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tv   Power Lunch  CNBC  December 1, 2016 1:00pm-3:01pm EST

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industrial cyclical technology company, that's a good place to be. >> so, nobody would bayou tillties here. that trade's done. >> they're way overvalued. >> what i would buy, ups, fedex, new highs once again. >> see you soon. >> thanks. >> thanks for being here. thanks for watching. power starts now. scott, thank you very much. i'm tyler mathisen and you are looking behind me live at what we're describing as ground zero on this day, december 1, for jobs in america. the carrier plant in indianapolis, indiana, where donald trump is expected to sheik very shortly. we'll bring you his comments live as soon as he begins. >> i'm melissa lee. where is the magic for disney? this stock is down 14% this year and now, new fears espn scribers are heading into the big league. digging in, straight ahead. >> december beginning right where november left off.
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with a market rally. your stock investment rs higher once again and on deck, one big money manager says you got to break out the rally caps because we are just getting started, dow 20,000, right around the corner. "power lunch" always bullish on america, we begin right now. indeed, we do. it is a big day. i'm tyler mathisen. we've got a very huge two hours ahead and we're going to kick it off with story dominating the u news right now. donald trump is in the air right now on his way to the carrier plant in indiana. that will stay open. 1,000 jobs save. phil lebeau is live at the insulation in indianapolis. phil. >> tyler, we are in the carrier plant, but not on the plant floor and there are about 200 employees that have now been ushered into this area. there's a stage that's set up
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where donald trump will be appearing later on this afternoon. here are some details about the deal arrangeded between united technologies and the trump administration. there are one of two plants that will be staying open. the plant i'm in now, saving more than 1,000 jobs. a second plant, also owned by carrier in huntington, indiana. 700 b jobs there. that's being shut down. that's going way. those jobs are still going to mexico. carrier and united technologies getting $7 million in tax breaks from the state of indiana over the next ten years. this deal has some in the area wondering about other manufacturing jobs that will with be leaving. we show you this stock chart from rxn. they have a bearings plant not far from here. like lily moving production to mexico. it has not returned our phone call. the management has not returned phone calls for a comment because employees are saying look, if you're going to save the carrier plant, you need to
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save the rexnar plant. >> i don't think it will stop here. got rexnord and other places throughout this country, that are losing their livelihood through no fault of their own, so, you know, i don't think you can stop carrier i think it neats to move r for or everybody. >> chuck jones, the president of the local steel worker's union, he is scheduled to talk with donald trump, i don't know how long, but it will be b interesting to see if he brings up the plant and whether or not donald trump says to him, sure, we'll make a phone call for you or whether or not it's off deal to save this plant here in indianapolis. >> whatever the jobs saved are a good thing for that community and the country. you know, how much, phil, is the outcome here tied to the fact that indiana is offering some tax incentive, roughly $700,000
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a year. that's not that vast in the grand scheme of things and how much of it has to do with the president-elect's very clever calculation of the leverage that he had over a big defense contractor, united technologies, that gets a lot of money, does a lot of business with the federal government. >> sure. >> well, publicly, you will hear people say look, they're getting these tax breaks from the state of indiana. keep in mind, those are what was offer frd the state of indiana earlier this year and governor mike pence before he was name as donald trump's running mate. at that time, united technologies said thanks, no thanks, still going to move our jobs to mexico. so, read between the lines her , tyler. when the president of the united states calls and says maybe you should reconsider moving those b jobs. don't have to go far to say we've got over $6 billion in defense contracts. do we want to start off on the wrong foot with the trump administration? unofficially, that's probably what a lot of people are reading
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into. publicly, nobody's going to say there's a quid pro quo going on. >> are there any concerns that perhaps partsmakers or auto manufacturers will feel the pressure to keep jobs in the united states and not move to elsewhere? >> yes. there is that feeling. and not that they think they're going to get a phone call immediately from the trump administration, but you can bet they're going to think twice because they decide to close down a plant and ship manufacturing to mexico or open a new facility in mexico. here's the problem. so much, the auto assembly takes place south of the border. more than 2 million vehicles are exported to the u.s. and canada every year from down there. if you were a supplier or automaker, you've got to be down there and if you're not, you have your competitors with a definite cost advantage, so while it's going to weigh on their mind, i'll be curious whether we'll see anybody change their plans for the future. >> phil, we have seen states
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play economic incentives against each other. come here and we'll give you this. do you think, not trying to take anything away from the moment, the fact they are getting these incentives may prompt ore companies to threaten to leave the united states? knowing that if there's t enough jobs attached, maybe they can get some incentives of their own? >> i'm not sure they're going to try the strong arm the trump administration because he's shown he's not afraid to fire back publicly. i think continue to see what we've seen around the country and communities and in all 50 states. companies that believe they can get a better deal south of the border of somewhere else in the united states will hold that over those local communities and say we're going to leave unless you can come up with tax incentives, other abate ms that make it more attractive to stay in the u.s. we've gone over these number, brian. when you talk about wages for the u.s. factory worker versus for factory worker in mexico, very little comparison. the numbers are clear in terms if you're running a company and going for the bottom dollar,
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what you should be doing. so it will be interesting to see how many companies try to leverage that situation. >> all right, phil, thank you very much. we'll be back with you when the president-elect and his entourage arrive there in indianapolis at the carrier plant. and the president-elect has been good to the markets so far. check out the huge november record highs for the dow. the nasdaq, the s&p, the kbe bank index, best month ever. copp copper, best month in seven years. still, our next guest says it's not too late to get into this rally. the chief market strategist at boston private wealth. looks like a lot of good expectation is built into this market. does that worry the least? >> no. it doesn't f we're in a bull market. the reason is first of all, the economic data continues to come in pretty positive. we're not growing at tremendous leaps and bounds, but u we are
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growing. then you have the potentials that the new administration brings along with it. tax cuts. tax incentives. the ability to repateuate cash that's been made overseaoversea. the ability to create more jobs here in the united states redus leg regulation. this is going to add to consumer and investor confidence, so i think you have a market that is the potential to get up to around 2400 and if that does happen, you start to tow in, even at these levels, so you buy in now, buy a small percentage of the overall assets and if the market treat yous right, you add to that position, so your dollar cost averaging australia yo go up, so each new successive purchase, you own that stock at a price below the current. >> can earnings growth keep up with what you're describing here in terms of price appreciation are we going to get stretched because the earnings may not keep up?
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zwl the market is forecasting around 11.5% earnings growth for 2017. i think that's a little aggressive. we've been talking about somewhere around 9%. earnings growth. so you take the 9% growth, that's going to take the s&p earnings to around $129.50. if you apply the same current multiple, what you're going to get multiple expansion when you get earnings, you're going to see around 18.6 times. that will bring you to the 2408 number, so i think the market not obl has the potential to get this, but it's going to do it through earnings growth and revenue through pe expansion then if you factor in all these potential that is trump brings with it in the new administration, the 9% earnings growth may be on the low side. zpl i have a question about what is going on within this market, bob. and that is sorry, excuse me, camera just crashed into our desk. we're all okay here. embed ed in gone on at the trump rally, out of technology and
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into the bank stocks, we're at an interesting point here where the bank stocks had their best month on record in the month of november. regional banks dropped 18%. you take a look at where we stand on valuations, investors have a critical choice here. if you just take a look at pes, a pe for bank of america and intel, they're equal. so, how do you gauge valuation here and whether or not this rotation that has brought us so far since the election should u continue. >> i've been getting a lot of questions as to the rotation going on out of technology and into the other sectors of the mashlgt. i think you can explain that in a number of different ways. people are worried about trump's retaliation. i think that's a lot of hogwash. i don't think he's going to have the time or where with all to retaliate against some of these companies, but i think it's related to some of the idea that is trump has about bringing back some of the manufacturing here into the united states or raising tariffs, so ipg there is
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going to be that potential for multiple expansion, not only in the financials because i think you're to have a better environment for the finance. >> even with valuations right now in a lot of regional banks frings, you think there is further room to run and multiple expansion the come? >> i do because i think the earnings growth is going to be able to support the current valuations going forward. i think the opportunities right now lay in the technology space. >> there's a lot of hope in your these es. hope that we're going to get tax cuts, trade, all stuff and we hope it happens. what if it doesn't sell anything? >> i don't think you sell everything, but i think you have to be sort of on your toes and be prepared for some of these things that don't occur. this is not going to be a straight up market in 2017. we've been talking about a lot of different potentials that are going to create robots or speed bumps. you have the uk, the exiting of the eu. you have people are going to push back against tax cuts.
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people are going to push back against deregulation of some industry, so i think you have to be prepared for it. when you factor it in, the market's a discounting mechanism. the it's discounting what the potential is going forward. i think it remains high and quite likely to happen right now. >> bob, good to speak with you. just as we were talking about the rotation, we are seeing the nasdaq hitting session lows. now down by about 1.4%. it is the worst two-day stretch for the nasdaq in three months. >> we're calling it the all america trade. focusing on companies doing most of their business inside our great nation. most of these companies are smaller caps. they're getting bigger because they've been booming. russell 2000 coming off its best month in more than five years and your next guest is all in on america with three stocks that should thrive. up 13% since the election day.
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>> sounds right. >> 35% for the year. >> in our multicap fund, we're up over 35%. >> so, a huge run. nobody wants to be overly skeptical, however u, however, do you believe the business prospects of small caps across america have increased at the magnitude that the stock prices have? >> you know, i think we've had a very bifurcated market within the small caps. we had a lot of the defensive areas, utilities, reads, things that were surrogates for the bond market really driving the growth and the performance in the russ elg 2000 while a lot of the cyclical areas, industrials, energy, pockets of consumer discretionary and those financials that you're talk iin about, really was lagging over last 18 months, so i think you're seeing some catch up in the areas that we really see the best prospects for earnings recovery are really with ones starting to improve. they started a couple of weeks before the election. >> before we get to your pick,
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we just showed some of them. answer us this. where is this money coming from? is it just literally your clients selling bonds or amazon or facebook and asking hey, can i put new money with you guys? just wondering where is all this this new cash coming from? >> money's been leaving actively managed domestic equity funds now for the last few years. you've had constant outflow of equities into the bond market and so forth and people really haven't seen interest rates move up in a meaningful way in quite some time. you know, i'm 43 years old and in my adult life, i've hardly ever seen any material increase in interest rates. and i think as that occur, people are going to realize you can lose money in the bond market. >> isn't that a worry for you in terms of the sharp rises and rates in small caps in particular? now, are you looking at a balance sheet and how much debt a small cap company, typically, they rely on outside funding
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more to fund their businesses, so a rise in rates could hurt them. ? >> this is definitely a time to pay attention to the cost of capital of company, but as you have rates move up, i think that you still have key multiples very attractive relative to the earnings yield on stocks versus where the risk free rate is right now. even if you saw the ten-year treasury double to 5%, that would still reflect a a % earnings yield on stocks. that would be 20 times earnings for the s&p 500, which you know, at that point, the market would probably be fairly priced. >> let's take a look at the three choices that you brought to us today. parsi city. i did some business there over the weekend. got a beautiful business model. they got all this stuff and no employees to help you. none. none. the it's a beautiful business model. but it is up 24%. so far this year. portera, up 22%. hill top holdings, up 47%. explain why at this moment those stocks can still go higher. talk me off the ledge that says
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i'm coming in right at the moment when the good gains have been won by guys like you. >> one of the things we see, we see really a rotation in to some of the more cyclical areas of the market, so we like infrastructure, we like certain areas of consumer discretionary and we like some of the opportunities in financials, where who doesn't buy balloons at party city. >> apparently you. >> it's what the mathisen family is purchases. >> no, it was a naughty nurse costume. >> people are spending more on costumes and parties in general. >> is that true? >> i was buying balloons. >> the costume rally. the margins of balloons are unbelieve bable. party city -- >> balloon market is a bubble waiting to pop. >> absolutely. >> yeah. like that one? >> thanks, eric.
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we've complete ly derailed the conversation. but bottom line there is you just think that these stocks -- >> secular. growth opportunities. we look for companies that have a category, party city for instance, there's no direct competitors. they have a great wholesale business waend see them growing at above average rates. >> yep. >> eric, thank you. >> see you soon. >> share of disney down 14% in a year and in new reports show it's losing more subscribers at espn. after the break, we'll talk to one analyst who says buy the stock. we'll ask him to defend his stock and the nasdaq hitting session lows. take a look at the biggest drags here. all of them in the chip sec sor. lamb research is down about 7% "power lunch" is back in two.
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♪ it's a small world after all and it is a smaller world, specifically of espn subscribers, the channel losing another half million in november alone. concerns about the sports network one of the big reasons disney stock is down. 14% over the past year. hi, julia. >> hey, tyler. well, nielsen estimates that total cable tv subscribers declined by 1.6 last month, extrapolating that espn lost
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555,000 subscribers last month, which would be the second worst. now, this estimate isn't based on anything specific about espn, but rather, the rate that pay tv subscribers are shinking. disney disputed the number, noting it did not include new digital tv delivery platforms such as sling tv and play station view disneying we remain at forefront of the industry. a report was issued saying they have long discouraged their clients placing too much weight on these estimates and bruce lightman saying a loss of subscribers is disconnected from the overall pay tv numbers over this period which are likely fairly flat. though nielsen has not responded, they typically d do not comment on losses.
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last week, disney revealed that espn lost roughly two million customers in its fiscal 2016 to send the year with 90 million subscribers. that's the fewest since 2005. but is still a far slower decline than nielsen is reporting. we'll get official numbers from disney in february. melissa. >> thank you. let's bring in anthony, he covers disney, the trading arm. despite the stock's 14% drop in the past year, he's still got a buy rating. $110 price target. great to have you with us. is this a case where it is simply if you believe nielsen, the picture is terrible. if you think nielsen's numbers are faulty, when the disney picture doesn't look as bad? today, for instance, disney stock is moving fractionally. and nelson is down by 2%. >> as it pertains to their measurement of how many subscribers there are, it's a
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sampled measurement, not the actual number of subscribers. and importantly for me, it doesn't include new digital video bundles, so what are those? sling tv. play station view. directv now, which is a very aggressively priced and aggressively marketed product and espn is in all of these quote unquote skinny bundle, so when you look at the nielsen number, it's important to note it's just really kind of a carve out of the actual number. the other thing about the stock i'll say, you guys at cnbc b have been covering espn skub scribers quite a bit. it's got to be factored in with the stock. who doesn't know that's an overhang at this point and sure, we're modeling in declines, but we think that's factored in. we think it's unlikely to accelerate from here. >> can you walk us through the economics though?
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a loss of one subscriber on the espn b front, it can't equal is same. they' they're gain iing through these over the top services or bundles, it can't mean the same in terms of revenues or profits for disney. or does it? >> i disagree. i think when espn signed these deals with at&t, with sony, with dish, they made sure they were kept full on these economics, so if you as say a comcast or verizon fios subscriber were to switch over, some of the smaller disney networks like a disney xd, may not be include nd the bundle, but espn proper is and i think they were careful to make sure if it's a best of tv package, they were made whole on these economics. what happens beyond the next year or two, whether they can exact further rate step ups from there, will remain a question. for now, the street is model ng. a decline in espn operating
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income. everybody's there. so the question is with disney saying they're going to grow fiscal 17 earnings modestly and then what we anticipate to be a relergs in 2018 and the stock trading at a relative to s&p 500 low, especially based on the string, we should it could be an interesting opportunity. not saying there aren't poor concern, but if you just give me another minute here, other points. >> we're out of time, here's the thing, but what i'm confused by is why do we say espn subscriber losses. as far as i know, you can't subscribe to espn as part of basic cable package, i guess the losses must be all the channels are gone. so i don't understand why we're saying espn losses. it's not like pushing the peas to the side of the plate. there's that i consume a lot of espn on the apps. apple tv and my ipad. is there any indication that if somebody cuts their entire cord, then watches apple tv, is that
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reflecting these numbers? in other words, we lost a million people, but if the same million people are just consuming it in an unmeasured way, does disney care? and do those apps carry ad sns. >> i think one thing you guys are missing is that you need a multichannelled bund subscription to subscribe. to watch uva ohio state in the acc big ten game last night, can't do that unless you subscribe to a cable bundle. there are these new bundles throughout that incluespn and a do, directv being one of them. if you cut the cord, you're not really getting espn. there's a nuance which is if you go to a more basic package, comcast and time warner cable, they offer bundles that don't include espn and we think that's part of the driver of last year's subscriber decline. but the spirit of your point is that the press is covering the
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espn subscriber decline as if it's a unique issue to espn, it's not. those are industry numbers. >> point taken. got to leave it there. thanks so much for your analysis. we appreciate it. coming up next -- >> water filters. dollar deals and a major fashion faux pas. the good, the bad and the ugly and we are still awaiting president-elect donald trump and the carrier air conditioner plant in indianapolis. he is expected to speak shortly. his first major public comments since winning the election. we'll bring it to you live as soon as it begins. "power lunch" will be right back.
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first, the good. whosz water filters aren't sexy? stock soaring after being bought for over $4 billion. on to the bad. dollar general. down big after the company r reported loss lower than expected quarterly earnings and disappointing same store sales and take a guess at how much u this stock is down. 10%. the retailer, guess, posting a big earnings miss and giving disappointing guidance for the fourth quarter. highs today, rick santelli tracking the action at the cme. >> you know, the ecb's story,
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uncertainty, intraday of ten, we reached close to 250. i'm going to show you an interesting chart. you see these three tops, 248, 247 h 245. that's why we're slowing down here. hey, sully, i want to ask you a question real quick. in the four years the stock rally predicated solely on the fed, about green chutes, everything that larry's talking about. why is it now that we have horsepower, everybody's looking for weeds. >> nice use of the word crocus flower and 80s heavy metal band. i don't think we're looking for weeds. git your point. >> didn't say you. i'm saying everybody. the entire world. wants to kick this rally. we went from the most unloved rally, the most unwanted rally. >> because i don't know if it's a love. rick, you ever get really excited about something? say you want to go to the beach -- >> not rick. >> want to go to the beach.
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excited for the beach trip with with your family and you look at the weather and realize it may rain. so you get that anticipation of like, what if it rains? >> there's always a chance of showers, but for all the years the fed was trying to push it, everybody's going i'm going to dig far enough to find some green chutes. now, there's good things going on. there's a confidence in the market. everybody wants to kick it. not saying it's going to last forever. i just don't get it. >> i think to your point, i think it's good to have a little cautious in there. just to make sure we don't get too far ahead. >> we want viewers to be b ahead. i get it. we want our viewers to make and hold on to one this wup doesn't add up. >> i was optimistic in 2011 when i joined this fine network. i called all kinds of names. turned out okay. so, now, thing rs good. i'm going to flip it.
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we're doomed. how's that? contrary. i'm kidding. good point. >> all right. rick never gets upset. never. tomorrow, we get the jobs report for november. is friday tomorrow? the unemployment rate currently below 5%. the jobs picture is it really that rosy? plus, we'll take you live to the place in america that could be most affected by tough trade policies against china. be right back. ♪ okay, so you launched your bank's app. now what? how will you keep up with the new demands of today's digital economy? the fact is: some believe they won't need a traditional bank down the road, so at cognizant, we're helping banking and financial services companies think digital, be untraditional, and reimagine what the bank of the future can be. our clients can now leverage customer intelligence
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hi everybody. here's your cbs news update. iran's oil minister says he believes oil prices will exceed $55 a barrel. earlier, iranian president called the deal a positive development. ukraine began two days of missile tests near crimea, a move that has angered russia. the disagreement marking a fresh
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escalation in tension with neighbors and one-time allies and a driver traveling the wrong way crashed into a ups store in louisville this morning. the driver and his passenger were taken to a local hospital with minor injuries, which is amazing given the footage. no charges filed. and buzz aldrin has been evacuated from the south pole because of a medical condition. he was visiting the region as part of a tourist group. we certainly wish him well. keep you posted on. that's the news update this hour. back to you guys. >> thank you very much. let's look now at the markets here. again, we talked about this november rally, now leading into december. the dow jones industrial average is not up a lot, but up right now 53 points, the nasdaq is lower. kind of continues a trend, right. industrials, they're higher. the dow, technology underperforming the nasdaq. still, dow up again, goldman
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sachs and chevron, market leaders today. >> and we are watching this carrier plant in indianapolis. president-elect donald trump and vice president-elect mike pence expected to arrive shortly, get a tour and make remarks. carrier today confirming it received $7 million in tax incentives in ten years to keep those thousand jobs here in dwrits. >> well, donald trump certainly has talked talk about dealing with china on currency and trade and if if that talk turns to action, few states will be as impacted as california. we're live in los wills where more than half of the containers come from china. >> brian, this is also the busiest port in the nation and that's right. six out of ten connetainers tha land here come from china. last year, millions of them were moved by more than 43,000 workers and when you tie in the workers throughout the nation
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tied to this port, the number is a lot hire. 1.5 million jobs that can be affected by changing trade policies so, when trump on the campaign trail, tariffs up 45% on chinese goods coming into the u.s., there was a good amount of anxiety among the folks here tied to business at this port. we spoke to international trade adviser and he said that while it's probably likely that trump backs off some of those strongest china threats, he's unpredict bable and tariffs would be devastating. >> we would hope he doesn't impose some severe tariffs on chinese imports because it would have a devastating impact on parts of the u.s. economy. most notably, the parts of l.a. and long beach. >> now, the port of l.a. is of course watching very closely in a statement to us, executive director said that quote, we look forward the work wg the trump administration to support american come pettiveness by providing efficient and reliable access to global markets, but
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guys, it's not just california's industrial ports with skin in the game. there's also silicon value lyric hollywood, the central valley agriculture that would be affected, so perhaps nowhere else in the country other than california would the trade policies have a larger implication. >> thank you very much. as we mentioned, president-elect trump to speak shortly at the carrier air conditioner plant in indianapolis. he struck a deal to save a thousand jobs from leaving for mexico. let's zero in on the state of jobs in america. carla harris, advised president obama on small businesses, the chair of the national women's business council. welcome back. good to see you. >> thank you. very good to be here. >> we're close to full employment by many measure, 4.9% unemployment. some would say understates the
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real rate. how strong do you think the jobs picture is in america right now? >> i think we certainly have seen a tremendous amount of improvement, so you're right. we're on the right trajectory. and i think that we're in the space that the fed was certainly targeting. before making any particular moves. so i think we're on the right trajectory. >> how do you as a keen observer of what's going on both politically and in the economy, how do you view the deal involving carrier to save jobs in return for some $7 million in tax benefits, the kind of stuff that states do all the time. how do you see that and do you see now that a door has been opened so that more and more companies that are thinking of moving jobs overseas will come with hat in hand to a trump administration. >> well, i was not privy to the particulars around that analysis that led to that conclusion. nor can i really say what this would be for other company, but
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what i can say is that i think that it obviously creates an opportunity for small businesses to continue to do the business with that company and that's frankly one of the things we're focused on and why i'm here in cleveland because it's no secret that small businesses create the vast number of jobs in the country. they are the driver to job creation in the country. so, any investment that will allow small businesses to be able to flourish or to originate, let alone scale, i think is positive for job creation. >> your there for an eventy you're announcing some initiatives to help small businesses. explain. >> absolutely. we're doing, morgan stanley is doing an innovative partnership with the national urban league and national development council to create a lone fund. the capital access fund. that will invest in small businesses in the cleveland community. we have a long standing commitment to cleveland, as you know. morgan stanley created healthy cities in cleveland about 18
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months ago. we have a large wealth management presence here, so we're committed to this community, but as we took the council, they thought it was ta largers number of concentration i should say the large concentration of entrepreneurs of color in cleveland across various stages of development and industries that would give us the highest problem lty of success because as you know, there's a great market inefficiency with the lone distribution to entrepreneurs of color and when ever you have a market inefficiency, there's an opportunity to get outside market returns and we want to be right in the middle of that. >> alpha is good. carla, thanks so much. appreciate it. >> thank you very much. >> you're very welcome. shares of reje rerks on down and why this bio tech is soaring. the news on bluebird coming up on "power lunch."
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back. big health care conference taking place in new york city. industry leaders taking on the toughishes including drug pricing. meg is live with the ceo of regeneron pharmaceuticals. >> thank you very much. doctor, thanks for being here. let's start with the election and its impact on your industry. there's a lot of optimism there will be an alleviation of drug pricing pressure, that perhaps the regulatory environment will become more favor bable. what are you expectations? >> as i back since i started the company, this will be our sixth administration when he will deal with, while the administrations change, the things that don't change are the need for people to have drugs that can address important health concerns, so what i look forward to is continuing to argue for the environment. where innovation is encouraged. where it's incentivise d on the
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one hand, but on the other, we make sure drugs are afford bable for people who need them today. that's a tough balance to strike. fair pricing today. of course. and yet, enough of an incentive as president lincoln said, the fuel of interest for the fire of genius. that's important as well. >> six administration, going back to lincoln already. one thing that's come up this year is the role of pharmacy benefit's mag, the idea that a middleman helps invise driving prices up. we spoke to steve miller. he said that's not true. what's your take? >> i don't think it's uniform across the board they're driving prices up. some case, be driving access down. not enough patients getting the drug for lowering cholesterol. about 75% of prescriptions that doctors write, who think patients should get this drug, are rejected, so we don't think access as good as it could be.
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>> some argue that if the price were lower, prescriptions wouldn't be left at the pharmacy counters. how would you respond? >> i think people actually knew what the net cost of a prescription is is, you would have a slightly different view. if you take and look at the 14 plus, thousand dollars, the actual net price may take into account the rebates and the copay stance for a patient is much, much lower than that. most would say cost effective. >> the pick up of these drugs hasn't been as quick as some expected. what can you tell us about the studties to come showing their imact on heart attacks for xal pm. >> i think what you're referring to, the studies we've done show that we clearly lower cholesterol and there's lots of reasons to believe the way we do will result in a benefit to by preventing heart attacks and strokes and cardiovascular
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death. but until we have the results that show that, i think there are still some people who remain on the fence and we would hope that when those data start to emerge, that that would encourage more use. >> there are some that the study on your inhibitor wasn't stopped because of overwhelming efficacy and that we should expect results in the second half of 2017. your competitor in the same space said in the past month, quote, they are as confident as they could be that the data on the path of the competing treatment has cardiovascular benefit. can you characterize how you feel now? >> yeah, i think you ask a fair question. and what i would say, i expect am again stocks to be positive. there are papers that have just come out, this week, new england journal, making a very strong case by blocking pcs, you will
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have an effect on heart attack, strokes et set rachl i think that's been the rule in this field. there will be multiple positive studies like there were with statens and we look forward to that. >> you are as confident as you can be about the results to come in the second half of 2017? >> i'm very confident, but that's why you do the experiments. you get the data. >> all right. thank you so much for joining us. got to leave it there. back to you guys. >> thank you so much. coming up on street talk, french company that one annists thinks will rally. that's 40 for you nonfrench out there. plus, donald trump expected to tour the carrier factory in indiana, then make comments. we'll take you there live the moment it happens. "power lunch" returns.
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analysts recommendation on the stocks you need to know about. we kick it off with bluebird bio. bmo is caution on the stock. sent shares sharply higher. 17%. saying the strength of the phase
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one data on the experimental treatment is causing to add pique sales higher, but the analyst is sticking with the market perform rating, raising the target higher to 83 buck, saying only modest additional upside can happen. >> in a related stock, celgene. they have a multiple myeloma treatment. >> anadarko still bullish after yesterday's big run. they upgrade apc to a buy from a hold. part of that is a forecast from higher prices. also, analysts like anadarko's oil assets in things like del del. boosted to about 22% more. >> higher than that. >> got to wonder how much of
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that is the supgassumption thac is going to stick by the cuts. so, is 55 fair. >> as i pointed out yesterday, the production cut takes opec b down to 2.5 million more barrels than two years ago. >> and demand is expected to turn. supposed to turn to deficit by next year. interesting. third stock here, wells fargo. we're watching it and a lot the regional banks. susquehanna downgrading to a annuineutral valuation. the analyst say everything good has been priced in. has had its best monthly performance in november ever. up 18%. valuations of the analysts points out are ott or beyond levels now. still, this whole sector is still on. this is probably the poster child for the extraordinary run that we have seen. post election. wa we are calling the trump rally. >> i was thinking the other day,
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which is dangerous, if they do roll back parts of dod frank, is that bad for jobs? a lot of people were hired. >> bureaucrats. >> i wonder about that. not a fan of regulation, but sort of an artificial job creator. finally, your small cap call of the day is criteo sa. french. digital ad technology company based in paris. adds to its small cap focuses. they say the company is delivering returns on digital ads by leverages relationships between consumers and publishers. they don't make expansion plans, it could be quote needle moving. they've got a $56 that is correct. that implies a nearly 40% return on the stock. >> interesting run. >> never heard of it. >> seen it around, never really paid attention. >> that's why we do street talk. >> the ones you have not heard
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of. big event we are awaiting and you probably have heard of, that would be the president-elect. expected to arrive at a carrier plant in indianapolis. jobs saved when we will take you u there live when "power lunch" returns. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade. if you're on medicare, remember, the open enrollment period is here. the time to choose your medicare coverage begins october 15th and ends december 7th. so call unitedhealthcare to enroll...
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welcome to the second hour of "power lunch." you're looking at a live shot of a carrier manufacturing plant in indianapolis. president-elect trump set to take a victory lap after he has made a deal to save 1,000 jobs from leaving the state of indiana and heading to mexico. vice president-elect pence, the governor of indiana, the ceo of united technologies, which owns carrier, also are set to speak. and we will carry this t speeches live as soon as they begin. let's get the mood on the ground there. phil lebeau is live at the event in indianapolis. phil. >> and melissa as we wait here, we're not actually on the plant floor. where we are is sort of a side, i wouldn't even call it a conference room. it's bigger than a conference room, but it's very small, especially relative to
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appearances that you expect by the president-elect when he visits. there are about 200 employees who have been sitting here for at least an hour. you know, pretty good natured, waiting for the awe rival of mr. trump along with mike pence along with the ceo of united technologies. so, when all of them arrive, it will be interest tog see what kind of reaction is here, especially when ceo makes a comment or two, which we are told he is going to. so, that's the scene here at the carrier plant and i know we are waiting for mr. trump's plane to land here in indianapolis. but when you look at this deal that's been worked out here, it's an interesting situation because initially, they said well, we've saved the jobs of united technologies workers of the plant. they're staying in indiana. not all of them. 2100 o were scheduled to go to mexico from two plants. 1400 at this point. 700 at another plant in huntington, indiana. that plant is huntington is
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still closing as planned. those 700 jobs going down to mexico and of the 1400 jobs here at this plant, a little over 1,000 will be saved. still not clear exactly which of those workers of the 1400 will end up losing their job as they certainly restructure business here, so it is an interesting vibe talking with some of the employees here. overall, they're relieved. to say the least, but there's also certainly a sense of not every job is going to be staying here in indiana. >> all right, phil, thank you very much. obviously, blunting the impact of those job cuts. >> all right, so as we await mr. trump taking the podium, let's speak more about the president-elect's jobs and trade policies. let's bring in former republican majority leader and vice chairman, eric cantor and robert schwapp row, former undersecretary of commerce of economic affairs under bill clinton. great to see you. good to chat with you again. bunch of virginians up here, but what do you think of this
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carrier thing? ? more of an xik stunt? some saying do the incentives offered, is is it a good deal overall? what's your take on this? >> well, first of all, i want to say it is great to have a president-elect and a vice president who are committed to economic development and two boosting jobs and investment in america. it was a promise that now president-elect trump made as a candidate and i think he's delivering on it, but brian, as you know, the real challenge in what mr. trump will work on when he's in office i'm sure with my former colleagues in congress is to create an environment and framework here in america so we can start to attract capital again and to create jobs. >> what's next? so, we've got this. we get the win. we get to keep these jobs here in the state. there's been some talk about apple. do you think eric, that other xaeps are going to follow this lead or might take the opportunity to shake the tree a little bit and see what they can get? >> well, i mean, listen.
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you can't i think and i'm sure that the president-elect knows, you can't have one off decisions with every company. that's not how we work as a democracy in the united states. what i think all of us are hoping for is that we can once again see a return to an overall environment in the united states that speaks to regulatory reform, tax reform, hello care reform. that actually then says hey, it is now a pro business environment. we can see investors take risk, invest capital, create jobs, so once again, to see america lead when it's in terms of competing for capital. and unfortunately, that's not been the case over the last eight years. so i'm very bullish, very optimistic. >> robert, in a broad sense, what is the systemic change that needs to take place to address the reasons why companies move jobs overseas? what can we do here to make it not individually less desirable
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for them to do it, broadly desirable. >> two thinlgs to remember here. first, when we have been creating jobs at an average rate of 208 thourk per month the last four years. we've had job creation over the last four years that rivals the job creation rates of the 1990s and 1980s. donald trump's first job is to sustain that. not to change it, but to sustain it. in order to do so, the economy has to grow. we need to boost demand. >> excuse me, for interrupting for just a minute. mr. trump's plane is landing at an airport in the indianapolis area. i don't know that it's necessarily indianapolis airport, but i just waned to point that out for viewers. continue your thought, robert. >> sure. ultimately, the most important thing for job creation is people's incomes. if people's incomes are rising,
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demand for the goods and services that require new jobs and new workers will continue. and the real challenge that trump faces is the productivity has stalled over the last year. he needs to make the public investments that will restore productivity growth, which in turn, translates into income gains and the income gains are ultimately what drive job creation. >> eric, i want to get back to the notion of creating an environment that will attack capital. ipg most people would agree that is the kind of environment that will in turn create jobs, but if this sort of intervention is a pattern by the president-elect and vice president-elect, won't that scare off capital? if the government can decide that they can effectively sit on the board of a company and tell them or jawbone or whatever, persuade them to stay in a state
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with the threat possibly, that they could lose federal contracts or other sort of benefits, i would think that as an investor, i want to stay out of the that picture. >> you make a great point. i don't think that that's what this administration will be about because i believe that the commitment is there and certainly on the part of my former colleagues in congress, the commitment is there to once again restore the prodlth gout environment in the yit. there is an international global competition for capital right now and the u.s. over the last eight years has not been winning that race. as we've seen the progression of companies wanting to go offshore. wanting to go elsewhere in a better, more competitive tax environment, business environment. so, when mr. trump talks about regulatory reform, talks about putting a moratorium on future regulations that are unnecessary, lightening to load, when congress talks about tax reform and when congress says harey, we're going to get rid o this health care law and replace it with something that is much
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more patient friendly, consumer friendly and business friendly, those are the kinds of things that can be done that can be permanent and not just a one off with a company here or there and much more prominent in a democracy. >> you know, last question. is when you talk to, i'm sure you still have friends on capitol hill. there's a lot of consu-- right i get it. i understand it. however, do you think when mr. trump becomes president trump in january, they're going to be able to just work together? because even members of the same party will have wildly conflicting goals or agendas. >> been there, done that, yes, you're right about that, but i do think that mr. trump comes in with a mandate for change and to get something done and to get people back to work. and as his campaign slogan was about, to make america great again. there's ennethuz yaz m for a und republican government to get
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right to work. my good friend and successor kevin mccarthy just announced that congress is going to be in several week more over the next year to make sure they implement the trump agenda and it starts with repealing and replacing the health care law. then goes to tax reform. and the kinds of things that most investors, small businesses and large, are looking at, which is tax reform to just regenerate the job engine in the country. yes to make sure that incomes continue the rise, but also have america start leading again when it comes to being the best place for capital. >> robert, jump in and i want to get your thoughts specifically about deficits. if there are big tax cuts and big infrastructure spending, should we worry about them? we don't need to worry? >> of course we need to worry about them. if we get a big deficit especially if the deficit is generated by large tax reduction for those at the top and for
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business, we'll get relatively small stimulus. after all top 1% can only produce so much demand. and then we will find ourselves in the same pattern we saw in the 1970s and 1980s. in which large deficits are followed by rising interest rates, which eventually choke off the expansion. we do have to remember here that the problem is not to get america to work. unemployment is below 5% today. we've largely achieved that. the goal is to keep that going. and to do it with rising incomes. and that means a serious agenda of public investments in education and training and infrastructure and basic research and development in all the things that make all companies more productive.
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we certainly don't want to take as our guide to creating jobs special tax breaks for a company that earns $7.5 billion in profits last year. got $6 billion in defense contracts. paid its top five executives $50 million in order to preserve 1,000 out of 2100 jobs. it's essentially a transfer from the taxpayers of indiana who are providing these tax breaks to the shareholders of united text message, plus those 1,000 workers. that's really not a model for creating jobs across america. >> okay, good discussion. we'll see you soon. take care. thank you. >> thank you. >> we're keeping an eye on this trump ooempbt. as soon as the vice president-elect or the president-elect come out, we'll bring to you.
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meantime, we want to get to the market. the dow continuing to power higher as we kick off december trading. crude oil is soaring again. up by about 4% right now. the s&p is negative. nasdaq, we should note, sitting at session lows. some of the stocks we are watching, goldman sachs, one of many financials in today's session continuing its monster run since the election. harley davidson up more than 1%. motorcyclemaker trading at levels not seen since 2015 and sketchers getting an upgrade, a filing showing its ceo bought more stock, a sign of confidence in the shares. bob? >> and melissa, we're still up, but of the highs. technology being used as a source by other groups moving up like banks for example. and energy stocks. we've got a nice little warning from caterpillar. we have moved up on the 2017 earnings on tax cuts and infrastructure spending.
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caterpillar their 2017 estimates, the analystses estimates are too high even though they're encouraged by the tax infrastructure issues. tax reform issues overall, but numbers are still too high. caterpillar still trading although off of the highs. it's an important warning from a company that would benefit from an infrastructure bill. retail traders came back to november with a vengeance. we saw numbers for daily avenue trades for shaub, up 36%. interactive brokers trading activity up about 22%. means the small guy xwanlg in in november. haven't seen that in a very, very long time. right now, we got tech stocks down. bank stocks on the upside. bah k to wrou. >> pick it up, thanks, very popular tax deconduction. mortgage interest write off.
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maybe on the chopping block in a tax tax overhaul. how might in affect you? plus, a "power lunch" exclusive interview with martine rothblatt and donald trump is getting ready to talk b about saving jobs at that carrier plant in indianapolis. we'll bring this to you live. can download then binge watcht u your dvr'd shows from anywhere. that makes you more powerful than whatever it is you just stepped in. or that friendly dumpster diver outside. i wouldn't sit there. it's your tv, take it with you. now you can watch your dvr anywhere, at no extra cost, with directv from at&t.
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back to "power lunch." breaking news out of france. fren french president has said he will not run for re-election in 2017. he basically tweeted a short while ago, he's aware of the risks that would gather around me. in order, he does not think he would form a coalition. hensz as president, i have to lead the state and as a socialist, i cannot bring myself to the dispersion of the left. so he is not going to run for re-election in 2017. if he tweets anything else, we'll have it for you. >> well, just thinking about this. there's a look at donald trump's plane. it could be a while before he gets off the plane. he's not even off the plane yet, got to get across the street to the carrier factory, so it may be a while before he takes the stage. based on the news sue just gave, that's a big statement in france. i'll tell you why we care because even if you don't invest in france or o don't like french
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food, what have it is, this now basically puts the election as a sort of center right candidate. far right candidate. >> folding of the left. >> unless the left called a democrat oversimplify it, unless the democrats of france can find somebody new in the next few months and promote him or her aggressively, you're going to get a run off between the far right and filin, the center right. it's amazing what's happening in europe right now. >> yeah. >> it absolutely is and that sounds like a folding of holl d hollande at least in the short-term. >> it comes actually after he did some aggressive i guess the word would be polling. he certainly went out and talked a lot to officials that he was hoping would coaless around him.
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this was a very highly anticipated address this afternoon, so he's not going run. >> we're looking there at the trump aircraft. probably one of the last time he'll probably fly on that aircraft. for quite some time. because he's going to get a new one in about six weeks time. >> air force one, yes, probably. >> if you were wondering, guy, we were talking before the show. i said how much longer is the secret service going to allow him to fly on his own plane. i know he's not the president yet, but there is definitely security. >> look at trump tower. it's become a fortress. so you wonder, air force -- >> and does he still use his old pilots? i don't know if there's a pilot on staff or whether these are air force guys who are in charge now or what. >> air force one has a lot, it's public information, security enhancements, just say that. >> conventional commercial pilot might not be trained. >> what does this button do?
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it's not what you want to have happen. this airport is directly across the street from the plant. so once he leave, it woept be that long, but could still be a while. >> we were watching basically the shot, we saw the camera shot. walk. up to this point. on the tarmac. so that's pretty fascinating perspective on a plane that is carrying the president-elect for the camera crew to just walk right up to for this shot you're seeing here and we're waiting the president-elect. to deborad and he will make his way to the plant and make some statements about the jobs that have been saved here in america. >> one would assume in the audience there, that phil described is about 200 workers from that plant that he will receive extremely enthusiastic
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recepti reception. governor pence instrumental in achieving this arrangement that will save roughly 1,000 jobs of the 2800 that were scheduled to go to a mexican insulation down there. the kind of incentives the kind extract from state governments all the time. as states compete to other states and now with other nations for the economic benefits. >> he has been waiting patiently. a lot of moving parts. it's great to keep jobs. not saying anything about the
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jobs, why do you think there's a negative to what's happening in indianapolis right now. >> i think there's a lot of negative happening in indianapolis right now. i'd be pretty happy if my job was the one that was going to be saved, but what i would like to know is this going to be standard operating procedure for the next four years, where companies across the country are going to have to take into account the wins of the trump administration? this move might get on radar screen and i'll get a call and maybe be some punitive action. company after company, making decisions baseded on what they think washington wants and not what their customers and shareholders want. i can't even calculate it. >> i hear what you're saying.
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>> it's a free market view. >> exactly. >> but i will say this. if carrier gets this incentive as has been reported, maybe it is a good economic deal for them. so maybe they'll say guess what, we weigh the benefits and cost and as united technologies, we wait a little good will with the u.s. government and get more money on the other side. now they have to wor ory b about good will from the government. will the president start tweeting things against us. that's just not sort of libertarian economics. but it is sort of basic. i want companies making decisions on how they best can great value. not avoiding a nasty tweet from
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the president or phone call from the commerce department. i think that's kind of frightening when you look at it. >> i think it would scare off investment in this country. to think that the government and i made this point with eric cantor, to think of the government at any point in time could insert and here we are excuse me for interrupting. on their way to the carrier plant. where there will be a press conference about the jobs saved with this deal we are discussing right now. greeting people. down there. and getting into that vehicle. to make their way over. all right, phil, let's bring you in. one point made is, there were incentives, but they were offered before, they still made the decision to leave and put back on the table.
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it's a different person negotiating. that being o president of the united states. donald trump has the bully pull pet. he used it in the campaign effectively and if you're here in the midwest, you heard a lot about carrier. here in the midwest, we've heard a lot about it. with we've seen a lot of factories and plants close down, go down to mexico. i've been to many small towns, illinois, wisconsin, indiana, wisconsin, for donald trump to come in here say and aif sooave some of these jobs, the 200 people here, they're going to be excatic to greet him. >> that's what this campaign should have been about. how today's workforce is going to deal with out information. 80% of the jobs lost is because
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of technological advances, not bad trade deals. >> exactly that topic. >> it is to me, the big question about the definition of work over the next -- >> agrees. >> let's not lose sight of the fact, go home, look their kids in the eye and say i didn't lose my job. i'm going to push back on you. this whole winning thing with the government, i get it. but you live in d.c. now they're headquartered in d.c. because it's the willie sutton argument. you go with wr the money is and that's washington. so i don't think doing this, united technologies will probably move their headquarters to d.c. everybody else is. why not guilty them. >> is that like your good case
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scenario here? >> i don't want apple, we need to build a plant here. even though it may not be the best thing, some punitive action. this could this should be a bipartisan issue. what kind of world, they have children, right, are they going to be, their children going to be growing up and getting jobs in a more prosperous economy if we have washington politicians threatening companies to take certain actions? does that seem like a prodlth growth plan to me? >> we're going to take a quick break and steve, we're going to get you in here in just a second. steve has been waiting patiently and we are going to take you out to indianapolis when the time is right. be right back. a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom?
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what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call now and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, it helps pick up some of what medicare doesn't pay. and could save you in out-of-pocket medical costs. to me, relationships matter. i've been with my doctor for 12 years.
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call now to request your free decision guide. and learn more about the kinds of plans that will be here for you now - and down the road. i have a lifetime of experience. so i know how important that is. we have just witnessed president-elect donald trump and vice president-elect mike pence come off that plane. landing in indianapolis just about, within the past 20 minutes or so. they are making their way now to the carrier plant where they along with senior officials of united technologies, will be making some comments about the deal that was reached to save
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1,000 jobs here. as soon as that begins, we'll go right to it. meantime, we want to get to meg, who is at a health care meet ng manhattan with the ceo of united therapeutics. >> melissa, thank you so much. thank you for joining us. >> my pleasure. >> so much to talk about with you. wung of the things that's so interesting, this motto that you have, death is optional. tell us what that means. >> it's what ended up happening with regard to our daughter, genesis. she was diagnosed with a fatal illness. every doctor said within three year, she would be dead. and yet, our company was able to develop a medicine that saved her life and is being taken now by 30,000 other people. keeping all of them af live. so i've had direct personal experience that through the pharmaceutical industry, we can make death optional. >> another big project you're working on is trying to create a new supply of organs for
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transplantation. we have such a shortage now. >> people die in organ transplant wait list every day. and yet, thanks to the advances in genetic engineers, we can modify the big gee gnome of genetically modified pigs can be used in transplant patients to save people's lives. this has never been possible previously because there was rejection from the human body of the pig organ, but by modifying the genes that cause the human immune system to reject it, organs can be tolerated and we're confident that by the end of this decade, we will be b able to keep people alive with organs manufactured in pigs. >> by the end of this decade, only a few years away. when are we going to be starting to test this in people? >> our plans are in 2018 for the first kidneys, the genetically modified pig kidney would be transplanted into an end stage renal patient at the university of alabama birmingham, where
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we've established the institute. >> i want to ask you b about politics. the drug industry having seen a major bounce since the election of donald trump. >> i think the impact is going to be a positive impact because he's so big infrastructure. we're on the cusp of a passage of the 21st century research act in medicine. that's going to expand the medical resench quite a bit. in addition, there's a federal procurement going on now, the national network for medical innovation, to create a nationwide infrastructure for regenerative medicine. this is the medicine that cannot only keep us alive, but keep us healthy into our seventh, eighth, ninth and decades, so i think that things are looking really bright for our industry. >> so, potential positive business impact from a donald trump presidency. as a transgender woman ceo, do you think personally about donald trump as a president given his takes on social issues? >> i really don't get that much
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involved in the politics at that level. i'm really happy to just be alive in the time when transgender people aren't like thrown in swral and beaten up and killed. unfortunately, it does happen in a lot of parts of the world and a lot of transgender people in the u.s. don't get all their right, but thing rs better than ever and people are accepting, so i'm happy to be out there and be open and be kind of a beacon of hope for transgender people. >> you have a question? >> we have a pleasure of speerking on america's conference a couple of years back and that the time, you were talking about xeno 48 and so many people out there are fascinated by artificial intelligence and robot, but you mentioned that it was like talking to a third or fourth grade version of your partner. i'm wonder, years later, what is vena 48 like now and can we extrapolate those gains made in
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the past few years in the future. >> yeah, melissa, it's a great yes. i think you can extrapolate. the it's extrapolated linearly, mean thag three years later, i think it's pretty much like a 6-year-old. she's recently been involved in interviews with morgan freeman and whoopi goldberg on some national network shows and they were pretty blown away. this is like talking to a friend of mine's kid. you know, there's only so long you can talk to a friend of yours kid, but she is advancing. she's on twitter now and at the rate of google's interest in artificial intelligence and videos continued advances and processors, i'm confident that within a ten to 15-year period, you will see teenage level intelligence. >> so, basically, just from former viewers, it's sort of like a robot and you can', she looks like your partner and she actually speaks, so what has made vena 48 much more robust
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now? you were say iing you inputted everything from e-mails to amazon shopping history, et cetera. >> there are thousands of people hacking mind ware. software that tries to replicate the operating system and care in our cognitive neuron and so, there are so many people figu figurifigur figuring out the way to parse sentences, put -- >> i'm sorry to interrupt, thank you for joining us. thanks to meg. we want to go to these live pictures of president-elect donald trump entering the indianapolis carrier facility here. >> with the ceo of united tomgs directly to mr. trump's left. that is the ceo.
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>> he is easy to pick out of a crowd. he's about '2", 6'3". >> short to you, maybe. and he has that unmistakable coiffure, easy to see. >> now to phil lebeau. who is again inside that facility. not sure how close, phil. >> more of a buzz. not a whole lot more. he's going to tour the plant. it's not expected to be long and then when he comes in, he is expected to talk. it will be b the ceo first. we'll hear from mike pence and then donald trump, the president-elect is expected to address about 200 workers for the carrier plant. they've been sitting here now
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for about an hour, guys, eager to hear from the president-elect. so, when he comes in here, obviously, we'll be taking it live, but these comments, they're expected to last about 15 minutes. so, it's not going to be real long. enough for donald trump to -- delivering on a campaign promise na a lot of these people have hard. they'll tell you before this deal was struck, a lot of them were skeptical that the president-elect would be able the to deliver, but he has in the ice of these people. >> thank you very much and as we watch the president sitting down there at a table discussing with the ceo of united technology, which owns carrier and a couple of other folk, maybe the plant manager there, a lot of people with their cell phones out taking pictures. of the president-elect. steve liesman is with us. jimmy, i believe still is.
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if he's not, he is, indeed. >> talk about what jimmy, my take is that the president is well within his right and responsibilities, he should be involved in helping keep u.s. jobs in the united states. carrier and united statesed technology, their job is to help take care of their shareholders and that presidents ought to do this within reason, within rights. we don't know what the understood lying deal is. if people want to take their jobs and move them to mexico, let them do that, but shouldn't be left for it. then that's part of what you have to factor in. >> you get a call from the president-elect of the united states and yourself forced with a choice of o plying with his wishes or putting if jeopardy
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because of whatever ill will he play build with the administration, losing federal contracts, isn't that a slippery slope? even if it's unspoken. >> keeping jobs in the u.s. is a big thing. >> i agree. all for keeping jobs in the u.s. >> i think probably what he's doing here, it's too retail, too small. you're going to lose. in any given month, you could lose 4 million jobs and gain 4.2 million others. this is how you get to 200,000 plus. >> listen. >> the president only has so much time and energy, the attention span, do you want the president looking for these kinds of instances and making phone call, intervening or do you want him focusing on the
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broader policy to create a better business environment in the united states? how much time has this president spent talking about reworking old trade deals. for new company, start ups indiana some sort of strt up hub? maybe they should focus on that rather than trying to keep jobs that want to leave. >> i think this serves as an example to people, hey, you know what, we're going to close down a big plant, you may get a call from the president-elect and there's going to be a public price to pay for that. and you may decide to do it any way because it's so cost effective. that's really in phil's department, but government does government and companies do companies. >> what i want government to do is think long-term. trz the best environment and best e kole ji for growth. >> i think steve's point is that it's not mutually exclusive to
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do this and think long-term. >> who says he's not. sent a message to people that you need to pay attention. shouldn't idea of picking up and packing and going to mexico be a costless move for a company? >> would you rather have to thailand shouldn't we care and shouldn't government who does a lot of business with boeing, exert whatever influence has to try to save those jobs and keep the income in the united states? >> if you want to go great things with your life and company sh there's no better place to do it than the united states of america. should we, do we want to get those t-shirt making jobs back from vietnam?
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those were jobs. should we be fighting to bet those back? >> you're smart. smart guy. you know that's a bad metaphor because the idea being there's never been a country in the history of the world that manufacture low cost goods. you can't have both. you've got to be a low cost, low wage company. to why can't we do the same. >> some jobs need to go. or to another country this general because it's not profitable for them to be in the united states. the government steps in. that's some sort of intervention that interferes with the natural evolution of the economy. that's the point and so, the t-shirt making example is a good
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example. because those are jobs we don't want. if that happened today, the question is would the administration, the incoming administration step in and try to save those jobs. at what point. we get to point where it's too much of an intervention, to hire wage jobs. >> but we do need entry level jobs. whether t-shirt factory or a clerk this a party city. >> what you don't want to do is close the borders and make it so u.s. companies are not come pet twif foreign companies for the business of the product itself or the jobs. i think if part of o it and j jimmy, i'm talking here at the margin. by going oversaes versus 5%. my guess is maybe carrier with the margin here with some government intervention at some level can make the difference of
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keeping those jobs and ultimately, it's cost effective for the u.s. when it comes to nobody's talking about closing the worders here. >> i think we spend far too much time trying to keep jobs. which i think economics want to be elsewhere. and little time to create a new environment where there's education. that's the future. i mentioned automation earlier, zero talk during the campaign, about what to do about the rise of the robot. something far more important than if future than these are reworking. >> let's focus this segment on what we're talking act.
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let's stick to just this. because let's not forget, guys, that if we go with the lowest cost option as jimmy says, economics wants jobs to move x, y and z. you could make an argument that most jobs need to go out of the country, which is terrible and also, jimmy, i want to ask you this. what's the consumers role in this. if companies know that american consumers, who really have the power, not politicses, decide to pay more for american made goods, they might return manufacturing to the united states. >> that's the problem. >> it's not a b problem. just economics. they mostly don't care. they want the lowest price. >> but guess what, guess what, america. with the lowest price will come the lowest cost of manufacturing, which means probably not the united states. what is the consumer's roll in this? >> you mentioned that economics
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would dictate all the jobs lead and maybe the current category of jobs leave. that's to come up with new categories of jobs. our job b is to come up with new kinds of work that -- coming from donald trump, we have the most amazing economy in the world. no economy's at the -- we want to copy what doesn't work. what countries are not at the frontier are doing. i want to very competitive cut throat private sector with a safety net that takes that into account. >> we're going to take a little interruption here and go back to phil lebeau. >> wer still waiting to get a
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better sense of when president-elect trump will come b into this room. we're all kind of locked in here along with 200 employees from this plant. we think it will be within the next four to five minutes, but that's just the best guess based on listening to people and the conversations here. for the people here, a lot of them during the campaign heard, we're going get a phone call or be talking the day after i get elected with the ceo of the united technologies or ford or whatever company and we're going to talk about keeping jobs in the u.s. for those people, they were skeptical after dt was lekked that he could keep these jobs here and now, they're going to hear from him. >> he hasn't even started his job as president he's got at least a partial victory with
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respect to the jobs slated to go to china. you remember, steve liesman, carrier was really fingered here, pointed to, demonized. if you will. during the campaign. that had to hurt their brand. if i was looking at buying a carrier air conditioner, i might have been influenced to buy the other manufacturers. now, i think this is going to help their brand a lot. they're not doing something that doesn't help them, too. >> i think six months from now, it's 90 degrees and i need an air conditioner. and there's one that says carrier, wonderful brand name. however, if you tell me that carrier is $479 versus 25.
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and that's why i want to get to phil. any idea what we're talking about here in terms of the cost differential? without whatever government incentives were thrown in the pot here, which don't know about yet. talking about furnaces, not air conditioners. >> we are talking about furnaces. >> nobody does it better than you, phil. >> just to put this into perspective in terms of wages that is really the only apples to apples comparison we can make, most employees make between $16 and $21 an hour. the expectation was that the employees in mexico were going to make between $3 and $4 an hour. that is the vast difference in terms of dollars and cents in terms of operating here in indianapolis versus in mexico. >> we need a shot of melissa. melissa is agape at that number. >> if you are talking -- >> should you make that up?
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>> even if you think you know about ten years it can't possibly come near what it could have -- >> there are some offsets. i'm not saying that is the only metric. >> some companies move stuff overseas. the logistics of operating, the idea of being closer to the consumer, the idea of the shipping, they can't overestimate. it is not a total differential of 16 to 5. if it is half wrong it is still a big number. >> if you have been to these towns that i have been to, the last incandescent light bulb factory was shut down in '09. my dad's neighbor was the plant manager. you talk to people in the big box stores. you say why are you shopping here? i need cheap prices. why did you lose your job?
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manufacturing facility closed down. why did it close down? nobody wants to pay anything. what came first? the job loss or need to have everything cheap. people buy the $5 discount item because maybe they have to because they don't make the wages they used to but don't make the wages they used to because the store demanded that the production move somewhere else. >> do we think that there was some government policy that would have offset the fact that we had 3 billion new people enter the global labor market between india, china and fall of soviet union and the 1990s. do you think there is some policy that would not create a massive pool of much cheaper labor? these are huge forces of nature. we have a better safety net but not going to reverse it.
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>> massive tariff. >> to phil lebeau we go. >> i was waving to the camera. whenever you see the pools show up you know the president-elect is not far away. the reporters are coming in right now. i would imagine we will be seeing donald trump, mike pence and the ceo of united technologies walking in in just a matter of minutes. we have seen a few other people with the president-elect travel team walking in the hallway. i imagine it is momentarily before they enter this room. >> i'm not suggesting tariffs, guys. the consumer has a role in this along with the politician. >> the way it is supposed to work is this -- and it hasn't. the way it is supposed to work is you get cheaper light bulbs, cheaper furnaces. consumers have a surplus and
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they deploy the money elsewhere and that leads to jobs in other fields. >> please welcome chief executive officer of united technologies, greg hayes. >> mr. hayes is ceo of united technologies, parent of carrier. >> first of all, welcome to carrier indianapolis. it's an honor to welcome president-elect trump as well as vice president-elect pence. first thing i would like to do is thank our carrier workers for dedication and loyalty and especially for continued focus and dedication during a very difficult year here in indianapolis. over the past couple of weeks we have had productive discussions with president-elect trump and vice president-elect pence about their plans to improve the competitiveness of the u.s.
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business environment through tax reform and through a more thoughtful approach to regulation. those plans have given us a renewed confidence in the future of manufacturing here in the united states. it's why today we can talk about 1,100 jobs in indiana going forward. so i am pleased to announce that the plant will remain open and continue manufacturing operations here. we will designate this facility as a center of excellence for gas furnace production and invest more than $16 million over the next two years to ensure that this remains a world class manufacturing facility with the ability to compete globally. thank you again for your hard work and dedication to the entire carrier team and we look forward to this facility continuing to deliver industry-leading products to our customers across north america. with that, it is my pleasure to introdudeuc
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introduce vice president-elect mike pence. how about another round of applause for greg hayes, chairman and ceo of united technologies. it is great to have him in the hoosier state. to the executives at the united technologies who are with us, executives with carrier, to the great carrier team here in india indiana, to our honored guests, my fellow hoosiers it is great to be back home again in indiana.
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and this is a great day for indiana. and it's a great day for working people all across the united states of america. the state of indiana is very proud. we're a proud manufacturing state. we're home to low taxes, sensible regulations, great schools and roads and the best work force in america. since the 1950s, carrier has been a part of indiana's manufacturing success story and we have been proud of it. as governor i couldn't be more pleased and grateful that thanks to the initiative and leadership of president-elect donald trump that carrier has decided to stay and grow right here in america. we're so grateful. we're so grateful that thanks to
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the initiative of our president-elect that i'll talk about in a minute and frankly thanks to the confidence of greg hayes, united technologies that carrier has decided to stay in indiana, invest more than $16 million in this facility alone and will keep more than 1,000 jobs right here in the heart of the heartland. what a difference a year makes. you know, the truth be told, job announcements are almost a daily thing here in the state of indiana. we're ad record employment today. we have more hoosiers going to work than ever before. that's why frankly along with all of you who work in this facility that day february 10 was a heartbreaking day when carrier made the difficult
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decision to close this facility and move jobs out of our country. we met with the leaders of the company back in march. try as we might to make the indiana case it was clear that was cast. the simple truth was that policies coming out of our nation's capitol were literally driving jobs out of this country. what was missing was clear to me as your governor. what was missing was leadership and change. the american people voted for change last month and even before taking office our president-elect provided real leadership that made the difference. you know, president-elect donald trump did just what he said he would do. he picked up the phone. i was actually in the room. he picked up the phone and
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talked for one american to another and talked about our plans, our plans to make america more competitive, to reduce taxes, to roll back regulations, to put american jobs and american workers first again. he made the case for america. and carrier decided to bet on a brighter future for the american people. and we are grateful from the bottom of our hearts. i'm very humble to be standing before you today. i truly am. my family and i are deeply moved by the opportunities people of indiana have given us and now the american people have given us to serve. i'm especially humbled to have played some small role in this wonderful news not only here in indiana but all across this country. i

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