tv Fast Money Halftime Report CNBC June 3, 2019 12:00pm-1:00pm EDT
as well. >> it goes back to destiny's child's heyday so i appreciate the metaphor there so certainly services expected to be front and center today one to watch especially when other names in the big tech universe are trading so much lower. >> and music is beyonce if that happens. let's get it to the judge for the half >> jon, thanks i'm scott wapner with the dow on a six-week losing streak should investors prepare for a major june swoon it's 12 noon this is "the halftime report." six straight down weeks for the dow. four for the nasdaq, s&p and russell. today, what the bulls are really up against plus, picking through the carnage. apple is 25% off its high. alphabet down 20%. amazon 16% at what point is it time to put some money into these great american success stories the investment committee is ready to weigh in. the "halftime report" with scott
wapner begins right now. >> welcome good to have you with us on this friday joe terranova, jim leventhal yana barton from eaton vance the first trading day of june after the worst may in nine years. investors still sizing up the possibility of those new tariffs on mexico, the unsettled trade talks with china, big wall of worries. joe, this day started out pretty good here we go back reverting right to where we left off may >> rightfully so we've had a sell-off in momentum equity names and that continues especially today listen i got stopped out of amazon in the last couple of days. raised a significant amount of cash, which i wanted to redeploy into the marketplace i did that i went in and purchased uber i thought the expectations were very low for uber. the earnings results not that bad. key side technology, you and i talk about, that's 5g enterprise
play redeploy capital there and the smh which i trade around quite frequently, i see the sentiment is very depressed there. for a trade, i picked that up. >> that sounds like offense to me >> i want to play offense here for a tradeable bounce not on the belief that we're going to take out the highs or any of these grand expectations we have but there's a lot of pessimism rightfully so given the tweets and headlines of the last couple of days. there's a lot of pessimism because i think the economic contraction outside of the u.s. is gaining significant momentum. and i think tomorrow you are going to get evidence of that when you see if the reserve bank of australia cut rates you have an economy outside the u.s. that's weakening significantly. they're exporting the deflation here nothing to get very excited about. but to your point, i'll play a little offense here at the beginning of june on some trades >> you may get a bounce as joe said, but can you get over what is a wall that seems to be growing higher if you will that's how we built it today that we want to show you
all the things in front of you, as we enter this new trading month. we call it the wall of worry nothing new to you but here are all of the issues these concrete blocks, if you will, that investors have to somehow get over you have the inverted yield curve, the fed on hold while some are talking about the fed needs to grow rates. the stock slump itself falling yields high yields. how are we going to get over that >> the short answer is, yes, we use that exact slide in one of our focus growth strategy. bottom line is equities always persevere. on average they've been a great place to be. i think it's difficult to argue against the macro headwinds we're fighting but with all of that, we have to take a step back and realize that this happened very quickly. and just like that, we can go the other way. so i think we're going to take a step back and not worry about what might happen on a trade policy front and focus on the micro.
and there's a lot of disparity and divergence happening on valuations health care, communications services, pockets of industrials are looking very, very good if you take the long term >> why sentiment feels it's growing negative by the day. today bank of america cuts their earnings forecast for 2019 to 166. you want to put a 17 multiple on that, you go 28, 22. they cut their earnings estimates for 2020 to 176. that's not fantastic rbc's says you could go down to 2650 this summer because of all the trade uncertainty. and we can get to more things mentioned elsewhere on the street what do you do with those? >> i think caution is appropriate. i tried to play offense on friday into the rebalance. and i got stopped out of things quicker than i've ever got stomped out of anything. last week i sold facebook. very few things that there's bipartisan agreement on, and
regulating the internet seems to be one of them and then after the pelosi thing, just said, okay, i've had enough i sold amazon this morning i shaved google. >> you're going full-on bunker mode you were negative last week, right, to end the week now you're selling some big-time stocks >> those were not core positions. google was alphabet was i shaved it. the stock has really done nothing in a year and then a quarter which i thought was okay, but i was in the minority. everybody else thought was poor. you're coming up in front of this potential antitrust issues. if you go back to what happened in europe it was just fine it's going to be more than that. it's bipartisan agreement. so i just don't see what's going to make me optimistic. right now, mexico -- mexican tariffs not occurring is the base case. >> at what point does the wall that we made that investors have to consider become
insurmountable you get to a point where, how can you get over some of these issues and some of these on this wall here may get more precarious they may get worse >> to joe's point, we've got declining economic momentum throughout the world i think you'll see that in the u.s. because for the first time in this administration, there really is some doubt about if right things are being done. the communication. it seems like more knee-jerk and more desperation so, look i think your view for what you do is absolutely correct for what i do, you know, it's a different type of mechanism that i have to employ to look at risk going forward. i think i'll get a better point of entry >> last time you were here, you were underweight u.s. equities you remain that way today? >> still very defensive. still underweight. and one of the things you mentioned, the note the bank of america published was interesting because one of the things they mentioned in the note was since trump's may 5th
tweets in which he raised tariffs on china, you haven't really season any cone census changes with regard to earnings estimates for the s&p 500. earnings are pretty flat since may 5 ppt you've had increased tariffs on mexico, on china. president trump over the weekend was also toying with increasing tariffs on india so you've had him now become very -- on the offensive with respect to increasing tariffs, and yet consensus estimates haven't increased. specifically, you haven't seen any earnings degradation or consensus degradation in semiconductors or industrials, two of the sectors hardest hit so i don't think that people are appropriately discounting, still, in their estimates, what the actual impact from tariffs can be add on top of that increased headwinds from the global economic trajectory and you're still in an environment where you don't want to be taking risk until some of that uncertainty clears >> that says aaron brown think
things are too complacent. you have all these headwinds there. bank of america says they're below consensus by 1%. it's not a small amount by any stretch. but is it time to face the music? >> yeah, it is let's lead with the punch line yes, we are too complacent look at the 166 number around this time a year ago, that number was 180. it's about 8% off of that. that's a big reduction we're no longer talking about a second half recovery so what you've got right here to start with where joe started us off. you should have a tradeable bounce the put call ratio is too high after six weeks, historically you get a rally here but i think that trade bounce is going to be very small i still have a bit of cash here. i think we're being complacent i'm going to nibble at spots where i see companies with hard assets trading below book value. this is classic value investing. something like a marathon petroleum refinery that is hardassets buying that
at 90% of book value i'll take that as a long-term investor but i do think that wall of worry you showed, scott, you can't get over that. you need to take some bricks out. and the biggest brick is a softening of the rhetoric between the u.s. and china that has to happen that wall is way too high. >> you'll not even get until a week from today is the prospective day you'll get the tariffs of 5% on mexico. question is, are you -- can you do anything in the market between now and then that only exacerbates the trade issues that currently exist. >> so to steven's point, the market expects that those tariffs never are really actually implemented i still believe -- >> that goes back to the complacency thing. >> i agree with everything that's been said here and, yes, a tradeable bounce, very small one. >> i think it's two days >> i'm not making a -- i'm just trying to find -- >> it looked like it was going to and then it's all, here's what you've got. >> what's important to try and do, if you're getting stopped out of a sizable faang like i
am, amazon, do you sit in the cash or redeploy it? you try to find opportunities where you can significantly outperform we keep talking about president trump's tweet on may 5th as being the top for the market the top for the market was the fomc meeting where the appearance was jay powell took away from the market the chance for a cut in 2019. >> some pointed to the video of kudlow saying the economy is killing it >> that was may 3rd. >> that was the most recent top. >> you and i have talked about it but i will say this -- >> that literally was the top. >> let's talk about the events of that week and where was the 10-year? 255. the ten-year today is at 2.11. >> do you know how low jpmorgan thinks it's going to go? did you see their forecast today? it's unbelievable. they take their forecast down from 2.45 to 1.75. and i think they are right to do that because i believe there's
damage that's being done by all of this outside of the u.s and there is such a significant contraction. we talk about a german ten-year which is now negative 20 basis the impact, what's going on overseas, i don't think any more we could dismiss that. and that is going to be exported here and i think the market, i think john mentioned this, najarian. the market is screaming for this >> you take a look at the economy. you keep saying, look, it's okay it's okay. we've seen some minor hits in there. but at what point are you in a tailspin where you can't reverse it >> to your point, here's words from morgan stanley's mike wilson today with the internals of the market much weaker for months we think last week's break was inevitable and that may create negative price momentum that's hard to stop >> that's true in the economy also so at what point does confidence get hit to such a large degree and the mexican tariffs were so
damaging because that brought it over the edge because now you're dealing another front. you've damaged all these relationships. india. they're saying, what he did was take it off the rev rential list the markets are closed how many fronts can you open fights on and still keep the confidence of ceos that have to spend money. >> equities are a discounting mechanism. they're obviously sniffing out all of these uncertainties we're living through this is a perfect example where i fear that i'm the only bull left standing, but if i tell you the statistic that currently almost 50% of the s&p 500 constituents are yielding a dividend yield greater than ten-year treasury, if the earnings yield on the s&p 500 is greater than 6% and rising every moment, there's definitely an opportunity to take place here and while tactically it feels better to be out of the market, the math starts working against you. if you have 20% decline in some areas of the mark eyou need 25% to make it up to even.
and that is very doflt do if you are going into safe places where you haven't witnessed a decline. >> one of the problems is areas that were good momentum plays are all but gone >> right >> look at facebook right now. we had that conversation right now. facebook is down 7%. >> the government is opening a probe into them. >> just like that. >> glad i sold last week it's difficult to sell but if i said to you in 2008, we're going to go through a ten-year bull market in stocks we're going to go through a ten-year bull mark net the economy, you'd have been skeptical. that hasn't ever been done before so i think you have to throw out the old playbook with 50% of stocks yielding above the ten-year that's been no protection for -- >> you don't think we'll be talking about facebook and amazon ten years from now? >> i'm not saying that i'm saying at a lower valuation -- >> the next ten days, the next ten weeks -- >> i'm sorry to cut you off. nasdaq's barely above correction level, right, and you've had
this pullback. facebook among the stocks leading to some of that damage let's get to julia boorstin who has details on why facebook took that sudden turn downwards >> facebook is now down about 7% on a report by "the wall street journal" that the federal trade commission will lead an antitrust investigation into facebook under an arrangement that gives the justice department oversight of alphabet's google as facebook will be focused on and when it comes to antitrust by the ftc the ftc is already investigating facebook when it comes to violations of its privacy agreement and the ftc is expected to fine facebook $5 billion for that but this is really the stock taking a move lower now down about 6.3% on the understanding that the ftc secured the rights to begin investigating how facebook, whether facebook is engaging in any monopolistic practices. so the ftc taking various
different looks at potential violations of different rules that facebook may be engaging in >> julia, thanks for that update yana, you own some of these stocks >> we do >> ftc, doj possibilities with alphabet what do you do with these now? >> listen, this is obviously a headline risk and it's difficult to argue against that. but i would ask, what hasn't changed in the last couple of months and that is we're still in short supply of growth and these companies are growing their top line in excess of 15% to 20% and where we're talking about slower economic growth backdrop, i think these could potentially be those investments that you should invest in and hold long term, irrespective of the short-term headlines >> even the googles, the facebooks, the amazons google is one of your largest positions. >> secular tailwinds, right? you talk about search, advertising, autonomous vehicles, all these sweet spot of where the economy is going and these guys are disrupting
that i think there's an opportunity there. and again, i don't know what's going to happen in the next three weeks but again, what is going to happen in the next three years, these guys still have the headline of top-line growth and earnings growth >> the government is shooting itself in the foot i'm not saying the executive branch, legislative branch you look at the variousfines and actions taken. qualcomm one of the telecom leaders i'd say the leader in 5g and this ftc trial from january utterly cut them off at the knees. i hear what you're saying about growth but the problem is that same thing could happen to a google could thoop a facebook amazon is down in sympathy on this >> they'll pay a fine. it would be the more likely outcome. >> that would be great that would be great. pay $3 billion, $4 billion, $5 billion and move on. >> if i told you that was going to happen, $5 billion or whatever the number was, 3, 5, 7, 9, does that change your outlook for the stock at all >> oh, absolutely. if we knew today that's all that it was, that would be great.
the problem is, we really don't. and there is evidence, you just have to look at what happened to qualcomm two weeks ago their business model just got eviscerated by a court verdict that was brought by the ftc suing them that is what can happen. there is a real-life example bad things can happen. i hope it's just a fine. >> let me go back to julia >> can i say one more thing? >> you can wait. julia just heard from facebook >> i reached out to facebook about these reports asking for comment. they don't believe they'll comment on this, but they are going to be checking to see if there's anything additional to add. in the past, facebook has said they would not comment on that ftc settlement about privacy, but i think it's really important here to look at the fact that the ftc has already spent or a year investigating facebook's violations of its privacy agreements and looking at where facebook has fallen short when it comes to privacy the fact that they are going to be adding an antitrust examination to that really points to the fact that we may
see far greater scrutiny from the ftc in terms of what kinds of commitments they may try to get from facebook, in addition to just that $5 billion fine so we do know that the ftc is going to be fining facebook when it comes to that privacy issue but if you look more broadly, as they add this antitrust piece to that, are they going to be forcing some sort of major overhaul of the way the company is run and are they going to be connecting privacy violations with potential monopolistic activities, and how do those things tie together? >> julia boorstin for us in los angeles. finish your thought. >> we're in a trade war that has philosophy behind it of who is going to be the superpower the engine of the u.s. being the superpower is the profit you're talking about. chinese look at it and say democracy has all its benefits but we'd rather have this totalitarian regime. we don't sue ourselves and the
biggest soldiers we have in this corporate fight. >> there is a big risk here. and we have to decide as a country, whether we want to go down this road >> what do you mean? we've been down the road before? >> unfortunately, i'm old enough to remember what we went through in ten-years with microsoft. if you think about 1992, the beginning of microsoft to the settlement in 2001, the biggest negative is it put microsoft's hands behind their back in terms of innovating. and you don't want to create a scenario where we're doing that to facebook, to google, to amazon when they are the economy right now. do we really want a protracted fight with these mega cap technology names that are driving the economy and the innovation is stripped away? >> let's not forget when microsoft went through that period of the stock doing absolutely nothing >> right nothing. >> that was part management and -- >> still >> that was a big overhang on it but -- >> this could last for, i don't know, for who knows. >> right
>> headline risk >> the argument is it's logical. but the issues with facebook and google and amazon are political. and as we go into the 20, you know 2020 campaign, politics are going to trump fundamentals. so i just don't know how you can take a look at those companies today and say they're going to be the same companies in ten years. we don't know how the business model is going to be impacted. >> i don't disagree. >> we'll get all the reports out. okay, it would be great if you break up google, right like i was a tax attorney working on the at&t breakups >> maybe the point that risk is worth taking because this is where the long-term growth in the economy is >> and the fact that the second half, we're talking about earnings right earnings are a leading indicator to price we're concerned about the fact we're expecting in the second half earnings to appreciate by 5%, which is questionable. totally understandable but i ask you, which companies control their own destiny as it relates to cyclical recovery that you were hoping on that is not coming through versus a
secular one. that's all i'm saying. >> but i think this actually calls into question whether they do control their own destiny if they'll be under increased scrutiny if they'll become more regulated -- >> and that's valuation, right longer term, i think -- >> but what valuation multiple do you apply to a company that can't grow at the same pace because they can't innovate to the same extent because potentially they're under -- >> right now these companies are growing their top line in excess of 17% to 20% and they are trading at that multiple maybe it's lower, but it's still relatively better than the rest. >> you want to hide out in apple these days $175 is where that stock is. you know, that was one of the concrete bricks in our wall. >> i raised some cash. i could have bought apple. i made the decision not to buy apple. i feel as though it's too exposed to the headline risk and i still believe it gets weaponized >> exactly right >> i don't think it gets weaponized by china. here's why they've got so many jobs in china. if they go after apple, which is such a huge -- >> we've discussed that.
it's the cut huff your nose to spite your face argument >> they can do it with others. they picked fedex. that's not hiring tons of people there like apple that's not saying to others, don't put yourself -- >> where are you going to hide out in this market >> go after apple from an antitrust standpoint because it's such an ecosystem so maybe they are the next start. >> i think the point that yana made which i agree on strongly which is that look for secular growth, not cyclical and companies that can do well in absence of strong gdp growth are the stocks you want to own so there are sectors throughout. there are stocks out there and segments of the economy that do do well but you really to to look away from cyclical growth and look for pockets of value >> i'm going to -- not disagree with you but add an alternate viewpoint. you'll find growth hard to come by with the faangs under the pressure we're talking about
continuing with the marathon petroleum idea i like buying them well below book value goldman sachs at almost 10% off tangible book value. it can languish here for a while. but when the economy regains its footh, not only do the earnings pick up but you appreciate to a premium over book value. that's the sort of place i'd like to hang out why don't we get into a reits or utility. getting these at discount to book value works for me. >> i particularly agree with that safety is extremely expensive. you're taking a different type of risk. reits trading a premium to the market health care is a perfect opportunity that does have a lot of hybrid characteristics. there's a lot of innovation. great data coming through there. we've got aging demographics, over 10,000 baby boomers turning 65 on a daily basis. they'll be consumers of health care that's a perfect opportunity
within med devices and other areas. >> that's one more place i did add. you know, to me, it's safe and -- safe is kind of an arbitrary word, but it's been beaten up dramatically more so than a lot of other sectors. and i still believe in biotech i still believe in the innovation there and i believe the growth >> do our cinderblocks get knocked over by a fed cut or the trade deal >> right now -- >> that solves everything? >> no. >> fed cut their three rate cuts priced in to the market between now and a year from now. the market is anticipating a significant path for the fed to start cutting rates. that's why you saw markets stronger, although they reversed course after the meeting you saw the cut earlier because of the anticipation the fed will be cutting rates remember, until you start to see the fed cutting rates, i think the mark set is discounting too
much, too soon >> you said if the fed cuts rates, it's not going to be good >> right >> do you still hold that view >> i do think you get a short-term popin the market, even though it's well discounted but with money being so cheap, free actually, if i give the german government a million bucks today, in ten years i'm getting less than a million back money is just -- you can get it anywhere >> the fed's got an easy -- >> the nasdaq is now in correction >> but let me finish the point i just don't think lowering interest rates by 25 or 50 bips is going to do anything. the fed has an easier path out of this. they don't have to make the cut. they just have to say something. hey, we're alive to what's going on in the world of geo politics and trade issues if they just do that, put that out there that will give the markets the feeling that the fed's got their back >> just so everybody is aware. you see what's happening with
the nasdaq lows of the day. now we're officially in correction territory on an interraday and closing bases. stocks like facebook took a dive shortly after we came on air google has been under pressure facebook is at the lows of the day by some 8% or so joe? >> i think steve liesman presented this last week he's right the federal reserve in june gives the market a rate cut and then president trump goes to g20. and everything is okay with china. that's not a scenario that i think chairman powell -- >> well, because maybe the economy is slowing regardless of the trade situation with china >> this is the hard part >> manufacturing data today was weaker so did we need the -- >> did we need the december hike are we paying for the december hike >> the fed made a mistake by -- >> in retrospect >> and what we're doing right now with the trade dispute, are we slowing the german economy
into a recession right now that we'll know about six months later? probably >> probably. >> see, if the fed comes out and said, you know, we're aware of the trade dispute, geopolitical, that's not what i want them to say. i don't want them to say we're aware of the trade dispute i want them to focus on the economy and everything else. otherwise, they become traders >> we're at the lows of the day for the markets. let's take a quick break here's what else is coming up on the "halftime report." the call of the day comes from the cloud is a storm front moving in several big names set to report. plus, meg terrell at the big cancer-fighting cancer >> we're here at the largest cancer research conference we're hearing about some of the progress and hardest to treat cancers. that's been sending biotech stocks flying. before the break, our data partners at kensho on how stocks fare in june over the last 30 years. the top sector -- telecom with tech and materials faring the worst. for more go to cnbc.com/kensho
the "halftime report" with scott wapner and the traders is back in two minutes see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade
you never know what life is going to throw at you. [ whimpering ] and from this point on. nothing is going to be the same. [ "all these things that i've done" by the killers ] no, no, no. this way buddy. no! liam's heads for comforts is in the 80th percetile. oh that's cool. it's a lot of head. it's like you're the dad and i'm the mom and we're in a relationship and this is our baby. [ laughing ] well... it's exactly like that! exactly! hi, everyone it's joe from the halftime report any questions for me or the other traders go to cnbc.com/halftime and we'll be more than glad to answer those questions. keep them coming thank you. go to cnbc.com/halftime or get us on twitter with #askhalftime
welcome back, everybody. i'm sue herera here's your cnbc news update at this hour. here's what's happening. afghan officials say a sticky bomb attached to a bus exploded in kabul killing five and wounding ten more. it targeted a bus carrying government employees a wave of attacks has rocked that capital over the last week. a swedish court ruling that julian assange should not be extradited to sweden for a revived rape investigation but he should still be questioned in the case while he is imprisoned in britain the ruling does not mean the primary rape investigation must be abandoned amazon is rolling out its free one-day shipping for prime members today. more than 10 million products can now be shipped it will be available nationwide with no minimum purchase required and ben & jerry's is committed to bringing cbd-infused ice cream to consumers if it becomes legalized at the federal level it's one of the active ingredients in marijuana the fda held its first public hearing on cbd-infused products
just last week that's the news update this hour scott, back to you >> appreciate it, sue. let's talk about another stock in the crosshairs today. jpmorgan is removing salesforce from its focus list. it's still overweight. let's be clear but the stock is down 3% it's had a big run no longer a, quote, table pounder. it's our call of the day yana, you own it they're not negative on it, but stocks have run and it's time to reassess where they've gone and what their valuations are. >> it's been a great performer it's a valuation call. sort of a chicken downgrade. if you think about where we're going and what this company has in terms of its moete, it's the leader in crm and where the cloud is going i think you stick with it. >> so they report earnings tomorrow, i believe. >> after the bell tomorrow >> this stock topped out in march. i like to always compare salesforce to adobe.
i think they are two quality names. adobe topped out maybe in late april. with salesforce you had significant outages in this quarter. how impactful? is that priced into the estimates already or do you think they could exceed that >> that's difficult to say but again, we don't trade around the quarter. it's difficult for me to say how the stock is going to react. but relative to the market, relative to the space, there's a clear leader and they have the pathway to continue to gain double-digit growth. >> what about some of these other cloud names in general whether, you know, it's time to reassess where a lot of them are, jim >> look, i still think microsoft is high quality. i don't think it's susseptsible to a lot of the regulatory issues we've been seeing where some of the other names we often talk about >> look at the declines today. you have a down day in tech, obviously, in general. >> you get some selling in the etfs triple qs.
>> but you do have commentary questioning whether it's time to look at valuations in names like this >> yeah. i mean -- >> it's more than just the activity of a day in the nasdaq. this is something that -- valuations across the board. >> she was stressing, where your going to go to get growth in earnings you are going to go to these names to get growth in earnings. and the only issue is, are they going to be in the crosshairs of regulators or other arms of the government some of them will be i don't think salesforce or microsoft or adobe or vm ware will be in the crosshairs. >> but the base case that you're making is that you have to find something to buy i can find cash. >> i'm not making that base case at all >> that's what i said earlier. where do you hide out? >> i thought i answered that >> to me, sales force, benioff is one of the best managers. i love what he does in terms of
his diversity moves, in how he treats his employees and the -- there's a pricing umbrella, a valuation umbrella to the market all those companies are going to suffer if -- >> box is down right now >> i shaved some microsoft it killed me and i shaved it from not taxable accounts because otherwise there's no point. just going to be down whatever percent. but i still love it. i just think there's a valuation umbrella and i think microsoft is one of the more attractively valued companies out there. >> where do you hide out i took that as where do you hide out in the cloud space >> i'm saying in general >> i want to make this point super duper clear. look for those companies that have hard assets, monetizable assets, trading below book value. i've got news. they're all over the place that's safety. >> okay. we're good >> i'm great we have unusual activity in the options market it's coming up next. pete najarian, well, he's found
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all right. welcome back to the halftime report the nasdaq composite is down about almost 1.5%. coming up on 12:40 eastern time, that means the nasdaq has now pulled back by 10% from its recent highs, official record highs. it's a condition some traders call correction. pulling 10% back from their -- again 10% from the record highs. facebook getting hurt here facebook shares off by almost 8% at this point here also checking out what's happening overall with the rest of the complex alphabet taking a hit. amazon netflix is only off by about 2% but the entire complex, facebook, amazon, netflix,
alphabet all hurting >> widespread ugliness pete najarian is in minneapolis for us pete >> good to see you, scott. i got k. webb for you. it's not a name that comes up a lot for us basically chinese internet you want to have a position where you have exposure to 10 cent and alibaba and baidu this is the place to be. that encompasses probably over 30% of what that index exposure is what i like to see, it was a $37 index back at the start of the year got up to 47 at the beginning of may. and then it eased back to where it is now. now today we're seeing the july 45 calls being bought. about 3,000 of those were bought very early in the day. right out of the gate. stock was trading or the index trading about 40.40 at the time. they paid 50 cents for these options. that's a really great risk/reward. gives you a little time. call it a month and a half i'll stay in these for about a
month. i bought these after i saw this. i love what i'm seeing here. if you want chinese exposure right now, this is a good way to do it without absolutely being in cone stock specific name. >> why would you necessarily want to have chinese exposure right now? >> well, because if something were to happen, now let's look back we're talking about this gives you exposure for about seven weeks, right so if something positive starts to work. and by the way, there have been days where we've been sitting on that desk where our markets are down significantly and you look at the fxi or any other chinese areas and see a little movement even into the green versus what we're doing. will there be some sort of a move at some point in time is there news that's going to be able to do ambiguity trade talks that may push this up? this gives you exposure to the up side over the next seven weeks. that's what i like about what we're seeing there >> you have an update for us as well >> i do. on thursday last week, we talked
about amd, the june 14th, the 29th strike calls trading for like 85 cents last week. they bought them again on friday the stock wasn't doing a whole lot. this morning stock pushed up and didn't quite get to 30 but $29.60 those options didn't quite double they got close you've got to be disciplined in this market. now, obviously, as the market has been volatile, we pushed back down. but use that discipline. you've got to keep an eye on things options double, you want to take half of that off, scott. the reason i say that is, then you've reduced that exposure to the money you put in is now taken out. and now you can play it from there. so you want to be disciplined at all times. discipline dictates action this is what was happening when this moved higher. now you've seen this pullback. i'm still holding on to half of my position. we'll see if we can break up into the 30s later on in the next couple of weeks >> appreciate the time, pete >> always, scott good to see you. see you wednesday. several big cancer-fighting stocks are on the move this
several cancer-fighting stocks on the move today. meg terrell live at the clinical oncology conference. >> more movers to the up side ought of the asco conference the first two are amgen and mirati they're working on the same target a protein which is considered sort of a holy grail in cancer drug development amgen up more than 4% adding more than $4 billion on the results of this early cancer trial with particularly exciting results in lung cancer mirati is up more than that. it's a much smaller company, almost a pure play in this space. it's working on the same target. people seeing this as a proof of concept for going after this target people are very excited about that next iovance it's a personalized immuno therapy. you take patients' cells out of their bodies they are multiplying them and giving them back to the patient. that stock up quite a bit on
advanced melanoma and cervical cancer we talked to that ceo this morning and some really interesting updates for them on the negative side, blueprint medicines is the main stock to highlight there. that down today on some concerns that their targeted cancer therapies aren't competing as well or might not compete as well with some from laxo oncology, the company acquired by eli lilly >> a lot of names for us to trade. weiss, you said xpi? >> it's just an index of biotech names. large cap. it's weighted. i like the sector. i still own xogenics i just don't want to dig into it when i'm not that positive in thehealth care.
>> i think that's priced in at this point in time since january, you've seen all these stocks in the pharma and biotech space just get decimated. i look at a regeneron down from earlier this year. that is pricing in exactly what you're talking about which is real but it's in there. >> and when you're talking about valuation, xlv which is the, you know, the pharma or the health care index etf is trading at the bottom of its range in terms of relative value range in terms of the s&p 500. it's also trading about 5% below its 200-day moving average i think when medicare for all really became, you know, part of the rhetoric for the democrats, that's when you start to see the health care area underperform. with joe biden stepping in having strong popularity, that dampens some of the concerns over the short run with respect to what the worst of fears could be for the health care sector. so i actually think that if you're looking to be, you know, to get long the market in one sector right now, health care is
actually a good place to be given how cheap it is. and given the underperformance >> i still own illumina. coming up, your viewer questions. they're coming in right now on costco, disney, andothers. we'll get to those names next. you have time to reach us as well go to cnbc.com you can tweet us because we're back right after this quick break kelly evans is going to tell us what's coming up on "the exchange." >> boeing ceo dennis muilenburg will join us in a live interview to talk about the company's efforts to fix that model. apple's developers conference also kicking off at 1:00 p.m we will bring you the news as it's out on that front and tough trade negotiators from the u.s. and mexico meeting today in an attempt to stall president trump's proposed tariffs on mexican goods we'll talk about what escalated trade tensions could mean for the passage of new nafta all that and more ahead on "the exchange" today. "halftime report" back after this ght it was unfair.
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change the way we drive from this day forward. mercedes-benz. the best or nothing. welcome back to "the halftime report. let's answer some questions now. a tweet from geoffrey, we appreciate that much what do you think of costco? >> i know it's expensive, but i think if you're in it, hold on it's hard to initiate a position here because of how expensive it is but think about this you have nowhere elsewhere you're seeing same store sales growth like this and there's a lot of talk we'll have a special dividend announced soon it's going to be wobbly but i think you're supposed to own the
stock if in it >> a tweet from chris. is it safe to buy disney at these levels >> yes it's trading at par with reits and the world is going to be a different place three to five years from now you've got a diversified media company. it's three different channels. espn plus, disney plus, and now hulu so there's a huge opportunity there. but again, investing for the long-term. >> all right stocks at a good one 20% year to date l ke b for all your questions. we'lta areak and come back and do final trades. has been excellent. they really appreciate the military family and it really shows. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. it was funny because when we would call another insurance company, hey would say "oh we can't beat usaa" we're the webber family. we're the tenney's
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want to give you a reminder that man right in boeing ceo is going to be live in about 30 minutes here on cnbc do not want to miss that let's do some final trades >> fortune brands. bright spots of the economy. >> i'm selling emerging markets eem. >> goldman sachs. >> "the exchange" begins right now. thank you, scott hi, everybody. here's what's ahead today. a live interview with boeing's ceo dennis muilenburg. his word to investors as the stock continues to fall. also tim cook is taking the stage. the apple developers conference kicking off right now with that stock and a bear market. will today's presentation give investors a reason to jump back in we'll look and faang is in the cross hairs big time google, facebook, and amazon all sinking on reports of a regulatory crackdown this is pushing the nasdaq into construction today we'll get you the latest we begin with today's