Days of selling. Volatility is back and in a big way. Do you say the course origin to move to the side lines for a bit . I think you stay the course im sure everybody is shocked to hear that thats what i would say obviously, people were seeking protection they did that in many cases through the s p 500 the iwm, the qqq, of course, the vix, but thats really the deep end of the people the vix itself. So what i think move yesterday that was 44 in a single day, the ninth largest move in volatility in the vix is history, only the ninth largest. The big set over 65 but nonetheless, what that told me was a lot of the people that had been putting on these ratio spreads, one by three, one by four, they have been getting more aggressive with that, so if they have some protection against a small move in volatility, you get a big move like this, they chase, theyre the ones also throwing gasoline on the fire. Yes. Thats why a 1. 5 move results in that. What an incredible move in just a few days. Yes. Its been for the vix its been a huge week on halftime as you know, several notable investors weighing in on the state of the markets and why they are growing more cautious i believe that the market will drop 3 at a minimum, sometime between now and december from lets say now grinding at a higher level when it does, i think the vix will not be a 10. I think the market is fully valued on a fundamental basis. How i get there, i think we are heading to normalization. There is nothing thats cheap today. You know, there is nothing that cries out and says buy me. It may be fairly priced. Stockmarket, bond market it may be rich nobody argues that its cheap. All right so kate moore, ray dalio, risks are rising he writes today you we heard what these other folks said on our show this week what are your thoughts i dont think that was an overly bearish commentary. I think its consistent with what we have been hearing the last seven months. Its been hard to find someone that likes this market and was constructive in 2017, a 3, pull back, a 5 pull back, these are normals. Volatility is expected we have all been waiting for it, calling for it. 40plus percent volatility in the span of three days this is not a change . Volatility regime in our view. Eighth pickup in geopolitical risks, technical forces, i think a real pickup in volatility regime, something thats consistent will coincide with either a significant decline in terms of the economic prospects or financial shock neither of which we are getting in the last three days, this is just making people uncomfortable, when they were already uncomfortable and fatigued by the market. What is your gut sort of telling you . You hear from great investors, dalio with his own words of caution. What should, you know, the average advisor be thinking about where the stockmarket is today . You dont have to look at the levels of the market all you have to do is look at the bond in march of 09 to where we are now 2017, it saves getting a little longer, too, you look at the level, its fairly valued. So i think the market always looks for a reason to go down and so weve got it down all right. We got some instability, geopolitical risks those are always temporary risks. However, we potentially have that threeandahalf more years with this white house, so volatility will pick up. I think what you do in situations like this, the same game plan i have before, ive got cash its really cheap. He hit it in the head. You see the spike, thats definitely where he got that, it was pressure on his part too bad we dont have the smarter brother on today sorry. Yu the better looking one exactly so, look, i think you looking to upgrade the portfolio. I got rid of lower conviction stocks i have been trimming the ones that hit the price target. Thats critical. Otherwise, you play momentum in getting euphoria then i bought some bobby, it kept going down, i got stopped up this morning on that extra part i bought. Kevin, its funny, Lee Cooperman made the point earlier in the week with us, there is a rolling correction in the market people may not realize it. We said, 40 of the s p is in correction territory from their most recent highs. You are looking at macys is 55 pars off its highs, cigna, mosaic, foot locker, hess, via com, kohls, are those bargains . Not yet its a systemic rate going on in retail no, question about it there is also a residential and commercial real estate aspect to the whole retail space, with i is resolving itself at the same time putting pressure on these names. Because there is a question about how many locations actually need, even if you are a successful retailer. So id like to see all this stuff getting resolved if are you in a b class mall and 60 of your out. S are there. There is a chance that mall actually goes out of business. Which forces you to shut down locations. There is all kind of this overhang retail. I remember the cooperman conversation and lee basically was noncommittal. He didnt feel comfortable buying into the valuation. Hes turned out to be right in a mini correction. What bothers me, a market that goes straight up never goes up and never corrects is very troublesome. Now we have a pause that refreshes. You know, people are finding ways to assure themselves. I prefer the bsx i never had a 34 move in two days sentence i owned it thats what i got. But you know, its an insurance policy that doesnt pay until it does and so i argue that parking capital, maybe a 5 rating of the oum is not a crazy thing and trading opportunities. Yesterday for me was to move into midcaps. I saw value there. I didnt do anything in the large space, i was a midcap guy. So far i have been awarded i like the values there, first boy, how right was gun block with us this week . His highest conviction trade was a return of volatility okay that worked whats wrong with a notice . It is sort of stunning whats happened from a volatility standpoint, and how its forced people to sort of rethink, where we are and also some very Bright Investors to sort of double down with their caution yeah, a couple thoughts about. That first off, were only 2 off the high in the s p 500. And the second point is, because of that, i dont see anybody running around like their hair is on fire saying, oh my god, you got to get out economically the global looks pretty darn good profits look good. We are predicting growth nothing out there says a bear market is if front of us what we are all saying, though, is you can have a correction at any point in time. I think kevin said it. This is the pause that usually refreshes. All i see going on right now is the broad market catching up with individual stocks you mentioned a 40 correction. Is there the time where the market just pauses and refreshes . Nothing more for the most part, every time people have gotten incredibly more cautious, its been short lived. Stockmarkets recharged itself. They come right back up. I have to see Profit Growth or projections start to get wheeled in i dont think you will see that with Economic Growth in the u. S. And abroad you just put up some stocks i am looking at there i got to tell you, i got dry powder tractor is on my list, down 39 off its 52week high. Look the overall retail space has had a tough time i have been wise to watch that the point being, steve may have said this. Have you to be disciplined if individual stocks get past your sale point. Can you ride them higher when they start to crack, you got to take them out i have my watch list youve seen it there im not buying today this is august this is usually groupie time, liquidity dries up a little piece of news that didnt matter a month ago starts to matter. I got my dry powder. Im ready to commit on those names at lower prices. Just when you look at the statement by mr. Marks yesterday on this program over at the new york stock exchange. He was saying, look, im not saying get out right. Im saying i have done very well, this mr. Marks, not done p john he said i have done very well throughout my history knowing when we should lighten up and heavy up a little bit. In other words, be fully committed on times when he thinks that the market is a little oversold and by perhaps pulling back, which is what he said yesterday not getting out, but pulling back i think thats just prudent. You get to take advantages of moves like this, but to your point, jim, it hasnt really manifest itself in a lot of stocks its manifest in volatility that kevin talked about but it hasnt been from a lot of stocks. The question is if its a pause and refresh like it has been in these vshaped recoveries, weve seen, which parts of the markets lead to that v recovery . Is it going to be tech, once again . You know, as were going to have a conversation about invidia and what that means to the overall techs trade . Which parts are the ones that lift the boats again okay. I think it will be tech. I think it will be most of the same names the reason being, by technic also, i dont mean the charge. I mean the apple traders that have gotten so huge, they go from liquidity, those arent tax efficient vehicles theyre in for a couple hours, maybe a day. Youve seen some corrections in those numbers, western digital, netflix, those are more than 10 off the highs as well. So i wont call tell value yet micron, one i own and got rid of yesterday, i got stopped out of it it was my safety trade on whats happening, so much capacity. This is such a monster list that i have and names that are far and wide, too. No offense, when you look at it. Disney, goldman, delta, gilead, dish, american, heinz, costco all 10 many Percentage Points more than that nothing we seen the last few years the headline averages have been violent we saw it in health care we seen it over and over, it keeps rotating viet. We saw nit financials, we have to ig floor the top line to understand the real health. I think its about dispersion, too. This is what you are saying. It reminds me of something that kevin is referencing before. If the market continues to grind higher, everyone was moving in lock step. If there was low volume and low conviction, its not a great market for us investors. This dispersion, the spread between the winners and losers is what makes the interesting stocks, taking idiosyncratic risks. Its normal. There are bellwhether names out there, amazon is 10 off its interday high if you havent been in that name and you watched it go up you are looking at this as a potential opportunity to buy in. Thats what probably keeps this from getting worse people wake up and say maybe i dont want to buy the whole market these individual stocks that have been leaders, they get into that thats why they probably lead back up. So, kevin, what about invidia and what it says about where techs should be . Because as that stock has moved lower on occasion over the last, you know, few weeks or months, it has dragged technology down it was the darling. It really became the momentum darling stock. I think its just giving back that element to it as it falls to earth with all the rest its still one of the best names to own going into the back end of the year. Ly overweight myself in august to get ready for the septemberoctober volitive i was looking this morning at the blog, overweighted consumer goods, technology, health care, going into the back end of the year a. Lot of safety on that. I dont want to give up the upside on tech i think amazon being a buying opportunity. Remain there, down 8 or 9 but theres lots of buying opportunities. Im a bold going into the back end of the year. I think we will really ends up with good earnings on the year top line growth 6 Earnings Growth close to 11. I think it sets up the next year, the first two quarters, where we get similar growth. So the sectors that give me the most warmth and fuzziness. They have good cash flow, low leverage, lots of growth i love j. J. I love apple i even own exxon, because its so hated so much i even took a long position believe it or not on ge, the calls out there in the 19s, the 25s. I think activists will tear it to pieces, i lover equities above any other asset right now. This is a good correction. If this is a correction, its a mild one to say the least, given what the stockmarket is doing today. Top line insignificant. We were here two weeks ago it means nothing, compared to what we were down yesterday. Sure it happened in one shot than over a few days we seen before, you cant get the situation with forth korea doesnt get any worse than it is right now. Make a case for getting out of the way of the stockmarket its hard to do . I have a large dose of cash, look for opportunities, select opportunities, market opportunities. Im looking for specific equity opportunities. And the Global Economy is improving. It looks like you may have longer rates for longer, if Inflation Numbers keep coming out as they are. If you have a 220 tenyear, you dont have competition in the broad Asset Classes versus equity. I dont know, they talked about it today, it is so soft on the inflation side but i dont know they can make a case for anything prior to the december meeting i dont even think they can make that case. I think theyre done for the year here. Were still on course we think we are on course for one more like this year. The crossover. The difference is we have different inflation cross currents we know people thinking coming out of earnings, they were competing for labor. You got good numbers earlier this week. But then we have significant disinflationary pressures when it comes to goods and to some services i think trying to figure out what the longterm trend there is a challenging theme for the fed. I wanted to mention Something Else when we are comparing the after classes against eachother. Its hard the truth of the matter is its hard to look at another class and say like credit or anything in the world, say those valuations are not extended i mean, im not looking at a multiple expansion. Others are making all assets across the whole broad spectrum. Yes. Are pricey. We would absolutely agree with that. Thats where you need to be a little more themematic and specific about the investments in any class maybe not expect significant multiple expansion in the markets, in fact, think that prices will move inline with earnings in the back half of this year. Off to a good start heres what else is coming up on the Halftime Report. Our call of the day t. Retail stock that is one of this years top dow performers gets an upgrade. One firm seeing upside performer of more than 13 from here our traders debate it. Plus, oh, snap the social media stock dies after a disappointing earnings results. Media insider ross levin zoson l be along with his report 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. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley looking at the Halftime Report walmart up 15 . The firm stevens thinks there is room to run. Theyve upgraded the stock it is our call of the day. Kevin oleary, you own it. You own walmart still yes, i do, yes, i do. I still own it and my thesis is, it is the antiamazon name. I know they overpaid for their online assets. Im willing to forgive them now. Because the whole, you know, sentiment about walmart has changed in the last six months they were thought to be brain dead when it came to competing against amazon thats not the case anymore. Most analysts give them credit for the integration of competing online what they will become with whole foods, the best competitor for that is walmart theyre already in the grocery category in a much bigger way. They have the same technology in being able to dlimplt im extremely bullish. If you want to own retail, two names to own are amazon and walmart these are the two companies that will craft the future of what america does in terms of when it buys commodities and when it buys goods and services, theyre the two. They will end up the big competitors and i think leaving walmart out of your portfolio is a mistake because its giving you the stability in retail that you havent got from pretty well any other name they have all been decimated everybody blamed amazon for it the truth is part of fault and others failing is walmart being better at what they do and having so much distribution in so many different markets. So im extremely optimistic what people will do in the next two years. The Stock Performance tells the exact story kevin is telling us walmart, yeartodate, kroger down two, target down 23 and amazon, of course, is up. Paul ryan with the border adjustment tax and whats leaked out about that being dead, that was one of the big boogiemen in the room that could have really smacked them of border adjustment tax now thats dead, i think this continues to work, judge, we have strong buying calls, theyre starting to roll some up stocks moved up from 78 to 80. Not a huge move. I agree 100 with this call. As mentioned in the note by stevens . Thats a part of it when you are running institution alimony, you need a waiting retail, because if you dont have a waiting, it depends how much want to short it. The s p waiting. So you are saying, i cant buy anything else, buy walmart. I have to continue to track the institution alimony. For me, i have never been that attractive to it i always thought it was too big to grow, clearly wrong, it has been growing. Up next, john is tracking unusual activity in the Options Market as always stick around for his latest play. Plus we get an update on his hotel trade. Take a look at the s p sectors today. Reunce back on wall stet we are back right after this we, the people, are tired of being surprised with extra monthly fees. We want hd. And every box and dvr. All included. Because we dont like surprises. Yeah. Like changing up the celebrity at the end to someone more handsome. And talented. Really. And british. Switch from cable to directv. Get an all included package for 25 a month. And for a limited time, get a 100 reward card. Call 1800directv. At the lexus golden uncoopportunity sales event before it ends. Choose from the is turbo, es 350 or nx turbo for 299 a month for 36 months if you lease now. Experience amazing at your lexus dealer. I thyou never got the brakes looked at . L. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. All right we are back on halftime. Doc, what did you see on the new one first . We see norwegian cruise lines, very large upside call buying take a look at this, stocks down, it was down a buck 20. Now its down 69 cents the recent high was just over 69 not too long ago take a look at the 57. 50 calls they were bought about 7,000 bang, bang, bang big numbers, very quickly. There you see it about 7,000 of those september 57 calls, time frame about a month 57. 50 or higher. I like the trade i piggy backed on this, probably be in it twotothree weeks. About a couple hotel trades happy to. Lets start with wyndham this was a loser i bought into this, paid about a buck 40 for some september calls. And a buck 45, a buck 50 maybe even, sold them out for a dollar 30, a dollar 35. Something like that. Took the loss, moved onto the next one the other i loved, that was marriott they got great news when ali baba, the day of tear earnings, in the morning, they announced that deal t. Stock popped. So you can see, basically, we got in here around a buck 55, a buck 60. There it is, trading up to almost 3 on that trade. So you win some, you lose some, but you got a controlled amount of risks when you are trading options. You know what your risks are you defined your risk and the potential reward certainly paid off in this case. Good stuff. Come back over here, lets go do sue herrera who has the latest headlines. I sure do the Associated Press reporting that the u. S. Has been engaging in back channel diplomacy with north korea over its Nuclear Program for several months the dialogue involves the u. S. Envoy for north korea policy and a Senior North Korean diplomat stationed at the united nations. A headon train collision near egypts coastal city of alexandria, killing at least 36 people and injuring 100 others no immediate word on what caused the accident egypts rail system has a poor Safety Record due to poor maintenance and bad management. Billionaire head fund manager daniel loeb said a plaque woman in the United States senate has done more damage to people of color than anyone who has ever donned a hood, end quote. This because of her support for the teachers union. Loeb says he regrets the language he used about Senate Minority leader andrea cousins. The first round of the pga championship he used a 6 iron he is the 86th ranked golfer in the world. Thanks so much. Nice stouf there nice stuff. Right. It was. Why him, not me . He may favor you one day. It kept on going off the green, probably into a tree. Not necessarily to a hole to the right or left. Exactly j. C. Penney is getting crushed on earnings, record low, lowest level, jim, in 45 years, wider tan expected loss, Gross Margins missed you have been making the case this is a stock to own. Listen, im very disappointed in this result obviously, i have been on this show multiple times saying i believe in this company. Clearly, ive gotten it wrong, now, im looking forward from here thats all can you do. You wake up in the morning, the results come in. The stock price is where it is this stock for the immediate term is not going to go anywhere theres two things that have to happen in the next month or two. There has to be a strong backtoschool selling season. They said theyre off to a strong start. Okay. Thats good. The other thing that has to happen i look at this Earnings Report i see some good things, im not going to senselessly cheerlead here i see Free Cash Flow is up debt levels are down a lot of things are positive the wall Street Community isnt buying it. They have a new cfo, he had a background at watt mart. He has to come out of the shed and communicate about things going right with specifics, appliances omni channel. So you say they need to come out and tell a better story, essentially . Yeah. Wall street seems to say, i dont really care what they say. There is no story to tell. There are too many hurdles to get over. Yeah. Thats yb one, if you look at their guidance, its you know as wide as the atlantic ocean. You mean the earnings per share guidance, 40 to 65 cents yeah. Thats a fair comment. The company has no visibility of any great sense, how in the heck can you or any other investor well, so, youre absolutely right. And this business, scott, is about predicting the future. So to predict the next six months, is awfully difficult which is why they have the wide range. The range is like 25 cents. 40 to 65 cents. Im narrowing that im saying, the next month, backtoschool selling season has to be good you guy versus to complun indicate it. Im not sticking around to the end of the year where in that range you fall or its wrong im an investor long with stock, continues to think its the right company. Im not in it forever. You guy versus a month to convince me im right s. That Strong Enough . Hes thrown down the giarrantano u gauntlet the trump trade that wont give up. Defense stocks we are talking about. They keep going higher as tensions with north korea rise as well. Are those stocks getting ahead of themselves . Tech has been a high flyer a lot of those names are in corrections territory. Is eight warning sign . And snap shares are getting whacked on the back of a weak Earnings Report. Why its growth may lie with a dancing hot dog. Halftime report is back after this, but dont miss power at the top of the hour. Miss the blitz, the call of the day . No problem, go to c nbc. Com halftime to see the moves, the trades, whos winning and whos losing anys, breaking news and alis of all the top stories, c nbc. Com Halftime Report. Th reca. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Whuuuuuat . Rtgage offer from the bank today. You never just get one offer. Go to lendingtree. Com and shop multiple loan offers for free free . Yeah. Could save thousands. You should probably buy me dinner. No. Go to lendingtree. Com for a new home loan or refinance. Receive up to five free offers and choose the loan thats right for you. Our average customer could lower their monthly bills by over three hundred dollars. Go to lendingtree. Com right now. Back on the Halftime Report, snap getting another disappointing Earnings Report. Ross levinson is a c nbc contributor. Ross, good to see you. Nice to be here. You were critical of q1 what about q2 . Well, we talked about this last time. I was oncerned i think what we saw, clearly, is a miss on every key metric but on the flipside, im actually encouraged. I have been long there stock in the 20s. If i was long in the 20s, im long now i saw some signs that were pretty encouraging to me a lot of work to do in front of them a lot of competition, but im bullish. Give me the encouraging signs you saw. Look. The User Engagement numbers were really good. People under 25 are spending 40 minutes a day. Thats great people over 25, over 20 minutes a day. So start right there start and stop there a little slow on the overall user growth, but im encouraged by the engagement numbers. Im encouraged that people are saving over 250 million snaps to memories a day im encouraged with this new maps product im encouraged that it doubled more than a year ago those are good signs for me. A red comments from an ad executive this morning said quote snap has gone from industry darling to troubled child overnight. How long is it going to take to reverse that yeah, these are true growing pains. You are starting to see some movement you know, they said 60 of their ads are being sold programmatically, which means advertisers are coming into the auction. That takes time that doesnt happen overnight. So im encouraged by that, but, they really have, in my mind, four key products within snap, put specticals aside for a second four key products and each one need to be sold differently. So while programmatic fills the pipe, i think some of their key products need to be sold directly that also takes time. They have a new leader in jeff lucas. It takes time to go to the agencies and do it this does not happen without a lot of roll up your sleeves hard work i have experienced there over the years so you have to get out there and do it, handtohand combat they are faced with big competition. Thats my question the instagram competition, on the facebook side of the street, as you have already mentioned with mr. Lucas, this could be turned around and hopefully if you are a snap fan would be turned around, but certainly has not been fully addressed yet how long do you give him before this is something that impacts their bottom line . Well, lets me start with the food news. Im a fan of the godfather there was a great line when don core leone was shot. We hit him with six shots, hes still alive. I feel thats story here facebook has turned its sights and put a bulls eye on the back of snapchat and doesnt everything it could to knock this things down, including what i understand from agencies, not selling within the facebook platform, in some cases offering buy one get one free. Bundleing sort of thing that is really tough. That said, i really dont think of snapchat in the same light as i think of facebook i actually think its a different company. And the fact that Mark Zuckerberg and Sheryl Sandberg and the team are that focused on killing the company, means to me that theyre worried so if im evan, i keep innovating he said it yesterday on the call i want focus on tin no rate ising. A ton of things on the ad side that i have to overdeliver, go back to google, when i was at yahoo, the thing google was doing, im sure theyre still doing it they were saturating the agencies with anything they wanted research, free people. Free ads cutting prices, just to get market share and i think snapchat has to be really smart about how it goes to the agencies and overdelivers to them at this stage of the companys life they have the most desirable audience under 25 and they have a really unique set of products, but each one has to be sold differently, because what theyre going to do in maps, which to me is one of the more exciting things theyve inno valted on and launched what they will do to monetize it versus media, totally different. Ross, kevin oleary is with us i can see him on the monitor hef has a look on his face like he would on shark tank if somebody cale before him with a pitch he didnt like he wants to Say Something. Kevin. Maybe im reading you long i was watching you during ross answer no, yeah, ross is right i must Say Something about this name i have not considered it until today. Theres two things that i think make this intriguing, one is theyve added seven new geographys, so i think its about 40 or 39 countries now, so that impresses me. But most of these countries like india, the app actually doesnt work yet because most people dont have a phone that can use the features that you have. Snap is a functionalist. Heres the thing that i wesh i could do, i have been looking at putting on some of this name i who you would like to sit down with evan for half an hour and tell them how to do an institutional Conference Call. He really needs adult supervision that call was hor risk yesterday and every time he gets on the phone, he kills his company, because Institutional Investors listen to that, i dont want to be too critical, hes a really brilliant young entrepreneur he needs someone on the board to explain to him how this works, how you block a 25minute call, what you say in the first ten minutes, what you do in the second, how you answer questions. You dont insult or in anyway belittle analysts. Its a huge mistake. The reason the stock is getting slaughtered, 50 is he just made a whole lot of people angry yesterday. Its the truth i give him a lot of credit im considering putting on the name i think it will go Single Digits and half the problem is him on the Conference Call. That is something he has control over. I love your response to that. Well, look, thats a really food points. Super fixable. You are talking a communications problem, which we talked about here before. I agree with kevin, this is a little inexperience, certainly to miss the first two quarters coming out of the gate it is a little inexperience. But those are really pretty easy to fix i think, you know, they strip the next Conference Call script the next Conference Call. Obviously, its about how they perform. I am encouraged about the metrics, but if im sitting in that office in venice, california, id get really laser focused on a couple of things, those four sort of key areas of media messaging, maps and memories just focus on doing the best job can you on making those kour products work. Two, id overdeliver for the advertisers in a way that they havent done yet three, i would be really focused on my outreach and my communication, both on the ir side to wall street, to the market, to consumers, really focused on that. And lastly, internally, i think they have to get a clear set and a transparent way of talking to the staff about, sheer what we have to deliver here is what we have to deliver here are the kpis we have to deliver if they do that, they will be fine that i do have user growth, remember, evan said outen the call yesterday, which i was a little concerned with, that, you know, they havent really set their attention internationally yet. So i think theyve saturated the market in north america mostly for their audience set but the growth should come internationally and ten if they can turn up the monetization domestically and communicate as seven e kevin said in a real i clear way, im bullish on the company. The only other point i guess i would make, ross, to go back to your god father story, morocco zuckerberg and the folks over at facebook, they have a lot more bullets in the chamber and in their hands to use, do they not well, they do, for sure, and to their credit, they have the leeway to bring instagram along slowly, theyve put some great talent in there and you can see the difference when you bring great talent and they have a really well oiled machine. All that said, you would probably agree that snap has stumbled a little bit here over the first six, seven months since their ipo and facebook has turned up the jets on them, but they havent killed them so i think, you know, in some ways, i think the problems snapchat is having right now are fixable. And you got a brilliant guy. Really, give evan credit hes a brilliant guy he created a product that doesnt exist before but again, i think hes got to surround themselves with a deeper bench they got to get their messaging right. I own puts. Im staying with my puts lets not forget there is 50 million in compensation stock to employees. Theyre not going to be happy. Wee seen the movie before. Have you another hockup. Right the lockup but those employees get paid if stock, because they want to catch that rising star in that well if they dont see it, it gets recruited away thats an issue here, a 250 million hit, which is about a billion two the First Quarter is an issue the fact is that, the fact that facebook didnt kill them doesnt matter okay theyre not going to die in a quarter or two quarters. Ive got a management now i cant trust. The first two quarters out of the gate, which should be layup quarters, where they should be under promising and over delivering for those to build a stock price, they blew then i got Corporate Governance issues, which is that the ceo controls all the voting stock. The problem is user metrics were going down into the ipo. Right. So the tone was set before a share was even available to buy. Mop aetna thanson puts out a note the title is huberis. Snap should have never gotten public within they did for a company so young, snap monetizization, you have that this early. I dont think they would have been able come public if they done do it then. With these apps, the windows is so short in order to get a critical mass. Now theyre 175 million users. I have to think that window is closed and there are other apps, frankly, its the teen community. They are already embracing them. Unfortunately, you will not see the growth ever. In terms of the list of what worries zuckerberg, and sheerl sandberg, i dont think this is in top ten not snap. Ross, thanks, for the time. Well talk to you soon, im sure kevin ileery, our thanks, to you as well. Up next, we are talking the blitz on goldman sachs, the defense stocks and europe when the Halftime Report comes back right after this defense stocks are on the move, lockheed, northrop, from the most obvious trades ever. This would certainly be in that category, ill take obvious trades for 1,000 these are really hitting obviously the reason is whats going on in the Korean Peninsula and our potential response there. But the stocks and volumes there and they just continue to move right to left. Goldman downgraded by hsbc. Who i get it look, theres is there a history there . Thanks for being there for me, john all of these company will be challenged by what we have now, below 2. 2 tenyear. They have transitions going on and these are all companies and all of these finance companies have been threw the wars, im sticking with them i think its a great story. Blue apron downgraded again during our show again. Oppenheimer throws shade on these guys i think you stay away, scott. Im looking at the most recent Earnings Report im trying to find something positive to say i cant find anything. Theyve got debt are they going to do it try a new lunch box. The irony is rich. Lunch box business. Listen, i think you stay away from this. This is very dangerous they got debt and losing. What happens in the second half we have to watch what happens to the currency and how much further we go in the euro and watch draghi comments and watch what happens to further downgrades to Earnings Division ratios falling below one the performance in the first half, not rep putable. Do you like those that outperformed it . Really constructive after the u. S. Earnings season, good guidance and good numbers, good number of sales beats, i think we should Pay Attention to u. S. Equitilies equitiliesties we think its well owned but i wouldnt be selling. Scott i was over there twice in the last two weeks. Working. I saw your instagram picture. Working. Im telling you a lot of folks are nervous, talking about exactly what really difficult to do what they did in the second half what they did in the first. Well do final trades before we do that take a look at the dow apple is leading theayup w, almost 1 3 4 percent back after this. Where, in all of this, is the stuff that matters . 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We, the people, are tired of being surprised with extra monthly fees. We want hd. And every box and dvr. All included. Because we dont like surprises. Yeah. Like changing up the celebrity at the end to someone more handsome. And talented. Really. And british. Switch from cable to directv. Get an all included package for 25 a month. And for a limited time, get a 100 reward card. Call 1800directv. Theextreme risk of burstd a pipes and water damage. Y. Soon, Insurance Companies wont pay for damages. That is, not if they can help prevent damages from happening in the first place. At cognizant, were turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back, we close out the week in a few hours. We havent talked about the stock very much in the Cyber Security place, fire eye seems to be formed a base here, starting to power higher here. I think its going to continue because we dont see the Cyber Security threats going away. It will soon turn profitable. Radius health, judge, it was a 34 stock this morning and moved up a buck to 35 stock buying the 40 calls, im in there with them right now. Baba, earnings next week. Thursday. I think what youre seeing today is an overflow of the reaction in that market in china versus the u. S. Market i think its going to recover. Im actually talking about em asia, think its an interesting trade. I dont think the geopolitical risk continues to last weve had good strong threemonth updates to earnings and i like the breadth a good fundamental place. Thanks for being here. Thanks for having me. Thanks to you for watching as well nice snap back for stocks, power lunch picking up the store right now. Heres whats on the menu retail wreck jc pen neon track for one of the biggest drops in decades, reporting a huge loss. Whats ahead for the struggling store and its vifrivals locked and loaded accused of driving the Korean Peninsula to the brink of nuclear war. Shares of snap tanking 10 right now. Why its future may lie with an augmente