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tv   Fast Money Halftime Report  CNBC  November 15, 2016 12:00pm-1:01pm EST

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could probably hear in his tone the promise of things that ge is highly leveraged to, like tax reform, like infrastructure, are pretty constructive and maybe offset long-term by maybe a down draft in trade policy, but i don't know. it sounded like he thought some good things would happen. >> and he is long ge all the while. we certainly heard that. carl, great stuff. safe travels. we'll see you tomorrow. in the meantime, let's head down to florida. scott wapner and "the half." >> thanks so much. we are live today from the cme group's annual global financial leadership conference here in naples, florida, and what a line-up we have for you today. in just alt while we'll be joined by former speaker of the house of representatives, john boehner. it will be his first television interview since donald trump's upset victory. the chairman and ceo of the cme
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group terry duffy will also be with us today. first, we want to welcome in gary is president and ceo of goldman sachs. good to see you. thank you for being here. >> thanks for having me. good to be here. >> i think we should start in the obvious place. how surprised were you by the election result? >> honestly not as surprised as i think many other people. having seen what happened in this year, the year that i would call a year of great uncertainty, we've seen other results in other elections whether it be the columbia referendum or brexit where we've had very unpredictable results, where pollsters have gotten it wrong this year. it was not that shocking. you know, some people say it's because you grew up in ohio and you have a lot of ohio midwestern context, and i was talking to people in the midwest. i had a feeling that we may end up in this situation. >> the markets down 800 points that night into the morning. >> for many times i was talking to people prior to the election.
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my mantra is whatever happens overnight, dot opposite. literally it overreacts to everything these days, and we tend to overanalyze things instantly and get them wrong, and things tend to mean revert over time. you know, i thought the opportunity whatever the election was going to produce that night you'll probably want to take the other side. >> do you think this rally is justified? >> we'll know over time. i think we live in this year of 2016. god. 2016. >> it's been a heck of a year. >> we've had such massive uncertainty. think where we started the year. we started the year with a fed increase. we saw the dow down 10%. we talked about china, china growth. we talked about oil prices. oil prices going down. we had brexit and the election. we've had such massive uncertainty this year that investigators haven't known what to do. they've been trying to reposition in a marketplace
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where they knew there was a high distribution of outcomes but they want to be safe, and as you start getting a little bit more clarity here and there they massively migrate to other opportunities where they think there's more clarity. none of these surprise people in the initial movement. >> you said on the stage just a few moments ago and i'm quoting, "markets are dying for stability and predictability." do you think we get that with a president trump? >> i'll say it again, markets are dying for sustainability and predictability. we're all giving president-elect trump and his transition team the benefit of the doubt. we're all listening to what he is saying. we're all listening to what he is doing. we're all cautiously optimistic. we're waiting to see what happens.
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>> if a move in interest rates that really surprised people. bill mayor on our air today said that 35-year bond bull market is over. what do you make of that and the bond rap, which is what it's been? >> scott, think of where we were prior to the election. we were already in a position where we were all pretty much convinced and i was convinced the fed was raising rates in december. western seeing unemployment higher. we were starting to see other inflationary data. we got data today that confirmed all of what we thought was going on in the market. it's not just the election. it's the real fundamental economic data that's going on the economy that is helping to perpetuate everyone's new view or changing view on what's going on in the bond market. >> you think rates are going up for the right reason? it sounds like you're building the case for that. >> fundamentally. >> i am building the rates
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for -- the case for rates going up for the right reason. that said, i am concerned how much u.s. rates are dislocate from the rest of the world. i think that's a big issue. you know, we're part of a global monetary system today. we've got many other major central banks around the world still with a zero interest rate policy and quantitative easing. if we dislocate, we will see that in the value of the dollar. the question to me is how strong can the dollar be until that starts having unintended consequences in the u.s. economy? >> you said the fed is in a tough spot. that's what you said on stage. that's what you are speaking to. >> yes. >> what do you think they'll do? if december seemed to be a foregone conclusion in many people's minds, is that changed now? >> well, i still think december is a foregone conclusion. i've said that for a greer, and i think they're going to raise in december. i still think they're going to
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raise in december. a year ago december 2015 they raised, and they had four dots. they had four increases in for the year. we wiped all that out. we're back to december 2016. we're going to raise. i assume we'll have dots that have many more raises in it, you know, three, four more raises for 2017. i think the front end of the curve needs to play a little bit of catchup with the back end of the curve. that said we do have this issue with the strength of the dollar. >> if the dollar is going up and rates are going up for what we saw are the right reasons fundamental increases in growth in the u.s. economy, at what point, though, is it a problem? i'm specifically talking about rates. i mean, we talk about what's going on in housing. at what point, even if they're going up for the right reason, does it become a problem? >> we won't see the dollar increase as a problem in housing. in the service economy, in the domestic economy, the dollar strength won't show up. >> sure. >> where it will show up -- it
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will show up in imported goods. you want high-paying jobs. it's an industry we could look at in the united states. the dollar source emported automobiles to the united states how many -- priced cheap are than we can many of in the united states. we don't want that to happen. we have to be careful. you can continue to grow jobs in the united states. >> stocks have done well. are we in a new environment where banks can actually do well again? >> the market has been looking for clarity, and in an unclear environment people did not want to own banks. i understand it. you understand that.
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you understand that people were looking to own assets that they felt they were protecting in an unclear environment. as we're starting to create more clarity and perceive more clarity, people are starting to migrate towards this asset class that they think may benefit in more clarity. banks are one of those, and there's one of many areas where there's perception that there may be greater clarity and it's an asset class that you want to own. so we're starting to see some rotation out of some technology names where people were comfortable owning them. into banks names. into industrial names. the truth is we're going to have to wait and see to what we actually end up with and what we get in the future. >> goldman specific. how do you think the bank fairs under president trump. you made a cameo in candidate trump's closing argument, if you will, bs and not in a good way.
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are you in the crosshairs, or are you in an environment where you think you can thrive? >> look, i'm very excited about the future of goldman sachs. i think we're in a great position to serve our clients. as we get greater transparency and greater clarity of what the environment is going to look like, what the economy is going to look like, and what's going on in the global world our clients are going to be more propelled to do different things. that's been good for our business, good for our franchise. >> about regulation. if some regulation goes away, do you think dodd frank should go away? >> remember where banks are. banks are financial -- we sit there and we are the transmission mechanism between central banks on one hand and main street on the other hand. as central banks try to flood the market with liquidity, we
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need to be able to transmit that into main street or we need to be able to transmit it into entrepreneurs or we need to transmit it into small and medium size companies. i do think that part of the regulation we've gone through has hampered our ability to transmit that capital into entrepreneurs in the small and medium size businesses. we know that small and medium size businesses and entrepreneurs, they create the jobs in america. our ability to transmit more capital into those parts of the economy, we think that's very, very good for the economy and economic growth. on the other hand, remember that the u.s. banks today are the strongest banks in the world. we're the most highly capitalized banks. we have the lowest leverage ratios, and i think that's a huge competitive advantage for the u.s. banks. i don't want to lose that. >> let's bring it full circle back to the election and president-elect trump.
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steph do you know him? how do you think he would do in that role if, in fact, he is chosen? >> i know steve well. we were in the same partner class in 1994. we worked together in the management team of the fixed income division until he left goldman sachs. steve is a great person. he is a great mind. look, i'm glad that he is being considered. >> you think he would do a good job if he is selected? >> i think the trump administration has to decide if he is going to do a great job. >> i appreciate the time very much. >> my pleasure. >> all right. gary cohn, goldman sachs, he is the president and the coo. with us for the hour from cnbc headquarters today as well, we have joe terra nova, john najarian, pete najarian as well. guys, you want to comment on some of what you heard from mr. cohn? >> it was a great interview, first of all, scott, and you know, really i think the question becomes as gary mentioned, the financials and what you do right now with the financials. interestingly enough, it's been the russell that has been rallying, and when you look at the composition of the russell,
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27% of the weighting is to financial services. i don't know if you play the financials through the russell. i don't know if you do your hedging through the russell. it certainly explains the move that we witnessed 9% higher in the last five years. >> the >> the steepening yield curve, that's all the stuff that gary was just talking about as well. when you look at that, scott, the most important thing that we're seeing, i think, in the opgs market, the derivative markets has been nothing but paper that continues to go into the banks. from everybody from bank of america. we talked about it just before the election. the 95,000 calls that were being bought in bank of america. we'll give you one today. on march. you go out to march in the xlf. you are getting the whole banking sector. you look at that, and suddenly the 23 strike. 300,000 calls have been purchased today. gives you a little bit of an idea. on a down day, people still want to be involved. it tells me the banks will be for a while. >> we've seen a lot of paper, judge, obviously, in gary's stock in goldman sachs itself. as the stock is up, like, 18%.
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i think since the election. access into and out of fixed income trades. i think that's going to be huge for the next three to six months. >> guys, we'll be back with you in ju a bit. want to tell you about a interview we have coming up tomorrow on "the halftime report." one of the top investors in the travel space. brad gerstner will be with us. he is the founder and ceo of altimeter capital. we'll get his reaction to warren buffett's big investment in four airlines, including united. much more coming up on "the halftime report" tomorrow with brad gerstner. during the campaign donald trump went after u.s. automakers for expanding manufacturing overseas. now that he has won the presidency, how worried is that
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industry? phil lebeau joins us from the auto show in los angeles with a first on cnbc interview with ceo mark fields. phil. >> thank you, scott. let's but that question right to mark fields, the ceo of ford motor company. does -- do things change now for ford in terms of your manufacturing footprint now that the trump administration is preparing to take the white house? >> well, as it were a global company with our home in the united states and we're very proud of that. the same time we want to make sure that we're utilizing our global manufacturing footprint, and our plans continue to move our focus down to mexico and importantly make room for two very exciting products that go into our plant in michigan. >> so no change at all? you're not changing your footprint either here in the u.s. or what you're planning inco? >> well, we have our plans we're implementing them. i want to point out that there's no change, no impact to jobs in the u.s.
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>> we need to make sure that we have a vibrant, profitable business and importantly our uaw colleagues, they know the importance and share the importance and we've been able to pay very large profit-sharing. >> but you were in the meeting where donald trump a few months ago in detroit -- i believe effects at ford or a venue where he said i might slap a 35% tariff on all vehicles that are built in mexico, brought into the u.s. what would that do for your bottom line if there is a tariff put on those vehicles? >> firts, we need to put it in perspective. now that we're through with the elections, president-elect trump and the newly elected congress are going to focus on governing. we feel very strongly that we think the right policies are going to be put in place because we all share the same objective. we want a strong, vibrant u.s.
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economy. in terms of 35% tariff, that would affect the entire auto sector, and that would impact not only the auto sector here in the u.s., but it will impact the economy in general. >> let's see if we can change it. you are opening a kwan of worms. >> listen, we laid out our corporate strategy based on the trade, our manufacturing footprint on that, and with the majority of investments here in the united states, you know, obviously the congress and the president could always look at everything. >> is that a mild warning to the administration and republicans to tread lightly? >> i think it's encouragement to
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make sure that we all share the same objective. they want strong and vibrant -- we want to continue what we've done the past number of years, which is do our part to help support that. >> quickly, last night you introduced a new small suv, echo sport. it's fuel economy, especially with the sufficient. does the fuel economy -- the ones set in place for 54.5 miles per gallon, do they need to be brought down? >> well, one of our policy objectives is to make sure that the fuel economy regulations are aligned with market realities, and that was the agreement that we made back in 2011 for the one national standard, which you just mentioned, which is around having a midterm review in 2018. very fact-based. let's let it be very cognizant of market realities. >> you wouldn't mind a review? >> the review is scheduled. >> it's scheduled. >> and we want to make sure it's fact-based and right for consumers and it's right for the industry. >> mark fields, ceo of ford motor company. a lot of questions about the administration. he knew they were coming.
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he has been getting a lot of them here at the auto show. back to you. >>. >> all right, phil. thanks so much. our thanks to mr. fields as with well. we are just getting started on "the halftime report" today. in just a few moments former speak of the house john boehner joins us live and exclusively. it is his first interview since the election of donald trump. more "halftime" back in two minutes.
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we got some breaking news here with regard to the nfl. the new york attorney general eric schneiderman and the nfl have reached an agreement where they have a settlement in place for a policy that used to require that certain ticket sellers for the secondary market sell tickets for a minimum cost. at this particular settlement the attorney general and other states have now resolved that the nfl's ticket exchange policy will have no more of a price floor. the nfl has responded by saying that we are pleased to have reechtd a favorable settlement with six attorneys general who are investigating the secondary ticket prices of the league and member clubs. they confirm the state agencies have concluded their two-year investigation and did not identify any injury to customers. again, scott, an interesting development here with regard to secondary ticket prices for nfl official tickets on member type exchanges. scott, back to you guys in florida. >> all right.
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>> just ahead on "the halftime report", former house speaker john -- jobs disappear?aying it's what the national debt could do to our economy. if we don't solve our debt problem 19 trillion and growing money for programs like education will shrink. in just 8 years, interest on the debt will be our third largest federal program. bad news for small businesses. the good news? there's still time for a solution. ask the candidates for a plan to secure our future.
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welcome back to "the halftime report." live today in naples, florida. what kind of president will donald trump be and where does the republican party go under his leadership? our next guest was one of the most powerful republicans in congress where he served for 24 years. john boehner became speaker of the house in 2011, serving until his retirement in 2015. speaker boehner joins us now exclusively. it is his first interview since president-elect donald trump's surprise victory. it's nice to see you today. >> scott, it's good to be with you. >> president-elect trump, how surprised were you by the outcome of the election? >> i was surprised, but i wasn't shocked. i told audiences over the fall that i thought chances were 60-40 that mrs. clinton was
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going to win. i reminded audiences that polls don't decide elections. voters do. you just never know who is going to show up. i went through an election like this where no one thought i could win, and, in fact, i was never within 80 points of winning, but i turned my voters out. my opponent didn't. i won. what happened clearly is the trump people showed up to vote and hillary supporters by and large -- they showed up, but not to the extents. >> did you vote for him? >> i did. i made it clear last -- i was going to vote for the republican nominee. by the end of april it was pretty clear donald trump was going to be the nominee. i was going to vote for him. >> you said at one point last spring, and imauto quoting, i don't know how you insult two-thirds of american women, insult every minority group known to man and expect to get elected. there aren't enough white males to get elected." ? apparently there are, and enough white females to get elected. it was the most unusual campaign we've seen in probably 100 years. on both sides of the aisle.
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i go back to the primaries. bernie sanders and hillary clinton. bernie sanders and i were elected together for the first time in 1990. this liberal old curmegeon ran on the socialist party ticket, and how he could create a movement is shocking to all of us who served with him. but he did. then he got 17 republicans and donald trump had his finger on the pulse of where americans were and what they were thinking and you've heard this before. i've heard it countless times. donald trump is saying what i'm thinking. >> were you troubled by any rett hi rick on the campaign trail? >> no one wants to listen to all that, and clearly things were said that we've never heard said, presidential campaign. the election is over, and donald trump is the president-elect, and i'm looking forward to his inauguration. >> what type of president do you think he will be? do you think candidate trump will reemerge in the white house, or is it going to be a different donald trump?
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>> nobody really knows. donald trump is not an ideologue. i said yesterday he barely is a republican. he could be barely a democrat as well. nobody really knows where he is going, but they make it pretty clear during the campaign of what his issues are, but i would expect things like inf infrastructure, tax reform, and this will surprise you, but immigration reform are things that are doable in this next congress. >> how is barely a republican, as you say he is, going to do with a certain faction of the republican party? the ultra conservatives, the alt right, and others? >> we'll see, but the fact is that a lot of their views are, frankly, shared by mr. trump, more so than your main street republicans. so i would imagine that they're going to be on board listen, people get elected to congress because they want to do things on behalf of their district and their country, and republicans
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see trump as a president they can work with and given the fact that he is not an ideologue, members of the house and senate on capitol hill are going to play a much bigger role in terms of creating policy and helping him move their agenda. >> much is clearly made of donald trump's temperament. i'm wondering if it concerns you and president obama said the if same yesterday. there are certain elements of his temperament that will not serve him well. do you share some of those concerns? >> no, i think as we went through the campaign, a lot of things happen in campaigns. i've been through a lot of them. once you are elected, donald trump clearly understands at this point he is the president-elect. he has a different role to play, which is very different than what you do in a campaign. >> yet, he still seems to be sort of responding on twitter. >> he still will be donald trump, but i would expect that we're going to see a somewhat different donald trump as we get closer to the inauguration. >> is it good for america if he
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still is partly candidate trump? >> we'll see. he is going to be the president-elect. he is going to have an opportunity to govern, an opportunity to put in place, the things he talked about, and we'll see. frankly i'm pretty optimistic. >> you said you guys were texting buddies. >> we've been friends for quite a while. played a little golf together. texting buddies. when i was speaker, i was having a rough week, i could always count on donald to call me, pat me on the back, cheer me up. he is a go ahead guy. >> what conversations have you had since he won? >> not much, but a little. >> did you reach out to him? >> i did. i did. i congratulated him. >> by text or by phone? >> text. close enough. >> there you go. i want to ask you about the appointment of steve bannon. it's drawn intense criticism as i know you have heard and read. senator harry reid said white supremacists are now represented in the white house. senator widen made a similar
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statement. was that appointment a mistake? >> i don't know, steve, so i can't even comment. i know of him. i have read some of his noise. you know, i also saw kelly ann conway work closely with him over the last three or four months. he heaped high praise on him. what i do know and have great respect for. we'll see. reince priebus clearly was, i think, a very solid choice to be the chief of staff. >> it doesn't bother you that a person from breitbart news with some of the things that they have posted on their website in years is the chief strategist to the president-elect of the united states? >> i don't know the guy, so i'm -- i can't comment on what he did or what he didn't do and how much control he had over breitbart and what went on their website. i don't know. they haven't said very many nice things about me. >> i was going to say, certainly you have a bit of a history. i mean, some would say that they
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played a role in forcing out. >> no, no, no. i was planning on leaving a year before i left. i left on my own terms, but they were never fans of mine, but, you know, i don't know him. there's no reason for me to comment. >> what about other members that could fill out the actual cabinet, word that guiliaiulian bolten might be going after state? >> there are going to be a lot of people in the mix. i know my phone hasn't quite stopped ringing as if i've got some magic entree here. there's a big deep bench of republicans who are capable of serve and who i think would like to serve, and so those decisions will be made in the coming weeks, and i'm as anxious to see those names as you. >> what advice would you give the new president in filling out his cabinet? >> on filling out his cabinet, it's about getting solid people with a solid background.
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the biggest advice, though, i could give to donald trump is presidents have limited power, as president obama found out. if you really want to get big things done, you've got to have a real relationship with the congress, and that means democrats and republicans on capitol hill. the new democratic leader in the senate, thankfully they have a relationship because he is going to play a key role in terms of what they're able to produce on the hill. >> one of the first things you think he should try to produce? >> i think repatriating the $2.5 trillion of u.s. business taxes sitting overseas is a smart step. and then using economic analysis to determine, all right, what's this going to do for our
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economy, and then trying to use that money to develop a longer term infrastructure. this will get broad bipartisan support. >> a big stimulus package. >> no, that's not -- we have big infrastructure needs. we don't have a revenue source that's very good. the gas tax revenues keep falling because cars are getting more miles to the gallon. we need a longer term infrastructure plan than what we have in place. i think your broad bipartisan support on the hill for this type of piece of legislation and i think it's going to be so popular that if i were president trump, i would attach an increase in the debt limit to it as well, which is going to come up in march and get that monkey off his back. >> are you not in favor then of a big deficit -- a big stimulus backage that includes a large infrastructure initiative? >> i don't know that we need a stimulus package.
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we need infrastructure spending in a big way. it will help the economy somewhat. tax reform in a broader sense would do more for our economy, do more to create economic growth and better jobs in america than just an inf infrastructure bill on something. >> what about regulation? there's some suggestion and certainly mr. trump on the trail talked about dodd frank. do you think dodd frank should be repealed? >> i think dodd frank has been a disaster. you know, it all started going after the big guys who caused the problem, and as it turned out, says it hit everybody in the financial services industry except the ten big guys who caused the problem. it's the craziest thing i've ever seen. so i don't know whether all of it goes, but there are going to be significant changes, and i believe a lot of that will have bipartisan support on the hill. >> what do you make of his comments already talking about president-elect trump that he is open to keeping parts of obama care? >> well, everybody is open to keeping parts of obama care. >> that didn't sound like
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candidate trump. >> the health industry basically have decided that covering people with preexisting conditions is what's appropriate in this era. the health insurance industry also pretty much have decided that covering kids staying at home until age 26 is an industry standard. those are things that have broad bipartisan support. listen, we talk about -- obama care is a big bill. while a lot of it's bad, not all of it is bad, as president-elect trump has pointed out. >> do you have an issue with his comments regarding trade? we've already heard some pushback from the chinese talking about, well, we'll replace boeing with airbus, iphone sales could have a problem. >> well, i believe in trade. i think trade has been very good to the u.s. yes, it's caused some job dislocation, but on the whole, it has helped our economy in a big way. now, so the president and i disagree about that.
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i think how the president can keep his campaign promises is to look at the enforcement of these trade laws because the enforcement, frankly, is where i think the holes are that cause people concern. i mean, when you look at the chinese continuing to dump steel in the united states, hoeere's great example of wrl they ought to be taking up the enforcement of the existing trade laws. taking a look back at nafta after 22 years, francly, i think is a very good idea. it probably needs a tune-up. i don't know that it's going to get the kind of tune-up that president-elect trump would like, but revisiting this is in the country's best interest. >> the comments that the president-elect made about obama care, which we just discussed. the other ones he told "60 minutes" that he is fine with same-sex marriage. those are his words. the wall could be a fence in some spots. how is that going to play with
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the alt right? the far right that helped push it over the top. >> they understand that donald trump is barely a republican. that's when it comes to the social issues. a lot of people in the party are -- >> does he need to be more of a republican now? >> oh, i think donald trump needs to be donald trump. when it comes to a wall, listen, says i voted to spend money tobld a wall in some sections, but there are parts of the border where it's just not practical at all, and so there are -- you can create a barrier without necessarily building a wall. what that barrier could be, it could be drones, it could be technology, it could be a fence as opposed to a wall. there are a lot of options that are out there. the key here is the border needs to be secured. that's about an 80-20 issue in the united states. i think they can secure the border. >> since in some respects we're talking about the future of your party, what role should paul ryan play in that? should he remain speaker?
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>> absolutely. paul ryan is a really smart guy. hard worker. a great family man. frankly, well respected by his colleagues. over the last year he has needed to learn a new trait. that is how to be a leader. he has grown tremendously over this last year. he is going to be overwhelmingly re-elected today as the next speaker-elect. he will be elected on the floor of the house when the new congress opens in early january. i think he can be donald trump's legislative partner in chief. paul ryan is a legislator. he is a policy wo-- he knows the policy issues inside and out. he can be a great asset working with one of his best friends reince priebus, who is the new chief of staff for the president-elect and the president himself. >> have you spoke with representative ryan? >> i have.
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>> is he confident in the things that and the predictions that you made? jim jordan, head of the freedom caucus, certainly hasn't come out, and he is considered maybe the second most powerful republican on the hill. in the house. >> jim jordan and paul ryan have a very good relationship. >> do they? >> in spite of their differences. i think paul is in really good shape. >> you think he will run for president? >> you know, at some point i would love to see that. he would make a great president. >> how is your golf game? >> needs a little help. >> well, you're down here in florida. i know you keep a place down here as well. i appreciate your time very much today, sir. >> good to be sheer. >> former speaker of the house joining us today exclusively on cnbc. ahead on "the halftime report", cme group chairman terry duffy will join us right here on set from naples. we'll talk markets. also, the reaction, of course, to donald trump's win and so much more. we're back right after this. shift in human history eatn is happening before our eyes. sixty to seventy million people are moving to cities every year. at pgim we help investors see the implications
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oand i'll be right backe seto take your order. thank you. thanks. don't you hate that? when they don't tell you how much something costs? and you have to ask? right. i do. maybe that's why i always make sure to... ..."bring up the costs associated with your services." i know. hey, i'm nothing if not predictable. lemme guess, the salmon? being transparent about our costs. it's a big deal. and it's how edward jones makes sense of investing.
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>> i walked into a state-owned store. unlike anything i have ever seen. >> can i buy a blender? >> the inventory was meager. largely a result of the u.s. embargo. this one sold mostly blenders and tvs. >> who is the manager? >> he is not here right now. >> and don't come to cuba to buy sneakers. >> so the government, again, has a monopoly of importing clothing. made in other countries and then reselling it to the cubans. a private person can't do this in cuba.
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>> can i buy shoes? i cannot buy shoes? >> since december they haven't had any new merchandise. >> since december? >> next week it's coming in. >> hopefully. >> i urge all of you to watch that tonight. for more on marcus's fascinating trip to one of the last hold-outs of communism. be sure to watch his new documentary tonight. it is the prof it in cuba. marcus will be on "power lunch" at the top of the hour. stay tuned for that rash we will be back in naples with the cme group's terry duffy right after this.
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♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.
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halftime report." we're live today in naples, florida. let's bring in the man behind the conference, terry duffy, newly appointed chairman and ceo of the cme group. thank you for being with us today and hosting us here. it is a great conference. >> thank you. i want to thank you and the folks at cnbc for being here. a big part of our conference every year so thank you. >> what do you think the biggest take away is from the panel we heard, where we are in the world post election and how to markets look? >> we heard so much content, but at the same time i heard a recurring theme of we got to wait and see. the president elect, i'm not sure what the speaker said to you, but his remarks yesterday, john was candid and did an excellent job of shaping what washington looks like and what you can and cannot get done and
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based on what your promises were, we're not. so i think what the markets are going to do in my opinion, i think they'll hang a lot on the president elect's words, in past presidents, we have never seen their everyday remarks, remarks potentially affect the markets. i think we'll see a different story coming with the president elect trump because of the proims promises he made and where does he go with them. i think the volatility in the marketplace could increase dramatically. >> if you think it will be a wait and see environment, the markets have already been reacting. are you surprised by the level of rally we have seen in stocks and the sell-off that we have seen in bonds? >> i was more surprised with the sell-off that we saw overnight going on as he was about to become president elect. and when i saw a friend of yours, carl icahn, step into my markets in the middle of the night and buy a billion dollars notional of mini snbs, because
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he believed the market was wrong, that's the beauty of the opinion. then we see the huge rally in equities and talking with gary cohen, he believes there will be a shift from people from bonds and equities and back and forth. it doesn't surprise me. >> bill miller said the bull market is over. is the election of donald trump the thing that pops the bond bubble if you believe there was a bond bubble? >> i believe there is a bond bubble. i think we'll take on more debt to do infrastructure and have the ability to do that. if a democratic president was elected and tried to add a trillion dollars on to the deficit to do infrastructure, not having all three parts of the administration probably couldn't get that passed. so, yes, i think the bond bubble has seen its day. >> you've said the fed has been a very politicized process. you anticipate volatility on a rate hike. that was last year. we got some of that. you think the fed goes in december? how many times do you think they could move and what is the market reaction as a result? >> people have said at this
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conference they think we need a little inflation and that's good for the marketplace. i don't disagree with that. i think the fed has been a little bit politicized. we're going to have to do a wait and see how they react to president elect trump. is he going to look to get some of the people out of the market and back into fixed income or do we continue on this path that we have been going down? it is hard to predict. i don't know. >> are there other risks you see out there? do you consider the fed a risk? >> i don't consider them a risk. i think gary cohen said it best, they can only do so much domestically in a global market. i think that's a very profound statement. the fed is trying to implement domestic policies in a global market and just doesn't work. their powers are limited. >> given your role at the cme, i would love to get you on the record with your reaction to the s.e.c. chair leaving. what you think the commission needs and how you feel about the whole fact that mary joe white will step down. >> it doesn't surprise me with the election she's stepping
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down. and what does the s.e.c. need? i'm not an s.e.c. expert. we're regulated by the commodity futures trading commission and i don't know who will give that appointment. i have no clue. i think that the s.e.c. needs to continue to broaden its base and it will. it has been a protector of small investors in the united states, originally charged to do. we have big global markets that we talked about. i think they're role needs to expand more globally. just not to -- which is a global regulator. >> if gary cohen said the market wants more certainty, more predictability, you feel like we're going to get that? >> i have said that since dodd frank, what the markets hate is uncertainty. i think we'll get more certainty into some of the directions of the market. which way they go, i don't know. we'll see more certainty only because of the policies that could be presented by president -- >> what about regulation? >> you know what, scott, i know people are talking about how they're going to take dodd frank
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apart, i don't see that happening. there is a lot of good pieces of regulation. one of the reasons why the united states is the most dominant financial institution in the world is because we have laws and regulations around regulation. >> are you saying you're against the repeal of dodd frank? >> i would not want to see dodd frank be appealed in its entirety. i said no different than sarbanes oxley. you have to have modifications when you put in this big legislation. it takes time. what is interesting about dodd frank, there is still roughly 40% of it never enacted. how do you repeal something never enacted yet? it is a difficult question to say it should be repealed when we haven't seen all of it yet. >> thank you for being here. thanks for hosting us. >> i appreciate it very much. >> terry duffy. final trades after this quick break. what powers the digital world. communication.
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that's why a cutting edge university counts on centurylink to keep their global campus connected. and why a pro football team chose us to deliver fiber-enabled broadband to more than 65,000 fans. and why a leading car brand counts on us to keep their dealer network streamlined and nimble. businesses count on communication, and communication counts on centurylink.
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we're looking forward to tomorrow's "halftime report." we have travel investor brad gerstner. we'll get his reaction to warren buffett's recent stakes in four major airlines. much more as well with mr. gerstner. let's get final thoughts from our gang back in our global headquarters. joe terranova, brothers najarian. we have interesting views on the world, on the markets. what is your takeaway here? >> i thought speaker boehner's comments were really compelling and just talking. i think the market is doing that
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as well, listening, waiting to what donald trump is going to say. with that in mind, i would not be making any big changes today given the tape. looks different than it did yesterday. i would sit back and wait, let the markets play out here over the next day or so. >> i think you already have seen -- >> jon? >> some of the technology stocks like that move out of amazon today. we were talking about it last week. when everybody was selling and saying, well, it is really bad for the tech sector. why? again, cooler heads will prevail. i think you're able to get into some stocks like amazon at that 200 day moving average or close to it. same thing with facebook. facebook hasn't had the same move yet, but i think that one will happen too, judge. >> and, scott, i think the most important thing we heard from terry duffy there, talking about volatility, and that's where i attacked too, we saw that volatility fall off a cliff, i think we'll see volatility come back into the marketplace. it hasn't yet, though. we can see it again today, getting pounded once again. i think the financials are a great place to be. i'm looking at franklin
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resources. but that xlf paper we talked about at the top of the show, that was massive. i think the financials still do have upside. only down 1% today. given the kind of move they already made going into this, i think there is room to the upside. >> all right, guys. thanks so much. see you back in new jersey tomorrow. that does it for us. "power lunch" begins right now. fire up the power tools. one big retailer getting hit hard despite an earnings beat. we'll drill down. warren buffett buying into something he once called a, quote, death trap for investors. the surprising move by the oracle of omaha. and the profit goes to cuba. marcus lemonis with an unprecedented look at the promise and the problems doing business in communist cuba. "power lunch" starts right now. indeed it does. welcome to "power lunch," everybody. i'm tyler mathisen. a little bit of a reversal or things


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