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tv   Fast Money Halftime Report  CNBC  February 24, 2016 12:00pm-1:01pm EST

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the critical levels which are a little farther above. he was talking more like 1890 or 1880. but there's a lot to get through this afternoon. watch volume as well after a light volume day yesterday. we'll welcome john fort back later in the week. in the meantime let's get back to headquaters with scott and the half. ♪ >> thanks so much. welcome to the halftime show. joining us today is josh brown. our game plan looks like this. road kill. why analysts just cut gm and ford to sell even after the stocks already hit the skids. we'll debate the call of the day. who wants to be a millionaire? maybe not you unless you're looking for an irs audit. stocks cutting their losses in half at this hour. it has been another tough day though. the major averages recovering.
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oil is lower. it is recovering as well. banks seeing even steeper losses today. raises the question of whether the rally for stocks is over for good. whether this market is really on the verge of some serious trouble. pete, is it? >> is it in serious trouble? i don't know that it's in serious trouble but will it trade lower? it absolutely is going lower. and when you look at this rally and we have been talking about this for days now. the rally is encompassed by materials, energy, a few other names here and there but financials have been lagging on these up days and on the down days they have been almost in the leadership role so we have to see the financials show any kind of stability. we haven't seen that. >> 1810 was the low in february. are we going back there or even lower than that, doc? >> no i don't think we are. the reason is i think it's a reaction to the exit, the potential exit by great britain out of the european union. i think that is why, that 3.6%
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move that you've seen out of the sterling. when you're talking about the biggest market on earth because forextrading is the biggest market. bigger than oil, gold and stock market combined. when you see a 3.6% move there you're going to have volatility. that's what we're seeing here today but look at what you said at the top of the show. we cut our losses in half. is this the end of the world? do we have to trade back down to the lows? >> no. >> you don't think we'll retest the lows or break through it. >> still serious questions about this. >> i'm not going to say it's off the table but i think that what we're seeing and the 200 point sell off that we saw right on the opening today was as pete said tied to oil and also tied to the volatility in forex you can go euro yen, any of it but that is a massive market and when that's moving that big, again it's going to out shadow everything else in the world. >> josh are you on the other side of this? >> we're in a bear market.
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been saying it all year. i continue to say it. you cannot tell me that all is well when you have goldman sachs down 35% from the 52 week high. morgan stanley down 44% from its 52 week high. that does not happen in the bull market. i'm sorry. and then you take a look at the gold miners. it's above their declining day which is about to go positive. it tells you there's no confidence in this market whatsoever. so from a short-term perspective we had a huge debt cap bounce. when it failed at the decline in 50 day which it did two days ago took profits from the ramp. longer term investors need not be concerned because a lot of the damage already happened in individual names. shorter term traders need to understand the down trends and take profits on them. >> doc says no, i mean, you can believe it in. >> yeah. i think you can believe it in
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still and i'm not saying that we couldn't retest. i'm just saying i think it's a smaller chance that we retest 1810. the number you threw out there. we see a lot more disconnect and this is going to continue obviously. the full exit potentially could be june. >> forget the exit. we have oil. >> i can't forget the exit though. >> continues to go lower. what if we continue to get punkish data. now we get the pmi services sector below 50 first time since october of 2013 so now we're worried about the service side of the economy falling into recession too. >> i think we continue to to just what we have done so far. again folks you hear us talk about it a lot. about options. what does it say? we should be moving 1.3%. we're not even moving 1 today. we did move over that 1.3% based on the vix being up at 22 but it tells you a 1% move out of the market. so we're doing what the market
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thinks we should be doing right now, judge. if i was seeing a 2 and 3 and 4% declines i would be more inclined to go with you and say boy the internals. everything looks bad. i think there's just certain sectors being hammered here. there are big sectors. to josh's point about the financials a lot of the levers they had to pull are gone. goldman and morgan have lost those almost forever and their ability to pull those levers in a bull market or bear market. >> and they're coming here domestically into the u.s. the market is trading incredibly well on a technical basis. think about the sell off last august. all technical. this morning obviously i was very concerned where we are when we were down 2030. 1870 to 1875.
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that's now support. that protects the 1810 lows. if you break 1870, you have to fear for going back to 1810. the market last week or in the last couple of days went to exactly where it was supposed to go. 1945 to 1950. it's trading well. the only question i have is what josh just said is we're in a bear market but yet the long-term investor should not be concerned. square that for me because i don't understand that. >> it's always a question of time frame. if you're a short-term trader then looking at things like 50 day moving average is very, very relevant for risk management. if you're a long-term investor then by definition as stocks decline you're adding to your portfolio. you're continuing to buy stocks and you're routing for them to come in so you can buy shares at a lower price. i'm trying to be very realistic here. if you're investing for an event 10 or 20 years off in the future like college or retirement.
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none of this is relevant. however if you're working in the industry or if you're very short-term performance oriented either because you have to be or you want to be, this stuff is in a down trend and undeniable. lower lows and higher highs on the recovery. it's not the environment you should expect the rising tide to lift off ships. >> how much more exposure they have from the oil and gas industry. concerns that only seem to grow with jp morgan revealing new numbers. is there trouble looming? chris is now at the crowle ratings agency. good to see you again. >> i'm still a bank analyst. >> you are but of a different kind. that's a fair point. how worried should we be? were you surprised what jp morgan had to say yesterday? >> i'm not. banks have been building provisions since last year. we had a 2-thirds cut in the value of oil.
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so obviously the collateral is not worth what it was and i think that we have to realize to josh brown's point that this whole mess in oil and commodities was caused by the fed and quantitative easing. they manipulated credit spreads and created a trade in oil and now that's unwinding so i think we're going to see an admission of reality from the big banks. however having said all of that, this is an equity earnings story. we don't think it's really a credit story. we don't believe any of the banks we cover now are going to see credit downgrades but we're going to have surprises throughout the year until oil bottoms. they're going to have to disclose more and more of their energy exposure which normally they don't do. banks don't break out industry specific exposures but in the first quarter it's going to be very interesting to see how these banks are enhancing their disclosure because i think investors are going to demand it. >> you can't tell me that you
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weren't a little surprise that not even a month since earnings or basically about that period of time that we're getting new numbers if you will from jp morgan. what does that tell you about the banks understanding about how fast their problems or the pace at which they are relative to the drop in crude. >> i wasn't that surprise because it implied a credit problem. the change in spreads in the high yield market. we had companies raising money at bbb spreads a year ago. they can't do that now. in fact, most of the companies, the smaller players in energy are entirely dependent on bank financing today. you also have a number of private equity players, other types of fund players that hold this exposure. all of them are shut out of the high yield market. they have to go to the banks. >> you're telling me to buy the banks. not to be worried? that this is an opportunity.
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>> if you're a medium to long-term investor whether you're looking at the equity or the debt, janet yellen handed you a gift. you just have to deal with the nausea that's going to come from making that buy decision but i think overall this is a central bank induced buying opportunity. i would say so. we don't see this as a credit event. this is an earnings event but there's going to be a lot of surprises as we go forward this year. >> what about the surprises for the following players? how surprised should we be about them? >> my banking team talks to all the names every month now and i have to say i think the smaller and medium sized players actually manage the credit better than the bigger players. the bigger players make bigger bets. the smaller players live with their clients. they also rated an awful lot of private players in the energy sector, service providers. that sort of thing. so we have a lot of visibility there and i think your smaller and regional banks do a far better job than credit. that's not the belief on wall
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street by i think overall whether you're talking about direct exposure or incorrect exposure in commercial real estate the smaller guys are going to do better. >> good to see you again. >> my pleasure. >> all right. worried about the banks? >> no, not in particular. and sold 3 million shares of jp morgan upside calls. i think you'll continue to see that, scott. i think you'll see dips and people will buy the dips in the financials. i'm not saying that they'll always be as sharp as last week but they certainly timed the bottom, the diamond bottom as well as that top on that particular trade and i think that you'll see more of that in the financials. >> regional bank etf is maybe the worst chart that i've seen so far this year. worse than any materials names. these stocks are now below the august lows. they have just shredded through
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the 200 day. they continue to get weaker. i'm not saying that the whole sector has oil problems. what i am say as good that no one is willing to step up and buy these stocks. i'm not sure why you would want to. >> we were wondering if jamie dimon marked the bottom with his buy of his own stock and whether he marked the top in this rally with the comments and the numbers yesterday. >> that wasn't the top though because again his stock traded up to 60 last week. from the 53.5 level where much of the accumulation. >> but you get my point. >> i do. but all he did was 500 million in exposure to energy there judge. so they have a total of 1.6 million that they set aside from their exposure to energy and related. i think that is not an extraordinary number on the jamie dimon balance sheet. >> we're in fact trading off of the things that jamie is doing. i like the buy backs. i'll two back again. i still think the political
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rhetoric is impacting the financial industry. we're talking about heavy regulation on the asset management and form of the mutual fund. something we haven't done in years. >> tomorrow on the half we'll continue this conversation with anton schutz. look forward to getting his point of view as well. coming up, i'm not saying he's a gold digger, but pete is making a mint in miners. is he sticking with them? plus investors have been slamming the breaks on gm and ford for the past year. now two analysts are throwing in the towel themselves. find out if anyone on this desk thinks that's the ultimate buy signal. josh weighing in on lows. you're watching cnbc. first in business worldwide.
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welcome back to the halftime report. if you're looking for a bright spot on this down day. check out the gold mining stock. shares all trading higher today. some of them hitting new 52 week highs. the gdx, this is the etf that tracks gold mining stocks is off of the hiefs the day but still outperforming overall. currently up by 3%. this is gold extends recent gains hitting a fresh two week high and also tracking for the best month since january of 2012 when gold gains about 11%. still, interesting trade here. so far year to date, gold, or future's prices up by 17% but
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the gold miners up by north of 40%. back to you guys. >> thanks. both pete and john don't think that you should be out of gold. >> no, but it's okay to trim some. when we first brought this up scott, the gdx in september when they first started buying the calls and that's six months out when you look at something like that and they went from $1.25. today they're over $5. discipline would dictate you have to take some off the table. doesn't mean it's over with. in the beginning of february somebody else came out and bought 40,000 of the june 22 calls. as a matter of fact, he didn't like goal but what he did say after that? i asked him that question. i said hey, jeff, does this mean you don't like the miners? he said no, i actually like the miners. look at the gdx. he thought the absolute names. those names would outtrade gold itself. so far he's right. >> gdxj this is one that i added to the portfolio 2.5 or 3 weeks
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ago. abx has been on there solidly. i took profits on the gld trade. i think about a month ago judge when that thing popped but now it's moving over and you're seeing those junior miners moving 6% in a day. upside plays at i think the march 27th strike today pete for unusual activity in the gdxj. so a lot of reason to still like them here and the institutions are adding two positions. >> real quick i'll tell you this, even more activity today. it's been very active. even more activity. 52 week highs today. >> let's do the trader blitz. four trades on four stocks making news. lowes reporting better than expected sells. you own the stock. >> great sales. up almost 6% in the fourth quarter. home depot is up almost 9% and yet the stock doesn't act well which is surprising. my line in the sand for the trade is 65. i'll know i'm wrong and i will be out. >> isn't that a statement in some respects.
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why own lowe's over home depot. >> i think you can own both of them. what happens is one of them has a couple of good quarters because something they're doing is work and the other one copies them and all of a sudden they blowout the numbers. >> chesapeake is forecasting lower capital spending for the year. joe, also i think saying that their asset sales are proceeding. the stock is ripping today. >> yeah some small asset sales but the impact here of falling oil prices at 39% of their reserves are now done. you're getting a rally today. this is a stock with a $1.8 billion market cap. it's a stock that trades below $3. it's a stock if you're going to play it you're only going to play it through the options mark. it's not a name that i want to own through equity right here. >> ugly avis. >> it is ugly. >> worst day since '09. >> when they miss on the numbers and they did miss significantly on the numbers, as a matter of fact when you look at the
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profits, they lost 5 million last year at this time. and then the guidance. it's a triple whammy. the stock is down and hitting 52 week lows today. after the next couple of days i take a look at it. they're investing strong and expect 17 and 18 to be very strong and see the margins come back. >> surprised at etsy. >> had no position in here but boy what a performance. the stock opened however judge at the high of the day around $8.50. just two cents higher after that and then it's back down still holding on to gains but not nearly as much as before. active sellers on their website up 15%. active buyers up 25%. the fact that they're attracting even more buyers than sellers on there, that's good news for etsy. >> auto stocks have not been working. why two different analysts are throwing sell ratings on the car companies. plus more bad news for twitter as instagram unveils the latest
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ad numbers. they're big too. the details are just ahead.
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welcome back to the halftime report. instarting rotati instagram announcing 200,000 monthly active advertisers up from june. facebook shares now trading down about 1% but this is ahead of twitters 130,000 advertisers and twitter opened it's self-serve ad platform nearly four years ago. twitter shares trading off today. book makes it easy for its 2.5 million advertisers to tack on the purchase of adds on instagram. over to you. >> the other advantage they have is they're owned by facebook. >> right. >> as if twitter needed any more news for investors to chew on that would have you potentially hitting the sell button now you get the big instagramers. >> and those numbers are impressive. we were talking about that on facebook earnings. a lot of the different numbers coming out of there and you have to give zuckerberg all the
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credit in the world. they bought they conquered there and they continue to work forward. it's an incredible company what they're building right now. valuation is extremely high so no room stumble. >> stock is down overall but as the market tracked toward positive territory. that lifted as well. other points. >> i mean, the momentum continues to build if you're going to advertise you're going to go where the eye balls are and the eye balls are going to be with facebook. it's going to be not with twitter and twitter remains challenges. you'll gret notes every so ofte. you'll get those notes but the reality of the overall structure of the company is not a fundamentally good one. >> i mean, twitter shares are moving lower as julia finished her report there. now they're down 4% on an intraday basis. do you find anything worthy here? >> i'm not sure i follow the logic that what's good for instagram is bad for any other social media company.
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if anything it's a validation that large advertising budgets are headed to social media. of course baseball and instagram are getting the bulk of it. they're the best operators and have been able to do the best job. >> but why is it at the expense? we're talking about a trillion dollars in global advertising. it's not at the expense. facebook has proven efficacy and they have gotten every big name advertiser on board. they have been incredible at it. >> it's the pace. >> linkedin and twitter are not quite there but i think it's validation that big budges continue. >> it's at the expense of twitter. >> i disagree. twitter's revenues are up 50% and it sells at a lower price to sales. i completely disagree. >> the problem is the focus is on the monthly active users which has been flat but also they have gone to great measures now to try to reach out and grab those logged off users. if they have any success with that at all, scott, when you're talking about 500 million or 700 million that have logged out if
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they have any success reaching out to those folks and bringing them back we start to see them move to the upside off the 300 million number. >> i'm not talking about user growth. i'm talking about advertiser growth. >> let's talk dollars. >> let's talk dollars. outside of a few select bio tech companies how many s&p 500 companies do you think there are with a revenue growth rate in excess of 50%? three, four? twitter is one of them. but we just said let's talk about revenue and not users. >> that's what has to resurrect themselves. >> they're doing the right thing. >> making money with what they have. of course they'd like to have a billion users but quite frankly they'll probably never get there because it's much more of a niche situation on facebook.
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the comparison is ludicrous. they are both abbased things that started around the same time. they don't do the same thing. one will never be as good as the other. if we can get passed that here's a company that for whatever reason it has a stunted growth rate in users but they're making more money every quarter. fact. >> and you own the stock? >> fact. >> coming up stocks may be back in correction territory. one strategist says don't worry. plenty of upside ahead. plus john takes the lead in our portfolio challenge and moves he's making that got them back on top. just ahead. we're the hottest young company around but if we want to keep the soda pop flowing we need fresh ideas! >>got it. we slow, we die. >>what about cashing out? no! i'm trying to build something here. >>how about using fedex ground for shipping? >>i don't need some kid telling me how to run a business! i've been doing this for 4 long months. >>fedex ground can help us save money and deliver fast to our customers. not bad, kid. you remind me of a younger me.
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>>aiden! the dog is eating your retainer again. let's take a short 5-minute recess. fedex ground is faster to more locations than ups ground. advisor and team who understand where you come from. 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. steve, other than making i'm here atme move stuff,rade trader offices. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings.
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impressive... what's up, tim. td ameritrade. man 1: i came as fast as i man 2: this isn't public yet. man 1: what isn't? man 2: we've been attacked. man 1: the network? man 2: shhhh.
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man 1: when did this happen? man 2: over the last six months. man 1: how did we miss it? man 2: we caught it, just not in time. man 1: who? how? man 2: not sure, probably off-shore, foreign, pros. man 1: what did they get? man 2: what didn't they get. man 1: i need to call mike... man 2: don't use your phone. it's not just security, it's defense. bae systems. hello everyone. here's your cnbc news update for this hour. secretary of state john kerry saying he spoke with the russian foreign minister to discuss plans for a ceasefire in syria. that ceasefire is due to go into effect on saturday. facebook's like button has just gotten a lot more expressive. the social media sight releasing reactions to all 1.6 billion worldwide users and by holding
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down the like button users can now access five additional emojis to express themselves. >> starbucks has been granted a rare utah liquor license in five locations. utah is a notoriously difficult state to obtain a liquor license. >> and check this out. it's unfortunate for this poor guy. an e-cigarette battery blowing up inside a man's pocket. it blew up while he was at a register inside aiken ken convenience store over the weekend. the man had second degree burns on his leg and was hospitalized as a result. dangerous stuff. that's the news update this hour. scott back to you. >> that's crazy. thank you. >> meantime president obama speak moments ago on the supreme court nomination process. john harang gewood has more. >> president obama just used a photo op in the oval office to
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increase pressure on senate republicans that have flatly refused to consider a replacement to scalia. president obama said his constitutional responsibility is to appoint a replacement and there's no reason for republicans in the senate not to do theirs. >> we'll see what happens. and i think the situation may evolve over time. i don't expect mitch mcconnell to say that is the case today. i don't expect any member of the republican caucus to stick their head out at the moment. and say that. but let's see how the public responds to the nominee that we put forward. >> so that's an indication that the president believes once this is not just an idea there's an actual person that has mainstream appeal. he can with help from the public put pressure on republicans to back off of their assistance on no hearings or no votes for the
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nominee. we'll watch that play out over the next weeks. >> indeed we will. john with those details from d.c. the british pound falling to 7 year lows against the dollar over these fears of a possible brexit. bertha. >> that's right, scott, the sterling taking a pounding today. the lowest level since the financial crisis. what once seemed kind of unthinkable, now something that the market is taking into account. the possibility that the u.k. could leave the european union. how big could this brexit be. do you think this could happen? >> the market obviously thinks it's going to happen. this last leg down from the rally the pound tried to make in january is an indication of that. remember the market hates uncertainty and even if the chances of them leaving went from 20% to 30% that's a lot
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more uncertainty. remember also too that rates don't go up. nobody raises rates in a situation where what's going on is unclear. so to me this is pretty negative. i don't see any reason to buy the pound yet. >> do you think there's more pain ahead here? how low could we go on the pound versus the dollar? should we start maybe booking trips to london. >> oh, yeah. no problem at all. it will be a lot cheaper to get there but i do think it's going to go lower. there's a lot of rhetoric out there. less opportunities for british firm ifs this goes through. less investment in britain. i don't think it's a good thing but there's a strong possibility of it happens right now but i think the eu is a lot stronger together rather than divided. >> we'll leave it at that and of course you can always get more at futures now.cnbc.com. we'll be back with a live show tomorrow 1:00 eastern. back to you scott. >> thank you so much. stocks may be under more
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pressure today but our next guest thinks they're going to still go much higher by years end. jonathan is the chief u.s. market strategist. rbc capital markets. he's with us on set. it's good to see you. you say all of these worries are going to be gone in a short period of time and everything is going to be okay. why? >> you look at the way stock markets behave. unless you're going into recession we're talking about a moment ago you don't get corrections of 20% or more. the only time we have seen that was during the 87 crash. it was a really sharp dip and it was back afterwards. so history tells you that unless something goes really bad for the economy that buying when volatile city really high like it is now is the best put. >> we hear it over and over again. buy when there's blood in the street. brexit possibility? low oil. banks can't go anywhere. political uncertainty here in
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the u.s. kanye west. there's a lot going on. >> i have more on my list but i wrote it so fast i can't read my own handwriting. >> but let's take a look during history, did you want to not invest during the cold war? did you not want to invest during the korean war? there's been lots of bad things that have happened overtime and we've had epidemics and plagues and out bursts and all kinds of things. >> those are a lot of things. that was the one i couldn't read. >> i'm not sure that central banks are the solution to this anyway. but if you look at corporate profits they grew last year at 7%. that's not saying they're going to buy. isn't there going to be a better opportunity as some of these fears fully manifest themselves. so 2011 you had a 20% pull back from the high. no recession as another example. so the point is we're now off
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what like 5% on the year? maybe 8% from the high. so the question i'm thinking scott is getting to is let's say brexit is not the end of the world but this other thing is really bad. >> i'm not sure that i can tell you where we're going to place the low. we probably did 7 or 8 days ago but the real question is if you had a three month window so look now and now we're in may, is it below 20? i'm betting yes. is oil closer to 35? i'm betting yes. is the ten year bond yield closer to 2%? yes. which means that it isn't in growth stocks. it's actually in industry and energy materials and banks because those are the beneficiaries of that stuff normalizing. >> you were uber bullish. now you cut it last year to 22-25 and you're sticking with that. >> yeah. you know, i mean, we saw we put this on it was a 9% upside on the call.
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>> that didn't sound that convincing. >> no, no. listen, in order for this -- in order for the market to progress forward we need to see a couple of things. you need oil to be higher and i think that, you know, with the consensus among people i'm talking to is its likely that oil is close tore 25 versus 35 six months out most people would take the upside on that. the same thing on the ten year. there's a lot more people that say the ten year is going to breech to on the upside not go further south. >> you do have scott mier in a couple of days ago saying others are going to come out and have a similar point of view. you need people on both sides of the aisle to make a market but the possibility of those things happening isn't all that farfetched given the list of things. >> but something has to go meaningfully wrong. job market is expanding. there's 200,000 more open jobs
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in the united states and we're basically at record levels of job openings. bank credit is expanding, especially to individuals. losses outside of the energy sector on loans and the like are really, really at low levels so you would have to see some actual deterioration and right now the market is clearly, i think they have already received your list of things to be concerned about. but we have to see them go bad and not threaten to go bad in order for this thing to trade lower. >> thanks for coming by. >> all right. >> coming up everyone wants to be a millionaire but if you already are it could cost you this tax season. our wealth editor joins us with a story you might not want to hear, next. plus the two retail stock bets that are paying off for joe. trade update is just ahead. you're watching cnbc first in business worldwide.
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power lunch starts in 16 minutes. we're going to have a big spotlight on energy. a slew of exclusives ahead. the ceo and a historic day for his company plus spectra energy and pioneer natural resources. shares of the european banks getting battered. is europe in a banking crisis and are they going to need a bailout? we have a guest that says yes and a lot of retail earnings are out and nails that should be on your shopping list. on these beaten down levels. now a news alert. >> shares of honey well right now according to dow jones citing sources honey well is looking for a buyer for its building solutions unit. it's been working to possibly find a buyer for the unit that could fetch between 3 or $4 billion. all of this coming amid honeywell looking to bayou nighted technologies as first reported. so scott keeping it on honey well. the building solution is the unit that handles heating, air
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conditioning, security solutions. that sort of thing it could come with a cost. an irs audit. wealth correspondent robert frank. here with that story. >> they pay the most taxes but they also get the most audits. a new report from the irs found that tax filers had a 1 in 10 chance of getting audited last year up from 7.5% in 2014 and almost double the rate as 2008. you are now 12 times more likely to be audited if you're a millionaire earner than if you earn less than $200,000 a year. now the irs created the global high wealth industry group to better target the rich and generate more money from audits. a total of 35 billion from enforcement actions last year. much of that probably from the wealthy. so how do you avoid an audit. big swings in incomes so try to
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smooth the income strings with asset sales and investments. try to reduce numbers outside the norm and try not to use giant round numbers. they can seem fabricated. this is the most important. don't use the word yacht in your tax return when talking about your business expenses. people do it. >> they don't. >> they do. >> accountants told me that's one of the number one flags that people do that causes the irs. they use the word yacht. come up with another term rather than yacht. >> the battle for top trader. john moves in positive territory in the challenge. so with the option monster is doing today as he tries to keep his lead. a rough start to the year for sales force. will the tech head winds continue or is now the time to jump in? we're going to trade that stock ahead of its earnings tonight. and i'd like to... cut. so i'm gonna take this opportunitto direct.
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thank you, we'll call you. evening, film noir, smoke, atmosphere... bob... you're a young farmhand and e*trade is your cow. milk it. e*trade is all about seizing opportunity.
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. we back. a look at the leader board and the halftime portfolio challenge. john is now the sole person in positive territory. his portfolio is up three quarters of a percent. joe falling back into 2nd but the rest of the leader board is trying to make up ground and doc you're making some trades. >> i got out of american because of an inquiry from justice department. it's legal inquiry about whether
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or not there may have been some conspiracy among the airlines to reduce the number of seats out there. so i got out of american. i was in red hat and cash but now i'm making a trade right now. mchp. i own it. and i'm adding it to the portfolio now because it just hit with unusual call activity. so i'm adding that one on the fly. mchp, 20,000 bucks worth of that i'm buying for the portfolio. >> the stock up nearly 1.5%. follow all of the action, all of the moves, on cnbc.com/pro. well, we do have a special treat now for our very own josh brown. he's our international sandwich correspondent, of course. and a shake shack aficionado. we have burgers. we are other items as well from shake shack. >> you can have the chicken sandwich. >> that's for you, joe. >> the best -- >> save one for you, joe. >> the best surprise of all, are
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you ready? >> i'm posing on tv. >> the best surprise of all, of course, danny, are you there? >> i am here. i wanted to wish josh a very happy birthday and thank you for being such an amazing shack fan. >> danny mai eyemyer, chairman founder of shake shack. >> i have a tear in the corner of my eye. you're the best. i was at the original in madison square park the other day, still a line out the door. you're still killing it. congratulations on everything. >> we're having a great time. it is a real, real honor to know your birthday lunch comes from shake shack. i hope you're having one -- have you tried the chicken shack yet? >> i did. more times than i'm willing to admit on the air. can i tell you something? it is flawless. >> nice. >> listen, here's to many, many more happy birthdays and thank you for all you do for so many of us who are investors in the stock market at large, well beyond shake shack. you're amazing.
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>> thank you so much, danny. really appreciate it. >> i know you guys are in a quiet period ahead of your numbers, so you're severely limited in what you can say, but if you would oblige me one question, as we're sitting here watching the stock market daily, we're looking at economic data, trying to figure out what the consumer is doing as oil prices continue to go down, can you give us any insight on how you feel about what you see about what the consumer is doing? >> well, i'm going to try to answer your question not really from the shake shack perspective, but from all of our restaurants, because as you know, we have got lots of fine dining restaurants like gramercy tavern, barbecue place, blue smoke, we have catering, we have, you know, mialino, the italian place. i would say across every single sector now, the consumer is actually -- as upbeat as i think i've seen him for a long time. i think everybody i speak to says, i don't get -- i don't
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really understand why i should be so upset that my gasoline costs less at the pump and i'm out there spending money now. and yet the stock market seems to get upset whenever oil goes down, it gets happy when oil goes up. but the consumer, which is the people i see, day to day, in all sectors, luxury, fine dining, fast casual, barbecue, they seem to be really happy. >> interesting too. we're talking tabs, you know, the various restaurants you mentioned, goes from six bucks to many, many hundreds. if you want them to. so you do have a pretty wide swath of places to get a good idea of what's going on out there. we're trying to make sense of it all as well. >> anyway, listen, let's get back to the reason for this call. happy birthday and here's to many, many more. i hope you're enjoying your lunch. i can't see you now, but i hope you're enjoying it. >> trust me, he is. i appreciate you calling in. i know josh does as well.
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we hope to see you back on the network after your earnings are released. >> look forward to that. take care, everybody. >> thank you, danny. >> look at the markets as well. want to give you a look at -- >> i'm a little distracted now. >> you should be. >> you take this segment. >> we're going to take a quick break. we'll give outfinal trayou the . crude tried to go into positive territory. dow is down by 117 points. s&p down by 13. both now losses of less than 1%. we're back after this.
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"you don't want to live with mom and dad forever, do you?" "boo!" (laughs) "how do i check my credit score?" "credit karma. don't worry, it's free." "credit karma. give yourself some credit." you know how it goes, you win so, you lose some. joe, you were seeing a buying opportunity with a couple of retail names. let's listen. >> retail is about momentum. once momentum is lost in a particular stock, and it finally comes back again, it is sustainable, it is long lasting. so you look at lululemon, coach, these are two names that two years ago none of us include ing myself would have suggested to
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buy. now the opportunity presents itself. >> same outfit. >> nice tie. >> lulu up 4% since then. coach is up 20%. >> dillard's, it is momentum, retail. and a lot of the names that 2015 were laggards are coming back again. sporting good names, corpses, coach, lululemon, they have the momentum, i think it will stay with them. they're trades you want to work with tactically this year. >> a bullish stance as well on another stock or a number of them. >> energy stocks. >> the natural gas names, yes, for sure. >> and i really didn't do a good job on that one, southwestern energy, rrc, range resources, matter of fact, portfolio yesterday, i got stopped out of rrc, down 10%. those names were doing very well the first five or six weeks of the year. they pulled back double digits, very significantly, time to take a -- >> the move in the market we're
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seeing right now, about to come on the air, the stock market is getting hammered, cut the losses in half as oil moves higher. what do you make of today's trade and the bigger picture of whether you think that rally that may have started on the day that jamie dimon bought his own stock can continue or not. >> i would just say that i'm looking at the price of oil each and every day and that tells us the direction we're going. i think you got to watch out in terms of the downside and financials. but financials have not been able to react well in good or bad tapes. that's been a problem. >> we test the low or no? >> i think we could, sure. >> we test the low or no. >> we could, but -- >> i know we could. but -- >> 20% chance. >> i could get hit by a bus on the way home today. >> you got one strong support level at 1870 left. break that, yes, i think you do break below it and there is no clarity on the fundamentals. none whatsoever. >> yeah, i think the big picture to keep in mind is that doesn't matter whether you deserve to get to a certain level or not, people tend to overreact. so as you approach those levels,
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it becomes a fait accompli and people put on trades or take off trades they otherwise wouldn't because they think they're beating someone else to the punch. >> crude is positive. north of 32. >> give it 30 minutes. >> "power lunch" starts right now. josh brown speaks french. who knew. welcome to "power lunch." i'm michelle caruso-cabrera. >> french words. >> welcome to "power lunch." i'm michelle caruso-cabrera, tyler mathisen, melissa lee here. we have ceo exclusives ahead in the next two hours. first stocks under pressure, recovering much of the earlier losses, however. the dow, the s&p and the nasdaq all in negative territory. the dow is down 118 points, 16,313. but it was at 16,165. e

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