Youre new to me. I love it. Were going at it. Great to have i hear you like a lot of stocks i dont like. Were known were known to like a good debate on this show. Good. Were ready. Lets start with mcdonalds. Jimmy, go to you first. What do you make of the selloff in mcdonalds today for a stock that has had a tremendous run . Look, easterbrook one of those guys like a head coach. Just, literally, i dont know why, but we felt this was a trap game. Some of us felt it was a trap game. Felt he was set up by pokemon go in japan. Stock runs up to 128. Knew he didnt have anything new, new initiatives, but i dont think people realized there would be a moment where technology didnt kick in hes talking about theyre going to do and theres a weird restaurant on wii. So in japan, set up, and then, wow, trap game. Ah you know . Pete, you were long. Owned calls . And still own them. I probably should be cutting them off. To be honest, scott, after the run, i wonder, pushed down a little while. Dissect through the numbers, listen to what easterbrook had to say, whats coming next, there is something to hang your hat on now. Comparable sales. Positive at least for the last four quarters. Yes, missed everybodys estimates but positive quarter after quarter after quarter, now four in a row. That part i think is a little surprising, and i heard carl and those guys kicking around, talk about u. S. Comps, people how long ago, wasnt that long ago looking at u. S. Comps. Ever going to go positive . Never did. Now suddenly were seeing that. So the question, though, steph, for somebody who owned the stock, you still own it . No. You sold out of it. A month ago. But were 100 right where the direction of this stock was going. Why did you sell out when you did . Nobody wanted it at 90 and everybody at 125. Sentiment clearly shifted in my view. The valuation wasnt as compelling. I like the balance sheet, the restructuring. Easterbrook is doing a phenomenal job but i think he pulled forward comps from the breakfast offering and momentum got too great on this name. I thought, swapped at that into yum, more shorterterm catalyst, spinning off china and that sort of thing. Expectations got ahead of themselves. Josh brown yesterday on this program suggested that yum was actually the stock to own in this space. Looking at chart, thinking it was ready for a big breakout. A month ago. Because it was in the low 80s. And i still think its, it can work. In fact, it could go over 100, but we have a catalyst in front of us. Thats one of the reasons why its an exciting story. No matter what happens on the macro. Same with mcdonalds. Didnt matter on the macro as long as you it a Restructuring Plan and someone to execute the story. Exactly what easterbrook did. You mentioned, jim, other restaurant calls. And were going to get into that. Some of these calls on the other restaurant names in the remainder of the time that we have, which is a lot. But as mcdonalds, have they gotten everything out of breakfast it were . I think yes. I remember stephanie said in the 90s, this thing is going to be, you get the right guy in, and easterbrook is the right guy. I do believe the technologys coming. I do believe if it got back to the middle teens, that you might pull the trigger. I do believe that that greg is doing the job at yum. Ceo of yum. Hes dynamite. Holy cow. I agree with whatever you said. I point out again, stephanie, in the 90s, said, listen, this mcdonalds is undervalued, undervalued. You stuck with it. You were right. Thank you. At a time it wasnt fashionable to be sort of buying that name. I remember distinctly when you were sitting on this desk saying it. Lets talk about the broader market. Wondering whether mcdonalds and the selloff a sign other big named stocks are ready to cool off . Jim said he didnt like the market this week yesterday. Take a listen to that. We got to have some fluff taken out of the market, and im afraid its going to happen this week. And then we can look at it when we get the employment number, the markets too frothy. Is this the beginning of frothing taken out . A gawnlet. Look, amd provides you froth, all you want, because theres so much chatter about consolidation. Even texas instrument call, you were on that. Talking, consolidation, what would it do . Wide open since arm holdings. You got apple, you know, gillis yesterday doing the unthinkable. 27 buys. Theres 1 sell, 2 holds. The guys who love it, hate it. And the guy, basically said, i hate the stock, hate the stock, reiter has my buy. Doesnt cut it for me. That, facebook, al if a betfif bette. Going to be good. The point, say its going to be bad. Dont heighten the expectations. I mean, this is literally like im waiting for someone to say its the dream team of earnings, to really put us to bed. We are just ahead of rio. Looking back to barcelona and the dream team. Is the market too expensive . Right here . Or no . In absolute terms it is. The markets had a strong run. Momentum strong at the moment especially, but were going into an environment, improving, close to a peak. Liquidity conditions a bust. And taken away we still believe the feds going to raise rates moi aggressively than the market thinks, thats sets up for the market to pull back, expensive valuations and risks arising globally from a political perspective as well. Absolute terms equities are expensive. Reduced holdings last week substantially. Relative to bonds, still overweight. Absolute terms you dont need to be there at full tilt. Not a believer in multiple expansions . Earnings not as bad as some think, though jimmy hasnt been high on a lot of the calls. Listening to everything that was said during the morning. Numbers good, but listen to the calls to tell the whole story. Look, you have low expectations. Caterpillar. Everyone thought doug would blow. Doug hats off. I mean, he had a great comment this morning. Four straight years, and were not done being lean and mean, and look at that stock. The shorts are dying on the caterpillar. He basically did the number the shorts were hoping for. We like the stock. How about greg, united technology. When expectations are low, you can deliver. But jeff, petitions high. Cody, honeywell, expectations high. With the ge call, the numbers were pretty good, but you didnt think the call was great. I dont know. I listened today to greg hayes, this turbine fan. A new engine that he has. Taking share, i think from ge. Remember, aerospace wasnt hold it. Wait a second. Maybe not so hot because its great for is this concerning to you after hearing the call today and revenues . Every time i bet against inga i look like a fool. And kuns again, now, hes a viking. A viking. But doesnt care for the minnesota vikings. He follows the rangers. How much. That crush you . I asked him once. What do you think of bridgewater . Thinking what do i think about infrastructure . Right. We havent heard from you yet, joe. Is the market too expensive, does froth need it come out . Do you agree with jim . I think jim sees something everyone else sees. Yes, the market is fully value. Yes, theres problems. We all see that. The problem so far year to date. You dont think we can get multiple expansion . The pro be is positioning. Positions on the part of active management. Active management, hedge fund v. I. P. List, those names arent working this year. What everyone owns in the active space are the things that are not going up. They havent gone up all year. Been on the wrong side every move weve made. Gimel talking about names right now. Its really a chase of, i dont want to say a chase for performance, but youre looking at the marketplace saying to yourself, hey, okay. I need a selloff. What kind of a chase for performance. Much of the performance has been bad. I need a selloff, okay . So i can hit the reset button and get in some of these names and working that i havent owned. Maybe some of the names . Right . Could be specific names. Who wants to own utilities the beginning of the year . Do they still want to own them. And i mean, hello. My travel, like, listen, im worried about it. Goldman upgrade it. Who likes first energy . Steph, i wanted to ask you. You play sentiment all the time. You know that it was the gileads they were in. Gilead, because its so cheap. Its the cheapest stock ever. Is there anything cheaper . Bringing me to unfortunately the one i do like for a hold. Apple. Is apple cheaper than gilead. Not a bullish call. Glad you went there. Sort of the segue we wanted to go next. And jim sorry. Quick. Reports after the bell, tonight, right . Everybodys waiting for it. Especially after bgcs colin gillis cut shares to a sell and explained why right here on the Halftime Report 24 hours ago. If you look out at the back half of the year, we are not enthusiastic about the next iphone upgrade cycle and in fact have already seen that the ofs upgrade cycle has been slower than the 6 and we think youre going to see a continued slowdown when the next iphone hits. All right. So jim, you suggested that analysts need to come back down to earth. Look, im concerned when you have all of these, what i caw faux buys. Faux kind. A lot. 40 of them. Yeah, faux, faux, faux. These guys literally are, they want to jump ship so badly. And milan vich really in there . You know, hes like another guy whos just waiting, waiting. Waits crouching tiger, you know . Ready to say bad things. So unless unless theres some hidden phone 7 orders. I didnt think anything on the verizon call made me feel, mccadham seens more bullish in february than now. Im concerned. The cheapest stocks arent proving to be cheap. Everything colin said yesterday, i like him very much, everything he said was not new. I dont know about that. The sell side, wait a second. The sell side likes this stock. The buy side, not so much. Very good point. Not so much. Retail. Never left. Stock from the low 90s to high 90s. Not exactly a screaming buy, because its had a run, but i dont any that i dont think it will be a surprise if its a soft quarter and the guide is soft, because people who are in this name for the long term are playing it for the next cycle. Thats whats new, though. Gillis was throwing shade all over the 7 expectations. Not really. More concerned about between now and the end of the year and he said, i dont really know whats going to happen with the 7. Nobody knows. 43 buy, 6 holds, 3 sells average price target 122. You better get out and explain why its not at 122. You need to cite what we already know. Typically, historically, seasonally the weakest quarter for apple, the one its about to report. We dont know that . Its all about the iphone 7. We know the risk in china. 123 target, you have to explain. And goes to 85. Said in the note, our opinion that apple has peaked under the leadership of tim cook. Our view is that Apple Software products are lackluster. Unease with managements positioning of the business. He suggested they spend too much u. S. Cash on buy backs, said they gave away the arm deal they could have had. The arm deal goes back to 2010. The question for you, talking about absolutely. You have cook on all the time. Whats wrong with the culture they wont make a big acquisition . Why not ute the cash, even offshore cash, to buy something offshore . Thats an issue. I have spoken with tim and suggested, look, its time to build that Service Revenue stream you talk about. You need to leapfrog it. I get my bill from apple. I dont think a thing about it. I dont care about nigh netflix bill, particularly after buying 600,000 a guy i know from tvc, bought it big and short in the shorts. I dont care how much i pay for my iphone, my service. They should find other streams to integrate, because we dont care about that. Were costco, we dont care. Do we care about how much you pay for costco . No. Right . And care about netflix . I dont think so. Amazon prime. I mean, listen, jeff, i would pay triple for amazon prime. I dont ever have to go to the store. Although some people apparently take issue with netflix and their price increase. Netflix is now in question, because theres so many other alternatives. Atul . Own apple . We do. Reduced end of last year. Looking at buying it again. Really . Under 90 . Yeah. For us, exactly to your point. A business with a huge moat around it. Talking enhancing services flicking a switch, it basically is that. 25 discount to the market, dividend yield 2 . No wonder Retail Investors like it. For us, we like technology. We think productivity growth is a single best opportunity globally. Technology a great way to play it. A cheap technology stock. Dont trade it. Public transition. Not a broken model. The whole thing. And the reason anyone want their apple taken away from them . You want your phone taken away . Im on the blue team playing it this pnd. Ah, pokemon go. Which you played this past weekend . Well, post office was a gym, and we just kept going by. Meantime, my data is im find itting a charging. Finding charging. Finding charging. But would we ever use anything other than an apple . Are we out of our minds . Where are those other guys . Who are those guys . Like redford and sundance. Butch cadty. Butch cassidy. Great way to end the segment. No another bait and switch from the judge. Right. We got to pay bills around here. Crushed me. Were going to make you stay for the rest of the show. Colin gillis, by the way, on fast money 5 00 p. M. See about his call, what the numbers come in at today, and how he feels about his call after apple reports tonight. A big call on nordstrom coming up. This stock having a great day and month. Up 20 in four weeks. How about under armour . Big month there, too. Signs of trouble on the field, court, track and in the store . Talking about the run in retail, and it is next on the Halftime Report. Announcer dont let e. Coli mosh with your food. An estimated 3,000 americans die from a foodborne illness each year. So, always separate raw meat from vegetables. Keep your family safe at foodsafety. Gov welcome back to the Halftime Report. Under armour back in the red. Now down 4 . The company reporting earnings and revenue in line with estimates, profit, though, dropped 57 . Seams growth fell below 20 , first time in seven years. One bright spot, sneaker sales up 58 . Due to steph curry. All right. Jimmy, how do you, how should you view this . 28 sales growth. Whew. Double digit sales growth in all three of its categories. Right. The steph shoe sales up 58 . Gross margin slipped a little bit. Spending a fortune he is no. He is spending too much money to get them. Talking about kevin plank, ceo. And ruined everybodys quarter. Who would think that crummy company could hurt so many. And i just didnt feel that, that plank brought it, and i feel what plank is doing, i know inventory is down from the 40s to 30, but i just feel like this is a guy who is spending too much money to get this, this inline sales doesnt cut it for me. You think the selloff is justified . Yes. Its got to go lower. Take the other side of has . You can. Its okay. You know what i like is, obviously international. You see that growth there. Footwear, see growth there. Steph curry, obviously golf and everything else. A lot of Different Reasons footwear is doing this. But the slip of the sales, when you start going underneath that 20 , everybodys always used that as the mark. Spending all of this money. The question to you would be, do you like the money spent in earn areas, though . For instance yes. I love that. I love china and the fao schwarz, plank has to say, listen, im yakkee town . I want david, not goliath. Parker, ceo of nike, mid50s, feels like starbucks to me. Mid50s. Nobody likes nike anymore. Emblematic . This any of fifth avenue store emblematic of the fact theyre spending a lot of money . Talk about the highpriced rental space. What . Look, i think its a really great company. It was it deserves to be down today. I need i like to see these high mobile stocks crush the numbers. Really, 77, forward estimates. Thank you. Just delivered inline sales with Gross Margins going down. Zero operating leverage, where, tons of competition. Its only getting worse. Adidas has risen from the dead. Questions whether theres an athleisure bubble. I absolutely agree. And the wing to the steph curry. Agree in terms of athleisure market. Actually having peaked. Thats not to say that wow thats not to say some cant continue to grow. I think lulu has a trick . I do. I think its expensive and i think the easy money has been made in this group. If youre going anywhere, agree, nike, at least margins going in the right direction, and after, buy it after the olympics, though. Talking about the stocks that are generally expensive. Two ways to get more expensive, one, a huge earnings, tough to do in retail right now. And second, pay expansion. Tough to doey when above 70 times, unless you get discount rates falling. Thats not happening. The fed will raise rates, discounts rates going up. At the margin hurt the consumer as well at the margin. Hard to see retail names push higher from here. You need the bigger short. Turned out not as big a short base on under armour as in caterpillar. Everyone hated caterpillar. Incredible. I started liking caterpillar, not because i felt bad for doug, obviously one of the nicest guys. Look, four years. I mean, four years of being down. I mean, i know he doesnt get the first draft choice like the sixers four years of being down. In the end maybe finally your year, to not get the first pick. Hes not trying to tank it to get the first pick. Was that what he was doing . Might have been. The other thing, mid30s, you want to own it. Control the margins. I like the inventory. Back towards under armour. Like the inventory side. A stock you pull it back and just dont look. Inventories one of the key questions the last going in the right direction. 44 to 30. Going in the right direction. Okay. This is a stock up until september of last year was a dlarl darling. Now correcting. Allow time. Im not ready to completely give up on stoert. Pull it back look at it over a course of the three to five yer period, we want instant gratification, maybe doesnt work in the next three quarters. Mid30s, worth a shot. Consumer, nordstrom upgraded to overweight. Easier comp, strong signs from the companys anniversary sale event after nordstrom and other retailers rebounded strongly over the past month and this call is our call of the day. Jimmy, you first. These oversold. Restaurants reacting today. The jaffrays call. Go back and remember these companies were crushed by the internet. Crushed. I think nordstrom, look, anniversary sale always mattered. Steph and i used to talk about that. Didnt deserve to sell where it did or masscys deserved to sel. Kohls, i just dont like the store. And rack is good. Stock got oversold but i cant jump up and down now that its had this move. The death of the mall greatly exaggerated or no . I look at l brands. I think they made the change at victorias secret and i think that its doing better. But at the same time, i recognize that id rather be in a strip mall. I like ross stores. Moo my dollar store. How about it jt. J. X. , dollar tree, off brands are still its painful to pay that full price. Scott, you look like a fullprice guy. No way. Then you go to sentiment. And everybodys on that side. Everybodys on by the way, i like tj a lot, and on it. Nobodys buys at full price. One of the issues. Thats amazon primes problem. Nordstrom will tell you amazon has Better Service than nordstrom, he said that to me. And nordstrom has some brands working hard at getting the younger consumer and some special brands into that store. Explain this to me. Talked about the restaurant stocks. Were going to get to that. The restaurant stocks are down graded on recession fears, and the Retail Stocks are up on no recession fears. That guy all of a sudden the big macro guy. Youre a macro guy, too. Look, to us its really the consumer environment is generally good. Weve got consumer incomes, wages, rising at above 3 a year, nominal terms over the next year or so. Gasoline prices incredibly low. Interest rates at record lows. The most buoyant consumer environment weve seen in some time. The issue, consumers moving away from retail and more into experiences. Broadening to look at areas such as media and other areas of consumption rather than just retail where the competitive environment, so intense. Some of the prices you pay for some of the less and less good enough retailer, where you can come up with your own experiences, like the nordstrom anniversary thing were talking about. You just have to think outside of the big box a little bit more than you had to in the past. Ands you talked about a short a minute ago. Look at the short in nordstrom . Thats part of whats going on. The sentiment trade. Everybody owns the restaurants and nobody owns the department stores. Its not going to take much sow see that flip. Drop a bomb here. Im in rome two weeks ago. With my 22yearold. She is going to be the first person actually a professional shopper. In charge of shopping in the country. She says, looking in the store. You go down every store is like, 8 00 for a handbag. Dad, gap. Im not going to rome and go into gap. Bad, looking a the bags. Everyones Walking Around with a gap bag. Go into gap, swimsuits, 9 euros. Hoodies gaps back. Look at the wolf note. No, not going to a guy in my ear. Im not finished with my gap point. Telling you, there was a time Walking Around rome with a gap bag, might as well walk around two shopping bags at luggage. Im done. Go to break. I dont feel i should read a tease after that. Certain sectors flashing warning signs, other go signs. What some say is the next great rotation, and it is next on the Halftime Report. Hi, everybody. Im sue herera and heres whats happening at this hour. Secretary of state john kerry raising the issue of russias involvement in a Democratic National convention email hacking incident with Russian Foreign minister sergey lavrov. The two talking on the sidelines of the asean summit. Earlier brushing aside accusations russia was involved. Democratic Vice President ial nominee tim kaine stopping off at a diner in richmond, virginia, this morning, before heading to the democratic convention. He typically meets with his friends at the diner on tuesdays and today was no exception. The gop president ial ticket of donald trump and mike pence campaigning in charlotte, North Carolina this morning. Trump praising veterans before slamming hillary clinton, accusing her of trying to sweep the problems with the v. A. Under the rug. And Airline Ticket prices scheduled to drop in late august. Thats according to fare compare. It says the magic date to fly august 23rd. Writedown. That marks the start of the Airlines Fall season, believe it or not, when travel demand tends to slow down. Back to you, scott. Sue, thanks so much. Talk back about the market. Talking about a lot of individual stocks and were going to hit a lot more. I promise all of you that. Go big. Go macro. Atul, if you think the market is frothy here, as jim does, what sectors do you want to rotate into . Look for, from an equities allocation, equities versus bonds. Drilling into that. We like u. S. Housing. A powerful cyclical and secular behind u. S. Housing. Interest rates at record lows. Its really the single best time to be going out and looking to buy a house for a u. S. Potential homeowner. U. S. Housing on top. Sector pick followed why in. Like u. S. Comp assumption, i mentioned earlier. Rotating away from retail into more experiences and media names as well. So theyre the top two sectors within the u. S. And we like technology. A strong secular story behind technology. Productivity growth is the answer to how we can see strong Global Growth in the years ahead, and technology is the best way to play that. Jim, point, counterpoint. Maybe you agree . Terrific. I think home depot hangs in there. People still spending on the home. I bet if we asked why we really like tj, home goods. Fascinating place to shop. I love housing. Stanley, hats off to you, steph. Stanley black decker, monster good quarter. That still works for me. Technology. Do we like tech . Microsoft . Theres been qualcomm. Cisco. Cisco, ebay, a new high. How about the chips . The run, rotation of the chips . Oh, my today chips having a good day. And one of the areas talking about. Texas instruments, what is it . Not just about phones, everybody wants to talk mobile, about auto and the rest. Go through chips, xpi. Many names not just tied just to apple. There are other areas. Where it all ties together and from a macro standpoint, think of the risk most talk about its china. Is china so bad . Two g20 meetings. Had two this week. No ones talking about it. Semis, the way they trade. Can china be so bad the way Las Vegas Sands is trading . And my personal hero has been absolutely incredible. Timing. Unreal. Ed to you. Told you. Got big and bigger entire way up. I like it. Las vegas sands. Year over year, two years. Yep. Now i know greg hayes was a little negative on chine that th china in the end. Honeywell okay, starbucks, the lead. Yum. We know china was getting better. Im not against it, other than the baltic freight, im not against it. Holding out for china rolling back over. They rotate from place to place. China, then europe, then whatever. Something thats always drags us down. And a venezuela. And then kimberly diapers are down 30 see that . Last point. Technology just got to be. Why . Mindful of europe. Most Technology Companies have about 30 exposure in europe. You have to see, brexit, a little slowdown . Watch the pmis in europe, thats a big piece of it. I am a big fan of technology and think cloud and also security is on the way back. Very down and out. Thats a cyber . Cyber arc . Pail oh all o. Checkpoint down 4 buy that. Cisco is moving more and more security, bought a bunch the other day. Chuck robins. Everyone wants over palo alto. I know. So much for the last point. And greedy is good. Do we blow that . No. Going to a break now. One of those go away completely . Were going to go do break right now. Much more on the markets and sector rotation. Go to cnbc. Com pro. When we come back, oil under pressure. One big voice on wall street says look out below. See how far the firm. Well tell you which one. And how far oil will drop. Big oil, refiners, all of it, drillers, next. Rs 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 some neighbors are Energy Saving superstars. How do you become a superstar . With pg es free Online Home Energy checkup. In just under 5 minutes you can see how you use energy and get quick and easy tips on how to keep your monthly bill down and your Energy Savings up. Dont let your neighbor enjoy all the savings. Take the Free Home Energy checkup. Honey, we need a new refrigerator. Visit pge. Com checkup and get started today. Welcome back to the Halftime Report. Im Courtney Reagan and this is futures now. Our focus today is on oil. Morgan stanley out way note predicting that the price of crude oil could drop to 35 within the year. I am joined by scott nations and jim iuorio. Scott what do you think . Is 35 realistic . I think thats pretty optimistic, but they certainly have the direction right. Get the one good piece of news for crude oil out of the way nap is were not longer adding the stockpiles globally, but here in the United States theyre huge. About 100 Million Barrels more than the fiveyear average. The wild card in the situation, if the dollar gets stronger, crude oil will take it on the chin. Jim what do you think . How low can oil go . Do you agree with scotts thesis and Morgan Stanleys prediction . I have 38 at my target on the down side. I think supply is a big part of the story, but i think the interesting part to me is that crudes big plunge was built on the foundation of, the ecb and boj easing at the same time the fed would tighten. Talking six months ago. That changed, then, to the fed being neutral and is shifting more to the fed tightening again in september. Thats probably going to hurt crude and what im building my negative thesis on and negative unless it settles above 46. At that point, id be done with it. Thank you both, gentlemen. Tune in for more on futures now on cnbc. Com. Talking with Dennis Kartman and peter shipp today. Back to you. Thanks. Well be there. Check out shares of bp slipping on a weak Earnings Report due to falling oil prices. Look at refiners as well. Theres a look. Theres big oil today. Slumm sl schlumberger. Whats your trade here . Steph . My strategy hasnt changed. The oil price, in this trading range. As low as 35 . I dont know. 40 to 50 im thinking, then maybe higher next year. Because i do think even though supplies are loose now you see a little tightening going forward. For now im sticking with high quality, blue chip, some that have dividends, but best in breed. I was buying schlumberger, for example. Told us north american margins bott bottomed. In that segment within energy is a place i want to be. Ty didnt i hear you say dont ever bet against schlumberger . Sister and i doing a complete mind meld. Live long and buy slem bchlumbe. Not with the Morgan Stanley, you know, death rattle call. Schlumberger laid out how this was the worst decline in history, but it is bottom. They said it several times they are bottom. You go against schlumberger youre going against the people who know more about oil than anyone in the world. Im not equipped to do that and cant join Morgan Stanley in the oil bash. I think by the way, refiners, dont want to buy them into the quarter, because i think bp had a little trouble, but more importantly, rusty brazil, does rbn saying be aware there be ethanol concerns that are, also shrinking margins. I know people want to buy the refiners every time oil drops. Oh, that little bit of fluff, but im not biting. Longer term you want to buy 66 . The refiners tell you why. 66 report july 29th, going to be awful. Have a debate. Come on. Ps xsh, jims going to agree. Performed well against double digit losses. Oil, everyone is looking for a home run trade. The home run trade that was in the marchapril period. Home run trades have gone in oil. Easy money is over. That trades done. As it relates to the refiners, result of brexit the following north Sea Oil Fields need a tremendous amount of infrastructure investment. 245 theyre not going to see that as a result of brexit. The advantage, strengthened the last couple of years relative to brent. Youre now going to see brent. Youll see brent be stronger than wti. Thats going to benefit refiners. A longer term trade. It s. Take advantage of the earnings will be awful for refiners. Take advantage of the weakness, be in the best of breed name lie psx, think longer it were. Brexit, not putting money in. Nothing but option paper going into valero over the last couple weeks like you wouldnt believe and looking for this move to get up through the 50 moving average up towards 55. We see that happen, interesting, because the xle continues to technically hold right on to that 50 day, which has held up a long period of time. Chevron read through . Maybe just exxon, chevron, right. Not that great an operator. Bp struggled so long. Ill take the other side of that xle last week. Sold last week. Oil still had a best recovery in the last 20 years. We upgraded in early january. Its done well. Sold that last week entirely. Youve got oil prices, headed up dramatically near 100 move and three things working against it. Global growth not at certain and two, supply continues to come through in the market. Number three, u. S. Dollar liquidity pulled back negatively impact all commodities. Schlumberger, short barrels a day is a bad call . What theyre saying . No. I think within oil we like refiners. Not big oil. Dividends look healthy, even though, we see investors, why they pile in. Definitely dont like crude. Cant see it coming through in oil in a significant period from now. Refiners is where you want to be. Other than that we dont like the sector. Whos hungry . One analyst is not when it comes to the dining sector. First to michelle crusarusocaba at the democratic convention. Coming up top of the hour on power lunch, mcdonalds shares. Talking about diving after reporting those disappointing u. S. Sales. Has the fast food giant reached peak breakfast . Ton of big names gearing up to report latest numbers after the bell including, of course, apple and twitter. Both having a rough year. Set up how to trade it and oil under pressure again lately. Is it back in play bringing down the markets again . And, plus, live coverage from here, the dnc, a lot of big guests coming up and preview of whats going to happen tonight. The Halftime Report is back, right after this. Announcer Halftime Report with scott wapner is the place for marketmoving interviews. You dont call a company a sewer because the company made a mistake. Announcer real money we are short both tesla and solar city. Announcer real debates. People think that globalization has hurt businesses. Its not. It is technology thats hurt businesses. Competition is a good thing. I dont want to go back to a single marketplace. Announcer the most profitable hour of the trading day. I love this show all i do is get to tweet about this show im on the show. This is the greatest moment of my life announcer the Halftime Report. Weekdays at noon eastern. Hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Real is touching a ray. Amazing is moving like one. Real is making new friends. Amazing is getting this close. Real is an animal rescue. Amazing is over twentyseven thousand of them. Theres only one place where real and amazing live. Book a seaworld vacation package and eat free. Welcome back to the Halftime Report. I want to show you shares of starbucks today. Goldman added the coffee giant to their conviction buy list. Jim, earnings this week, Howard Schultz declared anomaly. Is he right . I love the call. 4 percent clearly frappuccino could not be introduced one even by the great people in starbucks. I love the china number. Golden call excellent. Not what anyone was looking for. Very, very low and works to her 69 price target. About the china number. Youre right. Talk about expansion, will they be able to expand acht the pace they want to expand in china and will it have results . Fulfilled both. Expanding, doing an outstanding job and executing as well. Pivot from starbucks to the bigger restaurant space. Where all over the space, recession, recessions coming, downgrading almost every stock on the face of the earth. Everyone owned the restaurants previously. Not new own dominoes, in the pizza space. Panera, garden in a noodle or texas road house, having a bad day today. Cut red robin, noodles, roots, fiesta, road house. Listen, a lot of discounting going on now in the space. You see that with wendys. Burger king, 1 hot dog. Walked into a mcdonalds, a 10. 99 lobster. I dont know why anyone would like that. That. Who has the lobster . Mcdonalds. 10. 99 lobster roll. You only do that if youre going to get the chicken at shake shack. Fabulous place in westhampton. Heres my problem with the call, its a doubleheaded call. Panera began is as good as anything. Some companies are doing Better Things than other companies. But they have labor costs to deal with. Thats absolutely true. But commodity costs are coming down. But 15 an hour thats hurt popeyes. Jack in the box is great. I think you have to be selective in restaurants because this group has been on fire and a lot of people have been parking pun in the consumer space in restaurants because of the experiences that youre talking about and lower gas prices. The experiences like the 10 lobster roll. You have to be very Company Specific in this particular group. Thats why i like yum. Talk exception when i said they tasted like tires. The lobster roll . No, the burgers do not taste like tires. I had a great meal at mcdonalds. Every time im in i tweet. Maybe someone should trim the menu down, man. Were going overtime. I just talked with jason in my ear. He says because its a tie game we get to go another 15 minutes. Go whole quarter. This is a twominute warning. Back right after the break. Can a toothpaste do everything well . This clean was like pow. It felt like i had just gone to the dentist. My teeth are glowing. 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Tonight he speaks with drug developer alkermes, antiopioid addiction drug taking on new importance after the democrats raised the issue of Substance Abuse in their 2016 platform. Plus, talks to key corp. About the landscape for regional banks ahead of tomorrows fed meeting. Banks have not been doing anything lately. Maybe the fed gives us a little bump on these. Obviously the regionals have just been dead in the water. We like the regionals. Do you . Yeah. If you can avoid some of the energy exposure, they got some commercial real estate exposure, dividend yields great, u. S. Economy doing well, bullish on housing helps regional banks as well. Revenue amount will look good. We like regional banks. You like regionals. Joe. I like some of the regional banks. Some you heard from blackstone yesterday was the improvement in the Energy Credit portfolio. I think thats a theme that you could play off. Steph. I still like suntrust. You do . I do. Really. Theyre growing. Are you hanging in bank of america . I am. Were going to do all right in that some day. Some day. The stock some day. Better be better than some day. Well, weve been there together forever and hasnt done anything yet. Quick break. Jim joins us for the second half. Tmobile covers your business in more places. So you can take your business just about anywhere. Plus, our extended range lte reaches twice as far and its 4x better in buldings. Get more done in more places. Switch your business to tmobile work today. With usaa is awesome. Homeowners insurance Life Insurance automobile insurance i spent 20 years active duty they still refer to me as Gunnery Sergeant when i call being a usaa member because of my service in the military to pass that on to my kids something that makes me happy my name is roger zapata and im a usaa member for life. Usaa. We know what it means to serve. Get an insurance quote and see why 92 of our members plan to stay for life. Mashlgts closing in about three and a half hours. Lets do twitter. They report after the bell. One Year Anniversary of dorsey coming home. Oh, good. Dorseys got to spend more time at square. They have credit issues. So my suggestion is that tonight say, listen, i got to go to square. I cant stay at twitter. Can i jump on the call later . Im suggesting spend more time at square. Did you see that quarter . It was a weak quarter because of credit issues. Im just doing him a favor. Can you deal with twitter as a stock as long as hes running both . Thats what youre saying essentially. Well, real problems in terms of credit, the other has problems in terms of growth. This is a guy running two teams. Hes not bo jackson. We cant be able to do that. Ross levinson said 24 months theyre bought by someone. Do you agree . I agree with that. Tim armstrong is not thinking about rounding that up. Verizon said they want to be a mobile media company. Nothing more media than twitter. No reason for apple to look at it get it for a song compared to what it used to be worth. Apple doesnt want to pull the trigger on anything big. They got to build the services side. Oh, do they ever. Thats where the disappointment is. Thats the one area of growth theyve got and second largest revenue stream so theyve got to build it. I totally agree. If we hear that tonight, then maybe gillis is wrong. But that list of buys, wow, got to get rid of those guys. I cant wait to see it. I know youll be all over it later. Thanks for being here. This was awesome. What are you talking about . Why are we winding things up . Were going into o. T. Its almost 1 00. They cut us, man. This is the 4 00 game, not the 1 00. I got to read this right now, congratulations, pete. Oh, hey. Etrade has acquired options house. Wow. Yeah. Oh, my, geez, thats fabulous. Oh, thats neat. They loved our option platform. They thought it was great. And i think General Atlantic did a great job. Great work. Thanks for being here, otoole. Good to be here. Thank you very much. Well talk after the show. You bet. Power lunch starts now. And welcome to power lunch. Youre looking live at the floor of the Wells Fargo Center here in philadelphia as day two of the dnc kicks off. We have a huge guest lineup coming your way including Hedge Fund Manager orrin cramer, Peter Schumer and dick morris as well. So many parallels already to the Republican National convention. Once again, the organizers of the convention perhaps not getting the headlines that they wanted out of day one. Michelle obama last night, the biggest winner when it comes to speeches. Got lots of accolades. People were so thrd