Nasdaq is going for its second day in a row josh, we got within a point. Same narrative here. What now we figure were going to hit new high for the s p those stocks are really all you need to get it done like a nominal new high its been 122 days since the last time the s p 500 had an all time closing high. If you think about the media number of days between making those closing new all time highs its about 90 from one year to the next i guess i would say this is pretty average year all Things Considered i would not be surprised to see an all time record close for the s p very soon. What you need to get there is all working. One other thing i would grow into the mix is put to call ratios have collapsed. Its a historic collapse i think its indicative of sentiment out there. People are just no longer afraid of a resurgence in the virus or a spate of negative headlines that will send this lower. The evidence of that is if you look at a 50day moving average you have to go back 15 years to find a period of time during which it was this low. You have to go back to 2004. That does mean an excess in complacency. You see these case by case reports from the state we had a spike in new jersey at the end of june. California is ticking up again investors are looking past it. They are no longer buying protection out there we have no deal in washington we dont seem anywhere close to a stimulus the market continues to yawn day after day after day. Doesnt care about anything. The market assumes we will get another stimulus thats in the price right now. The market needs to broaden. We can see since the beginning of the quarter and the beginning of august, over 50 of the names in the s p are ahead of the s p index. That compares to 36 of names beating the index from the beginning of the year. Weve had a very definite shift in broadening of this market away from just the covid helped stocks like amazon and netflix to many more cyclicals and names that will be recovery stocks people are beating on those companies that will be able to come back and grow whether its airlines or banks or other types of financials that are going to help carry that market and as you said, the market is asiem g i assuming we get the stimulus rate low its a good point the question is now what. Where do we go from there. The problem is when you look for the next catalyst, ive got my list here. Earnings are all but over. The economy is far from back and the path forward remains very uncertain. Whats going to take you there scott, what were seeing is that in march 13th, we saw that the high valuation stocks took the lowest point and what we have seen since march 13th until now is a recovery. What were saying is that the surge in the market, well see a slow down. Well see it go back to what we typically look at in a market environment where as we have valuation may still be a positive contributor but we dont see it as the surge that weve had in the last two or three months were seeing a calming of the market well be in a range because were also seeing that the profitability stocks are once again taking a lead of the market and well see some more positive relative to high profitability stocks relative to low probability stocks and were seeing that going forward. Thats what were seeing in the marketplace. We dont expect the surge to continue kate moore maybe even more reason why you need a sustainable move, perhaps in those value or cyclical names. Yeah, perhaps i want to go back to something josh said that some of fear has been removed from the market i think a lot of this has to do with coming out of Second Quarter earning season the confidence has been restored in companies ability to sort of navigate this very difficult and uncertain environment. You didnt have to get a lot of guidance in order to really pick up on a positive tone from companies and youre seeing this really get reflected in analysts earnings across the board. U. S. Earning division ratios to upgrade relative to downgrades are some of the strongest we have ever seen the last time was after the 2018 tax cut some of that fear has been remove but i think with good fundamental reason youre asking about catalysts for the market. Youre right path to earnings story were all kind of baking in expectations around fiscal stimulus the big question mark and what were spending a lot of time on my team is thinking about election implications because we know the second half of an Election Year can be quite volatile i dont think the market is really sort of positioning for any wild swings or change in leadership thinking about industries and sectors that benefit the most each of the different sort of Trump Administration or a Biden Administration scenarios is where i think investors should be focusing time s john, you got kates view and josh at the top so the bookends views of where we are. The put call ratio, this complacency, if you will you tell me what youre seeing and what you think it all means. We saw the lowest volatility since february 24th. Just a tick above that now i think the job claimless number has been improving steadily. This is the first time in 22 weeks that we broke a million as far as that jobless claims number and continuing claims came down as well. We all know it was a very challenged june and much of july as far as that heating up, that mortality that josh spoke to and so forth there was a definite pick up in hospitalizations, icus and all the rest that seems to have peaked in the bulk of those states california is still struggling they are also struggling with data i think to see the jobless numbers moving in the right direction, scott, along with continuing claims moving in that same right direction, those are positives that broadly the market just absent the text stocks but broadly the market is likely to embrace over the next, at least until we get to next thursday, scott. Thats the idea that some of the biggest names do splits much the way apple and tesla has announced. If you want to market to keep climbing, he has companies that need to start taking their cue from tim cook and elon musk. The price tag matters to new crowd of young investors you want those new investors to start buying and holding the best of names rather than the penny stocks that have been getting a lot of play. They have been ignoring these. They can make a lot they can make for a more Stable Shareholder base than hedge funds because the pros have no loyalty. He gives ten stocks. Josh what about the idea that kramer puts forth that if youre looking for a good stock, you can find it right under your nose just split the stock i hate this so much every one knows how much i love jim. Hes right that is a catalyst that moves stocks but if thats the thing that puts us into new highs, its going to end ugly it always does if you chart history, they always coincide with short term market tops. It feels great but youre always in the nineth inning beginning of my career in the late 90s, knowing nothing at all about the markets, all i heard was lets buy mind spring. They are about to do a 3 for 1 stock split. Theres no business. It was just a ticker symbol. That mentality led to 20 and 30 stock splits every calendar month during the year 1999 stock splits became the thing that people were investing for warren buffet was asked in 1983, why dont you split your stock Berkshire Hathaway was the most expensive in market. His answer was simple. He said, people that would buy a stock because it splitting are buying the company for an uneconomic reason. Somebody that buys a stock for an uneconomic reason would be equally likely to sell for an uneconomic reason and real operators, ceos of real business do not want shareholders who are not there for the Intrinsic Value of the business. It might be a good short term boost but long term it leads to nothing good i dont like it. I dont want to see a lot more of it and i never want to hear people say im buying this because its splitting i think theres a different way of discussing the benefits of this as similply as he puts as opening up your stock to a new class of potential shareholders the joshs point its not relevant anymore youve only had two stock splits announced in 2020 in 2000, you had 83. Its the most we have seen by leaps and pounds since then. Kerry, is this a good idea to have more Companies Split their stock. You open up your stock to what is, we know, a new class of buyers who are out there the robinhood class. They are more engaged. They dont need it. Its not helping josh, can i make that point lets not talk over each other. Lets have a spirited debate then its moot the point i was going to make, i think josh was going to say it also is that young traders are also sophisticated they do know about new platforms to trade many platforms allow you to buy fractional shares of stock thats a thing that people are doing. Opening to new traders who dont have lots of aassets and they are starting to dip their toe into the water index funds dont care about fractional trades. Thats where a lot of the money goes into passi iive investing. I think were loyal investors in terms of our company in beworry about the dollar amount of the stock, thats not the right focus. I understand wa jhat jim is say. It isnt going to take them to new highs. They are already at new highs. We have gotten here without splitting the stock prices what do you think about this idea kerry and josh, what i would say also, lets talk about the liquidity that this would add and would assist in price discovery with these stocks which are there. Whats your thoughts there kerry im not sure i agree with that were at a level of pretty sophisticated trading methodology. I think a concept is good. I just dont think intent is opening up a broader array of potential buyers is going to be solved by the stock split answer is tesla worth 20 more as a business is tesla worth 20 more today than it was on tuesday night before announcing a five for one split. Is the business 20 more valuable on earth in real life does anyone think that i dont think anybody does. Okay. The robinhood investors or the ones buying fractional shares dont you think they would rather have a whole share of apple rather than a fractional share. If entry point is 400 bucks, thats a good thing. Its just as easy to say i have 10,000 to invest or i have 1,000 to invest its almost for us to be you can tag about splits this is from the days when you had to buy a round slot share to get any respect that the Brokerage Firm or on wall street there are cases where a split is necessary. 2014, apple did a 7 for 1. You cant put apple at 700 share. It completely throws the whole thing upside down. He fulltiinally had to do a sp the b shares there was a reason to do it. We had to create that liquidity to help facilitate and finance that deal. If youre telling me we dont have enough liquidity in the robinhood names, look at the volume i do not want to see 50 more companies doing it. Whether it makes sense or not, scott, we all know that Human Emotion drives a lot of investing. I probably shouldnt but it does trading trading and investing, ill say. I think they are thinking more about holding it. Nobody looks at this list that jim has and agrees with any of the names nothing applies. Amazon at 3100. Costco, facebook, microsoft. I dont understand. Its a solution in search of a problem. All youre doing is naming high dollar price stocks. It has nothing to do with the fundamentals of the business all it might due is temporarily induce people who think youre richer with 10 10 bills rather than 100 bill jim is right it will increase trading activity in these stocks is that the problem that were trying to solve in society right now . Does that do anything for anyone in im not sure. I dont understand what it will do also in addition to increasing liquidity and not all liquidity is good. Well talk about that another time it trains the next generation of investors to make uneconomic decisions and to do thinks for the wrong reasons. Why do we want to foster that kind of environment by encouraging stock splits which suck people in to pay a higher price for a stock either pre or post why shouldnt we be educating the next generation saying splits dont matter. You think the stock is undervalued or you dont almost all of the Great Companies throughout history have not been companies that have focused on manipulating their share price with gimmicks. A lot of the listen we dont talk about them is they have 3 and 4,000 share prices and not playing the game of juicing investors into getting interested short term. I think ceos have been successful running businesses because they felt it was warranted. Every one has made the point about participation. Im not worried about it in this market weve had plenty of it i think the really important thing here is we have companies that are cheating Strong Revenue growth that are showing solid levels of profitability in this tough environment. Thats what needs to drive the market higher. These are the companies that every one has invested in. If you look at the stocks that have rerated this year and the out performance of the industry, its very closely tied to upgrades in terms of earnings expectations theres a tight relationship over the last six months in way we havent seen before people are buying Profitability Companies and companies that have the ability to generate profits regardless of whether gdp is 4 or minus 4 . Thats the catalyst for the market higher is sustained performance of these structural winners. What if i pose this differently to all of you. Now im wondering if i had, if the conversation would be different. Which other names should think about splitting their stock. It seems to thing that is sticking in everybodys craw here, especially josh, is it comes with a catalyst to move the market higher. Were talking about whether it makes sense or not to split stocks what if i presented it to you, apple and tesla just did it. Whos next would your answers be different . Are you thinking about it in the context too much of some kind of catalyst to move stocks higher in your own minds thinking about manipulating the stock prices or the market itself higher josh i think its a fair point i think what jim was saying and i accept that as a reasonable premise that its a more democratic process for people to own the stock. For get about moving it or the trading of it. The stock price is within people think of as reasonable if the reasonable criteria can be addressed by fractional shares then i think we address it if youre asking me, if i think any of these other names on the list should split their stock, i guess ive already made the point. I dont think stock splits are something i think about much 20 years ago i did because it was much more common did you disagree . You disagree with the move it felt a little bit like a marketing play apple will go from the most influential stock in the dow to about the 18th i think if youre tim cook, you dont want to be stock that every one looks at to be like the only thing that matters in the stock market and you dont want to be waving this flag like every other stock march behind me as the market races to all time highs with 20 Million People collecting unemployment i understand this argument of like lets take some of the attention off the fact were doing better than ever in covid summer maybe theres some wisdom in that i dont think apple doesnt want to be the most important stock in the dow they have become that. I dont hate what they did im not always against stock splits the main point i wanted to make is if were now saying were all out of reasons for the market to make a new high, lets do some stock splits to juice the last lambs to the slaughter i dont think jim was saying that thats just the thing im saying everybody buys stuff on our site but yet not everybody can own our stock because at 3100, the ticket price is pretty high. Yes, they can i get you can have fractional shares okay. My son can buy amazon. What if he thinks it will make it more accessible . I know the ticket price is high. If i split my stock, i can make my stock more accessible to some of the people who are buying my products every day its plenty accessible now. He may well decide to do that. I wouldnt rule out. Few might see a wave of people look at apple and tesla and say lets do it ourselves. It cost about an average of 800,000 of paper work to do a stock split. Thats data from the journal theres transfers, security stuff you got to do. Probably some legal stuff and plan it and put out the announcements and a regulatory filing. Its about giving people access. Thats a false premise every one has access kate moore made the point retail participation hasnt been the problem. True first of all, not everybody offers fractional shares yes, you can find a broker that does just about. We know people are loathe to move i know etrade doesnt do it i know several others, the big houses do not do fractional shares the real cheering here, scott, isnt among shareholders, isnt among robinhoodsters, its all the volume numbers. You think its manna from heaven the more volume, that stays the same but the more volume that speeds through these guys that take the toll, the better it is for them yeah. Well leave that conversation there. Well pick it up again hopefully with jim he gave us something to chew on for certain. I was interested to hear everybodys take on that lets talk about some of the moves you are making now kerry you are trimming a stock that maybe a lot of people own that watch our show. Twilio why did you trim it . Well, it has been such a phenomenal stock since we bought it its up over 120 in the Second Quarter alone. It kept growing we have 32 or 33 names it just got a little bigger than we felt comfortable. We cut it twice now. Theyve had that little pause as we talked about earlier. I think it was the right move to make we still like the stock a lot. If it came down, 10 or so more, maybe we buy and add to the position we still think its great but it just was a size and weight issue for a portfolio. Degus, you bought best buy and you sold i tell. Youre not the first to sell in this last month following earnings what we saw is it was just a very weak outlook for intel. The position in the stock wasnt what we want it to be in and we have other chip stocks that are doing quite well we talked about you mentioned best buy we did buy best buy because we saw a lot of up side from the valuation point of view as it relates to best buy. Its a really good company if you think about the Business Model its a company thats a retail over 1,000 stores i believe every one is about 15 to 20 minutes away from your local best buy store its doing something that you cannot get from other online it does the insulation of tvs. It has the geek squad that works with you to put together your whole entertainment package i think in the environment, best buy is a in a good position. Profitability is strong. Lastly, we look at social media to see whats the society thinks about a particular company and best buy is getting really good lucks as it relates to social media. They have programs that go from 12 years of age up to 21 that community that they service is a great way of earning what we like to say the social license to operate and they are doing that thats what were seeing in the media out there. Good point. Kate moore, thank you very much. Well talk to you again soon its been good having you. Twitter is blowing up on the stock splits my email is blowing up on the stock split. Well continue that conversation some other time. We have bullish calls coming up. Should you bet on these . Well debate those were back in two minutes. Were back lets head over to john ford with the headlines here is a cnbc news update. The Justice Department has seized millions of dollars from cryptocurrency accounts used by militant groups. Officials describe it as the largest seizure of Digital Currency related to terrorism. The fbi is joining the investigation into what caused the massive explosion in beiruts port. Lebanese officials invited the fbi the take part. The blast killed more than 170 people reaction is coming into israel a Spokesman Says the uae has stabbed minutes palestinians in back thats our cnbc news update for this hour. Back to you. Appreciate that. Big bets in the casino space im happy about it. I took off about half the position today just two days ago we had unusual activity in this one again but those options expire friday. I would love to put on a longer Term Position in this one because i think the stock could double from here if you look out a year into the future the big 12 with their decision to play means theres going to be focus again, scott on, at least football in that conference and people have been locked up waiting for sports obviously, baseball and hockey are out there as well as soccer overseas primarily but i think youll see a lot of folks gravitating towards penn gaming and bar stool does a will the of driving of that activity no doubt. We have new street high target on two big retail names. Analysts note with the nfl season unlikely a go, they will see strong home theater sales. The strong product cycles this year, namely the new iphones and gaming consoles should give best buy a lift compete with amazon and dry Customer Loyalty pointing out that walmart was well positioned starting the year they have benefitted from increase traffic they say its accelerated walmarts ecommerce business. They call it a winner with or without covid. Remember yesterday, jenny mentioned a similar idea they are starting to categorize stocks by how they will going to look after the pandemic. Are they forever worse or better stephens making the same point about walmart. Applies to walmart too. Thank you. Josh, what do you think about the walmart call price target 160, can it get there . Its been a great stock really dating back to before the pandemic when they got series about ecommerce i think a lot of the things about the environment were in are accelerating with options. I think they will have that tail wind for a while i dont think much changes preor post vaccine in terms of Consumer Habits once they adopt doing groceries online it will hard to convince them thats not optimal anymore i think youll see people return to the stores but a lot of people keep doing what they have been doing walmart wins both ways i like the name. All right coming up, jon has unusual activity in the Options Market today. We want sthto show you the s p t sector map as it tries to hit a new closing high today well keep our eyes on that for you as well. We got a gain of about four points there you can watch or listen to us live or on the go on the cnbc app. The Halftime Report is back after this people talking now is the time to support the places you love. Spend 10 dollars or more at a participating Small Business and get 5 dollars back, up to 10 times with american express. Enroll now at shopsmall. Com. I am totally blind. And non24 can make me show up too early. Or too late. Or make me feel like im not really there. Talk to your doctor, and call 8442342424. Welcome back i mentioned jon has unusual activity today and a couple of names. Jon, tell us about it as Virgin Galactic is up nearly 6 now im the launching pad as you would say or i would say spce calls big time buyers of the august 1950 calls with the stock at about 18. 70. I bought those they expire a week from tomorrow keep that in mind. Ill probably hold these about five days. Second trade, another one that i dont talk about enough. Probably because i got out of it too soon i got out of this one at 170 now its pushing towards 200 its paypal. The september 210 calls aggressively bought during the daytoday this is like a month long trade. I also want you to tell me about lyft after earnings. You have calls there yeah. This earning cycle for lyft stock popped nicely. I took off half the calls. Then the uber news came out about their earnings which impacted lyft and i thought maybe this stock is still get up and go uber saying we might suspend operations in california whether that is chatter or not, thats impacted both stocks and the rest of my options finished worthless in lyft. They expire tomorrow but they are worthless right now. Rough week down about 9 . Coming up, keep your questions coming well answer them straight ahead. You still have time go to cnbc. Com halftime. You can tweet us as well were back in two minutes to do that what happens when a wireless carrier puts its customers in charge . Well, the good news gets shared. And it gets rated 1 for customer satisfaction. But dont just take our word for it. Take theirs. Its your wireless. Your rules. Only with xfinity mobile. Call, click or visit a store today. Lets do it. Lets answer your questions. Josh youre up first with Simon Properties and amazon talk about fulfillment secenter, is simon a buy its not bad as far as a reopening trade goes id buy it for a trade and for that reason rather than taking an individual retailer the amazon catalyst, im not sure thats really going to have a big impact on simon any time soon i prefer prologis in that space, which i own. Jon, to you from storm in amsterdam. Is vodafone a buy . I bought it a week ago. Its moved up a little maybe 50 cents, 60 cents, the stock has. They will be spinning off the tower unit in europe i think thats another bullish sign for you id hold onto it kerry, looking at oil improving, does it make since to go back into a refiner like phillips 66 . We own it its only energy stock we own. Its not been a good stock we do like it. Refineries are a very scarce commodity. They are incredibly expensive to build. No one is doing that one thing phillips is doing is they are starting to use recycled material and to create fuel from it i think thats a real positive lastly, degus were very international today is synopys a good stock the buy . You are long on that name. We own the name a 30 billion company. We like the profitability. Its in the upper half for return on assets we like the price at these levels we think its fairly priced at an oerpperating cash flow level we like the expectations on this positive forecast revenues this is a stock that you want to bi buy at this level. We are holders we like the fact what its doing in social media, were getting a lot of good readings on social media. We are going to take a quick break. The s p is now within one point. Lets put up the s p its within one point of a new closing high 3385. 24 is where we sit. Moving a little sideways today trying to move a little sidewises. Gold prices are down 5 in a week as well well get the futures trade there when we come back on the half keep your eye on the s p well see you on the other side of this break. Motorcycle riders love the open road. And geico loves helping riders get to where theyre going, so to help even more, geico is giving new and current customers a fifteen percent credit on their motorcycle policies with the geico giveback. And because were committed for the long haul, the credit lasts your full policy term. The geico giveback. Helping riders focus on the road ahead. It is time for the futures outlook. Gold is turning positive, still down around 6 this week, after a big surge its had this year lets find out how to play the rebound. Lets bring in bill beruke i was wondering whether gold had topped out last week, later in the week for a variety of reasons, whether the dollars had topped in its move or bottomed in its move as well. The dollar may start rising, gold would start falling where do we go from here we did a range extension. I think theyre starting to go in the meantime seen jobs tick up a bit, a bit of inflation rise, vaccine hopes out there. Inflation can wait on gold in the near term. All of that has weighed on gold, but i expect volatility to continue the longterm fundamentals are still here the fed is not hiking rates until 2022 theyre emphasizing more stimulus needed. Depending on how it bottoms, i think 2300, up to 2800 is in the cards. This is only the middle innings. Without, thats a very big ve anyo bill. Well take a quick break and do final trades, next come on in, were open. All we do is hand you the bag. Simple. Done. We adapt and we change. You know, you just figure it out. Weve just been finding a way to keep on pushing. Weve just been finding a way to keep on pushing. people talking now is the time to support the places you love. Spend 10 dollars or more at a participating Small Business and get 5 dollars back, up to 10 times with american express. Enroll now at shopsmall. Com. music anncr give customers access to precisely what they want, when they need it the most. With adyen, the payments platform that delivers convenience for all. Adyen. Business. Not boundaries. It is time now for final trades degas, youre up first. Yeah, so we purchased thermofisher we looked at return on assets, beating surprises, earnings, revenue, also forecasts are doing well valuation is fairly priced we really like the stock, and social media really likes the stock also this is one of our buys. Good having you again on the show. Thank you. Carrie . First republic its our favorite only bank stock it has the San Francisco base, covid resistant and great strength in the housing mortgages, mortgages and refinancing. Jon in a jair jan in. Builder first supply, a lot of call activity i ball it during the show. Quickly, josh brown, to you. I added some mover this week. Good stuff. Thanks, everybody. Thanks for watching as well. The exchange begins now. Thank you, scott in this hour im Tyler Mathisen in for kelly for those still under employed, more stimulus cant come soon enough what if it never comes well look at the potential fallout for the consumer and the markets. Plus a closer look at well Health Care Stock thats up 90 so far this year the ceo will join us with whats working and whats next for his company. And Home Improvement stocks keep nailing new highs