Capitol Hill Facebook hashares down 10 in te past three months. The risks facing the stock all in on apple. Two big price hikes. One, a new street high its our call of the day microsoft earnings after the bell the stock outperforming all the fangs over the past one year the traders take their positions. Halftime report starts right now. Good to have you with us on this wednesday our investment committee, joe, stephanie, the brothers najarian were going to monofacebook. A hearing going on on the hill there mr. Zuckerberg another big dayfor earnings steph, you own caterpillar missed they cut guidance. China story. This is b about weak demand in china . Well, it is, but nothing theyve said today was surprising and if you look at the sell and buy side, earnings estimates, theyre around 11 so the midpoint rath eer is about 10 48 so its not that much off. They destock 1. 2 billion of invenntory in a years time. I like the risk reward and the stock reaction is telling you everything you need to know. You hear cramer this morning . Hear jim say its a tough stock to own it is its not easy. When numbers are coming down and you have, its a you know, its all about china and the global dprout and that has been slowing down but thats not surprising. The stock is trading on the new numbers at 11 u times forward estimates. Giving you a 2. 8 dividend yield. A Quality Company with a good Balance Sheet so again, the stock reaction is telling you bad news is already priced in. No one else owns it, that says a lot i dont own it, but i thought they had a lot of good things to say on the call so to stephs point, i think it looks brighter on the horizon than it has look ing back over the last six months what i heard them say was that stimulus that china is now applying is going to manifest itself next year in 2020 that was a very positive projection and something i think that with sales in china down 8 , year over year because thats what the numbers showed, they made up for that with a lot of big sales in north america. In latin america and brazil and so forth but if china does come back because of the stimulus being offered, judge, thats very bullish for these guys retail sale s numbers for september accelerated 200 basis points and thats very positive. At least the moment it was going in the right direction when youre looking at this one, caterpillar, obviously the stimulus youre talking about makes total sense. Why dont i own it right nowrfo. Why im not in a hurry is i think itsweook at the asian nus a pretty easy read through, but the reality is if you believe that the trade war will get at some point or another, well see some sort of an a i agreement here, then this is one of those stocks that i think absolutely has unblooelievable upside i think its further out this stock is going to be 20 points higher. But i dont think in the next couple of week, maybe not the next couple of months. Why hasnt the move in this stock reflected the overall optimism about even if its incremental in trade has pushed the market within its highs. Caterpillar hasnt done anything its a class colossusal disappointment there are points and pockets in time when you want to own this thing and i think august, it got way oversold and a ik basted on where the numbers are headaching out right now, youre talk iing about a r very, very cheap stock. You have to own some hard stocks to make money. You dont want to be all in where everybodys at i know. There are others you own you dont want to pull all your hair out, right doc, look like us ge is like im fine with ge. Now cat some point i actually have my cost basis is right here. I know. What about boeing . How coyou read boeing, which you own as well . Obviously the max is the story the stock chart suggests keeping the timeline in tact they get this in the air, the stock is going to be a lot higher its not as cheap at caterpillar, but cash flow is the key and 2020 it sets up for a better cash flow year. Like 32 a year in Free Cash Flow next year is what im expegting and thats attractive. How about honeywell ceo, double digit bookings gains in china, middle east, latin america. Europe was up nearly double digits im reading what the ceo said. Up in germany and the u. K. One of your favorite very strong message, but yes, i did sell the stock last week and im fine that i did sell it. 178 was the high in july a stock right now pricing around 169. 5. I think this industrial conversation is a very interest ing conversation as it relates to the overall marketplace ive used the term i believe the eck quities market is a coiled spring ch i think the industrials market and names like caterpillar and boeing is giving evidence to that. Nothing changed in caterpillars report inventory glut asias bad mining, oil and gas is lousy we knew that in july with caterpillar, but yet the response to the stock, its telling you that bad news is now priced in in the industrial space. You think about buying it back then . Even with boing im not going to buy caterpillar or honeywell because there are opportunities im finding in the industrial sector that was that i was not able to find six to 12 months ago so i love the housing theme how about an industrial contributor to the housing theme which is masco thaifr going to report ive been in cintas. You want to buy a stock thats strong take a look at waste management. Get it at 116. Thats been a stock over the last year thats been incredibly e resilient in the industrial space so theres other areas of the industrials finally where i think you could find opportunity. I think that lends a very positive message overall for the market and i think it offers you a little bit of distinction to wait for the caterpillars and boeings to rightfully come back. They will. Let me lock at another stock that missed and guided well below estimates, too, thats Texas Instruments. Pete, i want to come to you first on this. On pace for its worst day in a year yep its a little bit off the worst of the session, too. But its getting ripped. Really what is down to is the guidance they gave was awful. That was it. But look at where their exposure there ar to be in Texas Instruments because of their exposure and times you dont want to be got autos, industrial, all of that that is something theyve got to deal with and theyve got to be b able to navigate that themselves and i think people are looking at that thinking again this is another one of f those with the industrials, we were just talking about that any kind of deal any kind of movement to the positive this is going to be very bullish for tex. Ill give you a teaser if you want i got a name in the semi space im going to be doing for unusual activity thats not texas instrument, but has a lot more different ways that its exposed and its much more towards what people are doing with themselves, with phones and everything else. So pete makes a good point and one cramer was making, too, was that dont look at texan as a read through for whats happening in the chip space. Theyre in difficult businesses. Yes and too often, we do that last week, fedex last week everybody said hey, oh, boy, thats a prbarometer of everythn going on ups came out, didnt seem like they had the same deal completely different its how youre navigating and sometimes we overread these and say you know what, this is a barometer for everything out there. That was a great example this is a company thats much more focused theyve done a better job of the transition, where they are ups, versus their competitor just take a look at those charts jim said look at terror dine. A name like that theyre the ones that are up sharply today and you can go ahead and sell some of the names, you can sell on semi. You can sell nxpi if dont like what texan delivered i bought more nxpi. But the idea of terra dine. Ive owned it gave it away way too soon, but thats the equipment story and what the semis right now are about. I think weve talked about in the last couple of months that we wanted the exposure to sesem semi equipments. Its about the logistics its been a masterful winner youre going to get another semi equipment name, which i am long youre going to get the report for lam research thats front end semi equipment, but id expect youll see continued d strength jim said dont sell amd, if you do, shame on you theres maybe a thought you look at a Texas Instruments and say okay, im going to take that name out take that name out hes like whoa just to do that pete said about you know, dont throw the baby out with the bath water more or less. This one, terror dine did exactly the opposite of Texas Instruments. They both beat on the profit side then they cut it by 20 those are two Companies Going in opposite directions. Doesnt mean its a no touch means youre going to see a few days of pressure on this this one. So cramers point about the nx prk i, steph, tell me why you bought it today. They made an an wii sigs. You have synergies from that theres upside to margins given their cost structure it trades at 12 times forr ward estimates and i think those have been for the most part derisked. I think part of Texas Instruments issue is that it was kind of a safe haven and a lot of people were hiding in the name yeah, they have auto and industrial exposure, but a lot of other end markets that are doing fine they never took down the write down from huawei they actually built inventory over the last four quarters instead of reducing it like some of their competitors, so ipg there are some specifics that you dont want to extrapolate as saying auto and industrial are hosh i think there are pockets where you can make some money. Smh up 30 year to date even with this follow through on the bad news from texan and the other movers still like chips i do. There are certain names that obviously today were talking ab it very specific names. Aside from individual names, would you buy the smh . No. I want the equipment names there was a time i owned the smh and that was the time to buy it. You want to be selective and specmi is a big component but id rather just own tsm the actual smh we told you we were monitoring the hearing on capitol hill. Mark zuckerberg continues to testify there. Elon is in washington and with us right now hi, elon the hearing is in a brief recess after zuckerberg testified for about two hours. Election security, privacy, competition, political speech, housing, diversity. All of these issues are front and center now on the main topic of the day, libre area. Lawmakers on both sides of the aisle sounded skeptical and didnt trust facebook could get this right here is republican congresswoman ann wagner why are they deported scores of stable partners have dropped out. Why . Congresswoman, i think youd have to ask them specifically. What do you think they dropped out . Because its a risky project and theres been a lot of scrutiny yes, its a risky project zuckerberg said later that he would be willing to leave the Libra Association if it did not get clearance from u. S. Regulators, but he said he hoped the crypt o currency would be able to move forward and framed this as a race with china. He said if facebook and libra delays, china will move ahead and america could potentially lose its place at the Global Financial innovator. Im told Mark Zuckerberg has noy is now continuing. Thank you outside the hearing room in d. C. Lets stay with fang trade because might have bumped up apple. 289. Katy huberty did that today. Another all time high today. She talks about apple tv plus and going into that whole word Going Forward, not anytime immediately, yes, 2020, into 21, up to 25 shes got a great vision and its the same she had when we talked ab services and growing and theyre taking a bigger and bigger piece of the pie with a lot better margins for apple so thats going to be good but then you bring up the wearables, which is another 10 of what their revenues are when you look at what apple doing, its the verticals and this plays in. The tv will add that much more and you know what, they can spend the money. We know about the cash flows one of the things i thought was interesting. Ive never looked at the stock in this way, but when you add the dividend with the buybacks, youre looking at an 8 yielder on apple a pret thety big number when you look at what were looking at now, we talk b about the ten year all these different bonds, all this stuff, thats something thats significant and theyre going to continue to do that theyre going to continue to buyback and eventually i would guess theyd raise up the dividend how about the deal with roku . It was on its backside and slipped here and there since then but that deal with roku basically distribution of apple and its products through the roku platform. This is going to be huge i think. And i think it will be very positive for both xacompanies. Thats what both stocks are telling me so i really like what they did there much like i dont know exactly how much because its not been expressed how much the verizon deal with disney will end up costing to give 12 months away to all these verizon users, but i like the roku move a lot have you been to the 5th avenue store yet its all about customer attention and the service. I was in there yesterday afternoon. Sat there loork ed at all the products ill be this, that, every product is offered i looked at the watch. To me, what apple is is about. Its ability to retain its customer i believe the retention rate is around 92 okay maybe youre not going to innovate if thats what steven weiss thinks about the company we all disagree. He going to call in we may disagree, but ill tell you what. While theyre waiting to innovate, the rest of us will sit there and wait wee not going to leave and xwo somewhere else thats the remarkable story about this company. 289 is not to jean muster she hasnt you know naileded it the whole time. No, but shes been pretty good and not jumped off the ship, either, scott. When shes shifted off, shes run it down mildly this is a big jump from where she was to this 289 level. Too optimistic . Especially if you want to, people will eventually start pricing this company differently and i know you brought this up many times a lot of people talked about this one is it a Hardware Company r or what is apple . Where do you categorize apple Going Forward and i think that changes the dynamic a lot. Thats why 289 isnt that high bernstein goes to 225 reiterates the market. Other fangs. Alphabet price target goes to 1700 from 1500 at credit swees recently have been trimming twitter and also facebook. I just like the risk reward into the quarter. Theyve got a great product that we know so i think i dont have to get much right for the stock to continue to work. You mentioned twitter let me jump to, we ready if r julia . Lets go to julia on twitter she has something then well talk on the other side hey, julia. Yes, twitter fall uing to session lows ahead of earnings tomorrow before the bell now twitters move lower continuing its downward trend this month comes after social media stocks are very much in focus. Mark zuckerberg testifying on capitol hill about facebooks efforts to launch its crypto currency, but hes been pressed on a number of issues that would also affect twitter. Said the responsibility for content on the platform and Election Security as well as political advertising. Snap shares its worth noting, theyre also down about 5. 5 this morning after yesterday they reported better results, but the move low er reflects th fact that snaps guidance for the Fourth Quarter was lower than analysts anticipated. Come up tomorrow when twitter reporting before the bell, not only will their user growth be this focus, but there will be questions about what they have to say about all of the you know, political scrutiny of twitter and whether or not any of these talks about regular lace will be impacting the company. So thats an area to watch guys, back to you. Proeshuate that were talking about alphabet steph had mentioned twitter. What about alphabet . 1700 doesnt seem out of reach not one ive owned 500 bucks not one that ive owned for a long time. Theres a paradigm shift. Theyre finally doing what many have called for them to do which is the apple model of going back and aggressively buying back their stock. Its something that over the last couple of years, alphabet has been deficient in that strategy relative to an apple, but now theyre getting aggressive with it and if that works, theyll Gain Momentum both technically and fundamentally. It has. Really has. 20 year to date actually on the screen now to my point. What about amazon price target you know bufferin add litt bumped a little bit. 30 bucks at bmo. Just to finish the fang trade. I still like it i trimmed it but i still thind on fire and so im holding it as a longterm secular story. But its a small position for me relative to where it has been. Doc, amazon ive not been there enough so i kick myself for that all the time scott, but ive never been a guy the whole deal because i look at it as aws, but the e commerce side sh, the margins arent there. So often time, ive taken advantage of the fact that when they go into someone elses category, theyll push it down and i think thats always ended up being buy reporting tomorrow. Its remarkable to me how out of the headline the business headline now is is in terms of stock performance. I dont think the expectations are there. Its market cap is below a trillion kodollars and the prio four quarters, the stock has not responded positively its as if we dismissed amazon from a conversation when it was preimminent in all conversations. Thats not going to, thats the interesting thing will be if microsoft and see what microsoft says theyre doing versus them in terms of wars theyve got going on there because if they start eating away more and more, scott, thats the margin business thats the only margin Business Amazon has so because of that, thats something to keep very close eye on we are going to take a quick break. Heres what else is coming up on the Halftime Report. Just hours after under armour, nike also announcing a major shake up at the top, naming a new ceo what it means for the stock from here plus, we want to hear from you. Send us your questions at cnbc. Com halftime. Or tweet us using ask halftime the desk is answering them straight ahead the Halftime Report with scott wapner and the traders is back in two minutes welcome back President Trump making a statement from the white house on what hes calling the big success along the turkey syria border he says he is liftin