Look at the vix at 11. Yep. The vix is at 11. Yesterday somebody came into the s p 500 pit in the last hour of trading, and bought a whole bunch of protection that expires monday next week. These are s p 500 puts at the 2250 strike. They have already lost a pile of money on that trade. Put up 4 million, lost 5 or 600,000. So the big money is still protecting. Is not complacent. They have been doing similar things in the vix pit. Putting on protection ahead of the jobs report. And or whatever might be tweeted or happen over the weekend. With the interview, for instance, with the president before the super bowl on sunday. All of that could impact the markets, and some people want protection. So i wouldnt say its complacent. I would say that its right where it should be. Youve got the Missile Launch in iran. You have the whats termed the tough call with the australian prime minister. Comments about mexico. And oh, by the way, a fed that could move in march as rick reader told us yesterday. Are we able to deal with all of that . Are we paying enough attention, joe, to those risks . Well, i think tomorrow is pretty important. I think the jobs number, if it comes in as strong as expected, i think that will telegraph to you. Im not necessarily sure the Federal Reserve moves in march, but well worry about that when that happens. I think you need the financials here to participate, once again. And i think thats truly the story. If we are going to take the market from where it is right now, which appears to be pausing on the absence of any economic priority for these policies. Doesnt seem like the economic policies are a priority right now to the administration. We need tomorrow to reengage the financials once again. They have to participate to take the next when was the last time, pete . When was the last day . Because i certainly cant remember the day where we spent the majority of talking about the president and his agenda in terms of taxes and regulation and infrastructure. Well were talking about tough talk with a prime minister. Right. Were talking about comments he makes about x, y, z topic. Yeah. I think we have been so focused on the right thing. And quite honestly, the earnings. Actually, about a week or so ago, i remember sitting around on the desk here and next to me sat stephen weiss, talking about how much cash he is in at this time. And we were both around the same thing, 35 to 40 cash. We have gotten through a big chunk of earnings. Its essentially one or two big names a day since that time. The focus is now going back. We have gotten through the big financials, much of the Big Technology names and now all of a sudden more focus on whens going on in washington. And phone calls. Ill use this phrase that david tepper used some years ago. Is it nervous time . Nervous or cautious. Some of this constitutional constitutional going on in d. C. Thats a risk. I think it has been nervous time for quite a few weeks here. We talk about the s p 500. And the vix, which measures s p 500 volatility. Underneath that, individual stocks are moving so much more greatly than the underlying indic indices. What that tells me, individual stocks, whether its financials, cyclicals, retails, doesnt matter. Each are responding with much more nervousness, caution than the overall markets. Theyre balancing out. Some up, some down. Individual stock volatility is much higher. Lets listen to bill miller from this morning on squawk box, who had some interesting comments about the landscape and how he sees where people should be putting their money to work right now. Here is bill miller. The great 35year bond bucket ended this summer with a double bolt. And i think were looking for a long bear market thats going to be a benign bear market, i believe. But still a bear market. To stocks are underpinned well by the fact there isnt much else to do with your money at the short end of the curve. Okay. So thats the flip side of all of this. But thats the could ca co nun drum, stimulating growth towards 3 and 4 . Youre not getting that when you have a u. S. Tenyear treasury below 250. To you have question, why is that occurring. Youve also lost a participation in the correlation between Higher Crude Oil prices and Energy Equities. Again, you have to ask yourself, what is that telling you about the market . And we lost the correlation, or is that yeah. Really . Or has it flattened out . No it hasnt flattened out. I disagree. Energy equities ektsz. When you look at oil where is it sitting right now . Pete, thats what i just said. I said Energy Equities lost the correlation with the price of oil. Spot price of oil is unchanged over the last five days. Energy equities are down 5 . That correlation is broken down. What is that telling you . Can i just point out to your comment that you say the question about 3 to 4 growth. That question is going to linger for a while. There is a shortterm answer, the atlanta fed came out and put its q1 gdp estimate. Were halfway through not halfway through. They put it at 3. 4 s. That going to be accurate . I dont know. But thats just one data point. You put that on top of the ism survey from yesterday, which was very good. And i think we all agree would be a jobs report, at least tomorrow we think its going to be very good, as well. Well, based on what adp was. Huge. But what about the other issue, paul, of the dollar . Goldman has a note out today that says this is not, and not in all caps, the end of the dollar bull run. Say after all, fiscal stimulus and protectionism is hard to reconcile, even with the new administration wants. One of the many people in december that said euro is going to break parity this year, scott. I took that view on strongly. The problem with the dollar, we all reacted to trump, and thats fine. But when you buy the dollar, you sell something. And then that case, it was selling the euro. Euro is actually doing well. The fact that there is so much liquidity out there, the low currency, and this whole european political situation that everybody was so worried about is not an issue, in our opinion. So the euro back to 108, i rec on will go to 110 and then think about selling it. They might be right, but i think that people are trying to play with the view. There it is. Just about 108. Joe, meantime, were having this conversation about whether you should be nervous or cautious or whatever. Youre buying some banks today. I had bought some puts the other day, overall for the russell index itself. And i think, listen, as i said before, do i know with certainty its going to occur . If Economic Growth is going to accelerate, were going to get a good jobs number tomorrow. What has been underperforming lately, thats been financials. Gold back into my Goldman Sachs situation, added to bank of america. Strong number tomorrow. I would think the most sensitive should be the financials. I could be wrong. Wouldnt be the first time. Joe, when you look at european financials, i dont think theyre in position for q4. U. S. Financials did. And thats why the u. S. Financials are outperforming. You look at the deutsche result today, and ubs the other day. This is why i think u. S. Financials are doing better than europeans now. U. S. Financials up 17 . I love them. They have been stuck look at the xlf right now. 23. 20 to 23. 80. Thats where its been. So youre just looking and its kind of in this grind. And the rotation now seems to be rotating into other areas right now, scott. Theyre going to get a little more bang for their buck. I love bank of america still, still own it. But i dont see it necessarily going anywhere very fast at this point in time. And as far as the tlt and bonds in general, when you see a breakout above 260, for instance, then bill miller will be right. But until then, he might be right about a double bottom. But we could tread water between 2 and 250, 260, for the entire year. And one of the reasons is, catalysts like the repatriation of money. The tax changes, which kind of plays into that. That is a second half story. So that is not going to be the big inflation igniter in this first half of the year. In my opinion. So youre not nervous at all about where we are in the market . No, sir. Right now . No, im not. Why not . Im not suggesting you should be. I just want to know why youre not. Well, im not saying massive bets, for instance, on tail. Tail is, of course, right out here, the black swans, we call that. Tail risk, as well. Im not seeing the bets out there. Im seeing smart people hedging, whether theyre big vol funds, whether theyre hedge funds and so forth. I see them hedging. But i dont see them making massive bets out on the tails. When i see that, that tells me that people are really nervous and they are thinking, boy, we could open down, you know, 800, 1,000 points. Thats not happening right now. So im not as nervous. Scott, let me answer the same question a different way. There are so many stocks out there that are still trading cheaply. Yes, the overall market is at 17 times. And even if thats not the right price, google is well below its historical multiple, and you strip out the cash, its right at the market. That to me is nuts. There are many industrials and cyclicals well below the multiple. We could go across the board doing this. A lot of cheap stocks out there. Lets discuss facebook. It is in focus this hour. The Company Reported strong results, as you know. 70 million new monthly active users. Ad revenue up 53 . However, one of the Big Questions out there today, is peak facebook. Ive seen some notes, articles rain about that. Dow jones had one, questioning whether this is peak facebook. How much better can it really get. Well, Facebook Live is an explosive success for these guys, right . I mean and the amount of folks that go on that when they do have Martha Stewart or any of these other folks that are big draws on Facebook Live. I heard from one of her people last night that i was out with. She said martha has been on about 60 times on Facebook Live. And each time the numbers are through the roof. Obviously, advertisers want to reach those folks that are on Facebook Live. So this is not instagram. This is not whats app. This is Facebook Live. And its yet another lever they can pull. I still like the up side here. But i am not so much concerned, but im noting that each time they have blowout earnings, the stock trades up in the after hours. And it gives it up by the regular session. So what does this mean, then . What does it mean they had what most people would be consider to be blowout numbers . It was a great quarter. Why is the stock down 1 . Maybe the conversation as far as spending. But for a company like facebook, im okay if theyre going out and theyre actually going to spend. And i think maybe thats some of the trepidation of advancing the stop further than where it was in after hours. And the lawsuit joke. The 500 million the fact that 85 are Global Digital advertising either going on facebook or google. Thats really hard to ignore. Theyre getting bigger. So what if i tell you, monthly active users up 17 year over year. Great number. But growth in revenue per user decelerated to 29 versus 35 are sequentially from the prior quarter. Revenue growth slowed in the u. S. And canada. Well, i think what youve got to look at is zuckerberg put out the tenyear plan which i think is absolutely fell. Hes focused on acquisitions and how to monetize. Look at instagram. It is blowing the doors away against snapchat. Although everybody wants to talk about snapchat. They got 600 million users right now on instagram. So they are winning in that game. Also, if you look at the video side of it, scott. The video is the growth. John talks about live. Video is the growth, theyre going after youtube. Absolutely and directly. Right after them. But the problem was last night, during the call, when they started talking about all the spending they have got to do, to build this thing out, thats when the stock went from 137 to 135 to 134 and then to flat. A lot of concerns are there because of the spend. Lets bring in josh brown, calling in on the phone for us. Josh, are you there . Whats your read here . It was a good quarter, but enough to justify the valuation that facebook currently trades at, which is 25 times forward . Yeah, well, 25 times forward in a market that trades 21 times forward, and this is a company that just reported total Revenue Growth of over 50 year over year. You can count on just a couple of hands how many other companies there are in the s p 500 anywhere close to that. So stock is a premium multiple. It has for about four years now. I would say that they have justified it. And to johns point about Facebook Live, let me just point out one thing. Unlike netflix, but very similar to youtube, theyre pursuing a revenue share model for content. Meaning, yeah, theyre spending money, but theyre not spending money on content, like making their own shows. Theyre coming up with a model that has been very successful for google, with youtube. Which is, look, theres going to be ad revenue. And a portion of that will go to the people creating good content and bringing viewers on to the platform. But theyre not making these monster investments that people might be nervous about or afraid. Its just not whats happening. It seems there is a good battle today in the market questioning whether the valuation is worth it. Look, its a 385 billion company. So does it deserve to be 485 billion . Probably not right away. But if you think theyre going to earn 7 or 8 bucks next year, be then youre probably willing to buy it here. And frankly, look where the stock stalled out. Exactly at the late october, early november highs. Its a natural place to see the price momentum stall a little bit. Thats the last time people bought in at that level. And then they had a couple months where they were down and out. You get back there, people psychologically, all right, when i get back to even, im going to get out of this thing. This is how stock charts tend to shape up. So i wouldnt be surprised that it stalled here. Theres nothing overtly negative happening with price action today. It just had already rallied huge into the number. Everyone knew it would be good. It was good. So the ageold question on this read is, now what . Joe . Josh, when you look at facebooks numbers, i know that youre an active user on twitter and i know in the past, i dont know where you stand now and whether you own it or not or support it. Do you think there is any readthrough here on twitter, and do you believe that twitter can actually recover when you see the growth and all the momentum with facebook . So twitter last facebook last quarter added the equivalent of an entire twitter. Think about that. I think its like 267 monthly daily users. 267 million monthly users facebook added. Which is about the size of twitter. So they signed up approximately nine people per second in the Fourth Quarter. Why is facebook able to do that and twitter isnt . The primary reason is the content itself. People feel more comfortable on facebook. Everyone there is posting under their own name. There are no anonymous accounts, there are no eggs, no very little nazis. Thats been twitters problem. I dont know how they correct it, because the platform is built on the idea that everyone can just talk to each other. So i think facebook and twitter should not really be compared. Its not fair. Theyre two very different animals. And i dont think there is any readthrough here, joe. I think, if anything, advertisers have opted to do more of their spending on facebook. And not on twitter. And thats why you see the huge disparity of results. And i dont think that changes this quarter. Josh, appreciate it. Well see you back here on the desk. Thank you, handsome. I miss you. Likewise. Average price target is 158 bucks on the street. 41 buy ratings, 4 hold, only 1 sell. Right. A lot of that makes sense. But i think that right now, youre going to see a pause for a little while, scott. Josh talks about all these technicals and so forth. So we broke down at the Technical Levels and the rest of that. This sharing agreement is such a different way of approaching it. Very similar to youtube. And thats what we were talking about before, is very similar going right after the youtube audience, and its a smart way to go. Zuckerberg, this is all part of their plan. Now the monetization process, can they do that through all of the acquisitions that they have made so far . And i think they can. Scott, im going to tell you, i think the valuation is very compelling. You said 25 times forward earnings. I read the Morning Research reports. Most people calling now to earn about 5. 85 this year. Thats 22 times. Its getting into value territory, believe it or not. All right. Paul, thanks. Pleasure. Paul richards, medley advisers. Heres whats coming up. Clearly, its been a tough line for retail. Today, though, wall street analysts are turning some calls around, picking new winners and new losers. Well tie it all together. Plus, how are hedge funds changing their strategies in the age of President Trump . This is the Halftime Report, with scott wapner. Stt intoryappl all right. Were back on the Halftime Report. Shares of foot locker on the move today. Guggenheim uprated it to a buy. The stock is up by nearly 2 . All right, pete, what do you do with this . They say, we upgraded because shares are down 14 from 52week highs. We believe ongoing concerns on mall traffic are overblown as it relates to foot locker. Right. Do you buy that . I do buy some of that. But i think that its also gone down for the right reasons. Probably because some of the foot traffic probably has slowed down. I think there is the other readthrough. If things are that bad for underarmor, maybe that pushes on to foot locker, as well. Thats where i think the analyst is right. The idea that they have a great supply chain going into the foot locker world. And its not just under armour, its nike and the various brands. Because of that, i think at this valuation level, this makes sense to move to a buy. 85 seems like a tall target, though. 69 and change today, doc. Well, finish line just had some horrific numbers, as well, judge. That one and under armour, i still cant you know, pull the trigger on those two stocks. This one, foot locker, like it. Whats the difference . Well, the difference is, the guidance has been so horrific. Other than this s