Track . And a double downgrade for one stock. The Halftime Report begins right now. Welcome, good to have you with us. We have our Investment Committee at the table we begin with the markets, stocks higher following two days of system by jay powell who laid the ground work for a rate cut later this month the attention now turning to earnings which begin on monday i feel like weve got this halo effect from the fed that will last a while you sure do and it is interesting the market is taking a bit of a cyclical shift if you look at what is leading the market so far, it is energy, communication services, technology, consumer discretionary. So the defensive bochbd approximabond approximate is city m proxy mentality has moved away if the expectation is so low, everyone including myself saying, well, okay, here comes earnings it will probably be better than we expect and all the other perceived head winds weve pushed out of the way. It would be remarkable if earnings were not good powells timing of the testimony couldnt come at a better time when you think about it you said yesterday or earlier this week you almost feel like you get a pass on earnings yeah, that is how i feel. First off on china, which is the thing that will determine how the markets end up the year, right now you have a free pass because nobody expects a deal certainly not before the end of the summer, so nobody cares. Nobody is talking about it. So lets not. Thank you jay powell i dont want to just regurgitate what youre saying, but powell has your back and to your comment, joe, i dont think that they can disappoints on earnings because my expectations are is. Heading into it, i love this setup. Give me one reason to sell your point is that the hurdle is so close to the ground that, you know, if you cant jump over that im not going to talk about valuation. Nobody cares i dont care look, there is no reason to sell look at the price action this week we keep setting these subtle sort of small little new highs that will draw buyers in, people will see the headlines s p 3,000, new high. 27,000 on the dow. It does have an effect so right now it is not about the fundamentals the fundamentals support you, but the Market Dynamics move us higher so bank of America Today says fed trumps everything. That is the crux of their big note on course for the best year since 90 is wall street, fed trumps all they are looking for an overshoot in credit and equity prices in the coming months. So i think make sense . Do you feel like you have this unabated i think that earnings are really, really important and i think that joe brings up an interesting point it would be interesting if they disappointed but i dont think that they will my First Company that reports next week is ibm all i want is for them not to screw up im not looking for a lot of growth i want reiteration of earnings but for me so dont knock me out of the park right . Just dont upset me so bad that i feel terrible. But im dependent on the companies in the portfolio to not screw up and in terms of valuation, i actually think that maybe sometime this quarter valuation does become more meaningful. I wrote my quarterly letter to clients and that is what i talked about if we dont have big earnings growth, well need something to start to support the market. So i wouldnt be surprised if that conversation starts to come back a quick comment on valuation because there are overpriced portions of the market there are still wide swathes of the market that are undervalued. And i picked up some stocks this morning. Nokia, i had to sell qualcomm a few weeks ago when the ftc verdict came against them. But i want more exposure to 5g i look at nokia and it reminds me about Cisco Systems about six years ago. The stock had languished but then set up for the multiyear high pretty bullish scenario of how you are viewing the market ppi a little higher than expected, following a cpi a little higher than expected. Stock prices sticking higher and you are more bullish i am more bullish because of the inflation numbers. We have a fed that is basically afraid to misstep again. So they committed or the market committed for about them to a cut in july. So that is definitely happening. So ive got Interest Rates coming down, ive got inflation picking up that is great for the market it is panacea for the market so earnings, today i sit here as a victim of earnings disappointment and well talk about that later so joes point, you cant be so sanguine that you wont get disappointed earnings. Broadly i dont think that you do, but there are definitely land mines out there and they come in the highly valued or high value ratio equities. What about the notion of what bank of america says about not the fed trumping all, because i think most investors or the majority at least i think it is fair to say feel that way. Right now the fed just cleared the run way for takeoff. The question is how high do you fly. And it is the overshoot notion, what we talked yesterday about not necessarily in this feeling of euphoria now, but this blowoff top that the fed clears you to perhaps enter into. Yes nd i and im concerned about it because i didnt expect this to be a rate cutting cycle. I thought it was one and done. And that has changed this week from the communication that were getting. You heard evans talking about it today as well. So were now looking at a rate cutting cycle and if that will happen, yes, you could build that type of momentum and euphoria into the market the old playbook, dont fight it, just stay with it. You can get an s p multiple 22, 24 times weve been there before multiple periods. That sounds crazy though saying that given where earnings are. Im not saying it will happen, but the notion that you are even saying that to me underscores exactly the power of powell. It is because of where earnings are so the way to think of it is cyclical stocks, right, where commodity stocks you buy them or a micron, you buy that when the multiple is the highest because you are buying troughed earnings when the multiple contracts is when you start to sell so youve got this free pass with the caveat of what you spoke about, joe, on earnings. I just dont think that there will be broad major disappointments. Lets find out what a big time market watcher thinks jeremy see ghgal is joining us n the phone. Good to have you back. So youve heard the commentary i hope what do you think happens to stocks now that powell said what he did over the last couple days yeah, i like it i look to see 50 but it doesnt look like 50 now with some of the firm inflation readings. I think we should have a Feds Fund Rate around 170 im uncomfortable when the ten year is so much below fed funds. But the direction is right, the momentum is there. I heard a mention of 17 times earnings actually when i look at earnings, i put a conservative spin on it i think Fourth Quarter earnings estimates on s p are too high. I think we are really 19 now but could we go to 20, 22 . Yeah but that puts you in a kind of a precarious situation i feel better if transportations were hitting highs id feel better if russell 2000 which is still 10 below last years high. But you nonetheless, low inflation is definitely good if the market and might slow the fed a little bit, but, yeah, the short term trends and technicals look good to me. I say overshoot possibility what do you say . I think possible. We get optimistic and then too optimistic and then we get a correction from there. So i may tell you fair market value is a value, but we could be 10, 15 above it before we get there at the end but i think fair market value does given us another 5 , 6 this year, but we may go up 10 12 before we sell off a bit i think some of the guidance might be challenged as we get it in the next two weeks. I think that we will meet second quarter. But second half i think might be a bit administmore cautious. What about the notion that earnings get a pass because of powell low Interest Rates are great. I mean, it does mean higher p. E. Ive often said i think 18 to 20 is maybe the new normal, not 15 anymore. When you have Interest Rates near zero and so low, i mean that should mean higher capitalization rates both from the theory and empirical work. So 18 to 20, if that is the new normal, 19 is where we are now on a conservative basis, were not overvalued professor, i was a student of your 22 years ago and there are a few things you taught me one of you as aged better and it is not us professor, one of the things you taught me is thinking about big secular trends of where buying in Financial Assets is going to come from, and back then you were saying look for the middle income class in emerging markets to start buying stocks in that context, thinking about what we hear a lot about today, modern monetary theory which is basically well run the Printing Presses and what you are talking about with low Interest Rates which we all see as well, is that possibly what gives this expansion and this bull market its next big leg is the idea that the government is going to spend because deficits dont matter, Interest Rates dont matter, and that that spending will cycle through in economic expansion and continued bull market . Well, you know, you always have to be cautious to say deficits dont matter. But the truth is, the reality is there is an insatiable appetite for treasuries around the world. A trillion treasuries every year and they get snatched up right away actually u. S. Treasuries are the goto hedge asset, you know, against financial risk and everything else. If the dollar is down 1,000 points, treasuries are up three. People like that and that will keep those Interest Rates low on those treasuries doesnt mean that we can run unlimited deficits down the road, but it means that there is an enormous appetite right now that i dont see waning. So i think youre right, i think that we will be in a low Interest Rate world for many years to come on so you say 5 to 6 more maybe this year. You could get a combined 10 to 12 moreoff all i thi overall you can get that with the defensive sectors or do you need money out of those areas and going into more cyclical areas of the market . With lower Interest Rates, we might see a return to more value stocks, more dividend stocks you know, people are hungry for yields you want to keep on squeezing into the high yield, you know, potentially risky investments when there is a lot of dividends, stocks paying 3 , 4 . With growth and potential, you know, inflation hedges built in. I think that rotation, people say yeah, i need that income, i dont want to stretch in the mixed income model, id rather get the difference ends. And a lot of those are defensive issues, what we call the traditional values so we havent seen that rotation yet. Im sort of surprised once the pivot powells pivot in december, i thought we might begin to see is it but second half of this year, really we might begin to see that flow. Professor, this is joe. I heard you mention that you thought we needed a 50 basis point cut at the beginning of your comments. There is a lot of commentary this week whether they should cut 25 basis points at all what would you tell your students if they were to ask the question with markets at all time highs, access to capital, a tight labor market, why would the Federal Reserve even embark upon cutting rates well, youre making a very good case for the fundamental, but i think the biggest factor here is we really did see an inversion in that yield curve. Ive gone through history, it is one of the most single reliable indicators of a recession is an inversion. And i worry about that it doesnt make sense to me the funds rate at 2. 40 when inflation is below 2. 40, when the ten year is at 2 at the present time 2. 10, the dividend yield it is too high to have the risk asset that high. So i just feel comfortable when that short rate is below, that is a better indicator and prognosticator for growth going forward. Professor, always good to connect especially in times line these. Well talk to you again soon so jenny, we know that manufacturing is a weak spot powell talked about that commentary on this desk and the data has really backed up the consumer remains strong. Bank of america again today, busy with the notes. Consumer not yet phased. You have to have the consumer hold up for this whole thing to work, dont you . The consumer is so strong, i dont see how the consumer didnt hold up at least for the next several years youve got gas prices are low, 30 year mortgage is low, unemployment is about 3. 6 , wage growth is 3 , retail sales at 3. 2 , everything points to a strong consumer. And i think unless hiring starts to freeze up and that would probably be affected by Business Sentiment more than anything, i dont see how the consumer starts to fade i agree with that i thought about it last night. We talked briefly about jim cramer with watch i was going to bring that up. Target, costco, home depot. Candidly that is a great observation of where the consumer is and those five equity names that are oriented toward the consumer, they are all telling you a good favorable story. Keep buying those names walmart, amazon, target, costco, home depot first earnings come out from citigroup and jpmorgan and one place where there is variability is Credit Card Debt and how overall loan values are trending im with you guys, i think that im note worried i but i think that is one insight. You get that information that comes out all the information. You get the verbiage from these guys though. You get them talking about it. I dont think that big consumer franchises, you know that is not what they are talking about. They are talking about Business Loan growth. My point is on the subject of the consumer, monday and tuesday, you will have the banks giving you some insight into it. Okay. If you say just kidding so best way to play this, and we mentioned some of the bank names, there are a couple good lists out today from firms on the kind of stocks that you should be in Credit Suisse has five new outperforms. Clorox, chipotle, ford, Diamond Back Energy and United Therapeutics how about that ford is breaking out. I bought ford last summer about there time and i loved the volkswagen news this morning because what that said to me, hey, wake up, ford 457b9d behas the cutting edge of technology and meanwhile the thing is dirt cheap. 5 pp 5. 7 yield and there are pockets of really cheap companies out there despite the Broader Market multiple low Interest Rates help ford and gm a lot helps housing. Another reason to be positive. But what i really liked about that list is how it crossed a lot of sectors there and i think that you really can look in any sector and i mentioned nokia before i think defense is an area where you can see bipartisan agreement that we need to spend more where is it going to be spent . Satellites, missiles but the bigger point is you can look across all sectors and find value. What i like about that list, nothing. I dont find anything attractive youre a yield player, i get it. Chipotle . Just too high shake shack so they go five new number one top outperformers and then they say 11 added to the top outperform ideas in which the names that i read are on that list with the addition of williams and shake shack and some others. No shake shack for you shake hack shack is reasonab. Im not there. I think takes tough space to play in. Amazon is, you know that is a consumer play. Why look elsewhere i know the valuation is ridiculous, but it has always been ridiculous. This will be the point in time where valuation comes back down to earth so bear with me one second because they have names that they have taken off their outperforms list and one of them our meg tirrell has a market flash on. Well discuss it on the back side Johnson Johnson stock is plunging on a report that the department of justice has opened a criminal investigation into whether Johnson Johnson lied to the public about cancer risks for hitt tal kotahittalcom prods a grand jury is examining documents about what Company Officials knew of course Johnson Johnson is dealing with thousands of lawsuits about whether thetal com powder concerned certain forms of cancer. The stock down almost 5 today, the most since december when a big investigation from reuters came out hit the stock about 10 . Looking at these claims that johnson and johnson made going back to the 60s and 70s. And remember, this is not the only front on which Johnson Johnson is fighting legal battles. Also about the opoid epidemic. So a lot of legal risks they are battling so i said it comes off the list along with merck and pfizer interesting. Underperformers going forward. Here is what i like about the list it is a referendum on the consumer chipotle, collorox and ford goig on, it is a statement on the consumer the pfizer and merck, they have a problem and that is President Trump wants to come out with an executive order stating that the u. S. Will get most favored nation pricing in any drug and it has hurt the sector i see the value there. I dont think that you can buy these names in front of an imminent executive order he said that he will do this that is troubling. I think that that is what is hurting though names another interesting list is from citi, they have their top Global Internet names. Alphabet, baba, 10 crept lets take those first baba and ten cent are the two that i would go with i think a lot of people are dismissing in the second half of this year. If you are going to get a lower u. S. Dollar, supportive Global Central Bank easing, i think that you should see some healing in emerging are market assets. Not particular the emerging market economies, but the assets themselves i think baba and tencent plays favorably. I own baba and alphabet not that there is anything wrong with the company, even though it is somewhat undersiege by regulators, but just on the s p in that case, baba will have a listing in hong kong the amount of capital that will come will be tremendous. And that will drive the stock higher so their best sell idea sorry, jim im having a great day. What are you doing to me roku. Im not in it why would that hurt me youve urged people to get back into it when it falls to a certain level. So youre absolutely right, and you know what last week, sorry you werent here, Tyler Mathison was and we talked about it and ill repeat what i said there. You cant value this stock i mean i get it, the Revenue Growth is tremendous, but there is no valuation. I mean last friday somebody came out with could you value it when you were in it no. I admitted this to you youre calling me out on it, i admitted to you. I shouldnt have smoked that drug but i didnt inhale, okay some of the criticisms that you are levying now as an outsider are the ones that you ignored as an insider. And so if im going to do that, the price chat i buy it better be really good. What is it trading at, 15 times earnings how do i justify owning it i just cant this is quintessentially a momentum stock right now for the last month, month and a half, it has been stuck in this 95 to 105 range. Before anybody buys or sells it, you have to have a trend determined and right now there is no trend in it. Can we play name that price no, because then you hold me to it and it is really im trying to be both clear and helpful. Wait for a trend you mean i might actually hold you to something you say . All right its friday. Look, wait for a trend im not in it. Im voting with my feet. So for the last four minutes weve had a conversation about favorable stocks, stocks disappearing are we talking about financials anymore . Do they exist . Havent gotten there yet. You want to ruin it now or wait for when we are supposed to do it i always follow your lead what would you like to do . I want to go to break because here is what else is coming up next up, a double downgrade for one of steve wis biggest positions. And plus Pete Najarian is tracking unusual being a be tif activity in the Options Market and we want to hear from you p send us your yeses cnbc. Com halftime or tweet us using ask halftime. The Halftime Report is back in the Halftime Report is back in tw wanted to get away who used expedia to book the Vacation Rental which led to the discovery that sometimes a little down time if respect expedia. Everything you need to go. You might or joints. Hing for your heart. But do you take something for your brain. With an ingredient originally discovered in jellyfish, prevagen has been shown in Clinical Trials to improve shortterm memory. Prevagen. Healthier brain. Better life. You know what my favorite part of the Halftime Report is is th when you send in your questions. So please send us a question and well answer it on air i cant wait thanks go to cnbc. Com halftime or use ask halftime. Welcome back im sue herera here is your cnbc news update. Louisiana bracing for Tropical Storm barry which is expected to make landfall early tomorrow as a hurricane. The rain is the big problem with about 20 inches expected in some areas. The u. S. Coast gallon expects to close the port of new orleans by midday officially stopping all commercial shipping ahead of the storms arrival. A 13yearold suicide bomber blew himself up at a wedding in eastern afghanistan killing five people and injuring 11 more. Among those killed was a commander of a pro government militia who had organized that wedding. Irans state tv reporting irans revolutionary guard has targeted kurdish militants in northern iran using missiles and cannons. It said many were killed or injured during the attack which has been ongoing over the last two days and bradley with a hole in one on the 17th hole it happens that hole awards a new car for that feat. Dredge won a brand new bmw for his troubles very cool. That is the news update. Joe, you wanted financials, you got financials because our call of the day is Morgan Stanley upgraded to a buy at citi. Price target 52 bucks, 14 up side from here what have you got. I like Morgan Stanley ive owned it in the past, but im going Goldman Sachs. I think they are diversifying much better. I think the alpha Generation Opportunity is in Goldman Sachs over Morgan Stanley. I agree. Both quality companies, but goldman, they are making modern day moves out of their business model. I think David Solomon is doing a phenomenal job so far. And it is exciting nobody wants Morgan Stanley nothing wrong with it he said we like it the outperformance, again, David Solomon is doing a phenomenal job. He is bringing energy in to the company. Things like the diversification story, the focus on fintech. And there is also apple, you know but also the removal of a negative which is its been over a year since that scandal really hit and now the market yoefrp e overreactsed in 2 018 and now goldman is powering through it so nobody is owning Morgan Stanley . There is nothing wrong with it, but we like goldman better is that not okay no, it is, but no one wants to buy Morgan Stanley . I own visa. Im not telling you you have to own morgan be stanley, but everybody says Goldman Sachs quality company, Quality Management i think Goldman Sachs is doinget everybody says Goldman Sachs quality company, Quality Management i think Goldman Sachs is doing everybody says Goldman Sachs quality company, Quality Management i think Goldman Sachs is doingst everybody says Goldman Sachs quality company, Quality Management i think Goldman Sachs is doing other dimension stuff that is more creative. So going into earnings season for the banks, Goldman Sachs is the top pick, is that what youre telling me . Ill give you that. Ive got citi im playing for something north of 75 on citi. I also have American Express jpmorgan i own as well i still think Morgan Stanley is going to do okay look, all of those names you mentioned march to the beat of individual drums the problem about the Morgan Stanley call is it looks a lot like Goldman Sachs they look a lot alike in what they do. So when you bring one up, immediately the other name comes to your mind and you think about which one do you want to own yes, you could own both. I dont like to. I like to have more concentrated bets okay. Jenny . I dont own any no banks wow there are growing yields there. They are not big enough if we had owned anything, in our growth port 208 i dont we own wells fargo and wish that we had jpmorgan instead it is discipline growth, so all right throw the calendar up there. Netflix, microsoft next week as well netflix i think is a big one. I think that is going to be important in terms of the faangs and the strong momentum trade. 3. 85 i think is what everyone is looking for. And i think microsoft is actually bigger. There is no controversy around microsoft. There is controversy around netflix. And if we came out and said netflix has shown a little weakness in subscriber growth because they are going to hulu or gearing up for disney or h bchlgts democratic bbo, we wouldnt be surprised. I like the jpmorgan call. Coming up, bulls are betting that the banks are l. Rally. Petes that that trade coming up and it reall y shows. With all that usaa offers why go with anybody else . We know 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. It was funny because when we would call another insurance company, hey would say oh we cant beat usaa were the webber family. Were the tenneys e hayles, were the webber family. And were usaa members for life. Get your usaa Auto Insurance quote today. So should the way you bank. Virtual wallet from pnc bank. Just one way pnc is modernizing banking to help make things easier. Pnc bank. Make today the day. Pnc bank. This is mias pulse. With pressure rising, and racing. This is also mias pulse. That her doctor keeps in check, so she can find balance. This is mias pulse, and now its more stable than ever. This is what medicare from Blue Cross Blue Shield does for mia. And with over 80 years of healthcare expertise, imagine what we can do for you. This is the benefit of blue. Welcome back good segue from the banks because pete has unusual activity in two of them reporting next week. He is joining us from minneapolis. Morgan stanley, jpm, is that what were talking about yes, certainly is obviously they are trying to play the earnings. So start with Morgan Stanley buying the july 26 calls, 26 expiring calls, the 45 strike in Morgan Stanley that is just out of the money from where the stock was trading before these hit 3,000 of those were bought, they paid about 75 cents. And i think that they are just looking for the entire cycle we talked about the anticipation of earnings. And you just wonder where that level is of optimism right now and maybe the banks can actually beat something or impress people enough that they can still continue to make a move to the up side. So these 45 calls are pretty interesting. 3,000 of those were bought here is the next interesting thing. Jpmorgan, they bought 3,000 calls there. They went to the july 26 expiring calls as well but they went to the 1116 there. Trading 114. They paid about a dollar for these calls. So 3,000 here, 3,000 there, both of these two financials, Morgan Stanley on the 18th, jpmorgan on the 16th, so clearly earnings are in the target of where they are looking. A i like what were seeing here. I heard a bit of the guys were having sounds like they are getting more bullish on goldman. Yeah, youre right. And goldman has had a great performance. Morgan stanleys been the lagga laggard. So maybe Morgan Stanley can finally start to make a move do you share the view on the desk that it is goldman over Morgan Stanley despite the activity that you see . No, actually i prefer Morgan Stanley to Start Playing catchup now. I think goldman has had a great run. I think that they have done a fantastic job. That stock was having a hard time to get other than 200, fell back a couple different times and a nice move to the up side but Morgan Stanley has lagged and i think maybe, maybe they start to make that catchup this they need to make because Goldman Sachs is well in front of them right now year to date so you have an update on a stock snap, which by the way got upgraded today price target to 18 yeah, well, we talked about this on several different occasions over the last month or so weve had seven different times where weve seen unusual activity come in here and we started when the stock was trading 11 1 2 and now you can see the stock actually opened over 16 i know what were hearing in terms of this upgrade today and ive seen different price targets being raised as well over the last couple days. Im completely out we had those july 14 calls those are trading for 1. 10. Today they hit 2 bpts 2. 25. Im out. I think a lot of what people are looking at now is old news they have gone up from 11 1 2 to 16. And that was before all of these guys decided, oh, you know what, we can compete i think snap will be the next one. I think that they will be able to get more ads on their space i think that they are wrong about that by the way. I think that the problem is the millennials and younger folks that people are after from an ad dollar perspective, the problem is they dont like these ads they didnt want to see these ads. And if they are able to slip in more and more ads, i think that well see snap start to slip back a little bit in terms of the stock itself good stuff. Enjoy the weekend. So as part of this call on snap, goldman also goes by on stitch fix what do you think of that . I like the product. I think this is the way people will be buying clothes going forward. I havent done a deep dive into the name, but im going to im not sure if the price is right, but i think that the demand is certainly there. Through a subscription business that is pretty much what this is it is a way that i would buy clothes. I would. Some would say hey youre opening it up to i know. I can see in my peripheral vision the sharks circling it is like you went out into the open with a big bag of chum and said do get me can we get a close j up on j jim . I like his outfit poor jim like it or not, i could see it i put this on thinking that scott will say youre bright and cheery id have a massive short position in stitch fix well leave it there. Happy birthday. Wanted to give the show a little pep. All right. Coming up, well answer your questions just two minutes away. You still have time to reach us. Driverless cars. All ground personnel. Or trips to mars. 4. 95. Delivery drones or the latest phones. 4. 95. No matter what you trade, at fidelity its just 4. 95 per online u. S. Equity trade. Were back lets answer some of your y questions. Jen jenny, from ken. Western digital. I think it depends on when you bought it. If you bought it a month ago, it was at 37, so it is up 50 in a month. When i bought it in january at 37, it was purely a yield play. So i need to adjust my conversation and say that were down from 5 yield to 3. 6, now it is a growth play. Supply and demand is coming into balance. I think it could have good earnings so there could be growth are im not selling it and joe from mo tapest tapestry, five year low. Let it come down more . We have a really strong consumer, the consumer is as strong as it possibly can be and you could ski down the slope of this chart over the last year the business is obviously in secular decline, they will report earnings on august 13th i took a very strong look at this from fundamental capacity and there is no reason to enter this great marketing move renaming it tapestry, but maybe you could make an argument the july 10th low, you buy it against there or the may 31st low but fundamentally, this is in a rough spot jimmy, from richard in South Carolina he says farmer jim, i planted my cbs seeds many moons ago when will they sprout . Knee high by the fourth of july which was last week dont cut them down yet. A long way to go first off in the short term, President Trump has backed offer of changing the rebate pricing model which did affect the price earlier this year. In the longer term, now that they have closed this aetna deal, they have a ton of debt on the balance sheet. They will be paying that down quarter can by quarter with the Free Cash Flow that is generated. So will increase the multiple. Let it grow. And from listening island city, ilmn a double downgrade they go to underperform. So lets put up the stock chart if we can. I guess that is the difference between an analyst and somebody that puts the money to work. I dont have the option of getting upset and having these knee jerk reactions. Most importantly, what do you do now so i bought a little more im not sure if it is the right thing to do or not the company has disappointed in the past my intention was to sell the stock in front of earnings which were due on the 29th of this month. Instead they pronounced. Id say the stock maybe overshot a little on the done siwn side,t they are still the Market Leader in the segment i got greedy so does that concern you because the hedge fund community, mutual fund community, they are all long this name . That is every stock it is not every stock every stock, the hedge funds and this is a favorite name in the sector i bought it when it was a hated name it got up to 3. 80. I dont know why it got there. My intention was sell it i sold some on the way up. Obviously didnt sell enough i think that it will recover like it did the last time. Youve got the bio if it didnt close, maybe another leg down it is ridiculously expensive, but it has always been i thought it was an xwleegs emo sell so you had such a good trip to the sun you decided to my wings melted but here is what came out of that Insider Trading is alive and well i was wondering whether the stock was down 3 yesterday on no news whatsoever, when health care was largely up. Somebody clearly knew that they were going to preannounce it wasnt just happen stance or luck y dont aggressively sell at this point. Treasury yields are on the move stay tune for those trades but first what is coming up on the exchange hi, everybody here is what is coming up from the white house to capitol hill. To the European Union. Big tech European Union were going to talk more about what regulation and higher taxes could mean plus, the markets are all about etf. And thats earnings, trade, and the fed. Well get into what all of that means for your money plus, got your eye on a dream home chances are someone else does too. The return of the bidding was war and how to win one ahead Halftime Report is back right after this that makes things worse. Madh but youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. Tell him were flexible. Dont worry. My dutch is ok. 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I do i do i have a really good feeling about this. Welcome back to the Halftime Report. Im leslie picker. Time for futures now the tenyear yield back above 10. 2 after bottoming out earlier this month record highs after fed chairman Jerome Powell gave rate investors hope that the trade is high lets kick it off with you what is behind these moves to the markets . Is it something about the economy or are they signaling somebody about the economy that the fed is missing i think what it is saying is that the market expects things to be better than the fed does and i think that if you look at the gdp number on the 26th, if that comes in hotter than expected, say it starts with a 2, then i dont know how the fed cuts rates just five days later without saying that the fed has gone from data dependent to data ind dependent to blinder the data, to winging it. And all they care about at that point is doing what they want even if its wildly arrogant, and it says that they have some sort of omniscience that is usually observed for the pope. How do you think the markets respond to that if that is the case i think that the market is telling us something and that it is a little more dovish. The uptrend in prices, the downtrend in yields and the ten year i think has been broken i think its going to be 2. 30 is my target. And youre seeing the same thing in germany as well so im not sure if its a global thing or its domestic, but either way i think theyre headed higher. 2. 30, what needs to happen to get to your target i think all that matters now is time. I think the market is telling us that the fed is more dovish than it should be it could be a risk on, and then you wouldnt need ten years, youre buying risk assets. Or i dont know if you remember inflation. Its something we used to talk about 20, 25 years ago, but if the feds too dovish, maybe well talk about inflation what do you think is the fed in inflation . I think the fed and actually the world is completely misjudging inflation we are looking at it, as jim pointed out, through a model thats 20 or 30 years old. There is so much going on now that makes that sort of model irrelevant all right well, that does it for today thanks scott and jim for more on the markets and for all the latest trades, follow us on twitter and check out our website at futures now scott, back over to you. Thats leslie picker. The nasdaq hitting a new record high final trades saitrght ahead on halftime. See thats funny, i thought you traded options. Im not really a wall street guy. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jjreak it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade the ai i need . Its gotta scale across my business. Starting here, in procurement, helping us find the right suppliers. Then here in logistic, to avoid disruptions here in sales. Even here im talking about ai we can build to work. Here, predicting trends. And here, wherever our data lives and here, working with all our other ai i think were done here. Expect more from ai. Ibm watson. Right now there are too many investors who focus on what the fed will say we need to gauge their disappointment let them make their mistakes an all right. Were back its time for final trades jenny, you got the first one Mgm Growth Properties they own the physical properties where mgm operates so its a reap. No, sorry, yes, it is a reat. No problem. Have a good weekend. Thanks. Steve im going with illumina the price target that the analysts put out there is only 5 lower ive got more than 5 risk in any other day my own so i dont think its a nearterm trade. It could best near term, though. Doubling down, so to speak some. I bought some after the close, i bought it twice this morning. So if i was stupid before, now im a real moron [ laughter ] all right, jim lebenthal, what have you got . A lot of things are breaking out here boeing comes to mind, though because it seems like every weekend for the past three or four weeks, theres been some bad news that the stock just shrugs off, whether its a micro processor needs to be replaced or an order got canceled frankly were at the point with this name where you should start seeing good names. At some point the 737 max gets back in the air. The but the way this stock shrugs off but the headline risk the stock is just blowing past it. Thats the point im trying to make you can cut your exposure. I dont own enough of it, but my waiting for it to come back to 341, i dont think its going to get there. To me its the lost orders. So you lost 50 plane orders yesterday. That was the one im sorry, we got to go. Lets get to joe lulu, you can tweet it out. Great weekend, everybody. The exchange starts now. Thank you, scott hi, everybody. Here is whats ahead of us today. The nasdaq just joined the dow in the s p and hitting a new intraday high this week. We are going to look at whether earnings, trade, or the fed can derail this rally. Markets are also shrugging off what a tough week its been for tech and social media. The tech piling on even mark cuban voices concerns about crypto currency today but saying we should be careful about regulation plus, what illuminas rough session tells us about 23 me today as they go after more than just your dna. And starbucks is turning the