tv Power Lunch CNBC July 5, 2013 1:00pm-2:01pm EDT
>> murph? >> key bank. >> that was mine. you stole mine. you saw that. >> key bank is mine. not his. >> doc? >> hban, and i'll throw one out for weiss, how about sun trust, weiss, sti. >> all right. have a great weekend. we'll see you on the other side. follow me on twitter. "power" starts right now. "halftime" is over. "power lunch" and the second half of the trading day start right now. >> good afternoon, everybody. up and down day for the dow after a big jobs number. the unemployment rate 7.6%, right where it was last month. what does this all mean for the taper patrol? the folks who wonder what's going to happen. there you see the dow up 95. now, that brings up the question what should you do now? we've got a roster full of people ready to answer. violence, of course, over in the middle east. let's go over here now to this monitor where the muslim brotherhood supporters are hitting the streets after friday prayers. they are, of course, angry to put it mildly over the ouster of
their man, president -- former president, i should say, mohamed morsi. new questions arise in europe and problems popping up again in portugal and yes, greece. with all those factors out of america's control, how fast, how far can our economy grow? it's all ahead this hour of "power." first though to sue at the new york stock exchange. >> the markets off the best levels of the day. we have seema mody over at the nasdaq and josh lipton will join me in a second, but we want to focus on the ten-year note yield at 2.71%. that is a dramatic move in yields, and that's really bench kind of spooking the stock market off and on about this trading day. right now we're off about 90 points. josh lipton, basically stocks turning lower after a very strong opening, and then basically trying to claw their way back. it's not a bad report. >> keeping us busy today.
let's quickly go through some of the leaders and laggards. hpg, axp, some of the banks, jpm back and utx, look at benchmark winners, the regional banks in the green and what's not working, miners and builders. lennar, dhi. sue, back to you. >> seema, how does it look from your vantage point? >> signs of the economy a big plus for tech, a sector that bodes well for the confidence in the market. one challenger is a strengthening dollar that makes the services offers by the global i.t. firms less competitive overseas. sam sung's earnings, the big story in tech, the latest report shows that the saturation in the mobile market right not be an apple centric story. apple's shares in california
back mode, up 6% and down today. lastly, biotech, a risk averse sector, a pocket of strength, outperforming the nasdaq. sue? >> all right, actually, i'll pick it up from there, seema. thanks very much. so, steve, let's talk a little bit more. >> got the nice relaxed summer suit on. >> i think you're okay. >> i'll be appearing in court in charleston later today. >> i guess i've got to get forward. >> waving you forward. >> you know why, because it's a good jobs numbers? >> who is adding the jobs? >> i'll get to that in a second. the edges of this report were good all around, and even when you peel back the layers, it looks pretty good. here's the first thing to look at. payroll up 195, beating the revision. revision 70,000, april and may up higher, people came back into the workforce and the average hourly earnings number is doing better, 0.4%. now you ask me where are the jobs? >> where are the jobs, steve?
>> first this is the manufacturing jobs. >> year over year. >> 5.3% year over year. >> some of these are smaller sectors but you can see there construction. did you think you'd see that, engineering, auto manufacturing. some of the laggards of the past recession, and some of the hardest hit, they are doing the best, and then we'll turn to the services sector. internet media, broadcasting and online jobs. one of the internet jobs, up 20.5%. performing arts and spectator sports. home health care, patient care, temporary help, that could be a good sign. 6% for the future. >> let me ask you this. when this survey is done, does it include people who are employed part-time? >> yes, it does. >> right. >> so that is one reason why the so-called underemployment number might have risen this month because it's counting people who want -- >> they want full-time. >> but they can't get it. >> theporttimers in there, my
son who works 25 hours a week. >> that's what makes that wage number so good. if people are working part-time for economic reasons and many are getting jobs, that would tend to bring down the average wage growth so we'll see if that lasts. if that number lasts, could you rethink how well the consumer is going to do in the coming months, a little more change in their pocket might result in a little bit more spending. good to see you. >> have a great summer. >> no, i'm going away for a week. >> have a great trip. >> steve, thank you. will this jobs report be the one that brings upon the taper quicker? jul julia, nice to see you again. let me just start with you. is this the one that sort of presents the likelihood that the fed begins to pull money out of bond market or slow the purchases maybe more accurately come september? >> yeah. i think that this is certainly
moving in that direction. nng it's, you know, a done deal but certainly there's a bias to taper. that's what we've learned over the month or two, and this report is more of the same, steady job gains, and that seems to be what the bar s.yes, i think september is now looking more and more likely. >> another brick in the wall, julia, says john. do you agree with that, and as the unemployment numbers not just for june but for the prior months get us up into the 195,000 average over the past three months, that would suggest that maybe it is time for the fed to pull back. >> yeah. i think jewel gentleman's got it right. 190,000 per month for the last three months, as you said, will really i think cement the deal unless something really strike happens, and i think that's what the bond market is telling us today. i think the selloff in bonds is simply indicating that, hey, it's more and more certain that the fed will start its tapering
and when they do, there will be less demand for treasuries, prices weaken and interest rates go up. i think the bond market is basically confirming what julia had to say. >> the fed has basically said they are not going to raise interest rates, the ones that they control, but the market is already doing the talking for the fed, isn't it? julia, where do you see interest rates settling after this really appropriate to us rise over the past six weeks? >> yeah, i mean, this is the tension for fed policy. i think fed policy-makers would like to have a smoother control over the interest rate process, and i think it's been a little more volatile and rapid backup than they bargained for. treasuries obviously getting hit very hard. we could be moving into the 275 area as taper comes closer into the -- i mean, we're already there, and mortgages are really underperforming, and so next week consumers are going to be look at 5% mortgage rates. what does that do to the housing
market? still low by historical standards, but it was the extra low interest rates that really kick started the housing market. it does affect affordability consideration, so i think that they would ideally like to have had it be a more gradual rise but markets are paid to get ahead of the fed and not wait for the fed to smack them upside the head. >> that seems to be what they are doing. john, final thought here. how healthy is the economy, john, overall? what kind of growth are you expecting in the second quarter and then for the remainder of the year and then into 2014 quickly? >> well, the second quarter is the weakest quarter of the year. in the second half it's 2% plus growth. i think overall in the u.s. economy, we've got a steeper yield curve, yes, a little bit more negative for mortgages, some of the long-term financing, but short-term rates still pretty low and i think the economy still has good momentum. >> john, thank you very much. julia coronado, thank you as well. sue? >> now that we have background,
more with our guests. jeff, let me start with you given the backup in the ten-year over the last two days. how are you playing in the market right now in a rising interest rate environment? >> we're seeing strength in the dollar. immense pressure in the pits behind me has to be measured. right now i think the ten-year is limited at 3% because we can't see rates go above that. how will we play that? we'll short the stock market due to the fact that you want to close under the 50-day moving average. when i get long, the etf, allows you, contemplating take a bite of tlt, and that will coincide with further rising rates and plummet in prices. jim, how about you? are you into individual stocks? how are you hedging against the volatility we're starting to see? >> just as we can't go with 3%,
to that i'd say why and i'm sure that discussion will go half an hour. >> why can't we? >> because of the fed's balance sheet. >> if the market starts turning on it, they will turn, and there's leverage, banks all over the world run hedged to the rising rates. i'm not sure they will go over 3%. you asked what i'm doing. here's what i did. the utilities that we bought so much of when yields were at 1.6%. those become less valuable and attractive based on the positions from before. i think a stock like cat is a sell. rising rates here does nothing to help that. >> back to his point. >> what i wanted to say, why can't we go above the 5%, 6% mark? >> right now you're going to see the higher interest rate is going to cool down in the stock market, but more importantly it's all about interest rates and where we can go from here,
so at 3% i think that really puts the stock market down. then, jimmy, then, correlation, flight to quality comes back and the fed, with the number we had today, even if we had the same consistent job number for the next year, next year, it only lowers the unemployment rate by .5 so that takes us to 7.1, so the fed who did move the goal posts from 6.5% unemployment index to 7%. have to wait another year with that date of data, boo-yah. >> very quickly. the fed is going through a thing where they say taper, volatility rises and then they say not so fast. they might come to a point where they lose enough credibility. i'm not positive that's going to happen. just a possibility in my mind, not discounted by my friend. >> we will see. >> all right. we will see. we'll see whether we're above 5% on mortgage rates next week. thanks, guys. live now to egypt and yousef, our correspondent, of course, on the ground, is going to tell us
exactly what's going on. yousef, over to you. >> reporter: we'll get you to the details but it's heating up close to haarir square and egyptian state television as pro-morsi demonstrators start walking into the vicinity and are calling for the president to be reinstated. we'll get you all the details after the break. opportunities for those who stand ready to seize them. in a time when the biggest risk is playing it safe, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, our flexible, collaborative approach helps forward-looking companies not only run better, but run different... to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work.
lema when they were turned away. police using water cannon and other devices to rid the crowd. riderless horses, they didn't like it. >> obviously not, and other in egypt the muslim brotherhood is calling today a day of rejection. they are standing against the ouster of mohamed morsi deposed by the army on wednesday. there's been some violence today and a major march is on right now. cnbc's yousef gamal el din is live in cairo for us again. yousef, over to you. >> reporter: well, sue, tensions are very, very high. remember this morning we already had violence. at least three people have died in that violence in clashes between pro-morsi supporters and what we believe were military officers. now, if you can see here, this is the 6th of october bridge and a large contingent, more than 1,000, probably several thousand of pro-morsi supporters.
you can hear them in the background chanting morsi, morsi, morsi, and they have become closer to tahrir square, and that is why there is a lot of concern here that this could flare up very, very quickly. now, we're talking about less than a mild between the two, and the military has been trying to cordon off and keep them apart throughout the day. military gunships, apaches hovering over the city, those have increased in the last half hour or so. they continue to call on former president mohamed morsi to be reinstated, and we said that this is a source of risk, a source of anxiety and significant trepidation, and they are right below our vantage point right now, and that's also close to the key state television institution which is also guarded by republican guard and the mshlgts so tensions are very, very high here. this could play out very, very different ways in the next few hours and, again, you can see the chopper in the background but that's all for me for the
moment. >> yousef, thank you very much. we'll be getting back to you as that situation continues to develop and the possibility it could turn violent. egypt, of course, is a reminder of the volatility in the middle east, to say the least but problems in portugal and greece are also on the radar. how far can the u.s. economy grow with all these macro problems? mark dow is with us. thanks for being here. >> thanks for having me. >> how much of a roadblock, if you will, will some of these global events be to the u.s. economy or maybe not be to the u.s. economy in. >> i think you have to pick and choose. egypt, a very serious situation. it's new. the people have a voice and need to be heard, want to be heard and won't rest until they get what they want. it used to be elites getting in a room and cutting a deal and forming a government of some sort. that's not there, so it will be very noisy and could get violent, but the spillover from
egypt is not likely to be that great. portugal, greece and some of the other emerging markets, if indeed they have similar problems, can be -- can weigh much more on our growth. china in particular. there's a low risk of social upheaval and were it to happen it would be quite serious. >> right. >> also, the growth rate in china is a worry. aside from the possibility of social unrest, the growth rate, depending on which figure you believe, and now we're going to get even less data and less transparency out of china. i would think that that would be a great worry. >> the relationship between the two is what's important, because at the end of the day the deal has been between the chinese government and chinese people, a faustian bargain, of sorts. we give you growth and you shut up. the growth rate is slowing and people have become wealthy and they are looking for other things that relate to the quality of life. on top of that, demographics that run favorable, credit bubble, a strong word, and a lot of information that has to be
digested and they are going what economists like to call a middle income transition. it's more difficult to grow at the rates they were used to growing at five, ten years ago, so that's going to make it more difficult for the chinese to maintain this bargain, and now they are waiting. the global economy is significant. europe is, too, and europe also has a growth problem, a little bit of a different nature. >> it is of a different nature, and does it reassure you at all with the statements yesterday and actually the day before as well that interest rates are going to remain incredibly accommodative by the ecb, and it seems as though they are trying to jawbone the market a little bit, reassure the markets, specifically in portugal, that they are going to be as supportive as possible to some of those european economies. >> there are limits to what monitor policy can do, and that's one of the things we've learned from watching the united states, japan and other countries. if the transmission mechanism, the rate at which banks lend
money, is broken, then there's little that lowering the cost of money can do to get that going again. in the united states we're seeing them get traction because of the de-leveraging process taking place and now monetary policy is starting to have a little bit of effect and we see the backup in yield and europe is nowhere we are in the process. if you look the other day in the newspaper, online, the imf downgraded the growth rate for italy this year to slightly negative. the latest pmi numbers okay out of europe giving us hope but no fiscal stimulus and monetary policy broken and it's hard to see a basis for growth out of europe either so it's good what draghi signaled, but i don't think it can help them that much. >> just looking to get the late on the ten-year yield. we're at 2.71%. been a pretty dramatic backup in yields. how worried are you about that,
and do you think we're at or near a near-term peak in yields or how much higher can we go? >> i thought a while ago we'd settle in at rates around 2.40 or something like that, but the problem with market psychology is you get to a particular level or to a particular speed, and psychology triggers and people say, okay, we're in liquidation mode, and once you're in liquidation mode, until the fire kind of burns out on its own, it's somewhat data dependant but not entirely and once you flip the switch, liquidation occurs until you calm down and people say, okay, my risk is in a place where you can sleep at night. massive flows went into bond funds over the past four or five years and that money is coming out. up until today things are stabilizing a little bit and with today's number, another sharp move. you can bet over the weekend people will be calling up their brokers and say get me out of bond fund x. this has implications for an
emerging market because unlike in u.s. treasuries margins are thin. a lot of guys trade on exchanges but don't understand that the over-the-counter markets need a market-maker. so we have an unfortunate combination of events. >> and not necessarily a good combination. we have to leave it there. your perspective is always fascinating. >> my pleasures, sue. >> we'll fast ebb our safety belts and get ready for monday. >> ty, up to you. >> very interesting conversation. let's show you about a fourth of july disaster in california. my goodness. we will show you how a fireworks display out there turned into a real nightmare. and is smartphone fatigue setting in? what samsung's latest numbers tell us and what it means for growth in the smartphone sector.
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usaa. we know what it means to serve. [ male announcer ] you wait all year for summer. ♪ this summer was definitely worth the wait. ♪ summer's best event from cadillac. let summer try and pass you by. lease this all-new cadillac ats for around $299 per month or purchase for 0% apr for 60 months. come in now for the best offers of the model year. fireworks are spectacular but also dangerous. at a show in simi valley, california, they got out of control. somehow the device that shoots the fireworks up fell on its side and the fireworks were shot laterally into the audience. dozens of people were hurt. suffering bushes, eye injuries.
happily authorities say none of the injuries are life-threatening. it was all caught on tape by a spectator not far from the launch site. sue? >> that's a terrible story, ty. hopefully everyone recovers very quickly. another dud for dissly. "the lone ranger" disappointing at the box office bringing in only $10 million since wednesday. that's well below expectations. it's raising concerns that disney could lose money on the $225 million film. marathon oil getting downgraded to buy and nokia getting downgraded as well. s&p cutting the teleconjunk's rating further into junk. >> shares of nokia rival samsung getting whacked. the company reported record profits but sales of its galaxy smartphone came in below expectations so is the smartphone market becoming
saturated? jon forth, tell us. >> yeah, tieler, yes. saturation is happening. apple and samsung have already gobbled up all the profit share in smartphones and now the concern is there's not much profit growth yet to be had. samsung says to expect sales of about $50 billion in its second quarter. i'm converting trillions to billions and an operating profit of about $8.3 billion. analysts wanted around 8.9 billion in operating profit on average. that is still 47% higher than a year ago, and revenue is nearly 20% higher, but the galaxy x-4 may not be living up to expectations. that possibility at odds with a report that say samsung has sold 24,000 in the past week.
mobile analysts estimate samsung spent about $600 million on u.s. marketing and promotion of 2012, about twice what apple spent. of course, we expect a new iphone from apple in three months, maybe multiple models. the big question i think is samsung going to spend more on marketing to compete with apple or less to maximize profits, and will new phones from google's motorola unit, make things tougher for samsung. we'll see, guys, back to you. >> indeed we will. >> gold selling off once again. it's been a very tough session on that strong jobs report. prices are close and jackie d'angelis has them. >> good afternoon, sue. we're watching the metals very closely across the board. gold price down a little less than $40 or 3% today. the move lower driven by three main factors, of course, the strong jobs report but also a stronger dollar and a higher yield on the u.s. ten-year treasury, but if there's a silver lining today, it's that gold held above 1200. that's a key psychological level
for a lot of traders. want to remind you, gold posted its largest quarterly loss on record, down 23% from april to june. meantime, on a percentage basis, looking at some of the other metals. silver had a tough day as well. down 5% and copper also getting bruise the because strength in the u.s. highlights potential weakness in china and europe. sue? >> all right, jackie. thank you very much. tom brady action, josh lipton joins us post nine right on the floor behind us. 91-point gain, josh. >> yeah, the dow had been up 116 and went negative and now up 92. one dominant theme you've been talking about, obviously the rising rates. yields across the curve, the five, the seven and 10 and 30 hitting new 52-week highs. can you see that playing how the in the equity market. in the s&p, utilities, your worth performing sector right now. you also certainly see it in the home builders, helpary, dhi and
the itb, by the way, down nearly 3%. higher rates, a steeper yield curve and better economic data and better news for some of the regional banks, bbt, all higher. >> let bring in kenny polcari. so what do you do in an environment like today where you have stocks up 91 points? >> right. >> a good jobs report and you now have the ten-year eeld? >> and hitting our head at 50. did it this morning and came back and then back again. a light day in volume. the jury is really out on what this report means and what they will really think on monday so i think you have to be a little bit cautious. money coming out of bond market bodes well for equities. >> right. >> may not be going there right away. people may take a step back and wait a minute to see if we had that reaction like two weeks ago when there was that speculation at the start. i'm still not of the belief that
the tapering is going to start in september. >> even with the revisions? >> i mean, the jobs number was better than expected, and what impressed me most was the revisions in previous reports and that gives a couple of months of almojob creation. >> earnings season starts monday and we'll see how that goes and the month of july with other macro reports. there's sort of a picture to weave together. i may change my mind through july but i'm not sure that this is going to make me think we're going to start taper. >> seema mody is following the movers over at nasdaq. >> on a day when we're tracking the technicals, an lifted say if the nasdaq can hold 3460 that will confirm a move to the upside. stock-specific action, blackberry shares down roughly 32%. next tuesday blackberry is holding a special wecast unsure of what will be announced and
they are hoping for clarify in the pipeline gug its smartphone q-5. and samsung's earnings weighing on qualcomm and sirius logic. >> the currency markets are moving as well so let's find out how bond traders are reacting to all of that with rick santelli tracking the action at the cme. hi, rick. >> hi, sue. i know many are talking, hey, it's long-term rates moving up but don't worry so much. short-term rates, everybody is funding everything with short-term rates but five-year notes, really the epicenter of true finance has really on a duration-adjusted basis outperformed the long end. look at this intraday chart. you can see 160. we closed at 141. close to 20 basis points. open the chart up. this goes back to july of 2011 and let's call it an even two years. let's go back to aforementioned
'10. what's noteworthy here is, yes, we're 2.71 but it's all about the adjustments of finance, not necessarily discussions of taper. last chart, doll' index, competition to july 5th, 2010, a three-year high. >> thanks so much for putting that into perspective for us. and now over to melissa lee with a market flash. >> dell on the decline today as we learn that michael dell is not raise iing the bid deal? recently there's been pressure for him to boost the bid amid shareholder opposition and there's concerns over whether shareholder advisory firms will endorse the offer. we're looking for recommendations any day now, but for now shares of dell are down
by 3.33%. >> amazon is cutting back on discounts on books. plus, it is, of course, the busy summer travel season, but are americans actually giving up their gas-guzzling ways? phil lebeau has some details. phil? >> you'll be surprised when you see the numbers in term of how much more fuel efficient cars and trucks are and how many americans have decided i don't need a car. i don't need a truck. the answers when "power lunch" returns. vo: i've always thought the best part about this country is that we get to create our future. you get to take ownership of the choices you make. the person you become. i've been around long enough to recognize the people who are out there owning it. the ones getting involved and staying engaged.
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as millions of americans take to the road this summer travel season, it looks like many might be giving up their gas-guzzling ways, at least a little. phil lebeau is in chicago with the details on that. i'll believe it when i see it, phil. >> as strange as it sounds, we're using less gasoline in this country. about 25 million gallons per day less than we were a year ago. that's according to gasbuddy.com. take a look at this chart. this explains some of the change that we're seeing in the united states, and it has to do with fuel efficiency. we've known that the cars are becoming more fuel efficient, this according to the university of michigan. in the month of june, 24.7 miles per gallon. that was the average for new
vehicles sold in the u.s. i.cations request behind the auto industry. traffic at shopping center around the united states, down slightly. not a huge drop, but enough that it's noticeable. people are spending more. when they make that trip, just not making as many trips. gasoline consumption down 25 million gallons we are day. that by the way, is expected to continue. that trend of less gasoline usage and take a look at this. the number or percentage of no vehicle households in the u.s. 2006, started to move higher and then it really took off during the recession. right now 9%, 9% of the households in the u.s. do not have a car, and frankly many believe they are not going to. now the potential drop in gasoline tax revenue is a growing concern. remember, most states and municipalities, they are trying to find new ways to fund road and highway maintenance, especially as gas tanks revenues fall off, and then for the automakers, they are also confronting the problem of
having fewer mill ebbials or those 18 to 24, those interested in buying a car. ford hit a new 52-week high today, and that's the highest that they have been since early 2011. so some changes around the country in our gas driving ways. tyler? >> didn't california recently raise its gas tax? >> they did. >> partly because of what you're describing, more efficiency. >> tyler, other states are looking at putting a fee, a surcharge fee, you're not paying at the pump, we need some money to take care of the roads so that's likely to happen around the country. >> a better than expected jobs report with employers adding 195,000 jobs last month, so kayla, will this the straw that broke the taper's back? there's our friendly little taper and push the fed to scale back its easing. what do you think in. >> takes three to make a trend,
right? one nail in the qe coffin with this report. by historical standards, 195,000 jobs not good, but you also need the july report and the august report to show similar signs of improvement before that all-important september fomc meeting is when chairman bernanke makes a statement. that's what a lot of people expect taper could be on the table. we haven't seen anything just yet? >> jon, what do you think? >> is this the one that does it? >> i'm feeling bad for the tapers that you're showing in the video. the data that we're seeing. one nail in the coffin, takes more than one nail to cold a coffin tight. >> i think it will cause them to scale back if the july numbers, august numbers are good and nothing else takes place in the economy or globally. >> i think the taper is enjoying
its month of fame. "new york times" noting that its competition is cutting back on book kiss discounts, mainly applying to academic publishers. a good or bad move for -- is it a good place to go for online book sales? guess this is just the inevitable thing that when one gains so much market share they can set the price where they want t.kayla? >> the anecdote that stuck out to this story most for me is the one who said prices of books have the prices of plane fares. how do you predict what people are going to buy more or fewer books you? can't really game the system here. for consumers looking to buy books and spend less money, can't really figure it out. for the small publishers, too, this could be a death knell. >> amazon is amazing, so much
data about consumer habits, what people want and when and the pricing structure is a big mystery. this headline and story could be written by tim cook because it applies so much to apple's argument in the e-books case having one company in control of this entire e-books market wasn't a good thing. interesting to see kind of where this conversation goes after this. >> and the -- let's move on to another one, sort of a sign of the times perhaps. the artist formerly known aspirins who then wasn't and is now known aspirins again is acting like it's 1999. interview in "v" magazine, i get it every month, the singer says he doesn't own a cell phone. when a world where technology has become such a status symbol, you want the latest, the hottest, the greatest. what is prince saying here, mr. forth? >> big fan of prince, dude is just we are. check out on youtube the kevin smith talk about his week with prince at paisley park. check out some of the stuff that
questlove has written about how prince invited him to a roller skating party and confiscated everybody's cell phones. we know he doesn't like posting stuff on youtube, digital downloads. i mean, this is probably the least weird thick about prince. he's got a bunch of people around him with cell phones. i'm not surprised he doesn't somewhat v one. >> maybe it's a smart move. >> to me it's the epitome of have your people talk to my people. i hope his agent at least has e-mail so he or she doesn't show up at the door before they want to have a conversation about something. >> thank you very much. sewer, down to you? >> sales of boats are surging. still a tough economy so what's fueling that demand? mary thompson knows. she's live on the water near the beautiful jersey shore. hi, mar. >> reporter: hey there, sue. you know, peep in the boating industry are crediting better
housing prices for surging sales of boats, especially big boats like this one. i'll have that story when we come back after the break and first live to cairo and yousef gamal el din. >> reporter: still very, very heated on the ground. pro-morsi supporters have moved into the vicinity right under our vantage position in the thousands. the choppers keep hovering. we'll get you all the details live in cairo only on "power lunch." [ male announcer ] at his current pace, bob will retire when he's 153, which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on his portfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense. from td ameritrade.
♪ the world is changing faster than ever, creating new opportunities for those who stand ready to seize them. in a time when the biggest risk is playing it safe, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, our flexible, collaborative approach helps forward-looking companies not only run better, but run different...
to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because now more than ever, the future belongs to those who challenge the present. it is not uncommon in the arab world. protests after friday prayers, we're now hearing gunfire in kay row. maybe you can hear it in the background as we speak. yousef gamal el din is live in cairo. yousef. >> reporter: can you hear the gunfire right over there. we were talking earlier about the contic ent of pro-morsi
supporters. thousands came across this first bridge here. called the 6th of october bridge and the row in the back is empty. they have tried to cordon off this part to prevent them from reaching tahrir square which is less than a mile away. remember, to prevent further clashes, thousands in tahrir square opposing former president morsi and supporting the military changes that have been made and the military announcement, and then you have thousands more, again, pro-morsi supporters in a different part of cairo as well so the pillars are there for further violence. that's what we've pointed out over the last-3-r 36, 48 hours. the choppers keep hovering around. you can see the gunfire in response perhaps to the fireworks that appeared to have been fired in the direction of some of the military soldiers over there. also, right in front of us,
right below us are more of these pro-morsi supporters, and right beside our vantage point is a key institution, state television surrounded by republican guard and the military that is protected very, very well, because once you have state television you can reach the people very, very easily, but this is a very fluid situation. it hasn't really developed this far, and this intense, especially in this part of cairo. there's kehoe tells here. the american embassy is in that direction, not too far, about a mile and a half out from that point there which, of course, has additional security and as well the british embassy. keep an eye on that. now, it's back to you. >> yousef, thank you very much. we'll continue to go back to you as developments warrant. on a much lighter note we continue our special series toys of summer. recovery may be in for boats
this summer. now to mary thompson with more on that. hey, mar. >> reporter: here at viking yachts the average price for one of their custom-made boats is $3 million. i'm joined today by the executive vice president and c.o.o. patrick healy. thanks for joining us. just heard a report from egypt. how does unrest in the middle east affect your business in. >> it does, any geopolitical around the world affects you. anything that's going to be a problem goes down to the consumer, and that's the big thing that we have to fight every day in doing this. >> reporter: if it's prolonged i would imagine it would hurt your business in. >> yes, absolutely, and let hope it won't be. hopefully, it seems like they have a direction they are going, an hopefully they will go in the right direction and get the democratic society that they want and we'll sell boats in
egypt. >> how has business been? >> since '08 and '09, and the a nice rekohry from the latter half of '10, and today going forward we've had good growth over the last three years but what we're really seeing is tremendous growth going into next year. a backlog ahead of where we were last year this time. >> what's driving this growth? >> i think the stock market is a big thing. i think obviously the economy in general, you know, slow recovery, coming very slowly and the consumer not wanting to wait any longer. they want to get on with their live. they want to go boating. fourth of july, our biggest day, the biggest day in boating. >> i mentioned earlier that your average boat goes for $3 million. who is your typical customer? >> fortune 500 ceos, celebrities, ballplayers, hall of famers, everybody,
developers, car dealers. car dealers is a huge segment and the auto tryinging is going great and a lot of auto owners coming in and buying boats. >> they have it. >> if you could kell us quickly how you were impacted by saturday and whether it hurt or helped your business. a lot of people believed there would be a pickup in business. we came through it fine but the marpa next door received substantial damage. service work tremendous, a lot of service work over the to. things of that nature, boat sales, i think have seen a little bit of an uptick but not a big uptick. >> thanks very much. tyler, back for you. >> mary, thanks very much. america's top states for
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takes a look now at how governors have tried to keep their state competitive in order to attract business. >> reporter: costs are a key to competitiveness and the most direct way a state can control costs is taxes. they are heading down across the country to the delight of the libertarian kato institute. >> more governors than ever are realizing the importance of low corporate taxes and low property t taxes. >> reporter: case in point, pennsylvania which finished a paltry 30th in our rankings last year. >> governor tom corbett in pennsylvania has worked to completely repeal the capital stock tax. >> reporter: governor tom corbett, a republican, says economic growth will more than make up for the lost tax ref knew. critics say the cuts are hurting state services like education. it's not just republican governors cutting taxes. >> democratic governors have tried to give special incentives
or loopholes to certain types of businesses. >> reporter: west virginia governor earl ray tomblin has slashed corporate sales taxes. you need strong state finances which a few governors are racing taxes like illinois, our number 26th state last year, with 100 billion nun funded pensions. democratic governor pat quinn approved a 67% tax increase two years ago, but early reviews on the rescue plan are not good. moody's just downgrade illinois's debt, warning the state is still on a path to fiscal distress and maybe to a lower place in our rankings. scott cohn, cnbc business news. >> and before we leave you, we want to show you once again the bridge. they are trying to clear this bridge which links one part of cairo to tahrir square, and we
have seen stun grenades go off. we eve heard them and heard gunfire, ty, so obviously as yousef has pointed out, a very volatile situation right now. >> those were the morsi supporters apparently on the move towards tahrir square which had been the locust of those against morsi. crude up to 103.13. that does it today on "power lunch." thanks, everybody, for watching. >> "street signs" begins after a >> "street signs" begins after a quick br ♪ ♪ [ male announcer ] if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry, offers end july 31st.
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