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tv   Fast Money Halftime Report  CNBC  June 28, 2022 12:00pm-1:00pm EDT

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up 447, but lost that as people sold into the morning rally. >> got to see how this ends. tell you what, i'll be back at 3:00 for closing bell. you at 4 >> i'll be 4 dee, you're next let's get to melissa lee and the half welcome to the halftime report melissa lee in for scott wapner. inflation rates, recession fears, how much is priced into the market as we head to final stretch of the month and quarter. is a second half restart in store? let's get a check of the markets. we are sitting near session lows s&p 500, 3854. 1.2% declines, nasdaq with a 2% decline. holding steady on rates. 3.2% on the ten year
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>> we are in a complicated situation, melissa a lot on the table, war in ukraine, inflation, interest rates, recession fears i remain of the opinion we are in a growth slow down, not a recession. proof of that yet to come. to simplify things and leave some things for the rest of the panel to discuss, i would simply say inflation for me is the most important thing. yes, we have the pce thursday, but it is a read for may we know may inflation numbers are terrible i am waiting for june figures that come out in two weeks, july 13th it has been all year we have been hanging on edge about one number i'm going to do it once again. if inflation comes in better than expected, it has been a long time since that happened, but if it does, i think you're set up for the belief a rally could stick. until then, every rally guilty until proven innocent. last thing on this, there are a lot of pieces of evidence that suggest inflation peaked, whether it is commodities coming
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down, inventory to sales ratios. the problem with what i said i will own up to this, i said it before and been wrong. >> josh brown, we heard from nike last night. we'll get into the report itself in more detail later on. what they said was they still face elevated ocean freight costs, headwinds, things that indicate companies are not -- inflation may have peaked, they still face headwinds that may not have been priced in. >> nike is a head fake they said they see no sign of any slowdown among the consumer and that's probably true actually, if you look at how they manufactured the earnings beat, a lot of that came as a result of direct consumer sales which are more profitable than going through other channels nike is doing really well. i think they're a very specific case go ahead and look at the other consumer discretionary names, a handful i follow as a gauge of what's really happening.
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home depot, lowes down, too. prett pretty much ulta, tj maxx. best buy that's the real deal not nike having something positive to say. the evidence is look at stockex and retail sites, prices have fallen through the floor that was a market when crypto was up, nasdaq was up, everybody was working from home. the real consumer is not as excited to buy the second or third pair of air jordans for $900 on a resale site. that's the real consumer, not what nike is talking about in fact, i wouldn't be surprised if nike succumbs to the weakening consumer picture evidence of why the market agrees with me, this is barely doing anything on the heels of a pretty good earnings quarter they have been construed as
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figuring it out. bigger picture, supply chain problems are still here, jim may be right, inflation may have peaked, for some categories we know definitively it has problem is going from 8.5% inflation to 7.5% inflation does not do anything for the reality on the ground amongst main street, amongst consumer so i think as shakespeare said, the dye is cast, this is the world we now live in we have to accept it university of michigan consumer sentiment gauge hit 50 in june that's the lowest reading since 1952 please understand that includes the aftermath of 9/11. that's what the consumer mind-set is today. we have to live in that reality. that's why the stock market rallies keep failing >> stephanie, i know you're waiting for earnings i think that josh talked about
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the positive out of nike, and there is, but the negative underscores the notion that perhaps analyst estimates need to come down goldman, sachs came out with a note saying profit margin forecasts need to come down. you have been waiting. people are saying earnings season will hold the key that's when we get a real indication how companies are faring with elevated inflation, what the outlook looks like. >> we'll get to nike in the next block or two in terms of inflation, the fed, recession this is why the multiples have come down ironically, earnings are up. so far, earnings are actually headed in the opposite direction. so there's that. key for the overall market will
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be second quarter earnings because we don't know what's going to happen. what we know is demand is absolutely on fire across the board, wasn't just nike that said it, accenture said it as well a lot of companies in conference season talk about demand is holding up it is the cost side that's very concerning and a problem now you have china reopening so you have another demand equation probably going to perk up to offset some cost pressures, eventually cost pressures will ease. the fact that china is reopening means ports can get less clogged, because that was a big problem when they shut again in my mind, keys for second quarter, what i am watching, you mention margins. they're very important i talk about operating leverage all the time i don't think every single sector will be plagued with margin pressure. i don't think the energy sector will be. i don't think materials will be. those two sectors have pricing power. i also think some of the
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industrial and staples as well tomorrow, general mills reports. i know it is not glamorous, but it will be interesting to hear what they have to say. organic growth expected to be up 9%, price mixed up 12. see how they handle inflation versus prices and demand the other thing i watch during earnings season is currency. we heard from microsoft, we heard from ak sen tur as well. that will be a head wind i don't pay attention one way or another to currency, sometimes you have knee jerk reactions possibly bringing a buying opportunity. i want to be clear i don't think demand will disappoint i think it will be the cost side see how the companies can navigate through it. >> michael, your thoughts. >> i think everybody really wants this to be over with i have been a little worried for awhile i think we ultimately go into recession. when josh brown is quoting shakespeare, i have to rethink
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everything puts me back on my heels i congratulate you, josh, that was pretty good. melissa, we have seen the banks go from there's not going to be recession, maybe a recession, now the recession will be a mild recession and only lasts two quarters we are trying to script this we're seeing people say the fed will raise rates, maybe pause in the fall, maybe reassess and by this time next year, we could see the fed beginning to ease we are trying to come up with this great, rosy scenario and script for the market that makes us all feel better, and i'm sorry. this time we need to be data dependent. can't let your feelings lead this particular charge read a book years ago when wish replaces thought, it is really a bad thing to do. you have to think your way through. so i think we're probably slowing. if you believe the fed, they have another 150 basis points to
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hike, takes us to 3.25 on fed funds by september if you go to 3.50 on a two year, who knows where the ten year goes in inverted curve normal curve, over 5%. i don't think you trust a bottom in the stock market until the fed indicated that they are nearing the end of that hiking cycle. and i don't hear that happening yet. >> melissa, i am going to respond by leading with my chin, makes me get punched in the face josh made a good point about 7.5% inflation not being enough. i agree. the question is whether jay powell is right, inflation could come down rather quickly here's why it might. doing a lot of reading as i am sure many of us are on the bull whip effect in supply chain management and it seems to lead to things like we have a target and walmart with oversupply of inventory which will lead to cost cutting and that may be the tip of the
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iceberg. put on top of that the cracks, and only cracks in the labor market, but people being let off at beneficiaries of the pandemic sure, they'll find jobs, it will ease pressure off wage pressure. put it all together, michael, i heard what you said about everybody has their narrative and their theme, people want it to be over, including me, but actually there's some credibility to what i said >> including me, too >> having said we have to see how it plays out >> careful what you wish for if you get this rapid drop inflation, it will be for one reason only which is the fed has thrown us into technical recession. by the way, this is happening on parallel track around the world. >> can i give a thought, maybe that's exactly what we need. >> i am not saying it is end of the world. i am not against it. >> recessions happen >> so we hit a recession, we had
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one that lasted a week in march of 2020. and it is interesting. for moral reasons we decided no, we're not going to have one. and every branch of government, every central bank around the world, democrats, republicans, like the one thing in the last ten years i can remember us all agreeing on, other than gangnam style. two things the world agreed on and we should not have a recession and ruin lives over a covid lockdown we all agreed and did that, but you have to pay at some point, you have to have the recession to cleanse some of the excess. arguably it would have been preferable to have done this last year rather than continuing to stimulate the housing market for no apparent reason so we didn't do that and we are doing it now. okay is the worst thing on earth a technical short shallow recession? definitely not i would argue it is preferable to us pretending that we don't
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have to have one and having a horrible one because we keep doing things to forestall it that's where we are now. i don't think the majority of people on main street would have their lives materially altered by recession in this case because of how tight the labor market is. if we lose a bunch of executives at netflix but manage to keep high employment among nurses, trucking, people working in oil fields, it's really not that horrible i think it is okay if we are headed that direction. i think it is okay if it happens sooner than later. again, be careful what you wish for on inflation coming down because it is probably going to be as a result of the fed throwing us in there last thing on this we always overshoot. you cannot ever point to a single recession we have had where the multiple settled at an average historical multiple.
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i don't care what you follow, price book, book to market, price earnings, forward, backward, you ain't getting out of this at 16 times, especially if earnings estimates start to fall apart in the second half. so i'm not trying to come on here as the gloomiest person in america, i'm trying to be real with people. go look at the last bout of inflation from the early '80s, where the earnings multiple settled out at, it was like 9. it was not 17. you ain't getting 17 this time either >> it is a pendulum. saw the pendulum swing far to one side, now it will swing back i agree it will not swing back right to 15 and a half where do you stand in terms of the notion that it may be what the markets, i hate to say this, may be what's best for the markets is get this thing over with, rip the bandaid off, have it short and done, we know stagflation is not a scenario. >> look, i just don't think you can get really aggressive when you have a fed that kind of has
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blinders on right at the moment and want to raise 75 in july, 75 in september we'll see. they say they want to be data dependent but they're so behind the curve. they were behind the curve and now are more behind the curve. on inflation, target and walmart can discount, that's great for the consumer and holiday season by the way, but it is a small piece of cpi rents, wages, health care, education, these are all very sticky parts of inflation. so for those saying we see peak inflation, i say yeah, maybe it is peak, but we stay elevated quite some time. i think the deflator is more important for the fed and decision making than cpi they look at the core pce, want it to be two it will come in 4.8% so what if it comings at 4.5, that's still high. they're going to continue to be very aggressive on rates, as long as that number is high.
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not only is it look at cpi, ppi, labor costs are also, employment cost index, other areas we have to keep an eye on. inflation will stay very high for a long time. therefore, you don't want to own long duration assets, growth of stocks, and want to continue to find companies that benefit from inflation. those are the sectors i mentioned earlier. >> bring in steve liesman, he spoke with new york fed president about recession fears in an exclusive interview. not the base case scenario, he says, recession. >> definitely not, melissa by the way, i completely disagree with the cleansing qualities of recession. >> i brought that up, knowing you were coming up next and listening to this. >> i was bristling the whole time let me play a piece of sound from john williams and then come back williams joined others on the fed saying essentially that he is not anticipating u.s.
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recession, even though he sees growth slogan fed hiking rates significantly from the current level. >> recession is not my base case now. i think the economy is strong. clearly financial conditions have tightened and i am expecting growth to slow this year quite a bit relative to what we had last year, slow 1 to 1.5% gdp growth, but that's not recession, it is a slow down. >> he sees employment rising to just over 4. that would still be historic and he sees the funds rate, the idea where the market is now, 3 and a half to 4% sounds reasonable i just always long disagreed with the idea that there's a cleansing quality to recession recession is distortion of the economy, the economy normally grows, when it doesn't grow, it is distorted like an asset bubble is destroyed on the other side the idea of a cleansing quality
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comes from liquidation from the 1930s, wanted the federal reserve and monetary authorities not to intervene and like the idea of it flushing out. almost a religious idea after the excess you have to have atonement, it has basically been proven wrong in most economic history. >> to get back to the metaphor, the pendulum, it doesn't have to swing the other way. you can have an asset bubble, try to deflighate it, simply deflate to the historic norm is that what history told us >> no. it reminds me of when lee raymond said historic return on refining business was 15%, but no year between 10 and 20. i think the idea of josh is probably right, it doesn't come back normal to 15. i'm just saying this is a qualitative assessment
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we may have a recession. don't wish for it. it means people lose their jobs and livelihoods, distorted elements to the economy, and it is possible to deflate an asset bubble such as we have been through without a recession. i don't know if it is the likely call i think josh is brilliant when he looks at what the market is saying about the economy in different sectors. i am saying don't be wishing for it >> nobody is wishing for recession. clearly. >> robert kawasaki, probably a couple people. >> handful of people we don't associate with that wish for it. we do not. maybe if we get past this quickly, the markets can proceed to move higher that's the notion of this. jim? >> steve, look on the whole recession, of course nobody wants recession, seems like this setup is more benign than 2008 or 2000. number one, the banking system
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is in better shape than it was then i would say it is in good shape. the other thing, i have josh here, speaking to him as well. when you think about things that needed to be cleansed in the last two years, they've been cleansed crypto, mean stocks, specs what am i missing. i am missing something >> those are the big ones. >> high value stocks, right. i think that's right and jim, i have done a lot of reporting to try to find extension there could be leverage or other fallout from the crypto blowup into the banking system i have been unable to find it. looks like what happened to crypto is isolated to crypto at the moment same with the tech sector. lack of leverage this time around and also before you go on talking about challenges the economy has, which are considerable, there are assets worth considering. >> steve, we had a short shallow recession comparably speaking in
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2000 to 2002 it started with overspending at the end of the '90s on nonsense like y 2 k, everybody double ordered software and that fed into a telecom bubble, a wireless bubble, dot com bubble, and a lot of easy money. the end result of that was a stock market driven recession because none of those -- >> josh, not quite if you read what the nber wrote in 2001 about recession, it says there was a nasdaq bubble and it popped there would not have been recession except for the ensuing event of 9/11. that was the shock that ultimately, we would have survived that 2001 event or 2000 blow up without recession if not for 9/11 that's what the nbr wrote at the time. >> we can disagree bigger picture for shviewers isi is possible to have a recession not everybody loses their house
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and job. that's one recent example in my lifetime >> no. you wouldn't call it a recession, josh, if you didn't have a market -- for recession, it has to be prolonged, pronounced, pervasive. all those have to be true. not having modest rise in unemployment and call it recession. you might be suggesting we can have the assets deflate and have blow up in wall street without having extreme pain on wall street i think that's possible. and that's ultimately dependent on leverage in the system, extent to which you have other issues that create trouble into the real economy from the financial economy. >> you're always up for good debate, steve, appreciate it steve liesman. >> you're the best >> let's get to phil lebeau with a news alert. >> tesla trading near session lows now new study is out from jd power, one of the benchmark studies in
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the auto industry, initial quality study. basically 85,000 people answer a survey, what works, doesn't work in the first three months of ownership. results are out. most recent results are good news for general motors. look at the top five brands, buick, chevy up at number 1 and 3. overall, look at shares of general motors, gm brands have improved on the initial quality. that's the good news for general motors for other automakers this last year hasn't been great we focus on tesla. in the past, tesla hasn't been part of the initial quality study. jd power now has enough response from enough tesla owners that it ranked in the lower half in terms of relative to other brands one of the big dings on the brand, according to owners that just bought vehicles and had them the first three months, they're not crazy about the telematics about tesla people will think twice about ordering a tesla
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i don't think so don't forget we get tesla q2 delivery numbers friday, saturday, sunday i guess probably saturday we get those. today, credit suisse and deutsche a brought down expectations for q2 deliveries obviously because of what happened in china with the covid lockdown and reduction in production there that's the story regarding the initial quality study and results that have just come out. >> what are telematics. >> everything about connectivity, using the phone, some of the other connectivity in the vehicle and tesla is not alone in terms of people saying i am not crazy about it, this has long been a problem in the auto industry in the last decade. this is an industry that has really struggled in terms of us being comfortable with those features within a vehicle, either us not thinking they work well or flat out don't work well it depends on who is responding
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to the survey. >> important context phil, thanks nike shares lower after giving down beat guidance. stephanie link owns it find out what she's doing with with it now. half time back in two. in any business, you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there. researchers believe the first person to live to 150 has already been born. it could be you! wow. really? of course, you'll have to eat your greens, watch your stress, wear sunscreen... but to live to 150, we're developing solutions that help doctors listen to your heartbeat while they're miles away, or ai that knows what your body will do before you do.
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shares of nike dropping after a down beat forecast the stock off more than 40% from a 52 week high steph, you own it and bought more this morning. why? >> i did it is a recent purchase for me, melissa. i found at the time i bought it, small position, was down 36% i thought a lot of bad news was in the stock maybe it goes sideways here for the short term i think the quarter, there were things for the bulls, things for the bears. bears win out today, which is absurd stock is down so much. it depends on your time frame. i define this stock as quality on sale. first and foremost, they beat on earnings revenues came in line. if you breakdown the reasons, asia pack latin america, up 43%. north american, 5% up. in addition to the guide which was very solid, low double digit
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guide for full year, 18 billion dollar buy back. that's good news china was down 19% i was thinking china was down 30 to 35% because adidas fell 35% in china, and vf corp. they're taking share it is just painful now but that's all closure if you think china is going to open, why wouldn't you want to buy the news today, right? in addition, i know gross margins were hit, but a lot of that is inventories in china then also freight cost as mentioned earlier in the show. they had mid single digits price increases. i think they weather the storm well stock is down and out. and i like the risk reward. >> china reopens hit china stocks, too. you all don't necessarily have a lot of nike exposure, but you have china exposure via u.s. stocks michael farr, do you think the worst could be over for china given they are reopening, given monetary policy stance now is
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easing when the rest of the world is tightening or has tightened. and president xi has already vowed he will hit economic targets for this year. >> no matter what. if president xi says he is going to hit the targets, i assure you, josh is chuckling, they're going to hit the targets there's no question about it you go to the stall log and we never see you again. reopening china is very important, very important economically to begin to see this once growth engine of the global economy find more growth again is reasonable. starbucks in china was one that i own. i own starbucks, big presence in china. i like it. i think it will do well. i think if you listen to stephanie's advice over the past few months to really try to buy quality and upgrade a portfolio,
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when they go on great companies go on sale, if you're not a slave to the next trade for the next week or two and that you can explode the inefficient see of time, i think money to be made there reopening in china i think is good for stocks that are there and for the global economy, if another wave of covid doesn't hit. >> we're taking inter day look at shares of qualcomm which are spiking. details on that story next and taking a look at boeing. a bullish call on the stock. we debate that next on the halftime report. what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq
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welcome back want to check shares of qualcomm which we mentioned prior to the break. shares are spiking now, up by 5.3% there's a tweet thread out from a noted analyst who usually we follow him closely for what he says about apple he is talking about qualcomm in relationship to apple. he believes apple will continue to develop its own 5g chips. by the time apple succeeds, can replace qualcomm qualcomm other business should have grown enough to offset
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impacts of the loss of iphone 5g chips. this addresses, jim, a big concern and argument in the bear camp. >> i find it frustrating stock moves on this news frankly, i think the company already addressed this issue for the last two, three quarters, apple has barely been mentioned in earnings releases because they diversified i feel like allen rickman and galaxy quest, trying to be taken seriously as josh, shakespearean actor, struck in star trek satire qualcomm can't get away from the apple label even though they operationally are doing so. >> all right his latest survey that indicates tha that apple's 5g may have failed. watching the shares continue higher up 5% now. we will monitor this, bring you
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developments as we have them. let's get to shares of boeing they're higher jeffrey reiterating it at by buy rate of 800 potential aircraft orders one of the calls of the day. back to farmer jim, i don't know why they call you that >> long story. i will send you the video. i do own boeing. stephanie does, too, i was listen heing to her when she talked about quality i agree on quality this one has been troubling but i think is ready to come out bottom line, airlines need planes, 737 max is fuel efficient. they can only get so many a 320s near term, they need those beyond that, the immediate concern, when will faa allow delivery of the 787 to resume. talk middle of next month before the farm bureau air show if that happens, it would be unmitigated positive for shares.
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it is 787 deliveries run tg high zbler it has been painful. it is the 787 issues, but also lack of clarity from china certifying the 737 max to me, that's going to be the driver of the shares in the medium term. i can't tell you a timeline, but should be ready to go. as china reopens, i think they'll want more airplanes, especially 737 max because their airlines are 15 years or older in terms of airplanes on average. want to get to the headlines. >> here's the cnbc news update this hour. ghislaine maxwell is in a new york courtroom waiting to hear how much time she will spend in prison she was found guilty last december of conspiring with then boyfriend jeffrey epstein on multiple charges related to sex trafficking and conspiracy the prosecution asked for a
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sentence of 30 to 55 years maxwell is 60 years old. senior biden administration officials are working with taliban leadership on a mechanism to allow afghanistan's government to use central bank reserves for humanitarian relief without enriching the taliban government this would help prevent a hunger crisis that they could harm millions with a food shortage. airbnb announces a global ban on parties the company will ban disruptive parties and events, including open invite gatherings and party houses airbnb placed a ban on party houses, ruled out several safety features in 2019 after five people were killed an shooting at o onef its bookings half time returns after this
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if you look at those that decreased in smaller increments,
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it shows you what the business are. central banks, relying on deposits and loans weren't able to pay out as much >> right, it is about cash flow and operating model. i like the banks, most everybody doesn't like the banks higher rates give them more margin to make money, positive yield curve which we don't have yet doesn't. but we have perhaps the recession looming, has people concerned. credit quality at the banks has been very good when you have opportunity to buy goldman, sachs one times book, with dividends that you have, i see they're compelling i have been careful about the ones i own pnc and truist both more regional banks and goldman, sachs i am not owning the whole
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category i like these and the dividends >> josh owned jpm. >> i think they did the right thing if you have been listening to jamie dimon speak publicly, he is talking about storms and hurricanes and all sorts of colorful imagery, but please go back one generation and recall that his bank was one of the last banks standing, one of the only financial institutions left on wall street that was able to throw life lines to other firms, absorb losses elsewhere, take over big brands, et cetera i think heaven forbid if we were to have some sort of economy wide slow down that got worse and became a recession, i think banks are all fine but i think the judgment of not going above that dividend yield, why go to four nobody is streaming for that not like they're at 1% you get better than ten year
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treasury on equity defend. they're prepared, plenty of loan loss reserves, balance sheet flexibility. i think what they're returning to shareholders is fine. no need to go above and beyond. >> jamie, in the note it says i can't give up citi yet >> rather talk goldman, sachs or jpmorgan >> we're going to talk about citi >> citi continues to be a problem. >> they have 4.4% dividend yield to the point that josh was making this is the sword i fall on. traded 60% of tangible book value. that's the market's way of saying citi group will earn. if we do recession, i think it
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is short and shallow makes no sense to trade 60% of tangible book value. >> energy, rallying today. best performing sector this year, but the worst sector this month. we debate that next on half time
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losses in the s&p down 9%, headed right direction in terms of going positive. energy the worst sector in june,
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down 12%, still the best performing sector. credit suisse with the pull back on attractive opportunity. steph, you have been active in this space >> yeah, doubling my bench marks, 10% in the portfolio. it is a barbell strategy chevron, schlumberger, i was adding on the pull back. you have to be patient chevron is blue chip, bellwether, good dividend yield, good assets, doing the right thing in terms of buying back stock, increasing dividend downstream margins quite strong in the report. schlumberger, they make customers more productive, efficient. their margins can improve. i expect an increase of 200 basis points in margins. diamondback energy, they continue to increase the
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dividends and they offered a special one a month ago. it is good assets, and all the companies are making money at 40 to 50 dollar oil oil prices could pull back, but they're still minting money. >> you like the barbell approach. >> i have transocean, melissa. this is a highly levered company but supply/demand imbalance in energy will continue we have to drill in deepwater, harsh water. transocean a year and a half ago had new builds coming on, we were like what are they going to do now they're putting them to work at high day rates and existing rates, day rates are going up. this should be a sweet spot for transocean then on the other end of the barbell, kinlder morgan, should be a dividend payer. natural gas is the main thing they transmit.
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>> i prefer dumbbell approach. i really don't i don't think it matters which name you own, directionally they all do the same, plus or minus 2% for maybe faster growers i don't think much dispersion in the sector bet that crude is above 100, stays there. if that happens to echo stephanie and jim, these companies stand to make way more money than most of wall street thought they ever would again as recently as six months ago ieo is the etf that owns the producers. does not own the integrated. it is about american companies pulling gas and oil out of the ground and selling it for weigh higher prices than originally intended some names paid dividends relatively cheap compared to the market i like that approach, i don't want to make a mistake, have the whole sector work and own the
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sorry. just laughing at something stupid josh just said. the home builders have been a headache throughout 2022 but the group is starting to construct a a comeback
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rising nearly 8% in just the last week. a lot of these sort of down the supply chain plays for the investment committee sure within williams, right? >> and home depot. people know i like rail manufacturer like greenbreyer. i don't want to be that cyclical with home building whatever happens with new homes, people are going to buy them and renovate them. so, i'm very comfortable with these two names. >> and i'll go to you because you own lowe's and at the top of the show, josh was talking about the consumer discretionary names getting crushed because of consumers starting to show weakness and he mentioned home depot and you're in lowe's, michael. >> i am, melissa and as you see, maybe home sales
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start to slow, given the higher rates for mortgages and people staying in their home longer lowe's 12 times earnings and growing earnings at 12% with a 2.3% dividend. i mane, these things just get cheap. you're down 30/33% off the all-time high and people are going to continue to go and shop and do if the consumer's still strong enough, i think this is a company that make as lot of sense. >> i brought up your comment about home depot why is it this notion, they'll still have homes and fix a leaky faucet why doesn't that work? >> we know historically you end up with a period of time they've referred to as cocooning sob, when the housing market slows down and the opportunity to trade up goes away because rates make it too expensive. and all the sudden there's less
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turnover, less activity, you have is a phenomenon where people say i'm going to say. so, i might as well make this place less of a dump but here's why that's not going to work this cycle because everyone you know, with in america, already did that in 2020 and 2021. so, we kind of stole that from the process. now what you end up with is probably tough comps for the next four quarters home depot and lowe's probably two of the best run companies in the world. i like ao smith in the space they're doing hot water boilers. 70% of the business is replacement. and you can't not replace a boiler, as everyone who own as home knows for me, that will be a better place to be than something that continues to rely on continued consumer spending that's discretionary.
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tonight, talking about the best plays of china reopening.
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5:00 p.m. eastern on "fast money. final trade time here on half. farmer jim >> it's funny you mentioned china. wynn resorts this is a case where analysts estimates have been going up and as much as we have been pillaring analysts for potentially being on, i don't think they're wrong, given room rates and traffic in las vegas >> actually want to give people a follow up on a final trade fedex is a stock i picked up in the low 200s now it's back above the 50-day and 200-day. 50 day is turned up. relative strength rsi is 52. still has room i'm rolling up my stop, playing with the house's money if you follow me in on this one, i suggest you do the same. >> general mills i think the pet business is
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going to be strong tomorrow, based on the numbers i think a 15.4% total revenue. and again, price mix of 12%. let's see what it does to overall demand and commentary after that michael far. >> i like that donaldson companies is not a well known one but growing earnings at 10%. i think it's a buy on this pullback >> i'll see you tonight. "the exchange" starts right now. thank you very much, melissa. hi, everybody. welcome to "the exchange." cathy woods says the u.s. is already in recession but fed official says recession isn't the base case. who's right and how do you invest with so much economic uncertainty? and remember the pandemic boom company as like war b parker rushing to go public but no


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