Im optimistic now, look, weve only had about two dozen companies, 5 of the s p reporting, but nike, oracle, darden, for example, all had very good things to say. And collectively, these 23 so far have had very good earnings. So right now, 23 Companies Reporting earnings theyre up 12 thats a good number that continues the end of that earnings recession that started three quarters ago heres the important thing look at the revenues up 8. 5 that is a very important number, because now its not just costcutting or buybacks, people have been complaining about, now were really seeing revenues 90 exceeding the estimates for those 23 thats way, way above normal what about the other 95 okay, so far, the estimates are 2 lower than the start of the quarter. Thats important, because you know, scott, analysts normally lower their numbers as we go through the quarter. But the average is about 4 . So analysts arent lowering the numbers nearly as much thats important, because if they were wrong, the companies by now would have already told them to start lowering the numbers. And nobodys doing that. Thats a good sign third quarter, 43 of the analysts are increasing the estimates for the companies. Thats a little unusual. Thats the best number weve seen in five years again, normally, more numbers tend to come down than actually start to go up so, its early i dont want to make too much of it, but the signs are positive for the Second Quarter and the third quarter. Of course, well get jpmorgan and wells fargo on july 14th then well start to really see some significant numbers right now im encouraged bob, thanks to bobs point, pete, its hard to make a huge leap from simply nike and oracle. Everything in front of us. Quite a leap, yeah, id say still, this fixation on the agenda of the president and other things and the talk of the fed and the stress tests from last week. And take a look at the financials and the reaction that weve seen out of them, scott. Now, we had it in the first quarter. We saw jpmorgan, saw it in the Second Quarter, saw jpmorgan again leading it off are we going to see it again next week . I think we are i think the banks continue to be the place to be, despite the fact that theyve made this move i think theres still a lot of room higher. I think it really raises the question, steph, of if you do think that earnings are going to propel this market higher, lets just say stocks continue to go up, where do you want to be positioned in what seems to be a rotation or what was working before we had this move . I think a combination of both but i do think youll see value mean revert. And youve been starting to see that and i think that is based on better Global Growth also a weak dollar, which helps currency if there was one thing on nikes Conference Call that was abundantly clear is that the worst is that quarter was the worst on currency. And from here, it gets better. So that will help as the dollar continues to be kind of just sitting in this range, right thats good. Global growth, better rates, better dollar. I think that does bode well for earnings, overall. But i think the global rates story is what is going to drive the value trade. And if we get any bit of inflation, any bit at all, pricetobook is the leading factor that will rally and that is a value trade. All right so lets talk value, doc banks up 5 over the past week and a half like it tech, down about 1 over the past week and a half energy had a nice move before this rollover today, because of what oil is doing. But what about probably because i bought an energy stock what about this is value the place to be is this rotation real . I think the points that pete and steph just made about ccar and approvals for returning more money to shareholders for the banks was huge. For the banks i also think that the banks virtually across the board, after those big moves higher, many of this have, you know, 3 and 5 moves just in the past few days, i think those, judge, were shored up underneath the market with a put. In other words, big put buyers at the end of last week. Not necessarily betting on the downside, but wanting to lock in a little bit in case we see a bumpy road before we get through to what congress may do in the fall ive been saying it all along that i think well see a second half story to the, what congress eventually does, rather than just sit around twiddling their thumbs but all of that could be gravy, right all of that could be gravy if earnings come in where bob thinks that they may, given some of the early signs that weve gotten it absolutely, could. And thats why you dont want to be i mean, you know, yesterday or monday,rather, just a day in the rearview mirror, beyond the fourth of july we saw a huge surge into many of the stocks, again, those banking stocks i think a the little bit of the selloff youve seen in tech, i think its still a buying opportunity. You hold those stocks or throw that put underneath it so, joe, we already know that the majority of Fund Managers expect the market to go higher between now and the rest of the year the majority of my panelists here think the market will go higher between now and the end of the year. You can debate the level at which you think the strength will continue. But where do you want to be positioned if earnings are going to be what bob thinks they could be, and then who knows whats going to happen with the agenda . You could get parts of it, pieces here and there, that could be icing on the cake well, i think the question becomes, which market moves higher and in the Second Quarter, john talks about financials in the portfolio, to me, you want to have multisectors maybe utilities and energy, just my expectation, i dont think you want to carry those at anything other than an under put. But you want to have all the sectors in there in the Second Quarter, you had a great trade. That was in financials everyone was coming on the show. They were questioning the ability of the financials, talking about financials going the wrong way. And they really were pausing now you get to see car results, youll see buybacks will be increased 50 . Youll see dividends increased 20 . Okay, maybe that trade is over for q3 it depends what rates do, right . Thats the one variable you left out of all of the description you were just giving but i think what you were trying to do in 2017 is find these uh opportuniopportunitiese trades where youre overweighting a particular sector financials in q2 for q3, to me the obvious one stands to be technology, the Growth Technology names that were saying, youre talking about earnings, i cannot see earnings and technology being anything other than very strong. So i think in q3, theres going to be a moment, whether its whether youre nvidia, your chip names, where youre going to look at this selloff and say, okay, i want to do the same things i did with the banks in q2 go in there, overweight them for a trade, and i think youll be wrau rewarded so cramer, jim, suggested that the selloff in tech that weve seen, it may be a little early to jump back into some of these names. You agree with that . It may be a little bit early, but not a lot early. And look, i think not all of these names are the same so i think apple is a screaming buy right now. I think, maybe, amazon, you could wait a little bit longer but im very much onboard with what steph was saying about the rotation into value, which has been going on now for a slud mon month. Weve seen the russell 1000 value outperform it will russell growth by three Percentage Points i think what were all saying here, scott, is that the risk isnt that the economy is going to do poorly or that earnings are going to come in badly we would have seen preannouncements the risks are, geopolitical. Do we have some sort of issue with north korea do we get into a trade war we already have an issue with north korea. The market is not doing anything to reflect oil is down its really hot, what im saying all the posturing that weve been doing is what weve been doing for 20 years its a little bit more eloquent, a little bit more energetic. This feels like its hotter than its ever been. Its pretty hot but if you see a bullet actually fly over the Korean Peninsula thats a whole different story. Thats what im talking about. And if that happens, i think that the defensive play is going to be in the low p e, high, dividend, high cash Balance Sheet places like the value plays. By the way, not hoping for this, at all i hope we resolve that diplomatically but if Something Big like that were to happen, i would feel good about having a more defensive position judge, weve seen railroad loadings, whether its intermodal or just the straightout railroads, theyre up 3, 3. 5 yeartodate. But 25 straight weeks of gains thats telling you that theres a lot of demand out there. Because were not just filling trains up and just dumping them some place, right . I mean, this is demand whether its coal, some of which is making its way off our shores now again, or whether our goods and steel and all the rest a lot of that is happening right now. And the fact that youve had 25 weeks in a row of that, of gains, even if theyre only small gains, thats big, as far as telling you about demand. And thats why i think weve seen ak steel, nital, u. S. Steel, all seeing some love in the last month speaking of demand, that brings us to an oil and Energy Conversation you said you bought some energy . Well, last week then you got smacked around you werent here to hold my hand and keep me from doing it but every single time ive bought an energy stock this year and held it for more than two days, ive been smacked. Stop trading it i know i have to, joe i mean, im an addict. And i saw it last week again, you had just stepped out and i saw the paper in there, i said, i got to get on this i got on it, had a two to threeday run, and then, bang it was over. Today its down a 1. 60. You did see the first drop in the rig count in about nine months now, i dont think one data point makes a trend, not for a second but youve got to point it out that if oil is going higher, you need to see production in the u. S. Come off. You did see production plateau last week in the u. S if you saw a sustained downtrend in the rig count, that would get production off and that could move Prices Higher but until now, until then, well, i think were right where were going to be witbe, 45 i think people are overcomplicating energy. I dont think energy is going to be somewhere where its a significant source of opportunity in 2017. Whats going on right now in the Korean Peninsula, it is detrimental to demand and it will keep prices lower its the reason you see the market down 2 in oil today. And i think it goes back to, think about the first half of the Year Companies that had international and had brick exposure outperformed companies that had domestic sales exposure. The second half of the year, if we have any geopolitical risks, i think thats going to quickly shift back to companies that have domestic sales. Whos a buyer of stocks today . Or plan to be this week . And what do you im buying. Look, theres beaten down names in retail. I know were going to do that later, so we dont have to get into that now. But thats a space oldlean technology. I still think these Cisco Systems and intel, low earnings multiples, lots of cash generations are a great place to be i put most of these retails in the same place as energy. Everyones trying to pick a bottom and it continues to go to the downside the only way you can play in energy right now, im sure john was in options rather than stock. But at least he had a defined risk when he went into that trade. And thats the only way to trade energy right now i dont think you go in, you buy an exxonmobil. You buy options, you buy calls, you do whatever. Volatility is low. Gives you a great opportunity. And you have a defined risk on how f how much you can lose. Two years ago when energy sold off, it was the highyield market before the equity side was able to rebound. Its the same situation with what petes talking about right now with retail. Retail comprises 10 of the highyield market. You need to see healing and stabilization in the highyield market before the equity side of the retail names can move higher were not seeing it yet. The opposite energy is buy beneficiaries of lower old and thats Federal Express they had a very good quarter, too. But that stock has had quietly a nice run i like that story. I would buy that today it is still trading at a discount to u. P. S. , at a discount to the market, and many industrials. So if you want to play on Global Growth and ecommerce growth, thats your way. Maybe we should be talking about the transports more than we are, which are at a high. I think they have stealthily crept up the numbers that john are talking about is pretty important, that this isnt just something speculative, its actually supported by the economy. I think in that regard, look, we still see a lot of job growth. Wage gains arent as great as we would like to see them, but theyre positive meaning people have money to spend. They may not be spending it in the traditional way of brick and mortar stores, but theyre spending it and those goods need to be shipped. Thats good for the transports what if this whole move to value is nothing more than a head fake. Just like everyone got excited when that initial big tech, highgrowth, highmomentum tech started to sell off. Maybe this is just, everyones going to come back to work after the holiday. Job report this friday, people are going to trade some of these stocks obviously, i Pay Attention to this here are some of the numbers i said earlier that the last month, values outperformed by almost three Percentage Points if you look at the last year, and youve got to bear in mind that the first half of this year, growth wildly outperformed value. Its still up 9 Percentage Points almost on the yeartodate but if you look at a oneyear, a twoyear chart, theyre neck and neck why is that . Because 2016 was such a great outperformance of value. Why am i telling you this . Its actually sustained if you think about it its about 18 months that value has outperformed growth, even with this first half of the year beat down that growth gave value. Value is going to outperform only if the economy accelerates. And the Global Growth is actually there but the u. S. Growth is still suspect. And i think thats what were all kind of watching and waiting. And inflation is a very big driver for value stocks. So that is something to keep in mind on friday when you get the jobs report, the wage numbers are so important, and thats why we all kind of obsess about them and i love, judge, wherever we talk about stocks and we do the personification game, where we basically say, well, you know, theyre tired. No, theyre not, as far as tech stocks and things like that. Some of them, you saw a rotation, thats managers. Maybe the managers were tired, not the stocks my next question was going to be, dont you think that more money is going to pile right back into these stocks yes, i do, and i agree with jim. I think the standout among them is apple at this level however, i like many others in the space. I think facebook on a bit of a pullback that its seen. These arent getting big pullbacks. Apples got the most, 8 off the highs on high to low, on the recent high to low i think maybe it was 7 to 8 thats an opportunity, i think, in an apple. Im not seeing the same sort of opportunity outside of google. You know, it did have the slip, all the way back down to the 920s, i think, or Something Like that like that opportunity, as well you could get you can get oracle for 16. 7 times forward earnings, which just grew their Cloud Business in double digits. And it is so unloved still, to this day it got an upgrade today, fine, great. But a lot of people dont like it and dont believe it. Thats a transition to the growth, to the facebooks, to the Cloud Technology and if you believe that they can comput execute, that stock is still very cheap all right were just Getting Started heres what else is coming up on the Halftime Report. Retail at recessionlike prices thats what the analyst behind todays call of the day sees for six bigtime Retail Stocks but he believes those should be much higher. Well run through the list, next plus, after the shocker out of north korea, the successful launch of an intercontinental ballistic missile, is the u. S. About to beef up Missile Defense . And if so, which defense makers will be the companies that get those big contracts . The Halftime Report thcowi stt wapner and the traders is back in two munns at fidelity, trades are now just 4. 95. We cut the price of trades to give investors even more value. 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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. Consumer staples was up 6. 6 in the first half of the year that sector is up on average since 1990 for more kensho, go to cnbc. Com pro welcome back Retail Stocks trailing the major averages, falling about 8 this year, but one analyst sees some nearterm upside in a select few names in a sector he says that are trading at recessionary levels ike joins us live for our call of the day welcome back separating the treasure from the trash has to be difficult. How did you find the names that you did . Basically, what we looked at, clearly, its not news to ewe gu guys the groups underperform the market about 20 points yeartodate its trading near its recessionary levels relative to the market at the end of the day, when we look at our group in general, q1 was a disaster lets not i mean, we understand that. Q2s better. Traffics better, our channel checks are better. Companies, they have their feet underbeneath them. There are a lot of headwinds in q1 under weather tax refunds that caused a lot of volatility for those businesses but when we look at our group, the setup in the q2 is much more favorable. Basically, what does that mean to us . Cheap names where we think numbers are safe those are the names that we kind of put out this morning. And at the top of the list is pbh. We think thats still an inexpensive name thats growing the bottom line 15 . Taking market share, both dm domestically and internationally. And pbh is one of the best positions there. I wonder how much of this is trying to play a little momentum, as well. If you look at the performance of some of these names, you notice pbh is up 9 . Ralph is up 6. Hanes is up 9. Any truth to that . Absolutely. But thats kind of just starting right about now, the last couple of weeks if you go back further, those names have been underperformers, especially the hanes brands and the limiteds of the world. But hanes brands, 10, 11 times earnings, if they come in good cash flow business, market share leaders, stable category, those are names that i think people could flock back to if they do stoort s start to see some stabilization. Lets also be clear you point out, you know, early in your note, youre not in any way turning into a fundamental bull on the retail space no, i think theres too many highlevel concerns around ecommerce penetration, dmamazon what its doing to the retail space in general amazon is whether its auto parts, the prime wardrobe announcement two weeks ago had the off price sector selling off. People are worried and when are worried, theyre not going to just dive back into the retail space thats going to take more tame were not turning fullon bullish on the retail, buttic there are some opportunities when you look at it. I had an investor on my show today who just bought tjx. How come that names not on your list its not a name thats underperformed its not a name thats quote unquote cheap. It sold off on the prime wardrobe announcement as everyone kind of that announcement comes out and everyone says, branded apparel is going to be sold on amazon, who can can i shoot . Everyone looks at the department stores, but theyre trading at alltime low valuation i think thats why that got hit. I think tjx is very well positioned we dont view the prime wardrobe announcement as a real risk to price. I think that Business Model is pretty insulated so i think pull back in that space is interesting, both for tj and burlington, as well steph, do you want to counter that at all . No, i mean, i would say, i like pbh, too, but its up 25 yeartodate, its trading at 15 times towaforward estimates. But thats kind of in line with what you get with this kind of a name i understand the licensing story. I think, actually, tj, relatively to pbh, is underowned now pinpoint used to be well liked, well covered. And i think they have good spots within retail, especially hand, and theyre expanding home and they have europe exposure thats very low, as a percentage of total revenue. So i think theres opportunity there. The risk reward to me at tj is better that be at pbh, where people have been kind of hiding and have been rewarded for it. I dont disagree. Im fine with tjx being a bull story, as well i think with pbh, owning the brands is kind of becoming sexy again. When you look at amazon and with the threats are, the brands can sell into amazon and create growth through a new channel, whereas people will look at the announcements like that and theyll hit the Specialty Stores theyll hit the tjs, the footlockers, and so on, and so forth. But i look, we like it, too were onboard, as well whats the name, before i let you run, that you least like on your coverage list we have an underperform rating on fossil you know, we think the traditional fashion watch market is in a secular decline. We think the traditional watch is taking shelf space in watch categories its going to be tough sledding for them theyre not creating any cash flow, the earnings are getting wiped away its a tough story lowhanging fruit for the answer to that question. Stocks down 60 yeartodate. Oo ike, thanks, appreciate it pete, you have liked tjx yeah, absolutely. And i still do i dont happen to be in it right now. I think its a good time, if youre looking at one of these names you want to be in right now. I think when youre talking about that, youre absolutely talking more about the brand side of this thing than the marketing side i think if youre looking at companies right now, tiffany is a really interesting one, because they continue to perform well the asian markets, they have strong margins oh, by the way, theres a little bit of shake up going on, on the board. That always seems to be something you want to be seeing when youre looking at these type of things everybody said best buy was dead when amazon came at em. Best buy, trading at 15 times. Still has growth minnesota company, thaeyre doin everything right geek squad services. Got to love geek squad would you own a retail stock . Extraordinary selective. Is there a point havent got my face ripped off as bad in macys on the retail side as i have trying to dive into the crude oilrelated names. Whether theyre energy or but i do like macys i liked macys as a dive through 22 i like it still, here, but i didnt like the reaction today it was up to 24. 65, judge. That was a really nice pop out of macys. Give it all up like that, now its negative. All right, value guy, dont tell me, j penny, but another one. Do you theyre looking at value plays look, i think this sector has many segments to it, okay . So you can take the momentum plays and tiffany is a great name right now it had kind of a punk quarter, but it sailed through that thats a great momentum name if you want something that has value to it, that we havent talked about, at least recently, Tractor Supply company thats one that had a premium multiple, it had one bad quarter, now its at Bargain Basement price if you leave the name aside, thats something thats growing, it has western half of the u. S. Where it can triple its store count. Theyre laughing, because obviously the guy i call farmer g jim. Tractor supply no tractors or very small tractors you wouldnt own an apparel retailer, aside from jk you own nike. I own nike. This is where the value is i have three retail plays i have nike and tiffany, that are doing great momentum wise. Jcpenney, were not going to talk about it. Thats the deep value play i think these brand names, pbh is a good one, but when you get into the really narrow segments like a ralph lauren or who were we talking about last week, michael kors, then youve got to worry about fashion trends i dont wraant to have any parto that next up, oreilly auto parts, that stock is getting hammered today. That is straight ahead in the blitz. Plus, the brothers najarian are tracking unusual activity in the Options Market pete is going to hit a stock in the pharma space for us, today halftime is back in two minutes. Oil had one of its worst starts to a year, ever the commodities has been crushed, Oil Stocks Like exxonmobil and chevron plummeting the oil stock is the worst performer yeartodate tomorrow on the Halftime Report, an oil trader who moves markets and the stocks behind the commodity. Nbfs mark fisher is with us live alimnlonheorrow, oy t hfte report, noon eastern. Hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. We created the ripple the doughnut in a doughnut in a doughnut. Right away, it was a success. I mean, it really took off. What people dont know is that it all started with points from my chase ink card. I bought the ingredients, utensils, even custom donut cutters. Wow all with 80,000 points. What will you create with your points . Learn more about the ink business preferred card. We are back with the blitz take a look at shares of oreilly today they are getting hammered, weaker than expected comps this is the worst day for the stock ever, steph. Its down 20 . Yeah, comps 1. 7 . Comps were up, but 1. 7, but expectations were 3 to 5 most people thought the reason that the sales were soft was because of weather and tax delays now, this enters a new problem that its ecommerce. Its amazon, again so all of the stocks that have had any kind of threat whatsoever about amazon just take a huge rerating on the downside and i think its too hard to be cherry picking and bottom pigging this one its not just this one, if you put up auto zone or advanced auto, theyre both getting hammered, too. This has been a fear, they might be amazoned. They might be seeing a lot more competition. And now it seems like it might be more of a reality you have to see, but it seems like more likely doc, tesla has the weak deliveries, right, the other day . Now you have goldman cutting the price target to 180. Now you have guggenheim, they raised the price target to 430 but goldman was at 190 or right about there when they lowered it to 180, i believe. And thats theyve been missing this train for a long time guggenheim, on the other hand, want to bet that they can pull a rabbit out of the hat or a model 3 out of a hat, when the production rolls o out th s out, with judge i would bet with guggenheim on this one, not with i cant remember if you want to call this a bug bear debate, with as wide of a spread as you have here. O with one price target of 180 and the other 430. One group is really worried about a lowpriced tesla being out there at 35 grand, although most people will upgrade it from there versus the sixfigure teslas that most of the rest of the world is buying. Or maybe netflix is one keowns actually 155 on tesla. Thats even lore than goldman. All right, oracle is on the move today it got upgraded to overweight. We mentioned this earlier, pete. Yeah, these guys are done an amazing job in this whole transformation process of oracle we talked about it in microsoft and all kinds of different stocks their execution has been fantastic. Stephs in there i was in there for a trade as soon as earnings came out and the stock spiked, i got out. I did what really stood out, though, is when katz talked about hypergrowth, and thats exactly what there was an upgrade today talking about growth, talking about the transition of all of these folks on to the cloud. For all these reasons, i think the stock goes higher. But im waiting for an opportunity of any pullback. Jimmy, this joint venture of gm in china. China has been very good for gm its the second bestselling brand or company, rather, in china why is the stock down 1. 5 , then because it was up about 2 on monday, so its just giving a little bit of that back. But i dont think we give the stock much respect ive called it a rodney danger field stock. In the last year, the stock is up 27 on price. Add another 5 Percentage Points for dividend that way outstrips what the s p 500 is doing in that tile frame. Up about 17 you dont know exactly what day or month its going to outperform, but its poised for further gains at the valuation, just like its done in the last year so were talking about a reit monogrammed residential. They put themselves up, in the fall, they put themselves up this was known to the market that they were going to sell this is really a story about asset classes. Reits are not something very sexy to talk about on this show. Basically unchanged for the year a couple of weeks ago, we light e highlighted the apartment reits. They are up 10 yeartodate, versus a flat overall asset class. Best play is essex avalon trust. Sue herrera hasthe latest headlines for us indeed, i do. Here is what is happening at this hour. The pentagon says north korea used a missile not seen before during yesterdays test, during which the country successfully launched a longrange rocket capable of striking alaska officials also say that missile flew through busy air space and was a threat to sea traffic near japan. As tensions rise other north korea, President Trump is on his way to europe to attend the g20 summit he will first make a stop in poland to meet leaders there three people were injured after a small explosion at a gm Vehicle Assembly plant in detroit. The workers were believed to be conducting a maintenance operation when the incident occurred the injuries are nonlifethreatening and if you have had shingles, you may be at a higher risk for a stroke or a heart attack researchers in south korea analyzed the medical records of 46,000 patients and found those who had had shingles had a 40 increased risk for heart problems Pretty Amazing statistics. Thats the news update at this hour now tye has whats coming up on power lunch. Coming up, top of the hour on power, north korea, the g20, and trump meets putin. Could this week be the one that finally spooks the market, when the geopolitical issues come home to roost . Plus, the auto parts retailers hitting the skids today. Oreil oreilly, its worst day ever and one analyst still says the stock can double from here and is, quote, fake news whats driving oil prices down . Thats what one strategist suggests and hell make his case for 65 a barrel ahead that and much more on power lunch. Halftime will be back after this so, your new prescription does have a few side effects. Oh, like what . Youre gonna have dizziness, nausea, and sweaty eyelids. And in certain cases chronic flatulence. No. Sooooo gassy girl. So gassy. If youre boyz ii men, you make anything sound good. Its what you do. If you want to save fifteen percent or more on car insurance, you switch to geico. Its what you do. Next next if you could book a flight, then add a hotel, or car, or activity in one place and save, where would you go . Expedia. [brother] any last words . [boy] karma, danny. Karma [vo] progress is seizing the moment. Your summer moment awaits you, now that the summer of audi sales event is here. Audi will cover your first months lease payment on select models during the summer of audi sales event. More drama today in the case against Martin Shkreli meg terrell just coming out of the courthouse for us. To bring us up to date on the latest hi, meg. Reporter hey, scott, prosecutors late on monday had requested a gag order on Martin Shkreli and counsel for all sides in this trial, saying comments that shkreli makes inside the courthouse, outside the courthouse, and on social media could risk tainting the jury remember, it took 2 1 2 days to get this particular jury the judge this morning declining to issue that full gag order, instead reaching an agreement with shkreli and defense attorney broffman, that shkreli wont make comments about evidence or witnesses in the trial in or around the courthouse prosecutors brought up that he had been tweeting under another handle, essentially after he had been banned from twitter earlier this year. That account had been suspended as of this morning in another piece of news, prosecutors here also revealed this morning that several plea options had been on the table, leading up to the start of the trial, but broffman saying that shkreli refused to take any of those saying, quote, i would not plead guilty to something i did not do and were going to trial. That trial continues today were on the second witness of the day. The pace has picked up here at the courthouse and well bring you anymore news, scott, back to you. The najarian brothers have made their way to the telestrator, as usual, for some unusual options trade stocks what have you got . Take a look, ng transfer equity, ete. This one, not just one of those companies thats going after it, judge. Not the exploration but rather the moving around of the energy. They were scrambling around, buying 18 calls out in august. They had been in the 17 calls in july, rolled it out to august. I think in the 65 to 67 cent range that they were paying for those options. I scrambled in, bought them with him. I could probably hold at least two weeks, and hopefully this one by moving crude oil and gas is a better play pete, we were just with meg and her beat, obviously, is health care. And you have one in that space yeah, and we talk about this health care all the time, especially the performance of late, which has been great when we look at biotech and pharma names. Im looking at Teva Pharmaceutical that wasnt so great when you see this lower end you can see the trajectory since june what were seeing today is the august 30 puts being bought. Heres what im going to tell you. Im not in this trade, but ill tell you this. I think theyre buying this puts not because they think that stock is going to pull back, i think theyre buying it to protect against the position that was put on over the last couple of weeks. When i saw the volumes, there were days when we had volumes way past anything close to a threemonth normal so because of that, i think theyre buying protection, expecting this stock to go even higher if you were lucky to buy this thing around that 30 to 32 range, stock is going to go a little bit higher. We talk about protecting all the time this is exactly what were talking about, a protecting position just like with morgan stanley, with jpmorgan, with goldman, last week, on the financial side i think this is the same sort of thing that petes talking about. Gotcha, guys. Come on back this way. Now more to be that situation developing in north korea. The rogue nation launching what experts now believe was a successful test of an intercontinental ballistic missile. Morgan brennan has more on that and the Defense Companies that could be in the best positions to protect the u. S morgan hey, thats right so the pentagon just saying a few moments ago that u. S. Missile defenses are capable of defending against limited threats posed by north koreas nascent icbm capability. That statement coming on the heels of the norths successful test of twtwostage intercontinental ballistic missile. Thats a missile that flew 37 minutes, the longest yet, reaching an tult of 1,500 miles, the highest yet, and covering almost 580 miles so lots of questions still about north koreas ability uptotheto actually weaponize one of those missiles, but this is the surest sign yet that this is moving closer to its goal of being able to actually target the u. S. , most likely alaska or even higher. Right now, there are four main u. S. Missile systems that are in place. They are create a layered approach to Missile Defense for america. Theres only one system that can actually intercept an icbm thats the ground course defense that successfully shot down a mock icbm. Boeing is the prime contractor on that, but raytheon makes the kill vehicle aerojet makes the propulsion system. There are other programs that are deployed that can counter short and medium range missiles, as well. You have raytheons patriot which are both ground based and mobile and lockheeds aegis. But Analysts Expect more money to go toward Missile Defense in light of everything that is going on with north korea. Weve got a bipartisan bill that was introduced to boost the number of intercepters in the groundbased midcourse defense. That was recently introduced and right now, intercepters are deployed in two sites. Weve got ft. Greeley in alaska and Vandenberg Air force in california the two have 32 intercepters combined thal will jump to 44 by years end theres a lot a lot of talk abo third site being developed in the eastern u. S. All of this takes years to develop. Those intercepters that are being added by years end was green lit in 2013. Theres expected to be a lot more money that goes towards this type of defense but theres a long lead time to it, as well. Morgan, thanks. Morgan brennan at the wall its natural to look at these kind of stocks when you have news like weve had out of north korea. This is not just a today story these stocks have done incredibly well. All of them, since the election of donald trump, as president. And even before that, some of them but look at Earnings Growth of some of these companies. Ill give you lockheed martin. All of those things, those play into most everything there, judge. The fact that theyve traded at 22 times now, that might seem a little expensive relative to the past, but when you look at the Earnings Growth projected forward annually, at close to 6 , not so much. Boeings up 41 since the election lockheeds up 18 raytheon, 20 orbital, 29. Aerojet, 31. Harris, 13 and digital globe, 27. Which one do you like . General dynamics. Took nice gains and im sorry i did, because the stock continues to work. General dynamics is cheaper than the group. It has a 3 dividend yield and very strong Free Cash Flow but it will benefit just like all these other ones, as well. You have to pick which management you actually like the best, the financials you have the most confidence in and i do with this one, so uhl continue to like it. Its not just the domestic story, its an international story. When youre talking about nato countries being criticized by the president for not spending 2 of its gdp, youre going to see increased spending lobally internationally. So who has that International Exposure one of the reasons that Northrup Grummond continues to move higher, it has the b2 Stealth Bomber that now will be recreated to be the b21, which im sure you know about. So it hits on both the domestic and International Markets and its able to increase its revenue and margins. Its a fantastic name. All right the dow moving into positive territory. Oil prices, though, not to so m. Theyre falling. It ends the longest winning streak in over five years. The trades when the Halftime Report comes back [brother] any last words . [boy] karma, danny. Karma [vo] progress is seizing the moment. Your summer moment awaits you, now that the summer of audi sales event is here. Audi will cover your first months lease payment on select models during the summer of audi sales event. You myour joints. Thing for your heart. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. All right. Welcome back to halftime. Now a check on crude to do that, we go to jackie deangelis. Hey, jackie. Good afternoon to you, scott. Crude tumbling 3. 5 as the u. S. Dollar is strengthening after oils longest streak of gains over five years. What is driving the move the fact that russia says it will not support any changes to the current agreement that curbs production and other producers are hoping to deepen the cuts. You mentioned the dollar, also not helping. Also, it looks like todays rally or the recent rallys going unwound in a single day. What that tells me is that some of the longs, buyers we have seen recently hoping that we were going to get additional budget cuts and saudi aramco said to lower prices for consumers in asia come august. That indicates that the production scheme is not helping prices. Production in june for opec up, jeff are you shorting here . No, im not look at the last eight days. Eight days we saw all the shorts newly established to 42 they have the faces ripped off or the claws plucked but right now we have seen a move back to 45. We are still range bound 42 to 47. No mans land of the rebalancing act continues to play out and you have to be focused on the feds minutes today. It is important to understand what janet yellen and company may say and move the dollar. As we know the dollar started out in 2017 above 102 and now at 96 and the u. S. Dollar index and take away the fact we are not moving anywhere unless yellen wants us to. All right thanks, guys check out the live show tomorrow 1 00 p. M. Eastern time on futures now. Cnbc. Com thank you so much lets stay with commodities steph . Natal its a like it. You do, as well good i like the story because its kind of like a special situation. It is a restructuring story. They have a big part of the business in europe where they are restructuring and they have Growth Initiatives there bought an italian steel producer giving them size, scale and pricing capability and Free Cash Flow is strong 5 billion and using that to pay down debt and the Balance Sheet is an improvement, as well not just a steel play but a europe play i like. What about the other play you made ebay. I have been in and out of it over the years and a restructuring story. They have Growth Initiatives to fix marketplace and should see an acceleration in the second part of the year stub hub business can be monetized and then in july spun out paypal and buy back more stock and see a step up in that, as well. The valuation is attractive. Up year to date 6. 5 . Well do final trades when we come back. This is where i trade andrs. Manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. We close it up in three hours. Final trades, though pete john talked about the rails earlier. Unp, ksu and nothing but buyers over four or five months and gone out a decent amount of time so i continue to think options buyers . Yes as the stocks hit highs, they continue to go higher. People buying calls. Yep. Doc taylor. This is the former mens wear house. I guarantee you will like the way you look, judge. Very smooth. I guarantee i need the anyway vastly undervalued longterm bullish play somebody steps in buying 10,000 of the january calls today. Jimmy scott, we talked arlier, th high growth names that sold of and time to get back in . You can pick ones out there and one i like is qorvo. It will pick up with the iphone 8 and off about 15 in the last month. Thats overdoing it. Thats ten times forward earnings a peg ratio below 1. Thats the tale that the selloff is way overdone on the name. Steph u. S. Banks a lot but i like deutsche banc. Doesnt get love now, you might not believe book but even so thats why it doesnt get a lot of love. Im willing after the restructuring, im a big sucker for restructuring stories. Balance sheet looks good. Joe going back to the retail conversation before, i still hold costco. If theres a beatdown name to own, thats the one for me dunkin, as well. Ike mentioned hanes brands thats a name thats finally having a multiyear turn it was struggling significantly coming around as youre seeing lower cotton prices and millennials, thats the favorite brand. Hanes brand. What are your expectations for the jobs report on friday, pete sort of, what that could do for the narrative about where rates will go and then where those banks will go and there f theres real staying power i expect the number to be strong i think it exceeds the estimates presently. Thats why im bullish in the market. I think good numbers friday help the market but i think the fed may be just about done here, judge. Ill be surprised with more moves. We have 4. 3 unemployment and close to full employment. Im almost looking at the relationship of rates and trades that you all you need wages. All right, guys good stuff. Thank you. See you back tomorrow all of you, as well. Power starts now. North korea ramping up President Trump is angry and will china finally step up and help solve the korean crisis your money shaking it off. Are earnings Strong Enough to shrug off increased tension with pyongyang . Holy breakdown, a part of the retail world that is absolutely blowing a gasket today. So turn the key, crank it up, power lunch starts right now and welcome to power lunch. The major averages cutting the losses trying to stage a turn around