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tv   Power Lunch  CNBC  November 18, 2015 1:00pm-3:01pm EST

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>> i want to see if they telegraph anything specifically about december in these minutes. >> i think it's going to be one of those things that causes the markets to gyrate massively if it's against what we think right now we're thinking consensus is moving in december. >> good stuff. see you tomorrow. all of you as well. "power" begins right now. >> gentlemen, thank you very much. welcome to "power lunch." along with mandy drury, i'm tyler mathisen. stocks rallying yet again, the dow and nas tadaq up for a thir session. the dowmanaged a three-day win streak in a month. will that change? >> a terror raid rocking paris. two dead, several arrests. so how do you stop young people turning to terrorism? we speak with one serial entrepreneur who is using the power of the private sector to address the root economic causes of terrorism and guess what,
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folks? he's making a big difference. >> and the company square is coming around later today getting ready to go public. pricing tonight. we ask is the unicorn party about to end. mandy? >> but we do start in paris where police hunting for the suspected architect of the terrorist attacks raiding an apartment, two are dead and several arrested. the french prosecutor is set to hold a news conference any moment now, so let's get to michelle caruso-cabrera who is live in paris. michelle? >> reporter: and we are eagerly awaiting that press conference, mandy, because we think they will get more details about the raid that occurred on this street overnight and the dramatic events that happened there. here are the details we know so far. seven are arrested, at least two are dead in what unfolded here. and i say at least because one french official spoke with the fashion assembly earlier today and he used that phrase as well, at least two are dead, and now there are local french media reports that a third body may have been found in the rubble. so perhaps we'll get more
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clarity on that. we also know for a fact that there was a woman in the apartment when the raid happened. she was wearing a suicide vest. she detonated it. that is how those two people that we know of died. what we don't know, did they get the individual who is believed to be the architect of the terrorist attacks that occurred friday night that killed 129 people. we know he was the target. is he one of the dead? is he one of the arrested? or did he escape? we want to tell you that the military response here in france continues. there was yet another round of air strikes in northern syria in raqqah. there was a raid of ten fighter jets which bombed two command centers in the de facto capital, raqqah. they're calling this operation shamal. so three nights in a row that fighter jets have pounded syria trying to get to the islamic state, that's the terrorist organization that's claimed
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responsibility for what happened on friday night. when we know more about what the prosecutor said, we'll let you know. >> thank you very much and we, of course, will be keeping an eye on that press conference to begin in just a few moments' time. >> stocks pushing higher now for the third consecutive day. the dow is up triple digits at this hour. crude oil briefly fell below $40 a peril. a quarter above that, down 42 cents or about 1% on the trading session today. bob pisani joins us now from the floor of the nyse. >> tyler, we have a little bit of a minnut mini rally going th. here is your three biggest sectors, health care, financials, and technology. when they're leading, the market is going to be up. they just had the biggest market weightings. it's been a while since transports have been strong. they're leading. railroads are very strong today. canada pacific finally made public some of the details of their offer to take over norfolk
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southern. it looks like the deal is worth $97. you see norfolk trading at $92 but up 5%. canada pacific, csx, kansas city all trading to the upside. more good news from the retailers. lowe's had good numbers overall, same-store sells up 4.6%. earnings 35%, that's not a typo, year-over-year. they grow their earnings all the time. look at the stock, $20 and change four years ago. now $72 and change. why is the home 'improvement sector doing well? there is more investment because homes are appreciating. i mentioned this earlier, we've got a mini rally going on this week. the s&p 500 after being down 3% last week is up 2.1% in two days. russell 2000 small cap lagging a bit but still up nicely. >> s&p is now once again positive year-to-date with today's rally. thank you very much, bob. target shares, however, are taking a hit.
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they're down about 5%. the retailer meeting its profit estimates, revenue comfortably beat, so what's going on with the stock and what's ahead? courtney reagan in minneapolis speaking exclusively with target ceo. hi there, courtney. >> hi, mandy. looking at the comparisons at least, target reported a very solid quarter, earnings in line with expectations, revenue and same-store sales slightly above consensus. the retailer also upped the end of the earnings forecast though gross margins did disappoint and e-commerce was a bit below expectation. i did sit down exclusively with the ceo brian cornell in a target store in minneapolis not far from the headquarters as he leads the retailer into the all-important holiday season. >> we had great traffic growth again in the third quarter. we expect that to continue in the fourth quarter and we spent a lot of time making sure we have great plans in place. i think we have a sensational marketing program. we're clearly elevating the in-store experience. >> 50% of target's toy sales
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come in the fourth quarter. very important this year, "star wars." 15% of the assortment is exclusive. cornell says it's already helped boost sales. >> it's really fueled some of the groewth we've seen in toys. we had a great third quarter, up 12% in toys. it followed a second quarter where we also grew 12%. we want to be a destination for toys for the holidays. >> while apparel sales came in below expectations, it still outperformed the larger industry at a growth rate of 3%. back to you. >> court, thank you very much. two other big movers, market movers that is, and we're keeping an eye on right now the federal reserve and the fight against terror. with us is james from the american enterprise institute. first, let's talk about the fed. the minutes come out in the next hour. that's backward looking but also might reveal some clues as to what to expect in december.
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do you think that the fed is likely to move in december even in light of the events in paris? >> i think they will. i think you can maybe even discount a little of the hawkish language because we've seen some so, so economic reports. i really don't think that the paris attacks as horrible as they are is going to play into it. i think if you look at some of the past attacks, they were somewhat similar. madrid, 2004, london, 2005, the economic impact such as there was was fairly temporary which is good news. societies are resilient. i don't think it's going to be that big of a factor. >> while the fed is getting ready to hike, it looks like the ecb is ready to stimulate even more. how do you think european economies will be able to handle and absorb the massive wave of refugees coming into the area? do you think we could turn this into a net benefit or will it potentially be a net negative? >> i think in the united states we can turn it into a tremendous net benefit. just one idea, we have a lot of people coming in. we have places in the united states that need a lot of
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people. i would think detroit. resettle people in detroit, already a very vibrant urban american community. >> they've already taken -- >> and they've done study on the syrian refugees where they have settled, very entrepreneurial. that sounds like a great match to me. >> how do you handicap the odds that when we get to december, i believe it's december 11th or 12th, when the spending bills are due, that some of those spending bills will include riders inserted by the majority party, riders that could include some sorts of restrictions on the entrance of migrants from syria? >> i think there's a high probability of that. i think the republican party on whole has sort of decided that at least better be safe than sorry at least for the near term. i think you saw speaker ryan maybe say those exact words. that's where the candidates are and that's where the party is. >> very quickly last question with regards to what the response of the western
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coalition is going to be to the terror attacks. do you think any western coalition can ultimately succeed if we don't have the largely muslim countries, you know, the arab states, middle eastern countries, and a strong islamic voice on board? >> i think that would be ideal. whether we see it or not, i don't know. the u.s. is still sort of militari militarially, we're the indispensable nation over there. if we don't act, nothing is going to happen, but having a broad, diverse coalition is a good thing to have. p., nice ton the house. >> and up next, phil lebeau is live at the l.a. auto show. what are you hearing? >> mandy, we're going to be talk with the head of audi of america, talking not only about the emission scandal but also about a very bold forecast for the sale of hybrids and electric vehicles. how bold? we'll talk about that when "power lunch" returns.
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welcome back to "power lunch." i'm mandy drury. fairchild semis soaring by 8%. the company being bought for $2.4 billion in cash. that's about 20 bucks per share. apple also rallying with the tech giant being added to goldman sachs' conviction buy lift noting apple is trading at
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a 30% discount to the average multiple. apple certainly helping the indices today. conagra also surging. the company splitting in two separate publicly traded companies. conagra's ceo will be joining us in the next hour of "power" to discuss what's behind that move. that's at 2:15 p.m. eastern. make sure you stay tuned for it. >> thanks, mandy. the volkswagen diesel scandal has many questioning the stability of the german company and it comesed at a time when ai sales in the u.s. are red hot, on the verge of surpassing 200,000 vehicles this year. phil lebeau joins us from los angeles with a first on cnbc interview with the president of audi of america. phil? >> thank you very much, tyler. i am joined by the ceo of audi of america. tyler was talking about this is an interesting time for audi and for volkswagen. let's start first off with the
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diesel admission scandal. you have some vehicles on stop sale. >> the good news is it's been business as usual. we're continuing our record sales growth so there's good demand for audi. to me it's not about sales or not sales to me. it's about these customers who are impacted and my responsibility is to make it right for these customers and make it right for the dealers and that's what we're going to do. >> making it right for the customers, how much have you heard back from customers who have said i'm frustrated and i'm ticked off i was lied to? >> i'm not going to lie to you. customers are disappointed, they are upset because they trust this great brand and they put their money in this great brand but really the response i'm setting, and i6 spo have spoken over 75 customers directly is i like this car, i'm going to continue this car, fix this car and restore my trust. we're going to fix the car and restore the trust. >> you have five models on stop sale right now. >> correct. >> how long before the stop sale is lifted, that you will be able to sell them?
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>> honestly, i don't know. we'll let the epa and the engineers hold those conversations but honestly no time frame. >> if there's no time frame, does it impact the record growth you have been having with sales this year? i know diesel is a small percentage but how much of an impact will it have? >> i think we'll be fine. keep our record growth. you're looking at 5%, 6% of the mix. a lot of that is suvs and if you look at our suv business we're able to accommodate that with our gas engines, q3s, q5s, and q7s. it's not about growth or sales, it's about making it right and restoring trust and that's what we'll do. >> let's talk about the forecast you're going to announce today specifically with the two models behind you there. hybrids and electrics, within the next ten years they're going to be 25% of your sales in north america. you areal have nothing right now. that's a very ambitious goal. >> that's correct. audi is not a half measure brand. when we go in, we like to do things right. i'll give you a similar example.
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we had zero suvs. now they make up 43% of the mix. when we get something right, we know how to do it. we feel this revolution is coming on electric and we're going to be ready for it. >> even with gas price b prics d to be rather low. >> and we plan at those scenario levels. if you look at the kilowatt cost of what it costs on a battery, those costs are going to go below a combustion engine. the other thing about this produ product, it's got three electric engines. it's going to drive like a crazy cool car. it's going to be a hot product and that's what will drive this. >> end of the year sales, luxury is always red hot. what are you expecting right now. >> i'm expecting record numbers. we have the season of audi going on as we speak. it's november and december. a agregreat ad campaign. we have one called blue christmas. it's an old father, waiting for his family to come. you think they're not going to make it, they have quatro, they
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make it, and the day is saved. >> playing on the emotions. >> a little bit. you have to. >> thank you for talking to us. 25% of the sales forecasted to be hybrids ten years out. we're counting down to the fed with the minutes of their last meeting set to be released and it could be a real market mover. at this stage we have a rally on our hands with the dow up by triple digits. do not go away. coming up, a new startup for retail investors. >> we've partnered with an exclusive group of lead investors who not only share their investment rationals but also back those investments with their own cold, hard cash. >> i'm concerned other brokerages could add these transparency features, too. >> would the panel be in or out? stay tuned to find out. you pay your car insurance
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whyour boss?ork for? yourself? your family? our financial advisors are free to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird. we are monitoring a news conference where a french prosecutor is holding a news conference to answer questions about the investigation and certainly in light of today's raid that left at least two dead in the paris suburb of st. deny. unknown is exactly who was either arrested or killed in that raid. as soon as we find out more, we're monitoring the translation, and we will bring that to you. mandy? >> thank you very much. it is time now for today's
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"power pitch" where one entrepreneur has just 60 seconds to convince a panel that his startup has what it takes to be the next big thing. hi, i'm saleem khateri and i'm the founder of instavest. we believe access to winning strategies should be for everyone, not just the elite few. we partnered with an exclusive group of lead investors who not only share their rationals but also back those investments with their own ocold, hard cash. after you had made an investment we track your purchase so when the lead investor sells, you automatically sell, too. instavest launched in march of 2015 and we have grown 10% a week since inception. we're on track to do over $300,000 in sales in only our first year.
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we've raised $1.2 million in seed financing and are proud to call y combinator our first investor. >> now let's meet the panel. on set ais alicia syrett, also christine duhaime. she advises fin tech startups. and in seattle is nat burgess. previously he was with the enforcement division of the s.e.c. a lot of experience there. saleem, you're in the hot seat. >> how do you incentivize the joe average consumer to join your platform and want to invest
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with you and likewise how to you incen incentivize the lead investor to stay. >> people don't know where to invest and when to get out. for the average investor, that's something we bring to the table. in terms of having the lead investor continue to work with the average investor, the lead investor does exactly the same thing that they're already doing but can make more money doing it because they're receiving these tips. >> nat? >> these discretionary tips, when they start to add up, is there a risk that the enforcement division will recharacterize those as performance-based fees? >> one of the things we're careful about is to make sure those tims are actually 100% voluntary and so as long as we're doing that, then there should be no issue. >> alicia. >> i saw the brokerage you worked with pays you $160 every time you bring a new member to the platform. so how do you respond to people that say this is not really a standalone business. this is a feature you add on to brokerages that helps them increase their number of members
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and also their trading commissions? >> one of the things that brokerages are very focused on is acquiring customers. brokerage customers are very, very sticky. that's one of the reasons they're able to pay a little bit of the customer acquisition cost to us, and we believe that day trading is not actually good for the long term but we want brokerages to actually acquire those customers so they can trade over a long period of time. now, if we couple that with making good investments that have analytical rigor behind them, it's a win/win situation for all of us. >> how do you propose to make money and how does that tipping system work into the revenue mod snel. >> right now we're making $160 to $500 per initial deposit and then we also take 20% of the tips, so a transaction fee on that. >> nat, another question to you. >> this platform seems ripe for pump and dump schemes where an influential investor recommends a microcap, people pile on, it
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doubles, and the person making the recommendation makes the sale. >> we don't allow people to trade on otc and that eliminates 85% of the risk right there and then the third piece is we obviously have these disclosure and folks have to hold for a period of 21 days. >> okay. we all heard what saleem had to say. it's time to decide if you are in or out. alicia. >> so i love the idea of building a community, a very active community of involved traders. and i love the transparency features where someone has skin in the game and you can see the dollar amounts and they're trading when they get in and when they get out, but i'm concerned other brokerages could add these transparency features, too, and i'm concerned maybe the lead investors don't stay on the platform when they get really good. so i love the features but, unfortunately, on the business side, i'm out. >> what about you, christine? >> i love the tipping future. i think studies show people tip
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more. you have a chance to earn more money if you're a lead investor so i'm in. >> nat, you have the deciding vote. >> so you guys have figured something out here, this recommendation engine, this exchange of information. it's potentially very powerful and the s.e.c. problem, even if they came down after that part of your business model, you would still have a great business. so i'm in. >> we've got two ins, one out. sale,m, what's your reaction? >> i love it. i'm pleased with the feedback and i'm take it. >> best of luck. we look forward to hearing more about your progress. thank you to saleem and to our panel, alicia, christine, and nat. what about you, are you in or out on instavest. tweet me @mandycnbc and for-mile-an-hour on "power pitch," visit powerlunch.cnbc.com. >> all right. inside the fed's head. counting down to the minutes of the next, the last fed meeting. the minutes go backwards, folks. it could be a real market mover.
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we'll get the minutes in a moment. stocks rallying ahead of that release. we'll have the latest from paris when "power lunch" continues in two minutes' time. an up day for the industrials. up 150 points. this bale of hay cannot be controlled. when a wildfire raged through elkhorn ranch, the sudden loss of pasture became a serious problem for a family business. faced with horses that needed feeding and a texas drought that sent hay prices soaring, the owners had to act fast. thankfully, mary miller banks with chase for business. and with greater financial clarity and a relationship built for the unexpected, she could control her cash flow, and keep the ranch running. chase for business. so you can own it.
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at half past the hour we go back to michelle caruso-cabrera who has been monitoring the press conference being delivered by a french prosecutor. michelle? >> reporter: he just finished. he did the no answer the burning question of whether they have the suspected ringleader. they did say that saleh abdeslam was not among the individuals for sure so that manhunt is still under way. he increased the number of people under arrest. eight people in custody, seven men and one woman. he said that the building was collapsing and it was slowing down the search of the building at this point and we should
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highlight to you that still a black nof behind me there are still police officers in there, there's still crime scene investigators in there. and ten minutes ago we saw the bomb squad go by. five minutes later there was a small explosion of some sort, perhaps they have detonated something they found inside the building, but it was -- it shook the neighborhood and everyone went running. so something definitely going on back there, but once again the french prosecutor not confirming whether or not they have gotten the architect, the man they believe is the architect of the friday night attacks here in paris that killed 129 people. definitely confirming abdeslam is still on the run and there are eight people in custody, seven men, one woman and the condition of the building must be very bad because they are slowly -- they had to actually bring in people to reinforce the building so they could continue to search it. he said in part they had reinforced the door so that when
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the french police arrived and tried to break it down, it was incredibly difficult to do so and that gave the individuals who were inside more time to prepare their counterattack against the police officers. that may explain why we heard so much shooting on those early videotapes from when the raid first began. tyler and mandy, that's what we have so far. if we get more information, we'll bring it to you, especially with what is going on behind us here about a block and a half behind us. >> all right, michelle, thank you very much. a continuing and developing story over there in the paris suburb of st. deny. let's check on stocks with bertha coombs at nasdaq. >> the nasdaq back above 5,000. this is the rally that large cap led, really led by apple and amazon today. responsible for a third of the gain. goldman sachs upgrading apple saying the service revenues are growing. chips today are mixed. this is what we used to see when you had an acquisition.
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falling on a $2.4 billion bid for fairchild. qualcomm a bit of a drag down on some potential antitrust fines in korea. biotech is up for the fourth straight significance. it's projected global drug spending will rise 30% over the next five years to nearly $1.5 trillion. $200 billion of that just on hepatitis c drugs like those from gilead sciences today which is one of the big drivers to the upside. last quarter's big drag biotechs are up about 10% quarter to date. as are chips and big cap tech on the nasdaq. >> thank you very much. stocks are higher since the paris attacks. the dow, the s&p, and the nasdaq up about 2% since then. does this mean there is support for a year-end rally? with -- kate, let me start with you. the s&p with today's rally is positive year-to-date but we've crossed that unchanged line.
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i think about 17 times so far this year. only six weeks to go before the end of the year. what does it look like? >> i think it looks bumpy because we have several big events between now and the end of the year, but probably up a little, not dramatically because i think a lot of the rally that we normally see at the end of the year has already happened in november. >> right. >> it's not a bad environment for investors, but it doesn't say expect this to continue through december. expect some choppiness. >> and does that include a rate hike in the middle of all that? >> well, it could be. we have the jobs report coming out before then, and i think we will see the fed move if we don't see anything that deters them. we were in this situation in august and they didn't move in september. if there's anything that says don't predict the fed, it was that. >> what about you, david, what do you think the next six weeks look like? >> mandy, i think six weeks is always a short time frame to analyze things, but one other thing i would point out besides the fed is that as we go into the first quarter, we should start to see earnings growth
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reaccelerate again on the top line. s&p 500 earnings should start to grow again. i think that's a big change in the market and market psychology. the markets could begin to anticipate that, so i think stocks could move higher. again, six weeks is a short time frame to estimate a very precise number but i do think the outlook is favorable. >> david, i'm particularly interested in your call on energy which you upgraded at the end of june, and yet i think we've had something like, you know, a couple of dozen of defaults already this year. there's the likelihood of further failures and defaults in the energy sector. why do you still like the sector so much? >> it comes down to a couple things, mandy. in terms of valuation, if you look at price to book, the sector is the cheapest it's been relative to the market in about 40 years. so i think that the degree of pessimism and skepticism about the oil sector or the energy sector is quite high. and some of the defaults that you mentioned are part of the healing process. we need to see some of the weaker players beginning to
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withdraw from the market. that's going to lead to a reduction in supply and we're beginning to see that already. so we do think that as the oil markets get back into better balance, that's going to come through, continued reductions in u.s. supply, a leveling out of opec supply, continued growth and demand, i think you can see energy stocks a bit higher as we go over the next 12 months. >> and sorting the sheep from the goats, we know the strong from the weak within the energy patch. you like schlumberger, the largest oil services company in the world. jo a >> and especially because it operates more outside the u.s. than in the u.s. where we expect to see more production cuts. it has a dividend yield and we expect to see that continue to grow unlike some of the majors. so valuations are attractive. while we don't see oil prices rebounding anytime soon, we also don't see them dropping a whole lot more, and that says to us now is the time to start to add
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energy to your portfolio because it is unloved and it is attractive. >> and i want to correct mids, it's down about 9% this year. >> i was surprised when you said it was up. >> i'm sorry, down 9% this year and oil dropped below that $40 mark. thank you for joining us. and check out powerlunch.cnbc.com to see another company that kate says is staying connected to consumers. that is powerlunch.cnbc.com. ty? >> all right, thank you very much, mandy. square prices its ipo tonight. there has been a lot of talk about the uniforeicorns as thaty ending. kevin knows quite a bit about it. welcome, good to have you with us. >> thanks. >> let's start with square. ipo valuations. is the party over? is there a bubble in tech that may bursburst? >> there is no chance of there being a bubble right now. the definition of a bubble is when a couple years from now you realize 80% of the sector has
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disappeared. it happened in 2000. there's no chance of it happening today. what you will see among 20 companies that are valued at a billion dollars a day, do i think one or two will go bankrupt? absolutely. and i think there will be two or three that will end up being worth $10 billion. >> but no risk -- because these are real businesses. >> they're real businesses. >> as opposed to what was going on in 1997, '98, '99,,000. >> i was on this show 2 1/2 years ago, the day after linkedin went public. the question for me was doesn't this prove there's a bubble. it's trading at $75 a share. it's a crazy valuation. today it's $240 a share. and the business went from $800 million to $3 billion. so we're going to see a bunch of examples of that, of fundamental growth and then we'll have some companies that don't do well. >> let's talk about one of them whose stock market valuation has gone the other way and that is twitter. what needs to happen for twitter
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to get its mojo back or is it a company that will be subsumed, bought by somebody else. >> so twitter just needs to keep focusing on product. i think everyone in the tech industry feels like they have not executed in improving the product as well as facebook and other companies. so that's an internal operational question, and hopefully jack can do that. they have some very talented people. enormous number of people use the company, use the product. there's real value there. we will debate whether it's a $10 billion company, $20 billion company, a $30 billion company but it's a colossal success. >> there are there is many mergers taking place? fairchild, there have been a passel of them in lots of different pockets of technology over the past two months. why now? >> i think that in almost every industry people are feeling either threatened by startups or opportunities. they need to get either bigger or better because the rate of change is so high.
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no one -- there's hardly any ceo i see from any industry who thinks industry is going to be the same ten years from now as they are today. as a result are they moving fast enough and so people are taking some steps and they're buying or selling. >> let's make a bit of a left turn to one other area i know is very, very dear to you and that is your involvement with the human rights watch. >> yes. >> obviously there is a human rights and a refugee crisis coming out of syria. i'm told that you had family in paris. >> yes. >> happily everyone is okay. >> yes. >> but your family knows people who -- >> absolutely. >> -- were brutally affected here. what do you think can happen, needs to happen with respect to this humanitarian crisis that is affecting hundreds of thousands people in the middle east, most especially in syria but also iraq. refugees coming into europe, refugees coming into the united states. what needs to happen, what is the humane and practical way to handle this? >> i'm very concerned.
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there's no question that we need to make sure from a security point of view that we're doing everything we can to protectour cities and our countries. the vast majority of people who are trying to get into europe are people who are fleeing the things that all of our ancestors fleed at some point and those people came to the united states and contributed and syrian refugees want to do the same thing. i'm worried europe will clamp down the borders right now, run with two or two examples of a someone who did a bad thing. we don't clamp down our borders when a christian person in the united states end up being a mass murderer. we say that's a one-off case and so we have to balance those two and i'm very concerned about that. >> kevin ryan, thank you very much. we're happy your family and connections in paris are good. >> thank you. >> thank you, kevin ryan. coming up, what can we do to create a long-term solution in the middle east? we'll talk to a person who says
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welcome back to "power lunch." hundreds of thousands of refugees mostly syrians making their way across europe. the united states has promised to take in thousands, but what does it really mean to take in refugees? dena met with a syrian refugee family in new jersey and you gave us incredible information yesterday about the vetting process. you met with this family. what did you learn? >> first of all, the federal government when the family first arrived really bares most of the cost, right? this family got to the airport and there's a very big push to try to get them back on their feet, to really try to get them employed. they got about $925 once they arrived to the united states. doesn't seem like much but it covers clothing and shelter, covers food. that man was able to get a job
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almost immediately working at a local bakery where the owner actually spoke arabic. so they were very lucky. the state department tells us that generally a person gets a little over $2,000 to cover for all those costs. this year alone the state department allocated about $185 million to the nine resettlement agencies responsible for caring for the families, for really trying to find them work. that's a top priority. once they get to the airport, they get a lot of forms and one of them is the employment authorization forms. >> those are the immediate costs. what about ongoing costs a family might have to bear like health care? >> that's a great question. one of the representatives from the resettlement organization takes the family to social services where they apply for medica medicaid. medicaid is only good for up to eight months but every situation is fluid. i want to underscore the fact that once the refugee gets a job, all those benefits go away. so when he or she gets the check, the benefits go away and
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they're expected to pay taxes like anybody else. >> very quickly, what about the language issue? was there an agency that helps them get started learning english? >> yes. they all have esl programs and not just the parents, but the children as well. remember, the children can't speak english. the family i met with yesterday had a 4-year-old daughter and a 7-year-old boy and they all go to take english lessons and the father is learning a little more quickly than the others because he has to work but they do try to get them into places where there are communities that speak their language and can also teach them as well. >> thank you so much. great investigative work. tyler, over to you. >> already, mandy. that is the refugee side of the problem. what can we do, what can we done to improve the situation in syria and other countries that is forcing people to leave? lets braing in robert frank wit a special guest. >> wealthy philanthropists are trying to find their own solutions. r ron bruder is an entrepreneur and he used his millions to
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launch a not for profit called education through employment. thank you for joining us. >> pleasure to be here. >> what we heard after paris is a lot about military solutions and intelligence solutions. is there a better way? >> i believe there's only one way, long-term, and that one way is to find the opportunities that exist and link these kids to jobs. without that you're not going to have a stable society. without that you're not going to move forward and have them integrate. to me the key in the middle east as well as globally is youth needs to find their home, their economic home. they need to have the pride, they need to have the opportunity to marry, to get children, and to become a powerful member of society. >> we have heard some economists say economics are not the toss of terrorism, that it's not the results of poor jobs or a poor education, that, you know, this guy in belbelgium, the mastermi
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went to a good catholic school, came from a fairly affluent family. what do you say to those who say it's more complicated than economics. >> it's a matter of integrating the youth into society. the only way you can do that is to link them to a job. give them the training that matches the needs of the labor market. >> and how many jobs have you created? you have offices throughout the middle east. how many jobs so far? >> we've trained about 32,000 people. we've been doing this for nine years. >> now, and philanthropists out there looking at this whole terrorism, immigration morass we have in europe right now in the middle east, how can they put their philanthropic dollars to work right now. >> i think they can do things that have tenable results, that deal with the problems that these refugees have, that integrate. the most important thing i believe is to integrate them into society. the most powerful way to do that is to find a job that gives them the faith, the pride, and the ability to marry and have a family and move on.
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>> why so so many of the economies in that region, whether it is syria or iraq or egypt, why have those economies failed? have they been broken by someone? have they been made disfunctiondisfurntio disfunctional by corruption? what explains why these nations don't have better, more mature economies? >> there are many reasons, about you to me the key reason that we focus on is that there's a mismatch between what the youth are being trained to do and the needs of the labor market. for instance, in egypt, gaza, west bank, dubai, saudi, all these countries, the more education you get, the higher the unemployment rate is. the things you're learning are not relevant to the labor market. >> you're focusing really on job skills and occupational training. so, ron, thanks for your help and all you do. >> happy to be here. >> thank you very much. mandy, over to you. >> let's take a look at the bond market. treasury yields are higher at
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this hour. but where will it be in about ten minutes' time when we get the fed minutes? that's a good question. and the question we'll answer in about ten minutes' time because "power lunch" is going to bring you those minutes in ten minutes and 15 seconds. we're counting down. don't go away. when a moment spontaneously turns romantic, why pause to take a pill? and why stop what you're doing to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms
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welcome back to "power lunch." rick santelli live on the floor of the cme group. if you look at an intraday crb, you see it going down? we haven't seen these levels, yes, in 13 years. 13 years. november 2002. we know there's minutes coming out. to look at a two-day of 2-year they're elevated by several basis points. look at the long end in the form of a two-day of the 30 year. unchanged on the day. and the dollar index looking for nothing dovish at this point anyway is making new highs going back to the spring of 2015. "power lunch" will be back after the break.
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i'm brian sullivan. we have a huge show coming up. we are just minutes away from the minutes as the fed gives more clues about whether interest rates will be on the rise in december. oil briefly dipping below 40 bucks a barrel. the question now, can it hold that level or are we going
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lower? we're going to take you live to the nymex for the crude close ahead. and the american medical association has a message for prescription drug companies. stop directly advising for consumers. it's a $4 billion a year business and we'll talk about it. and bruce smith is in the house, nfl legend. we'll talk about his growing real estate empire. >> thank you very much, brian. as we continue to await the fed minutes shts letceutes time, we one of my fellow countrymen. thou do you think there's anything that could come out of the minutes that could change the way we're thinking about the future. everything is sort of going around that way and the markets are taking it in sprid. will we think differently in three minutes' time? >> i think we have to see confirmation that rate rise will be on the table for discussion next month. the commentary has been running
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that way in recent times. certainly from an australian perspective looking for confi confirmation of that long-awaited move. >> and do you think it's justified? >> you tick all the boxes really in terms of where unemployment is sitting, inflation is sitting, where the general economic picture seems to be, it's hard to justify interest rates near zero. >> the u.s. economy can't do all the heavy lifting in the globe. if you look at the world's second largest economy, china, so many of the asset classes have been trading around the theme of china slowing down. when does it hit bottom? >> when does it stabilize? when does it get better there? >> i think there are a lot of policy stimuluses being injected into the chinese economy. it's not going to return to boom economy anytime soon but certainly enough to limit the downside. we're expecting a better 2016. >> and something close to australia's heart, commodities. do you think we'll look better? >> the demand side looks better, limiting the downside there but a lot of the commodity story right now is about supply.
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a lot of new iron ore supply coming from australia to around the world. >> what's the number one global risk factor right now from your perspective? >> certainly from the australian point of view it's all about china. it's our most important trading partner. most important trading partner for the rest of asia as well and we're all part of that asian story. anything goes wrong, australia will be caught up with that. >> a lot of political struggles going on that certainly limb the effectiveness of policy. thank you so much for the global perspective. and that it is for the first hour. >> i feel like i'm interrupting newcom and gooligan. >> did you understand everything without subtitles. >> i did. a busy second hour is ahead. we'll give you a quick market check before we go. the dow as a placeholder, up 118, 116 points right now. up two-thirds of 1%.
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>> brian, take it away. >> can't wait, mandy and tier. you can see the dow up 116 points and it's a federal reserve kind of wednesday because the fed moments away from releasing their innermost thoughts from the last meeting. is a rate hike all but certain for december? >> we well, the dow is up triple digits. let's get to steve liesman in washington. >> most participants at the october fed meeting thought the rate hike conditions would be met in december. the committee intended in the statement to give the sense that the rate hike could be appropriate at the december meeting. they emphasized, however, no decision was made and the rate hike was contingent upon the economic data. some judged it unlikely conditions would be met in december. some thought the conditions had already been met. there were a number of participants, however, who argued against delaying a rate hike saying that it would show a lack of confidence in the economy, uncertainty in -- it
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would foster uncertainty in markets, and would increase the buildup of financial imbalances in the economy. participants generally agreed that when rate hikes do happen, they will be gradual and they said beginning rate hikes sooner would make rate hikes more shallow in the future. there was a lot of back and forth on jobs in the economy and global risks. some participants worried about downside risks to growth. you see that back and forth, doves and the hawks arguing. where is t whereas the center felt that global risks had diminished. there was a debate about what the right equilibrium interest rate is for the economy. that's the rate that's consistent with full employment and price stability and the staff interestingly estimated that the equilibrium rate is at
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zero. so the fed was not too far off and there's a lot of back and forth on that with some policymakers saying it was higher, some lower, but an assessment from the staff that the fed is not too far off what their equilibrium interest rate is for the economy right now. so guys, a read of the october statement when it came out pretty much being affirmed here, that the fed intended to send the signal that a december rate hike is likely appropriate but no definitive decision was made. brian? >> all right, steve. stick around. bring in rich global strategic adviser from pimco. when the fed says they intend to convey a message, that is a message. is a right hike in december all but a certainly? >> god forbid a geopolitical event but in terms of u.s. terms, i think they're determined to hike. >> when steve says they're data dependent, the only real piece of data we get between now and then is the november payroll
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number. we talked about that before and you said even if it comes in weak, that's probably not going to be a deter yent to a hike. >> they'll be inclined to smooth and average that and the average number will look good and fed researchers pointed out we probably need fewer payroll jobs to keep unemployment where it is. >> steve, would you agree with that commentary from rich, that really this is the fed saying we're going to do it, get ready? >> i think that's right. i think they're trying to lay the groundwork. i think they want to be sure the market is not surprised by this. we had dudley talking about that this morning. if you are surprised by a rate hike in december, you're definitely not paying attention. time for markets to wake up and adjust to the possibility of a quarter point rate hike. i also agree with the professor about the notion that not much is needed from the economy over the next month or so in order to -- for the fed to go ahead. i could see a jobs number that was down around 100,000 perhaps with the unemployment rate
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rising, being the kind of lower limit of something that might give the fed pause, but i should think anything in the 150,000 range with the unemployment rate steady or even declining is something that would give the fed the go ahead. a lot of that has to do with the inflation numbers we've seen where inflation has really stabilized, brian, and it's very easy to disaggregate inflation into these falling commodity prices and yet the far more important services part of the economy if you take out the energy and food section, the services part where inflation is 2.8% or 2.5%, pick your measure right there. so it really is showing the fed that they don't have a disinflation problem. >> hey, rich, i wanted to ask you, could the factor that puts off the table a december hike actually be the factor not in the minutes and not being talked about at this moment and that is the euro/dollar and whether or not there's parity? could that be sort of the wildcard as we proceed here? >> you know, that's a great point, and i think it's a subtle point because it would depend on
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how we got to parity. that would be a pretty big move in five or six weeks from here. i do think if we got to parity because of a geopolitical event, that we would all not want to happen, that that could derail the fed. just an appreciation of the dollar now i don't think will do it. i think it's a fed that wants to get off zero. they've had emergency rates for years. and we're not in an emergency. the signal is they're going to hike in december. >> we can argue the other side, could we not, steve, which is that the dollar has strengthened, the ten-year has gone from 2% to 2.8% and other things have happened because everybody in the market believes a rate hike is already coming and in effect we've already had the impact of a rate hike? is that a fair thing to say? >> i will be in the uncomfortable position of summarizing to the work of the person to the right of you. rich has really spearheaded this notion of the circular fed policy loon they're in, that they step forward and they say
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they're going to hike rates and all of a sudden because they are going to say this, the conditions deteriorate that allow them to do it. and so there is this notion, you're right, rbrian. the fed at some point has to, for lack of a technical term, suck it up and realize this is going to be an inevitable outcome of what it needs to do with his monetary policy versus what europe and mario draghi needs to do with their monetary policy. >> well said and thank you for the plug, but i think it does -- in december we'll be talking about not the hike but what is the liftoff path look like and that's really where chair yellen has a challenge. i think so far she's done a pretty good job of saying it's going to be very gradual. she and the committee are going to have to do more to explain that but i think they've laid the groundwork for the december height. >> let me chime in quickly that the fed is full of the minutes of the meeting or full of the comment that it doesn't matter wh enthey hike, what the fed
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wants the market to focus on is the path and it's a path that they insist is going to be gradual. and it's why i'd be looking right now at the two year because that's where the near-term path is best laid out. >> agreed. >> stick around for a second, rich. we'll leave it there but thank you for your insight. as always, we appreciate that. by the way, if you are concerned about the when, maybe the fed is not, december 16th, 2:00 p.m. eastern, be here. not for that. that's another great interview we have coming up. that's tomorrow at 8:30 a.m., that's steve's interview with the president of the cleveland fed on "squawk box." catch that, but december 16th is the next federal reserve decision day. that day does have a press conference. >> lets get a check of the market with bob pisani at the new york stock exchange. slight strengthening in the overall markets and a slight uptick in the financials but really not too big of a movement here. >> two points in the s&p, melissa. take a look, 2065 going in 2:00,
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2067. slight uptick in finances but not appreciable. there's two things, melissa, everybody wanted to know down here. first was, had the fed changed its idea about the global financial system? remember that pause, that concern they had back in september. what i heard steve say was the global risks had diminished. i think that's what he said. steve, i wonder if you could chime in on this. the other thing everybody wants to know is how they're going to communicate this, the discussion about the implementation to note. is it one or two and done? what i heard you say is someone had mentioned that starting sooner would make the glide path more shallow. is there any more guidance or comment about what the path might look like at this point? >> i think the importance of this, bob, is the places where the committee seems to agree, even the doves, that once the hikes happen, that the rate of increase will be shallow. and it's one of the main justifications, bob, that they use for beginning in december, whether or not the data is just exactly perfect. they're saying if they go in
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december, it's going to avoid this idea that later on they have to go steeper or at a quicker pace. >> so moving now would make the glide path more shallow. that makes a lot of sense, but there was no specific discussion about one and done or one and two and done? >> no. for that, bob, you have to watch the statement of -- summary of economic projections where they indicate all the fed members the glide path that they see. >> okay. >> hey, guys, i want to chime in just to let you know, bob, we're talking about a modest reaction in the markets. we're now at session highs with the s&p 500 just in the past couple minutes moving up, so we're up five points on the s&p from the release of the minutes. >> but i thought, melissa, that a rate hike meant automatic doom for the stock market and the dow would fall to somewhere between 600 and 700? are you saying that's not true? >> i don't know, when you bring in the leadership of the financials to the session, that certainly helps. there are a lot of people that believe with the sercht of a
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rate hike, that should be a good 24i7k for a lot of secotors. >> and maybe also the economy and savers. >> i think that's worth pointing out, brian. you've had an adjustment to the third quarter. we were at 1.5% and now we're tracking above 2%. you didn't have as much of an inventory connection. you will do two and change in the third quarter, two and change in the fourth quarter. nothing to write hope about but it isn't the slowdown that had been feared and you have consumer spending doing relatively well. you have the jobs rebound. so it's on a decent path and it's on a path that says to the fed we shouldn't be at zero. >> and starting sooner with the glide path more shallow, that's bullish for the markets. remember, what they're really worried about is some sudden spike in interest rates. talking about shallow glid path, that's bullish for stocks. >> thank you. bob pisani at the new york stock exchange, steve liesman. on a more serious note, let's turn to the latest out of paris. french officials say at least two people are dead, eight have been arrested after police raided an pardon me building in the north of paris.
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right now to cnbc's chief international correspondent michelle caruso-cabrera live with the latest. michelle? >> reporter: brian, that apartment is on this street about a block and a half behind me where police investigators are still inside. in fact, there's a bomb squad in there, and we listened to two controlled explosions thus far this evening as they continue to go through and search the house where they conducted this raid. as you said, eight arrested, one woman, seven men. no precise number on the dead, all saying only at least two at this point. what we don't know is about hamid abaaoud. police were specific saying they were not arrested. we don't know if they happen to be those who are dead. no clarity on that. they said they still needed to identify the bodies that they found. when police arrived, said the federal prosecutor, the door was heavily barricaded. he says that gave the suspects time to prepare their
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counterattack. when all was said and done, the s.w.a.t. team had fired 5,000 rounds. the fighting went on for a full hour. they have been searching the building slowly because, he said, quote, it is collapsing. the entire third floor is collapsing, and as they go through it, they are finding things that concern them. hence, why we're hearing the controlled explosions behind us. that's the latest we have so far. we're still waitediing to see i they can identify the dead found within the building and if that's going to give us any clarity as to whether they have located the mastermind and the accomplice for whom they have been searching ever since friday night, those terrorist attacks that killed 129 people across the city of paris. >> michelle, let's hope they got them. thank you very much. you stay safe, michelle. see you soon. on deck, a first on cnbc interview with conagra's ceo and chef boyardee boss sean con
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yolly. plus, why the ama wants to put an end to a more than $4 billion industry. and a very special guest today, nfl hall of famer and real estate entrepreneur bruce smith is in the house to talk about his path from the nfl to a burgeoning real estate empire. a lot more to do. stick around.
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a lot more to do.
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welcome back.
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the federal reserve releasing the minutes of their last meeting, all but saying to the market, hey, market, shaking you by the shoulders, we are likely to raise rates in december. steve liesman said if you're a market participants and don't know that the fed is likely to raise rates in december, maybe the market job is not for you. the dow is up 179 points. you might imagine many names are soaring. i'll give you a few names. trip adviser, tara data, and conagra foods which is, melissa, a little bit in the nus today. >> just a little bit. responding to challenges in the food structure with aggressive restructuring. they plan to spin off into two companies. they're rallying up 4%. joining us is sean connolly, conagra foods president and ceo. good to have you on a day like today. >> thank you for having me on. >> you will remain the ceo of
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conagra which will after the spinoff house the brands a lot of us consumer know, slim jim, rotel, hunt's, et cetera but you want to go after the trend of clean label, natural, gourmet, all that. is conagra more of a buyer or a seller in that label? >> first of all, i think for your viewers it might be best to point out if you step back and go back to the seven months ago when i started the job, i told our investors that if we were willing to embrace bold change we could unlock a lot of value. since that time we've been very busy. the first thing we did is bought blake's all-natural foods but then we decided we would devest our private brands business. we announced a $300 million cost savings project. we brought new talent in. we consolidated our business in chicago which will be our new head headquarters. >> awe'll always be hope to new
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additions that can modernize and enhance the portfolio. >> you're open to acquisitions. i'm asking because some analysts think there could be a tie up with pinnacle. you had worked with the pinnacle ceo on a potential deal when you were the ceo of hillshire brand. that didn't happen. but you're familiar with that company in and out. familiar with the management there. is that something you're exploring? >> well, that was a different point in time and it was certainly a different company. what we're focused on now is exactly what we announced today which is standing up these two pure play companies to unlock the value we know resides within each and we got plenty of work to do to do that. once we execute that plan, we think we will reward shareholders handsomely. >> ja that partners is chart of this change process. they have 7% approximately stake in the company. i'm curious at this point are you still in talk with them about continuing to unlock value in the portfolio that you will be ceo of? >> well, i'm in talks with most
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of our investors all the time. i believe it's critical to have an open dialogue with our investors. we're in listening mode often and we share our best thinking. we think our investors agree that they will be rewarded by creating these two pure plays which will unlock the value that we think is inherently within each. >> sean, every major input commodity for you is down in price. cattle, hogs, wheat, sugar, corn, whatever, you name it, also gasoline and diesel for transportation. how much is all of this, if at all, going to add to your profitability going forward? >> well, it certainly doesn't hurt when you experience some deflation, but the key that we're focused on is managing our business so that the centerline of our profitability can move north consistently over time and at the standard deviation around that center line shrinks over time. we'll have years where we're experiencing inflation, years where we're experiencing deflation. the key is we've got to continue to strengthen our portfolio so we've got more pricing power, we've got more fuel to drive
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stronger innovation and we have to navigate the turns whether they go up or down with a focus on the long haul. >> sean, great to speak with you. hope you'll come back. sean connolly of conagra. >> absolutely. we have some breaking news on the ipo of square coming up after the bell. kayla tausche is here. >> it looks increasingly like square will price its ipo below the range it laid out in filings two weeks ago. this according to sources familiar with the situation. it appears that large shareholders want a steeper discount on the stock for assurances that it performs well and advisers have been recommending a lower price to the company than expected. of course, when square first outlined its price range, the valuation then was thought to be conservative since it was a drop from the company's internal valuation of more than $15 a share which happened as recently as october, but investors have become extremely choosey when it comes to buying new stock
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especially for companies that are not yet profitable and in this particular case the ceo jack dorsey is shared with another company. they could push back on the vice to price below the range. we've seen companies do that. the final price will be decided after the bell with the first trade happening tomorrow but so far, guys, it looks like that price may come in below the expected price range. back to you. >> interesting news there on the square ipo and a very weak ipo market already. kayla tausche, thank you. well, we are about halfway through the final quarter of the year. so we're going to bring you some of the best and the worst investments you can make heading into the year. what to buy, what to sell or even go short. the dow is soaring, the fed likely to raise rates in december. we have a lot more to do. stick around. and the families who've supported them,
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we've got a full-blown market rally on our hands, even with the federal reserve all but slapping us in the face and saying it will raise rates in december. stocks are still up. imagine that. the dow is up 164 points right now. we've got nasdaq and s&p also up more than 1%. not every stock is higher though.
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in fact, qualcomm right now is the worst performer is the s&p 500. it's down 19% in just a month. i want to make a prediction, on tomorrow's show we'll have a what's wrong with qualcomm segment. with less than two months left in the year, what are some of the best and worst year end etf moves you can make? let's focus today with cnbc contributor jef kilburg and why are you despite qualcomm's woes a lover of technology? >> to add onto what we were talking about, we just saw with the fed, it's appropriate they are saying to raise these rates. we're looking at sectors. we really want to understand what sectors should prevail here. technology, we like this sector. we utilize a quantitative model to drill down on the s&p 500 ten sectors and then look at all 26 subsectors. xlk, we like to be long here to play this to the upside. however, we're also looking at some of the underperforming sectors.
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look at reits, with the rates moving higher potentially in december, reits will suffer. in vnq, that we actually want to short going into the end of the year because it's been a laggard all year. >> xlk, a big etf, but in one of our models, facebook, google, microsoft, and apple are 40% of this etf. so almost a proxy. does that bother you at all? >> no, it doesn't. this is the reflation trade. we've talked a lot about this. this reflation trade should help tech. it will put wind in the sails of technology. we like certain sectors. technology is one of them. >> xlk long, vnq the reit short or sell it if you own it, correct? >> yes. that's the behemoth. $50 billion etf and it has only about a 20% exposure to residential reits but we're looking at the commercial side of reits. a lot of the exposure out there was evident today in housing starts. the multifamily housing are coming down. a nice short. >> the leading stock in that
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etf. jeff kilburg, thank you very much. >> thank you, sully. >> for more segments like this with direct recommendations, you can go to cnbc pro and check it out. up next, more on oil, more on stocks. crude falling briefly below 40 bucks a barrel. it's above that right now. will it hold before the close? you will find out but only if you keep it here on cnbc, first in business worldwide. i'm here at the td ameritrade trader offices.
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too clean? sparkle. because it's a messy world out there. hello, everyone. i'm sue herera-here is your cnbc news update. in a news conference the paris prosecutor saying police raids this morning eliminated the terror cell from planning new attacks. he said the cell was ready to strike again. they're trying to identify those arrested and killed in the raid. house speaker paul ryan says the house will vote this week on a bill calling for a new standard of verification for refugees from syria and iraq and a pause in the program. he says house republicans had been working with democrats on that bill seeking bipartisan support. president obama called lawmakers' attempt to prevent
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the syrian refugees from entering the u.s., quote, political posturing and offensive to american values. this in a speech at an asian economic summit being held in manila. and gop presidential candidate jeb bush says the u.s. most commit ground forces to the middle east to fight the islamic state. that speech during in the citadel at south carolina. he also said that air power is essential but it can't defeat isis by itself. you're up to date. that's the news update this hour. jackie d., right, brian, coming up next? >> exactly right. we're going to take a look at oil. lets get to jackie deangelis because it didn't stay there very long, less than a cup of coffee, but we broke below $40. >> we did. very dice yes at the close moving back and forth between positive and negative. we finished slightly higher, $40.75. here is what the trader talk is
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right now. there are reasons to go lower. we dug into the inventory report. we got a little bit of a build. we saw u.s. production was essentially flat. imports were slightly lower, refinery runs were up. the fundamental picture pretty much still intact here. that api through us a off last night. the dollar strengthening well over 99 at this point. that's a reason crude could go lower and you could see some fluctuations as the wti price was changing as the dollar was changing itself. it will be interesting to ste where we go from here. definitely possible since we tested it we could go back into the 30s. >> thank you very much. it's time for "trading nation." what else to trade but oil today. we have stationy gordon and todd gordon. they say this is largely supply/demand but technicals important for oil as well. how low will it or is this finally the bottom? >> no, brian. the second chart will show there
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is continuation. first, let's look at a little bit of long-term perspective to see how low it goes. i think you will be shocked to hear this. if you look at the technical pull back 6 crude oil from the credit crisis collapse, we were up around $147, crowd traded down to $33. that's a 77% drop in crude oil. technicals say in a good solid pullback we should see an equal leg push in the current move lower. a 77% drop from the reactionary high up at about $114 puts this at $26. that's entirely possible in this environment of strengthening dollar and potentially a falling stock market in the near future. >> wow. very similar to the 2008 time frame. when you look at the options market, where do traders see oil going? >> they're not seeing quite the same pullback todd is seeing. i look at what the options are seeing, if you look at the crude futures they're suggesting that oil eventually does go higher.
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looking at the options specifically, the likelihood that we see a move below $35 by mid-january is 15%. it's really not a high probability that we're below $35. flip side, let's look for a similar 15% probability. it suggests by january we could be trading north of $49. >> okay. >> if i had to stay where we're really positioned, i would argue that the upside is much more likely in terms of the bigger moves to be up versus down. all that being said, we're not seeing a ton of positioning for any breakout on either side. not to say we can't drift higher or lower. >> options mildly bullish. technicals decidedly negative. that's why we do it both ways here. thank you, appreciate that. for more "trading nation" go to tradingnation.cnbc.com. you saw at the bottom, sun edison, sune, halted for single circuit breaker volatility. we'll give you the word when it
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resumes trading. let's stick with oil. exxonmobil getting a downgrade at raymond james. the analyst moving his rating on the stock to underperform. fancy way to say sell. that's from a market perform. he says while he expects oil to recover next year, exxon oil is less exposed to a recovery. we have five big analyst calls coming up later in the show. first, the nation's biggest doctors' organization going to war a bit with big pharma. why they're calling for a ban on prescription drug ads. plus, nfl hall of famer bruce smith in the house. we'll talk everything from his growing real estate empire to life after the nfl and maybe something about a school named virginia tech. who knows. "power lunch" rolls on. stick around.
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hi watson. annabelle, your birthday is tomorrow. i'm turning seven. what did you ask for? a princess. and a pony. you like things that begin with p. i like pink frosting too. will you have a cake? yeah. i was too sick to have one last year. the data your doctor shared shows you are healthy. are you a doctor? no. i help doctors identify cancer treatments. i want to be a doctor someday. i can help with that too. watson, i like you.
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take a look at shares of sun edison. it just reopened for trading after being halted for single stock volatility. shares are soaring by almost 12%. this looks like a lot of short covering going on today. sun edison just renegotiating some contracting with terraform. it means they could drop down the assets to terp. they get assets off the balance sheet which is a plus for sun edison. that's why you see terp sharing getting crushed in today's sessions. we had gordon johnson saying essentially he's still resolute in his sell rating but again today the big news is a take or pay deal with terraform. this is a very interesting development here as we did have a number of big hedge funders
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last week announce they were either paring back their positions in sun edison or exiting completely. i'm looking at it. i looked at the single stock circuit breaker. now it's trading again. this is a name that i can't figure out. you talk about it all the time on "fast money." i don't know why anybody would own it. i'm not making a judgment on the company. making a judgment on the stock and there are different things. the stock is all over the place. >> remember this was a stock that was over 30 bucks a share earlier this year. it had a lot of hedge funders in it. it was a top pick among the hedge fund community but the story started unraveling and there were questions about whether the company would be able to drop down the assets to the yieldco which had been also a big trend in the solar sector but again the latest news here, sun edison back open for trade after being halted for single stock volatility and that stock is soaring right now. the american medical association is going to war with big pharma. the group calling for a ban on direct to consumer description
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drug ads. meg terrell joins us with the details. it seems they're almost jumping in on the hillary clinton bandwagon. >> hillary clinton came out strongly about this talking about the high cost of drugs. this is another measure the doctors are saying are trying to curb the increasing price of pharmaceuticals. they're calling for a ban on direct to consumer drug ads. they're citing concerns that these ads stir up demands for more expensive drugs at the expense of less costly alternatives that have clinical alternatives. the u.s. and new zealand are the only countries that allowed direct to consumer advertising. the cost is $4.5 billion, up 30 approximates over the next two years. we reached out to pharma who said they can be very helpful for patients to be able to correspond with their doctors, to learn more about the risks and benefits associated with the drugs. pharma saying this is a good thing. however, drug companies have their own issues with these ads
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because they have to include minutes long warnings about all the side effects they've ever seen in clinical trials. they don't like them very much either. and hillary clinton coming out saying that she would take aim at direct to consumer ads as well. this is everybody coming multiple sidesed ed at these ad. nobody really expects any change here. >> it's getting a little more political. they're saying they will also monitor mergers and acquisitions and the impact on drug prices. is that the role of the ama. >> doctors are concerned about their parents' ability to afford drugs. they're talking about trying to increase the transparency of how drugs get priced. something that a lot of people are focusing on now so it is interesting. we're talking about mergers and acquisitions, consolidation. we'll see how far this goes. clearly this is an issue that will continue through the election.
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>> absolutely. meg terrell, thank you. brian? >> this is a big moneymaker. ? just the last two years, drugmaking ad spending has increased 30% to $4.5 billion, but are drug ads necessarily a bad thing? dr. arthur kaplan and dr. debbie numpi both joining us. dr. kaplan, both to you. why do you support the ama's i don't want to call it call but policy position? >> because i think basically direct to consumer doesn't give consumers information. it gives them advertisements, and those advertisements are skewed. i just watched an ad just before coming on here. it was about a minute long, 30 seconds of which were people prancing around with a bulldog and smiling at one another and holding hands. there's no information there. it's good-feel stuff. i would rather see $4.5 billion spent on medical research. let people go to the doctor. let the doctor monitor the pros and cons of drugs. present all the drugs, all the
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options, not just a skewed presentation that is really right neck to the toilet bowl cleanser. >> and doctor, you say there is a positive to the ad? >> i think we're all opposed to any false or deceptive advertising, but if the fda says it's safe and effective, i think pharmaceutical companies should be allowed to advertise that information. at least it will spark a conversation between the doctor and the patient. and on top of that, people don't always know what the newest developments are. if they don't know something is out there, they might not go see their doctor about it and so at least it sparks that kn conversation between the two. >> is there a demarcation line for maybe some drugs are okay or some drugs are not or maybe a minimum length of ad? would you change your position if that were the case? >> no, because i think the format is bad. i understand what dr. devi is saying about it may alert somebody to something, but, look, it's just a bad place to try and present information to
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patients. we have the internet, not like we're short on ways for drug companies to let the world know they have new drugs. nobody is closing the media. the advertising side is basically spin and it doesn't present all the options, all the substitutes. >> dr. devi, some of my friends who are m.d.s blame that some patients self diagnose and self prescribe. i can't keep attention, can you write me a prescription? doesn't that happen all the time. >> it does but we have to think about the people that could be helped at the end of the day. most of us try not to pay attention to too many 5d ads, but these medications can help certain folks and if they're not going to hear about them otherwise, that's an avenue for them. we might not want to hear how this drug functions during a family show, so some of those things could be tightened but these companies feel they should be allowed to advertise their products to the public and see who they can help. >> it's not when you're sitting on the couch with the kids.
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that's not when the time strikes. your points are well taken, dr. kaplan and dr. devi. it's beer, then burgers, then e.d. drugs. is that a shock to anybody? coming up after the break, more on this market rally. nfl hall of famer bruce smith is in the house? we'll talk about his growing real estate empire. there he is. we're back right after this. jishs you pay your car insurance premium like clockwork. month after month. year after year. then one night, you hydroplane into a ditch. yeah... surprise... your insurance company tells you to pay up again. why pay for insurance if you have to pay even more for using it? if you have liberty mutual deductible fund™, you could pay no deductible at all. sign up to immediately lower your deductible by $100.
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your next guest has a growing real estate empire, a new hotel on the way. he apparently was not too bad at the game of football. nfl hall of famer is bruce smith. 11 time pro bowler. founder and president of bruce smith enterprises. first off, a shout out to our coach. >> absolutely. this is his final home game of his career. his final home game of his career at virginia tech and we are all indebted to him. what a great job he's done for the university and for the community. >> okay. and you have done a great job at making money after pro sports which is hard to do, okay? and you've done it from the ground up. you and i talked a few weeks
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ago, i said how did you get involved in he will estate. you literally started doing grunt work. what was it like from going to be one of the best well known athletes on the planet to starting over again. >> i'm doing now. you have to have a great team. you have to have a game plan. and you have to execute that game plan. now, there are a lot of components -- >> you make it sound easy. it's not that easy. >> it's not that easy. >> all you've got to do is sack the quarterback. it's a lot harder than that. >> split that double team and beat the chip block as well. that's why you need that great team. everyone has to have it, the financial part of it. the whole design of it. and supply and demand and things of that nature. they all have to come together. at the end of the day, it's a project worth having. >> why real estate? >> i met a gentleman by the name of dan hoffler in 1993 for
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operation smile. we befriended one another, became very good friends. and in 1995, i invested in my first deal. two years later, we sold that deal, and it was very profitable. and at that point in time, started thinking that my career wasn't going to last forever. i started spending my off-seasons learning about real estate and how the deal was done from the ground up. >> what's your advice then to current players? because we hear all these stories. all this money, and then it's gone. quick. >> it's a horrible statistic among professional athletes. i think roughly 60% of all professional athletes. and i could be a little off. >> we get your point. it's high. >> it's extremely high. we don't invest our money wisely. we don't sometimes use our time wisely. we have to plan for the future. our careers are not beginnigoin
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last forever. we have to start protecting the resources and the money we're making while we're playing ball, and make sure -- i used to have this 80/20 rule. when i was playing, i would invest 80% of my money and i'd do whatever i wanted to with the other 20. >> wow, 80/20. i'll wrap it up with this. which is that leave us with some advice, too. not just about real estate or investing, but i'm sure -- and we talked to people on cnbc. some of them, the most powerful word you can use sometimes is "no." i bet people have come to you with some crap ideas all time. >> all the time. >> how do you say no? a nice guy. but you have to be like, no, that's a terrible idea. >> well, if you don't mind asking, i shouldn't mind saying no if it doesn't make sense. and i tend to look at it in these terms. don't lend someone -- or don't invest in something that you
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don't feel comfortable with walking away from at the end of the day. i think far too often we get involved with trying to help friends and so forth and so on and it doesn't work out. money and friends, when you're talking about lending money, typically, it doesn't work out. >> bills have a chance against the patriots this weekend? and what did you think of those all-red christmas uniforms? >> i actually like those uniforms. i sure did. i hope we wear them this sunday in hopes that we'll have a great performance again. >> thanks very much. >> it's a pleasure. >> and go hokies. a check of the markets here. we are continuing to see that rally. take a look. the dow is up full percentage points. financials still a big gainer, up by 1.3%. still ahead, the big analyst calls a need to be on your radar right now. "street talk" is up next.
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and small business saturday... is more than just a day. it's our day... to shop small at the places we love... with the people we love. for stuff we can't get anywhere else. and food that tastes like home. because the money we spend here... can help keep our town growing. on small business saturday, let's all shop small. for the neighborhood, the town, the home we love. on november 28th, shop small. the graphic said it best. we do it every day. first stop, goldman sachs, upping borg warner. they say it has "derisked a bit" and there should be a solid setup in the next year. a critical overhang by recently guiding down goldman's target. it's about 30% upside from here.
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>> it was a rough road for vwa. >> i'm shocked. >> currency headwinds. they recently are seeing improving signs of demand in china. that's why they're more optimistic about 2016. our next stock, gopro. downgraded gopro to a neutral. and then after the miss, downgraded again to underperform. the target today goes down five bucks to 15. in the past week, there's been more price and pressure on amazon in addition to a number of flash sales sites includinin zul zulily. >> it's been nothing sort of unbelievable. they're going to have to start calling the company go amateur. up next, pronai therapeutics. canadian based biotech focused on cancer treatments.
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crushed in the market. jeffries advising clients to stay the course. they recently met with management. the enrollment is back on track. it has good strategy. look at that chart. jeffries out defending the stock today. this is probably one of the poster children of the week ipo market. because it went public in july. and it's been trading below ipo price for quite some time here. it's been a tough slog for investors early on this. this is one that we've been talking about all show long. we were reopened. gordon johnson, the guy i remember who downgraded to a sell last week. the note today titled the nightmare before christmas. feared worse than anticipated. even more resolute in our
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subdued outlook. accelerating and $2 price target. he's not mincing words here, and he won't mince words tonight on "fast money" at 5:00 because we are talking to gordon johnson. a great day, as i told you before. negotiated these take or pay agreements. he says it's not going to make any difference when it comes to the liquidity picture and that is the concern of investors here. >> and to give gordon fair credit. i mean, he has been negative on many of these solar companies. been wrong a little bit, too, but negative on many of these companies for a long, long time. the one that is outperforming, it's had a little -- maybe he can answer why they're trading at such discrepancies, many of these companies. >> yeah. we'll talk to him tonight. i do want to take a check on the markets here. we are seeing the continuation of this rally after the fomc minutes were released. the s&p 500 up by 1.25%. the strength in the market is really seen in the financial sector.
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a rate hike in december would be a good thing for the financials who make their money off of lending and trading. that's where we're seeing the strength right now. >> it's net interest margin. >> we look forward to fast money tonight as always. "closing bell" starts right now. welcome to "the closing bell," everybody. i'm kelly evans. >> and i'm bill griffeth. rally day again. apple among the dow components after that bullish note from goldman sachs this morning. apple up 2.7% today, and is the best performer among the dow components. and then the market moves even higher after fed minutes were released last hour, suggesting that december could be the time for a rate hike. i read this on the wires, kelly. all ten s&p sectors are now positive on the days you can

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