and the stock is up some 25% today. it's up -- it's more than doubled in the last two weeks. >> i would love to give you time, jim. we're out of it. i thank you very much for joining us today. thank you. that does it for us here on "half time." pl pl begi power lunch begins right now. nasdaq with the biggest gains so far. s amazon.com hitting a new high. >> i will see your rally and i will up you natural gas, melissa.

>> finding money in garbage, yes, trash. you won't believe the big names lining up behind this trade. >> hi, everybody. tyler is out. mannedy is on the "half time report" this week. so you're stuck with us. >> we're getting a modest rally. you have three things going for you. you have oil on the upside. it's behaving. you have a modest time to rally and a europe rally. that's all you need going into the close. modest expansion of new highs. i'll show you in a couple minute. that's been there all throughout the day. the volume predictably on the light side. lowest volume dave the year yesterday. we have a broad swath of sectors on the upside here. i would have liked to see energy and materials. the losers on the year leading. that's not the case. tech, health care.

energy up is. consumer name, remember, value outperformed growth throughout the year. so kelloggs, kimberly clark, smuker, new highs for them. people are debate wlg this is going to happen in 2016 or not. and, of course, consumer name have done well besides these, travel stocks are new highs. royal caribbean and carnival. they've had a great year. we should have the most beaten up names. we had nice starts. you can see they fell down. this is a warning sign here. these are the names that ought to be having decent rallies today. as good as soccer is, we can't

keep up with europe. we're going country to country here looking fwoefrt returns so far this year. >> i like to call it global citizen. yeah. that's what we are now these days, right? >> that's fair. >> interestingly enough, the ininvestor discussion, i'm sure you would agree, has become increasingly more global in macrogiven the china growth concerns, that made a very interesting global backdrop. let's start with europe. thanks to qe, the weaker currency environment and lower energy prices, that helped european stocks outperform the u.s. in 2015. the big standouts are italy and germany. you can see up 13 and 7%. ireland has also been a big winner up about 29% right behind us right here. by the way, fastest growing economy in europe, 7% gdp. helped by the bailout. also strict reforms. you can also see that hungary is the best performing global market so far in 2015. you're looking skeptical. >> my people, the irish, every time they count them out, they

come back. >> be proud of them. they're doing well. unemployment also improved. employment also improved. hungary, the best performing global market up 40% thanks to strict measures implemented to stimulate the economy. but let's take a look at asia. the story gets more interesting. of course, fears of the fed rate hike and also further evidence of a slowdown in china resulted in this selloff in a lot of the asian markets, specifically malaysia and indonesia. they rely heavily on chinese demand. you can see so far down 5% and 13% so far in 2015. but the big surprise, we were discussing this yesterday has been india. where it is? right here. down 5%. morgan stanley, ubs, deutsche bank, they were expecting this big rally in indian stocks this year. we didn't get it. investors are saying valuation is a big concern and also modi overpromising. you can see the index is down 5%. big standout though this year,

the price of china, despite the volatility in that market over the summer, the price devaluation in august showing the composite still up 10% this year making it one of the best performing markets across the globe. >> if you dig deeper, shangen up is. >> the china haters have been right for a couple months but wrong for the year. it's just been a crazy, volatile year in china. >> volatility will only increase next year according to economists i speak to. >> unlike the other modi, you underpromise and overdeliver. >> thank you so much. that is a compliment. >> every time. thank you. you did leave something out. you forgot to mention jamaica. >> really? >> the stock market up is 80% this year. there are two big reasons. fe beer and dolphins, but not together. >> i hope not together. poor dolphins. one exchange standout is -- [ inaudible ] >> is that a jamaican brewer?

>> yeah. they make red stripe. >> recently fold into the hin kin beer empire. there is a dolphin sector. so we're serious about beer and dolphins. jumping out of the water this year. >> it's been a whale of an investment. >> a dolphin marine park say a jamaican operator called dolphin cove. >> let's keep this in mind. the market cap of the jamaican stock market is about $5 billion. that's it. it's a frontier market which hopes to grow into an he merging market. 80% is still 80%. but keep nind, the frontier markets are frontier because they're small. they tend to be liquid and if you own something there and you have to sell it, sometimes it is hard to sell and can you lose a lot more than beer and dolphins. >> you have been warned. all right. we have a news alert in the bond

market. the five year note up is for option. rick santelli, what does it look like? >> it doesn't look good, melissa. i initially gave it a d minus. i felt generous. it is a holiday week. i gave it a d. that reflects the very weak demand as for the following metrics. it was $35 billion five-year notes. the yielded option, 1.785. that is the highest yield in an option since september of '14. the metrics, just 1.875. the highest yield i saw going into the final few seconds of the one issued trade is 1.77. higher yield, lower price. never a good combination. $2.32 chasing every dollar's worth securities available. that is weaker since july of '09. 52.5 on indirects, below the 59.10 average. 11% was the direct bidders. that's the only glimmer versus the 7% ten auction average.

so d. tomorrow we, of course, have the final $90 billion in supply in the form of $29 billion seven year notes and hopefully they go better than the twos and fives thus far. we've seen yeeields pop-up a little bit. >> thank you. so the s&p 500 on tap to end the year just slightly in the green. so are there better opportunities in emerging markets as we head into 2016? on set is heather loomis-tide. welcome back. good to see you. >> thank you. great to see you. happy new year. >> happy new year to you. so for 2016, you're looking at an okay return overall? >> yeah, okay return. i would say within the equity space to your point on emerging markets, we see selective opportunities there. i don't think it's going to be as easy as just picking a country, a region, a currency. i think you're going to have to really get under the hood, look for those individual corporations with good earnings growth and it's going to be an

environment where active management will pay off. >> what are some of the overall themes going to 2016? there's a lot of talk on street about reversion to the mean trades. meaning going the opposite direction of where the trades have been for 2015. so oil is better. >> right. >> dollar is weaker. what's -- what should we expect? >> honestly, on that point, i think you're going to really need to look to market neutral long-short strategies. there can you capitalize upon big shifts in momentum. i agree with you. there are some trades which are crowded. which are contentists and at that point especially when valuations are fair, to even in some case highly valued, very susceptible to changes in momentum. >> once a year we get to make predictions. one of my predictions for 2014 was that for five or ten years mexico would be one of the best investments in the world. of course, i'm just guessing. you're the expert. do you agree? >> yes. i think mexico is a good place for investments, situated in the

emerging markets. they send to sell off when they do. it's one of the more liquid names that can you actually sell. and, yet, you can see very diverging fund men fund menamenl koechlt we're looking at the alternative space and infrastructure within mexico which we find promising. >> it is tied to north america and the u.s. economy. it fluctuates along with the u.s. dollar. are we to believe that the u.s. economy is going to be much stronger next year and if the returns on the u.s. stock market is between 5% and 6%, should xbe expect similar for mexico? >> i think similar but a boost. it has been -- versus the u.s. which has been a favorite of international markets, recipient of dollars during times of

tumult, mexico has not received that. they should perform a little better. >> what is your biggest -- i don't want to say surprise. if you think about it, it's not going to surprise. but maybe as goldman sachs calls it, a gray swan. what should investors be kind of worried about? it may not happen but it could? >> right. i it this biggest question my investors are thinking about and these are billionaires in the family office space. they're thinking where do we go within fixed income? they made their money. they're looking to invest it in a safe spot. >> they're looking to keep their money. >> absolutely. >> so where do they go? the mattress? >> where do you go. fixed income should do well because europe continues to have a bid. we're actually saying think about different places to put your money instead of fixed income that are still safe, that still have a high yield return to you and so some of those places are outside of both equities and fixed income altogether in the alternative space. so we're thinking about

renewable energy. where you can enter into, you know, contracts with stable investment grade utilities. >> like a toll road in mexico? invest in something like that. >> the infrastructure space. so think of wind, solar, things which don't depend on economic conditions which is the sunshining and the wind blowing. those are things that investors are thinking about going into '16 because they have stable returns, cash flows and they also, to the extent some people with considerable wealth are trying to tie investment orientation to the philanthropic orientation. this does a good job of doing so during the lifetime of their investments. thank you for joining us. >> thank you. >> happy new year. as we note at the top of the show, natural gas rallying big time again today. prices now up 25% in just one

week. is this the hot bed for winter or has it completely passed you by already, slow poke? plus, wayfair, men's warehouse, not the -- yeah, tanking. i thought they were going to help us look good. either way, we're going to give you a couple retail predictions for the coming year. you're watching cnbc and we are first in business worldwide.

welcome back to "power

lunch." triumph group is soaring. they finally ended the ceo search naming ratheon executive to lead the company. dupont is higher, cutting 1700 jobs in the home state of delaware in early 2016. the cuts part of dupont's merger with dow chemical. now to seema for a market flash. >> qual come nearing session highs up over 3% this as the chipmaker enlters a new license agreement with two chinese firms. the stock is helping lift the s&p 500 tech sector high cher by the way is the best performing sector in today's trade. brian? >> all right. the deadly winter weather that dumped snow on much of the southwest now threatening the northeast. here's the weather channel's chris warren with more. >> looking at a few travel issues today. overall, things will be improving in the coming days for most areas. let's start off right now with a look at what we're going to see the issues. it's going to be mainly the northern locations in the northeast. of course, low clouds and rain

can and have brought some travel delays through the air. through some of the big airports in the northeast. otherwise, it's going to be some of the higher elevations, colder spots where there's going to be snow. but in the coming days, we are going to be watching for some rain. but snow is the story here in the northeast. several inches again. mainly to the north, mainly out of some of the biggest cities. as you look at tomorrow at the rain, now we're seeing the rain in the mid-atlantic all the way to the south. watch out for the threat of thunderstorms. thunderstorms roll through, we do know that can reduce visibility with that very heavy rain and cause ponlding on the roadways. mostly quiet on thursday with the exception, of course, again of some rain throughout parts of the southeast. just be careful out there on the roads. all right. the winter weather reeking a bit of havoc on holiday travel. more than 600 flights across america have been canceled. more than 300 have been delayed due to large storm system moving to the east coast.

of the 80 r 0805 cancellations, were at chicago. we call that a normal day at newark airport. >> you would. nat gas is continuing gains. it up is 24% in just a week. energy trader at the nymex has been trading nat gas for more than 20 years. great to have you with us. is this mostly short covering? >> today is the january contract going off the board that has little bit to do it with much as you said, december 18th, you made a low of $168. that's a low number. it is weather driven. as soon as you have a change if the forecast, it picks its head up, especially starting off at levels this low. >> they had data out showing that the net short positions were extremely high. and so i'm wonldering if part of it is fueled by short covering, how much short covering could there be? could that offset if the temperatures go back up, for instance? >> we're way above the five-year average in terms of the storage.

but from what i'm hearing, there's a lot of production off right now, too, which is making it sort of bullish. but this animal is really, really driven by weather. so if you see any kind of weather where it stays cold for a long time and they're also saying that january 10th to january 20th is going to be unusually cold and if it stays that way, it could really pick its head up. it's just the way nat gas trades. >> whether you say pick the head up, how high? how high does the head go? >> from a technical perspective, we go through today's highs. you could see another four cents above that. >> okay. we'll see about. that thank you so much for joining us. >> the numbers are still coming in. it is turning out to be a relatively decent holiday shopping season both in stores and online. and check out consumer discreti discretionary. that is the best performer up 9%. the question is this. this year is already gone. what is ahead for retail next year? will anybody ever sell anything again?

three big predictions for 2016 coming up.

welcome back on "power lunch." take a look at. this a rally on our hands plus we're at session highs at this moment. the dow jones industrial average up 189 points. 1.1% is the gain. the s&p 500 up a full percent. the nasdaq up by 1.2% being fueled by huge gains in biotech. small caps doing nicely today. russell 2000 up .7%.

let's get a check of the bond market. rick santelli is at the cme with a follow-through. rick? >> wow. it is a soft auction. if you look at intraday of five year note yields, we popped up a bit. let's look at the yield curve quickly. twos are up seven basis points. fives are up five basis points on the day. tens are up six. 30s are up eight basis points. if you look a a chart starting in june of five-year notes, can you see we're at the second highest yield of the year going to $178 and change which was the 10th of june. even the ten year responded on this intraday chart. yields moving higher. light volume. a bit of a nervous trade at the mom. back to you. >> all right. rick, thank you. so as the year draws to a close, cnbc, that's us, hi, melissa. >> hi. >> is breaking out next year's playbook, looking at ways you

can make money in the next year. courtney reagan right here, laying out her predictions for retail in the coming year in a minute. but first, let's see how she faired with her picks for this year. >> how did do you? >> my favorite part. >> actually, i think i did pretty well. so, go ahead. this is you. >> courtney predicted that sears would stay in business. got that right. but that the retail woehr not see a real resurgence. she was right. sears stuck around but the retailer shows no signs of resurgence. in fact, it continues to close stores. >> also predict it might close in 2016. that is still anging out there. >> courtney also predicted that ceo positions at several retailers would remain unfilled for long periods of time. >> so i'm going to say i was 95% right on this one. >> that's good. >> i called out american eagle and abercrombie specificly. american eagle went almost two years with an interim ceo. they never really found what i

would call the perfect candidate for replacement and gave the interim ceo the total title earlier this month. but abercrombie, still no ceo as mike jeffreys left a long time ago. >> it has been. >> lastly, courtney predicted that the chief marketing officer would become a more important role in all retailers as they focus on target and personalized shopping offers. well, that one is a little hard to measure. >> right. >> so the jury i guess is still out on the overall prediction. but now let's see what courtney is predicting for retail next year. >> if retailers think the unusually warm winter is problematic, watch out for spring. weather experts predict as el nino turns into laen into yashgs the warm winter will morph into a cold spring leave retailers again mismatched to the forecast. bad for margins, good for deal seeking shoppers. some retails have already taken the plunge and raised wages for

hourly employees. it's only a matter of time before competitors will have to follow suit. and while some argue it helps retail by putting more money into american's pockets, it's a big expense for retailers, bites into earnings and adds downward pressure to share prices. even though retail stock valuations contracted this year, the sector has been largely left out of the record year for global m & a leaving consolidation a strong possibility in 2016. count in company calls out hanes brands, hbc and signet as top picks for value creating m & a next year. so it's been a very interesting year for retail. it will continue to be. i think we're going to keep seeing more and more changes, much more so than we've seen in years past. so we'll see exactly what happens with retail. let's see if my predictions hold up. i think they're pretty good predictions. >> you did well in 2010. >> -- in 2015.

>> better than i did. wait will you see my predictions, wrong, wrong, wrong. >> i love that shot. courtney's head and my shoulder. we came back from break, it was my shoulder. >> courtney, thank you. >> thank you. >> all right. take a look at stocks right now. we're at session highs. let's get the latest from the nasdaq which is the biggest winner of the three major indices so far. >> absolutely. you said it. the biggest winner today, up 1.2%. up about 7.5% for the year today. it's been outperforming the other two major averages. the nasdaq 100 up higher for the year around 10.5%. varitek up is 3.5%. the ibb biotech is up 12% for the year to date. that is the seventh straight year of gains. now in the tech space, amazon is up 2.5% and also hitting new high for the day off a big holiday weekend. setting a record with three million new prime subscribers in the third week in december.

alphabet is up higher by 1%. take a look at western zijtal. it was really beaten down this year. it is rallying today. for the year, down around 45%. take a look at apple. that is also rallying to day. up nearly 2%. also adding eight points to the nasdaq 100 despite being down for the year, guys. back to you. >> thank you. let us get back now to sima with another market flash. >> shares of the mining giant announced departure of the executive officer. the stock is off of the day but still up 1%. are the he bound is due to roper's recovrop copper's recovery from a one week low. >> gold prices closing now. let's get to jackie at the nymex. >> good afternoon. gold was up for a good portion of the day. metals were seeing strengage cross the board. it just turned negative around the close. $10.68 is where we stand. flat on the session. not a lot of volume right now.

not a lot of conviction in the gold trade. copper is the standout here, up 3% on the day. highest level that we've seen since mid december. moving in lock step here with equities. and that's really the key. the gains are needed because the demand just really isn't there. remember, when you look at the copper trade year to date, it is it still down more than 20%. copper has had a tough time of it. brian? >> all right. i'll take it. thanks so much. again, we have a rally on the street stocks. they're just off the session highs. today's gains helping the s&p 500 get back in the green for the year. the dow is still in the red though. 2016 stock strategy straight ahead.

good morning. more than 1100 migrants and refugees arrived by ferry today to the port of greece. they were from war torn syria and afghanistan. greece has now taken in 840,000 refugees so far this year. new video giving us a rare look at one of the sea's giants. swimmers in japan's bay captured

this squid in the water on christmas eve. would have scared the heck out of me. scientists say it's about 12 feet long and it is relatively young and rarely seen. shoppers have one day left to ride thor if is wheel inside toys "r" us in new york's stimz square. that store will close the doors for good tomorrow at 6:00 p.m. eastern time. the company does say it is looking for a new midtown location. >> and which celebrity would you like to have living next door to you? voters in a new survey are picking taylor swift. the pop icon was voted most desirable neighbor. amy schumer rounded out the top three. back to you. >> no dudes on that list. >> no. will ferrell. will ferrell would be a fantastic neighbor. >> yeah, and what if taylor swift would leave stuff in your yard? you might get bad blood. >> i don't think she --

>> stop it now. >> you'd have to shake it off. >> exactly. >> sue herrera. >> oh, brian. >> i'm getting worse. >> i know. back to you. >> there we go. j-law or melissa lee. stocks are at session highs with the s&p 500 now positive for the year. is this an indication of better returns for 2016 or an indication of nothing because today is just one day? joining us, nick cole from convergex and an invest. strategist from guide stone capital management. one day does not a trend make. it will be a flat year for the overall markets. what is your take heading into 2016? >> you know, i agree with you, brian. today doesn't tell us anything. i think for 2016 what we need to think about is what earnings growth going to be? we feel like it's going to be fairly tepid. somewhere in the 5% to 7% range. primarily because economic growth is likely to continue to be relatively low. we're looking at next year as something we call the new

goldiloc goldilocks. not too hot or cold but a lower level that we're used to. something similar to this year. limited earnings growth as a result of limited economic growth, the markets not going to be able to get much out of. that so we're thinking mid single to maybe high single digit type return is probably the best expectation. >> okay. so david, i appreciate the honesty. a lot of people come on and say things are great all the time. how do you convince your clients that it's worth investing next year in at least equities? >> we have long term clients, brian. we manage a lot of retirement portfolios. our clients understand that you can't look at one year and make asset allocation decisions based on. that over the next ten years, we still think equity is a very attractive opportunity, particularly equities of high quality companies in developed markets. we think those are areas that will outperform over time in a balanced portfolio. so we're not telling our clients to make changes based on one year. we're telling them to look at the long run. >> nick, let's go to you. if i want to get into the market

and invest in the sector with more upside than 5%, 6% return, you like energy. what has to happen in the energy sector and specifically commodity prices in order tore energy stocks to be a winning trade? >> yeah. we think there are two entry points in energy. one of them is actually right now. you have so much tax law selling in the energy group through december that we do think there is a classic january effect lift going into the new year. so that's one spot. but second spot is look at energy names when crude does make one more low. we think around a $30 level. the concerns over storage and demand are certainly very real and still weighing on energy. but interestingly, energy stocks haven't made new lows on average the way the commodity has. so we think there say one more opportunity as a trade right now and then next year on one more low in the commodity to make a longer term of that on the sector? >> let's say crude goes to $30. how do you know it's going to go much higher? let's say it hits 30 and then

stabilizes and met for the rest of the year. what happens to energy stocks? can you still have a good return on energy stocks in you got oil price that is mid level for next year? >> that's a great point. basically, you have to have energy prices, commodity prices stabilize just to get the group stabilized as well and moving higher. so it doesn't require a lot of move higher for high quality energy names to begin to work. it just needs some stabilization and we haven't had that this year. we're looking for it to happen first half of next year. >> are you buying any oil and gas names? >> no. we're still very leery of the energy sector. still too much uncertainty. we like entities like industrials. we think they're undervalued. >> nick and david, thank you. have a wonderful new year. we'll see new 2016. go to our website right now to see how nick and david are playing volatility next year.

>> all right. the texas teen known for using the affluenza defense to avoid jail time and then dodging parole officer, he's been caught after fleeing to mexico. we're in ft. worth, texas with, that developing story. gabe? >> hi, melissa. authorities here in texas just wrapped up a news conference where they described how will 18-year-old ethan couch and his mother were arrested yesterday in the resort town in mexico. now they've been on the run for several weeks. the fbi and the u.s. marshal service had been looking for them. and they were picked up around 6:00 p.m. monday in mexico. in a photo released by mexican authorities show that ethan couch had apparently dyed his hair a darker color and he was trying to evade detection. authorities in that news conference also said that he and his mother attended what amounted to some sort of going away party the days before they left and the investigation

continues to find out exactly who may have known that they were trying to leave as well. now this case drew international attention back in 2013 when ethan couch was convicted of killing four people in a drunk driving incident near ft. worth. his blood alcohol content was three time the legal limit. and during sentencing, his attorney use aid very unusual defense saying that couch did not understand the consequences of his actions because of his affluent upbringing. the judge gave him 10 years probation and no jail time. earlier this month a cell phone video surfaced of a party in the tarrant county district attorney's office here has interviewed several witnesses who say that couch was there although he's not seen drinking in the video. alcohol use would have violated his probation and the sheriff believes that is the trigger for why he and his mother ran. now there are reports that he could be returning to the u.s.

soon although it's unclear the exact timing of that. next month there is a hearing to transfer his case from juvenile court to adult court, a judge could sentence him for -- to another 120 days in jail if he violates probation again, he could spend up to 40 years in jail. authorities here are still trying to sort out how much time he'll spend in prison but they're very happy to bring him back to the united states. melissa, back to you. >> thank you, gabe. markets right now are in rally mode. stocks are hitting the highs. session highs this hour. led higher today by energy as well as health care. plus, we're keeping an eye on home prices. they're on the rise but in areas dependents on energy will low oil prices hurt the real estate market? you're watching cnbc.

welcome back to "power lunch." shares of bojangle is up 11%. this is the biggest intraday

gain in seven months. they're calling the restaurant chain an attractive stock citing rising earnings estimates. the stock is down 12% this year. melissa? >> thank you. headlines we're watching for you. carl icahn raising the bid for pep boys to $18.50 a share, matching japanese tier maker's bid of $17 a share. freeport mack moran is bouncing back from a 9.5% loss following the resignation of the founder james moffet. and honeywell, the utility consumption metering group of melrose industries. brian? >> nationally home prices do remain on the rise. but will low oil prices hurt real estate in some of those markets? let's get to diana owe lick. >> the numbers are not good in houston. houston was positively booming while the rest of the nation was limping along after the housing crash. now it looks like just the opposite is happening.

it started in october and got worse in november. home sales dropping dramatically and inventory unlike the rest of the nation really shooting up higher. take a look at november numbers. total sales, both condos and single family, down just over 10% from a year ago. active listings, up a whopping 21.5%. the median price of a houston home managed to stay positive, up 2.2% from a year ago to yet another record high. but the average price fell for the first time in three years. houston was seeing these record high prices when gas prices were soaring. it didn't suffer the steep declines that rest of the nation's housing market did. for those of you watching luxury houston real estate, not good either. sales in that sector down 22%, 2014 was a record year. 2015 clearly an oil induced correction. back to you. >> yeah, i mean you have midland, texas and other places as well. we need to clarify, these were red hot markets. a little slowdown is not the end

of the world. >> they were incredibly hot markets. they just kept getting higher. whether or not it was all oil or other things, other parts of texas still doing well. they have varied economies like dallas. >> all right. diana, thank you. >> so will hold prices continue to rise in 2016 sore there a slowdown in order? we have the senior executive vice president with us. great to you have with us. what is your opinion on the impact of lower oil prices on the area? >> thanks for having me on the program. great to be with you. at a macro level, lower energy prices obviously bode well for the consumer. we saw consumer sentiment rebound. lower prices for companies and profitability. at a macrolevel, it helps sustain economic recovery and the deflationary factor that comes into the equation chit comes to fed expectations going no 2016 all bode very well. there are local markets as we discussed earlier, houston, for example, is hit harder just

because its economic diversity, since they've come a long way since the '80s, it's dependent on energy than any other areas. dallas we've seen 100,000 jobs being created net in dallas over the past 12 months. austin is holding up well. so there are very few pockets of direct negative impact. at a macrolevel, the energy situation has been a positive for the economic recovery. >> talk to us about 2016 and where you see the most opportunity? let's say you want to go buy a home in 2016 for the best capital return by the end of the year. what area would you be looking at right now? >> well, it's important to keep in mind that both a for sale housing market, rental market are very strong and they're benefitting from job creation. we're well ahead of the job loss that's we experienced during the recession. we added more than 4.5 million jobs in addition to the recovery of the 8.7 million jobs recovered. it's a broad based recovery.

but we're transitioning from a rapid recovery mode in term of appreciation and in terms of gains year over year in terms of sales both in the housing market and the commercial real estate market in general. and transitioning to more of a sustainable, more healthy normalized rate of growth that is actually really good news. it's really prolonging the cycle and it's reducing the risk of bubbles and boosts in cycles that are boom and bust. if you look at the markets that recovered the most, look at the job creation. i mentioned dallas earlier, new york. look at atlanta. look at los angeles, boston, seattle, san jose and even markets like minneapolis are showing really nice recovery both on the rental side and the for sale housing side. so there are opportunity markets. florida, for example, we consider an opportunity market because the job growth there -- >> where in florida, though? >> what's that? >> where in florida?

yesterday we were talking about how there may be an overbuild in miami. >> sure. miami in particular has some oversupply still. but they're adding 17,000 to 20,000 jobs. we're seeing west palm come back very nicely. we're seeing ft. lauderdale come back nicely and tampa and orlando, in particular, come back very nicely because of the job numbers. phoenix and atlanta are two other markets that have shown great recovery. again, because the job numbers and lack of overbuilding so far in the recovery cycle, they bode well going into 2016. >> who is not working? where you would not buy a house with somebody else's money? >> again, the housing shift from speculation which we saw in '06 and '07, problem at nick the market led to a lot of problems has now been replaced by a more fundamental based, jobs base, household growth base kind of die nam chi dynamic which is positive. even to date rate of household formation exceeds the total

construction of apartments and single family housing. demand is exceeding supply. so if you look at the markets where we really don't have the drives, job growth drivers to the degree that we should, some of the midwest markets are still struggling to recover. those in particular stand out. and some of the boom-bust markets that tend to have a lot of job growth, a lot of population growth like texas that tend to overbuild are ones to watch going forward. the overbuilding tends to really catch on at this stage of the cycle. >> thank you for your time. appreciate it. senior executive vice president at marcus and milichap. >> if you had a bad year in the stock market this year, you're not alone. some big names are hurting. and it's been a big quarter for many bioteches. is there still room to grow your money? we'll tell what you to watch in the new year and what is behind the big bounce in natural gas? one hint, you might need a

jack jacket. that is ahead. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this.

welcome back. here are the power points. the bulls in charge here. stocks hitting session highs. they're up 200 points. tech, health care and consumer

discretionary are the sector leaders. we also learned today that jamaica's stock market is up more than 80% this year making it among the best in the world. two reasons for that, a big beer deal and a deal to buy part of jamai jamaica's dolphin cove. most ceo's are trying to reduce costs but our next guest is trying to increase it. he works with san jose's sanitation is heading up a fund that aims to make recycling big business again. he has the biggest companies in america behind him. we've got that story whether "power lunch" comes back in two.

you probably feel like you're doing good when you recycle. here's a dirty little secret. much of that recycling never gets recycled. >> no! >> yes. >> no! >> it simply goes right back into the trash like most of my intros on this show. the problem isn't that your town is trying to swindle you. it's likely they don't have the trash infrastructure to get the job done. that is where your next guest comes in. co-founder of the losed loop fund, his fund provides loans for cities to help build out

recycling instra -- infrastructure. how much of that stuff is getting recycled? >> everything that you put into your bin gets recycled. every once in a while we may have a problem with one or two commodities, for instance today we have annish would you glass. but for the most part, everything you put in your container gets recycled. the big issue is there is a number of communities in the united states that don't provide bins or recycling service to their communities and that's what we're trying to solve and make sure every home in america has the bins. >> so it's the stuff thrown into one thing and counting on others to remove it. they probably want to do it. you provide them with loans to get the job done. how much are your loans on average? >> our loans on average $5 million. >> what will that get you? >> that will get you a recycling program in a major city. it will be financing recycling carts for the city or the city's recycling facility. the great news is that recycling

is big business. and cities can make money off of it. >> how reliable is that payment back? i'm curious. have you fwhn business long enough where you've been through times where cities are not able to pay you back or not making much monday on the recycling program? >> it's reliable. the biggest value to recycling is avoiding the landfill disposal fee. so even if the recycling market were to crash and there's no value to selling materials, cities find it to be valuable because they don't have to pay to send it to landfill. that is the key value piece in the equation. >> is it fire say then, if there is any recycling skeptics left in america, is recycling a good economic bargain? >> absolutely. it's an excellent economic opportunity for your city because first and foremost, if you do not recycle, you have to spend taxpayer dollars to send it to landfill. first and foremost, you're going to save billions of dollars

nationally by avoiding landfill disposal fees. then there is the upside whatever you're able to sell the commodities for. >> who you are competing against? i think if this is such a reliable way making money and the payments are so reliable that there are waste management companies out there that might provide financing for cities to buy their services y do we need you? >> there's two things that we're competing against. one thing we're competing against is just as you mentioned, waste management companies that are haulers and also make most of their free cash off of taking material to their landfill. that's one competitor we have. and the other competitor that we have that i might term as an obstacle is that cities today don't have a lot of free cash to invest in infrastructure and improvements. even though they may see the long term financial benefit in something, they don't have the up front cash today to invest. >> we have to go. who is the most egregious off d offender? who is the worst city in america for garbage? >> i don't want to call any one city the worst offender. we were just out there available to help finance solutions.

>> who is your best client then? who would you like to have? who would be the number one score for a city? i'll ask it a different way. >> we're looking at a project in memphis, tennessee that, can be a great example of what's possible in that part of the country that is really struggling with recycling. >> he said it in a very nice way. thank you very much. >> thank you. >> all right. it is now -- wow, time marches on. 2:00 on wall street, 5:00 p.m. in rio, brazil. the dow soaring as oil and natural gas make a move higher. hi, everybody. welcome to the second hour of "power lunch." melissa and i are still here. let's start the show talking about you. did you have a rough year investing this year? don't feel bad. you are not alone. even some so-called masters of the universe had a rough year. shares of private equity firms like kkr, fortress investment group, apollo all down more than 30% this year. in other words, some billionaires are now less

billionaires. today we have more on how the smart money not looking like genius this is year. >> at least not according to the stock market. firms are doing okay. they're tracting assets. they're selling off some of the old profitable investments they have. it is very telling that market is saying we don't want your stock if you're blackstone or apollo. now a few things going on here. these buyout shops have not really been a big factor in the broader m & a boom that is now up to about $5 trillion in deal volume this year. banks are more regulated. they're not extending credits for the lbos. obviously, the broader credit markets are struggling. and, you know, they rely on a deep high yield market. we don't have that at the moment. i think investors in general are also really not sure about how to value these businesses. they've not really been around for more than one cycle. they're still run by their founders. and so there's a sense out there that maybe they're just not worth investing in as a long term holding. they're just kind of ways to

play that sweet spot of the buyout sector. now the big question is as we go into 2016 do, the stocks -- are they cheap? they look very cheap. but the question, is it is just going to be dead money until the high yield market and perhaps the buyout and ipo markets revive? >> all right. mike, stay right. there we want to talk briefly about hedge funds first. hedge fund white box advisors closing three mutual funds. let's bring in kate kelly. this underscores the difficult year it has been for hedge funds overall. >> that's right. although it's important to note in this case we're talking about mutual funds within a hedge fund company. white box advisors announced yesterday it would liquidate the three mutual funds after a combination of two problems, redemptions which were the catalyst but also market losses. the unexpected news comes as we wrap up a flat year in equities, something we're talking a lot about and also a rough spell for high yield bonds. year to date through mid december, the white box tactical opportunities mutual fund was down about 22% according to company documents.

the market neutral equity fund about 6%. and the tactical advantage fund just will 8%. but a slew of redemptions meant that remaining investors once that cashes are redeemed would be subjected to too much concentration risk. the funds sold off the positions within the last week or two and went to cash which is where they are at this point. obviously an unfortunate ending for this company, melissa. at the same time, white box manages about $3.8 billion nonthe less spread out across four main hedge funds. i believe the liquidation already complete by mid to late january. >> kate, stick around as well. so if mini hedge funds are sucking wind, how can they command the fat 2% of profits and fee structure? the whole gang is with us for this one. is it finally going to be the time -- i know some have already -- reduce the fee

structure when some doctor in des moines, iowa bought it with 25 basis points of fees outperformed many billionaire run hedge funds this year? >> i think this is a timely question right now. i would say, yes. i do think there is going to be renewed pressure on the 2 and 20 model. this is something that was under pressure four years ago, five years ago at a time when the markets weren't as volatile as they are now. perhaps that is petering out. the fed put is not in place as it once was. remember the 20% performance fee only happens if there is upside. so that may not even come into play during a negative year. it doesn't come into play, rather. the 2% expenses, you know, could come under siege. there are funds that charge less than that. a lot of mutual funds charge a fraction of. that i think it's 209 that really gets to people. you've seen some firms reduce the metrics over the years. i think there will be a call for

that in the coming year. one thng i point out is if you're a pension fund or someone who yourself has some leverage as an invest your, you're probably engaging in a managed account anyway where you negotiate your own fees and it's something less than 2 and 20. >> we do this story every single year. santelli is nodding his head over here. it doesn't work. it hasn't worked for years. why do they keep doing it? three trillion under management and keeps growing. you have pension funds out there. they're now big users of these funds. they are underperforming. they need provide money to their pensioners. they're not doing it. and they are convinced by their investme in. t committees they need to diversify in other asset classes. you're not going to get fired if you bring in apollo or kkr or you bring in fortress investment group. you need to bring in the big names. >> unless you're in the know regress macro fund. >> that doesn't work. the. >> important thing is they convince the committees to hire

them and then they lock them up, these contracts are sometimes five years. i've seen even ten year contracts. that's why the assets don't drop. they got them in locked in for the long term. >> that's true. i think also you have to recognize what purpose these pension funds think hedge funds play. they may be index funds in a large part of the portfolios. they think is very good risk adjusted returns. they're looking for it to replace something else that might not be straight equity ownership. >> okay. guys, this story is very niche. most are thinking why do i care? i live in dallas, who cares? here's why they should care. many of their pensions, if they've got some, are probably invested in these funds. and the reason is, correct me if i'm wrong, if you have a pension fund under a plan, acronyms galore and want to invest, they have to be approved. it's a hard process to get approved the big hedge funds.

they've only gotten bigger because the little guy, maybe the 100th ranked hedge fund in terms of size can't get money because he's not on the approve list. so they keep getting bigger and bigger and bigger which is, as we know, makes it harder to have outside returns. >> right. that's where you see a lot of the turn is below that, let's say, top 20 or 50 hedge fund firms. that's where you have a lot of debts of hedge funds. if they don't catch lightning in a bottle one year, they lose assets and go away. yet at the top, they've become much more staged in large part in the investment process. >> you know, there's been an interesting litmus test in california. if you look at the state-run pension funds there, cal-kers made waves by saying we're getting out of the hedge fund s asset class. they've had bad luck. they never made a dime despite being involved in the big price runups that made a lot of commodity investors money.

that said, apparently, one thing that happened with the hedge funds is they negotiated very hard on fees. they ended up with kind of a b list class of hedge funds. didn't get the returns they wanted. on the other hand, cal-sters, the teacher's retirement system, talked up the hedge funds he had and said we feel like we have a-list hedge funds. we're happy with the returns and we see them as an alternative as mike and bob were saying. it's a portion of the portfolio, not the whole thing. >> i want to switch gears a little bit and talk about the markets. right now we are close to session highs with the s&p 500 at $20.79 and change. we're seeing a big rally in crude. but it's not all about crude today. it's a technology story. it's a biotech story much it's a health care story. >> this is one of the days where it's not just energy bouncing. it's not the leasers getting a lift. it's also not the big tech stock growth leaders performing all year. it's all of them.

i look at the equal weight of the s&p 500. it was up .9%. so you're get a broad blow. a significant selloff in conservative bonds. so maybe there is some rotation going on at least on a one-day basis. >> i'm disappointed, mike that, the biggest losers of the year, chevrons and your caterpillars were up initially and they sold them off going into the middle of the day. so energy and materials which should be leading here are not. instead, you have tech and health care, a more diverse group than in the leadership position. >> all right. we're going to wrap. there thanks so much, kate kelly, bob santelli and bob pisani. the ibb is up 15% in the past three months with buy yioteches there is always data due out. what should we look for to drive the stocks early next year? january is, nain fact a big tim for the conferences. >> it s we're doing well for the last three months. last six moves the year was a rocky time for biotech.

a lot of pressures came on drug pricing. so investors are just exhausted. they're looking to january to see positive catalyst. a few things they should look for. there is a battle among a muscular dystrophy drugs. it was supposed to have an fda decision tend of december. the fad pushed it back and we're expecting that in january. most folks do expect that to be negative given given the way an outside panel went for the medicine. the competitor has an outside panel meeting on january 22nd. that could be a big stock mover the space. in second week of january is the jp morgan hk conference. that one is of the biggest inves investment conferences of the year. they give forward looking guidance. cellgene gives longer term guidance and often a lot of m & a is announced. a lot of stocks moving. then third, at the end of the month on january 28th, merck has

an fda decision for the hepatitis c drug combination which will have implications for both gilead and advy. the question here is where are they going to price it? gilead is already on the market with a huge market share. avi is out there, too. is merck going to offer a discount to snap up market share? >> these are the events we see stocks thrown up in anticipation, even in just today's session. these are some pretty big moves that could be a bigger market moving events. >> you have already seen them move a lot. it's one of the biggest movers of the entire year, doubling on positive progress toward get ago principle of law. it will be interesting to see how the stock reacts to the drug. >> whether is the next big conference? because that tends to be the macro volatility generator in bioteches, when you go to the big conferences. >> yeah. the investor conference j.p. morgan comes out the second half.

fwhut ter but in terms of clin calls, there is a lot in april in terms of conferences and there is more smaller ones. >> thank you. >> all right the overall, stocks are having a pretty good little year end run hitting session highs. the dow up is 200 points. look at the map right now. only one dow stock is down. that is "star wars" owner disney. apple, the biggest dow winner up more than 4%. boeing and dupont are up 2% as well. there is the heat map.

welcome back to "power lunch." stocks are sitting around session highs. if you own amazon, can you pat yourself on the back. amazon hitting ab all time high today. shares more than doubled this year. chevron also getting a boost today, up 1%. oil rises, stock down 20% on the year. and check out towers and watson, it is a professional services company which means it helps companies manage employees. the company declared a special one time cash dividend of $10 a share but you had to be a sha shareholder of record as of this morning. sorry. >> lackluster year for ipos this year. 132 firms coming public versus 214 last year with even marquee names like ferrari, shake shack, blue buffalo fading after their

debuts. what is the outlook for 2016? how will the biggest unicorns change the landscape? let's hear from rick peterson who covers the ipo market. good to see you. so what do you think is going to happen with the big unicorns? we've seen them marked down in the private market. so are they going to go public here? >> for the ipo landscape, you have to look at 2015 started. we had -- we were on a six year winning streak in terms of every year being better in terms of more deals. a lot of inventory, a lot of deals in the pipeline. what happened in 2015? it was a flat market. as goes the market, so goes the ipo market. if the market in general sees a recovery in 2016, we should see ipo activity recover somewhat. i don't think we're going back to the heydays of last year where we had record numbers of tech offerings and over 200 yields being priced. going back in terms of the market in 1980s, you know, i'm going to have gray hair on my

head, we were doing 200 a quarter, now we'll be luck dwroi -- lucky to do 200 next year. >> why is that? if people wanted them, banks would issue them. >> the bottom line is performance. look at ferrari. it's trading at $40. >> look at gopro. shake shack, down 50%? >> yeah. >> twitter. >> but then conversely, square, the venture capital buyers at the last round was a down round. they had to cut the price to $9. now trading at $12. >> sounds like you think the pricing is where the issue is. that there are too optimistic coming out of the gate and therefore they're trading badly. it's not that we haven't seen investor appetite. they've been going into biotech shares. the game show says, if the price is right, the question is when are the big ones expected? >> it's like the unicorns.

you look at snap chat, uber, the question, is you know, is there -- are they going global? >> they don't have to. they can raise money. >> look at twitter. you would agree a company that had never gone public. >> never say never. >> right. the stock has been slaughtered. and now everyone sees, they have flat, you know, user rates and all -- you can look at the bad metrics once you're public and say you're not growing. i'm not just picking on twitter. when you go public, you have to release all the information to the public. the ceo is making what? and your company stinks. >> you expose yourself to the scrutiny of both, you know, regulators, investors, institutional individuals. >> there is another side to the ipo market, too. it's not just these, you know, small companies coming public. it is also private equity. so on that front, don't private equity firms, don't they need to get the companies out? >> we had neiman marcus failed,

albertsons failed, those are lower prices. again, all those lbls done in '06 and '07, sponsors and funds want to get out of the portfolios, again, they have to be adjusted accordingly. >> so they'll be adjusted and come in 2016 you think? >> we think so. >> thank you. >> happy new year. >> thank you. all right, another big day for energy, oil and nat gas both higher. nat gas is soaring. we're going to get your final trades coming up. first, we're going to speak with a man whose company makes the huge beautiful ball that will be dropped in times square thurz night but land safely. >> that's not a ball. >> that's a triangle. that's a piece of the ball. we're going to learn all the cool details about the ball, not the triangle coming up. ♪ take another little piece of my heart now baby ♪

stocks setting year session highs. one of the biggest sector winners, health care being led by biotechs. the s&p 500 is up 22 points or 1.1%. the nasdaq is the biggest gains of the major three, up 1.4%. etf winners right now, no

surprise. technology. power chairs qqq, that's up by 1.7%. msgi up is by 1.7%. as i mentioned, health care is a big winner. the bht is up by 1.25%. frontier communications and kinlder morgan is rup. >> if you're planning to spend new year's eve in times square, i'll give you advice f you're stuck outside, bring a jacket. also bring adult diapers. bathrooms are in short supply. >> you and your bathroom humor. >> it's true. anybody that's been there knows. and if you're going to dinner, bring a credit card with a high limit. >> yeah. >> restaurants are putting on the ritz. check out what some national chains are charging. these are per person prices, folks. for dinner with views of tim ao person. bubba bum, $800 a person. these do include drifrpgz.

>> then it's worth it. >> and use of a bathroom which, as you may know, around 11:30 could be worth every penny of that price. >> like 100 time what it normally costs. >> and no bread sticks at olive garden. that is the rumor. speaking of times square, it is estimated that more than one million people will be there in person to ring in the new year. why? no idea. one billion more people will be watching the ball drop on television. this is a treat. here on set with the man that designed the ball, tom brennan. a man so into crystal literally was born in waterford city, ire land. >> is that a retiremequirement e job? >> you think of waterford crystal and celebration. a billion people around the world watching what i call my company. this heritage company, 1783 we began. we were founded. so steeped in tradition and craftmanship and heritage. times square, how special is this? >> okay. so that is a piece of the ball. now that looks -- that doesn't

look round. >> this is one of the 2,688 panels that surround the sphere. waterford crystal times square. this is what it's all about. >> may we touch it/steal it? >> please don't drop it. >> this is heavy. there's 2688 of these? >> yes. >> how much does the ball weigh? >> it weighs 12,000 pounds. >> six tons? >> exactly. there are billions of light prisms. when the light shines through the crystal, it explodes into this beautiful facet of light that the world is watching. >> the bam looks the same to me every year. it is actually the same every year? >> when we do is we actually change the theme. so waterford crystal, we celebrate the greatest gifts within us all. so this year is all about the gift of wonder. human kind's desire to look at what is out. there i'm watching you put it in your pocket. the unexplore. the unexpected. so this year's theme is that gift of wonder.

looking ahead to 2016 with great wonderment. >> will is no way in hell you'll tell us what the ball would cost. >> someone would want the ball. >> i'm buying it for my living room. >> my yacht. >> that's a question we ask of our self. we never ask it of our self. it is priceless. this year is all about celebration. it's all about waterford crystal. it's all about having a great time. >> there will be a price. >> you better let him go. >> this is priceless, believe me. >> so if you're from waterford, ireland and had a choice between begin he is and crystal -- >> guiness hands down. >> congratulations. thank you for coming in. happy new year. >> plushure. >> oil is rising today. nat gas is continuing the rally. we have the final trades coming up on "power lunch." stocks rallying big this hour. stay with us. oh remotes, you've had it tough.

watching tvs get sharper, bigger, smugger. and you? rubbery buttons. enter the x1 voice remote. now when someone says... show me funny movies. watch discovery. record this. voila. remotes, come out from the cushions, you are back. the x1 voice remote is here. hello, everyone. her air he. the governor of missouri says 13 people died because of the flooding. the mayor declared a flood

emergency and people in west alton have been evacuated. the mississippi river expected to have a record high crest later today. >> fire officials in augusta, georgia, joining the list of agencies warning consumers about hover boards. releasing this picture of a board that caught fire on christmas day. the consumer product safety commission is looking into 22 cases of hover board fires. a people who overdose on painkillers are able to get new prescriptions for the same pills. researchers at boston medical center looked at 3,000 patients and found 90% got new prescriptio prescriptions. and florida police are asking for help in tracking dhoun guy who stole a woman's purse while she was praying in church. surveillance video captures the moment the 84-year-old victim realizes what's going on. police are offering a $3,000 reward leading to his arrest. that's the news update.

me list yash melissa, i hope they get him soon. i can't think of anything worse than staerg an 84-year-old's nurse church. >> oil prices closing right now. jackie has the final trade. >> good afternoon. looks like we'll close just under $38 here. we got about a dollar pop on wti today. brent also rising. an equal amount but staying under wti. a negative spread there. not unusual activity as we head into a three day weekend. this is a light volume week. we had a 3% drop yesterday. you have people coming in to buy the dip here. this is exactly the pattern we saw as we head into christmas and that three day weekend. also, remember the saudi budget coming out yesterday? now evidence here that saudi arabia, one of the biggest producers, is being squeezed by the prices. a day after that, some people are wondering if we may see changes to production coming next year. obviously, wouldn't be in the coming days but perhaps some of that thinking that's coming into this trade as well. still, a lot of traders are saying there is down side ahead if the fundamental picture

doesn't change. those 2015 lows we could test them again in january. so buyer beware. back to you. >> all right. thank you very much. it is another big day for natural gas futures. they're up around 6% today. get this, over just one week, up 25%. two big factors likely at play. number one, short covering. people short the contract, january contract about to expire. they have to cover. second, because winter weather is finally coming to, you know, winter. and look at this leveraged etf. the velocity shares three times long nat gas, wow. up more than 60% in the past week. of course, melissa, if you're on the wrong side of that trade, you're going to get run over. but if you own the gas for a couple days go, to olive garden on times square. you can now afford it. >> stocks near session highs right now. the dow is soaring just about 200 points. bob pisani joins us from the nyse floor. bob? i would imagine this is a very light volume day. but still gains are gains.

>> yes. yesterday was the lightest volume dayst year. we'll get a similar one today. i doesn't matter. all that matters is the numbers. let's take a look at the markets in the middle of the day. the important thing is you have three things working for you. when oil behaves, you have a china rally and europe rally, what else do you want here? you got a rally. new highs are expanding a little bit. 2-1 advancing to declining. it's getting better as the day wears on. the volume on the light side. in terms of sectors, a very diverse group out there. tech, health care, consumer discretionary all leading. what is not leading is the most beaten up names, energy and materials. that's a little bit disappointing. we have new highs. the old consumer name that have been hitting new highs for a long time. they're up there again. the names are practically every day on the new high list. when you start getting an expansion, here's what i'm not impressed with. we should be getting more of a push in the caterpillars in the world. but they gapped up early on. then they drew down. now they're trying to move back to the upside. still thashgsz a pretty modest move for a stock that's down more than 20% on the year.

same with chevron. gap up and essentially they sold into the rally. guys, i think this is a little bit of a warning sign that the buy dip even the most beaten up stocks on a rally going into the close of the year is pretty modest. that indicates that ininvestors are cautious on buying the names in january. back to you. >> all right. thank you very much, bob pisani. how do you play your final trades and what is ahead in 2016? let's bring in our fast money traders. hooi, guys. good to see you. let's pick stocks for 2016. david, i'll start off with you. i want to start off with a stock that is hitting a new high in the session, the s&p 500's top performers of the year. that is am zovenlt hatz a pe of 1,000. >> i love it. we talked about it on the show last night. i think it's a great stock. we had that debate on the show and where the stock is going to go this year. that stock is going to continue to work. for long term investors, sit back and say this isn't a good opportunity is a mistachlt i like the levels.

again, are you going see ebs and flows? short term. i can't predict. that i can tell you long term this is a company that's going to win and continue to win. you listen to them talking about bringing on a fleet of 20 planes. we talked about that in the show. that shows you, that's a perfect sc example that the distributions can't keep up with the amazon growth. >> you're seeing some bullish activity in the options market to back this up. >> yep. just as david is saying, the stock is on fire. they bought the 680 calls. these are calls that expire on thursday. they bought the 680s, 69 0shgs 695s and 700s. they're looking to extend all the way up to 700. at least that's the bulls out there and certainly where the $17 rally today, they're happy about the returns. >> and target, doc, you like that? >> target, they were buying out in january. taking a cheap shot buying upside calls, selling puts to pay for it. they got that wallet coming out. it might come out earlier than

some people had been predicting. maybe that's part of the push today. target really seemed to do very well into the holiday and that's a reflection of that as well. >> david, the best performing stock in the dow this year, i mean we have a couple -- unless something really goes wrong is nike. nike is just crushed it on every metric. should the viewers and your clients sell nike, take the winnings and buy something else or hold on? >>, no i mean there is nowhere to hide in retail right now. nike is a name that we've been behind for a while. still behind it. it's going to continue to go higher. anyway, the idea here is this is a company that is really immune from a lot of what we're seeing within, within the retail space. there's a massive inventory overhang there. you know, nike is not seeing that obviously. you saw the numbers. the futures numbers in china were amazing. so it shows that they're really executing on all fronts. this is a company that should continue to do well in '16. >> how do you wrap your head

around investing the stock that is already hitting highs with huge gains in the previous year? i mean it's difficult on a valuation basis to make that case, per se, an amazon or netflix. >> it is difficult. pete's been much better at it than i have. he's been in royal caribbean and in carnival cruise lines, for example, every day i see him on the heat seeker. the stocks are at 52-week highs. i don't buy them. every day pete rides it and says how do you like it? i missed it, david. but as far as, you know, a netflix and that extension or the amazon move today, yeah, they're just -- just fen phenomenal performers and the focus of the stocks because of that narrowness of the rally in the fangs, that's been great for both of them. >> i'm just an oil geek, david. are you recommending any oil and/or nat gas names? >> my opinion in particular is i think this is the weakest part of the economy. you're going to get certain

levels. this could be a level where you get a near term bounce. i think it's very early to jump in the stock. i think next year we talk about this on fast with melissa. next year is going to be a very interesting year. first quarter and maybe the first half of the year you're going to see tremendous amount of companies go bankrupt. you're going to see the borrowing basis be retracted soon. they're going to go bankrupt when is going to force a negative sent. for the entire space. i think it will be down side to the equity initial reaction, that's when can you step in and buy some of the, you know, higher quality companies that exist. >> switching to semiconductors, you like lattice? what about lattice? it's not a name we talk about too often. >> a good earnings report. good guidance. the shares are up over 8% today. then you look at another chipmaker but completely different, you take a look over at navidia. outperformance versus a stock like qualcomm. they were talking about that one today.

qualcomm, it's finally getting love, maybe because jim was mentioning it on the halftime. but that's a stock that i think with renewed focus on what they're all about, whether it's the cdma and the rest of what they do rather than some of the bizarre focus that they've had over the past two years, really, i think this one could get back on the horse and ride next year. >> okay. guys, thanks so much. "fast money" traders and contributors. all right. clearly the bulls are in charge of the overall market at this hour. the dow getting close to break even for the year. one of my predictions, my first prediction is the dow would end the year up 0 to 5%. i need just another .5%. we have much more market coverage in this rally. look at the winners in the pharmaceutical space next year. you're watching "power lunch."

welcome whack to "power lunch," everybody. we have a nice rally on our hands. the dow up is 200 points. cisco, one of those names that is higher as well. the company prevailing in a patent lawsuit related to wi fi technology. an appeals court saying that cisco did not infringe and,

therefore, does not have to pay $64 million which is about a penny of earnings for the company. willis group rising to day will be added to the s&p 500 replacing fossil and adeptus health. also getting a boost, the s&p 500600 index. >> as brian mentioned, stocks near session highs, it's been a good year for pharmaceuticals in 2015. up 5% on the strength of m & a activity and pipeline growth. so what is the outlook for pharma in 2016? who will be the winners? joining us the senior vice president at moody's investor service. great to have you with us. certainly a lot of the large cap companies have plenty of cash on their balance sheets. but what are some of the circumstances or the catalysts that will actually make them do deals next year as opposed to having the ability to do the deal in 2015 and not doing them? >> sure. so we saw a lot of pretty large deals in 2015. it was a record year. deallogics says there was

billions of health care in 2015. we think it will be another big year, probably not a record level as 2015 was. many of the drivers for doing m & a and pharma are still there. large traditional companies, merck, pfizer, are looking for pipeline assets and other companies in the space are doing the same thing. generic companies in the sector really need to keep consolidating and growing through scale. and that's to offset the purchasing power of their customers who also keep consolidating. zbh right. >> the drivers are still intact. we expect more m & a in 2016. >> the companies that have yet to do a deal, i mean i agree that this year has been a very big deal. but in terms of going into next year, we've seen also prices of their potential acquires go up, too. so is the circumstance -- i mean, are they being forced right now? it is because their stocks are not doing well? what are some of the catalysts

here? >> right. i think every company is different and every company has a different type of objective. for many of them it's growth. looking for that pipeline drug that will propel earnings. other companies really still are looking for diverse fiction. so gilead is very concentrating on hepatitis c and hiv. biogen is in multiple sclerosis. they'll look at m & a to diversify into other disease areas. >> so in terms of the potential acquires, michael, i know you don't cover stocks per se, but are you thinking that there's going to be some big mega mergers next year or that it's going to be focused mostly on large cap companies buying smaller companies that have maybe a drug in development, some way they can expand the pipeline? >> right. i think we'll see the most of are deals in that find of $5 billion to $10 billion range. maybe a little bit higher. this is what amgen paid for

onics. this is what gcellgene played. those deals are likely to continue. for generics, i don't think the deals will be that big. there are is a lot of consolidation ahead. >> thank you very much, michael. well the markets are up fwoig day. apple leading the charge on the dow. boeing, dupont, intel also at the top of the list. qualcomm do qualcomm doing well over on the nasdaq.

we were just debating in a commercial break individual investing versus sector investing. we want to know, and tweet us, do you buy individual names or would you buy an etf or a sector? we're curious. we want to serve our customer, melissa. >> i think there is room for both. >> one customer was burrittos. >> so why not give them burrittos and tacos? >> and sushi. now for the tale of two sectors. consumer staples were up 5% year to date. utilities are not only boring but bad this year,

underperforming 7% on the year. let's dig deeper and get investment tips from spencer joys and robert plaza. spencer, first you to. if the markets don't do a lot next year and bonds a lot next year and bonds are sketchy because of the fed will utilities be an outperforming sector group next year? >> thank you for having us, brian. we absolutely think utilities could be an outperformer should the market trade flat or even slightly lower next year. as we turn over into 2016 it's really difficult to find an investment bank out there that is favoring the group at this point. so here at hill yard lines we love wearing that contrarian hat, if you will. as you mentioned the group or sector has underperformed a bit this year on a market cap weighted basis and we do see the potential for some tactical rotation to take place. >> spencer, i'm sorry to interrupt. i don't understand, you're saying if the markets are flat next year then that's a good

environment for utilities. that's exactly what we got in 2015. we also have a lot of volatility in 2015, we had a lot of uncertainty surrounding the fed in 2015, with international markets in 2015 and utilities were still down 7% so far this year. >> yeah, fair point there, melissa. the first thing that i would say is that the water and natural gas utilities actually did out perform -- our coverage groups are up double digits. there are some places for investors to do some stock picking and benefit from utilities. also, you mentioned the fed and we believe the market did a fantastic job positioning their utility holdings in front of that fed rate hike. so as we look out to next year we expect a relatively benign fed and remember, the fed is typically less active in front of a presidential election. so to the extent the market is expecting two, three, four rate hikes next year, we could be -- we believe that they could be disappointed on that front and

utilities could actually see a bid there. >> let's get down to picks. in the water and gas sector you have two picks and they have already performed quite nicely so far this year. what do you foresee in 2016 that will cause american water works up 14% this year and atlos energy up 15% this year to continue to perform. >> we will start on the water utility side, american water works ticker awk, we admit the utility sector is fairly expensive at this point, but awk is the largest and most diversified water utility out there. we think their multiple is probably as defensible as any of the sector and we expect them -- or, excuse me, we expect they can deliver on their growth outlook largely regardless of any individual regulatory jurisdiction or the broader macro economy. quickly jumps over to athos

energy, it's almost a purely regulated investment play levied heavily to the state of texas. so if the regulations stay strong in texas and support for gas in texas persists, we believe awk can continue to perform and would also flag relative valuation as a positive for athos eto. >> have a great new year. thank you. >> thank you. >> now let's get over to robert plaza and talk about some of the consumer staple names. robert, this year we talked about the best performer in the dow, that's nike. the worst performer in the dow is walmart. so much for this low gas price is going to benefit everybody kind of a thing, but that is one of your top picks for next year. why do you think walmart the stock is going to turn it around? >> i think right now most of the bad news is priced in. i mean, pretty much anybody you ask about walmart, they know

about the wage mepressures, the know about amazon, they know about all the investments that the company has to make not only in the stores but in their e-commerce and technology. trading at 14 1/2 times with the yield around 3.3% i think it's a pretty good risk reward setup from here. >> at the same time, i mean, we know about the bad news and i think that's a big part of the investment decision, but what's the catalyst for walmart at this point? >> well, if you go back to their analyst day in the fall when guidance was slashed, i mean, pretty much every analyst on the street had to slash their estimates, the down grades came and out of the 31 analysts -- street analysts following the stock right now there's only five buy recommendations. i believe that's the lowest in the history of the stock. i know it's less than half of the analysts that were recommending the stock at this time last year so i see little earnings risk going into 2016. if they can stabilize and even -- >> so they just have to meet expectations to do okay, is that

what you're saying? >> yeah. they're pretty much speed bump high expectations at this point. >> another pick you've got, robert, is by far the best named company in the world, mondalese. why do you like that one? >> i like that one because they have margin expansion opportunity -- >> apparently -- >> see what happens when you offend mondalese. >> i was making fun of their name and they caught on. >> no, they didn't. robert plaza, our thanks to you. >> sorry about that, robert. if you can hear us we lost the feed, we will get you back on. we hope you were not just succumb in a see of blue water. stocks are in rally mode sitting near session highs. microsoft trading at levels not seen since march 2000. alphabet of course you may not it formerly as google, all time highs back to its ipos in

august, 2004, and amazon trading at all time high levels since back to its ipo in may 1997. so what a day we've got on our hands. stay tuned. t the td ameritrade trader offices. ahh... 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 that 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... what's up, tim? for all the confidence you need. td ameritrade. you got this.

you mentioned some of the all time highs, amazon is one in today's session, nice day today, up by about 3% or so right now. at 5:00 on "fast money" tonight we are going to take a look at three of the top s&p 500 performers for the year and whether their charts indicate further performance in 2016.

amazon being one of them, the two others among the top ten, we won't tell you the names right now, it will be a surprise. >> it might be one of my names, the three stocks i want to focus on. is netflix one of them? >> i don't know. >> you don't even know what's on your own show. >> i do know. i told you i'm not going to tell. >> you you are that dis attached already? >> all right, brian. go ahead. >> chesapeake, worst performer on the s&p this year, very heavily fought over stock, battle ground stock, best performer today. shorts are out, huge battle ground name, watch this name. necessary flicks the best performing s&p 500 stock this year that may more may not be talked about on "fast money." and hp, hewlett-packard, solid performer this year. ibm will split up, not going to happen, but if hewlett-packard goes well after their split you might see ibm look at it.

>> global equities say they could deliver the high end of the range for the month so that's one that we're watching today as we are seeing the dow clo close to session highs up 73 points. >> thank you for watching "power lunch." >> "closing bell" is up right now. welcome to the "closing bell," i'm sara eisen in today for kelly evans at the new york stock exchange. >> i'm bill griffeth. big rally on wall street albeit on light volume, energy one of the big winners in today's session, oil catching a bit. you can see all ten sectors of the s&p 500 are higher today, tech and biotech among the leaders today driving the market higher, we will dig deeper into what's behind this rally and whether it can hold into the new year here with santa claus clearly on wall street at least today. >> speaking of rally, amazon shares hit be an all time high today on the back of those strongol