Disappointed tech, which has been the best performing sector of the year remains the epicenter for much of the selling the vix is up, theres so much to discuss i couldnt think of a better day to have you. Welcome back. Nice to see you i know people think of you as this energy guru and oil trader, but what is your broad view on where we are theres so much going on today alone to discuss where do you see the markets right now . Simply at some point when if the ecb pulls back, japan pulls back and all these countries pull back from printing money and the fed has made it obvious what theyre doing, theres going to come a time where the markets just may not go down that much but theyre not going to go up what happens when we enter a period of time when the markets stagnate two to three years where the overall performance is flat . What happens then to all the Pension Funds and municipalities that have all these on ligations that rely on 7 . You cant tell me over the next ten years theres not going to be two to three years where the overall at least is going to be flat how does everyone make yield the opposite side of the coin is if you asked anyone today could you start your Business Today like you did 20 years ago, the answer would be no, right . So thats why the markets have thats why the multiples are so great because its impossible to start a new business i dont care what it is. So on the one hand you have the fact that companies are so much valuable because its impossible to start a business. On the other hand what will happen when everything goes flat it spins around in my head 24 hours a day. Youre a sports guy, if we were to say, okay, what ining are we in this stock market rally weve witnessed, what would your answer be i would have dead wrong about three times and a stopped cloing is right twice a day so i would say eventh, eighth could we go to extra innings maybe, but the point being is you dont need the market to go down just what happens when we go nowhere . Does everyone expect the market to make 7 , 8 , 9 every year for the next 30 years . You raise the issue which i think is sort of impacting part of the market today and thats what the Central Banks around the world are doing when they pull away from the system, these rates that are rising globally pushing rates higher around the world, german tenyear today highest level since january of 2016 rates here are moving up on a day where they could easily move lower because the data was disappointing from the jobs perspective with adp and claims. And, judge, what weve seen from the beginning of the year through the beginning of june you saw a lot of the Interest Rate plays, utilities in particular, up big, i mean, everything from nee to excel to dominion, all of these stocks were up anywhere from 5 to as much as 20 in the First Six Months since then theyre all diving and i mean diving in a hur voy that accelerated when the fed made the latest move now these stocks are among the weakest out there. You think the faangs are having a hard time . Look at the turn these stocks have taken it is the faangs that dominate the conversation where the rollover and this rotation has come from and into the other depressed areas which are off the loyest level of the day. You cant have it both ways not you. But if youre colloquially speaking, if youre in the group screaming the market is being dominated by five momentum stocks and blah blah blah, fine. Now you have a 10 pullback in google, you have facebook 5. 5 off the high, you have the whole run of these names have pulled back are you still complaining . Have you moved on to Something Else now you have people screaming what they want then you have sectors that lookal riglook unt phenomenonal right now look at csx, this chart is flawless i dont want to you can a about it its so pristine. Look at whats going on with this, ksu which i bought last week, another rail the Airlines Look amazing so it doesnt have to be all faang all the time were using that acronym as a short hand to describe what is classic growth momentum uptrend. And because the tech sector decides to sit out it doesnt mean the Bigger Picture is negative this doesnt end on old age, weve heard that before. The market was on the defensive. Nvidia turned it around, you saw that, so the market gathered momentum with the turn around in nvidia, but overall it comes down to what is the path and trajectory here for Central Bank Policy the services ism was better than expect which had lifted the tenyear treasury, highest level in two months. If we could get a continuation of that and a breakout of 260, then theres justification for the earnings were seeing right now and seeing in the economy some momentum there as well. I agree with marcs point. I dont know necessarily that the market goes down, it might just go sideways but it looks like the pause that will refresh when you get energy, when you get financials, technology coming back. Can we just point out that the market was flat for 23 months we had zero progress in the s p between the midpoint of 2014 at the onset of the oil crash up until really right after brexit, markets started to go again. Its almost two full years of nothing for the s p, small caps did way worse, International Stocks got killed. So this idea that were just going up and up and up and up year after year is not true. So lets switch the conversation to what is your wheel house and thats crude up nine over the last ten days. Its had this nice run coming off of yesterdays the last couple days disaster trade, where is crude going from here are you trying to pick a bottom . No. I would think its simple, the range is set, low 40s youre a buyer as long as the specs dont get too long high 40s, low 50s specs are long you have to get out. Unless something dynamically changes the equation like god forbid something in north korea, theres your range and when it ends up happening, its happened four or five times already and people get bulled up when it gets into the 50s and depressed when it goes to the 40s. As long as the commitment of traders keeps washing every time, you buy it every time it gets to the high 40s. How long could this last . This could go on for years, right . How long can something last i have no idea it could last for a long time. Theres no way of predicting fundamentally im not going to tell the story about why were trapped here, oil producer selling that comes in, but the point being i still think in Energy Natural gas has the potential for the most upside just because of whats going on internationally just because of coal switching internet gas because of how much theres got to be some weather, the reason why natural gas has been depressed for so long is the weather has been too mild. One regular winter and the price is going to take off. How is oil up nine of the last ten days with north korea at the top of the headlines. The market doesnt seem to be reacting to anything. The market doesnt react until it wants to react so you can say it used to be how is crude oil up nine out of ten days with the euro down or un . I think its all uncorrelated. People just chase things one way and another way. In crude oil, whats happened before is when people pick bottoms, it keeps going down i think in the last couple youve seen the last four or five days is that on this rally no one is getting long which means it can probably go another four or five but the minute you see it pulled up again youll see the commitment of traders numbers its time to get out again unless something fundamentally changes the picture, were just the street is trying to get their handle on it some people are trying to call a bottom, you have an upgrade in schlumberger i dont know what you think of about that you have a number of downgrades in weatherford, transocean, noble then they maintain their holdings in other stocks how would you maintain this space . To me i would just go ahead and be looking at the because i definitely think the next winter or two were going to have a rig winter and that gas is going to break out of this range at 275. I think at some point its going to trade with a four or five handle on it and surprise a lot of people. When that does, which ever company survives, whether it be chesapeake i dont know if chesapeake survives or not, big cap Natural Gas Companies you get paid to wait some of these stocks are so cheap they became options. Like what kind of names. I hate doing that i hate i leave that to mini, mo and curley. [ laughter ] we love when you do that, thats the problem. Judge, when you look at these events going on, we talk about it all the time on the desk. If you look for instance in the volatility space people have been betting against volatility all year long, not just in marks space, the ovx, the volatility of crude. But if you look at the vix itself, or the etn vxx, that began the year at 24, slammed down to nearly Single Digits and now has a big spike. You look at the short interest, short interests are people that bet that continues look at those bets, they are saying that vxx is not going to be going any higher than where it got to today thats the kindling out there that gets the fire roaring because normally people that buy volatility hedges are doing just that hedging. So all the shorts that have bet against vxx will spike even higher. I heard you mention before Central Banks low rate policy. When you look at shale production right now, a lot of the production and growth in production was built on the back of low Central Bank Policy what happens when rate rises to the production and the shale producers . Joe, honestly, thats above my pay grade, im not sure what happens. If anyone tells you what will happen interestingly enough, im looking at my phone, ive gotten seven Text Messages from four people that control billions of dollars, three of them yelling at me, one telling me im wrong good market. The one thing i can tell you is i think people overthink things when things go up and you dont know why, theyre going up much higher when things start going down and you dont know why, theyre going down more. So right now with everything going on in the world and the markets held in pretty good, how can that possibly be everyone knows what Central Banks are doing, right so oops. Theres another one. So the point being is i just think that, you know, trading good news, bad action, we talk about bad news good action, thats probably the best way to go for the next year or two. Things that look good that dont make any sense if everything made sense, everybody who had a 95 average in high school would be a multimillionaire. Right . It doesnt work that way. What i hear you saying though in the way you dissect whats happening in energy is that oilrelated plays are a notouch oil. I would think that i didnt say oilrelated plays are a notouch i just think that nat gas plays are a better touch i dont want to go ahead listen, you know what part of the oil patch would be interesting to you. Here we go again. Im getting pigeon holed again, right . Listen, you know me better than that, come on. Am i going to tell, like, my nephew if he wants to buy exxonmobil not to buy exxonmobil of course not. Its the point being is i think whats happened ing is the Energy Stocks that can survive 40 or 50 an oil, they will be fine it seems like the whole market is right for mna, how do you combine . You dont combine, get rid of all the fat, you can see that. But the you think dividends are in jeopardy no, i dont think so. I know there was a whole thing about it, i was reading about how exxon was paying out more no, i think those dividends are safe for a long time as long as oil stays in that range, 40 to 50, yes and people have cut back enough to make their dividends be sustainable. Thats what i think. Out of curiosity, so youre pushing the energy out, how about Something Like the pipelines. You want to push . Why would i go to the supermarket . But most of the pipelines are not energy theyre transportation companies, right but is that a place to be in the energy space to be in that transportations part of it moving one area to another. Yes, as long as theyre not leveraged enough, thats all about how many Financial Leverage they have, right . People make the misnomer that most of these pipelines have 10 to 15 exposure to the price, right . But how much leverage do they have on them and Everything Else the game with these pipelines has been you buy an mlp, put it a, what keep getting returns on capital, never sell the stock, have a basis of next to nothing wait until you pass away, get a stepped up basis and its a party. But most people in the in the midstream space keep thinking oh, my god, if crew goes down 35, this company theyll stop moving. Thats not the way it works. Theyre not raising dividends anymore when that happens and they were price wise extraordinarily sensitive to the price of crude at this last go round. They crashed the whole sector was down 70 and these were supposed to be bonds. So i dont know that the attitude toward that sector will be the same next time oil seems like its stabilizing higher i think people will just say you know what, if i have oil risk let me do what mark suggests and buy the producers. This is a buy, hold and pass on to people. I also think, josh, a lot of these companies yes, a lot of them crash, 40 50, , 60 but these levels, youre right because of the fear that theyre going to crash again, no one wants to buy them. Theres definitely a depressed multiple. Nobody wants to buy them. When people dont want to buy things, theyre on sales it makes sense when you want to buy them that way theyre trading not when theyre doing so great. When theyre up on hype and they dont have the earnings to back them up. Let me try it this way. Oh, boy. Let me try it this way. Here we go again. Would you be more apt to be long the commodity itself of natural gas or would you say a that here in is the export which youre bullish on is the right place to be . Believe it or not, we still try to time natural gas which has been a how should i say this a not effective strategy over the last 12 months [ laughter ] but for the general for the general person listening to this, youre much better off in the equity than trying to turn in back end cal 17, that gas but for those who feel that they have some knowledge of the markets or think they did maybe they dont anymore, theres still opportunity to trade the futures markets for shuch. Theres going to be i think there will be volatility in nat gas and pow eer and people are afraid of it for the reasons josh just said, people have gotten burned so many times. The next big rally, i hope nobody goes long saying im not getting sucked in, until they do get sucked in, then its time to give it to them, right im not giving him what he wants. I cant. He gives you a little more leeway than us, though. Eog. Im not here to joe, you know more about eog than i do. Right . Right . Again, im not here to again, i can just tell you that i dont think theres much risk. So if you like natural gas so much, exxon makes the acquisition of xto years back. Good acquisition because it hasnt been good timing i think that was a good acquisition but just terrible timing you waited two years, how does that look then they waited two years to do it. So in another five years, is that a good acquisition . From where we are today yes. To segue away from that, mark does sort of make a good point for us to have that next leg of the debate and thats the endless struggle to for some anyway to think about when value may come back over growth and if energy is the ultimate place to try and pick value in this current market, where do you think thats going to come back or not if jim was sitting here, hed tell you he thinks value is back others would say value is coming back people would say look at energy, thats a good place to find value in the market. Try to pick bottoms. Is it a head fake or not. Are you going to get burned to use fishs word . Hes checking out whos texting him. So many people are yelling at me on this phone that im like i need a new number. But josh, why are you laughing at me its true. Because youre the only one of us thats actually if i pulled out in front of scott if i was checking my text because i know whats going to happen. I cant get away with that, you can get away with that. Are you on every week oh, yeah. Im only once every six months well take a quick break and have much more with the legendary mark fisher next on half time. Coming up, ge gets a price target cut but the stock is on mark fishers list, the essential 40 well debate it and talk about the other 39 stocks on fishers list but first, tech the big winner the first half of 2017 our daily partners at ken show showed tech is up on average 2. 57 in q3 after leading the market in the first half of the year bctomore ken show, go cn. Com pro clouds cant connect . Our michael, can we get this data to. . Look at me. Look at me. Look at me. You used to be the yes guy. What happened to that guy . Legacy technology can handcuff any company. But yes is here. So, youre saying we can cut delivery time . Yeah. With help from hpe, we can finally work the way we want to. With the right mix of hybrid it, everything computes. 52 week low. Jpmorgan cuts their price target the firm doesnt see future growth as a catalyst our call of the day. Josh, youre in it, youre out of it now. They say the empire resets they cut estimates and lower the target they go to 22 bucks. I sold it right after the barons bounce and the ceo thing. I just look at this like the chart is a picasso its all over the place. Theres nothing going on here. You really dont have any trend for years and years. It looked like it was on the verge of a breakout over 32. That fell apart. And there are too many stocks right now that are in up trends that are just doing incredible things so i just looked at it like i dont have time for the six months or a year that its going to take for them to figure out what they want to do with this company ill get back in the next time it challenges that level. Are there an awful lot of people ive got the time i was in the stock. Less time than me. I had a great run for a while. Ive been out of it for a year or more. I was waiting for this i like jeff ammel, terrific gentleman. In terms of running the company, unfortunately a lot of bad luck. How about when ge decides to get into the energy space at 100 plus oil that was a huge mistake obviously now in retrospect, but a lot of those decisions they made getting out of the finance, all of that, collapsing the stock. So i think that you needed fresh blood, somebody new in charge, the management, and reshape it i dont expect a vshaped recovery, i just think that from here there will be a new path and new direction going forward. How long is the u how long is the u . I think its going to be extended im in a give or take call at 28 bucks a share. Im willing to be patient. Its got a yield, but thats not why i bought it. I bought it because the Management Change which i think needed to happen. Fish, you have a new etf that youre trying to launch. You have a group of stocks that youre calling the essential 40 ge is within that group . Yes to me, its simple. He owns a stock, he hates the stock ill buy it again. You wont buy it until it trades 30, right i want it on a breakout i dont want to sit for the 3 yield. For my purposes, right, whats the down side of risk in ge at this point, 2 bucks, 3 bucks . Not necessarily. More . Why couldnt it go lower . I dont think ges see, to me risk reward ratio, yes, you may have to wait two years, two months hopefully in your case its two days 3 and a half in the stock is one of the essential components of the economy a 3. 5 yield on a 28 stock, could it go to 20. Year to date down 15 you think it could go two to three bucks lower . Look where it was three years ago. 18 stock. But if you buy at a 30 your risk is a hell of a lot more than 3 bucks risk reward wise id rather buy the stock at these levels if im going to buy something and it may be dead money for a while, okay i know my risk is this, you know maybe i do it where i buy stock and buy, you know, the 22. 5 against it and collect the income. There you go. You know what im trying to say . But id much rather buy it here than buy it at 31. By the way, i dont think its a huge risk to buy it here. Im talking about im talking about being in a bull market and focusing on stocks that arent participating from a shorter term perspective, longer term ge probably figures it out. I think its fine. How did i get sucked back into talking about a stock that i dont know. Youve got 40 of them on your list. Thats an index its an index what did you think of the baker hughes deal when it happened i dont know enough about baker hughes whatever i would say about it, i dont have enough information about that and im not again, i know what i know i dont know what i dont know i dont know enough. For me to say something, you might as well ask anybody. Probably they know more than me. But that sort of is a smack in the face to those who are trying to pick certain levels where you see, you know, transactions taking place that Companies Think are going to be good for their bottom lines and they get smacked across the face because they do it at the wrong time. Scott, everything is about timing like pete said exxon mobil, they wait in energy it seems to be more precious than almost anywhere else. Y, look at it. Exxon waits 2 1 2 years from the xto purchase, how do they look geniuses, right the thing about when you buy the commodity space, its not just a business, its a timing of when youre in and out, right and the problem is that most of these Big Companies like ge, exxon, have had poor timing, right . They chase. They dont do the blood in the streets, they chase at the top does oil need to come down let me ask you this. How much further does oil need to come down to see a real large pickup in m a. There are Big Companies in the energy patch do you have a three handle on it im not an m a expert i think that youre going to see m a happen over the next year. It makes sense, right . If you can cut out, you know if you can earn an extra 10 million by just combining two companies, why wouldnt you do it 5 million theres no other way of growing for right now. You know, why not . As long as youre not going to have an antitrust problem. Is that reason enough to own some of these names, because you think theyre going to be transactions i think so. I really do. You saw some m a in the refiners good, bad . The problem with refiners, what happens what happens to the win market, what happens with the curve you know, joe, it goes more backward, it hurts the refiners. Then the refiners can trade. But its nothelping them right now. Its in deep tango. Because it happened in a way that didnt allow them to capitalize on it the refiners end up getting a lot of option alt at this if contango sits there. The way it happened what broadway show were you singing in last night . Hello dolly. Dont answer. Just give the guy a riccola. Do a blitz. Hsn is soaring now that Liberty Interactive is going to acquire the company. Looks like a great deal we just talked about what if exxon mobil would have waited to make that xto energy acquisition. Well, in this case if they would have bought it two years ago, they might have been paying 68 bucks or 80 bucks a share. 68 i believe is where it peeked at if they paid at a premium, might have had to pay 80 getting it here for 40 bucks a share. I think its good timing on their part. Yum china, josh, whats the story here the story is you had some activist investors that were pretty outspoken that yum should be a stand alone company, make more progress on its own and make more progress for yum the parent so far not so good, but its still relatively early i think this company can probably get its act together. Im not in this name early and im not looking to buy the dip. Pricesmart. This is equivalent to a costco june 15th the stock had already pulled back. Huge pull back now concerns about obviously online. Amazon, thats the whole story. Fish, youve got to take on health care. Xlv. Second best performing sector year to date is health care. I think that eventually the Health Care Industry is going to have some major issues when someone goes ahead and offers transparent pricing. When you can go and know exactly, you know, when you go to a hospital, right, you have no if i have no insurance, why should it be that i cant paywhatever the hospital will accept from an insurance theres no transparence be si in health care. Its the last industry with no transparency the minute someone brings transparency to the Health Care Industry, right, i think a lot of these companies are going to be in trouble. I really do. Thats the last industry that has no transparency. Its like preopen outcry. Amazons next target . To me, that makes the most sense. The minute someone think about if amazon was to get into the Health Care Business look what happened to the grocery stocks when they took over whole foods, right . Theres no when you go to a doctor, right, when you go to a hospital, okay, and i know this firsthand because i have a lot of good friends in miami that work in major hospitals in one major hospital, a hospital if they get paid 100 per procedure, then that will teey allowed to tell any other hospital like chinese walls if i dont have Health Insurance and i go to a doctor and hes willing to accept 200 from company x, why should i have to pay 2,000 . Why is there no centralized place where we can go ahead and see pricing . What marketplace is left that doesnt have transparent pricing besides health care . I think youre right. The only thing keeping amazon out of health care is the same reason why theyre not the biggest bank in the country, which is that amazon skips industries that have real regulation they dont want any part of it they dont want anything to do with it. That might not last forever. You might be right at a certain point someone might come in and say why arent there published prices for procedures. Why arent they competing for prices at dispensaries. If the west coast which controls is so concerned about america, right, what better way to give back than doing just this. Theyre starting see, what theyre doing is clever. Apples saying we want to be a Wellness Company google is saying we want to do wellness theyre doing things like tracking your heart rate and all of that stuff. Theyre not no. Going towards drugs any time soon. Its its not being a Pharma Company imagining the infrastructure these Health Companies have to be willing to take risk. Managed service company. Its a company where you have to have transparency, step one. Can you imagine going you dont know what you pay, right you go to an emergency room, right, and the emergency room is willing to take from me if i have a United Health care from my provider x amount of money. Why should it be that someone off the street that comes in pay that or something more, not five times more why should a hospital not be able to know what its competitors are getting reimbursed by . Who puts up this its like trading in a vacuum. And the minute that a Company Amazon like company or amazon comes to do this, i think this whole space is in trouble. Sue herera has the latest headlines for us. I do. Thank you, scott World Leaders including President Trump arrive in hamburg for the start of the g20 summit his meetings include direct talks with Germanys Angela Merkel as well as Russias Vladimir Putin starbucks is adding 130,000 square feet to an existing roasting facility in georgia the 120 million expansion will create 100 new jobs. Starbucks opened the augusta plant five years ago Security Camera video shows the moment of a natural gas explosion at a college dorm in kentucky the force of the blast damaged the building where it happened as well as three other dorms and a dining hall. Miraculously only two people were injured in that blast. And add this to the list of things that you can now buy on amazon you guys were just talking about it the retailer is now selling its own brand of wine called king vintners the bottles range from 20 to 40. Rrabt ey are not prime eligible. Soy outhat thats the news update at this hour halftime is back after a quick break. The power of 100 of the worlds top companies. The power of a proven 15year track record. The power of an etf. The power of qqq. The thinking we put in, clients get out. Power your clients portfolio at powershares. Com qqq. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Were back with unusual activity doc, you are up first with bud wise s budweiser the july 110 calls just out of the money trading 109. 62 i guess right now. Look at those calls. The july 110s and they were bought in pretty big numbers, judge, and then take a look out in september they bought the 130 calls in even bigger numbers. Youre looking at more like 17, 18,000 of these. 18,000 is 1. 8 million share equivalent thats a big purchase and way out of the money those are 130s so i bought calls in here and ill probably be in them about three weeks. Pete, what about you . Talking about tech. I got a twofer for you im going to start off with the first one, chip stock, micron. Having a pretty nice move after earnings you saw 162 versus 151 stock had a nice move. Stock trading around 30. Been stuck for a while today somebody is going out to october buy in the 30 strike calls. Huge 30,000 of those trading. Ive talked about that in the past some of the july buying as well people are looking to are a breakout to occur in micron through that 32 number and up towards 35 heres the second one, amd just hitting. 27,000 of the calls being bought stock over 2713. Stealth run by the chips yesterday because everybody was focused on so many things understandably chips had another strong day take a look at amd this stock is breaking out. It looks like its heading for a head and shoulders pattern. Double wing pattern. Breaking out above 15. There you go. Weve had our hearts broken here several times, but i think, listen thats the beauty of the option market, too, youre sitting there and youve got something that you have defined risk you know exactly how much you can lose thats what a lot of people are playing in amd. Next up find out mark fishers essential 40. More stocks on tt halist when the Halftime Report continues. Hey dad, come meet the new guy. The new guy . What new guy . I hired some help. He really knows his wine. This is the new guy . Hello, my name is watson. You know wine, huh . I know that you should check vineyard block 12. Block 12 . My analysis of satellite imagery shows it would benefit from decreased irrigation. I was wondering about that. Easy boy. Nice doggy. What do you think . Not bad. If you could book a flight, what do you think . Then add a hotel, or car, or activity in one place and save, where would you go . Expedia. Were back according to a new report from bank of america Large Cap Fund managers had the best first half of the year with 44 of them beating their benchmark. I mentioned youre trying to launch this etf, essential 40. How did you compile the list, first and foremost my staff and i spent about a year and a half trying to figure out a new concept for ets based on essentiality. If i had to define that, its without these without the specific companies or best in breed of a certain class, right . Your life is, how shall we say this nicely, materially impaired we didnt look at dividends, we didnt look at return of equity. We looked at what companies we felt materially without them would materially affect the way normal people live every day. Facebook, amazon, alphabet, apple, not surprising on that list exxon, duke energy. Right. Enterprise products. Think about what happens if Enterprise Products gets out of business what does that mean . If that company doesnt make it. What does that mean to the way the infrastructure of this company is built in terms of nat gas and distributorship. Think about if talk about the tech stocks. Think about if waste management. Waste management people take those things for granted. An outcome like that, it materially impacts the way you live again, what we tried to do is based on the old peter lynch thing of invest in what you know invest in what you need, right and basically when we went back and looked at this index, okay, obviously the idea is to rebalance it every year. We dont let anything get out of the hand everything is rebalanced to 2. 5 selling your winners and rebalancing to your losers on a sharp ratio basis this index has outperformed since 2008 the dow, nasdaq, russell, s p. In the etf Everyone Wants you to be rules based when you get rules based you get pigeonholed and that doesnt allow you to create the alpha that you think is necessary and doesnt give you the flexibility to move when you need to move. Every year well have a review are these still the 40 most essential . What does that mean . Im telling you whats based on what we feel are essential or committee feels is essential unless you can get complete rules based, it gets hard to get traction which to me is counter intuitive because without having that flexibility, its not passive, its not active, someplace in between, right . Youre not going to have any alpha. Also, when and if the something happens in the world, you have no flexibility to get out. If youre rules based, Everybody Knows youre rules based so they can all front run you getting in and getting out. And they should like the fact, mark, that somebody is applying that expertise that you and your team have to an etf rather than just having a straight rules based reason why they want rules based is because the only people that matter in the etf world, very large hedge funds for trading and liquidity and then Investment Advisors because thats where all the flows come from retail really doesnt make a big dent in etfs its advisors. Advisors are presenting clients with a financial plan. Theyre saying this is the portfolio thats going to solve the riddle of what you need. Then they use a bat test to say these indices, these rulesbased funds, we can go back 40 years this gives me a mathematical answer to say this is how youre going to hit your goals. So rules based is really critical im not saying its good or its bad, im telling you right, i understand. You see vanguard, dimensional funds, ishares, state street, thats where all the flows are going. Its going away from where its like a really smart guy that maybe gets it right sometimes, gets it wrong sometimes. That might not always be the case, but right now, youre right. Rules based is everything. Thats the push back. Josh, when you have those rulesbased funds, right, you know if you are doing enough research one thing i have to sell at the end of the year, one thing i have to buy. So everyone jumps in front hands up if theyre indexed based, youre 100 right the russell front runs itself. They announce these six coming in, these eight going out. 100 dimensional funds is not indexed. Were looking to buy the bottom 10 or 20 of book to market stocks, the cheapest stocks. Theyre not doing that based on a published index, theyre doing that literally based on the data there are some different ways that you might want to think about that you can formulate that. Theres somebody out there who would ask and they would ask it to anybody whos talking about this, does the world really need another etf . It doesnt need another etf its another subsector of the market. If its good, well take it. Right i think theres a need for this essentially this is a unique concept this is not based on a quantum and plugging in numbers. What is essential to the way you live what typicallyhappens when we went back and looked at this, every time the market has a correction, people tend to hold on to what they know, to what they need, right thats why if you look at the sharp ratio, its outperformed every because the short hasnt be been less, right again, weve tested this in european stocks, i dont even we took 40 i asked in asia to pick the 40 he thought were the most essential names i only know three of the companies. The same phenomena happened. It was the same exact thing because the phenomena is the essentiality, the fact that they are not too essential to, you know, fail, right, is something, right too essential to fail. Too essential to fail is something that the marketplace, the psychological thing that gives people comfort, right . Okay, maybe it goes down from 40 to 30, but you know what, i still need this company. It still impacts the way i live every day, right thats something that whats the Biggest Holding in the index . All 2. 5 . Equally weighted. Equally weighted and at the end of the day what do you do it about sector concentration yes. That way you give people yes. Staples, costco, financials, jpmorgan on that list as well. The dollar is pulling back rgor three sessions of gains. Wee ing to hit the futures pits when the Halftime Report comes back in just two minutes what if we pull Customer Insights from the data in real time . Wait, our data center and our clouds cant connect . Michael, can we get this data to. . Look at me. Look at me. Look at me. You used to be the yes guy. What happened to that guy . Legacy technology can handcuff any company. But yes is here. So, youre saying we can cut delivery time . Yeah. With help from hpe, we can finally work the way we want to. With the right mix of hybrid it, everything computes. Halftime report. We are watching the u. S. Dollar today falling after weaker than expected Economic Data out this morning. We also have fed minutes pushing lower. What else is weighing on the greenback . Well, when you look at the economies much europe and asia they are doing much better so third skrins are doing much. But theres a silver lining. Our trade deficit has shrunk and our exports are at two year highs. The yurngs asians are buying our products because our dollar is cheaper. The charts pointing to further down side or could the dollar make a reversal its already lost 6 yeartodate the very long term chart five year date. Whats more important to me is that the congestion area over the last two and a half years and low side is around 94. Thats where were headed. The fundamental story is take out the reinflation trade when its hard to get pro growth policies through on the live show the godfather, Ralph Acampora points why charts point to a split market and tom kloza gives his take on all things energy. At aththst e top of the hour. Halftime is back after this. Hey gary, whatd you got here . This bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade were back, final moments with mark. Some of you are asking to finds the essential 40 its on our website. You want to make one more point. The indexes for 40 points opinion doesnt get churned or turned over. Hopefully when it becomes an etf the trade will be 50 bits or less not something that, you know, gets to rebalance. Rebalanced once a year two or three stocks might get moved out. Its for the retail person who wants to sleep at person but yet wants performance. Do you think theres a bubble in passive versus active some people suggest there sway too much money hasgone into passive management i think money will keep going into passive as long as active under performs people chases momentum what brings active back performance like what you have the march cap managers, see money flow out of massive and active people just change performance thats what happens all the time thats why people would rather buy stock at 30 than 26. Its momentum. Its not wrong just a different style people like to go ahead and get on a winner. People dont like to go ahead and absorb pain. Well close them up in three hours. My final strayed tesla knocking on the door step, guys of bear market territory this crash test, the latest shoe to drop on this stock, down 5 , 4. 5. What do you do here . You wait for 300. Or if youre in the option game sell puts at 300 but i think thats the next support. Only 12 away. We talked about this crazy range that exists on wall street, josh, when it comes to this stock anywhere from 180 to 430. Never been anything like this before nobody has a construct its not like oh, we make chocolate chip cookies and we start with those five guys why do you trade eight times they trade four. Nothing like this exists its not fun for the longs this is in my too hard pile. Ive been saying this for years. Joe, youve been playing hurt all show accordingly your final trade is . Can we see that hold it up. Mmst, monster is joes final trade. Seaworld, somebody came in and sold a ton of puts thats a bet the stock actually either maintains its level or trades higher. Financials. How about the fact financials and industrials have outperformed Everything Else is pulling financials had a nice come back and holding on to those gains. Take a look at xlf, jpmorgan specifically if you have h to be on one side of the dollar which side . Long dollar long dollar for the first time everybody nobody is long dollar. Everybody gave up. Another recommendation university of maryland thanks so much for being here good to see you again. That does it for us. Thanks for watching us power starts right now im melissa lee stocks in the red, tech in the nasdaq getting crushed is the herd mentality taking a toll would you trust random strangers with your money. One amazon engineer is doing just that taking his 50,000 portfolio social soda, candy even cupcakes buy all kinds of stuff in vending machines now add cars to the list well explain and introduce to you the ceo trying to shake up the auto business. Buckle up, power lunch start
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