Transcripts For CNBC Fast Money Halftime Report 20161118 : v

A new record high for the nasdaq today. Its a violent move away from bonds and into equities. It continues to gain team. Yes, the markets, josh, are in the red right now. Bank of america was out with a note today. Michael hartnet saying theyve seen the largest equity inflows in three years and the biggest outflows in three and a half years, the biggest disparity between stock and bond flows ever. Look, nothing brings out positive inflows to the Fund Industry like new record highs, and i think its compounded by the fact that people were way, way, way too cautious going into this. When you look at either the protection trades that went on or the people that were fleeing to cash, and i think thats the big takeaway, scott. Perceived safety has a cost. When you look at the tlt down 7. 2 in a week, when you look at gld, gold in general, down 5 , the mine e e minors down a lot. Its not always safe if you are unaware of what the other variables are, says and in this case the variables were people way under invested and paying way too much for the type of safety thats not going to help you with rates rising the way they have. Tom lee, you looked for this. You said the market was going to go up no matter who won the election, but are you surprised at how much its gone up since election day . Scott, its yes and no. I mean, the market is only up 2 . Were up total return, like, close to 8 . In an environment where most people are off sides thinking it was going to go the other way if trump won. The bigger move has been this huge rotation, right, into the value names, small caps, the laggards. The irony is these were all trades that were working into election day. They just all got turbo charged. The financial stocks, they continue to run. I could read off a whole bunch of great stats. Small caps. The kbe. 11 days in a row. Unbelievable. Nasdaq all the conversation about tech getting hammered. The nasdaq hits a new record high today. Youve got a big impact on some of the big tech stocks within that semi etf up 4 on the week. Airlines, allyear highs. I will pat myself on the back. Monday and tuesday, judge, there it is right there. Take a look at amazon. 709 or whatever was the low on tuesday. 780 today. I mean, so anybody that was throwing out some of those tech stocks, like when you and pete and i were going at it the other day, you dont want to throw out these stocks. These are stocks that are going to continue to work. Facebook is going to be, i think facebook is vastly undervalued here. Any chance i get to buy stocks like that on dips like weve got. Facebook still a bigger dip than amazon. I would jump on it whe. Just piggybacking with what he said on technology, i think tech stocks sold off for a couple of reasons. They led earlier in the year. The Global Supply chain was potentially disrupted. Obviously trump, you know, has had some draconian commentary as it relates to trooid tradade, a were rotating out of those sectors that were working just based on this information. I think its also important to know that president s dont dictate economic and profit cycles. They magnify them or they dampen them. In this case if you went into the election with the notion that profits were going to accelerate into the end of the year and the Economic Cycle was going to continue on this slow growth trajectory, that trump being elected is an unambiguous on those. Herbert hoor managed to pretty successfully throw us back into a depression that we were climbing out of. I think there is some potential for us to have an issue with global trade if, in fact, the administration is serious, but where i agree with you is we dont really know yet, says and you dont know, but the bar has been set so enormously low on that. The market is voting as if you know everything. Well, wait a second. We talk about the markets. Lets not forget that what could go wrong there . Weve been stuck in a rut. If you go back to july of 2015, we were at 2,100. Now were at 2,180. Its not like weve had a massive rally. Weve broken out of this, you know, just this basic trading range, and i think to your point we can go higher. A lot has to go right, but i think thats the point. A lot the market has already assumed everything is going to go right. Rates are going to be good. Part of dodd frank may be pulled back. Theres going to be infrastructure package. That theres not going to be a trade war. The market is not assuming that. The market is level setting itself because, guess what, the economy has improved. We are at full employment. We are waiting for wage inflation. Just harken back six months. Wages are never going to grow. Theyre not growing at all. Guess what, weve got wage inflation. Weve got actual inflation. Part of that is resetting in july we were priced for deflation forever, and now thats not the case. Now weve got it. Some people u. S. Centric, though. Markets of last week. What about stagflation . Weve already assumed were going to have 4 growth. Im with steve on this, and to 4 growth, i mean, look at the atlanta fed now, and you can take well, theyre saying 3. 6 as of yesterday for the fourth quarter. Thats on top of what will probably be revised to 3. 1 for the third quarter. Look, there is growth regardless of whats happening with the election and what may come in 2017. Growth has picked up. What could initial the rally continues. Thats where we want to go. It certainly can. What i think is more interesting, a better question than that is what happens with bonds. You know, rob, im sure you advise clients who are not are not not only in stocks, but about that stable portion of their portfolio, the bonds. Look, youve had 80 basis points of increase in yield on the tenyear treasury. For all of these flow outflows, ive got clients on sidelines with cash for bonds, and theyre saying, look, now its attractive. I completely agree with that. When you talk about markets, were spending a lot of time on u. S. Markets in u. S. Sectors. Emerging markets are certainly not pricing in anything great right now. The bond market certainly is looking a little bit scary, and i think both those are potentially overdone. Theres opportunities out you can have them. I mean, lets go back 2013. Do y you have the ten years over 3 . Lets go back to january of this year. That was a tantrum. That was a buying opportunity last i this year you had bonds at 2. 15 . Youre in a 30year bull market. We can go to 40 years. Zbloor its so much easier this week than last week than just one month ago. When they start getting those statements, how well are he they going to sleep when they see the tenyear going from 220 to 230 to 240, 250. Thats just for everyones for everyones benefit, just real quick, that is the biggest twoweek rise in 15 years, and its the second biggest in 30 years. If were thinking this is the new normal and were going on have a tenyear ripping, thats a great how do you view all this . The conversation taking place here . Well, i think thats its the conversation of the market. Nobody really knows the future. Are you betting that money continues to come out of bonds and into stocks and that gets you the possible 10 rally you called on this program maybe a week or so ago, if not ten days . Scott, i you know, we tend to do regimes analysis. We like to think in cycles, not business cycles, but, you know, longer pitches. I think pitches are rotation back into stocks. Remember, two trillion taken out of stocks since 2007. 2. 5 trillion to bonds. Thats a setup that we last saw into 1989, 1990, and that was if you look at a ratio chart, xlf versus xlu. A very longterm. Like a monthly chart, that is a ratio thats been disastrous for people betting on economic growth. Banks severely underperforming. Rrp just a standin for many others. If that whole paradigm has flipped, what are the ramifications for people who have bought into these kind of high dividend concepts, have bought into the staples . How much money has to change where it is now versus where it will be and where do you put yourself if you want to ride that wave . Yeah. Josh, we almost created a generation of people who have compensated for low Interest Rates by doing things like buying dividend, going into private equity, seeking leverage in order to juice up returns. Its made Equity Management a terrible business because now people fight over basis points. Thats the thing we have to imagine. A normalized rate world, equities a great business. Stock selection makes a ton of sense. Deregulation is a really big tail wind thats building, and i think if you look at the industry thats been the most regulated, its financials. What role is this conversation . Another high since 2003. As were having this conversation, ive heard people say, look, dont be so scared about the dollar because if the dollar is going up for the right reasons, if you think the economy is going to continue to pick up, then its a dollar relative. Theres a disconnect out there. Theres so many disconnects out there. Theres optimism in the euphoria. What it would mean, the dollar and copper. The dollar and crude. Now, we saw that connection there as crude was straightened out. If you take copper, copper, the change is coming at it, and its all speculation. Steel. Its all speculation. Theyre clamping down. Iron ore. All speculation, right . The dollar is rising. Those should be falling. Yet, freeport despite downgrasds keeps up there. Were seeing a disconnect with equities and bonds. Youre talking about buying bonds. If the equity market keeps flying because of trumps inflationary policies, you dont want to be anywhere near bonds. Yes the dollar so if the dollar is going to be strong because of economic policies here, i dont think you want to be in emerging markets. You dont want to be in emerging markets, and you dont want to that question is a function of your time frame. Everything is a function im a longterm player, okay . The idea that you dont want to be in emerging markets because they happen to be adversely affected by a temporary rally in the dollar i dont know that thats longterm thinking. You make all the assumption. The dollar goes up, and it goes up there and stays strong relative to other currencies. They keep save. Japanese coming to other ones. Stimulus isnt working like youre doing monetary stimulus. I want him to know you didnt have to work so hard thinking what im thinking. The underlying budget position is not a sustainable back drop for longterm dollar bulls. Offsetsing the negatives of rising rates and Dollar Strength versus emerging markets are fundamental valuations that are attractive. 1. 4 times book. If you believe in the global reflation story, there is going to be benefit that depending on trade policy, obviously, which is unknown, but a very low bar, that benefits longterm investors, not traders, longterm investors in these asset classes. Except for one thing, rob. Except currencies trade relative to other currencies. Right. As long as you have the japanese committed to buying everything out there, every as long as i have the chinese what does that do . Does the dollar keep running up . Since we went to the emerging markets, does any would anybody put fresh money to work in the emerging markets . Yes, yes. Broadly and specifically. Based on what . Based on the fact that emerging market people that manage these economies understand the dollar is at risk for them. Theyre not there is a lot of idiocincracies from one market to the next. You cant say up, dollar strong. Dollar up, rates going up, u. S. Getting better. Why would the riskreward be better somewhere else than here . Stocks have pulled back, and as they pull back, expect stocks to go higher. These are areas of the market that are, i believe, appropriately discounting the risk. They trade nowhere near the multiples of u. S. Bluechip stocks and even european bluechip stocks, and obviously bad things happen when the dollar rips or we all know this. Thats why you can buy them where you can today. Ill give you the last word before we have to let you go. Ee emerging markets . U. S. Best . Were your target on the end of the year is what . 2350 . 2,225. Point . I think ems, you know, shortterm has been hit because of the dollar leverage, right . If the u. S. Growth is picking up and inflation is picking up, i think its positive. I think josh is right. Did we get you a car today, or did you hike up the palisades to get here . I took a bus, and i had a metro card. I was hitchhiking part of the way. I had to sell my suit to get here. The vest is getting raves on twitter. You should be aware of that. Wanted to make sure we took care of you. Maybe a cup of water before i go. The impact of the election of donald trump has had on the markets, and he is continuing to fill out his administration with some major announcements today. Our john harwood in d. C. With the very latest there. John. Hey, scott. Three hardline appointments by donald trump today in keeping with the way he campaigned on issues of immigration as well as National Security. First of all, mike pompeio, congressman from kansas to be the cia director. He draws praise for his intelligence and temperament, but he is a hard liner. He has called for the Death Penalty for edward snowden, who leaked National Security secrets, and he has spoken about muslims in ways that former president bush and president obama have considered counter productive. Also a hard liner, Lieutenant General Michael Flynn to be National Security advisor. He is someone who has a more volatile temperament. He is also very bright, and he is praised for his intelligence background. Question about temperament is one that will follow him as people watch his performance, and finally, jeff sessions, the alabama senator as attorney general. Jeff sessions is someone who was rejected for a federal judgeship in the 1980s by the senate on grounds of his racial views. He is someone who is also tangled with Corporate America on immigration and not just illegal immigration, but legal immigration. When marco rubio, orrin hatch, and some other senators in both parties proposed an increase in the h1b visa program that Tech Companies have relied on. He said this would only quash the dreams of more talented americans than it would glut the market. It would keep pay down. He has singled out firms like hewlettpackard, microsoft, intel, apple. All for the abuse. What he considers the abuse of that program. That is going to be the nations top Law Enforcement officer if he is confirmed by the senate. Something of concern to those corporate interests that have used that program, guys. John, thank you so much. John harwood with the latest in d. C. I think the appropriate question is at what point, if any, do some of the appointments characterized by john as hardline and maybe others, hardliners, do they become a risk at all to the market . Does the market take a point of view that while they think now that trump will be positive for the stock market, thats why the market has done what its done, is there a reversal of opinion if you continue to get what some characterize as hardliners, as cabinet appointments. I think you will get hardliners overall. It depends what they actually do. The attorney general, what cases is he going to bring, says and indeed is he going to be a hardliner against exactly what he said and john cited from last year . If he is, then, yeah, those same Tech Companies that he might want to deny h1b visas to, apple, google, facebook, and those guys, they would probably get the focus of analysts to downgrade those stocks if that happens. If that happens. The market has been going up because everybody assumes and has been saying that trump is going to be great for the market. Trump will be great for i dont think he will agree with that. I dont think he will agree with that. I believe that the market is going up because it was already poised to go up. I had you had areas like materials, minors, industrials heading into the election, and all you needed was that certainty its over, and theres not going to be rye the ones in the strooefrt the outcome, and that unleashes the buying. We could quibble, and this sector wouldnt be up that much. Overall i think money would turn to the market when we had an election where the outcome was not in doubt. I think a return to the market because the election is over. Negative going in, and now theres some amount of optimism. We looked we did a survey in 25 of our clients were bulls going in. 30 . Health care and financials. Tech stocks would have. Thats the most i agree with a lot of what you are saying, but to say that banks went up, irregardless of the election and regardless of the fact that you missed what i said. The market. Now the market is driven by components. Hold on. Sectors we can say, okay, people are much more positive on banks because fill in the blank. Thats fine. I wont argue with you. What i am telling you is that the money, when you hear 39 billion net came back into equities, thats not a function of people saying, oh, this will be great for Steel Companies because x, y, z. The backup in yields is because trump regardless of it began before the election. The biggest the 55 the 55 bip back up in rates began before the election. The biggest ever movement of preexisting trends. Josh, please, come on. Thats a its because trump has inflationary policies. Thats what drove it. Thats what drove the massive move into equities. Hillary clintons economic plan was also a stimulus. It was a do nothing plan. And defense stocks and materials would have done well under either administration. Every government in the world is now hold on. 30 of the every deposit in the world is now selling stimulus. Its a huge break from 100 true. He is going to extend it. Every company in the world is selling fiscal stimulus. You didnt see what he had to say on twitter. Forget central bankers. Every single government in europe in the west, even china, im not saying theyre doing it, but bond market assets have been juiced, and didnt leave to the jobs. Josh, josh. That is why fiscal stimulus is the new centerpiece of every western government. I wish that were true, but youre wrong. No, im not. Yes. Okay. When you are dropping your currency, the currency that the chinese have done every single day, and they they have also allowed Infrastructure Projects to ramp back up. Infrastructure. Spending on infrastructure. Thats not stimulus . Thats fiscal stimulus. Absolutely. What do you think im saying . Youre saying they stopped monetary. Im saying fiscal stimulus is the new centerpiece. Just start talking. All right. I give up. I think the election outcome here is too brexit indicates the populous sentiment is not an anomaly, and elected officials ignore that at their own peril. Okay . On sunday well see if the trend continues. If Fund Industry<\/a> like new record highs, and i think its compounded by the fact that people were way, way, way too cautious going into this. When you look at either the protection trades that went on or the people that were fleeing to cash, and i think thats the big takeaway, scott. Perceived safety has a cost. When you look at the tlt down 7. 2 in a week, when you look at gld, gold in general, down 5 , the mine e e minors down a lot. Its not always safe if you are unaware of what the other variables are, says and in this case the variables were people way under invested and paying way too much for the type of safety thats not going to help you with rates rising the way they have. Tom lee, you looked for this. You said the market was going to go up no matter who won the election, but are you surprised at how much its gone up since election day . Scott, its yes and no. I mean, the market is only up 2 . Were up total return, like, close to 8 . In an environment where most people are off sides thinking it was going to go the other way if trump won. The bigger move has been this huge rotation, right, into the value names, small caps, the laggards. The irony is these were all trades that were working into election day. They just all got turbo charged. The financial stocks, they continue to run. I could read off a whole bunch of great stats. Small caps. The kbe. 11 days in a row. Unbelievable. Nasdaq all the conversation about tech getting hammered. The nasdaq hits a new record high today. Youve got a big impact on some of the big tech stocks within that semi etf up 4 on the week. Airlines, allyear highs. I will pat myself on the back. Monday and tuesday, judge, there it is right there. Take a look at amazon. 709 or whatever was the low on tuesday. 780 today. I mean, so anybody that was throwing out some of those tech stocks, like when you and pete and i were going at it the other day, you dont want to throw out these stocks. These are stocks that are going to continue to work. Facebook is going to be, i think facebook is vastly undervalued here. Any chance i get to buy stocks like that on dips like weve got. Facebook still a bigger dip than amazon. I would jump on it whe. Just piggybacking with what he said on technology, i think tech stocks sold off for a couple of reasons. They led earlier in the year. The Global Supply<\/a> chain was potentially disrupted. Obviously trump, you know, has had some draconian commentary as it relates to trooid tradade, a were rotating out of those sectors that were working just based on this information. I think its also important to know that president s dont dictate economic and profit cycles. They magnify them or they dampen them. In this case if you went into the election with the notion that profits were going to accelerate into the end of the year and the Economic Cycle<\/a> was going to continue on this slow growth trajectory, that trump being elected is an unambiguous on those. Herbert hoor managed to pretty successfully throw us back into a depression that we were climbing out of. I think there is some potential for us to have an issue with global trade if, in fact, the administration is serious, but where i agree with you is we dont really know yet, says and you dont know, but the bar has been set so enormously low on that. The market is voting as if you know everything. Well, wait a second. We talk about the markets. Lets not forget that what could go wrong there . Weve been stuck in a rut. If you go back to july of 2015, we were at 2,100. Now were at 2,180. Its not like weve had a massive rally. Weve broken out of this, you know, just this basic trading range, and i think to your point we can go higher. A lot has to go right, but i think thats the point. A lot the market has already assumed everything is going to go right. Rates are going to be good. Part of dodd frank may be pulled back. Theres going to be infrastructure package. That theres not going to be a trade war. The market is not assuming that. The market is level setting itself because, guess what, the economy has improved. We are at full employment. We are waiting for wage inflation. Just harken back six months. Wages are never going to grow. Theyre not growing at all. Guess what, weve got wage inflation. Weve got actual inflation. Part of that is resetting in july we were priced for deflation forever, and now thats not the case. Now weve got it. Some people u. S. Centric, though. Markets of last week. What about stagflation . Weve already assumed were going to have 4 growth. Im with steve on this, and to 4 growth, i mean, look at the atlanta fed now, and you can take well, theyre saying 3. 6 as of yesterday for the fourth quarter. Thats on top of what will probably be revised to 3. 1 for the third quarter. Look, there is growth regardless of whats happening with the election and what may come in 2017. Growth has picked up. What could initial the rally continues. Thats where we want to go. It certainly can. What i think is more interesting, a better question than that is what happens with bonds. You know, rob, im sure you advise clients who are not are not not only in stocks, but about that stable portion of their portfolio, the bonds. Look, youve had 80 basis points of increase in yield on the tenyear treasury. For all of these flow outflows, ive got clients on sidelines with cash for bonds, and theyre saying, look, now its attractive. I completely agree with that. When you talk about markets, were spending a lot of time on u. S. Markets in u. S. Sectors. Emerging markets are certainly not pricing in anything great right now. The bond market certainly is looking a little bit scary, and i think both those are potentially overdone. Theres opportunities out you can have them. I mean, lets go back 2013. Do y you have the ten years over 3 . Lets go back to january of this year. That was a tantrum. That was a buying opportunity last i this year you had bonds at 2. 15 . Youre in a 30year bull market. We can go to 40 years. Zbloor its so much easier this week than last week than just one month ago. When they start getting those statements, how well are he they going to sleep when they see the tenyear going from 220 to 230 to 240, 250. Thats just for everyones for everyones benefit, just real quick, that is the biggest twoweek rise in 15 years, and its the second biggest in 30 years. If were thinking this is the new normal and were going on have a tenyear ripping, thats a great how do you view all this . The conversation taking place here . Well, i think thats its the conversation of the market. Nobody really knows the future. Are you betting that money continues to come out of bonds and into stocks and that gets you the possible 10 rally you called on this program maybe a week or so ago, if not ten days . Scott, i you know, we tend to do regimes analysis. We like to think in cycles, not business cycles, but, you know, longer pitches. I think pitches are rotation back into stocks. Remember, two trillion taken out of stocks since 2007. 2. 5 trillion to bonds. Thats a setup that we last saw into 1989, 1990, and that was if you look at a ratio chart, xlf versus xlu. A very longterm. Like a monthly chart, that is a ratio thats been disastrous for people betting on economic growth. Banks severely underperforming. Rrp just a standin for many others. If that whole paradigm has flipped, what are the ramifications for people who have bought into these kind of high dividend concepts, have bought into the staples . How much money has to change where it is now versus where it will be and where do you put yourself if you want to ride that wave . Yeah. Josh, we almost created a generation of people who have compensated for low Interest Rates<\/a> by doing things like buying dividend, going into private equity, seeking leverage in order to juice up returns. Its made Equity Management<\/a> a terrible business because now people fight over basis points. Thats the thing we have to imagine. A normalized rate world, equities a great business. Stock selection makes a ton of sense. Deregulation is a really big tail wind thats building, and i think if you look at the industry thats been the most regulated, its financials. What role is this conversation . Another high since 2003. As were having this conversation, ive heard people say, look, dont be so scared about the dollar because if the dollar is going up for the right reasons, if you think the economy is going to continue to pick up, then its a dollar relative. Theres a disconnect out there. Theres so many disconnects out there. Theres optimism in the euphoria. What it would mean, the dollar and copper. The dollar and crude. Now, we saw that connection there as crude was straightened out. If you take copper, copper, the change is coming at it, and its all speculation. Steel. Its all speculation. Theyre clamping down. Iron ore. All speculation, right . The dollar is rising. Those should be falling. Yet, freeport despite downgrasds keeps up there. Were seeing a disconnect with equities and bonds. Youre talking about buying bonds. If the equity market keeps flying because of trumps inflationary policies, you dont want to be anywhere near bonds. Yes the dollar so if the dollar is going to be strong because of economic policies here, i dont think you want to be in emerging markets. You dont want to be in emerging markets, and you dont want to that question is a function of your time frame. Everything is a function im a longterm player, okay . The idea that you dont want to be in emerging markets because they happen to be adversely affected by a temporary rally in the dollar i dont know that thats longterm thinking. You make all the assumption. The dollar goes up, and it goes up there and stays strong relative to other currencies. They keep save. Japanese coming to other ones. Stimulus isnt working like youre doing monetary stimulus. I want him to know you didnt have to work so hard thinking what im thinking. The underlying budget position is not a sustainable back drop for longterm dollar bulls. Offsetsing the negatives of rising rates and Dollar Strength<\/a> versus emerging markets are fundamental valuations that are attractive. 1. 4 times book. If you believe in the global reflation story, there is going to be benefit that depending on trade policy, obviously, which is unknown, but a very low bar, that benefits longterm investors, not traders, longterm investors in these asset classes. Except for one thing, rob. Except currencies trade relative to other currencies. Right. As long as you have the japanese committed to buying everything out there, every as long as i have the chinese what does that do . Does the dollar keep running up . Since we went to the emerging markets, does any would anybody put fresh money to work in the emerging markets . Yes, yes. Broadly and specifically. Based on what . Based on the fact that emerging market people that manage these economies understand the dollar is at risk for them. Theyre not there is a lot of idiocincracies from one market to the next. You cant say up, dollar strong. Dollar up, rates going up, u. S. Getting better. Why would the riskreward be better somewhere else than here . Stocks have pulled back, and as they pull back, expect stocks to go higher. These are areas of the market that are, i believe, appropriately discounting the risk. They trade nowhere near the multiples of u. S. Bluechip stocks and even european bluechip stocks, and obviously bad things happen when the dollar rips or we all know this. Thats why you can buy them where you can today. Ill give you the last word before we have to let you go. Ee emerging markets . U. S. Best . Were your target on the end of the year is what . 2350 . 2,225. Point . I think ems, you know, shortterm has been hit because of the dollar leverage, right . If the u. S. Growth is picking up and inflation is picking up, i think its positive. I think josh is right. Did we get you a car today, or did you hike up the palisades to get here . I took a bus, and i had a metro card. I was hitchhiking part of the way. I had to sell my suit to get here. The vest is getting raves on twitter. You should be aware of that. Wanted to make sure we took care of you. Maybe a cup of water before i go. The impact of the election of donald trump has had on the markets, and he is continuing to fill out his administration with some major announcements today. Our john harwood in d. C. With the very latest there. John. Hey, scott. Three hardline appointments by donald trump today in keeping with the way he campaigned on issues of immigration as well as National Security<\/a>. First of all, mike pompeio, congressman from kansas to be the cia director. He draws praise for his intelligence and temperament, but he is a hard liner. He has called for the Death Penalty<\/a> for edward snowden, who leaked National Security<\/a> secrets, and he has spoken about muslims in ways that former president bush and president obama have considered counter productive. Also a hard liner, Lieutenant General<\/a> Michael Flynn<\/a> to be National Security<\/a> advisor. He is someone who has a more volatile temperament. He is also very bright, and he is praised for his intelligence background. Question about temperament is one that will follow him as people watch his performance, and finally, jeff sessions, the alabama senator as attorney general. Jeff sessions is someone who was rejected for a federal judgeship in the 1980s by the senate on grounds of his racial views. He is someone who is also tangled with Corporate America<\/a> on immigration and not just illegal immigration, but legal immigration. When marco rubio, orrin hatch, and some other senators in both parties proposed an increase in the h1b visa program that Tech Companies<\/a> have relied on. He said this would only quash the dreams of more talented americans than it would glut the market. It would keep pay down. He has singled out firms like hewlettpackard, microsoft, intel, apple. All for the abuse. What he considers the abuse of that program. That is going to be the nations top Law Enforcement<\/a> officer if he is confirmed by the senate. Something of concern to those corporate interests that have used that program, guys. John, thank you so much. John harwood with the latest in d. C. I think the appropriate question is at what point, if any, do some of the appointments characterized by john as hardline and maybe others, hardliners, do they become a risk at all to the market . Does the market take a point of view that while they think now that trump will be positive for the stock market, thats why the market has done what its done, is there a reversal of opinion if you continue to get what some characterize as hardliners, as cabinet appointments. I think you will get hardliners overall. It depends what they actually do. The attorney general, what cases is he going to bring, says and indeed is he going to be a hardliner against exactly what he said and john cited from last year . If he is, then, yeah, those same Tech Companies<\/a> that he might want to deny h1b visas to, apple, google, facebook, and those guys, they would probably get the focus of analysts to downgrade those stocks if that happens. If that happens. The market has been going up because everybody assumes and has been saying that trump is going to be great for the market. Trump will be great for i dont think he will agree with that. I dont think he will agree with that. I believe that the market is going up because it was already poised to go up. I had you had areas like materials, minors, industrials heading into the election, and all you needed was that certainty its over, and theres not going to be rye the ones in the strooefrt the outcome, and that unleashes the buying. We could quibble, and this sector wouldnt be up that much. Overall i think money would turn to the market when we had an election where the outcome was not in doubt. I think a return to the market because the election is over. Negative going in, and now theres some amount of optimism. We looked we did a survey in 25 of our clients were bulls going in. 30 . Health care and financials. Tech stocks would have. Thats the most i agree with a lot of what you are saying, but to say that banks went up, irregardless of the election and regardless of the fact that you missed what i said. The market. Now the market is driven by components. Hold on. Sectors we can say, okay, people are much more positive on banks because fill in the blank. Thats fine. I wont argue with you. What i am telling you is that the money, when you hear 39 billion net came back into equities, thats not a function of people saying, oh, this will be great for Steel Companies<\/a> because x, y, z. The backup in yields is because trump regardless of it began before the election. The biggest the 55 the 55 bip back up in rates began before the election. The biggest ever movement of preexisting trends. Josh, please, come on. Thats a its because trump has inflationary policies. Thats what drove it. Thats what drove the massive move into equities. Hillary clintons economic plan was also a stimulus. It was a do nothing plan. And defense stocks and materials would have done well under either administration. Every government in the world is now hold on. 30 of the every deposit in the world is now selling stimulus. Its a huge break from 100 true. He is going to extend it. Every company in the world is selling fiscal stimulus. You didnt see what he had to say on twitter. Forget central bankers. Every single government in europe in the west, even china, im not saying theyre doing it, but bond market assets have been juiced, and didnt leave to the jobs. Josh, josh. That is why fiscal stimulus is the new centerpiece of every western government. I wish that were true, but youre wrong. No, im not. Yes. Okay. When you are dropping your currency, the currency that the chinese have done every single day, and they they have also allowed Infrastructure Projects<\/a> to ramp back up. Infrastructure. Spending on infrastructure. Thats not stimulus . Thats fiscal stimulus. Absolutely. What do you think im saying . Youre saying they stopped monetary. Im saying fiscal stimulus is the new centerpiece. Just start talking. All right. I give up. I think the election outcome here is too brexit indicates the populous sentiment is not an anomaly, and elected officials ignore that at their own peril. Okay . On sunday well see if the trend continues. If Hillary Clinton<\/a> had been elected and you would have had a Republican Congress<\/a>, you would not have had a magnitude of the rally that we have got. Its impossible. It just wouldnt have happened. It wouldnt have happened. Disagree. Again, from health care and financials, that is 28 to 30 depending on the weighting right now of the s p 500. You get the benefit of tech. Flip it. By the way, our financial because of rates. Anticipation. Hang on a second. You can choose either way. Before we give tom lee a bongs lunch and send him on his way. Regardless of who was elected, however the dynamic of a Trump Presidency<\/a> with a Republican Controlled Congress<\/a> where he can more easily get through the types of things that will project the sectors that are already going up to continue to go higher would have had a more positive impact than Hillary Clinton<\/a> being elected with a Republican Congress<\/a> . Do you agree or disagree with that statement . Thats a lot to its a lot that you said. Im just telling you, Trump Presidency<\/a>, trump congress. Hillary presidency, Republican Congress<\/a>. Youre telling me that the market would have gone up at a level it has . Weve already passed your stimulus in the stock market . One of the things that would have been different is hillary would have been thats probably helpful to risky assets in general, and so its less of a risk as we think about it today. You know, as our policy owns do you think the fed wouldnt have tightened in december if hillary were president . I think we would be less worried about interference, political interference of what the fed is doing. The first time in at least eight years you have the process pictures of the fed. Yes, they may hike. Rates are going to remain low. The cavalry is finally with the fed. Before it was the fed, were the only ones on the battlefield. Now the cavalry has arrived to try and goose the whole thing. We are waiting for the handoff for monetary to fiscal stimulus. You wait for it. We got it. I think the other thing we have to remember is i think if you did a checklist of corporate taxes, recollect las vegas, i think hillary and trump would have been seen as more favorable for business versus the current administration. I mean, we kind of wrote about it this week. New rules implemented in just the last eight years. 25 increase in federal regulatory staff. I mean, thats costing u. S. Businesses 100 billion. The entire obama agenda, she wasnt going to dooeviate from at all. Im not sure about that. I agree with steve on this. Sanders, bernie sanders, they were not proeconomy. They werent probusiness. They were lets put more regulation on. Dont lose sight of how strong this guys, dont lose sight of how strong this economy was despite the election. Whether its home starts, whether its industrial production, whether its weekly jobless claims, gdp, these numbers have all started to crescendo, and it has nothing to do with the election. Ill agree with that. Tom, thanks. Thanks, guys. Interesting. I hope you didnt miss the bus. Im going to be sitting at the bus stop for another 45 minutes. Were back right after this. The greatest population shift in Human History<\/a> is happening before our eyes. Sixty to seventy Million People<\/a> are moving to cities every year. At pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. Partner with pgim the Global Investment<\/a> management businesses of prudential. This is where i trade andrs. Manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access<\/a> 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. Hi, everybody. Welcome to the Halftime Report<\/a>. Im sue herrera. The federal reserves is expanding its restrictions on where its employees can go to work after they leave the agency. The central bank is trying to address criticisms about a revolving door between the fed and wall street. The currently rules, which apply to senior officials, restrict them for one year from working for an institution over which they had primary responsibility. They are now iks paexpanding th. In its essence doubling those that fall under those rules. Scottie, back to you. All right. Sue, thank you so much. Well, throwing cold water on one stock in the big bank rally. Bmo downgraded wells fargo to sell. Thats after the stocks double digit run since election day. Its our call of the day. Naturally they say curb your enthusiasm. Doc, im going to you first. Youre the one who jumped in. Pounded the table, i believe. In the midst of the worst of the you remember . Everybody was saying, well, he is going before congress. You cant hold the stock at 45 a share. 44. 80. You cant hold this stock. Guess what . The stock is hire. Runs all the way to 52. There was no single better stock to own in the space. Now is it over . Yes. You agree with the note . I sell. I buy fear, and i sell greed. I bought on fear. Im selling greed. He was not you did not make as much in the better managed banks, but you did very, very well. Jp morgan, goldman. Go down the list. If you were in the regionals, you made more than wells fargo. You did not have to take the risk of a worse outcome in front of congress to get it. The danger of the downgrade like this, of course, is that if the banks continue to work as a sector, wells is going to join wells is not going its a stupid call. Not going to stay. Its a dumb call. I dont know how else to say it. Any stock at any point in time is 10 down side. He is worried that im always worried about 10 down. The point the analyst is making is that what they say in the headline. Curb your enthusiasm. Were assuming he is saying sectorwide. Were assuming its better for the banks. What they have going is absolutely explosive. Sometimes you need a wakeup call. They got the wakeup call. They still have the only arated Balance Sheet<\/a> in the industry. Its a very potent Balance Sheet<\/a>. Business is very, very strong. This is a bump along the road. That is how growth is not coming back. First of all, new accounts opened. Down 77 in october. Their entire way of doing business has to change, and it will change. It will be longterm positive. Its not like its no big deal. Just a blip. Forget about the financial costs of the fines. Forget about lawsuits. Were talking about, a, reputational risk, which is not a oneday event, and bigger picture, what are the snentiv e incentives for all the employees that work in wells branches. What are their incentives to grow the business . Its not going to be the same rate of growth, and i think you are going on have to adjust that multiple longterm back down to where the other banks are. The tail winds of the sector mitigate much of the down side. Right . Financials, that could right . Theres a lot happening in the sector, whether it be deregulation. I mean, listen, if you end up if you end up making some major change from a tax perspective as it relates to carried interest, think about the m a boom that could come out of it. Its going to theyre not. Wells fargo, is it a player in m a . But they are a player retail bank account. You got a choice in any corner. Citigroup, bank of america, and wells fargo. Which one is it going to go . We have not even mentioned this. Is this a negative for wells if it Interest Rates<\/a> continue to go up and it slows housing, and mortgage originations . They would run a lot of mortgages at welds. Mortgage rates are back over 4 . The bank continues to heres where their opportunity is. Their opportunity is that they have not been real big in investment bank. Its not been they had been huge. You like credit. Theyve been huge in investment grade. Huge. Okay . Okay. Theyre like the biggest. They came out of nowhere. Underwriting. They have that. So the transition there from investment banking, okay, is not that big. Other firmds have made that. They rejigger their businesses, and i think the plans sort of flip. I think its a great opportunity. Happens if housing slows considerably . I think thats overstating . Jim and i were talking about this at the beginning of the show. You have a Millenial Generation<\/a> that represents 25 of the population that is moving into their peak spending and earnings year. And wants to rent. Why do they want to rent . Thats why multifamily hey, scott. Because of their jobs market. What they are going to do for this economy and its very powerful is they are the most educated generation weve ever had, and theyre the most tech savvy, and that is absolutely deflationary because everything that they look at to buy, they can check the price immediately. You have Growth Without<\/a> inflation. Thats a great thats a great time to be an investor. Playing for the long haul. We are live coming up with Detroit Lions<\/a> safety glover quinn. He saves and invests 70 of his salary. Well find out where he is investing. When the Halftime Report<\/a> continues. Mary buys a little lamb. One of millions of orders on this companys servers. 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Welcome back wrur Vice President<\/a> elect mike pence, the head much his Transition Team<\/a> arrived at trump tower for more meetings. Great working with president elect. He is a man of action. Weve got a great number of men and women, great qualifications come forward and serve this new administration, and im humbled to be a part of it. German chancellor Angela Merkel<\/a> fueling talk of running for a fourth term during a joint News Conference<\/a> with the spanish prime minister. She says she feels a duty to serve her country and europe. The fouralarm blaze at a palate yard in riverside county, california. This is the fourth palate fire in the past few weeks, and officials are investigating for arson. That is the cnbc news update this hour. The Halftime Report<\/a> is back after a quick break. Welcome back to the Halftime Report<\/a>. Shares of underarmour under pressure. Now down 5 . Outpacing the broader markets declines. Poised to snap a winning streak. The down side move is being attributed at least in part to some measured commentary from footlocker that reported earnings earlier today. During the footlocker conference call, the ceo made some positive comments about under armour, and the release of the latest steph curry shoes, but did make a passing mention that sales were slower than previously mentioned to start, but it was still early days. Shares have lost a quarter of its value. The value estimate on wall street still implies a 20 up side. Back over to you. Thank you so much. Im looking at the comments from the ceo of footlocker, richard johnson, who said the curry 2. 0 and 2. 5 performed well during the quarter, but the 3. 0, which was released on the 27th started off a bit slower than the two previous models. Again of course its early days, he says, but is this something to worry about . As important as curry means to their footwear business its what ive been saying. Bet on footlocker. Footlocker is up today. Under armour is down. You have been on footlocker, to your credit, for you sound surprised when you say that. No, not really. Im not feeling the love today. Not feeling it from josh. Im feeling a little bit a lot from him, but just a little . Starting to worry about your temperament. I think he is unfit, scott. Busting my chops. Week 11 of the nfl season kicked off last night on nbc with a Carolina Panthers<\/a> hosted the new orleans saints. Panthers eeking out a win over their division rivals. The final there 2320. That was a great touchdown by ted ginn. Dont miss sunday nights matchup on nbc between the green bay packers, the washington redskins. On the newsline right now is Detroit Lions<\/a> safety glover quinn and when it comes to money, you may be an all pro saving 70 of his salary for investments. Glover, its good to talk to you. Good to talk to you, guys. I was reading an article where i saw that you live by what you call the plan. Im wondering what the plan exactly is and where it came from. The plan for me is, obviously, save as much money as i can and spend as little as i can in the time that i have in the league so that i can maximize my future. Thats really the plan. I had a goal of how long i wanted to play, and i knew if, you know, for me be to able to walk away at that time, i needed to save as much money as i could, and that was really how it started. You have invested in a wide variety of companies. Something called health warrior, paw tree, pure well, and am i right that you are an investor as well in fan duel and draft kings . Is that correct . Correct. What interest do you have there, and maybe you even heard earlier today that those companies are actually merging, so congratulations for your investment in those businesses. I guess that theyve done pretty well. Yes. I think thats i think thats a great move. I mean, obviously they are two Great Companies<\/a> that bring something to sports that the fans love. I mean, they love fantasy. They love being a part of it, and, you know, instead of having to have a team that you have the whole year, you get to do it day by day by day. I think the fans love it. When you got two Major Companies<\/a> competing for the same people, you know, it could be difficult. For them to merge and create, you know, one Dynamic Company<\/a> i think its going to be good. You know, some of the other companies, you know, for us it was just kind of finding something that we love, something that we wanted to do and something that we wanted to be a part of. Were big on health. Health warrior was a great company. You know, creating bars and snacks. Chia seeds is the great super food. We were able to get involved with that company. Paw tree has helped. Its with animals. Its dogs. Its a very, very, very unique company as well. Are you mostly investing in what it seems are private companies, or do you have an interest in the stock market . Do you invest in stocks as well . I got some stuff in stocks. You know, longterm stuff. Its kind of safe stuff. I dont invest i think the i dont invest 70 of my money in private equity. I dont think that would be very smart. I do try to save 70 of my money and then take a 10 to 20 and invest it in private Equity Companies<\/a> and things like that. One of my guys here on the set has a quick question for you as well, glover. Just to comment. I want to commend you for thinking differently than looch your pieeers. Thats often really tough to do. To have a goalsbased approach to what you are trying to achieve. Not everybody can do that, and if you are thinking about life after football, we should talk. Rob, he didnt tell you before he made his sales pitch that he is one of the top ranked Financial Advisors<\/a> by barrons magazine. I had to put that disclaimer in there. Thats good, man. Thats really good. Yeah. I mean what did you say . Finish your thought. Im sorry for interrupting. I was going to piggyback on what he said. I see so many guys that come into the league and, you know, you ask him how long they want to play, they will say im going to play until i cant play anymore. I always kind of felt like if i had that approach, i probably would spend my money or treat my money like im going to play for a long time because when you say im going to play until i cant play anymore, i mean, you may play two years and cant play anymore, but if you have spent all your money thinking that youre going to play ten, 15 years, you know, that could be a bad situation for you. Yeah. I always wanted to have a goal. I wasnt guaranteed to play all these years, but for every year that i was playing, i was able to put that much away and then it just stacked up over the years. We commend you for it. We appreciate you spending time with us. Best of luck the rest of the way. All right, man. Thank you, guys. Appreciate it very much. Glover quinn, Detroit Lions<\/a>. Lets get to Brian Sullivan<\/a> now for a look at whats coming up on power. Hey, scott. Thank you very much. A huge show ahead on power lunch. Well talk about trumps tax plan. How you can look for and profit from the overhaul of the tax code. What Business Leaders<\/a> say is job number one for the new administration. This is your mystery stock of the day, folks. It is higher today. It is now up 95 this year. You know who it is . Well take some guesses. Well give the name and the ceo coming up on power lunch. Halftime returns right after this. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. I think what were looking at is an adjustment of fed expectations and comments that there mighten a lot more going on in 2017 than we anticipated. Not just on the back of president elect inflation, but on the back of some green chutes in the economy. 25. 5 increase in housing starts. We have the dow jones transports up 15 of 18 days. We are ready at the high end of the predicted range. How much higher can we go . I like bobs target. This is a historic move. I think the rally that will fuel the next leg up in the all right, bob. Thanks. We have the Live Streaming<\/a> show on line. More Halftime Report<\/a> coming up after the break. Hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. They are the natural borns enemy of the way things are. Yes, ideas are scary, and messy and fragile. But under the proper care, they become something beautiful. Our special today is the dont you hate that . When they dont tell you how much something costs and you have to ask . Maybe thats why i always make sure to. Bring up the costs associated with your services. I know. Transparency about costs. Just one way edward jones makes sense of investing. Were back. Final trades before we head into the weekend. Ken shaw, our partners there, had an interesting list out, based on the 50 moving day averages of stocks, which are most overbought and oversold. Overbought, according to this list, target, invidia, disney. All of them are rallying, disney in particular. It is bursting out. Amazing call on invidia. He did, indeed. Ralph lauren and kohls on the overbought list. Kohls came back from the dead, man, put up a great quarter. And not expensive yet, but im not a buyer. Oversold, pepsi, philip morris, facebook. You know where i stand on facebook. It did get oversold. I think this stock is easily over 130 at the end of the first quarter. 50 Day Moving Average<\/a> is high frequency, will catch up in one direction or the other. Overbought and oversold is the function of rsi, not distance from rob, thank you. Thank you for having me. Power lunch starts right now. Welcome, everybody. Cabinet appointments, ceo meetings and major market milestones, it is a trump trifecta topping your power menu today. Speaking of menus, some big changes are coming to your local mickey ds. Picture high tech big macs. And total panda emonium. We sent two panda cubs back to china. Power lunch starts right now. 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