tv Power Lunch CNBC October 16, 2015 1:00pm-3:01pm EDT
ebay in the mix as well. an airline to talk about. >> talk more about the airlines, i think american will be interesting because they don't hedge, and oil has come down quite a bit. they should have really good earnings. delta it was really great. >> good stuff, guys. thanks. does for us. have a great weekend. "power lunch" begins now. >> thanks very much. welcome, everybody, to "power lunch" along with mandy drury, i'm tyler mathisen. who said october was going to be scary? the dow on track for the first three-week win streak since february. the s&p on pace for the best month in four years. is this slow and steady rally for real? >> is daily fantasy sports gambling? nevada thinks so. the state banning those sites. what this could mean for the industry ahead. >> and water worries. 40 out of 50 states will suffer some water crisis over the next ten years. how bad is it getting and what
can we do about it plus four stocks to trade those global water fear approximates. >> we begin with shares of general electric hitting seven-year highs on the back of its latest earnings. the stock has not closed at $29 or above since yawing august of. it's slightly below that and moving higher, about 12% so far this year. is all the restructuring working. mary thompson breaks it down for us. >> a lot of investors are at least betting it will work. ge in the midst of a massive restructuring and it delivered stronger than expected profits for the thirty quarter even as revenue missed estimates. the better than expected earnings helped by strength in the aviation and transport businesses and the news it plans to sell its majority stake in the consumer finance arm has helped to push shares to the highest level this is seven years. the exchange will lead to a $20 billion buyback, two-thirds of the $30 billion in capital ge is
returning to shareholders this year. 2015, of course, has been a transformative year for ge. it's keeping a tight rein on cost to improve margins. and it's ahead of schedule in selling $200 billion of assets in its once mighty finance arm. it's all part of ceo jeff immelt's plan to generate 90% of profits from its industrial operations by 2018. one analyst said ge, which is underowned by many big investors, is generating more attention thanks to the rapid restructuring and the recent investment in the firm by nelson peltz. back to you. >> thank you. let's go to breaking news with phil lebeau. phil? >> and tyler, this is one of those headlines that search going to look at and say, oh, this is pretty darn serious. you have united ceo oscar munoz, who has been on the job over a couple weeks, he's suffered a heart attack within the last 24
hours and is at a local hospital. we have calls into united. we're trying to get some confirmation and assessment of the situation, but again according to dow jones, united ceo oscar munoz, who has only been on the job three or four weeks has suchered a heart attack and is at a chicago hospital. as soon as we have more details we'll bring them to you. >> thank you for that news. a busy week for earnings. a huge one next week. dominic chu with the hits and misses. let's look at the scorecard and then tell us what's coming up. >> huge is a an understatement. we've had 58 reports, 1/10th of the s&p 500. 71 have beaten estimates. that's just about what we would expect to see at this point in the earnings cycle. so the analysts on average guess something 71% of the companies have beaten. about 10%, 1 out of every 10 companies have met analyst expectations and here you can see about 20%, 19% have missed here overall. now, the reason why, tyler, like
you said, it's going to be a huge, huge week for earnings because now we've got over 100 s&p 500 companies slated to report. so about 20% of the overall index. united technology, wednesday ebay, boeing, coca-cola. thursday, google known as alba fet, mcdonald's, microsoft, at&t. friday a proctor & gamble and american airlines. if you look at the overall earnings growth rate, that's going to be the interesting part because if all these analyst expectations come to fruition, you could see blending earnings growth downgraded 4%. it would be the first time since the financial crisis. revenues not much better. down 3.7%. so yaefoverall, the expectatione not good. if they go negative, it will be the first time since the financial crisis. the dow is nonetheless on track for the first three-week win streak since february. the s&p 500 a two-month high and on pace for the best month in
four years. can you believe it? health care stocks here leading the way. bob pisani joins us from the nyse floor. it feels like it's been a stealth rally, bob. >> the reason it feels that way is there's no obviously strong leadership. it's not like oil is coming out of the box or even we're getting dramatic turnarounds in biotech. it's been up and down, but we are consistent. we're up fractionally for the week. the s&p 500 kind of meandering around towards the end of the day but still solidly in positive territory. as you mentioned, health care a modest leader but i want to mention we're getting big industrial names. ge not bad and honeywell had very good numbers overall, and more importantly they essentially said for the full year they'd be right in the middle of the consensus estimates, $6.10. down a little bit here today, but overall a very good number. i want to show what the effect of the strong dollar has been having. i have been pointing this out for a long time. they reported organic sales numbers were up 2%, but the reported numbers, which includes
the effect of currency down 2%. this is the aerospace division, and they have three major divisions. it was the same in all three of them. automation and control, that's the segment that does the environmental controls and the security products, up 3% but the reported numbers that include the currency down 3%. let me mention suntrust finally ended the big banks that are coming out. they had good numbers and they're up for the day, and mandy and tyler, the important thing is generally the banks are on the upside this week in contrast to the way they usually are at the start of earnings season. >> thank you very much, bob. we'll get back to you shortly. there's a ton of fed speak lately. you've probably noticed. more than 40 fed heads speaking over the past 30 days but there were only three things that mat erd and moved the marketed. steve liesman, thank goodness you have sorted the chaff from the wheat or the sheep from the goats because this communication was getting confusing. >> and the question is is the
market hearing the fed correctly? they may be getting it a little wrong. first, i want to get into this issue, we've been counting with the help of my producer elizabeth the number of fed speaks between meetings, mandy. january, call it 20. 30 is normal. and then a huge number, 42 between the september meeting and the october meeting. these are just the speeches, don't count interviews. some of them are not policy statements, all the official presentations by fed officials. but now let's take a look at what move the fed funds futures yield for the december fed futures or counting ought what's happened essentially, number one here was the statement. so the market read the statement as being essentially dovish so that yield began to come down which is the same thing as a probability of the rate hike coming down. second thing, jobs report.
and three here was brainard/tu rue low right there. again, a big jump essentially getting rid of any possibility of a december rate hike. let's look how the market reacted. at first bad news was bad news, okay? stocks fell as the probability of rate hike fell and then with the jobs report it started coming back. mandy, the with unpoint i want to make here is this, we have eight fed presidents who asked for a discount rate hike. that's a typical way that they basically used to presage a rate hike. we have a lot of fed speak. a lot of people still saying a rate hike is possible this year. i'm not saying the market is wrong to discount it. it just feels like they're way, way, way over on one side of no rate hike this year. if we were to get a rebound in the jobs report and stronger growth in the months ahead. >> you were right for september so what's your feeling now?
>> i feel like they're not going to go in october. i think december is still a live meeting and it feels like the market is a little on one side. >> december still in play according to mr. liesman. thank you very much. >> depending on the data. >> always depending on dat that. dominic chu, you have a new alert. >> it's friday, it must be bakers hughes rig counts. right now we have a total u.s. -- actually the headline, we'll do that first. oil rigs are down 10 to 595 u.s. oil rigs, down 10. total rigs dropped by 8 to 787. now, of those u.s. rig counts we're down 1,131 rigs from the same time last year. oil rigs, that's total, oil rigs are down 995 total rigs from last year. all of this, of course, in context of near record production levels for oil that continue to hover there right now, but this again is another data point.
this time we see a decline of ten oil rigs from the same time last week, 595. >> i wake up every friday morning not thinking about golf, not thinking about the weekend, but about the weekly rig count. all right. last night the nevada gaming control board announced that daily fantasy sports like draft kings or fan duel constitute gambling and under this decision unlicensed daily fantasy sports operators, which is basically all of them, have to stop br operating in neve effective immediately. comcast is an investor in fan duel we should point out. chris grove is the co-founder of legal sports report.com. welcome, chris, or welcome back i should say. does this effectively put them ought of business in the state of nevada or can they apply for a gambling or gaming license and get back in the game? >> gaming control has made it clear there is a path to licensure for daily fantasy
sports operators. for the time being it seems all major operators have exited and we're unlikely to see any of them serve as players in nevada for months, if not years to come. >> so does this mean that if i am a nevada resident who is right now in reno, i can't access or play on their websites? are they blocked somewhere? >> the approach that every operator is taking is somewhat unique, and there's an interesting question that lies beneath what you just asked. what are regulators in nevada going to require of these operators to prove that they have fully exited nevada and that they're taking proactive measures in order to ensure that players from nevada are not accessing these sites? there are no universal standards on that point. each operator takes their own approach and we're all watching very closely to see where gaming is going to draw that line. >> should we be surprised at all, chris, that this move, a first move to designate them as gambling sites, comes out of
nevada, the only sort of state in the country that has legalized sports betting that i know of and where the casino operators certainly have lots of reasons to dislike these sites? >> i think that daily fantasy sports has been on a collision course with the commercial casino industry for some time now, and that this decision from gaming is just the first manifestation of that conflict. i think we're going it see this question addressed in other states in short order that also have a substantial commercial casino presence. that's not to say it's going to come down the same way in all those states as it did in nevada, but i think nevada's decision does accelerate the practi process. >> but is nevada the central place for sports betting and it doesn't take place in other states -- >> yes, that's accurate in terms of legal sports betting, nevada certainly the epicenter of activity in the u.s. >> legal sports betting. there would be no other kind of sports betting i'm sure, right,
chris? >> nope. >> chris, have a great weekend. we'll see you later. i got the redskins sunday with the points. mandy? >> water worries a government data showing 40 out of 50 states will suffer some water crisis in ten years' time. just how bad it's getting and what we can do about it. plus four stocks to trade the global water crisis coming your way next. you're watching cnbc, first in business worldwide.
welcome back to "power lunch," everybody. glad you're with us. i'm tyler mathisen. shares of twitter jumping on a tweet, yes, a tweet, from former microsoft ceo steve ballmer regarding his stake in twitter. ba ballmer said he built up a 4% stake. shares of opco health jumping. jpmorgan is starting to cover that firm. it started the coverage with an overweight and a $14 price target. and t-mobile is going to transfer its stock exchange listing from nyse to the nasdaq. shares will start trading on october 27th. time for a market flash. >> tyler, we're watching right now shares of joy global nearing their worst levels, down by 6%. analyst at bmo capital cut the price target to 21 bucks a
share. it used to be 25. the broker age says it expects continued sales declines and profit margin pressures as mining customers cut back on all those capital expenditures. this stock is down 65%, two-thirds of its value shaved off this year alone. >> painful for shareholders. 70% of our planet is water but only 3% is fresh water. two-thirds of that is trapped in glaciers and here in the united states the government accounting office believes that 40 out of the 50 states will be dealing with water scarcity by the year 2025. do the math. that's not that far in the future. seth just wrote "laet theet the water." a book about how israel has solved their water problems and he joins us with dean drey. gentlemen, thank you for joining us. seth, let's begin with you. as a kid growing up in australia, i remember sometimes having to fill up the tub during
really bad droughts, and that's all the water that we had to use for the whole day, but you know what? filling up a tub isn't a great solution over the long term. what does the u.s. and especially california need to learn? >> the most important thing is to have a national plan, and i must say we don't have one. we don't have one in terms of in fact. we don't have one in terms of agricultural policy. we have a federal highway bill every year, a farm bill. for some reason we don't focus on water. we approach water in a hodgepodge way as we did 100 years ago when we had lots of water and a lot fewer people and a lot less of an industrial economy and we need to bring our water policies and our water governance up to the 21st century. >> sounds like an excellent thing we need to do, seth. what can we learn specifically from israel and maybe even australia which has a lot of desalination plants, albeit very expensive. takes a long time to build. nonetheless, what can the u.s. do? >> by the way, australia is
widely considered to be among the two or three best water countries in the world, but to focus on what israel has done, israel, first of all, revolutionized its farming practices. agricultural generally around the world takes up about 70% of a country's water. so if you can reduce your water consumption for agricultural by even 10%, that's a lot of extra water for household use. they came up with a new way of irrigating crops. in most of the world fields are flooded. in israel they put drops of water on the roots. they also use sewage. they treat it to a very, very high level so you could drink it if you had to and then -- but you don't, and then they reuse it for agricultural. in israel it's 85% to 90% of the sewage is retreated and use for agricultural. in the u.s. it's 7%. >> there are countries including singapore that drink that
reconstituted sewage. last question and i don't mean to be cute by saying this but is possibly the worst thing that could happen right now for california the fact they might get sustained rain because then maybe policymakers would say the crisis is over. we don't need to work on this immediately. >> mandy, you put your finger on the greatest problem. that happens again and again because there is an expense to fixing water systems. you have to have smart tax policy or spend money for infrastructure and politicians really don't like to spend money for things that are under the ground that voters and consumers don't see. they like to spend money for parks and schools and hospitals but not for water systems. and if it rains they'll say, oh, there's enough water now. our aquifers are refilling. we don't need to do another thing for several years and that would be a terrible decision right now. >> thank you very much. really interesting to talk to you, seth. >> thank you. >> dean, let's turn to the investable angle. a lot of people have tried substitutes like wine but there really is no substitute for
water at the end of the day. we need this. it's investable, but how? >> so the whole concept of investing in water has enduring mega trend appeal. everyone knows that we're facing water scarcity issues. everyone talks about climate change. california has been on the front side of this issue. but the reality is the way to invest in water is actually pretty frustrating. some of the best businesses are divisions of bigger multiindustry companies that i follow. there aren't a lot of pure plays, and so there's a disconnect between the interest in investing in water and the actual companies to be able to invest in. >> so give us some ideas here. you know, you say there aren't that many pure plays, but there are lots of ancillary companies and sectors that are related to water. give us your best ideas. >> absolutely. so within the coverage of multiindustry and electrical equipment we have atr bc, half
the companies we have have a meaningful water business. xylem is the spin out from itt three years ago. that's 90% water, and they're moving up the technology scale to do more business and treatment and analytics. we'd like higher technology in water. danaher is the market leader in water test. roeper is the largest smart water meter company in the world. so when you think about companies like pent air also, nd sal nation doing pretreatment. so there's ideas there if you go hunting in the right places and move up the technology scale, there are ways to invest in water. >> dean, thank you very much for joining us today. >> happy. >> tyler, over to you. >> fascinating conversation. >> yeah. >> wynn, repost, and nestle, the
latest company to raise fears about china. there's something we could see in the report on monday we have not seen since the financial crisis. that's still ahead. you're watching "power lunch" on cnbc. moment to take a pill? or stop to find a bathroom? cialis for daily use, is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. >> fascinating conversation. cnbc.
chicago area. what we're trying to determine, and we have calls in to united airlines, is, a, the state of condition for mr. munoz, and what impact this might have regarding leadership of the airline going forward over the next several weeks and months. according to dow jones, they have talked with directors or sources close to the board of directors, and they are trying to get an assessment of munoz's condition, whether or not this was a mild heart attack or something more severe that could make him incapacitated for an extended length of time, and, therefore, maybe a leadership change is needed at least on an interim basis and again, that remains to be seen. we have calls in to our sources at united airlines, but at this point we do know according to this report from dow jones that oscar munoz has suffered a heart attack and is in the hospital. what happens from here in terms of leadership at united airlines remains to be seen. >> we certainly hope he's okay. thank you very much, phil lebeau. to the bond market now. rick santelli tracking the
action there at the cme. how have we been? >> you know, it's actually a normal end of the week in one regard, and that is there's not a lot of big moves going on in a proactive way. what seems to be missing is that normal mean reversion where traders somewhat even up with some of their positions. as you look at a two-day of 10s, there really isn't a lot of action. we're holding some of the sell-off that pushed rates up ever so slightly yesterday, and if you open a chart up to august 1st, we're precariously again sitting at 2%. and while we are there in 10s, the same time frame we're precariously sitting right above significant levels in the dollar index. traders say either one of those could tip the other to violate whether it's 2% or major trades into the lower 90s in the dollar index, so it's time to pay close attention, but we'll probably not see the results until next week's market trade. tyler, back to you. >> rick, thank you very much. have a great weekend. wynn resorts and nestle just a
couple companies pointing to china as a source of their weak earnings. shares down better than 2% as you see right there. china's gdp data comes out on monday. we could see something in that report we have not seen since the financial crisis, and it is likely not to be pretty. we'll tell you what it is after this short break. (trader vo) i search.
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hi, everyone. i'm sue herera. here is your cnbc news update at this hour. six workers have been rescued from a massive scaffolding collapse at a seven-story building under construction in downtown houston. more workers could still be trapped. the houston fire department has more than 30 units on the scene including several heavy rescue units as they work to remove all that debris. a palestinian man posing as a journalist stabbed and wournded an israeli soldier in the occupied west bank. moments later the man was shot dead. the attack took place here heb bron in the southern part of the
occu occupy territory. the time us airways flight took off from chicago this morning. tomorrow us airways will become american airlines. serial lovers have long dreamed of a marshmallow only box of lucky charms and now their dream has come true. general mills plans to give away ten boxes of the marshmallow only cereal in a sweepstakes to show their fans some love. the contest runs through sunday. good luck. that's the cnbc news update this hour. ty, back to you. >> mackey will send me to the store in search of those. let's check in with morgan brennan with a market flash. >> i got to say i'm excited about a box of marshmallows. the dow transports trading down 1.5% with kansas city southern leading the constituents lower. the third quarter results missed analyst estimates. also dragging down are ryder system and united continental
following news the new ceo has suffered a heart attack. and american airlines is also down 2% apiece. gold prices closing right now sitting at a three-month high. we are down by $4.66 at $1,182.90 the nouns. let's check in with jackie deangelis. >> we did see prices a little lower on the day but we closed over $1,180. that's a key level. gold moving more than 2% higher actually for the week. the major reasons for the move up that we've seen, well, no fed rate hike. that relatively weaker dollar is positive as well. also, the expectation in the gold pit is that we're not going to get a fed rate hike this year. so for the moment we're safe. we've got the support coming from the approaching debt ceiling deadline as well. a little selling today as we head into the weekend. some of these people taking short-term profits on short-term
moves. a break through 1200 is certainly possible before the end of the year. some are forecasting that. the rest of the metals, we're a little lower on the day, but keep an eye on copper. you were talking about that china gdp data supposed to come out on monday. copper did log a weekly loss and traders do think it could go lower from here. back to you. >> thank you very much for that jackie deangelis. as for the stock markets right now, we're kind of lacking direction. we're very little change with the nasdaq slightly lower, the s&p 500 and the dow flatlining. gosh, it's a bit of a quiet way to finish out a friday afternoon. bob pisani at the nyse and bertha coombs is going to be joining us from the nasdaq as well. bob, find the action for us. >> i'll tell you why i'm happy, we've got the through first major week of earnings with the banks and now ge and honeywell, market is holding up fine on that. i am happy with a quiet day. ge reporting today, new high for general electric. also we have two dow stocks at new highs, nike and general
electric. nike has been hitting new highs for a long time. a good report from honeywell as well. we haven't been hitting many new highs. it's been a small group of consumer names, altria, reynolds american, the cigarette company. clorox has been doing great this week. they've been hitting new highs on a regular basis but not much beyond a small group of consumer names. no love at all for metal stocks again today. we're seeing notable declines in some of the steel names, freeport another day down 4%. alcoa down 3%. i suspect, mandy and tyler, maybe they're trading down ahead of china's gdp report which is out sunday which is widely expected to have a six handle in front of it. we have been talking 7% growth earlier in the year for china. guys, back to you. >> a break below that 7% mark might unleash a wave of stimulus. trig they're stimulus that everyone is expecting. could turn out to be a good thing. we'll have to wait and see. thank you very much, bob. let's head over to the nasdaq
and times square with bertha coombs. >> take a look at the board and how things are trading. composite is kind of flat. biotechs is are weak, they're weak for this week as well. and apple is also down on the week, but the nasdaq 100 having a pretty good week. today the big movers in terms of volumes, mattel and wynn. mattel with disappointing numbers. it's just not a barbie world when you have a strong dollar. nonetheless, the ceo, the new ceo reaffirming that the company has the cash and will pay its dividend. it's up 6%. different story for wynn all it's off the lows. yet another disappointing quarter with more confusion in macao. steve wynn sounding off about that. when you take a look at the nasdaq 100, it's the best gainer of the major averages this week, up 1%. chips are really the reason why. take a look at the one-week chart on chips. the semis up if are a third straight week gaining 3.5% on hopes for greater consolidation
as a number of players said to be looking at putting themselves up for sale or approaching competitors. then you have twitter. you know the news today, steve ballmer tweeting out he has a 4% stake. depending when he bought, he could see some nice gains. twitter up about 13.5% right now for october. it is on pace for its first monthly gain in seven months. so investors clearly starting to like a little more clarity in the sense that they're moving in a new direction, tyler. back to you. >> bertha, thank you very much. there has been a slew of data out of china this week and it has not been particularly good. and on monday, as bob just alluded, investors will react to gdp and industrial production numbers. the question is, is there more bad news ahead. seema mody with that cheery intro is here. >> it's likely to show the chinese economy is slowing. the big question is by how much? if you bring up the chart, consensus is 6.8%, which would be the slowest pace of growth since the depths of the
financial crisis. three factors expected to weigh on growth. first, decrease in global trade. second is the financial sector also expected to be a drag. and that's due to the sharp decline in chinese stocks in the third quarter which resulted in a number of deals being delayed and ipos coming off the table. the yuan devaluation, remember that surprise move taken by china to boost growth in august? economists at nsb o say this was perceived by chinese businesses as a negative and suggested to many that china's economy is much weaker than expected. that dented confidence likely weighed on business activity. given this there are lingering concerns around the accuracy of the growth numbers, more focus will likely be put on the industrial output data which also comes out on sunday. traders say a read on industrial and manufacturing activity will test whether oil, copper, and other metals have put in their lows or whether there's more pain to be felt ahead of these key china reports. wynn resorts, yum brands, and nestle voicing their concerns
over china. expect this data to get the attention of not just economists but big multinationals with such exposure to the chinese growth story. >> they've been counting on chinese growth for a lot of revenue and profit growth. >> exactly. >> have a great weekend. thanks very much. dominic chu now with a market flash. >> we're watching shares of schlumberger, the world's biggest oil services company, hinting at more cost cuts down the line sending the stock lower by 4.5%. near its lows of the day. the oil field services provider expects a rebound in drilling activity to take longer than first expected. in their statement, schlumberger's ceo warned exploration and production spending will remain weak in 2016. again, the stock near the worst levels so far today. you can see schlumberger down 4.5%. >> i just love to say the word schlumberger. just love it. we're moments away from a joint press conference from president obama and the south korean
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♪ welcome back to "power lunch," everybody. i'm mandy drury. no, i'm not. it just says that in the prompter and i told mandy i would read that if it ever said that. the u.s. appeals court ruling that google's project to scan books for a project doesn't violate copyright law. alibaba announcing a proposal to acquire all outstanding shares of online video provider youku tudou. and jarden planning a secondary public offering of common stock at $49 a share. the offer is expected to close on october 21st. it is expected to raise up to $563 million.
now over to tyler. >> you know what? i have always wanted to be elder statesman tyler mathisen for a day and now i am. october is actually turning out to be not so scary. if you take a look at the numbers here, the s&p 500 is on pace for its best month in four years. what can drive the market higher? joining me is christina hooper, u.s. investment strategist. we also have jim dunnigan. christina, we're looking at an october which really is perhaps beyond expectations, but are we counting our chickens or maybe our pumpkins to early here? >> well, we can't assume this is because of earnings because the third quarter is really going to be a disappointing earnings season, but what we do have a the possibility that the fed is going to hold off longer. so this is largely not being fundamentals driven, so as long as we can continue to hear fed voices that perhaps suggests they're going to wait longer to
act, then we could see more of a boost to the stock market. >> and i was just talking about the chinese data potentially being a situation of bad news being good news with bob pisani whereby if we do get a bad printprint on gdp next week, that could release more stimulus and be good for commodities and risk assets. is that a scenario you could see play out? >> absolutely that's a scenario that could play out. what i would say is perhaps more of a goldilocks set of data points. not so bad to cause real fear but not so bad to suggest the fed needs to act quickly. >> jim, are we counting our chickens too early by saying this is a great month or do we still have a rocky path. >> we haven't seen the ghost of october past but certainly from the domestic standpoint, the economic data is supportive. we're off the lows we saw in august and september around those global growth fears begun
by china and their devaluation, and as you've reported, we'll get china data on monday, but likely even in that 6, 6.5 handle for the second largest economy of the world, to be growing at that rate, not as bad as the market is suggesting here. i think the backdrop is still supportive and you see earnings coming out fairly decent here. you reported ge and honeywell today, all probably not as bad as the 5% decline that's currently forecast. >> if the bar is low enough, it just gets that easier to beat, doesn't it? christina, talk to me about sectors. i know you like financials as a long-term prospect, but what about consumer discretionary after the consumer sentiment data today? >> well, if we look at where we see earnings growth, consumer discretionary really looks attractive, and that includes over the longer term. and, of course, there's a great catalyst, consumers. >> excuse me one minute. we have breaking news. phil lebeau, what more are you
hearing? >> we have confirmation from united airlines that ceo oscar munoz has been hospitalized. whether or not he had a heart attack, the company is not saying at this time. within the last couple minutes, united airlines issuing the following statement. we have been involved by oscar's family that he was admitted to the hospital on thursday and we will provide further details as appropriate. in the meantime, we are going to operate normally. our thoughts and prayers are with his family and we are respecting his privacy. privacy is going to be a big issue that's going to come out as we follow this story because there are going to be people who will say how much knowledge should shareholders and investors have if there is a situation where a ceo is admitted to a hospital? was this, in fact, a heart attack? as dow jones reported. is it a serious issue? is it a case where it was perhaps a mild heart attack? he might be back in the office relatively soon? all of that will likely come out i would say over the next few
days as we see exactly what has happened involving oscar munoz. the airline is confirming he was admitted to the hospital on thursday. mandy, back to you. >> thank you very much, and the shares, united continental down by nearly 3%. christina, i'm sorry i interrupted. you were talking about consumer discretionary in the context of the stronger than expected consumer sentiment data. what but consumer foal aeel and they're going to do doesn't necessarily follow through with that. >> there are a few tail winds at work. the job situation continues to improve. it's been a flawed job recovery but it's been a recovery. at first consumers didn't really spend their savings but what we know about behavioral finance is that the longer that oil remains at relatively low levels, the more likely consumers are to spend that. add to that just overall the consumer is in a better place in terms of being able to refinance
houses, more home prices have taken them to where they used to be underwater, now they're in positive equity, they can refinance. in the summer of 2013 more than 35% of homeowners were under equity. they couldn't refinance sitting at rates of 7%. that's changing and so more money in consumers' possibilities. >> good tailwinds there. i know, jim, you like consumer discretionary as well. christina and jim, thank you so much for joining us today. you can go to powerlunch.cnbc.com to see what christina and jim are keeping out of their portfolio. the no touch zone. tyler, back to you. >> sometimes what you keep out is even more important than what you put in. the nation's fourth biggest oil producer reportedly bails on the balkan. is it a sign -- excuse me, the ba ca bakken. you are watching "power lunch" on cnbc, first in business worldwide. here at td ameritrade, they work hard.
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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. we're awaiting a press conference at the white house with president obama and the south korean leader. we expect it to begin in just a few minutes' time. of course, major economic
collaborations between the u.s. and korea, and also a very important sort of security flashpoint between south korea and north korea. we'll be watching it and bring it to you live when it happens. let's look at the markets which are about as flat as flat can be right now. there are the industrials down two points at 17,139. nasdaq off 7 points but that's 0.1%. and the s&p looks like it's higher. gentlemen, welcome. steven, let me start with you. what a major move in that s&p 500 today. >> actually we've been pretty range bound but we're right at the low of the range. this is kind of a key area. 2022, 2023, that's support. so if this breaks, we're probably looking at maybe 2013. >> do you like the way, steven,
the market has performed over the past month? why not? and what does it tell you about its overall health? >> you know, i love the way the market has been behaving over the last month. who wouldn't? i'm making money, but i don't like the way things are going with the federal reserve, and i think it's only because we're so certain now that the federal reserve probably isn't going to raise any rates this year that we have this increase in stock prices, and it's not that it's -- it's not that they're not going to raise rates that has prices this bloated. it's that they just -- it's more certain. >> yeah. ben, why don't you jump in there. is this rally happening for the right reasons or for the fed reasons or the wrong reasons? >> i think it's happening for the right reasons. we continue to hear analyst after analyst talk about the disappointing earnings that are expected. that is true when you talk in the aggregate but i strongly recommend you remove the energy sector from that discussion and that gives you the reason why the united states stock market is moving higher. take a look -- my one concern today is the russell 2000 seems to be a bit of a drag.
that's really my leading indicator for the market but the fact of the matter is the u.s. economy is doing just fine. i think the stock market is rallying not so much as stephen said that they're not going ton changing rates. i think that's why some of the other risk assets are moving, like gold has had a tremendous move in the last few days and some of the metals, if you will. but the fact of the matter is the united states economy is muddling along. the fed missed an opportunity when they should have. they look they're now whipping boys or whipping girls to the world economy. that's not their mandate but that being said i think the market in october is traditionally a very good month. i think by the end of the year we will be higher based on the fact when you take away the energy sect orsector, everythin just fine thank you. >> gentlemen -- >> if you take away the winners you have to take away the losers. >> as i said the other day, i'd be undefeated if you wiped away my losses. anyway, guys, thanks very much. >> thank you. >> we are waiting for that news conference one more time.
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welcome back to "power lunch," everybody, and that is the scene at the white house at this hour as we await president obama and the south korean president. they will be holding a news conference momentarily. john harwood joins us to talk about the issues that will probably be raised by the press this afternoon. >> tyler, first of all, the visit itself is another part of the president's attempted pivot to asia. he has the transpacific partnership he's recently been completed negotiations on. he seeks approval from the u.s. senate. he is going to -- he recently met with the japanese leader here. they're trying to have a counterweight to china. in terms of the substance that will come up at the press conference aside from those issues, you can expect questions about the decision on troops in afghanistan, to leave some in through the end of his presidency, unlike what he had planned, 5 stsht,500 troops. some questions about the democratic debate and joe biden's potential entry into the
race and a whole other range of issues of contemporary american politics including the issue of gun control, which has also been in the news lately. >> to what degree do we expect the issue of china and the u.s./china relationship to come up considering china has been somewhat friendly towards north korea? >> that's interesting because president park recently was visiting with the chinese leaders in ways that people raised eyebrows about. of course, that's her right to set that agenda. she wants help from china with north korean aggression and bellicosity on the peninsula. the united states wants that, too. they both want china to rein in north korea, but the united states wants to make sure that we're here for south korea, too, and not lose influence. >> john, thank you very much, john harwood on the north lawn of the white house at this hour. thank you all very much for joining us for the first hour of "power lunch." brian with the press conference,
i don't know how much of a show you will get but i'm sure it will be very interesting viewing regardless. over to you. >> we're going to do an hour and two minutes if that's what we have to do. that's what we deliver on "power lunch." thank you very much, mandy and tyler. have a great weekend. second to the second half of "power lunch." i'm brian sullivan. we are down at the new york stock exchange and as mandy and tierr tyler have noted, we are awaiting president obama and the president of south korea. we're not seeing a big move in the dow. oil turned around on a big count that dropped. we're up 75 cents a barrel. bob pisani we're in your neck of the woods. thanks for having us. >> always glad to have you. >> not a lot of movement in the dow today. >> no. >> but there's a lot coming up. what are the traders really focused on according to your reporting? >> there's a little bit of relief because we're in the heart of earnings season and we've had the bank earnings and ge and honeywell and basically it's okay. it's not stellar, loan growth is fair, not amazing.
global growth amongst the global names is okay. we had nothing tremendously negative to say. and i think that's good enough. the market is fine with that. that's why we're basically flat this week. i'll tell you what's a negative. i'm a little concerned about the transports going down again. maybe this is due to what we just heard with the united ceo a little bit but it's been happening earlier in the week and the russell 200 0 is on the weak side. >> you said a lot about the market in there. there's an overarching theme among a lot of people that the shoe is going to drop this quarter. when you say it wasn't great but it wasn't bad, that's a good thing because everyone is kind of waiting -- >> the first thing everybody wants -- general electric and honeywe honeywell, 50% of their revenues is outside of the united states. did they have anything to say about china? did they say things are getting worse and they didn't. the absence of negative
commentary is itself a bit of a relief to the market overall. >> soed headline used to be bad news is good news. now the headline is not bad news is good news. >> a good way to look at it. the big market mover next week is going to be the china news. gdp on sunday night is widely expected to have a six handle in front of it. we've had terrible performance today from the metals names. all the steel names, all the aluminum names, all the iron ore names are to the downside. i suspect they're thinking this is probably going to be a negative number. seven is where everybody has had a handle. look at this. there's no news out. >> we are just waiting on the president. we might have to go any moment back to d.c. i'm going to pull an audible here, a little peyton manning action. kenny polcari, i want to bring you in because i don't know if we'll get to you during the
show. i want to ask to bob's point, why are we freaked out about the possibility of a six handle, meaning six point something on chinese gdp. we would genuflect if we could get a six handle on gdp. china has been slowing for four years. why is this a shock to snerve. >> i think it's a fact -- they have been talking about the slowdown. it's just a negative -- >> who -- we've gone from 10% to 9% in gdp. the trend is pretty clear. >> and agree. therefore, i'm not necessarily concerned that's going to be such a negative number, but you can't discount the fact of how other market participants are going to interpret that number. >> other issue is how some of the big commodity countries are reacting. brazil again -- >> by the way, as our viewers know, that's my biggest concern. it's not china. brazil is in a major recession. >> brazil was the weakest big country.
if you look at the ewz, that was down again. petrobras tried to float some debt this week. they couldn't do it because nobody was interested in it at the yield they were offering. that was a bad sign. into joo kne >> melissa knows you can float debt at some price. i was going to go back to china. 6.7% is the estimate. the other leg of fear is the street estimates are so dispara disparate. you have 6.4% all the way to 7%. in the second quarter a real driver was the services sector particularly financial services with the stock market. in the third quarter that probably evaporated. what kind of impact will we see on the third quarter print? that's the concern some sunday night, especially as we are hearing as bob had pointed out so many companies cite china as a real concern whether it be wynn or a yum or, you know, a lot -- >> i just -- i hear you melissa. i guess my point is this on china. we export three times more to canada than we do to china. china is about 125th in per
capita gnp. the value of the goods each worker produces is 125th in the world. we buy a lot of stuff from them. they don't buy a lot of stuff from us -- >> i hear you, brian. >> it feels like china is punching above its weight in the market. >> i hear you, but you could have made that argument long ago and still the markets reacted. that is the world we live in right now. you can explain away that impact in terms of world gnp and investors don't care. >> when china devalued the yuan, the whole world moved. that was the week before that august 24th drop. so i think you make a good point that maybe we're overemphasizing, but the market apparently is not, and china is the primary engine right now. it's what's moving the global stock. >> i think that's coming to be an old story all of a sudden. >> the markets are telling us that. >> it's like we forget india has almost as many people as china and thash economy is tripled in a decade.
we never talk about that. >> who is talking about it? >> jeff kilburg is in chicago. jeff, i understand i'm not discounting chicago's relevance especially in the commodities market and i'm not saying it doesn't matter at all. i just wonder if the overall, quote, market is overworried about china. what's your view? >> so i think you bring up a great point but we are worried here in chicago, specifically about china. it's not the exposure directly to china, it's the exposure we have to europe. the intense exposure they have to china. it comes full circle to our shores. we're going to be focusing in on the services component. we were seeing a slowdown in manufacturing and construction but if they can pick up the slack in the services component of that gdp china number on sunday night, we'll be okay and investors should feel all right about the week ahead. >> i think jeff is exactly right. i think people are focusing too much on the negative, and i think as they start to transform their economy, you're really looking at what the services component is going to add. >> you know, okay, good point.
last thing i will say though just because we are awaiting a press conference with the president of south korea, do you guys -- bob, rm unfortunately, we've been doing this a long time. i remember when the hottest market was korea. melissa, that's been a market that hasn't done anything for years. >> it was one of the very first countries, remember, to move out of emerging market status into essentially developed market stats. >> and we saw the hit from china on south korean exports and imports. guys, thanks so much. great discussion. meantime, let's talk general electric hitting a new high and higher by 3% right now after posting an earnings beat. let's get to mary thompson with more on the quarter. >> just want to pick up on what you were talking about. ge actually said europe was very strong in the last quarter and china was okay. all of this in what ceo jeff immelt called a slow growth and volatile environment. the company did have strength in
aviation and its transportation business along with kocost cuts. it helped ge deliver stronger third quarter profits. earnings were 3 cents ahead of estimates. now revenue missed undercut by weakness in the oil and gas business and the organic revenue growth rose 4%, a rate immelt expects to deliver in the fourth quarter again. ge stock rising to best level this is seven years building on gains since activist investor nelson peltz took a stake in the firm. immelt saying ge and peltz's strategy are pretty closely assigned. >> i think the white paper kind of lays out their thesis and, you know, i think that's -- you know, we don't agree with everything, but it's pretty consistent with what we've done and what we're doing. >> the cfo adding the suggestion they buy back stock -- now, on
the analyst call, the soon to close alston deal will deliver $3 billion in synergies. a share exchange for sink ronity will begin next week. and he also noted the wind down of ge's finance arm is ahead of schedule with the sales fetching slightly better than expected prices so far. ge is expecting operating profits and revenue though at its oil and gas business to decline between 10% and 15% next year. 2015 certainly a transformative year as ge closes in on its goal of generating 90% of its profits from industrial businesses by 2018. back to you. >> mary thompson, mary, thank you very much. let's go now live to the white house where the president will hold a press conference with the president of south korea. >> good afternoon. last year in seoul president
park welcomed me to the blue house. today it's my pleasure to welcome her back to the white house. madam president, during your last visit here you addressed a joint session of congress which is an honor reserved for america's closest friends. you noted the founding fundamental of both of our countries, our declaration of independence and your constitution, enshrine our commitment to our people with the same words. to their pursuit of happiness. for more than six decades americans and koreans have stood shoulder to shoulder in that pursuit, and madam president, once again your time here includes a visit to our korean war veterans memorial. we are very grateful for that. it's a reminder that our people have fought and bled and died for one another's freedom. and i know your gestures mean a great deal to the american people and especially to our proud korean war veterans.
in recent years president park and i have worked together to strengthen our alliance for the future, and today i want to reaffirm that the commitment of the united states to the defense and security of the republic of korea will never waver. our alliance remains a linchpin of peace and security, not just on the korean peninsula but across the region. so south korea plays a central role in america's rebalance to the asia-pacific and we continued that work together. as we agreed in seoul last year, our militaries are investing in shared capabilities, including the technologies and missile defenses that allow our forces to operate together effectively. we want to ensure that our korean allies have the capabilities needed to take on greater responsibility for the defense of the peninsula and the eventual transfer of operational control of the alliance, and we're determined to maintain our readiness against any threat.
madam president, i want to commend you and the people of south korea for the resolve you displayed this summer following north korea's reckless actions in the dmz that wounded two of your soldiers. north korea was reminded any provocation or aggression will be met by a strong united response by south korea and the united states. likewise, pyongyang's nuclear programs have achieved nothing except to deepen north korea's isolation. today president park and i are reaffirming our nations will never accept north korea as a nuclear weapons state. we will continue to insist that pyongyang must abide by his obligations on the complete and verifiable denuclearization of the peninsula in a peaceful manner and given the horrific treatment of the north korean people by their government, our two nations will continue to he can poseexpose abuses and call
accountability for human rights violations. at the same time we do support president park's efforts to improve relations between south and north korea. as my administration has shown with iran and with cuba, we are also prepared to engage nations with which we've had troubled histories, but pyongyang needs to understand it will not achieve the economic development it seeks so long as it clings to nuclear weapons. in contrast, president park has articulated a better vision, a unified korea, free from the fear of war and nuclear weapons, and that's a vision we very much support. beyond the peninsula, president park shared her proposal, the northeast asia peace and cooperation initiative to build greater cooperation among the countries of the region and we welcome those efforts. president park and i have met with prime minister abe of japan last year to address shared
challenges in the trilateral summit president park will host this month can be another step forward in building positive relations between south korea, japan, and china. with respect to trade, we reviewed the first three years of our trade agreement. bilateral trade is up, including exports of american autos. we do still have work to do and i conveyed that when the issues of implementing chorus have arisen, they have been resolved, but we need to resolve them quickly, and president park discussed the regulatory reforms she's pursuing. those are reforms we welcome. and finally i'm pleased our alliance is increasingly a global one. south korea is not just an important player in the region, it's increasingly an important player on the global stage. they remain a partner in development in afghanistan a member of the coalition against isil, a generous donor of humanitarian aid to syrian
refugees, and now we're going even further expanding our cooperation to some new front r frontie frontiers. for example, given the increasing cyber threats to both our nations, including from the dprk. we're stepping up our efforts to strengthen our cyber defenses and coordinating at the highest levels. the white house and the blue house making sure that we're in sync in dealing with that challenge. in the fight against climate change, we're accelerating our investments in clean energy. our new civil nuclear agreement reflects our shared commitment to the safe use of nuclear power, which is a low carbon energy source, and i want to comment south korea for announcing its post-2020 target to limit carbon emissions through its national cap and trade system. as we head into the paris conference, south korean leadership can be an example for other nations around the world. and finally, we're expanding our
cooperation to promote health and global develop. having already worked together against ebola, south korea's stepped up as a true leader in advancing global health security. our development agencies will partner to reduce poverty and encourage sustainable development in southeast asia. and both our countries are standing together to promote education and health for girls around the world. our let girls learn campaign and south korea's better life for girls initiative. so madam president, thank you once again for your partnership, your leadership, and your friendship. i believe that we have shown again today that our unbreakable alliance is not just a foundation for security in the korean peninsula and in the asia-pacific region, more and more our alliance is helping people around the world in their own pursuit of happiness. the security and prosperity and dignity that they seek for their families and for their nations. madam president.
>> translator: mr. president, thank you very much for your remarks. i also thank you and the american people for the very warm welcome you have extended to me throughout my visit. now, in today's summit you and i discussed not only the korea/u.s. alliance but also issues surrounding the korean peninsula, northeast asia, and a shared global agenda. during the past 2 1/2 years, we've been able to create and resolve sensitive issues such as the revision after 42 years of the nuclear cooperation agreement which evidences that the korea/u.s. alliance is stronger than ever. our alliance is now moving beyond a security alliance and an economic alliance and evolving into a comprehensive global alliance. the biggest threat to peace and
security on the korean peninsula and northeast asia is north korean provocation and advancement of north korea's nuclear capabilities, and president obama and i shared recognition in many aspects of this -- including china, rush sharks and japan, and to this end we will try to fully utilize the various regional and multilateral gathering that are to take place. second, with a sense of urgency and firm commitment, we have great to strengthen diplomatic efforts to resolve the north korean nuclear problem on the basis of korea, u.s., japan cooperation. while korea and the united states will deepen consultations with other countries including china. third, should north korea
demonstrate a genuine willingness towards denuclearization, we reaffirm that korea and the u.s. along with the rest of the international community stand ready to extend cooperative measures to the north. in our discussions, we looked beyond today, the current -- we looked beyond the current pressing issues and engaged in deeper discussions about the future of the korean peninsula. in the process of peaceful reunification, we will continue to pursue mutually coordinated policies on north korea. we will also deepen high level strategic consultations between korea and the u.s. i would also like to thank president obama for his support for the korean government's ideas on peaceful reunification. today we adopted a joint statement on north korea that contains our shared recognition on these related issues. the korea/u.s. alliance is the
linchpin of peace and stability in the asia-pacific and there exists a synergy between president obama's rebalancing of policy in the asia-pacific and our northeast asia peace and cooperation initiative and i will like to thank president obama for his warm words of welcome and strong support for napci. in late october the second forum will be held in seoul around i hope korea and the united states will continue to engage in close cooperation in that forum and beyond. president obama also recognized korea's initiative in reviving korea, japan, china trilateral talks that had been on hold for the past 3 1/2 years and he also expressed his high hopes for the summit that will be held in two weeks' time. we also shared the recognition that such meetings may meaningfully contribute to the improvement of bilateral
relation this is our region. president obama affirmed that korea/u.s. relations and korea/china relations can be compatible and supported korea's policies towards china. the recent summit meetings between korea and china, the u.s. and china, and now korea and the u.s. have served to build consensus regarding north korea and its nuclear program and we believe that this will play a positive role in ensuring peace and stability on the korean peninsula and throughout northeast asia. in dealing with the north korean nuclear problem, we will seek to strengthen cooperation between korea, the u.s., and japan. i believe that strengthening three-way dialogue between korea, the u.s., and japan, korea, japan and china will enable us to open new channels for stronger regional cooperation. regional peace and stability
becomes stronger when countries within the region build closer ties of mutual economic dependency. in this regard, i would like to congratulate president obama for the successful conclusion of tpp negotiations. korea and the u.s. already have an fta with high standards and in this respect i believe we make natural partners in terms of the tpp. since tpp negotiations have now been concluded, we will be engaging in closer cooperation with regard to korea's possible participation in the ttp. today's meeting was particularly meaningful in that it provides impetus to our efforts to open new fron tetiers of cooperation. korea and the united states will focus first on health security, cyber security, space, which are gaining the spotlight in this
21st century. in the realm of space particularly, we will work to quickly conclude talks on the korea/u.s. space cooperation to establish an institutional foundation for such cooperation. in the cyber world too, in order to enhance common response capabilities against cyber attacks, we've agreed to establish a hotline between the white house and the blue house. on global issues president obama and i on the occasion of the 70th anniversary of the united nations have agreed to strengthen cooperation on climate change, u.n. peacekeeping operations, nuclear security, humanitarian aid for refugees, violent extremism and other urgent global issues. today's summit served as an opportunity to set forth a clear vision and strategy for the foo future of the korea/u.s.
alliance. in forging a new korean peninsula, a new northeast asia, and a new world, i'm confident that the korea/u.s. alliance will continue to evolve into a comprehensive strategic alliance. >> we'll take a couple of questions. we'll start with michelle kosinski, cnn. >> thank you, mr. president. on 2016 now that we've seen the democratic candidates and their first debate and how they did and maybe you can share some of your thoughts on how much you watched of that, do you feel like the window now has closed on the vice president entering the race and if you don't feel that it's closed, do you feel that he in a sense owes it to fellow democrats to get in very soon. and also on israel we heard secretary kerry said one of the roots of what's going on there now is frustration over settlement activity. do you feel like that is a root cause of the violence and do you feel like president abbas has a responsibility to condemn attacks and try to stop them?
and president park, welcome. as you know, the u.s. has reached this deal now with iran over its nuclear program. i'm not sure if i should start over. were you able to hear that, president park? as you know, the u.s. has reached a deal now with iran over its nuclear program, but how would you feel if that were north korea? would you welcome attempts for such a deal and do you feel like you would ever trust north korea to abide by such an agreement? thank you. >> the democratic debate was taking place at the same time as some ball games, so there was a little bit of clicking back and forth. i'm not going to comment on what joe's doing or not doing. i think you can direct those questions to my very able vice
president. the one observation i'll make about the democratic debate was that those are all some very fine people. they share a belief in an economy that is working for everybody and not just the few. they share a belief that america has to project strength around the world by maintaining the finest military but also by making sure that we've got a strong economy back home, that we're employing diplomacy and working with other nations wherever possible to solve big problems like climate change. so what was interesting to me was the degree to which, although there's some very real differences among the candidates and i'm sure those will emerge and there may be for each candidate some differences with my administration, overall they very much -- we very much share
a vision of an economy that works for everybody and effective pursuit of america's national security through all the tools that are available to us. and i was very impressed with all of them and i know them personally and they're good people. beyond that i think it's up to the american people to decide, and so i will have a vote like everybody else as a citizen, and, you know, that ballot is private and i don't have to share my views about that right now because i think it's important for the american people to make up their own decision. [ inaudible question ] >> i think that the vice president, like every other candidate, makes their own decisions about these issues, and they'll have to figure out whether it makes sense for them. with respect to israel, obviously we're very concerned about the outbreak of violence
that initially is centered on jerusalem but we always are concerned about the spread of violence elsewhere. we condemn in the strongest possible terms violence directed against innocent people, and believe that israel has a right to maintain basic law and order and protect its citizens from knife attacks and violence on the streets. we also believe that it's important for both prime minister netanyahu and israeli elected officials and president abbas and other people in positions of power to try to tamp down rhetoric that may feed
violence or anger or misunderstanding and try to get all people in israel and in the west bank to recognize that this kind of random violence isn't going to result in anything other than more hardship and more insecurity. and, you know, i don't think that it's -- i don't think we can wait for all the issues that exist between israelis and palestinians to be settled in order for us to try to tamp down the violence right now. i think my views are well known that over time the only way that israel is going to be truly
secure and the only way that the palestinians are going to be able to meet the aspirations of their people is if there are two states living side by side in peace and security. those talks, which secretary kerry put an enormous effort in and before that a number of our envoys and secretary clinton put an enormous effort in, have stalled, and i think it's going to be up to the parties, and we stand ready to assist, to see if they can restart a more constructive relationship. but in the meantime right now, you know, everybody needs to focus on making sure that innocent people aren't being killed. and even though you didn't ask me the question i'm just going to horn in on the question that you asked president park because we actually discussed iran and what it could teach us about the situation in north korea.
these are both countries that have a long history of antagonism towards the united states, but we are prepared to have a serious conversation with the iranians once they showed that they were serious about the possibility of giving up the pursuit of nuclear weapons, and i suspect president park agrees with me here that at the point where pyongyang says we're interested in seeing relief from sanctions and improved relations and we are prepared to have a serious conversation about denuclearization, i think it's fair to say we'll be right there at the table. now, whether -- even if they made that gesture they would then be willing to subject themselves to the kind of rigorous verification regimes that we've set up with iran
particularly given their past violations of agreements, that's a separate question. but we haven't even gotten to that point yet because there's been no indication on the part of the north koreans as there was with the iranians that they could foresee a future in which they did not possess or were not pursuing nuclear weapons. [ inaudible question ] >> i don't think that's what secretary kerry said. i think what secretary kerry said was that we have to end the violence, that israel has a right to prevent its citizens from being subjected to random violence, that all parties have to lower the rhetoric, that the religious sites that are so important to three of the
world's major religions inside of jerusalem need to be respected and that the status quo that allowed shared worship in and around these spaces needed to be maintained, and then i think as an addition to those statements, what secretary kerry said was that the atmosphere in which there's so much tension and suspicion between palestinians and israelis obviously creates the potential for more misunderstanding and triggers, and that's something that has been true now for decades, and if we can make progress there, obviously it's going to help. but, you know, there's not a direct causation here, and what we do need to make sure of is that we're focusing right now on
ensuring that innocent people aren't being killed. >> and we are going to pop out of this and get back to the financial markets. just a reminder that if you want to continue watching the press conference with the president of south korea as well, that is streaming live right now at cnbc.com. we've got a dow up 10, oil up nearly a buck. let's get to john harwood to wrap up what we have heard. iran is big topic at the news conference today. >> the president was asked about parallels with iran with which we just concluded negotiations with our western partners over a nuclear deal and north korea which continues to pursue nuclear tests and to acquiring nuclear weapons. i believe they have nuclear weapons. i don't know how effective they will be. he said he would be willing if they were willing to accept the idea that they would do without nuclear weapons, he would engage in negotiations there, but they
haven't done so. of course, he's appearing with the south korean president, park, who is looking both to the united states and to china for help in resisting aggressive behavior by north korea. the president unsurprisingly, completely unsurprisingly, made no comment substantively at all about the decision facing vice president biden on whether to enter the race. did say that the democratic debate the other day presented a contrast with republicans because you had serious people on stage pursuing issues like climate change and discussing different solutions, whether they agreed with him or not, so that was a dig at republicans, and on violence in israel, he said, of course, israel has the right to protect itself but called on prime minister netanyahu to avoid doing any -- using any rhetoric that inflames the situation. so not anything earth shattering so far but i'll be monitoring the rest of the news conference in case we do have a significant news made and then i'll be back on with you.
>> we might see you then, john harwood in washington. thank you very much. it looks like despite oil being up a couple cents right now, it is going to be another disappointing week for the oil bulls. crude ending the week down despite the jump. it's back to your money, back to cnbc and what we do, because we're first in business worldwide and we're right back after this. stick around.
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hi, everybody. welcome back to "power lunch." i'm sue herera with this news alert for you. according to reports a group of russian hackers infiltrated the servers of dow jones and company, the owner of the "wall street journal" and other publications as well. they stole information to trade on from those areas before it became public. that's according to several different reports. the fbi, the secret service, and the securities and exchange commission are leading an investigation of that infiltration. people basically say that this is far more serious than the lower grade intrusion disclosed a week ago by dow jones which is a unit of rupert murdoch's news corporation. it is unclear, however, whether this incident is related to the earlier one that was disclosed. it's also not known whether or
not the company's news gathering operations were affected and, of course, given the fact that a lot of times news is embargoed, if they were able to access those stories or stories about mergers and acquisitions they could then trade ahead of the market. so, brian, once again another hack. we don't know whether it was related to the earlier hack, but this apparently is much more serious. >> you know, sue, it's getting to the point now when i say this only half jokingly, we may need to start to have a who got hacked today segment because this is happening nearly every single day. >> it's happening all the time and on a much broader scale as well. they seem to be getting bigger and more serious when they do occur. >> just incredible. sue herera, i'm sure you will continue to follow that story. thank you very much. >> absolutely. >> in the meantime, back to the markets. we're following a developing story right now with the fresh market, that's a publicly organic food stair. tfm is the ticker and that stock, i just checked, it trades over the counter s ha, is halte.
that could be the last trade. going to find out either way according to reuters, the co-founder of that company may be exploring a bid to buy the company out either on his own or with the help of the private equity tf m. last trade the stock was up 12.79%. you will forgive me. i'm reading the board from down here at the nyse. we're watching the developments. that stock has been hit hard. well, the market bounce overall continues. we're not doing a whole lot today. the dow jones industrial average is up 27 points, but guess what? the s&p 500 having its best month in four years. let's talk trading nation with our team, david seeberg and katie stockton. david, do you remember a month ago when everything was doomed, stocks were doomed, the economy w was domed. what happened? >> we came out of two months, august and september, that were massively fear-driven months. you look back at the global fears we were hearing about, the global macro fears.
earnings possibly falling off a cliff. there were a lot of things that sort of like reared their ugly head. throw in the mix the drug pricing concerns hillary clinton tweeted out. all of a sudden you have one of the best performing sectors over the past five years falling off. you've got other things sort of picking up their heads. people really just derisked across the board. so you saw basically long selling. people getting out -- >> david, you're a semi modest guy. you know i love you. but you will not say this so i will. the next day after biotechs got whacked, you came on cnbc and tweeted it out -- >> i did. >> you told everybody to buy biotechs. looked like a pretty good call based on that low the day after that happened. >> i appreciate your remembering that because i got a lot of heat for that when that came out. i went out on twitter and said something as well. got a lot of heat. look at it now. here is the thing about that. i really think the fear-driven mentality forced a lot of investors to shoot first, ask questions later. i mean, you can't take the risk
of reporting to your chief of risk at a fund saying that you held onto positions longer than you should have in an environment like that so people derisked across the board. now what are we seeing? we're seeing an understanding of pricing, that they really can't have an impact the way she said they could. we're looking at, you know, other sectors and getting -- wrapping our heads around the earnings that are coming out and probably realizing that china is not going to have the impact that i think a lot of people again feared. so you're seeing a totally different, you know, repositioning effect going on right now. that could last a little while longer. i think we're probably getting up to the end of that for the short term, but ultimately, brian, i do believe you're seeing people reposition themselves because the derisking was so incredibly deep. again, based on fear. >> you know what? stay convicted, my friend. don't become a waffle house. it was paul neuman who said if you're not making enemies,
you're doing something wrong. katie stockton, is this mini rally for real? is it going to last? >> i think it is for real. there's a lot of doubters out there. we saw the s&p 500 clear psychologically significant resistance around 2,000. it's a nice, big round number and once we cleared that, we did see momentum pick up for the s&p 500. so i think that's an important thing to note, that we saw follow through on back of that breakout and really a whole lot of breakouts among individual stocks above levels like the 50-day moving average, for example. so you're seeing a lot of reversals here in terms of intermediate term down trends and there's still room based on my indicators. you're seeing not yet overbought conditions on an intermediate term basis. certainly you see them selectively on a short-term basis but that's not always a bad thing when you have breakouts as widespread as they are. not only in the u.s. but also overseas. i think what happens is as you get into the fourth quarter, you have this fear of missing out that helps lift the market even
higher than people would expect a move to. so you have this fomo in the fourth quarter that could get the s&p 500 back above its 200 day. that's right around 2060. >> a lot of strategists happy about that because they're sitting above with their price target. for more trading nation, go to tradingnation.cnbc.com. melissa? >> up next, the five big stock calls that need to be on your radar. we have a friday edition of "street talk" coming your way. first, the two charts that really stood out to us this week. stay tuned to find out what they are.
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south korea. that's going on right now. you can watch the entire thing live streaming on cnbc.com. we, of course, will bring you any important developments as they unfold. meantime, time for our stocks of the week and what i'm watching is valeant pharmaceuticals. it's been a real whipsaw week, especially with the democratic debates earlier this week where valeant sold off and today's recovery of almost 6%. check out cnbc.com for my take on some of the worst case scenarios for valeant stock. if you rolled back the drug price increases and if valeant is no longer able to hike the prices of any drugs, what's the impact on ep s and revenue. that's lif live on cnbc.com. >> and maybe a sideways tease for your show it i would imagine the options traders have to be ecstatic because the price swings have been off the charts. somebody is making money. >> yeah. >> my stock of the week speaking
of making money is electronic arts. i mean, folks, i don't know if you have been paying attention to the video game company or not. every time i look on my screen, this thing is up. it is soaring this week. it is soaring this year. it is soaring over 12 mkm partners upgraded it with an $82 tart. they have a "star wars" trade because of a video game that's out but electronic arts is leading the charts in nearly every time category over the past two years. i don't know what they're doing at ea, but it's in the game. >> that is a grade trade. if you take a look at some of the components, the gaming chips, we had mattel and the expectations for hasbro is high because of "star wars," there are other parts of this "star wars" ecosystem to watch that aren't getting the same benefit as ea. >> amazing money. melissa, thank you. with that we wrap up another stock of the week segment. coming up, a big boom in the housing market, but it is not the kind of boom that you're probably thinking of because we
diana olick joining us more on who may benefit. >> brian, that's why this home depot number is no surprise, now that homeowners are feeling better about their property value they neem sooem to want to add. growth on annual spending on home remodeling is expected to surge from 2.4% to 6.8% and that's according to harvard's joint center for housing studies. growth in both home sales and home values. when you buy a home you generally want to fix it up a bit and put your stamp on t but also when you feel like your home's value is growing you don't mind spending more on it to get exactly what you want. cash out refinances jumped 68% this past summer from a year ago according to black knight financial services. interest rates are still low, but with expected to rise next year. people want to get the cash now while it's cheap. a lot of that cash is going right back into the home in the form of renovations. it's also going into companies
like home depot, mass co, whirlpool which have seen big earnings growth already. remodels in this dc neighborhood they are booked throughout winter, some next spring. one of the big issues is a lack of skilled labor. right now that seems like the only thing that could be holding back this remodeling boom. back to you guys. >> thank you. coming up next, a friday edition of street talk to stay with "power lunch." it runs on optimism. it's what sparks ideas. moves the world forward. invest with those who see the world as unstoppable. who have the curiosity to look beyond the expected and the conviction to be in it for the long term. oppenheimerfunds believes that's the right way to invest... ...in this big, bold, beautiful world. the has unlimited access is thatto information,tion
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tough end to the week where it lost 12%. tonight on "fast money" at 5:00, brian, the low down on netflix's first feature length movie and why theater owners are up in arms. that's tonight at 5:00. >> beasts of no nation is supposed to be spectacular. time for street talk on a friday. the first stocks is box, jpm upfwragd to an overweight, they say the stock has gone up 30% since february. this tilts the risk and reward to note that investors may be overlooking the value of a recent ibm deal, $18 target, 40% upside. cold comfort for anyone who bought the stock at the $24 hires highs. >> da davidson with a buy rating $51 price target. several catalysts, potential growth reacceleration, this stock has seen nose bleed highs and rock bottom lows, it's down 69%, down slightly year to date.
>> with hacking news you wonder why these security companies aren't doing better. >> let's move on to the stock number three, that is lulu lemon. i'm going to close my eyes. they say that they did proprietary checks and that they found that customer -- the customer is coming back and also they think that the margin improvement is actually going to finally stritrickle through the system. after a detailed analysis of lulu mem mon, they raised td target to something higher than it is right now. this was a $70 stock back in april, i think it was $64. am i right? $64. >> yes, you are right. brian, your memory is impeccable. >> did that with my eyes closed. >> athleisure is king. >> i got the ears and memory of an elephant. >> those are good trades. spirit air systems cutting the 2016 eps by 26%.
the cut reflects a sh weaker unit revenue outlook. boeing under pressure after dal's delta's ceo made comments about an aircraft bubble. >> show is oefr. >> i know. happy friday. >> have a great show tonight. >> "closing bell" starts right now. hi, and welcome to the "closing bell," everybody. >> you're welcome, brian. >> that's pretty funny. i'm kelly evans. everybody is here at the new york city stock exchange today. >> i'm bill griffeth. a new credit swees note said clients are more confused than ever right now. that means everybody is confused. one big reason china's economic i can use, there are a new piece of data coming out this weekend that could shake the markets even further. we will break down that number shortly. >> another thing that's confusing markets, the federal re