For the portfolios we manage. We are, instead, putting on a one by two trade right here approximately at the 115 level in the stock. Thats what we started to do yesterday. We thought that the stock has still more room to run. Weve only heard what weve heard, of course, from sprint and t mobile. Apple isnt going to tell us anything for quite a while, and i think well hear more from at t and verizon. I think its all going to be good news. Everybody on the desk likes the stock. Do you think this move is justified . Sort of in the velocity of it . Yeah, i do. I think it was also very underowned. I went and looked at the weightings of apple in the s p 500. 3. 4 . I would venture to guess that many Portfolio Managers under underweight. You could have been underweight for most of the year, right . It it was the right call. For them just to get to market weight in this position i think thats what you are seeing here, and in addition, we are getting Interesting Data points. Less bad. Maybe even some good. Samsung has their woes. If you look at the valuation, you know, 14 times, 12 times excash with a decent yield, you could make a case to own it and actually to go overweight. Analysts today, josh, a number of them raising the price target. A ballpark, 140. Thats where many of these at least the majority seemed to be today in that general ballpark. Has the tide turned now . Feels like sentiment has changed. At least how its viewed towards the stock itself. Maybe there are still fundamental questions about apple, but the stock seems to have a rebirth here. Yeah. Thats my favorite game when the sell side raises their targets after a 15 or 18 run. We dont do victory lap on this show. We get as many wrong as we get right. This is what stephanie and i had been saying, and pete too, pretty much the entire year. Through all of the ups and downs. At the end of the day the stock tends to eventually run up once the new product comes out, even if you missed the run, if you wait until the day its released, you dont know when that run is going to start, and apple is strong when its got a new series out versus the in between series. Think about how powerful this move has been, scott. 11 in one week. But its beyond that. What says this stocks rally done for the overall market . This week, although it doesnt feel that way, the s p 500 is up. 4 . However, the average stock is actually down. The medium stock is actually down. Apple has been moving the chains for the other 490 some odd stocks in the index. I think thats really important. Bigger picture, its happening in the context of tech outperformance. I believe thats the key to this market. Youre looking at cisco trade and since february 2001. You look at intel at a high it hasnt seen since september of 2000. That is the context in which apple is doing this. It is not a one stock story. Sarat . Opine on that. Its an interesting view, and i think a good one to discuss. I think the whole sector has been doing well, to joshs point. We have breaking news related to wells fargo. Sue herrera doing that for us. Hello, so. Thank you, scott. We want to let you know basically that the Senate Banking committee has called for a hearing into wells fargos practices for next week and now the Financial Services committee, which is chaired by jeff henserling is calling for the release of alpertinent documents from wells fargo about the opening of those accounts that customers did not know about it. They are calling for a hearing. They want the ceo to testify and once again, this comes on the heels of the senate asking for that hearing next week. I believe its on the 20th. Everybody is piling on right now. It is a hot topic in washington, as you know, scott, and well see whether or not the stock starts to react to it. I think its down a little bit more than 1 on the trading day. The House Committee is going to call wells fargos ceo to testify. Okay. He was grilled by cramer. Yep. And then maybe now he is going to head to capitol hill for some similar grilling. For several hearings. Yeah. Thank you so much. Sue herrera with the latest. John, you bought the stock. I sold puts. Sold puts to similar sort of situations. Im selling insurance to people at the 44 strike. Josh and i discussed it the other day as far as josh being more of a technician which was saying if it breaks 44, then it can see significantly greater down side to perhaps 40. Im not trying to put words in his mouth, but that was about what it was. I was comfortable, judge, taking on the responsibility of owning stock if it breaks 44, and i still like it here. Its down those put says are actually down even with the stock down because it rose up. You think theyre going to have a good week next week . I do. He is going to be in front of Elizabeth Warren. Do you think thats going to go well . These are all good questions. What would you make you believe . Our socially responsible our socially responsible investors adding wells fargo. The other part of your thipg is i like it, josh, because im from the Warren Buffett school that i buy when theres blood in the streets. There is blood in the streets here. Will i get another chance next week to take a nibble at a better price . Perhaps. What if i miss it . What if this is the exact crap storm that gives you that whoosh to the down side. Look at the underperformance. I totally agree. I think its very early and, i think this is not going to outperform the group ifle this Group Rallies or if it sells off. It was a defensive stock. It has very low beta relative to the other banks. Relative to a goldman or bank of america for that example. Its one times book or below. Not that you wont be right, but all im saying is 44 was supported in february. It breaks 44, i collected about 1 for those push. I think you have time. Right now its the weakest stock. Here we are having a conversation almost daily about whether the financials are the place to be, and even with rates having ticked up around the tenyear at 170, 1 68, 69, somewhere in that range. It only seems to raise further questions about the financials as a group. The everhang next week, as you said, Elizabeth Warren calling out wall street, calling out the banks again. Deutsche bank, people worried about that. 14 billion fine there. Well, like i said this all good news for the space . No, its not good news. Again, if you want good news and if you want to buy stocks on good news, youre chasing them. I am buying them on dips. This is that dip. Does it go through 43 like i say, which is approximately where ill own the stock . If it breaks 44 and stays beneath there, well, then ill load up a little more lower. I mean, i think wells fargo still a good company. The people that did what they did werent doing it for bonuses, scott, and they werent flipping those credit cards and charging things on those credit cards. They were opening accounts, which they shouldnt have done. All right. Theres wells fargo. Were continuing to watch that. By the way, new at noon, just now the fed releasing new information on the state of the consumer. Senior economics reporter Steve Liesman has that for us. Steve. Hey, scott. Second quarter Household Net Worth in the United States rose by a decent 1. 1 trillion to stand at 89. 1 trillion. Thats a new record. It also showed that Household Debt rose 4. 4 . Thats the second highest since 2008. Inside that Home Mortgage debt rose by 56 billion. Thats the biggest jump since 2008. If before you get excited about that, consider that household real estate value has risen by almost half a trillion. 408 billion or 1. 8 . You have somewhat rising debt, and much rising higher rising equity. Owner Real Estate Equity inched up to 57. 1 . Thats the highest since 2006 as americans claim more of the equity in their own homes. Speaking of equities, household equity or stock values by 471 billion in the Second Quarter to 21. 2 trillion. Go ahead and trade that, scott. Lets cut to the chase, though, steve. What happens next week . I think were going to talk about that after the break. Were going to do it now. Were going to talk about that now. I think they have to stay on hold. I dont think the sum adds up to the parts. I have a lot of fed guys and gals that are ready for the hike, but i dont think the committee is ready to push the button. Amazing your own opinion in the span of a handful of days feels like its really come back. I mean, this Economic Data that we got earlier in the week luke warm. Was a miss, miss, miss almost across the board. That was the problem. The big thursday data dump broke down the middle. Look, if they want to look past that and decide they dont need to be at emergency rate anymore, they can do that. Theyre also not getting the inflation they wanted, and theres a bigger question about whether or not we could go further in terms of getting the full employment rate and more of the people have dropped out back to work. Some of the fed folks seem to want to explore that. I think that theres my list the case for the hike and the case for the hold. Im siding on the hold, and i will be the first to admit, scott, that i have changed my mind a couple of times. I have changed it with the data as its come in. Do you feel like the fed is on the same page as you . Especially when i look at the market. When you look at the fed funds fut futures, we follow the reuters numbers, and theyre down to 11 for september. Thats where im siding. I dont know if anybody at this particular table the market would not be ready for it. The market would clearly not be ready, and wouldnt be happy. A lot of eyeballs. Stay with us. Were going to kick this around the desk now. Who wants first crack . Well, how about that medical expense part of the cpi, judge . The highest since 1984 . Running out of control. This precisely what aca, the Affordable Care act was supposed to address. It is exploding. Peoples premiums and so forth are going through the roof. This is bad news. Just unequivocal bad news. Meantime, Goldman Sachs says go negative on the s p. Theyre underweight the s p now. You agree with that, carl . I dont agree with that. We dont really know. It depends on whats going to happen over the next few weeks, and the shortterm market could ride. Look at the they say short run. Oh, by the way, they say 12 months also. I think you get some uncertainty. You go through the elections. I dont think things are as bad. Were talking about the fed looking we are not talking about things getting really bad. Were thinking about keeping them on hold and potentially doing rates. Not were going to be cutting rates. I get the asia call, skps i get the buying of europe because you have that aggressive stimulus happening. By the way, chooiina, the data coming out of china is okay. I get why theyre going there versus here, but here i want to be involved. I think its going to be definitely volatile in the next week. Especially the next week. I want to have some cash. Just raising a little bit. I want to buy into that. Once we get through the elections to sarats point, i think thats a great data point to get through, and i think thats when we go higher. One more yeah, go ahead, steve. One more side of this. I cant think of a reason why the fed would want to surprise the market. You see instances where the fed has felt like the market was too much one way. You felt like there was something to be gained. I cant see a reason why. Heres the conundrum here. What does a telegraph sound like . I sure as heck thought we were getting one a handful of days ago, and then that sort of evaporated, right . There were the comments about if you dont hike rates now, were talking about bubbles. Zroo call it my chart, and you youre slightly right. Yellen gets up in jackson hole and says the case is strengthening for a hike. There it is right there. Bill dudley seemed to side with it. Then the data came in luke warm, and the market reacted. The market did what it processed the data the way it thought the fed would process it. He is looking more towards a december hike. Were talking about literally a week ago. The market closed down 400, the dow did, didnt it . On the expectation that the fed was going to and the market was getting ready, and then all of a sudden it went the other way as the data came in and maybe were misprocessing the data. One thing is maybe were overrating the isms and the data thats come in recently, and the feds desire to hike despite the recent luke warm data. Joe this morning says he thinks the fed doesnt look that great by really reacting to the High Frequency data and not taking the view the way stephanie does, which is this longer run view of the overall economy. You were saying . I think you have to kind of say if the fed goes through with this and actually raises rates, were going to have a market thats going to say we dont understand the fed at all. Today i think the fed has to say if people really believe us, weve now sing signalled in the last week were not going to do anything. If the fed does raise rates next week, remember, steven weiss sitting on the desk here saying its a done deal. Then he backed away off of this after the data came in a little squirrely and soft. What do stocks do if the fed is just intent on doing it next week for the sake of doing it . If theyre intent on doing it, it does exactly i think, judge 10 probability. Nobody expects now its going to happen. Right. Well, so i said it will introduce a lot more volatility, and i said then you double up. Lets just say the fed does the 10 percent thing and hikes. The question i think investors have to ask certainly in the longterm how does that change your overall output for the half of rates . I dont know that it changes it very much. We are talking about whether or not a quarter point comes in september or december. Clearly the market would get freaked out. I dont know the number in terms of the correction, but it would be very volatile. You want to buy that because rates are going to stay lower for longer. Theyre going to gradually go up, and theyre still low. Especially by historical comparisons. I think its something that sarat alluded to. If they did go next week, it would seem to me that the market may second guess its ability to read the fed. The mark has been leading the show here. Not only that. Is the fed not want that clash . The fed sees the marketed as an instrument of its policy. I believe if you ask your average fed person, they would say that the reaction they want from the market on the day of the announcement is zero. They dont want to it up. They dont want it down. They would like the market to perfectly price in its own reaction. If they dont go next week, would it surprise anybody if the stock market, you know, goes higher . Right. But the idea that somehow the stock market is acting as a unified entity in this game and somehow expressing its views monolithically is wrong. The market is reacting the way its reacting as a result of gazillion different buys and sells, and thats how they arrive at that reaction. John would be happy if they did go. They would do really well next week. Buy the vix today at below 16 . I think to stephs point, yes, you do. You put on vix call spreads here just in case because that 10 is actually, i think, a bigger chance than 10 . I think you look at the financials that are showing really, really strong relative strength and positive price action because those are stocks that are rallying even as the odds of the rate hike have been decreasing. Go and take a look at cme. This stock is a monster. 40 off its 52week low. 17 above its 200 day. Got an rsi of 69. This is where all these rate bets are being placed. You get a vix with a lower risk play. Even a few more dollars in your pocket at the end of the day the vix the other one 110. First, the vix is going to end up mean reverting. Second, the products that are made based on the vix, you cant actually buy the vix itself are in my opinion subpar products. Certainly not good for investors. Although a handful are good for traders. I wouldnt even look at those at all, period. I think the interesting point that you are also that im also going to make, that coincides what you are saying make it quick. Its going to see rotation out of the bond subtutstitutess. Thats what you are seeing now. We have to pay some bills. Were going to get back to the apple. That morphed into banks. That morphed into the fed. That morphed into the market. Yes, when we come back, the apple sfoer, the other names you can play on the back of its big rally will do it next on the Halftime Report. Whats the value of capital . Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley experience the thrill of the lexus is f sport. Because the ultimate expression of power, is control. This is the pursuit of perfection. Were back on the Halftime Report. Were back to one of our top stories today, and that is this incredible run that apple has had. On pace for its best week if some five years. We were saying it was up week to september 11th 1 , and the prevailing thought appears to be on this set today that its justified, its not too far too fast, and that it can continue. Thats from everybody who has some sort of ownership stake either through options or equity. I worry that at some point its going to hit the 120, 125 wall like we had before. I think all the news will be baked into that point, and then people are going to look forward. Once you get all the news out, as to the samsung getting back to some type of normalcy, where do you take the next leg, and where do you break through . You really think samsung will get back to that normalcy any time soon . Right . A million phones recalled. Talking about this at the very time the 7 goes on sale . Today. Not everybody buys an iphone. Not everybody can afford an iphone. Theres only a certain market where you can spend 600 or 25 a month. Now you have the carriers doing the subsidies again. Its here. Its big news. If you own that market, its a good market. I think when they look at india, they understand that. Theyre not going into a 700 phones. I agree with you that theres only a certain market, but, hey, what if you got 80 of that market . Its pretty good. It is very hard to move this big needle. We will get that rally because you have a lot of investors coming in again, but how do you grow 600 billion company . Imp