Roku tumbling on a downgrade, wells fargo, deere also getting undercut. The Investment Committee is ready to go, Halftime Report starts right now it is good to have you with us on this monday, our Investment Committee joe chernova, jim lachb that will, Jenny Harrington is the ceo and portfolio manager, rob seechum is back, one of forbes top 100 financial advisories stocks are on pace for the best year since 2013. Tech, small caps also posting their best month since the summer, we enter december with a lot of momentum, derailed for the moment by an ism manufacturing report that throws into question that the industrial economy is bottoming and a headline from wilbur ross that says tariffs will be increased if there is no deal by december 15th. Thank you very little. Yeah, well, we came in position we strong and aggressive for further appreciation, but you have to Pay Attention on a day like today to your point when you get the ism manufacturing, it reverses a lot of the optimism we were bottoming, you did not see that in the report today i think more importantly was the president s tweet this morning the president for the very first time when he spoke about reinstituting tariffs on brazil and argentina, he used the word therefore and he tied it to the devaluation of their currency its the very first time that the president has done that where he has enacted tariffs or reinstituted tariffs based on currency depreciation. So that was troubling to me. That is troubling to me. We have a Federal Reserve meeting next week on the 10th and the 11th i think the president knows that hes limited in his ability to get the Federal Reserve to cut rates further, i dont think anyone sees thats going to happen, but i think now were going to begin to talk about currencies in countries that are depreciating their currencies and i think thats taking a little bit of the optimism and exposure to growth names and high beta names and saying lets take a step back today. You have traditionally, rob, the best month of the year in december, up 73 of the time and on average about 3 . Yet you have this tariff issue hanging out there. Is that the biggest risk not only between now and the end of the year as you have an actual date where youre going to get an increase in tariffs if you dont have a deal, but Going Forward . I think its one of the biggest risks. I describe our positioning as cautiously optimistic, the caution comes from the fact that the market is discounting a lot of good news valuations are not excessive, but theyre certainly extended theres complacency thats creeped into the market and lets not forget the impeachment process, the election cycle and we dont have a deal on trade, which is the most important shortterm issue, and i think the optimism comes from the fact that we dont think we are going to slip into a recession, the profits are coming in better than expected and next year we think profits can accelerate. Hasnt the bet over the last several weeks been on the fact that the industrial economy is bottoming, you start to look up and get a number like today which is a drop from the prior read and a miss on expectations for today in and of itself. Theres been a lot of volatility around that number specifically but if you look at some of the other numbers you could have looked last week, gdp, durable goods, personal consumption, retail sales, consumer manage hanging in there. I think you have mixed news as it relates to the Economic Data but there is no question in my mind that the data has been coming in better than feared and thats why we are near all time highs and thats why weve derisked a little bit at this point because we suspect that some of this news the macro news, is going to have a little bit of an ebb in the short run, but longer term were going to start to flow again. I said wed come into december with a lot of momentum. We had the best month since june. Right. We have eclipsed these records and set new ones and yet weve got this tariff issue hanging out there and it seems like thats going to be the overriding factor now for at least the next couple weeks. Are we going to get more tariffs or arent we maybe in terms of superficial noise its the overriding factor but i dont think for me its not integral tomy investment process whatsoever and its not what i look out to i think what were looking at right now and i think that i dont think its a bet on the economy bottoming, im not worried about the manufacturing numbers that came out today, im not worrying about tariffs, what im thinking about is what are earnings going to look like next year im thinking about the consumer and im thinking about the strength of the consumer, Global Growth accelerating, im thinking about Interest Rates being as low as they are, Energy Prices being stable. So trade just isnt in what im looking at when im investing. You have a lot of good things to look at coming into this month if you look at what the nasdaq has done and tech and pretty much a broad swath of investments have worked. There is an article today on cnbc. Com, almost every investment worked in 2019, whether its stocks or bonds or gold or this or that, corporate bonds, double digit returns across the board so you can have turbulence out there and still have your investments work. Yeah, so, look, i shaved a little bit of some positions last week, rokus trading position i got lucky i sold it, i sold some lumina, paired back on united rental the reason i did that was because everything was up and my own personal barometer i was starting to feel really, really smart and i dont like feeling really, really smart because that means that others are feeling even smarter and things are working its an unusual feeling for once we agree. We dont like it, either. Right it was unusual and i will explain what that feeling is to rob since he will never have it, but that meant that it was getting too easy, too much momentum money in the market we take rokus downgrade because it got a lot of momentum money which i was part of for a small period of time not because the views changed, the analysts never liked the stock, he went to underweight because he had a 110 price target on it its 160, cant stay equal weight i thought it was prudent to take some exposure off. I still have a lot of exposure, i still do anticipate the market moving up to yearend. My other concern is trade. Let me ask you this, then, can the market move up if you anticipate it doing that, can it do it if you get the tariffs on the 15th . No. No, i agree. I dont see how it possibly can. Its down 10 in a heartbeat and then you take it from there. But when you get to those tariffs, you know, when you go to the size of those tariffs, thats meaningful. Weve already seen the impact in Corporate America and we havent seen a lot of it because the political reasons most ceos are afraid to talk about. People say there is no way the president is going to let the stock market decline into the end of the year. Hes not going to put these tariffs on the president may think he has currency to play around with because its been a great year for the stock market. Thats what the pattern has been, scott. Every time the market goes up he feels like he has room to do whatever he wants with regards to trade it looks like hes bitten off much more than he can chew with regards to trade this was supposed to be trade wars are easy to win, a year and a half plus down the line we dont even have phase one signed u. S. Economic figures today were not good, including Construction Spending chinese economic figures are starting to look better, a lot better so that takes away some of the vulnerability of the chinese i had. If you believe it. Apples to apples that you can only believe these figures so much to begin with, theyre still showing improvement. The problem for all of and, jenny, im going to disagree with you, as much as we see things the same way a lot i dont see how you get those earnings up 10 next year if you dont get at least phase one signed before these tariffs going into effect. I just see that as such a Chilling Effect on the corporate economy. Nobody is going to want to hire, buy new i. T. Or build factories. It just goes down the tubes and i think in a somewhat more permanent sense than, oh, the president can reverse it by saying hes sending out a tweet hes going to meet with president xi whenever. The market is its like Charlie Brown with the football, it doesnt believe it anymore. And i look through this in a different way. When im listening to Company Earnings calls, we had ended earnings season, had 36 Companies Report and when i go to the different conferences like the mlp, financial conference and retail conference, trade is not in the dialogue the way it should be if earnings were going to come down a lot because of it. I think companies have said here is our status quo with trade, were going to move on, look through, work for what we have today and i dont think that its i think companies are moving through it, i think consumers are moving through it. Earnings are literally flat s p 500 this year over last. Next year we are expected to be up 9 , 10 . There is no basis for it being up 9 or 10 . Why not. Global growth accelerating. What is your basis for that whether the ability to have that habitually exists. I think you can grow without having a huge tariff deal. If we muddle along stocks can go up. 19 times multiple. Say it again. 165 per share s p 500 this year s p 500 is 31. 20, thats about 19 times earnings. That is not a multiple that can sustain anything less than ten times 10 growth. Oppenheimer is looking ahead for next year, rob, they got 3,500 on the s p for 2020. Even though were cautiously optimistic, that is certainly possible and let me tell you the construct that thats possible in you dont need the earnings, you need the earnings to accelerate a little bit you need investor positioning to change more. There is a tremendous amount of cash on the sidelines and what causes investor position thing to change more are two things, number one, there is no alternative and what is the right multiple im telling you its not 19 times. Right. When 70 of the committees have negative interest. Theres also been an alternative, thats why i read you the list of all those trades that have worked this year if you dont get a deal if you dont get a deal in trade you have a different scenario. I think were getting way ahead in the calendar. I think you have to look at the environment of what has happened today relative to where we left off before the holiday, something has certainly changed and for stocks to continue to appreciate through the remainder of the year i dont know about that whats changed steel tariffs. What has changed, scott the tweet about tariffs doesnt mean everything has changed. Lets see, you know, by the time the president lands thats tariffs heading in the wrong direction. We totally are desensitized to his rhetoric, by the way. I disagree with that. I disagree with that because on a day where youve never before tied tariffs to currency devaluation ever and now were introducing i dont think thats true, joe. There is not i dont want you guys to talk all over each other. The president from day one has been talking about currency devaluation and the chinese and thats part of the reason for the fed. Hes talked about it all the time. He has talked about it. He has talked about it he has never instituted a tariff on a nation specifically because of currency devaluation. Thats a fact. He has not done that today he did that. Thats what feels different to me from where we left off last week when i was sitting here on this desk telling you you need to go all in on equity, so all im saying is you got a warning shot today that potentially in the next ten days you could be faced with something thats representing a different position towards your attitude down 18 points i thinks he right and i want to buttress this point for a second the market is saying, wait, the president has not learned that tariffs are a Blunt Force Instrument that should not be wielded as frequently as hes wielding them. The market is not saying anything the s p is down 20 points. A record high market. Going into what we all agree should be both by the end in the markets and seasonally a great month. Its a bad start to the month. Youre getting too worked up over one day, the first day of the month. 64 bips means nothing. In terms of your point, its a valid point, however, you are assuming that i think you are assuming something thats occurring in President Trumps thinking that takes it a leap too far. No im not. Im not willing to make that same concession. Let me finish my point he has come out repeatedly and said that china is a currency manipulator. If what youre saying is true hes getting ready to drop the maam hammer and say we are not doing a currency deal thats not new information, maybe new information as he phrases it, then its look out below in the market because hes throwing a new negotiating point in there that didnt exist before that means we are not getting a deal anytime soon you dont want to be anywhere near the market. In terms of earnings next year, i hear people come on the show, next year will be a good year. Nobody has ever given a reason for that other than because. Why are you disagreeing with me im not disagreeing with you, im talking to jenny into i gave you a reason, consumer is strong you said that i was wrong about reading too much into whats going on in the markets then you said the exact same thing that i said. I will put it to you, how do you get top line Growth Without phase one. But i did not say that. You could get multiple expansion and you know you know this from 19 you can get what is i agree with rob on this, too. Is 20 historically. What growth look it up. Slow growth, no inflation okay. How do you get top line growth you cant get Margin Expansion here youre not going to get profit growth. The fundamentals and lets Start Talking about investor positioning and the fact of what is the right multiple in this growth and inflation paradigm when Interest Rates are negative. Right. Its higher than it is today. Youre right about Interest Rates. And im not a bull, im cautiously optimistic, ive told you why im cautious and i think youre right to be cautious and it wouldnt be prudent to take on undue risk right now because a lot of good news is priced in, but as you look through the removal of some of these hurdles and i dont want to overreact to the political headline, i want to overreact to the political outcome if it happens. And i think whats happening right now is we are all trading on political headlines and how can you trade on that . Im not. I dont know the answer to this question. How many successive years have there been in the market where multiple expansion has driven it this year this let me just finish. This year was entirely multiple expansion. That was coming off of an abnormal low base also thats actually not an abnormal low base that was statistically historical the average market multiple 4. 5 times. It is 16. 5 times. Contrast matters to both of your points. In some it should be 14 and in others it should be a lot higher. I heard you say this, i dont think i heard you wrong, you said, quote, we dont need the earnings going into ex in year to get the market to move higher. We need modest Earnings Growth is what we expect. Whats modest. Were expecting mid Single Digits if we get that that would be fine. That would be a fine outcome. There is a reason why mike wilson at morgan stanley, you know, continues to be cautious if not negative. We expect disappointing eps and overweight defensive staples and underweight discretionary a typical late cycle underperformer hes been the loudest, lets say, voice on but hes got a more sophisticated view that the market doesnt adopt its the rising ship. Rising tide lifts all ships. Normally i think he would be right but you cant tell me that tech is not going to go up maybe its not going to go up in january, but by the end of the year. Relevant to the conversation now on earnings. Right and im not disagreeing with him. Jenny is looking for 10 earnings you can get 10 not thinking that you can get 10 this is what really sort of baffles me phase one is so easy there is nothing to it, its a skinny deal, whatever you want to call t its an empty deal, we will sell them some soybeans and maybe we will lift some restrictions on huawei why dont we get past that and get to the 10 Earnings Growth, try to get real gdp up above 2. 5 were sending this much time on a nothing burger if you dont get the nothing burger cooked we go down 10 . Joe just told you you have a whopper, not a nothing burger. You look at it in terms of risk and position. Risk and position, okay . Positionally i came in to december max long, zero cash. Do you represent the populous i think much of the you dont. The equity investing community has now reestablished their positioning towards that. Theyre playing catch up but they are not there yet. Whats their position, rob . Average is 20 cash right now. Thats humongous. Rob, thats statistically incorrect. That is statistically incorrect. The average right now is not 20 cash. Okay. What is it why are house balances in Single Digits. Im speaking of a recent study we just did. Specific to our firm i think our firm is pretty representative, its a warehouse firm, pretty large i will tell you that investors are still off sides broadly as it relates to this and professional Money Managers are playing catch up right now and thats why weve seen this latest run i think you have to be mindful of the fact that that could continue as long as you dont get this gigantic piece of negative news, which youre right to say and im going to give you credit, youre right to say you have to acknowledge because theres asymmetric down side. The only way that oppenheimer turns out right are those highly optimistic predictions on the s p for 2020 is to have favorable outcomes to get a lot of that money thats on the sidelines to push into the market weve said there is a ton of money sitting on the sidelines. I dont think it comes in. If it doesnt come in youre not getting 400 s ps. Households have made it clear what we used to think was full investment by household is no longer the case. As far as institutions go i dont know what the documents of the funds youre referencing are permitted to hold in terms of cash, but most have 10 cash at one time. Its allocation. In terms of catching up historically 75 of mutual funds underperform the s p so theyre always playing catch up theoretically. I dont think we rely on somebody deciding all of a sudden to put cash in as your investment. My point about the way we started this show is weve come into the last month of the year with a lot of momentum. Yes. Its traditionally a great month. Yes. Best month for stocks, you are up on average 3 thats where we began the program. Does anybody feel like other than joe who thinks it is who is thinking today has somehow changed the calculus on where stocks can go over the next four weeks. No. Weve decreased i was counterpunching, joe, a little bit were doing the same thing i was counterpunching, joe weve derisked there is no question about it because we think to jims point theres asymmetrical asymmetry in the up versus down side but we do not think we are going to had a he had into a recession next year. I think every day that goes by that we dont get visibility to deal with china that the risk ratchets up. I agree with that. Let me say it this way, okay, coming into today the positioning for me as an individual was max long, something about today, the manufacturing miss, the president s focus on currency, acknowledging that theres not much he can do with the Federal Reserve, you just have date of birth alert and aware. Scott, all i did was sell my semi exposure. I sold lam research which i have held for the better part of this year, i told teradyne. Theres a high correlation between the potential risk elevation related to a misstep in china and the u. S. Trade to the semis. Im out of the semis, i dont hold that exposure looking forward to 2020, to me its not about cash coming back on the sidelines, its about tech continuing to perform if tech at 25 of the s p is going to have another strong year, were going to be okay in 2020 and im positioned that i believe thats going to happen. Lets do this, we still want to get to these retail shorts that i teased coming into the program. The most profitable and the most painful. We will do that, i promise all of you before we go today, but its also a critical month for boeing and we dont want to miss that our phil lebeau joins us to explain why. Phil scott, remember for a long time boeing has targeted recertification of the 737 max in december. They have only got 29 days and a lot of things have to happen this week they begin Human Factors testing, we will not go too deep into the weeds explaining what that is, but essentially theyre bringing line pilots into the 737 max simulator, running them through a number of scenarios, seeing how they react when the scenarios happen, when the alarms go off, et cetera theres a certification flight that is expected probably somewhere in the middecember, the 16, 17, 18, somewhere around there though thats fluid and it could move then they have a certification flight final report thats likely by the end of the year and dont forget faa administrator steven dixon he says that he will be flying the fixed 737 max after that certification flight thats unlikely to happen this year look for that more likely in the first or second week of january. So as you take a look at shares of boeing keep in mind that the faa has said they are going to be setting training rules as well for the pilots. Those still need to be set and theres a 15 New Hampshire day Comment Period thats part of that whole process. Add this all up and its pretty clear that you are looking at a certification that is unlikely to happen this month, more likely to happen sometime in january and you might be saying, well, why havent we seen a bigger dropoff in shares of boeing its because we havent seen them change their production ramp for next year thats really what wall street is focused on right now. If theres some change to that production expectation for in ex year thats when you might see even more pressure on shares of boeing. Phil, good stuff into our conversation of those who actually own it today. Phil lebeau in chicago, jim, joe, jim, first crack at boeing. There are some assumptions i have, number one, the problem with the 737 max is fixable, number two it is fixed, now we are just in a waiting game as far as the faa goes. I wouldnt put it past President Trump to put a tweet out there saying, hey, fellas, lets move it along, this is our biggest exporter in the nation but underneath that there are some problems that we need to Pay Attention to im not selling my position on this, but we need to Pay Attention as well with whats going on with the 777 x program. They did a fuselage test about a month ago and the darn thing ruptured during the fuselage test albeit it was within 1 of the maximum load but the 7777 x is a major moneymaker for the next few years so you have to Pay Attention to that as well. Again, im not selling but im paying attention to it. Wise, you ownit. I think right now the market is assuming that its not going to get certified in december despite what the ceo said, which i think was sort of poorly phased he should have say were reasonably optimistic rather than essentially guaranteeing it the reason i own it, there are two manufacturers, airbus has not been able to meet their capacity in terms of deliveries, so whether it happens in december, january, february, i dont care. Joe, give me 30 seconds on it. Plain and simple, you mentioned it before, momentum. Thats why i bought the name momentum cleared above the 20 o day moving average, the technicals look good. We will take a quick break a lot more coming up here is what else is coming up on the Halftime Report. Announcer bearish calls on four big stocks, deere, wells fargo, biogen and roku plus the Investment Committee is ready to answer your questions to reach us go to cnbc. Com half time or tweet us the Halftime Report with scott wapner and the traders is back in two minutes welcome back, everyone im sue herrera. Here is your cnbc news update. Londons mayor paying tribute today to two People Killed by a 28yearold convicted terrorist. Two college students, saskia jones and jack merritt were stabbed on friday on London Bridge british Prime Minister Boris Johnson were among the mourners attending that vigil. Frances mediterranean coast is dealing with its second week in a row of deadly flooding. More storms are moving into the region today authorities report six people have been killed by the floods. Travelers at Ohare Airport in chicago trying to navigate flight delays and cancellations. Flight aware reports almost 500 flights have been canceled in and out of the u. S. Today, mainly due to those winter storms. And take a look at this, it may look like a hat trick to you anyway, but from afar, there you go, its actually thousands of teddy bears on the ice at an arena in pennsylvania. The Minor League Hockey team the hershey bears holding their annual bear toss holiday toy drive. A Record Number 45,650 stuffed animals were counted and that is more than 10,000 more than last year all going to a good home youre up to date, thats the news update this hour. Scottie, back to you. Sue herrera with the news for us. Wall street analysts making big calls on four stocks today deere, wells fargo, biogen and roku all downgraded to sell. We have made all of them our call today just to kick all these around lets go deere first you say, jim, not surprising, price target cut to 150 from 175 and thats at bank of america. I mean, it was a horrible preannouncement they gave last week, it was really horrible its all on the ag market. Theres concerns that maybe theres going to be overplanting next year, crop prices go down, not enough profits for farmers to buy more tractors obviously the trade war agriculture is right in the cross hairs and thats why they lowered their numbers. Its just a tough place to step in and say i really want to buy deere here im not doing it they do point out cat is a potential name that they would put money into if we got phase one would you buy deere . No, but i would buy more cat. Thats how you would play it . Yeah. Lets kick around wells, jenny, you own wells fargo. We have owned this for a long time, since 2013, its lagged the whole time were not selling it but its definitely a source of cash because you need to look at a stock like this and even though its trading at 13 times earnings and has a 3. 8 dividend yields its taking up room in the portfolio. When we find something thats compelling that we think has more upside this will probably be the source of cash to fund that. Joe, you own it as well. I do, and in january its going to be a show me moment for the new ceo. He has to put forth a Profit Improvement plan, if he does that i will stay committed to the stock. He could kitchen sink the whole thing just given what theyve done in the past and how optimistic people are about his role hes going to get a pass on that. If they kitchen sink is which i think every incoming ceo should do, i would buy it. Try to play the contrarian side of it. Even the best of sharly sharf might take too long to play out for us to stay in the stock. Biogen downgraded to underperformed thats at baird, 250 price target, 15 down side. You dont own t youve added other names in that space. In n. That space we owned salgan who merged with wri bristolmyers. They have up to 2. 5 billion of synergies, a fantastic cancer drug pipeline. Last but not least this roku down grade at morgan stanley, underperformed, price starting 110 from 100 why underweight they say were bullish on rokus Growth Prospect shares it up 400 year to day theres just a lot of exuberance in the names. Two ways to discuss this, technical and fundamental. Frankly the reason is you dont know if a day like today is a reversal of momentum or buy the dip. The last year, year and a half days like today have been buy the dip moments. Until theres proof, ie two or three days in a row of this going down im not saying the momentum is broken. You are not adding to your position. No i have enough of it. You have enough or youve had enough for people who may have followed you in. Yeah. What should they do today im staying with it so you should stay with it. I think maybe the question should someone they dont have it. I own the stock, its down 15 should i buy more . I own 3 . Thats why i am, full transparency if you are below that i think this is a buy the dip moment. He just said 3 . Its more like 5 you know this is something im playing with lightly fundamentally, the analyst is right, up 400 if you compare this to the recent impeachment probes that have gone way down there is no way these guys will never are v. To raise capital these guys are growing revenues at 50 and there is no place else in the world that i can see 50 growth im not in this for the fundamentals and if the momentum has turned i will get out. But to argue against this on a fundamental bases there is nobody growing like this. You sold yours. I did sell mine and i started shaving exposure three weeks ago, two weeks ago i would have bought it today unquestionably an analyst who had a hold on it has missed the stock since he initiated coverage on it although good analysts can drive a stock down 15 thats a buying opportunity. However, i think theres symptomatic something bigger which is that people are actually more worried than theyre letting on to be worried because theyre willing to sell the stock down 15 and theres no lift to it. I may buy this in the next day or two because i think this is just abnormal for this to happen i think you have to look into that to what it might mean more for the market. Systemically there has been this rotation from high flying growth to quality growth its quality growth at a reasonable price up next, what the moves in etfs are telling us about the last trading month of the year first lets get a check on the s p sectors. Just energy in the green today, Everything Else in the red, s p ow26hati is back after this do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. But with opportunity comes risk. And to manage this risk, the world turns to cme group. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. They all lead here. Cme group how the world advances. Cme group it nice . Ce. This is the mostawarded minivan three years in a row. The van just talked. Sales guy, give em the employee price, then gimme your foot. Handsfree sliding doors, stow n go seats, man, yall getting a hook up and yall dont even work here. Pacificaaaaa the first ever sudden death to decide the president s cup. Since 1990 the s p 500 has gained 20 or more from january through the end of november on six other occasions. According to our data partners at kensho a year after those moves the s p trades higher 100 of the time. With an average return of 18 . For more go to cnbc. Com kensho welcome back to the Halftime Report, im bob pisani here at the New York Stock Exchange lets talk about the december setup for etfs december the number one month for stock gains going back 50 years and on the surface this looks like a very promising setup, 60 of nyse stocks above their 200 day moving averages and the small cap russell 2000 also recently broke out to a 52week high joining us andrew mccoremin. Chris hempstead. Andrew, its hard to argue this setup is fantastic, best month of the year and tech leadership, bank leadership, health care, three big ers sectors in the s p 500 are the leaders. The setup is good, you have a whole other year of absorption of political, you know, not jeefr reacting to tweets and things like that i think september and october you have a lot of people thinking about last december, clearly that hasnt happened, the setup is better in those sectors. I think you will see some tax law harvesting. This is not december 2018, the fed is not raising rates, we have generally lets call it a truce an easy truce on trade the global bottoming in the economy a little hard to figure out but different scenario than last year, december. Much different. Whats really happening, watch the flows, there has been flow into value but performance has been in favor of growth, 2020 will be an election year, gold will come back into favor, it will be volatile we have been desensitized to tweets so i think equities are in play and definitely the positioning is equities are going to be, you know, in focus for 2020. Value has outperformed growth, we have ive versus ivw. In the short term. The big s p 500 growth and value. I have to say when you have these stocks as value, come on, apple was a value stock, we keep pointing this out. Right. Common sense. United health and bank of america and jpmorgan, when these four stocks some of the biggest stocks in the s p are up like this its no surprise value outperform growth. They have gains already, why take any risk going into the end of the year. Not value over growth over three years but the three year, one year and one month favor growth. Profit taking weve seen it in consumer staples, the defensive groups, is that going to continue into december. Just portfolio riyal case i think its adjustments going into 2020 and some likely gains. Weve seen big trades in the sectors, that will be them switching from i shares or select sector to ma i can that trade happen. Gold has lost a little luster, only up 14 for the year gld seeing outflows, the costs associated with them whats going to happen with gold i think gold is back in play once the year starts theres no reason not to position yourself with equities, i dont think anyone will take a risk in the last three weeks of the year. With the election on the table you cant take gold off. Thanks very much for joining me more etf edge dont go away, our live online show starts at 1 00 p. M. Eastern time on etf edge. Cbs. Com we will talk about the head of the etfs at the New York Stock Exchange. Options bulls making moves Pete Najarian joins us next. rba i30ecds all right. As promised were back on the Halftime Report. Industrial names are taking a hit today on the back of what was a worse than expected manufacturing data l3 harris, jacobs engineering, boeing, honeywell are among the biggest losers you dont owe honeywell, do you, joe . I do not. Not anymore consumers continue to spend but some investors are betting against retailers. The Short Interest in the xrt retail etf is hitting its highest level in nearly eight months according to the Financial Firm s p partners. This comes as etf that etf is having its best year since 2014. Bank of america hitting its highest level is more than a decade today and bullish options traders see more upside ahead. Pete najarian joins us from minneapolis with that. You talked about that, decade highs for bank of america, nice move to the upside that were seeing here and disclosure i own the stock, i plan on holding the stock and, by the way, the options were seeing today got me into the calls as well so im double dipping so to speak its a twoweek option, december 13th is when these expire. What were looking at right now is the 34 describing, the 34. 5 strike and the 35 strike all very active in december 13th expiring options now, the 34. 5s thats the biggest were seeing, thats about 17,000 last i looked, might be bigger now, but that has been something that started off the day at about 5,000, its been just picking up and the momentum moving to the upside has been extraordinary those options are very inexpensive, theyre 15, 18 cents, somewhere in that range so risk reward youve got to like what you see there and if the stock does continue this breakout those options ought to move very rapidly. Ive got a second one for you, too, as well, scott. Macys this is a trade. I bring this up every time, this is a trade, this is not a company that i love, i dont think that theyre really in a great position right now, but somebody is buying this weeks calls the 15. 5 strike calls at macys as the stock is trading right near that 15. 5 its actually pulled back below there so the stock was a little bit height yer when they were buying these calls. They expire friday to december 6th. These are the 15. 5 calls that theyre buying and nice size, about 7,000 of those originally hit and that was trading around 30 cents so, again, risk reward now, what i always look at when i see Something Like this is are they saying to me that macys will move to the upside on news. I dont think so i think what theyre going to move to the upside if they do is a short squeeze. 30 plus percent Short Interest on macys. Im long these calls expecting to see them maybe potentially. Stock gets up through 16, 17 these calls will absolutely quadruple it will be a great hit. If the thing moves up, of course thats the about et. Thats the big if, yeah. Pete, thank you for that. Appreciate it. Great to see you. Nice vest its cold here, man, its like 15 degrees here today okay. Are you going to the monday night game is that home or away thats away, thats in seattle, but look for the vikings, they will be really, really ready for this one. Theyre pumped up to stop Russell Wilson i can tell you that right now. Yeah, whatever. Pete, we will see you back here. Thats Pete Najarian pete was talking about macys, right, placing a bet the stock is going to pop. The wall street journal had an interesting look today on retail i said earlier the most profitable and painful in terms of shorts, macys right at the top of the list in terms of one of the most profitable retail shorts not a big shock. No one is shocked by that. Kohls, nordstrom, big lots, ollies, bargain outlet. The five biggest losers, target, dollar general, dillards, dollar tree, jcpenney. Im surprised best buy is not on there. The thing that has me scratching my head is this is a trade thats gone on for three years. Macys, jcpenney, nordstrom, three years of almost straight down, losing twothirds, 80 in some cases this article when you are on the street long enough theres something that smells like a setup for Short Covering and pete was talking about this with macys calls i dont know how much more juice the shorts think theyre going to get out of this i mean, yes, some of these will go to zero but not all of them and some are pretty darn close to zero. I agree. I dont know whats new in the short story. Maybe nothing has to be new because its been going on for a while, the continuing at fee and particularly what doubled down on it to me was the weather this weekend. So that stopped a lot of people from going out to the stores, more went online. Fewer shopping days between thanksgiving and christmas this year. Six fewer days, yeah. They have to put up real good numbers or decent numbers above expectations whatever they are and the stocks will move up nicely thats an opportunity to reshort them for someone like macys which pete is placing his bet on to have a pop, Short Covering or whatever else, youre not going to need much in terms of a number. Yeah. Out of the Holiday Shopping season to get anything out of that, right . Anything close to break or a positive is going to be a winner. I think its priced for bankruptcy. I think its tough to trade the whole sector, i think its a story of haves and have nots in the sector. Those that have been able to make the Digital Transition have doing well. Its costco, best buy, target, walmart and you throw amazon in there. Lululemon on macys they have an analyst day coming up in the beginning of february and it could be it could be a turning point and it could be kind of inspirational, it could be the thing that kicks off the shorts. You used the word bankruptcy, there is a second level trade here and thats the debt side. A lot of the exposure could be all these names, they are all high yielders so you could be getting Long Exposure on the debt side and utilizing the equity as what of a hallie jacksoning mechanism through a short. Its an expensive short when you have the yield that you do on macys its a lot to carry. Coming up next were trading some of wall streets biggest Battle Ground desks. We go go around the desk on facebook, slack, uber and more do it after this hour 36 in the stakeout. As soon as the homeowners arrive, well inform them that Liberty Mutual customizes home insurance, so theyll only pay for what they need. Your turn to keep watch, limu. Wake me up if you see anything. [ snoring ] [ loud squawking and siren blaring ] only pay for what you need. Liberty. Liberty. Liberty. Liberty. Here, it all starts withello hi . How can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone wifi up there . Uhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your local xfinity store today. Do you want to have your own conversation or can we commence the show what do you think . Lets begin who is going to talk first . Welcome back to the Halftime Report. Check out these names. Tesla, dish, ge, amd, facebook and uber among 20 stocks with the most divided opinions on wall street according to cnbc analysis names have the widest gap from the average price target at the top and the bottom you guys were so chatty . Eager to chat, what do we think, rob what stands out to you, man . You know i cant talk about specific stocks. Sometimes you get the ball thrown at you. That is fine and im happy to catch the ball there is a rotation under way that i think persists to quality as we discussed at the beginning of the show. Quality, growth and dividends and less focus on high revenue growing names. So i dont own enough facebook because its been going up there in terms of some of the others ive looked at Western Digital but tesla is too tough momentum, uber and lyft i dont see the Value Proposition and ge is too tough a great battleground name for 2020 it is thats when things have to happen if they dont happen then, hey, i tried it but i couldnt do it. Do you think theyre going to happen i dont think so. If they do, by the way, the stock is overvalued, what are the earnings, the current valuation . Its an under armour story which i dont think will happen either jimmy i look at these and i think the ones the most in peril potentially to raise capital, uber and lyft, ge as well, and tesla. The stocks have been all over the place. Its been if investors think theres going to be shares or debt issued to fund Ongoing Operations theyre in no mood for that and havent been since the summer and wont be into next year. There are some, though, that have great momentum like an amd. I dont think theres any question whether theyre doing fabulously maybe its a little bit over priced i think what jumps out on that list they put on the screen they have low valuations, tremendous cash flow they do need to fundraise. Fundraising is one thing then stocks go up. Its not going to cure uber or lyft if you want to jump in and know the earnings are coming, those are the safe ones on the list you can see the full list of the most divisive stocks on cnbc. Com coming up, were answering your questions and have your final trades straight ahead. Theres a lot of talk about value out there. But at fidelity, value is more than just talk. We offer commissionfree online u. S. Stock and etf trades. And, when you open a new Fidelity Brokerage account, your cash is automatically invested at a great rate thats 21 times more than schwabs. Plus, fidelitys leading price improvement on trades saved investors hundreds of millions of dollars last year. Thats why fidelity continues to lead the industry in value while our competition continues to talk. Talk fidelity. Were answering your questions now, first up, joe david in colorado wants to know with jpmorgan. Still room to run . I believe there is. A company that continues to show revenue growth, double digits, which is rare for a financial institution, that 76 u. S. Revenue exposure, i like that. Citi as comparison is only 20 is Electronic Arts a buy . It is lets be careful it trades at a 20 times multiple historically should be a 24times multiple. I would rate for that confirmation of it getting above 105. Thats where you confirm its going to a 24 multiple steve in ohio wants to know about the emerging markets where is it going . Its underperformed year to date a lot of people expect catch up in that to develop i think you need a comprehensive deal not an incremental deal to break out of his funk. It is starting to fade a little bit. I would be worried about that. Jenny from new jersey honeywell or caterpillar which do you prefer and why . This is not an apples to apples comparison. Cat is big, chunky moving equipment. Honeywell is avionics. In our case we own cat its cheap, its 14 times. It has lower Interest Rates. Lastly, united rentals. Is it going to keep moving up. I think it will i shaved some of it but it has more legs on it. Thank you for the questions and answers. Final trades Joe Terranova . Wendys jimmy roku. Looks like its already turned. Jenny piling on to the barrons mention Tanger Outlets etf up 19 . Thats since august, more room to run i bought some roku during the break. You did support that does it for us the exchange begins now. Scott, thank you very much and welcome, everybody, to the exchange. Im Tyler Mathison and here is whats ahead for a monday. Trade is back in the spotlight in a big way the president has put tariffs on two new countries today alone and the commerce secretary ross says tariffs will go up if theres no china deal. From commodities to stocks to bonds, almost every investment is working in 2019 can that momentum continue for the rest of the year and the deals are hot in december Retail Stocks may not be