The markets. Jp morgan did not use brexit ate my homework as an excuse to imply lower numbers. Jp a lot of people were nervous, they did not take that bite. A great relief. Financials up right across the board. Earnings trends, only a few of them have been beat. And i want to show you whats going on here. Since these companies started reporting, this has been their stock prices. Alcoa, delta, jp morgan, every single one of them. Lets take a look at the banks. It is very traditional for banks to go up a little bit. Thats jp morgan and sell off after it. And banks are leading, up about 5 . So far just this week. The head of the Worlds Largest asset manager getting a little worried. Heres larry fink on squawk box. Here we are. Were seeing investors worldwide pausing. We have seen quite a large sum of money being pulled out of equities over the last year. And yet were at record highs. This rally in my mind is not i dont think we have enough levels to justify at this moment. Reaction now. Guys, good to have you with us. Ill start off with you. Im guessing you agree with mr. Fink. Yes, we do. We actually think whats happening right now is the world is definitely taking a pause. But were seeing additional stimulus. And that additional stimulus, why it may push money into equity, its going to put a huge bid on bonds. I think thats going to continue to be there. Within equity, we think earnings will come in at 118, and theres still going to be bright spots. But it is overvalued. The p. E. Multiple is overvalued. Rob, its interesting, because you can go through a lot of the conventional and say why should we pay two times the multiple for negative equity growth. How do you justify whether or not we deserve to be here with the market we have on hand to trade . Thats entirely the point. I think the fact is you probably dont chase Consumer Staples here. Just like you dont chase telecomm and you dont chase utilities, all of which have been bid up prior to recent market events, as people have searched for dividend yield in the absence of any real yield in the fixed income markets. So i dont think that you chase those things. I think what larry was talking about, and he is is consummate wall street insider. I think what hes really saying is theres so much obfuscation of data. Theres so much nullification of analysis, its a direct result of Central Bank Policy worldwide. Its really difficult to get at the fundamentals, the underlying fundamentals and do a traditional analytic analysis of that data and make wellreasoned investments based on that. Couldnt the same be said of bonds . Actually, bonds are even more overvalued. Which mitigating factor is going to reign . And the biggest mitigating factor is policy. And policy is creating a positive Interest Rate differential between the negative yielding japanese swiss, german, european. That puts it in incredible demand and we cannot underestimate that. So when do we see a rotation to the areas that are not overvalued at this point . If were looking for relative value here, and i use that term loosely, were looking at energy, industrials and health care. Energy still performing reasonably well even while oil quietly retraced so you think relative will be relative outperformance, but you think thats going to happen . Yeah. To the prior point, i think were sort of forced to go with that. There are central banking forces at work. They have laid out the topography of this market and theyre dictating the way we pursue it at this point. Guys, thank you so much. Gina and rob. One thing, guys, before we go on to note is it happened a few months ago, but now more than ever, for the First Time Since 1959, the average dividend yield in the s p 500 is higher than the average bond yield. You can go to ten years or 20 years. If you look across the bond spectrum, you wonder why anybody would buy bonds. At these levels. Exactly. It goes to the point of, they talked about utilities and telecomm stocks. When the safety plays are now overvalued, as many people argue utilities at 25. Where do you get safety in an unsafe world . Herbalife. Lets go to scott walker now, bill ackman sounding off on herbalife and valeant in an exclusive with scott on halftime just a few minutes ago. Hey, scott. Good to see you guys. Bill ackman rolling out his 18th video in 18 business days. On herbalife. This one a distributor for that company talking about what bill ackman calls false and misleading claims about the company. Ackman on the Halftime Report a few moments ago defending that position, still convinced that it will work out in his favor. I think this thing is going to end up with the government being a pyramid scheme, or capitulating to changes. And in either circumstances, the stock is not going to be 60 a share. Trading at 14. 5 times earnings, you get obliterated. Thats why, while weve been a patient investor here, i think this is the most attractive herbalife has been from a risk reward standpoint and thats why weve stayed short. A painful place where that investment has been for mr. Ackman, as most of you know. His break even point is in the low 30s. That stock is trading right around 60 a share. But as he clearly said, he is staying short. Herbalife, for its matter, hitting back, and hitting back pretty hard today, saying among other things, that its time yet again for bill ackman to move on. We also moved on and talked about valeant. Our scoop yesterday about that massive stock sale from the former ceo mike pearson generating a lot of headlines. Five million shares, nearly 100 million worth of proceeds. Bill ackman today calling that sad. The fact that mr. Pearson was forced to sell those shares. He did say that he anticipates valeant selling noncore assets, some at least by the end of the year to pay down some of that big debt load, more than 30 billion. Heres what bill ackman had to say about valeant. Remember, he is on the board. The stock still suffers a lot from uncertainty. On. Theres been a pretty big overhang. Big shareholders have sold out. I think theres still a lot to be clarified about the story. So i think joe will be ready for that conference call. The headline on both fronts, Standing Firm on herbalife. Thinks that it will work out in his favor. And on valeant, Standing Firm that he thinks joe s joe papa right guy. Theyll be able to sell some of these noncore assets. He may be Standing Firm. Are his investors going to stand firm with him . Thats a good question. The one i love was your question to him. What would happen if herbalife got bought, and ackman was extremely adamant. Herbalifes market cap is only 5. 5 billion. I was surprised he was so certain. Private equity firms have their own uncertainty. But thats who bill ackman is. Why would a private Equity Company go in, if there is any wif of the idea that the federal trade commission. I agree. Hiff of the idea tha federal trade commission. I agree. Hes convinced that theyre not. Could be. Speculation about herbalifes future had been much talked about for the last years, right . The idea that it could be taken private was out there and rumored about years ago. If not by now. Nothing will happen until its out of the way. Im merely saying he would be so sure that there would be no private equity buyer because he is so sure. Guys, respectfully, i would disagree with that. Risk arbitrage part of that is, maybe herbalife would be at 80 a share if it wasnt for the ftc overhang. So if somebody comes in and says, our Analysis Shows theres zero chance of the ftc doing anything, thats what risk arbitrage is. Im not saying its going to happen. I have no idea. Im just saying its one of those things i think about. As you start to think about the end of herbalife. Herbalife greenberg of pacific square. Scott, youre going to stick around to continue this conversation. I have no idea what bill was thinking when he went into valeant, because it was something i had written pretty negatively about. I fully agree with him on herbalife. I think the wild card on herbalife that nobody is talking about is it almost has nothing to do with what the Justice Department does, they get a fine. What really is possible is the government could do nothing in terms of really, you know, suing herbalife. But what they can do, and the ftc has the ability to do is tweak rules. If they tweak these rules because remember, its not just herbalife. Its an entire multilevel marketing industry. And by tweaking rules, which the government has not done, because there are, as herbalife says in its filings, no bright lines on which way they can go. I think it could have a profound effect. If that had a profound effect, thats what somebody would wait to see. That has to be cleared. Obviously the lobbyists are in there. I would suspect every day trying to make sure nothing happens. But one thing bill did is he bought a huge spotlight on this. I think the other thing people forget in this entire concept is herbalife has made a lot of changes. You have to ask yourself, why did they make all these changes in an effort to, quote unquote, clean themselves up. Did they do it because everything was fine . They dont have they dont have one point. They dont have the ability to firmly control those distributors around around the world because theyre supposed to be independent. I think herbalife would be the first ones to admit, and i believe they have. In interviews with me and in comments theyve made throughout the years, maybe some practices by some people some of the time with respect great and thats why theyve made some changes. Thats different from the government coming in in a fullfledged shutdown. You dont have to go to a shutdown. Like i said, they can tweak rules. The rules are not tweaked. Herb, the issue, though, for investors at this point, if youre looking at it from a long position or a short position, is if you even wait for those rules to be tweaked and tweaking can have a profound impact. Thats an unlimited amount of time. And whats interesting, he said something to the effect of hes going to remain short to the ends of the earth. I mean, this sounds like its an emotional position, and as you know well, it has to be at this point. Right. And emotion should not enter the picture when youre an investor, invested in other peoples money, i would think. Who was the guy who was short for so long in those mortgages . It was written up in michael lewiss book. He had to wait and he waited and he waited. Years of pain. Ackman is used to waiting. His campaign way back in the day against mbia, the morning tgage insurer, was a fiveyear fight. He endured an investigation from Eliot Spitzer and he won because ultimately he was right. Well, i dont know. When i covered mbia. I was very early on the mbia story, i was always intrigued that i could call bill up and say i dont understand something here. Theres some nuance i found somewhere. Hes like, well, if you look at footnote number ten on page 265. I think, how the hell did he know that . He knows this stuff, chapter and verse, but there is the emotions, and that gets you to valeant. Ive got to be honest with you. I said, valeant . This person went through explaining. Im surprised that bill didnt get it back in may of 2014 when mike pearson ive got to just tell you. Mike pearson went out and made claims about the company that he had to step back on about how big this company was going to be. Im just shocked that people did not understand that he was actually lined in the street back then. Weve got to let you go, but bill has been right, to your point. He was right on mba. Took him a long time. Hes down 50 on herbalife and a lot more than that on valeant. Last time i saw the cost of his position on valeant was 125 a share. The stocks at 22. Hard to be that wrong for that long. Right. Well see. See what the exclamation point is on the herbalife story. Absolutely. And well see whats next. Yeah. Time will tell. By the way, bill ackman called andrew left of sit ron a pump and dump. Weve got him on fast money to respond to those allegations. So this will continue throughout the day. There you go. I look forward to seeing that. Consumer reports famously loved teslas model f when it first came out. Then they had concerns about reliability. Then they kind of loved it again. Now theyre calling for the company to make some changes to the model s. What those are, coming up. Welcome back to power lunch. Check out shares of big blue. Ibms stock is up on the day. Working on its seventh straight day of gains. Its 11th gain in the last 12 days. Its up 33 from the market lows back on february 11th of this year. The tech giant is slated to report earnings on monday after the closing bell. On average, analysts looking for earnings of 288 per share, on sales of 20 billion. Back to you guys. Whos up in the open championship . I saw your tweets. Phil mickelson just missed a putt to shoot 62 in the first round of the british open. He shot 63. Just letting you guys know. Wow. Now for the weather. Teslas autopilot too much autonomy perhaps too soon. That is Consumer Reports headline today. They are calling for tesla to disable and rename that autopilot feature saying it gives drivers a false sense of security. Its the same Consumer Reports that awarded a 103point rating to the model s in september of last year. Lets bring in laura mccleary. Phil lebeau joining us as well. You guys loved the model s when it first came out. I think it was the highest rating any car received. Then you were concerned about reliability. What are you concerned about and what do you want tesla to do now . The truth is that from the beginning, weve been raising concerns about autopilot. When you go back, we did did give them a poor rating on the reliability factor. All the same, theres a lot of good things in the autopilot system. However, the autosteer function was connected and we dont attribute cause to a fatality, and that caused us to take another look at the data. We are calling on the company to ask them to disable the autosteer function until they can bring their vehicle in line with all the other manufacturers that have such a feature on the road by requiring drivers to keep their hands on the wheel. Okay. Im going to come in here for a second here. Sure. As tragic as it is, it is one death. Theres 30,000some vehicular deaths a year. We dont know if the driver was watching a movie or Something Else. Why this type of action off of this one tragedy . Well, were not the only once asking, obviously. The national highway Traffic Safety administration, the National Transportation and safety board and the s. E. C. Have asked tesla to be more transparent about what happened with this crash. But when Something Like this happens with an emergency technology, we do ask questions and we ask questions from a couple consumer perspective. Thats why every technology to date has always been. Its time to ask questions. Im sure theyre trying to get to the bottom of exactly what happened in that fatal crash. And theres probably my point is that so often in these cases, where systems are alleged to have failed, Something Else ultimately services that explains what went on. My main question is, when Consumer Reports does Something Like this, does it affect sales . I dont think its going to affect sales here. Consumer reports is very influential. But in this case, i dont think its going to have a huge impact for a couple of reasons. First of all, the tesla buyer generally speaking is still going to be a tesla buyer. I dont think theyre going to stand there and say look, Consumer Reports wants them to take off the autopilot feature and rename it. Im not sure im going to buy in the meantime. Can the autopilot feature be disabled . Theoretically, it could, but ill tell you what, after one incident and we dont know if there were other incidents, but if theres just one incident here, i dont think that tesla will turn it off or rename it. There is an element here of you should be aware of the technology in your vehicle. This is a choice. Consumers dont have to use it at all. Our concern is that consumers have been sold the autopilot promises on technology thats really been oversold. This is not a selfdriving car, and therefore the name autopilot wait a second. But laura, who said it was a selfdriving car . The name autopilot suggests that consumers can check out and tune off whats beginning going the road. And other manufacturers have acknowledged theres a big handsoff problem. As human beings, were bad at checking out. Absolutely. You just said it, laura, as human beings. You didnt say it was the car. You said as human beings, we have this tendency to check out. Thats why the marketing of a particular feature has to be spoton and clearly communicate the risks to consumers. So calling something autopilot overly suggests that the car can be in charge of the road. So if they just rename it, is it okay . If they say auto assist instead of autopilot . That would be a big step. Thats one of the things that were calling for them to do. We also think they need to bring their technology in line by making sure the drivers have their hands on the wheel. Only after three minutes. The car would drive itself for three minutes before giving an alarm. That is a long time at highway speed. So full disclosure, ive got to chime in, because we keep talking about so, i have looked into getting a tesla. Im going to be perfectly honest. Ive inquired about them. As a car guy, i am not going to buy the car because of autopilot. Ill just throw it out there. Its nice. It exists. Is that what attracts you . No, im a handson guy. Im a control freak. You like the styling. I have a long commute. I spend a lot on gas. But what will influence my decision is Consumer Reports overall rating. When Consumer Reports came out with a 103 rating out of like a 100 scale, i personally it piqued my interest. Sure. I agree with you, brian is it enough to persuade me or others from going in . Well, we have to say what we think about the performance, the reliability, and now the safety feature that were concerned about. So we always evaluate our positions based on what the evidence brings. Asking for a friend, how is the reliability . Well, you can check our ratings for that, certainly. Weve raised concerns. And now were saying look, theyve oversold one of the safety features. The autopilot as a package has a lo