tv Fast Money Halftime Report CNBC May 2, 2022 12:00pm-1:00pm EDT
great. my kids love lego and love fortnite, so they could be on to something, carl. >> a believer. >> exactly a lot of stuff to get to in the coming days, airbnb and amd tomorrow night busy week ahead along with the fed and jobs friday. it's almost noon, let's get to the judge. >> all right, thanks so much welcome to the halftime report, i'm scott wapner, front and center this hour, a new and busy month for your money whether stocks are in for better days as the fed looms and investors brace for volatility joining me for the hour today, joe cher nova, jim laichb that will, pete najarian, let's show you what the markets are doing now. 12 noon in the east. it's a mixed picture we kind of have been all the over the place, there's the dow down by 51 or so, nasdaq is up by 48. we've put new intraday lows in at least for the year for the s&p, the nasdaq 100, and the russell 2000 and the vix has been rising
throughout the morning pete, that's where i really wanted to start today by zeroing in on the vix, which was at or slightly above 35. it may have dropped down just a touch since i last saw that in the last hour or so. but what's your read here as we enter a new month after a terrible one >> yeah, terrible month is right. i mean, all the way across the board in april it just seemed to be awful, but as we get into this new month, the volatility is still here to your point. here we are at 35. it wasn't too terribly long ago at the start of march we actually were up there close to these levels as well can we go a little bit higher? i think we could, scott. i mean, i think we're in an environment right now where there's a lot of jitteriness, a lot of folks that are getting weak hands and we are seeing selling, selling, selling much more frequently than we had been seeing because of that we are seeing some unbelievable moves including on friday to close out april in a bad way 500 points on the nasdaq, 900 points on the dow. just tells you a lot more about what april really looked like. and may right now, we've been
all over the map today already when you look alt the highs and the lows, and there have been multiple moves throughout the session already, just a couple of hours deep, it really does tell you that volatility here right now. i heard the carlyle ceo talking about volatility and how they want to be the folks that are out there that can take advantage of this volatility i totally would agree. i think from a trading perspective right now, it's really, really interesting to be able to trade. for investing, it's difficult, scott. if you have any kind of stops in, those stops are going to hit, and you're going to be out and then you get the move the other direction. that's the kind of market we're in now it's been most lip y down >> farmer jim, our resident bull, unwavering for that matter, so the vix is up, right? not enough, though, to please at least one very notable market watcher. here's what professor jeremy siegel of the wharton school told me on friday in ot.
>> i think there might have to be a little more capitulation. i would love that actually the vix to get above 40 for a day or two to really flush out all the margin and all the over valuation, which i think has mainly been flushed out over the last nine months, six months particularly so i think we're very near a bottom, maybe not quite there. it's very hard to predict the short run. >> all right, that's the professor. morgan stanley's mike wilson today, jim says minimum downside to the s&p, maybe to 3,800 in the near-term, as low as 3460. so he's watching out for that. any of that influencing the way you're viewing the market today? >> it really isn't, scott. i'm a long-term investor, and that doesn't mean that i'm ignoring the short-term. let me address some of the short-term indicators that were just mentioned, and i'll start with the vix getting to 40 would be an extraordinary level, and i think it's easy for the professor to
lay that number out there in light of recent levels, but it wasn't that long ago that if we got into the high 20s on the vix, that would indicate a lot of fear. go back to thanksgiving of last year after omicron broke and that friday after thanksgiving when it was a really lousy day the markets were off multi percentage points. a the vix got up to 35 i just don't think that level of fear is warranted. we all know what the fed is going to do. that is not new news what is new news is how well earnings are coming in i understand what i just said may sound controversial, but the basic fact is earnings estimates for this year or next continue to rise, and that's as simple as it is. as much as we want to talk about whether earnings are going to slow down or not, the simple fact is they aren't so far maybe they will, but this is not -- you know, this is not an economy that looks like it's slowing down either, not with
jobless claims where they are, not with the ism manufacturing survey where they are, i want to sum this up. this is the most important point. you can invest with your heart, or you can invest with your mind investing with your heart will tell you, oh, my god, it's scary. the market's down. let's sell that's likely to be the wrong decision investing with your minds is saying the forward multiple on the s&p is 17.5, and earnings are growing. this is a good time to buy >> so there's a lot to unpack there, and i want to try and unpack some of it for our viewers, okay? earnings estimates are probably too high, right? so if you think that estimates are going up i don't know how -- >> i totally disagree. >> i don't know how estimates -- >> i completely disagree. >> okay. let me finish, and then we can have a debate. i'm happy to do that i don't know how they can continue to go up if you get earnings reports that suggest that revenue growth is slowing almost across the board, right and i'm not just talking about from big tech. that's been reported
savita subramanian calls this the end of euphoria. she calls this -- and she's looking at the numbers, the weakest guidance and revisions since the second quarter of 2020, while consensus 2022 eps rose 1%, it was entirely driven by energy. both their guidance ratio and their earnings revision ratio has now plummeted to the lowest since the second quarter of 2020 i feel like the numbers, jim, are telling a different story and that you are in danger of doing what you said you shouldn't do, and that's viewing things with your heart and not your head. >> nope. nope, so, okay, fine here are the numbers the ibese est estimates continu to go up for the s&p 500 this year and next. that's just a fact as far as guidance goes, i'll grant you it's a mixed picture, but you've got to look through
this a little bit, o'epikay, for every amazon there's an airline that's absolutely killing it all that it's saying is that the s economy is shifting from stay at home buy things to reopen, get out there and travel sure, apple's guidance for the next quarter wasn't that good, qualcomm's was it's a mixed bag, and when i look at that, what i look is apple's second quarter, the forward quarter is highly affected by china's slowdown, which we've seen over the last two years related to covid it passes. it passes. it will likely pass quickly this time, and then we're off to the races. so you've got to use your logic here i'm not using my heart i'm looking at the numbers 17 1/2 forward multiple on the s&p 500 while estimates continue to rise. this is a good buying spot right here >> wow, okay joe, what's your take on what jim just said? because i really want to debate this issue this is what everything -- this is where it all comes down to.
our viewers are watching this, they think that jim's on to something, they want to get in the market they think now is a good buying opportunity. it may very well prove to be i don't know do you >> first of all, i invest with my wallet, and i think, jim, that i've told this to jim privately, i think jim is ultimately going to be right on the direction of the market. i think jim is early i think there's a big difference between the guidance for apple and the guidance for qualcomm as it relates to the effect on the market overall i still suspect that we've got a 60-day period where markets and risk assets have to continue to normalize in response to what federal reserve policy's going to be. we'll talk a little bit more about that later i think they're way behind the curve, but i think that -- >> let me stop you real quick. i'm sorry, but let me stop you real quick this notion of making a call, while it's ultimately going to be right but you're early. i mean, come on now. when you know what i mean, in two years now, two years from now
you're going to say it was early? >> no, no. >> it's either right or wrong. it's either a good time to buy stocks right now or not. not this early -- too early nonsense. >> we're talking a matter of months, scott. you just got to hang in there. pete and joe and brenda will tell you a bottom looks exactly like this. you grind it out it's up on thursday, down on friday, up on monday or wherever we're going to end up. what joe is speaking about, and it is important, he's speaking about sentiment, which is what i'm saying you've got to look through. maybe we grind this out for another couple of weeks. i don't think it's a couple of months, not when you get past the fed, not when you get a few more cpi reports before the nest fed meeting. i just don't think it's a couple of months. maybe you grind it out for another week or two, but you've got to acknowledge we've been grinding it out for four months already. >> i give it back to you, i didn't mean to interrupt you i just want to make the distinction here between saying something is too early and he's eventually going to be right if you say it's going to rain outside and it's sunny every day
and it rains finally i told you. >> it's the same thing for mike wilson mike wilson's been calling a bear market for a year and a half and you applaud him give me a break. >> abrpplaud him i've told him i'm wrong, what do you mean that's my exact criticism. if you tell me it's going to rain every day and then it's sunny, and then six months later it finally rains, you can't claim you're right. >> good, i'm not telling you to wait a year and a half right now is a good time to buy, you've got to have a little guts for crying out loud. let's not cry over two months. >> okay, you have the crystal ball joe, go ahead, please. >> so for me, i want the federal reserve to move faster i want the federal reserve both in may and june to give us more aggressive rate hikes, more normalization, in terms of your question regarding time, it's a fair question, and i just rely on statistics. if this is going to be 1973,
2001 or 2008, and the equity market's going to fall by 45%. it's going to take four years to recapture that high if -- and i think this is what we've got right now -- this is more of a correction where markets fall somewhere between 15 to call it 25%, then you've got ultimately somewhere around an eight to nine-month process for markets to recapture highs we're basically five months into this right now i said the last week of june is when i think the market is ultimately going to bottom and begin that recapture period, and the distinction really is do you think this is a correction or a bad market i think the evidence says it's a correction >> brenda, what's your view? >> i would agree that it's a correction i'll say this is a period of significant digestion, right over the last six to nine months, we've gone from a period where rates were zero across the board, near zero, and the only place to go was the stock market we had valuations that were
probably higher than they should have been and now we've had a complete reversal. even though the fed's raised rates one time, the whole-year-old curve has moved up significantly, especially short-term interest rates. and meanwhile valuation has come down we think going forward we're likely to have valuation more in line with historical averages. that wasn't the case over the last couple of years we had really elevated levels of valuation, but i do think the fed's going to move, likely going to move fast, but the economy is still really healthy. i agree with jim on that point, if we look at a lot of different measures, you could argue it's even healthier than it was pre-pandemic, and at that point the fed funds rate was at 2.4%, so i think the fed can move a little more quickly here and likely not upset the economy, and i think as long as corporate earnings hang in there and i'll say for q1, there's been this disagreement between strategists and analysts, where strategists have taken numbers down, analysts haven't they've been moving up i think so far for q1 still more to go, but it's the analyst that
won this quarter in terms of getting it right and so that trend, i think, has the potential to continue and at least have a positive earnings year, which should be supportive of the equity market moving forward. >> a lot of this obviously is going to have to do with what the fed not only does this week, what it says, and then what it ultimately does after the fact, and if the stock market continues to be upset and volatile in the manner in which it has now, is that going to have any influence whatsoever on fed policy i keep hearing from people that the market has gotten way over its skis on what the fed's going to do. it's priced in way too much. bond market is leading the whole thing, and it's just overly, overdoing it, and let's bring in steve liesman on that note, specifically, steve, on the note of whether if this sort of upset in the market persists, is it going to force the fed's hand to ease off because then you're going to have real questions about the fed's cred
>> let me answer that question, good afternoon, by the way, scott, and your fabulous panel there. great discussion i'm going to answer that in two ways one is i do think there's a pressure point for powell when it comes to the stock market, and second, i don't think we've reached it yet, and that is not the indication in the market, and i want to give you a very quick narrative here which is that on friday morning at 8:30 you have the employment cost index come out that's a measure that powell said he's watching you also have the fed's preferred inflation indicator, the pce index come out, and both of those were high, and may be higher than expected the result was that bond yields rose, and the outlook for fed rate hikes rose as well and the market went down notice what i just said. they did not work inversely. what that told me was the market itself basically believes what i believe where we are right now, which is that the outlook for
the fed is not working inversely with the market, so so far the market doesn't believe it's there and i'll walk you through very quick pricing right now, scott. there is still even after that massive decline on friday, a 100% chance built in of four 50 basis point rate hikes there is some chance also of a 75 that's where the play is between now and through july and -- through july does the fed do a 75 that number, that percentage has gone down, but as for the 450s, they're baked in you're at 2 1/4 to 2 1/2% by september, and that's where the market is pricing that does not seem to be moving at the moment relative to what's happening in the stock market the indication, one way to put this in a way your traders will understand better than i do, the fed put remains out of the money, and i'm not sure where that is, but it's certainly out
of the money now as far as pricing in the fed funds market is. >> 100% for four 50 point hikes, maybe a 75 are you one of those, jim, who thinks that the fed -- i mean the market is way ahead of its on the fed, that that is not going to happen? because you know, you paint such a rosy picture of everything. >> yeah, this is a great conversation i like the way you set it up, scott. steve, i like your answers i don't think the fed put is relative to my investment thesis let me start there i don't think the fed gives a hoot about what i do or what any equity investor does i think that what they really concern themselves with is inflation. now, 50 basis points this week, powell as much said so and he doesn't want to surprise the market the market's giving him leeway to do 50 basis points in june, but you get two c pi reports between now and the june 5th meeting. ste steve could those reports not
come in easier than expected and take a little bit of wind out of the sails for four 50 basis point hikes. that's my thesis, not that he's going to bail out the equity market but that inflation is what they look at. >> i think that's right, jim, and i'll give you a tease on our fed survey tomorrow, which i'm just crunching the data now, so not ready to put it up on a full screen yet, but i can tell you that the 30 or so economists and fund strategists and market strategists who look at these things have a much more dovish outlook on the fed than the fed funds market does or than the pricing in the bond market i don't know quite what to do with that, but they're not going quite so far i'll give you a tease on that for tomorrow there's a concern about the economy in there there's concern about inflation, and there is a sense, by the way, jim, among this group not to give it all away that inflation may have peaked. what the fed does with that, i'm with you on board with this idea of two 50s, maybe three 50s
through the summer, and then i think the fed's going to look around i do think they want to get to 200, 200, 2 1/4, i think the extent the market is over its skis it's the certainty with which it gets there very quickly and the certainty with which it goes above neutral. >> steve, i'm going to say thanks here. there's a few things i want to get to before i take a break steve leashiesman, appreciate i. it's going to be a big week for us and the market. let's talk about how this conversation is relevant for tech, nasdaq which is coming off the worst month. certainly april was the worst month since '08. kramer and others have declaimed the faang acronym dead after netflix and some of these other results, facebook, meta. microsoft down 10, amazon down 24%, apple down 9.5, and meta down 10.
is it time to abandon this trade as a place to look for safety, at least for the time being? >> i would say some of that trade absolutely, whether that's netflix or some of the other names. i would say apple still stands up, doesn't it i know it's gotten hit a little bit. you mentioned 9% to the downside when you look at their numbers, their numbers were still fine. i don't think there's any numbers people were so worried about. the initial reaction, it bounced around a little bit, but it seemed like it was going to be a pretty strong day for apple, but then i think it got dragged down by what was going on with amazon and some of the weakness there i think it just depends on the names. obviously as a group, yes, i would say that i would abandon it i'm right there with jimmy he's been great this entire time i do think that there are the haves and the have nots, i would also add this, facebook has done a great job on this particular element of what they did this quarter with their earnings because that previous quarter was absolutely horrendous.
we all know that, but then they came back. they had revenue growth, they had, you know, the monthly active users the daily active users were all back they really did back peddle to back where they were, even though they're still working with meta. they took their eye off the ball now it's back on the ball. that's why we're seeing facebook sort of react the way it has lately, which is a lot better than some of those other names it took its medicine it was awful when they made those mistakes i do still think there will be acronyms that come out apple's going to have to be a part of it you heard what buffett said this weekend, he would have bought more but apple started moving back to the upside that tells you a lot about him, after buying $600 million worth, he wanted to get more but he couldn't >> apple does figure into some of the committee moves there are many, joe has rebalanced the joe t one, two, three, four, five, six or so new buys that he's added
he sold a big name that plays into this conversation too. plus, our next guest is sticking with his call for the s&p to finish much highe er than it is here, much, muchmu, ch higher we're going to debate that with the committee next what if you were a global energy company? this cnbc program is sponsored by ibm ibm, let's create. and customerl on different systems. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world. new projects means new project managers. you need to hire. i need indeed. indeed you do.
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i mentioned our next guest was sticking with his very bullish s&p target it's bmo's brian belsky, the birthday boy, happy birthday, great to have you back. >> thanks so much for having us. >> you've obviously been on your bull retreat with jim lebenthal, you guys have been talking a lot. you have to have the same perspective if you're sticking with 5,300 as your s&p target. i ask you every time because i think it's relevant every time. >> with much humility we're wrong right now, how many people come on your network and say they're wrong. humility generates wisdom, and pride generates disgrace, and jim and i text and talk more than you know, and i think both of us have faith we do believe in fundamentals, some of the numbers that have been thrown around are not accurate, by the way, in terms of revisions and the like in terms of guidance. i think the market's got really the last 20 years has become so macro dominated that these macro
figures have become such an academic practice and people are managing their money on. for instance, when you take a look at year-over-year pce, year-over-year ppi, year-over-year cci, those are the academic practices to judge inf inflation, but if you start looking at the month by month, it's already beginning to roll over even liesman is talking about that we're wrong right now, we are bulls longer term. this is a correction, i think i agree with the rest of the panel. when we come out of these corrections, you typically see anywhere from a 25 to 30% recovery in stock prices 5300 obviously is a very aggressive target. we're going to to maintain it. once we start to see the market kind of find a footing here, we look at that, scott, quite frankly, but we want to see a bottom be delivered here, and we think the bottom is coming very, very soon. >> so you question the numbers on earnings and revisions, but the numbers don't lie in terms
of slowing revenue growth, and i mean, i point it out because it's relevant, right growth is slowing. top line sales growth is slowing at some of the biggest companies on earth if it's slowing at those companies, you darn better believe it's going to start slowing if it isn't already at a bunch of other companies >> two things on that. >> earnings are going to have to come down. how can they not >> well, okay, so if you look out over 500 companies, and you don't just look at fiscal year one earnings revisions, which that other person is, if you look at a combination of fy1 and fy2, earnings revisions are still going up the surprises that we saw in the first quarter were a little below first quarter averages but well above the longer term average with respect to annual average. jim is right, first quarter, second third and fourth quarter numbers have gone up since the end of the year. this is something we talked about on air, but nobody seems to believe us because they're so
focused on one or two or three of the big names i agree that the faang moniker, you have to be a stock picker. you should only own a couple in size for different reasons i think this exemplifies the stock picker's market we've been talking about, the transition back to normalcy this is going to be a process that's going to take several months, and i think under that it's still the best bet in the world to own u.s. stocks i still think we're the best equity asset in the world, and that's why i think flows from other regions including europe and asia are going to come back to the u.s. >> is the fed entirely in the market because it would seem to me that you can't get to where you want to get to for the s&p unless you believe that >> well, i think that the market -- here's something radical, i think the market is going to rally on wednesday, the stork market's going to rally on wednesday because you sell the rumor and you buy the news i agree, though, we're going to see two 50 basis point increases, and then i think we have a whoa whoa whoa miss lip pi moment where the fed kind of
looks around and starts to see that monthly data roll over and that inflation truly is peaking. then we have some other things going on like maybe the war ends, maybe we start to see supply chains open and remember consumption is important, scott, two-thirds of our economy is the consumer, mr. moynihan at bank of america was very clear with respect to what's happening at that bank in terms of spending. i have the very good fortune in my job of being able to talk to private companies on the commercial banking side. i recently did a round table a couple of weeks ago in milwaukee, all 15 of the ceos were very bullish, and they want to get loans and grow their business that's what we're sticking to. >> the apollo ceo earlier today made some very interesting comments we have a long way to go that was the quote that he had regarding valuation, and the reset that has to happen to 2019 levels, in some cases we're still way elevated above that, that you have to revert to the mean, and we still are a long way to go. why is he wrong?
>> he's not wrong. remember, private equity had a terrible year in 2018 because interest rates were going up private equity needs lower interest rates. >> he's talking about the market i mean, are you going to dump on private equity because he said that and works for private equity >> i'm not going to dump on private equity at all, scott what i'm saying is private equity needs the stock market to go lower private equity needs valuations to go lower because that's their business they need lower rates as well. >> you're suggesting that his view is disingenuous because he's only talking his own book to make his business better. like nobody outside of their own world can have a view of anything >> everybody can have a view on everything, that's what makes a market. >> what if he's right, the fact that you had this liquidity pushed into the system that bloated valuations and the liquidity is being pulled out faster than it went in and that's going to have a an impact on valuations and it hasn't been reflected enough yet people aren't appreciating what don't fight the fed on the way
down means relative to on the way up now here everyone wants to fight it and suggest, no this is not going to happen. earnings are going to hold up. i don't understand that. >> two years this week, two years ago this week, scott, the ten-year treasury was trading at five basis points. five the bond market's done a wonderful job getting ahead of this, okay so the bond market's already ri risen. we're already at 3%. and private equity should have crushed it in 2020 is and 2021, and now they're trying to talk the market down? i do think that's disingenuous, and that's why we're a public investor because we have all the information, and we do the analysis that way. >> so anybody who thinks that valuations still need to be reset, i'm sorry, i'm not going to get off this. anybody who thinks that valuations still need to be reset is talking the market down >> listen, the market has done a wonderful job discriminating against high multiples, a wonderful job.
it's what happens to great companies like netflix and even google and apple and microsoft to some degree again, the market given the way that we've had this great correction and we've had pullback some of these high multiple stocks, we think it's genuinely bottoming out some of these growth areas remember, you got to be really careful. if you want growth to slow, when growth is scarce, growth outperforms. guess what comes back, technology what are you going to buy? that's why you need to be more balanced in growth and cyclical here watch where the bottom comes in, wait for the fed to do its job, and then adjust your portfolio and invest accordingly. >> i enjoyed spending your birthday with you, brian >> thanks, scott. >> you have a good evening, that's brian belski joining us today. coming up, we're going to get to all the mes tovhe investment committee is making, there are many, as joe has rebalanced the joe t we're back after this.
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etfs for corn, and sugar your corn etf seeing huge inflows. you mode the point ukraine is an important source of supply for corn this is a critical moment for the global corn harvest, the corn etf a seven-year high for you. why is this a critical moment right now for corn >> because it's planting season, bob. right now in ukraine they have the same season here as the northern hemisphere in north america. they need to be planting they need to be planting corn right now they're a major exporter they were expected to export almost 14% of global corn exports, and if they don't get that corn planted, it won't be there at all it won't be in storage it won't be anywhere it will not be -- it just won't live so they've got to get that corn planted and they're saying we may lose 50% they may only plant 50% of their corn it's a really important time right now. >> you made the point also that russia is the largest exporter of fertilizer. that means a lower yield on
corn all sorts of very important things happening right now also coming up, an even more important commodity. we're talking about wheat now. ukraine also an important source of wheat it gets harvested in june, just about a month and a half what's the outlook right now >> not good. right now we see the wheat is growing. it needs to be fertilized, and it's probably not getting fertilized in a lot of places. you're going to have a lower yield. it was planted it will grow it may not grow as well when it's there in june and july, it needs to be harvested. that's still up in the air, and the market needs to price that right ow i think the market's pricing that it's not coming at all, but we should see 30 to 50% of it according to official estimates! okay we're going to have much more on the outlook for corn, wheat, soybeans, and sugar with sal coming up on etf edge at 1:00 p.m. eastern time. tucreum has received approval for a bitcoin futures etf. we'll get the update for the
prospects. sal will be joined by brian lake, the global head of etf solutions at jpmorgan asset management bond alternative are the over big etf investing story this year brian will update us etfedge, coming up halftime back right after this this thing, it's making me get >> announcer: etf edge is sponsored by invesco qqq, invesco distributors ink inc nasdaq 100 innovations like... inc.rain inc uh, how long are you... i'm done. i'm okay.
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comcast business. powering possibilities.™ tyler mathisen, here's our cnbc update the congressional committee investigating the january 6th attack on capitol wants to talk with three republican house lawmakers. it has sent letters seeking voluntary cooperation from representatives andy bigs, mo brooks, and ronny jackson. among other things, the panel wants to know why members of the right wing oath keepers group were asked by its leaders to provide representative jackson with personalsecurity assistance that day. in a unanimous ruling, the supreme court says today the city of boston should have allowed a christian flag to be raised in front of its city hall the judges say that since the city has allowed dozens of other
groups to fly their flags outside the building, the rejection of a similar request from a religious group violated its first amendment rights >> and new york city has raised its covid risk level to yellow it is recording about 2,500 new cases each day that's up from about 600 in early march. i think scott that would be no shock to many of us in the new york market. >> ty, thanks. warren buffett and charlie munger riffed on a lot this weekend at the berkshire hathaway annual meeting the including robinhood. here's charlie munger, listen. >> robinhood when it came out, it went public, and everybody and all this sehort-term gamblig and big commissions and hidden kickbacks and so on and so on. it was disgusting. >> yeah. >> and they got mad at you and sold a bunch of their stock and got the money. >> now it's unraveling god is
getting just. >> a lot of the insiders have gotten a lot of money from it. >> they were big sellers as i remember >> may be, but there's been some justice. >> all right, well, robinhood gang ripped charlie munger in response i don't need to read the whole thing, but needless to say they ripped mr. munger, joe, what is your view on what they had to say? and not sure how we're going to judge this period some years from now, during a pandemic where this cohort came into the market, there's not much else going on, sporting events were dark, found a place to maybe have some of the same sort of enjoyment, i don't know. but how do you assess what charlie munger had to say in this whole robinhood affair if you look at the most recent earnings where that stock was, and it's a single-digit stock now.
>> yeah, i think the perspective from both charlie munger and the response from robinhood are probably to a certain extent extreme. i think somewhere in the middle is probably the reality of what robinhood is all about i keep using the word normalization. normalization also has to occur as it relates to a lot of the speculative behavior in financial markets. i think that's the process that's unfolding i think robinhood through quote, unquote, innovation is going to have to be more traditionalized as markets move forward and markets look a little bit more structured, markets look a little bit more respectful of valuations so as far as the stock itself, i wouldn't buy it. i thought earnings were not good last week, obviously i know and i'll talk about cathie wood and the ark fund, it's a big position in that innovation fund. i'm not sure i see the innovation there with robinhood. they're going to have to somehow compete and innovate if they're going to be able to effectively
move this company forward. >> so jim, i'm going to put you on the spot. you generally don't shy away from that, is munger terribly out of touch, or is he on to something? >> so let me take the emotion out of this because that's what i'm seeing, if i've got a choice between being educated by robinhood or charlie munger having no emotion and just looking at their investment returns, i'd go with charlie munger in the blink of an eye all day, all week, all month, all year, all life, end of story. >> that's how you're summing it up >> i mean, the guy's track record speaks for itself are there words you think i can add to the warren buffett charlie munger track record? >> no, i mean, but that doesn't mean that they get every single thing right or always have, they haven't. is there a long-term track record what it is, of course. >> i'll dance, i'll dance, i'll dance, scott, okay what robinhood did in its so-called education of retail investors was encourage them to
pile into fan boy stocks that had no arnings, high multiples of sales that went up when money was cheap or cost nothing and have plummeted since there is a lesson to be learned from that. i will grant you, there is also a lesson to be learned from thinking about warren buffett and charlie munger and evaluating financial statements, balance sheets and profitability. >> you used the word encourage, which is a loaded word, brenda jim says they encouraged people, did robinhood to take these excess risks and the like. i don't know if that's a fair characterization or not. at the end of the day, people make their own decisions >> right, and if we look back over the last couple of years, particularly after march of 2020, it was pretty hard to go wrong if you were willing to put some money in and invest so i think a lot of people, whether they are really being encouraged by robinhood or not were experiencing a lot of success, and so that just fueled
the interest even more in the moment because, scott, as you mentioned, everyone was at home. there wasn't a lot else going on, so a lot of people really became very engaged. but i think after moments like we've had this year, there's a real sense of, oh, boy, maybe i don't know everything i thought i knew, and maybe this isn't my second calling here, and so -- and i can get out and i can go places and i can go to events and sporting events and so on, so i do think that engagement in general is just going to go down for this company, especially based on what we saw over the last couple of years still think that's repeatable in the short-term. >> let's do a quick break. pete's got unusual activity still to come. we have to get to joe's many ma moves, many of wchrehi a very interesting names. brenda's got some moves too. we'll do it next allowing us to see differently and do more. with kpmg you have the people and technologies, to uncover insights and turn them into action.
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i came into 2022 with a combined exposure between technology and communication services at 33%. now i'm sitting at 21.5% other competing strategies can't do that because they're rebalancing twice a year, so i feel really good about what was liquidated from the portfolio. i feel really good about what we added to the portfolio >> let's go through a little of that so you bought apple just north of 157 you bought amazon again at 2485. let's start there. >> i could be more tactical, sold at the end of january, apple at170. nowapple pulls back. we're able to reenter the position at 157. that's based on a strong momentum factor for apple over the previous quarter amazon down 27% from where we sold it on july 30th at 3327 believe it or not, amazon has
actually improved on the quality factor in terms of its balance sheet. so glad to enter amazon here again, being tactical. >> you established positions in some health care names, bristol-myers, j&j, lily and merck. >> i did and i think overall when you're going to look at the etf, you're going to see the average p/e has come down significantly. that's where i want it it sits are right now at about 20 we've even got some positions in gold companies, so this is looking more -- a more diversified qualitative type of product as we're positioning for the normalization process with the federal reserve over the coming months. i think that's going to be important. you're defending against elevated risk, elevated volatility. >> good stuff, joe, thank you
for that we'll still do brenda and pete has unusual activity, and we'll do that when we come back. this... is the planning effect. this is how it feels to know you have a wealth plan that covers everything that's important to you. this is what it's like to have a dedicated fidelity advisor looking at your full financial picture. making sure you have the right balance of risk and reward. and helping you plan for future generations. this is "the planning effect" from fidelity. (vo) verizon business unlimited is going ultra! get more. like manny. event planning with our best plan ever. (manny) yeah, that's what i do. (vo) with 5g ultra wideband in many more cities, you get up to 10 times the speed at no extra cost. verizon is going ultra, so your business can get more.
those are going for about 80 cents. cisco came in with size. 19,000 they were buying this friday very inexpensive options i went to the 50 strike calls instead. they bought 19,000 for 8 to 10 cents. beth very short term everything i'm seeing is extremely short term in the options world. >> good stuff, pete, thank you (vo) verizon business unlimited is going ultra! get more. like manny. event planning with our best plan ever. (manny) yeah, that's what i do. (vo) with 5g ultra wideband in many more cities, you get up to 10 times the speed at no extra cost. verizon is going ultra, so your business can get more.
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overtime tonightb with 4:00 p.m. right there. tom lee's going to join us see what he thinks after friday's big upset in the market you know how bullish he's been we'll get his point of view. pluswe'll have -- >> and the largester of vaccines the stock is down. there's an opportunity the cash business and there's been a lot of pets acquired that will likely be needing care
>> should note as well you sold paypal and you sold merk we know what's that with paypal. brenda said enough is enough got rid of that. >> i'm going to do gds i've seen a lot of option paper way down from where it was i think there's an opportunity for upside >> farmer jim. >> paramount reports earnings tomorrow morning you know i'm not going to hide >> i know you're not at all, jim. in that space, man i can't wait to see that report. joe, go ahead. i'm going to take a look at this one. >> we added occidental petroleum. one of four names. energy exposure relative to 4.17% for the s&p 500. >> i'm looking at paramount, jimmy, 52-week high. $30 and a lot of the stocks have
sold off hardly. are >> we're going to have to see if they add the 5 million subscribers we think they are. netflix was industry wide or company specific >> guys, thank you i'll see you in the o.t. "the exchange" begins right now. thank you, scott i'm kelly evans and it's a new month, a fresh start and we were hoping maybe a fresh start for the market but the worst month in 14 year wheres. the nasdaq joins the dow and s&p, which have also turned lower. one of our guests insists we're close to the sell off. weal are say why and what are his plays. weal are look at the least bad stocks and we're just 48 hours away from a huge fed meeting everyone expecting a half poin