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tv   Fast Money Halftime Report  CNBC  September 26, 2022 12:00pm-1:00pm EDT

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of course directionally bearish over the past several quarters literally writes in the note today, can you hear me now his note is it's taken time and much more simple language from the fed, but clearly beginning to figure out that the fed is serious about bringing inflation down. >> pain, one syllable, four letters. >> exactly let's get to dom chu in the half. >> thank you very much welcome to the half time report. it's the last week of a volatile month and quarter as well. stocks re-testing their june lows how much lower can this market go from here are we close to a bottom maybe that's in sight. it's been in sight for a while we'll debate that and what to do with your money coming up next our investment committee today is joining me, and joining me on set the jim labenthal. the s&p and nasdaq trying to
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snap a four-day losing streak. now, again, this is all going back to the post world war ii period it's also a third straight quarterly drop, possibly in play the dow, s&p 500 and nasdaq, you can see all there moving to the downside except the nasdaq composite just a quarter percent to the upside. ten-year treasury note yields, 3.81%, that's a slight tick lower. we can see 2.48% for the two-year as well as we talk about the current state of play, there were some folks i was talking to this past weekend and maybe, brynn, we'll start with you, who said things can get ugly on monday they're not terribly ugly on monday, yet the day is not over yet, i understand. but do you feel like there is something in play right now that we might be near this kind of a bottom, or we keep on talking about it and it keeps going lower? >> friday was really panicky,
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dom, and i heard the same narrative on friday afternoon. obviously we're late in september, which is not a good month for the market friday was just a pure risk-off market, without a doubt. so it's good to see. i mean, the market is down today. you would expect that. it would have been strange if it was up but it does feel that everyone is incredibly negative, for the right reason, by the way i feel that for the first seven months of the year the majority of people felt that the fed was kidding and that the fed really wasn't serious and they really weren't going to do all of these rate hikes well, now we know they are not kidding and they're going to do these rate hikes, whether we need them or not they seem really dead set on continuing to do them for the next few months. so i think that it will come down to earnings, because, to me, i'm a big believer in not fighting the fed and i've talked about that all year long but what's a little bit positive
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is 100% of the sell-off this year, dom, has been multiple contraction. you know, earnings, albeit most of it was from energy, are still positive so i think everyone is expecting earnings to come down. so we'll see what happens. but i do think it's constructive that earnings have been this resilient so far and we're already towards the end of september. >> it's interesting, jason, when we talk about brynn's point here, multiple contraction is no doubt in play. but you could argue that it's legitimate, given the fact that we've seen risk-free rates, treasury yields climb so much higher right now, it changes the calculus if i can get risk-free money backed by the full faith and credit of the u.s. government and the u.s. taxpayer, you think two-year note yields, 2.9%, i maybe don't need to pay as much in the stock market right now, so to brynn's point, multiples are in play, but how much of this in your mind is this expectation that earnings may come down, expectations, in the
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next several months as we head toward the season? >> yeah, dom, i think it's an important point. if i look to earnings in the next couple of weeks and look at what's just transpired, as you've already mentioned, yields are on the run, you have a two-year post at 3.4%, this trade we've been talking about for a while now, it's starting to slow down there is opportunities in fixed income, investment grade fixed income, i should say so for me, you know, as we kind of look at the markets going forward, obviously concern around the dollar, the dollar is up 18% year-to-date. there's obviously, as brynn mentioned, you know, the fed is r r resolute they likely will continue to hike throughout the end of the year the labor market is still strong so it's a mixed bag. we still remain relatively
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defensive with health care and energy being primary sectors that we like going forward but i do think there's an opportunity for fixed income, and as you look at a balanced portfolio going forward, and i think that is something to make sure that you pay attention to stay patient in this market. you don't need to chase here there's still a lot of volatility ahead that's how we're looking at the markets going forward. >> so jason's point, i'm looking at the yield, the dividend yield, so to speak, or the payout yield for high-yield junk bond type etfs and they're now north of 5%. that's a lot higher than they were just a month or two ago it makes sense as the price versus come down but is this attractive and i'm not talking investment grade. i was referring to high yield. investment grade and high yield are now both maybe more att attractive instruments for fixed investors. now i can find returns and payouts that are higher up on
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the capital structure than equity investors. >> so, dom, two different conversations that are unfortunately tied together by the direction of the market. let's first take the investor approach to the market right now. the 60/40 portfolio during the course of 2022 has had one of the single worst years in decades. right now if you're looking for the value proposition, it's presenting itself in that 40% allocation, whether it's investment grade, municipal bonds or high yield. so that's a place, given the dislocations that a long-term investor could gravitate toward right now. the unfortunate conversation right now in the market is directionally, we're trying to figure out, are we going to take out the june lows, are we going to go back to the previous high before the pandemic, or are we potentially going to do gown to 3,000? there's a lot of people that are communicating that to long-term investors. the problem is that is the very same people that are
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communicating that, they're the ones that are telling you that's going to be a capitulation moment and you're going to need to be fast enough because the market is not going to spend a lot of time down there so i think what it's important to do for longer-term investors focusing on the 60% allocation in their portfolio, fridays have been an ugly day during the course of a week over the next eight weeks, the next eight fridays before thanksgiving, put a little money into the equity market, assuming that you don't need cash if you need cash in the interim, well, then you've got to understand you've got challenges right now. the challenges are represented by the s&p, which has 68 new 52-week lows today it's represented by the elevated volatility it's represented by the fixed income market and then certainly it's represented by the volatility in the currency market. >> no joke can i stick with you for one second because this is important, because if you're looking for a place to make a new investment or add to a position, initiate a
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new one, trade around an existing one, it does sometimes require that you have the cash or the dry powder. what about the environment right now? i know that you've made some moves in your portfolio here to take advantage of certain other opportunities, or just to raise cash in case things get worse down the line. what exactly would you be selling right now to get some of that dry powder? >> well, again, in the interim do you have a capital need that's the most important question if you do, you have to look at where the market is, where i began my commentary where i said the direction of the market doesn't matter and quite honestly, the direction of the market right now i can tell you is as difficult to navigate and position towards as any time that i have seen since the early part of the pandemic but from a positioning perspective, recently i removed some of the idiosyncratic stock exposure that i have i sold out of goldman sachs, i sold out of amgen, a financial
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and health care stock. understand, equal to that, i'm putting more money into the etf which has an overweight toward health care, toward financials so what i'm trying to do, dom, is to have a more diversified approach, a more diversified approach to those two specific sectors versus having an allocation toward specific individual equities in this elevated volatility environment. that's something i would encourage people to look towards. >> so, jim, as i'm looking at you here, you've been nodding and shaking your head kind of at the same time as these comments. i wonder, if you look at the way that the three prior speakers have kind of positioned themselves in this conversation, there's got to be a case to be made here that there is still maybe downside left in this overall market are there reasons why you would want to lighten up on positions or kind of do what joe just
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said, maybe reduce the exposure from the diversification perspective and get into more areas like the cash market >> a few thoughts here, and there's a lot to sink our teeth into, and certainly the short-term direction in the markets is down. how long that lasts, i don't see anything that really turns that around until we get the earnings season going, and who knows what's going to come from that i still remain optimistic on what i've heard so far, notwithstanding fedex, that earnings are not going to be as bad as people think. to a comment that was made earlier, and i forget if it was brynn or somebody else, you look at where earnings are and current levels on the s&p 500, we're trading at 15 times forward. however, you have to look at the market as its constituents add up to it, so that 15 times is taking into account the technology still trades at 23 times, or put another way from the courtesy of our friend, if you take out the largest eight stocks in the s&p 500, that multiple drops by a full two turns. i am a price sensitive investor,
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so i don't own tesla, i don't own nvidia or amazon these are simply too expensive, and thus i'm looking at a market that is pretty darn cheap and pricing in the potential for an earnings decline to the question that you asked, i wasn't vociferously nodding my head or shaking one way or the other, but i think i like i heard what joe just said i think he's saying he's selling the pricier stocks and looking at the cheaper areas of the market and that's not necessarily because they're cheap but because fundamentally going forward you can see the potential for earnings growth above the market average in the financials, industrials, materials, and energy. joe, if i misrepresented you, i apologize. let me just state it from my perspective. i do think we're in a growth -- >> you do not. >> -- a growth-to-value transition right now and that's painful for people who are used to getting into apple and microsoft as the market leaders.
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they may do fine going forward, but i would look for market leadership elsewhere, as i thin you're doing, joe. >> jim, i would agree with your comments, but i also think from a strategic perspective, and it's important to speak to longer-term investors, not just people or traders that are trying to identify where the market is going to be in the next 15 minutes. because right now long-term investors are faced with significant challenges and really the only behavioral tool they have that they can be utilizing right now is to be diversifying as much as they possibly can in their portfolios, whether it's the entirety of a 60/40 allocation or if it's looking more specifically at single sector exposure that's what i'm trying to encourage right now. it's not that you have to pick the one stock within a specific sector where you're going to get the most significant outperformance rather just try to universally allocate toward the sector that you have confidence in, and i think you'll be rewarded on the
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upside, but more importantly, protect yourself on the downside. >> brynn, to that point, earlier we were talking about this idea, and you brought it up, whether there's kind of like this capitulation-type moment here. we did see panic maybe manifest itself late last week but it didn't seem like there was a real flush-that happened we did at the end of last week have some negative commentary out of david costen at goldman sachs, talking about this idea that in a base case scenario, the s&p goes down to 3600, that's roughly where the june lows were on an interday, i believe it was 3636 for the s&5. but that in a recessionary scenario, down 15% or so from those levels back then, if investors price in a hard landing, so to speak does that then mean that we should be waiting for that to happen if we think that a recession is inevitable at this
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point? >> two things here on david's note what i thought was interesting and so important is that he lowered -- they lowered their year-end target for the s&p but they kept their earnings the same so their estimate this year is 226 and it's 230 something for next year. so this is really important for the viewers, it's that it's not that he thought earnings were going to come down, it's that because rates are higher, what multiple do i want to pay for those earnings and so to me that's really important. and because we've seen rates go from 25 basis points essentially to 4 in one year, even if earnings on their estimates didn't come down, the multiple you're going to pay for the market in aggregate needs to come down as well. i think that this whole thesis about -- go ahead. >> no, i was just going to say, i would like to kind of explore that, the reason why is the
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curious part because we understand the math behind it, we can understand what the models say that multiples should be when you have risk-free rates going higher but there's got to be a fundamental case as well that you're seeing that maybe leads you to feel as though there could be some more downside because of anything from multiple compression to anything else in the marketplace or general risk aversion in general. >> so here's where i struggle on really having, like, draconian pull-downs in earnings, if we go into a recession it's not going to look like the recessions we've had in the past, for a couple of reasons. first of all, you still have these, like, 3 million people that are out of the jobs mark, so we have still 1.8 jobs open for every unemployed person and wage growth, albeit still under inflation, that 6% wage growth we have is the highest in 50 years. so you have a really robust job
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market i get it's lagging at the same time we're missing a bunch of people from the workforce. at the same time, there's still $1.87 trillion from the covid helicopter money the government gave everybody, so we're in this really unique time period that we may have a recession. i think growth is going to be very anemic. it's already been anemic to me, what i ask for is not are we going to have a recession, it's what's already priced in. so i think down here when we're in this, like, 3600, 3700 range, a lot is priced in and on october 13th when we get the next cpi print, if we continue to get lower month-over-month reads, i think that starts to set the ingredients for a bottom to begin in the broader market. >> there's a big debate about what's going to contribute to the bottoming process happening right now. certainly technology it is rebounding on a relative basis today but losing some
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steam. coming up, the worst two-week stretch since the start of the virus pandemic this is the big tech bounceback that has been all important to the last decade and a half of a market narrative any time there's a bounce it is in these technology names or technology adjacent names that are now massive in terms of all over volume. jason, i turn to you for this because many of these stocks are ones that you do own in the portfolio right now. i'm talking about the apple, microsoft, alphabet, amazon, tesla, meta type situation are these now levels where they become attractive again? >> yeah, so what i would say about tech, tech has been a great story over the last decades. rates have been very low, it's been a tremendous environment for tech stocks to run and obviously with the regime shift and this tightening cycle that we're all going through, a
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lot of these names have pulled back to your point, dom, the multiples have come in some. i do think there's still some more pain there, unfortunately, because as i mentioned earlier, i think the fed is very much engage and they'll continue to do what they need to do from their perspective to stymy demand and continue to slow the economy. so if you're looking at long-duration assets that are relying on credit markets to grow, those are the names that will continue to get hurt. on the mega cap tech side, i still like apple, i still like amazon, i still like a lot of these names just from the grow prospects and it's all about the innovation going forward in my view not to say that i'm jumping in these names right now, but i still think, you know, going forward over the next couple of months, they'll present some even better opportunities than there are right now to jump in or potentially nibble. >> so, jim, you had brought up previously this idea of growth versus value, this kind of movement between them, the
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rotation, if you will. there's no doubt that in 2022 growth has very much underperformed what's happened with value, although i would point out in the last couple of months we've seen a little bit of that kind of reversed course, meaning people have taken some of the money away from the value oriented names like in energy or materials and elsewhere, and then have started putting maybe money to work on the growth side, and that could be names like alphabet or amazon or apple. is this the beginning of something bigger or is this just something where you see it's a noise piece in the whole market narrative and value continues to outperform >> i think it's serious and i think the noise is one month of one style outperforming the other. if you just go back historically, these growth versus value shifts in leadership last for a decade, right? the '90s were all about growth growth was left dead on the road, amazon, microsoft, these things were left for dead and things like banks, energy did really well.
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and then, again, that reversed in the 2010s and now we're here in the 2020s and i think we're in the early stages of the transition it's in part because of the relative differentials between the multiples. we're now in a behavioral part of the transition where when people want to tiptoe back into the markets, when they think maybe the bottom is in, where do they go? they go to the tried and true favorites over the last decade, the apples and microsofts and amazons of the world they're saying i can't get too beat up in these, these were the things that were defensive in the last decade. they've never really been defensive. they've had good growth that promoted a multiple expansion that made them seem like they were a no-lose scenario. now you cannot get multiple expansion anymore. if you take a look at apple as an example, 23 times next year's earnings, i don't think that multiple is going to expand. however, it's earnings per share growth will be 12%, that's what analysts say for the next several years.
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so think about apple at $150 and if you have a 12% gain from here until the next year, that would put it in the $160 to $170 range. that would be fine but i don't think that's what people are going for. on the other hand, if you look at energy, which obviously has come down recently, there's a long-te long-term structural imbalance between supply and demand that can create multiple expansion for these stocks this is the transition i'm talking about. people need to come to grips with the fact that you're not going to get multiple expansion in what led you into this bear market you will get multiple expansion from those things that have been underperforming for years, but whose earnings per shares are now growing much better than the market overall. >> jim, i'm glad you brought up the earnings story, as well as brynn. you guys both brought it up. we're going to address that later on in the show because the expectations could change, especially for technology. coming up now, we've got oil sliding below 85 bucks a barrel, energy extending last week's
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losses still the worst sector this month, but the best so far this year by a wide margin. how to play that energy trade into the rest of the year, we've got that trade coming up half time is back in two minutes. go. go smaller carbon footprint. go these footprints. go saving energy. emerson technology can help heat pumps replace fossil fuel heating for a cleaner, low carbon future. go blue skies go. go boldly. emerson.
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what you just saw right there was a dow that's just about session lows off of about 220 some points. crude oil is sliding again, hovering around 77 bucks a barrel for u.s. benchmark prices energy is standing out as the worst performing sector so far this month but still leading on the year let's now trade it farmer jim, we'll start with you. where do you think energy goes from here? >> i think it goes higher. i think first we have to address the fact that it's down is most likely on concerns about a global recession, which we've been hearing just steady drumbeats about. but i think you have to recognize that there is a global imbalance between supply and demand before the war in ukraine it was thought that oil was going to go well above $100 a barrel now you've got a shortage of oil coming out of that that has been papered over with release frs the strategic petroleum reserve at its lowest level in 40 years. that's going to come to an end
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very soon and i think you can expect oil to start to move higher. >> jim, what's interesting about that is you bring up the strategic petroleum reserve. i want to throw this out to joe. we've talked about -- it's been reported, let's put it this way, that there was a level and it was 80 bucks for u.s. benchmark intermediate prices where the biden administration might look to replenish the strategic petroleum reserve. now we're down to 77 something is there any way that we can find a bottom for crude if we don't believe that there will be a large structural buyer like the u.s. government in the coming weeks >> dom, i'm trying to be as authentic as i possibly can today because i really believe this is as frustrating an environment since 2008 for all of us. everyone on the committee, yourself, the viewers of the show, this is frustrating, it's depressing but let me be clear on energy,
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okay the reality and my prior experience has taught me one thing, we're looking for capitulation in the market capitulation in the market generally happens universally. so you might have a very strong supply and demand situation in oil, which i think everyone on this show would advocate as it relates to supply, we are supply challenged for energy. just like month-to-date as you cited, energy is down 13% and it's the worst sector. energy is not going to be immune from a liquidation capitulation type of moment for the overall market and i think it's important for investors to understand that, because sometimes the fundamentals, they just don't matter so if president biden and his administration talk about filling the spr at $80, that's not a reason for someone right now to step in front of what
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clearly is a sector that's being used as a source of funds and take the other side of that. if you want to maintain exposure to energy on the supply/demand thesis, that's fine. but i think it's important to understand the environment you're in right now and try and convey in some possible way, how is it that oil can be down 13% in the worst performance for a sector in the month of september? that doesn't seem logical. but it's not logical because we've separated the fundamentals from the pricing in the market. >> speaking of fundamentals, brynn, you're on the record and you've been a proponent of energy for quite some time here. it's probably still, i believe, the biggest part of your portfolio right now and it's diversified across not just upstream but downstream names as well has any of the price action recently changed your investment thesis about energy or is this still the place to be in the coming weeks and months? and if so, where >> well, first of all, i live in
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texas, i grew up in texas, so it's a volatile asset class and it's not for the faint of heart. it never has been. so i think the way to play it right now, what i've been doing for the past few months, is continuing to sell calls against my positions that i own, like xop, viper, devin. to joe's point, the volatility and sentiment -- the sentiment is so low and volatility is so high, you can take the core positions, which i'm going to continue to own because of the fundamental reasons joe said, but i'm going to trade for the market i have, not for the market i want, and continue to sell calls against those individual names what's interesting is i had calls on pretty much every energy name i own and friday was so brutal, i got the opportunity to buy those back and close those out, because they had sold off -- the calls had come down in value so i think you find companies in the space, like devin has a free cash flow yield of close to 16%,
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versus the s&5 is 4% viper has an 8% distribution yield. and then you can sell calls to collect extra income i do think there's a lot of tourist capital and there are hedge funds and algos that are playing this if the market feels like we're going to go into a global recession that's deeper than priced in, oil will be a risk-off because of how it trades ultimately the supply and demand will reveal itself through good earnings and fiscal discipline by the energy companies. >> i would say that tourist capital does get shaken out pretty quickly when it comes to a market downturn. we'll see if that happens this time around. before we get any further, i want to call your attention to what's happening with the markets because it is no complete red across the board, and the reason why it's important right now is with the dow down 273 points, the s&p 500
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down and the nasdaq, these are now the lows of the session and you recall the nasdaq composite was up over a percent earlier this morning it's been a significant deterioration in the markets from the highs we saw in the first half of the trading day. the russell 2000 small cap index, more economically sensitive, if you will, down about 1.2% at this point down about 18, 19 points so we'll keep an eye on that. let's get to the headlines with bertha coombs >> thanks very much. here's what's happening at this hour a gunman with a swastika on his t-shirt killing 15 people at a school in central russia 11 children are among the dead, with over 20 of the 24 people injured also being children. according to russian investigators, the unidentified gunman died by suicide on the scene. the shooting occurred about 600 miles east of moscow a motive not immediately clear >> hurricane ian is moving near the cayman islands and closer to
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western cuba as it is now on track to hit florida as a category 4 hurricane later this week authorities in florida are beginning to issue voluntary evacuation orders for some low-lying areas with mandatory evacuation orders expected to be issued tomorrow. hurricane ian is also forcing nasa to further delay its anticipated artemis 1 launch by several weeks. nasa will roll the space launch system, rocket and orion spacecraft back to the assembly building for safety as hurricane ian continues to intensify and threaten parts of florida. the stars have just not aligned for that launch. >> i see what you did there. bertha coombs, thank you very much for that. still ahead, the latest trends in etf investing. and coming up on once, this show will be live from the most powerful investment conference and event of the year. cnbc's delivering alpha. just scan the qr code to
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register and join the in-person event, back in new york city since the pandemic started a t bloofig speakers. we're live don't miss it. "halftime" returns after this. we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i
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welcome to the etf edge portion of "halftime report" active traders always say they can do better in a volatile market but they're usually wrong. not this year. active managers, particularly large cap, are having their best years against their benchmarks since 2009 let's bring in the author of the report, the director of strategies 51% of large cap fund managers underperformed their benchmarks the first half of the year, 51% underperformed but it's the best since 2009 on average, about 68% of large cap managers underperformed, so it's good. what are active managers doing right this year? >> well, we've seen relatively better underperformance this year and there's a few key reasons. number one is rising dispersion or the spread among returns in the index. the greater the spread is, the greater the opportunity to add
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value from stock selection it can magnify the risk of picking a laggard. so there were plenty of opportunities to add value number two is the underperformance of mega caps which could help portfolios that are close to equal cap weighted. and finally value outperformed after decades of underperformance these are all key reasons why we saw some potential tailwinds in this declining market. >> i've been reading this study for almost 20 years. this is one of the things s&p is famous for, they've been doing it for more than 20 years. the results are generally pretty poor after five years, these are amazing, 80% underperformed, after ten years, 90% underperformed look at these numbers. what accounts for this astounding underperformance? can we make any conclusions? you've been doing this study almost 25 years. >> three reasons number one is cost active managers generally have higher costs than passive
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managers so right off the bat they're starting off with a higher hurdle two is a concept where equity returns, most of them tend to be driven by a few winners and that can hinder more concentrated active portfolios. and finally the professionalization of the industry there's no natural course of outperformance if you look back to the 1960s and 1970s versus now, it's been dominated by professional investors competing against each other and it's that much harder to generate that alpha. >> it makes sense when you explain it that way. we're going to have a lot more on the active versus passive investing debate with the founder and vice chairman coming up at 1:00 p.m. eastern. a lot more on why the future is unknowable we'll dig deeper into the fundamental problem. what is it about the future that is so difficult to figure out and is there a way to get around that maybe. etf edge "halftime" returns right after this
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some call it the lows of the day. it's 311 points right now, over a percent loss for the dow industrials, 29,278. s&p is 20 points above the june intraday lows. it's a half a percent decline, 60 points for the composite. the index is now at 10,807 and the reason that's important is because 1/2 loss is coming from what was a 1 plus percent interday just earlier on also want to call your attention to what's happening with the ten-year treasury note yield they are continuing to move higher we thought we might get some stability around the top of the noon hour, as you can see. but then from there things just started moving higher and higher and it's moving to the upside markedly so. 3.86%. this does represent the cycle high this is just about the same time we saw some of the losses accelerate in the equity markets
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overall. so those rising yields still playing a big part in that overall market story again, session lows for the stock market right now, the nasdaq down about 1/2 a percent. coming up next on the show -- actually, no, let's just get to joe really quickly with regard to the overall market narrative on what's happening. what we're looking at right now is a whole slew of, i guess, 52-week lows on the overall market we're seeing a whole bunch of them in technology, even more in real estate. this is very much an interest rate story at this point >> yeah, dom, before we had this conversation surrounding technology, i thought it was giving a little false sense of comfort to the market when you really went underneath and looked at technology right now you've got currently 88 new 52-week lows for the s&p 500. as you said, 16 of them in technology these are not just the nonprofitable companies. these are companies that a lot
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of viewers own i own some of these names. so you have an amd, which i've done horribly in adobe, intel, mastercard, visa, oracle i look at mastercard and visa, those are two names of interest for me for longer-term investors, maybe that's something you want to put cash into. communication services, you've got verizon, at&t, paramount and facebook making another 52-week low. financials, aig, city, capital one, energy one oak, horrible call on my part, 52-week low so i would study these 52-week lows if you have some cash you can put into the market you'll be able to find some names that you can add to your portfolio. but overall this is indicative of a market that's still under pressure in the near term. >> s&p 500 now down 39 points, session lows coming up next, mike san tilly joins us with his midday
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word and who hispanic heritage month, we have our cnbc supervising producer patty martel we'll be back right after this. >> there's a saying in spanish, ponte las pilas that translates to put in your batteries i want to do fire up the generation of latinos and latinas as we continue to build on the work of so many that persevered before us embrace your heritage. we are ought hispanic, but we are diverse, we eat different foods and wave different flags, yet we are bonded by a shared history. we are bicultural. let's own it it's our superpower.
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welcome back to the halftime report stocks are at session lows and we'll tell you what the state of play is right now. if you take a look at the major indices, the dow is down just roughly 275 points, so off the session lows but the s&p is down 32 and the nasdaq down 45 points. mike santoli joins us from the nyse with his midday word. mike, a new note now, just dropping from jpmorgan saying that fed hawkishness has left stocks very oversold that's the headline. and in that context, he says that some preconditions for a
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market bottom are falling into place. stocks are looking increasingly cheap and approaching deep value outside the u.s. and positioning is extremely depressed can you help us reconcile that commentary with some of the positivity we saw earlier in the session and in the fall we're seeing now >> well, i do think we came into the weekend, dom, without a doubt, with the oversold conditions building up i see them, you see them, we all see them the question is, are they going to continue get a response from the market so a typical retest playbook in an oversold market is you kind of don't want to see a half-hearted modest bounce in the morning. you want to see the rubber band get pulled back. sometimes it snaps more often than not, it eventually creates a lishttle bt of a reflex bounce i wouldn't say in every respect it's as washed out as it was back in the mid-june lows.
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but it's getting there it's in the zone i think one of the issues is beyond that, beyond just looking at the setup, the macro picture is not offering a whole lot of daylight in whatever direction you look the dollar index is up 5 p% in a it's not yet taking a breather obviously the global yield story is similar once those things perhaps burn up whatever upside fuel they have in the very short term, then we probably have more of a basis for something more than just that reflex bounce. marco as you know, he's been bullish for a while, trying to tactically say things are in place for some kind of low we always know the seasonals too are not that great this week, but improve thereafter. >> it looks like you'll have a fun afternoon trying to track everything down. >> oh, yes. we'll see you later on "closing bell." >> yeah. s&p 500 on tract for a third
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straight quarter of declines there are some areas of the market still working quite nicely we'll tell you what those are, emrom rew py them, hotola th fhe go. go lights. go big city lights. go spotlights. go stadium lights. emerson software helps clean energy become reliable electricity. go “good night.” go boldly. emerson.
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welcome back to "halftime report." while much of the market has sold off recently, there are some areas still working consumer discretionary is one of them it's up 8% jim, we'll take specific
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examples, wynn resorts, you own this stock it's surging on this macau opening report is it enough to justify the move higher >> i think it is, but this has been a very frustrating stock. i've thought for quite some time, it should trade around 100, just based on the u.s. operations, but there's this per pettium fear of a recession weighing on the shares if you believe what i said, that would imply -- based within the stock. now you're seeing some value to that come out, as you just pointed out, the macau opens up a bit. longtime viewers no i'm more optimistic on the u.s. economy overall. jason, one of your stocks is
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mgm. it's your pick, would you? >> to your point, it's down 32% year to date it's an expensive stock as well. what i would saw, macau has important with opening, closures overseas so i think that's what had places well with this stock. for me, the sports gaming industry is an opportunity and catalyst, so that's why we own it i think we could still continue to here. thank you very much, guys. epnal trades are up next ke it right here stocks are trying to bounce off session lows right now at citi, it takes a financial commitment
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be sure to tune into a cnbc special "the fed factor. brian sullivan will be joined by a panel of experts to find out how the federal reserve and interest rates are impacting your money in a significant way.
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i think there's a reason for that strength. general motors is my final trade. >> all right britain targetington >> i think china will reopen so i buy wynn, but sell the january 7750 calls you can collect around $5 for four months, about 7.5% yield, plus about 15% up side if it were to move there. >> i like it. >> i like it, too. low double-digit earnings growth, solid balance sheet. i like this company. i think it's an opportunity. >> joe terranova >> dom, i froze before, but on consumer discretionary, it's a strong quarter, keep in mind
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tesla is driving that. final trade, consumer staple, hershey. everyone loves chocolate >> all right thanks very much for the final trades let's do it for the "halftime report." the dow is down 211 points, bad, but not as bad as it was we were down 300 in the past hour we'll kick it off with "the exchange" with brian sullivan. we'll see you tomorrow. >> the markets are well in focus. here's what's ahead, stocks mostly sinking again, as we kick off historically what is the worst week of the year for the equity market. is there any side of a bounce anytime seen what do you buy against this backdrop three games their well positioned. plus the ceo of america's biggest energy-exporting port, joining us live on set with hi

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