Maker soaring today. Now up almost 90 this year. The stock just got a huge upgrade. Its our call of the day Halftime Report starts right now. Welcome good to have you with us our Investment Committee at the table, joe terranova, the brothers are here, and meghan is here as well, Senior Investment strategist at the wilmington trust. One of the best performing large cap tech stocks of the year, microsoft. Beating on earnings and revenues the shares are moving higher pete najarian, everybody owns it at the desk. You get the first crack because youve been the biggest and longest believer. I continue to be a believer this all started with it went in the right direction what has he done we talked about how great the focus has been on cloud but the monstrous acquisition they made with linkedin everybody was critical about and that is starting to be another one of those verticals we talk about when we talk about names like apple and other names we talk about what are some of their areas they will generate great revenue. This is a 25 jump the growth has been spectacular. Theyre slipping in gaming but the overall story is everybody is looking at azure and want to see okay, 64 to 59 look at amazon, aws, that has slipped back down, thats around 37 growth so theyre still growing, yes, its decelerating but you would expect that to decelerate a little bit it will continue to do so. That doesnt mean theyre not winning right now as they go head to head with amazon. Can you answer the question i asked at the top a fair question to ask, is microsoft the best large cap tech stock to own right now . Two minutes into the show youre going to give me a hard time about my answer because my answer would be if youre a Portfolio Manager and you identify heres my choices for technology stocks, amazon, thats consumer discretionary, take it out of the conversation, facebook, alphabet, the communication services, take that out, im down to apple and microsoft. Youre asking me to choose between you dont have to choose. Say its one of them. Its its one of them. Belichick and brady those two distinctively in technology stand out above others i will say this, the defensive quality about microsoft is becoming more evident. If we are late cycle, and who knows economically if were at that point, but cap x and spending in Technology Begin to retreat, i feel really good about being long microsoft because i think thats the one equity name that is so defensive that youll see less selling pressure you might see a little bit more apple. Whats amazing is how the narrative around the story has changed. The stock had a run into the number, revenue guide was a little light, but the narrative today is, theyre being conservative not that theres a slow down with their revenue i bought more microsoft today because if you look at the Earnings Report and think about how we talked about how long everyone was going in, to see the stock here, up over 2 , i think thats an exceptional performance. The risk was to the downside on this given the move, dont you think, steve without a doubt, the risk to the downside it was trading below its alltime high, but when you handicap the risk you have a ceo that has continued to execute, done a great job of guiding the street to his numbers, i thought it was apretty low risk. To me, it is the stock to own. Brady and belichick are in different positions so, of course, you can open them both i would have said brady coach and a coach and a quarterback and a quarterback. Makes more sense. We wont go to you for sports analogy. In any event i think it is the one to own. Im with him on this. It has the subscription base. Linkedin is just an animal i mean remember all the criticism he got for that acquisition so much money he paid, overpaid, whats it going to do. Yeah. So i like it because i do believe, as joe does, that as defensive as you can get here. The only issues are with the stock price, not with the fundamentals who is the marginal buyer now because everybody seems to own it everybody has owned it number one. And then something that cant control as well, which is the market itself which i believe is in trading range but for that you see a stock up a lot more than today. So meghan, you got wedbush going to 170 on the price target that looks to be maybe the high on street on the cloud strength you have others raising the price target across the board. Do you own it . Everybody else owns it. Do you from a sector perspective we do were neutral to technology weve liked software for a while now and i think to steves point, though, its been a go to stock for the market, a darling with the trade tensions and so at this point while we still like the cloud story, cloud spending is anticipated to increase three times that of overall i. T. Spending between now and 2022 thats a good thing for the cloud story of microsoft but valuation and overcrowding is a risk at this point, so you have to be thinking about whether it might be time to trim a little bit out of the software and maybe start to tip toe into semis. Good reason why cramer says you have to put microsoft into the f. A. A. N. G. Group and get netflix out. Hes right. And microsoft belongs there now. Azure, the growth there was 59 . 63 in Constant Currency so its one of the few times im going to disagree with meghan. You have to load up on this one, scott. I mean the diversification theyve got, the fact that operating margins are 38 versus 34 year over year, who else is doing that where can you get that i mean when you look at the guidance for the next quarter, i saw intelligent cloud is going to be between 11. 25 billion and almost 11. 5 billion thats the diversification. What did they used to be operating systems. That and, you know, as far as word and excel and all that. Everybody said google is going to kill them theyre giving it away well thats still a 12 billion revenue number quarter after quarter after quarter for them and again, its reoccurring revenue rather than just a onetime fee that you bought it. Like i say, one of the few times im going to disagree. Fair enough. With meghan such an argument to talk about a slow down in the cloud its the law of large numbers. You cant continue to grow that fast no slouch in terms of the number theyre looking for is it fair to say nadella is one of the best ceos that not enough people talk about . Aside from pete mentioned his name, but its not like to the point he gets mad at me for mentioning his name. Talked about in the same realm as some of the other ceos. Because he made the transformation of a company and those are the guys who deserve to be talked about we bring up ryan cornell not just because targets stock has gone up but because of the fact that he took a company that was broken and fixed it and made it better and then enhanced what they were doing with the 7 billion they put in to redoing all the stores can you imagine. If you look at that and what Satya Nadella has done since hes taper over, so Many Companies that cannot make that turn you look for the ceos who can make that turn thats why nadella is so special. That was a turn that stock was trading give or take call it 40 a share when he started this whole process and said look, were going to the cloud. Think about the cultural change he had to manage and to me that is the ultimate test of a ceo. That he took a culture very stayed at microsoft, even somewhat tired. Tired. Wasnt innovating, right, and just turned it around without massive disruption from the day he got there its been straight up yes, i think hes one of the top ceos lets look ahead to amazon and intel. Shall we sure. What do we want to say about those after the bell yesterday, you know, i talked about micron in terms of we look at different tech going on right now and also the semis in different ways i think intel actually has a chance to put up a pretty good quarter. In terms of amazon thats just the difficulty that they have to prove that aws is not losing to microsoft. If they can put up some strong numbers on the aws side, scott, that will be the important part. Ecommerce we know they own it its about aws and what are they doing there. Thats the margin where theyre making the money. The word margin was just used and if you look at microsofts report that is what was so impressive increasing spending but yet margins rising can amazon do that can they follow that formula we will see. I think its important for amazon in terms of a Price Performance to finally come out and be up 3 to 5 after whatever this report might be because that would be uniquely different than its been the last four quarters i have concerns about both. Intel because of what we saw in texas instruments. They are more like them with some of their businesses, not a dominant part of the business like texas instruments, but i have concerns about that in terms of amazon, its just not been acting well its been hanging there. I would take jims comments one step further i dont think the f. A. A. N. G. Really exists anymore. We call it people call it the f. A. A. N. G. Because they were leading the market higher. They were moving weve had amazon and alphabet stuck in neutral, right. Facebook has its own issues. I would go to a new acronym, which i cant give you right now off the top of my head but microsoft would be in there. You mean you have to think about you dont have a new one, you need to think about it. I dont want to dazzle you with quick thoughts and lose you. Obviously you dont have it he doesnt have the goods. Intel has catchup to do too, right . 10 year to date relative to other names in the chip space. Chips have been a good trade. Chip equipment names. Lam research. Lam Research Report last night was incredible obviously memory which is important im saying like micron and nvidia and amd. Smh. I would and intel running behind the group. You sold it lower and i understand it wasnt a bad play. You made a lot of money and got out. I think it has upside. I think the upside is on the equipment names. What about give me the best equipment name right now . Lam research. Were going to talk about that later tell me why later. Twitter ouch yeah. Brutal. Weiss, you own it . I do. I sold most of it. I said on another show yesterday that i sold most of it. Frontrunner many times the reason being the reason being is that as you go on the site you didnt see the advertising there. And it just wasnt there. You sold it into the number or after the number. I still have a very small part i sold it yesterday morning before the number. The stock was also giving a tell, just wasnt acting well. It wasnt participating at all the numbers really had nothing to do with my selling it it was a different demographic to go to but look, you know, stocks sometimes tell you something and the terrible trading activity in it was so consistent that i just got concerned and i spent a lot of time going on the site to check their advertising levels and they werent there so look, this is one that they say there was a bug. They blamed it on themselves, a bug in the ad product. Its not even that doesnt give me confidence, right. And then they also talked about seasonality. Seasonality happens every year its the same seasonality. How do you ever i never understand what if advertisers are souring about the mud pit . You would have to be, wouldnt you im being nice. You cleaned it up yep. You are correct. I was going to say to your point about that bug or whatever it is thats affecting, this is something that needs to be addressed like when that happens, scott theyre saying its still going to extend into this next quarter, perhaps even beyond that i dont understand how that could how jack could put up with that. How do you do that when this is your life blood. Thats all they have and the fact that instagram is killing them, the fact that certain analysts today are saying boy, snap over twitter right now as far as ads because youre just not getting what youre paying for with twitter and then you mentioned the mud pit which is also pretty accurate i would say yeah, im not saying its a dont touch im saying if theyre not doing anything right, right now. Nothing is right about this report want to give josh josh not on the show, but we got a comment from him because hes been the biggest supporter of the stock on the show, fair to say. He said the quarter doesnt change his opinion about the longterm value of the platform. Theyre trying to clean it up. But this is shortterm earnings negative i guess hes willing to deal with some pain in the short term for some longterm gain. I think the only thing to consider and ive said this in the past six months what if theres social media exhaustion. Potentially that could be the case youre beginning to see the evidence with it both with facebook and twitter the content that is being provided right now on twitter are we as energetic about absorbing that content as we were a year prior, so everyone keeps talking about well, in 2020, the election will play out on twitter i dont know if overall we are really gravitating to get that information. It seems like we want less of it ill use the president as an example, okay, the president aggressively tweets on a daily basis. I dont know if his tweets are being viewed as much today as they were being viewed six months ago because i think theres a degree of exhaustion. Ill take the other side of that real quick, im hearing all the negativity being thrown at it right now the stock is up 35 plus percent going into the number, now its pulling back 5 bucks above the ipo price ad revenue was up 8 . They missed expectations, but that doesnt mean that theyre not still growing. To joes point hes talking about well, i still see this the president tweets people view it they are viewing it. The matter of whether or not hes still moving markets is a different story but whether theyre viewing it, i would say they are were seeing some of the growth thats there and that growth i think this is an opportunity in my opinion creates an opportunity. Maybe people view the discourse, if you want to call it that on twitter theres a lot of negativity and i understand i would otherwise im with you. I see it all theres a lot of trash on there. People are addicted to that. The other issue is data privacy. As i understood it the ad bug was related to consumers not, you know twitter not respecting what the consumer had selected in terms of their data privacy and it seems like they tried to rectify it and stop that issue, you know, immediately, whether it will have spillover effects in terms of ad revenue is another issue this is front and center for policy. Whether you look at the stock today down 19 , do you buy it today . Im looking at it but i dont usually try to buy on day one. Give it a couple days and then i will be staring at this stock an wanting to buy it. Theres a lot of different areas when they reported that were pretty nice. The daus up 17 year over year how do we know if theres still i get it, but i mean im going off the numbers. I did not like this name when it was up there obviously where it was. Thats why i didnt own it now that its pulled back and its taken off a lot of what it had gain this year, i still think that does create an opportunity. All right lets turn to the Broader Market our next joining us at the table saying were not at the top of the market and earnings may be the reason why dan greenhouse chief strategist at sollternative Asset Management welcome back thank you how long has it been since youve been on the network its been a few years what . Good to see you again. You got younger, though we should all be so lucky. Good to have you back earnings is it part of the reason why you think we have upside to go not as bad as feared. Listen, theres obviously a lot about which we all worry every day the environment as cloudy as its been any time in the last ten years you need to think about the investment landscape built on four pilars. First the equity market, defined by the s p 500 has effectively gone nowhere through the better part of a year and a half call it theres been sector rotation underneath but as a headline thats been the case thats not really a topping pattern. Thats generally a bottoming pattern. Thats part one. Part two Earnings Growth obviously not good right now, but the base effect which works against you right now is going to start to work in your favor next year. Number three, you have the Federal Reserve which began cutting rates over the summer as any economist will tell you, Monetary Policy operate with long legs. By the time you get into next year you have a tailwind fourth the wildcards maybe you get a trade deal, brexit works in your favor and some of those macro head wint winds start to fade. Based on the four things if they work in your favor and i think they will that environment is for the upside. Maybe the fed pauses, maybe theres, you know, false optimism out of trade and it doesnt come to fruition the way people think earnings dont recover meaningfully enough to carry the stock market higher. Theres still slowing Global Growth to hold down the overall story. Listen, we can shoot holes in that and i can take the other side of it, but when you listen to what companies are saying right now, 7 organic organic revenue growth, Procter Gamble, same thing, both guided higher for next year, costco, membership numbers are doing quite well, the Home Builders, lennar and pulte, how the decline in Interest Rates is helping to boost home ownership. Caterpillar is on the other side. Texas instruments and the like didnt do well. Again, i think to the point about maybe earnings arent going to be as strong, bottom up consensus around 10 i sell that all day. Probably closer to 4 or 5 if the fed pauses its because things are doing okay and thats going to be good for stocks. And while you can shoot holes in any argument one way or the other to me, when you look at the totality of the evidence so to speak, i dont know why were on the verbal of a recession you have a meaningful and sustained drop in stock prices. Yeah, i mean i think its tough. We think that were still at a crossroads im not, you know, confident enough to say we are definitively heading higher. We think its still kind of in this muddle through where we could inflect frankly in either direction. I think trade remains a big part of that even though we dont want that to be the case we are kind of marginally getting more optimistic on that front. At the end of the day theres still that unpredictability. Were watching three things. Stabilization of global data, which were not really there yet, its more mixed we might be finding a bottom, but i think its too early to say that resilience of the u. S. Consumer. Again, some perhaps cracks there, but, you know, for the most part he mentioned some of the stocks that have done well. Yeah. The home builder trade were going to talk about a little later. The other thing the Economic Uncertainty. Were at peak Economic Uncertainty whether we continue with the reescalation of global trade tensions, that would i think reset us lower if we can continue and get this phase one and kind of move in the other direction, remove some of the tariffs i think you could be looking at another kind of mini cycle and a recovery that has some legs to it. Yeah. I mean the one pushback i would have and i agree with the ending argument there, the peak Economic Uncertainty we had that in 29 when greece said they lied about their debt and 2011 when the u. S. Was downgraded and 2012 the fiscal cliff a perpetual series of headlines about which we can worry and while this one is to some degree more meaningful, or more concrete, than some of the others, i would argue its probably no less different and ultimately if we get a resolution and thats a biif, ultimately those other that are better Earnings Growth and economic environment will play out the only difference there i think is that we do have global Economic Uncertainty whether you want to look at an Economic Policy uncertainty index that is meaningfully higher than where we were at that time the other thing concerning ceo confidence we talk about it a lot in terms of what that does to cap x and kind of the input to gdp the other thing to think about is what that does to the buyback environment which tends you might expect it to slow anyway heading into an election and then kind of compounding the trade stuff on top of it thats the bearish argument. As i said i think that, you know, were neutral to equities at this point and need to be patient. Dan, is there a Political Risk we always talk about this time is different and it seems as though the conversation around the 2020 election has that premise, that this time could be different. There is the Political Risk for equities and asset prices. I want to make clear right now making no comment about politics but clearly you would be asleep if you werent paying attention now and politics was a risk. I think president s in general, senates in general get way too much credit about the pass for the economy. We can set the tone over long periods of time but the underlying economy will win out irrespective over who is president and look back and hang on our hats on different arguments for people and the ebts market does or asset markets in general do what they want to do president s often get too much credit that said as you progress through the year, this election in particular, theyre all the most important election of our lifetime this one is right up there with the others. What do you make of sort of internally the way the market has traded theres been more of a move to value over growth. We began the program talking about some of the f. A. A. N. G. Stocks and microsoft added to that youtongue and cheek a bit does the market need that group to accelerate in order to get out of this range that weve been in . I dont think so. It would certainly be helpful. What i find interesting when we talk about value stocks and what solis does is value investing. What seems to get missed the number one largest value stock in the s p is apple and i dont think traditionally people think of that as a traditional value stock. I think it would certainly be helpful but again i mentioned proctor and beganble a compa Procter Gamble talked about 7 organic Earnings Growth into next year youre seeing growth elsewhere besides the f. A. A. N. G. S. So i dont know necessarily from a size market cap standpoint it would be helpful in the super large caps like amazon picked up and could help you take the index higher the companies themselves are doing pretty well. Again the few i mentioned earlier. A quick one first of all, a great fund the question is couldnt the market be topped out youve had the market hold its level despite Earnings Growth come down dramatically so thats a glass half full. When you take that in conjunction shnk with wh conjunction with what meghan said why should we go substantially higher profits are the mothers milk of stock prices and ultimately as you enter next year and the effect starts working in your favor the economy should pick up, obviously the consensus doesnt think that, im not sure, and ultimately i think that will be a tailwind if we get some of the contributions from the stocks not necessarily contributing now. I thought the phrase you were going to use is the trade talks are going well theres too many to pick from good point. Good seeing you again. Totally my pleasure. Thank you very much. Dan greenhouse with solis joining us what else is coming up on the Halftime Report. Southwest shares feeling the love the airline beating earnings estimates despite a hit from the boeing 37 max groundings the Investment Committee is ready to debate the space straight ahead jon and pete are track unusual activity in the Options Market einethr w trades coming up the Halftime Report with scott and the traders is back in two minutes. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. That could allow hackers devices into your home. Ys and like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. We always evaluated other aircraft, aircraft manufacturers and when theres new technology that comes on the market, weve done that numerous times in my 34 years at Southwest Airlines next year will be appropriate for us to do that again and yeah, im primarily talking about diversifying and having a sole supplier. That was southwest Ceo Gary Kelly on squawk on the street this morning talking about the 737 max issue with boeing and the airlines relationship with that company southwest airs shareholders rallying after beating profit estimates despite taking a hit from the grounding of those planes lets bring in phil lebeau phil, surprised or not by those comments im not surprised at the comments because hes alluded to this over the last six months. He was correct in saying its not new news, but what is surprising is just how explicit he was in terms of showing his frustration and southwests frustration with the 737 max issue and just how strained the relationship is right now between southwest and boeing scott, in the world of airlines, no two airlines and manufacturer have been closer than southwest and boeing they have flown the 737 exclusively since the Company Started in 1967. You talk about two peas in a pod, it was these two companies here its clear from gary kellys comments that he and the board of directors, along with other executive at the airline, are going to be looking at the potential to possibly buying air bus aircraft in the future whether thats the a220 or perhaps an a320, that is a huge statement in itself. Now weve known that they have looked at other aircraft, but in the past you never heard anybody say that southwest would seriously consider leaving boeing that is a distinct possibility and he said theyre going to be looking at that next year. Do you think its more likely than not its gotting to be something h comes on tv and willing to say it, hes a gentleman but you could hear the anger in his voice and frustration with this story. Absolutely. Too hard to say whether or not theyll actually pull the trigger and say were going to add the a220 or a320 into our fleet. When you move away from having one single aircraft as you can imagine, youre going to add complexity and costs and it makes a change to an airline thats the beauty of only flying the 737 all of these years for southwest. Its one of the advantages that the airline has had. Now theyre seeing the flip side of that. This is the problem with flying only one aircraft, when you have the max being grounded for seven months, its hurt their capacity and hurt their ability to grow as an airline at a time when they want to grow. I dont i would not discount the possibility entirely that they might diversify and might add an air bus type of aircraft into their fleet. Yeah. Jon has something for you. Thank you phil, i got to view this as a bluff. I mean if oleary over with ryan air said the same thing, you and i would both be shouting bluff there is no way youre going to take that many mechanics and basically throw a bunch of new mechanics on an air bus when thats all youve thrown or 737s since the beginning of the airline. I cant believe that anybody takes him very seriously when he says that. That sounds completely like a bluff coming from southwest even though as you say, this is a very respected dude, i think hes just trying to bluff. So understandiyou think heso get a better deal, i want you to bring down the price of the remaining maxes we have on order . Throw this at you, you dont think theres a possibility that southwest might take a look at spirit or at jetblue and say you know what, we believe that this is the time for us to grow and we could do that let me finish. If we think thats the time whats the difference between looking at possibly acquiring one of those airlines were not saying they are, whats the difference between that possibility or saying to air bus, you know what, if you can get a sweet deal on the a220 were interested in using that in markets that we fly. Ill answer that. Youre right the only way they get into air bus is through purchase of one of the other airlines that flies those. Because otherwise phil, they go to the back of the line with air bus no, no, no. What . They dont go to the back. They go to the front of the line are you telling me that the ceo of air bus would not roll up to the headquarters of southwest and make a big production about the fact that southwest, the darling of boeing, is placing an order for air bus. Oh, they would they would find some slot positions pretty darn quick. Who does he jump in front of . I mean both of these guys have tens of billions of dollars in backlog. Are you saying all of a sudden he jumps over all the others, over lion air and everybody else do i think that southwest would jump to the very front of the line and get a block order of 50 a 220 or a320, no but find slots so theyre not waiting six years to get airplanes, you bet. I do too. That is a huge it would be a huge feather in the cap of air bus. You have to believe also, phil, i wonder how gary kelly thinks about this, theyre so exposed to the max, he must know that theres going to be consumer unease once that plane gets back in the air. He knows that. Theres going to be unease and people will be looking at the equipment and trying to find out if theyre flying the max and may not want to fly that airplane. The question becomes how long is that uneasiness last, scott we were talking with joe din naredy from stifel and he said theres really no direct comparison he alluded to a 60 minutes piece about allegiance a couple years ago where they suggested and it was unfounded that allegiance had unsafe planes there was unusual softness in the bookings for alee gant after that report came out that was one single report with a small carrier. The question becomes, how long will it take to convince passengers not just at southwest but at american, united and a number of other airlines around the world that the plane is safe i dont care how many times a ceo gets on or the pilots come on and say its great, its safe, it will take time. Thats right. I think youre right we appreciate it as always. You bet. Phil lebeau for us. For the latest on the story from chicago. Tomorrow on mad money, jim cramer will speak with the American AirlinesCeo Doug Parker pete, you own southwest. I do, yep you know what, im excited about this company because of the fact that they still have the execution side of this thing when you look at their numbers and we knew through united and others its about demand and they have pricing power. They were able to hit these numbers, theyre very, very strong, thats why the stock is reacting the way it is today the combination of that, united, i think across the board the airlines right now are in a very sweet spot where theyre able to raise these prices as some of the the demand is growing while the seats throughout because of the 737 being pulled off is coming out. What about the idea of a transaction around this airline . Thats where i was going. Whether they buy somebody or somebody buys them in the middle of the country. I think you have different antitrust considerations. I wonder who. You have antitrust considerations now that you didnt have before with consolidation and generally what you hear in washington theyre unhappy with all the fees. Lets look at the boeing side. I dont think the negotiations is necessary for lower prices on planes its caused southwest, this is my concern with boeing, even though i own it and bought more recently, that southwest says were out 500 million, thats where the negotiation is on what the settlement will be between boeing and southwest i look at we know theyve lost a year of cash flow. When you take a look at all the reparations is it going to be two years of cash flow theyre losing with boeing so thats whats got to be figured out. Boeing is not going to say here is what were reserving for because lawyers have told them not to do that and they shouldnt. Jetblue in the same place it was in 2015 and that would be the perfect ac question sgs for southwest and a solution they diversify the planes. Well see what happens. To Kayla Tausche in d. C. Has a news alert for us. Vice president monetaike pen just ended a speech that the administration is going to keep the pressure on as it tries to get china to end its unfair trade practices by deeds, not words, even as a phase one trade deal remains within reach in this speech given at the Wilson Center supposed to be given in june and then delayed because of trade talks, Vice President mike pence said that China Remains a strategic and economic rival, and that its economic expansion is coming at the expense of Civil Liberties and the rule of law. Vice president mike pence going a step further than President Trump on hong kong saying that the u. S. Stands with demonstrators there and says that beijing needs to end its intervention which has only gotten worse the Vice President also taking an opportunity to criticize nike and the nba and their operations in china and hong kong pence called the nba a wholly owned subsidiary of the Chinese Communist regime and sharply criticized nike for pulling its houston rocket gears from stores in china says that nike calls itself a social justice champion, but that essentially was not acting like one when it came to the money and the allure of the market of china certainly a withering critique of the xi regime in china, even as the administration continues its negotiations scott . Thank you were taking a look at the shares down by a bit more than a three quarters of 1 sue has the other headlines for us. Thank you, scott. Heres whats happening at this hour california Officials Say a fastmoving wells fargo burning in sonoma wild fire burning in sonoma has rapidly grown. 80 mile an hour winds have stoked the flames and residents fears and prompted evacuations pathic gas and electric has cut off power to that area secretary of state mike pompeo and ivanka trump touring Wichita State universitys National Center for Aviation Training they are expected to take part in a roundtable discussion with school and workplace leaders. And russian president putin seeking to expand moscows clout in africa touting military aid and economic projects at the first ever russia africa summit. The two day summit in sochi is being attended by leaders of 43 of africas 54 countries a longawaited Leonardo Da Vinci exby digs opening its doors commemorating the 500 Year Anniversary of the death tickets have been sold ahead of that opening which runs until february 24th of next year hottest ticket in town thats the news update scott, ill tend it back to you. Thank you, sue. Up next, bill pulte with us to talk about the state of housing and he itangs ki philanthropy to a new level. Dont want to miss that. Halftime report is back in two minutes. Is the monolithic view of emerging markets obsolete . At pgim, we see alpha in the trends driving specific sectors of outperformance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Every day, our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Fun fact 1 in 4 of us millennials have debt we might die with. And most of that debt is actually from credit cards. Its just not right. But with sofi, you can get your credit cards right by consolidating your Credit Card Debt into one monthly payment. You can get your Interest Rate right by locking in a fixed low rate today. And you can get your money right. With sofi. Check your rate in 2 minutes or less. Get a nofee personal loan up to 100k. Welcome back Activision Blizzard up 17 for the past three months and bullish options traders think there is more room to run. They have that and other stocks among unusual activity. Activision blizzard, these hit when the stock was trading lower. To give you an update the stock trading 54. 9 buying tomorrows expiring 55 calls. It was 5700. You can see this volume is pushing towards 8,000 right now. Those are already starting to cruise to the upside i have a day in these max. Thats number one. Yesterday we talked about micron, stock trading 44 a share. We talked about the 45 strike calls that are out november 8th. Those have moved a dollar at the time you can see where that stock is. They are worth 1. 70. You have to take some off. Be disciplined this has moved and you have to take some off. Were talking about a monstrous move in one day there. Be careful okay. Doc, what do you got a quick one, emirate therapeutics, december 30 calls. See the stock making a nice upside move here and december 30 calls, they started buying them with the stock in the 25s, now its pushing into the 26 range december 30s ill be in these about two months second one real quick, last week we talked about kronos, cannabis replat replate related stock somebody comes in today and buys the calls, bought them in big numbers. Another 40 pop in the afterhours im not saying we do but these calls expire tomorrow. So thats another big bet just ahead of that. I bought them ill probably be in them less than 24 hours, scott. Wow. Thats super fast money over this way lets talk Home Builders theyve been one of the best trades in the market the past year the itb, etf that tracks that space surging more than 50 . Will it stay hot that is the big question and lets ask bill pulte of Pulte Capital Partners a board member of pulte homes. Nice to see you. Great to see you, scott. That is the question. This trade has been hot. I cant talk about the specific companies but the housing industry and the economy is very strong, especially with consumers. You know im a big investor in Housing Products companies in particular margins are stronger than ever, ebitda is higher than ever actually m a activity trading at an alltime high in Building Products the market is hot. New home sales fell in september. Existing down too. Is there a number on the ten year that scares you i think if this thing increases 200 or 300 basis points housing and real estate change we saw a softening and the markets rebounded as a result. If you would have had movement in terms of the fed you probably wouldnt have a strong 300 days. The biggest question out there whether the consumer can hold up. The manufacturing economy has been tough the consumer has been the pilar of strength. You dont feel like theres any crack. I was told by somebody mortgages are the mothers milk of housing and as long as the mothers milk of housing is okay real estate tends to be fairly well i think with these interests making things more affordable and seeing that reflected in the broader stronger market. Joe, youre the one who has been all over the trade for a while. Yes. And some of the other product stocks, maybe rather than builder stocks. I think thats the right way to play it one of the reasons ive directed my investments towards amasco the concern i have is the valuation of land itself do you view that as a headwind for housing . Because it seems to be theres not much incentive to build given where the values on the land are. The good thing about land you cant get rid of it unless you buy it in the wrong location what happened in the last recession people got smart about where to buy property so i think the market generally speaking people are buying land in good places these days. Theyre not buying them in the boon docks so to speak youre right to be focused on the building Products Companies. I own them stronger than ever. You got a question . I love of course i love bill pulte. Talked about the builders its been a stock in my portfolio. Yeah. I have a question. Okay. You dont have a question i do. Sorry. Mortgage rates like you say mothers milk for the sector i think theyre going to be lower for longer and by that i mean several years into the future so are you looking at that long of a ramp perhaps for some of the Home Builders . I think the market is strong. I think its going to continue to be strong, absent some Material Change in wage growth wage growth is strong and when people have more money, can access cheaper mortgages things go well. The mortgages being underwrit reason pretty solid. I dont think youre going to see a reversion back to the last recession. What do you see in the commodity inputs they havent gone up. Longer prices are up. Thafrs going to be my question lumber prices are up with volatility around tariffs and from canada. How do you factor that into and labor costs as well. We had a tariff in the chinesecountertop business and able to pass it on to consumers. The consumers were able to take the tariff increases its been unbelievable. Wait a minute the chinese werent paying for the tariffs . They paid for thats what confused me. They pay more to us but here in terms of the labor force we hear ceos come on time and time again saying i cant find people. How are you doing it or are you . Is that an issue i am doing it you got to find a way to hire people if you want to have a business find a way to hire people. I pay my people well our building Products Companies have great employees. Move beyond housing and talk about this other thing that really caught our eye. This idea of using social media as a vehicle for philanthropy, what youre doing in a big way yeah. Youre giving away 1 million. Im giving 1 million on twitter. Ive given away over 300,000 in the form of cash et cetera im trying to move philanthropy online. Theres billions of dollars. Why arent we using social media for good such hate on social media. Lets use social media for good, twitter, facebook, instagram, et cetera you said youve given away 300,000 how does this all work so basically what we do is we connect human beings to other human beings only social media platforms like twitter so, for instance, if youre a terminally ill cancer patient, for example, youre on twitter you can put out im a terminally ill cancer patient, you know, and i need help. And we can go and raise 7,000, 5,000, 600 this is lifetransformative money for the average american thats what this technology should be used for. Youre tweeting out things to people to engage them and thats how you find them to give them the money . They have to come to you and ask you. Tweet at me and mention me and theres a whole i call them teammates i have 920,000 people, i have 30,000 people following me a few months ago. Its a Huge Community of americans helping americans. And youre able to, because you have so many followers, able to check the voracity of their claims i say Everybody Needs to do their own research but people are smart, right i dont think very often youre going to see people faking theyre dying of cancer or out of a job and need 7,000 thats what this is designed to do people who need teeth. Scott, we had a veteran who lost his leg in overseas, we raised him i think 15,000 plus for a car online. 5, 10, 20 americans all coming in to help each other. This crowd sourcing using social media. Essentially. Good to see you. Good to see you. Bill pulte joining us urriight ahead were answeng yo questions and you have time to reach us. Go to be back sweek speaking of twitter, in two minutes. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Owning and running the biggesta Small Business is finding the right people. In hiring our first recruiter, we decided to post a job on linkedin. They had to have worked. At a recruiter firm and be bilingual. When we saw ana marias profile. She had a ton of experience in hr. The interview went really well. And she seemed like someone who could really sell mckenzie to perspective employees. We found the best person to find the best person for us. Post a job today at linkedin. Com grow were back bad day for twitter getting worse. Goldman sachs downgrading from buy to hold. They take the price tarkts down from 52 to 34. Twitters not at the low of the day. The low is 31. 10 as i look now, so were above that. But it was the miss on earnings then the bug in the ad, in their advertising system as well not helping that story out today. So thank you for that. Wanted to update that. Nicely done lets answer your questions now. First up, to joe from lug lucky in california. The gdx. Buy, sell. Hold absolutely. Buy. Bought it the other day. The gdx yep why basically look iing at the portfolio. It adds a defensive mechanism. Gives you diversity. Diversificatio diversification. Where the rate structure is now theres still the deflation nair element. I think its your answer i like it better than the glp. Pete from evan in tennessee bristol myers. What do you do . Big favorite by jimmy for a lot ofs, but i was in it, the calls spiked the ore other day off of what was tied into the biogen story so because of that, i dont think you buy it here. Get back down towards 52, 53, thats when a buy. Elroy in oregon wants to know about mastercard has unusual activity in that one yesterday. Its november 1st expiration not this week, not even next week, but right at the end of the next week. So shortterm trade but theyre buying 260s. I like that one. Stocks up 3 today. Wise chris in new jersey. You know chris no, but i give a shout uout to the other jetsons adobe its been beaten up hard recently is now a good time to buy . I bought it a little early. I dont know why this stock is up so aggressively today im short calls on the other side that looked great until today, but thats fine. Its protection. So yes, i would buy adobe here maybe when the spike isnt great, but expectations have been set low. Hot shot, do you have a favorite jetson . Astro astro all right sorry i asked. Is not george not jane his wife. Rosy, the maid. Been a while. The consumerer from daniel in south carolina, been in the xly. Love the upside. Do you think it makes sense to buy the slp. We increased our staples exposure in may. I would not be a buyer at this point. Our base case is that the consume r remains resilient. Interest rates move higher that would be more favor bable for a consumer discreche nair. Coming up, its a red hot semistock. Well do it in the call of the day and of course final trades im embarrassed to even say i felt like i was going to spend my whole adult life paying this off thanks to sofi, i can see the light at the end of the tunnel as of 12pm today, i am debt free we have no debt, we dont owe anybody anything, and its fantastic fidelity has zero commissions for online u. S. Equity trades and etfs, plus zero minimums to open a brokerage account. With value like this, there are zero reasons to invest anywhere else. Fidelity. 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. Lam research hitting a high today following a beat in raise. Citi raises the target on a stock 282 from 280 they reiterate that stock as its number one equipment pick. Is that your number one pick, too. It is 282 is too e low 302 is where sh it should be the demand is coming back. Equipment story. Texas instruments was one off. Applied material looks good today. Im stay iing with this. There it is big winner today final trades weiss. Look, another one beaten up that i bought. Today, down a little bit it continues to move higher. Buy fedex. Pete. Deep in the money call buying and blackstone today is interesting to watch theyre basically a surrogate for scott. For stock. I like what were seeing out there. I dont own it yet okay. Doc, i talk ed about kronos and again squeeze in the afterhours megan we like the Cloud Computers as i talked about earlier. We like the structural growth you see there. If you do get recession, not our best case, but we would expect the growth to slow from 2030 to maybe 10, 15 growth because companies have to invest there and joseph. Mks instruments, nksi, is rallying along with lam. Its got further to move thanks for being here and thanks for watching the exchange with kelly begins right now. Thank you scott heres whats ahead. Vice president pence wrapping up his china speech and while his tone towards china was a bit softer than last year, he was pretty tough on corporate america. Plus the busiest day of earnings bringing surprises, disappointments. Bold ceo statements and warning signs today. Well dig into that and why elizabeth warrens private equity reform push may not stop the corporate looting shes worried b about. But first, we begin with todays markets and dom chu has the state of play