Happy new year. Happy new year to you, too. What do you make of what the stock market has done since election day . Look, i think a lot of it is its all positive because people think youre going of have positive gdp growth, less regulation. And i think if you have this 2 to 3 or 4 to 5 growth thats good for equities. Equities this year will be up 10 . Were calling it the trump rally. Is it fair to call it that . I think its you can call it whatever you want. To me its definitely a rally and the rally is because all the numbers coming out are all positive. Right . So everybody is seeing that theres going to be more positive there. And i think a lot of it is for businesses, the less regulation there is the better it ends up being. Its so interesting just given your place within the clinton calm pampaign, youre c to the clintons. Yeah. You wanted her to win, he won. Are you surprised the stock market has reacted the way it has . A little bit. And i think part of it is just as the numbers have come out but also a lot of things that have been coming, i think for businesses. Businesses look at it and say less regulation is going to be positive. And then sort of positive gdp growth which we already had now looks like its going to be even higher. And all the numbers and all the information that keeps coming out is all positive. So i think thats all good right now for the economy. Its funny, you know, people you know how everybody was positioned going into the election but the thought was if trump whips the market is going to tank. If mrs. Clinton wins the market is going to go up, presumably you were thinking she was going to win. Were you long . Yeah, we were long. I mean, we were long. We didnt really have any hedges on whatsoever. But part of that was our view was if hillary won the market was going up and if trump won the market would be fine, maybe go all it wouldnt go up as much. So i think at the end of the day everybody who was trying to make those bets actually got whips on i think our view is much more on whats the economy doing . So if people before the election said they took a broad view of the stock market and said, well, stocks are kind of fully valued. Market may be is a little bess expensive. If that was the case and now the s p is up 6 since election day how do you characterize what the market is today . Look, i think the market is definitely expensive but thats life, right . Its going to get more expensive. And the reason is because youre going to have positive numbers. Unemployment is going down. Gdp at 3 or 4 means a Rising Economic environment and youre going to have a rising stock market. So, yes, things are going to be expensive but they should be when youve got positive 3 to 4 gdp. Are you expecting a sort of new or better earnings picture . Ultimately thats what stocks are going to be priced based on, is whether earnings are going to go up more than people think and you get a expanding multiple so that stocks are not as expensive as you perhaps thought . I think your earnings should be going up. The only thing that may hurt that a little bit is what happens with rates, right . That as sort of the cost of capital is also going up that may have a bit of an impact but well see that in the first quarter. You feel like weve gotten ahead of ourselves at all in the magnitude of where the stock market has gone . I think a little bit. I think everybody is excited and everybody is hoping that the less regulations much more positive for the economy. I dont know. I just think its takes a while for everything to take effect. Guys, you sort of watched this stock market thinking some of the same sort of things that marc has talked about. I know marc, you tend to focus a lot on the credit markets. Are you worried about all if the economy straightens a dislocation in the credit markets at all or do you think it will be relatively benign in the way the volatility play out . I think right now its going to be benign. From at least what we see on the credit side, especially on distress. If a company has got a problem that debt is trading at too biggs of a discount. If everything is fine then the debt you know, its doing pretty well. With Rising Interest Rates i think that will have a little bit of an impact on sort of high yield debt. But all in all, it should be pretty benign. What do you make of some of what the president elect has done thus far . What do you think of the cabinet picks . Look, i think a number of them have been pretty good. But youve got a lot of different views, you know, within that cabinet. It will be interesting to see who is going to dominate and what really ends up happening. So gary cohn i think is a great pick. Ive known gary a long time. He knows do you know mnuchin at all . Hes a great guy. Im curious how to how you answer this question. Is markets have gone up in part, ive said it on numerous occasions on this program. There seems to be a change in tone of the white house towards business. Of things that just werent there for the last eight years. Do you think thats fair . Do you feel that as well as to part of the reason why stocks have gone up . I think so. I think if you look at it before the election, the last thing you would have thought was that someone from Goldman Sachs would have been the treasury secretary. Right . So i think what is clearest from this white house that anybody whos got business background thats positive and were going to see how that works out. I think there has been a bit of a shift and i think prior to that there was more of a focus of, you know, its not that business is bad but weve got to be careful. And now its very much business is very good. I mean, it seems to be theres a whole sort of i cant to call it an era of good feeling. I dont know if thats overstating it or not but the Corporate Culture itself seems to be more optimistic than its been in nearly a decade. It is. If you think about it for your secretary of state youve got the head of a Major Oil Company who is going to be secretary of state. Again, you never would have thought that. When youre looking at people that are going to be in real positions of power theyre all people who have massive business experience. And, junl, when you asked the top of the show whether or not we see more juice as judge calls it as far as catalysts for sending the market higher, i think one very significant one is that 19 states at the turn of the calendar increased minimum wages. So we could talk around the desk about wealthy individuals dont spend as much when they get a little money back from a tax cut. But these folks, 8 million, judge, because were talking california, oregon, washington, colorado, arizona, a whole bunch of states, the ones i named are the most populous, i think, in that group, including new york, is more money to spend. More assets chasing the same amount of goods, tends to push prices up. I think thats another positive thats going to play out as more and more come in line throughout the year because some turned on the calendar, marc, and some will be enacted later in the year. I think a significant amount of demand is going to be pushing on this. If you think about it Consumer Spending is at least 60 , generates 60 of gdp. I think when you look at that and if youre going to have more capital into the system, i think youre absolutely correct. Cool. How is the agenda or the expected agenda of mr. Trump impacted the kind of opportunities that you see globally . Today. Maybe ones that you didnt see before or didnt expect. No, i think with him, so for was, i think youre going to find less distress in the United States. The simple reason. I think youre going to have that under hillary anyway just simply because as gdp goes up and the economy is doing well theres just less diss stress. Were the opportunities where r. Still in energy. I mean, youve got a huge turn around there. The biggest opportunities for us really are in europe because europe still has a number of issues. And those economies are not growing as much. And youve got a lot of different problems with their banks. You take a look at our banks, our banks are right now the most well capitalized lanbanks in th world. Look at whats going on in europe, those are not. Thats where the opportunities are. You look at though eurozone pmis are arguably much stronger than people would have expected that they would be at this particular time. No, they are. But like one of the biggest problems youve got in europe right now on the direct lending side, banks arent lending to small businesses. So youve got this huge shadow banking thats been created where firms like us and other firms are coming in and lending money. And think about it. Youve got negative rates in europe. Right . So you would think people should be able to borrow. Were able to charge libor plus 8, 9, or 10 in an environment where you have negative rates where all anybody is looking for is like a positive 1 . So youve got this massive disconnect thats going on in the economy out there. Whats the biggest risk to this entire sort of narrative that weve been talking about . Is it the dollar rising too fast, is it rates rising too fast here in the United States, the fed getting a little offsides in how they handle the situation . No, i actually think the biggest risk weve got is something we dont talk about which is systemic risk. And thats really what youve got out there with the european banks. And its still there. And you see the ecb as doing everything they can to make sure that theyre controlling that. I mean, you saw right now that in italy theyve taken control of one of their banks. And you know, thats something that you didnt think was going to end up happening with everything thats been going on. So you still got some real fundamental issues in europe. Are you buying the debt of european banks . No. What we are is buying the assets of european banks as theyre selling those loans and theyve got to sell those loans at a discount. Interesting. Josh . Yeah, marc, im curious what your thought are on the socalled end of the bond bowl market. A lot of very smart people in fixed income are saying we might have seen it last summer. The crescendo being, i dont know, trillions of dollars in negative yielding, sovereigns all over the world. And if thats the case, does that mean for as far as the eye can see bonds will not be a good investment . You give people a little bit of a sense of the way someone in the bond market thinks about it, because i think right now is a lot of fear among investors who maybe bought some fixed income etfs, they dont know what to think, they dont have the background, we havent seen a bear market for bonds in 35 years. I just think, look, i think its hard right now because youre right, when you sort of see negative Interest Rates out there the whole focus today is am i buying something in a dollar thats going to pay me back that dollar . Whats the rate im getting for that . Am i getting paid enough . The problem today is i dont really think youre getting paid that much for that. Right . So i do think its sort of peaked and right now the focus is going to be much more what am i getting back, right . And if rates, as rates start moving up, then what ends up happening is that dollar that you bought, you know, the price of that goes down. Right. So i think people are going to be a little bit surprised at that because theyre not expecting that. So somebody with a tenyear treasury bond etf an adviser put them in to and inflation is above the 2. 6 or whatever its yielding, that could be kind of a surprise in real dollars for people that just havent seen this before . Right. Because theyre not expecting it. Right. At the end of the day thats really what ends up happening. People think theyre getting something and at the end theyre going to go, wait, what happened to me. And i think thats going to be the change. I think whats happening now is youre seeing a big much bigger focus on equities. Whereas in the past a big focus was on sort of on high yield or on sort of fixed income because they were supposed to be safer. Now people are moving away from that and are saying it for me to generate those returns ive got to move into equities. Lastly before we take a break maybe. So back on this story about europe, if distressed opportunities are harder to come by here in the United States just because the environment thinks or feels like its going to get better, and some of the distressed opportunities in europe may be too distressful to invest in, i dont know, where in europe are you really focused and how bad do you truly think the situation could get there . So you say things like systemic risk, that brings crisis in to yeah, but that the vernacular. Thats a risk and the ecb will mick sure that doesnt map. I would argue its going to be in northern europe. You want to be investing in germany, in the uk, you want to be investing in nordic countries. Why . Rule of law. And also you can generate high returns. You can generate that 10 , 15 return. Buying things that are pretty safe. Here in the u. S. What youre going to have is idiosyncratic type of opportunities where theres always companies that are in trouble. Theres always situations. By the way, now is a phenomenal time for one simple reason, because youve got positive gdp growth. Where you like to be able to invest where youre investing in a company thats got an issue and its more because its highly levered as opposed to anything else in a rising economy. All right. So youre not going to see as many opportunities but the ones you do see youll be able to do pretty well. As long as youre looking in the right places. Hopefully, yes. Dominic chu, you have a market flash for us . S i do. Retail stocks today because you have the spider retail etf up more than 2 on pace for best days since early december. Gap shares among the leaders so far in that etf. The stock is up 5 so far. Adding to its 9 gain so far this week. Shares are there on track for best week since mid november. Other top gainer, abercrombie we, gnc, notable underper underperformers. If there is a ree tags perhaps were see that action in retail, scott. Back over to you. Let me just ask you then. If you look at retail, its one of the area wheres it clearly has been a distress because of what amazon has been doing to anybody, everybody. Do you see opportunity theres . Either on the equity or the credit side . Its hard. I mean, its i do think thats got a bunch of issues. I think at the end of the day the only positive name end up being what you talked about little bit earlier were theres going to be more Consumer Spending but the problem i think for us is when you take a look at retail unless youre going to be investing in an amazon or those types of companies which obviously we dont, there isnt that much opportunity. I mean, because all youre really going to look at is sort of whats happening on the real estate side. Look at sears i was thinking of sears. May be other, you know, giant box General Growth Properties in simon teamed up to basically prop up aeropostale and the bankruptcy judge allowed it. If thats a prototype for whats going to happen in mall based retail its hard to make the case you would want to own simon let alone the stores. I agree. Im with you on that. Its too hard. All right. Heres what else is coming up on the Halftime Report with marc lasry. A big call on energy is our call of the day. Were talking chevron, eog, newfield, occidental and southwest energy next. Plus, why it may pay to get bullish in ibm before the new year. Deere, United Health and level 3 all hitting new multiyear highs today. All are part of the cnbc iq 100 index which has out performed all the major indices this year. Up 26 in a year. For more on the cnbc iq 100 index go to cnbc. Com iq100. More halftime coming up. At 2uw we have news on cbs and hulu. Cbs and hulu are in the final stages of the talk to include the cbs network and hulus Live Streaming service. We expect the companies to announce a deal later today. This is a key piece of Hulu Streaming Service because cbs was the one major broadcast company, the one Major Media Company not involved in this. Notably for cbs, les has made a dig r big deal to make sure they are paid for their content. Cbs will be earning more than 3 per monthly subscriber when it starts off and over the course of the multiyear deal will finish the deal earning 4 for subscri subscriber. That is more than cbs currently earns from networks from traditional distributors. Those shares trading up nearly 2 . Scott, back over to you. Lets move to energy. Up nearly 1 this year. Coming off the best year since 07. Today bank of america is shaking up energy picks for the new year. Upgrade chevron and eog to a buy, downgraded oxidaccidental neutral, southwestern to sell. Joe, what do you make of it . I like it. Theres still room to the ups e upside, one of the things you want to focus on is the recovery and survival of shale. If you look at eog certainly in that environment they win. Diamondback energy is the name that i own, 9 billion type market cap. Theres going to be mma in energy and the shale survivors will be able to go out and acquire assets from the troubled companies. What do you think . I love baker hughes. Big company we know thats getting in bed with them. I think thats huge because of the exposure in shale, judge. So thats the stuff that comes online. As soon as we push it into the 50s as we have, that shale production as dom reports every week goes up. Rig counts go up. Push towards 60 its going to go up faster. You said, marc, in the past that some of the Energy Credit opportunities were opportunities of a lifetime. You have to be willing to wait. Some of the investments you made may have been a little early where do you stand on those trades now . Look, its, you know, last year our funded exceptionally well. Energy fund was up quite a bit. I think if you take a look, you know, i could give you a specific example like pack drilling. Sure. If you look at Pacific Drilling and i think you talked about diamondback, heres whats interesting. For a rig, the values same rigs that transocean has or any of these companies have. Theyre stateoftheart all new. If you look at what transocean rigs are valued, valued at 400 million a rig. Look at pac drilling, valued at 200 million. Why . Thats where the debt is trading. You can buy these at a 50 discount and sooner or later youre going to have what you talked about, whether its a transocean taking over a Pacific Drilling or anything like that you are going to have you cant have this massive ash tranlg, you cant have 100 arbitrage, 50 discount or 200 worth 400. Right . Thats what