About it in a second. Maybe you have an answer. Joe is here. Stephanie link, barbara. Did you hear what they told me . Its pronounced like duran duran. Thats my that might be a little after my time. They different than the beegees. Senior Portfolio Manager with new york bridge partners. This is a pleasure from las vegas. Kevin oleary. O shares chairman and halftime have you gotten any sleep at all . Are you coming straight in here, kevin, or are you well rested . Im well rested. I got in from rome last night, and i spept tnt the debates and whole lot of time in zurich and geneva. Very interesting. I want to ask you about cuban and what you say to each other off camera. I dont know whether thats whether we can do that or not. You think about that. For more on the sector rotation going on in the markets right now, lets bring in cnbcs senior markets commentator, Mike Santolli live from the new york stock exchange. Hello again, mike. Ive heard some of your thoughts on this already. You have. Thats the benefit of working a double shift. Right . You get to kind of mull this stuff over. The market itself, basically nothing since july 15th. S p 500 flat. Within the sector, if you look at the high beta etf, bahisticly the fastest moving most aggressive stocks in the s p 500, thats been outperforming segmentally over the last few months. Of course, on the down side is those low volatility stocks that were so popular in the first half of the defensive groups. Stable businesses, dividends, all the rest have not been winning. Now, whats really going on. Within that high beta or more cyclical area, semiconductors, transportation stocks, machinery. You saw country pillar at a 5 itweek high. Emerging markets. All this stuff is getting people to wonder if this is sort of sniffing out a Global Growth bounce or maybe an acceleration. You saw the stuff that got expensive because of their yields have backed off. I do think we have to ask the question, is this an economic signal . Have we basically had the markets pricing in, for example. Todays ism number, which is stronger or, in fact, is it a sector rotation and you have Portfolio Managers looking for laggard groups that maybe will be able to help them catch up in the end of the year. Thats what i think we have to figure out over the next couple of months. All right. Youre right, mike. Were going to kick it around and trade it. I had initially the same feeling as an article in the wall street journal, which is actually taking the other side that the Fourth Quarter will see continued strength in bond prices. I mean, this implies, joe, that nerf and zerp are over. Are they over . Is there any indication that were finally going to see a back nup rates . You have to at this point think of the capacity of parallel versus linear thought process and how much risk you want to take. Really taxable fixed income, yes, it works in your portfolio, but think about for a second where could you absorb the bigger loss . Could you absorb a big loss at fixed income market . My answer is yes, you can. Going into the Fourth Quarter right now when you look at your portfolio, the question is one where you do want to be a little more defensively oriented bad right now everyone expects it to be okay. What did you say at the top . Linear versus when you say stuff like that, does wapner he ignores me. He moves to stephanie. How do you know the difference between i dont say dead cat, a dead rock bounce and something thats actually going to continue because if we can notice it already that offensive is starting to work, doesnt it mean we could head back down and this isnt just as a false start and doesnt continue . Near term the tell will be earnings, right, to see how the reaction these stocks react to earnings and last Earnings Period some of the cyclicals where they roushtd disappointing quarters say Union Pacific or caterpillar. Bad news was rewarded with a strength in the stock prices. That reaction was interesting. The earnings reactions this quarter will be very telling. Now, i would say that i think sec li cyclicals can continue. Its getting a little bit better. Jobs, wages, pmis, isms, et cetera. Not runaway growth jobs, but better growth. If you have oil prices stabilize, dollar stabilize, i this i that thats a good recipe for earnings going forward. I dont think three q will be great. Maybe 4 q and first q into next year might be better. Then that visibility will give this lag a little more upside on the cyclical front. Domestically that sounded good to me, but can we assume that will japan, europe, china, will everybody on the same forward track as the United States, or are they stuck with nerf and zerp . Well, i think the u. S. Will continue to be the place to be. I think japan has its issues. I think china recently has had some very good numbers in terms of retail, auto, even imports, but i think they have serious structural issues that will take some sometime to work out. Most particularly the Banking System and debt. I dont see china being the driver for quite some time for world growth as its been. I think the u. S. Will be the big driver of world growth. Anybody can answer. Kevin, i know youre listening as well. Do we need we had an analyst on this morning talking about the tenyear saying 177 if it gets through that, maybe we go higher, but is there any reason to think were really headed that way versus the other way, kevin . I think were going to be sub3 even sub2. 5 for a long time. Thats not just domestically, but globally. Maybe the fed does 25 bips in december. Even another, even 50 bips. It makes it historically low. If you look just at the last year in terms of performance, and i know we love to debate sectors, but if you had a more defensive dividend or yepted return of capital based portfolio, youve done 11 in change, versus the s p which is 7 and change, and that trend i think will continue. If your company is not returning capital and take companies that are paying 2 , 2. 5 dividend, i think the market will only give you 6 . You get half your bogey from cash distributions, thats the way to play the next 12 months regardless of the election. I just think that the defensive is still going to work, and i really still hate the financial and Energy Sectors. I think theyre going to underperform dramatically. In fact, i peeled back going into q4 in energy, and i still havent bought any banks yet. I think the environment is the worst its ever been for them. You mentioned at the top, and i think its important when you look at portfolio, and i differ from what barbara is saying and steph is saying because i want to be defensive, but i think you have to look where consensus is. You said before, rightly, dont we already know that . Havent we already seen that performance . Think about energy. Opec last week announces were all skeptical of the surprise cut. Are you supposed to go into energy now . You know im transitioning into energy. You done this for a while . Wapner ignores me. Think about kevin, if you think about the Second Quarter of this year, joe, no one wanted to own energy. That was the moment to own energy. You look to the Fourth Quarter. The one thing no one is talking about, youre talking about rates, the biggest concern for the market right now could be the u. S. Dollar. U. S. Dollar. Kevin, you think energy is over . No, heres the problem i have with energy. Im a Balance Sheet guy, joe. I look at Balance Sheets. They always tell me about the future. In the last 12 to 18 months the large energy names, domestic, international, you name it, have them sustaining their capex and distributions of dividends with debt. Theyve been borrowing at incredibly low rates, short and longterm. Take dutch shell, for example. In the last 18 months its increased its leverage 1100 . I dont want do own anything thats sustaining its Business Model with debt because if rates do go up at some point, that chicken is going to come home to roost in a bad way. The truth is about energy, the Balance Sheets look horrific. Theyre not getting any better because everybody thought we would be at 60, 65. Here we are at 45 to 50. A lot of tease companies can make money at 45 and 50, and its the number one or number two players in the Energy Sector and within each sector within energy. Like the integrateds, chevron, exxon. Those are very strong Balance Sheets, and they make money at 45, 50 oil. Im not saying buy the low end, the very levered names, but on the integrated side, you could certainly pick from a basket there. On the enp side, thats where the growth is. Something like an eog or theyre well funded. These companies have already come back to the marketplace. They are able to continue their operations and grow, and i this i that the Bigger Picture on energy is youve got some opec overhang. Now, things may change in november if they dont come to an agreement. We may see a pullback. The overall supply demand metrics are getting better, and with all this global Monetary Policy out there and potentially fiscal policy, you can make a case for 2017 being a whole heck of a lot better than 2016. Im not saying dont own energy. I believe you own energy. The moment to own energy was much earlier in the year. I said before i have a concern about the u. S. Dollar. Think about what the Federal Reserve has done the last couple of years. No one expected the shale Production Growth that weve had in this country. That was built on the back of the Federal Reserve giving everyone cheap rates. Those wells were built on cheap money. Do you think thats going to continue . I dont. I dont think any of us think thats going to country. Those companies will be the survivors. Theyre going to take market share and do m a and grow and thrive. Those are the names you want to play. The number one and two players you want to own. It was all about High Yield Energy. We dont talk about that anymore or those bad Balance Sheets. There was not a lot of debt maturing in High Yield Energy in 16. Theres really not that much many the first half of 17. This Time Next Year . Youre going to be talking a lot about all the wave of debt thats maturing in the second half of 17 and 18 and High Yield Energy. Can opec come back and be the are producer i thought no. I think thats i think does it matter what they say and what they agree to . I think this is a fairly desperate effort on saudi arabias part, and you have them exempting libya and nigeria, iraq from this. Theres always a fair amount of, lets say, excess production that goes beyond the agreement. Assuming they can come to an agreement. They have not been in the past because of these issues. I think that even if they can come to an agreement, i think its going to spur all the nonopec producers to step up. Youre still going to have more supply coming on. I think their hay day is over in terms of being able to call the shots. And you can make money in shale at 45 . Theyll still some can. Not all of them. Whats the highest cost producer . What does he need . What does it need . Some need 80, 90. Some of them, sure. I think the high quality number one, number two players in the industry, 45, 50. Thats what they say. So does exxon and chevron, by the way. Youll know when the worst has passed when we see consolidation in space. Thats the question, do we buy energy here or do we wait . Look at the rally last week. I mean, it was it was amazing. Had you missed that, you missed a whole bunch of basis points in your portfolio. Thats a shortmaterial trade. I think you have to have patience. Youre going to have fits and starts. I think you have to have exposure to the space, for sure. Kevin, you were a big bear on apple throughout this year. Now youre buying the stock, and you just the point you made about energy, its already moved. Hasnt apple already moved, and now you decide its time to go . I wanted to wait through the upgrade cycle. The only thing i care about in apple, and you do have a split between the yea and nay sayers about apple now. People dont want to own the stock are those that think its just a Hardware Company that think it will go into a toasterlike business. I decide that its starting to look at the services business, and i think it will grow as much as 1 a quarter going forward, and thats going to buoy this stock. This upgrade cycle, some is anecdo anecdotal. I watched this stock from the point of view of users, which i stay in touch with a lot of them. When you upgraded, whether the 7 or 7 plus or the existing phones with the new operating system, you were pushed into a new data plan to service all of the memory you are going to need. The double, the triple the size of the photographs, the new services on itunes, all of that pushes you to more i cloud, more monthly charges, and thats all i care about. Thats 100 margin business. Im now in the bull camp of apple. Its a 5 waiting. Its zero two months ago. I think this name, in addition to its near 2 di dend, will give you a 6 to 7 animal return for the next few years minimum. We have some fancy four star guy coming on that doesnt like apple at all. You got to stay tuned. Thats what i love about this stock. You know, i like a market where not Everybody Loves it. You show me a name Everybody Loves, i dont want to own that. I want a little disconcerted people saying dont buy that because you need that. You need some wall of worry to scale. I think this name will work as Services Grow to 15 in the next 12 months. No one thought that this latest upgrade would do what it did, but you dont like it anyway, right sf. Listen, very candidly, i got up this morning and do what i do every day. I make a ton of mistakes, and apple was one of them. I dont know this. Im not busting your chops or anything. No need to be defensive. Does wapner do that. He ignores me. Pete will do that. He will be on later. He could change his mind. Listen, give credit where credit is do. Pete has been on apple. He has been on apple the whole run. He has done a great job. Is he the goodlooking one or the he is the minnesota guy. He will be on theyre both goodlooking. Im kidding. Did he go to ryder cup . He was in minneapolis. I think he did. You got to follow him on twitter. He tweets a lot of stuff. I follow very few people. I have been cutting down my will you follow me . Its a cess pool. He is not answering. I might. I cant guarantee it. From one joe to another. Apple . Apple of your eye . I own it. I was buying it pretty aggressively in the low 90s. I think at 112 to 115. Its taken a pause. I get it. Its had a nice run. I think expectations are still low. Valuation works. Cash works. The product cycle store i think is well understood. I think the big bang is the next cycle. You have to either hold this for the longer term into the next cycle or you could trade around it. I dont think i would be adding to the position here. Ill hold it. This job is so cushy. Heres what else is coming up. Normally i would have to say all this stuff. Theyve got somebody else thats already, like, prerecorded. Wapner this is so great. Anyway, thank you. Thank you, kevin oleary. Thank you. Watch this. Watch how i do this. Heres what else is coming up on the Halftime Report. After being stuck in neutral for the past few years, some of the out er the. Stocks are up double digits. Are they finally ready to break out . Plus, speaking of autos, teslas Third Quarter sales doubling from a year ago. Weve got the trade. And a four Star Tech Fund manager tells you his top plays for the Fourth Quarter. Get involved in the conversation. Follow us on twitter. More Halftime Report ahead. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Steve, other than making im here atme move stuff,rade trader offices. What are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. Td ameritrade. Welcome back. Auto stocks are on the move. U. S. Auto sales. Tap the brakes, though, in september with the two biggest automakers reporting declines yearoveryear. Stephanie, you are not surprised auto sales have peaked . I think, yes, theyre peaking. I dont think were going to see a massive decline from here, but i think for the stocks to work, i think for the multiples to expa expand, you need sales to increase. I think theyre cheap. The oes especially. If i had to play auto, i would go to parts. They get exposure globally, and theres underlying growth in c technolo technology. I dont own any of them at this point. I was going to say that ford, you know, after all the trouble, it moved, like, five years ago, and it hasnt moved since really. It says that ford has had a nice rally over the past three months, but a lot of good news was in that stock almost immediately after the recovery from the bailout, right . I had owned it a few years ago and made some good money, but basically where i sold, it hasnt moved. I think were very long in the tooth in terms of recovery in pentup demand for autos. Its one of the first top ticket items close to 2008 that you saw consumers buying. That continued because at the time you saw the used car and people were holding on to their cars much longer, and a lot of that has been satisfied. You know, im with you, stephanie. I dont see that theres a sudden falling off a cliff, but its hard to see where the upside is. When you look at the transports and the institutional side is really going to play in the transports. You dont see the tremendous amount particularly in the auto space of the volatility that some of the shortterm players are going to be attracted to. Its the institutional side. They dont look at the transports, and we they say, wow, the rails are having a fantastic year. Us p ups and fedex having a strong year. I think money comes back in to General Motors and ford once again, and even toyota. I think that will happen once again. Whats the catalyst . The catalyst as you pointed out was a couple of years ago. Youre not going to get hurt on it, but you really are just going to sit idly over time and not get rewarded toofrp. Ford has done a lot of thing right. Matthew mcconaughey, true detective. I dont understand the commercials, but i like them. Rooster mcconaugheys brother. Did you know that . Theres like a 30year difference. You are teaching us something. I really expected ford after it went from back to 13 or 14 like that, and here we are. Three, four, five years later. They were very smart. They had done a Capital Raise before everything happened. Youve got nothing. At the time you hadal you were troughing in sales. I massacre the english language. Brian sullivan will be speaking exclusively with General Motors. Thats today at 2 00 p. M. Eastern live. Were going to stick with maybe one of the problems for the big three here, and that is althe attention and immediate attention to tesla. Posting its best sales quarter ever saying delivery is more than double yearoveryear, and then ill tell you what scared me. Im just a novice at this. I think of a mercedes electric car and bmw electric car and even gm. I just dont see is it always going to be that they make the best one . Cant these wellheeled players that are we talked before about the need for a catalyst on the part of a gm or ford, and you mentioned others in the space as well. Why is there no sense of urgency like there seems to be with tesla to deliver these types of vehicles to the general population . I think if they saw the revenue acceleration potential in the near term, they would be far more aggressive than theyre currently being about the what about the government subsidies . Maybe thats what they see. Is tesla making money if you factor all that out . I think tesla has to at some point similar to what amazon faced years ago i think theyre going to have to grow in that valuati valuation. I think the potential is there for it to fall off a cliff. At some point they have to prove their ability to grow into it. Again, im skeptical. The jury is out. There are beautiful cars that supposedly the quality is unbelievable, and then theres a share price. Theyre not necessarily related. At all. I think joe is right. I see that joe . Both joes. No, i think its more likely not to make it in the long run because its really it was one of the first out there with these high quality electrical cars. Its very difficult. You need scale in this business. The question is whether theyre going to have the resources to sustain it. They have demand issues. This looks good, but theres a lot of competition from very wellheeled oems. In the end thats what will do them in. Steve jobs valuation on everything the product may be gorgeous, right . The stock price is expensive based on the results. I hate when you say bad things. Im afraid to look at my its a greatlooking car. It really is. It is. And its really cool, but i just its a hard stock to own. Its a cult stock, and its expensive, and it trades on production. If you believe theyre going to be able to produce what they said, well, thats great. Then you can buy the stock. They dont have a great track record in delivering on that production. Track record is not so good on the puzzling the solar city deal. You ever drive across country . No, i do not. Have you ever seen i was talking about this earlier a cabellas, and you so he it off in the distance, and you are, like, oh, my god, what is that . Is that oz . You hear anyway, theres 90 of them, and theyre worth i dont know how much money. Shares of cabelas are higher on the news that bass pro shop. Its exciting to see one and go in one. Theyre so cool. We should take the show on the road. How experts are playing it in the trader blitz. Pete will join us from minneapolis with some ryder cup summarie summaries. I dont know if he went. The oil name that option traders are betting big on today. The Halftime Report is back in two minutes. Across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, Creative Business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. Let us help grow your companys tomorrow today at business. Ny. Gov what are you doing . Getting your quarter back. Fountains dont earn interest, david. You know i work at ally. I was being romantic. You know what i find romantic . A robust annual percentage yield thats what i find romantic. This is literally throwing your money away. I think its over there. That way . Yeah, a little further up. What year was that quarter . What year is that one . 98 thats the one. You got it nothing stops us from doing right by our customers. Ally. Do it right. Lets get out of that water. Welcome back to the Halftime Report. Were nearing 12 30 on the east coast, and heres where the markets stand right now. I dont like the looks of that. This is the first day of the quarter, isnt it . You know, supposedly theres a great quarter last quarter, but i dont remember september being anything to write home about, except we have some volatility. I guess were leading down into a horrible low in october. Lets head out to minneapolis where pete is standing by for us. Were you singing sweet caroline to rory mcelroy. Thats mean, isnt it . No, no, no. You know, joe, the bad part is there was 40,000 people there, and all of a sudden theres the focus on a couple of bad eggs out there who do things that are inappropriate, and then all of a sudden that gets highlighted. I say that all the time about different sports about football or Football Players and so many guys do so many great things, and yet they focus on the negatives. The couple of guys percentagewise who have something wrong. This was great. The weather could not have been better than it was this past week. Must have been unbelievable. I was getting the hair on my neck just listening to the thunderous applause coming through the tv. Must have been unbelievable to be there. Unbelievable. Great event. A great event, and minnesota is pretty proud, and i know you have been to hazeltine. I think at least to play golf, i hope. Its an unbelievable facility. I have not played, but i have been. It is beautiful. For some reason, it looked easy, but it wasnt. Its because of those guys. Right . I mean, its those guys. It is not easy. Thats its a beautiful course. Its absolutely outstanding. By the way, they even had to bring in extra rest rooms. They did everything that they needed to do to make sure that the event was perfect because there were so many people. The overflows were incredible. It was perfect. It was, like, 1612 or something. You seeing action in an oil name today. People are selling puts. Theyre bullish. Is that it . Youre exactly right. Last week we highlighted the fact when volatility was extroemly low, we had buyers of baker hughes, and he were this buying the upside called, joe, and now what were seeing today is as volatility started to creep back into the marketplace, and were seeing it in some of the energy names, you look over at halliburton. These two names were actually sbefr twined for a while. You look the ahalliburton. Theyre going out to december. Theyre selling the 44 puts. This is not quite as an aggressive strategy as when we see the call buying. At the same time its still aggressive enough because what they did was they sold over 10,000 puts at the 44 strike. They got about 2 there. What that is telling you right now is theres enough premium there that at 42, these folks are willing to own this stock if it gets down there, which is ironically right around the 100 day moving average. A pretty big bet that this stock at least holds those levels, and i think everybody starts to think that theres a bit of a put right now underneath oil. At least the energy space after what opec did last week. Different kind of put. Similar. Pete, its joe. I own slumberge. You dont like that strategy of selling puts, do you . Its pretty risky. Its a great strategy, joe, under the right circumstances, but its mostly for the professionals, and the reason i say that is you have to fully understand what that means. If this stock were to fall on a bet, if for whatever reason you start to see halliburton drop and its trading in the 38s, you own it at 42. Thats your stock. The professionals know that, and a lot of the big gee out in the marketplace trading this kind of thing, they understand all the risks and exactly whats entailed here, but i think sometimes the public doesnt always fully understand. As long as theres a knowledge of that, its a great strategy. All right. Thank you. Yep. You going to the game tonight . You going to the game . Of course. Let me tell you something, eli manning has his work cut out for him because that vikings defense is unbelievable. What they did to cam newton, wait until tonight. I think they got a few more tricks up their sleeve. Wow. A lot of people talking vikings. He is right, though. The vikings are good. Youre so lucky, pete. He is lucky. He is also a renaissance man. He goes like this and now he did point out that i didnt like apple at 90, which i thought he would. I would never do that. Ill tell you what, guys, by the way, not just a renaissance guy. I am going to camelot later in the week. I have a whole lot of things going on back here. Can i ask you one more question . Yep. Pete, top of the show defensive or offensive going into q4, where do you sit . You know, i sit more offensively, joe, but what i mean by that is, you know, when we talk volatilities and were always talking volatility whz were looking at the options world, when the volatility is low, you know it. We talk about it all the time. Thats when you buy. You either buy protection or you sell out of your positions and own options rather than the stock. That way you can stay very offensive. Depending where the market is goi going. Right now im offensive. Youre taking some off. I guess theres a defensive play part of this as well. You got to combine everything along with special teams, right . Right. All right, pete. All right, guys. This is really weird because my idol, im going to toss to my idol with bill griffith. I just have one question for you before you do the headline. Where did time go, bill . Where did it go . I was just thinking about that. When was the last time you and i were on the air together . I think the war of the earth must be tilting on its axis about now, as a matter of fact. I think theres applause and cheers around the globe right now that were together. Its the one hand clapping. Right. Right. Thats let me tell you whats happening, joe before we get to power lunch. Jamaica feeling the effects of hurricane matthew. The cat 4 storm is expected to pass between that island and haiti sometime late tonight. Forecasters do expect matthew to bring lifethreatening rain and 140mileperhour winds to the caribbean. Unbelievable amount of rainfall. Subaru, meantime, is recalling nearly 600,000 vehicles. Some for a second time. The carmaker is saying that windshield wiper motors on certain legacy and outback models made between 2010 and 2014 may be prone to overheating and pose a fire risk. And it was a close vote. Columbians have rejected a peace deal that would have ended the long civil war with the leftist rebels where. That conflict has killed and forced millions from their homes. The deal had been supported by secretary of state john kerry. And as you have heard by now, after eight years finally team usa reclaimed golfs ryder cup over the weekend. The match up between american ad european players. Phil mickelson shot a 63, tied with sergio garcia, but the real one, joe, as you know, was patrick reid against rory mcelroy. That was great, great theater over the weekend. Maybe greatest match ever. I think so. Reminds me of the matches you and i used to have with kelly and thats right. And andy. Up in i love that. How come everybody else has aged. We stay the same. There are two paintings up in the attic that look like hell right now. Poor encana. Anyway finally got that one. Coming up, i know hell hear about it, and then ill hear about it. Kidding. Coming up, a four star rated tech fund manager with stellar performance. Up 15 yeartodate. His top plays in that space. Coming up next. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive welcome back. Im Brian Sullivan live in detroit, michigan, today. Weve got a very special program for you. We are here in the motorcity, and were going to be chatting with dan gilbert, the billionaire founder of quicken loans, who has almost single handedly been building the city about where they are in the process, the optimism, and some of the challenges still to be do done. Bill emerson, well ask him about the fed and Mortgage Rates and a rare interview with chris ilitch. O they own the tigers and red wings. They do almost no interviews. He will be here with us exclusively. Mary barra will also join us. Well talk about the revitalization of detroit and car sales and everything in between. We have a big couple of hours coming up on power lunch. Almost as exciting as that ryder cup match. Not quite, but almost. Wow. That is cool, brian. Pizza pizza. Do they still do those . I loveless se little ceasars. Tech, meanwhile, has had a stellar year so far. Up 11 . Its the second best performing sector. What about this rally . Will it continue . How should you play it . Lets bring this brad, a fourStar Tech Fund manager at janua janus. The stock is up. Ive been singing your praises already, brad. Dont let me down here. You say that there are three key Tech Companies to own. I could guess, but why dont you tell us . Sure. Thanks for having me on. Yeah, i think its been a strong year for the tech sector, and one of the big things driving it is the shift to the cloud. The move off of legacy, i. T. Infrastructure that was housed at companies and two of the big cloud players, and were seeing a threehorse race develop between amazon web services, microsofts cloud, and googles cloud. This is previously something that am zplon has been dominating, and they still have the dominant position, but were increasingly seeing microsoft and google gain ground, and i think thats a big driver of whats happening in the tech sector right now. Yeah. I was most interested in you pulling no punches on apple, do you, brad . You may want to blur your face so when you are out walking on the street, no one knows it. You say these things, but know innovation since steve jobs . Thats cold, man. Well, i think apple is built a very dominant and excellent product in the u. S. And europe. They failed to get significant traction outside of a few key markets, and if you look at market data in the Second Quarter, 88 of smart phones sold were android. Theyre losing almost nine out of ten incremental market share every day, and innovation that we have seen over the last five years has been just that. Incremental. Its not been revolutionary, and i think the products are getting a little stale, and they are losing out. Some of their potential ecosystem and network due to android platform from google right now. Wow. You want to pick his brain, i guess . Yeah. Brad, im just wondering because i cant disagree that the innovation platform has seemed to slow down, but theyve got over a billion active us users, and there is a big ike ecosyst place, and theyre spending a huge amount of that cash on rnd and moving into lots of different areas. It seems theres probably a pe expansion story here as well, and wondering what you thought of that. I think what theyve done is boxed themselves into a corner a little bit with the iphone, you know, being the vast majority of the Free Cash Flow of the business. Its on an every other year upgrade cycle, and theyre adding layering services on to that, which i think is great as the app store grows and other sclo cloud Services Grow, but right now its hard to get off of that replacement cycle for the iphone. I do think theres a huge value in the Network Effect of the billion users and i would completely agree with that. Its just a question of can they grow the Free Cash Flow that they can generate from that user base and can they hold that user base over the next five to ten years with android gaining incremental market share in the 88 in q2. Back to the cloud, the big three. Do you think well see price a kind of price war or just intensification of pricing by the big three . I think theres a big economic gain to shift to the cloud to begin with. They have a huge price umbrella that theyre underpricing on premises legacy systems. We saw some price wars a couple of years ago that didnt really drive share shifted, and so what were seeing now is am zplon web services is doing well with internet and Consumer Technology companies and google is doing well with big data related technology applications. I think were seeing the three find their niches, very large niches in the market. Its going to be less about competition and more about just expanding and accelerating that shift to the cloud. Just real quickly, is netflix going to take over the world . That was a year ago. That was the story. It hasnt. You know, suddenly people realize they got to buy the stuff, and other people can do it too. Big day today. Is it still buy it or whats your thoughts . Yeah. Were excited about their expansion opportunities recently being launched on comcast set top box as well as liberty cable in europe, and so we think theres a lot of runway for new subscribers as well as increasing their flywheel of asps and content around the world. All right. I do use it, but i use steph, what do you think . What do you make of all the everything we just said, apple, netflix . When we talk about about offensive versus defensive, i think its offensive. I think you can own and be overweight technology. You want to own some growth, and you want to own some value. One of the names that ive added recently is palo alto. Its had a nice run since its quarter, but i like the subscription story. I like the operating Margin Expansion story. It trades at a discount to its peers, and i think people will continue to spend in this particular segment, and i dont think its as overowned as some of the cloud plays. I think cloud is pretty well known. Im not saying they cant continue to move higher, but im trying to broadern out an out a other names. Coming up, two banks in the crosshairs. Deutsche bank losing steam after a big rally on friday, and then the state of illinois suspends billions of dollars in investment activity with wells fargo. Trades straight ahead. Whats going on here . Im val, the orange money retirement squirrel from voya. Were putting away acorns. You know, to show the importance of saving for the future. So youre sort of like a Spokes Person . More of a spokes metaphor. Get organized at voya. Com. Four trades on four stocks making news today. First up, caterpillar on the move. Hitting a new alltime high today. You own steph, is it alltime . Not alltime. Just the cycle, actually, but new high. New high. Yeah. Mining expo happened last week, and there were a lot of bullish analyst notes out there. They talked about the bouttomin in mining, and the replacement story has legs in maybe 18. Orders better and maybe pricing is also getting better. I think people are just hoping that the things turn for the story. I like it. I wouldnt buy it. I wouldnt chase it, but i do like the story a lot. Plays in defense offense. If that thing moves, maybe it is happening. Wells fargo loses another big customer. The state of illinois. If you looking at wells fargo right now and thinking about or considering buying it, or considering buying it, ultimately you need to understand what warren buffets move is going to be here. Its a very large steake. If he decides to sell, youll get stock. There are others jpmorgan, pnc that i think you can go instead of wells. The Deutsche Bank drama continuing today. German politicians have accused the United States of wagging an economic war. All of this after apple. Dooush baeutsche bank, in te buying the stock, its a bit soon. The European Central bankers are having big talks with our authorities here and whatever needs to happen, it means equity liquidity for Deutsche Bank. Bass pro shops to buy cabelas. The deal at 5. 5 billion. Everyone is winning all around on this. Elliott associates has an 11 stake were pushing on this. Capital one, they get the credit card business. Theyre going to win and investors who were speculating all year, the stock was up 18 coming into this announcement. There was a lot of speculation. You get rewarded on this. I think 65. 50 is the price. Coming up, stephanie link is going under the radar on the one restaurant stock you need to watch this week. The shares are up 24 this year. Wow. The Halftime Report is back oh, no, did i doggone it. Well be right back. Welcome back to the Halftime Report. Im jackie deangeles reporting from the nymex. The volatility is up on this first day of the Fourth Quarter. Jeff killberg, where do you see the vix headed . Its been suppressed for so long, jackie. Look at the environment. Weve seen a subdued vix. Now the cash price, index at 14. We see it going back to historical average of 19. Remember, us traders werent focused on the front month future. Right now its trying to get up to 16. November contract is close to 17. We see some type of implied volatility being priced in as we see the election front and center. Thats what i was going to see, jim urea, would you be a buyer of the vix now . Id rather be a buyer than a seller. I think id rather than that see 2135 break in the s p contract because thats when the panic begins. Its not just the election. Deutsche bank is unresolved. There was some tough talk about brexit yesterday but it is mostly the election. For more on the futures market head to the website now. Well be back with our live show online at 1 00 p. M. Eastern tomorrow. Stay with us for more halftime after the break. The worlds most exciting technology. Doesnt go on your wrist. The highly advanced audi a4, with classleading horsepower. And its got the spring and bounce of a traditional mattress. You sink into it, but you can still move around. And now that i have a tempurflex, i can finally get a good nights sleep. Buy the most highly recommended bed in america for as low as 25 per month and a 90 night free trial. What are you doing . Getting your quarter back. Fountains dont earn interest, david. You know i work at ally. I was being romantic. You know what i find romantic . A robust annual percentage yield thats what i find romantic. This is literally throwing your money away. I think its over there. That way . Yeah, a little further up. What year was that quarter . What year is that one . 98 thats the one. You got it nothing stops us from doing right by our customers. Ally. Do it right. Lets get out of that water. Ally. Do it right. Across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, Creative Business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. Let us help grow your companys tomorrow today at business. Ny. Gov welcome back. One of the things that triggers back. The story is there. Were here. They meet on that. The numbers on the china business. The 50 will be enough. I still think were going to be long in stock. If you want to be ahead of those. The market closes in three hours. Sometimes i think its prudent to take it off. Its 1. 37. Google is 1. 25 target on it. Take some profit here. 8 last week. Closing. I think were going to. Its there. Whats app messenger. All right. Youre going to understand why thats the music. Kick off the final quarter of the year. Its a strong offense your best defense. Expected to take shots at wells fargo and mylan. The corporate crackdown and motown, thats why were listening to marvin. We are live in detroit talking with some of the