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tv   Power Lunch  CNBC  December 8, 2016 1:00pm-3:01pm EST

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that makes sense, does it not? >> yeah. >> especially with vix is still only ten. >> the price to pay for the yeah. >> good having you here. thanks. >> thanks, courtney. >> great having you as well. >> thank you, scott. >> does it for us. power starts now. welcome to "power lunch." all aboard the trump train and boy, is this run epic. one month ago, election day, the dow was below 18,000. but now, we've gained a mind blowing 1700 points. full steam ahead or are we about to go off the rails? billions of dollars worth of investment advice coming your way as "power lunch" starts right now. >> welcome, everybody. thank you for joining us check out the huge sector moves we've
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seen since the election. financials, up 18%. industrials, 9% and materials up 8%, so till gas in the tank for these sectors to move higher? we're going to dig in on that and give you advice and remember these ladies? they are part of one of the nation's oldest and most storied investment clubs of all time. and they're making great investments again, so we're going to check in with with the wonderful beards town ladies. thank you. a huge show on tap with not one, but two billion dollar buyers. america's restaurant king. your new nickname and the star of billion dollar buyer is here all show long and billionaire buyer of stocks, carl icahn will be joining us a bit later on. this incredible stock rally continues. the dow up 7% in just 20 trading days. 112 stocks in the s&p 500, more
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than 20% of the index, are up more than% in one month. however, loyal viewer, remember it is not just always about the upside. let's bring in bob pisani at the new york stock exchange. >> brian, the important thing here is we keep talking about this fabulous rally and it is. we're at new highs again. getting midday rally, but also been some losers out there. now, you're going to open your quarterly statement at the end of month, beginning of january, take a look, i know a lot of people think it will be up nicely, but depends on what you own. the two biggest e ferks ts out the there and what the performances are looking like for the year. so, first off, stocks versus bonds. full screen for me. the largest stock etf is the s&p 500. spy. since october 1st, up 3.8%. you're going to be very happy, but the biggest bond etf that's out there, the agg, is down 3.7%. why am i bringing this up? because if you own a 50-50 stock
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bond portfolio and a lot of people do, essentially, it means you are flat on the quarter. so, there have been real clear winners and losers here. we've talked about this right at the top. show you one month after the election, we've had bunch of owiners. banks and industrials have done well and we've had this nice rally. on seasonal market strength, hopes for gdp growth. there you see the winners we've had here. but brian, take a look at the losers here. i want to point out, utilities, staple, gold and those treasuries have been down rather notably, so guys, remember, it's been good for a lot of people, but there are some people that are not going to be terribly happy. >> i know. the bond investor want to set their clothes on fire and run screaming out of the room. maybe they have personal issues. bob, thank you. >> great imagery. >> talk more now about the best vesting strategy for you now. nancy tangler, also brad
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mcmillan. cio of commonwealth financial network, so, nancy, there's a rally in stock, but as bob points out, the bond market has been a dumpster fire. where should your clients and our viewers invest now? >> yeah, it's i didn't notice the stock market's been going up. it's e leaded me. i've been dancing every day. yeah, it is a did i feel time. because you don't want to chase this market. and yet, you want to participate, so, we have been overweighted to u.s. equities all year. we went to that posture in mid february. it was difficult. we overweighted oil at that time and we moved to an overweight in industrials during the summer and farm spharmaceuticals in th. so i would say you want to look for the areas that are underperforming after the election, technology declined. it was a great time for us to jump in as value managers and by facebook, imagine that. and then subsequently, now we're getting an opportunity to continue to round out our
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holdings and upgrade the quality in the large cap pharma and bio tech space. that's where we're looking. the areas that haven't performed. we have sold out of electrics telecom. >> facebook as a value play in this environment. that's pretty amazing. what are you doing here? are you ride thg rally or getting nervous about how fast the run has gone? >> we tend to look at the bigger picture here, the longer term. there's no question. the market may have gotten a little bit ahead of itself. but looking forward into 20 o 17, you've got a couple of real tail winds coming into play. earnings have moved back to positive territory. they're probably going to grow faster. valuations are are very heavily correlated with consumer confidence. which is rising. you look at the market as a whole. actually, might get a double whammy. could turn out to be a very, very good year, so we're not
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that concerned about possible pullbacks! nancy, a lot of people 401(k)s or similar program. beginning of the year, a good time to look at how they're deploying cash and how they're putting new money to work. if i had been a 60% stock 40% fixed income person for most of the last few years, would you suggest making a change going into 2017? if so, how? >> well, i would. i tend to be overweighted to equities in general. because they performed better over the long-term. of course, it depends upon your age, all sorts of other issues. are you still contributing, are now not. but in general, stocks outperform bonds over most periods. now, we've had this 20 plus year bull market and bonds. i think we can all agree that from here bonds are not going to perform as they have historically. they probably won't underperform as dramatically as we move into the new year, so i would, our
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view is long-term as well and i would look for opportunities to increase allocation to equities if you have the risk tolerance and time. >> so, brad, let me ask you a similar but slightly different question. let's say i am lucky enough to have $100,000 that i want to put to work in inmentvestments to m money long-term over the next six to nine months. how would you do it, in other words, how would you dollar cost average in and where would you put the money? >> i think your risk allocation reflect what is you're looking at over time. so, whatever your risk allocation is now, i would split the money that way. that said, i think i would probably dollar cost average in and i had this dwugs with an adviser this morning. over the next three months, maybe six months at most and the reason i say that is i believe 2017, we're going to get very
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strong equity market performance, but there's going to be volatility there. so you want to take advantage of that. buy dollar cost averaging, but you don't want to make it too long a time frame. zpl so, get the money in to the markets and don't hesitate. but brad, did i hear you correctly there, if i had been that sort of 60% stock, 40% fixed income person, you would maintain those ratios as i put that money to work. you would not do what nancy said, which or implied, which was to reduce the allocation of the freshmen into fixed income and boost the allocation into equity. >> i would not. and the reason for that is simple. right now, stock market is doing well. at same time, the bond market is probably oversold right now. and i'm far from convinced that actually the bond bull market is over. so, that's not a bet i would want to make with long-term money. so, i would keep your allocation
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as is. >> thanks very much. nancy, brad, we appreciate it. >> tina is here with us. you're welcome. >> hello. >> i am here. >> matter of fact, i have a little note from jo-jo. from your wife. >> is that right? >> kathie lee and hoda this morning. >> we drank some her -- >> right now. are you drunk right now? >> no, that was with you last night. >> my wife says tillman was great. why were you hiding him from us? we knew that long ago. >> just bounce iing from hokey hokey. >> right. exactly. and we got lots to talk about today. everything from the university of houston and their potential new football coach. >> i put those rumors down at 7:00 this morning. trump, sorry, somebody just said something in my ear. >> are you a buyer of stocks now? >> absolutely not. >> supposed to say yes.
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>> you've had too great of a run right here. >> but are you less confident about the economy? have you seen a change in the economy result of the election? >> 100%. people are out spending money u like it's booming now, so obviously it is. >> when we were in october and you were here, i don't know the last time you were here, we talked about your restaurants and whether people were going and spending and you said people are staying home more. they were nesting. they were binge watching. whatever they were doing. you've seen a change. >> since the election, the world has changed. and retail and restaurants, people are just out spending money. we had had horrible comps in the whole restaurant industry for the last few months and now, november, it's positive and december's positive! the election happened. get it. why do they feel better? >> i think that people have faith in trump because he is a business guy. and you sit here and look at his
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cabinet appointments and everything is pro business. remember, the employee benefits when you have american capitalism and as businesses expand and grow, people have better opportunities. >> how about the fact you hear this new appointment today from the department of labor. andy pozner. >> and the labor department had sat there and were just playing czars without government regulation. no federal law. just deciding we're going to put in this rule, this rule. that is going to stop and you'll see businesses expand now. with the right secretary of labor and deregulating. >> we had the u.s. steel ceo on yesterday and he made headlines and saided to hire back, but he said at the end of the interview that in the past few year, they would hire more lawyers than engineers at a steel company.
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>> the class action lawsuits against restaurant company ss crazy. you have these liberal judges and somebody from the department of labbe says it, you think it's federal law. so now, they say this isn't law. this is just an opinion from somebody at laeber department, but these liberal judges say that must be the way it is, so you win and you lose. that is going to change. and you are going to be in a very friendly business atmosphere, which is going to be great for all of us. he's no fan of the minimum wage, andy p puzder. >> it doesn't make sense especially when you dent get the tip credit. >> explain for people who don't know it. >> it's just say, for round number, say the minimum wage is is 10 tlrs. and the tip wage is $5. if a waiter is making more than that other $5 an hour, you only have to pay them the $5.
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so, let's just say -- >> basic sal ray. >> basic then he or she makes so much in tips. it's not different. say you have a state right now that passes $15 an hour. i'm okay with that paying the person in the kitchen or the hostess or all nontip employees the $15 an hour. but don't make me take my 30 waiters that are making 3 and 4 and $500 a night at high-end restaurants and pay them the $15. that's why you're seeing these so many restaurants now going to service and they just run the food out to you when you order it at the counter because people can't afford the waiters anymore! use your ipad. >> liberal labor department right now is disallowing the tip credit and all these states are getting rid. >> that will change. >> 100% because he understands business. and that's what you need. >> as i've coined him, warren g. hardy. because they run hardy's.
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>> mr. hardy was not exact ly te cleanest of -- >> it's good. it's good. >> you're with us for the whole show. really happy about that. >> glad to be here. >> she's happy. >> they weren't joking. coming up, talking more about what's going on with the trump economy. norwegian cruise lines is heading to cuba. could it also be headed into troubled waters with the president-elect? our squloouf interview with the ceo is next. plus, carl i can joins us in the second hour of "power lunch." and as he head to break, let's look at some of the big winners or the dow this year. we are riding the rally here. some is of the top performers. don't move. we'll be right back. wh growth p? american express open cards can help you take on a new job,
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it is full steam ahead to cuba for norwegian cruise lines. getting the green light to start trips to havana in the spring of next year. joining us now for a "power lunch" exclusive, frank del rio. good to have you. we want to talk about the cuba line in just a second, but first, did you hear the whole conversation we had with tillman about the what the economy's doing since the election? your stock alone is up 12%. since election day. the stock market's acting like
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the economy is getting better. are you seeing evidence of that yet in your business? >> well, certainly some of the uncertainties around the consumer have been lifted. wealth effect because the stock market has jumped. so, yes, i think that overall, i think there is a more relaxed atmosphere. people are more hopeful than they might have been a few months ago and that should translate, if it continues in the coming weeks and months into a better business environment for everyone including us. >> now, to cuba. finally, you've been working on this for a very long time. you as a cuban american had particular interest. are you worried about donald trump becoming the president-elect? there's talk he may roll back a lot of what president obama did. >> i'm really not. i believe that the momentum that we have seen in the warming of the relationships between tw two
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cowen tris will continue. i've heard the rhetoric. and i simply believe that mr. trump does want a better deal. not just in cuba, but in many other countries where we have some sort of ongoing negotiations or deals in the past. i was in cuba tuesday and wednesday, just yesterday. cloeding the deal on our cruise line and that is a concern over there as well. but i believe and i assured the cubans that i think the new mrgs along with the new leadership if cuba will work constructively, judiciously and quickly to move ahead. i think everyone wants certain ly the people this cuba want the embargo lifted and i think there's a grow momentum here in the united states now that we have a republican congress, a republican president, who wants to get things done, who wants new business opportunities. >> really? that sounds so counterintuitive. >> a real possibility.
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>> most people think that with republicans, the embargo is more likely to stay. you think u it's less! i do. >> i tend to agree with you. i feel like the trump administration where he's very unhappy with the last 50 years in cuba, he still sees it as merp companies being able to expand just like you're going to be able to expand down there and i think trump will be for it. >> okay. wow. how many ships? how often they going to go? >> we've got approval through the end of may. that's what this round of approvals were for. so, we'll have ten sailings. across all three of our, the first cruise line to have all our brands approved to go to cuba, so that's a big step for us. oceania will be first. that's the cruise line that i founded back in 2003 and to have one of my vessels, the new
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marina, will be a real thrill for me. it will be followed in pral by the marriner then the sky. we've begun negotiations with the cuban government to extend those approvals past june and we're hopeful that as our cruises begin to operate, that we will obtain approvals for more sailings in 2017 and beyond. >> as the son of a norwegian immigrant, i love a deck, that says norwegian gets approval. when ever i see words like that. give me a characterization. >> we have norwegian captains on board. >> i know you do. >> tell me what demand is like for these cruises. the phone's ringing off the hook, what, give me some sense. >> yeah, we have had some pretty strong demand this morning. word is getting out. we have been marketing these cruises throughout the caribbean, western caribbean, without havana as a port of call
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and certainly now with havana as an included port of call, most case, overnight call, we expect demand to rise. >> all right. we'll see. frank. congratulations on this. you've been working on it a long time. >> thank you, michelle. great to be with you. why shares of one tuxedo rental company have investors putting on the ritz today. plus, a globe trotter, bun gee cord and a basketball. this is the video everybody's talking about and -- don't jump. we're going to show you how it ended. and check out the stocks leading the dow during this big run. goldman sachs, good as gold. caterpillar, american express, everything's up. tillman's still here. we got a lot more to do. stick around a.
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shares are falling sharply oon a large spike in volume. this after research tweeted about the stock. in a series of tweets, they started with sit ron writing express strips is the fill dorr of the pharma industry. the real donald trump promises to fix drug pricing. two words, also raised the tweet last down about 5% before
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citrob's tweets. on heavy volume, about 9.2 million shares so far and as a note rear, andrew left will be on "fast money" tonight. back to you guys. >> express scripts is one of the companies, they're one of these pbms. cvs, care mark, medco. it's the biggest on its own and that was -- >> one of the big companies in the country. huge. >> they help manage, that's where the accusations of a lot of padding of pricing comes in. supposedly. >> what they'll say is we're so big, we get basically, in a nutshell, the billion dollar buyer. >> they just do huge volume deals. >> deal with the prescription benefits manager? >> i don't. somebody else does, but you have to. >> that's the way to get most
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afford bable drugs for your -- >> only way to do it. >> express scripts as we're talking, continues to drop. we'll do more the next story throughout the hour. just before the election, just a quarter of investors were bullish. today, that number has nearly double ued. but, is that a big warning sib? we're going to dig in. plus, they're back. the beards town ladies have seen it all, so what do they think about this big market run? we'll check in with one of america's oldest investment clubs. still ahead. as we head to break, the big winners of the year. these all-stars. nvidia, that stock has been hot. thank you, mobile automotive, video games. those are the hot names. back after this. ♪ ♪
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hi, everybody. here's your b cnbc new update. a 6.5 earthquake was reported off the coast of northern california, but there were no immediate reports of damages in the nearest town. the quake's center was in the
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pacific ocean about 102 miles west of fern dale. police say a man suspectein officers is dead. the 32 was hiding. the jury foreman in the murder trial that ended in a mistrail is speaking out. he is the south carolina police officer charged with shooting and killing walter scoot during a traffic stop. >> when that letter was submitted on that friday, it was because we had one individual who was just deadlocked that he wasn't changing, but yet, we had five who were undecided and so, because of that, we went and i believe that we could have deliberated more to see if we could sway that particular juror and get those who were undecided to make a decision. >> and that is the cnbc news update at the hour.
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brian back to you. >> we continue to watch this market rally. i mean, not just today, folks, but we are up again today. open up your forks or 529 plan with glee. dance around the kitchen. give somebody a hug. >> don't wait. it might not be this good, but who knows. it might be better. >> if you're 100% invested in bonds, take a big sip of whisky. thousands of new highs today. the financials, they are rocking. dow industrials up u another 80 points today. real estate doing well again. health care, consumer staple, industrial, they are all in the red p. edward line sciences, the biggest gainer, that stock is up 7%. >> and the stock market records are changing investor sentiment. the number was 23.6%. today, 43.1%. nearly doubling. joining us now is charles, vice president and journal editor of
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the american association of individual investors. welcome. this is an amazing turn around. how many times in your history of following this index, which has been around a long time, have you seen that kind of dramatic move higher in such a compressed time frame? >> it's only happened 12 times before where we've had a huge jump in bullish sentiment. more than 23 percentage points over a period of three weeks, so this is very unusual and very dramatic. >> what happens in the wake of that kind of bullish sentiment upsurge? is it a good sign for investment or not necessarily? >> it's contrarian. the average return is 0.3% for the following six months, but half the time the market's been up and half the time the market's been down. so, a little bit mixed, but when we look broader and thanksgiving, we had bullish sentiment hit 50% and when it
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reaches unusually high levels like that, we tend to see the market underperform. not really go down, but we tend to see arch returns of about 2.7% over the following six months. >> over the following. i'm a little confused there. you said when it went up, swiftly, in the ensuing six months, you had an increase of 0.2 p%. then you said if it's up near 50%, an increase of 2.7%? >> two numbers. one, the size of increase over a three week period, which is rare, but when you look at over, if you look at optimism when it reaches high levels, which we have more frequency in terms of record, that is a very good contrarian indicator. we see that consistently being followed by underperformance. >> does the level of, sorry to get into the weepds here, but does the level of optimism have
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to stay at that 50% threshold or above for a danger sign to be flashed? if it is just the mere fact it touched it as it did a few weeks ago? >> just the mere fact we touched it. i just looked at historical data and the returns every time at that level, so it's just really hitting that unusually high level. that we tend to see. >> so, bottom line here, because i'm a little p bit thick. the fact that it hit that 50% 49% suggests what kind of returns? >> it suggests lower. going back to the start of november, we had unusually low sentiment. when you add it up together, it kind of lends to the argument that we're now taking away from 2017 gains with the current rally. >> charles, thank you very much. appreciate you're being with us. investor, more bullish. thanks. >> financials have been b killing it during this trump rally. the xlf, banking etf surging
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close to 20%, what do you do? get in or too late to bet on the banks? bring in jason goldberg with barclays. he says he believes bankses are headeded higher even more than where they are now. why? >> certainly. good afternoon. i think four reasons we can group the benefits of this trump election. first, higher interest rates. while we debate what the fed's going to do. the ten-year treasury yield is up. banks have experienced margin pressure over the last several years and giffin rates. >> i get it. next. >> next. we'd say corporate tax rates. if you look a lot of the bank's earnings are generate d in the u.s. corporate trait not only help the bottom line, but help corporate america and the consumer, they'll borrow more and presumably pay back more easier third bucket, we'd say financial reform. clearly being a big sticking point for the group over the last several years.
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last six, sempb years as gotten worse and worse and now, we think it will stop and perhaps get better as banks bend the curve there. it helps expenses and revenues. >> are they going to make more loans? that's how they make money u. >> they do. they've been growing their loan portfolios, but to the extent requirements get looser or the economy gets stronger, we think corporate consumers like to borrow more. and they'll make more money on those. so, i see you like a lot of stuff. i'm curious as why you don't like certain name, ko america, keycorp, regions financial. all those four things sound great for all the financials. why aren't those three do you think going to participate? >> we're generally constructive on bank stock. so, certain stock haves to outperform. the bulk at the moment. i think more of a bias toward th bigger banks. which we expect to continue.
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>> so, by any of the big banks now and what a year from now? >> yeah, on hard to predict the next two, three weeks given the move we've had higher, but now until the end of next year, we think these stocks will continue to outperform. >> it would have taken a brave soul to put money into wells fargo six or weeks ago. if you did, you would have been paid off. >> correct. typically, you buy good company at discounted price is. wells got sold off on some concerns and they seem to be working through those. >> understatement there. we get it. >> thank you, jason. >> thank you. >> here's the thing. feel bad about talk iing about jason behind his back, but he's so con sus. when everybody says doit, i just think, it's too easy, too conventional wisdom. >> get hit over your head every time it looks like that's the way it's going to be. never happens.
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>> you've been saying we're out over her skis. you love it, but it's gotten, the stock market. >> just the stock market, but you'll have a little correction, but i wouldn't be surprise fd the end of the next year, if we don't see a 21,000 dow. i think the world could be that good. if you go back into the low 18s! we've got to separate business and the stock market getting better. they are not always the same thing. >> but more likely than not to be. >> all you've got to look at is your pe multiples. when they start getting to a -- 24 times. forward earnings now. >> that's too high. look at history. >> what if they're telling you the e is going to get much birg. >> remember, rates are going up, too. so, everybody's cost of capital and there's trillions of dollars borrowed, it's going to cost them more. so, some of your expansion is going to be held back for the higher interest rates.
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>> but you look at where we are now at 19,600. say we end the year roughly at 20,000. that's what, 1,000 point, a 5% gain. good. >> have you begun make iing thew 20,000 hats yet? >> i have not. >> i have one, too. >> it's hard to look at percentages now. >> it still is. >> 1,000 points, if we go to dow 20,000. 1.8. from here. >> my mom said the dow moved 12 points today. wow. >> tennessee and wyoming railroad skyrocketed. >> that is the truth.
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>> zenith bought rca. 1,000, the top hat. >> sue herera has a news alert. >> thank you very much. and we've been hearing from a number of people they're having problems with their bloomberg terminal. we're monitoring the situation, but they put out a statement that we'd like to read to you. it says quote, users are continuing to experience intermittent issues with slowness on the terminal. this is an internal issue and we are working to revolve it as quickly as possible. so, for those of you who are having issues, that's the company's response to it. we'll continue to monitor the situation and get back to you with any update. back to you. >> on deck, opportunities just for wrou. and you and you. the big wall street calls you need the hear. street talk. it is next, but first, a bond report. rick santelli. in the bond pits, rick. >> a lot of volatility today, but we end up back in the same neighborhood. one week charts. tens. it's like a heart beat.
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we get xitd, then go to 38. boone, similar, but had a lean in. it's back to what was at the top. >> if we look at what's going on in the you aeuros and dax, stra up. less with respect to quantitative easing, so it's back in line. nothing has really changed except for don't change your channel. "power lunch" will return after a short break. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks.
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first, the good, tailored brands. the shares set to skyrocket after the retailer and tuxedo rental company crushed most estimates in the last quarter.
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now, the bad. the communications and cybersecurity software maker. gave a weak guide. after falling short of estimates and revenue for the third quarter. ugly day for horizon pharma. the bio pharmaceutical company ends its trial of actimune after it fails testing in late stages. it says the treatment did not show significant change. >> thank you, tyler. time for street talk. recommendations on the toks you need to know about and the first is expedia. clsa, they think it's going to hit 10% by 2020 and it's not just there's a big shift in behavior to book online. they think they're good at buying understood performing assets and turning them around. they wish they had better hotels in europe. price line has more. price target is 145 buck, which is 18% higher than now. >> it's competitor, but trip
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adviser, separate company, the worst performing stock of the s&p 500. 2030 days. >> it's not participating. >> like the only stock that's down. tiffany. tiffany is on their best ideas list for next year. they see it as quote beat and raise story with positive comparable sales momentum. also call tiffany a compelling long-term franchise. a $91 target on tiffany, so, it's at 85, about five bucks plus of upside. >> third stock is fit bit. the firm citing slower growth. there's da that that sukts the market only grew 3% in the third quarter. 67%. second quarter was. >> post holidays, everybody like me.
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>> today, some property and some employees from pebble. they make these cool watch, but have three%. price target, nine bucks. they thought it would hit 18, stocks below that already. >> dk is the ticker. about $155,000 barrel a day capacity. credit swooes upgrading. they proposed buying remaining assets that it doesn't own. analysts say the merits of any deal may be underappreciated. as much as 70 million in cash can be saved. they boost to 28 bucks and even with today's 3% gain, that's another 15% of upside for your small cap call of the day. sxwl thank you very much.
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coming up, they are part of one of the most famous investing clubs of all and kate rogers has the story. kate. >> hey, tyler sh that's right. we check in with the famed beards town ladies, but they're not making predictions about 2017 just yet. >> if we did, we would not be sitting here. we'd be in aruba on a beach. >> more on that and their take on the trump rally after the break on "power lunch."
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welcome back to "power lunch." therapeutic shares following by 9% after six former executives at the company including its former ceo were arrested on charges they allegedlien gauged in a scheme to bribe doctors to prescribe their companies pain medication and possibly defraud. last month, the company's cfo said they were optimistic there would be a department of justice resoluti resolution. the shares have lost two third its value this year. ♪ >> remember them? beards town ladies. seen it all from the stock
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market soars in the 1980s to the housing collapse in 2008, recession that followeded. we had to hear what the famed club is thinking and that's where we find kate today. hi, kate. >> hey, tyler. that's right. add you can see, the ladies are pretty famous here. they have air own exhibit in city hall, this started in 1982 with $1600. the ladies rose to fame in the '90s, but the same decade, they were hit with scandal overinflighting the size of their returns. they kind of fell out of the public eye, but that never stopped them from continuing to meet each month and invest in the market. >> we've been through a lot of ups and downs. we've seen it go up, we've all smiled when it goes down. we don't get sad. we look for bargains. it's a sale. like a discount sale in a department store. >> let's go shopping. >> we sat down with eight of the group's 16 members including two
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charter members who are in their 80s. they say the strategy has always been to invest in what you know and hold for the long-term. >> berkshire. b. >> yeah. >> i can't afford the a. >> yet. >> yet. >> thank you. >> apple. starbucks. >> aflac. >> johnson & johnson. worldwide wolverine. shoe company. ladies love shoes. >> we are here in the midwest. they say they were not too surprised by the victory of donald trump in the election, but they're very happy about the market rally that's followed. >> i was glad he was elected and we watched that market go down one day and it came right back up. and i think buffy and i are on the committee right now and we're looking at stocks that perhaps are going to be helped by adding more to the military
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and defense stocks and so this is the type of thing we're looking at to consider buying. >> the ladies say they're watching the health care sector because of the uncertain and unclear future of obama care. >> how have they be doing lately, kate? >> so, it's funny you asked. since their inflated return scandal, they're no longer allowed to release how they're doing. so, they wouldn't give us a percentage and whether they're up or down, but they did give a hint and say they think they're going to be up for the year. >> is that a legal requirement or just what they've decided to do as a result? >> that is what they've decided to do. so betty in the front with the red vest on, she owned up to it. she said the mistake was her fault. she felt really badly about it at the time, but they were doing everything by computer. she thought it looked lhigh, bu it was a mathematicaler rory, but they had five book, they're all here behind us and they were pulled from the shelves by their publisher.
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it was a big to do. >> made a computational error. not an error intent. is that what we're saying? >> they were very earnest. b i don't believe it was intentional. >> like putting too much butter in the recipe. >> the fish is always bigger when it gets away. >> kate, thank you very much. we love those ladies. >> okay. move on from that segment. tillman, one of the sectors that is expected to benefit from a trump administration, energy, obviously tex an. you said if oil stays at 30, we're in big trouble. it's come up a lit not much. still kind of low. but you've got this sort of trump optimism. how is it playing out? >> just alone with the new e p pa secretary, who is suing the epa. >> suing the epa. but once again, you're getting rid of ridiculous deregulation
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and so, scotts going to be great for the energy business. and as we start getting closer to $60, they know how to make money now. all you've got to do is get people a couple of years and that's what they've had now. new text message. you don't have to make money at 80. when you get to 55, 60 in the fracking business, now, they can take care of their equipment and you're going to start seeing money made. >> you're going to see oil be 60, 65 by the end of the year. >> not this year. next year. end of a year. >> the mood better down there in general? >> definitely. once again, you've got a very business get out there and make it happen president. and you're going to see a change. >> all right. >> billionaire bonanza here on "power lunch." we have billionaire tillman with us for the next hour and up next, carl icahn is going to join us. stick around. as we head to break, stocks powering the s&p 500 during the
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trump rally. we'll be right back.
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welcome back. tillman is with us for the spire rest of the hour and another record high. the dow moouing higher and a record closed by the s&p 500 would be its 16th of the year. 22nd of the year or better than i do. the dow is less than 2% away from hitting the $20,000 mark. >> check out the movers now besides brian. sears up 5% despite a drop in earnings. its losses were less than exp t expected. express scripts tanking. tweeting saying it is the fill dorr of the pharma industry. they say it hasn't seen the
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report, but adds its presence in the market helps drive costs lore. my lan is up 2%. and a lot of money in the market is invested in etf. dom is taking a look at some of the most widely held funds. >> so, we look at the overall market. menged that 16 record high for the s&p. the dow, whatever is going on, just means the entire market is going hire. the ones that have the most assets are higher along with them, so lot of gains there. but let's take you through a couple of thematic elements because our scales up here at the wall to show you just what kinds of stocks and funds are doing well. as you can see, there on the left, the s&p 500, emerging markets have done well. we put the vanguard one up as an example. go gold miner's etf, it's up 55%. they had double the quarter. more than doubled at one point
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this year. so, maybe some candidate as well. on the right, some losers health care and bio tech. the bio tech etf is down 22 pirs. that's far worse than the overall sector. also, interest rate sensitive sectors. utility type stocks, that sort of thing. the i share, bond like stock, down 4% as well then bond funds generally speaking making a bit of a breather, so to speak. especially muni bonds. so, thematically as traders and investors lookinging towards places they can harvest gains and loss, those are some of the etf type investments they're looking at. >> thank you very much. two etfs in particular, making some interesting moves this quarter. the largest stock etf, the spider, up nearly 4% while barclays is down nearly 4%, so what did you do?
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miss your chance? if you invested in bonds, take a look at both. with jack, cio of bmo private bank. greg peters is here to talk bonds. welcome to both of you. jack, i read your report. there's a lot in it. it's a really good report. i don't know whether you think stocks are going to go higher or not. >> i think there's a huge expectation built in to the market now. we think happy days are here again and we're going to have reform, stimulus, profits. growth. and a lot is built in. we had a market that was somewhat frothy and now, we've ramped it up to the next level. brian is ready to get a 20,000 dow hat. i think we're going to need
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fundamentals. i guess you think it's a little bit overdone and that is basically greg, your point of view, isn't it. on the bond side. that the decline is a little bit overdone. >> i think the move in yields way too much. expectations are way too much and yeah. it's too much. >> i look at what's happening in the bond market, is there anything safe to buy in any piece of fix ed income i should buy and i'm not convinced. >> there's been a powerful move in yields. 50 basis points since the election in ten years, but it's still very much like high yield bonds. spread product blod brodly, so i think the big move in bonds is largely over and if anything, i think it's coming back down.
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>> what i really think frk you look at the growth dynamics, i think it's way too early to say that the bond reign is over. >> short munis are yielding 4%. a loan yielding 4% or more. i think there are places you could see a decent yield. but yeah, i think the secular move in bonds to the downside is probably over. and the effectiveness is diminished. >> got your ear piece in?
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good. what if we get a tax reform? >> still, munis are yielding more than treasuries. the tax rate is not going to be zero. >> why jack and i'm asking for a friend. greg, if you're say a 45-year-old guy that owns a tax advantage muni, it's down about 8% in 90 days. >> i don't think now is the time to dump them. historically around tax change, it's leichtly correlated, believe it or not. >> why are they so down? is it an overreaction? computer trading it? the market is saying otherwise.
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munis are long duration bonds and so, it absorb the lion's share of the move. >> what should i be telling my financial adviser about my bonds and what should he be telling me she? >> first of all, the total return fund. >> i don't think bond, duration, really fits the script. we cannot forget that and duration is a big piece of it. >> what are your clients calling up and asking you about what's happened over the last month. >> they want to know why aren't we reposition oing everything right away.
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jumping into -- i think there's some, we should. i think that i will say that the average stock is outperforming the s&p. i would, we have shifted to mid cap. we like equal weight. so i think those companies will benefit. i think the fact that this rally is broader baseded rally is strong. >> i heard the aaii. investors are expecteded a lot. >> i remember when if my parents expecked me to come home with as and i came home with with bs, they were disappointed. at least they would be positive reaction here. right now, i think investors expecting a plus. i think that's too high. >> one thing, don't panic over
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bond, over exwiities. don't panic. >> am i better off owning individual bonds or bond fund? you have a bond fund. talk me through that. >> i've owned both. >> i think there's three ways to own bonds. win is just the bond outright. one through passive form, so etf or actively managed fund. i think you get to move around and add alpha potentially in these down trades. the question around a single bond versus a fund is it's about the verseification. >> as a a former bond fund manager, they don't mature.
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thaths one u of the issues there. >> they want the income. not necessarily because they want to -- >> you don't necessarily get that with a bond fund. >> thank you very much. >> you're handling that like a pro. did you move to the east coast or west coast of florida? >> just here doing a speech today. >> thanks. >> thank you. >> beautiful. big hour of power still ahead. coming up, about to talk to carl icahn about this market rally and what is he doing with his money now? business under president trump. of course, we have got to talk about that with him. plus, the president-elect made his money in real estate, so what will that industry look like under the new administration? a member of trump's economic advisory council will join us, too. and when the stock market makes people richer, do they like to take that money to the casino? much more coming up with with
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tillman here on the set. here are the sectors thask the strongest in 2016. energy, financials, industrial, materials and telecom. "power lunch" is back this two minutes. 'she value of pital? 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 valuof capital is to create, not just wealth, but things that matter. morgan stanley
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speed always wins. especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. carl icahn is going to be joining us. normally not a call in show, but if he wants to send in smoke signals, we'll do it.
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just the fact we are based in new jersey. you do it well in atlantic city. pretty well, everything else seems to be struggling. >> what is the stake of american gaming? can atlantic city be saved? does it need saving? >> i've said this before on shows. there is not a gaming revenue problem in atlantic city. it is the third largest gaming market in the united states. $2.6 billion. and there's only eight of us left. so, all of us that are left are doing extremely well. the union wages and every fee and commission you pay to everybody. when i sat and tried to figure out what was wrong, that and just clagaming in atlantic city said let me give you an example. oi do more gaming revenue in
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atlantic city than i do in las vegas. >> you do? >> yes. >> more money in. that drops in every day. gaming revenue. the cost structure is 20% higher. my unit level is 1i%. there, it's 2%. >> now, a gentleman that needs no introintroduction, but we'reg to give him one any way. you've heard that tilman was saying, about the overall market getting ahead of itself. >> it's really hard to pick the market. as far as i'm concerned, i do agree with tillman it's a bit over. ahead of itself. it's obviously very good news.
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the it's morning now in wall street, but across the country. may be a little too cube rant. i think all the things donald's doing point to a much, much better economy. >> economy aside, from a market perspecti perspective, are you then doing something about your views? shorting the overall market? selling stocks? >> well, the way i it most of the time, i'm sort of hedged. so woe keep sort of a portfolio that is hedgeded. as a result, it's hard to really say what i'm doing. >> the night of the election, you told everybody, you left the party early to go home and buy stocks. you backing away from that? >> i feel i didn't buy enough. that's how i feel about it.
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it's almost a no brainer. the odd rs in your favor tremendously. no reason everybody was saying if trump wins, everything's going to fall apart. trump was coming alongside, lower tax. going to get rid of regulatory. it's going to fall apart. a knee jerk reaction was a thousand points, totally insane. so, there, you could play the market and so i tried to and i just buy a fair amount. you know, you did it. the market sort of ran up, okay, i bought enough, not going to follow it. but i'm not a trader. you know, we sort of edge. >> could i turn you to something
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we were talking about a few moments ago with tilman. i know you've been one of his close advisers and i'm interested, you've been a sharp critic of the environmental protection agency. i'm interested in your view of the pick for the epa. the oklahoma attorney general. how involved were you in helping mr. trump make that decision. did you interview the now designate for epa and what do you think? >> the epa and i've been friends with donald and you know, i think he respects my views on stuff ling that, so, yeah, i interviewed scott p pruitt.
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first time, i wasn't sure he'd be the guy to clean that guy up. what you have to do here is being very tough. i try with companies to be you know, respectful and you try to move along with them. here, the epa is one of the worst run organizations i've ever run into. the it's completely inept in what it does and i don't mind saying it. some of the things they do are literally almost insane. they have one thing, i don't want to get the details so much, but you have a situation with the clean air act. epa, you make sure we police this. we want 10% of ethanol blended in every gallon of oil.
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they say, okay, we're going to make refineries. in the machinery. for some reason, unknown to anyone, they decide that the obligated party, the party that must guarantee this is blended are the refineries. now, i own a refinery. but i understand the business quite well. st completely insane because it's going to force three or more refineries into bankruptcy. if you don't clean this up right away. if you move this into 2017, which this epa could have done, i just want to finish because we
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can't nobody will buy our blended gasoline, so we can't blend. number one, two, it's impossible to blend the amount they want. he gets it and understands it and he's been a very strong opponent of other views concerning the epa and how crazy some of their rules are. so, i'm very happy with him after meeting with him three, four times. >> carl has a question as well. >> carl, first of all, people don't realize that carl is just not a trader. he owns many operating businesses. matter of fact, he has a successful casino in atlantic city, the tropicana. what we were talking about the other night is it's not just the epa new secretary. it's all the cabinet positions. and the deregulation that we were talking about for our businesses and how it's going to help capitalism and it's going
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to help businesses expand because we're not going to have all this regulation on us. don't you just see so much expanding in the next few years? at least the next four as he's our president? >> yeah, i do, tilman. i personally believe you're going to cut tax, which is great. and i talked to steve about that. you're going to have better depreciation schedules, which is great and probably repate rate the capital, which is great, so everything sounds great. but the most important thing, just absolutely change these regulatory agencies. some are better than others. but just go in and just like you do with a company that's terribly run. most of the time, here, the beautiful thing is that most of the high rer ups at these agencies would give their
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resignation, so you don't have to throw them out. so, that's the great thing. and you have to pete put people into these agencies like scott pruitt that's going to do the job and i believe and and i hope he understands you can't go with 17 the way it is because it's going to back light them. what tillman is saying and ai agree, that's not the only agency, but the reason that you want to change it's almost like a no brainer. like buying the stock that night. it makes so much sense for this country because what is happening. what's happeneded over the last eight years is companies are afraid to invest because they're afraid of what is going to happen if they invest and you have these 25-year-old kids. there's nothing wrong with them. nothing wrong with the people at epa or other agencies, you're
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afraid they're going to come in and ruin your business. i mean. >> they've run amuck. activists investors when they get involved in a company, they often want the head count to go down. and you saw what donald trump did with carrier. is there a point where actual actually -- want a company that's better run, which means fewer people? >> well, i don't agree with what you said about a lot of activists investors. at least for me. it's not that you buy a company and you want the head count coming down. you might want to get rid of a lot of the people, the top management, that buy the key to principle, got to positions they shouldn't be in, but that is not rank and file. in fact, if you get the right people in companies, i've seen,
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we hire more people because the right guys running it. is able to invest properly. especially if you get rid of these regulatory agencies and hire more people and give them better jobs. so, i don't think activists necessarily mean get rid of people. it means maybe. >> so, how -- >> the reason this is -- made up of a bunch of ceos. othered are terrible. the it's like anywhere else. they have to be made accountable. so, avoid, not going to mention which one, the board has provides over this and the company has just done worse and worse. so, why is that board not accountable? and the ceo. that's where you're going to change things in washington.
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those are no brainers. you change the people. but you don't fire the rank and file. >> look at it from the the point of view of a ceo who's operating a company. take some workers and move them offshore to a place where i can produce cheaper. how does that, in what position does that put you as a ceo or. >> the big picture is donald's should not have to do that if he
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really does the things he says he will do and i believe he will do it and i believe he believes it. he's going to go in and get rid of regulations to begin with. that will take every regulations. some, you really need. but get rid of these crazy regular laces and these guys running amuck. number one. two. lower the depreciation schedule. okay, lower the taxes. repate rate these. if you do that, if you do that, you don't have -- >> to move is not as great. >> not only not as great, you're not going to do it because you're not going to have to pay the freight. carl, i heard what your saying on oil and refining, but i want to get more specific. blen blen blends cvr refining. you own a steak in transocean.
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you may still co. are you actively buying more oil or finding energy stocks like a cvr, like a chk? >> interestingly, i know i could go into what i do in my portfolio, but i think these refining stocks didn't want to retreat because of the e p pa. and not for any good reason. i don't mean if a company, if you lose money in a company because you bought it the wrong time. it was a hurricane. people don't want to buy gasoline. but when you get some 25-year-old wonk in ann arbor telling you how to run your company, there's something wrong with the structure of the free enterprise system and this is what's been going on. but you know, you know actually, the irony here and i'll just say, if people don't like to say politically correct and that crap, but investment bankers had for no reason, to transfer wealth, because it is what that was for five years where they
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penalized the refinery and risked billions of dollars that billions goes over to the gas station. to the gas station changes like acie's or murphies. for no reason. refiners did nothing wrong and these guys did nothing right. the hope is they were going to take the profit and build more in e 25 pumps, but did nothing to buy their stock back. they didn't put the money into that, if shfs an investment banker, say you were cynical and i'm a cynical guy, you would do an immediate investigation of who knew about the epa making those rules. and who profited by it. >> you back involved with chesapeake? >> no, right now, i'll say this to you. i don't own chesapeake. i think it's known we file stuff, but you know, we really own very little of it. >> carl, what about the you mentioned, did you help actually choose pruitt?
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did you say to donald trump, yeah, that guy's a good guy? >> actually, i talked to four or five very good candidates and i would say three of those were excellent candidates and i told donald that, but after talking to scott pruitt four times maybe and actually i talked to him with steve, who i think was an excellent choice for secretary treasury, so i asked him who i respect to speak to him, also. and i get a conclusion, pruitt would be the best, but i think donald might have come to that conclusion, also. i want to make it clear. i don't choose these guys. it's donnell's decision at the end. >> are you helping to interview secretary of state? >> not going to go into anything that hasn't been decided. i strongly back steve. i strongly back wilbur ross, but
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that doesn't mean donald doesn't make the final decision. he was elected. not me. that's his job. >> but carl, you've watched this happen for many elections. don't you think he's done an unbelievab unbelieve job with the cabinet? >> i think it's very good. i think the people he's picking are excellent. >> 100%. >> how would you advise the president-elect to deal with conflicts of interest either in his real estate business? how would you -- has he asked you about that? >> you know something, you're over my pay grade here. i know what i know. i hope to sort of run companies, at least get the right people. but companies how to find the unique reasons to buy stocks, so when there's a no wran brainer, i've dope that. i'm not going to get into -- >> carl, let me answer that for you. okay.
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i believe that when you start talking about somebody staying at one of his hotels or doing this, it's little dollars. donald trump is not going to do anything over somebody booking a christmas party or booking a stay, a country in one of his hotel, okay? those are the conflicts of interest that the media's talking about and it's so immaterial. >> i agree with you. immaterial. i don't, you may disagree with me, but i was the one that spoke about how ridiculous it is that you get a tape, sit in some station wagon somewhere ten years ago about liking women or something and now, elected president because of that. look at all our presidents. >> i pretty much agree because i think -- >> it's absurd. >> i think it's good to have experienced business people and if one of the, in government. because they've done something. and if you make a -- if you make
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it harder because you get so precious over conflict of interest, that life is about conflicts of interest. >> don't think that the trump organization is naive. >> it's absurd to say you can't keep a hotel here or there. look, if it was a company, a big company and he was giving them contracts, but he's not going to do that. he's a very, very bright guy and completely committed to really turning this country around. look, i would be, too and i am. but donald really has unbelieve bable energy in the way he did that campaign. i tell you, i was really impressed. >> i wonder if you happen to know, president-elect gave an interview to matt lauer yesterday and the way he talked about president obama, it sounded like he's talking to him frequently. like it wasn't just that one day where he went to visit.
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do you know, is he having ongoing conversations with with president obama? >> yeah, look, i'm not privy to that. i think just listening to him, he disagrees with a lot of the obama manifesto. and as far as i'm concerned, you've got to decide which way this country is going. are we going socialism or not. i don't personally think socialism works. and this is the way we're going. it's like 1824. we were going to -- quincy adams came along and saved the country. we've been lucky every period from jornl washington on. we got the right leaders to change the direction of this country. and look, under obama, obama's not a bad person. but we were going toward a socialistic society. which absolutely doesn't work. >> when you hire regulators, their job is to regulate.
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if they don't, they have no job, so you've got to do it. i feel like we need an eagle on our shoulders to show america now. it is the holiday season, so can you give us a little present or twosome what are the one or two last stocks that you added your position to or bought new? >> you know, it's hard for me to tell you that because -- >> just say it. it's easy. >> no, it's not. >> carl, don't put up with him. let me tell you why i can't. because i'm on the boards of a lot of companies. you're not allowed to talk when you're on the board of what you're doing. >> just random stock. >> well, i'm thinking of a random companies that are not on board as -- >> how about an industry. >> it's really hard. well, i'll tell you an industry that i don't like and i'm very involved with, so it's sort of ironic. i don't like what in other words, what i think they're overpriced are competitors of
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mine and pep boys because i pick that the automobile distributors, the days of the automobile distributor per se are are going to come to an end of getting 27 times earnings for an auto zone or o'reilly because you have a couple of things happening. you're going to get a lot of things that you sell are imported and two, you have amazon coming, so, just saying -- >> those are names that you may not like enough that you might be betting against. just a fair way to say it? >> i am saying that you ask me something i like, can't talk about things i like too much, so just saying i'm not telling you if i'll short them next week, but if you want an industry,
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it's a no brainer. >> carl icahn, always a pleasure to have you on. thank you very much. we talked a lot. happy poll lholidays to your an family. >> need a cocktail after that. that was a wide ranging conversation. >> thes a run, interesting character. >> here's the thing about regulation. i'll say that the people will say and there's first off, you need regulation. can't just let people run amuck. >> i'm not convinced. i'm against stoplights. >> yellow means speed up. >> most regulation doesn't achieve half of what it's -- sfwl just playing devil's advocate. here's the thing. what people say is okay, of course, billionaire investors like carl icahn and tilman, they don't want regulation because it hurts their profitability and you're just complaining.
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>> that is not true. >> you hear that argument. >> yp, but it's untrue. i just like capitalism. don't overregulate and that's, don't be silly. happens in the next four years. >> the air in america is better than it was 40 years ago. the waters are better than they were 40 years ago. >> thank god for the environmentalists. >> exactly. >> for the environmentalists and richard nixon, who created the environmental protection agency. under his watch. >> i give you that, but don't you think the people who run the companies that pollute want to live in a country without bad pollution? the reason why london is no longer covered by soot is because of advances in technology. >> if they were not subject to laws and fines, they would be less restrained. >> you want to raise your kid in a really polluted land? obviously not. >> michelle, you grew up in new hampshire. look at the hudson river.
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you grew up on the water in new hampshire. you could walk across it 40 years ago it was o polluteded. >> companies put into the rivers including a company that formerly opens b cnbc. >> what ryu going to do with the barrel of grease. >> back to the latest on the trump transition. he's expected to name cke restaurant ceo as labor secretary. let's get some reaction from someone who's in trump's inner circle. howard is part of trump's economic advisory commission. >> i've been listening to the interview with carl. who i had dinner with the other night. we're both in line with what donald wants to do. >> tell me about pudzner.
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>> well. >> he's a business man. so i think that he's probably a very good pick. i don't know him personally, i have little knowledge of that business through ownership of a small franchise company, nathan's, hot dog company. i think he's probably a good pick for it. i trust donald and his judgment on these things. i think he's put together a great group. although prior to coming on the air, the studio has cnn on. watching it, they were basically going through every pick and saying why they didn't like them. so i think you know, very unfair, but typical liberal media is continuing its march against donald trump by canning
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every one of his picks. >> howard. i don't think people realize how close you are to donald trump and having you around him and carl around him and giving him advice, people don't realize you're not just a real estate guy. you've been making money with carl in deals for 30 years and know so much about so many different businesses and understand capitalism as well as anybody. you know these picks that he's making to lead all the economic areas of his administration are the right decision. don't you just see a next great four or five years? eight years maybe? >> i do. i'm hope iing for eight years. but let's do the first four. i will tell you i'm very bullish. i'm very bullish in the industries i'm in. i think if you look at the real estate industry, by the time the tax cuts come into play, we're going to be in a situation after that, where people have more money in their pocket to spend and one of the biggest assets
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that people spend money on during their lives is real estate. their own homes. investments in real estate. so, i'm very bullish as to what's happening. as far as his picks are concerned, steven, wilbur ross, fantastic picks along with the other ones. i don't know all of them well or a couple of them, i don't know at all, but i would say that everyone he's picked from what i've read and heard, i couldn't think of someone doing a better job. he's very much, people have always asked me, does carl, excuse me, does donlgd listen to you. yes, he listens. that doesn't mean he'll do what you say. but he's a thoughtful listener and he'll ask a lot of people questions then think b about it and make h his own decision. >> i don't know whether you've been across the table from him in a negotiation, but certainly, you would know by reputation, what's he like as a negotiator.
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>> the real estate business in general is one big negotiation. >> that's not nature. real estate guys don't have a fight and say it's my way or no way. if they did that, they'd never have deals. so, real estate guys, and most businessmen, are negotiators. he's not against trade or free trade. what he wants is fair trade agreements and i think we'll end up with fair trade agreements, so as i said, i'm very bullish for the next four to eight years. i think and new factories to be built and i can't think of any
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better way to get the economy rolling along with infrastructure spending. >> all right, howard, thanks so much for joining us. appreciate it. >> my pleasure. >> power will be back in two with a lot more.
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. welcome back. we've got our eyes onicasy know stocks. those stocks down by about 10% just off their session lows so far. right now, mgm down by 4 or 5%. this on a report from the south china morning post saying that the monetary authority in mccow is looking perhaps this weekend to curb the amount of money that people can take out of atm machines within that particular region. so, that's having the adverse effect on the casino stocks right now, especially those that are perhaps more levered to that gaming industry, so that's the reason why those stocks are moving again. it is not official as of yet and according to the south china morning post, nobody at the monetary authority has commented on the record about it, still, that's what's moving the stocks
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and why those are moving the way they are. >> as far as independent newspapers can exist, the south china post is one of the more representable ones. >> what do you think? >> if you turned off my atm machines and mikasy know, i would have a bad day. when you start talking about cutting what you could take out of an atm machine and the billions of dollars even for that weekend for a gamble, you are going to hurt their business and that's probably where the -- >> flip side, isn't it good for you and other vegas operators? we talked about how more chy no chinese are coming to las vegas. if you're a big gambler in china, maybe you're like, i don't want to go to mccow. having gambled in asia, it's a lot more money. >> yes, but you're wrong. the problem, the person that's coming to vegas, okay, r isn't getting his money out of an atm machine. >> he's got a suitcase.
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>> credit. >> playing off of credit. this is the small gambler. it adds up at the end of the day. >> we've had on analysts before and they have signed a lower multiple because of uncertainty of regulation in china. you can just never count on it. >> if you looked at a 12 month period of their stock, sands and wen and move up and down just because of the news of what the government might do, you're talking about regulation. >> that's capital. >> they could take it away from you tomorrow and what are you going to do? >> you have no exposure there. >> i have a bunch of restaurants in china. but it's still a small part of my business. >> guys, can i make one more point. the reason why this is happening is a broader macro issue. we know that the chinese government has been trying to put into place capital controls to keep their currency from leaving the jurisdiction and by putting these restrictions on
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atm withdrawal, the it's viewed perhaps as a move to make sure their currency stays in china and doesn't flee the country. >> wow, dom, if the situation is so bad that with 3 trillion in reserve, you got to tell the little guy he to tell the littl he can't take that much money out the atm the situation in china is way worse than people were talking about. >> those reserve levels have been drawing down quite a bit. >> that's the reason. >> we know that is why or are we guessing that could be why? >> there is speculation. remember nobody has commented on the record about this yet. when they do kind of say if this does go into effect and they make a reason for it it will be interesting to see whether or not they tie that to the capital control aspect. >> somebody call. it's 3:00 in the morning. >> tune in tonight to mad money because jim murren will sit down
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with jim cramer. sue herera has a news alert. >> this concerns at&t. at&t's vice chairman who had a key role in bringing the iphone to the market will retire at the end of the year. ceo of at&t mexico will take his place and responsibilities as head of the international and business operations. so at&t's vice chairman is retiring at the end of the year. we'll see you on the other side of a quick break.
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cnbc contributor larry kudlow joins us now. he just met with mike pence. what did you talk about? >> the economy. we talked about the trump stock market rally. >> and i assume he is very happy about that as you must be. let's talk a little bit more about taxes. we just had on carl ikahn. i asked him about how he would feel basically if a company he owned became untargeted by a trump administration about moving jobs overseas. his answer was interesting. i would like to get your response to it. the answer was companies will not need to do it if the kinds of tax and regulatory reforms that the trump-elect administration has talked about
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actually become law. >> i think he is exactly right. i think what mr. trump is doing is saying don't jump ship now because we are going to have such substantial business tax reform you won't need to jump ship between repatriation and you won't need to jump ship so i want you to stay with me right now at the beginning until we can get that legislation through. >> i love having you on cnbc and i love your being a contributor. have you been offered a job in this administration? are you going to be leaving us? >> michelle, my love. i can't comment on it. there is nothing definitive. i love cnbc. i love it. i love you, i love tyler. i love the whole news room. i have for over 20 years. >> you would be perfect at the national economic advisers. there are all kinds of positions
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that you would be perfect for. are you talking about that? >> then i would have to miss my 2:00 with you. i just would hate to do that. >> you would like it, wouldn't you like it? >> jared burn stein, the economic adviser to vice president joe biden, you would be perfect in that role, too. i can think of 100 things you can do. >> you are awfully nice. he made his way on the kudlow report. i'm very dplad to launch all of my liberal friends. the whole lot of them. all i can say is i love cnbc. i'm working hard to help on the trump tax reform and some other things. we'll see what the future brings. i don't want to make any statements right now. it would be the wrong thing. >> we appreciate your time. always great to see you. >> appreciate it.
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>> thank you for sticking around for 120 minutes. >> what can you tell us about the next -- lane kifen? >> had dinner with him here in new york. great guy. >> "closing bell" starts right now. welcome to "closing bell." i'm kelly evans at the new york stock exchange. >> that was a very cryptic no comment from larry kudlow just now. it is one month since election day. we are this much closer to dow 20,000. stocks are higher again. i was just talking to a trader on the floor. we all agree stock prices will never go down again. >> that


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