tv Fast Money Halftime Report CNBC August 2, 2022 12:00pm-1:00pm EDT
see how they perform. >> starbucks of course big exposure to china, which of course is a major story today as the speaker landed in taiwan which by the way, i would point out, her landing marked the top of the session s&p did go green and has recently regained -- or cut those losses we're currently about flat at 4117 let's get to the judge and "the half." carl, thanks very much welcome, everybody, to "the halftime report. front and center, risk and reward why some say it is more attractive now than at any time during this bear market breakdown. is it really time to add stocks here we'll debate that. joining me stephanie link, michael farr, shannon sacoccia and joe terranova. we still have the dow and the s&p negative s&p basically flat there you go, it goes positive nasdaq good for about 4the
10-year yield going green. the bear market we've been in, this meaningful bounce that we've had and whether or not risk/reward has improved if it is, maybe you want to buy stocks if it hasn't, you want to run. which is it? >> yes and the problem is, scott, it's always yes the fact that the 10-year treasury seems to be determined to get to 2.5% right now is not a good sign. that doesn't happen when you have an expanding economy, right? so that's kind of a bearish sign for the economy. the yield curve is very close to being inverted inverted on the 1 month, 3 month bills, up to that 10-year level. so not showing signs of great strength on the other hand, we've got a terrific employment situation, 3.5%, 3.6% unemployment. the jolts numbers improved a
little bit i think if you go company by company and listen to these earnings forecasts, some of them are positive some of them are showing, look, we've got pricing power, solid balance sheets, our borrowing is in place, and prices have come down on a lot of these shares where the earnings story is still intact so i think this is not a market where you buy stocks without earnings, this is not a market where you speculate, but it is a market where you can improve quality as stephanie link has been saying for a long time and you can find those companies with better earnings at better prices. >> steve liesman has more right now breaking, steve. >> thanks very much, scott charlie evans saying that a 50 basis point hike in september is, quote, reasonable. 75 could be, quote, okay but he goes on to say that he doesn't think more than 75 is needed policy can change if the economy is in recession, but overall the
fed is working at a neutral rate and he says it has to go to a restrictive rate over time so this idea out there, a little pushback to this general idea that the fed is done and going to cut deeply next year. mary told jon fortt that the fed is nowhere near almost done. she said she has been portrayed in the bond market and we expected this and talked about this last week this idea that the fed the pivoted, there is now a pushback by the fed or some fed officials that some kind of imminent or early 2023 rate cut is in the works here. >> although 50 in september being reasonable, you know, he could have said, well, 75 seems more reasonable. he did not he used the word "reasonable" around 50.
does that jive with where evans has generally stood? are you surprised at all by the remark or no >> no. i think charlie is one of the more, what do you want to say, cautious rate hienkers out there he's on board with raising rates with the overall thrust of fed policy to fight inflation. but he wants to go among the fed members a little bit more slowly i think he's right with the center of the board right now. that's probably depending upon that inflation report we get next week in line with a 50 right now but that could change to 75 if we do double digits and don't see any commodity price declines show up in the cpi. some sense that maybe we've reached that peak inflation and that it will come down but remember, scott, the number now is 9, the number we've got to get to is 2 i think mary daly is reflecting that and i don't think charlie would disagree either. >> steve, appreciate it. thank you for those breaking
headlines. stephanie, the incremental moves we've got since the evans headlines have crossed are incrementally more positive, if you want to say it that way. stocks coming off the levels they were at when we started the show, yields touching a tick lower on that. it goes to how we're trying to game what we're supposed to do, whether the risk/reward scenario is in fact better for investors as marco said yesterday, it's the central question. >> i think we're going to remain very choppily in a trading range. i think there are positives and i think there are negatives. i don't think you get too euphoric and i don't think you get too negative on the positive side, inflation is starting to come down if you look at energy prices, food prices the prices paid yesterday dropping 18 points, the lowest
level since august of 2020 that's very encouraging but we're still too high we're at 9 in cpi and have to go to 2 but those are the things that we're watching, but we are making some progress on the negative hand, we don't know what the fed is going to do we don't know what they have already put in place and what that's going to lead not economy because there's a lag effect we also know that the economy is slowing and it's slowing faster than expected. so i think august and september are typically very chopp py monh in general on one hand earnings are holding up and actually i'm encouraged we're not seeing a lot of companies lower guide, so that's good i think that some of the stocks that i'm looking at are down a lot, 20, 30%, discounting a lot of bad news. so i don't want to get over my skis in terms of sector, overweights or underweights. i want to be balanced. but i am looking for opportunities when the markets correct. you don't have to chase in this market. >> so, joe, 10-year, 2.70,
moving a little lower 2.60 at what point are falling bond yields a problem right now it's oh, bad news is good news because it keeps the fed from being as hawkish as you thought they would be. at what point do you see the alarms going on in terms of falling yields and what that means in terms of a recession? >> well, my view has been that we're in a recession i'm of the view that bad news is good news. we're combatting inflation we don't want to pivot you don't want to buy the market because you think there's going to be a pivot. you want the federal reserve to remain committed and disciplined in continuing to normalize rates higher and enact balance sheet tightening so bad news is good news -- >> how how is bad news good news? do we want a recession is the market priced for a
recession now? >> yes the market is priced for a recession right now. it's not priced for a deep recession. and i'm sorry, but an economic contraction and a slowdown in demand is the price you pay for normalizing the ridiculous abnormalities of the last two years in the economy for the accommodative monetary policy and for the stimulus you have to weaken demand to combat inflation. >> yes, you do, but you're assuming that the fed can thread the needle why do they deserve the benefit of the doubt that they can in fact do that >> so as an equity investor, the comfort that i get is that 319 s&p companies have reported. we've got 14.8% revenue growth and 6% eps growth. there's resiliency consumer spending is strong. tonight you're going to hear from starbucks to get a further
glimpse into what consumer spending is like chipotle told you consumer spending is strong so the consumer and corporate environment is going to be the ones that are going to buffer a much deeper economic contraction. i'm not relying on the federal reserve for that what i want the federal reserve to do is respond to the inflation by staying committed to further tightening policy. >> well, they seem intent on doing that. >> good. >> it's undeniable, shannon, at this point risk is definitely back on. bank of america says the fifth week of buying, clients were net buyers of equities for the fifth straight week. hedge funds, institutional, retail citi is talking about positioning. watch out for short squeeze risk increasing there the ark rebound is up 13% in a month. all of these are signs that risk is being put back on is that wise or not? >> i think that there is potentially some risk in that
for the next six to eight weeks, scott. i think that people are perhaps getting a little too enthusiastic to your earlier comments about a pivot but to joe's point, and i think it's an important point, if you look historically about when stocks sell off, they sell off into and at the beginning of a recession. and so whether the nber decides that this is a recession or not, we certainly having a meaningful economic slowdown. have we priced that in is your question perhaps we have in certain sectors and industries again, i think you need to be thoughtful these flows that you're talking about are coming into the certain parts of the market. there are interested investors in the high valuation growth names. those less profitable or not at all profitable companies but i think that if we look at 2023, those aren't necessarily the ones that are going to have this v-shaped rebound. i think there is going to be tailwinds in terms of execution by management teams. i think overall growth will be a
headwind if you're buying equities because you think we're going to have a v-shaped sharp recovery in the economy because the fed is going to pivot and there's going to be easy money, that's not where i would be investing but if you're looking out two to three years and you want to have earnings growth and some cash flow and benefit from that, then yes. bonds still have a ways to go. they're going to go back up above 3. there's no doubt in my mind that's going to happen but in the equities are to add to over the next couple of years a good place to be, but you don't have to do it today. >> it's not even that selective, steph, when you look at the data back to the bank of america inflows, in nine of 11 sectors, right? so it's not selective. led by tech and comm services. that's where the actor has been of late. do those sectors, apple, et cetera, do those hold the key? some suggest that they do.
they now hold the key. apple is above 160 you look across that space and a lot of those stocks have done pretty darn well, ex-meta. >> yeah, and that's the one that i own. >> it slipped. >> yeah, of course technology and comm services is about 35% of the s&p 500 so of course these two sectors have to do well. i think you are seeing pockets that are doing well. cybersecurity for one that i'm very interested in seeing how fortinet does, i own that for sure and i got back into broadcom those are more cyclical so if they can do well, that is why amd is so important today. if they can do well, that gives a little boost on top of the july gains that we saw i don't think it's just all technology look at some of these energy companies and what they're reporting and the free cash flow and special dividends that keep on coming and the buybacks
chevron last week, it's amazing what they're doing in terms of putting the cash to shareholder appreciation and so i like that sector as well but again, i don't want to get so overweight one sector or the other, not in this environment the market is giving you looks and you can buy those looks on the declines that's what i've been doing. i know we'll talk about that in the next block anyway. >> i just wonder if some respects in some point are they false looks, what the market is giving you let's bring in our halftime headliner, veritas financial founder greg branch. he joins us now. he likes to mix it up, as i've learned very well in "overtime." what do you make of what you've heard? i wanted you to suck it all in and take it all in and think about what you wanted to come back at folks with what is it >> i agree with much of what was said at the end of the day it depends on your timeline i think we'll see continued strength from those we saw
strength from. consumer spending and travel is strong you're not only seeing that from the companies themselves but the credit card companies a few weeks back we saw growth and sustained demand at some of the tech companies. some of the cloud businesses grew 30% at amazon and google, 40% at microsoft yes, it was less than it was a year ago, but it's still sustained growth that we're not seeing from other sectors. the problem is, and here's where i disagree with charlie a little bit, is that i do think that dave pell probably made a mistake. he probably did not mean to signal to the market that the program of fighting inflation is over and that's what he did. that gave the green light to put risk back on in a very foolish way. >> well, he didn't say it was over, he just made everybody -- not everybody. he made some people feel as though this was the beginning of the end. not over, but that they weren't
going to go overboard. >> the program itself, scott, was over and that everything from here on would be a singular ad hoc decision based on the data that's very different than saying we have an aggressive multi hike continued for the next six months program of fighting inflation while i agree with stephanie there is a lag effect to what they have done thus far, we haven't seen the impact. we've been claiming that it's peaked at 7%, others claimed it's peaked at 8%. and some claim it has peaked at 9% there are things i expect to power through, like the energy component. while we saw a pullback yesterday, there's structural reasons why i think they'll re-emerge. at the end of the day we haven't seen a significant impact yet from what they have done so it was curious to me that he would,
depending on how you heard it that he would sidestep and say from here on out it would be singular decisions based on the data we haven't seen any impact from the previous actions >> you say it the right way too. it's depending on how you heard it the market obviously heard what it wanted to hear. fed officials have come out and suggested that maybe all of you guys got it wrong because that wasn't what the message was. nonetheless, the market is sticking with the story because there hasn't been a great reversal in the days following what powell said and how it was interpreted. what about greg points. >> i think he makes a lot of great points i think we're actually in agreement on a lot of things i think it's going to be choppy because we just don't know what the fed is going to do and that is a big unknown i don't even think they know what they're going to do greg, i want to ask you a
question do you think they're going to be able to shrink the balance sheet as aggressively as they say they are expecting to do? >> well, the data says no right now, right, steph? they had a target for june and didn't meet it from what i've seen so far they haven't met their july target so that's going a lot slower than i think they anticipated based on the data we've seen thus far the answer would have to be no. >> bad news is good right, right, michael farr? because if they can't unload the balance sheet, maybe rates won't go up and main not as much tightening as the market thought and then bad news becomes good news for stocks. mr. farr >> clearly they're trying to be careful, scott they're trying to be careful that they're having a big impact their big risk is that they overstep and tighten too much and that's probably what they're going to do. they don't need to compounding it by overdoing it on the balance sheet. i think jay powell got out of
that presser and went, damn, that's not what i meant. why did they hear that greg, you think that we're going to retest the bottom and you think that this bottom, whatever bottom comes, is going to come in september tell me why. morgan stanley, goldman sachs, still calling for lower lows how does this work out for you >> look, this is all pure conjecture on my part. but some of this has turned out to be right in the last year so i'll conjecture on at the beginning of this year, i was pretty vocal in saying that i thought we'd see a recession this year. in january my price target on the s&p 500 was 3800 that was fair value to me. there were concerns that i had at the time and i think by september we will be through many of them one of them was that analysts' estimates were far too high. guess what happened in june. we got a 3% reduction on bottoms up eps which if you throw out q2
of '20 was the largest we've seen in years. >> is that earnings revision going to be enough >> i don't know. but that it has started and that it is under way is a comfort to me just like we don't need to be at 3% inflation for the market to find comfort at some point it will indeed peak i don't know if we've seen the peak i doubt it to be honest with you. >> why not there's so many signals -- there are so many signals that suggest that inflation has not only peaked but is coming down. cpi is ridiculous, such a lagging indicator. it doesn't really tell you anything about what the current state is inflation is. that's why it's not even the fed's preefferred measure of it but it's obvious if you look around that many different areas, particularly around commodities, if not all of them, have started to come down. >> i think that there are a
couple of unfactored risks to the supply chain we haven't even talked about yet the fact that nancy pelosi is in taiwan right now is a risk to the supply chain and its recovery the fact that the ba.5 may have a widespread effect in china all of these things are structural issues that have yet to fully have their impact and at least for august and september while the consumer is still spending, as we're seeing from these earnings reports, that we'll continue to have pressure on both sides that the consumer hasn't withdrawn sufficiently yet so all of these data points that are showing moderation, we've been talking about that for months this is not the first time we talked about that and still we get 9.1% and 4.48% greg, thank you, as always that's greg branch from veritas. stay with us, we'll get to
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undoubtedly because stephanie link has just sold that stock. steph, now, we've talked about this one for a long time now correct me if i'm wrong, you've owned this for years unless you have gotten out and gotten back in recently, but this is a long-term name for you, isn't it? >> very long term. i do like tj a lot and i think they will benefit from the excess inventories we're seeing. but they have very, very tough comparisons in home goods and that's been a driver of the excitement of the market multiple going higher over time. and they also have 11% exposure in europe. and i am very concerned about europeand the consumer over there. so i felt like i did make some money. last year was a disappointment but i made some money and i wanted to put it in other names that i thought were more compelling. >> let's get specific. how long have you oendwned the stock? >> i think it's been five years.
>> at least. so it's up 75% in five years gr granted, it's down 19% year to date and it sounds like they'll give more back and you want to get out before they do so. >> i think so. the home story was the excitement and that's why it got the multiple that it did it trades at a premium multiple to other off pricers but i think they're going to struggle really good company. they even beat last quarter and raidsed their margin target but i think it's the prudent thing to do to take the money off the table. >> let's talk about what you bought more of let's stay retail. target >> yeah. it's now my largest retail position because i keep adding to it. it's down 28%. we all know the bad news we know $2 billion of inventory that they have the margin number is 2%, down from 8% at the beginning of the year and it trades at 13 times,
the widest spread to the s&p 500 in ten years i just think the second half of this year and definitely into next year is a better setup as they continue to gain market share against its competitors. >> you really think they kitchen sinked it, right because the knock here was that they thought they gave you the picture and then they had updated even more negative than they first thought what leads you to believe that it's not going to continue to get worse, the walmart effect? >> the walmart waited in terms of talking about their numbers coming down for the second time, right? so target just went out a month after they lowered guidance, so they want to get on top of it. maybe i'm wrong, maybe i'm a quarter too early. but i think this management team is excellent i think the balance sheet is terrific, the market share is good at 13 times, let's say i'm wrong on earnings. maybe it's 15 times, so if numbers have to come down further, it's still super cheap in my book. >> joe, you just sold target
let's debate this. what do you make of what steph had to say here? >> i don't see it. the revenue is on the decline. it's been on the decline over the last four quarters stephanie cites the momentum which has been awful i swaupped out of target and wen to dollar general which i think is better. the one thing that could bail target out could be a relaxation of some of the tariffs but i disagree i want to be on the sidelines with target. >> steph, last word on that one? >> well, when they lowered guidance, they didn't lower comp guidance or traffic guidance, they just talked about the shift changing so it's just a matter of time for them to clear these inventories and that's what they have been doing. so i think it's a top notch company and this is exactly my definition of buying quality on sale. >> so speaking of stock that's been awful, nike, right?
you bought more -- well, it has been awful why are you laughing >> i know, it's been awful i just bought it recently. i jut bought it a month ago. >> no, i know, i know, i know. why are you buying more of it? >> well, it too is trading at the low end of its historical range. it's not as cheap as target but this is the number one player in the industry it's gotten hit because of china. and i think china as they reopen, that will help they have gotten hit because of higher inventories because of supply chain i think these things get worked through this year and into next year and i think they can grow the second half of the year dou double-digit earnings story. they're talking about double-digit numbers on margins the next several years and as margins go higher and demands are better, you have operating leverage it's not going to happen next quarter. in fact the quarter could look ugly because of china but i think over the long term you are getting the number one company
on sale. a blue chip balance sheet and free cash flow. >> now, that brings me to meta which you bought more of doubling down. whatever you want to call it why? >> i'm trying to buy low, lower and lower and lower. if i'm not going to buy this at 13 times earnings or eight times e eb ebitda, i think that i never will buy it. so i like the free cash flow $24 billion. the user base is quite strong and i think they'll get reels monetization fixed they did do a much better job this past quarter. we knew they were going to lower guidance so this is an ugly story for now but the next couple of years it will work its way through it and you'll see a higher stock price as a result. >> you like a good turn-around story. we'll see what happens with this one.
steph, thank you. bertha coombs has the headlines for us hi, bertha. >> here's our cnbc news update at this hour nancy pelosi arriving at her hotel in taiwan within the last hour she's expected to meet with the president tomorrow taiwan's foreign ministry says it shows rock solid u.s. support. british airways suspending the sale of short haul flight tickets departing from heathrow airport after airlines were asked to limit new bookings due to a severe labor shortage. and georgia residents can now claim embryos as dependents on their state taxes according to the state's revenue department any taxpayer in georgia who has an unborn child or children with a detectable heartbeat after july 20th can claim a dependent on their 2022 taxes. and this just in, baseball superstar juan soto, the winner of this year's home run derby,
is going to the san diego padres that's a report about a half hour ago from espn which reports that the washington nationals will also send first baseman josh bell to the padres in exchange for a package of players just ahead of today's trade deadline so rough to see your favorite players moving on. over to you. >> a bummer in d.c. >> yeah. >> then again, they literally have gotten rid of nearly everybody in the last few years so maybe not a surprise. bertha, thank you. still ahead on "the halftime" the state of industrials after caterpillar falls. plus why uber shares are soaring. don't miss santoli's word coming up when we come back 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.
it's spotless under the sink. and kids can be kids. order your american made products at weathertech.com. welcome back the industrials trying to hold on to gains today after climbing 9% last month. the sector still is more than 10% off of its 52-week highs one of the group's top holdings is caterpillar it's dragging the dow down steph, you sold this one in march. >> yeah. >> you prefer deere. >> i do. >> why what's the difference? >> they're both cyclical, but cat is ultimate cyclical, right? if you think the macro is slowing, like we all know, then
you don't want to own it i tell you, it's hung in there it's beaten the market and a lot of other stocks in the industrial sector. i thought the quarter was just fine orders were up 11% talking about margin expansion in the second half of the year because of pricing power they have supply chain issues. so it's down today but i don't think it's going to stay down. i like deere pause i like the precision farming and technology that they offer, which helps their margins expand between now and the end of the decade. >> joe, deere over cat for you too. why? same reasons >> yeah, i like the ag story, i like the replacement cycle on a lot of tractors, i like the autonomous nature of what's being introduced i just think as stephanie said, you've got such an economic sensitivity with caterpillar, deere at least you've got a supply demand and balance that we know is present for
agriculture. i'd stay more towards agriculture, more towards defense when i'm looking at the industrial sector. >> michael farr, valmont is your industrial pick. >> it's one that i've owned for a long time, scott, and i've been buying on your show a couple of years. it's up on the year, it's in the right space. they continue to grow at 10 to 15% earnings growth. they are in that sort of agricultural space but also an expansion in 5g and all of these other things that continue to roll out i have more of a diversified portfolio there. so fedex, raytheon all in that space and i'm happy with all of them, particularly their balance sheets strong good balance sheets will endure markets like this and then you get performance out of these companies like you do with valmont. >> shan, why is honeywell your choice >> i think between honeywell,
rockwell and youunion pacific, i think we think about what we're looking for. we're looking to reimport manufacturing back to the united states and so for us, i look at cat. i'd rather be in the front end of that and something like martin marietta in terms of the inputs into road building rather than heavy machinery, but i don't disagree to steph's point, this might start to look a lot more attractive if we do start to see some re-emergence of secular tailwinds, especially in china but for right now it's just not a look for us. >> steph, have you seen this run ge has been on >> yes, i have >> it's up 12 straight days. >> i know. well, boeing news certainly helps ge because they supply the engines to ge. but the quarter was pretty good. organic growth 5%, orders up
26%. even health care where they have had supply chain issues up 4%. these are all really tremendous numbers from this company. i think they're doing an excellent job. free cash flow is better than examine expected as well they should do $3 billion in cash flow this year. they have been in a deficit for years. so the turn-around is starting to work, knock on wood. >> exactly all right. we'll take a break, come back and talk uber shares the company turns cash flow positive for the first time. the committee's take on that is next the pursuit is on. the pursuit of outperformance at pgim. with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients in 52 countries. and outlast, with long-term conviction that looks beyond today's volatility. join the pursuit of outperformance at pgim.
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we're back uber shares are surging after a strong quarter that saw revenue grow 105% year over year the company now cash flow positive for the first time. now, commentary today is leading with joe if i had cash and room in my portfolio, i would buy uber. you've had opportunities to buy it, you haven't to this point. why not and why suddenly now >> so i am fully prepared for you to direct that question at me and it's a great question. >> why wouldn't i if you said
cash >> let me wax poetic about uber. >> go ahead. >> gross bookings up 33% a record number of users at 122 million. management telling you how confident they are on the outlook. introducing uber eats, the delivery component of this business during the pandemic which differentiates them from lyft dramatically. so why not buy the stock because i don't have room for it in my portfolio until i spoke to our producer, patty. and i went through my entire portfolio and i said which is the one name that i would sell to put uber into the portfolio i already own bank of america, i own morgan stanley, i own goldman sachs and i bought jpmorgan too barndarn high.
it's just sitting there doing nothing for me how about i kick jpmorgan out of the portfolio and buy uber i think that's what i'm going to do. >> so it's not something you've done yet but you're going to do it >> i am going to do it that is correct. >> when are you going to do it, today? >> maybe i'll show up on "overtime" this afternoon and announce it then. >> i'm going to pin you down. >> don't do it, joe. >> why, michael? michael, why not >> joe, finish your thought, then michael respond let's do it that way >> michael, michael, i think there is a 20 to 25% upside ahead based on what i heard today from uber. i don't think i'm getting 20 to 25% from jpmorgan based on what i heard from jamie dimon
>> yeah, okay. here's what i can't do, though, joe, and maybe you can do it with your discipline but i can't with mine. the company doesn't have earnings as much as i admire the ceo, as much as what i think that they have done in the turn-around and the new innovation and everything else, they don't have earnings i just can't let my admiration for a ceo and appreciation for the innovation, stephanie and i were talking about this earlier, won't drag me away from my discipline not owning earnings in a market like this can be perilous. if we see another down leg here, a company like uber could get slammed and putter that performance long term. i'm looking for earnings, joe. >> michael, you called it to our producers a speculative stock. really >> yes. >> you think uber is a speculative stock? >> absolutely, yes anything without earnings is a speculative stock, absolutely. i need to see earnings and i want to see earnings growth and i want to see a management team that actually knows how to grow
earnings and manage debt during a very difficult environment this is a brand new company, new innovation, they're getting through it no, not when i can own other solid balance sheets and growers. money is too hard to make to play with. >> you know, there are some who would take issue with you calling it a new company you can make the case that it's a mature company they still have innovative things that they're doing to try and grow their business. i don't know, citstephanie link where do you come down on this >> i'm too mature to not call it new. >> steph, settle it here there's not only the uber, there's not only the uber decision here, there's the getting rid of jpmorgan decision here >> i would not own jpmorgan. it's too expensive, it always has been and i don't think they delivered the last two quarters so i have no problem selling jpmorgan but i wouldn't sell any of the other banks joe owns.
the uber quarter was a thing of beauty across the board. adjusted ebitda was 800 million better than last year and that's huge for a company of this size. total revenues beat, free cash flow is huge so it was outstanding. i get why the stock is up. it's still down 33% on the year. i fall into michael farr's camp of it doesn't have earnings. in this kind of environment when the fed is raising rates, i think it's just going to be a challenge. so yeah, maybe it pops, maybe joe is right in the short term and it could pop and the momentum traders get in it, but i don't think it has the longevity, not given the macro background. stay with us, santoli's midday word is up next in two minutes. at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect.
[zoom call] ...pivot... work bye. vacation hi! book with priceline. 'cause when you save more, you can “no way!” more. no wayyyy. no waaayyy! no way! [phone ringing] hm. no way! no way! priceline. every trip is a big deal. we're back on "the half. mike santoli is here with his midday word. what did you think of your midday word? we talked about bad news is good news is that what you're feeling a little bit as well >> bad news in the sense of the job openings numbers perhaps that's a pretty kind of painless way to absorb some weakening in the labor market. obviously that's the softish landing scenario i think it tells us that the treasury yield curve is the market's mood ring right now so once it stopped flattening so dramatically you've got a little bit of a lift of equity.
the s&p 500 wants to see what the june highs look like that's just above where we're trading right now. you still have some support from very, very kind of underexposed large systematic hedge funds everyone pointing if there has to be a change, if the market doesn't buckle follow-on mechanical buys. i don't think it tells us, though, where the macro story in the next few weeks will support a further upside. >> i read that b of a flow down, five weeks of buying, across all areas. hedge funds, et cetera, it's like risk is definitely getting back on, at least sentiment towards that direction seems somewhat robust. >> but from super-washed-out levels with the sector of high net work retail, which has not exited the market on the way down, professional money was basically as underexposed as you tend to
it, what do we think here? >> it won't be a pretty quarter, because china was closed the whole quarter. i think the u.s. will show resiliency they accomplished 12%, with margins better than expected i expect the u.s. results to do better but i own it as a long time. they have an analyst day in september which i hope will be a catalyst, and they suspended the buyback to invest in the company over the next couple years, which is what they should do i like the story for the long term, but tonight will not be a pretty print. >> michael farr, is that your expectations, too? >> yeah, don't have your hopes too high i've owned starbucks a long time i'm not going to sell stock because of a tough quarter, particularly when there's something understandable as china. i think howard shultz gets this done i'm eager to see what happens.
>> shan, is that what we learn tonight in o.t.? >> i think so. definitely some concerns about gaming slowdowns we'll see if they comment on that we think amd will continue to grow market share. that will allow the stock to appreciate that's what we're looking at this afternoon. >> joe, you own amd as well? >> i have a lot the stake this evening, recently buying nvidia, i need the gross margin around 55%, a little less than $of 2 billion. but there's a lot at stake that must be why you're with me in overtime. we'll take a quick break and come back with the final trades, come back with the final trades, next this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing!
i think it will constitutional come back down 36%, growing earnings i like disney. their businesses are coming back, "thor" is doing great, stream sergeant doing great. >> stephanie diamondback energy. report free cash flow, a new $2 billion buyback. they're minting money. >> shannon >> workday we bought this one late june this is the great example of a software stock that can go subscribers. the next couple years, incredibly month in a hybrid environment. >> joe t.? >> on semiconduct ore. we spoke about it yesterday. take advantage of the earnings, the stock has bounced back nicely it's going to get there. >> michael farr, give me
something on paypal which you own. that stock has been obliterated. what are your expectations tonight? >> yeah, i've started nibbling on the stock i couldn't own it for a long time i think it will be one of the leaders. yes, this company will make some money. at these levels, this is when i start to buy, when everybody else hates it. good to see you, everybody i'll see you in a few. "the exchange" is now. i'm jon fortt in for kelly evans. here's what's ahead. just three days ahead of the july jobs report, mary daly tell me there's still a long way to go in the fight against inflation. what she thinking needs to happen with in -- we're going to talk to the ceo of misfits market