Everybody on the desk likes visa. Yeah. And with good reason. And you cant fault jim for saying what he did considering what the stocks continue to do. Oh, certainly. I mean, these are two bellwethers really in terms of getting financial exposure you know, we had long talked about, well, how do you get the financial exposure do you look at the Big Five Banks . There were moments when we questioned and were skeptical about that but never did that with visa and mastercard and now youre witnessing specific with visa as it relates to europe, thats really gaining momentum right now. Its an environment where you think about it, scott, just with retail sales kind of suffering, visa and mastercard are still doing well im long visa. A lot of us on the desk are well im staying with it. Carrie, you own visa, up 38 year to date and mastercard up 42 over a year they tracked the same mastercard has outdone visa and in that roughly the same pe. Anything not to the like here . We still like visa . We think theres 25 upside to the story. Peoples tastes have changed where they buy things have changed but in terms of using credit cards, thats growing, and the kind of platform visa has built is sustainable and we eeoc expansion of global growth. Still like the stock here. Why not mastercard. Why does everybody choose visa over this other . More expensive. I would agree with that, and when you look at the actual growth trajectories of visa, they are absolutely astounding when you look at the International Growth i mean, i know what were all focusing on here but plastic around the world, we all know that thats the currency, everybody is moving towards that and you look at the International Growth just in the last couple of quarters, absolutely stunning when you lock at the numbers. They look like a tech company. Exactly. Look like somebody in the cloud space or something the way they are growing. As cramer said they are fin tech companies. Absolutely. How about the Fin Tech Company paypal, judge . I know youre not going into a store and dragging plastic with paypal, but when you look at the performance of this one versus visa, versus master, of course, versus American Express kills them i mean, its 72 misversus like 38 for visa and 42 for master or vice versa i might have flicked though. Nonetheless 72 for paypal its just hitting high after high after high and continuing this monster run. Paypal and ebay, by the way, get price target increases today over at morgan stanley. And i would not be surprised if visa when they report this quarter if its actually very conservative guidance so if youre in the stock and you do see that pullback, i dont think you flinch for a second. I think you stay with it, and if it pulls back you buy it but this could be a quarter where historically you see some guidance. I have nobody that would buy mastercard, too. I like the european exposure to visa. If i wanted to do something other than visa right now it would be American Express, and i think its because potentially that has a much better ascent to the upside than mastercard ive already got mastercard with visa except even better so why not go to American Express. For the analyst who made the call, donald fandetti, resuming coverage on that, senior analyst. Donald, you say American Express is your top pick in this space. Yeah, we do you know, you guys hit on an important point. Obviously, you know, the market likes visa and mastercard. They are good spectacular trends but we think American Express is the one to own right now if you look back, they have gone through essentially a perfect storm over the last year or two, and we think they have regained momentum here. You have 2018 Earnings Growth going from essentially flat over the last few years up to the 10 to 11 range look, where we could be wrong on this is on bank competition. If you look at chase and these other banks, they are going aggressively into the card business, but thats been going on since 2011, and so we think that theme has peaked from a stock perspective, so we do look for a good quarter next week when they report, we think revenues could come in a little higher than expected and thats our general view at the moment. Im not trying to make it an either or thing when it comes to visa or mastercard, it seems as though the investors on my desk today have made it that saying visa is the better play. You do say you have a prenchts for visa over mastercard why . Yeah. So, look, i think visa, you touched on a little bit earlier, visa is cheaper if you look at the valuation, they have some upside potential from the visa europe acquisition and so the other thing to keep in mind is mastercard at a recent investor day boosted their guidance so the stock reflected that visa could play a little bit of a catchup as you report earnings, and as you think about earnings coming up, we do think that they will provide guidance for 2018 and fundamentals are generally good for these companies. I think what investors like is the consistent visible Earnings Growth 18 to 20 for these companies the real big question right now that we say investors focusing on or debating is, you know, valuation and also are there newer opportunities in these emerging payment areas such as b2b or businesstobusiness and persontoperson payments thats a much larger market frankly than their core card payments business. Don, i mention what jim cramer had to say about both of these companies, visa and mastercard lets listen in fact what jim had to say about it this morning. Heres cramer. Al kelly has upped the game of visa. You know, what can i say, mastercard these are two of the greatest stocks of our time. The point hes also making there is Charlie Scharff leads visa and you think, okay, maybe theres going to be a pullback maybe theres a some kind of misstep in the transfer of power, so to speak it just hasnt happened. Yeah. I think, you know, al kelly obviously is relatively new, but he has a history he was at American Express for many years look, the reality is the companies boosted guidance over the last few quarters and thats been beneficial. You know, al was on the board at visa so it seemed like a natural move for him to step in, and i think, you know, the important thing here is that the sort of the tail winds from a secular trend are still pretty powerful. Thats really the bear case, right, if we come in and investors say, you look around the world, theres a lot of digital emerging Digital Companies if investors come in and say, you know what, theres going to be intermediation risk or some sort of regulatory surprise do you have to watch that on these stocks because they work for so long. Theres a little bit of complacency thats arguably built into the marketplace. Don, ill let you run thanks for joining us. Really appreciate it. Thank you. Don f andetti. The economy improving. Visa stands out as best in breed, mastercard closely a close second pete brings up a great point thats been some run in American Express since 2016 i think the stock was down to 50 and has recovered once again. The costco day. Right. That was never forgot that. Absolutely. And the stock could not recover. No. From the announcement about costco not using exclusively American Express anymore until how many months did it take . A yore. To jump start. It was in purgatory for quite a long time and, unfortunately, for them they could never find their way out of that and now suddenly, judge, i think obviously as weve watched the Economic Conditions get better, and we heard larry fink talk about that today with blackrock, thats a good backdrop as well for American Express and people are seeing that strength ive got to tell you they are the one thats left thats got something other than just transactions right. Checks and cash still account for 85 of transactions, not credit cards but when you look and everybody kept looking at google pay or apple pay or whatever, paypal is still positioned to really dominate in that space they havent done it yet as far as on the mobile side, judge. Axp is 16 times versus double that of mastercard and virtually double that of visa. Yeah, and theres three other names were not talking about, capital one, discover financial and sink any and all three of those names since American Express has recovered since 2016, those three have underperformed capital one maybe has a chance to kind of ride along with American Express and have a little bit of outperformance but dont expect any of them to give what you visa and mastercard have. The s p, nasdaq and russ you will all near record highs today, and weve been hearing how tax reform and Solid Earnings could take stocks to the next level but today on squawk box blackrocks larry fink brought up another potential rallying point. One of the greatest pops we still have in the world is how much money is sitting on the sideline even in places like japan, theres 5 trillion of cash earning negative return. In germany 72 of the savings is in a bank account. Were seeing some of that unlock were seeing people putting some of that money to work. Okay. So, i mean guy who oversees 6 trillion in assets or thereabouts, when we speaks in terms of what he sees in terms of money flows, its really important to listen to what layer fink has to say, doc. People have been not so much hating on the rally. Hes been somewhat cautious for a while, at least it sounds back. Everybody is looking for the pullback, not that the germans are going to be as fast to throw the 72 that he mentions in the bank at the stock market but certainly americans are going to be positioned to throw it in a lot quicker into a lot more liquid markets than the germans have, but i think its just that we havent had that significant correction to bring people in. What gets people to come in then, is it really going to take that is that the only thing thats going to get all this money that fink talks about off the sideline no. What drives the market is really Earnings Growth, and what weve seen so far this year is very decent Earnings Growth, and the Fourth Quarter should probably have 12 growth in earnings for the s p and virtually every sector i would say 11 of 12 and i dont know what the 12th would be would have up earnings and thats really what we need and with global growth, expansion in europe, japan is starting to look a little better and china solid. I think that youre safe to assume that theres not a recession thats right on the horizon, and, therefore, we can feel safe moving into equities and using some of that cash that really has been sitting down and youre getting nothing for your cash i hear you. Its easier said than done though i think mr. Fink uses the right word and problem it is a problem. What is going to get the money off the sideline how can you convince somebody at a record high market every day of the week . They are competitors. To put that money to work. I dont know. If were talking about cash returning, i think repatriation is more important. Conceptually theres a tremendous amount of cash on sidelines and then ive heard from so many people over the last five years, well, theres nowhere else to put your money except in the equity market because the return environment is so low. Its the only place, to so is there really that much cash on sidelines . I think that kind of conflicts with each other. I think what wed be more important is capital coming back from the ent prior space. When someone like larry fink says, it black rock and the amount of money that they have in assets under management, sounds like a real issue. Yeah. It it sounds good because larry is saying it if i said it you would laugh hat me. Well, you dont have 6 trillion in asset. Thats why you would laugh at me. With all due respect, and thats exactly why you would laugh at me. Perhaps blackrock has advised an Asset Allocation thats too high in cash right now and hes now thinking that were going to move people more towards equity markets even if its international. That will help the market rise have you all sorts of asset allocators that have been in too much cash. When so many people tell us about the exuberance of the market and how they are into that market, and yet you hear somebody like larry fink and the folks out there, the real numbers prove out thats not true, people arent in the market, they continue to miss it and wait for the pullback and the pullback just hasnt come, judge. Weve had some really shallow pullbacks on these pullbacks nothing of any significance, and so the cash just continues to sit there on theline. Well see what happens in the next few days because banks earnings are on desk tomorrow we hear from citi, jpmorgan and on friday bank of america, wells and pnc lets trade these names which have obviously done well citi up 11 in a month and jpmorgan 7. 5 , bank of america 10. 5 and wells tand pnc the sae 10 . Historically they were so cheap. I was reading mike mayo, our friend who happens to be over at wells fargo, han he was talking about how theres still a third of the normal valuation that you see on these companies doesnt mean they have 33 upside from here, but certainly means when youre shopping and youre looking for a deal, many of these are still a deal. Right. But the fact that the stocks have run so much over the last month alone, the bar has now gotten a little bit higher that they have to get over in earnings. So ive heard you guys talk on desk this week about rotation, and theres literally been a massive move into financials in the last month you set up so an the market is up 3. 5 , so weve clearly had a move already anticipating good earnings, good numbers whether they have moved a little bit too far too fast were going to you know, were going to see what the market does, but i i wouldnt be surprise federal theres another shift in rotation over the next couple of weeks and we might move into another group thats suddenly prominent. Fed holds the key here in the future of where rates go, tax reform all of this matters . You dont think it matters no, the fed i dont think has mattered in a um coo of year, i dont. I hear you on that, but they are arguably more quote, unquote relevant today than they have been just simply because they are normalizing excuse me normalizing policy in a way they havent in a very long time. But weve normalized rates four times and havent real seen the impact on rate i think its a much larger dynamic which is the deflationary impact of technology i think to your point though what does matter is who is in charge of the federal reserve. I think thats something that maybe could be a quasishock to the market. Pete, you still love the banks. And would you admit though, maybe a different point of view. Do you think the 9 is too much i dont think it is, but the bar has gotten higher for earnings as a result of the stock move. Absolutely. Some of that has been slowly building in, especially as weve gotten closer. If you shrink it down and take a look at when did the banks really start to take off, its been in a very short period of time as they have been running towards this earnings, and its going to be exciting to get the jpmorgan numbers tomorrow. They are going to be good. City is going to be good bank of america is going to be good and then everybody will have to evaluate how good and was it good enough wheres j. P. Right now, 90 bucks and change, does it go to 100 . There it is, unfortunate under 97. And citi is because if it goes across 100 then, does it have added momentum or does it pause like weve seen in the financials so many times. I know what youre talking about. The breakthrough number, or is it the resistance maybe it get through but makes people a little kweesy theres a lot of chart at the bottom of the ocean. I look at the fundamentals and when you look at the fundamentals of whats been really going on, jpmorgan, led by jamie dimon, has done everything right, and hes projected exactly where they will have the growth and the sectors and segment where its strong and hes also told us where its been weaker they have been a bank thats navigated this very well its far more important to say when is it on a price versus book rate . On friday were marking this down writing it down, jpm 100. In ink. 100 in ink, jpm 100. About seven, eight months youll see citi there, too. Says pete, says pete, right there. Thats you. I see it, brother you could probably add two or three more names to that thinking it gets above 100, but pete is talking about fundamentals youre talking about the fed and rates. Were not even talking about the lifting regulation, and i think thats kind of invisible and very difficult to see what the impact is on the bottom line, but i think its receipt i think its a real phenomenon. Dont you think thats why the stocks have moved the way they have . I dont think to date, no i dont think its priced in i dont think the lifting of regulation by Financial Institutions is priced in, no. I think some of of it is priced in. I dont think its all priced in, and certainly the big piece that isnt priced in is the tax cut. I honestly dont think that the tax cut is priced in and that could lift will the s p another 7 or 8 on the earnings level and thats part of what have can drive the stock. Im coming back to you then joe. What is priced in and why have the stocks done what they have done since the election . I think theres positive assessments and to come back at you, if we priced it in you cant come back at me. Whats the threshold for vosifi, everybody comes on and says sell the regional banks what if they take the sifi level down. Two were downgraded yesterday. We dont know that, thats all. Just getting started. Heres what else is coming up on halftime. Next up, a massive wave of price hikes for the bank stocks. How high can they really go, and if youre not already in, is it safe to dive in now . Plus, the analyst who says ges dividend is in trouble were talking with him live straight ahead the Halftime Report with scott wapner and the traders is back in two minutes your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyf