fivr as well and next week i think everybody's expecting to get that direct listing from slack as well. >> that will be big. >> not to mention a ton of focus on the fed for obvious reasons and the upcoming g20 meeting so rest while you can this weekend. for now, let's get to the half and the judge at hq. >> happy father's day too. i'm scott wapner front and center this hour, the broadcom broadside, the stock getting hammered did hopes of another leg for the rally just get pounded as well it's 12:00 noon, this is "the halftime report. >> announcer: five days to the fed, but economists are weighing in today we have new and exclusive information. a big question mark for the chips and tech after broadcom reports quarterly numbers. the technicals are saying something very important about this key part of the tech sector stephanie link's making big moves in two big names >> i think chewy may be it >> announcer: and is this the next big ipo to get in on?

"the halftime report" with scott wapner starts right now. >> welcome, good to have you with us on this friday, our investment committee at the desk today, josh brown, stephanie link, jim lebenthal, the chief investment officer at boston private wealth is here, liz young is bny melon's director of market strategy, anastasia from jpmorgan private bank and let's begin with the broadcom story. it's one heck of a buzz kill today. price targets cut across the board, lots of stocks in that space are down shortly, not jus broadcom, amd, lam research, micron, you pick it in the chips and it's getting hit pretty hard >> the chips have two things working against them the first is they're like one of the last true global cyclical sectors that exists that have any real market cap and any real size so you see a lot of people

express their views about the global economy in those equities and obviously, the tariffs are an issue because of how much cross border work needs to be done in order for chips to be manufactured, shipped, et cetera so there are huge question marks and that's happening at the same time that we're getting a slowdown in cloud spending at the enterprise level as i've said on the show before, it's highly likely that corporate capex peaked for this economic cycle in the third quarter of 2018. everything so far that's come out since then has indicated that we are not going to see a resumption of that level of spending and a good deal of that spending happens at the cloud, at the server and so chips are both economically sensitive, they've also got the secular thing going on with companies spending less on the hottest areas within chips and look, there's no pity in this group. they're high beta names, they get punished relentlessly when one of them is bad news, they all go down, amd is a great

example. here's a stock that hit multiyear highs. i think it hit three or four year highs on monday, it's down 12% in the 4 days since and that's in a good tape so that's like what you can expect going forward for the semis and that's why i'm not, like, racing in to buy the dip in something like broadcom >> so, liz, the ceo says we're currently seeing a broad based slowdown in the demand environment which we believe is driven by continued geopolitical uncertainties. this is a wake-up call on how destructive the trade war has been to certain industries, is it not >> absolutely. i think the real question here is are we getting to a point where we've raised tensions so high that they're hard to reverse? and i don't really know the answer to that on an individual security basis i think other people on the panel can probably answer that better than i but we are getting to that point where as an industry, as a sector, we're -- we can't reverse all of the damage that's done and even if we get a deal by the end of the year, it doesn't fix any of this >> so, cramer, this morning,

calls it truly depressing broadcom call and he had such high hopes going into it because he's such a fan of the job stuff that hock tan has done truly depressing, a solemn hock tan, not good for the group, obviously, i thought he would have something up his sleeve, it turns out he did not >> this company also didn't lower numbers last quarter when everyone else did so they hadn't seen it yet so i actually added to it today because -- and this is a new position for me and i'm slowly legging in because i realize this is volatile >> today's day one of the buy. >> exactly so it's a very small position to start and by the way, i sold intel a couple of weeks ago and i'm using that money to buy this because i think this truly is quality on sale and that's my style. i want to buy quality when it gets hit this is the number one management team in the industry by far and they just derisked numbers. >> you think they still have cred, though you said they didn't take down numbers last time when everybody else did, they wait until now.

and then they cut their guidance and get smoked >> i think they thought they could probably make up for wireless and storage weakness which is what we thought with better synergies from c.a., which they actually did see better synergies from c.a., they raised their operating margins by 3% in the quarter and that got overlooked the most important part is 60% of this business is networking and data center and enterprise and that business remains strong, going to grow double digits and already did grow double digits in the quarter that's 60% of the business, you still have synergies from the c.a. and i think the valuation is absurd, 30% discount to the group, free cash flow yield of 9%, dividend yield of 4%, buying back 7% of their shares outstanding this year alone so i feel like down here, the risk reward is pretty interesting >> so, shannon, you own it and you bought it at the beginning of the year. you stay with it or you bail on it today steph makes a compelling case as to why today's a good entry point. >> it is

and i actually agree with a lot of what you're saying, the reason we bought it back in february is we were becoming overall less constructive on the economy but we felt like if you wanted to have some exposure to a cyclical space this was, you know, you have to sort of take your bet within the semi space and we bought this based on the free cash flow, based on the dividend yield i think from an execution standpoint, i think we looked at last quarter and said, well, this is management just being a better execution team than what we've seen in the other parts of the space so we still want to buy it i would say we have a full position already we'd actually like to add to that but we want to wait a few days to make sure we get some of the sellers out of the market. >> jim, we highlighted a note, june 12th, couple days ago, probably saying we told you so the chip space is messed up and it's going to take more than -- longer than people think to get back on its feet to the point where it can really start performing again so, where are we now for somebody who owns -- not broadcom but other important names in the space

>> intel and corvo, intel is my safer way to play it the chips, that is but there's some great data out there and i think we all know this the semiconductor industry association puts out monthly and quarterly figures and when you look at the trajectory of sales over the last 6 to 9 months what you see is that 2018 was a great year, it was up meaningfully the fourth quarter of 2018 was flat the first quarter sales were down 15.5% april, which is the most recent data down 14.5% and yet think about this semis are up on the year take a look at the socks or smh, it's been all over the place but what that's telling me, at least, is that the market believes that this selloff is due to inventory pull forward, inventory stuffing in the advance of tariffs okay if that's the case, then we go one of two directions. we either get a china trade deal in which case demand picks up and that inventory gets run through and we're all fine or we don't, and the demand that we see now, down 15.5%, year over year, is where we stay and chips are in trouble so the reason i'm pointing this out is that the market is

telling us, again, through the chip space, it's telling us that it expects a china trade deal sometime soon. if not, the chips would be off far more on the year >> so the interesting point, i think, liz made a great point in raising the question of whether you do so much damage and destruction from the trade war that you can't reverse it immediately. the market's got this view and we've heard it on the desk too, you get a trade deal, market rips higher and everything's great again and and the businesses can just snap back in ways that they've already made adjustments that they have been unsure about when there's going to be a resolution >> definitely two parts of the story. first of all to your point about disruptions already in place in the markets, companies are seriously thinking about their supply chains and even if we do get a china trade deal this is not going to be a quick fix and going back to status quo because we're hearing from companies like iericson noek ykia, for exe they're relocating so i think

that damage, so to speak, is irreversible however, if we think about a trade here, if we do get a trade deal with china, or trade detendeten detente, if we get a rollback of some of the huawei restrictions we could have a snap back in semiconductors semis before today were up 9.6% because the hopes for a trade deal were starting to build once again. so i would actually be looking to pick up some of this secular semiconductor stories on the pullback i mean we talked about cloud datacenter spending, we've hit a soft patch a little bit from the 50% growth rate last year but i think that's going to start to come back up 5g, artificial intelligence, these are all semiconductor enables businesses so i would look at those names. >> i think that's a really great point. the volatility is not in the earnings the volatility is in the sentiment and so if you have a deus ex machina that comes along where all of a sudden you flip a

switch and say you know what, trade tensions are off, look at this signed piece of paper i have which is probably a chinese food menu but whatever, all of a sudden it's not that the fundamentals have changed so much for these semi companies but it's like a cloud lifting and that reaction could be instant. it could be algorithms first and then people coming in once they're already up 10% and taking them up 15% even if you're including short cover so i think that's a great point >> so do you take any of what's happening in the chip space and say, you see, i thought maybe the tech trade was a little ahead of itself in the -- to begin with and this is further evidence of that >> well, the big thing that you're seeing in tech is this bifurcation of businesses that are, i would call them asset light, recurring revenue model businesses that have not lost a step at all. they're all at all-time highs, you want to talk about service now and workday and crm and i can reel off 30 of them at this point. those stocks have not been

trading on tariffs they move a little bit with the nasdaq but they're doing their own thing and then the chip stocks are right in the cross hairs so if all of a sudden you have a rotation and people say, okay, i just made 50 straight points in the software company, i couldn't even tell you who the ceo is but now all of a sudden there's action in the semis that's positive and we've taken trade off the table, yeah, you could see the nasdaq continue to roll but with a whole new group of stocks hitting the 52 week high list while the prior winners take a pause we've seen that throughout the post crisis period time and again in different areas including tech so that's not out of the realm of possibility so the implication is, yeah, you should be looking at some of these semi names that are down 20 points or 12% this week as in the case of amd and say, this is an interesting way that i can add some potential upside to the portfolio. >> that's just the point, actually, because i thought i would walk in this morning and the stocks would be down 5%, 6%, 7% and they're down -- it's not pretty, right, i mean, i own a few of them but it's down like

2% or 3% and the really secular stories, the ones that you want to own for the long-term are down like 1% so you know, i think that these stocks have already had a correction, they rallied huge off the december lows, but they've already had a correction and yeah, maybe they're anticipating a trade deal or some sort of reds lusoln there but i think the valuations are already capturing so much negativity and the good quality companies are getting thrown out with the bad >> i take your point you look at the overall market and you could say, on another day, boy, a company like broadcom, which is so important, and they really cut their guidance and the nasdaq's down 0.5% and the overall market isn't down all that much either, i'm wondering if it's because it seals the deal for a rate cut and the market's taking any bit of bad news as a positive because it may not seal the deal today but it could help, you know, wet the envelope at least to seal it >> i don't think it seals the deal for a rate cut. i still hope that the federal

reserve watches economic data more than it watches stock movement however -- >> maybe this is both, right maybe this is -- >> maybe >> -- a further sign and maybe the clearest one, you know, most recently that the trade war is having a really negative impact. >> well and what it could do is bake through into consumer sentiment and then that becomes an economic number but what i think we're seeing here is stocks are number one expecting that the fed is going to prop us up in the meantime and then eventually we get a trade deal so, it's like we're just expecting the next six months to be kind of preventing a nose dive in the s&p from the fed and then we get a trade deal maybe late in the year and everything takes off again. >> but the data today was actually really good >> right >> i mean, right >> right >> that's what's -- you're in the conundrum. manufacturing is horrible but the consumer's actually -- they're showing signs of life and then even the industrial production numbers and the capacity utilization numbers, i mean, we're not going down i mean, after the numbers today, gdp could be for the second quarter 2.5% instead of sub 2%

that's a big change. >> it's the great conundrum. why should the fed cut rates when the stock market is 2% from a new all-time high and the data continues to come in pretty good and you can easily make the case that if you and liesman's going to be here in a moment, that if you combine the gdp for the first and the second quarter, so if you're doing, maybe, 2.5%, you need to cut interest rates >> liz hit on something really important. just real quick. i think what you said is really important because you're talking about how the consumer loses a little bit of confidence and that becomes an economic data point. i feel like the transmission mechanism of the stock market is faster than ever to hit the consumer, especially when you look at umish where people are upper middle class that are answering these surveys and they do know what's going on in their portfolio. the transmission mechanism from weakness in a semiconductor company to consumer could take six to nine months stock market, could be a one-month story. >> before you guys answer that,

steve liesman has a rapid update for us, literally right now. which plays right into this conversation steve, great timing on this. what do you have for us? >> yeah, scott, put all the data together, the strong retail number sales, decent industrial production, business inventories, we're now at 2% for the second quarter remember, this is a number that's had a one handle through most of the quarter and the data that's come in and it's up 0.3 from where we were before. here's some of the forecasts, bank of america agreeing with stephanie, they're up 0.4% atlanta fed comes up 0.7 to 2.1, action economics, 1.9, deutsche bank and joe at 1.5% and 1% respectively there you go there's the forecast out there and then the third quarter is running 2.1% so first quarter was 3.2% we put it all together, the fourth quarter at 2.2% and if w do this one and the next one

it's a 2.4% economy and i think your question is a good one. if you have a federal reserve that believes the potential of the economy is 1.8% and we're running 2.4%, do the math, does that auger for a cut and i know we were talking about that interesting stuff there, what's happening from trade and what's happening in the manufacturing sector and capital spending which have all been on the weaker side but it's the consumer that seems to be pretty strong here and at least for now, holding up the economy with stronger wages and plenty of employment that's out there, scott. >> amorosa >> appreciate the point about the gdp tracking now 2% but i think as the fed you have to look at the preponderance of the evidence and sort of the other indicators, the forward looking indicators so if you look at global pmis we're just on the cusp of 50, if you look at new orders they do not look good and then you couple that with a payroll story that we got last week, if you look at employment, the cyclical sectors of the economy are basically created no net new jobs for the month of may. then you couple this with the inflation story, core pc

inflation for the duration of this business cycle has undershot the 2% and on top of that throw in trade uncertainty, business confidence that is starting to pull back and i think it's that's what's ultimately driving the economy, so i think the fed is certainly not a done deal to liz's point but i think the preponderance of the evidence is starting to build. >> steve i'm going to go out on a limb and say that the fed, and you know better than me, that the fed doesn't think it made a mistake in december and if it cuts rates now, you could say it's an admission that it did. and they're going to come back and say, well, we could hike in december because the economy was strong enough to do so and you just told me that we're going to do 2.4% in the economy and that's evidence that we made the right move and now you're calling for a rate cut >> i'm going to agree with about half or a little bit more of what you just said, scott. i don't think the fed thinks it made a mistake, especially if you had that first quarter gdp number at 3.2%, hiking that

quarter point did not seem like a mistake to them. whether or not that would make them more reluctant now to cut from a -- it sounded like you were talking about a kind of bureaucratic inertia idea which is we don't like to admit publicly -- >> or it's just we don't think we mad an error by raising so why do we need to cut now, six months later >> i think what you need to have and i think the last speaker there was spot on, a meaningful change in the outlook and i think this is a time the fed's going to get together next week and they're going to take a look at their outlook and they're going to see if it's worthwhile to mark it down or not, both their unemployment outlook, narrow inflation outlook and their growth outlook and right now i don't think they can mark their growth outlook down meaningfully in terms of what is out there in the economy and the existing data. if the fed is data dependent it's a tougher hill to climb to cut rates. however, if it's going to say, we have all these prospective

issues out there and challenges to the economy and it's going to kind of move away from the data dependence, then i think it could make that case a little better certainly not in june but perhaps in july. >> steve, thank you for that rapid update appreciate it. fits so perfectly into the conversation the next question then becomes, liz, is the market hads ahead of itself, the market way over its skis in thinking the fed's got our back 100% and as early as july, if not before. >> so, two parts to that answer. i don't think the market's ahead of itself in thinking that the fed has our back i think the market's ahead of itself in thinking that the fed needs to have our back i don't think that there's enough data telling us that they're going to need to prop this up throughout the year and now i think we've got three cuts priced in through the end of the year >> that's right. and the probabilities of which keep going up. >> right >> right, the percentages keep increasing >> that absolutely is ahead of itself so the fed funds futures is almost the market's wish list. the market would love for the fed to cut rates three times and just prop up stock prices but that's a shortsighted goal >> if you break the market's heart, if the fed does that, it

doesn't get the wishes that it has, what happens to stocks? >> i think they pull back. i think this is clear, at least a couple of cuts are clearly priced into the back half of this year. i think the market continues to look at things like when consumer confidence is negative or declining we look at that as a good sign for the fed to move. if it's positive, we attribute it to everything else. so each economic data point is given a rationale why the fed should discount the positive ones and only focus on the negative ones because the equity market is very much focused on the fact we're going to get those rate cuts in the back half of this year i think the economy is deteriorating and i think there's rationale to potentially cut rates but next year, and not as a result of what we're seeing in the economy right now >> the july meeting is going to be bananas can you imagine the anticipation at that moment to get powell and the message from the fed i can't even wait for that >> they'll have to message starting next week >> but still >> and they'll message for a month, that's what they'll do. >> what happens if we don't get

the message? what happens if the message that the market wants doesn't come through? do you agree that stocks pull back can the market -- >> i just don't understand what problem -- what problem with 25 basis point rate cut is addressing i literally don't understand access to capital is fine. there are no stresses in the system look at credit spreads it's a joke. what are you doing what do you think is going to change in the economic picture from a quarter or a half a basis point? absolutely nothing if anything, you could actually make the argument that this prolonged period of endless -- endless capital -- >> it would be a new era it would be one of preemptive rather than reactive >> you do the cut. all right. then what are you watching to say this cut helped? probably stock prices. you definitely not watching wages because wage growth is not a problem right now. >> and they know there's a 6 to 12 month lag between monetary policy changes and coming through into the economy so it's going to take a long time to

figure out if it did affect anything >> how many will they do while they wait to see if the first one worked >> we're talking about the fed and china trade deal we don't have to put up the wall of worry but a host of rather big bricks in the wall of worry but the fed has its eye on the middle east and i've been around, i've seen the middle east heat up and cool down, it's a lot hotter than usual. the last time a mine went off in fact persian gulf or the gulf of oman, a few days later we had destroyers shelling iranian platforms. i'm not saying that's going to happen but history is a guide here things are hotter in the middle east than usual and you take a look at great britain, okay, you've got the polls leading to boris johnson, that's not going to add stability that's going to remove stability. these are things that add to the conundrum. >> and yet, stephanie link is not concerned overly or you wouldn't be adding to positions like you chevron. g.e. verizon. aptiv.

>> yeah. >> you're a buyer. >> yeah, i am a buyer but i'm a buyer on the bad days, right every other day it's like one day the cyclicals work, the next day the defensive works. >> you could be a sitter on the bad days but you're not. you're a buyer >> i am a buyer but i'm buying balance. i'm buying a little bit of offense and a little bit of defense. offense would be aptiv because it's down 17% from its highs and trades at 14 times earnings and they're an industry leader in the auto parts sector. g.e., i've been talking about this for a long time, this is a two-year nontrade for me because it's a turn around story led by a very strong leader and i think they have misexecuted for so many years, there's so much hello hanging fruit there that you don't necessarily need the power business which is a big part of the business and big part of the company, don't need that to really recover so on the defensive side is chevron and verizon. chevron is a 4% dividend yield and they have a great balance sheet and they're buying back $5 billion of stock this year and next and it's a fabulous management team and then verizon's trading at 12 times forward estimates so i don't know which way trade is going to

go i don't know which way the fed is going to go but i think there's value out there and you cannot ignore when stocks get hit so hard. thab that said, i am trimming l 3, up almost 40% on the year, it's a great company and they're merging with harris and i think it's time to take the chips off and google, i was so upset by that quarter that now you have regulation on top of that quarter and then they're probably going to do a cloud acquisition on top of that no i prefer facebook in that. they're basically trading at the same multiple, by the way. so i -- >> you sold your entire google position >> i'm market weight now but i was substantially overweight for a while. >> what do you think you should be doing now, buying on the dips like steph is or not >> there's a couple of things that we should be doing. so, well, actually, three things first of all, if you hold equity exposure i would continue to hold it but i wouldn't necessarily chase the upside here in the cash equity markets. i think there's the concept of renting the upside for the prospect of the rate cut from the fed. i think the fed probably ultimately will have market's

back because historically when the probability of a rate cut was more than 85% the fed tended to deliver on that so i think sometime in the next three to four months we could see some call options outperform. the last idea i would share with you is gold. i think gold is one of those things that could play in many different scenarios to stephanie's pointed, we don't know which way trade is going so gold is the hedge against some of that geopolitical uncertainty and we've seen that play out so far month to date and if the fed does end up cutting rates it's the real rates that should be trending down, what is a positive for is gold last but not least, if growth is actually fine, but inflation picks up because the slump in inflation is transitory, what is that good for? lower real rates and higher gold prices so that's probably the highest conviction >> gundlach is on the gold play as well. >> good company. >> yeah. what do we think elsewhere? >> about gold? >> just buying weakness in the

market or not. >> well, that's a function of what kind of strategy you run. there are people that don't have to be fully invested at all times and probably they're not right now but if there are people that do have to, then what stephanie's talking about makes the most sense you're looking for a balance of companies that -- stocks that could really work if the tariff cloud is lifted but you don't want to put all your eggs in that basket because who knows with this guy and who knows with china and who knows how long this could go on or whether or not it gets worse. i own verizon, i think it's a great call here's a stock that is giving you roughly double what you're getting in a ten year, is not involved with chinese tariffs except maybe on some small equipment issues, but you don't have to worry that that story. it's a primarily domestic story. and as rates plunge, that could even -- that could even work in your favor for the people that own it for the dividend components so i think that's smart. >> we will continue this after this break

here's what else is coming up on "the halftime report." >> i think chewy may be it. >> reporter: cramer's call on this brand-new stock is our call of the day. >> announcer: do you want to bite into chewy? before the break, our data partners at kensho on what happens after broadcom drops 5% or more in a day it's happened four times in five years. when it does, the stock trades positive 100% of the time a month later. by an average of 8.39% for more, go to cnbc.com/kensho. "the halftime report" with scott waerndherarss ckpn a t tde iba in two minutes [sfx: turntable - needle scratching record]

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make your xfi even better. upgrade today. call, click or visit a store. hi, i'm receistephanie link the "halftime report" and we want to hear from you. send us your questions at cnbc.com/halftime and we'll get to your questions at the end of the show. >> announcer: go to cnbc.com/halftime or get us on twitter with #askhalftime. welcome back, here's what's happening at this hour european authorities are blaming russia for using social media to influence the european union elections last month based on a preliminary review, russian linked groups and other nonstate actors made an effort to spread misinformation and also depress voter turnout. airline prices are increases according to an expert at

jpmorgan jet fuel prices have decreased strong demand and the summer travel season is what's pushing fares higher and new data from the bureau of labor statistics shows americans with a graduate degree spend nearly $1,000 per year on alcohol. that is nearly ten times as much as high school dropouts. lot of questions about that study. rory sabbatini kicks off the u.s. open with a hole in one it's the first ace at the open since 2014 he becomes the first slovakian to make a hole in one at the u.s. open. congratulations. and that is our cnbc news update for this hour. scott, back to you >> rahel, thanks so much the latest high-profile ipo making its trading debut today online pet retailer chewy coming public on the new york stock exchange in what has been another busy week for ipos leslie picker's following the money for us lessly, this one was very well received >> it certainly was, scott

chewy's shares soaring today up about 60% after just 2 hours of trading. chewy's ipo was priced at $22 apiece that was a buck above the range that chewy had already hiked earlier in the week so tons of demand here. petsmart, which acquired chewy two years ago will be taking home the bulk of the proceeds raised in the ipo, about $900 million worth chewy itself will retain about $120 million to invest in the business now, chewy is an online retailer for all things pets, offering food, medicine, toys, and beds on its website the company says its differentiator, though, is customer service, but that, of course, comes at a cost. chewy's operating expenses totaled about $1 billion last year, contributing to a lack of profitability. chewy was acquired by pet smart two years ago for $3.5 billion it's now trading upwarts ds of r times that valuation to quite the return on investment there, scott. >> another big winner. leslie, thank you very much.

that's leslie picker at the new york stock exchange. here's what jim cramer had to say about this ipo earlier on "squawk on the street. >> i like chewy. i never get -- take these hats, ever this one, i'm actually going to wear i think chewy may be it. this may be the best of them other than beyond meat this is so exciting to people. >> all right so, cramer gets the hat. should people get the stock? >> so, like, the -- the curmudgeon in me wants to be like, here we go again, another high-profile pet ipo at the top of a web bubble but when you actually look at what's going on here, the stock probably goes higher this company was bought by petsmart they didn't start it for $3.4 billion and then they did $3.5 billion worth of revenue two years later and actually i think petsmart will look back and say i can't believe we sold this thing so, i think it's going to be a winner and the main reason why i like it is that two-thirds of those revenues are auto ship so they did like $2.5 billion in

revenue of people that are just, like, my dog is not going to become a dragon, it's going to eat the same amount of food roughly every three weeks so this is what i'm going to have auto shipped every three weeks that's an amazing business it's a great business. that's how my wife should feed me so, if they can get that same customer to also buy medicine from them and other services in addition to that auto-ship they're calling it, like, who wouldn't want to be invested in a business like that and i also agree with what cramer's saying, we are getting surgery for pets, we are treating them like family members. that's not going to reverse on a dime either. so it's going to be a high margin business. so i like it for those reasons >> no buyers anybody else on this today >> i love the company. >> if not, why >> well, actually, the valuation is -- trades at a discount to its competitor, which is amazon, it's -- amazon trades at 3.5 times ebitda sales to it could creep higher i think it's a great company and i'm just not going to chase it

here but i mean, they've got the distribution, they've got 45,000 different products, they've got the service. that is what differentiates them to anybody else. so if you own a pet, you probably know this company quite well there's that peter lynch effect too. i just feel like it's up so much, i don't want to chase it >> anastasia, any thoughts about ipo froth, josh alluded to, you know, the pets.com of the world, the last time we had -- >> there's no sock puppet here so that's good >> i think the ipo market is definitely supported by the macroenvironment which is now okay but what you see is the outperformance in the secular stories, talk about the beyond meat ipo, earlier that month, we were talking about the pork supply disruption in china and as we were having this conversation, you realize that the demand is moving from the pork or the meat protein to nonmeat alternatives so it's not surprising that some of those secular stories have performed very well. i think software is another place to look for potential

success of software ipos or maybe acquisitions because if you think about the biggest trend out there today, it's data and the growth in data and all the software companies that are helping you manage it and make sense of it and so forth >> do we pay attention to these in terms -- you break it up into enterprise like anastasia said, versus consumer? >> versus pet. >> yeah, versus pet, consumer. >> pet tech so hot right now >> when you look at it, it's a good point about the ipos that are coming down the pike, there's slack, i think, that's slated for next week that falls into the enterprise category and some of those, you know, the bulls look at and say, well, you know, these are the ones that are more profitable, you can see a road map to profitability whereas the ubers, the lyfts and some of these other names it's much more opaque >> i think it's really important to not solely focus on profitability but to really think about what is that next three to five years look like and is this going to be a secular growing market and i

think what you see with the chewy, despite the fact that it might have some headwinds as pet smart reduces their share count because they havesome debt on the balance sheet that they do need to pay with some of this cash but i think when you look at that, we look at enterprise spending, we're talking about, you know, the potential differentiators that are offered in the ipo market. i don't think you have to necessarily have a clear road map to profitability but you have to be able to -- >> convince people >> convince people that you do that's a great point that's what you're looking to buy right now, is there a road map. >> coming up, some new reporting on third points dan lobe and sony there you go, s&p is down about 7, defensive utilities are leading the way today. we're back in a little more than two minute s. (indistinguishable muttering) s. that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo!

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no matter where it lives. ♪ ♪ so if an auditor shows up, i can be a step ahead. that's the cloud i want. is that to much to ask? expect more from your cloud. ibm cloud. all right, welcome back, we want to begin this block we have new at noon today. third point, the hedge fund run by daniel lobe is going public now with its latest campaign against sony, its second in the past six years in a letter sent to the firms' investors last night, third point urges the company to spin off its semiconductor business

third point says sony should consider selling its stakes in other businesses third point making that case in a more than 100-page slide presentation that the semi business, which mr. loeb said is treated as an afterthought could be worth as much as $35 billion within 5 years. my sources tell me the firm started building its stake back in february when the stock sold off sharply into the low to mid 40s, it's also worth noting that because the position was taken in third point's main funds and through a special purpose vehicle, a dedicated one, that lock-up is typically two to three years, which means third point likely sees this as a long-term play the firm notes in its presentation that it sees this situation much like nestle, which third point pushed to spin off underperforming businesses to better enhance value. third point still owns that stock, has made a profit of more than a half billion dollars in two years as shares are up 47%

and one last note, it was reported that mr. loeb and sony's ceo met last week interesting from a high performing activist investor >> yeah, and you can't argue with him he makes two very important points first, the people covering this stock are like people that cover casio wristwatches because they're asian electronics analysts but this company is so much more than that but because it's a conglomerate, it's got this conglomerate taint or discount as they call it and that's not going to go away while it has stakes in all these far flung businesses and it's tough to analyze and say what is the pure play, what's the story and the only evidence you need that that's the case is that it's selling 11 times next year's earnings and it should not be because the business is actually running well and doing well in it core businesses so why is it 11 times forward how could you argue with him of course that's the reason. and then the second thing is, it's actually at a lower

valuation than where it was trading when he first got involved in 2013 so they've listened to him, they've streamlined somewhat, but they have to go all the way and i think that will be good for shareholders and the nestle example is a good one. so, i agree with what he's saying and i think other shareholders probably will too >> yeah, they -- you know, obviously point to the similarities to nestle and they sure hope the stock performance is similar as well we said up 47% since they took that position and started their campaign against nestle, which they still hold, steph >> the reason it trades at 11 times is because it's a conglomerate so their entertainment assets are actually top of the line >> sony pictures >> yeah, and it's -- and the whole gaming aspect too, that is getting underappreciated because it's mirrored down into all these other things like the financial business, which also could be spun out, olympus could be spun out, semis could be spun out. semis a good business but it's not getting any credit >> they say it's going to be a $35 billion business in 5 years, yeah >> that's why it's not getting

appreciated in this conglomerate structure so i think there's a lot of value to be unlocked even now. >> good stuff. coming up, viewer questions are coming in on fedex, nike, dunkin brands and winnebago go to cnbc.com/halftime. you can tweet us hfte po" bk ac right after this feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

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all right, we're back. that means we're answering your questions now. first up, stephanie link jeff in boca raton, nike appears to be going nowhere. what do i do with it >> it was one of the best stocks last year so it's taking a breather, only up 12% but it is a compounder this is exactly the kind of name that i want to own in this environment, the quality, good balance sheet, global brands, and i think it has lagged and i think that's the opportunity, actually i prefer under armour because i think there's more upside to that but i like nike for the long-term holding. >> shannon,for you, fedex. that's a good one to do right now. what do you do buy on the dip >> we've been trimming this stock. we think the integration of tnt in europe is not going well. we think there's going to continue to be serious competition in this space, not

just on amazon but from other firms that are looking to expand distribution, so we're trimming the stock right now. >> okay. anastasia, for you from mike in new york city, builders. >> definitely look at home builders, add to home builders, i think that is the trade to look at at least for the summer. mortgage rates are down significantly from 4.7% to 4% and we're starting to see an uptick in mortgage activity already because of that. by the way, next week is a big week for housing data, housing permits, existing home sales, so i think definitely one to look at ahead >> it. >> liz young, matt in new hampshire has a question for you about emerging markets what's your view given the global slowdown. >> e.m. is still an important piece of a portfolio from a growth perspective by definition, e.m. is always going to be a high beta trade so it's something in the short-term while we have trade tensions, you'll feel those bumps but over the long-term we do think we get to a trade deal and we think that it's better than international developed. >> all right josh, from don in hawaii >> oh boy. >> hey, don. thanks for the question. >> aloha >> that's true

sorry, don >> sorry, don. i'm sorry for scott. >> i mean, it was so obvious and i still messed it up for downtown josh brown, is dunkin brands a buy. >> i'm glad you asked me that question, don. i've been long on this stock for like seven years and i have no plans to sell it i think there's two things with dunkin worth pointing out. the first is while it's ubiquitous on the east coast and somewhat in the midwest it's in nowhereland in the west coast, it's not a slam dunk they'll be able to expand there but i would make the bet that they would and i don't think you're paying up for that bet it's a great royalty asset light business, they don't own any of the stores, all they do is print money and drop it to the bottom line >> okay. mahalo, dan. don. see, i fixed it. did i fix it >> that's up to don. i don't know if you fixed it >> don, tweet us, let me know. jim lebenthal -- >> might as well have said howdy. >> it's bad. it really was bad. it's so obvious. i'm blushing now

from john in illinois. keep buying winnebago? >> yeah. john, thanks for asking the question i think the last time a question came in on this was the beginning of the year and this was one of my top picks for the year so here's the good year here's the good news it's up 60% year to date here's the bad news. it's up 60% years to date. earnings are coming up next week they're already baked in because competitor thor came out with earnings last week this is not the time to go whole hog on it. long-term, this is a agreement investment. >> all right thank you to everybody for your questions. straight ahead, the stocks to watch ahead of next week's earnings there are many stay with us for those trades. we'll do it next s.

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♪ flights, hotels, cars, activities, vacation rentals. expedia. everything you need to go. . we are back. there's your earnings calendar for next week. adobe, oracle, darden. what do you like on this list? >> i don't like oracle, but i'm going to watch it. also adobe i do like it's too rich for me i'll be listening to the call. overall macro conditions around the world. so i think those will be very telling and important reports. >> josh? >> you're going to hate watch oracle >> i will. >> i do that i own canopy growth. i don't think this is a stock that really trades on earning. i know it moves on earnings. that's not really the thing here it's got much bigger raks on headlines.

new initiative strategy, et cetera i don't have a lot of it, but that'll be the one i pay most attention to >> yeah. one on your list >> i actually own oracle we'll be watching that one generally lagged downafter earnings looking for some support that enterprise spending is better than expected for them >> we are going to take a quick break and then we' ce ck d fal trades. it all started under this buttonwood tree. twenty-four people came together to sign an agreement that created the stock exchange. just the right elements coming together. it started when scores more people came together, just down the street and traded bonds that helped pay for the revolution, and the nation it created. it started in an office on the corner where the right people witnessed the telegraph and brought information and humanity together forever. it started with the markets, bringing together steel and buildings and silicon and medicine and rockets. we believe the possibilities of life and investing are greater

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feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. . around the horn for final trades anastasia, start us off. >> i'm going to start with housing. it is a trade to watch and add to over the summertime in addition to lower mortgage activity, higher activity. we see this as a domestic play as well. in a world with a two-way trade

risk i think it's also a good thing. >> liz >> industrials that's because if the market is watching the fed, fed cuts they go up. fed doesn't cut, they're still okay >> constellation brands. >> blackstone. >> walmart >> all right great stuff. great weekend. "the exchange" starts now. hi, everybody. here's what's ahead of pups busc blockbuster ipos police a $2 billion hit. shares of broadcom are reeling today after the company says that's how much business it will lose this year because of the huawei ban what's it all mean for the economy? we'll ask kevin hassett. that's coming up and 1,000 too many at a time when colleges are losing students all over the count country, virginia tech has too many the president tells us about their plans to dea