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The Investment Committee is ready to go. Halftime report starts right now. Welcome good to have you with us our Investment Committee, joe terranova, josh brown, the brothers najarian, jenny harrington, liz young is back, the bny mellon director of market strategy. We begin, where else, the market stocks higher, but, josh, directionless. The word of the moment, you know, were down a bunch then up a bunch and now searching for direction. What gets us back to figuring out where we might be going. Is it all about trade . Really well, it may not be all about trade but it feels like its all about trade headlines and then as we get closer to the next fed meeting, it will be all about trade headlines and whatever the fed remarks are. Its a very mixed market environment. Only 53 of the s p 500 names are above their 200day moving average. Only 35 of russell 2000 names large cap is clearly doing you much better than small cap is. But the s p has really been in a range since the beginning of august more headline volatility than actual stock volatility. 2940ish seems like resistance on the dow more like 2700. Everyones opinion will change whether we stay below them or get above them its not a surprise. If we have a breakout above those levels, a lot of people who had been saying, yeah, i dont know im not so comfortable here, all of a sudden, theyll tell you, i like this, i like that im buying this, im buying that its human nature, the way the ball bounces what gets usout of this range. Whatever you want to characterize it. Range, malaise direction we need. I think its a real easy answer get something sort of facts about whats going to happen in this trade war cant go anywhere without that i think thats what the market is waiting for. Look at the movement we get every day just based upon one headline this headline today versus yesterday. Yesterday down over 200, 300 points and yet we come back today and all of a sudden, some little small cracks come in terms of hong kong theyre still going through some negotiations about plenty more that does not look like its over and yet were up over 200 it was trading up above 2021 yesterday and then here it is were pulling right back again youve got to play the volati volatility index as much as anything in terms of, when do you see these opportunities . When you get these selloffs, you look for the opportunities the quality names. If you think if you are convicted enough, thats when you can buy. Yesterday, quite a bit of buying yesterday of various different stocks just waiting for them to get pushed down. And yesterday was one of those days if were sort of, our hands are somewhat tied and it comes down to trade, citi says base case, no deal for the 2020 election guide us through what happens between now and at least the end of the year with the market, if that view is correct in response to that view, i think we get a lightweight deal at best before the election. I think we do probably need one. Our Administration Needs one by summer of next year to stay in president s dont typically get reelected during a recession. Well do whatever we can to avoid that during now and the end of october, well continue to be decisive too many uncertainties facing us the market will continue to volley back and forth. And you just have to stay in it. Put your seat belt on and enjoy the ride citi says slightly underweight equities overall they cut their overweight in the u. S. Down just because of all the things that liz was talking about. The rest of the desk talks about. Trade, fear of recession too much risk on the table i think cutting the equity exposure is a mistake because theres just a lack of alternatives you cant find a better place to get the returns people need for their retirement other than equities bonds are just a wasteland in terms of yield you can still be in equities and reduce your exposure, right . Are you going to sit in cash . In bonds are you suggesting be all in equities im always long so id say stay in all equities assuming you have a long time horizon. I look at it like this a lot of companies with good earnings not as good as they were you have a Strong Economy and theyre all fighting under this wet blanket of trade they are pushing it up slowly. Thats why were up 18 on the year thats pretty significant to be up as much as we are with the overhang of trade. Yeah if youre in it for the long time, id not reduce your equity exposure. I think every so often the market gives you an opportunity to pick a direction. Right now josh mentioned some levels before. The president on thursday, august 1st, tweeted. We lost 2950 the market has stayed between 2822 and 2945 ever since my expectations were about to break out from that. I think there are things in the marketplace indicating that. Energy prices. Not break down . No, i think the next 50 handles in the s p are higher. Okay. Energy is supporting a little bit here the u. S. Dollar moving lower see some steepening. Im not big into picking the overall market, but every so often you get a setup. You get a setup. If the president relaxes the tweeting, we dont get any tweets, as everyone describes right now, the setup, weve endured september 1st. Endured a lot of negativity. We can break out of this range on position. I bought some calls qqq, iwm, where we go from there, who knows. Literally the tweets, bank of america looks at it and says the more the president tweets, the worse the market does. Rest the fingers and the thumbs for a little bit and lets see where the direction of the market goes based on the actual news scott, over the last three months, the s p 500 is up 4. 6 the dow is up over i mean rather, the xlk, the tech, which is why im so heavily invested in tech is up more than double that and you can pick various time frames, whether its a onemonth, 3 for the s p versus 5. 3 for the xlk. And thats during the volatile august that you and pete were talking about. So there are plenty. I completely disagree with citi. If you really want to carve yourself up and hurt your portfolio, go ahead. Lighten up right now thats exactly what you should do if you are listening to citigroup. And then thats why they, obviously, dont have a brokerage anymore either they had to kick that thing over to Morgan Stanley because they did such a poor job of not going to dump all over citi should i be supporting it you can disagree with it. I disagree with it. You dont need to soil the firm just because you disagree with their call. Theyre not the only ones negative or cautious on the market i was listening theyre the only ones on an island nope, but i think whether you are david cotai from cumberland advisers and saying, man, when you get rate cuts like this and youll get more rate cuts like this, you can ask Steve Liesman, but i dont remember that being a bad environment for stocks so if you want to say if you are citi that this is the time to lighten up on stocks, go for it. I think theyre exactly wrong. Dont we know, presumably, that rate cuts are coming . Yes presumably thats in the market still cant get much direction wheres the big shock . Wheres the surprise agairnn, im back to work, wa is working you stick with tech. Tech is where you want to be plenty of examples well tal about throughout the day but tech is where you want to be right now. Absolutely, positively full stop the other point of view is the fed can do whatever it wants. Its not going to make a difference what do you think about that view theres an expectation well have rate cuts still this year that well get another 50 bips this year and 50 bips next year. I still cant justify a ratecutting cycle i can justify another cut this year but i want the fed to at least say, all right, were done well give you this and then were done and we need to stop pretending that rate cuts are going to save us from a manufacturing slowdown caused by a trade war. We have to use the right bullets to fight the animal. I dont think rate cuts are the only thing we have Steve Liesman saddled up to the table. I heard my name called and made a beeline didnt know when you were going to get your mic on a bag of doughnuts out there. Rosengran says hes unconvinced. Liz young says she on the fed yet . No, but her opinion is a smart one. Maybe next year how tall are you . 54. Lets get back to the matter at hand. Bullard says she can consider 50 basis points all over the place. Is that your point theres a bunch of camps. Theres the, im not ready yet the im leaning there. The, lets do it now and the lets do it now and the lets do it now bullard is in that camp. If were going to do 50, might as well do 50 now in september the lower case now folks are the ones who are 25 basis points the people leaning there, they want to see it in the data and the people who are not there yet are the ones who look at the data, dont see it and dont expect to see it the problem is, i almost feel like now you have a debate and you have a silent debate that we havent heard that much about in the room about the trade war and whether members of the fed should take some of the dudley advice as each doubles down in a sense today and tries to clarify what he meant the last week. As to this is a trade war issue. Yeah. Everything else seems fine. Why should we cut rates . I think theres agreement with part one of dudley which is that the fed wants to be careful not to enable or encourage the trade war. And if you look at the tale of the tape, it appears as if they are. Lets go back to the first rate cut. The next day, the president raised tariffs lets go back to the jackson hole speech. Within the hour of the powell speech saying, i think im going to cut, the president retaliates on china theres this appearance there. Part one of dudley is, lets focus on the economy and lets not go out of our way or be very careful not to enable trade. There is complete disagreement with part two of dudley. His explanation today notwithstanding. I dont think it works, whatever he was trying to do, that the fed should in any way take political or Election Outcomes into account when setting Monetary Policy. Period, full stop. If youre going to say we shouldnt enable the president or the administration on the trade war in effect, who cares what they say about that if the trade war makes the economy worse, they should act, period, end of story right okay thats good. But tell me this you have to go back a little bit. Lets go back to the time when the market, and i do this from our cnbc fed survey, 80 of our participants thought there was a deal coming with china okay if you were going to enable the president and im kind of talking loosely here, you might have cut ahead of time to give him scope to hurt the economy from the trade, okay at that point in time, the fed, i think its what its trying to do and you remember powells answer to my question which is, were learning as we go here they dont know how to do this they see trade war they see uncertainty build they see cap ex decline. They see forecasts come down they cut the other way would be lets cut lots now to give the president lots of room on the trade cut. In fact, lets bring down the dollar to improve u. S. Terms of trade versus china that would be, i think, enabling the trade war. Im sure to a person and part of the thinking is that, look, weve navigated this economy pretty damn well, and the trade war is the real issue to blame and, you know, be damned if were going to change our policy to fix what this trade war has done the trade war has done it, so deal with it i throw it back and what would you do would you do a quarter in september . By the way, lets not forget were all sitting here enjoying the fruits of easing, right . What was the tenyear a year ago . Where were mortgages a year ago . The market has already eased and eased substantially. So the fed needs to catch up with the market. In terms of providing easing to the market, its already throughout so that said, would you say, i need to do 50 now because of the cap ex the dilemma the fed folks have is this. The Consumer Spending is strong. They forecast 2 growth. They have 2 growth. Their inflation we could debate. Theyre below the 2 target, but its 1. 6 versus 2. I dont know if im going to have an allout battle against inflation because im 0. 4 off. The other issue greenspan talked about when asked about the likelihood of a recession is the wealth effect on the stock market is being underestimated alan has been on that kick for a bit. I agree with some of what he says on that he has changed over the decades that ive followed him from the notion that the stock market reflects economic outcomes to the stock market creates economic outcomes. Thats a different idea of thinking about it. I will say does the latter seem to be more plausible it is more plausible from a couple directions. My read of Consumer Confidence is its way more tied to stock market headlines than it ought to be given the average wealth of people in the stock market of the average person people freak out when they see the dow, even when they dont have a lot of money in the market thats one aspect of it. Because theres so much more wealth in the stock market than perhaps there used to be, certainly as a percentage, that means theres more the stock market is a lagging indicator. The stock market is not a lagging indicator. It drives the direction of the economy. Anyone that would deny Consumer Confidence is. No, no, no. Stock market used to be forward looking. Used to be the way youd predict because it was an amalgamation of everyones bets for and against what the economy might do six months from now thats no longer the case. Weve rearranged society over the last five decades to the point where the stock market literally determines what the economy will do. It doesnt predict its more volatile obviously. Dividends arent as volatile as earnings earnings arent as volatile as prices to say that Alan Greenspan has not gotten wiser would be wrong. Alan greenspan learned a lesson in 1997, two weeks into his tenure as the fed chair. The lesson was, if i cut rates and save the stock market, that will not spill over into the economy and we wont have a recession. And then he saw another version of that in 2000. A massive dotcom bubble literally cause a recession. No other cause nothing else happened. And take a look at this last december if you need even further proof a bad christmas for retail why . What changed in the economy from the summer to the winter that would have caused that the stock market crashed from september into Christmas Eve 20 bear market and absolutely, that affected the way people chose to spend how do we know that . Look how well everything rebounded once the stock market rebounded in january, february, march. We had a really good spring for home sales a really good spring for retail again. So we know the stock market now drives the economy the only question is what can the fed do about it having that knowledge . And i agree with steve its a conundrum but i think we have to agree that the consumer is only going to be as strong as the stock market encourages it to be at least to some degree the question is what can the the fed cant do anything about it id like to say to my colleague josh, hes got a point but overstates it a little bit i think things like jobs and wages and all those things that eminate from what stock prices have done i can show you when the stock market was definitive there was going to be a recession and no, were not saying that every wiggle in the stock market i dont mean wiggle causes Economic Growth or its not worth spending the important and valuable time of what do you think is a bigger determinant on what the economy will do besides the u. S. Consumer probably nothing, right . I would say jobs. People have jobs and they dont and nothing is more important than that. The stock market is its a Little Chicken we dont have but heres the i think you just want to be careful not to overinterpret what the stock market is telling you. If you followed the consumer data and the 200day moving average over the last ten years, you did really well for your investors. If you followed things like Industrial Production and manufacturing data, you wasted your time. I dont think anyone would disagree with that lets leave the last point being the market assumes that september is a done deal 100 for the most part. With a 14 probability of a 50 wiggling based on where i think powell is, again, 50 is enabling trade war. 25 is responding to the Economic Data as we have it you asked me for that distinction. I think thats the distinction does that depend on friday . I think friday is consequential but id get ready for getting into a zone of lower jobs numbers remember, they reset by 500,000. Took 500,000 jobs from the year ending march 2019. Mean ourselves run rate and by the way, i believe rosengrun said this yesterday. They restated gdp in 18, restated jobs in 19 the economy may be running a little bit softer than we previously believed. Shnge should they have done 50 in july rather than waiting not with a 3 , 4 consumer growth steve, thanks well, the 100th season of the nfl kicks off tomorrow at Soldier Field with the bears hosting their rivals, the Green Bay Packers. And the man calling the action will be Emmy Awardwinner and hall of fame sports commentator al michaels who joins us now from chicago al, welcome back to halftime. Great have to have you on this is my favorite show. Love you. Thanks. I love all you guys, but, you know, josh brown is my towel service. Fantastic. Lets get to the market. Lets kick football and then kick over to what you really want to talk about i havepackers fans at the desk bears fans at the desk and you guys are going to be watching what the league hopes is a great way to kick the 100th season off both teams with a lot of anticipation every fan base thinks theyre going to win this year the cleveland fans are over the moon you know, here were in chicago right now. The bears fans, i have to tell you, beyond giddy in anticipation i can only put it this way rick santelli, who is probably down the block right now, had his inverted yield curve could not be as over the top as the average bears fan. They won 12 games last year. They lost on the double doink in the playoffs in the wild card game they have almost everybody back. People expect them to in chicago, to win the super bowl and they are amongst the favorites. But the great thing about football is you dont know you dont have the injury situations how its going to play out or when youll get a double doink or not whether it will bounce the right way over the goal post so the great way about the football season is popping open a brandnew bottle of champagne and here we go and lets take a taste of it on thursday night and off we go for the next 17 weeks. A couple of big deals in the last 24 hours. Zeke elliott with the cowboys. Jerod goff gets a deal from the rams are we back now, al, to talking about the stars of the game and not those who are kneeling is that issue now in the past, which dominated the League Last Year that one is probably in the past you know, it could rear up again. We dont know. But every time we think were getting back to football, football, Something Else happens. So theres something that takes place off the field, and the fans, its funny im not saying they relish it, but it becomes a big story sometimes the side stories overwhelm the bigger stories but in its essence, those of us who love the game, we love the games and the other stuff is just stuff its noise on the outside. But once they kick off and they get going, especially tomorrow night at 7 10, its all about the game and the game is thats the greatest part of sports. Watching how it plays out. Were looking forward to that all right. Your unofficial Financial Adviser is waiting for a question whats going on, al i know you are busting my chops when i was on during the super bowl in minneapolis about the three times funds on steroids i get it but my biggest winner over the past few years has been the financial bowl three times its been fantastic. I got in at the right time so give me some, you know, some funds on steroids i should be looking at right now probably too late for the financials, but what do you think . So for a couple of year holds, these are etfs, i genuinely feel that there is huge opportunity if you were to be country specific in the emerging markets i think theres huge opportunity in india inda is the best way to play it. Its a very low cost etf it gives you the biggest 70 companies in the country i think most Portfolio Managers are underweight em and even more of them underweight india. So much focus on china this country is a sleeping giant. Yesterday i talked about medical devices. I genuinely feel that there are 72 million baby boomers. Theyre going to spend the next couple of decades spending a ton of money repairing parts of themselves, reparring parts of themselves my parents generation is spending a lot of money doing that these companies are relatively impervious to economic issues. So ihi is the Ticker Symbol of my favorite medical devices etf. Its got 57 holdings in it all of the Biggest Companies involved in everything from diagnostic to hip replacement. So you can find individual stocks in there, al or just own the whole basket, which is my approach those are two etfs that i think play on secular trends, and i like them both a lot for you ive already clicked send on my schwab account. I wanted to be the first guy in and this is for anybody on the panel, this is a psychological question what is wrong with somebody like me who should be more savvy in investing that i hold on to something far too long for instance, kamurs which i bought years ago and had a 1,000 gain in it and ive kept it and kept it and now down to about a 50 gain whats wrong with me tell me . Human nature. Its human nature its how you cant clean out your closet and bring it all to goodwill and need to hire a professional closet cleaner. Its human nature. People dont like to everybody hoards. Its the equivalent of admitting a mistake. I had a trade al i was in uber. I bought it shortly after the ipo. At about 42, 43. Got stopped out at 40 about a month ago. Its since gone down to 31 people dont watch every show so theyre not aware that i had taken a small loss in it but the idea of going into these things with an exit, i think is a smart way to do that kind of speculating and knowing where you say, all right, at this price, im wrong the reason i bought it, might still be valid but the market is saying ive made a mistake and people have losses Warren Buffett has had stocks that have been in billions of glrs drawdown. And anyone who pretends every trade they do never has a loss, those are really the people that have the issue, not you. I love the cleaning out the closet analogy josh, i bought uber because of you and then missed the show where you got out of it so im still in it. So whoo. And the other thing, hey, judge got to call me. Judge, every time you have an analyst on, not your panel, but the analysts who come in, and they tell me were living in uncertain times, would you ask them when were living in certain times to call me they dont exist. Good call well be sure to let you know Pete Najarian has something for you. First of all, discipline is exactly what we talk about all the time talking about the losses, you have to have a point where you sell a loss and you sell a gain. And you have those the second you put that trade on. Thats always exactly what we try to stick with. Or at least trimming when it comes to the up side movement. You have to trim when it doubles and then, after that, hold it and make your decision on how far am i willing to let this go . Ill tell you this when you look at the market still today, al. The one name that still stands out to me thats way too cheap, still has plenty of up side. When you look at all the different levers they can pull, its going to be amazing especially if we get this trade war resolved, which i think we will look at apple. It comes up all the time this is a name that i think over time, if youre willing to hold on to this name because of what theyre doing and the other areas that will grow even faster than people expect, i think thats why this stock eventually gets to 300 and beyond ill be watching your segment later today to see which calls im supposed to by i love that hes an options man. Your kare you kidding me its a phenomenal segment. Are you in other big tech names, al . Are you getting out of some of the highflying faang names that maybe have cooled off a bit . What individual names are at the top of your list almost none in that regard. I have a whole bunch of funds that are big, obviously, with apple and microsoft and the tech stuff. You know, i bought ibm 20 years ago. Still have it. Thats another thing ive held on to. You know what its been. Its been this, that, hasnt been fantastic its more of a yield play right now. So im more into the funds now than the individual stocks except when im watching your show and you guys tell me to get into uber or whatever im supposed to get into but i need to get out of it, too. Stay away from that one yes, sir. I hear you you have to run in a second liz young has a question for you as well. Shes on our panel today hi, al, and biggest packer fan on the desk today. What i wanted to say was the academic response to your question is that its called confirmation bias. Fd theres a whole field of study around behavioral finance. We still have it and its okay that you suffer from it, too im going to the couch in ten minutes. Al, cant wait to watch you and cris this year going to be a lot of fun. Terrific keep up the great work. Well see you soon. Ill bring you that list of joshs names just in case you couldnt write fast enough love you, al. Take care. The great al michaels live coverage of the nfls opening game bears packers 7 30 p. M. Eastern on nbc. Cant wait for that. Who is going to win packers going to be a tight game. Bears bears i think the bears are impressive i think what they have coming back and the fact theyre home, obviously, helps khalil mack is unbelievable. Everybody has anointed him this unbelievable quarterback in a league filled with good quarterbacks on plenty of other teams. How well do the Green Bay Packers gel together because they have a new head coach as well my 313 giants prediction only if we see daniel jones no, i think prediction on what we mentioned strategy. Lets mention slack real quick because i think this is a name i mentioned before. I did not have a stop loss in this name and have like a 19 draw down here stock is having a really good day today. Earnings are tonight this will be their First Quarter reporting. Run into the number they got an incredibly high valuation when they went public. I said so at the time which is why i have a small position. I was looking for it to trade lower before adding. I have not added yet if the Conference Call leaves something to be desired, thats when ill probably do so hopefully somewhere in the 20s if norkt, ill stick with this. I dont have a stop loss in on the name im looking to be opportunistic with it. Al watches the show. This is a name ive mentioned before in the past im in and im eagerly awaiting any opportunities to own some if the market gives me that chance. Good stuff. Our thanks to al michaels for joining us roku on a roll shares surging 60 in a month alone. Why one firm thinks its only going higher from here the Investment Committee debates it in our call of the day. Plus, jon and pete are tracking unusual activity in the Options Market stay with us for their latest trades the Halftime Report with scott wapner and the traders is back in two minutes this is the age of expression. But shouldnt somebody be listening . So. Lets talk. Were built for hearing whats important to you, one to one. Edward jones. Its time for investing to feel individual. Welcome back im sue herera heres your cnbc news update at this hour. Rescue crews have begun fanning out across a devastated landscape of destroyed and flooded homes in the bahamas they are trying to reach victims of Hurricane Dorian. The death toll now stands at seven, but that is expected to rise wcau meteorologist crystal klei is here with the latest track of dorian Hurricane Dorian still a category 2 storm moving at 9 miles an hour to the northnorthwest. Take a look at the latest track update we just got this new information in within the last hour and a half it continues to parallel the florida coastline as we move forward today. But its this evening into tomorrow morning that makes that hook to the right. Still at a category 2 strength and then comes very, very close to the South Carolina coast. Look at the North Carolina coast. The new update now having it brush right through the outer banks for a possible landfall, a category 2 strength. Whether or not it makes that landfall or just rides extremely close does not matter. This is going to be a very dangerous storm for the area with large storm surge and flooding rains across parts of South Carolina and North Carolina thats the latest. Krystal, thanks Jussie Smolletts lawyer says that attorney should not have to pay chicago 130,000 for Police Investigation into his claims of a hate crime because he had no way of knowing how much time officers would spend on the probe this in their latest filing to have the suit dismissed. And North Carolina researchers tracked 48 patients with peanut allergies who underwent a procedure that put a tiny amount under their tongue some were able to tolerate it without serious side effects rokus 400 year to date rally is showing no signs of slowing down those shares hitting another new alltime high today after d. A. Davidson raised the produce target to 185 the highest on the street. No big shock that its our call of the day onwhats its price to book value . Being facetious its literally owned by every Quant Momentum Fund on the street this is like the theres no better poster child of momentum stocks no better stock for it. This is a 19 billion market cap. I believe theres a tremendous premium for m a being built into this stock you are looking at 19 million active users with the potential to double that on the international expansion. Read plenty of Research Notes comparing that International Growth to netflix if its the same trajectory. Youre talking about the next five years theyll double the active users if im someone looking or needing streaming, i would certainly take a look. We asked you the question too good to get in or too good to pass up too rich to get or too good to pass up. Too good to get for me. Too rich to gheet in. Sell the puts what would go wrong there hes kidding this is the quintessential story versus numbers and its when josh says hes rule based and i say im disciplined. If youre disciplined, you cant buy it if you have strict disciplines around what you own. You dont know what the rule is i dont know your rule but i know im disciplined there are no rules. Its a great story. Well be right back its a great story. Yeah. This one, scott, we talked about yesterday for unusual activity short term, september 6th expiration thats this week i thought id hold it three days held it less than 24 hours because, yesterday, the stock was 155. Today 168. That will work in fact, those calls are up 700 since yesterday. Thats why you trade thats how you would trade this name because you dont want to buy 168 stock i am out of it now but if you wanted to participate, you could buy it for 170s sell the 175s. You have a small amount of risk on the table you dont have 168 worth of no risk its youre saying this is how many calls i want. Small dollar figure but it has the ability to go up 5x. Like an investment, even in the stock would take years, but heres the thing not only do you have to be right on direction right on the timing. Thats why you do a call spread and do it out like three months im not advocating for anybody because, you know, you guys got to make your own decisions how you trade. How i trade would be if i still wanted to participate based on this analyst upgrade id do just what josh and i were talking about. Worth pointing out sell the 180s three months out the vast majority of trades like that just buying the calls with no other position on, they are going to its going to expire worthless and even the trades that work out, when youre doing that, do not work out to this extent this easily, this quickly this is a very special outcome for the people that have done that kind of speculation good stuff. Good conversation. Up next, the edge on one of the sectors on pace to close at record highs today heres the s p sector heat map s s p up almost 26 rba aerhiding the way wee ckft ts. Problems. Its human nature to hate problems. But why is that . After all, problems inspire us to mend things, bend things, make things better. To rewrite the rule books, the history books, and future books. Thats why so many people work with ibm, on everything from city traffic to ocean plastic. From new schools, to new energy. From flight delays to food safety. Problems even got us to the moon and back on one tank of gas. And who knows where theyll take us next. I can. The two words whispered at the start of every race. Every new job. And attempt to parallel park. electrical current buzzing each new draft of every novel. typing clicks the finishing touch on every masterpiece. newborn cries it is humanitys official twoword war cry. Words that move us all forward. The same two words that Capital Group believes have the power to improve lives. And that, for over 85 years, have inspired us to help people achieve their financial goals. Talk to your advisor or consultant for investment risks and information. Welcome back to the Halftime Report. Im seema mody time for etf age Consumer Staples stocks poised to close at new highs. The etf lows prove it. Staples etf seeing 1. 3 billion in in flows over the next month. Do you stick with safety here despite high valuations . David and steve joining me to discuss. So, dave, do you think this rally can last earnings had been good for Consumer Staples but not great its really been driven by retailers. The thing that makes me concerned is valuations are quite higher looking at forward pes north of 20. And you are pulling in things like tobacco stocks which seem like a risky play in a market like this. David is being extremely decisive and cerebral about this unfortunately, the market hasnt been the market has been hunting for defensive plays and safety plays. And yield and yield but think about it a utility is going to do better during a recession they can pass on those rates to the clients that they serve. Or during good times, its also going to do well as well so i think that they are safety bets i do think that they can extend their gains for the year from a valuation perspective, does it make sense when a lot of these Consumer Staples names are trading at 25 times earnings and only growing profits by around 2 to 4 if you look at technology, technology has outpaced the overall market for the last five years, for the last three years. So indefinitely tech has been the outperformer but we cant call that a safety its not safety what im saying is you never buy tech for valuation right you buy tech for the outperformance because youre paying it forward. Now when i think when its standing on its head, all these safety bets cant be looked on and engage on valuation. Dave, last word i think youll see more money flow into this sector. That means youll see some of these price comes. Theyll still be a little overvalued dave and steve, thank you for joining me stay right there etf edge our live online show starting at 1 00 p. M. On etf edge. Cnbc. Com well have more on protecting your portfolio and how to play the ipo boom with renaissance capitals Kathleen Smith halftime returns in 30 seconds. Welcome back to the Halftime Report im Julia Boorstin with a news alert. Another highprofile twitter hack chloe moretz, tweeths out what claimed to be a Social Security number for jack dorsey all of those numbers have been deleted. They referenced a Hacking Group which claimed responsibility for the hack of jack dorseys account on friday. Twitter tells me theyre working on this and expect to have an official statement shortly now its worth noting it does appear the hack is similar to what happened to dorseys account last week. His phone account, his phone number account was compromised which is what enabled the hackers to send tweets via text. Well see if this turns out to be the same thing. Its not impacting twitter shares they are bup about 3 . Lets answer some of your questions now. Jenny harrington, youre up first. Sue in indianapolis, how will i hit the jackpot with Las Vegas Sands . Good question. I think your timing is perfect on Las Vegas Sands its got a 6 dividend yield trades at 16 times so its cheap. And if tensions cool with hong kong, that should be positive for the stock. Jon for you next. Ken in North Carolina. Google do i start a position in google, ken asks this is another one of those similar to roku. Not because of the valuation but because of where it is, its under 1200 a share but 1200 a share . Those kind of things are mindnumbing i would buy calls in this one and right now we are seeing calls in googl, up side calls. Ken, appreciate the question. Thinking of all you folks down there as well with that hurricane. Be safe. Liz, for you, from brad in oakbrook, illinois Small Cap Energy when is the time to get into that hi, brad. Just because its cheap doesnt mean it cant get cheaper. I would be waiting through fall here to let some of the macro volatility subside and let high beta stocks calm down. Okay. Joe from carson in maryland. Starbucks. Big mover today on some guidance that was not great yeah, some negative comments at the Goldman Sachs retail conference theyll lower the buyback and tax benefit. We knew the tax benefit was going to roll off. Focus on the operating performance. Sales growth in the prior quarter the best in three years. Not ready to give up on this yet. It still takes out the july 99. 75 high. Options traders making big bets on big tech first kelly evans tells us whats coming up on the exchange. A lot of headlines from fed officials. One thing is becoming clear. Theyre not united on the rate outlook. Well look at whats being said and where powell stands amid all of this. Less than a week before its big event, a look at what apple might have in store to boost sales and to weather tariffs when it comes to streaming music, the older the better. Thats ahead in rapid fire. Ill see you then. Halftime report is back right after this at fidelity, we believe your money should always be working harder. Thats why, your cash automatically goes into a Money Market Fund when you open a new account. And fidelitys rate is higher than etrades, td ameritrades, even 10 times more than schwabs. Plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. Just another reminder of the value youll only find at fidelity. Open an account today. Welcome back facebook top performer of the fangs in 2019. Up 42 bullish options traders are betting the run will continue. John and pete have that unusual activity pete im going to start out. The stock made a big run from when they start ed buying the calls up the stock was just under 185 when it started, scott they were very aggressively coming in trying to buy these september 190 calls. You can see them there they were trading for about a dollar at the time they were originally bought. Then 1. 10. The highest was about 1. 15 i jumped on them immediately im lucky in terms of getting in at those price levels but they are higher now this stock, can it get up through 190 . Its closer now than when they first started buying the calls ill be in these call it less than a month they expire quick. I have one more for you. Intel. Theyre buying time, going out to november. Look at this little bit of a move we finally are starting to see out of a lot of semiconductors moving to the upside intel along for the ride as well a nice move over the last couple of weeks we have seen it start to move to the upside stock trading under 49 they are buying these november 49s. They bought 8,000, spread them off, outside calls, came back in, bought another 5,000 they were actually selling the down side put. In both cases, very bullish. Expect the stock to move to the upside, maybe up and through the 50s. Im in them as well. I will be through the november expiration, unless they move faster, quicker. Take a look at yeti the following is cultlike for the big coolers. Up over 2 today the stock is trading just beneath 29 they are big time buying calls out in november as well. These, the november 35 calls initially we saw about 4,000 of those trade. Then to 5,000. Now its over 8,800 of the calls have been accumulated. Starting buying in big blocks at 90 cents now they are 1. 20 as of when we went on air. Obviously a lot of time for them to be right. I am in the calls. Probably be in them two months quick update for you take a look at michaels stores, mik, did it as a final trade yesterday. It had a 23 pop in the premarket today. Gives you another idea i tweeted this as well why you need premarket access and post market if you want to trade some of the stocks because this one in particular came out with those results and people loved them but it was a lot higher earlier today. It was 6. 85 and now its 5. 95. Still a winner. For sure. Met. Righ co on back, guys well do final trades after the break. The world is built for you. So why isnt it all about you when it comes to your money . So. Whats on your mind . We are a 97yearold firm built for right now. Edward jones. Its time for investing to feel individual. Doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Tonight on cnbc, high risk, high reward. Cannabis inc. Tonight at 6 00 p. M. Eastern, 3 00 p. M. Pacific. Do not miss melissa lees new documentary. Pete med tronic. I have owned this for a long time we are seeing more call so it has more upside. Okay. Wheaton Precious Metals we have talked about silver, gold this one, wpm, had it last night. I think it was 28 and change now over 30 1 2. They are buying again. More upside calls i added to the position. Liz young consumer discretionary. It sounds like an old story. Its still the single most positive contributor to gdp. As long as the labor market holds up, consumer does, too. This is the question, if the consumer will hang in there. It is. Do you think it has more to do with the jobs picture than the tariff and trade picture if im a consumer and i have a job and have confidence i can find another job, yes. Jenny westrock. There is a misperception of how badly trade hurts this Paper Products company it has a 5. 5 dividend yield and is at 33. Cheap with a good yield. Thank you josh im switching mine to shake shack. The company spoke at Goldman Sachs today at the conference. This stock is now 103. I bought it at 40. It went to 20. I look like an idiot now its a good message. If you believe in something as deeply as i do like cheeseburgers, dont give up on your dreams. Dont stop believing. Joe, finish us off. I like lizs comments on Small Cap Energy energy is making a nice risk on move today apache works that does it for us the exchangebegins now thank you, scott. Hi, everybody. Heres whats ahead. Its the battle within the fed as more members speak out on Monetary Policy they are not on the same page. Well talk about what it means for chair powell, what it is telling us about future rate cuts and the feds credibility well dig into it. Plus, shares of uber and lyft hitting new lows with uber breaking almost 30 a share. If investors are this cold on their Business Model what does it mean for the looming ipo . And why a senator thinks Mark Zuckerberg should face jail time a vegan

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