tv Wall Street Week FOX Business January 14, 2017 9:30am-10:01am EST
have a good weekend. good night from new york. >> announcer: from fox business headquarters in new york city, the new "wall street week." gary: welcome to "wall street week." i'm gary kaminsky. trish: i'm trish regan. trump has met with titans of business including jeff ma. >> we may talk about small business pan american agriculture products with comiena. we think china and u.s. relationship should be friendly and do better. gary: could this relationship
between trump and jack ma have an impact on the business dealings between the u.s. and china? china. trish: what do you think of this move for jack to be in there meeting with donald trump? >> i think alibaba has big plans for the u.s. and i think it's an opportunity for him to start at the top and begin that relationship he has been eyeing for a while. trish: he needs a good relationship with the president of the united states. >> i think it has a lot to do with sending a signal to china. i think jack ma's relationship with china is every bit as affected by the dynamic with trump as well. gary: what signal are they trying to send? >> i think accommodation,
relationship, working together. there isn't going to be an adversarial piece. particularly given trump's relationship with the traditional silicon valley. it showed an indication was looking to be in a different footing. gary: the president-elect has talked about china taking advantage of the united states, this election was in many parts about getting back at china. are you optimistic that china as it affects the business world that we are on a better course than we would have been? >> i think a lot of it has to do with where was the rhetoric during the campaign versus the reality. my personal opinion is the reality will be less extreme than the rhetoric. china and the u.s. have to be friends in terms of trade, they have to be in terms of cooperation and business dealing with jeff ma and alibaba.
both parties need each other and we all want a good deal. it will be a negotiating tactic. trish: in terms of the investment world and valuations of u.s. companies and assets. there are numerous reasons why we are seeing an upside on the market. but the last 8 years china emerged as a biefer u.s. assets and was willg to put money into the u.s. if it doesn't work both ways. if u.s. companies are not as easily able to buy chinese companies, then some of that mergers and acquisitions activity could start to soften, does that affect the premium you see on u.s. companies? >> i think it has a much bigger impact in real estate than
operating entities. but there is a much bigger piece underlying the story. that is the mutual benefits that are at play here. there isn't a clear leverage from either side. they both need each other. i have much wish i could be in a place to say i think it's mostly bark and not bite. trump's selection of some of the trade personnel he picked, particularly pete navarro in my neck of the woods, california -- trish: beats up on china. >> that's not mark. that's a deeply ideological idea. gar require many important to remember if the infrastructure perhaps are put into place, they will be financed with debt. and we'll need comiena to buy a lot of that debt. so the relationship could be a somewhat -- somewhat
non-harmonious relationship. but the banker needs to get paid. they need us to succeed if they want their payments. gar report he merging markets, do you find that an attractive opportunity? >> we do. when the commodities cycle started to turn, you have got pro commodity producers and users. india and china benefit from falling oil prices. they have great demographic. young, growing open layings. that's where you will create wealth. so we like that. we like the valuations. they are cheap. if you look how cheap chinese
and russian equities are. gary: brazil, russia, india and china. >> we are excited about argentina politically and economically is astounding. you look at what's happening -- trish: liquidity. especially in a place like argentina. >> they came back to the bond market after the default in '01. they are 15 times but it has been tough up to this point. >> i might have a lot of similar conclusions for different reasons. i think that it has to be investable from a bottoms up basis. there are so many companies with incredible return on invested capital. high operating earnings growth, and low multiples.
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trish: the trump rally slowed down a bit, but we continue to flirt with 20,000. the market is in a show-me mode. now the trump administration has to deliver on it. we want to welcome back mark yusko and david. gary: one of the markets want to see is obamacare. what about healthcare? what about obamacare? is this something that has to get done right out of the gate? >> i think one of the challenges of any piece of legislation. there is the headline, then all the tentacles underneath. and they don't want to repeal that part or that part. i think it will be more of an
adjustment as opposed to an immediate we'll rip off the band-aid. gary: what do you want to tell investors about healthcare stocks? is there something you think is great long-term investment? >> we are big buyers of healthcare. it started to rally right after the election, then mr. trump came in and made a comment that he was mad about drug pricing, too, and they weren't down again. they are on sale and we like to buy what's on sale. pharma and bio tech are making lots of money and will make money in the future selling at cheap prices. >> it's become a couple different sectors. the hospital managed care companies are in a totally different world than bio tech and big pharma. a lot of attention about trump's
comment and hillary's tweet. that's on a different plain? gary: why are they in a different world? >> the entire revenue model could be upended by repeal of obamacare. i don't think it could be, i think it will be. when you look at the things threatening big pharma, it's the notion that they need price fixing. trump flirted with it. but there is no policy meat on the bones. i don't believe we are going to have a price fixing mechanism in this country. so it depresses valuation and makes guys like us buyers. trish: people are talking about less regulation, the corporate and individual side. there is an expectation the market is going to get it and that's been built into valuations. what happens if we don't see it right away?
>> this happens he time. four or five republican sweeps in the last 100 years and they are all on the same kind of premise. we'll cut taxes and decrease regulations. you get this little rally then boom with bush it was down 33, with reagan it was down 27. then hoofer, it was down a -- with hoover it wasone lot. gary: are you saying you expect a similar correction come february? >> we are cautious about the markets. we think they are highly valued. it will take a lot longer for all these things to actually happen. and people are start to say, where is it? >> in terms of overall market
valuations. there is a feel to it it's a good time to be selective. all i can say is this is the year it may be true. but to the point about tax reform. we ran a study for clients going back to prereagan tax cuts. prices started here and ended up here when he got it done. but along the way there was a lot of gyration. there will be a process on capitol hill to get it done. but along the way with the republican congress or not. gary: you mentioned the asset managers. you said you have to be selective. tell us -- >> i can't say enough how bullish we are on the energy sector. i truly believe president trump has the chance to be the energy president.
the market is starting to price it. i love spectra energy. and oil services has been a leader and general electric has a big energy play as well. trish: good to have you here. "wall street week." we'll be right back. >> announcer: does this sounds like a republican who will be friendlier to business? >> we need new bidding procedures for the drug industry because they are getting away with murder. >> ann
gary: drug stocks took a big hit this week and this is why. >> the drug industry has been disastrous. they supply our drugs but they don't make them here to a large extent. and the other thing wev have to do is create new bidding procedures for the brug industry because they are getting away with murder, pharma has a lot of lobbies and a lot of power and there is very little bidding on drugs. we are the largest buyer of drugs in the world and yet we don't bid properly.
we are going to start bidding and save billions of dollars over a period of time. trish: if you were told that words came out of the mouth of bernie sanders, it would seem believable, right? charles payne and david asman. this is one of the most interesting things about donald trump. you can't put him in a box. he's not necessarily partisan as some, especially conservatives would like. he seems to have more of a what makes sense, what is common sense approach to all of this. but rhetoric like this has an effect. charles: donald trump tweeted such things, i remember the tweet and if you read the tea leaves this shouldn't surprise you. where the u.s. government can save the taxpayer money he has a great point.
but on the other side of this we have to be careful trying to cap profits at pharmaceutical companies. we get $86 billion imported into this country. it's about tax policies. in the case of israel a bunch of brilliant people who know how to make drugs. it's about keep in labor a bad tar rifs or bad trade policies. i would like to see five levels and a way of capping companies from buying a product, like mylan buying the epipen and jacking the drug up. they didn't put any money into the discovery of this yet they are screwing the person out there. that's usery.
david: i think what donald trump was talking about partly with regard to the bidding process. the bidding process for medicare, the prescription drug companies and the ancillary companies are getting away are murder remember it was a republican who came up with this idea. no incentive, no bidding. i brought a box with me. i have an 80-year-old friend who gets six of these boxes every year. they include $250 of stuff for his diabetes. he doesn't have bad diabetes. doesn't use this. the reason it's sent to him is because the company that sends them out probably gets double what they pay for for sending it out from taxpayers. it sits in the corner. he never uses it. that's where billions of our dollars are going. when donald trump is talking
about ending an unfair bidding process. this is what he's talking about. gary: that's a good way of explaining what's going on. when i heard the president-elect talk about the lobbyists and the power of the drug lobbyists, those lobbyists are going to still want david's friends to get those products. how does it change? charles: that's a great point. here is the dirty little secret. one of the reasons it hasn't changed is because of republicans. republicans in congress have been loathe to use it. tom price has voted against it. some how they will have to get the republicans, big government the same with import-ex-port bank. >> you have need someone who doesn't have these allegiances who is financially independent
fluff to say, okay, enough. david: 100% correct. what would have happened if hillary clinton would have become president. she would have put price controls on all pharmaceuticals. a ban on raising prices on pharmaceuticals. the pharmaceutical companies lost market cap the day donald trump said this. that's nothing compare to what they would lose. with price controls we wouldn't have foreigners spending money. gary: we just had two portfolio managers on the program and they like healthcare. do you like healthcare as an investment? >> i don't. i think they have serious issue ofs. and you have to have a new drug, three phases and still hope you can get through without being sued to death it's a terrible
setup for these companies. they have been hurting for a long time. i like large bio techs because they will have to be brought out by those drug companies. trish: what do you think? david: i agree 100% with my friend charles. they had the runup. i still think there is some opportunity on the plus side we haven't seen yet. as the controls are taken off and if he focuses on the carrots and not the sticks with the inversion issue of. i think there will be opportunities that we don't know about that we haven't seen. gary: that does it for us on "wall street week." trish: tune in next week for fox business' special coverage of the inauguration. and tune in for a special
>> at the president-elect came out swinging against spies and lies. mr. trump holding wide-ranging, fast-moving well organized news conference. if it produced a lot of news and some drama. >> i think it's a disgrace that information that was false and fake and never happened got released to the public. >> lou: of the president-elect's secretary is among our guests tonight. the president-elect handed control of his business empire to his sons to remove any appearance of a conflict of interest. we will have the story. and mr. trump's choice for secretary of sta