tv Fast Money Halftime Report CNBC February 9, 2016 12:00pm-1:01pm EST
just hitting revenue targets was the biggest obstacle. certainly, they have a lot to work with. meantime, it's been, since mid-december, the dow has not had two consecutive days of nontriple-digit moves. so we're in that range right here, down 81. let's get back to headquarters. scott walker and the half. thanks so much. welcome to "the halftime show." let's meet the starting line, joe terranova is here along with stephanie lin and john and pete najarian. our game plan looks like this. through the clouds, why one firm just upgraded sales force and why the stock has gotten just too cheap to pass up. the tech trade. investor paul meeks is buying amid the rubble. where he sees the sector heading from here. we begin with the markets and growing concerns about the health of the global banking system. here's how that trade looks at this hour. you can see, most u.s. banks are in the red.
morgan stanley bucking the trend, up more than 1%. but the real story continues to be at the bottom of that screen. those are the european banks. they've been spooking investors day after day. the selling there continues. whether it's ubs, deutsche bank, barclays, credit suisse or bnp, you can see these losses just continuing to pile up as investors continue to lose patience and lose confidence. >> well, i think that there's kind of a tale of two different banks, though. the european banks, they're not nearly as capitalized and as well positioned, going forward, as some of the u.s. banks are. that was my phone, as some of the u.s. banks. so, there's real concern there. it's almost like a black box. you really don't know what you have, and you don't know their exposure. here in the states, i think it's a little bit different, because our banks were forced to raise capital, and their capital is so much better, so they're much healthier. that doesn't mean that they're not at risk to kind of a global sell-off. but i think there is a
difference between the european -- >> well, the european banks are reacting as if there's something worse than a slowing global economy and low interest rates. >> they sure are. >> hitting them. it's gotten to the point where the co-ceo of deutsche bank today sends a letter to employees, trying to reassure them. deutsche bank says he remains absolutely rock solid given our strong capital and risk position. joe, should we be worried about what's going on in the european banks at this point? >> i think we should be worried about everything that's going on in equity markets right now, because the market is not going up, the market is going down. but if we're comparing this to 2008, i think it's incredibly wrong. i think in 2012, the ecb did the right thing, putting the safety nets in place, and there is something called the tltro, which offers banks the ability to go to them if there is a liquidity need. the usage of that right now is down incredibly since 2012. so logically, wouldn't european banks, if they had a liquidity issue, be approaching and utilizing the funding mechanisms the ecb put in place in 2012.
this is about earnings. this is about a problem with earnings. they can't cut expenses anymore. european banks did that. this is about net interest margin compression. this is about revenue that's contracting, it's about low loan growth. it's about the overall economy that's tepid for the entire global economy. but i don't think it's a liquidity issue like 2008 at all. >> okay, so, pete, are you -- you look at what happened, say, in goldman yesterday. >> yep? >> morgan stanley yesterday. day after day after day, as we showed oen the wall at the beginning of the program today. >> yep. >> and do you see opportunity or fear? >> opportunity right the now, the opportunity to downside, quite frankly. we've seen put buy in morgan stanley. it's up 1% today, but look what happened to it yesterday. this is a stock travis trading 24, 25 and yesterday gets all the way down into the low 22s, we get this 1% bounce today. let's see if that can actually sustain. look at the european banks, that has been the focus now for basically the entire 2016. you continue to watch the
deutsche banks. the market is pushing those lower. whether or not there is something truly out there, but they certainly are trading as if there's something -- >> banks are down 25% from their highs. financials are the worst-performing sector year-to-date. somebody who knows this space like the back of her hand is kayla tausche from the new york stock exchange, our own kayla tausche. you've seen this carnage, now you have the co-ceo of deutsche coming out, trying to reassure their own employees and perhaps investors at the same time. what do you make of the whole thing? >> perhaps that reassurance, scott, is why we're seeing deutsche bank only down 4 and change percent today. certainly looks like a better performance than the other european banks. and we see unicredit halted on a circuit breaker, now down more than that. credit swiss hitting an all-time low. but deutsche bank, the most important thing, what the cfo
said yesterday. he addressed some of the payments coming due, they have about 350 million euros due at the end of april and he said their payment capacity is about 1 billion euros. so he was seeking to pacify any concerns there. but just by the looks of where credit default swaps for deutsche bank ra trading, it doesn't look like that was enough to do it. i believe we have the five-year cds for deutsche bank going back for the last decade. and we are looking at cds getting pretty close to crisis levels. deutsche bank is a relative safe haven because of the strength of the germany economy. and so even during the financial crisis of 2008, 2009, we saw deutsche bank's cds holding up relatively well. but you can see that it's spiking pretty sharply now. and that is causing investors to worry. >> you know -- >> that's the ten-year chart right there, scott. >> kayla, some are asking, and i've seen people sending e-mails around saying, okay, is the cds, and as you say, sort of blowing
out or whatever, is that a sign of actual bank stress or a lack of liquidity in the cds market? >> it could be both, scott. and right now, we don't know exactly what the liquidity picture in the cds market is, but i think the fact that there is such a lack of faith in what these executives are saying and what these balance sheets actually look like that's driving this fear. even when you have executives come out and try and reassure investors, it's just not working. i don't know what, at this point, will convince them. there's talk of whether the ecb needs to do something equivalent to t.a.r.p. stephanie link was just saying that the european banks haven't done as much as the european banks to actually clean up their books. and even though it's been years and years and years since the u.s. banks did it, maybe it's about time for the european banks to have to do this. there are also questions about, why is this spilling over to the u.s. why are banks like wells fargo reacting when it's really a european bank story. and i want to show you a chart of chesapeake in the last year.
we know that stock well, we know that it's down about 90%. i went through the credit agreement. it has about $4 billion in a revolving credit facility, but here's what's important. who those lenders are. wells fargo is the co-syndication agent for chesapeake's credit facility. it's going to need to lean on that in order to pay $500 million in debt that's coming due in march. so, all of these things are separate, but they're all intertwined. there are just too many issues for the banks on either side of the atlantic to count whether it's negative interest rates, exposure to oil, exposure to russia, exposure to the emerging markets, sovereign wealth fund selling. sovereign wealth funds have about 45% of their own exposure to the financial sector. it just doesn't end for these companies. >> kayla, thanks so much. yeah, as we're trying, doc, a quick comment, if you would, to get our sort of arms around what kind of exposure the banks have to the oil and gas business. even though they've been starting to give or at least analysts have been diving through balance sheets and numbers and earnings and trying to give us some real numbers to get our arms around.
there's still a feel, though, that the banks have not fully come clean as the to what their exact exposure is to oil and gas. >> and you're right. that's the feeling. however, mike mayo, i was talking with mike yesterday, and mike said, 1.7 trillion reasons, john, as only, of course, mike can say. and he said, the difference is, that's $700 billion more than the banks had back in the 2008 crisis. and he said, that's $700 billion more than covers all of the exposure of the chesapeakes and all of the things, all the loans that have been made in the energy space. so he said, we are so far ahead of that, to steph's point, as well as kayla tausche's, what europe didn't do, that's the problem. however, just as the deutsche bank ceo said, or co-ceo, this particular thing, these cocos, these contingent convertibles, this payment is relatively small, that is due by them, as
far as their assets. this is a blip as far as what they owe. they'll be able to make that payment. it's further down the line and people are trying to read into that that there's more trouble. i don't think there is more trouble beyond that. >> let's bring in another voice in this conversation. jilian ted is the u.s. managing editor at the "financial times." she's live with us today from new york city. jilian, welcome back t. >> it's a huge story on the fte. you can see the pretty dramatic movements in the markets. there are three schools of thought about what's going on. one is that this is just what joel would call reflexivity. fear feeding on the fear. second school of thought would say it's because the yield curve is flattening in most major markets as banks interview negative rates. and has the potential to really hurt bank earnings going forward. the third issue is that there's something very nasty in the woodshed, if you like, that people haven't yet spotted. whether it's the energy sector, whether it's china, whether it's other issues that could cause
credit closure for the banks. the big concern right now is that something's spooking the markets, that most investors just don't know about. >> do you think it's these fears, and as i'm asking you this question, we are looking literally at the stock performance today of the u.s. banks and the european banks. and the continued selling, day after day after day is eye-opening for certain. do you think that it could be choice three, if you will, on your list, and it's something we're not taking into consideration yet, that could end up being contagious, systemic, or words that bring up things like '08? >> well, personally speaking, i find it quite hard to see exactly what that big thing, that nasty thing in the woodshed, if you like, could actually be right now. because the reality is that the u.s. banks have really increased their capital reserves since 2008. if you're talking about the energy shock, and you look at the big banks, yes, you're going to see some losses and write-offs from the shale sector, but for the most part, the u.s. banks have got big
reserves. and even in europe, there is certainly much thicker capital cushions today than there were back in 2008. now, if there was a much wider meltdown, say, of the chinese economy or something like that, that would certainly be very painful. but i can't help feeling personally that there is quite a lot of reflexivity going on. it's really fear of fear, fear of the unknown. here's one big thing to think about. investors have never seen a world before where you have so many rates, so negative, in so many countries. this is alice in wonderland economics. and frankly, i think part of the fear right now is actually fear of the unknown. and what that is going to mean for banks. >> what do you mean -- i'm sorry, what do you make of what john cryian, the co-ceo of deutsche did today, sending out that letter to the employees, where he says, the bank remains absolutely rock solid given our
strong capital and risk position. >> whenever you get a bank ceo or anybody saying that kind of thing, that's almost like shouting fire in a crowded cinema. people start to panic, even if you say don't panic. and one of the questions about deutsche bank right now is the degree to which they do or don't have to readjust their internal marks, ie, have they been too of the optimistic in the past about what's actually on their balance sheet. but certainly, jon cryer is trying very hard to reassure his employees and reassure shareholders. the interesting thing to watch right now is, is there going to be some policy response from the german regulators or even from the ecb? >> gillian, great to talk to you. coming up, investing like a coward. the safe haven trades. bonds, gold, utilities, the only areas of the market making money right now. should you stick with them or the so-called safety trades getting dangerously expensive? plus, a break in the clouds.
an upgrade for salesforce, creating a ray of hope for investors in the cloud computing names. it's our call of the day. and paul meeks weighs in with his take. and a look at how the fang stocks are sharing today. there's your look, mostly higher. amazon down by 1% or so. you're watching cnbc, first in business worldwide. thanks. ♪ [ male announcer ] fedex® has solutions to enable global commerce that can help your company grow steadily and quickly. great job. (mandarin)
valued after the sharp tech sell-off last week. it is our call of the day. steph, you own it. this was one of those that in the wake of the tableau -- >> ugh. >> -- debacle. >> yeah. >> pick your adjective. >> yeah. so, i like it. i own it. and it's been really hard to own it. but i think for the long-term, these guys are the winner, one of the winners, for sure. the dominant market share, 90% of their revenue is recurring. so i don't think that their business is at risk in the near-term. and i think the cios are still spending on cloud. and there's really a strong proposition for using cloud infrastructure and technology. so, five times ebitda sales is not cheap by any means, but let it settle and i think this is going to be a long-term winner, along with microsoft. and that's one i've been buying as well. >> still too expensive, guys? salesforce and some of these other cloud names? >> i think the valuation is certainly high, still, steph would agree with that, but it's been cut in half, and i think
that's what this upgrade is. the stock gets a couple of drars move to the upside today. they have plenty of growth, though. if you go through this note carefully, he talks about all the growth. it's mid-market. he's talking about different areas, but there's still some concerns and i think it is a valuation question. and are there seeing any sort of deterioration in terms of competition? and that's something i think we'll find out more in the next couple of quarters. but microsoft's quarter was killer this past -- >> i bought crm yesterday, call spreads as well as linkedin. linkedin, i look like an idiot. crm, i still look okay. but these are as volatile as the market is. we've all watched the market go up and down like a heart beat today. linkedin was up over 110, like i said, i was cheering and crashed back down to 104, 105. so they're literally just up and down and there's obviously a liquidation in the sector. i think that's what's creating the opportunity. >> let's bring in paul meeks, the veteran tech investor, of
course. paul, good to have you back. >> always a pleasure. >> i'm just trying to make sense of what's going on within technology over the last several days. why don't you tell me? >> well, it's absolutely nasty. and i think there are some great buying opportunities in here. the problem is, we don't necessarily have fundamental deterioration. we have a contraction of the valuation multiples. and when that happens, i don't know how low they go. but i would think, you mentioned tableau software, you mentioned microsoft, a couple of other names, including salesforce.com, i think if you bought them today, you'd be very happy a year from today. i just don't know what's going to transpire with the stock prices in the near term. >> you managed merrill lynch's internet strategy fund at the height of the dotcom bubble. some of the carnage we've seen to the last many trading sessions is reminding people of that blow-up. what do you say? >> i think there are some similarities, but also some stark differences. bab then, there were a number of
very small emerging companies that didn't have worthy business models. today when you see deterioration in the price of tableau, of amazon, of microsoft, of linkedin, these are companies that i know for sure are going to be longstanding and do quite well. >> i mean, linkedin, the damage there alone there the other day, paul, was down 40%. were you a buyer at -- in that weakness? >> i would be a buyer in that weakness, because i have a longer-term perspective. and i do think a year from now you'll be very happy if you own that stock. >> the the fang trade dead or are you still holding out hope that it has some more room after there's some cleansing, if you will? >> i think the latter. facebook is an extraordinary company. they continue to do quite well. amazon, i think, out of the fang names, might be the best opportunity, because i am absolutely stunned in a positive way with the success of amazon
web services. now $10 billion annualized revenue run rate, operating margin of about 30%, about 10x, the ecommerce business. netflix, i'm not so bullish on, but google i'm also positive. >> it's good to have you on, paul. we'll see you soon. >> yes, sir. >> the tech investor, paul meeks, with us. joe, what do you see in this space? >> i see coming into the year, fund managers wanted to own technology above all else. i think it was over-owned. i think in an environment where the s&p has not had any bounce and continues to see selling pressure, you're going to sell everything that you possibly can sell to lighten up your books and tech is included in that. i think it's a mean eversion for the space, unfortunately. >> i think you're also seeing a little bit more value from growth, right? so, i think you're seeing something like an oracle hold up pretty well. even an ibm is holding up pretty well in this kind of microenvironment. i think you want to take a barbell approach, some growth and some value. i think you want to be very disciplined on valuation, that
is the problem, as pete said, about salesforce, it's not cheap. but if you look at the growth rate and what they're putting up. yes, there's competition. they're still going to be able to post 30, 40% growth with operating margin, leverage, so i still like that story. and i was buying microsoft, i actually added to google as well today. a phenomenal quarter, the stock is down 10% after that quarter. and i think there's opportunity. >> pete, do you think there could be a change in leadership, to the magnitude of where high growth, high-valuation stocks, the fangs, whatever, they're pushed to the wayside, for a good while. and then such old tech names that are deemed as being cheap are the ones that now are going to leave -- >> not necessarily. i think if you look at that facebook quarter, you still saw incredible growth. and when you look at the video ad revenues, absolutely extraordinary. you could say the same thing about google when you're talking about youtube. when you look at some of these numbers, they are really, really impressive. when you get a market that everything is being sold off, to
joe's point, there are stocks that are being sold off. and i think we said that when we got above facebook. it got above 110, 115, 117, sooner or later they'll have to come down. they're going to sell regardless. and if you look at the charts, you'll get 200 day for a facebook, $94. that's where i think we might get back. and when you get back to there, i'm for sure in. >> coming up, viacom's newly minted chairman, current ceo, phillippe demon isn't doing shareholders any favors today. he speaks and the stock tumbles. earnings were out as well. julia boorstin gives us the inside scoop on the drama at viacom and the future of one of the highest paid media executives on the planet. and what will janet yellin do, or more importantly, what will she say tomorrow? japanese rates are now negative. the stock market is selling off there. investors now wondering if central banks are just out of bullets. we'll look ahead to the fed chair's testimony on the hill, next. [woodworker] i live in the fine details.
we didn't really have anything, you know. but, we made do. vo: know you can craft an investment plan as strong as your values. al, how you doing. hey, mr. hamilton. vo: know that together you can establish a meaningful legacy. with the guidance and support of your dedicated pnc wealth management team. all right, welcome back. here's what's new at noon today. bill gross of janice capital just tweeting about the markets the, saying that global margin call forces de-risking, even as valuations look more attractive.
negative feedback loop. hold cash reserves. joe, your reaction? >> i think that's rather obvious. i think it's something that given where the market is over the last couple of months, we've been talking about. it's always good to hold some cash, especially in an environment where you're waiting for buybacks to come around and -- >> but if you're wondering, yeah, holding cash may be the obvious part of that. but it's the first part that maybe provokes a conversation as to why, perhaps, the market continues to go down, even though you say, okay, it looks a little oversold, things are starting to look like they're cheap enough to buy, but yet, because of all the negative, as he says, negative feedback loop, you've got margin calls as well. it's preventing the cash from coming into the market to buy stocks. >> and when you have european banks going down 20, 30, 40% and going down as much as they're going down each day, you certainly have to take note of that for sure. if you want to be in the market, i think you probably want to skew towards the u.s. which is why within the whole
banking sector in general, why i actually prefer something like a bank of america versus a goldman sachs, if you will. but more than that, beyond financials, i think you want to stay more consumer, beneficiaries of better jobs, and lower gas prices, and lower for longer interest rates. so i think there are pockets you can play, but i think you definitely want to pay attention to what's happening with these european banks. >> and when you look at, what forces are margin calls, of course? well, the stock price declines, significantly to the point where you're getting near that 50% level that the broker has lent, you know, half the money up to the customer. and that customer is now in danger of losing the bank's money, not just the customer's money. so that's when they hit them with the margin calls. because of the sovereign wealth selling being so aggressive, judd, at the beginning of this year and continuing up through the first week of february, and as far as we know, continuing right now to this day, that is also accelerating it and pushing to the levels that trigger those margin calls. >> quickly? >> quickly, i don't think the
market looks technically oversold. i think the market actually looks in a very perilous position. it's sitting within that 1810 to 1850 level. they're concerned if you go through that level, what happens down below there. how much further do you add on this decline for the s&p? >> well, yeah, turbulence continues at viacom. the stock moving sharply lower today, and some of it might have to do with what the ceo, phillippe debonn, said or didn't say on the earnings call. cnbc's julia boorstin has the very latest there. hey, julia. >> hey, scott. that's right, viacom shares fell as much as 16% on the earnings call. now the stock is down around 15%, with viacom's revenue declining 6% in the quarter and a studio paramount showing a decline in revenue, dauman defended his revenue's stock decline, and despite the stock's drop, dauman got a pay raise to
$54 million last year. now, dauman's appointment last week as viacom's chairman drawing criticism from sherry redstone as well as wall street analysts. on the call, dauman said he wanted to address speculation about viacom and our future. >> our outlook and the facts have been distorted and obscured by the naysayers, self-interested critics, and publicity seekers. we will not be distracted or deterred as we build for the bright future ahead of us. my singular objective is to protect and build value for all of viacom's shareholders. >> dauman said the decline in the company's valuation has been, quote, accentuated by a lot of noise. but when pressed to explain what noise he was referring to by btig analyst rich greenfield, he said, quote, it's obvious to everybody what the noise is. now, clearly investors seem concerned by the lack of clarity on the call.
scott? >> well, he's probably referring to people like eric jackson of spring owl, who sent that 99-page letter to the board saying that mr. dauman should be ousted. mario gabelli for that matter has been publicly critical of viacom's performance as well. and he's an investor held in very high regard by an awful lot of people. >> absolutely. and there's the fact that sherry redstone is saying that dauman is not the right person to have the chairman role, considering the performance of the stock in recent years. so, it seems from the tone of dauman on the conference call that he didn't want to acknowledge what challenges viacom is facing. he was very optimistic in saying that he was very focused on -- you know, optimistic they were able to turn around ratings and he also said he was very focused on improving the stock performance. but analysts have been very critical and there are a lot of questions about whether he should have gotten that chairman role. >> yeah, there's a suggestion,
julia, thank you. doc, i think people have said, you know, give him a year, see what he can do. what do they need to, you know, sell off some assets? do they need to buy property? >> they need to get "the daily show" back to a big revenue stream it was. it's not right now. that's one of the issues that mario gabelli sites in "the post" today. operating income down 10%. film down, i think, 15%, judge. this is one that initially i thought could be a big pop at the beginning of the year. the sixth of january, i sold out of this thing north of 42 bucks and boy, am i happy i did. because i had it both in my personal and the halftime portfolio. now it's 35 bucks a share. it's got to be getting interesting at some point, but it would certainly get a lot more interesting if mr. dauman or some sort of change were to happen very high up at this company. >> okay, coming up, playing scared. >> i don't have any courage at all. i even scare myself.
>> well, the cowardly lion trade is paying off for investors right now. we'll dig into it with mike santoli. plus, the happiest place on earth has been a sad stock so far this year. we have your playbook ahead of disney's earnings tonight. stocks down 13% year-to-date. after the break, we'll talk about that and as we head to that break, take a look at the transports tracking for the first up day in the last three. the group led higher by the airlines today, alaska and jetblue.
hello, everyone. i'm sue herrera. here is your cnbc news update this hour. director of national intelligence, james clapper, telling the senate armed services committee that north korea has expanded a uranium enrichment facility and restarted a plutonium reactor that could start recovering fuel in just a few weeks or months. during his annual assessment of the top dangers facing the country. that's when he made those comments. a suicide bomber drove his car into a police officer's club in damascus, blowing himself up and killing several others. syria's interior ministry says that isis claimed responsibility for that attack. the turkish coast guard releasing video showing the successful rescue of a migrant stuck on the end of an almost
fully submerged boat. migrant crossings in the first six weeks of 2016 are running at nearly ten times the rate of last year. a new policy from the nfl will restrict those convicted of sexual assault, domestic violence or weapons offenses from attending the league's annual scouting combine. nfl today reporting the nfl's executive vice president of football operations outlined that new rule in a memo sent to teams. that's the news update this hour. scotty, back to you. >> sue, thank you so much. take a look at the markets right now, give you a look where the picture is today. the dow is off the worst levels, for certain. it's off 65 points. s&p off nearly 8 and there is the nasdaq, which is down as well, about one-half of 1%. show you the picture of bond yields, as well. there's the ten-year note. jgbs on your right, but the ten-year yield going down to 1.73% today and a negative yield for the japanese ten-year. dollar index is now at its
lowest level since october. and there it is today, as well. fed chair janet yellin testifies on the hill tomorrow. what could it mean for the markets and what is she likely to say? senior economics reporter, steve liesman joins us now with what to expect. and the dow is only down 1,700 points since she last spoke. >> 55 days of silence from the fed chair. december 16th, it was a different world, scott. literally, a different world. 1,700 points on the dow. you had -- we had our cnbc wrap it update running at 2% for the fourth quarter. that was the expectation. that was the consensus on the street. >> now it's -- >> it's now 0.3. not quite nothing. come on, man. don't overstate -- >> being a little sarcastic. >> it's 0.3. the rebound for the first quarter is looking a little better today. we're running about a 2% plus on the first quarter, which is nothing to write home about, but better than not having a whole number before the actual number. that's better. plus, you had japan went negative on interest rates in
the interim period and you also had the ecb with additional easing. here's my take on this tomorrow, scott. which is yellin can meet the market halfway, but it can't meet it all the way. i think the market wants total capitulation from yellin on no more hikes. she cannot do that. and i think the market is feeling a bit like the tea party the day after the 2012 election, which is, in other words, in the mood for no compromise having won a big victory. >> she absolutely needs to acknowledge, does she not, that the world, as you say, since you last spoke, has changed. it can't be one of these, like some of the fed speakers who have been out there, oh, you know, it's all noise, don't worry. you know, everything's great. we can still say on path, i ie,sther george. it's all good. >> this is where trillions will be traded, in the nuance there.
remember, we had a 4-9 handle on that employment report. another employment report to come. we had this huge gain in wages, this 0.5%, plus, she is a chair who has chosen not to front run her committee. and the direction, so she cannot change policy ahead of time. >> so the other -- >> but financial conditions have changed. and she will acknowledge that. >> the other issue is whether the market even wants to hear anything or whether it thinks that central banks at all even have effectiveness anymore. and you look at the nikkei, down 5% overnight, where japanese yields are, which we just showed you, and there's a suggestion that they have no more bullets. and that's a perfect representation of the effectiveness of central banks. seen right there. >> i think you've nailed how the market is trading, a bit like a wily coyote cartoon, when it falls, it falls all the way
down, essentially without a net, is the way the market feels. and we know that central bank tools have been less effective. i don't think they're completely ineffective, but the market certainly feels like the central banks have less that they can do and less that will work. >> we'll see tomorrow. will be interesting. steve, thanks. >> look forward to it. gold falling from a seven-month high today. jackie deangelis at the nymex with the futures day crew. >> that's right. we see gold prices in the red today, but we are up more than 12% year-to-date. so it's been a good year for gold. jeff killberg, do you expected the win streak to continue? >> i think we may press pause. but this weakness in the dollar, we talked about that, liesman just talked about, that has been the catalyst that has dusted off gold. no doubt about it, this precious metal nearly trading $1,200 has shined again. but we're all focused on the testimony coming of one hour before the stock market oppose tomorrow, because in the event, we see this dollar continue to weaken. that not only puts a smile on yellin's face, not only other
central bankers. that may make gold press pause. >> a lot of moving parts here, how do you trade gold right now? >> i think right now you actually want to be buying dips. it's a little bit like selling rallies in the stock market. the there are several problems that are won, relative strength indexes for gold and futures, 78, which is overbough. goldman sachs out with a note today, saying they expect gold to be at $1,000 an ounce by the end of the year. and traders like to step back just before there's a bunch of fed speak. but turmoil doesn't come to an end, all of a sudden. so i would still be a very tentative buyer of dips in gold. >> all right. meantime, we're going to discuss gold on the online show with peter schiff. we're also talk to him about the markets and the fed. he's saying the fed will have to institute nor qe. don't want to miss that. and oliver is telling us the s&p gs going down lower from here. >> see you in a bit. coming up, a check on the halftime portfolio competition.
and the najarian brothers are seeing some unusual options in mickey d's. are they following that money? we'll find out, next. the "halftime report" is the place more market- moving interviews. >> i see really bright spots. >> real money. >> there's no question home building stocks have the most upside. >> real money. real debates. >> the s&p 500 is whistling through the graveyard. >> the most profitable hour of the trading day. >> i'm holding on, because i believe it's a growth scare rather than a bear market. >> the halftime report, weekdays at noon eastern. here at td ameritrade, they work hard. wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement.
coming up at the top of the hour on "power lunch," deutsche bank and other european financials getting slammed again. lackluster profits, questions about their balance sheets. the the turmoil there going to spill over here to the u.s. even more? and then investors are piling in to utility stocks. that sector is actually up more than 7% so far this year. but are these dividend payers now getting way too expensive? plus, three stocks that look like great value at these beaten down levels. we'll talk about all that on power lunch, now back to you, scott. >> thank you, see you in just a bit. want to show you a crude oil which is now down more than 3%. joe, i remember we were having that conversation today at 28.75 on wti crude, which looked to you at that point like a tradeable bounce, which it
certainly was. now you wonder, as crude starts to roll again, now it's at 28.72, down 3.3%, watch the dow and the s&p, as well, to see if there's weakness that translates into stocks. >> a week ago last friday, i think, was the trade -- was the end of the tradeable bounce. we talked about that last monday. where it goes from here, i am not particularly sure. i do believe, and it's rather obvious to everyone, if it breaks below those 26.5 levels, then it's going to place all risk assets in a very perilous position. >> this comes with the baron's cover, pete, this weekend. 20 -- here comes $20 oil. >> yeah. >> you even have a -- >> sure feels like it. >> you even have a scenario, with liesman, feels like the movement in the dollar. the euro is hitting 113 or whatever it is today versus the dollar. so the dollar is weaker, and crude oil continues to weaken as well. >> continues to weaken. you know, everybody's fixated on different -- everybody's got their own number they seem to be looking at. the number i'm always looking at
is the ovx. so the conditions in which people are trading oil right now and those traders, whether it's margin calls or whatever, that's why -- these moves are violent. whether you're talking about the market itself and the move off of the lows yesterday, which sure look like a lot of short covering in the market itself, or look at crude each and every day, you have certain parts of the day where we see dramatic moves. this 3% move came up that quick. >> problem is, now you've got your eye on crude. you've got to watch the banks. i think the european banks remain, you know, if there's a central story, they're one of the key characters within that story. and then there's this tech rollover. the nasdaq is not getting hit as hard as it has been in the last several days, but it's still something to watch. >> and what we noticed yesterday, too, even when we were down 380 points or so near mid-session, the fang stocks were holding in yesterday, holding very strong, versus the other tech. in other words, they'd already taken the money off the table in many cases, the big institutions in those fang stocks, and they
you know this year. the only two sethors in the green are telecomand utilities. both up more than 5%. what do you guys do with these? do you stick with them or bail? steph. >> i think you probably stick with them for now until you get more certainty where the economy is going. right now we are talking about people think there is going to be a recession. >> where do you get yield otherwise. >> consumer staples. the three groups. barbell it with some industrials. in fact, industrials have held up well year to date. probably because they got beaten down so much but i think you definitely want a balanced portfolio. >> what we were saying before the break, as crude oil falls apart again, at $28.70 the stock market has weakened as well. there is your crude picture. at the lows of the day. stocks are following suit. we'll keep our eye on that. as people look for the safety trades we were just talking about, sometimes it pays to be a coward.
mike santoli highlighting lower risk plays. >> one of the big complaints of the bull market was there wasn't much of an alternative, everything else was yielding almost nothing. now you see a huge groob fortrefor treasure s, 1.7%. what has happened in this broad market selloff some slightly less absolutely safe sectors of the bond market are delivering decent return. broad investment grade corpus, 375%. high grade corporates really don't kill you in a downturn. then to the lower tier of an investment grade, qftb, vw rated investment grade bonds. 4.7%. there is always risk those guys are on the doorstep of becoming junk bonds. also, preferred stocks really a dark corner of the market. retail, investor oriented.
about 6%. bank issued stuff there. the point here is there is a little bit of juice returned to some areas of the market that are not terribly risk le sloo you have got to look long and hard for it, doc. >> thou there are folks that do a good job. first trust with the high yield plays, they do high yield, judge, without energy in their tactical portfolio. so there are ways you can get around and it get to a safer, if you will, yield chasing that high yield and still in the security that make's talking about. >> mike, thanks. >> okay. >> a reminder to head to cnbc.com/pro to read mike's piece. a quick note before we head to break. i want to wish happy birthday to one of our most loyal fans. joseph lauk laughlin watches c nabz every day. he turned 103 this week. he is a little bit older, a lot wiser. as far as his keys, exercises regularly, eats ice cream every
single day and spends lots of time with his friends. happy to have him as a loyal viewer as well. happy birthday, and thanks for watching. coming up, disney shares falling 10% so far this year. our experts take positions as far as their earnings. right after this. to thrive in an ever-changing environment,
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just wanted to show you the financials once again. because it does remain a significant part of the market story and investor concerns. and mostly those stocks at the bottom of your screen there, the european banks, the ubss of the world. deutsche bank is down 4% today, barkcally's down 5%. credit swiss almost 8%. but u.s. barvegs have not been immune to the selling. morgan stanley may be in the green. everything else is in the red. as you look at the markets and try to figure out where we're dogs going. david costen of goldman sachs was on the network not that long
ago, he is sticking to this, this is a growth scare, not something more citizenster and is sticking to 2100 on the s&p and year. >> i think that the uncertainty surrounding the two candidates for the presidential are impacting the markets. they are definitely impacting health care. and i think they are impacting financials as well. i go back to what i said yesterday, if north carolina energy, natural resources are under pressure you have to have financials and technology come out and have leadership. you are not seeing that. >> if the consumer continues to do what they are doing, 70% of the gdp, maybe thatness pro us up from not going into a recession. i think that's the debate, are we going into a reeegs senior not. steve liesman said first quarter you are running at 2% gdp as the inven story agistment from the fourth quarter to the first quarter is made. we need points to see where we are on the growth curve because i think that's where portfolio
manage remembers trying to put their bets for the longer term. >> doc, is david costen on to something or is he going to be back shortly saying he was too optimistic. >> i think he is optimistic but i agree with david and lee cooper nanowho said virtually the same thing. i think they are both going to be right. but it is a very tough tough first quarter, and until we're through another employment report, because i don't think the next employment report, judge, will show anything like the wage growth that we saw in this first one. >> when we go through the volatility we've gone through, scott, and when we got the spike at the end of december it's going to last a month and a half, maybe two. if you go back in the cycles when you get big spikes that's what it looks like. in august, we didn't get relief a nonand a half works months later. the viks got up to 27. we get somewhere over 30, scott, i think suddenly we get that blow off, then pull back and then it's time to buy. >> disney after the bell with earnings.
bob identifyinger is going to be on the closing bell to discuss the quarter. certainly, everybody is going to be focus on what is happening at espn? >> i like the risk reward of disney at 91, yes. >> selling pressure has returned today. "power lunch" picks up the story right now. ladies and gentlemen, thank you very much. welcome to "power lunch," everybody. along with a melissa, susan, and brian, welcome, everybody. stocks taking another leg down this hour. the losses compared with losses yesterday and back on friday not as drastic. nevertheless, the dow down about 80 points a half a percent. the nasdaq down two thirds of a percent. and the s&p off a half a percent. crude down under $30