Transcripts For CNBC Fast Money Halftime Report 20160405

We will discuss the markets in full detail in just a moment. Also want to let you know we are waiting on the president to make those comments from the white house on those new regulations regarding tax inversions, ones that have seemingly put that pfizer and allergan transaction, 160 billion transaction, in jeopardy at this hour. We will follow that story. We will take you live to the white house and we will discuss the broader ramifications of it as well. But lets begin with the markets. Stephanie, you do have the market. The dow heading for its worst twoday decline since february. Brent and wti are rolling over today. Is that what the rally hinges on . Well, i think we are waiting for earnings. Its always a tricky time between earnings because then we get so absorbed in the macro. Im actually looking at the dollar, looking like its peaked. Oil looks like its in a training range. Its not collapsing, its kind of stabilizing and in a range. Interest rates are low so i think thats a good fundamental backdrop. Whats confusing is the fed. The fed was confusing. The data, the macro data has been mixed although the ism services was pretty good today. Theres a lot of moving parts. Lets wait to see what the companies have to say. You can take issue with part of that and say maybe the dollar which is moving higher, by the way, has hit its floor. Maybe its about to go the other direction and thats whats scaring investors, too. I think its in a range. Listen, friday we were 2072 on the s p. We are getting a natural correction right now. The environment has not changed very much. Theres a lot of uncertainty, whats the fed going to do. Pricing in a december rate hike is the right thing. There are some things in april thats going to keep the s p from rolling down further. 2001 is the line i would look at from a technical busineasis. It comes down to earnings. Maybe we have marked down the contraction in earnings enough where we can get a lift once they come out on april 11. Whats going on today in the market . Is it in part the slide we talk about in oil . Is it a little bit of strength in the dollar . Is it the market getting a little spooked by the government and these new tax inversion regulations . Which have all but crushed the pfizer allergan deal . If you put all this together, absolutely. Theres a reason for a little bit of pause. Joe brings up the fact we just ran up to the new highs and all the rest of that. You look at all of that and the low volume and the fact volatility has absolutely collapsed and now today its up about 10 , still extremely low, though, in the mid 15s. When you look at volumes, yesterday, for instance, under 13 million total option contracts. The volumes over the last couple weeks has been extraordinarily low and thats got to be concerning but you brought up a really good point as well. Oil. It doesnt affect the market every single day if it goes down, the market does this and that, but when you look at what oil has done from 40 and now you see it easing back and easing back and easing back. Sooner or later that becomes a little bit of weight once again unless it finds a range. Is the rally in jeopardy now . I think you will get the pullback. If you look at the s p 15 times earnings, thats fairly valued. We got a great bounce from the bottom but thats when we had a fear of recession. Recession fear now has dissipated. What we are looking at, what are earnings going to say. Are they going to say we will be flat to down or are we actually going to get confidence from companies saying guess what, the consumer is buying, we have solid balance sheet. I think the other thing key to watch is the ipo market. We start seeing that open up, you will have a lot more confidence. Peebople are waiting for tha. We have a guest coming on later who will discuss that very topic. One of the biggest drags on the dow is disney today on news the companys Succession Plan has been thrown into question with the sudden departure of bob igers heir apparent. One close watcher thinks he knows a perfect replacement. A year ago when i wrote a column which now seems premature praising him for his Succession Plan, Sheryl Sandberg was the name, what about her, shes perfect, we love her, shes a woman, shes digital, shes young, she knows the consumer base. Yes, shes on the dream list. No doubt about it. Interesting thought. But dream list and nightmare scenario. No one expected this. Its a very big surprise. He was very well regarded. No one really knows what the story is behind it. What does it do to the story . I think as iger continues to run the show and if he extends which people are expecting its probably status quo but it doesnt change the fundamentals. The fundamentals are kind of challenging right now for their espn business, the subs and it may not be slowing as much as people think but its still slowing. I think they have issues in terms of theme parks up against very tough compares. Same with the film business. Its not a disaster but it trades at a premium to the group. I think thats a little too rich. Cut to the chase. You wouldnt own it . No. Theres other things i would own in this space. Whos on the other side of that . I on it. As a matter of fact, i said last time when it got under the 100 level i would consider adding to it because the reaction today, this move we are seeing today isnt about the fundamental story. I dont necessarily disagree with you on the fundamental story. But there are already questions about the fundamental story. There are. Which is why espn has been at the top. Its been hovering around 100. The reason you see the move today is absolutely about the Succession Plan and thats concerning for people. It really shouldnt be, quite frankly, because he was 2018, my perception would be they push it to 2020 potentially and start going through the types of candidates they really want in place. Doug croits is an analyst, he was surprised like everybody else with this announcement. He joins us for our interview. Welcome. Good to see you today. You say no one saw this coming. What does it mean . Yeah. Its surprising and a little mystifying, frankly. Toms been a Senior Executive at disney for two decades. One would have thought that he was a pretty known quantity and they had evaluated him thoroughly and he was the heir apparent. Obviously seems like the board made a different decision. There are reports that they were concerned about his ability to handle the creative side of disney. But again, i kind of wonder if this might be a little bit of case of Familiarity Breeds contempt. Hes such a known quantity, it was probably easy to pick flaws with him potentially internally. Couldnt they have who are they going to find . Couldnt they have done that, though . Hes been there for 20 some odd years. They could have figured it out before they named him as the heir apparent, right . I tend to agree with that. Thats why this is so surprising. Okay. So if not him, who . What about Sheryl Sandberg . Well, you know, if its true that they are concerned about his ability to handle creative content, i dont know why you go out and hire Sheryl Sandberg. She runs a platform, web platform, not a content company. I think if you are looking for someone who runs a content company, you kind of have to stay in the media industry. Maybe you could define it a little more broadly than just traditional media but you really want someone in charge of a content business. I dont know that theres a really long list of candidates of people who could both handle a company the scope of disney and are good on the creative side. You might have mentioned peter churns name five years ago but hes 65. That date may have passed for him. There arent a lot of people that quickly come to mind. Is the stock investable today or not . Well, disney is always investable. Its one of the pillars of our economy. We have a market performer rating on it. I do echo the comments earlier that it is a little bit expensive for a company that sits in an industry that is facing some pretty significant secular head winds. But its a solid company. And yeah, bob iger will be here for another two years. People love bob iger. Part of the problem here, this is almost like trying to replace john wooden. Whoever comes in is probably going to be perceived unfavorably. You have a market perform. What if bob iger now says you know what, i will stay around until 2020, couple more years . Is that enough of a needle mover for you . I think it would reassure the Investment Community in the near term you are going to have a steady hand. It does sort of beg the question of whats the Succession Plan. It gives you a few more years to potentially develop people internally. But you know, the day is still coming when hell have to step down. Appreciate the time today very much. Doug, thanks. Thank you. Jimmy herick won a title with ucla, right . Yes. What about the concept that possibly this board knows exactly what they want . They want someone on the media side, someone outside of the company . Maybe they did not want tom. Maybe thats the reality. Clearly they didnt. First time since 1984 Michael Eisner wasnt so bad, was he . Maybe they do have a candidate on somebody mentioned on twitter, forgive me for not remembering who it was, im not trying to slight your great thought of what about if it is Sheryl Sandberg, do you go long disney, short facebook . Pair trade . No. Facebook have such a great bench. Shes wonderful there. Shes done a great, great job. If she goes to disney, yes, disney gets more interesting. You hold on to facebook no matter what. Coming up, we are awaiting president obama. He is set to speak on the economy and the Treasury Departments new proposed rules on tax inversions that have put that pfizer allergan transaction in serious jeopardy at this hour. Well take you to the white house live. What the new proposals could mean for allergans deal. And one wall street firm says its time to buy starbucks and wendys. They found out whos been hacking into our network. Who . Guess. I dont know, some kids in a basement . You watch too many movies. Who . A Small Business in china. A business . They work nine to five. They take lunch hours. Like a job . Like a job. We tracked them. How did we do that . We have some new guys defending our network. New guys . Well, theyre not that new. Theyve been defending things for a long time. [ digital typewriting ] its not just security. Its defense. Bae systems. Billions are spent to confuse and, dare i say it, flummox the american public. Save 16 on Car Insurance. Switch now. Well at compare. Com, we say enoughs enough. So we constantly scrutinize millions of rates. Answering the question once and for all, who has the lowest. Just go to compare. Com and get up to 50 free quotes. Choose the lowest, and hit purchase. So you can get back to whatever it is you civilians do when youre not thinking about Car Insurance. Compare. Com all right. Theres a live shot of the white house, where momentarily we do expect president obama to deliver those remarks on the economy. But most certainly, on these new regulations and rules proposed by the Treasury Department regarding Corporate Tax inversions. They have certainly put the pfizer allergan transaction in the crosshairs. 160 billion was that deal which is now in some serious question. Meg terrell joins us from new york city with more. What do you make of this and what does it mean, do you think, for the sector you cover so closely . Well, its a fascinating turn of events. It really took everyone by surprise. The treasury has come out three times with rules trying to curb inversions and this third time seems like it may be the one to do it for this of the biggest inversions, this 160 billion pfizer allergan deal. People are saying this actually specifically targets this deal with one of the provisions set out. Lets look at what these new rules would bring to the table. There are two things here. One, people are calling quote unquote, threeyear lookback. Another thing called earnings stripping. Earnings stripping refers to shifting debt or assets after a deal in order to lower your tax rate. That one is onerous to some people. The threeyear rule is the one that affects fiezer and allergan. That requires a target company to own more than 30 of the combined inverted company in order for the American Company to take that foreign tax rate. This sounds very complicated but it all matters how big we can consider allergan to be compared with pfizer. In this lookback rule it would essentially say that two of the last big acquisitions allergan d did, those wouldnt be counted in allergans size versus pfizer. So it would have a much smaller base to compare take you live to the white house and president obama. As we learned last week, americas economy added 215,000 jobs in march. That means that our businesses extended the longest streak of private sector job creation on record. 73 straight months, 14. 4 million new jobs, unemployment about half of what it was six years ago. This progress is due directly to the grit and determination and hard work and the fundamental optimism of the american people. As i travel around the country, what always stands out is the fact that the overwhelming majority of folks work hard and they play by the rules, and they deserve to see their hard work rewarded. They also deserve to know that big corporations arent playing by a different set of rules, that the wealthiest among us arent able to game the system. Thats why i have been pushing for years to eliminate some of the injustices in our tax system so i am very pleased that the Treasury Department has taken new action to prevent more corporations from taking advantage of one of the most insidious tax loopholes out there in fleeing the country just to get out of paying their taxes. This got some attention in the Business Press yesterday, but i wanted to make sure that we highlighted the importance of treasurys action and why it did what it did. This directly goes at whats called corporate inversions. They are not new. Simply put in laymans terms its when big corporations acquire Small Companies and then change their address to another country on paper in order to get out of paying their fair share of taxes here at home. As a practical matter, they keep most of their actual business here in the United States, because they benefit from american infrastructure and technology and rule of law. They benefit from our research and development and our patents. They benefit from American Workers who are the best in the world. But they effectively renounce their citizenship, they declare that they are based somewhere else, thereby getting all the rewards of being an American Company without fulfilling the responsibilities to pay their taxes the way everybody else is supposed to pay them. When companies exploit loopholes like this, it makes it harder to invest in the things that are going to keep americas economy going strong for future generations. It sticks the rest of us with the tab and it makes hardworking americans feel like the deck is stacked against them. So this is something that i have been pushing for a long time, since i became president. We made our tax code fairer and have taken steps to make sure our tax laws are actually enforced, including leading efforts to crack down on offshore evasion. I will say that it gets tougher sometimes when the irs is starved for resources and squeezed by the congressional appropriation process so that there are not enough people to actually Pay Attention to what all the lawyers and accountants are doing all the time. But we have continued to emphasize the importance of basic tax enforcement. In the news over the last couple of days we have had another reminder in this big dump of data coming out of panama that tax avoidance is a big global problem. Its not unique to other countries because frankly, there are folks here in america who are taking advantage of the same stuff. A lot of its legal but thats exactly the problem. Its not that theyre breaking the laws. Its that the laws are so poorly designed that they allow people if they have got enough lawyers and accountants to wiggle out of responsibilities that ordinary citizens are having to abide by. Here in the United States, there are loopholes that only wealthy individuals and powerful corporations have access to. They have access to offshore accounts and they are gaming the system. Middle class families are not in the same position to do this. In fact, a lot of these loopholes come at the expense of middle class families, because that lost revenue has to be made up somewhere. Alternatively, it means that were not investing as much as we should in schools, in making college more affordable and putting people back to work, rebuilding our roads, our bridges, our infrastructure, creating more opportunities for our children. So this is important stuff. And these new actions by the Treasury Department build on steps that we have already taken to make the system fairer but i want to be clear. While the Treasury Department actions will make it more difficult and less lucrative for companies to exploit this particular corporate inversions loophole, only congress can close it for good. And only congress can make sure that all the other loopholes that are being taken advantage of are closed. I have often said the best way to end this kind of irresponsible behavior is with tax reform that lowers the Corporate Tax rate, closes wasteful loopholes, simplifies the tax code for everybody. In recent years i put forward plans repeatedly that would make our tax system more competitive for all businesses, including Small Businesses. So far, republicans in congress have yet to act. My hope is that they start getting serious about it. When politicians perpetuate a system that favors the wealthy at the expense of the middle class, its not surprising that people feel like they cant get ahead. Its not surprising that oftentimes it may produce a politics that is directed at that frustration. Rather than doubling down on policies that let a few big corporations or the wealthiest among us play by their own rules, we should keep building an economy where everybody has a fair shot and everybody plays by the same rules rather than protect wasteful tax loopholes for the few at the top, we should be investing more in things like job training. Rather than lock in tax breaks for millionaires or make it harder to actualliy enforce existing laws, lets give tax breaks to help working families pay for child care or for college and lets stop Rewarding Companies that are shipping jobs overseas and profit overseas, and start Rewarding Companies that create jobs right here at home and are good corporate citizens. Thats how we are going to build america together. Thats how we battled back from this great recession. Thats the story of these past seven years. That can be the story for the next several decades if we make the right decisions right now. I hope this topic ends up being introduced into the broader political debate that we are going to be having leading up to election season. Okay . With that, i turn it over to mr. Josh earnest. Questions about the Panama Papers, mr. President . Given that the release of these millions of pages of financial information, are you concerned that that reflects on the ability of the Treasury Department to see all the Financial Transactions across the globe and whether that suggests that the sanctions regime you put in place in a bunch of places around the world might not be as strong as you think it is . We know the sanctions regime is strong because iran wouldnt have, for example, cut a deal to end their Nuclear Program the in the absence of strong sanctions enforcement. But there is no doubt that the problem of global tax avoidance generally is a huge problem. Its been brought up in g7 meetings, its been brought up in g20 meetings. There has been some progress made in coordinating between tax authorities in Different Countries so that we can make sure that were catching some of the most egregious examples, but as i said before, one of the big problems that we have is that a lot of this stuff is legal, not illegal. And unless the United States and other countries lead by example in closing some of these loopholes and provisions, then in many cases, you can trace whats taking place but you cant stop it. And theres always going to be some illicit movement of funds around the world but we shouldnt make it easy. We shouldnt make it legal to engage in transactions just to avoid taxes. And thats why i think it is important that the treasury acted on something thats different from what happened in panama, the corporate inversions issue is a, you know, financial transaction that is brokered among major fortune 500 companies to avoid paying taxes, but the basic principle of us making sure that everybodys paying their fair share and that we dont just have a few people who are able to take advantage of tax provisions, thats something that we really have to Pay Attention to, because as i said, this is all net outflows of money that could be spent on the pressing needs here in the United States, and the volume that you start seeing when you combine legal tax avoidance with illicit tax avoidance or you know, some of the activities that were seeing, this is not just billions of dollars, its not even just hundreds of billions of dollars. Estimates are this may be trillions of dollars worldwide and it could make a big difference in terms of what we can do here. Im going to take one more question. Then im going to turn it over to josh. One last one. Go ahead. Mr. President , the republican frontrunner today outlined his plan oh, no. Undocumented immigrants in the u. S. From sending money back home. What would be the implication of this plan and arent his foreign proposals already doing damage . The answer to the latter question is yes. I think that i have been very clear earlier that i am getting questions constantly from foreign leaders about some of the wackier suggestions that are being made. D i do have to emphasize that its not just mr. Trumps proposals. You are also hearing concerns about mr. Cruzs proposals, which in some ways are just as draconian when it comes to immigration, for example. The implications with respect to ending remittances, many of which by the way are from legal immigrants and from individuals who are sending money back to their families, are enormous. First of all, they are impractical. We just talked about the difficulties of trying to enforce huge outflows of capital. The notion that we are going to track every Western Union bit of money thats being sent to mexico, you know, good luck with that. Then weve got the issue of the implications for the mexican economy, which in turn, if its collapsing, actually sends more immigrants north because they cant find jobs back in mexico. But this is just one more example of something that is not thought through and is primarily put forward for political consumption. And as i have tried to emphasize throughout, we have got Serious Problems here. We have got big issues around the world. People expect the president of the United States and the elected officials in this country to treat these problems seriously, to put forward policies that have been examined, analyzed, are effective, where unintended consequences are taken into account. They dont expect halfbaked notions coming out of the white house. We cant afford that. All right . Turn it over to josh. Thank you, guys. All right. President obama at the white house in the Briefing Room speaking about Corporate Tax inversions and calling them quote, injustices within our tax system. The president saying he was glad to see the Treasury Department come out with these new regulations to, in his words, get rid of one of the most insidious tax loopholes out there. Eamon . Yeah, so interesting here to see the president linking these two issues, the Panama Papers revelations on sunday that continued into yesterday that have now led to a political crisis in iceland and political damage for countries and World Leaders around the world. Now the president linking that with this tax inversion issue, sort of seizing the political zeitgeist around the world. A half hour ago we saw a new announcement from the department of justice saying they will hire new prosecutors to go after foreign corrupt practices act cases. The department of justice saying in a Conference Call with reporters that its hiring ten new prosecutors, a 50 increase to focus on those kinds of cases. They also said the fbi has formed three new what they call fully dedicated squads focusing on foreign corrupt practices act and kleptography. Clearly an effort throughout the government to focus on moving cash offshore from the United States and attacking some of the socalled politically exposed persons that have accounts in various jurisdictions around the world. The u. S. Government flexing some of its muscles today. You could hear that reflected in the tone of the president. The narrative from the president today, very much harkening back to comments from many, many months ago of companies being unamerican by doing this sort of thing. He used words like irresponsible behavior, said that inversions were coming at the expense of the middle class. Yeah, thats right. In the past he said these inversions are simply unpatriotic. Today he said we ought to stop making it so easy for companies to do this kind of a transaction, saying we can use that money for all the things the country needs. In effect, arguing that we are all in this together and that those companies are doing a disservice to their country. I can tell thyou that republica on capitol hill feel differently about it. They argue the u. S. Tax code is too high on American Companies and therefore, its the tax codes fault, not the companies fault, that the companies are forced into these sort of Corporate Headquarters gymnastics overseas in order to get a lower tax rate. Quickly, i simply dont know the answer to this question, do the new regulations proposed by treasury have to go through congress . No, they dont. They are arguing they have the authority here to do this. You might see a legal challenge to it. There might be one of the parties who is aggrieved here who says we feel thats beyond treasurys Regulatory Authority and that kind of move should really come from congress. Treasury says it has that authority. Im not sure it would matter to any of the companies who are in the crosshairs here because that process could take a long time and these deals as you know are timesensitive. Also, we have seen treasury argue that overall we need a broad sweeping legislative change from capitol hill that. Could happen next year. Not likely to happen at all this year. But because you see Hillary Clinton out there and because you see donald trump out there who are the frontrunners in both their parties as of right now, both arguing that inversions are a bad idea, you can see a new Congress Next year taking this on foursquare in a way they have been reluctant to do until now. Eamon javers, thanks so much. You are an owner of pfizer, pete. You liked this stock for a long time. The market today is clearly acting as though the deal ison both sides by virtue of how both stocks are trading. What do you do . The concern you would have in terms of allergan right now, i actually have seen a little bit of unusual activity of people looking for a bounce. I think the one problem is, the loss of revenue. You really look back to this whole deal, how about the fact they got rid of their Generic Group and 40 plus billion deal. They get a buyout from pfizer if this thing completely falls apart, 3. 5 billion so there is that. Everybody wants to say allergan is too cheap. They got rid of a big revenue stream. It is cheap, but based upon what exactly are people measuring that . I wonder what this does to the investability if you will of these stocks in this universe. Not only ones where you would anticipate a potential transaction and inversionlike transaction or something else, but also now with the rhetoric from the clinton side of things on drug pricing and the like. How do you invest in this space and where do you go . I think theres rhetoric and theres reality. As it relates to allergan, you wait for pfizer to come out and officially say this does not make sense for us, the deal is officially dead. You dont feel like thats already there . I think you want pfizer to come out with a statement saying it is dead. I agree with you, the perception of it is that its dead. I think theres a further flush when that actually occurs. I will tell you when that happens allergans a buy. We were talk about it before. You have a tremendous amount of cash. To answer your question, i think looking forward, health care itself, theres rhetoric and theres reality. We talked at the end of the quarter about health care, the sector itself, recovering early in the second quarter. You havent seen the financials. You are seeing it in health care. When push comes to shove, whoever is in office, i dont think its going to be as punitive as expected. I still think you look at health care as a growth opportunity. Needs to be in your portfolio. I think you want to buy. Just ironic, just to make this last point, just yesterday i think we were talking about allergan as being one of the most overbought stocks within the market. Here we have the news break and you know not anymore. Well, allergan being oversold. Maybe today it is. You have to wait for the arbs to get through this whole situation. When it does happen, when it settles down a little bit, allergan trading at about 13 times forward estimates for a pipeline that is really amazing, you asked what they have, aesthetic is 20 of their ebitda. They have womens health, they have a really good pipeline. This is a best in Breed Company that is totally on sale. Just let the dust clear here. I think its a buy. Coming up, we go out west to seattle for the iconic tour. We will talk to an early investor in amazon on where the next major Tech Revolution lies. Twitter beating out amazon, verizon, others for the rights to stream nfl thursday night games. What does it mean for that company now . A look at the s p sector heat map. People talk about deals on their auto insurance. Wouldnt a deal involve two parties discussing something . A little give . A little take . Because last time you checked, your rate was just, whatever they say it is. Why not give you some say in the matter . Or even better let your driving do the talking. Liberty mutual righttrack finally puts you in control of your rates. All you have to do is connect, drive and save. In fact, safe driving could save you up to 30 . With 5 off just for signing up. For righttrack. And the discount is good for the life of your policy. To get started, visit a local office or call Liberty Mutual today at take control of your rates. Visit a local office or call see Car Insurance in a whole new light. Liberty Mutual Insurance music plays from one way or another im gonna find y im gonna Getcha Getcha Getcha Getcha one way or another im gonna win ya im gonna Getcha Getcha Getcha Getcha one way or another im gonna see ya inhales cigarette im sue herera. Here is your cnbc news update for this hour. Dow jones reporting that representatives of Sumner Redstone entered talks to settle a legal dispute with a former companion who challenged his mental capacity. She filed a suit last november claiming the 92yearold redstone was mentally incompetent when he removed her as his Health Care Agent and kicked her out. A trial was set for may. Ford criticized by donald trump for manufacturing outside the u. S. , says it will invest 1. 6 billion to build more small cars in mexico starting in 2018. A ford official says its invest morg money in mexico to improve its small car profitability. At least five people were killed, 13 injured after an explosion damaged a building in rio de janeiro. Residents were evacuated from their hoemes and the area blockd off by police as firefighters began rescue attempts. A new study from the university of michigan finds the cost of insulin has more than tripled since 2002. From 231 a year to 736 a year for each patient in 2013. The Research Includes data from nearly 28,000 people during that time period. Thats the news update. The Halftime Report is back after a quick break. Getting unlimited data for your family is a struggle. Other carriers either dont offer it, or its too expensive not tmobile introducing the best data plan ever get three lines of unlimited 4g lte data for just fifty bucks each, and get a fourth line, free yup well give you a fourth line at no extra cost. So tell those other guys youre done worrying about data. Get three lines of unlimited data for fifty bucks each, and a fourth line on us. Hurry, only at tmobile. Ive got a nice long life ahead. Big plans. 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And which aarp Medicare Supplement plan might be best for you. Theres a wide range to choose from. We love to travel and theres so much more to see. So we found a plan that can travel with us. Anywhere in the country. [ male announcer ] join the millions of people who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp, an Organization Serving the needs of people 50 and over for generations. Remember, all Medicare Supplement insurance plans help cover what medicare doesnt pay. And could save you in outofpocket medical costs. Call now to request your free decision guide. And learn more about the kinds of plans that will be here for you now and down the road. I have a lifetime of experience. So i know how important that is. Coming up at the top of the hour on power lunch the war on tax inversions. Allergan shares dropping on the news. How the big drop is presenting a golden opportunity. Is the housing rental boom peaking . Tyler mathison live in seattle, cnbcs first stop on the 2016 iconic tour. He has pretty big interviews including kevin oleary as well as the ceo of zipcar. One of the Big Questions is when will the ipo market reopen for business . Our next guest knows a thing or two about that. Her firm was an early investor in amazon and other seattlebased tech companies. Julie sandler is one of todays speakers at the iconic conference which cnbc as you heard melissa say is cohosting. Welcome to the show. Good to see you. Thanks for having me. Help us figure this out. When do you think the ipo market is going to start showing signs of life . Oh, my goodness. I do wish i had a crystal buall for that. Obviously its been widely reported q 1 was the worst quarter since q1 of 2009. The tech category in the u. S. Has been abysmal. Not a single ipo. I would be surprised to see a sudden reversal in q2. Im hopeful for later in the year. I suspect if we see a couple good debuts, companies that are going, are profitable and strong, collective appetite might be whetted a little bit in public markets. Meantime, we are counseling our ceos in a couple ways. One, we are telling them there are certain things you can control and certain things you cant control. To be aware of the difference. Does it have to be a socalled name brand . To sort of break the ice and maybe dethaw the ipo market . Or does it just have to be a company that has a good solid debut to instill some confidence on the marketplace . I think a company with a really strong fundamentals will help. If theres a great brand, that takes it even further. I think broadly companies that are thinking about going public right now is they are considering the window. Theres a couple things to consider. One, largely if you are looking to make a big splash in the ipo market, you really have to focus now not on the window, not on the interest rates, not on whats happening in china or with oil prices but really how do you invest for growth in your company, how do you focus on your fundamentals, how do you achieve a path to profitability such that when the markets do open again, you can with real intention pursue the right path for you and if you are a name brand, potentially make that splash. As we look ahead to try to think about the next big things in the area of technology and hardware, where should we be looking today . Well, one of the reasons im so excited that cnbc and ink magazine decided to host iconic here in seattle, seattle has an important leadership position in a category that i think will be really important in technology which is Virtual Reality and augmented reality. If you think about the revolutions in personal computing and hardware, you can find that once a decade, there is a major revolution. About ten years ago, it was mobile and smartphones. Ten years before that, it was portable computing, notebook computer and of course, in the 80s, the pc. My opinion is we are looking at the next major revolution in technology, Virtual Reality and augmented reality. Its poised to shape not only the way we live, work and play and seek entertainment but has profound implications for other categories and sectors like communication, technology and education and health care. Julie, great having you on the show. Thanks for spending time with us. Have fun out at iconic. Coming up, evercorps initiating coverage on the food stocks. A buy for starbucks, a sell for dunkin. A hold for mcdonalds. We will find out if our desk agrees. As we go to break, take a look at the dow 30 heat map. There it is. Dows down about 100. Who are you . Im vern, the orange money retirement rabbit from voya. Orange money represents the money you put away for retirement. Over time, your money could multiply. Hello, all of you. Get organized at voya. Com. At ally bank, no branches equals great rates. Its a fact. Kind of like bill splitting equals nitpicking. But i only had a salad. It was a buffalo chicken salad. Salad. Back with more stocks on the move today. Evercorps initiated on the restaurant sector today on the Positive Side of things to start, the firm saying its time to buy starbucks and wendys. On the flipside, it says sell dunkin brands. Its our calls of the day. Guys, what do we think . This starbucks initiation with a buy. 67 price target. I think all of us on the desk have been supportive of starbucks in the past. I think starbucks is having a down year. Where it is below 60 is an opportunity but understand you may have to pay you may have to pay to wait here. This is not going to be a story thats going to be near term like it has been in the past couple years with starbucks. Its more of a buy and hold strategy. I totally agree. But they have got some growth. We know they talked about some of the areas of growth they are moving towards. They moved more into the food world. They have done all the acquisitions they have done. They are positioned in the tea world as well. They have done a lot of things right. Over the one year the stock is up 28 . Star will did bucks goes telling me to buy it now . If are you going to start buying starbucks, you buy it when nobody is really liking it. You put a buy on it today, but internationally, starbucks is a well run machine so i think long term youll be fine owning it. To y do you buy wendys . I think so. The competition is brutal. But still looking at the mcdonalds and wendys of the world. Wendys has put up a great fight and they have positioned themselves well. But tough to me even with mcdonalds, its tough to turn away from that because theyre shareholder friendly. You see some of the growth. They Just Announced about some of the Growth Opportunities they have in terms of the sfraupt expansion. There is a lot going on in a positive way. And easterbrook is as great a ceo as there is in the industry. It makes me a little nervous that everybody likes mcdonalds and its trading at 25 times forward estimates. You were saying stick with it through all the turmoil. Yeah. I thought that the turnaround had a lot of legs. The new Management Team was very strong, the balance seat was good and they could lever it up an return to shareholders. And thats exactly what the market wants. At the want a dividend growth. So i hold it, i certainly wouldnt buy it here. Wendys is more expensive. I think you continue to own wendys. They have done an excellent job in terms of branding themselves as being a Higher Quality burger chain. Clearly the strategy is working. So i think wendys is a mid teens type of stock with a potential to even be taken out. I think they have a hold on yum, but i still think you buy yum. The spin and you probably will have a piece of it sold so you could have a value right there. Lets move to gold. Its up on pace to bri break a two day losing streak. Jackie d Jackie Deangelis at nymex. Its ticking up today. Anthony, would you be a buyer of gold . I do like gold. And hedge funds are long right now versus short 6 1 margin. Ever since february 11th when we for the above 1200, it hasnt looked back. And i think with the uncertainty if the fed will raise rates and the weakness in the dollar, i want to own gold. Scott, what do you think, what are the levels . I disagree and Retail Investors disagree, as well. Gld saw biggest outflow. Well have a tough time getting through 1230. Important level would be the 50 gay moving average, that is 1214. Under that, it is look out below. All right. For all things gold and futures, head to the website futuresnow. Cnbc. Com. Today well have jack ablin on telling us why oils up side is limited. Coming up, the plays you might be missing today. Thats next up on the half. Im here at the Td Ameritrade trader offices. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. Td ameritrade. In new york state, we believe tomorrow starts today. All across the state, the economy is growing, with creative new business incentives, the lowest taxes in decades, and new infrastructure for a new generation attracting the talent and companies of tomorrow. Like in rochester, with worldclass botox. And in buffalo, where medicine meets the future. Let us help grow your companys tomorrow today at business. Ny. Gov here is a question for you. Is the nfl enough to turn twitter shares around . Lets debate that at the table with the nfl giving twitter or twitter winning really the streaming rights to thursday night games. Scott has a note saying its a hail mary. Kind of feels like a hail mary to me, as well. But theyre going after the right thing. It theyre looking to figure out how do we finally get off of the 300 million in the maus, this is one way you could at least try to do it. Seems like its a decent partnership. Hail mary makes it feel like its their last ditch effort. When is the last time weve seen growth in maus at twitter . Is this the game changer . They need live and this is live. There is nothing like sports live. So if it works with the nfl, you start looking at the rest of the professional sports world and this could be meaningful for them if its sticky enough for im because were talking about a group of people for the most part, twitter people, theyre less tv people than meets the eye. So youre pulling them over to see the games live. Its a change of strategy. I dont understand it. Youre trying to do something completely different. Why isnt it just in addition to what you do . Because twitter to me is more about getting the news, getting on top of things. And now you have something that you will compete with espn and arent you laying out exactly what the problem is . Its been too narrow focused. They have had trouble growing users because not enough people are interested in getting that news feed. If you give them another option and a way to draw the user base in i think youre segments your audience and will make yourself even more wider net. I think its interesting take they said that this cost which is estimated about 100 million is already factored into the guidance. So maybe the numbers when they come out with them are actually going to be okay. And i think this is a step in the right direction in terms of trying to figure out maus and engagement. Does it fix their problem, im wary of it, but its encouraging. I think it changes exactly what they need and i think the down side i think the short trade is over. Mid teens to upper teens is fair value. Ive long argued not owning it, but i certainly would not be short it right now. First thursday night football, next they get wednesday night rivalry in the nhl and theyre off to the races. Throwing a plug in there. Not so sure about that. Maneuver there. Give me something under the radar. Hudson bay came out with earnings. They were pretty decent. If you see earnings increase and Consumer Spending thats the place you want to be. Biotech stocks, they showed a sign life. A name i bought yesterday a lex i dont know down 21 year to date. We know about drug brycing concerns. Know down 21 year to date. We know about drug brycing concerns. But i think its acting well and a Wonderful Company for the long term. Twitter there was someone saying allergan was a generational buy. I think cramers thing was saying i love it here, but im restricted. Do you love it here . Is this the place to buy it . Im looking at it right now, but there is a poe pe to put on call spreads where youre able to buy something. I think its a great opportunity at the these levels. Good stuff. Good having you that does it for us. Power lynpower lunch begins n. Let me be the first to wish everyone a merry christmas. Well get to tyler and some of his great guests in just a moment. We begin with some breaking news. Lets get right now to sue herera. Mississippis governor has signed a controversial law that allows public about and private businesses to refuse service on gay couples based on the employers religious