tv Power Lunch CNBC November 30, 2015 1:00pm-3:01pm EST
jane live in l.a. we have three hours left in the trading day. we have ten seconds left. amazon, we didn't talk about it much, up 120% year-to-date. more room? >> i think there's more room. >> more room? >> maybe next year. >> let's talk about next year. >> that does it for us. good to see you. "power" begins now. scott, gentlemen, thank you very much. welcome to "power lunch," everybody. along with mandy drury, i'm tyler mathisen. the final push is on to meet year-end targets. are we setting up for a december rally or a december disappointment? and a potentially landmark kmps on climate change under way in paris. demonstrators hitting the streets. they want more and they want it faster. what are world leaders prepared to do? and shopping for answers. 'tis the season to compare shopping seasons. how is this one shaping up so far? we'll biff you tgive you the lat
card on that. the dow is off 49 points. nasdaq down 25 and the s&p 500 down about 6. modest moves but lower. we want to take a longer view as well with 11 months of 2015 in the books now. the dow or just a couple hours away from being in the books because it is still november 30th. my son's birthday, boy the way. the dow is down ever so slightly on the year as you will see there in a moment by about 0.4%. >> as for the nasdaq weighted towards technology has a nice gain of nearly 8% year-to-date. the small cap russell 2000, similar to the dow, a very small loss for the year. less than half a percent. so the major averages are looking for a second straight month of gains as we're sitting right now following the sell-off in september. the question is whether or not there will be a year-end rally. we'll join those market guests in a second when we get them. but in the meantime -- >> let's go to dominic chu. >> so here is what we got. we're watching shares of itc.
they were halted for trading on a circuit breaker, this after a bloomberg report saying the company could be looking to put itself up for sale. itc shares certainly a focus. they've reopened for trading now up about 8.5% on relatively heavy volume, but you can see here that move up to the highest levels of the day now coming back down just off a bit, but, again, on bloomberg reports that the company may be looking to put itself up for sale, guys. back over to you. >> okay. why don't we take another look at what the markets are up to. it's a bit of a soggy day here today with all of them starting out in what is going to be an incredible heavy week of economic data culminating in the big jobs report on friday. it's the last jobs report before an expected rate hike from the fed in the middle of the month. joining us, we have bill stone, chief strategist at pnc asset management and joe tannis. thank you for joining us today. bill, does the rest of the year look like to you and going into 2016? bull or bear at this stage?
>> you know, i think i'm a bull. one thing is december about three-quarters of the time it's positive. i'd also say in looking at history when you have the fed start to raise rates, stocks have generally been the vast majority of the times they've been good in the next 12 months and i don't see any reason that it should be any different this time. >> do you agree with that, joe? no reason to see any different this time? is it different this time, as they always say proverbially? >> i would agree with that, actually. i think that, you know, this has been the most anticipated fed rate hike in history, and to some extent i think investors around the world are just wanting the fed to just rip off the band-aid. you may very well get some type of a relief rally after that. let's not forget, despite the fed preparing to tighten monetary policy, you still have very accommodative monetary policy from other central banks around the world of course with the ecb being in the spot lalig later this week. >> we need to further the conversation to are they going
to be one and done? will there be strength enough in the economy or improvement in the economy to the point where we can have several rate hikes going into 2016 and then what will the markets do? >> i think you are going to see more rate hikes in 2016. i really doubt this is going to be one and done. let's be clear, yellen and all fed speakers have managed expectations in saying we're not in any rush here to tighten monetary policy preha toma tour to the point it pushes the economy back in recession. you have the labor market which is clearly healing. we have another jobs report coming out this friday which will further support that idea and as far as inflation goes, i suspect once the fed raises rates you're also going to start seeing inflation expectations firm up into the year ahead. i suspect you're probably going to see another three or four rate hikes in the year ahead. >> considering that cnbc viewers are always -- sophisticated global investors, bill, you can cast your eye across the planet and find the best opportunities? would you stick in the u.s. or find better opportunities in places like japan or europe?
>> you know, we still like the u.s., but i think you're right to point out both europe and japan. we think they do offer some real i guess opportunities, particularly if you have the ability to hedge the currency because i think the dollar certainly looks at least for the time being to continue to strengthen versus those two. >> indeed. it's been a very good day for the dollar. it's currently sitting at fresh 8 1/2 month highs against a basket of major currencies. thank you very much for joining us today. you can get more on powerlunch.cnbc.com to see how bill and joe are playing that possible interest rate hike in december. tyler? >> all right, mandy, the latest read on the housing market is out this morning and diana olick is looking at pending home sales figures. diana? >> tyler, we're really starting to see the effects of those higher home prices. after a strong spring, not so much energy in the fall housing market. take a look. pending home sales in october were basically flat. up just 0.2% compared to september. the street was looking for about a 2.5% gain, so that's a miss.
still up 3.9% from october of 2014 and september was revised up a teeny bit. sales rose the most in the northeast and rose just under 2% in the west, but they fell in the midwest and south. the south is now the only region where sales are actually lower, pending sales, compared to a year ago. this index, the pending index, measured signed contracts, not closings, so it's a forward-looking indicator for closed sales in november and december. these were home buyers who were out shopping in october which was way warmer than usual in most regions so you can't blame it on the weather. you may recall we got a disappointing drop in clothes sales in october. realtors, they are blaming high prices and low inventory. the number of listings in october was down 4.5% from a year ago and usually we see more listings in the fall but it is just not happening. higher prices are the culprit. you'd think sellers would want to take advantage but the problem there is they can't afford to buy that step up house or they feel like they can't find one. back to you guys. >> thank you very much for that,
diana. the imf just voting to add the u.n. to its basket of reserve currencies as expected. sara eisen is looking at the impact of the move and i think what's quite incredible, it has a greater weighting than the pound and the japanese yen even. >> absolutely. this is a big deal, even if expected. it is a vote of confidence in china's growing economic power and influence. the head of the imf christine lagarde saying china's currency, the rue wan will be added to th basket. it is an acknowledgment of china's many reforms it's taken to open its markets and economy and it's assent to economic super power. though the dollar is still king. it makes up about 41% of the imf reserve currency. 30% is the euro. 11% will be the chinese yuan and the japanese yen and british
pound making up 8% each. so yes basically china takes the number three spot in terms of the world's most important currencies. it is a milestone for china's effort to become a global power player and a safe place to attract investment from around the world though the imf did acknowledge there's still more work to be done on this front. the u.s. was a voting member of the imf, so the administration is officially on board, but, guys, we know china tends to be a political punching bag on presidential campaign trails, so you can watch for some backlash, mandy. >> i would imagine so. thank you very much for that. let's see how chinese etfs trading in the united states are reacting. what are we seeing so far. >> this move by the imf to include the yow wan is seen in general as a positive for chinese assets. some experts i speak to say it actually makes chinese assets is bit more attractive. deutsche bank writing that this decision will help boost the momentum for further reforms which are much needed for the economy. it's also expected to push china to continue liberalizing its
financial markets, a potential win for the banks. some of the chinese banks that trade here including bank of china and china construction bank. and it could also be an overall positive for the chinese equity markets which have been mired by concerned over its struggling economy, but the imf's decision again is a vote of confidence for the chinese central bank and its ability to deliver the medicine china needs to see a rebound in growth. there's a look at some of the etfs that trade here that track a basket of chinese stocks. >> thank you very much, seema. over to you, ty. >> thanks, guys. president obama in paris today meeting with world leaders trying to get every country in the world to agree to a binding plan to fight climate change. steve cedric is live in paris with the latest details. steve, let me begin by asking it's not just political leaders who are there but some business leaders as well. who is there and what is their role? what have they been doing? >> tyler, the key point is the governments of the world will ask citizens and companies as well to pay the money, to come
up with the money for a lot of the very expensive climate change mitigation issues that are going to come forward. so there are all kinds of business leaders here. perhaps the most notable, bill gates. he was here with a host of business leaders saying we've got to put some money where our mouth is. he's along with them put together $7 billion to basically haver r & d into clean fusion. he's hoping a lot of other business leaders will come forward. a lot of money is needed not just for r & d but for developing countries. there was an interesting side spat going on in paris potentially between the indians and the prime minister mr. modi and mr. obama. he said it's well for you to develop, but you've got to be cutting your climate issues as well. you have to be cutting your use of hydrocarbons because india is relying on coal going forward. the indians are saying the west
has had 200 years to industrialize and now we're being asked to do it without using coal, without using hydrocarbons. interesting spat between india and some of the developed nations as well. the other point about paris is we're only two weeks, tyler, from the devastating terroristic attacks that led 130 people dead at the bataclan and other places as well. a lot of people concerned about the security environment. this area is a u.n. secure zone so there's thousands of security personnel here but in paris over the weekend there has been some tension, some climate change protesters who weren't really allowed to protest given the state of emergency. they started throwing projek -- projectiles at the police and the police fired tear gas back. there's a lot of security surrounding 150 world leaders. >> steve, thank you very much. steve sedgwick reporting from
paris. shares of blue nile, the online diamond retailer, up nearly 10% over just the past month. the company's ceo coming right up. we'll see how he seems to be getting retail right while so many others don't seem to be. and if more and more shopping is being done online as all of the data show, what is going to happen to all the retail jobs in stores? will they stop hiring those extra holiday workers. you're watching cnbc, first in business world wooit. w wooit. i . . . . or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach,
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. welcome back to "power lunch." facebook trading lower after expanding paid parental leave outside of the u.s. all new parents get four months of paid timoff. intercontinental hotel trading higher after rumors of a potential takeover by chinese investors. this would be on the heels of starwood hotels acquisition by marriott. that happened earlier this month. and the brazilian mining compa company vale trading lower after toxic materials were found in a river. to dominic chu we go now. >> tyler, another one those lower here today, one industry group that's getting hit pretty hard is the biotech group. it's the worst performing group
in the s&p 500 so far today. all members of that group are lower. among the laggards, regeneron, celgene, biogen. one of the big etfs that track the biotechs, ibb, down about 2.5% at its lowest levels of the day. but remember, mandy this, was one of the best performing etfs over the course of the last month to date so perhaps a bit of profit taking here given the overall market. >> maybe a little bit of giveback there. thank you very much for that. it is estimated that more than 121 million people will shop online today in what has come to be known as cyber monday. online jewelry retailer blue nile is hoping to cash in. shares of blue nile are down about 1% today but they are up about 8% this month alone. so here first on cnbc is harvey cantor, the ceo of blue nile. welcome to the show. thank you very much for joining us today, harvey. i went on your website hoping to pick up a deal and i see there are lots of deals, 50% off or
more. how is your holiday shopping season kicked off so far? >> thanks for let me be here on cyber monday. we've had a great start, solid results so far from black friday through early this morning, and we're hoping to have a great run through the next three weeks but the next three weeks are really critical to sol lied idifying t quarter. >> it's engagement season, everybody is in the mood, people get down on their knee and propose, but i was wondering if you go online, how do you accurately pick out the right ring when you can't touch it, can't see the luster, the sparkle. i don't know. isn't it a bit of a risk to buy be a engagement range onliring online. >> there's no risk at all. anything you buy from blue nile can be returned for 30 days no questions asked. we'll ship it to you for free and anything you pick out on the website can be manufactured in
as little as one day and as many as five days and it's incredible value. there really is no better time and no better place to by than online. >> how much do you feel you're beating traditional retailers like tiffany. what's your growth trajectory and margins looking like? wroo >> we guided 0% to 6% and 3% to 5 force for the year. we continue to expect to grow as the customer continues to shift online which if you believe all reports today continues to be a theme in the market. >> talking of reports, harvey, i have to ask you about something that i saw recently that was a report about a company called diamond foundry. leonardo dicaprio claims to be one of the investors. they claim they can grow real diamonds in less than two weeks up to nine carats. what do you think about that? >> the way they think about our business most is continuing to bring value to the market. that's a different category of business but the natural stones coming out of the ground available at blue nile at 40%
below tradition jewelry stores is compelling. it's a demonstrably different experience than what you referenced. >> harvey, and i believe the single most item purchased this year was a $1.3 million engagement ring. >> that is correct. about a 7.5 carat stone in a platinum setting. a really beautiful piece. >> maybe you can even better that this holiday season. >> let's hope so. >> thank you very much for joining us today, harvey kanter. we are counting down the days to the event everyone is looking for. no, it's not christmas, it's the fed decision. there are 12 trading days until then. we'll describe the 12 days of fed-ness. yes it's a holiday. plus, which retailers did the best and which ones didn't do as well. the winners and losers coming up.
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exactly 12 full trading days left before the fed decides on interest rates and on the very first day of fedness, what does dominic chu have for us? >> i was told not to sing but if i would have sang it would have sounded something like on the first day of fedness janet yellen sent to me a pear trade in currencies. over the next 12 days we will look at 12 trades that have historically done well when
interest rates have tended to rise. they looked at the interest rate picture in the u.s. when we see rates rise sharply in the month leading up to a certain event, what happens with certain asset classes? our first one will be in the foreign exchange market. we'll look at all different kinds of them, currencies, commodities, stocks, bonds, everything out there. the first one is something in the currency market. while we have a euro symbol up there, the trade you really want to take a look at is what happens with the japanese yen because according to our data partners at kensho our cnbc pro team took a look at what happens when you see interest rates rise and then which specific currencies do well? against the yen, the dollar tends to rise by nearly 2% again in the month leading up to, again, these interest rate type events. when we see these type of tra rates move in this kind of fashion we look over the past ten years every single time we've had sharp rises in interest rates. but, again, if you look at what happens overall to the currency
markets, that dollar traded etf, the dollar etf, the uup, doesn't exactly hold true to that form. the dollar/yen might be one of the trades to look at in your trades leading up to what happens for the 12 days of fedness and janet yellen and the fomc. we'll do this every day for the next 12 days. the first one is currency. tomorrow we'll look at another asset class and what could be a winning trade if history holds suit. go to cnbc.com/pro. subscribers can get the full story over there. guys, back over to you. >> celebrating fedness. thank you, dom. the bond market and rick santelli tracking the action at thec me. >> hi, tyler. we're idling a bit in the tris ri complex. if you look at an extra day of 10s, yields are virtually unchanged. one basis point lower than we settled on friday. when you open the chart up, that really says it all. we zoomed up pricing what the fed purportedly will do in mid-december all the way up to 235 and we've been in a tight
range kind of diminishing some of the sell-off that push rates up but in a very lethargic fashion. it's all about foreign exchange. you heard dom. now, if you look at a chart of the dollar index, and this is very fascinating, if you look at it for -- since 1999, you can see we spent a whole lot of time above 100. once we went below it, basically in early 2003, we really never came up to test it again. this is hugely significant and with the news of the day, the imf and the yuan now in the basket, let's ak at a one-year chart of the dollar versus the yuan. the dollar has reached a level right around that anxiety that we experienced several months ago. that's all gone. but here is the interesting chart. let's go back to 2006. look at the same relationship. it certainly makes the run up of late disappear entirely. this is a chart to pay close attention to. remember, it's not about the world class economy. it's about the world class
export market and sometimes there's a difference. think economic reforms. tyler, back to you. >> all right, rick. very interesting chart there, 20% lower that would be against the yuan. gold is up but not enough to erase losses that have made november the worst month in a long time. we'll get the final gold trades plus more people are shopping online, so do retailers still need to hire all those extra workers for the holidays? are those jobs going to be gone forever? stay with us.
hello, everyone. i'm sue herera and here is your cnbc news update at this hour. u.s. officials are warning a terror attack in afghanistan's capital city of kabul is, quote, imminent, and are urging americans there to use extreme caution. the new warning comes two days after a suicide bomber unsuccessfully targeted a senior afghan official. a bus driver being charged with reckless driving after his vehicle overturned on a virginia highway injuring 34 people. the charter bus was full of
college students heading back from their thanksgiving break when it lost control around a curve. more winter weather headed to the already battered plains and midwest. forecasters say up to a foot of snow could fall in the dakotas overnight. and that would be the region's third major storm in less than two weeks. that obviously is the bus crash footage there. on a lighter note, who knew some birds, rings, and and paper's piping could cost so darn much? the value of the gifts featured in the 12 days of christmas tops $34,000. the most expensive on the list, seven swans a swimming with a cost of $13,000. that's the cnbc news update this hour. mandy, back to you. >> i'd prefer fedness to christmas now anyway. >> there you go. >> thank you very much, sue. final trades just crossing on the metals. let's go to jackie on the nymex. hi there, jackie. >> well, gold dipping near sick-year lows early in the session but rebounding a little
bit, around $1,065 at this point. we had a steep sell-off on friday. it was a little unexpected. part of it was technical and part of it were worries about a fed rate hike coming late they are month. it's a big week for gold because traders will eye the ecb and the jobs report on friday. the other metals a little lower, the stronger dollar the issue there. gold is bucking that trend a little bit. the dollar index over 100. we have copper seeing losses on the back of asian equities and the action we're seeing in the u.s. >> thank you very much. a big shopping weekend continuing with another big shopping day today. let's go to bob pisani for a look at some of the retailers moving in today's session. hi, bob. >> none of them are getting much of a boost. in fact, they're following a very typical historical pattern. let's take a look at some of the big department stores right now. most of them are down 2% to 3%. if you look at macy's, sears, jcpenney, 2% to 3% declines and this is what usually happens. over the last ten years on cyber mondays, what happens to some of the big department stores?
exactly what you're seeing. it's a practically perfect print. all of them down 2% to 3% over the last ten years. the s&p 500 down 1.2% and sears has been down ten years in a row on cyber monday. the other ones down 9 out of 10 years so this is very typical pattern. even if you look at the discounters today, they're also down as well. ross stores, tjxs and targets all down although not as much. why is this happening? the majority of the of the businesses don't do well because they don't have a big online presence and that's what matters in this kind of situation. small gains in some of the luxury stocks i would notice today. kors, ralph lauren, tiffany, some of the jewelry stores. flat to slightly on the upside so maybe some hope there. what's really moving is the people who sell online and nobody is bigger than amazon. amazon having a terrific day overall. earlier on it was actually on the upside a little bit. today it's on the downside in the middle of the afternoon, but, remember, amazon is up 116%
year-to-date. so that's the big gainer when you have most of those other retailers down 20% to 30%. guys, back to you. >> robert, thank you very much. so which companies will be this season's winners and losers? let's bring in matt boss, he's the top ranked retail analyst of them all. he's with jpmorgan. matt, welcome. good to have you with us. >> thanks for having me. >> as you look at this holiday season, i mean, all of the stores today -- the stories today are about how online kicked the backside of brick and mortar stores. is that the way it's going to go and are stores that are dependent on foot traffic going to be the ultimate losers here? >> well, it's a good way to put it. online clearly stole the show over the weekend. but not all that unexpected to be honest. you know, brick and mortar sales have been sliding. you've seen negative mall traffic really for the better part of last three years. i think the better way to look at this is really what happened
overall in november. it's been very tough from an apparel standpoint. the weather has been tough. you have tourism negative impact. some of the international events. we're definitely more cautious across pretty much all of apparel here. >> i see all of those big malls and strip malls and i think, boy, their days are numbered. that's my opinion. i'm not asking you to confirm it. if you had three stocks that you think are standouts positively, what would they be? >> so we look at it in terms of what is expanding, in terms of expanding pie categories. i think there's three areas. you have off price. within off price we think tjx is best in class. global model, expansion of square footage and market share. the second is athletic. you're continuing to see this trend. best in class in the athletic would be nike. again, nike and tj in terms of two expanding pie categories. the third, which is less holiday but more of a 2016 opportunity,
to me is the dollar stores and in there you have a self-help integration story which is dollar tree that sets up really well into next year. >> if you were looking at two or three companies that you think are going to have a tougher go of it over the next year, what would they be? >> see, that's where we remain a lot more cautious in the core apparel space. we have underweight ratings on both the gap as well as dillard's. one is a department store, one is mall-based specialty. i think it's the capacity issue that's impacting both. dill laard is an under investor the online. in the gap's case it fits into the heart of all these headwinds across apparel. most primarily capacity. what you're searing is online entrance, fast fashion, lower price points, and put it all together and it's a perfect storm against a retailer like that and there's a lot of others like them in the mall. >> where do companies like
macy's or nordstrom make their money? and the question really is do they make more money selling a shirt in a store or do they make more money selling a shirt online? >> well, it's a great question. so the pressure point in the model is really the infrastructure build out cost and so when you take a macy's, when you take a nordstrom, a lot of the up front costs have been made. so the infrastructure has been built. and so now it's really about capturing traffic and it's about capturing that sale. irrelevant whether it comes from online or whether it's a brick and mortar sale. the question then becomes, you know, is everybody's store bases set appropriately and that's where you brought up before this whole death of the mall thesis. i do think u.s. retailers overstored and i think that's something -- we had a note out this morning after meetings with macy's ceo and cfo, they're definitely talking to a smaller footprint longer term. and i think a lot of the guys in the mall are talking that way.
>> so very quickly my guess would be that the in-store shopper is more inclined toward an impulse buy. in other words i go there maybe with something on a list, but i pass something else and i'm inclined to pick it up and the online shopper may be less browse oriented. quickly, is that true or false? >> yes. so what you need for brick and fort yar is mortar is a treasure hunt. you go into tjx and you never know what brand is going to be there is you have to visit it often. that's the peril that's facing a lot of the mall-based departmentsters and specialty retailers is that need to be in the store. online favors the brands. it's a brand directed shop. i think private label, which is higher margin, remember, for a lot of these department stores, is one of the headwinds that i think going forward that people are going to have to deal with. >> my wife goes on a treasure hunt practically every weekend to home goods at a tjx company.
>> both steve and i were saying impulse line, you can do that online. click buy is incredibly easy. >> people who like this also like that and you go there. >> exactly. >> but i do think that when i go online, i have a mission and i'm usually looking for a single item and i go and pick it. when i go into a store, let's say i go into nordstrom and i see a shirt and then i see jeans i like and i'll end up -- >> but you're a guy. hunters and gatherers. we're the gatherers. we like to gather lots of things. my cart needs to be full at all times. if more shopping is shifting from in store to online, what is that doing to all the retail jobs? let's bring in steve liesman. do we have any hard data? >> can i gijust say we don't really know. the data we have is not
particularly good. the government is trying to capture the effects. even so it's not clear we're going to capture them all. i'll go through some of that. if you look right over here, you can see that the growth rates for department stores is actually negative on the year-over-year basis where as it's up quite substantially, near 8% year-over-year when it comes to jobs in e-commerce. i'll just say these e-commerce jobs here are just the jobs from companies that are labeled as e-commerce providers. it doesn't include the guys or the women at best buy that are working online. so they're not classified as one. however, come over here and take a look -- take a step back, guys. look at our online sales. you see there that the growth numbers are about 10%, 11% year-over-year versus again negative year-over-year comps at department stores overall. and you can see we're not capturing all of it. we're also not capturing let's say programmers, web designers. how about the extra guys at the
shipping companies that are employed there? however, we do know that the e-tail in general tends to be more productive. once you take care of the up front costs. they're not building out malls now as much as they're building out the online infrastructure. so in general we think maybe a few -- somewhat fewer, there is a shift going on but there's a catch. maybe there are fewer jobs. the jobs they have are better. if you look at the last chart here which is our wages. there we go, right there. you can see $17 overall in retail trade. $15 in general merchandise stores and $31 at e-commerce and growing better. >> what's the reason for that? >> why do they get so much? who would that include? programmers? >> i'm not sure. all that is in there. the average hourly pay for those online stores are higher, almost double what it is. >> but you don't have to be an economist like you or, you know, have fancy charts to see for example on black friday, i went to a brick and mortar store of a
big chain expecting to have to fight the angry hordes. it was completely empty. and there were only two cashiers. >> that store is too crowded, nobody goes there. >> maybe. >> that's exactly whats that. people avoiding it. a lot of online shopping that's going on. but it doesn't necessarily mean wholesale fewer jobs. perhaps some fewer jobs. the productivity in the online space is higher and growing in that area versus the department stores. >> i think what's happened is that the holiday shopping season has become so spread out over so many -- >> it's a month long. >> that this past weekend has lost a lot of its meaning. it doesn't start on black friday or cyber -- that's all -- >> it was a whole month of november sales. >> it's the whole month of november. it starts at halloween. it really starts on my birthday in september. >> i think that's absolutely right. i was amazeed to see -- i thought i wouldn't have to be bombarded by this stuff until after thanksgiving but it
started well before that. they're trying to capture the data in a good way. for example, this data right here captures most of the e-commerce stuff whereas that one only -- >> the thursday, the friday, it's just lost its meaning to most consumers. they know there are going to be deals out there and are they going to be that much better at thursday at 6:00 p.m. or sunday -- >> i just sat in and ate my turkey. thank you, steve. >> we've heard sales figures from the big guys, amazon, target, how about the independent businesses? how did they do over this crucial weekend? kate rogers, a lot of short of shop small over the weekend. >> absolutely. while the holiday season has long been dominated by the big box retailers, smaller businesses found themselves in high demand on this past small business saturday. now, shoppers spent $16.2 billion this year, up 14% from 2014's $14.3 billion. and the number of consumers shopping small also grew 8% to
95 million from 88 million last year according to sponsor american express and the national federation of independent business. this is the sixth year small business saturday was held and every year it's been tracked sales have increased. more retailers increased with 4100 neighborhood champions, local businesses, chambers of commerce and more signing up to hold events within their own communities. sonia lapinski said it's aligned with the changing consumer. as mall traffic has decreased, when shoppers go out they want to connect more with the retailer they're patronizing and they want experiential engagements as well as connections via social media. small business saturday is the perfect vehicle for that shopper. there were 85 million social media engagements in support of the day online this weekend. she also added this is something that larger retailers are trying to mimic which we've seen with more and more pop-up shops. it's something the big box
stores can learn from. >> i noticed in my town there were people out in the smaller shops and those shops were making a lot bigger deal than i recall of shop small on saturday. >> absolutely. and that's 4,100 neighborhood champions, that's only what they're tracking. you don't have to sign up to take part. it could be even more across the country. >> good. thanks, kate. we're going to be looking at stocks that have been down so far this year, which ones could be comeback kids into next year? plus, it's a sector showdown. consumer discretionary versus energy. which is a better investment for your money going into next year. that's all coming up. don't go away.
nerve, but it can also pay off. >> because obviously they've been down for often very good reasons and people don't like them for good reasons but what i did was look at the s&p 500, look at stocks that had fewer than 30% of the analysts who cover them were recommending buys. >> unloved. >> the street has kind of given up on them and we're down 10% year-to-date. as you can see, the first three on the list, fossil, whole foods, walmart, fossil on the wrong side of many trends, it's a mall start trying to sell you wrist watches. this is just a starting point to figure out if the stocks are cheap and buys are cheap for a good reason. cummins is an example of a company that's been brought down by the global slowdown, the manufacturing slump we've seen. >> you would think -- >> it was a big china play. >> you would think that the auto business would be helping them. >> it became a little bit too leveraged to the china growth story and there's many others like that on the rest of the list which is not shown here. emerson electric, such as fastenal. a lot of industrials. this one is owens illinois, they
make glass bottles. it looks like a very cheap stock. >> down 29%. these are ones where only 30% of analysts -- >> or fewer. >> -- or fewer who follow them recommend them. is there any reason beyond that to believe they're teed up for a better 2016? >> in individual cases perhaps. i mean, i will point -- >> somebody will always make the case for one of these companies. >> exactly. i think -- what it really tells you is what the market has been rewarding and punishing and the market has been punishing any companies exposed to the global growth story. if we're going to have a market next year that's a bit different from this one in which, by the way, the index was flat but really it was about 10 or 12 stocks that really held up. if it's going to shift and get to more cyclically oriented stocks, chances are these are the type that have low expectations and could benefit. >> thank you very much, mike santoli reporting. it's been coming for a bit of a while. the shift of shopping from instore to online. so has retail changed forever? that is just one of the
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but sales are still higher by nearly 4% year-over-year. blaming high prices and low inventory. next, the imf has voted to let the chinese yuan join the reserve currency basket. and then finally world leaders gathered if paris today in an effort to create a legally binding agreement to fight climate change. if an agreement is met, it will be the first time in over 20 years of negotiations. so there's a lot on the line here. so if you missed any of the big stories in the past hour, it's easy peasy. go visit the sight at powerlunch.cnbc.com. >> coming up, a seconder show dour down, consumer discretionary versus energy. what's going to happen next? we've got both sides of this argument next on "power lunch."
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for each feature we release. we read about 10,000 suggestions a week to create features that as traders we'd want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. who reads all those? he does. for all the confidence you need. td ameritrade. you got this. i'm brian sullivan. coming up as "power lunch" rolls on, it's a busy day today but it gets even busier later this week. we'll set you up for all of it and bring you some trading ideas around tomorrow's headlines today. plus, hillary clinton wants to spend nearly $300 billion on infrastructure. we're going to find out what stocks could be huge winners in
any building boom. and why is it so darn hard to figure out exactly what consumers are buying? estimates are all over the place. we're going to dig into the real retail story. that as "power lunch" rolls on. >> thank you very much. we want to take a closer look at two sectors that have been moving in opposite directions, consumer discretionary, top performer so far this year, up more than 12%. energy sector the worst, down about 14% year-to-date. which one is the better place for your money now? on consumer discretionary in this corner we have charlie bobrin bobrinskoy and hugh johnson ceo of hugh johnson advisers. charlie, tell me what you like in consumer discretionary and why you think it's run can continue. >> first of all, the run has been focused on a few names, amazon which we don't think of as consumer names are in the index. it includes big names like amazon that have done so well.
there are pockets within consumer discretionary that haven't done is well. obviously retailing in particular. some of the names we like the most are names that are still tied to housing. so i talked to you about newell last time i was on. we love tiffany. there are a couple of retailers and things tied to housing that are still going to do very well. >> tiffany is certainly a retailer. i don't think of it -- mandy, do you think of it as tied to housing? i think of it as tied to your ring finger. i get it on newell rubber maid which is up 5% since you were here. hugh, over to you on energy. talk about energy and there's a lot of subsets within energy just as there are a lot of subsets within technology or health care, medical care, and so forth. which companies in this category do you like and why and answer the question of whether you actually believe that there could be a cyclical upswing in the price of baseline energy, oil and gas.
>> yeah, let's start with the second part of that because that's really the basis upon which you want to buy the stocks. and the real question is when you see a sector down, a sector overall down as much as we have seen, is it down for a justifiable reason? is it overdone? is the decline in the price of oil accurately reflect the supply and demand conditions as they exist globally? my answer to that question, i know the reason it's down. i know we're talking about a slowdown in china, slowdown in demand. i know we're talking about an increase in surge, shall we say, in supply from u.s. producers, but does the price decline we see justify that steep a decline? and i think the answer is it does not reflect supply and demand conditions. so sooner or later that price is going to recover. if it does, when it does, it's only a matter of time in my judgment. you want to have a portfolio of energy stocks which is, shall we say, balanced. you want to own refiners that will continue to benefit as they
have done all year from declining prices and then you want to own some international producers like an exxon. you want to own some exploration companies, conocophillips is a great name there. you want to own some equipment manufacturers, equipment service companies like baker hughes. so you want to have a balanced portfolio. you want a market weight energy and then when we start to see the price come back up, relatively performance of the stocks, then you start to morph in -- move into the sector. i think it's coming. >> charlie, going back to your theme of playing off the housing market, i know bed, bath, & beyond is one company you also like that is very much out of favor. why do you believe it will come back into favor? >> they have been investing on the channel strategy, putting a lot of money on the interstate. they have well positioned parts of the company. if you ever go back to school the first day a freshman goes to college, they are one of the
best companies at people buying the things you need at college from their home in one state and picking them up in another state. they have a very good set of products that they don't compete as much with amazon. it's a very well managed company. the stock has been hit hard this year but we think they've been making investments in the on channel strategy that's going to pay off this year. >> gentlemen, thank you. i like the beyond department of be bed, bath & beyond. >> what actually is beyond. let your imagination wander. >> that will do it for the first hour of the last day of november. >> indeed, it will. brian, over to you, sir. >> the beyond is the hallway. let's all just agree to it. it's 2:00 on wall street, lunchtime in denver. the dow and oil are holding steady, the dollar nearing its highs of the year. hi, everybody. this is "power lunch," part two, brian sullivan. glad to be back with you. melissa lee is at the nasdaq market site.
there is a done going on today but it's just the beginning of a huge week for your money. look at what is on tap this week. tomorrow you get the monthly auto sales numbers. on wednesday we hear from the fed twice. first a speech from janet yellen and then the beige book is released at 2:00 eastern time. on thursday the european central bank making its latest decision on rates. they're widely expected to cut. we already have negative rates in many parts of europe. and on friday we get the november jobs report here and that could be the final determination on whether the fed raises rates in a few weeks and if that wasn't enough, folks, opec meets on friday as well. and that comes with it the billion dollar question of whether or not we are going to see a coordinated production cut in oil to try to force prices higher. wow. what a week. but we begin with today's news, and, of course, retail. according to one measure, black friday sales fell by more than 1 billion bucks. the reason? more and more people are simply at home clicking and shopping
online. in fact, online sales saw a 14% jump over last year. so what, if anything, can we figure out from these trends to help you make money? stacy is president of sw retail adviser, jan rogers is a former retail executive. jan, you brought up an interesting point. you said everybody always says this time is different. you say this season really is different. why? >> it really is different because this is if we're ever going to call it a tipping point, this is the tipping point where online retail starts to take over. you just said you thought sales were down. i think sales were up 1%, 1.25% all driven by online because brick and maortar was probably down a little bit but not that much. but, yes, i think if you look at thursday night, all day friday, and saturday, which is really what we think of as black friday
weekend, i think sales were up a little bit mostly driven by huge sales from 6:00 p.m. to midnight on thursday, decent sales on friday, a slow saturday, and a huge benefit from online sales. >> and that was, stacy, to my point, i don't know if you heard at the top of the show. we said why is it so doggone hard to figure out who exactly is selling to what? according to one measure things are up, according to another things are down. why do we have so much trouble figuring out xexactly what is going on and, two, do the actual days, black friday, cyber monday, even though i vowed i would never say cyber monday again, do the actual days matter anymore? >> first of all, happy cyber week or as amazon calls it black friday refreshed. so, no, these days do not matter anymore. what you call them. they're all just blending into one big discount season and that's the bottom line. the consumer has been trained to wait for these longer period
seasons. retailers are becoming increasingly desperate. new gimmicks like cyber week as we just talked about. and also i think it's very confusing right now because of all of these different organizations out there throwing numbers at us, telling us things are up, down, sideways. i think at the end of the day you look at online up close to 20% this season. you look at brick and mortar probably down a couple points and that gets you to basically flat here. so not all that exciting this holiday season. >> i'm just a simple guy at the end of the day. i like the market to tell the story. i know this, despite gas prices being low, the majority of the big retailer stock are down, some of them considerably this year. the market has voted with its wallet and it's feet and is saying we don't see boom times ahead. why not? >> here is another word you hate, omni channel retailing. >> can't stand it. >> however, having said that, i actually think that macy's,
nordstrom, kohl's and penny's and walmart actually all had a good weekend this weekend. on the other hand, if you look at other retailers from a to z starting with abercrombie & fitch and ending with zumi's, they had a very tough weekend and that includes aeropostale, includes gap, includes a lot of people inside the mall who can't be great omni channel retailers and they're having a very, very tough run that's not going to go away. we're going to see a continued incursion by the internet. you're going to see omni channel players win. you're going to see amazon win because they're getting half of the growth in retailing every year and every quarter, and it's going to be very, very tough out there, especially with all these very low priced, fast fashion retailers taking their share of the market as well. >> and as you also wrote to us, amazon is like walmart 20 years ago. stacy, when you do your checks, who do you see winning this season? >> well, you know what?
amazon i call is the knew costco. you pay a fee and you get it cheapest out there and right to your door quickest. walmart is out there. i was part of the test pilot in the last couple days of doing three-day shipping which is longer than amazon at $50. so i think when you talk about omni channel, get all excited about, for example, a macy's, you want to be careful about that because these omni channel retailers are basically moving the consumer away from impulse purchases. that's something you talked about on your previous hour and i think it's a very valid point here. the consumer no longer is out there just grabbing things in the store as they see them. they're going online with an intent. so i think that could be a problem here. >> the consumer also doesn't know what cyber means anymore. i think we should have dial up wednesday and fax it in friday. stacy, jan, guys, we're going to leave it there but i have a feeling we will see your smiling faces yet again this year. >> thanks, brian. >> i was telegraphing my order in. let's check on some big retail
movers. best buy, that stock is higher right now by about 0.8% and check out michael's. this is leading the s&p retail sector. it is higher by more than 1%. apparently, brian, crafts are big this christmas. i am going to knit you something. but the xrt is moving toward session lows. among the worst performers, zumiez. and american eagle get a downgrade at oppenheimer. the analyst slashing a price target by 10 approximat%. let's bring in anni %. let's bring in annia let's bring in anninna, managin director at oppenheimer. it sounds like this is driven by valuation. the stock is up 35% since last december. why can't it continue to achieve market share gains? >> yes, so american eagle has been really one of a very few rare bright spots in retail and we continue to be very positive on the brand.
we were at stores this weekend and we think product execution continues to be very strong. but what we worry with is american eagle's ability to comp the comp as we get into 2016. in '15 eagle really did everything right. they've been comping high single d digits, pulling back on promotions and managing inventories prudently but that's a worry as we get into '16. also from a competitive standpoint american eagle has been benefiting from some disarray at abercrombie as well as aeropostale. holster just recently comped positively for the first time in four years in the united states so we think that's something to watch into next year as well. >> it's fascinating the note you have. since '12, abercrombie has shed $1 billion in sales domestically. apparently eagle has been benefiting. what is eagle doing right? has it all been because of a decline of a competitor or is it executionally doing very well?
i'm just trying to ask because there are a lot of other retailers out there who are not gaining the sort of operating margins eagle has been gaining? >> execution has been solid, like you pointed out. there is a denim cycle out there that is still very strong. american eagle has number two market share in the 18 to 25-year-old demographic when it comes to denim. so strength in denim has been something that's really aided the overall box. as we get into 2016, however, operating margins for american eagle at 10% right now, that's higher than our mall average of 8% to 9%. sales productivity at 500-plus per square foot is also in line with averages, so we think from here the relative risk/return is not as compelling. >> if you're moving to the sidelines on eagle, then where do you go -- what are you more bullish on within your universe? >> so in general we are staying away from apparel and sticking
with categories that are strong brands or categories that have momentum that are less affected by the department store wars. so with that in mind, we like lululemon. that is a play on the athletic cycle. we think the brand remains very strong. inventories have been mismanaged, but that's something they can certainly fix as we get into 2016. we also like coach and the handbag category. handbags are still positive, growing low single digits give or dtake and coach story is a turnaround that's seeing sequential improvement for the past year and we think it will continue into '16. >> thank you for your time. appreciate it. >> thank you for having me. >> brian? >> thank you. let's turn our attention now to oil. crude oil futures just really unchanged ahead of this week's opec meeting on friday. joining us now cnbc contributor helena kroft, rbc marketing director. on friday in austria with opec,
do they agree to a worldwide production cut to try to raise price sfs. >> i think the general consensus is they do nothing. saudi arabia in particular continues a market share strategy but i think the situation is fluid and i think there's a nontravivial chance something happens between now and friday where certain members are let's pull the plug. >> you believe saudi arabia will continue it's market gain strategy even at the expense of their own pocketbooks. >> this is saudi. they're basically saying we have the wander bandwidth to deal with this. >> and the money. >> we have the money. $650 billion inf x reserves. we are fine. as we talked about before there are certain people in saudi arabia saying really? what's the end game of this strategy? so i think that's what people have to juggle in saudi arabia? what are the domestic costs of continuing with market share. >> take us inside the room. do you believe that the other o poke members, non-saudis, will be pounding the table saying
we're struggling while you have these filled coffers with cash. we need higher prices. >> oh, absolutely. venezuela, algeria, nigeria, they're going to be pounding the table saying saudi arabia you're basically telling us we're on our own. we're circling the drain next year and you're giving us no comfort. the saudis will basically be like unless it's a question of our own economic livelihood at stake, our political security, i think they don't really care that much. >> isn't that the ultimate opec game of chicken which is this, if you're venezuela, you can cut production, but prices aren't going to go up so you're just going to be screwing yourself out of cash. so everybody continues to pump as much as they can because the other guy isn't blinking. >> right. there's not a lot of trust within opec itself and to basically clear out the overhang, they'd have to do a substantial cut, and saudi arabia would really have to shoulder the bulk of that cut. the saudis are saying we'll do it if the russians will do it, but the russians show no signs of going along. >> on our beautiful high-def screen it says $41.78 for a
barrel of crude. are you shocked we're below 42 bucks a barrel? >> i'm shocked given i was at the june meeting and the future looked bright for oil and everybody talked about the demand in recovery. what i think will be a contentious meeting is in june they talked about the recovery to $70. we're nowhere near that. i think that's why people at the table are going to say to the saudis, we're pumping is million barrels plus over our 30 million barrel a day ceiling. you're contributing to this price rout. >> always a pleasure to get your insight. we'll probably up after the o poke meopec meeting. lots coming up. including a pro that's calling for a drop in stocks next year. plus, has gold permanent napolitanoly lost its shine or is this a golden opportunity? and can you name today's mystery short? it's the best performing auto parts stock over the past year and a name you might want to consider buying today but not tomorrow.
its paid parental lead to full time employees outside the united states giving all new parents four months of paid time off. and a cornucopia of food stocks are hitting multiyear highs including mccormick, hormel, campbell soup and tyson. the knock on stock strategist generally is that they always seem to be bullish. it kind of makes sense though since the stock market tends to go up a lot more than it tends to go down. but your next guest does have some big concerns about next year. brian bellski is with us. let's hop into the time machine known as digital playback and listen to what you said around this time last year. >> we do think 2015 will bring a lot more volatility with respect to a lot of question marx in terms of global growth, what the fed is going to do. a lot more back and forth trading relative to what we saw in 2014. >> so gotteed, t-shirted brian
belski was right. but you have big concerns about part of next year. >> we do, brian. first of all, we continue to believe that u.s. stocks are in the midst of a 20-year bull market. that's been our call since 2009, but we do believe we need to see a bit of a reset in stock prices and we believe investors continue to give the fed way too much credit. if you look at the fed as a stock, the ted can fed can be l as priced to pfeerfection. clearly she should have raised rates in september. she didn't raise rates in october because she didn't want to admit she was wrong in october. the market is becoming more comfortable with a rate hike in december, so you sell the rumor, you buy the news, okay? as the economy and the stock market heats up which we think will be the trend the first quarter of the year, we think the conjecture and commentary from the fed is going to be a lot more important than the
actual ability to change interest rates meaning that there's a lot of change coming next year. we have a new president coming in. we've got new monetary policy and we have new investing habits coming in. that's a lot of uncertainty and we think we could see a sizable correction. >> and third years of presidential cycles tend to be good because everybody is promising everything. we have a segment on that coming up in a bit. how far do you think we could fall on the s&p next year? >> we have two scenarios, brian. scenario number one is the base case that the market rallies to our year-end target for 2015 of 2250 as institutional portfolio managers continue to bid the market higher because they have underperformed. we see a cycle high of 2400 sometime in the beginning of the year, then a pretty sizable correction to potentially even 1800 or so and then a rally back to 2100. now, we're not trying to be cute. we think actually we could see that type of a reset as the reactionary short-term market participant does that. our second scenario is conscientious -- >> before we get to number two, let's stay on number one.
you said a lot there. basically you're trying to figure out all these numbers in your head. the bottom line to me is it sounds like the end of next year we'll likely be lower than the beginning of next year. >> yes, we think that's the case. >> soovove so overall the marke going to be down from where they are right now or close to it. >> that's the case, especially if, again, if what we believe is going to happen, even in this very short term that the market is going to rally to new highs even this year as investors try to chase performance, no one is saying that. everyone is saying it's going to be really quiet. no one is doing anything. the numbers are pretty good and investors have underperformed. now, scenario number two is what everybody else is saying, treading water and the market kretz and we close what we open. i think that's too simple. if we learned anything since 2009,s that a really, really you have to job picking stocks. we need to rebuild credibility for equities. ultimately that's what the 20-year bull market says.
as we move back to quality investments, that's why we think longer term we're moving more into value. growth to start the year and value to end the year. >> ten years from now stocks will be higher, right? that's the baseline idea. >> our baseline idea has remained steadfast. 8% to 10% compound annual growth raids for stocks. >> that's the 100-year historical average. stocks do make people money long term. brian belski, interesting view. you're on the record. i like the t-shirt by the way. some big love for a big vehicle maker. and a quick check on some of the names that might be in your portfolio. "power lunch" is back in two. i'm only in my 60's. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan.
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welcome back. time now for "street talk." that's our daily dive into the analysts calls you need to know about every single day. first one is a pretty big name, melissa. it's microsoft. upgraded by raymond james to a strong buy from a buy and they say while microsoft may have missed pure mobile, it is now one of the only what they call hyperscale hybrid cloud vendors basically able to integrate infrastructure and software as a
service. they note that the company is keeping margins under control by cutting costs. also, they note a stock buyback. the target, 62 bucks, higher than the stock has ever been in nominal terms, but inflation adjusted microsoft was an $80 stock back in 1999. not to be negative. >> you know, the analyst points out the cloud students is still pretty nascent. next year for estimated 2016 estimates, it's about 17% of revenue. so there's still a lot of runway there for the cloud bit for microsoft. stock two, synchrony is getting an upgrade to an outperform. they had downgraded it to a market perform ahead of that anticipated spinout because of anticipated technical pressures. bmo expects big cap returns of 20% dividends, 60% buy backs in 2016. the fed had prohibited that when it was part of ge. the price target is 36 bucks a share. >> i don't know if i agree with that call. but i like the theme of it which
is basically when a company has spun off, maybe you should wait a little bit to understand exactly what you're get fwrg the new entity. you think you might know but maybe it looks different. >> the third stock wright medical group jeffries up to a buy from a hold. they think sales could come in above what they had originally seen. they that i tink the valuation improve. >> you'll see what the company says about those forecasts. they are going to be presenting at a piper jaffray conference tomorrow. up next go pro and garmin and this after the black friday weekend. pacific crest assesses how go pro and garmin did. in store check the analyst says negative. the analyst says the saturated action camera market remains a clear longer term headwind for go pro. the analyst also says the checks are slightly negative for fitbit although they got an upgrade at barclays today. >> it's my -- just me, brian
sullivan, two things. i was in a best buy, there's a big go pro end cap display. nobody was looking at it. i'm a big skier, there's a helmet with a camera now built into the helmet so you don't -- so you don't have to have anything stuck to your head and i wonder is that the real threat, everything being built in rather than snapped on. >> that's interesting. >> last stock, thor industries. under the radar name. not a norse mythology company, an indiana based rv maker. wunderlich securities up talking them up. their channel check shows strong preseason demand. they have a $70 target and it's much higher than the average price target of $62.50. >> and they just raised their dividend by 11%. the yield is over 2% here. >> did you say that thor is putting the hammer down? >> oh, gosh. you were waiting all day to say that. >> i have been. "street talk" is down.
but as we go to break, here is another look at today's mystery chart again. one of the best performing auto-related stocks in the s&p 500 over the past year. also, you might want to buy this name today. it's not our opinion. we'll tell you why we say that, and the final oil trades are crossing for the session. we'll head back to the my next a -- nymex and give you the oil close. stick around. happen spontaneously, nymex and give you the oil close. stick around. -- nymex and give you the oil close. stick around. nymex and give you the oil close. stick around. doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure.
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hi,er. i'm sue herera. here is your cnbc news update this hour. speaking in paris vladimir putin called last week's downing of a russian aircraft a huge mistake. but the u.s. state department says evidence shows the russian jet did violate turkish air space. a suspect is in custody in connection with a threat against the university of chicago which forced the school to cancel classes today. in a statement, university officials say the suspect is a student living off campus. so far no charges have been filed. within the hour, the man suspected of killing three and injuring nine during a shooting rampage at a planned parent hooth clinic will face a judge.
robert dear is being held without bond in colorado springs. he will make his appearance via closed circuit television. and fit 20 somethings may live longer according to a new johns hopkins study. researchers tracked exercise in 5,000 young adults and found each additional minute of exercise could lead to a 15% decreased risk of cardiovascular disease. and that is your cnbc news update. brian, back to you. >> sue herera, thank you very much. let's get now to jackie deangelis on the floor of the nymex for the oil close. >> good afternoon to you, brian. it appears the bearish factors won out today. we were six cents lower, $41.65 is where we finished the session. opec output was up in november. this was not surprising. close to 32 million barrels per day. we also know saudi arabia did pump a little bit more. opec output up 1.5 million barrels since this time last year. so obviously all eyes on the
meeting on friday where we are not expecting to see a production cut and we see these numbers go up. one trader telling me this is a vicious cycle. they need the revenue, brian. back to you. >> it certainly has been vicious for a lot. jackie d., thank you very much. it is time for "trading nation." traders do trade better together after all and today we are looking at gold gold. seeing its worst month in 2 1/2 years. ari wald of oppenheimer, phillip strebel on the fundamentals. they say it's a technically driven market. if it is for gold, where is it headed? >> based on the trend we think it's going down. the trend is still bearish and for that reason we're still sellers here. here is one indicator we really like looking at, the slope of the securities 200-day moving average, and for gold that 200-day has been sloped lower for quite some time. even other the past few years despite all this choppy behavior. that indicator has continued to move lower. we think you want to trade it in the direction of that trend
which is down. if you get a pop, wie see resistant at $1,100. >> there you go. it's been negative for a while. ari see it is continuing that way. phillip, do you disagree fundamentally? >> no, i don't. i think ari has it spot on. coming in november there was a lot of optimism of gold. over the course of the month the optimism had tarnished along with the price. prices down about 6%. the key driver was those nonfarm payroll numbers. they were so negative for three months in a row. we beat the street highly in november. prices had then further expected that the rate hike to come in in december. i think it's baked in the cake and the fed, they won't miss this opportunity. that in turn pushes the dollar up to a seven-month high. the eurocurrency continues to erode. remember the ecb, they do have a meeting here up on thursday.
they're probably going to come out and outline boosting that quantitative easing a little bit more. that's going to put more pressure on the gold market. so i think the path of least resistance is down and i think we'll be, you know, $100 from that high to low just a little bit over a month. >> one of my five predictions is gold would end the year in triple digits ahead of the decimal. might be off by a couple weeks if it's true what happened. thank you very much. for more "trading nation," head to tradingnation.cnbc.com. melissa? >> let's continue with the metals meltdown and talk about the impact on the miners. joining us is dan rohr. great to have you with us. >> thanks for having me. >> i want to start with copper. you lowered your long-term copper forecast to $2 a pound. i want to focus on one sentence. at slightly lower copper prices than we expect, freeport-mcmoran and first quantum would be owned by their creditors. that means real distress could be ahead if copper breaks $2.
>> at $2 copper a lot of these companies are looking at some serious difficulties, really a consequence of some ill-timed and overpriced acquisitions in years past that were largely predicated on a higher copper price than i think we're likely to see going forward. >> so carl icahn's investment in freeport-mcmor freeport-mcmoran, it sounds like it would not be enough to offset the lack of demand or the declining demand we're seeing out of china. >> yeah. there could be some opportunities to unlock value there, but really freeport and the rest of the mining space is ultimately at the end of the day a china story and there's very little any individual management team can do in the face of significantly lower chinese demand for copper. >> that's a perfect segue to talk about gold. you also trimmed the long-term gold price forecast to $1,160 an ounce which is higher than where gold is currently. you like a couple of the miners.
but a lot of this is because we're seeing declining demand on etfs as well as central banks but increasing demand on the jewelry front from countries like china and india. can you forecast declining cop h copper demand because of a weak china? >> while we're really negative on things like iron ore, like copper, like coal, we're quite positive on gold as you see a rebalancing of the chis economy towards consumption. i would agree with the prior two gentlemen who were calling for a sub$1,000 gold in 2016. we think that's likely, but when we look out further it's really jewelry buyers in india and china that are likely to be driving the ship there. >> all right. dan, going to leave it there. thanks so much for your time. appreciate it. >> thank you. brian over to you. >> why don't we take another
look or talk about if you're on the radio today's mystery chart. we already said it's one of the best performing auto related stocks in the s&p 500. here is another hint. this song. this company was founded in a town that is really known as the birthplace of route 66. the answer is coming up as watch or listen to cnbc, first in business worldwide. ♪ 2,000 miles all the way .
that helps machines communicate. (interrupting) i just zazzied you. (phone vibrates) look at it! (friends giggle) i can do dogs, hamsters, guinea pigs... you name it. i'm going to transform the way the world works. (proudly) i programmed that hat. and i can do casaba melons. i'll be helping turbines power cities. i put a turbine on a cat. (friends ooh and ahh) i can make hospitals run more efficiently... this isn't a competition! . big interview coming up on cnbc. wells fargo chairman and ceo john stumpf joins "squawk on the street" exclusively at 10:00 a.m. eastern time especially as the company seems to be catching more scrutiny about its cross selling methods. >> that is a big interview on a bank that is probably a lot bigger than most people think it is. melissa, thank you.
democratic presidential hillary clinton unveiling plans for a five-year, $275 billion infrastructure spend. it would create an infrastructure bank and be paid for by what her campaign calls business tax reform. politics aside, if something like this were to happen, what companies might make you money from it? thoughts now from josh dietz who runs the five-star alpine global infrastructure fund. i understand this is pretty much comparable to the highway bill that's in office right now. but we're hearing a lot of talk about the need for infrastructure. assuming we get something done from either party, who do you believe is in the forefront to benefit financially? >> well, i think it's a very positive development that both democrats and republicans are talking about infrastructure. so this $250 billion would be in addition to congress and the senate passes an infrastructure highway spending plan hopefully by the end of the week after 36 short-term extensions, we do
think it's positive. one thing i do like in the plan is they talk about an infrastructure bank. the thing i like about that is we'll get the private investment side of infrastructure which we so need in the united states. the secretary of transportation said we need $400 billion just to maintain our infrastructure. so even the congress incentive plans fall short of that. we need the private sector involvement. so the company that would benefit the most i believe is forovial. they just completed to roads in texas and what they have is congestion pricing on the roads. right next to that they built a toll rod aad and travel has increased 50% to 60% faster on the toll roads. so they've done it. they've helped build the infrastructure in the united states. >> so ferrovial is in your fund and also crown castle which is in your fund. what sorts of other companies might you start doing your
homework on to be poised for that time? >> so, it depends exactly what they plan on spending the money on. if they are building more highways we'd look at a crh or heidelberg cement and we own heidelberg in the fund. and also if they look for airports, we own several airport companies in our fund that might benefit whether it's adp in france or vince. ferrovial also owns heathrow and they might benefit. airport travel is supposed to increase 4.6% annually so we have to invest in our infrastructure going forward. >> you like crown castle which makes cell phone towers which we all need more of, but how does this fit in with an infrastructure play, josh? >> that is part of our infrastructure. they own 40,000 towers in the united states as well as 16,000 fiber miles which supports a small cell network. we all are using more telephone data. in fact, that's supposed to
increase 7x, wireless telephone data from 2014 to 2019. that's true infrastructure. it's not only airports and roads but telecos and utilities all fit in in part of the global infrastructure fund we run at alpine. >> josh, we appreciate your insight and those stock picks, we're watching those names, ferrovial and crown castle and some others. >> thank you for having me. >> sumner redstone is under fire after a former girlfriend files a lawsuit questioning his mental capacity. what will it mean for viacom shoulders? we'll bring you the latest on this juicy story. "power lunch" is back in two. 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.
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it is the case that is captivating hollywood. viacom and cbs chairman sumner redstone is being sued by an ex-girlfriend on the grounds that he, quote, lacks mental capacity to remove her as a representative. if the suit is found to have merit, one of the largest media companies in the world may have to deal is serious shareholder blowback. >> brian, that's right. if his girlfriend wins her suit and he's found to be incompetent, that could mean that viacom and cbs open themselves up to shareholder
lawsuits for failing to disclose material information. manuela herzer alleges he's unable to speak beyond brief grunted responses and she says he's fixated on having sex and having steak despite doctors telling him not to. redstone's attorneys reject her claims calling them riddled with lies. not only is redstone chairman at viacom and cbs, he controls both companies through national amusements. he owns 80% of that holding company which in turn holds 79.6% of both media giants' voting shares. what happens if the suit is found to have merit? seven trustees will control his shares. his daughter sheri, her son tyler, douman, a cbs director and three long-time lawyers for the family are the trustees that will take over. at viacom we could see a battle for the chairman role between
fell lean douman and sheri redstone sumner, daughter. we expect les moonves to take on the role of chairman at redstone. we will be there at the courthouse in los angeles and we will have an update in "fast money." back over to you guys. >> thanks, julia. disney shares tumbling 3% on friday. now down nearly 5% on the past week and this as espn is reporting subscriber loss. despite the concerns many believe the "star wars" film could be helping to tame the damage. martin, great to talk with you. the declines were revealed by iger in august and then on wednesday night. those are structural declines within the industry. how much can "star wars" offset that in your view? >> i think the first thing to remember is these numbers are not new.
they're nielsen numbers we have known since september. this is in our model. i think the nielsen numbers exaggerate the pace of decline and actually on their face showed a deceleration in the face of decline. i think with these type of numbers they can still grow affiliate fees at espn in the mid single dpijt rain and they have very good viewership for live sports. the tv business is fine. i think that the theme parks and movie business, particularly the movie business, are great. if you look at the tracking for "force awakens" we could do a $200 million opening weekend, which would be an all time record and those type of movies will you go out so this could be easily bigger than avatar. you look at the earnings leverage on that, 1.5 to $2 billion profit potential from that movie alone and then you have a sequel next year where estimates are nowhere near where we're seeing tracking for this
movie. the licensing around that, you know, i think all of that is very constructive when you look at your earnings via short disney over the next couple years. >> i hate to ask this, but how much of this is already priced into the stock. when you take a look at the tumble that disney stock suffered when bob iger said those comments on the conference call in august about cord cutting and the quick rebound that the shares saw, i mean, it sort of hit the ceiling at 115, it seems to not be able to move much higher than that. so are people sort of -- is that the "star wars" halo already being factored in with the potentially soft declining tv business? >> i think what you saw is that the media group has rebounded since august. if you look at the charts, all of the pierce, they look somewhat similar, disney has done somewhat better than many of them but not all of them. i think that people saw that the fears about a snowballing wave of cord cutting weren't playing out. this is actually pressure but not accelerating pressure.
i think that we will see over time in tv that cord cutting levels out of as you start to hit the sticking point of sports, something like 70% of all households like to watch sports and i think they will find a hard time cutting the cord. meanwhile, live sports viewership a solid. i think the market rebound is tied to, you know, the lessening of the overwrought fears about tv. the upside is going to come from the street looking at the earnings leverage from these movies. you could see a real positive bias to estimates if "force awakens" does anything like a multiple of the opening weekend we have seen other big december movies do. if you think about that for "rowing 1" and think about licensed merchandise, i think that you're going to see north biased estimates. >> barton, thanks for your time. brian. >> and what if the movie stinks? no one has talked -- what if it's not good. who knows? up next, our mystery chart is revealed. stick with us.
what did these three stocks have in common? they have all been upgraded today. tonight our traders are grading the upgrade and whether or not they would buy those stocks along with the analysts. brian. all right. grading the upgrade, we look forward to that. now it is time to reveal today's mystery chart. the stock up 45% over the past year, it is o'reilly automotive. this has been one of the great
money makers you have probably never thought about. this was a $4 stock back in 1996, $266 today. that's a gain of 6500%. wow. the car-related focus continuesed tomorrow. that's when november auto sales numbers come out. maybe you want to pick up a few stocks of these auto parts companies today ahead of the numbers tomorrow. that's not our opinion, we don't say that kind of enough, but our data partner company ken show has data that shows that for the past decade the companies in the auto supply chain, the parts makers, car sellers, et cetera, tend to post positive one-day gains on the day that the auto numbers come out. those include o'reilly group, group one, lithia motors, tata motors and advanced auto parts. they post an average gain of half a percent on the day that the auto data comes out.
doesn't mean they will but historically they have. so what of those names might be worth your hard earned cash? let's bring in brian so the hiemer. you won't comment on one-day data, but do any of those names look long-term optimistic to you? >> i think if you go back to 2005 and look at o'reilly as a $20 stock, they have had more up days than down in general. but looking at that group o'reilly and advanced auto parts sell primarily to cars that have already been in the car population for some time, eight to 12 years old, the other three are dealers and dealers are great businesses that over the long-term are set to do very well. >> give us a couple of the names that you believe are the -- there is a lot of them out there. give us the names you think are the most poised to do well over the long-term. >> over the long-term a company like genuine parts which is best
known for its napa brand, great cash flow generator, great management. as cars get older and have more parts -- or more vehicle complexity which caters to their core market which is the commercial installer. >> you also like ted co and so does your firm. so what's so attractive about teneco. >> it is a company that is going to help auto makers and also just equipment makers in general reach fuel question and emissions standard on a global basis over the course of the next five years. regulations are only going to get more difficult and as they do it is one of four companies to supply the technology for auto makers. >> who knows what will happen tomorrow, either way long-term you like tenneco. >> there you go, a couple of names there. big week this week, melissa.
>> it is a big week. ecb, opec, you name it, it happens this week. big week for the markets. >> you are going to apparently crochet me some kind of clothing. i caught that. >> just wait until the holidays. >> thanks for watching "power lunch," everybody. >> "closing bell" starts right now. hi, everybody, welcome to the "closing bell." to close out this month of november i'm kelly evans here at the new york stock exchange. >> i know. tomorrow is december 1st. it's up believable. i'm bill griffeth. yes, the last trading day of the month already. retail stocks getting hit on this cyber monday. we are going to talk about whether more online sales may just lead to more consumers returning items this holiday season and what that means for the retail bottom line. >> meanwhile, goldman sachs top economist will join us on a first on cnbc