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tv   Power Lunch  CNBC  April 13, 2015 1:00pm-3:01pm EDT

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dollar, dollar. >> the billion dollars off of what they expected. this goldman sacks is impressive because of the way the stock is trading. >> you like h ban. >> i like the regionals and huntington bank. it will deliver well-diversified. >> good stuff. thanks for joining us. power begins now. >> halftime is over. the second half of your trading day begins now. >> scott, thank you very much. welcome to power lunch. mandy is here and i'm tyler matheson. the biggest retailers, some of them are under the gun over their employee work schedules. the out come could have major ramifications for retail. >> searching for alpha. the big cap starts in the activist investors. our david faber has the story and joins us live from a major meeting in new york. >> earnings officially kickoff this week and a big bank day
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tomorrow. jpmorgan, bank of america and goldman and citigroup. can investors bank on the banks? >> good question. we begin with the biggest retailers. target and gap are under fire for staffing practices. more on this developing story. give us the latest. >> new york attorney general has sent letters to 13 retailers, including jcpenney target and gap and others asking for information and documentation about staffing procedures as it pertains to on call shifts. the new york attorney general said the receives reports about these 13 retailers and specifically wouldn't elaborate further. according to the letter they have phone or e-mail systems set up where employees find out shortly before their shifts whether or not they need to come in. if they are not needed they are not paid.
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they said reporting for work shall be paid for at least four hours. further, the ag said the scheduling practices make child or elder care arrangements difficult and in addition when it comes time to finding time for alternative source of income to compensate for the lost pay. we reached out to all and seers and target said they don't use on call scheduling. shift changes can be made with store leaders. gap is committed to sustainable scheduling to study and enhance the scheduling practices. tjx said they work together to create fair schedules. mandy? >> thanks for the details. stay with us. let's get more of what it could mean. welcome back to power lunch. good to see you. you have done it all. you have run department stores and even stokd shelves yourself. what do you think it means for the retailers?
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>> i can tell you i hated it when i was stocking because you found out the day before what your schedule was. it was a big aggravation. this was not something new and this law is not something new. what's new is the technology to do it faster. i notice one of the things they asked for is are you using this kronos system for scheduling? what's the definition of showing up for a shift. if you show up you get four hours of pay minimum. if you find out an hour or five minutes before, what's the definition of showing up and would you get paid for it. i don't think anybody is arguing about the fact that we should pay people if they show up for a shift. the question is are we going to change the definition of what showing up for a shift means some if you are an employee it's tough. you need to schedule your life. if you are a retailer you are saving a lot of money by being
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efficient. you only want people there when you have business to do. that's really the push and shove that is going on. >> that's what i was going to say. it's not you. if you were a shareholder, you want shareholders using the most efficient practices they can. this is not necessarily unique to retail. my mother is a nurse and works at an out patient center where there no emergencies. she calls the night before and the morning of and finds out if she needs to come in or not. if she doesn't, she doesn't get paid. >> that was my next comment. why aren't they asking for restaurant workers? why isn't it a to z. it is abercrombie to williams sonoma. >> they received reports on the 13 retailers in particular which is why these are the ones they have gone after. that's why it's not exhaustive. those were my thoughts too.
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>> the digger you are, the more likely you are to get reported. some are doing more and some are doing less. i can't imagine there is a retail they're 80% are scheduled in advance, but there is a piece you are trying to schedule and those people are complaining as you expect they might. >> always good to hear from you and thank you as well. >> we are watching shares of apple this hour. the tech 90's first look into the world of the smart watch. almost a million preorders in the u.s. alone according to early estimates by slice intelligence that uses data from e receipts. the watch sold out online within hours of when it went on sale friday. buyers won't receive devices until may and others have to
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wait until july. apple up 15% so far. >> ge on the back of the 7% jump in the stock. shares are under pressure and they announced a massive restructuring move. it is a buy, sell or a hold. that is coming up in the next hour. >> more late flights and lost bags and more complaints and more profits. more evidence that flying is getting worse and worse. phil le bow has details of a grim survey. phil? >> this is a study called the airline quality ratings study. these are the worst results since 2008 and here's the reason why. this is contucked by the universities and found consumer complaints were up 17% last
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year. fewer on time flights and more people denied boardings and bumped from the flights and mishandled bags increased by 11%. at a time when the airlines are charging more for services has increased flyer frustrations. >> airlines are 84% full. no middle seats. consumers prefer that if they could. fewer flight options. consolidated flights. you can't get the flights you used to get and you are paying more for it. >> what are the top and the worst airlines? virgin america for the third year comes in at number one followed by hawaiian delta which was the most improved in this year's survey. jet blue and alaska. on the flip side of the 12 rated, look at the three bottom ones. regional carriers. envoy and express just and sky
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west. ranked lowest is united behind frontier. the bottom line is this. even though people are frustrate and may not be happy with the service, nothing is going to change because the airlines are profitable right now. the land is footworking for the bottom line. >> the editor of airline weekly phil just pointed out that profits are up. oil prices are down. jet fuel costs are lower, but complaints and happiness is way down. is there a correlation between airlines making more money and beverages liking them less? >> if you look at delta, they have done a good job of kurping around profits and operations. a lot of it comes down to that comment we heard about the middle seat. you can survey people about the
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same flight and whether they were in a middle seat or aisle seat and with nobody next to them or if there was somebody colors their perceptions. things like that and things like weather. last year an awful winter. this year another awful winter. you can bet the 2015 ratings are not going to look so good. problems are not unique to the airline business. dealing with one's insurance carrier. airlines are right up there. have they gotten worse? >> the volume has inveesed. you can make an argument relative to the number of people flying we have not seen a huge spike. people are frustrated because of what they expect when they are flying. the expectrations are often unrealistic. what they should be is can i get
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from point a to point w with a courteous staff and on time? generally speaking if they are you have come out ahead. if you expect a madge tal experience like 20 or 30 years ago, you are crazy. that's not going to happen. >> i think you are right about that. people remember the way they think it was. whether it was or not is another matter. what phil said is it's not going to get better. >> partly as flights are fuller that matters a lot. the seat next to you was probably empty and maybe the one next to that. somebody in economy could stretch across three seats. had a different impression. some of the airline, i mentioned
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delta and united which was a mess. you can't control the fact that with fuller flights, people are not going to be as comfortable, but airlines have realized with the adults especially that messy operations are expensive. it's not that they are trying to make the operations smoother but it helps you not lose bags. that saves money. several years ago, they were trying to get through the day. they didn't have the money. some of them do and hopefully it will pay off for them. >> appreciate it mandy? >> let's bring up the boards because the s&p and the dow are at the lows of the day. we are coming off a positive week for all three indeces. this week is important for the financials in particular. jpmorgan is kicking off earnings. can you bank on the banks this earnings season? dominic is here with what
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investors need to know. >> after the break, we will teach you about what's going on with the banks and set you up with the week of earnings. some people say this is the second most important sector because it's the second biggest in the s&p 500. that after the break. what if a small company became big buiness overnight? like, really big. then expanded. or their new product tanked. or not. what if they embrace
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>> sears and simon properties are on 10 properties and raising $140 million for the retailer. this is from the value of the real estate. citigroup reporting the asia specific steven bird to run the consumer bank. the 17-year veteran is replacing manuel medina. the big bank part of it. bank of america will be there and goldman heard of them. the latest results can investors bank on the banks. >> i don't know if they can or not. here's what we will tell you. the growth of the sector is supposed to provide and should help to power the s&p. at least we hope. that's what they are hoping. let's look at the financials. we are talking about the big banks right ahead of when they start reporting earnings.
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this is the second biggest and a 16% waiting and 86 total companies within the 500. it has been lagging so far in 2015. the year to date down about a year 1/2. again, a little bit of a divergence. if you take a look at the big numbers you want to watch, earnings expectations the s&p 500 could be one of the first declines we have seen in year over year earnings since the financial crisis. meanwhile the financials are expected to be the top performings earnings grower. maybe banks will take a leadership role. the s&p 500 expected to decline by 3%. financials again a bit of a boost. not a lot, but 1.5% gain in terms of sales and revenues for the banks and what not. if you look beyond just the revenue and sales numbers, you want to look at the big wide array of the banks.
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it starts tomorrow with jpmorgan chase. that's tuesday. on wednesday, bank of america headlines another group of these financial institutions and on thursday, american express, black rock goldman sacks and citi, they note morgan stanley because again, they report on monday. >> of next week? >> these are this week. tuesday, wednesday, and thursday. morgan stanley. >> we will know a lot more about the overall earnings season by the end of this week because of these guys. >> these are the big ones. the biggest ones out here reporting this week. >> thank you very much. over to you. >> thank you. it's one of the biggest gatherings of investors on the street. when are they seeing opportunities and which stocks are they targeting? he has been speaking with them. he joins us next. heads up. the manhole cover sent flying high into the air. you have to see this video next.
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feeling the heat. >> check out this remarkable video. a sudden explosion caused by an underground electric. lift off. sending a manhole cover 100 feet in the air over a street in buffalo, new york. how much does a manhole cover weigh? 110 pounds or so. if you learned nothing else remember that. it was caught on tape because at that time this gentlemen was being interviewed by a reporter when the explosion occurred. they cleared and closed off the area. no one, thank goodness was injured. >> the shareholder activism as they have the active passive investors. a name that is already making new this is morning. david? now as you might imagine it has grown like activism. there have been a number of
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ideas. one written by rosenstein and his investors indicating a $2 billion position and the fact that he is asking the company to undertake a few different things he would like them to see, do or consider doing. namely a potential split of qualcomm into the intellectual property and ship business. here's what he had to say. >> we had constructively discussions with the company. we have met with them multiple times. we are convinced that the board and the management recognize their issues. we are convinced that they are trying to do the right things and we are optimistic that they are going to. we have advocated a number of steps not just to split up. the fact that what we think they ought to do is transparent review of the businesses and determined whether or not it makes sense to do a partial or full split. >> it is interesting when one
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does the math. there is the potential to unlock value with the company given the multiple that the property portfolio would command and the potential multiple you would get on the chip business. a statement released not long ago and the board of directors and management review the corporate structure. prior reviews have concluded the business model and create more value for stockholders than could be created for alternative structures. they will evaluate them to enhance value and are committed to pursuing the right course of action. that from qualcomm moments ago. we had a chance to catch up with another activist investor. cio and cofounder in the midst of a nasty fight with did you pond pont. that's coming up one month from today. he seemed to focus on what he
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feels is a potent weapon criticizing the ceo's decision to exercise options that still had years to go. take a listen. >> i think what you are seeing is a ceo saying for my money, i have no confidence in my plan. we have $2 billion invested. we put our money where our mouth is. we can generate that kind of shareholder value. >> and again here we have a response from dupont. a lot of it dealt with the 10 d 5 plan they have in place. those can be changed to be fair and dupont said ellen's compensation is closely aligned with performance and share helder position. it comprises the majority of her personal net worth. this fight is continuing at this point as you might expect. we have a month to go and a lot
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more probably will be shared. the key moments in the fall of 2014 some stock options were automatically exercised on the routine and the preexisting plan managed to a by third party and steadily increasing ownership of du pont stock. key stocks will be with the proxy advisory. they can weigh lefly in one of the votes a month from today. didn't have a chance to speak about something else. we have seen a new activism. taking on activists. i should say bank of new york. they replaced the ceo. here's what he had to say when it comes to his faith in current management. >> let me say this. i have been on the board for
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four months now. i am very encouraged by the reception i had in the board room. i think it's clear they are open to new perspectives and really listening to my point of view. i am fully supportive of gerald hassell, the ceo. we will hold him couldable for the targets that he makes and will put forth last year. i am very confident we will get it back on track. >> tyler, a very busy morning here of course as activism is an influential and important part of the markets. back to you. >> thank you very much. remember delivering alpha on july 15th 2015. the biggest names in the investing world will thereby with the best ideas to register. go to delivering alpha.com. that will come up quick. let's take a stroll through the
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bond market and where it stands right now. there you see it is a day of rising prices and falling yields for the two, three, five ten and 30-year bond. the 10-year note at 1.933%. golf celebrating the new hero. the masters champion jordan spieth. a big win for under armor. he is all kitted out in the gear. spieth is the first endorser to win a major tournament. is he nike's new nightmare. nike dominated with tiger woods, rory mcilroy and they are staggering sums of money. speak of staggering sums, secret lives of the super rich. we will take you inside a $48 million manhattan apartment fit for a prince. you have to see it.
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>> hello.
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i'm sue herera and here's the update for this hour. vladimir putin in russia. for talks on the israeli peace negotiations. putin told the boss he wanted to discuss syria, yemen and iraq. a jet carrying 173 slipped off the taxi way in rainy weather. no one was hurt but the landing gear did appear in muddy grass. they are hoping to revolutionize the shopping experience with the launch of a new service called sprint direct to you. a sprint train expert will bring a new device to your location and set it up and transfer your content from an old phone to a new phone. kim and khloe kardashian in armenia. she was joined by kanye west and north. they wanted to baptize their daughter in an armenian city.
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that's the cnbc news update. back to you. >> thank you very much. the industrials and the s&p slipped into negative territory turning a modest gain into now modest losses. they hold on to a slight gain dipping and flirting above and dipping below 5,000. new york stock exchange. hi, bob. >> look at the s&p 500. we have been in a narrow trading range. about ten points and we have been drifting slowly and since about 11:00, a lot of problems in certain sectors here the transports are flat here. airlines and truckers are up. the railroads have no energy. concerns about slowing commodities here and the railroads are down 15%. that's way back in october and november of last year. not a lot of volatileity that we
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haven't had, on friday, we closed at a new low for the year. we have been moving up. a minor downside move in the aerospace names, but they have been doing very, very well. just some interday profit taking. the only thing i see is i have been talking about them a week and a half now. some of the other names, all of these storkscks are moving aggressively. they are among the general populous which are aggressively buying chinese stocks as people start talking about the idea of more stimulus. these are well-known chinese names. 15 or 16% in the last couple of weeks. they can own these stocks in an atf in the united states. the global social media and you
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see how it has gone up. almost 30% in the last month. that's largely chinese stocks influencing this particular insex. i want to note we are not getting a lot of action in the big indeces. that is enough and it looks like we have another shot at the closing high today. we will let you know as we get closer to that. >> let's go up to the nasdaq. hi bertha. >> we have the big caps today. back about 5,000. apple had been positive and now it's negative. with no actual confirmation from apple on the apple watch sales, they didn't get that much of a buzz from some of the things that analysts are saying. as bob mentioned, it's the small caps holding things up here and hitting an interday all time high. you are seeing a wide swath of the names moving higher today. from ruby tuesday, bank rate and
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also the usual suspects the biotechs from which are the leading sector once again. i know it sounds like a broken record. that's where a lot of them seem to be piling and as you see the dollar index to get back towards 100. we also had the big caps moving higher and on an upgrade that is higher today ahead of the earnings later this week. they are having a strong day. facebook will be reporting they are moving higher. sears on the joint venture. next week, a big week for earnings. they will hear from both microsoft and amazon and over at deutsch bank they are talking about the cloud business. they are below the street and could be somewhere between 500 and 700 billionmillion in revenues. amazon could be ten times that. a very interesting number to
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watch. >> for will. bertha coombs. let's look at what gold prices are up to. we are currently down for the fourth session in five sitting at 1199. as for the others let's look at silver and platinum. copper is moving to the downside. keep in mind we do get that weak data out of china which does have an influence on that metal. as for stocks as tyler mentioned, giving up big gains. what should investors be doing in the studio with me? christina hooper is strategist and global investors. the chief investment officer of oppenheimer funds. christina, earnings are kicking into higher gear and for the first time in six years, we are expecting a decline at the same time as it seems sitting around the highest in a decade. do you see that as an impediment or priced in? >> it's largely priced in.
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we have to understand that we have to look valuations differently in the context of such low rates. while we had a disappointing first quarter, it's a wash. in a lot of ways it has been written off and we need to look to the second quarter. >> what do you think that will look like? >> it's very likely to look better than the first. we don't know how strong of a rebound and probably semi strong and we will see a rebound. we expect the consumer to pick up. it will be a gradual improvement, but we expect a healing consumer. driven by oil prices and job market. >> you have u.s. stocks hitting around or at or near all time highs. would you get more bang for your buck? >> absolutely. global diversification is the theme we want to harp on. when we got into the year we always thought u.s. growth was going to be a lot higher. it didn't turn out that way. our outlook was overseas we can be very pleasantly surprised.
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we have been. europe growth as picked up and in emerging marks, equities are doing quite well. primarily not because of growth, but primarily because valuations were attractive. when you are looking at the equity market the growth may not be the best thing to do. >> it's hard not to like europe. we will be in the early innings of acbqe. they had an incredible move. is it too late to get in now? >> it's not. it's attractively valued in europe. we are seeing fun being driven towards qe markets. a lot of money is going to japan and even more to europe. that makes sense. given valuations and the fact that we are seeing positive economic surprise there. >> what about emerging markets? >> we like markets in the markets. it is still growing at a faster
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rate than all of the developed marks. at the same time valuations are quite attractive. you have seen the policy and the turn for emerging markets and they show that they can work on policy just as much as anyone else. >> last question to you, christina. the banks about what to expect from the earnings. do you like the banks when they come out with the earnings or will you be putting your money elsewhere? >> neutral on financials in general, but money is better spent in tech than discretionary. >> you like technology as well. biotech and discretionary. on the same page. thank you for joining us and go to power lunch.cnbc.com on why they think the strong dollar may not be that beneficial to the united states. >> letting go can be hard to do for small business owners.
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kate rogers has that story. >> why so many lack a succession plan next on power lunch. blap it's more than a network and the cloud. it's reliable uptime. and multi-layered security. it's how you stay connected to each other and to your customers. with centurylink you get advanced technology solutions, including an industry leading broadband network, and cloud and hosting services - all with dedicated responsive support. with centurylink as your trusted technology partner you're free to focus on growing your business. centurylink.
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and many have no idea what they are worth and how to sell them. according to the new poll conducted with the fda. nearly 30% don't have a written succession plan and depending on the proceeds from selling their businesses to fund much of the requirement. the toughest part is letting go. according to about 1/3. finding a buyer. keeping succession plans close to home. the fact that so few have a plan in place is troubling as nearly all of the planners said they discussed such plans with their clients. discussing how the business can be challenging, some are organized like jobs and investments. making profits more like salaries than operating incomes. they start thinking long before they are rate to retire. figure out what the company's business assets are worth and
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develop systems and processes that will help the transitions and of course tyler put it all in writing. never bad to plan ahead. you can find it all. >> and a lot of things there. thank you very much for that. >> they go to a quick break. kanye west is doing a concert in armenia and you may not have expected what happened next. however, we are going to show you in two minutes's time. e running a business legalzoom has your back. over the last 10 years we've helped one million business owners get started. visit legalzoom today for the legal help you need to start and run your business. legalzoom. legal help is here. ♪ ♪ ♪ (under loud music) this is the place. ♪ ♪ ♪ eir beard salve is made from ♪ ♪ ♪ sustainable tea tree oil and kale... you, my friend, recognize when a trend has reached critical mass.
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welcome back to power lunch. the five-session losing streak. starting coverage of the bookstore chain with the buy rating. they are severely under estimating the opportunity that the college bookstore business presents. those shares are by 6 and 1/3%. upon rapper kanye west taking a dip in a lake and he may not have expected what happened next. dozens of fans decided to join him. take a dip with kanye. cause a bit of a chaotic scene.
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the wrapper. >> here are the power points. number one, virgin america rank it is of the best airline of 2014. but compared to 2013 u.s. airlines performed worse than all four areas of service, including baggage handling and on time arrivals. second, the preorders on launch day. the intelligence used e receipt data, but 957,000 people made orders on that first day. lastly a cnbc poll with small business owners do not have a written succession plan with the proceeds of selling a business is needed to fund a majority if
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not all of the owners's retirement. if you missed any of the big stories, don't sweat it. visit power lunch.cnbc.com. >> jordan spieth winning the master, second youngest person to win golf's arguaably most prestigious tournament. practicing our golf swings as you will see in a moment. nothing like mr. spieth. look at that. the ceo of puma golf as he prepared if are a week at the masters and as the company celebrated two major milestones. that is next. i have a wandering eye. i mean, come on. national gives me the control to choose any car in the aisle i want. i could choose you... or i could choose her if i like her more. and i do. oh, the silent treatment. real mature.
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so you wanna get out of here? go national. go like a pro.
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. good grief, it's spieth. 21-year-old jordan spieth becoming the second youngest player since tiger woods to win golf's most prestigious tournament. under under par tying a record score of tiger's. spieth with a four-stroke win over phil mickelson and justin rose. that did tie tiger woods for the lowest winning total in masters's history. >> speaking with the ceo of cobra puba golf as he prepared
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for a weekend at the masters and celebrated two major milestones. >> we are celebrating ten years of game enjoyment. they had years since puma acquired cobra. it feels like it has gone by really quickly. >> what does it take to make a business that lasts that many years. >> it takes a couple of things. our brand of golf is different. we are in it to be the best in golf. the other thing is innovations. we are trying to bring out the products that are game changing. helping golfers enjoy the game. this particular product is our hero product. it has the center of gravity that we can flip. give you more penetrated flights and put it in the back position. more forgiveness and higher launch and longer carry. >> take us through the big carries that you guys have
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gotten. what do they do to influence the buying decision and the brand perception. >> we pick the ones that can move the needle and drive sales for the company. as i mentioned, ricky fowler and lexy townsend and they are on the cobra staff. the list goes on and on of great people who can cut through and make a difference for the business. >> ricky fowler rallied there the last couple of rounds and ended up on the second page. let's get back to the masters and the wins by mr. spieth. also a victory by the way for under armor. i'm along here with cnbc.com live from las vegas. eric this was a weekend billboard for under armor golf. they are big in all sports apparel and this was a breakthrough for the golfing division. >> if you look at the masters
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field, they only sponsor five of the players. think about a venture can capital firm. you hope you get the right one. if you look at the deal it's a ten-year deal and they have a much sporter deal. they ripped it up because they did so well. they want to lock him in. if you look at his apparel on the field, it's only under armor. there is no other brand. >> what does it mean for nike? >> nike has to catch up. they have rory mcilroy and the previous generation as they thought he would be more volatile. # if you look at the money he will make it could be about $35 million a year if he will be in
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ilroy type of money. >> you have under armor and they have done magnificent things and some would argue secular decline and not as many people playing it, but you have dominant players there. under armor does not compete in golf equipment. they don't make drivers and putters yet. i don't know if they have plans for that in the future. it takes a significant investment. it's only about 5% of the total sales. even nike golf as big as it is is not that large of a part. under armor got a lot of press and remember these guys ink players they think will be hot and only one person can have a jordan spieth or mcilroy or fowler. it's hard to put all your eggs in one basket. we will see if he has and he is a talented golfer. we will see if he has the staying power of going beyond
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the next year or two or three. woods had a tremendous run. >> you have an interesting thing here. not to be too provincial about it. boy, the europeans have whipped the rest of the world. this gives american golfers a lift. >> this is about that. they made more money than on the field. it doesn't matter as much as it does. are you an all american kid from texas and has widespread appeal. he is young and looks and plays the part. it's what you are saying. this is much more about marketing dollars than about what you can do on sunday. >> who doesn't like a winner.
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>> hi kate. >> some disruption in mid-town manhattan and the summit where he was interviewing top presenters there. jeff smith and bill from pershing square, these protesters who ended up in the conference room on the video, protesting the fact that folks like them they argue have made money historically by investing in fast foot companies, the likes of burger king and darden and quick service restaurants that the protesters exploit low income workers and they demand they pay $15 or a higher minimum wage to restaurant workers and they are trying to create prevention by disrupting the conference. >> the panelists looked very uncomfortable. >> always an awkward moment. >> let me tell you. that's it. good to have you back.
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have a nice week off? >>. >> i did. days on a boat and i am still swaying. good to be back. >> i'm swaying, but not because i was on a boat. >> we will hand it over to you. take it away. >> we are approaching 2:00 on wall street and 11:00 in walla walla, washington. oil is up and sarah eisen is in for melissa. i guarantee it's the best darn show on the network today. we will get more on the macro markets, but two big stock stories, stocks you likely very well. ge is down trading the most volume on the s&p 500. this after friday's rouge restructuring surge. what is an investor to do. you should sell it. a long time ge shareholder is cio of people's united wealth
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management and they own one million shares of ge and an analyst at stan point research. he will join us with a rare sell rating on ge. let's start off with you. barron said sell and you disagree, i'm sure. why? >> we have overweighted the stock in our equity income portfolio. we liked the stock for a while and we were anticipating a restructuring. friday's announcement was a positive surprise for us. but the fundamentals we like and the reason we owned the stock is still intact and we like it going forward. there will be turmoil as we go through the restructuring. long-term we like the stock. >> here's my issue. >> they know what the fundamentals are. a lot of questions. can they sell the real estate portfolio and do you feel like you know what ge will look like? >> that's a great question.
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the conversation that we had this morning. we spoke with the lead of our equity team. we are going to hold off coming up with the earnings estimates going forward until we get the first quarter results. we want to see what the restructuring is all about and take a look at the energy business. that's a big business for them. we want to see what their forecast is going forward. we held off coming up with the earnings estimate. >> are you going to add to the holdings? >> the stock, we were overweighted in the stock, about 3.6% of the portfolio before the announcement. it moved up and we may take profits here but we will only bring it back to about 3.5%. we will remain overweighted. >> you might take profits that had thespectacular move on friday. where would you go and what would you buy? >> we liked the space. we like diffident growers and concerned about the high
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diffident payers. when we focus on our clients, we focus on the diffident growers and we like the technology sector and health care. there lots of great areas to be in but focus on diffident growers and not so much the high payers right now. >> you have technology. what do you dislike? what looks ugly to you? >>. >> the area that we are very under weight are utilities. >> but i thought you loved dividends? those are the kings. >> they are high payers but not high dividend growers. we want to have the ability to keep growing and they have good earnings growth. we don't see that with the sector. they are very high and we are under weight utilities and actually at about a 50% weighting. we have taken profits in the reed sector. >> maybe take profits on the ge. thank you very much. i want to let our viewers know we hoped to get ronnie with a
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sell rating on the sock. apparently the rule broke down. when it gets in we will set that up and have them on. >> good way to put it. we will move from ge the dow member apple moving higher and starting to get the presale estimates for the new apple wash. let's go to josh lipton with the numbers. josh? >> sarah, apple is not saying how many watches the company sold so analysts are left to guess. estimates are all over the map. one estimate that is attracting a lot of attention is from a company called slice intelligence that tracks spending through e receipt data. they said nearly one million people in the u.s. preordered the watch on friday. slice estimates that more than 60% ordered the less expensive sport model and most opted for the larger 42 millimeter case. others are not convinced it was really that strong.
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piper's gene munster said he thinks vo slice is way off. he said 350,000 preorders. here's the bottom line. regardless of what you think is right, they will not have a big financial impact in the near term. instead, apple stock continues to soar up more than 70% in the past 12 months because of blockbuster iphone sales and the hope of even bigger buy backs. still as apple works on the features and funks of the watch, analysts think the product could be a much bigger part of apple's business in the future. they said by 2017 they could represent a full 10% of the company sales. back to you. >> thank you very much. >> meantime last night's game of thrones premier did huge numbers for hbo and time-warner and not as huge as they could have been. that is because the season premier and three more episodes
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of the show have leaked out online. julia boorstin is in l.a. how does this happen? >> this piracy was not a result of a hack into the servers. journalists who received advanced copies are responsible for leaking the first four episodes of game of thrones. the digital water mark was blurred out on the pirated copies. 1.7 million people had illegally downloaded the show. as of now that number is 3.5 million. hbo saying sadly it seems it originated by a group approved by hbo to receive them. we are assessing how the breech occurred. time-warner ceo said game of throwns is the most pirated show in the world is better than an emmy. with hbo's new app, they love to
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convert pirates to paying customers. >> if this was leaked out to an individual who leaked it out to other individuals, what if anything can do you to prevent this in the future other than simply saying to critics, sorry, you are going to have to watch it like everybody else when it premiers. >> that seems to be the most obvious. it wasn't leaked out to a critic, it was sent to a critic with the idea that they would review it and write it ahead of time. i wouldn't be surprised if we saw them decide they are not going to have advanced reviews of shows like this. or figure out a high tech way of doing it. they will only allow people to watch something online in a limited period of time. the other big question for me is whether they might change the policy of rolling out shows the way they usually do a week at a time. maybe they would go the netflix route of launching the season at once. >> an interesting question. stick around. we want to bring in the senior tv editor at variety.
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what do you think about julia's idea that perhaps this was a good thing for hbo. they got the buzz. it generated a lot of momentum and still plenty of people tuned in to watch. is it good or negative? >> it hides the brand and makes them aware of the show. people who don't subscribe will learn what's going on. call and get the subscription. they have gotten an over the top service. hbo now. >> how does that factor in? >> game of thrones is a secretive thing. maybe this is people who don't want the cable bundle but watch the show anyway. getting that service could be of help. >> if they are taking a hit from this episode, what about julia's suggestion that they might go the netflix route and binge watch it. that's the way is going anyway
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online. >> you lose your water cooler erer effect. you can watch it on your own time and there is no community. this has a lot of community around it. >> there is always that appealing water cooler moment for tv shows and executives. >> absolutely. look. when netflix launches a shows they did with dare devils the water cooler moment is the first week is show the available. they are used to having ten weeks and they maintain and hold on to viewers over that time period. what's interesting here is that they are now doing both things. they have the hbo now app which is more of the netflix model and they are choosing not to switch the way they distribute shows yet. we will have to see if that changes as they gain more subscribers to hbo now. we will see if we get numbers on how many people have signed up for hbo now ahead of the new
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season of game of thrones. no numbers yet, but maybe the next earnings call. >> i hate to say it but they can stop giving it to journalists beforehand since this was not a hack. >> i would not expect critics to be getting a lot of advanced copies unless they are very well water marked from here on out. >> thank you so much for coming in to the nasdaq. brian steinberg of variety. and brian sullivan over to you. >> here is your power mini for the rest of the hour. the scary target for hackers. not your stuart or your credit card. it may be your car. a man who watched firsthand as his prius was hacked electronically. two stock picks and paying nice dividends and an update on that diamond heist in england. we have video coming up when power lunch returns. at the end of the day. they used to get really tired. until i started gellin'. i got dr. scholl's massaging gel insoles. when they're in my shoes
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>> nick built on witnessed two sids hack their way into his toyota. >> two kids walked up to my locked car and broke in. so much for my keyless future. the cofounder of cyber security company look out. nick, what exactly what happened and what were you thinking while you were watching it happen? >> let me back up for a second. i live in a neighborhood in los angeles in the hills. i was at a party at a neighbor's
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house and the conversation came up about how everyone on the block had their car broken into. in all the instances, there was no broken glass or jimmied looks. it looked like we all forgot to lock our cars, except we didn't. fast forward to last week i was writing my column for the new york times and my dog started to growl and i saw two kids on bicycles about 16 or 17 years old. one pulled a device out of her backpack and walked up to the car as if it was unlocked. i went out there to chase them away partially, but i wanted to know what the gadget was. >> did you find out? >> i didn't but i started to do reporting and i found out there a lot of different gadgets that have keyless entries. there stories all over the web and haves on cctv showing people sometimes breaking in and stealing things and other times getting into the car and
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pressing a button and driving away. >> this is where you are going to tell me and thousands will probably write in that this has been going on for years and it's not new. i understand that however as we go to the whole digital lock thing, i'm thinking that the front door of my home i don't need to throw a rock through a window. i will go in blade runner style and waltz in. >> we are moving into a world where every place and thing will be connected. if something is connected, it has the opportunity to be hacked. that's the reality of the world we live in today. we need to take proper security measures but that is a reality. >> is it connected or communal? >> i think what we are finding is a lot of manufacturers have not typically existed in an internet era.
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>> what could nick have done? >> this is a design flaw and this was at a radio frequency fob. >> speak english. radio frequency fob is not in my vocabulary. >> think about the clicker that you have that uses radio signals to unlock your car and the two types of attacks were perpetuate perpetuated have been a relay attack and rebroadcast them or two, a brute force attack where they are trying to guess, if you will, the rotating codes. it was the brute force attacks. >> i don't know you personally, but i love what you do. i know you are a smart guy. you got back and did more digging into what this is and what this might mean.
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with the candles. >> candlestick i can use to break into my car by smashing the windows. there numbers of different twices out there that people can get that they can get into a car. the guy was not friendly. i probably forgot to lock my car and i assures him that i did not. i check it three times a night after my car has been broken into so many times. i finally fountain answer in toronto, canada where the police department had put out a press release saying that there had been a rash of break-ins on suvs using a device that you can unlock the car and drive away with it. then i ended up at a nonprofit group that had put out a release two weeks ago and showed a video
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of this black oblong device that looks like a typical stun gun, if you will. that device they had been using to walk up to cars and press a button and unlocks it and voila. the only solution that you have because i spoke to toyota and they didn't know what to do the only solution is to try to park your car in a garage and hope for the best. >> it's interesting that there so many angles including insurance. say you got an ipad and it gets stolen. they say my $800 ipad got stolen. how do they know you are not bsing? >> everyone said people can pick up a rock and throw it through the window. but people will call the police. they pressed the put on and opened the door. no one is going to question that and the kids will get away with
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this until the car companies do something to fix it. >> great discussion guys. nick, good luck in the future. don't move to l.a. i'm kidding. >> by the way, we reached out to toyota and they told thaus safety and security is a top priority. as the vehicles become more connected work ve taken steps to make them more secure and reduce risk of a cyber attack. clearly, brian, it is a growing risk and companies will have to figure out ways to deal with it. >> go back to keys or light a candle and go hunting for whales. we are serving up an alphabet soup of opportunity. we are talking mlps and reipts. rockets flying but not for the reason you might think. all this and more when power lunch returns.
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. >> it has been a rough start to the year. for now they have been holding strong through 2015. let's get to more on what we are calling rock in reits. >> they had to start off for the first few weeks in january and since tapered off as fears have emerged. these real estate investment trusts with the diffident yields are less attractive. when people anticipate these things, we will watch their
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behavior. one year and 12 months the ticker outperformed all be it just slightly both the financial selector and the s&p overall. that's something to watch. we looked at the index and we said hey, let's look at only the stocks or the ones that are in there and at least $10 billion or more. simon property group scored $60 billion. public storage interestingly enough, $33 billion company. $28 billion. we took a look at the stocks and sorted them by their dividend yields. how they performed. they have a 5.3% yield and up about 6% over the past year. not great, but still holding up over the past year. then realty income. it has a 4.5% yield, up 20% over the course of the past year. it started to tail off a little
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bit. another to watch as well. health care has been hot and also in real estate. health care at 4.3% and up 23% in the past year. they will watch these charts and the trusts have not performed all that great over the past couple of monthsful the question is were they big over here? next year they will get their own sector and the reits will be one of them. >> it finally happened for them. good luck. unless they don't sign. thank you very much. let's find investing ideas in all of this. as crude oil has dropped by half, many stocks have fallen with it. one group that held up are the mlps, the honey badgers of energy. they don't give a you know what. they make money no matter what the price is.
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the research and energy and income fund, this is ranked as the mlp fund andy woo are happy to have you on. i think it overstates the case. they make the money by handling commodities. they have the extremes and generally speak, they do well with the energy. this is with how refiners and how oil does. >> for it has to do with demand. # they have the impact situation
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in north america. the production will be going to u.s. uses for the most part. overall broad energy demand. >> the attractive feature is the income in this low interest rate world with the anticipation of higher interest rates from the federal reserve coming. does that make them less appealing to you? >> generally speaking they suffer if we have higher rates and upward trending rates. gi back to the point about diffident growth. they are a big sexy part of the sector for general investors and growth will drive the return. we are positioned very much towards growth and the visibility of that growth is key. it's not about what happened the last 12 months but what will happen over the next year or three years. the visibility there and the market sees that visibility. they think they will do very
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well. >> we will let you go there and don't have the privilege of seeing your picks on the beautiful graphic, they are energy tech and te and the williams company ticker. quinn kyley, thank you very much. speaking of oil, we are minutes away from the close of the day. jackie is at the nymex. jackie, we go to the close. >> good afternoon. we are watching prices here and it's interesting because we are trading just over $52. at the same time we are seeing gas prices are a little bit lower. i am going to explain how why that is. conflicting data is going around. we will be back with that. stay with power lunch.
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i mean bayer back & body. it works great for pain. bayer back & body provides effective relief for your tough pain. better? yeah...thanks for the tip! . hello, everyone. eye sue herera. here's your update at this hour. jodi arias has been sentenced to in prison without parole ending a nearly 7-year-old case that attracted worldwide attention. they deadlockeded and the only decision left is whether or not
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she would be eligible for parole. john kerry raising objections with moscow after making a call to the russian morn minster after the announcement. the state department said the decision would have no effect on the talks with iran. the coast guard said they rescued 3800 migrants from the sea yesterday. they said 144 migrants were rescued from a boat north of libya. a bank in japan is showcasing a robot teller equipped with multiple sensors and had prerecorded responses. before dealing with customers, robot as you can see did a little tai chi. it speaks in japanese chinese, and english. that's the news update this hour. back to you, brian. might neat to do tai chi before you deal with people. >> do you want a dragon pose and that might be perfect.
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>> oil bouncing back from a dip into the red. >> interesting that we are pairing some of the games here and loorks like we close under $52 a barrel. around $58 a barrel. traders saying this is a tough one because the market is lacking direction. this is momentum to the up or downside depending on what day it is. we did see new net longs come into the market that could potentially take us higher from here. they are hanging around like we have been seeing for sometime. i want to mention gas prices and the survey saying down five cents and the average is $2.45. that's because the retailers and refineries are chasing demand because summer driving season has not started yet.
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they want to get drivers on the road and expect them to go up from here. back to you. >> ever thank you very much. time now for street talk. five stocks and five analyst calls. sarah eisen, are you ready? >> i'm rate. >> unitedhealth jeffries boost their target about 18% upside. it is a kind of a call because the same analyst cut the rating back in july. admitting things had turned around more quickly than first thought. the reversal from last year. >> we have netflix. a big mover who got a note to buy. increased confidence for international net additions for subscribers. the target on netflix to 565 down from 370. also they got an upgrade from citigroup. >> it's know one of the stocks
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with a price target who is so gap. if you gave an average price, it doesn't mean squat because the estimates are so far off. stock three. up again to a buy from neutral. it goes from 23 to 19. many could bottom. >> rally software a smaller stock. it did get a downgrade to neutral from overweighted. they had recent outperformance that catered to enterprise and mostly cloud solutions. >> they lived up to the corporate name. up 37% in a month. >> maybe too hot to handle. our stock five the always the under the radar name. clovis enicology. coldman sacks up again to a neutral. their target goes to 117 from
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68. way above the average price of 98. this on the back of a big run last week from getting accelerated status on ovarian cancer drug treatment. >> that is moving a lot of these biotechs. the catalyst when it comes to good tests and of course a big move. up 14%. >> clvs is the tigger. now time for trading nation. today we look at two big banks. jpmorgan chase and wells fargo. we have todd morgan who specializes in the technicals. equity chief investment officer at s&p capital iq. what are you looking for in the earnings reports tomorrow? >> we are looking at two stories here. jpmorgan we are looking for very high earnings about 9.5% for q1 as well as 6% revenue growth. they had good growth in asset management and investment banking and coming off easy
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comps and they have reduced regulatory and legal risks. we know they have been in the headlines constantly due to a sort of regulatory issues. they complain that's all he talks about and not market share. they are making good progress. on the other hand, wells fargo is not as rosy. 1% earnings and 3.5% revenues growth. they are really struggling and have been focused off of net interest welcome with the yield curve. we are not expecting that until later and they are looking for areas of growth. they made announcements that they are expanding into more areas like investment banking and expanding overaccess. accessseasoverseas. versus jpmorgan 10.5 times earnings. given where they are and how they achieved growth going forward since they are both
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pretty disposed. i prefer jpmorgan over wells fargo. >> which of these do you prefer? which looks better on the stock charts? >> the higher multiple is going towards a more rowy looking chart. if you look at how well they performed post the past two earnings you will see a 5 to $7 drop in the earnings and now we are reporting again. we noticed we are at the blue up trent support. a couple things could happen. another drop in earnings which would push the stock lower and expect them to scoop them back up like in the past. or if earnings move or beat from the support and you see it lift all financials and from a relative strength point of view they look more poised to the
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upside. >> technical you say wfc look burden. appreciate that. we do two online segments every day in trading nation. when you have a chance and you areally at a computer go to trading nation or you can access the internet from a telephone. >> you just heard about that. california still dealing with a mess of the port shut down. now the governor of florida is actually trying to swoop in and steal some of that business. there he is. is florida ready for that task? we will talk to the florida governor rick scott after the break on power lunch. 1-800-345-2550 [ male announcer ] your love for trading never stops
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the national basketball association and a multiyear deal making it the official snacks and beverage contract for the nba nba. that was the relationship previously held by coca-cola that dates back to the mid-1980s and the official drink now of the nba, can you guess? >> mountain due? >> very good. something tells me you knew that. >> it's one of the few pepsi products i know other than pepsi and diet pepsi. it's high energy. that's how little i prepared for the show. >> you are so get. >> sick cot has a specific goal. convince the shippers they would be better off unloading in florida rather than the west coast or other east coast ports. welcome to power lunch and thank you for coming on.
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>> it is a big opportunity with the florida ports. >> it's great. if you get it do you have the infrastructure and the roads and the rails? do you have the labor to support it? >> absolutely. we have 15 sea ports and we invested $850 million in the last four years with the expansion of the panama canal and the strikes in california. we are going to get a lot of jobs. we added 150,000 trade jobs in the last four years. we are ready to do this. i am out here meeting with companies that got 0ed because of the strike out here and the citrus industry got hurt and a lot of shippers got hurt and companies got hurt. we have a significant opportunity to get the jobs and the business to floater. i'm after jobs by the way. >> i'm sure you heard of savannah, georgia, they for 20 years have been trying to deepen
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the port of savannah. it's r it's a nightmare in terms of regulation. 20 years is a long time governor. . >> the miami port will be dredged to 50 feet before the panama canal. if you look at the position, we are well positioned for shipping from south america and now with the panama canal from asia and the west coast strikes, we should be the winning state and what's going to be great is we will get all the jobs for florida families. that's what i'm after. good jobs for fort families. >> many of our viewers are all smart people may not be familiar with what's going on down there. they used to have to go to the bottom if you were too big to go through the panama canal.
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bigger ships can now come through. what has been the reaction from california. they said we are glad this is happening because we finally have leverage. >> here's the other thing that florida as going for it. we are a work state. you don't have to be a member if you don't want to. they see the opportunity with more costs. they will be dredged to 50 feet this year and they will be ready. we are expanding other ports. large and smaller ports. we will get a lot out here and others and see with the high taxes. california is the worst state for regulation. highest in income tax and highest in sales tax. they tax every business and have
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franchises. every tax they can think of. their elected officials don't understand they are competing in a global economy. >> clearly you are laying it out. what reception are you getting from businesses and have you scored any wins bringing california-based businesses to the east coast? >> we have been winning for the last four years. if you look at what's happening, people are moving because of the taxes and regulations. we will be having more announcements, but we are the second most number of aerospace establishments in the can country. way more tourism than california. california is a beautiful place like florida is but we are getting companies. northrop grum ond has moved to floater and lockheed martin. southern california, a lot of new york. we have hertz to move their corporate office out of new jersey tow florida. we are win on a daily basis something. >> governor rick scott of
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florida. out in sell. i will give you a piece of advice. don't be hanging out at the docks today. >> it's a beautiful day, but it's a beautiful day in florida. we let you compete globally and win. >> one gets sisunrise and the other gets a sunset. >> the latest numbers on ceo pay. what industries to force your kids into the most chance of taking care of you in your golden years. this is not a ceo's apartment, ago it could be. who lives at this amazing $48 million pad. if you're looking for a car that
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just want to point out the intraday of the nasdaq. we are actually seeing the nasdaq hang on to recent gains. just after the open it lost most
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of those gaines. it has managed to stay positive one reason netflix surging to the top of the nasdaq. the second bullish call from the street in a week. >> if you notice that chart, sara, we went negative just before this show began. traders were paralyzed in anticipation of what we were going to deliver to them they stopped trading for a few minutes and a sell order must have gotten through. >> just the presence of being here at the nasdaq is enough to turn green. new numbers on ceo pay are out. mary thompson has that story. >> it looks like the big money is in tech and media. if you're a ceo, the executive compensation research firm ek equilar, keep in mind this is a preliminary list. highest paid ceo so far, microsoft's new ceo, nadella, 84
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million. larry ellison, oracle, down to 67%. qualcomm ceo steve mollenkopf, $60 million and bob iger disney $4 million and cvs ceo larry merlo is $24 million. given most of ceo pay is tied to stock performance these days. according to the early survey the median pay rose 5% the average unchanged at 15.7 million. berkshire hathaway's warren buffett was the lowest paid ceo, taking home $464,000. missing from the list discovery's david zaslav his pay of 156 million would have put him at the top. the firm's just over 6 billion in annual revenue, too low to
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put it among the top hundred firms. when the final list comes out in may that equilar is publishing i'm sure he will be near the top. >> it will probably raise the entire average. >> yes. >> thanks very much mary thompson. we have the latest on that huge british jewel heist. new images of the thieves and the nick names, you've got to hear this, given to them by the british press. plus a new york city apartment fit for a prince literally. robert frank has that story for us. >> it's over 10,000 square feet in midtown manhattan, over three stories and the sushi bar becomes a jumbo tv for your jacuzzi. can't wait to see this exclusive tour coming right up.
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it took tennis legend serena williams,
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fencing champion tim morehouse and the rockettes years to master their craft. but only moments to master paying bills at chase.com. depositing checks at the atm and transferring funds on the mobile app. technology designed for you. so you can easily master the way you bank. new images released of the suspects in the jewelry heist in london. new pictures from the security cameras. at least three men, faces covered, going in a side door. police released the images of the men and their van in the hopes that someone has information to find them. british press has nicknamed them mr. redhead, mr. tall and mr. strong. a fourth member of the game was wearing leather shoes. he's called the gentlemen. people say they used heavy cutting equipment to remove the safe deposit boxes and walked
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away brian with as much as $300 million in gems and jewels. quite clever there on the nicknames. >> why do i have to be mr. pink? robert frank, before we get to your awesome apartment. >> yes. >> 300 million, that's what they put on this. you think it's going to be hard to put a real accurate number on this heist. how come? >> it started at 300, then it went to tens of millions now we're at 100 to 150. the prices for diamonds have exploded as the wealthy look for places to put their money. a lot of this stuff probably hasn't been sole. these are jewels owned by the aristocracy of london for ages. >> how do you move it? >> there's always -- >> no one is going to know where it came from. >> there's always a guy in russia for that. a lot of this stuff hasn't been on the market for a long time. they're still figuring out what's stolen and they have to figure out what the value is. 2013 in cannes that was about 136 million, 140 million, if
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this is 150, this would be the ultimate pink panther of all time. >> wow amazing. let's move on to something else amazing, that 48 million -- did you say something about a sushi bar converts to a bathtub or something? >> yes check it out. >> are you kidding? >> we're never kidding on secret lives. over 10,000 square feet in midtown manhattan, ten bathrooms, three floors and a sushi bar that turns into a jumbo tv for your jacuzzi. >> after a very stressful day, you come down here, eat sushi and turn your sushi bar into a tv, get in here you have a jacuzzi, go and smoke a cigar. this is the cigar room. this room closes off and basically creates a vacuum suck like a space ship and has built-in ventilators so the cigar smoke never leaves this room. you're talking millions of dollars in wiring audio,
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visual window treatments. you can be anywhere in the world and say, open the doors to my gym. they're automatic. >> look how cool that is. >> other cool things about this house, it's got not one but three panic rooms and four jellyfish tanks. >> what's a jellyfish tank? >> a special tank for jellyfish. >> i've actually seen that. i've seen that at a restaurant. it's quite cool. it's mesmerizing to look at jellyfish in a tank expand. it's cool. >> they have to be curved. they're very special tanks. the tech knowledge is amazing. you could be in saudi arabia where this prince lives and open the doors to your gym with your smartphone because you need to do that. >> or if you're the thieves, they can hack their way in and get into the jacuzzi. >> how many apartments in new york have panic rooms? is that a new thing. >> a new thing. we saw more of it this season than ever before. the wealthy, particularly from overseas are more security
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conscious than ever. again, there are three in this apartment. >> i only want a solid gold toilet that doubles as a punch bowl for parties. >> you're a simple guy. >> ew that sounds gross. >> 10:00 eastern time, "lives of the super rich." "closing bell" starts right now. i grossed myself out. and we do welcome you to "closing bell" for monday i'm bill griffith at the stock exchange. >> and i'm michelle caruso-cabrera in for kelly today. we have just been slip sliding away here through all the major averages late in the session. if it were to close above 5,000, the only the third time since 2000. >> it's not looking good right now. we're four points below that. it got up to 5,042. >> back

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