10year note yield around 1. 6 and crude oil the story as oil prices down, as you see it right there. Maybe we get the fed moving before the end of the year, right as we come out of the jackson hole meeting. A look, though, at wti. Lets get to our road map this morning. On this late august monday. Mylan, the controversy continues. The Company Announcing a generic version of its epi pen. It is going to be enough to satisfy critics and congress . The herbalife Hedge Fund Drama man here we are, year three, four, five, ackman, icahn, going yet another round. On this battleground stock. Well have news from williams by the way responding to activist pressure and the proxy fight that is looming for the company. It nominates three new independent directors to its board. I will give you updates there in terms of what we can expect on that front. First, though, lets get to the broader markets. Economic data to consider this week includes fridays key job reports especially after yellens marks at jackson hole where she says the case for a rate hike has strengthened. Data out shows Consumer Spending rose for a fourth straight month. It was up 0. 3 in july. Incomes up 0. 4 . Jim, im back from a twoweek holiday, not that i havent followed the markets although feels like where we left off, jackson hole, obviously, being perhaps the key component for the market to digest over these last couple weeks. I think theres been a subtle change in the market since you left and the subtle change is, there is a bit underneath tech but a bit under the banks. People want the banks, betting we get two rate hikes, starting to annualize compares, credit has loosened. You gave Consumer Spending picked up a little. Credit card data has been strong. The takeovers in tech have been remarkable. Its been also the notion some of the more commodity goods, particularly whether it be disk drives or flash and the semiconductors are strong. Against that we confuse things with mylan. Health care is rolling over. Started last week in particular. Why . Well, i think that people like the fact that the fed, as a way to be able to tell the economy, they like the fact that the fed is saying look, things are stronger. The fed obviously is benefiting from the fact that brazil is into the bad, russia has gotten strong, india, that china doesnt seem to be that bad. But the european numbers last week from the companies that are international, were as strong as american numbers. But we dont want is also, by the way, they take their cue that oil hasnt fallen like why. Theres a big glut, pumping like mad. Whats happened is that i see people coming back from vacation, buying tech, thats a very traditional pattern. These health care companies, i think that people feel they lose no matter what in the president ial cycle. Weve seen this before and weve seen this reaction throughout this year owe kalcc n occasionally with price increases by so Many Companies or i should maybe thats not fair. A lot of companies. Valeant was under the microscope this year for all of its price increases. In front of congress. And now the latest mylan. Its interesting, because the epipen price increases have been going on for a long period of time, something that crossed my radar some time ago in part when they were trying to buy teva and then when they were trying to or excuse me, right, and then when teva was trying to buy them and perrigo they were trying to buy perrigo came up a number of times and also in patent challenges out there, kyle bass, Hedge Fund Manager i know well, had a fund put together to challenge patents. Why now . You know, the price is up enormously, but why now as opposed to six months ago a year ago, two years ago . Theyve been raising this price for years. I think a lot of what happened is when you raise prices for drugs that are for children, it gets social media. One of the things thats changed is twitter. The notion of building a regime of people who are angry. Its more difficult when you have certain diseases that dont have vocal lets say they dont have vocal moms. This is like a vocal mom issue. Another thing thats surfaced is just because something is generic, doesnt mean the price examines down. No. Other companies have to compete. What happens is we know in the old days, mylan would immediately issue a drug, the moment something came off patent and teva would issue a drug. In the Indian Companies would be. But because the margins are low, whats happened is generics are targeting the Generic Companies are targeting specific drugs and that competition doesnt come in or try to have them come in and the fda blocked it. You raise prices in part because you think you can get away with it. Which is the cantist system. But also because you expected another drug is about to come in. Theres vigor. Try to make extra money before the generic comes in. The fda never talked about that. Everyone is blaming mylan and mylan, obviously, is raising prices, as did valeant, but no one theres no per se organization. Express scripps got hurt. Express scripps has to pit one against the other. There is no other then its very difficult to do that. We should point out valeant a Pharmaceutical Company and mylan a generic company. Pharma has been getting hit in part because of the sentiment around this. I want to get to the mylan news as well. They did introduce, we should say, of course, that first generic to its to several weeks from now theyre going to launch at around 300. This generic epipen priced at about 50 below the branded epipen. Mylan taking actions to reduce outofpocket costs last week after all of this pressure. Jim, to the broader thesis. Right. Investors and pharma believe what . This pressure is going to continue, that you dont a Clinton Presidency which appears more likely based on the polls at this point, that congressional action is going to continue to hold pressure to the pharmaceutical companies and their ability to raise prices. Because of the house and senate, Drug Companies the house is still a long shot for the democrats. It is. You see those articles about how you do. But i think that its all the piece. Utilities went down, Real Estate Investment trust went down, 3 or 4 yield not enough defense against a fed reserve raising rates so you can get a little extra if you just save and the Drug Companies fit in, as do the Consumer Products, the Consumer Products goods companies. Now david, the takeover world that youre in, has kept the bid under Consumer Product companies. We keep thinking, hershey never came in. Right. Kellogg never. General mills is strong. But we dont see a lot of takeover talk in the pharma after it seems to me. Pfizer paying 81. 50 for medivation and sanofi was the covereded by at 80. I just well before this, before this mylan i dont know we were talking about m a gives you aeal valuation barometer youre happy to take to the bank every day. I think that they go under cover when we get these kind of these blips in politics and then they come right back. Sanofi does have apparently everybody has a war chest. J j has a war chest. Pfizer will buy anything. You know pfizer. Theyre like mikey with life cereal years ago. Give it to mikey, hell eat it. Give it to pfizer theyre buy it. I like the cereal business, red hot no it has been red hot. Raised the prices. My life cereal. I enjoy that. I like that carl makes carls wife makes this unbelievable granular stuff. Really. Never been party to that. You know, here we go. Yeah. Playing favorites on the anchor desk isnt he . I think i made no secret i like granola. You are a granola fan. Back to yeah. So look, i want to own the banks, david. And i want to own the chips. The chips. Every time on the banks its been a mistake to own them. Completely. Totally wrong. It has. Oh, get a rate hike, going to go to 50 basis points. You know would it be, could it be . 50 . That will do a lot for them. Im stuck in a world where jamie dimon came on the floor and said four rate hikes equals x. Bank of america is so levered to the rate hikes and that stock, come on, that stock is moving. That stock gets closer and closer to the 16. 30 book value. That i will another front run you. The key to this market. Right. Most are trading a lot are trading below book and as we pointed out a lot dont seem to be having a return on equity thats above their cost of capital. Morgan stanley moved from 28 to 31 while you were away. 31. 16. Youre right. No earnings news. Yeah. No earnings moves in semiconductors and banks very telling. Semiconductors i have a list of a half dozen. Theyre consolidation play. Too many semis, too many retailers but we havent seen that. You missed a blood bath in the Dollar Stores. And a lot because walmart cutting prices. The analysts were blind sided by Dollar General cutting prices on 400 items. Maybe the analysts dont shop at the Dollar Stores. They shop at neiman maybe or go right through the brioni stores. I dont know. Maybe not tiffany. Analysts these days are not that well paid. One might think they look for the bargains. Macys. Macys. A lot of stores they told us last quarter. But the Dollar Stores know. Only burlington, the old Burlington Coat factory, a bid among the discounters. Reading and watching from afar last week and thinking herbalife again. Carl icahn buying 2. 3 million shares in herbalife late friday. Sources tell cnbc he may have been interested in exiting in august and jefferies ubs to find a buyer for a stake but nothing materialized. Icahn issued a statement on friday denying he suggested to sell herbalife stake. None of that is my reporting. I like to make that clear. I stayed away from this a long time other than watching it because it is a carnival. I have been working on the earnings. I know youre not with that, this is like hitchcock, who cares what herbalife will earn, but thats a fundamental because when you put the new rules together a lot of people who feel like instead of being able to earn 455, they will earn 2 bucks. Show every receipt for every sale now. They claim they have software. Here in the states. Thats a big issue for them. Will they be able to do it and successfully so and what is the actual demand for the product. Versus icahn saying, this is a this is a viable product that is going to grow and ackman continuing to say the ftc in many ways echoed what he had been warning about for years. There is earnings power, some elusive earnings power. Theyre still using the volume points which i wish Michael Johnson i wish they would both just end enough already. Go private. It has a lot of debt. Big convertible they did that hurt them. They werent wise about it. Ackman still fighting the fight, down on the position. Icahn is up on his. Look, there is room for this kind of marketing if you do it the way the ftc said. But it also means you cant start the storefront, you cant store it in your garage and book the earnings. I mean, there had been a sense from the ftc, 20 of the business, asckman may say is higher than that, me selling it to you and booking it before it got sold to the ultimate customer. A Huge International company, probably hurt more by the strong dollar than any other company i follow. But if you take a look at other companies with the model that i believe ackman won, neither you one wants to be put in the same immediately herbalife, ricks going called it toe cheese when i had him on. But herbalife he said this is a really he just really wanted to distinguish him from the other multilevel marketing. Toe cheese. Not very nice. Rick was really adamant these guys are bad guys. My issue is that if there is a model that you can use and if they use the model i think earnings power will be hurt. Not wiped out. Under ackmans scenario, he says zero. Supposed to be zero. It cant be a zero. Come on, i wish they would move on. Want a new stock for them to football. Yeah. Caesars entertainment. Right. Why not. Up sharply today. Carl icahn keeping track of his moments is going to be at delivering alpha with other big investors and important people such as jack lew, paul singer, thats by the way on september 13th mark your calendars now. I have a feeling were going to be telling you about it as we get closer to that day. Coming up on this show, right here today, were going to talk about williams company, active investors going after it, company nominates three new or has three new directors to its board and another look at futures here as we head to a quick break here. You can see we are looking for a higher open ever so slightly on the broader markets. What if a company that didnt make cars made plastics that make them lighter . The lubricants that improved fuel economy. Even technology to make engines more efficient. What company does all this . Exxonmobil, thats who. Were working on all these things to make cars better and use less fuel. Helping you save money and reduce emissions. And you thought we just made the gas. Energy lives here. Williams Company Announcing it is appointed three new directors to its board. Those all have significant experience in the the natural gas, the pipeline business. For example, berk strom was a former associate of aubrey mcclendon, Scott Sheffield ceo of pioneer natural resources. Gary sutton. Oh, no. Pioneer scott or no Scott Sheffield. Its interesting. Hes retiring. Which is too bad because hes a great visionary and i think what will happen is when you see somebody like him involved, david, hes a total heavyweight. You remember he has the permian and remember hes use 2g 2 for some of the oil out of the permian. 6 to 9 ppl. Independent, yes. Another heavyweight. This is done last week, you may recall, Keith Meister from corvex, sosh sorebin who stepped off the board with four other directors was unprecedented because they said they believed that current ceo Alan Armstrong should not be the ceo. Now theyve replenished the board with three but facing a proxy fight from mr. Meister. Seems like people come on cnbc and talk their position. I will say well, hes getting ready for a proxy fight. Had the deadline in front of him, had tnominate, didnt directors to identify so put in placeholders arguing shareholders will trust and believe he will put in the proper people when that comes. The question is will there be a settlement. Theres also this other story out there, the ftc reported last week enterprise, a lp the real one. The dunkin family, they had made a bid at some point. I can tell you while there had been from enterprise, it was done during the worst days at williams when they were still dealing with the fallout from the failure of the ete deal and really didnt engage. The offer made while at at premium when the stock was lower. Williams interestingly has actually if you look at it over the last few months, even the years, rebounded nothing to where it was but has rebounded significantly from the lows. It bothers me people dont distinguish between oil and gas pipelines. Why is this. Natural gas the draw down from marcellus and utica is extraordinary. Those are the biggest fields in the country. Bringing those down instead of making it directional to the northeast is a great business. One of the reasons why ete wanted williams. Build this Natural Gas Network its great. Oil, unfortunately, is saturated. Thats different. We dont need more Oil Pipelines. We had a lot of Oil Pipelines taking the place of crude by rail. Down dramatically. And out of the backikken. The permian is still profitable sheffield and pioneer, the old st. Marys is there. Sm. We see a lot of Companies Like simmer rex is there making fortunes because the price of drilling has come down, the actual ground was always good and you have already existing pipe. To get that marcellus and utica down to where its in use to send it overseas, given those huge ships that are now remember become an exporter. We have. And then also the five the private free port behind that. Youre going to have thats going to work. Big export terminals yeah. Its all going to work. Finally here on williams, well see. You know, settlement still a possibility it would seem but theres looks like theres more drama to come for that company which simply cant seem to get out of its own way when comes to at least upheaval. Up next cramers mad dash down to the opening bell. Another look at futures this morning. 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Six minutes before the opening bell. We have police and mad dash for you as well. Talking mu, micron. Starting to get Deutsche Bank raised price target 15 to 20. Stifel, 15 to 18. On a call for hp, which is the hpq, they talked about tightening in flash and in glass. Ever since then, all these stocks have been going up. Obviously micron has dram and flash. W why . Not because of anything specifically to the printer of hp, they change all these things, but its specific to a build up of the apple watch, dont read anything into tha