tv Fast Money Halftime Report CNBC October 19, 2017 12:00pm-1:00pm EDT
tonight it's paypal whose market cap is not that different. >> some in tech looking good adobe's up 11% >> a big day in the morning for ge and b & g, you'll be busy. >> and nike's come back out of this day, bold move next week where they layout innovation. >> let's get to the judge. welcome to "halftime report," i'm scott wapner. apple, stocks concerns over sales in china, maybe iphone concerns too is there a real reason to worry or should you buy today's dip? wi let's begin with america's best loved stock, the world's biggest company under pressure this hour on a couple different reports. josh, how serious should we be taking them today?
>> if you're an investor you want to always pay attention to what the news is and probably shouldn't discount anything, but the real question is do you react to it? so we actually went back and looked, every single iphone launch within let's say the span of six weeks there were supply chain rumors making their way to the sell side that generated either cautious notes. in other words, these things are never like, hey, we're hearing great things about the next iphone, time to get in you almost never saw those headlines. all the headlines we found were this is a reason to be concerned, orders aren't as strong as expected, this or that carrier. so if you've ignored them all, congratulations, you've made like 1,000 percent on your money. >> right, but this, steve, is not only about maybe questions of the phone and the watch and this connectivity question all of a sudden crops up out of nowhere in china that could take what some say will be months to fix. >> right well, they fix ds it in the u.s.
i recall the connectivity issues with wi-fi and dropping off. that's fixed in the u.s. i'm not so sure that -- >> this isn't -- this is a little more serious. >> no, i know it is. i'm not so sure that matters in the short-term so i don't think it's a surprise to anybody at this desk then or now that the auditors for the iphone 8 weren't going to be that robust because of the upgrades that were very minor relative to what you're going to see from the iphone x that's coming out next month. so who's going to buy it you're going to wait particularly if you have an upgrade in front of you. so i would buy i'd like to come down 5% more and really jump in. >> i thought you were already in >> i am in, but i'd buy some more. >> buy more. everybody on the desk owns it except -- >> i do not own it. >> joe. >> i do not own it haven't been in apple for quite some time and trying to make sure they all make money by not buying it for them. >> we appreciate that. >> i do. but i think you wait i don't understand why we don't hear what's going to come out with earnings. i think the guidance is going to be incredibly important.
i also think there's been over the last couple of quarters this new dynamic surrounding apple where there's less volatility surrounding the earnings release. i think this is a quarter where you're going to get elevated volatility, where's it going to go grab a quarter out of your pocket, but i think you're going to see volatility. >> i think this quarter is another freebie, frankly. >> but the guidance is key. >> but the guidance they have always underpromised and most of the time exceeded that. >> you mean because the pushout of the phone to. >> the fourth quarter. >> right, the fourth quarter. >> you're not going to get traditional numbers. >> right and we've both read the same reports saying this quarter really doesn't matter. something really admirational -- >> why doesn't it matter they don't have a whole quarter to sell a phone. >> you can't even order it yet the report coming at us november 2nd, so it's not just halloween that might scare people, it's
that but there's nothing in about the ten for that particular line. >> the type of person that would order a phone is that big of a die hard so to steve's point of course they're skipping 8 the people that don't preorder, it's like i'm up for a phone and wander into a store and get one, that's the 8 buyer the person who's on the line at 6:00 in the morning, the person who's ordering on the website two months in advance, that's the x buyer. it's the right point. >> we're all being dismissive it sounds like of the watch issue in china. >> the watch is not a big -- i mean, if thefulcrum of your earnings expectation for apple has anything to do with the watch -- >> isn't it a piece? >> it's not a meaningful enough piece. it really isn't. >> the bigger piece is are you going to be able to order an iphone x and get it before the holidays that's the big piece if you're not, that's a problem. >> maybe it's, you know, a minor part of the story as you guys say, but the overarching issue,
doc, is china messing around with apple. >> right >> that was a concern all the way back when icahn finally got out and said china was a big concern for him and now here we are again having a conversation about china and apple and a stock down nearly 3%. >> and one of the reasons the 3% drop is that report uncorroborated out of taiwan that they've cut the production -- apple asked them to cut production by 50% for the 8 and 8 plus that is the main reason people are selling. i don't believe it's the watch but, again, i think when i bought it at 149 on that almost exactly 10% correction, the stock's been, you know, great to own at that level. i don't think you'll get a chance to go down there again. >> that's the gene munster call, he nailed that one said it was going down 7% or 8% on the backside -- >> they had a launch where the phone was melting.
they had a launch where the phone was heating up it was bending understand what this company's trying to do which is sell a billion phones all over the world and have the supply chain that's unmatched there's nothing in history that even comes close, even the automakers don't even approach the complexity of something like this the fact that there are minor issues with a product or two, if you're an investor it's not why you make a move in a stock like this. >> but to your point on china what i find particularly troubling about china is what psi recently came out and said you big companies have to buy a substantial portion 10% at high premiums to state-owned businesses so china is now going from capitalism back into complete socialism and as a matter of fact they've changed the wording on their manifesto psi's going there. it's happening right now so that is the issue, what will it do to china but apple with china -- >> we have that here we have a president bellowing at the maker of air conditioners, how many workers they have to --
i mean, every -- pay your tax. if you want to be there you pay the tax. >> it's more significant, but apple's market share in china has fallen from 4% to 2%, now they're building it up so it's not that big an issue and you still have a major competitive case against apple given the price of the phones there and the features that are more abundant, frankly, than even the iphone. >> well, one wall street analyst says buy into the gloom and doom ahead of iphone x, brian white analyst at drexel hamilton, joins us live from the new york stock exchange brian, welcome back. >> thanks. >> guys at my desk are mostly dismissive of this stuff today you seem to be as well, yet the ceo of rogers communication calls iphone 8 sales anemic. why be so dismissive when a ceo of a major provider in canada says sales are anemic? >> because the story about this iphone cycle isn't about the 8, it's about the x and so we just got back from china on sunday. and we visited with all the
carriers we visit with component companies, we talk to our contacts, what they're doing, what friends are doing, no one is buying iphone 8 but there are a lot of people waiting on the iphone x. and i will tell you there are also a lot of people buying the iphone 7 so, you know, here we are order cuts, we get them every year, every iphone cycle as josh said. and we got a more anemic cycle here with iphone 8 but this is about the iphone x and so, you know, when you get a selloff on news like this which is really no news, you want to buy it that's what we're seeing today. >> you're not concerned at all about watch issues in china? i mean, i guess the quarter doesn't matter is what you're saying let's throw it in the garbage because it doesn't matter. if you're bullish, you're going to find a way to be bullish. >> well, i think the quarter will be fine what will end up happening, i believe, is that units could come up a little short in december quarter, but you're going to have less seasonality in the march and june quarter and some production issues with the iphone x come through.
as it relates to apple watch, i can tell you that the carrier supporting apple watch didn't get necessary government approval we were just out there that's the reason that this thing got yanked >> brian, it's josh brown. the stock apple's up 40% year-to-date including dividends, how much of the enthusiasm around the x, which i think we all agree is going to be a hot phone, but how much of the enthusiasm is already in this stock how much of apple's rally is just because it's a giant tech stock and everyone went crazy for tech stocks this year? can you kind of tease that out for us and give us some idea of, you know, whether or not it's already made the move? >> well, i don't think so, josh. i mean, when you go back to the downturn in 2013 to the peak in 2015, apple went up about 160% so that was trough to peak if you look at the trough last year, which is low 90s, and we go back to that same type of return, you can see apple well over 200 our price target's $208. so i think we've got a long ways to go. i like the fact that these
reports come out because it gives investors an opportunity to hop in. if we didn't have this the stock could be up $200 today that's been a big part of it. >> i want to get back to the question i asked you prior you're basically telling me, and you're telling our viewers the quarter doesn't matter no one's buying the 8. it's not about the 8 it's all about the x, so who cares. >> so the x matters. i think the september quarter will be fine we're saying that. >> what i'm saying is if it's not, you're essentially saying who cares. >> who cares doesn't matter i mean, the other dynamic you got to keep in mind here is the asp. analyst models have a lot of wiggle room on the upside on asp. so we've still got that going for us as well people are not going to focus on, you know, do they guide down by a billion dollars, $2 billion, who cares, this is about a company that just came out with the highest priced iphone in its history in the
luxury smartphone market that has a 3d sensor technology for facial recognition that no one in the world has this is a game changer so you want to buy it when it gets down like this. it's going to go well over $200 in our view. >> brian, do you have any concerns that people will order this phone and not get it for the holidays and is that impactful? >> yeah, definitely. there's definitely some people not going to get this for the holiday. they had a problem with the 3d sensor in a particular mounting technology called d.o.e. and that's going to prevent some people from getting it on the holidays the nice thing is that will extend this cycle. you're going to have a less seasonal march quarter, a less seasonal june quarter, so the cycle's extended so i think with the stock at 12 times ex cash, there's a lot to look forward to. if this was 40 times ex cash you might have issues, you might be concerned, i'm not this is a new cycle, very exciting cycle for apple. >> where does tax reform fit into the conversation if at all as it relates to apple,
especially around repatriation >> well, you're exactly right. they have over $240 billionov overseas, so when that comes home that will be enormous. >> -- stock? >> at 12 times ex cash in my view, no. >> what kind of upside does that mean for the stock >> well, it could mean a big dividend it could be more share buyback so, you know, when i think about a $208 price target, you know, i thought about some type of repatriation in that price target >> so $208 includes that kind of boost. >> yeah. we ex out the cash so i've included that in there but i want to be very clear that if we get the same type of rally -- apple behind the scenes is being revalued. that's what's happening, right you talked about, you know, people so negative, is this just tech rally the issue is people thought they were going to go the way the blackberry, motorola, all these other junk companies, right? because consumer company,
markets come in pressure and now raising prices on you. the great thing is they're going to be one of the last companies standing in this industry. one of the last. and that's sustainable and they're going to branch into other areas, you have home pod coming out, arvr, there's so much to look forward to at apple. when it dips like this on news, i want to own it. >> good last word. brian, appreciate your time today. >> thank you. >> brian white, drexel hamilton. >> to brian's credit, he's been bullish the entirety of the last decade, i would say, like since i've seen his research and he's worked it like a bunch of different firms but he's one of the guys that had the high target at different moments and was ridiculed. but he's consistently said that this is more than just consumer electronics. and that last point he made i think is the germane point, which is that it's not like there are 20 phone companies that era is over now you're basically an apple person or you're not an apple person and the people who are apple people will pay up for the phone with each iteration.
we've seen it. >> he threw it at the innovation cranks, weiss, said the phone's a game changer. >> for apple but name one thing that's on the x that's not been on other phones already. >> facial recognition. start there. >> it's on other phones. you're wrong. >> whose phone >> facial recognition on samsung. >> phones no one buys, listen -- >> samsung has a market share that's more than double what apple is. >> listen -- >> it's the largest phone in the world. >> in the united states you look at a map of android usage versus ios, it's very, very clear -- >> looks like an election map. it does. >> in the heart of large metropolitan areas there is huge pricing power for companies like apple to position it as a luxury device that pattern has not changed. >> they're a great marketing organization. >> well. >> they've got a network and ecosystem, great but i'm just saying, and i'm sorry it's blasphemy for you guys but you're not looking at
the competitors. they have not innovated. period, end of story there's nothing on that new phone that's innovation that doesn't exist already. that's fine. and, jon, they're not doing better because they have to go back and redo it, right? they couldn't launch the phone on x. >> but you have to admit they have pricing power. >> oh, yeah. >> absolutely. but don't tell me that they're innovative they are not period, end of story. >> i think too aggressive -- that's a 35% upside from where it is right now roughly, scott you know, his upside, 200 or 208 what brian drexel hamilton's target is for this particular stock. i think it's aggressive. i think after earnings and after the shopping season stocks somewhere in the low 170s, maybe high 160s. >> and keep in mind that they bought back stock. they borrowed money at 25 bips. >> one of the largest buyback companies there is. >> exactly. >> if not the biggest. >> right so my point is bring back
repatriating dollars doesn't mean they're all of a sudden going to be split. they could have done that. >> why do you have to be first to be considered an innovator? >> i own the stock. >> why can't you just do it the best >> they have done it they have done it the best. >> why do you say that you don't even know samsung had facial recognition how do you know? >> it doesn't matter it's who is the best at selling the phone at the highest price point with the biggest gross margins. are you going to say samsung is as profitable as apple it's not even on the same page. >> i've said that. i own apple, i don't own samsung. >> so who gets the reward in technology i got news for you, it ain't necessarily the innovator. google didn't invent search. they did their best -- hold on, hold on. apple didn't -- [ overlapping speakers ] >> orville and wilbur, are they not innovators they don't innovate? >> boeing does
they put stuff in their planes -- >> the wright brothers had the first one. >> it doesn't matter, the point is the competition -- i don't know why we're arguing i own the stock. all i'm saying is you're delusional if you think that they've innovated since steve jobs has died. they haven't >> that's the thing you think moved the stocks. >> i didn't say it was if that's the thing i thought moved the stock i wouldn't own the stock. >> disagree with you -- >> jason, bring out paper and crayon so i can explain this to josh so we'll get it please. >> what moves the stock and i joke around -- yes and pricing power. but i joke around about not owning the stock one of the reasons i don't own the stock is because i do own the stock. i own the stock through being invested in hedge funds and being in mutual funds. and those hedge funds and those mutual funds apple is at the top two or three of every one of those holdings. >> right a hundred billion dollar company, of course it is. >> that's indicative of the entire investment community. we all in some sense own apple.
>> we're watching the white house today as well. fed chair janet yellen meeting with the president about her future our eamon javers is following that story this hour eamon. >> yeah, scott, that's right we're waiting for a couple things at the who youite house t this very minute a few moments ago press secretary scrambled reporters brought them into the meeting room between the president of the united states and the mayor of puerto rico we should have a readout very shortly, but one of the things he said is he's predicting the success of the budget vote up on capitol hill today that's a change in tone from the president earlier in the day who said the senate was going to vote on the budget he said he thought we had the votes, that is we the white house had the votes, but who knows to now apparently the president more confident about that vote up on capitol hill we're also waiting as you say for janet yellen to appear here at the white house her appearance is not on the official schedule. they haven't told us exactly what time that janet yellen will be here. but we are expecting to see her this afternoon at some point to meet with the president. she will be the last of the five
candidates for fed chair that the president meets with to consider his options before we are told announcing his decision before he leaves for asia on november 3rd so at some point between now and then and any point between now and then presumably we could get a decision from the white house on who they're going to nominate for fed chair. will janet yellen be kept on it's an open question. it seems unlikely right now given that the president has said that he considers her -- he likes her and he respects her, but on the other hand the president might want to put his own stamp on the fed and pick somebody who will have a long tenure there and take the fed in a different direction. where the president will land on this is not very clear right now. i asked sarah huckabee sanders yesterday in the white house press briefing if the president still considers himself to be a low interest rate guy as he said during the campaign. she wouldn't answer the question yesterday though, so we don't know whether low interest rates are his priority here or what his decision making is going to be based on. but he will have met with all five candidates and at this
point it's anybody's guess when that announcement will come but we'll keep an eye out for janet yellen here at the white house, guys. >> watching the parking lot all day. thanks, eamon javers steve liesman, our economics reporter, is here now. who's a favorite at this point >> i think it's kevin warsh. i'm not really sure. his star had fallen in the predicted numbers, but he's the one who keeps coming up in terms of the surveys that are done look, here's what is definitely clear. no one outside the white house knows who the president's going to pick and no one inside the white house knows who the president's going to pick. i talked to a few of them on and off. it depends a little bit on the flavor of the day, flavor of the week that's how it goes back and forth. and it depends on who was in there last. >> all right so yellen's going to be in there last. >> she may shoot up. >> through your reporting what do you think what are her chances, put a percentage on it from what you know now. >> i think they're below 50% i have two reasons for that.
one is that the recent opposition in the gop. remember the gop complained for a long time about low interest rates and they talked about runaway inflation, the inability to sell bonds and all this stuff. and distortion of the market they criticize her and i think there are some inside the gop who still hold onto that criticism respective of results. and also think that a president is more likely to want somebody in the testimony chair before congress who's dpoigoing to say yes, tax cuts will lead to strong growth. yellen's been much more neutral about that sort of following along in the bernanke mode where they try not to get involved in politics she said, you know, if you do things that increase productivity, it will increase growth essentially a mathematical thing. >> this president seems like many other in many respects but he certainly does, mr. trump does, he likes talking about the stock market at record highs he does it almost daily now. >> and until she's gone -- she's definitely gone because until she's gone he can't take the credit for this that he
obviously so desperately craves. he can't say this is my economy, this is my stock market. he can't fully do it. >> he does that every day. >> yeah, but we already know -- >> tweeted yesterday, 21,000 -- >> we're talking about inside. he needs it to be his show. >> my point, steve, is he doesn't necessarily want to do something that's going to upset part of his narrative. >> that's an interesting way to think aboutit, scott, because appointing somebody like kevin warsh, i've said on this show, is the equivalent of putting somebody like scott pruitt, somebody comes in and doesn't like the organization the way it exists the question is how much he wants to upset the apple cart here the epa may be one thing, the fed may be another, something a little bit dearer and closer to his heart. the results of the stock market, i don't know that the market takes a dive on kevin warsh. the one thing you could say for sure, there's the predicted powell is now up there he's well supported by the treasury secretary, we understand i don't really know who has the
last say there are people over the vice president's office who have a say in this. there's kevin hasset who's the cea chair, he may have a say in this, there's gary cohn, there's a big bunch of people. we talk to some of the people around those people and it changes from day today. >> well, we're going to be, i don't know, reading the tea leaves. >> don't even bother reading the tea leaves just look at the president and see if he raises his right eyebrow. >> greenspan had the briefcase, see if yellen shows up today at the white house with anything. >> with her collar up or collar down. >> if she's walking -- [ overlapping speakers ] >> i know we got to go, but just remember yellen in jackson hole made very clear about her attitude towards deregulation. and she was very hard on that. and so some people read that speech as saying, mr. president, if you want to give me the job, here are the terms i take it under and that is not very strong changes to the existing dodd/frank legislation. >> this quick. if she's offered the job, is
there any chance she would turn it down? >> i think not i think she would take it. >> steve, thanks here's what else is coming up on "halftime report." what's up with the swoosh? nike gets a downgrade at goldman sachs. we'll debate the sneaker giant's stock in today's call of the day. plus, black monday 30 years later. we're breaking down the differences between then and now. plus, firsthand accounts from our experts. and, unusual activity with jon najarian he's tracking the key moves in the options market and how to trade them the "halftime reportwi stt" thco wapner and the traders is back in two minutes impossible to ignore. the strikingly designed lexus nx turbo and hybrid. lease the 2017 nx turbo for $299 a month for 36 months.
after ibm jumps at least 8% in one day, the bullish move tends to continue. according to our data partners at kensho, two weeks later big blue is up 5.5% and tech is up 1.6% this is a period where the s&p is up slightly for more go to cnbc.com/kensho we're back on "halftime. nike downgraded at goldman sachs today. the firm pointing to inventory overhang and overseas weakness it's our call of the day it's to neutral, but just another firm that's casting some doubt on where this company's stock can go in the months ahead. price target stays though at $54. what do we think >> i don't know. i think it's indicative of what
seaton was talking about last week basically someone walks in the analyst's office and say, hey, you've got this rating on it and you've got this price target, it's not going anywhere near that, why do you still have it >> the price target's the same. >> but you take away the buy rating, now it's at a neutral and it's basically been a yawn i don't see anything actionable in what they did. >> 3% up move doesn't justify. >> so down 9% in three months and space that's been hammered you know about under armour in three months now 20%, had a bigger slide over a longer period of time lulu down over that period the only stock that has been really difficult to knock off is adidas. >> yes and we have talked about that. and i think a lot of it is tied to the european recovery it's been way stronger than everyone expected. it also has tentacles that reach into the emerging markets with adidas obviously sells into there. so many have suggested the rally is coming to an end, i don't think it is. but i think clearly they're
gaining market share. >> and they've been fighting against that strong euro too, judge. just to joe's point, when we finally starting to see the dollar pick up a little now, many of us expected it months earlier, hadn't happened, that had to be harder on them to hold the numbers they've done >> i see it definitely i think they caught a fad at the right moment they had the right lineup. adidas is the superstars went crazy two summers ago. that's carried earnings growth for a long time, the stan smiths, i think they did really well in a lot of categories that they don't ordinarily sell a lot of product to, teenage girls, moms, they all had the shoes on and probably still will for maybe another year but i don't know that that's indicative of them being better at nike. i think apparel in general is very, very challenging. >> better in the greater sense, but if you can say better positioned that means a lot. >> it means markets. >> but it's fashion and fashion is tough >> this is tough. >> this is ultimately a fashion
business and fashions go under style and over style and to josh's point adidas and to jon's point adida is now a hot stock. >> they innovated. >> that's one of the things analysts said when they innovate but here's how i look at it, nike is still one of the best global brands out there. there's an inventory overhang as they're transitioning from retail, which is closing down stores, to more online i buy online from nike so, look, when that inventory is bled out, that's going to get involved and get excited. >> and half the sales are overseas. >> and we know the story going around the other day on one of the online blogs about how nike had a sale on its website of maybe up to 40%, which someone in the industry had called unprecedented, that you never saw an across the board discounting by somebody like nike. >> they do it on selected
styles. >> i get an e-mail every week from adidas about the sale they're running as well. and i think they really have to stuff it because of the fact that to maintain anything near the revenue number ultimately -- >> can we all agree though -- >> the euro's too high. >> -- up and coming generations just in general they are accumulating less apparel every year. >> accumulating less of everything. >> the pie for something like apparel has been clearly shrinking for maybe a decade and i just don't see like a scenario socially where that all of a sudden tuhat turns around and people want closets loaded with stuff. >> that's like lulu. i'm not saying now negative for the whole sector but basically u.s. and canada where they started. so they're not europe, they're not china. and that tremendous growth there are rumors about them getting into china in a big way and that to me that will drive this growth stock. >> but that's why there's always going to be volatility in the space. and you're going to have universal behavior when you see,
never buy and hold stock. >> we talked earlier in the week about say ibm getting this bump, right, stock's up 10%. as oneof the dow laggards that finally got a little bit of rebirth in the minds of investors even for a short period of time and we wondered whether other dow components would get that same kind of lift if the market continued to go up in its own right is this one of those names >> ibm is so idiosyncratic it's almost impossible to look at any other company in the same prism. it's a company that has not been able to grow sales in so long that even a hint that they're going to get back to just slow sales versus decelerating was enough in the case of nike it's in the worst category of the market right now. won't always be. at a certain point expectations will be flushed out. but this whole sector a atrosh so is it the best company in the sector maybe, but right now it's not what's popping people are not piling into these
names when they have good news so when they have terrible news or just okay news, i don't know why we're everyone looking at it go onto 50. >> not seeing 40% markdowns in technology whether it's hardware or software. >> 50 has been support it's knocked on that level and bounced very nicely multiple times. last few times it's got down to that level the bounces have been less vociferous and ultimately it's going to hit it one more time, get under you'll notice the buyers don't show up maybe that creates the opportunity. but it's not going to keep hitting 50, 51 and bouncing and not ultimately break through i'm speaking purely on technicals. >> nike's good for an activist to get into. i'll tell you why, i think their products are inefficiently run, they've got thousands of skews of different things. you don't -- >> all right show you breaking news here. this is the president moments ago white house he is meeting today with puerto rico's governor eamon javers back with us at the white house. eamon. >> reporter: yeah, scott, that's right. this tape you're seeing happened just a few moments ago at the white house. the president meeting with
puerto rico's governor ricardo rosello. he brought the pool in, white house cameras unexpectedly and took questions the two men talked for about 35 minutes. quite a lot of ground was covered here the president gave the u.s. response to the disaster in puerto rico a ten out of ten grade. the governor of puerto rico we're told did not put a number on it but said he's been satisfied and encouraged by what he's seen from the federal government and that is a point very important to the president. he has said leadership in puerto rico for the most part have backed him and his administration and fema's efforts there as being sufficient to the challenges that puerto rico faces today it looks like he did get that endorsement from the governor of puerto rico today which was an important moment for this white house. couple other points of news that we're told, the president said ultimately that we'd have the votes on the senate budget deal that's moving up on capitol hill earlier this morning he had said that he thought he might not have the votes or who knows whether we have the votes or not. today in just a few moments ago he says we have the votes.
and we also we're told addressed reports about russia uranium and said this is the real russia story while alleged collusion with russia by his campaign was a hoax many conservatives in washington feel that the u.s. uranium deal with russia has not been well enough covered in the mainstream media. they'd like more attention to that the president underscoring that point as well. but a long session here with reporters answering questions for about 35 minutes, scott. >> on that, keep ears open for anymore news eamon javers once again at the white house. coming up, 30 years after black monday, what have we learned are we safer today as investors? jon najarian rememrsbe that very day. so does the rest of our desk
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the greatest single day loss in the history of the new york stock exchange >> that's right. 30 years ago today wall street suffered through the historic black monday crash, a day which saw the market lose a quarter of its value in a single session. let's bring in cnbc's senior markets commentator mike santoli with a look at the differences and similarities between then and now. mike. >> yeah, scott, obviously i think you have to say more differences than similarities. for one thing, i think it's very important to keep in mind it was such a singular event, such a kind of a fluke confluence of things including mechanical failure that no set of conditions today would say the market ought to be down 20%, the largest market tomorrow or any other day. it's not that we have a highly valued stock market back then arguably as we do right now or a brand new fed chairman, which we may well have in a few months. it was that the markets globally were under a lot of stress in the months leading up to that
point. a lot of air underneath the dow was up 40%, year-to-date as of late august of that year, and by the time the crash began, so up to that crash it was down 17.5% off that high the prior week before october 19th of '87 the dow was down 9.5%. people went into the day of the crash thinking maybe we've seen the worst and then you had the further cascade. so i do think you have to keep in mind treasury yields, ten-year treasury yield went from 7%to over 10% in a hurry. the dollar was melting down. you had a fear of an overheat in the economy. and maybe the buyout frenzy had gone too far in terms of corporate merger all that stuff mixed together does not look anything like what we have right now. it was not a calm market ratcheting higher a gentle slope. not what we have this year not what we looked like in '87 i think you have a huge contrast there. you have to see a lot more stress build up in the system and a lot more volatility evidence itself before you have the risk of something like this.
>> yeah. 5,000 points would be a comparable drop today for the dow, which is unthinkable for many i'm sure there's memory on this desk as well, doc. >> right well, just as a really quick example, judge if you took apple in '87 was $0.73. it shot all the way up to $2 in the stratus phere in the day i did a one-minute look today at apple, the first minute of trading, it traded 7,300 times, traded 1.5 million shares in the first minute and that's $253 million worth of stock in the first minute. versus $60 million for the whole day. in other words, as things got a lot faster in our markets over these 30 years, there's a lot more liquidity there's a lot more access to the markets from, you know, there's not just the new york stock
exchange and nasdaq, there are 50 other markets that are lit and a bunch of dark pools as well. >> what were you doing >> i was trading on the floor, i was in ibm, market maker in ibm, we put seat belts on the toilets back then because, you know, it was scary. and people were losing their minds. but it created the opportunity of a lifetime, again, just from that apple fell from roughly $1.70 to $1.30 that day if you spent $13,000, it's worth $1.5 million today there are a bunch of examples like that. i'm just saying these crazy events do create great opportunity as well. >> quick thought. >> yeah, i started a business in '86. before i got in business i was tax attorney and manager that gave me access to the playboy mansion. i would say the excitement of that day was somewhere between the two. >> i don't want to know where you were in '87. >> so i was on the sales trading
floor. and i didn't have a ton of dough in the market, but it was -- i was able to observe unemotionally and just fascinating what was going on. but the volatility leading up to that day if you recall the market off such a lower base was trading up to 100 points a day. >> what was the difference in feeling between when you were trading in 1929 -- i'm sorry and 1987 >> the close much more natural fibers back then. >> we have news crossing as we speak. cnbc's phil lebeau has consumer reports most reliable cars phil. >> scott, this is a report that comes out every year after they survey more than 600,000 subscribers on what works or doesn't work in their cars here are the three most reliable brands according to consumer reports, this year's report has toyota moving up to number one from number two last year, what's interesting here is kia now in the top three in terms of most reliable. at the bottom of the list, ram, gmc and look who plunged into last place cadillac, dead last in this
year's report from consumer reports. there's one other piece of news that will get a fair amount of attention today. consumer reports is out with a prediction on the reliability of the tesla model 3. they have yet to buy it. they have yet to test it at their facility in the northeast, but they believe that the tesla model 3 will have average reliability, par for the course is the way they're summing it up they say the simplicity of this vehicle compared to other tesla models should help it limit the number of problems with that vehicle. as you take a look at shares of tesla, i should tell you we reached out to tesla to see what it has to say about this prediction from consumer reports and boy did they fight back saying that this is absurd and also saying consumer reports automotive reporting is consistently inaccurate and misleading to consumers. guys, i'm sure this is not the last of what we've heard on this issue of consumer reports predicting the reliability of a vehicle that really is just starting to roll out there's very few impressions that are out there.
>> it does sound rather absurd, to be honest, phil, reviewing a vehicle that's not even there. come on. >> they claim they can do it based on what they've seen with the model s and the model x. we'll have more on this coming up on "power lunch" and also on cnbc.com we talk with the people from consumer reports. >> all right look forward to that, phil, thanks. >> you bet >> jon tracked unusual activity and it's a two-fer how he's usingptns t oioo trade both "halftime report" is back after this zar: one of our investors was in his late 50s right in the heart of the financial crisis,
and saw his portfolio drop by double digits. it really scared him out of the markets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets- i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65. having someone coach you through it is really the value of a financial advisor.
. we're back on the half jon najarian brings us the double dose. we've got to stop saying today >> almost every day. >> overdelivering. >> i'll try to do that >> lending club, lc. this was down harder earlier today. made a little bit of a recovery, right around the $6 mark, traded down to $5.70 or whatever early on in the premarket. now it's at 6 bucks. they come scrambling in right away today and they bought, as you'll see, the november 6 calls. so with the stock under 6, they came scrambling in, bought about 9,000 of those i believe they've now moved that to like 12,000 in total volume at that strike these are trading for like 45 cents, i think, judge. so you've got a time frame, november, and a cheap shot up side, i'm in this one, will probably be in it two weeks. >> what else is on the list? >> second one, fcx, the minor
you mentioned. down 12 cents. they're aggressively buying the january 16s. so i'm just citing for you the difference, not shortterm way out in january they want more time, obviously i didn't by the 16s. i bought the 14s out in january. and i'm going to be selling these. why? because i'm moving the odds into my favor more. not making it make as big a move for me to make money i'll probably be in this trade maybe two months. >> all right come on back this way. crude having its first negative day after four straight up sessions. we are going to go to the futures pits to find out what 'ldot xtn xt wel ine o"halftime. income in an uncertain world? pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over $120 billion dollars in real assets.
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welcome back to "the halftime report. i'm jackie deangelis crude oil under pressure today down under 1%, poised to snap a four-day winning streak. is today's move just profit-taking or something else behind it? >> it is a little bit of profit-taking. we heard from the citigroup analyst potentially when the deal between opec and nonopec, for instance, russia, ends in march, maybe russia doesn't continue they're going to look at u.s. producers and maybe kick it back up into gear i think a little concern of that is putting pressure on it. if you look at the charts, we had a nice breakout here there are other things going on that longer term i believe oil could push higher. right now i think it's time to profit-taking. i think we take below 50.
>> jim, what's your take, higher from here, as well >> i think higher from here. the trend the third week from june is still an up trend and intact on the shorter term, if i get 5150, hovering right around there now, to me it will mean this pullback is very short term and we're continuing higher in the short term >> all right meantime, i want to thank you guys and tell you to tune into the online show. we're going to talk more about the crude trade at 1:00 p.m. eastern time we're talking oil expert tom cloeza on what could drive the commodity to $60 and the godfather of technical analysis ralph acam pora, the 30th anniversary of black monday at the top of the hour futuresnow.cnbc.com. final trades with the halftime guys in two minutes. i think it's terrific. your kids go to college and you start trading. >>yeah, 5 years already. 5 years, hmm. you ever call your broker for help? >>once, when volatility spiked... and?
>>by the time they got me an answer, it was too late. td ameritrade's elite service team can handle your toughest questions right away- with volatility, it's all about your risk distribution. good to know. >>thanks, mike. we got your back kate. >>does he do that all the time? oh yeah, sometimes he pops out of the couch. help from real traders. only with td ameritrade. that's why a cutting edgeworld. university counts on centurylink to keep their global campus connected. and why a pro football team chose us to deliver fiber-enabled broadband to more than 65,000 fans. and why a leading car brand counts on us to keep their dealer network streamlined and nimble. businesses count on communication, and communication counts on centurylink. your bbut as you get older,ing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain
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to connect those ideas to the world. along with urban redevelopment projects worthy of the world's top talent. all across new york state, we're building the new new york. to grow your business with us in new york state visit esd.ny.gov. all right. time for "final trade. dr. j, you're up first >> bright house financial. an insurance play, down from 75 to 60. they step in and aggressively buy calls. that's my final trade. >> the adobe quarter >> all-time high today for that stock. >> the guidance for 2008, that's exactly what you want to see and i also think this speaks to the entire software space, s.a.p., microsoft, red hat. >> united. i was obviously disappointed in the quarter. capacity -- quarter was actually okay capacity guidance, 3.5%, a little more than i'd like to
see. you've got to buy it here. >> all right josh brown. >> i'm going to stay with apple. i accept the possibility that it could drift lower, as we get into some more news about the 8. i don't think that's the major story here, and i like it. >> worst day in a month for that stock. you don't see apple down more than 2% all that often "power lunch" right now. >> i'm melissa lee here's what's on the menu. remembering the crash. we'll talk to three wall street veterans about the day that shocked the financial world, including the man dubbed the most photographed trader on the street. learning to catch a fish no, not the animal, but a phishing scam. scamming people out of thousands when they buy a house. and trump meets yellen the president sitting down this afternoon. which is the best for your money? we'll debate that. "power lunch" starts right now