contest. >> we've got to go. what do you want to say quick?
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>> if there's one portfolio joe terranova's that looks totally given from everybody else, he's playing for an interest rate hike induced market meltdown with the volatility index in tbt. that's the one, if he gets that right he's going to shoot to the top of the leaderboard. >> what, do you owe him money? >> it's the truth. all of us are good stock-pickers. >> joe is not watching. >> you're double the s&p 500, that's a great performance. but joe, with that portfolio, if we have a 10% correction, he's going to go to the top. >> agreed. >> you can follow the action in one place, coming up, cnbc's disrupter 50 list, the private companies revolutionizing the business landscape. we chat with the ceo of twilio. if you've ever taken an uber, you've used their service. don't forget, join the halftime decathlon team tonight. we're going to be bartending at
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ph.d. at dream downtown in manhattan. all tips going to memorial sloan-kettering cancer center. ameriprise asked people a simple question: in retirement, will you have enough money to live life on your terms? i sure hope so. with healthcare costs, who knows. umm... everyone has retirement questions. so ameriprise created the exclusive confident retirement approach. now you and your ameripise advisor.... can get the real answers you need. start building your confident retirement today.
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witanywhere on any can manage your account anytime, just sign into my account to pay bills, manage service appointments and find answers to your questions. you can even check your connection status on your phone. now it's easier than ever to manage your account. get started at breaking news from san francisco fed president john williams who is arguing for rate hikes to be quote a bit earlier. he says earlier rate hikes allow for gradual increases, whereas letting indplags overshoot before the federal reserve takes action could force more dramatic rate hikes, he repeated comments
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to cnbc saying the economy is strengthening and inflation is headed back to 2%. scott, before you think that john williams is a hawk here, the argument he had a bit earlier. those arguing more for 2016 or for letting inflation rise 2% and go beyond it he's not being very hawkish here, really just saying an argument for doing this year. before inflation is right back at the fed's target. scott? >> tough to figure it out. you're hearing from fed folks with you or elsewhere. almost every day. certainly weekly. and given the movements we've seen globally for the bond market it becomes more important than ever to try to figure out what these men and women are saying. >> it's not hard to figure out. i have 100 bet with santelli that the fed raises rates this year. it's very clear what is going to happen. i have to give 100 to charity if i lose. that's why i'm of the bent that -- seriously, think that there's a lot of people on the fed, the center of the board, they want to raise this year.
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they're looking through the first quarter weakness, they see higher rates this year and they just need the data to catch up with them a little bit. >> the question is when this year, i guess. >> june, july, september, you know, july is on the table for guys like john williams, some more other folks are more in the september camp. if the data comes back quickly, you and i have talked about this. then maybe june or july is more likely. >> steve, thanks as always. moving on to new companies disrupting the old guard. twilio is the company you use, you've probably never heard of. it's a cloud-based messaging service. big companies like uber, home depot, nordstrom, all clients of it. and this company ranks 341st on cnbc disrupter list. jeff lawson is the founder and ceo and is in san francisco at our new home at one market. good to have you on. why don't you explain for people exactly what you do. we've teased for the last hour or so saying if you've used uber or air bnb or some of these other companies, you've used the
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service, even though you may never have heard of it. >> twilio makes powerful communications easy for software developers. our cloud platform allows software developers to build, scale and operate real-time communications inside of their software applications, so voice, messaging, and video is our newest product allow developers to incorporate communications into those apps, right? so you may not know about us, because you may not be a developer, but you've probably interacted with twilio. maybe even today. we've communicated with over 95% of american adults in the past year because you work with our customers, people like uber, people like air bnb and enterprises like nordstrom or home depot. >> when i'm sitting in an uber or i'm waiting for an uber and i get a text message from the driver, that's actually through your service? >> yeah. that's all powered by software and software makes that interaction intelligent. think about yeah, when you used to call say a call center and you would have to type in your
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16-digit account number and tell them your mom's dog's maiden name that was dumb communications what we're enabling is software developers to build smart, intent wanted t communications. when you call the driver, the driver knows who you are. you never have to wonder i have to type in my account number. we believe that contextualized communications. >> it's josh brown. congrats. you just joined the unicorn club last week. you went over and you guys are doing serious revenues and growing sales. i guess my question is we just saw uber as a good example and replacing google maps and build out their own version. is that a risk if a company said why are we cutting in a communications company when we can basically do that on our. we would be quicker to do that
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than a company like nord strop. you get what i'm asking. >> communications is a hard problem. building realtime media, lowilatency services is a very hard specialized skill set that we bring to our customers. the data doesn't show that customers want or have the ability to bring it in house when they focus on other areas of the business. >> your goal is to go public. when is that going to happen? >> our goal is to build a great company. the story is about -- >> i know, i know that. when you see a valuation on uber and $50 billion and all of these other companies, i mean you have to be licking your chops on what possibility is in the public market and what lies ahead. >> we're take the long view on this. communications is one of the planet's largest industries.
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the biggest point of disruption in the 150-year history. this is the migration from a 150-year history in hardware to a future in software. we take the long view on what this disruption is going to mean for the world of communications or building a platform and a company that is able to maximize the impact we can have on how this develops over the next 150 years. >> congratulations on your success. we will hear a lot more from you in the future. you are number 141 on the disruptor 50 list. it's good to talk to you. >> thank you very much. great to be here. >> the disruptor 50 series with the ceo of hacker rank. the job recruiting company for techies. number 30. coming up, just three hours left in the trading day. your game plan for the second half is up next.
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>> at the dream downtown between 6:00 and 9:00, some of our traders necessary trading. they will challenge some of the best on wall street. however tonight for a good cause all the tips are going to memorial cancer center. come down to ph.d. at the dream downtown. morgan brennan will be there. josh brown will be there. vaughn is going to be there? >> he might be there. >> he is confirmed that i will be there. >> josh and i got denied. >> they will be here all three hours? >> yeah. . >> i'm a big tequila guy. >> we have one for you right here. >> that's good stuff actually. >> i do not drink, but i will be
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serving. >> why is everyone like that. >> when is your probation over? >> i don't drink while i'm working. >> shirley temples and mock tails if you don't drink. i'll make one for you. >> he is cleaned up. >> it's a good cause. stiff drinks, super cause. >> are you doing the deckathalon? >> i have been training for it. i'm nervous. that's why we need to raise money for the bad boy. >> what's the training like? >> i have been going to boot camps and working with a personal trainer. i have been the most nervous about raping and now i'm the least nervous. i'm nervous about lench pressing.
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i believe it's 75 pounds. serious rugged athletes. >> people spot you. >> show up. have drinks. give me tips. >> see you tonight. >> let's check the markets here. i do think the smartest thing to focus on for the next however many days is the move in rates. i'm unconvinced that if rates continue to rise in the manner which they have, that stocks will go right along with it. you guys want to make a counter argument or try? >> i will try. i'm going to go back to what i said we are talking about from very low rates to very low rates. here's the point that i should have made earlier. >> doesn't matter. we have been addicted to the low rates. >> let me finish. you are absolutely finish. >> i will correct you when i have to. >> you are not that nice. >> listen, you are absolutely right. i'm paying you a compliment. hush. rising interest rates are a head wind for stocks.
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what has been lightly banded about here is the stock market is healthy. the u.s. economy is healthy right now. does it need to get healthier? yes, it does and i think it will. what we are talking about is easing off the growth rate a little bit. if the s&p might have been up 7%, it's only up 5% and that's okay. >> realistically the proof is in the pudding as to whether the economy is healthy. >> we have to see better pudding. >> is it training for the decath r lon. >> the only analog for this is the post world war ii period. the rates are down and throughout the 1950s and a lot of the 1960s, they rose and stow did stocks. if you go back to 1967, the data and rates and stocks climbeding to about 60% of the time. it's not unreasonable to think
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as steve mentioned over and over again. we get a good economy. it's okay to stop. >> the pushing of the apple cart being pushed over as ray was warned about. what happens when they push the apple cart over? is the whole thing a mess? >> we have a long way to go. let's not forget. you know when power lunch starts? it started about six seconds ago. >> maybe five minutes. >> and save a drink for us. this is the warm up for the big cocktail hour. i'm tyler matheson. remember you've got mail. you have got a deal. verizon snapping up aol which practically invented the internet for many americans in the 1990s. verizon shares lower. >> the new test is out showing


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