tv Fast Money Halftime Report CNBC January 10, 2017 12:00pm-1:01pm EST
uber, and snap. >> they've have done particularly well, at least in terms of gaining users. 000 it's time to see if they can really put those numbers out there that impress potential investors. >> yeah. good day for the nas. record high, trans ports, best day since early december. we will see if this march to 20k can continue. let's get over to wapner and "the half." >> carl, thanks so much. welcome to the "halftime report." our top trade this our, sell goldman. big call from one wall street firm which says the post election run while reasonable has left no margin for error. with us for the hour today joe terranova, jon najarian, testify a stephanie link. happy new year. >> great to be here. >> great to have you back. i want to begin with goldman sachs. it is lower on the day today. it is a drag on the dow. it is off the worst levels though on that citi downgrade.
mario, we talked about the banks on this show almost every day since the election and for good reason, they have soared. what do you think of this particular call that may be the sky's too blue? >> look, the answer is the following. as goldman is a subset of what's going on in the entire ecosystem of stocks. after the election capitalism beat out socialism as a way to -- that's good for people who want to have assets protected under the rule of law. now we're putting back innovation and creativity. goldman is terrific at that. secondly, the notion of the whole notion of fiscal stimulation to augment monetary policy which is slowing down. goldman is going to benefit from that. in addition to that, corporate love making goldman will benefit from that. in addition to that, tax reduction, reg reforms, individual taxes coming lower, corporate taxes coming lower. a lot of little details in
between. i don't see any reason to not think it will do quite will over the next few years. is answer is i bought goldman when it was selling below tangible book and there's an old story on wall street, you buy, you go into a partnership that even though it's a corporate c-form when you buy it below book and i think the number is going to come out whenever they report earnings. i'm not in the citigroup camp. i think their short term traders, that's what their issue is. i don't care about that. >> no one will take issue with anything that you said. >> that's why i said it. i didn't want any issues. >> you're a smart guy. >> i'm a survivor. >> i'll push back a little bit though. everything you layout is perfect sense as to why the financials have ripped. i read the numbersered and i'm going to read them again because they're simply astounding when the gains that you've had from the election day until now. goldman is up 32%. citi is up 21%. morgan stanley, 25.5%. jpmorgan, 23%. b of a, 33%.
xlf in general, etf is up 17%. that's not too much? >> short term, of course there could be market corrections. bern n bernard was asked the same thing in 1900, stocks will fluctuate. what is the value of goldman over the next five to ten years? the fact is american banking system, they call goldman a bank is the investment banks and commercial banks are two different worlds nape will do quite well because they fundamentals are terrific. the underpinnings are great. that's going to be utilized in growing and helping the american economy and helping income equality and do very good things. >> this was the debate yesterday with cramer about whether it's time to take profits in the banks or continue to buy the banks. >> i agree with everything that mario just said. >> except you've got to be nimble. >> goldman sachs at some point will have a $300 print. i firmly believe that. however, we're going to chase a little bit of alpha. that's what we do here.
be a little bit more tactical. so i own goldman sachs the day after the election. i sold goldman sachs. now -- >> you cold? >> sold goldman sachs at 240 last week. sold goldman sack and the question become what's do you do with it? buy what? well, this morning i bought jpmorgan, i bought bank of america. why? earnings become front and center now. those companies report on friday. what i expect is that financials in those companies specifically will take the dow to 20,000, will give president-elect trump on inauguration day a week of price action above 20,000. i think it's going to be very strong price action from friday into his inauguration. and i think it's on the back of earnings we're going to see on friday. jpmorgan, have we ever heard stephanie and i talked about this, have we ever heard jamie dimon sound as optimistic about the economy, about the regulatory environment that he has on these recent conferences?
i think that earnings call, when he talks about the outlook going forward, that drives the stock higher. bank of america, the comps to last year look fantastic. >> if the rising tide is going to rise -- raise all boats, why would you get out of goldman sac sachs? >> you wouldn't. >> tacticals. >> he did. >> tacticals. >> doesn't make any sense. if you're going to downgrade one stock you're going to downgrade the group because they trade in a pack. at any given time one will trade cheecher than tangible than the other. 1.4. okay, fine. bank of america is at 1.2. you want to play that game, fine. but they are all going to trade in lockstep. i would just point out -- >> you're not calling out joe. you're calling out the call. >> i'm calling out the call. not calling out joe. here's the thing. >> sorry. >> hold on. so this group started to rally well before trump. >> i'm calling it out joe. >> that's not my thing. this group started to rally in the summer, in july, when rates bottomed. it was before trump, well before trump. rates started to rally.
the economy started to show a little bit better signs of life. and capital levels had improved dramatically from c car and the last several years. >> when was the dimon bottom? >> the dimon bottom was before that but these stocks really started to take off well before trump. >> your point is well taken because if you look at the numbers, over -- i gave you the numbers from election day. >> right. >> if you go back six months, the numbers are even more astounding. goldman is up 60% in six months. bank of america is up 72%. xlf up 55%. morgan stanley, 63%. >> right. so, yes, that's right. but the valuations are not that stretched. >> helping you make your point. >> thank you. they're not that stretched in my opinion. the economy is going to continue to get a little bit better. rates are going to continue to go higher. then icing on the cake, we'll see what happens with trump policy. and that will get you the next leg up. but i think capital levels are really, really important. and don't forget at the end of
january we're going to get the new rules in place for the next c car and the next capital distribution and that, too, also is very positive to the whoever all sector. >> from my point of view we're focusing on who is going to be the subject of love making. and which -- and what -- what banks in florida, florida, florida, south carolina, south carolina, north carolina, are going to be taken over and elsewhere. and at what multiple of tangible book will they go for? you're going to raise the limits. you're doing to see a lot of that. >> the sometime monday bottom was february 11th. thank you, nick dunn for that. >> it was. >> it was a market. >> kind of a challenging time. it was china and oil. >> that's right. >> but mario was highlighting what we've expected in the regional banks. the lifting of siffy is going to be incredibly important and it's finally going to unlock some of the animal spirits in the regionals to acquire assets.
seeing a little bit like that already in suntrust, regions financial which i have not sold out of and i believe in. i think those names are going to perform incredibly well. >> judge, last week i believe friday of last week ubs took the target on goldman up to 285. $51 increase in their price target. i'm looking for that to happen relatively quickly, judge. i am long bank america, i am long jpmorgan, i am long citigroup. i disagree whole heartedly with the citi call today. i think it's a bad call and we'll see if i'm right. >> not saying that goldman sachs is a piece of garbage. simply saying that all the raise of sunlight that everyone has already mentioned is in the stock. >> it's not. >> that's the point is, it's not in the stock. and when jpmorgan puts up a number like i believe jamie is going to put up, his firm on friday, i think people will be chasing all of these names. i think to joe's point this is what carries the dow of through
20,000 and lifts it well into next week because i think you can see 6% to 10% moves out of that group, bam. >> the variable is what happens with net interest margins and what happens with the yield curve. >> yield curve. >> that's the key. >> the economy has to do better. the economy has to do better. they have to loan more. the fundamentals have to get better. if that's the case, if that happens then you will get a steeper yield curve. i will say this, i did trend wells fargo today because that stock has had a nice run and they have some company sesk issues meaning higher expense, legal expenses to fix some of their issues. and i put it into american express which is a new position for me. but i own all the other names all of these other guys own as well and i'm sticking with it. >> what, mario, do you make of the rally in and of itself since election day? sort of the same story you painted at the top of the show on the banks. >> cfa part one, not two or three. revenues. inflation is going to rise. therefore, gdp of 2.5% would
have a cyclical bounce, will increase a nominal terms. gross margins will be narrowed somewhat because labor costs will start rising. and however sg and a expenses will not rise as much to maintain pre-tax margins. then you have tax rates coming down. we're trying to take america and put it competitive on a global footing. the notion of territorial versus global tax, the notion of corporate tax and off sets on that, and then we have to figure out how you drop individual taxes and then how we level the playing field between a subs and llc, and c corp., that's a different issue. more than what we want to spend on the moment. bottom lines, earnings will rise faster. look at financials, capital investment, the non-u.s. translation, the euro 105.50 today. last year at this time it was 111. the big incremental drag went from 140 to 110. that is still going as a drag but not as much. the pound is a different issue.
trade weighted is a different issue. >> so what i hear you saying is that the election of donald trump extended the lifespan of the bull market. >> no. i think it's totally unrelated to the bull market. >> how is it unrelate snetd. >> it's related to capitalism and the place where rule of law and ownership and innovation will be rewarded and not stepped on. >> got to be careful of my words. not stepped on. and that is that if someone is successful, they're going to say, great, now, let's make more people successful as opposed to beating someone who is successful. >> if companies are feeling better, to your point. >> confidence. >> back. they're going to spend more money. one of the big knocks on the whole market before the election was capital investment is way down, people aren't spending money, are we going to go into a recession? that's what the talk -- now the talk is blue skies ahead. >> there's always some air pockets and speed bumps in the obviousry have geopolitical risks, china again, euro, what did the germans and the french and the italians going to do on
the election on the banks? hey, the world is full of worries. if you don't have that you don't need analysts. >> what multiple do you pay? do you think the multiples will contract? >> in they'rely that's what you expect and if interest rates on 10 go to 3 1/2 and 4, if everything is constant you're going to pay less but everything is not going to be constant because inflation will pick up in nominal returns. companies are pricing power, with pricing power and therefore can inflation index their earnings and never happens in lockstep. that creates opportunities just like in february of last year, brex brexit, 2:30 in the morning in the election day. >> are the prospects -- >> november tth. >> that's a long time ago. >> are the prospects for improved corporate earnings better as a result of the kinds of policies that you've already mentioned? >> i think it's not only a function of earnings but also a
function on the multiple and the headwind obviously will be rising interest rates on the other side of the coin you have inflation expectation in interest rates. will that change? how long will it take to change. so there's a lot of elements. we don't think about big picture like that. we do stock specific. notwithstanding that, i'll give you an answer. i think there's a tradeoff. and the tradeoff is where and what groups will the market buy over the next ten years, if you owned an s&p index you're going to make 6% to 8% higher than the 5% to 7% i would have given you before. as a result of that it's okay. relative to a 3.5%, 4% ten-year, so that's the dynamic that one looks at in terms of allocating capital. >> i like where we're going. but steve liesman has a news alert for. >> thanks very much. president jeff locker announce that he's retiring effective october 2017. lacker joined the board in 2004,
became president of the richmond fed in 2004. he was last a voting member in 2015. known as one of the most hawkish members of the board. he dissented three times in 2015. and from what i can tell he dissented every time, the last time the vote for that in 2012 opposing keeping the rates unchanged as well as quantitative easing. lacker's departure in october is part of a massive transformation it's going to happen to the board and to the federal market committee this year. dennis lockhart, the atlanta fed president stepping down in february and obviously there are two appointments coming from the incoming trump administration as well eventually we believe the replacement of janet yellen as the chair of the federal reserve. that won't happen until 2018 or early 2018. scott? >> all right. steve, interesting news. thank you so much. so back to the conversation, mario, because it's all related. talking about the fed, talking about rates. here's what bill gross had to say today in his letter.
i'd like your reaction to it. he says, if yields move higher than 2.6%, talking about the ten-year note, secular bear bond market has begun, watch the 2.6% level, much more important than dow 20,000, much more important than $60 oil, much more point than dollar euro parody at even. it is key to interest rate levels and perhaps stock price levels in 2017. what do you think? >> i have no point of view. bill is great. he will do what he's doing. i hope the world makes bill great again. he'll get more assets than we own a lot of janus. i'm praying for him. >> how much are you watching interest rates? >> everyone -- we watch a lot of dots, oil, china, the problems in the south, the relationship between the united states, putin, and xi and what's going on in the island, northern territory in japan, what are the tradeoffs, how do people react to the political comments coming on tweeter -- whatever it is.
what is it? >> twitter. >> twitter. god, i'll eventually -- >> we have a tweeter who uses twitter. >> the answer is, this is an interesting world. and stocks will fluctuate. >> back to rates for a second. >> thank you. >> what people are misunderstanding, i don't know if you agree with this or not, rates no t going to spiral out of control. think about where rates have been in the last couple of years. think about pension funds, life insurance companies, think about europe, all-star for yields. do you think if rates go above 26, 3%, they're not going the suppress that move just by coming in and aggressively buying in an environment where they have not seen that type of yield in the last couple of years? pension, life insurance, europe will be all over it. >> there's no question one element on the other side of the coin from inflation point of view, food price are going down. labor is a big portion of the inflation index. and that's the united states. but the sense i have is that most of the world is reflating.
at the same time. and how does that play out? it's interesting. obviously from my point of view when ronald reagan came in and had the air controller strike and volcker was there, interest rates peaked out, i can't remember. i remember buying a ten-year, 14.7, august 1991. now you buy a ten-year at 235, we're at the bottom of a saucer. bill is going to be right but he will change many times between now and then. >> before i go to a break, have you been to trump tower to see the president-elect? >> i saw him at the trump tower -- >> you didn't think i was going to ask you that? >> -- 25 years ago. >> so the answer is yes. >> yes, counselor. >> we have him. >> i'm getting deposed here. i have over 5% because we have to file 13-ds on a company he was controlling and we had a little interesting opening dialogue on the phone.
i went down to see him. everything was okay. after we talked. >> what do you think of the cabinet choices? >> i have no idea. >> come on. what do you mean? >> i just told you. whatever he selects -- >> you're friends with some of these people. >> i'm friends with a lot of people. i like andrew cuomo. i like schumer. i like pelosi. i like everyone on the left, but i will not necessarily support their fill loss is philosophiep. they're all likable. >> we have 40 more minutes. i can continue. >> you can do it. >> dentist now, not a judge. >> listen, we're going to go into cats and dogs before the show is over. >> we are. okay. >> yes. >> look, i brought my woof had. i had it on yesterday morning before this deal was announced. unfortunately you can't participate in mars. it's a sad commentary on investors that they can't buy a piece of mars. >> yeah. they can -- >> not the martians but the company. >> i was thinking more of the
candy. >> they also have dog food. >> mario is sticking around. we'll come back. a lot more "halftime" ahead. the ce okay of valiant live from the jpmorgan health care conference is on deck. let's go see papa's plan to turn this stock around. down 80% in the year. partners at ken's show says 2010, jumps in. of 1.8% in the week after the key jpmorgan health care conference. the health care sector rises 1% in the week after. more "halftime" with scott wapner and the gang coming up.
here's a look at the markets. dow jones industrial average, 19,95. 47 points away, 46 points now from the seemingly elusive dow 20,000, s&p is up nearly 1%. shares of valeant are surging todays that company announces two asset sales totally yearly $2 billion. cnbc's meg terrell is live at the jpmorgan health care conference once again with another exclusive interview with valeant. hey, meg. >> hey, scott. and joe poapa, thanks for joinig us. >> thank you. >> a lot of news from the conference. two big deals. where would you say we stand in the valeant turn around process? >> one of the important things we said is we're going to pay down $5 billion of debt over the
next 18 months. these two asset sales help us tremendously to make progress on that. i was with the chair on of san power yesterday. it's an important step but many thousand more steps to go. so we're excited about this. but importantly we think there's more to get done. >> $2 billion, $2.1 billion pr just these two deal 'if. it's going to be $5 billion over the next three months is it from asset sales? >> combination of asset sales, additional asset sales of our noncore assets plus the operation results of our company. so it's the combination of both of those that we think will get us that $5 billion over the next 18 months. >> okay. and drug pricing of course has been in the news quite a bit. you guys especially even having to appear in front of congress for some price increases the company took historically. just last week on dozens of products, 9% price increases. is that wise now when you're under so much scrutiny? >> i started in may. and one of the first things i
did was put a patient access and pricing committee together. during 2016 our average price increase was lower than the consumer price index. i think it was approximately 2.3%, to be specific. as we looked at 2017 we said let's look at some of the products that we have not raised any of our opt that mall ji or dermatology since 2015. we looked at what was the appropriate range. and we did not raise a lot of other products. i know that some of the products did get picked up but there's also some that we did not raise. one product we took actually a 64% price decrease. so that to me has been part of our view of trying to do what's right out here in the marketplace as we look at pricing. and importantly, look at how we can make our products more accessible for patients. that was patient access and pricing, both components. >> scott? >> joe, thanks for joining us. it's along the lines of what meg was just talking about in terms of these price increases.
david maris put out a note in which he says the following and i quote it and i'd like your reaction to it. on friday, january 6th, valeant implemented 95 different price increases across more than 50 products. in our opinion this is an example of valeant's continued reliance on price as a means of growth. they would also take issue with some of the magnitude of the price increases thatoff made according to a firm called medispan, 76 price increase of 9% and average increase was 89.4%. not the 2 plus percent that you just mentioned with meg. >> yeah, the 2.3% i mentioned was referring to 2016, the calendar year 2016, to be specific. on the question of the pricing that we took, many of those products that we did take this january 6th, we did not talk any price increase in opt mol ji or
the dermatology process during the 2016 time frame. we also had an effective net price decrease on some of the ophthalmology and dermatology rebates and discounts on those prodcuts during 2016. so i think we tried to be balanced on this as we think about it. we also obviously without commenting on the specific analysts we brought price down in terms of what we did with our nitro press. and we put in 2016 a volume based discount program between 10% to 40% on many of our products that were the price did go up. we tried to take a very balanced view towards this as we think about our 2016 and 2017. >> to the notion that he raises and others have certainly raised and i'm sure you've heard it that valeant can't really grow without raising prices on its drugs. how do you respond to that, that this is the key way that valeant sees its growth going forward
now? >> well, i respectfully obviously disagree. i talked a lot about when i first joined the company, what some of the things we see in the pipeline. we have a launch that we are very excited about for a treatment of psoriasis. we also talked about in most of our earnings calls the growth that we see in our gi category. the gi category is up over 10% in terms of prescription growth. so we've got tremendous growth there. we're growing our bausch & lomb business, eye care business. i think respectfully there's fiction out there that some of the analysts have made. and we try to share the facts of what we're actually accomplishing. >> is salex off the table now after the tacada deal didn't go through? >> i would say the following. what we've identified from a core product interest for us is that we believe the gi category, we believe dermatology and the eye care cof bausch & lomb is core for our future.
that's what will build around. stay focused on those cores. you know, as i said previously, if someone came in and made a significant offer for one of those assets, because of our debt situation, we have to listen. but we're not going to make a decision to sell something in the core unless it's a significant ability for us to reduce our debt. we think these two assets that we sold today certainly go along way towards helping us. we also exited our business and sold our business in indonesia. also sold our business in vietnam. we've sold some business in canada. so we're really trying to take the portfolio and focus it on the core assets for the future with we think that's the important steps for was as we think about also paying down debt and more importantly looking at the long-term for this business and doing the right thing for our shareholders, doing the right thing for patients, and clearly doing the right thing for our employees. >> mr. papa, i open you on blige us. meg, real quick. i hope you will both on blige
us. mario is with us today, mr. papa. he has a question for you as well. i think as it relates to the debt load. >> just say your comfort level is a multiple of ebitda. 30 billion minus the two, 28. bring it down to a certain level. what's the multiple level you can do because there's a lot you do at bausch & lomb and still keep control with it. >> so over the long term i would love to get that level of leverage ratio down to 4, 4 1/2 times. it's going to take some time to do that, to be clear. as i said before, we think this is just one important step today. there's many more steps we need to take for the future. 4, 4 1/2 range is where we think the leverage should be. >> all right. i think we got to leave it there. joe papa, thank you for joining us. >> thank you, meg. >> scott, a lot more coming up later in this hour. actually brent saunders is here and will join us in a few minutes. >> looking forward to that. joe papa, thanks so you as pell.
. we are back on the "halftime report" today with legendary investor mario gabelli. let's rap up this valeant thing. you don't own valeant? >> i have a tiny position. if we owned -- we run 40 billion in ek cutities broken down between mutual funds, and if we own $1.7 million it's a lot. 100,000 shares. we're thinking about it. >> are you? because you think there's -- upside there? the risk of the debt -- >> there's some others issues. >> ore hang. >> legacy issues that papa dealt with with regards to legislation. sorting through a lot of things. >> you're thinking about it. >> absolutely. thinking about everything, except even the jinggiants comi back next year. >> clarity if you understand the litigation costs. >> no, that's only one element. okay? no, no. come on. i can do bausch & lomb, i can take that company, let's sigh it's worth $20 billion, add $8
billion, sell a joint venture and buy them out three to five years. there's a lot to be done and still control assets. he's a financial ng near. there's a lot that can be done. >> i agree with that but i don't think you can buy it until you know what he does with bausch & lomb. can he sell it of for $20 billion? >> you can take on a partner. >> why not? >> right? >> there's a lot that can be done. i don't know anything about this company. all i know is financial engineering in a world in which there's a lot of cash and a lot of people that want to do things. look atta cad da did, the japanese are coming in -- >> tacada wanted salex and came back and wanted a bitter price and valeant said see you later. >> starting with that. base budgeting. >> he's blank and he's going to do everything that he can to obviously reduce debts, maintain the power of his franchises. i know absolutely nothing about anything and we've got a team that does health care and i'm going to talk more about body parts later. knees, hips, extremities.
>> isn't it like thighs, hips, knees, and toes, something like that? >> yes. >> is that what it is? >> why do i feel like our whole conversation is like a rid. >> that's toes and knees and toes. not thighs. >> whatever. >> how did the thighs make it in there? >> i don't know. >> heads, shoulders, knees, and toes. >> there you go. >> extremities. >> and media. media. we're all consumers of it. some of us work in it. some of us invest in it. viacom and cbs, apparently now will not be getting together. >> i don't care whether it's economics or governance. either way you have to look through the windshield and say, will bob backish be able to restore viacom and how does he hand the fundamentals of the domestic channels? let me give you metrics. 400 million shares of 15 or 16 billion, $11.5 billion of debt.
reduce debt a little more. what are your options? will you sell that pick? they have wonderful assets around the world. india, england, and then they just paid 300 odd million dollars for an asset in argentina. now you take that and paramount which normally should hern $250 million and they lost a couple million dollars. new production has to be turned around. and if you look at the amount of money that most of the theatrical companies make, the ones around in 1955 this is one of them, i think they will turn it around in two or three years. throw up the pipeline, announce deals and say who is going to finance it. it's a work in progress. i think he's going to do it. >> did you talk to sherry redstone about getting together with cbs and her decision not wanting to do it? >> i did not talk about economics or governance on -- you just had my own theories as you know, our clients are a large holder of the voting stock. we're not a big economic holder of the company but neither is redstone. the big gorilla is capital
research. own low voting stock. clearly that's a work in progress. >> would you have liked to see that deal happen? >> no. >> you were against that? >> i wasn't for it. i'm not against it. i was just saying i would like to see the terms. >> oh, my goodness. >> it's like a riddle. >> if you want to marry me, bring me more than a dozen roses. i don't know what the terms of trade were. how were they -- how would i make wanted? want vie calm to buy cbs but giving that? hey, i don't know. i own a lot of cbs and i own a lot of viacom. i have the same economic value. we pay attention. leslie has done a great job. and there's a new ceo now. he's been in power, what's today's date, january 10th? i bet he's been ceo actually less than 30 days. his name is bob backish. have him on the phone and talk to him. >> why don't you call him and get him in the break. >> i'm not calling anyone for you. >> dial for dollars but not for
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absolutely scottsdale. welcome back. here's what's happening at this hour. senator jeff sessions continuing his testimony in his confirmation hearing to become attorney general. commenting on any potential investigation of former secretary of state hillary clinton. >> i have said a few things, a special prosecutor. i favored that. i think that probably is one of the reasons i believe that i should not make any decision about any such case. >> hostess brands issued recall of holiday white peppermint twinkies. ingredients carry the risk of possible salmonella contamination but no illnesses have been reported. maria sharapova will return from 15-month doping ban from a
tournament in april in germany if first official competition since shest tested positive at last year's australian open. you're up to date. that's the news update this hour. now over to brian sullivan. >> coming up on "power lunch" a man who helps manage more than $3 trillion says don't get your hopes up too much about stocks this year. why vanguard is putting the bull back in the pen. plus, another power packed lineup at ceos. the ceo of express scripts defends the pharmacy benefit management model and we'll hear from one of the fastest growing food chains in america. and what would import tax mean to the consumer and your company? we're going to dig in on this border tax idea in 20 minutes. "halftime report" right after this short break. ired tires. ired tires. and i never get tired of it. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement with e*trade. i'm in vests and as a vested investor in vests
welcome back to the "halftime report." check out what's happening right now with brook dale senior living. the shares are halted but up 5% despite on the heels of headlines coming out of dow jones says that brookdale senior living is in early deal talks with blackstone and others. senior center owner brookdale could sell part or all the company in a potential transaction according to those sources. that's the reason why the shares are spiking. now let's get out to meg terrell at the jpmorgan health care conference. meg, over to you. >> hey, thanks so much. joining us now is allergan ceo
brent saunders, chairman and ceo. >> thanks for having me. >> only a year ago you were sitting here next to the pfizer ceo because you were planning on merging. it's been quite a year for allergan. tell us abs the transformation and where you stand now. >> i think 2016 for allergan was probably one of the most profound transformations any pharmaceutical company has gone through, perhaps even over a ten-year period. we had the failed murg we're pfizer. and then we sold kind of the chassis of our business, our generics business to teva including distribution business for $41 billion. that closed in august. so a real strong transformation. we, i think, operationally performed really well. medical aesthetics business never did getter. eye care business did strong. but yet the stock was a disappointment for us in 2016. >> what do you think is the key to turn that around this year? >> i think it's about execution.
it's about setting expectations. it's about delivering on our sales objectives. it's about advancing our pipeline. we have six stars interesting phase three in 2017. all of which have blockbuster potential. and a profound impact on curing and treating medical needs. so if we do what we're supposed to do, we execute and we advance our innovation, 2017 could be a really promising exciting year for allergan. >> you did bring in all that money from the sale to teva and you've been doing some deals, mainly small deals. at a really sort of eye-popping pace sometimes. tell us about that strategy. is that what we should expect going forward? >> depending on how you do the math be milestones bespent roughly $5 billion over the last -- since teva closed an half of the money was spent on -- a little less than half of the money was spent on science, bringing in really good science into our pipeline and our therapeutic areas.
things like therapy, potentially new treatment for parkinson's or microbiome just to name a few to a deal we just announced in late december to expand our presence in plastic surgery and to advance our position and regenerative medicine. it's immediately creative to top and bottom lines. the other ones are investment in long term. strong balance between rewarding our investors now with accretion and sustainable pipeline for long term. >> trying to turn the stock around this year, of course. >> right. >> could all potentially come crashing down with the trump tweet, right? how much of a risk is there there? >> look, i think trump is going to tweet something, right? he loves the medium and he doesn't seem to be shy about when he wants to use it. so i think we have to be prepared for it. but i'm very encouraged. we're sitting here on january 10th so we're only ten days into the year but it really feels like the industry understands
the seriousness of the debate around affordability and accessibility, but still having the incentives both economically and scientifically to find cures and treatments down that medical need. that will always be a balance. but i think you're really seeing a really constructive movement by the entire industry. >> all right. brent saunders, we'll have to leave it there. >> thank you for having me. >> coming up in the next hour we've got the shir ceo here from the jpmorgan maelt care chealth conference. we have more ahead with mario gabelli. >> i bought more last week after they derisked the numbers. great story. 14 times earnings. great pipeline. six in late stage. buying back $10 billion worth in stock. i think this is a great set-up for '17. >> quick break and we're back.
welcome back to the half time report. i'm jackie deangelis with the futures now traders. copper surging to a four-week high on stronger than expected economic data out of china. copper saw a strong rally after the u.s. election, anticipation, of course, of increased infrastructure spending. do you see copper heading higher from here? >> you know, it's tough. we're right at a resistance level. but i do, at least in the short to medium term. copper moves on chinese data. there's been a significant turn, upturn in chinese data, from the
small business index. last time we saw a move like this, that came out higher than expected. 5.5%, 60% over last month, full percentage point over what was expected. copper moves on china and not much else in the short term. >> jeff kilberg, we're trading 261. what levels are you watching for copper? >> above this 2.55 per pound, jackie. very critical. but remember just back at halloween, a few months ago, jackie, we were trading at near $2. it's been a very volatile trade. back in early 2015, the first half of 2015, it was ranged about 250 up to 295. so there's momentum as we see inflation expectations pick up globally, i think we go back and test 295 to the upside. >> for more futures now head to the website. futures now.cnbc.com. we're talking to marc faber of the gloom, boom and doom report. i can only imagine what he's going to say. more half time after the break.
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♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. all right. tomorrow on the halftime report, do not miss our live coverage of president-elect donald trump's news conference. look forward to that. are you looking forward to that, mr. gabelli? >> it is what it is. we'll read about it afterwards. >> the tweets are more important than the news conference.
>> i give up. >> also tomorrow, we'll speak with morgan creek capital founder mark yusko, winner of the 2016 portfolios with a purpose challenge. his portfolio was up 100% in the past year. we look forward to that. you were part of that competition as well, yeah? >> i like contributing money to worthy causes, and this was an interesting and novel way to do it. so, delighted to have participated. we're likely to do it again. >> do you want to put your hat on and we'll do the next segment? i thought that was a make gabelli great again cap but woof. tell me about it. >> our firm has done well. we'll continue to do well the next 40 years. >> in other words you're still great, you don't need to be made great again? >> i wore this hat yesterday because it was cold, okay? and the deal was announced -- i actually picked this up at the ipo road show, okay? and this was for veterinarian
centers of america. 15,000 plus veterinarian centers, already own 700 or 800. this company owned 800. the more important point is that there's 86 million cats in the united states and 78 million dogs. in europe -- europe, okay, where you have 430 million people there's 152 million cats. this is a pretty powerful and plausible and perfectly investable area. so why? you pay your own for food. you don't have an aca for animals. you basically pay for veterinarian care. you pay for it yourself. in addition to that, let's not ignore companion horses. the united states has 7.5 million and there's 6 million in europe. the whole ecosystem. what are we buying? patterson dental, 99 million shares. we own a company called shine, which is located in long island. great cash generator.
hsic. price is $157 plus or minus. >> almost $159 now. >> whatever. that's a minor tick. basically they also have dental care. each human being has 32 teeth so there's 7 billion people. multiplied by 32. that's a huge amount of denture -- >> i don't want to sit next to the companion horse on the plane. companion dogs are bad enough. companion horse, no. >> in any event, the notion of this ecosystem -- we own nestle, think they're doing a terrific job in the food area, and in the diagnostic area. we like that area. >> as if you couldn't tell, we love having you. thanks for coming in. happy new year, and a healthy one. >> you noticed i didn't answer any of your question. >> mario gabelli joining us for today.
>> i believe bob will surge above 100. >> doc? >> olen, oln, unusual activity at the 29 strike, i bought it today. >> stephanie, what do you like? >> copper. freeport. new name. >> that does it for us. dow jones industrial average looked like it was going to make another run for 20,000. maybe it will before the day is over. "power lunch" is next. >> on the menu, markets move in higher. another record high for the nasdaq. we found not one, not two, but 194 reasons why you might want to be cautious right now. it's called the super bowl of health care, investing. exclusives from the ceos of sire and express. can you name the mystery chart for today? over the past three months. think you know it? stay tuned to find out. yes, the market to 20,000 in full effect again, 70 points away from that historic milestone. "power lunch" starts right now.