Strong move in energy and material names. So joe, we have asked a question sort of every day since this literally began, whether you can believe in it or not. You say youre coming off the best week of the year. Youve got transports having a good week last week. That was a pretty encouraging sign. Is it enough . Well, we talked last night when the s p was around 1915 to 1920 about the possibility to get to 1945, 1950 and then well take it from there. What gets you there. What i suggested, you need to see the return of a lot of the momentum names and leaders from 2015 take the baton from the lagards. And you have seen that. You have seen the fang stocks coming back, facebook, amazon trading very how about one weak performance on your note. Facebook up 4. 5 . Amazon 9 . Netflix, 4 . Alphabet, formerly google, 3 . Youre looking for something to extend the rally for you. Thats what youre getting now. Thats why were rallying towards those levels. Is it longlasting, remains to be seen. That was the necessary component of extending the rally. Pete, the same question. Is it enough . And if i back it up by saying, well, okay, its great. Energy doing well. I think its less about the fang stocks. More about financials are the worst performing sector of the month. That should be concerning. So the fly in the ointment of this rally. Ill give the positive. The fact that the volatility index dropped 20 in the last week. When you look at the Oil Volatility index, another 20 . That was 81. And here we are in the low 60s. You look at the ovx. Volatility has come out. Oil moved from 26 over to 30 a barrel. We continue to be strapped to where is oil going. Its been energy and materials that have been leading this rally to the up side with a few others actually participating. But its not the financials, scott, to your point. Were seeing a little bit of participation today. Up a little over 1 . We would like to see a lot more of this to be a broad market. Can you believe in this more or think it can go anywhere the beliefability without the financials playing ball. The believability of this move for me is the fact that one thing ive been talking about the volatility index, we talked about back in august, it stayed for about a month and a half. Where is it right now . Its about a month and a half out. On friday, we closed beincognito the 50day moving. Were now in the 19s. I expect to see if we get towards that 200, scott, will we hold on to the 200 day moving averages. We break through that, seems to me like this market wants to really take off from those levels. I mentioned we have bill nichols here, head of u. S. Equities. How do you see it, bill . Welcome. Are we out of the woods or no . Nice to be here. I think were out of the woods a little bit. We havent really gotten back to a 50 retracement yet. I think until we get to that 1965, 1970 level, thats halfway back from this downward move. So, you know, i agree with what everybody else has said. You really need financials to kick in. You havent seen any material upside. Is that why its a punk rally here . You dont have any participation from financials, which everybody seems to think needs to get jumpstarted, should get jumpstarted. I hear people pick on the desk they like those stocks. Whats the story . I think the financials are the last to come out. What the good indicators we have seen, everybody is talking recession, we session, recession. When discretionaries bounce back, once you see that with some more strength, the financials come back. Remember, the financials ran last year because of the interest rates. Right now theyre down because you get negative interest rates. That will come back, and i think when you see that, thats going to be when were out of this bottoming phase. Part of the issue, bill, whats the catalyst to keep moving there, if you take Sector Performance out of it . Not going off an economic cliff, is it necessarily good enough . Is it . Well, you probably need the tenyear neelds to get back up 190, closer to 2. That will help, as well. Youve seen real defensive plays, utilities, telecoms have been the leaders. Which you like. Seeing money coming out of that and rotate into the financials. Right now youre bouncing off the lows. You need another 5, 10, 15 rally from here. Good point. So josh, what gets us that . What gets us that another 10 to 15 so that we can actually maybe believe in it more than some do . Makes sense weve gapped up right into resistans and kind of stopped today. 1950 is really that line that everyone has been talking about. And it also not not only was it the breakdown in january, but coincides with the 50day moving average. Clear that level, the next real landmark would be 2020, which would be pretty respectable, considering where we came from. And the thing i think is the most important to watch, market internals. Thats where the good news is coming from. When you consider that, less than 10 s p 500 stocks are now ten double digits this year. Again, a huge improvement. Another thing worth looking at, credit spreads. Youve seen a narrowing in very important areas like financials. Big ones and little ones. And thats got to continue, as well. I dont know about the banks playing catchup just yet. They are selling at a 24 discount to the s p. Extraordinary. I think thats with good reason. We have essentially turned them into utilities where they used to be growth companies. And that was by design. And then the second thing is how do they make money when more than a third of the worlds debt is now in a country where theyre discussing negative interest rates, if not implementing them. To joshs point, you do have pretty broadbased move, at least over a weeks period of time, which is not going to, you know, hang it on the wall and say lets worship that. But transports up 5 . Youve got biotechs, airlines, chips, discretionary. All with nice moves across the board. What do you make of that . I think youve seen a nice bounceback. The markets come back, 7, 8, 9 . The s p 500. The subgroups have these big moves. Were clearly massively oversold. The question is, where do you go from here . Do you see that, you know, sort of petering out, sideways action or do you see a Short Covering rally to get back to 2000 that will really scare the shorts. Right now, i think the short thesis is still intact. People are comfortable selling rallies. At what point does that stop . Thats a good question. That has been the trend. You get a few days or a couple days if you can make it that far, and people sell right into it. Now, they largely havent done that this particular case yet. Maybe it has to do with where oil is going. I dont know. Jackie deangelis at the nymex joining the conversation here. And jackie, steve weise hit me with an email that said a lot of the action youre seeing today, if not the majority is this roll forward of a contract to april. Accounting for maybe 75 if not more of a move. Thats what im hearing, as well. Dont move this energy rally. So march wti is going to go off the board. Were getting Short Covering ahead of that. This is typically a pattern that we see time and time again. A lot of traders. A little bit of a head fake. You also have Oil Prices Moving in tandem feeding off the action youre seeing in equities today, as well. And we did have that iea report saying that shale production is going to decrease. Thats not really something that, you know, anything new, lets just say, that we havent heard from the iea before. Yes, were expecting Shell Production to go down. We havent seen it. And no other news should be sending us technical levels. I will say this. The fact that april is now at the 33 zone, were breaking out of that high end of the most recent range here, and traders are saying this could be sort of that bottoming process. There definitely are those out there that want to see this is it for oil prices after we touched 26 and change for the second time. So its going to be a little push and pull. But today, not really the day to look at oil and say, this is happening on fundamentals or there is a major shift, scott. Thanks. There was a suggestion by some at least last week that you were starting to see a decoupling between stocks and oil. And whether that can continue, is extremely important. I dont know. I think as it relates to oil and oil futures, lets not complicate it. I think we were all reminded last week by opec and nonopec producers, what is really the benefit of being short oil at 27, 28. Youre playing for possibly another 5 to 7 on the down side. So i think that type of approach to the market is being removed. Thats legending stability to oil prices itself and reminding folks thats probably not the greatest risk reward trade. Bill, are we still going to be tied to the price of crude . It will be at the top of peoples minds. What are the fundamentals for the fixed income part of the crude market and what stress is there with whether its 30, 32 or 35 barrel oil, youll see stresses on some of these highly leveraged names. So, you know, the question is, if we get from 35 to 40, then well see. Sure. With low 30s, i dont think it matters. The bigger question that we still havent answered and ben bernanke weighed in on this at brookings. The big question, what does big oil tell us. Is it a supply issue or demand issue . I know there are very strong opinions on both sides of that. I dont think its been resolved yet. And thats why youre seeing this high correlation between u. S. Stocks and the price of oil. Because these are questions about the viability of what weve done so far in terms of stimulus. Whether or not it will continue. Or we have no control anyway, because of deflationary issues in europe and asia. Are you out buying stocks in your portfolio . I am. And i just came back from a consumer Conference Last Week. And it was the most highly attended conference in four years. What thats telling you, people are so scared, and theyre rushing to the Procter Gambles and General Mills of the world. Im taking the other side. I think youre not going defensive. No. I think when youre trading at 20 times earnings as a sector, i think there are opportunities. I dont think the market is done with the selloff completely. Theyre going to be opportunities. Because if this r word does not happen, there are so many stocks and sectors that will do well, including the banks, including the autos, including the airlines. But oil has told you, maybe were going to recession and now you see a bounceback. If the supply issue is corrected and command dmand starts improving, you will see give an idea of what youve been buying. I like the warners, delphis. I like the united. Youve used this occasion to buy more . Buy more. New positions in things . Im buying more on regional banks. I do think they have been completely oversold. And they are not exposed to international. They dont have any youve got to be selective. Not the ones in the midwest with oil and gas. But the ones that have been sold off and down 25 to 30 . Pete . Well, i agree. I think ive actually added to a couple regional banks and added airlines. So i added a airline recently. I think well talk later on. I think when there are opportunities out there, scott take a look in the Energy Complex itself. What really performed last week. How about the fact that pipelines are up 16 as a group last week. I mean, within various parts of this marketplace, there are bigger winners, even than some of the other winners when you look at where the xle was, the oih. You look at some areas that are even outperforming those. Last word. I would be very careful, though, about misinterpreting Short Covering bounces in areas like pipeline so buffett comes in, he gets involved, and kinder. And then all of a sudden youve got people that are way too short the rest of the group. You get this huge spike higher. I dont know if there is any longevity to that rally. The same with banks. Are they actually going to make a lot of money this year . If the fed is on hold with rates . For the next quarter, two quarters, three quarters . Probably not. So i would get very, very careful about Short Covering rallies and extrapolating what they actually mean. Real quick. Its february, a strong buyback month. The problem for financials, are they ready for the stress test. Theyre not out there buying back stock. Jamie bought stock. Sure did. And a bunch of others jump in, as well. Great to see you. Nice to be here. Bill nichols. One analyst says its time to sell trip adviser and expedia, despite their upbeat results last week. Hes going to explain why its time to check out now. And speaking of travel, Airlines Stocks have quietly taken off over the past week. And Pete Najarian is hopping on board. The names hes buying, next. Plus, why hedge fund pain could be your gain. Mike santolli explains that just ahead. Take a look at the s p sectors right now. Youre watching cnbc, first in business worldwide. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Its intelligent drive is msystems. Ng. Paradigmshifting. Its technologyfilled cabin. Jawdropping. Its performance. Breathtaking. Its selfparking. And selfbraking. Showstopping. The allnew glc. Mercedesbenz resets the bar for the luxury suv. Starting at 38,950. Man 1 he just got fired. Man 2 why . Man 1 network breach. Man 2 since when do they fire ceos for computer problems . Man 1 they got in through a vendor. Man 1 do you know how many vendors have access to our systems . Man 2 no. Man 1 hundreds, if you dont count the freelancers. Man 2 should i be worried . Man 1 you are the ceo. Its not just security. Its defense. Bae systems. Securing an early checkout. Expedia and trip adviser to sell today. The firm saying it needed theyre seeing increased competition in that space. The analysts behind the move joins us now for our call of the day. Scott, welcome back. Hey, scott, how are you . Good, thanks. This sounds like a mostly macro call that youre making, rather than stockspecific. Is that right . Its a mixture of both, actually. Okay. Moderating macro and then also some companyspecific initiatives at both expedia and trip adviser that would make them more exposed than price lion but also more exposed than other companies we cover, as well, if the macro were to turn. What impact has consolidation in the industry itself had on your call here . So in the u. S. Market, which is where, again, the focus on expedia and trip adviser ex paider, 65 of its revenue from the u. S. And trip gets 56 . There have been initiatives that have dated back as long as 15 years of suppliers deriving traffic direct to their sites. Theres a more Aggressive Campaign thats been initiated in the past week by hilton that offers discounts for going direct, as well as free wifi and other reasons to go direct versus going through the otas. But the bigger deal we think beyond that, which has been ongoing for some time, consolidation in the Hotel Industry. You have seen it in the airline industry, the governments proved it. You have seen it in the otas. Youre beginning to see rumbling in the Hotel Industry with marriotts proposed acquisition of starwood. With the hilton initiatives in a combine Marriott Starwood under those two corporate umbrellas, you have 30 of the u. S. Market. So thinking ahead a little bit in terms of that deal closing and marriott following suit, you have some more Aggressive Campaigns of driving traffic direct to sites. That could allow the hoteliers to try to manage down their distribution costs as they have been trying to do for the past 15 years. Youre saying because you have fewer brands, you have the possibility of those brands by passing third parties. Fragmentation of inventory as it relates to internet distribution provides significant value. As inventory consolidates, that reduces value. Ill give a data point that supports that. The average Hotel Commission in percentage terms relative to the average Airline Commission in percentage terms is about eight times. And thats because theres more fragmentation of Hotel Inventory than the airline industry. Josh brown. Hey, scott. How long before amazon comes in to travel, which has long been discussed and rumored and just completely blows this business out of the box, and makes it so maybe theres only room for one or two standalones instead of five or six . Hi, josh. Amazon has been in and out over the years. Years ago, they had a deal where expedia was essentially the travel portal within amazon and then they did it again more organically recently but seemed to pull back. I dont know amazons initiatives, but google is one of the biggest drivers of traffic to the site. And have been working aggressively themselves to drive more tools that get them closer to the transaction. So if i were looking at a giant in the internet thats really focused on this category, it would probably be more google than amazon. Scott, no move on price line, right . Youve had that as a hold . We had downgraded it earlier before the changing macro views hit and have we have held it in the highest regard within the travel industry of those three companies, which are what we cover, which is the online segment. And continue to do so. But continue to rate it a hold. I thought their quarter was outstanding and definitely fits the characteristics of what we look for. In businesses, we just have a hold rating at the time. I gotcha. Thanks for calling in, scott. Thank you. Scott over at steeple. Guys . You know, looking at the note and just thinking about the dynamics, price line, i think somewhere around a 60 to 65 billion market cap. You have to wonder, do you at some point expedia and trip adviser better off combining those into one for survival against price line. The other thing you have to be careful about, and i agree with the downgrade, corporate customers will now get better purchasing if theyre going straight to marriott and storewood as opposed to going through websites. I think you can see potentially more margin pressure. Pete, you have some unusual activity in a travelrelated name. Right. Well, we talk about the airlines all of the time and last week just the outperformance we saw in the Airlines Versus the s p 500. Basically a double and you look across and see naems like hawaiian. Also the big three had a monstrous week last week, nearly 10 across the board or better. Last week it was actually on friday, we saw american airlines, the march 42 call, scott. Huge paper there. 11,000 trading anywhere between 63 and 70 cents, already moving on friday. Already moving again today. Theyre going out to march, buying a little bit of time. So you can expect to see this last maybe for a couple more at least a week or two. Im going to hold on to options at least that long. But ive been trimming in this, and i bought some save, as well, just this morning. Just because i like whats going on with spirit and the new ceo. Coming up, Lumber Liquidators getting hammered today. And a certifyot favorite. The trades on those and more coming up. And the privacy debate. Some top tech ceos weighing in on the battle between the u. S. And apple. And as we head to break, check out a few of stocks trading at alltime highs today. There we are, led by honeywell. Were back after this. Heres your invoice, ladies. A few stops later, and it looks like big ollie is on the mend. It might not seem that glamorous having an old pickup truck for an office. Or filling your days looking down the south end of a heifer, but. I wouldnt have it any other way. Look at that, i had my best month ever. And earned a shiny new office upgrade. I run on quickbooks. Thats how i own it. On their auto insurance. 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Know that our dedicated teams of local experts offer insight to help you achieve your business objectives. See how working with pnc can help your company grow at pnc. Com ideas were back with the blitz. Four trades on four stocks. First up, autonation, adding to its buyback. Youve been looking at these buybacks, and heres one the stock up 3 . A little bit of a bounce here. Remember, january 29th, they reported very difficult earnings, margins, compressing the outlook for the year as it relates to auto sales, both on the new and used side. Not very promising. Do i think theres fall threw here . Yes. But technically, a ton of resistance around the 55 level. Yahoo still searching for buyers. Reports out today that verizon, comca comcast, at t might be interested. You own the name. A lot of pain. I think heres the opportunity were going to see. Proxy battle probably coming. Starwood on board and i think one of the things why the stock is down, management is giving a negative value to the stock. And i think if you can remove management from this and actually have somebody else manage these assets, youll see value. Lumber liquidators plunging today after the cdc announced its Wood Flooring carries a higher cancer risk. Heres the thing. Lets not add any opinion on to it. Theyre telling people that some of the flooring this Company Makes gives you a three times higher chance of potentially getting cancer because of exposure to formaldehyde. I dont know if its true. Im not a scientist. All im going to tell you is, who would take the other side . What consumer would walk in and say, you know what, im willing to bet its wrong, fill my house with this. You have a 33 shortage this year. There could be some spikes on days where the Company Comes out and refutes this. But this is not a name i want to have anything to do with at all. All right. Miners on the move to do. Copper futures, other base metals surging commodities in general on the rise today. As you know. Pete . Aluminum, iron. You go through it. We talked about the top of the show energy and materials. Here we are. Right at the biggest of the materials. Bhp. There has been some buying in there. Is this longterm to joshs point, or is this just a dash for trash presently . Well have to see if that plays out. So far, a very, very impressive move to the up side. Bhp up today. Im trimming into it. I owned some calls in this any more. To early to buy some of these names . I think pete has the right strategy. Rent . Too late. Rent going home. Rent. Too late. Too late to buy. You missed an incredible you missed 20 moves in these names. Over the course of two weeks. You want to come in now . Thats where i say rent. Im really saying, i would rather be in there with options and able to get those moves. A 5 or 6 or 20 move in the stock, thats in multiples when you talk about how the options are moving in Something Like this. And you have a limited risk in terms of if other opportunities there will be other opportunities this year to get into these names. But i think for the entire 2016, theyre going to be categorized by what pete is saying. You have to be tactical, in out. This isnt buy and hold. If thats not your game, dont try to play it. Hedge funds struggling recently. That might actually be a good thing for investors. Were going to explain that, coming up. And one trader says there is a single dow stock key for this market rally. What is it . And why . Thats next on the half. Re at t, they work hard. Wow, that was random. Random . No. Its all about understanding patterns. Like the mail guy at 3 12pm every day or jerry getting dumped every third tuesday. Jerry every third tuesday. We have Pattern Recognition Technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. Td ameritrade. Hi, everyone. Im sue herrera. Here is your cnbc news update. Uber driver jason dalton, the man who police say shot eight people in kalamazoo, michigan, saturday night is due in court this afternoon. Six victims died, two in critical condition. President obama commenting on the shootings. One of our communities was terrorized by gun violence. As many read, six people were gunned down in kalamazoo, michigan. I called the mayor, sheriff and police chief there and told them they would have whatever federal support they needed. British Prime MinisterDavid Cameron says if britains vote to leave the European Union in june, it will be a final decision, with no chance of reversing in a second referendum. He made the comment before lawmakers in the house of commons. Fiji residents trying to recover from the ferocious cyclone that tore through the island over the weekend. 18 people were killed. Schools will be closed for a week to allow time for rescue efforts and cleanup. An historic photo finish at the daytona 500 on sunday. Denny hamlin nosing out his opponent by 1 100th of a second, the closest finish in the races history. Its hamlines first time in the victory lane. Look at that yikes. All right. Thats the news update. Back to you, scottie. Thanks, sue. Taking a look at the markets now, where we are in coming off a really good week for stocks. Here you are, the Dow Jones Industrial average is up 1 1 3 right now. 219 points. 16,610. The s p 500 at 1943. Also a gain of 1 1 3 . Our next guest, steve grasso, on the floor of the new york stokes. Whats this name we need to keep an eye on . Cat tractor. Caterpillar gave us the lead time before you saw chinas markets fall off a cliff, so to speak. Basically, led by about seven months. When you saw cat fade, a couple months later, lets call it six, seven months later, you saw chinas markets really fall precipitously. You need to have that stabilize, cat tractor. If that was the tell on the way down, it will be the tell on the way up. You need to have it stabilize before you put any new money to work now. Now were hanging our hat on cat. You have to. Look at the sectors that sold off and look at the reason why were selling off. Theres lack of Global Growth. Whats going to be the first to rally when we start to get a hint of it . Cat tractor and that sector. So its already bounced 20 . Basically off the lows. 7 . Look for it to stabilize. And you buy the market. All right. Interesting thought. Grasso, anybody want to take the other side of that . Agree, disagree . Sa rat . I dont think so. I think cat has got other issues globally. And i think china is just one play and china has a lot of other issues going on. Youre skeptical of the caterpillar indicator, is that what youre saying . I think apple is more important. And appling holding 92, a Double Bottom from the august low, thats where it bounced off this time. I think if apple breaks 92 to the down side, its much worse psychologically. Many more hedge funds managers exposed to apple than to cat. And quite frankly, thats the demand side of the chinese worry. Thats the demand side of the european worry. I think we are all aware of the problem with the supply side of these economies. So that would be to me a bigger tell. Grasso . Yeah. I think that apple i hear what the two other guests have said. I hear what josh has said. I think apple has lost its ability to rally the market for quite some time now. If you look at cat tractor and start to see a substantive bottom there, i think Global Growth is the bigger question mark, and you need to see that come back. Im not saying it is. Im saying that if it does come back, youre going to see cat pop a lot more than it is. And then it already has. Youre going to see the overwhelming buy side come into the place, and squeeze even further. Last point . You stole my voice, steve. Right back at you. Grasso, thanks. Thanks. Steve grasso on the floor for us. Meantime, hedge funds have been struggling lately, but their pain could be your gain. Mike santolli, provocative note out today. A story he wrote on dotcom. Interesting. Obviously, a kind of rolling shakeout in hedge funds. Its been meshed in a lot of ways. January one of the toughest months in careers. We know this rally started with a big Short Covering element. And so all these things coming together show a retreat in general, in hedge fund. You see net exposures to stocks, for example, at multiyear lows recently. So all that together suggests to me youre going to leave some kind of misvalued stocks, bonds, other stuff in the wake of this process. Where might that be . Thats the question im asking here. So other areas that are sort of crowded in terms of long short type of activity, i think spinoffs got overloved for a while and as a group, as a kind of idea category. Because of Event Driven Fund . And it was always a hedge fund favorite. Theyre orphan stocks and now are really orphan stocks. The magic stopped working there. Also areas of credit. I dont know specifically how you get at it. Its not through the junk etfs. If you consider 7 trillion in global bonds. And the Higher Quality junk bonds at 10 , somewhere in there smartest investors will make some hay. A lot of moppup activity could happen. This whole idea could be very much in anticipation of an that might happen. Interesting. What do you guys think of that . I think in terms of playing the credit side, mike is spoton. I wouldnt look at those etfs. Just in general. Not maybe so much specific to the credit side or whatever side. But the fact that you have had some dislocations as a result of overwhelmingly large amounts of hedge funds selling in the down turn, so created opportunities around the market for the average investor to take advantage in it ways maybe they couldnt do before. So ill take on the credit side. Youre absolutely right. If you are a bond investor, youre looking always to roll off the curve. If youre a longinvestor, this is a good time to buy liquid and i get my 10 return. I dont really care what happens. And on the stock side, the valuation gap has opened up. If you look at the most expensive 10 of s p stocks versus the cheapest, its very wide. 30 times earnings versus 12 times earnings on a forward basis. That usually means, in theory, active management can start to pay again. It doesnt mean its a lock. It just means you have opportunity. I wonder about things like biotech, for example. If thats a potential place to look for opportunity, as a result of the carnage, some hedge funds selling, names that had gotten crowded. Is that a political issue that will drag out all the way through november. Its also why mike says maybe its early. Without getting cute, deep value should be the stuff that works here too. You just dont know what the catalyst is going to be. It works if were not going into a recession. Exactly. Deep value right now are all the things that the pain exacerbates, and you know, its not like were finding secular growth stories in the deep value bin. We never do. Its super sicyclical. Absolutely. And thats why its a moment where we look back months from now and everyone says, oh, we should have bought. You look at the material stocks we talked about. Some have fiveyear gains in two weeks. So you can get opportunities like that. But i think the biotech is really interesting. Theyre still at pretty big premiums to the market. So you could fall. We have seen that. Yeah. Absolutely. Cnbc. Com. Thanks. I appreciate it. Apples legal battle with the government continuing. Well be back in just a moment. Mark Zug Zuckerberg is speaking. [ no audio ] thank you. Imagine if the things you bought every day. Earned you miles to get to the places you really want to go. With the united mileageplus explorer card, youll get a free checked bag, two united club passes, priority boarding, and 30,000 bonus miles. Everything you need for an unforgettable vacation. The united mileageplus explorer card. Imagine where it will take you. Coming up at the top of the hour on power lunch, the dow and s p positive for february, out of correction territory. What two sectors should you be bullish on right now . And well talk about mid cap marvels. The markets down over the past month. However, one Top Performing fund manager is up 7 . Were going to tell you the stocks and sectors right now. And how much do you think you have in terms of equity in your home . Surprising new data shows many homeowners are simply delusional on the point. Scott, back to you. All right. Michelle, thanks. See you in a bit. Take a look at the markets, as michelle said. We are coming off the best week of the year. We are now positive for the month of february. So were backing up some activity we saw a week ago. The Dow Jones Industrial average up 230 points, a strong day for the s p and the nasdaq, as well. Speaking of the nasdaq, the standoff between apple and the u. S. Government is taking another turn today. Our eamon javers has the latest from washington, d. C. Eamon . Yeah, scott, thats right. We have these dueling statements out last night. And early this morning between tim cook of apple and james comey of the fbi. Each man laying out his case as to why hes the right in this battle between apple and the fbi over access to the San Bernardino terrorist, syed farooks cell phone. This is putting pressure on ceos and executives at other companies throughout the text base and throughout the American Economy as to where they stand on this issue. Here is how at ts ralph de la vega put it earlier today on cnbc. Our personal view on this is that there has to be a balance between privacy and security. Right now, the laws are a little bit muddled. We think that congress should take the leadership role in setting up clear laws to be followed by the land that balances the security with privacy aspects for the citizens of the country. Speaking of congress, congressman darrell issa was on cnbc earlier today also. And he put this really in terms of the u. S. Founding fathers. This is a basic american debate, issa said. This is a 1789 statute. It was never intended to do this. But even if you were to look at our Founding Fathers, our Founding Fathers did not want to have the ability to look inside every home before they got a warrant. Every home before they knew there was a specific crime there. So scott, apple now has until friday to file its official response to this court order issued by the court. Clearly, this is a battle thats going to go on for some time. Well see procedural motions back and forth through the early part of march, and then a hearing late in the month in march. So were looking at another maybe three weeks of big public debate now over this issue, scott. Yeah, thats what it is. A public debate. Eamon, thanks so much. We keep hearing from different ceos within the Tech Industry on their opinions of this very important issue. And our jon fortt, as we said, is in barcelona, live at the mobile world congress. Jon, i saw your conversation earlier today. With intels ceo. About where he stands on the issue. And i wonder if that is sort of the norm of what youre hearing there. Well, you also just heard from ralph de la vega here in barcelona sharing thoughts saying that it is congress and not the courts where this should be decided. That echos some things that tim cook said. The ceo of intel, probably the top ranking tech ceo, to Say Something very direct around how he felt this should and shouldnt go. So for those who might have missed it, take a listen. I think theres a balance here between those two. Im absolutely not in favor and dont believe we should do back doors and be forced to do back doors. But there probably is a way that working together with the agencies, we can find a way to get them the data they need to really protect the citizens from the terrorists. And i think its best when the engineers get together and actually solve the problem, rather than the escalation. Reporter now, i think that was unique, in that he just took the issue pretty straight on. Ericson ceo, not a u. S. Company. But he pointed out they operate in 180 different countries, security is very important to them. There has to be a balance. He said he hasnt yet been asked by any government to sort of hack or circum vent his own security. He didnt sound eager to do that. But wasnt making definitive statements one way or the other, scott. Other ceos, frankly, john, have punted on our air, even, since this issue came to light. So youre going to still get a mixed bag, i think, when it comes to that. But as we were talking earlier, zuckerberg, mark zuckerberg, the ceo of faib, facebook is speaking as we speak right now, isnt he . He is. And hes giving a few insights into whats next for the company. On the one hand, kind of at the higher end, technology wise, there is a focus on Virtual Reality. And hes talking about how 5g, Faster Networks coming in a couple years, will enable Virtual Reality, people will be able to experience a whole scene and not just a snapshot. Video will continue to be important. But vr is sort of the next step. Of course, he invested 2 billion in okay ulous. As you look around mobile world congress, not just facebook but also htc, also samsung, other companies are now pointing to Virtual Reality as being an important next step. Samsung, which is partnering with oculus is going to give away vr headsets to the first people who preorder their new galaxy s7 phone. On the other hand, zuckerberg is talking about other places that dont have Internet Connection thus far and is working with carriers and others to sort of rework the Way Wireless Technology is architected in order to cover those areas. So not just talking about drones and lasers, but those new technologies, as well. He also talked on free basics in india, where hes run into some road blocks, saying some people just dont believe that companies have a vision other than making money. But indeed they do. And they want people to broadly have internet access, not just fast access, scott. Jon, thanks. Jon fort live in barcelona. Coming up, why instead ofly link is bullish on a beaten down transport stock. And the pulse of fit bit. We go around the disk for the trade of its earnings tonight. Halftime back after this. Thanks. [ male announcer ] fedex® has solutions to enable Global Commerce that can help your company grow steadily and quickly. Great job. mandarin cut it out. See you tomorrow. I want to show you the leaderboard in our halftime portfolio competition. Seven weeks in the books and here is where we stand. Joe and john in positive territory. Serrat trying to get there. What is your strategy . What is the last move you made . I havent made one yet. The stocks i have in there i like. Some are deep cyclicals, theyre coming back. Next week, going to look to make a move. Speaking of portfolio, stephanie link is making a move today, adding a name in one sector she expects to rebound. Stephanie joining us now by phone. Steph, i understand this is a name that you added to your tiaa portfolio. And the halftime portfolio, correct . Hi, scott, yes, i have. I just think the rails in general, they just got hammered last year. They were down 25 to 40 on average and they had a tough january, but if you noticed since the january 20th lows, theyre not going down on bad news. And the companies were at a Conference Last Week and they talked about pricing, staying pretty okay, not great, but not deteriorating, volumes stabilizing and i think after you get past the first quarter, the comparisons in volumes get easier. So this is really more of a this say longer term holding for me for the portfolio. I think youll see the second half do better than the first half. Union pacific is one i like. The number one player in the group, stellar Balance Sheet and cash flow and i think the numbers have been pretty much derisked. I already lowered numbers when they reported 4q and they got some cost levers they can pull in march and upside. I like it at the high quality company, truly on sale. You think is it representative of what you think about the transports in general off of what i said was a good week . I think up 5 or so. Thats a great week. As i said, last year, some of these stocks fell 30, 40 . And so the expectations are so much lower this year. In fact, Union Pacific was the most overowned stock last year. It is now the most underowned stock for pms this year. So i just think in general, yes, i think they the setup is better this year. Again, we have to have less of a drag on oil and which i think will happen and volume comparisens get easier. To i think as i said a setup i think is pretty decent and ill go with the best in breed. I said tiaa for a reason. You have a little rebranding going on over there, i understand. We do. We do. We have a new name as part of our rebranding initiative. And were focusing on a simpler more customer centric organization. It is a really exciting day here. Shorter for me to say when i give you the shoutouts now. Thats right. Stephanie link, tiaa, see you back here soon. Big week for retail earnings, macys, target, gap, jcpenney, foot locker, more. The trades ahead next. Vo know you have a dedicated advisor and team who understand where you come from. We didnt really have anything, you know. But, we made do. Vo know you can craft an Investment Plan as strong as your values. Al, how you doing. Hey, mr. Hamilton. Vo know that together you can establish a meaningful legacy. With the guidance and support of your dedicated pnc Wealth Management team. Where selfproclaimed ofinancial superstars , pitch you investment opportunities. Ive got a fantastic deal for you gold with the right pool of investors, theres a lot of money to be made. But first, investors must ask the right questions and use the smartcheck challenge to make the right decisions. Youre not even registered; im done with you i can. I can. Savvy investors check their financial pros background by visiting smartcheck. Gov all right, a quick programming note for tomorrows show. We have two exclusive interviews. You dont want to miss. Jeff curry is the global head of commodities. And steve williams, ceo of sun core, looking forward to both of those guests tomorrow. Second half trades today. Fit bit reports after the bell. Handful of retail earnings the rest of the week. Fit bit. No. Well, listen, i shouldnt say i dont discount the possibility. I dont discount the possibility of this having a crazy short squeeze kind of rally if the results are not as bad as expected because lets keep in mind, expectations are very low. But from a longer term perspective, this is not a great consumer product. Youre going to have a lot of difficulty convincing people they need a second one, a third one. I like fit bit, the company. I dont want to own the name. They got a great market share. Mark benioff is involved now. Couple Different Reasons to be more excited about it. Stock is what is his actual master plan . Is this just an investment or Something Else right now for him . That i think has to be thought of. Keep in mind, these guys play hockey teams, pay 2 billion for nba franchises, they dont always invest in everything because of i would be a little hesitant to follow billionaires into these types of dalliances because youre referring to ballmers investment in twitter, right . Yeah, i mean, look, listen, ballmer buys the clippers and everyone is, like, hell never make money on the clippers he doesnt want to make money on the clippers. He wants to own the basketball team. Only a limited number. Thats why you want to that happens. Just be careful. Back to the matters at hand. Retail, depots, lowes, macys, tjx, all coming up. Toll brothers, it is important. What is the impact of the Financial Market volatility on the high end luxury buyer and a lot of revenue from california, economically sensitive and texas, oil. Serrat, you own macys. Last quarter was horrible. They threw everything but the kitchen sink, see if things are improving. Tjx, a name you liked for a long time. Theyll crush it. They got online, discount world, we know where a lot of the dollars are going because of the lower gas prices. I think tjx crushes. You own the stock . I do not. Not right now. Stocks off their best week of the year. Stocks are positive for the month of february. Stocks are off to the races now again. Power lunch talks about that now. Welcome to power lunch, im Michelle Carusocabrera with melissa lee and brian sullivan. Tyler matheson is off today and scott said stocks are in rally mode, adding to last weeks nice gains. The dow, the s p and nasdaq all higher by at least 1 at this hour. Positive for the last week and month, the major averages is still however lower year to date. The dow higher by 200 points. The nasdaq by almost 57. Helping out today, oil, it is soaring. Now, remember, the contract rolls over, so we may see oil fall back tomorrow with the new contract still, though, trading