tv Power Lunch CNBC June 9, 2015 1:00pm-3:01pm EDT
are moving higher, up 58% for the year but i do think this increases the volatility. >> how many people realize that's not already in there also? >> it's not in the eem. >> right. >> these stocks are not in van guard's product, not in msci's product. >> good stuff. thanks for watching and thanks to all of you as well. that does it for us. "power" starts now. >> "halftime" is over and "power lunch" and the second half of the trading day starts right new? yes, it does scott, thank you very much. along with mandy drury i'm tyler matheson. something i know a little bit about, a new class of cholesterol drugs going to get a go ahead from regulators. >> and check out oil. we're moving up to about 3%. a big rally on our hands and prices up 20% in the past three months so we've got a technician who sees something very specific in the charts for oil and he's telling clients to make a big bet. find out which way he thinks oil is going, up or down ty. >> mandy, picking a spot to
retire? >> okay. we do begin with the big battle that affects nearly a third of all adults in america. we're talking about high cholesterol. an fda panel decided whether to approve the first in a new class of drugs many experts believe could drastically cut the risks of heart attacks and strokes. one of the drugs is made by regeneron and sanofi. parma reporter meg tirrell is here with more. >> this drug is being discussed and tomorrow they will discuss a very similar drug from am again and both work in similar ways known as pcsk-9 and lower levels of ldl or bad cholesterol in the blood. shown in clinical trials to thrower for as much as 60% for some patients.
that's very good news. one of the big questions being debated today by this panel of outside advisers to the fda is which patients these drugs should be prescribed for because, of course we have statins like lipitor that are very effective for lowering cholesterol levels and they are taken by pill form. new drugs are injections, so that's one thing to consider and so a lot of patients don't actually get enough of a benefit off of statins or they can't tolerate statins and the fda has been considering whether those populations are the most appropriate runs for the drugs to be prescribed for. analysts say that could be as many as 10 million patients in the united states. now, another question that they are talking about is whether the lowering of ldl cholesterol will actually translate into reduce the rick of heart attacks and strokes down the line those bigger so-called outcome studies are expected to have results in 2017. analysts say that could even expand the patient population for whom these drugs are recommended even further. they say together they could bring in $10 billion in annual ref, $1 billion potentially
each. what we're looking for is any sort of differences between the drugs. their safety shortfalls are very good but as we see how the panel weighs in on regeneron and am again that should set up the playing field down the line. both expected to get approved this summer. mandy, back to you. >> thanks so much for that meg. a news alert. three-year notes, dom chu, what are the details? >> treasury department auctions off $24 billion worth of three-year notes. the yield coming in a high yield rather of right now through looks like 1 1/8, 1.125%. again, the note yield coming in 3 billion or $24 billion worth of three-year notes at a high yield of 1.125%. the bid to cover here 3.33 again, so $3.33 worth of bids for every bond dollar up for auction. the high yield at the latest three-year note sale was equal to its 1:00 p.m. when issued so just about in line here but,
again, 1.125% 1 1/8% that's what it went off as the u.s. selling three-year note or $24 billion worth. back over to you, tyler. >> just for record and a look at what the ten-year note and 30-year bond are doing right now. there's the three-year t-note. there you got it at 2.42. the price down the yield up a little bit. the 30-year at 3.15. meanwhile, check out china's stock market, talking about things that are up up almost 60% this year. new highs. in a few hours from now a major decision will come down that could give the green light for this red hot market to go even higher from here and change the entire dynamic of global investing, and i'm not exaggerating for a change. bob pisani live at the new york stock exchange with the details. hi, bob. >> hello, tyler. today's the world's largest indexing firm msci will rule on whether shares of mainland china should be included in the index's global indexing scheme
used by fund managers and etf providers. msci has used shares of stocks china listed overseas but don't include the much bigger stocks in china mainland and end of its inds so. why not? authorities have restricted ownership to chinese citizens but that's now owl changing but the question is whether it's changing enough to satisfy indexers. why is it a big deal? indexers rule the world. many investors are increasingly investing through indices which most are used in the 1,600 etfs traded every day in the u.s. it could mean billions of dollars could come out of other emerging market countries like brazil and south africa and flow into china. let's take the msci emerging markets index, a $1.1 trillion pegged just to this index, 1.1 trillion. china 25% of that index, but this is all china stocks listed in hong kong and overseas not on the mainland. adding mainland china could
significantly increase china's weighting. this index is used in the biggest emerging market etf, the ishares etf or eem as it's called. what's like throw happen here's my guess. doing this all at once is going to cause too much chaos so msci is likely to announce they will slowly add mainland china stocks to the index over a period of years. the index initially will probably add 5% of china's mainland shares which would increase china's weighting by a modest 1% to 2% but if all is added eventually tyler, this could go up to about 43% of the emerging market index in china. either way the key point here is get ready to own more china stocks if you own international. >> wow, you rays an interesting point. if they were do this all at once, think of the disruption money flowing out of other market and into those shares. >> they will not do that. either not at all or a 5 misinclusion, and that is certainly the best way to do it if they get in. >> bob you're going to stick around, but that big development
on chinese stocks comes today at 5:00 p.m. and may involve a major rebalancing as bob just described for global stocks. melissa lee will have it all on "fast money" tonight, and you will be the first to see who is on the list who benefits and who loses. that is 5:00 p.m. tonight. bob, before you go transports continuing to struggle. we talked about it yesterday. they have been really trailing the dow, down about 9% almost 10% this year. airlines among the biggest drags here perhaps surprisingly raising questions about whether a correction in the broader market is coming. if you follow dow theory you might think it is. are they worried about it on the floor? >> they are. transports are down about 10%. the airlines have had trouble in the last few weeks over concerns that added capacity was coming and that the carriers would cut the prices. airlines started down for a second day in a row but some have recovered the middle of the day. the problem is that unit revenue, key metric for airlines is dropping due in part to higher capacity so american forecasts that its second quarter unit revenue will
decline 6% to 8% last year and blamed the revenue decline on foreign exchange issues and this comes as united predicted a 5% to 6% drop and unit revenue would drop 4% to 5% this quarter. good news, southwest announced they were taking steps to lower capacity so hopefully, mandy, this issue will be less of a problem, but i think you're going to see it happening in the next few weeks as a major issue. back to you. >> bob pisani thank you very much for the rundown there. let's drill down on the airlines a little further. is there trouble in the skies. bob was saying that the major players are going back to their old ways overcapacity and slashing prices. let's bring in former american airlines chairman and ceo bob crandall. good to see you, bob. are you concerned about this issue? >> no, i'm not, mandy, but, of course, i lived in a different universe where there was allotted to competition and as a consequence we were constantly going after the other guy and adding capacity and the consequence of that was that although that was sensible for
individual airlines it wasn't sensible for the industry. now we've got a much more consolidated industry populated by people who live through some of the bad times in the past. i just -- it just does not seem to me that there's much risk that they are going off and replicate what happened years ago. >> if they do add capacity though, bob, is there enough traffic? is there enough demand to be able to meet that? >> mandy, you've got to keep in mind you know adding capacity the airlines are operating historically at very high load factors. when's the last time we're on the airplane and someone says we have a full flight today so the consequence is at traveling increases, as the population increases you've got to add some capacity in order to continue to operate a functional transportation network. the trick is not to add so much that you have to constantly cut prices in order to fill the
seats and my guess is that they have learned that discipline and will respect it. it seems to me rightly or wrongly, and i'm way far away from a stock price analyst, but it does look to me as if the industry is somewhat oversold at this point. >> bob we'll get back to you in a couple of minutes. a lot going on in this particular sector. meanwhile, dom chu, what's happening in market world? >> how about procter & gamble, mandy, hitting session highs right now up over 1.5%. the company has reportedly received bids from cody and germany's hankl for separate parts of that procter & gamble beauty-related business. reuters says those businesses could be worth to a total of up to around $12 billion and moving up to the best levels of the session a very large consumer products deal in the works. mandy, back over to you. >> thanks a lot, dom. are america's airports safe you? might remember the recent shocking leaks raising serious doubts, and congress is holding hearings on that exact issue today. also oil rallying big time. prices up about 20% of the past
three months. we're going to get technical for you. what are the charts saying about oil's next move? you've got to stick around to find out. ericans. we're living longer than ever. as we age, certain nutrients... ...become especially important. from the makers of one a day fifty-plus. new one a day proactive sixty-five plus. with high potency vitamin b12... ...and more vitamin d. 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
safety regulators. the ntsb issued a report calling for any collision avoidance systems in all vehicles. watch the shares of mobileye. now off to san francisco where josh lipton has a developing story. back over to you, josh. >> reporter: dom jack ma is speaking in new york and answering the question people ask him the most. >> when am i going to compete with amazon with ebay? well i would say we showed great respect for ebay and amazon, but i think the opportunity and the strategy for us is helping small business in america. >> so jack ma dramg the company's issue not one as competition but rather one cooperation saying his company can help small american businesses getting more goods
and products sold on his company's platforms. tyler, back to you. >> and we'll hear more from david ma tomorrow when he joins david faber right here on our show. "power lunch," 2:00 p.m. hour. don't miss jack ma tomorrow on "power." . mandy? >> hsbc tyler, is cutting about 50,000 jobs in an attempt to reduce the size of its global banking business and cut billions of dollars in costs. hsbc shares are down almost 11% this year. federal prosecutors considering criminal wiring fraud charges against general motors over the company's failure to israel vehicles equipped with effective ignition switches and sage therapeutics soaring today up about 14% after announcing positive results in a clinical trial involving a treatment for post-partum depression. that stock is up a whopping 142% so far this year. ty? >> mandy, there has been wore egnews lately about the safety of america's airports. today congress holds hearings and just how serious the issue is and you're eamon javers is
live in washington. >> reporter: it tells you a little something about the world we live in today when the hearing in the senate on the tsa security vulnerabilities and the threat of terrorism was itself just within the past 40 minutes interrupted by a bomb threat against the senate dirkson building. capitol police are on scene and evacuated part of the senate dirkson building as well as other areas on capitol hill. we saw bomb squad officers going in and once they cleared the hearing room where this hearing was taking place we saw bomb squad officers on the tv feed going through chair by chair and clearing each chair in the hearing room and checking under the desk with flashlights looking for anything that could be amis here. this was a hearing that was scheduled to focus on vulnerabilities at the tsa, the threat of terrorism against american air traffic. a couple of things that we're learning in this hearing, including tsa pre-check vulnerabilities. one testimony is saying that they allowed a felon and former member of a domestic terrorist group who had served a multi-year jail sentence to use
the pre-check lanes and loose checks on badge applicants. some employees getting badges to work at the minneapolis-st. paul airport who later went on to fight with isil in syria and unscreened material entering secure areas, one of the whistleblowers testifying in the hearing said that tons of materials, magazines, newspaper, pillows, food cleaning products and the like are not screened for contraband before they get into the airport so, tyler, an interesting hearing, an important issue interrupted by news of its own. that bomb squad effort on capitol hill is ongoing right now. we'll let you know what develops, if anything. >> thanks very much eamon javers. let's bring back robert crandall, american airlines former chairman. rapid fire here are our airports safe that's number one? who a private contractor do a better job of keeping them safe than the tsa? that's two, and, three, do we need more air marshals? >> the answer to the first question is sort of but not
absolutely. the answer to the second question is yes. private companies overseen by -- overseen by the department of transportation, so with the private companies doing the work and the government in effect monitoring. >> mm-hmm. >> would be way better than what we have today and the third one is that air marshals ought to be abandoned, absolutely. there have been numerous studies which show it is the least effective way you can possibly spend terrorist dollars. it's utterly nonsensical. >> because? >> because -- >> it's too random. >> it doesn't work. i can't remember the ratios tyler, but -- but for every, you know 2,000 hours of arab marshals they effectively have had no impact whatever. ves a very, very wasteful and very silly kind of program. it should be stopped. >> would you have said the same thing in 2001? >> yes. >> mm-hmm mm-hmm. >> yes.
>> skeptical that they oat value at all given the cost? >> what air marshals? >> mm-hmm. >> air marshals have been an absurdity since day one, and all of the measurements all of the studies -- you know i don't understand, tyler. we do these studies. we have these inspector generals. they study the outcomes and they write the numbers down and congress simply refuses to do anything. it's an absurdity. if you're not going to honor the study, why do it? >> right, right, right. bob crandall always great to have you on because you say something. we appreciate it. bob crandall. >> my pleasure. >> you bet, american airlines. and picking a spot to retire, want to read, it mandy? >> go ahead. i'll just stand here and smile at the camera. >> picking a spot to retire may come town to more than sunshine. now you. >> okay. we have the very best and the worst cities to retire in america. plus, can't remember to take a pill? there's an app for that. there's an app for everything. guess what. your doctor wants to prescribe this app for you. don't go away.
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at chase, we celebrate small businesses every day through programs like mission main street grants. last years' grant recipients are achieving amazing things. carving a name for myself and creating local jobs. creating more programs for these little bookworms. bringing a taste of louisiana to the world. at chase, we're proud to support our grant recipients and small businesses like yours. so you can take the next big step. one of the biggest gathering of power players in finance, and mary thompson is there live in new york. hi, marry. >> hey there, tyler. as you said we're speaking with roger hochchild the president and c.o.o. of discover. thanks for joining us today. you know the first question that i want to ask you is tell us what the consumer is doing in the second quarter. have their spending habits changed at all from the first
quarter in. >> no. i think consumer spending is a bit softer than we would like to see or most people expected last fall. i think there was a hope that with the savings from gas that would translate into more retail saves. the consumer is saving a little bit, using some to pay down debt but, again, a bit soft on sales. >> with the gas savings we haven't seen any change with what they are doing with that since the first quarter since that's what they were doing back then. >> exactly. still doing the same. >> part of the company's plan to growth earnings is to increase their personal loan growth as well. where are you with the strategy and are you looking to partner with let's say a peer-to-peer lender to go outside your customer base to do this? ? we've been in the personal business for quite a while now and certainly a lot of competition now and fraught around peer-to-peer lenders. we have a balanced approach and bring it on to our balance sheet
and don't charge up-front fees like most do so we feel good about our ability to compete. >> i want to talk about another area of loans that you're in and that being student loans. there was an op-ed in the "new york times" over the weekend about a man who wrote he was burred by student debt but he opted to default on it as opposed to paying it back. one of his arguments was there was predatory lending in there or -- it was too expensive for him essentially to -- to handle that debt. what was your response when you read that? >> you know i thought it was an incredibly narcissistic article. here who is someone who took on loans who had the ability to pay them back and instead chose not passing those costs on to other students, so really very unfortunate. tremendous lack of responsibility. >> does it give the company pause at all when they see something like this in a high-profile newspaper because there are concerns about the growing bubble in student debt and the default rate that could
possibly rise. >> you know most students are very responsible. investment in education is something worth borrowing for. roughly 90% of our loans are co-signed by the parent as well and we see very strong performance in terms of students paying us back. >> i want to talk to you about the rising rate environment and how is the company position and how do you anticipate your stock might do in this environment? >> we've positioned our balance sheet so that we're ready and we'll actually make a bit more money in a rights rate environment. i think, you know the traditional branch banks will perfect a bit better given their mix of deposits. again, we think we'll perform well as rates rise. >> roger, thanks very much for stopping by to speak with us. we've been speaking with roger hochschild, president and c.o.o. of discover. mandy? >> thank you mary thompson. do you like your job? which jobs are loved and hated the most and where? and when it comes to picking a place to retire it is really
more than just the warm weather that you're considering. the best and the worst cities to retire in america is coming up next. when you're not confident your company's data is secure the possibility of a breach can quickly become the only thing you think about. that's where at&t can help. we monitor network traffic worldwide, so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most.
i'm sharon epperson. here's your cnbc news up date for this hour. former house speaker dennis hastert will be in court later today on charges he lied to the fbi about banking withdrawals. he is seen leaving his home in plano, illinois this morning. he will be arraigned in federal court in chicago at 2:00 p.m. local time. the head of the u.s. marshal service stacy hilton has resigned. senate judiciary committee chairman chuck grassley saying resignation has come as the agency faces serious allegations of misconduct within its senior ranks. new york state police are still searching for two inmates who escaped from a new york prison saturday. the search is now focused on a wooded area in the town of willsborough nearly 0 miles from the clinton correctional facility where they were incarcerated. authorities believe the two men had help in escaping. yesterday it was reported cleveland cavaliers superstar lebron james gave each of his teammates an apple watch. today lebron's spokesperson says the watches were a gift from
apple unit beats and lebron instead gave samsung smartphones to his teammates. you see, lebron is a spokesperson for samsung. that's cnbc's news update for this hour. back to you. >> could have been awkward. oil moving higher up nearly 3% on the day despite the fact that the eia just raised their 2015 crude oil production forecast. in fact, now we're up by 3.5% sitting above 60 bucks a barrel. let's bring in john kosar of asbury research. you've been looking at charts. what have they been telling us? >> very interestingly pack in march they came back down to the lows in 1994 and the futures market right around $46 per barrel, held there, and we've started to rise so this suggests that there's some new pressure coming in to buy oil, and history also repeats. history always seems to go back and retest old levels. that's a we've done here over the past three to four months and now this looks like an opportunity for oil to actually
go even higher. >> how much higher, john? what do the charts tell us? what's the next level? >> well the next chart should show you we came down to the 50-day moving average and wti oil just within the past week or so. it looks like we're going up to about $69, $70 a barrel here so maybe another $8 a barrel from where we are right now. >> i know you're not -- you're a charts guy, not a fundamental guy but nonetheless from a fundamental perspective do you think oil is acting as it should be ie why is oil rising despite continued oversupply concerns? >> well, i know the amount of actual oil being produced has been really shut down here over the past year so that's certainly helped move higher here over the past couple of two, three days but, again, we're on a support level, and this is an obvious place where if somebody wants to buy oil you know what your risk is and, again, i think another $8 to $9 here by the fall is very likely. >> okay.
thank you very much john kosar. >> thanks. >> and for more go to powerlunch.cnbc.com. tyler? >> more on the bond market and the three-year action that we've been talking about at the top of the show. here you see red tiles on the wall showing the prices are down and yields are up. ten-year at 2.049. it was a little higher just a couple of minutes ago when i looked. the 30-year is at 3.137, almost 3.14% as prices fall and yields move up just a bit. that, folks, is your bond report. time to talk intel. jon fortt sat down with intel ceo and vice president just a short while ago talking stock performance. jon is live at intel headquarters out in santa clara with highlights of that conversation. hi jon. >> hey tyler, intel had a bit of news $125 million diversity fund from intel capital but i also asked the ceo about the
overall global economy and how it looks. he talked by geography. take a listen. >> china and some of the emerging markets in asia continue to be soft and we're seeing some pick up there now but it's still relative to what it's been in the past relatively soft. north america, most of western europe looking strong the rest of the emerging markets kind of a mixed signal and the consumer you know kind of the consumer is hanging in there, but nothing is outstanding. >> i also spoke to the head of intel's client computing group a little bit earlier about the second half of the year. a lot of hope for that with windows 10 coming out and also intel sky processor which has a new design on their current manufacturing process. they do sound bullish about the second half prospects despite some of the difficulties in asia and the emerging marks. tyler. >> i'll pick it up from there. jon forth looking very snappy
with the wescott. three indices are moving now to the upside kind of meandering a little bit today after three straight losses, three straight days of losses rather. the dow and the s&p trying to stay positive while the nasdaq earlier was in the red, right now poked its head in the sunshine. right now dave garabadian and brian perry of the morning star portfolio mid--cap 30 fund. gentlemen, great to see you. dave what we're seeing is a clear lack of trend. what do we need to see to give us a proper trend here? what are we waiting for? >> you're absolutely right. the s&p 500 today is right about where it was on christmas eve, so for almost six months the market has been consolidating the -- the very substantial gains we have seen from this great bull market. i think what we need to see going forward is more of the good economic news that we've seen in recent weeks confirming that recession risk is low. some further clarity on what the
fed -- >> recession risk is low? was there really a concern that there would be a fall back into recession, and, also if we see good economic data isn't that like good news can equal bad news for the market because it brings forward fed hike rate expectations? >> i think the bond market was beginning to price in a recession, and part of the challenge is we're seeing that unwound in higher bond yields. i think that what the market is looking for is some clarity or reassurance that while yes, the fed will probably begin to raysise rates in september, that's the most likely outcome but it may take the stock market a little more time. >> what about you, brian? what do you think is the biggest overhang or obstacle to markets moving higher? are you concerned about the dow transports which up until today were in correction territory from their high? >> you know, i mean, we'd certainly keep an eye on that. i think for us what we're really
concerned with is the lack of consumer spending and we need to see a follow through on that. everybody is waiting for that shoe to crop. q2 looks like it will be good. looks like it will be better through the year. consumers won't save as much going forward. they have done a great job of paying down debt so which think that this might abrigate time for somebody to start to take a look at some of the consumer discretionary names. >> can i just pick up on the airlines because i see one of your picks is jetblue. we were talking about the airlines a moment ago and the concern that maybe they are going to be adding capacity and cutting prices. would you use weakness in the airlines now to buy? >> i think this is a great entry point right now. you've had some 13%, 14% pullback in jetblue from its highs just a few weeks ago. i think, that you know as we look at the sector it's -- it was -- it was pretty you know highly priced. i think it's come back a little bit. this is a great entry point. jetblue is one of those
companies that we think is excellently managed. capacity doesn't change overnight so it's going to be a longer term story, but i think right now as we look forward it looks like a great opportunity. >> talking of using pullbacks to buy. dave, you've got utility on your pick list here. i think it's down about 14% from its highs. do you think that now is the time to get in or in light of its rate sensitivity, do you think it's got further to going to downside? >> well we've mostly avoided them, but we're at the stage now where because of the drop in price that you mentioned, they are becoming more interesting so we're not sold on it yet, but we think the valuations are coming more into range. and part of the test will be to see just how sensitive they are to fluctuations in interest rates here over the next several weeks. >> something to keep an eye on. dave and brian, thank you very much for joining us. and you can go to powerlunch.cnbc.com to see what else brian likes in the mid-cap space. ty? >> we want to keep you abreast of what's going to happen here tomorrow, and that would be a
big day. alibaba alibaba's jack ma will speak. he took the stage about an hour ago, that's happening today, and not shy about his company's role in the retail world and let's give you a quick listen and then we'll tell you about tomorrow. >> this year possibly we're going to be bigger than walmart globally and walmart managed that size of business have more than 2.3 million people. we grow from 18 people to today 34,000 people. >> well his company may be growing, but year to date his shares aren't. they are down about 15.25%. be sure that david faber will ask mr. ma about that tomorrow right here on "power lunch" in the 2:00 p.m. hour. don't miss that. he is an ambitious fellow and a smart one. the west coast loves its jobs more, that according to a new study. which jobs and where exactly are the moves loved and hated? and when it comes to picking a place to retire it's more than just about warm weather, but there's some warm weather spots
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. reports that billionaire elon musk has built his business empire on nearly $5 billion in government subsidies and musk's defense of those subsidies right here on "power lunch" are just the tip of the iceberg in a growing debate over how much states are spending to try to attract business. scott cohn you've been crunching those numbers as part of your an mull america's top states for business and not everyone is happy about it right? >> they are not happy had a we're crunching subsidy numbers actually. this is the ninth year. >> ninth year. >> congratulations. >> thanks. >> it's coming up. $4.1 billion spread over three companies for elon musk might sound like a lot, but you know
what? it's a pittance compared to some of the biggest deals. take a look at the granddaddy of them all. $8.7 billion to washington state in 2013 to keep -- from washington state to boeing i should say in 2013 tax relief to keep operations there. that's on top of 3 billion to give boeing years earlier. alcoa was given $5.6 billion in electricity discounts over 30 years back in twfn in exchange for a promise to protect 900 jobs but when the company made noises about cost-cutting and layoffs the state sweetened the pot with more electricity credits. elon musk more than $1.25 billion last year to build a battery plant in nevada. it apparently includes a unique feature where tesla gets to capture not only the own tax that it would have paid but tax revenue from suppliers that set up shop near the plant. our top states for business rankings give points on the
states base on the incentives they offer and here's the top state. we're talking about the top states for business not for taxpayers. that's why we do it. here are the most generous states. new york and washington louisiana. michigan and kentucky are the top five states for subsidies. the watchdog group good jobs first which compiles all these data say these states do not deserve credit for us or anybody else for giving your money away. >> the system is rigged now so there's lots of money laying around on tables and companies feel derelict if they don't grab money laying around on tables. the system has evolved in a way that's incredibly bad for taxpayers, asymmetrical bargaining power between the private sector whipsawing states against each other and public officials trying to represent taxpayers. >> now, we've got a lot more about the subsidy debate at our special website topstates.cnbc.com and more about competitiveness. two weeks away for the top
states competitive count don in 2015 and we want to hear from you using the #topstates. a couple weeks away. >> maybe you can tweet in. >> scott will be on the road for that, i'm sure. workers west of the mississippi, meanwhile, are the happiest according to a new study on job satisfaction. cnbc.com's senior editor is here with an exclusive look at the report and also have cnbc's.com awry levy ari levy. welcome. turns out state by state workers in mississippi are happier. why is that? >> this data comes from monster, the big job placement site and brand watch so they are looking at trends. they looked at over 1 million tweets on the the internet over the past year and if you look at the top five states for happy employees, of course hawaii is the number one state, so we know we have a reality check there. >> yeah. >> duh. >> we know they love their jobs the most and it's followed by all the other west coast states,
utah, california washington. they make up entire five there. it's all the west coast. >> this is based, ari, on data amassed from going through and combing through tweets and says who says nice things on where they live right? >> yeah, and so there's a little bit of a bias there which if you're in the tech world which is many people on the west coast you should have a pretty good idea -- you shouldn't say anything bad about your employer on twitter, you know. there's sort of this idea that everyone is listening and everyone is watching so you do have to be a little bit selective, but then there's also it feels -- it's beautiful here in february beautiful here in january. we're not getting any rain which for better or for worse. >> yeah. >> and the tech economy is booming. >> ari you're out on the west coast. you're happy in your job out there. you love it. you love it. >> i definitely wouldn't tell you at this point if you're not. got a brand new bureau here in san francisco. >> got a beautiful new bureau. i forget what you call it. >> one market. >> he's smart not to say
anything. >> where are people unhappy? who is unhappy? >> sort of standing in the area right here. the northeast is generally the worst. >> really in. >> if you go to cnbc.com you'll see all of the information and my colleague nick wells wrote it up. it's not just new jersey. it's connecticut. it's pennsylvania. it's new york. it's delaware. it's west virginia. it's all these places out here and especially the finance industry. if we look at tech versus finance. >> they hate it in delaware and hate it in west virginia. >> east coast is not the place to be. >> my goodness they don't like their jobs in virginia. >> like it a little bit better in new jersey so you made the right moves. >> sectors. >> sectors. >> tech people are happier than finance? >> by a ratio of 4-1. tech people love their jobsmore than they hate it and finance people hate their jobs a lot more than they like it. >> check cnbc.com for the full story. go to powerlunch.cnbc.com.
we here are the happiest place on world, mandy. disney has nothing on us. >> i've come all the way from australia. and housing now it's all about location, location location. let's get to sharon epperson with a look at the best cities for retirement. >> may be surprised. definitely not florida. the weather isn't the only thing to consider when you retire. the cost of living the health care system and the new list of best cities to retire and no matter what big city you're coming from your dollar will probably go further.
there's prescott arizona, ranks number three, reasonable cost of living, low crime rate and a great sense of well-being which brings the historic city in the grand canyon state to be one of the top places that people want to retire. strong health care system very low crime wait the washington, d.c. suburb of arlington and alexandria virginia number two on the list and it's also very walkable. very good sense of well-being as well among the residents there, and that ranks it very high on the list, but then you have to think arizona is clearly the place to be because the metro area in phoenix, that includes mesa, scottsdale, that tops the list, warm weather in the winter, low tax rate, relatively low cost of living. that's the best city to retire
according to bank rate, but then there are those cities you really don't want to be in when you're 73 because you have high taxes and sky high rents, on a fixed income. your dollar won't go very far in the big apple and bank rate ranked new york as the worst city to retire. mandy, i have to tell you that bank rate is not alone. a lot of financial advisers tell you want to look at the cost of living health care and look at taxes. how do you do it?
they have a good calculator on their website, painingrate.com, bestplaces.net to look at how much you're going to spend. >> when people think of retirement, at least when i think of retirement, i've got this picture in my head of palm trees of florida, palm beach kind of thing. didn't make the list? >> didn't make the list. a lot of people are concerned about the quality of health care they are getting there so that was very surprising, most of the florida cities on the list were below average for health care. >> interesting. >> thank you very much. always educating us. and for more on the best and worst places to retove slightly higher.
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we bring home the bacon every day on "power lunch." a semi truck carrying some 2,200 baby pigs overturned today just east of dayton, ohio. police say the truck driver lost control, listen to these little piglets, went into a guardrail and eventually overturned and sent hundreds of the pigs running into the nearby woods. the fire department, law enforcement agencies were called then to the scene to help round up the loose pigs. some pigs unfortunately, did perish in the crash. two people in the truck suffered injuries and were taken to a local hospital. mandy? >> listen to the little porkers squeal. okay. the reverend franklin graham is moving money out of wells fargo and it is causing quite a stir. hampton pearson has that story live from washington. why the move? >> hi, mandy. the reverend franklin graham is calling on christians to boycott corporations that promote homosexuality. now the evangelist son of the
late reverend billy graham says he's moving all of billy graham's ministry's funds, estimated to be in the hundreds of millions of dollars out of wells fargo because of the bank's recent ad featuring a lesbian couple learning sign language in anticipation of adopting a child. ♪ >> wells fargo says they stand by that ad and in a statement citing its support for the lgbt community, the bank says our advertising content reflects our company's values and represents the diversity of the communities we serve. graham's call for a boycott comes in anticipation of the supreme court ruling on the constitutionality of gay marriage before the current term ends later this month. tyler? >> hampton, thank you.
a hospital in new orleans is starting to use technology to treat patients. bertha coombs has that story. >> coming up on "power lunch," i'll tell you how one hospital is giving a new twist to an apple a day keeps the doctor at bay. they are prescribing apps to help keep their patients healthy. i'd like to put in my 15-year notice. you're quitting!? technically retiring, sir. with a little help from my state farm agent, i plan to retire in 15 years. wow. you're totally blindsiding me here. whose going to manage your accounts? this is a devastating blow i was not prepared for. take charge of your retirement. talk to a state farm agent today.
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a big tuesday show coming up including whether stocks have finally reached a real crossroads six years into their bull run, plus a former banker turned author on how to restore america's middle class and an analyst brings some big-time small-cap stock picks just for you. new names ahead, guys but first back to tyler. >> thank you very much bri. can't remember to take a pill? i take lots of them in the morning. i seem to be able to remember. of a certain age, there's an app for that. doctors at oxnar hospital in new orleans wants to prescribe them for you. bertha coombs is live with that story. >> reporter: welcome. this is the version of a genius bar manned by braden will hook people up with their prescription apps that they can choose here on an ipad. even has gear and things to help track their fitness and blood
pressure. the main focus right now is to really help patients deal with things like diabetes heart disease and chronic problems like hypertension. in fact they have launched a trial program where they have bought apple watches for their hypertension patients to try to engage them even more directly every day to do things like take their medications, and patients say right now it's really made a big difference. the results have been striking. >> we're seeing at the end of 60 days over 60% of our patients are getting under control, and that's in a very short period of time. >> reporter: for patients like john hogue being able to quantify their progress and get coaching is really something that makes them feel incredibly supported. >> with the new digital team they have a pharmacist for instance, that called me the other day. we were reviewing our
medications to see whether i needed to up them or how i wanted to approach it, and i think the exciting thing it's more of a collaborative effort. >> reporter: you can read more about what they are doing here with mobile apps on ochsner on cnbc.com. guys, back to you. >> bertha thank you very much. an interesting couple of hours ahead as we move to the close with the markets up just a little bit. >> yeah. let's see whether or not they can keep on gaining. meantime, brian it's over to you. >> thank you very much. >> it is now 2:00 on wall street, 1:00 in pascagoula mississippi. bond yields and oil are back up. you're watching the second hour of "power lunch." i'm brian. melissa lee is at the stock market and we'll kick things off with a crucial and simple question for your money. are the markets at a crossroads? bonds getting hammered lately and stocks getting worrisome to
some and oil headed back towards 60 bucks a barrel we'll hit all three starting with oil. right? not all of us buy stocks but almost all of us do use some refined product. crude oil up right now more than 3%. it's just pennies from that $60 barrel mark. this has many of the oil-related stocks higher as well. the offshore drilling companies are actually the best performing subsector that have group right now, and one analyst is calling for a huge pop in crude coming up soon. find out more about his bold call on our website powerlunch.cnbc.com. meantime from oil to bonds, because the benchmark ten-year treasury bond has been making a huge move lately. yields soaring over the past few months. now that has surprised many, but it has not surprised your next guest, jeff rosenberg of black rock joining us now. you've been one of the few major strategists out there calling for higher rather than lower yields. what have you seen that has been right? why do you think yields have been climbing and will continue to do so? >> well there's two i think big
reasons behind the increase in yields, brian. the first is that we're unwinding a lot of what came into the bond markets globally at the end of last year. you led your story off with oil prices. well, last year you know that the story was big declines in oil prices and that reduces inflation, and that fed a big deflationary fear. globally that pushed down interest rates, and what we're seeing now as we work through this part of 2015 is that inflation fear is really overstate. we're seeing signs of rising inflation around the world, and that's pushing straits higher. inging interest rates higher. that's the first thing. >> let me if into that a little deeper. >> yeah. >> are we more than likely to hit 3% on the ten-year or go back to 2% on the ten-year? >> you know, 3% on the ten-year would imply a much bigger move for 2015 than we had expected so i'm not quite sure we're going to see 2015 or see a 3%
level to that extent and we have had many fits and starts along the way so i wouldn't rule out seeing 2% here again. our outlook is however that by the end of 2015 we think we're going to end around -- sorry, around 2.5% and that means a little bit higher interest rates from where we are here but that path isn't going to necessarily be in a straight line direction. >> jeff you see rates here in the u.s. going higher. what happens to germany because what i think is of note because rates started to rise in germany as well as the united states in april or so and there's no sort of divergence in these two markets and one would think there would be. >> yeah. big theme coming into this year was really what we saw at end of last year which was this idea of divergences and really economies have been moving in opposite directions in the first quarter. the u.s. was weaker. germany and europe was stronger so we've had some surprising moves in interest rates here. when we look at what's going on
in germany and core interest rates in europe they are all bouncing off of their low points that were reached earlier this year, and i think that goes back to the first theme on inflation. european inflation rates are turning upwards. we're not talking about big levels of inflation, but we're talking about unwinding a lot of fear of deflation and that means higher interest rates in europe. >> we've got your views. tell us what to do now. give us actionable advice in your rankings. you underweight almost every fixed income instrument except for two. secure ties to asset and treasury inflation protected security better known at it. i.p. -- better known as t.i.p.s. >> that's a second option on the second piece on the brink. in fixed income we don't want to be reaching for yield here in front of a turn in fed policy. what we like are areas with better valuations that have more cushion in their pricing to
buffet some of the rise in interest rates that we see. securitized assets that reference assets in the fixed income market linked to housing and housing-related sectors in the market and t.i.p.s. not so much because we see huge inflation but the valuation and relative value of it. i.p.s. look very attractive in terms of safe assets in your portfolio. >> jeff rosenberg of black rock thank you. >> thank you. >> one industry group is getting a lot more attention these days transportation stocks and some traders think they are signaling a bigger pullback ahead. dom chu is all over that story, dom? >> everybody who thinks about this theory dow theory this, idea that maybe transportation stocks can tell you where the prodder market is going to go. if you take a look at the broader market as represented by the s&p 500 and the dow transportation average, you can see over the course of the past year they have in the beginning tracked relatively closely to each other, and all of a sudden we've seen this divergence. that's what you're seeing right
here more recently. does that fortel some kind of a move lower in the broader market overall? well, our data partners took a look at some of these numbers. cnbc pro and the analysts took the numbersñi and looked at maybe all the occurrences that we've seen about where we've come in terms of 5% drops to the transports. over the past ten years there's been a 5% drop in the dow transportation average 31 different times. now, out of those 32 times, the s&p falls along with that particular move in transports 81% of the time so more often than not and the average move for both of those indices is about 5% to the downside. that's over the past ten years, 31 occurrences, so it's an interesting move here. that's why some traders are very kind of skeptical of these levels that we're seeing in the stock market without any kind of a deeper pullback. now, to be fair, if you take a look at the dow transports and the s&p 500 there has been this area where the dow ñitransports in orange have outperformed the overall market up until this
point here so maybe this pullback is just getting back some of that valuation. there are a number of different reasons why this theory may not work, but, still, it's a caution flag for a lot of traders out there, of course, more on that story here to come. guys, melissa, back overrç)uá p r(t&háhp &hc% >> thank you, dom chu. the overall airlines lower by about 1.7%. there is one bright spot though that we do want to point out. american airlines is in the positive and united is struggling to go green. take a look at those bright spots witness the transports. read more aboutñi what the transports are telling us on our website at powerlunch.cnbc.com. >> given dom's excellent data are stocks at a cross-roodts? could they drop or rise more? bring in a guy quoted in that cnbc.com story, chief investment strategist with janney investment. do you believe it's foretelling a market drop to come? >> as a single signal, no brian. i think they are flashing a
warning sign as dom has said and you see this kind of disparity correct to convergence in the past which would lead you to believe to look at other things in the market to provide some convergence to what the dow jones transports are providing a forward-looking statement about relative to whether you think equities may pull back or not. we look at market breadth and others, looking at the number of stocks trading above 50 and 200-day moving average and those confirm what we're seeing in the transports, there's very cautious and selective pike taking place in the s&p 500 at the moment. as a consequence it looks more ripe for a pullback than it it is in advance. >> dow theory has been around since the telephone effectively, mark, so i understandñi it's a wise old tell. however, have we maybe been fooled a little bit thisç"time because of the big drop in oil that's kind of screwed up the view of the transports, and there's this extraneous factor that we normally don't have meaning a 40% drop in their
primary fuel source over the last six months. >> i think that's one of the things that you have to be careful about looking at the transports and looking at what it's isolating and suggesting and this the cause and effect scenario than that. i think there's some idiosyncratic issues compared to the subcomponents within the dow transports which suggests what you said which is you have to tees that out from the data and perhaps it's not provideing the kind of signal it's historically done in the past. again, you want to look at it in conjunction with others that are confirming the same and, therefore, a broader set of internal market indicators do confirm what the transports are signalling giving you pause for at the moment the broader equity market either in the midst of a correction by time or price and it's yet to be resolved. >> let's get down to brass tack. you're looking for a pullback and you're sayingñr it could pull back, the s&p 500, that is down to as much as 2000 which would be a 3.9% pullback from current
levels. which stocks though or sectors would you stick to even with the threat of this potential decline? >> well, certainly we're looking for not a bear market but a corrective phase that we think should be bought as opposed to necessarily be paralyzing investors at the moment. within the market we look for where there's valuation support, and in a market that's pretty fully priced it's a pretty rare situation to find but within the market we do like financials, particularly the banks, given the tick up in yields we've seen recently which ought to translate into better net interest margins for the big money universal banks. in addition to that we like health care which actually has defensive qualities. obviously a huge demographic tailwind and you can find good opportunity for both yield and/or valuations that look attractive. a company like gilad, for instance, makes sense to us in terms of it being a very cheap biotechnology company and pockets within the consumer discretionary area look
appealing to us, particularly the home building where you see improvements in the housing recovery continue and i think that momentum will continue going forward as it now exceeds housing starts and the supply-to-demand balance won't last forever. >> home builders banks and health care, it's been a pleasure. appreciate it. meantime auto-related news ceo mary barra meeting with shareholders, gm down 3.5% over the past year and cnbc's phil lebeau looking at what's next. >> a lot of speculation regarding two important stories for general motors starting first off with the ignition switch recall issue which she addressed at the shareholder meeting. first of all, there are reports that general motors may be wrapping up a doj investigation or the doj may be wrapping up its investigation into criminal charges perhaps by the end of the sum we are a large fine. mary barra said they are cooperating fully with federal investigators but anything else in terms of timing potential pleas, et cetera is pure speculation. she also had no update regarding
the ignition recall charges which they have been updating over the last year in terms of how much it will be costing the company, and the other issue which is getting a fair amount of attention is returning capital to investors, and in particular the suggestion that perhaps general motors and fiat chrysler should consider a merger. here's mary barra talking about why at this point that is not in the cards. >> we have scale. we've learninged the appropriate opportunities where we can benefit from co-development. that's something we've been doing for several years, and so when i look at it the focus that i have is truly on the general motors shareholder and making sure we execute our plan. there was an e-mail that was very much vetted with management and our board, and after we reviewed that we are committed to our plan and we think that's in the best interest of general motors shareholders and we have strong support. >> that's mary barra at the gm
annual meeting right beforehand e-mail sent by the ceo of fiat chrysler to her saying perhaps we should look at a merger. no reaction from the stock today, but take a look at both of the stocks in the last year. gm basically up 1% flat in the last year but look at fiat up 32%. brian, the reason fiat is up is because in part especially in the last couple of months sergio margion has been banging it on the table saying we need consolidation in this industry and he is pursuing it doggedly pursuing it. he would like to do it with general motors but so far at this point. >> yeah. >> gm is saying we're sticking with our plan. we do not need fiat chrysler. >> fundamentally, phil how much of that stock run could be thanks to a four-letter word based in toledo? jeep, strong baby. >> oh, a lot of it. a lot of it, absolutely. that's the crown jewel and that's what he has as average in order to entice other automakers
to make a deal. >> phil lebeau thank you very much. now to eamon javers in washington, d.c. he's got a news alert what. are you looking at bud? >> looking at the white house press briefing room where minutes ago white house press secretary josh earnest interrupted the briefing in progress and told reporters that the secret service was asking them to evacuate the briefing room and now that briefing room has been evacuated. the secret service uniform division officers are moving about the briefing room now. we can see the live feed of what's going on in that room. no indication exactly just yet as to why this briefing room has been evacuated. as of now, very unusual to evacuate during the middle of a briefing depending on what kind of situation is going on though. that could be a necessary precaution. this comes just about an hour or so after we saw a similar evacuation up on capitol hill as there was a bomb threat called into the senate dirkson office building, that building partially evacuated and saw a bomb squad moving true some senate hearing rooms on capitol hill checking under chairs and desks and moving through
methodically methodically. no indication if those two incidents are related to each other and right now we're monitoring the situation where the briefing room has been evacuated and if we have more we'll bring it to you. >> don't quite leave because we're showing our viewers a live look at a press room wrefg and a bomb-sniffing dog. correct? this was during the normal daily briefing, correct? >> during the normal daily briefing. white house press secretary josh earnest was interrupted by the secret service and said we'll have to resume later and pulled up his briefing book and everyone filed quietly out of that room and what you're looking at is uniformed officers of the united states secret service doing their job. >> so to be clear then we don't know what happened but we did have a call to capitol hillñr earlier today. let us assume that a similar call may have been made to the white house. the timing of that was not accidentally. i know i'm speculating out a bit but if this was indeed a call it
was done in that small window of time where that room would have been filled with the nation's white house correspondence >> that's correct. whatever happened happened when the nation's and the brief's room cameras were atowned to it. these incidents have become increasing by common in washington the last past weeks and months. a lot of bomb threads and fence jumpers, all kinds of -- no indication that the incident on capitol hill which was determined to be false by the way, is related to this incident happening an hour or so later but we do see an effort by police to clear that situation. i don't have any information on what additionally you'll see, a
suspicious package, for example, at the northwest gate where employees go in and out, at this point we don't have information on what's been evacuated. frequently these things can be 15, 20 minutes until the secret service gets a handle on the situation and figures out what they are dealing w.in the past we've seen robots come out to deal with potential suspicious packages. >> and this comes just a couple of days after a series of bomb threats were phoned into a variety of airlines out there, and even though nothing has come of anything so far, this is a clear reminder eamon, is it not, i know you cover national security extensively, that pretty much anybody with a phone at this point can dial up somebody, cost taxpayers millions of dollars by causing extra security and lost productivity. this is happening. it appears at least from our vantage point, talking on the news every single day with increased frequency. >> this is not -- thankfullying this has happened but also not
inexpensive? >> no, it's not. very disruptive here in washington and around the country when you talk about the incidents involving the airplane. the hearing going on up on capitol hill was a hearing about the potential for terrorism and the failure of the shy and paying attention of detail as they pass through the security checkpoint. that an ironic bit of timing up on capitol hill. here what you're seeing is a deserted white house press briefing room, and can you see the camera has panned back from the tight shot of the podium what. you're seeing is the whole room. a few minutes ago we saw the secret service moving about that room. now we see exactly nothing going on. >> eamon, thank you very much. nothing happening now but we just got video in. this is the video of the moment it happened with josh earnest. watch all right.
so to be clear what we're watching and if you're on the radio i'm going to explain this to you, the white house something was alert or josh earnest got a notice from secret service or something was phoned in to let them know it was time to go. the white house press briefing room was evacuated. this is video from just moments ago. you can see the press sort of orderly filing out. again, it comes after an earlier phone threat into capitol hill as eamon javers reported. we had a series of phone threats, bomb threats for airlines. you remember last week and any time this happens, security ramps up and taxpayers are cost millions of dollars. the white house briefing room is evacuated. we'll keep a continuing eye on this developing situation at the white house. "power lunch" will be back right after this.
minutes ago something occurred at the white house in the press briefing room, and can you see press secretary josh earnest acknowledging some kind of comment, walking off and that is the national white house press corps, international press corps as well. you can see on the bottom right peter alexander of nbc news as well. something was phoned in or alerted to the white house press briefing room that's cause it had to be evacuated. that is a live picture right now, and can you see members of the secret service who are scanning the room. moments ago we saw bomb-sniffing dogs walking through the press briefing room so although we don't know exactly what happened the appearance of secret service and the bomb-sniffing canines made it pretty clear that some sort of a threat obviously had been alerted to the white house. eamon javers bringing us that news a moment ago. we bring back in eamon javers right now. we can see a little more activity in the press briefing room. eamon, you're intimately familiar with this room and the surrounds. where is this room for our viewers inside of the white
house? >> this is just inside of the white house, brian and if you're standing in front of the white house looking at the fountain and the main front door of the white house, what you'll see is this this is part of the west wing to the right of the main part, and it appears what they are doing is covering the cameras now as we see this camera moving about. it looks like what we just saw was official blocking camera access to that room and now we've lost the shot of the press briefing room but the press briefing room, the main pillars, outside of the residence actually in the western part of the white house complex itself. it's below those trees to the white of what you're seeing and the non-chalance there you saw of the white house press pool as they were being evacuated from the room and of josh earnest and some. other press aides there, gives you a sense of how often this does happen on capitol hill and at the white house. people are fairly used to this but this kind of level of evacuation during a briefing is certainly unusual. one of the things that we like
to do when there's a security situation like this is check on the exact whereabouts of the president. the most recent pool reports that we have with the press pool who travel with the president said the president returned to the white house at about 12:42 so according to the information that we have available to us right now the president is in the white house complex there. that you're looking at right there is a live shot just outside of the white house press briefing room. the awning and the two metal pillars that's the actual entrance to the press briefing room itself and what you're seeing is a fairly calm and orally scene there as secret service uniform division officers inspect the area. so this is something that we do deal with in washington from from time to time, brian. it is, as i say, not unusual, but reporters will be trying to make an effort here to figure out exactly what's going on and what it was that triggered this evacuation evacuation, and we'll have to figure out exactly how much of
the white house complex itself has been evacuated at this point. prion it is. >> and it's difficult for me to sort of assume why -- why we would have been evacuated when there's a couple factors here. this was not a normal room in the world. this is a room where to have access to it either as a member of the white house press corps or secret service member you are vetted very very thoroughly. packages are scanned. everything is checked. random individuals cannot get into this room so if somebody is presumably called in some kind of a threat one does wonder what the secret service may have viewed the threat as coming from because every single person in that room is going to be are they not, eamon, well known and well vetted to white house security? >> typically that's exactly right. it takes a long time to get what's called a hard pass which is a white house pass that allows you access on a daily basis to the white house complex. there's a security background check. i've been through it and a lot of colleagues here in washington
have been through it to get access to that facility and then from the shot that we're looking at here to the left of where that officer it would the northwest gate that leads out to pennsylvania avenue which itself over the past 15 years or so has been closed off to traffic. there's a security hut there, so anybody who is entering the white house press briefing room not only has to be vetted has to have a pass and has to have permission to get on to the complex, but they also have to go through an airport-style security every single time they go on and off the complex. >> exactly. >> to your point, yes, every singlite them a comes into the white house complex is typically scanned and secured before it gets anywhere near the white house building itself. what we're going to try to figure out here is exactly how much of the white house complex has been evacuated. it may be that this is not focused necessarily on the briefing room itself but might be more of a white housewide threat that the secret service is spending to and they therefore, moved reporters out of the briefing room as they were moving everybody else out of the facility.
when you look at those officers they are moving pretty casually. they don't look alarmed. doesn't seem to be a real sense of urgency right now, but we'll have to find out more brian. >> that is a great point. i know you're onçó story and working the phones. let's bring in jeff lanza, a former fbi agent and, jeff, the only piece of information that we're going on for certain is in a the white house press briefing room has been evacuated. from that little bit of information as a former fbi agent what are you able to discern from this? >> well it really depends on what else is going on there in terms of evacuations. now if it's just the press room makes you wonder. this is unprecedented in terms of evacuating that particular space because as your previous -- as your previous guest says those reporters are vetted. there can't be any issue with those particular reporters, but there must be some piece of information, something that the white house has received, the secret service has received that relates to either a broad threat on the white house or a threat involving that particular
group. the only thing -- >> yeah again. we're looking at live pictures of the white house of the press briefing room. >> eamon, i think your microphone is still open. >> sorry. >> don't worry about it. you were working that hot file and do appreciate it. you can see the cameras are sort of being adjusted right now. perhaps they don't want video in. again, jeff lanza, former fbi agent on the phone, and that is also the point that we tried to make, jeff. this is not an ordinary place in the united states. this is arguably one of the most difficult if not the most difficult building in the united states to get into so what type of threat do you think could have been called in phoned in packaged in, whatever it is that would cause this kind of reaction? >> yeah. well it could be some information on someone that's gotten through that vetting process, maybe there's stuff going on with that particular process. i don't know. that's just conjecture at this point. the room -- the room's got to be cleared. the room is not going to have a
problem so it's got to be someone in the room you know, someone that's already vetted doesn't mean something can't happen. that would be may only thought but it's difficult to know for sure. >> eamon javers told us earlier today that capitol hill had some kind of a threat phoned in as well. a few days ago we had a number of bomb threats phoned into a variety of airlines. thank god nothing has come to these things so far but we live in an era where it's pretty clear. anybody with an e-mail account, social media or telephone is not only to phone in threats but disrupt, a workers, lives of many incite fear and cost taxpayers millions of dollars. why is it that we can learn everywhere we go on the internet we can know if our friend is calling us at 2:30 in the morning but we seemingly can't track down these random phone bomb threats that have been increased in frequency. >> unfortunately it's just so easy to spoof your caller i.d. and to hide the initiation of
where it a phone call is coming from if that's what it was in this case and in this day of technology it's ettie to camouflage these types of trips which causes problems for law enforcement officers. >> we have the threats and have to take them seriously i would assume so from a former fbi perspective so when things like this happen what is the first thing that then goes on at the secret service, at the fbi, at the cia? how long lasting are the reap cautions? >> well, they have to determine the voracity of the threat and they are not going to move people out of a room like that and create a national news story unless there's some vossity, some believe that it could be an issue. they can cut through the ones that really aren't -- there's no indication that that's really going to be or have any basis in reality so they are moving people. there's an issue there and the next thing i want to do is try to track back to see what the issue is and if they can track back to the person responsible
even though it's difficult to do in this day and age. they -- that's going to be their first step. >> yeah. you know having just actually finished brian brought's excellent new book "days of rage" and go back to the '70s, jeff, and there unbelievably 2,500 domestic bombings in 1971 and '72, an airline nearly hijacked once a week. america arguably safer than it was 40 years ago. how seriously do we need to take these types of threats because there is that sort of crying wolf theory where because they seem to be so common is there a risk of complacency on the part of the american public? >> well you can't be complacent where you're a law enforcement officer or you're protecting the white house and the president. you can't respond to every little thing that comes up but you need to take everything seriously. the first course of action is to determine if this is a credible threat and if it is we're going to move people and protect people in abundance of caution. we use that term over and over again. you err on the side of
protecting property and people and then you deal with it later. if they are moving people like this, you know there's some credibility to what's happened. >> jeff lanza, former fbi agent. appreciate you joining us by phone on short notice. thank you very much. >> you're welcome. just to recap everything for our viewers and give you an market update before we head to a short break. we had 10 minutes, 15 minutes ago the white house press briefing room was evacuated, some sort of a threat and that is the video, josh earnest the press secretary the moment that this occurred saying something inaudible to the group. everyone gets up and files out of the press briefing room. some kind of a threat obviously received by the white house. earlier today there was a threat or threats made to capitol hill. no reaction in the market. the dow is up 36. the ten-year yield is up three bips, what happened before this happened at 2.24%. keep you updated on the story. we'll be right back with more cnbc and "power lunch" right after this.
crude oil at $60.01 as it settles natural gas up 5% to $1 $1.85, still historically inexpensive and natural gas in a bull run the last two sessions a reminder a situation at the white house. the white house press briefing room and perhaps other parts of the white house have indeed been evacuated for some kind of unspecified threat as eamon javers reported. the president is believed to be in the white house at this time. more on this developing story and more on your markets when "power lunch" returns right after this.
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welcome back to "power lunch." i'm eamon javers in washington where the all clear has been given at the white house and the white house press briefing room which was evacuated just a few moments ago after a 1:53 p.m. telephone bombçó threat to the white house concerning the white house press briefing room, but as you can see, reporters are returning to the briefing room right now, and they are getting set for the re-emergence of the white house press secretary josh earnest. the white house secret service saying as a precaution the briefing room had been evacuated. the evacuation was limited to the white house press briefing room and did not affect any other areas.
sweeps were ongoing at the time they issued this statement a few moment ago but now we do have the all clear. a little bit of a jittery day here washington after a bomb threat on capitol hill similarly forced the evacuation of a capitol hill hearing room. now we seat evacua@ clear up on the white house complex as well. prion. >> if you would like to lay odds eamon on first few questions i'm your betting man. >> i would imagine josh earnest is huddling with the secret service to give them the answer to give them to the press corps which will ask the questions in a few minutes. >> we'll let our audience know as well. >> you bet. >> back to markets now. it is a time for trading nations, do they ever day and today we'll look at the semiconductor sector. no doubt a rough ride. philadelphia semiconductor index down 4.5 this months. we have a specialist in macro strategy and erin gibbs with s&p
capital iq. now that title out of the way, why the weakness in semiconductors especially given the number of big deals that we've seen really in. >> and some really good sales in recent months. i see this more as coming off of valuation highs. they were really at -- over their one-year peak trading above 16 times forward earnings and have come down to the middle range and could go down another 5% before we would see them as a good value but overall semiconductors are always dealing with choppiness and then demand and then having to control their supply but they are very much tied to global gdp growth. still decent growth coming out of the u.s. as well as europe, and we see a longer term up trend, but there is going to be volatility within that trend. >> boris, they have been weak and they have been volatile. do you see opportunity or a big flashing red sign and reason to avoid the semiconductors? >> well, you said it. there's been a tremendous amount of m & a activity $52 billion
to date so far and i think that will only continue because ultimately semiconductors is a very mature industry and very capital intensive. part of the reason why you're getting a little bit of nervousness is because you're having a change in monetary regime now and people are worried that easy money is going away, a little difficult to do m & a and a lot more expense i have to do builds so for those reasons you have a little bit of a selloff but ultimately the industry has to consolidate meaning the action will be there which means more buying on the dips. >> guys, have to leave it a little short. thanks so much for joining us on trading nations, two more segments on tradingnation.cnbc.com. and we're back with more of "power lunch" right after this. >> now the latest from tradingnation.cnbc.com and a word from our sponsor. >> many people say don't fight the fed but don't fear the fed. if you're a short-termñi trader before take on any new positions
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let's listen in. >> at 2:00 today a telephonetic bomb threat concerning the room that we are now all in was called into the metropolitan police department. the police department contacted secret service official who determined that for the safety of all of us they needed to evacuate the room and to sweep it. fortunately here at the white house the secret service maintains the resources that are necessary to quickly make the room safe and make sure that it's safe for all us and they did that quickly and now we're ready to restart. before i get to your questions i used our brief respite to get us some more information, roberta, in terms of answering your previous question about encryption, and i can tell you -- >> again, the white house press briefing has resumed after briefly being evacuated, and "power lunch" will be right back after this. stay tuned.
i like your place. oh, thank you, make yourself at home i'll be right back. hm. she's got x1. alright. huh, hm, ohh... monster? she seemed so nice at dinner. i'm back! ahh! uhh, hi... heyyy, whatcha doing? ohh, just... watchin' law & order. unless you want to watch something else. awww, you're nervous. that's so cute. ♪ >> shares of tesla trading higher ahead of its shareholder meeting. is there more room for upside?
guys good to see you. drew, we stated it. the stock had quite a nice run. what are you looking for elon musk to say at the shareholder meeting for the stock to take the next leg higher? >> i think this company doesn't suffer for ambition in its agenda agenda. we need affirmation and clarity on the agenda we know which is the energy business and the model x launching. >> you are looking for an update on the model x. what do you want to hear? the production lines are up and running and on time for a q-3 launch? >> i don't know i care what the details are, but rather the affirmation. we love to hear them say they will produce model xs in the third quarter. our perspective on the stock has been one giving tesla and musk
more leeway than i think many do. they maintained a leadership that allows them to continue to penetrate this $1.5 trillion auto industry. that's all i need them to keep doing. >> jeff that leeway is reflected in the valuation of the stock. you take issue with that. >> from a short-term perspective, i do push back on drew. why do i push back? we need to digest this x. the x factor. we don't know how you are going to go from boutique vehicle company and transition to this lower x as well as everyday electric car. a lot of rubber has been burned here. i'm looking for a 10% drop. two hours from now elon musk
will talk. i think the drop is imminent $30 lower. >> when you say transition to the lower x, are you talking about the 3? >> it's all about the valuation we are pricing today. would you agree with that, drew? >> no i don't. you have two revenue streams. that is energy which is a multibillion dollar opportunity they are swimming in demand for. the x is an opportunity to double the size of the company near term. then the opportunity jeff is referring to about a year from now when we start to see details on the gen-3. it's layer upon layer of growth. >> going to leave it there. shareholder meeting kicks off in
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tomorrow here on "power lunch." >> netflix meeting with shareholders. big stock split is on the table. can you make money buying netflix or time to take your profits and run? rob, a lot of people made money in netflix. can they make more or is it time to take profit off the table? >> no i still think there is considerable upside in the years ahead for this company. i think over the next four to five years i'm looking at a company i think looks at $100 billion market cap. near-term moves are always challenging. subject to big revaluations up and down. and anticipation of a stock split. it's hard to trade those. buy and hold the secular winner is my recommendation. >> forward price-to-earnings, $1
5. amazon $162. there are other comparables. do valuations even matter? >> they do. >> then why doesn't $185 time forward earnings matter? >> they are taking all the cash generated from the domestic business and putting that into expanding globally. the near term earnings valuation really doesn't capture the value being created in expanding this asset. >> which is great. i hear the international opportunity, and i know it's big. however, how do we know that the international uptake will be the same as it is in the united states? why do we assume those in europe and asia are going to embrace netflix the same as american consumers have? >> by our estimates, the developed economies they launched today, being the uk canada netherlands and nordic regions, their penetrations outpacing the u.s. by about a year. there is still considerable upside. over the top penetration
globally will expand consumption of television beyond what pay tv systems could do for the simple fact it's cheaper. >> there you go. real data back. rob sanderson, it's a pleasure. >> i know you've got netflix, tesla, what else? >> will be interesting to see if netflix splits its stock. at 5:00 the big msi decision. we'll get that decision. we'll trade that decision tonight. by the way, also tesla shareholder meeting at 5:00 as well. >> we look forward to that. thank you. big show tomorrow. jack ma. we are also at a janus capital event in california. and it means that guy, bill gross. california, here we come. weather permitting at newark airport right now, apparently. >> safe trip brian.
godspeed. >> thanks. big show. jack ma melissa, janus, all tomorrow. thank you very much. more on the markets and more on that scare at the white house press briefing room. "closing bell" starts now. take care, everybody. welcome to "the closing bell." i'm kelly evans. >> i'm simon hobbs in for bill griffith. we are expecting the latest inventory numbers in over an hour. >> move over lipitor. there is a new class of cholesterol drugs. we'll bring you the panel's decision coming up. >> when elon musk speaks investors listen. he will take center stage of the shareholder meeting later. we'll tell what you to expect and how