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Hey, scott. Thanks for having me. We keep moving away from this bottom why are we going to have a shock drop once again, as you put it well, its a great question so most of these indicators are absolutely useless over time the ones that actually work are the ones most correlated by extremes in human nature in other words, you get a human nature extreme and inflect so what happened this time, and we measure like a shock drop is looking at a tenweek rate of change on the vix. And when it gets over 125, which it did, we looked at times in the past where that kind of quote, unquote, shock happens. And you typically get a 5 rally off of that shock low. So weve had just about a 5 rally off that low and then you go down and retest and typically break that point so i think, you know, what were calling for i get it. Guys are jumping on the retest bandwagon. But its typically what happens when you get a shock. Well, we already kind of had a retest and weve also moved far more than 5 off of what the low was. Correct and so now that immediate retest, scott, doesnt count i mean, every time that you have a shock and the instances that we put in our note, every time you get a shock, you get an immediate retest you even did it in 87, youve done it in any major shock environment. But thats not the retest were talking about. Were talking about, you bounce the market back, people are d g thinking, okay, its safe to come back in and then you go back down and retest that low. As you know, im one of the highest targets on the street and im probably too low i want to make it clear. I am absolutely not calling for people to trade this low or move im saying, get ready for that lower move, be prepared for it, when it comes dont let it shock you. And you want to take advantage of it. You say maybe the retest doesnt count. Maybe the correction shouldnt count. I mean, maybe no, no maybe the correction was totally overdone maybe it was ack scentuated by products until we sit here today. So the tenyear yield moved up 20, 25, 30 basis points and were falling out of bed because of it . It could be i mean, anything is possible but you could have said the same thing in 2010. Remember the flash crash i mean, honestly, i went to the bathroom, and i came back, were down 500 points. I couldnt figure it out and all of a sudden, you bounce back from that and then you made a lower low. So i look back, and again, scott, its not about the fundamentals the fundamentals, even with higher Interest Rates, are still very sound again, thats why were at 3100. The problem is, its a human nature trait when you get so few bears and so many bulls, and you shock them you get this rebound rally and when i say that the retest the immediate retest doesnt count, of course it counts it all counts. What im saying is, it doesnt count as the retest that generally happens after a shock drop, which is typically 30 trading days later so what im saying is, over the next few weeks, youre going to get this grind lower, and i absolutely want to be buying that grind, and use the liquidity to our advantage in the financials, info tech and industrial sectors. Thats easy to say now. We have another drop of magnitude, what peoples sentiment is going to be aaron brown has a question for you. Scott, you know my line corrections are only natural, normal and healthy until you actually get one then everybody kind of fades, saying its fundamental. And this one should be no different. Im sorry, erin. No, thats okay so tony, we agree that it was not driven by fundamentals this was a balltargeting move that was purely technicaldriven with that in mind, we have seen a lot of that supply now taken out of the market. We have seen a lot of those ball funds go to zero or get considerably draw down in terms of total assets under management so with that now clear on the table and not yet not outstanding there as a potential driver for this move, who do you think that incremental seller is going to be, and whats going to drive that because its not going to be a technical move were both saying that fundamentals here are positive so whats going to be the driver of that move or who was going to be the driver of that move . Well, actually, erin, i wouldnt say that it wasnt a fundamental move we came into 2018, expecting increased volatility and increased up side. And in mid january when we called for a pullback in the market, it was based on volatility of fed policy in other words, up until that point, you had absolutely no fear that the fed might do Something Different than what they said they were going to do. Maybe even less. All of a sudden, you get the labor report, and people start to get very nervous that they cannot predict what the fed is going to do. And that creates angst, which creates volatility so your sellers are those that are fearful of inflation so i dont want to say it wasnt a fundamental reason for the pullback as a matter of fact, i think the gun was the etns and the volatility vehicles you talked about. But i think the actual shooter, the way that it fired, was off of fear of fed and higher Interest Rates. So tony, its joe weve had this significant snapback and i think were really not paying enough attention to what is going on here in the growth story and a lot of the nasdaq names. Youve seen over the last couple of weeks tremendous rebounds in apple, alphabet was 9. 97 on february 9th, all the way up to 11. 30, back to where the earnings gap is. Youre seeing the nasdaq lead the market higher. If the market was going to sniff out another selloff, wouldnt you see a little bit of a transition right now, where some of the value names would begin to anticipate that and perform better we saw that with apple in january ahead of the selloff apple was clearly underperforming. That is nowhere near in sight right now. Yeah, joe, its a good point. So our call on well, typically, when youre getting hit in something, youre not going to start investing something new. Youre going to buy what you already like thats down so i think a lot of the folks that are already fully invested in the technology space, when you get an opportunity to buy what you already know and already know has good fundamentals, youre going to do it on weakness and i think thats probably why some of these higher social media stocks and higher beta tech stocks ahave rebounded but why did the market correct just because yield curve flattening is the fed raising rates. What does that make companies do if your labor inflation is going up, if all your inflationary pressures are going up, you need more productivity. So coming out of a flattening yield curve, the best space should be in those that take advantage of productivity improvements those would be the ones that finance them, the financials, the ones that implement them, the industrials, and those that have the Technology Behind that implementation, which is info tech so i think there is a real fundamental reason, joe, for the kind of move up in those three sectors that we have seen. Again, its buy more of what you know. Tony, heres what i tell you, and erin it definitely was a fundamental move i agree with you that was exacerbated by what we have seen through the whole market and so forth apple was an index move back up. Because the fundamentals on apple to me, i wouldnt say collapsed, but they continue to deteriorate as we have seen. So was it fundamental or was it fear it was fundamental. It was fundamental you had labor costs coming higher what number big deal . When youre at this inflexion point in the market, one number is going to matter from a kneejerk reaction and as you see other numbers, the market is not going to wake up one day and say were at 5 , lets correct no, but 10 on one number but is it justified is it justified thats not justified, but thats my point it started as fundamental and gets exacerbated by more than 50 of the market trading off algos. Thats a reality going forward. Judge, thats a realization of this. Okay, so youve got a fed thats very nervous about the good economic numbers, the labor inflation number really kind of scared them. So you had to arbitrage out versus what the Market Expectations were. And it was the first time you actually had a feeling in the marketplace that the dot plot was going to be right, which has been wrong for years but youre in the situation now where were going to have this continuing conflict between a fed that thinks the numbers are too strong, yet because of the way the citigroup economics index showed there was such euphoria among economists toward growth, youre going to get fed worried about data but investors disappointed even by the good data that creates a volatile environment that shows conflict for the next few months. Were going to have multiple 5 kind of moves. And then youre just going to grip it and rip it, because its all about higher earnings and higher Economic Activity and pizza hash tag giddyup once you get through this volatility of fed policy. Tony, if we look at earnings consensus for this year at 157, and we test that low of 25. 30, were talking about 16 times on this years expectation. What would cause the market to go below that, given the fact that we have eps growth, we have a lot of positives moving earnings higher . I would truly think theres something called the Monetary Policy uncertainty index that the fed tracks and if you get an increase in rate fears, guided around that Monetary Policy uncertainty, you could have again, some of these volatility products drive you lower than that. But fundamentally, i mean, i think we should be way higher. So i dont think it would be justified. But anything can happen. Tony, your record low unemployment, an immigration policy that wants to keep the lowcost labor out so if you own a hotel instead of paying minimum wage, cant hire anybody, youve got to boost it up youll see inflation wage inflation, to your point, scott, that you were saying one number no, you will. You look forward how about productivity enhancement, too. Its that the market is a discounting mechanism and its not going to wait until we get there. And tony, to your point, you said, when we get through the fed volatility, if you get through the fed volatility, the fed is going to be at 5 and then its game over for a while. So you dont want to get through it. One thing i watch is the move index, which is the its basically the vix on the bond market the move index led the volatility move in the vix higher about a week preceding it so you started to see it on the 17th start moving higher and then start to see the vix a week later start moving higher. The move index right now, which is the bond market volatility index, is moving downward. Until we start to see that moving up, i dont think were going to get another vix scare. Do you not think we are going to get any sort of meaningful more so than we have in rates thats going to depress multiples, even if earnings expectations are not quite as high as they turn out to be . See, i think were in a whole new phase of a buckll market. After the tax reform were in now a phase were going to see higher inflation, higher volatility and higher stock prices but as we get higher Interest Rates, were going to have this tantrum that goes on with the fed, with higher inflation indicators, and thats going to cause a lot more volatility, like were seeing. But netnet, you know, the price isnt going to change more than the facts. And we have eps growth, global synchronized recovery, and were going to have a higher s p at yearround. I agree im not disagreeing. You cant whistle past the graveyard and saying that inflation is not going to hurt you. At some point it is. Last friday we had this conversation on the desk, and one of the things that i suggested, and i think some of i think maybe josh misunderstood what i was saying is, i was not saying you needed to sell i think on that february 9th low. Thats not what i was saying but i think in the rebound, part of the rebound is that there is this sentiment that Still Believes we need to go down and test that low. We havent as much as we have rebounded, we havent removed that sentiment and i think maybe thats one of the reasons why were continuing to appreciate a significantly, as we are, because most people still expect, myself included. Im amazed at the speed of this rebound. Everyone thought, well, were going to go maybe not take out the lows, but go test it again. That hasnt happened and i think sentiment still reflects that, and i think it reflects it in price appreciating. Tony, i give you the last word. Well, think of what happens in shock nobody reacts, because youre shocked. So its not like you had this tremendous selling on the way down of course, you had some hedging, some other things like that. But if youre a normal person and its two days of down 1,000 points, you kind of look around and say, well, i dont know what to do. And then it bounces back and you say, okay, wow, weve got higher inflation and higher Interest Rates. So maybe ill take a little bit of profit here and then you grind down to retest that low, 30 days later. But, again, i think we have to be careful i dont necessarily think that rates are going to spike here. Youve peaked out the citigroup economics surprise index and when youve done that at such a high level short rates are going up with fed policy but the long rates, what if they just stay here, you flatten the curve . What happens if ten days from now you have a jobs report that does not back up the wage number from the prior month or god forbid you get a revision youre going to get a huge move down in the tenyear note yield and then fear of Economic Activity, again, creating that volatility, judge. People dont know what to make of Economic Data now, because theyre convinced that its so strong i thought you were going to answer my question with saying that stocks are going to go higher if the no. I think the next move is lower on lower long rates, and a defensive move and i think thats what you want to buy. You honestly think that in the next jobs report, if you know, aleve some of the fears about inflation that stocks arent going to go up . You think theyre going to go down on that if you gave me the number, judge, no clue i have no idea which way heres what i know again again, i think that you can peak out the long rates here you can have a strong employment number that can lift expectations for short rates long rates come down, because what happens when the fed raises rates aggressively and more aggressively its a disinflationary move meant to slow down activity. I cant believe theyre going to do that. Tony, can i just interrupt for a second youre telling us you think there is an impending retest of the lows, for whatever reason. Correct. But scott is giving you a scenario, laying it out for you, and you cant tell us whats going to happen on that scenario hear the facts so if you get weise, if you get a strong economic number, what if rates stay flat on the long end, the short rates go up, and you have a down move retesting the low . If you get a strong if you get a high inflation number, ill tell you whats happening youre going to see the tenyear go to 3 , possibly above it in the ensuing days, and youre going to see the market, you know, go lower why wouldnt that happen . There was a time on this show in mid 2016, steve, just for fun and memories, you told me i had a better chance of growing hair than being right because the Economic Data was too weak now were going the other side of the track. No, no, no. Thats absolutely thats not true i did say that about you had a better chance of growing hair being right on something very specific and i still hold on to that. Just like you have a better chance of growing hair than the market not going down. Tony, the markets biggest fear right now is inflation. We can agree on that, right . Correct. So if you get a read that doesnt back up the scare that we just had, why wouldnt the market go up, and not be as worried about that being a problem . You know, thats a great question i think its because of if youre if your reason to be bullish is because earnings are going to go up with better Economic Activity ultimately and you want to have it not curtailed by the long end of the curve and you come in with a i cant imagine it, but lets say you come in with a super weak data point. Youre going to take the long end down, taking out that inflationary pressure. But its also going to put pressure on earnings expectations. So tony can i just ask you this question . People were shorting volatility, and we would all agree that was part of the problem in what we witnessed think people are still shorting volatility right now on the rebound you think theyre shorting volatility honestly, im not sure. I havent talked to anybody. Thats got to be that hazard to be the whole trade got blown up. Thats got to be a critical component of the markets ability, barring some fundamental shift to go back down and retest the lows and, again, i dont know if the market is going up or down no clue. But for it to go a lot of whatifs here. Lets just do this but shorting volatility is a big component of it. Thats really not a whatif. Thats a daily strategy in the marketplace. Well, i dont know exactly what the position on shorting volatility is. Heres what i lets take away the opinion, because honestly, none of our opinion matters. Its all about the evidence, in my view, and history shows it. And that is, when you get a shock drop, we cant put it all on one number. What if you get a different kind of labor report or not this is a human nature issue, where you have the markets shock investors, okay, and real volatile around that low and now youve gone up about 5 . When you shock investors, they cant do anything. Now that youre up about 5 , what if the next two weeks you pull back and retest that low before any of the major Economic Data comes out and i think thats all were saying why would you do that why would that happen . What is going to cause that to happen someone is going to wake up one day and because of human nature theyre going to all of a sudden start hitting the sell button in the next two weeks before the next read comes out . It could be any judge, could it be a walmart number that came out yesterday that all the Financial Press called part of the reason for the drop of 15 i dont know i dont know all right tony, well have you back. Good. Hopefully when you grow some hair yeah. Thanks for coming on today. Tell you what, you owe me a dollar for that, buddy im coming in with a wig yeah, i do. I dont know, weise doesnt look like hes that far behind you, tony. Yeah, i know. For who the bell tolls. Well see you soon tony dwyer. Have a great day, guys. Heres what else is coming up on the Halftime Report. The nasdaq making a run off its recent low next up, one tech investor on what shes learned and how shes playing the index. The Halftime Report with scott wapner and the traders is back in two minutes oh, and theres the closing bell. sighs i hate missing out missing out after hours. Not anymore, Td Ameritrade lets you trade select securities 24 hours a day, five days a week. Thats amazing. Its a pretty big deal. So i can trade all night long . All night long. Is that Lionel Richie . Lets reopen the market. Mr. Richie, would you ring the 24 5 bell . Sure can, jim. Trade 24 5, only with Td Ameritrade. You or joints. Something for your heart. But do you take something for your brain. With an ingredient originally found in jellyfish, prevagen is the number one selling brainHealth Supplement in drug stores nationwide. Prevagen. The name to remember. Hey you still thinking about opening your own shop . Every day. I think there are some ways to help keep you on track. And closer to home. Edward jones grew to a trillion dollars in assets under care, by thinking about your goals as much as you do. Welcome back to the Halftime Report. Im courtney reagan. I just got off the phone with walmart. Com ceo mark laurie in response to a report by the New York Post today. He says he is absolutely not leaving walmart. Those were his words absolutely not he says i feel like were just getting started. I think were having a ton of fun. We are making great progress couldnt be more excited about the year coming up and couldnt be happier when i asked him if it was still walmarts ceo to put his arms around him and act as his body guard which is how he described his role when he was first hired, he says the trust has actually been built between doug, the board, the executives and myself were doing really cool stuff in store eight. We are thinking about winning today, and planting seeds for tomorrow so scott, when i spoke to mark lore, he could not have been more sure he was not going anywhere any time soon back over to you. Courtney, thank you so much courty reagan with the latest on that story. Lets talk about paul singer, david einhorner signing off on recent commentary to their investors. Leslie picker following the money for us, as always. Good to see you. Good to see you, too, scott greenline posting its worst performance ever, with 5. 5 declines in january, as the s p 500 rose 5. 6 . Einhorn saying that the firms prior worst performance compared with the s p came in march of 2000, which was a similar environment. He spoke on a call this morning. While, the environment has remained difficult with Growth Stocks accelerating their performance against value stocks this year, including february, we think a reversion may be fooin finally coming soon. Einhorn noted the evaluation spread between long and shorts is incredibly wide hes hoping this year will coincide with some changes that will help turn around the portfolio. Corporate tax cuts are a benefit to companies with profits. Which are a hallmark of our long portfolio. Higher Interest Rates are beginning to offer investors an alternative. They havent had in many years and should render uncertain future profits and story stocks less valuable. Einhorn saying the biggest winners in the portfolio included long positions in mylan and Council Energy and largest detractors were caterpillar. The letter which has been circling for a few days now is the continuation of the firms warning of a potential crash on the horizon. The firm led by paul singer has been pointing to debt levels, the growth in passive investing, low Interest Rates and the confidence in volatility selling strategies as signals of risk. Now, singer has been beating this drum for years, and so far a largescale crash has not materialized but as history has shown, there is a good chance one day singer will be right. I would like to ask the panel, because i think this is pretty interesting a reversion is coming. Growth versus value. Do we believe that hes going to have to see amazon and netflix i mean, is he still short the bubble basket . He didnt mention it on todays call but as of his most recent letter, he is still short the bubble basket. So you would need to see amazon and netflix fall significantly. Listen, back to the conversation that we just had with tony i think we were all searching for what is the trigger or the catalyst for a return to the low. Im not questioning the return to the low that easily could happen but if you were to see an amazon or a netflix or the growth outperformance evaporate, then, yes, you can make that retreat back to the lows once again. But thats something you would have to see. Is there anything to make any of you professionals believe that value is going to trump growth i dont know why i would care youknow . Youre finding instead of being a strategist, he might as well buy etfs, if thats his thought. Because the stockpicking is not working out. When youre following youre following a yes. A strategy that has worked in the past doesnt work for three years. Hasnt worked for three years. The market condition has made it incredibly more difficult. So you adjust thats the difference between paul singer and elliot and einhorn. Elliot has continued to perform very well. They havent had down years. So while thats what he thinks on a much larger capital base, growing capital base, even though hes closed, hes put up the numbers. David einhorn has not put up the numbers. At some point youve got to say im wrong instead of saying im right, its eventually going to revert. We had two instances over the last 12 months where you would have expected to see values start to outperform. So first we see reflation being priced into the market second, we had massive tax stimulus bill, which also, you know, was expected to lead to value outperformance and it hasnt happened yet at some point, youve got to question, is this trade fundamentally flawed for some reason well, if volatility comes back in a consistent way, then people like einhorn are going to, rich, be awfully happy to make their strategies easier kpo execute. You cant be shorting stuff, you know, bubble baskets, in a oneway market i dont think its a question of value versus growth for a long short manager their job is to go out and find over and under valued stocks and put up trades. Last year was probably one of the best years we have seen for long short managers. And he simply underperformed so in the context of building a hedge fund portfolio, their systematic long short, all types of strategies within his strategy, i think he wildly underperformed the other managers in our universe. Thats true but historically active management outperforms where value is outperforming one of the reasons thats hindered over the last couple years has been the fact that growth has been such a superior factor basket. A lot of significant waiting, which you pointed out before in the overall index. So steven said before, is apple rising for fundamental reasons, or an index . First of all, lets weve got to move on. Lets understand what hedge funds do hedge funds are not supposed to outperform their net exposure of the market is half what the market is, 60 . So outperform doesnt mean outperform the s p it means outperform the peers. And on that scale, elliot has outperformed, and greenlight has significantly underperformed. Leslie, thank you. The white house just releasing the president s economic agenda for this year ahead. Council of economic advisers, chairman kevin hasset has more on the president s plan. Yes, scott, thanks. Youre right about kevin hasset being here also here right now are thousands of High School Students just outside the white house north fence from where im standing, just behind our Camera Position here. Theyre here to protest against gun violence theyre chanting enough is enough. Theyre raising their hands and saying hands up, dont shoot. Students here from area large public high schools, all here to put pressure on the administration on gun control. And were getting some signals from the administration they are willing to take some steps that other administrations havent been able to do. So well wait and see as the afternoon progresses how the administration addresses this issue. But these students are here to make their voices heard. Meanwhile, inside the white house gates, the business of governing goes on. Kevin hasset is here to talk about this new report from the white house on the state of the nations economy and kevin, if you could, just give us a sense of what the headline is. What did you find in this new report today i think the headline and the economic report is that were not in a new normal of low growth, but were just in a normal period again, where we can go back to growing about the 3 that we always expected our forecast for the next ten years, which came out in the document today is that gdp growth will be about 3 . We get to the 3 in a way thats transparent, welldocumented and heavily leans on peer review research weve got about a 2. 2 baseline and about. 8 because of the president s policies the deregulation is something that started and the tax bill is something that passed. Tell me about the gas tax you talked about this earlier today. The president signaled his willingness to embrace a gas tax hike how much do you see and how much do you think that tax increase could undermine some of the benefit you got from lowering taxes last year . I think right now as we pursue an infrastructure bill that its important for lawmakers to put everything on the table and i think that the president understands how important it is to reform our nations infrastructure, rebuild our nations infrastructure, and that thats going to require some financing and i think congress is going to have to make the tough decisions about what to do about the gas tax and whether to pursue other things one of the things we point out today is that the gas taxs current design isnt really a 21st century design. It was set at levels needed to fund highways back in the days when fuel economy was really low, and we didnt have electric cars imagine if everybody drove a tesla. Then how is the dwgas tax goingo pay to maintain the roads . What do you think is appropriate . There are a number of Things Considered we give some examples in the economic report of states that have permile charges. Or, you know, increased leverage on toll roads in some places or hot lanes. There are a lot of options on the table. I think the appropriate thing right now is to understand, its incredibly important to pass an infrastructure bill, just like it was important to have a tax bill last year and that to do that, youre going to need to fund it and funding right now the president says we should put the options on the table and think about them. And scott back at headquarters has got a question, as well. Go ahead i do, kevin appreciate you being on the program today. Of course. Dallas fed president kaplan was speaking earlier today and says he expects gdp this year to be between 2. 5 and 2. 7 and the boost from the tax cuts would fade in 2019 and 2020. It seems as though within the fed at least some of the membership that there is skepticism as to whether you can achieve even the 3 growth that youre talking about today right but as you know, there are a lot of wall street firms that have revised their forecasts up in the 3 change. And, in fact, blue chip last i checked was 27 so 3 is pretty close to i think what everybody is going to end up saying a month from now because there is so much momentum going into this year. And the momentum isnt just sort of momentum from out of nowhere. Its momentum precisely on the things we think should be going up because of the tax bill so Capital Spending is booming wages are booming. Youve noticed all the pay increases that people have gotten and also Consumer Spending is going to starting to up because peoples takehome pay is higher because peoples withholding changed in february. There are all these factors that will give us a First Quarter last time i checked gdp was north of 5 , going to give us a very healthy First Quarter and once you get a First Quarter like that, getting a 3 year is not that hard. Its simple arithmetic i disagree its going to be 2. 5. I think our forecast will be closer to the right answer. Whats you just threw out 5 where did you get that number . Im saying if we watched the realtime gdp numbers for q1, one is that the atlanta fed gdp now, you guys could probably pull up on your screen it moves up and down, but its been blipping around 5 . Im not saying the First Quarter is going to be 5 . Im saying were carrying a lot of momentum into q1, well north of 3 . And so i think the 3 number is going to look conservative if we look back in december. Im sure since youre citing the number you have noticed the atlanta fed has backed off of that number, has been consistently way off in their own predictions. Theyre not even looking for anywhere near 5 as we have this conversation today. The number moves around a lot, depending on the data but lets look at the fundamentals we think that final demand was very strong through the last three quarters of last year. There was a big decline in inventories in q4, which as you know, tends to offset in q1. If we take the final demand we had in q4 and add and rebuild inventories in q1, then already youre looking at numbers that are pretty close to what we have seen in some of the realtime measures youre right, though those are going to fluctuate a lot. But i dont agree that you should attack the atlanta fed gdp number now quite so aggressively it is something thats been proven over time, many, many years in a study to be about as good a realtime read of q1 as you can get. I certainly wouldnt use the word attack. And thats not in any way thats what i said im doing. Well, we who doesnt hope that gdp in the First Quarter is above 5 i think that would make everybody happy. Were just citing the fact that often that gdp now survey that the fed does out of atlanta tends not to be right, and by a wide margin. I just wanted to point that out. I do want to ask you a question, though, about infrastructure the president has proposed 200 billion within the budget, looking for 1. 3 trillion to come from other areas. Private investment, state and local governments. Paul krugman, the new york times, said the following and id like your reaction to it okay, sure. Okay . Donald trump, he says, quote, doesnt give a damn or a bridge or a road or a sewer system or any of the other things we talk about when we talk about infrastructure its not a plan, its a scam that number is just made up. Hes only proposing federal spending of 200 billion, which is somehow supposed to magically induce an increase i infrastructure investment. What would your reaction to that be lets think about the economics of infrastructure and investment so right now, if you look around the country, especially what, on the east coast, you and i probably spend a heck of a lot of time sitting in the car, or waiting at the gate or, you know, wasting our time because the infrastructure is so bad in the u. S. You agree. So that normally is the kind of thing that might induce either local Government Spending or profitmotivated people to come in and do something about it in d. C. , we had people build an extra road out to leesburg and so on and there have been other places in the country where the profit motive has indeucuced people right now, if you and i decided to try to do something to ease congestion, then wecould end u tied up in knots with permits and so on for up to ten years. So what the Trump Administration is trying to do is make it much easier to get permits, to get things approved in two years instead of ten, at which point we think there will be a heck of a lot of both local and private capital that will come in and solve the really egregious problems because the problems are terrible the amount of time we document this in the economic report that came out today, the amount of time people spend sitting in their cars and congestion is unbelievable in this country so its an absolute opportunity to improve Public Policy and maybe for the private sector to invest, as well. Eamon yeah, kevin, i wanted to ask you one quick one on u. S. Debt you guys passed a massive tax cut last year. Youve also increased spending in this budget deal that happened this year that has huge implications at what point do you get concerned the debt levels are too high and bond vigilantes come back and you start to have a problem there . Sure. Absolutely were keeping a very close eye on government debt, and on deficits and i think that the president was right to prioritize one, a tax bill that made america competitive again, and to rebuilding our National Defense which sadly is something we have to rely heavily on in the years ahead. So debt has to grow. In the nearterm, thats right. But if we, as an example get the Economic Growth that the council of economic advisers expects out of the president s plan, something that we projected and then released today, be then were going to have about an extra 2 trillion ten years from now that we wouldnt have if we didnt pursue these policies then we have the wherewithal to address our debt problem in the end, addressing our debt problem is going to require a big Fiscal Consolidation thats going to require bipartisan agreement about it, and so on mu and in the longterm, i dont think any economist would say its not going to happen it necessarily is going to happen because the debt levels are unsustainable. But in the near term, were in a better position to address the problems because we went after the major problems in the first year. Scott, we need to toss back up to you. Go ahead. Lastly, and since you ended discussing deficits and inflation and things like that, im wondering, kevin, what you made of the recent sharp market pullback, primarily which seemed to be on concerns over inflation, and more so in the nearterm. Right well, you know, markets tend to be more volatile after a steady run of big increases and we have seen an increase in volatility recently i thought that it was time with the really good wage data and employment report, the cpi also showed that inflation is starting to tick up. You know, some increase in inflation and wages is something we would expect to see as the economy goes back to normal from the new normal that was slow growth and then the question is, does it get ahead of itself you know, i think were confident at the council of economic advisers that the supply side benefits of the tax bill and the other policies that were pursuing are good enough, that they can put downward pressure on prices, even as wages are growing up, because if you increase supply, then that puts downward pressure on prices if we had passed a stimulus bill like president obamas stimulus back in the day that was cash for clunkers and a big increase in spending, that would be a demand side thing that could definitely overheat the economy. But what we have here is a supply side stimulus, which is going to increase supply and i think allow us to grow without getting inflation out of control. Of course, i respect the independence of the fed. And i need to add that i wouldnt advise the fed about Monetary Policy. Kevin, i appreciate your time. Thank you thank you for being here on cnbc straight ahead, is the fang trade back now that the nasdaq is jumping off of its lows Halftime Report is back after this feel that . Thats the beat of Global Markets, the rhythm of the world. But to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. Sometimes, they just drop in. Obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back to the Halftime Report. Im bill griffeth. French president macron is calling for a humanitarian truce in syria to allow for the evacuation of civilians there. The socalled White Helmets relief group shows the moment that a syrian air strike hit the area on monday that is a rebelheld suburb of damascus. A preliminary report has been released on the crash between that train carrying gop congressmen last month witnesses tell investigators the truck entered the Railroad Crossing after safety gates had come down to warn drivers about the approaching train. And the Supreme Court has ruled that whistleblower protections passed by congress only apply to people who report problems to the government the justices said employees who report problems to their own companys management do not qualify. And whirlpool is recalling more than 40,000 kitchen aid electric kettles, because of burn hazards apparently the handle can come loose and separate from the kettle, causing spills the company has received 79 reports of just such an incident thats our cnbc news update for this hour. I see by the old clock on the wall that power lunch is coming up at the top of the hour cant get anything past you, bill. Well get the late yeast read at 2 00 p. M. Sharp eastern time plus the ceo of dine brands global joins us in his first interview. How they are turning pancakes into profits and google crushing the competition, and should it be broken up. Are they right that and much more ahead on power lunch. In the meantime, Halftime Report is back right after this hold together. A little to the left. 1, 2, 3, push easy easy easy horn honking alright alright weve all got places to go weve all got places to go Washington Crossing the delaware turnpike . Surprising. Whats not surprising . How much money sean saved by switching to geico. Big man with a horn. Fifteen minutes could save you fifteen percent or more. At the Marine Mammal center, the environment is everything. We want to do our very best for each and every animal, and we want to operate a sustainable facility. And pg e has been a partner helping us to achieve that. Weve helped the Marine Mammal center go solar, install electric vehicle charging stations, and become more energy efficient. Pg e has allowed us to be the most Sustainable Organization we can be. Any time you help a customer, its a really good feeling. Its especially so when its a customer thats doing such good and important work for the environment. Together, were building a better california. Welcome back to the Halftime Report. Nasdaq recovered 88 of its losses from this months drop. Can they extend that record run . Cathy wood is the founder of arc Investment Management and joins us live from new york. Hey, cathy, good to see you again. Hi, scott good to see you. Thank you. Its been a pretty remarkable comeback for tech. Are we going to resume our leadership role . Well, i think what the market is recognizing is that we are in the sweet spot of some scurves here in turns of Online Retail 10 in the u. S. , total retail. 20 in china were in the sweet spot of the scurve, where share gains accelerate same with mobile advertising as a percent of total advertising thats 17 again, right in the sweet spot so we expect very strong sales growth from these companies to continue theres one exception, where were looking at amazons move into advertising now amazons right at point of sale. Its advertising revenues last year were less than 3 billion it is aiming for googles 73 billion, and facebooks 40 billion. And its right there at the point of sale. So its effectively becoming another search engine. So thats the nuance we would say among the fangs. Yeah. Where do you come down on apple . So we like apple. We like apple very much for the longerterm story, which is more around services. We see them everywhere in health care theyre insinuating kinds of ecosystems there we wouldnt be surprised to see Insurance Companies subsidize iwatch sales like teleco subsidized the smartphones because it is in their interest to do so and so we see a swish there. And another killer app is augmented reality and so we are excited on those fronts and dont get caught up in the unit sales of the iphone x. And lets talk about stocks off the beaten path when it comes to technology and names that we dont talk about maybe enough illumina, christopher therapeutics edda tas medics. We think the genomic revelation is a megatrend and it is just beginning. The Foundational Technology there is dna sequencing and illumina has 90 share of the base payers of dna sequency in the world and including china. They gave up developing its own frequency platform so we think weve just begun there and the other stopgs stocks that you mention, they are foundational in something calls Crisper Technology it is gene editing it is been around for a while. But it is being perfected and its cost have dropped precipitously. When we think about disease, what is it it is simply a mutation. Something has gone wrong a programming error in our dna gene editing is all about correcting those errors. Curing disease and these companies have the patents on this technology they are fighting with each other right now but they think they will end up cross licensing and we think this is a huge space and trillion dollars in ret revenue and the companies will capture royalties, 5 , 10, 20 . Good to see you kathy wood. Oil prices are slipping. Jack jackie de angelis is standing by with more on that. Crude oil weaker and snapping a four session winning streak. This is the u. S. Dollar graining ground and is the weakness today all about the Dollar Strength . No, jackie, there is seasonal factor involving crude oil refiners are getting ready to make the summer gasoline so they are not using as much crude. That is why you are seeing supply building. But the window will close in two or three weeks so ill go from selling rallies where i am now to buying dips as demand for gasoline is up again. And what are the key levels to watch right now i agree with you. A couple of weeks ago, 58 to 59 was a consolidation channel and then we left it behind last week we tested it a few times and ended up rejecting it. So me that means the trend is still higher i think 65 is my target on the upside. Thanks. Were back with the live show tomorrow at 1 00 p. M. Eastern on futuresnow cnbc. Com. We are back in two minutes this is where i trade andrs. Manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. Okay. 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So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Feel that . Thats the beat of Global Markets, the rhythm of the world. But to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. Welcome back to Halftime Report. Look at who is here. Unusual activity. Are you sitting there or do you have some both. Who loves you man . I missed you from earlier. What do you got. I had a late plane. Citigroup. They were coming in and buy. They rolled out of march and up into april 10,000 of the april calls were bought and paying 1. 61 and that is a lot of money going down saying this stock is going higher and will break through the highs. You have a final trade . Ill go with monster. I like what im seeing and what you heard from coke and i think monster is another name that i think in this environment is doing well. You like the energy drinks. I love that energy. You do. Yeah, baby. This is with nothing. You should give that to your pilots when they oversleep mountain dew. Do you have a final trade. I like in the small cap masco, a buildings Products Company and theyll have 800 million worth of Free Cash Flow and re deploying it and benefited from tax reform and in the sweet spot. Erin brown. I like the Consumer Discretionary and the etf, i think there was weakness in the january following very strong Fourth Quarter and as you start to see some of the tax benefits coming through to the consumers youll see the Retail Sector work well. I think you have to look at Biotech Sector im giving joe time. Mastercard joins visa. Good stuff. Thanks all power lunch starts now. Welcome to power lunch. Im tyler mathisen, here is what is on the menu inside of the feds head, investors getting ready for new clues about inflation and the rate hikes and the economy and it could move the market in a big way. Well have that in the next hour mining for growth. Apple reportedly making an outofthe box move to fuel growth for the iphones what they are planning to do and President Trump meets with students and parents and teachers impacted by mass shootings. Weve seen a number of ceos take the lea

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