guys looks like we're talking a pause after what was a pretty incredible winning streak, the best since 1997, six days of record high closes. >> i'm glad to be with you on this -- on this day. >> fun having you. >> fun to see both of you. >> got the whole crew here. >> you're too tall for this shot for me. >> that ends it for "squawk alley" and now also at post nine, scott wapner with "the half." and welcome to "the halftime report." i'm scott wapner live from post nine at the new york stock exchange on this friday. our top trade this hour, rally watch. why stocks continue to climb higher and whether there is any end in sight for this record run. here on set with us today josh brown, stephanie link, jim lavanthal and erin brown is here, head of asset allocation with ubs and also with us from minneapolis is peter najarian. beginning with the markets, the s&p coming off an eight-day win streak, slightly lower today, it as you can see stocks are lower across the board after the big jobs miss,

but for the most part it has been an unabated rally to new record highs which jimle cramer said earlier today is making him a little nervous >> i'm a little more -- a little less constructive than most people the last part of this rally has been on an absence of news when all they arereally hoping for fed rate hike and maybe a tax cut. every day i start the show with like here's what i'm worried about because nobody seems -- is as worried as i am i'm worried! >> well, because, josh, the market just continues to go up it almost doesn't matter what the news is to jim's point stocks creep high. yesterday is a perfect example we're up 40 points and then you look up five minutes later you're up is hundred points and finish up, you know, even better that be that. >> it's a bull market. it's what bull markets do. look, in the spring of 2013 the s&p surpassed its previous high.

we're in year four i don't understand what the problem is we eve had corrections along the way. the russell down 30% in 2016, and we've had cyclical downturns. >> is it getting a little ridiculous though? is it getting a little bit out of hand? >> very simple police. a "wall street journal" article this morning, they are apoplectic. >> they say no end in sight. few obstacles that people can find. >> the stocks, they are going up listen, since 1926, stocks have gone up three out of every four years. why is it so hard for you? earnings are growing rates are low. we're not at nuclear war, yet. why is it so hard for you? >> scott, think it's important to keep in mind what's driven that real. largely been driven by earnings growth this year advanced economy earnings are up 12.8%. there hasn't been multiple expansion this year in the s&p 500 or broadly across developed market economies it's fundamental earnings which

are driving this recovery and that's a solid basis for equities to continue to rally. >> i get it, but we haven't, stef, gotten into earnings season yet and we've already chalked it up to be outstanding. it's going to be great. >> gotten through a few ofthem been pretty good. >> and the economic data is actually improving today's number is very noisy, but the wage number was pretty encouraging, and it actually was pretty in-depth. i mean, technology wages were up construction wages were up services wages were up, and it actually confirms what we've been seeing in the manufacturing data, the ism. that is also confirming that you're seeing wages starting to rise that's a good thing. in addition to better auto sales and better housing data and to erin's point that should translate into earnings and actually an acceleration in earnings. >> i get it. what is this, an infinity market >> i'm not saying we won't see profit-taking into earnings because expectations are high. have a little cash so that you can buy that dip because i don't think the fundamentals are

worsening. they are actually improving. >> right this is a perfect week to have this conversation, jim, and we had it yesterday with cramer and we it ourselves on the program the microsoft upgrade is the perfect throw in the towel move. sitting there, you know, we're waiting for a pullback, waiting for a pullback i guess we won't get it. let upgrade the stock. >> it's not just microsoft we can go through a litany of names if you want to do that ge is at the top of the list frankly. people who are upgrading it now, i'm not sure what you missed in the prior 50%, but whether it's gm, whether it's microsoft, whether it's intel or whether it's the markets as a whole, let's think about this just from the individual investor point of view why on earth would you sell right now? every piece of negative news over the last year has been totally ignored, so you're going to pick now with less than three months to go to lock in capital gains on which to pay taxes to respond to news that the market isn't responding to, and oh, by the way it's not just a lack of sellers, buyers are come in. steph, you mentioned, you know, people who have cash on the sidelines. if you have cash on the

sidelines you're seriously looking yourself in the mirror right now and you're thinking i've got to get that money to work i'm not being trite when i say there's for buyers than sellers. there's specific reasons why there are a heck of a lot more buyers than sellers, and it's going to continue through the end of the quarter >> pete, is it time to be worried as kramer says you look up and stocks are going up that maybe shouldn't be going up, that continue to go up for no apparent reason on no apparent news? >> my answer would be this it's always a time to be cautious, and i know that the whole desk would agree with this h.am i worried i would tell jimmy, don't worry. there's three things you can do. look at the volatility. >> i'm not, pete. >> when you've got -- >> not you, jimmy, not jimmy cramer. >> oh, sory is, sorry, sorry. >> he's talking about cramer. >> i'm talking about jimmy cramer because he was talking more and more about being worried. the idea is this when you've got volatility this low right now in the marketplace, and you're looking hat it trading in the 9s, scott, we've had 20-plus prints, closing prints in the 9s this

year that's absolutely unbelievable, but -- >> the vix is under 10 for the 53rd time in 2017. >> right. >> absolutely amazing. >> yeah, go ahead, pete. >> well, it's absolutely amazing, and i'll point out this here's what i'm seeing when everybody talks about -- bob pisani talks about volumes all the time, light volumes. we've not had the light volumes in the option world and i bring that up all the time and why i'm bringing it up right now think about this when you've got a stock that's run, if you were in microsoft a couple years ago when nadella got in there and you're getting nervous you do a stock replacement. what does that mean? you sell the stock and buy calls at the money, just out of the money, in the money, whatever the case maybe, but the low volatility, scott, gives you that opportunity to reduce that risk and have a defined risk in terms of if we do see a selloff, and if you don't want to do that, you want to hold on to it, can you buy protection, at incredibly low levels there. isn't a storm in front of us

right now or the volatility index would be much higher, and the last thing is look at all the roles. i'll give you a great example. yesterday, the xlf, the xlf just continues to show with the financial etf how much it can continue to the upside movement yesterday they rolled up 110,000 of the november 27 calls those are being rolled from october to november. they are buying time they are buying extra room to the upside, and they are taking money off the table while they are putting money still in the market so they can be involved so that's why jimmy shouldn't be as worried as he is it. >> well, this is, in many ways, you know, a perfect example of where we are and how we've gotten here is albemarle it was taken off goldman sachs' conviction buy list. still well on your conviction buy list, as far as i know, but this is an albemarle market in many ways. it's a stock that's become a darling of investors, much like nvidia, and pick a bunch of

others that continue to move higher i get the lithium deal their entire business is not based on lithium and yet the stock has run up unabated. is that a worry sign in the market >> that the stock has run up unabated or that they are going to downbrady grade it? >> that it runs up unabated? >> i don't know why that's a reason to worry. it's a growth business in a segment of the economy that really is not known for growth people are committed about it. it's not a cheap stock but certainly not outrageously expensive when you look at 2018, 2019 lithium is about half the business, almost all the growth and even goldman in the downgrade, an evaluation call. they were saying we're right on the stock. we've made money and maybe there's less upside from here hand maybe a lot of upside is priced in. okay maybe they are right, maybe they are wrong, but they acknowledge that lithium pricing and lithium capacity are still going to be favorable, so are there a million stocks like that no there are a handful and you see people chasing them. >> the china story alone are lithium. >> bananas. >> it's truly enormous

they will go from 400,000 to electric cars to 2 million in the next two to three years. >> i get it. but at what point is that in the stock? >> if this thing what is a 50 times earnings, 28, certainly growing above the market so i think there is as story here and it's a secular one so i think you have to appreciate that. >> so we brought this story on the air at like 100 bucks so i'm talking about the stock. not a lot of people have heard of it. it's 110 it's 120 each time we bring it up, more and more people hear the story and now it's 140 should you be like oh, i have to own lithium and this is the only way to play it probably not, but it's a name that will be on people's radar by the way, when a stock gets downgraded and it barely does anything to the downside, typically a good sign so take a look at this thing watch the candle and let's see how it closes and what the price action looks like. probably it shrugs the downgrade off. >> and if you're wondering, and i think that's what you're asking, scott. what do you do with the stock or the market as a whole? >> i also am sort of suggesting

what's the message of the whole market move? >> it's a clear message. >> if stocks like no one heard of eight months ago except for people who were really in the know. >> it's a is a billion market cap. >> i'm not justifying it i don't care whether it's 28 or 50 times this is just having experience in the markets whether it's albemarle or the markets, they are going higher, okay because the question is what do you do because at some point it will turn. guests in july were saying, notable guests who were saying we're due for a correction yes, we're due for a correction you don't try to time that you wait for the rollover. whether it's the market as a whole or albemarle and same with gm and same win tell and microsoft, keep riding it until you get a few down days in a row. that's your signal to sell, but don't sell it on the way up on the evaluation call, you're not going to lose money, you'll forgo gains. >> bring another guest into the conversation who has a perfect take on all of this.

mike santoli, his new column michael, appreciate you being here you call this the all-gain no-pain market. >> yeah. >> you know exactly where we're going to here. >> sure. released minimal paper, scott. really just another way of quantifying what we've all been talking about here which is this very orderly, relentless low drama rally with almost no pullback, so what i looked at going into today, the s&p 500 up 14% year-to-date the maximum pullback along the way during march was about 3% higher as well if you look at the ratio, 14% to the upside and 3% maximum downside, that's almost five times that puts this year on par with some of the best years in decades like 2013, 1995, where hough this relentless grind high magnitude of the gains this year are not yet on par with those which were 30% plus, but what i think is interesting is neither of those years obviously was an ultimate peak in the market. you tend not to get a true market top when it's behaving in

this very quiet way. i think the markets get jumpy and anxious and volatile and emotional before you actually have that top put. in that being said, short term, are we nervous that we hear tom people saying it's an obvious meltup into year end too many people saying you have to position long maybe that's the case but that's more half short-term tactical call as opposed to something bigger to worry about. >> i spoke with a very well-known investor yesterday who was sort of asking me how much of the tax cut do you think is in the market, and it's like is it 20%? is it 50%? is it 0 percent? you've heard a whole range of people come on cnbc and say, well, i don't think it's in at all, but as the market continues to creep higher you get a budget resolution yesterday. >> same people in january saying this is going to -- this has to get done in the first quarter, and then this has to get done in the first half the market doesn't care. no offense to these people trying to come up with probabilities. >> when you're trying to sort of figure out what the multiple of the markets should be next year

based on earnings which are based on policy, like tax reform, yes, it does matter. >> so maybe taxes are getting put into the mark. i do think that, that's the case, definitely but what comes after you get the tax program of some sort even if you don't get a tax, you actually have certainty one way or the other you have companies starting to invest capital expenditures, business investments. this is -- this is one of the things in this most recent market that hasn't been seen it's business investment, and if we can get that and that kind of confidence, i think you can see a lot higher multiple. >> i think stephanie is right. i think very little -- i think very little right now is actually being driven by tax reform if you look at the biggest tax beneficiaries so the companies that pay the highest statutory tax rates they just outperformed two weeks ago, but they have gotten crushed in terms of since the november election. they just started to outperform.

we're in very early days of that trade, so i think very little, maybe 20% has been priced in what said, what's fundamentally driving this market hasn't changed and that's earnings which continues to improve on the back of growth in the u.s. as well as abroad, and as long as that continues, i respective of what happens with tax reforms, the markets will continue to do well. >> mike, go ahead. >> i made the case in this piece, if you look at the other years that this resembles '95 and 2013 those were d.c. gridlock years and government shutdowns both years. to josh's point, the market loves when it doesn't have to care about d.c it hasn't really had to care about d.c. and it's gone up in spite of no progress or maybe because of no progress it's more likely, if we're reliant on a tax move to have the market keep going up or have earnings keep going up, that's when you worry when that's all you have and it might even be a sell on the news. >> mike, i'm with you, and i want to take it a step further it's actually the most absurd conversation you can imagine

when we had the housing crisis and people looked back and said, well, what was the proximate cause for political reasons people would point and say the community reinvestment act, they made us lend money to minorities the most ludicrous argument for the housing bubble because it was global why did sweden have a housing bubble if that's the case? this is the same story the entire world's stock market is rising this year. none of these people are getting a tax cut. they are not getting one in france or one in hong kong it's such a waste of time to say oh, only 21% of the tax cut is factored into the market that's knows what's going on it's a global economic recovery synchronized for the first time in years you've real got a situation where currencies have been helpful to stocks globally investors are appreciating that, and i think it doesn't need to be political in nature it doesn't need to be oh, wall street hangs on tax cut optimism it's just false. it's absolutely wrong. >> people of need to figure out

where they think earnings are going to be and what multiple you're going to put on that earnings number and the tax question could mean, what, i don't know, people say $8 to $10 on earnings and what multiple do you put on that? >> you may be right. >> that's what people think out in their own minds where should i be trading? >> the average country's stock market this year is up 21% the s&p is trailing. it's up 14 the rest of the world which is more than half of the equity market capitalization in the world is not getting that $8 to $10 in their index earnings from a u.s. tax cut that's number one. number two, we already know that if there's a tax cut at the highest level for people most of that does not find its way into the real economy and most of it finds its way back into the stock market and the treasury market. >> very simple police, and i think you're absolutely right, so very simple police if you look halt what the earning yield is going to be on the s&p 500 or on advanced market economies this year, you're going to get, let's say, 4% to 5% nominal

growth add in 2.5% dividend yield that gives you a total return at a minimum with no expectation for further outside of of.5% that's a heck of a lot more return than you're going to get from any single bond so when you look at a relative attractiveness across asset classic tis is going to give you 400, 450 basis bonds over bond yields and that's why investors invest. >> and you also look at sectors. there are certain sectors in this market that are still very cheap. financials, industrials, and you talk about earnings power. industrials have huge earnings power if commodities continue to accelerate and maybe you're not a trough for earnings but you'll see earnings go higher and financials, industrials, materials, that why the sectors outperform value versus -- >> they are leaning, cut capacity. >> your earnings upside. >> i haven't heard anyone mention. fed. it is jobs day, after all,

probably a december hike looks more likely than not given the wage. >> the unemployment rail. >> not a single person is worried about the fed being forced to tighten. >> i think the answer is not right now. not today. >> certainly don't hear anybody talking about it it, you're right and we're not. >> the path of least resistance is clearly higher. the things that you're asking, scott, whether it's on the housing market and whether tax reform goes through. i think it will matter but not in the next two months seasonally this is a time where you've had this sort of gains and this much of a hated rally and it's going to continue right now we're at 18 times what a lot of people think will be 140 times next year. that's inclusive of -- >> $140 in earnings and gold mcis at like 146 or whatever it is. >> put a multiple on that.

>> here's the thing. you can bifurcate the discussion if you get tax reform that increases -- >> that's my point. >> if you get tax reform that increases the probability that you get infrastructure spending, right. you said politics don't matter i understand why you said it right now, and i agree with you in terms of right now, but in 2018 if you start to get the feeling that miss call policy is going to outweigh monetary policy that you're bringing up, you could see another leg higher oh, by the way, if you don't get tax reform, if that dies the way health care reform dies, then ultimately the politics will matter on the downside. >> i think economic optimism is more towards it being on the upside of taxes given the things happening this week. let's get back to dom chu at headquarters who has breaking news. >> cnbc has learned, according to sources familiar, that private equity form sycamore is looking to raise its largest ever private equity fund that targets retail acquisitions. now prior to this fund-raising

event that sources spoke on condition of anonymity for, the biggest fund that sycamore has ever raised was $2.5 billion that comes apt a time when a lot of retail opportunities may be arising given some of the struggles that industry has been having still though a very interesting story with regard to the development of people looking to invest in this retail sector we should also point out that that's just part of the story. go to cnbc.com for the entirety of it. helping to lead the site, one of our top stories there on cnbc.com back over to you, scott. >> thank you you can also read mike santoli's column as well have a great weekend here's what's coming on "the halftime report. >> gunk heim is bullish on netflix and increasing its price target to $225 the f.a.n.g. stocks that keep hitting record highs and the two new stocks that stephanie is adding to her portfolio. that's in the missing link and the last installment our

"halftime" quarterly report. we're track tracking the traders' good and bad moves from q3 "the halftime report" with scott wapner and the trade efforts is back in two minutes. your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

1. welcome back to "the halftime report. netflix hitting be a all-time highs. gunk heim raising the price target to 225 on the stock

that's our news today. guys, a lot of news today on netflix. a steeple note that talks about the price increases and wean that they still have the best value among consumer internets when you talk about them versus hulu and hbo now and that's one note you've got the gunk heim price target "wall street journal" says netflix is breaking away from the pack as the stock. what -- this is like the path continues to be unabated as well for this one. >> yes i'm not being trite in saying that, but the answer is yes. look, i'm not going to buy it. i think there's a number of stocks out there that have the same price trajectory and we already listed some of them and they are a heck of a lot cheaper than them and we can't deny two things. >> something like 2% in two days. >> i got it. up 57% year to date. really incredible and it's still going to continue. this is a bellwether name for the market overall, a market that as we've been discussing continues to churn higher and they just put through a price increase while their programming costs are going to continue to go up this price increase has got to have a huge gross margin

associated with it it's almost all gross margin so why won't it be worth more today than two days ago than before the price increase went through? >> pete, jimmy said it up 56% year to date. the best performing of all the f.a.n.g.s. this has been a remarkable stock. >> jimmy and i have both been a hence any of terms of sitting back i've been involved on several occasions, scott, and this time around what was interesting is they did make this price increase and the reaction is i think what we're all looking at saying, you know what, netflix finally got away with it this is something they tried before and it's absolutely slapped them right in the face and slapped the stock down so the fact that they were able to do this, scott, that does say something about what we all have been saying this time and time again. how are they going to possibly be able to compete and get the content and do all of the spending that they are talking

about without doing this they did it, and it looks like the markets are willing to react and you know what, this was the right time and this market can go higher, and netflix rather can go higher. international is a huge key. that's where they are growing and that's what everybody is looking at and that has been one. areas that they have had such great success so far. >> i think there's a lot to like they have pricing power and global distribution and sticky customers. however, competition is fierce out there, and you just don't know how that's going to play out. >> that's why i was going to come back at pete with it. >> at this kind of evaluation. >> i heard somebody come on the network yesterday afternoon and say the stock should be worth 50 bucks because nobody is appreciating how much money you have to spend on this contempt and to your point because an increasingly so of the competition. >> and i would -- i would say this, though i think they put the price increase because they knew there was such a strong lineup in content. the last several years they have been investing very, very heavily. here in the states on contempt

and also global distribution and it's now starting to lead to a little bit better operating leverage for them so i see why people like the story and why this is a secular winner i think the valuation and competition. it just makes it hard to chase it. >> you're not the only one who thinks that. >> yeah, i mean, hard to chase it if you're in this stock and you've been in it for a while should you be a seller >> i know. at this valuation it's hard. again, given the competition i -- i would probably take some money off the table. >> the stock is up 7,000% over the last ten years, and we've been talking about how competitive the content business is during that entire period of time and ten years from now hopefully scott and i are having that same conversation. >> i hope. >> i don't know that the stock has another 7,000% higher but this has been the narrative, a, they can't raise prices and b they shouldn't go international and, c, competition is too heavy. they have done spectacularly well and should raise prices because they are plowing $1 billion no content and not just

for the u.s. market, for latin america, for europe and for asia and for the middle east. this is exactly what they should be doing. >> look at that the. >> is raise irtheir costs. >> look at the week they have up, up 9.33% this week alone happy friday, netflix. >> in two minutes, pete is tracking unusual activity in a financial stock. what is the options market telling him about its next move? he is going to tell us. plus, the missing link two of stephanie's new stock positions. she's going to revl emeath when we come back on "the halftime report." retirement.he money you save for who's he? he's green money, for spending today. makes it easy to tell you apart. that, and i am better looking. i heard that. when it's time to get organized for retirement, it's time to get voya. this ♪s electricity. this is a power plant. this is tim barckholtz. that's me! this is something he is researching at exxonmobil: using fuel cells to capture carbon emissions at power plants.

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pete najarian watching the options market as he always does for unusual activity pete, what do you have for us today? >> well, scott, i'm not going to go over the same names we always have have. this is unusual unusual. i could go with citibank which actually has some april 29 calls, monstrous buying out there. i could go with e-trade where rolling up and out 10,000 times

but i'm not going to go there, and i could go with bank of america which hats april calls so i'm going to go with northern trust. very aggressive buying in a name and never hits that's why this is extremely unusual. it's unusual activity because of the size of what we're seeing. just under 9,000 calls, november 1 calls being bought today but it's also a name that never seems to hit on our systems. that's what makes this one so unusual and so interesting stocks are right around $93 a share. they were paying about 65 cents, up to 80 cents for the options i like it enough that not only did i buy calls but i bought the stock as well. i believe in the bank trade. we talk about value with growth. that describes the financials. that's why i like so many of them that's why i have so much exposure in the xlf and citi and bank of america and all these other names. by the way, morgan stanley hit 50 today for the first time since early 2008 the financials have been moving and really accelerating recently. >> yeah, this one is accelerating as we're talking about t.pete, all right.

good stuff let's head to sue herera who has the late headlines for us. >> hi, scott, indeed i do. a look at what's happening this hour tropical storm nate bearing down on new orleans it's expected to strengthen to a hurricane as it passes just east of the city early sunday nate has already killed at least 21 people in central america louisiana's governor john bell edwards declaring a state of emergency for the entire state overseas, two catalan police officers and leaders of two pre-independent civics group arriving at madrid's national court. they have been placed under investigation for sedition the court will question the officers and leaders about their roles in the barcelona demonstrations for kathleenians' independence last money. in the wake of a las vegas shooting an arizona man is facingsocial media backlash after posting a photo of himself turning the guns into police he first started to get positive feedback but it wasn't long before the responses turned

negative, including death threats. aol instant messenger will shut down on december 15th the once popular chat platform now owned by verizon making that announcement it helped popularize a new short handlingo such as lol for laughing out loud. you're up to date. that's the news update this hour scotty, back for you. >> i'm going to miss that, aren't you >> i was literally going say what would you do? >> i was nervous to call girls on the phone, like the dad would hang up -- the dad would pick up and i would be like oh, my god i almost smoke to this girl's dad, but instant message came along at the right time for me in the mid-'90s. i was killer -- look at me on twitter. you can imagine me in a chat room just -- just wrecking it, so -- >> camech age. >> shout out to aol instant message. we'll miss you. >> you feel me, jimmy. >> you're on fire today, josh. >> jimmy has never been in a chat room, come on.

>> up next, we're trading costco and p & g and kansas city southern alimrertcoins ntue right after this

>> you're on fire today, josh catalonian okay. all right. we're back on "halftime. i want to call your attention to the left-hand side of our screen that's the east room of the white house where president trump is moments away from holding an event to mark his panic heritage month anything newsworthy comes out of the comments he's expected to make just momentarily, i promise we'll bring them to you. in the meantime, we'll do a segment we call the missing link look no further. our stephanie link added two new positions to her portfolio all right. what did you boy >> capital one is the first one. i think that earnings are poised to recover as credit gets better, as charge-offs improve they have spent a lot of money in technology and investing, and i think that will lead to better efficiency the stock trades at ten times and the group trades at 14 times. i think as they show better earnings growth the multiple discount can actually narrow. >> and bristol-myers i added to that mainly because it's such a great strong

franchise, a cancer franchise but they have a great pipeline they have 20 products in phase up, and i think there's a chance that pfizer takes a look at bristol to buy them. there will be a lot of synergies. they share one of the biggest drugs that both of them actually manufacture, so i can see 4 billion in synergies just from pfizer buying bristol kind of a transaction. >> do you know that priss toll-myers got in that gap from when they disappointed everyone, dropped from 76 down to 6 had and for the next few weeks slid all the way down to 46. >> yeah, no. >> we're back at 64 into that gap. usually very bullish price action. >> well, that's good to know i'm long it, by the way. >> down 17% from its highs so on a fundamental base i can own it and the takeout makes it a little juicier. >> how real do you think pfizer's interest is i haven't heard anything about that i own pfizer they obviously have a really killer oncology program as well. bristol-myers does, too. there's overlap in a competitive

vain you talked about the drug that they co-managed which is eloquis on the blood management side is the there any meat on the pfizer takeover story? i don't mean to insinuate there isn't but what's your basis for it >> it's no secret that pfizer wants to do a deal. >> okay, sure. >> and most people expect them to do a deal after you get some sort of a tax plan announcement. whether we get one or not. they can do it, even without the tax deal. >> trades at a lower multiple than bristol. >> i think that they can make it work i think they have a lot of synergies. >> all right. >> we heard it here. >> it's not the reason to buy it, but it's certainly an interesting part of the story. >> let's -- let's do our trader blitz now. costco is the worst performer in the s&p 500 today. you own it margins, grocery wars. amazon. >> yeah. >> hello >> yeah. >> i own it. >> houston, we have a problem. >> and then the last time it broke i bought it in the low 150s and the stock rallied

that's what i plan on doing. let the dust settle a little bit. sure, the quarter had some puts and takes. i actually thought most of of it was really good. to do a 5-7 comp in one quarter. margins were flat, and i just think the bears are jumping on this because it's easy toe do it i'm not saying they have a reason to be cautious but i don't think their business falls apart. grant you, the conference call was horrible, horrible two hours. two-hour conference call. >> that's what cramer was saying today. they didn't do any favors. >> a shakesperean tragedy. >> a very excellent management team and they do have a great franchise so you let dust settle and low 150s. >> would you do me a favor below 150 put in a stop on some of that position because i've got to tell you, this has been in a really great uptrend for a long time and i feel like that's a little by the do or die. if the buyers don't come back at 150 which they have before, it's

not that these magic numbers are like, you know, take them to the bank it demonstrates a sentiment shift. the usual suspects who like buying the dips on costco. if they don't show up in the area where they do, where that would kind of say maybe there's a different feeling about this name than there was prior. >> there's no doubt that you're seeing multiple contraction but you're talking about renewals falling .3 of a percent in a quarter. membership growth per store. .2 of a percent. they are not getting any credit for the good but getting all the credit for bad. >> and bad that hasn't even happened yet. >> a 7.1 comp in september is exactly when whole foods and amazon went to town in their merger they close it had and they did all these things to get -- oh, by the way, store traffic at costco is at 5.4% in september it's not like doomsday for this company, and yet i think the stock is trading like it at this point. >> let's talk navistar, those stocks on the rise after better

than expected truck sales. it's a modest bump, jimmy. basically flat. >> look, i don't particularly like the multiple here around 22 times forward earnings, but you've got to acknowledge that the ism manufacturing survey and all the fed regional surveys are saying that there is manufacturing growth which is going to go to navistar. the other thing that you've got to consider is navistar is come out of a horrible period a few years back they had an epa problem with their engines and their sales went down 20% and the stock underperformed mightily so it's recovering some of that. i still don't like multiple but apropos of everything that we're talking about on this hour, this stock is probably going higher. >> kansas city southern shares are down josh, you own it. >> yeah. it's been a strong stock look, this is a name that had resistance historically at about 100 bucks, broke above and ripped right to 107.5. it's retested a couple of times. you know, this is a pretty, in my view, low risk-reward trade the stock goes in just below 100

which is the prior resistance and now it's support the buyers don't come into the 100. sentiment happens shifted on that name and can you hole above that level. >> do the rails reserve? cramer raised this talking about the transports and the great move up. do the rails deserve to move up? >> rails are very specific, believe it or not. they are not ma monolithic story. rails are very heavily dependant on coal in the northeast and then something like ksu which essentially is a play on trade with mexico, and i think one of the reasons that it had such a powerful move was because how many people were betting that trump was going to do something bad as it relates to companies that are doing cross-border commerce so that didn't happen they don't even talk about anymore. the right wing pundits are now referring to the wall as a metaphor so i wouldn't worry about that i think you can own this name. i think it has the ability to buy back more shares and the company is is in great shape the risk if you're a short-term trader just below 100, you're risk 3% to potentially make 20.

>> yeah, erin, stock energy. one of the spaces that hasn't had a good week. >> worst performer on the week from a sector basis, and i think the challenge was a couple of thing. on the structural perspective, talked about it on the show before you've had greater move away from energy dependence so there's structural pressures but on a structural term basis and what's driving the stock is first lit dollar has been strengthling over the last couple of weeks in mart due to better economic growth in the u.s. and in part due to some optimism about a tax plan. stronger dollar means weaker energy that's been the primary driver and you had the fact that any time energy gets materially above $50, you start to have new supply coming online on the shale gas and that puts downward pressure on the underlying commodity and thus on the underlying equities, so i think you, have you know, a real problem here any time we get materially above $50 barrels of oil you'll start to see supply coming on.

this is a range trade. i don't think energy equities are going anywhere fast and one of the reasons we're not overweight them right now. >> pete, judgment day is coming. the p & g proxy battle peltz was on the network today talking about it >> yeah. it's pretty incredible, isn't it he's actually come out and they say they have lost his soul and yet he's willing to work with david taylor i mean, it's going to be very difficult, and then you've got meg whitman out there saying this is not the right time so there's obviously -- you know, he's tried this many, many times. many different companies he's been very close he even said that. >> proxy service, if another one came out today another one came out today. >> yeah. >> the pen shon fund calsters was out today and glass lewis says yes, peltz. iss says yes, peltz >> you know -- >> we'll see what happens. >> it's great to see that he's getting that kind of backing i think the interesting part also is that they have done very, very well. this isn't like a company that suddenly has been just absolutely getting crushed to

the downside, judge, so it's interesting that he's getting as much backing as he is, and he's put out sort of an interesting plan to reduce it to a couple of different segments rather than as many as they have got i mean, it's really interesting. it's been fun to watch, but i'll tell you what the stock has performed extremely well it's not that far off of the highs which were just actually on september 20th so it's interesting, but will this really make a change i think peltz always can make a change if he's able to get on to that board. >> yeah, all right we're tracking are the traders coming up in the halftime quarterly report jim and josh, you're up to date with a few of their wins and losses from q3 first though, a check on the s&p sectors. s&p had an eight-day winning streak will it be snapped today a long way to go got four hours anything can happen. a little less than that. s&p right now down 5.5. >> this is actually better id. it close quietly on a >> breathe into the weekend. >> we don't need to rip into columbus day you too, unnecessary er visits.

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>> not quite overboard, this thing has a lot of room to the upside the buyers are coming in have to f vociferously i would not want to be on the other side >> we'll start with josh on the call of vmware, up 16% since then, what do you do, stick with it >> purely a technical call i know what the company does, but if you told me they also make pizza, i wouldn't know the difference this stock consolidated from january 2017 into the summer you had two consecutive bets up. that's an indication of buyers coming in with way less sensitive than the price they were prior and you continue to break out here so look, 111, i would say with it. >> better ingredients, better pizza, vmware. good tag, right? >> look, by the way, don't give me credit for this, because the entire technology stock market did what vmware did. they are all doing this. and they won't all end nicely.

this one, i think, looks good still. >> he's very smart he's talking very long about the positive side to the losers. >> give me fireeye fireeye is up 19%. >> here's what you do, stay with it, all right? because the things i said before are still true fundamentally, the cyber security threat is greater than it was when i spoke about it so, of course, that's going to power the stock higher plus, it's turning profitable after a few years of losses. that's going to gain attention stick with fireeye. >> so we highlighted the good, not all the picks worked out let's go to a commercial break >> it's bringing massive multi-year resistance as i'm talking. and this has been a long-time coming if you are in it, i would not get out of it. i own the stock and am not a seller. >> i think you're buying and holding it here going into the iphone 8 hype picking up over the next couple of months. all right. broadcom, jimmy, we're giving that to you down 6%. not a massive move >> well, looking at this market, it feels like the complete

loser. >> apologize >> sorry, listen, the sector, you know, the chip and the component manufacturers for iphones and other smartphones. >> why hasn't this -- >> this is a schizophrenic sector that trades with all the news that comes from apple. >> oh, the chips have ripped, why hasn't this? let me rephrase it, what is wrong with this one? >> nothing is wrong with it. this stock is a moneymaker from here on in down 6%, don't worry about it. this and the whole sector is fine to own right here. >> okay. these are the sector schizophrenic, now it is good to own? >> it is schizophrenic, but the whole sector being -- >> jimmy >> i'm being very consistent in what i'm saying here, scott. let's go to josh >> you're going to merriam webster for consistency's definition josh jetblue, 19%, this one has flees. >> it dead break out after i said that and fell apart

these are facts. >> that's it >> i'm still in it i'm not happy. it's not that bad. it is at 19.50 i'm not getting out of it, it's okay, but not technically looking as good as it was. it is certainly not something to be rushing into. >> we have to run. three hours to the close we'll do final tderas on the other side of this quick break next on "halftime. ned? i was having a good round, and then my friend, sheila, right as i was stepping into the tee box mentioned a tip a pro gave her. no. yep. did it help? it completely ruined my game. well, the truth is, that advice was never meant for you. i like you. you want to show me your swing? it's too soon. get advice that's right for you. investment management services from td ameritrade.

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new markets born where they weren't before. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. we are back, time for final trades erin brown, you are up first. >> i love the financials by xlf. lower high employment, lower fed growth it is going to continue to move and rates will be higher so financials are good. >> all right keith majerian. >> great call, erin.

on top of that, facebook i think this stock goes to 177 not too long from here >> we'll see you on the other side of that jim. >> crude is going to break out and go lower and along with it the xle. >> and momentum, lit >> and jimmy, stay out of the chat rooms this weekend, all right? alb by the dip. >> oh my goodness, okay. have a great weekend "power lunch" starts now thank you, i'm brian sullivan here's what's on the friday menu, despite the hurricane hammer, there are job signs everywhere that the economy is expa expanding. do you doubt it? we have ten ways to prove it and speaking of storms, we are bracing for nate the gulf coast getting ready for the third hurricane in just six weeks. and the brains behind the new netflix documentary "wasted" are here we'll take you inside the scary stats of just how new billions of dollars of food americans throw away every year. "power lunch" begins right now