tv Power Lunch CNBC May 2, 2012 1:00pm-2:00pm EDT
buy lpx, louisiana pacific, nice outside reversal. higher today. they make the building materials, begin to build the position. >> quick on whole foods. >> i think you want to look at 8.6 in terms of comp sale stores. that's the metric you want the stock to pullback. >> bye-bye. halftime is over. "power lunch" and the second half of the trading day start right now. >> second half, our time of day. welcome to "power lunch," everybody. if you're long the markets today, you're short a little bit of cash that you started with. right now the dow down 25 points. about a fifth of a percent at 13254. jobs report and jitters about it and the euro concerns driving the markets a little bit lower. i'll get to sue and bob pisani at the nyse in a minute. but first check out this fact. stocks down a little bit today. there's sue. let's move over here. let's talk to you about where they've come if you've been in the market for the past six months or so let alone the past
couple of years. over the past six months, if you're in the market, you're making money. real dollars are at stake here . if you put $100,000 six months ago, you'd have $113,120. if you made the same investment two years ago, you're up more than $18,000. you'd have $118,000 right now. just some food and money for thought. all day we're running through traditional investments so you can see how well you've been doing or not. let's go right now to mary thompson with some breaking news. >> hey there, tyler. the meeting that was held here at the new york federal reserve right over my right shoulder just concluding. it was a rare meeting. the ceos of a number of the nation's top banks called here by federal reserve governor. he wanted to talk to them about the stress test. they had some other things like new regulation and how it might
impact their economy and their businesses are on their minds today. we caught up with jpmorgan ceo jamie dimon after the meeting. this is what he had to say about it. >> just productive dialogue. >> we also spoke with morgan stanley's ceo, james gorman. he told cnbc that it was a productive meeting. he remarked it's good to keep an open dialogue with regulators and said, again, it was a good meeting. exactly who was at the meeting still remains a mystery. of course we know gorman and dimon were there. also expected to be there goldman sachs' ceo lloyd blankfein. bryan moynihan and joseph hooly walking into the fed earlier today. noticeably absent was citi's ceo vikram. he was traveling and could not attend. any details about this meeting, we'll have them for you. back to you. >> terrific. thanks so much, mary. we look forward to that. when it comes to the market the
only thing that seems to be clear about this particular market is that things are rather unclear. the market trying to move higher, it's well off its lows. there are those obstacles ty mentioned, europe, u.s. economy and bob pisani is here to kick things off. you always like to say, try to explain this to your mom. if you can explain it, more power to you. >> good luck. we've got this crummy choppy economic data and the dow at a four-year high. how do you explain it to your mother? i'll tell you, mom, there's no place else to put your money right now. look at that. we've come off the lows here today and there's no place to put money as well as a qe-3 kind of play going on here. now, we have concerns about the global economy. you've got demand destruction concerns. and you can see that today in the material names. concerns about lower growth, concerns about lower production of materials. all the material names are to the downside. >> yesterday -- >> it was a lit l sunnier. numbers are getting choppy now. germany's manufacturing numbers
were notably weaker. one thing about spain or italy, but germany, that was a bit of a surprise. also note the energy stocks are really weak today. marathon had some disappointing numbers. and i'm worried about which he is poole peek. i'm worried about the influence chesapeake is having on the overall energy group. not just the ceo issues but overall issues with the company seems to be dissuading investment in energy. >> quiet trading day tomorrow because we're one day ahead of that jobs report. adp and retail sales. >> yeah. that's going to be a big one. >> thanks, bob. see you later. ty, back to you. >> thanks, sue, bob. the adp jobs report they were just talking about much weaker than expected. 119,000 private sector jobs added. that was well below expectations. so what does it mean for the big number on friday? steve liesman is our senior economics reporter. steve. >> yeah, tyler, that's exactly the way the market is focused right now. investors faced with a simple but pretty fateful choice when it comes to the adp number. to believe it or not, and relative to that bls number coming out on friday. here's why some economists are saying discount this adp number.
it's payback from warm weather and the bls captured that payback in the disappointing march jobs report. so it won't show up again in april. ubs also pointing out the last two adp years they missed in april by an average of 144,000. that's a big miss as far as adp goes. a very powerful reason to believe the adp number. it does go along with other softer economic data, especially jobless claims pointed to a weakening in the economy. joe maroff saying the economy hit a low in the spring, whether that's weather related is not yet clear. high frequency overpredicted in march so could swing the other way in april. but we can't ignore the headline number. we think this softening will not last. they did bring their number down, by the way, from 200,000 to 125,000 for friday. rdq pointing out, we ignore it. we don't use the adp employment report in our forecast for payrolls. we continue to look for nonfarm
and private payrolls to have risen 175,000 in april. there are viewers from smart economists. another critical question, if the april bls report includes weather payback, is that process now over? the friday number will now reflect actual trend. goldman tells me he thinks there's a bit to go and that's why he thinks 125,000 compared with the trend of 150,000. that would make the 168 just a bit strong, but close to what the actual underlying trend in job growth is likely to be. >> quickly, steve, how is the fed using these job numbers these days? >> i think they see the softening, but i think they're also conscious of the weather and the payback and that process. they're going to wait to see how this plays out over the next month or two before they make a call on whether or not the job market's really soft. >> steve, thank you very much. to jeff kilburg now. if the job number is great, how do i play that? >> well, ty, if we see a good number and beats expectations, we are actually going to see three different possibilities.
but i think guy adami's talked to this s&p level at 1425, you can long etf spy. also i think you should play the financials, another etf xlf allows people to play a nice basket of financials. finally, i think autos will pick up. as people have been trying to figure out should they buy that car, should they not buy that car. if we have a nice positive number, vrom. 50 different of the world's largest auto companies to play that angle. >> if the number's disappointing? >> we see that grab for treasuries. i've been talking a lot about the 10-year retesting that 1.67 level. folks at home, they can play this via the etf tlt, that's the bullish treasury tracking the 10-year. but also i think they're going to have a precious metal grab when they see gold and silver. you can play the gold and the silver, the gld is the gold etf. and the slv is the silver etf because quantitative easing is coming back and front and center. >> jeff kilburg, thanks, see you in a few. sue. >> ty, a lot of people think
there's another trade in that market given qe-3 looming out there. meantime, the battle over e-books is heating up. target is going to stop planning to sell kindle devices. what's the details on that? courtney reagan has the information. >> target confirmed it was testing apple within a store formats and 25 locations today target announced it will stop carrying amazon kindle's related products in the spring. i asked why and all i was told is that target continually evaluates its product assortment to deliver best products for our guests. fazing out amazon and kindle related products. we will continue to offer our guests a full assortment of e-readers and supporting accessories. so while those e-readers be ramped up with apple's retail power? maybe. but target sells the barnes & noble nook. so it's an interesting move to discontinue just the kindles, although amazon's product rgs tightly connected to the massive
online store that also sells a number competing products for often lower prices that target can offer. tyler. >> courtney, thank you very much. shares of chesapeake energy tanking right now. the stock at three-year lows as we take a look. reason why ceo aubrey mcclendon apologizing for the controversy over his personal finances. looks like he's got more problems ahead. kate kelly has the latest. >> hey, tyler, amid revelations ceo aubrey mcclendon ran a hedge fund for four years. in an investor call that helped drive shares down 13%, the cost of insuring against a default on a company's debt has leapfrogged today to close to $700 for each $10 million in a 5-year note. it's the latest indication of bearishness on the company's positi position, which in a word issin debt and had struggling with rock bottom gas prices. mcclendon was put on the defensive about the asset sales, how it plans to lower spending and why it isn't repurchasing
shares right now. everything essentially except for his personal controversy, to address that he apologized during his opening remarks for the "distractions" but also cautioned the group your mother told you not to believe everything you read or hear for good reason. we'll see, sue, if he can weather this particular fire storm. i don't think he's been under this kind of heat in a long time. >> i would say that's a very fair statement indeed, kate. thank you very much. all right, staying with the energy sector. we're focusing in on the coal stocks which are really feeling the heat today. they're all on the downside. arch coal posting a loss cutting its sales forecast, slashing its dividend because of weak prices and falling demand from utilities. its rival, alpha natural resources, also expecting to be in the red when it reports its earnings tomorrow. and speaking of coal, check out these pictures. protesters holding up signs saying bank of coal at bank of america stadium in charlotte. a number of those protesters being handcuffed and led away. not strictly a stock story, but we also bring it back to the
charts here on "power lunch." and if you look at a chart of b of a, the shares are down 33% in a 1-year period of time. but consumers are still spending. despite uncertainty about jobs and economy, mastercard's profits jumping more than 20% from a year ago. comfortably topping their estimates. it also says it's gaining share in u.s. debit card market. and as how the major credit card names have been performing over the past year, mastercard up the most. it's up more than 60%. visa reports after the bell up more than 50%, discovery up 40%, american express 20%. and capital one laggard, it's up only 1.5%. ty. >> whole foods among big names getting ready to report after the bell today. the stock has been on a tear up 20% this year sitting at 52-week highs. down a little bit right now. jane wells at a whole foods store in glendale, california, with what investors need to know ahead of the results. jane. >> ty, i call it the apple of
grocers, get it? this company has beat estimates every quarter going back almost four years. can they do it again? the street looking for share up 15%. what are analysts saying? from morgan stanley "we believe investor expectations are high for this beat and raise story." it believes comps will get tougher after the quarter unless there's upside in this quarter, it will not raise full year estimates. goldman sachs expects 10% comp store sales. that's about a point higher than consensus, but considering the stock's p/e and high stocks underperformed regardless of earnings that cite starbucks and mcdonald's, "we await a better entry point to accumulate shares." looking how shares have performed, they're up over 900% since hitting a bottom in november 2008. finally, i asked folks on twitter what's the oddest thing you can buy at whole foods. these are dragon tongue beans
photographed by jason jeffson at the whole foods right outside its austin headquarters. >> is the most widely sold thing -- the biggest seller at whole foods? >> well, what the company tells us is the trends right now are really in organic produce. we're talking broccoli, tomatoes, cranberries, apples, and then 365 private label is doing well. and things like olive oil and maple syrup and protein powder and frozen produce. what i was surprised, tyler s so far we haven't heard talk of a jump in their ground beef sales because of the pink slime scare back in march. we'll have to see if that's on the call today. >> you got to go to the one in time warner center downstairs, it is like a foodies amusement park. absolutely packed. >> i've been there. it's like disneyland. >> absolutely. thanks a lot. moving now to the big picture. throughout the hour we're going to take a special look at the future of your money. we'll break down our audience in three groups ranging in age from
25 to 50 plus. michael fall kin, ahead of u.s. retirement at jpmorgan assess management with more than $2 trillion in assets under management. and jeff kilburg will weigh-in as well. michael, you have done some work for us on people between the ages of 25 and 35 and what the optimal portfolio mix for them might be. take us through it. >> so we're looking at two things. we're looking at investors in retirement in any stage. we're looking at the investment behavior and the investor behavior. for investments, in your 20s, your 30s, you want to be broadly diversified but heavier into equities, more risk because you have more time horizon. our target date funds will target typically 85% into equities. that's a mix u.s. large cap being about half of that. and then spread throughout small cap, reits, emerging market. >> so we show the rather more involved pie chart here on the screen. the three biggest categories here are u.s. large cap. >> yes. >> second would be. >> second largest would be
international. and third largest would be your core fixed income. but we're spreading the equity amongst a lot of different classes. and that's to diversify those. >> i can get this through active management or etfs or index funds, right? >> you can do it any way. the most important thing for investors 25 to 35 to remember is to be saving and investing. that's the challenge that we have. so the investments, if you're diversified and rebalanced, you're going to be okay. you need to be putting money away. we see too many young people not saving early. those early savings, 25 to 35, can be more than half of what you have -- >> those are the ones you have to take advantage of the long-term compounding of that. jeff kilburg, how do you react to what he just said? >> i like the way he has the composite, but this is the time to get aggressive. buckle that chinstrap, a young buck. i think a tech and financial and emerging market play either etf or single stock really gives you exposure for that aggressive type of growth at that age. >> but the real key there i think is putting that money away and being disciplined about it
early on because that's the way you take advantage of the power of compounding. >> absolutely agree. >> gentlemen, we'll be back with you. next, we're going to look in the next half hour at another age group, stepping it up just a little bit. sue. >> you gave me the perfect segue, gentlemen. a year ago if you wanted to open an account with one of the biggest names in finance to get that compounding, they probably would have told you no thanks. but that barrier of entry is about to disappear. kayla tausche is working that story for us next. and back to the wall. the past six months have been great if you've been in this market. the past 24 months, even better. if you had put $100,000 in a simple fund or etf that tracks the dow 30, like the dow jones industrial average etf in the last six months your $100k would have gone up to $111,950. over the last two years it would have netted you more than $120 grand. back in a moment.
i'm bertha coombs at the markets flash desk. we're watching shares of sears moving higher. the company holding annual shareholder meeting today. and ceo and chairman eddie lam pert talking possibility of some changes. possibility that maybe the lands end brand might be spun off of something independently. they said it wouldn't be difficult to sell the brand. sue, you may have notice d.
>> to finance now. the carlyle group, one of the most exclusive names in finance, they used to only take clients willing to pay a lot of money to get in. now could be your chance to get in as the company decides to go public. private equity giant lowering price range as it prepares to hit the market. kayla tausche joins us live with details. >> hi, sue. the order book filled yesterday, but where they price their ipo tonight will be a key indicator of how investors feel not only about that name but about financials in general and whether you'll want to buy shares in the open market. now, sources say the price range for that deal is lower to $22 to $23 a share from a range previously two bucks higher. carlyle wants to post a deal at a discount. you can see upside after one peer, oaktree capital, has been sinking down about 6% since its ipo. and general lackluster trading by other p/e firms since they
went trading. the current valuation for carlyle is at a discount. perhaps the conservatism is necessary considering its distributable earnings could well go down next year. now, remember, it's a volatile industry where shareholders only make money if the market for deals remains healthy. that's not the case right now. i'd say buyer be ware. tyler. >> kayla, thanks very much. more euro concerns. german unemployment, bad. banks, bad, the list goes on. how to play bad next. first, another look at your money. if you put $100,000 into gold six months ago, you'd be down $4,600. only have about $95,370 left. over two years though you'd be up $40,000. more "power lunch" continues in two minutes. and i thought "i can't do this, it's just too hard."
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together, they raised ap test scores 138%. just imagine our potential... ...if the other states joined them. let's raise our scores. let's invest in our teachers and inspire our students. let's solve this. jobs of course not just a problem here in the u.s. word today that unemployment across the eurozone jumped to 10.9%. highest level since the euro was launched. it comes just a day before the european central bank meets. michelle caruso-cabrera is here. michelle, is there anything else the ecb can do to help? or should it? >> well, two different questions. the difference is important, tyler. sure, there's a lot they could do. a lot of people think they ultimately will print money. they're not going to do that
tomorrow. remember, that eurozone unemployment number that you pointed out really incorporates a lot of different countries. let's show you what's going on in the southern countries. spain, unemployment 24.1%. greece right behind it above 20%. portugal and ireland 15% and 14% respectively. and you'll unemployment in spain and greece above 50%. those are the southern countries. take a look at the northern countries. things are extremely different there. germany has an unemployment rate of 5.6%. by the way, number was worse than they expected out of germany, still very low. lux em borg, netherlands and austria extremely low rates. you have the continent, ecb is supposed to do monetary policy for an entire continent. and they are driven by what germany wants at this point. the ecb meets in barcelona tomorrow. the european central bank does offsite twice a year. and put on standby in case of protest similar to what we saw
yesterday with mayday. spain is where, by the way, the very first protests truly started. the indignants, those involved in the occupy wall street use them as a model. our team in europe don't know how big the protests are expected to be tomorrow. also important, the fact the ecb will be in spain tomorrow, take a look at the spanish market, which has just gotten hammered over the last couple of years. spain's big problem is its banks. it's not like greece where they had promised so many more entitlements to their public workers than they could pay for. they had a real real estate bubble in spain and the banks have a lot of bad loans on their books. and the ecb, it's expected at some point, might force spain to do something when it comes to recapitalizing their banks. and the question is where is spain going to get that money? the same question we ask over and over again about europe, tyler, there's a big hole into which they need to pour money. the question is, who's going to do the pouring? back to you. >> michelle, i'll take it.
coming up next, "power lunch" first, the author of a new "vanity fair" article about what's really happening behind the scenes at goldman sachs will join us. first, the metal markets closing. the final countdown is on. we'll go live to the floor for the close when "power lunch" comes back. comes back. or creates another laptop bag or hires another employee, it's not just good for business, it's good for the entire community.
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all right. gold prices are closing right now. and sharon epperson is tracking the nymex action for us. we just heard from michelle about the troubles of europe. that's been a big influence on the foreign exchange markets. how is it playing out in gold today? >> it's pressuring the euro, so it's pressuring gold and silver as well. we're actually looking at the entire metals complex lower. and as gold is closing for the open outcry session right now, sue, we're looking just above the 1650 level but down about $9 or so. a lot of traders very concerned about what's happening in italy and spain. and also some of the larger eurozone countries, france and germany, and the impact that their growth troubles are having on the euro is definitely influencing what we're seeing in the gold market as well. >> i noticed the copper was down about 1.6%. how much of that has to do with
the euro story? and how much is the china demand story? or maybe it's both. >> it is both. we did get that hsbc data showing it's the sixth consecutive month where we're below that 50 level. so showing that kind of data is something that's definitely pressuring copper, and copper of course is the biggest drag. what traders are waiting for is just what michelle was talking about. what's going to come out of this ecb press conference tomorrow. not so much what happens with the decision on rates, but really what they say there in terms of any fresh stimulus, that will have the most impact on gold in the session ahead. >> all right. thanks, sharon. >> sure. >> all right. even with sharon described interestingly enough stocks are down today, but overall the dow is at a four-year high. bob pisani joins us here on the nyse floor with yet another -- >> explain this. >> -- counterintuitive retailers you're focusing on. >> concern about pulling job forward with the warm weather. the same worry exists with the retailers right now. we're going to get retail sales for the month of april tomorrow.
and a lot of people are saying it's going to be a mess. yet nobody told the stock market. this is a new high on the s&p retail index. a whole bunch of the names you know and love are all at new highs today. i think, again, a lot of the issues are that the numbers are not that bad. for example, american eagle had great numbers this morning. >> but isn't that people betting on the consumer underpinning the economy? >> yeah. >> and putting in perspective economic stats that change from month to month, get revised, adp not as reliable as some people think it is. it's more a bet on the consumer. >> the retailers have held up really well. they have survived with half the staff in some of the cases. they've been cost-cutting monsters. there's a little bit of a concern here because the warm weather and what was going on mother's day, mother's day a little later, it's not going to be helpful. and of course we saw what else happened with easter earlier. that pushed sales into march. still, expecting 1.5% growth in retail sales. that's not a bad number after all. >> no. absolutely. we'll take it. thanks, bob. to the nasdaq now and seema
mody. hi, seema. >> hi, sue. tech stocks taking a breather after yesterday's strong start to the month of may. the adp data weighing on the broader index. to get down to some specific names though, take a look at linkedin. that's one of today's losers. the company suffered a brief outage this morning, but the networking site is back up. therefore the stock is pairing losses. and investors continue to hit the sell button on first solar. that stock moving to an all-time low of 17.78. in today's session the worst performing stock on the nasdaq 100. that's a look at some of the movers today. tech under pressure, sue. >> thank you, seema. let's go to the bond pits at the cme and rick santelli. >> don't put all your eggs in survey baskets. that's the lesson of the day. a two-day chart of 10-year note yields tells you pretty much everything you need to know. ism yesterday comes out, a survey, boom, we go from 190 to 196. today adp more of a head count, more of a quantity number. and it's about jobs, jobs, jobs.
boom, we go from the high mid-90s down to 1.90. and where do we stand? an average of the two. it's textbook. a market pretty comfortable where it is but paying attention to data. if you look at a 20-year chart of bund rates, 1.60, you'll never find a lower one. historic lows. tyler, back to you. >> rick santelli, thanks very much. to scott cohn now with breaking news. >> the biggest bust in a massive crack down on health care fraud. $450 million plus, 150 charged. you see eric holder and kathleen just getting started. we reported on this crackdown just last month in our documentary "health care hustle." strike forces across the country have recovered $4 billion last year alone, which is impressive. until you consider the total cost of the fraud as much as $160 billion a year. today's raids were in miami.
59 defendants there alone as well as tampa, chicago, detroit, houston, los angeles and baton rouge where seven people are accused in a scam involving mental health care. in that case alone more than $225 million in false claims allegedly bill today medicare. that alone would be one of the largest medicare frauds ever. we're watching this news conference and will have more developments as we get them. >> thank you very much, scott. back to our investor war room. i have now aged, michael. i've aged to 40 to 50 years of age. let's look at the model portfolio for smart money management at that age group. take me through it. >> so here's where we're doing that. still the long time horizon. we want to still have a heavyweighting towards equities. our model portfolios are around 68%, 70% equities at this time. still a mix with international u.s. large cap, small cap and emerging market equity. but now we see core bond and core fixed income take a larger role and also high yield and
emerging market debt. >> when you say core bond, what does that mean? >> we're looking at, well n this environment we're shorter on duration given where rates are, but you're looking at a diversified holding that includes not just governments -- >> corporates, munis. >> as appropriate. >> and you say the biggest temptation here is to resist the temptation for withdrawing money. i've already succumbed. >> this is it. small things hurt you. we have a page in our guide to retirement that shows you look at this chart and you see small things like money out for kid going to college. money out for a home or home improvement. small amounts paid back quickly and have a big impact where you end up. >> so every minute that money is not compounding is one dollar less that you're going to have. jeff kilburg, how does this -- i sense that you're a little more aggressive than michael, generally. >> slightly. but back to my -- >> but you a young guy. >> i am. back to my notre dame football days, coach told us, win, what's important now. that's so applicable here as a
middle age investor has investment goals in sight, they have to realize that the timeline as we're living longer into our 90s, we have to keep our investment goals in sight. not only save for that but be aggressive in the growth stocks. >> and aggressive in the growth stocks like these here you talk about. energy, spider, utility select and other things. jeff, we'll come back to you in a minute. we'll talk about the 60 plus age group and talk smart strategies for withdrawing money. let's go to breaking news with kate kelly. >> thanks so much, tyler. fascinating news out of hedge industry. the legendary energy trading is retiring from what we understand. he will return some of the asset ifs not all to investors. he's announced this to employees and investors as of today. he wants to dead came himself to philanthropy. this is a remarkable move considering the man is only in his late 30s. he's a former enron energy trader. he bought a number of portfolio out of am rent. may be the best known guy when it comes to trading natural gas.
he's a young man. he's made billions. his fund is essentially running about $3.5 billion or $4 billion at this point. it's unclear whether they'll be opening up a smaller operation like a family office or returning all of the assets to investo investors, ty, we're following the story throughout the day. it's a fascinating move. >> it sure is, kate. i'm surprised. given his success and his age. but if he wants to devote himself to philanthropy, more power to him. >> it sounds like he had a fairly good run, but, you know, maybe he just wanted to turn his energies elsewhere. >> look forward to hearing more from you on that one. thanks. >> thank you. >> goldman sachs ceo lloyd blankfein on cnbc last week saying he's staying. but what's really going on inside goldman right now? an exclusive sneak peek of "vanity fair" new article that's going to have everybody talking. another look at your money. the average national six-month
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put me at 5 timesd out my greater risk of a stroke, my first thoughts were about my wife, and my family. i have the most common type of atrial fibrillation, or afib. it's not caused by a heart valve problem. i was taking warfarin, but my doctor put me on pradaxa instead to reduce my risk of stroke. in a clinical trial, pradaxa® (dabigatran etexilate mesylate) reduced stroke risk 35% better than warfarin. and unlike warfarin, with pradaxa, there's no need for regular blood tests. that's really important to me. pradaxa can cause serious, sometimes fatal, bleeding. don't take pradaxa if you have abnormal bleeding and seek immediate medical care for unexpected signs of bleeding, like unusual bruising. pradaxa may increase your bleeding risk if you're 75 or older, have a bleeding condition like stomach ulcers, or take aspirin, nsaids, or blood thinners, or if you have kidney problems, especially if you take certain medicines. tell your doctor about all medicines you take,
any planned medical or dental procedures, and don't stop taking pradaxa without your doctor's approval, as stopping may increase your stroke risk. other side effects include indigestion, stomach pain, upset, or burning. pradaxa is progress. having afib not caused by a heart valve problem increases your risk of stroke. ask your doctor if you can reduce your risk with pradaxa. coming up on "street signs," good things can come in threes too. like our triple play stocks that beat estimates for earnings and revenues and they upped their guidance as well. we're going to talk five names ready to party. and how to get filthy rich cleaning up this dirty oil. a company that makes everything from pesticides to bedbug killers, this stock is red hot. and the booming business of botox. we talk to the ceo of alagan. now back to sue and tyler on
"power lunch." >> thank you very much, mandy. a terrific profile from cnbc contributor bethany mcclain. it's in the june issue of "vanity fair" just coming out. it's about lloyd blankfein's tenure at goldman sachs and those continued succession rumors entitled "blood in the water" reports calls for his resignation are getting louder. he told us on cnbc just a few weeks ago that he has no plans of going anywhere. >> i have no plans to leave. i read the same papers you do. i just don't know -- you may think they get it from me. i can tell you i have no idea where they get it from. my plan is this is a terrific job. it's interesting. you get to be in a lot of different industries. i get tremendous support. >> bethany mcclain joins us from chicago. welcome, bethany. he says he's staying put. and your article really doesn't take a stance as to whether he's in or he's out. but your article does suggest strongly that this is a company
that can feel the winds of change blowing. getting ready for one. what do you say? >> i don't think there's any question that blankfein wants to stay. he's a proud man. and he wants to go out having left goldman a stronger place than when he came in. and if he went out now, i think it would be very debatable whether that's the case. but the problem for goldman sachs is that reputational risk is as real as financial risk. and the continued public hammering at the firm's reputation is going to start to hurt its financing at some point. and the board may find themselves without a choice. and it's interesting because goldman's always been a place where the political maneuvering is bitter and fierce and, you know, like a gladiator war, somebody described it to me. it goes on in private and now it's taking place in public. >> it's usually clandestine, as you point out it can be quite brutal. you made the case he's been a better stew ward of the company's financial fortunes than of its reputational fortunes.
you also obliquely make the case that he might have been gone but for some of the travails of the past few years. >> right. he's been a longer ceo of goldman sachs than many other recent ceos. and if it weren't for these issues, you can see leading that firm, i mean, it's -- that's a 24/7 job. and it would be enormously stressful. you can see he might have said enough. but as i said, there's no way he wants to go out feeling like he left the firm in a weaker place than when he came in. >> if this company is at a cross roads of some sort, is the current leadership the group that is best positioned to take it across that cross roads skillfully? >> that's a great question. i think the current leadership has led the firm very successfully in financially speaking. but they have not done a great job in stew warding the firm's reputation. this is a time those issues are more important than ever before with coming regulatory changes,
with the intense focus on finance. and i think it's a really scary time for goldman because the firm needs strong leadership strategically speaking. the winds of change are hitting the entire financial industry. >> great article in "vanity fair" by one of the best in the business. bethany, good to see you. >> thank you. blackerberry maker researchn motion is making a bold move. brian shactman is dialing in from the meeting. >> there's about 5,000 people here. and they're excited. why is it everyone outside of orlando isn't? i'll try to reconcile that and put to rest the issue whether there's going to be a physical keyboard on the blackberry 10. i'll have the answer for you next on "power lunch."
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breaking news. one of the best known names in the motion picture business trying to get back in the game in a very big way. and david faber has that story. david. >> that's right, sue. michael ozner, former chairman and ceo of the walt disney company is trying to raise $800 million for a new film and
television production company according to people who have been approached about investing. the effort kicked off last week and being led by jpmorgan, which is seeking to raise $400 million in equity in private placement and place $400 million worth of debt financing. the production company produce two to three scripted television shows a year, again, according to people who have been approached to invest. the 70-year-old eisner has been focused on incubating digital content in a company he founded upon leaving disney in 2005. he has not however re-entered the business of making motion pictures or full length television over broadcast or cable really since leaving disney after a 21-year stint as its ceo. he's expected to invest about $20 million of his own funds in the new production company is a well-known quantity when it comes to producing money making movies and tv shows. he had a hand in movies such as
"grease." that has president and coo of paramount before he moved onto turn around disney. jpmorgan could have a tough time raising $400 million in cash for the offer while also syndicating a revolving line of credit. first off, that's just a big amount of money for a start-up production company even with michael eisner at the helm. it's not clear whether he's signed a deal or whether he'll receive producing fees on the movies separately from the company. that's a potential nonstarter for investors meaning he's making money even if they're not. he and officials at jpmorgan decline to comment. tyler, back to you. >> david, thank you very much. let's move now to the story about rim and its developers conference. the company unveiling prototypes of its new blackberry smartphone. the question of course is whether the phones can come to market in time to stem the significant market share bleeding the company's been undergoing. brian shactman is at the developers conference down in
balmy orlando. >> orlando. tyler, listen, i put the question directly to the new ceo thorston hines. he says when blackberry comes out, they're confident they will begin to gain back market share. the number in single digits according to some what it will actually be like. but that's the sentiment down here. everyone knows it's an uphill battle right now with hemorrhaging markets here in the u.s. but vendors, some have been with research in motion for years, they're not giving up. and as you might imagine, neither is the company. >> we've had great success with our previous blackberry products, but it's time to modernize. it's time to rejuvenate the platform. this is the first step in doing that. >> as for this keyboard issue, people were absolutely buzzing yesterday about the new virtual keyboard. did it actually mean there won't be anymore physical keyboards on blackberries? i asked the ceo that as well and he said the physical keyboard will be a part of the blackberry portfolio. but it actually brings up an
interesting question because if you get any complaint about the iphone, sometimes it has to do with the auto correct and that keyboard. if blackberry can get it right, whether it's virtual or physical, that might be a real selling point for people who are skeptical on the brand. tyler, back to you. >> thanks very much. let's go to jeff kilburg now and see how he is suggesting that we play rim. jeff. >> well, ty, i think you have to consider stepping in and buying here. we have seen this stock absolutely decimated. the old saying even a blind squirrel finds a nut, well, i think rim is due. there's high expectation on this 10. i think you can get in at the $12, $13 price level. back to you. >> now to bertha coombs with a stock market flash. >> really? okay. hey, how are you, tyler. i was just checking on something here. we're watching natural gas. natural gas falling here ending what's been an up trend for the last couple of days. of course natural gas recently had been at 10-year lows. we're seeing a bit of a selloff.
some folks are saying perhaps it might be in response to kate's report with that big energy hedge fund trader retiring, the head fund manager, that some folks may be skittish here. also a little technical resistance as well. nat gas had been on an upswing after having been at a 10-year low. sue. >> thank you very much. as we continue on "power lunch," a new trend in dotcom shopping. women, click aside. and if you took $100,000 and put it into one of the big dividend mutual funds or etfs, you've done pretty well. in the past six months you would have made $8,320. in two years that $100,000 investment has made you almost $13,000. back in a minute.
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and the yield on the 10-year now traded at 1.9 2%. lending credence to jeffrey's comments on cnbc the other day saying there is another wave of treasury trade in the wings. and it looks like we are getting that with the markets certainly, tyler, very nervous about what that employment report is actually going to look like on friday. >> and given the number that came out today, no wonder why the market is nervous. back in the investor war room. i now have folks at the age where they are nearing retirement or have retired. this is one that's interesting to me. >> close to you. >> close to me. not that i'm near retirement. no. michael and jeff here. the key here is don't mess it up, right? >> now you're in the zone. you're coming up to retirement. and so we're derisking here. we're moving our model portfolios and spot retirement moving to 30% equities, 70% fixed income. i know what jeff is going to
say. we're too conservative. >> because you can live 30 years in retirement easily. >> you can. but we're also looking at protecting capital. you don't have time to recover and to make up necessarily savings that you do in your younger years. but we are adding risk into the fixed income portfolio as well. increasing allocations to emerging market debt and high yield debt. but we're also introducing cash, tips and commodities into the portfolio for the first time. >> as we see there. now, key question is how to withdraw just the right amount per year? >> that's the most common question. roughly 4%. >> per year. >> you have to be careful. 4% adjusted for inflation is a typical benchmark. we look at -- you have to be careful in the early years against market performance because see kwens of returns really matters. >> turn to dr. kilburg. >> although we may not agree exactly on percentages, we do agree you need to look for higher yielding bonds. if you're at the end of your
investing career, you can't get caught in the generation mall move when rates do go up. we don't know when they'll go up, but you don't want to be caught in a bond fund. >> we talk about how to play things. with these kinds of portfolios, you're not trading all that much, are you? >> well, i would recommend trading a lot at all for individual investors. >> you would not? >> not for the individual investor. for the avid investor, sure, you're tracking it, put money aside and track, great. for most they need professionals. >> good advice. we appreciate your commentary on it. sue, what do you think? >> i think one of the key issues, ty, with all the good advice we've given people through the hour is whether or not the individual investor has confidence once again in wall street. and i think that a number of them do. and then they have to commit to it. i mean, the statistics that we've been giving you through this hour about if you had invested two years ago, if you had invested one year ago, shows you the power of compounding. shows you the power of how wall street can indeed help build