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tv   Fast Money Halftime Report  CNBC  December 14, 2016 12:00pm-1:01pm EST

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>> right. well, we'll keep our eye on that meeting. it's interesting to hear art cashin say once are you done with the announcement and the presser, keep your eye open to see if trump does respond somehow to any decision on twitter and what that does to the conversation. >> he is no stranger to doing that. >> let's go to scott wapner. a busy afternoon ahead and "the half." ♪ >> our top trade this hour, the debate over dow 20,000. what that milestone really means to your money and whether it's a sign of even greater things to come or a warning signal that stocks have simply gone up too far too fast. with us for the hour today, joe terra nova, stephanie link, the brothers najarian are here, barbara duran, senior portfolio manager. richard fisher is mere as well. he is the former president of the federal reserve bank of dallas. it's great to have everybody here. mr. fisher, i'm going to go to you first.
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the fed decision is coming today. a decision that has already been made by this point. >> right. >> any visurprises today? >> the market is discounted fully. the real issue is what the chair says in her press conference. it will either be a nonissue because it's already discounted or whatever she says in terms of the future path and the key operative words are slow and gradual. do they change from that or not? we'll see. >> if you are sitting in the room today or you have been advising or around the table over the last several days, put into context what the trump rally means to that conversation. >> that's a great question because we've seen rates come up. it started after brexit. remember, the ten-year treasury was at 136.6. that's the lowest since hamilton. not the musical. the real guy. >> the british rate. things started to rise.
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it was at 188 before the election. i'm talking about the ten-year treasury, and now it's up bobbing its head. what's interesting is that we've seen equities rise against that background. you would think you would be discounting future cash flows in a different rate than you were when rates were flat, and you thought it was going to stay that way forever. i think it's driven purely, that is this equity market, this dow 20,000, and the other markets by business optimism, and you see it everywhere because of the trump election. >> if i would have sat with you three weeks, four weeks ago before the election, five weeks, whatever, you would have said that the whole stock market rallied because you said that it was drifb by fed policy and nothing else. >> that's the -- >> now the whole environment has changed. >> that's right. you know, we talk about black swans in the business of finance. i refer to donald trump as the orange swan. >> boy. >> we've had an orange swan event. first chance tax reform, first chance at deregulation, first chance at getting a health care system that may be better and
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more accommodative for people and can actually work. this was a surprise, an orange swan, but it's a happy surprise from the business standpoint. i think that's why stocks have done so well. >>ing to overall market conversation. we asked at the top of the show, i'm going to you first, pete. dow 20,000 which is in striking distance. >> striking. >> it's a warning sign or a sign of even greater things to come. what do you think? >> i would think that people are just looking at it as a number. i know the desk we've talked about it time and time again. 20,000 is just a number. it's still a big round number that everybody wants to look at and use as that gauge, right? just like 10,000 was years ago. 20,000 is there again. is it a pause? it's probably a pause, quite frankly, i think, if we get there. we probably hang around very close to that number for quite a lot of time, scott. it's every single couple of days and how quick it rolls over. yesterday it was all about technology and energy. today technology is leading once
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again. you look over at the financials. everybody is expecting them to fall because they've had this incredible run to the up side, and what do they do? they start to turn around. you look at the bank of americas. yeah, there's a couple of big names that are pulling down the rest of the xlf, but you look at the financials. they are showing some strength off of the lows even today. >> yeah, joe. >> technology has underperformed since the election on the belief that the country would adopt policies that were more nationalistic. technology needs that globalization story to advance earnings. it's not surprising. pete talks about the performance yesterday and today and, oh, there's a really big meeting at trump tower today with all the technology ceos. is the street getting ahead of that thinking that maybe the movement towards this total nationalistic approach is not going to be as conservative as we previously thought? i think the market thinks that that's the case. i think that's where you are seeing some buying come back. good buying. warranted buying in technology. >> you guys agree at all, you know, maybe with former president fisher that maybe the market is getting ahead of itself a little bit. there's not going to be any
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surprise in the room today in d.c. that chair is going to come out in a press conference and not surprise anybody with her language more than her actions? >> i don't think her commentary is going to be very surprising at all. >> you can say we finally got it out of the way, and maybe it's a rally until inauguration, and we continue to talk about the trump growth paradigm. or we can say, guess what, we've run too far too fast. i come back to valuation. we're at 17, 18 times forward estimates. i think the estimates are too low. i think growth is going to improve. i think earnings are going to improve. especially in some of the beaten down sectors. we've talked about energy being a huge tail wind going forward, and i think that's going to help, and so dow 20,000, i get it. people are nervous about the number. if the valuation supports it,ing i think stocks can continue to run. >> mr. fisher, she said valuation. i saw you perk up there. >> well, first of all, we talk about the dow, the dow, the dow. if you look at the russell,
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broader index, it's up even more. this is a broad based thing. you're right. it's all a question of valuat n valuation. again, we have a competitive market now where we didn't have it before, and you have to do it in relative terms. i want to make one quick point. expectations are very powerful. ronald reagan gets elected. markets are up measured by the broader market. 8.5%. he gets inaugurated. the next year it's down 20%. it takes time to put this in place. from everything i understand and the appointments this new president-electric has made and given the republican congress, they actually may move faster than we saw when -- he didn't get his tax cuts until his second term. people have to realize that. >> give me a good segue. speaking of moving faster, is there a chance that the fed itself is forced to move faster because of inflation expectations today. ppi, hotter than expected. >> yeah, but not that much. >> you have the rally in and of itself and the worry inside the room on inflated asset prices and bubbles, et cetera. >> yeah.
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>> well, we are seeing more pressure and we're also seeing the commodity cycle, the industrial commodities. that's up 19%. >> you see the rollover in proteins and greens, and we're seeing some wage price pressure because we have technology at work. >> we have to see what the pace of the economy is, and i think fwheed to keep the steady hand and not rush to judgment. barbara. >> i was going to come back to something stephanie said about valuation and earnings because, obviously, earnings is what drives the market. i'm not convinced earnings are going to be up significantly next year because i think what the market is appropriating right now and discounting fairly fully is that trump gets everything he wants. when you really look at the republican congress you have the majority leader saying at 77% debt to gdp, that's dangerous. he wants any tax cuts to be
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revenue-neutral. plus, we do have gridlock. that wasn't just democrats against republicans. i mean, you saw what happened to john boehner last year resigning as speaker of the house because of the difficulty that he had in dealing with the republican faction. i'm not at all convinced that a lot of this is going to go through. >> maybe some of us have pricing power, and as the economy actually does recover, i think it will add even more pricing power, and they're very efficient, and i think margins actually stay pretty elevated. i don't think they roll over, and then i think you have this better gdp. not growing 4%. i'll take 3% on a sustainable basis. you'll get top line growth. you'll get operating leverage. it's not going to be in every industry. it will be in certain industries. >> are you inclined to buy into this market? >> yes, sir. if we were on the trading floor, judge, whenever you hit a big number like this, 20 thousands, which we haven't hit yet, but you would have everybody throwing up trading cars in the air and screaming and then -- and selling at the same time.
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i like the fact that interest rates went up as much as they did. you started the show saying is the market ahead of itself? that's the market's job is to be ahead of itself. we can't trade what is today because then we're not looking out into the future at what might be. we can be disappointed by what might be. i don't think we will be. i think i'm agreeing -- >> there's one thing getting ahead of itself. there's one thing getting out of control. your foot can't get off the ped pedal. >> i think overall the market is going to price in most of what they believe right now that we're going to get in 2017 and like i say, barbara, i'm disagreeing with you because i think that mr. trump by both the force of his personality and by the threat of his tweets is going to get what he wants out of the congress because he has the direct mouth piece to the public.
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>> do you think anyone is worried about the magnitude that -- the speed at which 20,000 may be a number to most people. it has a little more umpf to it considering the speed in which we've gotten to 20 since the trump election. >> you know, the chafir, janet yellen, has said sthees e she's worried about building a bubble. to me that's what i -- i love janet. to me the testimony she gave at the last congressional hearing was what i call the homer simpson doh moment. yeah. i mean, that's where we've been. i think this is the tug-of-war that we're seeing. rising rates. we'll see if the ten-year stops where it is. that's an important bench mark. five-year has come up even faster. how you can have that and rising stock prices comes back to your point, which is top line growth. we haven't had great top line growth. >> can i ask you? we talk about the press
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conference. with seems as though president-elect trump has spoken to really everyone. kanye west yesterday. the federal reserve is going into a press conference. do we believe that possibly whether it's secretary of treasury-elect or president-elect trump that they've had contact with janet yellin in approximate the federal reserve? >> i would have no idea. i this i in terms of responding to a press conference or whatever, i would caution president-elect trump particularly the secretary treasury -- you really don't want to scare people. you are going to do it by saying we're going to politicize the fed. there's no need to do this right now. chair yellin is in place until february 2018. i think it would be frightening for the markets if you did see political interference and attacking the fed, and also remember, this is a president-elect that chided the fed for keeping rates too low for too long and creating bubbles. this is a move that's totally
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discounted. >> is there any risk in a tweet following the decision depending maybe on whatever the language is? how would you folks in the room be dealing with that? >> i think you just read it. you let it roll off your back. again, this is -- you have to remember, these are people whether you are a hawk or a dove or wherever you are, doing their ernest best just to get it right, and it's also a group of hyper-academic people theoretically driven by lots of models and lots of training, and they live in a different world. i don't think you do have your best when we're there. you check your politics at the door. i was a democrat once. i haven't been for over 12 years. you never talk about these things at the table. >> you think the chair will serve out her full term? >> i hope so. what if she doesn't? >> well, then there will be a new one. >> i know, about ut what happens to the stock market. >> then this guy will be -- >> we're in trouble. >> do you think -- i'm serious. do you think the market is ready for upheaval at the highest
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levels of the fed either through the chair herself or through vice-chair fisher? >> look, the president-elect has two immediate seats to fill. then i think leo brainerd who was quite partisan giving money to hillary clinton should go, will go. i think another person will go early will be dan terillo, and there are four seats that you can put in there, and two immediately that could have counter voices. they have only one known republican on the board of governors, and that's jay powell. my belief is he should be kept. he wants to stay, i think, and so you're going to be able to influence monetary policy just by putting the right people or his people on the board of governors without attacking the institution. that's my point. once you start attacking the institution, i think you make people very nervous. >> what if one vice-chair fisher ask was replaced by another vice-chair fisher. tloo finally they would have one who spells his name correctly.
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>> do you have any interest? >> i've done my duty. >> okay. >> i'm really promoting these two guys. >> have you seen their commercials? they're doing a good job of doing that themselves. >> it's all about promotion. you know how it is. >> you got to put it out there. >> twitter, facebook. you name it. >> i have kevin o'leary on the phone with us as well, and he is actually joining us today from geneva. kevin, interesting to talk to you today. certainly on what's ahead later this afternoon. we're watching the market creep towards 20,000. you've heard from former president fisher here. what are your thoughts? >> i come here this time of year to try and understand what's going to happen with sovereign money. geneva and zurich manages billions, hundreds of billions of sovereign capital, and most of it's not in the u.s. anymore. ever since the troubles of the florida attorney's general against ubs, they've shunned our money, and they're now servicing the gulf and asian and chinese
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capital by the hundreds of billions. they don't publically search. they don't talk to many people. over the years i've got to know a few of them in both zurich and geneva, and if i plied them with enough -- they tell me the two things i want to know. one is what are the allocations going to be for 2017 in sector and geography because they can invest anywhere, and they also play currency. we like to think of the strength of our u.s. dollar, but the swiss franc has done much better than it has, and even though they get penalized as much as 50 basis points for having cash, this is what really struck me. they have now raised going into the end of the year up to 33% cash, extracting a lot of it out of our u.s. equities. it really blew me away. i have never seen that much cash on the sidelines before, and i asked him why specifically. it is anecdotal, but it is a lot of money. they are not as optimistic as we are about the trump factor.
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they don't think the earnings are going to show up as euphorically as we do, but we're closer to it. sitting in new york or boston, you just feel the immense positive vibe. they're sitting in zurich and geneva and looking at the world a different way. the other thing that they're concerned about is if the fed were not to raise, which i said was impossible. 25 bips is baked in, as mr. fisher pointed out, they would consider that an extremely negative, and they wanted to buffer for that. there are some that believe that things can tougher than we think. the other area that's really interesting that they asked me a lot about because i've never really focused on this, they're ready to put a ton of money to work in debt, in the energy space in america. particularly around the bonds that were issued that are coming up in 2017 and 2018, around all the shale debt because they now feel as we do that this is going to be a very interesting space. they actually think the short-term debt will do better
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than the equities, which is amazing. there's going to be a lot of cash sitting around to refinance shale plays in the u.s. if the regulatory environment gets lifted as trump suggests. particularly with that signal of secretary of state being an oil guy. they love that a lot. to have this much money go to cash, i have to circle back do that, has made me change a few -- a few ways i'm thinking about going into year end. i'm kind of joining them a little bit. when this much money goes to cash, it just doesn't feel right. you got to be here. you know, we are so steeped in our own economy. you got to be here. they look at the world, and they just look at it differently. that's my message from geneva. >> did i hear this right? a little birdie told me that you met with president-elect trump yesterday. is that correct? >> no comment. no comment. >> no comment. from you? >> there's a first time for
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everything. >> apparently so. >> seriously? no comment? >> i'll be coming home soon. i'll be coming home soon. i've had enough of switzerland. it's a beautiful place, but, boy, these guys are tough, i have to tell you. >> if you're are not going to comment today, hopefully you will soon. do you talk at all about the stock market though? >> yeah. they are in the camp of pe's are higher than we think. they just don't buy the earnings for next year. they just don't buy it. >> i'm talking about you and the president-elect. now you're trying to deflect again. >> you can't nail me on that. >> i can only try so often. >> not the trump -- >> my first meeting was yesterday in geneva, and i had time and i left that meeting not feeling as good as i went into it. you know, it's all -- our
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perceptions about the animal spirits have returned, particularly into mr. fisher's comments about the russell 2,000. he is absolutely right. that's not based on new cash flow for next year. it's based on optimism, and that's the position a swiss sovereign manager has when he goes to his model and says what is this? why should i pay 20% more for all the sectors in the 2000s just because of one election cycle when we know it takes years to implement all of this optimism? that's the difference they have in the view of what's going to happen in north america. you know, it's a funny thing that some of it -- when you make decisions about portfolios, it's happened to me yesterday, i needed someone from outside of boston and new york to tell me that, and that just -- i said to myself, what's my down side? i'm taking tremendous up side off the table. i've made my money. maybe he is right. if it it's a reason we didn't hit 20,000, i think the guys
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over here are pulling the sell trigger every day. that's what's happening. >> i appreciate it. enjoy geneva. we'll see you back here soop. >> take care. bye-bye. >> kevin o'leary with us. >> you want to leave us with a sort of parting -- >> it's very swiss. it's usually their opinion. also, remember the basic rule. whenever anybody wants to buy something, you don't want it. when everybody wants out, that's when you want to go. right now we have enormous amount of optimism. >> here, maybe in europe, you know, i would be a little more pessimistic too about the view only because you have a president-elect who has made it quite clear that he is going to focus most certainly and especially on what's happening here in the united states. >> and making this an attractive place to invest. one last thing before i leave. so i talk about the rise in our ten-year rates and our -- it's happened across europe, except for in switzerland, and maybe denmark. >> let me ask -- >> the ten-year germans in positive territory. >> jeffrey gundlach, i forgot to
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ask you earlier, he said we're getting to the point where further rises in treasury certainly above 3% would start to have a real impact on market liquidity, in corporate bonds, and junk bonds. talked about how getting over 3% in the ten-year would bring a full end of the bond bull market. some believe it's already over. what do you think? >> i think it bottomed after 500 years. the question is how far it raises. you talked about the shale debt. look at the real estate market. we have $800 billion in debt coming due in the real estate sector next year. i'll be interested to see how that's financed. >> i know you got to get to the airport. it's good having you here. >> richard fisher. >> thank you. >> here's what else is coming up on "the halftime report." >> a very bullish call of the day. why one analyst thinks a certain oil stock could rally triple digits. plus, live from the cowan trading floor, we'll speak with chairman and wall street veteran peter cowan about trump, rates,
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and dow at 20,000. that ahead on "the halftime report" with scott wapner. ♪ ♪ well, if you want to sing out, sing out ♪ ♪ and if you want to be free, be free ♪ ♪ 'cause there's a million things to be ♪ ♪ you know that there are ♪ and if you want to be me, be me ♪ ♪ and if you want to be you, be you ♪ ♪ 'cause there's a million things to do ♪ ♪ you know that there are ♪
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tadirectv now. stream all your entertainment! anywhere! anytime! can we lose the 'all'. there's no cbs and we don't have a ton of sports. anywhere, any... let's lose the 'anywhere, anytime' too. you can't download on-the-go, there's no dvr, yada yada yada. stream some stuff! somewhere! sometimes! you totally nailed that buddy. simple. don't let directv now limit your entertainment. only xfinity gives you more to stream to any screen. >> welcome back to "the halftime report". >> the general services administration in washington d.c. is talking about the new trump international hotel on pennsylvania avenue. early this morning democrats on capitol hill publicized a letter in which they said the gsa had told them that "mr. trump will
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be in breach of the lease agreement on that hotel at the moment he takes office on january 20th, 2017, unless he fully divests himself of all financial interests in the lease for the washington d.c. deal." now, the gsa itself has put out its own statement separate from the democrats on capitol hill taking issue, it would appear, with what the democrats said earlier. their statement says gsa does not have a position that the lease requires the president-elect to divest its financial interests. we can make no definitive statement about what would constitute a breach of the agreement and to do so now would be premature. in fact, no determination regarding the old post office can be completed until the full circumstances surrounding the president-elect's business arrangements have been finalized and he assumes office. scott, the mystery here continues about whether or not donald trump will continue to be allowed to own that hotel on pennsylvania avenue. obviously, a prime piece of real estate, but some real questions here about the ownership status of it. >> amman javers, thanks, from
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washington d.c. it is marathon falling just slightly today, though, despite a really bullish call from argas which upgraded it to i abuy saying the company will benefit from higher oil prices. guys, you want to talk about a price target bump. right? the stock is worth, what, 18, something like that? they say it's $52. >> the stock has already made a dramatic recovery so far year-to-date, and the problem in talking about this is the fixation becomes on the price target of 52, and the reality should be let's talk about the fundamentals of this company, which are improving, which are recovering. you are seeing rigs beginning to rise once again. they have a strong presence in eagle ford, in the bachen. forget about 52 okay, if it gets to 52, and you hold on, congratulations. >> it's the name that has -- >> exactly. >> people will be happy if the stock gets back into the 20s. >> so you buy it or keep it where it was? >> if you think oil prices are going higher, this one is one of the most levered to oil prices.
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if you think that oil is going to $70, $80, whatever it is, then do definitely buy it, and you have this restructuring story as well with marathon in that they've gotten rid of some of their high cost assets, and they actually make money at 51. >> they said they've gotten rid of some of the high cost, lower producing non-core assets in favor of higher margin, higher producing north american unconventional oil, gas, and liquids. >> that's -- that's hydraulic fracturing. >> you like this name? >> yeah. the only thing i don't really like about what they're doing, and i don't think they're expanding this, this is one of those areas i believe that they were shedding -- you were talking about, steph, and that's the tar sands. i mean, that's -- that's a place you just don't want to go. fractu fracking and without the same damage to the land that we're seeing over with oil sands. >> we had all kinds of option
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activity. they were buying the december 18 calls. those went from 30 cents and 80 cents and then get out and taking another look. when you sent me this report, hey, we're going to be talking about marathon, i looked at the 52, i actually checked with the producers and said, hey, look, you need to make sure this this is marathon petroleum or marathon oil. they turned out to be oil. i'm still shocked. i think the $52 number, when you look at where the stock was to where it is now, i understand what you are talking about, but you're leveraging yourself, but if you believe what i believe, oil is in the range, it's in the upper end of the most recent range, inless it bursts through, this stock is going to pull right back down. >> do you own some of these names? >> i don't own oil. >> nothing in the energy space at all? >> nope. no. >> she knows what she knows, man. she knows her thing. >> no. i think it's an aggressive price target given that it assumes oil prices continue to go higher, and, of course, supply will turn on, which will have its own reaction. >> sue herrera now has the latest headlines for us.
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hey, sue. >> i sure do, scott. here's what's happening. syrian president bashar al assad says western countries are seeking a cease-fire in aleppo to keep the terrorists and save them. this is the cease-fire to allow the citizens to leave the city collapsed. he made the comments on russian television. apple's stand-alone support app has hit apple stores. it lets apple users access product documentation as well as schedule appointments, chat, e-mail, or schedule calls with an apple support technician. amazon says it's made its first prime air drone delivery. this cams with a private customer trial in the u.k. the service promises to get packages up to five pounds to consumers in 30 minutes or less. and a few dozen israeli lawmakers and their assistants protesting outside the parliament building after female staffers were denied entry for wearing skirts that were deemed too short. one male lawmaker protested by
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taking off his shirt as the protesters cheered him on. that's the news update at this hour. scott, back to you. >> all right, sue wrer thank , much. wells fargo is in the hot seat again as regulators impose new restriction on that bank. the trade is ahead in the blitz. why a holiday package may not make it to your front door on time. halftime report back in two. my business was built with passion... but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet?
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back on the half. the dow slightly negative this hour. still, though, within striking distance. 20,000. there it is. 19,901. is the rally, the trump rally, sustainable? seema joining us from new york city with cowan group chairman and ceo peter cohen. hey, see mr. ma. >> hey, scott. i can tell you that anticipation is building ahead of the fed statement. traders here are really ready to dissect every word of chair janet yellen, and it is a day like this where it's great to get the insight from an industry veteran. someone with more than 40 years of experience in the world of
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finance. we're talking about the chairman and ceo of cowan group, we have peter cohen. your first interview in over four years, peter. >> yep, it is. >> tell us, you have seen dow 10,000, 15,000. what does dow 20,000 mean to you? >> dow 20,000 is really no more thanc compounding of the dow since i started in this business 48 years ago. it was like 786 in 1968. if you compound it at 7% for 48 years, guess what, you get to 20,000. the historical return on equities has been 9% for the last 100 years, so in effect, we're a little behind. you know, 20,000, it's an interesting number. you know, it's not so unusual. >> some of the words that are being thrown out, peter, irrationale exuberance, euphoria. i spoke to mark about new capital. he said the market is experiencing a sugar high. how would you characterize the
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market right now? >> i think the market is experiencing a sense of renewed spirit in the country and optimism as a byproduct of the election. that's what i think it's doing. >> you p, and the dow is not really reflective of the market. it's the s&p that we should, you know, really be focussing on most of the time. >> in terms of president-elect trump's pro-business policies, which one do you think will be the biggest catalyst for wall street? is it tax reform or deregulation? >> oh, i don't think any one of them is going to sort of override the other. i think it's going to be a combination of all of them. tax reform is terribly important. infrastructure building is very important. it's not clear from the standpoint of financial deregulation what that means yet and who is affected by it, so i think people are reading a little bit too much into that. especially with respect to the i would say the big money center banks because, you know, you still have people who are very
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concerned about systemic risk and those banks have done nothing but gotten bigger since the financial crisis. >> back to politics, though. trump is not appointing your conventional picks, your politicians to his cabinet. we have rex tillerson, gary cohen, steve minutian. is it good or bad for the country? >> i think it's great for the country. i think these are people that have operated in the real world. hired, fired, have met payrolls and make investment decision. you know, after all, what is the united states but really a giant business with giant social responsibilities and giant military responsibilities, but having people who have lived in the real world and not been professional politicians their whole lives, i think, it's a great plus for the country, and i really applaud what donald is doing. >> interesting way of getting business done. he has taken a personal interest in getting involved in some individual companies. carrier, boeing. what are your thoughts on that? >> well, if people would study history a little bit more, they would understand that it's not unusual and not inconsistent
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with past presidents. lyndon johnson imposed a tariff on pickup trucks from japan, which basically eventually forced the japanese to come over here and manufacture their cars in the u.s. you can go back to when wilson in world war i nationalized half of the united states during the war effort, where wage and price controls that nixon put in. we have business intervention from past presidents galore. >> you are right. the history gives us a lot of context to work with. peter, thank you for your time. we appreciate you joining us here on cnbc. guys, we will have more from the trading floor of cow skpen co. we'll be speaking to the president coming up on "power lunch. "four now, scott. back to you. >> seema, thanks so much. thank you for joining us on the halftime report today. we do have a news alert now. let's head over to dom. what do you have for us? >> earlier this morning we told you about some headlines about the department of justice looking to possibly file charges in a generic drug price fixing
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scheme. we have details of those charges coming from the department of justice. it involves a smaller pharmaceutical company called heritage pharmaceuticals and two former executives. the justice department press release says that these two former senior generic pharmaceutical executives, jeffrey glazer, and also a jason mali were charged for their roles in conspiracies to allegedly fix prices, rig bids, and allocate certain generic drulgz. that's what was announced today. they also talk about this idea and dow jones is reporting that poenl plea bargains with these executives could come soon as far as a source familiar. these are the first in an ongoing justice department probe overall for generic drugs, but still, some company -- a company, some names to put forward. these allegations now being spelled out by the justice department. we'll bring you more details as we know more, but that's what those headlines initially were about. scott, back to you. >> dom, thank you so much. speaking of health care, up next, a accorda therapeutic
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shares dropping. seeing a nice jump since the election. up 15% since then. now a look at the sector under a president trump. we're back after this. ♪ 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?
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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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>> two big events converging in the next few hours. could make it a wild ride. everybody expecting it is fed to raise rates. could they go half a percent? what if they don't raise rates at all? bill brooks, scott, and scott of pimco all are here to help. plus, higher bond yields. plus, thoughts of less regulation. banks stocks on a tear. we have your playbook ahead. and tech meets trump. silicon valley's top ceos heading to trump tower for a major summit. halftime report is coming back right after this.
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what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? 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
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>> we are back on "the halftime report." pharma companies back in the spotlight after president-elect donald trump told time magazine that he is going to bring down drug prices. well, for more on how health care leaders will navigate the trump administration, let's bring in meg terrell who is with ron cohen. he is the ceo of acorda therapeutics. hi, meg. >> hi, scott. dr. cohen, thank you for joining us. >> my pleasure, meg. >> we're here in washington d.c., and, of course, the question for the whole pharmaceutical industry right now is how do you respond to those comments that trump made in time magazine saying i don't like what's happening to drug prices, and i'm here to bring them down? >> you know, it's no secret that almost nobody likes what's happening with drug prices. there are surveys showing that
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77 percent of american people are concerned about access to drug prices. it's a complicated situation. with respect to the president-elect, our industry is going to work with him in his administration, and try to come up with reasonable ways of handling this, and i think the good news is that while this has been in the media a great deal, there has been a lot of progress behind the scenes. we are already seeing that ims came out with a report showing that last year net drug pric prices -- they predict there will be lower pricing increase. mchissen just came out. they're a big distributor of drugs. they came out and saying they had a much lower quarter because prices have not gone up as much as they expected they would. we're already beginning to see moderation there. i think the main issue for us is figuring out how best to collaborate among all the players in the system.
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that means the insurance companies, the drug companies, the pbm's to come up with market based solutions that are going to make these drugs accessible to people. i think we're making progress already in that regard. >> when you have this kind of "tweet risk" with the president like this, who does tweet a lot about different industries, you see some companies coming out and proactively having a social contract like allergan has by saying we pledge not to raise prices more than 10% a year. does the industry need to do this to get out ahead of this? >> i think what brett saunders was praise-worth why i. they put out statements saying what they stand for, which is primarily to deliver really important therapies to patients who need them, and how they were going to go about that in a way that made access much better. i think that's a great example for our industry. at heart we are a patient-focused industry. our way of getting ahead of this
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should be that we work as hard as possible to insure that every patient who needs one of our innovative drugs is able to get it, and as i said, that's already happening. you're seeing rg for example, express scripps, the big pbm, just entered into an agreement with novartis on a fabulous new drug for heart failure. studies show that an increased life span by one to two years average, which is phenomenal for people with a deadly disease. it's a value based contract. novartis has to show that the patients really are benefitting the way they're supposed to over time or express scripts gets money back. those are the kinds of arrangements we really need to see much more as we go forward so that society is paying not just for a medicine, but for the value that the medicine is giving. >>ing we'llville to leave it there for now. thank you very much. back over to you. >> you own allergan.
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we don't own accorda. what's your take on the conversation around this issue, whether you think these stocks can go in the trump administration? >> well, i think the uncertainty started with hillary's tweet last fall. >> for certain. >> there was some relief when trump was elected. then when he had his comments, they're under pressure again. i think a lot of health care stocks are not overvalued. i think there's interesting opportunities. the question is wiinvestors wai for clarity or not? >> they look to be values across the whole space. it's just if you are getting in front of the potentially more falling knives so to speak that people are a little hesitant to get in because of any sort of political rhetoric that takes these stocks back down. >> i think that you really have to be selective in your stock picking because there are names that are not as dependent on pricing as others. for instance, allergan is a name that i own and continue to own, but it's down 40% year-to-date, and that's because it was just
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valeant that was dependent on pricing. it is not as dependent on pricing. names like that. they can be very selective in terms of the risk-reward. zroo just less than 100 points away from a dow 20,000. we are watching the markets as . and news conference later on this afternoon. there is the dow. 19,907. s&p 500 is basically flat. nasdaq as well. waiting on the fed. lots more "halftime report" just ahead. alpha seems more elusive today. is it because so many go after it the same way? chasing after short term returns. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim. the global investment management businesses of prudential
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welcome back to "the halftime report." i'm jackie deangelis with the futures now traders. we're watching crude oil under $52 a barrel, some mixed data from the api last night, the department of energy today. bob, what do you make of today's move in crude? >> today's report to me didn't seem like a bullish report when you break it all down, which question don't have time to do here. i think some people i talked to are starting to say we're paying too much attention to supply and not enough to demand. even if the opec and nonopec members cut the 1.7 million barrels a day that they're saying they will, demand is likely to fall. we need to see a kickup in demand, more than the iea is anticipating. china has been building up strategic reserves. people i talked to say they're almost done. that could take 500 k out of 2017, in terms of barrels per day. we need a kickup in demand to
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maintain the prices, otherwise we're falling again. >> jim, what levels are you watching and have we run out of steam with this rally here? >> the fact that we hit those highs on sunday night into monday and rejected them so soundly, to me means we're at risk of falling back into the range. i think if it settles below, i'm looking at the fed contract, fed settles below 52.50, we head lower to 45. the whole time i said, unless that fed contract can settle above 54, i'll consider this a false breakout and so far that's the way it is playing out. fundamental side to back that up is that i don't believe in the production cuts, and there is a lot of oil. >> all right, for more futures now, head to the website at futures catch us live there every tuesday and thursday, 1:00 p.m. eastern time. "halftime report" is back after the break. this is where i trade andrs. manage my portfolio.
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welcome back to "the halftime report." let's do some unusual activity before we run for the i do. doc, you first. key corp. >> jpmorgan took the targ fret 1550 to $21. today we see big money flowing into the 18 calls that expire this friday. bought it this morning when it was below 18. pushed just above there now. i'll probably hold this for 24 to 48 hours. >> all right. and, pete -- >> i'm in a scary sector.
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i've been staying away from -- gilead, some monstrous buying going on in gilead, interesting, the may 85 calls, over 5,000 of these things trading, a little over $2. that's a big trade, folks. somebody looking for this to finallymake make a turn to the upside. something i'm keeping an eye on, not only did i buy stock, i bought calls as well. >> and steph, wanted to get to you on deutsche bank. >> a new position, actually. it is starting small because it is -- has a lot of beta to it. massively underperformed the u.s. banks. i'm very overweight. on the margin, i have been trimming sun trust because it traded close to two times tangible. deutsche bank, .4 times book. >> for a reason. >> for sure. they have a restructuring plan. a lot they can do to fix. so that i think whether you get the settle, they do more asset sales, whether they do a secondary, i want to be involved
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especially since i feel better about europe and the valuations and the u.s. names which are picked over at this point. >> what do you think of this buy? >> i like the deutsche bank. there has been many that have speculated given president-elect trump's relationship with deutsche bank that that could be favorable looking forward and the possibility is that, yes, that could be the case, but i like that play. this has been one of the key points of concern in the european banking -- >> i think it is a smart buy right now. because europe is healing. it is a great bank. and it had its issues but in the stock and they have got a plan to get out of it. and there is -- >> the settlement is the big issue. >> right. >> you have final trades today? >> i think there was a nice note out from oppenheimer today on acquisition. don't forget about adobe. that's a name you own for that. >> steph, final? >> media.
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disney, cbs, comcast, new highs, i like that group. >> doc? >> clf, bought that one today, judge, unusual. >> steel, cliffs, new corp., u.s. steel, aks, all of them. >> appreciate your time today, barbara. >> all righty. >> barbara doran joining us. "power" starts right now. the countdowns are on. plural. first, bracing for a rate hike. the fed's latest decision set to drop in one hour from now. that's followed by janet yellen's news conference. then, trump's text summit. ceos coming to trump tower to meet the president-elect. plus, waiting for dow 20,000. will the fed rate hike push stocks to new highs. ticktock, ticktock. "power lunch" starts right now. ♪ the best song. the clock on the march, tak


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