Spp a s p. Are the brexit fears behind us, we ask . Lavin th lebenthal what do you say . Be frank. As summer goes on more headlines, more scares of other countries leaving the european union. The uncertainty the market hates. Taking down a Major Institution like the eu. Were in the clear for now, but i do think this is going to be a choppy summer. Having said that, range bound between 1900 and 2100 for the foreseeable future on the s p 500. Easy to be enthralled by the green arrows. Bond market, tenyear treasury yield pinned to 1. 46 . Not seeing commensurate move in the safe havens of bonds and stocks . Markets gone nowhere 18 months. Look where we are now and the fact theres the fact that got us there versus before june 23rd. You have to come to the conclusion the Global Economy is worse off. That the circumstances are worse off, and that monetary stimulus, which had gotten us to where we are, which is flat, is ineffective in terms of how much more it can contribute, and if they go more to negative rates, thats actually disaster, because it just breeds deflation, and we dont need deflation. We need inflation. So as i look at markets, im in the risk off mode. Trying to pare back, sure, trading opportunities, take advantage of them, otherwise cant make any money. Looking for a low return vibrant. By that i mean 4 to 6 in equities before june 23rd. Where am i now . I think, i dont know if youre in a bear market but close to recession. You believe the message the bond market is sending to us now. What do you believe . The shock and awe for friday, obviously. Saw a dramatic move to the down side. Spike in the vix and come in monday, see volatility index up again here it is pushing towards 27. Midday started coming back in. Monday, despite the fact we were down 300plus points on the dow, start seeing volatility index pressured lower and lower. People doing what they should be. Take advantage of the spike. Low a long period of time. Low to midteens. Slid a big spike, gives a great opportunity to sell some of that premium, sell some of that protection. Thats exactly what people were doing. Look at whats reacting, mel, look at the areas. How about the way biotechs traded yesterday and today, extremely strong, sure. Oil correlation continues to be part of this marketplace. When were going down, yes, those oil names go to the down side. Start to move up, oils obviously moving up again. You start to see xle talking just before they handed it off to us, moving to the up side along with material. When i look at markets now i see a market that now with volatility under 17, i think its time to start looking at protecting once again, because i dont think the shock and awe is over with but we had the initial shock and awe that might consistently go through the next couple months. Takeaway to trade higher but winch a range. I still thing the range, tighting up jims range big time. Closer to 1975 to 2100. I think you can actually push to the down side. I dont want to touch saw the other day. By the way 1900. Well not right now. As we move through the year, i think the risk, pick up dramatically. You clearly have a more negative view on the economy, though, than i do. Right. What are you doing today . Yesterday i loaded up on the gdxj. Junior miners, up 4 . Big as the market move, despite people saying risk on, well, junior miners, a 4 hop, mel, because of the unusual activity that led us in there. This ones still moving up. I think this really shows zero Interest Rate or zerp really has driven a lot of folks to basically have to, puts a gun to their head, makes them pull the trigger even if they dont feel like it. Around the desk, most of us, selloff on friday and monday saying, well, you know, you still need to feel a little more before you feel comfortable saying, yeah, this is a substantial drop. Most of the stocks were following 2 and 3 drops. There were exceptions, like barclays and some of these. The ones i nibbled on, but i did not see the flush that i thought we would see, and thats because there was so much money on the sidelines, that came racing in, ev ev even only a minor dip in the stocks. The seek for yield is so strong, nowhere else to go. A forced move within stocks, within a range. Headlines from you guys. Take a look, though. Look at the european banks, or the past couple sessions. Theyve done almost nothing. Deutsche bank, lloyds, robisbs, Credit Suisse, down. Absolutely getting crushed and to a certainly extent a canary in the coal mine saying what expectations are for the european economy. I dont think anybody expects a robust european economy. The question, whats going on with the u. S. Economy . If the Global Economy is going to power through whats going on in europe it has to come from the u. S. Now, unfortunately, this week were really light on data. On friday get the ism survey and next friday the jobs report. Unfortunately, both for june and not really going to show the effect for brexit, but the problem for us is we dont have a real feel for where the u. S. Economy is post brexit. Can i give you the road map . Over the next few weeks were going to get earnings. Enteri ining send quarter earni. With the dollar, its down, ceos coming out saying we got to adjust for dollar. Then what happened in europe before the brexit vote that ceos pulled back on cap backs. Already had issues with a lack of Capital Spending from corporations. Thats going to get worse in front of the election. So thats the road map. Now, in between, i think you will get fiscal stimulus from europe, and thats very, very important, because that will actually help as opposed to monetary the euro to your point, steve, i see the opposite of what stephen sees, because i dont see that dollar going anywhere ear. Euro still 111. Where was it before the vote . Where was it a year ago . I dont see that strength hurting u. S. Companies selling 60 overseas. Not a head wind . No. Okay. Those that want to pull that will find themselves hit. The yuan is coming down. Best thing for china, off the front pages while brexit is happening, but devaluing and lowering range. Thats going to keep happening and will hurt. Talk about earnings and hone in on nike. Higher at this hour after beating on earnings. Concerns of future orders weighs on shares early and especially in outdoor session saw nike down by 6. 5 . Dr. J, bought the stock last night . Yep, and in the after hours, watching your show, with guy and pete, credit to both of them for also saying that. I talked about it during the show yesterday, mel. The halftime, i said calls aggressively bought. Bought those. A one by two put spread meaning short puts to the down side. Not happy trading at 49 last night, mel. Thats nike, of course, but then as it came off of that, started buying as soon as it got to basically 50 again, i started buying. Flipped out on my stock. Still short those puts. I still have about 50 calls left out of all of the calls i bought, but i like the report. I dont think nike is going to screw up. I think this is stock that you buy and hold on a dip like that. The question we have here looking at nikes earnings, is this going to be a bellwether for earnings season . Probably one of best brands out there. A multinational company. In anyboif anybody is facing he winds it would theoretically be nike. What do you think . I dont think its a bellwether because i think it outperforms all the time. Look at what went on with china. I watched the show you did last night and know you talked about it, but there was serious growth in there, china future orders. Indicative of me what they can do even though the yuan is declining. I think what you do have to worry about with nike is if you have a choppy market going into the summer with nor eu concerns, more breshgs itlike concerns, i think you will get another opportunity to buy nike down at 50. Id love to own the stock but will wait for it at 50. The readthrough . Park der a great job on the conference call. Too many people sold when they saw the news headline come out and saw revenues slightly, just a little bit like the beat on earnings by a penny and suddenly everybody sells it off jons point at 49. I had calls also. Jon said, saw unusual activity. The flat part of the north America Thing surprised me most. Growth where they wanted it. In emerging markets. Look at japan, china, growth in western europe, Everything Else, all impressive. Talked inventory levels as well. Felt more comfortable, something we talked about last night. Inventories higher but inline exactly what projected them to be. It wasnt as negative and thats why i think it started coming back in the posthours last night and then all of a sudden today we see what we see. Nike is fine. One of those brands that has a moat around it, defendable position on internet because they can control pricing, and they have. Put a floor on discounts and parker recognized their Digital Strategy isnt what it should be and theyll work on that. I think nike is okay. Not a cheap stock. Never is. A good brand. Worried about national support. A different perspective in july. Hear a different message and this is not a bellwether stock to your point, got to go to break. Cominging up on the Halftime Report. Announcer still ahead and under the radar, brexit trade in retail. Why one analyst says t. J. Maxx is about to be a big winner. Plus, the little egg sandwich that could. The mcmuffin turns 45 today. And its been crucial to the mcdonalds growth story. Well debate, whether middle aged mcmuffins can keep driving the stock. And stressed out. The banks get their stress test results this afternoon. Well tell you how to trade it, all coming up on the Halftime Report. Sup jj, working hard . Working 24 7 on mobile trader, rated 1 trading app on the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of other competitors do on desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivatives pricing model, honey . Td ameritrade. Real is touching a ray. Amazing is moving like one. Real is making new friends. Amazing is getting this close. Real is an animal rescue. Amazing is over twentyseven thousand of them. There is only one place where real and amazing live. Seaworld. Real. Amazing welcome back to the Halftime Report. Look at the s p 500 sector heat map standing 2066 on the epx. Utilities seeing the most pressure if you call it that, barely in the red. Energy, health care financials leading the charge here on the spx. Focus on retail. Tjx reiterated outperform keeping its 85 price target saying the brexit decision could actually provide an opportunity here. John morris, analyst behind that call and joins us live from new york for our call of the day. Great to you have. Good to be here. You point out in your note the uk business is approximately 8 to 10 of your sales mix. Whats the worst Case Scenario you plug in in terms of Economic Outlook there . The worst case would really be if we not only have a brief downturn but it turns into an elongated kind of a downturn and you fall into a kind of deep, prolonged recession that might spill in across, you know, europe, but, you know, quite frankly, im not sure were quite there at this point and youve got to keep in mind the uk is only 8 to 10 of tjxs business. This is a company that tends to benefit because of the offprice nature of the selling. Can benefit from the trading down of the consumer, if you will, to pick up some share. We hear that all the time when it comes to tjx and so far its working. Whats the Tipping Point . At what point its not a trade down but a trade down from the trade down and thats not buying . Well, i think youve got a long ways to go before you get to that or a hypothetical on a hypothetical, because what youre looking at it the 800pound gorilla in what is a space with a handful of players in a growing retail niche, and when youve got the secular downturn of Department Stores i think, we think, will continue to go upon and on and on, the Department Stores pain is really the offpricers gain. So many positive tailwinds, not only the fact that tjx executes well, has a strong Balance Sheet and management, it would tak really almost an unimaginable disaster scenario to thwart it. A great name to know in a period of uncertainty at volatility. Jim lebenthal. What you said about the Department Stores pain being tjs and off offprice discounters gain, why wouldnt that be amazon and other online retailers gain . That certainly has been the trade for the last at least two years, is, you know, anything that has a bricks and mortar content has been getting owned by amazon. Whats your feeling on that . You know, two aspects to this. I think amazon and a lot of the econ players will continue to pick up share, but theres a lot of share to be picked up. Right . From everybody. Broadline, Department Stores, some specialty, outlet. You know . On and on and on. When looking at the ecom or amazons of the world and the offprice companies, off price is a different shopping experience. You know . There you really, the customer he or she wants to go to the store, find the treasure hunt. Sorry to interrupt. We have to go to president obama. Taped playback from a meeting with mexicans in the canadians presence. Let me just publicly extend my deepest condolences to the people of turkey for the terrible attack that took place in istanbul. I had a chance to speak to president erdogan earlier today, to discuss with him not only how heart broken we have been by the images of the injured and those killed, but also to reaffirm our strong commitment to partner with turkey, with nato, with the broadbased alliance that we have structured around the world to fight isil. Its an indication of ground unable to govern the areas that theyve taken over, that they are going to be defeated in syria. Theyre going to be defeated in iraq. That have an impact on the entire civilized world. And i know that that view is shared by mexico. Its shared by canada. Its shared by all of the people of this hemisphere and its shared in every region of the world. So we stand with the people of turkey, and we intend to do whats necessary to make sure that these kinds of terrible events are not happening. Now, on a happier note, the cooperation thats been taking place between the United States and mexico across a whole range of issues has been outstanding. We had the opportunity to discuss the continuing strength of our Business Commercial trade, politics, our business, and weve been listening to president obama. Taped playback of a meeting hes had with the mexican president as you saw there in ottawa. This is a trade meeting but he did make comments about the airport blasts in turkey last night. Were going to take a break here with the markets at session highs now. Lots more halftime right after this. I want to get to brussels, the first minister Nicola Sturgeon is speaking with eu officials. Wilfr wilfred . Reporter melissa, thanks. Scotland overwhelmingly voted to remain in the eu referendum, the rest of the United Kingdom voted leave. Nicola sturgeon, a party traveling to brufrls to see if she can extricate herself from a potential brexit saying that the response from eu leaders has been very sympathetic to scotlands situation, but perhaps the key part of her comments was this ive not been here today to reach any conclusions or to press anybody for any decisions or any commitments. Ive been here today to make sure that scotlands voice is being heard and that scotlands position is understood, and im confident that that is the case. Reporter and its interesting she said that, because earlier comments from other european leaders to put cold water on the idea that she could extricate scotland from a brexit. The Prime Minister of spain saying its clear scotland does not have competence to negotiate with the eu. I am extremely against it. For now, it appears scotland is beholden to the decision of the wider United Kingdom, unless it is have another referendum for its own membership of the United Kingdom and that does not look likely anytime soon, that jpmorgan said it is theyre base case but not until 2019. Thank you, in brussels for us. Trader blidtz, four stocks making news. Removing ge capital systemically important, designation. Pete, you liked the stock a long time . Owned it quite away. Back to the financial crisis when it sold off. Started selling off assets. One of the reasons this designation has come off them. I think gives them room to the upside. Maybe we do see 32 again. Trading 32 a share. Done the right thing getting themselves out of that world or most of that world with the ge portion of it from a financial aspect. I think this stock goes higher. Biogen and a rating and the firm a 282 price target. Steve . Very nice target. Bio tech, pete mentioned before, having a nice run yesterday and today. Highly volatile. To me one of the sectors that isnt affected by currency or trade. I like it. I Like Health Care overall. Affected by the elections . I think this will be back burner, actually. Not one of the top. Okay. Monsanto, higher following comments following comments from eu antitrust officials saying they plan to review the offer to buy the company and reporting earnings miss today. Jim . It was an earnings miss, but stock up almost 2 . The stock will only trade on takeover news now. News they are possibly talking to our suitors besides bayer, why it has a little bid today. All takeover what moves the stock from here. All right. Southwestern energy announcing a 75 million share secondary offering. Dr. J . Wow. Stocks up 84 year to date, mel. Having a dip today. 6 . Probably because upped from 75 million shares. Grab it up apple 4 . Coming up, the mcmuffin celebrates its birthday. Pushing mcdonalds stock higher. My guest debate whether or not its a good stock for your portfol portfolio. Stay tuned. Romantic moments can happen spontaneously, so why pause to take a pill . Or stop to find a bathroom . Cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use. Many men arent aware their Health Insurance may cover cialis. Contact your health plan for the latest information. Welcome back to the Halftime Report. Sue herera . Whats happening this hour russian president Vladimir Putin made a telephone call to turkeys leader to express coal donne condolences. He wants to start a process of improving relations with that country. Hosting a cancer summit in washington, Vice President joe biden threatened to pull federal funding for cancer studies that fail to publicly disclose their results, putting pressure on researchers to speed up cancer cures. When i began this, putting together resources to break down silos, seize the moment and double rate of progress. But im also commitmented to doing everything in my power to change the culture that often stifles that project. Quite frankly we have to change the culture. Firefighters in Central California contained most of the erskine wildfire ranked as the biggest and deadliest of several blazes across the state. A major highway reopened and more evacuees allowed to return home. Beginning today, walmart is offering a free 30day trial on twoday unlimited shipping service and an extra month free for paying members. On friday offering discounts on an array of products as it continues to take on amazon and its amazon prime service. Thats the news update at this hour. Back to you, melissa. Sue herera, thank you. Happy birthday to the egg mcmuffin. The popular breakfast sandwich turns 45. Susan lee joins us with a look what the iconic sandwich meant for mcdonalds during a turnaround plan. Hey, looking for outperformance, mcdonalds is where you want to look. The stock made money for investors so far in 2016, beating the benchmarks. Whats fueling the stocks recovery . Sandwich, invented 45 years ago. Yes, the egg mcmuffin created by a california franchisee, herb peterson, in 1971. Inspired by an eggs benedict and is now the backbone behind allday breakfasts fueling mcdonalds recovery. Frankly, the fact theyre advertising the allday breakfast behind the egg mcmuffin is doing business for the morning and day part as well. Their whole breakfast business has gotten a real kick from this advertising. So its been a big push for the golden arches since allday breakfast launched last september. Global sales jumped 5 , and First Quarter sales coming in at their highest in four years. The past weeks, nomora citing declining sales and lowering estimates, still, looks pretty good. Dont you think . Looks pretty good. Looks delicious what are you talking about . Susan lee with the egg mcmuffins 35th birthday. And mex add key date here. Mentioned a key date. October of last year. What happens when we come up upon tough comps . Anniversary, the issue, in allday breakfast. I believe more not that new, about a year or so new ceos sleeve than just allday breakfasts. This is another one of the stocks that is going to be in a trading range and you dont sell it. Hold on. I cant buy it. Rather wait for a correction and hope those analysts are right and give you an opportunity to get in. Same camp as him. I am. Hats off to management here. Whether allday breakfasts, the mcpick 5, whatever it is, great initiatives to get samestore sales growth. Having said that, where do you get the growth to justify a 20 times multiple . Not from Opening New Stores and only so many gimmicks like allday breakfast. A great company. Just dont like the stock. A Pete Najarian effort, two favorite stocks today so far. Tjx. Lunch it. And mcy des. Pose this to you, uk exposure, one of the highest exposures to uk and europe. Not sure it will hurt them, frankly. Its the lower end. Talking fast casual. I dont know necessarily thats going to hurt. What i like about what east brookes done and why i believe in this stock not as a hold but room to the upside after the correction. Trading almost 132. Now here at 119. When easterbrook came in, allday breakfast, wants to simp pl laphy the menu, all stuck in a clog, otherwise, what mcdonalds was. I think all the different implementations of Different Things actually feed this stock to go higher and get that multiple lower. You raise a good point. Give it to you on this. One thing to improve upon, relationship between franchisees and corporate headquarters. Definitely an area to improve upon. Sure. By the way, what if they just implement more technology . Think of the cost savings dominoes got off that. And the a lot of folks that like the kiosk smell instead of somebody key in their burger by touching a burger thing on the screen. A lot of folks orders obviously from the kiosks as wells from their phones and other devices. I like the stock here. With your brother. Im with him. A technology company, hey . Could be. Real estate tech play. You saw the rise in dominoes, right . In terms of efficiency. Just saying. Coming up, appetite for treasury fades as brexit fears abate. And what you might be missing today our experts are watching. Thats all ahead on the Halftime Report. Announcer the Halftime Report with scott wapner the the place for marketmoving interviews. You dont call a company a sewer because the company made a mistake. Announcer real money. Short tesla and announcer real debates. People think globalization hurt businesses. It is not. It is technology thats hurt businesses. Competition is a good thing. I dont want to go back to a single marketplace. Announcer the most profitable hour of the trading day. I love this show. All i get to do tweet about the show. Im on the show. The greatest moment of my life announcer the Halftime Report. Weekdays at noon eastern. Youve wished upon it all year, and now its finally here. The mercedesbenz summer event is back, with incredible offers on the mercedesbenz youve always longed for. But hurry, these shooting stars fly by fast. Lease the gle350 for 579 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. This man creates software, to protect this customer, who lives here and flies to hong kong, to visit this company that makes smart phones, used by this Vice President , this little kid, oops, and this obstetrician, who works across the street from this man, who creates software. They all have insurance crafted personally for them. Not just coverage, craftsmanship. Not just insured. Chubb insured. Coming up at the top of the hour, sectors you should watch right now. New bank stress results out today. The bank stocks you could bank on right now, and an exclusive with microsofts ceo, live on power. All that and much more ahead. Melissa, back to you. Thank you, seema mody. Treasuries around the world on the move. At the nymex with futures traders. Hey, good afternoon. We are seeing a little selling in bonds today. You and i talked offcamera. Doesnt appear to be as bad as you expect giving the fact equities are up. Right. Actually, jackie, 250 points in the equitys higher, i would have thought youd see a lot more liquidation of bond futures. Thats not happening now telling me a lot of traders, bond holders, feel that the brexit fallout isnt ended yet, that theres a lot of uncertainty in the market. Theyll hold those positions, wait for the other shoe to drop and profit in yields head lower again. Jim, where do you see yields going . I think theyre going down to 1 now. I base it on the fact italys trading at 1. 3. France at. 31. 11. 5 trillion dollars worth of bonds trading at negative yields. To me seems a 1. 46 is a very healthy yield. I think people will buy them, head down to 1. All right. Best house in a bad neighborhood. Right . Yep. Exactly. Thats it. All right. For more on futures check out the website, futuresnow c. Announcer . Com. And a lot more buying in the bond market . Will i give the German Market my money and hold them and give me nothing for ten years, give to the french . Dont have the to buy sovereigns . No. Im coming to the u. S. , deepest and surest market and continue to see yields go lower, because its the fear trade. With my view on the world economy, definitely thats where you want to do. How low . Whats your bold call . Youre going to go i think the directions going to continue to be towards 1 and very possibly you could get there. Towards 1 . Whos with him, whos against him . Youre not. The only thing ill say, at this point the treasury market is getting priced for disaster. You may well be right. Weve yet to see the economic impact. Im not pricing the disaster here. Pricing it off whats happening in the rest of the world. My only point is, if you get one piece of positive economic news, say next weeks jobs report is a blowout number, youll see treasury yields shook back up. Shoot up or move up a little . A minor move. At this point, ten basis poinoff a 147, thats shooting up. Still 157, but more risk in my eyes to the down side as far as treasury prices go. Sitting in japan, where do i get yield . Not from jbgs . In germany, a third trading bear in mind the yields negative where they are now outside the u. S. With the treasury at a 180 about a month ago. Still have that differential. Didnt see that, and i think tightening off the end of the year. Tina, alternative applied to the bond market here. Do you agree . An alternative applied to the no. There is no alternative. Yeah. That thats been my point, mel, because of like i say, when you saw all the money flooding in after a 3 trillion rout in the broad market. To see that much money flooding back in and buying up stuff and to jims credit, people with strong hands held it, and you know, got right back to where they were. Im just surprised that a 2 and 3 drop across the board in these various assets was enough to bring in this money. Because, yes. The broad market fell more than that, but individual stocks, it was lard to find them that were double digit losers. Fyi, just watched the tlt go negative. First time trading negative for a few days. Hit a week high, now trading to the down side. Experts on the lookout for trades youre missing. Start with jim. Retail. Just noticed that over the last two days, the Retail Sector really has outperformed the s p 500. Also didnt give as much up in friday and mondays declines. I think what thats really saying is that the average American Consumer is not going to be thrown off of his game by brexit. Now, obviously, if youre in the world of finance in the u. S. Youre worried about things, maybe dial back spending a little there, but Department Stores, which generally are not where finance families go, will probably see no effect from brexit. I think thats what the market is saying here. Going video games . I am. Activision. This is an incredible story. The stock is trading near its highs and barely came off in the brexit selloff. Look what happens. Overwatch. 10 million users of beta. A record. Warcraft, an amaze be launch in china and taking a transition to online. Everythings is rife in this country, 10 cent, big gamer in china, a 5 passive stake. Good partnership. A compelling story and i think its got a lot of upside. I think Something Else to watch, talking about tech all the time. One of the named we talked about, microsoft and cisco, both quality names we like. The direction Going Forward and so forth. Sachas been there a while. Look at cisco. I continue to look at them for a variety of reasons. Another acquisition yesterday in security. Continue to get themselves exactly where robin said they would move themselves in this transition to higher growth, and getting that through services and security. Did another acquisition yesterday, and look at a company, talk about yields around the world and so forth. This is a name that trades very inexpensively from a pe perspective and getting nearly a 4 yield. A winwin. A ton of cash. A ton of cash. Balance sheet is unreal. And out of security, also, another big player. Yeah. By the way, power lunch has gone exclusive with the microsoft in the 2 00 p. M. Hour. Dont miss that. Coming up, counting down to the Bank Stress Test results. And before the break, look at the dow 30 heat map with the dow right now higher by 1. 3 . Hd, only one in the red here. Stay tuned. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Welcome back to the Halftime Report. The Federal Reserve releasing results of its annual stress test of the big banks due out later today. Kayle Kayla Tausche joins us with a preview. The first wave of results from the Federal Reserve last week, but todays will show how much extra capital the banks have built up beyond what the fed expects and then how much of that they can then give back to shareholders in the form of dividends and buybacks. Of the biggest banks, only Morgan Stanley passed each of recent years with no reservations from its fed, boa and jpmorgan, only citigroup an outright fail in 2014. All major banks expected to not only pass the bar but increase payouts. The question, how Deutsche Bank and southson will fair and see how they righted those issues and what that could possibly mean for barclays, ubs, Credit Suisse and a handful of european banks that have to go through the stress test of the fed next year. And the rats and the stringency what the fed puts the banks through highlights a growing gap between how investors perceive the progress of the u. S. Banking system in cleaning up its books and building capital compared to the overseas pairs in opaque expected and its expected what we could see this afternoon is a broadening divide between those two sectors of the financial system. Absolutely. Kayla tausche. Thanks. And on the session, Deutsche Bank shares down by 1 . Banks, a nice bounce over the past few days and even if were expecting in em to increase payout, theyve been dogs this year, lebenthal. They have. Frankly, i underweight them and see no reason for that to reverse with where Interest Rates are across the globe. Having said that i do like citigroup, two reasons. One it probably is the most potential increase coming out of the ccar in its capital return and trades 65 tangible book value. Too big a bargain for me to avoid. What about this . I am in it and like it for the same reasons. Getting a little torque out of this. I dont think the yield curve is going to kill them still. But i think from bac look at where that trades versus its book and look at where that thing could go and look where the rate is now, the yield, and where it could potentially go to, i think that makes it look more compelling. Jamie dimons already given 2. 3 . Thats right. In terms of this event is it a sell the news event . Is the bounce weve seen the past couple days, ccar coming out, going to increase dividend so im going to buy the banks because theyve been beaten down. I went through the first half of the stress test last week, i actually went through them all and doze off a few times. Its not the most interesting stuff. No, no, i didnt at all. So, look, i dont think that anything bad news is expected. So theres good news baked in, but having said that the stock is still lower than where they were and where they came out. To me, i like the banks except i dont like them as stocks. The management teams are the best ive ever seen. You like them as institutions. I like them as institutions, but seriously the management teams have come through just the most difficult circumstances. And theyre the best management teams ive seen in any sector. Theyve had the most challenges. Without the steepening yield curve i dont think you make money. I think this could be a very, very slow summer for trading. Im not willing to go through the headwinds. What i did buy is metlife. It has a 4 yield, beaten up and hasnt recovered at all from the selloff. There are some issues because they are not critical. They got the tag removed like in court, ge, and the government wants to put it back on. That aside the other way to play is buy the curve. That will protect principle more than the stock. Doc, you own jpm, youre in jpm, you like jpm . Were in jpm and we like wells fargo for portfolios, not personally so far, but broad market, yes. Like both those names, like what steves saying and im going to look at the preferreds on metlife as well. Northern trust would be one we havent talked about that i would say should be on your short list as well. Coming up, following the moves in the Options Market. What theyre finding that could make you money. Thats next. Lets take a check on oil here. We are up more than 2. 5 , right now 49. 05ish is our energy level. Kinder morgan is one of your picks, jim. Actually, though, mel, i do it because im agnostic on the price of oil. I think they make money through the flows from their pipeline and obviously the stock got hammered last year. I think this is a year it will continue to recover as it has. But as far as oil going higher, i really think theres so much of it aboveground that to get it above 50 a barrel seems to be a stretch for me. Is it the selffulfilling correction in terms of it goes up to 50, they start pumping again and then it goes back down . I think you have a while before that, but inventory numbers came out today, i looked at crude and trade around the uso today because the drawdown was a lot bigger than what was expected. Really good number. Still have to worry about other parts of the sector, like refiners, but i think were in trading range for crude and capacity will come back on. Theres still so much private equity money slashing around looking to make deals. But i think youve got a floor. So its trading range like Everything Else in the market. And that trading range is extremely tight because we talk about the ovx all the time. The Oil Volatility index. Yeah, that has been dropping and dropping and dropping from where it was now i mean, it was getting up towards the 70s, 80s, and now its trading below 40s. Interesting to see how the volatilities come out. Im playing the same as you, jim, i like kmi and im in the preferred as well. Good payouts too. Doc, how do you play oil . Im not. Youre not . Quite frankly. Why . Because i think 50 is going to be very tough. I think they can get a squeeze, and if you get a squeeze certainly at the end of the month here you could pop into the low 50s, but i dont really see it in the cards. I instead see, mel, this trading sideways. You know, lost through all this is the new Saudi Oil Minister came out about a week, week and a half ago and said were going to work through whats out there in the market. And i read the statement to believe the speech he gave that theyre going to get back in line and cut back on their production. I thought that was pretty positive and get us above 50 as we get past the summer. All right. I was going to say thats absolutely right, but the rest of opec is going to pump all out including iran because they need the money to make up for the last two years of budget deficits. All right. Well, as we promised the najarian brothers always have their ear to the ground in the Options Market. Doc, youre watching bullish bets in brazil. You bet, ewz traded almost 100,000 contracts so far today as it just screams off of that february low which is right around 17. 30. Its pushing towards 30 right now. And theyre up there, theyre buying the 30 calls, buying 35 calls, buying 40 calls. In december this is a longer term play. Theyve also traded some january. So 5to1 calls to puts, something very positive happening down there. And somebody wanted a really big bet that it continues. How long you hold this . Probably a couple months. I mean, unless we get some news that and thats a forever hold for me, right . Yeah. I mean, he jumped out of that seat. Wow. Wow. Well say until the olympics, how about that, mel . A month and a half . I say overunder in a week. Pete, youre watching bullish activity up only 100 . Gdx, we talked about it in december, where did they buy . They bought out to june. Were getting out of june and into july next week, what did they do today . Suddenly we see somebody come out and selling december 23 puts. Selling puts meaning in other words people are looking, and these are the size players coming in likely buying the calls earlier as well, all the way from december through february they started buying all these calls. Theyve had great luck. Now theyre selling puts. Theyre saying, look, if gold is going to get pushed down to the downside, if miners get pushed to the downside, they would like to still be involved. Curious, pete, you know more about the Options Market than i will but that strikes me as saying i want to pocket the premium. Sure. Not necessarily going down to 23. Pocket the premium, what a great strategy, right . If youre long and sitting here saying we dont know how much further its going to the upside and were not seeing any further up calls being bought from where theyd already previously been buying. But why not pocket that premium. And, oh, by the way, if gold starts to go down and miners go down, youre willing to be able to accept gdx. How long you hold this . Im already in for a couple weeks. Im out in july. I have not jumped on these options yet, but i likely will later on. Three hours to go for the trading day. Whats your second half trades . Im looking at the market. I still more look at the market but also going to focus clearly in the banks to see if there continues to be a buying activity going into the close. Jim. I like the comments we were hearing about tjx. I think it looks a lot like target about five years ago. The right quality and price combination. Doc. Cocacola europe. Cce. Wow, europe. Yep. And its making a big move today. Talk about exposure. Pete. That sounds great, but im not in that one. But i already bet in brazilian and ewz has been great. All right. That does it for us. Power lunch starts right now. Melissa, thank you very much. We will see you in an hour. Welcome everybody to power lunch along with seema mody, welcome, nice to have you here. Im tyler mathisen. Brian is with us. Michelle is off. And melissa will join us at 2 00 p. M. Eastern time. Wall street right now extending the postbrexit rally. The major averages have now made up roughly half of those brexitrelated losses of friday and monday. Lets take a look at the dow and s p. Once again higher now for 2016. The nasdaq is out of correction territory. The dow up 227 points capitalizing on yesterdays big rally. 1. 3 there, the s p 500 up closer to