Europe, the unwind could catch the markets by surprise. Mr. Diamond saying, quote, weve never had qe like this before weve never had unwind like this before when that happens of size and substance, stit could be a litte more disruptive than people think. We act like we know exactly whats going to happen and we dont. Steve liesman, i go to you first. What do you make of dimons comments jamies on the front lines there. Hes going to be part of the process of unwinding the Balance Sheet. And i think his words of caution should be taken seriously. I think two things, though i think the fed has kind of preempted these concerns, if you look at how theyre doing, Balance Sheet, theyve sort of put it on auto pilot, but they have a switch where they can turn it out if things turn out badly. I think what the fed wants to see is wants to see the market behave in this process and not be disrupted by the process. And i think theyll turn it off, if they do so jamies right to be cautious. Hes a guy whos going to and his bank are going to feel the effects of this. But i think the fed has this very slow rampup that allows the market to, yes and the only other thing i would say, ma scott, is that the market has been told about this repeatedly. Its reaction has been really benign joe, the chances that this gets ugly and rates get away from all of the Central Banks and the stock market pays the ultimate price whats the likelihood of that . If theres a surprise so the Federal Reserve has done a very good job in communicating the strategy whether you agree with the strategy or not, theyve been very transparent about it and telegrafd what they were going to do. If they were to surprise markets, and that possibility does exist, then you could see dislocations i think were taking this the wrong way. I think dimon is saying, i dont think were worried about the fed doing anything to surprise the market, the feds going to do what it does, but the Market Reaction could be a little different than people think. Those are two Different Things if the fed does what it intends to do, which is one more normalization of rates before the end of the year, and then begins to reduce the Balance Sheet in 2018, its already telegraphed to the market. The market should be prepared for that the one area of the market where you would have concern is the mbs market, nothing to do with equities thelsy ies themselves if the Federal Reserve get a little bit hotter, see asset prices rise a little bit more and come forth with a little bit more of an aggressive strategy, then i think you have to be concerned. Rick, this seems to be dimon saying, look, you can scale the summit, but that doesnt mean coming down the mountain is a walk in the park you could still fall you know, i think the best way to understand this is to actually look at what theyve done and what theyve accomplished i think thats a good place to start. And then to ask, if the Federal Reserve or the ecb or the bank of japan or the bank of england would have done it all again look at their Balance Sheets, look at their percentage of ownership in the Securities Markets outside of the fed, look at the ownership of other Central Banks and corporate securities and equities and etfs and after all of that, what did we end up with the last ten years . Okay did we get to the level of pricing they wanted . No did we get anywhere near the level of growth they wanted . No did the banks do okay . Yes, with an exclamation point they didnt have much help, though not much help at all. They got interest on reserves, they kept the cash, and the Federal Reserve now owns all the securities that are going to be for sale i dont know the big fiscal policy helped, though they were on the island all by themselves, right . They were on the island all by themselves listen, i hope it turns out well, but i think its naive for any other rationale other than the one jamie described. We have no idea, its the first mercury capsule and we dont know where its going to land. This is a sobering sort of view from dimon, in some respects, jim, we just dont know whats going to happen. Thats exactly right. And investors in the stock market need to be paying more attention than they are. Thats exactly right. And the key word he used is could. The markets could get caught by surprised by this. I think the markets have already digested that. Think about this they know were going to get probably one more rate hike this year, maybe two next year. That takes the fed funds rate to the if you had a modestly steep yield curve and 125 basis points between the fed funds rate and the tenyear, that would give you 3. 25, maybe even make it 3. 5 on the tenyear. Thats not going to stifle this economy. Thats what the moain point is and 2013, we touched 3 on the ten year, narcotics fl sthe mar out, but the world kept turning. And the last thing i want to point out is on inflation, joe, i think you alluded to this, you just dont have it, right . And its not so much wage inflation. Wage inflation, i think youve got a reverse phillips curve going on here. Because Commodity Prices are so low, because gasoline and Heating Oil Prices are so low, thats why workers arent demanding higher wages just a thought steve . I dont know where ricks been living the last ten years, i guess, chicago but almost certainly the fed would do it again. They feel like they would stabilize bond markets oh, sure, they would. In a crisis, they feel like they stabilized growth, brought down the Unemployment Rate at 1. 6 no productivity. They stabilized inflation not only that, rick and Balance Sheets taller than the Empire State Building guys, dont talk over each other. Its like a word salad one at a time. Steve, go. I thought i had the floor the fed feels like they had accomplished their goals with quantitative easing. Not only that, with europe followed the fed in 2015 japan in 2013. Europe followed in 2015. It is part of the arsenal now. And plus, theres an advantage they have here when you buy securities in a crisis, you have a big effect. When you sell them not in a crisis, theres a lesser effect. Jamie dimon may be right there may be a lot of uncertainty right now over this process. But we think that the idea that they would be reducing the Balance Sheet, not in a crisis, selling into liquid markets would have less an effect than the positive effects when we bought them. I think our point this is like thelma and louise Central Bank Style without the tbird i think, steph, were trying to figure out, a, are investors in this current stock market too come pla complacent, to the risks that could exist by virtue of not whats happening with the fed, but what rates could potentially good sure, theres risk. And this is such a new situation for everyone we dont know how its going to play out jamie dimon is pretty accurate in what hes saying. But the one thing identify hev over the last several years from the fed is that theyre data dependent. And theyre looking at the economy, theyre looking at the markets and at inflation and jobs and rates and i dont think that they are so quick to put the brakes on after they just spent many, many years trying to take the brakes off and stimulate growth look at disruption or maybe in certain sectors, okay, that happened over the last few weeks. Rates ticked up, right and everybody started selling, you know, certain areas of the market and piling into other areas. Thats okay whats wrong with that whats wrong with rotation do you think its really healthy to have maybe five or six stocks in the market and the s p 500 account to 60 of the yeartodate returns, like weve seen i dont think thats healthy i think rotation is very healthy. And the rotation that were seeing into the cyclicals suggests theres better global and that the market can embrace higher rates, not really superhigh rate, but gradual rates and you have a fed thats very controlled a to the moment. We dont know how its going to turn out, but at least theyre not completely hawkish and theyre going to theyre really at these dire straits i would agree with that rotation is a healthy thing for the market i think the real question here is liquidity im not suggesting its not a healthy thing for the market im simply pointing out it took not a humongous raise in rates for people to all of a sudden being looking at their portfolio saying, maybe i shouldnt be in this area, maybe i should be in the banks. Rates stofort of stopped there d people are all of a sudden buying tech back right, but a lot of the moves that people have made have been incorrect because things that sold off have come right back again. I think the issue and the concern is liquidity and are you in liquidtype instruments, because when these Central Banks take away the sea of liquidity thats been provided to the capital markets, you have a situation, potentially, where you have an absence of liquidity and i think thats a risk for the market place that just boils down to the individual investor. What do you own . Do you own something thats deeply a liquid. Know that now ahead of what could potentially be a liquidity crisis pete . Scott, whats done is done. I know rick would agree with me on this. We have to trade or invest within the markets that we are delivered, right so you go back, the financial crisis and all of the easing and everything thats going on but dont you have to anticipate, pete yeah . Dont you have to anticipate i know this is so overused, but where the puck is going, not where it was. Yes not what the ice looks like now, what its going to look like a year from now right its always youre always forward lacking. And i think when you look at the fed right now, they are going off of the data and they have been very transparent, as the rest of the panels all talked about. I think we have a fed that actually has a pretty decent handle on where and when they want to do some of this rate and all the tightening and all the things that everybody is expecting from the fed Going Forward at this point in time. But i think the interesting thing is, yes, scott, and thats why when we sit here and continually talk about low volatility in the market, can you be in . Should you be getting out of certain sectors as were going through the rotation, i think the healthy market has been rotating steadily throughout the last couple of years, from one sector to the next thats been very healthy for it. And thats why i think you still need to protect, though. You protect when you can you dont wait for the storms to come jamies saying, this could happen this could be a storm. Well, youve got to prepare for those kind of storms and thats why you protect your portfolio. I think another thing to think about here is the market i think this is the point youre making, scott the market is being very come pla complacent and benign about the risks that may come. Thats a fair point. But i think what the market may also be doing, i certainly am, is looking at these rate hikes as a healthy thing something that weve got to think about how long this expansion is, seven years. At some point, i think tony dwyer was on two weeks ago and he said some time in 2019, you should be looking at a recession. When that happens, you want the fed to be able to cut Interest Rates far enough that it doesnt have to embark upon quantitative easing again, but if it did, having a lower Balance Sheet will help them do that the point im driving at is i think the market wants the fed to have some ammo in its quiver when a recession does happen i think maybe people think that the feds going to land the plane just perfectly and maybe it doesnt happen that way listen, im sure ricks going to yell at me for this there are a lot of people talking about a summer rally, stocks are going to go up to, you know, 2,800 next year. Thats a dwyer target. Yep not taking into consideration a crash by the fed that the plane doesnt come in perfectly. Look, ricks going to yell at me for this and its fine. I think the fed did a very good job over the last eight years. I really did they pulled the fat out of the fire when things were really going foor poorly and they havent crashed the plane after many potential red wi headwinds of raising sbrrinteret rates. Theyve only started you can make the argument we were talking about that first rate hike for how long it was torturous we were tortured by it and they pulled back last year they thought they were going to raise last year four times and they only did, what, once . Thats a good point the point of it is that theyre looking at the data realtime and theyve made it very clear that thats what theyre doing. Im not saying theyre going to be perfect they were wrong before. I agree but theyre not going to go really and push and put the pedal to the metal steve i want to make two points one is to add to stephanies idea the fed is going to be data dependent and also going to be market dependent if this process ends up going badly, wias jamie suggested it could, i think the fed will pull back and reconsider the idea of Balance Sheet reduction. The second thing, i think it was joe who talked about drying up liquidity. Lets remember, europe and japan, theyre talking or thinking about possibly stopping this but theres a sea of liquidity from that. The fed is still going end to up with a lower with a lower Balance Sheet, but still a very large Balance Sheet. If you got 2 feet of water in the basement and you bring it down to a foot, theres still a lot of liquidity in the basement you still need to call in the folks at servepro. Good to have you on. Were watchi ining the markets today. Stocks are well off their lows if you were just tuning in right now, you missed a lot of the action in the last hour. After taking a sharp move down after donald trump jr. Released email exchanges he had with a person promising damaging information about hillary clinton, stocks have come almost all the way back dows only down now five points. Were down triple digits our john harwood there with the very latest there. What a story this is in and of itself, john, but certainly the Market Reaction weve watched in the last 45 minutes, too well, its interesting, and who knows what the market is reacting to or whether there was an initial shock and then people thought about it and said, well, maybe this isnt that big a deal but as a political matter and an investigative matter for the Senate Committees and investigative committees, this is a very big deal because it confirms exactly what the Trump White House has said did not happen they talked about no indication of collusion with the russian government well, in this email set of email exchanges, donald trump was told explicitly that the information that the lawyer was going to be giving him was part of the russia governments attempt to help donald trump further, another of the emails described natalia ves l in its cayya as the russian government attorney and donald trump said, if this is what it sounds like, i love it you had the eagerness of Donald Trumps jr. Part to accept the information. He roped in Paul Manafort and jared kushner, and it was described as coming from the russian government donald trump and donald trump jr. In 2016 ridiculed that idea. Said theres no evidence of it heres some evidence john harwood, thanks so much. Theres the story in the stock market big, big turnaround as were coming on the air. Dow is only down 9 i say, only down, because it was down 100 points in the last 30 or 40 minutes. Heres what else is coming up on the Halftime Report. Deutsche bank downplays apples next iphone and says expectations for the tech giant arent too high. Our traders take on the stock in our call of the day. Plus, its day two of the Quarterly Report the big wins and loss from our desk in the Second Quarter the Halftime Report with ott pn a t tde iscwaerndherarss back in two minutes. Welcome back now to the two biggest stock stories of the day snap falling below its 17 ipo price and blue apron simply falling like a kitchen knife pete, what do you make of these moves today . We can take snap first, which, by the way, the lead underwriter, Morgan Stanley, downgrades today what does that tell you . Yeah, well, its pretty interesting. I mean, you know, we talked about this the day of the ipo, though, scott. We sat on the set and talked about, when you go out as an ipo and youre already beginning the deceleration process, thats an issue. I actually had a piece of this stock at 17 or wherever the ipo price was. And suddenly we got that big lurch forward. Now, i didnt get the full amount, but at the same time, anytime you go up against incredible competition and youre already decelerating, thats a problem whether its blue apron or you look over at snap. I mean, snap is going headtohead with facebook and we all knew that going into this whole thing and suddenly, we see this stock start to move to the downside. Its understandable. I think theres further downside i actually think we see single digits, at some point. We havent even had, jimmy, the lockup expiration yet. Right thats coming next month, right . Honestly, im not in the stock can you get in front of that . No. And look, you have some other problems, too, including the valuation combined with user growth which just isnt meeting what the expectations were if you want to have the valuation that you had immediately after ty po, you have to have the user growth you can see it, theyre starting to flatten off thats just not where youre going to support this stock. Part of the note today says the ad product is not evolving or improving as quickly as we expected instagram competition is also increasing duh i think weve talked about this they missed the quarter right out of the gate. Thats all you need to know. When any company does that, you sell so thats the point that Ross Levenson made right on this program. You break price at 17 and have another wave of selling. This is in addition to all the competition fears that people have, the lockup, like you guys were just talking about. So theres no reason to get in front of this and be a hero. I think you wait until the lockup and see where the dust settles. And then i think it could get interesting if you pull back enough but when you miss the quarter right out of the gate, you are in the penalty box for a long time you need to have a good quarter at some point in the future facebook came out of the gates and it finally had that quarter they were growing facebook had the messy ipo. Yes, they weregrowing their user count that story may have started differently had the ipo gone smooth it might have, but you still, once they reported that solid quarter, thats when it got its footing and it began to really accelerate higher. I think what snap, first of all, its instagram dominance more than anything else theyre getting crushed by instagram. And you need to see a quarter that provides visibility and growth and profits yep how about this blue apron thing, too . Ugly. I think someone put a 2 price target on it today at sell pick your descriptor. I cant believe they got the deal done with all of this going on with amazon and whole foods the fact that they were able to get it done with all the uncertainty about whats the end market, whats the competition, and you have this big behemoth thats just getting into their space. So, i thats exactly right. This has the feel look, everybodys going to see their own patterns, but this has the feel of groupon, which came out of the gates, hit the ground hard, but then competition there was no barrier to competition. I think, unfortunately, its the same thing with blue apron thats what were talking about here lets talk about apple. Street expectations for that company may be too high. And next years super cycle is more likely to be just a cycle, says Deutsche Bank thats our call of the day today. The analyst is sherri subscribensubscribkribner and joins us from Deutsche Bank. Welcome, joining us on the phone. You say first line of your note, we believe expectations are too high and we believe investors will be disappointed by iphones growth in fiscal year 18 and 19. Why so well, if you look at the install base of apple and the potential for apple to grow in fiscal 18, basically, we think the number for ifophone use in fiscal 18 is somewhere around 230 million units. If you look back to the best cycle that apple has ever had, the iphone 3 cycle about six years ago, thats about what they did in fiscal 16 the market is much more competitive than it was three years ago. If you look at china, theyre losing share in china, theres much more competition in china, and the install base includes a lot of these secondary and used phones and those are not phones that will potentially upgrade to the new phone when it comes out in fiscal 18 if you look at all the variables, its hard to see how they outgrow their best year, which was fiscal 18 it just doesnt seem to you that youre about right now for an upgrade cycle to take hold strongly, if the phone has the kind of advancements that people expect well, we are modeling that they have a good year in fiscal 18, right but again, its somewhere similar to the very good year they had in fiscal 15 you should have a refresh, roughry every 2. 7 years as phones, so were at three years now, so you will see that refresh. The market is baking in that well add an additional 13 million users to that install base, which seems optimistic, given the smartphone markets not growing, theyre losing share in the biggest markets that are china and the rest of the world. And the price points are very high you mentioned the new features on the phone those features are available on other phones, including snuamsug and some of the chinese phones already. Features arent really driving people to upgrade their phones anymore. People are upgrading their phones when they need a new phone. What do you make of these reports, i think we had one yesterday on our own website, cnbc. Com saying the new phone could be 1,200. Well, i mean, basic supply demand suggests if the price is that expensive, therell be less demand. Thatssome of the issues that people are expecting lots of good growth and that the asps will be even higher than they are in fiscal 18. And if the fiscal will be higher, theres going to be less buyers there are less people able to afford a 1,000 phone. Interesting, for certain. Appreciate your time today thank you sherri skribner with deutsch banks. What are we dwoigoing to do with this first of all, im long reality check i dont think so. One, its an opinion and shes entitled to it my opinion is that this is going to be a big cycle. Its an anniversary year, its an evennumbered year, which generally have been bigger having said that, lets assume that shes right for a second and assume its a normal cycle and not a super cycle. At 2 1 2 times next years earnings, and back out the cash that puts it more like 11 1 2 times next years earnings, i think you have protection on the downside with this name at that valuation, that if it does come in to be a punk cycle, youre not going to lose money on the stock. When can you not make that argument, though, jim . No matter what the bad news, theres always going to be somebody who says the valuation is low, its cheap youre right and youve been right for lets call it a year if you go back a year ago, i may not be getting the date exactly right. Think a year ago, it was 96 and today its 144. We have been making money in the stock. I think we will continue to. Pete . Yeah, you know, i think when you look at the u. S. , you talk about loyalty, right you talk about attention thats something that Katie Huberty at Morgan Stanley has pointed out. She not long ago, i think in the last month, raised her price target i think its 17 n7 foul fonowf these reasons. And when you talk about china right now, yes, theyve lost some share, but theres an upgrade cycle. People have either been pentup demand, waiting, or you may start to see this grow a little bit more, because unit sales have been on the rise. So, yes, losing, but youve got unit sales rising. So i think this is sympathetic that really could be bigger and probably impress and if that price is right and if people are still willing. We have to understand this, your plans have come down, your data has come in, you build this into a Monthly Payment, which most people have done already with the iphones, very few people buy it outright because of that, i think people would be willing to buy a 1,200 phone at some point, dont you price people out of the market i would have agreed with you have we not seen those data rates come down extremely fast over the last couple of years. Weve watched them come down, down, down, and so that phone price doesnt feel as painful for people, especially when theyre starting to do this whole monthly process. I would say at 1,200, they could still get away with it at this point. If a mercedes is like 45,000 and all of a sudden it becomes 55,000 and youre leasing it, the Monthly Payment goes way up and prices some of the people out of the market. But what if your insurance comes way down what if your margins side to the upside because youre selling a more expensive phone, you may not sell as many, but you have the Service Component which is much higher margin. Three times the size of salesforce. Com, by the way up next in the blitz, the trades on exxon, michael blitz, jcpenney and the Home Builders were back after this. If you could book a flight, then add a hotel, or car, or activity in one place and save, where would you go . Expedia gives you the world in your hand, so you can see more of it. Expedia. 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. Welcome back we have some breaking news now Federal Reserve governor lionel brownard giving the keynote speech at a conference being held at the Federal Reserve bank Steve Liesman live with the details. Fed gov. Saying if the economy firms and the labor market remains strong, it will be appropriate to commence Balance Sheet runoffs. She says once the Balance Sheet runoff begins, shell want to reassess the process normalization of the fed funds process is well underway, one of the criteria its hard to exactly what she means. She doesnt say when, but it sounds possible that she could support beginning the Balance Sheet runoff as soon as july most folks think its september, but also saying, hey, im going to assess the inflation process after the Balance Sheet runoff begins saying shes not too worried about t, right now, and could potentially support it a couple of other items, she says if the neutral rate remains at zero, where it remains right now, she says the fed doesnt have much work to do when it comes to raising the fed funds rate the idea being many people think its been 3 maybe she thinks it could end up being a little bit lower the global economy, she says, is experiencing synchronous growth, little until recently, how little bond yields have reacted to what the fed has been attending to do. But she says Foreign Central Bank policies could be turning the tide here, and could be could have been holding down u. S. Yields. And now theyve been talking about higher yields, those foreign Central Banks could be responsible for the recent rise weve had in global bond yields. She goes, the tide on yields has turned recently, with Foreign Central Bank discussion of withdrawing stimulus scott . So, in the wake of these comments and, you know, the warning from diamond that we discussed at the top of the show, makes tomorrow, yellen, the next couple of days, really, with the fed chair herself on the hill, steve. Yeah, really good point, scott. I think the next couple of days of testimony from fed chair yell rn going to be decisive as to whether or not the market starts to price in a july beginning to the Balance Sheet runoff, as well as that third rate hike this year, that you guys were all debating at the top of the hour here. Its about a 50 chance right now, and i think also, people ought to be prepared for the fed later this month to announce that Balance Sheet runoff, i think, its probably 50 chance, too, but i think its nearly a 100 chance by september keeping our eye on rates, the tenyear moving down to 1036 steve, thanks, appreciate it very much. Steve liesman outside the new york fed it is time now for the trader blitz. Barclays today upgrading exxonmobil to overweight joe, you get that one first. Exxonmobil down 10 yeartodate i like the combination, though, of rising nat gas prices, which were seeing above 3. We spoke to mark fisher about that last week oil prices generally stabilizing. Big Balance Sheet exxonmobil has. No problem with this energy trade. I think its a good one. All right, jimmy, j. K. Pen jf stepping down . Its clearly an amicable departure. Both are saying good things. But they report the timing of his departure coincide with demonstrated Sales Performance improvements we continue to report significantly improved topline improvements this quarter versus the Second Quarter thats why the stock is up today. So youre reading from the jcpenney press release what is that yes i was reading from the jcpenney press release its an email from the Public Relations person. Investor relations. If thats not objective, than theres a bigger problem at jcpenney than i want to deal with all right, mkm partners initiated michael kors as a sale stocks down almost 8 you own it yeah, i do, unfortunately and part of the problem has been innovation thats exactly what this analyst talks about. They have a price target of 26 a share. The stock has come down from like the mid40s, scott, to this level now. It feels like it might break a little bit more. Great cash flows, but the earnings projections do look like theyre decelerating. For those reasons, you can understand why they are negative on the stock im a bit negative on the stock myself, even though i own it im not sure how much longer im willing to own a stock that doesnt want to actually address the major issues in front of them about innovation of their product. Okay. Lets go to the Home Builders. Barclays downgrading a number of them lenna lennar,. The group is up 29 yeartodate earnings are actually only up 1 for next year. So rather than roll up their multiple and try to have to push up the target practices, its taking some profits, which i kind of get. He does like the product guys, like mohawk. I like Stanley Black and derek ive been recently adding to Stanley Black and decker, i think you get the home side of it, home depot and lowes exposure and the cyclical part of the economy and m a so if its weak, with especially under 140, i like it pete, yesterday you said, take a look at the Home Builders you noted the gains these stocks have had is it time to reassess well, theyve had incredible dp gains, stock and in the most recent past, you could see exactly what was going on with lennar and kbh, weve heard from some of these Home Builders we know whats going on in terms of inventories, as well. If youve wanted to trim some, weve had a great run. D. R. Horton had a nice week yesterday. I think theres reasons to still be in these names. But i could totally understand if somebody said, you know what, theyve had a great run, lets take some off the table or all off the table because of the fact theyve had this incredible move to the upside, so fast. And on toll, they went to underweight. Thats a straight up sell. Right, absolutely and thats the higher end when youre talking about toll. Sue herrera has the latest headlines for us scott, thank you so much. Heres whats happening at this hour, everyone the u. S. And qatar have signed an agreement samed at shoring up the shoring up the gulf terrorism efforts. It was signed this morning by secretary of state rex tillerson. The memorandum lays out a series of steps the two countries will take over the coming months and years to interrupt and disable terrorfinancing flows and intensify counterterrorism activities globally. Former mt. Gox ceo marcus pellas pleading not guilty in tokyo. He was charged with allegedly inflating his account by operating it Computer System unlawfully and embezzling about 3 million 7eleven celebrating july 11th by officering customers free slurpees until 7 00 p. M. Today. The giveaway marks the companys 90th birthday. It plans to give out about 9 million free slurpees. And its hot in a lot of parts of the country, so it might be nice to get a free slurpee thats it. Youre up to date. Now to tye with whats coming up on power lunch im going to go get a slurpee, right now excellent well serve then on power lunch. Its also National Cow Appreciation DayNational Cow Appreciation Day . Yeah, chickfila, free chicken. Free slurpees on power lunch. A closer look at the developing story, folks, on power lunch, getting back to more serious stuff, of donald trump jr. s preelection meeting with a russian lawyer the question we want to know, did he do anything legally wrong . Plus, is the retail destruction overdone well tell you the names that are being punished unfairly and could be worth buying right now. And is amazon getting too big for its own good could it be on the verge of a backlash for its growing size and fluent and the way it plays ball that and more ahead on power lunch. Free slurpees Halftime Report back after this. Think again. This is the new new york. We are building new airports all across the state. New roads and bridges. New mass transit. New business friendly environment. New lower taxes. And new University Partnerships to grow the businesses of tomorrow today. Learn more at esd. Ny. Gov i am a First Responder tor and iemergencies 24 hours a day, everyday of the year. My children and my family are on my mind when im working all the time. My neighbors are here, my friends and family live here, so its important for me to respond as quickly as possible and get the power back on. Its an amazing feeling turning those lights back on. Be informed about outages in your area. Sign up for outage alerts at pge. Com outagealerts. Together, were building a better california. Fedex up above 200. Fedex is performing incredibly well youre seeing investments in the ground space csx okay . I like the story. Numbers are going higher i think its easy to just ride winnebago here. All right earnings season already underway we are taking a look back now at some of the traders most memorable q2 calls joe, we start with you we heard it there, fedex shares up 12 taking out that 200 level yep, trading at 217 right now. This is an ia play. The Freight Management business is really being enhanced youre seeing a tremendous benefit to a company like fedex, on the usages of ai. Compliment that with what were seeing with ecommerce and amazon i think it continues to go higher im not changing the trajectory, up steph, well get to you in a moment with csx, but what about fedex. Stay with it i own it, i like it, ive been adding the last two weeks or so. They had a great quarter and i think it just got overlooked, actually they have a great story to tell in terms of tnt and synergies. But theyre also doing a good job on ground margins and improving those marks. And if they can get those up, your earnings power is substantially higher one of your big winners was csx, up 14. 5 since the middle of april yes, since Hunter Harrison was announced to be the new ceo. And hes just a proven winner, a proven restructuring guy from pacific. Yep and hes going to do the same thing at csx theres no question about it hes got a huge costcutting program, operating ratio to get down below 60 this is an earnings power story of 3 to 4 a share. Its still cheap i prefer union pacific, because its lagged, but i do like csx all right, pete, give me a read on the rails here you like stephanies play here ump, csx, which is better . Absolutely. Im also in ksu. I kind of run the whole thing here i like ksu for a variety of reasons. Csx, as soon as Hunter Harrison, that name comes up, you have to all of a sudden start looking at this even closer, right . And i think that was partially what really drew steph towards this because we all know the rails have actually started to move a little bit better than probably expected but i think when you look for who are the leaders of some of the toprun companies out there, his name would be one of them. Winnebago, your top winner up 29 since just the first part of june nice. Well, it had taken an earlier swoon. They had a series of very good quarters here. And the first one, it went down to the mid20s, now in the mid30s. I think youve got another 15 in the name here theyre really firing on all cylinders, of course, bad pun. But, of course, this is hypercyclical, right with labor picking up, you have to have a very strong labor market to get extra purchases of 200,000 rv sks and thats what youre seeing. We gave you a lot of the winners, not all the trades, worked out, at least not yet its a company thats kind of reinvented itself, cleaned up the Balance Sheet, some nice acquisitions over the last couple of year i really like this name. All right, symantec, down 7 . Sometimes this game is puzzling, because after that, may 10th, it peaked at 33. 22 on a great Earnings Report and reversed and has now gone lower. I would continue to hold the stock. Theyre going to report earnings the beginning of august. Lets see what they say on that Earnings Report and make a decision from there. Oil prices up on the day, falling 1 ining 15 this year a Goldman Sachs warning it could head below 40 a barrel. Well head to the trading pits for futures on crude and well find a bullish bet on te sck e veal next on the half. Ware of whats happening right now . Were facing 20 billion security events every day. Ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. The cnbc iq 100, up more than 20 for one year. Its an index tracking big Cap Companies that get most of their revenue from their own intellectual property. Todays leaders include Western Digital, microron, sony, target, and applied materials. For more, go to cnbc. Com iq100 all right. We are back on the Halftime Report. Pete najarian watching the options market, as always, for unusual activity what have you got today, pete . Taking a look at yelp, scott. Its not a name that comes up a lot for us, but it did come up today because somebody came out there and bought 5,000 of the july 30 calls for 50 cents, up to 55 cents. Pretty aggressive buying there its an Interesting Company. They have some earnings, theyre not huge but when you look at the Balance Sheet, theyve got 6 in cash but zero debt. So Interesting Company obviously, we all, you know, many people who travel a lot, like i do, you use yelp a lot in the different places youre going, just trying to investigate around so its interesting to see that this paper, this was a 43 stock, pulled back, and here it is trading around that 31 level. So somebody betting in the next couple of weeks, we get a rise up through there not a very expensive shot, but 5,000 of those trading today youre in i am in i like it. Im in these julys ill be in there probably up through expiration but fif it moves fast enough before that time, ill probably be hitting the exits as well very shortterm trade here crude seeing a big reversal today, up about 1. 75 . Jackie deangelis and the futures now traders have more on that. Good afternoon, jackie good afternoon, scott crude reversing its earlier losses, rising nearly 2 as the eia expects a smaller than expected rise in u. S. Production next year. Still, crude now trading just a few dollars above its 2017 lows. So bob, what else is sending oil higher today well, i think a couple of things in the face of the goldman note well talk about on the futures now show, as well as a couple of other things, youve bank of am talking about a stealthy demand increase that should happen toward the end of this year and more in next year. I am personally more in the golden camp. There was a Strategic Reserve draw of 2. 6 Million Barrels. A lower than expected draw is seasonal for the fourth of july. This is also some Short Covering prior to tomorrows numbers that are going to disappoint the longs. So many little data points. Lets talk about the goldman note, it was a warning that crude could fall below 40 a barrel if opec fails to have further inpact on the market or u. S. Production keeps rising is the trend going to be lower here i think the trend remains lower. If you look at the chart, you see an impressive series of lower highs and lower lows crude oil would have to get to 47 to break that. If we get to 42, its look out below. I am with goldman. I think that the saudis, who were supposed to be the adults in the room when it comes to the production curve, they produced more than 10 Million Barrels a day in june. Thats an increase from may. If they are the adults, how are they producing more than anybody else in opec thats what a lot of people have been wore rid about on the live show, we are joined by Michael Judas to break down his gold bullish call on gold and chip flory tells us what likely trade should watch now. Goldman sachs, jeff curry, over there, say oil could go below 40 he highlighted the need for shortdated oil versus longdated oil to remove the cantango he talks about the need for opec to further cut its production. Scott, it is really right now about the u. S. Shale and the dramatic increase we are seeing here how do you limit that increase in production here you have to eat up some of the supply the way you do that is weather or some form of a geopolitical shock. Absent that, oil stays in that range. Can you buy one of these Big Oil Stock sns. You can from the dividend on that note, you might want to think about some of the internationals it is worth the risk. Good point. I dont think oil is moving minkfully from the min meaningfully from the 45 level. You were talking about saudi arabia pumping above their limit. The rig count came down. There are all these puts and takes. I think we are staying right where we are i dont think we are going to 40 having said that, right where we are, you can get a 7 dividend yield at Royal Dutch Shell thats not a bad oneyear return if the stock stays constant. I have been buying all year every time i do, i get hit i do think there are Certain Company that is can make money at 4045 oil. Those are the bess in the breed, eog and concho chevron needs more like 50 i like the growth better than exxon. There are special situations you can own in oil that doesnt mean i havent gotten hurt. I think over the longterm, you can buy some quality names and a few years out, you will be glad you did. It has been very frustrating. I am trying to find special situations williams, some of the msps i am willing to bide my time a little bit thats 6 exposure in the s p 400. Carry some smaller namesment wait for a strong confluence of indicators i dont know if pete has any unusual activity seeing a very strong day in energy you are seeing strength today. Wait for something to really be telegraphed to get in. Not to put you on the spot. I dont know if you have looked there. Have you here is the problem if you want to get hurt, try to buy the bottom in any of these energies it has been absolute widowmaker of late. Thats been the problem. Everybody is trying to find the bottom nobody has been right up to now. The dividend yield is dangerous. With that thr3 or 4 or 7 divid yield, if it stays here. You can give up 7 in a single trading day. You dont want to buy necessarily for dividend you are looking for these quality names. You have to see a turn thats meaningful for any of us to feel positive about energy. You look a lot of other places for a sexy dividend it is a valid point remember, the price of oil is 45. It is not 55. We have to remember where we have been. Are we likely to go below 40 why is curry and the goldman people saysay we dont get every call right, obviously. Jim, wait a second. Oil has fallen back with the economy rebounding why cant it continue it is already priced in a. We havent made every great call in the world. We have to go, so hurry up. Youreor a me luckily to get 50 than 40 final trade is next im here at the Td Ameritrade trader offices. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at Td Ameritrade. Were back markets closed three hours ago time for final trade im going to stick with some technology for you, scott. We have had so much paper in Western Digital over the last couple of weeks. I own the stock already. I see buyers in there again rolling up im going to give you Western Digital. Joey . Im going to give you concho that will survive. Stephanie dow chemical. They got the dupont deal i think they are going to split into more than three and you have the best ceo running the company. Goldman sachs, the First Quarter trading fiasco was a one quarter thing. Now is the time to get in in advance of next weeks earnings. You dump on curry and the gang and pick the stock. Is it just me unbelievable. You are good s p is down five that does it for us. Thanks for watching. Power lunch starts right now jeff curry on the show tomorrow well get jim back on. Here is whats on the menu, russia agenda and emails. Are we finally at the Tipping Point for investors . Amazon is flying high. Traditional Retail Stocks are being decimated. Is all that fear and loathing being overdone could the retailers be your best moneymaking idea ahead . One analyzer says this stock is become amazon proof that name and more as power lunch starts right