Its now great when you see every single day, whether its bank of america or jpmorgan or Goldman Sachs and you start looking at other areas like boeing and microsoft youre not touting the Bank Earnings as being great . Oh, come on. Cocacola, at t, ive got you. Are they near the top i think theyre near the top yes, they are. Highest close since 07. Im in your corner, buddy. Were getting the facts and the facts are beats on the earnings side and revenue side and with few exceptions, this has been outstanding so far. We still have a lot to go. You with them im with them theres the socalled wall of worry out there. I dont think it exists. Theres complacency. I agree with that. The question is, what do you do with that in terms of your Investment Outlook you cant plan for that black swan event sure, you take out protection. But im not sure that the vix needs as much now as it did in the past heres what you do find the best companies you can and you go long. Sure, you go long on valuation on some of these and the old price in terms of a concentrated push forward, josh, you believe theres a much more broader advance. I like where i am markets are determined by earnings markets have been very, very strong this quarter and last quarter. Lets bring in another person as well, jeremy seagull, professor of pennsylvania. Nice to see you again. Happy to be here. Are earnings good enough to keep it moving yeah, i think so. I think the lower dollar is definitely a strong tailwind and the earnings i just mentioned. Whats going on with the vix is sort of interesting because we economists have been puzzling for years about why theres so much volatility in the market. My good friend bob shiller, you know, won the nobel prize on an article called excess volatility. This is more in line with what we actually see economically out there than all the crazy volatility that often we got in the past, you know, which reversed itself in the matter of days or weeks or months later. So maybe people are learning that given the economic fundamentals, you know, we shouldnt have as much shortrun volatility in the market as we see. So it may be that the vix is not really telling us that theres not too much complacency there in the market. How high is the market going to go, professor well, i certainly think ive always thought that we are going to get tax reform here and i think what we see is the movement so far has been mostly low Interest Rates theyve moved up a few basis points but the low dollar is great for certainly the multinationals and if we get tax reform on the corporate side, which i still believe is an odds on proposition this year you think thats going to happen calendar year 17 i think it will believe it or not, im getting more in the minority as things drag on in the senate. But theres more agreement on Corporate Tax reform what kind of numbers are we talking about . You know, if we even get the corporate rate down to 20 , i mean, you can easily see a 10 in the market this year. And that wouldnt be straight up for you, professor . If it gets virtually enacted for 2018 and we see it moving towards that, republicans still have 18 months where they control the government and, you know, a lot of business can still be done in that period. Another 10 this year at that point, would you start to worry about euphoria . If thats not the deaf significance for euphoria, what is look, a 20 p. E. Ratio in a 2. 5 Interest Rate world is not excessive. Corporate tax reform, lowing that and a few others there, most analysts think thats another 10 boost s p and that in itself is another 10 so if we can get that onto the table, i do not think we have reached euphoria 20 clearly begins to stretch the valuations but, in my opinion, not 10. Professor, its josh brown. Hello, josh so the new thing that the bears are saying that you should worry because not enough people are worrying, which obviously thats somewhat intuitive. But when you think about the 1950s and think about the 1990s, Interest Rates were low but normalizing rising and there were no major arms conflicts and stock prices went up with Interest Rates and volatility was low for a very long time, just like now. Why do people think this is so abnormal and for how much longer should we expect there to be a low volatility period, given all the things that the market has been resilient against so far. I think we can be in a low volatility environment for quite a while and youre right about the 1950s. Most people would not touch stock. Memories of the Great Depression were fresh in the memories and we didnt hit the high in the low 60s in that low volatility period and we got much higher valuations in the mid60s than we do today. If it is like the 50s, youve got to be in the market. By the way, i myself, i know theres a lot of disagreement, i was pleased with trumps comments about janet yellen. I think shes done a good job. Stan fisher, vice chair who i know personally, i think thats a good team and a good team for the Trump Administration so for the first time hes actively said that hes considering her, i think that should be very, very positive for the markets. You might not want to upset the apple cart, depending on where the stock market is along with a whole bunch of other indicators. Yeah. Go ahead. What im saying is i think wall street is very comfortable with the fed. Yeah. I mean, i think they know the read on the fed and the whole question of policy but they basically spelled it out and my feeling is that things are not going much higher and a much lower Interest Rate world than most of us have memories of. Weve got to go back to the 50s when i was a teenager to remember those 2 Interest Rate. There are some, professor, and the market could be heading to a moment of truth and this market is very well supported and incredibly firm and that explains the low volatility environment more than anything else. And often its a little bit of a gut check time and also sentiment. I dont think it means were in a euphoric stage right now but i think the sentiment profile is very similar to march 1st when basically there was an allin feeling and the professionals felt like there was nothing but up and the market did nothing for three months heres the thing you had bad seasonals in february the almanac says february is a tough month. The market doesnt care. So either were up for a couple of tests and then all of a sudden its reearned the benefit of the doubt or well acknowledge that its not normal necessarily even though its happened in the past to go more than a year with a 5 pullback im wondering if its out there if we have the ingredients for it. Rick saper stestein, go ahea. We started the year leading to higher stock prices what happened in q1, we had 15 top Earnings Growth and all of a sudden the trump agenda started to fade out of the picture now were into q2. We have very strong Earnings Growth and low inflation, moderate fed, global synchronized fed and were in an excellent environment to earn stocks right now that will be used to buy pull backs. This could come towards the end of the year or First Quarter of next year. Professor, it really comes down to, are we ignoring some of the risks, whether theyre seasonal or others that mike laid out for us . It is true. Historically, september has been a tough month. Its moved towards the end of august but we know a lot of times it doesnt happen and how many times have we heard sell in may and go away . That wouldnt have worked this year and so i wouldnt oversell the seasonals, you know, in terms because i think the fundamentals are still very, very strong and about the euphoria, you know, a lot of professionals may or may not i know the public that i talk to is still extremely skeptical about the market and we all know how different it is than the 2000 bull market and when the public was so excited about stocks first of all, we all know they distrust the rally and many of them distrusted the trump rally. So i dont see my friends all saying, lets buy all in on stocks i see a lot of cash on the sidelines. I dont think anybody would care 2007 at the very top, we said, hey, were not at the top of 2007 i would point out one other thing. The reaction to earnings have been, i think, rational but also tilting toward sell on the news. I mean, you look at how good the numbers would have had to be you get punished if you havent reached the high bar. In aggregate, companies that beat have only been modestly rewarded there are good numbers but maybe they were largely priced in. Professor, go ahead. At the very end, you see these earnings estimates being guided down. The average beat is a penny or two. You do a penny, hey, thats not great. So beating the estimate, its always going to be around 70 . What we actually have seen is often in the past beating on the earnings, falling short on the revenues were beating on the revenue and certainly in the first and Second Quarter than we did before and in terms of Forward Guidance and i think that certainly is very good in the First Quarter and that has been very, very important beating has not been enough. Youve got to beat by quite a bit to get to the stock. More than half the s p names reported so far have beat on both revenue and earnings which is a fiveyear high for the spx. Big picture, youre looking at 4. 4 ish Earnings Growth, which is double gdp and 6 revenue growth, which is a real shock which i dont see a lot of people saw coming. If you can see that continue throughout the rest of this year, in terms of the estimates holding off, i dont see where the trigger is for people to not be in. The other point is, professor and you have to admit, you say theres a lot of money on the sideline. Its going to be hard to coax that money the new money into the market where stocks are now. Maybe if you get a pullback, sure but doesnt that sort of you know, everyone often tells me im weighted 10 pullback the problem with that is, of course, the market goes up 20 they wait for the 10 pullback and they are buying higher than they would today we have a 2 yield on the s p. Well see if theres a dividend tax cut. Its still favored over just outright interest. So for people who want to sit with income stocks are still the place to be. You dont always have to generate a lot of Capital Gains to say that, you know, stocks should be my asset into the future professor, we love kicking the market around with you thanks for having me. Michael, thank you as well, Mike Santelli here onset meanwhile, Second Quarter investor letter. Leslie picker joins us the numbers tell the whole picture. Scott, beating the s p 500 and an index of other hedge funds during the first half of the year, the firm led by dan lobe returned 10. 7 in the six months through june that compares with an 8 jump in the s p and 3. 6 gain. Thats according to a letter first obtained by cnbc this morning. In the letter, third point discussed a new Equity Investment in blackrock. They described the largest asset manager to be, quote, a misunderstood franchise. They actively managed hedge fund likes what it sees in passive securities notably, the blackrocks i shares had more inflows than the next ten competitors combined third point also invested in alibaba thanks to what the firm sees as the giants new Advertising Products the firm is turning its focus for the second half of the year to a rate hike it will be on hold until growth and inflation accelerate the letter also highlighted that the trump trade is fading, exiting reflationary macro trades and companies that benefit from low inflation they also decreased exposure to credit scrunchies. We continue to find market opportunities, particularly with Global Growth in tack. Nestle was there its a genius hedge, by the way. To own a stock in blackrock. Not that the trend cant chang but you can capture some of the flows youre not going to get. We like the blackrock and baba i think baba has huge discounts and part of that is justifiable to what google and the others are selling here because you have a company that exists at the will of the Chinese Government but nonetheless, the discount is too great and for a country that really wants to open their markets to a greater extent, theyre going to let baba keep going. In terms of dan lobe, hes one of the best other. Hes navigated every market. He started as a credit guy and just to show that hes able to find value on that asset size, which is absolutely incredible so ive got to take a look at blackrock. I get what youre saying completely. But blackrock they are feeling pressured in their core business. I dont like that name because and i respect blackrock and we do business with blackrock but your primary competitor is schwab who will give Asset Allocation away for free and vanguard who has given it away for almost free. Its not going to be a great business you can take in all of the money you want if you barely take profit on it in their interactive funds, huge shakeup. They are getting rid of the nba types and replacing them with san francisco. Sounds good. There is 38 market share and etf business which is unbelievable. Dan loeb calls blackrock an asset gathering machine. No doubt. He mentioned the statistics that you just said as he lays out why its such has such tremendous earnings power and thats why he likes this stock. And in the traditional asset manager business, labor is a very high cost when you have an etf business and its growing organically, you dont have the margin pressure that the traditional asset manager might have theres tremendous growth there and analytics which they have started to roll out which i think is a big growth area we like the stock. If youve ever sat by somebody from blackrock, which i have, the culture is absolutely incredible and the people are incredible thats what youve got to judge companies by, in my opinion, the culture. So clearly its done a great job. In terms of business, though, i just dont know. Its a lowmargin business what i like about baba the most, it stands out to me because look the at growth, scott. When you feel like its too late to jump into some of the names and you look over at it and see what his p. E. Is, especially forward p. E. , that name still has plenty of trajectory i think to the upside and even though youre buying it near the highs, this is a name that i think with the growth that theyve got, its incredible how much more room there is to the upside. Lesslie picker, thank you. Next stop, a biotech space is this stock and the whole sector about to dump plus, three big name big cap stocks before the break, what happens to the stock after boeings stock guidance its happened 13 times since 2010 underperforming the transports and the dow 30 for more kensho, go to cnbc. Com kensho. The Halftime Report is back in two minutes. Welcome back to the Halftime Report. Im kayla tausche. A vote has been delayed until 3 30 p. M senators will take up a vote on a standalone repeal plan that is not expected to pass and democrats are expected to bring a vote to send the whole thing and some movement on this vote at this hour but, scott, that will be delayed until the 3 00 hour back to you. Kayla, thank you. Well watch for that later this afternoon. Lets do our call of the day its biogen getting a boost of the day. 338 price target of Goldman Sachs. Its our call of the day weiss, what do you think they bumped to 338 i mentioned it yesterday. Biogen used to be an extended period of not being a darling. Its an important part of a lot of the index even though they are diversified. I bought the group its too diversified i think it makes sense its a Good Management team. And so, look, i think its a good call. This appears to be a good debate developing where some are saying that the gains in the health care space, health care stocks, biotech have been so good, its time to rotate. Just looking at the last year, if you go back to 2013, to 14, many of these stocks have done nothing you have a huge gap in the summer of 2015 that disappointed or a trial didnt go well. Doesnt matter the gap looks like it could be on the verge of being filled this stock has been stopped in its stra its tracks four times and then the whole gap up to 375 before any real resistance. If youre a trader, youre looking for a break on decent volume above 300 to get you interested in the game if it comes out of this consolidation, whatever it is, there really isnt a lot of overhead supply of shares. For the five years before the consolidation started, the sector was up 26 to 36 biotech. We have one year, a half year where its up that i dont think its over here thats traditionally how the sector gross its a very underappreciated industry both pharma and biotech. Expectations are very low. You can put up double digit Earnings Growth. We like the industry and the sector. You dont think that the sector and im going to channel jim laventhal. Maybe not over the long term. Right. But if that happens, the headline like a tweet from a candidate. It will be temporary. Does it cause unrest . I think the market is i am hun immune to it maybe i hope the market is not immune to it. From a trading standpoint, it will come down. It creates the opportunity. Those are the opportunities that we talk about when something is unjustified and gets sold off. Whats the analyst really saying here the valuation level. Look at this company its a Biotech Company thats gotten incredible growth im not talking about ford im talking about presently. As long as thats not priced in, thats just that bonus and if it happens, maybe it will, maybe it wont. A lot of the time thats been built into these stocks, thats when you see the big selloffs. Lets go to sue herera who has the latest headlines. Hi, everybody heres what is happening venezuela Opposition Leader lopez calling for venezuelans to support a strike against the government its his first direct message since released on house arrest earlier this month this comes as the wh