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tv   Power Lunch  CNBC  March 1, 2016 1:00pm-3:01pm EST

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need another one? or why do i replace the one that i have especially if it's sitting in a drawer as i suspect many of them are. >> go pro is getting a bump today. the market is up just shy of 300 points. that does it for us at the halftime report at the nyse. "power lunch" starts now. thanks, guys. welcome to "power lunch." i'm melissa lee, along with tyler mathisen and michelle caruso-cabrera. the markets like a lion to kick off the month of march. gains across the board a. major rally on our hands as the dow is up 1.8%. the s&p 500 good for a gain of 37 points, up nm 2%. and the nasdaq is up by 2.2%. what is notable about this rally today is the strength in the financials. we've got jp morgan all the way threw citigroup up between 4 and 5%. look the sell owoff in the tlt,
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the safe haven trade. a pull back in bonds today. tlt is down by 1.8%. meantime, a higher bid for oil. wti is up 1.9%. and brent crude is higher by .7%. much more. starting off with breaking news out of washington as a battle between an cell and the fbi heads to capitol hill. the fbi director james comey is about to testify in front of the house judiciary committee. that will be followed by testimony from apple's general counsel. we have got both sides of the story. we kick it off with eamon javers on the hill. >> reporter: this is not an issue that slices and dices neatly along the zpemt republican party lines we are so used to, the entrenched battle lines here this washington, d.c. this is an aissue a lot of people are approach forth the first time on capitol hill. they have to think about it themselves. they are not getting talking points. how they responds to the testimony is going to be
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revealing of where congress might ultimately land on this issue. apple goes into this with a lot of momentum from a ruling from a federal magistrate judge from a separate case in brooklyn in which the judge said that apple was in fact right not to open up this phone for the u.s. government. apple says it will appeal over there. all of this over whether or not apple should unlock the i-phone of san bernardino terrorist syed farook. presumably, both sides plan to appeal that all the way to the supreme court. >> eamon, thank you. let's get to josh lifton in san francisco with the apple side of the story. josh? >> reporter: apple's bruce sewel, the company's general counsel is going to tell congress and remind lawmakers how much help apple did provide law enforcement initially, providing information when they had it, making the company's engineers available for guidance, counsel and advice but
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apple will draw the line here. the company is not going to write new software to give the fbi access to the loktd locked encrypted phone. he is going to outline two points about why that is. one, there is undue risk created here. that new software could be stolen by hackers, by criminals, by foreign agents, put millions of other i-phones at risk, their personal data, financial data, health data. he will also argue, his words, this is bad precedent, dangerous precedent for government intrusion into lives, safety and security of users. bottom line, sewel is going the say weakening encryption is a bad idea for consumers for honest well meaning users and that the complex issues in this case are best decided by lawmakers. >> we will continue to monitor the hearing and bring you developments as they happen. you can watch it live on our
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website. >> just saw james comey walking in there. he will probably get sworn in at any time now. you can watch it as melissa said on line. let's talk with chris swecker, he was the head of the criminal and cyber investigations during his time with the fbi. now he works as an attorney and consultant on security and financial crimes. chris, good to have you here, if you were still at the fbi i assume you would want apple to do this for you. ? no? >> as a former agent and also as a private citizen. i think it's necessary to make sure we don't create technology safe zones for criminals and terrorists. from pedophiles to organized crime or terrorists. i think director comey, who has been general counsel for bridgewater and lockheed martin -- so he knows the private sector. i think he is going to make a compelling argument for getting access to this little black box. >> we just learned last week in
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this unsealed court filing that there are 12 other cases out there where they want apple to unlock phones. why would doing this set a precedent and give power to all those other prosecutors out there to get apple to do the same thing and become agents of the federal government, in their words. >> it might open up the flood gates in that regard. but i think there is a big difference between engineering internet access or what we think of as hacking into apple and into apple i-phones versus engineering an override of that ten pass word wipe the screen clean -- >> i understand. that but i asked you about the issue of precedent. i mean if they do it here, won't they have to do it over and over again? >> they may have to do it over and over again. >> that's okay with you? >> it is okay with me. it's been done. throughout the years when we're balancing the need for privacy and the need for cyber security in this technology age versus
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national city and the interests of citizens at large in terms of their safety from pedophiles, from criminals, from terrorists, it's always gone favor of law enforcement and national security with reasonable boundaries, and also with a court order. >> if you are not concerned about the precedent with respect to governments being able to access these so-called locked phones, what do you say to the thargt argument that by creating this back door or this key into their system apple becomes vulnerable not to government intervention on those phones but to malfactors, hackers, russia, china, wherever they might be that could be truly debill fating to their business and the privacy of millimillions of individuals. >> i recognize that apple wants to operate in those markets and inside a lentle mat fear that
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those governments, too, will require access. but i'm not worried about engineering this type of access. that's not what they are looking for. and secondly, apple is supposed to be able to protect their proprietary data and information and trade secrets. they are the ones who would engineer the access and they would hold the keys to it. not the government. >> chris, did i hear you say you are not concerned that foreign governments wouldn't require tech companies -- there is a case in brazil because they want messages to message in drug trafficking case. doesn't this put our tech companies in a precarryious situation overseaings. >> it does. when they are operating in places like china where they don't respect intellectual property, that's a risk they take every day.
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i don't think there is an increased risk there. i think that the governments would be ordering access similar to our government. >> other governments could essentially go on witch-hunts. if apple is made to open up this one phone here, then overseas apple or whatever other tech company could be the vehicle for a witch-hunt? >> yeah, this is a problem we're going to face with technology in general. i'm just saying that's a risk that we balance against our own national security, the security of our citizens. and i think that the balance is in favor of national security and the security of our citizens. i think we face this risk all the time. it -- all the time as technology advances forward. until this line in the sand that apple has drawn, the government has been able to get access under reasonable conditions. and they have to pay for it by the way. >> let me underline this, you accept this trade-off. apple does this. the witch-hunts happen. in brazil they are talking about
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a drug case. but in many companies they will be talking about political dissidents, people who believe in democracy, people who believe in the values we think should spread throughout the world and they will go to prison perhaps as an outcome this trade-off. and that's okay with you? >> as i said, it's a balancing act. but those governments could order -- >> that's what i'm asking. >> they could order apple to do that anyway now. and they would force them to either comply or -- >> comply or get out of business in the country. >> that's right. >> that's right. >> that's correct. i don't think this changes that dynamic one bit. >> that's correct. they would -- at the cost of getting out of the business. >> that's right. >> they would either comply or choose not to. >> doesn't it give them a lot more strength when they can say we don't even do that for the united states government. >> it does. >> chris, great conversation. one we've been having now for weeks. >> and we're going to continue. >> we'll continue to monitor the hearing that's going on. fbi director james comey testifying. at this point. you can see it on line.
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that's at "power lunch".cnbc.com. and a big interview on cnbc. defense secretary ash carter will be on closing bell at 4:00 p.m. tomorrow. >> here's what's on the menu for the rest of "power lunch" for a super tuesday. when you look at the stock prices moving up, it is a super tuesday in more than one way. larry conley is going to talk about super tuesday, the money at stake on this big primary day across the country and largely in the south. plus, why this could be the best time to double down on the casino sector. the three names you should sown. and we've got a rally on our hands. the dow, the s&p, the nasdaq, and the small caps all until the green today and oil too up 2%. let's look at some of the widely held name. alphabet, apple, microsoft, and jp morgan chase with better than 2% moves, all. i got a question, where's my omelet!!
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coming right up, mr. tinsley! um. who's he? until our startup gets on its feet, money is a little bit tight. so i opened an online bed and breakfast. there's supposed to be muffins! these are scones! ok, mr. tinsley. or we can just use fedex ground shipping. they're fast and can save us money. yeah. let's do that. also i'm gonna need more towels. also the toilet is busted. also those two things are related. fast, affordable fedex ground shipping. at ally bank, no branches equals great rates. it's a fact. kind of like grandkids equals free tech support. oh, look at you, so great to see you! none of this works. come on in. 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.
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man 1: he just got fired. man 2: why? man 1: network breach. man 2: since when do they fire ceos for computer problems? man 1: they got in through a vendor. man 1: do you know how many vendors have access to our systems? man 2: no. man 1: hundreds, if you don't count the freelancers. man 2: should i be worried? man 1: you are the ceo. it's not just security. it's defense. bae systems.
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welcome back to "power lunch." i'm melissa lee amount of strong rally on our hands to kick off the months of march this after the worst start to a year in many years in january and february. s&p sectors, nine in the green. the only one in the red right now, utility. that has been a safe haven trade. staples and telecon also in the green. two sectors to watch today. let's talk politics.
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12 states voting today in the single biggest day of primaries this year. our panel, cnbc larry kudlow and 538 reporter faray chidea. you have got interesting polling data, which not only looks at sort the raw count state by state, but the probability of one guy or woman or another winning in those. tell me where the rivals to donald trump have the biggest chance of winning a state. >> well, of course you've got texas, which is cruz country. you know, that is the state that cruz absolutely has to win. and it looks like he is going to -- >> his odds of winning there are -- >> well, let me flip over -- there is a long list of states today. >> no, no. >> cruz is likely, by polls torque get 36% of the vote, making him the winner. but in what we call the polls
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plus, at 538, he is 89 80% likely to win. >> to be the winner. >> any other states where he or cruz on this day are the likeliest to win strongly? >> well, there is definitely, you know a little bit of a tie for second place in some cases. cruz could also win arkansas. so it looks like he's leading there. and it's a 27% chance he will win. it's too close to call from a polls plus perspective. oklahoma, trump is likely to win, but rubio and cruz are tied for seconds. basically arkansas and texas. >> you have got sanders beating in hillary in what, colorado, minnesota and vermont. >> vermont. vermont is not a surprise. >> i would hope. >>. home field advantage. >> minnesota? >> minnesota. >> minnesota? i love it. >> minnesota. yeah. it's kind of like nice midwestern, more liberal. >> midwestern progressives.
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>> midwestern progressives. >> the rubio people, i've had a conversation with the rubio people. they are painting a much different picture. i'm just going to put it out here. >> as they would. >> i know the rubio people. they are trying to convincing me that rubio is surging, point number one. point number two, they give up texas. they agree with you and me. arkansas three way close, oklahoma three way close. and their bottom line is trumping is gob to have a lot more ws topped but they will basketball smaller, closer. >> is that what you are finding. >> i'm just putting that out there. >> in terms of arkansas, it does look like, you know, rubio and trump and cruz could all end up in a sort of you know, photo finish. >> the spirit of what he is saying is the trump wins will be there but not to the grand scale that we have becomed accustomed to. >> narrowed.
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>> here are a couple of baffling trends. trump has finished lower than his polls in some cases. racial rhetoric is a motivator for voter turnout. there has been a lot of academic and political science studies about that. depending on who turns up -- >> on both sides, i would think. >> yes. >> you want to vote against him because you are insulted or for him -- >> but it's not a ekt factor in the democratic primaries. but in the gop primaries it really depends how people view basically his comments and rebuttals over the past couple of days. there are a lot of gop voters not showing up because they are activated. >> trump has been against david duke and the kkk. in fact going back to 2000, one reason he wouldn't run on the reform party because duke was in
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there. >> why was he so squirrely about it on thursday in an interview. >> friday he hiss disavowed him. >> and disavowed him earlier in the week. >> but at his press conference. >> it wasn't understandable. >> why doesn't he own up to his mess. >> it is a dog whistle. >> he has to clean it up. and he hasn't cleaned it up. >> question, in a week in which he also affiliated him with a mussolini quote. >> a dog whistle? >> he is appealing to racialized central, which gets voter turnette out. >> i don't personally agree with that because i know the guy. but what he did sunday was too weird for me. here's my biggest problem with this whole story right now. let's move off the horse race just for a second. the republicans have completely lost their message. >> yep.
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>> the message is gone. that's bad. economic growth, gone. trump's message, gone. rubio is now a high school rankout artist. >> yeah. >> which i think bay the way -- it's so out of his character i think may wind up hurting him. >> what about senator cruz. >> he is more high brow rank -- >> a classier low life. >> it's parsed out. it troubles me because the whole idea between trump and redoing the republican party which has some merit in my opinion is we will get the middle class a wage and jobs increase. they haven't had a wage increase since 2000. and this is gone, and it's terrible. >> larry, you wrote it up, and i think it's absolutely correct. and you write it with, i see pain in your voice, rather than growth at the republican debate in houston, we got more cat fights. it's time to get serious.
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>> right. >> why haven't they gotten serious? >> i don't know. it's just deteriorate d that houston thing was a new low. >> jeb bush talked about economic growth and nobody heard him. >> he didn't do it much. he was the first guy out of the box with 4% target. he didn't talk about it much. trump will talk about it occasionally, but that's gone now. none of them are now. i'm just looking back. the republican party is going to suffer because mrs. clinton is going to come out with her message, right? i think you agree she is going to basically sweep except for some regions, minnesota and colorado. he's going to come out, heavy handed government, lots of regulation. she is sijing out the drug companies. there will be more of. that she is not as left as sanders. >> growth andn income is the story of our time. that's story of this enjags. >> right.
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and the gop cannot win generically unless they deal with it. and the whole thing behind trump was he was understanding that and talking to the middle class. now that's all gone, too. >> here's the thing. as you know, and you have written about, that household income today is lower than it was ten years ago in inflation adjusted dollars. >> yes. >> but there are a lot of people who for example, i did a lot of reporting out in the field during the aftermath of the great recession, people who were losing their homes. that helped become the foundation of the tea party. i've been to tea party rallies and talked to people who have strong economic arguments for why they want an insurgency to the traditional gop. but the problem is that right now even the people who were part of the insurgency like cruz are not seen as pushing the envelope far enough. >> you are right. >> donald trump has the ball, he is running down the field and the reality is rubio is going negative because negative ads work. >> they work. >> just like racial appeals work. and also, this is it.
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by march 15th, if rubio or cruz doesn't have enough momentum, trump will have sewn up the nomination. >> did you read larry summers piece. >> i did. >> he said trump will keep an enemies list. says it is dangerous for democracy. is it that bad. >> people have said things like that. there is only one ronald reagan. i worked for reagan a long time ago. but during that campaign i heard stuff like this all the time. and the establishment hated it. i don't agree. i am an admirer of larry summers. i've known him a very long time. he is much smarter than i am. he may be the rt smaest human being on the entire planet. but this article was just hog wash, non-sense. it's just an attack on the republican party in particular. so the thing that he got right, 15% corporate tax cut, and the embellishments with repatriation and cash expense -- he got that
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right. because you look at the data, the middle income wage earner benefits the most from that kind of policy. but that's gone. we are not hearing about that night. >> summers is likening trump to huey long, general mccarthy and george wallace. he says, there is a growing sense that a protectionist demagogue could soon become presidented of united states it might tip a fragile economy into recession. are you buying into any of that? >> i wish he had mentioned the pro growth corporate tax cut. i think donald trump has got to clarify his position relative to china and other nations. now, when i interviewed him in manchester, nampl new hampshiew weeks ago he said he wouldn't put that forward as to a policy because i asked him directly. wall street is freaked out. i said what do you mean. he said it's an negotiating
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card. there is an interesting back story. the new york times meeting with him the editorial board and people want him to release the transcripts. we already know what is in the transcripts. i told byron, a good reporter for the washington examiners that he puts stuff out there because he knows he is going to negotiate a deal later. he is going to have to fill in some of those blanks over time. but i agree, the trade issue, the tariff threat, is unhealthy for mr. trump and unhealthy for the economy. >> let's also just talk about foreign relations. i got out of the train today to do a different interview at columbus circle. and i saw a group of italians booing at a trump hotel and tower. i mean, they were speaking in italian. never seen their version of what they think trump s. they were literally standing there booing. there wasn't a protest. they were just doing it. if donald trump becomes the united states how are we going
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to work with the eu. they are having their own problems with the problem brexit. >> interesting point. tie it off. >> i want trump to be tougher than recent president. i do. i want him to be tougher. i want him to be much tougher on china which lies, cheats, counterfits and takes intellectual property ryans rights. the question is how best to be tough. i agree with him in the sense of america should win again. but i don't know how we're going to do that. and that requires careful thought and careful rhetoric. >> without i go nighting a trade war. >> it would be nice not to have a 4,000 dow drop -- i'm not predicting that. a lot of people are worried about it. >> it will be an interesting night. thank you, we appreciate you being here larry. always great to see you. we want to you to know fbi director james comey has started his testimony in front of the
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senate house judiciary committee on apple. you can watch it in its entire right now on "power lunch".cnbc.com. in the meantime let's get to dominic chu with a market flash. anna corps pharmaceuticals not taking part in today's overall strong rally for stocks. this stock is near its seg lows right now despite fourth quarter sales that more than doubled on its sales for treatment of a toenail fungus. results missed forecasts and shares are down about 10% or so today. it's one of the only names on the biotech sector that has taken a huge hit today. the rest according to the etfs up on the day. >> thank you, that was fun. thank you dom chu. still ahead, why this to be best time to roll the dice on casino stocks. and making the case for valia
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valiant. we are all all over the super tuesday rally on wall street. here are the biggest winners on the s&p 500 right now. sea gate, gorvo, link on national. much more on the markets when "power lunch" returns. nvestment. by looking at global and local insights to benefit from different points of view. and by consistently breaking apart risk to focus on long-term value. we actively manage with expertise and conviction. so you can invest with more certainty. mfs. that's the power of active management.
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welcome back to "power lunch." i'm melissa lee. right now, stocks are sitting at session highs. the dow jones industrial average up by almost 2%. s&p 500 up 39 point a full 2%.
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wti up by 1.8%. due to stronger than expected manufacturing data. fed funds futures are pointing to a high leer likelihood of a rate hike in december. 65% chance right now, versus 30% chance seen on monday. pet codown 6.6%. med tronnics down. and first solar done by 4% at this hour. let's get to sue herera. >> backed by iraqi forces paramilitary troops we pelled and attacked by isis militants in the outskirts of baghdad. they describe the situation as under control. 20 militants were killed in the counteroffensive. a new york appeals court denying donald trump's bid to dismiss the fraud claims that the state's attorney general
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brought against trump university. the state accused the venture into misleading students into paying for programs that they thought came from a licensed university. the amount of g. also accused donald trump of having a significant role in the university's operations. albertsons announcing it will switch to cage-free eggs by 2025, including awful its affiliates. albertsons is the country's second largest supermarket chain. e-bay has teamed up with oprah's o magazine for an on line charity auction with more than 250 items including shoous, clothing and accessories going to the highest bidder. the money raised will benefit her leadership academy. that's the cnbc news at this hour. stacks are rallying on this first day of march. the all clear that the volatility is behind us. joining us is art hogan. and eric ristven.
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art, we have a nice rally going on today. we had a very long discussion with larry kudlow and other guests about super tuesday, about trump's rise in the polls. how important is the outcome of super tuesday to the markets here in terms of giving us some clarity? and could the outcomes actually hurt the market? >> well, they certainly can because i think you nailed it on the head. clarity is what the markets wants. we've had too many choices. we started out with 16 choices on the republican side. down to five. perhaps we get down to three after super tuesday. that's not enough clarity. super tuesdays have been important for the market when you have a decision, when you have a clear choice, when you come out of a super tuesday and the results say this is where we're heading. unfortunately, if what you have is a couple of candidates that still think they have a path to victory hanging on dividing up the non-trump votes, things become more muddled. my guess is the more clarity we get out of this, and we may get that out of the democratic side,
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but if we don't get it on the republican side, then you have got too many people chasing in the hunt and sort of dividing up what otherwise would be the establishment vote. >> eric, how closely are you paying attention to what's happen with the elections. regardless of what side of the aisle you are talking about, both sides talked about policies that seem antibusiness, antibanking and biotech for examples, does that play into your strategy on this super tuesday. >> not yet. we obviously need more clarity. i think what the market cares about more than clarity is certainty. i think it's going to have clarity that donald trump is going to be the likely nominee for the republican party. but i think everyone is uncertain how he will actually govern, what his policies will be. i think the market is not going to get certainty even if in fact there is clarity that trump is going to be the candidate. it's too difficult to try to figure out how to discount that
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into stocks. washington has to assume that wall street is gridlocked and will remain. >> it sounds almost like you say that trump is going to be a bigger wild card for the markets than hillary clinton would be. >> well, i think that there is more certainty around her programs. and i'll let the individuals decide what it is they think that impact will be on stocks. i think the reality is that given the overall environment in washington, i think it's going to be very difficult for a substantive change in meaningful government policy to occur in the next administration. i could be wrong. but right now trying too price that into stocks is not the best way to go. look at fundamentals and the fundamentals are good for stocks right now. no recession. i think earnings are going to come back. >> that's where i want to pick up with you, art. what the is your outlook for corporate earnings later this year? is the fact in a maybe the comparisons start to get a little easier in part a good
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thing? or are they really be better? and will be the able to lift equities? >> i think that's a great question. i think we need to look at this -- we entered this year thinking the s&p 500 might earn 25o $26. that's certainly come down. i think if you look at a consensus estimate for s&p 500 for '16 it's closer to 120. lighter than that. when you rationalize what a multiple of that would look like on the year end of 2016, $120, 16 1/2 times puts us at exactly where we are trading right now. there is no impact on lower prices on the consumer. and by the way the yield on the ten-year is going to below 2%. we're going to see some net benefit in the developed country from lower energy prices. we're going to see what happens in the wash out of the energy companies going out of business.
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rigs are laying down. the layoffs, will come this spring. i think we will end up with something north of 120 and a multiple north of 16 1/2 and gets us in a type of year where we are calling 5 or 6% with a 2% dividend and your average 7% gain. >> sounds simple. >> after the whole equation, you get me down to the 7% gachbl i'm with you. >> go to "power lunch".cnbc.com to see three other stocks that art is bullish on. we are starting to get news out of fbi director james comey's testimony down on capitol hill on apple in front of the senate judiciary committee. >> the fbi director is speaking right now in front of committee. and he is making the case that americans can really trust the fbi in this whole apple versus the fbi fight.
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listen to what he had to say just a moment ago. >> the fbi is not some alien force imposed upon america from mars. we are owned by the american people. we only use the tools that are given to us under the law. so our job is simply to tell people there is a problem. everybody should care about it. everybody should want to understand if there are warrant proof spaces in american life, what does that mean? what are the costs of that? and who you do we think about that. >> interestingly, comey also sought to lay out the idea that you can trust apple as well even though part of allen's argument here is this software is too dangerous to create because it could escape from apple's hands and get out into the wild. comey saying you can trust all the data on the i cloud, trust this couple to protect this piece of software even if apple is talking about it escaping and becoming dangerous. more as this testimony goes on. >> thank you very much eamon javers. >> we'll continue to monitor
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this hearing and bring you breaking developments. we know that apple ace jen waal ral cowl counsel is expected to testify after director comey. you can watch the hearing in its entire on our website. wynn up nearly 24%. this after new gaming figures offer hope. should you double down on wynn or any of the other casinos for that matter? the analysis straight ahead on "power lunch."
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welcome back to "power lunc lunch", i'm michelle caruso-cabrera. yahoo might write down the value of tumbler which it bought two years ago for $1.2 billion. an international investigation into a solar company's finances continues. marathon oil planning a secondary offering of 135
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million shares. and will use to proceeds to strengthen its balance sheet. the stock is lower by more than 3% perhaps on the tee lugs. casino stocks are rallying. this after mccow had their best run in almost two years. a gain of 1% is the smallest flop drop in 21 months. we've had a small decline overall. we didn't have a comeback this the vip revenue. does that mean the mass market is a bigger force in this turnaround? >> it is. for the first time ever it is starting to be more of a majority of gross gaming revenue. and this is going to tin as the downtown mccow area is opened
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up. >> it was a lunar new year, bear markets will say, it is a note going to be a sustainable trend. are you convinced? >> i think this is a longer trend of stabilization that we've seen over the past probably four months. and if you listen to all of the calls by the operators, they are seeing promising signs, whether it's new player sign ups, traffic volumes, and a shift generally from vip to mass which come at three times the ebitda margin that the vip business does because you don't have to pay the junks junkettes. >> we spent an entire show talking about political uncertainty here in the united states. when i look at mccow, that screams having to be reliant on what the government decides any given day in any given month. we've seen where the gaming revenue fell because they decreased the number of visas.
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how to you get your head around that when traditionally you should be looking at stats that are more meaningful. >> definitely news flow here is very important and these stocks have a lot of -- or have had a lot of disruptions associated with visa or the anticorruption campaign which i think really started in earnest back in mid-'14 where you sea saw the geeardy declines come on. >> the reality is, if you are chinese you don't want top to be seen as conspicuous because the nail that sticks up gets hammered in an area where corruption is targeted? >> that's true. but the casino is saying you have regular players and if you aren't doing anything wrong you have no reason to be afraid. i think the government has made inroads in terms of loosening visa restrictions and loosening
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up document checks at the border showing that they do want people to travel, the government wants to switch to a consumer related economy and traveling and gaming are all part of that. >> as an investor i would say i only grant this sector a certain multiple because of that and there is nothing you can do about that. is that how people think about it? >> that's definitely how we think about it. you are an oro gonely. and it's the only place to gamble in all of mainland china. >> until japan opens up. >> but that won't happen until 2020. >> or the philippines. >> the philippines, it's still -- >> still early days. >> early days. >> still ol gonely, that's a plus. >> ebitda multiple has to be taken into account. and then also growth trends in the chinese and asian markets that are much more substantial than enough the u.s.
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>> last quick question, what's your top pick given massive run over the past month of all of these stocks into these numbers? >> i still like mgm quite a bit here. >> so the least mccow centric game you like the most. >> because i think a lot of the run up has been around mccow. mgm created a good quarter. i know there were on theics that made it not look as good. but they are going to ipo their property r eerks it soon. you have cost savings measures that will grow ebitda by $300 million over the next couple of years and vegas is doing very well. and their property in mccow is positioned in the middle of coti, and it's going to more than double their footprint there. >> adam thank you for coming by. markets are in rally rode immediate on this super tuesday. the dow up 330, leading the blue chips today, jp morgan, apple, chevron. more on the market stayed ahead.
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please stay with "power lunch." . . that was a long time ago. you know, they made a movie about it. you were shown to be quite skilled at fraud. times change. now i help catch the bad guys. me too. i help banks detect fraud by applying cognitive analytics to public financial records and social media. so if somebody said, "catch me if you can...?" we can. let's do a sequel. it could be a buddy movie. i would like to have a buddy.
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supply welcome back to "power lunch," everybody. i'm tie tiyler mathisen.
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stocks at session highs, up almost 2% on the dow. more than that on the nasdaq. more than 2 pierzynski% at 18716789 i remember 1971, the year i graduated from high school. utilities are in the reds red for the day. look at gains, better than 2.5%. s&p 500 winners, console energy, transocean, sea gate technology, returns of better than 6%. e ferks f gainers, the cider consumer discretionaries, the ibb up 2.7% and the s&p bank index or sector etf up almost 4%. we'll be right back. people talk about "deals"
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. we should have more leap years because that seems to mean the first day of march is a good rally. the stills up 311 points. the s&p higher by 2%. the nasdaq higher by 2%. the russel up 1.5%. let'sity get a trader's take on the rally from the floor.
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gentlemen, welcome first. kenny, what's driving it today? why? >> listen, i think it's all technical. i think we've broken through resistance on every single index, the dow, the nasdaq, the s&p, oil, the russel has all broken through the 50 day moving average which has struggled for a while. they have all now clearly broken through and there is a vacuum, a void between now and the 100. i think you are going to see the 100 moving average, and there it should hit resistance until the market gets comfortable with the latest economic data which appears to be stabilizing, maybe. >> steven, a technical turn or more? and you can feel free to use your hands? i'm going to use them as much as i can. >> 1971 is a technical level. we have met resistance. we've about stuck there for three hours. today is about inflows and improving macro. the consumer spending number for january was incredible for
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january. and we have revised december higher. look at the pce and the cpi. the core numbers this both cases hall of fame came in a little hot this month. i think we are on track, although it's tepid, and the fed may eventually not this month but have to raise rates. maybe next month. >> it's funny you bring that up. melissa lee raised that earlier. i was surprised to see the markets doing what they have because at the same time when you look at fed funds futures they have increased when they expect rate hikes later this year. and normally that would have been bad for the market. >> i'm not sure of the concludes. i don't think there is going to be four rate hikes. one probably in june. and then the second one is probably in december. we are not getting -- for sure we are not getting four rate hikes. >> i think it is a good sign that the market can go up even though on the same day that expectations have risen for a
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rate hike. that hasn't been how it's worked. >> no. as people get more comfortable with the state of the macro data and it appears it is getting better then we should be able to raise rates by 25 basis points and not have a complete meltdown. >> we are also pricing in what the ecb is going to do next week, custom is certainly an easing direction. >> when i look across the sectors we are seeing a selloff in the bond market but in the other safe haven sectors we are not seeing as strong as a selloff as one might expect. ual utilities down less than 1 pierzynski. telecon by half of a percent. and gold is down reluctantly. what does that tell you in the midst of the rally. >> i've been defensive all year. i still reich goad. i raised my allegation just six weeks ago. i'm not going to get out of it.
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but i'm thinking about it. and i'm going to get more aggressive with the 40% safe haven i have right now. i have leaked into the energy sector two weeks ago and i'm thinking about beefing that up. >> melissa to your point, i think people will be easier to give up that defensive trade once they feel really sure and confident that this market is going to go up and through. >> what is that, above 2,000, 30 points higher in the s&p. >> above 2,000 with real volume. it can't leak through. it has to be up and through with real volume in order to get that change of psyche. >> we're going to be volatile for quite some time. we are not going to feel confident even at 2,000. >> steven, kenny, on that note we leave it. >> that's what makes a market. it's 2:00 p.m. eastern let's reset the markets. we have a rel underway. the dow, the nakts, s&p and russell 2000 deeply in positiver
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to. dow near lee 2%. the nasdaq at 4666, a gain of more than 2%. a gain of 18 points for the nasdaq. big move there. the s&p sitting at 1970. higher by 38 points a gain of almost 2%. and the russell 2000 higher do 1048. the blue chips leading the way. all nicely higher. goalman sacks is higher by more than 2%. almost 34%. the biotech etf up by 2.3% right now. however, valiant has more drama vouning the company's accounting issues, drug pricing and now it has political issues. meg joins us. >> mike pearson finally coming back to the helm yesterday. it's been quite a two days back for him.
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just yesterday withdrawing the company's guidance after pearson coming back. delaying fourth quarter earnings. . late late night in a filing saying they are not going to file their 10a within their 15-day extension period as they continue this investigation into filla door. they are facing a scc potential violation and they have $30 billion in debt. what else could happen to valia valiant. >> hillary clinton can happen. she is releasing a campaign ad today specifically targeting valiant whose migraine drug went up. >> the company is called valiant pharmaceuticals. i'm going after them. this is predatory pricing and we're going to make sure it is stopped. i'm hillary clinton and i approve this message? we remember hillary clinton's tweet it was the tweet heard around the world for the biotech
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industry last september on drug pricing. valiant named specifically. valiant says there is a jen airgs eric version of that drug available. most people are on that and it is much cheaper than the drug they sell. >> are these strong hands throughout this storm? valiant was down 18%. the largest shareholder lost $524 million. valuic lost $323 million. when you tally it up, top five, moor than $1 billion lost. >> there is a lot of uncertainty. folks holding this for a while are feeling a lot of pain. scott ackman telling scott wapner he believes pearson's return will be a relief to all the uncertainty. folks are very concerned about what else is going to come out, what we're going to see in the 10k, are there further issues. >> meg stay here, with valiant
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stock down 25% over the past two days alone is it time to cut losses or is this a buying opportunity. >> joining us patrick hazer, portfolio mag manager at braend wine. he has 1.3 million shares of valiant. he says the stock is cheap. it's a lot cheaper since we last talked. are you adding to your position at this point? >> we are adding to our position, yes. >> why? >> well, you know, one of the things that we have, there are a lot of people who bought at 150, 200, 250, aastronomical figures. our first purchase was under 80 so we don't have the baggage that a lot of people are carrying. the scc investigation, the washington journal is rrtding it's related to filla door. we're getting headlines over and over on the same seven percent of revenues. every time i've been on the show, i said 93% of the revenues aren't the issue here. this is a real biz. we strip out the revenue, strip
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out potential fines for the investigation and we still get a stock with a five, six p/e. even under a stress scenario. exceptionally cheap, real cash flow, real products. people are afraid, there is uncertainty, they canceled the earnings call, the investigation, the advertisement -- politics are getting involved. but this is a time where investors have to look through the controversy. when you do that, there is a good business. real cash flow. 30 proukds of $100 million or more. some companies are dependent on one or two products. this is a vie dersified business. daush and loam is own by valiant. an over-the-counter skin care cream is owned by valiant. >> what is your thesis on valiant's growth going forward? this seems to be the concern of investors.
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if they can't get a handle on what the business looks like they are not going to acquire mi more as they attempt to pay down the $31 million in debt. >> if we think about branned pharma in the past we worry about patent cliffs. there is knots any patent cliffs out there. valiant sells consumer products, generics. their branned jug has a patent challenge but the patents look good to me until the mid 2020s. >> their business model used to be very different. and because of the situation for example, with hillary clinton, because remember fast pace acquisiti acquisitions, cut the r and d. tax arbitrage, raise prices. that was the model. they can't have that model anymore. how do they pay back that $31 million that meg is talking about? >> i think there is too much emphasis on parts of that model. i think that zi factionin is a
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million dollar strug not a price raising story. it is a model that is built through acquisitions. if we were to break up the business and do a sum of the parts, stock is higher if you were to sell all the assets they have. certainly, they can't use the stock as currency. they continue to do acquisitions. i think that was a great marketing story in many ways i think many look at mckenzie and pearson and say that's what they are good at. they brought good assets and we think they can grow from here even if they don't do another deal. >> how much in terms of stock price are their legal issues costing them today? and what's their ultimate risk from that. >> the first part of that question, how much it's costing them is very hard to answer because it looks to me a lot is priced in. that's subjective depending what multiple you put on it. let's look at how much the legal issues could cost them. last fall about a month before
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filla door broke into the open there were two settlements by pharmaceutical companies prosecutor fraud, novartis and allergan. $100 million fines, i don't think they are comparable because valiant doesn't have government business. i don't think in -- and those cases generally did. i think the kind of fine you could be looking sat several hundred million, that probably work itself out over a period of five years. i've heard people talk about a glaxo submit klein fine of over a billion dollars, but that's a dishonest comparison. >> i'm guessing he when started getting into valiant at 80 you didn't think it was going to get this bad. at what point do you say i do better elsewhere? where they are not pulling guidance where i'm certain about their business model. >> certainly when we started
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buying at 75 and 80 we thought we were buying for less than its worth. but as valiant investors know things can get worse and the market can be irrational. >> the answer is there is no level? you are sticking with it? >> right now, we haven't seen anything that damages the thesis. i mean the issues that keep coming up relate to filla door. the lower it gets the cheaper it gets. if something were to change that changes our thesis then you evaluate the new information at that time. when we bought it we had a tough time getting earnings below $10 a share in a stress scenario. and it is 61, 62 today that's a six p/e and that's a stress scenario. do i think it's going to be cut all the way down to ten? no, i don't. if it gets cut to that level then we'll evaluate it at that
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point. >> patrick hazer with braen wine. >> he was tough. he took it. >> the side slab there, technical tv salk said he owns in his his family. >> grilled apples on championship by a partisan effort underway to help resolve the conflict between the government and the tech giants. legislation has been introduced for an independent commission on technology. joining us is senator warner. you were scheduled to be with us friday but we had news imperative that we had to answer, namely mr. trump. >> you mean there is other stuff going on? >> there was other stuff going on today. it's good to have you back. >> thank you. >> i get the idea of having a commission. it's the kind of thing when we have problems or issues we have to address.
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why did it take an event like this to get us to that point? wouldn't it have been better to have this commission, three, five seven years ago? >> amen. we should have had this commission three, five, seven years ago and mike mccall and i were doing a bipartisan effort. we started in december. you know, his backgrounds is law enforcement. my background was tech. and i think both sides are talking past each other. i think both sides have gotten into an adversarial position. we see one court in california taking one direction another court in new york taking another direction. and i think this whole notion that we're going to redebate the basis of encryption. i mean encryption makes us all safer, both personally, financial information, intellectual capital, national security. but we've got to make sure that we get folks in a room and as you said if we had done this three years ago we might not have this debate today. the challenge is going to be if we get this commission going, how do we make sure that the
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output would actually be followed? because as somebody who again came from the telecom world, this is a very different kind of network with the internet in 2016. and as we move into the whole internet of things and we have sensors on all kinds of devices this problem is going to get even more complex. >> they might know when i open my refrigerator down the road i suppose. >> the refrigerator, vacuum cleaner. >> how many times i home my refrigerator. senator at the risk of asking you a question you may not be prepared to answer or who choose not to, as a former technology executive, where does your heart lie in this debate between the national security and personal security? >> my heart lies with keeping americans safe, both domestically from crime and from terrorists. it's also about making sure american innovation continues to lead the world and that we
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maintain our constitution principles. i don't think those are mutually exclusive. my fear is if we have a one-time static solution that with the nature -- the international of the internet, you could end up with two things, balkanization of the internet and different countries trying to build out separate networks and you could end up pushing the criminals and terrorists to foreign based hardware and software. i think there is a collaborative way to get this done but it's going to first of all require all the interested entities actually forced into a room. i've had people personally say get us in that room because we are talking past each other at this point. >> there is a lot of discussion whether or not -- you as one of the cofounders of nextel you have seen considerable change in the tech sector. i look at this discussion and i wonder if in a few years we're going to laugh at how simple it
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was, how quickly it became a moot point because somebody out there has already managed to unencrypt the phone because there is a lot of smart people out there or we are going to be at some other place technologically and this isn'ting go to be relevant. >> i think we are going to be moving more into the internet of things and that's doing to open a can of worms that makes even this particular issue look small in comparison. and can beget a little bit ahead of it. that's why this commission is digital security. not simply encryption. but we have to deal currently with both hardware and software recognizing we can't go backwards ten years ago. we can't go back to a single network that was top down as opposed to a distributed network and the nature of the internet and the way traffic flows today. i think there is a collaborative way where we can keep americans safe. i think encryption will be part of keeping americans safe. but the current state of the
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debate where both sides have gone into their corners is not going to get it done and not going to solve the problem. >> keeping americans safe is a somewhat subjective phrase. i'm wondering if you are concern about what happens here in the united states opens a pandoras box in terms of what happens overseas and what other foreign governments might force tech companies to do in their pursuit of keeping their citizens safe, which may not jive with what we consider keeping citizens safe, so to speak. >> absolutely. the whole notion that we can solve this on a one nation only just doesn't completely understand the nature of the enter net or for that matter the nature of the cloud. and my fear is if we take a quick action that's not fully thought through beyond what may happen internationally, what will happen just here in this country is you will see the bad guys simply move to foreign-based hardware, foreign-based software. and that still doesn't answer
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the problem what happens if somebody buys a phone, unlocks it, and imports down encrypted software from the web. i think there are tools that both sides can get at. i sit on the intelligence committee, comes from a tech back fwrounlds, real we have to have tools for law enforcement. i think a lot of these forces are talking past each other and they haven't been forced into this room candidly over the last couple of years. >> senator let's talk about something really fun. let's talk a little bit about politics. >> hold on. substantive issues about national security are going to get trumped by the food fight of elections? >> i don't use the word trump anymore until that context. anyhow, you have endorsed second clinton on the democratic side. i assume you think it's going to be a good night for her. let's talk about the leader on the gop side in your state of virginia. 538 says he has basically a 72%
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chance of winning in virginia tonight. what has he tapped into in the state? and is it a risk to political incumbents like you? >> one, i don't think you can unestimate the frustration that's out there. and a lot of that frustration is being driven by the fact, let's face it -- congress hasn't gotten a lot done. and this kind of effort we got on encryption that's bipartisan actually in the house and the senate is an exception not the rule. the unfortunate remedy that some folks are proposing, which is kinds of a burn down the house strategy, i'm not sure is going to get more stuff done. candidly, what i think gets more stuff done is actually collaborative efforts like what we are trying to work on, encryption and digital security. in virginia, i think it's going to be a good night for hillary. i think she is battle tested and ready to go. i do think there is a battle going on for the heart and soul
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of the republican party that in many ways was start by tea party movement. and people have got to decide and now we are seeing trump, and other candidates way outside the rails. whether that anger is going to translate into productive and frankly, we're seeing a lot of the traditional pro business republicans step up and say the bran of what mr. trump is preaching doesn't appeal to them either. i say that as a former business guy. >> senator warner always good to see you thank you for coming along today. taking a brief pause for a vote at the panel down there at the house judiciary committee. the second panel, which will feature apple's general counsel is scheduled for roughly half an hour. you can watch the hearings if you would like to live on our website. not much going on right now. the website is "power lunch".cnbc.com. the yield on the ten-year note sitting at about 1.7 --
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1.82%. rising towed. still down 16% in the past three months even though the fed raised rates. coming up, we'll talk to an individual who has been right all the way down. but where does he think the yield is headed next? plus we're all over the market rally with the dow up 310. stay with us on "power lunch."
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all right spokes. a huge guest line up tomorrow on
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guac box. ken lang land again to, stan strucken miller and govern john kasich. that's at k47 a.m. eastern time here on cnbc. >> that's going to be great. also great today, stocks rallying, sharply. as often happens when stocks rise, bonds fall. that is happening today. when the price of a bond falls its yield rises, the yields on the ten-years hitting 1.8%. our next guest said it would fall below 2%. when it hit 1.8%. he said it would go to 1.5 now. how far can the ten-year yield fall? where do you think it goes to? >> i think the ten-year can go as low as 1%. we were at 1.83 a few minutes ago. when you have the german bonds one through nine years at negative yields and the ten-year
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bond at ten basis points and italy and france trading at yields substantially lower than that of the united states for den-year, you know that the ten-year yield is too high. >> because investors around the world say i'd rather by 178% and 1.7, and 1.6 and 1.5 because germany is giving me nothing? or is it because the economy will get worse and as a result bond yields will fall for fear of that? >> both of them play a role. one, there is a reallocation of assets away from europe towards the united states and second you have a safe haven play. the united states the ultimate safe haven. and you are having a safe haven which is yielding you more than riskier assets. so both of them are going to play a role. and the economy is slowing. we have seen that in a variety of ways. there is capital flight continuing on a monthly basis from china and the united
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statestates continues to be the major destination. so the global private seconder still finds the u.s. treasuries very attractive. >> scooping them up. >> that's the reason why i've been looking for lower yields. and nothing has changed. today's rally doesn't change that at all. >> what are the extrapolations from a yield that goes that low? dollar is lower? commodities high center what happens to all the different asset classes in your view? if i heard 1% i would think almost armageddon. >> terrible situation. >> and stocks would be bad, right. >> a terrible situation, exactly. >> i don't know whether it is arm get on or a terrible situation. i don't want to characterize it that way. in terms of you asked what happens to other assets that's easier to look at melissa. look at what happens. if you have a ten-year at 1%, the dollar is substantially stronger than it is today because the funds that are coming into the united states are going to boost the dollar
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and lower the yield. both of them are going to happen. the negative is going to be on the the equity front. that is the riskier assets, that is what you are getting out of in order to reallocate your assets. that is the signal you are getting from global markets that fixed income is going the do well at the highest quality level. >> so buy bonds right now. >> that's what i've been saying for two years. >> and don't buy equities even though they would be a tempting thought there that if i can only get 1% or less on my safe ikts securities i have to take a chance on the risk spem trum. if the reason for the falling yields less to do with falling economies. >> you put your question very well, tyler. i think the answer to that is if you thought that it is just a case of competition between bonds and equities, then clearly when the ten-year goes to 1%, then equities become very, very
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attractive. assuming no change in the equity price at the same time. however, what is also happening or would be happening at that time is that the economy is slowing. you have lots of signs from the global economy that are negative which affect the equities more than that. and don't forget that the inflation rate is not going anywhere in a hurry. we just found out that the euro zone inflation rate is now negative. we have negative interest rates. and i am looking for the fed to cut interest rates, echbs oechtually if the dollar as a result appreciates to 95 or 90 cents to the euro. then you are talking about negative interest rates in the united states also. you can't stay out of it unless you want a dollar which is overly strong and that exports are hurt too much. >> big implications. nks thanks for your predictions. >> thanks very much. take a look at oil, jumping
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as the final trades are crossing for the day. we'll head live to the nymex next. and look at big gains across the board. alphabet, apple, microsoft. technology is doing well in today's session. and financials. jp morgan, look at that gain, up 3.9%. we are backing off the session highs of "power lunch" we'll be right back.
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more headlines now from fbi director james comey's testimony on capitol hill. let's get to eamon javers. >> hi michele. fbi director james comey testifying here. they are taking a quick break here for votes on the house floor. just before that break comey was in an interesting dialogue with congressman darryl icea of california. icea seemed frustrated that in his view it looked to him like the fbi hadn't done quite enough to figure out whether or not it could get into this disputed i-phone on its own. >> i came out of the securities business and it defuddled me you haven't looked at the source code and you don't understand the disk drive at least to answer my rather dumb questions, if you will. you are ptd anding somebody to obey an order to do something
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you don't want to do and you haven't figured out whether you can do-it-yourself. you just told us you can't do it. but you didn't ask for the source code and didn't ask the questions i asked here today. >> the time of the gentleman has exspishd and the director is permitted to answer the question. >> thank you mr. chairman. >> comey responded to icea's questions here by saying, yes, the u.s. government, the fbi has asked all other aspects of the u.s. government presumably therefore the nsa whether or not they could help him get into this iphone and they couldn't do it and they wouldn't be in the litigation in the firstace place if the fbi felt they could do it themselves. as we know, apple's source code is one of its most prized business secrets. you can imagine there would be resistance from apple for handing over their source code for the iphone to the fbi. the oil markets are closing for the day. let's go to jackie deangelis at
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nymex. >> 34.40 is where wti finished the session today. crude moving high in lock step with equities today. they think the equity market is the momentum that drove the crude trade higher because there wasn't a catalyst. they are looking for one to take crude over the $35 mark. api is out this afternoon. department of energy tomorrow morning as well. estimates are all over the place. we are looking to biological a plats of 2.5 million bears but i've seen 4.5 to 5 million as well. as api and department of energy come into line we've seen what happens. that's one possibility. of course they don't always move together. back to you. >> thank you jackie. let's bring in dom chu for a market moving news flash. >> watching what is happening with shares of tesla. they are taking a hit. this is in reaction, you can see there down by 2% just in that right-hand side there, the sharp
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turn lower here, this on a citron report. the noted short selling firm. they have a book, portfolio they handle. they swetweeted out that citron shorting tesla. they say supply and demand should take to $100 by year's end. news flow all around does not look good for stock. that tweet, whether or not you believe or put stake in christian itron, that's what is moving the stock lower. they have put a $100 price target by the end of the year. their shares are $187 and change right now. they don't say anything more than supply and demand problems, news flow all around doesn't look good for the stock. interesting here. the stock is down 20% already year to date. 6% over the past year. >> this is the research put out. a lengthy research report on vallient which brought vallient to its recent october fall low.
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it also put out extensive research reports about other stocks. it is unusual for them to simply tweet out a short position with nothing else to back that up. >> we are waiting to see what the full report looks like when it does come out. >> it hasn't dropped yet. >> all it is is the tweet and reaction, what is happening with this particular stock. that's the reason why we're seeing a lot of this moving lower here guys. >> a $100 price tag would be painful. >> it would be painful. not painful for the overall market today. stocks in rally mode. dow industrials in positive territory by 1.8%, a gain of '02309 points. "power lunch" will be back in two minutes.
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at ally bank, no branches equals great rates. it's a fact. kind of like bill splitting equals nitpicking. but i only had a salad. it was a buffalo chicken salad. salad.
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hello, everyone. i'm sue herera. here's your cnbc news update this hour. the syrian president describing the ceasefire as a glimmer of hope. while accusing the open sigs of violating the agreement. meantime, the opposition accuses the syrian government of breaching the truce. but international observers acknowledge violations. they say the level of violence though has decreased significantly. 18 people were killed in aman after a multivehicle
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collision involving a bus carrying 45 people when it collided with a truck and a four wheel drive car. the scc announcing qualcomm agreed to pay 407 million dollars that it -- $7.5 million for violating. look at those, so cute a. california mom is dog tired after delivering 17 baers babies. those babies as you can see are sheepdog puppies. 11 boys and six girls. all are doing well. eventually they will be sent to farms in the napa valley area to work protecting livestock. they are italian herding dogs. that's the news update this hour. >> can you imagine how hard it is to name all them? 17 ims in a. one through 17 is my answer. >> exactly. but then you are going to get an argument over who is number one.
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>> good point sue. thank you. >>. it's a great day for emerging markets as the s&p rised 2%. the emerging market sector is up 3.5%. let's discuss that. it's been a good month for emerging markets. for the months it's up by more than 4%. what is driving this? is this really a high conviction trade or is this a reversion to the mean money flowing into something that has been beaten down. >> the emerging markets have definitely been beaten down. and they continue to be cheap. what is driving this is commentary out of china that they can continue to increase stimulus as well as oil bottoming out because saudis saying they may freeze production or opec may freeze production. i'm going to say neither one of those is good enough reason to dive into emerging markets. these are falling i have been
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noose. they are goad stories, but there are babies being thrown out with the bath water. it is not a rising tide lifts all boats type of situation. china, even though they may increase stimulus a lot is being used to roll over old loans and pay off debt. that's not going to increase demand. and oil frozen at high levels, that just means that yeah it might start to rise but it's going to rise slowly and i think that that story is going the take a long time to bear out. >> kathy, are you also skeptical? do we really just need a recovery in commodities forward for emerging markets to be a convincing trade? >> i don't buy this move. chinese data manufacturing has been delayed. the only reason these emerging market nations stocks are rising is because china is pressing the pedal to the metal with the reduction the bank reserves need to hold. more liquidity is good for stocks but at the end of the day china is growing at its slowest
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pace in 25 years. based upon the previous moves of this nature that they have taken it hasn't increased investor economic activity. i think the chinese government is going to need to do more. i think there is going to need to be more outflows, which means a weaker yen. that means their purchasing power is going to be less as well and that's going to hurt all the emerging market nations. >> gina and kathy, thank you for your thoughts. for more trading nation, go to trading nation.cnbc dot com. meantime, "power lunch" is back in two. now the latest from trading nation.cnbc.com and a word to our sponsor. >> some of the most successful investors use fundamental analysis to make sure they are picking quality stocks and technical analysis to collect entry and exit points. when you are formulating your trading plan consider using a
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s&p 500 by more than 2%. nasdaq more than 2.5%. gas down 25% this year. our next guest is going to come on the show and make a bold call. chris fertileson joins us now. make the call. you say we've seen a bottom? why? >> absolutely. 17 years since it has been at this price. there is two main reasons. i think one of them is that as we become exporters out of houston and south carolina and new orleans, all of a sudden it's a whole new view. we become a world power as far as setting the price for natural gas. and with natural gas landed like three or four times more in asia it really is an opportunity for the u.s. to have a hand in the world events as far as the pricing of natural gas is concerned. the second area i think is consumption. it's been spotty and up and down. but i think you are going to see more and more utilities change
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to natural gags as their fuel of choice that meets the, e.p.a. requirements and also class a trucks. increasingly we see municipalities changing to using natural gas. we have a' got a lot of force behind it at this point. >> these are things that have been going going on a while. let december or so we were at levels we hadn't seen in 17 years or so. most recently those levels lower. it's not acting based on the fundamentals you are laying out. >> well, i think you have to take a view that's a little bit longer than what the daily trade may be. and as far as the fundamentals are concerned. you will see the rig counts go way down. what i consider to be unconventional natural gas sources have decreased. supply and demand are coming back in balance. at that point you will see pricing power for the people in
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it. >> give me names. >> schenn ear, range resources, cabot, range resources and cabot has more speculation. but you certainly were not paying up and by the end of the decade you could be fine. you could buy conoco phillips if you wanted to have a large name. >> how long do you have to wait do you think? >> i think we're going to see it by the end of the year. we'll see these names higher and natural gascon sumg will be higher. >> okay. >> all right. chris. thank you. >> krirs berttleson global financial private capital. keeping an eye on shares of tesla. we just had dom chu on. that stock falling hard after christianor, the ron revealing a tweet they are shorting the stock. keep it here. "power lunch" will be right back. ing our research to find the best investments. by looking at global and local insights
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the gap if retirement security between blacks and whites in america is extremely wide. sharon epperson has a look at what some financial advicer groups are doing about that in bridging the divide. >> white families on average have $100,000 more in retirement
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savings than african-american families according to the urban institute. this racial divide in savings and investments contributes to a widening inequality in overall wealth. >> job changes, layoffs, helping kids get through college, life happened. >> cindy and ron williams both 57, admit they are not as financially secure as we want to be. >> the vision we had 20 or 25 years is not the reality we live now. when you make missteps midway, they become more critical the older you get. >> ensuring a secure retirement is a struggle for many americans. but the problem is much more acute for blacks than whites. 62% of black working age households have no assets in a retirement account, compared to 37% of white households, only
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25% of black households have more than $10,000 savings. a significant earnings gap between blacks and whites is to partially to blame for the divide but the wider and growing wealth gap is also due to key disparities in investing. african-americans have far less money in the stock market. a recent survey by aerial investments among households with incomes of at least $50,000, only two-thirds of blacks own stocks or mutual funds compared to 86% of whites. >> for african-americans, our wealth has been understood as things that are tangible, like homes and so what we have seen with the housing crisis it's been harder for african-americans to rebound. >> rose set ta works with clients, including the williams' helping them understand how to invest wisely to build wealth. >> when you make strong clear financial decisions, the
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momentum really allows your wealth to grow exponentially. >> braxton is president of the association of african-american financial advisers. a group working with the financial planning association, the largest membership organization for financial advisers to bring more blacks into the profession and bring financial advice to more african-americans. >> financial advice certainly will narrow the wealth gap. >> only 6% of u.s. financial advisers are black. fpa chair says increasing diversity among financial professionals helps more people. >> they are able to now take that message back to their communities and help those individuals close that gap. >> the williams' agree finding a financial adviser who understands their needs has helped them build trust to plan together how to increase their wealth and eventually retire. >> little bit of pain in the beginning but it's worth it. >> still only one in ten blacks currently works with a financial
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professional compared to almost one third of whites. that report also found that blacks are more likely than whites to describe themself as savers rather than investors. for more on why the williams finally decided to hire a financial advicer and see all of our story, go to cnbc.com/bridging thedivide. >> great series. >> did you have a question? >> a lot more online. >> super tuesday, living up to its name. the dow industrials up about 320 points, that's almost 2%. also by the end of the night the presidential picture, the nominee picture could get a lot clearer on both sides of the aisle. power lunch will be right back. victoria stilwell, you appear on tv working with canines. are you a dog lover, watson? i do not own a dog. but i work with veterinarians.
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how do you do that? i help them analyse over one hundred thousand pages of medical studies. that's great... 'cause they can't exactly tell us what's wrong with them. isn't that right, rusty? rusty. who is a good boy? who is a good boy? you are. yes, you are. watson, i think you need to work on your dog voice. wbut if we want to keep the soda pop flowing we need fresh ideas! got it. we slow, we die. what about cashing out? no! i'm trying to build something here. how about using fedex ground for shipping? i don't need some kid telling me how to run a business! i've been doing this for 4 long months. fedex ground can help us save money and deliver fast to our customers. not bad, kid. you remind me of a younger me. aiden! the dog is eating your retainer again. let's take a short 5-minute recess. fedex ground is faster to more locations than ups ground.
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♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. it is super tuesday and by the end of the night we could have a lot clearer picture of who the nominees will be. john harwood finds himself in some frigid place, iowa or new hampshire is here with us here. >> spring time pli marys are better than winter. >> right and southern ones are easier on the soul, i suppose. >> looks like a big night for hillary clinton. >> hillary clinton across the board is leading except for vermont. >> i think for all practical purposes that's likely.
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i mean we go into tonight believing hillary clinton is highly likely to be the nominee and that will probably be affirmed by this decision. you can't count anybody out until more states have voted when we get through march 15th, more than half of the delegates will have been select the but she's well on her way. has there been damage done to donald trump with not distancing himself with david duke? >> donald trump i don't think has been hurt with this with his win to the republican nomination. the question is whether there's damage to the republican brand, why you've seen people like paul ryan out today, saying no place for that in this party. how much does that stick to republicans running for governor, house and senate elsewhere? we don't know yet. >> hillary clinton in theory, sews it up we think maybe because of super tuesday. we're waiting to see how well donald trump does, right? >> that's right. >> tomorrow we could wake up and say, this is it, he's the guy or
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wow, he didn't do nearly as well as people thought and we could be on for another round of figuring out who on earth is going to be on the ticket. >> michelle, here's what i would look for to say whether or not this is it, if he beats ted cruz in texas. if he can do that, he's been trailing cruz in the polls and cruz is making his last stand in texas. if he can do that, it's going to be very hard to stop him. you still have john kasich and marco rubio trying to make the case, but if he beats cruz in texas, he'll be on his way. >> the numbers don't show that at this point? >> the numbers show ted cruz ahead of donald trump, some show a very close race. primaries are volatile and difficult to poll. you could have lots of shifts. >> does rubio win a state tonight to stay in? >> all along he's needed to win states and hasn't done so. the argument that his strategist
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make and john kasich's strategist make, if they can make it to march 15th and win their home states, that will give them a chunk of delegates and tability to allow him to extend the context. >> "closing bell" starts right now. >> hi, everybody, welcome to "closing bell." what a rally we have on our hands today. >> i'm bill griffeth, investors welcome march with open hands, highest level since mid january. this by the way, the right now if these hold, this rally, these would be the best first trading day of the month in over three years. >> that's a roar, march coming

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