tv Fast Money Halftime Report CNBC November 30, 2016 12:00pm-1:01pm EST
truly separate them, and, you are right, trump has been known to surprise us. we will await that press conference. >> huge gains in oil related stocks. now let's get over to headquarters and "the half." >> thanks so much. i'm scott wapner. yes, the trump rally stocks hitting another new record today. with the dow and the s&p now on pace for their best month since march. even as some question just how long the good times can last, some sectors appear primed to continue their post-election run. with us for the hour today, josh brown, steve weiss, sarat, the brothers najarian, and the -- chief investment officer at dell tech international group. also joining us from washington d.c. is michael far, the president of far miller and
washington. let's begin today with the markets, financials, and energy leading the way. john najarian, this just maybe paused for a day or two, and you pick back up where you left off. >> it's such a broad rally too, judge. it's not just the one sector. of course, we're being driven by energy today. we've also got financials acting extremely well, and when we had the election and the day after and we were talking about that's why we've got a very broad based rally, and now you've got some of the rails really kicking in here too. >> but, pete, i asked you yesterday whether you could keep buying some of these sectors that had run so much since the election, and you said yes, and you said the financials were the place to look and lo and behold, we have that as one of the leadership groups today. >> you look across the
financials. i mean, if we look at anybody who i think is the biggest winner out of this whole thing, when you consider the election and what the possibilities are, especially now with some of the appointments that are being put out there, scott, i think that's a key as well. i think the favorable thought process of what the banks will be able to do, the regulations, what happens with dodd frank, even if it's not completely removed, whatever, it's going to be a better environment. and it's going to be a better back drop in terms of the economy. >> on that note, let's listen to steve mnunchin. here's what he said this morning on this very network on squawk. he is the pick for treasury. >> we want to strip back parts of dodd frank that prevent banks from lending, and that will be the number one priority on the regulatory side. >> that's what he is talking about. >> regulatory, and they also got into -- >> there's a rally today, right? >> absolutely. he talked about the simplifying everything essentially is what they were talking about. whether it was taxes or going over to the regulatory side. it was all about what we could do as a country and how could we
do a better job as a business side of our country. that's what really -- >> take that even broader, and here's what has me really excited. the banks i agree. b of a and schwab, went back into it. luk, which chris was talking to me about. under followed. great, great story. here's what's got me really excited. the banks haven't been able to lend. i'm with hedge funds all day long. one of the biggest strategies that's grown has come into existence the way the bdc, business development corporation, are the strategies direct lending. they lend money to law firms, small businesses at 24%. put it in perspective, right? the discount rate now is 50 basis points. small businesses that -- can borrow at reasonable rates are prime being 3.5%. can you imagine the growth that they will add to grow their businesses if they can borrow reasonable interest rates. that's what he is talking about.
we haven't had that. we're going from eight years of no, no, no to now at least four years of let's go. it's by business people that have no political futures, that just want to see the economy -- >> michael far, we've gotten from the election three weeks of playing off of weiss's point to yes, yes, yes. the only move you have right now is to buy stocks. are we too euphoric about what's happened since election day? >> i think we are. i think that we're believing that everything is going to be wonderful and that this crowd who sits in this building behind me are suddenly going to become functional and somehow be able to get stuff done. whatever we all really want to see and all of the promises sound great, they're probably still a year away, and we're facing some certain short-term headwinds. the other thing that i heard that steve just said was, you know, what we're talking about too is with all of the banks, lending, and infrastructure spending and everything else, it's a lot more debt. the debt is already at a record high, and we're going to take on
a lot more. we had a financial crisis where we had a whole lot of consumer debt. that was transferred on to the government's balance sheet, and now the government balance sheet -- government balance sheet is going to expand, and now maybe consumer and business debt is going to expand. i think that you have got to be cautious, and you have got to know that if the rules to buy low and sell high, this is not low. >> look, even, you know, jp morgan out with a note today. our buddy there. he comes on the show. he says, yeah, the prospects for expansionary fiscal policies and the market prospects are better. however, you still have an uncertain environment going forward. you don't know truly what the agenda is going to hold and how it's fully going to be passed, do with he? >> we don't. scott, the idea here -- >> are we getting ahead of ourselves? >> we're probably getting a little hid of us in the markets, but this is such a pro-growth environment. so different from sitting here a year ago when we were thinking, you know, rates are dropping. oh, my god, we're going to deflationary cycle. we have positive news for once
coming out of washington. let's see if it happens. the markets are discounting. they're looking a year ahead. i don't agree with mark far. we are way ahead of each other. >> cramer made the point this morning, if the market is overlooking things that it normally wouldn't overlook, you don't know what trade policies would be. >> i don't want to be polyanish? i may have come off that way. michael is right. it will be difficult to do. right now the economy was moving. before trump got elected, right? the gdp that we saw, the wage inflation that we saw, didn't happen when trump got elected. that was already done. they just reported it. >> i think the market has run-ins despite valuations. >> judge, you also have to remember that we now also have had a big jump in interest rates. we've had a big jump in the dollar. our regression analysis in house shows that when you see this much of a climb in the dollar, it will trim as much as 90 basis
points off a prospective gdp in the first quarter. we're going to see a headwind there, and now we have higher oil prices that the consumer is going to face. those are headwinds today that we're ignoring and still -- >> michael, we're also anticipating higher growth which makes the very issue that you mention not as traumatic as they were a year ago. >> without a hitch. i mean, that these guys are going to get this all done in some sort of perfect way, just doesn't make any sense. let's see them happen. let's see the whites of their eyes before we let this thing get much more expensive. >> we haven't even heard from you from election day, and i'm wondering if your thesis has now
entirely changed on the prospects of higher growth, lower regulation. >> look, i think when we last. >> the other big call is long financials. that was in the prospect of changes. we didn't know the outcome. it was the process of a steepening yield curve, and that's a lot of what we're seeing already. we're seeing a steepening yield curve, and that helps bank margins. you asked the question of whether the market has gone too far too fast. i don't think it's gone too far. the reality is that against this back drop of what would we're seeing in the outcome of the election is economic growth has been improving. the numbers have been getting better. the adp numbers this morning were vastly improved from what we've seen previously. the economy is improving. we haven't gone too far. has it been too fast? probably yes. it's been a big pull forward in a lot of areas. in particular in interest rate markets because we're seeing
inflation rise anyway. what's more interesting isn't too far too fast, but, rather, which sectors have been laggards, and right now we have seen sectors such aztec be a huge laggard. if we're talking about economic growth improving, it has to be driven bip productivity growth and that has to be from the tech sector. there are sectors that haven't gone far enough and have been too slow to react. >>. >> have a nice week, have a nice three weeks in this case. it's the obvious thing. everybody suffers from the gambler's fallacy. it's black, it's black, it's black. got to be red next time. doesn't work that way. professionals buy these types of break-outs. they know there's a deeper message in the market beyond just what did the stocks do last week? the big picture take-away here for anyone saying too far too fast, i'll share something with you that you might not be aware
of. the top four performing sectors in the s&p this year, industrials, basic materials, energy, and financials all four of them were negative in 2015. all four of them to a large extent were making up for lost time in these groups. this is not the third year in a three-year run for most of these names. especially in small caps. >> too far too fast? what planet are we on? >> 12 times. goldman 13 times. >> regionals 1.3 times book. that's not -- that's the argument i have with michael far. he says, you know, you want to buy low. they're still low. they've moved, but they're still low. i think that's the point. >> you have to pay attention to valuations. things can still sort of just diverge from reality and we can start to see we're not there yet. i mean, we have to know that this is not being driven by
fundamentals. you look at the valuations of where they trade. many of them give you an incredible yield. the economy picks up, if they're able to manage to be able to do anything with the new administration, isn't that positive? >> it's a positive, but you did it again. >> no, michael. no. >> if the administration is able to accomplish what they've put out, even without that, how about the move in the financials? >> the move in the financials has been significant, and you have to pay attention. i'm going to continue to maintain my position in the financials. i was a big fan of the financials going back in the springtime, and i was kousht cyclical there. i follow my discipline, and i trim when i need to. if the administration does it,
if interest rates continue to rise, if the curve gets steeper, yeah. the financials look good, and i wouldn't sell them fast. trends can go on a lot longer than anybody thinks. it throws ointment in the idea that this is just a trumpian rally. >> it would be easy to believe -- it would be up year-to-date. is that not a fact? michael far. >> i'm sorry?
is it not a what? >> it's a fact, right? i mean, it is based. on a view that the economy has fundamentally improved. >> the economy has fundamentally improved. it's been terrific. we have a federal reserve that wants us to somehow believe that, you know, a capitalism is fine for us on the up side and that somehow central planning can save us from all woes on the down side. i mean, for the sort of cash that we've seen, the easy monetary policy, we are seeing good things happen. we're seeing borrowing. we're seeing a lot of good things and investments across a lot of different businesses. we're still pricing in a very, very rosy future, and when i see that happen, all the kauks lights come on.
>> that is absolutely critical for the country. >> okay. so under that scenario, if you believe it, which the bulls have to if they've been buying into this market, what do you buy? >> i think you still stay with the financials. you buy them on dipped and go back to regional banks. they want this emdo grow. there's a lot of -- >> what about the tech? where are the techs that we need a 4% growth environment? >> i don't know why you were talking about that productivity has got to go up. we're experiencing peak profit margins. peak productivity. it wasn't that long ago where the nay sayers, and michael may have been one of them, saying profit margins have peaked. that's the negative of the market. they've got to come down.
>> if you take a three-year average of productivity in the u.s., there's only one period in the last six years that's been low, and that's starting in the 1980s. >> what measure? broad measure? just on tech? >> on the government reported productivity numbers. if we look, that's nonfarm roll activity. we think that we're going to get to 3% to 4% economic growth. it's no longer accounting from cheap liquidity conditions. that was the last 15 years. we're shifting out of that regime. for the companies to achieve productivity growth they have to invest in productive assets. productive assets tend to be technology-focused. it's technology to answer your questions, scott. it's technology and capital goods. there are two sectors that are going to get the u.s. economy to 3% to 4% growth, and at two sectors, quite frankly, have underperformed since the election. >> we're talking about --
>> what's happening, scott, is people were using it for source of funds like using consumer staples. people are using tech stocks like microsoft, cisco as dividend substitutions which i think was wrong, and you're right. i think we do go back and buy these stocks like the googles, microsofts. >> i want to say one thing on this, and i think it's really important. if, in fact, you are getting fiscal stimulus, this would be the first time in 50 years we've gotten it outside of a recession. when i say professionals look at break-outs like what we are seeing in some of the sectors and you look to knee jerk fade them, there's a profound message being sent that people with capital not day traders, people with serious amounts of capital are willing to commit and buy into this idea that there is going to be fiscal stimulus,
even if it's a year away and we spend a few quarters talking about it, and i think that's the biggest point that you could make about the types of stocks, the septemberors, the areas much the market that are now leading, and it's not facebook and amazon dragging us over the goal line going to year end. i think it's a nice change of pace. we're not talking about buy backs. we're not obsessing over what yellen had for lurchl. this is a new story. i think investors need to just consider, consider, if some of the things work out. not everything. even if it takes a little while. >> i heard you chuckling. >> i think it's right. i think we intent a lot of time thinking about what yellen has for lunch. i agree completely. if these policies work out and when they come to pass, could we see 3% to 4% growth for a lot of years? yes. could we see our debt explode? yes. i just think my caution is when the price gets too distanced from those fundamentals that you do have to be careful, but i agree with saarat and b.k. i think they're right. >> what we're going to see also
is mnunchin, the first words out of his mouth were about the tax and that he was going to implement what trump has talked about. that repatriation of trillions of dollars is going to be huge, and that is a significant driver going forward. >> exactly. >> you are still trusting the government, you know, who said that they were going to have shovel-ready projects last time. then you end up still at the -- it's so appropriate back here today because that's the way it feels. >> to many, michael, the fog is dissipating, and there seems to be more clarity, and certainly you can see that in the result of the major averages since election day. >> certainly. >> yep. it's good having you here. michael, thanks so much. >> thank you. >> michael far. here's what else is coming up on the halftime reported. >> next up, what the meeting in vienna means from the oil stocks. we're talking exxon, chevron,
conco, and more with the number one rated analyst in the sector. plus, our call of the day may indicate a big swing for the miners. before the break, the world in a 3% plus environment. energy fairs the best. the s&p averages in the 5.3% range. gold underperforms. as do treasuries and the dollar. for more on this, go to cnbc.com/pro. more halftime in two minutes. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim. the global investment management businesses of prudential ♪ guyhey nicole, happening here? this is my new alert system
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>> people familiar with the matter say that takata was searching to renegotiate the terms of that deal to cut the overall price by around $1 billion and that valeat refused to agree to those terms. i'm also told the deal was nearly done. that the documents were nearly done. when takata came back to valeant about cutting the price. the initial deal called for takata to make a cash payment up front along with agreeing to a sizable royalty valeant would have gotten to the sale. takata wanted to cut the royalty payment in half, according to people familiar with that situation. i'm also told that valeant didn't want to sell in the first place because it's a core asset, but that the deal would have allowed the company to immediately pay 80% of its bank debt and get that lucrative
royalty i mentioned. one of the voices said to be against such a deal was john paulson, whose firm is valeat's second largest shareholder. mr. paulson was said to argue that a deal would not only be dilutive to shareholders and that it could hurt valeant's future growth prospects. one reason they may have come back as well is that the fact that the yen has weakened substantially around 9% since the election. i'm also told that the deal now is all but dead. the market doesn't like the news. if you are an investor in valeant, i don't know if anyone on the desk had taken a stab at the stock, if it seems to be attractive knowing you are trying to sell assets -- >> this is the most sellable. >> here's the problem. >> this is the most sellable asset they. >> i don't know if that's -- they don't want to sell that. >> they say that's like the new core asset. this is like the one that's most separatable, right, from that standpoint. makes it really, really tough to say, all right, there's going to be another asset sale next week, next month, and you really have to have asset sales here at the
end of the day. >> they want to sell noncore. from what i understand, as i mentioned in the report, that paulson, who is the second largest shareholder behind p pershing was against it because he believed that st alix is valuable, and it's a still degreer. why get rid of something that can still grow? you can pay down the debt load. >> that's the only reason in my mind. >> $30 billion in debt, and you have to sell what you can. otherwise, you have what -- it's something that's terminal. it's not up to them what they sell. it's up to them what they can -- >> the buyers what they buy. >> right. >> you still have as you just heard, you still have an interesting argument internally. >> what i -- as to whether they should make those kind of sales or not. >> here's where i think we have. what i think we have is a deappreciating yen that made the deals much more expensive to them, so the purchase price was too high, and i have after the deal fell apart, spin from the
second largest shareholder who now sees the stock price down another 10%. his markdown another 10% from what's been a ridiculously poor investment. >> and, judge, who is the lender? who is going to finance this deal? i mean, you know, when you see something like this falling apart, part of it is exactly what steve talked about, and that is -- >> it was cash where. >> do they have -- >> what's the royalty? >> -- available cash given the 9% slide? do they have that extra 10%, let's call it, or whatever, to cover that? in other words, i don't think they do, and they went to lenders, and lenders, like, hands off this one. >> energy stocks are surgerying on the reported opec agreement to cut production with all well in the green. for more on what's next let's bring in doug. he as you may know is the top rated energy analyst on wall street. joins us now on the phone. doug, welcome. >> hi, everybody. >> surprised by this news? >> well, somewhat.
it was a little bit better than expected. i mean, today was judgment day for opec, and it looks like they forged a credible agreement, and to the delight of energy investors around the world, it appeared that the plan is going to involve both opec and non-opec. opec is talking about lowering supply by 1.2 million barrels a day. non-opec by 600. the production response at 1.8 million barrels a day on the surface appears to be a positive outcome. simultaneously we have to remember that opec compliance has historically only been around 60% during the past five or six production cuts, and nonopec participation has been pretty uneven too. we can't automatically assume that almost 2 million barrels a day of physical oilupply will exit the market. at the same time saudi arabia can be count theed on to do what they say they're going to do. that's usually the indicate for kuwait and qatar and the uae as well. it's important to remember that these countries are around two-thirds of opec's production response. while we expect that opec to cut
production, today's outcome exceeded our expectation, and the bias for our revision to our oil price forecast -- for on 2018 is positive. it's a positive outcome for the oil markets, and he with also think the outlook for energy stocks in 2017 too. >> i mean, that's frankly most importantly of what i wanted to get to next is your outlook for the stocks that you have, you know, continually picked on this program and ones frankly that have done quite well. you stay with what's worked or do you look to trim from some gains in names that you are among your faves. shell is up 27%. >> we're unrepent antley bullish here. investor portfolios in our views should be overweight energy, and this includes oil, and full service stocks. it's not been to overthink it. with the oil price rising and performance will probably be pretty good, and so far so good. i mean, energy has been the best performing grun in s&p 500.
nevertheless, we're still overweight. we think that the same ingredients that we've outlined are still present. mainly we think that brent will exit next year at 60, and with lower cost there's leverage here. the bill oil earnings will double in 2017. we're still overweight. the big oil is we still like shell, chevron, and conoco phillips. we get big 5% dividend yields too. >> she's obviously remaining bullish. look, anadarko, highest level since november 15. baker hughes, highest since june 15. chevron, devin, eog, halliburton, marathon, murphy, transocean. i mean, they've ripped. >> absolutely. >> the lesson is you have -- >> some of the gains are absurd. some of the stocks i mentioned at the end devin, marathon, murphy and -- >> there are beta thames really going crazy today, scott. >> you don't sell on some of this news? >> i took off marathon oil based
on the move that it made today, and the new 52-week high, and got a little lucky there because it could have gone either way. >> i know josh and i for a long time were -- you might still be in the xle. i was in the xle, and i have been in a lot of the big names. >> i talked about conoco about to break out. boom. here it is. >> how about the pipeline moves, though? look at kinder morgan. >> some of the areas in the marketplace are i don't think are getting covered very well. >> petroleum 26%, is judge. apache, we talked about it last week because of that wolf camp down in the permean basin. it was $1 trillion. at last week's prices for crude oil. that's $1.1 trillion now. >> when we talk about the moves these stocks have made and we talk about this one is up 50%, this one is up 30%, this all has
to be thought about in the context of when you bought them, what was going on at the time? what were these stocks -- >> if i bought -- okay, final. you want to play that game. marathon today if i bought it yesterday, it's up 20%. what do i do with it? >> it's a couple of years. it's a couple of years. >> right. that's my point. you did that in a few hours. >> that was the opportunity to buy to look at them now and have no exposure. got to be heart breaking. if you have a stock so that's up 20% a day, there's nothing wrong with taking something. >> that's exactly what happened with the financials when energy was down, finances were down. there was a correlation going down. nobody could see forward for six months to a year. oil was going to $20. nobody wanted -- >> rates were going to be trending towards zero. >> the fear there was balance sheets on all these oil companies. now you have massive short covering. maybe the balance sheets get better.
i gra he with you. i think you take the profits of some of these off. >> no matter what you think of energy, keep going. the negative stories were seeping out, and so it was short covering the commodity. that's why the commodity -- >> you still have to be complying here. the stocks keep going. i'm not playing. my heart isn't really broken because i'm in the financials. that's been my energy play essentially in terms of the beta. keep going. there's always a pullback. >> we prefer energy to the other materials. we were buying energy back in january. we went back to neutral in july. some of the base metal, some of the bulk commodity names have just run so far on chinese stimulus that ultimately early
next year it will really start to fade. in the optical of the stimulus package right now, it will fade in q1 next year. on top of that you have monetary policy tightening in the u.s. u.s. dollar liquidity coming out of the rest of the world. that's just a clean energy commodity. >> trading is driving up copper prices. >> and we're actually -- we're short at the moment on the back of that speculation. it's drifb. we know that this stimulus is going to be -- we know the u.s. dollar liquidity is out. that's going to impact all commodities, including oil, but oil, as we know, the supply fundamentals are clear and a lot better than they were yesterday. >> speaking of this conversation, one analyst is making a pretty big call today on a material stock on the top performer in that space, in fact. it's the call of the day next. plus, the options market is signaling a break-out for a big retail name. we will discuss that as well when "the half" comes back in two.
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saying a small increase in interest rates at this time is appropriate. she sees the rate hike as a "prudent step" to take. the reason is that it is rate increase will help prolong the expansion waiting too long, she says, could risk a recession as well as other problems in the economy if the fed does not hike a pace here. she just makes a gradual path of rate hikes and the prospects for changes in the fiscal policy. she says they have likely increased including infrastructure spending, tax code, immigration and trade policy. the changes are uncertain at this point, but we'll assess them as they come in. meanwhile, we had an exclusive interview with fed president robert -- kaplan votes next year. the fed policy, he says, will adjust if fiscal policy changes. scott, what i hear all these people saying is that if they do more on the fiscal side, we'll need to do more on the fed side in terms of raising rates. >> i think, steve, maybe the
biggest issue now is not what happens in december, it's frankly if the fed is forced to move faster than the market is ready for. you tried to ask kaplan that question. he wasn't going there for obvious reasons. what do you make of that whole debate as to whether we're giving enough credence to the fact that the fed could surprise us in ways we haven't thought of? >> well, i think it's interesting. that's certainly true, but i also think it's interesting to see rates rise and see stocks rise as well. what i'm more interested in, though, is seeing the najarian brothers become congressional handicappers because that's the new game. you got to handicap what trump is going to propose. then you got to make -- got to detail the understanding of the dynamic inside the congress. you got your tea party republicans. you got your democrats. you got your mainstream establishment republicans. then you got to figure out what goes in and what can come out. what's the total value of that? then how the fed is going to react. i don't envy the najarians or
the fed the new task. >> the fed has often spoken about, steve, the risk of speculation rrk the risk of asset bubbles. they're watching a stock market that has ripped since election day, and if that continues regardless of whether policy we even get to the point where policy is passed. that's a ways off still. we know that. are they going to be forced to do something faster than they would like? >> yes. scott, you're really smart, and it's a real pain, i got to tell you. it's really tough because you're exactly -- >> you want to talk to pete instead? >> i would. it would be easier. >> i tell you what, we're going at it. >> here's the deal. scott is 1 00% right. nothing has happened. yet, rates have gone up. the dollar has appreciated. stocks have gone up, and the net -- the -- what's underneath that is some sense of something that's going to happen in the
future. the fed has a big call here, and it begins as soon as the december meeting. do they change their forecast based on speculation of what the markets done already? the market has created a reality that the fed has to deal with immediately because the situation, financial conditions, have changed and the fed has to react to that. you are 1 -- 100% right, scott. i don't know how to put all of those unseshts into the hopper here and come out with a number for the fed. what i am seeing is the market seems to be looking at another june rate hike beyond the december one. you can see that getting pulled ahead towards march or april. >> steve, thank you. >> my pleasure. >> you're welcome back any time, by the way. >> thanks. appreciate it. >> steve liesman in the city. how about that? >> i don't think the market -- the market has gone up. it has ripped a little bit. >> we also got a rate hike from the market. did we not? >> the fed --
>> we haven't moved that much in the year? >> mortgage rates are up. >> the point being right now it's not a big deal. >> it's bugging me. productivity is -- >> productivity is at peak levels. we're not talking about the same thing. margins -- maybe they're not growing. they're stagnant. they are at peak levels for the last 60 years. maybe not seeing the growth, but that's because they're at the highest level they've ever been on every chart from the st. louis fed. >> profit margins are at 60 year fixed. productivity growth is not. >> productivity -- no, productivity growth has slowed. >> exactly. >> but it's at the highest levels that it's been. >> i got to jump to melissa lee who is going to tell us what's coming up on power lunch. hey, mel. >> hey there, scott. we have so much coming up. the dow and s&p, of course, hitting new record highs. what december and 2017 holds for stocks? trump's money team is taking shape. speaking to us first on cnbc tax
reform overhaul front and center. we've got one of the architects of dodd frank, of course, dodd frank parts of it could be repealed. we have barney frank coming on to elus what that all means. oil is soaring. energy, the top performing sector this year. how do play these stocks in the back of the opec deal? halftime report will be right back. see you at the top of the hour.
president-elect donald trump will meet today with manhattan attorney general in midtown. now, the new york post is reporting that the meeting between the two will focus on whether bharara keeps his position in the southern district of manhattan as the top prosecutor there. as you know, he has had great success in several high profile cases against wall street. raj is one of them. billionaire -- he is a billionaire hedge fund investor, of course. we're going to keep a close eye on this, but preet bharara will be meeting with donald trump on wednesday at trump tower. more halftime in just a minute. make healthcare more personal
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the lubricants that improved fuel economy. even technology to make engines more efficient. what company does all this? exxonmobil, that's who. we're working on all these things to make cars better and use less fuel. helping you save money and reduce emissions. and you thought we just made the gas. energy lives here. >> i see it, csx snl. >> exactly, csx. rails, judge. these things are on fire since the election. csx up 14% since the election. take a look at the calls they're buying in here. now the 38 calls out in february. they're looking for 6% more up side than where the stock was this morning. as you can see, the calls have
moved up nicely. they're into just below 80 cent range. i bought a call spread in here, judge. i could kind of mitigate some of these -- even though it's way out in february, i wanted to have less risk on the table because of this 15% run, but i still wanted to participate. i'll probably be in at about a month, maybe into the end of january next year. >> pete. >> we had huge big cap stocks recently. take a look at this chart. doesn't look nearly as good. big move john was talking about. it has made a move recently, but when you come off of the highs, we're still well below those highs. it's interesting today. somebody came out and bought the february 140 calls in a huge size. somewhere between 12,000 and 15,000. the reason it's between that is some of those trades were taken off the tape. it's still a huge trade. i like it. they're going aggressively. if they're going for the february 140, stock trading at 148, 129. this is some up side here. i jumped in the stock though,
scott. i think i might want to own this thing for the long-term. >> what's your history in home depot? had you owned it prior? >> i have been -- with options. not with the stock. >> first time you've owned the stock in a long time? >> it's the first time i might have ever owned the stock itself. >> interesting. interesting. >> we think they're going to do well in an environment. mortgage rates, yes, they've gone up. they're only slightly above the level that they were last year. house prices are moving up. that's tending to be the number one contributor. we own home depot. any other home builders. >> if people have money, they're going to spend it in their homes, right? it's their biggest asset. >> these guys at the telestrator are pointing to the fact that depot shares have come down. who is whistling? is that you, doc? >> drawn on the -- i'm just letting you know where the thing is going. >> better he whistles than dances. >> the najarians are money. if they're going after it, it's
their first time. >> you can whistle your way back to the desk, john. >> thank you. >> want to point out gold is under pressure as well. it's on pace for its worst month in three years. we'll give you that trade next. before the break, though, take a look at names hitting 52-week highs. there's tool works, textron and applied materials. amat at the bottom. for more information on that, visit cnbc.com/iq100. more "halftime" ahead. why pause a spontaneous moment? cialis for daily use treats ed and the urinary symptoms of bph.
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welcome back to "the halftime report." i'm jackie deangelis reporting from the nymex with the futures now traders. we're watching gold closely on track for the worst month since june of 2013. in fact, we're looking at more than $100 drop this month. scott nations, part of this story is the u.s. dollar. >> well, i think all of it is the u.s. dollar. people are talking about interest rates, but interest rates are still historically very low. what is the problem? it is relative rates and that is the dollar. and the fact that the ecb is still about two years away from catching up with the fed as far as monetary policy means it is going to be another tough two years for gold. >> jeff kilburg, you're watching the chart. can you give me a support level here? >> look at 1170. 1171 currently is the low. i think be mindful, gold is still above the s&p 500 year to date, up about 10%.
you see the king dollar in an overbought situation, i think this provides an opportunity for gold being an oversold opportunity to get in. use 1170, critical support area. >> all right for more futures, head to the website. we have the live show tomorrow at 1:00 p.m. meantime, there is more "halftime" coming up after the break. this is where i trade andrs. manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you. or the freedom to choose what doctor you want to see.
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i want to show you a photo from moments ago, the video of the u.s. attorney arriving at trump tower to meet with the president-elect. there he is about to go up and have that meeting. sue herera has more details on another meeting that took place at 56th and fifth yesterday. >> indeed we do. dow jones reporting that goldman sachs coo mr. cohn met with mr. trump yesterday. he's wide -- according to dow jones, perhaps he's tiring of being second and may leave the firm regardless of whether he gets a position in the trump administration. apparently goldman sachs coo gary cohn is weighing his future at goldman sachs at this point. that would open up a lot of jockeying for the second position there. >> certainly will.
we visited with gary cohn on this program a few weeks ago. interesting, sue. thanks so much. let's talk about a couple of stocks before we go. freeport-mcmoran, downgraded to a sell. the price target goes from $16, down to $10. it had a monster run. what do you do here? like the call? >> i don't buy it here, but i think this is another one of those we talked about top of the show where you got to pay attention to where it came from. yeah, they have a lot of problems, pete mentions the energy purchase that was a disaster for him, but so when it is down from 50 to 5 bucks, that's a bad drop. but now it is back to 16. i'm still not touching it here. >> sometimes smartest move you make is not making a move and that's not been shorting steel and not been shorting copper, any of those, despite the fundamentals, not being there justifies -- >> think about how much you have to get right here, have to get right the commodity price, sentiment around the sector and the geopolitical stuff. don't they have minds in
indonesia and all this stuff with strikes. >> looking at commodities right now, huge run, probably a little more to go because the chinese stimulus is still very much there, but as that starts to fade, q1 next year, monetary policy, commodities we think are in trouble. >> let's go back and valeant, why the talks between valeant and takada where the deal has broken down, they could have agreed being valeant to a price reduction on the deal as takeda wanted to. they didn't. doesn't that say it is not the fire sale that everybody sort of frames it as? yes, they need to pay down their debt but could have taken a lower price an they didn't. >> it is a signal. if they took the lower price, people for the next asset will want to go lower. right now, it is an indication
to the market, but don't know how long the timeline will be. >> isn't it an indication they're not quote/unquote desperate to sell core assets. >> mistake to rely on the judgment of this company as an ind vacation indication of anything. >> thanks, everybody. "power lunch" starts now. >> welcome to "power lunch." i'm melissa lee. a huge market move topping your menu as the trump rally reaches historic heights. stocks in unchartered territory as the dow and s&p 500 soar to new records. a business man in the white house, sending financials, transports, steel stocks, all sharply higher since election day. we're all over this historic rally straight ahead. do not lose sight of oil. crude a big driver of the market run today. opec members seeing past their differences and agreeing to cut production. right now crude oil up nearly 9%, a big move