We have a guest with us today. And now, yields are falling, and it is following a fed meeting that did little to bring investors clarity and leaving them dazed and confused. Pete, is that what this is about in the wake of what the fed said. Yes, and the fed has not given anybody anything they are looking for, the confidence and the uncertain factor, and ms. Yellen brought it up, and of course, next week, the brexit, and what is happening in the market . Explosive move in the volatility index up 40 in a week, and it had been running around for a low rate for a long time, and measuring between 13 and call it 14. 5 or somewhere in that range, and then suddenly, we get the spike and we are into the 20s and it is a much more difficult trade for all of of us, and that is a little bit of the sense of where are we in the terms of the uncertainty of what is going on right now, and then next week we will get a lot of things answered. And colbert, welcome back into the crew today, and how should we be thinking about the market, and the reaction today, and the volatility that we have been seeing over the last few days is mostly if not all fedrelated . It is all fedrelated. There is a lot of conflicting piece of information, but to petes point about the volatility in 2014, we had 32 days where the s p was up one or two percent, and this year, 32. So volatility is clear loin the rise, and manifesting some of the manifestation, and in terms of being resonant to go out into the market, you are seeing the larger ones with increasing cash held by individual investors and we havent seen these levels since the financial crisis in 2009, 2010. I am surprised by learning the fact, and you have a keen eye on a bunch of areas where you can see where the flows are going. Right. There is a tremendous net outflows and mutual funds, and etfs that is ultimately held in the cash, as the investors are receiving cash from the municipal securities and holding this em in cash, and the thing t could be a positive indicator, because once there is clarity in the market, you will see the money going back into the market which is going to fuel another rally. And you are generous in saying that im a generous person. And that we will get clarity. And maybe we will get some yesterday, josh, but it seems that in fact, we were left more confused, and the fed is downshifted its own forecast for the rates, and the investors are wondering today what all of that means if the rates could rise again, and if to play it at all, and what to you do in the forecast for the fed rates have been wrong six in a row. And now, here is the big picture, we are about to get a big bounce, and the question is what do you do with it . And that is what the people need to answer. So when you are look at the quote, unquote safety trade, and everything is overbought, and the gold gapped above where it fell in may, and now looking at the tlt, and way overbought, and 76 on the rsi and you are not seen a relative strength like that until you go back to the lows of the market. And your headline is big bounce coming . Yes, because they snap back, and you look at the more speculative areas, and way oversoe oversoeld, and have a look at the ibb if you will and think of it as a proxy for the people who take the most risk, biotechs and now down eight Straight Days and they have only been down nine Straight Days twice, and you think the down 10 or 11 days . So there is going to be a rip, and the overbought riskoff trades coming back a little bit, and you will see the riskier areas of equities getting a bounce, and then question is what do you do with it . If you are a strategic investor, and this is important, and you are looking at the picture where the cash levels and the portfolios are at a 14year high. And look at coll bare,bert s the highest levels. Yes, that is a very high level, and the bonds are at the highest weight, and the equities is way underweight, and colbert is correct to site the statistics and no matter the category of u. S. Equity. And joe, you think that we get a bounce, what do you want to do . Where do you want to be . Well, the bounce is going to be coming on the earnings and the acceleration in earnings, but the right thing to do is to take some cash level, and move them a little bit higher, because one week ago today, we were talking about the market technically breaking out, and the market has failed in doing that right now, and it has not broken out technically, and the environment you disagree with josh, because he thinks that we will get a big breakout well, a bounce. Bounce. And when you ask josh when the bounce is coming, and he could say tomorrow or a two week weeks from now or tomorrow. And i think that within the next couple of days imminent. And maybe it is going to coincide with the favorable remain vote poll or something, and i couldnt tell you why, but it is coming. I am not willing to play that game, and i was talking about technical breakout, and you were talking about the technical breakout last week and it failed and so we were both wrong in that instance, so you want to the look more for the longer term story which is earnings coming back again and you are also in the period of the S P Companies buyback window and it is a blackout period, and that is a significant driver of the equity performance and you are not getting it now. And jimmy in the notings, you are sticking with the high quality and high cash, and i get it, but give me the places that you want to be moving the money into, and there is real question as to whether you want to get out of the bondlike stocks and into more cyclical, and more offensive plays. I wonder if all of that is thrown into the question now that the fed doesnt seem to have an idea of where the economy is going, and whether this hunt for yield which is the lead of our show means that the utilities, telecoms and other bondlike proxies are going to continue to work. Yeah, let me draw a distinction here, because some of the tocks that we should be in are cashrich, and the dividendpaying stocks, but it is not because i want the yield in a low yield environment, but because i want the defense in the environment where the fed is driving a car with the front windshield fogged over and they dont know what is ahead on the road, and you have the brexit vote, and the tea leaves are pointing to the exit, and that not an end of the days type of event, but it is going to royal the market, and joe, you made a good point that if we get the end of the earnings recession, you can see a breakout, but heres the thing, the market is in a showme state, and it is not going to be anticipating the end of the earnings recession, but wait and see the earnings which are at least three weeks off, and really four weeks until it is going. And so i dont see us going anywhere and a lot of risk to the downside and that is why i want to be in more defensive ends and the pfizer and the merck or the gm or the cisco or the apple. Take a step back and i want to comment about the point of yield. Also, the market timing is a difficult strategy to execute, and just the factoid that i see research coming sort of compiled and if you had stayed in the market, and consistently over the last 20 years the annualized return would have been close to 10 , and if you missed the 90 best days of the s p returns that is negative 4. 5 , and that is a huge swing, and so the view is the primary determinant of mitigating the risk performance, and really just being fully vested in the market, and the investors as they are coming back into the market to have patience to go through the volatile periods would ultimately give them the best e return. Do you think that the fed hikes at all, and the house view at Morgan Stanley is not until december and goes through the election. Yes, and deeply politicize it. And that is your view as w well . Sgle, yes it is. You deplitize and get more data in terms of the economy in terms of the job growth and the wage growth and do it in december and re remo the politics out of the process. It is important to point out that a lot of what you are seeing on the screen each day is not being driven by human decisions about things like earnings and recessions, and here is wone very small example of myriad, and iwm which is a Small Cap Index and it falls to literally within one penny which is the l. O. D. And the core programs are wr written to look for these things to find the support, and when they find them to come in and buy. So it is really, really important not to look at the minutebyminute action and think that there is some kind of the grand narrative that you are not aware of it, because a lot of it is the machines trading with machines, and that is perfectly fine. And lastly, colbert, is the u. S. The best place to be . The u. S. Is the best place to be. The u. S. Markets . Yes, the u. S. Is best to be, and foal lllowed up by europe, of course, the brexit vote, and you have to know how the undo all of of the trade agreements to undo that market. And we hope to see you more soon, colbert of Morgan Stanley. Tomorrow, we will be joined by Jeffrey Gundlach 1 45 eastern time, and he is the ceo of the doubleline capital, and the post fed given where the world isle, and our eamon javers has more. The first marijuana related Software Partnership is a big area for Corporate America as more states are legalizing recreational or medical marijuana, and now, microsoft inking a deal with a Startup Company called kind financial out of los angeles who makes software for cannabis businesses to stay in compliance with the regulation, and they will add it to the Government Solutions package and it is called the seedtosale Compliance Software for the marijuana offices, and they tag the plant, and also kiosk them in the mblg mj businesses because they marijuana businesses because they cant have banking access. So they are going to be referring the clients through cloudbased government basis to the burgeoning marijuana business. And so now we seeing marijuana mainstream, and maybe a sign of the times and the high times you would say. Yes, exactly, eamon javers, d. C. Here is what is still to come. Apple is losing the luster again, and another analyst is lowering the outlook for the tech giant to today. And we will debate what to do with the stock at 95, and the gold is hitting a twoyear high, and the miners are on a roll, and it is petes winning trade in the halftime portfolio competition. Find out if he is sticking with it. And disney shanghai is open for business. We will get a peek inside of disneys big bet on china. It is all coming up on the Halftime Report. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Man 1 man 2 i am. Woman exmilitary . Man 2 four tours. Woman you worked with computers . Man 2 thats classified, maam. Man 1 but youre job was Network Security . Man 2 thats classified, sir. Woman lets cut to the chase, here. Man 1 whats youre assessment of our security . Man 2 [ gasps ] porous. Woman porous . Man 2 the Old Solutions arent working. Man 2 the world has changed. Man 1 meaning . Man 2 its not just security. Its defense. Its not just security. Its defense. Bae systems. Welcome back to Halftime Report and are more headwinds ahead for apple. One analyst is cutting his expectations. Ron hall is the analyst at jpmorgan who made the move, and joining us from San Francisco and the call of the day. Welcome to show, and good to have you on today. Yeah, thanks. Morning. Thanks for having me on. I thought that the most interesting frankly is that you didnt just cut the watch estimates, but you cut them in half. Yeah, we did reduce them quite a bit. We have seen the demand weak nes on that watch below what we had anticipated. It is a great product, but the traction for the wearables and people have not figured out what they want to use them for, and the features are still being developed and the point that we are trying to make today is that our unit number for the iphone in december is one of the lowest on the street at 68 mi 68 millid the reason is that we believe that predominantly macro weakness. We think that apple is being penalized for cycle issues and the fact that they have had the success with the 6s and the demand weaken and we believe it is a Broader Market problem and not apple specific problem and we are trying to make that point. And you are leaving the iphone units unchanged, but to make it clear for the viewers, you had taken them down to the lowest if not the noor lowest on the street . That is right. We have had a lot of questions about that, and so what we rolled out today is a deep analysis of the market, and what is going on, and like i said, we think that we are seeing clear demand weakness developing, and it has been there, but it is continuing to develop in places like latin america, and also apac and so we are seeing the deterioration of the demand and people need to be more cautious about that, and we are kind of trying to raise the warning flag here today. And you think that apple is being unfairly penalized i believe were your exact words. And i believe that there are legitimate questions of what the investors have about the pace of innovation, and the iphone cycle and the demand and the real fundamental questions that exist around this company. Yes, that is true. We take a different view on that. We think that in 2017 things are going to be looking better. I realize questions about the iphone 7 this year, and whether it is an incremental upgrade be and we suspect it is, but in 2017, the upgrade may be more substantial, but more focus on that and not focus on the macro issues going on behind the scene, and they are quite frankly already been affecting apple. Rob, it is jim lebenthal, and on the watch, your revenue is 22 times the projected for the iphone versus the watch, and should we care about the watch at all, and the second part of the question is what if anything can replace the iphone or at least come close to the iphone as a new big thing for apple . Is the car a possibility . Should we totally give up hope on the tv . Yeah, okay, jim, a couple of good questions. I dont think that you need to be too concerned with the watch right now, because it is not a big earnings contributor, and the focus on the short term and even the medium term is probably better placed on the iphone, and so, you know, maybe the product, the watch product will improve later this year, and we will see the acceleration, and we can raise the numbers again, but what we know about the demand for the product is that it is just not that high. And in terms of what could be next, though, i think that the car is a little bit of the red herring, and i think that more interesting products that are out there on the horizon is an augmented reality glasses, and that may sound crazy, but there are products out there that are going to be giving us overlay vision, and replacehe smartphone in the next five year years, and so, yeah, there is innovation, and products out there that, that apple could hitch the wagon to and see some growth momentum from in the future. And rod, i have to run, because i have breaking news, and to be clear, you have cut the price target to 105 from 125 and we hope to catch up to you soon, rod hall with jpmorgan and we will go to sue herera with the breaking news. Yes, indeed, it is sad news to report. And we told you earlier that the lawmaker jo cox had been shot, and well now police are saying that she has died. The british local police are making that announcement a few moments ago, and lawmaker jo cox has died and a man is under arrest and he is a 52yearold man and the only suspect at this time, and according to police she passed away a short while ago, and we refollowing the story, and they are not looking for anyone else in this particular incident, but there is more to the story, and we will be following that for you. And we are back in a moment with more. Time for the trader blitz, and yahoo is expected to buy over at citi . Joey. Well, it could easily go back to 40 now that the management is providing clarity on the auction process. And American Airlines is downgraded over the bank of america, and jimmy, the stock is down 30 this year, and i think that it is cramer this morning on the show that is like now . Now down 30 and you are doing it now . And i think that those were his exact words. And looking at the chart, it is a beatdown, and if you are shorter, and selling the shares here, two things that you have to believe either the momentum continues to the downside, and i share your infer dudulity on th and if you think that the sessions earnings are six times, and High Oil Prices are the thing to worry about, but they seem to be stabilize and the worst is in here, and you have to be predicting bad things to short the stock. And mixed bag for kroger . Yes, it is a tough one, from 2015 2012 to 2015, it was up 27 , and it has done nothing since then, and you can stay long, and looks like it is in a nomansland, and i would not be excited for any huge upside any time soon. And what about a night on our show last night when fred weighed in on redstone. It is had been one of the leading Television Networking companies in the buzzness and now it is falling to a level below any of the peers on almost any metric played by all types of problems including the e creative departures. Pete, you are long in there and a lot of people were talking about that freston last night . Yes, it is a name that i jumped into on a couple of weeks back and got on cbs and viacom and a nice run to the long side and for all of the reasons im in it is because of the reasons that tom talked about on the show. He talked about the brand and the management need s s to be shaken up, and if you believe in the brands which i do, and tom does, then there is something to hope for right now, and the hope is that they can change it up on thing management side, and if they can do that, this is a company to return to the highs. And look at the valuations of the company presently, and way too cheap. And crude is tumbling, and the Energy Stocks are taking a hit as