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tv   Power Lunch  CNBC  September 29, 2015 1:00pm-3:01pm EDT

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this sector is of ugly machinery stocks that have been taken to the woodshed. we'll see if they can bottom f energy bottoms, i think this group will, too. >> hard to feel good since caterpillar on that space. >> it's very hard. >> we'll follow it. >> indeed it does, scott. thank you very much. welcome to "power lunch." stocks struggling at this hour. the dow was up triple digits earlier. goldman sachs out with the new call on the market. cutting the year end forecast for the s&p 500. we have the four criteria you need to pick stocks now. >> the dow is down about 10% this year so far. the s&p 500 is down 8%. the nasdaq down 4%. so are we looking at the potential early stages of the bear market or just in the late stages of a bull market? >> and call it the september
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stock stud. equities have struggled this month, this stock keeps going higher and it is up for the year so far. >> we do begin though with goldman sachs's new call on the market. cutting the year end forecast for the s&p 500. the firm also cutting the earnings estimates for the s&p 500. dominick chu breaks it down. >> goldman sachs says 2,000 is the new number. they take it down. it was 2100 before. now we're down to 2,000. so the target goes lower because they say there are a number of drags. a slowing u.s. economy. that's going to be a drag. the biggest economy in the world. the second biggest economy in the world, china, is also going to be slowing down as well economically. so those two big drags. and then slumping energy prices, three of the main reasons why goldman sachs thinks we could be due for at least a slower momentum stock market. we'll put that way. take a look at the reasons why. they're saying, hey, look at least for outperformance in stocks that have certain criteria. they're looking at four
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specifically. higher sales exposure and catch returns to shareholders. higher quality companies with earnings and sales growth. and stronger balance sheets. they're not as exposed to leverage. so with those four criteria, they look at a bunch of different stocks in the universe. and their analysts look for ones that fit at least two of the criteria. among the names they came up with here are some interesting ones here. first of all, you have names like refiners, marathon petroleum. that's one of them. also some other ones here like chipotle. they all have upside. they think the target price could be. now remember, with these analyst moves here, rdc did theirs yesterday. they lower i had their target. the median forecast remains 2200. that's about 16, 17% upside from here. the mean, 2188. so tyler, just a look at how strategists are positioning things into the year end. we could expect perhaps some more of them to change their
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levels going to the next few weeks. back to you. >> thank you very much. stocks struggling right now. unsuccessfully to hold on to their gains at this hour. the dow was up triple digits earlier. through see it down 28 right now. about .a%. the s&p 500 is up flat right now. and the nasdaq off about a quarter percent. let's get the trading action. mary thompson joins us from the new york stock exchange. >> tyler, the dow is not at the lows of the session. as you pointed out, it has turned down. this in the wake of a bit of a relief rally we saw earlier today spurred by a couple things. a better than expected reading on consumer confidence and also a bounce back in the biotech stocks. and also strength in the energy sector today. let's take a look at the groups that are performing to the upside. otherwise down session. hk again reflecting the strength that we're seeing in bioteches to day. as well as material stocks. this in the wake of glencore
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coming out and defending the business. energy turned lower despite the strength that we're seeing in crude oil prices. west texas intermediate staying above that critical $45 a barrel level right now. consumer staples, the sector that is pacing a decline right now on wall street. we have apple pulled back recently. probably in about the last 45 minutes or so. nike under pressure as well. reflecting again the weakness we're seeing in consumer stocks today. investors rotate out of that group. and into, again, health care and biotech and energy. and goldman sachs xenldiextendi losses yesterday. traders saying there are a number of things that remain up in the air and that's keeping the markets from staging any kind of significant rally. is there an earnings recession? will the government shut down in december and concerns about an earnings or an earnings
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recession and then whether or not the fed will it move before the theft a government shutdown in december? are we likely to see a rate hike in october instead? these are being talked about today. the dow is down 23 points. back to you. >> thank you very much. we'll get back you to later on. bioteches are bouncing back today. they're helping at the margins to hold up the nasdaq. it is still marginally negative. you can see the ibb today up is by 1% after being killed by 14% over the past week. we're following the big movers. some people deciding to talk about whether or not we witnessed that capitulation moment for the bioteches and whether or not they can start to find footing. >> that is one of the things i was thinking about yesterday as we looked at the volume. overall volume when you look at the nasdaq is average. take a look at the biotechs. although off of that huge surge at the beginning, the volume for biotechs continues to be elevated. record 10 million shares on the
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ibb during yesterday's selloff. today we traded more than a full days average volume. vertex, biogen, they're among the leaders today. the biggest gainers in the nasdaq 100. over here is sitting out the party of pair of down grades after it cut the guidance. overall, tech holding up. yahoo among the leaders today after announcing it would proceed with that spinoff. notwithstanding uncertainty over the tax free nature. and on national coffee day, the coffee providers today are trading higher for the most part although dunkin' brands is lower. dunkin' is giving away free coffee today. starbucks is not. as i pointed out to one of our producers, starbucks, the folks who hold it, can afford to buy coffee. it's up 36% year to date. dunkin' is up 13%. green mountain bounce on the new cold brewer that will be available online for the holidays. >> thank you. the broader market might be
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lower. oil is rallying. currently up by 2% for wti at 5 $45.33. let's get more on what's happening from the nymex. >> good afternoon. actually, where wti is trading is not off session highs. $45.57 is the high we made today. they had a 3% dip yesterday. it is very indicative of the pattern we've been seeing. we're up one day, down the next, back up the following day. i want to make the point that traders made to me which is last two days of the month. also, we're coming to the end of a quarter. there could be a little window dressing here. crude really hugging that $45 line. that's almost like a flat line right now if you will in term of the psychological mark wrf this trade wants to go. and as it's moving in either direction on either side of it, it's not moving too far. so waiting for the next catalyst really when it comes to wti. back to you. >> all right. jackie, thank you. shares of glencore bouncing back
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big today. up more than 15% overseas. it is, of course, one of the world's biggest commodities traders. stock hammered lately because of the commodities meltdown. down 25% in the past week alone. for jim cramer of "mad money," glencore is a top market fear. >> i can't stress enough that glencore is a big worry about this market. the third being volkswagen and inconceivable raking of the emission test. they could have unfathomable down side. they won't put our country's finances at risk. they could cause our stock market to drop between 5% to 10% if any or all go under. as they're currently configured and needed on the fly restructuring. >> all right. so what is behind glencore's rebound? the company released a statement about its commodities troubles. the company saying it is taking pro active steps for the current conditions and it remain financially robust.
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glencore saying it doesn't have any solvency issues. our kate kelly has been all over this big story will have the very latest developments in our next hour. robert frank will go over the we will thaj the ceo lost in the past few day and that, folks, is all ahead. >> thank you. happening right now, google unveiling the next generation of the device. monitoring the events. >> that event going on right now in san francisco. google's new head was on stage and introducing the new phones. let's talk about them. they are the nexus 5-x. the 6-p will be 5.7 inch display, better camera. the 5-x will be made by lg. 5.2 inch display. the increased battery by 20%. pricing, the nexus 5-x will start at $379. nexus 6-3 at $499.
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both the new phones available at the google store. available for preorders starting to day in the u.s., uk, ireland and japan. google saying they're going to ship in later october. the new phones will work with major carriers and they're going to work with project five. that is google's new wireless service which kicked off this year. they're also going to run on marshmallow, the new android operating system. remember the operating systems are always named after desserts. marshmallow among the features, simpler improved notifications, faster scrolling and searching on the home screen. we talked to analysts. why does google make nexus devices? they want to show off the latest, greatest software on the latest, greatest hardware. they want to show that android can compete in the high end with apple's ios. going to step back on this conference call and bring you more headline. >> just to repeat, the nexus
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6-p, it is half the time of the iphone 6. >> apple introduced the new lineup. they want to showcase their own new hardware as well. >> thanks a lot. great to see you in the house as well. let's get a market flash. >> a number of casino stocks falling to fresh multiyear lows after one of the area's biggest washt and may have to wind down operations if the number of vip gamers continues to decline. junk et facilitate loans for high rollers. can you see wynne, will have sands and mgm and melco are down 2% to 6%. >> billionaire investor carl icahn out with a warning about this market. the five things that are worrying carl right now. check out the major averages so far this year. the dow down about 10%. the s&p 500 off 8.5%. the nasdaq down half as much or 4%. so is this an early stage bear
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market? or a late stage bull market that's in correction? you're watching cnbc. "power lunch," first in business worldwide. proud of you, son. ge! a manufacturer. well that's why i dug this out for you. it's your grandpappy's hammer and he would have wanted you to have it. it meant a lot to him... yes, ge makes powerful machines. but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you? go ahead. he can't lift the hammer. it's okay though! you're going to change the world.
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walmart is offering free grocery pickup for online orders this month. sales are down 26% year to date.
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down just very slightly today. yahoo shares rallying 3% after it announce they had would move forward with the spinoff of the alibaba stake. that is despite the irs declining to say that the spinoff is tax free. the transaction is expected to be complete in the fourth quarter. and credit suisse upgrading mcdonald's. they also increased the price target to $112 from $100. it is current sliting there at $97.24, gaining by 1.3% in trade today. those are the headlines. >> shares of tv station media general are higher as activists urge the company to sell itself to peer next star broadcasting calling the deal for meredith corporation destructive. in the letter, they say the deal does not make strategic or financial sense for holders. they own 4.5% of media general. the new shares of meredith
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corporation down just -- it was down a fraction of a percent, now slightly higher. >> i'll pick it up from there. thank you. wall street buzzing now about carl icahn's new video. he's in a video business now. he warns investors of more pain to come. he's laying out five things he is most concerned about, scott. we spoke to carl icahn. he has more tails. >> there is a lot of buzz about what mr. carl icahn says. stock buy backs and low interest rates causing bubbles in several asset classes. all drying the ire of carl icahn in the video called "danger ahead." >> low rates by definition is building bubbles. building rubble bubbles, building bubbles even in the odd market. because the fed balance sheet has mushroomed from less than a trillion dollars to over 4.5 trillion. that is a huge, almost
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unbelievable and all that money crowds out the little guy, the middle class investor. he has nowhere to go with the money but into the market or even more concerning, high yield bonds that are very risky. >> carl icahn taking a big shot at congress which he calls dysfunctional, unable to get anything done. he says could be why people are flocking to washington outsider donald trump. >> just look at our record. 30 years, no tax reform. 30 years, no immigration. as a result, you have this movement toward a guy like donald trump because you want somebody that's not beholden to an establishment. so we need a president that can move congress. i think donald trump could do it. i disagree with him on certain issues. certainly we talk to more. but this is what this country needs, somebody to wake it up. >> all right. so what is carl icahn not worried about? the largest holding. apple. he told me in an interview he is sticking with that stock revealing the size of the
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position the same it's been. he told me he think the stock still undervalued and acknowledges a broader market slide could hurt shares in the near term. i also asked him why he's built such large stakes in the minor free port area which have suffered mightily in the commodities crash. he told me he bought freeport because he thinks copper prices will recover in a couple years. he likes cheniere's contracts and calls that a free option if energy prices go up. last night he filed a new 13-d revealing a bigger stake in the exporter. he made it clear there are longer term plays and also admitted while he's more hedged than he's been in years, he's probably a little bit more long than short. i asked his thoughts on china as well which he says china can take care of itself. however, it could get worse before it gets better. >> didn't mr. trump at one point say that among the people he would consider to be the treasury secretary would be carl icahn. >> which i asked him about, of course. he laughed at me and said i like
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donald trump but i'm not going to washington. >> all right. scott, thank you. >> we also like you to weigh in as well. which of his five biggest worries is also your biggest concern? carried interest, financial engineering of earnings, buy backs, weakened balance sheets, consistently low interest rates or high yield bonds? go to cnbc.com and vote. home prices are rising. developors are trying to lure millennials back to buying. think small but swanky. plus, biotech bouncing back today. amgen, you have gilead on the bored moving higher. tune in to "mad money" tonight. jim cramer has two looks at the biotech industry. novavax off a phase two adjustment this morning and dr. eric topol from medscape is going to be on as well. "power lunch" is back in two.
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this bale of hay cannot be controlled. when a wildfire raged through elkhorn ranch,
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the sudden loss of pasture became a serious problem for a family business. faced with horses that needed feeding and a texas drought that sent hay prices soaring, the owners had to act fast. thankfully, mary miller banks with chase for business. and with greater financial clarity and a relationship built for the unexpected, she could control her cash flow, and keep the ranch running. chase for business. so you can own it. pinera hitting session highs, up 2%. new coverage pointing to optimism about recent changes in food, marketing and restaurant design. shares up about 10% this year. >> new numbers out on the health of the u.s. housing market and a tiny new trend with a big payoff for developers.
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dia diana has the story. >> home prices are still rising far faster than inflation, up 4.7% in july from a year ago according to the latest s & p case-shiller. and that is a bigger annual gain than we saw in june. so how do urban condo developors get cash strapped young millennials back into buying? well, for one thing, they don't go big. they go tiny. super tiny. this is one of 30 tiny, about 300 square foot condo units at ontario 17 which is in d.c.'s very trendy adam's morgan neighborhood. the area, very pricey. the condo, not so much. $275,000 for this studio unit. the developer behind it, the peterson group had to pay very close attention to detail because they have to use every tiny square inch. so, of course, you have your murphy bed in the wall. that is a given. but also underneath the sofa, you have all the storage for the bedding. but if you're saying to
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yourself, i have my dining room in the middle of my bedroom, all you do, pick the dining room table up. put it back up into the wall, lash it in and you have art work. i promise, it's up there. come with me to the kitchen. which i have to say by new york standards, this is really spacious. you have very high end sleek german appliances. but you will notice they are slightly smaller than your usual appliances. you also have a very large sized bathroom in the back. no tub. i cannot get you into the bathroom. we don't have enough time. but all the amenities, they are add ones. you have to pay extra for them. it does give you an idea of what can you do in space. okay. as for the building itself. what you get, you get a roof top deck in the building upstairs. you get tiny terace in every unit and a neighborhood that is already gaining in value. now the soup amenities you do not get. you don't get the pool. you don't get the gym. but you also do not get the super high kobd minute yum fees and that is by design.
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so i will admit to you though the bigger pent house units went the fastest. for millennials in the studio, they were really, okay, cleaning up. i had to do it. back to you. >> micro living is very popular these days. that's really cool. thank you. let's take a look at gold prices. they're getting ready to close right now. let's bring up the board. currently down by about .5% at 1126. you also have silver and copper. copper is an interesting one. overnight, china announced more infrastructure spending and they consume half of the world's copper. copper is actually moving higher as is silver and platinum is lower down for the seventh session out of eight. why? it's about auto demand in the wake of the v.w. scandal. let's move away from precious metals to the bond market. rick santelli who is precious in his own way is tracking the
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action. >> well we're at a yield of 205. looking at a two day charge of tens. down five basis points from yesterday's 210 settlement. very orderly. not a crazy market. when you open the clahart up to mid august, we were at 2% the last time we closed. pretty much right at 2%. look at an intraday of the euro versus the dollar. spent a good chunk in negative territory. it's slightly in positive territory. the euro was the best divider of the market. short covering when there is a little odd to the equity market whether it's the dax or s&p 500 and dow. those markets all started out in positive territory. the dax closed lightly in negative. we're flirting, we're lightly positive now. the euro nailed it. intraday chart, it's a close call whether it's going to be positive or negative. the reason it's important, we currently have 7 down sessions in a row. will this be eight year to date? shows how far this has fallen. think carl eye kwan the high
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yield junk etf and those are four year lows. mandy, tyler, back to you. >> all right. rick, thank you very much. stocks have turned positive just in the past couple of minutes. they do continue to waffle a little bit on the back of yesterday's massive selloff. so where are we in this market? is this an early stage bear market we're watch organize a late stage bull? and what's the difference? plus, one day to go until the government shutdown. will congress get it together in time to avoid more turmoil in the markets? a lot riding on a key senate vote today. we'll have the latest on that when "power lunch" returns on cnbc.
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for the first time ever, leaders from the u.s., japan and south korea are holding a tri-lateral meeting at the u.n. the agenda included discussions on the economy, climate change and security threat posed by north korea.
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with the help of usair strikes, the afghan military launching a counter offensive against the taliban trying to seize the airport. yesterday the taliban fighters pushed out government forces in a surprise attack. it was a major setback for the government. at the house republican leadership conference, house majority leader kevin mccarthy was asked how he would be different than john boehner if he were to win the speakership? boehner stepped aside and the two talked with each other a bit. mccarthy says he wants to make sure the house is closer to the people. friends and family gathering to say good-bye to new york yankees baseball legend yogi berra. he pass add way a week ago at the age of 90. a public celebration of his life will take place at the yogi berra museum and learning center on thursday. you're follow up date. you're up to date. >> a great guy that lived for many years in the town i call home, montclair. >> right. >> he was learning center is just up at the university there.
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it's going to be quite a celebration. sue, thank you. let's take a look at the markets. the dow up 37 points. nasdaq up 9. the s&p 500 up about a third of a percent or six points. let's get back to today's trading action with mary thompson at the nyse and bertha combs. >> as you said, we have come off a recent decline. the dow jones industrial average right now just about 40 point gain for the dow today. the biotech, rebound we're seeing in biotech stocks certainly supporting shares today. we want to note that russell 2000 is not participating in today's rally. also despite some steadiness we're seeing in the markets, despite a couple rocky days, traders are still expecting the s&p 500 to retest the august lows of 1867. as for today, i just got off the phone with a trader who said he
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is watching the ratio which he believes is signalling movement higher for stocks. the put-call ratio is typically 80. that means lots of people are buying puts. he think that's is a contrary indicator. the energy sector was higher. it is lower now. it is trading to the up side along with material stocks. today although the stocks within the energy sector, they're a mixed bag. we're seeing weakness in the pipeline stocks. we're seeing some strength in some of the drillers today. back to you, tyler. >> all right. thank you. to bertha combs now uptown at nasdaq. >> as yoga bara might have said that, down side trend on biotechs is so crowded nobody goes there anymore. biotechs are the only thing holding up as we take a look. the small cap russell 2000 coming off the lows. the large caps are holding up just slightly as far aztec
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stocks, the overall tech sector is modest lly lower. yahoo is up on news of the alibaba news. electronic health records provider is up. thursday is a big day as the massive new medical billing system goes live. >> thank you very much. it's become increasingly troublesome to invest in emerging markets. there may be one glimmer of hope. so says our reporter. she's here with that story. >> it is a challenging time for merging market investors. you have the stronger dollar, lower commodity prices plus just general market volatility. there is also a domestic story playing out in each of the bricks. let's break it down. you have brazil dealing with high inflation and low growth. russia suffering from the renewed drop in oil prices as well as the western sanction that's are still in place.
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china continues to disappoint despite measures to stimulate growth. that leaves india as last standing brick. the economy is expanding. inflation is coming down. india also has a pro active central bank. just today cutting rates to a 4 1/2 year low. that is a perfect cocktail for the emerging market investor. interestingly enough, ubs says the recent drop in indian stocks presents a good buying opportunity. here's the indian focused etfs. you can see both down about 8% to 9% over the past three months. keep in mind though there are two big risks out there. india is facing a regional election coming up in october. that could slow down prime minister's reform program. the other big risk out there, tyler, not just for india, but emerging markets is that impending fed rate hike. implications attached to. that. >> all right. thank you very much. >> stocks are off the session
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highs. earlier goldman sachs's chief u.s. equity strategist cut his s & p year end target to 2000 from 2100. is this the end of the bull market that we might be staring at? with me, chief portfolio strategist at state street global advisors and senior portfolio manager at morgan stanley wealth management. thank you for joining us. do you agree with what goldman sachs is doing or potentially considering it still implies 6% upside between now and the end of the year. >> we actually have been underweight equities coming into this part of the year. we actually are holding more cash. we think there is opportunity as stocks fall potentially to go further. we think this might be first year in a while we had a significant negative print. >> since 2008. what, we were down 38% or so. >> tiny blip in 2011. not one anyone wants to talk b. >> would you agree? >> look, i've been a portfolio
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manager for a few years. being in this business long enough, i've learned that ultimately stocks regress to what is going on. companies don't regress to the stock prices. and what we see is companies are still delivering pretty good numbers. >> it depends what sector. >> i haven't seen the real deterioration in fundamentals. the stock prices, but ultimately what happens i think will happen in the fourth quarter. company earnings come out. we're going to get a lift in the market. but i think it's very consistent to have a pause in a bull market as we've seen this year. i don't think it will be real negative. i don't think it will be real positive for the market overall. i think there is real good stock picking going on. >> so we're really relying on earnings to give the market a boost. so maybe even the seasonal santa claus rally. but what if the red hikes rates whether it's october, december? could that snuff out any potential santa claus rally or
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it could maybe instill some confidence in the u.s. economy and stabilize the market? >> right. so our view is that fed really should raise rates. they should get on it with. we think that they are going to raise this year. we think in the first way that will actually signal that things are not as dire as a lot of people fear. they've been look for signs of inflation and looking for some stability in the marketplace or what not. the bottom line is that the patient is no longer on life support. it doesn't require these hiss tore beingly low rates to -- historically low rates to sustain it. >> you were shaking your head. >> let's get behind it. >> please. >> very quickly. you're talking about going back to the stock level, to the company level. i see here on your list you really like apple. carl icahn does, too, i'm sure. nike and black rock. >> what happens in the fourth quarter is we get back to fundamentals from the third quarterer when people are -- the macro events and then we focus
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on what companies are delivering on earnings? and those are normally the best opportunity. so the fourth quarter quantitative is the companies with the best fundamental and stock price momentum that do well. and i think we're setting up for the same type of situation. i wouldn't be bottom picking stocks that are down on the year. a lot of tax loss selling is going to hit those. so i'd avoid those. >> a lot of catching and falling. we have to leave it there. thank you so much for joining us, both of you. you can go to powerlunch.cnbc.com to see how they're playing china specifically. >> curry green mountain investors getting roasted. the stock is down 60% or there about in 2015. the company unveils the next big bet to stop the slide. we're in cincinnati. >> hi, tyler. it's loud. the associates are holding a pep rally. i'm covering keurig today. they are launching this big
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machine which is cool. you can make a dr pepper with the press of a button in your kitchen. the question is, is it going to be a mass market seller to turn this business and the company share price around? i talked to the ceo executivebly. that i'll share it with you next on power lunch. [ male announcer ] eligible for medicare? that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they could save you in out-of-pocket medical costs. call today to request a free decision guide. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients...
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welcome back to "power lunch." here are the headlines. stern is giving apple and gopro buy ratings and neutral on fitbit. voekz wag sen going to revisit 11 million cars. the fixes are expected to cost more than $6.5 billion. a reynolds is trading at all time highs when they say they'll sell
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the natural american spirit business. japan tobacco group will pay $5 billion in cash for that brand. >> baracuda networks hitting session lows, down nearly 2% ahead of the second quarter earnings report. due after the bell today. according to thompson reuters, analysts are expecting revenues of $79 million on nine cents earnings per share. the earnings have been estimates every quarter since the november 2013 ipo. but those beats were not rewarded with stock gains in the session following each report. shares keep in mind down about 32% this year. >> keurig is unveiling the new cold machine today. the stock is down 60% this year after a series of stumbles with hot brewers and k cups. our sarah eisen speaking with keurig's ceo about his big bet.
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sarah? >> good to see you. certainly keurig needs this to be a hit badly. the company wants to change the way we drink cold drinks, like soda, in the way that they change the way we drink hot drinks. i asked the ceo how it compares to the existing product on the market. that is soda stream and why he thinks this is going to be a game changer. >> we listened a lot to the consumers of in home machines today who have them in their home. what they told us is they want a machine that comes out cold, the product has to be cold. we deliver that. they told us they want it carbon yated without a co 2 canister. we deliver that. the consumer didn't have to recycle that canister. they don't have to bring it back to refill it. you can't throw them away. so we had to deliver that. they also want the brands they love. and so in many of these other machines, you can't get a coke or a dr pepper. these are a really hard to
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perfectbly blend. so we listen to the consumer. that's what they want. they wanted it at the push of a button and they want it in a minute and that's what we're able to deliver. >> are the consumers going to pay? it's $300 for the machine and 99 cents per pod. coca-cola has a stock. they're invested in keurig because of this new cold machine. 16% of that company they had. so both companies are hoping it's going to be a hit, especially keurig which has to turn the business and its stock price around. tyler? >> in one day and ten hours, the government will shut down unless the house and senate can agree on a way to keep it open. what are the chances of that happening? what are you hearing? >> you can probably stop panicking about the opportunity for a government shutdown tomorrow. it might not be too early though to start panicking about the possibility of a government shutdown in december.
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so here's the plan as of right now. we expect the senate will vote today, possibly very late into the evening or early morning hours ahead of the deadline tonight and into tomorrow morning. they will pass a continuing resolution to keep the government open. that will go to the house tomorrow. they are expected to pass it with democratic votes. speaker john boehner's resignation announcement gives him the flexibility to take the democratic votes. we heard from him earlier today. he stepped before cameras. if he's planning on doing anything else, that is a debt limit extension or a bank re-authorization or other measures before he leaves as speaker, he's keeping it very close to the vest. here's what speaker boehner said earlier today. >> there's a number of issues that we're going to try to deal with over the coming months. but i'm not changing my decision making process in any way. just a matter of if there's a way to get some things done, i won't burden my successor.
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>> he says he doesn't want to burden his successor. not at all clear just yet who his successor might be. kevin mccarthy in the house looks like he has the insidetrack as of right now. it is a leadership free for all in the house of representatives. >> thank you very much. for more on the shutdown threat, let's bring in former republican senator from texas kay bailey hutchison. she is also a cnbc contributor. welcome back. always good to see you. >> great to see you. thank you for having me. >> let's talk a little more broadly about the state of the republican party today as you see it. it would seem to a casual observer that it is bitterly divided. how do you assess it? >> it's bitterly divided. no doubt about it. i think that you have seen the frustrations with john boehner and that is now coming to the surface. i think certainly there is a division among mostly house but
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some senators about a way forward. i think it's a question of governing versus trying to get everything you want which is impossible in a legislative body. you can't be a dictator. you can't say my way or the highway when there are 435 people in the house with very different constituencies. >> my friend and yours larry kudlow made a point to me last week that to his observation, perhaps the factionst republican right that wants to be more combative or aggressive in taking on some of the issues with the administration and others are less interested in governing per se than they are in making a point and seeing their point to its conclusion. does that -- do you have any sympathy with that thought? >> i agree with larry completely. i don't think anyone in the party disagrees about the
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frustration of too much government, too many taxes, too many regulations. and the aura that we can solve all of that in a divided congress with the president, i think has caused a frustration which is stronger on the far right because they think if we've been elected we ought to be able to produce. we don't have the kind of majorities to produce everything we want. but we would like to move things, i think, in the right direction and try to make some progress. that's governing. if you just shut everything down when you don't get your way, it's taking the marbles and going home which wraely can't afford to do nor do i think people elected others to represent them to shut down government or walk away with nothing. >> we should stipulate that the government shutdown, if it comes to pass and i guess right now people think it is unlikely at least over the next 48 hours or
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so, only a partial shutdown. i think something like 30% of government employees are told to go home. rest, you still get your medicare payments. you still get your doctor's due. so it's not a total shutdown. let me ask you -- >> remember though, tyler, the president and the administration decides what is essential. we all learned that. so what the administration thinks is essential is funded and sometimes i think the administration makes a point of what they close to cause a lot of festering to open it back up. >> good point. senator, great as always to see you. thank you for coming by. >> thank you. >> kay bailey hutchison. we host the next republican presidential debate. it is in colorado, october 28th. same day as the next fed meeting. a busy day that will be, mandy. >> big day on the calendar. the question about etfs,
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risky and to blame for the volatility or a good tool for the average investor to get into the market? we're going to take a closer look as the market continues its recovery right now. all three indices are holding in positive territory with crude higher by 2.7%. do not go away. ment can protect capital long term. active management can tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive. it's active. that's the power of active management.
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power points this hour, a sea saw day with stocks back in the green at least right now. we'll wait and see. a rise today by the s&p 500 and the nasdaq would be their first in six sessions. hk up is 1.5%. that is followed by material and industrials. and on the individual names, pharma, transocean and metronic are up 4%. >> thank you. take a look at this mystery chart. it's the standout stock of the month. here's a hint. you could say it is cleaning house. we'll tell what you company we're talking about and whether it is a good time to get. i thought it was apple there just based on the price range. but cleaning house makes me wonder whether i'm wrong. (vo) what does the world run on?
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then simply select the best candidates from one easy to review list. and now you can use zip recruiter for free. go to ziprecruiter.com. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. 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? ♪
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the answer is yes, it can. so, the question your customers are really asking is, can your business deliver? the volatility blame game, are etf's guiding wild swings in the markets?
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also, pain in the patch. the big number hitting oil company investors. and as tyler showed you, can you guess today's mystery chart? this name, a september stock stud. that could be a hit. plus, ehlo castroneves, risk taker. we're going to talk about where he's putting his money right now and about his parent country of brazil. tyler? cleaning house was wrong. not even close. >> cleaning house was wrong? >> you said apple. you weren't even close. >> i said apple. >> not even in the realm. >> i'm not even close. >> all right. we'll wait to see what that mystery stock s meantime, nashville known for the country music, blake shelton, all of those guys. it is becoming a go-to place for startups. kate rogers is live in the country music capital. kate? >> tyler, that's right. we're here at the nashville entrepreneur center which is graduating 200 startups over the last five years. it's one of nine hubs across the
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state of tennessee to dedicate to start-up activity. >> continue to produce solid alumni, companies. and entrepreneurs. because nashville has the strength and health care and music, those are the two vert calls that we focus on. >> one accelerator and platform that is out of the prenur center is the jump-start foundry. the president and ceo with a little strategic play and some tough love is hoping to get his start-up to a 100% success rate. >> the goal should be 100% of the companies we get involved with have success. and we are very clear definition of success. and successful sale where people make money. >> now overall health care is pretty huge in nashville. it contributes about $40 billion to the region annually. they're also impressive. it graduated 48 companies in the past six years raising over $31
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million in capital. one thing we continue to hear about nashville is the creative class of entrepreneurs ready to step up and solve big problems. one stat to back that up is opportunity share of new entrepreneurs increased by 10% to about 60% of the entrepreneurs. those are people that are stepping up to launch companies and ventures because they have seen opportunities to do so in the marketplace. back to you. >> all right. kate, thank you very much. and that, folks, does it for the first hour of "power lunch." >> brian, over to you. >> thank you. 2:00 on wall street. 11:00 a.m. in carlsbad, california. stocks struggling to recover. hi everybody. me list why lee joining us from the nasdaq. the dow back in the green but not by much. you have oil up about 2%. all right. a big hour ahead including indycar star ehlo castroneves will join us to talk about his investing in this volatile market. he is used to quick turns. but this market lately has been something else. it brings us to a big question to open up today's show.
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are etfs which are designed to minimize riz beings creating more big swings? case in point, last friday when at one point every 145 stock in the ibb biotech index was down. different companies. different industries. different levels of success and profitability. and yet all down. let's bring in herb greenberg and leader of etf trends. he'll join us in just a moment. good to see you again. we have talked about. this i'm not knocking etfs. they're cheap. they give you broad market exposure. one wonlders are they not making the selling and maybe sometimes the up moves more exacerbated. what do you think? >> well, look. obviously nobody will know for sure what to say that they're not would be kind of silly. when we were talking about etfs a few years ago when we were raise something warnings about it on cnbc whether nobody really cared, the whole question is whether this would be the tail wagging the dog. and now you look at what
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happened in the market and specifically i think it's very interesting. back to about four days ago or so there is a great story in the "wall street journal" about this. and the guys from black rock, you have to give them credit, said that on august 24th which before the past few days was the real impact of the market. they concede. there were issues with etfs. they had structural issues that they didn't think about before. and then they came back and said well this is all volatility limits in the market. we have to learn how to live in a more volatile market. but that gets to the point. etfs are now part of the market. when you see the way the biotech stocks went down yesterday alone, forget about high frequent trading. >> tom, the biotechs are really what caught my eye. it's not just them. i'm not picking on the ibb or etfs or one sector in general. if i own an etf that owns 40 stocks and if i sell that and i'm a hedge funneled and i sthael etf, i'm dumping 40 or 50
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stocks automatically. does it make the volatility worse? >> well, they're part of the ecosystem. i think as herb is saying, you know, not to defend it, it's really what it is. etfs are $2 trillion. but to put in relation with the mutual fund industry that, is $14 trillion. you can't really track the buying and selling intraday with a mutual fund the way can you with etfs. that's why to a great degree they're under the spotlight s that really a bad thing? i think regarding august 24th, the idea there, there were system breakdowns that were going on the exchanges. there were periods of time when the market was halted for different securities. it wasn't etfs fault. that was the underlying securities that were halted. because of that, etfs were affected. i think there are two different issues. etfs are part of the ecosystem
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today. and we have to get used to it. we need tomorrow brace that. >> i want to go you to. it seems like if you're taking a look at who is going to be hurt by the wild viswings, it may be the individual shareholders. the individual holders of a gale yad or cell gene who might just hold those couple stocks but then you get the institutions who are making large size bets on the etf itself. that triggers automatic selling of the individual shares. the question is, is the tail wagging the dog or vice versa here? >> certainly since in the example we're using the ibb. instead of having a robust future like the s & p 500 or futures, futures options, index options that you could hedge with. instead, you're basically doing a basket of those stocks. so you are indeed smashing those stocks or buying those stocks. you know, to give both sides their due.
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when you're getting into or out of those big etfs. that has a marked impact on the market. and obviously on august 24th, 16% move out of the ibb that day. we got right back to it yesterday on an 8% drop. the turnover yesterday was phenomenal. the ibb was 11.8 million shares of that etf. it only traded about 4.8 on that big 16% move in august. so, yes, you're exactly right. some of the babies are going to get thrown out with the bath water, one of my favorite expressions, when you have this going on. people have to assemble those individually rather than trading a robust future or index option or anything else against it. >> making great points as usual. tom, are there too many etfs? >> well, we really don't need all the etfs we have today. we continue to see innovation. in the whole smart beta evolution is fantastic.
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now advisors and individual investors rather than going to afrpg en ancient indexing can have creatist. many investors need that discipline during the tough times. >> herb, final comment? >> it's interesting. etf companies come to me asking me to start an etf. let me tell you something, if i were starting an etf, i will tell that you will be the top of something and perhaps etfs. >> given your commentary, if you ever did that, we would make fun of you. >> i know you wochlt doesn't mean i wouldn't do it. >> come on, herb, you can do it. you can do it. >> the green top. if you ever rollout an etf. thank you. herb, tom, john. appreciate it very much. >> now let's go global. a writer has recently gotten back from another global hot
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spot journey to brazil and china. welcome. >> thank you very much. good to be with you, brian. >> thank you. brazil and china, the two biggest global hot spots right now. your take aways? >> if you start with brazil, i think the situation looks very, very difficult. the currency continues to deappreciate every day. we're at 411 to the dollar. and the previous low was four in 2002 and there was a lot of confusion about what was going to happen. i think where we are is brazil is becoming close to a buy. this is a country which does not stay low for too long. i've been traveling to brazil for 35 years. i think given the weakness in the currency, given the severity of the recession, all of the political negatives in the price, brian, it is starting to look good to me. >> i don't know what is in your west coast water beside fluoride. you know scott is based in l.a. and kind of said the same thing last week. maybe he is poking around brazil
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or it looks attractive. 35 years you've been going there. what makes so you confident that maybe this really is a bottom for brazil? >> good question. brazil does not stay low for too long, unlike neighboring argentina. that's one. second, when you talk to brazil in government and in the private sector, they are very qualified, many of them are u.s. educated topnotch people who are doing that. and then you find that when the currency weakens a lot, the country gains competitiveness. i think a lot of the brazilian problems are because of the chinese weakness. that is your other question. and that, again, is clearly incorporated into what is happening. all of those go into my thinking about brazil. china on the other hand, is i think still on the way down. i came away saying that the currency is going to weaken quite bate further. even though president xi told us all in the united states last week that the currency was going to remain stable. he also talked --
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>> you think it will depreciate again? they put on a piece today thinking that the wuan was going to be devalued again. >> i agree. i think there will be further weakness in it. very much the case. >> we talked about it on quauk box this morning. we talk about the bricks. we seem to never mention the i, india. india as many people as china, their economy has gone from four trillion, they tripled the gdp in the last ten years. they cut interest rates by 50 basis points. why don't we talk about india help mitigate the slowdown in china? >> in that region or globally? >> the reason is you'd be talking about it for maybe 15 to 10 years from now. the same way we talked about china being very important, brian, for the world growth today. we didn't even say this that in 2005, ten years back. china is much bigger, much more
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important. >> india is getting there. they're posting 7% plus growth. and the central bank head who cut the rates is very highly regarded as with all of his investment invitations in silly con valley last week. all of them are playing well. that is going to be good in a few years. >> we'll leave it. there it's amazing. sri lovingly reminds me of the life cereal commercials. you usually hate everything. the fact you like brazil is kind of interesting. starting to like brazil a little bit. >> so he's like mikey. >> exactly. sri kumar as mikey. >> thank you very much, brian. >> time to reveal today's mystery chart. that chart is cleaning house in the month of september. it is clorox. up about 20 t. 2% on the month versus a a% drop for the s&p 500. let's bring in linda bolton weezer, the senior analyst with b. riley and company. we should note that clorox is
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overvalued. i was looking through the notes. i'm surprised it doesn't have too much emerging market exposure unlike the peers. can you break down where it's getting most of the revenues. >> well, clorox has a number of things going for it. 80%st sales are in the u.s. it has small exposure internationally. zero sales in europe. really nothing in china. all of -- they exited venezuela recently. what they have left is argentine tina, puree, clom yachlt so very little foreign exposure. and you also have commodities for these guys. they're exposed to plastic resin because of the glad storage. that is a benefit. they had three quarters in a row with year over year gross margin expansion. that's the first time that happened in quite a while. >> the gross margins were surprising to me. in the mid 40% range.
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in term of the u.s. market, 80% of revenues, is this a growing market at all? are they doing product launchors product extensions that would grow their market share? >> well, yeah. in terms of the fundamentals, in terms of the market growth, as we've come out of the recession, their categories are cyclical a little bit. so as the economy has strengthens, we've seen acceleration in growth of the categories. so last quarter the categories they're in grew almost 3% in the u.s. on top of that, they're having nice market share improvements. really all of the categories they're gaining market share right now with the exception of just cat litter i think. >> all right. efrlg y efr >> everything you said is good about clorox. what in your universe do you like that you sthi worth a buy right now? >> well, you know, i actually have -- my folk us is on some smaller cap flower stocks. i advise on ftd and 1800
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flowers. in the personal care category, i like a fragrance stock. i do not have any buys on the staple stocks right now. most of the valuations are pretty stretched. >> all right. linda, thank you for your time. appreciate it. >> we are just getting started right here on "power lunch." we have $900 billion worth of investing advice coming your way. also, the ceo who lost nearly half a billion of his own personal wealth in just one day. who that is ahead. later on, three time indy 500 champ ehlo castroneves will join us. he's invested in stocks and has a lot to say about what is happening in this market and about brazil and why he's a nervous investor for a brave guy. stick around.
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my name is peter tran. i'm a gas service representative. 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.
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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. cnbc will host the next gop debate on fed day, wednesday, october 28th. it will be live from boulder, colorado. same day the federal reserve could, possibly, who knows, raise rates. big debate at night. october 28th. put it on your calendar with a yellow sticky. >> will do, brian. here are the stock headlines at this hour. microsoft says it will change the way reports fiscal results reflect the emphasis on cloud and mobile. those changes will take i infect starting this quarter. raytheon getting an upgrade to a buy from a neutral.
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the analyst there improves cash flow and profit margins. there is a standout in the market. check out reynolds america. the stock hitting a record. the toeb producer announcing a deal to sell the natural american spirit business to japan tobacco group for ere e5 . >> the day of easy money returns. at least so says your next guest for a while. john hiler is join us now as part of an exclusive interview. john, you run an asset management business. this is all due respect to colleagues in your industry. they say the bull times will last forever. why are you more cautious now? >> i think it's the way we look at the markets and the way we talk to the markets around the world much it's about long term investing. telling someone when a bull and a bear is going to be happening is next to near impossible. i think what you have to do is look at putting risk first and building portfolios that help you ride through the storm. that's what we're talking about
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right now. >> yeah. and how long do you see this quote storm, this volatility that china concerns, whatever fed continuing? >> you know, there's not a lot of great economic news out. there we get our fits and starts. i think if you and i when we spoke a little while back and even before that over the last two years, you know, it's been good numbers, bad numbers. it's been this political situation, this economic situation. it's been this country doing this. this country doing that. and i just think it's constantly feeds on people's perceptions and i think it's one of the reasons we're seeing this volatility. global marketplace, any type of global news seems to have a positive or negative infeheffec the market. >> it's been a crazy 15 years. you have financial adviser. i'm semiserious. your financial advisors have to talk to people. >> i used to be a young man. >> i used to have more hair and
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20 pounds less around the waist. >> when we first started, a 1% move was so unusual. now we've had over 50 of them this year. alone. so it's tough to kind of get your hands around that especially if you are an investor. and one of the toughest things for all of us to do is take the emotion out of the investors decisions. and that's one of the big drivers of what we try to explain right now in the marketplace. >> and that's a great point. maybe involves a little more hand holding. now you have the robo advisors coming up. but when you give market advice to people, you say you need to be more invests in stocks, let's try to pin that down. let's got somebody 35 to 55 years old, you know, 20, 30 years away from retirement, average risk tolerance. right now what percentage of their asset portfolio, john, should be in equities? >> look, the basic old traditional portfolio breakdown of 60/40 split, whatever twunlt use changed. that's ju to look at
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alternatives. people say what about atfs? there is nothing wrong with atfs in a portfolio. long term investing is the cyst call aspect of what you have to build around your portfolio. so your risk portfolio. what your risk goals are the most important thing. that's what helps you mitigate your emotions in a marketplace like. this for me, i think the seeds need to be plant aid few years ago. the advisors that are dealing with clients' motions today are going to struggle a little bit. the ones building the portfolios the last few years will have easier conversations. >> john, hiler, real pleasure to get you on. advice for turbulent times. only a few more years left to go. thank you. >> thank you. i hope not for you. >> exactly. there we go. still to come, indycar star ehlo castroneves will join the show. we'll ask how he's investing in these turbo charged times. but first, one analyst telling investors to say aloha in the good way to this hawaii-based company.
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that name coming up in part of "street talk" after this quick break and christine lagarde is expected to cut global growth forecast. what is worrying her? that is an exclusive big time interview tomorrow on "squawk alley" in the 11:00 a.m. eastern time hour. catch it on cnbc tomorrow. we're back right after this. ♪ approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five, but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent of part b medical costs. the rest is up to you.
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the dow is up 27 points. the up side would than it's not how much it's up, it's that it's up at all after being down four of the last five days. the s&p 500 and russell 2000 will both down about .3%. melissa? >> you know a big weight is apple. don't know if you saw this. it is down 2%. right now it is just about at session lows, down by 2.6%. this is one to watch throughout the session. >> all right. watching that one for certain. now it is time for our daily look at five big analyst calls. we do it every day. it's called "street talk." stock number one is a biggy. johnson & johnson. deutsche bank upgrading to a buy. in times like this, keep the baby in the bath. don't throw it out. the analyst there met with
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management friday and said they're warming up to the stock. they're more confident j & j can grow across all diversions. they called the company a diversified safe haven to deploy the target. about 20% upside from here. >> interesting they pick this one out. this has underperformer relative to the group. it's down 11% versus the group which is only down 4%. second stock we're watching, mcdonald's. time to start lovin' it. i can't take credit for. that credit suisse is upgrading mcdonald's to an outperform. the price target $112. there is a floor to the stock in the low 90s. two other catalysts coming up, october 22nd and november 10th. >> you referenced j & j being underperformer, mcdonald's the same thing. has mcdonald's turned a corner? it actually turned a corner. it is the fifth best stock in the dow this year. all right. stock number three, coverage yoe
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resources. it's a relatively lightly hit oil and gas company. i say that because it's only down 25% of the past year. olympic global advisors strongly reiterating the overweight rating and raising the price target on cxo. the target goes to $127 from $120 per share. concerns of anemic growth are unfounded. they continue to build substantial high value inventory giving itleverage. every time i see a note like this i highlight. eventual oil price recovery. no one knows. no one knows if oil prices will recover. >> this upgrade is also -- or this reit rags is also bizarre whether it come toantist notes. reiterating to the overweight because theablists have been wrong on this stock which is down 25%. what was it year to date or 12 months? i don't know. it's a very -- >> i'm sure you did it on fast where people talk about companies with the strongest balance sheets. they tend to be in the conversation.
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>> sure. of course. fourth stock, bmo. upgrading to an $86 price target. this stock is down 25%. it's a buy now because global crush marge rinz solid. farmers in south america are continuing to accelerate the selling of the crops which means stronger margins. we should know credit suisse is also upgrading this one to an outperform today. >> amazing. soy beans are down 13% year to date which makes them the best performing soft commodities this year. as always, the last stock -- it radar. they're in honolulu. steefrns calling it the best new idea for the year. citing strong earnings, consistent eps beat. the target on matson is $51. that is 37% upside from here. >> not too many stocks based in hawaii that we talk about often. >> we need a ceo conference at matson's headquarters. >> it's interesting is that they're increasing the operations in alaska.
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they just recently bought a bunch of alaska operations. >> yeah. >> and that's one of the things stephens notes a geographical protect the base for that company. you're not going to say let's start in hawaii. kind of far away. with that, we wrap up "street talk." next, the big pricetag on big energy, big losses. the big number you got hear coming up. the final oil trades are set to cross. we're headed live to the nymex when power lunch returns. here at the td ameritrade trader group, they work all the time. sup jj? working hard? working 24/7 on mobile trader, rated #1 trading app in the app store.
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hello, everyone. here is your cnbc news update this hour. president obama speaking at the u.n. summit on countering isis and violent extremism. he told world leaders that it will be a long and unconventional fight. not only to win the war but to win the hearts and minds of isis followers and sympathizers. a french tv news crew reporting seeing russian warplanes when they arrived at the airport at the coastal syrian city. isis fighters in the area, the move has raised questions now about russia's military
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intentions there. amazon will now pay you to deliver packages. the company rolling out a new program in its hometown of seattle called amazon flex. it offers one hour delivery using part time drivers to deliver the packages. drivers will be paid between 18 to $25 an hour. and the ncaa has come down hard on smu basketball's program and its coach larry brown. the team will not being eligible for postseason play and brown will be suspended for nine game. this after multiple violations were uncovered in that program including academic fraud and unethical conduct. that is the cnbc news update this hour, back to you. >> all right. let's get to jackie back at the nymex for the final oil trade on this tuesday. >> crude oil did make another run and set a new session high within the last hour and a half here. 4570 is that session high. trying to get up to that $46 mark. not able to hold.
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we settled at $45.23. again, traders are saying this is one of those seesaw days. yesterday we had a 3% move lower. today they're buying n 2% higher. back to you. >> all right. thank you very much. >> speaking of oil, exports seen as a possible way to firm up what has been a soft market to avoid more job losses because as oil stays low, investors capital and the biggest oil firms continues to take a hit. look at these market cap losses for the big six u.s. oil firms over just the last year. exxonmobil has wiped out $100 billion in market cap in 12 months. chevron, $83 billion. conocophillips, $38 billion. hess, 13 and marathon oil lost $15 billion in market cap over a year, folks. you add those six companies up, and the big six have lost $271 billion in combined market value over just 12 months. small cap stocks have been hit hard over the past month
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like everything else. badly underperforming is the s&p 500. let's get the next move with our trading nation team. if the bigger concern is global growth, you think that small cap stocks would do better. they're domestic. yet they've done worse. which confuses me. hopefully not you. how do you explain this? >> i think there are two things. generally there is a tightening of credit conditions which leads to a selloff in that sector as well. and they've been the primary buyers of a lot of the stocks. they're not as liquid for institutional investors. they moved into etfs. serve buying diamonds and spies, the interest in small cap stocks disappeared. and, therefore, now it's become a domain and institutional traders who are very, very quick to sell the moment they see any weakness. the volatility therein creases
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specifically because theory tail investor is gone from that marketplace. >> all right. chart the russell etf please, sir. >> when you look at the shorlt term chart of the russell etf, look no further than small cap, health care, and energy, too. that is versus the large cap counterparts. this is a one year chart, brian. it's not pretty here in the short term. you broke below the august lows. whereas the s & p holds the august low for now. that comes in around 110. remember that 110 brian this is where the story really gets interesting. at least for me, when you look at that weekly chart, focus on that 150-week moving average. you held that level going back to 2010. in fact, in 2011, it was a test of the 150 week which marked the end of that painful 30% correction and the beginning of a new bull trend. i think history repeats itself, brian. it all starts with a weekly close above that 110 level.
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look for 110 above that on friday to mark the end of this correction. in the iwms, if we don't hold that level, you can look for a test of roughly 105. and i'm looking for that 110 to hold. that's the call. on a weekly close below that, look for a test of 105. >> okay. watching 110. watching 105. rich and boris, thank you very much. reminder, go to tradingnation.cnbc.com. >> take a look at shares of apple. they're off the session lows right now. still down by 2.4%. the loss is $2.71. tim cook is appearing on stage. we'll tell you what he had to say. plus, is now the time to beat down biotech stocks? we'll ask fred hassan if we could see a spike in m & a. you're watching "power lunch." stay with us. you pay your car insurance
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welcome back to "power lunch." let's get you caught up on the markets now. fractional moves across the board. we do see gains. it is the nasdaq right now that is down by just about 8 points on the session. we're seeing market outperformance when it comes to bioteches, reitz and materials. brian? >> actually, i'll take it. shares of box are up. to date company hosting a box conference in san francisco. apple ceo took the stage. john ford joins us with. that. >> thank you, melissa. >> i want to bring in the ceo of box, aaron levy. good to see you. you are speaking with cnbc exclusively but speaking to apple ceo tim cook earlier today. he was giving his take on the enterprise business which is, of course, your sweet spot. i believe he said there's no particular enterprise phone
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xwust like there's no enterprise pen or enterprise car. also said that apple's done $25 billion in annualized revenue from the enterprise as of this past june. what is the upside for you? aside from the obvious star power of having tim cook on stage with you, being that they're not mainly an enterprise company. >> yeah, great to see you, john. so we had a great conversation with tim cook earlier this morning. i think what a lot of people don't recognize is how important and instrumental apple devices have been for the trance formation of it over the past three or five years. if you go 10 or 15 years, most corporate i.t. was a closed network with personal computers from windows as the primary operating system and the way we worked. that meant you couldn't get a lot of innovation from the outside. that was a closed off ecosystem. what apple has done is enabled every individual to i have tablet or phone to connect to
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new information from different platforms. so our growth at box has been driven by the sort of foush mobility which has been kind of core to what apple has done over the past five years. >> let's drill down on at announce. s you made. you said now that your customers will be able to more easily handle 3 d files, hd video, medical files in box. and you also announced box capture where people are able to use the mobile devices you were talking about to take enterprise related images. the images won't be stored to their own camera roll. that's not the kind of commoditized storage that people used to think of you as doing. what does this signal about your strategic direction and what kind of value you're going to be able to provide? what kind of profitability down the line? >> yeah. so we made two sets of announcements today. the first is reimagining how you can work within box. so all of the things before you want to interact with the contact, whether that is rich
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content like three 3 d objectors being able to edit feels. we updated work we're doing with microsoft and adobe and docusign and new mobile application to let you transform mobile work flows in the field. we had a big sound blow up here. so a bunch of things around reimagining how you work and collaborate. but we also opened up our platform to customer oz so they can build new application onz top of box. we introduced new pricing. so both of these thing goes to word. enabling only ways to be able to use box as well as build on top of the platform which is how we differentiate from traditional file storage in the cloud. >> we're going to roll with it. i remember when you were dissing the ceos of big enterprise companies. now you're friends with them. john claim berz was on stage you two day. aaron levy, thanks so much for joining us. >> all right. john, aaron and hopefully whoever knocked that screen over. serve okay. all right. shares of glencore bouncing a little bit back today.
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still down 50% in just the past month. that has got to be good news. that is not good news for the company's ceo. personal wealth has taken a big hit. we'll look at. that plus, ehlo castroneves. stick around. romantic moments can happen spontaneously, so 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
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glencore has lost 73% of its value this year. anlives are trying to defend the stock. kate kelly joining us with more on this on going drama. >> another day, another wild ride for glencore which sailed to day on a number of positive analyst reports as well as oon company commentary meant to allay the fears that rocked i yesterday. today's rally came after top global banks, many of which participate in the firm's $19 billion annual revolving credit facility or other shorter term loans. huddled with the internal risk
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managers to discuss their own exposure to glencore and also any ripple effects to a potential funding crisis if the company were to have one. that's an if. glen ks core told the market it had absolutely no solvency issues contrary to fears yesterday of a possible liquidity crunch. and that it was well on track to a $10 billion debt reduction. it already accomplished a quarter of that through an equity raise. they added hit no debt kofrnance and continues to retain strong lines of credit with banks. and some analysts also spoke up on glencore's behalf. citigroup a banking adviceor on a planned sale of agriculture assets wrote this morning that yesterday's market action was overdone and that if worst came to worse, a corporate privatization could be a logical route out of some of glencore's current troubles. and will is some support in the investor community as well as doomsday comparisons to companies like lehman. in a recent equity offering, the
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one i just talked about, priced a couple weeks ago, glencore's new shares were reportedly placed within a matter of hours. and i'm told that book was several times oversubscribed. so obviously there are two camps which it comes to the stock and the volatility is indicating that. >> a lot of debt out. there kate kel you, thank you very much. >> thank you. >> glencore shareholders have been slam sod hard they don't care anything about the sooets's net worth. the hair cut is such a big number that it certainly is worth mention. robert frank joining us now with more on that side of the story. zbh brian, it is a big number and worth mention. the good news for the ceo is he is still a billionaire. the bad news is that he lost over 75% of his fortune. whether they went public in 2011, his shares were worth over $6.4 billion. four deputies also became billionaires. as the shares declined, so has the wealth. his worth more than $6 billion has shrunk to about a billion.
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sow lost e$5 billion since 2011. according to forbes, he has fall innocent list of the world's richest from 301 to 1,335. glencore executives daniel matta, tori petterson and alex piece are no longer in the three comma club. one billionaire still in good shape, gary fangle left in 2013 and sold shares and worth $1.1 billion. back to you. >> i'll take it, robert, in the smallest violin in the world is playing for these guys. a couple wild weeks with the industry under fire from lawmakers and investors. shares of biotech recovering after a huge sell-off, losing its gains throughout the sense, only up by 0.4%. meg our biotech reporter is here with fred, the managing director of warburg pincus to discuss,
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fred is an amgen board member. meg, kick it off. >> fred, you led companies like be sher rigging plow, pharmacia, and barb and lom, in terms of the fear in the market does any make sense to you? >> i think we see a lot of volatility at different times. we have seen an tremendous increase in the biotech stocks over the last six years compared to the s&p 500 and once it gets to those lofty p/e multiples you can expect some compression and some correction. overall, the biotech stocks have done well for the last six years. >> people seem concerned about is this idea we could see more pricing controls from the u.s. government ors just pricing pressure on drugs. do you think that that's appropriate that the government could negotiate on drug prices, should that happen, will that happen and how should stocks react? >> pricing pressure on drugs is part of the marketplace and that's fine if done by the
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private sector. governments generally are not very good at managing prices, not very good at assessing what the right prices should be and this has been discussed many times in many different places. people have come to the conclusion that price controls don't work. we tried these in our country in 1971 with president nixon, they didn't work. wherever you go around the world, price controls imposed byes the government don't work. politicians are pretty good at lots of things, but running operations and deciding what the right prices are probably not good at that. >> a broad spectrum between no price controls and price controls, there could be pressure in the marketplace and you said it's part of doing business but already with your class of pcs k9 drugs, amgen and the other companies involved in the space have come under pressure from "the new york times" questioning the price because it's not a cure, not like a hep c cure you pay it once and cured of the disease. it's a drug you take continuously for a long time for
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treatment of high cholesterol, are you feeling increased pressure if that's what investors are thinking about as they look at the multiples, thinking ache about not just price controls but pressure, a lid on prices which will hurt your margins. >> i think it depends on the category. if you go to the diabeteses drugs or asthma drugs, there have been very good drugs which have had to give very large rebates, rebates as large as 50% because managed care has the power to exclude certain drugs and in order to come back in there, you have to pay that kind of a rebate. there are other categories which are new categories, which are different. i cannot make any prediction about this category that is just opening up but i think the marketplace has a way of finding its own level. there was a time when cholesterol drugs, such as lipitor were considered expensive, today they're bargains given the fact they can increase life and reduce heart attacks and strokes. these things are paid for while they are in the early life, and
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then when they go generic they make a huge consideration contribution to society at low prices. >> we appreciate you joining us. thank you so much for coming. >> really a pleasure. >> thanks for your time. >> on deck indy car legend helio castroneves is a brave guy with everything but investing, why he's nervous, what he's investing in and what his friends in brazil are saying. stay tuned. at mfs investment management, we believe active management can protect capital long term. active management can tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive. it's active. that's the power of active management.
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take a look of shares of tesla trading to the downside, delivering its first model x today. live at the factory tonight at 5:00 on "fast money" and give you the trade. >> thank you. we all know this market has been a wild ride lately. so wild even three-time indy winner helio cast tro knee vass doesn't have the stomach for it. a tweet he sent out, this market is joking right, come on, i can't do it in his voice, the man joining us now, helio, thanks for joining us again. i love talking to you about investing you are a market participant, a brave guy, go 240 miles an hour, why are you a nervous investor right now? >> let me tell you brian no question, my risk is controllable. i can go fast, i can go slow, whatever i want. when you go in the market it's difficult because you don't know what's going to happen and you
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see that tweet, looks like a graph from my racing motor sport, it's like a breaking point and all of a sudden like where do i go here. no question it's difficult to predict and as a guy learning in the market, it's a great -- i'm watching a lot of you guys and listening to a lot of you guys and all of a sudden it's very difficult to know where to go. >> looks more like a blown engine, know what i mean. it looks like the oil pressure on a blown engine. you and i have talked about it before, you are an investor, where are you investing you consider safe enough for even your sort of weak investing stomach? >> right now, i leave to the professionals, goldman sachs, wells fargo, they take care of my main investments. i have other ones i like to learn and invest a little bit. i like solid companies and the companies that are solid and they believe in me as well, my sponsors, pag, hitachi, aca
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holdings, shell pennzoil, one of those companies that i believe sometimes you go through ups and downs but those are the companies i feel comfortable invest. i do have other ones. >> always good to invest in the boss's business. penske auto group. that's a good career strategy. you're a brazilian guy, live here now, your country had a lot of issues there, you and i talked by phone earlier, you invested in pet tro brass, are you sticking by brazil and going to continue to invest in your home country? >> i have a lot of friends and business guys out there that they come back and forth and telling that, you know, this problem is not happening just now, it's a snowball, it's coming and probably it's going to continue to go bigger. no question, as i said, pet tro brass was a company i believed was going to go up and turned out to be lost quite a lot. at the end of the day the politics is difficult to predict and they say the worst is still to come. >> that's unfortunate to hear.
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our guest earlier said he thinks brazil might be ready to invest in again. i'll leave you with good news. thank you for joining us. >> great interview, good stuff. in the fast lane. see you tonight on "fast money." >> thanks. >> "closing bell" starts right now. get it, in the fast lane. that was funeny. i'm michele caruso-cabrera in for kelly evans at the new york stock exchange. welcome. >> good to be here. yes, feel better kelly. >> i'm bill griffeth. stocks are lower. it's close right now. we have the dire market warning from billionaire investor carl icahn getting a lot of buzz. scott wapner spoke to icahn about his fears and scott will join us with the highlights in just a moment. that should be very interesting. >> for sure. he made a movie abo

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