Its the naz dock that certainly seems to be the worst today. Joining us for the hour to discuss all of it is josh brown. Joe, john, and pete, we begin today though with a man whose memo was the talk of wall street recently a memo warning investors that the level of risk in the market may be getting dangerously high. Howard marks is the cochairman, hes with us live today at post nine and we are very happy, sir, to welcome you to our program today, thanks for being here thank you, scott, glad to be here this was the talk of wall street we spent a lot of time on our program diving into what you wrote. What prompted you to do this now . I just accumulate things all the time i read about this, i read about that, hear about that, come across this fact, and eventually, they accrue until theres enough to make to have meaning you know, its funny, the stock guys say oh, you know, everything looks good. This can continue. Its the credit guys who raise the flags. Im wondering whats going on with this that out today, modestly risk off in the overall positioning. Jeffrey who was on our program the other day. Says look, i think the s p could, or stocks could fall 3 between now and december, and then you well, i think that the, the stock guys as you described them, are directly connect ed i mean the credit guys are directly connected to Interest Rates. And theyre very sensitive to Interest Rates the relationship between Interest Rates and stocks is more indirect and so i can see why credit guys would care more if people look at a market, okay, the dow is 22,000 alltime high, bonds are potentially in a bubble, i mean, that seems to be the conventional thought on wall street these days. Which cracks first do you think . I think probably bonds first. But i have very little faith in that opinion why do you say that well, you never know. I mean, you know, we in our business, we have a little idea of what will happen. But we have no idea when itll happen and so, its very hard to say the order in which things will take place but when you write, quote, the uncertainties are unusual in terms of number and scale, asset prices are high across the board, are you zeroing in more on equities or are you zeroing more in on credit . I meant across the board. Across the board, all the way. Theres nothing thats cheap today. You know, theres nothing that cries out and says, buy me it may be fairly priced. Stock market, bond market, it may be rich, nobody argues that its cheap and by the way, ive heard people arguing on your show and others in response to the memo, its overpriced. No, its not overpriced. Thats what makes a market. I didnt hear anybody say its underpriced right and if thats true, shouldnt you do something about that . You had to know this was going to sort of set people off and talk about kind of where we are, right i mean, you sort of have this gravs to about you and these memos that you write its interesting, people read it and they said oh my god howard marks says its time for you to get out. First of all, theres two things i dont say. Get out, and its time other than that, that i was right. Because nowhere does it say get out and i certainly dont claim to say that this is time all im saying is that prices are elevated, perspectively turns out low, risks are high, people are engaging in risky behavior now nobody agrees with any of the four of those. And if not, then it seems to me that this is a time for increased caution. Investing is not black and white. And its not in or out its maybe in, but maybe a little less than used to be in or maybe in as much as you used to be in, but with less risky securities, thats all im saying the bull case is sort of predicated on, and when people are asked, you know, why should you stay invested, lets just say in stocks, for example, hey, earnings are getting better, the economy is getting much better, stocks, relative to where bond yields are, are cheap. They use the cheap word in that context. And then they say look at what the u. S. Market has done relative to the rest of the developed world and the emerging markets. Its underperformed and underperformed by many cases dramatically so theres going to be a catch up trade there as well why should i worry today well, first of all, a specific response, emerging markets. They have done better than the u. S. Market lately, but that was a catchup so, you know, you could always find a market that has done better than yourself, and say we should be up like that one but you cant look at those relative moves, you have to look at valuations. The valuations, pe ratios, are not low. They are in the high part of history. Not the highest, and i dont say its a bubble, and i dont say its a top and i dont say its the worst thing i ever saw, but its higher than usual and lee was here the other day yep, on our program if you take, if you take their estimate of s and p earnings, apply a 17 multiple, you get to where we are today. Well, 17 is higher than usual. And so it just seems to me that that is not a position that warrants a full ration of risk you said in april that credit markets were not in a bubble you still believe that today you know, people talk about the bond bubble, theres a gigantic bubble in bonds. Thats right. And i hope thats what i said. People would ask me, are we in a high yield bubble and i would say no, were in a bond bubble and the bonds, bonds yield the least they ever have so, thats a source of exposure. And, you know, bonds appreciate when Interest Rates go down. Are they going to go down . Doubtful bonds depreciate when Interest Rates go up, are they going to go up . Maybe so, and theres a lot of room and by the way the fed has said, were going to take rates up so do you want to bet against the fed . Historically, its not a smart thing to do. Right you heard the conversation on our program in, you know, the moments after your memo dropped and went public right what do you make of the conversation that was had about what you tried too get across to people well first of all, there was a funny experience, i was sitting in columbia, and watching your show, people watching people talk about me. Which im not used to. And of course, there was thank god there was dangerous of opinion. And, you know, there was one guy, hes not here today, and one guy said a couple of things we fired him. Hes not here anymore. I still havent gotten my head around, one guy said, the market is expensive, but im holding until there are a couple of bad days. I havent figured out what that means yet. And he also said, i have stocks that have exceeded my sell point, but im not selling and i havent figured out what that means what is a sell point so there was there was some real difference of opinion there was one guy, john right, john. I liked what he said. He wanted to copy the memo and send it out to his friends he asked my permission but, you know, there was a lot of give and take over the memo josh is here josh has given me permission to say i disagree and by the way, ive read every one of your memos for eight years. I read the most important thing, so you taught me most what have i know good. But apparently, but apparently not thoroughly because, because ill take it. Because josh said, there is no better or worse time for caution. There is no better or worse time that we can disearn for caution reserves, portfolios i do believe so a little bit of a nuance i want to hear your response to this, please there is no better time that can be disearned and advanced by 99 of investors on a reliable basis. Okay. And this is not to take away from anyones track record, who has been able to do this, but as you write in the memo, the timing of it might make it so even if you can see an advance, it ends up not helping you and look, we talk about cape ratio, weve sold an above average cape for most of the last 25 years. 95 of the time, and what is what should earnings be, given the way Corporate America works now . Were not smelting copper. Were developing software and then running off infinite copies foot in cost what should the price earnings ratio be for todays s p not for the s p of the 60s and 70s. Those are minor differences. Theyre not huge differences right but, you know, my point was that when you look and you see high stock valuations, low vix of all time, low Interest Rates, low bond yields of all time, emerging market bonds yielding less than high yield bonds, record as fundraising for private equity for the soft bank fund sure. You know, accept bitcoin. When you see all of these things together, it tells me we are in a risktolerant market buffett says when other people are greedy, we should be afraid, when other people are afraid, we should be greedy i think people are balanced greedy today can we remain for two decades on end is it impossible and maybe only a few years in anythings possible anybody who says anythings impossible in this will business is nutty, but, its unlikely and you know, there are only two things a manager can do for his clients, which is try to get them to have a better better representation than the things that will do well and less representation things in the things that will doo do poorly totally agree more risk at the right time and less risk at the right time. And what youre doing is youre giving up on the ladder. At oak tree, some of the greatest things weve done for our clients over the years have been to get them to cut risk at the right time and aump risk at the right time now, maybe youre saying were in the 1 and thats a nice compliment, i accept that. You dont strive to be, but youve become. I know you strive to be in the top 40 and let everyone else sort themselves out over time. I understand that and i really respect it so but, you know, i think its worth trying. And the point is that, you know, its not easy in this business not everybody can do it. But i think its worth trying to figure out, is this a time i see things as cheap, fair, rich. And when theyre cheap you should have a lot of risk and when theyre rich, you should have little risk and in between, in between can i ask you what you see, i mean here we are, dows down 125 today, its one day. That doesnt make a whole story, but there are concerns about geopolitics and north korea, what do you see today as the biggest risk to investors . Is it a trump agenda that doesnt happen is it something extoe sensual, what is it youre looking for factors. I think the biggest risk is the fact that the prices are high and investors are euphoric not euphoric, but optimistic euphoric would take us into a far different place. No, in 2000, the s p was 30 earnings today its only 23 but, you know, these individual things are not what moves the market it may be the spark for a move, but its not the important thing. If everything that was going on in the world today exactly as it is, but the pe ratio were 14 instead of 23, then i would think we were in safe territory. Theres always things to worry about, but their import is dependent on the level that securities are trading at, and the emotion that is embodied in prices howard, if the story doesnt change, right now youd probably be looking for opportunity in the market, right . If we do start to see a significant slide, if were talking about jeffrey talking about 3 or more, it wasnt 3 , it was 3 or more of a pullback, then that would give you the opportunity to look for, if the story hasnt changed, but its just being sold off aggressively because of panic, thats what you were talking about the blood in the streets, that creates the opportunity. Absolutely. Absolutely its not whats going on its how its priced right and you know, in the book that josh was kind enough to plug, the most important thing the most important book by the way. Chapter three says the most important thing is Intrinsic Value and chapter four says the most important thing is the relationship between price and value. When were getting value cheap, we should be aggressive, when were getting value expensive, we should are investors irrationally bidding up you talk about the large tech stocks and the market at this point has coalesced around this near term future where four companies essentially run the world. And i agree with you, probably things dont turn out that way, but are investors irrationally bidding up the highest quality, best technology companies, if they think that these companies are enabling their jobs to be taken away and so they say, maybe the only way i have a future is to invest in the very company thats going to either take my job, displace by small business, et cetera isnt there some rationality i should say before you answer, one of the, you know, poster child, if you will, of part of that group, even though its not a member of the fangs reports its earnings after the bell today and this is one of those stocks that has been bid howards trading that one to the earnings. You do call those stocks the fangs, super stocks. And i dont know enough about any one of them to comment on a specifically what i am responding to is that at several times in my career, which spans almost 50 years. Ive seen one group of stocks anoinlted at super stocks. That happens towards the end. Right the companies are so great that nothing can go wrong. And because theyre so great, theres no price to hide and they, they represent the future, and everybody else represents the past. And if you dont tone, you dont get it totally and everything eventually the key to understanding the markets is that everything, everything of value or truth eventually gets overdone. And the willingness of market to overdo what i call the grain of truth, and there is great truth in these companies, but the willingness of people to say, i love the fangs, theres no price too high those are so google at an 18 or 19 multiple on this coming full year 2017, were not quite there yet. Probably not that theres better or worse right and there is one thats a couple hundred times goog wl no earnings and no earnings and everybody turns to all of them and says, no price to hide. So, its im only talking about the atmospherics here, but thats more than anything else what moves me. I think theres anxiety in the i think when you see money going into vanguard, i dont think thats exuberant money, i think thats people saying i have no choice but to do this. Yes, but they are missing the risks theyre taking because when you go into an index fund or etf, youre putting money in on the expectation that there is some safety there. Right but if they turn around and they buy, for example, the fangs regardless of price, then thats a risk theres nobody sitting at the index funds saying, you know what, lets not buy that today, because its too expensive right. They have to buy it and any time people buy because they have to, then the worlds a dangerous place. Joe how would you talk about the world being a dangerous place, youre obviously a legendary credit investor, along those lines of last couple of years, investors have shun equities and replaced it with high yields does that view present itself dangerously where we are on the cycle right now . Well, i think that i think credit is expensive. High yield bonds are yielding the least they ever had. Now, largely because bonds in general are yielding the least they have ever yield, but you cant argue that high yield bonds are either today now, i want to say to you, joe, and to all the listeners that most people are not aware of the difference between bonds and stocks because when you have a bond, and you have and its from a creditworthy company, you have a contract, were going to give you 6 interest every year, and were going to give you money back in ten years. Thats a contractual return and if the credit is good, you can really depend on that, and thats a source of safety. There is no contract with stocks you know, with stocks, your entire return virtually, except for the little dimpbd, comes from what the market what the future cash flows. I would say from what the market wants to pay for it and by the way, the dimpbd is not contractual either the only contract on the dimpbd is youll get the same dividend as everybody else. They can cut it, raise it, keep it flat. So while it is true, that high yield bonds and bonds in general are high relative to history and fully priced relative to stocks, there is some safety in this contractual return that does not exist in the stock market. I did stocks for the first ten years of my life, and then, you know, in 78 i got a call from my boss. Theres a guy milking can in high california, can you figure out what that means . Thats what i thought your bitcoin comments were uncharacteristic because when you were sent out to go see millen and milkens got this brand new way of funding companies, it went on well for a while, and now its laejt asset class. So you went out there into the wilderness, almost to seek out colonel kurtz and you find these people selling Bond Offerings at 20 annualized interest, im not saying bitcoin is definitely going to last, but you really dismiss it out of hand for people who dont know what the comments were, you called it nothing but an unfounded fad. You said a lot more, but that was sort of the headline that people focussed on you know, my problem with bitcoin, and i also say in the memo, maybe im too old and too much of a dinosaur to understand bitcoin, but when i went out to california and met with mike milken for the first time in january of 79, i understood what was behind high yield bonds. Is it still a bond . Yeah. I dont understand whats behind bitcoin sit with mark for an hour why look, you might end up being right, i just think its too early for anyone to be doctor, bullish or bearish i feel like open mindedness, maybe. Theres the old joke that most people in the Investment Business know about the punch line is these are not eating sardines, these are trading sardines this is not a spending currency, this is a trading currency i agree and if a currency is up, i dont know, what is it up, 85 times this year its not a currency its not a medium of exchange were on the same page there. Its a commodity. Its a commodity. I cant see any Intrinsic Value. For me, theres only one kind of investing, and that is you look at something, you dont think about is it going to go up tomorrow or down, the more people going to like it or dislike, you say what is the Intrinsic Value. Right can i buy it for less and, there is no Intrinsic Value in bitcoin ive said the same thing about gold if you go back to 2010, i think i wrote a memo called all the glitters. Yes you probably read that. Twice and the reason i dont like gold is because you cant say what a fair price is for gold. And oil. Is there Intrinsic Value in the dollar or does it have value because of its utility and the fact that we all agree to use it well, clearly the latter. Okay. It used to be exchanges for gold used to be. By the way, when i had my first job on wall street, they had silver certificates. And the end of the exchangeability. And i took them down to the sa office on old slip, and i exchanged it for silver. And i still have this silver im not going to die broke but the point is there is nothing behind the dollar anymore other than the full faith and credit of the u. S. Government whatever that means. Right but at least thats something. Means we have the marines and the navy yes and we have but, im going to promise you something i dont know what it is they promised, but the point is that whatever it is, its missing with the currencies. Right can i ask you before we go, if you are looking for some sort of correction in a wide array of asset classes, what you would be looking for from, you know, gunlock made said 2 3 , maybe a little bit more. What would make you more opportunistic in the market . Is there a number that says look, stocks need to come down i think they could come down by x percent or something needs to happen in credit, then id be a buyer of various things that today im sort of giving the heisman to you know, einstein said, not everything that counts can be counted and not everything that can be counted counts. I want to see a more riskconscious environment i want to see investors expressing doubt i want to see the vix rise a and the vix at ten is absurd to you. Its not the number, its the fact of what it represents i dont know what it means i want to see not a string of unmitigated advances and so, i dont think, you know, id be surprised if we had a this theres been no boom in the real economy. Theres not going to be a bust, i agree, lee says theyre not going to see a recession and jeffrey. And jeffrey too when you see ipo when you see like, snapchat come public and drop 70 65 , blue apron comes panel, at 12, its 5 today. There are barely any ipo toz speak of anyway, its just hard to say like were at euphoria. And maybe well get there. Well, the only thing the only thing, josh, there was some euphoria that took snapchat to the price from which it fell off the market. Not in the hands. Then it doubled in the ipo crisis absolutely. For ten minutes. Day inform, two days. Come on. The point is, the point is, when the market is dangerous, people look at risk and they say im going to take risk because if you take risk, thats how you get rich and when they say that it scares the heck out of me i want them to say, if you take risk, its a way to lose money, and i dont want to and i dont to want ever lose again. And when they say that, thats when i get interested, its not a certain move in the market its not a certain level on the treasuries its the fact that people say, i hate this market, risktaking is just another way to lose money ill never do it again and thats what turns me on. Were a long way from there dont tell my wife i said that well leave it there. Were all winners today. That was a great conversation. Thank you so glad to get your insights you did a good job post memo, and im glad to be here. I really, sincerely appreciate that, our whole crew does as well howard marks of oak tree coming up, a cnbc exclusive interview with mike may owe. The wells fargo senior banking analyst joins with us his top five picks in the sector and the one stock he thinks could double in the next five years. First on cnbc next for years, centurylink has been promising fast internet to small businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. All right. Welcome back mike mayo has been called a renegade, rouser, and perhaps even worse by some of the Financial Firms he has covered over the years and theres a new gig and a big new call on one stock in particular, mr. Mayo just joined Wells Fargo Securities as a Senior Analyst in his first tv interview. Good to see you again, welcome back thanks for having me. Congrats on the gig good to be back on the street . I heard you were calling my name, mike, start working, stop enjoying yourself. All of this stuff was happening with the banks i was like, ive got to hear from mayo. I used to say hold the mayo, now i say bring the mayo the banks, how do they look to you today . We launched coverage at Wells Fargo Securities, i can say im extremely happy at week six. And we are positive on the banks longterm. I heard what howard marks had to say about the market, when it comes to the bank specifically, you have the strongest Balance Sheets in a generation, you have a breakout of revenues, the banks have been in a funk this decade breakout of revenues, and june 28th was a huge day, june 28th of 2017 is when the fed announced the results of its stress test and allowed banks to return 100 billion of capital over the next year and 100 of earnings so the fed is no longer requiring banks to build up their capital ratios so that benefit accrues to shareholders. You are maybe best known, and ive called you a renegade, a rabblerouser, i said some of these firms may call you a lot worse, one of those over the years, undoubtedly would have been citigroup you have butted heads with that firm for a number of years youve called out mike, the ceo for his pay. You said the cfo should get out of town. Your take on citi is even a Harvard Business school case study, as i was doing research, i came across that, i was like wow, now you say the stock can double four o five years whats changed well, let me put things in context because after your less guest, when you look at bank stocks, its been not just a lost decade, its been a lost decade and a half for bank stocks as a whole. Citigroup, they were a stock of 550 and now theyre 68 just getting back to 100 for citigroup gets them back before the crisis after june 28th, 2017, citigroup was allowed to return capital more than ever before. Over the next five years we forecast citigroup buying back onethird of its stock so, you can legally front run the biggest buyer citigroup because you know citigroups going to be in the market. We think the next five years as long as they dont mess up, the bar is so low. As long as they goto work each day without tripping, as long as they dont throw a hole in their balance sheet, theyre buying their stock, the next several years, and that can propel half of the Earnings Growth over the next few years now the bonus here is we estimate some of the parks value over the next year to be 140. The question is, how can citigroup better maximize that 140 of value . And now, diane shoemaker creek, she Heads Research for Wells Fargo Securities she says research is seeing what everybody else sees, but thinking what nobody else had thought, applying that to citigroup, what about the 46 billion of tax credits called deferred tax assets at their First Investor day in a decade, they gave a sense that that might be 40 billion in a few years. But why is it still 40 billion . Why cant they adieu additional restructuring to realize the value of those tax credits and thats one item we bring up in our note okay. Theyre not planning on doing that, but we think they shouldnt stop there im glad you brought up the investor day it was the first in a long time. Michael sat down with our jim kramer for and exclusive interview from one of the few interviews hes done in the last many years lets listen to what he told kramer and then well talk about it on the other side heres a piece from that interview. We shed 800 billion of noncore assets, we exited 70 different types of businesses, and so were at a point today, we had our investor day yesterday, we told our investors we crossed an Inflection Point and were back focussed on growth, were back focussed on getting to the returns that our investors inspect, and so were excited about it so the reason i played that for you is, do cover bat and company deserve as much praise today as the level of scorn you gave them over the last many years . Well, i gave mike huge credit 800 billion of legacy crisis era assets that were reduced to below 50 billion. He could have sold them very quickly several years ago, and that would have been a terrible move instead, he was patient, he waited, he had to have saved citigroup tens of billions of dollars. So mike corbat could be like the 50 billion man. Is that enough citigroup has destroyed value, generated returns below the cost of capital, for the last decade. So if youre in a position like that, how can you say your restructuring is done . I also went to the annual meeting, fifth year in a row at citigroup and i asked, how can restructuring be done . Even the chairman who i respect also, mike oneil said its done i dont think thats consistent with financial theories. Sure, but dont tell me the stock is going to double in four to five years and then still rain on the parade after the fact at some point, dont you need to say this guys done a darn good job. Theyve obviously been through hell and back. But the runway looks as good as its looked in a decade, and part of the reason is because of what corbat and the others have managed to do over that period of time or else you wouldnt say the stocks going to double in the next handful of years. What citigroup has done, mike oneil, the chairman, its this citigroup has improved their structural risk positioning better than any other large bank better than any other large bank ive seen. In terms of capital, reduced risk structure, getting out of businesses, thats fantastic and thats enough to take the stocks over 110 billion. The extra boost, theyre either going to need to get that extra growth or theyre going to need to restructure. I see this i think if they get their longterm target of 14 , return equity tangible, we think the stock goes to 140, but if they cant get there over the next five years, i think its imperative they restructure to find a way to get there. Investors deserve an insurance policy in case they miss their targets again. By the way, as well as the stocks done recently, and we think it does a lot better here, their big financial targets are four to five years later than what they had before, so i dont think its a matter of clapping like everyone did at the investor day, its respecting the good job mikes done so far, but not being satisfied with the company that used to trade at 550, but at 68 today let me switch gears before we let you run to another firm, Goldman Sachs. You have an outperformed, you resumed coverage at your new place. Targets 265, the level of shade being thrown at goldman these days, is unprecedented from wall street certainly, right main street, i get it. Wall street, different dick says, should be fired should leave why dont you share similar views of concern about whats going on at goldman . So, terrible fixed income trading quarter, worst inclass year over year growth, pressure to perform, calls on management, who am i talking about Morgan Stanley july 2012, all right. So we have seen this movie before, remember back then, my top three picks are Morgan Stanley, Morgan Stanley, you can pull that up, and you can see what the stocks done in those five years i see a little bit of that in Goldman Sachs right now. Fixed income trading, its lumpy, you have good quarters, you have bad quarters, people extrapolate the short term too much, in fact, this is the first time weve picked goldman over Morgan Stanley goldman since the ipo, theyve had organic twice as fast with about half as much earnings volatility yet they trade at a less expensive price than Morgan Stanley. Its good to have you back. Congrats on the new gig. And that youll continue to give us your points of view on the banks. Great, thank you. Wells fargo securities, mike mayo shares are pulling back today, they are surging though more than 180 over one year earnings out after the bell. Josh owns it, our desk debates it it next on halftime for your heart. Your joints. Or your digestion. 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The state Department Says it has taken action we dont have any definitive answers about the source or the cause of what we considered to be incidents we can tell you that on may 23rd, the state Department Took further action we asked two officials who were credited at the embassy of cuba in the United States to depart the United States, those two individuals have departed the United States. An arkansas highway littered with frozen pizzas on wednesday after a tractortrailer carrying the food items crashed nobody was injured, but officials warn commuters that cleanup is going to take some time and expect a lot of delays. Youre up to date. Now over to michelle with whats coming up on power lunch hi michelle. A lot of dough there. Thanks, sue power lunch starts in 16 minutes. The battle with north korea versuses the battle at home on capitol hill which matters more plus Consumer Reports out with the new report saying they will not recommend any Microsoft Surface tablets or laptops we talk to the man behind the report and why the head of the generic drug industry warning that too much pricing pressure leads to drug shortages power lunch starts at the top of the hour the Halftime Report is back right after this because, when you really, really want to be there, but you cant. At cognizant, were helping todays leading Media Companies create more immersive ways to experience entertainment with new Digital Systems and technologies. Get ready, because were helping leading companies see it and see it throughwith digital. Its up 60 this year alone. Josh, you own it, doc, youve got calls. Kramer says its the key to the market i think its the key to tech without question, nasdaq watch out if this if this report doesnt come in well and the volatilities have been so low, across the board until this recent pop. 35 pop in the vix today until that happened, the volatility, this would have been pricing and more like an 8 move, its up to a 10, weve seen it as much as 14, 15 as far as the options so im tempted, judge, to do a little bullish stuff in here because i dont think theyre pricing it enough. People have been bullish around this name well, look, with good reason. It mike the best company positioned for the future in all of the publicly traded markets heres the problem everybodys in. Everyone agrees so its 101 billion market cap. Its an kposhted multiple on earnings look, im going into the Earnings Report long tonight and ive been in this thing since 50 last summer and ive had a lot of volatility along the way, ive had a 15 drawback, drawdown, ive had eight, 5 drawdowns, three 10 , ive suffered the volatility this is now 42 above its 200 Day Moving Average it has a beta of 1. 5, meaning its 50 more volatile, scott, than the overall market. And so, look, you cant see this right now, but im clenching under the table. I could see it. You could see it i could feel it look, im definitely full clench out there look, i can live with it. If i can live with it, a lot of new money thats come into it might not be able to so if youre nervous and you feel like 15 drawdown would be too much for you, you should definitely take some off. At this point though, watch out, nasdaq, watch out big tech, watch out fangs, if this thing doesnt deliver. Weve heard from so many of them weve heard from facebook, apple, weve heard from netflix, amazon remember, on the days in the past, lets say, six, eight, weeks, whatever, when nvidia has rolled over, it has taken nasdaq and big tech down with it. Yep, no doubt about it. Like risk appetite. People are going to point and say what else do i own that could kill me if it has a blood red day . Gold hitting too much the futures traders are next. Whoooo. Finding the best hotel price is now a safe bet. Because tripadvisor searches. Over 200 booking sites so you save up to 30 on the. Hotelock it in. Tripadvisor. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Welcome back to the Halftime Report we are watching gold prices rallying today for a second straight session the yellow medal now trading near two month highs almost at 1300, jeff, is this the beginning of a meaningful move higher or are we going to cap it there i think it may be its between President Trump and kim jongun of north korea has really escalated in the last two days, and thats been by and large the bidding. Jackie, if we see a missile launch, we could race to 1300, 1400 in the same day, however, lets calm down label the and also remember there could be diplomacy. If theres any type of diplomacy, were going to be range bound. 1300 has been the topside. Jimmy and i would like to talk about the dollars. And right now the futures are gaining ground in the u. S. Dollars, so therefore, the ceiling of 1300 is critical. All right jim, youre looking at this from a technical perspective if we do hit 1300, do we have the momentum to move higher i think the levels about 1305 to 1310, if we can settle above that at that point in time, well go higher too. What you said before, were at a high that we havent seen in two and a half months. So the gold market is not at a panic level. The gold markets only up 20 bucks. So its saying some reasonable concern right now, but right now i think wed have trouble getting through the 1305 area. Thanks guys meantime today, we are joined by one Hedge Fund Manager whos making a huge bet on energy, bill perkins, plus, scott of t3live. Com joins us to break down the charts. Its all at the top of the hour. Halftime is backft ts. Aerhi hey gary, what are you doing . Aerhi oh hey john, im connecting our brains so we can share our amazing trading knowledge. 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Designed for your data. Secure to the core. The ibm cloud is the cloud for enterprise. Yours. All right. Markets close three hours from now. Snap reports earnings it was my trade last week, judge. Bought the calls, stock popped early this week as well. Now, im getting back in, josh, im getting back in for earnings tonight. Snap im back in, jerry im back, baby. But youre expecting a good report oh yeah why i think have you seriously lost your mind i think theyre going to be over the seven million as far as new users. If they dont, what happens to stock its nine bucks im not expecting a good report i think they have levers to pull the one they cant fake is new users. True. So they could have a better earnings than people expect, they might be able to do things on revenue like recognize things earlier, they cant fake users, if its not better than seven million, i think its a problem. All right dont have much time left, give me a final trade. Im going to go with citi i agree, citi, citi, citi, twelve is Morgan Stanley, now its citi. Youre right, this is all about the nasdaq selling off the first place to look to buy Something Back is apple. Interesting yeah. Guys, thanks so much good stuff thanks for watching, well see you back here tomorrow power lunch starts now im michelle cabrera, heres whats on the power lunch menu escalating war of words between President Trump and north korea taking a toll on markets here and around the world is this going to spark a late summer severe sell off plus burnt offerings shares of blue apron, theyre collapsing like that souffle you took out too early stock nearly cut in half since going public well debate what happens next to the stock and today east disaster is Chicago Bridge and iron, its literally crumbling. Down over 30 . Whats behind this Infrastructure Company slide is it bigger than Just One Company . Were going to dig in as