This now for at least a couple of weeks. How big of an issue is it . Its a big issue when we get into january, and we hear from corporations what the impact has been and what the impact Going Forward could be. Secondarily what will the chinese do as it relates to deappreciating their currency. Why do you have to wait until january . No, its not. No, its not an issue. You are not going to get the headlines from the companies who are going to cite the appreciating dollar. You dont make the moves now . You have to have the reality of it in the upcoming quarter. Right now you have to focus on a market that has clearly reversed the expectation that president elect trump coming in would be bad for stocks. Its about fiscal policy finally being put into place. Lastly, i just asked why is it that we are always looking for the exit sign when the market advances . Thats been the mentality over the last seven years. It hasnt worked. Whether the trump rally to the magnitude people have gotten it to is justified. Justified and rallying this much before mr. Trump even gets into office . With the anticipation of what is he going to be doing, yes. I think giving you a great opportunity to start looking at some of those. Whether that means its apple or some of the namsz, amazon, the fang stocks, if you will, those stocks have absolutely been taken out to the wood shed recently, and thats where i think if you are looking for opportunities, to joes point, if you think this market has any legs to the up side, i think those are the areas that have been beaten down. We were in the 19s before this. This is a pretty staggering move to the up side, and you would expect to see a pullback after a week like that. Kevin oleary. Merrill lynch says the yield dam has broken. Others are talking about bank of america also downgraded. Barron downgraded bank of america today. They say the book profits are in the banks. I agree. I actually think that one of the underperforming sectors for 2017 will be the banks from here. Let me explain why. Lets go out and look at that tenyear. Yes, had a big move. 2. 26. Whatever it is right now. Lets give it all the way to three. We end up at three. Thats still miserable for the banks. If you have bank profits because of the massive deregulation, which will be more to replace. Dont get so happy. I think you take your profits out of this. Im going to call it a bit of a head fake in financials. This will be the sixth time people have said please make it stick. Please stay up this time. Please grow from here. Guess what, theyre going to break your heart one more time with feeling. This time seems to be different, though, right . Rates are going up. Theyre expected to go up more. At least dodd frank could be changed just a bit to help out the banks. But its always different this time. Until its not. Because i argue that dodd frank change, that is not on the first 1 00 day agenda. Remember, were going to repeal obama care first and then clean up the tax act. Thats his hands full for 2017. If you are telling dodd frank inside the tax package, i dont think so. Youre going to have a lot of push and pull within congress on that one. This is something people are still scared of deregulating banks. I think were way too optimistic. Hey, listen, thats the way im playing it. Im taking my prochts on financials, and im banking on another sector which i think has been beaten up even more. Some of the preceps of that. You actually get to that. It might be six months. Might be a year. Might be a rollback and benefits those guys as far as regulation. Is it the same true about obama care . Youre absolutely right. Meanwhile, im picking up north of 3 dividend waiting for these wonderful things to happen. You cant say that about any of the financials or at least the bulk of them because you have the risk of a turndown on your valuation. Youve had a 16 move in some of these regional banks. They could break your heart by losing 5 , 6 next week. I think theres too much volatility. Give me the diversification of medical supplies, of biotech, pharma instead of just one thin needle of Financial Center banks. Thats my argument. Who is taking the other side . He is wrong. The regions are going to pull back. Rsi has exploded to 77. Thats way over bought. There will probably be a pullback, but this is a historic breakout out of a tenyear range on the kre. These names are going higher for reasons that are not limited to the fact that ten year rates are higher. Thats where the bulk of those books are keyed off of in ermz it of the loans. When you look at full employment and lending come back, all of these play back into the hands of of the regionals. I would welcome a pullback in these names as an opportunity to reload or to get involved if i missed them. The breakout is for real. Its convincing. The volume is tremendous. I think its got legs. Its not just about, oh, President Trump or, oh, the twoyear note is now yielding over 1 . Theres a lot more happening here. Kevin. I want you to save that tape. Im going to make him eat those words. Its coming to like you did with long facebook or long apple . Well play all the tapes together on a loop. I think you and i will probably have a tie. Absolutely, but my point is dont get sucked into this financial move just yet. Move made 16 in a week. Take some profits. Put them in the bank and diversify. I dont think this is a secular move yet. Its going to break your heart when he finally gets in and says, look, we cant completely wipe out dodd frank. Its going to take us two years. I have other things on my plate i have to work on first. Kev, the regionals are not as affected by dodd frank as the Money Centers and investment banks. You agree with that, right . I do, but even if we get to 3 on the tenyear, thats not enough meat on the bone for these guys to actually get to play ball because the regionals are lending to businesses, and they still have massive Capital Requirements. They got to keep tons of cash on the books. You have a repeal those laws yet. You have lousy spreads, and they have crazy Capital Requirements. They have too much cash where, there hasnt been enough demand on the lending thats been the problem. They already have the cash. The issue is nowhere to put it where theres a rate of return. That could change if the economy stays where it is, and you get some juice. It happens. Im just telling you for all of this excitement about trump, lets admit one thing. This im not excited about trump. This happened real fast. By the way, did i not call it on the wine index out of philadelphia . Those guys in philadelphia told us trump was going to win. Remember that one . You did. What about the overall rally . I mean, kevin makes a point. You are getting too optimistic about the banks . Are we getting too optimistic overall . Some suggest not. How about the fact that we already is this going to go up in per pet out . It wasnt just a trump rally. We were moving before that because the earnings that we had gotten, scott, were phenomenal. There was some great earnings. Oh, by the way, kevin, you were talking about yields. You look at jp morgan. You are getting 2. 5 . You talked about 3 elsewhere. You are getting yield. Youve got all you have to do is all of a sudden start seeing that yield curve, and all of a sudden we all are starting to hear more and more whether its rosengrin or whom ever talking about december. Now theyre talking about 90 the fact that theyre starting to raise that. Theres a lot of reason the banks have room to run. The rally has room to run or not. Hold on. Heres what gary cohn of Goldman Sachs heres what gary cohn of Goldman Sachs told us yesterday. The question to me is how strong can the dollar be inle that starts having unintended consequences in the u. S. Economy . We have to be careful that we modulate the value of the value, and that we can continue to grow jobs in the United States. Okay. Yes, sir. Mr. Dollar. Yes. I answered that. January. The time is not now to worry about it. The time right now is the same nar joe that we had in august. The banks began to rally in august. September, everyone said the same thing. Theyre going to pull back. The story is over. What is different now . I dont understand why ken support excited about this. Kevin is going to see a loosening as josh cited of all the liquidity thats been trapped on bank balance sheets. Youre also going to see a surge, kevin, increased dividends. I know thats something you get excited about. Were talking about the banks. Im trying to talk about the rally. Because the banks im talking about the rising dollar. The banks itself are the story. The rally itself in the marketplace is not so much the story as it is right now. The fixation that institutional managers have on banks. Thats the opportunity right now, and thats the opportunity Going Forward. If you want to talk about the market again, well just become closet indexers, and well just take an index fund and trade the index fund. I dont want to do that right now. Banks are the only trade then for you. Right now banks are the trade. The trade. Not the only trade. Weve we havent had earnings increases on the banks. Weve had p. E. Expansion. Thats all weve got so far. All of this excitement is about the fact that earnings will be subsequently quarter after quarter in 2017 getting better. If we get deregulation, a loosening of Capital Requirements so all of a sudden those regionals we talked about are going to be freer to make money wherever theyre going to lend it. All of this is pe expansion. Kevin, why has the russell gone up 10 , far exceeded Everything Else in the last ten days . Ill tell you why. Because all of those small businesses, all of those shark tanky deals, all of those small guys that had have been buried in regulation in every sector did. Strengthening dollar does nothing to hurt them. And, kevin, the reason that its gone up 10 in the last fwo weeks is because financials have 27 weighting in the russell index. That identifies for you how underinvested institutional Money Managers are right now. Theyre racing. Theyre scrambling. The next highest weighting is 15 . Thats why the rally is occurring right now. Thats your evidence why this is really the turn back. I dont agree. Theres an optimism coming into the market, and the other 70 of the russell 2000 that feels that all of those companies that have been held back by an overregulated environment and overregulated market and just those animal juices that were all talking about, that wonderful feeling of optimism that President Trump has brought back into this market, even though people thought it wouldnt happen, thats why you are getting that action on the 2000. I think the russell 2000 is going to outperform the s p next year, because its going to unleash small business, which has been waiting for for years. I agree with kevin 100 on that. He is absolutely right. The russell is breaking out right now, and i think when you look forward over the next couple of years, i think it outperforms the other major s k indexes. Judge, when you look at what you asked at the top of the show, other than saying lets drill down into one sector, i know kevin likes health care a lot more than financials. I do think financials could see a bit of a pullback here. I wouldnt liquidate out of all of them, and certainly for our clients were not, but, judge, weve moved 1. 5 since november 8th, election day, says through right now. 2,174 for the s p. It was 2,140 when we closed, and we all know weve made that vshaped after hours weird move. Well, its a 1. 5 move to the up side. The market itself as far as the rally doesnt mean its over. As far as over extending at some point 16 move, that is a lot. We ask whether at some point rising rates and the rising dollar kill the rally. Well, right now, right now, tech is in the middle of a twoday bounce. You are seeing the eem find support of the rising 200 a bounce because it got obliterated over the prior however many days in a row. I dont know about obliterated. Its down. Bank stocks got obliterated. True. True. The in a case, the big names, cisco is going to report tonight. Theyre having a little bit of a bounce. The eem is finding support at the rising 200 day. Thats very important if you want to be conduct constructive on risk assets. You cant have a freefall in e. M. Again. That precipitated the flat market here in the u. S. It was just that risk off sentiment from elsewhere that we experienced for two years. I think if you can get some constructive action in areas away from, you know, whats been working the cyclical trade, i think that you have got the grounds to say we have a leg higher into yearend. Im looking at the Technology Stocks that were talking about here, and if whether you want to have the fang stocks, how about even just looking at just broadly. Look at microsoft. Look at some of the names that were taken out. A couple of dollars down, scott. Unjustified i thought. So i think there are opportunities in the market. We look every single day for opportunities. You look at what was being sold off. Is facebook really 114 stock this morning and suddenly its 117 now . There are opportunities in the marketplace each and every day. Do you buy the fang stocks back . Yeah. I told you, i sold puts in facebook right there as it broke through 200 day here, scott. Im short the 115 puts now in facebook. In amazon, i shorted them at the 200 day, which was approximately 700 why did the fang stocks go down so much . Were they a source of funds to put into the banks and other areas . Yes. Well they were they were one of many sources. Then if we think the banks are going to keep going up, where is the money why would we go to the fangs if we think money is coming out of them, fund trades and other areas. To joshs point, i think that move has been made. Emmoo, i dont think facebook keeps slamming to the down side. This is 135 stock. Down to 1 14. Can you imagine a serious professional investor admitting to anyone, yeah, i liquidated facebook so i can chase the banks that have just run, you know, 12 . No one in real life is actually doing that. I think its a little bit more subtle. I totally disagree with that. In real life they are in portfolios doing that. No one is admitle it and saying this is my big trade. I just got slammed in the fangs. Now im going to sell them and go chase the bank rally. I think you have a higher probability of not a rotation back, but a little bit of a seesaw affect. I wish they were pretty close friends, do you think . I would say no. All of a sudden trump gets in there and what was really leading the push down . I am sorry. I just i reject that. I totally disagree with you. When amazon goes down, what else goes down with it . The fang stocks in general go down. Facebook, amazon, apple, netflix, they all went down because trump got elected . So we its because he called them out during the election . Maybe potentially he will go after them. You can laugh all you want. If you own amazon, you wouldnt be laughing watching this thing go bang, bang, bang, bang to the down side. The second trump gets in there. People im telling you, scott, what you dont understand is people who own amazon as that thing is going down, theyre selling facebook and the this is a guy who has a list of political enemies, and he has been vindictive throughout his life. He has been involved in thousands of lawsuits. Jeff besos is tweeting at him congratulations. It probably killed him to do it, but he was looking at his stock price. First of all, kevin made great calls. To a lesser extent the one name i think you buy aggressively is netflix. Netflix is the one name that is not owned as much. Okay. Does trump like netflix . Yes. Fang goes down together. Fang goes up together, right . Thats why theyre fang. Yeah. Yeah. Sometimes. If amazon is leaving thats why they if amazon is leading them to the down side, the rest are coming with it. Thats why the stocks are coming down with it. Kevin is sticking with us. Heres what else is coming up on the Halftime Report. One of the biggest investors in the travel space on whether the sector is right for investment. Brad gerstner is one of uniteds biggest shareholders. Where does he stand on the new bare bones overhead spaceless tickets . Plus, a big call on disney. Will the magic return for the stock . More halftime with scott wapner and the gang two minutes away. Alpha seems more elusive today. Is it because so many go after it the same way . Chasing after short term returns. Instead if getting caught up with the crowd, the Investment Managers at pgim take a long term view, teaming specialized active investing with riskmanagement rigor, to seek out global opportunities. We manage over a trillion dollars this way, attracting many of the worlds leading investors. Partner with pgim. The Global Investment management businesses of prudential at the Marine Mammal center, the environment is everything. We want to do our very best for each and every animal, and we want to operate a sustainable facility. And pg e has been a partner helping us to achieve that. Weve helped the Marine Mammal center go solar, install electric vehicle charging stations, and become more energy efficient. Pg e has allowed us to be the most Sustainable Organization we can be. Any time you help a customer, its a really good feeling. Its especially so when its a customer thats doing such good and important work for the environment. Together, were building a better california. Welcome bah being to the Halftime Report. United airlines announcing several changes at its investor day yesterday, including lower fares called basic economy. Well, Brad Gerstner the founder and ceo of altimeter capital. Brad, welcome back. Good to talk to you today. Hey, scott. Thanks for having me. Its good to be back, and congrats on all the incredible anniversary coverage. Thank you so much. Its good to have you on. Lets start before we go to the investor day, which certainly is getting a lot of conversation, the buffett investment, how surprised were you to hear about it . What do you think it says about where the airlines are today . You know, i would like to say that i was terribly surprised, but i, you know, had suggested on twitter back in april i wouldnt be surprised to see brookshire invest. This industry has been transformed through consolidation. It has incredibly strong balance sheets. Much more durable earnings than theyve ever had, and theyre trading as cheaply