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tv   Fast Money Halftime Report  CNBC  August 25, 2016 12:00pm-1:01pm EDT

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>> the response from the company from the hill is full blown today. there's no doubt about that. so we'll watch for that. let's get over to headquarters, melissa lee and the half. welcome to the halftime report. top trade biotech and the epipen fallout and mylan saying it will offer more rebates to consumers. the stock is moving higher but way off the today's highs. today's traders. we start off with brian who of course scored the interview of the day with mylan ceo.
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>> answering questions today for the first time regarding that massive price hike for the epipen. it's a device needed by people in case they suffer a severe allergic reaction. surely you must understand the outrage somebody i talked to last night said people are outraged because it seems outrageous. this is the same product it was in 2009 but yet the price has gone up 300 or 400 fold. >> no one is more frustrated than me. >> but you're the one raising the price. how can you be frustrated. >> there's a list price of 608. i laid out there are four or five hands that the product touches and companies that it goes through before it ever gets to that patient at the counter. no one -- everybody should be frustrated. i am hoping this is an influx
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point for this country. our health care is in a crisis. it's no different than the mortgage financial crisis back in 2007. this bubble is going to burst. i'm committed to drive change because the leaders and senators, i've called all of them. i want to have a face-to-face meeting. price is one part of the problem. >> a bunch of senators would like to speak with you as well. >> they haven't called me back to set a date. >> have you reached out to senators. >> i reached out to several senators. >> you've reached out to them. >> personally. >> when? last few days. >> two days ago. i called them and said -- >> what do they say? when is the meeting? >> they haven't set it. i said as soon as you can meet i'm there. >> all right. that's just a bit of it. there's more to that. we'll show more at 2:00 eastern time. she was saying about this idea of the system was that david if you're mylan and i'm the end
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user and you have all these guys here that every time the drug goes from you to me they take a bigger cut, her argument was that the middlemen aren't going to roll back the price hike so the rebate will be better for the consumer. there's too many players and they wants to go after the supply chain. >> i get that argument because there is a system to contend with here in that the middlemen get their cuts but if they didn't go up to 275 per epipen these guys wouldn't have as big a cuts. her argument raising her own net price -- >> we don't know that. her argument seems to be that these guys will not if she cuts by 30 they're not cutting by 30, especially the pbms and that's who she went after. >> which ones? so you're there for full disclosure and you're saying that 55%, that 274 is the number. >> that's the net.
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>> you're talking about 55% that's going to the pharmacy benefit managers. what about the insurance companies as well? how much is included there. >> hard to know. it's a great question because everybody's got a different deal. they can't negotiate things, tera nova, national chain, you have more pricing power so the deals are going to be secretive. >> great interview. >> so many of the senators saying we want to talk to. she said she has called and asked for a sit down and they haven't returned her calls so check grassly wiey will be on p lunch. >> i'm looking forward to that interview. let's bring in david. what's your reaction to that argument that there are so many middlemen, it's the system that's causing these prices. >> so if a little boy is sitting
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in the kitchen and has his hand in the cookie jar and his mom says what are you doing and they say you don't understand, the economy is forcing me to do this mom, something doesn't sound true there. they should have come out and apologized for what they did and this idea that middlemen are taking the profit, if we look at mylan's disclosures it appears the epipen has doubled in profitability in the last few years, so they've more money. to me that doesn't add up to that the others are taking all the profit. >> tell me if this makes sense because when joe broke it down and said 55%, there's going to be a 55% take based on the net price, let say that percentage stands, if they didn't raise their net to 274, she still raised that net price. she was saying it's not fair in the media to say it goes up to
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600 plus dollars an epipen, that her net price is 274. what do you think the price increase was in the same time frame to the $274? was it a five-fold increase as well. >> i would think so but i have no idea. one thing i do know is i reached out to a generic manufacturer last night and asked them how much do you think it costs, a company that specializes in injectable how much does it cost to make an epipen. >> they said $3. >> it's less than a dollar for the ep testimony ran and $2 for the injector. >> let's look at this as a business piece. this is no different than looking at a costco or walmart that goes to these manufacturers and says we're a massive buyer, so we're going to set price and you're allowed to make x as a margin. that's what express scripts is doing and united health care is
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doing and so mylan, that's the reality of being a public company where they have few areas where they can effect price. there's no competition. i looked at a pricing chart of the epipen, they're not recovering any r&d here because they acquired the product. >> right. >> it goes like that. there's no competition. so they're making hay where they can. you have to take into account the social aspects of it and it's offensive to charge that kind of price where it's needed. health care is just a very interesting industry where you have to balance what the social conscious is versus the profitability. >> the context is we have been living in an environment for more than a year now where health care costs have been in focus and politicians have been more than willing to go after massive price increases. so you take a look at what mylan continues do because there were two -- something like two 15%
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prices increases this year, what they continue to do in this environment. >> if you believe the ceo's argument they're saying there's not enough competition in the insurance space and the pharmacy benefits manager space and if that's true it points the finger at the department of justice, federal trade commission, all of whom have been stringent about not allowing mergers to go through where there isn't enough competition. it takes the wind out of the sails to say those guys aren't being competitive when we're the mon oppositely of the epipen. >> that's not true. they only recently started saying no to m&a. there has been lots of m&a and you have to look at each individual market to see where the providers are. >> there's not enough competition in the spaces. >> if you're looking a the what the affordable care act has done you're going to have states with one provider. >> before we go off on the insurance part of this conversation -- >> it's a big part of it.
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>> it is but i want to deal with the mylan aspect and the impact on biotech. we saw that yesterday mylan is more than 7% weight. this is a matter for people who have those mechanisms in their portfolio that many do. when you go back and analyze mylan -- you've recommended rolling back prices to two or three year ago levels. if they did that what would be the impact on their earnings? what if they had to go back and roll to the similar extent that list of generics that you had in your note from june that had 400%, 500% increases in the first months of this year, what would the impact be on their earnings. >> we haven't calculated that but if we did an estimate maybe it would cost them a dollar of earnin earnings. you say that's bad for shareholders but if you're
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taking from consumers to pay for shareholders and it's different than lack of competition. one thing i want to point out if you're in an ambulance and you think it's going to cost $500 to get to the hospital and they say it's going to cost $5,000, that's different than we racarrd the pri raised prices and you have alternatives so do patients have any alternatives. >> do you think it's priced in and fairly valued where it is right here. >> we think mylan is fairly valued right here. growing up my mom always told me if a fight breaks out turn around and leave. we think that investors should probably just wait it out, let's see how the senate hearings go. i think they will pursue them even with this announced price cut. >> on that point of no alternatives in generic competition. why is there no generic
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competition? >> nobody really understands why exactly they haven't been approved but they reached a settlement in 2012 under which they could potentially launch a generic version of the epipen. fda approval has been the problem here. tefa put out a short filing with the ftc saying they identified certain major definitesies and teva expects the product will be delayed and any launch will not take place. as teva was applying for that approval mylan sent a approximate he tissue to the fda telling them the epipen generic needed to be the same as the actual epipen and not require additional training. what mylan said they believe because of the nature and scope of the differences and design in operating principals, epipen trained users will not be able
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to safely use the teva product according to the instructions for use. they say the issues raised by the teva device are novel and involve significant potential health risks to patients. subsequently the teva generic was rejected. now there's pressure put on the fda as to why this hasn't been approved and why there's a ba backlog of these competitions. senators have written a letter saying it would be helpful to understand the food & drug administrations role in this area given the authority it exerts over the epipen. now we're seeing notes come out today saying this may prompt the fda to move faster and there's another competitor product that's not identical to the epipen saying there's some supply issues there and maybe the fda will work with the company to speed that up.
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we know that mylan has come out with these rebates today. senator chuck grassley has said that these are not real price decreases, the price is really what the insurers and patients feel. >> let's backtrack. mylan and teva had a an agreement correct. mylan paid teva. >> $400 million. what was the number? >> the terms of the agreement were not public. >> it was a large number and that's one of the issues. >> to say essentially we will continue making epipen for x number of years and we won't challenge you but give us this time in which to make it exclusively and now they're out with another petition to try and keep it off. >> while they agreed the mechanical yi that
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teva could launch this generic in 2015 they were lobbying the fda not to approve the generic. >> it stinks. >> i want to go back david. so we just outlined it like that. how do you think this is going to be interpreted by that senate committee when they finally get in touch with heather brush. >> maybe there are a dozen of things that come out of that conversation? we're all for access but only access for our product because the petition shows we want to be the only one here. second, let's talk about not just pricing and profitability, but what's going on with the interaction with the fda? how close is industry? maybe if the fda came out and gave us all the phone notes and conversations and e-mails between mylan and the fda and teva we'd have a good starting point. >> what struck me is the arr
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arrogance of the management doing this. >> it's not illegal. it's tone deaf. >> right. that's my point. >> they didn't get the memo look what's going on in the industry. >> your best case scenario, how can mylan turn this around in your view at this point? >> don't mumbo jimbo say we made a mistake. the problem first lies with mylan deciding to raise price. so first apologize, say it was their fault, roll back actual prices, not can you upons and on the schools program they say they're going to extend it, i thought that was going to be permanent so they should say we are going to make epipen for schools free permanently.
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it's not a lot of product. 700,000 at $3 a piece, it's a couple of million dollars out of a billion dollar product. >> do you think she is still ceo in 12 months. >> it depends on how she handles this. based on the board and the history of other things i think she keeps her job. >> okay. >> i think she goes and works for private equity and becomes very wealthy. >> this is just -- it points out the biggest problems in this whole system though. >> sure. >> congress has blood on its hands. it's not just the drug manufacturers. it's the fda, the ftc, it's everybody that has blood on their hands that should be addressing this issue. >> one quick thing, i don't want the wall pharma industry to get pap painted with the same brush. a lot of companies are trying to find cures for things and we have three or four outlies that
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get the news but regulation will haunt them. >> mylan is a 3% waiting on the ibb so when it fell we saw the impact. who buys ibb, biotech at large. >> i do. if you go back to hillary's tweet in july you have to take a look. it took the sector down 30% then and 30% in january. i buy it because i don't think anything will happen. if congress tries to regulate pricing before and it's failed. i think you're okay. >> a reminder, senator chuck grassley power lunch today 2:30 p.m. eastern time. he's one of the senators that signed the letter. thanks everybody. st. jude moving lower after muddy water said it was shortening the stock and almost half of its revenue could disappear in about two years. a number of st. jude's products could be recalled due to
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potential cyber attacks. the st. jude's responded saying it's absolutely untrue. here's what's ahead on the halftime report. a big wall street call and a stock near and dear to traders hearts and anyone who looks movies and tv so this applies to everyone. we're talking about both sides of the netflix trade, the call of the day is next. new signs of trouble in hedge fund land. redemption sends a possibility of changing fee structure. fee, hp, work day all in play. more halftime in two minutes. what if a company that didn't make cars made plastics that make them lighter? the lubricants that improved fuel economy. even technology to make engines more efficient. what company does all this? exxonmobil, that's who. we're working on all these things to make cars better
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netflix is higher, 50% upside from here based on subscription growth and a push for original content, netflix is our call for the day. whose on board with this. >> dr. jay, this is your kind of stock. >> it is because i like the call by william blair and i think that netflix which had bottomed a couple of times this year at 85 would rather pick it up there but you can't always get what
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you want i think -- i bought a call spread several months out in the future because i don't know if it moves quickly. millennials aren't going to use each other's passwords forever. i think netflix will force that. i think that the era of you being able to share this password across multiple time zones is probably coming to an end. >> right. their forecast for net scrub subscribers is 17%. >> very generous. 145 is a stretch. that's a long way to go. i think now that you have gotten key two out of the way and subscriber growth is not as strong as expected, so i think you can look at this as potentially having a trough moment for the stock, where it
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is right now, stock could probably trade either side of the $100. i think a lot depends on what the market does over the next month or so. 145 that's a stretch. >> there was a concern about the olympics, netflix saw a ding. the und the. >> the streams numbers were big and that will hit the netflix viewers. i agree that amazon is a threat because you can't argue with free and if you're a prime customer you get free and by the way their content self created content that means specifically for amazon is not as robust but it's good. netflix content which he points out as being underappreciated, i
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don't think that's true. i think it's well preeshappreci. now we have hulu. so i'm with joe i don't go four and 45. i've looked at buying it. i would like to see it come down some before i step in. lots of movers on the retail side today and hathaway is raking in eig$8 a second. see what some believe buffet is doing to protect his investment. more halftime report straight ahead. i asked my dentist if an electric toothbrush was
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let's look where the markets stand right now. not too much going on, but no surprise considering everyone is waiting for janet yellen's speech tomorrow in wyoming. on the s&p 500 we have five winning and five losing sectors. let's get to the news headlines. here's what's happening at this hour. we begin with a travel nightmare
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if you're in the miami area because the faa has issued a ground stop for flights into miami and ft. lauderdale international airports. it's due to a power problem at the miami terminal. the miami traffic control center has taken over the airspace and is safely handling flights in the air but lots of delays. migrants have been helping to dig through the areas def tatd by an earthquake. the death toll has risen to 250. a strong aftershock hit earlier this morning causing more damage to that region. brazil senate has begun deliberating on whether to permanently remove the president from office. it's the final step in the impeachment process. she's accused of illegally shifting money to mask rising deficits. bruce springsteen shows no signs of slowing down. he played in new jersey tuesday
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night. 3:52 to be exact. it's the longest show that he's ever done in the u.s. and where better than here in jersey as they say. back to you guys. that's the news update this hour. let's get to the trader blitz. tiffany higher than beating on the bottom line. jim, you own it. >> i didn't think it was a great earnings call but the market likes it and what they like is the fact that the second half of this year is going to be stronger than the first half and they're equating that with 2017 being stronger. if it can get to the mid 20s as far as a multiple there's a 50% rise in the stock here. >> signet is reporting down sales. >> this was a stock a year ago that was a favorite in the hedge
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fund community. trading around $83. i don't want to buy it. there's multiple problems for this company right now. to say the reason why the sales at zales are not good is because of energy prices in texas, come on. >> it shows it's a domestic business. >> energy prices have rebounded significantly and now it's impacting? everyone needs an excuse i guess. >> it shows it's a domestic business versus tiffany's which is international. sorry i'm beating the drum but i caught that one. >> are you going to bring up ashley madison. >> they don't have -- >> if we could hack one of those, the stock could get back on its feet. >> dollar tree and dollar general falling short aft. >> dollar general has been strong over the year. let's let it settle over the next few days. it was about the guidance and a
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lot of sales were impacted by seven states ending the food stamp program a lot earlier. that really impacted sales here but i still think dollar tree is a good store. >> look at these moves in retail stocks. it's unbelievable. >> it's worse than biotech. >> the question is is there a shift now. is the shift going back. >> to walmart you mean? i'm sorry, shift to within retail? >> higher end retail. are consumers now spending more money and are we shifting now to the more affluent stores. >> i think the tiffany move i think you had a phenomenal call but it's an overrated move. the quarter was not as bad as feared but to go back to a 20 multiple it's truly wait and see. >> micron moving higher. steve owns it. >> we've seen this kind of move
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supposedly micron has a lot of invento inventory. that's good they're willing to manage it but this whole technology move of what's going into a pc and other tech products is not -- we see digital moving up today. i think that will continue and it's a product of an improving economy. >> work day higher after beginning the top line and reporting a 37% increase in subscription revenue. >> it was that 37% increase you got jmp and ubs, a whole host of folks upgrading significantly their target some taking it into the 90s. a fabulous day for them. >> guess reporting better than expected. >> up 25%. the moves in retail, think about yesterday had express down 25% on missing its number. that's just the volatility this
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has. what it means if you're going to be an investor in the retail space you have to do be the checks. you have do your channel checks. >> big changes in hedge fund pricing may be on the way. we're talking about potential new numbers coming up and the cherrios trade. halftime is coming back.
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. biobiotech bio.
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hedge funds are under scrutiny again. monthly outflows heighting the highest level since 2009 totaling more than $25 billion in july and citi group is weighing in to sell expressing concerns over fee structures. they believe the model is dead for most hedge funds. they're down 60% in the past 12 months. >> there's investigation into alleged bribery in africa so when investors see that they
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take their money out. we have the same questions of prime brokerage and hedge fund managers. it's with all active managers. the pressure we see on hedge funds pails in comparison. they compete with passive investors more so. so the flows coming out from active managers and mutual funds as you see is record numbers. because of etfs. you can't compete with free in a lot of instances. so we focus on the hedge fund managers but it's pervasive across the entire industry. talking about och-ziff, they've
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taken 4% for themselves. over the last three years they've underperformed like the rest of the industries so investors are saying why don't i just go pavs. why don't i put it in the s&p and not pay these fees. it's not the end of the industry. the industry has too much capacity. it's been impossible to make money on the short side. so that coincidences with low interest rates and that coincidences with hedge fund underperformance. >> what about the size of individual hedge funds? there's talk that smaller hedge funds are having better performance and there have been large funds that have terrible two-year track records, do you still get paid if you have good performance. >> here's what's interesting. every study will tell you that smaller hedge funds and those are the ones we invest in with rare exceptions perform better than larger hedge funds because
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the tupopportunities are better. what's changed now is that the headline stocks that i like to call them, the ones that figure most prominently are driven more by etf trading than fundamentals. the other thing that's going on you have to be a short-term investors to take money off the trading which is not t tax efficient so if you don't care about taxes or very long term because etfs are much more tax efficient. th they. >> i do believe we will have a reversion in terms of the flow going and we tend to forget and we talked the other day any time there's a big earthquake you have a tremor before. let's not forget what happened a year ago when on that monday morning a lot of those etfs the way they traded -- >> that was one year ago
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yesterday. >> yeah. so i just participated in a morgan stanley survey on the markets and one question was what is your big concern and my big concern is in any substantive correction for any asset class liquidity and i think that takes you to etfs. we are going to see a moment where we're going have a day of reckoning and you are going to wonder are you going to have the liquidity and i think that's where the mindset is. >> that's the biggest rick osk in the markets. it can't be a one-day v shape. by far the biggest correction if you back to '87 portfolio insurance, that was going to protect you and that caused the crash. >> blockbuster lineup for the sixth annual delivering alpha. the event takes place on september 13th here in new york city. i shouldn't say here. more details and tickets are
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available at delivering alpha.com. a recent rally in the dow chemical what some say buffet could be doing to protect his investment. more halftime straight ahead. ♪ with this level of engineering... it's a performance machine. with this degree of intelligence... it's a supercomputer. with this grade of protection... it's a fortress. and with this standard of luxury... it's an oasis. introducing the completely redesigned e-class. it's everything you need it to be... and more. lease the e300 for $549 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.
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if it takes above 53.72 buffet and company lose a
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$255 million a year payment, about $8 a second. buffet would instead get regular shares. the wall street journal reporting their speculation berkshire may be shortening dow to get it back down and to keep the $8 per second rolling in. you're shaking your head. >> he'd be crazy to do that. on so many levels. it's not illegal but i'd like to see the contract that was written between him and dow when they did this preferred share and i would imagine that dow put protections in there. so he's going to have a contract issue and there's the reputational issue. this is the guy who came in 25 years ago, this is not apples to apples but when they had the treasury bond scandal warren came in to clean that up. i don't think he throws it away that easily. >> the article in the journal did say that he couldn't short it until 2014 and then he could.
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so it was contemplated he may take the stack of shortening however i don't see him doing it. i think that creates a whole other host of headaches for him both publicly and number two he has this massive short position that should stock go through it he has a loss of it. i just think it's -- >> it's not like he loses all of it anyway. it goes down from 8.5% which is this preferred dividend you gets to 3.5% which is what mere more tals get for owning the stock. you're giving your money to total strangers. you're giving them 3.5%. it's a 5% differential. he'd still be making $15,000 or something like that a day, divide that out by the seconds, he's still making money every day that he's in this from that dividend. >> okay. so you're dow chemical, go buy back your stock and take him on. >> good point. >> but shortening it against some credit instruments is a common strategy, i just don't
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think that's one that's applied here. i want to check on mylan. we've gone up about 1.5% to negatives. this is on the heels of the exclusive interview we had with the ceo this morning and ahead of our interview with senator chuck grassley. we're watching this stock closely. now to the options market, an usual activity in a consumer food name. >> coca-cola was rumored to be looking at in late july. it's general mills. we noticed some unusual activity today. it's not as strong in kellogg. 8,000 plus of the 7250 calls that are trading out that's what
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they're buying aggressively. now they're pushing up to $1. 8,000 of those was 2,000 so about 6,000 contracts or 600,000 share equivalent is the opening trade that has happened today in this stock. i bought it and i'll probably hold it for two weeks. >> copper trading at a two month low. first over the tyler mathson for a look at what's coming up. >> thank you very much. coming up at the top of the hour i hope you join us for power lunch. a special edition as we dive deep into mylan. the ceo firing back over the epipen price hikes. did she make her case. she pointed fingers left, right and center, middlemen, lawmakers and congress and they are firing back. senator chuck grassley will join us and what role did managers have in the high prices of
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drugs. those stocks taking a hit this hour. halftime report back after this break. the halftime report is the place for market moving interviews, really money and really debates. >> people think that globalization has hurt businesses. it's technology that hurts businesses.
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comcast business. built for business. welcome back to the halftime report. copper hitting a two-month low today. jackie deangeles at the nymex. hi, jackie. >> copper taking a tumble, a little bit more than 1% decline today. sometimes copper speaks to the broader market. scott, what is troubling copper today? >> well, you know, it's up a tiny bit right now, but that's because of easing that we expect from china. but that explains why the last two months have been so horrible for copper. it's because the fundamentals are terrible. and over the past week, it's gotten even worse. it seems that copper, gold, and crude oil all expect ms. yellenyellen to be really hawk in. it's now below all the relevant moving afternoon. s, and with a relative strength index, which describes momentum
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at 35, we know that it's not yet oversold. >> bob, does it stabilize here or do we go lower? >> well, it looked for a while like it was forming a bottom. copper, as you mentioned, kind of has a ph.d. in global economics, but that relationship has kind of broken down. copper has really been at a down trend since 2012, and it's not predictive the way it's been. at the same timeframe, s&p is up 61%. i think the issue here is that there's more downside to go, as scott said. i'm looking for copper to reach 203 in the next couple weeks. >> check out the online show at the top of the hour. we're talking to zev spiro about where oil goes from here. dennis gartman is talking to us about gold and bonds. >> thank you very much, jackie deangelis. i turn to our own doctor here on the set, dr. weis. what do you say about copper? >> look, i think copper is responding to two things, which is china is still very, very slow. i still believe that they have way too much debt. it's a house of cards, and
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things aren't as rosy as some believe them to be, number one. number two, a stronger dollar, which i believe will continue to get stronger in these commodities all trading dollars. >> i think what has happened since 2012 is that we've seen such a transformation away from tr bulk economy. copper is part of that bulk economy. it decelerates on any chart that you're looking at. same thing for copper. but the economy has shifted. the s&p has obviously appreciated significantly, and that is because we are becoming more of a software and services type of economy, and we're trying to understand. >> it's not dr. copper anymore. >> i think jim points out properly what it should be referred to, and that would be -- >> chiropractor copper. >> i don't want to offend any chiropractors. >> but you just did. >> making the distinction. >> not a doctor of copper. >> it doesn't have a ph.d. it
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has a masters. >> copper was a major financing mechanism for the chinese economy, as it was inflating. now on the reverse side, the chinese have cracked down on that, so copper keeps bleeding into the market. >> we all appreciate chiropractors here at cnbc. >> absolutely we do. i need them. >> just about three hours to go until the market close. we've got your final trades ahead. "halftime report" is right back. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade.
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fast break time. a lot happens on the show here during the halftime report, but a lot happens in the breaks, too. >> i think you can't conflate -- this epipen is a very specific thing. i don't think we can compare that to hypothetically -- i'll pick a name out of a hat. pfizer suiten. costs $135,000. >> as was macy's. i didn't think it was a good quarter. about 20%. macy's, of course, has a much higher yield. >> people say, well, just take public transit, doc. i'm like, i do all the time. if there were an l out to laguardia, or met ra, metro, whatever, the subway system here, i'd take it. >> l meaning elevated train. we've been getting a lot of tweets. why is dr. j always late? now you know why he's been late. >> he's been looking for the l in new york city. >> it's the airport.
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>> oh yeah, the laguardia construction is a nightmare. that's why. >> so now i'm either private or into newark. one or the other. >> only you would know. >> one or the other. >> i want to get back to some of the stuff we were talking about during the breaks. you're mentioning whether or not you impute mylen's woes to the rest of health care. we talk about how it is an impact on health care in that it is in the health care etf, so if mylan falls it has a pressuring effect on that etf. how do you separate that as a value investor? somebody who looks at fundamentals. >> i think if you're looking at mylan right now, you have to realize that for the next week, two weeks, maybe three weeks, it's going to be ground zero of this debate. in my eyes, you stay away from it for that reason. however, looking at the other 97% of names in that sector, there's going to be value there in names that get beaten down in sympathy with what's going on in mylan. every one of us knows that this is the election year cycle. this happens every two years,
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that all the beating goes on of the biotechs and the pharmas and it really doesn't amount to anything. so look for the opportunities outside of mylan to get some value stocks in there. >> one of those opportunities i think would be amgen. i also think the pbms are going to have to come out now. >> so they will be under pressure as well. >> well, they are under pressure. look at cvs. down significantly. express scripps as well. they've got to talk about this. >> let's get to the second half trades. dr. j, why don't you kick it off. >> sure. baba. alibaba, very strong activity in this one, mel. the 94 calls in september all the way up to the 100 calls, actively purchased 3-to-1 calls versus puts. i got into some baba today. >> jim. >> cisco system. it fell off a little bit after its earnings about two weeks ago, but now it's steadily climbed back, and frankly, it's less than 10% from a ten-year high, around $34.5 a share. i think it continues to crest up towards that. >> steve weis? >> look, i'm sitting on my
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hands. i think that yellen is going to be slightly more hawkish tomorrow, so if you want to do anything, maybe take a run at the banks. they've been acting well. >> joe. >> buy some volatility. >> that does it for us on "the halftime report." don't go anywhere. "power lunch" begins right now. >> melissa, thank you very much. good afternoon. and welcome, everyone, to a special edition of "power lunch." mylan under fire. i'm tyler matheson. it is the story that everyone is talking about, and no wonder. whether you've never heard of an epipen or never owned a share of mylan stock and never will, you've got a stake in this story, and that is because it goes directly to how life-saving drugs get to market in america and whether the fda and congress are doing enough to make sure they do. and fast. it speaks to the byzantine ways drug prices are set in this country. a process that involves manufacturers, insurers, and an almost

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