Where we are volatility picked up this week couple of big down day, now a lilt bit of a snap back. What do you think about with where we are well, the snap back is not that convincing because its losing steam volatility is back for sure because when you reach these levels in the market in terms of valuation, in terms of just overall movement, youre going to see more volatility because people get r more nervous. I think were in a small consolidation period and as we get into the heart of earnings season which i think will be positive, will probably take off again. I wouldnt expect the velocity to be b the same overall, i think the bull markets in tact, but as ive said repeatedly, you have to be haunted by your eck appearance when youve seep this before and not always be be all all in looking to buy every dip i just bought alibaba. But never got hit. So just bought baba. My point joe, is the volatility good . Because its going to gi you an opportunity if it continue, to get into some names youve been looking at sure. Probably give you opportunity to get back into names like goldman sachs. So yeah, volatility would be a good thing if you have a longer term vision, i think josh said this yesterday. Give me a correction i would be welcome and i tend to agree with that. Howard marx was excellent yesterday in highlighting the fact its not a time to add risk if youre long stay long. No need to get aggressive. In the near term, i think the market is highly aggressive on what we hear from apple. Apple tried to rally today now its lower down for the year. I think were apple dependent. Lets listen to howard and what he told us yesterday. The oak tree chairman, about where he sees the markets today and how to decide if we are where we should be or if people are getting ahead of themselves and too excited. What matters the most in the short run in my opinion is whether prices are realistic, relatil to fundamentals or whetr theres too much or too little optimism and when theres too much and everybody says nothing can go wrong, there are very few things more dangerous than that because eventually something will weve been in this kichbd market where seemingly evefb is positive, bullish. You hear words like euphoria being thrown around. What do you think of what he said i think hes right. You have to look at the fundamental, but i think theyre underpin ining this rally. Expectations going to this year for growth, for the s p 500, are close to you know, double digits anywhere from sort of ten to 15 depend iing on which economistsr which analysts you speak to. Right now, were up about half that gain on the year. That said, i still think you can see even without multiple expansion, you can still see further Earnings Growth underpinning a stronger equity market i think we probably have marked about half the gains this year, year to date thus far, but that still xwifs us room to run for the rest of the year in equity markets. Is there volatility ahead or is this just a head fake within a couple of days that felt kind of bad but as steve said, youre going to get back really into the heart of earnings season and he thinks earnings are going to crush it then the stock market is going to go higher. I welcome the volatility. I wrote a piece last week for cnbc. Com and it was about the absence of cynicism. When you have u the market down two days in a row it shows that people are skeptical, questioning. Thats very important. Because if its all positive all the time, you get a disappointment which we might have later in the year if companies do not come in with these 15 quarter over quarter growth rates and you suddenly are going to have this downdraft, so im very pleased we saw that sign of some cynicism and skepticism in the market so josh, youre still pacing for the tenth straight month that is longest streak since 1959 yeah, listen, terrific. I agree with everything that carrie said and what steve said and i want to add this idea is a concept called the minski moment where if things are too tranquil for too long, people take more and more risk and get more and r more complacent and the way you pay for that ultimately ends up being much worse than if you just have gradual pockets of volatility all awe long. I allocate assets every day. Im not suring for new record highs every five minutes thats not way i want to invest for people so if were going to have this correction that everyones been speculat speculating, if thats going to take place now, couldnt think of a better time lets do it. I dont know about fundamentals being the thing to focus on. We focus on them all the time. They dont shift as quickly as prices do. So i think price action is more relevant if were talking about is there a correction or not take a look at small caps and transports if thats the case, they have now tried three dconsecutive das and i think tha indicative of a market thats exhaustive by the time ive finished talking, well make a new record high but its notable were seeing those areas slow down. Still have par bolick stuff going with amazon. New record high. Nvidia looks bananas to the upside so you have these areas that are working, but i think a lot of the market is taking a breather and god bless. Thats what should happen. To your point, youve had transports put in their fifth negative day out of six. Youve had retail put in their fifth negative day out of six. These are areas were working. Are they going to stop working now . No, i think that firstly, to joshs point, i think hes right regarding the minski moment. One of the things we have seen emerge over the last couple of years is a tremendous amount of money thats gone into these low volatility funds that have been maybing be i making bets. So the more money that goes into these funds and the lower volatility tick, it just grows and grows and that exacerbates the problem when you start to see volatility picking up. So i think this increase starts to clear the deck, change the mind sets a little bit and potentially you know lead us to a better environment in the months to come joe raises the point of apple with their earnings on thursday, whether that holds a key for where parts of the market go for here youve got facebook after the bell today were going to talk about that maybe people are expecting disappointment whats guidance going to be. If all of a sudden this week, you have a week in this transports havent been working. Retail hasnt been working some other areas of the market seem to be breaking down a bit then faang, some of the techs dont start. So apple, i own apple this is what i want to say theyre expected to do 87 billion in revenue and 383 in earnings if they come anywhere close to that, its the most successful quarter in the companys history. Thats versus like 78 billion a year ago and 330 something in earnings per share however, its perfectly reasonable to say the x was a big gamble on thousand dollar plus phones. Demand did not materialize, at least not yet, whthen the other two phones replacement cycle wasnt so hot. China wasnt so hot. Its about 5 above its 50day moving average hasnt been below since july of 2016 another downgrade today im not sell it not saying its the worst company. Just saying why should apple add 50 billion a quarter . Thats what its been doing. Its up 200 billion in market cap over the last 24 honts why should that continue on if growth is not what we thought it should be. As they say the headline of their note, have shares then plateaued for r a while. Saying phone sales are plateauing one could be in the same. Sure. If theyre able. In other words, if phone sale sales dispoint i feel you. We said this the other day. I think its on and off, but in 2018, a cash story its a Cash Management story we know the product story already, so i think were already building in the disappointment on the product side, but i think the other side to that is apple able to present a form of guidance with the tremendous amount of Free Cash Flow theyre going to have, theyre able to exhibit to the marketplace, hey, this is what were doing with the cash. I think its a cash stroir that could off set the product weakness now if it doesnt, to joshs point, and it corrects, youre going to have a marketplace thats going to have that sentiment thats quoing to shift and youre going to have a market thats under pressure talk about boeing boeing is powering the dow higher today its another all time high beat on the top and bottom line. Also gave up guidance. Shares of the company have more than doubled in the past year. And kevin o leerileary still t theres plenty of iranway ahead. He joins us from theness dak i got to say, you bought the stock the other day. Or more of it. Made your case we pressed you on it and congratulations. Thats a good buy. Its wonderful when it happens and im humbled by it, of course, and i still own it and im glad i bought more the company is transforming itself into a subscription service. So many people have not acknowledged that yet, but every time you buy hardware from them, whether it be a Missile Defense system or aircraft or whatever youre buying from them, you are mor or less hooked in perpetuity into buying their Software Updates for ever who would want to get in a plane without the latest aif onices . I love their Balance Sheet ch i get emotionally involved when i look at it it is such a thing of beauty and just generates more and more cash flow and that is whats driving the stock. Managements done a hell of a job here, but theyre basically changing this business to a very high margin. Service business we were just talking about apple. We used to talk about how services was under 10 then it started to stream into the earnings past ten. Well boeing is in that same transition now except their customers have to buy the update what do you think boeing at these levels well i wouldnt buy it. We dont own it, its great if you do, but its up over 100 . Not as if anyone didnt notice that they were going to have a good fourth quarter. It is up 25 you think it was going to be a 5 pop in the stock day quarter . That good . Sure, why not this is a good day for infrastructure, machinery, capital goods type of stocks and i think that the market is enthusiastic about the big dow names on days like this, but i think its hard to make a commitment with new money to a stock like that. It is up 20 year to date if you think volatility going to come wak and is in the early innings of doing that, you think maybe theres going to be some sort of a correction, are you tempted to take some profits in boeing today im now mining. I agree with everybody talking about volatility its starting to creep back in when vol comes back to a market like it is now, you want to do to work on the Balance Sheets. Im going through mine looking for ones with less debt sh higher returns on assets across all sectors and when you do that, it leads you right back to Balance Sheets like boeing it is a thing of beauty. Its got tremendous cash flow. Remarkably clean Balance Sheet and fantastic Business Model why wouldnt i want to sell that this thing is driving my performance. Boeing is at a valuation that hasnt been seen and part of that is from the market. So not saying they havent executed they have. Not saying theyre not in the sweet spot with the airlines adding a lot of capacity of course theyre benefit. And with trump talking bt increasing defense spending. Their model isnt a lot different in terms of the subscription model, but this is also a product of the bull market nothing wrong with that, but youve got to recognize, thats the new growth stock of the mel enyum. A lot of the movement reflects momentum investing like bah bah baba an i bought more yesterday. This is trading on its Balance Sheet. Bull market with good excuse kevin, you want to debate that with weiss . Its trading on my favorite term, cash flow. Thats why i own it. I love businesses that can can increase cash flow, increase return on assets, are generally less volatile and have clean Balance Sheets im going to keep owning it. I dont see any reason to sell it i think its part of a you know, optimism on a Business Model that is morphing i dont think anybody was talking subscription a year ago and now all of a sudden, were looking at maybe more than 10 of revenue so i love all that you know, look, i agree with everybody else im trying to reduce the risk of my portfolio this is a name not fraught with risk it is fraught with cash flow whats the cash flow multiple on that . Just curious i dont know its trading at the market multiple, but the point is, you have to ask yourself about the quality of that. What is the stability of that cash flow . Where does it originate . What would change it you speak of boeing almost in defensive terms. In the environment that were in where as weiss, you make the argument that you seem to be, you would be increasing your risk going further out on the risk no airline orders get canceled its had from time they go out the order way more than they need then they cut back and cancel it then boeing comes out and say weve got to cut our projections. One thing that could happen. Its always happened all im saying, not saying sell it keep in mind its benefitted from the market. And it used to be a cyclical stock. Exactly its not a defensive stock got defense business, but its not defensive. Its highly cyclical hey, its joe can i ask you, 15 billion in operating cash flow for the guidance five years ago, now, its been five years that its increased it was around 5 billion. If you were to see that cash flow for 2019 decline for the first year, is that for you where you say to yourself, okay, im not in the stock anymore you know, i look at the risk in interpreters of modifications to estimates like that and ask myself five years ago, did they have over 10 of the revenue coming from Subscription Services on defense and aircraft i think the answer would have been no. We didnt look at that just assumed those contracts were sign and you were given the upgrades today its a different deal because of the mix of product changing look, the end of the day, the company said that they were going to focus on the aif onic business and start to do a different kind of Business Model. And i think its bearing fruit its not a major part of that their business yet, but it is so high in margin that id argue that the quality of the cash flow today versus five years ago is much higher now look, anything can make me change my mind if management does Something Different i looked at it a year ago if would thaw deliver on these and they did is the model changing, yes is this a defensive stock, yes, and the its a defensive stock with trump talking about military sprending and asking his partners on that point in the military spending, we saw what trump did with air force one these guys have margins of defense where its been unaba d unabateded they 500 for a toilet seat i think trump is going to be more focuseded youre talking 24 million for a couple of refridnlgerators no. Do you think trump did got a lot of great press in terms of his nailing boeing on air force one. What if they do that with spend something. Ross is going to canada, ace asia, singapore, you buy these planes you want to reverse the deficit . Start buying boeing. Youre missing the point. Im talking about margins that they take at the expense of the u. S. Government. Not whats going to happen with others buying planes theyve been doing that. Hey, look that could happen. Thats another risk, but right now, i would say theres as much momentum in back rooms going on with the trumps of the world saying look, you want to buy defense, buy boeing. You want to buy america, buy an aircraft from us its a trend thats your friend. Were really debating the quality of earnings here its a name that should stay on your radar thats my argument im forced to sell it down after it hit 5 , which is going to happen today im going to have to look at this again this stock is on fire. Its gotten overweighted in my portfolio. Going to have to do some trimming, but thats a nice problem to have. Thanks. All right, lets talk rates. The tenyear yield hitting its heist level since april of 2014 this week. How high will they duo rick is the global chief Investment Officer at blackrock joining us from new york city. Thanks for having me. Is this a week ha sofrt changed everything i dont think so. I think were going to, there are few things that are important. The fed obviously is important i think were going to learn a lot about the fed today thats going to be trily important longer term. By the way, the treasury Just Announced more funding to fund all of the fiscal spend, the tax billet s et secetera rates are going keep trending higher i wonder how the market is going to respond to that were at 273 on the tenyear look, 270 seems to be a little bit of a line in the sand. Made some people nervous stocks have been selling off the last couple of days and today, tas boeing market and Everything Else is really down or flat in the dow. Yeah, a couple of things. Your discussion about cash flow, i always wonder, people dont spend enough time, why is the equity market going to keep going up the Free Cash Flow, everything that matter ss Free Cash Flow relative to where you fund it. Say you go to a 3 tenyear, maybe a bit higher than that are you still generating enough free cash growth you are. Its part of my more and more people are focusing on the fact rates are going to move higher, but if you take where the fed is today, rates are still accommodative. I think people are not putting it into, yes, rates have gone higher the starting point was so low, were going to push a bit higher its not going to be enough giffin the growth to really off set it its funny. So argue theyd be anything but accommodate i at a two on the ten year would be laughable. Totally i think people by the way, the ecb and bank of japan are still fairly close to zero in terms of where ra rates are there we think were in the mode of where the Central Banks are going to start pulling back. Global liquidity is extraordinary today. Theres a cap because of demographic, liquidity in the world. Were still seei ining signific inflows, so rates are going to move higher, but not dramatically higher. Ray, hirick, its josh brown. Are individual investors being paid enough in terms of spreads to own high yields here . Youve got breakdown in the hyg, etfs and youre see things happen with flows that are interesting. Is that a risk worth taking . Should they come in more whats the house view . Weve reduced a fair amount to some credit theyre asemitic given b where spreads are today. It makes sense to pare back a little we still live in a world where people need yield. Were seeing a shift which ma e maybes a lot of sense. More people buying loans because of the floating rate nature. So do i think high yield is could trade down a bit is this i think so but the demand for yield, by the way, were i think theres a big opportunity where the the numbers are going to print this month for emerging market debt youre still getting paid for inflation. For real rates i think in terms of local debt will be up 5 . Worry about a dollar reversal no, i dont. It is the right point. No i dont really worry. Given the amount of issue wa answer, im not worried the dollar is going to rally if you said to me a year from now it would be higher rather than low, probably a bit theres so many good things happening from growth to the leverage being down that i think theyre gong to have a good run. Erin. Hey, rick erin brown is there a rate on the tenyear that you think becomes restrictive to growth and how do you think about anytime terms of nominal versus yield of what actually drives you know, sort of the rate . Two Great Questions first, the Housing Market, you look at the data horton, the Housing Market still not being impacted by the rate market if you said to mae, its hard t pick, not a digital answer you get into the mid 3s, you start to create some pullback in housing in some other parts of the market the point you said, which is exactly right, is you know, a bit technical. Real rates, inflation is tickeded up. You think about inflation, were going to run low twos an the tenyear is still at 270 you think about premium and what real rates are its important to follow i think real rates can expand a little bit, but i dont think a 3 tenyear is going to create that echoke u auffarth but if you got into the mid threes, thats where you start to get some slowdown praesh appreciate it. Thanks for having me. Is 3 , what is an equity market look like in a 3 world if it gets there over the next couple of weeks, the market looks a lot lower, but we spent some time with rick the other night and its kind of a measured up. Im short the ten year also the longer end of the curve because i think its going to move up quicker. I think with the, its int inconsistent not to have a higher tenyear vision if youre thinking the economy is so, so strong and ricks gotthat but the market keep going up if rates go up for the right reason over the right period of time, youre okay. Yeah, but thats, thats how you get to three is the reason that its going higher a lot of people are thinking its Economic Growth this is about supply higher deficits, shrinking the Balance Sheet. Youre seeing more sploi next up, tech earnings to watch. Facebook and microsoft reporting after the close. Some experts on those names. Were going to datebe both when the Halftime Report comes back in two minutes usaa to me means peace of mind. We had a power outage for five days total. We lost a lot of food. We actually filed a claim with usaa to replace that spoiled food. And we really appreciated that. Were the webber family and we are usaa members for life. Upeace of mind. S we had a power outage for five days total. We lost a lot of food. We actually filed a claim with usaa to replace that spoiled food. And we really appreciated that. Were the webber family and we are usaa members for life. You know whats not awesome . Gigspeed internet. When only certain people can get it. Lets fix that. Lets give this guy gig really . And these kids, and these guys, him, ah. Oh hello. That lady, these houses yes, yes and yes. And dont forget about them. Uh huh, sure. Still yes xfinity delivers gig speed to more homes than anyone. Now you can get it, too. Welcome to the party. Welcome back to the Halftime Report im in white springs, West Virginia where we have an update on the train carrying republican lawmakers to their policy retreat. It collided with a dump truck and we can now confirm that one person on the dump truck has died as part of the accident another person has suffered critical injuries. We can also confirm one member of congress has been sent to the hospital we do not know who it is, however, some sources tell us that House Speaker paul ryan as well as kevin brady are okay there are also some minor injuries and people being checked out on the train as well that information comes to us from the spokesperson for the Congressional Institute which is sponsoring the conference here in West Virginia they are saying it will go on as planned for now. Vice president mike pence was scheduled to come to the conference tonight to speak to republican lawmakers we are told the white house and their National Security team has been briefed on this issue we will bring you more information as we have it. Thanks so much. The latest on that breaking news lets talk about facebook and microsoft. Lets do facebook first. A lot of question, right going into this number on the heel of the change to the Business Model, really focusing more on the User Experience im wondering what your eck peckations are this is a company that historical historical historically has been very good at this time, maybe the best they know what to put it and find a way to do it quarter after quarter. They dont get carried away. This time might be different because a they did announce the shift and maybe it would make sense to reset the table with a easier set of expectations i dont want to use the word lower because it could blow it out, but with an easier set of expectation, maybe they dont know how turning publishers away for example. So i think its too tough to say this is going to be a good or bad quarter. I think if they come out and they temper expectations because theyve made the shift szuckerberg has admitted that the business itself is going to suffer at least in near term as a result of making these changes. You made the argument these have been b right moves to make he has to do it. You turn to yahoo doesnt anyone want to be that business . My question because of the changes they made, if this resets the way you need to think about it i was going to flip it and say how loyal is zuckerberg to the shareholder. Look at you you flipped the script on me hes loyal to the user base at the epd of the day, thats what he cares about. Do you think he cared about shareholders hes 1,000 times smarter than anyone gave him credit for i think he cares as much about his employee, shareholders and users as much he says and more im saying that shareholder, i think the risk is that shareholders have dropped further down the ladder. You paint it as though theyre equal. Employees, user, shareholders. No i think its users, employees you want to run a business, you have to balance all of the compete iing interests. Shareholders will never be unimportant, but at a certain point b, you have to say okay, maybe this wont be the quarter we ever report live with it because i have a vision that exceeds the next 90 days r for what i want the company to do. Can i make a point about shareholders today the shareholders include blackrock. People like me and my constitutional investors and large, wealthy individual shareholder and they have made the point and zuckerberg has heard it that they want more responsible executives Running Companies agreed. And facebook is on the leading edge of that exact tone. That culture i believe that this is absolutely the smart thing for the company to do to be aware of the news feed, whos in it, whos responsible for it of course, but does a stock thats up as much as it was last year, force you to take a the bull case on this was saying three, five years. Facebooks cheap relatively to what its earnings are going to be. If you do whats right for the business in a responsible way, the stock follows suit. It may not be on the next quarter. He said it will be b rough he gave good warning its going to be choppy but if you take the longer term views as blackrock is, youre fine with it because you know the fundamentals are going to lead to the higher share price. Now that may happen today, next quarter, but thats the only way to look at it. I dont want a ceo focused on the share. I agree did zuckerberg make you reset your time horizon if you will, on where you think this stock would be i dont think of the time horizon. So far out, im not really, i havent said in a year, its got to be here two years, its got to be here if you think all these companies have to be b aware of how their products affect peoples mental state, if thats a given, who do you trust more to get that right oh than Mark Zuckerberg so will it be challenging, yes is he the guy you want to figure it out i think for right now, the rational answer is of course he is hes still a large sha shareholder totally. I got you i get you, but i mean this is a judgeful moment the guys got half the money in the world maybe he doesnt care about shareholders as much as he did a few weeks ago. Microso microsoft. Pete and i, nobody talks about microsoft. The market cap of facebook is 550 billion. Microsoft is 725 billion we said six months ago, we had a conversation on this des b k, whats a better investment microsoft or apple i think we know what the answer is microsoft continues to crush it. The Corporate Tax rate coming down will lead you to believe the guidance is even stronger. Theres a stock at 94 thats going well north of 100 on every metric i expect that continue tonight coming up on the blitz, thank you. Youre getting good at this. All right. Coming up. Were trading lilly, Electronic Arts and bion. I in. Ge alerts wouldnt you like one from the market when it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential Investment Opportunities in real time. Fidelity. Open an account today. Fidelity. Where can investors seek pin an uncertain world . Pgim sees alpha in real assets. Like agriculture to feed the world. And energy to fuel its growth. 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Its completely unique. dennis woloshuck if you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. Who knew a tiny sensor could help keep the food chain safe . Welcome back heres whats happening at the hour an amtrak train traveling from washington to West Virginia carrying republican members of the house, representiviatives collided with a garbage truck. There was one fatality and one sers injury from the truck according to the house it was taking lawmakers to a retreat being held this year in West Virginia. Anjaun anjali na jolie and chief have agreed on helping in conflict zones they will focus on training, report iing and monitoring as a way to end the impunity. This is rape used as a weapon to achieve military or political goals. It affects men and boys as well as women and girls it is used as a tool of political control. Terrorism and ethnic cleansing the nfl and fox have agreed on a fiveyear deal for thursday night Football Games fox will televise 11 games between weeks four and 15 and will produce all of the games. No financial terms announced, but cbs and nbc paid 450 million for the previous twoyear package and this just in trey gowdy announce iing he will not seek reelection and the is leaving politics thats the cnbc news update at this hour. Over to Tyler Mathisen for a look at whats coming up on power lunch. That makes a lot who are stepping aside coming up on power lunch, we county dount to the fed decision well bring you that live and analysis include iing from bill gross. Plus, apple downgraded and its price target slashed at pmo. The analyst will join us and explain and former wells fargo keon the state of the banks. Deregulation and what tax reform means for atth industry. Halftime report is back after this i think we should do that meeting tomorrow. Well wait. What did you think about her . Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . At cognizant, were helping todays leading banks make better lending decisions with new sources of data so, multiply that by her followers, speaking engagements, work experience. Credit history. That more accurately assess a business chances of success. This is a good investment. Shes a good investment. Get ready, because were helping leading companies see it and see it throughwith digital. Time for the blitz welcome back lilly is down today on earnings. I dont want to be in this enof Health Care Great report you have the president whether you believe him or not, tauing about drug pricing i want to stay in medical devices. Electronic arts new all time high on guidance. You bought it. Yeah we started to buy it after we were looking at it a couple of weeks ago. Like activision, they had a bad launch of star wars. Theyre big in fifa and other sports madden is big with electronic art, so we think they can by this year. Juniper weak guidance has sent the stock down nearly 10 . Josh, whats up. Cisco is better this Company Beats by a penny. Announced a 2 million buyback raise the dividend and the stock gets killed because they dont love the guidance. Theres so Many Companies in this space with charts that go lower left to upper right with much Better Stories to tell. Biogen gets an upgrade. It does real helping i think the sectors under siege. Interesting report biogen has been one thats left for dead about a year ago, people stopped buying it, stopped liking it but the analysts say theres an extra 45 in value, so its worth paying attention to. Sfwl talk utilities. Theyve been under pressure this year hitting a technical death cross this week. That means the 50day moving average fell borough the 200day. This is the eighth time over the last ten years that the xlu has tomorrow foformed a death cs its bounced back. That said, if rick is right and the panelists right, its going to continue to put down more pressure on utilities here im underweight them nat gas prices falling 15 in a single week. Were going get the trade frs the futures picks and do na next onalim hfte. Big thinking in the finger lakes is pushing the new new york forward. Were the number one dairy and apple producers in the eastern United States supported by innovative packaging that extends the shelf life of foods and infrastructure upgrades that help us share our produce with the world. All across new york state, were building the new new york. To grow your business with us in new york state, visit esd. Ny. Gov whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley welcome back to the Halftime Report we are watchi ining nat gas tumg nearly 7 . Whats the biggest driver of the weakness today sfwl we saw a big change in the 14day weather forecast. Were seen weather patterns inject volatility, but right now, were so beholden to the next 14 days, theres six more week of winter subsequent to that forecast which is just crushing nat gas jim, we dropped under three bucks. What are the level sns. When you look at the longterm shot, it shot up to like 3. 2728 area, some old highs and rejected soundly to me, that means its not going to break up to the outside 280 is my shortterm i think part of it is donald trump talking about energy last night and people think its going to be a little easier. All right thanks, guys back with the live show tomorrow at 1 00 p. M. Eastern time exclusively on futures now. Cn. Now. Cnbc. Com scott. All right, thanks so much coming up next, oppenheimer upgrading a sneaker stock, but is is it really the best name in the excuse me, space grab a water oh, and theres the closing bell. sighs i hate missing out missing out after hours. Not anymore, Td Ameritrade lets you trade select securities 24 hours a day, five days a week. Thats amazing. Its a pretty big deal. So i can trade all night long . All night long. Is that Lionel Richie . Lets reopen the market. Mr. Richie, would you ring the 24 5 bell . Sure can, jim. Trade 24 5, only with Td Ameritrade. Your but as you get older,hing. It naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. 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Were back we want to do the call of the day before we get to the final trades footlocker has surged more than 60 and oppenheimer sees no end in sight to the rally. Theyve upgraded it to outperform do we like it . Is this trade back on now . Is this sneaker trade back. It is back. It is up 60 the business isnt changing, you still have amazon in the picture with zappos. You think that any of the brick and Mortar Stores are suddenly going to get for prescriptitraf. Why is the stock up so much. Theyve all been. Massive shortage. Every retailer is up 30 but we quote it off the lows if you quote it over a 3year time frame i have no takers on this. No. You also have nike going to straight to the consumer and amazon has their own site and on the nike site where you could buy the shoes and try them for 30 days and return them, footlocker is not doing that. Foot traffic was negative mall traffic was negative in november and more negative in december maybe it was better than already lowered expectations but you see anything good in this. Zero interest wow that must make it a buy we all hate. It looks like every other retail store and if there is less foot traffic they are wearing out fewer sneakers when tax reform became more likely, they were probably overshorted and then everyone said, oh, no the consumer will have the extra money and the short squeeze started and then you see some of them start to drop off again because it was artificial buying by people who had stayed too long on the short side there is no bull case for retail that i could imagine unless they all suddenly merged like the airlines and consolidate. Theyre high on the basketball shoes great. If younger im trying to speak from experience. If kwunger kid younger kids are buying more basketball shoes to take them into the store to get them fits. The basketball season is coming new shoes. New lebrons. And do you think it is not in the stock there is a new shoe. Stocks have to move. Free cash flow did increase. Nice try. And if there is less foot traffic, they are wearing out less sneakers. We have a couple of minutes lets do final trades. Ladys first so we really like emerging markets. We actually think that despite the fact that yields are increasing, you are seeing a weaker dollar which is helping emerging plarkt stocks and we think this is secular and now is a Good Opportunity to buy. Sherwin williams. So ive talked about it before not for a while. It is a good stock you saw the numbers. The millennial generation are buying house and that helps and the Housing Market turning over and people repaint and valspar is going well and we continue to like that. I want to ask you a question about another stock you picked on this show that had done well. Scotts miracle grow. What happened there . We dont own it any more. Because it is a pot play not that was not part of the scenario when we bought it but theyve been loosing some court cases. Not they but the sellers of the pot farms sh the growers are losing locations and that has affected the fertilizer and the growing press he growing process. And there is the big drop i was speaking of that got hammered the other day weiss. Far sina forest city. They will look at strategic alternatives, i think it happens. Alphabet stock is reporting tomorrow after close i think this has a shot to overtake apple in market cap this quarter, if present trends continue, they are only about 40 billion or so apart. That is my name. Joe. Nice boring continued appreciation in walmart. Continues to move higher i see sully over my shoulder dont worry, i see that. There he is over there cant hide good stuff. Thank you power lunch starts now. The state of the stock market is strong, america the short lived selloff didnt scare buyers off and that could mean good things forts year you could thank boeing and that soaring and the number one analyst tells us where it is likely to go from here but will an untested fed derail the entire thing the fed rate drop in one hour and janet yellen final meeting as chair im Brian Sullivan power lunch begins right now