Theres volatility and a lot of talk about volatility right now, but if were being honest, the 200 Day Moving Average is 16 on the vix right now. Theres volatility. Maybe pick up a few names here or there, but were going higher from here. Zroo does it feel, though, steve, as though were at an inflexion point . I dont think were melting up. For all the volatility weve had this week, were going to finish slightly down a week if we close right now where we are. We keep going back and forth. One day were up ten handles on the s p. Next day were down. Whats the market looking for . Whats the key right now . You know is it the dollar . Is it oil . The key is to get through the uncertainty. Oil is look, the back drop is were still driven quite a bit by the qants and passive investing. Thats the reason why we keep going back and forth like we do, in my view. Its reversion to the mean. Theres a big part of their model. Theres so much money that has flown into that, you cant understate it. Oernt on the other hand, theres no reason to go all in and make the big bet right now. Particularly with the uncertainties. Everybody is very conscious. I talked to investors. Whats the key . The dollar freaked people out a little bit this week in the speed in which it has risen. Is it oil . You see oil today tracking right along with stocks. With respect to the dollar and oil, which you just referenced, both of those are positive impulses going to this earnings season. The dollar has been relatively flat. Its actually down a little bit on a yearonyear basis. Oil is starting to inflekt more positive whats important is that for the first time in over six quarters were now going to have revenues up on a yearoveryear basis. Thats a tremendous boost going into earnings season for bottom line as well. Do we need to be cautious or tune itsic . We. You talk about that passive move. This is the time for active managers to really shine finally. Weve seen our portfolio up 2. 6 of the hedge fund managers. If you being look at earnings revisions, i think weve got all indications something blows up in the next six weeks, that is the time where you have to say im going to take a bet or i can be passive. I would rather take the bet. Are you buying stocks this week . Yes. I bought honeywell because i think its not broken, and its a good story. Well talk about it later. Celgene, you have up side there, and i went after illumina again because i think thats a good longterm story. These are shortterm broken, but i think longer term i like them. I started buying more financials yesterday because i really thought that yesterday was a reaction to china, and today you have seen jp morgans numbers, and as we go into the quarter, youll be better off there. You buy anything . I did. I did. I like it much higher than many analysts do for the longterm. This week im buying fxi and eem. Im buying the emerging market stocks that have underperformed over the last month, and the reason for that is we saw the china data that came out overnight. Ppi is now turning positive. Its the first time in almost five years where ppi is actually positive. Thats a tremendous earnings power behind the chinese corporates. I think you at the inflexion point. I thi its in the emerging market stocks. Thats whats going to start to do better. Particularly as were looking into next year. Were starting to see growth. You didnt see anything in the numbers yesterday. The trade numbers scared me. If we get more than one of those, this is just one. If we get a second one zplool you are sitting at 100 cash. I have some in money that we manage for clients, we are in the market. We bought ebay this week. We bought Tenant Health care and a number of stocks. Im not totally in cash. Lets talk about the export numbers. If you look at it on a threemonth moving average, theyre flat. Doesnt that scare you, though . No. The output numbers are improving really markedly. While, yes, the external environment is pretty flat lining, the internal environment within china is inflekting more positively, and thats what im buying. Theyre going to afford less and less of things from outside their borders. Even though theyll export more, right . The strength of the consumer is improving within china. Thats what im focused on. Buying the domestic consumption play, domestic cyclicals within china, those will be advantaged. The activity data, the alpha data is telling you thats improving on a macrobasis. Its great they were able to extend the definition of what a nonconforming loan is. Foufr. Well never know the truth because theyre corrupt and dont give you the right numbers. Hey, hey, hey. The other idea is what roles could play . Rosengren is on exclusively today, and heres what he told our steve liesman. This is the boston fed president , eric rosengrin. There is a higher probability in december that seems appropriate. The market seems to think theres a high probability. Well see how the Economic Data actually comes in, but i think it is priced appropriately. So the market is okay. You would have thought after the Economic Data came out that the banks would have taken another leg up. They actually didnt. They came down somewhat. The high of the day for the banks was after jp morgan reported and then after after the Economic News came out and rosengren maybe its the word crossselling that comes up again. These words crossselling, and it scares people a little bit. The Regulatory Environment over the banks is fairly prohibitive, people would say. Its more of a variable than where Interest Rates go. Rates have backed up. Banks have not performed. Nobody believes the fed is going to go through with it until they do it now. Theyve got so many of these fake moves. Oh, were going to something happens in november. Im not saying it will, but until they do it, nobody is going to believe it. I dont think it matters for markets. If a fed hikes one rate hike in december and then pauses for another six months, i dont think that matters in terms of how equities are going to be valued. What matters more is if you look at the long rate for where the fed thinks the neutral rate is, that will continue to move down. The slope is very shallow. Whether they hike once in december, that to me isnt a big deal. Are you more inclined to be short the s p here today, doc . Yes. Oh. I am. And i am because i think as i have said for months now, this is not a change. Going into the election, volatility will keep moving from the lower level to the upper right on the graph, meaning higher. Were going to see higher volatility. Higher volatility is going to scare some investors. That will create the opportunity. This is probably a good idea just given where the markets are to remind you of whats coming up next week to help us celebrate our five years of. We have assembled a lineup of allstar investors to give their opinions on where we are in various parts of the market. David tipper, carl icahn, jamie dimon well talk some football at the end of the week as well. Well get his perspective on his own business in and out of football. Its going to be a fun week to hear from these Great Investors on where they see the environment in the months and certainly the year ahead. Lets talk more about financials. They beat on the top and bottom line. I cant tell you the ten because the environment isnt really supportive of that, but you got to put in kind of the six, seven range thinking they could be more upside to come. If rates back up you have the Regulatory Environment, which is the overhang. How do you make sense of all of that . Its tough to make your money betting on what the fed is going to do or what Interest Rates are going to do because its been surprising people forever, but i do look at some of the uptick in inflation were seeing kind of cpi and stuff. Were seeing that increase. Yet, the tenyear is down a lot over yearoveryear, and i think to some extent the picture might be suggesting we could get higher rates coming here certainly good for the banks. You loo being it he big guys. Theyre growing loans. Theyre getting more efficient where are Capital Markets has become a tail wind as opposed to a drag. Credit quality is remaining pretty good. I mean, i dont see kind of troubles developing. Its a matter of whats going to give us the next kind of kick up as opposed to a kick down. What bank stock would you buy today, if any . I think looking forward, i think what were seeing today is strong trading results are nice, but they dont necessarily push the stocks up. I think kind of growth in citis core consumer nonu. S. Business is something that the market will look more sustainably on. Sarat . One of the big bears on all these stocks is credit quality. Do you see that turning over in the next couple of quarters, or do you see it still firming up . I dont see it get worse. Most of the metrics we kind of look at to get an idea of what credit is doing are things getting better. Its hard to say things are going to get better than they are here, but theres a flat line and then gradually deteriorate. As far as the leading indicators of stuff we can keep track of, theres no sign of showing up with kinks in the armor yet on the credit side. Thanks for calling in. Appreciate your time today. What do we think about the banks this side of the table . I still love financials. When we talked before about jamie dimon, and i bought it when he was buying the stock. You are getting it with the Asset Management businesses and wealth mlgt. It was incredible, though, to see the improvements that we actually saw in the Capital Markets in jp morgans numbers to help assist the cyclicaliy. I do see them picking up clients on the retail side with the shakeout of wells fargo, and citi are probably see it as well. Thats why i like bank america. A lot of those loans are instantaneous. Doesnt take any paperwork. Takes a signature for you to get a margin account. Are you Still Holding wells . I hope i get a chance to buy it on a bigger dip, judge, but nope. Took profits on all the puts, and i dont have any stock. Dont have city or b of a. The asset manager business is on these banks are under siege. So much has gone to pass for investing, and those margins dont exist. They dont make money on them. I think that will continue to be the trend. We get major market correction. Then we take a look at Capital Market activity. A lot of that is rushing to the window to raise raise debt. Were seeing m and a peter out. The money center banks, i dont feel much love on the desk, right . No, theyre i really feel you have to steer clear at this point. If you want to go in right now to kind of close your eyes and hold it for a little while, thats one thing. They dont have a sales issue, and i know people might think of this and say what are you talking about . I dont think its sales or cross selling. Its ethics. Weve all worked at an investment bank. You could work at the finish line store and you know you have sales goals. The question is are you going to compromise your ethics to achieve those goals . They have an ethics issue they need to address. Its such a small part of their business. And it is. Such a small portion. You cant indict 260,000 people for that they have to get over the perception. The government let me give you an example. A lot of issuers from a rhetorical standpoint, its there have been deals pulled from these guys, and i think the Third Quarter numbers, it was exactly. They came in, and they thought they could have done worse. Fourth quarter, those are the numbers to watch, and lets see what the impact actually is. It gets better, but this is where the active management comes into place. Exactly. For sellers here, and youll have buyers on the other side. That will put pressure on the stock, and why not fick a jp morgan that are cheap . Zplool one wall street firms bold call on a big cap internet stock. They say its about to outperform kneveryone else in tt sector. Also ahead. Its got to be the shusz. Shoes. Shoes. It used to be. Now its the shoes, the pants, the shirts, the sport bra, the hat. A big call from one wall street analyst that could shake up the sports wear sector. Game on, the stocks poised to win christmas. This is the Halftime Report on cnbc. With scott wapner. Were back in two minutes. We need to be ready for whatever weather may come our way. My names Scott Strenfel and im a meteorologist at pg e. We make sure that our crews as well as our customers are prepared to how weather may impact their energy. So every single day were monitoring the weather, and when storm events arise our forecast get crews out ahead of the storm to minimize any outages. During storm season we want our customers to be ready and stay safe. Learn how you can be prepared at pge. Com beprepared. Together, were building a better california. Welcome back to the Halftime Report. Want to show you the markets. We are steadily losing steam. In fact, the s p 500 is just about to go negative. Major averages really across the board are following suit. Nasdaq, all of the charts pretty much look the same. If you throw up oil as well, its going to look almost identical to what the overall market is doing. In fact, as oil started to come down a little bit, the market started to lose a little bit of luster as well. You could satisfy almost the same thing for the financials. Financials sort of deteriorating a little bit. Even the ones that reported earnings today. Jp morgan, wells, citi. Some of them going into negative territory or at least threatening to do so. Theres the xlf. You put an overlay of the xlf, the s p 500, its going to look like a virtual identical chart there. Thats the story right now. New at noon, though, a bullish call for alibaba. Mkm partners saying it will be the best performing sb ining in name over the next year. It has a buy rating. Anybody own it on this desk . If not, why . We own it for clients. Pete owns it. I dont own it right now. Unfortunately, i got out too early. I owned it. The stock exceeded what we thought it would do. I know mkm here is talking about the cloud in particular, and none of us think that anybody two from outside of china will run chinas clock. This is not a surprise, but its a good call by the analysts because in the United States theres going to be a big competition for the cloud. China, theres zero competition for the cloud if alibaba gets in there hard right now. Theyre expecting a solid quarter. They say theres going to be noise into the results. All right. I dont have a lot of owners of that stock. You give me your large cap swnt name. I would buy it. In terms of the u. S. , says i like netflix at low prizces. I still think it would be a phenomenal acquisition campaign. For apple i think still it should happen. Im looking to pick up these stocks when they miss. Not when theyre the apple of everybodys eye. Google is the one i want to own the next year. I agree with that. I would own that, even if it does pull back on an earnings basis. Its the cheapest. Whether it pulses back or sht, facebook still has so many different arrows in their quiver right now. They have not monotized whatsapp or instagram. We talk about snapchat thats out there right now. Lets be honest, they just created something with an instagram to compete with snapchat, right . What could be interesting i and know we are not talking about twitter just yet, but twitter as a part of facebook could be interesting to tap a different channel that they may not actually be working with right now, and a lot of that premium is coming out of twitter. People are wondering who is going to buy them . That could be an interesting opportunity if the numbers could work. Its a tainted franchise and tainted brand. I dont see them doing it. The business usage of twitter, facebook does not get through their currently current channels where. Heres why somebody else agrees with you. Somebody really big. I mean, i agree with you, with that assessment, but somebody really big in the option market today bought 10,000 of the march 16 calls, so thats 2 in the money, that call. They sold 20,000. Thats two million share equivalent at the 20 strikeout in march. All along ive been saying takeover happens in the low 20s. This is somebody who is putting a million shares where their mouth is buying this thing, and they did it one by two for even money. Wow. The stock got blasted this week. Yep. Almost every day. True. That stock price gets cheaper, then perhaps it becomes more and more and more attractive to whether its salesforce or whoever. Wait until after october 27th. Everybody knows right now i dont personally, but theyre sitting here and going through this whole process right now and word on the street is the institutional investors, theyre looking for someone to kind of take them out before earnings. Well, to me then everybody thats buying is going to wait until after that to figure out why the stock goes. This is a march trade. Beyond the election and all this fluff that weve been hearing about about five different suitors and all of a sudden everybody says not interested, somebody is going to be interested, i think. Still happens in the low 20s. Talk about the market oil. Losing a little bit of steam. Still hovering near 50 a barrel. Its having a good year. Its up 35 . Should you get into the oil and Energy Sector . Well discuss that coming up. Plus, honeybillion moviwell mov. What dave cody told jim that is making investors bullish today. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley is it because so many go after it the same way . Chasing after short term returns. Instead if getting caught up with the crowd, the Investment Managers at pgim take a long term view, teaming specialized active investing with riskmanagement rigor, to seek out global opportunities. We manage over a trillion dollars this way, attracting many of the worlds leading investors. Partner with pgim. The Global Investment management businesses of prudential zbriefrmts were back. All three of the major average says have lost steam. Theyre still in the green. S p and nasdaq barely holding on, but all three are negative for the week. It would be the second straight week, in fact, that the dow, the s p, and the nasdaq would be negative for the week. We continue to watch that. Oil has been a culprit. Its come in a bit today. Thats caused stocks to move off their highs. Banks as well. The kbe has been down for three straight days. Big day for earnings. Theyve been trying to move higher. They were, in fact. They lost steam as well, and thats, in part, playing a role in why the markets themselves have lost a little bit of their games today as well. Lets talk some energy. Shares of Royal Dutch Shell are uptodate. Its to a sell. The stocks hilt a good run as well. Its up 18 in a year with kanaccord believing its a sell. The new price is 1,000 i dont know what were reading there. What does that say . Whats the price target . Oh. 1,950. It seems so wrong. I didnt want to read it. My bad. Lets talk energy. I mean, im not a buyer have energy here. I think if you want to play energy, we like to do this through the refiners. Were at 50. It could go up to 60. If it starts going to 55, you have a lot more oil coming on. I think you had a nice run. Youve got a lot, judge, that will happen when they have that volatile meeting. For whatever reason, this meeting and, for instance, 2014, it was a volatile meeting. As soon as that meeting ended, they were slamming oil. Be careful if you are investing here. At least snug up a put underneath there or something because this could be pretty ugly a month and a half from now, or pretty great, but i think given the run, you know, which way im leaning. They give a whole list in terms of Royal Dutch Shell. Ive heard others say they love. Near 100 billion debt burden, high Free Cash Flow target, disposal programs struggling, depound over massive excess capacity. They go down a laundry list of reasons why you dont want to be in this name. The price target doesnt even cover the cost to carry for the dividend. What kind of call is it . Price target even through me. Clearly i was trying to cover for you. The problem with being long energy at this pount after this big move is that the order to stay long, you have to base your Investment Case on those notable truthful people, putin and all the Oil Ministers of opec. I dont think thats a strong Investment Case. What i like is the alarian mlp. Ill not a big believer in yield stocks at this point in the cycle with the fed poised to go. This stock has not participated. Were. The spread is it still monster wide. I think positioning has been moved up rapidly in in rg. You have a couple of catalysts ahead of you, which are employing to create a lot of unsesht. I dont see that the market is going to get significantly longer where, if you dont need to buy energy, dont buy it. Are you buying any energy or no . My clients are genl buyieral buying energy. You have to be invested in it other than on a head side. We definitely are seeing folks short and folks long. I think more often than not theyre under weight a little bit right now. The firm saying shares are poised for reaccelerated global growth. Weve made it our call of the day. Im reading shoe dorg, by the way, by phil knight, and its the bestway book of the year, folks. Everybody should read it. Fabulous risk taker. And guess who is cut out of the same cloth . Your friend plank over at under armor. I like the stock. I dont know that theyre quite as diverse as Piper Jaffray would have them be here because i still think theyre mainly a clothing company. Not as much on the shoes. Theyre looking for a huge uptrend in their footwear. Theyre theres huge up side when you are only making as many shoes as theyre making. Huge up side. And plank makes a lot of the right moves. Piper recognizing that this is a great social media. I mean, they use social media very well. They use the im platform very well. Adidas has had a big reboot. They initiate on adidas with overweight. You have bought nike. I have held nike. I am a firm believer, strong ceo, strong brands. Im not saying under armor is not going to perform well. Nike will still have its place and continue to own the Footwear Market in my opinion. Let me give you the perspective of an exsell Side Research structure. Heres how it works. Okay . School us. Im schooling you right now. Ive got an analyst that works for me, says and the analyst follows footwear and apparel. What that analyst has in their quiver, they have nike, under armor, lulu, adidas. Ive got to recommend one. Nike is on the down slope. Their time to market has extended. Nothing new is coming out. Im going to go to under armor. Its more exciting. Despite the fact that the multiple and the valuation is egregious, and theyve had some missteps. Its what people want to hear. Im just not a buyer of it. As the analyst, thats what ive got to recommend. Ive got to have something to talk about with my clients. What are you buying, though, on the other side . I dont have to buy anything. We got the other side, and you have that sell side experience. You are buying it for your portfolios on behalf of your clients. Of those four, which one are you buying . Now. I dont have to because im did there to make my clients money. What you do is im going to buy footlocker. K on. Because its i like it. The multiples are, like, 12 or 13 times, 14 times versus 66 times, and i dont have to pick the winner between nike or adidas or puma or anybody else. Right now do you want to be buying the consumer . It i dont think this is the part the point in time where you really want to be buying the consumer. Now were starting to see other leaders take a leadership pentagon position. Theres better places to be than the u. S. Consumer right now. Game on. Just ahead of the shopping season, that is just ahead. First, though, melissa lee has a look at whats coming up on power. A big two hours, scott. Thanks. Banking on the banks. Jp morgan, citi, wells fargo all beating expectations. How to play the sector right now. Fed chair janet yellen set to speak about the economy. It could be a market mover. Well be all over that, and Consumer Sentiment drops to a oneyear low. How the shopping season is shaping up. All that and much more top of the hour on power lunch. Meantime, halftime comes right back after this quick break. Have to do that from my phone. Ei we use tons of data. I really dont have to worry about it cause everything is unlimited. I need data and i need it now. Its the end of data limits for your business. Get unlimited 4g lte data as low as 30 bucks per line. Switch your business to tmobile work. When whirlpool builds an appliance, they put everything they know into it. But once its sold, there usually isnt a way to keep improving that product. Today, whirlpool can analyze iot sensor data from connected appliances on the ibm cloud. So they can continuously learn how customers are using their products. And how the machines respond. Harnessing data to make great products better thats what the ibm cloud is built for. Harnessing data to make great products better its not just a car. Its your daily retreat. Go ahead, spoil yourself. The es and es hybrid. This is the pursuit of perfection. Still zbreen on wall street. Sue herrera has the latest news headlines. Hey, sue. Hi, scott. Heres whats happening this hour. Medical personnel have traveled to remote areas of haiti to treat victims of hurricane matthew. Families bringing their injured to be seen by doctors. The hurricane left 1,000 people dead and a trail of destruction. Israel suspended corporation with unesco a day after the u. N. Agency announced a draft resolution that used the islamic name for a hilltop that is sacred to jews and muslims. Iraqi special forces gathering at the frontlines some 25 miles from mosul ahead of a planned operation to retake that city from isis. The u. S. Led coalition is increasing air strikes in and around mosul as Iraqi Ground Forces are building up. Dole and disney have launched to feature characters like disney, pixar and marvel. They encourage their kids to make healthier food choices. Thats the cnbc news update this hour. Scott, back to you. All right, sue. Thanks so much where are. Our options have spotted something unusual. As whaed to break, take a look at this weeks top performers in the s p. There you go. Halftime report back after this. [pony neighing] what . Hey gary. Oh. Whats with the dogsized horse . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a live person right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on thinkorswim. Only at td ameritrade. Man, im glaaflac c pays cash. Isnt Major Medical enough . No whos gonna help cover the holes in their plans . Aflac like rising copays and deductibles. Aflac or help pay the mortgage . Or child care . Aflaaac and everyday expenses . Aflac learn about one day pay at aflac. Com boat blurlbrlblrlbr remember here at ally, nothing stops us from doing right by our customers. Whos with me . Im in. Im in. Im in. Im in. One, two, wait, wait. Wait wheres tina . Doing the hand thing . Yep we are all in for our customers. Ally. Do it right. As you know, dr. Day has his fingers on the pulse of options. Seeing some unusual trades today. Doctor at the telestrator seeing what . Riteaid, we see really big trades going off, and in particular, this drug company only trades probably in the average of maybe 2,000 or 3,000 calls in a given day. Today it just explodes. Take a look right now. Its trading 7. 07. Thats about 10 cents higher than where these calls were bought, and look at this. Almost 25,000 of those, judge. What is it . April 7 calls. The at the money call, out in april. Stocks 1 off the 52week lows and about 2 off the 52wreak highs. Is it m a or Something Like that . I didnt see anything on the wires about it, judge, about ut this one definitely was moving and the fact that as you said at the beginning, it was down about 14 over the last week. Maybe thats one of the reasons people are doing it. Are you in it . Yes. Im in both stocks and options, and ill probably be in for quite a while in the options because they were all the way out in april of next year. Interesting, doc. Make your way back here. The last time we did this, when you were here, you bought a stock based on some of this unusual activity that was in trexon. Jon is a smart man, and i must say i did end up bike intrexon after hearing you talk about it last time i was here. Thank you very much. Oh, good. Im up about 5 from that day. I would have been up a little bit more, but that presents an opportunity because its down almost 2 i think today. I still think theres tremendous opportunity. They have modified mosquitoes in ten brazilian cities. U. S. Government please get us these modified mosquitoes to release. Hurricane matthew, i mean, hurricane comes through. Theres water. Right . Thats sitting. What does that cause . More mosquitoes. Intrexon is ahead of the curve relative to the competition. I dont even generally own biotech, and i thought this is an interesting opportunity here, and i think its down a little, and even more today worth getting better. I dont know how you feel about it. I dont know if you recall what the unusual activity was at the time. Im trying to recall, judge. Its an unfair question. It was basically ive been in the stock for the most part since about 23, 24 when meg ter l was talki el was talking about it, and i got into the options just as you are saying on the unusual activity. Took off half of them when it traded through 30. Im looking at reloading just like youre talking about. Were thinking the same way. Frooekt appreciate it. Should we leave . Perhaps. Its a chicago connection. Got it. Cramer. Somebody gave themselves enough time, april of next year, for this particular trade, so could be exactly what jim is saying, but they wanted more ti time. As usual, judge imy has his finger on the pulse of everything. Yes, he does where. So do i. I bought that stock 50 cents and sold it at 1. 50. How is that for a great trade in. You made money, right . It was a great coming up, did someone say oh, Merrill Lynch is making a bold call on dominos. Time to get a piece of the pie . Thats coming up in the blitz. A look at the s p sector heat map. Halftime back after this. 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 lets do our trader blitz. First up, Merrill Lynch, upgrading dominos to a buy, rising the price target as well. Sitting in for josh brown as the food correspondent today. Hes out in san diego. 175 is the new target. From 120. They took it from a hold to a buy. The stock is not making a tremendous move today, but it moved up about 3, pulled back year to date. Still like it, yeah. Like the stock. Like what theyre doing. So great call. I would stick with it. Steve, activision, outperform. Puts the quality sort of stuck at this level here. Management did sell half their stock. Started selling the management kicked out half as i said. I got rid of the rest of it. The best stage is still ahead of the company. It is just gaming is not fully in my view it is not fully into the culture. And it is going to keep going and going. I would be a buyer, keep waiting for a fullback. Growth next year, double earnings. What do you make of honeywell . Dave cody with cramer saying he was wrong. I think it is a well run company. You got a couple of things that cause the stock to come down. Cody is retiring next year. Secondly this stock trades at 15 times earnings. It is going to grow. It has a huge tailwind with aerospace, and by the way, 25 of its revenues will start coming from china as well. I like the stock. Back through some names that youve been sort of shopping for. Blue chip, really. Cocacola, png, walmart. Why . I started those positions a year or so ago when those names just got hammered and we all know they shouldnt have. Ive been sitting pretty pretty. Adding to or looking at where coke is right now, it could be an interesting add at this point. Theyre doing some incredible things just from a marketing perspective. You still have the strong brand name. I think they still have potentially some room still to grow there. I think what im doing there with my clients always taught me, a diversified portfolio. You have some staple blue chip names in there and growthy names to help you get the pop. But these guys are tried and true for me for a while. Can i take the other side of that . Why do you have to ask permission . We have to be nice sometimes. Youre going to be not nice . If you look in the last 18 months, the rotation has been dividend substitution. And if you look at one of the big things that people say is why are all these companies with financial engineering, theyre raising debt, buying back stock. These are classic examples. Theyre multiples have all gone up, way above the market. If you look at any consumer staple conference, everybody is talking about png, coke, et cetera. I worry that just as a reversion to the mean, even though they do perform now, people will move money out and into other sectors that can do better because of valuati valuation. We know this market unfortunately has not been moving off of valuation. It is just kind of been all over the place of late. So i think, you know, even if they do shift some out of it, if we get back to fundamentals and stock picking like we talked about, i think that they still will hold a smaller position than some of the core names to have them in that portfolio. I would caution that. We own some of these as well. Just worry that when that happens, you can be too late and the other things happen. So other areas, erin, real estate . I think the market now is irrationally selling anything with high dividend yield. Since brexit, they have underperformed by 20 . Thats an extraordinary amount. So im buying and picking up value right now in some of the high dividend yields that have underperformed. Utilities screen well for that, reits screen well for that as well. But i think that the market is fearful of the december rate hike and in my view, the rate hike is going to be a nonevent for markets, slope has been brought down in terms of the potential rate hike and now is the time to buy the high dividend yielders. Utilities are not exactly fairly valued. They were the valuation was truly in excess territory because of hunt for yield. Right. Just coming down to more of a normalized valuation. Yeah. And i think thats right. I think that this is a trade, but i think the underperformance youve seen and just the puking of positioning in some of these high dividend yields now just to me doesnt seem rational. And i think that people are extrapolating that one hike is going to kill the dividend yield in trade and i dont think thats going to happen. All right, we have some heavy hitters reporting their numbers next week. Watch for bank of america, mcdonalds, johnson johnson, well talk about those and final trades next. Is it because so many go after it the same way . Chasing after short term returns. Instead if getting caught up with the crowd, the Investment Managers at pgim take a long term view, teaming specialized active investing with riskmanagement rigor, to seek out global opportunities. We manage over a trillion dollars this way, attracting many of the worlds leading investors. Partner with pgim. The Global Investment management businesses of prudential thiswell we thought geench programmed machines to talk. Ge is an Industrial Company that actually builds worldchanging machines. Machines that can talk to each other digitally. Hello . They dont talk to each other like that, ricky. Shhhh, youll anger it. He looks a little ticked off now. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Welcome back. Join us for a big week next week on the Halftime Report as we celebrate our five year anniversary. We have lined up some of the biggest investors in Business Leaders around to talk markets. Well talk volatility, everything in between, politics, set et cetera. You see the list, carl icahn, tepper, lasry among others. What do you want to hear from this group. It is a great time to hear from them where you feel like markets could be at an inflexion point. Here is the beautiful thing about that group. We all know a lot of them that theyre able to concisely and very clearly take all these cross currents and more than ive seen throughout my career and distill them into cogent thoughts. And tell you where they stand and perhaps where you should stand, which should be thinking about. So thats whats most exciting to me. We talk fairly regularly, so for him to share that, and a high point of the week. But why theyre coming, though, scott congratulations, that was five years, congratulations, theyre coming on because you do a great job. You guys and the wall are the reason we even made it this far. So were excited about that. But gun locked on the fed, always entertaining. You underscored it, though. These investors have a knack, they dont get everything right, but more times than not theyre able to cut through the noise and help people sort of understand from a real actionable point of view how to look at these markets, how to digest geopolitics, the political situation here in the u. S. And all of these currents as you said and make english out of it so we can all understand. Get to the important stuff, the clarity of thought process. Good stuff. Thank you so much. Power starts now. Happy friday, welcome to power lunch, everybody. It was a Strong Quarter for americas biggest banks. Jpmorgan crushing expectation, wells fargo also beating but wells has a lot more going on than just earnings. Were going to dive in. Dont let your guard down. There is potentially market moving headlines at the next 30 minutes when fed chair janet yellen speaks in boston. Call it warrens war. Senator Elizabeth Warren went after wells and now wants big changes at the top of the s. E. C. What she wants and why she wants it as power lunch starts right now