tv Power Lunch CNBC June 5, 2015 1:00pm-3:01pm EDT
♪ >> i don't want to interrupt that. that can be the new theme song. >> i like that a lot. very cool. >> we are in the mood for it now. >> okay 280,000. that is the big number of the day. it's also the number of jobs created in the month of may. >> the merry, merry month of may. the big question is what does it mean for the fed and what will the fed mean for the markets. the senior economics reporter steve liesman who was out there with the band and right now, here he comes. ladies and gentlemen let's hear
it for him. i see three economic reports and here they are. the u.s. job market is prospering despite the drag from low oil prices and a strong dollar. the consumer looks to bounce back and you will see that. the strong job market looks to attract workers from the sidelines. here's the data. mandy gave you that number with appropriate gusto in her voice. the unemployment rate ticking up to 5.5%. we brought the people back into the workforce. wages ticking up strongly. labor force participation rate and don't get too excited about it. it's going in the right direction. 34,000 extra jobs. here's what i'm talking about. i look at the gains in the retail sector i see gapes in areas where there is
discretionary spending and two areas where the consumer has been mia. we have been waiting for them to come back into the workplace. >> hotels and bars and restaurants and amusement parks. maybe disney is gearing up for a good summer here. all of this happening with a drag of 17,000 in the sector. a couple of the quotes out there. the market calling it an impressive rate of use hiring. we will talk about it as a gauge ask it looks like it makes steapt more likely. >> concerns that the economy is maybe bouncing back. >> let's talk about yields. how about that? the 10-year note soring on the back of the latest jobs report trading at the highest since october. up 13% in a week.
rates closely tied and 2.388, pinching in on 2.4. the pulse of the market and i'm feeling very good about having refinanced in march. >> and you should tyler. 4.25% is the new normal on the popular 30-year fixed. that is a 2015 high. we talked to a lot of folks out there, lenders. a lot of them say while some are lower than 4.25 four is the number. take a look at where we have been over the past two months. that was after the paper tantrum. the fed hinted it would stop buying mortgage-backed computers and they shot up. for the home buyer, the difference on a monthly payment on a $200,000 loan from the lows
of this year from 2.6% is about $72. that may not sound like a lot, but it could cause a problem for qualifying for the loan. a lot of borrowers are getting into the debt to income quite line. a small increase could be enough to kill the deal. that analysis from northage news daily. sellers, it means buyers can afford less. we have a tight supply in the market that has sellers in the driver's seat, but sellers have to consider asking prices once again. >> i will pick it up from there. diana with more on what the jobs data it is and means for the markets. we have cnbc contributors and on the heels of the jabs reports.
bane, there is not a lot of movement and whatever we are seeing on equities probably not anyone making big bets. down to the 100 day moving average which is the interim support level, the third time in three months we have done that. the market is finding support there. the market is getting used to maybe this report is in fact signalling that rates should go higher because the economy is getting stronger and net-net is a good thing for stocks and investors. >> it's a double-edged sword because if you have more people with jobs that got more money, higher interest rates could serve as a head wind and the
stronger dollar as a head wind for the markets. what's it going to be. can they with stand higher rates? >> it can and the real question is how much higher and how long does it take to get there? and so far it looks like they want to be very squadual. every time they tell us what they are going to do, have haven't been surprises. maybe that is the case. i think as long as there are not any shocks i'm not sure why we couldn't have an environment where they continue to benefit by investing and we see higher rates that help a lot of people who have been starving for lower risk forms of yield. i don't think it should be a negative thing, but people with money or making active sdagzs we
have to leave it there. great to hear from you. enjoy your weekend. over to you. >> thank you very much. dominic choo. >> if it's tuesday, it must be belgium and baker hughes. right now what we have are oil rig counts down by four to 642 oil rigs in the united states and the total headline number down seven overall. i mentioned oil rates and gas rates down and miscellaneous rigs unchanged at 4. u.s. rig count for oil down by four to 642. that is down 894 total. >> that's a major decline. oil holding steady in price. opec and the price rallying 7%
this year. iran, iraq and libya want to produce more. iran is the out liar because if they get the deal in the next six weeks and they want a lot more oil. how much? let's listen in. >> immediately it means during one or two months we can increase half a million and during six or seven months we can increase it to one million. our exports.
>> getting an extra million barrels on the table if they get the deal and they haven't gotten the investment and the technology, but they have up to 30 million barrels floating and ready to go to world markets. one more point, i speak to the king maker here. the saudi minster and they said is it just about you guys they said it is way too simplistic. one more fact for you when they said they would keep production and sent all markets down they were producing about 30 million barrels a day. they are producing 31 million barrels a day. demand picked up in asia and europe as well. the low pricing policy is working for the members and could be working for the world oil markets. back to you. >> as the market pulls back from all time highs, investors started to step in to a group of funds that they think are going to move higher. dominic choo with names that could be ready to pop.
>> three. our analysts looked at etf flows and volume for trading. they melded it in terms of prices and came up with the three that could show price movement if the analysts are correct. first of all, the i shares telecom index, it has been a flat trade for the last year. nothing. it's flat. up seven basis points overall. if you take a look underneath. the trading volume has spiked in the past five days. a lot more people are trafficking in this etf. about 23% projected return if analysts priced targets for the underlying companies come to fruition. that's something else they looked at. one of the companies that stood out is one of the holdings of this and could be an analyst favorite if they could among
that one. telecom with that one. transportation stocks. we talked about them on power lunch all the time. iyt that tracks that dow jones up about 5% over the past year. it is showing signs of weakness in the past few weeks or so. if you take a look at why the traffic improved 46% increase in trading volume over the past five days. this could go up by 17% if all of the components meet their targets. delta is one of the key stocks as well. it's a couple of things to take a look at. two etfs and others are on the website right now. >>dom choo. we appreciate that. it's a pro story. go to powerlunch.cnbc.com. >> a massive data breech millions of federal workers exposed and fingers are pointing at china. how could this happen and how vulnerable are we? the economy adding 280,000 jobs
given the recent pull back. the longer story stays intact. also perhaps the highly watched game, one of the nba finals. the warriors seth curry is a sponsored athlete and arguably the centerpiece to build a valuable apparel and footwear franchise. they did beat the cavaliers 108 to 100 in overtime. >> thank you very much. here are the headlines. cardinal health finding harvard drug group for $1.1 billion in cash. up 23% since last year. not really moving. the attorney's office said they believe costco has violated civil regulations when handling controlled substances and southwest airlines extending the 72-hour fare sale after troubles left many customers unable to book flights. southwest is slightly to the downside today. >> the fbi is investigating a
data breech. millions of federal workers current and former may be exposed. we have the story from pausch pausch. right now press secretary josh ernest is briefing from the podium. he said the white house is not willing to say it was chaina. they reached out to the foreign ministry can here and here's what the spokes said. stiber attack is hard to trace
back. i just got off the phone with the former head of cyber for the fbi in new york. the deeper you dig, the more muck you find. if there was a vulnerability known to one group of hackers and one nation stayed or service, it may have been known and exploited by others. there might be more than one country involved according to austin. he served decades as a special forces officer. he heads up defensive homeland security work as the heritage foundation. good to have you with us. how concerned should we be about this? the penetration forred at
management that has all the records of employees. that bothers people like me because i'm a former government employees, but it is possible they are in the other databases in the government or private sector. >> i want to jump in as well. we are not sure whether or not it is china, but if it is and we have heard about them compiling databases and how would america need to respond to that. >> in china in particular it is murky. there is criminals working for the chinese government. there is the chinese government helping criminals. it's mixed up.
they can use the information to compromise them and use it to target them depending on where they are working. it's more than just a security or job sbripgzs thing. it's a gold mine. >> can i follow on the second part of my question. if it is china, what would an appropriate response from the government be? we are not going to go to war or bomb them over this but we need to respond in a strong way. the main thing we need to do is stop them and keep them from getting it again.
and americans tend to work for the silver bullet. we need to find people who allow these breeches to happen. now it happened to the government. i don't think they are going to find themselves. we need to have a private sector and the public sector really work together to find a solution. >> any way you look they are described as a tax on our commerce and our government and at what point do we say enough is enough? you are attacking us and we have to retaliate in a strong way. how would you retaliate? >> there is a lot of offensive cyber things you can do. you can use kinetic means, but right now this is massive cyber espionage and they are not doing damage and stealing information. it's a sticky place to do something offensive against
them. we are not ready to do that. >> that's a phrase i'm not familiar with. when the department of defense said you don't have to respond with another stiber means. we will see where it goes. >> manty? >> as we all know, a good job support, 280,000 positions created and we don't know where those jobs will be created. marison knows. >> on power lunch, we will tell you about the big job opportunities in big data coming up after the break.
so strong they expected a shortage of workers. mary thompson has more from linked in headquarters in mountain view california on big opportunities on the big data. >> hey there, tyler. you click on linked in's website a couple of times a week. every time we click on the site we generate a data file and all together the data files create big data. linked in will look for information that will help improve the customer experience the experience for advertisers and help the company improve its own business. in order to do this linked in needs data scientists. people who know data an lytics and can translate the stuff that decision makers can use. they are hiring more than 100 of these at 50% increase from 2014. it's not the only country looking for the talent.
they are not in demand so it's super hard to find the talent and the right people. >> the head of data recruiting. 190,000 of these workers by 2018. the bidding wars break out for a lot of recruits. even if 80 to 90% of those say linked in looks beyond that field to others. biomedical as well as political science. the reason he said these industries deal with a lot of big data so they are familiar with the data sets and translate to what they are doing here. what do you make? they said linkedin pays competitively, but if you are a
ph.d., you will earn six figures. we will introduce to you two data scientists who will tell us how language and art help them to land these coveted jobs in the tech field. back to you. >> looking forward to it. mary thompson to the bonds market where the yield is soaring. where are they sitting now? rick santelli what are we looking at? >> that told us everything we need to know. they traded briefly through the highs and the low 240s or the interday resistant and it is a weak one, but hasn't come off that much and when you consider opening the chart up what you will find is it will be a high yield close. we go back to november. let's look at where the action is. interday of 5 versus 30. if you look at the chart starting in mid-2006 you can see the flattening and the comps to it. when you open it up to a 20-year, you can see that the average of this yield curve
measurement from 30s to fives gets more accurate the longer the chart gets. the flattening today is critically important. what the market is asking or showing the fed what to do and the last chart, foreign exchange. look at the one-month chart. the dollar had a couple of great days. in the context of a month it had greater ones and many think the tide changed back to being the dollar bull if the fed is in the box on a normalization. >> thank you very much. rick just gave us a look at the ten-year numbers. we have the rising rates playbook and three smart trays. it has gone nowhere over the past two years. they announced recent wage hikes. it's the turn around working. look at gold and the metals. blap
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here's your cnbc throughs update. obama administration challenges expert on how to implement reforms over the handling of the switch recalls. this is a company by two reports that outline changes needed to improve the auto safety regulators ability to hold manufacturers accountable. wal-mart is holding down five outside proposals seeking reforms including one calling for an independent chairman. because the walton family owns 50% of the company, those proposals were seen as having little chance of passing. computer science is agreeing to pay $190 million and challenged eight former executives in connection, five of whom settled. the union representing actors
who portray mickey, goofy and others at walt disneyworld filing a complaint challenging a policy that preventing them from revealing what figures they portray. it alleges disney is committing an unfair labor practice. that's the cnbc news update. trouble in the magic kingdom. >> the happiest place on earth. >> mostly. >> thanks sue. stocks mixed following that stronger than expected report. let's check in with bob pisani as i just went to black here at the new york stock exchange. >> not big moves and the terrific nonfarm payroll report numbers. interest rate-sensitive sectors are moving on the plus and minus side. look at banks. we have multiyear highs on the big names such as jpmorgan. multiyear high and bank of america and goldman and the regional banks are having good days sitting near new highs
including as well as regionals. no surprise that interest rate-sensitive stocks are getting hit as interest rates move up. american electric and utilities are down 4%. there is a real problem. most of the reedsates were weaker and they started to turn green. the damage is rather limited. watch the high yield funds, the biggest rise is in the belly of the curve. that's where many of the high yield stocks and bonds are and the high yield etf is down about several days in a row. front page were talking about all of the hack of up to 4 million government employees. you heard the report that they have the cyber security names. this has been moving up for months. not that old. we are at a new high. we feel like the cyber security companies have been strong for a
long time. palo alto networks was $70 a year ago. 120% move up. at a 52-week high and they have been strong. $66. up about 150%. >> thank you very much. greek stock exchange falling next to 5%. they postponed a debt repayment and negotiation between greece and the international creditors over a reform bill with alternative proposals getting put on the table this week. greece had a $338 billion payment due today, but they told the fund it would bundle four payments into one lump sum of 1.5 billion euros and that is due on june 30th. >> they learned that last bit of
news. we saw the selling accelerate in the markets. talking of those marks, see how they are reacting to the jobs report and the news on greece. with us now is lpl financial. good to see you. it feels as though the job support and the economists and the market are gradually converging and coming on to the same page. correct me if i'm wrong, but september is the most likely lift off for a rate hike. is that your impression as well. what does it mean? >> it pushed a little closer. we are saying december or late 2015. there is not too much time 29 now and september and unlikely the fed will be reasonably confident that they will move back to 2% with two months more of data. i think from the fed's perspective, this helped to confirm with the first quarter weakness being transitoryiy was true. >> it was good for the fed. talking of the fed, let's bring
in pnc asset management group. a lot of vocalization of their intentions and it feels like therefore we have seen the interest rate-sensitive sectors up and down move as a result. just a moment ago, we were hearing utilities and taken it on the chin. financials are hitting you high. if you take the sectors, what would you do with them? they still benefit from higher rates. do they have room to run, for example? >> i think so. when you use financials as an example, we like them. we overweight them because what you talked about we think higher rates are the moving up will help the sector. there is another part which is really the reason why rates are moving up. it's hopefully and we think this is the case because the economy is getting stronger and that means more loans and that helps the financial industry as well. i think there is room to go
there. >> we have run out of time and i see you like consumer discreationary with the awakening of the u.s. consumer. hauch for thank you very much for your thoughts. you can get more on what they think it means for stocks. >> let's look at the s&p 500. the heat map following today's jobs. you can see that the s&p is down about a half point. there is an even split between stocks in the green and the red. some energy and financial names up at the top today. here's how the different sectors are faring on this friday with a rate hike on the horizon. tech is up a little bit and financials a little bit up about 2/3 of 1%. we'll be right back. you wouldn't haul a load without checking your clearance. so why would you invest without checking brokercheck? check your broker with brokercheck. [ male announcer ] legalzoom has helped start over 1 million businesses.
in the us, three in ten college students drop out. but how can you spot who's at risk? the one who lives far from campus? the one who works the night shift? the one with new responsibilities? one thing can't tell you, but the right combination can. universities are using ibm analytics to understand pressures in and out of the classroom- some expect to cut dropout rates by twenty-five percent. ibm analytics is working to make education smarter every day. >> with the rates hike on the
horizon, how do you play the horizon. you are with us from the cme. i need trades here. what do you think? >> on tuesday, i bought the anticipation. the market loves banks. not only when they are going higher. they will borrow short and the money is easy. # i thought the market's knee jerk reaction for the too big to fail banks. utilities you have to stay away from them. that was because they were not. >> what we have to focus on is the 10-year. it's just a sum of inflation. # we are seeing financials and tech and industrials and energy. probably going to revail the
next 12 months. >> i agree with the energy and i don't think it's for the rate reason than because it was pummelled over. >> the dollar was straight up. that in essence is a rate rise. what the fed does the market is indifferent to. the move is happening. >> i'm for that. >> you have to be adverse to the health care and the staples as well as utilities. >> i asked guests earlier on. how much of this is baked into the prices of a number of these stocks. you have a number of them like jpm at highs and the utilities had a bad year. how much is baked in? >> i think only about half of it is in its infant stages that have gone on for years in the other directions. utilities started a low rate policy. it has plenty of room to move.
that's okay. i hear them why? you allowed that interest margin and they talk about the banks and they have the ability to make money, you will see a kick to the bottom line. >> remember utilities are hitting in two directions. remember when rates go up it is highly leveraged companies. they get hit on two fronts. >> guys thank you very much for joining us. >> let's bring in another couple of buddies. president of the national urban league and special assistant to to talk about the jobs numbers. always great to see you on these. delighted. ron, we were speak yesterday and he said when he looks at the jobs department he will look at two things growth above 200,000, check, and wage grope at an annual pace of above 2%. that's a good report isn't it?
>> i think ty is decidedly mediocre. they found it above the 225,000 number that analysts predicted. when i delved back can i look deeper at the numbers? i'm troubled by a couple of things. number one, that remained the same and has been that way all year. we have nearly 20 million americans have looked up and the second thing was african-american unemployment. it went from 9.6% to 2% this past month. there areas that are encouraging, but it seems that the recovery is still a little bit soft. >> i take your point and it was up a little bit. not much. that's why the unemployment rate went up from 5.4 to 5.5 i believe is the number. how do you handicap this? ron is a tough grader. >> he's tough, but this is a
positive report. with very strong job creation and i might add over 260,000 private sector jobs. on the other hand many americans are being left behind. african-american unemployment and youth unemployment for black and white youth remains higher or higher than it was last month. it's important to understand that stable strong comprehensive growth still hasn't reached the american economy. what we have to focus on are the pockets, the parts of the community, the parts of the nation for which job creation is not yet reached them to the extent that it should. i might add that i share the concerns about wage growth. while it's beginning, it's not where it needs to be and where it has been historically in recoveries after recessions. >> we are seeing some companies,
big employers whether it's mcdonald'ses or whatever moving to boost wages. my son is 22 and having a hard time finding a job. what would be the best thing we can do to spur employment among those groups. >> i looked at the budget to pass and the governor said they needed to take another look at. with the taxes and connecticut, ge is thinking of leaving the state. we need to take a strong look at the rules and regulations that the companies go by in the united states as well as recognize that we have one of the highest corporate tax rates in the world. are we doing the best to make companies competitive. they are able to compete and
hire and able to get young graduates and young people. we need to take a look at that. >> let me agree with ron on one point. that is the need for a comprehensive effort to boost capital access for small businesses, particularly small business in urban communities, black communities and latino communities. we need a strong youth. . initiative that should include an investment in direct jobs and a significant investment in overhauling even beyond with the workforce investment act does when it comes to job training in this country. we have to find a way to make higher education more affordable for young people. >> we are out of time and we want to get a quick yes or no. would either of you support a for pay basically mandatory national service for youth. >> no. >> could if it was designed
correctly. i think it might have benefits. pilot models for that. maybe it is. time to try something new. >> appreciate it. always great to be with you. >> when rates start to move housing, stocks auto loans and your money. more from the bay book in the second hour of power. a shark that loves to hug and be scratched.
. >> huggy the shark near australia. the acquirequarium keeper notices the shark keeps coming up to him and gives him a hug. the shark likes it and is frequently playful with the keepers. until he's not. >> here are this hour's power point. he was quoted saying that september remains our base case for the first hike. next we learned that mortgage
rates reached their high for the year. 4.25 is the percentage. the new normal rate on a 30-year fixed mortgage. the greek markets posted a loss of nearly 5% after the government announced they were postponing their debt repayment for this month, the 300 million euros. if you missed any of the stories, go to powerlunch.cnbc.com. >> why raising the temperature in wal-mart stores could impact sales and why are they doing it in the first place. the answer will surprise you. we have it straight ahead. blap after all, healthier doesn't happen all by itself. it needs to be earned... every day... from the smallest detail to the boldest leap. healthier means using wellness to keep away illness... knowing a prescription is way more than the pills... and believing that a single life can be made better
by millions of others. ♪ ♪ healthier takes somebody who can power modern health care... by connecting every single part of it. realizing cold hard data can inspire warmth and compassion... and that when technology meets expertise... everything is possible. for as long as the world keeps on searching for healthier... we're here to make healthier happen. optum. healthier is here.
>> coming up in the next hour we will forget the pros and cons of pitch hiking and interest rate hiking are the best place are for your money. we will dispel concerns about why fed rate hikes are bad for stocks. what history really says and will a robot take your job? the future might be brighter than you think. >> thank you very much brian. wal-mart announcing that breath penner will be the grandson in
law of the founder, sam walton. reports came out this week that wal-mart is changing store temperatures by one degree. see if you notice it. after employees complained that some stores are too cold. the former executive and cnbc contributor and the king of all things is here. >> pleasure. >> do they do that in lots of stores? >> trying on winder growths. wal-mart is going out of their way to get the employees to be more happy. why are you doing that? the higher morale in the store the better your sales are. they are trying to pay more money and make it warmer since they are complaining about the
cold. that will make people happier in the store. they will get better customer service. it's also wal-mart and target that control the temperature of the stores. we wanted to mention that as well. you have for example, higher temperatures and higher wages for the workers at wal-mart and initiatives like bringing it back and we don't all have to listen to celine dion on constant loop. they translate to higher shares and higher sales as you were mentioning? >> they have to or it's a waste of money. do i think it will? yes, i do. they are going back to what sam said and empower the employees. they are doing other things and changing the span of control inside the store to make it narrower. they are doing a lot of things. they are improving the in stock
positions and it's easier to sell on the shelf than in the back room. they are cleaning up the store to make it more shopable for the oomphee and the person in their shopping. >> they will take it up to 74 or 75 degrees? that seems warm and not energy-efficient. >> i keep my house at 74. i can't comment on that. they are doing what they like. >> we fight over the thermostat all the time. it's chilly. >> they found out the hawthorne effect. if you do anything make it colder or hotter but do you care? they like it. they want to know you are listening. >> a number of things that are color and also for good pr happening, what would you suggest they do more? what i that are missing some. >> wal-mart needs to be broader in the community. they started that a few years ago when they were much more concerned to keep them out and
making sure that they keep that up and make employees more happy and make people shopping more happy. they need to make the communities more happy and receptive. that has been an issue with them over the years. they are working towards that. if you have reporter rapport with the people that are working for you, you get better rapport with what they are working in. >> i got married 11 years ago today, happy anniversary to my wife. the advice i got is split the difference on the thermostat. that will do it for the first hour of power lunch. >> thank you all very much. it is nearly 2:00 on wall street. napa valley california. the dow down about 40% on interest rate concerns and you are watching the second hour of power lunch. more on stocks in a moment.
280,000 jobs last month. that number reaffirming and the federal reserve in september will interest rate increase for the first time in nine years. we said the only person who knows if we will do it is fed chair janet yellin. steve? >> what better way to go inside the mind than the car of a person. we will look at the behind the wheel view at the rate hike dashboard. where were we going in? they are right here with the odds on that we are going tighten sometime this year. then what happened? we have weak first quarter data. then earlier this week on monday, we got soft core readings on inflation.
it came back even further and then the week went on. and a sense of more rebounds and good manufacturing and service report and construction claims. they start to go the other way and the big question you are asking, how does today's jobs data figure in? we had strong jobs. 280 on payroll. i think we are pretty much back to where we started with an odds on september rate hike here. the economy in the last couple of hours, he thought a rate hike was appropriate if the economy turns around. >> in the last hour they had certain concerned about the job. all these negatives you can find. when i went through the report it seemed positive. job gains in every seccor except for one which is unfortunately the government's term. if we can have oil and gas
declines, we would be close to or at 300,000. >> i would incorporate that and say the economy did well despite losing 1700 oil and gas jobs. despite the stronger dollar and when i looked inside the report and i saw the gains in leisure reportity and gains in retail it made me optimistic that the people who are selling are pt mystic and they need people to sell to them. >> i tweeted this out and the jobless rate among just high school grads is down 7/10 of 1% and a long-term jobless is down 800,000. >> there is work to be done. there is a strong report and moving in the right direction and what's nice is we are back to the higher level that we had earlier this year when everybody got spoofed. maybe now there is calm going into the weekend. >> it came down nearly 50% when
i talked about that four years ago. >> keep talking, brian. >> bonds going wild following the jobs report. the yield on the 10-year note hitting the highest level since october. dom choo with more from bond land. bonds are like ships. they move slow. not today. >> not over the past five days. in the chart, we have seen that nice spike higher in the last five days or so. that is calling the question of whether we can see them keep on that same trajectory higher. markets don't move up or down in straight or diagonal lines. they have the ability to pull back and rally. this is why the traders are watching. will mortgage rates go higher or lower? we don't know. basically the average level of a treasury note yield over the course of the past year and this middle line is the 50-day move in average. where the prices have been on average over the course of the past 50 days.
these bands here represent statistical areas that don't likely happen. what you are seeing is the yields move up to an area well above this statistically significant area. the reason why is traders are looking at this saying maybe we are due for a pull back in the 10-year yield. maybe the trend will be higher going forward overall, but it doesn't mean it won't pull back to mean levels. traders are maybe skeptical of this short move higher that can keep ongoing. how are they expressing the moves? if you are not a bond trader or a huge corporate bond or junk bond trader you are looking at etfs. this thing bets against the price of 20 years. if you take a look at that those prices have been slightly on the rise over the course of the past month or so. that's one way to play it. another way of course is the short side of things and again, if you look at the long side this is the long bond curve and
the price right now, you can see with the shares barclay has been on this steady deline over the past two or three months. whether or not you are using bonds or etfs, the levels we are seeing currently, yes, they ratcheted higher and quickly, but maybe they are due for a pull back. just the scenario that they might be due for a breather here. back over to you. >> thanks so much. the rising rates causing financials to move higher. look at the index up by just about 1% in today's session. kre, the regional banks are higher and boasted the etfs hitting new highs. goldman sacks and jpmorgan a few of the financials hitting new multiyear highs. they are on fire. should you own the group? the chief investment officer with major advisers. jason goldberg with barclay's.
i will kick it off with you. sensitivity, which banks are poised to see the most benefit? >> the group in general is going to benefit. rising high this all shifts. the money center shifts from the benefit from the capital market and volatileity and the regional benefit from the energy and have more of it. >> is there going to be a passing of the baton. we will figure out where to see the most torque. they have seen previous gains, but it's the broker dealers that have seen the most gains when you take a look year to date. the regionals catch up. where do you say this is where you want to be right now? >> we think it's a good value in both. the biggest bank names like a jpmorgan and citigroup. bank of america is more interest rate sensitive. names like a capital and wells fargo and the regionals. east and west and silicon valley
are the stand outs. >> you also like wells fargo. the insurers with the group. # it looks like it might be slightly higher. >> they had a core first quarter even though the fundamentals are strong. we think they helped the group and think met life benefits a great deal by rising ratings. that's one that should do well. they have a lot of catch up and the guests talk about a number of others like a wells fargo or jpmorgan and the first step is that money trees get better. >> i think a lot of people give up hope. american express when they lost the agreements they had with the retailers like costco. >> american express is not the interest rate play.
they have done poorly enough and they have a good game plan to revitalize the franchise at a good price. we owned american express since 1990 and have done well and 53 it at about 14 times earnings. when people talk about them not having the niche that they used to have and stores not liking them that has been a good entry point. >> appreciate it. >> let's take a look at oim. we are still trading below $60 a barrel. they join us from vienna. if it wasn't on before it is on now. what i mean is the global fight for oil market share between opec and america. it continues to heat up. who is ultimately going to play chicken or dodge first in this
game? >> everyone is going full throttle. the russians said we are not cutting either. who will produce flat out, what they are banking on is we are going see an improvement in demand. what they talked about for the past couple of days is strong demand on the back of a growing economy. they are talking about reductions, but i was struck by the emphasis on the demand. they believe that's going to pull prices higher. >> we talked about the economy request the jobs report. the rest of the world, we can call it mixed will we see enough of a demand to firm prices? >> this is what we are looking for. in demand has been strong and the administer was talking about
the source of future demand. chinese is muted. they talk about stronger european demand numbers out of germany. they are talking about a 1.2, $1.3 million demand pick up. coupled with the supply reduction, they see pulling to 75 and maybe 80 next year. brent? >> do you believe that opec would like to continue to pump oil until the weaker shale producers are finally run out of the game? do they want the revolution to stop or slow? >> i think they want it to slow. what they want is other non-opec project shelved. arctic, deep water, expensive known projects put in the spin. that's the combination they are looking for. they say they want u.s. production they they need the supply on the market but they
want the expensive inefficient projects off the market. >> from vienna it's a pleasure. bring us back chocolate or we will be upset. safe travels. on deck cashing in on hack attacks and one is soaring on the wake of the massive data breech. the one chart that shows what may happen with stocks and later on, off to the race track for a look at the big bets on the belmont. power lunch back in two. and a plan. at baird, we approach your wealth management strategy the same way to create a financial plan built to last from generation to generation. we'll listen. we'll talk. we'll plan. baird. do y ou like to travel? i'm all about "free" travel babe. that's what i do. [ female announcer ] fortunately, there's an easier way, with creditcards.com. compare hundreds of cards from every major bank and find the one that's right for you. creditcards.com.
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the hack impacts current and former government workers. name, social security numbers and birth dates possibly in the wrong hands and china was initially referenced, they are addressing the hack saying there was no conclusion about who exactly is behind the attack. the cyber security etf ticker is in rally mode on the news
touching an all time high and in the past 24 hours. let's bring in the manager with andrew chan and ceo of pure fun. how much of the move is this sort of knee jerk or algo rhythmic reaction to this interest? >> we have seen when there have been different events with the cyber breeches. we have seen a lot coming into the fund in specific underlying names. i do think it has a knee jerk reaction to the most recent cyber breech but this is a long-term growth trend. i think that people investing in this are looking to do so for that increase in spend inging. >> year to date those are more volatile names. how do you attract them by saying this was a news-driven
product, but this is going to be viable five, ten, 20 years from now. >> this is an industry that started well over a decade ago and is getting attention right now. this is why they are investing. ins and outs of how they operate. it is difficult for the specialists. it will keep up with the constant changes. you don't have to pick who the leader will be. >> how do you determine who gets considered cyber security? >> mcafee is a small piece of
that. cyber security is not moving. juniper and cisco. that has security built into every piece of hardware or aspect that they sell on the market. they seem like better fits. they are working for companies that are derived in a large percentage from cyber security. >> sorry there a cutoff and i'm curious how they decide. people who want to invest in the space. they want the keep exposure. >> that's up to the securities exchange but they look for companies with a high percentage, but greater than 50 or 70% that seems a good fit for them. that's the pure funds think pure play. that exposure is looking for that specific industry exposure. >> the ten biggest holdings in the etf and you can take a
victory lap. not one of the names is down. you got names like this and how often are you going to read ballots? >> the next is towards the end of june and the one after that will be december. >> we appreciate it. thank you very much for your time. >> thanks for having me. >> what really happened to the stock market following an interest rate hike. we have a chart you have to see. first we are off to the race track. we are looking at big bets for the belmont. >> american pharaoh is still the odds on favorite to be the first horse in 37 years to win the triple crown. we will look at the big money and the big bets behind tomorrow's race here at the belmont after the break.
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in bets were made here at the belmont. this year will be much more than that given the excitement around american pharaoh in his bid for the triple crown. most direct if you can come here and go up to the window they only take cash. you can go to any other horse track and bet. most betting these days is through websites like twin speier or express net. if you want to be with your phone, yes, there is an app for that. the association launched a new app that makes it really easy to just click and bet. given that i'm here, i went up to the window myself and bought this $2 ticket. i will win it big tomorrow. american pharaoh wins or like we do at my house, you put $1 into a hat.
the trainers this morning, this horse right now looks like a very good chance for american pharaoh. it rained this morning. it's a horse that loves the mud. they came out and trained and ran the track. they like this track and that's critical. if you look at his value, this is a horse that sold for $300,000 and now worth around $20 million in sponsors. they are jumping on for the ride. they are the private jet company. they joined monster and they try to put blankets on the poers. they will follow around tomorrow. a sports agent told us there is a lot more to come. >> come monday, you are part of history. wheaties box and trips to
disneyworld. there things to come potentially. for winners, always something great. for a triple crown, part of history. >> the breeding rights to the horse alone were sold and we are told north of $10 million. that will be bumped up beyond if he win this is race. so needless to say, american pharaoh and his owners are doing better than i will. >> when you talked about the rain, all i could think about is seinfeld. his fodder was a mudder. his mudder was a mudder. >> you can catch that race on the television on nbc post time 6:50 p.m. the final oil trades are crossing for the week. jackie d' angeles for the close. >> good afternoon. we had opec comments today. we had rig counts from baker-hughes.
i don't think either of those impact oil prices. we made a major reversal and what traders are thinking are taking us higher into the weekend. stay with us. blap it took serena williams years to master the two handed backhand. but only one shot to master the chase mobile app. technology designed for you. so you can easily master the way you bank.
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here's your cnbc news update. thousands gathering on the streets of munich, the site of the summit. 17,000 police have been sent to maintain order. they are protesting global trade policies. the summit begins tomorrow. a magnitude 5.9 earthquake killed two and injured 11. stranding more than 100 people at the peak. it struck on the northern tip. a van caught fire after crashing into a weekend in virginia beach. firefighters believed the driver of the van suffered a medical condition that caused him to lose control and crash. miraculously given that footage, no one was seriously injured. >> heb that operates more than 360 grocery stores in texas and mexico is eliminating eggs to
three cart ons per customer due to the disruption of supply due to the avian flu. back to you. >> the final oil trades for the day and the week are crossing. let's go back down to jackie at the nymex. >> we have a big rally on our hands, trading over $59 a barrel today. we were lower after opec said they would leave unchanged. the concern is that there is a supply gut in the market place and we rehearsed right when the recounts came out from baker-hughes. we saw four rigs go down and usually supportive of prices and not a lot in terms of what we have seen. traders telling me the move has it do with the move in gasoline to the upside. that is take us up about 1.10 at this point. essentially with summer season in full swing. we could trade up over $60 over the next few days and potentially a week. when we hit that peak that's when we may see a slide lower
absent any other catalyst, of course. >> very a great weekend. time now for street talk. first up is denny's. adding to the best ideas list. price target goes to 14 and stocks at 11 and change. remodelling and menu changes are working. egg costs are actually over. >> we had a nice run recently. in a decade for the full year. next up zumys posted dismal earnings and a number of analysts downgrading the stock cutting the rating and credit suisse cutting to 27. just about $3 from where we are from here. a lack of clear fashion trend causing weak traffic.
the core consumer of zumiez is men. >> it's a surf-skate them. i wear vans but that's the california kid in me. the only worst performer is noodles and company. the average price is 30.50. they have to come out in defense of the name. next up the high speed trading firm vitritu. a positive out come on either of the issues should provide significant upside. a big risk around this. they swooped in on f squared. can you imagine this was a $224 stock. quite a fall here that we have seen in a matter of a half year
or so. gap is better than expect and old navy. a product that continues at the gap brand and specifically in the women's division. they do not expect material improvement until 2016. >> as your street talk gain, i knew that same store sales had been bad and i didn't realize it was 13 consecutive months with negative months for the gap brand. not the store, but the gap branded stuff. they are well off the lows in 2009, but back to the same price in 1998. do they look to make a change at the gap? >> they got a new ceo and he said be patient. it will take time to turn it around. >> the fifth name which is the under the radar name which is the natural grocers by vitamin cottage. it's a small cap colorado store. an overweight they met and saw a
lot of growth opportunities. >> you think organic and healthy eating would be great trends but this sector whether it's the fresh market or whole foods, this is not easy in terms of the performances near to date as well as the last 12 months. lots of competition from the super markets. that wraps it up as well. it is now time for trading nation. today we trade the good old u.s. dollar index. up about 1% on the jobs report. now up over 20% in the past month. can you make dollars on the dollar? everybody loved the dollar. can we still love it? >> the rate is moving higher and the fundamental backdrop is strong. you have every country in the
world that will debase. they have a lot more room to the upside and i stick with the trade. i'm still a big buyer here. >> craig, let's take away the stuff that david talked about and look at the charts. how does the dollar look? solid? >> have to agree. the u.s. dollar is phenomenal. we are in a four-year consolidation. the power shares index. you broke out and made a nice series of higher highs and lows and the receipt price action is just a pull back right to the up trend support line. from my perspective, you want to be along the uup. david and craig, thank you very much for a look at the dollar. a reminder we do two more online segments every day. that's at trading nation.cnbc.com. it is the issue that many workers are growing more
>> this morning's jobs report shows employment is getting better. let's look out ten years or more. is it possible automation will steal our jobs down the road? jobs such as bank tellers and airline agent is a kiosk in the internet. for self check out and a toll booth operator is a small box held by velcro on the windshield. we made them our own
responsibility. where do we go from here? the rise of the robots and author of the shadow work. both joins us now. thank you guys very much. i will start with you. i gave a commencement speech this past weekend on reasons to be optimistic. one was that robots would not take the jobs. do you agree? >> well it varies. i think the still jobs will be in good shape. unskilled jobs are disappearing. the self serve gas pumps. that's one that i wrote about where people's jobs are not there anymore. robotic pumps are doing that job. you have people who have to build the pumps that keep track of the financials. there new jobs being created, but they are a higher skill. >> in new jersey and oregon i
suppose now. we look at automation but think about the black smiths and the horse buggy makers back in the day. they all knew they were gone but the industry created far more jobs than it displaced in the horse industry. is that going to happen again? will they take over the world? uniquely labor intensive and created millions of jobs. not just in factoryiesfactories, but jobs fixing cars. the problem we are seeing today is this technology is coming from all of that stuff. we see self driving cars. we see smart algo rhythms are taking on agents and people that
destroy the number of jobs. i don't think they it. >> i grately disagree. there things that are going to be -- jobs that we can't comp hebt. industries that we can't think about that may employ millions in the next 20 or 30 years. haven't we always said computers have been around since the 70s and there now more software and technology jobs than ever. that's right. as a percentage of the workforce, that's not very many jobs. you see hype about the new jobs with the social media marketers, but they are a tiny number relative to the workforce. about 90% of people work in professions that existed 100 years ago.
if we see them wipe out those jobs it's hard to see how it will create enough new jobs for average people who don't have high education levels to absorb the workers. >> how much of we to blame? my grandfather and father owned a gas station. i live in new jersey. i don't like the full serve. i want to get out of my ka are and pump my own gas. they may do away with full serve. how much do we want shadow work. do we want to bag our own groceries? if we do aren't we to blame for eliminating the jobs? >> you are right. yes. it's a new form of unemployment that is being created. it has to do with consumers now taking on jobs that used to be done by someone who was a salaried employee. that is what i call shadow work. oddmation has been around for
centuries. it always eliminated jobs. automation usually eliminated jobs at the point of production in the factories. today we are getting consumers working with kiosks and robotics eliminating at the point of sale. that is a different animal. there a lot more points of sale than production. >> it's a great discussion. i hope you are wrong. humans have a great capacity to realize we need to stay employed and therefore will create jobs we need. if you are right, i will be the first on the spaceship. thank you very much. robots are not rate to take over the world yet. if you noticed that hero foiled by a flight of stairs. they have a $2 million first price andor our own american ninja
has the details. >> this is live. we are in between rounds. round is about to start. the robots are having to go through the disaster with communications with the human masters. e land musk doesn't have to worry about anything for a long time. robots are not smart or nimble if you take away their humans. the research arm is offering $2 million to the best performing robot and if they fall down and can't get up you lose points if you help them up. lots of foreign teams and university teams and one very big name. >> you can touch him. he is a little bit oily. you can wash your hands afterwards. >> i don't want to break him. >> this is the robot from team trooper. they were tweaking the software and the hardware was provided by boston dynamics owned by google. during the competition, they have to drive to a disaster site
and walk over to open a door. do tasks like purchasing a hole in the wall and crossing a barrier and a surprise task all in one hour. >> we are trying to perform complicated tasks in a very complicated environment. this is really beyond the state state-of-the-art that they allow for. >> dha make small decisions on their. they can be told by the human masters to open the door and look and see where the door handle is and turn it and open the door on their. then they have to stop and wait for the next command. >> after a very rough start, leo did drive himself down. he needed help getting out of the car. he got the door open and got inside the building. he tried to turn the valve. he is in second place at this point. it is all very, very rudimentary and he will get the winnings guys to anyone even if they are foreign and the u.s. doesn't get the technology because it's important to start feeding this
industry like he did ten years ago with driverless cars when everybody was afraid of that. look what happened there. back to you. >> can we reroll that. # am i right in saying this is cool. we are showing this again, but based on what i'm seeing i am not afraid of a robot taking my job just yet. >> no. they can do limited things if a robot is doing a task like making a car. that's one thing. it is a completely other thing to walk wirelessly with communications and get through the door. # they got over the cinder blocks.
they said will you have a drink with me. is that accurate. did leo ask you out? >> fast money and slow robot. thank you very much. you are our only hope. >> let's get a check on the markets. a little more than an hour left and take a look at the dow down by 51 points or so. they are up about a quarter of a percent. the s&p is up at the flat line and seeing the rebound after yesterday up by just about a half percent right now. take a look at the two-month chart of the 10-year note up 24% since the beginning of april after a better than expected jobs report. they made the biggest jumps and what does it mean for the mortgage and the money? we will get you the latest. power lunch back in two.
the other buyers they're both up over three months. intel's deal did that get a positive response. >> there is criticism that maybe intel overpaid. it's not really diversifying in the areas intel really needs such as mobile. so people are rethinking this deal. my pick here i'm going biotech. town 29% this week along. after disappointing phase three results for its breast cancer drug. the stockstill up over 80%, but it's had rough going. it also declined precipitously because of the it is appointing abstract that it was releasing pre-asco. so volatile. >> perfect example of the biotech investors. you see it all the time in the after hours moves. all of a sudden you're down 20%off night. all right. interest rates on the move which means mortgage rates will be on
the move sooner than later. diana olick in washington. take us into your knowledge of the mortgage industry. how long is the lag between the ten year yield moving and mom and pop seeing it from a mortgage banker saying, sorry, remember that rate i quoted you, it's now 50 basis points higher. >> well, it's not long at all, but not like a stock price. you get lender sheets out in the morning eastern time between 10:00 and 11:00. so the rate moves that we saw this morning at 8:30 after the jobs report translated into that 10:30, 11:00 rate sheet that came out. so you get overnight rates and the morning rates. so they didn't move quite as fast, but mortgage lenders will tell you once they get to a level, if the market is not moving so much they won't come done off that level. they will stay there. because moving that rate is expensive to them and it costs them in time and it in money. >> we're looking at a live shot there of a screen. how volatile -- we know how volatile the ten year yield has
been. how volatile do mortgage rates tend to be in part because i know a lot of the banks warehouse, they buy big lines of credit and then offer it out to their customers. how value till isolatile is this market? >> it's very volatile and we've seen that over the past couple months. mbs live is where the lenders watch the rates and where they also talk to each other about where they expect the rates to go. and that factors into it. remember it's not just about exactly that ten year rate. it has a lot to do with what the banks have what they can lend what smaller mortgage lenders can afford to do. and the calculation of each particular borrower. win we look at that rate and say 4.25%, you're looking at the lowest for the best possible buyer. and we know a lot of people are having trouble qualifying for that rate. >> diana, thank you very much. interest rate hikes are indeed coming. some say that could mean doom
we have a couple good guests on this, as well. i'll highlight back when the fed aggressively raised rates in '94 and '95, markets moved, dow up 33%. second best gain in 40 years. another rate tightening cycle was right here, you can see it wasn't all the grains but the last two times we had an interest rate environment where rates were going up stocks not only did just fine they actually surged. cio of web bush and paul hickey. steve, just trying to highlight maybe this time is different, but history says higher rates won't necessarily kill stocks. correct? >> well, certainly the initial rate rise. there is the wait for three rate hikes from the fed before you sell stocks because typically the third or fourth rate hike causes issues. but look where we're coming from. we'll go from 0 to 0.25 or maybe 0.5. i think they want to get off zero. but will this have an impact on
stocks? i think not. simply because if you look at what alternative investments will yields it's still sub one. >> and what you just said plays out. paul, you know better than anybody, the markets each rose then for another year plus after the fed stopped tightening. you go back and look at this stuff for a living. what do interest rates and stocks tend to be tied together to? >> if interest rates are rising because the economy is doing better, that will ultimately translate to better sfok markettock market performance. but the thing to keep in mind if you look back at periods where the fed hiked rates after a long pause in not doing anything and i think we can all agree this has been a very long pause, in fact a record long pause, there's been five prior periods where that occurred. four out of five times the market in the short term saw a pull back of 5% average. so i think it will cause turbulence in the market short
term. i mean we've been at such a low level and flat level. when you introduce change it will cause short terpm dislocation. as long as they don't just go higher and higher i don't think it will be too much of a long term worry. >> and steve, paul makes a great point. so how much of this is you can't use this chart because we've never been at zerp and we haven't had this kind of a fed balance sheet before? >> well, that's true. is this a bit of unprecedented territory. but i think the basic facts remain. reason why stocks are attractive is alternative investments aren't because certainly from a short term perspective, they're yielding less than 1%. look at europe alternative fixed income investments don't look very exciting here. so equities is a natural place for moneys to gravitate. because you go from 0 to 0.25 or 0.5, is that really going to change that? i think not. >> all right. guys thank you very much.
appreciate it. apple starting streaming service take and the worldwide developers conference is next week. has there been a lot of ihype going into it. we'll trade apple tonight on fast. >> i think i speak it for everybody here when i say have a nice weekend everybody. "closing bell" starts right now. good afternoon everybody. welcome to the "closing bell." i'm kelly evans. >> and i'm bill griffith. as expected a busy day for the markets. there was that big jobs number this morning that beat expectations. we'll tell you the one sector that is powering job growth in the economy be what it says about the state of the economy right now. i bet you cooperatekoopt couldn't guess which sector that is. >> send us your tweets. meantime more volatile