Gains overseas, and nearly 3 rally in oil prices. All ten s p sectors are in the grin pushing the s p back into positive territory. Talking about is it finally here. The market seems to be just going up and down with the price the longterm trend it looks like its going to raise rates. Thats not you really we saw stocks despite the continued massive drop in oil. Well, i think, mandy, what you got iran, for instance, comes on the market. The opposite it went in the opposite direction when he did that. Same thing with our fed. Oh, this is going to strengthen the dollar too much. Were going on see the euro fall apart and the dollar is going to rocket up. Opposite happened. When iran comes on with additional supply of crude oil next year, doesnt mean that crude oil is going into the lower 20s. I think the read might be just the opposite. Dave. Look, weve seen markets go up during the year despite oil being a one way trip down. Yeah, were finishing up the year. Flat on the s p. You got to look for stocks where oil is not going to impact it. Stay away from the oil service stocks. I would tell you that secular issues. Alltime high today. Exactly. What im saying is that this provides opportunity. If the market is being traded because of algos, our relationship there between oil and equities. There are plenty of equities there that are you should valued because of this ridiculous pressure on it. Look past that. If you look at the longer term, rather than day to day, you make a lot of money with that. You head into the ring. Pete. Its been about rotation, and this rotation caused this grind, and the grind suddenly we find ourselves somewhere between call it 2050 and 2100. You look at the trend. You look at the volatility index. Thats been staying somewhere between call it 15 and 20. Thats where we are again today. We did have some early moves out of financials. I thought that was pretty encouraging. Up about 1 early. It was, again, the dash for trash. Just like last week. Once we saw Oil Prices Start to rally, then you suddenly look. Whats leading the market . Its the oieh. Its the xle and the materials. Its those kind of names. I think were still in this little trap where people are trying to find the right spot. I will point out something very, very important. Volumes yesterday. Yes. Nine million option contracts total traded. There was a full day of trading yesterday. We have the week before averaged about 13 million. The week before that we were averaging closer to 22 million. It gives you pirs picture of just how much volume was missing. And to to their point, todays move doesnt mean theres a santa claus rally. To me what it means is cash selling is over. You have two trading days left in the year. Now you are seeing buyers come and setting you up for january. Okay, guys. Well get back to you in a second. We have breaking news with sue herrera. Sue. Thank you very much, mandy. This concerns dupont. Dupont is going to be laying off about 1,700 of its employees. Of course, as you know, that stock has been in the news in a big, big way. Along with the sobering news, they say, in their news release, of those layoffs. The wilmington area reductions, thats where those layoffs will take place. They are able to announce as well that the Corporate Headquarters for the combined postmerger Specialty Products business will remain in wilmington, delaware. They say it will be a Technology Driven innovative leader focused on unique businesses, so as a result of this particular merger, we will see some layoffs. About 1,700 layoffs. Man mandy, you can see depont is up almost 2 . Back to you. Thank you very much for that breaking news. Sue herrera. Steve, what do you make of this news. The stock is up nearly 2 . I guess after any merge ever of this level, you will expect thats the down side of m a, and its the down side of activision as they look to cut costs. I would think it would be the tip of the iceberg. You have to feel terrible for the people who get notices. Absolutely. A merger this size, theyre definitely more heads to fall. Jim. I got to agree with that whole heartedly. 1,700. Belief me, im not making light of this. I feel for those people. That is a small number for these two companies and their size, so you should expect more. Wilmington, unfortunately, is going to be ground zero for this. Its always terrible to receive this kind of news in the holiday season. Of course, our thoughts are with the people who will lose their jobs. With just two trading days left in the year, what can we expect in 2016 . Its time to duke it out. Joining us now with a technical take is jonathan, chief market technician of mkm partners and making the fundamental case is jeff sort, chief investment strategist at raymond james. Both of you, great to see you. Jonathan, i believe you think if you were waiting for santa, you have missed the boat. The santa claus rally is obviously the last five trading days of this year, and the first two trading days of the new year. Whats interesting, theres about a 1. 4 average gain during that period historically, but we had about a 3 rally leading up to that period. The first three days of last week actually up almost 3 . We think perhaps there was some frontrunning. We saw this last year as well. We wouldnt be getting too excited about the remainder of the santa claus rally. We think up side is probably capped, you know, in this 2080 range on the s p. What do you think from the fundamental side . Have you given up on the rip your face off rally yet . You know, i think the setup was right for that. You had a 90 down side day on december 11th. 90 . The down volume came on the down side, and then you had three 80 up side days. I think the thing that changed the rhythm of your rip your face off rally was the 1. 2 trillion dollars expiration that occurred on the 17th and 18th. I think were back in rally mode. I continue, as i did a few weeks ago, to think the market will trade to new alltime highs. I know you are a guy that focuses on tech a lot. Is tech really going to be i mean, there are essential some underperformers. I know you are going to talk about some in just a bit, but are there any certain names or are you not going to go into specific names about tech . I was in your town a couple of weeks ago. I spent three hours with ron barron at barron capital, and one of his Larger Holdings a company we follow, and we have a strong buy rating on it. Uridium. The stock jumped after the successful spacex launch, and then recovery back down here in florida. We think the stock has legs to the up side. I think it turns sfwu a huge cash flow story in 2017, 2018. Hey, really curious about that. If you also follow ordcom, a competitor. Yeah. Ordcom, we follow that one too. Our analyst has a fundamental decent rating on that one. Positive rating on that one as well. That also should turn into a huge cash flow story once the capx gets into the rearview mirror. From a technical point of view what are you waiting to see in the market to be able to give you more confidence that we could sustain continued gains into 2016 . You know, a lot has been made of the weakening internals of the market, right . Thats exactly it, manndyman. The market is essentially unchanged from last year. If you look at the percent of stocks above the 200 day mooufk average thats from 77 down to about 48 . Weve had a massive move down in the actual number of stocks that are participating, and really what concerns us is the ratio that this has been going on. Were now approaching the sixmonth mark where that percentage is below 60 . Historically since 1990 the only other times weve got tony that sixmonth mark on that measure have been in bear markets. In 2000 and 2002 and 2007, 2008. You know, the whole story this year has been lagging stocks are going to play catchup and finally move to the up side. Theyve been given all year to do it, and they havent. The story this year has been a handful of stocks that have been moving higher when the majority of stocks have been moving sideways to down. You know, that certainly could happen in early 2016, but, you know, from our perspective, if they were going make their move, theyve had ample time to do so. Its jim levanthal. I want to discuss this further to you. Im definitely in that camp that thinks that the they have to approve. Weve localized this to about ten stocks in the s p 500 that are up for the year, and the other 490 have had terrible years. Doesnt that speak to a rotation that should come in early 2016 . I understand it didnt happen in 2015, but it seems more likely that the other 490 stocks are going to come out of what has been a bear market for them than the ten stocks that are leading will take the overall market down. Well, you know, you could look at it that way. You could also say that, you know, whats telling the true picture. 490 stocks or ten stocks. Again, historically, if you look at the data, i would agree that for three or four months into this, right . You just havent seen instances in history when theres this few stocks participating, and then all of a sudden they start to participate. If you look at, you know, at the stock level and just look at a lot of the indexes and the sectors, there is not much that is in an up trend right now. A lot of stocks are below 200 day moving averages, which is something we havent seen in the last foo few years. Again, you know, were open to keeping an open mind, but, you know, when you see the structural picture of many stocks in down trends, it makes it much more difficult for them to rally as opposed a handful of stocks that could seemingly pull back. Jeff, this is pete. Real quick question for you. I tend to be more bullish than bearish, and you talked about this rip your face off rally. My question to you is this. Do you have any concerns related to the high yield market . Some of the lack of liquidity there in terms of the bullish case for the s p to be able to move higher . Yeah, i do have concerns about the high yield market. I have concerns about the entire fixed income complex and the rising Interest Rate environment. The point that he makes about the majority stocks being in down trends is absolutely valid. You can turn it around and say, you know, a lot of these stocks are down 20 or more, and theyve already been in a bear market correction, and i agree that you probably are going to get a rotation in the new year and the laggards will start to move up. Thank you very much for your debate. Tesla speeds ahead on hiring news. Is it the best play in the auto space right now . Well ask our experts. Plus, the brothers will go headtohead on two of carl icahns troubled trades. The debate on which stock the billionaire investor should dump coming up. We also want to hear from you on that particular point. You can go to our twitter page Halftime Report to vote for your pick. Also, with the sector up nearly 20 in the past three months, is biotech finally back . Cnbc, first in business worldwide. In the next four years. As well, mandy, Companies Growing extremely fast in 2010. Had less than 900. Its going to be 14,000 workers after this. And that 15 million tax credit doesnt hurt. Stocks up 4 right now. Indaed. Okay. Weve got also the biggest laggard on the dow its what they call defensive. There are no such thing as defensive names. Thats where we want to put our money. If you want to be in that i think theyre kicking their butt right now, and the 3 yield and the fact that they got all of this stuff with the gift cards. Theres a lot of things moving in the right direction right now for target. Okay. Its currently up by 2. 5 . Also, Dunkin Donuts partnering with Madison Square garden. Coffee, baked goods, providing for big deal here, jim. I really like the stock, but i dont like this deal. The official monitoring of msg on Dunkin Donuts rsh where there people going to msg who dont know who dunkin doughnuts is. Thats a good point. This is what you do when you are making too much money, and what i would rather see dunkin do is pay down some debt. Moving on to whole foods. Paying a 500,000 settlement over accusations of overcharging customers at its new york city location. Steve actually, this fine or this settlement, i should say, is somewhat less than what they were expecting. They were expecting 1. 5 million. I cant have the same passion about this company, whole foods that, pete or jim had because its meaning it isless. Half a million bucks, this Company Needs nothing but the fundamentals. The bigger issues they have are competition in the space with the Major Grocery chains going organic as well. Thats been the trend. Yep. Okay. Thank you very much, all. Coming up, winter storms and forecasts of Colder Weather putting oil and nat gas higher. How the Energy Experts are trading it. Thats coming up next. Plus, the big hedge with steve weiss. The moves, the big money is making, but should you maybe have a feeling about being a little more bullish . Halftime is back after this to discuss. Welcome back to cnbc. A check on some consumer stocks. The best performing dow stock. A lot quicker than i expected. Thats hats off to the management there. I think the next thing weve got to figure out is what comes after allday breakfast. Theyre going to have to have something new that propels the stock from these high 100 teens into the 120s and beyond. I think the something new is theyre going to finally really start to address the menu. Weve talked about it and talked about it. Too many different items on the menu. Theyve got to reduce that down. Thats going to help out all franchises. I think they have streamlined. Theyre trying to get more and more all these guys are trying to get into that competition, the four for four, the two for four, the dollar menu. I think there are clever ways. Heres a question for you. Should they go healthy or less healthy . When i go to mcdonalds, im not going there for the salad. I dont think they have to go healthy. If you didnt have kids, would you go there . Of course not. I think the issue is that the easy lifting has been done so far with the all day breakfast. Management did do that. The other managements didnt. At this point now its getting much more competitive, and theyve got to change the menu, but others are doing it as well. Yes. I saw the stock lower about six points lower. I dont think its cheap. I think its still playing out, though, the all day breakfast. Its got momentum because theres an awful lot of folks who havent taken advantage of that yet, and when they do, then they get back into that cycle of going multiple times a week rather than just one. Nothing better than hashbrowns at 4 00 p. M. Doigs doing a little research. Okay. Awesome. Mcdonalds is in the airport. Yeah. Natural gas is surging again today. Its up more than 5 and hitting a sixweek high. Massive pop yesterday. Jack yes deangeles has the futures now crew. Jackie. Thats right. Colder temperatures across the u. S. , some bad weather in spots definitely sending the nat gas trade higher. As a matter of fact, were up 40 from the december 18th low. Short covering. Is that whats fueling the move . The weather and expiration have forced a lot of shorts to cover. Theres 370,000 in the market right now. 5 added in the last two weeks alone. Sfla winter is getting started. It has to be colder than it is right now. Jim, i know in chicago it certainly is. Would you be scared to get into this trade at these levels . Midwest is the biggest deal because the highest proportion of homes are heated. The next four days are supposed to be seasonable, and then saturday its supposed to get warm again. However, were talking about a sevenyear downtrend here. Im pretty sure the downtrend is not going to be broken by one ice storm in the middle of the country. I think to me its supposed to be a sell. This thing could settle above 2. 6. Maybe some of the more medium term shorts start to get nervous, but right now its a Short Covering rally. All right. Gentlemen, thanks. Well be watching. Well come to you with the online show today. Were talking to miller, matt, on why the dollar index could see some real difficulty in 2016. Its exactly what we saw last week as we headed into christmas in the threeday weekend. Weve got new years and another threeday weekend coming ahead. We had a more than 3 selloff, and you have people buying the dip and getting a little bit long before we head into the new year. Still the majority of traders are still worried we could touch those lows that we saw in 2015 early on in the were. We get back to 3810, well be even on the week. Thank you very much. Are there any diamonds in the rough in the Energy Sector . Probably. I think you have to look very, very deep. The problem right now you are facing is all of this little the world has gone to these energy names, and the high yield markets have really caused a lot of headaches there. I hi you have to tread you need to be very careful, and dont just go for the dividends. Everybody always wants to go for the dividends. Oh, well, theyre going to give you 4 . These stocks can move a lot further to the south and not give you that 4 deal. I think we might see some of that. You have to be careful. You have a cold week. With the storms down in texas, and cold hitting the midwest hard moving out here, thats another reason that nat gas gets a bid. John, i listened what you said about iran. I think theyre going to flood the market. I think that might overwhelm the normal, you know, buy the river, sell the muse. If thats the case, i want stocks and companies that are aing nostic when it comes to the price of oil. Things like refineries and peoplelines. Pipelines have gotten crushed over the last several months. Oil is spiking because trade rersz flattening out the short positions going into a long weekend. Weve seen the saudis come out before on a long weekend like thanksgiving, and crush the market. Maybe they do the other. I dont think they will. I look at oil this way. Any time the company says were going to make it up on volume. The saudis are saying were going to make it up on volume. Im not basing my Investment Advice or what i do on what the saudis are going to do. Theyrish rationale now. Im not going to be irrationale. So many things about this. I defy you to tell me how you are valuing an equity in the oil space, in the energy space, if you cant peg the price of crude. The leverage of the Business Models so huge that theres no basis for it. Tell what is you think. Go to our twitter and that Halftime Report to weigh in. As we head to the break, take a look at the s p sector wrshz all ten are in the green. Technology is leading. Energy is positive, but it is the laggard out of the ten positive sectors. Halftime is back right after this quick break. Here at td ameritrade, they work hard. Wow, that was random. Random . No its all about understanding patterns like the mail guy at 3 12 every day or jerry, getting dumped every third tuesday. This happens every third tuesday. We have Pattern Recognition Technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. For all the confidence you need. Td ameritrade. You got this. Hello. Im sue herrera. Here is your cnbc news update at this hour. The socalled afl wenza teen bho skipped probation and his mother will be deported from mexico to texas later today. Authorities say the pair apparently planned their disappearance, even throwing a going away party. Ethan couch is expected to face a judge and an arrest warrant has been issued for his mother. Meantime, the pentagon says that an isis leader with direct ties to the paris terror attacks has been killed by air strikes in syria. Officials say the man was actively planning more attacks. The u. S. Led coalition has killed ten Islamic State leaders in the last month. The northeast now bearing the brunt of a deadly storm system thats been making its way across the country. The first snow of the season falling across new england and new york areas. Meanwhile, missouri has major flooding continuing there after recordsetting rainfall. In texas the cleanup is underway after tornadoes kill 11 people. And the weather may have been a factor in this gas station collapse. Take a look at that. One car was totally destroyed after a canopy came crashing down at a citgo in wisconsin. Luckily, miraculously really, nobody was hurt. Thats the good news. All right. Thats the cnbc news update. Back to you. Crazy weather, right, sue . Thank you very much. Lets take a look at the markets right now. Weve got a nice rally on the street with the dow currently up by about 1 . The s p up by about. 8 . Back in the black, were to date, the nasdaq is currently gaining by about 1 . Lets shift gears to trades that are not working. Carl icahn is normally known for his immediate yas touch, but he made big bets on commodity stocks that are down double digits this year. Which stock should icahn dump . We have a brother versus brother debate. You get to start it off. All right, mandy. Carl has done a fabulous job picking stocks. Netflix, apple. Ill stop there. As far as bad stocks, ones that he should get rid of, right now im thinking ylny, cheniere. Down 230 this year versus last year. Additionally, this has been dead on about this one as far as just between debt and the price of natural gas going down. This has just been a killer for them. Yeah, they said goodbye to the ceo. 165 Million Dollars later they get rid of the ceo. Thats an expensive parting gift. These guys are in at now its time to get out of this one. Nobody else to get in. Im looking at freeport mcmoran. Take a look at where this company made that decision to get themselves positioned in oil and gas. Gas oil prices were actually above 100. Thats a huge problem because they put themselves into a very laj leveraged position at that point in time. 21 billion in debt. Theyve accumulated over time. Thats huge. Their debt to equity ratio right now, somewhere near 100. Thats incredible to me. Now the play is going to be about spinning off some of those assets, and how about copper . Is copper going to be able to react enough for them to actually save this company . I just wonder whether or not this company is actually going to be able to survive. I think carl actually where he has gotten in, not that bad of levels, but it is well above where it is right now. This one, i think, he has to get rid of soon. Okay. Well, before we find out what the desk thinks the stock should be dumped. I should mention copper is up 3 today. The highest level since december 18. Still down over 20 yeartodate. Hate them both, but the brothers aside, lets talk about the stocks. The stocks or negarians. I do agree with pete completely on fcx. I think its going to play out like chesapeake. Have to sell assets. Never catch up to the debt load. I think that was one of the most crowded trades ive ever seen coming into the decline, and you have to go out so far to value it on cash flow basis that it doesnt make it worthwhile. Particularly with nat gas where it is right now. What about you, jim . Well, i think were talking about two real losers in terms of the stocks here, and the less worse one, i just wanted to make that clear. Thanks, jim. Stocks less worse one here at cheniere, and theres one reason why. Yes, we have a rot of natural gas, but the rest of the world does not. Particularly ease aiza, and they are on the leading front of exporting to az wra and other places as well. Thats a little bit of wind in their sails, but i dont like either stock. We also asked you, the viewer, and the listeners to weigh in on twitter, and the winner is pete with freeport. Wow. I appreciate that. By the way, huge put activity for a very long time, mandy. There have been people on this story for multiple months, and it continues to play out. Weve also got a news alert. Lets head to sima modi. Kayla, Kalobios Pharmaceuticals asking to delist the company. A hearing on the companys appeal has been scheduled for february 25th of 2016. This, of course, following news last week that nasdaq is planning to delist the company that came out on december 23rd. Thats the latest. Mandy, back to you. Thank you very much. Jim has a stock pick he is calling the best value on the block. Whats he thinking about . Find out next. Plus, is biotech back . Should buyers still be beware as the index is rallying off the 2015 lows. Our traders do weigh in on whats going with biotech. You are watching cnbc, first in business worldwide. Coming up on power lunch at the top of the hour, natural gas rallying again today. Prices soaring 25 of the past week. Is this the hot trade for winter . Wayfeyer. Mens warehouse is tanking. We have three great big great big predictions for retail in 2016 for you. Plus, a plunging oil could that depend on energy . Maybe like houston. Now if i can get my tongue untied, back to mandy. Thank you very much. Lets take a look at the nasdaq 100. It is now within about 1 of an alltime high. Its record close, in fact, has been led higher by amazon, which is at an alltime high, and apple just had very lackluster year. I think its down by 1 . Its also being led by microsoft and alphabet. What do we think about . I know we talked a little bit about some of these stocks yesterday, but, you know i think of that group the one thats most impressive just because when you are looking from a pe standpoint, everybody we all talk about apple all the time. Forget apple for a moment. Microsoft. This is a company that is in the midst of an absolute massive transition, and yet, people are still willing to embrace this company because as they move to the cloud, they continue to ramp things up and theyre doing so well. I think that move, the way he has been able to orchestrate that from microsoft, has been extraordinary. There again, weve seen nothing but up side buyers in there for months and months and months. Theyve been right, and the stock just continues to elevate. Out of those four that i just mentioned, that would be your pick. Microsoft . Safest and best pick. Safest and best pick. Okay. What about you . You know, i have missed amazon for 20 years now, with the exception of the trade there. Probably miss the next 20. Obviously its a juggernaut, and any time they want to go out and start earning money as we saw, they can. However, the valuation just keeps me in the sidelines. Im more a value player. I agree with pete on microsoft. I think its going to be a slower ship to turn. Its big. It takes a wild turn. Its like pete trying to turn the aisle. It takes a while. Yeah, we just go right around. Its why the stock is unchanged rather than screaming to the up side like many of these others. Between that and the 6s and the 6s plus, i think those were kind of flat as far as the exception. The size of this is huge because its usually 100 off a laptop. I think they got to forget about that category, and unless it makes real strides, which they have. You get more from fitbit or up or any of the others that you get from them. Very telling to see how much demand there is for refresh next year. Yeah. Okay. Time for some dollars and scents. With mr. Jim levanthal. Qualcomm down 32 yeartodate. You think it might just be the best value you can find out there. Youre scraping down the bottom of the Bargain Basement bin. Use any more euphemisms you want. Were not out there just looking for cheap stocks. Were looking for missed price stocks. Were looking for a dollars worth of value selling for meaningfully less than 1. Thats what you have in qualcomm. First off, the stock has had a terrible year, and it cull 34i7b ated at the last Earnings Report when it was down 15 . Funny thing is they beat earnings estimates. They reduced or actually removed their guidance for the coming year. That was based on a lot of lackluster clarity around china. The stock is trading where it was after that Earnings Report. Thats the opportunity that were looking for. In the meantime, the financials and the valuations are very compelling. It has 21 billion of net cash and 75 Million Dollar market cap. That net market cap of 54 billion is roughly ten times this coming years earnings estimates, which should be a trough. I see a screaming value there. Do you agree or disagree . I agree. I think this one has theyve taken their focus off of really what got them to where they were with many of the basically new areas that they tried to extend into. I think that has proved to be a mistake as far as the strategy for them. Getting back to their knitting and focussing, i think, jim, is exactly right. This is what is going to lift this stock in 2016. Getting back to their knitting. Thank you very much. Our respondents exhibit hedge fund insider, meantime, steve weiss is, tracking the socalled smart moneys moves. I dont really like that term smart moans. Quite frankly, the smart money is not very smart at all this year. It is a segment were calling the big hedge. Steve, you have been seeing some bullish signs out there for what has been a pretty trying year for a lot of the hedge funds. Actually, with that perspective, i looked at morning stars numbers, and virtually every strategy except for growth in morning star has underperformed. Thats the long mutual funds have underperformed the average hedge fund manager. 75 of mutual funds quickly formed in the indexes. Lets talk about the bullishness. This is for equity longshore hedge funds. From the middle of november to the middle of december, they actually increase their net Long Exposure to the market. It became more positive. However, they also have gone from just shorting etfs, about 20 of the short of their portfolio to 13 . What that means to me is that they are feeling really good about the companies that are overvalued, but they can short, and thats empowered them to take more risk on the up side on longs. Its two sides of the coin. Well talk about it last time. More attractive values on longs to buy stocks, and more overvalued situations from the short on the other side. Okay. Thats a bullish sign. Anyone want to weigh in . I would say its a bullish sign for hedge funds. Its sort of like even for the market overall. Yeah. A bullish sign for hedge funds. One of the reasons i like goldman heading forward into 2016 as well, mandy, is because i think goldman is the most hedge fundlike of the investment banks, and i think they will be exploiting the same sort of things that steven is talking about here. Coming up, the humbled masters of the internet. Some of the biggest buyout having a rough year as well. What ails these powerful dealmaking firms . Well dig into the streets elite next. Californias coastline is a welcoming, wonderful home to everything from surfers to seals. Attracting visitors from around the world, around the year. Along the coast, protected areas are set aside to preserve a Fragile Community of animals and plants. To protect these natural wonders, heres what to know before you go. Stay at least 300 feet away from seals. This is their home. Dont touch marine life in tide pools. Take away your trash and your happy memories. Always enjoy and protect our marine habitats. Welcome back to half tame. Some of the streets biggest dealmakers, live, blackstone, are really feeling the pressure this year. Cnbc Senior Market commentator Mike Santolli joins us now live from the nyse. Whats behind that . On the surface is it looks like a pair docks. We have record volumes. Los to 5 trillion globally so far this year, and, yet, the shares of those companies, blackstone, apollo, kkr fortress, are down 25 to 45 in the last six months. One of the reasons is of the buyout firms themselves, lbos vanity have not been a business feature of this whether its because of bank regulation, limiting the amount that can be lent for those deals or because these firms dont see the value there. Thats not been a big factor. At the same time all these companies are very reliant on good, strong credit markets. Obviously in general the high yield market is telling us that its kind of peaked several months back. They also rely on the strong ipo market that have their exit. It seems investors dont know what to do with these companies when theyre not really very active on the dealmaking side. Whats going happen in 2016 . We have to obviously see some winners and losers. Who do you think is going to be able to with stand the difficult environment . Its very interesting because they all are fairly cheap right now based on expected earnings. The question is are they truly cheap or just dead money for a while . A lot of people focussing onbwh. A lot of people focusing on oak tree. Publicly traded but not widely followed. They have a great record of finding value in very tough markets like we might be hag, for example, in energy and other areas of highly leveraged companies. So thats one that people might focus on. But in general, id be interested in what the guys think about. This the Public Market doesnt seem to know how to val unite businesses. Theyve not been around for mr. Cycles. A question for you, on these publicly traded companies, were talking about deal makers. Do they look at these stocks that are down 40, 50 and say thats the next deal we should do . It may seem an obvious trade. I dont know that it screened out that well on the own map. But you would think that might be the case. Its interesting though. You look at you listen to Steve Schwartzman at blackstone that, is the biggest scale operator in this whole thing. He wants the world to know hes built an institution that is meant to last for a really long time. He compares himself to the large asset managers. He doesnt want to think of himself as a boutique Family Business n that instance, i dont know that i would see it coming. You might feel that thats a logical way to have some kind of a graceful exit here. John . Michael, real quick. As far as one of the reasons investors have stayed away, it is the leverage . In other words, when you take out a hilton or any of these other big names that have been taken private and then tried to bring them back out, caesars, hilton, some of the others and you throw a ton of leverage on to that. Isnt that why people stayed away . I dont think. So the leverage is contained within the funds that they run. So the company blackstone, for example, is not itself shouldering a tremendous amount of leverage. I just feel as if, look, if its not clear that market wants to pay up for potential future performance fees, theyre willing to put a multiple on the management fees, thats a Good Business but that doesnt get the company to the values that the managers feel they deserve. Thank you. M an and r volume this year wa 5 trillion. But only 300 billion of that was buying a private equity. Okay. Lets shift gears. One of the hottest trades of the last three months, it is biotech. Coming back from the late september rally to rally nearly 20 . Is the biotech sector, the place to be heading into 2016 . What do we think . It is back for good . I think its back. Were getting ready to increase our allocation to biotech directly. Previously, we just allocate to health care broadly which biotech was a segment. I think you got a lot of casual investors from the carnage. The sector has done well this year. There are many, many, many more losers than winners. So i think its a very attractive space provided youre investing with a knowledgeable manager. Its not for Retail Investors to do on their own, unless you go big cap, real big cap. If you do that, and if youre going to do that, you have to get yourself a basket, the big cap names and those that actually have a profit and earnings. A price and earnings. You look at some of the companies, even yesterday we were sitting here and i was surprised when we heard i think sam was talking about some of the names. There was one name on there that didnt seem like it would fit in their category because they didnt any earnings. If you look at the ones that do, amgen, cellgene, its surprising how cheap they really trade. When you can really see, when you see a 70 pop or drop in a stock in one day, weve had a lot of high profile trials not going well recently. Really underlines the risk in the trade. What about the Political Risk here . With the recent pressure on drug pricing of a number of these companies. There will be continued force. A difficult year . Continued difficult risk because its a hot button topic. I think even more so the companies we were talking about yesterday, if you have a stock with really just one way for them to basically get flushed with cash and that way goes the wrong way, those are the biggest risks i think out there. Not just the burn rate but that one drug focus. I think another big risk is this is a very high beta sector. It trades what the market does times two. So if were thinking were going to have a tepid result in the s p 500 for 2016 that, may mean there is a down trend along the way. That could be a washout in these stocks. Just be aware of. That the long term prospect are good. In the short term, you can get a washout. Do we think the biotech ipos will make a comeback . Thats more difficult. Thats more difficult. We saw the tell was that third tier, low, low quality biotech stocks were coming public and popping. And that goes to the casual investor. That goes to all the money that flowed into biotech funds that is coming out now. So they buy it because they need the product. So i think it will be tough for that to happen. But Great Companies will still be able to get an ipo done and done at a premium. Okay. Coming up, our experts go under the radar what theyre watching that you might be missing. Those trades and more just ahead. Okay. The battle for the top trader is winding down. There are only two trading days remaining in our half time portfolio competition. This is where were standing. Let me start at the top here. I dont want to hurt you right out of the gate. Stephanie is up by just over 6 . John, there you are in the middle there with a 3 gain. Jim, youre squeaking into the red there with a 1. 5 loss. And pete, youre down the bottom there. I know you like to blame amex. Youre down 10. 7 . And that is the day they were down 20 on the year. That one i hung on too long. You have to get rid of the losers. I didnt get rid of it fast enough. Well said. Lets go. Narrator radar with things that the raiders are looking that maybe you might be missing. Pete . Dig it out from under the rock. Speaking of interesting names that are moving and hitting 52week highs, look at Royal Caribbean an carnival cruise. They hit 52week highs. A lot of activity. Weve seen traders that are in there. They already have positions on and rolling up to even have extended and looking for even higher. Those names stand out for us. Take a look. Theyre moving the options up and xpktiexpecting more out of names. John . Fxcm. This is a stock that got taken apart when the swiss frank decoupled and skyrocketed and they had it was over 100 a share and traded down to 5. Refinancing themselves now. And the stock is up some 25 today. Its up its more than doubled in the last two weeks. I would love to give you time, jim. Were out of it. I thank you very much for joining us today. Thank you. That does it for us here on half time. Pl pl begi power lunch begins right now. Nasdaq with the biggest gains so far. S amazon. Com hitting a new high. I will see your rally and i will up you natural gas, melissa