Transcripts For CNBC Fast Money Halftime Report 20240713 : v

CNBC Fast Money Halftime Report July 13, 2024

Were off the lows nasdaq is green. Russell is green dow is down only 160 the s p is down. I mentioned crude. I know its jarring. You look at that number to the right hand side of your screen down 43 crude sinking more into the abyss. We do have big earnings reports out this week. Well discuss all of that. Pete, dow and s p are on track for the best month since october of 2011. Now were starting another week. What are you doing in the market today . Its probably one of more active days. Last friday when i was on with you, that last three hours of the day, it seemed like an opportunity to me because we had that the last hour we moved 300 points in the final hour of trade. We talk about these other things, the computers and Everything Else. That is probably what was working to the upside on friday. Its a little bit better its still part of what we have been seeing which is the nasdaq and the nasdaq outperforming when we were down about 2 the nasdaq was down less than 1 as we started to move to the upside, we could see the nasdaq going into positive territory. Were seeing bit of a continuation of still coming after some of those big names in tech if you go down to the semiconductors, but im seeing a lot of strength and buying we have seen buying, buying. Everything was buying calls, buyibu ing buying huge sizes across including some of financials as well. Josh, pete said we have seen buying were well off the lows. The action today, if youre positive the market has you feeling pretty good, i suppose tom lee says the control has shifted to the buyers. He said we have written about frequently stock Market Recovery tend to be v shaped. Maybe we need to start having that conversation in the context of does the stock market reflect the overall economy and most people are saying no theres no way the stock market should be where it is when main street is where it is. Tom lee says you can have a v shape recovery in stocks even though main street can have a much decidedly different shaped recovery where does that leave us as we embark on a fresh week here. What were likely to get more news about the virus who knows, bad, good or otherwise. We had this up two straight weeks. Now what at this point in the rally, we now have 40 of s p 500 names back above their 50 day shorter term moving average. A month ago the number was zero. We have only 23 of s p 500 names above their 200 day. Still less than a quarter of the market is back in what you would consider to be an intermediate term up trend. A lot of healing has already happened there two things im watching that i think are notable. First is the xrt name, maybe we ran out of sellers for retailers, theres a lot of resilience there i think thats so encouraging. This is interesting. The xlp is up on the day thats the producers its not enough place to store all the oil we have. Even the mlps are green now. The fact you cant even find sellers of oil stocks given what the underlying commodity is doing today, i think that points to another piece of evidence toward what pete said at the top of the show. Yeah, the buyers have continued to prove themselves. The thing im most focused on, new york case, new cases dropped to new york deaths dropped to under 500 today. Thats from over 750 days ago. That number continues to improve from where i sit and im biassed. The new york numbers had to have declined in order for me to feel better and better that we have seen the worst in march. That is happening. Im most hopeful that leads to a speedier opening of the economy. Shannon, what do duo in that context . Do we believe in this market do we think its a sucker rally . What are we to do . I think you need to be careful about where you place your what im hoping is that some of the resurgence that we see will benefit those of white house have been looking for high quality names. Investors looking at company who is are well situated, even if we get that resurgence that they still have enough capital and enough Business Savvy and execution to move past that over the next three to six months i think as long as the exuberance is well placed, i continue to think theres opportunities in the market. Steve, what do you make of this of control having shifted from the sellers to the buyers an idea you can have a v shaped recovery in the stock market even if you dont have a v shaped recovery in the economy he says think of it this way, businesses will seek cost engineering. Its labor cost is the single highest cost of a business if gdp is weak, labor cost will be low thus cost engineering will lead to better margin, thus eps recoveries will take place in a slower top line environment. Does that make sense to you in any way . It makes sense that we could have v shaped recovery in the market because thats what we had. Were back near the highs. Josh gave you somestatistics i still dont believe its a v shaped recovery. I think the market is given the economy a lot of credit. Some credit doesnt deserve for how quickly it moved what the market is focusing on is youve got massive stimulus on the show last week but stimulus doesnt work. Just look at japan and europe. Its exactly where you should look in japan and europe because stimulus has worked there. If you look at a 20year trend, until 2018 the market was moving higher why . Because of stimulus. Were having more stimulus here. The only thing comes down to is what youre timing how long youre willing to way until we see the economy start to show signs. I believe we will open the economy. Perhaps sooner than we should. Worry about a relapse but we should open it were managing money for most of america they are very, very tough spot. They need the income well see that the market is also looking at that havent done anything today. Friday i did a little bit im very comfortable with my exposure im about 80, 85 in tech. Tech im diversified across. That will continue to work i cant decide i dont want to look at p and g and say people are shaving more now because the master catching to their beard. How much more soup will they buy. I dont want to get into that. I dont know im looking where the Business Models are in great shape. T the Balance Sheets are in great shape and it will continue i want to get back to pete real quick as active as you are, pete, i want to know where i know our viewers do as well. Friday into the afternoon, i sold a lot of Different Things not because i hated the stocks nothing changed about my sentiment. A lot of them were hitting the right triggers gilead is a great example of that i got out of netflix and lgb when the market is down to 300 points so not too terribly far from where we are but lower, i saw all kinds of opportunity i dont want to give away the unusual option to you. Ill give you one thats not there. Square we had some huge buying in square thats one of the names i added. Across the board, most of them were Technology Type names i think ill wait until later on for the unusual. Give or take, thats the area i was seeing the most activity and where i wanted a jump on as i look through the unusual activity side, yes there was some financials. Ill give you one, the xlf somebody bought 25,000 calls in the xlf in one single print. When i say theres some bullish paper out there, there is. I bought some of those thats not going to be unusual i found more and more opportunities today. Specifically, today i probably traded more today, this morning than i have in the last week in first three hours of the week. A busy day a lot of different areas to joshs point, Technology Related and semiconductor related. Now we go to mr. 10 . Hes sitting in 10 cash its good to see you you too im going to ask you every week where your head is as to where the market is. If you look at crude oil today, you could have said this market will be down down big the dow is down 500. Its battling back wheres your spsyche right now if im generous with myself, i say im being boring by not doing anything if im realistic, i say im wrong by holding that 10 cash i got to look at myself in the mirror and say what do i believer common sense is telling me were not done with this bear market if we dont get a 10 retracement, which i expect, this will be the shortest bear market in history. Shorter than 887, which was three months from peak to trough common sense tells me were not done common sense on the per speckive of social distancing tells me were not done because even as we reopen, were going to keep, at least six feet away from each other. Thats going to hurt airline, hotels, casino, restaurants, sporting venues, everything. I dont think were out of this yet. I think the stimulus keeps us from testing the lows. Ill be more interesting when the s p is down in the 2500s i know that makes me boring right now and arguably wrong im going to stick with that man tr tre for now. What do you need to see before you start putting that money to work . A bit of realism in terms of what earnings are looking like we still have estimated above 150 or right at 150 for this year i dont think thats right i think this year youre looking at a 125 or lower. Im waiting to see analyst estimates come down as we go through this earnings season i think youll see more reserves piling up. Lost reserves in the Financial Sector patience is a virtue but it m e makes me look boring now by that logic, and thats fine obviously your point of view will shape what you do you may be sitting on the sidelines for month and month and months youre not going to have any realistic view on what earnings could be for many months were in ternings abyss and next quarter is likely to be an earnings abyss as well i dont see that getting anywhere towards clarity any time soon. If you think about normalized earnings, you have to put 2021 in the conversation and some have suggested you may have to go out even further than that. You may be sitting on your hands for an awfully long time if that is in fact, what youre waiting for . Scott, all i can say is ugg, to myself. There theres no clarity on it. The Analyst Community thinks were going to be better than ever in 2021 i just dont buy it. You say i could be sitting on my hands for months, youre right but i dont think so i think as we go through the next two, three weeks of these earnings what ill call realism will set in. I have to be clear, i dont think we go back to the lows because youd have to really be fighting the fed, which is bad idea if you think youre going back to the lows a 10 decline is very routine in a bare market. Very routine you get a bear market rally and trace 10 . I think at that point in time ive got to say whatever the environment looks like, i need to step up to the plate at that point in time and buy. I understand. Lets bring in our special guest today. Howard marks joins us. I hop ye you and your family ar safe and well. Thank you its nice to be on with you to bring some regularity. It does feel like some semblance of that and thats a good thing for the moment. I want to talk about your latest memo i was to talk about your previous one first because it contained a line, it got a lot of play the day kbroyou put it t its the line i no longer feel defense should be favored. Can you expand on that and whether that was your call, lets talk stocks first. Were you making a broader call on where we were well, i think the important thing is that its not healthy or helpful for people like me to say buy or sell. It has to be what you should do. It has to be a if you think of where you were now ive been very defensive in recent years now that the cats out of the bag, we know what the catalyst for, bad times is. Asset prices are lower most people are engaging in risky behavior those were my complaints leading up to this i dont think you have to be as defensive as i was the credit markets had become dislocated to some respect people are finding opportunities. Can you differentiate between the two Asset Classes and tell us how youre thinking about each sure. The comment was a general comment as to overall portfolio constructions. In general, however, i agree that there have been and are very good opportunities in credit although, like Everything Else less than they were in midmarch. In general, im less constructive about equities than i am about credit. I was listening to your previous guest and i found myself in agreement. To the extent that earnings estimates are now to the s p are now 150, i believe that last year it was 158. That means earnings down 5 . If you get to 170 next year for s p earnings, that means better than 19. Will next year be the greatest of all time . Hard to believe. Seems hard to believe do you think the stock market is ahead of itself right now . Are you surprised where we are yeah. I personally think so. Were only down 15 from the all time high. It seems to me the world is more than 15 screwed up. I do think that the world is ahead of itself and again your previous guest talked about rallies and corrections and most bare market rallies have seen corrections in a recent memo i showed the movement of the stock market post the tech bubble bursting and post the Global Financial crisis and in those periods, we had rallies of 19, 2 22, 12 and 25 we also had a bigger relapses. This has gone pretty much straight up and it took century years to get back to the 2000 high it took five and a half years to get back to the 07 high in late 12. Is it really appropriate given all the bad news in the world today, we should get back to the high in only three months. That seems inappropriately positive how does that view square with a general comment that you said you were making by its no longer time to play defense or have things just changed enough since you wrote those words that they are no longer applicable to where we are because the stock market had the run its had. That memo came out, as i recall it was like april 6th around there. Its been wo weeks and i think the market is up eight or so percent since then. A rise of 8 can be the difference between wanting to be defensive or not just remember, remember the context. What i was saying for somebody like me that has been highly its necessary appropriate to be highly defensive anymore i still believe that overall, i think it applies less to equities than it does to credit. Understood. Let me ask you about your latest memo which is titled knowledge of the future. Here we arein market events an markets like the we try thisy to look back and say in x, y and z, the market was able to recover based on where the economy was and with e swe say a will give us an idea about what the future will tell us about the current environment were in does that work in something that is so incredibly dislocating as this event has and will continue to be or is it a fools game at this point to try to look back i bring that up powered in the context at the top of the program we said in prior instances the stock market has rebounded with a v recovery in this and that. Does any of that make sense given this particular crisis thats when i was a kid we used to call that the 64 question, scott. Number one, all we have to do all we have is reliance on past patterns if we ignore past patterns then we have nothing because we have to make it up as we go along we should not overestimate the pattern. We have one of the worst Public Health crisis in 100 years we have the worst economy in 80 years and the worst unemployment and so forts and on the other hand, the biggest fed and treasury rescue program that anybodys ever seen. My conclusion is very simple if you havent seen it, you cant say how it will turn out you can site past patternings but you should not rely heavily. Is the fed enough to overcome the things that you just said . Well, thats what were going to find out, isnt it. Your previous guest talked about not fighting fed thats been the slogan for a long time. Generally speaking we figure that the fed can do whatever it wants. The fed and treasury are throwing out enormous amounts of money. We were going to run a trillion tl dollar deficit this year in prosperity, which i think wasnt a great idea now its going to be cleoser to four trillion. They can do what they want they can put money in everybodys hand i said why dont they send a check to everybody for a million dollars. They could make everybody a millionaire. It would only cost 30 trillion. Would there be a down side for that i dont know might be for our childrens children and their childrens children we used to think there was a down side to having a deficit. Used to think there was a down side to having National Debt now people became comfortable with those two things, debt and deficit in reasonable amounts. Now, i must say, the fed and treasury are acting as if they are okay in any amount of course, its important to rescue the economy and the people in it we dont want people to go hungry and so forth. Mustnt there be some consequences for running up debt that high. Theres no past to tell what you say the impact will be well find out steve weiss, did you have something for howard i do. You make an excellent point we havent seen Something Like this before so we cant opine what the conclusion is. Looking at the package from 2000 and 2008, they didnt compare. Were talk about going from Budget Surplus in 2000 of about 250 billion to a deficit of 150 billion or 4 of gdp combined. Here, were seeing something thats 25 to begin with go to 50 . When you take a look at that with where rates are in conjunction, i know your focus is on distress and debt but does that give you the comfort theres a backstop no matter what when the dialogue continues to be well do whatever it takes to keep the economy going. Additionally, they acted much earlier in the crisis than we did in 08 and 09 this is a really good example of one thing i put in my memo. In every case theres a bold case and bear case i think you gave an optimistic case im not saying youre wrong but you gave an optimistic case. You can rely on the fed, blah, b blah, blah how do we choose the answer is its our biases. You sound like an optimistic guy. You found a positive case. I cant argue with it. Im a worrier. To me, i say, how can so much be wrong and things turn out so well thats why i say well see tcan i follow up with one thing . Scott, im sorry howard, doesnt it then come down to what your time horizon is whether its three years or five years versus whether you want to be optimistic or pessimist. Im generally in your camp, by the way. A worrier. I think the time horizon is very important i would indicaticaution everybos watching the show, i care about two years. I care about five years. Its your reality. The reality of your life can you live, survive to see five years from now or do you have to worry about ha things like next year and the year after. For you and the organization you invest for, most of my clients are institutional, allow do the equities balance should you worry more

© 2025 Vimarsana