Transcripts For CNBC Fast Money Halftime Report 20240711 : v

Transcripts For CNBC Fast Money Halftime Report 20240711

Lets begin with a check on stocks lets welcome in brian belski. Thank for having me ambitious call. How do we get there . This will be a transition that takes several months if not into the year you, well into 2022 the unprecedented price moves in 2020 are going to turn into, we think, unprecedented earnings move in 2021 we think financials, Consumer Discretionary will lead the way. Were maintaining our stance of being neutral on technology and Communication Services over the next three to five years theyre by far our favorite sector in terms of growth we think this is going to be a turn around in terms of Earnings Growth theres no doubt that the vaccine is helpful, no doubt stimulus will be helpful, but theres also no doubt we are going to have more stayathome orders in the United States and therefore the stayathome stocks will do very well the bull market continues, we continue to believe that march 23rd, we dcontinue to believe that march 23rd was the controlaltdelete were bullish with respect to 2021 and well see how this transition into more of an earnings driven market for 20222023 means on returns but double digit returns on a bull market are very normal and its all part of this transition into normalcy with regard to equities these will be backloaded gains, if you will we have to get across this bridge from here to the vaccine, see how quickly it takes hold, how people return to whatever sense of normalcy really exists, right . Because its going to take a while for all of this to fall into place, brian, before we can get that doubledigit gain its a great point, scott thanks for bringing that up. I dont think we add any kind of value to be making four to six weeks calls. People april justidjusting thei for year end 2020 i dont think brings value to anyone the Technology Stocks in particular, 40 of the market, Communication Services and tech and so you are going to get a push in these stocks higher and the momentum in there and thats going to drive the market higher remember, too, scott, were going to get a stimulus bill right after the new president is inaugurated and i bet there will be a piecemeal deal until then the market wants stimulus, will get stimulus but Price Performance i think will be a fits and starts type market this year im not talking about four to six weeks. Im looking even four to six months when. You have jpmorgan come out today and say they see negative q1 growth because of the virus, does that make you rethink in any way how you view the market . It just speaks to what im talking about with this sort of slow move to normal. Absolutely not. In fact, if youll remember, i was on your market turmoil show at 7 p. M. Eastern on march 23rd when the majority of the economists and world were saying we were going into the Great Depression and i told you stocks were going to be up 40 , what i wrote that day on a Research Report economic and macro data has been dead wrong for more than ten years and our macro mode eelling has been wrong as well the next ten years will be about bot mtoms bottomsup stock picking, a return to the 80s and 90s. Wow thats an interesting call steve weiss, do you want a crack at our raging bull i sure do have you made any kind of bets in terms of whether the democrats control the senate, they control all of washington or they dont . The world will look a lot different if pelosi is casting the deciding vote. Clear up how you see that playing out. Well, steve, im polish so ill go in reverse order if you look at our size and style comments in the report, were equal weight, growth and value, equal weight, there are no reserves with fundamental trends telling you to be in either one when you look at cash flows and earnings you have to maintain your position in stayathome stocks, which are 40 of the market. That fits into more of the broadening out of the fundamental perspective. We grappled as a group in terms of putting out this yearahead piece without knowing the blue wave we will adapt and improvise if we see a new wave. The makeup of your portfolio has to change if we have a blue wave were betting were not going to see that and we have position accordingly for the next 12 to 18 months. Shannon thanks so much for this you talked about fundamentals. For those of us who sit here and think about fundamentals for a daytoday basis, weve been definitely discouraged by the fact weve seen quantitative factors dominate portfolios over the last few years where are differences . I think you have to apply themes themes are lifestyle amazon is the behemoth in the sector but you talk about peloton and lululemon and t. J. Maxx is a theme with respect to adding things to our homes in terms of the home goods store they have. Home depot, starbucks in terms ofli lifestyle themes. Stayi staples is a fantastic theme were probably going to get an infrastructure bill and some capexfinally a finally you have to look from a bottomsup perspective and look at products and services and valuations on a stockbystock basis. Thats how u going to beat the market its most interesting your call to 4200 most people who are positive the market in general could see a route to get there on the other side of the virus, all the pentup demand thats going to be there i do want to question you, though, i mean you are going all in on the reopen with financials upgraded to overweight, industrials double upgraded to overweight and then technology downgraded i can see why you would say industrials are going to do great. Make the case for financials, though, and also tell me why im supposed to not believe in Technology Next year why is that not going to work . I find that hard to believe. Great point but i think its too simplistic, scott, because if you think about a sector, technology at 27 or 28 of the market, youre going to maintain your position. Thats a really big position and were going to do that if you take a look at our sector weights, were not wildly over or underweight if i was only a portfolio manager, i would be neutral every sector and just pick stocks but we have to make a call with respect to the industrial call, we were wrong to be underweight in august and september. That was the wrong call. We think from a cyclical perspective, you have cyclical high pes in cash flow and return on equity beginning to recover thats exactly when you want to buy a classic cyclical area. We do think well see a rapid rebound. With respect to financials, the worlds most hated sector for ten or 12 years, we think our institutional clients around the world are massively underweight. In the theme for financials, it has to be scale. Banks, Asset Managers, brokers the bank of americas of the world, morgan stanley, black rock, those are the groups to be in its great to get your opinion. Thanks very much. Brian belski, thank you very much youre going to get 15 more in 2021. A lot has to go right for that to fall into place i totally agree, scott. It is an extremely bullish call. He makes some very good points, though one of the questions from my perspective is what area of the finances specifically . At the end ehe did plug in its combination of a lot of things, Asset Managers or banks, and so for the. We often times put out too much in financials. What do we mean about that are we talking about banks, Asset Managers what area of financials are we talking about . They all can move differently. Ive been expanding my financial portfolio for a while now. Its gotten a little bit bigger and a little bit bigger. I continue to want to look for other names that i think have plenty of room to the up side. I think this is a bold call, no doubt about it i appreciate also sort of the stepping back and understanding the miss on the industrial side but coming back with this double upgrade, i thinks plenty of room for that area as well the industrials have plenty of space to climb to the upside and so the industrials and in my opinion technologies, that is s attainable fairly easily. What if we do have a negative quarter it start the year, even with the vaccine coming hopefully not too long after that, what does the market do in that environment in. Theres no doubt in my mind that we are not out of the woods by any stretch youve done a great job of outlining that week after week in terms of what we still have in front of us and the different hills we still need to climb but i think we can still have some volatility and Something Like that would create some of that volatility because i do think we could sell off. But then off of that selloff and as thanksgiving start to progress off of that, i think we could see sort of a pretty significant move to the up side off of that. But i dont disagree with jpmorgans call because i this i that i this i that is a possibility in the First Quarter. Jenny, i turn to you, somebody who takes a deep breath, sits back and aprssesse the situation in front of you. What do you see . Jpmorgan makes a really good point. When they say the First Quarter may be weak, they say but the economy will expand briskly into the second and third quarters. And thats really important, that brisk expansion in the second and third quarters. Scott, you keep say being we need a lot to go right and a lot of things need to fall into place but we all know that the market doesnt wait for that to happen the market moves ahead of that if we take what belski is saying, we know the market will expand briskly in q2 and 3, we have a pretty bullish setup ahead of us. Im thinking about the difference between sectors working and sectors leading. As we talk about technology and brian saying im going to neutral on that, it doesnt mean the technology is going to start to fail or doo po poorly, it jut may not lead i think its just going to march along. Other sectors hes upgraded like industrials, financials, those might start to lead and they have been leading since the beginning of september and more significantly this quarter i well like, weiss, we almost need to have a conversation about the two worlds its like the here and now and how were going to make it from here to january 20th, for starters, could have a very messy situation between now and then, how the markets going to deal with that vaccine starts to get rolled out. You have the, you know, a georgia runoff between now and then if the democrats win the senate and youre able to get through whatever you want to characterize this transitional period as, the market is going to be in a really interesting place to try and figure out what the policy is going to be. I could easily see a negative scenario build for stocks as belski said with the idea once again of this blue wave. Yeah, thats true and i dont think belski is making a very courageous call. The most courageous call on this show is pete wearing that vest id say what were going to look at Going Forward is a new indicator for the market that indicator is not going to be jobs, its not going to be stimulus package, its going to be how many people are taking the vaccine and when the vaccine gets rolled out. Those are the two numbers were going to see, production and uptake because thats whats going to drive it. So it is a perilous period now, although im very bullish on the market if we get the blue wave coming on january 5th and hope we get results that day, the 6th the latest on the Senate Results in georgia, youre right, that could dictate market direction the market will continue to look through covid in terms of escalating cases, the tragedy happening in every state because is the market going to be able to continue, steve, i apologize, to look through covid, as you said my god, we may do 200,000 case as day i cant even believe im saying that number. Doing 185 now. So you get this escalation in cases and if it becomes more clear that Consumer Behavior pulls back and jpmorgan is right and you do a negative print in the furst quarteirst quarter, wo start going back into recession, the markets going to be okay with that . No. Well, i think that the market, there will be periods of volatility, translate that to periods of selling off and that will be opportunities to get back in. I think youre on the cusp, with the vaccine again, of a synchronized Global Economic expansion we havent seen as opposed to the global synchronized selloff is the recession. So there will be some tough sledding were going to see the pictures more and more. But the memory of the investor is that, hey, if we sold in march, it was the wrong thing to do, look at the recovery we feel pretty foolish i dont think you test the lows. Could we go down 5 or 10 . Without question but you dont trigger your tax bill by selling companies that continue to be winners i think technology is going to win. Technology is not pcs and laptops. Technology is in everything we do from cars, you just name it, smart cities, smart homes. Im comfortable. I can sit through the volatility jenny, if youre looking a year out, say your horizon is a year and the way that you view the market and invest for your clients, why wouldnt you want to go all in so to speak on the belski plan of double upgrading industrials, adding there, finally thinking that financials across the spectrum are going to have a good run of it and go in there and other areas of the reopen and the cyclical trade . I think once youve set aside whatever cash, whatever safety net you need to make sure you can get through the next year no matter what happens, i think you do go all in on the belski plan or something close to like that. I think the sectors and companies hes referring to, they are not up 25 this year, theyre not up 12 theyre kind of in the dumps just, is willing back to one other thing, getting through the dark period where there are 200,000 case as day, it is different. And investor memory, Everybody Knows it was stupid to sell between march 18th and march 23rd and you would have been better off buying. I think that keeps a floor on whatever fear ekes its way in. I think the feared is going behihindsight is 2020. If we get it again really quickly, were going to learn. Its just not as scary weve learned how to continue to live in a much more robust way than we were doing in april when everything was shut down your point is well taken. You are buying a stock that is reflective of your point of view as well. Fortress transportation and infrastructure can you tell bus thus about tha . It has a nice yield. In is interesting the bulk of their business is in Aircraft Leasing and aircraft Engine Leasing its complicated and messy it has a really good yield you cant look at the earnings, you need to lock at the Funds Available for distribution, but its neat because can you look at it and say, whoa, their business was impacted negatively from covid but, you want to say was the negative impact by covid permanent or etpisodic . And in the case of Fortress Transportation and infrastructure, it was episodic. Going forward not only is that likely to return to normal but as the airlines are cash crunched, theyre much less likely to buy aircraft, theyre much more likely to lease. It the same as when you buy a car. You kick the big cash outflow down the road by leasing thats what theyre going to do. Not only did they survive this period and this was the ultimate test of the strength of that business but theyve got to set up for very positive revenues and cash flows ahead im ex about that and love the yield. Jen theres a very important point i got out of that call from bmo and that is were not looking for a value rotation weve talked about the need for breadth across the market over the last six months or so that it couldnt be this binary rotation out of communication and teleCommunication Services because its going to go back and forth. I think jenny really hit the nail on the head here, is that we are in a different environment. We have this bias with what happened in march and april. I would caution i see more opportunities in the continuation of the manufacturing rebound versus relying solely on the Consumer Spending rebound the difference between march and april and today is that in february we had these massive manufacturing supply chain dislocations and so we were extrapolating police officering meltdown for the next two to three years based on covid19. Were not seeing that. Were actually seeing reaction sell racial reacceleration this behavior response to covid will result in lower Consumer Spending but between the sentiment tail wind and monetary tail wind and manufacturing tail wind, were setting ourselves up for dislocation, a smaller correction but a rebound into next year. Pete, i want to talk to you about a Broad Spectrum of stocks, amd and iq, if you want to tell us across the board, scott, the one that stuck out the most for me this past week i have purchased was the xlf. These options did go out a little further in time this actually goes through the end of the year. Just some big paper coming in there, skrcott i like the flows im a believer it broke away from the 25 that it seemed to have had a magnitude, finally broke to the up side and now seems like we have a little more runway. Names like marathon, too, stand out. When im looking at the energy space, we are seeing so much option paper coming in there on a daily basis i would say we have four to five to six unusual activities that are hitting on a daily basis. I think there are specific nation that i think have a little bit more leverage than others that can move a little bit faster thats why im selecting some of those. Iqs, chinese names, i thought there was an opportunity there so i own some calls there. Just sort of playing across the board internationally and in the oil space weve watched a lot going on of late we started to see crews get back toward that 42 level again and seeing a nice participation across the way, not just chef ron but others as well weiss, you added to industrials last week. I did my exposure is so growth and technology oriented, i just wanted to get some exposure. I added lyb. I had freeport im comfortable with those holding us because i think theyll continue to trend up going in line with the economic expanse well see. It will be volatile near term but i like them. I added to some existing posi

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