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tv   Fast Money Halftime Report  CNBC  June 21, 2017 12:00pm-1:01pm EDT

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travis 2.0 >> i like what travis wisher wrote. you kill someone far later than you should have and then praise them in silicon valley, which sort of sums it up >> julius cesar, echoes of that. >> busy session. we'll see if we can get more volatility in the afternoon. for now, let's get over to scott wapner and the half. >> and welcome to the "halftime report." i'm scott wapner our top trade this hour, biotrade breakout. the sector on pace this hour for the best week of the year. why that space is suddenly surging and the stocks you need to own right now with us for the hour today, steven weiss, josh brown, john na najarian let's begin with the ibb and xbi, the two exchange-traded funds that track biotechs making an impressive run. one that you areour own josh brw coming >> we have a massive breakout
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happening which is the equal-weighted biotech index as i'm speaking, this is occurring. we are now at the highest level since december 2015. that's more than a year and a half ago now take a look at the ibb this is your large cap biotech 300 has been resistance for a long time. looks like she wants to take that out here. if you can get above the 300 level, that's another massive breakout >> okay, josh, it is above that 300 level, as we have this conversation ibb is up 5% in a week xbi, 6.5 >> and what i want to know is not only did it take out 300, it's already 312, there's no serious resistance here until at least 320. there's nothing fundamental that's changed, but the xbi is up 8% over the last three days large cap biotechs going bananas. xlv, now at all-time highs, right this minute. and so i think, like, people talk about ital technicals what we're really talking about, not what are the earnings, what are the drugs coming out the market is processing that
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all the time what we're saying is, what are people literally doing with their dollars. what prices are they buying? where are they selling are buyers overwhelming sellers at certain levels? that's why i thinkhaving just some context, scott, around what other market participants are doing, and that is what charting, that is what technical. look, it's not a silver bullet it's not going to say, this is when it's going to end it's just giving you probability. so i think, like, seeing that breakout in realtime and people that are short reacting to it, even long fundamental, people that are very big on health care fundamentally, like steven weiss, just saying, all right, these are great companies, but at what point do they break out. >> doc, you came to my desk earlier and said, tons of activity in biotechs today that you were seeing. >> tons. and kudos to josh, because i was on the show last week when he said that, just as it was making that break out you see celgene today and s
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surepta. a lot of us are always so focused in ones a s asco, the an society of clinical oncology, the beginning of june every year, that we kind of forget about this one but this one's big because you don't have to be unuon of these u.s. or under fda approval to make it on this one. a lot of money is being placed this week on these names >> steve, fang has sucked a lot of air and attention out of the room but these stocks, as josh pointed out, and we're w witnessing today have done really, really well. the xbi is up 30%, year-to-date. >> it's really incredible. and it was a great call. >> does it still work? >> i bought it this morning. i bought the xbi this morning. moore's a placeholder while i do some work on the underlying fundamentals to buy individual companies. you know, last year i played
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surepta, it was so good for me, i just moved on to some other stuff. however, not only the investors in the technology group are going to come to this. because it's a much more dangerous group, potentially because you have so many binary events and -- >> right >> and some funds actually will not playboy tech at all. but what has changed fundamentally, definitely, technicals are leading in this case but scott gotly is a friend of biotech. we know that before he came in he used to be a contributor on cnbc, i believe, and it was always refreshing to hear him speak, but he's very pro the space. and he's going to cut through the red tape that it took for drugs to get approved. and we've already seen some hints of that. that's the fundamentals going on in addition to being in conference season with what john mentioned. so it all adds up. you don't want to get -- if you buy individual stocks, you want to own a basket of them. you don't want to own a single one. >> but you can't ignore that drug pricing, price controls, is not going to happen anytime
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soon in august of last year that the hillary tweet came out that really sent this thing into a tailspin the sector is prone to wild undervaluations and overvaluations this over -- not overvaluation, but this momentum swing can continue for a long time, because there's nothing on the trump agenda that's going to get done, that involves price controls it's just not on the -- >> he's selling de-regulation. >> right >> and anybody who can send a tweet about anything, that's a whole another story to take on congress, as our president is learning week by week. so the name i'm long here is amgen. it's one of the biggest names in the group. >> it's up 15% year-to-date. it's up 22% since the election >> yeah, but let me give you a little bit -- let's take a couple steps back. here's a name that's now trading at the same exact price as it was in december of 2014. a lot of that had to do with what jim's referencing tweets from hillary clinton, concerns about other pricing stories in the industry, if that's going to spill over now, you get to buy amgen at
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basically a price that it's been stalled at for three years it's got a 4.4% shareholder yield. we calculate that by adding up the dividend, which is 2.5% above a ten-year treasury, by the way. and a huge buyback, which, by the way, can be raised so amgen at 169. resistance has been 173 to 177 i don't know if it takes that level out. if it does, technically speaking, there are no sellers this thing can clear out into the 200. this is a sign, is it not, jimmy, that your sort of value expectations are going to have to wait even longer. that growth is the name of the day. >> secular growth. >> and people are willing to pay up for it. >> you know, that definitely was true in the first five months of the year >> you weren't expecting a change >> i don't think this is the data point that proves that. because, scott, a lot of these names, these biogens and alexions of the biotech sector, they've come down to very attractive valuations. so alexion is at the top of my
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bo biotech list >> the one that stephanie link said she bought yesterday. >> this was a stock that if you looked at it from a value situation perspective three, four years ago, you really wouldn't have bought it. now it's at a very attractive valuation. and that's happened with a lot of these names we could have a longer discussion about growth versus value. i don't think you want to do that right now all i'm saying is that the biotech resurgence doesn't so much take the wind out of the value thesis, as it says that these stocks came down so much -- >> well, there's been no wind in the value thesis that's the problem there's been a lot of hot air, i can tell you that. >> that's not true the last three weeks, value has definitely outperformed growth that's true. >> okay. three weeks doesn't make a trend on anything. >> you said that after three days now it's three weeks >> i'm using this as yet another example that, you know, people who say value -- value stocks are back and there's going to be this big rotation into value -- >> they never left >> i say, not so fast. >> they never left but you need patience. they're not going to -- value
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never goes away, but like every style of investing, it's got ebbs and flows in terms of outperformance or underperformance but value investing -- look, the elemental idea that you're going to buy $1 for 80 cents will never not be popular, it's just not always going to work it may work over very long stretches of time, but there are periods of time when the market just doesn't care. >> if i want to stay in this space, all right, where do i want to be amgen is one name that was just -- >> you get both with amgen you get a reasonable valuation with secular growth, untied to the growth in the economy. and there are plenty -- look, celgene is another name. >> celgene is a good name. biogen, you can be waiting for gilead to make an acquisition is like, it's taking forever. they should have done it let me make just a broader point, if i can. >> please. >> i just don't think, jimmy, and this is not criticizing you, that three years ago, without the market where it is and what we've seen in amazon and so many netflix, et cetera, that you would have ever, in your wildest
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dreams, considered alexion a value stock. >> no, three years, that was my point. >> three years ago >> zdespite the fact that stocks come down. >> nobody even now would consider it a value stock. >> exactly that there's been this creep -- >> i mean, you look at the valuation. >> what is the valuation >> it's in the high teens on an earnings multiple. you know, you've got to -- >> i'm looking -- that's on forward multiples, you're going out, or trailing multiples it's ridiculously expensive, right? >> it's not -- i wouldn't say it's ridiculously expensive. you've got to remember a couple of things. first off, the stock is down from 200 to 120. >> that means nothing in terms of valuation >> of course it means -- >> not if it came down for the reasons that value -- i'm talking generally. if a stock goes -- hold on >> you're missing the point. >> i'm not missing the point >> if we're at 200 and it's 40% lower, we can have a discussion -- >> my point is if a stock is going to earn $10 a share, it's 100, now it's earning $1 a share, it's $10.
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>> the valuation of alexion, specific to lexion, supports buying it here it didn't support buying it three years ago at 200 neither did earnings or the price support it >> my point is -- leave jimmy out of this -- my point is there's a lot of creep going on from value managers who never in their wildest dreams considered buying a google, considered buying an alexion or any of those who are now finding justification to do it to get some exposure to what's moving the market >> i think it's a great point. and i think stephanie link is a great example of that. the ultimate value investor, running a fund who says, you know what? i can't ignore amazon anymore. and she bought it before she never would have boughten that isn't that the purest sign of what he's saying >> please forgive me if i don't address stephanie when she's not here amazon i wouldn't touch with a ten-foot told because of valuation. alphabet, google, at roughly 20 times earnings, i'm saying that's at the outside level of a
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valuation, at which a value investor, for that growth in earnings, will purchase something. i don't see that as mission creep. i understand the point you're making what i'm saying is that alphabet or let's take apple as a similar example, you know, at roughly 14 times next year's earnings, and yes, i'm looking forward -- >> it's a market discount, though i'm talking about companies that are selling at a premium, in some cases a significant premium to the market that -- >> let's just make sure we don't make this mistake of -- and you know this. of making -- of thinking that value means you're buying single-digit commodity earnings multiples. because that's really -- >> it's a terrible business. >> so here's something i think you both can agree to. if it were as simple as saying, this is a low p/e, anyone with a calculator would be warren buffett. there are other aspects to all of these so maybe your starting point is, i want to see the cheapest, for example, biotech >> or look at peg ratios >> fine, but second level thinking is, well, why is this so much cheaper. and oftentimes, you will find a great amount of justification. >> but i did cover, when i was
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in sales, i did cover some value managers that would not buy anything that was not at a 25% discount to the market of course they looked at other things, but that is -- >> this is a perfect opportunity to bring in our next guest our first one of the day i hope you've heard -- it's good to see you again, by the way >> thank you >> i'm not sure if you heard a lot of this conversation, because you were standing in the wings waiting to come on set >> i did >> so where are we, right? this is the classic growth versus value debate that's taking place >> so we are favoring growth over value there are a number of different reasons for this one, if you look at the macroeconomic backdrop, you do see some form of deceleration taking place, generally, across growth, across inflation, in an environment where the fed continues to gradually tighten the screw, right growth is becoming more scars and historically, always, investors in those kind of
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environments would have been willing to pay a premium for growth and secular growth-type exposure that doesn't mean just internet. a lot of that is lying in areas like health care, which we like health care more as a sector at these valuations than, for instance, let's say, tech. certain parts of tech likes software more broadly. semiconductors, also, we think, are potentially interesting. but i think growth from that angle likely continues to benefit. the other thing i'll mention is continuous flow of money from active that also you could argue, this potentially benefits these long-term momentum secular growth plays and this penalizes the value play something to keep in mind. >> i don't know if -- so i hear that every day i actually dislike that argument because you look at, for example, inflows to etfs, a great part of them are going into smart beta, which de facto is a value trade you know, they're trying to get the value premium, the small cap premium, and that's not showing up in performance, right but like, i don't -- so i don't know that you can necessarily
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say, all indexing or all etf is de facto a momentum trade, and all that money is accruing, because keep in mind, apple shows up in value funds. it shows up in growth funds too. like the classifications are all off the wall, too. so i don't know if that's so one for one. >> apple is a little bit of a stand-alone case as far as valuation. >> but it's the biggest stock on earth. >> sure, sure. but in terms of etf comments, my team who recently published our etf handbook >> you're doing smart beta up a storm. >> smart beta etfs is roughly a little bit less than half a trillion so still most of the influence into etf, i would say, are in the passive, plain vanilla form, cap weighted >> vanguard -- >> yes smart beta is growing, but i think on a relative basis, it's more the traditional versus the smart beta etf >> so this little comeback, restart, resurgence, whatever sort of you want to -- whatever descriptor you want to use for
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what some of the value stocks have done, as jim was pointing out in the last couple of weeks, you don't buy it you just think it's a short-lived phenomenon >> we think it's more short lived. i think the big sell-off that growth faced, almost the five-sigma event two fridays, we saw that almost entirely as mechanical, driven by certain systemic flows, not necessarily driven by certain new fundamental developments >> because it took a couple of days to reverse itself people were ready to jump ship on the fangs and these high-growth tech stocks. and then lo and behold, they came back. now no one remembers they went down >> although i'm not sure, i think we did call it on that tuesday, it felt like the bottom was in i want to point out something on this note, that you pointed out, i think it was last week that 10% of stock picking these days is actually fundamental stock picking. let's think about that and josh, you've, all over this. the passive indices are the roughly the other 90%. i may not have it perfectly
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right. when i hear that and hear, due brofco, it's not just show, many other people are saying, now's the time for growth. i'm a seasoned veteran all of us are. when you hear everybody getting on one side of the trade, that usually says, at least look at -- >> people didn't wake up today and say fwho, now is the time to get -- >> why do you think -- >> that trend has been your friend for years >> why do you think -- but why do you think that 90% of the market that's now being traded systemically is necessarily momentum >> well, i wasn't saying value -- >> value is huge for -- >> i was not defining the -- >> but you're you're standing up now and saying, oh, growth is too crowded? you're saying that now i am saying that, scott. and look, look, we've seen this before and frankly, you and i have talked about this on the show. that growth -- look, right now those fang stocks do have momentum to them, minus the week and a half ago, when the golden note came out and they withered a little bit there is momentum. that will carry on we've all seen this before
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it will carry on until it breaks and when it breaks, people will say, wait a second amazon just went from a multiple of 100 to a multiple of 90 and nothing changed. >> the fang stocks aren't even in the top 30 performers in the s&p this year. visa, mastercard -- >> that's not taking away from my point if we're sitting here saying that for the rest of time or even for the rest of this year, that the growth names, whether they're fang or other growth names are the only place to be -- >> that's not the case all i'm saying is, i'm hearing a lot of people say, right now, that the high, the large-cap growth names are where you're supposed to be it's working right now what i'm saying to you is there's a margin of safety and that's the key word that value investors always talk about. there's a margin of safety thinking about earnings multiples, dividends, and cash balances and that's where i want to be. >> our general view is, when i think about style positioning, portfolio position, generally, i do think growth has the more attractive risk/reward, considering all these different
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factors. but that's not to say that certain other areas of the market, like financials, where you're seeing certain parts of deregulation kick in gradually, i think it's attractive. i think energy from a pure tactical point of play many saying, perhaps, somewhat overdone so, yeah, i don't think it's just growth, but i think, generally, if you think about a portfolio, the risk/reward continues to be attractive versus value or versus a fl full-blown, high-quality trade >> thus far, the value trade, the things that work, the energies, the industrials, the financials earlier >> industrials are at all-time highs. the value trade is energy. do you really want it? you can have it. no one else wants it >> but here's what it is like john, we can go anywhere, right? we're not -- we're not measured against a benlg mach marc. we don't have to pay attention to a benchmark go where the opportunities are i define myself as much more of a value player than a momentum player but, i just like the fundamentals and i look at bottoms up and i will look at technicals. >> so look at -- right, so look
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at the value stocks right now. and, obviously, the energy stocks versus the s&p. >> do you put financials in that group? >> financials are cheap relative to their own industry and relative to the overall market >> certain parts of what is perceived to be the value trade, that has been -- >> value on last year's -- >> 2017 -- >> but value on last area's fundamentals, with deteriorating fundamentals in front of them, which is what we're talking about with oil, for example, or base metal related companies, like, we could say, oh, this is cheap on trailing metrics. you don't know what the forward metrics are and they're deteriorating. target is ten times earnings >> value is really germane to the particular sector you're looking at so i don't ever think to have the word value when i'm looking at biotech, right? sure, it's in there, somewhat, you don't want to be ridiculous. but that's more about paying for momentum than paying for fundamentals
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banks, you have to look at it as a value trade. it's not a momentum trade. when it's momentum, you want to get out. >> but there's dividend momentum in financials. >> that's stock price movement >> stocks more, right. cisco systems, 15 years ago, 17 years ago, was a growth, growth, growth name. now it's a value name. things change. >> that's what stop losses are for. >> thanks for being here good to have you all right, twitter, did you notice it today? it's soaring, it's on pace for its best day since late april. there was a positive note from a boutique firm out today, maybe some technicals, josh, playing a role there as well you still in it? >> i don't get excited about these things anymore, because it tends to have a hot couple of days and it fades. i would say on twitter, wake me up over 20, and i start getting more interested. and we're just not there yet >> anybody else? >> yeah, everybody who's short twitter is -- >> quite a move for a single day on seemingly no news >> this thing was 14 bucks >> it's got two cams
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everybody was short or nervous there will be some events that they have to hurry up and cover. and maybe this analyst knows something. the other side that are familiar with the name say, this could be it this is when it's going to double or triple and then, again, that's what's at play. i think this is a dangerous one. >> this is cleveland research. they had a note out today, they got constructive feedback from advertisers on their strategy execution. >> i hope they're right, but i would just point out, i feel like we hear that once every six months, it and doesn't necessarily translate into further share gains each tyke we hear it. >>.c >> dom chu has a news alert. >> if you like casamigos, it has been sold. the up-front consideration will be $700 million with an additional $300 million to be paid out over the next ten years, provided certain escalator clauss and sales clauss are met
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diageo says this will be neutral for the time being, but could be accretive over the next few years. interestingly enough, they had 120,000 cases worth of tequila in 2016. it's growing to about 170,000 cases by the end of this year. in a statement from george clooney's camp issued via a spokesperson, they said, if you asked us four years ago if we had a $1 billion company, i don't think we would have said yet. this reflects diageo's belief in our company and our belief in diageo but we're not going anywhere, we'll still be very much casamigos, starting with a shot or two tonight >> you know, doc and i drink casamigos all the time the repesado, that's the good stuff. >> it's like 50 bucks a bottle >> it's the real stuff you're paying for quality. >> it's not fair, though, right? come on. >> look --
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>> randyg gerber. >> he just had twins he needs some cash >> they were brilliant and you see more and more of this, judge, where people in media, whether it's stars like jay-z or people in movies and so forth like george clooney, are using that fame to put it behind something new. vitamin water or whether it's dish mean, all of that works, right? >> look at you with the big private jets you're going to be the next billion dollar sale. don't forget us. >> i won't >> all right, next up, the amazon effect and the tale of two stocks one is being helped by the online giant the other getting killed and we are just getting warmed up >> announcer: next up, the big cut on intel is our call of the day. if that stock is losing momentum, which chip stock will take it? plus, risk and reward. the huge change for global stocks and how you should play it the halftime report with scott
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wapner and the temporaraders ar in two minutes will you be ready when the moment turns romantic? cialis for daily use treats ed and the urinary symptoms of bph. tell your doctor about your medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas® for pulmonary hypertension, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have a sudden decrease or loss of hearing or vision, or an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis. and get medical help right away. welcome to holiday inn! ♪ ♪ whether for big meetings or little getaways, there are always smiles ahead at holiday inn. usaa gives me the and the security just like the marines did. the process through usaa is so effortless, that you feel like you're a part of the family.
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welcome back time to talk about the amazon fallout. it's interesting goldman sachs out with a note today saying that nike could sell directly to consumers through amazon as you might expect, footlocker, dick's sporting goods are the ones taking it on the chin today. this is interesting news
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what do you guys think of this >> smart >> please, go ahead. >> look at all of these names. not all of these names are directly down as a result of this specifically. i don't think, necessarily, sears and jcpenney fall into that group, but footlocker, finish line, that's the message, right? >> nike's got a great site, anyway i buy my stuff off their site. so i don't know if this will be in the more -- any different it will accelerate the trend that we're seeing. they do a great job. unbelievable return policy you can wear their shoes for six months and return them >> i sure love free two-day shipping if not same-day or next day. >> but i think amazon's got to be careful in terms of how many of these alliances they do >> why >> well, they'll disenfranchise the others i don't think they'll get near that in a while. but the pr is very -- >> go on amazon and look at nike's product it looks like garbage. you've got unauthorized re-sellers on there. you've got people that are buying this from other
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wholesalers, steal product, the presentation is dismal then compare that with under armour, who does have a wholesale partnership with amazon, and it looks mint. like, the pictures of the athletes, the product, the newest stuff is always on top of the page nike would be foolish to ignore this channel it's not going to move the needle on pnl according to the golden analyst to a great degree, maybe 100 basis points worth of their total global sales, but it's going to be important for that millennial customer to have a -- and that's who's on amazon, by the way, buying fashion apparel so i think it's a home run if they do it and i think the damage is minimized by the fact that there basically are very few retailers at this point that matter offline. i mean, they're all consolidating. >> and it's bad for their brand, exactly what josh described. how they display it right now, judge, that's terrible i mean wub, you wouldn't want a movie to be sold this way because you want to excite people about it. they don't get excited when they
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see this stuff on the amazon page as it is right now. >> okay. we saw jcpenney -- >> you don't want to own dick's by the way, after this, if they do this. >> you don't want to own it anyway >> we saw jcpenney on the screen a little while ago that stock is lower. now to the portion of our program where jim leventhal tells us all the reasons to own jcpenney >> i'm just with you listen, i'll answer your question, because you've asked it, there's the micropicture and the bigger picture sector here we've all just heard why nobody's ever going to shop in a store again. >> no one said that. >> all right, you know, that was an implication nobody said it however, i think that the idea that brick and mortar retail is going to go away entirely is just simply false. there are still people and plenty of them, who like to shop in stores. does it have to consolidate? it has to consolidate, absolutely sears has to go. >> fine, let's say you're right. there's no other play, but jcpenney >> no, but here's the thing about -- >> does the stock have to go
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to -- when are you going to sell it not heare, i'll tell you that much >> i'll get my point in here the last three months, all right? last week, marve ellison spoke at a conference. he said, may, april, march have all been positive same-store sales. right now the street is looking for down same-store sales for the year that's not what's tracking >> why is the stock down 13% this week? >> because the stock market doesn't always get it right. nobody with dispute that if we're thinking the stharock market is efficient, i don't think anybody should be here >> so rather being the hero and continually stepping up as it's coming down, what kind wait to see if the trends are better >> i think that's fine tha a good point a same-store sales number, you don't know what the profitability is this is under so much pressure, continually. why not wait >> this stock has to be a buy -- this stock has to be a buy -- >> i got in early. >> it's just like -- it's so unownable that it has -- it almost has to be a buy for some reason that none of us can think
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of >> i can paint the fundamental picture here it's not just same-stoer salre s they're increasing sales per square foot, like rolling out more of the sephora stores i'm not making a call on the whole sector here. no way >> we're not talking about the whole sector i have a problem, frankly, with continuing to tell people to buy this stock, that it's this great stock, undiscovered by the market and when it goes down -- >> he's admitting it's distressed >> scott, this is the same conversation that you and i had five weeks ago when earnings came out and the stock is basically where it was after earnings, okay it is bottoming right here i just admitted it, i was early, okay that was a mistake, okay well, i do it's an opinion. but, look, i'm in the stock, i think you can own it here. i think you can buy it here. if you look at the fundamentals,
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improving same-store sales, debt levels going down, increasing initiatives to increase sales. >> if you end up being right, by the way, we will all -- these clips will be played forever, every time we disagree with you, because you've been so adamant but i think i'm with steve let's say you think this is a great setup because it's so hated and so cheap, probably not. but let's say you're right to steve's point, let's look for some sign in the market that it's not going to zero, maybe, before getting involved. like a higher low would be constructible. >> i would rather buy this at 5 than own it down to zero >> you get the last word >> take a look at the prices of the debt this is not a company going into bankruptcy >> or the debt has value in bankruptcy, that the equity would not. >> it would be selling at 70 cents on the dollar. >> okay. contessa brewer now has the
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latest headlines >> the stabbing of a police officer at the flint airport in michigan appears to be terrorism related, possibly. sources tell nbc news that the fbi is investigating the assailant allegedly shouted allah akbar before the stabbing. and of course, the airport was evacuated. australia has suspended its air strikes against isis targets in syria it's a precaution after a u.s. fighter jet shot down a syrian war plane earlier this week. the defense minister is making the announcement in canberra belgium police raided a house following a foiled attack at the city's central station. forensic police dressed in protective suits and were carrying out boxes and bags full of evidence, right from that property by the way, mullen beolenbeek, e neighborhood theparisian attackers were from. staples is recalling chairs was the legs can break they were sold at staples from
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october 2014 through april of this year. i guess if the legs broke, you'd know it. cnbc news update at this hour. scott, i'll send it back to you. >> thank you so much up next, unusual activity today in the gaming space. john najarian is using the options market to place his bet. plus, alibaba surging 80% in a year once stock watcher says it is a game of wall street chicken. herb greenberg is back a rht>>llig >> he looks rested >> there he is >> hey, herb the power of 100 of the world's top companies. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.
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all right. the doc is in with our unusual options activity what have you got? >> scientific games today, sgms, this one, lottery as well as some other gaming plays, take a look at it up 42 cents. basically $26.95 they come scrambling in today to buy upside calls, further upside as it hits new 52-week high. october 28 call volume, take a look at that that's a huge spike in volume. somebody's wanting to bet that between now and october, the stock makes another nice move. like it? i'm in this one, i'll probably be in about ten days >> it's making a move right now.
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>> the stock's up 100% these days the five -- up for ten days. >> that's two hands, steve five >> all right, doc. come on back brian sullivan has a look now what's coming up on "power." >> hey, scott, thanksvery much coming up at the top of the hour, uber's rocky road. founder travis kalanick stepping aside as ceo but what does it mean for the company's valuation and its path to an ipo. what does it mean for th overall market we'll dive in. and breaking at the top of the hour, the latest quality auto ratings for j.d. power. we have them and you may be surprised to see who is at the top. and a succession shake up in saudi arabia surprising the political world. we dig into what that means for the oil market, comi up ngon "power lunch." but more "halftime" right after this this is where i trade andrs. manage my portfolio. since i added futures,
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speaking of big movers, alibaba has rallied 80% in the last year. however, not everyone is buying that story herb greenberg is the managing member of pacific square
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research, joins us from san francisco. herb, you haven't been a believer of this story from the get-go, and i mean, i guess a 76% move higher in a year is not going to convince you. >> well, scott, it's not that we're not a believer in what the business of alibaba is there's a real busy there. we've never said there isn't but since june of 2015 when this stock was 90, the stock going all the way to 60, we've been raising the risks that we think the underlying the numbers cannot be believed we're focused more on the underlying numbers that said, at this stage, if you look at any company and say there's an account historic, just an accounting story, that's dangerous. it's dangerous short, dangerous long in this case, we continue to believe as the stock goes straight up, this is a dangerous long and a dangerous short we continue to monitor it. we look at the numbers from last quarter. we continue to see the falling margins, falling cash floe margins. we continue to see the lack of transparency despite the companies saying they are so transparent, they're
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not transparent. we continue to be concerned that they're buying revenue from the companies they're investing in at a greater level than they claim. but because of the lack of transparency, you can't tell so we sit here, we raise the issue of risks, we watch the stock, we know there's an s.e.c. investigation that as the company confirmed the last week is still ongoing, and we're also cognizant of the fact that the council, the lawyer who took them public is now the chairman of the s.e.c so you put all that together -- >> herb, you're just mad that joe psi called you out at delivering alpha, our marquise event, and you can't get over it >> joe psi -- i'm going to -- this is the kind of stuff i call an intangible. and when you see it, you say to yourself, come on, now so what joe tsai, either david faber or jim cramer had asked joe, pacific research thinks you're buying your revenues. and his answer was, they haven't
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read their annual filings or disclosures. the minute i saw that, i just howled and said, not only have we read your annual filings, not only have we read your disclosures, we know what you haven't disclosed, but you should have disclosed! and by the way, and i've said it on cnbc and i'll see it again, joe tsai, apparently lives about 15 minutes away from my. my partner, don vickery, one of the greatest forensic accountants in the world, would love to give anything to sit down with him and meet face to face we've said it a bunch of times, never had a response offer is still out there >> in other words, herb, the answer to my question is, you're right! you're right, scott, i am po'd who was it, was it jim earlier who said, you can't always believe the stocks one other thing people forget about alibaba, they're exempt from regulation fd they don't have to abide by it neither do most other foreign companies. there's so much here but am i p.o.'d! i'm -- i understand the markets, i understand algorithms, i
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understand people getting excited about 40% topline growth on such a big number i get it i get why stocks move, but i do think people have to understand, there is an underlying risk. and if the s.e.c. were ever to move and cause the kind of restatement that would show this company was nowhere near as profitable as they claim when they went public in the united states, that would be a big deal don't ever forget what happened to the stock >> you can't keep pulling the fire alarm and if there are never any flames, then when do you just mui on >> when this company -- you know what, we actually told our subscribers a few weeks ago, when the company gives you the all-clear and they say, hey, we've been cleared by the s.e.c., we'll be moving on, there are plenty of other fish to fry we've been frying a bunch of them, but this is -- >> this is josh. >> hey, josh >> good to see you i guess i would be curious, like, what is so -- all right, so jay clayton was the company's lawyer when they went public they raised $25 billion. this is big business it's important for china >> big >> there's a lot of face-saving
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stuff going on, anytime you're talking about chinese companies. it's a huge stock for hedge funds to trade in and out of, for quote/unquote china exposure, because this is one of the leading companies you can buy on the nyse. there's a lot of reasons for it to have gone up. okay, fine but what if, for example, they come out and say, oh, it turn s out there were some things about the accounting that we have to change and here we're going to have to pay a $50 million fine and nobody cares and you end up being right and that turns out to be an upside catalyst think about how many big, bad negatives have hung over other companies and then -- herbal life like with like, the shorts were right. no one cares we paid a fine and the stock goes up. >> i can only think of one company that actually was in this kind of a space that actually mattered and where the stock actually got crushed and that was lumber liquidators. so many others, where their s.e.c. investigations, they just come and they go, which is unfortunate. but you know what? it doesn't mean that this won't
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be the one that may actually matter but, look, hats off to them for what they're doing we don't believe the numbers, what we're seeing and the way we're analyzing them the market will do what the market's going to do i think we have to constantly remind people of the other side of the trade, as jim cramer and i would talk about here. because there is another side to the trade. >> give me a quick comment on msci adding china to the emerging markets index you've looked at china as close as anybody has is this good no good, risk worth reward >> live by the chinese numbers, die by the chinese numbers either you believe them or you don't. and if they're great and it all goes -- look, china's a real marketplace. it's a big market place. so let's just -- i -- beyond that, there's little i can say or will say. >> you better not apply for a visa anytime soon. herb, we miss you. good to see you again. >> missed you, guys. >> herb greenberg out in san diego. >> this is a politically connected company, but that
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doesn't mean it will be forever. enron -- >> disappeared >> we had politically connected companies here that blew up, too. you'll never know. llg lol your attention to oil fainbew 43 a barrel. a bunch of energy stocks getting downgraded today we'll run through the list next on the half. you always pay your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness,
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. welcome back to the halftime report call it a crude reversal today oil initially rising on this morning's reports showing a drop in inventories but now we're down more than 2%, 4248 near nine-month lows. griz, you were the one that said it is a bullish report but gains capped why did it turn lower? >> at the same time that report came out, libya came out with a program of how they will produce oil going into 2018. and it turns out they're going to try to produce a record number amount but if we couldn't hold on to today's gains, if you add draw on crude oil, dru on
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gasoline, it isn't looking good right now. 4225 is the next line i have of support. if we get below that we will hit $41 then take a shot at 40 bucks but i do think we will get one more pop before the july fourth holiday. >> brian, do you agree, or would you be a buyer here and say it's time o get in? >> we've had a bit of a selloff so maybe it is time for profits or the other side of the trade but if griz is on that side of the field, remember we saw vix below 2018 and that might spill into credit issues with shell producers as we go lower that benefits the rest of the market you have to be concerned how this affects the stock market going forward and maybe there isn't the demand we saw before and the overall global growth picture. is just to note, down 14% year to date so energy hurting here
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for more features, count our live show at 1:00 p.m. eastern time scott, back to you >> thanks so much. there's so many energy down grades today makes your head spin chevron cut. royal dutch shell cut there as well bp, down grades. barclay's, marathon, morgan stanley, neighbors >> you know what makes me happy, judge? that i finally just washed my hands of all of this crap. these have been widow makers every single time i tried to get in here. even with limited trade and options which i preach about these are widow makers meaning the money vaporizes. if we get down to 40, i might give it another shot but i have no interest. >> for the last 2 1/2 years, the correlation has been very perfect. lagged the rib count to the price of oil okay what you should be waiting for right now is to wait to see the recount in the u.s. turnover now the response time is quicker
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than it ever was before. these shale oil producers can start and stop on a dime but about four to six weeks from now, you see them roll over and that's the time you start to get into -- >> tell me not to bite stocks. >> no, of course not >> you know what i'm thinking, right? >> i know exactly what you're thinking all right quick break. final trade is next. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade.
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so, how are things carthey-ise? you're fired! [ screaming ] it's time to get back on top. we're going back to villainy. ♪ so bad ♪ so good that i'm so bad... [ maniacal laugh ] ♪ don't try to fight the feeling ♪ ♪ of somethin' that's so organic. ♪ [ pop ] despicable me 3. rated pg.
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that they are eating their lunch and then some. >> that's a peace offering to jimmy. >> amd is just killing it. brought weekly called, beginning of the week, just boom >> give me a name. >> shouts of prod igy rest in peace. >> "power lunch" starts now. be carusso cabrera uper's ceo and founder is out. if uber was publicly traded would the stock be higher or lower today? president trump's buy america policy getting support from an unlikely place, china. alibaba on why made in america could be the gateway to china. and latest auto quality ranking hitting wires right now. winners, losers and more fasten your seatbelts because a refed up edition of "power lunch" starts right now. ♪


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