Today. Its the pull back in small caps that got our attention earlier they, too, now, josh, have moved off of their low so should we be focusing today on this comeback for stocks intraday or the fact that for the fourth day in five both the dow and the s p are negative well, so its a really its a really outlying year just overall. We havent really even challenged the rising 200 day. The entire day in the s p. Not even the 50 day for most of the year so i think if we are to have a 5 or a 10 pullback from the highs, i just dont feel like anyone should think that thats out of ordinary or that it signals some kind of a shift in the broader trend which is higher just to reiterate. Were in a secular bull market that began in the spring of 2013 the move from the lows off of 01 is not relevant to this discussion and the secular bull markets can go on for yeefrms the Biggest Issue have you is the valuation issue, but youve had it now for most of the last three years, and the stocks that are the highest valuations are actually outperforming the stocks at the lowest valuation so none of that helps anyone. Is the bull market in danger of running its course . Not even close to being able to say that. I would agree with josh you cant say that the bull market is in danger particularly because we had strong earnings amazingly 8 growth and Third Quarter earnings with a couple of big hurricanes. So it would have been 11 or 12 if not for that, and its hard to see anything more than a correction right now you know, theres always a danger, but short of a cataclysmic event that the could real bring down earnings i dont see it. You can understand why pull backs like this, and not of great magnitude, but nonetheless almost any pull back where volatility get people nervous because it, a joe, been the calmest year that we can remember in the mark i thought cramer had a pretty good take on this this morning heres what he said and well talk on the other side heres cramer. Well, i think that people are saying, look, this is the beginning of the big rollover. Every morning yesterday it was the beginning of the big rollover wherever you people think theres an air pocket. Yes. Get a little bit of volatility spike and, oh, no, heres the big one havent had the big one. So, yes, theres the fundamental element of it which well talk further in the show about it which is the high yield market and the impact that that is having, but secondarily i think what youre seeing right now is the reaction to price, in particularly on the quantitative side, so if you were to ask me about i take advantage of the dip this morning i did not. In fact, running quantitative models i got stopped out of a bunch of names that i have bought along the way since august and september and its indicative i think of whats going on early in the morning where quantitative models, because of where price is and where the market is opening up, they are getting stopped out. It doesnt have to necessarily follow through and equate to a grand correction, but that seems to be the pattern over the last couple of weeks. We were asked the question buy the dip or get defensive what does either mean next to your name . Right now i am not buying a dip. Hes got a straddle on. Nor would i say im getting defensive. Punting uniform on again. What does that mean what i would ais that stocks that i purchased in august or september like red hat, red hat below 100, out of red hot, costco out of that today thats a name that ive struggled with multiple financial institutions, amg, tcbi, ibtx, names that ive had now for three or four months out of those, because prices tell me to get out price is telling me to get out out of those positions jim is leading to a really good point. It sounds to me youre running a system more defensive. Im running a system. Selling some of your biggest. Im running a rulesbased system. I get it. Whoa, whoa, whoa, wait a second. 70 of what goes on in the market strategywise is is rulesbased quantitative so lets not dismiss it because thats what goes on in the marketplace. Why are those stocks signaling sell signals today because they have validated the momentum strength, okay, that got us into those trades. To your point, yes, they are breaking down in terms of bolt mean reversion in, terms of moving averages, in terms of slope of the moving averages, yes. So youre telling me its wrong happening on. Youre telling me its wrong to read that as a more defensive posture from you sounds it. Yes. I think its wrong to do that because i think overall the fundamental interpretation of this market, were now at 390 days without a 5 correction, so who is counting youre looking at a grander call here, scott, objection are we going to get the 5 correction down . Im sorry. Not smart enough to know. Some stocks im reacting. Im not looking for that. I simply want to know whether its time to get defensetive or you should always have a portion of your portfolio thats defensive. Should never have to make that decision. Number up, look, you said it already. This stock market is going higher you can see theres no cumulative building, these are not down big days and keep bouncing off the bottom. More to the point, were 1 off the high more or less in the s p 500. You can find a heck of a lot of sectors down more than that that have already corrected these are not like terrible sectors like retail. Think about financials financials have come off, you know, from their high and theres plenty of opportunities there. Energy is starting to crack. The point being, and joe i think this is what youre saying though youre looking at it the from quantitative and im looking at it the from fundamentals theres plenty of places to put your money and plenty of places to take your money out of it. Im looking at it, doc, from a regular guy on the street, not quantitative or qualitative, no mumbojumbo. Is it time to be defensive on the market if youre a regular joe or jane on the street and you have a modest allocation to the stock market right now, i think you wait i dont think you dump out, but i dont think that you commit more capital on a half a percent or a quarter of a percent dip. The activity that youre seeing in the Options Market would suggest to you people are growing defenseive people are getting defensive, no 100 . Jason and i put together a little look at the iwm you see the put ratio there 31. Normal in the iwm is about 2. 11, so clearly in one of the larger indexes for tracking small caps, were seeing a lot more defensive plays being put on right here. Weve seen it in germany weve seep it in france and in the derivatives of those countries as well. So, it tends to be focused in our country anyway on the small caps they are the biggest beneficiary as far as i can tell, guys, of a tax pass that could didnt we see a huge im not saying its done. Im saying they are nervous. Didnt we see a huge spike in put options and bearish option activity leading into both the brexit vote and the u. S. Election, both of which served as powerful international bullish cat lifts . Couldnt this looked at as somewhat were 1 off the highs. Somewhat contrarian if that continues. Sure, and its a positive sign to your point, scott. Its always a positive sign when people have defensive positions on because its when they dont have those positions on. When theres a panic and they seek that protection very quickly that they drive up and spike up the vix, and were not seeing that right now. When were looking at what appears to be more defensive activity that you see, the reality is that nothing has changed of great magnitude in the market to make you get more defensive or from anywhere else. Youre downstream of earnings fundamentally so youre lacking cat lifts. The cat lifts that you see coming is never the catalyst that moves the market. Its the exogenous shock that you dont expect, Something Like they are trying to overthroat government in turkey. Okay. Weve had, you know, many headwinds. Had the occasional head fake along the way of this bull market. Right my point is if like everyone is oh, its really bearish because youre supposed to sell in may like thats not going to be the catalyst thats going to actually move a market because the calendar turns over from april into may. This is seasonally to your point. This is seasonally supposed to be a good time for stocks. Actually a junk stock rally between thanksgiving and christmas. The high beta names, small caps, technology and biotech, emerging markets. They tend to outperform the more stable areas of the u. S. Stock market in this period of time, but it doesnt happen every year, and nobody tells you in advance this is going to be one of those years where it doesnt happen. Also the strongest period for buybacks and buybacks in the first half of the year were down 10 relative to last year and authorizations were up 20 so corporations were holding back to this period where youve got through earnings that is very strong buyback period again, i go back to the fact that we seem to be coming in weak and rallying. Is that buyback activity possibly, but keep in mind its there and present. The authorizations are there and companies will buy. Theres one other quick point and jim mentioned that there are a number of names down from their high its about 22 of all s p names are 15 off of their high for this year, and there have been waves of names as they have come through, you know. Big ones, ge. Yeah, exactly. Macys. Many names have come. Some of the highest performing and best performing stocks have not and perhaps its time to sell some of those and that creates opportunities and thats what we have to watch for. Certainly noted on prior occasions whats been a rolling correction. Yeah. In various sectors, so now maybe were focused on that area yet again. Huge names in pharma. Biotech. Its not a bull market for largecap farm ark across the board. There are huge names in energy, 20 , 25 off their highs just from this year, not even their alltime highs from a few years back so i think carrie makes the important point. Not like every stock is pushing to new highs and they are 1 off. Huge areas of the market where there could be much big opportunities if trends shift and tastes change going into 18. How would you read the shiller data from yesterday out of yale, the survey he did which showed that people are the lost bullish that they have been since that survey started in 2001. That flies in the face of flies in the face of other surveys which have consistently said that bullishness at least amongst professional investors is high and has been high for a long time. Weve been talking about this. Thats normally a tell that the market is going to roll over and it hasnt. Thats an outlier. I agree, and i think its important to mention we talk about polls and surveys. There were two types one is where people say what they think, and the sorry what they are actually do, so when you look at bank of america, merrill lynch, Global Portfolio manager positioning this week, way overweight equities globally way overweight not like for world historybut relative to recent history, and then you hear a poll where they shay, no, im not that bullish thats fine, but we all know what youre doing. Cant lyrics and i care much more about what pupil are actually doing than what they are predicting they might do or tell their friends they are doing. Nobody wants to look goofy at this stapling in the cycle, but they are long. Lets bring in mike santoli joining us today from the new york Stock Exchange. Hes been looking inside the market for maybe some signs of cracks some of the things that people are looking at, mike, beginning in high yield. Yeah, absolutely, scott high yield, i would say its high yield spreads the way junk is acting is one of your Desert Island indicators to know what the environment is looking like. Gotten a lot of attention that the high yield market has really softened up. What that means is people have waning risk appetites and not quite as willing to accept low yields on speculative debt the hyg is a very handy way to get a glimpse of it. Its imperfect and thats the highyield etf and thats been weakening lately coming off of its highs. Thats been a beacon for the market all year. Kensho, our data partners, looked at the coincident indicator, the leading indicator, down 3 and on average in recent years had a 6 pullback in the s p. However, 15 of the time stocks are up when the highyield etf is down. I think thats an important kind of addon to this point which is the it does not perfectly tell you what junk is doing. Jupg spreads going higher. Another chart shows highyield spreads which essentially have backed up in the way they have backed up in august, in the way they have backed up in march, so its coming from very strong levels the levels they are at is not dramatic look at the huge spike in late 2015, early 2016, the energy crash. Look at that you could barely see that rise lately right here show it shows you theres more of an awareness of risk. A little bit of a half step back take a look at global markets. How people rex posed to stocks europe is down 4 from the highs and japan is down 6 , 2 from the highs so essentially its a general stepback from risk and high yield is part of that picture. Well, it goes to the Jeffrey Gundlach tweet of a handful of days ago noting that the jnk, right, is on the stream of decline at the same time that the s p was on this stream of rise asking the question of which is right yes, and so he got a percent and a half on the s p in the direction of maybe junk was right. I think honestly you really have to have a little more of a nuanced view of these things because if treasury yields were ripping higher, so that means that Treasury Bonds are being sold off hard, that jnk is going lower, right just because treasury yields are going up, so it gets complicated with the bond math and the spreads, but it doesnt always just tell you that theres a risk environment right now it happens to mean yes. Were taking half a step back from this. What do you make, mike, of what cramer had to say this morning, how weve been conditioned to almost expect stocks to either go up or be in a fairly calm environment and at the moment theres a bout of volatility its oh, my god here comes the rollover that weve been waiting or. This is it tomorrow is going to be in and the next day its volatile this is really it. 100 right. Thats been the pattern. Down 2 and down 3 . Youve seen a lot more well up of anxiety and a lot more of that hedging type activity that have j was talking about on relatively small moves in the index. Now, that being said, if that were the start of the big rollover, it would look exactly as it looks right now at this point, right i mean, this is how they all start but very few of them get there. So the probability say this isnt the big one the first volatility spike after a long calm period usually isnt the big one so it is important to see if people do get genuinely very nervous way out of proportion to how modest the equity decline is in a big index. To mikes point, michael, the hyg puts are trading about 41, puts to calls. And they are way out of the norm right now, so youre on the exact right part of the market here as far as high yield people are concerned. The high yield is roughly 86, jumping. They are buying down to the 80 strikeout in march and may of next year, so they are looking for, you know,er in 10 downside. Yeah. Its interesting. Probably worth mentioning stock, some people are explaining away the weakness saying huge weighting in telecom and old lbos and there is a tax reform angle if we cap Interest Deduction levels, not good for high issuers out thereto in the market still, you dont want to explain it all away because back in 2015 people were saying, oh, its only energy and guess what you wanted to get out of way that have one. They have been saying its concentrated in a very small number of specific sectors. This specifically began when sprint tmobile split up now you had the sprint tmobile blow up and people running to the sidelines creating a domino effect mike is completely right this. Isnt about yields rising but poor earnings in the healthcare and Telecom Space and the important thing to focus on is if the high yield continues and its an equity replacement, unfortunately, its going to continue to act this way, you have to have the liquidity concern and thats the biggest risk to the overall capital structure. Liquidity, is it going to be there and a bigger decline thanks for jumping on with us, appreciate it very much. Havent even talked about about tax reform very much, today anyway investors banking ton though to give stocks another boo. But a little known provision inside the proposal could impact every single investor. Eamon javers uncovering those details for us this hour eamon . Reporter yes, scott, thats right. A small one but gives you a sense of some of the small fights going on, a battle over what they call first in hand first out stock sale, a provision in the senate bill take a look at the details, in the senate bill, not necessary lit house bill forcing investors to sell the oldest shares of a stock first if they are not selling all of their hold national had a particular stock, and it would block a tax minimization tactic of selling the shares that have the least gain as i said, its not in the house bill but does raise 2. 7 billion over ten years one critic calls it a shocking overreach but proponents say it eliminates the confusing Tax Complexity and by narrowing down some of that complexity it actually makes things simpler overall. I talked to one person today, scott works said that this thing would ding active investors in favor of passive investors and he thinks thats unfair and people on the other side and it depends on whose ox is getting gored. Thats one of the things about doing tax reforms. All little provisions in this, this 2. 7 bill crop over ten years is not huge but they affect Different Industries and different sectors of Different Industries differently and they are all battling it out behind the scenes in washington. Lets be clear. The implication here and why theres so much pushback from the Big Fund Companies as well as from other areas is that shareholders, stockholders, could have to pay higher taxes. Thats right. Somebody is going to pay that 2. 7 billion over ten years and the people who have to may it are aware of it and squawking behind the scenes and trying to get that removed from the senate bill not in the house bill so somehow this could fall by the wayside or fall in the final package have to wait and see. I think its what they are trying to do is offset permanent tax cuts for corporations, and they are doing that by nickel and diming regular households. The types of people that quote, unquote, were supposed to be rewarded for electing this wave of people in, and when you talk to an asset manager or a wealth manager, look, most of us right now are using average cost at which i think youll still be able to do so this isnt apocalyptic but just another example of this wont have a big impact in the scheme of a 1. 15 trillion budget deficit. Saving 2. 3 billion or 2. 7 billion with Something Like this is irrelevant. However, it does have an imact on a household by household basis so its not going to be great overall for people in the Financial Advice industry, asset management, et cetera, but rhyme pact is going to be on households, and it gets you almost nowhere to paying for a state tax repeal, et cetera, so i think its gross i think anyone that is associated with throwing this one in there just to test the waters should be embarrassed and actually i think it will not end up being part of the final version because we know that wall street is highly influential in this white house whether they were supposed to be originally or not. Its also indicative of how this tax bill is coming together calling it tax reform. Doesnt feel like tax reform shifting one loophole or one little thing for another or the way that they are going to tax education grants, not endoemts the point being that this is not a simplification, adding new complexities and reoperation old complexities i dont like this. Eamon. Yeah. What weve learned so far in the process of trying to come up with this legislation all along the way, whether its about 40 is 1 k caps, the trial balloon floated out into the public. The question is this specific proposal part of the final or trial balloon that gets popped thats a good question. Like i said. Tax not in the house bill and is in the senate bill so somewhere the two sides will have to reconcile that and thats why everybody was waiting for the actual text of the legislation here because thats what sets off all these internecine fights between these industries here in washington when they look and see how the revenue is being raised have to have revenue raisers in here they are doing that in a very detailed way and that sets off these pitch battles. Thats why tax reform is so hard to do in washington because somebodys ox is getting gored at all times and those people are all up and powerful and often fight back. Eamon, its interesting that this is coming up right now pause weve got six weeks left for the year, and if it passes next year, it could be retroactive for the full year, 201. Would i think that in the near term firms like our firm, for example, what the type of selling we would do, tax lot selling, were going to do more of it this year because we might not be able to do it next year it could greet in the near term more volatility in the market and more pressure on stocks. You know, im just wondering if everything is thinking that way who is in the same in the same boat. Doc, give me a quick thought. Whats your view we dont really have a lot going on with this one for us, judge, because most of the holdings weve got are long term on the stock side, and were just pitching options against it just to generate alpha, so for us and for our clients not a big deal looks like a negotiating ploy more than anything else. Eamon, before i let you g. Tell us about next change yesterday between some ceos and gary cohn. Its getting a lot of attention, and its certainly interesting i want our viewers to hear about it. Reporter yeah. This was a moment fascinating to watch for what it says about where we are in this moment in tax reform this was at a wall street journal event yesterday, gary c ho hn on stage a wall street journal editor as the moderator of this event asked the ceosed in audience to raise their hands if they are going to invest more as a result of tax reform, if tax reform does pass. Take a look at this moment here, and youll see what happens. Can i ask you all a quick question if the tax reform bill goes through, do you plan to increase investment, your companys investment, just a show hands, if the tax reform goes through okay. Why arent the other hands up why arent the other hands up not a lot of hands went up in that root gary gohn says why arent the other hands up. A bit of an awkward Movement Just that the ceos there were all checking their phones at that moment and shy and didnt want to raise their hands in front of everybody else, but if does gift impression anyway that a lot of ceos dont necessarily think that they are going to invest a lot more next year if we do get tax reform for whatever reason. Had a little awkward for gary cohn in terms of going out there and make the sale pitch and thats what they are doing with all the events going out and talking to ceos. The other interesting part, of course, it was gary cohn who told our colleague john harwood a week or so ago that the group happiest about all of this were ceos. Because they are going do more buybacks, not because they are going to hifrmt lets not act like this is a vacuum where theres noprifrmts we did a massive tax cut in 2003, and the result was stagnant wages for a majority of workers in america and then, of course, the stock market crash plus two wars that we had to pay for simultaneously, so lets not act like this is some kind of a slam dunk where you lower the statutory tax rate and all of a sudden they say, oh, yeah, we really did need extra 500 employees. It really has never worked this way so i think it will be great for the stock market absolutely will boost buybacks might get an upknick r d and all that leads to is automation. It does not lead to the appalachians being at a 2 unemployment its a fantasy never has worked and wont this time. Thanks for joining us eamon javers in d. C. For us. Heres what else is coming up on the Halftime Report. Next, the retail stock one wall street analyst says to buy now. Its not bauflts fact that the stock is down 52 on the years see why the firm is so convinced that this stock will be a winner. Before the break, our data partners at kenshow showed japan is a good place to invest in the last six weeks of the year dating back to 19990 nikkei is up 2. 5 bought and then sold on new years eve scott wapner and the trade remembers back in two minutes. We are back. Shares of dicks Sporting Goods, there they are, jumping today. Better than 5 , because they got upgraded to outperform at jpmorgan that firm calling for a near 18 upside weve made it our call of the day, a call josh brown said during the commercial break i will fade it. All about fading dicks ive got to tell you imagine the possibilities. Well, look. Youve got to you have a cheap stock here, fine but its been chief for a while, and i think the issue is its probably the best operator i like the stores. I buy things in the stores i buy things on their website sometimes, but more and more im just defaulting to amazon as are 120 million other households on so many categories and Sporting Goods will not be immune i understand that could be in the stock and technically if it can get above 30 maybe you is a nice shortterm trade and long term you can only have so many pizzas in your pie chart how many do you want to be a standalone speciality retailer other than a decent store experience that has no reason to compel you to come back . That take is credible, all that, i get it everybody gets it. You could have said the exact same thing about best buy five years ago. Reporter still saying that about best boy, yes. The stock performance, its been up and down its on an upswing now cant there be, and maybe there is just one. Cant thereby one last person standing yeah, home depot. In this business. Home depot, lowes, maybe best buy, sglur why not dicks sport pentagon goods it certainly could, but the question is what does it look like not they are going bankrupt. Its like what does this thing look like in five years after spending the next five years battling against Secular Forces over which no matter how good they do, they have no control, and so if people are doing all of their shopping on one platform because the delivery is easy, their credit card is on file, et cetera, et cetera, and have you to fight against that every single day, sure, youre Still Standing it doesnt mean its good business. This is not me, you know, pulling the best buy thing out of nowhere this is crux of their note they say best buy is the analog. Every retailer says they are going to be the best buy analog though. Best buy is managed completely differently than dicks Sporting Goods is they dont have the debt levels that dicks does they have a better Management Team they have looked at their Retail Stores they have redesigned them successfully, and josh is speaking about a secular decline. I mean, i dont even know in we can talk about it anymore because its a 300 million market cap but theres the evidence of the secular decline. Why is best buy up 34 year to date . Because their competitors are gone other than the big competitor do you remember circuit city look, think back. Do you remember Sports Authority. You got a temporary boost because the weakest players dont last as long and that actually helps you if youre dicks they did a deal with Sports Authority. They were able to get the web property these are all great things. But you might need to you need some help sometimes when you shop at best buy you really dont need help to buy the sneakers. You dont new zealand help to measure your foot. Just once and then you can buy youve got to characterize. Got to characterize the trade the right way. This is not a longterm holding or a Great Company that decades from now youll be talking about buying it at this price. Its a speculative trade and in that context its actually not a bad idea seasonally by the way this is the time for retail. Stock is up 50 . That implies that theres that there arent any fundamentals behind your decision. Well, look, the reason its speculative is because the whole retail space has been absolutely vapor rides, like a nuclear bomb has come on. Not just dicks, department stores, apparel stores. Is that getting bert or worse in 18 ive been consistent it gets better when other players leave. Scott, you were talking about Sports Authority let let me just finish. The malls are more empty, not less empty, so even when you have other players exit, then you have people going to a mall that looks bombed out versus full of points thats not a positive for dicks. Im taking the other side 120 Million People buying on amazon, thats fine. Theres still person who want to buy in person. Fewer than before, but they are there. Also what is sold in dicks a lot are things you cant easily buy online, a basketball hoorp,s specialized football cleats. One reason to buy dicks and its simple. Amazon over one weekend controlled the entire supermarket industry by buying whole foods, they can do the same thing by Sporting Goods and coming in and buy dicks. A reason more to short it not to buy it. I agree with your point. Who knows if sun comes along and says theres something we can do differently than what management is currently doing thats always a possibility with these things trading at four times, you know, cash flow and as cheap as this, so i dont want to short it i hope everything goes well for the company. Not right against it i just think secular trends will make this a very tough hold. Targets big fall today alaska airlines, squire, ibm, apple. All next in the blitz. First though lets give you a check on the market before we go to break stocks are well off of their lows dow is still down withnird of 1 a loss of 88 points. Were back after this. Accumulations up to 8 inches. Dont know if you can hear me, but [monica] whats he doing . [lance] can we get a shot of this cold front, right here. Winter has arrived. Whooo hahaha [vo] progress is an unstoppable force. Brace yourself for the season of audi sales event. Audi will cover your first months lease payment on select models during the season of audi sales event. Yes or no . Gin. Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. Something we all think about as we head into retirement. Its why Brighthouse Financial is committed to help protect what youve earned and ensure it lasts. Introducing shield annuities, a line of products that allow you to take advantage of growth opportunities. While maintaining a level of protection in down markets. So you can head into retirement with confidence. Talk with your advisor about shield annuities from Brighthouse Financial established by metlife. All right. Welcome back let do our trader blitz now and begin with target. It is a component, by the way, up the cnbc iq 100 its falling after giving cautious fourthquarter guidance all right, joe what do you think of this one . Well, what i make is we can spend a lot of time on this, you and i. This is brutal first of all, the buybacks came in not according to brian cornell, the ceo feels great about where everything is. Really . Thats what he said. So 375 million in buybacks they were supposed to do, they only about 171 million inventories were supposed to be down over 2 they were up 5 . 7 billion investment in 1,000 stores i dont know whats going on with target other than its getting amazoned. They are walmarted. And thats a note. Walmart is so hot right now. Maybe it was somebody else and if it was forgive me, getting squeezed between walmart and amazon is that the issue . Were overstored. Everybody knows that. Beat on both bottom line and sales and the guidance to joes point, guidance was brute al brute al. I sold my costco. Pete was over there talking with cornell today at the mall or at target we had an interview at, and pete was talking to him, and hes Courtney Reagan interviewed the ceo earlier. Look, i get a ceo trying to spin a positive message on where the business is, but what happens when that message sort of flies in the face of what others say is the reality yeah. The stock started to go down more during the interview. Sunk through up through 61 in the premarket at 6 30 this morning. It was at 61 when the news hit and then the guidance hit and that slammed the stock. Like when a lg o sees target beat earnings, like whatever lang wajt programming was looking for, and it triggers buys and then the guidance headlines hits and then that triggers sells, and then its not until two hours later that you see real price discovery amongst actual investors, and it aint good. But theres no strategy, so thats the big problem with a company like target. It doesnt matter what he says people are say, well, weve heard this before. Weve heard it before, and theres nothing new thats going to save. We have a strategy. They have invested heavily in their omni channel, their Digital Strategy is legit. Yeah, i understand that its legit. Not really producing much. Table stakes. Not producing enough for investors. Not a offensive move to be like oh, we have an app. Thats just a walk in the door thats your ante that youre online no one is going to clap for you on wall street for that. Alaska air shares are on an upgrade. The airlines have slipped into correction territory. Oh, yeah. This one is one of them. Its down 28 year to date like what joe was talking about on the target side. They have cut some routes. They are cutting out havana in midjanuary i think because, believe it or not, people dont want to go down there to havana as much as alaska air thought. J. P. Morgans been dead right about this one they took their target down from 104 to i think 64, and took them to a neutral im im not real fond of the upgrade today and didnt buy any. Square hitting a new alltime high today after it said its going to allow some users to buy and sell bitcoin on its Money Transfer app josh it would have made this new high anyway. The stock has been on a tear all year, the whole space. Anything payments related. I actually think this new news is more important for bitcoin than it is for square in terms moving the needle. The big issue with bitcoin and the fact you buy a cup of coffee 100,000 nodes around the world and you have to buy a little block chain, square making this more consumer friendly could be a positive catalyst for usage. New 452week high. Ibm, jimmy, going to you. I cant blame them. By 32 . Hes been in it for years look at the last year years, s p is up 23 . If you look forward, this is a stock that may finally break Something Like the 22quarter streak of revenues going down. They had a good quarter last time they may actually grow ref news in the next quarter. Im not in it, but if you had another good quarter in the Fourth Quarter it could get really interesting. At the same time they add to apple. Classic buy high, sell low. Classic. Thats me so its not undiscovered up 50 still like it, china is doing petter than expected, up 12 president and donald trump and xi make nice for days in china means i think china will be good to apple people will buy iphones and spend money there for christmas presents at the expense of other retailers and its still an expensive stock on next years earnings. Thank you lets jump to sue herera with the headlines. Heres whats happening at this hour, everyone. President trump taking a personal bow when it comes to the release of three ucla basketball players who were detained in china on suspicion of shoplifting tweeting do you think they will thank me they were head for ten years in jail, end quote. Relatives have identified kevin neal acts suspect in yesterdays deadly shooting spree in northern california. He shot and killed four people in different locations around rancho tehama wounding ten others before being killed by police. Zimbabwes army says they have Robert Mugabe and his wife in custody the army is patrolling the capital streets following a night of unrest. And pope francis receiving a 200,000 lamborghini at the vatican, but its not for his personal use the luxury car will be auctioned off for charity. The pope took a look around the car before autographing it and blessing it. Well keep you posted on what it goes for thats the update this hour. Sue, back to you. John is tracking unusual optionles activity in their financials and steel well talk about that next first though, Tyler Mathisen up in chicago of whats coming up on power lunch, bowtie and all. Scott, thanks very much coming up on power lunch, im live at the schwab Impact Conference here in rain, chilly chicago. Well speak with the president and ceo of Charles Schwab and get his take on the markets, on tax reform and the individual investor plus, weve got a panel of experts who will give you their best ideas tore 2018 single best ideas. The market strategists, experts, the names and sectors that will be your best bets over the next 12 months or so, and bill gross of janus says the market is at a top. He will join us exclusively to explain why. All that and a bowtie on power lunch. Halftime report is back after this win an uncertain world . K predictable income pgim sees alpha in real assets. Like agriculture to feed the world. And energy to fuel its growth. Real estate such as ecommerce warehouses. And private debt to finance transportation and infrastructure. Building blocks of strategies to pursue consistent returns over time from over 120 billion dollars in real assets. Partner with pgim. The Global Investment management businesses of prudential. We are the driven. The dedicated. The overachievers. We know our best investment is in ourselves. We dont take no for an answer. We fight for what we want. Even for the things that were once a given. Going to college. Buying a home. And not being in debt for it for the rest of our lives. But were only as strong as our community. Who inspires and pushes us to go further than we could ever go alone. Sofi. Get there sooner. Halftime report. Jon narnlgiian at the telestrator with unusual options activity with unusual activity in materials whats first alerian mlp, in a space where they pay huge dividends. What Michael Santoli was talking about, high yield and its yield is 10 hook at it it sold off pretty hard. Now its 1025. They come scrambling in today and buy upside calls here. They are probably going to hold them until the third week in january. January expiration, ten calls right at the money so they get the upside with only a little bit of risk. Let me give you another with you. Ill in that one probably two to three weeks and then weve got u. S. Steel hitting again Stock Exchange was around 26 buckses, 26. 76 buying basically aggressively as its come off from the may lows there now to 26. They are buying the 26. 50 calls. Just in the money by maybe 20 cents or so. Like it. Im in these as well, and ill in these about ten days. Judge. Good stuff. Nice little move there come on back over here. All right. Oil prices down for the second straight day. Well go to the futures pits next and talk to the traders there. Dad we walk inside. And its raining. Our home was ruined. We couldnt live there. Mom our first concern was the kids. This was going to be hard on them. Chubb got us a place to stay in the same school district. Otherwise it could have been a nightmare. Dad. Chubb turned a disaster into an adventure for our kids. Mom. And no one missed a day of school. Well, itsonce again. Eason yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from td ameritrade. What if we could keep more amof what we earn . D. Trillions of dollars going back to taxpayers. Who could possibly be against that . Well, the National Debt is 20 trillion. As we keep adding to it, guess who pays the bill . Him. And her. And her. Congress, we should grow the economy. Not the debt. I cant wait for her to have that College Experience that i had. The classes, the friends, the independence. And since we planned for it, that student debt is the one experience, im glad shell miss when you have the right financial advisor, life can be brilliant. Ameriprise we cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. And at 4. 95, you can trade with a clear advantage. Why did you take Credit Card Debt on . Second kid. Private school. Medical bills. Moving costs. Solid ground. A personal loan from sofi is a smart way to consolidate Credit Card Debt. Certain borrowers cut their credit card Interest Rates 42 and increased Credit Scores 17 points on average. Borrow up to 100,000 with low rates and no hidden fees. Find your rate in just two minutes, and take on your debt at sofi. Com. Welcome back to the Halftime Report were watching crude oil falling for a second straight day. Is this a reaction to that Inventory Data we got this morning . A rlittle bearish the iea saying that demand maybe not coming in where we want it to be at if we get oil in the upper 50s and you have suppliers hitting full cylinder stride next year if we see that high level of oil, some traders starting to believe the upper 50s is the limit where oil can go to. Were seeing 55 being held right now. Do you think we go higher or lower . Jackie, from here over the next two weeks i think were probably stay in this spot and go higher. We have the opec meeting november 30th. They will trying to talk it up keep it higher demand has been forecast downright now. Thats supply builds that we had. U. S. Production at a record. I think we could see 60 between now and then i think oil goes below 50. Thanks. Were back with the live show tomorrow at 1 00 p. M. Eastern time exclusively on futuresnow. Cnbc. Com. This is where i trade andrs. Manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. Okay. 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Liberty stands with you™ Liberty Mutual insurance. Ea, electronic arts, i see some real strong activity in february i bought it. Intel hanging high. I really like the way its reacted to the volatility the last couple of days. I am a share holder first republic. We like it its down 11 . The financials have gotten hit expenses are in line and we think the estate tax being gone will be great for their clientele. A reversal is very powerful thank you power lunch starts now heres whats on the menu. Another down day calling the top. Hell join us on the power lunch exclusive. Missing the target share getting crushed. Investigators disappointed with holiday forecast target ceo lays out how he plans to drive growth. Its all or nothing for the republicans. The senate unveiling the new plan to cut taxes and eliminate the mandate in one fell swoop. Will the gamble pay off . Power lunch