Plus, were taking your questions. The Halftime Report with scott wapner joe, amy of Chevy Chase Trust and j. J. , with us today. Lets begin with the markets stocks digesting another move into the record books, setting up for what lies ahead there is a lot for investors to consider the looming meeting between President Trump, president xi increased tensions with iran, and earning season in the not too distant season we set another new record for the s p. Tech hits an alltime high today. Thats been the second best performing group this month. And i might finally get steve into the camp where he thinks well see rate cuts but thats clearly what the fed told us yesterday. The table is set for them. Now thats jaw boning. When they do it, that will be Something Else i already have a bet for dinner with steve i think hes going to have to pay off on that. Unless you drive in an rv, that ship has sailed. Which ship. Because you said two in two weeks the fed will ease. No, i said if we converted. Its on tape. Ive got it on tape i taped it i dont have them queued up back there yet. I said if we stay inverted for two weeks, thats what i said, and i said we will cut in july we will cut in july. I think jay powell told us all that yesterday i want to zero in, joe, on this tech move as we mention new alltime high, okay, today for that sector. And what a month its been for some of these names. Apple, the marquee name, nvidia up 15 facebook and netflix up 7 broad com, 10 is tech the place you need to be, that you need to be as we are about to embark on the second half of the year . Im going to answer your question by telling you thats why i think the market is going to move higher everyone is looking at this rally. Theyre calling it a relief rally. They say the breadth of the rally is very narrow you mentioned Technology Names theres a uniqueness in those Technology Names facebook, apple, netflix, nvidia they have not taken out their previous highs from 2018 so, Technology Overall advancing to an alltime high, its coming from other places within technology i think thats a favorable question to move forward. Because theres still a lot of room to go, steve, joe says favorab favorable. Apple 14 off its high nvidia is 47 off its high every stock on the list i gave you is still, at minimum, low double digits from the high, whether its netflix still 13 you go qualcomm, 17 intel still 20 off its high we play catchup on some of those names . Some we do, some we dont micron, im not sure youll get back to the old highs. Pretty confident you wont, as a matter of fact i think whats much more important than individual names is the market. Thats whats driving it joes right. Its been a narrow advance weve been saying that already for eight, nine years, that its driven by buy backs, the most hated rally weve ever seen, et cetera, et cetera. It doesnt matter. The only thing that matters at this point is china. Well, the fed matters. But theyre sort of out of the way. Not really. Theyre in front of us in july but you also made the point that if they move in july, if they cut rates, you dont think stocks go up are you rethinking that . No. I think stocks go up short term on that. A kneejerk reaction, youre right. But longer terming, i dont think thats the catalyst. Yes, i am rethinking it because i think right now with the ecb coming out so dovish and with the fed coming out so dovish, i dont think they have to cut all they have to keep jaw boning they will cut. They took the word patience out. Its all going to come down to china. I believe that will get the ball moving forward after the xi trump discussions i think you can see a multup in the market over the near term and then weve got earnings. This has been a very low incident preannouncement season. Here we are going into the quiet period were in the quiet period before we get announcements virtually no preannouncements. We had broad com but that was because of tariffs and so forth. I think its clear skies ahead. Its still early. Its still the 21st. I think this tech meltup is actually a response to rates i dont think that i think if we get a cut its not going to stimulate the economy so much. We had repatriation, capxspending theres not a lot of pendup demand but it changes the risk reward on equities. I think thats what youre seeing i think youre already seeing it because of the fallen rates. Youi agree with that 1,000 free has been economy forever. With the ability to borrow at negative rates, theyre giving you money that thats not been the issue. It doesnt stimulate the economy. It drives prices higher. It drives you to risk assets because youre forced to go there. One thing i would say about it, steve, if they dont cut rates, its already so expected that i think that that would really crater us in the short term. So much is in the market, like you said. The probabilities are all there. 100 probably it will move on the data in my opinion i think the data will be bad. The other thing, joe brings up a great point, youre seeing this tech rally without the most popular stocks over the last couple of years being the f. A. N. G. Stocks that have room to run. Thats where you wanted to stay away from, the high growth names, go elsewhere, like microsoft, et cetera. I think those stocks will gain upward momentum if we see a res lags to the trade resolution those as in f. A. N. G. . F. A. N. G if we get the basis cut and the indication, which is the most important thing, and i think neil spoke to this today, we are fighting deflation that deflation is coming to us from the rest of the world i would argue the 50 basis cut point is more needed by europe and the emerging markets and the rest of the world and dough metticly but our reasoning and methodology behind the cut is to asage the weakness thats coming to the u. S. What do you make in the fact and mike wilson of Morgan Stanley earlier this week spoke of it. The fact you have defensive oriented groups doing so well, you have new records for staples and utilities. Bespoke with an interesting table. From the last part of april right before you hit the high in the first part of may until now, its been a defensiveled place to be. Its been Consumer Staples and health care and real estate and some of the other areas you would associate with that. Is that a negative sign lying beneath the surface . Yes youve seen Economic Data turning down so people are looking for a place to hide where they can get yield and less cyclical exposed. I want to play off what you said lets listen to what mike wilson told us and well continue to debate that. The only thing thats working are bond proxies and highquality Growth Stocks at the very defensive setup thats how weve been set up to go back a year ago we made our defensive rotation, utilities, staples and reits, topperforming groups. They outperformed by 1,150 basis points people are cramming into places they think are safer until they arent thats exactly the point. You used the word take out safer and put in hide, like you did. Is it a negative sign . I think you dont you can ignore it as you go forward. Youve been ignoring it you keep hitting new highs even though you have defensive areas leaving or outperforming. Without a doubt without a doubt. I actually think that youll see a rotation if you get the trade dispute on its way to being settled. Youll see that rotation out of defensive. Not all of them because you still want utilities and reits ball of the yield. Youre a yield investor. Youre not getting in the credited markets but youll see rotation more aggressively. We said tech was the best performer of the month and its a fraction behind materials. Its want a big laggard by a big stretch of the imagination. I think you see the rotation. If its about a bond proxy, youre looking at bonds themselves i think what the concern is and why flows are going into the bond, tenure was 268 topped out at 279, down to 197. Now you get a little relief, its a 205 yield as long as you can see those yields bump up 2, 2. 25, then i think the money goes out of bond proxies and goes into momentum, hyperdwroet. We know yields wont get away from us but i want to stabilize the rate of the yield decline. Even if you look at the if you want to say its a defensive tone, j. J. , this plays into your wheelhouse people are still growing more bullish. You have inflows bank of america saying today, weekly inflows accelerated to near 17 billion, the largest inflow since march now here we go with the chase. It goes exactly what our clients have been doing over the last two months, outside three months where they went from not sellers to buyers of equities. The bigger point is those momentum stocks havent been there. You look at stocks like next energy and noble that have are actually since the rate cut has come more into the forefront, have actually performed amazingly well i still think theres a part of peoples retirement port pole foes and even though momentum stocks pick up you have rebalance coming on at the end of the month, given the vast outperformance of credit if youre a balance portfolio, now you have to buy some equities so youll continue to juice it. Ill play off steves credit comment there. Not negatively, steve, but thats a relief. Kmx, carmax up 13 unit sales year over year you look at this stock, it was 61 at the beginning of the year hits 88 today its up another however many percent today. Id keep an eye on auto nation those are obviously bigticket items were talking about here, scott. Not all are being bought to drive ubers. I think the consumer is feeling pretty good. Thats one thing that im not disagreeing with amy but im saying when you have consumers feeling good, that can be good across a lot of sectors. In other words, i would not hide out here i would not hide out in utilities and staples. I think that the consumer having this extra bling in their pocket is going to continue to be spent. If they have all that, why are some of the retail names some are. Thats very selective. When i talk about carmax, im not talking about one auto manufacturer. Im talking about a lot of the retailers have been obje obliterated. I believe the consumer is good walmart, 52week high. Target. Express, 52week high mcdonalds near a 52week high retail is very selective. Youre talking about consumer touches those stocks okay. Take amex out of that. You could arguably say youre talking about a more defensive part of the consumer spectrum. No fair. Dont tell me wall matter is doing great and thats a representative of the consumer doing great. Carmax is that. I will point to that up 13 thats used car look at new car sales, theyre actually down. Youre seeing youre not buying a 400 car there, though. I know. Im not arguing the consumer is bad because i think the consumer is okay. I think leading indicators ahead of the consumer are pointing down housing can we use the resilience consumers are not taking on a lot of debt. If you want value to work and value stocks to work, you need a consumer leverage cycle and were not getting that. Lets add another voice to the conversation lets welcome in liz ann sanders, schwab chief Market Strategist joining us by phone were about to embark on the last week of the first half. Whats in the months ahead i just published yesterday my second half outlook, and it obviously hinges to a large degree on the fed and the trade. I think the jury is out if the proxy here is a 1998 kind of situation where insurance cuts, in the case of 98 they were combating the implosion of the atcm and asian currency crisis and it led to trouble in the stock market and economy or is this more like 2007 or 2001 where the fed steps in and cuts by 50 basis points but we were already headed into a recession and it was too late to stem the tide. I think trade is an important needlemover in the near time. I think if were headed into a recession, were probably in it. When they go back and date it, they date from the beginning of the high not just the point they had the ee fif any were in one. Do you think we are no, not right now but i think my point is if we head into one, and i think its more likely if theres no trade deal, and if the remaining tariffs kick in on the 225 billion, thats much more biased toward consumer goods its hard to imagine a scenario where you reignite corporate animal spirits cap exlex led cycles. Youre looking for more volatility in the months ahead, whether its geopolitics or the trade situation and then there are other things to be concerned about as well. Does that add up to more volatility what youve seen in the last year and a half where this is sort of the fourth high since january of 2018 and each high has come with successively lower percentage of stocks above their 200day moving average thats not the only measure of breadth. Dline looks decent. With those successive highs that have had better breadth, youve also seen a pick up in volatility its not yet measured in a persistent pick up in the vix but shortterm bouts of volatility, the interday swings by virtue of what we see on twitter throughout the course of the day will be characterization of this environment heading into the second half. What if we distill everything down to the simple fact that the fed is seemingly about to embark on a ratecutting cycle. History says when they do that, you buy stocks. Really . So you wanted to buy stocks in 07 when they first cut or in 0701 when they first cut . Youre saying that now is like 07 i dont know. Im saying it could be a 1998 situation where theyre reacting to a shortterm crisis and it did fix the problem, but you also had, other than 1998, you had a 50basis cut in 07 and 01 with bear markets because it was too late for them to halt the path toward recession. I think the jurys still out as to what scenario yao were looking at here. Lets bring Steve Liesman into the conversation. Our senior economics reporter. What do you make of that i think its possible for stuff to happen after a period of weakness that will make it so we would have been in recession. I think what liz ann is saying in fact, it happened in 01 if you read what they wrote about the 01 recession, it said if not for 9 11, there would perhaps not have been a recession. So, we have this initial weakness 9 11 comes along and creates additional weakness and that then gets predated to the beginning of the recession i think thats an interesting concept. Are things worse than they seem i had a chance to sit here and listen and keep my mouth shut for a change, as you know it was the most depressing ive ever heard about a stock market at an alltime high. There was not a nice thing said about anything maybe the consumer. Maybe the consumer were in a post08 world. I want to bring up a chart. Im psyched about theheadline of it. Which is asking the question, is the first cut the deepest . We have, as we have some percentages or probabilities around as the fed do 25 or do 50 im introducing this now because were going to follow this over the next six weeks or so 100 probability of a july cut with a 78 probability of that cut being 25 and 22 for 50 this was up 36 a day ago you talked about neil coming on saying, i wanted it to have been 50 not me, and we had bullard on this morning who said or he put out a statement this morning saying they should have done 25 because you really take an insurance cut, which is the language liz ann just used about the calling it the insurance cut like in 98 kind of thing. Liz ann, do you think all of the expectations of what the fed may do is now fully in the market so youve depressed the stock markets ability to go higher no matter what the fed does from here on out . I think it depends on what the data looks like in conjunction with what the fed does lets say the data picks up significantly from here, we get a strong jobs report, im not sure the market sees that as a good thing i think they bring into question whether theyre bound to political pressure i think if the data significantly deteriorates and they were to, say, only move by 25, that wouldnt be a good tinge thing. There is a scenario where you get additional softness in the data that justifies what the fed does you keep expectations up 100 for 25 or 50 the fed does what is expected. Their statement is not inflammatory about the economy then thats probably a decent scenario. The multitril dollar question, as liz ann alludes to, is what Richard Fisher mentioned yesterday when he was with us. Lets listen to what he said about what cutting rates would really do for either the economy or sass set prices you have to ask yourself, what would be the benefit of a rate cut in terms of impacting real business decisionmaking and the real economic sector, not the financial markets, is this going to lead to more cap ex, more drive to employ more people, et cetera . I would say that that has to be weighed right now because the markets are giving us a huge gift in the cost of money. Theres no stress in the cost of money you boost asset prices what else would you get out of a cut . I think Richard Fisher has an important point, specifically when he talks about corporate confidence and Business Capital spending, which was obviously the hope for what tax cuts would bring in but the problem was three months later, you start a trade war and that dented survey based data, confidence based data. Im not sure the falloff im pretty sure the falloff in cap ex intentions had nothing to do with fed base rates being 25 more than companies would like i think a move down would calm some fears but i dont think it will reignite the animal spirits and kick in the cap ex cycle perform i dont think thats what corporate confidence is hinging on. How about the fact that cutting actually keeps us competitive with other global Central Banks and acts as an offset from the deflation thats being exported into our country right now . Well, i think thats a very valid point and part of the reason why weve seen movements in currencies. Plays the game of not being any more hawk in the Global Building with 12. 5 trillion negative debt and being in a deflationary cycle, i think history has proved that just cutting rates to bear bones doesnt necessarily pull you can i point out what liz ann just said. Maybe you remember the 1970s there was a pesticide called dtv and it killed a lot of birds of prey we have a special pesticide out there and its killed all the hawks. Just the hawks nobody on the fed is arguing low rates create excess. Nobody in the political world who is there theres not even anybody, if this goes bad, that will be able to say, i told you so, this was going to end badly everybody is on board with either the fed staying neutral or cutting rates nobodys talking about the excess. This is whats described as the anatomy of asset price bubble, if you will, in that you cut rates, you stimulate asset prices further when people like liz ann and Richard Fisher suggest it doesnt do anything to boost the economy the economy stays more depressed. Asset prices raise even more, which raises the procepensity f massive asset ive written about this quite a bit. I have a table that looks at when asset inflation exceeds real economy and inflation and it grows as a share of the economy and whether historically this had a trickledown effect into a broad variety of economic indicators, not just gdp, but payrolls and inflation history shows it doesnt it obviously boosts net worth for those on the higher ind of the income sector, the asset holders and not unique to this environment but periods of excess asset inflation when its not also accompanied by real economy inflation doesnt tend to have a positive impact on economic indicators. What do you and my Investment Committee, if you will, do with that if i say theyre going to cut rates, can and cut rates more than once, are you going to buy stocks and worry if it boosts the economy later . Im going to hold stocks. We about two years ago we moved or the second half of 2017, we moved from a longheld overweight tactical recommendation on u. S. Equities. Really since 2009. Took that down to neutral. At the same time went to a bias toward large caps at the expense of small caps. Reflecting late cycle, typical tendencies and also the heavier debt load on the part of smaller cap companies, you know, potentially for an inverted yield curve. And last august we went a little more defensive in our sector recommendations to going to more of a neutral so, our perspective to our clients has just been, dont get out over your skis use volatility to rebalance, come back to your normal targets, continue to play the large cap small cap spread but its probably premature to go underweight because of the risk you stay in an environment like weve been in the last couple of weeks. So, john i hold stocks because your alternative, joe mentioned already, and i think steve as well, when you have the beggar thy neighbor going on and youre basically taking rates germany hit negative 30 on the tenyear we cant sit here with ours, steve, at the much higher levels and just let that happen the currency alone will crush us if we do that. Now weve got the dollar at the 200day looking like it wants to break it well see what happens. Liz ann, im going to say thank you for being with us. Well continue this on the other side i want to find out how well play the market in the months ahead. Heres what else is coming up. This Industrial Power house has become a battleground stock on wall street and throughout the globe. And one analyst just made a big call thats next. Jon najarian is following some unusual options activity in a bigname retailer. Before the break, check out what happens to the oah services after a 10 more jump a week according to our partners, it trades negatively 70 of the time a week later with neighbors industry the biggest loser for more go to cnbc. Com kensho gd to form the Stock Exchange which brought people together to invest in all the things that move us forward. Every day, invesco combines ideas with technology, data with inspiration, investors with solutions. Because the possibilities of life and investing are greater when we come together. Welcome back were keeping an eye on a number of semiconductor stocks. Amd slipping down towards its worst levels of the day due in part to a Commerce Department statement saying they are adding more companies to its government black list for doing business with chinese entities without government approval. In this case here, one of the Companies Mentioned by commerce is a Company Called higon, a voint venture between a chinese chipmaker and amd, now saying they have to get permit from the government to do business. Thats the reason why those amd shares are moving toward session lows back to you. Micron was already in the news today, which we were going to do because of a couple of calls made on the street jpmorgan reiterates overweight but they cut the price target from 60 to 54. It was changed at baird which had a sell on micron i which this news came out before the notes did what do you do with it on monday, pete and jim cramer were talking about the unusual activity in micron and it made a pretty significant pop. This news that we just got from dominic chu from whichever department targeted amd Partner Companies and putting them on the do not trade list, the black list or whatever, thats problematic for a lot of folks in the space im not saying its a dont touch. I just think those price targets being lowered are probably not subject to that are, rather, trade related. Price target, one is 50, one is 28. 18 buys, 11 holds, 4 sales. Average price target 12 months forward is 44. 95 that is well above thats thinking its returning to 64, where it was last may june 25th they report earnings, i think the street is expecting a very bad quarter to come out youre going to see revenue growth, declining substantially. I think it comes down to pc demand, iphone demand. On a quarterly basis youre talking middigit declines for both it will be a lot to lift this but maybe jon is right for a trade. Lets hit another interesting call that happened today as well its regarding the industrials it happens just as jim luben that wiwa with us. Atlantic he can quits comes out and cuts cat to underweight. Theyre looking for more macro data and the weakness to be an impact there worth mentioning the cat ceo was with cramer last night and he left jim with the impression and i think a lot of viewers that theres too much negativity around the Bigger Picture on cat and that cramer wasnt at all on board with this move today and neither, apparently, are investors because you can see what the stock is doing even in the face of a downgrade to an underweight. I think one of the points that he made on that is that theyre not the same caterpillar they were in the 70s. Its a Different Company president China Business being overweighted by investors isnt really where theyre doing so much of their business its only 10 of their revenue one of the things, i happened to meet the gentleman before, theyre now the Worlds Largest operator of Autonomous Vehicles. Theyre already using that in terms of mining, et cetera so, they are into a lot of different areas i dont think people consider. I think the criticism in china has been way overplayed at caterpillar. What do you think i dont think Autonomous Vehicle says has to do with the stock price or no, no, i just thought it was an interesting tidbit. It is interesting look, its all china apparently the market thinks china is going to be resolved. Thats why the market is up. Thats all that matters. If we do get a china trade deal, then i think i think we definitely dont get a cut by the fed, or if we move it forward because its not going to do anything the only reason for the fed to cut in my view is to please the market because the odds are saying 100 . The only reason yes, the only reason. The fact that were at two and germany is at negative 30 and the euro has crashed down to 111 or 112ish, during all this, that is not a reason for us to basically realign with the rest of the world youre exactly right. Thank you for stating my case. German bunds have negative for a while. No, they just broke into negative the last couple of weeks. Theyve been flat were 70 bips a year ago. Well, if you take a look year and a half ago, they were 32 bips i remember specific thatically yes i put it on. We need a picture of wapners face as his Investment Committee becomes the open market committee. So like a tennis match i just dont i never subscribe to the theory that we have to go big, weve got to go hard because we have nowhere to go in terms of cutting rates you dont put out a report point of information here, thats exactly the question i asked powell im sorry to say he sides with najarian on this one he said its specifically more than just trade. He acknowledged trade is the big story. Of course hes going to say that of course hes got to say that but he has to give me 100 bucks after the show otherwise what hes saying is were going to make a political decision because thats what trade is he cant say that. No, but there are as mike wilson listed, there are ten concerning, at minimum, im making ten as a number im pulling out, there could be 12, there are so many different data points, weak pmis again today, that could is suggest right but a lot is occasioned by the trade war, which doesnt just affect the u. S. , it affects but some of its not. Its china tightening what impacted china last year was not just the trade war it was crackdown on shadow banking. It was china raising rates so, what and the rest of the world followed china the rest of the world didnt follow the u. S. I think a lot of the shadow banking is because china went to government banks this all cant be traderelated. Not everything frad index its trade related. Restaurant performance, is that trade related the u. S. Is come off our sugar high. Look at mcdonalds. You dont think restaurant is good youll pull two out of the hat heres my point i think the fed is smart enough to know 25 basis point cut is not going to stimulate the economy any more weve heard that from steve. We heard it from liz ann i agree with it. So when youre in that situation, i think you have limited arrows in your quiver, you cant just throw it as a nod to the market. Thank you, steve. Sh have a good weekend. Lets get to headlines with sue herera. Im on vacation. Going fishing all right heres your news update at this hour, everybody. Thousands of students from all across europe protesting near a coal mine in west germany, urging governments to take bolder action against Climate Change it comes a day after european leaders failed to agree on a plan to make the blocs carbon neutral. At least 30 people died after a fire swept through a factory producing match sticks in northern indonesia. The cause of the fire still under investigation. Oregons democratic governor has authorized the state police to round up gop state senators who walked out in protest of a bill this to prevent a vote on the trade and cap Energy Conservation bill. Opponents say that would increase the cost of fuel and injure Trucking Industry and loggers. Australian researchers examined hundreds of xrays of adults and 40 of those between the ages of 18 and 30 developed that bonnie growth on the base of their skulls. All had spent at least four hours on their phones every day. Experts gave the report mixed review, however, claiming it cannot prove cause and effect. At least hold it up so youre not doing this with your neck. Thats right. Sue, thanks. Options traders making a bullish bet on Retail Stocks up 20 in the past month. Jon has that trade unusual activity, we give you the s p sector check the s p after hitting another inw record high is down 2. 5 theres those utilities. Feel that . Thats the beat of global markets, the rhythm of the world. But to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. A long list of S P Industries setting new s p highs. On the list, hotels and restaurants, software and services, insurance, household and personal, and Consumer Services now, back to scott wapner and the halftime Investment Committee. Nice to have you back target shares rising more than 20 in a month can the gains keep going lets see what the Options Market says. Did pete put you up to this . No. Hes too busy playing golf with mr. Cornel he didnt even call me today, scott. I did see unusual activity in one of his favorite names, and that is target as you said, stocks up from 70 to almost 88 bucks a share in the last month thats Pretty Amazing performance. But today they come scrambling in and buying upside calls, betting it goes higher yet which upside call, the 90 strike calls out in july. They came in, bought at first about 6,000 of those now as you can see, its approaching 12,000 or 1. 2 million share equivalent love that action the calls have already moved up fairly dramatically. Im in these calls ill probably be in them two to three weeks. Second one for you, judge, take a look at this one sea limited, this one huge activity i mean, especially for this stock. I did it as my final trade may 22nd i only had shares until today. Now ive got shares and calls. Why . Because theyre buying these calls in big numbers stock moved from 30 to 34. Now theyre buying the july 34 calls. Lieu that action i bought those calls and i expect to stay in these probably about two to three weeks as well goods stuff come back over. Thank you, sir. Were going to do questions and answers right now. First up, joe, got one for you from the uk, would you invest in beyond me . Thats so volatile listen, its a social phenomenon and i think in the long run, the volatility bleeds out. You get consistent Quarterly Earnings reports and the visibility will be there thats when the opportunity is there. For now, this is a tremendously volatile stock, in particular based on last evenings news reports. Paul, from deerfield, illinois nordstrom, oversold on technicals or not . Absolutely. I think thats why would you buy it . I did this week i bought the 32 and 33 calls we had huge unusual volume in there. I traded out of those. They were decent trades and im still in 35s out in july, judge. I expect to be in those probably three weeks. From john in illinois, bed, bath beyond, you buy it . No, i dont full disclosure, one of my good friends is an activist involved here i told you another large activist who looked at it, and they passed on it. I think its difficult to fix. They have some board seats replaced look, their online strategy isnt really thery et. And theyve got lots of issues if we look at it in a couple years, it might be okay. For now im staying away from it i think the activists are underawarded by 30 . Thats a big move down let me go to a special report with nbcs chuck todd, who is interviewing the president of the united states. Announcer this is an nbc news special report. Heres lester holt good to have you along. Were coming on the air to bring you the confrontation between the u. S. And iran over irans shootdown this week of a u. S. Air force surveillance drone that iran claimed violated its air space. A claim the u. S. Denies. Last night President Trump called off a planned retaliatory strike at the last minute. Just a few minutes ago, he explained that decision in an exclusive interview with chuck todd for this weeks meet the press. Had you green light something or did you say, if we do this, ill do this what was the order you gave . Nothing is green lighted until the very end because things change. You never gave a final order . No. But we had something ready to go subject to my approval they came in, they came in about a half hour before and said, were about ready to go. I said, i want a better were planes in the air . No, were about ready to go no, but they would have been pretty soon. And things would have happened to a point where you wouldnt turn back or couldnt turn back they came and said, sir, were ready to go. Wed like to a decision. I said, i want to know something before you go. I said, how many people will be killed in this case, iranians how many people would be killed . Id like to get back to you. Great people, these generals they said came back, said, sir, approximately 150 and i thought about it for a second i said, you know what, they shut down an unmanned drone, plane, whatever you want to call it and lear we are sitting with 150 dead people that would have taken place probably within a half an hour after i said go ahead. And i didnt like it i didnt think it was i didnt think it was proportionate. President trump in an interview with chuck todd. Let me bring in Hallie Jackson at the white house in that same interview the president acknowledged he was getting pressure ill take that back from our colleague at nbc, lester holt. There was an interesting decision by the president , to say the least, getting more explanation from President Trump himself just moments ago steve, we talked earlier about just one of those flash points that exists for investors to try and sort of game out the risks that are out there as we move ahead into the second half of the year. Its kind of interesting because when you heard about it, my first reaction was, the marks going to be down. This is basically an act of war. Were going to retaliate im sure if trump were running for president , hed be beating on whoever the president was that we didnt retaliate as hes done in the past i thought he would retaliate, the market would be down even though before he decided to retaliate, the market didnt care. The oil market, which has been more unnerved, if you will, by these tensions in the middle east. Which is inflation positive, by the way but we saw that impact the airline it is negatively so many crosscurrents at the end of the day, the market is higher and it was stashlgly higher before. One thing for viewers to keep in mind. Were heading into the july 4th holiday. Going forward, it will be a slow news cycle besides nike, this is what you do, start the show by talking about managing your positions. This is the time you have to be more active than ever because of the news cycle and one tweet or one news cycle to send us crazy and the more senior traders taking a couple weeks off. The danger is making a move in your portfolio, is it not, ahead of this meeting between the president and president xi at the g20 next week . Its not the bar, i think, correct me if im wrong, youre the ones with the money on the line, that the bar is very low the president says comes out and says, we had a nice dinner, the talks went very well and theyre going to continue. Market likely rallies on that. Thats why im long i agree with you i think the question of keeping the positive dialogue going. Im not looking for a deal next week. Nobody is looking for a deal. Im looking for a cordial dinner and well keep talking. Knowing the feds in its back pocket, too. I think what youre looking for is that the remainder of gths goods will not be thats exactly right. Will be placed on those the president will come out and say, okay, well have further conversations and there will be a pause in that consideration. He already said theres no deadline he said its when i want to do it. But he said if there wasnt a meeting aware of is the president on what additional tariffs on china will mean to us us looking at t chart on your screen and saying they hit a record high or fallen x percent from a record high because theres uncertainty about the trade war further escalated, more tariffs. He is keenly aware of that is the president out of t depending where we are at that moment is a new high, not screaming a thousand points in my opinion instead we need a lot of body built around that skeleton once there, we can rally whatever but not looking for that i am cautious of doing that you could have a statement the week after which we saw last time that contradicts everything that came out of the meeting. Think about final trades. Well keta a quick break, come back and do it on the other side their rates are good , we know that theyre always going to take care of us. It was an instant savings and i should have changed a long time ago. Were the tenneys and were usaa members for life. Call usaa to start saving on insurance today. And wand everyone ive everlife. Opioloved away from me. Thing everything. I blew my ankle out and i got prescribed pain pills by my doctor. If making my detox public is gonna help somebody im all for it. I just wish i wouldve had a warning. Theres the earnings calendar nike, lets trade that who wants it nike ahead of the numbers. Whats gone on with nike, a strong, fundamental quality story. We continue to emphasize that on this show. It marries momentum with quality itself it is a company that youre seeing strong technicals i think theres resiliency to it i would have thought that nike would have been much lower than it is right now based on what we have with the trade dispute. Thats the number one issue on the call going forward, what happens there. You remember the last earnings, their asian business was off the charts they address their supply chain in terms of china, so i dont think thats talking about the home builders. Two of them in the last week. Kb home wednesday i like them still i think were lower for longer for rates. I think thats for these guys, i think it is already proven good for car max. So i would watch these, scott. I think if you get any kind of hiccup from an outlook or anything, im going to double up on my position micron tuesday, which we discussed today. Fedex. Thats the big one. That should be circled. Thats the most important one, that gives you consumer, gives you business, going to give you and amazon also, amazon, pulling the plug on amazon Constellation Brands friday, no ownership here . No. Users of the product . Maybe lets do final trades what and why you have time. Ank l trades are straight ahead. Thgod they told me that. Weve got one more break. Your daily dashboard from fidelity. A visual snapshot of your investments. Key portfolio events. All in one place. Because when its decision time. You need decision tech. Only from fidelity. You need decision tech. Feel that . Thats the beat of global markets, the rhythm of the world. But to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. All right. Now it is time for final trends. Dr. J, start us off. Gld, from 120 to 131 quickly. Somebody is putting on a big bet it goes through 136 in july. Do you have calls in that a couple weeks ago yep several times. We counted them. 8 of the last 10 trades in this one have been winners, theyre loading the boat again big winners, not just winners. Big winners gdx, yep. Good to see you on the financials, particularly if i look at citigroup, 10 in the last couple weeks, bank america underperformed it. I think bank america gives you opportunity now to start matching citigroup and youre optimistic on banks . Even though rates are low . Everything has been against them theyve gotten nailed in anticipation in my opinion of whats to come i find it hard to believe theyre going to hammer them much more. I like novartis looking for a bit of a place to hide, but numbers are a little messy from outcome spin, but outcome spin is behind them, 18 pe, i think they have a strong pipeline good technology. Good to have you here as well today. Theres no premium in baba. Walmart that stock is ripping up 1. 5 again today. Great weekend. The exchange starts now. Thank you, scott hi, everybody. Heres whats ahead of us. Tensions escalate, ten minutes from striking iran when the president called it off. We have the latest from washington, and why the market seems to be shrugging it off. And a story thats never been told before how the biggest deal in trumps pregnancy involving china hasnt delivered, what it can tell us about current trade talks. Travel industry on edge and deaths in the Dominican Republic continue the industry is starting to see impact we begin with the markets. Dom chu has the numbers. Not on edge for