tv Fast Money Halftime Report CNBC June 5, 2019 12:00pm-1:00pm EDT
framing a.i. i was surprised to hear dave say that the business behind alexa hasn't fleshed out yet it's really about building loyalty. >> fantastic stuff, john we look forward to having you back we're going to keep our eye on the walmart meeting, on oil at $50.93 let's get to the judge >> carl, thanks, i'm scott wapner as today's ugly jobs reading another sign the fed needs to cut interest rates as soon as possible stocks rising the past two days on those very hopes. what happens to your money if it doesn't happen it's 12:00 noon, this is "the halftime report. >> announcer: in two weeks, we find out if the fed will make a move the market is already taking sides and so is the halftime investment committee if they make a move, what will it mean for stocks the s&p and dow are 5% off their highs. the nasdaq, down more than 8%. the russell, 14% plus, another big voice weighs
in on a big threat for the market see what bank of america's brian moynihan is saying and the call of the day, one analyst is saying the 142% one-year run for this stock is just the beginning "the halftime report" with scott wapner begins right now. >> welcome it is good to have you with us on this wednesday and our investment committee at the desk today, jim lebenthal, the brothers najarian are here so is meagan shoe, the senior investment strategist at wilmington trust with us from d.c., the ceo of farr, miller and washington, and our economics reporter, steve liesman. you can see the markets making another reversal, down now is up 151. the s&p, nasdaq briefly went negative, now they're positive too. investors simply trying to gauge what the weak enshrinemeest adps for the economy, what, if
anything, the fed may be prepared to do about it. pete, you've got the best two-day gain in five months. >> yeah, pretty impressive >> is this all about expectations and hopes that the fed is going to cut rates? >> i don't know if it's all but i would say a great portion of it is about the fed and what they're going to do and jon's been talking about this rate cut for a while, we've been talking about the ten year getting closer and closer to 2% for a while as well, scott, so there's a lot of different aspects of what's going on that's very, very interesting right now i think the fact that there's also folks out there, there's been some murmuring at least about are we getting anywhere further with the trade deal. i mean, i think that's still a percentage of what we're seeing in this lift and i'll tell you what, yesterday it was all about the nasdaq getting slammed and then all of a sudden it -- monday, rather, then it pulled back and then all of a sudden you see it today it's as if those names can't get hit too hard because the buyers are ready and willing to go right back in there and start buying up the apples of the world, the microsoft and all the rest of those names. >> apple's having its best two day gain since the end of january. >> yeah. >> to your point, not all the
f.a.n.g.s. >> not all the f.a.n.g.s >> there's some ugliness there meagan shoe, is this all about the fed? >> the fed is an important part of the equation. i would agree with pete that trade is another very big part of the equation. we are clearly in a higher volatility period, driven by higher political uncertainty, but what's happening is that trade seems to be ramping up at a time when the underlying economy both in the u.s. and globally is a little bit more fragile than what we thought, maybe in the first quarter so we have this divide between what we're seeing in manufacturing and services i would say the ism manufacturing survey is very important to watch if you look at the export sub index as a leading indicator of that, it would suggest that we're going to be moving into contraction territory in coming months but we got the ism services today at very strong reading, about 57, which is consistent with gdp growth around 2%. so, what do you do with that
and i think that's what we're seeing with this back and forth in the market, the question is, is, you know, friday's labor market report will be a sign of how the consumer is doing. that's been one of the strong pillars that the economy is standing on. >> liesman, you had evans yesterday, you got brainard today, now the market seems to be pricing in three rate cuts. >> three >> by early in 2020. you tell me. >> no -- it's december, scott. >> by the end of this year so, you tell me. you talked to these folks all the time both on the record and off is the market offsides on its hopes for a rate cut as early as two weeks from today >> so, the sense i got at the conference was the market may not be wrong in forecasting a rate cut and that would come in the event of the weakening of the economy and probably an insurance cut if these mexican tariffs go into place, and i think if you got a big downdraft in the markets
the other sense i got was that the market is very aggressive in pricing in three rate cuts i don't think the fed is there i don't think the fed has a sense that that's what the economy needs. i think that there's some insurance or buttressing against downside risks but i don't think there's a sense that the economy needs a whole lot of help and i think meghan said it earlier, that the services survey was pretty good. look, the adp has another side to the story here which is that you had 271, 271,000 in the month of march, 27,000 in the month of april, you're running about 150,000 average so that's not too bad. if you get a 2% economy, i think you can get one cut out of it, maybe another one, but i don't think you get three and i think two is a stretch right now >> okay. >> from what i'm hearing >> you're telling me, don't worry, market, the fed's going to cut however, maybe not as many times as you think >> yeah, i'm not saying don't
worry, market, because i don't think what the fed is going to do is going to be necessarily enough if those mexican tariffs go into place if you have abiding uncertainty among corporate ceos about investment and about hiring decisions i'm not sure fed rate cuts are a perfect offset for tariffs on mexico and increased tariffs on china. i think they are an offset so i would say i'm not going to say don't worry, market, because i think there are major profit implications that those guys and ladies around the desk are better at figuring out than i am but i can tell you from a macro standpoint, you can get some fed rate cuts right now but you can't necessarily get three or a whole -- a whole hog rate cut scenario in the absence of a pretty major weakness. >> so michael farr, can you have another sustained rally in the stock market without the fed cutting rates? >> well, no. i don't think so no i think that the fed, if the fed doesn't cut rates, i think the
slowing economy and slowing gdp with the extra political headline pressure and particularly if these sort of one-off tariffs were to go into effect, no, i think the market would be probably very much sideways and probably lower. but that isn't happening we've seen the market be really volatile along with some political headlines. i think the fed's blinked. i think jay powell probably has made his second mistake and his fed leadership here. the first being when he said, you know, we're nowhere near neutral last fall and the market freaked out. i think he sort of came forward and said, we've got your back, market i think that probably is a mistake, a little bit premature, certainly stocks like it and when the fed guy has your back, i mean, you've got to own stocks >> the danger, i guess you're saying, michael, is that you have what could be a temporary shock from this tariff situation so the fed makes a move and then you get the trade issues resolved and then the fed's like, well, why did we do that >> you know, i mean, i think the fed has long said they're going
to be data dependent they've got to be more whites of the eyes they're going to be seen as caving but i think a little more pause, a little more patience, a little more discipline, perhaps, at least in their messaging. you get bullard and then you get the chairman back-to-back days saying dovish things, stocks are going to listen. so, you know, expect more of the political headlines, clearly, that's going to add to volatility but if the fed has our back, it can create a whole other set of risks >> but michael -- >> you got to own stocks >> michael, you'd be sitting here if he didn't say anything saying he had a tin ear. remember he was accused of that not too long ago for not listening to the market. i think -- i think what the chairman is saying makes sense, is that if you have a major downdraft from tariffs, then the fed's going to react i think that's right along with their mandate right there. >> yeah, i mean, i hear you, steve, but i think that if he said -- if he had said we are going to watch this very closely, there are risks and we are going to assess, i think
that would have been -- >> that's what he said >> well -- >> that's what he said he said, we're going to act as appropriate. >> no, when he -- i think he went a step further when he said we are going to continue to support this expanding economy >> fed's in a pickle, though, right? fed's in an undeniable pickle now. doesn't want to look beholden to the market doesn't look like it responded to the president and kudlow and scores of other people coming out of the woodwork suggesting that you need a rate cut >> right i mean, the problem you have, it's between a mexican rock and a chinese hard place, right? because you have -- >> well done >> you have the -- you have the june 10th tariffs going into place, the june 18th fed meeting, and the june 28th xi-trump potential meeting so that puts the fed in a particular place and i think what they're going to say in june, at least if i had to guess right now, in two weeks time what they'd say is we're watching this, attentive to
international financial two developments and trade issues and we'll act as appropriate i think that's the new phrase of the -- the m.o. for the fed right now. >> doc, we built this wall of a wall that shows you all these issues in front of investors is it just as simple as the fed needs to just come to the rescue yet again? the market can't live without the serum that the fed provides it all the time. >> we could have lived without the serum if all these other things hadn't perked up, scott i mean, but there's so many other things and you did a great job with that wall yesterday with the d.o.j. going after many of the big tech companies. >> it's like 15 things >> it's a huge wall. >> but it all comes down to the minute you take the proverbial punch bowl away, the market is fine for a little while, and then it gets on the fix and it needs a fix and when you can't give it the fix, everybody gets all upset. >> right, well, i mean, i said back in december, i didn't think we should go for another increase we did and it's not just the stock
market yelling, of course, at the fed. it is the bond market primarily yelling at the fed as we've been saying >> that's jim lebenthal, hands on his head. he's like, i don't know what to do i'm a value investor what am i supposed to do in this market got all these issues, farmer jim is standing there with his hand on his head. he represents the investor out there who's asking all those questions. >> well, so, all kidding aside, i'm thinking about steve weiss who has been saying this is a market that most of us are saying we haven't seen before and i think that's accurate, okay because we're toggling on trade issues that none of us have really dealt with. you've got to go back to the '30s to look at smooth hawley. i am not down on the fed doing what they did yesterday and scott you may remember on monday i said that the market would love it if he came out and said he's acknowledging the risks are out there. the market took that as catnip i don't think they should cut and if they cut in two weeks that's going to send a signal to the world that everything is
worse -- >> how can you possibly cut rates -- man, i don't know >> can i just give you the punchline here it's really simple i said this on monday too. it's all china these guys need to come back to the table, both sides need to come back to the table and start making progress. the problem is the market, the stock market in particular, has not exerted enough pain yet to get both sides to come to the table. that's the problem i think you need to see another 4% or 5% down in the stock market to get both sides back to the table. >> if you get the tariffs against -- on mexico on monday -- >> it's awful. and by the way, again, i'm not down on chairman powell because he's responding to news that came out thursday night of last week, friday morning of these mexican tariffs possibly going into effect. he has to respond to that. he didn't have that news before thursday night it would have been inappropriate for him to say what he said yesterday before friday of last week >> i agree i think that how things developed with trade is very much an important input for what the fed does with their reaction
function we talked a lot about -- >> you're not going to participate in the market at all until you figure out what happens with trade and then you have to figure out what happens with the fed what are you going to do >> i think you need to not chase this market. we're in a higher volatility market, which is going to mean you're going to have some bad days, and some good days we've moved our equity exposure to neutral that doesn't mean a band in the market by any means but when you have the political winds that are so pivotal to the underlying economic output and the -- and our economic assumptions, it's really important and really difficult to not be taking bets on the political outcomes. >> doc, you had apple at 182 now best two days since january, your biggest stock position. >> and what did i say a week ago, scott >> did you miss a gift at 170, whatever it got down to. >> in hindsight, yes every time a stock goes down that i didn't buy, i missed an opportunity. >> well, some were worried that it was going to go back to 150 >> if you remember what i was saying whenthese -- when peopl
were really against it, just a week ago, and you were pushing on jim pretty hard at that point too, saying, jim, are you getting in here at 177 >> i know i'm going to take it >> he said -- jim stood his ground and said, no, because it's still sloping down. that same day we broke 175, jim. that had been my target, i've said it on the show for weeks, that they bought the 190 puts and i said i'm not covering until we get to 175. so lifted the protection, didn't buy more, but lifted the protection when we got down there and yeah, i'm really happy that it's up $7 or $8 from that level but i didn't buy more stock. >> so, all right, i'll take it i got to take it >> forget apple. are you doing anything in the market >> i'm not i think we've had the tradeable bounce yesterday and today. you can already see things, whether it's apple or the market overall coming off slightly, and i think things -- this was just a tradeable bounce in a down market >> yeah, is it a phony bologna bounce >> i don't know if you'd call it phony bologna but i would say
it's tradeable >> yes but i think the trade's over, pete >> could be. i think you just have to be extremely nimble in the market scott, one thing we absolutely have right now is incredible volume we started off june great, 21.7 million contracts on monday, another 21.5 million traded on tuesday and i'm sure today is going to have some pretty niez volumes as well so the participation is there and you look at volatility where it is, you got to maneuver around jon was talking about these puts in apple there's a lot of different ways and i know you two guys being more on the fundamental side of things, there are opportunities to be able to cover or use or convert out of stock into these call positions and the rest of it, scott. that's why this derivative's market is so strong right now because it is the place to be, we're between that 15 and 22 like we were talking about, trading 17 to 18 on the vicks, wlfr it is right now when you're looking at that, that is creating opportunities every single day for a trading environment. >> okay, sure. >> quick one about the fed yesterday, we had mike mayo on
and i'm not going to talk about the fed with mike but his reaction was, when you see a tightening cycle end, which clearly, even if you don't believe me, that we're going to see two rate cuts and now as steve said, even three into december, even if you're not getting to that level, when you're at the end of a tightening cycle, it is bullish for banks. period, end of story, full stop. these guys do fine in that environment. mike's note was basically they're going to party like 1995 sorry, jimmy >> that's okay >> make it quick, i want to move on >> i'll make it quick. yesterday you got the catnip about the fed coming out and saying something the next catnip, the next set-up for the tradeable bounce is news that both sides on the china deal are going to talk again you have no plans for that right now when you get those plans, the market will trade up again >> all right well, as if there weren't enough for investors to worry about, add to the list, corporate credit with some suggesting a crisis could be in the future that's what noted bank analyst chris whalen told us right here on tuesday >> high yield spreads are going up we have a dearth of credit in
the nonbank sector, particularly i think of the unicorns like tesla that are assumed to have market access to fund their operating losses and then finally the mortgage space where i spend most of my time, they're not making money >> well, bank of america ceo brian moynihan expressing similar concerns during a speech at the economic club of new york saying a slowdown could get ugly for some firms mike santoli is here with more from the new york stock exchange michael, former fed chair yellen last october and then again in december, others since then, whalen yesterday, hoynihan now is this something to worry about. >> eventually it will be i don't think anybody's repeeled the credit cycle i see a lot of these comments as the standard gestures of prudence and awareness that in fact a lot is built up over the course of this credit cycle that could go wrong it's sort of like the to be sure clause things are fine now but, hey,
some day, this is going to be an issue. now, if it does worsen from here, obviously you would have to do nothing but look at high yield debt spreads, yes, leveraged loans are what brian moynihan was specifically addressing >> this is the guy that owns the market they own the market. bank of america. >> well, 10% market share and arranging these loans, they syndicate them and sell them out there. you can buy a mutual fund that has these in there and many people do. many people liked them when rates were going up but i think what i would say is the default rates right now are quite low so as things get worse they're getting worse from very positive levels, the default rates were higher in 2015, early '16 when that emergency bust happened so it's smart to be aware of it but look how high yield spreads trade relative to equities and that will tell you whether the stock market has its head in the sand or not. spreads did not improve as much as you would have liked to see when stocks were at their highs. that was a little bit of a negative indicator, negative
divergence there when you were at the highs but yesterday, credits did great and you had this very strong tightening and high yield spread so it's something to worry about i do think a lot of big companies have taken advantage of the fact that yields themselves have come down a bunch, it reduces the debt burdens that refinance, they term out, it seems like we're going to hit this wall of maturity, people have been talking about this for, i don't know, six or eight years and it keeps getting pushed out the market remains open. that's what happens as the cycle keeps going on before it crashes. >> the key thing you say is right now. it's not an issue. and no one's suggesting that right now it is. no one foresees -- >> if you chose to worry about it, what are you doing about it right now? >> exactly that's the conundrum i don't know what you do >> it's not as if i think people -- look, leverages loans are $1.2 trillion or something like that. maybe there's another $2 trillion to $3 trillion in high yield debt traded bonds that are speculative grade those are big numbers. they're not big numbers compared
to the trove of assets that took the economy down and almost, you know, took us into a depression so i think you have to keep it in scale i always say, monitor the markets, you know, stay involved but keep expectations low. >> it's no different, i suppose, than greenspan saying irrational exuberance and the market going up for another four years before it imploded. >> yeah, right, three and a half years, something like that it's true, you know, and i think this is a little bit more well defined in a sense i mean, you can see as companies get into trouble and they can't cover the interest payments and they can't refinance and they get play clockblocked out of th, that's a process that happens and i think that you can kind of watch it as it happens and see if stocks are ignoring it or if they're not. >> jimmy, the notion is if you get a move higher in rates, and you get a further move lower in the economy, you have a potential issue of companies being unable to service their debt you have what whalen suggested could be a high-profile
bankruptcy as that moment that leads to what he thinks could be a credit crisis, his words, not mine >> yes, those are real possibilities. i want to be careful for all of us i think we'll agree that painting a picture of where a particular asset class or the economy is going to go from here is dangerous okay but i think mike just hit on something that's very important for in this high uncertainty realm, what do you do? mike, i think what you said was, you got to stay involved and i agree. you do have to stay involved but what i also agree and i think meghan was saying this, you have to have some cash on the sidelines here, okay you have to be ready to pounce i sold some stocks, starbucks and qualcomm a couple of weeks ago. i put a little bit back to work in marathon petroleum, i've still got 15% cash that to me, scott, is precious and i feel a little bit stupid today, i'll admit it, by not buying apple at 175 on monday but i feel good having that cash right now for whatever may happen, whether it's a credit default cycle, which, yeah, we can paint that picture very easily but the flip side is you
can also paint a picture where you get a china trade deal, the economy picks up, and that cures all ills the problem being you don't know what's going to happen, so be involved, good word, mike, but also have some cash on the side. >> thank mike santoli for joining us for that conversation as well as we continue it, meghan >> the economic outlook, i agree with jim, the economic outlook is fundamental to that you can, you know, you should be watching the credit market we've been watching not only leveraged loans but also within the investment grade space, the amount of triple b bonds so just one rung above high yield, the risk is if you do have a slowing economic environment, some of those could trickle down into high yield, which is a much smaller market, much less liquid, and we also have a lot more passive vehicles now, so if you think about the passive etf exposure within the fixed income space, these are instruments that might only be able to hold investment grades so you could have some forced selling again, that's a negative picture, but the if your outlook
is that the economy's going to continue to expand, maybe at a slower pace but avoid a recession, it's not something to worry about or panic about yet >> just so i'm clear, it's not just our market and the bonds here that are screaming about these rate cuts, scott we've got over $10 trillion in negative yield out there so, in other words, it's not just germany and switzerland it's out there and it's rampant, $10 trillion in that how do we pull against that and hold our rates at a so much of a higher level i think it's just a normalization to pull us back down to where those are and that's one of those big pulls as far as rate yields going down. >> all right our next guest has some thoughts on all this. it's an exclusive interview, our bob pisani is live at the sandler o'neill conference in new york city speaking with interactive broker ceo thomas. bob, take it away. >> thank you very much, scotty and all the heads of the
exchanges and the onlyliine brokerage firms meeting here trying to figure out where's trading going and where's the business going in general. thomas, thank you so much for joining us 42 years as the chairman of interactive brokers, you're retiring this year, legendary career i got to start with the markets. ugly may, down 6%, a lot of outflows, we're getting reports about. you have probably the most active trading base of any of the online firms, your people do, what, 300 trades a year on average? >> 300 to 400. >> what are you hearing from them >> i don't hear that much as i see and what i see is that they are raising cash >> raising cash now? they're worried? >> yes >> are you worried >> i am very worried i would not go into this summer months with a long position. >> why is that >> because of the trade frictions, the political background, and the market appears to me to be very illiquid
>> does the tariff business concern you? you've spoken before about this but how do you feel about tariffs as a tool to effectuate either economic or political change >> i hope that the tariff issues with mexico are going to work out and mexico will reduce immigration and -- but china, i feel that the u.s. would be better off not making a deal with china because china is hell bent to dominate the world and if we trade with them, they will get there faster than without us >> better off not to make a deal >> better off not to make a deal on the long run, yes >> you mentioned the word, liquidity, again we have often debated how much liquidity there is in the market, particularly the bond market but you see liquidity you watch it all day long. it's your specialty. how do you feel about the state of liquidity, meaning availability to easily trade the market without dramatically affecting price. that's what i mean by liquidity. >> that's right. but look how much the market moves without a hell of a lot of trading, right
i mean, look at 2% yesterday and how much it went down in the week before. it just moves too much relative to the amount of trades. >> and why do you think that is happening? >> it is because there's nobody providing liquidity. liquidity traditionally is there to capture retail flow, but since the retail flow is being sold to high frequency traders, the limit or the providers no longer get to trade with retail flow and therefore it doesn't make sense to provide liquidity. >> but you don't feel high frequency traders provide real liquidity? >> no, they do not i don't think they do. not real liquidity >> they're a significant part of the market now they're a significant part of the market now they are essentially liquidity providers. >> they are 40% of the market but they are just trying to take both sides >> all right let me move on the guys have been talking about negative bond yields over in europe how do you feel about the bond situation? >> i think that the bond
situation in the united states that bonds are in a bubble two-year treasuries, for example, are 1.9%, at least they were a day ago they are being financed in the repo market at 2.4%. so you are locking in 0.5% low that cannot go on for a long time >> why are we having have effect >> people are speculating on coming weakness in the economy. i don't see that weakness coming i think the u.s. is very good. we can't hire people >> i agree with you. but there's global deflation in general and a lot of it is china when you can produce goods much, much cheaper, isn't that a reason why rates are lower >> you can produce them cheaper in the united states too let's bring it in here let's build more automation. >> how do you feel about how the president is doing >> i generally agree with his policies >> on trade as well?
>> certainly with china, yes mexico is -- i have some reservations, but i have to work my way around it >> well, the criticism here is, well, i thought we were having a deal we have a treaty that is supposed to be working its way through congress that is supposedly on very good chance of being ratified and now all of a sudden there's tariffs on it and everyone says, well, is this ever going to end? is that a valid criticism? >> on the other hand, mexico has certain laws and they do not abide by them themselves they are supposed to protect their borders but they do not. >> yeah. the -- just one little bit of news i want to get in here the s.e.c. has just voted on a new rule that brokers will face a little more scrutiny so they have a new rule they have just passed moments ago requiring brokers to disclose more about conflicts of interest and this is generally about things like the disclosure to act in the best interest of the client. there's been issues about this in the past.
do you think these kinds of disclosures are useful for your clients and for traders in general? >> they are useful as long as we can convince the clients to read them but the problem is that this language seems to always be very lengthy and difficult to decipher and people just ignore it >> yeah. the guys have got some questions out there. scotty, you guys got some questions questions for thomas >> i have a question for you, mr. peterffy i just heard you say that the economy's very good but that the second half of the year for the stock market is going to be very bad. how do you square those thoughts >> i'm saying that the summer months are going to be very slow and the way i square it is that there is no liquidity in the market so, if any bad news comes out, the market could fall many, many hundreds of points >> do you think at the end of -- do you think at the end of the year the s&p 500 is going to be higher or lower than where it is
today? >> it will probably be around where it is today. >> so it will spin its wheels a little bit >> but we are going to go down first. >> that's hardly a disaster, though we're up 9% on the s&p for the year >> yeah, no, i think towards the end of the year, the market will turn up and come back to where it is today. >> i think pete's got a question pete, go ahead >> mr. peterffy, this is pete marriage how abo najarian how about the derivatives markets? i started off the show with the incredible amount of volumes that we have seen over the past couple days but you go back to may and we're trading on record volumes in terms of numbers. when you say there's no liquidity, i don't understand. i will say these algorithms work in both directions, down with high frequency pushing it down and also a factor absolutely on the 500-plus move to the upside so i'm not saying that that doesn't exist in the market as well, but i think there is liquidity in the market and what parts of the market are you saying there is not liquidity?
>> i think in stocks, there is less liquidity there used to be. the spreads on stocks are wider than they used to be >> but is that about -- is that possibly, potentially about the fact that it's leverage and when we took away leverage, back in the financial crisis, it seemed to me that was an absolute almost steroid for the derivatives markets to be able to spike to the upside and you're not seeing -- we have not been seeing the volumes in the actual equity markets in terms of the trade in the stocks for quite some time, isn't that right? >> well, i think that in the stock market itself, not in the options market -- the options markets are great. there is lots of liquidity in the options market there is much, much less liquidity in the stock market because the option markets are basically trading off stocks, right? and the stocks, in other words, nowadays, stocks are trading off options, because there is more liquidity in the options market than the stock market. >> not to get technical but volume does not always equate to liquidity.
so, you can have significant volume but when you want liquidity is the ability to trade average amounts and not move the market. if you have volume and average amounts and sudden looly the market's going all over the place, you would call that a liquidity problem. >> that's a liquidity crisis >> and that's your point >> right >> but 42 years over there, i want everyone to know you were one of the very first traders that traded electronicry you were the guy who first plugged in an electronic platform in the nasdaq, the first one to trade a computer program. >> 1983. >> people were typing into nasdaq on their keyboards and you actually plugged in a computer program that made the first real computer trades i mean, just computer trading a program, you wrote that, right >> i wrote it and it traded unattended all day long. >> 1982 and you are retiring this year after 42 years >> well, sort of >> okay. i just want people to understand how important you were in the development of electronic trading. thank you for all of your contributions. i know you're not going away we look forward to having you
back many times in the future. now i'm going to be here all day and another great legend, vinnie viola, the founder of virtu financial will be with us in the next hour. he'll reminisce as well but we'll be talking about the trading situation with him as well scotty, back to you. >> you may have a debate on your hands, bob, over high frequency trading and what mr. viola thinks about it, whether it's good or bad for the markets. i bet you he has some opinions on that. >> very different opinions >> i'm sitting next to him at lunch. >> good. >> that will be interesting lunch. maybe we should get a camera in there. sir, thanks. that's bob pisani with the iconic thomas peterffy here's what else is coming up on "the halftime report". >> announcer: next, the analyst who says the 142% one-year run for this stock is far from the end of the story the call of the day is next. plus, the najarians will show us where they just found unusual activity in the options markets.
before the break, our data partners at kensho on what happens after the dow falls six weeks in a row that's happened seven times since 1990 when it does, three weeks later, the index trades higher 71% of the time by an average of 1.14%. for more, go to cnbc.com/kensho. "the halftime report" with scott wapner and the traders is back in two minutes introducing the first of its kind lexus ux and ux f sport, also available in hybrid all-wheel drive.
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welcome back, everyone, i'm sue herera here's what's happening at this hour before leaving england, president trump and the first lady said good-bye to queen elizabeth. the president described her as a great, great woman earlier, at a d-day ceremony, the president read a prayer that franklin roosevelt gave over the radio during the normandy landings >> almighty god, our sons, pride of our nation, this day have set upon a mighty endeavor, a struggle to preserve our republic, our religion, and our civilization justice jussie smollet will
not be returning to "empire. the charges against him were dropped. and a year after kate spade took her life, the foundation that bears her name completed a $1 million pledge to support mental health services, this after a final donation to the jed foundation which partners with schools to strengthen mental health programs you are up to date that's the news update this hour, scott, back to you roku is hitting a new all-time high today after already surging more than 200% this year. guggenheim thinks there's time for investors to still buy into this name. they've upgraded it to outperform, they raised the price target to $119 it's our call of the day jim lebenthal, you said, if my memory serves me well, when this stock was declining, don't buy it you got out. don't buy it don't buy it wait until it starts going up. i think those were your words. >> this is the momentum stock of
all momentum stocks. honestly -- >> it's been going up. >> it's going up and you can ride this. >> are you in it >> i'm not getting in it look, i've made good money in this in two trades that lasted ten months, i had 125% return. i don't need to be more greedy than that. however, look, throw valuation aside. i know the analyst puts out there -- >> well, hello, when did you ever consider valuation when you were buying this thing anyway? >> when it was in the 30s, i mean, i think you could possibly value it now this analyst price target, $119, i think it's going to get there but it's going to get there on momentum. leave the valuation aside. the valuation he's got is five times 2023 sales, not earnings, sales. i'm not going to play the price to sales game and i'm certainly not going to do it four years out. i don't know what's going to happen one year from now, let alone four years from now. >> let me just make sure i got this clear >> i want to make it clear can i make it clear before you ask? >> go ahead. >> this is a momentum -- >> it's still not clear. >> this is a momentum name >> i'm not going to do that.
>> it's going up right now so let me make this clear get in it, ride it >> let's show an intraday. he said it's going up right now. >> so ride it. okay have fun with it but for god's sake, everybody, when this thing turns, don't start talking about valuation and where the floor is, okay when it turns, just get out. right now, it's going up it's probably going to its target this is a momentum name. forget valuation it's a momentum name >> okay, so, you're done with it that's what i hear you say >> i'm not a momentum trader i'm a value based fundamental investor >> come on, my man, when it was the -- the momentum was big time to the upside when you were in it, you were loving it >> i was but you know what i'll admit it, you know it, i was outside of my strike zone. >> every now and then you got to do that. >> it was fun. it was fun it was like the small portion of the account. it's not -- >> exactly $34, whatever i bought it, it went to $67, i loved it. >> my point, though, is even though you're out, you told people who were interested in this name to wait until it
starts going back up >> it's going up >> so, should the regular investor, trader, watcher, whoever buy it now if they want to buy it? >> yeah. >> stock has a lot of interest >> if you are paying attention to the stock market on a minute by minute basis, i.e., you're an institutional trader, yeah, get in and ride the momentum >> or you're a najarian. >> yeah. >> but do not get in this name and then go play 18 holes of golf in the middle of the day. i'm not -- i mean, it's funny, but i'm serious. >> was that a jab at scott >> it's at $100. coming up, options bulls betting big on one area of the metals complex, jon and pete have that trade coming up in unusual activity first, though, a sector check on the s&p 500. right now, the s&p is up nearly 0.5% and is led by utilities and real estate. little bit of a defensive tinge. >> little bit. >> to the market, pete >> little bit. >> we' bk teth reacafr is dear tech, dear tech,
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or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade. >> announcer: from zoom media to beyond meat, what to expect from two of the quarter's hottest ipo. a preview and analysis tomorrow on "squawk box." >> the gdx gold miners etf is trying for its fifth straight positive day options traders are betting it will get it and then some. is that what you got for us? >> indeed. the gold miner etf, as you said,
several days in a row we've seen great performance out of this one. i talked about the gld just over a week ago as well and that provided some nice insulation when the market was going down now, with people thinking maybe a rate cut's coming, that's why we think they're piling in you've seen today almost 30,000 of these calls changing hands. july 24s, scott. so, you have a little over a month to get there and again, that number, that's 3 million share equivalent of the stock. i like it. i bought it. i'll probably be in these as well as the gld for several weeks. second stock, take a quick look, i think this is protection, but the pro shares ultra short qqq so what do they do here? this one goes up when the people are -- when the markets go down in the case of the qqq, three times, it's triple levered so what are they doing here they're buying calls in here, which means -- i know it's kind of tough, but that is a bearish bet or it's protection seems more like protection to me
especially since the qqqs made that correction on monday so severely i think this one is going to continue and it's great protection if you need it in your portfolio >> okay. good explanation there >> thank you, sir. >> pete, what do you got >> i got widow of them as well dropbox is interesting because this name has not really -- look at the performance level not very impressive when you're looking at a market that's generally we're talking about more up than down so because of that somebody now expects this to move to the upside when the stock was trading earlier they were buying these july 23 calls, aggressively buying them, it was much less than this, started at 9,000, now you can see over 20,000 of these, buying them for about a dollar at the time so you don't want to chase too much but somebody expecting this stock to go up and through 23 very rapidly in a short period of time. i'm in these, probably in them for at least a month or so i got one more as well jon talked about the gdx how about pan american silver. silver has not done a thing for
the most part. >> it has. it's gone down >> well, yes but it hasn't reacted the way a lot of people think because you would expect silver to sttag aln and ride up with gold, it has not happened, somebody's betting it's going to. i love these kind of plays because the risk reward is there. if they can get up and through 12 in the next few weeks, we've got a shot for these options to not only double but maybe triple and quadruple so i bought those today as well. >> good stuff, guys. come on back over this way because we have viewer questions coming in on several stocks, including verizon, the airlines, maybe more we'll get to them ahead and you still have time to reach us on our website or you can tweet us. there are the two places cnbc.com/halftime, #askhalftime. we're back right after this to do just that >> we know it's a conspiracy nissan did not want this merger. few people within nissan decided to get rid of my husband and
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hi, everybody. here's what's coming up on "the exchange" today. hiring in the private sector dropping to the lowest level in nine years will it put more pressure on the fed to cut interest rates at the meeting this month we'll get into all of that. as washington takes on tech, we'll talk to one company forced to sell itself because it just couldn't compete with google and check on housing mortgage rates at the lowest point in a year and a half where are the home buyers? why are they sitting on the sidelines? that and, re amot 1:00 p.m "half-time report" is back after this
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who used expedia to book the vacation rental which led to the discovery that sometimes a little down time can lift you right up. expedia. everything you need to go. welcome back to "half-time report." i'm seema mody crude oil as stockpiles unexpectedly surge let's bring in our traders joining us from the cme in chicago. brian, i would like to start with you
crude down nearly 20% over the last one month what do we need to see happen for a rebound to play here >> i think we'll see opec is going to need to step in at this point and make production cuts we've heard talks from people out of russia saying they are willing to continue to pump. some were lower in terms of supplies but russia had concern on contamination they haven't stopped at any point here in time and we'll need to see that happen. russia will need to get together with opec and make serious cuts here we are in a huge oversupply of crude oil, driving prices -- i didn't think it was going to fall this far. opec probably steps in at some point. >> and jim yurio, you're looking at the next level that crude could break down to? >> last two days were a bit of a consolidation period the way we've broken out of that today looks awful to me. i think it brings it down to that 45 level, low from a couple
of months back. >> all right we'll leave it there thank you, jim and brian for more on oil and all the latest trades, head over to futures now at cnbc.com. "half-time report" is back after this this is my headquarters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.
all right. welcome back from neela in new jersey, to jim lebenthal, to you first. >> you sound like a good investor scott, you nailed it you get the dividend yield you won't get much more. headwinds here people leaving their tv subscriptions. they have a lot of debt. if verizon wants to compete they have to buy a content company that will increase debt as well. dividend only there. >> another one from neela in new jersey. >> i like neela. >> thank you pete, airlines, you own them what do you do >> dividend while you wait they return money back to you. i like them. i even united and southwest. >> final trades. >> higher volatility is here to
stay minimum volatility etf gives exposure to market but lower volatility. >> public storage, psa. >> your brother. >> jdx i'm in the dxj giddy up. >> corona beer and as you pointed out mexico tariffs are a smoke screen. >> that does it for us "the exchange" starts now. >> thank you, scott. hi, everybody. here is what's ahead, screeching to a halt. adp report showing the fewest job gains since 2010 what does that mean for friday's big jobs report and for those rate cuts that everyone is buzzing about? as washington takes on big tech, one founder tells us how he was forced to tell his company as google's ad dominance grew and the smaller players just couldn't keep up those details are ahead. plus winners and big, big losers investors seem to be firing a warning shot at retailers this