Jim, jon and shannon lets get a check on markets this hour. Stocks are plunging again. Off theirs worst levels and the nasdaq is the biggest loser of the day led by the Technology Names. The dow was up at one point this morning almost 250 points. Now has done a complete uturn and is down triple digits ina big way. Theyre off 425 points thats off the lows of the day the last couple of days, has it made you frightened of what could be to come no. Not at all i think this is healthy profit taking i think whats going on is this massive rotation from growth into value if you think about it, the russell 1000 growth index even after this pull back is up 21 year to date you know that apple and nvidia and zoom are up 340 from the march lows in is healthy i think the rotation makes sense. The reason it makes sense is because the Economic Data continues to surprise to the up side were recovering faster than anybody thought. This is on top of yesterdays data part of consumer manufacturing now youre seeing better job numbers thats encouraging still have a long way to go. Should work better im not abandoning technology. They could take a pause and maybe the new leadership will be the cyclicals for the time being. Is this, jim, a matter of new leadership, to so to speak. We highlighted so much its been within the s p 500, technology, Consumer Discretionary and Communication Services that have far and away been the leadership in the s p 500 and amongst those maybe six or seven stocks that have been powering the gains we have seen this show play out in the past. It never really comes to fruition i voiced my concern earlier this week. You want that rotation to come during a position of strength in the market if it simply the value names dont go down as much as the Technology Names in this rotation meaning the whole market is coming down, thats pretty much cold milk for me a lot of these value name, you look at financials, they are still way, way under their highs. They are down on the year bp same is true of energy a lot of material stocks as well i hope our watchers are not getting freaked out. Many people have been saying were due for a correction. Wouldnt mind a pull back to put some cash to work. We cant fall into this trap of saying the sky is falling. Im not going to buy stocks. I want to point out last week i said that visa is a name id like to add. Visa should perform nicely in that regard. Im happy to have picked it up at 201 today they are the ones that led to the upside what exactly goes on the Shopping List of your constructive it doesnt feel like the a panic right now. Interest rates going higher. There are other parts of the stock market that arent selling as much. Its a healthy pull back variety. What goes on the Shopping List whats going to be here is theres going to be a pull to into these names i continue to feel this is a defensive trade. Maybe you feel better about buying it after a couple of days of a dip more importantly, i think that you do want to make sure youre looking at the cyclical sectors and looking at Quality Companies there. I think the Shopping List is not all that differentbut perhaps this rotation away from technology will offer people the opportunity to look outside of the tech sector and Communication Services, for that matter, to other parts of the market i think this creates an entree for investors to become a bit more diversified it probably offers an opportunity to have discussions about diversifying concentrated positions in the faang names and being able to put that money to work in other areas of the equity market. Growth in general creates an opportunity for materials and industrials. You brought up the faangs thats where i want to take the rest of this discussion in the beginning part of our hour john, theres been a lot of made specifically in some megacap tech and Communication Services. Nous been kind of reported on by the wall street journal as well about Japanese Investment conglomerate soft bank being one of the largest players in single Stock Options tied to Megacap Technology stocks. It could be in the billions of dollars worth of exposure and thats been driving the market here is a graphic were showing viewers right now. What i want to tell you is as of june 30th, according to regulatory filings, soft bank had massive positions in big names like amazon, alphabet, adobe, netflix, microsoft. Its a who is who list of all of these megacap names. What is happening in the options market, jon, that is causing all of this and is soft bank really to blame i know what you read and what you intuit last week is this hedging. Why are we seeing so much volume and why is volatility picking up to the upside in the market. In other words, we werent melting down last week but we were seeing volatility move from the vxx from 24 last week to 27 on friday and today because of yesterdays action and today spiking into the 35s it seems the reason was just as the Financial Times has cited, there were out sized bets placed by soft bank bets on these individual names everything from apple and tesla and alphabet, facebook, you name it anything that would be somewhat faang related and in particular in tech. Now, what that did was it caused the skew that we normally see where out of the money puts, for instance, skews higher than calls. The calls were skewing to the upside as well there was nobody that wanted to provide the upside because apple was making that extraordinary move into and after it split so was tesla as those happen, dom, we saw a lot of folks basically panic whether it was soft bank or the marsh of the ants as well. All the the little traders that followed in on some of those big upside move, most of those little traders arent the ones that are the catalyst for all the buying that had. When ever we talk about people making these out sized bet, somebody provided that access to the markets. Its the likes of deutsche bank, morgan stanley, jpmorgan, go Goldman Sachs that becomes a feeding frenzy. Nothing better highlights that than tuesdays action and the reversal that we saw very aggressively yesterday when they more or less just pulled the rug out from under the market. Right now, id say that much of what we saw on that run up post those splits that i just spoke to, as well as these sell offs now yesterday and today is because of the absence of that big whale. Thats what the Financial Times called him the soft bank trader, a whale. We know our viewers and listeners are trading professionals. They know what skew means. Youre saying there was a Huge Movement in prices for similarly priced call options versus put options. People started to pay a bit more on the call apgoptions side we saw soviet unioigns of that last couple of weeks ill turn back to stephanie. Given the idea that the market has manifested the way it has now with all of that options activity and hedging activity and everything else, what do you do with Technology Stocks . Is this the buying opportunity do you go back in . Are you nibbling what is the strategy there well, i think you can be selective. For example, i was buying broadcomm earlier this week. It didnt feel good yesterday. They had a great quarter last night and they are benefitting sfa substantially from their wireless business. Its going the grow 50 . Thats all apple its 5g. I still want to own the cloud names. The 5g names the data center names. I dont think this is the buying opportunity though for the mass of tech. I dont think that this is the were over just yet i think this pull back could last a little bit. I think this rotation really could have some legs i have been saying for a while, you have a barbell owe o you own the secular growers and you want some of the cyclicals i will be a buyer of some of the Technology Companies on the pull back theyre up so much from the march low. Jim, i know that they are up a lot. Apple is now down marketedly from where it was just three days ago is it possible that apple can go down say another hypothetically five, ten or more percent given the pull back we have seen in those shares let me move on from the obvious answer of yes. Let me say this, im not worried about apple or microsoft or amazon falling out of bed. First of all, i dont think its likely where i think we should be talking are some of the other high flyers that got way too ahead of themselves. Its not that they are bad companies. Theyre going companies. Im talking about tesla, zoom. These are Fabulous Companies we were on two days ago, i think tyler was on and were we praising if virtues of zoom. It was up 44 that day it was up 7 fold on the year one of the things i talked about on wednesday was you have to ask yourself at that price, whats priced in. My thesis was too much good news is priced in more good news that can possibly happen over the last couple of days you have seen those two stocks, which in my opinion, got into a bubble territory, pull down quite a bit. I think theres probably a bit more to go there they got so high they sucked in buyers on their way up those buyers, some of them will be looking at losses right now and saying, what did i do . Those names could be ones where selling begets selling back to your original question you look at apple and you see their raising their production for the year 5g is coming out their multiple is not egregious. I wouldnt say that by any stretch of the imagination not in a 0. 6 . Theres a small hand full of stocks you have to worry about i seem to remember you maybe being a trader, trafficker in call options tied the zoom have you done anything with that position that trade that triggered whether it was i got zero hedge tweeting me now. Its not soft bank i dont know who the whale was that triggered the trades. All i know is that particular buying activity, billions of dollars of additional upside pressure on the markets basically pushed a lot of folks like me out of some of these stocks you just couldnt justify it zoom, tesla, juniper, theres a host of stocks over the last three or four trading days i had to exit either because they just became way too extend eed and ta call skew was so extreme again, im throwing this back to you because youre the one last week that really noted that first when we were looking a t this, you said, is this just hedging or what the heck is going on why is the vxx moving up so dramatically at 26 while the market was flat to rising. Its willing to provide that upside call speculation except at very, very dear prices. It goes back to getting more of the men and women back onto the trading desks at jpmorgan, deutsche instead of these pods all over the country as well as the trading floors riep right now what you dont know really could kill you. I think a will the of lot of usg at the trades saying whats going on the more uncertain people are, the less willing they are to provide that access to the markets. Again, that skew then gets really wide. Im going the take a look at this particular debate about whether or not the markets should be bought at this point or whether or not were going to revalue things and say maybe were due for a pause. Dan has a note out there saying the sell off is a speed bump on a path still higher for tech stocks ahead he says we believe tech stocks could still go another 20 to 25 higher looking ahead we view pull backs today as opportunities to own the secular growth stories in cloud, psyccy security and tech faang. Shann shannon, im going to turn to you for this one the bullish argument is this is a pull back that should be bought is there is ae nar owe managing peoples money where youre out there nibbling and buying because of the pull back it depends on where youre starting your position the challenge with the names has been to jims point, these arent the necessary the names that are distressingly over valued these are companies that have grown into their valuation because they executed over the last six months. Not just as a defensive trade but they have been executing on the top and bottom line. I think if you look at your clients portfolios or your personal portportfolio, look att in terms of where is your exposure theres certain things you can could invested in where you have out sized technology if youre supplementing that then youre probably over exposed in this environment where we see the potential for some of this rotation. However if you took a lot of money off the table back in march or youve been in fixed income which is a difficult place to be right now, youre looking to add incremental risk, your time horizon is the next several years, were anticipating Economic Growth to improve. I think that you could be nibbling here but if youre trying to time these trades just perfectly, you know, in a name like microsoft, youre probably going to be enjoying being an investor for the next five years. I wouldnt with so worried about making sure youre getting it today or tomorrow or next week on a pop. Lulule lululemon has been downgraded. These are tactical moves that have happened because of the run up is now then a scenario where the bears can say you know what, its time for the pause . Those have different drivers. It comes back to looking at the particular company and why they have done so well. Lulu, for instance, i dont own it its top of the line retail. Their demographic has been disproportionately unaffected by covid job losses if you look a at each of those companies thinking about the potential for those stocks to continue to rise in price and potentially expand their multiples, we have to look at it from a stock to stock basis. However, to stephs point earlier in the show, if this value rotation, this maybe rotation or baby rotation as im calling it right now because we dont know these are absolutely high growth names are going to be sources for cash for people reallocating within their equity portfolio. At this point its about rel tifr opportunity stephanie, we talked about broadcomm but you added some mcdonalds and nxp semi. You also sold out of paypal. Interesting moves. Why . Im trying to buy low and sell high. I was buying it at 100 ink its had a nice run. I love the secular story but its a bit rich for my blood thats why i did put it into broadcomm and nxpi i think the auto is just beginning. 14 of their revenue is tied to mobile payments as well. I like their mix and Customer Base i think theres margin upside. The stock is like flat on the year im trying to get stocks that have a lot of upside that havent run. Lovely Company Great management team. Great balance sheet. I wanted to take somegapes there. Put it into mcdonalds which is lagged its trading at 33 times forward. Its not cheap those earnings are trough earnings as you reopen the economy, i think the revenues will come back i think the margins will come back its Great Management Team good product cycle im trying to buy low and sell high you mentioned zoom, also tesla. You also sold out of a number of stocks and call positions beyond that as well can you take us through the other moves made there sure. Adt. Exited chegg but i still have options on it. What i was doing was in many cases taking off some of the direct exposure with the equities and going with the stock surrogate which is options or option spreads. In some cases, in fact, the last three that i named, i exited those positions completely didnt simulate a long position over on the options side of the street as far as options, ino, lrcx, tilray a lot of options over the past three or four trading days im feeling better about it. The sell offs were so extreme and tesla is once again kind of falling into that category where it was 5 30 when they announced that 5 billion raise on tuesday. Today it broke through 400 pretty hard. Thats looking a little more interesting again. All right this is just the beginning we have lots more stocks to talk about and trader moves to make sheer. Transportation stocks coming off the worst day since june some of our experts own stocks are in that Industry Group that debate is straight ahead on halftime report. Were back in two minutes. You can go your own way go your own way your wireless. Your rules. Only Xfinity Mobile lets you choose shared data, unlimited or a mix of each. And switch anytime so you only pay for the data you need. Switch and save 400 a year on your wireless bill. Plus, get 400 off when you buy the new Samsung Galaxy note20 ultra 5g. Welcome back what youre seeing is a look at the markets right now. It is red. Very much so but ill point out that at the lows of the day, the dow is down over 600 some odd points were down about 356 right now yes, its still deep in the red. Still very, very much so off the session lows the nasdaq off by 2 just about having its particular declines on the intraday basis the russell 2000 out performing. Lets get to the headlines with sue. Good afternoon. Here is whats happening at this hour ahead of the labor day weekend, the tsa is reporting the most daily passengers through its check points since the pandemic began. Thursdays total of 878,000 people is more than ten times the april low but it is down sill 60 from last years level. Spain and italy reporting the highest number of new infections in a singling day in some four months moments ago france reporting nearly 9,000 new cases the countrys largest one day increase so far. The led head of the world Hh Organization says vaccine nationalism will prolong the pandemic and renewing calls for United Global response so far the u. S. Is refusing to join the w. H. O. s vaccine coalition. Off the coast of sri lanka, a Burning Oil Tanker carrying more than two Million Barrels of crude. The fire has been contained away from the ships cargo and the risk for an oil spill is low thats the news update this hour back to you. What is the dynamic thats playing out. Dow transports down again u. P. S. And fedex are the biggest names both rebounding today. Analysts said some of those declied declooins are profit taking. Stocks gaining 50 over the past three months both had holiday level volumes but the recent guidance from the cdc telling states to be ready to deliver a vaccine by november 1st is being seen as a potential signal the ecommerce e motion could be ending its already been a bit of a double edged sword because the majority of that volume are seeing is residential tlifr ri which is a third lez profitable than business to business. Today, were seeing the concerns about an ecommerce slow down weighing on the big trucking names. The nations largest trucker all of them down keep this in mind. Made during the pandemic has online spending falling even with the holiday season. Even this company seeing a decline coming this year back over to you jim, i want to bring you into the discussion you own green briar and alaska air. What exactly do you think . Can this play out longer term . Yes that point has made very clear with Alaska Airlines american and united have a very big problem. Its a bad combination where youre increasing your debt but your basic earnings power are going down you look at Alaska Airlines, it has no debt. The Airline Industry has a problem. I think alaska will survive and thrive on the other side greenbriar is a rail car manufacturer goods need to be transported and being transported by rail which requires rail cars to be built, refurbished, repaired and thats the bread and butter they do it well. They are attractively priced lets turn now to some of the bigger names out there as well step stephanie and shannon. Shannon whats your take on why union pacific, why u. P. S. . Its not just that former Vice President biden loves the rails. Its that as we see this pick up in economic activity, goods need to be moved. This is a u. S. Based company theres still a lot of opportunity here we sold fedex last year. We bought u. P. S. This year largest package provider, deliverer in the world and continuing to be try to evaluate opportunities for them to create a stronger brand outside of just being the default shipper for ecommerce stephanie, what exactly does this mean . Do we have to stick with this trade a while longer how does it play out over the next few months to year . I dont know why you wouldnt this group is direct beneficiary from the recovery in the economy. U. P. S. , i dont understand why it trades at a three multiple discount to fedex. You will see volumes continue to surge. They are Getting Better pricing. You have opportunity to see Margin Expansion story not only from the new ceo cutting costs and cutting overhead which he doing but youre also going to see this mix shift you can see earnings double from here. They are focusing on efficiencies getting down to more competitive levels. I think the companies have a ways to go im holding on and theyve been pretty good performers on the year all right sounds like plan to me. Frank, while we have you here, you have a special edition of Summer School tonight at 6 00 p. M. Eastern time. Whats on tap for that hour. We have a lot one of the biggest things well talk about is fact this may be a sell off for a lot of new investors. People that enter the market through the pandemic well have a halftime regular talking about what you should do if anything to respond to the sell off that depends on how your portfolio is structured and your time horizon well look at some nonfaang tech plays a lot of people may not be that familiar with. Big show tonight. Be sure to tune in thank you very much. See you later today. I want to point out a note because stephanie brought up the autos. Check out this chart of tesla. Tesla. It was down the lows today 372. Its up 2. 5 on the day. It seems as though theres been some dipbuying in this electri car maker. Well continue to follow that trade and see if theres anymore momentum on the up side. Tesla pretty much in the red now very much in the green well see if that sticks jon has some unusual activity trades coming up next a check on the s p 500 heat map. Were seeing some movement a green speck or two financials and industrials leading the way higher just about flat on the day as a reminder, you can watch or listen to us live on the go on the cnbc app halftime is back right after this machin now you can trade stocks and etfs for any amount you choose instead of buying by the share. All with no commissions. Stocks by the slice from fidelity. Get your slice today. At morgan stanley, a global collective of thought leaders offers investors a broader view. We see companies protecting the bottom line by putting people first. We see a bright future, still hungry for the ingenuity of those ready for the next challenge. Today, we are translating decades of experience into strategies for the road ahead. We are morgan stanley. Welcome back apple shares down 10 in the past two trading days. Option traders are making some big moves in that name john, what can you tell us about the action youre seeing in apple options . As i said, it became tempting when the stock had traded up two. I believe 137 or more a share just two sessions and they put the whip to it yesterday as they did and droefr it down again today it broke 111 today i bought more shares dom, because i saw this the october 95 puts were sold aggressively for 2. 35 somebody stepped and sold 13,000 of those thats 1. 3 million shares that that person would have to own if indeed they were forced to by those put owners selling a put is a very bullish position because somebody could have to put on a leverage trade to accommodate the obligation that they took on. I sold those puts. I also bought apple calls. Take a look at this one. Another one of the big names in the faan gman when you throw the m in there microsoft. They stepped up and sold puts in a big way. I think these were shrewd traders. I dont know whether its soft bank or anybody else these look like they were opportunistic option sellers that were looking to capture premium by selling well out of the money puts i joined them and added to their long positions if we could put up an intraday chart i want to point out something and lever ave to interpret apple stock opened up 120 and change at the lows we were at 110. 89 were trading at 119. 38 obviously some people stepped in throughout the course of the last few hours and bought apple shares well continue to monitor that one. Apple and tesla seeming to catch a bounce into the session. Stocks are down bouncing out the session lows youve got some questions. We have some answers about what is this volatile market. Ask halftime is up next. Send us your questions go over to cnbc. Com halftime or tweet at us halftimereport. Well be back in two minutes yup and thats faster . Faster, yea but is it reliable . Ah huh and secure you should consider making a big deal about it bigger . I said bigger oh, bigbigger deal bigger than what im doing . Its not complicated. A 5g Network Needs a 5g device. Now everyone including existing customers can get a free Samsung Galaxy note20 after tradein. Now you can trade stocks and etfs for any amount you choose instead of buying by the share. All with no commissions. Stocks by the slice from fidelity. Get your slice today. Stocks by the slice from fidelity. If i could, baby id how can i, when you wont take it from me you can go your own way go your own way your wireless. Your rules. Only with Xfinity Mobile. Stephanie from allen in phoenix, arizona is zoetis breaking out i like it whether its breaking out or not. Its the number one Animal HealthCompany Strong execution they raised guidance we love our pets u. S. Product sales up 19 was not surprising for jim from terry in san diego. Whats your take on General Motors three things really quickly auto sales are picking up here in the u. S thats very clear. Whats also clear is that within vehicle sales pickup trucks are where the big margins are picking up the company should pin out the electric Vehicle Division and that will unlock tremendous value in the stock the first two are sufficient the third would be really nice gravy on top for jon in times of increasing volatility and sell offs like september 3rd, how do investors buy protection for their portfolio. How does one calculate how much protection to buy . Thats a great question if triple qs for the nasdaq portfolio. You dont want to do that on days like yesterday or today the volatility just exploded which means the premiums are sky high buy them when you can. Not when you have to i think if you follow that, youll be a much better and richer investor. Shannon, how do you feel about treks in this environment. We bought there back in june of last year its about twice the price i paid for it. Its been a nice gain in this stock. It might be a bit of a pull back in the Home Improvement stocks as the reopening stock trades. We think it will continue to be Home Improvement its a 54 in just the last 12 months. Thank you very much. The nasdaq 100 lower again and coming off its worst day since march. How the future traders are playing it thats straight ahead on halftime report. This is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Welcome back time for futures outlook our futures outlook traders say the nasdaq is due for an even bigger pullback. Im iuorio, Brian Stutland jim, whats in store nfor the nasdaq i thought we would have an 8 to 12 pullback. We basically got that with the 1100 and change. Nothing has really changed one week ago j. Powell looked us in the eye and said he would go from being all in to really being all in that hasnt changed. Whats changed is the market position the story cant get better in terms of the government involvement at this point. The nasdaq has been up 80 since the lows a 12 pullback isnt much. I still like the 11,000 level. I took off my short edges and became a little long at that level. I plan to do it again if it gets there. Brian stutland, what are you doing . To iuorios point, when you look at some of the technicals here, that support level, 11,085 or so is really where we bounced. Below there, 10,250 is the next lowest level, and if things get really ugly, 8800 on the down side, i dont know if we get there any time soon. But if you look at that 11,000 area, thats all the names we talked about the show here today. Apple, tesla, amazon ive seen other people taking their hedges off as well when i start to see those hedges come off, i see the market tend to go significantly higher were looking at support for the 50day moving average in the nasdaq as well on the cash side of things, Brian Stutland, jim iuorio, thank you very much. We have final trades straight ahead on the halftime report. Keep it here we are back after this break all right, the dow is down just about 311 points. We were down over 600 at the lows of the day. The s p down by 1. 5 , 48 points in the nasdaq, down 2. 5 , 11,000 there. Keep it right here we are back after this you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Dont get mad get e trade and start trading and whether we connect pnc kover the phone, online,ing. Or face to face, were here to help utilizing our resources as one of the nations largest banks and a local approach with a focus on customized insights. So youre ready for today. Some Companies Still have hr stuck between employeesentering data. A. Changing data. More and more sensitive, personal data. And it doesnt just drag hr down. It drags the entire business down with inefficiency, errors and waste. Its ridiculous. So ridiculous. With paycom, employees enter and manage their own data in a single, easy to use software. Visit paycom. Com, and schedule your demo today. Tuesday on cnbc, tune in for a special program at 7 00 p. M. Eastern time its the path forward, race and opportunity in america. Our own jon fortt and Andrew Ross Sorkin will take a look at black leaders in Corporate America and hear ideas and potential solutions from ceos, investors and entrepreneurs, tuesday, 7 00 p. M. Eastern time. And on wednesday a special edition of the halftime report. We will discuss a new initiative of conquering diversity. We have founder and chairman of the board list also with us, mercks ken frazier, z frazier, zillow ceo. Its a whos who thats coming up wednesday on the halftime report. What do you got . Orthopedics is growing. There is really on oligopoly here we believe they can continue to expand theyre only about 20 to 30 market share in both of those right now. Jim lev an that wianthal, to. Tech gathers all the spolts, but this is one worth watching for a breakout and jon najarian. Tmobile. One of the largest 5g networks out there and i think theyre going to be a big beneficiary of that 5g iphone 12. Last, but certainly not least, stephanie link. Ppg its down 8 year to date. Its an auto and housing play. They had a great quarter they beat, they raised, they had a costcutting role in place that should help margins and Free Cash Flow its actually quite strong like that name that does it for the halftime report. The exchange begins right now. Thank you, dom, and welcome to the exchange, everyone. Il its another big down day in the markets as investors sell into the weekend. All three indices have lost those gains and then some. The nasdaq down 255, the nasdaq the worst performer. Take a look at this intraday start. We got a jump as