tv Fast Money CNBC December 13, 2016 5:00pm-6:01pm EST
are trucked and shipped around the world from here. >> all right. hue grant, the monsanto ceo, appreciate you joining us this afternoon. thank you so much. >> thank you. mike, you've got a five-second thought? >> retail sales fed, and dow 20,000. >> thank you for joining us. michael santoli. that does it for "closing bell." "fast money" begins now. ♪ money money money money breaking news, america keeps getting richer in the stock market. the dow 90 points away from 20,000, more than 100 points today. what a run since the election. all the major indices closing at a new record high with the nasdaq the biggest winner up 12%. so the dow approaching 20,000 and stocks at a record. if you missed out on this rally like so many of you have and waiting for the pullback, what can you do right now? are there stocks you can put pressure money to work in? >> i think 20,000 is a big deal. people wake up and say, wait a second. here is dow 20,000, what's going on. >> it's a number that will force
people to look at the market, maybe for the first time in quite some time. so if nothing else, it gets people's eyeballs on the market. to answer your question, i still think there are sectors. and health care has been underloved for a number of different reasons, all of which make sense. but also on valuation, a lot of big cap phrma makes sense here. and i believe the technology which is under some pressure over the last couple weeks is now coming back with a vengeance and i do think there is some opportunities there, as well. >> dan, where do you fall on this? >> large cap phrma is probably a good spot. they got an initial pop right after the election and gave a lot back there. if you're looking for the yield, looking for a bit of defensiveness. there is a lot of political stuff wrapped in there, but also decent valuation. that suppospace looks interesti me. >> i'm scared of health care, pete. tell me why i shouldn't be scared of heart attack. the political winds are against it. it's been cheap for a long time.
>> you know what, i'm sort of with you. i paired myself down significantly from where i once was. >> even the big cash with the dividend yields? >> i still have merck but i agree with what guy said. i think it's technology and actually financials and technology. i like those names when you go back to the earnings, we know what they are, just reported, and i think we already have a good sense of what's coming in the next quarter because of it. so i look across the financials. yes, they have made huge runs. you can yell at me all day long about bank of america has gone up 30, 40%. i think it's cheap, jpmorgan is cheap. i was out for about a day-and-a-half, jumped right back in the next day. >> you were wringing your hands. >> i was frustrated. >> never did that. >> i think if you look at it, pete is right. financials can be overbought. but they can still be underowned. and i think that's the basis of the argument. so when you look at valuation, doesn't make sense. because everyone thinks they're overvalued. but the truth is, it's a repositioning trade. so you look for financials, energy, reits, utes.
>> don't you guys think -- when we look at the dow, at 20,000 someday very soon, you look at goldman sachs, jpmorgan, they're a huge part of the gains. the dow up 14% year-to-date. i don't think many people thought it would be here at this point in the year. let me tell you what people didn't also think. they didn't think goldman sachs would be up 70% from its 52-week lows, and jpmorgan. here's what i think -- not nearly the three decades. or the four or five. if you get sentiment so wrong -- where in january you had these stocks so much lower. they were down 20% on the year, now up 35% of the year. and 35% in a straight line since the election. to me, that's not a great risk/reward, in my opinion. i think sentiment maybe was too bad in q1, and now it's way, way overshot here. >> the problem is, why would you sell them? if we're readjusting, you have to ask the question, why was sentiment so bad? if you're readjusting to a world where you could see growth, gdp double from here, or
substantially increase higher, if you look at the market since i've been in the marketplace, i watched dow 5,000? 10, 15? and now hopefully you see -- >> discounting mechanism, steve. when you think about it, what are they discounting right now? >> they're also looking for tax policies to change, and that puts an awful lot of money into the pockets of corporations that make out up the dow. so leg in, like i've done. i bought s&p right out of the election. i didn't have to be right. but i bought more the week later. and you buy more and more on momentum. >> yeah. in terms of -- >> real quick on the financials. and i'm not pretending -- because i have not. i'll say this. i think what's happening here in financials, it's not priced to earnings that people are looking at. i think people are saying, in 2007, where were financials trading price to book and goldman sachs, for example, about two-and-a-half times price to being boo. goldman sachs, even with the run-up we've seen, i think 1.3, 1.4 times price to book. so i'm not suggesting you get back to two-and-a-half.
but if goldman sachs tangible book is $169 right now, at 1.8 times price per book, might be reasonable in a regulation-free world under trump, you're looking at a $305 stock. what people are saying is, i don't want to wait to see if it hams. i'm going to get ahead of this in case it happens. >> and if the economy is improving, look what they did last quarter. why isn't this quarter almost as good if not better. the trade revenue, the revenue itself, the beat on the earnings. i'm going year over year. when you look at earnings, mel, they have already done well and if the economy is continuing to improve, how well will they do? the steepening yield curve, the regulations may be loosened into 2017. there is a bit of a tailwind. so to guy's point, whether looking at the p/e ratio or the price to book, however you want to look at this right now. i still think there is up side potential. >> is there something to this notion that people are underinvested. maybe a lot of money sitting in bond funds and that will come out. and as big milestones like dow 20,000 hit, people start looking
at the newspaper, front page. >> why have people continued to buy the financials? why do they keep buying them? because they're underowned. so nobody wants to pay. no one wants to buy. doesn't matter whether it's a valuation play, repositioning play. when you look at the chart on xlf, nobody feels comfortable about buying it. so they rotate out of that and buy the utilities. or the reits. the bond proxies. they rotate out of bonds into equities where we're probably still in the fourth or fifth inning. >> money coming out for bond funds? do you think that's happening? >> absolutely happening. we had greg davis on last night. and i loved what -- his work. i think he's brilliant. one of the things he said, you're not seeing a panic move -- shouldn't be panicking, not seeing a panic move and i would push back and say in a month period of time, we saw ten-year yields go from 1.7% the night of the election and now north of 2.5%. that is a huge move in a short period of time. so you can say it's not panicked
or something going on in a meaningful way. i think the money coming out of there is finding its way into the equity market. >> so in the precipice of dow 20,000, pete, what did you do today? >> i actually added to some financials. i added to a couple different areas in my positions right now. the most interesting thing about the financials that jumped me back in and talking about the fact i was wringing my hands and frustrated that i had gotten out. the next day, somebody bought 250,000 up side calls in the xlf in the january 25 strike. those are huge trades. and we haven't seen trades like that since we started to see the turn out of the financial crisis. in the jpmorgans of the world. so now they're just going big-picture. look, not going the individual names the same way they once were. now going some of the big etfs. it's a leverage play that gives people the opportunity. i think financials and i think technology. microsoft, dan and i were talking about this earlier. there are some massive trades going on in different areas of the market. in individual names, as well as some of the etfs giving us a chance to participate. >> the thing is, what -- you see the rotation into originally the
financials and energy. and when you look at the s&p, when you start to see these names, one day on, one day off and then people get tired of buying and overbought names, quote, unquote, overbought names on a relative strength index, they buy other sectors. but how do you buy them all? spdrs. that's what i've been a repeat buyer. spdrs. >> i think you're nuts to chase the banks here. and i know you guys have been in them and had these massive rallies. i've never seen anything like the rally we have seen in a short period of time. so if you're just getting to the game at dow 20,000, i don't think you go in and buy goldman sachs at $240. that being said, i thought the price action yesterday in another sector that's had a big bounce, not having anything to do with really the election, maybe some increased consumer confidence would be the retailers. and did you see all those department stores down 4 or 5% across the board? that rally might have been it for retailers. probably said that a couple times over the last couple weeks. it is going to be really interesting, january, february shall when we see halladay sales for the big boxes and some of these department stores. that could be it.
>> that's why i think leverage is what people are doing. they're using the options to be a part of it. so you're not necessarily chasing it. you're giving yourself an opportunity to participate to the up side. and if it goes to the down side, you've limited your -- >> i just want to say something really quick. there is going to be a lot of investors who tune in, dow 20,000. have 60/40 equity bond allocatio allocations. they are not going to have the 14% gain on the year if they had done nothing. the bond, that's been a bad trade. so if you're going to go out and say, how do i get that back? because the dow is up 14%. it's probably not a great idea to chase him right here. that's what i'm saying. do you understand what i'm saying? so i think there is a lot of levels. when you look at the major u.s. indices. >> so grossly underowned, though. >> i get that. >> you don't need to take you'll of your money -- >> i'm going to give you guys a compliment. karen who sits there, you, you. you guys saying you're long the bank. i don't understand this underowned thing. i know investors and hedge funds
that own the banks. now i actually think it's been a -- underperformance trade. you know? i think that's what it's been. i'm not sure they were underowned. it was a beta trade. >> they are underowned still. >> let's stick with this idea here. >> i'll give you two names i think are interesting. one on apc, anadarko petroleum. energy has been on quite a move over the last couple months. and here's a name that bottomed out about a month and a half, two months ago. on a tear ever since. if oil were just a flat line here, as levered as a name like apc is, continues to move to the up side. and am general. if you look at the recent low, the same low we made in october or so last year. so against about $140 or so in amgen, the risk/reward sets up nicely. >> let's ask someone else what you can buy at stocks at record levels. kate moore is with blackrock, $5 trillion in assets.
so they know a thing or two about buying. good to see you again. >> >> good to be here. >> we are having this debate on
the financials right here on this desk. what about this notion about them being underowned? does that hold true and by what measure? >> look, i actually tend to agree with that. i have great sympathy with the statement that financials may be overbought in the year term but are actually fundamentally underowned. i think the rotation within the equity market, particularly into banks, was happening far before the u.s. election. and we just saw the u.s. election as an accelerant for the stocks. but from a macro perspective, we were already in very good shape. we believe in the reflation and growth story from a fundamentals perspective, you can't argue with the strength of the big balance sheets. valuations, even after this rally, multiples are only up a point and a half. and i agree, as i said before, with the point that sentiment is not overly bullish on banks. there's a disconnect between what people say and what actually shows
up in their portfolios in terms of financials exposure. >> so let's just be clear, kate. you were actually saying financials can be bought at the
current levels with the dow close to 20,000 and the s&p at record levies. in terms of valuation, what terms of metrics -- price to book ratios, what should they be right now? >> look, i think, you know, financials and aggregate are trading a little above book at this point. there is opportunity for rerating in a sector. what i'm looking at very closely is for analysts to reprice fed policy, and in particular, we've gone from an environment where everyone was looking at the fed and saying we would get three to four interest rate rises over an 18-month period to take out all expectations for rate hikes. and now i think analysts are going to have to put that back into their estimates. i think the earnings estimates are going to come up in the sector. and actually the forward multiples aren't going to look too aggressive. >> and you also like health care here. what areas within health care? we've seen biotechs get beaten up day in, day out. >> health care is a tough one. but we really see a strong secular demand trend in the sector. and we want to look at not just the large cap biotech and phrma,
but also at a number of different sectors, pardon me, industries within the sector that could benefit from reform to the affordable care act. so it's a sector that's trading at we think very cheap multiples. where there are some very high-quality companies. and although the headline risk i think will remain over the coming months, there is opportunity for the sector to perform, i would say, over a 12 to 18-month time horizon. >> how do you feel about the markets at these levels and what will get you to maybe start thinking time to pay our positions? >> look, two things to separate out. i mentioned our macro view related to the banks where we are quite believers in the reflation and growth trade. i think that's really what's underpinned most of the equity move so far this year. we are cautious the market has run very far, very fast, post election. and could expect a little bit of a consolidation. that said, if we get policy follow through in 2017, whether it's a fiscal policy for corporate tax reform or on
infrastructure spend, or a return of animal spirits and business confidence, i think we could be talking about, as i was saying before with the banks, upward revisions to earnings and actually a further leg up in the equity market in 2017. >> all right, kate. thanks a lot. good to see you, kate moore of blackrock. it's a baton-passing, right from monetary to fiscal. there might be a lapse, though, between when that actually happens. seeing that the fiscal stimulus needs a pass, right? and that could take months and months and months. what happens then? >> i think it's obviously going to be a lapse. but i think my point about people not wanting to get -- they don't want to wait. they don't want to feel like they missed it. so that lapse you talked about is going to happen. in the meantime, i think people that fear missing out, fear of not being able to get on top -- as bk says all of the time, that will sort of bridge the gap between when -- the baton is passed from monetary to fiscal, in my opinion. >> all right. coming up, tech is soaring today as some of the biggest names in the industry get ready for a meeting at trump tower tomorrow. we'll tell you who the biggest winners could be and what it
could mean for the report rally. and we just heard about blackrock. why a technician says there is a better trade for your money. what he is calling a win-win tried. and later, what does president-elect trump really think about opec. the shocking comments later this hour. much more "fast money" straight ahead. mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of at&t, and security that senses and mitigates cyber threats, their critical data is safer than ever. giving them the agility to be open & secure. because no one knows & like at&t. we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high,
we've got a news alert on hertz. seema mody. >> leadership change, the company announcing that ceo to retire on january 22, 2017 and that kathryn mar necessarilio to become president and chief executive officer from the outside. carl icahn, the biggest shareholder in hertz global says she is the right person to lead hertz. we're looking at shares moving here after hours. keep in mind, this is a company that has been under tremendous pressure this year. shares down about 50% year-to-date. disappointing earnings, plus the rising competition from ride-sharing companies like uber, melissa. >> seema mody, thank you. host of other problems that seema had said, facing her prior to this change. >> well, listen. we're going to talk about tech and the meeting with the president in just a second here.
here's a great exactly of carl icahn, a guy for all intents and purposes, looks a lot like our president-elect. they're just looking at stuff -- on the wrong side of history here. so ride-sharing is going to destroy a company like hertz, doing this. if you just look at the rise -- >> how did you just weave in -- >> it's not a political comment. it's just obvious. like look what's going on here. president is calling these tech leaders -- doesn't get what they do. doesn't have a computer on his desk. >> why do we assume he's on the wrong side of history when it comes to the tech leaders? >> he keeps talking about hertz like it's something -- >> he's also an invest are in loft, isn't they. >> yeah, but that's a hedge, i guess. >> disregard that last statement. >> let's talk about this tech meeting. technology. the best performing sector today as some of the biggest ceos of europe are meeting with president-elect trump tomorrow at trump tower. big names, tim cook, amazon's jeff bezos and jeannie rometty,
chuck robbins and elon musk. given trump's past comments about these companies, things could get awkward. here's what trump had to say about apple. >> we're going to get apple to start building their damn computers and things in this country instead of in other countries. >> it's not just apple. in 2013, trump tweeted specifically about chersheryl sandberg saying just watch. she should spent more time trying to get the stock price up and less on her ego. we note that facebook stock is up 385% since trump tweeted that. trump has also been a harsh critic of amazon, tweeting just last year, if amazon ever had to pay fair tax taxes, its stock would crash and tumble like a paper bag. what should investors make of this? pete najarian? >> the amazon one, you were snickering at me a week or two ago when the fang stocks were
really getting beaten up and i was saying, look, i think a lot of it is being dragged down because amazon and those invested in the fang, amazon is the leader to the down side. in terms of the bigger, broader picture of technology right now, we all talk about apple all of the time. we talk about valuations, we talk about the various things that could be the impetus for this to actually start to move. i think there are names. we talk about repatriation. we talk about all of these things. the tax code being changed. all of that combined with the idea that valuations are still for these. intel, microsoft, micron. an analyst today talking about the entire chip sector. gets an upgrade. i think they're right. a lot of these stocks very inexpensive still and up side in the financial. >> isn't it a coincidence these big cap tech stocks made nice gains in today's session, outperform the rest of the markets on the eve -- >> i think it's 100% to do with just that. >> really? >> 100%. because whatever you look at
anybody he's went up against, mitt romney, hillary clinton, he's always backed off a little bit. donald trump, i mean. so his bark little worse than his bite, always backed off. people are going to come out of this meeting -- i don't know if they're going to be hugging and kissing, but a lot more positive coming out of this meeting. i do believe tech can move higher from here. but still, that one is overowned. >> or like the meeting with the journalists, where he just yelled at everybody. >> i would be surprised if it comes out and it's a big kum ba yah moment. >> you don't believe it's going to be give and take though? >> no. >> you believe it's going to be negative? >> he needs them also. >> maybe he does. here's the thing. they're going in a different direction. think about it. this is a guy who is -- for all intents and purposes, weaponized twitter and facebook and got himself elected and they don't see it as something that's all too positive. they don't see -- they think this is a hijacking of their technology. a lot of people out there. >> all too positive that president obama was elected and the market ran up with president obama. health care -- earn hated the
affordable care act and hmos ran 30 percent. >> here's the thing. our country's most important and valuable -- >> you don't think he gets that, you don't think he see the numbers? >> he doesn't think that russians hacked, you know, the election. he doesn't think a whole heck of a lot of things. he called that the cyber. here is a guy not in tune with that stuff a whole heck of a lot. i don't know what to tell you. and just so you know when we clean up that hertz situation, carl icahn has a $725 million investment that's down a whole heck of a lot. and he invested $100 million in lyft. >> what's the analogy between the two? i'm not sure i'm following the analogy. >> i'm just saying, we have a bunch of old guys, okay -- >> you live in new york and there's california. there's a lot of middle america that voted for donald trump. so they think the country should be taking a different way. he does get technology. this is a guy -- >> steve, in four states, he won by 80,000 votes. there is no mandate here.
>> i want to move past that. tech trade. what does this mean? >> well, i think it means it moves higher. i do think -- i mean, i hear what -- i think there's going to be some middle ground. are they going to be hugging when they walk out? no. but i don't think it will be nearly as confrontational as the journalists. he has issues with journalists. i don't think he necessarily has issues with technology companies. they served a purpose for him in a time and place. tomorrow i think the edict coming out will be much more sympathetic, let's just say. with that said, look at what amazon did. we talked about a potential for trade down to 700. i think it printed 710 or something a few weeks ago and actually reversed it. we mentioned that very versal. how headed right back up and test that 850 level we broke down from. opec secretary general singing donald trump's praises today. is the feeling mutual? we've got the details and what it could mean for the oil rally. i'm melissa lee. you're watching "fast money" on cnbc, first in business worldwide.. in the meantime, here's what else is coming up on "fast."
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point gain ever. here's what's coming up in the second half of the show. financials surged 20% since the election but one top technician says it is time to fade the rally. he'll be here to explain. and later, the leader of opec weighs in on what president-elect donald trump's pick for secretary of state could mean for the oil industry. we start off here with a big fed meeting this week. janet yellen expected to raise rates tomorrow for the first time since last december and only the second time in a decade. so what were some of the big sector winners and losers last time around? breaking it down is a man who is always a winner in our book. the one and only dom chu. hi,dom. >> thanks, melissa. i appreciate that you guys are all winners in my book, as well. but like you pointed out, the second time in a decade for a fed rate hike means there aren't a lot of examples in history about what happens, especially with unconventional monetary policy like what we have right now. but let's just give you a sampling of what happened the last time. remember, we did sew quite a bit of market volatility in the market rate increase. if you look three months out
from last december when we first saw that rate hike happen, perhaps no surprise, even though the threat of higher interest rates was there, it was the safety sectors that really had a bit of a bid. telecom, utilities, staples, all among the biggest gainers overall. so they risk off type sectors. if you look at discretionary financials health care, the biggest laggards three months out in terms of the s&p 500 sectors. if you look about a year down the line, because it's been about a year since that happened, we saw a little bit of a rotation happen. generally speaking, the markets at record highs like we're seeing now means that everybody, that rising tide carried everybody up there, but now it was more cyclical sectors, like energy, financials and industrials that really helped to lead the way higher, posting better than 20% returns for each of them. meanwhile, consumer staples, real estate and health care, those sectors tended to lag the most. again, a lot of that is due just to the last couple of months worth of trading activity. so it remains to be seen what happens this time around, but melissa, it's fair to say that a
lot of traders are already pricing this in, whether or not the market reaction is the same this time around, that's going to be a big question, guys. >> all right. dom, thank you. what should you do ahead of tomorrow's big fed decision? the chart master, carter braxton worth is here at the smart board to explain what he says is a win-win trade. how could that be, carter? >> how could that be? win-win. the year has been characterized by rotation, hyper rotation and at this point, one is right to fade the great winner of late financials and double back and pick up some health care. but let's look at the setup here for financials. this is the nasdaq bank index several hundred companies, and what a textbook breakout. well-defined tops at a common level. take it away. put it back. take it away. put it back. it's beautiful. right? but the question is, it's awfully steep. how do you know when a breakout started to run its course? there is something known as a measured move. the lows here for the past two years, 2,400. and the breakout level,
essentially, 3,100. that's 700 points. if you add 700 points on to the 3,100 level, you get 3,800. that is exactly where this is trading. so a measured move, talk about this in the 30s and 40s is the width of the range that perceives the breakout. so we have an epic breakout. but it's accomplished what the pattern might suggest it would. so, again, if you want to call this a head and shoulders bottom that occurred, you can draw it that way. you can call it the neck be line. but either way, it has met a measured move where not only is it steep, but the price objective is obtained. so let's look another way. if you say how far above trend is this index trading, whether you move a 50-day moving average or 300, i like the 150. now, take a look at this optically. we're so far above the average as we were so far below in 2011. or so far above in 1999. so how far above are we? well, here's a stat for you. going back to 1970, when the --
this index was created, we are trading some 29% above the moving average. no time in its history has it traded this steep. now, to my eye, you want to fade that and double back and pick up a laggard like this. this is just a two-year chart of financials versus health care. you've got a spread of about 2,500 basis points. this has only happened about two or three times in the past 30 years. and typically, you're going to get something like this. so my bet here is to fade this great winner. it's met its price objective and to be contrarian and pick up some health care. >> should reinvite carter braxton worth? >> why not? >> bring the chair over. >> handsome man. >> he's a handsome man. >> i'm going to go, pete, to you. you like the financials and fought recently after being out of the position. >> yep. >> carter says to fade it. >> he's looking primarily at the
charts and i'm looking at everything. the charts are a little bit scary. there is no doubt about it. but when i look at these companies and i'm sticking looking at earnings, looking at the price to earnings, price to book. and then i start to look at what their earnings look like going forward from this last quarter into this quarter and beyond. and a steepening yield curve and the possibility of, you know, some of the regulations coming down a little bit. i think there is a lot of different reasons why the financials still have some room to the up side. right. so it's all about your timeframes. i suspect that's probably true looking out a year or two years. but on an intermediate basis, this is overdone and a lot of analysts that cover this -- certain regional banks discounted up to four rate hikes already. it seems to me it's overdone and also this classic buy the rumor, sell the news. what is going to actually happen on tomorrow's fed day? there is every possibility the long end of the curve doesn't move and banks actually aren't so -- so i'm thinking that. just on a short-term basis. >> yeah, he likes health care, though. >> melissa, i've got a question. >> oh! >> hey! >> where did he come from? >> i know. i just -- i'm listening to
carter worth say this stuff right now. but i'm wondering if it's just -- i know the financials are as focused right now and no doubt they're trading well above their prices, 300 days out there. but are there other sectors out there showing that same kind of perhaps outperformance or real steep outperforms? i know if you look at the s&p 500, some of the names out there in terms of the biggest gaps above their 200 day are semiconductor stocks like an ininvite i can't or micron or industrial stocks like a united rentals. what else is on your radar, carter? >> sure. the two areas that got the steepest post election are the financials and industrials. and smaller areas -- not to say that semis are small but the stocks index, and a few names that have driven the outperformance, where as things like intel aren't that steep. but the issue is for this concept of when to let's say take profits. yes, that this epic breakout, and it's quite textbook, has by
and large, reached the point at which it's likely to not continue. >> all right. well, we'll let carter go for now. >> i didn't know there was going to be such math. >> we're going to trade this now and you guys have a choice to make. fresh money right now. would you rather edition. banks or health care. guy adami. >> right now, this second. >> right now. >> health care. i've got to go health care. >> i would say health care also. just look at what u.s. tellcos have done. >> tremendous headwinds with health care but on a relative basis as a technician when you look at it, where carter is sitting, you've got to go health care. >> no, no, what you would do. based on the information. >> financials are underowned, overbought right now. you can see a pullback tomorrow. it's all about guidance. if janet yellen, chair yellen comes out and says there is going to be multiple interest rate hikes, then you're going to go -- i go with financials. knowing what i know right now, i sell the news, and for short-term i go health care.
>> and this man -- whether you're talking about the fundamentals -- achieved in 2007 will never be achieved again. at least -- their whole business line -- they are no longer. >> right. >> and they won't ever trade at three times book, at least not for a long time. some of the operating leverage that existed doesn't exist now. >> all right. still choose financials. >> i've got financials. >> great call. >> coming up, the battle between real news and fake news is heating up in an undercover hot trade is emerging. how you can cash in. plus, president-elect naming rex tiller girgensoson as secre state. we'll hear from the secretary general when "fast money" returns. free, be free ♪ ♪ 'cause there's a million things to be ♪ ♪ you know that there are
yum back to "fast money." investors wait to see if opec nations will stick to a collective deal to cut production. the man at the center of the deal is opec secretary general mohamed barkindo. jackie deangelis joins us with the latest. >> speaking today at the center for strategic and international studies in washington, d.c., the opec secretary general said the
pain endured by producers has been unprecedented, and that it was time to take action to accelerate the oil price rebalance. now, he acknowledged the fact that an 80% drop in prices in such a short period of time came as a shock and that cooperation with nonopec players was not only important for this deal, but will be central in terms of themes in the future. as the stage is being set for a new global platform. he said the biggest challenge right now is making sure that the recent pact is respected by all the parties, but that there will be a committee to monitor enforcement of this announced cut. the goal, of course, to make sure that these efforts help pricing return to a natural equilibrium, he said. i also asked him what that equilibrium would be, but he wouldn't commit, specifically, to a price range. for next year, he just said that he was confident the market was headed in the right direction. meantime, one topic he didn't shy away from was news that president-elect trump will nominate exxonmobil ceo rex tillerson for secretary of
state. he had nothing but praise. >> rex tillerson is an outstanding techno accurate who has roles in this industry to be a leader, ceo of the largest oil and gas company in the world. and with that rich experience, he brings a lot to the table as secretary of state. >> now if tillerson's nomination gets congressional approval, it will be interesting to see how that relationship evolves, given trump's comments about russia and the middle east on the campaign trail. melissa? >> all right, thank you, jackie deangelis. while opec appears encouraged by trump's early decisions, the warm feelings may not be mutual. here's what trump said about opec to jim cramer in 2008. >> well, the biggest problem is something i never hear about, i told you about it once. every time they lower interest rates, the cartel -- because i
call it a cartel, the illegal monopoly raises oil prices, okay? so the monopoly, because that's all it is, a total illegal monopoly. if businesses ever formed opec, everybody would be put in jail. here they are, and every time an -- every time a country hits oil, they're invited in to the cartel. okay? it's a disgrace. >> that was 2008. but pretty strong words here. should we be -- how should we take this, do you think? >> i think -- we could break it down. i think tillerson -- when i first heard it, i was a little caught off guard. then if you think about it, where is the most volatility in the regions of the world that's always based on oil? this is a man who has meetings with not only russia, every president, every prime minister, everybody knows him, he comes with clout. it's a genius pick, i think, after further review. having said that, on crude, 50 to 55 is where you see a huge amount of hedges put back on.
production, huge amount coming back on. anything opec can do is going to be counter balanced, and then some, with u.s. production. opec -- they said that they crashed the price of oil to push u.s. production out. or gain market share. all they did was create a more efficient u.s. production machine, and that is what's going to keep a lid on the price of crude. >> trump is not shy about targeting things that he sees. he views as being unjust or unfair. could opec fall in the cross-hairs, and in that -- if we have a secretary of state who is or was the ceo of a major integrated oil company, we have department of energy guy who was a texas governor, we have a guy who is the head of the epa, who was the oklahoma ag who challenged regulations. does this basically pave the way for u.s. production to break the back of opec? >> i think that's the hope. i mean, clearly, i've got to believe that at some -- certain level, that's the hope, right?
that opec is no longer nearly as powerful as they were 15, 20 years ago. the reality is, they're not all that powerful. i think -- listen, opec agreement, nonagreement, looking for an excuse to continue to be long crude oil. >> and here's the rub. so silicon valley, trying to make electric autonomous cars, 50% of the oil president trumped from the ground goes into automobiles. these guys are going one way and silicon valley the other way. >> you don't think exxonmobil does anything -- >> not talking about exxon. >> an energy plan in the u.s., independent -- is not mutually exclusive of alternative energy. right? >> listen. i actually think that it is a matter of our foreign policy to break the back of opec and i think it makes sense. okay? but, you know -- >> that doesn't mean you're against alternative -- >> i'm just making a point, mel. >> i'm just making a point back. let's move on. i want you to walk over to the smart board. we need a little separation here. shifting from the oil to the dollar. >> and this is actually a great
conversation. because when you think about it, when oil topped out before it went down 75% from its highs in 2014, to its lows earlier this year, it did so because the dollar started rallying at the end of qe in the fall of 2014. and those things are obviously very, very closely related. today, uup, the etf that tracks the u.s. dollar index, there was a large put purchase today made up of 95% of the options activity in the etf when the etf was trading about 22607, a buyer of 30,000 of the march 26 puts paying 45 cents. break even at 25, 55, looking at the chart, that's right about the breakout level from november 8th. why did the dollar start rallying? obviously interest rates started moving higher. expectations for higher rate hikes and the dollar went higher. here is this u.s. dollar index over the last 15 years. look at this consolidation over the last couple years. this is that ramp i was talking about in 2014. that started, okay -- at the end of qe and obviously when we have
the taper tantrum, look back to the prior year. interest rates started to tick back up. they were at 3%. the ten-year treasury yield, talking about 2.5%. room to go up on the dollar and rates, i guess, at this point. >> what do you think? >> you know, the dollar hag the biggest headwind when people look at the s&p. and when you start to look at the correlation between oil -- >> and your oil forecast. that is sort of what i was -- using oil to 55. >> yeah, so but the problem is, when you look at the chart on both of them, sometimes it's correlated, sometimes it's not correlated. you can't invest -- you can't invest on this. but i do think the dollar has run its course. >> for more "options action," check out the full show at 5:30 p.m. eastern time on friday. still ahead, the rise in fake news stories has the internet in a frenzy. can you tell the difference between fact and fiction? we take to the streets of times square. you're watching "fast money" on cnbc, first in business worldwide..
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advertisers are making moves to ensure they're only backing real news. agencies meeting with clients and partners, sources telling us they want more control over what kind of content their ads are placed next to and inadvently backing. positioning itself as a solution, mobile ad company, cargo, puts brands' ads on 300 premium mobile news sites and apps from the new york times to nbc universal to hertz, saying it's ranked in the top 1% for brand safety as measured by integral ad science. >> the reason people advertise in times square, they lift the brand. when you look at digital advertising, especially on mobile, finding great places, great editorial places to run is super important. and we have lost sight of that as part of, you know, the advertising ecosystem. >> ceo michael casten says he sees not only print companies like the "new york times" benefitting from an increase in ad dollars but also cbs, fox, nbc and abc's digital platforms.
this wave of concerns speaks to the fact that social media companies are responsible for their content, just like old media companies. melissa, back over to you. >> all right. thank you so much, julia. i don't know if you guys have seen fake news sites or stories. >> that's just it. >> sometimes it's hard to tell. a lot of people can't tell. >> sometimes the fake looks real and sometimes the real looks fake. >> exactly. >> you know what i decided to do? >> what? >> what's behind you? what a better to ask people questions about real news or fake news? >> times square. >> take a look. >> real or fake? donald trump and kanye west were hanging out today in trump tower. >> fake. >> fake. >> fake. >> i'm going to say fake. >> real? i heard that kanye was there. trump, i'm not sure. but i'm going to go with real. >> just friends. a good man. >> fake or real.
the dow jones industrial average is trading 20,000. >> fake. >> fake. >> real. >> almost there. true. >> wow. extra credit for that answer. >> real or fake. apple is making a special platinum gold trump edition iphone. real or fake? >> fake. >> fake. >> absolutely fake. >> true? >> what i think you ought to do is boycott apple. >> real or fake, pepsi to stop selling soda by 2020. >> fake. >> i say real. >> fake. >> false. too big of a company to have all of that. they're not going to. >> last question. fake or real. my good looks. >> oh, total real. >> real. >> ha-ha-ha-ha. >> creepy. >> that just shows people don't know news, period. >> i also asked, real or fake. melissa lee's disdain for me
on-air. >> what was the response? >> resounding fake. >> oh! >> really? >> they thought you -- yeah. >> so you're hiding your true feelings. that we really heart each other. >> really? >> isn't that a heart? >> because if you look at the fake news stocks versus the real news stocks, there is a divide in terms of performance. "new york times" up, what, 20-plus-percent since the election. 21%? gannett? >> this is an historic election. i don't know if you can -- gauge these -- these moves out of here. but if you look at a company like comcast, maybe you've heard of it, up 24% year-to-date. it looks like the stock is getting ready to make another leg higher. >> comcast, the parent company of this network. coming up, pete taking a look at one stock he says is ready to take off into the wild blue yonder. off we go, giddyup. more "fast money," straight ahead. t cloud helps us stay connected. the microsoft cloud offers infinite scalability.
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>> united health comes out unh. >> wow. i'm melissa lee. thanks so much for watching. see you back here tomorrow at 5:00 for more "fast money." meantime, "mad money" with jim cramer starts right now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to kcramerica. some people want it mato make friends, i just want to make you money. my job is to teach and coach you. look who's back. as the trump rally continues to unfold, all-time highs made across the board. dow gaining