45 days. Have we gone too far too fast. We would agree. Currently it trades around 20 times ebitda and linkedin was originally approached to be taken out around 17 time answer ultimately got taken out at 21 times. Once something is broken, the bankers and the companies will look at 30, 60, 9day moving day averages before the news was broken. And if you look at those averages and put a 40 premium on that youd get to 25, 26 taken out. Thats 3 to 7 upside but the risk that you alluded to at the beginning. Show if something came out that a process was busted, was never occurring in the first place drop down to below 18, a 25 drop so we dont like the risk reward setup. Sure feels like were walking toward a deal but youre not convinced its going to happen. Yeah, were unclear is a deal is about to happen but more of what were trying to quantify is what is the risk reward for investors and whats the upside. The other thing we pointed out in a note yesterday, whats the boards responsibility. So if it has been an informal reach out on a companys part and there is interest, does it owe it to shareholders actually have more of a formal process and more Companies Look at the asset and maximize responsibility. You expect them to make a deal in calendar aelephant 16. Well, when we met with management their point of view, you should have the ceo on board for at least a year and started full time september a year ago. A lot of challenges theyre doing in Fourth Quarter, nfl, live, even integrating double click. If those didnt come to fruition at that point they would maximize responsibility by having a process but see the results of those efforts first. Citi says no deal could mean it goes back to lows of may, ho decrease from where we are now. How low do you think it goes if this doesnt go anywhere . Yeah, we think it could break below 18 where it started before this happened and our target obviously is 18 for the end of the year. But you could have a as far as risk reward the risk to the downside is songer than poe emption upside. Well, lastly, we know from fabers reporting that the real people are looking at this business and looking seriously. Do you expect a deal to happen undoubtedly between now and the lets say the middle of 2017 . Well, it really depends on how their efforts come out in the Fourth Quarter. If nfl resonates, live resonates and maus uptick back up i dont think management wants to sell and the board is supportive of management particularly if showing progress here so to us, it would be more predicated on how it turns out. Look, respectfully, bob, though, hasnt that changed . I mean, isnt it more clear than ever now based on the reporting thats been out there in fact theyre resigned and maybe thats the best word, resigned they have to sell, they may not want to but resigned to the fact they have to and theyre going to do a deal with somebody whether its disney or microsoft or sales force or whoever else has been thrown into the pot. We agree they need to maximize the shareholder value and if there is interest out there, thats why in our note yesterday we said the question is now the board responsibilities, if there is Significant Interest do they need to acknowledge that and then also then reach out to other pears that may be interested in a formal process was instituted. Who makes the most sense if someone does buy twitter. You know, theres a lot of players we went through in a note, 30 different players or so, we think there could be a takeout but may be at a lower price. The ones people most point to are google, microsoft, sal salesforce. Com and verizons and at ts of the word but disney is difficult. Theres a lot of not safe for work content on twitter. I dont know if disney would want that brand association. You say lower, lower than where were trading today . Yeah, it could be a process. Cow have a deal thats actually offered lower than where you start today and then i think youd start more of a formal active process. Yeah, interesting. Bob, i know you jumped out of a meeting to give us a call. We appreciate it. Talk to you soon. Thanks so much. Suntrust bob peck. Twitter on the move falling off its best levels of the session. Joe. I think if their deal would be close youd see things happening to the boards and i think thats whats important. Why wouldnt jack dorsey step off the board of disney . On the board of disney and sitting in a room discussing with disney what they should do with twitter and needs to step off that board. Sheryl sandberg sits on the board of disney, look at seasforce, look at alphabet. Alphabets youtube ceo sits on the board. Were close to a deal. Thats what you have to look. Reshuffle the boards to align with fiduciary responsibilities. We havent seen it yet. What do you do if youre an owner of twitter shares at 12. 05. If youre a realist, ill tell you what to do and told josh brown yesterday. What you do you sell either the 22 or 23 calls, now, josh said not enough, i deserve more. I dont think youll get any more, josh. And everybody else out there peck said you might not get this much. I think you will get like ive said, judge, low to mid20s so to me that says 22 to 24 is the sweet spot. Thats why im short 22 calls and 23 calls against my longs and im short all the way out in january. Got more premium. Bought me 4 worth of Downside Protection by selling those. Thats why i did it. I think the stock gets taken basically right about here. If i own the stock today, pete, is my best move to sell it right here. Yes. Youre at 20 just where are we at, 23. 63. And its made an absolutely incredible move and all based on nothing to do with the fundamentals of the company but based upon all the rumors were hearing about each and every day. The smart trade is what john is talking about, ive done the same thing, been in this hundreds of different types and recently its been all about call spreads. This is why it makes so much sense. For this risk reward go out to january. Somebody bought the january 20s against the 29s. It cost them very little. The potential gain there, if it goes anywhere close to 29, if it goes above there you have capped yourself out. 9 bucks is the most you can make, thats it but do we foresee that coming somewhere above 30 . I dont think so but somewhere in the middle 20s, higher than john on this. I think 25, 26, 27, those numbers would maybe make sense. If as many people are as interested as were hearing about all being reported, there might be a little bit of a bidding war scott and some competition to maybe its closer to 25, 26. We asked before, steph, whether the price move that it enjoyed since the reporting first started complicates the matter. Twitter was at, what, 14, then 18 and now its nearly at 24. To pete he point peck says you might not get that much. The stock is falling off its best levels. The fair question whether youre an owner do you sell it. I would because the rally as speed said is fundamental. Lack of fundamentals rather. This company has had a really big problem monetizing what they have. We dont know what their strategy is and seems like a hodge pomg but there is potential there. I truly believe that but i think it would make more sense to be part of a Larger Company with bigger pockets with bigger scale. I think of all the names, google, alphabet makes the best sense, quite frankly id rather them spend money on Something Like twitter and try to figure that out than the selfdrives car or the fiber or any of the other initiatives of this that that company is doing. And i think theyve got plenty of cash to do it so i think twitter makes sense as a part of a larger entity. I do not think salesforce. Com makes sense. I dont think disney makes sense. We tossed around a couple of names in that fang group, that name you all know so well and follow. Its sort of a forgotten run, the stocks have had a great move, lets talk about these stocks. Over three months look what theyve done. All outpaced the broader market, netflix is the worst performer yet over three months up 13 . Youre asking these things back. Youre asking the right question sitting at the end of q3 and have to sit and take a look and say, what do i want to do going into q4. Looking back upon q3 this has been a risk on environment. Technology is up 9 . Utilities down over 3 . Consumer staples down over 3 . You look at small caps, up strongly. It has been a risk on type environment. Do you want to extend that foo q4 in a lot of your holdings. Me personally ill hold on to my names like facebook and adobe but take a look at some of the super staple napes that have fallen back here like a dr. Pepper, snapple and try and use that as an opportunity to maybe diversify and get a little bit more defensive in q4. Pete, here we are talking every day about whether volatility will return as a result of the election or some of the turmoil in the european Banking System and maybe its going to hit our market over here. Yet these stocks have had a great run. These stocks. If the market pulls back as a whole arent these among the first to go down too. I would think maybe not. No, i would agree. I would think if we start to see a downturn i do think some of these would be under serious pressure but havent seen the call that everybody seems to be making whether its delivery alpha or whatever, where theyre talking about pretty significant pullback why havent seen that. Maybe we will. I tell you what the interesting thing to me is one name thats thought and i know its not a fang stock but not on that list if you look at performancewise, how about baba. We all talk about facebook, you know, we focus on that, alphabet, baba has been that name thats continuing to plod a little higher, a little higher. Not far off the high, just under 110. When you look at names like this there are risky spots out there where people are willing to go and not always just on the multiple but talking about where they are in terms of technology. Technology has been where you want to be. The chips, another area very, very strong so you want to be in the fundamental enindividual yon and micron up 2 . I go with bidu. Pete hit baba. I hit bidu. Up 21 in the last month and a half. Bidu is seeing the same sort of run that amazon is seeing and thats somewhat related, of course, but id say watch that as well. Steph, you own amazon. Right . Still . Yep. Stocks up 17 . Year to date 20 . Stay with it. Yeah, i think that theres still some juice left. Sort of a question. More of a statement. Its not the cheapest of the four and ill give you that but you could do a sum of the parts analysis and get to Something Like 900. Maybe north of that. Alltime high. There are some aggressive target, 1,000 plus. The story is really them getting penetration with prime. Because people that are prime members, they spend more. Something like 80 more than nonprime members so if they can grow it here in the u. S. Which theyve been doing nicely but also internationally, that is a nice tailwind for the company. We have the cloud story too but i would say this overall about fang. Fang in a 2 gdp world when theyre going 20 , 30 , 40 , even if that growth is slowing which is a concern for facebook and google, i think you can still own them and if they were to pull back i think you want to absolutely own these. I think you want to barbell and tech and want growth and value. I was going to go back to the question whether the market pulls back do these pull back . These have doubled the output of the s p in three months. Yeah, doubled the output of the s p and theres no sector that even comes close to it financials are the second leading sector up 3 . It hasnt exactly felt like a risk on yahoo environment. And it has been. Small caps and emerging markets stocks are up close to 10 in the quarter so its been a very Strong Quarter and to what pete was saying before, think about the market just today. The price of oil, where it sits but yet the market is higher once again today. Oil was so important to the equation of where the s p goes in 2016 for the quarter thats down 3 but yet the market is rallied. Going back to technology we talked about it profitbrexit and talked about the emphasis on the positive turn you saw in the chip stocks. That was the leading indicator and to stefanies point, they have the growth and balance sheets, they can make the acquisitions and certainly have the cash to repatriot home. Up, take a look at tap, this one is flying. Its up, what, 3. 25 . Going back to what you said, these are focus stocks for some group and its under heavy accumulation today. Good stuff, guys. To Morgan Brennan now for a quick market flash. Hey, morgan. Shares of Avis Budget Group is falling with hertz global. Avis made comments about weak demand in europe, not because of brexit but security concerns and appears hertz is falling in sympathy. Cnbc put out a call to them. Hertz is down nearly 6 and avis down 7 1 2 almost. A big call and a major player in the health care space. This is a sector many believe will be in play after the election. Get in now or stay away . The call of the day is next. Were hunting for yield in some unusual places. Is the risk going to be worth the reward. And swoosh. A big day for nike. Well get you ahead of the trade. In is the Halftime Report with scott wapner only on cnbc. Hiim here to tell homeowners that are sixtytwo and older about a great way to live a better retirement. Its called a reverse mortgage. Call right now to receive your free dvd and booklet with no obligation. It answers questions like. How a reverse mortgage works, how much you qualify for, the ways to receive your money. And more. Plus, when you call now, youll get this magnifier with led light absolutely free when you call the experts at one reverse mortgage today, youll learn the benefits of a governmentinsured reverse mortgage. It will eliminate your monthly mortgage payments and give you taxfree cash from the equity in your home and heres the best part. You still own your home. Take control of your retirement today we are back and look whos joined us. Cramer. I cant stay away. I missed you yesterday. You heard our conversation on the fang. Yes. I just think and came over. I love that i talk about that on mad dash and want to talk about it on mad money. Its one of these discussions that has to be had theyre back. Yes they are and what i think interesting and talk to stephanie, amazon, the valuation is on what we should be thinking about now because were almost into october. The valuations on 2018 are not bad and i know that people at home are thinking who the heck thinks about 2018 and the answer is the big immigrant money managers. Thats what you think about because you cant base it on next year but think further. It is tech and so i was surprised to hear the piece this morning, the jpmorgan piece, it was a little funny because it also did ali ally ba i walked right in. Glad you did. Pete was talking about pete was talking about baba. I love the guy. Look at him. Bab is not expensive. 18. And i hit him with everything i had. I really d i rush i mean i got in there eight times. I thought id do three fumbles and still put points on the board. The guy was unstoppable. Honestly he looked very vikings like. Talking about delivering alpha. Dangerous alpha. You call it looked like for the vikings three sacks. He was looking for the problem with sy, he is so smooth you start thinking that, you know, am i being sold . But the fact is is that i like the play on china. I think china is doing better than most people. I know that is strictly v verboten. Im hearing very good things, auto sales were on fire in the month of yes. Yes. Let me ask you this, on back on the fang, three months, remember its fa because they changed the darn name and wrecked everything. A note to follow higher stock price. Facebook up 17. 5 three month, amazon at an alltime high up 17 . Netflix up 13 1 2. Google is up 19. You stay with those i think amazon i will keep thinking about what bill mueller said at dangerous alpha where he said it is not dangerous at all. It really is going to double and then i look at do you know that alphabet has not been expensive for a year now and moonshot. Its not moonshot. Its on i95 now. Netflix, i have a problem with. Thats why i went with fa, alibaba. Youre putting baba in there. Which one would you buy today . I know youre holding. Which one would you buy . I would still by alphabet right here. I would still you know why, i keep thinking its going to come in. As i spend a fortune, as my wife my wife is now, were getting the tide button. Tie im so prime. Im so prime. Im mr. Prime. All the buttons. The other day, it was raining and i said, why do we have one darned umbrella. 12 umbrellas the next day. I never my little guy was a toy. Next thing i got 8,000 rolls of paper towels. And you can use every one of them. Never have to go out again. Its fantastic. We were going to do lilly on the call of the day which i still want to do. I want to ask the same question i asked these guys before you came here. Back to twitter, what if a deal doesnt happen . The stock has had an incredible run based on the reporting by faber and others. Look, i know that citi came out with citi has i love bob peck. He says 18. These things take to tend a life of their own. Look, we had always talked about twitter is worth more its worth more to mark than the market. If you can offer 360. Procter wants to know what do people think combine einstein artificial intelligence, people who follow so and so who like the vikings often buy gillette. Who doesnt want that info . Steph doesnt like the sales force thing. No. I dont. The fit, you mean. I i think conceptually it makes sense. The price they would have to pay, it would be transformational. Almost the same size. It would be a big, big deal. Its a huge deal. Synergistic it is at the very onset. This would probably be like a fiveyear Strategic Vision and thats fine, but it makes me nervous that theyre bidding up for linkedin. In there and now looking at twitter and let us see what he has to say. Money burring a whole in his pocket looking to spend it. Either hes looking to spend his money or core business is slowing and in that case you dont want to be there either. Least hear what he says. I die think einstein melded with this is interesting. Very expensive. Almost as if its a trophy property. Its a franchise, its a las vegas franchise in the nfl and people are willing to overpay for it because they dont create a lot of hem. Jim, you said yesterday if you get rid of some of the haters, if it was cure rated better twitter would be more attractive to the masses because instead of just being a bunch of haters it would be trolls . For that reason disney may not want it. So into its bambi. Like thumper, like shooting his mom. Hey, boom. Like hey, get bambis mom. You need to via human being at it and all bambi mom all the people that want bambis mom where she ended up arent allowed on twitter. Lets say you got in around 15 or even at 18, havent you been given a gift . Havent you been given at 23, yeah, you know, dont be greedy. Youre really not banking on a greater fool theory. I dont want that but there are a lot of fools out there. Even if you could get a deal even peck suggests maybe its lower than where the stock is trading now. I thought 24. Let it come down to 18. Someone bid s 24. If they had a human cure rating. Lets have some concierge service. Well give it to you. Its not for me. Its like you dont want to have people feel like, i mean people are saying stuff about me today that was so vile and i said i wanted a free debate. Who do you want to elect, trump. Why do you hate hillary. I want to apologize. That was me a few times. Was that you . Just saying. You know, tell you what sells, i have a picture on the subway. No one will give me a seat. Im too old to be able to stand so tired not because of the game but i had i was going against Mark Ingraham and it was 120 to fantasy. Too old to get a seat. Very tired. But no one stood up for me. Not giving you a seat. So there you go, okay. Trolls on the subway. Im glad i dropped by. Do you have any energy left to talk about lilly in our call today . You dont need what was great you dont need them to solve alzheimers. Goldman says its a buy during a period of axccelerated growth. Cheap stock. Ive been fooled because i kept thinking alzheimers very hard to solve. This gave you enough weapons to think you dont need to. I also thought the gilead downgrade was vicious, 15jarrett taunt. You know. Well, theyve got to do something and i think theyre angry at them. They havent made a move. Yes. Thats what angered them. They look at the pipeline and are concerned. Right, but they bought they made smart moves but the antigilead prolilly crowd is interesting. Interesting for lilly, nice. Lilly is underperformed bristol has been the one. Look, i lilly is down 5 when you have Johnson Johnson up 15 , a huge difference and theyve got a really good pipeline. Join in the party . Jim said yes today. This is a thinking show. Im just sitting taking this all in. If youre sitting there it is. As an institutional money manager what jim outlined is the fact that technology is clearly the new economy. By the way, neither candidate spoke about technology. Is that not unbelievable . Thats the economy. And if you think about all these companies that were all talking about, chip stocks, facebook, all these salesforce, they have the cash, if they cant grow organically they could go buy it. What other sector can you find those type of dynamics . Thats why its so attractive and from a valuation standpoint its very attractive. But theyre getting less attractive and no, theyre not. Yes they are, 100 . This was so attractive when you look back at brexit, you dont want to touch it, im afraid. You need to buy. You look for the tunes in the market. Do you think a lot have been nowhere else to put their money. Great tweet about how it does create job. You should have liked it after brexit and should have wanted to buy the chip. Should have, would have, could have. And i did. Pete, i did. Took the summer off from trading, the right thing to do. Looking as an institutional money manager you gbetter have them in your portfolio in 2017. Thats aid trading amazon, amazon, stretch. Do you think facebook do you think the media issue is a big ash. When i look at facebook i think international. I think 151. 60. I think a core holding. A core holding in the portfolio. Im not thinking about going to 135. Thats a different strategiment which is fine. Thats a trading strategy. Totally different. Okay. Fangs are disrupters. They are. So you could pay a lot of money for them and you dont have to. Netflix, being disrupted . Being disrupted. Thats the one im saying going fa. I would agree. I do and now the eagles on a bye this week watching the vikings and giants. Monday night game. It will be difficult i cant play my eagles defense. I may call on you during the break. Running your hedge fund, technology, exposure. Fa, fa, fa, because its got a long, long way to run. Found the picture of you on the train by the way. What . We have it. Picture on the train. [ laughter ] no one is giving him a seat. Im wearing the poseidon warrior hat, my buddy tom mcgraff. He took it out to the breeders cup. Its still rounding the third turn. You guys are fabulous. You guys are im sorry i just i was in a disruptive mood. Disrupt you can come by any time. What do you have been tonight . I got heres a company that every one of us should get involved with. Thor, motor homes. We should get a motor coach and all go to grand canyon and stay at different parks. This is what people do. Pie wife said i have no problem driving that. Multiple hed be right there with you. Oh, yeah. Thats where he made his money. Motor homes. Thats right. Thor is really good. Not winnebago. Airstream. They own that too. You could get those all tricked out. How come no one in my ear is staying have a, you got to go to a commercial like yesterday. What happened today . Oh, im better today. I know i was try to going statesman. What is a statesman. Samsung, they have two different standards in china theyre telling you not to worry. You know, thats not going to fly. Theres a lot of people in china. I was looking to see what else we have coming up. See if, you know some people i have to use my app watch. I mean i got to tell you the samsung thing theyre get ago way wit. The analysts hate all these faux buys on apple. Not faux, faux, faux like moses malone but faux buys on apple and all think samsung will get away with it. Press it, no, samsung is not an issue. Thats who you switch to. They switch but when you get on the plane and please like dont set the plane on fire, i still regard that as a suboptimal situation. Can apple and fang go together. With oil going down. Wow. But you cut me to the quick. The rates are why couldnt they . An interesting question, right . Why couldnt they . There sometimes to be its like nvidia and nxpi. Why do people say one cant move up without the other. If you look at the weekly numbers on oil it just gave up the gain that it had but al jeer ya says nigerians talked to the saudi and indicating iran is all in. Isnt that how ridiculous thats been because the rugs were seen talking to the nigerians about what iraq will do and u. S. Is pulling back except for were expanding. Did you say opec has no credibility. I think the reporters who cover opec have no credibility because they keep buying this nonsense. I got to get out of here because i got i save a little something. Everybody hates me. People in the subway, give up their seat. They could give up their seat for me. Were just go everywhere. Jim, before you leave thanks for coming by. Higher. 67 today. Power airb. Nb and uber. How do you speak to the driver. And dont forget acacia what are you looking at. At the tweet deck. Trying to figure out i thought you were trying to figure out the line next week. Forget it. You won your game and thats it. Youre back to my buddy dan snyder back on the sideline. Well win another one too. Come by any time. I might just drop by later. Thank you, guys. Im sorry. I took the ball. Like shawn during the old days. Remember in the huddle. Me, me, im open. Me, me, im open. Me, me, me, its like a little gift. Its a gift, me, me, im open. I thought that was keyshawn, give me the damn ball. Wasnt that the name of the book. When i met deshawns mother she said i follow you on twitter. He is a cal guy. Thank you, man. Thank you. Thank you. Any time. Steph, najarians, sorry. Theres the market. Dow, s p, at the highs of the day. Its the cramer buffer. Did last nights debate clarify things for the markets . Oh, you want to stick around for another all right, before the break take a look at s p sectors right now. And were back right after this. 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. Now that fedex has helped us we could focus on bigger issues, like our passive aggressive environment. Were not passive aggressive. Hey, hey, hey, there are no bad suggestions here. No matter how lame they are. Well said, ann. Ive always admired how you just say whats in your head, without thinking. Very brave. Good point ted. Youre living proof that looks arent everything. Thank you. Welcome. So, fedex helped simplify our ecommerce business and this is not a passive aggressive environment. I just wanted to say, you guys are doing a great job. Whats that supposed to mean . Fedex. Helping Small Business simplify ecommerce. It begins from the the second were born. Er. Because, healthier doesnt happen all by itself. It needs to be earned every day. Using wellness to keep away illness. And believing a single life can be made better by millions of others. As a Health Services and Innovation Company optum powers modern healthcare by connecting every part of it. So while the world keeps searching for healthier were here to make healthier happen. Hi, im sue herera. Fbi director james comey on capitol hill along with Homeland Security chief jeh johnson testifying before a senate Homeland Security committee. Comey says Law Enforcement and intelligence agencies remain extremely concerned that militants will eventually flow out of syria and iraq to commit terror attacks. There will be a terrorist diaspora sometime in the next two to five years like weve never seen before. We must prepare ourselves and our allies especially in western europe to confront that threat. star witness David Wildstein testifying that new Jersey Governor Chris Christie did know about the lane closures at the George Washington bridge as they happened three years ago. He said he, christie, and defendant bill baroni talked about it at a september 11th, 2013 ceremony at the world trade center. Players from the new Orleans Saints and Atlanta Falcons joined hands after monday nights national anthem. Both sides felt the sign of unity was a great way for players to show support against injustice in america. You are up to date. Thats the news update this hour. Now over to michelle carusocabrera. It starts in 20 minutes. Big, fat ugly bubble. Donald trumps big warning about the u. S. Economy. Is he right . Twitter takeover talks. Why one big media says it could backfire in a big way and power lunch exclusive, the head of Goldman Sachs with his new call on oil and gold. Halftime report back after this. Power lunch at the top of the hour. Dont miss it. Real money. I mean all being equal we love increased to the vilt because were fundamental guy. Real debates. I would advocate raises rates. I dont think it does most damage. The most profitable hour. I got to tweet about this show. The Halftime Report weekdays at noon eastern. The Gold Standard. You called it the Gold Standard of trade deals. You said its the finest deal youve ever seen then you heard what i said about it and all of a sudden you were against it. Well, donald, i know you live in your own reality but that is not the facts. The facts are i did say i hoped it would be a good deal but when it was negotiated which i was not responsible for, i concluded wasnt. Okay, round one in the books, round two sunday october 9th. November uncertainty is a concern for the markets. Lets bring in lisa shallot, Morgan StanleyWealth Managements head of development and portfolio strategies. Nice to have you here. Thanks for coming to the set for us today. Are we in for an october surprise as a result of volatility coming back in a big way . Look, i think markets definitely can take a breather here. I think five to 10 correction is health and hygiene is the way we think of it. Thats within the context of us believing that markets are really going to power through and get a lot closer to 2300 by the end of the year if whats the catalyst to push the market down 5 to 10 . Look, i think weve had a buildup of uncertainty, certainly some of the Political Developments were seeing, but i think its going to be a question of what is a also going in europe. If you look at markets today, not seeing a bick risk premium around volatility and potential pickup in volatility. A good point. We discussed this the last tum of days about not only the election but real concerns about the health of the european Banking System and whether people here are too complacent about it. You watch Deutsche Bank sink nearly by the day and it starts to bring back bad memories of 2008. Yeah, no, i think thats absolutely true. The place that we see the most complacency is the bond market. I mean, the fact that were seeing the 30year back down here at, you know, close to 2. 25 is shocking to us. Our view is that, you know, this is a bond market thats not even discounting the current measures of inflation that are truly there. Forget about the feds 2 target. On many measures were there. And, you know, long bopds are not discounting any inflation and weve seen a retrace jt of that steepening of the curve and we think well see more volatility. If you think u. S. Stocks are likely to pull back you raise concerns about whats happening in the bond market. What do you do . Where do you put your money to work today. Look, our clients are longtime buy and hold clients. Well buy the dip. Right now, the best places that were fining that dip is quite frankly around emerging markets. We recently upgraded emerging markets. We think the fundamentals, if you are we talking equities or credit. Both. Quite frankly we like both. If you think about it youve got a stabilizing u. S. Dollar. You have stabilizing china and stabilizing Commodity Prices and for many emerging marketing youve got room to cut on rates so thats good for debt, good for cost to capital. Good for stocks so we like them both. Steph. When do you think earnings here in the states inflect from lower oil or stabilizing oil prices and a lower dollar. Is that third quarter, Fourth Quarter or not until next year. I think well start sighing it in the third quarter, in fact. As you know, you know, in the Fourth Quarter of 2014 s p profits peaked. Down 11 and a ha 11. 5 and we th see an improvement then as he going to come from the cyclical part of the economy so the energy, the tech, the industrials, material, some of the stuff that we would suggest is the new leadership of the market. Certainly, you know, staples and telcos have been that defensive lead but we think underneath the surface youre getting that shift in leadership. The credit markets generally do a good job of telegraphing where the overall market is going. I find it interesting you have high yield at an overweight and Investment Grade at an underweight. Could you explain that implication on the equities narc. No, fantastic question and its really about, you know, the how much we think rates are actually really going to go up and how much coverage you have. All right, so spreads are an Investment Grade have come down a lot and so the question is, from a total return perspective which our clients care a lot about, you know, can those returns, can those spreads absorb maybe a 25, 50basis point move in rates. Youre getting close. In high yield you still have that coverage so preserving your total return. So we like high yields here and our view even if we muddle along a muddle along scenario of 2 , gdp growth for another two years is going to be great for high yields. You can sit and clip it. Fit moves this year or no. We do think the fed moves, you know, Morgan Stanleys chief u. S. Economist has been particularly bearish. You know, she said no hikes at all this year, so i want to note her point of view. On the Wealth Management side of Morgan Stanley were more bullish and think that janet yellen definitely goes in december. You know, theyre itching and you know these guys seem to be telegraphing an internal debate that doesnt seem to be based on data. It just seems to be based on telegraphing, we want to go. Theyre going to go. We shall see. Lisa, good to see you. Lisa shalett. Unusual activity ennespano. Pete najarian explains next. The stakes are so high, your finances, 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. Whats that . The number of units well make next month to maximize earnings. Thats a projection. No, its a fact. Based on hundreds of proprietary and open data sets folded into a realtime, actionable analytics model. Nine. Eight. Three. Five. Two. Youre not gonna round that up . You dont round up facts. Powerful analytics driving decisions for the worlds most valuable brands. Hewlett packard enterprise. Welcome back to the Halftime Report. Im Jackie Deangelis watching crude oil down more than 3 today. Scott, doesnt seem like were hearing much out of algeria. Is that whats killing crude today. It is. The Saudi Oil Minister said saudi arabia will ago along with the opec consensus. I didnt know there was one. They said the saudis and iranians are about 600,000 barrels a day apart when it comes to reaching some sort of agreement and so we now know that oil is going to rebalance lower. Its rebalancing lower by a buck and a half today. Jeff, whats interesting to me is how closely were hugging 45, whether its plus or nine news a little bit. What are the levels youre watching at this point . Which direction do you expect us to go. I think we go lower short term, jackie. Youre right. Weve been tethered to 45 and have to realize this Production Cut they suggested 350 Million Barrels a year in reduction, thats about 30 annual reduction so thats never happened. Put saudi arabia and iran in the same room looking at a clock theyd find a way to argue about the time so i think scott is right. Theres going to be no news coming out this meeting. We see it go back to early august as well as 41. More more check out the online show at the top of the online show at the top of the hour. Talking to Stephen Suttmeier about what to expect in the next few weeks ahead. Scott . Jackie, thank you. It is time for a special spanish edition of some unusual options activity. Pete at the telestrator watching what today . Grupo televisio. You can see this big dramatic dip that the stock took a while back and now it is making a nice move to the upside. It is interesting to see the stock, the range over the last year, 23 to 31, trading around the 25s. And yet today somebody comes walking in and buys 3500 of the january 27 calls. Looking for upside, looking for a pop. But also buying some time. You look at this, paid a dollar, 3500 of them, decent amount of money put on the table for the stock to continue to the upside this is cable. This is mexico. This is starting to move. It is also something involved with the peso. There is a lot of different elements that are part of this trade now, scott. Im in it. Ill probably be in it for the next couple of months. Come on back to the desk. Next up is the nike trade. All right. Reporting earnings after the bell. Were back in two minutes. Welcome back to the Halftime Report. Nike reporting its quarterly numbers after the bell. John, you bought some calls today. Why . I did because they were aggressively buying calls yesterday. I told you about it, judge, double nickel, 55 calls. Today, buying 56 calls. Theyre also selling 5650 calls in the front in the ones that expire this week. So what does that mean . Theyre also trading a lot of puts. They think that nike more or less moves to the upside, perhaps not explodes to the upside. Interesting because over the last few days, pete, we have gotten some more cautious. I dont know if i want to say negative. I would say negative. Notes on where nike is going to go. Right. Not only today, but in the weeks and months ahead. And you gave us a topic of okay, which name do you like best . We looked at nike, under armour and a couple of other names but adidas was one of the names. Adidas continues to seem to be making progress in the competition level with nike. I think thats part of what theyre facing now. So it is no longer just the under armour fight. I think the adidas fight as well. And the other problem is the transition from being this Growth Company into a Value Company and yet you look where the valuation is, it is nothing like apple where you look at the valuation and it is nice. You look at this name, mid20s, go forward, it is about 20, so it is a little expensive. So the stock is probably fairly priced now. Is that why both of you guys on this side have a hold on it too . 25 times forward estimates as pete just mentioned, but youre talking about 6 revenue growth, north america futures are probably running about midsingle digits, upper single digits, lofty evaluation for what youre getting. I want to like this company a lot. It is a quality company, great brand, global brand. I think the competitive environment has certainly heightened not only from adidas, but puma as well. Do you buy somebody else instead . I sold lulu at 80 and im fine with getting out of athleisure all together. Getting out of athleisure altogether, so you buy the bubble talk . I buy the competition is rising for sure, absolutely. It is coming from all over the place, though. It is not just the big names we know. Like did you know that ralph lauren is now also going to get into the athleisure and all these smaller brands as well. I think on the margin it is hard to see that im sorry. Go ahead. We talked about finish line. Still like finish line better, but i like nike as a play and if youre somebody who is at home playing and waiting, i think you can wait until tomorrow morning to get into this one. Quick break. Come back, final trades are next. Upgrade your phone system and learn how you could save at vonage. Com business okay, so you launched your banks app. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial ServicesCompanies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. Were closing up shop in about three hours. Final trades. Jill, to you first. A thought on nike first and then adobe . I think tomorrow morning you can wake up and find they delivered a good earnings report. They need to define what the liquidation is from the sports authority. And i think to petes point, you need to understand how much market share theyre losing, 25 gain for adidas, 58 gain for under armour footwear. Okay, steph, a final trade . Im looking at the financials. Got hit hard on Deutsche Banks news yesterday. But the capital rules was better than expected by the weakness. Doc . I bought the nike calls. Well see tomorrow. Pete . Keep an eye on ko coke. It continues to go higher. We will. Good to see you. See you tomorrow. Markets getting a bump today. Power lunch begins now. Hey baby wont you look my way heres whats on the menu. Scot scoring the showdown, who really won last nights debate and how many millions tuned in to see the battle royale. Why the twitter Disney Partnership could back fire big time. And the 140 character rants are becoming the latest dogfight in the airline industry. Power lunch starts now. Im brian sullivan. Welcome, everybody. Your top story, cruditing