Around, as you heard Kayla Tausche talking about so much on the table this week. So much on the table, and what do you think that the month is going to go, a nd what is the traditionally the worst month . Well, now that the earnings are over, we are macro focused an datadependent, so it is more volatile than we have been seeing, but i am encouraged by what we have seen so far, and especially for the consumers. And 75 of the gdp is consumer, and we have good numbers in spending and income, and jobs an wages, and fridays number is very important. And comps is not good. Well, it is spending with on the range, and okay. And volatile series, and the consumer sounds good to many, but what is bothering me is manufacturing. Maybe the oil and the gas bounce and maybe the dollar kind of stabilizingish, that should l help the manufacturing going forward, because that is the one piece that i am going to be watching particularly close ly. And pete, you saw as we come on the air literally on if midst of the selloff of the highs of the day. Do we get swoon or jump . Well, overall, im expecting a correction. Last week i did buy some volatility and early and expecting to see the volatility jump. Maybe a little bit of it this week. And as a matter of fact, when you listen to what you are talking about, steph, look at the manufacturing, there are some good numbers out, there and this is why the fed is positioning the way they r and overall, the numbers are reasonably well, and you can see the market, and you have oil up to 50, and gold on the move and the 10fyear is moving around a little bit off of the lower end numbers, and so there a lot of reasons to be excited about it, but i think that we will see some sort of a push. Does that mean i expect june to be down for the month . Not necessarily, scott, but i do expect to see some move that is going the push it to the downside and shake these folks out, because we have had rotation. And what is going to roll over . Biotech up 5 month to date or tech which is up 5 , and the banks up 3. 5 . I dont believe it is bank, because i am in the camp that the fed is going to be making a move. And looking at the fast move, apple and the way that the chip stocks have made a dramatic move in the last two week, it is a significant move. And if you are looking at the last two weeks, they have been on fire with apple, and apple is the impetus of that, and i believe that we will see a pullback, but nothing huge, and the market wont sell off 10 , but i do expect a pullback, and then we will start to bounce again, and the rotation starts all over. The other side of that . Jump or swoon . The pessimism is so prevalent in the marketplace, and this is why we could be high, and so many known headwinds out there, and it feels as though the market wants to technically breakout, and yet, the people are on the sidelines to chase the way in, and dispersion seems to bewinding which is a good thing for the markets continuing to rally, but it seems to defy log logic, and sell in may and go away was seeming to work, and so the brexit vote, and we will need to have markets have more of the binary swoon or jump, because you willt need the exogenous event to have it work. And josh, this could be the week that sets the table for a while to come. If friday brings a jobs report that is better than expected, who knows what the ecb is going to do thursday, but if the table is set for the june rate hike, then in a couple of weeks, we are talking about the rate hike. And play a big role into the june jump or swoon . Right. We have the adjustments of the expectations, and then rally. And every event has been the same way, and i cant think of any that didnt. So maybe what we have seen in late may has been this rally into what many people think is going going to be a rate hike. Who knows. But the Bigger Picture is that for every bullish fact, i can cite a bearish one, and we can play the thenarrative game overd over, and cut to the chase, and the tiebreaker, technicals. If you are back last year challenging the same level about a year ago, you had a really bad setup. You had the s p making a series of lower prides in terms of the breadth, and the exact opposite right now, and 70 of the s p names are above the 200 day, and then the small caps are acting better than they did, and yeartoday high, russell, and the microcaps are look good, too, and then finally, looking overseas internationally, and a better tone to the global stocks than those supporting us last time when we failed at the level. So if we flip a coin here, and say, well, where is there a little evidence on the breakout, it does not happen this week, but it is headed in that direction. And i was going to ask that some people were asking the question of maybe our colleague Carl Quintanilla on the show prior that some people are talking, what is first, 22150 o the s p or 2050 . Well, i dont see pessimism, but nothing but optimism, and now suddenly, oil going sup the greatest thing nb the world as we press to 50 and people are grasping, judge, right now on the things that the reasons that they should be and want to be in the marketplace. I look at the volatility index, i dont see the pessimism, and where we are trading, and it seems that people are very happy with where the market is. And positioning is very pessimistic. And the institutional money flow is showing that money is coming out of the funds. And in staples, and utilities and telecom and not the cyclicals. And the bond futures have never been well, lets talk to the somebody at a big institution, black rock, and our next guest russ costrich says that you should not expect much from the markets. And he is live in san francisco. Welcome back. Thank you, scott. You are a pessimist . Well, i wouldnt say pessimist, and i dont believe we are running straight up to 2200. And i agree with the comments, because the fundamentals are okay, but it is hard to argue that there is not a lot of complacency in the markets, and the valuations are stretched by most historical measure, and the volatility well below the historical average, and while the Economic Data is better, we are stuck in the environment where sluggish growth is not giving a tail wind to irnings. So in that market, do i believe that the market is going the rip . I think so, but i doubt it if we see the dollar moving higher. And if i said to you, 12050 or 2150 on the s p you would lean 2050 first . I would go to 2015, and looking at the volatility in the low teens with everything in the world, and the credit markets fragile, it is going to be hard to offer the gains into the summer and fall to offer a volatility in the fall. And where would you be invested in the u. S. Market . Where is the best place . Well, you want a barbell. So in looking at the secular growth themes. Technology, health care and where the companies can grow their earnings organically, and on the other hand, you want some carry in the portfolio, but the problem is seven and eight years into the extraordinary monetary policy, it is hard to find anything with yield that is cheap. Some of the places that are cheaper on the relative basis is u. S. Telecotelecom, and the aig. And houw about the brexit, ad how does that factor into your near term with a negative tone . Well, i am going to the call a cautious, but i wont quibble with you. Well, you r but that is neither here nor there. And okay. And brexit is a tail risk, and when you are looking at the recent elections of europe that i am thinking about the uk election, and some of the referendums in greece, the polls have not been particular willy accurate, and whether or not it is a real risk, i dont nt know but you have to factor nit. And the fed, it is not the end of the world if they go in june or july, but the bigs issue is what is going to be happening in the corporate earnings in the backhand of 201. Do you like gold here . Because there are sniffs that the trade is tired . Well, gold has come off of the highs, but it is still up 13 to 14 year to date, and now, gold, it is best in the environment in which the real rates are low and negative, and you have real rates that are negative out to five year, and it is inflation that is firming, and also the case in the u. S. , and second, if you do believe that there is some risk that the volatility is going to rise in the summer. Gold is an effective hedge. We have seen it going back to the environment where gold has had a negative correlation with the stocks and the credit, and you think of the hedges in the port foal e owe, and gold is one that will arguably work in the situation. And so, russ, thinking of 2050 or 2150, what you telling the clients with their portfolio in that environment . Well, the stocks are better than bonds bshg you have to have the modest expectations of what the stocks can do in the cycle. I spoke about the carry a few moments ago and thinking the about parts of the portfolio to get some decent income, and 4 to 5 yields with the modest volatility is not that exciting, and it is not the type of thing that sets peoples hearts racing, but if we are in a flat market, and difficult to get the volatility to rise, that is not a bad thing. And if you favor are the stocks over to the bonds, but you think that the stocks are expensive by the historical valuations, you must think that the bonds are blown out in price . And di fine the bonds as the sovereign debt markets and you have a case in the world similar to 30 and 40 of the sovereign debt is now traded with the negative yield. You are paying for the privilege to help governments in germany, e japan and switzerland and yeah, that is expensive. Fair enough. I wont quibble with that. Russ, see you soon, and thank you for coming on. Blackrocks russ koesterich. He said, where do you find cheap and yield, and that is financials and tech. And we have seen it moving to the upside and i know that i am arguing my side that it is is going to be pulling back, but those are the two areas of the money flows starting to flip back in this rotation. And those are two incredibly important and big parts of the market, tex and finanphfinancia the if the rotation continues in the sectors, it is positive . Well, it is not just tech and financials, because every single sector in the s p 500 other than the Consumer Staples now above the 20 and 50day moving average, and the participant, and forget about the polls, they are telling you with the money, they are not concerned about the brexit, and okay with the 5050 sh shot. And health care and tech are the main sectors that are doing very well, and still very cheap. I argue that with the financials, we will have ccar and learning more about the capital allocation, and so you could say that the yields are going higher in the financials. And you have interesting midday in the market, and we are going to continue the follow that. And plus your minutebyminute trade. Here is what else is coming up. Carl icahns billionaire bet, and his stake in allergan, and what it could mean for the stock and the company ahead. And one of the most popular etfs may expose more of your money no the chinese markets. We will debate the risk as and rewards. And now, lebron james and steph curry, and the real battle is off of the court between under armour, and phi k and nike, and debate which is better for your money. That and more on the Halftime Report. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. We are back, and carl icahn has a new stock position, and our billionaire investor tweeting that he is taking a large stake in allergan, and he is a supporter of the ceo brent saund ers and he says that he has no reason to believe that the investment is made for the purposes of influencing the management or control of the company. And dave wells of fargo covers allergan, and it is good to talk to you again. And what is your reaction of this one . Well, it is great news, and carl icahn is one of the greatest investors of all time, and it is a clear endorsement of the ceo Brent Saunders and the strategy, and health care, carl icahn has a great track record. And is that sort of just what the doctor ordered for the stock that had been under pressure since the pfizer fall apart. Well, he has timed it correctly. There is no change to what allergan does, but i think that carl icahn with the great timing has come in to place it once this teal is about to close in the next month, and the company with a big influx of cash, and detinue tral, and buying back stock. And what does that mean for allergan, and what they will do next from the strategic standpoint, with carl in there . Well, you know, in is a call that not everybody wants the get, because even though carl icahn is not call ing fing for activist position to be calling for the change of the board, but he is focusing on the shareholder returns, and the smart buybacks, and smart deas. S what rating on the stock currently . Buy rating or the outperform rating on the company. And you had that before you found out about this . Correct. And so you anticipate another sort of the deal of size to make up for the fact that pfizer is not . Well, no, i think that they will continue to do both deals, and they recently announced a big stock buyback, 5 billion stock buyback, and they might do another five or six billion, and they will see where the buyback goes, and the stock is at the end of, that and then decide. And how about more broadly in the space itself . Have we seen a turnaround to actually believe in . So far in the space, we are starting to see some suns of the improvement, and you know, the last two years is really has been a, or maybe the last year has been all about valeant, and inversions, and the problems with the sector, and recently though, we are seeing the Companies Step up, to put their toe in the water to do system deal, and Jazz Pharmaceuticals is announcing a deal. And the sector of the sentiment is starting the turnaround, but the the real turnaround has to wait for after the election. And back to us for a second, because you touched on it, do you expect to see more yields in the space going for war and you talked about people dipping the toe into it, and do you expect that to accelerate from hoar . Yes, from the last month or two, and there is a derth of them, and people will be much more careful on how they build their business model. You will see the strategic bolt ideas, and the promotion of deal after deal after deal, and that business is over. And david, josh brown. This is a historically pharmaceutical drugs, more defensive sector than not, and i think that the performance from 2012 through 2015 brought a lot of new investors into the group which is great, but then a name like allergan which drops from 330 down to 200 in the space of six month, and given that we could see it with the large cap names, what does it say for this group in the asset class, and are these trades now, and not necessarily investments at least for the more consecutive investor who had been historically looking for the defensive qualities. And when you see a stock going from 50 to 300 in a few years, you have to wonder, you know, what is built into that, and likewise, when you see a stock going from 300 to 200 in a year, you will get a lot of Value Investors who then come back to it as an investment, and not the story. That is what we are seeing in this part of the market right now, and in this part of the sector is a separation between what we are really interesting and fun stories before to what has a pipeline and what has cash flow, and what is investable, and in allergan, it fits that category. And david, thank you for jumping on the phone with the insight. Again, david maris on this one from fargo. And he has a long history of understanding the space, and well, to your point, he understands saunders as well and saunders at theest. Yes, but there is a similarity of the investment in apple, and the investment in allergan, but he is not coming in as an activist, but he is seeing the amount of capital from teva on the sale, and the tremendous cash, and the ability to allocate it back to the shareholders. I think that you can buy it, and i was buying it and i was buying it on the crack, because it is trading 15 times forward and they have 17 drugs in the pipeline, but to be realized if you will, and great balance sheet, and a great ceo, and i dont believe they need to do a deal. They could do it, but the pipeline is enough to carry them for the next couple of years. As someone holding the big position, you are happy with the news that you got . Absolutely, but i dont believe it is too late to buy it. And you own it . No sh, i got out of it. They were buying the may and the june options which is the trigger point for me, and i love the pipeline, but there are other big names after allergan has made off of the lows. Yes, the group is underperforming, and lot of values, and this is one of thema and shrewd move by icahn and he can come in and say that he is not an activist, and if he goes right, fine, but if he goes wrong, he can change the posture, and if you are watching, that is the optionality to play out. It is a good situation, and im not upset to be in the same name as steph, of course, so i agree with everybody on the desk. And coming up, we go inside of steve cohens Trading School exclusively to see how he is building the next generation of great stock pickers, and also, time to buy ahead of michael ko kors, and what does the desk think . And also, we have heated in the market, the dow is down, and the s p is down, and looking at the lows of the day, and it is defensive zone of health care and utilities and telecoms leading the way. Which control this joystick. No, im actually over at the ge booth. Were creating the operating system for industry. Its called predix. Its gonna change the way the world works. Ok, im telling my brain to tell the drone to get you a copy of my resume. Umm, maybe keep your hands on the controller. Look out ohhhhhhhhhh. You know what, im just gonna email it to you. Yeah thats probably safer. Ok, cool. Michael kors is caught in the retail wreck, and shares are down 20 in the last month. Our next guest is sticking with that name, saying that the now is the time to buy it, and the concerns are likely ooverblown. Aaron murphy is the analyst at Piper Jaffray and joining ounce the phone, and it is the call of the day, and erin, it is a big one. Thank you for having me on the show. And you know, you will hear a apparel retailer get upgraded and you say, how is this stock going to be performled in an environment where so many others are hammered . Well, it is a fair question, and when you take a step back, and you look to your point, it is a tough environment. Coming back to look at the brand, itself, and michael kors is a global brand and there is a lot more stability