Transcripts For CNBC Closing Bell 20160425 : vimarsana.com

CNBC Closing Bell April 25, 2016

Microsoft and alphabet last week and debate whether apple can turn the tech story around. Global debate about apple. More on that in just a bit. Valeant getting a ceo the same week Michael Pearson is to testify on capitol hill. Also argentinas return to the bond market. Kay kelly will return and tell us what it means. After the bell, well discuss why nikki sixx is calling on president obama to go after youtube. You have nikki sixx and youtube, only on closing bell would you have that. We start in saudi arabia today. All right. We dont start in saudi arabia. So lets go to our cnbc Closing Bell Exchange with the dow down 61 points. Joining with us we have rob weiner, ben willis and Rick Santelli checks in from chicago as well. Ben, the tradition lately has held leading up to a Federal Reserve meeting that the market tends to rally. Not a hard rule but that typically is what happens. Is Something Else going on . Something else is going on. When its the fomc by itself but the problem Central Banks around the world are affecting this market and their indecision is creating indecisions across the equity universe, if you will. People continue to seek safehaven in the fixed income market. You have peoples bank of china moving their yen and making comments about their system and how they are trying to deleverage on the real estate side of the equation. Then you have the people, the bank of japan with some of their comments. Not very effective. This market, i think, is just trading thoe ing on thin air an. People who are short, we call it the short basket, the negative calls, so you see pressure on the solar stocks and tesla and the like, the heavy momentum to the short side. Other than that were not seeing any real investor participation. The skepticism that was prevailing when i left is still very much with us. Oh, yeah. Ron, that opens an interesting question as we move through earnings season. Weve seen some big sell offs. Your loading up anywhere where youre seeing prices come down levels where youre buying them . Frankly, the pes, depending on who you look to its 16 to 18. You look at five years forward for the performance of the stock market once its passed about 15 and a half it doesnt look that good. I think the previous speaker was right you have to pick your spots. For us we own the basket of microsoft, google, facebook and apple. Apple being cheap, but doesnt look like the growth is there. Microsoft looks like it was punished. I think you got to own the basket but i dont think any of them will go super high. They had a great year last year and it pays for them to come down a little mostly because the earnings arent there. If theres no e in the p, theres no price going up. Im working that out. Rick santelli how are the markets setting up for these meetings this week . What your noticing right now well, Interest Rates are going in pretty much at the highest closing yields sometime in march, which is an extreme but if you look at the march high yields, especially for the long run were getting very close to taking those out and comping some of the activity we had earlier in the year. If you look at china, over the weekend the big news was how much debt they are taking on and how little they are actually getting in the form of sustainable growth. Today a new story out they are cracking down on the commodity frenzy. I want goes to show you if you create stimulus to boost markets and try to control where the money goes into which markets its an exercise in futility. It isnt much different we question the communist model. Is ours much different . Is Mario Draghis much different . I heard the discussion would the markets be a whole lot different if it werent for fed. Who knows. All i can tell you is that to have this much meddling by Central Banks and then wonder why the market is having such anxiety, but in the end markets will do better on the took side and rates are breaking out almost no matter what happens. The outflows of some of these fixed income etfs maybe its a rearranging of the deck chairs but its coming one way or another. We talked about that etf stuff. Its not good to fool Mother Nature and that was a commercial and the Central Banks around the world are playing with the markets. They are trying to drive everybody into risk assets and you know what . That almost never ends well just nobody knows how it will end. Thats a little scary. Ron, theres Conspiracy Theory thats playing out. Its hard to argue with it quite frankly but the Central Banks in an attempt to stimulate inflation are using the commodity markets. China is now known to have over 80 tankers lined up to continue to build their reserves on the oil market which explains some of the buys that are still in the oil market. The refining is picking back up. You see extraordinary Trading Volume happening, rebar, flaxseed. Bizarre places. In order to create the demand and create the Inflationary Pressure to lift, now you have the bank of japan making the announcement they are in the top ten holder list of 90 of the equities that trade in japan. They continue to buy their stock market. That is market manipulation. That cannot end well. I think flaxseed is the future. But ron, that point on oil, you know we have, of course, some big moves coming out of saudi arabia. What do you do here if you either try to make a call on where the price is heading or are you avoiding the energy space entirely . So the two of you guys, both of you are remember around february i said mlped are so damn cheap and you both said youre nuts. Remember . They are up 45 . Great call. You made me a little worried. But what die say . Anyway the truth is they are cheap. Not cheap any more. Oil is not cheap. They came back. Theres a lot of supply. You just dont play heavy in that. We play the mlp because a lot of our clients were advisors. They needed the yield and its tax advantage. Otherwise we dont own oil. I think where you got to go, you got to look for where are things anywhere near cheap. I think the biotechs and otherwise stay with the multinational large cap. We should have been at 3 , 4 in emerging markets this year. Thats okay. We should be more in europe. Dont mind. Its fine. Stay in the u. S. And be safe. Very good. Got to go guys. Those of you who have drinking games waiting for mention of flaxseed this was a red letter for you. Your ship finally came in. Thanks guys. Lets get to saudi arabias multiyear plan to shake up its economy and reduce its dependence on oil. We have the map ready. Cnbc goes to riyadh tonight. Reporter hello. Its a total survival without oil. The deputy crown prince of saudi arabia, the son of the king says its possible for the kingdom to get there as early as 2025. He released his details about the National Transportation strategy, a plan to get this country diversified away from oil revenues. Hes basing this plan on 30 a barrel. Doesnt expect that oil price to go below that or at least not very much. He also said hes going about this in a different way. He says as part of this ipo of saudi everybody a ramco, it could be between 2 and 3 trillion. About that ipo of aramco they are valuing that above 3 billion. So very bold plans. They said some interesting things about the defense sector. This country is the Third Largest buyer of mega defense projects from the United States, from europe, particularly from the uk as well of these massive defense projects and basically what they said now is Going Forward they want to be buying at least half of everything from local suppliers here in saudi arabia. So thats pretty big news for the Defense Industry in this country or the bourgeoning Defense Industry in this country. One thing we didnt hear earlier from the crown prince, a lot of speculation whether or not they would allow women to get behind the twheel drive cars. Theres been so much over the last year and a half how women have to be a bigger part of the workforce. But theres no news about getting them behind the wheel. They said this is not a religious issue, its a societal issue and will move forward when society is ready. Thank you again. Its not just about what they are doing in the oil industry. This is a much broader set of announcements. Big time. Thats for sure. Dow is down 73 points. S p is down eight. The nasdaq is down about 20 points. Pretty much exact same. Everybody is down a like amount. While you were gone last week a lot of different behavior. The nasdaq in particular was higher. Again today everybody down. If you havent heard Valeant Pharmaceuticals has named joseph papa as ceo. Well look at whether he has what it takes to turn the company around. Well discuss what could be apples first yearoveryear decline when it reports its results tomorrow. Youre watching cnbc, first in business worldwide. Im in vests and as a vested investor in vests, i invest with e trade, where investors can investigate and invest in vests. Or not in vests. This is my retirement. Retiring retired tires. And i never get tired of it. Are you entirely prepared to retire . Plan your never tiring retiring retired tires retirement with e trade. I built my business with passion. 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Time warner cable is due to report its quarterly results. Valeant hiring joseph papa as its new ceo. Meg terrell takes a closer look. Reporter their hearts. This of course did come out last week that joe papa is moving over to replace mike pearson as ceo of valeant sometime early in the may. If you look at the shares of both of these companies, valeant is really down slightly, not really reacting a ton. They acted pretty positively on friday. In terms of valeant its r reinforcing whatever preconceived feelings they had about valeant. Folks who were bearish are saying does he really have the right amount of experience . Is turn around guy or a guy who just knows how to do a lot of acquisitions which isnt the right strategy for valeant. People who think this is an Inflection Point they say this guy has a lot of credibility, can steady the ship. If you look at perrigo shares. They are losing papa as their ceo but warn what will happen with their earnings and people are taking thats a big problem and models its growth Going Forward. Just thinking about, you know, if euro receiyoure josept do you do . Do you say well hang on the assets we have and become a more Boring Company or does he see value the approach valeant had and will he try to salvage that. How much larger has the drug pricing market turned against them. Reporter thats a great point. The fact that one of the things they cited in lowering their guidance was this new pricing environment. Its interesting that the ceo is going to valeant which some could say was one of the initial sort of spurring companies of this issue of drug pricing. On wednesday theres a drug pricing hearing on capitol hill focused on valeants business model. So the fact that this is affecting the rest of specialty pharma, this is interesting. By the way before we go the next topic with you, meg, kelly has paid me good money to mention shes written another article about finding value on valeant. Check it out on her spark column on cnbc. Com thespark. Meantime, meg, sarept ara, can bring us up to date on that. Reporter there are hundreds of Patient Advocates here just outside of washington, d. C. Right now the public testimony is going on. Theres almost unprecedented amount of time be a lotted to this for 52 speakers, most people very passionately pleading for the approval of this drug. Muscular dystrophy is a this drug was from a trial in 12 patients. Fda say theres not enough data to know whether this drug works. I spoke with a mother of two boys who has dochenne. Thats essentially the claim that the fda is making at this point that our boys are doing well because they want to be doing well. What does that say to the boys that just stop walking that they werent trying hard enough. Thats why they stopped walking . Were insulted. Angry but were motivated and were about to take on two and a half hours of real expert testimony. That two and a half hours is was going on now. You feel the anger in the room. What well have at the end of the day a vote from an outside panel on whether that data is there to support approval of this drug. Fda is set to decide by the end of the day. The stock is halted today. Meg, does ito like the fda is turning away from this decision. Big gap in those shares were on these advisory opinions that sounded like, to your point, they are just going to take this cautiously and its been a years long drawn out process. What happens if they dont get approval . Reporter its been an extremely long run for sarepta and two other drugs that have hit blocks at the fda recently. Folks are concerned, the wall Street Community is pretty bearish on whether this drug gets approved and people in the community are very concerned that if this drug doesnt get approved kids cant take it any more even on an experimental basis. I think i heard a huge cheer behind you in the auditorium. I wonder what thats about. Maybe a new development. Thanks, meg. See you later. Meg terrell there in maryland. Lets head to the break. 40 minutes left on the trading session with the dow down 74 points ahead of as about week of earnings. Central Bank Meetings around the world. When we come back why investors are hitting the sell button on xerox. Argentina turning a quarter after selling bonds last week. Kay kelly has a special report coming up. Thank you. Imagine if the things you bought every day earned you miles to get to the places you really want to go. With the united mileageplus explorer card, youll get a free checked bag, 2 united club passes. Priority boarding. And 30,000 bonus miles. Everything you need for an unforgettable vacation. The united mileageplus explorer card. Imagine where it will take you. Which allergyeees. Bees . Eese. Trees . Eese. Xerox helps hospitals use Electronic Health records so doctors provide more personalized care. Cheese . Cheese patient care can work better. With xerox. Thats it. How was your commute . Good. Yours . Good. Xerox real time analytics make transit systems run more smoothly. And morning chitchat. Less interesting. Transportation can work better. With xerox. Basisbasis. Welcome back. Keeping an eye on markets here, all down about. 2 of a percent. Dow is down 72 points. Gold was lower. Camera makers inventory levels nearing all time highs, those shares are down 9 . Gopros acquisition is one yankeely to attract new users. Xerox is trading lower. Maker of copiers and printers cut it its full year earnings due to competenexpenses to its break up. And wynn resorts highlighted the risk to gambling. Argentina making a return to International Capital markets. Kay kelly joins us with these stories. Welcome back. Good to be back. It was an astonishing thing that argentina did last week, something unthinkable a few months ago. It raised over 16 billion in the public bond markets in a deal reportedly was well over subscribed. Bond offer was successful enough the country paid off a group of long standing creditors it can fund its deficit which 18. 4 of gdp and avoid further borrowing if it wants to for the rest of the year. Argentina bonds rallied late last week and its stock market moved over 2 in the last week although in negative territory today. That spike comes after bond holder battled argentina in court to be made whole. It got paid 2. 4 billion it was owed. And paul singer said the back and forth between argentina and the hedge fund was a commercial dispute not an ideological war. It marks an important precedent for the rule of law. Interesting as well that this is one we remember when the ships were seized off the coast of africa and all of that. Yes. I understand that argentina is a different country now it has new leadership, trying to move in a more business friendly direction. People have been burned before trying to get their hands on this debt. Nathats absolutely true. Theres a long series of disappointment. But the new president has said hes dedicated to change for the better, to getting the economy in order among other things. A lot of people are bullish argentina medium and long term if some of this wood were chopped. They have vast oil reserves. A lot of people are excited about the national oil company. Its the number one holding for hedge funds. And, theres a lot of promise once normalization returns. Is it Market Perception is very important for argentina to be able to pull off this bond offering. Is it simply the new leadership that allowed that to happen . You know, i honestly think so. I think the administration had almost a marxist sort of view. They were opposed to paying out in fulton dollar on these bands after everything the country had been through. To be fair there were a lot of challenges, a lot of joblessness, a lot of poverty. They are not wrong they are in a tough position to pay out to any credit tore. Opticall

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