This now for at least a couple of weeks. How big of an issue is it . Its a big issue when we get into january, and we hear from corporations what the impact has been and what the impact Going Forward could be. Secondarily what will the chinese do as it relates to deappreciating their currency. Why do you have to wait until january . No, its not. No, its not an issue. You are not going to get the headlines from the companies who are going to cite the appreciating dollar. You dont make the moves now . You have to have the reality of it in the upcoming quarter. Right now you have to focus on a market that has clearly reversed the expectation that president elect trump coming in would be bad for stocks. Its about fiscal policy finally being put into place. Lastly, i just asked why is it that we are always looking for the exit sign when the market advances . Thats been the mentality over the last seven years. It hasnt worked. Whether the trump rally to the magnitude people have gotten it to is justified. Justified and rallying this much before mr. Trump even gets into office . With the anticipation of what is he going to be doing, yes. I think giving you a great opportunity to start looking at some of those. Whether that means its apple or some of the namsz, amazon, the fang stocks, if you will, those stocks have absolutely been taken out to the wood shed recently, and thats where i think if you are looking for opportunities, to joes point, if you think this market has any legs to the up side, i think those are the areas that have been beaten down. We were in the 19s before this. This is a pretty staggering move to the up side, and you would expect to see a pullback after a week like that. Kevin oleary. Merrill lynch says the yield dam has broken. Others are talking about bank of america also downgraded. Barron downgraded bank of america today. They say the book profits are in the banks. I agree. I actually think that one of the underperforming sectors for 2017 will be the banks from here. Let me explain why. Lets go out and look at that tenyear. Yes, had a big move. 2. 26. Whatever it is right now. Lets give it all the way to three. We end up at three. Thats still miserable for the banks. If you have bank profits because of the massive deregulation, which will be more to replace. Dont get so happy. I think you take your profits out of this. Im going to call it a bit of a head fake in financials. This will be the sixth time people have said please make it stick. Please stay up this time. Please grow from here. Guess what, theyre going to break your heart one more time with feeling. This time seems to be different, though, right . Rates are going up. Theyre expected to go up more. At least dodd frank could be changed just a bit to help out the banks. But its always different this time. Until its not. Because i argue that dodd frank change, that is not on the first 1 00 day agenda. Remember, were going to repeal obama care first and then clean up the tax act. Thats his hands full for 2017. If you are telling dodd frank inside the tax package, i dont think so. Youre going to have a lot of push and pull within congress on that one. This is something people are still scared of deregulating banks. I think were way too optimistic. Hey, listen, thats the way im playing it. Im taking my prochts on financials, and im banking on another sector which i think has been beaten up even more. Some of the preceps of that. You actually get to that. It might be six months. Might be a year. Might be a rollback and benefits those guys as far as regulation. Is it the same true about obama care . Youre absolutely right. Meanwhile, im picking up north of 3 dividend waiting for these wonderful things to happen. You cant say that about any of the financials or at least the bulk of them because you have the risk of a turndown on your valuation. Youve had a 16 move in some of these regional banks. They could break your heart by losing 5 , 6 next week. I think theres too much volatility. Give me the diversification of medical supplies, of biotech, pharma instead of just one thin needle of Financial Center banks. Thats my argument. Who is taking the other side . He is wrong. The regions are going to pull back. Rsi has exploded to 77. Thats way over bought. There will probably be a pullback, but this is a historic breakout out of a tenyear range on the kre. These names are going higher for reasons that are not limited to the fact that ten year rates are higher. Thats where the bulk of those books are keyed off of in ermz it of the loans. When you look at full employment and lending come back, all of these play back into the hands of of the regionals. I would welcome a pullback in these names as an opportunity to reload or to get involved if i missed them. The breakout is for real. Its convincing. The volume is tremendous. I think its got legs. Its not just about, oh, President Trump or, oh, the twoyear note is now yielding over 1 . Theres a lot more happening here. Kevin. I want you to save that tape. Im going to make him eat those words. Its coming to like you did with long facebook or long apple . Well play all the tapes together on a loop. I think you and i will probably have a tie. Absolutely, but my point is dont get sucked into this financial move just yet. Move made 16 in a week. Take some profits. Put them in the bank and diversify. I dont think this is a secular move yet. Its going to break your heart when he finally gets in and says, look, we cant completely wipe out dodd frank. Its going to take us two years. I have other things on my plate i have to work on first. Kev, the regionals are not as affected by dodd frank as the Money Centers and investment banks. You agree with that, right . I do, but even if we get to 3 on the tenyear, thats not enough meat on the bone for these guys to actually get to play ball because the regionals are lending to businesses, and they still have massive Capital Requirements. They got to keep tons of cash on the books. You have a repeal those laws yet. You have lousy spreads, and they have crazy Capital Requirements. They have too much cash where, there hasnt been enough demand on the lending thats been the problem. They already have the cash. The issue is nowhere to put it where theres a rate of return. That could change if the economy stays where it is, and you get some juice. It happens. Im just telling you for all of this excitement about trump, lets admit one thing. This im not excited about trump. This happened real fast. By the way, did i not call it on the wine index out of philadelphia . Those guys in philadelphia told us trump was going to win. Remember that one . You did. What about the overall rally . I mean, kevin makes a point. You are getting too optimistic about the banks . Are we getting too optimistic overall . Some suggest not. How about the fact that we already is this going to go up in per pet out . It wasnt just a trump rally. We were moving before that because the earnings that we had gotten, scott, were phenomenal. There was some great earnings. Oh, by the way, kevin, you were talking about yields. You look at jp morgan. You are getting 2. 5 . You talked about 3 elsewhere. You are getting yield. Youve got all you have to do is all of a sudden start seeing that yield curve, and all of a sudden we all are starting to hear more and more whether its rosengrin or whom ever talking about december. Now theyre talking about 90 the fact that theyre starting to raise that. Theres a lot of reason the banks have room to run. The rally has room to run or not. Hold on. Heres what gary cohn of Goldman Sachs heres what gary cohn of Goldman Sachs told us yesterday. The question to me is how strong can the dollar be inle that starts having unintended consequences in the u. S. Economy . We have to be careful that we modulate the value of the value, and that we can continue to grow jobs in the United States. Okay. Yes, sir. Mr. Dollar. Yes. I answered that. January. The time is not now to worry about it. The time right now is the same nar joe that we had in august. The banks began to rally in august. September, everyone said the same thing. Theyre going to pull back. The story is over. What is different now . I dont understand why ken support excited about this. Kevin is going to see a loosening as josh cited of all the liquidity thats been trapped on bank balance sheets. Youre also going to see a surge, kevin, increased dividends. I know thats something you get excited about. Were talking about the banks. Im trying to talk about the rally. Because the banks im talking about the rising dollar. The banks itself are the story. The rally itself in the marketplace is not so much the story as it is right now. The fixation that institutional managers have on banks. Thats the opportunity right now, and thats the opportunity Going Forward. If you want to talk about the market again, well just become closet indexers, and well just take an index fund and trade the index fund. I dont want to do that right now. Banks are the only trade then for you. Right now banks are the trade. The trade. Not the only trade. Weve we havent had earnings increases on the banks. Weve had p. E. Expansion. Thats all weve got so far. All of this excitement is about the fact that earnings will be subsequently quarter after quarter in 2017 getting better. If we get deregulation, a loosening of Capital Requirements so all of a sudden those regionals we talked about are going to be freer to make money wherever theyre going to lend it. All of this is pe expansion. Kevin, why has the russell gone up 10 , far exceeded Everything Else in the last ten days . Ill tell you why. Because all of those small businesses, all of those shark tanky deals, all of those small guys that had have been buried in regulation in every sector did. Strengthening dollar does nothing to hurt them. And, kevin, the reason that its gone up 10 in the last fwo weeks is because financials have 27 weighting in the russell index. That identifies for you how underinvested institutional Money Managers are right now. Theyre racing. Theyre scrambling. The next highest weighting is 15 . Thats why the rally is occurring right now. Thats your evidence why this is really the turn back. I dont agree. Theres an optimism coming into the market, and the other 70 of the russell 2000 that feels that all of those companies that have been held back by an overregulated environment and overregulated market and just those animal juices that were all talking about, that wonderful feeling of optimism that President Trump has brought back into this market, even though people thought it wouldnt happen, thats why you are getting that action on the 2000. I think the russell 2000 is going to outperform the s p next year, because its going to unleash small business, which has been waiting for for years. I agree with kevin 100 on that. He is absolutely right. The russell is breaking out right now, and i think when you look forward over the next couple of years, i think it outperforms the other major s k indexes. Judge, when you look at what you asked at the top of the show, other than saying lets drill down into one sector, i know kevin likes health care a lot more than financials. I do think financials could see a bit of a pullback here. I wouldnt liquidate out of all of them, and certainly for our clients were not, but, judge, weve moved 1. 5 since november 8th, election day, says through right now. 2,174 for the s p. It was 2,140 when we closed, and we all know weve made that vshaped after hours weird move. Well, its a 1. 5 move to the up side. The market itself as far as the rally doesnt mean its over. As far as over extending at some point 16 move, that is a lot. We ask whether at some point rising rates and the rising dollar kill the rally. Well, right now, right now, tech is in the middle of a twoday bounce. You are seeing the eem find support of the rising 200 a bounce because it got obliterated over the prior however many days in a row. I dont know about obliterated. Its down. Bank stocks got obliterated. True. True. The in a case, the big names, cisco is going to report tonight. Theyre having a little bit of a bounce. The eem is finding support at the rising 200 day. Thats very important if you want to be conduct constructive on risk assets. You cant have a freefall in e. M. Again. That precipitated the flat market here in the u. S. It was just that risk off sentiment from elsewhere that we experienced for two years. I think if you can get some constructive action in areas away from, you know, whats been working the cyclical trade, i think that you have got the grounds to say we have a leg higher into yearend. Im looking at the Technology Stocks that were talking about here, and if whether you want to have the fang stocks, how about even just looking at just broadly. Look at microsoft. Look at some of the names that were taken out. A couple of dollars down, scott. Unjustified i thought. So i think there are opportunities in the market. We look every single day for opportunities. You look at what was being sold off. Is facebook really 114 stock this morning and suddenly its 117 now . There are opportunities in the marketplace each and every day. Do you buy the fang stocks back . Yeah. I told you, i sold puts in facebook right there as it broke through 200 day here, scott. Im short the 115 puts now in facebook. In amazon, i shorted them at the 200 day, which was approximately 700 why did the fang stocks go down so much . Were they a source of funds to put into the banks and other areas . Yes. Well they were they were one of many sources. Then if we think the banks are going to keep going up, where is the money why would we go to the fangs if we think money is coming out of them, fund trades and other areas. To joshs point, i think that move has been made. Emmoo, i dont think facebook keeps slamming to the down side. This is 135 stock. Down to 1 14. Can you imagine a serious professional investor admitting to anyone, yeah, i liquidated facebook so i can chase the banks that have just run, you know, 12 . No one in real life is actually doing that. I think its a little bit more subtle. I totally disagree with that. In real life they are in portfolios doing that. No one is admitle it and saying this is my big trade. I just got slammed in the fangs. Now im going to sell them and go chase the bank rally. I think you have a higher probability of not a rotation back, but a little bit of a seesaw affect. I wish they were pretty close friends, do you think . I would say no. All of a sudden trump gets in there and what was really leading the push down . I am sorry. I just i reject that. I totally disagree with you. When amazon goes down, what else goes down with it . The fang stocks in general go down. Facebook, amazon, apple, netflix, they all went down because trump got elected . So we its because he called them out during the election . Maybe potentially he will go after them. You can laugh all you want. If you own amazon, you wouldnt be laughing watching this thing go bang, bang, bang, bang to the down side. The second trump gets in there. People im telling you, scott, what you dont understand is people who own amazon as that thing is going down, theyre selling facebook and the this is a guy who has a list of political enemies, and he has been vindictive throughout his life. He has been involved in thousands of lawsuits. Jeff besos is tweeting at him congratulations. It probably killed him to do it, but he was looking at his stock price. First of all, kevin made great calls. To a lesser extent the one name i think you buy aggressively is netflix. Netflix is the one name that is not owned as much. Okay. Does trump like netflix . Yes. Fang goes down together. Fang goes up together, right . Thats why theyre fang. Yeah. Yeah. Sometimes. If amazon is leaving thats why they if amazon is leading them to the down side, the rest are coming with it. Thats why the stocks are coming down with it. Kevin is sticking with us. Heres what else is coming up on the Halftime Report. One of the biggest investors in the travel space on whether the sector is right for investment. Brad gerstner is one of uniteds biggest shareholders. Where does he stand on the new bare bones overhead spaceless tickets . Plus, a big call on disney. Will the magic return for the stock . More halftime with scott wapner and the gang two minutes away. Alpha seems more elusive today. Is it because so many go after it the same way . Chasing after short term returns. Instead if getting caught up with the crowd, the Investment Managers at pgim take a long term view, teaming specialized active investing with riskmanagement rigor, to seek out global opportunities. We manage over a trillion dollars this way, attracting many of the worlds leading investors. Partner with pgim. The Global Investment management businesses of prudential at the Marine Mammal center, the environment is everything. We want to do our very best for each and every animal, and we want to operate a sustainable facility. And pg e has been a partner helping us to achieve that. Weve helped the Marine Mammal center go solar, install electric vehicle charging stations, and become more energy efficient. Pg e has allowed us to be the most Sustainable Organization we can be. Any time you help a customer, its a really good feeling. Its especially so when its a customer thats doing such good and important work for the environment. Together, were building a better california. Welcome bah being to the Halftime Report. United airlines announcing several changes at its investor day yesterday, including lower fares called basic economy. Well, Brad Gerstner the founder and ceo of altimeter capital. Brad, welcome back. Good to talk to you today. Hey, scott. Thanks for having me. Its good to be back, and congrats on all the incredible anniversary coverage. Thank you so much. Its good to have you on. Lets start before we go to the investor day, which certainly is getting a lot of conversation, the buffett investment, how surprised were you to hear about it . What do you think it says about where the airlines are today . You know, i would like to say that i was terribly surprised, but i, you know, had suggested on twitter back in april i wouldnt be surprised to see brookshire invest. This industry has been transformed through consolidation. It has incredibly strong balance sheets. Much more durable earnings than theyve ever had, and theyre trading as cheaply as ever. When you look at those industries that theyve invested in with strong competitive notes, strong pricing power, strong balance sheets, and trading at five times, you know, ebida for this industry, frankly not that surprised to see them get involved. These initiatives that united announced yesterday, i mean, lets just call them what they are. Theyre customer unfriendly. The ceo, mr. Munos, came on our network yesterday. My colleague kelly evans tried to push him. I thought it was a lot of spin, to be honest with you, that she got in return. These are customerunfriendly initiatives from an airline that has had issues with customer service. How should that be factored in to what theyre trying to do and what it will ultimately mean for their bottom line . I respectfully disagree, scott. You know, what they announced yesterday was basic economy. There are plenty of people who choose to fly on no frill carriers where they have to pay for their bags, where they have little to no seat pitch, where they dont earn miles. United has given them the opportunity to do that on united. Its allowing them to segment the cabin. Imagine this. Imagine an industry that historically has had people who get the exact same product paying radically different prices. You had people paying 800, and other people paying 100. Now theyre segmenting the product in which most other Industries Take as common place, and i think its a good step forward for the business. Guys. Well, i is that spin . Whats that . I said does that sound like spin to you . But he gave the example of somebody had flown to their investor day from, i think, los angeles, and he paid 100 round trip, which sounds a little far fetched, but if thats the case,ing so be it. I dont know whose fault is that, whether thats the customers fault or the airlines fault or however these things are factored in. It just i wonder if there could be any sort of consumer or customer backlash against some of these type initiatives . Well, listen, i think at the end of the day its the obligation of the airline to deliver on the core promise of the skurmds. To fly Great Hardware on time, predictable wifi. Predictable, you know, charging at your seat, et cetera. To give consumers what they want. For some consumers theyre willing to pay for more and for some consumers they frankly just want the lowest fares, and i think the Leadership Team thats been approximate put in place here is truly extraordinary. Since we talked in april, they have six new directors, a new chairman of the board, a new president , a new cfo, a new head of commercial operations. I truly think that this company has gone from, you know, the back of the pack to the best board and the best Leadership Team in the industry today. Hey, brad. One of the things going on in the economy this seems so emb m emblematic that the middle class has been hollowed out, and you have this biforcated world where airlines of jetblue are doing mint and more for the first class or just below first class passenger, and then on the other end of the spectrum what were talking about today, which it looks like is essentially geared towards millenials who really just want to pay the lowest fare and not be bothered with things like reserving seats, et cetera. What about the regular flyer that just wants a good experience . Maybe not the best, but not no frills. Are there any airlines addressing that flyer Going Forward sf. I dont think theres any changes going on. In fact, you know, if you have come to expect good service in the economy cabin out of these airlines, i think youre going to get it. In fact, what theyre saying is it if you want to fly no frills, then you dont get to carry your bulky carryon bag on the plane and slow down the entire boarding process. I think the experience gets better for everybody as you segment your customers. There are people who like to stay at the four seasons, and other people like to stay, you know, share a couch on air bnb. I think that united is simply segmenting their audience better so that they can match what people are willing to pay with the product that theyre delivering. Let me perhaps take a second here and go back to the brookshire question, scott. Sure. And really walk you through what i think they see as an Investment Case here. You know, the stock hit 60, where the company yesterday announced 5 billion in incremental annual profits. Lets assume they get 3 billion of that. At five times ebida, thats an incremental 45 a share. Over the next three years theyre going to generate 9 billion to 10 billion of free cash flow. Thats another 25 a share. Thats 70 of up side on a 60 stock. Now, add into that this trading at one of the lowest multiples in its history and the lowest multiple in the industrial category. Railroad companies trade at eight to ten times. Theyre currently trading at five times. Lets say they go to seven times. At seven times thats another 60 a share. Just from the operational improvements they announced yesterday and a rerating to seven times, which we think brookshire understands that they should be trading at seven times, thats somewhere between 140 and 180 stock over the course of the next few years. The Investment Case here is incredibly compelling. At the same time the airline is doing more to invest in the product and consumers than theyve ever done. Ive got kevin let me ask you a question. Kevin oleary has a question. Im dying to ask you this question. The reason the airlines traded at discount multiple, and they have not for an eternity. When things get good, all of a sudden they go a ton more aircraft from the manufacturers. Thats why many people would rather own bowing that i any other aircraft operator. The whole industry has overcapacity, and they blow their brains out again on margins giving their seats away. Tell me why its different this time. Very simple. Ten years ago 12 carriers controlled 60 of the market. Today four carriers control over 90 of the market. Massive consolidation has led to the rationaleization of an industry, says and, frankly, the Investment Opportunity exists because of the weve had four generations of Business School students educated that the worst place to invest is in an airline, and you and i both know, kevin, that it takes skepticism to create opportunity, and theres massive skepticism in the airline, which is why, you know, brookshire has invested, and weve made it over the course of last nine months the Largest Holding in our portfolio. Hey, brad, let me ask you quickly i like the brookshire. I love the brookshire. Remember, they also bought ibm. You know, the story is yet to be told on ibm. You know, perhaps outside of their zone of competence, but when it comes so industrials, levered businesses of this sort, i think their track record speaks for itself. If you hit 300, ken, youre in the hall of fame for a career. You know, its gotten most of them right. Brad, before i let you go, let me ask you about netflix. I know its one of your holdings, and you have Tech Holdings as well even though its the airlines and the travel stuff that seems to get the most attention. Whats your thought on whats happened in tech since donald trump got elected president . Well, i think, you know, you guys chord overed it well today. Dollars are rotating out of tech. Fears about multinationals in the wake of, you know, in the wake of global trade wars. Concerns about a strengthening dollar. The fact of the matter is for these major tech platforms, netflix included, the increasing economies of scale, the benefits of these networks has never been greater. In this world postsurge where people are really focused on apps, big platforms, machine learning, and now quickly moving into a. I. , theyre frankly, you know, fewer than ten Major Tech Companies that have the ability to leverage those trends, and so, you know, i agree with ken and some of the others who have commented earlier that these will be buying opportunities. Certainly more volatility because theres a lot of questions as to whats going to happen over the course of the next 100 to 300 days, but my sense is well look back at these opportunities whether you are talking about amazon, google, netflix. Well view these as buying opportunities. I appreciate the time, as always. Hope you come in the studio sometime soon. I look forward to it, guys. Brad gerstner. Ahead, an analyst that thinks disney is bringing magic back to that stock. The call of the day is straight ahead. The dow is now off the lows of the day as well. Take a look as we go to break. Theres the dow down 73. Were back after this. Guyhey nicole, happening here . This is my new alert system for whenever anything happens in the market. Kids a natural. But thinkorswim already lets you create custom alerts for all the things that are important to you. Shhh. Alerts on anything at all . Not only that, you can act on that opportunity with just one tap right from the alert. Wow, i guess we dont need the kid anymore. Custom alerts on thinkorswim. Only at td ameritrade. Were drowning in information. Where, in all of this, is the stuff that matters . 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. The latest and greatest new vehicles on display out in los angeles at the auto show. Our phil lebeau is there with a first on cnbc interview. Hey, phil. Thank you very much, scott. The head of measure s mercedes. Its the day after you showed this incredible vehicle. Lets take the tarp off of this. Lets do it. This is the new mybach cabriolet. When you showed it last night, a lot of people were saying, wow. Tell me a little bit about it. Well, its a great car. Thanks, first of all, for having us this morning. Greatly appreciate the opportunity to be here. For us at mercedes 2016 is the year of the dream car. We brought coupes and roadsters, and we had the s cabriolet. For the customers looking for something a little more exclusive. Just a little more exclusive. Its our brand that stands for luxury, exclusiveivity, for hands craftsmanship. Its the top of the line car. It gives us the opportunity to show that we can flex our muscles across every segment. Dploo wh when you are looking at something that is ultimatery luxury, and you are charging what you are charging for this vehicle, how much demand is out there, and will ma mostly come in the u. S. . We keep that vehicle fairly limited. We are only building 300 worldwide, and were only bringing 75 to the u. S. We will have a situation that we already see where we have more demand than we actually have cars available, but i think thats the right strategy. You know, if you come in on the top end, you dont want to flood the market with the product. You want to have a product thats highly reliable and somewhat limited. Talking about the broader luxury markets we dont know whats going on. Hopefully its not a fire alarm. In the broader luxury market, youve been able to raise your sales, when some of your competitors have not. Are you worried that were enclose close to a peak. Im not sure. We have to see how the overall industry develops. I think the luxury market will deny slowly to grow and take share from the overall industry. Weve been very fortunate to have product lines. I have to ask you this question as the alarm continues here. So many people saw the pickup truck that you guys unveiled over in europe. I think about three or four weeks ago. Any chance we see that in the United States in. Well, you know, we are taking a look at the segment. Each and every month. See how it develops. Were taking a look at the car, and well see what were going to do in the foo ut. The pickup truck will not come 2017, but i wouldnt rule it out for the years afterward. I want to see you well get away from the alarm. Guys, back to you. All right. Phil, thanks so much. Mercedes pickup, all over that. That has thats a big im a big f150 guy. Thats about to be big. That will be a seller, though, for real. Why have they taken so long to finally introduce that . Thats so sweet. Sue has the latest headlines. I want the red convertible. I hear you. Us too. Heres whats happening this hour. Everybody, secretary of state john kerry arriving at the Climate Conference in morocco. In his speech he praised the Paris Agreement as a framework that is built to last. No one should doubt the overwhelming majority of the citizens of the United States who know Climate Change is happening and who are determined to keep our commitments that were made in paris. A recall to tell you about. Some grated cheese brands are being recalled nationwide due to concerns of possible salmonella contamination. The recall involves the four sea grated cheese, home style grated cheese and cento grated cheese brand. No illnesses reported so far. The Swedish Academy says bob dylan is not coming to stockholm to pick up his nobel prize for literature at the december 10th ceremony. The academy says that dylan told them he wishes he could come, but other commitments have made it impossible. We wish him the best nonetheless. Thats the update this hour. Halftime report back after a quick break. See ya next year. This season, start a new tradition. Experience the power of infiniti now, with leases starting at 319 a month. Infiniti. Empower the drive. Coming up in 19 minutes on power lunch weve taken a wrong turn, says januss bill gross, who will join us with his big warnings for the country following Donald Trumps win. Mexicos former president not a happy camper either. The president of cadillac will show off the automakers next hot rides, and the new war on drugs. We have exclusive data on drug pricing in america, and you will see it first on power lunch with stocks at the top of the hour. Dont move, though, because the Halftime Report is back after this commercial break. Mommy, your wish came true if youre going to wish, wish big at the lexus december to remember sales event. Get up to 2,500 customer cash on select 2016 and 2017 models for these terms. See your lexus dealer. 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 Services Companies 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 back on the Halftime Report. Magic in the house house. Deutsche bank upgrading disney to buy. Thats after three months on the sidelines with a hold rating. Shares, there you go, up nearly 1 this hour. It is our call of the day. Kevin, im going to go to you first because you made this call probably ten days ago. Yeah. The investment thesis here has been where can i hide out in content where everybody hates the name and that people havent looked at the diversification of revenue enough . Remember, this whole decline in disney started almost a year ago when eiger got caught up in the espn unplugging issue and skinny bundles and all the rest, and, you know, it merits discussion. No request he about it. Overlooking that was the diversification of in being that they company has remember when we went over to china, and it was much ballyhooed opening of the theme park, and then we had that tragedy in florida at the same time and he his team flew back 48 hours later. We never talked about shanghai again. The fact is my guys tell me over there the place is swamped. Theyre going to beat their numbers. Thats my own assessment in that area. Box office has been great in 2016 and looks just as good in 2017, and, yeah, theres a lot of nay sayers on the espn thing, but i think disney is going to be a 7 home run if you hold it. We may get a big portion of that in 2016, but my thesis was where can i make where can i get a dividend and make 7 in 2017 . I think this name, which i gave a full weighting to in my portfolio is doing exactly what i had hoped it did, and im waiting to hear from eiger again, of course, because there are still nay sayers on the espn thing. You heard from them, right . You heard from him after earnings. The reason that the stock was up is because the market deemed some comments that eiger made on the call were more positive about espn. The stock was up. What i want him to what i want him to tell me is he is not buying netflix. Thats a diluted deal, and he doesnt want it. Its time to be constructive on disney, and kevin lays out the fumgts case. Ill give you the technical. Stock back above its 200 day for the First Time Since may of this year. It spent a long time in exile, and now i think youre seeing some bullish sentiment return. Its about 9 off the low already. Very, very far from its high. I like it under 100. To joshs point on sentiment, im just looking. Analyst recommendations. Deutsche bank today, our friend anthony declemente. Youre going to see so many that have had this at a held on. Theres 18 out of 36 analysts at a hold. Thats the lowest bullish its a lot of fuel. Recommended a lot of fuel. A lot of bullish recommend dags that were there previously lowered. That will be a tell. At 120. I know he is listening. I hope he is. Thanks. See you soon. Thank you. All right. Our resident shark kechbl oleary. Unusual activity in a big name tech stock thats making John Najarian buy today. Back in two. Alpha seems more elusive today. Is it because so many go after it the same way . Chasing after short term returns. Instead if getting caught up with the crowd, the Investment Managers at pgim take a long term view, teaming specialized active investing with riskmanagement rigor, to seek out global opportunities. We manage over a trillion dollars this way, attracting many of the worlds leading investors. Partner with pgim. The Global Investment management businesses of prudential ways wins. Especially in my business. With slow internet from the phone company, you cant keep up. Youre stuck, watching spinning wheels and progress bars until someone else scoops your story. Switch to comcast business. With highspeed internet up to 10 gigabits per second. You wouldnt pick a slow race car. Then why settle for slow internet . Comcast business. Built for speed. Built for business. Welcome back to the Halftime Report. Im jackie deangeles. Big moves in the bond market. We saw global yields get crushed with the u. S. Tenyear note rising notarizing over 2 coming off the session highs today, though. Given the state of the bond market now, are you a buyer or a seller . You know, thats funny, jackie. I would still be a seller because i think yields could climb higher from where they are right now. What youre seeing the climb in yields is a reflection of the smooth transition of so far of the trump presidency, also the election itself. And also the data points. Economic data points arent good for the fed to raise. Right now were seeing that all happen. The yields could get to a point where theyre attractive. But they climb a little higher. Brian, do you agree it is time to continue to sell and what are the key levels to watch . I think when you look at key levels, the tenten trend has changed. Ten years of higher or lower highs in the tenyear neote. I dont think we get above there by the end of the year. Going out to 2017, i think rates get between 1. 5 and 4. 5 we saw in august of 2007 when the Housing Market crashed. Lets say 3 . Thats what im envisioning 2017. Right now, money will come in and buy bonds if we see it get to 2. 4 . But i think we crack that and move higher. All right, for more on the market, head to the website futures now. Cnbc. Com. Back with the live show tomorrow. Scott, back to you. Jackie, thanks so much. Brothers najarian scanning the Options Market all morning long and we sent them to the telestrator for unusual activity. We got some big stuff coming at you, man a big one. When is the last time we talked about apple for unusual activity . I cant remember. See . Ive been long it, a little too long for a little too long, scott. But today, big pop, on the calls. The stock basically got down and filled a gap that was created on september 12th, i believe. So today with the stock now back to 109, yesterday, traded through 105 to the downside to fill that gap. So today people came in and they were aggressively buying december 115 calls. How aggressively . Look at that number, scott. 160,000 of those calls, they bought them from 28 cents all the way up to 70 cents, perhaps higher now. And like i say, 160,000 of these, that is huge, one of the biggest trades in equities we have seen this week on a very active week, so i bought the calls, i actually bought the 110s. Im not asking apple to go as far as these guys are but im believing in the trade, ill be in it for two weeks. Seems like apple got caught in the tech downdraft. I wonder fairly or unfairly . Part of the fang. Not in the fang, but part of the fang. That fang trade. Those guys own those fangs. I know you were laughing about that earlier, scott, but a lot of the same investors in specific names are in across the board and looking for areas. I think thats why apple is getting slammed as much as anything. Now youre stealing my point. No, its not. You and i are going at it later on. Were going to put a right now. Right now. Lets do it oh, my god. You dont want him to do his unusual activity then, scott . The unusual activity is me putting pete down outside. Youre wrong about that, big fellow. I got twillo, cloud computing. Look at this chart. Look at what the run really looked like here. Absolutely unbelievable. After topping out, it actually plummets down to 30 again. Today, somebody came out buying the december 40 calls, very large, relative to what had already been traded there. Almost double, not quite yet, but buying aggressively, about 1. 50 average price call, Something Like that. Stock around 35. 50 something. Keep an eye on this name. If this continues to move to the upside, these things could really pay off. You know what is so interesting, pete, a tease for a segment were going to do on the other side of the break, twillo is the number one shorted stock on the new york stock exchange. 63 of the flow is short. Thats one of the reasons why i would not touch the stock, but im okay having these options. I have risk control that way and the reward could be very great if we go to the upside. And if it short squeezes. One of the other big names on the list, well tell you after the break. Were back, talking about the fang stocks and number one fang, the f, facebook, down again today after reporting new errors with its measurement metrics. I think facebook is doing the right thing here, though. Theyre bringing in third parties, not just nielsen, but others, to verify not whether or not people are clicking the video, but if theyre watching all the way through. And to audit some of the traffic statistics because this whole story falls apart if there is any doubt on the part of marketers that this is not a reliable advertising medium. I dont think theyre willing to risk it. I think facebook is doing the right thing here. Quickly, before we move on, just because youre a minneapolis homer. Target is up 8 . How about the move on that thing and some of the numbers they put up. You were bullish the day before. I think brian there was probably too much focus when everybody was focusing on grocery versus walmart and all the rest of that. Look at the transition theyre making and the growth and the way theyre moving, i think eventually, scott, quite honestly, the way they did with the cvs thing with the pharmaceutical, i wonder if they might eventually spin off the groceries aspect of this. I like theyre using the stores as distribution centers, taking a page out of, you know, the walmart and the amazon playbook. Really smart. And ill tell you what, also, the repurchase and the dividend, they continue to work on that, thats why this company what about invidia . Up 6 today. What are you going to say . The best stock of the year. Trying to tell people. Josh called it. You can lead a horse to water, scott. I think this one rolls up the triple digits, but it had a huge lets roll through some of these shorted stocks, nyse, i like this list. We talked about twilio, 63 of the flow short, thats number one. Mentioned the positive, the call buying in that. Weight watchers is number two. Fit bit, Restoration Hardware and shake shack, shake shack is one of the most high profile names on that list. 38 of the flow short. You can put weight watchers, fit bit and shake shack all together into one little category. Jcpenney, penneys, transocean and herbal life. I wouldnt be short jcpenney. Under armour . There is enough people pushing against it. Thats why eventually when he gets this, i think it will take some time for under armour to get the turn in place, when they do, thats going to be part of the extra fuel. Shake shack . What . Why is it so short . Probably the most expensive stock in the sector. It is walking on a razors edge in terms of expectations. They have to continue to crush or the stock is going to be low three handle. Thankfully they had a good earnings report. Just opened up the one in penn station, good for me, strategically. Or bad. I get why people are short it. It actually worked as a short since it became public. Good stuff. Well see you tomorrow. Scott, thank you very much. Im tyler mathisen. Here is what is on the menu of power lunch on this day. We have taken a wrong turn. So says bill gross, janus big bond guy. Youll hear from vicente fox. A tale of two retailers. A pair of household names making two different moves. Power lunch begins right now
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