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tv   Fast Money Halftime Report  CNBC  July 8, 2021 12:00pm-1:00pm EDT

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sometimes display on the show. one of ours producers got clever and hughes add hockey meme he is not using the right teams. i'm not saying, kristina he should have used because it's painful -- so painful for us >> that's a meme in itself, the failure right there. >> let's get to "the half. all right guys thanks much welcome to the "halftime report." i'm scott wapner front and center be how to play the drop in rates, whether it means stocks are in trouble or setting up for the midsummer rally. we debate that blackrock rid reader excited to have him on. liz young, steve weiss, josh brown, let's check stocks first and foremost down sharply, cutting losses the 10-year touching a new near-term low. the 19.29. dow down about 250 right now liz young, the question is what's requesting on with rates?
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is it about positioning? does the bond market know something the stock market doesn't? what are you telling our viewers to that question today. >> this is a question i think we all woke up wondering. i don't have a better explanation than most other people on exactly what's happening with the 10-year but what i can tell you is this, i think we're going through three big transitions in the market and as investors the first of which is that we are moving from the first half of the year to the second half of the year. and i think there is going to be a clear division in the two and that's going to be characterized in the second half by a search for catalysts. that's what we're looking for right now, what's the next catalyst the second big transition is that we are moving from rebound to recovery. we have now rebounded to prior levels of gdp, prior levels of earnings now we are searching for where does the new growth come from? we don't have that answer yet. the last is that we are moving from momentum to fundamentals and investors need to search for durability this is a transition, transitions are never smooth, never easy and we're probably going to continue to chop around here
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until we figure out what that next tailwind is. >> okay, so josh brown, let's cut through the noise, right let's move beyond the one-day move, cut through the noise which you're so good at doing. i brup the conversation i had yesterday again with the large money manager, saying don't take any of this in the market as a signal that growth is peaking be the move is long stocks, yields are low because of where all the liquidity is the liquidity is fallout going away any time soon get the noise out of the way techs going high err stocks going higher it's for a specific reason move on. thank you very much. what do you think? >> i guess a couple things is raise your hand if you've been a successful investor by making inflation predictions short-term over the last ten years. i see no one's hands raised. there is not how to allocate a portfolio. one. two, the treasury market does not do a good job predicting
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inflation. bond traders are flo better than anyone else. the fed is not good at it. the idea the 10-year is a clairen call for where inflation is going is foolish. what we know looking back at long-term history is that the bond market systemically overpriced the rate of inflation for very long periods of time. and it's also underpriced it a great example, from 1981 to 2007, systemically, the bond market thought inflation was high are than it actually was. it wasn't until 2007 that reality set in so people expecting the '70s went from 1981 for another 26 years overpricing inflation. and all you have to do is plat cpi versus 10-year yield we should stop the game immediately. what the treasury market does well is price in longer term inflation, not yesterday's cpi report
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okay so the that's not a winning game for investors. i think big picture, the nasdaq went up six straight weeks that's a lot it's up 14% year to date so seeing the tech stocks pull back basically from all-time highs, seeing the semis take a breather, the fangs take a breather, there is nothing wrong with that. that should happen the qs down 19.8%, the lows, now down only about 1% not a lot of damage. last thing, reits, unbelievably strong that shouldn't happen if we think 10-year rates are about to crash to the floor reits are green today, almost all of them. staples are barely down. so i think we have to divorce in idea that the bond market is, quote, unquote, telling us something. >> right. >> about economic growth it's never done a good job at that in the very short term. >> that's why i say let's cut through some of the noise and stop trying to read into every single move in the market.
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and just bottom line it, weiss. >> thank you. >> you know what low rates are good for you know what they're good for, weiss. >> stocks. >> good for stocks, right. >> especially in an environment where you have growth continue to pick up, right? that's the view i hear because you're going to have a boom in the fourth quarter because vrns are at five-year lows. we're not close to done with the recovery we're getting started. do you want to counter that or agree with it. >> i'm going to agree. also agree with josh i grew up in two bond houses on the street, solomon brothers and lemmon brothers with rick. there was all the perception that bond investors were smarter, the bond guys were smarter and women. pap and as it turns out it's not because they pick the markets better it's because they were able to figure out a way to get paid more than the equity guys here is what i would say i'd say there is nothing there there. we have yields coming down because you've had high short interest, like i was shorted
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you've seen some covering. the facts are that you have massive liquidity. and it was a phone line weeks ago we were craving these low rates, that they were phenomenal for the market, particularly for technology so today to me was just a misplacement, mischaracterization of what low rates mean they're not low rates. it's low yield. >> right. >> these are opportunities look at what traded down immediately. xpo, fedex, a lot of fear. i'm more concerned about the administration going further and further left we get more of that every single day. the good news is i don't think they get anything done so to me it's -- i wouldn't say party on i'm a little cautious. i'm looking for a a little bit of a correction and raised some cash and getting ready to deploy but i would just say you deploy into quality the days of trying to buy everything and watch it go up, those are over because you're at
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the end of the rate cycle. >> surat, every core says from a technical perspective bond yields could move to 1.25 or lower. we're basically around that area if they do that would provide significant stimulus for housing and stock prices and which stock prices i don't know maybe the arc stocks, maybe the growth stocks, fang stocks, maybe the tech stocks, the ones going up as rates come down take today out of the equation. >> i agree i mean, i think you've got a story there that rates go down even more. you'll get more capital in the equity markets no other place to be unless you're a pension fund and put money in there as everybody mentioned we have great growth in the next couple quarters the gdp is strong. savings rate high. and people coming back to work i think stocks are the place to be and if we pull back a little
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bit. earnings coming next week. you you have people getting nervous taking money off the table. but i agree with steve, high quality companies, companies that have sold off, put capital to work in there especially for the next few quarters. >> i'm putting you on the the spot forgive me but i'm doing it anyway stocks are the place to be put money in stocks that pulled back all right. which one. which ones which ones fit that into that category right now, sarat. >> for me it would be the semis. i like qualcomm in there i like the general motors in there as well. amazon has come back but still not where it should be high quality companies xpo a big holding. steve knows that we've been that that together. knows are quality companies there i like i would add to. >> you managed that well i knew you'd have names. i appreciate that. let's bring in the headliner to join the conversation. rick redder manage attention $2.6 billion head of the global allocation team.
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mr. reader. >> can i defend all the swipes at the bond people too that was aggressive. >> our gang is a little aggressive you know how we roll. >> i don't know, that was tough. >> well now you're sort an everything guy you control. >> yes. >> you control $2.6 trillion across the prum. what are we supposed to think of the move in rates? >> so the -- one thing maybe to respond to a bit to the commentary i think rates do one thing very well they liquidate supply and dman we are going through extraordinary liquidity. everybody talks about the fed taper and how much the fed is doing in the form of q.e but the treasuredy's general county keeps paying down and paying down a significant amount this money the system is bursting with liquidity. and quite frankly everybody knows that rates should be higher than where they are
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the real rates given the economy and how it's doing -- by the way, we should talk about evolution of the economy but the economy how well it's doing the real rates are priced wrong. too much liquidity in the system and then you get a catalyst where positioning is short and you move there i agree with the commentary around inflation and -- but i think there is liquidity dynamic when you get into the second half of the year i know we talked about it on the show when you get in the second half of the year or more so in the fall you get a dynamic where the amount of issuance that treasury is doing what you don't have that much liquidity coming in it's a different paradigm but definitely our ourselves included, we think real rates are ridiculous. it's taking a bit of time and you have to be patient. >> regardless where you should be let's play the game where they are low rates system in your words bursting with liquidity,
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sounds positive for stocks to me. >> let's see i think equities are going high are. josh's points are well taken we rallied a lot we did pull back a bit but i was watching the headline about new record here. new record here. we have rallied a lot. i think stocks are going higher. when you go true the companies as we talked about some of the quality companies are throwing off 20% r.o.e. and positive momentum around growth injury they go higher. you think about where we're going to be. sometimes you invest on where are we going to be two to three years hence. and if you think of that, the returns you get for the companies throwing off this sort of r.o.e., earnings growth, is -- by the way, not just growth but free cash flow yields or earnings yields pretty attractive including software people think of software too much of a growth there are a lot of companies in software throwing off tremendous revenue and multiples are not unreasonable given that level of cash flow.
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>> all right, now i'm confused one minute ago you defend the bond guys. right? and now i feel like you're dissing the bond market. what if i come back and say isn't the bond market usually right, rick? maybe the bond market is telling us something the stock market doesn't know or doesn't want to hear. >> by the way, i don't think -- given the amount of liquidity in the system i don't think one is necessarily right versus the other. why can the equity be as buoyant as trs whi while the bond market is supported fooch in the system. people, the amount of yield for the and a demand for the returns if you're an pension fund, endowment, if an you're an insurance company pb the demand for yield is extraordinary i don't think one is right and one wrong. i think bonds are aggressivity priced my sentiment is about three, six months hence they are higher in yield you have to be patient particularly this month with this amount of liquidity
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coursing true the system some of the data -- i don't know if i talked about it on this show but shows earlier, the growth in china is slowing a bit. one of the things really interesting in the economy -- i've been bullish on your show about growth i think growth is going to be good but what's happening, the supply you're not able to fulfill some of that growth you see that in-houses, cars by the way you see that in people there is actually -- we're going to operate through with what will be great growth, tremendous demand it's actually a bit trickier today to actually supply that demand. >> when you're the king you get everybody cueing up to ask you questions, rick that's what we've got to do. liz young, you're first. >> hi, rick, thanks for being on with us. i am a firm believer of never let a good correction go to waste. and it sounds like you woulden on that side in the equity market but you warned about the liquidity dynamic happening in fall and economic evolution if we have a bond correction in fall and see a correction that we
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lean into? bonds or is that a correction we wait out >> yeah, liz, great question i think there is a couple of things one i don't think rates are going that high. i think a you have a fed that's going to be unbelievably deliberate you got the ecb told us they are more deliberate. i don't think rates are going that high. the demand for income, demand for yield and the fact that pension funds are now fully funded they're having a bid for fixed income i don't think rates go that high should the 10-year be at 1.75 versus today absolutely you'll have dislocating moments, but i don't think it's -- at the end of the day it's terribly disruptive for equities. one of the a amazing things, you go back a week ago, the volatility markets were unbelievably cheap and building extraordinary complacency. i think that was mispriced having a bit more volatility, anticipating more volume ilt is right thing. >> let me ask you though before i bring in josh brown. what's the chance of 1% on the 10-year or close >> one thing i learned even
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in -- despite being in the no so smart bond guy category. one thing i've learned is you have to follow the technicals. i don't think we're hitting that i think the odds are very remote we hit that. but i also think you've got to be respectful -- listen, when things start to move and you've got a huge amount of people off sides against that then you have to be respectful of it we did some things this morning around the portfolio to be respectful of the move in rates. gosh wsh i think the odds of that are pretty darn low the base case is you don't assume. >> what do you mean you did things in the portfolio? can you share with the viewers. >> yeah. >> you can't make a hit like that and not go into details. >> we do a lot in the options market and you hold convexity to the upside in -- meaning rates move you have optionality get longer the interest rate exposure we were able to keep that none while we're reducing some of the other side of it so having some real upside
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convexity to what i would call tail risk, that rates rally. we were doing a bit of that this morning. >> i've had people on the program in recent past and say, you know, you want to be in financials, great place to be. go through all the reasons why, everybody wants to buy the banks. i don't see how financials do much in this kind of environment. but i guess it's not for me to say. what do you think? >> so we have -- i mean that's the one area we trimmed a lot of financials, not necessarily because -- well a couple of things one, the they are functionally become an interest rate proxy. we have reduced some of that secondly when you get banks trading at two times book or at multiples that are hard to justify without significant earnings growth, we think it's working taking chips off the table and plus we think a lot of people have got long financials as either an interest rate call or a beta call or what have you. we paired some of that back. the only place in europe -- we also paired back european financial exposure but today some the the european
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stocks got hit hard and we added a bit this morning when you have banks trading in europe at fracture hundred of book versus two times book in the u.s., some of these wsh while or.oe are a lower. we added a bit today. >> good to know. josh brown, you're up. then steve weiss >> so i just -- i wanted to just add a little bit of nuance to the conversation about the bond market not being good predictor. >> he feels bad now. >> rick this is josh brown's apology. >> no, i understand. >> a little bit of contrition. >> smart guy. >> the reason i'm saying that, the reason i'm saying that is not to say that like, oh bond traders are dumb bond traders aren't in control of the price that bonds sell at. rick, you made the point. >> that's true, yeah. >> you think about the ocean of bonds issued in 2020, just trillions of dollars who bought the bonds it's not prop shops.
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it's not goldman sachs asset management 64% of the debt went to government, insurance companies and banks. then you have the pension funds in there what are they doing? why are they -- they have to they're offsetting liabilities they're buying no matter what the inflation prediction is. they're buying treasurys it's part of their mandate in how they manage money. now i throw in sovereign wealth. we know foreign governments own -- foreigners in general own 25% of the existing treasury market so this idea that we're actually setting inflation expectations via trades is just a false construct. so it's not impugning the intelligence of people participating in the bond market it's just being realistic. it's a liquidity story it's not an economic call. rick, i'll let you react and accept my apology. >> no eyeball, i'm a little bit offended but i totally appreciate that.
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but your points are incredibly well taken the buyers today of interest rates are not -- generally not economic buyers. nobody is saying wsh, gosh get me real rates at negative 1% when you have an economy booming that's growing. >> why would you. >> nobody is and nobody will what's happened is you've created -- there are some shorts created. b, like you say the pension funds much more fully funded can diffuse liabilities they're buying like you say you've the fed in buying and the banking system system today flooded with liquidity a lot through the tga drawdown. >> that's an expression you're right. not valuation. quite frankly it's not interpretation of where inflation is it's just literally an economic buy taking place don't disagree withfully of that. >> steve weiss, you're up. and let me know as you get set to ask your question i notice the dow down about 230 to make note of the fact it was down 500 at some point earlier today. a little bit more than that.
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there you go 236, cutting losses somewhat invitely as the dow jones industrial average at about 20 after noon in the east. steve weiss, you're up. >> yeah, for the record, i think bond guys are smarter because they know how to get paid as i said. >> yeah. >> let's go to china a second. you mentioned china appears to be slowing and talk of another major stimulus by the chinese government how much of that is directed at the economy versus going to the stock market and propping that up, which has had an horrendous run? and that will -- by instructing the banks to lend more possibly, feeding the system, we have seen that before do positive things for their market so that's really more my question they can't do much to loosen up the supply chain that dye has been cast. >> yeah, so i think there is some truth to that listen, i think the bigger picture at play in china is you are seeing significant slowdown. you see it through credit extension or slowdown of credit.
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you see in the dynamics around domestic growth. and so i think -- i think generally that policy evolution is because, we think in the third and 40 fourth quarter you're going to see what could be one and the three and change% handle slow in growth on china that's a significant slowdown from where we've been. to loosen policy -- you have to think about where they're coming from china has been critical of u.s. fed -- u.s. policy monetary policy, unbelieve rebel i easy, pumped in immense amounts of liquidity. the chinese are at a place today where they can be easier because they haven't really heretofore and i think the growth, slowdown they're seeing across -- the property space in china, i mean it's slowing down. and so i think -- by the way, i think china keeping one eye on china the rest of the year is hugely important the demand for commodities, the influence they have on growth in europe and the emerging markets, i think china is a big deal. but the point is well taken. when they are -- they are
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clearly shifting policy or at least talking about shifting policy, and i think that's pretty significant for -- by the way, it does tend to buoy the markets. but i know i think it's important to watch the growth over there. >> given where we are right now and what rates are doing, and where they seem to be anchored for a little while at least, would you up and are you upping exposure to technology because of where we are? >> so -- so i think if you have me on the next five years. i still love and i think josh's guy as well. i love -- when i look at semis and i look at software, and i look at the evolution of where the world is going -- by the way there are some things in article filber intelligence. things in space there are some unbelievably interesting things developing when you look at -- i'm a hound -- maybe from the bond side -- i die to look at-free cash flow yield. the companies are throwing off
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incredible amounts of free cash flow yield with not a lot of debt and for a bond guy or former bond guy, that is a -- that is a really powerful thing. and these companies will continue to do that. i like tech. question of where you're coming from, do you increase exposure or not. >> yes. >> but having a healthy exposure to tech, i think is going to be the case for a long while. >> but i want to know if you're increasing are your exposure to tech because there was a time not that long ago when you were on where you know rates were in a different place. and you were adjusting your allocations to things like tech maybe the fangs or otherwise and now given the dynamic in rates, i literally want to know, like now, are you -- are you adding to tech >> not really. we've added -- i mean we've in a healthy exposure through thick and thin we've had a healthy exposes yur to tech. are we adding a lot? not really we've added a little bit in the certainly last few weeks on software and i actually added a bit in semis today but small. not really but we're running --
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definitely running -- where we've turned around we reduced the bit recently is some of the big tech that has -- including last couple days that's a really good run and so we have reduced a little bit of that. but we have -- we have kept the core technology position and we're going to leave it where we are. >> no, i appreciate you going into a little more detail for me rick, sarat has a question too go ahead. >> rick, question on spreads one of the things we look on the fixed income side is when spreads widen, gives you an indication of equities we haven't seen that do you see that coming because that sometimes is a better harbinger than the long-term bond market. >> by the way it is better the point is dead right. when i follow equity valuations, i leak at -- literally look at where earnings and cash flow is relative to where companies finance. that's the ultimate outcome. if you borrow added cheap levels you did do capex, men r, r&d p
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part of the reason equities are reasonable is because credit yields are unbelievably attractive to companies and will buoy growth. i don't think they widen a lot because a maevt demand for yield. and b, the default pair in this growth dynamic, unless there is some exogenous shock to a company or sector it's hard to see where a lot of defaults come from i find the levels in high yield today to be unaappealing so we paired back the high-yield i think that's -- i'd rather on the beta and things like equities but in terms of investment krad grade credit, the dman for yield from pensions, international investors and to get incremental yield particularly the long end of the curve if you match long-dated liability, i think the spreads, you're not getting hurt because of defaults my sense is they could widen a bit. but i don't think they're going very far. >> you made us. >> i think you're dead right on using that as a metric
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i don't think most people use that i think that's a better metric than the 10-year note. companies don't borrow offer the 10-year note. >> you made us smarter today you can feel better. >> i don't know. >> about where the conversation. rick reider i appreciate it. >> thanks for your time talk to you soon blackrock's rick rec reider coming up. >> jon and pete, not on the show but making interesting moves in the mechanic which is why they join us with a special unusual activity that's coming up in just two minutes. with a hybrid, you don't have to choose. that's why insurers are going hybrid with ibm. with watson on a hybrid cloud they can use ai to help predict client needs and get the data they need to quickly design coverage for each one. businesses that want personalization and speed are going with a smarter hybrid cloud using the technology and expertise of ibm. nice bumping into you.
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well back to to it "halftime report" vrgs i'm rahel solomon and here is our cnbc news update covid cases are back on the rise in america the white house covid task force says that new infections are up 11% over last week, with the vast marj of new cases among the unvaccinated the head of the cdc saying 93% of infections happen in counties with vaccination rates below 40%. on the new tonight, the delta variant threatening the u.s. recovery and working markets. we look at the hot spots and what's being done to slow the spread. 15 more states joined the strmt with purdue pharma moving the company closer to rchlg opioid lawsuits and exiting bankrupty. the updated agreement calls for purdue to release millions of
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internal documents nine states and the district of columbia have not signed on. and first it was drought now it's grass hoppers and lots of them they are infessing farms and ranches in utah and 14 other states where the ultradry weather has helped the bug survive and multiply you are now up to date scott. back to you. >> sekaidah'ses with grass hoppers what's next. >> we can't win. >> rahel, thank you. i mentioned the najarian brothers making moves in the market we wanted you to know about jon and pete joining us. doc you're up first. thanks for coming on even though not regularly scheduled. what are you doing. >> well, scott, right at the end of the show yesterday somebody stepped in in a big way into the spxu this is at triple-levered etf that's triple levered inverse -- in other words obviously it goes up as the spx goes down.
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and that was pretty shrewd timing, you might say, scott, because obviously we got the news out of tokyo about no visitors at the games and so forth. and the markets were tumbling this morning those 17 calls -- that's the strike price they bought, which were at the money yesterday, were purchased for about 40 cents. those shot up, tripling the move in the s&p 500 and we took off that trade, scott. so 42,000 of those that's the biggest trade we have tracked in that triple-levered etf. now the good news, if you want to view it as good, i guess, is that this was a very short-term trade. the options expire next friday it wasn't as though they were projecting over the next weeks and months seeing a 20% decline. pepper predicting or at least betting on a decline in the short-term they got it today. was that the whole of it
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i don't know but i took the profits and got out because the options only have one more week to live. >> wow, you went along for the ride for a short short-term play. >> yes, sir. >>ious to make sure the viewers understand, you took it off, no longer involved there. >> i am no longer in it. trace that's true. >> pete is with me on the phone. pete you hear me. >> yes, sir. >> thank you for calling in. double dose of the najarians today. what's going on with you today >> well, a couple of things, scott. i've been watching apple really closely. had 12 unusual hits in the last two weeks in there, which stock was starting off at $129 a share back on june 14th. it's obviously been running. we've been tracking that everybody tracking that. but gow back to just a week and a half ago they were buying the july 137 strike calls, scott and the stock was significantly lower and the stock exploded since. on tuesday they were bayingo buying the july 149 calls. they continue to extend up because of that when the stock
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actually was getting hit pretty hard today -- on tuesday the stock got up to 143. yesterday it was almost 145. today it pulled back and was opening at 141 and i was watching it a really long time and kind of hovered around there i decided, up what, i think apple makes a lot of sense all the bullish activity not just in july but further out, makes a lot of sense to me still that one was just a gut reaction it wasn't based on today's unusual. it was based on all of the unusual options we have seen a while, expecting the stock to continue it's already bounced a bit i expect to see this stock actually even as soon as tomorrow or maybe next week back towards that 145 level so -- i jumped on a bunch of calls there. >> it's only $2 away from the high, pete in an environment where we talked about almost every day of megacap fang plus stocks hitting new highs almost every day. microsoft, amazon, alphabet, facebook, we've been waiting on alphabet to join that -- apple
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to join that party and it seems to be heading in that direction >> it is and i would also say this, scott. i'll give you a quick unusual for you, if it's okay. >> okay. >> with oracle oracle that's not a name we talk about, right once in a while we talk about cisco. i bought that month and a half, two months ago, seemed like the right time and it's not done a whole lot stockwise. when you look at valuation, i think, and when you look at cash flows and everything else. and i was listening to rick reider talking about oerk sell in the same camp stepo except it's performing we had buyers yesterday, buying the 85 strike skauls in oracle stock immediately took off the options that were 30 cents and 40 cents went to $2 rapidly. came back again scott, with the pullback we are seeing in the market and they went into oracle at the 87 strike calls, again around 30 cents about what they were paying for the 6,000 of those. i think that this is another one of these stocks where i don't think it's done.
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i think there is room to the upside and i think that the stocks absolutely can break through the 87 levels of yesterday and go higher. it's still only trading at 15 times earnings and $15 billion in operating cash flow. this is a name that i think gets looked over a lot. but we probably shouldn't do that >> did you also have another one in a chinese stock pete >> i did. >> yeah. >> that was a a little bit more risky because of the fact of what you just said the selling pressure we have seen on a lot the different chinese stocks -- this is neo -- you just go back to june 30th, scott a $53 stock. now here we find ourselves in the low 40s. and is the it over i don't really know. but if i'm in the options i know what the risks are today we had a buyer of 5,200 of the 43.5 strikes calls going about $1.50. the stock was around that area trading 43.50 at the time. do i think there is a possible
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bounceback absolutely i look at the name and i think low 40s, just 53 i know there is selling pressure on the chinese names but i think this one made sense and i wanted to follow in on the unusual option activity. >> gentlemen, i love it. i know our viewers do. pete and jon we'll talk to you soon and see you back on the show in the days ahead as well. home builders stocks pulling back recently over a big run now a downgrade from onef e oth biggest names in the group today. we'll talk about it next thank you for giving your all to a 20-pound hunk of brisket. whatever you serve, we'll proudly deliver it. (bike rattling) (pleasant piano music)
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shares of d.r. horton lower today. the home builder downgraded to sector perform from outperform at rbc let's look at what we're doo are doing here because over the last i don't know, month, three months, the housing stocks, josh haven't done a lot as much as you like housing, you don't play it through these names. i'm wondering, number one, why that is, and then the name you like best in the space right now as well. >> yeah, well i have before been in all the housing stocks. i've been in the etf but i think what's going on with housing now is that the -- the next wave of buyers are encountering prices that are
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completely ridiculous and out of the range of normal buying and that sticker shock has come about, i believe, in part due to the all of the excessive stimulus, the fed buying mortgage-backed securities right now. which i can't think of a reason why they would think they would need to continue doing that, other than they're not sure how to stop. so if there is in fact a taper, i don't think mortgage rates will shoot up. but maybe that market will normalize a little bit, won't be quite as much financing available. and maybe home prices will come back into a more reasonable range. that's an issue. the second issue is of course labor and materials. that's something else that i think will be transitory i think -- i think in september when the extraordinary federal unemployment benefit sunsets in addition to all the manufacturing capacity coming back online, that should help out a little bit there too so i think these stocks are fine i think we're in a 10-year run
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for millennial household formation. i'm playing it through leslies with, swimming pools, not just the installation of pools but the maintenance, a cash cow business plus all the accessories and tools they sell to professionals and business at retail stores and online leslie's is a growth company in a secular growth business. i think it's a great way to play the idea of home ownership and people wanting more out of their home. >> sarat, you are also playing housing through lows before again with masco, now with fortune brands, again not through the home builders themselves. >> yeah, i agree with josh i think i'm playing it ancillary through other areas. i like lowe, the second sister to home depot but has the tune for higher margins going forward. we still have people spending money on homes going forward with the amount of cash that the consumer has
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i think lowe's is the tune here. we made money in the past with masco. these stocks reflected in over the last year the opportunity to make money before really earnings caught up to them i think you can be more selective it's not as eds as it was nine months ago. >> one stock hiding all-time high amid the selloff today. as we go to break, a collect on the major averages again where we have come well off the lows again if you weren't following early your, the dow down more than 500 points. down 220 cutting losses in half. nasdaq still down nearly triple digits s&p in the red by 3/4 or two-thirds of 1% s. everyone. gets. the deals. questions? got it. but, why did you use a permanent marker? because i want to make sure you remember. i am going to get a new whiteboard.
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back commodity stocks taking a hit today in the selloff steve weiss, one of those over the last couple days is cleveland cliffs jimmy in it. farmer jim, for those knowing him by that. and you, cleveland cliffs and free port, downgraded today. what are you doing with both of these. >> i'm not doing anything on them i'm waiting for free port to stabilize. i have sold the stock just slightly above this level and
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mistakenly came back into a trading position above 40. i don't think the copper story is over. i think it's a long-term story because of what's happened with evs. principle component. i'm sticking with it and looking to add in terms of cleveland cliffs i also own valet more of an iron ore play we're used this volatility in commodity stocks i think can you make money in these. it's not over. you're going to see the rest of the world come on stream and don't forget, we talked to rick reider about china possibly easing, driving commodity prices higher as well i will stay put in the names. >> another stock i wanted to highlight american tower, why, sarat because it hit an all-time high got a downtape not this one though, you own that that. >> i do. and this is -- this is the leader in towers and they are growing got international exposure, in the reit space and the cash flow here is great. and if you look at the way the model looks of recurring
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revenue, as 5g keeps growing, the stock is going to do very well the next few years. >> josh, paypal, price target raised today to 360 from 310 at deutsche bank that's you >> yeah, this -- this is rapidly becoming one of the most important financial services companies in the whole world it's considered a technology stock by the index committee but they are incorrect this is the bank of the future market capwise it's now bigger than all of the actual banks and fl really is no financial service vertical that they couldn't snap their fingers and decide to get into so if you like sofi you have to love paypal, because they are like five years ahead of anything sofi is working on. and they've got huge financial where with alto go to other places don't be surprised if the young people in your life start buying their insurance from paypal, start putting deposits with paypal instead of a physical bank making all payments paying bills
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like that's what this company has the ability to morph into. and more online users than almost any other platform. i love stock it's expensive but too bad it's always been expensive it probably always will be and i'm staying long. >> ask halftime is next. send in questions by video we'll play them on the air email us askhalftime@cnbc.com. (laughs) amazing! see it. want it. ten-x it. i'm 53, but in my mind i'm still 35. that's why i take oste bi-flex to keep me moving the way i was made to, it nourishes and strengthens my joints for the long term. osteo bi-flex, plus vitamin d for immune support.
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let's answer some of your questions. liz, to you from kyle in north carolina i'm a lazy investor with a three-year time horizon all in fidelity nasdaq composite etf. the vanguard total stock etf what do you prefer >> kyle, i'm not going to call you lazy i'll say if you're liss active, you don't want to try to time this the nasdaq is miss something of those cyclical sectors so i don't want you to have less opportunity in the cyclicals by holding that the s&p is miss something small caps so by the end of it, we're looking at the total stock market index cyclicals and growth and small caps sarat to you my disney held in an i.r.a. is down 10% should i sell or should i hold >> i wouldn't sell it. i'd add more to it disney has got some great room ahead of it once we get the
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reopening. the theme parks is where they'll make a lot of money. the whole fly wheel will start working when you look at what they've got with disney plus i like it at these levels. i'd add more to it p. howard in las vegas wants to know what catalyst will finally prompt verizon stock to move up >> you know what the catalyst is, howard the day you sell it. you have to look at this like a total return vehicle it's a 4.5% dividend yield in a world where ten-year treasury is paying you less than 1.5% right now. so the way i think about verizon, it will be more volatile than a bond, obviously. i'm willing to endure whatever volatility comes because i'm earning a decent yield on the money that i have invested in the company. upside, capital return for the stock traded higher if and when it happens is really more of a cherry on top. so it's a boring company it's not nvidia. own it for the right reason. i don't think you need a
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catalyst >> mike in new jersey, are you still bullish on jumia >> i am still bullish. i have sized the position somewhat differently just because it's not a market in my view for the stocks. the future is as bright as it's ever been and they're on track we'll hear more in the next earnings call. i do like the stock. >> what does that mean how have you changed the position how have you sized it differently? >> some of the high multiple stocks that took some of the exposure off higher relative. i took some exposure off those that was about a month or so ago but still there. still a decent position for me >> good stuff. thk u r anyofothat final trades are next. is almost at the finish line today we're going to fine tune the dynamic braking system whoo, what a ride! i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100 like you you don't have to be a deep learning engineer
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all right. final trades weiss, weiss, weiss. >> yesterday you said you were trimming boeing. today i'm told you bought some boeing >> yeah, let me correct you, scott, as i too often have to do yesterday i said not that i was trimming it but i had trimmed it and i bought it too early for a trade and i was going to wait for it to stabilize and i was going to add back a trade position guess what happened? a dow down 200 and change. 30 dow components of which only five are in the green. one of them being boeing after opening up that four bucks lower, it's had a nice move recovery so i think this is a point, i think it found support i think it trades higher that's why i add to the trade actually during the show >> thank you very much liz young -- >> you're welcome, scott
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any time any time >> large cap value never let a good correction go to waste >> sarat >> i like uber i think this is the play you want for reopening stock has been unfairly punished i think you want to buy it at all levels >> trb >> another all-time high for invitation homes reits on fire. >> "the exchange" starts right now. >> thank you, scott. welcome to "the exchange." i'm jon fortt. stocks are staging a comeback falling from record high levels on concerns about the global economic recovery but they are way off the worst levels of the day. tech still falling, though the big names are lower across the board except amazon peaking into the green but they've all had a good run except one. what's the matter with netflix and for today at least, tech stocks and bobd nd yields are falling

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