We dont we use this to refresh and get some new investing ideas. We have bill nye joining us in a bit. Hell tell us why he sold out of apple and what he is buying with the money has made and hes made a lot of money on apple and a few other stocks your Investment Committee today is jim executive equity strategist. You have stephen wiess the dow trying to build on its four day win streak. Were down 122 points but you know math, as the numbers go up, the percentages go down. The nasdaq is something that we have got to talk about here. The nasdaq is down the nasdaq has opinion leading us higher. Maybe it will lead us lower. Why do you think the technology has been, i dont want to say weak lately, but looks a little wobbly thank you for that and for recognizing that i was wearing a trash bag this morning its always a good idea to have some protection, bryan that was protection from the rain here in chicago now its sunny outside the same thing is true in the market im going to pull it back to that because you want to have some protection. I think a lot of people over the past few days have been seeking protection either with put options or by selling out of stocks and buying calls because they can define their risk by doing that you and i talk about that all the time im sure when bill comes on, hell talk about the reasons you want to pull some money off the table and the way you want to manage your risk i do think people relaxing a little bit when they see positive catalyst in the market, they come back in. When they dont, they might ease back i think this is one of those easing back periods right now. Not just both hands out selling. In the last couple of days, when we had downside or had upside, the nasdaq has either led us on on the downside or lagged on the upside its not a trend a few days does not a trend make i would imagine given techs importance to the overall market, its something youre watching certainly something were watching you cant deny that technology has really become an essential service and especially in this new environment that were in. We have seen we have had days where investors are starting to look outside of tech because there are a lot of values there. Many of them depend on the economy recovering much more than we have seen thus far we cant deny there are opportunities outside of tech. I think that tech has been an incredible driver of the market. Were not ready to say get out out tech at the moment were likely to continue holding the name fs for the foreseeable future lets follow up on that value has been out performing growth over the last couple of sessions value can sometimes equal boring we talked about kwacompanies lie church and mccormick spices. Im not calling them boring but theyre kind of not sexy where are you seeing value now i think you can still have sexy and more value oriented in stock pickers market like we have today names like disney, which is really tied to an economic recovery in in respects. Has incredible business and content. It cant be repeated anywhere. Poised for making acquisitions in this type of environment. Its those kind of ideas and i think it makes sense to pick away at in this environment when theres still down and out and we start getting more signs that were able to reopen a bit more, more good news perhaps on the vaccine front. Those could be catalysts to get those stocks moving the right direction. All right stephen, well get to jim in sae second i cant read the email because theres words im not allowed to say on television. The gist of your email. Beep, beep. Those words were directed at you, not at the market of course thats what i mean it was best of love. Hope youre well beep beep. You seem to not really agree with what the market is trading on what the you believe is the trading driver of the Macro Markets right now . Look, there are always inefficiencies in the market since the market came into existence. Thats the way it will be. The 66 annual return. The inefficiencies are so blatant here the market is trading on retail. The market is trading on basically etfs which just have volume coming in so they drive certain things its trading a relative value. That creates opportunity its not a terrible thing. Take today, for example, taiwan semi put a blow away quarter in. They had Revenue Growth of 29 Earnings Growth of 88 they Beat Estimates on the bottom line by 40 in normal times, in times that markets trade more in fundamentals, that would lift the entire tech sector. You would think that would lift the stocks were talk about one day, maybe a few days i see value in the tech sector and thats going to be ratified and proven out when they report earnings just like the last quarter. I dont see it in the companies depending upon vaccine it will take years to convince the majority of individuals to take that vaccine. You can talk about the airlines which are defunct, talk about the hotels these are upside down. The morons that are going out and given norweigan cruise lines more money that equity will be worth nothing. Theres got to be thats opportunity. Okay. Jim, we are entering the seasonally slower period for the market the bizarre thing with this year is i dont know if seasonality will matter. What does summer what does vacation mean anymore . Im kind of getting metaphysical because im tired. Seasonality, i think we can throw it out in 2020 theres too much happening to think that seasonality will play out here weve got the virus. This is big news that were removing the special designation from hong kong we have an election coming up. People have no idea what to expect theres no guidance. Its too early to tell all we have are the financials to bank on were waiting for next week and tonight with netflix when we start to get technology and Consumer Discretionary names i do have to note my colleague is awfully angry today wow. Thats an angry steve. Im not sure i can take that today. I need positivity from you steve. You didnt even get the email i got thats my positivity. Well get more on netflix in a minute you have a lot of individual stocks to get to he sold his entire apple position he has owned it since early 2009 just made a 3,000 gain. Pleasure to have you on Halftime Report again thanks for joining us live from chicago. Dont let the apple fans come after you on social media, bill. You know youre not saying anything bad about apple youre saying you made 3,000 . It had your Intrinsic Value targets and its better money to be made elsewhere, right thats right. Were always trying to shift our assets from companies that we think are fairly valued to those we think are bargained we owned apple for over 12 years. Most of the time that we owned apple, it was selling at below a market multiple. The only thing you needed to believe to justify holding it was it was at least an average company. That, for us, was a easy thing to believe about apple apple is selling at about 25 times estimates for 2022 we use 2022 estimates thinks that will be the first normal year for the economy it has to be significantly better than the market to justify this price more importantly, compared to the companies that we own or have been biuying, a company lik capital one financials sells at five times 2022 estimates. You have to think apple is worth five times as much as capital one. If you invest 100, you could buy 4 of earnings from apple or 20 of earnings from capital one. We think thats a pretty easy choice do you believe that valapples over valued . No. When we think they hit an appropriate price, were selling them and repurposing those assets into companies we think are under values a lot of the tech sector that we own very little of, we believe is over valued whats the most over valued in tech . I dont know. I thought tesla was over valued since it was 200 but im not the voice to listen to there i think theres a lot of companies in the Technology Space with multiples that are three or four times what the s p 500 are at that a lot has the go right just to justify the prices they are trading at. We talk a lot about Economic Data im going to you a macro question and i know jim wants to jump in. All these High Frequency data points are out there as well what are you look at the most closely daytoday or week to week is there something out there special to oakmark and you that you think needs to get more attention . I think over the past ten yea years, investors have made money by identifying great businesses. They havent had to think so much about the prices they are paying. The answer might be valuat n valuation. Jim, you want to get in here i own apple. I own it now at a 4 weight in client portfolios which is dramatically underweight to where the s p 500 is i think it has it at 6. 5 waiting. Maybe its even 7 my question to you and its an honest inquiry why not trim it if youre in your situation the underweight you take to the benchmark is tremendous. Maybe the answer is im bill nygren, i have the track record behind me that can justify taking enormous tracking error i am curious why not just trim it even in half and still have less of a tracking error love your opinion on that. Over time we had been making those trims. We think if people want extreme diversification, they can go to an index form. They are hiring us for stock picking expertise. We think very little about whats the exposure we have versus what the index has. We try to make our largest positions those that we think have the most attractive risk reward regardless of what they are. When we think an apple doesnt compete with our financial stocks or our industrial stocks, the other names that we have been purchasing, we simply dont own it youve got discipline and you stay with it in terms of discipline, being a value investor, what areas of the market have there been traditional value that dont exist right now or maybe that value story is put off for a few years because of covid and right now there are value traps. Some of the areas that we have no exposure to. We have nothing in utilities we have very little consumer staple largely because those companies tend to be good dividend players and frustrated fixed income buyers have elevated the prices on those companies to multiples that in a lot of cases are higher than the s p and we dont think they better businesses areas that we think are really attractive and include some of our new purchase, we brought General Dynamics in the quarter. Sells at ten times estimate for 22 thats about 60 of the s p multiple it sells about 20, 25 below the other defense contractors. The way we think about it is were effectively getting gulf stream the premiere private Aviation Company for free everyonings are supposed to be about 5 the markets effectively treating covid deaths like they will recur annually and penalizing this company so its p e looks normal on a this year. We think next year rga is likely to have earnings back up to 12, 13 a chair. We have a series of three weeks where total death vs been below where they have been last year despite covid, deaths have been down maybe arguing some of this excess death was pulling forward deaths of people that were really sick any way. Tmobi mobile. It has a lot of similarity to when charter bought Time Warner Cable and there were tremendous cost savings synergies but they were going to take two to four years to capture all of these sin ir jis. The stock price on an enterprise value basis is a fraction of either at t or verizon we really like the entrepreneurial management that tmobile brings to the table that was a new purchase. A forced seller last quarter gave us an opportunity to get in at a price that we felt was very attractive is that softbank . Yes wild guess. We love having you around the table. We appreciate it bill. Best to you and your team. Thank you very much. Thanks for having me. Lets move onto some other youre very welcome lets move onto some other stocks and names. Morgan stanley, bank of america, abbottlabs reporting their earnings theres nothing that really worries me other than normal consternation about anything i own. Look, gorman and our skeptical initially has done an amazing job of transferring the transforming the company that transformation continues. Theyve got the best of all worlds in tirms of investment banks. They have great mma. They have issuance and Wealth Management which is high margin business as jim will tell you. They have pretty strong sales. Medical devices down e e everybody was locked in. Johnson and johnson doing enough to make sure it stays in your portfolio . Absolutely. We have seen a return of elective procedures. I think it bodes well for a company like merck where twothirds o of their business depends on position administered medications. Lets move onto a third stock. Thats abbott labs covid19 testing well out patsing weakness in other units. Their medical device sales coming in better than expected you got to like the number from abt. Oh, yeah. Absolutely i think they were looking for 6. 8 million cayman the profit that drops to the bottom line, a lot better than the street estimate. I think this one was a bit of a gift at the end of june. It fell down through 90 and now here it is back up into the 90s and wells fargo put i think a 105 target on it maybe a week ago yeah, i think abbott did a lot of things right. At least one of those to keep your eye on during the time when were looking at for reagents. I probably should have led with this. I want to get a quick comment. The one thing that stuck out the most to me was they reinstated guidance not only did they reinstate guidance, they came in at 3. 25 for the year which would be in line with 2019 prepandemic. Thats an awfully optimistic look from abbotts management. Yeah. I think thats also because of the optimism that the management has over some of these treatments that abbott has not just in the fipipeline but e ones they have and they delivered on again, that half a billion dollars in additional sale, when you see Something Like that out of a company, even if theyre not offering positive guidance or any guidance, youre going to say thats a good thats company i want to own and clearly the fact that they reinstated guidance, sully, that is another check mark in that box. All right were going to move on trader moves. We have to move on the trader moves. Well throw a squid on the ice and go with john in the hat trick. Youre betting on another Online Learning company what are you buying . Lrn this is k12 i already own chegg. Love that one. Wish i would have held the entire position but like bill nygren said, as these stocks rally, especially when youve got doubles and triples, youre taking some off. In the case of a stock like this one, i just see a lot of upside. Continuing upside for when ever the pandemic fear mongering gets higher, stocks like chegg are better the more likely these stocks will find a bid and rn is one of the big winners stephen, you just bought every time i say aig, i want to do it like the guy from die hard, the fbi why did you do it . The stock is cheap. Its well off its lows and highs. You wait for the cycles and these stocks explode the stock can double from here thats aig its a great name. There are numerous analyst calls out. A little company, a start up called tesla well bring them to you and our experts will debate it the w dn doisow153. Were back right after this. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. All right. Welcome back lets get the headlines. Here is whats happening at this hour. Attorney general william barr says walt disney would be quote disheartened to see how the company he founded agrees to censor its films to be allowed to shown in china. Disney wasnt his only target. Hollywood is far from alone in kowtowing to the prc. Americas Big Tech Companies have also allowed themselves to become pawns of chinese influence. Corporations such as google, microsoft, apple have shown themselves all to willing to collabora collaborate. As the u. S. Passes 3. 5 million confirmed covid19 cases, we have another record daily i creancrease in florida 13,956 at 156 the daily death toll is the highest so far in that state. They are accusing the Trump Administration of giving gilead an expensive wind fall deal. You can read that letter by going to cnbc. Com. You are up to date thst the news update back to you. All right thank you. See you soon lets get market flash look at the transport. Hot stocks like jb hunt is here with that. Shares of jb hunt hitting an all time high. The largest container shipper in the u. S. Trading on optimism on the possible reopening of the economy. Trucking demand increased 25 last week after surging 82 in june other trucking stocks also rising back over the you. A buddy of mine owns a truck Brokerage Firm hes trying to add workers because he says hes too busy to keep up with the staff hes got. Thank you. Jim, youre take on transports not a truck. This is a different one. You love greenbriar, the rail car company. Youve locked this stock for years. Ive owned it off and on. Its a little bit of a trading vehicle but its got a very good bid to it now. This is a place for active stock picking. Steve was saying this earlier, stap away from the discretionary transports why own an airline when youre down 80 in revenue. Why own a cruise line when youre down 100 in revenue. The economy is reopening that means goods are being shipped by following the accident fedex and union pacific. Transports, thats an area for active stock picking all right sit tight for a second we have some breaking news regarding social media and the white house. What is larry kudlow saying . Thats right. The National EconomicCouncil Director stopping to talk to reporters about tiktok and suggested the outlines of a potential compromise here is what he said we havent made final decisions but as has been reported in some places, i think tiktok is going to pull out of the Holding Company which is china run and operate as independent company. You know of any American Company that would like to step in and buy that company or might step in . I dont want to speculate on that thats really a market question. Im just saying thats a much better solution than banning or pushing away kudlow suggesting the administration would prefer to see an American Company step in and buy tiktok or some kind of compromise where the u. S. Government could be assure thad the data they have isnt going back to beijing. Very quickly. Well boil it doin wn in our 20 seconds, a lot of people probably ask what is the beef with tiktok. People are afraid the Chinese Government has back door video and audio window through the app into like the nation and our children right the possibility is a, hacking into the phone themselves that are using these apps or b, using the app to track other activity on the phone, more generally broadly, gathering access on the activities of millions of americans. These are people who have 70 million followers around the world. Thats an enormous amount of data on people, their behavior and preferences. The company says its independent. It doesnt do anything wrong the u. S. Government clearly suspicion of that. We talked this morning about twitter at length. I dont know if you have anymore news on that raid a story earlier i cant remember where theres some speculation that literally it wasnt a hack job someone employee of twitter may have been paid off by bad guys to help them access data and do that hack . Well what will twitter said is this was a social engineering attack thats a broad term that covers a lot of possibilities including the hackers tricked some members of twitter staff into providing this access. Theres some kind of fraud or scam. There was an insider inside twitter who was compromised some way. Maybe by money or ideology or maybe just by being tricked. Thank you very much now lets get back to job at hand and go through some of the biggest calls on wall street today. You have cisco downgraded to neutral. They are concerned about a lack of visibility. Is there a demand for the hardware and software of staying connected . Yeah, there is and its growing. Theres no visibility is kind to punt on the question im long on cisco. I think a will the of people are long as value name in tech they are late reporter they wont report until the second week of august. Brenda, you have kraft and mondelez you own one, not the other we do we own mondelez. This used to be a story about emerging Market Growth thats been flipped as developed market vs bes have been benefit from pantry loading and emergin markets have not. Thank you lets have some key other calls of the day what are you looking at . Downgrading kb home to sale price target 26 bucks from 31. Analysts expect this stock to under perform its peers because its more exposed to regions that have high unemployment. Shares are still up about 1. 7 look at shares of dell the stock on pace for its best bay since march 24th up almost 14 . The Company Getting an upgrade to over weight at morgan stanley. Price target here, 68 this is after statements that dell and vm ware are considering a stake. Analysts like the potential of a more simplified ownership structure. B of a upgrading dollar tree to buy. Price target 115 this is on the potential for improving markets and sells within the dollar tree and Family Dollar divisions. They continue to see the company as a winner of the federal Stimulus Program the ceo told cnbc they will be watching closely how Consumer Behavior changes if that stimulus measures subside. Back to you. I think theres some jpmorgan credit card data that showed when the extra spending came in, Consumer Spending soared next, johns unusual activity trade. Well get to those as we head out, a check on the s p sectors. Kind of an odd reversal today. Utilities up 1 . Technology down 1. 5 a bit of a flipflop day here on halftime were back after this. This selenite grey is so pretty isnt it . Wow. Jim could you pop the hood for us . There she is. Turbocharged, right . Yes it is. Jim, could you uh kick the tires . Oh yes. Can you change the color inside the car . Oh sure. How about blue . Thats more cyan but. Jump in the back seat, jim. Act like my kids. How much longer . Exactly how they sound. Its got massaging seats too, right . Oh yeahhhhh. Oh yeahhhhh. Visit the mercedesbenz summer event or shop online at participating dealers. Get 0 apr financing up to 36 months on select new and certified preowned models. Welcome back some options bulls are spotting unusual activity in shares of draft king john, what are you seeing . The shares are up 8 since tuesday of this week now, thats a tremendous jump. Draft kings is on a lot of chat rooms and a lot of the robinhoodsters are in this one these are about two months out into the future. They are buying those calls aggressively about 7200 of those when the stock was 34 obviously, the stock has been climbing throughout the session. They are betting it goes significantly higher second trade, thc. This one are buying the august 25 calls they paid about 5 cents for these. They had multiple buy, buy action in draft kings. Hopefully that thc will help you cure your upset stomach. I dont know i dont know if you see what i did there. Thank you very much. Your questions answered next in ask halftime. You can reach us at those addresses. Go to the World Wide Web fire up that modem cnbc. Com halftime. Were back ieright after this 49. 50 i found you good job. Now im gonna stay here and you go hide. Watch your favorites from anywhere in the house with the Xfinity Stream app. Free with your xfinity service. Now any room can be a tv room. Stream live tv, on demand shows and movies even your dvr recordings. Download the Xfinity Stream app today to stream the entertainment you love. Xfinity. The future of awesome. Time for traders to answer your questions round one, this one goes to you. From john in denver. What do you think of pipeline operator Kinder Morgan i think very highly of it they entered this year thinking they would raise their dividend 25 . They got cautious in april and only raised it 5 . They will be able to raise it the extra 20 and more next year they already yielded 7 . I love this name stephen i bought kaakamai a few weeks ao should i cut my losses or hold firm mine is performing well over the last few weeks dont cut your losses. As sports come back online, they are the traffic for that as they are very virtually every large retailer including amazon and every Financial Company in europe and the u. S stay with it its doing great and only Getting Better okay. There you go john, from andrew in chicago take profits in roku question mark. No. If youve got a nontaxable account, i guess you can take some profits i think it goes higher theyve got a deal they are trying to forge with hbo to continue carriage on their platform shows how valuable that roku platform is. Hold onto it okay. Brenda from bob in texas fidelity national. Buy, sell or hold. We really like this name. Its an interesting way to get exposure to Electronic Payments without the valuation you might see in other names within that space. This company also really benefits from continuing to spend money and upgrade technology we think its really a place that companies will favor in terms of spending money. Okay. Bren brenda, thank you very much. We have some more trades coming up on halftime very big night tonight one a lot of people have been working hard on. 7 00 eastern time in partnership with acorns. Do not miss the virtual townhall its live. Well bring together some americans affected by the current health, social and economic crisis. We have some of the most respected Financial Experts in the industry to answer their questions and offer actionable advice to try to reset and rebuild. You have jim, kelly, Sharon Epperson its a big line up it will be terrific. Dow is down 143. Were back after this. Medicare you may bt and supplemental insurance. Medicare is great, but it doesnt cover everything. Only about 80 of your part b medicare costs. A Medicare SupplementInsurance Plan may help cover some of the rest. Learn how an aarp Medicare SupplementInsurance Plan, insured by unitedhealthcare insurance Company Might be the right choice for you. A free decision guide is a great place to start. Call today to request yours. So what makes an aarp Medicare Supplement plan unique . These are the only Medicare Supplement plans endorsed by aarp because they meet aarps high standards of quality and service. Youre also getting the great features that any Medicare Supplement plan provides. You may choose any doctor that accepts medicare patients. You can even visit a specialist. With this type of plan there are no networks or referrals needed. Also, a Medicare Supplement plan. Goes with you when you travel anywhere in the u. S. Call today for a free guide. Snhu lets you transfer up to 90 credits [announcer] if youve tried college but never finished, toward your bachelors degree. [woman] it doesnt matter how old you are, you can do it. You can finish. [announcer] finish your degree at snhu. Edu. Welcome back its time for futures outlook. As you can see on your screen, all three major indexes are the red following another surge in jobless claims 17 straight weeks with over 1 million new claims the dow on track to break its fourday win streak and futures betteors are betting that the rally is not over yet. Jeff, what are you seeing that the bulls may want to take away . Sully what were seeing now is a big rotation. The nasdaq down over 1 , a rotation in the less loved names, which fall into the dow jones. If you look at the dow jones futures, the top five names, these are the names we know, trade and talk about apple, microsoft, united health, goldman and home depot thats nearly 35 . I want to be a buyer in the dow jones futures, those names there make up 35 . And this rotation we talk about, the darlings of the f. A. N. G. Stocks and getting into the industrial names i want to be a buyer at 26,600 being mindful of my target looking for a 500point move higher to 26,100 we just a risk reward of 21. You have an opportunity to participate in the catch up trade. Whats your risk, jeff . How much do we risk to make that bet . We are risking 1,250 to make 2,500. 21. Thats the risk reward i like it your hits always cut the mustard. Thank you very much. Much appreciated ggur final trades im just hot doing it, straight ahead on the Halftime Report. When we started carvana, they told us that selling cars 100 online wouldnt work. But we went to work. Building an experience that lets you shop over 17,000 cars from home. Creating a coast to Coast Network to deliver your car as soon as tomorrow. Recruiting an army of customer advocates to make your experience incredible. And putting you in control of the whole thing with powerful technology. Thats why weve become the nations Fastest Growing retailer. Because our customers love it. See for yourself, at carvana. Com. In a highlyconnected lexus vehicle at the golden opportunity sales event. Lease the 2020 es 350 for 359 a month for 36 months. Experience amazing at your lexus dealer. Gimme one minute. And ill tell you some important things to know about medicare. First, it doesnt pay for everything. Say this pizza is your part b medical expenses. This much about 80 medicare will pay for. Whats left is on you. Thats where an aarp Medicare SupplementInsurance Plan, insured by Unitedhealthcare Insurance Company comes in. This type of plan helps pay some of what medicare doesnt. These are the only plans to carry the aarp endorsement for meeting their high standards of quality and service. So call Unitedhealthcare Insurance Company today and ask for your free decision guide. With this type of plan, youll have the freedom to choose any doctor who accepts medicare patients. And when you travel, your plan will go with you anywhere in the country. Whew call unitedhealthcare today and ask for your free decision guide. All right. Netflix is going to be the big earnings tonight the stock up 15 this quarter. John, youre tracking some big call options on netflix. We are, sully a lot of call activity in netflix and also basically, sully, from the 550s 0 theto th0 and even the 650s. This is usually not a great quarter for them but alternative data says these guys had fewer cancellations than theyve ever seen in a Second Quarter and that thats likely to result in significant increase in International Subs thats why were into this one and the stock has hit a nice move since that 591 bottom a couple days ago. Or since the 491 bottom a couple days ago yeah. Nice looking at the ail turntive data there. Final trades time. Steven baba. The chinese economy is coming back, so what if trump has a ban on communist party travel. Theyll stay home and send more money through baba jim American Airlines is going to end the year with more interest expense than it had ebitda last year thats why i own puts on the name wow betting against American Airlines john sonos repeat buyers again, sully i bought it during the show. And brenda . Booking holdings. Uniquely positioned company with positions towards a return in Leisure Travel because were all desperate for a vacation you can say that again. Thank you very much. That does it for us on the Halftime Report. Ill see you on worldwide exchange. The exchange begins right now. Im so with you on netflix, its great for the 17th straight week, the nu