Transcripts For CNBC Fast Money Halftime Report 20160106 : v

Markets and whether its that disappointing pmi number in china overnight or that north korean news. Investors are in a sell first mood yet again today. Stocks dropping right from the get go. Remaining under pressure. You see now the dow is down some 200 points. 1. 25 . Each of the major averages under significant pressure today. Dr. Jay, i go to you first. I mean, people are making a big deal about north korea and the impact that ago on the market. The nuclears test, stooefb just tweeted out a great chart about it. People should take a look and see what the reaction has been after north korea has tested nukes. Nonetheless, people did perhaps china and whats more interesting to me, scott, is earnings. The earnings season just about promised. That is far more of a driver than a one day event like were seeing right here. In other words, fed and the north korea both full of bluster. Not going to matter. Trok at the 20year or the 30year rates. Take a look at tenyear rates. Kevin oleary, you are a buyer. I fwrae. North korea is in everybody is throwing sanctions on forever. I hate to say this, but they dont really matter other than they give you the opportunity to enter big names that get volatile when they do this test. Weve seen this movie before. This year just screaming out for attention. This is a child thats starving to death. Its really tragic its happening to its people, but when it does while it you can get big names, large cap names selling off 3 to 5 , and if you go back historically, 90 days later, well rewarded for doing it. You have to hold your notices. What kind of names are you buying . Are you buying names that are specific to the european and asian markets more so than here in the United States . Look, im a rulebased buyer. I said this case its etf company. Today we loaded up on samsung, toyota, west farmers. Added more today. These are large asian names. Theyre not necessarily hong kong. Theyre australian. Could be singapore. The point is the whole region got really kicked yesterday. The only difference this year is im going in unhedged. I am going in naked. That means the american dollar is peaked out. Steve weiss. I agree that some other regions are as attractive as the u. S. Weve increased our position in europe. We were about 25 at the end of the year. As of january 1, were now about 3 a5 in europe. Our managers all did well despite the euro stock 50 auto being down 6. 7 . The reason is theyre not playing the big names. They derisk for a chinese standpoint as much as they can. Theyre in the you are seeing real growth there. Last weekend a bunch of european entertainers came out, and they were pretty much all positive. For the u. S. Were focused internally. We dont want to play big multinationals because to me china is the biggest concern. A devalued yuan. Im worried about china. I think its just a house of cards. One more, scott, because i know you love these factoids. I do. I do. Their debt load is more right now than their industrial profits, and their debt actually exceeds mexicos entire gdp. I want to stay on sort of what how u. S. Investors should be reacting to what is taking place in china. A note from you caught my attention a couple of days ago when the manufacturing pmi came out. You said dont sell risk based on that number. The services pmi is more important. That disappointed. It disappoint. Fortunately it was about 50. China becomes the real focus. I had two speculators call me, and theyre loading up on the short side. Investors like these guys are saying i like this dip. Someone is going to win this game. I actually the fact that i dont want to upset my colleagues here, but here theyre going to be right. Weve seen this movie before. Its the first week of the year. Toipt see if that number comes in at 200, we know the u. S. Order is fine. Fisher is telling us its fine, and then i think the European Data will equally back that up. You think the longer betting people are going to be right . I do agree, but i have a concern here. The wall of worry is forming here for all the things that weve talked about, including north korea, which is going to be a shortterm blip. The problem is the stock market doesnt seem to be climbing the wall of worry. I agree i do think companies are doing really quite well. You are looking for some sign of life. Some sign that the stock market can overcome this wall of worry. I do think its going to happen, but the longer it takes, the more concerned i get. It indicates besides laub, there isnt that much driving this economy. Proof is in the pugged, too. If you look at the date wra from our partners at kenshow, it does show you that when you have this kind of unrest or concern about whats taking place in north korea whether from gold, oil, high yield, after that fact, the market does sent to brush it off. Thats what this the more well ask our managers to increase their net long position. Right now theyre a little lower. About 40 or so. I would like to see them up 50 . Markets dont go up unless theres something to worry about. When they do start going up, because of euphoria, thats when you want to run and hide. Most expectations are that Dividend Growth is going to slow to Single Digits this were in the United States. Is that one of the reasons why you find attractiveness elsewhere . I look at overall pes first, and right now i think whats going to happen this year. Its nothing. Its flat. Had you mined for the growing dividends last year, you got 3. 2 expert juice. 320 basis points that nobody else got. I love dividends, and di denned i trust. In cash i believe. I think thats going to be the same issue. I have less fall youll have more returns. Stick with dividends. You dont have to just own utilities. Lots of companies have shareholders like me howling at the moon saying give me return of capital. Heats what i want. Zou tell us about that. Exactly, scott. Let me just go through what the guys were just saying. Fisher agrees that fujdzly the u. S. Economy is okay. Hooin is an issue, which is uncertainty. It wont derail the fed. If the weakness spreads, its something worth watching, as was north korea. He thinks the u. S. Is doing just fine. He agree with oleary on the issue of the dollar. The dollar cannot fall forever. He is with the stabilization in the dollar in year, and he agreed with me when i said, you know whashg the sep, the feds own forecast calls for four rate hikes this year. Is that your view, i asked him. Heres what he said. Those numbers are in the ballpark. Otherwise, we could meet in january and close down shop until a year later. We have to react to incoming events, and we will react to them. We got some things that happened today, guys. If you take a look at our cnbc rapid update calculated by moodys. Com, which is the tracking of growth. We got the trade deficit numbers in today, and were tracking down again. Now at 1. 4 . A really wide range of economists for the past quarter. The Fourth Quarter there. You can see the high end 12. 3. Morgan stanley, 0. 4. Goldman sachs at 1. 7 . That offsets some of the weakness weve had. 257,000 jobs announced by adp for the private sector. Well see if that number comes in strong. Thats certainly something thats going to propel the fed. Scott, i had to guess, i think the fed would give pause in january and if the economy can gather some steam and these tracking numbers look more towards 2 on the first quarter, that the fed could go again in march. The interview everyone is talking about today. Steve liesman, thanks so much. Steve live for us down in d. C. See you back at hq. Thank you for joining us. Much mosh with the gang. How low can apple go. Virtually reality headset kicking off just an hour ago. Can you get your hands on one . That is the question. Were going to ask that of the ceo live from the Consumer Electronics show. And drowning in oil. Brent crude now at an 11year low. Energy stocks plunging yet again. How to trade that. Youre watching cnbc first in business worldwide. Wir back. The rocky road for apple continues thus far in 2016. That stock falling deeper into correction territory. Is the stock a buy now, or does it have further to fall . We have two bulls on the desk, and our next guest has been consistently bearish on this name. Ian is the cohead of equities joining us live from l. A. Welcome back where. Thanks for having me, scott. You have been pretty much dead on in this move. How low does apple go, or is this it . I think it takes out that flash crash low in 1992. Ive been telling people tactically to cover onethird of the short here. You can put it out a little higher if it trades back up. Strategically i think its a core short. Whats the deal . Is it fundamentally an issue or technically broken or a little bit of both . I think its more fundamental than technical. I tend not to look at technicals too much. Fundamentally i think you have lapped peak margins, peak earnings, peak refr new growth and probably peak iphone shipments, and you still have a situation where china is a big unknown and getting worse as we saw this morning. You take out the cash . Its cheaper than, what, cisco oracle, microsoft, ibm. Is it a question whether its a value stock or not . I think thats exactly what were arguing over. Ultimately a lot of that cash is overseas to begin with, and second, youve got based on analyst estimates, which i would argue are too high, you have high single digit Earnings Growth and Revenue Growth for the next couple of years. Is nine or ten times earning that cheap for a stock like that . I agree sometimes things can look leak a value trap, and maybe thats what you are saying about apple. The thing that has me enthusiastic here is the amount of cash thats both on the Balance Sheet, and i do understand thats overseas, but the amount of cash that it generates. I think scotts point is that if you strip out the net cash, net of debt, this thing trading at nine times earnings, well, that cash is real. Thats almost about 30 of the market cap. Isnt there a point at which the cash just becomes too attractive to ignore . Yeah, i think there is. That point is probably around 90 or 85. Its definitely a great it should be about 40 then. Thats okay. Its a tech stock that was a growth stock that still has a market cap of 600 billion. Its not like youre buying a stock that ultimately has all this growth in front of it. You are buying a stock that where the best days are over. Its a tech stock. You know, value stocks and tech do not work in my experience. You do have a pretty good battle developing over this name. The app store had a Holiday Season for the record books, apple says. Two weeks he believeding january 3rd. Customers spent over 1. 1 billion on apps and in app purchases. Are people just getting too haywire negative on a name like apple . I would say this. You still have 85 of the analysts who cover the stock have a buy on it. Now, theyve cut their estimates. Theyve cut their iphone estimates. At the end of the day everybody is still loving the story and thinks its a stock you have to own. Thats actually still pretty built in, and its the same thing im hearing at 100. Some bulls are on every day saying i cant take it anymore. Im actually downgrading the stock. Then i think you have an opportunity to get more bullish on it. Good luck with that. Exactly. Well see you soon. Thanks, scott. Ian over at wedbush. I tripped this name on a rule base last september on this cash issue because the company is flush with cash. Unfortunately, its 40 away from you overseas. When i started to see that happen, thats deterioration even though it sounds per volunteers a Balance Sheet, and we exited the name in september and loaded up that position in microsoft. We talked about it. It occurred that week. You dont always get it right, but this one is really worth it for us because microsoft has outperformed dramatically. Apples problem, i think from the fundamental point of view, is i love a name with this much cash. It will have to issue debt, which will make its Balance Sheet look worse and worse over time. Then the other thing which is a ces kind of situation is i talked to guys in this name, and theyre starting to talk about apple as a Consumer Electronics company. You dont want to be there. Thats when you really get pe compression. Thats when you Start Talking about trading at seven times. Ill be back in this name at 85, 82, 83 because its not going to i got to wait for that, and i think were going to get there. Im sorry. I think theres another issue here, and that is if you take a look at that recent product announcement, what theyve done, going back to apple radio, apple music, its really not done anything. Its not set the world on fire. Its been disappointing on every, every what did you think . It was going to sell as many of the iphone . That wasnt my expectation. It wasnt that it will continue on the market. Its not going to be nearly as high as most other apple products. I cant get active pulse. I cant its a pain in the neck. I wouldnt use it. I liking to back to this whole cash issue. Youre right. This is what he was saying. The cash is overseas cant be repatriated without being tied. Good word for it, by the way. Its unfair really. It is what it is. Theyre taking to task that issue. Heres the point i really want to make. I think that this gets the wrong spin the whole debt issuance. Really what theyre doing, you could say that theyre issuing debt because they cant access the cash overseas. What i look at it as is theyre issuing debt at 2 so they can buy back their shares, which are yielding on an earnings basis around 11 . Thats actually smart. I like that. Do that all day long. Trick the share count. I believe the last one standing. Is apple going to be closer to 75 or closer to 125 . Ill take 125, but with one cavat. This close to 100, and you know im not a technical trader. Close to 100. It does want to suck down. Its going to be several hundred. Its going to be near 85, and then its going to have guys like me looking at it. By the way, who gets the Financial Engineering these days . Nobody. Thats the problem. I agree with your strategy. The market does not reward you for that. Weve taken our when they came to dif depped share buyback, it didnt help the stock. Thats not what people own their stock for. More bad news for the energy bulls. Gasoline prices surge. Well head to the futures pits for the trade. Heres a look at some energy names hitting 52week lows today. Eog resources, marathon, murphy, and hess. Back right after this. Good afternoon. Initially that draw in crude oil inventories, a lot of the traders thought it would be bullish, and weve had a negative reaction. Anthony, break that down for viewers today. Really understand whats happening in the crude trade here. Yeah. Last night when that number did come out, we did actually show a little positive numbers in crude oil. Once north korea tested that weapon, that was it. The markets sold off. Its valuing equities right now, and you pointed out that gas supply, they took crude oil and turned it into gasoline, and nobody bought it. You saw a five million draw in crude oil and ten billion at gasoline sfli. No one is use this right now. A lot of reasons for crude to sell off right now, including worries about china as well. Whats going to happen to the crude oil trade here . A lot of the traders i speak to are talking about that two handle again. Yeah. They are, jackie, and certainly, you know, anthony talks about the demand where they turn the gas on and no one really bought it, and so you see that weakness. You see any commodity based countries like brazil, like canada, australia. Their currencies are weak, and then you get the trade data from china that makes matters worse that shows globaling demand is sort of weak here for oil, and i think thats why you are seeing oil trade at the down side. You are seeing volatility tick up in oil. Were making lower highs, higher lows, that is new york the Oil Volatility index. 30 oil like i talked about earlier in 2016 is certainly a possibility. Maybe coming sooner rather than later. Okay. Well be watching, swre. Thank you so much. Well be there. Thank you so much. How do you view Energy Stocks here . Ive been wrong on this. Last time i said he was going to then invest in Canadian Energy plays. Sun core is a good example. Very interesting play going on there. Theyre acquiring a competitor kyled canadian oil sands. I was hoping to get a piece of that. You look historically. Its still correlated to the commodities. Its like leverage. It goes up, and the Canadian Dollar goes up. Thats why i not working yet. Im still going to ask the position. Heres what im thinking. We dont talk about this. Lets assume oil goes to 8. My goodness, if we have an economy with zero costs, i want to be there. So im thinking to myself, where dont we ever think of the up side of this . You have that for energy, guys. Good for everybody else. Anybody have that answer . I cant disagree. If your input costs are going down, you have more money in your pocket, then youll spend it, right . Thats going to drive the economy. If we can get that done and be able to repatriate dollars that are overseas and put it into the economy, its set. Its an election. Im busy. North korea adding to market jitters today. The country claims it tested ehud genbomb. Were separating fact from fiction and what it means to your portfolio coming up. And next, facebooks big Virtual Reality bet. The ceo of occulus joins us with his outlook as the companys headsets go on sale today. Here at td ameritrade, they work hard. Wow, that was random. Random . No. Its all about understanding patterns. Like the mail guy at 3 12pm every day or jerry getting dumped every third tuesday. Jerry every third tuesday. We have Pattern Recognition Technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. Td ameritrade. Even tempurpedic mattress sets getat low clearance prices c, save even more on floor samples, demonstrators, and closeout inventory the year end Clearance Sale is on now at sleep train your ticket to a better nights sleep hello. Im sue her air wra. Here is your cnbc news update for this hour. Iranian meeting his counterpart in tehran. Afterwards he told the News Conference that saudi arabias actions were provoking tensions in the region. And were from a position of weakness. Washington nationals United States<\/a> . Look, im a rulebased buyer. I said this case its etf company. Today we loaded up on samsung, toyota, west farmers. Added more today. These are large asian names. Theyre not necessarily hong kong. Theyre australian. Could be singapore. The point is the whole region got really kicked yesterday. The only difference this year is im going in unhedged. I am going in naked. That means the american dollar is peaked out. Steve weiss. I agree that some other regions are as attractive as the u. S. Weve increased our position in europe. We were about 25 at the end of the year. As of january 1, were now about 3 a5 in europe. Our managers all did well despite the euro stock 50 auto being down 6. 7 . The reason is theyre not playing the big names. They derisk for a chinese standpoint as much as they can. Theyre in the you are seeing real growth there. Last weekend a bunch of european entertainers came out, and they were pretty much all positive. For the u. S. Were focused internally. We dont want to play big multinationals because to me china is the biggest concern. A devalued yuan. Im worried about china. I think its just a house of cards. One more, scott, because i know you love these factoids. I do. I do. Their debt load is more right now than their industrial profits, and their debt actually exceeds mexicos entire gdp. I want to stay on sort of what how u. S. Investors should be reacting to what is taking place in china. A note from you caught my attention a couple of days ago when the manufacturing pmi came out. You said dont sell risk based on that number. The services pmi is more important. That disappointed. It disappoint. Fortunately it was about 50. China becomes the real focus. I had two speculators call me, and theyre loading up on the short side. Investors like these guys are saying i like this dip. Someone is going to win this game. I actually the fact that i dont want to upset my colleagues here, but here theyre going to be right. Weve seen this movie before. Its the first week of the year. Toipt see if that number comes in at 200, we know the u. S. Order is fine. Fisher is telling us its fine, and then i think the European Data<\/a> will equally back that up. You think the longer betting people are going to be right . I do agree, but i have a concern here. The wall of worry is forming here for all the things that weve talked about, including north korea, which is going to be a shortterm blip. The problem is the stock market doesnt seem to be climbing the wall of worry. I agree i do think companies are doing really quite well. You are looking for some sign of life. Some sign that the stock market can overcome this wall of worry. I do think its going to happen, but the longer it takes, the more concerned i get. It indicates besides laub, there isnt that much driving this economy. Proof is in the pugged, too. If you look at the date wra from our partners at kenshow, it does show you that when you have this kind of unrest or concern about whats taking place in north korea whether from gold, oil, high yield, after that fact, the market does sent to brush it off. Thats what this the more well ask our managers to increase their net long position. Right now theyre a little lower. About 40 or so. I would like to see them up 50 . Markets dont go up unless theres something to worry about. When they do start going up, because of euphoria, thats when you want to run and hide. Most expectations are that Dividend Growth<\/a> is going to slow to Single Digits<\/a> this were in the United States<\/a>. Is that one of the reasons why you find attractiveness elsewhere . I look at overall pes first, and right now i think whats going to happen this year. Its nothing. Its flat. Had you mined for the growing dividends last year, you got 3. 2 expert juice. 320 basis points that nobody else got. I love dividends, and di denned i trust. In cash i believe. I think thats going to be the same issue. I have less fall youll have more returns. Stick with dividends. You dont have to just own utilities. Lots of companies have shareholders like me howling at the moon saying give me return of capital. Heats what i want. Zou tell us about that. Exactly, scott. Let me just go through what the guys were just saying. Fisher agrees that fujdzly the u. S. Economy is okay. Hooin is an issue, which is uncertainty. It wont derail the fed. If the weakness spreads, its something worth watching, as was north korea. He thinks the u. S. Is doing just fine. He agree with oleary on the issue of the dollar. The dollar cannot fall forever. He is with the stabilization in the dollar in year, and he agreed with me when i said, you know whashg the sep, the feds own forecast calls for four rate hikes this year. Is that your view, i asked him. Heres what he said. Those numbers are in the ballpark. Otherwise, we could meet in january and close down shop until a year later. We have to react to incoming events, and we will react to them. We got some things that happened today, guys. If you take a look at our cnbc rapid update calculated by moodys. Com, which is the tracking of growth. We got the trade deficit numbers in today, and were tracking down again. Now at 1. 4 . A really wide range of economists for the past quarter. The Fourth Quarter<\/a> there. You can see the high end 12. 3. Morgan stanley, 0. 4. Goldman sachs at 1. 7 . That offsets some of the weakness weve had. 257,000 jobs announced by adp for the private sector. Well see if that number comes in strong. Thats certainly something thats going to propel the fed. Scott, i had to guess, i think the fed would give pause in january and if the economy can gather some steam and these tracking numbers look more towards 2 on the first quarter, that the fed could go again in march. The interview everyone is talking about today. Steve liesman, thanks so much. Steve live for us down in d. C. See you back at hq. Thank you for joining us. Much mosh with the gang. How low can apple go. Virtually reality headset kicking off just an hour ago. Can you get your hands on one . That is the question. Were going to ask that of the ceo live from the Consumer Electronics<\/a> show. And drowning in oil. Brent crude now at an 11year low. Energy stocks plunging yet again. How to trade that. Youre watching cnbc first in business worldwide. Wir back. The rocky road for apple continues thus far in 2016. That stock falling deeper into correction territory. Is the stock a buy now, or does it have further to fall . We have two bulls on the desk, and our next guest has been consistently bearish on this name. Ian is the cohead of equities joining us live from l. A. Welcome back where. Thanks for having me, scott. You have been pretty much dead on in this move. How low does apple go, or is this it . I think it takes out that flash crash low in 1992. Ive been telling people tactically to cover onethird of the short here. You can put it out a little higher if it trades back up. Strategically i think its a core short. Whats the deal . Is it fundamentally an issue or technically broken or a little bit of both . I think its more fundamental than technical. I tend not to look at technicals too much. Fundamentally i think you have lapped peak margins, peak earnings, peak refr new growth and probably peak iphone shipments, and you still have a situation where china is a big unknown and getting worse as we saw this morning. You take out the cash . Its cheaper than, what, cisco oracle, microsoft, ibm. Is it a question whether its a value stock or not . I think thats exactly what were arguing over. Ultimately a lot of that cash is overseas to begin with, and second, youve got based on analyst estimates, which i would argue are too high, you have high single digit Earnings Growth<\/a> and Revenue Growth<\/a> for the next couple of years. Is nine or ten times earning that cheap for a stock like that . I agree sometimes things can look leak a value trap, and maybe thats what you are saying about apple. The thing that has me enthusiastic here is the amount of cash thats both on the Balance Sheet<\/a>, and i do understand thats overseas, but the amount of cash that it generates. I think scotts point is that if you strip out the net cash, net of debt, this thing trading at nine times earnings, well, that cash is real. Thats almost about 30 of the market cap. Isnt there a point at which the cash just becomes too attractive to ignore . Yeah, i think there is. That point is probably around 90 or 85. Its definitely a great it should be about 40 then. Thats okay. Its a tech stock that was a growth stock that still has a market cap of 600 billion. Its not like youre buying a stock that ultimately has all this growth in front of it. You are buying a stock that where the best days are over. Its a tech stock. You know, value stocks and tech do not work in my experience. You do have a pretty good battle developing over this name. The app store had a Holiday Season<\/a> for the record books, apple says. Two weeks he believeding january 3rd. Customers spent over 1. 1 billion on apps and in app purchases. Are people just getting too haywire negative on a name like apple . I would say this. You still have 85 of the analysts who cover the stock have a buy on it. Now, theyve cut their estimates. Theyve cut their iphone estimates. At the end of the day everybody is still loving the story and thinks its a stock you have to own. Thats actually still pretty built in, and its the same thing im hearing at 100. Some bulls are on every day saying i cant take it anymore. Im actually downgrading the stock. Then i think you have an opportunity to get more bullish on it. Good luck with that. Exactly. Well see you soon. Thanks, scott. Ian over at wedbush. I tripped this name on a rule base last september on this cash issue because the company is flush with cash. Unfortunately, its 40 away from you overseas. When i started to see that happen, thats deterioration even though it sounds per volunteers a Balance Sheet<\/a>, and we exited the name in september and loaded up that position in microsoft. We talked about it. It occurred that week. You dont always get it right, but this one is really worth it for us because microsoft has outperformed dramatically. Apples problem, i think from the fundamental point of view, is i love a name with this much cash. It will have to issue debt, which will make its Balance Sheet<\/a> look worse and worse over time. Then the other thing which is a ces kind of situation is i talked to guys in this name, and theyre starting to talk about apple as a Consumer Electronics<\/a> company. You dont want to be there. Thats when you really get pe compression. Thats when you Start Talking<\/a> about trading at seven times. Ill be back in this name at 85, 82, 83 because its not going to i got to wait for that, and i think were going to get there. Im sorry. I think theres another issue here, and that is if you take a look at that recent product announcement, what theyve done, going back to apple radio, apple music, its really not done anything. Its not set the world on fire. Its been disappointing on every, every what did you think . It was going to sell as many of the iphone . That wasnt my expectation. It wasnt that it will continue on the market. Its not going to be nearly as high as most other apple products. I cant get active pulse. I cant its a pain in the neck. I wouldnt use it. I liking to back to this whole cash issue. Youre right. This is what he was saying. The cash is overseas cant be repatriated without being tied. Good word for it, by the way. Its unfair really. It is what it is. Theyre taking to task that issue. Heres the point i really want to make. I think that this gets the wrong spin the whole debt issuance. Really what theyre doing, you could say that theyre issuing debt because they cant access the cash overseas. What i look at it as is theyre issuing debt at 2 so they can buy back their shares, which are yielding on an earnings basis around 11 . Thats actually smart. I like that. Do that all day long. Trick the share count. I believe the last one standing. Is apple going to be closer to 75 or closer to 125 . Ill take 125, but with one cavat. This close to 100, and you know im not a technical trader. Close to 100. It does want to suck down. Its going to be several hundred. Its going to be near 85, and then its going to have guys like me looking at it. By the way, who gets the Financial Engineering<\/a> these days . Nobody. Thats the problem. I agree with your strategy. The market does not reward you for that. Weve taken our when they came to dif depped share buyback, it didnt help the stock. Thats not what people own their stock for. More bad news for the energy bulls. Gasoline prices surge. Well head to the futures pits for the trade. Heres a look at some energy names hitting 52week lows today. Eog resources, marathon, murphy, and hess. Back right after this. Good afternoon. Initially that draw in crude oil inventories, a lot of the traders thought it would be bullish, and weve had a negative reaction. Anthony, break that down for viewers today. Really understand whats happening in the crude trade here. Yeah. Last night when that number did come out, we did actually show a little positive numbers in crude oil. Once north korea tested that weapon, that was it. The markets sold off. Its valuing equities right now, and you pointed out that gas supply, they took crude oil and turned it into gasoline, and nobody bought it. You saw a five million draw in crude oil and ten billion at gasoline sfli. No one is use this right now. A lot of reasons for crude to sell off right now, including worries about china as well. Whats going to happen to the crude oil trade here . A lot of the traders i speak to are talking about that two handle again. Yeah. They are, jackie, and certainly, you know, anthony talks about the demand where they turn the gas on and no one really bought it, and so you see that weakness. You see any commodity based countries like brazil, like canada, australia. Their currencies are weak, and then you get the trade data from china that makes matters worse that shows globaling demand is sort of weak here for oil, and i think thats why you are seeing oil trade at the down side. You are seeing volatility tick up in oil. Were making lower highs, higher lows, that is new york the Oil Volatility<\/a> index. 30 oil like i talked about earlier in 2016 is certainly a possibility. Maybe coming sooner rather than later. Okay. Well be watching, swre. Thank you so much. Well be there. Thank you so much. How do you view Energy Stocks<\/a> here . Ive been wrong on this. Last time i said he was going to then invest in Canadian Energy<\/a> plays. Sun core is a good example. Very interesting play going on there. Theyre acquiring a competitor kyled canadian oil sands. I was hoping to get a piece of that. You look historically. Its still correlated to the commodities. Its like leverage. It goes up, and the Canadian Dollar<\/a> goes up. Thats why i not working yet. Im still going to ask the position. Heres what im thinking. We dont talk about this. Lets assume oil goes to 8. My goodness, if we have an economy with zero costs, i want to be there. So im thinking to myself, where dont we ever think of the up side of this . You have that for energy, guys. Good for everybody else. Anybody have that answer . I cant disagree. If your input costs are going down, you have more money in your pocket, then youll spend it, right . Thats going to drive the economy. If we can get that done and be able to repatriate dollars that are overseas and put it into the economy, its set. Its an election. Im busy. North korea adding to market jitters today. The country claims it tested ehud genbomb. Were separating fact from fiction and what it means to your portfolio coming up. And next, facebooks big Virtual Reality<\/a> bet. The ceo of occulus joins us with his outlook as the companys headsets go on sale today. Here at td ameritrade, they work hard. Wow, that was random. Random . No. Its all about understanding patterns. Like the mail guy at 3 12pm every day or jerry getting dumped every third tuesday. Jerry every third tuesday. We have Pattern Recognition Technology<\/a> on any chart plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. Td ameritrade. Even tempurpedic mattress sets getat low clearance prices c, save even more on floor samples, demonstrators, and closeout inventory the year end Clearance Sale<\/a> is on now at sleep train your ticket to a better nights sleep hello. Im sue her air wra. Here is your cnbc news update for this hour. Iranian meeting his counterpart in tehran. Afterwards he told the News Conference<\/a> that saudi arabias actions were provoking tensions in the region. And were from a position of weakness. Washington nationals Ryan Zimmerman<\/a> and Philadelphia Phillies<\/a> ryan howard have filed defamiliaration lawsuits against al jazeera. The two were linked to allegedly using performance enhancing drugs during an undercover report by al jazeera late last month. After tar sold after it was released in december of 2009. At a starbucks barista out of a job after a confrontation with a customer goes viral. It shows the customer driving up to a window. Sh accused the barista of stealing her credit card information and using it at a nearby grocery store. The Company Fired<\/a> the worker and issued an apology. Thats a great endorsement. Ill go see it. Sue, thanks. Lets shift gears to the tech sector now. The long awaited Virtual Reality<\/a> head sed seth from Facebook Occulus<\/a> is finally going on sale today. John fort is live at the Consumer Electronics<\/a> show with that companys ceo. In a first on cnbc interview. Take it away, john. Thanks, scott. Brandon, ceo of occulus. Thanks for joining us. Okay. So how many of these can you make . The preorders have opened up. People are trying to snap them up fast. Thousands . Hundreds of thousands . Many tens of thousands into the hundreds of thousands. No problem this year. Were going to be really ramping up production. Its really super imersive and a comfortable experience. You can use it for an extended period of time, and it comes bundled with everything you see here. It comes with an xbox one controller, a sensor that tracks the position. It allows you to navigate and kind of go through the experiences in a very simple and intuitive way. If you are not a gamer. For nongamers that dont know the Xbox One Game<\/a> pack, they can use this, and its p very simple and easy to use. This is a highend pc that will be needed to make this work. Youll sell a bundle for just shy of 1,500 that includes this and the pc that has the specs youll need to use it. You do need a pc to connect this to. It doesnt come with a pc. The oculus rift is 599 as one box, one box unit. Without the pc. And then you do need a pc with a fairly higher end gaming gpu, graphics processor in it, and those pcs, typically, start around 1,000. They may go up to 1,500, 2,000. We have a bundle with 599 headset plus the pc that meets our recommended specs starting at 1499 with our partners. There will be different categories. Different levels of pc, if you want to spend more and get a higher end regular. All in, you can go out the door with a rift and a pc. Now, gamers and geeks are going to get this off the bat. Your average consumer might say why do i need this . I tried this after the latest version, and after a couple of minutes i was blown away, hooked. Are you putting those relationships in place . Are you going to do it yourself . This is something you have to see to believe, like you did. Youre maybe a little skeptical before. You have heard of e. R. In the past. It hasnt really worked. Now it does, and it works in an incredible way. You have to see it to really believe it, and we feel like once you see it, youre going to want it. Getting it into retail, getting it into broad retail around the world is going to be very important to the success of vr and to the success of oculus and the rift, and were working on that as we speak. Were going to be in retail starting in april. You have a question for becky . This is scott. I have one, and kevin oleary has one. My first for brendan is can you speak at all to some of the reported website issues that you guys have been having today . Are you still having problems with people trying to get their hands on these devices . Weve had an incredible amount of traffic hit our site. This is the most traffic weve ever had. A lot of people want to preorder the rift. Were working through all those issues now. Were still getting preorders as we speak. Were getting through those issues. Its because of a lot of traffic. We should be fine over the next few hours. But you are but you are still having some issues it sounds like. We have a lot of traffic coming through the site. We are working through those. We want to make sure that theres no fraud attempts on credit cards, things like that, and so, yeah, were navigating those, but people are buying as fast as they can. Ive got shark tanks kevin oleary here with me, and he has a question for you as well. Brendan, last year on shark tank we have an it rags of your product. It was actually a commercial version for military training inside a giant sphere. I got in it and put on the headset. I immediately got sick. I got motion sickness. The operator told me later there was a latency. What percentage of people are going to put on these glasses wont be able to deal with the motion sickness that i experienced . Is that a problem for you . So thats been a problem thats plagued vr for decades, and its something that weve really focused on addressing, especially with the consumer rift. Im not sure if that exact experience. The developers can always make things incorrectly. They can always add too much latency and add a lot of loco motion and movement. If you do everything right and make comfortable experiences, you should be able to use the rift for an extended period of time. Im very sensitive as well, and i have been able to use the rift for up to two and a half hours straight playing one of the games, luckys hill, that were bundling with the rift at launch. Im wondering how soon were going to be able to see commercial experiences outside of gaming that Third Party Developers<\/a> create on this . I feel like real estate is one Great Potential<\/a> example. If you can give me a walk through of a dozen potential homes that i dont have to drive out to all of them, i can narrow it down ahead of time. Maybe car interiors too. How soon will you be able to get this into the hands of those p kind of people so they can track experiences using vr . Were shipping a large number of developer kits. Weve had almost nearly 200,000 developer kits that have gone out over the life of oculus. Those arent just all game developers. The majority are. Were focused on game development. That will be the majority of the predominant use of rift. At least the first generation. Its going to be gaming and entertainment. Theres a broad enterprise use and professional use for Virtual Reality<\/a>. Like you said, theres architecture. Theres automotive. I think youre going to see the rift throughout a lot of automotive show indications. Different destinations will start featuring this. Yeah, theres a huge range of applications. Medical. I should have asked how long before you are able to support that . Its complicated, i guess, for a lot of these businesses to drive that themselves. At what point will you be able to drive that and how important is that to you . Were focussing on supporting all developers. The entire developer ecosystem. We want to make sure that thrives. There are thousands of developers. More are signing up every day. People are kind of theyve been working in mobile and pc and console for a long time, and theyre jumping over to vr as fast as it can. Its so exciting. Its a whole new category, industry. Youre telling me we got to go. I would love to try this out. Thanks so much. We do have another biggest from ces tomorrow. Former twitter ceo Dick Costello<\/a> will join us on the halftime show. North korea claims to have created an h bomb. As we head to break, well look at some of the names hitting a52week lows today. They include hog, harley, nordstrom, american express, and carmax. At ally bank no branches equals great rates. Its a fact. Kind of like ordering wine equals pretending to know wine. Pinot noir, which means peanut of the night. Coming up at the top of the hour on power lunch a new brick in wall streets wall of worry. North korea and its nuclear ambitions. How big a threat is it . We speak with a former ambassador who was head of the u. S. Delegation of the sixparty talks that were aimed at ending north Koreas Nuclear<\/a> program. Also, a slew of big exclusive interviews today. The ceos of underarmour and at t mobility, and the ceos of marathon, pbs, and diamondback energy. So many ceos coming on the show, and of course, the latter ones will talk to us about where this he see Oil Prices Going<\/a> from here. Plus, we have the release of the minutes of the latest fed meeting which could also add to the wild trading youre seeing at the moment. Its a huge show. Back over to you. Great stuff. See any about 15. Global markets are in selloff mode again today. North korea claims to have successfully conducted its first hbomb test. If confirmed, it would mark north koreas First Nuclear<\/a> test since 2013, and it would violate continuing u. N. Sanctions. Joining us with more is ian bremmer. The president of the urasia group. Welcome back. The size of the explosion is about the same as the last test heave had, which implies probably not an hbomb. No one going to believe it until they offer proof. They never offer proof. When i think is more relevant is its going to be kim jong uns birthday, and they use large candles there. Have you to have a celebration, and you are going to do it before the birth day because frequently these explosions fizzle, and if you get the first one wrong, you have to have time to get the second one right. Im sure that president obama will say that in strong terms, and then were going to forget all about it. The chinese have condemned it, of course. Who has a larger role to play here in whatever solution diplomatic or otherwise takes place . China or the United States<\/a> . Whooin e china is the only company with the ability to constrain the North Koreans<\/a> because theyre providing the lions share of north koreas aid, both food and energy, but even there the chinese have been very upset with a lot of north korean action over the past years, and i would say that their capables are more limited. To the extent the americans and chinese have talked fairly openly with each other, including the summit that obama and xi ping had. Theyre both frustrated. The russians, of course, recently met with kim jong un, and declared a year of friendship. Probably not the best timing on that right now. I dont expect the russians are going to give sort of read the riot act to kim jong un. Putin doesnt feel like using Political Capital<\/a> that way. Seriously. Weve got clines all over the place calling. Weve got the media calling, if the South Koreans<\/a> markets are down and this is a buying opportunity. This is not something that is going to lead to escalation with other countries. Thankfully this is not the middle east. No one out there wants to really buy in and escalate against the North Koreans<\/a> for their oneoff tests. Im glad you went to the middle east. Thats where i wanted to go before i let you run. Saudi arabia and iran, the significance of it and what happens if those tensions grow worse . Well, thats the real issue. The saudis pretty much everything that could be going wrong for them is. Oil prices, of course, very low. Their economy constrained. Theyve announced austerity measures. Even reducing energy subsidies, which is unheard inform that country. There is a fight with the kings son that wants to become real fast before his dad dies, and he is really unpopular internally, and theyre losing a lot of influence in their region as iran becomes more powerful. They chose to escalate this conflict weeks before the wraits and allies i want mremt the nuclear deal, which means the timing was bad. It means the allies in the west were going to be very upset with them, and they didnt care. Its because theyre under a lot of pressure. When i look Going Forward<\/a> as to what it is that legitimatizes the saudi regime, i dont find an awful lot. If theyre not going to be writing the big checks they used to, thats dangerous. Its dangerous for them, and, of course, it makes it so much harder for anyone to try to make progress in dealing with the war in syria, with the expanding capabilities of isis in the region and more broadly and the proxy wars that the iranians and saudis have been fighting against each other now and will be fighting more intensely rsh. It seems to be the issue thats most on the mind of u. S. Investors this week especially. We in the midst of a hard landing or not . I dont think were going to see a hard landing in china. Well see that the chinese will be writing outlandish size checks when nobody else is. Both to stimulate their internal economy when they have a market downturn, and also to support international infrastructure. Its going to get a lot of countries aligned with them. Also, as we see lots of volatility in the Chinese Market<\/a>s. Its not going to bring xi engining ping down. It wont lead to major instability in china, but it is going to have palpitations on markets around the world as we saw in the United States<\/a> on monday. Thats were just in the beginning of that china the Chinese Market<\/a> is only getting bigger, and the impact of that volatility, of course, will therefore grow on western financial markets. Appreciate the time. Talk to you soon. Ian bremmer. Coming up, chipolte gets serve and a activist turns up the heat even more on yahoo. Those moves and the trades are just ahead in the blitz. Are you watching cnbc, first in business worldwide. Its time now for the trader blitz. Four trades on four stocks making news. First up chipotle subpoenaed over the norovirus. Stock hits a new low, 4. 28. I thought this one could see significant upside around eventually that will be right, but it might be for much lower levels and certainly being subpoenaed is one of the reasons that it will go lower. Weiss, val yaent has a new interim ceo. Hes probably a better guy to run the cap interim basis than a pharma guy. Id still avoid the stock. Wouldnt go anywhere near it. Name dropping, town dropping. Do you want to drop some local restaurants. Its what i usually do in threes. Yahoo getting another letter from starboard, the activist sti firm saying significant changes are needed. This is more of the same. A lot of pillorying of marissa mayer, the spending on acquisitions and parties. I think at this point the momentum is headed towards her having to do something dramatic with her own career or breaking up the company. The fact that its up today does mean to me at least somebody is giving credence that the starboard letter will gain some traction. Kevin, auto nation, great sales. They were boosted though by big discounts. Fantastic. Id call for this being really a proxy of gdp growth. Zero cost to capital for the last two years. The stock has had a fantastic result because of it. Auto sales off the charts. I get all that. If youre going to put a position on now, this is not where id do it. I think you may get another couple rate hikes that will hurt in terms of the cost of capital. If we are all going to be in the sub2 gdp growth, you will see it in car sales. You hear people talking about peak auto. If you were in this trade, you made a lot of money and now its time to take a little off the table. Coming up, the markets close in just over three hours and some final thoughts from kevin oleary coming up next. Welcome back. Kevin oleary is just getting warmed up because tonight hes going to be on mad money 6 00 p. M. Eastern with jim cramer. I cant wait for that. That is going to be fun. That is going to be fun. Its going to be a shark tank event. I want to show you shares of netflix. They are up 6 as we are on the air right now. Reed hastings as we speak is speaking out at ces in las vegas. Apparently investors liking what he has to say. Among the things mr. Hastings has told that audience out there in the Fourth Quarter<\/a> people watched 12 billion hours of netflix. That is up 8. 25 billion or up from 8. 25 billion from one year ago. They have reached almost half of all u. S. Households, 70 million homes globally. Doc . Judge, we 25utalked about it monday and said it seemed like a fools errand to sell this thing just because the tax consequences. Now look at it. Right back almost to the exact level it sold off from thursday of last week, right around 114 or so. You incurred all that 60 tax, 55 , 60 tax and now the stock is right back and you cant buy it back because, of course, thats a wash sale rule. You would have broken the reason you sold it in dont get me started. Whats your view . This is the amazon of streaming. It doesnt have to make money in international countries. Its a market share grab. The volatility is crazy. Everywhere i go and every country in europe and canada, anywhere you go theres five competitors launching into this thing, and yet theyre getting the benefit of the doubt that theyre going to be the one that survives. This is going to be a viciously competitive space. Oh, my goodness, and by the way, they dont pay a dividend in case anybody noticed. Figured youd mention that. Lastly before rerwe run, ubs wi commentary i thought was interesting. Says stocks will reach a top in the Second Quarter<\/a> before falling as much as 30 later in the year or early 2017. More in the late stages of a bull market instead of being at the beginning of a new breakout . That was the Technical Analyst<\/a> and last time they said that, they were dead wrong. I think the market is up another 30 from their last sky is falling call. Jimmy . I dont know how you make a call on a bear market. Something exogenous has to happen, something to send the u. S. Into a recession to have that magnitude of decline. We have been building this wall of worry. We need to see the market climb it. Its not happening today, maybe tomorrow it will. They say the bull market will last until the end of the decade. Its been great having you here. Have fun on mad. Thank you for watching, as well. Power lunch begins now. Thank you very much, scotty. This is power lunch. Im mandy drury along with tyler mathisen. It is a day of worry for investors and noninvestors alike. The dow showing big losses, more than 200 points, 214, 215 at this hour. Nasdaq is off about 1 as well and the s p did owe that, down 21, a little more than 1 . This after this woman in north korea told the world her country designated a hydrogen bomb. They are 450 times more powerful than the nagasaki bomb in japan. A short time later japan call","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia601305.us.archive.org\/9\/items\/CNBC_20160106_170000_Fast_Money_Halftime_Report\/CNBC_20160106_170000_Fast_Money_Halftime_Report.thumbs\/CNBC_20160106_170000_Fast_Money_Halftime_Report_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240623T12:35:10+00:00"}