Lebeau in chicago. Stocks up 20 already. Went up after elon musk tweeted a Product Announcement later this afternoon. The tweet from elon musk, came out within the last, oh, 45 minutes, and once he put out this tweet saying tesla Product Announcement at noon, california time today, then shares of tesla took off. Pure conjecture what this Product Announcement has to deal with. Talking something involving battery range . Something involving autopilot . Whether its changing the name or tweaking the software as it continues to be under investigation with the national highway Traffic Safety administration. Or is it something far bigger . Historically, melissa, we should point out the big news, really big news from tesla tends not to come on these type of announcements from elon musk, when he says, look, later today were having a Product Announcement. Same sometimes we get things like, were starting a Leasing Program at tesla. They announced that a couple years ago, stock shot up, middle of the day. Came out, said, well, were having a Leasing Program. People said, thats it . A Leasing Program . So while its fun to speculate, you got to take this carefully here, and not get caught being too excited about the news, because you never know exactly how significant its going to be. And think that investors would be skeptical, phil, if they actual lay nouns add new product at a time they are still going through, ironing out wrinkles and x production and still unrolling the 3 production. Right. No. I would be stunned if were looking at an allnew model announced but you tend to have derivatives announced. A new battery range being announced for the model s or x and that significant, important for tesla shareholders and for tesla fans, but in the whole scheme of how tesla operates in the future, im not sure people would get terribly excited about that type of news. All right. Three hours away. Phil lebeau, launch. You bet. Pete, making sort of a jokes some truth to it. What if its an increase in range . Id be thrilled because it wouldnt be thrilling. Yeah. Is that really the most market moving thing he could possibly say . No yo th, i dont that would be. Talked about that name before. Look at it on a chart, weve gone back and forth many times. Look at the things thrown at tesla yet it still holds on to that 200 day moving average, 50 day moving average, continues to be strong because of that. Look at implied volatility, extremely low. A great combination, if you want involved in tesla, options are cheaper than in an extremely hong period. You can be involved, a tweet like this, followthrough from the tweet . They could see something. And point, updating options. Yeah. Perhaps not surprising, mel, unusual activity will tesla prior to mr. Musks tweet. Always is, isnt there . Very good bets, that the 230 calls are the ones i bought. 225s, 227s, 230s all hitting, and many of them hit, of course, after the tweet hit. Youd expect that. Some of these were hitting just prior to that. I bought them. Im in some of them still. Thats why im making that disclosure now onair. However, i think whether this is involving mobile eye and delphi a deal they did. Selfdriving technology that can go into any vehicle. Exactly. Whether or not the autonomous, relationship for autonomous driving with tesla breaking off, i think musk will come out and trump that announcement, and i mean that literally, bu i think hes going to come out and throw all kinds of shade on that combination, and the fact that hes doing it an hour before the stock closes. Interesting as well. It doesnt really change the story about tesla. Right . Its about production, and getting the production out there. Getting that car out there. And make Something Else. True, but are they going to be able to produce it . Right, exactly. And the big issue. The question. Simple as a battery or new solar roof. It could be anything. I agree with jon. Timing is interesting. All of this, go back to what he does. Marketing. Gets his name out and gettinged brand out and free marketing. Make as tweet, everybody is covering it. I dont think theres anything. You dont . I dont think iming in long. 2 pop on nothing . His comments are spoton. So Much Negative news r surrounding the company. Not talking about solar city. And a ratio. Up 1 . Something evolving solar city . If there is a part of the tesla franchise that needs a positive catalyst, solar city is it. See again. Two, three hours away from the Product Announcement right to the markets now with stocks near alltime highs. Bank of america telling investors to watch out facing elevated risk of correction. Bring in dan suzuki. Great to have you with us. Yearend tart is down on the s p 9 . 2,000. And you say september is a seasonally weak month . Down 9 , happens next month . I think its very likely it would happen in september. What were saying is the risks of correction here, significant correction, pretty elevated. I think if you look at the rally that weve had, its very much been driven by positioning, growth and rates. I think all of those things have been a go from being tailwinds to the market, winds Going Forward, and look at positioning alone, seeing Short Interest as basically a 12month low and our work suggests that cyclical exposure for Fund Managers is at the highest level since 2008. That positioning is no longer been a, going to be a big driver for rallies here. Dan, do you have a catalyst what is going to create this correction that youre talking about . Sure. I think theres lots of catalysts. Given how High Expectations are, it doesnt take a lot. See growth disappoint. One of the things we looked at was fiscal expectations for fiscal stimulus. Basically at 2009type levels. Any you know, disappoint there could disappointment the markets causing correction. The other thing, earnings expectations are high going into next year. Basically unachievable. As those earnings come closer o to, as we get closer to those earnings i think that will disappoint. On top of that, i think the way we look at it, i think whats priced in to Interest Rate markets here is probably about half of what is actually going to happen from a fed hike perspective as we go into the jackson hole meeting later this week and then what we are, our work shows looking at election years, you typically see a pickup . Volatility cap ex into electi s elections. All catalysts for a pullback. Usually you get a big earthquake. Its joe. A tremor occurs before that. 2008 a tremor basically occurred in march of that year. Surrounding when jpmorgan stepped in with bear stearns, things of that nature. By september a fullblown earthquake. In the catalyst youre mentioning right now, do you believe or can you find evidence that any of them have actually affected or impacted the market in that capacity as a tremor so far year to date . I dont know i see that other than possibly brexit . A good question. I mean, i guess the key thing to keep in mind is that were not calling for a 2008 type of bear market. I mean, in fact, were looking for a correction, and not saying that this is the end of the bull market. But in terms of early signs that there could be problems in the markets here, one of the things we looked at a credit fundamentals ar still pretty weak and the credit markets are definitely showing signs of tightening. Credit is one of those things thats not a problem until it is, but given how high leverages and how trends are deteriorating we think that can be a problem. The other thing to keep in mind is that if you pull up any chart of any economic surprise index, its been rolling over the last three, four weeks. As those things continue to come in surprise less to the upside that could disappoint investors, particularly given how High Expectations are here. Given what you said and nobodys going to disagree. Markets built this already in. What makes Something Else happen, because if any of these happen i think the markets already said, we understand it, digesting it, but get all of this stuff, elections. All the stuff with Interest Rates, but nothing is out there i see right now that, you know, can move the market. Brexit totally different. Do you see something thats different . Yeah. Well, first of all, i mean i guess i take issue a little with the fact you say that the markets arent pricing in. Weve seen a massive shift in investor sentiment. We see it in discussions with clients and you see it in the data. I mentioned earlier Short Interest on the market is basically gone from extreme levels to the lowest levels in the year and i mentioned cyclical positioning, beta positioning. All reflecting total solicit in investor sentiment. All the bear stuff youre talking about is not necessarily baked into the market here and i think all you have to do is see growth disappoint, and i think thats all you need to see to see a catalyst for the market to go down here. As i point to one of the things that if you look earlier this year, credit was, became a headline problem, driving markets and everybody was worried about credit. Those fears have gone away and actually look, when you think of the fundamentals, i actually dont think theyve gotten much better. The fears gone away because oil prices stabilized . Correct . From the 20s to where we are now, remaneuvering a big credit rick. One of the biggest fears for banks. Credit event or credit exposure because of the oil industry, and that seems to have stabilized. Isnt that a fundamental that actually stabilized . Definitely Energy Prices improving is a positive for credit overall, but if you look at the fundamentals even x energy, looking at highyield leverage, x energy, x materials at record levels. Small cap leverages close to alltime highs. Not just an energy story. The fundamentals are overall weak. One of the things to keep in mind is that if you adjust for energy and adjust for currency, looking at the weakest sales growth for the s p in three years. Fundamentals just arent that good and valuation are basically in 12 premiums to history, button it up for us. Say youre right. Go down 9 to year end. Which sectors will do the worst and which will fare the best . What should we stay in . Yeah. I think the thing, key thing to focus on right here is quality, and leverage. I think the things that would lead us on the way down the lowest quality, riskiest stock with highest leverage. You want to take advantage of this rally weve had in the markets and move up the quality chain. So some examples would be materials, a great example of a sector rallied so hard and has a lot of leverage as pricing in a lot of the good news that we took to disappoint. Leave it there. Thanks for your time. Senior investment strategist. Show of hands around the desk, whos buying . Raise your hand if you agree. End of the year, we see that correction. Absolutely. You do . The only one. Well, definitely volatility on the floor. And all desk yet i said, raise your hand. But pete down 9 on the year or correcting currency . Down 9 . From year, to 2000 . Basically basically say it is going to be volatile. Down 5 , 10 ps ps . 20 ps ps . Nobody knows. The poise hes not believing the u. S. Economy is getting better. Doesnt thing earnings troughed, i believe that we are seeing that. Much because of the dollar. Much because of energy, and if you think earnings troughed, Interest Rates stayed low, a good recipe between now and the end of the year to see valuation stay around these numbers. And whether or not you agree, do you agree stay with materials a a highquality sector . Materialless outperform the s p the remainder of the year and could be a potential of a 5 to 10 krcorrection from here, bounce back on the other side of it. To me, the strat, buy volatility. And if you look what hes saying, mature cycles, high leverage. No question. But the fundamentals longer term much better for materials. You might get that blip. A lot of return, better off. Shortterm blip not a long term. Got to be selectsive. Take a look at letter x. U. S. Steel. Got up to 27 bucks, 28 bucks pulled down into the teens. I bought it. I think will will have a rebound. Look at others, tck, tech, resource unbelievable move. Up 300someodd percent year to date or more. That one, even though frothy, is one im going to stay away from. Got some activity today but im staying away from it. You bought what he sold in terms of down 9 . Expecting a correction, yes. Flip the question around. What do you want to be out of if youre anticipating that sort of decline . Trimming stocks. Look at my disclosures, look now and see stocks, much smaller grouping. Look at options in an incredible large. Theyre cheap. Because of volatility. So low. Vix itself, raidi itrading 11. 4 an opportunity to ride into the market. Use options. What were doing now. I think if we see that correction, everything gets swept down. It happens every single time. Now you got to go back to the quality names on that last brexit run. It was tech. Talked about it. The day of brexit. Tech. What do you buy . Cisco. The way you have to approach this. All right. A lot more ahead on the Halftime Report. Stay tuned. Announcer coming up a big call on the oil stocks. A new wall street analyst weighs in with a new take. See what he likes and what he doesnt. Next. Best buy, crushing it today. The stock up bill time after the Earnings Report. Is todays big run good for every stock that helps you help your house . The home trade is coming up. This is the Halftime Report on cnbc. Narrator the best place to find adventure. Kubo come on, this way. Narrator . Is in the forest. Kubo wow. Narrator so grab your loved ones monkey dont even. Narrator and explore a world of possibilities. Kubo its beautiful. Narrator visit discovertheforest. Org to find the closest forest or park to you. Or keeping a Hotels Guests cuttinconnected. I to 35,000 fans. Businesses count on communication, and communication counts on centurylink. Welcome back to the Halftime Report. Goldmansachs, throwing more cold water on thes recent crude rally saying the august rebound has been driven by an opec freeze not fundamentals and the price rally should stall. Gold meen reiterated forecast calling for 45 to 50 of crude into the summer of 2017. Note, crude had a major reversal in the green on reports iran may, in fact, support a price intervention. Interesting flip intraday here. Sticking with oil, finding buying opportunities in Energy Stocks specifically the refiners. The firm initiating coverage, at a buy, phillips 66 at a hold rating. Call of the day. Sarat owns valero and marathon. And me, too. Buying these as a longterm play. Whats happened is oils come back down. If you think more people are going to be driving, which we do. Think more refining outlets coming across, and one of the big things about refiner, look at capacity. Very high. I think at this point, cost increases, consolidation and eke out, longer term benefit of strong balance sheets, good dividends. Want to be a longterm investors, stay here. Steph, why are you in oil . A little bit more beta. Been kind of slowly building more empss and service. Even though theres volatility in the next couple of weeks trying to get the gas inventory down, an opportunity to buy quality names, high quality. Number one, number two in the space. End of the year, oil will be higher. Next year a lot higher. I dont think refiners lag, fine, but lag some of these other groups if oil does get to where i think it will get. If you dont believe Goldman Sachs and think oil will go higher, maybe you do believe Goldman Sachs and oil will be slightly higher but stable, joe a. Coin in your pocket, flip either side. Fair enough. Would would you be . Higher beta would be shale, probably. Uhhuh. Somewhere between your emp and r refiners integrated . I own a hodgepodge, and own chevron but also eog. And contra, much more bait tha and adding to on the recent deal. If you think, depends on review. Oil straight up, 40, 60, stay with refiners. Buy back share, consolidation. Theres your game. Utilization oof the refiners ramping up over the last eight weeks driving positive momentum. Look more of an investment not a trade. Thats the rule to look at. Peanut butter jelly and autonomous cars. The trades in todays biggest movers ahead in the blitz. And going hunting for names that still look cheap as a market hovers near alltime highs. Its a question we get from some of our largest banking clients. The face of their business was tellers. Then atms. Today its their mobile app running on the ibm cloud. Across every transaction, the hybrid cloud helps their data move quickly and securely. Our clients are building out features and pushing updates faster, on five continents. With the ibm cloud, they can move at the speed of any startup. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Final trades yesterday. Joe, like the jm smuckers. Phenomenal stock above 150. All about the coffee, folgers doing well. Dunkin donuts k cup doing well. And stock sinking after earnings. Joe, where do you stand now . See if its A Ray Donovan trade, as the story changes. You dont watch . I do. Scratching my head. I actually watch that show. Changes the story. Has the story changed . So across the board, fundamentally, this is a lousy quarter they posted. But the thing that you have behind it is you have a lot of strong Technical Support going back over the last five years. I would take this stock below 130. I would be out of the stock or reducing the position but willing to stay in this a little and just treat this one Earnings Report as a oneoff bad experience related to bad bets and folgers coffee. You own it . We do. Price coming down. Not A Ray Donovan . I dont think so. Expectations going in high. 20 times earnings. A hugement of money on consumer staples. This is a high quality one. Target announcing a digital push. Love target, and i do. Last night tom lee on. Look atted in side of the story. Phenomenal. Valuations 12shgs, 13. Dividend yield, 3. 5 . This name has everything going. Grocery and issue. Digital the other. Immediately addressing digital and over the next couple quarters, not in one quarter, groceries have to guess attacked. And best buy has a problem . No. Why . Walmart had groceries. Advantage. 56 versus 20 . Mix is not there for target right now. Denial . No. I agree 100 . Because im right. Right . Somebodys got to be right. What are they selling at best buy . Electronics. Smartphones . No. Big tvs and appliances. What target sells. No, no, no, no, no. Target is not big tvs and appliances. Best buy doesnt have target has to get food right but starting to get apparel right. Critical for the story to work. Invest a lot. Walmart hasnt invested a lot. Not sure the Gross Margins are sustainable at walmart and depressed at target. Developing a fully autonomous driving system. Doc is in delphi calls. Yep. Happy about that. Stocks up 3. 6 and scaling out of that, still in delphi. Mobileye, biggest pop, 7. 8 million shares turned over again and very active in terms of the upside potential, because delphi is the big dog in this one and getting together with mobileye makes this a combination Going Forward for autonomous vehicles. Panera initiated with a buy rating. Stock negative after opening higher here. Steph . Up 12 on the year. Trades at 32 times forward estimate. I understand why this person likes this stock. They have really great sales. Theyve got market share gains, the consumer actually is going back to the store after years of investment. The question, where are they in the investment cycle . I dont think theyre done on that cycle. Not getting operating analyst expects. Im not buying it. Wouldnt sell, but not buying it. And higher at 26 this year, sarat owned this a while. We have. Look at a positive versus neg live, up 10 for a year. Still like the company. No debt. Solved most of issues. Full Semiconductor Industry is on fire because of consolidation. Hold it. 3. 5 dividend yield and 50 times earnings. Keep it a while. And best buys big surprise. Shares are soaring on an earnings beef of jumping comp sale stores. Listen to jim cramer this morning. Home theaters. People used to buy that as part of investment in their home. Its back. Look where people are spending. They are spending it to make their house worth more money and its working. So pointing to a broader Home Improvement theme pointing out. How do we trade that . Do you buy that . I like the name. I do buy into what jim was pitching there. As a Home Improvement and theres money and margin in that. Very helpful, but this is a huge move for best buy. I mean, so i wouldnt be chasing it, in other words, and i think youve got to be patient with this stock, because this is, what . A 16 , 17 move today gin credible. Yeah. The thesis jims talking about, more and more people are putting money into their homes. Mortgages are hard to get. New homes getting slower. People are putting more money into their homes. We own a couple. Materials. The materials. New cabinets, new faucets. Upgrading it. The consumer, its an experience, enjoying your home. Living life to its fullest. These are areas you can get into. Feel like the retailer side of things. Sell the mask oh stuff. And did own whirlpool but sold it. Went from 8 to 13 multiple for a company with execution problems and taking gains in Stanley Black and deck a lot of exposure to the low lowes and home depots of the world. This is team weve talked about the last five years and im not sure how much oomph is left in the stocks. I own lpx. That one i think is poised to move a lot higher. Yeah. And you guys both like home depot and lowes. I do. I like them. Actually disagree with stephanie. I like whirlpool toll reaccelerate above 200. That stock struggled but youre seeing an environment now where most people are incredibly skeptical about the ability of the economy to lift off and i think that could has and positively impacts. How long do appliances last . A housing boom, 2006, 2007. Isnt it time when appliances are degrading . Exactly. They say its seven years. Should be less given all the technology innovation. You never know. They say seven years. All right. I like both home depot and lowes because theyre so difficult to amazon. People arent going to be able to walk in and take all of the bags of dirt and Everything Else that theyre getting out of a home depot or a lowes. Those are what bring you in the door and then the rest of it moves off the shelves into your cart. So i still like those two. I think they maintain margins even with amazon out there, because again, you have to have an instore experience for those heavier amazon, best buy was supposed to get crushed by amazon. Biggest growth . Online. Shows you, they have figured it out and they are competing with amazon. Are you long . Im not. Wish i was. No. You will not be in right now . Wouldnt chase it. Absolutely not. Next up, epipen controversy. My lon upping its popular drug and this is sign of the times . Sow sell kby l biotechs . And right now at 2189 on the spx. Back in two. What are we gonna do . How about we pump more into promotions . Nah. What else . What if we hire more sales reps . Nah. What else . What if we digitize the whole supply chain . So people can customize their bike before they buy it. That worked better than expected. Ill dial it back. Yeah, dial it back. Just a little. Live business, powered by sap. When you run live, you run simple. Welcome back to the Halftime Report. Sue herera has the latest headlines. Hi. Whats happening at this hour. Secretary of state john kerry speaking in nigeria commenting and commending the Nigerian Government and its neighbors for steadily degrading the capabilities of the Extremist Group baqa has ral boko haram. And officials are investigating five new nontravel related cases of zika. One of the cases is in Pinellas County and the other four in the impacted area of winwood in miami. He said they are making headway in clearing the winwood section. Mcdonalds recalling 32 million fitness bands given away in happy meals. This, because they might cause skin irritation or burns to children. It received more than 70 reports of incidents. And a special party at malaysias national zoo to celebrate the birthday of a mama giant panda and her baby. Born a year ago august 18th. The mothers birthday, august 23rd. She was a gift to malaysia by china back in 2014. There is nothing cuter than panda babies. Sorry. Just isnt. Thats the news update. Just so darn cute. Im a sucker for them, too, sue. Thanks. Sue herera. The drug price gouging debate back on the table. Senator grassley explains an explanation on epipens price increase and Bernie Sanders also weighed in. Something on therder off fivefold for a product widely used particularly among children. Its backtoschool children. The time you referish epipens. A once a year kind of thing. Is this a concern . Yeah, its a concern, and its surprising at least to me, mel, that everybody goes after martin score ry for good reason. However, he was just that shiny object and Congress Just said, oh, got to get him again, because well have people watch television, watch cspan and or cnbc for whatever happens to this investigation. They should be all over mylon about this. Not a biotech or big phrma. Anytime you jack up prices like this. Epipen used to be 50, north of now 300 for that epipen . That needs an investigation is. Mel had a great tweet earlier today about all of the other products that are out there that have had their similar prices jacked up. Its disgusting. Not even just all other. These are mylon problems. Up 425 for generic gall stone drug they produce, 440 generic esophageal reflux drug mylon produces. Up 400 for an irritable bowel dr drug and only for the fix six months of the year. If you are a mylon shareholder, you guys arent, but if you are, should be be aware the shiny light is on you . Take it across the other companies we havent looked at. What are the other products charging five, seven, ten times for things easily copied but nobody does because margins are so low. Overall haze. Unless you have a specific drug that really canty replicated, you have to be really careful. The other part to the story, theres actually a competing version of the epipen teva has and held up in fda approval, in the process of being approved. Got to wonder, talking about this before. How do you get the acceleration process to get the approval part . Maybe thats the route . By the way, i think there are specifics they do gouging. No doubt about it. Talk about martin scarelli. Keep in mind this is not all of biotech and pharma. If we start to see any overreaction to this, like we saw the reaction with the tweet from hillary, this is something that youd start looking for opportunity, because not everybodys out there gouging. But were flot seeing that yet. Have we already built in that reaction . Do you with were a little inured because we had that tweet from hillary . To say that means were not paying attention to this president ial election. The narrative increases going back to school and the epipen is front and center in headlines. Go back to top of the show. Is a correction coming . If a corrections coming, i think peter and jon mentioned. Biotech will go down and go down hard because its recovered as much as it has since the first quarter. Exactly right. Such a nice recovery. Right . So if the ibb was down to 140, one thing. This thing rallied huge and taken everything up with it. I agree with pete, selective. Companies that have problems and those that dont and you want wont want to buy the companies that are hit but they have to come down a lot to get aggressive, i think. Much more on the epipen on power lunch. Interviews Richard Blumenthal calling for price cuts on this epipen drug. Sarat is sitting in the number two spot of the halftime portfolio. Strategy to fight for the top is next. Plus stephanies defines value. 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. Ay want products and services, but they demand the best shopping experiences. Theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. [rock music playing] [music stops] [whistle] [rock music playing] [record scratch] announcer dont let e. Coli mosh with your food. An estimated 3,000 americans die from a foodborne illness each year. You cant see these microbes, but they might be there. So, always separate raw meat from vegetables. Keep your family safe at foodsafety. Gov. The check they sent isnt enough to replace your totaled new car. The guy says they didnt make the mistake. You made the mistake. I beg your pardon . He says, you should have chosen fullcar replacement. Excuse me . Let me be frank, he says. You picked the wrong insurance plan. No, i picked the wrong insurance company. With Liberty Mutual new car replacement™, well replace the full value of your car plus depreciation. Call and if you have more than one Liberty Mutual policy, you qualify for a multipolicy discount, saving you money on your car and home coverage. Call Liberty Mutual for a free quote today at thats liberty stands with you™. Liberty mutual insurance. Enepeople want power. Hallenge. And power plants account for more than a third of energyrelated carbon emissions. The challenge is to capture the emissions before theyre released into the atmosphere. Exxonmobil is a leader in carbon capture. Our team is working to make this technology better, more affordable so it can reduce emissions around the world. Thats what were working on right now. Energy lives here. On deck on power lunch, mylon under the microscope and lawmakers looking for answers. Senator Richard Blumenthal joins us. And the president in baton rouge, louisiana. Expected to make a statement during power lunch. Well have it for you. And tesla making some kind of big announcement. When it happens well be all over it. See you seen, melissa. See you then. And heating up, sarat now in second place up 27 , and you actually made a trade today . I did. Taking money off xpo. A great run. Bought it specifically because this is a Logistics Company up 37 . Still like it. Own it in our portfolios, a way to go, but i want to trade into air lease. One of the leading lessors for planes. 200 customers. Look at its book, 100 is already visibility for 2017. 90 for 18 and 80 for 19. 8. 5 times earnings, good play to play gdp growth with diversified lessor acrossthe board. Remember, follow all the akd cnbc. Com pro. Our residential Value Investors always on the hunt for names that the market is underpricing. Step, up effects. Macys. 12 times earnings, 4 dividend yield. Why i think it has more room to go. I do think this is a longer term position. You have to have patience. But the company is really doing a lot of things to get it right. Theyve got the brand name. The global brand name for sure. So if the consumer comes back. Fine. Im not banking on that. Rematter toing stores and products. Getting smarter. Getting more productive. A new ceo focused only on merchandizing, and really getting that piece right. Theyre going to simplify pricing and do a lot more to get the customer more comfortable once in the store. Theyve got a real estate optionality. Closing 100 stores. I personally dont think its going to end at 100 stores but for now well take it. A lot of optionality there. I mentioned, at 12 times earnings, 4 yield, still fairly low expectations out. In the past two weeks alone, a real pickup in the Department Stores and a lot of retail names. Nordstroms, macys, urban outfitters. A number come to life. A buyer . Incredible momentum, yes, i would be a buyer of macys. Talked about it, 40e 30s. Interesting to me to talk about looking for value, you are going to get so much more value out of financials as of august 31st when the reits spin off and have them now at the s ps 11th sector. Thats going to cheapen the overall value of financials clear when you look for the average yield. Pull the reits out, that yield compresses further. Sarat . On your radar . We own macys. Used to be in my portfolio. Investor luck. A long term play. I agree. Down 10 for the year, harmon. Leader in entertainment in oems. Look at their guidance for 2019, already baked in, that doesnt take any increase of any Additional Technology in the cars. Trading at 12 times earnings. Going to grow almost 8 annually the next three years. If you believe that the car and we talk about tesla all the time, more technology, you want to be in Companies Like the harmons of the world that are increasing their share. All right. Two najarians means a double dose. Bullish, jon and pete, what theyre making next, and first, s p sectors how theyre trading right now. Consumer staples, utilities, the yielders are in the bottom part of the screen there. Halftime report, back right after this. Like centurylinks Broadband Network that gives 35,000 fans a cutting edge game experience. Or the network that keeps a leading hotel chains guests connected at work, and at play. Or the it platform that powers millions of ecards every day for one of the largest greeting card companies. Businesses count on communication, and communication counts on centurylink. The najarians have a double serving of is up first. What are you watching . Mel, looking at one of dorseys many companies, square. Of course last week mr. Cohens company put aggressive trade on here. And today we see some strong activity in the name. December calls though, not shortterm, theyre out there into the future, so somebodys buying december 14 calls. They also, mel, bought about 7,000 of the 13 calls in square as well today. So both of these pretty aggressive bets that square trades up through the old highs of the year and perhaps pushes whether its takeover or not, i cant say, its not usually that kind of long term bet that they make if they think the stocks going to go in the shortterm. An upgrade from stifel from a buy to a hold. Wonder if that unusual activity i bought this one myself, mel. All right. Pete, what are you watching . Im looking at chips. Weve been talking for a long time in this huge run weve seen in the chips, mel. Amd, not a name we talk about all the time, seems like micron, intel, qualcomm, but take a look, its been kind of a silent move. Thats a pretty dramatic move to the upside. Its really, really been incredible. Today somebodys rolling out, jon talked about going out into the future. How about january in amd. The january 9 calls somebody already is taking some profits. Theyre taking money off the table and rolling up into these january 9 calls. Real money when you consider 890,000 at 84 cents thats a big bet this stock is going somewhere north of 10 in the next couple months. I love the trade, the size of the trade, the money put down, Short Interest is very high by the way. All right. Thanks, guys. Nat gas continuing to hit highs, Jackie Deangelis now with the futures now traders. Good afternoon to you, melissa. Nat gas has rallied about 4 , brian, whats behind the move here . Well, i mean, you are seeing some indications of storms forming way off out in the atlantic, although not all that becoming a fruition that would enter the gulf of mexico. Certainly that is a possibility, but youve seen a lot of energy concepts, rbob, oil, all move up significantly in the month of august and nat gas seems to be following that demand is in the picture for energy. Whether we can get that and the dollar weakness continues well see about that when yellen gets her comments going. You know, im a little skeptic that this run continues to continue on its way up. Jeff kilburg, do you see three bucks in the cards . I do, jackie, very coil trade. Yeartodate 9 , quite docile trade, but look how volatile nat gas futures have been. 1. 66 was that dip low in february, but since june youre right legs above 2. 50. So right now we are focused on what yellen has to say, but i think you have to play this game of pingpong, trade the range. Be buyer at 2. 50, seller at 3 until something dramatic happens with the dollar. Gentlemen, see you at 1 00 p. M. On the online show where were talking all Things Energy including oil with rbcs helema croft. See you then, melissa. All females futures. Got to tune in for that. Just about three hours to the market close, weve got your final trades straight ahead. Halftime report is back right after this. Follow us on twitter and tell us what you think. We want to hear from yo you halftimereport. 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. [announcer] is it a force of nature . Or a sales event . The summer of audi sales event is here. Get up to a 5,000 bonus on select audi models. Want to take a check on oil and intraday is whats interesting. Had been down by as much as almost 2 at one point and then headline saying iran was sending some signals it could be up for some sort of joint action intervention in the oil market. We saw that turnaround. It is now higher by 1. 3 . We see nat gas names too. Jackie talking about the spike were seeing on the back of yesterdays big gains. Chesapeake higher by 7 right now. Pete, are you following chesapeake . I am following it in a negative way right now because i had some long calls here expired on friday and we suddenly get this move. Thats the negative side of the options world as well. All right. A lot happens in an hour here on Halftime Report. But a lot more happens during the commercial breaks. Were calling this segment, fast break. Its also a restructuring story, but they have a very big energy book, which is why the stock has gotten hit its lagged. I think if you think Energy Prices are recovering, like i do, this should recover. And they also have improving their capital returns, dividend payout ratio and one time tangible books. Likes xience. We dont own it, but i like what shes talking about. These are companies that are cheap, 2 , 3 dividend yields, trading below book. They dont get credit for all the stuff were talking about with consumer, with lending, and if you see rates stabilize or get some hint of improvement, this is the area you want to go to, especially when you get the shuffling of the sector. There were a number of stocks that were really colin frost, Texas City Bank shares, all were clobbered at the time when theres real concerns about the credit in energy. Yeah. Tcbi is one that clearly comes to mind. Ibkr is another one that you could look at thats had a significant improvement. I dont know necessarily if i would stay in those trades right now. Sure. Given where the price of oil is. I think its a take your profit. Lets take a quick check here on the Home Builders xhb on pace for its fourth straight positive day. Its best since early july. Toll brothers leading the sector along with lennar, d. R. Horton, and amazing new home Sales Numbers this morning. These stocks you got to love the move youre seeing today. I would much rather being in something thats supplying to the home depots of the world rather than the builders themselves. How do you stand on the Home Builders . They have been kind of pressured, mel, because when the slowdown happened basically in 2008 a lot of the municipalities started to dump more and more responsibility onto these guys. In other words, the roads and sewers and all the rest they were able to push off, thats all falling on these guys. That means their costs are much higher. All right. We got the markets closing about three hours time. We got to get to second half trades here. Know what these guys here are trading. Joe, kick it off. Cvs, fantastic Earnings Report on august 2nd. Trading around 97. I think the stock elevates above 100. Stephanie. Im looking at financials and watching the 10year yield and libor creeping up higher, so good thing we were talking about in terms of the banks, better for regionals. But i think Something Like a bank of america makes a lot of sense given the valuation and the cost discipline this story has. I want to see oil stabilize between 45 and 55. If you see that, you can see the market kind of continually go up. Doc. Well, square again, its good enough for stevie cohen, its good enough for me. Pete. We were talking about biotech, Something Like amgen. That does it for us. I will see you in moments when power lunch begins. It begins right now. Melissa, thank you very much. We will see you in just a second. Welcome everybody to power lunch. Im tyler mathisen. Here is what it is on the menu today. Shares of mylan under pressure as to why the maker of the lifesaver epipen drug jacked up prices close to 500 . And under fire, a new trove of emails raising questions about Hillary Clinton and the state departments potentially close ties to the clinton foundation. And this labor day could be the deadliest in years on the highways, the reasons why in a special report from our phil lebeau. Power lunch starts right now