tv Power Lunch CNBC April 18, 2016 1:00pm-3:01pm EDT
that's true, but i think there's more down side. >> we know more about what they are, we know the cloud and when they lift it up once in a while and show us everything they can do, amazon is different. >> good stuff, guys. see you tomorrow. power starts now. dow takes 18 for the first time since last summer. >> welcome to "power lunch." i'm michelle caruso-cabrera along with tyler mathisen. melissa lease is live at the conference on the beach. >> and brian is in doha, qatar, oil is until pressure at this hour. much more on that in just a moment. we begin with a big story in the market. >> boic?
>> very excited. again, we did hit 18,000. pulled back a bit. i think the important think is we're approaching the historic highs. with a historic closing high. that was way back on may 19th. broad group of stocks leading, right now you have disney leading, and you have chevron and exxon. along with jpmorgan when would a great week last week. it's a pretty broad advance. energy is leading 3/1 advancing to declining, and it's been marching forward throughout the morning. the volume is on the moderate side, the vix is declining, and oil volatility is declining. i think that's the big story. people keep asking me, why are we advancing today? the smart money was short oil into the doha meeting, widely
expected there would not be any big agreements. you bet buy programs coming in, take a look at the sectors, energy are leading. that would support the idea, that we are getting some short coverings in the energy group. back to you. your other big story is, as, of course, bo been mentioned, crude bounding off a 7% drop after they failed to agree on a proposed output freed. very briefly, and right now it is, there is brent up 9 crepes. the other oy, west texas struggling to back above the flatline. right to brian sullivan live in doha, qatar. where high hopes for an oil deal quickly fell apart. >> tyler, thank you very much. there's a lot of talk about what did not happen here. we did not get a de, fair point,
but i think you also have to talk about what did happened? s about 50% of the world's oil capacity was in that room. interested in oil, energy and the economy came out. there were reporters everywhere. in fact when the minister walked in, there were a lot of smiles, talk that a deal was all but a done thing. you could see the interest still as the reports hounding that sawed ir al niemi, russia, a
number. for much of the day what also didn't happen? >> 11 of 13, libya. >> you're in iran, remember, we're very close to that country white iran was not here physically, after the meeting failed and end ed we it with th energy minister. i asked him, was iran there in a way, and his answer implied that while iran not here fully was indeed possible in touch with some folks during the meeting.
to go with the -- then it wasn't going to be effective. so we just -- we went back and forth. we were trying to walk a line, but it is clear unless you had any in the ballpark -- >> so worked going back and forth, working some alignment. i asked him a bit later on, was maybe somebody in touch with iran during the meeting, he set he did not know for certain, but it appeared rain had some negotiating ability at the table despite the fact they were not physically here. perhaps i get in a way the big winner is because their got is to get back, maybe 3 million a darrell. everybody else pretty much wanted a treat. iran is saying no-no no, we want to pump more oil. oil, of course, not falling day.
and i know you're going to talk about it more in just a second. there's month one big reasons, and that is kuwait. there is a big oil workers strike in kuwait by some can see maybe taken off-line in the near term, but keep in mind al arabiya reporting that they can get bulk to full production in a matter of days and may try to up output. i wouldn't get too comfortable on the price of oil right now. not trying to be a bear, but i will say this, when all the minister came out, everybody caught out with the idea, all right, fine. it's going to be every country for themselves, prices aren't going to stabilize, and they still reporting from doha, ka far, but a lot did happen, just
getting everything in that room right over there together, 18 major nations for 12 hours of what described as very tense conversations was in itself quite an accomplishment. >> as brian was highlighting, a big foss conduction on recall. because they have always said -- >> but as you heard, iran didn't even send a representative to the meeting. iran and saudi arabia are longtime bitter enemies the i sat down with the head of iran ace central bank to discuss the implementation of the nuclear deal, and the joint comprehensive plan of action, but of course we also discussed oil, and he said -- sanctions which is their opec quarter. he says it's unfair to prevent iran guess batting to at least that level. >> do you have any insight into what the thinking is in iran as to whether or not there could be
an great. >> translator: what iran is doing right now is trying to get back and secure a share of the market. it's in full accordance with the content of the jcpoa, and i think what saudi arabia is asking iran to do is not a very fair or long cal. for more on the fallout in doha and where oil goals from here, let's bring in john kilduff. founder of the rapt group actionened former energy advisers and jim smith, former ambassador to saudi arabia. john kilduff let me start with you. are there any surprises a deal was not made? tectations were high that
something would come together, this would be a past forward. that was the competing na narrative. obviously that's what developed. for me the biggest takearm is the ascendancy of mohammed bil salmon, and picked up the phone and said no deal. he was set to go with a production deal freed that would have excluded iran. >> there a dissonance in the saudi camp at all that you can discern here, based on what john kilduff just said? >> i can't verify john's comment there. what i can tell you is the saudis have always had great apprehension are iran's destabilization strategy.
on the each of president obama's visit to the region. they have clearly voted with their wallet and said security against iran's destabilization is more important than rising the price of oil. >> what do you make of the fact that the head of the iranian central bank blamed all the other countries for over-producing. already ignoring american production? it sounded look a very political pops to me. >> it was a political response, and you hit a key point. unlike five years ago when north america was a consumer, north america now producing more oil every day than does saudi arabia, about 10% of the global supply. so we like to think that opec is the driver on oil prices. in reality north america has
become the swing intent andi the market that will drive the prices. bob mcnally, where do we go from here? what's next for the major producers in terms of the outfuture here likely to end up with? >> we have a question of voluntary and involuntary out acing. will nigeria get the pipe did not lynn for exampled by noon? there they have an agreement to move the 100 kbd through through, and will the kuwaiti strike get resolved? so we have thinks involuntary disruptions which are one open question. second, voluntary -- all eyes on iran. last time -- can they do more? most people think more, they peaked in the near term. saudi arabia is at 10.2, prince
mohammed bin salman said they would go another 100 billion barrels a day immediately, will they gun it? i think the market will move away from the verbiage and look at the barrels and say are the invon -- is voluntary output going up? >> what do you think? does it go down or up from here? >> i'm going to parafrayed st.'s steen and say, lord make me bullish, but not yet. we cannot run the world on $40 owl i think we're in a boom/bust phase. but near term i think the market has gotten ahead of itself. is do hayes verbal interinterpretation was just that. they got lucky with some supply cuts and the market is starting to tighten up a bit. so i think we have some downside risk, some building stocks,
don't get me wrong, we're going back to 100. >> your eyes just moved up intensely there, john. the last word is yours quickly. >> i think the saudis are far from done as far as crushing iran, crushing or shale guys. we had a lot more down side. the diesel glut that bob just mentioned is part of that puzzle that i think is underreported and factored into the market, but certainly there's going broadband downward pressure. a lot of the production problem he just rempsed will get resolved and we'll be swimming in the oil in months to come. thank you all as well. so what have they legislators you're about to see in such a celebratory mood ahead? this is the brazilian congress. the latest on the power for control in brazil straight ahead. the dow back above 18,000 for the first time since the
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shares of bra ville onstocks higher. it's actually moved lower through the course of the day, but it had are up shatterly. let's start with neil scherring. what do you expect to happened next? will things get better? >> that certainly seems to be the view that's priced into markets. could pave the way for a more market friendly government, but really the political situation in brazil is very polarized.
i think -- that would be very, very bad, needless to say for brazil's economy. >> we saw a shatter rally early in the day -- >> tucked be buy the rumors, sell the facts. i think also there might be a growing sense in the market that perhaps the deal was good for -- and the price narratives had been running with may have been slightly complacent. it's a realize sax that some tricky terr ray lies ahead. what about the currency? what do you think happens here? >> i think the currency probably goes down. there's a number of reasons to be bearish on the currency. so the think the currency probably weakens.
over the next three months or so. but of course forecasting currency is a it -- game. >> thank you so much. luis, good to see you. do you agree about the situations with the markets? should you fade this rally? this was buy on the rumors, sell on the news? and it gets uncertainly? >> i would agree with that, but i would also think that there's starting to be a line for in the first half of may, we do have the confirmation from the senate side of that impeachment proceedings continue, that the vice president takes over, if he appoints a democratic economic team, i think there's probably one further leg you have in markets, so we're overweight in the local market based on that,
but i would agree with the comments said before, once comes after i think is still a huge question mark, and the fundamental dynamics in brazil are still complicated, so after that, i think you'll see more of a profit taking. >> impeach mant is a done deal, it sounds like in your view. >> i think so, at least for the acceptance from the side of the senate, looking at the polls, it seems that the votes are there. of course, afterwards starts the trial of britain rousseff, she could return to power if the senate does not deliberate, but the odds are within that time frame you probably would get a final vote to finalize this process. >> so you think po templeally another leg up.
certainly there's a risk for emerging markets, and this is -- match an improvement in -- which have not unfortunately turned around that much, but rather, you know, the sense that the acb is a -- and acb, dojling to inject more fluidity in the market. we're comfortable receiving rates in markets, and increasing overweights on the equity side and this really would probably continue through midyear maybe we'll take some of those down. >> thank you, luis. >> thank you. coming up, the layest salvo between apple and the government. that story is straight ahead. stay with "power lunch."
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at 103.38. baggage handlers and gate agents have approved new five-year labor deals which raised wages about 30% are and also included $100 million in a lump-sum payments. to the botched bond market we go. rick santelli is tracking the action. >> the sweet spot continues. the sweet spot seems to speak for the equity markets. if you look as an intraday of 10. the entire yield curve outside of 2s and 3s are slightly elevated. we haven't closed above 180 since the 30th of march. now, if you're looking at december 1st, high-yield atf, it's flying. that is the investment agreed. best price structure since the end of april. while stocks continue to creep up, the dax is over 10,000,
two-day at a dollar index is anything but enthusiastic as it continues to slip as we get ready for central bank activity. tyler, back to you. >> thank you very much. nick, as netflix prepares to raise its prices, amazon raising its stakes. the fight, straight ahead on "power lunch." you shouldn't have to go far
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hello, everyone. i'm sue herera hooer is your cnbc news update. an sxloigs in jerusalem aboard a bus injured at least 21, two seriously. police confirming an explosionive device was detonated, and the blaz amid a wave of attacks on israeli, mostly stabbings. hillary clinton greeten hospital workers in yonkers, a
day ahead of that state's all-important primary. a new poll says she leads rival bernie sanders by just two points nationally, that's down from a nine-point advantage last month. the supreme court taking of a controversial case, at issue whether president obama's 2014 executive, allows some 4 million illyle immigrants to stay in the u.s. and apply for work is legal. hundreds of demonstrators supporting the policy rallies outside the court. in new york thousands of striking verizon workers taking to the streets, along with elected leaders and supporters holding a rally and march in midtown manhattan. that's a traffic jam. 36,000 verizon workers walked off the job last wednesday. that is the cnbc news update this hour. i will accepted it back to you. >> thank you, sue. the dow crossed 18,000 today for the first time since june of
2015. how did that happen? dom chu is here with the stock that is have powered the dow thus far. >> we've been showing the heat map. we know that apple has been the biggest drag, but just -- >> today. >> just today. this is the one -- we were up about 104, 105 points at the highs so it pushed us just about to the 18,002 leave, just a peek at it. some of the names that contributed the most in terms of points for and against. that disney is worth about 18, 19 appointments of that 100-point run. home deo added nine. apple has been the biggest drag, down 13 points off that total. dupont has taken 4 away, so these four names have had the biggest impact on today's trade so far. tomorrow is going to be key, today and tomorrow. ibm, dow component, reports after the closing bell today.
it's a big weighting in terms of the price overall weighted index. big blue this afternoon expected to post 18.3 billion worth of revenue. of course everyone wants to see if it's going to stop losing revenue. goldman sachs tomorrow morning, $2.45 is the analyst estimate. $6.7 in revenues, sole they're going to have a huge part of if we see 1,000 again. heavy expectations. tyler? >> thanks, michelle, more on the march back to 18,000, and joins us is byrnes mckinnie, and eric ristaben. well kim to above of you. >> i see in my notes you basically have vigorous agreement that the market's gains will be tied very closely
to earnings, earnings will be in the 5, 6, 7% range, maybe at the high end, and that investment returns will probably by 5 to 6 to 7%, maybe a little more if we get lucky. byrnes mckinnie, how can i bead that baseline forecast? where can i get a little more return? >> well, for starters, the first thing you think of is you say, 5% to 7% returns on equity doesn't sound like something to wring home, but compared to other financial instruments that is fairly solid. so better returns in bonds, and i want to say if you want to exceed that, one of the best places to look is because you've had chairwoman yellen suggest that the fed is probably going to take a bit more of a cautious tone in raising rates this year, which suggests that the dividend
play probably still has a bit more to run, so fog -- like wise, if one juans to benefit, in the past decade and in the last several months you've seen a bit of a turn there, so positioning one's self in value stocks is another way you could expect to bead the middle, single digit range. nothing to sigh that a 5 -- in a particular year, maybe not blow out, but certainly nothing really to walk away from, how could i eke out a little more return? >> i like burns' idea of value. there are pockets in a cyclical basis, things like financial services and banks, but really you move offshore, and the equity mark is not your only dog
in the hunt. we like european stocks because frankly the cycle is more supportive and earnings are better and prices are cheaper in both europe. valuation emerging markets look really attractive. you better extend your investment horizon beyond the next couple months if you want to go long emerging markets, because they're cheap, there are still cyclical forces on the way out. emerging markets -- >> for the patient investor, obviously. eric, burns likes financials, he suggested one of the etfs, you like financials as well. were your picks there is travelers. why? >> well, travelers is a great value opportunity right now, you know, for investors to be a premier company. you can get travelers trading at a discount to their property and casualty insurance peers. they are paying a 2.5% or so d.
and they raised it. hiked the dividend each of the last ten years, that includes during the financial crisis. they have cut down their share counts. they've been aggressive about returning capital to shareholders. they just have a fantastic management team. they've generated -- they've been superior underwriters to their peers, and you know, during the financial crisis, they really avoided a lot of toxic cdos, one of the management team creedos is they would read underpurchase, but as a result outperform in bus times. we can really relate to that. >> burns mckinnie, thanks with nfj investment group and eric is with russell investment. go to pouberlunch.cnbc.com to see more. there are new develops in the ongoing legal battle between apple and the government.
eamon javers has the latest. >> the fbi may have found a workarc into the access into that apple iphone that's been the certainly of this recent battle, but this issue is just not going away. sigh vance jr. sell they're looking to get into about 175 phones and said a quarter of the 670 phones that the daye's office and cyberunit have obtained during the course of their investigation are locked. they said recently the pace is accelerates one out of two phones is inaccessible to law enforcement as they say there is evidence crucial, and cy vance jr. asked to think about the victims. >> apple has said it's moved to this device devolved encryption to protect the customers. what i want to ask you is for apple to be as interested in
protecting its customers who are the victims of crime, many of whom are represented by the groups here today. who at apple is going to speak for them? who at google is going to speak for them? >> just last week we saw microsoft sue the department of justice saying it wants to be able to tell its customers when the government has come and asked for access. often now there are gag orders on that appear the company would like to see those gag orders released. the government says that's a no-no. he don't want to tip off the bad guys before the investigation has actually found anything. so this is a battle that's just not going around anytime soon. instant reaction to apple's battle with the government. with former aol ceo steve case. melissa, take it away. >> hi there, michelle. we are here in miami with steve case, and also the chairman and
ceo of revolution growth. great to have you with us on set. eamon had a staggering statistics that one out of every two phones is -- where is the line? >> i think there's a balancing act. and we'll have more discussions. i understand why apple and innovators want to make sure they protect people's privacy and don't have back-door problems. at the same time i understand why the government has concerns why they're making sure they can protect people. it's great to have a dialogue. last week a committee was formed to look at this. hopefully they can find a balance. if you're investing in a private company and the fbi or other laws infers officials wanted information that the company had to unlock in some way, how would i advice -- >> when we were aol, we had issues like that all the time and we were kipt tiff when there
was a legitimate reason and court order, so it's a situation by situation. the issue around more dilock with the innovator and policy makers being a big theme. it's not just about the software, but how it's integrated, and that the create some thorny issues. >> tacking about child pornography, isn't terrorism obvious? >> it is obvious, but you have to look at the specific examples. my understanding is they do cooperate in lock with the -- there were specific issues ound this phone that created some challenges. those challenges are not going away. we node to embrace the idea there's a role for the government and for innovators, and how do you strike the right balance? >> the third wave is something you talk about a lot. in this they are wave, though, do you see privacy not being what it is today? will there be less privacy? >> as you see health care
fundamentalally transforming. even smart citying emerge. it's going to be incumbent on the innovator to protect those systems. the government will insist on making sure the city -- driverless cars are encrypted, because they don't want terrorists to hack in. and create havoc in these cities or transportation networks. the main point is these are complicated issues, it doesn't lend themselves to simplistic, but el need more cooperation in this third wave. >> i want to switch gears and talk about yahoo. the deadlines for bids is, and one of the lead bid is verizon. yahoo and aol at one point dominated the internet. and now look at yahoo. yahoo seems to be on a decline of some sort. what's your take. >> this is the danger of innovation. not yahoo specifically, but the first wave, building, and second
waesh has building apps and services. the third way will be integrating it in seamless ways, some big companies are rising in the third. some will fall by the wayside. you see companies that dominated the second wave, lie facebook didn't even exist. i'm sure that's true -- >> do you look at companies now and think that's going to suffer the fate of an although or yahoo if it doesn't do manage now? >> of course. are there companies that come to line? >> the most vivid example was the kodak company. eastman kodak really owned photography when i was a kid, and then went bankrupt, so every company needs to you did where the future is make sure they're making the investmented to have a bright future. there's a big battle brewing between amazon and netflix. julia boorstin assist the latest on that story. >> reporter: take a look at netflix shares down about 4%
today while amazon shares are nearly 1% hire on the heels of announcing that amazon prime will be available as a stand-alone streaming service. breaking it out from the amazon prime membership, which includes free ships, or now is also available monthly for $11. amazon is hoping to lure more original content. includingsh this new amazon service a direct attack on netflix as well as hulu and comes as it rolls out the price hikes next month for some of the longtime subscribers. amazon is undercutting net flex. the new service costs $is less than netflix's standard membership. i'm sure we'll here reed hastings weigh in when netflix reports earnings after the bell today.
ial boorstin, thanks so much. we are again joined by steve case, who was the ceo of aol and now the charm of revoluon. we always like to say there are going to be winners and losers. suv the way you view content and how it's deliver. >> sure. i think the opportunity in this third wave is not things like media and content that did get disrupted, but thing like education, and ereason lie conferences like emerge are so important, it's going to happen -- there's 13,000 people here in miami looking at what startups are doing across a lot of sectors. one of the hottest virtual reality companies is magic leap. they have raised over a billion of venture capital, so inovail is more broadly dispersed, and the third wave is going to be much more broad, including places like southern -- >> steve, thanks so much for
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medicine based on that. so one would think that you would have had that in place from the getgo. >> absolutely and probably the most devastating part of this is i thought we did. >> holmes doesn't believe her faulty results pun anyone's health in danger. she brought on a new lab director and expert medical board. >> do you think this company will survive? >> absolutely. >> >> no doubt? >> no doubt. >> i know what we've built and created and i know what it means to people. it's a change that needs to happen in the world. you may recall that just last week u.s. health regulators proposed banning holmes from the blood testing industry for at least two years because of the issues at one of her california labs. that is a very, very serious things for them to call to ban her from it. >> and an incredible comedown from somebody who was on the cover of many magazines, featured in the style sections
of newspapers. >> 40 under 40s kinds of lists >> there were a lot of people who wanted her to succeed, but this has been a tremendous -- >> to go from -- we've had. issues with drug companies having problems with production facilities, but i don't remember a personally directed call for a b ban. >> right. it's extremely serious. as zika spread to the united states, florida is right another front lines. we'll get the latest on the fight from that state straight ahead on "power lunch." we needed 30 new hires for our call center.
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where you can use all of our latest products and technology. and find out how to get the most out of your service. so when you get home, all you have to do is enjoy it. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. welcome back to "power lunch." i'm live at the emerge conference here in miami beach, florida. the zika virus wreaking havoc throughout latin america. dr. anthony fauci is heading up the national effort, and he spoke about it on "squawk box" earlier today. >> 'wes get into the summer months where there's more robust mosquito involvement here,
mosquito control becomes a very important issue as well as protecting one's self, staying indyers, clothes that protect the body, and insect repellant. >> i'm joined by the mayor of miami dade p cows, carlos gimenez. that this you for joining us. >> my pleasure. how by of a fear? >> we have mosquito it that carries the virus here, but all cases have been imported. there's no miami-born mosquito cases here. we have a mosquito control, we will augment or control. we do that through a contract, but we will be monitoring. we have responded to cases where they're talking about mosquitos. so that's what we're going to do. we're going to work with our florida department of health to make sure we educate our folks here, we know how to deal with
scouts here, so don't go out at dusk, do go out at dawn, because that's when they come out. these types of mosquitos, anyway. but we're ready, we're prepared, but there has been no -- no miami-dade born zika case yet. >> there are a lot of unknowns. you ask any doctor, and they'll give you various kids of advice, places that might be zika. there's a letter written to "new york times" on april 'by a professor of immunology, and he wrote that zika establishing a firm here in the united states it would be through miami and was shocked that owner 1.8 mill chron was dedicated to the control program. is under $2 million enough to battle a disease. >> it's just a plan.
we will take the measures necessary, add money as necessary to control the mosquito pop lace. 1.8 million takes care of the normal year. but also, some -- when you compare it it other agencies, you really can't compare. they have full-time staff. like i said, we contract for mosquito control. it's much more efficient use of our money, but we will alkaid more and more funds as needed. absolutely. >> have you seen a hit to tourism? >> no, but like we think -- we know it's very safe to travel to miami. like i said, there's been no zika infection here in miami that wasn't -- that didn't come from outside of miami. people traveling to some of the affected el areas, so it's safe to be here in miami-dade, and we will be on top of this issue as the months progress. >> speaking of tourism, you had a skirmish with carnival cruise lines. cuba is a very, very exciting
opportunity for many, and carnival saw that as well with cruises to cuba. you are cuban-born. >> yes. >> and mayor of miami-dade, and we had we don't want your cruises unless a cuban-born person can go on the cruises. >> problem it violated our human rights ordinances, so i, the mayor, born in cuba, couldn't buy a -- >> you couldn't go on that cruise. >> that will originate from a port not only in my county, but operated by miami-dade county, so we sent a her to my county attorney saying, i think they're violaten haim rights ordinance, and we have a contractual relationship with carnival. what is the remedy if they are? we said we're going to have a problem. one other thing that people aren't talking. it may have been possible you couldn't get a job as a cuban-american, because you
wouldn't be allowed in. that not only discriminate you from buying a ticket, but also from working on the ticket. >> so they acquiesced? >> i think so. >> today they said that? >> today they said they would alloy cuban-americans to buy tickets and will try to get the law change indeed cuba. if cuba does not change it, they will cancel the cruise. that's a good thing. carnival is a great corporate sponsor, they have a great owner. i think it's the right thing to do, and they have the issues with cuba, so let this emwork it out. >> car loy gimenez, thank you. a lot more. tomorrow i'll have an exclusive with the ceo of nasdaq, and much more. tyler, over to you. >> melissa, thanks. continental recess sore c kreis harold hamm's take on the showdown in doha.
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but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks. welcome back, everybody. i'm tie already matheson, the dow topping 18,000 today for the first time since last july, july 21st to be exact. but oil falling after the meeting of oil produces countries failed to produce a deal to cap production.
oil however well off the lows, west texas cruel, off 60 crennel. we are live here at doha, scene of yesterday's oil summit, whatever you want to call it. in fact, everybody gathered together in a room, a 12-hour meeting, everybody talk about a deal. not only did we not get that, it ended in a huff, and in fact a lot of the oil mince fehr did not at the come in the way they came in, which is through the reporters. when they came in, of course there was a reporter throng, what we call the scrum most of the big players his rally left. it started with a roar, and certainly ended with a whimper. obviously no deal done. reuters reporting that the venezuelan oil minister sail if oil prices fall once again they
may push for another frees summit, but next official meeting june at the in vienna, austria, butsh suggesting make we're going to try for another one of these free summits between now and then. remember, moody's has them and about ten other out produces -- on review. here's the story and the intrigue we talked to the nigh jeernl oil minister very shortly after the meeting ended. we got the first interview with him. saturday night there was a meeting of some of the folks, and it was a draft of the deal going around. in fact in the morning there was a lot of opt mihm that deal would be enacted. listen to what the nigerian minister told us. he said the draft deal they saw the night before was not the
draft deal they got the next morning. >> it was an initial draft that everyone had seen, and there was little consensus around that. this morning there was a different draft. which tended to create a link to iran's compliance with the -- >> reporter: now, he did not know or did not say who might have changed that draft all the way through the night, but certainly if you look at the players, saudi arabia a major player, russia, and iran who was not here, obviously we know that by now, considered a major player, because they are the ones that will determine whether or not we get a deal. a lot of focus on the saudi/iranian oil conflict. the saudis want a freeze, but they won't do it without iran, iran says no way, they want to keep pumping.
but keep in mind, folks, that doha and oil are not the only place that the saudis and iraniaries are currently in conflict. for years both sides have been at odds on the battlefield. in syria iran has supported you said assad and his shiite sect. saudi arabia, sunnis are pushing for assad's ouster. while fighting han ebbed due to an agreement on paper, on the battlefield the guns still have not fallen silent. in yemen, iranian-backed rebels have been fighting to overthrow the pro-sunni and pro-saudi government, character count nearing 10,000, misery is pervasive, both syria and yes, ma'am are in ruins. the fight is just as intense as on the battlefield. the only difference today is that saudi arabia and iran's cold war are being fought at the negotiating table. so it is clear you've got the political entries, the oil
entries, the economic intrigue, and got an e-mail from an oil expert for about 25 years, he said keep in mind asia is part of the social saudi arabia is able to sell its oil into china at a premium. that is a market that iran would like to get into. it could be very bad for prices, because iran may try to undercut saudi arabia as well. the bottom line, guys is this, there is a lot of not only oil and economic intrigue, but political intrigue as well. everybody can come into the meetings like here and say, it's about market share, it's about price, but there are long-standing divisions between these countries, which make it harder when they sit down or don't sit down, and they are they're able to come together and alleviate their differences. we have kuwait out there now,
iran probably pretty happy about that, because that at least in the short term gives them covering wok until dooming price, which, remember, even with u.s. declining output is pretty oversupplied. as i say good-bye, one more hit in the "closing bell", which is the draft deal they saw, not the draft deal they got in the morning. i think the technical term, and you're forgive me for being so wonky, the old switcheroo. see you back in the office on wednesday. josh has a news alert. michelle, it looks like potentially we could be getting news here from apple. it looks like siri might be giving us a clue here, a date on when the worldwide developers conference will be. i'm going to play it. when is wwdc? she's going to tell you that it actually happens june speak
through june 17th. when is wwdc? >> the world wide developers conference will be held june 13th through june 17th in san francisco. i can't wait. >> so june 13th through june 17th. we're not sure if this is a glitch or how happenle is making an announcement. we're going to let you know. we have a call out to apple. when thousands of developers all convene here, you expect to get updates, and we did reach out to many ale. we'll keep you posted, but at least siri here seems to be suggesting june 13th through june 17th. guys, back to you. >> that siri is one sexy-voiced woman, i tell you. thank you very much, josh. stocks rallying following the headlines out of doha. one in particular is leading the
pack, continental resources, up more than 50% so far this year. it's good news for harold hamm, he joins us with his reaction to no deal in doha. mr. hamm, welcome. good to see you. let me get your reaction to no deal in doha, but first question whether you see oil supply and demand coming into balance soon, and if so why? and how soon? amplts we didn't have a whole lot of hope for this -- it's kind of going back to what we saw earlier. the fundamentals of supply and demand was really close, that in the second half this year we've seen much of this go away. and i predicted we post an inflection point and now wee 50
percent up. and the oversupply goes away and supply and demand into greater balance even than they are right now, what does that imply for prices? . obviously we get rid of this overhang, and we'll see stronger pricing. these two very competitive countries over there, winning thing happen, and sure enough that's the overhang goes away, you know it's going to be a long time where we can get back up in production again. we're at an all-time low on rig count. we've seen those go down
steadily here. we're down 77%. >> what do you think that means for pricing? when we're showing everybody wti for the front contract, if we start to come into balance, mr. hamm, what do you think that means in finally seeing the price up? >> we know that this is not sustainable. we've said this all along. you can replenish diminishing supplies with this price, you can't do that in the world, so we'll see higher prices. what you're seeing right now is pretty much tapped out in the middle east, just like we predicted early on, so we're going to see higher prices. >> but i sense you don't have a number in mind here, or at least one you are comfortable sharing right now. is that -- >> i shared this earlier. i shared this back in january. i said my price by the end of the year was $60. that's kind of a lone wolf in the forest at that time, if
you'll recall, but there's a lot of people out there saying it now, and more. >> it feels like it's almost exclusively the united states. is the united states bearing the brunt of the decreases in supply? is there anywhere else in the world -- >> certainly other places, when you start adding it all automatic, we're one of the biggest ones. but we're seeing mexico down 100,000 barrel a day this year. we're seeing brazil, you know a lot of other companies, china down 250, you know, a lot of other cunning are shah irthis right along with you. it's a conglomeration of increased demand, 1.3 million
barrels, we think, and by the same producing, down 1.3. >> let me just concluded by asking a do you think they're trying to stick it to iran or you and the u.s. producers? or what's going on? >> sure they were. it shocked them, but also they were after the saudis in one sense, certainly concerned with the nuclear sit wags of iran, so all of that played into it. they want they weren't going to cut by themselves, and they have stuck with their guns on that. so that's kind of where they're at. i think we're better off without opep peck and the overhang. we said with exports, that would
be diminished and that's what happened. >> mr. hamm, always good of you to come on. we appreciate it. >> good to be with you. harold a.m. from continental resources. >> this week in tehran, iran showing off in the military hardware, reportedly one of the if sophisticated russian-made anti-aircraft. that's the military front. on the financial front, iran expressing full confidence in iran's ability to do big with iran legally and transparently. here's what he told me. >> the financial action task force that you are familiar with says they remain particularly and exceptionally concerned about iran's failure to address the risk of terrorist financing. they just said that in february. what do you say to that? >> i think that due to the fact that we didn't have any kind of
relationship, they were not fully informed with invite changes we made. last week in paris, my colleagues had a presentation for fatf, and the audience was surprised by the steps taken by iranian banks and financial institutions. i'm sure through the explanations offered through my colleagues, i'm sure we will see iran's name and also the name of iranian banks removed from fatf, and we will see normal banking relations. big banks should come to this, that there's no longer threat to it. he is the international on policy analyst, all thor of the days after a deal with iran. good to have you here. i assume -- >> thanks for have you me. do you think he's correct. should banks in europe not be worried at all?
>> iran has still to become very transparent about it about how the banking system works. so another sanctions on the nuclear program have been lifted because of the nuclear agreement, there still remains a lot that manks a lot of spanks and companies quite wary -- >> he was very specific about the financial action task force. and iran and noirk are the only countries still on the list that they are extremely concerned about.
iran hasn't had the opportunity to clarify the positions and practices, but there's a lot that's problematic that iran is doing today, like support for our terrorism financing. so it's not just a matter of iran clarifies the system but changing policies in the middle east. >> translator: one of the objective tiffs is to shrink the size of the governments, so this
is one of the principles you follow. i think we've had some exaggerations made, involvement of foundations and revolutionary guards. >> when you say the role of the irgc or foundations has been exaggerated, tell me more about that. when westerners read about the economy of iran, they get the impression that a large swath is controlled by these institutions. >> translator: i want to assure you when it comes to theirs activities everything is transparent. they follows the full step of corporate governance. when we say foundations, you know this, ali, these are foundations controlled by the supreme leader of the country and the religious institutions. is everything transparent with the irgc and the foundations? >> no, exactly the opposite actually. of course the rouhani government
wants to strengthen the private sector in iran and make certain sectors transparent, but the revolutionary guards or the foundations that are beyond rouhani's control actually administer huge portions of iran's economy. i don't want to say it controls everything, but is a big actor in the economy and act very secretively. so i would disagree with that statement. >> thank you for the analysis. i'm sure we'll discuss more in the future. >> thank you. another note of discord from the middle east today. the israeli army finding a tunnel likely built by hamas in the gaza strip into israeli territory. they fought a war twoiers, and hamas bullet tums look this to make mare way into terr toy in israel. a bus in israel's capital
city exploded today,you realize 21. the police and mayor's office says it was caused by an explosive device. they have not yet call it a terrorist attack. the. three things that the big pharma is doing to solve the zika virus. that's next. let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade.
bick flooding throughout the houston area. power is out to more than 100,000 homes there. more rain is expected tonight. a week after the cdc announced the zika virus is scarier than we thought, a number of farmo companies are attacking it. hi, meg. >> as the virus spreads through more than 40 countries, work is under way to stop it from vaccines to drugs to mosquito control. french drug maker sanofi, gilead, and entreksen san ofoe is -- they as earl why is as this year, matching timelines also laid out for the national institutes of health.
gilyard has a program where it screens its library of hundreds of thousands of compounds to find potential activity. the company's a leader in antiviral medicines with drugs for both hiv and hepatitis c and already found a candy for eboli. and finally in mosquito control, we notice bayer for its favorite aspirin, but also has a major crop sciences division, within that it's developing products to control the mosquitoes that carry zika. also new methods being used on including genetically modifying zika to wipe out its own kind. so a lot of work under way. >> suicidal mosquitos? >> that's what we're hoping. >> got it. thanks so much, meg. springtime for housing. the home builders in the hard of the selling season right now. how optimistic are they at the moment? we're back in two minutes with an answer.
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i'm sue herera, here's your cnbc news update. ash carter arriving in bag dab earlier today. he announced the u.s. will send more than 200 additional troops to iraq to help the government fight isis. >> we are going to place additional advisers with the iraqi security forces now down to brigade and battalion headquarters. carrying emergency supplies to the victims of japan's two earthquakes last. the area has cut occupy by landslides. at least 42 people were killed and more than 1,000 were injured from the quakes. russian president vladimir putin meeting mahmoud abbas at the kremlin today. following that meeting he pledged his country ace support for palestinian peace efforts. amazon intensifying the competition, starting today, customers can subscribe to
amazon prime's video service as a stand-alone option for $8.99, a dollar less than netflix. all right. that's the cnbc news update this hour. tanked sharply failed to produce a production freeze, but then a lot of those losses wiped out. jackie deangelie? >> that's exactly right we started at a section low. but at one point we even cross the -- it shows how fragmented this -- that's been supportive of the market and there are technical ranges here that traders are playing. it gives you a sense this market needs time to digest this news to figure out what's next and
being more clear. i do want to say it come back to supply and demand. we know it's not picking up as fast as we would like. could traders tell me it's definitely possible. >> jackie, thanks so much. so oil lower, the majors sharply -- the drillers are higher as well. loy burn is ahead of -- let me start with you. tell me why oil stocks are higher today, conferring what happened in doha yesterday. >> what happened was a nonevent. nobody had high expectations. i think everything understood how hard it is for saudi arabia, russia, iran, everybody else to get on the same page. so when you meeting broke up without a deal, that really was not a shock to the market.
>> why do you think they're up shatterly today, base odd what happens in open? >> well, oil has been bouncing, you know, around $40 a barrel for several weeks now. of course it's up off sits lows in february, but let's be clear. $40 oil still does not work for the entire value chain. there's too much austerity, you know, in terms of capital investment. for that to recover, our view is $60 is an absolute minimum. we're looking for oil in the 60s by the end of the year, so, you know, six, seven months from now, and of course as that happens, we're looking for more up side in the stocks. >> do you think you can get to 60? >> i think you can get to 60 in 2017. we're a bit more conservative on the price, but we are kind of in the same camp. i mean, the issue with doha to us was that producers are
already producing what they can, with maybe the exception of saudi arabia. so having a freeze really didn't do anything. very low expectations, and we think the fundamentals are getting better at the margin. >> so we're showing people pioneer national resources, new field exploration. suncorp, why? where he think you need to be in the -- and we they that is where the technology will be most impactful and where the lowest costs -- midland, pioneer, other producers there, but the delaware basin, and we like the scoop and stack, and we field newfield is the best positions there. guys, thanks. the dow crossing just above 18,000 in midday trading. what does does that mean for the next move? rich record is a ecitle analyst
can evercorp isi, and davis is an options expert with harvest volatility management. does this level have any really lasting significance or? >> i tell you, ty, clearly the possible reversal is a bullish divergence, which suggests there's possibly up side here i don't think the cross above 18,000 is what should push you into this market, not that being pushed in has been a bad thing. bring up the chart real quick. we've seen this furious 16% surge off the bottom here, you have the double bottom. in fact it's almost a confide grouple bottom if we go back to the fall of last year, but you're coming into some resistance. more so by the old crawl time high of 18,3. if you zoom out and look at the weekly, you can see what i'm talking about.
what we have put forth is that you've been staring at this top, being by virtue of this miraculous -- at the high end of a 2 1/2 year trading range. that month being april with an average return of 1.8%, and you head into the seasonally tougher period, historically i don't think you want to change in here. once again if you own them, you probably have a chance to sell them higher. if you don't, you kind of have to grind it out and bear it. >> do you think that stocks will break higher from here? what do options indicate? >> one of the things we open issh the report short open interest that's taking place across all stocks is the largest i have ever seen it. so a enormous am of interest on
the short. nobody was talking about the sell-off from the top. we saw the market rebound. at the end of the day i think we have a p.e. in the 16 range, a 2.5% yield, i don't think it's astronomical. i can remember dow going through 10,000 and we all got hats. obviously i like hats, so i'm looking for dow 20,000 and getting another hat by the end of the year. >> that's quite a call. hats all around dennis, rich, thank you. "power lunch" returns in two minutes. now the latest from tradingnatradin tradingnation.cnbc.com . >> it's where the 50-day moving -- while this pattern is
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stuck, still in the positive, but it was expected to move higher this month. take a look. the monthly index has been at 58 for three straight months, slightly better than where it was a year ago, but well off a recent high of 65 we saw lost october, 50 is the line between positive and negative sentiment. the home builders saying they are cautiously optimistic. single family home sales are still running at nearly 30% beround that 30-year average, looking deeper into the report, the index measures expectations rose one point to of 2. buyer traffic also garchd a point, and current sales conditions fell two appointments to of 3. that one is particularly troubling, given that we are right smack in the mid of the spring market, usually the strongest for all home sales. back to you. >> thank you very much. let's go to dom chu for a big market flash. shares in the energy space here of williams company, down
about 9% right now. also energy transfer equity, this is happening on the heels of a regulatory filing made in which there are questions with regard to whether their planned merger can actually go through with the certain tax benefits. again, clarity or lack thereof over tax issues may be contributing to some of the uncertainty around this planned merger, a contentious when it's happening, pending between energy transfer and williams companies. also at play here were some headlines earlier on in the afternoon. he had oppose d on getting new york and pennsylvania, so a number of pennsylvania, all having an effect. back over to you.
>> it is the eve of the new york primaries. the big question is which candidates will come out on top there's a new tool caked predictit.org, where people can buy and share sales of what will has been in the election. so john, let's cut to the chase here. what are the users of this website saying is going to happen on the democrat and republican side. i think it's no contest tomorrow. they think trump is going to win the republican primary in new york and clinton will win the democratic primary in new york. it's almost 90 cents or 99 cents in the case of the republican primary. 99 cents for a chance to win a dollar if you're -- if trump is -- >> even basically, then? >> well, actually, this is 99 to 1 as to only one cent to win a
dollar if trump does not win the new york primarily tomorrow. >> so i could put down 99 cents on trump and i would one $1, which mikes el make a penny, or put a penny on kasich, and if he wins, i get 99 krerchts. >> so there is disagreement about what the margin will be and what happens after the new york primary. let's talk about margins here. does the model or do the traders predict who's going to -- what the margin of victory will be for trump. >> they are predicting that it's going to be greater than 50%. in other words, in the case of trump, they think that trump will win by greater than 50%, of the republican primary voters is more than 50%. on the democratic side, not so much so. the -- those who think it's going to be less than 15% are
greater than 70 cents. on the democratic side they think it will be closer than on the republican side. >> this is not a business, right? you're not running this for profit? >> that's right. >> this is part of a university program. >> correct. >> why? >> well, markets have predictive powers, and it's understood that in other things, the price of orange juice or pork bellies markets do have some predictabili predictability. if they have predictable, then why not with respect to noneconomic matters, such as politics. these are called prediction markets, as you point out. the universities -- >> beyond new york, are there other states where the -- where the -- where this marketplace show the contents being much closer? >> yes. in fact, it really gets interesting when you look at who
is going to be the -- for instance, what does the market think the vice presidential nominee will be on both sides? >> market says who's going to win the gop? >> trump is going to win. >> and who will be the next president? >> well, it says that clinton will be -- >> over trump? >> yeah. >> clinton is in the 60s, trump is around 25 cents. >> do you make any money doing this? >> no, i'm not allowed to participa participate. >> do you lose money? or does it go into something? >> we're a long way from break-even on this. >> who makes money here? people put up their penny. >> >> and they gets the 99 cents from the others who put up -- >> and lost. >> that's right. somebody who thinks trump will be the nominee, will get together with -- it's a binary outcome. they negotiate what that price is going to have.
you don't have to stay in the trumps until the convention or even to the general election. >> i can dump the trumps? >> a not-for hoff profit bookie? >> tell that to draftkings. >> thank you very much. >> thank you. a man who has a pretty good report predicting earnings. you're watching cnbc first in business worldwide. but when you're building a mercedes-benz, there really is no small stuff. every decision... every component... is an integral part of what makes the 2016 c-class one of our most sophisticated cars ever. because when you're setting a new benchmark for refinement, it is the small stuff... that makes the biggest impression. the 2016 c-class. see your authorized dealer for exceptional offers through mercedes-benz financial services. freshly made in the tokyo-japanese tradition, each batch is small. special. unique...
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get better internet installed on your schedule. comcast business. built for business. and they've given us the names that they think are most likely to surprise both positively and negatively when it comes to their earnings report. they name the names and bobpy pennsylvania zani also joins us from the floor. give us the names. who is most likely -- i mean generally speaking we often see surprises during the earning season, right? then there are those who go above and beyond. where are we going to see the most positive earnings surprises? >> we have five. that's exactly to the point you mentioned. we actually see more than 60% of the companies beat on an upside average earning season. we have to do it on both sides
of the coin. on the upside we're expecting -- the top picks are lear coors. we're expecting jcpenney to beat estimates and amc. cemex, we were talking about the housing market, they have volume and pricing growth. so cemex is expected to beat earnings and mining to beat it. keep in mind gold prices are up more than 20% this year so far. newmont has more. >> sometimes, sri, it's not that they're going to make more money but they lose, correct? >> for cemex, yes, they're going to lose more money. >> and that's a positive surprise. >> it is. they have a lot of capital
expenditures. typically it's seasonal. you have quarters where they actually beat -- they make money, quarters where they lose money. this is a quarter where they expect to lose about 5 cents a share. but it's actually 3 cents a share, so it's higher than expected. >> bobby, it's important, the beat. >> for example, that's why banks rallied last week, because the numbers were better than lowered expectations. we play this game all the time. nobody wanted the banks and suddenly they had a great week. this week, big industrials. those stocks have been moving up in the last few weeks on some hopes overall that we'd have a weaker dollar and less economic data. they've been moving rather notably and oil stocks have been
moving. my point here is that we have had four quarters of negative earnings growth in the s&p 500. it may be -- and this is a little early call, but this may be the quarter where we finally start to see a bottom in that profits recession. if that happens, that's going to be a path to new highs. that's how it will happen. >> so, sri, to speed things up, i'm going to read the negative surprises. seaworld expected to lose more money than already expect. schlumberger, boston beer, dodon done and brad street. how accurate are you? >> there's certain inflection points where we may not meet that. the smart estimate gets it on our own. i take a look at, for example, cash flows, operating margins,
transcripts to put a slight human your lay on top of it. but it's actually weighted. instead of an estimate we take a weighted. >> that's a head of a lot of an allcy, elty mat. we've got to get going. he's just getting started. >> coming up, former major league baseball player torii hunter joins us in studio to tell us what he's doing to help so many athletes after their careers are over from going broke.
the horror stories are a legend. now he's going to help those individuals become better investors. that's the goal of former major baseball league star torii hunter, part of the executive team for the clubhouse investment club. one of the prominent members of the executive team are new york met curtis granderson, former nba player elton brand among others. torii hunter joins us. welcome. >> thanks for having me. >> tell us how this works. you have members who are ball players, celebrities. you can name names here obviously. they pull money, people pitch you deals. who decides who gets the money?
>> first off, a lot of athletes are out there and they're making bad investments. they don't know that they 140u8dn't do more than 5% in private equity and we're just trying to teach these guys and hopefully eliminate that problem we have amongst athletes and celebrities who go broke and make really good money. so what we do is kind of send mass e-mails out to different players and different people that are involved. we have derek, a former mlb player, justin verlander, peter berg at a couple of other guys, hundreds of others, and we send out mass e-mails. we're going to invest alongside and co-invest. >> are they voting then or can anybody say you send out more than 100 and 20 say, yeah, i ool put in money or you get a -- how does it work? >> yeah, i mean -- it's kind of like a vote, you know, but it's not really a vote.
we send out the e-mails, you can do it or not. once you become a member, you can say aye or nay. we get a special purpose veem and we're trying to raise $500,000. we send out a mass e-mail. if some of these are threeing parties for $20,000 and you're getting nothing out of it, you can invest in a startup company. you plant seeds in different sectors. hey, man, that's steady growth. >> they decide yeah or nay. >> they have muzak. he's a pretty funny guy and we're going to raise million
dollar for that as well. i think it's going to be pretty good. >> we'll have to leave it there. >> good luck. >> continue growing their wealth. thanks so much for watching "power lunch." >> and "closing bell" begins right now. we'll see you back here tomorrow. >> hi, i'm "closing bell." oil was at $50 a barrel. they've outperformed oil by a little bit. >> that's been a big question. >> that's been the question. can we keep going higher. it comes after that doha agreement or lack thereof. we'll have more on that. >> adam parker is also going to join us. he's going to talk to us about why he says his clients aren't