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Right now. Welcome. Our Investment Committee today, jim lebenthal, jon and Pete Najarian, brenda, adam parker is the ceo of triveria Capital Management lp. Much of the focus today on the drop in bond yields. The 30year hitting a record low. Some saying the countdown clock for a recession has started. So, pete, i turn to you and i want you to answer the question i asked at the top where is the best place to invest people want ideas. Sure. And i still think the gold and silver trade is on what were seeing today, scott, some of these individual names are still moving to the up side. Gld, slv have been a smart place to be. If you go back to the end of may. Thats been a great place to be. The slv in the last month up about 10 . Its still playing catch up. Those are more on the conservative side. You think thats the best weve got . Gold and silver and 10 in a month isnt so bad if you annual ize that out i ask, i dont hear tickers i hear gold and silver oh, im excited to talk tickers early, bro lets do it. I still think technology is the place to be. I still think theres all kinds of other places you could be energy today is really what sort of flipped when we saw oil start to move to the up side and see this move in energy, how cheap have we gotten in some of these names look at exxon. I own exxon. Im not happy about it under 70 a share. Those are possibility names that have plenty of room to run to the up side if we hold or even increase a little more in the oil space. Adam parker the former chief strategist, Morgan Stanley if you are posting a note this morning in your former life, whats the headline. I like u. S. Stocks we talk about u. S. Stocks. Is that its a great asset class. This channel probably wouldnt exist if there wasnt a u. S. Stock market not probably. Definitely would not. All of us would be elsewhere. The market trades at 16 times consensus forward estimates for next year. The real number is 17 times. Estimates are too high like they always are as long as you think earnings are growing next year, a dividend yield, a buyback. Not seeing the hubris. Typically you have too much cap ex, too much inventory, too much hiring, too many private planes to nowhere i am just not seeing that kind of corporate excess in the results im looking at i feel like earnings are probably going to grow and to me, 16 1 2 times the real number for next year, seems good versus, what do you have, 1, 1. 5 on a tenyear or Corporate Bonds and other stuff. I dont see why everyone has to always call 17 in the last year a recession. If you are writing that note i asked you, about bet you somewhere high up would be bond yields why are they falling what do you make of that you wouldnt just dismiss that in your note, would you . Ive read the outlook notes from some of the major firms recently from last thanksgiving for this year four hikes from one. Three hikes from another the inflation numbers, the economy. Roughly what people thought and now two or three cuts. Its about peoples vrptation of the fed and Interest Rate environment. Equities if you look from here to there, have been fine and youll look forward and as earnings grow, theyll continue ton a reasonable option. Brenda, that make sense i think were getting a false signal from the bond market because rates are so low globally negative across much of the developed world outside of the United States, but its a little bit of a dangerous game. Because i think people are forgetting that inflation will materialize at some point. In the United States, we have seen just recently there was some signs inflation is exceeding estimates. We saw some impact from tariffs. Once we get into september, thats going to be more meaningful and gets the yield curve moving the other direction. It wont take much a 30year bond just with a 50 basis point move higher, a 15 loss in that position. So i think people are forgetting that there is Interest Rate risk in smo of the longer Duration Bonds because there arent other alternatives with a yield. Yield curve inversion doesnt matter look, i think we have to he basically made the case it doesnt. I think wed need another couple thousand years and several more examples of it for me to be super confident its a bit of a chicken and toeg see whats causing it. You can look back several times it has happened its been a problem. The economy is clearly slowing if you look at major metrics thats not really a debate if you look across a host of metrics. Will corporate earnings in the u. S. Grow next year versus this year if they do, which i think is still the base case, i think u. S. Equities what if they barely grow . If they barely grow, its still okay if they start declining, then youve got a problem and a reset. Weve had, what, 10, 11 times the s p has been down 10 or more this cycle and what do you guys say on your channel buy that thing every time . Buy the dip its your channel, too. Its your channel, too, man, all right . Youre part of us. Im just saying, i dont see a reason to fear earnings are going to collapse outside of a huge economic slowdown that is no long eer to me isnt quit in evidence. Much ado about nothing . Its not much ado about nothing. Maybe well get a recession but i think the more important question, and you asked at the top of the show is what do you do its not that helpful to say we might get a recession 6 to 9 months out the more important thing is what has the stock market already reacted to what has it overreacted to this has been the most anticipated recession ive ever seen and theres large sectors of this economy already pricing it in. Look at whats going on in financials we dont even have to name names. You can look at the top of the xlf and its all in a bear market look at health care. Cvs these things are 20 off their high i think you mentioned energy and exxonmobil we can go around the horn. Royal dutch shell. Marathon petroleum some of these are selling below book value whats the point here . St the stock market has anticipated this recession more than anything so lets say we dont get the recession and the bond market is wrong. Wouldnt i want to be in these things already sold off 20 in anticipation of an event thats not going to come or if it does, its predisastered i think of the movie when the plane runs into the house. He says well buy it why . Because its been predisastered. Doc, how do you see it . I think weve been driven down by the rates overseas, skots. And that it is different this time because its not the u. S. Market thats screaming this its the rest of it pulling us down i think that just as rick reeter said yesterday when he talked about the tenyear being the market and the twoyear being the fed he said youve got to hit that twoyear and hit it hard they havent theyve jawboned a little here and there. Havent come out with strong Forward Guidance saying were going to drive this twoyear down to zero or Something Like that they havent said that instead theyve dribbled out a little 25 basispoint cut july 31st theyre probably going to dribble out another in september. Its the wrong move. Cash carry said in his op ed, we should be using Forward Guidance a lot more than we are right now. Theyre silent after jackson hole they should not be silent. Talking like every day . No, i want them to say in this september meeting there is a better chance than you guys are pricing in that well make a bigger move than youre pricing in right now he suggested they would like them to go 50. Yes you think they cut rates in september . I think they you play the scenario in which they dont have to they dont have to for economic reasons they want to if you want to flip that yield curve back around are we talking about whether they should or what we think theyre going to do . I dont think those are the same things and report is been for a long time. What are they going to do it seems like the experts think 25 basis points. To be honest, the experts thought they were going to raise 100 a year ago that was my point earlier. I dont my process at my firm, i dont really care. Im going to go to the right parts of the market if you get a bull flattener, im going to find subcomponents of the market i want to gross or net up. You dont want an environment where the market believes the fed, theres already enough criticism of what the fed has said and done that theres a great belief the fed is so far behind the curve they just missed the whole story im not big for criticizing the fed. I always thought it was interesting that even with bernanke, and those guys, looking at a lot of information and all these 25yearold kids on wall street with two years of experience are saying this guy is an idiot. Im not so sure theyve made all these mistakes maybe theyre a little behind. The argument that rates are low everywhere when you focus on the u. S. You have to look at whats going to cause the earnings to collapse earnings are flat year over year trade war, more tariffs sure could be september 1st right around the corner it seemed like an apocalypse that day the mark set 5 off its alltime high he tweeted he got some calls and then didnt get the call you know, i just dont know how to handicap that stuff in the short term if you follow what the companies are doorks iting, its not as gs six months ago if thats my base case, i think im going to get paid in u. S. Equities over what if its getting worse faster than you think by chaotic nature of everything then in that case, the market will go lower. Ime not all the way where jim is where its priced in sectors maybe in certain parts. But i would say if were going to get an earnings decline of 10 or more, the stock market is going lower. Thats clear to me but i just dont think you want to position yourself for that right now. Thats wholly different than what i think some of the other guys are saying. Interesting move today. You are up almost 200 on the dow at a time where were talking about the 30year at a record low. And started down 100 and then to flip around the way we do we talk about volatility all the time volatility continues to be volatile look at where the vix is today look at the range already. Up well over 21. Now were back into the lower 19s. Scott, the movement that we are getting on a daily basis is extraordinary to be honest were all looking for opportunities out there on some of these selloffs earlier today, there were probably some great opportunities when were down 100 points if you had any kind of a vision that we get this kind of a flip. You have to remember, too, volumes are excruciatingly bad right now. And they have been i brought that up for the last week or so been really, really bad. Really low which is understandable. This is the end of august, end of summer. All the rest of that thrown in together folks are actually comforted by the fact that this market is kind of hovering around where it is give or take, call it flat over the last couple of theres also a reasonable explanation to your question about why with bond yields going down the market is up today. This economy, the u. S. Economy is hanging consumer forget cap ex. Its not happening u. S. Consumer is directly benefiting from lower Interest Rates. Now mba Mortgage Applications werent great this week but so big last week that thats an easy explanation for why they werent so great this week car loans. Mortgage refinancing all of these are coming through and theyll help the consumer consume more which again is the peg on which this economy rests its hat. When you look at the volumes that pete just cited, andgriffe listening. You look at tiffanys today. The stock opened up 3 or 4 as soon as those earnings hit the tape thats up 3 or 4 about 3, 3. 40. Flips when the ceo comes on and says, yeah, even though things were great in china, hong kong was a real problem we missed at least six full days were going to miss more and the thing flips from being up 3 or 4 to down 4 , and then they catch a bunch of shorts right there to petes point about volumes, scott, and where youre going to get it. All those 11 or 12 short interests came scrambling in trying to cover and they drove it up. And you look at where tiffany is right now. Its like an ekg thats because of that lack of volume dont chase that. Four years ago when china devalued and set up a sixmonth period in the markets that were terrible i remember tiffanys then had one earnings report. I think right around this time that did well. And then it slid for the rest of the time china is very important to tiffanys. You cant underestimate that. They were good in china and my point was then they cited the events in hong kong and how much its affected their sales stores, people unable to get there and all the rest and then when everybody wanted to come back in and say im going to buy back some of those nice shorts ive got on, there was nothing offered. Dont chase the shorts. Lets get more on the state of the markets jim oneil is the former chairman of Goldman Sachs Asset Management former commercial secretary to the treasury in britain and leads the british think tank chatham house. Welcome back great to have your voice on our program today. Thanks for having me on what do you think about the current environment . I listened to that discussion you guys were just having. I guess the strongest thing to be said for the market, not that i follow it as close as i once did, is that theres a lot of things to worry about. That is for sure ive generally been somebody with a more optimistic air but theres a lot of things out the there, especially outside the states, but in my opinion, or inside the states than i often hear people in the u. S. Talk about. Partly because of this very strange character that you have as your president. Well get to our president in a moment let me ask you about bond yields what is the message in the continued drop in yields we have one of our panelists today suggesting oos sending a false signal just simply because of the fact that yields are negative what do you see . So i dont know whether its its sending a very powerful signal, but what is intrig intriguing, and i heard one of your guests saying that. Why should that signal be false . I mean, it could be and if we get massive fiscal stimulus in germany and more in china and trump manages to come up with more fiscal stimulus, all of that could mean that bond yields suddenly rise sharply in many places but the fact that youve got such low yields in the u. S youve got an inverted curve youve got amazingly negative yields in so many growing parts of the rest of the world, its kind of pretty scary in my view because the markets appear to be saying that they dont see an end to the deflationary crashes and something close to a recession in many parts of the world. You know, of course it could be false, but thats the message. Do you worry about a recession in the United States maybe sooner than some people think . I do. I think if you look at the areas of weakness of the u. S. Economy that essentially business spending and exports, they have no chance of improving until trump gets over his very erratic love affair with trade tariffs, which doesnt look like its happening any time soon. Or you guys get over your love affair with trump and the econo economys strength depends on consumption which is fine unless financial conditions tighten unexpected lie wh eedly when a f indebted consumers cant keep up the consumption theyre doing. How do you see the trade war playing out . Its what ive said starts to show up more in the u. S. Domestic data. And im not sure how easy this would be for trump and his colleagues are on this approach but they seem to flip flop a lot on other things. I think given that 2020 is an Election Year and we all know historically, is the economy stupid, he would have to change his whole strategy, and somehow come to a conclusion that trying to pursue tariffs with currently china but no doubt the other countries, is it likely to benefit the u. S. And if he did that and there was some confidence that it would going to be a persistent change, i think there would be an enormous relief around the world and there would be a big recovery in global trade and wed start to see a pickup in u. S. Investments and exports without that, the u. S. Economy is increasingly riskily dependent on the consumer. Its like in some ways, its like 2008. Therein lies the issue with the fed. Is the fed has to game this whole thing out, worried about a more dramatic slowdown in the u. S. Against a back drop that seems to be good now if you get any development or Movement Like you just suggested in trade, the picture can brighten quicker than people expect if you are jay powell, what do you do in this environment make sure ive got some good sleeping tablets, i think. You know, it gets tricky and ive seen reference the last 24 hours to the article that my old colleague bill dudley wrote. I think bill is right on this. To be essentially responding to structural bad policies from the government is in itself making it trickier. But that said, i quickly turn to supporting jay powell because they have a mandate from congress which links to growth and inflation. If the economy is weakening and inflation softening, then the fed has to respond but if i were in his shoes, i would highlight that perhaps markets should have somehow tried to put in more optionality to what the outlook may be in the next 12 to 24 months because i do think the current pricing of the euro dollar futures could turn out to be very wrong. But that would have to be dependent on trump abandoning this almost kamikaze strategy that hes embarked on. You mentioned the dudley op ed which has gotten a lot of talk over the last 24 hours. Its not exactly the feds job to decide which policies it likes and which ones it doesnt, and which it should react to and which it shouldnt. I agree with that i agree with how you stated it suddenly i published something through project syndicate about a fortnight ago which is tangential it relates to aspects of financial conditions you know, the trump strategy appears to be hugely dependent on an easing in the Interest Rate part of monetary conditions, both short rates and bond yields. And that, of course, the fed zould have to do if the economy is slowing, and thats essentially right. But in terms of it really helping the u. S. Economy, the theme i increasingly suspect is the u. S. Economy is becoming asymmetrically dependent on financial conditions a little bit more easing in the domestic Interest Rate part of it might give some support to the economy, but whenever financial conditions tighten, whichever form of tightening they are and, god forbid, if it were through higher bond yields and short rate, the u. S. Economy would be extremely sensitive to that and i could imagine fed policymakers probably think the same and probably very worried about it but youre right at the end of the day, they are what they are, and the democratically mandated by congress if some independence so they have to respond to whats there. Jon najarian has a question for you. Great to have you on. Thank you, sir quick question regarding the observations youre making they sound fairly pessimistic. Are you putting your mouth on where any of those are or are you just publishing . Well, i my investments are all done in a trust which is managed on my behalf so put it like this. If i were in charge completely of it, id make sure to have quite a bit of cash. I think, you know, against that, i think for i guess what i really suspect we are coming to the end of is the broad mass simplistic moves of so many markets together, and i would imagine for sector and stock pickers its probably going to get more interesting but the easy simplistic ride of low vol related trades is kind of over. And in so far as i can give guidance to my trust which i do, thats the kind of guidance i get. Let me ask you lastly, before i let you run, brexit. How concerned should we be about what may take place in the uk . If you could have any confidence about what todays outlook for brexit will be in a weeks time, then it would be easier but, you know, parliament is just about to come back in the uk after a summer recess and i think even though we have a new Prime Minister, i suspect were going to go through the whole complex that we did with many months with theresa may and its not easy to me what is going to happen. Clearly we have a Prime Minister thats very loudly making it clear that he intends to take it out on the 31st with or without the deal but i suspect were going to see in the next week that parliament is going to make that very difficult for him to do. But in the event of the uk leaving on the 31st of october with no deal, that would definitely be bad for the uk, and i think it would add a further element of weakness to obvious places in europe ireland and germany in particular, on top of a european economy which has weakened sharply in recent weeks, both for domestic reasons in some places but also linked to the big slowdown going on in china im assuming that youve seen the news about parliament being suspended in september as well i want to make sure youre seen that yes, yeah, of course i have but parliament has a week starting early next week to try and make life very difficult for boris before parliament is suspended. Right now, all those that want to take over parliamentary business, which is what wed all agreed just today will be accelerating their plans to do that next week so there may well be some legal thing theyve put to the table next week which would make it very difficult for johnson to do what he wants, even if the only thing i would guarantee for you is what appears to be the light path on any one day in the next week wont seem the same the following day the only guarantee is there is no guarantee these days who knows, just about anything jim, great to talk to you today. Thanks for having me on well take a quick break lots to discuss on the other side heres what else is coming up. Feeling fly. Why Deutsche Bank says buy jetblue on the back of its doubledigit drop in the past month. Its our call of the day plus, the desk is ready to answer your questions. You can reach us on cnbc. Com halftime. Or tweet us halftimereport using askhalftime the alimhfte report with scott wapner and the Investment Committee is back in two minutes. Mmm. Good. So ive spent my life developing technology to help the visually impaired. We are so good. We built a guide that uses ibm watson. To help the blind. It is already working in cities like tokyo. My dream is to help millions more people like me. Welcome back theres your market picture at just about 12 30 on the east coast. Dow up nearly 200. S p and nasdaq russell is the outperformer. All this on a day where theres focus on bonds and yields. The 30year hitting a record low today and nonetheless at this moment, stocks are higher. Lets go to Kayla Tausche with a news alert on the trade war. See if maybe stocks are still higher when kayla is done. Just days before this new set of tariffs kicks in, business groups from a wide variety of industries are calling on President Trump to delay them. In a letter sent today, 161 Industry Associations ranging from the blue chip u. S. China Business council to those exporting like greeting cards, lobster. They say china is still some place they have to do business, leaving there is unrealistic and there will still be an Economic Impact even with some of the tariffs delayed until december the coalition notes 112 billion in goods hit with new tariffs includes 92 of all apparel and half of all footwear we should note, though, these business groups pleaded with the administration in may. There were tariffs that did go into effect on june 1st and then a truce after that a u. S. Trade representative has already submitted a file with the federal register to make this 15 tariff effective for goods that leave china september 1st. So well see whether this letter has any sort of impact on reversing that scott . Okay. Kayla, thank you back to jim oneil i think projecting what a lot of people are feeling uncertainty. Elevated risk. And not really with a lot of conviction on what to do about it if pressed. I totally agree and to your point and were talking about it on the desk i brought up gold and silver because you said, well, what is something you can be in. What is working. That has been working. Continues to work on up and down days thats the surprising part i think the most surprising thing we heard from jim oneill and we were all talking about this is just the idea that the comparison to 2008 seems like a very, very big stretch and that was the most concerning thing. We all understand theres uncertainty out there and the trade war is going to be something thats going to be extremely difficult if we ever are able to lets be clear. He was not making an apples to apples comparison but even using that as a kind of comparison i just dont see that right now in the cards for where we are in terms of our economy adam parker yeah, i agree with that i think comparisons to 08 are reckless i think also if you kind of take a step back, i can remember at least eight or nine times in the last ten years where it felt at least this negative about something in the Global Economy whether it was summer of 15 february 16, the oil scare. We didnt have those some of those other instances lets say the summer of 15 that was all about china big worries about a china slowdown right decurrency. Here we have the trade war and what some perceive to be selfinflicted wounds on the u. S. Economy which is and has been pretty darn good. And the risk associated with policy that could have, as some say, asymmetric or negative backdrop to it theres a difference, dont you think . There is. And the trade war is real and can continue to escalate and get worse. Each time you go through whats happened in the past, every single one of those things had a slew of people who were articulating very negative stories of what could happen to the u. S. Economy and the earnings profile every time if you go back, the italy bond scare. We can go through a whole list of them and every time with some six, ninemonth perspective. The Big Tech Companies Health Care Industry they all collectively were able to grow their earnings and make the stock market in the u. S. Superior investment to basically Everything Else over a longer time frame i dont think its different this time. Clearly if we continue to make things worse and worse with china, it could be the case. I just dont think i should position for it now on the chance that you have a feeling were making it better and better . I dont think anybody would argue that the kneconomy is worse across multiple metrics do i buy and hold a 1. 5 yielding instrument or guarantee myself a loss on 16 trillion elsewhere or do i take a shot at companies that can grow their earnings that trade at 16, 17 times earnings and dont have massive exposure and theres plenty of those securities out there. Brenda, youre on the hunt for them this time around is different because there is more uncertainty. We have two countries. China and the United States where everybody has thought for the last year or so that, you know, an agreement would be would come to pass because its in the interest its in everybodys best interest and here we are. Its dragging on and the question is, is there a point when it drags on long enough that it really starts to hurt and so were at the cusp of that with tariffs being escalated the consumer has been really healthy. Thats where i disagree with some of jim oneills comments about the state of the consumer. I dont think its anything like 2008 the consumers Balance Sheet is very healthy he described it as overlevered. If you look at the leverage on the consumer side its minimal versus what it was in 2008 consumers refinancing. Having more money in their pockets every month as a result. The consumer is healthy but in my view its a question of, is there spillover where Companies Start to pull back maybe they dont hire that person maybe they put on a hiring freeze and that starts to trickle down and impablth tct te overall consumer the stock on the move, jetblue. A catalyst call to buy it at Deutsche Bank. Heres a 2 mover today. Thats jetblue the stock over the last three months is down 3 . Hasnt done all that much. What about now you invest in these a lot. It makes a lot of sense youd be interested in a stock like this i havent looked tat eed at it awhile i own united and southwest im not in jetblue there is something to be said for it Less International exposure and the possibility as the 737 max at some point in time does come back, that will be something very positive for them as well but i think you can wait i dont know that jetblue is really ready, pardon, to take off just yet i think there are other names performing better at this point in time. Jetblue is a name that should be on there are barely any names performing in the space, period. Over the last six months, delta is up 13. 5 . Every other name is negative and jetblue is flat. Thats what happens to airlines thats what happens to airlines when you have recession talk none of this should be surprising to anyone when you go into recession talk, people Start Talking about Companies Like this not making it through the storm, okay i dont think thats the case at all. Okay im in Alaska Airlines i like that. I like jet blue. I like southwest which you just mentioned because if you want to be in this space, the u. S. Economy is doing so much better than the rest of the world why do you want to take the chance of being in something thats got International Exposure if you want to be in this space the transports in general havent been doing so great. So add that to the list of sectors of the stock market that are anticipating the most anticipated recession ever are you buying going to buy a fresh transport today given the concerns that are out there . I have my position in Alaska Airlines its a full position so im in. Im not rushing out to buy jetblue but im not getting out of the space a look at places like the transports if youre not in transports, this is probably a good time to Start Building exposure. You dont have to load the boat right now, no pun intended, but its probably appropriate to dip a toe in okay. Okay coming up okay. Forget it just buy amazon. That should be everybodys investment choice. We dont need the show just amazon. I mean, ill tell you where the value is thats your point of view thats fine. Options bulls are making bets on the transports hey. Maybe its him maybe its lebenthal im exposed in there with you, jimmy i hear what hes saying, man book end sale a lot of energy. Im feeding off of him im not saying its a bad call, but you need to be making another call with that and that, excuse me, the fears about the recession in the economy that weve bottomed im implying that when i say most anticipated recession ever. We dont have to have a recession. Its stupid to have a recession. You said its a selfinflicted wound. It is. So lets stop inflicting it on ourselves. Get the china situation better by the way, brexit is a selfinflicted wound but these dont have to happen if the president wants to be reelected, he has to get this solved in the next three months. Unusual activity coming up well let you know whether you should buy peloton in its ipo. Thats a very interesting story. Leslie picker is following that money. And the alimrertis ba after this. Fedex shares slipping to their lowest level in more than three years today. Options traders are stick with it jon and Pete Najarian tell us that in unusual activity when the stock was trading 2 lower than it is right now, trading around 150. 80 at the time thats when we saw some of the buyers walk in and start to make a position that they wanted to do to see some sort of a bounce. Going for the 162. 50 calls about 3,000 of these were bought about 1. 50 is what they paid for it, but also selling the 170s against this. Its a call spread im in this. Ill be in these for about a month. One more for you thats much, much bigger. The xrt. We dont talk about this a lot here we are with the retail etf. Very, very well balanced weve got some buyers down in here stock a little lower on this one as well. Traded about 38. 80 at the time they bought these. 22,000 of these calls. Cost about 25 cents. These go to september 6th. Thats when they expire. These arent a full month. This only gives you a little over a week. Ill be in these very short term but these are the 40 strike calls. Keep an eye on this. Quick one for you, scott. Proctor gamble pg its had a great year so far look at the performance. And now theyre coming in and buying november calls. With the stock at 120, they basically are buying the 125s. They just took profits on the september 120s now they rolled those profits up and into the 125s. Obviously, 5 higher im in these probably be in these until the second or third week of october. Another one real quick about the consumer look at mastercard today ma mastercard is pretty flat. Its basically 276 but this one has outperformed all year. Continues to be one of the stocks the people focus on for how is the consumer doing. We see them buying calls in september. I think these 280s that theyre buying are a play on backtoschool so i bought them with them. I think theyll be in them two to three weeks come back this way. The Investment Committee is answering your questions straight ahead and you still have time to reach us. Cnbc. Com halfcom or tets. rba iju about two minutes. Pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Hi, everybody. Im kelly evans. Coming up on the exchange. Bonds have gotten way out of whack. Is it a temporary cyclical aberration or global bond market structurally and maybe permanently broken discuss all of that. Plus, a tariff hangover for whiskey. Well talk to a distiller whose business has come to a complete halt and. Terrell davis says cbd could have extended his career hes launched his own cbd line and will join us to talk about that good stuff, kell. See you in just a bit. Lets answer some of your questions. Annie in portland has a question on j j brenda, you own the stock. Whats the advice . I think you continue to hold it here. This is a good company with great fundamentals if you can look past the headlines into baby powder and opioids, the underlying business is still growing nicely. Likely to have above Industry Growth trends. The stock is still attractively valued we like it here. Jon, mike in columbus, ohio papa johns. Obviously, now that they have gotten out of the trouble that they were in with the former founder and ceo, people have just poured back into this name. You take a look at it just in the last couple days the amount of upgrades a 60 target mkm took them to a 55 target today. I like the activity. And i think a lot of people have loved this one for a long time if it werent for dont miss board member, investor, nba legend, the big aristotle. Shaq nobody better than shaq fu. The diesel. Best investor out of sports ever how about that superman. He is superman. The big cactus. He has like youre going on and on. He has a million. The sheriff shaquille oneal. Hes going to be up next were looking forward to that on power lunch. Peloton disclosing its s1 as it prepares to go public leslie picker is following the money with those details i joked earlier, i called it a fitness company, but, boy, peloton is calling itself a whole lot more yeah, media, technology, fitness, exercise. You name it. They are describing themselves as that type of a company. Media, software, product experience, design, retail, apparel, logistics so many areas that they are involved in. And whats interesting when you look at the prospectus, the high level financials look solid. They are doubling revenue. Pop line growth doubling year over year in the year through june losses quadrupling but still about 2 00 million relative to that billiondollar top line which is an improvement compared to some of the other ipos weve seen recently. But its harder to get a sense when you really drill down into the subbusinesses how much theyre making on the various components how much are they making for tread, for example the treadmills that theyre selling versus the stationary bikes that theyre known for they say that they have a significant majority of the revenue coming from those bikes, but they dont actually break down exactly the differentials there. So itll be interesting for investors and analysts to dig in and find an appropriate valuation that makes sense for this ipo because youve got lower multiple if you focus just on the pikes. Higher multiple if you focus on the subs and the recurring revs. But thats only 20 of the revs right now. So investors really have a decision to make and one could say if you buy the hardware, then you ultimately get roped into this subscription model so there is almost a lagging indicator, so to speak because right now theyve only been selling the treadmill since 2018 and theyve only been selling the bike since 2014. So theoretically the more people that purchase these, the more subscriptions you will sell over time now how investors model that out remains to be seem and the Gross Margins for both of those in 2019 were almost equivalent, 43 . I think a lot of that has to do with their hardware is visitically integrated visitically. So they are able to capture higher margins at this stage they say they should be able to provide more and more over time. Do you want a piece of this yes but i would flip it quick. As you normally do. Its very fast, very fast every trade. 30year bond yield falls to a record low were going to trade it next on the half welcome back to the halftime report. Im seema mody and this is futures now. Its a big day in the bonds market, the 30 year yield dropping under 2 . Record low our traders today are scott nations and brian. How worried should investors be activity with stocks seeming to ignore this move in the bond market well, seema, i think the world is confused about an inverted yield curve its not a switch that causes some sort of recession its a predictor its not a very good predictor, but with the 30year yield at 1. 93 , theres only two reasons to be buying bonds either you expect to flip them higher good luck with that. Or youre not scared, youre terrified. If the 30 yearyearold cannot find its way back to 2 , what will that mean for Equity Investors . Scott mentions basically the cup half empty, which is the inverted yield curve, people want to say recessions banks are going to have trouble with earnings going forward. But below 2 on 30 years out i think there will be major share buybacks going on they can do it out to 30 yields and get dividend yield that after tax is better than the Interest Rate that youre getting at the 30year yield there might be some vol kilt ahead. Brian and scott, we are back with our digital shows tomorrow. Half ti ll bmewie back after this short commercial break. This is my headquarters. This is where i trade and manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. All right. Lets get some final trades or final thoughts in your case, ap i think the risk was actually positive on china news i think if it keeps getting bad, the market can go lower. If we get positive, it will trade 20 times its earnings. Do you have a target in your mind best case its going to be way better if it continues to be worse, itll be a little bit worse. Its asimmetrically positive pete . Im going to give you as a final trade today amd. I am seeing some paper in there and theyre buying a little bit more time than we have been seeing generally overall so were seeing some of that to the upright. Urban outfitters. I think its back to school play they are buying september 6th expiration calls brenda . Cvs becoming more of an integrated Health Care Company that should shift. Farmer jim. Heres an investment that people should mathink about makg in the back half of the afternoon. Go get them, jim. Marathon petroleum. Take your towhold in. Seven times earnings what do you think were going to run out of diesel fuel not me we might run out of time though, if you dont stop. [ laughter ] the exchange begins right now. Thank you, scott hi, everybody. Heres a look at whats ahead. Another crazy yield sign the s p 500 is now yielding more than the 30year u. S. Treasury bond thats only happened once before whats it telling us we will debate and a tariff hangover. Were going to talk to one distiller whos seen his europon profits sink to zero as trade wars continue. What he plans to do to fight that and who may be affected next plus, former Denver Broncos running back Tyrrell Davis is here who hes betting on this football season. Well get into a

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