tv Whatd You Miss Bloomberg May 2, 2016 4:00pm-5:01pm EDT
[closing bell] u.s. stocks bouncing back after posting their worst to climb since february. joe: the question is, "what'd you miss?" losing steamlar after manufacturing slowed last month. oil dropping nearly 3%. joe: aig is due to report first-quarter earnings in this hour. will they be able to return cash to investors to counter carl icahn's demand to rake of the company? bloomberg television gets a rare sitdown with neil ferguson. we begin with our market minutes. it was quite a rally today. it started off relatively slow, but it really caught steam at around 2:30 and we moved into
the close, ending up over 100 points. withad all 10 in the s&p positive territory. energy was the laggard. nonetheless, it was able to flip into positive territory at the end of the session. amazon and banks were moving higher. this was the best day of gains in two weeks. joe: it's a like the momentum had come out of the rally a little bit. a great start to the month. anyone trying to sell in may were already down on that strategy. good call. apple, it was a crazy roller coaster ride today. at one point, still on its longest losing streak since 1998 , we were below the friday lows they made, which technically could have been a bearish indicator but nonetheless climbed into neutral territory by the end.
only the third time in history that it's had a selloff like that. it tried to go green at the last second but then when right a second after that. look at the five-day chart, that encompassed what happened after the company reported earnings over the last week. in those last days apple lost about $79 billion in market cap and is now the worst performer in the dow in 2016. at one point today at his lowest level since 2014. like you mentioned, rallying since then. a lot of lost money. government bond yields, we saw increases across the boards to the two-year and 10 year. quite a jump in the upward pressure. the other thing that happened in the fixed income world is the
news that puerto rico is going to default on one of its payments, this was announced over the weekend and you can see this on, this general obligation bond is down to recovery. look at that, it's been getting clobbered well below its recovery price. people are really dumping puerto rico today after the announcement this weekend. on the currency front it was more of the same. the big story has been the dollar selloff. the u.s. dollar hit a one year low. the dollar index is what you're looking at on your screen. go back one year to see levels this low. on the flipside the euro is rising above 115 so you have to wonder if the ecb's feeling a little bit of anxiety about that. u.s. manufacturer you like that and if you are a german one, perhaps not much. at one point gold went about $1300 per ounce but wasn't able to hold that level.
part of the weakness nonetheless had to do with the weaker dollar and a lot of momentum in gold throughout the whole year. the same idea that you don't really trust the rally that you see in stocks? you can see it from people buying gold. at the end, oil, i wanted to point this out, it's been a monster rally and at one point it was down over 3%. iraqi oil exports are near a record, impressive distort -- despite the turmoil in the country. in mind that keep long positions and oil are crazy high. incredibly high levels. anything can shake the needle. rally in been a huge oil lately. not a surprise. alix: now i want to take a deep dive into the bloomberg. all the following charts are at the bottom of your screen. joe: for my deep dive, i'm looking more at gold in the market minutes. here we have a five-year chart of gold. it's gold over several years,
which has been a big downward move. there have certainly been some rallies. back in december of 2011, a 16% rally. back in 2013 a couple of 15% rallies. the rally we are seeing here at the very end, we are up nearly 23% from the recent lows back in december. this is definitely the biggest rally since the bear market started in 2011. a lot of people talking about gold in part because it briefly broke $1300 per ounce today but also because this is a real rally the likes of which we haven't seen. credit where it's due, it's the best run they've had in a long time. i'm looking at something very cool. rebar prices in china. these are basically steel prices in china. since 2004.st level you have to go back to august of
2014 -- excuse me -- to see that kind of rally. the reason why, joe, this ferocious rally in some orton is that according to a chinese newspaper 46 chinese blast furnaces restarted in march. you have a rally, furnaces weaker, more supply, prices. you are seeing an intricate reaction in china to this kind of steel rally. but that's not necessarily a good thing. joe: looking at the chinese pmi data, one of the key strength is real estate. of course, they were into reinforcing cement. the one area of the chinese economy holding up nicely and one particular commodity that should do well. good point. i like it. joining us today is all of her redneck. nnick. -- oliver re
what you'reink that seeing right now is a lot of traders and investors not buying and literally not buying stocks as the market has been going up. if you look at a few measures -- we've got a good chart. alix: check it out, break it down. tager: it's on the hash 1132. looking at the bar is right below that, mutual funds slowing. then there is the short interest outstanding on the reported stocks. what's particularly interesting is the small bump in the fund manager cash. the percentage going to increasing cash last month from march to april, even as the market continued to rally. stilld mutual fund flows going out of stocks. instead of investors putting
money in, they were taking it out of those us-based equity funds. one part that's interesting that has a bit of a copy got is the short interest, rightly pointed out by some to have been lowered in the past month, but still higher than the start of the year. close to its all-time record. it's only been there four times in the past decade. why, exactly.nder it still brings high in there is not a lot of it -- not a lot of enthusiasm. joe: for years people have been calling this the most hated rally of all-time. is this just a straight up continuation of the trend we been seen since 2009? oliver: it seems like it. if you look at the volume on the way down as opposed to on the way to the top, it seems that there is a lot more enthusiasm when the market goes down. people getting more involved. that does typically happen when the market is falling, but breaking it down looking at the last two times we had a of 2015,, october
august, compared to the current dropped. that typical disparity does kind of happen with less volume on the way up, but right now it's even less than what happened in october and august. joe: has or ever been a tight lid people like this bull market? oliver: you have a market that's up by 250% since 2009, definitely a lot of people feel good about that. following various other benchmarks, you should be doing well, but it comes back to the idea of buying and selling at the right times. what's particularly interesting about it right now is that so far this year the fact of the matter is that whether it's a hedge fund or a mutual fund, and we have written a plethora of inries on this now, it's not
the opposite for a load of people in a think at what's happening is that there is a bit of scar tissue they are still trying to peel away and figure out if this will be a level that hold. he said -- look, the volume in the options market is just dismal. it will be interesting to see what happens after earnings in. higher lows and the s&p doesn't sound good. it is still interesting to look at as a technical anomaly. went 11 straight weeks where the lowest point of the week was higher than the one of the previously. this broke down last week when we get on friday. it tells you that it is interesting. as we saw a strong rally from
the bottom indicating that the market may have overbought. going into history and the last times this happened, it hasn't been often. only three times since 1970. what happened after that? 1970 it fell. after breaking 11 straight and by this technical metric i just invented everyone should be gallagher. coming up, all harvard university professor, ferguson, the be live with us from milken global institute conference. that's next. ♪
to first wordt news. facing a make or break candidate for slumping campaign, ted cruz is blitzing through indiana. in a bid to keep his own white house hopes alive. mr. trump is the only candidate in the race of reach the 1237 delegates needed to regular voting. to push is still trying the race to a contested convention. hadcampaign said that they $30 million in the bank had it intimate. bernie sanders raised the same amount last month, marking a steep decline from the 46 million he raised in march. ask carter says that the nato alliance is considering establishing a rotational ground ande in the baltic states possibly poland as a deterrent to russian aggression. secretary carter said the forest
would consist of four battalions or 4000 in addition to the separate u.s. armored raid of 4200 troops the u.s. is the point to eastern europe next year. in the military has extended a cease-fire around the city of damascus for another 48 hours. president bashar al-assad declared war after two weeks of worsening violence. it does not include the city of aleppo. news, 24 hours per day, powered by our 2400 journalist in 150 news bureaus around the world. joh, alex? now to the milken global institute conference in los angeles with scarlet who, who is standing by with harvard professor of history, neil ferguson. scarlett: thank you so much, alix. you will be in a panel
discussing the global challenges for the next president. clearly there is populism that must he contended with for the next president. how does it tell us about they should handle this? professor ferguson: it has taken some years for the populist backlash to come through. right now we see it all over the world. interestingly it's fading in latin america. of course, a lot depends on who becomes the next president. people think it should be -- will be hillary clinton. i don't think we should underestimate the chances of donald trump. i think we've all made the mistake of underestimating him. can be taken very seriously now? so that the united states might elect someone who's committed to protectionism? it seems to me that in other respects on russian policy could
be a dangerous flair. there is a big global risk in the u.s. election. i think it force the other risks. you mentioned his rhetoric being concerning of late. some people compared it to germany. they wrong? the usualuson: analogy is that we are in a wide marjoram and moment and crisis as a republic and he is a fascist and tyrant area i would be somewhat hesitant to go that far. bashingrtainly free-trade. he's bashing immigration. he's been extraordinarily aggressive on the question of muslim immigration. i don't think we have quite crossed the line into full-blown fascism. why do i say that? the 1920ism of possible to about men in uniform threatening war. the only kind of war that he is threatening is a trade war with china.
in that sense i don't think that this is a perfect analogy. however, i want to get my old friend, andrew sullivan, a shout out. and also article just came saying that this is all why more moment wheremar he is a tyrant of poses a threat to the duchenne. it's an extraordinarily powerful piece and i must say that having read this and thought about how violence plays a part in the trunk movement, rallies, language, i'm beginning to revise my view. he's beginning to cross the line from populism into fascism, which is really disturbing. him take a could see decisive step closer to the nomination. if ted cruz cannot turn it around fast in indiana. and then you got questions about the whole hillary clinton campaign. can she withstand this populist fascist challenge? in theory she should win easily,
but i'm worried that as we get into the final stages of this she will lose votes. you mentioned latin america may be coming out of a phase. what did we learn from the populist experiment in latin america? prof. ferguson: that populism doesn't work. , theromises of the tyrant promises of the populist to make everybody better off, it's all solving economic problems with miracle policies and it's always a disappointment. happened in argentina. argentina came out of some lost years of economic mismanagement and rampant corruption. the other thing that we learned is that they usually turn out to be extraordinarily corrupt when they get their hands on power. look at the mess that venezuela is in, turning the country really into a parlor state. i was the world would look at matt -- look at latin america before votes were donald trump.
or the vote in britain to leave the european union? tookat where populism those countries. let's not forget the mess that brazil is in. latin america shows us that populism sounds great. scarlett: do you think that economics and monetary policy play a role? german politicians blame the ecb. germanerguson: politicians should blame german politicians. they have been doing a tremendous job averting full-blown deflation in the eurozone. it's been a very central part. the populist backlash in europe is partly a backlash against the austerity policies that german politicians push hard. it is more generally of backlash where broadly speaking people look back on the financial
crisis and call it an unholy alliance. ordinary people lost their homes and their savings. i think that the anger dates back to 2008. for years people were just struggling with economic shock. now that it has largely past, things are much better in europe and the u.s., there is a mood of we were able to settle with the political elite. final question, what is going right? what are you optimistic about? the worlduson: that economy has turned a corner. my colleague said that the hangover would be about seven years long. the obvious kind of thing is that we are seeing meaningful in the emerging markets.
economically it was a rather good time. great conversation. breaking news regarding aig reporting earnings, the company reporting earnings at $.65 per share. the company actually had an a couple loss of $.16 of highlights, property-casualty everyed ratios for hundred dollars in premium they paid out $96 and were making a little bit of money. it's a key metric to watch. returning capital through by that dividends this year and next. the stock is gyrating. ♪
"lix: "what'd you miss? to keep things in the market. joe: i'm looking at this mornings i asked them report. it's not that great. a little bit above 50. a bit down below expectations. check out the manufacturing new index, risingub to its highest level since november of 2014. this was deep just a few months ago. knew the story. the strong dollar hurting manufacturers. but we all knew the new story,
that the dollar had been weakening quite a bit. to the extent that manufacturing slump,ting hit 90 energy the strong dollar, both of those things reversing themselves. signs that these headwinds were starting to reverse. you have to like that. the other thing that the export index surging shows is that perhaps the rest of the world is stabilizing. china, europe, these trading partners, there may be a pulse in the global demand for products. this is a good indicator of what might be happening in the economy to come. michael was talking about the general isn and saying -- it was a little bit weaker, however, you have the weakness in oil being offset by the strength of the auto sector, say . all it's reflecting is the good versus the bad. with the manufacturing sub index being a drag on jobs.
looking at oil. surprised? i haven't been here in a week and a half. the market is expecting oil prices to be there in the next 12 months. this is the level, the number you have to carry about -- to care about. the $50 level. bank of america looks at that and says -- this is where producers are probably going to wind up bringing back production . surprisingly enough we are very close to that level. almost three dollars a from that key area. once you have it you will have producers rolling back into the market. the debt might be an issue. funding from banks might be an issue. -- joe: are going to be we are going to be watching that closely? alix: i am. joe: i am, too. alix: coming up, the rally showing signs of fatigue with lackluster earnings. next. ♪
mark: let's get the first word news. bernie sanders says indiana's primary tomorrow will be as important to his goal as amassing them as many delegates as possible to catch up with rival hillary clinton. he is telling supporters that with 10 states left,'s campaign needs to more than 50% of the remaining delegates up for grabs. sanders says he has won 45% of the pledged delegates so far, but only about 7% of the superdelegates. fallout from the dennis hastert sentencing. international wrestling hall of fame has voted to revoke all owners for the former house speaker in the wake of accusations he sexually abused teenagers decades ago when he was a wrestling coach.
hastert was sentenced to 15 months in prison after pleading guilty to breaking federal banking rules in a scheme to corrupt the sexual abuse. chinese communist party is placing a property mogul and outspoken government critic on probation for a year after he offered online criticism of state media for pushing absolute loyalty to the party. the punishment handed down is one step from expulsion and is seen as a stern warning to him and other party members that political dissent won't be tolerated. wildfires are burning through the mountains of northern india today, including parts of two tiger reserves. at least 70 people have died in weeks. authorities are urging tourists to avoid traveling to the himalayan foothills. global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. i'm mark crumpton. alix: let's get a recap on how u.s. equities finished today.
it was a stronger rally and the close, of dow ending up over 100 points. energy was the drag on the s&p, but inflicted positive territory toward the end of the session despite the fact that oil prices were off over 2%. stocks had their best day today in two weeks. we have that horrible selloff last week, and we have a nice rebounded today. joe: it was really solid, all sectors closing in the green. one blotch of red on the map, if you look at the markets, is in tech hardware. apples eight straight for us. -- straight loss. but overall a positive day. alix: $79 billion in market cap for the last few days. two stocks we are watching in after-hours trading, one is tenet healthcare, popping, reiterating in 2016 forecast on the high-end above estimates.
not the same story for aig. the company is seeing its third straight unprofitable quarter as it suffers from losses from otherfunds and investments. they lost $.16 per share. net investment income was down 44%, made off hedge funds, coming in low of $577 million. they're making money, though, in some capacity, for every $100 they made in premiums, they only had to pay out about $96.90. so they made a profit margin of three dollars. when it comes to future business, outlook is weak. this chart shows that up guidance as a percentage of total guidance is around 20%, down from 21.5% in the beginning of the year and when below where
it was a year ago at 25%. joining us now is tobias leskovich from citigroup. you are noted for being a bull in the market. how do you interpret these of guidance is getting lower? concerned it is the about management overpromising and under delivering. they will take the cautionary route. you get to that cringe worthy, cautiously optimistic term. part of it is we did a bit better than we thought we would do in the first quarter, because we lowered guidance into the first quarter. now we'd rather have a conservative outlook for the rest of the year. there are uncertainties out there from the u.k. to spain to u.s. elections. let's see how these things play out. companies don't want to take that stretch. joe: but still, it seems to be declining. every quarter we have played
this game, companies play the game, analysts play the game, there is a lower bar and they jump over it, but it still seems to be rolling over. the trend is still not good. >> we do this on a 10 week rolling average, a number of companies as opposed to any given week. the last couple of weeks, we saw a little bit of an uptick on the growing average, so maybe if we hit the worst point it will get better from here. i think generally speaking we have seen a beat on the quarter, and i am willing to take that into the next quarter or the quarter after. there is reason to believe things will get better, the dollar being one of the factors. you guys were mentioning it on the new export orders. it's also a positive on the translational package. alix: we were talking about this earlier -- the fed senior loan officer survey opinion cannot today and showed that the most
tightening and living standards as as well as commercial real estate loans -- joe: yeah. what do you make of that? this significantly because it tends to be a leading indicator for industrial activity for job trends, corporate margins, things like that. in that sense, it is not a positive statement. the one thing i would say against it is that you should look at what's happening to high-yield data. it's been narrowing over the past few weeks. joe: financial conditions have listened. >> it does seem like they are out of sync with each other, but the data today is certainly not concurrent. joe: and alix has been senior loan tightening standard chartered in the terminal. alix: there does. that rise here is that we have been discussing. at what point, though, does this take into moving forward to i'm
concerned? >> if you go back and look what , youns to 1999 or 2007 would see massive spikes. as opposed to this rising trend. we have seen these before, but not these terrible spikes. nonetheless, we have to keep monitoring this. it gives getting tighter and tighter, and it could be a problem. alix: and the massive spikes, --y maxed out this chart this is what he is talking about. 2008, that kind of spike. nowhere near that level. joe: right. another thing that people say, and it is the beginning of may, if you believe in rhyming-based investment strategies, is there anything to that? should people base their strategies on what rhymes? >> no. the times it doesn't work, particularly, is when you have
some sort of change in cyclical conditions. if the economy starts to get stronger, and for example the lead indicator for industrial production, that looks like it will be picking up over the next few months. running in contrast to the normal seasonality when industrial activity tends to slow. here we are coming off a really soft patch. it may not work out that way. if you look at history on this, diving way too much time into things like industrial production capacity, ism, and even people were talking about the ism as a problem because it broke at low 50 earlier this year. that was the 14th time since 1990 that it broke below 50. the prior 13 instances, only three ended in recessions. myself modestly constructive. i have a 2150 target for the end of the year.
i'm not pounding the table for another 3%. but it's more what you are doing within the market that will be more important. alix: we will get to that in just a second. tobias levkovich. coming up, we will talk about where he is looking at, and what the strengths of the yen means for japanese stocks, as well as u.s. stocks. ♪
which is a controversial argument. value growth is one that is getting a lot of pushback from clients. they have enjoyed the run in growth, and there are certainly some great growth stocks out there -- we aren't suggesting that. but areas like energy, industrials,, materials financials, we think they offer more opportunity. u.s.,eep in mind, in the materials tend to be chemicals. when you are in materials, your mind pavlovian responses metals in mining. 70% as chemicals. if you think about where the value is, and people say, hey, stocks have run up; yes, from extremely depressed levels. you can track things against 10 year yields, which are tracking higher. alix: we have a great chart that shows that. if you take a look at growth versus the 10 year yield, you can see that the 10 year yield
ends up going higher, and value will really start to shine. is there a level on the 10 year -- >> so this gets caught up in academic financial theory, but it is an important element. allhe yield goes higher, you are doing is saying the present value of that future stream of earnings will work against you. compounding is a very powerful tool. sometimes it is good for you and sometimes it is bad for you. the difference is if you go from 1% to 3% gdp growth, that is really not going to affect how much medicine you are selling to people who have died. that grover continues to grow at whatever base, but for that day t deeper -- joe: the iphone took off during the worst of the economic crisis, defining -- >> right. heryou are right. when the economy strengthens,
the true beneficiary will be the cyclical businesses. and yes, both the growth and the value suffer from that present value calculation, negative of a higher yield, and i'm getting too complicated, but when you get to that, at least one of that tends to be value. in a very simplistic way, value tends to outperform growth. it doesn't mean sell your growth stocks, it just means which one is better. ie: there was a paperclip -- think what you are talking about is factor time, whether you can switch from growth and value -- >> there are signals -- i've ignored -- he is a great investor and he has done a phenomenal work and i learned a lot from him, but i would say the following. it's not the only thing i look at. you should never make an investment decision on only one factor, i agree with that.
we have these lead indicator models, with factors working together. the chances of online factors at the same time, we have a higher probability of getting hit by an asteroid. they have a better chance of winning powerball. by the way, i didn't know that on my own. a professor of statistics explain this to me. i don't spend time running those numbers. joe: the key issue is when you have multiple factors all telling you the same answer. >> that you listen to it more carefully. in addition to what's happening with interest rates and addition to where the value is -- i get a lot of clients telling me energy. if oil prices go up, and is already priced in. the ratio you can assume if oil is at $65 is already being assumed. sayingshow them a chart look at oil prices and oil stocks.
$65, andices are going i'm not making that prediction, but if they are, oil stocks are going higher. joe: do people whose a $65 and priced -- in a way, they are overthinking it. if oil goes up, the stocks will go relative to the market. >> there is a psychology factor in here, too, which is always hard. start changing the way they perceive what's happening. i'm not trying to catch things for every minute change and readdress it. i' not a traitorm. -- a trader. i'm trying to suggest that were supply and demand balance out, that yes the price should be moving higher in the oil stocks go with it, and those are value trades. alix: if you are saying don't dump all growth stocks, and that trade will pick up at some point. >> it has already started to pick up.
people have been hiding out in a lot of places and they think they missed the value trade. alix: they are really hiding out in the yen at the end of the day. there was a chart for wells fargo they came out today that showed the correlation between the yen and u.s. stocks. you wouldn't think there would be one, but there is a huge gap they pointed between the s&p and the yen. where did you see as the effect of the and non-us equities? >> i don't think it has that much of an effect. i'd love to see that chart over a 20 year period. i'm not trying to suggest anything about that, it's just -- it is very important for the japanese stocks, because they are major exporters. joe: there does seem to be a phenomenon -- if you go back to the other night when the boj declined to ease further, as soon as they did that we saw markets sell off all around the world. what does it say about the psychology, or the state of the
market right now? the bank of japan doesn't do something and people want to dump everything? >> the first thing i will say is that it is a one-shot. we see how it trades after. i think this kind of ready fire aim approach is kind of dangerous. but it is more than that. there is global coordination; there is global coordination. we live in a global economy and you can see it by virtue of what the fed says in response to changes in global macroeconomic conditions, not just what happens within the borders of the 40th parallel. speaking of the fed, they had their decision last week. obviously they didn't do anything. was there anything in that statement that you felt was significant in terms of the outlook for the market? >> economists write about this all the time. the one thing most people focus on is they took out the warning about financial conditions that have tightened up, because markets have eased off. the fed does care about feedback
loops, and if credit gets very tight, it is going to have a negative consequence on the economy. it's their job. i think people spend way too much time being critics of everybody else's movement. vich, thank levko you. alix: breaking news. we want to check out what yelp is doing in after-hours. david einhorn says he has taken a new stake in yelp, the stocks popping about 9% in after-hours. he also said through the letter that he took a new steak in the macro position and natural gas, which is been getting completely hammered, but is up 10% in after-hours trading. coming up, hedge funds could charge less and hedge more. we will get insight on the hedge fund industry from with aston. ♪
alix: i'm alix steel. what you miss? the correlation of headphones and market movement was on the minds of cliff aston today. he sat down with erik schatzker from the milken institute global conference in l.a.. >> we started out beating up on the industry about 15 years ago. we wrote a piece, i got yelled at by every hedge fund manager. i know it is hard to believe i was young once. i was young when we wrote this. they're arguing that they are way too correlated to the markets, meaning that they move with the markets. they charge too much. managers hedge fund called me up to yell at me.
now i lean the other way. i still believe they are too correlated in charge too much, but i think people are turning to negative. warren buffett is the same. the hedge fund portfolio against him, he is winning, and he is smart, he made the bet. but that said, it is whether the stock will go a. hedge funds don't hedge as much as i think they should, but they do hedge. we've had a bull market for 67 years. if you compare hedge funds to the market, they will lose any bull market. i think people should yell at them. they deserve it. they should charge less than it should hedge more. hedge funds don't deserve as much criticism as they are getting? it sounds to me like the catholic is becoming a protestant. >> look, i know it is disappointing when i'm in the middle of an issue and not being extreme. but i still think the criticism
is still warranted. for one thing, hedge funds do a lot of stuff that is somewhat simpler than they let on. they do arbitrage strategies; they know what they are doing. they follow trend strategies. we like a lot of the strategies; we think they are good. but you shouldn't charge so much. you: if i get you straight, are saying that people are beating up on hedge funds too much when it comes to returns. what about these? >> they go together. erik: well it should, right? >> i will never get an economic long-lived after me, but if i do, it will be the following -- there is no investment so good that there's not something enough to make it bad, which is true. we can all believe or not believe in this -- the true idea of alpha is that returns can no one else -- returns a no one else can produce, if you can do that, it is very high. if you are doing something that
is more known, arbitrage, carry strategies, that is worth something. those are good strategies but it is not the same as alpha. it is more of a service. we think hedge funds are a mix of those. joe: that was aqr capital management with erik schatzker. coming up, what you need to know to gear up for tomorrow's trading. ♪
trading regulations were announced. the numbers don't lie. global established product unit generated more than 44% of its 2015 sales, thanks to the merger falling apart. the delayed spinoff of this group is now being revisited. that could come in the fourth quarter of this year. and pfizer's edition of austere increases the attractiveness of the established business. this is that white line. more than $6 billion in sales in the fourth quarter. the main driver was its pharmaceutical drugs and vaccines. the blue line rose 40% in 2015 driven by a pneumonia vaccine and prevnar. outside prevnar and its breast-cancer drug, in struggle pipeline doesn't look that exciting to analysts. you would think that new rules might slow down, the last thursday, there was $40 billion in new deals.