tv Power Lunch CNBC November 16, 2015 1:00pm-3:01pm EST
footlocker anymore. >> josh? i'm not interested in playing any of knothose names for earni because the sector is a minefield. >> urban outfitters, let's see if there's any savior in the retail space. >> we'll see you tomorrow. all of you as well. "power" begins now. good afternoon, everyone, and welcome to "power lunch" along with mandy drury, i'm tyler mathisen. paris remains in a state of emergency, a manhunt under way for one of the proper suspecting. president hollande says we are at war and laid out his plans. we'll take you live to paris. just how safe are we? a former fbi assistant director stationed in iraq will weigh in. stocks are rallying right now but these do add another major risk to the markets. so volatility has been soaring over the past week. is it back to stay for a while? and have the paris attacks
taken a december interest rate hike off the table? we will tell you what top economists are saying right now. but first to the terrorist attacks in paris. here is what we know this hour. the death toll stands at 129, and there are fears that number could rise. 99 people are in critical condition, 7 of the attackers are dead. >> 6 died from suicide bombs, 1 was killed by police, and now a massive manhunt is under way across europe. our chief international correspondent michelle caruso-cabrera is live in paris with the latest. good evening, michelle. >> good evening, tyler. and the big news in the last hour is that the eiffel tower is reopened. this is, of course, the best-known symbol of france and it had been shut in response to the attacks on friday night and in an effort to get the country going back to normal they reopened it this afternoon and tonight it will be lit in the colors of the french flag, blue,
white, and red. the other key event was the president of france, francois hollande addressing a historic meeting of congress at the palace of versailles where he asked for more powers in order to conduct a war against isis. he used the phrase repeatedly that we are at war, and he wants the ability to do more surveillance on individuals that are believed to be a threat to the country. and the final piece of news that has made one of the big headlines today and a bit of foreboding for the united states, the media arm of isis in northern iraq, and, yes, they have a media arm, released two videos of militants praising the attacks on france and then threatening washington, d.c., saying, quote, like france, we will strike america in its center, washington. tyler, when we come back in a half an hour, we'll have more on how businesses here are trying to recover in the wake of the attacks on friday. back to you. >> thank you very much for that, michelle. meantime, president obama at the g-20 summit addressing the
terror attacks. chief washington correspondent john harwood is at the white house. john? >> reporter: mandy, at the g-20 meeting in turk yib, president obama said the united states stands by france and president hollande in his war with isis, but he indicated that he would hold firm against calls that he fundamentally change his own strategy of air strikes, of special operations, but mostly relying on indigenous boots on the ground to take and hold territory from isis. here is the president this morning. >> there will be an intensification of the strategy that we put forward, but the strategy that we are putting forward is the strategy that ultimately is going to work, but as i said from the start, it's going to take time. >> reporter: now, one change the president hopes to take advantage of is greater interest from russian president vladimir putin who he huddled with at the g-20 in a political resolution
that would remove bashar al assad from power in syria. that's in the wake of that downing of that russian airliner which is widely believed to have been generated by isis, but even so, even if they get a political resolution in syria, and that's a very, very large if, the president said you can't altogether stop acts of terrorism by people who are willing to lay down their lives. here is the president again. >> one of the challenges we have in this situation is that if you have a handful of people who don't mind dying, they can kill a lot of people. that's one of the challenges of terrorism. it's not their sophistication or the particular weapon that they possess, but it is the ideology that they carry with them and their willingness to die. >> reporter: now, the president also waded into the republican presidential race and domestic
political reaction to the paris attacks by saying it is shameful in giving into dark impulses to republicans. ted cruz of texas, he wasn't named but he's one example, he's running for president, and said that christian refugees should be taken care of by the united states and the west but not muslim refugees. this is a rising trofer scontro because we've seen more and more governors coming out and saying they will not accept syrian refugees in the states. the administration is committed to taking into 10,000 ultimately and some democrats like hillary clinton want that number to go higher to 65,000. that's going to be a continued issue on the campaign trail and one for president obama to deal with. >> all right, john harwood on the north lawn of the white house. thanks very much. despite the deadly attacks and renewed global fears, stocks have actually staged a bit of a rally as you see there, up 118 points. the s&p also higher as is nasdaq, but will the paris attacks bring a return of
heightened volatility? bob pisani covers that angle from the nyse floor. hi, bob. >> as of now the answer is no. we had thought that might be happening at least at the open, but we had a very muted response. let's take a look at the markets in the middle of the day. the important thing is not a big reaction to the paris attack even in paris. so the paris stock exchange down there, the european markets, only down 1% at the open, and they ended largely flat. what did move our market forward in the middle of the day was a rally in oil. oil was trending towards $40. when that reversed the market started reversing. it's been 3 to 2 advancing to declining. volatility has been declining. the vix has been moving down into about the 19 range. take a look at sectors. it was very defensive at the open. you saw telecom and consumer staple stocks. energy is now the number one sector on the day, and that's happening as oil has been moving up and there you see the spdr, the energy etf, a basket of
energy stocks moving to the highs of the day. energy big names like murphy, conoco, exxonmobil, and chevron all which were up 1% to 2% are now all up about 2% to 3% on the day. elsewhere there has been some predictable moves due to the paris attacks, aerospace and defense stocks for example were up 2% or 3% at the open. they are up here as well. airlines predictably were on the downside. airlines in europe particularly, air france for example was down a bit more than these american airlines, but you get the general picture. finally, predictably also some security-minded companies are on the upside. over in europe there's a company called fingerprint cards that does biometric identity screening, they do fingerprint analysis to verify people's identity. that stock is up 7% but that stock has been moving up all throughout the year. so let's say right now muted response to the paris attacks and it's oil that's really got the market going midday. guys, back to you. >> thank you vep for that, bob. if you talk about predictable
moves of investors looking for safe havens, gold is marginally higher on the back of the attacks, only up by about $3 per ounce at $1,084 and as bob pisani was just highlighting a moment ago, wti crude is moving up by 1.5% at $41.34 a barrel. let's find out more with jackie deangelis at the nymex. >> good afternoon to you, mandy. we've been vacillating between positive and negative territory with crude prices throughout the session, but traders tell me by all accounts they think that this reaction is relatively muted given the scale of the events that happened over the weekend. the wait and see approach is in play right now, although we have rebounded into positive territory, and we did have many sessions, consecutive sessions, of downside for crude prices. so it's not odd that you would see a little bit of a pop today. most traders were saying if we did move higher, they expected that it would be more. while geopolitical risk usually does send a little bit of a wave of panic into the marketplace, that doesn't appear to be happening today because traders
want to know more. they want to hear more about what the efforts are going to be from the western powers. we do know president obama has said no boots on the ground. that's calmed them still, but having said that, this is a day where there's major news, and the swings in oil are much more muted than on days we haven't really had any news. it's an interesting approach and way to think about it. we could see that three handle. we'll have to watch. back to you. >> jackie, thank you very much. these latest attacks in paris raise the question once again just how safe are we all here in the u.s. and around the globe? joining us on the phone is a former fbi assistant director, chris zwecker who was the on-site commander of the fbi operations over in iraq. welcome. nice to have you with us. this appears to have been the work of a terror cell indigenous to europe perhaps directed from syria. how do you infiltrate or connect with these people before they do harm, and is it harder to do today than it ever has been
because they are more sophisticated than they ever have been? >> well, one of the enablers there is the internet. it's allowed these terrorist organizations, especially isis, to metastasize around the globe. it's always best to have human sources inside the organization, abo but that's very difficult to get. the surveillance techniques that the fbi and other agencies use are probably one of the primary techniques that we're using now to try to monitor isis' activity. >> has it gotten harder because some of the rules governing what law enforcement can and can't do or what the nsa can and can't do have grown more restrictive? >> it has been more difficult. encryption has actually provided some safe ways of communication that at this point can't be interce intercepted. being played out on capitol hill
now. the terrorists are very adept at creating communication modes that can't be intercepted. however, the drone activity, the drone attacks that you see are generally based on cell phone actions, too. people getting on cell phones and also based on human source information. so the u.s. intelligence committee has done a very good job of preventing attacks in the united states thus far. maybe a little bit of luck, but a lot of proactive actions on their part. >> chris, what do you think should be done about the plans and programs to bring syrian refugees here to the united states? >> i would be very careful about bringing syrian refugees to the united states and actually any refugees from conflict spots in the middle east. we just don't have any way of knowing who they are, and i think it presents and introduces a significant risk here. according to director comey, the current director of the fbi, over 250 u.s. citizens have traveled to syria to learn how to be terrorists. they'll mingle in and they'll take advantage of that and they will mingle in and they will come into the united states and then you have your planners and
your organizers here on u.s. soil. >> with respect to how safe we are here in the united states, you heard probably in the prior segment that they've threatened to bring the war to washington directly. you suggested earlier that we've both been lucky and good, proactive and smart. i'm struck by how often i have heard in recent days the phrase, there is no credible threat against the united states. well, it seems there was no credible threat against paris either. should we take comfort in words like that or not so much comfort? >> well, i don't take any comfort in that. we know that -- we are the safest country in the world, but that doesn't mean that we can't be hit. there are terrorist organizations that have people here in the united states, sleeper cells in the united states. we know that. we know that from the director of the fbi's testimony and statements that have been put out there. so there is a clear danger in
the united states. that doesn't mean we don't go out our front doors. it just means we walk around with a level of awareness, and if we see something, we say something. >> chris, no matter what we do and how we respond, is this an unwinnable war? it's going to be a never-ending tit for tat? >> it's not unwinnable. we need the same level of resolve the terrorists have. that means we have to put up with extra security at athletic events, we have to support the intelligence services as they go about their business providing them with the resources and the tools to get the job done, but i would never say this war is unwinnable. we just need some resolution on our part. >> chris, thank you very much. chris swecker, former assistant director of the fbi. mandy? >> reaction from big business to the paris attacks. the ceo of tech stron aviation will be joining us and we'll ask him about air safety and the terrorism threat right now. he's also unveiling what could be a game-changer in the industry. plus, has paris put a december rate hike from the fed off the table?
companies announcing it is getting into the restaurant business. the retail company is acquiring the vetrey family of reactions. shares are down by 9%. and constellation announcing its acquiring ballast brewing. they're up by 1.6%. let's go to dominic chu for a market flash. >> a check on what's happening with mylan which are rallying after announcing it's going to buy back $1 billion worth of its own stock. shares are currently at the highest levels of the day up by 2.5%. these gains are right into the stock's 13% surge on friday three days after losing its hostile bid for a rival. the stock is down 11%. still a name we're going to keep an eye on today. >> dominic, thank you very much. let's get some reaction from big business to the attacks in paris. phil lebeau joins us from las vegas where he's joined with the ceo of tech strom aviation. hi, phil.
>> thank you, tyler. i am joined by scott ernest, ceo and president of tech strom aviation. we're in the new cessna citation longitude. we'll talk about that in a bit but first let's talk about europe is your second largest market. do the attacks in paris, does that change the dynamic in terms of what you're expecting to hear back from your customers, from other corporations ordering jets in europe? >> let's say, first of all, phil, terrible tragedy. our hearts really go out to those impacted and i think it's almost too soon for us to see any direct impact from that. we're going to stay focused on investing in our products and continuing to support the industry to the best of our abilities. >> textron aviation has a defense business. king air in particular. you sell those to countries that use them for border patrol. will you notice much of an impact because of what's been going on europe? >> i would say just in general we've seen a little bit of an uptick in just border
protection. we sell probably 50 to 60 king airs with border protection capabilities installed in them, and that's something that we're starting to really see some uptick on, but we'll stay focused on that. >> let's talk a little bit about this airplane we're sitting in now. the citation longitude. a larger aircraft. largest aircraft really for cessna, and this is all about meeting that market demand to expand the capacity for companies, correct? >> correct, yeah. when you look at our product base, honestly as we move people through our products, what we had was a situation where people would actually move -- have to move out of the product family because we didn't have anything that would offer them a cost-effective 3400 nautical mile product that they could use effectively, and so we got a lot of customer feedback, put the investment dollars in this, and the team is really excited about this opportunity. >> later today you're introducing the hemisphere an even larger aircraft and that's really talking about for those
companies who are looking to do the international trips, the longer trips, whether it's to the far reaches of europe or over to asia, et cetera, right? >> exactly, yeah. the hemisphere is our next generation beyond longitude. it will go 4500 nautical miles and it will be based upon the same operating characteristics with respect to what you would expect from a cessna from a cost-effective standpoint and we're really excited about both these products. >> one last question. europe is your second largest market. any concerns that that business, which has been under a little bit of pressure because of the economy overall in europe, that it faces further pressure given the events going on over there? >> i think we're going to stay focused on continuing to invest in our products and we feel that we have a good product mix that is very effective to be utilized anywhere in the world. >> scott ernest, president and ceo of textron aviation company here at nbaa. we're inside the longitude. we'll send it back to you. >> thank you very much, phil lebeau. stocks are rallying right
now. the dow is up by 143 points. we're going to bring you a number of sectors that are on the move following the paris attacks. the three that you should be watching right now, that is next on "power lunch." why should over two hundred years of citi history matter to you? well, because it tells us something powerful about progress: that whether times are good or bad, people and their ideas will continue to move the world forward. as long as they have someone to believe in them. citi financed the transatlantic cable that connected continents. and the panama canal, that made our world a smaller place. we backed the marshall plan that helped europe regain its strength. and pioneered the atm, for cash, anytime. for over two centuries we've supported dreams like these, and the people and companies behind them. so why should that matter to you? because, today, we are still helping
the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. welcome back to "power lunch." take a look at stocks right now. they're rallying. the dow is up by 148. of course, the markets today are coming off their biggest weekly loss since august. a number of sectors on the move as well following the paris
attacks. dominick ch chu has isolated th. >> as we take a look at the entire market landscape, there are those who figured maybe we were due for a down day given what happened with paris on friday, but if you look at some of the sectors, you talk about aerospace, defense, a raytheon or a northrup grumman, maybe a lockheed martin, all are up 3% or 4%, moving to the upside. those are lifting at least the one etf that tracks them. the ticker is ita. you can see those shares up by 2%. on the downside, the travel industry is taking a hit. european airlines like air france, lufthansa, you can see there down about anywhere from 2% to 5% and then u.s. carriers like delta, american airlines, united airlines off by a percent or more so they could be worse but for right now they seem to be stabilizing a bit. those stocks are dragging down the transportation index overall and that ticker, of course, that tracks the etf that track it is, the iyt. dow transportation index etf.
finally you talk about the booking sites like expedia or priceline, 2% to 3% lower for the same reason. as we talk about trades to watch, this is something to keep an eye on as everything continues to unfold, mandy, and this is just a real interesting move with regard to whether or not there are investors out there that are genuinely scared or whether or not this does bounce back. >> perhaps it was good we had the weekend as well to digest so there wasn't as much of a knee-jerk reaction. >> and you didn't see a lot of that flight to safety. we should point that out. >> gold is only marginally higher. >> it's very tragic what happened but right now the markets are still trying to figure out what's going on and that's going to be important at least for the next couple days here. >> thank you very much for that, dom. >> to the bond market we go. rick santelli tracking the action at thec cme. >> hi, tyler. most of the curve is unchanged. the short end maybe down a basis point. the long end up a basis point. two-day charts are the best way
to assess how current events are affecting market. if you look at a three-year short end, you can see we're still hovering at friday's lows. 10-year about the same. 30-year breaking away a bit. keep in mind that the -- right now the dollar index and the stock market are close to the highs of the day. you see a two-day of the dollar index and if we look at crude futures, especially, this is the ds contract, you want to look at how much work we did under yesterday, friday's lows and the notion that friday's high was 4175. should we trade or more importantly close above that, it would be much more significant. if we don't, look for more of the same and my final thought is that on a very simple level, it's going to differentiate the issues of friday, the economies of europe versus the u.s. our stock market, our dollar, and with regard to the fed, most traders i talk to think it's going to be data dependent whether it effects the fed, not the emotional issues tied to the
events. tyler, back to you. >> rick, thank you very much. well, businesses in paris are beginning to get back to work. a massive manhunt meantime across europe for one of the suspects in those deadly attacks. we will take you back live to paris. plus, has paris put a december rate hike off the table? you just heard rick santelli give us his idea on that. and next we'll tell you what top economists say now. "power lunch" returns in two minutes. 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
i'm sue herera and here is your cnbc news update. president obama holding a news conference at the g-20 summit conceding that the paris terror attacks were a setback in the fight against isis but dismissing critics who have called for the u.s. to change or expand its military campaign. some republican candidates, including jeb bush, have call for the u.s. to send ground troops to syria. french president hollande speaking to his nation's parliament saying france wants to unite with the u.s. and russia in a grand coalition dedicated to smashing the islamic state. he said that he will meet with president obama and russian president putin in the near future. two suspects linked to the paris shootings who were arrested over the weekend appeared in court today in brussels. seven people were arrested but five of them were subsequently
released. dozens of belgium police surrounded the houses of muslim immigrants in the city. wall street paused for a moment of silence this morning. the new york stock exchange and the nasdaq both went silent in honor of the victims of the paris attacks on friday. and that is the news update. back to you, mandy. it was beautiful to see the eiffel tower lit up once again. >> it really was. thank you so much, sue. let's take a look at gold prices closing right now. keep in mind that last week they plummeted down to six-year lows. right now they've got a marginal bid up by about $3 at $1,083. as for silver, copper, palladium, and plat yum, they are mixed. copper is currently down but the others are moving higher even in the face of a stronger dollar. >> friday's terror attacks killed 129 people, wounded hundreds more. many of them critically. today the people of paris are slowly returning to their daily routines. but against a backdrop of much
heightened security. let's check in once again with michelle caruso-cabrera, who is live in paris with the latest. michelle, what does it feel like on the streets there tonight? >> reporter: it's still tense, and yet we see people out in the streets. people are definitely trying to get back to normal. it's still very solemn but you see the streets are filled, businesses are reopening. there's traffic on the roads. still, remember, tyler, there were five restaurants and one theater that were attacked, and it's impossible for them to get back to normal right now because of what they've suffered. take, for example, the italian restaurant that was three blocks from here. if you were to see it today, our team went over there, you can see bullet holes in the window. a makeshift memorial has been set up where there used to be a sidewalk cafe. a cross has been put there, flowers, and painted on the door is heart and it says courage in french. we spoke with the owner of this restaurant, and he tells us a
frightening story. he said friday night he was sitting on the sidewalk cafe and he noticed the black seat circling for more than an hour and he was nervous about that. as the night grew colder he went home and got a call from one of his employees who sounded incredibly panicked and said something bad is happening. he came back to discover the shooting that had happened there. miracle no one in his restaurant died. right across the street at a restaurant across the street, five people there died. dmitri told us he is not ready to get back to normal. he says it will be at least a month or two before he reopens the restaurant. we also heard from the owners of the bataclan theater where 89 people were shot to death by the attackers. they posted on facebook the following, no words are enough to express the magnitude of our grief. our thoughts are with the victims, the injured, and their families, and then they went on to say we know many of you have asked that you could come in to get your personal effects or the personal effects of your family
and the police won't allow us to do that right now because it's still a crime scene investigation, but we'll let you know when we can. one of those details that is heartbreaking when you think about all of the people that were in there. tyler and mandy? >> michelle, i had one question about what, if anything, you're hearing. of course, paris is a very popular tourism destination, maybe particularly around the holidays. are you hearing anything about how people expect that to be affected this year? >> there's great concern about it, tyler, because france is the most visited country in the world. it has been for decades. last year that they had the numbers for was 84 million people, and the french government was trying to get it up to 100 million people by 2020, and so if there are concerns about the safety in the city, they're definitely worried there could be an impact because it provides so much revenue, more than 7% of gdp at this
point. we actually saw stocks like the hotel company fall today pretty sharply because of those concerns at this point, which would be -- if it were to have a continuing impact on the economy, yet another effect beyond the tragic events that have already occurred here on friday. >> all right, michelle. thank you very much. michelle caruso-cabrera reporting from paris tonight. meantime, let's get down to bob pisani. we've got a triple digit rally on the dow. he's at the nyse. hi, bob. >> hello there, and let's just review what happened in europe very quickly. most of europe opened down 1%, but it didn't end that way. you can see france was essentially flat but germany, spain, and that would be the uk, the foo footsie 100, all ended in positive territory. i have been asked repeatedly throughout the day why such a muted reaction to such a terrible event? a couple comments from the trading community. one, a lot of traders note the consumption is eventually when the events happened, consumption is postponed, not abandoned. it's not like the economy necessarily falls apart.
secondly, the ecb is likely to be even more accommodative at this point. some people pointing to that as a factor in the rally. what's happened in our markets is the middle of the day oil has turned around. oil was heading towards $40 and below just about 11:00, 11:30. when that turned around and went positive, that's when the stock market started turning around. look at the s&p 500 and energy stocks leading the way. here is the s&p 500 tracking how oil moved as it moved into positive territory. the big oil names all led the market rally with chevron, exxon, murphy, and baker hughes all up close to 3%. >> thank you very much, bob. let's get to dominic chu. >> we're watching shares of valeant down by 3.5% off the worst levels but hovering near those levels so far today, this after comments coming from omega advisers leon cooperman's hedge fund and their vice chairman steven einhorn who is speaking at a reuters global investment outlook summit in new york saying that the company, omega
advisers, has sold its stake in valeant. again, in recent weeks after buying more shares in the third quarter. as of the end of september and these regulatory 13f filings, we know they held a position but since then they have gotten rid of that entire stake in valeant. i will point out though, this is a stock that was 263-plus dollars back in the beginning of august. was $178 at the end of the september and now sits at $72.70 like you can see on the chart right there. again, mandy, keeping an eye on valeant, it appears omega advisers says they have liquidated their position in valeant pharmaceuticals. back over to you. >> thank you very much, dom. let's get to bertha coombs at the nasdaq. >> you can imagine, mandy, today we still have the travel stocks, they're just coming off of their lows, but that's where we're seeing the weakness in consumer discretionary names at the nasdaq but that's being offset by strength in large cap tech. if you look at jd.com
especially, it is leading the nasdaq 100 higher after reporting q3 revenue in line. growth and active users was up 59% year-over-year. that stock up more than 9% on the day. netflix, tesla, apple, seagate technology, all of them dipped at the open but now they're moving higher. we're seeing that strength come along in tech. consumer discretionary, urban outfitters, the company acquiring pizzeria vetri which is also based in philly and dow jones is actually reporting that the ceo of urban outfitters has a large stake in that pizzeria, so a lot of investors feeling a little bit of indigestion on that trade today. back to you. >> okay. thank you so much for that, b bertha coombs. so will the paris terror attacks change the way people invest with me christina hooper and also scott black, president of delphi management. thank you very much to both of
you for joining us. it feels as if overall there's incredible resilience, christina, in the markets, overall. i want to highlight that because, of course, the impact is very marked in certain sectors. is it changing the way you're investing? >> not very much but we have to think about some significant sectors and industries that have implications. of course, travel, but in general consumer discretionary is likely to be negatively impacted. first of all, we have valuations at highs right now. already deteriorating momentum. add to that the fact that these attacks and the threat of more attacks could have a chilling effect on consumer spending. >> remember we saw after 9/11 a nesting phenomenon. people sort of focusing on the home. is that something you could potentially see here as well? >> we could certainly potentially see that. if we see enough in the way of terror threats and if we see enough in the way of a national security response. just the presence of police carrying machine guns in cities in the united states could be enough to start scaring
americans into spending more time at home, doing less travel, and focusing more on nesting as they did after 9/11. >> which could potentially be good for sort of home related i don't know appliances, home building products makers. that kind of thing. scott, what's your feeling on this and does it change in particular anything with the way we should invest in europe? >> well, frankly, we're not market timers and we have a set strategy of the warren buffett benjamin graham. we try to buy high return on equity companies. it really doesn't change our philosophy whatsoever. i will say that i'm pleasantly surprised how resilient the dax was given the terrible things that happened last week in paris, but if you look at the united states market as a whole, mandy, it's very expensive. it's 19 times this year's expected earnings and earnings are down. even if you "x" out energy by 2% in the last quarter, topline revenue growth is negative and the idea that somehow next year
earnings are going to be up 18% and 19% which is the consensus estimate on wall street seems ridiculous. so i think you have to be cautious and be an individual item selector at this point. >> an individual item selector. what individual items do you like, scott? >> well, i have two. i had check point which sort of fits in with cyber security. they're the world's leader in enterprise. they have products now for mobile. they have $20 a share in cash sitting on the balance sheet. if you net out the cash, it's a 13 pe, a 9% top line grower, double digit bottom line and another one whether people stay home or shop through amazon, fed ex is really at a cheap multiple here. if you take a calendar basis for next year selling at 13.3 times, it's a company that generates over $1.5 billion in free cash, more than they do in net income. 17% return on equity. it's a well-managed company, and i think it's a pretty good play. as i say, irrespective of macy's
and jwn does poorly but amazon does well, you still get the good play for the retail market. >> okay. thank you very much scott and kristina for joining us. you can go to powerlunch.cnbc.com to see if kristina and scott think the fed will raise interest rates in december. that's a discussion we're also about to have with an economist. that's "power lunch." cnbc.com. >> take a look at wti crude rebounding today. up about 1.6% right now as you see right there. 1.3%. plus, will economic uncertainly following the terror attacks in paris take december off the table for the federal reserve and interest rate moves? we'll bring you that story on cnbc, first in business worldwide. i'm here at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information
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merger with cisco. they're saying the false reports are likely over the recent partnership announcement but it has no plans to merge. both of those stocks moving higher. goldman sachs and thomas lee aagreeing to purchase -- they will have an equal participation in a consortium to acquire gca. and finally marriott acquiring starwood hotels and resorts for $12.2 billion. that merger will create the world's largest hotel company. marriott is slightly higher. starwood interestingly is down by 4%. ty? all right, mandy. as france reels from the most violent attack within its borders since world war ii, the eyes of the markets are on the potential response from europe and the united states. will uncertainty over the economic consequences of that response take a december rate hike off the table for the u.s. federal reserve? our senior economic reporter steve liesman is back from some
time off with his analysis. hi, steve. >> thanks, ty. there's no doubt these gruesome attacks in paris have at least called into question whether the federal reserve will follow through on expectations for a rate hike in december. here is the key. how governments respond militarily and how markets and the economy ultimately react. if markets see the attacks as a reason to exit risky assets like stocks and plow into risk-free assets like u.s. treasuries and the dollar, it could give the fed cause. the strength of the dollar has been a concern of many fed officials. as it rises it pushes down prices for imported goods and hurts u.s. exports and manufacturing. doves on the rate setting federal merc committee could seize on another leg up on the dollar as a reason to pause. so far though there's only been a muted stock, currently, and bond market reaction to the paris attacks with the dollar hovering around that 107 level, just below it at 106.91 versus the euro. not enough to derail the
december hike possibility. the economics though could turn out to be more important than the markets. a fed that is concerned that european growth would weaken in the wake of the attacks would be less inclined to hike. it would fear the knock on effects to the global and domestic economy. the history of such terror attacks could undermine consumer confidence for a time but they have tended to have less lasting economic impacts overall. what would most likely deter the fed, large-scale military action that includes sending troops to the middle east. both because of the optics and the surrounding uncertainty, the fed will seem likely to delay a hike under such circumstances, tyler. >> all right. steve, thank you very much. so let's pick up on that thought, shall we, mandy, and ask whether a december rate hike is now less likely. joining us to discuss it is a dean mackie, chief economist with point 72. dean, welcome. good tof have you here. you heard what steve just
stayestayeaid. the fed was very concerned about international developments and cited that as one of the reasons why they were not raising interest rates. do these events make it less likely that the fed will raise in december? >> i think it's too early to say, tyler. the fed certainly is going to be monitoring events, certainly they're saddened like the rest of us by the events in paris. i think though that in order to derail the fed from their plan to hike in december, we'd either have to see markets turn extremely volatile. today they aren't, but, you know, that could happen over the next few weeks, or we'd need to see a sudden deterioration in the u.s. data. that doesn't seem particularly likely, but that would be another event -- >> conversely, do you think that the european central bank might be more prone to be accommodative and inject liquidity in the system as a stabilizer? >> in my view the ecb is planning to move in december anyway. they do have a number of measures they can take.
this makes it a little more likely, yeah, that they will move. >> but perhaps move more than they would have originally done, stimulate even deeper? >> it's certainly possible. i think they like the rest of us will be monitoring what's happening in the european economy between now and then but certainly this on the margin should make the ecb more likely to ease more. >> what do you think the trajectories therefore of euro/dollar is going to be? we're increasingly hearing the word parity floating around. obviously it would depend on whether or not the fed decides to pull the trigger in december but what's the base case scenario for euro/dollar. >> i think it's hard for short term to try to guess the next few weeks but i think if we step back and say over the next six months or so what's the euro likely to do, it seems likely it's going to drift lower. the fed is likely to be tightening. the ecb will be easing more. that's a mix that should favor the euro heading towards parity anyway. >> as you look into 2016 and analyze the american economy, how strong do you think it is likely to be? what do you think the fundamental underlying longer
term growth rate of the u.s. economy is? >> so the u.s. economy i don't think is particularly fromagile right now. we're in a slow, steady recovery. many people would like it to be faster, but the good news on that front is there's not really a lot of excesses being built up right now. nobody is terribly overoptimistic about the u.s. and that's the kind of scenario where we get into recessionary risks, when people have become too optimistic, their piling on debt, et cetera. it's awfully hard to see that happening. my view is it's slow, steady growth. >> one last question unrelated to the economy. what's it like to work with steve cohen now? >> it's been a great experience for me. he's devil a finitely a demandi investor, a skilled investor, and it's been a good investor. >> you went from barclay's to over there, a family office. very different environment? >> it is. it's gone from an environment where i'm seeing clients all over the world to where i'm focused internally. it's a changed environment but
the issues are the same. >> how do you like connecticut? >> it's been great. >> dean maki, we appreciate it. let's go to sue herera for a news alert. >> basically john malone's liberty global is agreeing to buy the caribbean cable operator cable and wireless communications. the price tag on this will be $5.3 billion and basically what it does is it strengthens the acquisitive company's foothold, that being liberty global, in an emerging market where they do not have much of a foothold there, and it brings in their more consolidation. liberty global does trade here and it's down 1.75%. cable and wireless does not trade here. $3.5 billion, liberty global will buy cable and wireless communications. more "power" coming up in just a few minutes.
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i'm brian sullivan. in the next hour we'll continue our coverage of the paris terror attacks. have we become uneasy allies now with russia? we'll take a macro look at strategy around goals in the middle east. plus, how to hurt isis by cutting off the one thing the terror group needs most, money. even with the awful events in france, wall street keeps working so we'll bring you some of the key analyst calls of the day. that is all ahead. >> thank you very much, brian. the ongoing threat of terrorism is just one of many problems facing europe from the migrant crisis to economies still struggling back from recession. there's a lot of things going on. let's get to seema mody who joins us at the great wall of europe in crisis. and run us through here. >> absolutely, mandy, because this attack on paris really comes as european leaders scramble to address five other
crises. first one, portugal. just last week portugal's ousting its government. the socialist leader expected to become the next prime minister. there are concerns over whether he'll lead the country in a different direction. next one is spain. catalonia, richest region in spain, continues to push for independence and the breakup of the country. investors and economists also watching greece. let's see where -- there it is, right here. greece, over the summer it may seem like that was a distant memory but lawmakers are concerned over whether greece will implement strict reforms at the request of creditors. we're keeping a close eye on that situation. and, of course, following the paris attack, finding a coordinated solution to address the influx of refugees is likely to become more difficult. lastly, keep an eye on ukraine. russia's continue involvement in crimea and the economic and political implications in ukraine remain a source of concern for europe. now, experts say the series of challenges facing european
leaders could slow down decision making in brussels. that could result also in the rise of smaller radical parties across europe and ultimately lead to a weaker and more divided europe. that's why pressure is really on these three europe leaders. mario draghi, angela merkel and donald tusk. attention on these leaders and how they address these different crises taking place. >> and francois hollande facing elections. all of that adding to tensions. that will do it for the first hour of "power." >> it's 2:00 on wall street, 8:00 p.m. in paris, france, where you are looking at a live picture of the eiffel tower. it is lit up in the blue, white, and red of the french flag. the investigation continues, the healing tries to begin, and global finance marches on. the dow is up 160 points as oil recovers just a bit. hi, everybody. and thank you very much for joining us on this monday. we have much more on your
markets and your money throughout the show, but we begin with the latest from paris. a massive manhunt under way this hour. the investigation widening following friday's horrific terrorist attacks. french president francois hollande addressing parliament saying france is at war and he called for changes to the constitution to help deal with that crisis. president obama also weighing in from the g-20 summit in turkey saying, quote, isis is the face of evil. let's get right now to cnbc's chief international correspondent michelle caruso-cabrera live on the ground in paris with the very latest. michelle? >> reporter: brian, more news breaking in just the last few minutes. the office of the french president announcing that u.s. secretary of state john kerry will meet with french president francois holland he ce tomorrow morning in paris to raise the level of engagement between the two countries as they fight a common enemies. a manhunt continues for two individuals police believe are
connected to the attacks. the first individual the associate the press the police think he's the alleged mastermind. 27 years old. he's described as isis' executioner. last known location syria. the second individual they are looking for saleh abdel salam. he evaded capture at the belgium border over the weekend. he's 26 years old. his brother is one of the suicide bombers. another brother of his is under arrest. the police believe he's connected because his name was attached to a rental car that was found near the bat caclan theater where so many people died. in the hunt for him, there was a huge raid that occurred in brussels, the country about 200 miles northeast of here, the city 200 miles northeast of here in belgium. police raided a property there. they surrounded it with heavily
armed vehicles, police vehicles, there were snipers on the roof, police scaling walls, trying to capture him. they didn't find him or anyone. if, indeed, he was in there at one point and it was believed that he was according to the mayor of the town in the suburb where the raid took place, it will be twice this individual has evaded capture. guys, back to you. >> michelle caruso-cabrera in paris, france, for us. michelle, thank you very much. let's now bring in daniel carson, chairman of the global crime investigation firm croll associates. dan, most wars can come to a political end. you can accept a surrender from a group of people renting a nation. it's not that way anymore. how do we combat what is essentially a nationless group of murderers? >> the most important element is gathering intelligence, developing information on people and the businesses that they are associated with and the people they're associated with. >> we look at isis, isil,
d.a.s.h., whatever you want to call this group, it's not one group, is it? it's a loose conglomeration of bands of people. how do you interact with them? how do you intercept their communication? how do you understand what their goals, if any besides murder, really are? >> it's developing a number of factors. it's using informants to obtain intelligence on these individuals. it's using undercover operatives to get inside. cyber strategies to intercept their telephone communications. aerospace surveillance. it's a number of strategies that are used to identify the individuals. the most valuable asset that these loosely fed rated organizations have are human soldiers. and they talk to people, they communicate with people. it's developing intelligence through informants and operatives. >> and obviously given what happened in paris on friday, some might suggest that we are globally not doing a very good job at that but we don't know what has been stopped. how do you think we're doing?
>> actually i think we're doing very well. they chose a soft target of penetration for their acts. if you think that -- consider what happened at the stayed yunl. their goal was to get inside the stadium and explode devices there. they did not get inside. they exploded them outside hoping they could cause a stampede to go out and then start firing. so in some respects the hardening of targets makes it more difficult for them, but it's not something that's completely preventable. >> dan, you mentioned that people are an important asset to a group like this, but funding obviously is as well and there were u.s. air strikes against the oil convoys that transport the oil. that's one way of cutting off funding but there are also many reports that donations are made to this group using a block chain technology, bitcoin essentially. what are some of the ways we need to think about cutting off this important line of funding to this group in this modern age? >> again, it's a matter of developing the names of the
individuals who control these accounts and working your way back through there. once you have control of the accounts and the cooperation of the exchange or the currency or control of the network, then you can work your way back and find out who these people are who are contributing to the network itself. i would say that it is right now a very small part of how they are developing their assets. remember that they looted a bank in mosul with a few hundred million dollars worth of currency in there. they have control of wide swaths of territory. they engage in extortion. they shake down businesses. they shake down individuals and money is only part of it. you don't need a lot of money to move across borders. you don't need a lot of money to buy explosive devices. so it's a part of the puzzle, but it's by no means the entire thing. >> you don't need a lot of money to buy explosive devices. i'm wondering what do you think -- is it just people who are the most important aspect of this campaign and, if so, how do we go about cutting off that source of assets being the people who they're recruiting? >> you're starting to see it now
because law enforcement agencies and security agencies are raising the profile for interdiction and for detaining people. there's no longer going to be any low level of screening. they're going to raise the level of screening and you're going to see more detentions. the best example of it was this morning, over the weekend actually, when french intelligence agencies began to raid residences and businesses. these were people who were already on their radar. so they're raising the level of screening dramatically and that's going to have an impact. >> daniel, we're going to leave it there. we do appreciate it. >> thank you. >> melissa? >> let's get back to what's happening in the markets and stocks are pushing higher. in fact, we're pretty much at session highs for the day. let's get to bob pisani at the floor of the new york stock exchange. bob, what a turn of events here. >> and you can pretty much pin it on oil. turnaround in the middle of the day. let's look at the markets in the middle of the day. 2 to 1 advancing to declining stocks, that's the best it's been all day.
the volatility is declining. the vix is below 19 but it's been a muted response to the paris attack. down 1% in paris at the open and it ended essentially flat. we started moving in the middle of the day as oil started moving. remember, it was moving towards $40 down below that even at one point. it's getting close, and then it turned around. that's who moved the markets. look at the sectors here because we could see energy is the primary mover. in the beginning of the day, that was not the case. it was very defensive, telecom, consumer staples. finally, a lot people asking me why was there such a muted reaction to the paris events? a lot of people believe long term consumption a postponed rather than abandoned so there's less of an impact economically and others mentioned the ecb is likely to be more accommodative. >> thank you very much. let's stay with the markets. should there be any change in the way that you invest because of the global increase in terrorist attacks over the pars few years? paul chryst fer chief global
market strategist with wells fargo and jack ablin. i said i thought the dow might end higher because everybody i talked to says this isn't going away. this is a part of our new reality probably for the rest of our lives. would you great with that? do the markets just sadly expect this? >> i think it has for the last couple years, brian. it's remarkable to me not only what the market reacts to but what the market doesn't react to. if you consider what i would have thought would have been some pretty sizable geopolitical events, most notably in the middle east with syria, with russia, with crimea, and so forth, the market has pretty much shrugged that off since 2013. so i think you're right. i think it's either a new reality or it's a financial world versus an economic world, but i will say it would appear
anyway that the financial world has come either inured to the problem or insulated. >> we had the madrid bombings in 2004, the uk subway bombings, last week we had a massive bombing in beirut. the russian jetliner was probably brought down by a bomb according to officials and now this. when you advise your clients, they call you up and ask you about situations like this, do you say just invest the way you have been or does anything change even on the margins, jack? >> i think it does change on the margins, brian. keep in mind that when we made investments in europe or overseas investments, we made equal investments in europe and japan on a currency hedge basis, and the currency has responded. but now i think new investments in europe should be currency hedged and i think my preference now given that both japan and europe are trading at roughly the same 20% discount to the u.s., perhaps maybe we do tilt a little more to japan, but, you
know, they are somewhat isolated and insulated from the vagaries of geopolitical turmoil, but, you know, from that perspective, no, i think overall we're going to go with where markets are cheap and moving in the right direction and we'll likely keep that currency hedge on a little bit longer. >> paul, what's your take on what happens in europe as far as what the ecb does in response potentially to this? is it your thinking they could perhaps ease even sooner or more deeply because of what's going on right now with the terror attacks and slowdown in general? >> yeah, that's possible. mr. draghi did say at his last meeting that they were interested in providing additional stimulus as the economy may need it, especially as their inflation target may need it, and i think that if they do see weakness, if they do see the consumer pull back at this point, even if it's short-term, that could be another impetus to keep that expected inflation number from falling further, so, yes, you might see additional stimulus.
>> yeah, and, paul, this is probably going to sound a little distasteful because i understand the subject matter but we talk about stimulus, there's direct stimulus like q esmth but you also have remilitarization and if we start to see a ramp up in remilitarization in parts of europe, especially a major country like france, there could be actually a positive gdp uptick because of the money being spent, could there not? >> absolutely. in fact, when our travel team was in europe last month visiting some of these capitals, we heard more than once that they were expecting that just the refugee and asylum seeker crisis would probably prompt brussels to ease some of the restrictions on government budget deficits just in order to provide for the humanitarian needs of these people. so, yeah, military spending might lump in with that. >> paul and jack, we're going to leave it there. gentlemen, we appreciate you joining us today, guys. thank you very much. all right. still to come, more live coverage of the paris attacks. the manhunt for the alleged mastermind of them continues.
we'll give you the latest on that. plus, is now, yeah now, the best time to double down on u.s. stocks? we're going to bring you some names to consider. later on, we're talking privacy versus protection. it's a big question these days. should big tech do more to help the government fight terrorism or keep your information private at all costs? both sides of that story when "power lunch" returns.
lunch." today's headlines, clovis oncology making a major hit as the u.s. food and drug administration delays approving of the lung cancer drug. liberty global announcing it will buy cable and wireless for $5.3 billion. the stock is down slightly on this news. and blackstone is confirming it is selling gca services group to goldman sachs and thomas lee. lets get to dom chu for a market flash. >> shares of flir systems are up at their highest levels of the day. the stock is surpassing its 30-day volume average so it's trading heavily again perhaps in reaction to what's happening with security concerns all around the world given the tragedy in paris, brian, but flir systems one of the stocks to watch as it's a possible security play and it's still though down 14% year-to-date.
back topher to you. >> watching that, dom, thank you very much. well, flir systems is one of your next guest's top picks. let's bring in peter sabinski, he's in los angeles for the business aviation convention. peter, i will ask you the question i asked our previous guest. not sure if you heard this, but from around the world, not just here, france, wherever else, do you expect another round of increased militarization from the major powers? >> well, we certainly have started along that path already. the middle east is in the process of a pretty large-scale modernization of their militaries. you talk about the raytheon patriot system. it's gotten a second lease on life. aircraft are being sold there, bombs. it's a big push already, and i think the recent actions of paris will just perpetuate a cycle that's already started really. >> when you look at the companies you cover, flir is obviously one of them. are there other names you believe is in the space that
would benefit from this? it's not like we'll be buying more ships for the ocean. what types of products and companies will get the spending? >> yeah, that's right. i think to the degree that we, you know, ramp up the air attacks against isis, it's really along the margins. so it's fighter aircraft fair parts, jet engine spare parts, things like bombs, missiles, fuses. most of the defense companies i follow have exposure there but it's sort of just on the margins. i think, you know, flir is a great example because it's really unique. it does things like security systems for facilities, so you talk about soft targets, concert halls and soccer stadiums and whatnot. they have a unique capability to do both. electrooptical cameras and thermal images cameras. it's those things below the massive scale spending that are probably going to see increased focus as we go forward. >> yeah. when you look at a name like a harris systems or a cammen
incorporated, what are they bringing to the table? >> harris is communications. they are a global leader in not just military radios but also things like signals intelligence, not to go too far into that but they're very good at, you know, kind of finding out what the enemy is doing. that's something i think you'll see increased focus, increased funding. bomb fuses. they sell to scores of militaries around the world. these are kind of the things that for certain we're going to see more of, but i do think that like basic stuff that even civilians can buy in terms of facility security in light of what happened on friday, that's, i think, going to see a real focus area going forward. >> harris, flir, boeing a few names also in focus as well. peter skibinski thank you for joining us. on deck, wall street is still at work today, so we're going to walk you through the five big analyst calls that caught our attention. as we head to break, let's take a look at some of the major
names that may be in your portfolio, apple/alphabet, apple, microsoft, jpmorgan chase are all higher as is the dow. you're watching cnbc and we're back right after this. good. very good. you see something moving off the shelves and your first thought is to investigate the company. you are type e*. yes, investment opportunities can be anywhere... or not. but you know the difference. e*trade's bar code scanner. shorten the distance between intuition and action. e*tr opportunity is everywhere.
welcome back to cnbc, every. well, we are at session highs for the dow, perhaps on anticipation of greater qe either here or in europe. either way, oil is also recovering. the dow is up 173 points right now, and it is the oil names, the exxons, chevrons, and in the s&p a lot of other oil names which are leading the markets up. defense contractors also doing well as is netflix up 6.5%. even on a somber day like today, people keep working, including wall street. so we will, too. let us hit the five most interesting analyst calls of the day as we see them. we call it "street talk." melissa, ready to go? >> always. >> let's do it. stock number one, an oil name, clayton williams energy. roth capital's john white cutting his rating to a sell from a neutral. though there is some chatter that clayton williams could be bought, white says based on his conversations, the company is not looking to sell the entire thing. could sell parts of the company or some assets, but his target price is 40 bucks a share. the stock is at 5850 s$58.50.
whis says even if they sell themselves, he puts it around $44. that is still a deep -- >> ouch! >> i know. that would be a take under i think is the correct term on that. >> yeah, it would be. you know, the possible acquirer had been thought to be concho. that was announced november 13. it will be interesting to see what reaction concho shares have. eli lilly. their growth prospects through 2020 have improved meaningfully to use the language of the analyst after a number of positive pipeline developments. those include the drug for type two diabetes and a drug for psoriasis. the analyst is also optimistic about their drug for alzheimer's. the price target on the stock is 100 bucks. >> if you could get that in scramble, there's about three "x"s in that drug's name. when i saw that stock price
target, i thought they have to be the high on the street. boy, was i wrong. jeffries is at $120 a share. lilly has had a great run. it's trading at 36 times trading earnings. one wonders. the next stock another oil and gas name. we gave you a downgrade. here is an upgrade. anadarko petroleum. cowan and company moving them to their top pick in the space as well. they say the company was smart to drop the potential deal for apache and they add that while the stock trades in the, quote, penalty box in the near term, the sell-off in apc was overdone. the analyst sees material upside from here. $87 target. one of the highest on the street and implies 40% upside for anadarko. >> funny thing about the notion of apc dropping is that apache would reject the bid.
stock number four, walgreen's. credit suisse trimming the price target by 10 bucks. sticks with outperform rating. walgreens may be too optimistic about its ability to close the margin gap with cvs. they say there's not much upside to the stock at this point now that everybody thinks the front of the house is going to be upside. >> you know, we could be tough on analysts here on "power lunch," but i'll give guggenheim securities a shout out. on october 30th, an analyst suggested walgreen's could drift lower over the next couple months. the stock is down 8% from that call. so they did, indeed, drift lower. >> kudos. >> the last stock is always kind of the smaller under the radar name and today it's callidus
software. piper jaffray out pounding the table on the stock today. they note it has been trending higher, above the rising 40-day moving average. it implies just under 30% upside. stock is at $19.72. you can do the math on that. >> up 20% for the year, bri. >> under the radar name and with that "street talk" on a monday is done. coming up, the oil close is next and something a little surprising is happening in the oil markets today. what that is straight ahead. stick around.
hi, everybody. i'm sue herera. here is your cnbc news update at this hour. u.s. defense officials tell nbc news that french war planes launched another air strike today against isis targets in the vicinity of raqqa, which is the de facto capital for isis. that video that you're watching right now is the french fighter jets taking off on sunday. they are targeting isis' oil production infrastructure which is a major source of income for the militant group. the islamic group releasing video showing unidentified fighters praising friday's attack in paris calling on muslims in france to, quote,
ignite and kill soldiers and tyrants, end quote. one warned that an attack on washington is coming. life is slowly trying to return to the daily routine in paris as thousands of french troops patrol the city. schools and businesses are reopening after friday's attack but many popular tourist sites remain closed. but the eiffel tower which dimmed its lights in mourning following the attack has been relit in blue, white, and red, the colors of the french flag. the tower reopened to visitors monday afternoon and there was a long, long line around the block of people who wanted to be the first in the tower after it reopened. that is the cnbc news update at this hour. let's go back to you, brian. a beautiful sight to see it relit. >> that is beautiful. thank you very much, sue. appreciate that. the oil market set to close for the day, and it is a day that perhaps is surprising some people, right, jackie deangelis? >> absolutely, brian. you hit the nail on the head. it was a choppy session, volumes
were low. looks like we're going to close up about 2.5% but that was after we were negative for some time this morning. so this upside reaction is being perceived as somewhat muted. in the past when we've seen events like this, we've seen oil move more. here is what's different from the past. we have a supply glut and it's global. we have a stronger dollar, a weaker euro. this is probably going to persist, especially if the fed takes action, and also right now we know there won't be u.s. boots on the ground. that's why we were negative for some time, but towards the end of the session traders started to get a little bit worried because there's still so many things we don't know. so this is a wait-and-see are he action within the oil market to get more information. i would say this, there is some fear out there. there's caution, but it's certainly not panic. back to you. >> all right, jackie deangelis, thank you very much. well, as sue just showed you, counterattacks are being made in syria but what are the strategic importance of that region.
syria produces almost no oil. they got a couple lits btle bit here but they're important from a pipeline perspective. ironically have we become uneasy allies with russia for different reasons in the region? >> so if we are to any extent allied with russia, it's going to be a very temporary because we -- currently sharing some concerns about isis. >> they want to kill isis because they want to keep assad in power to make sure their pipelines get priority. we want to kill isis and remove assad from power so we actually both do support the destruction of isis, but are we aligned? >> i would not say we're aligned, and i think it's a mistake to think that we actually could be aligned with russia. look, they came in to support assad. their first hit was on u.s.-backed rebels because -- in the definition of assad anyone against assad is a terrorist. so that's everybody.
that's aqi, that's isis, and that's also the u.s.-backed rebels. right now the situation in syria is kind of scary from the standpoint that you've got an enhanced french presence now in the skies. you have russians in the skies. you have the u.s. in the skies. you have the arab nations, many of them are in the skies. the probability for an accident inadvertent, it's a very dicey situation, and it's just getting worse. >> how strategic is syria from a pipeline, from an oil, from a gas perspective? >> well, in 2011 before we left iraq, iraq government signed agreements with syria for three pipelines coming out of the north of iraq through syria. they were going to be a crude pipeline, a distillate pipeline and a gas pipeline. now, obviously everything fell apart with the arab spring and the deterioration of the situation in syria and then, of course, the deterioration of the
situation in iraq because those pipelines were going to go through the anbar province, which is now under control of isis. so, yeah, the preference is to have pipeline operations in syria but that's not happening right now. >> is there any reason to believe that isis is anything other than a bunch of murderous pirates? do they have a political goal? >> they want to recreate the caliphate. it's interesting, in -- before we left iraq, isi, the islamic -- >> i state calling them isis because it implies there's a state attached to them. i'd rather call them d.a.s.h. which is more of an insulting term. >> exactly. before we left militarily we had defeat ed isi. yeah, they could carry out spectacular attacks once in a while, but the level of violence had dropped down but because of the success of the united states
military in that area. okay. so now we leave. they were pushed out of iraq into syria which is in the middle of a civil war at that time, so they got this whole area to regrow, and, oh, by the way, abu baghdadi was in a prison in iraq but he was released as part of our exit out of iraq. >> and he's the de facto sort of leader, the spiritual imam of this group. >> exactly right. >> so we had him in a prison. we let him go, and now he's helping to rebuild this. >> yes. and we had the forerunner of isis defeated. so it goes to syria and because of the chaos and the lack of any kind of control in that area, they're able to rebuild, and this is what we're faced with now. >> burton hickok, thank you for your insight. we'll get you back on soon. >> wonderful. another commodity we're watching is gold. it was higher by 1% earlier today but it has since pulled back, pretty much flat right now. let's bring in jim steel from
hsb. good to get your analysis on this. as with any gold trade there are a lot of cross currents. you have to look at the dollar which many expect to continue rising. we have the euro which is weakening, it's at session lows begins the u.s. dollar. what's winning out here? why isn't gold getting any sort of a bid? >> i think you're right. i think in any safe haven bid the dollar is trumping gold because of a move into treasuries. the strength of the dollar and higher yields have been pressuring gold lower. in fact, gold has been weak ever since it was detected that the fed was shifting policy which is a good 18 months now. >> and there's no seasonal bid at all from asia? >> emerging market demand is becoming much more important than ever before. a good two-thirds of all the physical demand is out of emerging markets and they are price sensitive and below $1,100 we've seen a distinct rise in
chinese and indian and other purchases. >> so they're bargain hunters and at this level they might be buying. what's sort of the trading rake th range that you foresee because it seems it's going to be buffeted by the dollar impact and then there's going to be some demand coming into the market which could push prices higher. you're sort of pinned. >> that's a very good way of putting it. western investment demand is on the decline basically or it's selling whereas you have emerging market physical demand on the rise, and i would say any further declines below $1,100 say to $1,050 or even a little bit lower than that would see an increasing amount of maekemergi market buying and that's likely to buoy the market. >> okay. jim, good to see you. thank you. jim steel of hsbc. >> we're biggidigging in on som the big moves we're seeing in the currency markets. and later on a debate stretching from washington to
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41 minutes after the hour and keep in mind that valeant pharmaceutical shares remain deeply under pressure, and today reuters reporting that giant hedge fund omega advisers sold its entire stake in the company. now, it's not immediately clear when that sale might have happened, melissa, but still valeant off a new 52-week low on friday, down 21% this month despite their efforts to stem the selling. they have been unsuccessful. >> and interestingly, brian, the comments were made in an investor conference and they said, of course, we sold valeant shares at higher prices than they are right now. of course they did. exactly. we should note there was another hedge fund favorite sun edison which really burned a lot of folks and we learned on friday dan loeb's third point blew out of their position for sun edison which is under tremendous pressure, continuing today down 7%. a lot of these guys are saying i'm throwing in the towel, i'm not going to stick by what had been winning trades now that they have completely burned them. >> what do ackman do?
>> we have to see what the filings are? >> are they buying puts to hedge their positions? that's the idea behind a hedge fund after all, right, so to sort of mitigate losses. >> i get, it depends on the style of fund. some have very concentrated positions. if you look at some of ackman's holdings, i'm sure he has plenty of winners, but look at the short on herbalife, valeant isn't working for him. what kind of pressure do you also have on winning stocks where they might take positions to cover their losses. >> i would say a stock down 69% in 90 days is the definition of, quote, not winning. unless you're short. >> you would be right. >> there you go. it is time for "trading nation." let's take a look at the u.s. dollar. just about the strongest it has been against the euro since april. mark chandler, ari wald. mark, do you believe that 2016
will be the year of dollar parity with the euro, 1 to 1? >> we're in that karch and i have been bullish the dollar for a couple years. we finally got the move we've been expecting and i think we're not at the peak yet of the monetary divergence. that is next year the federal reserve is going to be raising interest rates while the ecb likely implements further qe. that divergence is the key driver of the capital markets. >> quickly before i let you go, one of the ideas of the segment is to help our viewers and listeners make money. what's a great currency trade involving the dollar or not right now? >> i think that the thing for international investors to do that is u.s. dollar based investors want to invest overseas. i still like the idea of some of the etfs that allow you to buy foreign stokts and hedge out the currency risk whether it's japan, germany, the uk. many of these etfs have come into the market in the last year or two and seem to be an interesting way to play higher european equities on a trend basis as the central bank continues to ease but still
divorcing that from the currency exposure. >> okay. ari, chart the dollar index, the dxy, for us. >> sure thing. i think here is a case where the charts confirm the fundamental view laid out by mark, and looking at the charts i think you want to start with the big picture. let's look at the dxy dating back to the 1980s and what we have here is a reversal of a 30-year down trend. so i think this does support further dollar appreciation over the coming years. i think the action we've seen over the last nine months, what i'm encouraged about is that it's allowed previously overbought conditions to recede and i think the more recent trend we are seeing in the dollar is marking a continuation of that upward move. a conservative upside target to 107 for the dollar. that would suggest potential parity with the euro. overall we're long the dollar. we think it goes higher. >> long dollar technically and fundamentally. thank you very much. appreciate that. >> thank you. >> all right. up next, we are talking tech and
terror. does silicon valley need to step up its role against the fight against terror or keep your private stuff private? we're digging in when "power lunch" returns. (vo) what does the world run on? 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.
want to get you caught up on the market because as of right now we're sitting pretty much at session highs. take a look at the s&p 500 up one full percentage points. particular strength in the energy stocks as we're seeing that rally in wti crude so we have names like exxonmobil up by almost 3%. netflix is also a standout in today's session up 6.5%. >> thank you very much. policymakers in washington out in force today calling on big technology companies to do more to help the government fight terrorism. cnbc's own eamon javers is in washington, d.c., working that angle of the story for us. eamon? >> reporter: this is a long-running debate here in washington between officials here and tech companies out in silicon valley over whether or not strong encryption, unbreakable encryption, should be available on the public market. officials in washington have been making the case for about a year now that that kind of encryption is dangerous because it creates a going dark problem, their inability to track
terrorists if they're using strong encryption. tech companies say it's basically every individual's right to keep their communications secret from the force here in washington, none stronger perhaps than senate intelligence committee vice chairman dianne feinstein. she was on the area on msnbc earlier today talking about the issue and the blame she thinking they have allows encryption out in the public. take a listen. >> i think this silicon valley has to take a look at their products. if you create a product that a lows evil monster to community indicate in this ways, to behead children, to strike innocents, whether it's at a game in a stadium, in a small restaurant in paris, take down an airliner, that is a bick problem. >> very strong comments there
from dianne feinstein. i've been e-mailing with folks in silicon valley that support advanced encryption. a lot of them are pushing back hard, wait a second, there is no indication that encryption played a role in the paris attacks. we don't know how they communicated. knowing that the understandings and global surveillance agency would be paying attention to their internet communication. that said, this debate is rearing up again today, and we're going to be more of this tension. it is an unresolved point of contention here, brian. stick around too. let's bring in jon fortt. this is a difficult topic. on a day like today, people will say do what you have to do to protect our safety. that's paramount, but you have to realize we have strong anti-wiretapping laws to prevent the government from coming in on us, and this is a debate that has very passionate views on both sides.
>> from the tech community's perspective it's like saying the government is saying leave your door unlocked. there are bad things that happen sometimes at night. >> and we'll go around and poke in. >> and people say anyone can get in. that's the argument against giving the -- also, you can't be too selective, you're going to give them to the u.s. government, every government is going to want them. another argument to be made is why not lock down the enter net like china that. if you really want to secure it, that would be a way to do it. this hasn't been a ground to half measures here. either you create a product that's not secure at all and everybody's communications are potentially open not just to government, but to hackers or you completely lock it down. >> eamon, there any way to really truly make it safe? to your point we could shut down
all these communication and bad guys could still go meet in a bar. what you see is the terrorists adapting. so if they know. being specific areas. . the encryption side of this argument is look, we have to allow americans and people around the world to communicate without the government being able to access it at all times. if you allow the u.s. government to have a back, hackers will -- the russian government maybe would find that back door. so their argument is this is a simple human right, but you saw that very tough sound bite from dianne feinstein, also accusing silicon valley of being complicit in the paris attacks there. you'll get a lot of pushback from silicon valley over that. they revent that kind of rhetoric. >> and the hacker group anonymous putting out saying they'll go after isis from a
cybersecurity perspective, attacking them perhaps at thafr own games. thank you both. up next, the big bet on america, two top money managers gives their favorite u.s. stocks, another look at the broad rally that's going on right as we speak. take a look at that sea of green for the s&p 500, which is close to session highs, up one full special are percentage point helped by apple up 1.3%. "power lunch" will be right back. ♪ every insurance policy has a number. but not every insurance company understands the life behind it.
take a look what bitcoin is doing now? there are several reports that isis had been using a bitcoin account in order to funnel money. we'll dive deeper into that at "fast money" and what the impact could be of the development of bitcoin's a digit at currency. we have a nice rally, stocks sneer session highs. michael musio, david nelson at, michael, first, are you surprised by the strength of the rally or the fact we have a rally at all? and we would -- we would -- on the heels of generally okay to slightly better than expected earnings numbers for the market to continue to rally between now
and the end of the year. >> david, i made a point tess top of the show that many managers say get used to it. it's not going to go away anytime soon. do you believe sadly this will always be priced to the market? >> this is the world we live in, brian. it's not surprising on that one. i thought we would come in today kind of weak. i think everybody knew airlines would be weak. everybody has memories of 9/11, and it will be money managers like myself that have have to focus on, and what kind of policies can we take on the in the future so prevent a disastrous hit to our portfolios. >> when the look at how you manage money, has anything changed in the last 32 hours? >> no, in fact we've been trading up the quality spectrum all years, trying to stay away from things that are highly levered to commodities, and
slowing growth and emerging markets. so. >> that's why you like pfizer lowes? >> yes, u.s.-based companies that are growing, have balance sheets, and are poised to do well in an environment in the sector they participate in are doing well. >> you know, david it's funny, we have guests on who need to talk about a little gold or cash, in this environment, do you almost need to own a bit of the defense creditors all the time now? >> i think it's a great place to put capital. not just because it works as a counter to terrorist attacks. we all know these companies go up, but these stocks are doing well, even before the paris event took place. many were near all-time highs. i think it's because investors understand that going into this election cycle, that regardless of which party wins, there likely will be increased defense spending going into the next
administration. >> david, we have to leave it there, guys, we do appreciate it. that does it for us here on "power lunch." >> thanks for watching. "closing bell" starts now and we'll see you, melissa on "fast money." >> see you then, brian. hi, everybody. welcome to "closing bell." i'm kelly even. >> and i'm bill griffeth. a nation at war. french president hollande declaring that appear while ago. hundreds injured and a country on edge. we'll take you live to paris for the latest developments in just a moment. >> the broader market meantime near session highs investors seemingly brush iing