Welcome to the Halftime Report. Im melissa lee in today for scott wapner top trade this hour, nike just did it the Worlds Largest Footwear Company posting strong earnings. The street buying the stock hand over phys today. With us for the hour, josh brown, Jim Leventhal, jon najari najarian, head of Global Investments at ubs shares of nike are rallying. Jim, you own it. Are you buying more . I bought a little bit more. I was hoping to load up the boat today, but i just cant, for two reasons. And i would love to get jays opinion on this, but its up 9 today. Im not going to go chasing it i think it will go higher from here, but the question is, i thought the Earnings Quality was really kind of low you had Gross Margins that went do down you had revenues that were okay, but a tax rate beat. So whyd you buy a little when the stock was up so much when youre throwing shade on the quality of earnings . Ive got a lot of dry powder left to go in this name. Im not going to buy it all today. Look, i think this was a question, melissa, more than anything, of the expectations were so low, particularly in north america, that it was an easy beat. All of that put together doesnt get me all that enthused im glad with the position i have im also glad ive got more dry powder to commit youre snickering, josh, why . I like when you tell jim hes throwing shade at things i own the stock, too, melissa. And i did not buy anymore. I was a buyer in the low 50s i think at the same time as jim. We were buying a lot of the pessimism. And it turns out things are not so bad it was a sell on the news event for you . No, im going to stay with it but the last two times it had a positive reaction to an earnings quarter, one was actually a year ago this week and another one this spring. It kind of petered out around 59 60. Thats been resistance for almost 18 months now so i dont see what was reported this morning taking the stock materially above, and even as you look at that candle starting to form, youre seeing some selling, probably showing up, if it doesnt get above that technical level today. So i think, like, if youre in it, congraturitos. If youre not in it, i dont know if i would be buying it here it doesnt look that convincing were in a new up trend. Lets bring in jay seoul, an analyst at Morgan Stanley who covers nike. A 56 price target, jay . What would you say to people who own you werent vinced going into the quarter that this would be the blowout that it is. Melissa, thats exactly right. We thought the numbers would be less bad than feared and thats what we saw. What do we see in north america . Because were continuing to see sales trends decelerate. In 4q, sales only went up 0. 5 and the guidance for 1q implies sales will be down negative 2 thats the worst performance nike has had in north america since the recession in 09 and if we can see that improve, that brings some more money off the sidelines. If not, well see the stock remain rangebound, like josh is talking about. How about the confirmation of selling limited products through amazon Goldman Sachs analyst, who you probably know, had an estimate today that revenue could increase 300 to 500 million in the united states. That would be 1 of global sales. That could be meaningful, no it could be meaningful. I would say, the thing about nikes Pilot Program with amazon that its starting small if they get to that number, its going to take many years and nikes already very big on amazon nike is the most purchased brand on amazon of any brand really, what were seeing, make nike sells more directly to amazon rather than Third Party Sellers selling on amazon. So really, its a shift of who is selling the brand and its not going to be that big of a deal right now. The bigger trend is them controlling counterfeiting thats a big issue. I wonder if there are parallels that would be knead to alibabas and nikes presence on tmobile. We saw sales up 11 in the quarter. And they have a pretty big, right, presence on tmall and alibaba. Can we make up the parallel, its going to beef up its presence on amazon here in the u. S. Just like it did in china and it could see some sort of increase in sales because of that it could. Now, theres a difference between tmall and amazon. Tmall is a platform where that nike is able to present its brand in a way they really like, that they think represents them well on amazon, theyre still working on being able to present the brand in a way they feel comfortable, where theyre going to provide more product to amazon and be able to grow sales in that channel. As they work on that, well see amazon be a bigger driver. But right now, its not quite the same story as tmall sg a was down, and i think thats because demand creation was down, ie, lower endorsements does that worry you for anything in the intermediate to long run future or, look, thats obviously been a big number over the years, is this just a healthy pause in what was a big expense i think it is a healthy pause. Right now, you know, were kind of in between big global sporting events like the olympics or world cup or euro championships. And if we get into next year, nike says theyre sg a will be up 5 in total thats because theyre going to invest ahead of the olympics and euro championships and other big events we have in 2018 thanks. I thought it was i mean, obviously, currency, you cant dismiss it you didnt do that, mel. Im just saying that china was up 11 year over year, 16 excurrency. And the dollar being weaker, jay, had to be a pretty significant driver, especially into western europe, where theyre competing against adidas so aggressively. That had to be something that you could happening your hat on because of where the dollars gone absolutely. Theyre saying currency will be a 700 million headwind in this fiscal year and thats probably the biggest theyve seen in many years, at least in the last three. Next year, it wont be as bad. So to think about the stock going forward, its nice to see that headwind starting to dissipate a little bit are you going to revisit your estimates, your target, your rating on nike well, you know, our were perpetually studying the company and following trends so i think what were looking at is, the main thing were looking at is the north American Business, like i said before and you know, obviously, if the data dictates that we should revisit our numbers, then we might. So is there anything out of this Earnings Release that makes you think or rethink your inline view of the stock . Or makes you just even reevaluate . Well, melissa, ill tell you what was most interesting to me is that really, with nike, it comes down to product. We like to talk about everything but the product. But at the end of the day, thats whats most important and nike has some interesting products that are coming to market that are very interesting. The vapor max is something weve heard a lot about. And i was in europe, i was in zurich and i was in edinburgh and visited some footlocker stories and the commentary from the people who work in the store is that the vapor max is doing tremendously well. Its outselling the adidas ultraboost, even though its about 50 pounds higher in terms of price and you know, thats an important thing. We heard on the Conference Call that nikes tone around vapor max and the new products they have coming is very bullish. People have a wait and see attitude about those type of things before theyre willing to invest behind it but i think its important to watch how those new products perform. Because that can be something that really drives that north American Business and gets them back on track. I think like from an investing standpoint, right, so i know youre trying to get each quarter right and youre trying to have a few on what the next which direction the next 10 might be but just from a long i read phil knights book, shoe dog and you think how many cycles nike has been through and how many different permeations, you know, how many different versions of, oh, now the mall is dead, now the mall is back, now theyre going to do Departments Stores and maybe they should do more with athletes foot and footlocker thats been going on for three decades at this point. And to me, it almost doesnt matter, because if people want the product, the channel that they sell it through is secondary. If they do a deal with amazon, maybe its not as good as sales on their own ecommerce efforts, but like, at the end of the day, does it really matter that much . If youre a longterm investor in nike, should you care so much about where theyre selling it, which channel . Well, josh, what you should care about if youre a longterm investor, if you have the luxury of a three or fiveyear time horizon, is that nike is just in the beginning of completely reinventing how they make shoes. We havent talked about this a lot, but they are completely changing how they how the supply chain theyre going to bring product faster to market, use more automation in the process, use much more digital type of design systems. Does the cost go down or the time to market go down both. And i think right now nikes had a hard time controlling inventory. Its going to help them control inventory, help them reduce markdowns and so feasibly the margins will be higher in the future . Absolutely. It might take three to five years to see that, but if you have a long time horizon, its a big part of the story. Jay, thanks for coming by, Morgan Stanley aaron, what do you think about the discretionary, athleisure . I think any company that has strong secular growth stories will do well in this environment. Obviously, north american sales have been weak but you are seeing them on the cutting edge, really starting to invest in their r d and their Product Pipeline and i should think that that should help them but more broadly speaking, Consumer Discretionary right now, given the valuations thats trading about 19. 8 times versus a 16 market multiple historically, right now Consumer Discretionary is not a place that i want to be investing. I think there are better value sectors in the market that offer a better and much more attractive valuations. You look at the Energy Sectors trading at five times cash flow. I would rather be rotating it so there are more value sectors that have underperformed at this point in the cycle, relative to the consumer the discretionary doc, what are you seeing in terms of activity . People reaching for nike, or no . Yesterday they were aggressively selling puts in nike i went on with kelly on closing bell and we talked about that they were selling 14,000 of the 52 puts with the stock at 53 that is a big bet that the stock trades higher rather than going lower. What price did they get they sold those for 80 cents yesterday. Not bad in essence, they would be buying at 51. 20 if, indeed, the stock went down, which it didnt, so those vaporized i was short puts, long stock, short calls at the 55 strike, so i had to cover that today, mel, but im out of the stock for now. Shortterm, anyway and i do like jim, i would get back in if we see so now youre saving your best material for kelly evans. Thats whats it was late in the day. The final half hour of trading, but when somebody makes a bet that specific, josh, as you know, they think they know something. You think scotts not watching will scotts on the beach somewhere. Back to you, mel. Thank you, josh brown all right, dow and s p are on pace to finish their best half to a year since 2013 lets bring in jonathan krinsky, chief market technician at mka partners great to have you with us. And specifically, i want to talk about whats been going on in just the past month or so. Weve seen sort of a clear rotation going on that has really changed sort of the sector winners in the past month. Defined rotation into banks. What are you seeing here in the chart . So, one of the arguments for much of the Second Quarter is that the market was very narrowly led in a handful of big cap tech stocks. Whats happened since the early part of june, those tech stocks have sold off. We know about the weakness in f. A. N. G. And technology, broadly. But the s p is flat since that time so how has that happened because weve seen money come out of the tech stocks and go into some of the more value sectors, financials and health care in particular are up about the same amount that technology is down. As long as money is coming out of one sector and going into another, we think that the overall market should be okay here so basically youre saying that, you know, my gosh, tech can actually sell off and the markets can still go higher, as long as that money remains in the stock market yeah, and, you know, so the bearish argument was that, well, if those f. A. N. G. Stocks roll over, the whole market is coming down and f. A. N. G. Stocks, thats exactly what happened, but the market didnt really go down there are some other stuff that we, you know, were watching thats also pretty constructive, that doesnt get a lot of attention. Yesterday, the microcap index hit an alltime high generally thats a pretty good sign for risk taking and as far as overall breadth, if you look at Something Like percentage soft stocks above the 200day moving average, as of yesterday, that hit the best level since late april yes, weve seen some weakness in tech thats probably not surprising the tech sector was up almost 50 since the brexit lows to its june peak. So if we had told you a year ago that tech was going to do that and then maybe pull back 10, 15 , even, you know, that wouldnt be the worse thing. But its really that rotation thats healthy at this point, would you stick with banks and health care and i guess embedded in that question, do you believe that tech will continue to go lower our call a few weeks ago is that were going to see a bit of a rotation out of growth into value. That started to work so, yeah, banks, health care looked pretty good to us in the third quarter. You know, again, tech, its not a bearish call, its just that after such a run, i think theyre probably due for a breather so for our money, the next quarter is probably better spent in the value areas jonathan, thanks for joining us, jonathan krinsky, mkm. I think thats music to your ears, jim. It is music to my ears. Look, its been a good month of june if you look at one comparison, the russell 1,000 value versus the russell 1,000 growth, theres two Percentage Points of outperformance over growth lets put that into perspective. Yeartodate, growth has outperformed by 9 Percentage Points so were clawing back from what jonathan is talking about, that earlyyear leadership in what was arguably, some people dont think so, but arguably a narrow leadership in the f. A. N. G. Man stocks i think that this rotation will continue im seeing people who are looking at the companies im involved in and say, why not theres a margin of safety in the dividends, et cetera theres a lot to find attractive in the value space right now and beyond just valuation, when you step back and think, what started this . We started to think that rates bottomed around 215 and have now moved up almost 15 basis points. Thats an enormous move over the last two weeks typically, when rates are moving higher, value outperforms growth it typically comes with the expectation that growth is turning and inflecting more positively, which weve seen over the last couple of weeks. I mean, the data out of today from the from the michigan number, from the chicago number, from milwaukee fed all were great. And so i think people have just got too bearish on the expectation for growth in the economy. Were now starting to see rates move higher, and all of that is leading to this value performance. And granted, the move in yields this week were stunning for the bond market, but so were talking about 12 basis points, 15 basis points. Are you ready to say, value is doing better firstly, i dont think that rates are rising indefinitely. I do still think that were probably at fair value, between 225 and 260, so were going to be in a range. We were below that range were moving back into that range right now. I think, though, as we continue to see rates move, you know, 10, 12, 15 basis points higher from here, thats going to continue to support the value sector. In addition to that, you also have valuations, which are extremely attractive if you look at the valuation gap between the s p value versus the s p growth right now, theyre at historical lows. Theyve been this is typically where theyve bottomed from a valuation perspective gap, its about a fourpoint differential i really like the move in the financials here. When jonathan was talking about sector rotation and things, at times, you can get screwed up by trying to get hahead of that rotation you kind of feel that these stocks that now have the ccar behind them, mel, as well as great earnings in this most recent quarter, that tends to tell me that were going to be seeing xlf 25, 26, 27, as its moving up and breaking out here, to the upside. The financials im long the xlf im long jpmorgan. I think you could be long many of the stocks in here that will keep working, because theyre going to return more money to shareholders and because these stress tests are behind them i got a chance to sit down with chairman and ceo of Morgan Stanley, james gorman, yesterday. And we talked about the changing environment for banks. Heres what he said. The banks are sufficiently capitalized. And with that came, in many cases, significant increases in dividends and buybacks so, you know, very healthy dynamic. You know, do the banks represent good value we increased that dividend again, a number of banks did so the yield now on these stocks is around 2 the yield alone, and then the trading, in many cases, is still a discount to book and heres an interesting stat, to sort of frame this. Theyre still trading at a discount to book the move over the past 12 months, so Morgan Stanley, for instance, is outperforming tesla over the past 12 months. Thats how stunning thats how discounted the banks had become at one point in time. Would you stick with the bank trade going to the second half yeah, i would and im long jpmorgan and schwab, which are two names i feel like i talk about daily they continue to work, and schwab in particular looks like its on the verge of a major breakout prices that it hasnt seen in quite some time. Lets hope that happens. But in the meantime, just thinking about the banks conceptually right now, its not just a rates trade, its a bet that we dont see a recession anytime in the next year to 18 months, which the people that follow this type of data do not believe well see. Anything can happen, obviously but if we dont see one, and you dont get a meaningful rise in rates, you still have some of the cheapest stocks in the market, many of which have growth plans its not like mr. Diamond is sitting there saying, come on, rates, come on, rates. These companies have been making investments in Wealth Management, in technology, and things are happening so i dont know how broad or how narrow you want to be, but just speaking of the sector as a whole, not every company in the sector is a Bank Insurance companies are doing well credit cards are doing outstanding. So, just look at the sector and dont think its about the next ten basis points in the tenyear i think thats exactly right. And you know, a lot of these Companies Get lumped in together Goldman Sachs and Morgan Stanley, ill make the argument that they should not be looked at as equivalent to jpmorgan and wells fargo. I mean, these are, at heart, investment banks versus Money Center Banks i think, also, there are opportunities, specifically within the sector. You dont have to just buy the sector so we talked you mentioned book value, mel. Some of these companies are at a premium to book value and they should be. Jpmorgan is one of them. Some of them are at a discount citigroup still is thats still an attractive opportunity. You can look for higheryielding plays. We talked about blackstone earlier in the week. Its got about a 10 yield so the point being, and this is what you were saying, josh, is you can look at different slices within the xlf, and even within those slices, you can find the one or two companies that you really want to own i dont think you paint it with a broad brushstroke. All right, we want to end Halftime Reportsreports f. A. Week, after a rough week for apple, facebook, netflix, and google, all down 2. 5 or more. I almost feel like you guys did this what do you mean . By naming it f. A. N. G. Week like a shark kind of thing . Maybe maybe. I dont know you were totally saying that. Just own it. All right, im a little bit so that means the trades over bears have f. A. N. G. S. I dont think the trades over i think with respect to the f. A. N. G. S, were coming under some weakness, youre seeing some rotation, but, look, were still in a low Interest Rate environment. Unless rates go up significantly higher, people are still going to want to own strong secular Growth Companies the discount is ranked as lower because rates are lower. I still think you buy these stocks i would probably be a buyer down 5 lower from here, but i think youre picking them up at a great opportunity. F. A. N. G. Man, i like the apple and netflix part of f. A. N. G. Man f. A. N. G. Itself, i only really like netflix its near my buy signal, but if we had the man part, ill go with apple, too. I want to point out, 80 of wall street strategists think the f. A. N. G. Trade will work in the second half of the year. So just some food for thought. Do you think it works in the second half of the year, jim ive been pretty specific that i dont think f. A. N. G. Should be looked at identically. I look at the price to earnings to growth ratio. How much are you paying for growth thats the peg ratio the peg ratio of certain names like apple and alphabet, theyre about 1. 5 to 1. 3, those are nice, tasty peg ratios netflix and amazon are like 3 or 5 times, thats not so attractive to me i dont think they should be all lumped together. Google and facebook have been remarkably consistent about giving guidance to the street, exceeding it, giving even better guidance going forward, but not getting carried away and not shocking the market. Its not to say that they cant in the next two quarters, but if you just look at whats been going on in these companies and the trends of the fundamentals theyve been reporting, theres no reason to say all of a sudden something is going to turn on a dime its not like a fashion company, where they miss a shoe or sympathetic. So i would think about it that way. We asked the strategists what they thought and we wanted to know what the younger class of investor, the future investors, think about these names. Heres what they said. If you were given 1,000, which of those four would you put money on i would have to pick facebook out of those four. Google i could get one share amazon. How come . Just bought out whole foods i would do netflix, because when im bored and at home and i have nothing to watch. I would invest more deeply in google who was holding the mike . Im not sure. Avocado toast wasnt an option here, so you can you can invest in avocados. Or amazon, now that they own whole foods. Thats true thatll move the needle all right, weve got a lot more ahead on the Halftime Report. Next up, the analyst behind our call of the day rings in with an idea in a sector that many investors have left behind. Plus, the white house prepares to take action on steel. Well run through the trades on the big moving steel stocks. And the traders are weigh in with their playbooks for the thhfte po 27. E alimrertis back in two minutes. I joined the army in july of 98. I did active duty 11 years. And two in the reserves. Our 18 year old was in an accident. When i call usaa it was that voice asking me, is your daughter ok . Thats where i felt relief. It actually helped to know that somebody else cared and wanted make sure that i was okay. That was really great. Were the rivera family, and we will be with usaa for life. Usaa. We know what it means to serve. Call today to talk about your insurance needs. A used car, yogigspeed internet. Me . You know whats not awesome . When only certain people can get it. Lets fix that. Lets give this guy gig really . And these kids. And these guys. Him. Ah. Oh hello that lady. These houses yes, yes and yes. And dont forget about them. Uh huh. Sure. Still yes you can get it too. Welcome to the party. Introducing gigspeed internet from xfinity. Finally, gig for your neighborhood too. The cnbc iq 100, up 24 over up with year its an index tracking big cat companies. Todays leaders include Becton Dickinson mondelez for more, go to cnbc. Com iq100 welcome back to the Halftime Report. Steel stocks on the move following the news from axios that President Trump wants to impose a 20 tariff on steel imports. At first, it was the main domestics, u. S. Steel, ak steel, a little bit of newcorp, and then mt. They scrambled and bought em. I think petes done it a couple of times for unusual activity, mel. And theyve just worked. Theyve all screamed to the upside these are stocks that made a 100 correction from giving up all from the election to january, they came all the way back down. Now theyre making another slower grind to the upside than they did in November Josh is going to the part of the equation that transports the steel. Yeah. Oh, this is my cue railroads youre all bullied up on railroads. Listen, listen, seriously, theyre all going, but the one im in, i bought it last week, i mentioned it on the show, is kansas southern. Ksu is the ticker. Heres a company that had a blockbuster Earnings Report two weeks ago. It went up it shot through 100, rsi got extremely overbought almost up to 90. You almost never see that. Tells you about a level of accumulation thats really noteworthy it has worked all of that excess off, rsi is back under 70. Now its climbing again, as the stock threatens to take out yet another high, maybe the definitive high, that marks this is a true breakout so im in the name, above 105, there are no sellers it looks very similar to some of the other railroad charts. I just feel like this one has potentially even more upside, because of how people were betting against them given the routes they run vertically, mexico to u. S. All right well, fundstrathe is saying telecom will work in the second half of the year with and youre getting paid to wait for the structural change. Its the call of the day tom lee joins us on the phone. Tom, great to have you with us thanks for having me. We know its a dividend player but for this past year, weve seen telecom underperform the broader markets, the worstperforming sector, in an environment in which this sector should theoretically do very well Interest Rates are very low. People are willing to pay premium valuations to the broader markets for dividendpaying stocks, aka, consumer staples, et cetera. And there is chatter of merger, consolidation within this industry so, why should we believe that telecom will turn around i think investors have just been pretty skeptical. And rightfully so, because this industry does have structural problems theres just too much competition and a lot of price competition. And its caused sentiment like, First Reading to be the lowest in almost a decade but the divergence that we see here is that telecom credits have held up really well i mean, telecom bonds trade at lower yields than utility bonds, yet Telecom Stocks have underperformed utilities by 2200 basis points just in the six months thats the setup with the white house and a revised of the doj, i think that for the first time in almost ten years, we can actually see some important deals happening in the sector that would completely transform the industry structure. What are the yields on the telecom bonds. And i guess im thinking about this in the context of, maub youre better off owning the bonds versus the stocks, if youre getting a decent yield on the bonds and youre getting maybe a bigger yield on the stocks, but the underperformance of the stock is notable. Yeah, a couple of things to keep in mind the cost of the debt is around 3. 6 for these companies for the telecoms theyre Investment Grade rated thats actually about the s p overall. Theyre yielding 5. 1, okay so a dividend yield above their cost to debt the only sector in the s p where this exists. But the map weve shown on a report is, if you let their leverage get to the highest leverage thats still Investment Grade, at t and verizon could each do 30 billion in buybacks. But because their cost of debt is lower than their dividend cash flow, it would raise free cash flow. So, its, you know, the companies can solve the cheapness of their stock by doing a huge buyback tom, its Jim Leventhal you and i were on together last week, and we were talking about the macro picture of companies having a tough time growing their top line in a low inflation environment and margins getting pinched by that. As you were saying that last week, i was actually thinking about these stocks you know, you think about verizon and at t, they both went to unlimited data plans, which in the last quarter, definitely hurt their top lines how do you address i mean, you mentioned competition. Isnt there a heck of a lot of topline pressure on these guys absolutely. And in the piece that we published, we go through five scenarios to fix industry structure. You know, because absolutely, the problem with this industry is, the fcc in the past eight years kind of defined wireless competition as very defined adds only mobile players, but, of course, theyre facing competition from cable and from internet and if you use that broader definition, this industry, it makes a lot of sense to consolidate and its not just pricing, its margin structure remember, these guys got hammered because of Net Neutrality i mean, they someone can send 4k video through their platform and not pay anything to at t and verizon. I think theres a lot of ways to fix industry structure here. Tom, thanks for phoning in. Always good to see you tom lee of fundstrat josh brown yeah, look, these stocks are typically not my cup of tea. I dont dislike them we do have some of this stuff in our portfolio, as a result of having some things that we were waiting to dividend. But i its just hard for me to see them really getting any kind of real momentum, really heading higher its not the kind of place i want to allocate a lot of money right now, because i do think that there are Revenue Growth opportunities that translate to better stock prices. Erin, you made the case for energy on a valuation basis. Can you see the case for telecom . No. For me, these are still a source of funds and i look to them as a short opportunity, not a long. I dont see how youre getting paid to wait when they go down every day. In addition to that, i just dont see the growth i think in order for people to really buy into them, you have to see some upside potential on the growth and i just dont see that lets get to sue herrera with the latest headlines sue . Hi, melissa heres whats happening at this hour, everybody. Msnbcs morning joes cohosts Joe Scarborough and Mika Brzezinski responded this morning to President Trumps controversial, derogatory tweets directed at them i think its been fascinating, and frightening, and really sad for our country i mean, im you know, ive been getting a lot of texts and hearing you all talking, thank you. Im fine my family brought me up really tough. This is absolutely nothing but i think for me, personally, but i am very concerned about this what this once again reveals about the president of the united states. Its strange the cdc says the 2016 17 flu season has come to an end. The illness picked up in december before peaking in february the flu vaccine was rated at about 42 effective. Uber hitting another milestone. The Ridesharing Service says its completed 5 billion rides worldwide as of late may the news coming on the heels of a string of setbacks for that company, leading to the recent resignation of its ceo thats the news update this hour melissa, back to you all right, thank you very much, sue herrera. Coach, microron, dion who dan all in the blitz next, oil is up for its seventh straight session, but set for s rsitwot first half since 1998. Halftime report is back in two. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. What in real time . Stomer insights from the data wait, our data center and our clouds cant connect . Michael, can we get this data to. . Look at me. Look at me. Look at me. You used to be the yes guy. What happened to that guy . Legacy technology can handcuff any company. But yes is here. So, youre saying we can cut delivery time . Yeah. With help from hpe, we can finally work the way we want to. With the right mix of hybrid it, everything computes. At johnsons we care about safety as much as you do. Thats why we meet or exceed 15 global regulations for baby products. And where standards differ, we always go with the toughest. Johnsons. Rnch time for our trader blitz. Coach initiated a buy rating with a 59 price target. Jim . Coach has been on a tear here, melissa. Its one of a handful of stocks that are not just retail, but theyre very fashion oriented, right . The other stocks like kate spade and ralph lauren are also up, but not as much as coach is. Clearly someone is saying out there that coach is going to outperform i think i may have said that kate spade, its getting acquired, but kors is another one. Clearly it looks like coach is going to outperform on a fashion basis. Ive got told you, i dont know if thats the case, but if you have an ax to grind and you think that coachs handbags are better than the competition, its in the stock, you can go ahead and buy it josh, what do you think of the handbags oh, my, i dont even know where to begin wait, did you just recommend a handbag . Very conditional. I said, if you have an axe grind and you think coach is you know im all toomey, right . Like, head to toe. Now i do. Micror microron, worst performing stock in the s p 500 today despite strong earnings. Its remarkable when you look at where it found buyers today, literally a millimeter above that 50 day. From 10 to 30 since last may if youre still long this name, and you want to be long it, that would be the level beneath which i would place a stop loss, about 29. 50 if it doesnt hold that level going into the weekend, and youre a shortterm trader, be shortterm everything about the report was great, but prices so the margins expanded dramatically, year over year, mel. Top line, bottom line, everything was impressive here, but people wanted out. So like josh says, im watching that support level at the 50day, as josh is i dont have an axe to grind either, jim. But im not in the name here d. R. Horton, upgraded to outperform at raymond james, a price target of 39. John well, i like the upgrade to 39, mel, by ray jay, these guys are up 26 yeartodate. The first time home builder really, which is kbh, is up double that, 52 so, that tells you about whos buying homes right now and whos really not, mel. But this has still got upside, i believe. Industrials, secondbest performing sector today. Erin is bullish. You were buying a couple weeks back i still like the industrials here strong growth sector going into the end of the year. Underpinning this are macrotrends, particularly, youre seeing Capital Equipment spending, which bottomed two quarters ago now inflecting nicely. Also, weve seen out of the q2 data, were also starting to see imports for Capital Equipment, also improving this is the time you want to be a buyer of industrials were also watching tesla in todays session. The shares are higher. This after ceo elon musk tweeted this morning, early, early, early this morning that they will have news on sunday skpe and specifically, this is a weekend were expecting the Second Quarter delivery numbers and via tweet, someone was urging elon musk to give us an update on the model 3. And thats when he said news on sunday skepticism abounds here. I dont think anybody on the desk owns p s it why not its been a big winner this year ill speak only from my perspective. You cant value this thing can you value amazon . No, but i dont own amazon, either can you catch a rainbow yes, with my unicorn pony forget about value. Its irrelevant. No offense nobody cares this is not what goes on with this stock one day, valuation will matter, and pray to god youre not in it that could be ten years from now. Whats actually happening here is that he has become extraordinarily adept at, i dont want to use the mword, but wrapping this market around his finger he knows exactly when he needs a new announcement not to say theyre not real announcements or theyre not meaningful, but he teases it out perfectly. Hes been doing this for years backs into the days where he lifted a garage, just enough so you could see the license plate of something this guy is a pro. Tough to fight with a pro. Dont fight against it, or youre not a buyer listen, one day, maybe, the skeptics will be wrong, for the civilians. I dont think they should be in this fight right now all right, we also want to pri bring your attention to blue apron. It opened the day at 10 a share, at the bottom end of its lowered range, close at 10, even and here we are, below the ipo the banks arent exactly fighting here to support this one, are they, mel maybe the fights too great i dont know maybe they cant press against that title can anyone make the that unique to me thats unique to you. More like red apron, am i right . Was that good . No. Were just going to move on. Next up, the traders with their second half playbook, the Halftime Report with better jokes, back after this le tradin so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade youre searching for something. Like the perfect deal. On the perfect hotel. So wouldnt it be perfect if there was a single site where you could find the right hotel for you at the best price . There is. Because tripadvisor now compares prices from over 200 booking sites. To save you up to 30 . On the hotel you want. Trust this birds words. Tripadvisor. The latest reviews. The lowest prices. By the way, one of those times in which the nasdaq surged in the first half of the year, that proceeded the bursting of the tech bubble in 1999. Just oh, thanks, mel these are averages. Sad trombone. Anyway, kensho likes tech overall. Dom chu is also looking the data shield to look inside the tech sector to see which names are likely to be the leaders youre finding a lot of exf. A. N. G. Names. Not f. A. N. G. , in other words exactly, not f. A. N. G. Names by the way, melissa, im very glad you put up that little clarification, because like you said, averages can be skewed by one observation, sometimes but lets take a look at this overall, because over the last 20 years, technology has been the single best performing sector in the s p 500, on average, for the second half of the year that performance is up nearly 5 for just those six months and its a pod traz three quarters of the time in that time span for 20 years so maybe that Technology Gain for the first half continues now, we know its f. A. N. G. Week, but i wanted to take a look at some of these stocks like you said, outside of the f. A. N. G. World, that have been doing great and could be doing better over the next six months, if history holds true. Check out some of these names. Because skyworks solution, yes, its a supplier closely tied to apple. But, still, skyworks on average for the past 20 years is up about 12 in the final six months its a positive trade 56 of the time intuit, positive 80 of the time, there. Qualcomm stock, 17 average gain for those six months, positive 55 of the time. And then net app shares up 21 on average for those six months, positive trade 65 of the time so, as we talk about historical averages, yes, they dont always tell you exactly whats going to happen, but traders tend to look for some seasonal trends in some of these types of names and theyre not all, melissa, f. A. N. G. Stocks. Back over to you dom, thank you. Dr. J, i feel like youve doubled in some of these nonf. A. N. G. Stocks. Sky works . Sky works and qualcomm, as well petes been in broadcom, a lot a nonf. A. N. G. Name, but certainly ti certainly tried pretty closely to apple lets talk second half books since were looking forward. Erin i like being long the Energy Sector and the banks you still want to pick up the tech sector when you get, you know, when you get a down trade, because i dont think that thats going away. But i would stay away from everything in the middle and really take this whats a down trade a correction i would like to buy down 5 on qs lower from here. So were halfway through it. So, mel, weve talked a little bit about retail in this sector weve talked about nike, weve talked about coach, i think there are winners in the retail sector, and you dont have to go diving in the Bargain Basement for them things like a tiffanys, by the way, which is on an upswing. If you want one that is a fallen angel and i think can get back to a premium multiple, Tractor Supply company they had a terrible Earnings Report last quarter. And that knocked them from the high teens bordering up on a 20 for a pricetoearnings multiple down to about 14 there still is tremendous growth in this name theyve got the whole western half of the u. S. That theyve got tremendous expansion opportunity. The peg ratio, which i referred to earlier, mel, its at 1. 02 on this name. How long have you been i feel like whenever i come on for scott, youre talking about Tractor Supply and the stock goes down and down and down. I actually havent bought it yet. I dont mean to be hypocritical here i first started talking about it before the prior Earnings Release, which was terrible. And its been in a down trend. Now is the time im going to start nibbling it. I think next week, ill be in this name and its a longterm hold crop prices are going up, too, which i dont know if it helps this not as much as you think. It isnt actually selling tractors its selling things like overalls and muck boots and things like that its more like the farmers wife going and getting chicken feed and stuff like that. The farmers wife, jim . Is that a problem i think josh goes in to buy his own overhauls. Right, josh . On f. A. N. G. Week, dude . Come on. Second half playbook . Its fantastic my second half play week looks remarkably similar to my first half play week my first half playbook. And one of the we did in january was a little controversial at the time. We under weighted u. S. Stocks which san athema to people overweighted overseas. We did not expect the positive stocks to show up as positively as they did. Well take them either way now mscia is better than the s p 500. You have drastically bigger outperformance in areas like asia, even japan is working. Emerging markets were not making a change here because even though thats done really well for us, if you look back over three, five and sevenyear period, there is still so much room for these things to catch up we dont know if they get all the way but its very powerful and were doing well as a result of it. Top of the hour is when power lunch starts trump may announce new tariffs on steel as we discussod the Halftime Report. Carlos gutierrez on whether were heading for a trade war. Plus illinois on the verge of becoming the first state with a junk rating. Were talking about the ripple effects. And elon musk teasing we should expect some news on the company this sunday. Ow lchight it mean perun starts at the top of the hour. Heres to breaking more glass ceilings. In golf and everywhere else. The kpmg womens pga championship. Chances are, the last time yoyou got robbed. An, i know i got a loan 20 years ago, and i got robbed. Thats why i started lendingtree the only place you can compare up to 5 real offers side by side, for free. Its like shopping for hotels online, but our average customer can save twenty thousand dollars. At lendingtree, you know youre getting the best deal. So take the power back and come to lendingtree. Com, because at lendingtree when banks compete, you win. Welcome back to the Halftime Report. Nike is not the only athletic stock in focus today doc is at the telestrator to explain. Lululemon i love following people that are right and get back into the same stock again. Thats the case in lululemon somebody a week ago and two weeks ago bought calls in lululemon for 3 and they sold them today for 9. 50 they didnt just take all that money and run. They got in here and bought almost 3,000 of the august 55 calls. So they went from the 50 strike in july, mel, out here to august 55 strike. Love that action thats the kind of trader i want to follow because, like i say, they just cashed in and now theyre sticking with it you heard what jay had to say about some of the athleisure and Athletic Shoe plays. These guys continue to work and maybe theres something going on here that drives them through 60 in the short term. All right, doc. Final trades, and a g biwarning, next on the Halftime Report. Wow. A reminder this fourth of july weekend not to be a dummy. A Consumer Watchdog Group giving their annual display of how dangerous fireworks can be on the National Mall in washington. Thats not a visual reminder, i dont know what it is. Markets are closing in about three hours. Before we get to final trades, want to follow up on your final trade on monday, i believe monday or tuesday which was cbi Chicago Bridge and iron. Up 6 right now. It ran from 19 to 23, mel it was still 22 yesterday. Today it collapses down to 20. 50 or Something Like that, like you say, down 6 , but got to be quick with these stocks that are moving like this. This one made a 50 move just in a threeday period one week still its up 44 , even with this down drop in todays session. Exactly time for the final trade of the week, final trade of the quarter. Final trade of the first half, josh brown ksu, i think, goes higher jim end fang week with a fang name google alphabet. Im not saying its going to turn around this afternoon but its gotten low enough where it generally beats most of the time this is a Good Opportunity at this price to buy it i thought you were going to say Tractor Supply fangtastcic. It was fang week here but the most Important Development was the hawkishness from global Central Banks outside of the u. S. And that is going to drive central bank convergeness on the Interest Rate differentials which will lead to the dollar weakening. My final trade so rates will go higher in the u. S. And around the world and the dollar will go lower exactly i think underpinning that, you have sectors like energy which will do better from a weak dollar Global Health care play nvo buying 46 calls in september i bought those stocks about 42 1 2 thank you for joiningous the Halftime Report. Power lunch starts right now im michelle carusocabrera. Heres whats on the menu. Closing out the books for the month, the quarter, the first half of the year the dow and the s p and nasdaq posting strong gains so far. What do you do now your second half playbook straight ahead plus, trump, trade and the big threat of tariffs, along with repeal now, replace later the latest plans on Americas Health care. And raising the minimum wage the number of states have done it more preparing to do it this coming weekend is it really working out the way many hoped it would . Power lunch starts right now
comparemela.com © 2020. All Rights Reserved.