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tv   Power Lunch  CNBC  June 10, 2015 1:00pm-3:01pm EDT

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there's been speculation that maybe pelts is involved, but i think the whole group is ready to go after taking a pause after earnings. >> baxter unusual call activity. i bought that one today, judge. >> good stuff. thanks for watching. we'll see you tomorrow. "power" begins right now. thank you very much. we are in market mode alert today. stocks are up very big today. welcome, i'm tyler mathisen. >> i'm melissa lee in for mandy drury today. a big rally on the street the dow up for the first time in five days. the nasdaq up the first day in three. today's big move being led by the energy sector. that is being fueled by big move that we're seeing in the price of oil on the back of inventory data. look at this insurers hitting record highs. financials across the board are strong today. bob pisani joins us from the action of the nyse floor. >> this is a very broad based rally. what's that mean? i mean 5 to 1 advancing to
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declining stocks. all ten sectors in the s&p 500 are up. now i'll tell you what broad based. it is very simple. whether 8 of the 10 sectors are up more than 1%. that's a broad based rally. that doesn't happen very often. what's up here is tech financial, energy, consumer discretionary. if you put those groups up. those are all up more than 1%. we also have materials up as well. defensive names like health care are lagging but not much else. the s&p 500 intraday we started on the up side and just kept moving up. that little blip around 11:15, that's when headlines were out -- didn't really have details -- that angela mer kael might be interested in making a deal with greece. that juiced the markets a little bit, particularly moved up in germany. we were moving up throughout the day. you can see the move up there and the effect that had on the german stock market that closed near the highs of the day. another way to judge a broad-based rally, stocks are rising despite higher interest rates. yes, we are at new highs here on
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many regional banks. huntington keycorp., bb&t pnc financial. some of the big money center banks are also at 52-week highs. citigroup, wells fargo morgan stanley. these are 52-week highs for them. not just they are moving up to new highs. stocks that would generally not benefit from higher rates, interest rate sensitive, are also moving up. that's what i mean when i say a broad rally. everything is going up there. utilities, telecom, reits, these have all been down about 10% from the recent highs. like transports we've highlighted that. what's missing? what's missing is volume and enthusiastic buying. it's still not there right now. that's one thing we need to see a little bit more of. a lot of people down here waiting for the results of a 10-year auction. that could move the markets in the middle of the day. big moves in the bond market, too, today. moments away from a key 10-year auction. we'll bring that data to you when it hits. yields rising to eight-month
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highs now. yields on the german 10-year bund hitting 1% for the first time since february. this comes as bond giant pimco slashes its government bond holdings by two-thirds in anticipation of a rate hike. but retail investors are still piling in to bond marketsfunds. go figure. yields are up and so are stocks. ron insana why? why on a day where we get good news is the market moving up when lately when you get good news it's tendsed to move lower. >> maybe good news is good news. maybe the possibility of an extended greek bailout which would take pressure off european stocks which have been dragging stocks down. the process as quickly as it is going with rates moving up rather dramatically here and abroad is a bit unsettling. but we may be normalizing to a certain extent. it may also press a token rate hike by the fed come september. maybe it is a one and done type
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operation so the markets are maybe anticipating that. >> let's talk a little bit about something we've talked about and really came to the fore earlier this week that's the transports and divergence between them and the dow. transports yesterday basically in correction territory, down more than 10%. i know it is something you have talked about. where do you stand on it now and does that divergence suggest that the broader market is topping? >> you can make both cases right now. on one hand it looked yesterday like the dow was starting to catch down to the transports which would be more than a yellow light. now we've got them both reversing and moving higher. and so the transports are coming off the lows. . spread between the two has narrowed a little bit for the year to date. that's an encouraging sign. transports really have to recover. if you are a he a dow dheertheory proponent, the two have to go to new highs together to reverse this i would say yellow flag right now. it hasn't become a full red flag
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yet but we just keeping watching it every day. >> i just raise it because you were talking about it a month or so ago. then it has come into -- >> look it is partly contingent -- >> jim cramer pointed out, i think correctly, transports have been held hostage, to a certain extent particularly airlines to oil prices. news alert in the bond market right now. 10-year notes up for auction. rick santelli at the cme. what was demand like rick? >> straight-up 1:00 eastern. demand, i gave it a b-plus. the yield at auction for 21 billion 9 million 11 month securities 2.461. 27.47s trading in the one issue market. that's a strong grade pop right there. everything else is definitely above average. 2.74% bid to cover. above the 2.68% 10-year auction average, 57.9 on indirects above
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53. 10 auction average, 12%. this is 12.1%. as i said b-plus. tomorrow will be the last of the coupon supply with 13 billion$13 billion we opened. 30-year bonds. >> we'll take a check on the 30-year yields standing at 3.191% whereas the tlt is about $1.16 and change so far. the tlt is down 8% this year. let's get a "market flash." >> melissa, h&r block coming off its session lows a day after the tax preparation giant reported its revenue climbed for a third straight year. the company led s&p 500 gainers yesterday. it is not the worse o'performer down. credit suisse downgraded to neutral from a prior outperform saying, among other things the stock is currently fairly valued. the firm also cut its target price to $35 a share from a prior $37.
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back to you. big deal in the auto sector today and a ton of m&a action recently but does all this signal something very worrying about the state of corporate growth? check out alibaba shares. the stock is up right now but down 15% this year. alibaba's jack ma joins us live for "power lunch" exclusive. he was quite controversial yesterday. hear what he has to say. >> if i have another life i would keep my company private. i'll do it not for myself i'd do it for the shareholders customers, employees. they need it. i don't need it. this life is tough -- before ipo is already tough. now after ipo is much worse.
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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.
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the airline industry is down 8%. ual down 15%. kelly evans is sorting out the sector with top analyst jamie baker today on the "closing bell" so you will not want to miss that. . folks, let's take a look further into some of today's business headlines. topical topics. bill george member of a couple of boards on companies you might know of. one is called exxon, one is called goldman sachs. just a second ago melissa ran a bite where jack ma said that if
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he had a company today, he wouldn't take it private. if you had a company like jack ma's company, successful fast growing, you serve on public company boards, would you take it public today? >> i think a lot of people would be thinking long and hard about whether to go public because of the pressure of short-term investors. that's why you see, tyler, a lot of them go for two voting class of stock. all of silicon valley companies i've talked to they're going to hold off the market as lock asng as they can. when this he go public to get better monetization. in government terms that's bad but i actually understand why they're doing it. >> because they get -- they have the voting shares and they then control the company as if it were a private company. >> because they're being looking for long-term objectives. i think public companies today, you saw what mike dell went
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through. i think you'll see newer companies holding off the market and then going public at the last minute. >> that changes the idea of growth in the ipo market if these are much more mature companies coming to market as opposed to say ten years ago. >> i think it definitely does. i think don't think that's all bad. maybe these companies need to mature a little bit under the watchful eye of venture capitalists. you'll be a lot better off. >> one thing i notice you follow is the difference of the pro forma numbers we report one with thing public companies have to look at every quarter, will i hit that number or not, and then the gap numbers. you are a big believer in transparent transparentcycy and explaining to shareholders. >> you'll get distortion of currency acquisitions one-time write-offs regulatory costs. i think you have an obligation to do the zbap numbgap number just for
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acquisitions just for divert turs. divertures. organic growth same-store sales. in beverage sales, what's your actual case sales. look at the real numbers, but then give a track back to the reported numbers. >> is a widening gap between the two numbers a troubling sign? should investors be concerned these two sets of numbers are getting farther and farther apart? >> potentially. i think there is a lot of rationalization. regulatory costs are real costs so we shouldn't fully discount that. so i think it all depends where they come from but a bidening gap is gap is a yellow flag maybe orange flag. >> you grew up in the health care industry. one of the things we report on every day here is the astronomical insane price of prescription drugs. at least the price that's charged here in the united states. how big a problem is that? how inaeftable is a huge and
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potentially society rending collision over the price of these drugs which may or may not be able to save lives, certainly can improve quality of life and the collision between the people who can afford it the people who can't. the insurers who don't want to pay for it and the drug companies that price at $75,000 or $80,000 a month. >> i think it is a huge problem and they really need to moderate their prices. i've watched these increases. i'm very concerned. it is a question of access. who can get access to drugs that can save their life. there's nothing about cancer that suggests it is only for people that have the money. everyone has it and you let everyone get access to the products. yes, you want to get a fair return. you want to be able to invest in research but don't push the limits up. >> when you say the potential of consolidation in the insurance industry, do you see that as potentially a good sign a step toward achieving drug pricing that may be more rational lower? >> no. there's too much consolidation. >> in the insurance industry -- >> insurance is raising prices
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30% to 50%. how can this be a good thing? this is very worrisome to me. next time you need a round of regulation -- i'm not pro regulation. i just thing you want to modulate it and not push the limits but make sure people have access to it. >> bill well said. a little breaking news now. you have a book there, "true north." it's good. pick it up. i've read it. tyler, we have just received word as expected that the environmental protection agency is taking first steps to address greenhouse gases that are emitted by commercial aircraft. it is proposing a set of rules that will limit greenhouse gas emissions from commercial airplanes. this has been expected for some time. the obama administration has made it very clear that for several years it was looking at some way to curtail those emissions especially as commercial air traffic has grown over the last couple years. to put this in full perspective,
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we'll get the full release from the epa in the next hour but roughly 11% of the green laos gas emissions from the u.s. transportation sector come from aircraft. that's something that they're trying to curb. it will be interesting what types of proposals they are putting on -- out there as far as targets, guys. because this ultimately will have a uj impacthuge impact on boeing the airbus and ge aviation rolls-royce, et cetera. again, the epa proposing the first greenhouse gas emissions rules for commercial aircraft. guys, back to you. >> phil lebeau, thank you. we got a rally on the street here. the s&p 500 sitting two points below its session highs. its best gains since may 8th. all ten s&p sectors are higher. tech financials energy leading the stay. stay tuned for our exclusive interview with alibaba's jack ma. plus -- >> up next -- a power pitch erer amping up your smartphone.
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>> will this start-up get the panel charged up? >> is it possible for human motion to jen wratgenerate enough power to be useful for the kind of smartphones we carry today? >> or will it short-circuit. stay tuned to find out. ...served my country... ...carried the weight of a family... ...and walked a daughter down the aisle. but i couldn't bear my diabetic nerve pain any longer. so i talked to my doctor and he prescribed lyrica. nerve damage from diabetes causes diabetic nerve pain. lyrica is fda-approved to treat this pain. lyrica may cause serious allergic reactions or suicidal thoughts or actions. tell your doctor right away if you have these, new, or worsening depression or unusual changes in mood or behavior. or swelling, trouble breathing rash, hives, blisters, muscle pain with fever, tired feeling, or blurry vision. common side effects are dizziness, sleepiness, weight gain and swelling of hands, legs and feet. don't drink alcohol while taking lyrica. don't drive or use machinery until you know how lyrica affects you. those who have had a drug or alcohol problem may be more likely to misuse lyrica. now i have less diabetic nerve pain.
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you probably know xerox as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business. you like to see a picture of what a rally looks like expanded out? you will see it here in the dow. all 30 of the dow stocks are in the green today on this day where the dow industrials up about 245 points.
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as you look across the top row, what you see there is led by nike. you'll see technology heavily represented in the rallying stocks today. microsoft, ibm, cisco, and intel, as well as a lot of financial stocks. goldman sachs, visa traveler's and jpmorgan. that's what a rally looks like on a wednesday. time now for the "power pitch" where two entrepreneur have just 60 seconds to convince a panel of experts that their start-up has what it takes to be the next big thing. >> hi. i'm alex smith. >> i'm tejas shastry. >> we are tackling a problem a lot of people have a dead smartphone by the end of the day. we know that you put a lot of energy into your days. why can't you get some of that energy back? well, this is ampy move a device that captures the energy from your movement throughout the day and turns it into power for your phone. an hour of exercise gives you up
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to five extra hours of smartphone battery life. and the ampy smartphone app tracks the amount of energy you are competing and lets you compete with your friends for who's generating the most. >> we raised over $300,000 on kickstarter. we're delivering those units this summer and moving to retail later this move. but we're already working to shrink down the technology to wear into fitness trackers and other wearable devices so you never have to plug them in. >> welcome to today's "power pitch" everybody. you just heard the pitch, now let's meet the panel. on panel on the board of the new york angels aliyiasyrett. nat burgess, and patrick chung.
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welcome, everybody. thank you for being in the hot seat here. >> so guys we've seen the prototypes thus far. and i know that kickstarter orders have been delayed. how do we know that the products would mass produce and get into the consumers hands are actually georgiaoing to work? >> we've been working with manufacturing partners on tightening up the design and being able to deliver a quality product and deliver quickly to our chain. >> do you think of yourself as a battery company or holy grail of social fitness companies? >> we actually think of ourselves as defining a sort of new product category which is wearable motion chargers. we sort of overlap with both the fitness tracking space and the battery space. >> nat, a yes. >> is it possible for human motion to generate enough power to be useful for the kind of smartphones that we carry around today? >> sure, yeah. an hour of exercise can extend
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your phone by up to five hours. so that's stand-by an hour of active use. you store that energy in a battery so you can store it up over several days and use it when you really need it most. >> just following up on that what is the fundamental technical innovation that you have that allows you to miniaturize while still maintaining high efficiency of conversion? >> sure. we filed a non-provisional utility patent on the core architecture of our interior inducters so this does two things. it allows us to shrink down the technology for wearables with be but it also allows us to customize the sort of form factor or the shape. ampy move is shaped like a hip flask. sort of juice for the end of the day when you need it most and it fits the contours of your body and the curves of your body making it wearable. >> nat, your turn. >> you're fundamentally going to be competing against samsung, google microsoft, apple once
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you start putting this technology inside their devices. how core is your patent and do you have an additional patent strategy to really protect the playing field here? >> our technology and the patent inside of it really allows us to do a lot more with inductors than have been done in the past and we feel confident with those claims. but in the end it is a competitive field and we're building up over ip barriers such as algorithms for how to design a self-charging wearable device and other aspects of the inductor itself. >> we all heard what they had to say. now we need to know if the panel is in or out? >> the conceptetic charging is nothing new. these guys have really just created the smallest version of the wearable charger on the market. with that said, there is a huge demand for this from consumers globally and the team lined this is great. i'm definitely in. >> definitely in. patrick? >> this company really sparked my interest when i first heard
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it. having met the team now i'm really charges up about it. it is shocking to me that anyone would want to use that oversized legacy technology. i would think they'd simply want to revolt. i was also a blight fazed by the resistance they might encounter to acquire potential customers but sounds like the kickstarter at been a great conduit. i'm in. this team's energy is electric. >> two ins. >> i have to second the observation that your pitching this is a way for your phone to go debt but it is really about a social status that while advertising, you earn what you burn. i think trying to design manufacturing distribution of a consumer device i'm out. >> two ins, one out. what do you say in reaction, guys? >> we are ereally looking forward to getting our products in the hands of consoumumers so they can turn calories burned into
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battery burned. >> thank you so much. that is today's "power pitch." >> cool idea. do you though agree with the panel? tweet us using the #powerpitch. all right, melissa. take a look at the one-year chart of the janice research fund up nearly 13%. brian sullivan is in california for the janus investment panel and he'll talk to the director of research. and jack ma joins us at the top of the hour to talk alibaba, its growth and running a business in china. that and more all straight ahead. ♪ ♪ ♪ 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
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i'm morgan brennan and here's your cnbc news update for this hour. president obama making it official saying the u.s. will send up to 450 additional military advisors to iraq to train and advise iraqi forces fighting the islamic state. he says they will not serve in a combat role. obama says he has not ruled out
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additional steps against isis. the republican chairman of the house ways and means committee says president obama's health care law is broken and must be replaced. rep paul ryan spoke as his panel began questioning health & human services secretary sylvia burwell about the law. jeb bush continuing his five-day european tour while speaking to the media in berlin he called russian president vladimir putin a bully and said the u.s. and its allies need to be more resolute in their response. two buses collided this morning inside the lincoln tunnel which connects new york and new jersey. at least 18 people were injured. the accident caused traffic delays of up to 90 minutes. 42 million vehicles travel through the tunnel every year. that's the cnbc news update for this hour. back over to you. >> morgan thank you. wheat is down by 3.25%. corn down by more than 2%, both falling after the usda saying supply is greater than
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originally thought. from soft commodities to hard ones. let's look at gold. the price is closing right now, up about $8 almost $9 an ounce at 1 s$1,186.50. that's a three-quarters of a point move on the day. silver up a little bit, copper up by a little bit .5%. rack we just completed an auction. i graded it a b-plus. look at the intraday ten there. we challenged the low yield of the day at 2.45. we've sat most of the session at 2 hadn't 2.46, up two basis points. the last time we closed up at these yields we're talking around the 25th of september last year. call it 8 1/2 months. third chart, lqd. it is an etf. it's the investment grade
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corporate etf. it is make pentagon year making fresh year-and-a-half lows. jane wells is in l.a. with breaking news. >> hey, melissa. the second-largest city in the country has just approved moving the minimum wage to $15 an hour. the l.a. city council just voted 12-1 to get it to that level by 2020 which means that starting by next year and july of next year, the minimum wage will move to $10.50 an hour which will be slightly ahead of where the state minimum wage is going. then $12 the year after that, $13.25 $14.25 and $15 by 2020. businesses with 25 or fewer employees could start raising their wages one year later and they'll have to 2021 to get to than $15 an hour mark. not much controversy here. the only controversy earlier which was labor unions which push so hard for the rise in the minimum wage at the last minute tried to get an exemption for
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businesses that had union labor. they wanted to have more flexibility to maybe negotiate a lower wage in exchange for benefits. that blew up in their face. they retracted it. now according to this 3.8 million people living in the city of los angeles and by 2020 the minimum wage will be $15 an hour. back to you. >> jane wells, thank you for that. stock rallying with the first update for the dow in five sessions, first for the nasdaq if three days. joining us brad mcmillan from the common financial network, and matt baudi. matt, it finally seems stocks are able to move higher even with rates moving higher. >> i think it is a good time to get defensive. obviously we've been on quite a run, the market on the offensive especially domestically for quite some time. i think if you're not taking some of those profits and getting defensive i think you are making a mistake.
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if you want to get offensive you can, but i would do it overseas in areas that have not been on the offense as much. the developed economies overseas as well as emerging markets. they're just starting to get their house in order and become offensive with their monetary policies. our markets have been offensive for quite a while. rising currency price appreciation. labor has been improving. i think it is time to start getting a little defensive, take some profits from those high-flying sectors of technology and health care and put it into more defensive properties vof telecom, industrials and energy for that matter. >> brad to you. seems like you had the exact opposite view of the markets. you actually think that stock should rise from here and you want to get leverered up ered up to the sectors of the market that are the highest if there is in fact economic growth. >> i think that makes sense. if you look at the way the market has performed especially over the past six months we here at commonwealth say the
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market has been trying to adjust to potentially slower growth lower consumer spending. but now we're seeing all of that move in the right direction. we're seeing consumer spending start to potentially grow. we're seeing the economy come back. we've just seen car sales, vehicle sales, come in and multi-year highs. we haven't even started to see the u.s. economy really start to move. but i think when it does which it should i think the market's going to respond to that. >> you like housing, you like consumer discretionary technology for enterprise or businesses. i want to hone in on financials. that's leading the market in today's session. we've seen new 52-week highs for regional banks, new record highs for the insurers. where within the financials do you see value? >> i think these are the sectors that are going to do well especially the regional banks, because right now we -- one of the smaller companies haven't really been willing or able to borrow and it hasn't really been profitable for the banks to lend. larger companies are going to the bond markets and that's certainly played out. but now is when the recovery is
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really starting to hit those smaller companies and they need to go to the banks and with the interest rate spreads rising, the banks are going to be in a much better position to make money. >> guys, we'll leave it there. thanks for your thoughts. go to powerlunch.cnbc.com dot.compowerlunch.cnbc.com. now a "market flash." >> dollar general's nearing its best levels today up by nearly 1.5%. rbc upgraded to outperform from sector perform and raised the price target to $86 a share from a prior $82. they say that labor and wage trends are continuing to improve and should provide a sales lift for the discount retailer. this is just a day after raymond james upgraded that stock as well. >> dom, thank you very much. now over to brian sullivan out in california with the first of three big exclusives from the janus capital investment panel. hi, brian. wrr hey,
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wrr >> reporter: hey, tyler. the dow is soaring, bond yields on the move all sorts of stuff swirling around greece the federal reserve. all day long we'll hammer into this as the janus capital investor and advisor day. carla, let's get right into it. you have got a really interesting -- and i think contrarian view -- on europe. from our side of the table here in the united states we think that europe is in a depression that nobody's spending any money and there's no investable tunes there. tell us why that theory is completely wrong. >> let's start with the consumer. if you look at bookings in hotels, rates are going up. occupancy levels are going up. the f&b is going up in all the hotel industry across especially in the low and mid range. so we're starting to see some signs of growth there. but it is also starting to take off in some of the other areas. even at the corporate level, and everyone's been saying there's no capital investment? we've seen loans to the capital investment sector going up in
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italy and spain already, and we're even starting to see some of those small companies that do things like put the truck-mount pd cranes truck-mounted cranes, you're starting to see their after-mark sales pick up as people need to replace parts that are wearing out. things that are happening are not the end but the beginning. >> it is interesting when you listen to the headlines, you'd think everybody in europe is out of work. there's no capital to invest. and that it is a total disaster. if you go back five years ago in the united states if you had invested when we began qe you doubled your money effectively. do you believe the same opportunity exists right now in europe? >> it's an up turn. it is not a doubling of your money. europe is just a much slower growth economy so you will not have the huge up swing. we are in this seventh to eighth year of a re-investment cycle that hasn't happened. there's delayed demand for a lot of products and it is going to start to pick up. >> you've got a really interesting background because
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you've you've lived all over the world. you did the peace corps in kenya, as a matter of fashth.ct. but sold bank stocks in asia. is china still a good opportunity even after the massive stock run that that market has had? >> people are completely underestimating the up turn there. >> underestimating? >> they're underestimating it. >> stock market doesn't seem that way. >> but the foreigners aren't buying. they've been left out of this. it's almost entirely domestically led. the valuations are still well off their highs and it's hit certain industries which are trading at peak valuations but the more cyclical industries haven't moved much. >> you know you look at china though. average income is $5,000 u.s. a year. the stock market seems untouchable only to the wealthiest kings. i know they're in the early stages of a move to the middle class but how can they sustain this level of spending and
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leveraging debt? >> you are starting to see a pick-up in disposable income. people are starting to buy things like water purifying systems and more health care type products. it's not take off and buy your third car. it's a different economy. >> before we let you go give us one investable idea. i know you like volkswagen. i know you like apple. anything else? >> so, one of our favorite ideas right now and it's been hit because people are worried about cyclical changes in the industry, is canadian pacific. it's a stock where it's benefiting from consolidation in the industry so there's pricing power. it's trading on ten times, growing mid teens, they're growing back 5% of their shares. >> canadian cranes and truck train indexes. insightful stuff. we have a lot more coming up from out west at janus capital. the ceo of janus, with former
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bond guy himself, dick wrchlteil will join us. we have a big line-up coming up. by the way -- a guy named jack ma, one of the richest men in the world -- the led of alibaba would joip usn us exclusively as well. >> there's a reason mr. ma is smiling in that photograph. meanwhile, major indexes rallying right now. all 30 of the dow stocks are higher around the s&p is at its highest point since may 8th. plus bmw premiering the new 7 series. "power lunch" is back in two.
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bmw is revamping its 7 series in a market that's become much more competitive. the tesla, porsche, mercedes and audi all competing for market
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share, so what will set the 7 series apart from its competitors? phil lebeau has a first on cnbc interview with a bmw board member ian robertson. >> thank you so much. to germany, ian, thank you for joining us live from germany. tell us what's changed with your flagship sudanedan, the 7 series? >> good to talk to you. we're very proud today. the 7 series is our flagship. it carries the new technology. it carries the innovation and it is a big step in the luxury area. there are many many new features in this car which in our opinion are benchmark and will be a world first. >> ian, last night at the tesla annual shareholder meeting elon musk said the model 7 is the best selling high-end premium sedan in new york america. it brings up the question about increased competition for vehicles priced above. $5,000. not just from tesla but your other competitors as well. many people are saying has the 7
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series been lacked? is it up to the competition that's out there? >> clearly, you know we're just coming out of one generation. this is our sixth generation. the last generation was the most successful and we will build on that with this one. we're very confident that with this vehicle and other vehicles in that segment -- because our x products are up there, our 6 series products are in there as well. we are enjoying a great deal of success around the world and particularly in north america at the moment. >> one of the more interesting features in this car is one that i'm not sure you've had a chance to experience. if you have tell us about it a little bit. gesture controls. where people will have a chance just by waving their hand to control some of the features in the vehicle whether it's the radio or making a phone call, getting a text mess ablg whatever it might be. have you had a chance to test this out and if so give us a sense of what it is like? >> well clearly this is a world first and gesture control is one of those things that i think
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once you've had it you'll wonder how you ever did without it. of course from the perspective, it allows the driver to keep his eyes or her eyes firmly on the road. of course the head-up display is in there as well so you can continue to watch what's happening. so if you get a phone call then you can either dismiss it or you can accept it by the simple movement of your hand. you don't need to change your eye level from what's going on on the road around you. you can make the radio go up or make the radio go down. you can actually close down the monitor as well. so there are many features here that the customer once you get used to using it become second nature and really really important that there's no distraction of what's happening in the car from what you should be looking at which is as a driver what's outside of the car. >> ian robertson, board member from bmw joining us live from munich germany where the company has just unveiled its latest version of the flagship 7
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series sedan. what's really interesting, when you look at this vehicle and all the technology in it sales up 13% for cars over $75,000. >> looks like a beautiful piece of work but most pft gestures that i use while i'm driving are not ones that would be well received, let's say, by the technology. phil lebeau thank you. the s&p in rally mode. take a look. all ten sectors up on the day. doesn't happen all that often but it is happening today. we've got a very big hour of "power" coming up. sony's chief operating officer, janus's ceo, dick weil alibaba's chairman jack ma and janus' portfolio manager bill gross. we'll go up town for some funk. (trader vo) i search. i research. i dig. and dig some more. because, for me, the challenge of the search... is almost as exciting as the thrill
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of the find. (announcer) at scottrade, we share your passion for trading. that's why we rebuilt scottrade elite from the ground up - including a proprietary momentum indicator that makes researching sectors and industries even easier. because at scottrade our passion is to power yours. there's some facts about seaworld we'd like you to know. we don't collect killer whales from the wild. and haven't for 35 years. with the hightest standard of animal care in the world, our whales are healthy. they're thriving. i wouldn't work here if they weren't. and government research shows they live just as long as whales in the wild. caring for these whales, we have a great responsibility to get that right. and we take it very seriously. because we love them.
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interesting story on our website right now. a poker player accused of cheating. he won $54,000, put him in fifth place at a tournament of the "world series of poker" out in las vegas. the tournament is unique because the format is heads-up. that is one-on-one. you play a plach and the winner advances to the next round.
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his opponents accused him of marking the cards perhaps with invisible ink. the "world series of poker" says in a statement to cnbc -- we treat these allegations seriously and have been investigating since this matter came to our attention. the next update will be provided when the investigation is complete. "world series of poker" owned by caesar's. the stock is up a little bit today but so far has lost more than half its value so far this year. the full story, go to powerlunch.cnbc.com. >> he marked his cards but he only came in fifth? okay. here this hour's power points. one, the market has been soaring for this hour. we learned this hour los angeles has approved a $15 an hour minimum wage. and the epa has taken the first step towards possibly regulating emissions from airlines. sony just wrapping up its press conference over in new york city. company unveiling its latest product in the digital imaging
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space. only shares are up 47% year to date. and about 3.75% today. jon fortt live with sony's coo and president next. plus in less than ten minutes, alibaba chief executive chairman jack ma will stop by for a live and exclusive interview only right here on "power lunch." you won't want to miss it. we'll be right back's be back in two minutes as you see 9 out of 10 s&p 500 stocks higher at this hour. it's part adrenaline and part adventure. it's part geek and part chic. it's part relaxation and part exhilaration. it's part sports car and part suv. and the best part? the 2015 gla. it's 100% mercedes-benz.
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welcome back to "power lunch." i'm kayla tausche. a second lawsuit has just been fueled by jawbone against fitbit, this time relating to the alleged infringement of three patents that relate to among other things, the tracking of movement and weight. of course that's an integral detail to what these wearable health trackers do. this lawsuit follows a strongly worded suit in late may alleging fitbit approached employees and that the company now possesses confidential trade secrets that job jawbone says it imperative to its business.
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holding companies related to these jawbone patents have also sought an investigation by the international trade commission. if that's successful it could have an effect on fitbit's ability to import products to produce its products here in the u.s. the itc a global agency governing trade. it's ruled in the past in cases involving apple and samsung. historically it has been a quicker proceeding than a normal lawsuit. in this case, this lawsuit seeking a jury trial. jawbone also wants to permanent permanently enjoin fitbit's ability to make and market products that use these patents. we've reached out to fitbit for a comment. but we should note in response to jawbone's previous policy they said we're unaware of any confidential or proprietary information of jawbone in our possession and we intend to vigorously defend against these allegations. it is important because fitbit is on itself visiting investors ahead of an ipo that we could see as soon as next week so an interesting development. >> big day for sony.
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the company unveils itsgital imaging. jon fortt is live with sony's president and coo. >> president of sony electronics, thanks so much for joining us. sony stock up nearly 50% year to date. today we're talking about an area that's been under fire from these, from smartphones. you're working on your cameras today. you have some new capabilities. tell me about the most important ones. >> well we have -- we made three announcements today. in the imaging sector we have and commanding lead of image sensor tech noll xwinology worldwide. we announced three cameras, covering the enthusiast, hobbyist professional consumer? they'll still shoot motion video in 4k. this one here is obviously
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compact design. and won't only shoot in 4k but it has super slow motion. so with two seconds capture, you can watch back data the eyes can't see in real time which will give you 80 seconds play back. >> now gopro has built a multi-billion dollar company in the action camera market. i know you guys are in that market, too, trying to compete with them. you looking at drones? because gopro just said they're coming out with a drone as well. sony tries to be forward thinking, as wuls. you you going to do it, too? >> as i said at the opening, we are the world's largest manufacturer of image sensors. anything that requires an imaging sensor we're interested. >> how are are the tvs doing? 4k tvs taking off faster than a lot of people expected. what makes people pull the trigger and say they need that much resolution? >> simple.
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seeing is believing. when we can get a consumer into a demonstration and show actual side by side high-definition, which is phenomenal and then 4k? they see it they believe it and they purchase it. adoption is so much faster in 4k than we ever imagined or ever witnessed in high-definition. >> htc taking it on the chin with the latest version, the m-9. it seems really hard to grow share in android smartphones. how are you feeling about that market and your place in it? you've done really well in sensors and phones like the iphone. how are smartphones doing for you? >> smartphones in the u.s. is not the first market that we came to. so in the u.s. we're taking it slow and cautiously but smartphone is important to the ecosystem. right? so from an imaging point of view there are obviously sensors. >> we've got to leave it there, unfortunately. the show is offer but it is still going on here for sony. guys back to you. >> jon fortt, thank you very much.
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that does it for the first hour. brian, melissa, carry on. coming up two big interviews, both from janus. we've got there man here the ceo of janus capital, dick weil. bill gross will join us exclusively as well in a half-an-hour's time. we'll call this the swirling cauldron around the bond market. huge moves lately. greece the fed. plus if that is not enough we are also talking alibaba. that stock is higher right now but it is struggling this year down about 15%. alibaba extest chairman jack ma will join cnbc exclusively in just a couple of minutes. it is a huge day. plus we are all over this market rally.
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. you got rates up oil up. bob pisani live on the floor of the new york stock exchange. bob, is there one thing traders are ascribing this rally to or is it just a collect of decent headlines today? >> it is a variety of headlines. 5-1 advancing to declining stocks. all ten sectors in the s&p 500 on the up side. let's look at the reasons for the valley. brian has it right, as usual. directionally, some hopes for a greek deal. angela merkel said she's willing to meet with the head of greece and talk. no real headlines yet but there seems to be some indication of movement. we had a well received 10-year auction and we saw bond yields moving down on that. finally, an oversold bounce. we've been down 9 of 14 days in the s&p 500 and a lot of sectors, including transports and interest rate sensitive groups have been oversold recently along with industrials. when i say a broad based rally, look at the s&p 500. 8 of 10 sectors are up 1% or more and there you see a big move to the up side. when you see -- hear, brian,
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market leaders are banks as well as interest rate sensitive stocks leading, they're both going at the same time up? that's a very broad based rally. >> for six years every time we think this market's going sideways or down we seem to get a pop. dick weil ceo of janus capital group is joining us now. to bob pisani's point, dick, every time you think things are dark, you get this big rally. you're trying to build this asset management firm, ecwitszquitiesequities bonds. is it frustrating this greek overhead is clouding the gains we've had in the market? >> i think frustrating is not the right word. it is a little confusing because we're in unprecedented times. i think central banks are acting in a way which we haven't seen before. the european union is going through some struggles that we hadn't seen before. as an investor i think all of us are challenged because we can't
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animal anal anal analylize. >> say your client is a doctor in des moines, iowa, who's got some money to invest. he's not a market market participant every day like you are. i'm sure your folks are getting calls up, hey, i'm thinking of pulling my money out of the stock market because i'm worried about greece. >> yes. >> is that a way to think? >> no. that's the most important job we can do for our clients. the definition of a professional investor is someone who has a structure in which they invest. we tell our clients, the most important thing you can do is invest within a structure that you can stand some volatility because one thing we know for sure, if you're the doctor in des moines who sells on those really bad, dark days the odds are very good you've just cost yourself a lot of money. you've hurt your retirement nest egg because you sold at exactly the wrong time. take a position you can sustain because we know there will be
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volatility. we encourage our investors to be informed, plan for that volatility and to stand their ground. >> that is the hardest part of investing. i think everyone of cnbc's viewers knows that they do not sell at the bottom. you're supposed to sell at the top. then buy low. but that gut instinct that raw pain of fear overcomes maybe the logic that we need to have. how do you trump that running an investment firm? how do you trump emotion? >> i think the most important thing you can do is have a framework to guide you through. because we are all subject to the same emotions. we all want to sell at exactly the wrong time. >> and most do. >> most do. that's a tragedy. so our job as professional investors is to help our clients avoid that terrible mistake. so we needs to work with them and their advisors to develop a sustainable framework. and they need to know hey, volatility's coming. they need to expect that. when it happens, they needs to avoid hitting that panic button. >> you're not a ceo. you were an investor. >> yes. >> so you and i have chatted,
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both on camera and off, about there unprecedented time that you mentioned at the top of the interview. what's your take as an investor not as a ceo? >> i think the global economy works. i think it is stronger than people imagine. but i do think that -- >> but is it propped up? >> it is propped up by the central banks which creates sort of bubble risk. we're not sure where all this money is flowing and what artificial pricing is worst and is going to pop like a bubble. alan greenspan said the definition of a bubble is isn't that you can't see and predict in advance. >> but you're supposed to be able to. people rely on smart people to do that for them. >> i think you need to know when times are more risky, such as now potentially, with a lot of central bank intervention there's more risk of asset bubbles bursting, so you need to maintain a position that is secure enough, that is safe enough that you don't hit that panic button. it is all about controlling your emotions. >> very quickly, if we are propped up the market's on a stool. is that -- we've been waiting
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for five years for that stool to be pulled out. is it going to be pulled out any time soon? >> i don't think so. i think we still have more time. eventually this will end i think in a pretty significant correction but i don't see it right now. >> correction for equities. >> correction for equities. i don't see that right around the corner. i think there is still a lot of reason to be optimistic. we are seeing strength in the consumer. that's a powerful story. >> safe to say in a couple years you would not be surprised to see a meaningful decline in equities. >> i agree, yes. >> coming up in 30 minutes, we'll continue this discussion probably more on the bond side with a guy named bill gross. janus positive in stocks on a day when we're witnessing a very powerful rally on wall street. the s&p 500 very close to session highs up by 1.33%. green across the board. technology, financials leading the way. kre within the financials new
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52-week high. insurers hitting record highs. what's most interesting about this rally, we are seeing interest rates rise and interest rate sensitive stocks utilities and telecom also doing well in the session. meantime, much more is ahead. huge interview, jack ma the chairman of alibaba, finishing up a town hall right now. he will speak to us exclusively here on "power lunch." that's next. here at td ameritrade, they love innovating. and apparently, they also love stickers. what's up with these things, victor? we decided to give ourselves stickers for each feature we release. we read about 10,000 suggestions a week to create features that as traders we'd want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. who reads all those? he does. for all the confidence you need. td ameritrade. you got this.
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let's get you caught up on the markets. right now the dow is up by 250
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points. that's good for a 1.5% on session. s&p meantime is up by 27 points. that's good for 1.3%. the russell 2,000 is the big winner among the major averages higher by 1.4%. 1,267 is the level. treasury yields, this is really a big story in the market. they continue their march higher. the 10-year notoriety now yielding 2.467%. we are seeing yields around the world higher at multi-month highs. the airline index down 8 prls in a8% in a month but it is up today. delta is down 1% in that time period. kelly evans is sorting out the sector with top analyst jamie baker today on krp."closing bell." another secondtor flying high. financials sector 1.5% higher.
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it is the second-biggest sector in the s&p. names like goldman sachs, morgan stanley, jpmorgan chase, you name them, a lot of them hitting fresh highs in today's trading session. the etf that tracks the financials and the s&p 500 has already traded 29 million shares on average over the last three months. full-day trading volume is 27 million so we've already seen a lot more activity in that etf. also trading higher today, shares of alibaba, higher by 1.3%, right right now, up more than 30% since its debut as an ipo. >> we are here at the knickerbocker hotel joined by jack ma chairman and founder of alibaba. you just spoke to a few hundred small business people. yesterday i heard you in front of the economic club in new york. jack, it's funny, years ago i sat down with a gentleman who
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was the chairman and founder of ebay. he talked to me about similar aspirations. a global marketplace for ebay where small businesses could sell their goods to anyone in the world. ebay did not do particularly well in your home market with finding buyers but they have done a pretty good job finding the sellers. why go through all this? why not just buy ebay? >> well if you want to buy i think first, i don't know they want to sell. and the second we have to think about one thing. if you're doing business not that simple to buy. you have to create something. you have to create something that never exist for the future. so we focus more thinking about the next 10 20 years, how we can do -- what things we should do differently, what we do successful. internet so young. to buying about companies is not easy. we have to think about how we
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develop ourself. >> i think ebay has done a fairly good job getting small businesses on a platform to sell to others in this country. but the idea of a global marketplace, why are you be able to succeed where others perhaps cannot? >> we'll focus on small business. i think this time because we have a 350 million buyers in china. so we think about bringing the american small business to china, bringing european small business to china, because we can show the buy side will be easier. if you don't have the buy side it is difficult to have the supply side. when we have such a huge demand in china especially last year for that demand could support small business in china. >> the middle class is doing nothing but growing in china. 300 million now. perhaps half a billion in not that long. why not just keep it in china? why not just enjoy the fruits of your labor there and continue to dominate with the growing middle
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class buying from those who are supplying in the same country? >> i think this is our mission. helping doing business we choose the name alibaba because it is a global company. it is founded in china but it was created for the world. i think our goal is the next ten years i hope that 40% of our gnv is from china. not that we need money from outside of the world. our mission making sure we helping small business doing business easy anywhere in the world. >> 40%. >> yes. >> you're talking almost from nothing right now. >> yeah. that's why we are working very aggressive. that's why i come to the states. i go to europe and i go to africa. i go to everywhere that small business. i think it is opportunity for everyone. >> you recently did a deal i think with softbank in japan as well. >> yes. and korea. >> this is what you're going to be focused on. with the belief that this can become a real part of the overall alibaba marketplace and platform. >> yes. yes. and the other thing is because
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the demand for china is luge because china today the population of middle class is almost the same size as american population. and i think in ten years we have more than half billion middle class. china should change from exporting country to importing country. china will be the largest buyer of the world in next 10 20 years. so we need products from also japan. >> you said your remarks ina mu moments -- moments ago, we'll never see blue sky in china if we keep exporting. >> yes. it's going to be tough. no coast with all the manufacturers. >> do you think that that change can really take place even in ten years? you're talking about an export-led economy that's led hundreds of millions of people out of the poverty and into the farms and cities. why would you change it? >> i think china must change it because it's been this kind of model for 30 years and i think
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next 30 years, because of the internet, because of the new globalization way, i think if we do not change it china is paying attention to the air, the water, the food safety nets and all the climate change. these things will help china to change faster. >> i noticed that in your remarks when you do talk about success already in getting small business to sell into china, it is typically agriculture. it's cherries from seattle you mentioned, from washington. it is alaskan seafood. is that your expectation that much of what will represent that trade will be out of the u.s. ground or trees or waters? >> yeah. ground, trees, that's the food and baby things and also i think the cosmetics and the u.s. branded products. china has a huge demand there. and i think very important is the innovative new products in america that small business created. because big companies already everywhere in america.
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>> what would be an innovative that would come from this country to china that you would be interested in? >> every time i walk on to some small street and see the baby products, see the toys and -- i think these things could be fantastic in china. >> aren't they probably already manufactured there, even if the idea is here? >> well, not really. not really. this morning i met some companies making candies. i think chinese people would love it. >> so you're looking for anything you can possibly get to sell. >> anything. anything, yeah. >> i wonder i watch you here of course and the reception that you get. to me you're a walking embodiment of the positive relationship conceivably between our country and china. but it is fraught with tension. barely a day goes by where we don't seem to have acquisitions of cyber espionage, by the chinese government against various entities here the south china sea tensions on the military front are significant. do you worry at all about those tensions becoming so great that
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it affects your ability to succeed in what you say you're trying to do? >> well with be if you, if you say don't worry that's not true. so i think because of internet kept can know each other better. two nations should start to respect each other, appreciate each other. today some of the relations like a chicken talks to ducks. everybody has his own language. and i think people just sit down and talk about the same thing that we worry about together. yesterday, the disease. the poverty. the climate change. there are big problems that change the world. if we are working together that will make us understand each other, appreciate each other, help each other. but today i think, you know things happening but i'm pretty confident. >> you are? >> i'm pretty confident. >> that these issues -- they're not insignificant -- can be overcome to the extent that trade will continue in a
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positive manner? >> i think we're confident. i think the young people of this generation -- and we have the history between china and the u.s. and the soviet union. we have a lot of disaster in history. we all solve it. why we cannot solve problems now? we just sit down listen and talk and communicate and do something together things will be solved. that's my belief. >> it is great to listen to you say it. i hope to believe it. you have a lot of faith of course in the younger generation. i would point out i think you have -- your entire management team was born post-'70s. i wrote something down here. i just want to make sure i've got it. why in your opinion is the post-'70s generation "better at developing the future"? >> i think young generation is always better than last generation. no matter you like it or don't like it. my father said jack i'm so good you'll never be -- but but
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i'm better than him.ing fast. you should look for success when you are young and support them when they make mistakes. i think today for all the alibaba senior management who are born in '60s they step down from executive chairs supporting the '70s. now we have more than 48%, 37% of the senior management of '70s. and 50% are '80s. >> '80s. >> and we got a 3,000 '90s joining. this is the hope of the company. if we -- the average age of the company if it was 65 we're dead. >> anything you want to tell jeff bezos who's 51 years old, the ceo of amazon? >> well i think he's energetic. he a he he's still, woulding hard.
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its working hard. for me, if you want to keep this company innovative keep the vision. rely on the young people. i don't know. jeff's idea maybe he has his idea but i think -- >> it's gone pretty well for him, too. >> yeah. yeah yeah. >> last time we spoke it was november, it was singles day and i was with you in china. the stock price was at an all-time high. you didn't seem particularly excited about it but i'm curious, since then it's down rather sharply. are you upset about the declining stock price? >> no. when they go up i'm not excited. when it go down i never depressed. this is how people look and what we should focus on as our business, our customer our employees the same. what are you going to do? you going to go on the street telling people my stock is too low or you going to say my stock's too high? forget about that. just focusing on create the business. and it's only been six -- i don't are fighting but how can
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you do it for the short term? there are so many things happening and something that it has nothing to do. because lot of -- our service is not being used in america because lot of investors don't know us. they have heard about alibaba. it is an interesting company, funny name and strange ceo but they don't know exactly what the service is. so takes time. i have patience. they will learn. they will know who we are and what we're doing.
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>> if they have heard of it oftentimes it may be part of a conversation about yahoo!. i bring that up because of course ya loo is going to be spinning off its significant stake in alibaba to its own publicly traded company. there are those who say why not just buy that company when it gets spun off, it will be a huge buyback of stock for alibaba. would you do it? >> i think the american -- i think that the business they think too much about buy and acquire and things. for me personally, as entrepreneur i'm more interested in building up the business business. if the chance is good, you have to do it. do it. but don't think always buy. i think you mentioned ebay and you talk about yahoo!. they are great companies. they're still going on. they don't want to sell and i have a lot of things to do because i have ipo for six months. so many things need to be done. right? so why should thinking about buying others instead of
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building up things ourself. >> in this case i was talking specifically about just your own shares that will be its own company. i wasn't talking about buying yahoo!. but that's not something you think you'll consider? >> no. >> you don't. >> no. i think respect to the shareholders decision. they spin off, they put it inside. for us, we have to focus on doing what we believe is right. >> that doesn't stop you from buying things. china business news -- investing. not buying outright. snapchat you invested $200 million. zu zulily. alibaba pictures. you are investing. >> investing. not throwing money around. i think we are pretty confident the next ten years for our e-commerce business, our financing business. but we think about ten years later what are the key business. we will focus on health and happiness. these are the two things that area for growth. we start testing now, we start to invest and we start to learn how now. because i think if you buy a
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business and the business succeed next you but not yours, there may be something wrong with you. good business takes time to build. so for the pictures for the health, or for the media things we believe ten years later, or at least eight years it will be good. so we have to start to build up our team and understand the business and understand the industry. by doing that -- alibaba has building last year. we've been building for 15 years. every time when i try to do something for -- if i do this year will we succeed next month? i always fail. but when i do something, will we have success in five ten years, we always have chance. >> that's how you're going to do it. i speak to investors all day long. your next quarterly earnings, how much was the take rate lou much was mobile and they'll make decisions to buy and sell your stock based on what they is
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see in the quarterly basis where you seem to make your decisions based on much, much longer term. >> i promised before the first ipo, i promised an ipo day i promised a now. we will always be the company to focus on the future. but today -- it is too late to worry about today in next quarter. right? we start to worry about the next quarter should be two years ago, three years ago. if we still today worry about the next quarter, we are screwed. we are in trouble. >> many would agree with you. that's why they'd stay private. >> sometimes up and down is very natural. it's very natural. you are driving a ship on the oslun. up and down is the making sure the ship is strong enough making sure you know where you're going. don't think up and down is going to destroy the ship. no it's going on. >> when we spoke in november i think i asked you if you were happy. your mood didn't seem to be particularly happy. in fact you even said it. it was a rare thing to hear from somebody who's founded a
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company. we don't -- u.s. chairmen and ceos don't seem to share as much as you seem to jack. but i asked is you because you brought it up then. has your mood changed? are you feeling better about the world or you still swla weary? >> no. i think i'm always feel good about the world, always feel about the others. but i just think whether too much work for me whether i should, you know keep on doing this, whether i should leave in more opportunity for young people, what should i do. these are the thinkings that make me too business. i said i don't be the ceo, be the chairman i could be easier but now if i am -- if you want to be doing good job as the chairman, there are so many things you should learn, you should do. >> but you don't think seriously about stepping down as chairman do you? >> no. never. i think i have long way to go. i promised my team i will work with them support them and making sure they are strong
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enough and making sure they say, jack it's time you retire. then i go. but i would. i always -- i'm a teacher. i feel proud. as teacher you always want your students better than you are. you always want young people better than you are and i always want them to replace me as soon as possible because i don't have long time to go. i'm already a little bit over 50. >> we're the same age. don't get me depressed here. i mean come on. we got lots of time. >> we have to face the reality. >> yeah. we can grapple with that every day. jack, i hope we'll see you back leer in the states perhaps given this new effort with small business but certainly very glad you made the time. >> thank you, david. >> jack ma chairman and founder of course of alibaba. >> thank you, david faber for that exclusive with jack ma. alibaba shares are higher on the session, up by 1.3%, as is the entire markets. take a check on markets. we are still holding on to pretty solid gains. dow up by about 270 points.
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plus we are headed back out to california for brian's exclusive interview with janus fund manager bill gross. we are keeping an eye on oil. much more "power lunch." back in two. t printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business.
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welcome back to "power lunch." i'm jackie deangeles reporting from the nymex. crude closed on the day at 6 $.38. this is after bullish data from the eia on inventories but production data continues to show u.s. production is rising. 9.61 million barrels a day. that could potentially be bearish if we see that trend continue. traders are also watching the dollar which has taken a breather for some time. but of course that is one thing to keep an eye on. stay with us, "power lunch" will be right back.
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i'm morgan brennan. the chief of the u.s. central command, general lloyd austin met with iraq's defense minister in baghdad today. this as president obama authorized sending up to 450 military advisors to the country. new jersey gambling regulators are allowing carl
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icahn to double down on his casino holdings in atlantic city. the casino patrol commission approved his acquisition of the trump taj mahal which is in bankruptcy court. the department of agriculture is cutting its production forecast for 2015 and 2016 as a result of the bird flu. it expects higher prices for both in the two years. results of a new survey suggest many men are neglecting their health. a national survey of 1,000 men showed that while 81% remembered the make and model of their first car, only 54% could remember their last doctor's check-up. may be one reason women live an average of five years longer than men. that's a cnbc update an this hour. one of those stories very appropriate for one of our stocks here in street talk we do it here every day, digging
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through the wires to find that stock you need to know about. pilgrim's pride. a very bullish call. $36 target. that implies 40% the up side. the firm views weakness in the stock over the past few months as a buying opportunity. they believe despite concerns over the avian flu on the export side the diverse export markets for domestic chicken products will more than make up for that as well. big up side there seep on pilgrim's pride. >> interesting to see the stocks that have gotten hit on bird flu. there are actually stocks in the space that have benefited. one stock, up on that news. the odds of gopro devices going mainstream citi says are getting splimer. only 5% of u.s. consumer plan on purchasing an action camera in the next year. that's down 7% from the year before.
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estimates for '15-'16 now below consensus. citi is sticking to its neutral setting. >> just anecdotally, you go down here to the beach, every one of those surfers has a gopro, she slopes. you just wonder if anybody who wanted to film jumping off a cliff has already bought a camera. specialty research firm alembic global advisors with an overweight rating at a $46 target. their thesis natural gas -- yeah it's come up a little bit in the last few weeks but still very weak overall. they say antero's asset base some of the most resilient in the industry. they like their hedged out portfolio. >> the asset base is very important. you got to take a look at the nat gas plays that are
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nonappalachian? that's where there are higher -- >> appalachian. >> higher producing wells so therefore the prices there are lower. antero is a non-appalachian -- they like it too. >> my grandmother's from witville virginia. disappointing second quarter results for hovnanian enterprises are. the stock is down 40% over the year. its market cap is now under $500 million. >> you know the thing about hovnanian, their revenue rose 4% year over year. they actually made more money in terms of sales but incentives undercutting profitability. the trailing pe on hovnanian is
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now 1.5. 1.5. well, you got to watch that "e." raptor pharmaceuticals a working on things like non-alcoholic fatty liver disease in children. citigroup started with a buy rating at a $20 target. that implies 40% upside potential on rptr. >> the uptick in stock in just the past month, it's up in just the past month by almost 39%. >> that wraps it up for "street talk." let's dive right in to netflix. david seberg and ari wald. dave anybody says anything negative about netflix, the
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plashth simply proves them wrong. . forward pe on netflix is $160. nobody seems to care. does do you have any concerns over this stock? >> no. we upgraded this stock whether it was $312 a share. outlook for this story is significant. it is all predicated on the international expansion opportunity. they're going to exit this year in roughly 80 countries. roughly $270 million addressable subs. next year they're going to exit in roughly 200 countries. this is a massive, massive opportunity here for them. you could paint a picture here -- we did it actually in trading nation online this is a $1,400 stock in five years. you could conservatively walk through the math to get to that number. it's up 100% year to date but this is a story with real growth opportunity. our analyst here as done a phenomenal job doing deep diving
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of this story. it is a buy. close your eyes and buy the stock. >> ari, obviously dave is saying it is not a house of cards but do you think $1,400 a share is in the cards? technically, can you see that? >> i've been on this show with dave. he says how bullish the fundamentals. i follow up and say the charts look good and the stock goes up. i think that trend continues. yes, once again, technicals are still fine here. yes, we all want to buy pull-backs but i've seen no study that stays that a stock that has done well should be sold. listen, the stock's breaking higher. it's been with good volume. there's conviction behind this move on balanced buying. if you're in it stick with the stock. listen, i don't know if that target -- we get all the way up there but i think it goes higher. if you're not in it you want to buy the pull back, support at 6. $30. buy it there. >> very bullish view technically and fundamentally. dave and ari, thank you.
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we do two additional trading nation segments every day. the yield on the 10-year note is up 26% in the past two months. got greece headlines, the u.s. bond market. we'll call it a swirling cauldron. this guy knows all about it. bill gross joins us exclusively -- we're in your hometown now, on your turf bill. he'll join us when "power lunch" returns right after this. and now the latest from tradingnation.cnbc.com and a word from our sponsor.
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♪ what if we finally had a backyard? that'd be amazing. ♪ hey, what if we took down this wall? ♪ what if this was my art studio? what if we were pre-approved? ♪ shut up. from finding, to financing. how'd you do that? zillow. we are live here in dana point, california. janus capital advisor day here. joined now by bill gross, obviously runs the unrestroindained bond fund. >> did i know i got married here 30 years ago on this very spot? >> i did not. hello to sue, as well your
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wife. congratulations on that. now let's move on to greece. you tweeted this out today. qes worldwide supporting financial assets. you mean ecb and the bank of japan. each $1 trillion plus. u.s. corporal buybacks $1 trillion plus as well. klein, too. what happens when it stops? answer your own question. what happens when it stops? >> well liquidity dries up. if we think that liquidity is poor now it will be even worse two, three, four five years from now when these maneuvers typically stop. you know you would think that a central banker wouldn't stop if they knew that it would produce a crisis type of moment and lots of volatility. but central bankers don't exactly know the way home and so we'll just have to see. but the global markets have benefited to the extent of trillions of dollars of liquidity over the past few years and we have to wonder what happens when they don't? >> this seems to be the whole of the car chase, the helicopter-car chase. the metaphor may be that we've been watching this slow-motion
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car chase waiting for the car that's being chased to run out of gas. and maybe that's the market. and that the car just seems to continue on further and further with an endless gas tank. how much longer do you think this can go on? because there are people that have been waiting for are this to end badly now for a couple of years. all that's happened is that investors have missed out on some good returns in many cases. >> that's the bain of a portfolio manager. you can wait it out in cash and earn nothing or you can participate and hope that you can time it properly at the moment of the end. but as you mentioned, it's been five or six years and the markets have done very well and checks are still being written. it is almost like a tag team match in which the fed has transferred or tagged their partner with the ecb and boj. corporations are chipping in and china's doing its part. and so one after the other, they take responsibility for writing checks. >> what happens when there's no one left to tag? >> again, theoretically, they
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won't stop unless they think the economy has normalized. the problem being that the normalization may happen at a point in which inflation is not 1% but 2% or 3% or 4% and therefore the bond assets and stock prices might be heading lower. >> we tend to treat the fed's words as gospel and draghi too, perhaps, the ecb. you just said a few moments ago that maybe the fed doesn't know the way home. as one of the world's prominent investors, how much do you treat the fed's words as gospel versus its's a suggestion but i'm going to with bill gross things. >> i have a coffee mug that says don't fight the fed. >> is this that simple though? >> no. because on the other side i've written in with dark pencil "but be very afraid." >> market that on alibaba. >> but it also means that you should have an opinion in terms of what they're doing and the effects that it's having the
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repercussions, the economic growth, inflation going forward. because they're basing their policy on models of 20 or 30 years ago and we're in a new world. they're basically moving in the dark much like investors are so you have to have your own idea. >> if pinpoint one thing that the fed may be doing wrong? >> well i'll pinpoint in the last few weeks what's happened. and it hasn't been janet yellen but it's been stan fisher and mario draghi, the chairman of the ecb. basically, both of them have come out and very unusual fashion, almost like a fireman in a crowded theater yelling fire. it just doesn't happen. but they basically came out and said watch out for volatility while central bankers have been trying to dampen volatility for the past five years. to me that was a signal. to me that basically said they want longer term rates to go higher. now, why would they want that? because insurance companies in europe, insurance companies in the united states, pension funds and so on are suffering with 2%
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to 3% long-term yields. they need higher yields. >> they're talking the insurance company's books? >> i think so. and i think what we've seen in the past few weeks, it hasn't been a taper tantrum. it hasn't been a situation where the yield curve has flattened and short rates are going up. it's been a situation where the long rates are going up. and i think the investors are beginning to recognize they want longer rates to move higher in order to salvage business models. >> in a moment of candor you admitted your call, by the way, on the german bond market was a hell of a call. the problem was, you didn't execute it properly. you said it on our show a short while ago. so with the big move in treasuries recently or whatever else you see out there globally because you can pretty much do whatever -- that's why they call it an unconstrained fund. >> that's right. >> what is the single best idea tree you have made recently? >> the best idea that hasn't worked yet, it's only been underway for about a week or two.
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>> this is one you have actually put on versus the -- >> yes, and will continue to put on, you know, subject to price. but it's mexico. mexico has 7% nominal interest rates. mexico has 3% real interest rates. that means even though mexican inflation is higher 3% or so, relative to the united states that's all adjusted for in terms of a link or a tip. so mexican tenure lingers at 3%, u.s. ten-year tips at .5%. there's a 2.5% spread between those two. and believe me the quality difference doesn't justify it. >> so mexican government debt, one of bill gross's best ideas would be a headline from this interview? >> and the peso's been trashed by 20% to 25% in the past six months. you get the benefit potentially of a rebalance there. >> we've got to go in and do a panel. i'll see you in a few minutes. thank you very much. interesting stuff there,
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melissa, the mexican debt market may be the next big idea or is the next big idea from bill gross. i've got to sign off, we're going to do some panelists here but i'll be back in studio tomorrow. the joys of business travel. back to you. >> enjoy, brian and safe travels back here. meantime a big rally on wall street. the nasdaq up for the first day in three. we've got the biggest winners up next. there's a more enjoyable way to get your fiber. try phillips' fiber good gummies plus energy support. it's a new fiber supplement that helps support regularity and includes b vitamins to help convert food to energy. mmmmm, these are good! nice work, phillips! the tasty side of fiber, from phillips'.
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. the nasdaq in the midst of a rally. you see behind me a sea of green, only 7 members of the 100 trading lower. the winners, though, alexion pharma. the losers dish, discovery, "power lunch" is back in two. or stop to find a bathroom? cialis for daily use, is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision
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you probably know xerox as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business.
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we've seen a lot of stock movers. here with the story. what's going on? >> that's right, you showed the nasdaq 100 and at the bottom was regeneron regeneron. they did recommend for approval of the cholesterol drug. >> a narrower population than expected. they've got another cholesterol drug in the mix. and some of the narrower patient population ideas may be weighing heavily on that stock. they depend on this group of patients that can't tolerate the common drugs like lipitor. >> they expect the fda to come out a little bit less conservatively than the panel has. so probably not game over for espirion.
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>> as we noted to you, netflix is a big winner right now and tonight at 5:00 we are speaking to the biggest netflix there on the street. he'll defend his $270 price target. 5:00 p.m. eastern on "fast money." meantime, "closing bell" starts right now. hi and welcome to the "closing bell." >> simon hobbs in for bill griffith. a big rally on wall street sending the dow back into positive territory for 2015. and the nasdaq is within striking distance now of its all-time high. >> while stocks are surging today, there's actually been a bear market happening in 20% of the names in the s&p 500. we'll bring you the details on those whether the investors should be worried and see opportunity coming up. oil, meanwhile, a major catalyst behind today's big moves. crude prices pumping higher and fueling a big rally in energy stocks.

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