If brian were here, hed know that song i do not im Tyler Mathisen major averages in the green in this next, really, three hours left on this final trading day of the quarter and of the first half of the year the dow getting a boost from nikes rally on the backof its earnings beat out last evening check out whats moving right now. The dow industrials up a little bit. As you look at humana, Becton Dickinson all hitting new 52week highs. Its also the last trading day of the first half. Investors, so far this year, have seen some solid gains bob fisani is on the nyse floor. D dominic chu. Thanks, tyler take a look at the sectors here. The key point is were continuing to see mild resistance in technology for example, semiconductors are lagging a bit. Biotech, which is another Market Leader lagging a bit a lot of talk about this rotation going on. Look at the leaders in june. The big leaders have been tech, particularly Semiconductor Stocks utilities have done well as Interest Rates have stayed low overall here you can see semiconductors, biotech, utilities, all to the down side. Laggards in june, the ones that have had difficult times throughout the years banks, retail and the other Group Overall have generally been moving on the up side banks up about 6 so far for the month of june here interestingly today, were starting to see signs of rotation a little resistance to buying these tech names now look at the high volume etfs weve had out there recently today, we had great month for Semiconductor Stocks the smh high volume etfs thats to the down side. Also heavy volume in country funds. Italy, france and germany. This is happening for a simple reason we saw huge inflows into european funds in the last three months as the european economy is starting to improve today some people i think are probably starting to lighten up a little bit on that bet i still expect europe to do well, but, obviously, people have done very well on this trade and you can see people just sort of take a little bit off the table in the last day of the first half they might be frightened of whats happened in the european bond market as well which may have been one of the incentives for them to sell a great job explaining whats going on from tech to financials is it going to continue in the second half . Dom . I started my wall street career back in the late 90s when you wanted to see both tech and financials participate in a rally as a sign of perhaps this continued move higher for the rest of the markets. Over the last 20 years, weve seen a difference in performance on average for the second half of the year for the overall tech and financial sectors. Technology, the best forming sector for the second half of the year over the last 20 years. Kensho says 4. 5 up side positive 75 of the time thats better than the overall mark ch mark chet is up 2. 75 . And financials are up 2 on average, positive 60 of the time if you look at the sector etf, they diverge, converged overall but now you can see again financials playing a little catchup and tech starting to roll over here the question, does that continue some of the stocks that will play into this seasonal theme, check these names out because they are some of the best performers apple, one of those stocks up 13 on average in that time span 65 positive activision blizzard. Charles schwab and raymond skwams as well up 11 , 13 when it comes to traders and whats the biggest influence, we asked guys on the floor of the exchange this is what they said, tech or financials take a listen. The most important sector was last year as well as the financials financials will be the sector to watch if you can get the financials working back in, particularly if theres a hint of deregulation, i think then the whole market will pull together, and we can see new highs. Thats the debate tech or financials a lot of floor traders say financials back to you. Major averages have had a nice run the dow and s p 500 up about 8 . The nasdaq up 14 . I would take that, retire, fine, good year right there. How should you position your portfolio for the second half . Joining us is mike lashini and david frumpleman with Riverpoint Capital Management let me start, mark, with you and what sticks out in your analysis for the second half of the year is that you think energy is going to be a much better performer than it was in the first half why do you say that . I think were going to see a return to these more economically sensitive sectors as we wash out expectations here in terms of some of the punkish data weve had economically over the first half of this year. That will help to attract interest out of the defensive sectors and even tech into some of those more economically disposed sectors the second part is supply and demand i think opec plus russia i expect what were going to see is firming oil prices on the back of investors realizing that that draw is not only occurring but is significant in nature and, therefore, that ought to be able to boost profits in the energy space and, of course, Energy Shares along with it. This years worst performing sector by far. Where you see the oil price. If you view that if your view is that production will not increase and will stay at roughly where it is, which is what im hearing you say i think production will increase, particularly u. S. Shale production, but its not going to be overcome or it will be that it overcome by demand. Particularly coming out of the emerging market complex. Im looking for mid to upper 50 a barrel let me turn to you and talk to you about the sector that has really led the way so far this year as opposed to marks energy call lets talk about technology. Is what were seeing a kind of run of the mill rotation, a kind of normal and maybe even welcome pullback, or is it air coming out of a little bubble i would say the latter. Wed call it a welcome pullback. If you look at the fundamentals and technicals, technology is one of the most attractive its up 33 over the last 12 months, and its almost like, you know, a fine thoroughbred like secretariat at some point youre just going to see that gap filled a little bit and its going to come back to the overall market just a tad. We would embrace that as an opportunity either to remix or add to the sector based upon the very attractive fundamentals youre under weight energy. Respond to what you heard from mark about why hes telling investors to load up on energy you know, thats a really tough call we were just left of center, we did think the price of oil would probably be in a range of Something Like 45 to 55, maybe up to 60 this year and at the lower end of that range. And supply has been stubbornly strong and inventory stubbornly high and for us to get really excited, theres just better opportunity near term in a cyclical area like financials or Technology Near term that can shift if we start go ahead. Finish your hought our view could shift if in the last, you know, just week or so theres news thats come out that production has been cut back that would firm prices up theyve recovered a little bit we can shift the view but were comfortable being neutral. So, mark and jeff, energy is a big area it embraces a lot of different kinds of players, lots of different names. Id like to leave our viewers with either the subsectors within energy or the specific companies in energy and technology that you would be highlighting right now mark, you go first where in energy . Sure. You want to stay domestic and focus on the unconventional drillers and emp companies the best, most efficient way to capture that trade is going long in etf under the symbol frak i think they are going to stand to benefit from two things one, Higher Oil Prices which will make, obviously, drilling profitable, but in addition to that, i think its the one space in the world in which youll see Production Growth as opposed to the rest of opec and other nonopec countries cutting production mark says what the frak what do you say . No fraking way i guess i would say what the fang really good we like the fang stocks we like facebook and amazon within the social networking and internet area, but we also like, particularly, broadcom as a Semiconductor Stock with just a beautiful profile with regard to p e versus growth rate trading at one times its eps growth rate and well positioned in 30 type of growth areas. And they are in Wireless Connectivity and components making various products for touch screen and blue tooth, wifi that type of thing we also like in the go ahead, tie it off. Im sorry. Please i was only going to say melanox is a name that is mid cappish in nature. 2 billion a contractor, too, in that hyperscale highspeed computing area you can really have a home run with a name like that. It would really matter to revenues mellanox. Thank you have a great weekend, guys extremely appropriate if youve just been listening to this discussion. Jackie de angeles. Big news you can see that oil spiked to session highs on this news. Baker hughes reported that for the week ended today, june 30th, recounts went down two however, this is significant because its the first time weve seen a cut in 23 weeks thats since early january when that opec cut went into account. Thats when the shale producers started adding rigs, and they just didnt seem to stop now this is interesting news because it also combines with what we saw in the eia report this wednesday that u. S. Production went down 100,000 barrels. What happens here is you have the opec players that come out and announce a cut and we try to see if they stick to it and what not. But the u. S. Producers, they selfregulate. Theyll not tell us theyll do it they just report that theyre doing it and then they manage these Price Fluctuations accordingly so you can see that prices maybe got low enough to create a little bit of a squeeze here, and this is when they start to act. Whats interesting is if this becomes a weekly trend we see these rigs go down on a longer term basis. We can see when the price of oil might affect the rig count here it is right now trading 45. 77 looks like well get a close over 45 today, which is technically significant, too jackie, thank you i think he rerouted his plane on that news. President trump meeting with south korean president moon at the white house today. Did they find Common Ground on trade and north korea . There are lots of areas of contention here. We saw the two president s in the rose garden giving a joint statement. Not taking questions from the press but the session in the rose garden came just after a meeting in the cabinet room in which wilbur ross pressed the south korean delegation on particular, the rules on auto sales in korea by u. S. Firms complaining that the quotas on those were not fair to the United States and also mentioning some other specific entities i want to play two snippets from each president backtoback. And what struck me about this and see if it struck you in the same way is just how different in tone the two president s were. The president of the United States very specific in his complaints about the trade relationship the president of south korea, however, offering a much more general openended kind of a statement. Heres what they both said in addition, i have called on south korea to stop enabling the export of dumped steel these would be important steps forward in our trading relationship very important steps they have to be made not fair to the American Worker if theyre not and they will be translator during my visit this time, President Trump and i were able to forge friendship, as well as deep mutual trust as we endeavor to tackle numerous challenges ahead of uthiswill give us a Solid Foundation to rely on. So the president of south korea there not expressing the same misgivings about the trade relationship in fact, he said it was a very solid relationship and a Good Foundation well see from the readout later this afternoon what, if anything, the two leaders have agreed on today. The president heading out this afternoon. He woent be staying at the white house this weekend hes going to bedminster, new jersey, up near you guys to add to what you are saying, the difference in tonality remember the earlier taped pl playback, the room full. President trump was clear. I want the cameras to stay and made wilbur ross make a statement about steel. Made gary cohen read out a statement about how frustrated they are about steel and dumping. It was diplomatically impolite with what they did with the president of korea sitting there. Normally you dont get to see that you see the warm Opening Statements and behind the scenes, an exchange of grievances and what you see is often they read out later the diplomatic speak is they had a frank xarchlg of vie exchange of views. Today we got to see the Frank Exchange of views on tape, at least from the u. S. Side havent seen such frankness from the south korean side today. Maybe as the day goes on, well get a little more from their side as to what they made of al that thanks, eamon repeal obamacare now replace it later the latest in a look at your second half playpook for health care plus, elon musk tweeting about the release state of the model 3. What they hope that news will be, coming up next youre watching power lunch. On cnbc. First in business worldwide. Last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. President trump calling for a repeal of the Affordable Care act immediately and replacing it later if republican senators are unable to pass their current bill john harwood is live in washington with the latest back to square one, john we saw the evolution of this new position in realtime this morning. First ben sasse, the senator of nebraska, who indicated in remarks on that Fox Television program that if they cant pass it in the next couple of weeks, they wanted to go to a straight repeal this was the plan republicans had at the beginning of the year that they then abandoned subsequently, after ben sasse said this on fox friends this morning, President Trump sent out a tweet saying if they cant pass their Health Care Bill they should immediately go to repeal and do the replacement bill at a later date subsequent to that, Kellyanne Conway coming out in Television Interviews and saying this was a realistic path for republicans to first do repeal and then do replace. This is, however, not something that the Senate Republican leadership believes is a feasible strategy at this point. I spoke just a few moments ago to a source familiar with Mitch Mcconnells thinking who said that ship has sailed earlier this year. Theyre down to the possibility of simply getting rid of some of the taxes that would have been repealed in the original repeal and replace bill use that money to make the medicaid cuts less severe and hope they can woo enough senators but even that is not likely the saga goes on. Thanks, john the Second Quarters best performing sector was health care its a runnerup for the best performer in the entire first half of the year so far. Whats ahead for the second half of the yoor aear, and will it continue to outperform lets bring in professor of health care investing. Professor, good to have you with us thank you lets talk about the stocks that had benefited off the notion that perhaps there could be this bill that could actually pass the gains we saw associated with that, would they unravel if the republican goes to just simply repeal id be very surprised first, i should add, i dont see a straight repeal as a likely outcome, but even in that case, managed care, fundamentals are still fine and theyre up quite a bit. Most of the hmos have left the exchanges anyway youll still see utilization for medical devices and biotech sort of is not connected to Health Care Reform anyway right and that was sort of my second question and that is, you know, in terms of the sector rotation, it probably started even before the notion of a senate bill was in place. In particular, the biotech rally that weve seen was not underpinned by any sort of Health Care Bill whatsoever. So you see that theres still strength, that investors still want to pour into these sectors . I think its going to be hard to repeat the first half but the fundamentals are still really good, generally speaking for the Sector Health care, other than tech is the only game in town for any growth organics. So i dont see why people wouldnt want to come in you have to be a little selective. Does it matter what happens in washington . You think the sectors buy it or am i oversimplifying demographics is destiny and regardless of what they do in washington and, to be fair, at this point the republicans are down to doing very little. Even if they pass their bill i would say the underlying people are going to be sick whether the republicans repeal obamacare or not on a valuation basis and risk reward basis, health care is in pretty good shape. You cant just throw money at it but managed care, medical devices and others youre beginning to go where i was hoping to lead you and that is to be selective here for us and tell us where you think the targets of opportunity are medical devices like Boston Scientific give us some other thoughts. Some managed care say a United Health is the bellwether thats another one thats had a terrific run this year but its probably