We begin with the stocks on the rebound this hour led by of all things the banks. Financials flying on word of a big shot jumping in. And buying his own stock. Jp morgan chief jamie dimon with 500,000 shares on the open market. It is a 26 million move that has us asking, and jamie, we trust. Steve, should we . I think its a great move. A lot of his employees get paid in stock so it really shows that theyre safe because that can really, you know, disenfranchise a company and plemployees. But yes. You should. The valuations are dirt cheap. I was talking to somebody about this yesterday. Its in the banks and wells only 2 of their book is in energy loans. Citi is less. Jpmorgan with other exposure and far up in the cap structure and theyre compellingly cheap. European banks are not quite as clean but very clean and not worried about them going out. Thats good. Josh brown, banks good enough for jamie dimon, good enough for you . Great to see somebody express confidence in their own stock. Its one of the biggest ceo insider buys ever. Okay. One of the wealthiest in history. Clearly making a statement looking at the performance of the stocks jpmorgan before today down 7 and year to date, the stocks worst performing. Goldman down 30. Citi down 30. Keep going down the list and cross the pond with losses worse than that. Yeah. Two elements of this. Separating the two determines whether or not you want to be in the banks. First element is seeing european banks cut in half almost overnight thats a very frightening prospect and they think twice about buying and thinks very hard about maybe they want to lighten up. If you dont buy into that, the second question is are they going to make a lot of money in 2016. If were talking about negative rates in february, its not a great picture. So, you probably dont get much multiple expansion, might have negative Earnings Growth. You have negative revenue. Wheres the Profit Center going to be . A combination of those two things. Separate them out and you say, you know what in the names too cheap. I dont care if they make a lot of money this year. This is where you buy them and then good things could happen and youre a buyer and if youre a buyer you want to err on the side of caution and own jp morgan and wells fargo. Its a sign, jim, the worst is now over in terms of selling in the financials . Well, we can never tell in the short term whats going to happen but i think this is a great sign. Two things i want to point out about this. One, jamie dimon is a proven money maker in banking shares. Again, another group sandy wile and apostles who know how to make money in banking shares but we have certainly had worries in the european Banking Sector and no way he puts money a global bank unless he feels confident that the european banking iffiao doesnt affect the rest of the world. You can see the performance on the newses of, you know, deutsch bank with the bond tender. Rumored to be doing it. Now they confirm it. That stocks up 11 . You have bill dudley coming out a short timing a and saying its extremely premature. Negative rates. All of that kind of conversations is helping out and already decent market today. And the financials, steve, as well. And also oils helping quite a bit, the. No doubt about that. The banks are not going to earn what they used to be able to earn. We know that. Whats been discounting the price . Its been overly discounted, too much discounted. They have traded down with oil, as well. Because of loan books. I like them. Europes more troubled area and solid except italy and the next news is consolidation among the italian banks and another positive step and theres been rumors about that so far this year. Is there too much fear in the stock market right now . Lets ask tobias, citigroup chief u. S. Strategist. God to see you again. Nice to be here. Markets been trading on fear, maybe more than anything else. Justified . Too much fear . Too much fear. Sitting at a lower level than the First Quarter of 2009 staring down the abyss thinking entering a new depression so investors kind of taken on an extremely negative narrative and every piece of data negatively or if its good they say dont worry, next month it will be bad so there is a kind of context that is weighing down and their potential for negative feedback loops and ceos see the stock prices down and worry and cut back. We dont think that happens in a month or two but if it persists months and months then that kind of feedback loop could occur. You could see sort of what kind of fear and where investors were going and thinking by virtue of the move in the tenyear note yield. Over the last really 24 hours alone is a pretty good perspective. Down to 150, low 150s yesterday. Now youre back over 1. 7 . Its interesting when you talk about the idea of a disconnect of whats happening in the economy and then the stock market. Jon paul sen had comments yesterday echoing that. Lets listen and react on the other side. Its a disconnect between the performance in the stock market and the performance of many companies, particularly, you know, that we have invested in our portfolio. That the companies are actually doing very well and yet the stock prices are declining so thats kind of an imbalance and eventually that will sort itself out. Tobias, is he right . Look. I think so. Let me give you two examples. We look at hiring intentions. The nfib survey showing hiring intentions. Thats a oneyear lead indicator on the unemployment rate. Number two, if you look at things like the pmi manufacturing ism numbers, it broke below 50. Everybody says recession, recession. This is the 14th time breached below 50 since 1990. Im an old industrials analyst and i like the data. Only prior three times ended in recession and three beats ten in a new sport im not aware of. You say in a note it feels more like 2011, 2012 than 08. Yeah. Look. Again, we wrote a piece a couple weeks earlier listing 16 Different Reasons why it wasnt 2008. You were talking about the banks. The banks better capitalized today than 2007, 2008 timeframe and you could say lower leverage in an institution means it more valuable and valuation should be better. But nonetheless, you know, thats one of the reasons but there are 16 Different Reasons we play out. If you think about 2011, 2012, it was a mid cycle correction. People got nervous, fearful about the debt in europe, fearful about the u. S. Losing the aaa rating and this was going to turn into some kind of disaster. And its kind of hard to get there. On the data im looking at. Tobias, good to hear your point of view today. Take care. Thank you. What about this notion, jimmy, of what john paulson had to say . Its absolutely true. Absolutely true. The paradigm is a man walking a dog down a park path. The dog is walking all over the place side to side. Thats the stock market. The economy or in this case Company Fundamentals how theyre doing is the man walking just down the middle of the path. And thats what you have to remember. The stock prices gyrate all over the place and buying the right companies over time the share prices match up with the Company Fundamentals. So i would agree with that for the most part but i would count we are the fact that there are documented instances where youve had the stock market throw the real economy into a recession. 2000 most recent example. That was a stock Market Driven recession. And, of course, the most famous example, the excesses of the stock market in 1929 causing an economic crash so it it can happen. It just doesnt usually happen. And we can have a bear market for stocks thats cyclical. That happens, too. People need to i think have that context and not interpret every stock market slide as this is it. This is the big one. There are a lot of different examples of things that happen in between but i would not knee jerk discount the idea of that negative feedback loop, especially when the wealth effect is what the feds banking on. You have your eye on 1850, where we are on the s p. Seems reasonable to you . Its fair. Its fair value. 15 times. So whats the catalyst to drive it to excess value . To get to the 18 times . We dont have that right time. What josh is talking about is very true. Reflexivity. Its a negative feedback loop that feeds on itself. Take a look at why its happening. The normal tools that we use to see if the economys slowing giving us a head fake and thats a cds spread. We have talked about it in europe. Thats the 30year bond. Right . 30year and tenyear. Tenyear trading at 15. Recession levels. You think this is a head fake . I think yes. I dont think its recession. The fed does not hold on. The fed does not control Inflation Expectations in germany. The fed does not control debt dynamics in china. This is a Global Economy. There is no playbook for when you have this massive gravitational pull down in bonds and to steves point, youre looking at these things and not looking at them in a vacuum. Forces at work beyond the fed to influence with their jawboning and its just something that we have to get used to. Paulsons point to michelle is the stock market is reacting out of whack with the real state of the economy is and going to in his words sort itself out, ie, the stock market is poised for something once it realizes that the economy is not as bad as people want to believe it is. Not saying its amazing but not nearly as bad as people think. S p 500 with more than half of the revenues and profits from overseas. Many parts of the Global Economy in outright recession. Manufacturing here in the u. S. Is pretty much in a recession. I dont know if thats entirely true. You know, there is a factor at work that i dont think were talking about here. Distressed sellers. We are seeing it in some of the smaller cap names we own. On tuesday we walked in and a small cap name opened up down 9 on two thirds of the volume traded in the first 15 minutes. You know what that is . Thats a margin call happening. We dont know who that is and thats another distress seller. Lets wrap this. Finish your point. I want to take a break an come become and talk about oil. The margin seller is not working the order. Hitting the sell button and thats it. You can have the market going higher. Im not sure we have seen all the distress sellers yet. Traders holding out hope a Production Cut is coming. Plus, netflix downgraded today. The stocks already down 25 in the past month. We are going to debate the future of that company. As we head to break, a look at the s p factor heat map. Led higher by the financials. Youre watching cnbc, first in business worldwide. To thrive in an everchanging environment, Companies Must adapt. But one thing should remain constant a financial relationship with someone that understands and cares about your business. Pnc corporate and Institutional Banking offers strategies tailored to your companys needs. Know that our dedicated teams of local experts offer insight to help you achieve your business objectives. See how working with pnc can help your company grow at pnc. Com ideas welcome back to the halftime report. Shares of l brands turning negative now after being up by more than 2 as the Company Announcing the resignation of the victorias secret ceo. L brands ceo leading it in her place. The shares down more than 13 over the course of the past 12 months. And, yes, i know its hard to Pay Attention to what im saying seeing videos like that. The most important part of this discussion, vick tore whys secret represented 63 of the l brands. Impacting the stock. Back over to you. Dont sell yourself short, dom. Get that confidence up, my man. Up there. Crude is rebounding sharply today following reports that opec is ready to cooperate on cutting production. Our next guest sees more. You dont think we put in a bottom this week . 26 and change. Im sorry to say, no. Why not . There is just too much bearish news out there to come and there is nothing new yesterday that was said. This is overblown. There was a lot of momentum players in this market and, yes, this is your worst nightmare. Short covering. This is your worst a headline this, short of the market an youre going to puck your position. Thats what we are seeing here today. You dont believe my of the opec hype. No. What pushes opec to finally do something . I think if theres got to be more wreckage globally. We are starting to see it. Starting to see the dividend cuts and cut dbacks and the saudis arent satisfied with the level of pain inflicted to this point . In. Thats when youre saying, right . No. You havent seen nothing yet. Not accomplished yet. Theres no bankruptcy. Dividend cut ice the Oil Productions fall that we saw from last year has plateaued. Its 9. 2 Million Barrels for 5 months even with the plunging rig count and today it turns out the oklahoma folks underreporting to the tune of 100,000 barrels. Why wouldnt the refiners be a screaming buy . Theres two phases. Diesel glut and huge gasoline glut building. Differentials pretty hard. The winter grade now moved out is going to just be gibb away. I think in the next few weeks. Without a meaningful Production Cut, can you not call a bottom . Is that the definitive signal that, okay, thats it . Yes. Well, i think my target is 18. Because i think that is the level where pain should be sufficiently inflicted where you will see real Production Cuts and damage to the oil sector. 20 and 18 . 24 and 18. I think i know it sounds funny but the teenager handle, thats when you get the real attention. I think it also engenders pain in opec and producers. People saying you will see 50 bucks by mid year. The saudis respect going to let it trend up that high that quick. I agree with you. Then everything is wasteful in terms of what they have done. Thats right. A long move back up. Thats apparently it was International Petroleum week in london this week and thats the attitude, too, of the major ceos. Is deepwater drilling and Arctic Drilling done . Done with that story with it in easy to reach places and forget about that . The thing about that, jim, theres so plans already been made and but an opportunity cost. Youre done with it. Thats what the money thats actually whats kept the u. S. Production level at 9. 2 Million Barrels. Rigs are finally coming online. Is a good enough u. S. Economy enough to put a legitimate bid back in oil or is the global weakness elsewhere still driving the train . Its the global weakness. We need asia to come back. Even just some signs of life out of china, when they come become here from the lunar new year, theyll implode and probably deal with that on monday. After that, if they do aggressive action stimuluswise and point to hopelessness demand is still growing. Not enough, though. Its the production issue. Mostly production issue. Right. Mostly production issue. You can make a case its all production issue and cutting it to a certain level you will still have excess demand. Right . I think the slowing the slowing in the economy has cut those demand growth forecasts sufficiently that you need something on that side of the equation. Last point before we got to go. I havent seen anybody an you correct me if im wrong and miss it and i havent seen anyone refute what that statement was yesterday yet. About opec. Theres getting a hard look right now. It was translated, a tweet from the dow jones news wire reporter and to me its the same exact line the saudis using. Of course theyll cooperate, willing to cooperate, happy to cooperate and not cut production. Saudi is only thing that matters. They havent come out an killed it yet. The uae part of that contingent. Saudi arabia thats what im saying. They didnt say anything different than the saudis said and no new news in that statement other than a gulf producer. Other than saudi arabia. Some significance in that . We see crude turn a little bit lower than the best levels. Thank you. Thank you. Coming up, gold is having a best week since 2011. Miners are on a trade today. Did you miss the golden opportunity . Bottom fishing in bio tech. Looking for bargains with a Health Care Fund manager. Want to get their hands on. If they could ever catch you. Think of it as a seven seat for an action packed thriller. All right. Golds been on a tear lately as you know pulling back though today as stocks gain some ground. Jackie deangelis with the latest. Hey, jackie. Good afternoon to you, scott. Gold is taking a bit of a breather today as you mentioned. More risk on the tibl and still on track for the best week since 2011. Anthony, would you want the gold trade here . I would. The reason its rallying is the uncertainties in the equities market and expect it to continue. That provided a Good Opportunity for people that do want to get long to buy it on the dip right now. Brian, talk to me about the levels. Yeah, looking at levels, three things to keep an eye on. Dollar index below hundred is bold. Tenyear below. Love 1189, a true breakout for gold here. It struggled many july and back above the 1189 and staying above there, the bull target is on and bull target in the cards for gold. Thank you for that. Well be back on tuesday with the live show. Scott, have a good weekend. Likewise. Thank you so much. Coming up in the crosshairs, the maker of call of duty and world of war craft is plunging today. Whats going on with that activision . Defanged, last years big winners, this years losers. Look anotht those performances to date. Which ones to bet on in 2016, which ones would you buy right now . Well find out next. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Hello, everyone. Im sue herera. Saudi arabias foreign minister says the Islamic State will only be defeated if syrian president assad is removed from power. Speaking at a security conference in munich, he says that that goal will ultimately be achieved. Facebook losing a crucial legal battle in europe. A paris court ruled it can be sued in france over its decision to remove the account of a french user who posted a photo of a famous 19th century nude painting. The ruling could set a legal precedent in france where facebook has more than 30 million regular users. Ken langone throwing the money behind john kasich for president. It follows his previous candidate new Jersey Governor Chris Christie bowing out of the race. The ohio company that has produced or owned etch a sketch for decades sold the classic to a company in toronto. Ohio art is selling the classic and the spinoff doodle stretch for an undisclosed price. It bought the rights back in 1960 for 25,000. And i think almost every kid in america and around the world as has one. Thats the cnbc news update this hour. Back to you. Thanks. Give you a look at whats happening on the street at this hour. Dow and s p good for 1. 5 . That means the dow up 233 points. Nasdaq higher by more than 1 , as well. Bring in jonathan of Meridian Equity Partners live on the floor of New York Stock Exchange. Is this something to believe in or no . I dont know yet. As much as this shortterm rally we have is welcomed, i dont think theres enough news throughout to support it. This market was looking for an excuse to rally higher. We got opec news late in the day yesterday. We did get a little rally out of that. Oil rally, market really. Slight selloff at the enof the day and today clearly the market hanging everything on that one headline. Not a ton of Economic Data next week. Earnings season is slowly winding down and seems like the market right now only going to follow oil and continue to see this same pattern thats there and whats whats somewhat concerning for me. We need to get away from that. Are you giving enough credit, though, to the move in the financials today . What if you can get some stability . What if, you know, literally the statement to make at the beginning of the program today that the move by jamie dimon to buy his own stock in the open market, one of the biggest insider buys ever by a bank ceo sort of helps to stem the bleeding there and something to build on and helps the overall market given how big and important the financials are . Yeah. What a power move that is and a great headline and a message that goes out there. Put your money where your mouth is and he clearly is standing behind that and sends a message across the board. That whole sector beating down pretty good and some point someone has to step in and say this is my mark. Im drawing a line in the sandment its from an insider like jamie and see others follow behind that. What about an insider like dudley saying enough of this negative rate conversation . Its extremely early to be talking about that. Its not on my plate. That guys gotta chur. When he talks people listen. Absolutely. The way the market reacted to the comments of new york an washington we see the way the markets fluctuated with it. The Interest Rate talk is constantly there. We have comments next week. I think we continue to see it punted down the road at this point. China back online, too. See you soon. Have a great weekend. Likewise. Meantime, netflix downgrade, the price target cut at fbr concerned about slowing u. S. Subscriber growth and International Execution risks. Josh brown, you sold it last month. Yeah. I reckon you could use that kind of language that they used in the note six months ago, 12 months ago if you wanted to. What about the downgrade now . Yeah. Well, this is the hardest hit of the fang names. Its been absolutely slaughtered. I dont think people realize netflix has been in a 40 draw down between december and february. Thats four times worse than the overall market. Im not sure you can just point to Market Conditions and say, oh, its oversold. Theres obviously something fundamental changed here and sellers stepping up and coming out of the name so, you know, this is the kind of stock thats so oversold it could rally 17 and still be below its 200 day. I think if it continues to bounce, thats probably why it has a lot of trouble. A lot of overhead resistance so if you want to play it for something that tight, and youre very nimble trader gorks ahead. Thats what hit it. Fundamentals in the u. S. Fully subscribed to the u. S. Not so much rick in terms of people i spoke to who sold it. In terms of the europe, theyd like that part of it. But its the u. S. So its double whammy. Sold the leadership and sold where the fundamentals move. One thing to point out is the full house reboot is later this month and could be a positive catalyst at least for my heart. Okay. Lets bring in the u. S. Media analyst anthony with a buy rating still on netflix. Anthony, welcome back. Good to see you. Not wavering on that buy at all . You believe in what netflix can be . Yeah. I dont disagree with anything you said. My view the s that the company has global leverage in media. That will have a real scale benefit for when they negotiate for content so i do think theres technical issues with hedge funds blowing up, big top five positions in netflix causing technical selling but i think the history of media looks kindly on netflix and volatility because the valuation and think about the long term. The implied valuation of the u. S. Business is getting to a reasonable multiple. It is when you look at earnings multiples on the bloomberg screen, theyre high. You have to really believe in which we do. There are some who believe pardon me for interrupting you looking at the other fangs you could make an extraordinarily credible fundamental case for any of them. But some say, well, look. Theres still valuations still too high and need to come in despite the belief in the underlying business here. See, what i like to focus on is what are estimates doing . With these high flier names it is hard to predict where the target numultiples will go. Look. Im shot. Tired. Looking at models and earnings reports and internet and media for two weeks and havent seen my family. What theme i try to take away from these is where are my models estimates up, keeping them the same and where are estimates being cut . I have to say that the names where estimates came up the most were Facebook First and foremost and then alphabet. Netflix broadly stable and the names where you look at the growth rate this iss really an unimpeachable thing. We can argue but netflix, fastest since 2012. Similarly look at facebook and that growth rate of 60 is just astounding. And, you know, i look at my estimates for 2016. They came up by a lot. We think that the amount of ad revenue facebook will grow this year is double all of twitters ad revenue by way of hyperbole. Thats what i like to look at. Names came down. They tend to be in the internet world smul and mid cap names. What you are seeing in internet is simple. Its the big or getting bigger and more powerful and looking at facebook, google and amazon, they control more than trillion dollars market value, thats too much of an advantage. Theyre too powerful and when you see a Business Model and people in the smaller and mid size space, whether it be in advertising, ecommerce, music, media, theyre having a hard time competing and i dont see that changing so, you know, we continue to like facebook and google, alphabet first and foremost and by the way, you know, we are following media here and im sure thats something youre focused on, the. Sure. The large cap media guys under that analysis disney, time warner and cbs all those models estimates stayed the same or wept up so this vicious selloff of this week its all multiple and you are getting to a level in some of those names where 10, 11 times earnings, thiss the territory where value managers need to start sharpening the pencils. I got to go. Do you cover disney . Yes, i do. So youre at odds with the naysayers out there . My view on valuation disney is concerns around espn are priced in. Theyre known. Nothing changed this week around that. We actually did an exercise where if you value espn at five times which i think is a draconian, you know, floor type valuation, you still get to 100 on disney. So its time to kind of bring out the shopping list, look at Quality Companies with stable governance, reasonable valuation that is have enduring tranchfras and there in digit also were staying constructive on disney. Id also like to point out that cbs is getting to kind of really attractive levels. I have to run. Appreciate it very much. Down to the New York Stock Exchange now. Bob pisani with a news alert. This is the producer of aggregates in the u. S. , vulcan materials, doubled the dividend 10 to 20 cents reflecting increasing confidence in the business. Small dividend payer. About 0. 8 . Somewhere around there. They have doubled that right to that area right now. So this is interesting because we are seeing announcements of dividend increases, announcements of more buybacks, announcements of more insider buying. You were talking about jamie dimon story and an indication that companies are finding ways to return cash to shareholders or at least buy into the company a bit more. Vulcan just reopened here up 1. . Scott back to you. Bob, thank you so much. How about this, guys . We really are starting to see the once earnings season getting into the latter stages and companies are freed up do this, starting to see it. Is it enough to be meaningful for the stock market right now . What would be more meaningful is buybacks. Record pace last year, year before and now met with issuance of banks in europe and elsewhere and dividends are great. You know, their Business Model is aggregates, stuff goes into the roads and thats why theyre doing well. You have seen dividend increases an its thats positive. Not enough, though. I think its still about guidance. Dividend increases are nice. You need to look at gm which trades with a 5 plus dividend to know that dividends arent the whole story. It is the guidance Going Forward that every stock is hanging on. Has the perception of companies doing dividends, buybacks, changed in that maybe now just given the environment that we may be heading into or already in youd like to see Companies Use that money to further invest in the business, wlits Human Capital or elsewhere, rather than do a buyback or raise a dividend . I think that investors are disgusted when they look at 14 trillion wiped out and think about how much money may have been thrown after buybacks not coming back and i think some extent you are seeing a tapering of positive sentiment around buybacks for the sake of buybacks. But what are the opportunities for companies, for example, like apple with 200 billion in cash . How could they possibly spend a meaningful amount on r d and not waste . We have capx bubbles, too. Think about 1997 to thousand and fiber that no one needed. I dont know if theres a right answer or wrong answer or if we could say theyre good or bad. I think we can all agree probably excessive. Especially when you look at the energy sector. All right. Coming up, visa goes mobile. Pandora under pressure. The stories and the trades ahead. Portfolio checkup, health care stocks, second worst sector so that are this year. Bio tech in a bear market. Is it time to finally jump in . Well debate it. Coming up at the top of the hour, oil is soaring right now. Well discuss whether or not you should believe the rally. Stocks are up sharply, too. Is that panic selling finally coming to an end . Tell come and utilities, this ire still the konl two s p sectors higher this year. But theres one other sector to feel bullish about, the only sector up this week. Well tell you what it is. Power lunch at the top of the hour. More halftime right after this break. Welcome back. Check out whats happening with shares of intercept pharmaceuticals, spiking on a reuters report citing sources that says the companys possibly exploring a sale and has received interest from other companies. Intercept is one of the Bio Tech Companies with about a 2 billion market cap. Now, the report says that intercept has been working with Investment Bankers on a possible sale cautioning there was no real certainty whether or not the company would proceed with a transaction. Still, though, interesting, very sharp move higher. Scott, even with, though, todays gains the still down 26 year to date and 45 down 45 over the past 12 months, scott. Speaks of the carnage in the space. Thank you. Health care is one of the worst performing sectors this year. Bio techs down nearly 40 from the recent highs. Joining us now is john shroero at alaons. Perfect example of dom telling us about the destruction taking place in the sector. What do you do with it . Buy it now or run away from it . Well, i dont think you should be a seller of the bio tech sector right now. We have had so much carnage in the sector that you described. It started in september when the rhetoric of the upcoming recollection hillary tweet. Hillary tweet. Everybody cite it is hillary tweet as the Tipping Point for this space. I think the feerls from the election driving the spice of the sector down really is not something that once we out who election, i think regardless there is very little that the government is going to do to control pricing. So thats a good thing. What percentage of the pullback do you think is literally simply due to political rhetoric . Probably 20 . So the rest being macro, Market Driven, also down about 10. So but i think regardless of who wins, we will see very little from the federal government, so that is a positive. However, it is important to remember that the care for high prices is high prices. So the private sector has been doing what we fear the government will do and theyre doing that already. We have seen regeneron in the fourth quarter, they posted a 7 million number. Thats just so unheard of for a poor performance for the drug and it is a wonderful drug. So what is happening is the pbms are gearing up to control the launch through very restrictive form larry access. What were seeing is happening why the private sector. Thats something we as investors can analyze. What is the most recent stock youve bought in the pullback . Pfizer. So the last time i was on the show i highlighted pfizer, United Health care, alexeon and vertex. I would be an advocate for alexeon today. They have a highly protected portfolio. You havent bought anything since the last time you were on . Added to pfizer and johnson johnson. You added to those . Yes. I got you. Those arent biotech at all. In the biotech space, youre just staying with what you have, not finding any values here . Josh and i were talking some small cap down over 70 , some large cap down 40 . I mean, it is crazy. Imx got crushed with data. We think in an inverse kind of relationship youve seen these shares sold down so much through the fear of investors that the risk inherent in the paper is much less than a year ago. Names im starting to do looking at adding to would be those biotech names we discussed, such as alexeon, vertex, valuations are attractive, innovation is very promising for these companies and they have protected let me give you the contrarian take. The ibb which is obviously largely driven by the biotech large caps, but it is fairly broad, is at 75 in 2011 before the onset of the qe programs. It goes to 400 within three years, which is utterly unheard of outside of the dotcom bubble 15 years ago. And now that risk appetites are being curbed, the fed ended its qe program in october of 2014. Now youre seeing some of that excess from an extraordinary run come out of these valuations and with the exception of the top ten big names, none of the rest of them are really all that cheap when it comes to price to Earnings Growth ratio if, in fact, there will be pressure on pricing. What do you say to that argument, that it is the unwind of a bubble more than a foumt fundamental change . I hear what youre saying. Ibb had a strong move and the ibi. I would point to the earnings from 2010 to today. The Earnings Growth from all of those components are just fantastic. And so if you look at the earnings valuation where we were when you said the ibb at the start of this, were actually significantly below that today. So the Earnings Growth has outpaced the Capital Appreciation of these names by a far amount. And continue to do that. Absolutely. Much more accommodating fda, youve got mna there is a lot more that is positive now than was back then. Yes. So i dont believe that the phenomenon of qe and cheaper money and lower rates was responsible for this. It was much the innovation and secular innovation and launch of new products. John, thanks. Thank you very much for having me. The major averages now give you a look before we head to a quick break. There it is on wall street, dow is up 244. Big gains across the board. Your final trades ahead of the long weekend up next. Want to get their hands on. If they could ever catch you. Wont keep you up at night. N know you have insights from professional investment strategists to help set your mind at ease. Know that planning for retirement can be the least of your worries. With the guidance of a pnc investments financial advisor, know you can get help staying on track for the future youve always wanted. Try align for a nonstop,ive sweettreatgoodness holdontoyourtiara, kindofday. Live 24 7 with 24 7 digestive support. Try align, the undisputed 1 ge recommended probiotic. 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Okay. Liesman is very happy, by the way. Always happy. Want to know why hes happy . Oh, boy. Oh, no, come on. No. It is because it is your 30th birthday on monday. Again. Again, all over again, but again. You delivered it last year too. I do because ive become the designated cake guy. The cake boss. Liesman wants me to throw it in your face now, but i know he does. But, scottie, from all of us here at cnbc, happy birthday. Dom, thank you very much. Many happy returns. I dont know what is on top of that. I dont know. But i want a slice of that. We were thinking about having steve wise jump out of the cake. His ego couldnt fit inside there. Seven layer . Only four layers. Couple minutes to go. Do you fade this rally . Do you think it will fade because people dont want to be too long going into the Holiday Weekend or have some staying power . Faded. Faded. Dont sell the stocks that if you traded it, fade it. If you bought stuff that is really beaten up, stay with it. You shouldnt be in complete cash, but if im trading, and i bought some stuff this morning, i have it already. Stick with it. I dont know if were going to end up on the highs by the end of the day, but i know that all of these prices that people are buying stocks at, and we have been buying stocks at, doesnt matter if it is a disney or growth stock or value stock like a cisco, these are great prices that youre getting these shares at. Josh brown . You dont have to fade it, but it is probably going to fade itself. Thats the history of these things. Nothing has fundamentally changed. Were bouncing because there is positive divergences in the internals. Less stocks making new lows than making new highs. First time in a while. You had some momentum divergences. And it was just natural. Nothing goes down in a straight line. Until further notice, this market is guilty until proven innocent. You havent cured any of the issues. Oil has gone up, maybe one day im with john there when he came on before, fundamental issues are still there, and until they are resolved, even a little bit, until china devalues this market is not going up. Earnings next week, deere, vf corp. , nordstrom, walmart. You start to get the retailers and much like last quarter, this should be a have and have not quarter. Some who are going to perform the most interesting on that list is nordstrom, terrible quarter last time. Well see if they pull it around. They are a luxury retailer. Josh . Deere . I actually am long deere. Not expecting much. Here is what is cool about deere, it goes up on bad earnings. People are over the cycle. That does it for us. Enjoy the weekend. Power begins now. Hey, everybody. Happy friday and welcome to power lunch. I am Brian Sullivan with Michelle Carusocabrera and melissa lee and tyler mathisen. Happy friday it is. We have a major rally going on right now. Let us start with oil. Crude oil is up. In fact, having one of its biggest days in a number of years. The only downside is that were having a big pop, but still under 30 bucks a barrel. Brent crude similar story. And as oil heads higher, so too do stocks. Were trying to get out of a sixday losing streak for the overall market. And unless something turns around, guys, next three hours, we should get it,