Skip to main content

tv   Power Lunch  CNBC  August 7, 2015 1:00pm-3:01pm EDT

1:00 pm
out of business. i really don't see that at all. i think you're going to get some update into them hitting ebitda targets for next year. >> i saw some put activity. i hope it is not that for jim's sake. >> have a great weekend. all of you as well. "power lunch" starts now. thank you very much. welcome, everybody, to "power lunch." i'm tyler mathisen. what does 215,000 jobs means to the federal reserve? it has been, of course, a very tough week for the dow. what does that jobs report mean for equities? the index down more than 2% this week alone. a very pivotal time in the middle of the summer. mandy is out today. doing a little home time down under. we begin with simon hobbs at the new york stock exchange. >> stocks continue to sink. the dow is now down for its
1:01 pm
seventh straight session. dropping triple digits today. for the year the dow is actually down the better part of 3%. s&p 500 is still positive for 2015. but it's broken a technical level, slipping below the 200-day moving average. twice in the summer it has bounced on that. will it do that from here? the dollar hit highs not seen since april, but if i'm looking at the screen to the right of me correctly, it is raised those gains and now in negative territory for the session overall. despite that, oil continues to be under pressure. prices down about 5 1/2 percent for the week. oil light sweet crude is just trading above $44 a barrel. if we break that it will be significant. check out the yields on the benchmark 10-year treasury notes. yields down to 2.18%. despite the view that the fed might be hiking on this payroll data in september. vrm the nasdaq is the biggest loser right now. kate rogers is following the action. >> it is not quite as ugly as it
1:02 pm
was here yesterday. we are less than by than 1% after closing lower by 1 is.5% yesterday. one of the biggest losers here today is netflix. in the nasdaq 100, it is lower by more than 2.5%. it was being hailed a winner in all that talk about court cutting but it is lower today along with charter discovery and dish. another loser to watch out for is the biotech etf here at the nasdaq, the ibb, lower by 2% after closing lower by more than 4% yesterday. nvidia is the biggest gainer today in the nasdaq 100 after a strong earnings report yesterday showing strength in a weak pc market with increased revenues in its auto and gaming. >> kate, thank you. steady as she goes, the u.s. economy adding more jobs last month. but not enough to make the unemployment rate go. is a september interest rate hike still on? steve leisman here to put it all into context for us. it is hard for me to think that these numbers tilt either way.
1:03 pm
if you thought a rate hike was likely in september, you're probably no mo are or less likely now. >> fair enough. but a lot of folks thought a rate hike was likely in september. ergo ipso, rate hike in december. many see it as green liglightin go in september because it means the fed's criteria of "some further improvement in the labor market." it is a very difficult probability to calculate but it is between 50% and 60% using fed funds futures right now. 16 of 17 economists who we either talked to or read their reports today call for a september hike. here are the numbers that they see at greenlight. 215. may june revisions to the positive side, sometimes an indicator of strength. unemployment rate held down to the big drop down since june. hourly wages not so great but
1:04 pm
not as bad as they were. participation rate also unchanged. but folks, there is still a market out there of ideas. one prominent analyst thinks september is where everyone will remember. >> we look at where the center of the committee is, where the leadership is, their baseline has been a december hike as of the june meeting and some of the speeches in early july and we haven't really seen anything either in the data or in the communication that has changed that. >> here's the question with september baked in for so many people, there's now the speculative discussion on whether it will be one rate hike this year or two, because we never run out of things to debate. >> let's talk more about the jobs report and what may be next for the interest rates and the economy with bill rogers, professor of economics at rutgers, former chief economist at the labor department. mr. rogers, welcome to have you
1:05 pm
here. when i say mr. rogers, i'm thinking of a nice sweater and some slippers. >> that's what i got my ph.d so i can be called dr. rogers. >> that's right. we'll call you dr. rogers. what does this report say to you how strong the economy is number one and the likelihood that the fed will move. >> it is a steady as you go economy but i still see incredible weakness. i took today's unemployment rate, 5.3%. we've been there for four months. i jettisoned ourselves back into history going back from world war ii to the present and found other months where we've been in this range of 5.3%, 5.5%. you look at the participation rate, it is much lower today than it was in those previous periods in the 1990s when we had stronger economy. >> is it more of a demographic
1:06 pm
change or folks are discouraged? >> my take is that a lot of people are retiring. >> i disagree with you. >> that people are retiring? >> not that people are retiring. but if you take people 25 to 54 years of arnlge, prime working , you see their participation are lower still today. >> i agree with that. >> i tend to be more in the camp that it is around we're seeing large -- number of openings today are higher than those 5.3% economies back in the 1990s, 1980s. but it is that the hiring rate seems to be lower today. >> you said something interesting a minute ago, that was that if you thought that a rate hike was probable in september, there was really nothing in this report that would dissuade you from that. correct? >> right. >> did you see anything in this that would say, hey, wait a minute, there's -- this is weaker than we thought? >> i think in terms of this report by itself i think we look pretty good for a rate hike some time this year. >> 58th straight month of job growth? >> 68th.
1:07 pm
>> 58 months and we have been over 200,000 now for i want to say 17 of the last 24 months. >> but back to my earlier point about comparing this sort of 5.3% economy to previous 5.3% economies, history, there i think you start to see some messages that we still are moderately weak. >> still what? >> weak or at least we're not ready for a rate hike. my view. >> i want to take off from what he's saying. i've been listening to you for a long time. lot of hiring going on but a lot of people on the sidelines. speaks of a mass of skills mismatch. one of the reasons why people have dropped out is because they don't have the skills and people don't want to hire them. that changes things for the fed in terms of how much time they have, too, but it also puts pressure on washington to say we need to find a way to get people back to work. >> exactly. back in the late 1990s when i worked for secretary herman, we talked about there was this
1:08 pm
incredible skills shortage because we had an unemployment rate that was extremely low. we had strong, robust and continuous job creation. what we've called upon congress to do is make sure you need to be investing in education and training to meet those -- >> but it talks about a fed that it can't do much more -- >> the fed is -- the fed -- >> monetary policy is not going to get people's skills to go back to work. >> the fed is at that point where their work is done. >> dr. rogers, dr. leisman, thank you very much. >> thank you. >> have a good week. sir tyler. it dominic chu now has a news alert from the oil patch. >> of course, if it's friday it must be rig counts. baker hughes weekly rig counts coming out with u.s. oil rigs up six to 670 total rigs. again a gain of six oil rigs in the u.s. to a total of 670. context wise we are still down 918 from the same time last year. still though, the weekly high-frequency information coming out with ripping counts showing that we have gained six
1:09 pm
this time around so we'll see in any kind of real reaction happens in crude. nothing significant so far but again you see crowd down by 1.5% today. >> we will see if it breaks below $44 instantly. thank you very much for that. shares of cheniere energy soaring. carl icahn saying the shares are undervalued and that he may seek himself a seat on the board. today's big gains helping to trim losses for the stock this year to about 2.5%. to the wildfires blazing across the western united states. the cost of fighting the flames is rising at an alarming rate as well. for the first time ever, u.s. forest service is spending over half its budget on controlling fires around the country. it expects costs to reach $1.2 billion this year. the rising expenses come during an exceptionally dry summer in states like california, oregon and idaho now plagued clearly with wildfires.
1:10 pm
the main cause of this change is that fire seasons today are 78 days longer than they were three decades ago. meantime, a major upgrade to the suez canal opening in egypt this week. it's bigger, but is it better? cnbc's hadley gamble is live in cairo with more. >> reporter: hey, simon. they are calling this egypt's gift to the world. 22 miles of canal at a whopping cost of $8.5 billion. essentially what this now means is that you're going to have two avenues for ships to pass through the canal. they say this will cut back on time and cost and they're also digging in deeper basically so that they make room for these massive container ships that we see today, those that contained as much as 20,000 containers. of worcourse they had to move 2 pyramids pea pyramids' worth of dirt. that was all under the direction
1:11 pm
of the company's president, el sisi. $30 million spent over the last 48 hours just to promote this new canal, pomp, pageantry, a yacht, really exciting for the country and lots of media coverage. hundreds of international press gathered here in egypt to cover the opening of this canal but of course the bigger question is going to be is this going to deliver, is it going to deliver the $13.5 billion per year in revenues that these folks are hoping. will occur by at least 2023, that will more than double the revenues they are getting now. they are getting something like $5.5 billion in revenue per year. that's the question, can they achieve that kind of growth in the growth environment that we see today. so big questions. but folks in cairo tell us this was a matter of national pride. could they get this done, they did it, and they did it within a year. whether or not they get these
1:12 pm
revenues they were hoping for, this is a major source of pride for the egyptian people. >> let's hope they do for the people who actually paid for it. it's becoming a lot tougher to flip homes in this market. but for those that do, there is a lot more money to be made. the most profitable zip codes in this country for flipping and what it takes to flip for the best returns next. you're watching "power lunch" on cnbc, first in business worldwide. (vo) rush hour around here
1:13 pm
starts at 6:30 a.m. - on the nose. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading. that's why we've built powerful technology to alert you to your next opportunity. because at scottrade, our passion is to power yours.
1:14 pm
1:15 pm
cablevision beating earnings expectations thanks to an increase in fees. the stock part of the media meltdown this week, down about 9%. but cablevision is still up 23% for this year, partly as a result rf takeover speculation perhaps from the french. hershey's getting hit today. the chocolatemaker posting mixed results. profits beat but revenues missed. it is also cutting its outlook. pepsi has begun shipping its new diet soda. the formulation will exclude aspertame. the dow is down 133. simon, we're watching shares of twitter right now down another 2% today. a new record low of about $27. you can see now $27.09. remember the twitter ipo priced at $26 a share back in november 2013. we are getting very close to that level.
1:16 pm
stock has been sliding since that earnings report in july that many investors consider to be rather disappointing. just more interesting states and we are crunching through the numbers with our data team. it rose 187% in just to the record high levels from the ipo price only to lose 64% through today and in the last four months, tyler, again just the last four months twitter has lost half of its market value during that time frame. >> 23% in just the past one month as that chart shows there. to the american housing market we go. flipping homes all the rage of course before the housing crash. has become a lot harder to flip in today's market. but for those who do, there is more money to be made. diana olick looking at what it takes for flippers to get the best returns these days. hi, diana. >> reporter: hi, ty. look, rising home prices are just making house flips like this one harder and riskier. but like you said, a lot more lucrative. the investor here spent about
1:17 pm
$400,000 totally transforming this flip. while it hasn't sold yet, he does expect to make almost as much in net profit. pits's taking longer though than he expected is and that's par for the flipping course today. home flips made up just 4.5% of sales in the second quarter of this year according to realtytrack, and that's down from a year ago. flipping returns though, that's the gross return on investment, increased to nearly 36%. up from 24% a year ago. the return before the rehab costs averages about $71,000. that's up from $50,000 a year ago. flippers should proceed with caution though in the next 6 to 12 months as home price appreciation slows and a possible interest rate hike could shrink the pool of prospect perspective buyers for the flips. where are the best metros to flip? nevada and florida still see the
1:18 pm
most flips because they have the most distressed homes. but it's chicago, dayton, ohio and baltimore that are giving the flippers the best returns. still, buyers today are looking for high-end finishes so tips for flips -- put the money right here in the kitchen, go up, do the bathrooms, and smart home technology. size is one thing, but i'm telling you, the amenities really sell. >> that's great. diana olick, thank you very much. in the meantime, some of the most clicked-on stocks in the world. we'll tell you the names and how they've been performing in the recent sell-off. also ahead, as we head out, a look at the s&p 500 heat map. much of it in the red today. the s&p breaking below its 200-day moving average. it's bounced on that twice this summer. will it do it again? "power lunch" is back in two.
1:19 pm
why should over two hundred years of citi history matter to you? well, because it tells us something powerful about progress:
1:20 pm
that whether times are good or bad, people and their ideas will continue to move the world forward. as long as they have someone to believe in them. citi financed the transatlantic cable that connected continents. and the panama canal, that made our world a smaller place. we backed the marshall plan that helped europe regain its strength. and pioneered the atm, for cash, anytime. for over two centuries we've supported dreams like these, and the people and companies behind them. so why should that matter to you? because, today, we are still helping progress makers turn their ideas into reality. and the next great idea could be yours. or building the best houses in town. or becoming the next highly-unlikely
1:21 pm
dotcom superstar. and us, we'll be right there with you, helping with the questions you need answered to get your brand new business started. we're legalzoom and we've already partnered with over a million new business owners to do just that. check us out today to see how you can become one of them. legalzoom. legal help is here. welcome back to "power lunch." let's get you caught up on what's happening with the markets right now because we are near our worst levels today, down by .75% for the overall s&p 500. this on the jobs day when everything came in line with expectations creating 215,000 new jobs in july last year. the s&p 500 down by .75%. 2,069 the level. a lot of people watching these key technical levels going forward. as for the sector check now, there is only one slice of green in the entire market right now
1:22 pm
for the s&p 500. utilities stocks. the more defensive names, the ones that pay those hefty dividend yields. up by nearly 1.5% so far today, followed up by telecom, then technology stocks. relative gainers so far today. as for the performing sectorses, energy, materials and health care. we know oil continues to slide. energy stocks down by over 1% right now. materials and health care as well. it is interesting right now, yes a couple of the defensive sectors are doing relatively well. utilities the only green sector right now. energy continues to lead with oil price declines today. all of a sudden we're watching what's happening on that side of the market. again, remember oil had a decent bounce yesterday as well as -- oil didn't have a bounce, energy stocks did but certainly something interest developing on that side of things. perhaps that weakness is showing up again on the energy part of the market. >> just as you were talking there, we actually slipped below $44 on light, sweet crude. we very quickly came back and retook that.
1:23 pm
but we are watching oil up $44 would be a major break from where we already are. over to the bond pits with rick santelli in chicago. >> hi, simon. look at the dollar index intraday. it gives us so much information about everything in the marketplace. started out with a bang, and it gave it all up. that bang, by the way, opened the chart up to mid-april. that would have been the last time we settled at the earlier intraday highs that we have come off of. the residual, the lasting effect we see in the market. here it is. 10s minus 2s. yield curve flatter. why do we say flatter? because short rates are up higher than long rates. usually a condition that seems to point to the notion that investors have a nervousness about the fed actually doing tightening, removing accommodation in the near term. if you look at it two years specifically, that's one of those yields that's stubbornly high flattening the curve. it is more of a passive
1:24 pm
flattening. what's that mean? you see the last time we settle at 74 basis points or higher on that chart. it wasn't that long ago. we really need to get above that level to be more proactive on flattening. even though the flattening has tugged us up to level we have already closed above in that 2-year note. back to you. >> have great weekend. now to gold prices as we transition from bonds to the metals. tracking for seven straight weeks of losses in gold. prices right now are higher, however, by $4.30 the ounce at $1,094. that's about .33% of a gain on the day. silver, copper, palladium and platinum, copper and palladium are in the green and the silver is up 1% and platinum up .5%. they are among the most watched stocks in the market right now and domini chu has some names.
1:25 pm
>> good afternoon. what's happening right now with these stocks. every time you click and search about a name or quote for a stock, we count them. we have the most popular stocks you, the viewer, have searched cnbc.com over the past few months. that's after the break. keep it right here on "power lunch." a new sea chance to tryew look. something different. this summer, challenge your preconceptions and experience a cadillac for yourself. ♪ the 2015 cadillac srx. lease this from around $339 per month, or purchase with 0% apr financing.
1:26 pm
everyone loves the picture i posted of you. at&t reminds you it can wait.
1:27 pm
1:28 pm
i'm morgan brennan. here's your cnbc news update for this hour. a new search mission has begun on reunion island to look for more debris from missing malaysian flight 370. french military forces on the ground, in the sar and on sea are involved in the week long search as many relatives of the victim still don't believe the wing fragment found on the island is from the missing plane. apple spent $00,000 a year to protect its ceo tim cook but that isn't a lot of money compared to other tech firms. amazon spent 1. million on jeff bezos' security and oracle spent $1.5 million on larry ellison. the chicago police department will allow independent evaluations of its stop and frisk procedures under an agreement with the aclu.
1:29 pm
critics say the police procedures unfairly target black people. kim kardashian taking this selfie with democratic candidate hillary clinton last night. she posted it to her 42 million instagram followers saying she loved hearing hillary speak and hearing her goals for the country. that's a cnbc news update at this hour. back over to you. clearly the stock market is front and center for many people. it's been one hell of a week really as we look to the weekend. stocks trending lower following the jobs report. on the up side today, let's mark that though. up for the nasdaq, tech firm nvidia up 10%. viacom up 2.5%. after all the weakness we've had within the sector. keurig which has also had a lousy week managing some small bounce there. both of those stocks there are down 20% for the week. on the downside, micron technology, biogen and charter communication they see in negative territory.
1:30 pm
stocks falling to session lows then with the dow headed for a seventh down day. now down 3% for the year. the s&p 500 is retesting its 200-day moving average. what's important to point out here is that we've done this twice this summer. on both occasions you see the way in which the market rips higher. because people buy the dip. jim cramer said though that investors are now reluctant to buy the dips. so can you find value in this market? do you buy here? on the right of your screen, andrew slimon, and ken camen. do you buy the dips? >> i would. i think the biggest fear now in the market is the fed, that they're not going to raise rates. >> sorry. the biggest fear is that the fed won't raise rates. >> that they won't raise rates, meaning that they're going to delay to december and prolong this pain that we have. we just need to get a fed move
1:31 pm
behind us. i won't say it will be all clear after they do that but people are going to be happy that they're buying into the dow now. in it the old adage buy on the manufacture, sell on the news. it is the exact opposite. >> the economy is strong. it is telling people the economy's strengthening. historically the market does well after the first fed rate increase. so i think that's what's going to happen, we're getting this news behind us. it is only 25 basis points, then the market will rally. >> central bank has never waited this long. we're six or seven years now into emergency funding. they've never waited this long to act. so a lot of your usual -- no doubt they've always worked in the past but not potentially this time because this time is really different. >> maybe, maybe not. maybe it's just because the economy's been in such a slow-growth environment a lot longer than normal.
1:32 pm
that's why they've waited this long. also i think the news of the fed rate increase has been so well telegraphed. we've just got to get behind this. what's happening this month is just the losers are rallying, and winners are selling off, it is a classic august. >> what do you think is going to work best year end? for the next year. >> i should think you start looking at financials again if we start getting a little bit of interest rate ability for them to make some money. >> do you think that's likely? do you think they're going to have enough from the federal reserve to trigger that? financials have really not done what many of us hoped they do. big part of the market. >> i agree. probably not to be real jet fuel for the market. but if you look for places to go in a mark that's been kind of range bound, that's not a bad place to go. i still think you need to look overseas. europe has that printing press going so we're going to see the effects of what we've lived through the last few years over there. >> i love you start the conversation by saying you should buy stocks when they raise rates and then say go where they're not raising rates. >> because they're printing
1:33 pm
money. >> growth stocks probably will continue to do well. >> what do you -- >> i think as much as it is hard to believe, i still think there is a lot of health care opportunity. health care stocks are selling off because it is a classic august. you should set up to look to buy some of those going into september. could be a very good opportunity because september is a month when the winners regain their momentum. that's been health care year to date. this is a great opportunity to figure out which companies met their numbers, beat their numbers, doing well, reasonably priced and they sold off because it is august. line those up, get ready to buy them going into september. great buying opportunities. >> quick question for you both -- i should know the answer from what you've said -- will the market be higher or lower by the end of the year? >> i think higher from where it is right now. >> higher. >> substantially higher? >> higher. higher. >> appreciably higher. >> will it be a fall rally or a santa claus rally, that's the
1:34 pm
question. >> nice to see you both. have a good weekend. go to -- yes with be please do go to powerlunch.cnbc.com right now to see why andrew is not worried about apple. many people of course believe that apple is the talis man in all this. dow currently down 108. >> speaking of apple, we're going to hear more about it right now. we asked the question, which stocks are being most closely watched right now in the recent sell-off. dom chu has looked at stocks you, the viewers of cnbc.com, have clicked on the most. >> when i wake up in the morning and want to see what's happening with the stock market, i go in to my cnbc app, type in the ticker, what's this doing or that doing. they aggregate all of that data. they say across all of our viewers, who's clicking on what,
1:35 pm
what stocks have they been most interested in. over the past month we've compiled all the numbers and this is the top ten list in, again, order of clicks. these ten and what their one-month performances have been during that time. if you look at number one to follow up on simon's point here about that story up on "powe powerlunch.cnbc.c powerlunch.cnbc.com, apple continues to be, as has been for quite some time, the most clicked on or most searched ticker in the cnbc.com universe from a single stock perspective. those shares down about 9%, so again near that correction territory area that everyone is wondering whether they should buy in or not. remember during our competition yesterday it seems that most people think that apple seems to be the best dow component that's currently in correction territory that they'd want to own longer term. we'll see if that plays out this time around. facebook, bank of america, netflix and twitter, the top five most clicked-on tickers that we have on cnbc.com. disney, amazon, ge, fitbit and
1:36 pm
tesla round out our top ten. some reason people really have interest here, look at some of the charts. netflix, just so far year to date, we know it is up 34% over the course of the last month but with netflix you are talking about a huge gain just so far year to date. that's impressive. you can see right there, 153% on a year to date basis. on the other end, you just heard us talking about twitter on a "market flash." we're getting within striking is distance of that $26 ipo price. that's not been a pretty chart for twitter. that's why some of these people are clicking on here. but again interesting to look that you, the viewer, find these ten stocks some of the most intriguing or at least the ones you want to find out more about. keep going to cnbc.com and we'll kind of update you and show you what the hot stocks and hot
1:37 pm
interest items are. >> thank you very much. for more analysis on the stocks dom is talking about and much more beyond that, go- to "power lunch."cnbc.com. our wealth editor robert frank joins us now to break down the jobs report. >> really interesting quarter and broader message about the market. new ceo tad smith shaking up the storied auction house with a new vision and share buyback but investors are little nervous about the overall art market especially weakness in china. sotheby's earnings falling short of expectations with currency impacts, the timing of a big london sale and the loss on a multi-million dollar painting. smith outlined his plans to turn sotheby's into what he calls a high-end client service company rather than just an art auction house so he's going to grow into jewelry with be wine, cars, financial services, expand all those businesses. also expand the middle market.
1:38 pm
that's priced at $25,000 to $1 million and expand on the west coast and other new wealth centers. he's doubling the share buyback program from $125 million to $ccl million. but there are growing fears of a broader slowdown in the global art market with total art sales in china and hong kong broadly down 30% in the first half. the question now is whether china's troubles are going to spread to new york and london. >> if you look a bit more closely at the auctions, what you see is that the population of buyers is very discerning. quality is continuing to sell at very high prices. and things that are not as high quality are finding a little bit rougher road. >> the big test for that rougher road is going to come in the fall sales. smith saying so far the pipeline of high-quality art looks pretty robust. we know we're going to get some good art in the fall. the question is whether all those buyers from russia, the middle east, latin america,
1:39 pm
china, that have been holding up this market, whether they all come out and bid. >> sotheby's maybe my favorite ticker symbol of all -- bid. 215,000 jobs added to the economy last month. what it means for the market, for the fed and for people who are still looking for a job. mayor mark marrial -- morial and ron christie will join us right here on cnbc, first in business worldwide. no student's ever photographed mean ms. colegrove.
1:40 pm
but your dell 2-in-1 laptop gives you the spunk for an unsanctioned selfie. that's that new gear feeling. get this high performance laptop bundle for only $399. office depot officemax. gear up for school. gear up for great. when a moment spontaneously turns romantic, why pause to take a pill? and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating 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.
1:41 pm
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, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. why pause the moment? ask your doctor about cialis for daily use. for a free 30-tablet trial go to cialis.com welcome back to "power lunch." shares of american express are now popping. just about 3% near their best levels today, this on bloomberg headlines that valueact capital is said to have taken a $1 billion stake in american express. that makes american expresence the best performer of the dow
1:42 pm
today as the stock has been under pressure all year about all of those headlines about losing all of the revenues associated with its partnership with costco. right now, remember american express is the only credit card that's accepted at costco and it accounts for a large chunk of their business. a very large story here about a dow component. interestingly enough, one of the stocks that we talked about during that -- "which stock would you buy on the dip from the dow" story we did yesterday. so a very interesting headlines for sure. >> valueact is also very interesting. they've taken interest in smith's and rolls-royce recently as well so they're obviously becoming much more active. you wonder if this is now the season. we were talking earlier about the down days of august and whether that presented a buying opportunity for september. clearly even ackman has been making moves in this environment. maybe now is the time to pull the trigger more broadly. >> what's interesting about this, we put up all these stocks yesterday about these dow stocks
1:43 pm
that are in correction territory. there are 12, 13, 14 of them given the market moves. american express is one of them. interesting part about this is a lot of that bearishness happened because of what's happening with the lost business at costco and what amex can do to recover from that. part of the story here says that valueact is said to be considering the pursuit of changes at american express. you wonder what types of changes, if they were to happen, could help really turn things around at amex. still a dow component. it's had a rough go. >> look at the earnings growth in real time. >> thank you, gentlemen. july jobs report basically in line with expectationses, 215,000 jobs kree yeaed last month, unemployment rate right where it was the month before, 5.3%. are we headed in the right
1:44 pm
direction. mark morial and ceo of the national urban league and former mayor of new orleans. and ron christie. this is the 58th, 59th straight month. jobs growth. >> we have to take it given where the economy was six or seven years ago with substantial job losses but we need to underscore the fact that you have wage stagnation, and and lot of work yet to be done on the economy which is why i think a rate hike is not a good idea because i don't see the inflation which justifies it. >> that's been the main worry, ron christie, of the federal reserve. unemployment is roughly where they seem to want it, but inflation sure isn't. is it? >> that's exactly right, tyler. if you look at what mayor morial just had to say, you can take
1:45 pm
some comfort in the fact that we've had modest job growth for the last several months but i work about the labor workforce participation rate. it is the lowest it's ever been in the united states. 93 million people are out of work, either looking for work or looking for full time employment and there is still a lot more to do. "business daily" had a report earlier this week saying this is the worse o'economic growth period since world war ii. there is clearly a lot more that we should be doing to get the economy back on track. >> to your point, bill rogers of rutgers just earlier this hour talked about the low labor fors participation. it is not merely that old guys like me are retiring and dropping out. it is that there are a lot of people in the prime earning years who have basically opted out. i was going back and i looked at some numbers. this has been a stretch of tepid growth, a recovery. we've had stretches, ron christie, mayor, where we've had low growth before. >> we have.
1:46 pm
>> we did a decade ago. >> we need stronger growth but we also need growth that's going to benefit middle class, working class americans, because wages are stagnant. look, a number just came out that the average american family is worse off today than they were in 1989, primarily because wages have not kept pace with inflation. i think this is going to be an issue for the 2016 election. >> you've given me a beautiful segue to ask ron christie, former deputy in george w. bush's white house about the debate last night. it was really -- i'm jumping on the jim gilmore bandwagon, frankly. who who did you think showed best and who hurt their candidacy the most? >> well, i'll do it in pairs, tyler. i think the two who really shown last night were carly fiorina, they came across as extraordinarily poised,
1:47 pm
collected, intelligent. and my former boss by full disclosure, ohio governor john kasich who i think presented himself as an alternative to the republican establishment. i think jeb bush and donald trump actually hurt themselves. bush looked a little flat and trump did not look really presidential on top of his game. those are my winners and losers. >> i happen to agree with you on john kasich. for what it's worth, i thought he came across as real authentic and certainly had the home field advantage. >> other than john kasich, no candidate last night talked about the locked out and the left out. john kasich made a reference to those in the shadows and i think this is a signal to the idea of what we ooh saw jeb bush do during the urban league conference, and that is the necessity to reach out beyond one's own political base if they are going to be a serious general election candidate. >> i see the undercard. i would describe it more of a sound check.
1:48 pm
>> they called it the kid's table. >> i certainly have heard that miss fiorina did well. let's turn to your meet be, the national urban league, a week ago where both hillary clinton and jeb bush appeared. the reports that i read the next day said that miss clinton was pointed and perhaps personal in her critique of jeb bush. did you see -- and to the point of almost being uncomfortable as perceived by the audience. did you see it that way? >> hillary clinton was a crowd favorite and a crowd favorite of urban league supporters, primarily because she's familiar to them. she's been to the urban league before. and i think she did what she needed to do. she i think explicitly addressed issues of racial justice and economic opportunity in a very clear and unambiguous way. yeah with be she took a jab. that's politics. but i also think jeb bush accomplished what he needed to
1:49 pm
accomplish, which is demonstrating that he was willing to come to the urban league and reach out beyond his base. so i think both of them got what they wanted. bernie sanders got some great applause lines. martin o'malley spoke about, if you will, criminal justice. ben carson came and he's familiar to the urban league because we've honored him before as a doctor. this is the first time -- i think people had a chance to see him and feel him as a candidate. he was less scripted than the others, i think, did not have the -- >> i liked his line last night where he said i'm the only one on the stage who's taken out half a brain. then he had some reference to people in washington having half a brain. any final thoughts there, ron, just to tie it all off? >> i agree with my friend marc morial. i think it is important for republican candidates to go beyond their traditional base and to reach out a hand and say, i have some things i want to is say, i'd appreciate the opportunity to ask for your vote, and i think the you are bab league is an excellent sounding board for all
1:50 pm
politicians to have the opportunity to do so. i thank my friend for having that forum and i'm sorry i missed him. >> we policed you. >> gentlemen, we'll see you next month. >> count on it. viacom, fox, time warner, news corp. all trying to recover from what's been a lousy week for media stocks. the stocks that are feeling most of the pain -- next. no student's ever photographed mean ms. colegrove. but your dell 2-in-1 laptop gives you the spunk for an unsanctioned selfie. that's that new gear feeling. get this high performance laptop bundle for only $399. office depot officemax. gear up for school. gear up for great. i built my business with passion. but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business...
1:51 pm
that's huge for my bottom line. what's in your wallet? whehe trusts onlyon duracell quantum because it lasts longer in 99% of devices.
1:52 pm
i'm a gas service my nrepresentative. n. i've been with pg&e nine years. as an employee of pg&e you always put your best foot forward to provide reliable and safe service and be able to help the community. we always have the safety of our customers and the community in mind. my family is in oakland, my wife's family is in oakland so this is home to us. being able to work in the community that i grew up in, customers feel like friends, neighbors and it makes it a little bit more special. together, we're building a better california. so i'm always looking kito get more fore. my money. that's why i switched from u-verse to xfinity. they have the most free on demand tv shows and movies on all my devices. it's perfect for me because my kids are costing me a fortune. i'm going to cabo! [ music plays ] don't settle for u-verse.
1:53 pm
xfinity is perfect for people who want more entertainment for their money. pay attention. these are this hour's "power points." shares of american express surging 5%. that's on a bloomberg report that valueact capital is taking a $1 billion stake. the number of u.s. oil rigs going online rose by six last week to 670. they are still well down from 918 a year ago. twitter shares are at a new record low of about $27 getting very close to the $26 of which they ipo'd or priced those shares for the ipo. twitter, of course, is down now 50%. it's lost half its value in the past four months. take a look at the etf that tracks the solar sector, up big in the spring but it has since
1:54 pm
given back all of those gains. are solar stocks headed for more declines or a rebound? we'll explore that next. 80% of the poor in africa are rural farmers. 96% of them are doing rain-fed agriculture. they're all competing with each other; they're all making very low margins, making enough to survive, but not enough to get out of poverty. so kickstart designs low cost irrigation pumps enabling them to grow high value crops throughout the year so you can make a lot of money. it's all very well to have a whole lot of small innovations, but unless we can scale it up enough to where we are talking about millions of farmers, we're not going to solve their biggest challenge. this is precisely where the kind of finance that citi is giving us, is enabling us to scale up on a much more rapid pace. when we talk to the farmers and ask them what's the most important thing. first of all they say we can feed our families.
1:55 pm
secondly, we can send our children to school. it's really that first step that allows them to get out of poverty and most importantly have money left over to plan for the future they want. dentist appointment when my teeth are ready? ♪ can it tell the doctor how long you have to wear this thing? ♪ can it tell the flight attendant
1:56 pm
to please not wake me this time? ♪ the answer is yes, it can. so, the question your customers are really asking is, can your business deliver? hi mi'm raph. tom. my name is anne. i'm one of the real live attorneys you can talk to through legalzoom. don't let unanswered legal questions hold you up, because we're here, we're here, and we've got your back. legalzoom. legal help is here. nbut your dell 2-in-1 laptoped gives you the spunk for an unsanctioned selfie. that's that new gear feeling. get this high performance laptop bundle for only $399. office depot officemax. gear up for school. gear up for great.
1:57 pm
slow summer friday? forget that. another down day. coming up, we've got smart practical investing advice just for you. a look at why one easy to invest-in country may be a better bet right now than the good old usa. an oil company ceo braving the storm to speak exclusively with cnbc about whether he sees any kind of bottom in crude. plus the breakest on that breaking billion dollar american express news today. we're at the new york stock exchange and will see you in two minutes. in the meantime, solar stocks getting slammed lately but sunedison trading lower by 32%. 35% on just the week so it is included in that rout. li'm looking at notes from you. they pulled out five stocks that you cover in the sector.
1:58 pm
four of them are an outperform. you obviously think this is a lu huge buying opportunity. why? >> what you have seen in the market has nothing to do with the fundamentals. we think the fundamentals come in very strong. the solar demand is going to continue to increase 20% to 30% per year for next several years. what you have is a temporary dislocation in the market and the biggest impact -- the two things i would point to, number one, is crude prices, although the solar demand has nothing to do with the crude prices but they always have a correlation. the stocks correlate to that. second, there has been a concern on the cost of capital that -- there was a lot of paper in the market raising capital and there has been concern on the cost of capital. some of the deals have not gone through as expected so that
1:59 pm
concern is impacting the near term. but i think the long-term fundamental remains very strong and we will definitely be looking to build position here. >> you have an underperform on first solar. briefly, if you would, of the other four, which do you think will be the best investments? >> so the rate -- underperform rating on first solar is because that's mostly a utility market they participate in. they have two projects which were signed back in 2009 and 2011, in that time frame, at very high price and the cost has gone down 80% or so since then. those are a very high margin business. the p and l looks great right now but the new project, i have low margins and that's the reason for -- >> briefly, just me the name of the best pick of the other four, if you would. >> i think longer term,
2:00 pm
sunvision is probably the best one but we into ed to wait probably listening to settle down. >> thank you, have a great weekend. joining us from rbc. >> simon, you have a great weekend, too. that's it for the first hour of "power." we got a lot more with brian. brian, take it away. thank you very much, simon and tyler. it is now 2:00 on wall street, 1:00 in st. paul, minnesota. the dow down 100 points. oil in the $44 range. now the 11th time in the past 12 sessions oil and the dow have gone in the same direction. the dow apparently heading for seven straight losing sessions. hello, everybody, and i guess happy friday. we've got you covered from all angles. i'm brian sullivan at the nyse. melissa lee a little bit uptown at the nasdaq. jackie deangelis right around the corner at the nymex where oil is traded. we'll get to all that throughout the next hour. right now we have big breaking stock story on a friday. that is a billion dollar
2:01 pm
investment in american express. it is having an impact on the dow as well. dom chu following that story. >> on heavier volume, right now the stock is up near its best levels so far today. it's up currently over 6% right now. 10 1/2 million shares have traded so far. just to put that into a little bit of perspective, the average volume for this stock on a three-month basis is around 5 1/2 million shares. already near double what the average trading volume is, this on again bloomberg headlines that valueact has taken possibly as big as a $1 billion stake in the company citing sources. the move in american express helped lead the dow off of its lows. it's good for about 30 points of this kind of bounce that we've seen so far in the stock today. but again just to kind of bring you up to speed, valueact, the hedge fund run by jeffrey oven, is said to be pursuing changing at the company and is said to have acquired a $1 billion share
2:02 pm
in american express. we'll follow this story all day. it is a dow component and it's been getting a lot of attention since it announced it was losing its credit card partnership with costco. >> is there any sense as to when he took that stake and what range the stock was when he bought it? >> we're still digging around. no exactly what the stake taken was or at what price it was done at. but right now i know we'll have more details on this story possibly just in the next few minutes or so here. i do know that the stock is moving rather sharply. it is now up about 5.5% to those levels here. but again just off its best levels today. >> mary thompson has been working this story. >> we do have a statement from american express saying that valueact is a well respected firm. we have been speaking with them as we do with other investors and look forward to continuing and constructive dialogue. at american express we are
2:03 pm
focused on building long-term value for shareholders and are always open to the views and perspective of our investors. i couldn't go et any details yet but am efforting that on how long they have been in constructive dialogues with american express. of course american express has been under pressure, most notably since it lost the exclusive costco account. that basically ends at the end of this year. the company has been far short of reaching its long term goal of a certain amount of revenue growth. 6% to 8% a year for some time now. just in the second quarter, it actually beat on bottom line thanks to expense cuts and buybacks. two of the tools that it's consistently used to beat on the bottom line. the problem has been top line growth for this company. something that's been a problem for the last couple of -- certainly the last year, the last couple of quarters as well. so investors very focused on what are some of the initiatives that will eventually pay off for american express not only to make up for the lost business from costco, but also business that will help generate the type of revenue growth the company has promised for quite some time but has not been able to deliver
2:04 pm
recently. back to you. >> let's bring in steve bigar of august research. he joins us on the cnbc news line. your reaction to this report. >> well, very interesting. i think the valueact does not come up in the financial space at least more recently. i've looked at our insider database, their largest holdings are valiant pharmaceuticals, about 25% of the portfolio. microsoft, halliburton, adobe, baker hughes. they really don't play in the financial space much. i can also -- to your -- an earlier point made, looks like as of march 31st they didn't have in he stake in american express. they must have built this over just the last couple of months. >> it is going to sound hard to believe, but in this day and age, you and i both know that $1 billion in a company the size of american express is actually not that big. do you believe that a million bucks in will be able to move the needle or affect change
2:05 pm
enough that will help shareholders at axp out? >> from the share price reaction initially it would appear so. i do agree, american express is close to an $80 billion market cap even after the stock performance of late, that's only about a 1.3% stake so not the typical 5% or so an activist would like to have to make board changes or shake up how they use their cash or the strategy. so it is a little bit light, at least initially. >> what can oven actually do? as mary thompson pointed out, they've got a revenue growth problem. they can't get costco back at this point so what are the other levers valueact could pull. >> >> that's spa good point. i think in covering the company, certainly i do kind of agree with what management is doing to try to replace the cost of revenues and looking with other relationships. they are a bit beholden to the macro environment, the spending
2:06 pm
environment. of course currencies have -- currency has been a headwind for them as well so it's not clear what strategy they would come in with that would be much different from what management is doing today. >> you don't really think that oven can do anything. he's in it for a billion bucks and you're skeptical as to what -- they're already buying back stock, for instance. can't push for that. >> well, you could always push for more of that. >> they've got more cash to spend? >> well, no. they've already got a pretty good buyback. he could buy back more. that could be part of it. people haven't complained about the amount of shareholder returns necessarily for american express. unless he's got some other deal in mind or some other type of strategy that would put them into new markets, new networks, that sort of thing, that's probably where he's going to play. unless they do something else to shake up internally at
2:07 pm
management, he must have some beef with the current trajectory though and we'll find out what that is soon enough. >> it was a $91 stock back in january of last year. it is now an $83 stock. that's part of the impetus. steve biggar, thanks for joining us. reports are that jeffrey oven at valueact, they are an activist investor, soen had call so-called, if you will, has put a billion dollars into american express. the dow is down just over 100 points. keep in mind, american express is effectively the only company in the dow 30 that's higher. caterpillar is up one penny. it's having no remunerative effect on the dow jones industrials. american express's pop is good for about 30 points of that. dow was down a little more before we got this news. certainly we'll get more on this american express news axp is the ticker. we are watching it. moving on to the macro
2:08 pm
markets. jim cramer on "mad money" last night said more and more investors are getting nervous about buying on the dips in this market. let us bring in the vice chairman and portfolio manager with aerial investments. charlie, if we call today, it will be seven down days for the dow jones industrial average. is this a buy on the dip opportunity or just a couple percent haircut in a natural, normal and maybe even healthy market? >> it's not a good reason to buy a stock because it is lower than it was a week ago. that's classic anchoring. in fact in anything, financial literacy and financial academic work shows you there is momentum in stocks. if they went down last week, it tends to be more likely to go down next week. so the time to take advantage of this is a stock where the fundamentals haven't changed at all but it is cheaper than it was a week ago. we do think there are some higher quality names where that's true but you have to be very selective. >> a little birdie just told me, i did not know that you know
2:09 pm
jeff ubben of valueact and maybe you understand american express pretty well, too. take us inside your friend's mind. what do you think the goals and strategies will be? >> i want to give a full disclosure. jeff was at a rival fraternity duke back in the early '80s when we were both at duke. one of his m.o.s tends to be to invest in names, consumer product companies with great brands, companies that are not going to be going down by 50%. it is a good company that could do better. i think that is what he sees in american express. we all think it is one of the best brands in financial markets, financial institutions. but probably thinks you could take that to an even higher level. >> a great brand doesn't make great stock. what are your feelings on american express as an investment? >> yeah. so we just haven't personally
2:10 pm
thought it was cheap enough at this point. we would have said that the mode around the business which has been so wide for so long is probably narrowing on the margin. so we just haven't found it attractive. but i think jeff views that he can come in and push things in this great brand and make it just a little bit incrementally stronger. >> how about this? would you invest in american express, kind of to follow up on melissa's point, merely because you have a so-called activist in there now? >> i'm going to answer no to that. it's not on our list of names where we thought that a change in the board or a change in management could have an immediate impact. believe me, there are a lot of names that fall into that category. we'll call this a place that could get marginal improvement but not a name screaming for activism. >> do you like a name in the payment space, that would be western union. why do you like this one? it's been long perceived as being behind when it comes to electronics payments and falling behind perhaps to paypal especially after the zoom being
2:11 pm
a acquisition. >> you used the perfect word -- perceived to be behind. western union's digital business is actually growing faster than zoom's. if you were an immigrant, somebody who had come to the united states and you were sending money back to your family in sudan, would you send it through zoom or western union? >> i might send it through paypal versus western union. >> well, actually, before the acquisition, paypal wasn't even in that business. paypal didn't have the compliance networks. and paypal doesn't have the office in. sudan to get that to receive that payment. your mom and dad probably don't have a bank account in sudan. what western union has is the offices around the world that gives somebody that doesn't have a bank account a place to get the cash. >> are you buying any oil or oil and gas related stocks, charlie? >> yes. i was afraid you were going to ask me that question. this is the falling knife. tough analysis. if anything, we are weighting the higher quality names. when exxon dropped, i have
2:12 pm
bought a little bit more. but there are names in this space with bad balance sheets. we expect to see some energy bankruptcy in the next quarter to two quarters. some of the lower quality names are the ones that have been hit hardest and we are avoiding those names. >> we didn't tell you we'd do this, but i saw in the paper, i just want to tale the viewers you won the father of the year are for the american diabetes association. that's a big award. obviously says a lot about you and your character. so congratulations on that. even though you went to duke! congratulations. >> thank you very much. let's go to dom chu with a "market flash." >> what we're looking at right now is just a quick check on exactly the biggest holders within american express stock. obviously the most high-profile largest holder is berkshire hathaway, warren buffett's berkshire hathaway with around 151 1/2 million shares worth of stock. just doing some quick math here, with 151 million shares, you are talking about a near $600
2:13 pm
million-plus maybe in the value of berkshire's holdings. among of large investors within american express, the large mutual fund names -- vanguard, state street, blackrock, whether it comes to etfs, fidelity also there. just looking at the top shareholders, far and away of course it's berkshire hathaway, warren buffett's berkshire hathaway with a large stake, about 151 1/2 million shares as of the last round of 13f regulatory filings. interesting to put some of those top holders in perspective. here at the nasdaq we're down .8%. biotechs continue to be the big story today. the ibb down again and down 4% for week. more than 80% of stocks in the index with caps of $10 million. biogen down 3% from its 52-week high.
2:14 pm
nvidia raised its revenue guidance thanks to an increased demand for high-end computers. the dax has been a beloved trade, it's up 20% so far this year. certainly outperforming the markets here. kevin kelly manages an etf tracking the 30 large esst securities traded it on the dax. >> thanks for having me. >> what do you make of the disappointing data? >> yesterday the german factory orders numbers were produced. inside the emu, exports were up 4.8% outside of the emu it was up 8.8%. when you start looking at names of the top holding, it is bayer. bayer reported earnings on the 30th. it's actually a biotech company. it's 10% of the index. their eye medicine was up 50%. its ebitda is up. these numbers are doing really
2:15 pm
well. >> sure. you manage and run an etf that tracks german stocks. is there any circumstance under which you would say, maybe it is time to take the pedal off on germany? >> absolutely. >> you would. >> here's what's happening in china. it is starting to slow down and that trickled through to bmw so they actually mention that in their earnings and said there is a little bit of a slowdown with sales and they're going to revise their earnings out the rest of the year down off of that -- >> my question is, is there any circumstance under which you would say maybe it is time to start lightening up on germany because the data is starting to turn weak and also it is off 7% from the april highs. momentum seems to be slowing. >> actually, i wouldn't. >> there is no circumstance under which you would say don't invest in germany. >> no. because it is actually growing. >> it's at a 14.4 pe level. they're actually growing really well. over here we're not seeing that. we have the ecb quantitative easing program that is trick it willing through. if you look at the european
2:16 pm
commission's economic sentiment indicator which takes business and consumer, it is at its highest level since 2011. it came out on the 30th as well. everyone's actually -- consumers are spending as well as businesses are spending as well. >> kevin kelly, recon capital. thank you. here's what's ahead on this very busy friday -- an oil ceo braving the storm and speaking with us exclusively. we'll ask if there are more layoffs ahead. plus, will oil close at a new six-year low today? the latest trades just ahead. and on this jobs day friday, we look at where the jobs are in america and highlight one industry that's growing so fast it can't find enough workers. the dow is down 98 points. you're watching the worldwide leader in business news and we are back right after this. while every business is unique,
2:17 pm
2:18 pm
everyone is looking for ways to cut expenses. and that's where pg&e's online business energy checkup tool can really help. you can use it to track your actual energy use. find rebates that make equipment upgrades more affordable. even develop a customized energy plan for your company. think of it as a way to take more control over your operating costs. and yet another energy saving opportunity from pg&e. find new ways to save energy and money with pg&e's business energy check-up.
2:19 pm
oil is back below $44 a barrel right now, folks. the number you want to watch is $43.46. that was the close on march 17th and that was a six-year low at the time. we are now roughly within 50 cents of that price. this has whacked all the big names but none as hard as marathon oil. mro. it is falling again today, but over one month, 30 days, marathon down 27%. a multi-billion dollar oil company losing one-third of its market cap in just 30 days. let's stay on the oil story.
2:20 pm
superior energy ceo dave dunlop rejoins us from houston. welcome to "power lunch," dave. we love it because you are one of the few oil and gas guys that's actually willing to stick his neck out right now and come on camera and talk about what's going on. i know it is a difficult situation. how off guard has the industry been caught and the fact that oil has just collapsed in the last 30 days? >> well, i think that there are those in industry that have been caught off guard. we as a company at superior have been very cautious about this market for the last couple years and it's put us in a little bit better position from a balance sheet and liquidity standpoint. but there are clearly a lot of companies that were caught very much off guard by what's gone on in the oil markets. >> some of the equities are down 70%, 80% in the year. but some of the bonds, even some of the tier-1 securitized bonds out there that should be trading at par, they're up 60 cents, 70 cents on the dollar. not trying to create any concern but do you believe we are going
2:21 pm
to see a number of bankruptcies in the oil space before this is all said and done? >> well, i think this is largely dependent on just how long we wwe stay at these sub-50 oil prices. if this is a price deck we have to deal with over the course of the in ecthree or four quarters, i think there is no question you will continue to see companies with a lot of stress on their balance sheet and perhaps some that go into bankruptcy. we've had a couple bankruptcies declared already in the oil patch zips january and i think in that very low oil price environment we'll see more. >> i know you don't know the pricing points probably of all these companies out there, but dave, if you had to guess and you looked out, $44 a barrel. how many companies can withstand that price level for six months? maybe we won't have it. but if we do? i think there are companies out there that have assets that distinguish themselves in the u.s. companies that have tier 1 rated assets and the primary oil ba n
2:22 pm
basin, these are companies that can survive at that kind of oil price. i don't know they're make a great return and great money, but they can survive. other players with no access to those access, it is very difficult to survive in this type oil environment. >> in terms of the company that can withstand, at the same time the bottom line is it's a hard sell to investors, isn't it? even if they focus on balance sheet and assets and resources, the stock is still not moving. at the end of the day how difficult is it to say to investors stick with us when your stock is down about 50% over the past is it months along with wti. >> i think for now investors realize that these stocks are going to trade largely in parody with oil prices. there is a point in time where oil prices begin to come up. so the challenge for investors is picking that point from them that is right to take advantage of what are very low equity
2:23 pm
prices right now. as oil prices begin to rebound and the date in mind for that is a big question at this point. but as oil prices begin to rebound, there's some big values out there and there are companies like ours that are developing a lot of operating leverage as a result of the cost reductions that have taken place. >> we hear that phrase a lot, dave -- when oil prices rebound. i've pointed out in this show that i went back over 25 years of data. average inflation adjusted price of oil in today's dollars over $25 is only $48 a barrel. we seem to have a little resency bias because we've been at $100 a barrel twice in the last six years. why do these companies keep pumping? rig counts are up 6 of the last 7 weeks. production is not going down. demand has not gone up. why are companies pumping and why would oil prices rebound? >> the capital markets were certainly open to these companies in the first half of the year. i'm not sure they're as open today as they were then. to your point, brian, oil
2:24 pm
production was down in the united states in may by 180,000 barrels a day. what we need to continue to see is that type of decline occur over the course of the next several quarters in order to cause investors to gain confidence that we're getting demand and supply that are more in balance. that's when we'll begin to see an oil price response. >> superior energy ceo dave dunlop, dave, these are difficult conversations, difficult times. we appreciate you coming on "power lunch" and cnbc to bring us your side of the story. thank you, have a good weekend. >> always good talking to you, brian. there are really two ways to look at the splashth rigtock ma now. we're apparently headed for seven straight down days for the dow. or, two, we're still only down a couple of percent on the year for the dow. should we stay calm and invest on? we'll get the smart take on investing in this increasing volatile market when "power lunch" returns. we are watch
2:25 pm
2:26 pm
2:27 pm
cablevision. they are down today right now about 1.5%. the companies reporting a 1.6% jump in quarterly revenue but the stock like other media companies has been absolutely slammed this week, actually down 5.5% right now. for the week though, down 11%.
2:28 pm
shares of viacom are picking up a little bit of lost ground. the stock is higher today but coal comfort for the investors. that stock down 20% this week. your disaster dujour is noodles and company. earnings and revenue less than wall street expected. already the worst single performing restaurant stock, by far, this year. it is down more than 51% year to date. we are back right after there. i'm here at the td ameritrade trader offices.
2:29 pm
ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this.
2:30 pm
wonderful, crazy mornings. we figure you probably don't have time to wait on hold. that's why at xfinity we're hard at work, building new apps like this one that lets you choose a time for us to call you. so instead of waiting on hold, we'll call you when things are just as wonderful... [phone rings] but a little less crazy. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around.
2:31 pm
i'm morgan brennan. here's your cnbc news update at this hour. president obama signing legislation at the white house that establishes wilderness areas in central idaho. he said wildfires in the western u.s. are getting worse in large part due to climate change. secretary of state john kerry says the nuclear deal with iran is about eliminating options in a realistic way and profoundly disagrees with senator chuck schumer's decision to oppose it. the white house announcing 12 members of congress have come out in support of the deal. a cyber security incident is being investigated. it is not sure if any information. . american airlines which uses
2:32 pm
sabre says it is investigating but has found no signs of a breach. tons of cheese were crushed and buried as a result of putin ordering food products bought from countries that support economic sanctions against russia to be destroyed. so far nearly 17 tons have been seized. that's a cnbc news update at this hour. let's get down now to jackie deangelis at the nymex. $44. >> we closed below it, brian. the settling price, $43.87, near session lows. six straight weeks of declines for crude oil. that's domestic, wti. brent hitting six-month lows today during the session. the jobs report this morning, traders are thinking that the fed will hike rates on that and that will pressure -- push the dollar higher. that will pressure crude prices. also you know oil rigs went up six going in the wrong
2:33 pm
direction. the next stop we're looking at, $43.50. that's where there is a little bit of support. if we break through that, we probably get to that $34 level. gas prices are down 14 cents on the month according to aaa. right now $2.62 is the national average. >> wow. what a price here. i don't think anybody would have predicted that. j jackie deangelis, thank you. have a great weekend. right now the dow is down triple digits. this will be the seventh straight down day for the dow, although the good news is we're off our lows. we're down 89 points. down more than 100 earlier today. disney, apple and chevron getting hit hard this week. only one dow stock is likely to end the week higher and that's coca-cola. 12 of the last 13 sessions the dow and oil have traded in the same direction. a 92% or so correlation. we've got the jobs number, the fed, klein, oil, what are you --
2:34 pm
one or two things you are most concerned about right now or you think are having the biggest impact on the equity market? >> i think oil is having this impact because investors are trying to see if this is supply driven or demand driven. we wanted oil to come down to this. this is the tax cut that we've been waiting for and it's finally going to pass through to the consumer so they can actually spend money even if potential interest rates coming down. >> when i meet people who watch this show, i get two questions. one, why are you so loud? number two is why is the stock market going down when oil goes down because theoretically isn't this a giant, to your point, tax break? everybody's all got now this extra cash. but we're clearly correlated to the negative. >> first, you're loud because it's loud in here. what's happening also with oil and we need a couple more quarters, we didn't realize how
2:35 pm
dependent industrial companies were on oil. because there was tangential demand for products like pipes and casts that were coming. that's going to flow through that comparison in about a quarter or two willen be done. i think the other side is there are still investors convinced that oil goes the way that the economy goes. that's not the case anymore. it will decouple but you will see companies that are making money. look at the airlines. they're still making money hands over fist and still trading at single-digit multiples. auto suppliers. borg-warner down 10% of the year, they're down because they couldn't meet demand for the f-150. companies are still selling below global multiples but investors are not giving them the credit. they're looking at the six stocks driving the market. below there, there are a lot of companies that we like -- >> last time we spoke you were increasing your stake in qualcomm. since then the stock has gone down to maybe flat so far.
2:36 pm
i'm just wondering what you're doing with it and what you think is ahead for qualcomm. because the chips are still under a lot of pressure. >> absolutely. i think when we last spoke there was an activist getting just involved with it, too. we like it. we think long term potential, either you break it up or you have to do something with it. 3% dividend yield and really good product line but that whole sector has come down, microchip, linear, they've all come down because their earnings haven't come up to where people thought but i think it is a hold and longer term i think we'll do fine with it. >> thank you very much for joining us on this friday, coming down to the nyse. talk to you soon. have a great weekend. it is now time for "trading nation." today we are looking at the biotech stocks. the group as a whole still doing well this year. the ibb etf is up nearly 20%. but it is also down more than 5% this week. joining us now, boris schlossberg with bk asset management. boris, not a bad 2015. a bad week. do you predict more downside or
2:37 pm
a recovery for biotechs? >> it is teetering on approaching the 200-day moving average. it is really coming very close to the dangerous technical point of breakdown and triggering the death cross where 50 and 200 kind of drop below it. i think the biotechs themselves are a fascinatesing sector. it is the only sector in the s&p that's completely binary. it is either a billion dollar product for a big bagel. there is a reason why most of the biggest hedge funds in the world made some of their most money in biotech, because they take off. i think we may see further choppiness in the sector before it comes back to further highs. >> if you turn out to be right and as you noted, a big hedge fund sector if the correction in biotech happens we'll see money coming out. will it help the overall market by putting that cash someplace else or do biotechs, a relatively small group, have the ability to drag everything down? >> they could be a sort of canary in the coal mine. i think it is interesting, think
2:38 pm
it was you talking about the fact you had top six stocks that everybody has their money into but today the only stock that's up is coca-cola. maybe what we're seeing a little bit is just a rotation into the defensive and consumer staples right now. maybe this is just a precursor of things to come in the next month. >> boris schlossberg, thank you very much, buddy. have a great weekend. for more "trading nation," we do two additional segments online. the online address is tradingnation.cnbc.com. as we learned yesterday, russia hacked the pentagon's e-mail system. in fact, it knocked it offline for two weeks. outrage over that unbelievable story continues to grow. the latest ahead. and it seems like cyber security is a pretty good business to be in right now. but only if you can find workers. we'll take you to where the jobs are. but as we head to break, the dow 30, mostly red except for am ex getting a billion dollar investment from a so-called activist investor. back after this. >> announcer: and now the latest
2:39 pm
from tradintradingnation.cnbc.c a word from our sponsor.
2:40 pm
what if there were only one kind of dog? then it would be easy to know everything about that one breed. but in fact, there are over three hundred breeds of dogs. because no one can be an expert in every one... an app powered by ibm watson will help vets tap specialized knowledge in the cloud for every breed... and whatever else walks, flies or slithers through the door. ibm watson is working to make medicine smarter every day.
2:41 pm
2:42 pm
welcome back to cnbc, everybody. we are of course first in business worldwide. on this jobs friday, our mary thompson is here to tell uls where the jobs are. apparently they are in cyber security with a ton of opportunity. the problem i guess, mary thompson, is that there's simply not enough talent to fill those jobs. >> not enough talent. a lot of those cyber attacks you mentioned earlier fueling demand for this. the ceo of semantic is predicting by 2019 there will be 6 million cyber security jobs around the globe but only 4 1/2 million people with the skills to fill them. symantec is looking outside the walls of colleges and universities for future cyber specialists. partnering with the non-profit mpower in developing sc 3, or symantec's cyber connection aiming to equip women and
2:43 pm
minorities with a ged diploma in cyber specialists. >> what i like best is it doesn't feel like a job. >> 30-year-old richard hobson is a former welder, a self-proclaimed tech geek, he recently completed a program which includes courses in ethical lacking and is now interning at morgan stanley where he says every day is an adventure. >> we're looking for any vulnerabilities, any threats that can compromise personal information and data that's highly regarded to the organization. >> hobson is one of sc3's 31 graduates, a program symantec looks to expand as it fills its pipeline with workers with certification to help man the frontlinls dlines of this ongor war. sticking on the demand for cyber security experts, russia launching a sophisticated cyber attack against the pentagon's own e-mail system.
2:44 pm
apparently 4,000 military and civilian personnel were impacted. it is still not clear if it was the government of russia or just simply individual cyber hackers in that nation. josh korman joins us now. when i hear that the pentagon's e-mail was knocked offline for two weeks, that is not only eye-opening, it is a little scary. what's your take? >> it should be scary. i think it's becoming clear that whether it is ashley madison, the pentagon, opm, credit card breaches, we're having more than a breach a day and it is mainstream news. one of the ways we like to put this is, with cyber security, attacking is really, really easy. defending is really, really hard. over the last few years we tried to tell the government that while we might take solace that the same is true for our enemies, we forget that we have much, much more to lose. we like to phrase it that our dependence on technology is growing much faster than our
2:45 pm
security. i'm here in vegas for the largest hackers conference in the world. in the last few days alone we've seen hacks of several automobiles that could risk life and limb. we've seen hacks of medical devices. an entirely industrial controls village. these are the wake-up calls that we need to realize we are way behind. we have a public health issue with really terrible cyber hygiene. >> you get to talk to hackers, josh. take us inside their minds. is this -- are these people that maybe just want to go in and poke around a little bit to see if, hey, i'm going to break into the pentagon servers. i'm not going to do anything malicious, i just want to check it out. or do you believe there is is a real goal here to do harm? >> that's a great yes. i think too often you look at hackers at mon toe lit omonolit they're all bad or all with one motive. if you walk the hallways, it is usually curiosity and challenge, game and ego, financial gain for me and my part it is usually altruism or the desire to
2:46 pm
protect people. it might be activism for fun. i think the case here if it was russia, whether it was the russian crime networks or the russian government, the uses will be different. if it is going to be used for human intelligence, that data could be very dangerous as a stepping stone to other access or to threaten other key people in government. >> even if a russian entity did the hacking, it may not be russian entities that actually use the data that was stolen. it could be old on the open market. josh, i'm curious. an organization that gets hacked, you learned about where you are lacking, where the voe n vulnerabilities are. could this be a test run, dry run for a bigger cyber attack that's yet to come? >> it could be. typically many attacks are done months before they are revealed. as such, this may only be the tip of the iceberg. look at opm and how initially we thought it was very contained and there were waves of successive reveals. this could be a reconnaissance mission to get more information
2:47 pm
for a cubs skwesubsequent attac. it could be sold off if the data is not very useful. there is an entire ecosystem here. this actually does us a disservice to call this a sophisticated attack every time. sad reality is, you look at the rising data breach report which comes out annually, 97% of last year's successful attacks -- not a few. 97% traced to just ten known security vulnerabilities. eight of which have had a fix available for ten or more years. while whee talk aboe talk about sophisticated attackers, the truth is we have a supply chain we are increasingly depending upon and we're not expanding it. >> josh, starts to feel like we're living in a house that's getting broken into every week but we've still got to live somewhere but nobody knows what to do. josh, we'll let you get back to your conference in vegas,
2:48 pm
probably about 130 degrees. stay cool, thanks very much. jobs also being created in health care as well as cyber security. we're looking at reits that specialize in health care and biotech real estate. and listen, we have had a breakdown this week. the dow is down 91 points headed for our seventh day in a row. markets kind of saying, go ahead, give it to me, help me make it through the night. we're back after this. en you focus on making great burgers, or building the best houses in town. or becoming the next highly-unlikely dotcom superstar. and us, we'll be right there with you, helping with the questions you need answered to get your brand new business started.
2:49 pm
we're legalzoom and we've already partnered with over a million new business owners to do just that. check us out today to see how you can become one of them. legalzoom. legal help ire. nbut your dell 2-in-1 laptoped gives you the spunk for an unsanctioned selfie. that's that new gear feeling. get this high performance laptop bundle for only $399. office depot officemax. gear up for school. gear up for great.
2:50 pm
2:51 pm
the health care sector gained 28,000 jobs. as the industry grows, there will be demand for more space for those people to work. peter martin at jmp securities joins us now. peter, great to have you with us. the health care sector, you know, the stocks, they've been one of the best performing sectors year to date. yet reits face rising interest rates. how should health care reits trade? >> good morning. great to talk to you on the west coast. they should trade, the health care reits have the head wind. they have longer duration in general. when interest rates are rising, they usually trade down. it's been a difficult year versus the s&p 500.
2:52 pm
but there are segments you can play that have shorter duration leases like medical office. >> how do you take a look at the sector? obviously, if you're an investor, you might think that biotechs are hot. they're expanding. they're up on the year. therefore, biotech reits may be a good place to invest. how do you look at the sector? >> you hit it on the head. the focus on biotechs this year with fda approval, access to capital, we had to outperform the real estate equities, are. it is up almost 6% year to date. and that's because the fundamentals are so strong given the life sciences industry growing so fast. >> what are the areas within health care rets to stay away from? >> it's been difficult for the longer areas, nursing, specialty hospitals where you're going 15, 20, 25 leases. the stock is more like bonds. >> i see. peter, we're going to leave it.
2:53 pm
there thanks for your time. >> all best. take care. >> peter martin. >> all right. the dow heads for what looks like it's going to be seventh straight losing session. we're going to have opportunity. it's called street talk. we got it coming up next. cnbc, first in business worldwide. do you want to know how hard it can be to breathe with copd? it can feel like this. copd includes chronic bronchitis and emphysema. spiriva is a once-daily inhaled copd maintenance treatment that helps open my airways for a full 24 hours. spiriva helps me breathe easier. spiriva respimat does not replace rescue inhalers for sudden symptoms. tell your doctor if you have kidney problems, glaucoma, trouble urinating, or an enlarged prostate. these may worsen with spiriva respimat. discuss all medicines you take, even eye drops. if your breathing suddenly worsens, your throat or tongue swells, you get hives,
2:54 pm
vision changes or eye pain or problems passing urine, stop taking spiriva respimat and call your doctor right away. side effects include sore throat, cough, dry mouth and sinus infection. nothing can reverse copd. spiriva helps me breathe better. to learn about spiriva respimat slow-moving mist, ask your doctor or visit spirivarespimat.com
2:55 pm
dentist appointment when my teeth are ready? ♪ can it tell the doctor how long you have to wear this thing? ♪ can it tell the flight attendant to please not wake me this time? ♪ the answer is yes, it can. so, the question your customers are really asking is, can your business deliver? time for "street talk."
2:56 pm
we dig up the most compelling analyst calls of the day. when i was putting together my stocks this morning, there was a ton of down grades and not many upgrades. analysts tend to have an upward bias. your take? >> i think because a lot of analysts out there, we love analysts, but they're often responsive to what is going on. a lot are down on stocks on the back of disappointments. >> good point. speaking of analysts, let's hit the calls. jumping off nvidia. roth capital markets upgraded from a buy to neutral. they believe that gaming cloud and data center streng sj going to offset the weak pc or oem. target only boosted 25. not a huge amount of upside n this market, hey -- >> i feel this is late to the game again. analysts are responsive to what is going on in stocks.
2:57 pm
they've been an outperformer. so, yeah, it's a buy. although it's been outperforming the sector already. >> shutterstock. fiscal year and jeffries is downgrading to a hold. this may be the biggest price target eruption. it goes to $39 from $90. i read it twice. i read it twice from the note itself just to be sure. some of the bears are having a tough time competing adobe. manage. is not going to cut prices. >> 90 to $39, yeah, biggest in history. >> michael kors. you have double slam now hitting the stock today. it is not reacting negatively. that maybe is a good thing for the name. jp morgan downgrading it following yesterday's stock jump. the target is at $38. stock is at $44.
2:58 pm
so more than 10% below the current price. they're concerned about the wholesale business not being reflected in the stock price yet. piper jaffray downgrading to underweight. infe effectively a sell. >> they gained 10% in yesterday's session. coach gaining a lot. ubs upgrading coach. meantime, we don't like to throw around the word carnage. carnage is an appropriate word for sunedison. the stock is more than half of the recent high on july 20th when they announced the acquisition. credit suisse trying to defend the stock. obviously, there is something going on here. it's falling out of favor really quick. this is almost a lows to have day's session. yesterday it was down 25%. >> speaking of price targets, right now the average target of the eight analysts who cover it is $35.
2:59 pm
120% higher than where the stock is right now. i suspect we're going to see your famous stock price cuts big time perhaps coming next week. or pounding the table in defense. already. stock five, always the under the radar name. this is the biggest under the radar name we've ever done. canadian natural resources. this cnq. stock down about 20% this year coming into today. ray monld james has seen enough. they upgrade the stock to an outperform. they note that this is dramatically underperformed nearly every other large cap canadian stock. the fact it has a diverse asset base will prop it up a little bit. >> i think it's a really hard call to make. i commend analyst who's can make that call. it's really tough. these things are correlated to the commodities. we heard from superior energy's ceo. >> i have to get back to calgary, i guess. >> go! i'll miss you. >> a rough week for the market.
3:00 pm
the raging bull tom lee says we're setting up for a major rally into year end. we'll get his bullish take tonight at 5:00 on "fast money." >> we look forward to that. great show. have a great weekend. >> you, too. >> thank you. folks, thank you for watching. is this seven down days in a row for the dow? find out with "closing bell" right now. >> well, the cat is out of the bag. >> it's my birthday. >> happy birthday. >> thank you very much. thank you. >> wonderful day. wonderful weekend. welcome "the closing bell." i'm kelly evans. this is bill griffith. >> yeah, just breaking in the last hour, you saw the gang on -- talking about this. american express reportedly a target of active's firm value act. that stock popped on that news. we'll bring you comments from amex coming up.

61 Views

info Stream Only

Uploaded by TV Archive on