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tv   Power Lunch  CNBC  November 3, 2015 1:00pm-3:01pm EST

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that may be the horseshoe you want to play because it should benefit from all this. so i want to see what they have to say. >> do you think they will be good quarters for the media companies? >> i do. and i think that it will be the on that 1what it was last year. >> good stuff, guys. we'll see yyou tomorrow. you power begins now. gentlemen, thank you very much and welcome to "power lunch." we're happy you could join us today. sara eisen is with me. mandy drury is off. she returns very shortly from way down under. what a day it has been. what a week. what a month. the dow, nasdaq, s&p back in positive territory for the year. s it's been a roller coaster ride.
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could the major averages end 2015 with double digit gains? yes, you heard me. five weeks into the deadline, confusion and delays in switching over to the new chip credit cards creating a golden opportunity for hackers. they are preying. how safe are you. maybe you should be praying. and is money that is being september by the federal reserve and treasury to iraq ending up in hands of terrorists or iranians? first let's check in with with sara. >> good afternoon. we start with a stock market in a rally. all three major averages back in the green for the year. could we be looking at 2015 ending with a dull digit gain? one market bullish strategist thinks so. >> everybody is saying we're going to flat line into the end of the year. given where short positions are and how much capital is on the sideline, maybe we have a double digit end up 10%, 12 percent % year. >> a bold call.
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is he right? brad mcmillan joining us. lee has been right all along, but 10% to 12% sounds aggressive. >> in eight weeks. so the s&p has to get to 23, 5. i hope he's right, but i don't see how it will happen unless you you get janet yellen to say, listen, rates are off the table until the first quarter of 2016, probably manch. a march. and the ecb starts to do more than they said. then, yes, i think they could probably get there. >> so not the economy, not earnings. >> no, i think this whole rally is all about central bank driven policy. i don't think that they're looking at the macro at that time take at all. >> one point i would push back on and i'll turn to you because i think you mentioned it in your notes to the producer, that is that the market rallied even though the federal reserve was
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fairly hawkish isish last week. is that an important turning signal in this bull market? >> i think that's exactly right. we saw something interesting. we saw the feds say we're going to raise rates and then rather than selling off as the market has done for years, it dropped a bit and then it rallied. what this says to me is the market is now starting to look at what earnings are actually doing. and when you look at that, they're not great, but in many cases they're much better than expected. so i think there is room to run up a little bit more. 10% would be great. >> 10% would be great, but i have to ask you a question. i think the market has been expecting all year long, i think investors have been expecting the fed to raise rates. and when september came, they were just disgusted at the fact that they kept pushing it out and then he had the august kind of september, had the meltdown and churning. and in-maybe n and maybe now the market has
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rallied back, but i think it's expecting that december is not happening. >> i think that's a fair point. a lot of people were disappointed in accepts. but you had an expectation that the economy is slowing. now the fed is essentially validated the economic recovery is not that bad. you see earning better than expected. a lot of problems around the world not coming to fruition. in other words, things are better than they were. and if you look at valuations, if we just move back p a little bit, that could easily take us to a 5% to 10% gain. >> and can i add some of the economic day tata has been good. auto sales is better than expected. final word, kenny, ahead of the jobs report on friday. >> i just think it continues the other macro data. you can't base it all on one report. factory ordinaries were worse than expected. other data keeps coming in. it's lumpy. so i think up 10% or 12%, i'd love to see it happen, but i
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don't see how it will. >> all right. dusch yo curb your enthusiasm. thank you for weighing in. >> sara, watch out for his hand, man. >> i would never hit you. >> i have to ask you, what is the difference between when the hands go backwards like this are or the hands go forward like that? is there a signal there? >> this is the more polish indicator when forward. >> i've been trying to decode it. >> kenny, thank you. let's turn to gold. there you see prices. down another $20 an ounce today, that's almost 2%. todd colvin is with us. what do you think, is this dollar related or something more searching and deep? >> well, i think if you look at gold trade action since the fed meeting last week, that's really been more where it started. the fed being much more hawkish and kind of mentioning the potential for that rate hike in december. but if you look across the
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flooroff at those ten year yields, they have kept up to more attractive levels which will take interest away from gold. gold is a noninterest bearing commodity, so if you look at ten year at 2.22, you think that is a good buy. yields are rich. gold prices are cheap and i think the fed right now is kind of at play, they used to be the central focus for gold prices, but now you're starting to see are more attractive yield buys in other places. >> you make a really good point when you look at that where the yield on the ten year has gone in just the last ten days, it's gone up 0.2%. what is the trading band over the next six months that you see for gold? >> well, i think 1100 will be your first key level. we made it there in the last three months a few times, made very aggressive bounces off it. i don't know up side right now, it all depends on the fed whether they go or whether they skip in december because if they skip in december, tyler, there is really an uncertainty about when they will go at all. and i think that right now to the down side you probably have
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levels around 1175, but at 1100 will be the key level. if you can break through that, that's a level we haven't visited in quite some time and that will cause some major selling. >> all right. todd, appreciate you being with us. sara. >> we mentioned this, but another strong month for auto sales. phil lebeau has the breakdown and the numbers. >> we knew that october would be a strong month, but these numbers are better than expected. in fact we might be hitting 18 million sales pace by the end of today. take a look at the big four. the big three in addition to toyota. all did better than expected with the exception of ford coming in just about half a% less than what was expected. what was driving sales last month? three things. first of all, suvs and trucks remain red hot. they are in demand. and if you look at the sales numbers for the most popular models, they're up 10%, 12%, 15%. low interest rates keep coming back in knowing their monthly payment will be affordable and they're stretching out the payments longer. and then you have higher
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incentives and this is going to be continuing through the end of the year. and speaking of incentives, bw really had to ratchet them up in order to bring people into the showroom o showroom. october sales up 0.24%. vw was unable to sell about 20% of the models it usually today because of the emissions scandals. and i mentioned that we might see a sales pace of 18 million vehicles by the end of the day. when we get the final number. and that should come within the next couple of hours. let's put it into perspective. i'm hearing ining annual sales 2015 might be 17.5 or 17.6 million. i think that might be overambitious, but those are the numbers we're expecting and we'll get the final calculation in the next couple of hours. >> and we're exactly one year away from the presidential
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election. one year to the day. and new poll numbers candidate has taken a big lead in the race. john harwood is live in the nation's capital. >> it's useful to set the stage now that we're three months from the iowa caucus, one year from the election as you mentioned. so let's start with looking at the horse race data in both campaigns for the republican democratic nominations. new boss in the republican vase ben carson, 29% to 23% for trump. 11% for rubio, ted% cruz, 8% jeb bush. ben carson has the most room to grow because 77% of republicans say they could see themselves supporting him. that's very valuable. on the democratic side, much more stabilized. hillary clinton got a 2:1 edge over bernie sanders. now, i want to step back, though, and look at the backdrop
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under which this election will play out. first of all, the backdrop is anger. when you ask people are you satisfied with the direction of the country, you think we're off on the wrong track, by 27 to 64, they say we're off on the wrong track and more importantly for 11 years in a row, that figure has been yuaeeen underwater. what is the topi issue? it's the economy. when you you say what is the thing you care about the most, 38% say the economy. foreign policy all the way down to 8%. and finally, you have a fundamental difference in how the two parties set their goals for what they want to accomplish in a new presidency in the campaign. when you ask is it most important for your candidate to seem common ground, 6 in 10 democrats say yes, seek common ground is twwhat i want. only about a third of republicans say that. those numbers are reversed when you ask do you want a politician that will stick to their
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convictions. independents want to seek common ground. advantage for republicans, 2016 could be a year of change and republicans would bring that change to the white house. >> and must stick to their convictions i guess if they want to satisfy the voters. we go to dominic chu now. shares of gopro customer, a supplier, is in focus today. the stock surging up by nearly 11% currently at the highest levels of the day. this surprising move today for ambarella. remember the maker of polaroid cameras is suing gopro for allegedly infringing on certain patents. gopro shares are 2% lower on the news. search ambarella one of those stocks people like to play. back to you. an alarming story for you. how money from the nerve afeder
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reserve and treasury department meant for iraq may be ending up in the hands of isis terrorists. you have to hear this coming up on "power lunch."
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welcome back. mosaic shares are higher. beati beating profit estimate, but revenues fell short of
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expectations. arch eer daniels falling short estimates. and sprint posting a much wider than expected loss, revenue at sprint also missed the mark. that stock down more than 7% right now. tyler. >> this is an alarming story. is money that is being sent by the u.s. federal reserve and treasury to iraq ending up in the hands of militants? eamon javers in d.c. covering this story for us. >> the "wall street journal" doing a deep dive investigation this morning and reporting some new information on this front including the fact that the federal reserve and officials inside the u.s. government were alarmed as they saw the amount of money withdrawn by the central bank of iraq from its account at the new york fed in new jersey skyrocketing over a period of time and over the summer actually stopping those shipments of billions of dollars in physical cash to baghdad out of concern that some of that money might be ending up with isis or other ne'er-do-wells
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inside the iraqi countryside. it's not clear what happens to that money. a couple points to mention. this is iraqi government money that is held inside an account for the iraqi central bank at the new york fed which is then withdrawn by the iraqi central bank. back in 2011, we did our own deep dive investigation into this and we obtained this video which shows you how they transported the billions of dollars in cash through baghdad in physical stacks of a billion dollars each. this is video from inside the billion dollar convoys as they moved it around baghdad. obviously some concerns here whether or not isis could get its hands on that money, but a couple things u.s. officials say about this, one is that there is at least some sense that will system that is in place between the new york fed and the central bank of iraq at least allows the united states some visibility into this process. and i'm also told by officials that the united states tracks the serial numbers of all dollar bills over $20 denomination that
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go to baghdad and go through into the iraqi economy and the dates on which those are shipped. so that would give the united states a little bit of additional ability to pay attention to where that money was going once it gets inside iraq. but it is very confusing situation over there and once you start shipping billions of dollars in cash to baghdad, it's anybody's guess where all that money is ending up. >> all right. thank you very much. cnbc contributor ron ensana is with us take continuing the same theme. right now a piece about about the increased risks to the markets. we have u.s. troops now, advisers, this reminds me of vietnam, on the ground in syria, not far from russian troops over in syria. we had a mysterious plane crash in the sinai. u.s. and chinese naval vessels moving very close to one another. threats that the russians may disable a communications cable
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or at least they have been snooping around. there are lots of flash points. you're not predicting that any of these things could happen, but you're saying -- >> that, one, we should pay much closer attention than we have in the past because with these types of involvements and the proximity of u.s. and russian troops, proximity of warships in the mediterranean and persian gulf, we have near altercation actually with the chinese navy, a ship told them to leave and the chinese general said afraid united states. but proximity leads to problems. you can have an accident, maybe oil prices have been moving up because tensions are rising a bit in the middle east. maybe the markets aren't necessarily giving enough weight. so hedging that maybe with defense stocks or oil, with gold, u.s. treasury bonds, might be partly a strategy. >> it's always approach to me -- the markets aren't only about the fed or earnings or mi
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macroeconomics. s's th it's the unanticipate. >> we're in the unknown you think unknown territory given just how provocative things have come with withe russians assertg themselves. maybe new continue putin is dis people from a very bad economy. u.s. forces haven't been this close this quite a long time. so it's not something that you fret about. but for geopolitical crises -- >> you don't take it off the table. >> no, i don't think so. we're continuing to track what is going on with volkswagen especially with the epa saying there are seven other diesel models that are sold in the united states that in the words
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of the epa yesterday are in violation of pollution standards. violations by nine times greater emitting nine times greater pollution than is allowed by epa standard. well, volkswagen is out with a statement within the last half hour essentially saying weconsi about 800,000 vehicles and the epa says there are 10,000 vehicles that are in violation of pollution standards. and according to vooelkswagen, they are looking to determine what is it going on with regard to the emissions coming from those vehicles. not to get too technical, but they're careful to say these vehicles do not have defeat devices. and the epa said that they did. so volkswagen and the epa continuing to go back and forth regarding these new models now in question.
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>> all right, phil lebeau, thanks very much. it's becoming an ugly pattern and once again vw gives back early gains. there is still a lot of confusion over the chip enabled credit cards. the shopping percentage of retailers and consumers that are still totally unprepared and you how it's opening up opportunities for hackers. how vulnerable are you? that's next. is that you can create wealth through capital appreciation, and this has been denied to many south africans for generations. this is an opportunity to right that wrong. the idea was to bring capital into the affordable housing space in south africa, with a fund that offers families of modest income safe and good accommodation. citi got involved very early on and showed an enormous commitment. and that gave other investors confidence. citi's really unique, because they bring deep understanding of what's happening in africa. i really believe we only live once,
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and so you need to take an idea that you have and go for it. you have the opportunity to say, "i've been part of the creation of over 27,000 units of housing," and to replicate this across the entire african continent. hello, ken jennings. i haven't seen you since that tv quiz show. hello, watson. you can see now? i can recognize people, analyze images and watch movies. well i wrote a few books, did a speaking tour, i... i've been helping people plan for retirement. and i help doctors identify cancer treatments. is that all? i recently learned japanese... yeah, i was being sarcastic. i haven't learned sarcasm yet. i can help with that.
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welcome back. many of the world's top ceos are meeting today, on the agenda, playing for the long term. kayla tausche is live in new york with some of the highlights of the power lineup. >> it's been a jam-packed day so far. executives from black rock to coca-cola talking about managing a mibusiness day to day and als planning for decades down the line or in ibm's case, the next century. their ceo just last week was dealt a fresh challenge in the form of an s.e.c. investigation into you how the company recognizes some revenue. here's how she responded to andrew ross sorkin on that question. >> we are very confident in our accounting and you'd expect this from a company like ours, 100 year, very well trusted, that we take everything through a process and we make very clear decision about when is it pie
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law and the right time you disclose and we're very consistent about that process. >> she also said a ceo regardless of gender needs to be able to take criticism well and have resilience. morgan stanley ceo james gorman said the company also needs to pay attention to what the company's stock is doing. gorman when asked about whether there was a talent war going on and whether morgan stanley was able to hire the most competent graduates, this is what gorman had to say. >> we dilute ourselves into thinking that there is a special breed. i work with everybody on wall street. they're special, but not that special. you know? and i just -- i'm not a buyer that there is a war for talent and you can't win unless you get the number 12 student at harvard or something. the number 12 student at university is pretty talented
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person, too. >> maybe an admission that they aren't winning over the top candidates. but there was news made, tlloyd blankfein currently undergoing treatment, he was in good spirits and coming to the office almost everyone day. >> all right. thanks for the upupdate. let's check on the bond market.. >> all right. thanks for the update. let's check on the bond market.. >> all right. thanks for the update. let's check on the bond market.. >> all right. thanks for the update. let's check on the bond market. yields are higher across board. ten year, 2 at the present ti.2. a sectiix week high. probability is rising in the bond market that the fed would make a move to raise interest rates in december. this comes ahead of an adp record on private sector jobs. chairman yellen testifies tomorrow and the big government
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jobs report on friday. >> and it has been five weeks since the official switch to chip embedded credit cards. but most americans have yet to get their hands on one. i've got them actually. and some places seem to be able to process them, others not. even about you did not get one, though, good luck finding a retailer able to accept one. all this confusion has created a golden opportunity for identity thieves. more now from penny crossman with american banker. welcome back. what do we know about how much these chip cards have actually gone into use and retarded hacking and identity theft? >> well, the latest studies have shown that approximately 40% of retailers have actually installed the equipment they need to accept chip cards. another 41% say they will install this equipment shortly.
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10% have no plans to install the equipment they need to. >> who pays for it? >> the retailers have to buy their own terminal. the average cost is about $450. however, there is a perception that it costs more than this. there have been reports saying that it costs about $1,000 for small retailers to upgrade and that's simply overblown. so the smaller stores -- the large stores have all made this change like the targets and walmarts, but it's the small stores and bars and restaurants. >> my dry cleaner has it. $400 is a significant -- that's a lot of suit alterations, a lot of hems. >> right. >> so why haven't more individual card holders received these cards yet? that's number one. and what do we know about how chip cards have reduced mischief
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or identity theft in other countries where they're more broadly accepted? >> sure. well, i think to your point earlier, a lot of americans actually have received these card. i know there was a study that came out a few weeks ago saying that 60% of americans feel they have not gotten these card. but i think some of that is just gasoline a perception because banks have not really announced the new cards. you're just quietly getting the new card in the mail and because you're aware of it, you haven't noticed that you have a new chip, but a lot of people i think just don't realize they have them. about 70% of card issuers, card portfolios, have been updratd grad gra graded to the chip card. >> how effective are they at reducing fraud? >> well, there haven't been fresh numbers issued in the
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month. however there is definite evidence that emv reduces the risk of counterfeit card fraud which is a big source of fraud. if you use chip and significant, you're in the really going to reduce the risk of loss or stolen card fraudulent t reduce the risk of loss or stolen card fraudulent use. and it's not necessarily redu reducing the risk of online fraud yet. but there is about 40% of card fraud that is due to counterfeit cards and it's very difficult to replicate -- >> counterfeit one of the chip cards. okay. we have to leave it there. thank you for your time and help. millennials and money. do they think their social security will be around for them in the older years? are they saving more in cases's not? plus, etsy, cbs and still low all report earnings after the bell. what investors need to know ahead of those numbers.
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here is your cnbc news update. spanish police arresting three moroccans suspected of having links to isis militants. the three seen there being escorted to awaiting police car. police say evidence suggests the three were planning to carry out terror acts in spain.police car. police say evidence suggests the three were planning to carry out terror acts in spain. paul ryan says there will be significant changes under his leadership. he wants to change the rules in the house so law making and the process of it is more collaborative. a fire risk has prompted ge to recall more than 33,000 air conditioning and heating units sold between january of 2010 and december of 2013. ge said it received three reports involving smoke and/or fire, but no injuries have been reported. and if you don't like heights, turn away. a french climber noticed the french spiderman made to the top of a sky scrapener paris.
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54-year-old climbing his way up the tower, dozens of onlookers as you can see and even some police were gathered to watch the climb. that's the cnbc news update this hour. sara, back to you. makes my palms sweat. >> makes me nervous to watch as well. taking a look at stocks, near session highs with the dow up 100 points. joining us to discuss the market rally, president at edge asset management and also investment strategist at lpl financial. jill, let's start but. we have earnings, economic datand daty and take and the fefr taking center stage. are you a believer and are you buying? >> we are a believer in the u.s. stock market and we can move up modestly from here. but it's a little bit tempered. earnings have been pretty good, but a little bit mixed and you have to look through the headline that companies are beating their expectations to recognize that they have also pulled back their expectations.
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so we're still in a slow growth environment, but we can move up modestly from here. >> john, it looks like you like large cap names. why is that with some of the economic risks and market risks coming from overseas? >> what we're seeing now as you're seeing the typical industrial sector mini cycles that you you tend to get in the middle part of the business cycle which we're in now, we had a big inventory due accumulation, global growth is rebounding a bit. that should help boost the industrial sector all of next year, as well. these mini cycles tend to go in two or three quarters. >> and i know you like energy names. energy has been leading the charge in the past few sessions. go it "power lunch".cnbc to see how jill and john are playing the global markets with some
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specific names and sectors. dom neinic chu now. >> check out transportation stocks. notable underperformer in today's trade. lower on the day despite gains in the major indices. results are heavy skewed by a sharp drop in shares of avis. the dow transport index now down roughly 10%. back to you. it is another big day of earnings and we're covering it all right now with courtney reagan on etsy. >> etsy shares are up, but after the bell, they release their third earnings report as a public company and wall street is expecting them to report a third quarter loss of since cents per share. etsy's revenue does come from its marketplace and seller services. last quarter it was about a
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50/50 split between the two. they will also give gross merchandise sale, but that's the value for all of the transactions for the quarter. it is, though, used to evaluate spending changes for active buyer and sellers. last quarter etsy had 1.8 millioning a difference sellers. shareholders want to see improvement especially in the buyer numbers. but wall street and shareholders are still figuring out how to evaluate etsy since some of the past earnings reports have been a little confuse to ing to say least. shares have shed about 32% since their ipo. >> marathon on sunday, high heels on tuesday. >> got to do what you got to do. >> congratulations. >> and on cbs. >> it's the most pure play and as it reports revenue effexpect to slip 3%, earnings to grow 9%. three key questions. how healthy are tv advertising and retransmission fees.
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second, how significant are new revenues from licensing to the likes of amazon prime and new show time and cbs apps. and do they threaten to cannibalize the core business. and we can expect them to press on the number of subscribers for app and details of its strategy to go direct to consumers outside the tv bundle. cbs shares trading up about 1% today ahead of its report. >> diana, you have zillow. >> zillow group continues in what their ceo called a transition year following its $2.5 billion purchase of then number two trulia. he warns the combined companies would miss full year expectations due to that merger. zil lowe's q3 guidance calls for filed answer of 175, up 99%. analysts are forecasting a loss of 3 cents per share on net
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earnings of 18 million to 19 million after zillow posted a gain of four skrecents per shar. we will watch the core market place expected to grow 25% from a year ago. it comprises real estate, mortgages and market leader, a software company. we will also be watching for what zillow's ceo has called its emerging markets. >> thank you all very much. millennials and money. most of the younger generation doesn't think they will ever be able to collect social security. so what are they doing instead we'll have the answer next.
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i've been waiting here all day patiently for you. security is a hot topic at the debate last week. take a look p. >> the government has lied to you and they have stolen from you. they told you that your social security money is in a trust funds. all that is this that trust fnd is a pile of ious. >> we need 20 honeto honor the promises. it is hard to find someone my generation that thinks social security will be there for us. >> so how to millennials feel about social security? do they know the government is lying to them? do they think that? steve liesman asked those very questions in a cnbc all-america
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economic survey. >> the republican candidates got it pretty right when it comes to millennials. >> and what they think. >> although they're not quite so dumb as to believe the government's lie. let's take look at the data from our special cnbc survey. are you confident that you will get benefit from social security? 19% of americans all adults say at the are very or somewhat -- they are very confident or highly confident. 16% of millennials. 77 and 81, not a big difference, but let me show you where the big difference is. when we asked are you not confident at all, 43% not confident at all. here is the number for millennials. 51%. they see the writing on the wall. here is the problem, folks. they see the writing on the wall, but they're not doing very much about it. we asked this group of people who said they're not confident what you're doing about it, are you saving getting prepared for a lag of social security. here are the numbers. 45% say they are saving more
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now. fewer about 43% or 42% when it comes to any len any leanials. many plan to save more and a good chunk not saving at all. what about the millennial and their politics? pretty much like the rest of the population. first of all, more of both groups self identified as conservatives as opposed to liberals, but a slightly greater amount say they're liberal, slightly fewer say they're conservative. this is what you'd expect. but take a look on approval rating, obama, 49 to 42. how about democrats in congress. a little bit more. not a whole lot. will is what is interesting. they disapprove of the gop and congress less. 25% say they approve of the gop in congress. >> when people say they don't
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think social security will be there, what do they mean? do they mean it will be nonexistent or that the benefits will be reduced? >> we asked pretty much are you going to get anything at all. and they say not confident at all. 51% of millennials say that. so they are on to it. the trouble that we have, and we have this as a financial network and as a nation, how do we convince people that if that is the case, if you believe that, you need to be investing and saving for that belief. it's not enough just to be skeptical. you have to get off your petard and start taking action. >> sara, down to you. >> checking out stocks, session highs again the dow creeping higher up 111. major averages all back in the black for the year. so we're asking, will the dow be higher in six months from now? as the dow flirts with 18,000. head to plus a very rare, expensive but beautiful diamond is about to go up for auction.
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robert frank watching that story. >> only three perfect diamonds bigger than 10 carats have ever come up for auction. we'll show you you one selling next week and why diamond price as are soaring. i'm here at the td ameritrade trader offices.
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not the other way around. it could be one of the most expensive diamonds ever sold at auction and who but robert frank would know about it. >> christy's selling the 16 carat perfect pink diamond on november 10. it's expected to sell between $23 million and $28 million, so that's more than $1.5 million per carat. the stone is a fancy vivid pink, purist rating meaning there is no trace of other colors and it's cushion cut, that enhances the color and it requires destroying more than half of the original stone. now, the global rich are increasingly seeing die monds as a hedge against market risks and economic crises. colored diamond prices up 48% over just the past five years.
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>> the stock market in asia, you have the currencies going up and down. there is the middle east situation going on. so on the one side, with we hope that everything will settle done and the world will be a great place all the time. but you do want to have yourself a little bit of a safety.the wo all the time. but you do want to have yourself a little bit of a safety. and this is the best wealth to put away. >> and this is set in a ring, but if you pay your $25 million, you can also put it into a necklace or bracelet and you also get to name it if you buy it. >> all right, robert, thank you very much. >> i think i'd take it in just a ring, thank you. the presidential election one year away, but some important issues on the ballot in today. in ohio, legalizing marijuana up for a vote and in san francisco, a vote that could determine airbnb's future. that's next.
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anything worth pursuing hard work and a plan. at baird, we approach your wealth management strategy the same way to create a financial plan built to last from generation to generation. we'll listen. we'll talk. we'll plan. baird. now that tyler has you you all fired up, we'll try to keep it going. and we have a very simple question to you, america. will the dow jones industrial average be higher in six months than it is right now? live voting opens up soon, so
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get ready. plus, the candy crush deal may confuse some people, but there may also be reasons it is the steal of the year. we'll tell you why. and could this be a record year for one big part of the economy? sure looks like it. what it is and why all coming up. sara eisen, back to you. he mentioned stocks at a session high, one idea being talked about could be mario draghi hinting at more qe. they will have to reexaminen the size of the program at the december meeting. the euro getting under pressure on the result -- on those remarks. dollar strong, weak euro, helpful for stocks. they love qe. meantime, very important measure on the ballot that could determine airbnb's future. josh lipton in san francisco with that story. >> well, proposition f calls for capping short term home rentals at 75 days per year and it would
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also authorize the city to find cites like airbnb for a listing p apartments that aren't registered with the city as short term rentals. now, supporters of prop f say it's need because short term rental sites are taking housing units off the market in san francisco at a time when there is a real lack of affordable housing. >> we've lost between 10,000 and 12,000. and the city has not done anything to address the conversion of housing units to tourist accommodations. so we had to go to the ballot. tried to go through city hall and weren't successful. >> no, the median rent for a one-bedroom apartment in san francisco is 3550 bucks a month. and that is up 45% in the past four years according to zillow. airbnb has spent $8 million
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fighting prop f and tells cnbc home sharing is making it possible for thousands of middle class families to stay in the city while prop f is a hotel backed measure that is tauis fa drawing the line between regular franciscans sharing their homes. the financial impact, estimated at 6 million in revenue per year if the measure passes. it may encourage other cities to follow san francisco's lead. and it is also decision day in ohio. a key state in presidential politics. but today voters in the buckeye state are deciding whether on legalize marijuana for handful of commercial kasich has made his opinion known last week. >> sending mixed signals to kids about drugs is a disaster. drugs is one of the greatest scourges in this country. >> and more now from ben white. this is sort of a side issue in
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presidential politics, but it came to the fore on that evening at least. other states where marijuana has been legalized. why not ohio? >> ohioans seem to favor it. it shows you a little bit of the left ward tilt on social issues happening in schwinn states. so it makes it uncomfortable for people like john kasich who has spent time on drug rehabilitation, prison reform, he can't really favor marijuana legalization if he's trying to crack done on drugs. but the people want it, it's passing elsewhere. >> it is a slippery area. there are people who believe that marijuana leads to other kinds of use of drugs. and 60 minutes so sunday night, a major piece in ohio on the
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heroin and pain killer epidemic there. >> which kasich has worked on that a lot. so there is that argument that it's a gateway drug. tough issue for republicans, but they will have to say we are against drug legalization. >> let me turn to a sound bite from donald trump talking about the federal reserve. >> they are not raising them because obama has asked them not to raise them. in my opinion, he wants to get out of office because we're in a bubble and when those rates are raised, a lot of pad things will potentially happen and in my opinion, janet yellen is highly political and he's not raising rates for a very specific reason because obama told her not to because he wants to be out playing golf in a year from now and he wants to be doing other things and he doesn't want to see a wig bubble burst during his administration.
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>> ridiculous. yellen is not political at all. she takes no direction from obama on interest rates. there is no inflation and the economy is soft. the idea that she takes calls from bak who says don't raise interest rates, absolute utter complete ridiculous nonsense. >> ben whites that will sum it up. thank you very much. sarah oirks great to be be with you. >> may be back tomorrow. >> that is correct. and meanwhile we hand it over to brian and melissa. >> hi, every. it's 2:00 on wall street, 9:00 a.m. in bora-bora. stocks at session highs. the dow trying to do something it has not done sense mid-july. we are brian and melissa and we have a lot to do, so let's get to it. as the dow pushes back up toward 18,000, we begin to show with a very simple question for you. will the dow be higher in six months than it is right now?
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vote now and while we alley the votes in real time, let's bring in matt mayle, equity strategist. matt, what do you think as we count our votes, will the dow be higher in six months? >> we have to keep everything in perspective here. we've seen a very nice rally and it could go higher because the short positions are still very high. but when we've seen this nice rally, it's only taken us back into the upper part of the range, but still in the range that we were in for the first seven months of the year. and the reasons we got hit when the stock market corrected in the late summer was because of what was lower oil prices and pick sell 0e6. oil will have to rally a lot more for the companies to service their debt. so that will be a problem. and of course china, that's
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stabilized. but it hasn't bounced back that much. so top of that, fundamental side of the picture, we have gdb growth and earnings growth is also slowing. in fact we may even be having a down year this year. so we have a couple things that might cap out the markets. so we could have up side here, but hard to rally a lot further. >> all right. alberto, what do you think, the dow higher or lower in six months? >> definitely higher for sure. consumers getting tired of this or that?
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i think it will be triggered by a combination of buy backs and very strong seasonality. we've had $1.1 trillion of investment grade debt issued this year. most of it for buy backs. and as you saw yesterday in the "wall street journal," 25% are all done in november/december. what are the best two months of the year? november and december. >> we did this segment in part because of something you wrote in your morning note which is that you note it that according to the investment company institute, they track in-234rfl and outflows, $100 billion have been pulled out of u.s. equity funds over the last six months, the most in at least 30 years. if people are pulling the money out, what will send the markets up? >> well, if you look at all the massive flows that came out, the most was in july. and that preceded the august selloff. so that was a prime reason for the selloff that we saw which
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carried over into september. what countered it was the massive buy backs. buy backs increase in november/december, we also have a lot of edge funds which were down 2%. they have to play catchup and gain returns. and you have retail investments going to want to jump on board and take this market higher. >> and we'll finalize it by following up on something that you gave in your first answer which you you mentioned oil and you said if oil doesn't go back up, we may not be able to rally. are you daring to suggest as maybe some others have that slightly higher oil prices may be good for the stock market? >> to be perfectly honest with you, i think it will have to be -- to answer your question, yes. it would show obviously supply and demand, but very important to the debt markets. this high yelled market was hurt
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very hard because of the company's inability to service their dead with lower oil prices. you will need a much bigger rise than just the $50 for that to be reversed. and also historically everybody talks about higher oil prices being negative for the economy, negative for stocks, but usually the correlation is very strong when oil prices go up, the stock market goes up. that's just history. >> and you're exactly right about the debt market, we've highlighted it many times over the last year on this program which is that there is a couple 100 billion in high yield debt targeted and directed to the oil and gas industry which could be at risk if gas prices stay this low. it's a great discussion, guys. thank you very much. let's lock in the vote, merg. we asked will the dow be higher six months from now? hey, slightly bullish tone. 59% of our respondents say yes, it will, but 41% no, it won't. >> almost dead even until the
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very end. let's get to the sweet deal of the day. activision agreeing to buy king digital for $5.9 billion. the deal represent as 16% premium to the closing price yesterday. let's go to julia boorstin with the story. >> activision blizzard is the largest video game giant with a strong hold in the core market of console video games and now a big play into the mobile gaming space. actity advi tivision they will half a billion monthly active users all around the world. and it will give the console game leader access to the mobile xami ga gaming market and expects to grow more than 50% by 2019. >> mobile was important, but also attracting women to gaming is a really important part of our strategy. and with king, 60% of the audience is now female. which is a really great
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expansion opportunity for us. and they're in 196 countries around the world which is something that is really exciting. >> the idea is that activision should benefit from cross selling its games to king's player network and also to expand its console franchises into mobile formats. analysts are generally bullish on the deal being being a keyed creed accreted to the 2016 results. some are questioning whether the core franchises like candy crush risk losing their value over time. king shareholders still have to vote on the deal, but it is expected to close this coming spring. back to you. >> many out there seem confused by the activision deal for candy crush or at least the price, but not mike olson. mike, one of your competitors wrote this morning that because king digital's cash flow is so high, this deal was a, quote, steal, his words, not mine. do you think it's that good of a deal for atvi?
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>> well, halloween is over, but activision still has a taste for candy and we estimate that about 60% of kenking's revenue is fro candy crush. it's a game that has been fading a bit, but still generating $2 billion for the company and about $700 million operating profit. so we do think that it's a good deal. as i said, it's fade to go some degree, but still a massive title. >> but 60% of your revenue coming from one game and like you said, it's slowing down, that does not necessarily bring good tidings unless there is something out there that activision knows that will be a hot new game that we don't know about yet or, b, turn things around to candy crush. >> i think it's less about turning things around and more about activision has historically been masters of financial wiz wizardry. and they have been able to take
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fading franchises and do wonders with them. specifically we look at the opportunity to sustain some of that $700 million in operating profit and i think there will be some cost cuts that happen within the king business. maybe a little bit less investment on new initiatives, new games, and a focus on just milking the cash flow out of that franchise. >> they are bolted on to a female audience, but doesn't seem to be synergies across their own platform in terms of the games already in existence. how do they keep the females in the new activision company? >> i would agree at this point it seem like the synergies are pretty limited. it would be hard to convince a candy crush player to play call of duty or advice versvice vers. we'll have to see what games they come up with. i think king will work are activision to potentially take some of actity vision's franchises and drive them into the mobile market and potential activision will help king move
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into the more mid core hardcore titles versus the casual games that they have been known for in the past. >> prior to this deal, did you like king on its own? did you think that it had opportunities to expand the franchise, et cetera? activision is such a power flg pl ful play are in game flag it can resuscitate essentially a dying franchise? >> we have a neutral rating on king and the reason is because of the concentration of revenue around candy crush. so as i mentioned about 60% tied to those two candy crush games. and i think when you put it into the context of a bigger entity, it's less of a risk. now instead of being 60% of one public standalone company, it will be a smaller portion of a bigger entity. so you don't have the same concentration risk. also if they want to wind it down to some degree, wind down the expenses around it and as i said earlier kind of just get all the free cash flow they can out of that title, they can do that without risking growth for
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the overall company. >> mike, thanks for your thoughts. the activision king deal is just the latest example of all the deal making that has been happening in this bull market. mike santelli just wrote about this on and joins us now. it's fascinating in october there was $514 billion worth of deals and that was the fifth biggest month in terms of dollar value. when typically does this amount of deal making happen in the bull making cycle? >> it's definitely in the latter end. so i would say it's later than early i keep saying, but it doesn't necessarily mean this is sort of the final song here. honestly, i'm surprised there was that much activity in october given the markets were are so unsettled in august and september. usually you have to see the waters calm down a bit before you have companies willing to do that and before they can meet on an agreed upon price. so i do think that it's still one of the kind of bullish tail winds, not the whole reason to love the market, but definitely
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a symptom of a highly liquidity market. a lot of companies saying if not now then when do we dehe loi idle cash. >> when you take a look at the deals that are being struck, does that make you think about the markets any differently or the strength of m and a as a barometer of the health of the markets? pfizer approaching allergen is a different deal compared to bud with sab miller. they have to merge behalf you a declining beer market and that's a different story from pfizer and allergen. >> it's very much a bean counter's motivation for a lot of these deals. in other words, you mentioned bud and sab miller. this is a horizontal merger. slow growth. pfizer and aler again potentially if that deal were to happen it's mostly about financial engineering, making the numbers work. and even you see something like conagra selling its private label brand to tree house foods, that's what they would call fit and focus. what you're not seeing a lot of is the kind of big new era
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thinking that drives these kind of high concepts deals that may be at a crazy price. that's often what you have to -- >> bingo. i think you nailed it right on the head which is this, we're seeing strategic deals, company buying company. it seems to me looking at these deals that will is not a lot of original thinking left out in in corporate america other than to either buy back stock or cut people. >> well, exactly. and i wouldn't say necessarily not a lot of original thinking. i think they're basically being rational given the incentives of a cheap debt market but how long will it remain generous. we don't though. and also the buy back playbook perhaps has reached something of an end. in other words, the marginal benefit of new buy back seems like it's not reducing stock price as much as it did, so you might as well by an asset for idle cash. it's all a matter of the price paid to valuation placed on these things. i was thinking like an aol/time
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warner whethre with with do you deal and they say one plus one equals four. and that's when you have to worry. >> mike, thank you very much, about buddy. you can read his full story right now at "power lunch" on deck, it is a great day to be in kansas city for the world's parade, but it is not a good day for one huge kansas city based company. our disaster du jour ahead. plus why it is shaping up to be a record year for one major part of the u.s. economy and why bras, planes and car parts are making it into the all-time high club. i said all-time high club. if you're approaching 65, now's the time to get your ducks in a row. to learn about medicare, and the options you have. you see, medicare doesn't cover everything - only about 80% of your part b medical expenses. the rest is up to you. so if 65 is around the corner, think about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company.
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like all standardized medicare supplement insurance plans, they help cover some of what medicare doesn't pay. and could save you in out-of-pocket medical costs. so don't wait. call to request your free decision guide. and gather the information now to help you choose a plan later. these types of plans let you pick any doctor or hospital that takes medicare patients. and there's a range of plans to choose from, depending on you needs and your budget. so if you're turning 65 soon, call now and get started. because the time to think about today. go long.
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a great day in kansas city for everybody, but sprint, those shares tanking after the company reported a 15 cent loss. revenue also below analysts forecasts. the stock down more than 6%. also today, norwegian cruise lines beating estimates by a penny. and some stocks hitting all time highs. l brand, auto zone and delta, bras, planes and car parts. bill gross out with two big ideas for the fed ain his lates outlook. he says the fed should raise
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inflation targets an inability what he calls operation switch. thousan without getting too into the weeds, that is the opposite of the 2012 operation twist. he is he the fed should twitch the $2 trillion worth of longer dated treasuries into shorter two and five year. steve liesman joining us with more on this. what the heck does that even mean? >> first of all, there high school has been a bunch of critiques of the federal reserve. basically that the zero lower bound is hurting more than it's helping. and billing gross comes along and says banks complaian't make money at these levels. it means that 2% yields are not -- as far as they have been traditionally from ten year yields. so not a lot of spread in there to make money. and of course i brought a chart
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to graphically illustrate this. and it's called net interest margin. and you can see this has been declining for a very long time, but certainly it's gotten lower and lower. what i get bill saying is you you need to make it more profitable for banks to lend and if you can do that by basically making the yield curve steeper. >> and this is where one of our listeners is driving down the highway, beating his fist or her fist against the steering wheel saying dang it, goldman's profits are record highs. we're not talking about those types of banks. what bill is talk about neighborhood community bank corp who makes money still not trading derivatives, but lending money to you and you pay me back and i make the spread and that's the net interest margin. >> and there are things that could potentially raise the absolute cost to the borrower. and this is where it starts to
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get a little fuzzy the idea that, well, at a hire interest rate are these projects still profitable, do they still have the same a land. i'd add a third and say they need to ease off on some of the supervisory stuff that has resulted in less lending. and i think some of that comes from a need to rethink parts of dodd-frank. >> but stripping away all the wonkiness of it, what bill is saying and i think it's a good point, that if the banks were able to make a little more money on the money they lend you, that they're more likely to lend you the money. >> precisely. there is no wonkiness in the accepts that this sense that this is the meat and potatoes of the life blood of the economy. we have not seen the rebound in lending and we ask ourselves why. increasingly some people are focusing on the zero rate. it's still reasonably profitable. but is it enough.
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can they to modo more and in a that doesn't hurt the demand. so i think the first problem we have is a lack of demand. people are not not building factories because there is all this demand out there. there is not the demand. and at the same time perhaps a steeper yield curve could, could, possibly -- >> despite the fact that steve just used the word not four times in one sentence, i think it was an excellent discussion and analysis. >> thank you. and used six times. gra ma gra matticly correct. >> thanks, guys. coming up next, street talk and plus we're minutes away from the oil close in new york.
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bob dylan. to improve my language skills, i've read all of your lyrics. you've read all of my lyrics? i can read 800 million pages per second. that's fast. my analysis shows your major themes are that time passes. and love fades. that sounds about right. i have never known love. maybe we should write a song together. i can sing. you can sing? do be bop. be bop do. do be do be do. do do do be do. so wi got a job!ews? i'll be programming at ge. oh i got a job too, at zazzies. (friends gasp) the app where you put fruit hats on animals? i love that! guys, i'll be writing code that helps machines communicate. (interrupting) i just zazzied you. (phone vibrates) look at it!
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(friends giggle) i can do dogs, hamsters, guinea pigs... you name it. i'm going to transform the way the world works. (proudly) i programmed that hat. and i can do casaba melons. i'll be helping turbines power cities. i put a turbine on a cat. (friends ooh and ahh) i can make hospitals run more efficiently... this isn't a competition! fit bit saying third quarter sales topped $409 million, that would be a 168% increase from last year. >> and time now for street talk. analysts recommendations of the stocks that we think you need to know about every day. the first stock is red hat. deutsche bank upgrading it from
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buy to hold. they say they continue to push to the cloud and move in open source software should benefit red hat. and the move a big part of why the power city index has done so well. >> and sho we should think about it as an under the radar amazon webster visits play. all the talk in cloud is amazon, amazon. 50% of its revenues come from amazon webster visits. red hat could be winning, as well. next up, three stocks here that i'm watching. arm holdings, ava gchlt o and gorvo. the latest carrier surveys according to the firm indicate disappointing iphone sale through and this is causing rising inventories and increased risks to the outlooks. they still like them long term.
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>> but help me understand something. i read that and i thought isn't the iphone 6s breaking records? >> in the third quarter. this is for the fourth quarter and first quarter. >> so if investors believe, maybe there is concerns about apple going forward. >> and we should note that the semiconductor overall, especially the apple supply chain has been under tremendous pressure. >> maybe demand is so good that they can't make enough. you never know. ralph lauren, starting with a positive rating and $142 car get. implies about 25% up side. the analyst notes sentiment remains negative around the stock despite the new ceo driving the stock higher. adds the company is working to improve the operating model in part by updating their global merchandising platform. stock up 3% today. >> it's a bold call because it will report earnings on november 5th. so we always like aprests who actually make the call ahead of
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the catalytic event. not after the fact. next up, jargen. a selloff of consumer stocks and concern about companies that are platform companies. they have a portfolio of brands. the company is actually best in class management, shareholder friendly with capital allocation and will see a benefit from a full integration of yankee candle and jostens? remember those class rings? >> this company owns everything. martin franklin is a frequent guest on "squawk box." they own so much stuff. you probably own about ten things that they own. finally today's under the radar name is mbia. it's probably the most well-known under the radar maim we've done, a big bond insurer. mkm partners upgrading to buy from neutral.
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it's a puerto rico related call. the analysts think the bond i insurers and puerto rico is close to a deal. it's 50% up side, though it does just get you back to the mid levels of last year. >> true. but what is nice, there is an actual target date because he expects a deal to be reached before the next debt payment is due in december. so there is an actual time frame here. >> street talk down for another day. all right. what is shaping up to be another red hot month on the car lot. in fact it may turn into a record year to car dealers. why sales are so hot coming up. first final oil trades are crossing. we're headed live.
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here is your news update. transportation secretary anthony fox says the country will fine take cat if a in the way it
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handled air bag recalls. ntsb will be able to add up to $130 million more if takata does not obey terms of a five year agreement. a couple bystanders in arkansas witnessing a parachute landing by a small plane with three people on board. the plane hit a truck when it finally did land on a local boulevard. traffic was shut down in both directions for hours. luckily nobody was seriously hurt. a high speed car chase in miami, police chasing a stolen chevy tahoe through two counties. aerial footage showing the vehicle being driven at a high rate of speed and after the back tire was blown out, police eventually surrounded the car and as you can see, captured the suspect. and comedian jon stewart who stepped down as host of "the daily show" in august has signed an exclusive four year production deal with cable channel hbo for his first project, stewart will produce short form content about current events.
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can't wait to see it. brian, back to you. >> you know that deal when it was announced actually moved time warner's stock which owns hbo. up nearly two bucks today. >> he's such a talented director and actor and filmmaker. so i think, yeah, i can understand that. i look forward to what he will put out first. >> up 1.84%. thank you very much. let's see if oil is up 1.84%. we'll go to jackie deangelis. >> well, oil was up today just a little bit less than 4% actually. it closed at $47.90. but the intra day high over $48 a barrel. so what moved the markets today? speculation that the market will rebalance itself. nonopec players reduced capital sxpd chu expenditures, but u.s., russia, opec all producing at or near record levels. tonight the api number.
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tomorrow department of energy looking for a build of 2.5 million perils. but looking to refinery runs and u.s. production numbers tomorrow i think those will be key. back to you. well, as oil rises, the energy sector hitting a three month high actually. let's get potentially the next move from our trading nation team. erin gibbs and gina sanchez. erin, i'll ask you you a question i think i've asked guests about 100 times. is the worst finally over for the energy stocks? >> i would not want to get in right here for now. it's looking a little top heavy for a couple reasons. one, it's getting a lot closer to all of the analyst estimate prices. we really haven't seen the energy prices revised up. we're still seeing major negative earnings consideratitr.
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and right now we're at one of the levels of resistance. so given where we see supply and demand, i don't see the catalyst for it breaking farther forward and above that point nine price to book. >> not exactly a great whiff of optimism there. if you own the xle, you own ebs on and chevron. what is your view? >> well, obviously chevron and exxon benefitted from the fact that their beat was massive and i think the rest of the energy industry will experience that. so i think a lot of pessimism is leading to a lot of positive surprises. but i agree with erin 2that the overall look for energy and oil still is negative with the massive oversupply. we are seeing some short term supply -- rather, short term indicators that suggest we might see firming in the industry. we're seeing an oil strike in
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brazil, libya shut down production. oil rigs continue to drop in the u.s. so maybe a little bit of a mixed signal, but still the overarching view is that opec is still pumping like crazy and we are well, well, well supplied. >> well supplied. there we go. thank you both. for more trading nation, you can head to trading up next, the most black listed app in corporate america.
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when it comes to businesses, drop box is the most blacklisted app according to mobile iron and its 10,000 commercial clients. their main concern, the lack of security protecting against data leaks. joining us is ari levy. does this survey -- every survey
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is sort of skewed and it may be just a slice of the corporate population. does this actually underscore a bigger problem for drop box? >> yeah, drop box 's big proble is that it's fundamentally a consumer application that is really good with photos and video storage. and those things just don't really work well in the enterpri enterprise environment. what enterprises need is to be able to manage secure data flow and drop box simply has not been the best app for that over the years. yet drop box needs to be. market to justify its $10 billion valuation. >> and drop box has been considered one of those unicorns. you mentioned $10 billion. it's the 7th highest in terms of valuation. when it got the initial funding, was it only a consumer company and do you see guys were banking on the fact that it would be able to crack the enterprise market? >> yeah, that's right. the view all along has been that it's such a nice app to use,
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it's so easy to use and there are so many things you can do with it, that people would naturally be bringing it into the work environment and i.t. would be forced to reckon with the fact that all these people would be using it. what it didn't factor in is that many i.t. people aren't comfortable with the years having so much control over data flow and instead of trying to figure out a work-around, they have shut it off entirely. the this thing drop box needs to be able do is work effectively with i.t. and chief security officers and that's what they're pushing now. >> is there any sign that companies have been hurt by malicious files? hey, i got an e-mail from somebody i don't know nknow, do worry about it, just open it up sf has that ever actually happened or are the concerns overdone? >> there have been all sorts of mobile hack as.
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s it's happening all the tilme. the equally-46 or perhaps more prevalent is data leakage. that's the issue every i.t. diehl department department is dealing with when they have guys where there are personal files stored on them. and corporate files using the same tools. managing that flow inside the same app is a very, very difficult problem. >> just a high tech verg of somebody like walk out of the company headquarters with a file cabinet under your arm? is that basically -- >> yeah. 25 that's absolutely the concern. so you can shut it off, or you can figure out a way to deal with it. and finding a way to deal with it has been an issue. drop box hasn't necessarily been the best solution.
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>> interesting to see what the ceo says on wednesday. thank you. by the way, at the event drew houston will join us exclusively on power lunch. that is tomorrow wednesday 2:15 p.m. eastern time right here on "power lunch." one major part of the u.s. economy is headed for what could be an all-time record year. we'll tell you the what, why and how. technologies make healthcare more personal with patient-centric, digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way clinical research sites collaborate with pharmaceutical companies, and enhancing patient engagement with innovative platforms and solutions.
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welcome back. october auto sales in the united states hit a pace of 18.24 million vehicles, that's according to the research firm auto data which collects all of the data from the various automakers, crunches the data and comes up with the sales rate. again, october sales rate, 18.25 or 18.24 million, this is the first time since 2000 that we've had back to back months where the sales rate was above 18 million vehicles. brian, you have to wonder if we're going to start to see analysts raise their estimate for full year sales and now put 2015 on pace to be the best year ever for auto sales in the u.s. back to you. >> and do we know what the record would be, phil? i know anything over 18 is dog gone close to the record.
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right after september 11th when they offered all the incentive, we had a huge month. >> that's the all-time report, keep america rolling when general motors rolled that out. a lot of other automakers also rolled out 0% financing. the pace was 21.71 million. one other month in 2005 where the pace was 20.6 million. otherwise you've got a smattering of months mostly in the early 2000s where you've had a sales pace above 18 million. and that is what is significant here. you have last month at 18.19, or september and then you have october 18.24 million. i think that now when you add this all up, we're on pace for full year sales to come in at about 17.45 million. and the record was back in 2000 at 17.4 million. >> back in 2000, could you buy a car with shares of sock
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>> true. >> all right. well, auto sales surging, let's get the pulse of the auto industry from some of the dealerships themselves. bob smith is executive director of los angeles new car association. are you surprised by just how strong these numbers are? >> no, we're not. we had anticipated having a really strong year with all the variables in the economy. we're very bullish on reaching those numbers that you talked about. i think we finish out strong in november and december. cars are affordable, the employment figures support it. and the industry is building the best and safest cars with the most innovative technology. so we're very bullish. >> as somebody who pokes around at cars now and then, they ain't cheap. car prices continue to go up. do you see any reduction in the
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pace of car price in-flas? people obviously don't seem to care, but if interest rates go up, they might to start. that doesn't even make grammatically sense, but you get my point. they might to start. >> i think what you see right now is there has been a return to automobile leasing. five years ago, the market was about 20% of people that leased vehicles. and that's now up near 30%. in addition, people are confident that long term rates are going to stay low. and with that, we see longer loans and that's the way people are able to go about reaching for more car. how that will impact the ultimate price of cars going forward, we'll have to see. >> i know what it will impact, the 4 405 which is always traff free. this should help keep the flow moving. >> thank you for having me. >> they might to know.
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that was great english. >> that's new. >> unpossible. >> all right. let's talk about shares of tesla, under pressure as they get set to record third quarter earnings. shares down about 15% in in jus. people kneel rossner is an list, he's got an underperform on tesla, $245 price target. >> as of your note on october 20th you didn't actually believe that any model xs were delivered beyond the founder series, the ones that were delivered at the launch. do you still stand by that. >> do you think any have been delivered so far? >> it's hard to believe but as far as our channel checks indicate, we don't think tesla has produced a single model x besides the handful of founder series that it had delivered in front of the media in great fanfare, but we are seeing no other model xs being produced, that's going to make it incredibly difficult for them to reach their volume targets for this year but more importantly it will also raise serious questions among investors on
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their ability to execute a very aggressive plan of ramping up volumes over the next few years. >> let's unpack this a little bit. in terms of the year-end targets, 50,000 vehicles is what tesla has guided to. what do you think they will actually have to guide to at this point should there be no model xs delivered for the rest of the year or handful that you expect to be delivered in the fourth quarter? >> the current guidance is a range of 50,000 to 55,000 units delivered for the full year. to get to the low end of that, which is a 50,000 units, they would have to deliver 17,000 units in the fourth quarter, which would be an unprecedented jump from the third quarter where they only did 11.5. we think they will miss the low end. they will come in and probably reduce their expectation to below 50,000 units and i think that will raise some serious questions on the future ramp up over the coming years. >> could tesla be in a situation where model s deliveries are also impacted since they do
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share the assembly line at the finishing point? >> oh, absolutely. i think that part of what has put a little bit of pressure on delivery so far was essentially the ramp up process itself and so that's clearly something that tesla has never produced two cars at the same time so far, it always had its own set of operational challenges. what's surprising to us, this is a car after being delayed for two years is supposed to have launched in the third quarter and as far as we can tell they have not delivered a single production unit so far. >> all right. it will be an interesting report to watch. emanuel, thank you very much. emanuel rossner of clsa. tonight on "fast money" at 5:00 we will be breaking down tesla's earnings report and be on the conference call as well. >> thank you very much. the biggest names in business and technology are gathered right now at new york at the deal book conference which is where we find our own kayla tausche who is speak so long to some of those big names.
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welcome. >> thank you, brian. well, our andrew ross sorkin just got the stage with peter teal and chris sacca whose investments in facebook and switer respectively have become the stuff of legend. both of them recalled times growing pains for each company, decisions at an early stage whether to sell facebook to yahoo, at which time for facebook of course the rest is history now. we know that each of those companies has gotten incredibly valuable, valuations have gone up. so does teal think that where we are now in the state of tech valuations indicates a bubble? here is what he said. >> valuations are high. i don't think -- i don't think we're anywhere near the 99/2000 levels and i think that if there's a bubble today it's certainly not centered on tech. i think for there to be a real bubble you have to get the public at large involved so bubbles are psychosocial phenomena and the reality is that the public has not been involved this time around unlike
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the late '90s not enough ipos. something like 35 tech ipos in 2014, 300 in 1999. public is not involved. if there is a bubble today it's with the money printing. >> in money printing. if there is, in fact, that froth in the market coca-cola isn't seeing it. coca-cola's ceo gave a pretty muted overall look of the global economy, coca-cola is in more than 200 countries so it's especially interesting to hear that he said africa remains the most dynamic market for consumer products, latin america continues to struggle. he said they still have a green light in the u.s., but europe could be troubling. here is what he said. >> europe next three years i think is going to be better than the last three years, but the horizon after the next three years, it's still -- there's no light at the end of the tunnel in europe. >> that despite the fact that volumes actually rose 4% in
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europe in the last quarter, but that certainly was a pretty dismal read on the european economy and then there's the fact that consumers are shifting their preferences away from carbonated beverages. muhtar kent said he thinks the consumers want something in smaller packages so they have been shrinking some of the ways they have been marketing their products but certainly quite an interesting read from coca-cola. we have john car listen of the doj on the stage, later in the day dan strucken miller and carl icahn. >> what did you think of peter thiel. >> he is not one to mince words. it was fascinating to hear his tame take on the current markets and anecdotes of working with ceos and how they think about business. >> peter thiel once beat me in chess in 90 seconds and i'm not embarrassed to admit that. >> that doesn't surprise me. >> kayla tausche thank you very much.
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luxely real estate sales are throwing around the world, still bright spots for high end homes if you know where to look. which is why we're bringing in brian frank with that story. >> the three top luxury markets are top destinations for chinese buyers. we will rank the best and the worst and see what $10 million gets you around the world. coming up after the break. atrico be the boss of you? (patrick 2) pretty great. (patrick 1) how about a 10% raise? (patrick 2) how about 20? (patrick 1) how about done? (patrick 2) that's the kind of control i like... ...and that's what they give me at national car rental. i can choose any car in the aisle i want- without having to ask anyone. who better to be the boss of you... (patrick 1)than me. i mean, (vo) go national. go like a pro.
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a big slow down for luxury real estate. not a slow down everyone.
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>> but especially in some places luxury real estate prices slowing dramatically with europe and russia posting the biggest declines. they measure prices for the top 5 3rs of the market in 34 cities prices up only 2% year to date, that's half the growth rate of last year. there were some bright spots mainly in markets with big chinese buyers, the top city was vancouver with prices up 20% in the first nine months of 2015, sydney second and shanghai third. of u.s. cities miami was the highest followed by new york. zurich and jen neef have a ranked near the bottom. in vancouver this waterfront home is 7500 square feet yours for $10.6 million about the same price you get this lake shall lay in lake geneva, 3,000 square foot, $9.6 million so a big
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disconnect between the chinese fueled markets which are still doing well because the wealthy chinese are putting money overseas. >> robert frank thank you very much. >> thank you. >> thank you all for watching. >> it should be a big market close, watch energy stocks which are rallying into the close. "closing bell" starts right now. welcome to the "closing bell," everybody. i'm kelly evans here at the new york stock exchange. >> and i'm bill griffeth. we do have a nice little rally in the market today, small caps leading the way, the dow creeping back toward the 18,000 level, plus we had stellar auto sales numbers for october just released a few minutes ago. we will look at where this market may be going and where the opportunities may lie. >> call of duty meeting candy crush, act vision buying king digital for $6 building. we will dig deep into why we could see more american companies making such deals outside the u.s.


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