tv Fast Money Halftime Report CNBC June 27, 2017 12:00pm-1:01pm EDT
time and cost a lot of money, but interest that -- >> but if you've ever sat in traffic going to o'hare from downtown chicago, you will realize that this is probably very necessary it can take hours. >> there is nothing fast about getting into or out of o'hare. that's one of the things i've learned as a business traveler >> sad, but true >> let's get over to the half back at hq and welcome to the "halftime report." i'm scott wapner our top trade this hour, stocks surge. the first half of 2017, the bes in four years. now wall street tells us exclusively whether the rally can continue joining us, pete najarian, stephanie link, we do begin with the inaugural halftime survey. we asked 23 of the street's top strategists where they think stocks will go in the second half of the year and how your money will work best in the months ahead let's get right into it. doc, going to you first. >> okay. >> we asked, what do you think
the s&p 500 will do in the next six months of these 23 folks 63% say it jumps more than 5%. 21% say moves up, but less than 5% -- so 85% say stocks are going higher >> yeah. and you know how i love to play a contrarian, judge, but unfortunately, i'm not a contrarian with this one i agree with it. i think the second half of the year, we pick up momentum again, that we had in the first quarter, that we basically traded sideways, except for tech and a couple of the health care names, in the second quarter, but i think second half, a lot stronger than we've just experienced. >> all right pete, so you've got the dow up 8.5% s&p's up 9 nasdaq's up 16 history guests that doc's right. if you look since 1988, when you've had first-half gains of at least 6%, i'm going to read you some of these numbers. 2013, we were up 12.5% first half we finished 29%. 2014, we were up 6, we finished
up 11. 2012, we were up 8, we finished 13 2003, we were up 10, finished 26 and i can go on and on and on. the gains are pretty magnificent. >> absolutely. >> across the board. >> it does make you nervous with 85% saying, hey,wear at least going to be hear or higher that is certainly something where you just say, you know, you always want to be a contrarian now, the thing i wouldsay is, energy has not been a part of this at all. if at any moment we get some sort of participation there, and the financials, but i think the financials have a much better shot >> we're going to prabreak it d by sectors in a moment but just the baseline case for stocks over the second half. better than -- what do they do in the next six months >> i think they go higher. i think the way the economic situation looks right now and potential of anything that trump can go through, because i don't think that's priced in any longer, so, if it's tax reform, if it's whatever if something can get through or get close or get people excited
again, that's what's going to lift these marks >> stephanie link? >> so i think gri with tagree we guys, is that this is not -- i want to be contrarian and that 85% is a little scary, but i think it implies that they believe the economy is going to continue to improve and that most importantly, earnings are going to continue to be solid. maybe not 15%, which is what we saw first quarter. maybe it's 10% that's actually the consensus. 10% might be just enough what i do think is key, and i don't want to go into the sectors just yet, as you mentioned. >> we'll do that in a second >> but i think we need to have energy stabilized. you need to see a little bit of inflation to get that deflation scare out of the way and if you get both of those, i think interest rates can back up and that's going to provide confidence and provide confident in the inflation trade >> people try to make the case that tech's trading like it's 1999 1999, s&p 500 was up almost 12% in the first half of the year, finished up almost 20. '98, up 17, finished up 26
1997, up nearly 20, finished up 31 are we going to have that kind of second half, where a 9% gain for the s&p looks small? >> i don't think it's going to be that big, but i do think we're going to be up for the rest of the year and with all of us here always kind of playing the value play, you have to look for the opportunity. but this is an earnings momentum story for the next second half and if we can get earnings to keep on going like we did for the first half, i can tell you, we'll be sitting here in january, nobody thought earnings were going to be where they are today. so with this base case and steady growth and global growth, it's not just in the u.s. weber getting global growth, getting european growth. that is driving the market and we know the u.s. market is not just local, it is a global market >> i mean, you can say what you want about surveys and about numbers and about history, every single time that stocks, the s&p, has risen 6% in the first half of the year, it's extended the gain in the second half. it has never had a down run after going up 6%. >> i think the most interesting thing, though, is when you came
tosy ro sirott was, you talked 1999 i was on the the trading floor in 1999. the difference is when we look at the earnings now versus the earnings then and you look at it on a price to earnings, it's not even close so the irrational side of that part of the ledger is not part of that -- >> and it was not just earnings, it was revenue growth. revenues grew 8% in the first quarter. that was a surprise, a very positive surprise. if that can continue, then the momentum can continue. >> go back to 1999, and everybody wanted to be in stocks this is the most unloved rally, we've been talking about this for the last 24 months you talk to people who are missing out on the market, thinking the market is going to come down. we talk about the vix all time talk about, where's the volatility this is not like we have to jump into this party because we're missing it we talk about, where do we want to be? >> we asked these 23 strategists, of the 11 s&p sectors, which is your top pick
for the second half of 2017? 60% said the financials. 50% said tech. 40% energy 40, health care. industrials down the run, as well but financials lead the way, pete >> absolutely. i'm one of those, i think this is a second half story for the financials i think we finally start to see them lift. why? because of the underperformance. after trump's election, we saw the financials scream to the upside since that time, pretty much have been sort of dead money. just sort of sitting there we've seen paper time and time again, scott, in the xlf, in bank of america, in citi, in goldman sachs, and morgan stanley. they've moved a little here and there, but generally they've pulled back and we've been in a fairly tight range ever since. i think technology and financials do outperform i think the energy call is the folks out there that are going to the contrarian side, trying to bottom pick and i think they might find themselves with exactly what they're going to get, oftentimes, which isn't what they think when they're trying to bottom -- >> one firm is trying to pick a bottom in energy we're going to hit that later, as well, and debate that but what about these sectors
financials going to lead >> i think financials benefit the most from deregulation and that's the easiest thing in the trump agenda to get done, which he's been getting done, right? and then you have capital return we got the dfast results last week stocks sold off on the news. wednesday night, thursday, trading, you're going to see these stocks, i think, act very well that's when c karr comes back and we'll learn about dividends and buybacks and that kind of thing and they'll be very good across the board and if you get tax on top of that, that's icing on the cake >> it's very clear to me people expect rates to go up. if you have financials as number one and look at biggest laggards according to our survey, utilities and staples are going to be the laggards there's not going to be as much defensive, not going to be as much chase for yield, because rates are going to go up the economy is going to do better make sense >> it does the financials do well if we get capital market activity.
that's what gdp growth will do you add that to interest rate growth and capital markets will also help the financials do that so what people will do, the barbell strategy that's being used with utilities and staples as your defensive high-yield play will rotate into the growth names and into financials, because the average financial has a much better dividend than the s&p. >> rick santelli would tell you, judge, that the fed isn't the only one out there trying to move interest rates. that the pits move interest rates. where that money, where the trillions of dollars are traded back and forth, and the pits have said that they don't think the likelihood is that we're going to see rates moving up in the short-term now, for the longer term, i do think we're going to see that, because the fed has now hit us three times with rate hikes. each time, rates have gone down. so i think this is going to be a turn here, where we start seeing the recovery in europe impacting optimism about growth in europe, which then people start selling those bonds that have just
skyrocketed yet again. and i think that is what's partially behind this big xlf trade today. somebody bought a ton of calls >> expectations are very low on rates, in general. draghi talks about no deflation or lack of deflation today and rates spike up it won't take much to get rates up and i don't think you need rates up that much >> i love this next question, because it is a debate that we've been having almost every day. and the response is proof that it's the right debate to be having right now if you could own only one of the following class of stocks in the second half of 2017, which would it be? we asked these strategists on wall street. 50% say growth, 50% say value. so that debate rages let's do it again here are you surprised by that -- >> so if you like technology and you think technology earnings are going to be very good, which i do believe they will, then you kind of like growth. although i think you can barbell technology, for sure but if you like value, if you
like financials, that's a big part of the s&p 500 index. so that's a value component. i think you can kind of do a barbell, you can kind of do a core strategy and own a bit of both >> and you can do that with stri industrials an was well. >> but you need energy to stabilize. if oil prices go to 35, industrials will not do well >> and the more we see coming out of europe, judge, the more you see -- steph i know you added to oracle last week. i just bought them for a short-term flip, i don't still own them now but i do like it and i think oracle will do well with europe recovery i think hpq, the old hpq, whatever, i think we'll see a lot of these names doing extremely well contracti crm, microsoft, as well. >> anybody think tech runs out of steam or is anybody on the tech team >> i think you have to own the big guys we own google because i think you'll see revenue and earnings growth the question is, does the multiple stay or does the
earnings accelerate. >> what's surprising in and of itself, too, is 60% of the strategists that we asked think that we're going to get tax reform by the end of 2017. and maybe that, in part, tells you why people are so optimistic that 85% of the total respondents say that stocks are going to go higher one way or another. they may or may not go more than 5%, but 85% of folks think that the market is going to go higher >> and maybe part of that was when mnuchin us with out there and was so adamant by august we're going to get this done, and now you start pushing things out a little bit forwabttle bit they want something done by the end of the year. i think people are looking at that as the potential. and certainly, it could be i think if they could actually focus more on that, judge, and get a little bit away from health care for a little while, we would probably have a much better opportunity to get that -- >> let me ask you this if you do not get tax reform by the end of 2017, can the market go up by more than 5% as predicted here >> is it kicking the can down the road, saying it's going to
happen in the first or second quarter? or just shut down in case of what happens to health care? i think if it gets shut down and nothing happens, i think the market will get pulled back. >> what if the can gets kicked down the road? >> earnings will still drive this market. >> i don't think it matters. if they don't get it done this year, they get it down in the first quarter if they want their jobs, because they'll have midterm elections. they have to get something done. but if they get health care done before tax, that is more positive for the market and dppthe expectations are completely nonexistent for anything in health care to get done. if they do get it done, you get a better health tax program. >> we have some breaking news regarding nestle our leslie picker has that story from the breaking news desk. this didn't take long, leslie. >> it sure didn't, scott this is a response, of course, to yesterday -- or actually, sunday, rather's, third-point proposal, which we broke down all day yesterday. so nestle coming out and saying that early in 2017, they began a
review of their capital structure and as a result of that review, nestle determined that capital spending will be focused on high-growth food categories, such as coffee, petcare, infant nutrition, and bottled water and that they would be expanding their presence in high-growth geographic markets they also, and this is something that third point suggested yesterday, they continue to assess opportunities for margin improvement through targeted efficiency programs. that's a direct quote there from their statement. most importantly, for investors here, they have announced a buyback program, which amounts to about $20.8 billion or $20 billion swiss francs that is to be completed by june 2020 you can see here, a slight increase in nestle shares. back over to you >> and this comes after -- just to give people some perspective, this was third point's first ever activist -- or is third point's first ever activist campaign in europe it's their biggest ever investment, $3.5 billion >> exactly it's their biggest ever investment
and this addresses many of the policies that third point laid out. they called for margin improvement. we're seeing this year they called for focus on high-growth opportunities. we're seeing this here in nestle's report. they called for a buyback. we're seeing this in nestle's report as i can tell so far, they haven't addressed third point's asking for nestle to sell its stake in l'oreal so hopefully we'll hear more about how they feel about that moving forward >> leslie, thank you so much you own nestle >> i do own nestle i've been to nestle to see them. i think it's a great company it is one of the best companies out there. and i -- management has new ceo, as we've talked about. i think, you know, you let management they've laid out this plan and they might disagree with third point, but you've got to let management do what they've got to do. >> this shows that maybe they agree with third point more than people would initially have thought. >> and there's a lot of work to do -- and management agrees. they said it last year when we
met them they said they've got a lot of work to do and i think you can see margin expansion and they have the best global brands in the world. >> as a shareholder, were you happy to see loeb reveal that position >> as a shareholder, i prefer management to do what they want to do, and if loeb can help them, great. >> was that a yes or a no? >> i'm not -- it was like, i like them, but -- >> politics. >> let's just say -- biggest ever -- it's his first ever activist campaign in europe. he's one of the successful hedge fund managers there is >> if he can work with management, i don't like the whole idea of clashing with management down the road >> the nice thing about it, there are a lot of things they can do obviously, the buyback is good news, butconfecti confectioner's business is up for sale that's why conagra rallied pinnacle foods also needs froze opinion there's a lot of stuff that can happen. this is the risk you run in being underweight consumer
staples. the m&a activity is the best in any sector >> judge, when you see just a 1%, because that's all dan loeb is -- >> 1.25% >> it's a $300 billion company a $280 billion company it's basically 1% of the overall company. and yet, they respond this fast to it, sirott? does that tell you there's a little more heat >> i made this point yesterday those old rules, if you will, seem to be out the window in terms of what sort of influence an activist investor can have, even the their percentage stake is small it's not like nelson peltz had a massive percentage position in ge >> right >> look what's already happened -- >> or carl icahn >> those rules don't apply anymore. and this is evidenced more so of that new, that new road of activism if you are a credible activist with a credible plan, you can exert some sort of change,
fairly quickly, at least it seems in this -- >> yes >> and it looks like in this case, they are aligned management is aligned -- there's nothing come out, third point saying -- >> it's also new we don't truly know. >> management has been articulating their need to change strategy and cut costs and buyback shares so that is not new and they have talked in the past about selling assets and things like that. i think it just gets accelerated. >> let's get back to our market conversation talk a little bit about volatility it is at a record low. pullbacks have been minimal, as you know people have been waiting to get in they've not really had much of a chance and history shows with those ingredients, the second half of the year is usually even better for investors. let's bring in msnbc's senior markets commentator, mike santoli live at the new york stock exchange michael? >> the weight of the evidence definitely points in that direction that the second half of a year, if you've had an unusually calm first half and of course, we didn't even get a 3% pullback if you look at the 16 years that
have been similarly calm in terms of first-half volatility, the second half had twice as good a return as the second half with less volatility i think we do need a few caveats about that, just because one of those years that was covered was 2015 and we know by the end of the summer 2015, global markets started to get ragged. things started to fall apart credit markets did actually seep into equities and you had about a 12% decline, maximum decline so i do think you can have a combination view here, which says things should get a little bit more jumpy, as we get on into the second half of the year the typical pullback after a calm first half is at least 6% on average 6% from this level is going to take you back to february and 2,300 on the s&p 500 that's no big deal in the grand scheme of thing. might feel like a big deal based on how calm things have been so i do think this is the question as we head into the second half, will this year be more like 2015 as i mentioned, or like 1995, which was
basically nirvana and you melted up all throughout the year all these things, i think, get thrown into the mix. >> long-term investors, you know, it's tough because you are afraid, reticent, whatever, to get in with the kind of gains that we've seen. and then you just haven't been given an open door to do so, because the market, as we said, has just continued to melt up. >> yeah, and it's done so, scott, by basically handing off kind of short-term leadership. you know, you have your kind of stars go sit on the bench. technology pulls back a little bit, and the banks pick it up. and that's why index level fl t volatility has been so muted because all of these currents are keeping the market very stable as it moves along you haven't got the chance if you're looking for a pullback. long-term investors that put a defined amount of money into stocks over time, you're also not getting the benefit of that disciplined behavior, because normally you want to shake out, so you can actually kind of improve your forward returns by getting better entry points, but
you don't get to choose your path through the markets the weight of the evidence are that quiet first halves tend to be better for the second half, but we're still overdue for something more than the kind of setback that we had, at least going through the fist six months >> good stuff, michael thanks so much are people too complacent? >> i don't think so. >> where's the vix is it like 9 and change? >> there's such a rotation going on, and we've talked about in the sectors. financials have done anything all year you look at where other sectors are going, there is opportunity to buy in the market if you pick your spots we like the financials, like some of the industrials and wait for the other sectors to come back or ride these out >> do we need to look at the vix a different way? kind of cut and dried? >> probably. jon and i have pointed out many times, at a 10, it's actually high relative to where the actual volatility is in the market but 10 still remains very low, so it's a great opportunity for people to find that protection, to buy that protection, to be able to stay with some of these
very high-moving areas and mike pointed out the most important part the reason we've just had this steady melt is this rotation it's been a financial rotation the technology stocks, they had that quick little pullback and then it was financials then financials had that pullback and then it was technology, but it was industrials. >> a one-to-one correlation. remember a couple of years ago, scott, when everything was one correlated so when we went down, everything went down. >> i was going the same way you were people got nervous, they simply sold out of a sector and put it into another sector. now, you're saying, if they got negative, they just sold everything >> and that is what you see more when you do see the market making corrections, is everything does move one to one, they're selling everything they're selling bonds, they're selling stocks >> financials are up and health care is down so today if you're going to tak opportunity, buy some of the health care companies that are for sale >> we're just getting started. here's what else is coming up on
the "halftime report." >> next up, f.a.n.g. week rolls on we have an exclusive interview with the tech stock fund manager that has beaten 99% of the field with his picks he's dumping three f.a.n.g. stocks, making his top holding a stock that's outside of the bite plus, citi's bold call on when oil will hit the bottom the alimrert" th"hfte powi scott wapner and the traders is back in two minutes online u.s. equity trades... ♪ ...you realize the smartest investing idea, isn't just what you invest in, but who you invest with. ♪ and it's also a story mail aabout people and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you
we are back on the "halftime report." salesforce up it will% this year now sun trust thinks the run is far from over. the firm initiating the stock as a buy, $110 target let's talk about this. they say, and i quote, we recommend the stock as a core holding for large cap investors. the story provides direct exposure to secular growth what's that? >> i was talking to jason, actually about nestle >> i'm talking right now >> he -- >> are we on the same page >> we are on the same page >> you hear somebody -- >> let me finish the story, the note says, provides direct exposure to secular growth associated with cloud software despite the law of large numbers, we believe the company can sustain 20% plus topline growth and discipline around exhibiting operating leverage.
bodes well for the stock you got an opinion on that one >> i do. actually, i think it's a great company. we do not own it it's always been expensive i think this is one of those pullback, i'd buy it >> i own it. i would hold it. i like it a lot. the quarter was outstanding. billings growth of 16% year over year compared to 6% over what analysts were expecting. margins are the real change this year the revenue growth, we've had it for a long time, double digits it's going to continue, but the margin profile is improving, as they vertically integrate with their customers. that is very powerful for our operating leverage i just wouldn't chase it right here, because it's had a nice run, but very strong fundamentals >> they say, despite the law of large numbers, the run, they believe the company can sustain the topline growth core holding for large-cap investors. is that right, pete? >> absolutely. revenue growth is unbelievable you mentioned that but i love that you've got incredible management. that's the first spot i always look i've traded this i'm just waiting for a specific catalyst, option, something to
get me back in it. i love this and still love this name i love the acquisition strategy, as well. i think between benioff and bloc, two incredible managers who are running the whole show, $4.5 million of acquisitions, they have gone out and bought growth to continue this move to the upside >> dr. jay >> unbilled deferred revenue is up like 26 or almost 30% that i think europe just has lit a fire under many of these tech companies. from what i hear, france is really kicking in right now. not just because of mccomb's victory, but people are shopping, businesses are spending again, from what we hear so based on that and what these guys have done with the cloud, judge, i think crm has got at least 110 in it. >> any had to say, okay, you go oracle or you go salesforce, what do you do >> both. why can't you do both? >> you can >> i'd do both >> it's a incredible aps >> i added to oracle today and hold as a position in salesforce >> they knocked it out of the
mark, if you recall. >> the theme is cloud. cloud is certainly regaining momentum cloud has a long runway ahead of it and these guys are the leaders and oracle, i just think, is more of a transition story starting to work salesforce, everything is clicking on all cylinders. >> this is day two of "halftime report's" f.a.n.g. week. we're talking with a tech fund manager today that has beaten 99% of his competitors and he is getting out of most of the f.a.n.g. names and piling into salesforce and other non-f.a.n.g. stocks. josh spencer with t. rowe price live with us in baltimore. josh, welcome back >> hey, scott, nice to be with you. >> great segue for us. salesforce gets initiated with a buy, you love the company. why? >> everything you and the panel were talking about, i think they have fantastic topline growth, great management team, really well positioned across cloud software, a number of different clouds that they offer and they've just put up the numbers for so long that i think the stock has a lot of runway ahead of it. >> how big of a position is this for you?
>> this is the biggest position in my fund it's close to 15% of the fund right now. and i think it's got a lot of upside over the next several years, i think the stock could even double from here >> we'll take a look at the chart right now. that's a large position. so you -- you know, we sort of tease this as you sold out of some of the f.a.n.g.s or don't like the f.a.n.g.s as much anymore, that you're placing your bets with a name like crm >> that's right. i have probably the highest weight in the software sector that i've had since i've managed the fund, which is a little bit over five years. and i have less in the internet sector it's not that i don't like those companies, but take someone like amazon if you wind the clock back a year, i think that stock was right around 500 on those fears we had in china. it's now approaching 1,000 it's just more difficult from this price, whereas in software, i think salesforce is actually only up about 15% in the past year so it has a lot more upside
potential. >> what about sort of the question that stephanie link raised, and she owns it, loves it, but after the run it's had, can you get in here, if they love the story that you're telling and that she told and the others, as well, or do you have to wait >> i would say this is one of the few companies in tech where you can get in here. and i think it spent much of last year in that hangover, over the m&a, the discussions around twitter, and lungedn and the uncertainty as to whether that was a signal that the company's growth was slowing i do not think that was the case i think the company has great growth prospects ahead and it's just starting to come out of that hangover. so it's up 28% this year, but it was actually a subpar performer last year. a lot of that is just catch-up >> interesting, one of your top holdings, as well, is what we've been calling the best performing large-cap tech stock that no one talks about. obviously, they talk about it more lately. alibaba. >> oh, sure. yeah, i -- alibaba is, you know,
another fantastic story. at their analyst day over in china, a couple weeks ago, they raised their topline griuidanceo the low 50s. think of a company of this size growing top line in the 50% plus range. and i think one of the beautiful things about alibaba is the cloud story that they have underneath much as amazon had with amazon web services, alibaba's incubating a nice growing cloud business underneath the retail side so i think this is another one that has a lot of growth runway ahead. that stock has done quite well of late. so it wouldn't have quite the upside profile as salesforce from here, but if we give it enough time, this is going to be a very good performer. >> i'm very surprised, to be honest, of your largest holdings, i don't even see facebook on the list the "f" in the f.a.n.g.s why not? >> more of a miss than anything. the company has executed so well and i haven't owned it for the past couple of years so that's more of my fault than
any great insight that i've had on the company i'm happy we've had a lot of other stocks that have done quite well but facebook, to their credit, they've executed phenomenally well with instagram, of late >> one of the as, alphabet, is certainly on your list would you buy it here? >> i would i think alphabet is still attractively valued. it's still in the low 20s multiple, when you look at free cash flow. i think youtube in particular has fantastic growth prospects across a number of dimensions. i think the shopping investigation in europe is really going to prove to be a fairly small event and i love what they're doing with the balance sheet, with the capital allocation, with improving margins. i think the cfo, ruth poratt has had a fantastic influence there. and this has really become a multi-faceted growth story with both topline growth as well as margin expansion >> we always have a great debate about amazon you know, value investors sort of can't get their arms around
it, except stephanie link on our program from tiia finally threw in the towel and bought the stock. you don't own it or at least i don't have it as one of your top holdings again, why >> yeah, it's been a top holding for me for a number of years it's just performed fantastically well i have a smaller position now. it's not in my top 20 holdings, as it typically has been and that's simply because of the price. at $1,000 and approaching $500 billion in market cap, it's just gotten more difficult. it doesn't mean that it can't perform well, in years to come, but just from right now, i don't think it's the very best use of the capital. >> let's talk about some of your other holdings -- do you own a stock like nvidia? i know that's not on one of your top ten holdings, but do you own it >> i don't own nvidia. another one where i think the valuation is a little ahead of its. >> how about microsoft >> actually, i have a midsize
position in microsoft. i like what they're doing on the cloud. in fact, in the pullback in the recent weeks, where you had a 5 to 6% correction in a lot of tech stocks, microsoft is one of those i added to i know the panel was speaking earlier about the low volatility and these small, short corrections that you have sector by sector. i think those are the types of things you should look for in tech to buy the companies that you like and microsoft was one of those i added to a couple weeks back >> let me throw up nvidia and ask you another question about that when you as an experienced tech fund manager see a stock that has done incredibly well, like this one does it make you nervous does it make you question sort of where we are in general in the cycle or no? >> a little bit. you know, just the sheer amount of money that's chased nvidia and the valuation to which it's gone i will say, they have a fantastic fundamental, you know,
proposition across graphics, gaming, automotive, data center. so there's a lot going well for the ompany i'm surprised it's gotten to be an $85, $90 billion market cap company. i want to say it was 30 just about a year ago so it's tripled and that does give you some cause for concern, at least to step back and reflect on it. and i think that's sort of what's happened in tech. a lot of valuations are more full the market's done so well in the past year that you have to be more choosey you have to look for pullbacks, and look for those few opportunities that really haven't participated to the same extent >> is there a place that you look at this stock and say, you know, if it gets down to x, i'd consider buying it because certainly, we've had suggestions from other traders or investors who love the company. love what it does, but just can't pull the trigger here, need to wait >> yeah, you know, it's -- unfortunately for me, it's been
a bit of a moving target, because i think the fundamentals have been even better than i expected i just don't think you could have scripted a story that's gone so well for them. so, i would kind of say, you know, a 20, 30% pullback, something more serious you would want to take a hard look at the company. not that i'm predicting that, because things are going quite well for them, but just, you never know what's coming your way in tech, so it pays to be thoughtful and look for those types of pullbacks >> yeah, i love that we're running through a bunch of names. finally, let me throw one at you. it's clear you like the cloud. workday is one of your largest positions. will you tell us about that one? >> workday, i really love their position they are the second biggest pure cloud software company after salesforce if you think of salesforce as really helping companies with their front office, their sales, their digital customer engagement, workday is really helping companies with their back office, the hr side, the financial management side.
everything that a cfo might deal, workday is taking that side of the house to the cloud and they are growing 30, 40% annually it's another one with great management team, great growth prospects. i think the valuation is up a little bit, but if you look out in time, it's going to be very attractive i could see this company more than tripling its sales and more than doubling its value. >> you know, i lied. i'm going to ask you about one more because someone on twitter is asking me to ask you about netflix? >> i think netflix is really in a good place i love what's happening for them on the international side. i think they've hit a tipping point across a lot of markets. and this is one of the classic f.a.n.g. stocks that i think is still very attractive. i think it could return quite well from here i think the u.s. business is stable to growing, and the international business is really carrying the story from here forward. >> yeah, you have a fairly large position, yeah >> i do.
i love the management team i love the company i don't think you have to compromise here at all i just think they are so well positioned across, you know, both the technology side and the content side and i love the fact that it's a recurring subscription business. you know, in some ways, it falls under the radar, but they're going to approach, you know $13 billion, $14 billion in sales next year. this is not a small company anymore, but still growing 20, 25%. >> josh, this was fun. thanks for your time today we really appreciate it. we'll see you soon >> thanks a lot. great to be with you >> josh spencer. do you guys want to comment on some of the stocks we talked about? >> one of the things, he's talking about getting out of some of these f.a.n.g. names, but it's interesting, because o talking about how he thinks they're undervalued. when when you think about your stock, amazon, it's an unbelievable run, but benioff addressed that specifically, talking about $20 billion in aws. he thinks the trajectory is
going to be $100 billion so you can sigh why people love the cloud and which names they want to be in. i'm a little surprised he's jumped off of this in amazon, even though it reached 1,000, just based upon potential growth >> you saw some of the moves, clearly, in the stocks that he talked about salesforce is his biggest position a little negative, if you will, near term on nvidia. that stock was down about 2% or so there's the spike in salesforce, and maybe a little bit of the sell-off in nvidia, part of his comments, as well. we're going to continue our f.a.n.g. week tomorrow, as well. >> facebook, i like what they want to do in terms of democratizing technology >> amazon. >> netflix is everyone's go-to to watch movies. >> google, well, yeah, it's the end-all for all my questions >> yep, tomorrow on f.a.n.g.
week, it is michael lippert of the baron opportunity fund sue herrera has the latest headlines for us hi, sue. >> here's what's happening at this hour, everyone. a wave of cyber attacks reported around the world today the latest is affecting the pharmaceutical company, merck. meantime, the food giant, mondelez, says it's possible it was hit, but it is not confirming a a cyber attack. britain's wpp, the world's largest advertising company characterizing it as a ransomware attack. it is day two soft martin shkreli trial in new york city the defense asked for a mistrial, blaming the media for a jury selection slowdown. but the judge denied that request. and a jury began deliberating in the case of five men accused of involvement in the murder of russian opposition leader, boris nemtsov. he was shot late last night in -- late at night in 2015 as he was walking across a bridge right outside the kremlin. and queen elizabeth is set
to receive an increase in the official funding that she receives each year the sovereign grant will be 82.2 million pounds or about $105 million. that's an increase of more than 6 million pounds the increase is derived from a formula based on the financial performance of the crown estate. that is the news update this hour now we are going to talk about what's coming up on "power lunch. michelle, i believe i'm tossing it to you. >> that's right, sue thanks so much and here's what's coming up on "power lunch," which starts in 19 minutes sue was just talking about that massive cyber attack hitting big companies across the world, including that member of the dow. one government calling it unprecedented. we're going to have the latest on who's being impacted, which company or country could be next plus, should health insurance be more like car insurance? better driving record gets you a better rate, if you keep yourself better in shape, should you also get a better rate we debate. and is oil on the brink of a breakout we have a five-star energy fund manager on what he sees ahead
and how to play it that and more at the top of the hour on ow lch"perun." but don't move, because the "halftime report" is right back after this quick commercial break. at johnson's we care about safety as much as you do. that's why we meet or exceed 15 global regulations for baby products. and where standards differ, we always go with the toughest. johnson's.
or more on the dollar over three months a month later, health care is the big winner the s&p and industrials don't move much. telecon falls. the big loser is the euro stocks 50 for more kensho, go to cnbc.com/pro now back to scott wapner and the "halftime report" traders. i'm seema mody we have an update on the global cybersecurity attack that seems to be impacting some of the biggest companies out there. we've just learned that mondelez and tnt, which is a unit of fedex, have been added to the list of companies being affected by this cybersecurity attack mondelez confirming their network is experiencing a global outage among other victims include russia's rosneft and merck we'll be sure to keep you updated on this developing story. >> the najarians are tracking
unusual activity in telecon and industrial names we'll tell you which stocks are on the move next on halftime [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.
what in real time?stomer insights from the data wait, our data center and our clouds can't connect? michael, can we get this data to...? look at me...look at me... look at me... you used to be the "yes" guy. what happened to that guy? legacy technology can handcuff any company. but "yes" is here. so, you're saying we can cut delivery time? yeah. with help from hpe, we can finally work the way we want to. with the right mix of hybrid it, everything computes.
can gather themselves over there, they can do the report. pete, you're up first. >> we're doing it. scott, lack at alcoa really interesting, because last week or the last couple of weeks, we've had a lot of different metals out there u.s. steel, those are all moving to the upside. have had a great run now we're seeing alcoa but you can see here by the chart where this stock has been. near that 38 level way back earlier in the year. then here around 36 not that long ago and then here it is, it's just getting off of that 30 level and you can see the trajectory, as well at $32 a share, you know what they decided to do they came in and bought huge, 20,000 of the july 36 calls. very aggressively bought, 35 to 40 cents is what they were paying for those at the time and looking for this stock to maybe test those same levels that they were before. >> you said the july 36s are we talking the 37s it just said 37? >> that's rong it's actually the july 36 calls. >> okay. i want to make sure everybody's clear on that. doc, what have you got >> take a look at t-mobile you get to be warren buffett in
this one, with a caveat. warren, of course, is famous for selling insurance over there with geico this is insurance but for t-mobile so you take a look at t-mobile, it's down $1.22 today. instead of panicking, people went in there and sold puts at e july 59 puts they sold, as you can see, almost 5,000 of those that would be 500,000-share equivalent. >> is this because they don't think the sprint thing is going to happen now? >> no, they're selling those puts because they think the premium got pumped up and they're more than willing to own the stock if, indeed, it goes to that 59 level. >> okay, i got it. >> so they're being buffett, like i say they're taking advantage of fear in the marketplace, selling those puts with the stock basically right around 62 bucks, so they've got that $2 insolation to the downside. >> right. >> and then the credit they checked for the puts. >> i misheard you on the buying versus the selling of the puts. >> that's all right. i'm in the puts, probably be in them two to three weeks. >> do you have -- >> and i'm short --
>> -- an upgrade as well >> an upgrade? >> i mean an update on micron. it says i'm supposed to do that. are you with me? >> yes, yes, made a huge move here, judge. >> are we on the same shelf? >> when necessary say 30 seconds, i take them at their word take a look at micron and look at the move that it's made, basically just since the beginning of june, down there at about 27, now springing up over 32 multiple hits we've had for unusual activity in micron peeling off a little here and there, but still love the stock. >> all right, gentlemen, come back over here. >> thank you. coming up, a gutsy call on oil from one of wall street's top names in the commodity we're ba itwmite ckn o nus. a us,
president mario draghi commented on month terry policy. what else is weighing on the dollar, scott nations? >> not only is it a two-week low shlg but the low from two weeks ago was the low of the year. it's no surprise the dollar's having a hard time because interest rates are also at lows for the year you mentioned new hawkishness from the ecb another problem is growth in the united states, or lack thereof the imf just lowered expectations for growth to 2.1%. we'll get the last look at q-1 gdp this week and that's the only hope the bulls have. >> all right, brian stutland, the dollar's lost about 5% this year so far. what would be the key levels investors would be watching now? >> well, i think in the short-term technicals, i'm looking for maybe a couple percent higher here, but ultimately, i think longer term by the end of the year, you're looking at low 90s in the dollar here scott mentioned that flattening yield curve, low interest rates
on the 10-year and 30-year really posing a problem for the dollar, so end of the year, you're looking at 91, 92, maybe even 90 on the u.s. dollar index. >> okay. you can catch brian and scott on our live show at 1:00 p.m. eastern time scott's book, "a history of the united states in five crashes," got a great review in the "wall street journal" today, so we'll be talking about that and more, p00.m futures.cnbc.com "halftime" is back after this. are yo >> announcer: "futures now" is sponsored by thick or swim by t.d. ameritrade and cme group. 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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all right, time for final trades mine is oil. ed morris of citi says a bottom in the oil price is likely near. do we agree -- >> i hope so. >> -- or disagree? >> i hope so it has been the pain train of a lifetime. >> here we go, everybody trying to call a bottom. >> been a bottom in a long time. >> very hard to trade the bottom. >> 44 bucks and change, does that seem reasonable we're close to a bottom? >> i hope we are, because honestly, if it goes below $40, it brings the whole market with it. >> absolutely. >> then you don't have a floor so, i would like it to stay this level, because people have confidence in the economy. >> okay. doc, start us off, final trade. >> coca-cola, ko, seeing some unusual activity it's just like in t-mobile, they were selling puts that somebody collecting credit for that, i did the same >> pete? >> yesterday was financials. today, you know what, surprising, financials xlf, huge call buying.
>> there's a shock. >> credit suisse, call buying. financials are going higher. giddyap! >> well, our survey said -- >> survey said >> i wish i had the sound effects, i'd be using my desk. >> i was going to say, positive analyst day on stanley black and decker, i'm back into the stock. >> lowe's on the back of stanley black and decker. >> thank you "power lunch" starts now. and i'm michelle caruso-cabre caruso-cabrera here's what's on the "power lunch" menu, a wave of cyber attacks happening around the world, disrupting the power grid in ukraine, an oil company in russia and targeting at least one major dow component. we'll have the latest on this massive attack, straight ahead. plus, shares of arconic plunging the uk government launching an investigation into the safety of close to 100 buildings now with the number expected to rise. arconic supplied the panels used in the deadly fire weeks ago this is minutes away. health care still front and center we want to