You are seeing some signs that suggest broadens breadth you had this move in hold builders and transports. Its not a reason to discount that action. Forget about all of that those things are not the tech trade. Its not its clearly happening. Stephanie and pete have been right all along throughout the course of the summer they have said things are Getting Better things are broadening out. I have been a nay sayer but Market Action is telling me they have been correct and i have been incorrect for as long as thats going on, i think theres a reason to be encouraged that we could see continued new highs. As you know, the viewers know. One of the things i want to talk about is the three leading sectors today are low rates plays. Utilities are ripping. Reits look incredible. I added Simon Properties group which we talked about spg. That thing looks like it wants to break out right now of course, youve got communication stocks being the best performers. Im in verizon and that group. Nike hitting new all time high you have shake shake up 29 . Free port, you mentioned materials doing well easy to catch and run with what do you think . Im looking at the things i canna agnalyze i can analyze the recovery again today we had better than expected manufacturing data. Manufacturing is in a v. Natural lly industrials should o a good job in terms of the sector i want has housing has actually really been very amazingly strong and if you listen to lenar today, they talked about 16 new order growth thats astounding to me. Materials, copper is at a 36month high. I do think is interesting is all of this mna that were seeing. Then it expanded to uber and serks seimans. Then we have a ton ov action going on nine deals in august over 5 billion. Thats the best number ever. To me, that shows ceos are feeling more confident they are seeing a broadening out maybe in their business. They are seeing better visibility is it perfect . Absolutely not i do want to get another fiscal bill that something very important in my mind. If we dont get it, we will sell off. You have been making the argument theres more or wider breadth than people wanted to give the market credit for theres been a lot of hype and rightfully so about a highly concentrated move in the market from the megacap tech stocks but as you have looked below the surface. Making these calls thats a story that needs to be talked about more. We have had a rotation of some sort okay, maybe its been a bit stealth. The question is does it continue and what does that mean . I think it can continue when were looking at a lot of these various areas that have been participating and you mention about the breadth of the move, i think theres a lot of room for many of these various names. It doesnt mean you lose your discipline and you just think the sky is the limit i think what you have to do is just continue to look at this market and know theres going to be some bumps in the road. We know the economy has very, very good parts of it right now but also some parts that are still very weak. I think the combination of all of that. We talked about rails, different areas. Steph was just talk about copper look at free port. Copper yes finally over 3 there are over the last week or two where we finally broke through that were seeing a lot of movement there in the material space. Its housing, material, transport. Theres all kinds of different areas of the marketplace, have been participating it doesnt get talked about nearly enough as biotech you look at where those names are and you have those particular indexes have moved, they had monstrous moves yesterday. There is lot of accelerated mma going on suddenly. Could we dip again i feel like we could theres no doubt in my mind that we could i think theres a lot of names right now that are still on their recovery that still have plenty of upside as well fund manager survey from bank of america its a bull market, they say 58 of investors say a new bull market has begun they talk about rotating now not chasing stocks following that huge rally from the march lows what do you make of that my crystal ball is cloudy start over at the top forgive me start your answer apt the top for our viewers sake because i think your microphone wasnt transmitting lets begin again if you dont mind sure. I was saying that i continue to maintain that my crystal ball is a little cloudy so i cant answer definitively if were in a new bull market or not we were in crazy territory it doesnt feel good now we have rallied back i continue to maintain the things that i like we have been talking about what is the uncertainty are we going to see more volatility i believe yes. The economy is picking back up the market is reflecting that. We still dont know exactly when well get a vaccine even though it looks positive. Were in an election season right now. I think the theme is diversification. We saw value pick up a little bit. I dont want to gloss over the fact there are some significant questions that still exist within the market particularly stocks are too expensive or not certain parts of the market may be deemed to be cheap. I think the most interesting thing within that has nothing to do with the fed, steve it has to do with how the participants in the survey view the stock market they say 89 , 89 of respondents op yours believe that stock prices are too high relative to their out looks in economic earning and growth what do we do with that . I think its a red flag of caution. They think the stock market is ahead of where it ought to be. That happens from time to time and your traders will know how to trade that. Not that necessarily people at home know how to trade that. They also point out that the commentary we got is its a bunch of stocks that are pushing the market higher and that is a reason why fundamentally it looks like the market overall is out of sorts with underlying growth i will say in yet another nod to stephanie, 67 are pointing out that the recovery can going faster than they originally forecast they are looking at some inflationary impulses in the economy. This may be a drum roll, 53 say the recession is over. Thats a big plus. I will say 47 dont think its over yet i think theres still a ways for it to go theres still challenges to the economy. I dont think stephanie would say were out of the woods yet the recession is over and the recovery is going faster that helps justify some of the higher valuations we have. Thats where i wanted to go i was going to say if you got a faster recovery, steve, if you have a recession over and then the over riding factor of everything is the umbrella in that kind of environment with low Interest Rates which we have and will have for ever, assignments its justified let me just talk about that um brbrella which is getting wi and bigger circumference around it the new thinking is the next fed move will be a hike. When does that hike happen february 2023. I think im going to go take a very long nap for two and a half years or Something Like that and by the way, thats six months longer than they estimated that same back in july. This new fed strategy of average inflation targeting seems to have have an immediate affect in lengthening out much inflation it will tolerate before it hikes. What do we do with that what do we do with the survey . First of all, do we agree that stocks are too expensive and if we think they are expensive, does it matter in an environment where growth is faster than perhaps we thought it was going to be at this point. The recession is over if you want to make that case and then youve got the fed lifting all boats. Does it matter i gist literal ljust literali actual laughter that the new thinking is the fed hike that may be true. We may be talk about four or five years from now. Lets qualify that dude, the fed has been missing its inflation target for 11 years theyre not all of a sudden going to catch up to it. Sure great. I want you to answer my question are stocks too expensive or not . Thats the principal debate of what were having right now. Some are. Some arent. Also thats kind of a cop out answer no, its not. I heard steve cite the respondents in the survey saying stocks are too high and some are siting that. Its a few stocks pushing everything up. Whoever said that should be unlicensed and dropped out of the industry every bull market has leaders that push the market up. Thats literally how an index operates the largest stocks become larger you can go back through history. You wont find a bull market that went led by 50 or 100 big Time Leadership names. The name change from one hour to another. That in and of itself as a verdict on whether the stock market is too expensivedoesnt really work for me and it doesnt work for anyone who has any Historical Context for what a bull market is supposed to look like. Why are people saying its too expensive . Its too expensive relative to where the economy and earnings are. Given where the economy really is and what earnings projections truly are, do stocks, the s p, should it be but 5 from an all time high . I think thats the crux of the question were saying maybe you can justify that because you think the recession is over and you think the fed is your friend forever then maybe its cool nobody thought you would see a v shape recovery in manufacturing. Thats just astounding to me the ism, the pmis, new order, manufacturing is back. Its only 12 of gdp it is a ult plier effect the consumer is hanging in its very plausible. Its very doable numbers for500 have started to go up fla operating leverage is let me finish. Its very, very powerful you may not get it until the second half of the year but youre going to get it i want to ask if the upgrade in earnings is exactly what this current price level expects and really it would be a real disappointment if those earnings did not start being pushed higher and whether or not stephanie, in your opinion, is that a reason to bid stocks higher yet again or is that upgrade priced in and were really already baked in thegoo news of this faster economic recovery of earnings coming back thats a fair question. Pete, how would you answer that . The market has factored a lot into this point. What its come down to for me steve and scott, when im looking at these various names and one of the questions you threw about is you asked about what names, are there names that have gone too fast obviously, there are ill give you a great example. You look at Something Like zoom. This is an absolutely phenomenal company. They have done everything right. Their growth is extraordinary and. It all makes complete sense. As i said to you last week, this is also a stock where when we get vaccines and we will and its just about the timing and i think its going to be early 2021, but when we do, that growth number will absolutely slow down. Im not saying its going to end. Its not thatthey wont grow any longer but they wont be growing at nearly numbers that they have. I think thats just clear. I would throw peleton in there i would throw a lot of different names that we call the stay at home names we pulled a lot of things forward. I think you have to look at the companies that not only were they Strong Companies before they might had a weak moment or two and theyve got growth it would be in the chip space. It trades at a huge multiple when looking at that stock, you say look at the growth and will that growth be sustainable i think that growth is sustainable for the near term. When i say that, at least the next year or two, i think its a Sustainable Growth there when we get back to that hybrid society i was talking about last week, theres other areas of the mark place that will suddenly start to reach out and get some of that market share as well not just those that have been here for the stay at home world. I want tiffany to answer that it haveny contin tiffany continues to make a bet on growth. I own both of those and some of the ones we talked about earlier. I think that were sometimes trying to paint growth with a broad brush. We cant do that i know i do believe theres still a case for peleton and zoom after we get back to more of like a normal situation i really do think things will change i dont think were going to go back to a situation or environment where people are working outside of the home nearly as much as we saw prepandemic i think things are changed forever. I do like peleton. Since their ipo, one of the things that i really, really hoped was they would drop the price on their bike. They did i love that. They did that about a week, week and a half ago they are adapting. They did catch a bit of a wave from everybody being in quarantine but they really adapted. They dropped their price they introduced higher price items. I really see them. I like the management. I really see them kind of going with the flow and really setting themselves up to take advantage of more growth once we kind of move out of this quarantine like situation. Steve, before i let you run, the bottom line of it, the entire conversation and maybe the bottom line of the conversation for the last decade, at least, is stocks are harder to value than ever. Stimulus from d. C. On top of that and maybe more is coming, you dont know what the value of stocks would be without any of that whats the true value of it with that i would never know, scott i have to say two things the first is that, i think an argument can be made for a higher repricing of equities overall because of the feds new strategy if it means the fed is going to be much less likely to pull the trigger to end the rally or take the punch bowl away, it suggests perhaps a higher permanent value for equities in that context the sec thiond thing i have to is im not sure if thats new news to the traders around here. They have sniffed this out for a while listening to powell who did raise rates and he reversed himself and now hawhats happen is there a fundamental strategy for keeping rates lower for longer before it was ad hoc and now its written on piece of paper not that the fed could reverse itself paper i think its etched in stone at this point its etched in stone. That underscores the reason why we are where we are. In the story for stephanie and others is have you discounted that fact or is there more yet to go because the fed is not going to be hiking rates until perhaps february 2023. Especially when you know that whatever happens, if its bad, the fed or someone else will pick up the pieces last word to you and well move on. Last word to you and well move on. I think the market likes to climb a wall of worry. That 89 Response Rate thinking the market is too expensive makes me feel better think might have missed this move in terms of actually gettiget ing into equities in march and april. Heres the thing im looking at gdp for next year this year its all messed up i see numbers like 5, 6 for the year nec year baxt year based oe stimulus based on how nfiscal and monetar is based on gdp. What if we do a 6 gdp number. I dont think anybody is expecting that i dont think the market is pricing that in at all we have three built in. Thank you, steve. Apple and its trading higher ahead of its big product event kicks off under an hour from now. Josh is joining us with a closer look at what to expect new ipads and watches is the expectation for apples big show today. We expect tim cook to sfwintrod a ipad air its costing around 499 coming at a potentially good time for apple we know consumers are looking for devices to help them as they work, learn and play more at home remember in fiscal q3 apple reported ipad sales, 6. 6 billion. That was a jump of more than 30 . The highest june quarter revenue in eight years for the company were also looking for new watches. Morgan stanley is looking for a new series 6 and updated low end series 3 the watch is a small part of total Company Revenue but some i ve investors and analysts are excited about it only about 10 of iphone owners have an apple watch right now. Back to you. Appreciate it petes its your largest position is it a stock event at all today. Is no iphone today no big deal for investors. I would say its built in im here to tell you the last quarter, yes, it was the best in eight years for the ipad i think we probably all know and understand exactly why i dont know if thats going to be a Sustainable Growth sort of part of the business but the watch is he was just talk about how many people actually own the watch that are apple people. Very small number. 75 of those that are buying the watch are first time users it gives you a bit of an idea. Theres a lot of runway there. I still think and when i look at this company, i still want to continue to press upon the idea of this. Its less about the phone. The phone is very, very important. Its less about the phone. Its services, thats where they get all their margins, 60 plus percent and on the wearable side when you combine those two and throw in whatever is left of the ipad, youre talking about three entities that to match or exceed what were talk about for revenues in terms of the phone itself i think theres lots of room to the upside still and i think this event will show you a lot more about what they are doing and advancing in health and everything else. The analyst agree with you. Price targets keep getting bumped up. You saw probably right now, i hope you notice stocks Still Holding onto 2 trillion in market cap albeit barely. Tiff, you own it everybody on the show owns it. Give us your perspective i think were still fielding calls from clients wanting to buy apple off of the split again, i think that part of the hype and i want to be careful what i say because i really do like apple as a company. I love the connectivity. I love the products. It really does dominate the entire industry. I think part of the hype really is part of the price is hype and its branding. They are amazing at branding there hasnt been, in my world, a lot of chatter about this new event but i think for our clients, they are still calling really wanting to buy apple because of the stock split i continue to maintain that apple has really dominates the connectivity space when you hear a stat like 10 of iphone users have the watch, i bought one for the first time, a watch, in quarantine because this event has really kind of pushed people to want to work out and do certain things while they cant go to gyms. I think that will continue theres definitely growth for apple. Theres no other company like it well take a quick break. Ip i see theres some move on starbucks too. Check out this chart got an upgrade to buy. Well tell you the bullish call when we come back. You n tcorisn cawah lteto us live or on the go. Were back on the half right after this give you my world 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. We are back. I want eed to show you shares of starbucks. According to reuters, starbucks says august comp sales growth for the Company Operated stores was negative 11 during the month of august here in the United States august comp sales growth in china for Company Operated growth was zero. The stock was about 1 or 2 before i noticed that. Stock getting a bit of a lift on this news. Maybe the fact, pete, i dont know were looking right now to see what july comps were in china and the u. S. For starbucks you just sold your starbucks calls. You closed out that position im wondering what you make of this news. China is obviously a significant part of the growth story for starbucks. If that is at the worst stabilizing and at best improving even incrementally, maybe thats a positive for the stock and thats why its reacting, albeit slightly. I think the expectation is we were going to see better numbers as you put it for china. I think they do most everything right. The stock gets hefr when it starts getting up towards 90 its a great buy on every dip we had an an opportunity towards 80 i think thats great when we get towards 90, it has a difficult time i look at this one like i looked at walmart in the past in terms of the p e levels there are times i think its a great opportunity to give us an opportunity the buy. I think theres other times i need to exit in this case as it approaches 90, i just decided i needed to be out im trying to get context on what the numbers mean. What do you think of starbucks here i love it i think pete has it upside down. The stock has been up to the 90 to 95 level twice. When it breaks bovr this time, which i think it will, it will be no resistance that looks like miles of green field. At the end of the day, starbucks will do something transformative for the company globally the urban centers that they really lost as a result of the pandemic, those stores, many of them will be converted to walk up windows which will be starbucks to operate i dont think youll want to be out of this stock when it takes out those levels i think its a triple digit stock. I bought it in the 60s i bought more in the 80s and i will continue to hold it starbucks is saying Sales Recovery in the United States remaps about six months out. Same store sales were down about 11 in august. That is an improvement from 14 to the down side in july just wanted to give you that update wooem contin well continue to follow that story. Sue has the other headlines. Ill toss it to you. Here is whats happening at this hour. The World Trade Organization declaring u. S. Tariffs on chinese imports to be illegal. Its the first time the wto has ruled against tariffs imposed by the Trump Administration u. S. Trade representative says the wto is incapable of stopping chinas unfair trade practices and as a result the u. S. Must be allowed to defend itself Holiday Spending this year is expected to increase just 1 to 1. 5 from 2019. Thats according to a new study. Key factors will be splurging how much high income consumers do and how much belt tight ping takes place amongst lower household incomes. Actor paul rudd doing a Public Service announcement urgingurge ing millennials to wear masks. The psa ends with a message, wear your mask its science there you go youre up to date. Back to you. Sales in china was flat in august comp sales were down 10 in july they were down about 8 in june. Thats what youre seeing there. Steph, you have a comment, im told i dont own starbucks but i have in the past in china, comps were down as much as 90 . They started to improve down 40 . They are making progress were all catching china they are learning what to do right as that economy opens. They got it Fourth Quarter u. S. Comps. To see august down 11, thats incrementally better and they are headed in the right direction. On the time frame that the company has laid out thats the important story if youre going to be an investor you need the stay on that time frame the company has laid out which is still about six months away steph, thank you we do have a bullish call in retail our mystery chart is vf corp upgraded to buy. They say they see improving demand trends heading into the winter season. Its our call of the day steph, im coming back to you because you own the stock. I do. The stock is still down 25 year to date. That dividend is save. They are positioned well for the long term. Problem is, only 40 of their business is dtc, ecommerce and that kind of thing if you dont have the foot traffic, that hurts your sales i do like the brands compared to nike, its up 1 year to date i think youll get a recovery. The other interesting part of this story, at least according to this upgrade is they talk about potential mma targets and they throw out names canada goose pete, which you own. Goose has been interesting and volatile its had hard time on the recovery as we get towards the winter month, well see more out of them they have to big up the ecommerce into a much bigger aspect of their business those are some of the areas if people have enough presence and we talked about this many times, if you have that ecommerc pandemic if not, then you have some prubl. Lets bring in rahel maxim, upgrading gilead to a buy. Analysts say the deal is key to gileade pan expanding you can see the stock is up. Sea port global is initiating delta with a buy rating. The note suggests that if you can stomach the current airline volatility, delta is streamlines. It has dominance in lucrative markets. Delta is still down 42 this year but up 92 from its pandemic lows. Citi is initiating coverage of polaris with a buy price target is 120 also its Strong Financial positioning. Finally, western union, b of a upgrading the stock to buy analysts say that business has proven more resilient than expected and its Digital Business has doubled we should say the stock is down 16 this year but scott thats part of the reason b of a likes the stock. Thank you stay tuned pete has his latest trades coming up in unusual activity. Well do that next delivering alpha it is back september 30th. The tenth anniversary including justice of the peapmorga jpmorgans mary erdoes many big name guests rba aerhiquk break. When i was in high school, this was the theater i came to quite often. The support weve had over the last few months has been amazing. Its not just a work environment. Everyone here is family. If you are ready to open your heart and your home, check us out. We thought for sure that we were done. And this town said not today. Welcome back pete tracking big options buyers n nio is number one. This will be short and sweet. Take a look at this name october 2nd expiration they are going for the 23 calls. Theyre about 75 cents 4,000 were bought today. Pretty aaggressive they have a couple of weeks for this to work thats a pretty substantial move to the upside. Next, tesla. Tesla has been all over the map. We all know that its been an absolute high flier. Traded 6,000 contracts in the first 90 minutes today its been sitting right behind happen l every day in terms of most volume. Today its got massive volume that continues to move they are buying september. They are going right after the 450 calls. Those are about 13 they expire on this friday they bought 30,000 of those. A big bet tesla can break out to the upside they bought a huge number of the 500 calls as well. These 450s, im in them stock was right here at 443 when making these buys. Nikola, are you in it at all in. Ive been in it ive not been in it for while. Early on i was in it i kind of stayed away ever since. I think theres better places for me to go you couldnt get into it now given everything thats gone on or would you youre very short term oriented at times how do you view this story right now . No doubt about it i think this is really interesting company. Ive read that article that they put out. Its unbelievable. Yes, i would participate but im not in there right now i got to see something out there. I know they disputed this. The volatility is incredible thats part of the reason it makes it difficult that the applied volatility are through the roof because of the fact of all of whats going on behind the saens rigcenes right now. You think we would be more inclined with puts or calls . Probably depends on the day, quite frankly. They are trading everything in there as well. Thats been a very, very high volume trade over the last week or so because of news thats going on right now im not in it. I havent been compelled enough to i think jump in that. I did jump in tesla today. Did i want mean to put you on the spot its a all good coming up, well get you ahead of those numbers with trades, next stay restless with the icon that does the same. The rx, crafted by lexus. Lease the 2020 rx 350 for 409 a month for 36 months. Experience amazing at your lexus dealer. Experience amazing 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. The big events are back. Xfinity is your home for the return of live sports. All right. Welcome back stephanie i want to go through one of your new buys it is Xpo Logistics which we have heard on the show steve still owns now the linkster does. Now i do. Ive never owned this before, actually recently met with a Management Team excellent execution this company has done its transportation and logistics. Logistics is winning because of ecommerce transportation is the recovery story. They have a 1 billion Recovery Plan in ebitda by the end of next year. I think youll start to see earnings inflect higher given what i expect the improvement in the k the economy. This management steam is stellar. Small position i still like u. P. S u. P. S. Is up a lot tiffany, you own. What do you expect in this space as we just talk about xpo and steph throws up her hand for u. P. S. Yes i like fedex over u. P. S. They do report earnings today after the close with the increase in ecommerce which i love i think its up about 40 during this crazy time. I expect fedex to do very well, to continue to do well they really are positioned as the leader in expedited sl ed sg and International Shipping they can set the prices. I expect good things from fedex. I own it ive owned it for a while and hopefully ill probably buy some more this week crude is rising today. Hurricane sally heading towards the gulf coast a warning on demand for oil for the rest of the year well have those trades, flexion. Next. Incomparable design makes it beautiful. Stateoftheart Technology Makes it brilliant. The visionary lexus nx. Lease the 2020 nx 300 for 339 a month for 36 months. Experience amazing at your lexus dealer. Were back time for the futures Outlook Crude Oil catching a bit despite warnings that the demand still has a treacherous path ahead lets bring in jim iuorio and michael. Jim, you have the first word fundamentally we got some good numbers out of china in the form of retail sales and industrial production. We got some good numbers domestically out of the Empire Manufacturing number today we have the dollar which looked like it was going to break out on the upside and seemed to give up the ghost on that over the last two days. One thing thats not being talked about is important. I believe Morgan Stanley said they believed the feds policies to cause inflation not inflation until 2024, but i think if it settles strong today, above 3485, i think its going to 40. Bill, technically speaking, what happens next . We moved out of a wedge pattern, went back in the early afternoon and retested that apex and its moving north again. I dont think you can chase this because there is a lot of reservation for 30. Im wanting to be patient. Im looking to the december contract, wait for a washout closer to 30. Thats what im looking for in the long term. Short term you cant chase it up to 39. Er you guys, thank you whe has the time gone . Well do final trades straight ahead. [ thunder rumbles ] [ engine rumbling ] [ beeping ] [ engine revs ] uh, you know theres a 30minute limit, right . Tell that to the rain. [ beeping ] for those who were born to ride, theres progressive. Everything we have, weve earned. The unmistakable lexus is. Get zero percent financing on the 2020 is 300. Experience amazing at your lexus dealer. Dont settle for silver 1 for diabetic dry skin 1 for psoriasis symptom relief and 1 for eczema symptom relief gold bond champion your skin lets do some final trades now. Tiffany, you are up first. Vivint smart homes. They are in Home Security and smart home technology. The stock is up 73 year to date and up 11 just in the past five days good stuff. Jon gentlem pete najarian, youre up i still like my micron, i still like my intel. I think the chip space still has plenty of room and a lot of times kind of left for dead, i think they have upside thanks for that stephanie link on the hills of that, lam research taking market share still has lagged year to date, so i like that one trb my favorite area of the chip space is sour cream and onion, in case you were curious im staying on starbucks. I think the stock wants 100 real bad. Im going to stick with it for a while. Ill agree with you on that one. I like that, too, among many other great choices, too we are having a nice day thus far on wall street well stay on top of that story. Thank you so much for watching that does it for us. The exchange begins now. Thank you, scott hi, everybody, and heres whats ahead. We have breaking news at this hour apples big product event kicking off right now with a slew of new products expected and one notable exception. Well bring you all the headlines as they happen plus the impact of apple shares which have more than doubled so far this year 2 trillion stock, biggest name in the market. There is a lot riding on this. Plus, snowflake will have one of the highest valuations weve ever seen when it begins trading tomorrow yet the worlds most wellknown value
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