Up noorn more than 20 . People going towards the stocks. The question, is there going to be a potential cut in dividends. I dont believe so and utilities have ban great performer the last number of years. The hunt for yields is going to continue and the oneyear to 1. 48. Look, in utilities, theyre a special sector, because theyre a regulated entity. Theyll get enough to pay those dividends. See a massive recession, depression that will shut down terms of need for electricity and so forth. They can do fine. Tickle the energy cost coming down. Look at materials, however, stocks like php, i dont see how they maintain div gends going forwa dividends Going Forward. More worried about that. Energy could come down more. Basically okay. Theyll come down. You still need dividends. Telecos . Who knows . Major disruption there. And in some respects, joe, try to get what could be coming. Gdp report, disappointing, business dropoff. People wondering if that forecasts a recession. If business spending capex drops off, whos to say dividends arent going to be next . I dont think dividends collectively are going to see contraction. I do think as a strategy looking forward as youve correctly pointed towards, you could look at dividends and identify who are dividend growers. If you take the dividend yield 1. 9 expected next year for the s p to grow 2. 1 who will grow dividend gee yond that . A couple names i could mention. Look at a name like cisco, taking its dividend up significantly. Look at a name like extra space storage, and then amgen. Three names i would identify that will grow dividend. Thats the right strategy to look towards Going Forward. So far this year in the quarter, the street is not rewarding what it rewarded in years past. Bibacks. Theyre under performing now. It is about growing your dividend, as you point out, about Rewarding Companies that are going to have higher capex, higher r d spend. If you find it you want to own it. Josh, i wonder if some of those types of stocks may fall out of favor if you think that their capex spending, investment in their business is going to drop off . If you look at the tech rally. Lets just sake that. Joe mentioned cisco. Yield of 3. 4 . Qualcomms of you 25 year to date. The stock performance. Hp up 20. Ibm, 17. Cisco 13. All have healthy dividend yields. Its part of the allure about why investors buy those stocks. Yes. Do you have to now consider that if the economy may be softening that those dividends could be cut . The names you just flashed on the screens have good coverage ratios. In a tech sector probably id worry less than some of the areas steve weiss mentioned, but whats fortunate to understand is the u. S. Economy and the stock market is a reflection of that. You have must better breadth of different sectors than you get in some foreign markets. Look at even the major developed countries, theyre either highly concentrated in banks or in mining activities. The u. S. Stock market is much different, and i think its a lot safer. Id be much more concerned with the valuations people are paying for things like utilities than i would be worried about an underlying dividend cut or something of that nature. When you think of things from that perspective you probably dont have as much risk of a dividend cut and you probably should be a little bit more worried that, why am i paying 19 times for a south new Jersey Company that converts coal and natural gas into electricity . Maybe thats not the best, most productive use, even though its got a nominally high yield. Goes back, pete, really, circle back to the conversations we were having many weeks ago, in wondering whether the high dividend sectors, utilities and telecoms and then the etfs that have done well, dvy, example, near a 52week high. If those fall out of favor, a prospect of yields riding, what, 1. 50 today or right about there. And why those stocks continue to do well. Partly a conversation about rotation, where you think youll get the best bang for your buck in your portfolio for the remaining six months of the year. First thing, never, ever buy a stock because of the dividend yield. A lot of people have done that. Rewarded because theyve been in utilities and telecom. Most foolish thing in the youre. Youre lucky now, i dont think historically, josh would no better the historic side of it all, look at the fundamental story. Right . Talk about it all the time. Look at valuation and then growth and then look for the dividend yield. If you get all three of those thats a home run what youre looking for. Look at pharma. Sorry to interrupt. Please. Why have i been in the names last three, four years. Not the yields. That the kicker. Its because of growth, pipelines, technology, cisco. When the brexit happened we talked what should we look at now . One of my favorite names was sisk pope getticisc cisco. Breaking ot. 52week high and still a 3. 5 yield, wow, youre in the right name. But you can see a tech stock, seen it before. You could see any of these stocks trade down 10, 15, 20 in a day, and thats your yield for four years. Why you dont buy for yield. Exactly right. In this environment, particularly uncertainly of the election coming up, ceos arent spending, i expect to see a moratorium on capex Going Forward, saw in the last report, gdp, youll see more of that. Not spending catpex you think theyre hoarding cash and saving the cash . Absolutely. Hold cash because, cataclysmic economy, hold it for m a and also maybe increase dividends or buybacks Going Forward. Our question sort of is, what if that Dividend Growth stagnates and senior economics reporter Steve Liesman has done a lot of work on that question since we saw business spending, capex fall in fridays good p report. We know oil. Well documented. What else are you looking at to try to get clues to this very question were asking . This is not a new phenomenon. These quarters in a row capex declined in the gdp account. Whacked off a point out of. 1. 2. Would have been a 1. 7. Oil, scott said, the big one. That, by the way, affects the other areas to the right. Those not quite effective. Computers flat to nothing. Thats a price adjustment. Price to computers fall. Adjust prices, still falling. Manufacturing down 7 . Inventories, this is an interesting question. Some people see this as a lack of confidence on the part of companies with the consumer have to take the stuff off the shelves, or something that building inventories is growth in our future. Transportation down 3. 1 . We have a lot of data coming up this week and one of the things if companies are cutting back on capex, the dividend question comes out. Not just the dividend question. Is it an employment question as well . You have two school of the thought. One is, yes, employment could follow the ending, decline in kpap e capex. Given salaries are meeg are and havent increased, relative price of an employee versus a new machine maying more balanced than in the past. I dont think you can make the distinction and dismiss energy. Weve argued on this show. I dont any ythink you dismi not diskniss. Well documented. We already know. Not only well documented but going to lead the tendencies for capex Going Forward. So oil, as were talking, approaching 40. Everyones question is, oil rolling back over again . Oil rolls back over again it has a distinctive impact, not on the sector but all the other sectors. I agree. Does anybody at this desk think exxon cuts dividend . No. Chevron cut its dividend . I dont think so. One of the reasons people recommend those stocks my view on oil is that we get through the summer then see a gradual move higher. I dont think we go past 60, 55 or 60. I think, though, its important to recognize two 24 k things. Problem with Business Investment is a real problem but maybe overstated by secular things that have nothing do with the health of the economy. For instance, if you want to look at overall Business Investment. Its only up 8 over the 2008 peak. And thats obviously very unfortunate. However, when you strip out commercial building, i. E. , building new Retail Stores nobody wants, its better. Up 19 , thanks to things like r d, increased Capital Equipment spend. Apple is a really important exempt you have have growth, investment, big dividend and buyback all at once with a good economy. Apple spend money on r d, upped the dividend, the buyback these things, doesnt have to be an either or. Over the last year or ten years what do you really want to talk about . You were talking the last year. Okay. Investing for the future for the last year. Upping what theyll spend. Investment will yield return. All right. So call me in a few years. Well talk about it then. Their out of control, scott. Out of control. Invest . Not my point. My point, they should and return capital to a decorum here . A little, scott. I kind of like the lack of. Unfortunately, there are no guarantees. If every piece of r d pays off. Nice to see a company that can do it all. Slice and dice numbers. Not slicing and dicing, adding. You did. Take out Retail Stores. The point, economy grown at 1. 2 . Who denies that. No. Good. Steve . To me its its simpler than youre making out. If stock prices nice bailout. End up being higher, stock prices, profits turn around, rebound in capex. I worry about the idea were not putting the technology and the tools in the hands of employees and workers to be more efficient, and that has a detrimental impact on potential future growth rate. Kevin oleary, you know, is the chairman of o shares, resident shark. If a shock doesnt have a dividend hes typically not interested at all. Kevin, are you there . Im here. How are you thinking about the kind of conversation that were having around the desk today, looking at capex, looking at signs, warning signs, if you will, for the market if dividends end up at risk . Thats a great discussion, but, you know, dividends are not johnny come lately favorites. They have provided 71 of the returns in the s p over the last 40 years in multiple cycles of capex expenditures over wide extended periods of Economic Growth and slowdowns. End of the day, dividends are the mothers milk of investing, period. We can have a great discussion about, are we paying too much more dividends in this cycle at 19, 202, 2 pe. The fact is, end of the day you dont have to pay that. You can find companies that are servicing our domestic economy from europe, glaxosmithkline, roche, nestle and pay a discount and still get active exposure to our best of the worst, i guess. You know, we dont have the Fastest Growing economy. At least the consumers in good shape. I argue end of the day you sdroebt to own tallcoe or too utilities. Two things to think about in this cycle. Number one, if the company is using debt to make tain or grow dividends like utilities, simply dont buy those. Those are expensive. You can find lots of Companies Growing dividends with free cash flow. And number two, youre getting a free option on this market i want to remind everybody about im personally excited. A 50 50 chance the next administration will reduce the capital. 900 billion on u. S. Balance sheets coming home, boys. Whats going to happen to a lot of that . Its going to be paid out in dividends. Thats at least a 50 50 chance. I dont care who you like in the election. You like hillary, you like trump. I dont even care about that. Show me the one that will allow us to repatriate our capital and pay it back out. I like domestics that pay dividends. A hi high probability it continues. Apple, only 17 billion domestically. 200 million internationally. If somebody, mr. Trump, perhaps, or mrs. Hillary clinton says, lets repatriate in tax reform, 200 billion coming home. Theyll send some to me if im a shareholder. If that happened, maybe i would buy apple stock. Dont tone yet. What makes you think, this is josh, either president ial candidate will be able to get that done given the intranssglins congress, unwillingness to really pass anything . Even if donald trump was really for that or hillary somehow were convinced that would be helpful what makes you think congress can actually make it, you know, an actual law . Josh, dont be a debbie downer. This next administration. I hope youre right, by the way. This next administration i hope im right too. The last Administration Spent all Political Capital on health care reform. Everybody on both sides of the aisles knows now weve got to fix americas taxes. Theyre a mess. Were not competitive. Get a lower tax rate in canada. That place is as left as it comes. I dont know, kevin. I dont think it happens. Read the oped of the wall street journal this weekend what they point out neither candidate is speaking to this critical issue were talking about right now. Which is that neither hillary nor trump has much of a plan to change corporate taxes. In fact, both of their potential presidencies here is a reason for companies to cut back, add brexit to the election uncertainty and then the complete uncertainty about what happens afterwards, that you have Hillary Clinton talking about higher taxes on the wealthy as well as business and donald trump talking about protectionism and terrorists. Theres a reason by itself for companies to i read the article. Talk about reality in the next 99 days before we pull the trigger. Both parties will move towards the center. In the case of trump, trump is listening to kudlow, one of our contributors talking about progrowth strategy reducing corporate to 15 and repatriation tax of only 10 . If 23any of that policy goes in the platform youll hear the speeches. Steve knows this is coming. The Detroit Economic Club well hear trump talking about this. Now its about policies. I dont want to be that pessimistic. Both parties have to go centrist. Talk about trump tearing up nafta, its not going to happen. Hell enforce. His middle ground will be that. Im always an optimist. I simply look at balance sheets. Making a 5 return in the market, half comes from dividends. Sec yield 1. 9. You can mine S P Companies up to 2. 9 dividend yield and not overweight utilities or fell te. Go overseas, too. You think Dividend Growth will slow. Its already slowing. Negative, last three quarters. Continue to slow or just refute what the data has already shown . Because that could potentially change the kinds of stocks you would want to be invested in for the next 99 days or whatever time frame you happen to be focused on. Totally agree with that. Do i own john deere . No, because i think theyll have problems. But look at phrma. Look at consumer, j j, kimberly clacclark hitting it f the park and were sitting around getting depressed. 46 of sales in other markets. Not just domestic and become really good at becoming productive and cutting costs. Giving Corporate America ed credit to go back to the old days in the 50s. Stock didnt pay a dividend, couldnt get a grandmother to buy it. Thats not a bad thing. Last word. Thanks for spending time with us. I want to touch on the market. Watching a selloff sort of accelerate on wall street. Steve, thanks to you as well. Have you noticed oil could break 40 in a matter of moments and the s p 500 not surprisingly after hitting a new intraday high today has all but rolled over within the last several minutes. At 18 minutes past 12 i clock he 12 00 on the east coast. Down some six points hitting another alltime intraday high as were watching oil, and maybe someone wants to comment on that. Oils barely holding on to 40. I mean, you sort of, safety, joe and i talked about before the show that oil has been delinked from the markets. Well, momentarily it is, but then the machines kick in, the quants kick in. You see the linkage come back. With the vix where it is a fool not to buy protection in the market at these levels. Then you have people like gunlock, in an interview saying sell everything. Nothing look goods here, or Goldman Sachs saying that equities are underweight for the next three months. The markets got so much uncertainty Going Forward into the election. Pick your time frame when you want to sell. Right . But when you sell everything, you pay taxes. You got to know where your tax base is before you pull the trigger. We got to pay bills. Go away two minutes and come right back. Lots more ahead on the Halftime Report. Announcer thinking about how to profit from backtoschool sales. Bold calls today. Danas Shopping List is next. Plus in two trading days weve seen two very big moves for biotech. One up, one down. How do you score and stay safe at the same time . Scott wapnerened a the halftime gang are back in two minutes. For much more on the risk and eward for dividend stocks go to cnbc. Koch pro. Announcer the Halftime Report is sponsored by fidelity investments. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Welcome back. Theres jamie dimon up at 1 00, 40 minutes from now, exclusive interview with the head 6 jpmorgan, chairman an ceo. Wilfred frost is doing that. One of the closely watched charts of the day. Crude oil. Look that. 40. 10. Barely holding on to 40. Down 3. 5 . Joe, down 7 of the last 8 days. Important to measure the sentiment as it relates to how port 23folio managers respond T Investments in energy equities. Coming into the beginning of the year tremendous pressure in the high yield price and on the stot pricing of oil. Portfolio managers using equities to almost be an atm, to be sellers on that side. That sentiment dramatically changed, and i think right now when you look at positioning and energy equities, calling for a bottom you need sow see the liquidation in the energy equities. Its easy as oil rallied towards 50 for a p. M. To overweight energy. Arg weighting in energy of still below 7 . 20 go overweight is very easy. Even the material space is less than 3 . There again would you buy a name in this space today . I need to see right now in the energy and material space further l