tv Fast Money CNBC December 30, 2016 5:00pm-5:31pm EST
yet but i think it would be a fun companion to run. >> sure. >> that dose it for us on "closing bell." thanks for tuning in. happy new year. we will see you in 2017 and "fast money" begins next. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square on new year's eve eve. look at that beauty, that is a shot of the times square ball earlier today getting ready for the big night. traders on the desk, tim see more, heather zumaraga and brian kelly. it has been a banner year, the dow up 14%, s&p up 10%, the nasdaq up 8%. of course a lot of the gains have come in since the election of donald trump, and despite the markets falling 1% this week america is ending the year a lot richer. the s&p adding an impressive $1.5 trillion in market cap in 2016. and it was a tale of two sectors
here, energy leading a way up 24% as oil climbed higher. meantime healthcare sat out the rally, the only sector in the red, down 4%. the question is simple, what do you do in 2017? tim see more, what do you think? >> there's no way you change what you were doing overnight because the calendar changes. if we look at energy, i think oil will out perform. i think we get to things working preelection, some of those things also should continue. assets are moving, asut prices moving higher, we know equities moving higher. other parts of the asset chain will move higher. if we are talking about what i believe will be 2017, first of all i think the market has gotten overly complacent for the risk out there from the feds. i think volatility will not be your friend for the last six years. it is up 45% in the last week, but volume will be a big part. more said, more volatility. i mentioned oil. i think oil prices ultimate reply, the fact opec and non-opec on the same page not
only for non-economic reasons, but i think there's politics they cannot deny. i think the market is already in balance. i think funny financials, despite whatever you want to think about the dollar and whether this economy is getting ahead of itself for in fact bond markets and the dollar will choke off this economy, it is good for financials. deregulation, expectation of that, that's the one part of this presidential trade that i actually think can live out in -- >> it is good for financials. >> until anything happens. >> but they've had a tremendous run already. i think that deregulation is going to take some time to play out, as they're going to buy the rumor and sell the news in the sense that, hey, the financials have had a tremendous run. >> the market overall we have relatively stretched valuations except in financials. financials are trading what, one times tangible book value, that's all good. there are plenty of other places. one thing i want to push back positive a little bit here, there are reasons why the change of the calendar could actually have some action. you know -- >> tax. >> taxes certainly. >> tax, fair. >> a lot of people on vacation,
a lot of people that would be making decisions. >> not us, clearly. >> clear, we're back here minding the desk. >> we're having good times tonight. >> if you have winners on the sheets, there's a decent chance you're going to wear them on your sheets until the end of the year and potentially look to take those lower capital -- >> but is it enough to change the dynamics of the market? i get there's tax selling. maybe it is a linchpin to other things, but i don't change my view of the world. >> the reality -- the reality of things actually happening, i mean next yeek john mccain is going to hold hearings into the russia cyberattack response. there will be the confirmation hearing of rex tillerson on the 19th before the inauguration and the inauguration happens on the 20th. things get real fast. >> if you subscribe to rumors, the inauguration itself could be the catalyst for us to see selling. a lot of names were over bought no matter how you slice it, even if trump was able to do everything he wanted to, think caterpillar is an example of one of those. this thing is trading 15% off
its peak valuations, even though revenues are down 40%. there's no infrastructure build, folks, that is going to get this thing back to where it was. you are talking about a commodities super cycle to do that. i don't see trump bringing that. >> even a trillion dollars. >> yeah, so i mean the other thing in the next calendar year is we're talking about a change in policy. for me the biggest change in policy that could come out there is a strong dollar type of policy. and given the dynamics around the world with a shortage of dollars and the dollar being the new vix, that to me is the biggest thing investors need to watch in 2017. the stronger the dollar gets the more unstable the global economy becomes. as long as we have a stable dollar i think you don't change your game plan whatsoever. i like energy like tim, i think it can go higher. financials i would wait for the pullback and see how it bounces around in the first couple of weeks. but if we get a very strong dollar, then for me all bets are off. >> you say the trump trade is over. what do you mean by that? >> i think that the trump trade
enthusiasm may have run out of steam. you know, we've had a tremendous run of 14% on the dow, 10% on the s&p this year, and you mentioned the inauguration, mike. i think regardless -- i know who is in office, regardless if republicans or democrats, whenever history shows there's an inauguration in january or february the markets usually sell off around that time because they've been bid up perhaps before that. and, again, in 2016 last year in january and february the markets were a bit weak and it had nothing to do with the inauguration. >> well, the numbers if you look at the charts, i mean a lot of things have given back the trump rally. look at autos and airlines. ford is right back to where it was on the day of elections. in fact those are places over the last couple of days, to me i've been trying to fade some of this industrial strength. mike talked about cater pillar, there's a lot of places, brian is talking about the strong dollar and the head winds that will bring, that makes sense to me. until we get gdp at 4 plus%, we
don't have it at 4 plus percent. >> brian's part about the strong dollar, take a look, 10 and 30 year rates are not far removed from where we began this year going into this one and we have higher inflation and higher growth prospects. low rates have basically suppressed volatility. it is one of the things that kept vicks so low. the corollary is if inflation is ridesing volatility is rising. >> nobody mentioned earnings. we are going to enter an earnings period, right? they might actually start talking about the impact of -- >> doesn't matter. >> -- a stronger dollar in the fourth quarter. >> i think when we're talking financials, the earnings in the financials will be interesting, right? because you had the strong trading environment so everybody is expecting that will be good. but at the same time the bond portfolios of a lot of the banks have taken decent hits on these things, at least the ones available for sale. that could be something as we watch the financials that could be kind of the onion in the ointment here that skews everything. >> onion in the oint snnt i thought flies were in ointment.
>> onions go in the ointment. >> okay. >> you know, i think financials are one of the places where actually the earnings will be extraordinary. i think in the energy sector, the bar year over year for the first quarter or for the fourth quarter and coming into the first quarter, their expectations is unbelievably low. i hear you, dollar head winds interesting, and why not if you're a ceo? why not use it as an excuse? but we've been talking about earnings as a head wind for the market for seven or eight quarters, and the fact of the matter is if anything confidence has inspired companies to move forward. we have seen inventories turnover, growth in the fourth quarter will have been better, especially looking at the momentum from the third quarter. i think earnings are a benefit to this market and will give a lot of companies a reason to withstand -- >> a lot of expectations, right? we're looking from 12 to 20% earnings growth next year. we're looking at what the market priced in as 6% gdp. that's pretty aggressive. there's a lot of expectations out there. >> u.s. and russia tensions are
heating ups after comments from vladimir putin and donald trump after the u.s. announced new sanctions on russia. john hor oowitz in d.w. with th latest. >> happy new year to all of you. may 2017 be a time when all of you keep the onion out of your ointment. that's what i wish for everybody. >> we hope so, too. >> the question is whether or not tensions are rising or are they actually falling, because they're rising if you look at what barack obama did yesterday. the president of the united states imposed sanctions on russia. today you had a couple of the com poundings emptied out, cleared out, but you had the extraordinary development this afternoon of the president-elect trump not only disregarding the tradition of one president at a time by staying out of international disputes, but he actually sided with vladimir putin saying that by not retaliating, by expelling u.s. diplomats that vladimir putin had done a great move. i always knew he was very smart. now, this came as 35 russian
diplomats were leaving the country, as the compound in maryland, centerville, maryland, was shuttered. the compound in long island was shuttered, as in san francisco you had a consular in russia complaining the chef for their new year's party was booted out of the country as a spy. this was a crude, russian attempt to generate sympathy for their situation as vladimir putin did when he invited the children of u.s. diplomats in moscow to party in the kremlin. the challenge for president-elect trump is that many republicans, including john mccain and lindsey graham -- and as you mentioned mccain is having hearings next week -- are not in the same disposition of mind toward vladimir putin as donald trump does. me police melissa, as you indicated at the top the mccain hearings, the tillerson confirmation hearings, those conflicts will get very real very fast for in new
president, and how he tackles that is correct especially after getting the intelligence briefing next week on the conclusions of intelligence officials that putin was in fact behind the hack, that's going to be a very fascinating story to follow. >> yeah, 2017 should be very interesting, amid your onion and ointment remain separate as well, john. happy new year! with these sanctions end the run we have seen in russian socks this year? ambassador, we have to turn to you. you sold some of your russian stocks. what do you do now? >> aets head to the board and i will tell you about the dynamics driving russia. unfortunately or fortunately, i'm not sure it is that much about politics right now. i think sanctions have been something that weighed on the economy. if anything russia has fought through it. this is a five year chart of the ruble. simply, this is when oil is $100 a barrel. this is when oil is $25 a barrel. sanctions are somewhere in here, but ultimately the ruble in a world war oil is recovering starts to look closer to 40. if you weigh russia versus oil
you can see the effect of the rsx and what crude oil does to it. so ultimately what i said is i think russia does very well at 55 to $60, and that's the environment we have and the environment i expect in 2017. ultimately for russian stocks it is a case where i actually think the broadening of the economy, the trickle down of petrol revenues for the economy obviously helped the oil companies this year, but i think it will hit other parts of the space next year, ticker mbt and ticker ynx trade on the new york stock exchange, this is the google of search in russia, these are names, if you look at the two-year charts they're largely flatlined and mobile tele systems are struggling for dynamics particular to the cellular competition. average revenues per user, et cetera, et cetera. it is a stock that will do very well and has done when the economy starts to escalate a little bit, yondex to me is a tech play like so many out
there. i think these guys are obviously suffering from google and at the same time in russia they're protected. >> b.k., what do you think the trade is? would you invest in russia stocks? >> i kind of agree with tim. think russia was mispriced because people believe when oil came down russia was at risk of default. i find the fact -- i don't think vladimir putin is going to default on anything. he is at the top of the game right now. i don't think it is going to happen. you get a mispricing there. the easiest way for the folks at home to play it is via rsx. you need to walk the ruble, but rsx is going to trade with oil. i think oil is going higher, so that's the way to do it. >> right now the oil markets are implying it is going to finish the year around 57 with a range of 43 on the low end to 73 on the high end, is what the options market in the oil market is basically implying right now. we are looking at higher oil prices, that's a higher ruble. i don't think you need to concern yourself with hedging it. >> i think the ruble should be trading 15% to 20% cheaper than it is right now.
i think a couple of people on top of this trade, bank of america has been on top of the trade, looks like it is a trade late in the game. guess what? i think it is one of the cleaner emerging market stories in 2017. >> nike, coca-cola and disney sitting out the huge rally, but could they be setting up for the perfect buying opportunity. the players play one last game of would you rather. plus tesla having worst year on record since going public in 2010. one analyst says 2017 could be its best year. we have details on that call. and did you miss the rally this year? the chart master is here with what he is calling the ultimate catch-up trade. much more "fast money" still ahead. you do all this research
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welcome back to "fast money." it is actually snowing here in times square. >> it is lovely. >> a lovely sight from here. not everybody was a big winner. nike, coca-cola and disney sat out the rally, nike down the most about 18%. do you buy any of these laggers in the new year? this is our last round of would you rather. would you rather rather? three rathers, tim? >> i would rather not play this game again. i'm kidding, i'm kidding. i love this game, and that's why we do it because we get excited about this.
nike, i would rather because first of all it is down 19%. it has underperformed on the s&p this year. you can do the math. the last round of earnings, european and north american sales rekofrpg. the degradation in margins recovering. the channels these guy vibrant soundbridge to continue to dominate to the consumers should give you a sense of solace. i think their manage is one of the best, and i think they will win after falling behind over the last couple of months. >> what about the notion of buying laggers into the new year believing they will revert? >> i like there's a strategy called the dogs of the dow, the ten highest yielding names in the dow jones. i think instead of buying -- some of the laggers do give a high yield, but in terms of this strategy, the dogs of the dow, i think i would stick with those which may -- may be some of the -- i think coke is in there, for example, and that's a better strategy to buy. i want the yield going into 2017
versus just buying. >> yeah. i mean that -- that strategy worked very well. we even look -- we talked at the top of the show energy, right? at the beginning of this year energy looked horrible yet it was the best performer of the year. so you want to look for those type opportunities at this time. >> would you rather rather, mike? i put it through to you now? >> coca-cola would probably be the bottom of my list here and i think disney at the top, nike falls in the middle. nike valuation right now -- and to your point management very good. the fact of the matter is that it isn't quite the oligopoly it once what, the under armours of the world coming in. >> you think it is good? >> it is attractive, trading at a discount to the market. disney is stabilizing. i think the cord cutting on espn side is over. coke is facing secular head winds. they are selling products other than warren buffett people want to buy less and less, and i think that's a product they're going to be facing in 2017. >> my daughter loves mini mouni
mouse. >> and she can't drink coca-cola. >> she is too young. >> tesla in the red, down 20%, the worse year since going public in 2010. but bears saying electric carmaker top pick in 2017, pointing to strong delivery, the tour of the gig ah factory at next week's electronics show. brian kelly? >> yes, i like tesla. i like the call on this. what the street is starting to realize, this is more than a car company. >> what the street is realizing what you have been saying for sometime and that's why you like this? >> that's right. >> yeah. >> there's nothing wrong with that. >> finally figuring it out with the thing valued in mid 30 billions -- >> you can't -- >> about the same size as ford. you can't compare it to an auto company. >> that's what i'm saying. it is similar to a venture capital type investment, right?
they continue to raise money. you have to believe in elon musk. >> that's exactly right. that's the whole thing you're believing in. it is one of the situations where, you know, you are going to see a gig ah factor and people talking about the model three. gm is coming out with the first sub 30,000 dollar electric car. >> what does it matter? >> it will matter plenty. >> all of these problems have been out there and the stock has basically gone side ways. >> look, the market is up 10% this year and this one is down by as much. i think the reason -- >> because of all of the problems. >> at some point, brian, this company has to make money, not burn money. deliveries, you know -- >> i don't know. didn't work for amazon. >> i think competition is the biggest issue. people act like they're anointed to be the only people in the ed land. they are not. and the gig factory -- the reason it is 10%. >> he has batteries coming out, he has everything. >> i have an idea, what if in is just a tactical long immediate term?
the fact of the matter the stock has shown strong signs of life since the beginning of december. it was late to the trump rally but since the beginning of december it has really picked up. to this analyst's point, the tour of the giga factory, people will be bulled up going into the thing. >> we were talking about risk factors going into inauguration? do you want something with a larger margin of safety than this? i think the answer is yes. >> last answer. >> i like the call, i like this analyst even better. >> still ahead, the traders give you the four stocks they say are the best bets for 2017. i'm melissa lee. you're watching "fast money," first in business worldwide. in the meantime, here is what is coming up on "fast." >> and so did the stock market this year. but if you missed it, don't worry. >> oh, yeah. >> the chart master has the one trade you need to make sure you stay ahead of the game in 2017. plus -- >> king of the world! >> that's exactly how energy investors felt this year. and the traders have one stock
with the new year just around the corner we're passing on the champagne, we're toasting 2017 with america's new favorite drink, whiskey. capitalizing on this boom is michter's, they doubled capacity to keep up with growing demand. joining us is the president of the distillery. >> great to be here. >> what accounts for the booming demand? who is drinking it? >> pretty much everybody. it is growing domestically but there's tremendous interest internationally. over a four-year period exports of kentucky whiskey grew almost 100%. there's a lot of growth at home and abroad. >> let's get to this very special box that you brought. >> yes. >> how much does this cost? what is it? >> this is miclter's celebration, a special whiskey we make. last time we released it it was three years ago. it retails for $5,000 a bottle, i've seen it more. >> 5,000. >> i've seen it for $1160 a shot certain places. it is a very rare blend.
our goal here was really to try to prove that great american whiskey could be the equal of the greatest spirits made anywhere else in the world, and out of over 30,000 barrels we select six particular ones that qualified for this. it is a pretty rare blend. perhaps you would like to taste it? >> of course. >> okay. >> it is a beautiful bottle. >> thank you very much. >> have you sold a lot of this for the holiday cincinnati. >> it is very limited. all of our michter's types are allocated whether it is the $48 a bottle stuff or this stuff for $5,000 a bottle. we are releasing this year just 256 bottles for the entire world. >> amazing. thank you. >> you deserve that. >> it is very complex. there's a whole cascade of different flavors going on. >> definite. >> mid palate, wonderful warmth
but no burn. we try to make really good whiskey. >> thank you for sharing this rare treat. good to have you with us. >> thank you, me police ah. >> that does it for us on "fast money." catch us tuesday, 5:00 eastern. have a great and safe new year's eve celebration. cheers. "options action" starts right after this. ♪ e, in all of this, is tthakes areo gh, ur finances, how doouol ts? don't. yopartner with a firthat advisegovernmentss d to perrtun500,and, can n what matters to you. morgantanley.
hey there. live at the nasdaq smarkt site in new york city's times square where thousands will be here to ring in the new year. the guys back there have great predictions for 2017, but first here is what is coming up on the show. ♪ 2016 may be coming to a close, but a comeback is just beginning for one beaten group of stocks. we'll tell you how to play it. plus. >> it's been a great holiday. not so fast, tim. apple shares tanked today on reports of a production cut. will the pain bleed into 2017? we have