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tv   Power Lunch  CNBC  May 20, 2016 1:00pm-3:01pm EDT

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deere. because i think it puts in a decent candle today. will not close on the lows and i did not mention this before but warren buffett is a buyer. i like being along for the ride. >> all right. have a great weekend. "power lunch" begins right now. >> buy now! ♪ ♪ what he just said. i don't know what he said. melissa, thank you. we'll see you in a bit. it is 1:00 on wall street. 10:00 a.m. in downtown san francisco. you are looking live as brent mu mussberg eer used to say. the flagship set to open in downtown san francisco. welcome. i'm tyler matheson. apple shares are high up right now but they have been hammered as you know over the past year. how much have they lost? 27%. that makes apple the worst
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performing dow component over that time. so the big question for apple investors right now is, doubling down on retail enough to reboot this struggling stock? kick off the discussion with brian sullivan and michelle ka russ russo-cabrera. >> there's sliding glass doors, 6k video screen and the eyes probably can't pick up. trees planted along its customer support section inside. there's also a public plaza open 24 hours a day. free wi-fi and live music. apple retail chief says it is not about evolving store design. but creating a community for customers and visitors. >> but as -- >> sounds nice. >> sounds gorgeous! as tyler mentioned, should apple bet big on retail instead of focusing on the next big product is? joining us is contributor jan
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niffen and john fortt and -- january, what do you think of this move? apple is good at retail. good enough move? >> it's not like they can't do both, right? it's the next great store and they have to have the next great new store and now they look like a microsoft store, right? microsoft is opening stores. so they need something that keeps them the best store in the moll, highest productivity, most visited store in the mall. >> most dollars square foot in the country. >> nobody else in the mall drives the volumes that apple does and they want it to stay that way. every mall in america wants an apple store. and they need to keep cutting edge on the store so i like what they're doing. do i think it's enough? no. when's enough is the next new great product, right? i have an iphone, an ipad. i write on an mac air. i didn't buy a watch.
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>> now what? >> yeah. now what? >> let's ask jessica out there. obviously, the buzz is working because we're leading the show with this story. but do you believe this will create enough of a real buzz to do anything meaningful for apple? >> it's not just about having a new store and a sexy brand and apple needs to keep updating the brand image, as well. but i'm struck by things in this store like an enterprise center to try to sell companies on the apple products and a boardroom-like area. i think it's a practical move, as well, indicates apple needs to sell their products into new markets. and so, again, not going to be a game changer for the company. but a good practical step if they get into selling bigger products like tv and tvs and hardware. they're also gone to need more space so they really do need to transform their retail
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footprint. >> if needs to become a when, doesn't it? >> judge it differently. what they have done with their huge cash hoard is bought into locations iconic and others can't afford to be in. 5th avenue store, it's a landmark and a tourist destination. the same in grand central. that's what they have done location-wise in san francisco but the store itself was not that impressive. it was one of the first. now they have upgraded it for tourists just to experience it. is it going to shift the tide of apple sales overall? no. but it could shift share of wallet and the amount of other things -- >> agree with everything you said except it seems like an awfully expensive proposition just to get tourists to come in and take photographs. >> it is not like they're capital constrained. >> yeah. it's not like they are and, and this is a real tangible advantage that they have that they need to maintain. and so, especially as they move
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into services, if they can show people how the experience works, get people talking about, oh hey, look, on social media here's where i was. >> keep the halo in the family. >> people loving it loving it more does matter. >> will you play music in the apple store as a member of a band yourself? >> yes. and thrown out. i won't be invited. >> jon and jessica stay around. >> i didn't know you were in a band. >> in kentucky in the '90s. >> long time ago. >> jan in a bit here. let's chat about the potential value of a yahoo! takeout. new reports inform bids for yahoo! coming in at $2 billion to $3 billion. david faber said that may be low. do you think it's $2 billion to $3 billion? >> i think and what sources are saying is this is a negotiation. bids are due. people are posturing. aol is sold to verizon for more than $4 billion. it's really hard to imagine yahoo!'s going to be less.
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so i just don't believe those prices right now. >> okay. so yeah. i want to compare it to twitter mean ear i'm sure viewers take exception and bear with me for a second. twitter has fewer than half the number of active users as yahoo! claims and one half the revenue and twitter's revenue is slowing and a market value of $10 billion saying one of the companies may be grossly mispriced. your thoughts? >> so comps are hard. the problem with yahoo! right now is momentum. not only is revenue not growing, but it's hemorrhaging users. we had a story about huge declines of usage across all its properties and tech is a momentum game. twitter's stuck but not as stuck as why hoo and bidders anxious right now because there's so many questions over the company. what's going the happen to the
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softbank deal? how real are the synergies for a buyer like verizon? and so, there's a whole different set of issues with yahoo! but i think, you know, you can say the same of twitter, too. comps are basically hard and right now it's a negotiation. >> sure. >> basically will verizon bid up for it? >> you know, negotiation, what they should have done way back when, jon? microsoft wanted to buy them. >> for 30 -- >> ugh, ugh, ugh! what's microsoft saying, woof. did we dodge that bullet. holy smokes how things can turn. what do you think about the valuation here? >> they caught the nokia bullet right in the gut. i think jessica's exactly right about the difference of twitter and yahoo!. i mean, twitter, yes, the users not growing but revenue has been. the team doing a good job. figure there's some ways to exploit data ways they haven't before. yahoo! on the other hand, that cow is milked.
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they have all kinds of ways to make money, probably milked yahoo! mail too much. when e-mail just really wasn't the way to go revenue-wise anymore. is it valuable for companies that needs users and eyeballs? >> that is it, right? isn't that the whole game? forget about twitter then. groupon. not exactly knocking the cover off the ball. has a market valuation, a market cap, jessica, 1.9 billion. you tell me yahoo! may be worth $100 million more than groupon? >> exactly why do you believe these prices right now. i think, look, this is a tense negotiation. i think the bidders continue to be anxious about when's beneath the hood at yahoo! too. you have actist vary holders and seeing this play out and i think the numbers suggest maybe we won't see a deal or maybe have to see a different kind of deal, too. the saga is far from over. >> yeah. it is a saga. soap opera. so focused on yahoo! mail.
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what about yahoo! female instead? >> yahoo! female is where the -- the female customer -- >> so sully. so sully. >> exactly what he was thinking. >> apologizing to the viewers. >> conversion is complete, michelle. >> thank you, tyler. all right, folks. thank you very much. when i find the camera i'll talk to you. yahoo! is lower today but the overall tech sector moving to the upside. there is the green that you see in the nasdaq 100. there's a lot of it there. only seven stocks is that right? seven stocks negative right now. in the entire nasdaq 100 as you focus down on some of them. today's gains are pulling the nasdaq out of a correction. it had been down more than 10% for another time since its most recent high. puts it back in the black for the week and the nasdaq dodging a five-week skid. something it hasn't happened since way back in 2011.
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chip makers, biggest winners on the nasdaq right now. applied materials up top. i believe that's micron in number two spot. lam, broadcom. more on the rally in the chips. the chips aren't down. the chips are up. we'll have more on that later in the show. brian? news alert for the energy market. it oes time for the weekly rig counts and the counts coming in unchanged compared to a week ago. 318 rigs. the first time in nine weeks by the way that oil rig counts have not fallen. we are still, though, down 341 compared to a year ago and lost last couple of weeks and we had 1,851 rigs gas and oil, 1,500 in 80 two years ago. >> now what? >> 40 to 50 jobs associated with each rig. those are jobs coming off. >> in a year. >> lowest ever recorded data
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basically. >> wow. still ahead, hitting housing. we have new numbers showing that the spring selling season is in full bloom. plus, do you want a brand spanking new tesla model 3? all you got to do is go to work for a north carolina-based company and they'll give you one. you're going to hear from that entreprene entrepreneur. why he is doing it when "power lunch" rolls on.
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welcome back. i'm tyler matheson. fresh numbers showing the spring housing season in full bloom. let's get to diana olich with more. how are you? >> reporter: no question, there's plenty of demand for housing and even a little bit more first-time buyer demand than lately and pushed existing home sales in april higher by 1.7% for the month, up 6% from a year ago and these numbers would be stronger were it not for a lack of homes for sale. inventory is down close to 4% from a year ago and that is pushing prices higher. take a look at the inventory by price range. it is way down, right where we need it in the most for those entry level buyers. median home price in april $232,500. up 6% from a year ago and realtors say that the gains in
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prices reareaccelerating. that doesn't mean that the sky is -- the moon for the sellers. case in point, right here. homes in the d.c. neighborhood selling in days. this one was likely priced too high. back to you guys. >> thanks very much. let's pick it up there with budge husky. ceo of coldwell banker real estate. you have the window pain suit memo for thedy. >> looking sharp. >> diana has been talking for real i site ms like years now about the shortage of inventory. do you see that in selected markets or nationally? number one. an why is that? >> well, of course, there's a shortage of inventory at the present time and part of the overall story of housing is the underlying economic drivers are creating demand for housing and it's a great story but it would be a greater story if the inventory was there. >> why isn't there? >> first of which, we know that part of it is the inability to
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see the move-up market. individuals owning homes know it's a great time to sell and questioning where they're going to move next. we haven't seen the level of new construction activity and starting to come back. shifting from the rental market and then single family and we have a long way to go to reach the levels of historically. >> people feel a little locked in to their house in other words? they don't know where to go if they like the town they're in. will i have the money to move up? >> with all this, that's correct, we are seeing an increase in the number of new listings on the market and we have seen that on coldwell banker year over year. demand is so strong, total inventory levels are declining in many cases. >> are you encouraged by that slight uptick in the first-time home buyers? >> i am. not to historic levels of 40%, uptick indicates people are returning to market.
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we see household formation strong within the last 12 months and a lot of individuals are moving into rentals and getting them there, it's two-stage recovery an moufing into a home of their own. >> do you think that slightly higher interest rates are going to cause some people to get off the fence and jump in? >> always has. as you know, and any increase are going to be nominal as we know and not an impediment to continued recover. >> thank you very much. good to see you. >> thank you. great to see you. coming up, an employer trying to attract workers offering a tesla! why not just pay them more money? we'll ask him. plus -- >> power pitch. a start-up dishing up a new super food. >> it's a vegetable more nutritious than kale. >> but will the panel eat it up? >> how are you using branding to differentiate yourself? >> what are you going to do to attract consumers that might not know about this? >> stay tuned to find out. olay total effects
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leading department store moisturizer. revives skin to fight 7 signs of aging. with olay, you age less, so you can be ageless. olay. ageless. welcome back to "power lunch." time for today's power pitch. this is where one entrepreneur gets 60 seconds to convince a panel of expert it is start-up has what it takes to be the next big thing. >> hi, i'm lisa curtis and founder and ceo of cooley cooley. i began to feel mall nourished of beans and rice and someone
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told me about maringa. it's more nutritious than kale a and. i started to eat it and made me feel better and i introduced this amazing new super food to the u.s. market and doing so, help to improve nutrition for women in west africa. americans say that the number one diet change to make is more vegetables into the diet. but not everyone has time to stop and eat a salad. this green energy shots, powder and super food bars is a convenient and affordable way for americans to get their greens on the go. it's sold over million dollars worth of products and we just launched nationwide with whole foods. we are excited to capitalize on our first to market advantage and make it the new kale. >> welcome to the power pitch. you just saw lisa's pitch. now let's meet the panel. alease sha a board member of the new york angels, advises and invests in over 40 start-ups.
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and nir, he founded uprise ventures, focus there on early stage start-ups with several natural food investments in the portfolio. also with us is kelly and angel investor. she mentors over 30 start-ups an founder of see jane invest, a company focused on women-owned businesses. welcome all. all right. what do you think, alicia? >> lisa, great delivery. i loved how you talked about your own background, the social purpose and also the traction you've had so far. i would have liked the hear a little bit more about competitive differentiation and also how you're getting the word out so i'll give you a b-plus. now, on the competitive front, i understand there are other products with moringa out there. how do you differentiate yourself? >> anyone can sell a product online and the quality control standards really aren't there compared to what's sold in retail. this is the first company to sell the products in retail stores nationwide and the first to develop a brand around the
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super food and we have the highest quality and most socially responsible on the market. >> your thoughts? >> the pitch is well rounded and covered the major elements. the whole foods partnership is great but hard and expensive to build in whole foods or natural channel. what are the plans to beyond expand to conventional grocery? >> in july we're launching with two major grocery stores. we haven't announced them yet but they're on the conventional side and you will see the products in even more stores nationwide. >> kelly? >> i thought this was a really interesting pitch, love that it's in the social impact space. i wanted to hear more an i have to say i didn't know moringa before the pitch. what will you do to attract consumers like me and why it's better for them and they should choose at the store? >> we do a lot of store education, so if you walk into any store in america, you'll start to see more and more
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people out there sampling our products. we also do a lot in terms of educating the store personnel so that they can educate the customers for us. >> alicia? >> in the supply chain, your sourcing ingredients from women-owned farming cooperatives. how do you ensure that they can grow with you, soo too? >> we haven credible partnerships so we're working with the clinton foundation and other foundations, international development agencies to work with more women's co-ops and help them grow and scale as we grow. >> the current product assortment is broad. how do you think about a broad assortment versus limited focused product strategy? >> i think when you look at other companies that have acai of chia seed, they focus on the ingredient. we think of our shots and our bars for people to try moringa before they get to the green
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earthy stuff to add to the smoothie. >> let's hear from the panel. alicia? >> building a new food company is incredibly hard and i have invested directly in the space. with that said, there's so much i like about this company. you have a great entrepreneur with traction in places like whole foods and partnerships with thicks of the clinton foundation. i also really love the social purpose and also just how much heart she's put into this company and it's building on health trends so i'm definitely in. >> nir, in or out? >> i like that the company has a compelling ingreed yept story, strong early traction. can she expand outside of whole foods and perform well in the conventional channel or mass market channel? i'm in. >> kelly? >> i have also invested in the consumer food space and everything that i see shows she is right on track and everything she needs to do weps a niche food like this, starting in
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whole foods and go to a broader audience. i see a lot of great things happening and so i'm in. >> okay. lisa, what is your reaction? >> wow! thank you all so much! i'm thrilled. i think ten years nobody heard of quinoa or chia i hope that everyone will have heard of moringa. thank you to lisa and our panel. that's today's power pitch. >> kale is big. >> the new kale! the new kale! i just got the old kale. >> don't talk about the ca cafeteria like that. are you in or out on kuli kuli? for more on power pitch, go to one day the market reacts to the fed. the next it shrugs it off. how can you make money no matter what happens? tesla raising nearly $2 billion to build more cars faster. but will its suppliers be able to keep up? all that and much more coming up
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our cosmetics line was a hit. the orders were rushing in. i could feel our deadlines racing towards us. we didn't need a loan. we needed short-term funding fast. building 18 homes in 4 ½ months? that was a leap. but i knew i could rely on american express to help me buy those building materials. amex helped me buy the inventory i needed. our amex helped us fill the orders. just like that. another step on the journey. will you be ready when growth presents itself? realize your buying power at
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hi, everybody. i'm sue herera.
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president obama speaking from the oval office urging congress to pass a bill to boost emergency funding to deal with the zika virus saying it's critical to be assured of the 2k3w0 government's response. >> congress needs to get me a bill. it needs to get me a bill to get me sufficient funds to do the job. they should not be going off on recess before this is done. >> the european space agency salts one of its satellites spotted a possible oil slick in the same area of the mediterranean where egyptair flight 804 disappeared. it is about 1.2 miles song. the israeli defense minister announcing his resignation citing a lack of trust in prime minister netanyahu and no intention of leaving public and political life. netflix launched a website to let you see exactly how fast your internet connection really is. netflix is all about video and
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the faster the download speed, the better video quality to watch on your tv. there you have it. news update this hour. back to i don't guys. >> thank you, sue. which is get and hindered by the speed of the wi-fi router. you just go as slow as -- >> absolutely true. >> you know who's really fast? comcast xfinity is great. >> excellent. and could be the parent company of this network. >> thank you. i didn't -- >> disclosure. >> thank you, sue. final golds trades crossing for the day and look at the move, down .1% to 1252. big mover today is platinum. if you called it congrats. silver seeing a little bit of a move, as well. all right. we are, though, seeing some rather sizable moves in the bond market. today. all right. obviously now the fed meeting maybe a live one meeting again
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june 17 and seeing a bit of a move here. to your -- there you go. can you read this stuff behind me here? seeing a move in the 10-year treasury. we have breaking news on general motors and now phil lebeau. >> general motors announcing how it's compensating about 135,000 owners of 2016 vehicles with incorrect mileage on those stickers when they bought the vehicles. they put new emissions hardware on those vehicles when they were building the 2016 models. the stickers did not reflect that new mileage, a mile or two lower than what was stated on the sticker. so as a result general motors is compensating the owners of those vehicles with either a prepaid debit card of between $450 and $900 or a 48-month protection plan warranty offer. again, general motors offering compensation of $450 and $900 to
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owners of the 2016 models, 135,000 of them with the wrong mileage stated on them. by the way, gm says this compensation program will not have a material impact on the bottom line. back to you. >> all right. breaking news on general motors and i believe we would have bob lutz on the program in a bit but i think he is there now. former vice chairman of gm is there, let's bring him here. are you there? >> i'm here. >> thank you for jumping on early. i understand wrong mileage stickers on a car. how do you have incorrect mileage stickers on 135,000 cars? >> well, i think that they're just -- these are the so-called sport utilitieutilities, big cr, traver traverse, the buick enclave and so forth. and it's buick phil lebeau said. it was an emissions change and somebody didn't get the word to the guys that were printing the
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stickers. i think it's an honest mistake. general motors self reporting. an it's compensating victims. i think it's a total non story. >> yeah. you know, i don't know. bob, you don't want to accuse anybody of wrongdoing. i understand mistakes but same point i don't want to harp on this but it smacks of -- i mean, because if the mileage stickers were higher then it's an equal mistake but the fact they're lower, lower mileage cars with a lot more value. >> well, i think it was a correction of a mile or two per gallon. it is not material. most people might have never noticed. they probably wouldn't have reported any discrepancy to the government or complained about the fuel bills and so forth. but again, general motors saw it. saw that they had made an error. that there was a slip-up in the system. they corrected it. and they're compensating the owners who i'm sure will be
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delighted to receive checks in the mail. >> all right. interesting. bob, we'll bring you back in a few minutes so we'll get some coffee for you and water in the studio where you are. sit tight. see you in a couple of minutes and talk about electric cars. tyler? >> okay. fine. >> all right. fantastic. stocks rallying a little bit today shrugging off the possibility of higher interest rates in june. how can investors survive? maybe even thrive under this fed volatility? let's bring in katie nixon, chief investment officer of northern trust and bruce mccain, chief investment strategist at key private bank. middle of the week, katie, the fed minutes indicated that, you know, june was a live meeting. is there anything that you do as a portfolio manager, as an adviser to portfolio managers, that's different in light of that? >> no. sigh ler, we'll keep your base case that the fed moves once
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this year and increased the probability of a hike, maybe in june or july. but from our perspective, if the fed raises rates, it is for the right reason and the reason would be a higher confidence in the sustainability of the growth outlook and a confidence that the inflation outlook moving more toward their target of 2% so if the fed raises rates for the right reason -- positive for risk asset. >> bruce, are you doing anything differently, positioning any differently in light of the idea that maybe interest rates will move higher sooner? or maybe a little more frequently than some scenarios suggest. >> i think you still focus on the longer term. and clearly, they're not going to raise rates by very much. it's not going to have a huge effect other than the impact it has on investor expectations. and when you look at what the dollar's done in recent months, in part because they began to think that the fed might not raise as much or as often, for
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example, you may get back some of what we have seen in the currency markets and clearly has economic impact and some effect on companies so i think you look for those sorts of minor tweaks to the longer term strategy and how that plays out as investor expectations catch up to the fed but beyond that, no, not a great deal of difference. >> you do raise that variable there and that is the dollar. are you adjusting in any way your holdings of companies that might be affected by a stronger dollar? >> i think, certainly, you have seen give gunshot baback in tha the extent you have seen security that is have moved favorably to that without long term potential to continue their run, then i think it's time to pair that back and move to things that may be advantaged more by the longer term strength of the dollar seeing and expect to see. >> to me, a kind of week of reminders, a reminder that the
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consumer may not be firing on all sill enders or buying the kinds of thingless or patronizing the kinds of stores they used to, a reminder that the fed is very much in play and a reminder yesterday that fears of terrorism are there and we can't ignore them. but the one risk factor that you are highlighting right now is the fear of a brexit. what do you think the likelihood is? what would it mean to investing? >> well, tyler, one of our major risk factors is around the rise of populous pop tick politics the world and the fear of a brexit, abated quite a bit over the last several weeks with polls that suggest 75% are in the remain category so that risk certainly has dissipated and i think the risk of rising politics all over the world and the u.s. does present a risk for the financial markets and certainly a theme to talk about for quite sometime. >> bruce, a thought of yours.
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summer comes, so do the olympics. it is a wild time but you like one stock that you think could get a boost from the olympics. very quick thought on it. >> well, nike is one that tends to sell obviously a lot of apparel that becomes much more attractive not only to those who actually patient in athletics and those that like to sit on the couch and watch it. clearly this sort of trend to the extent not disrupted by the concerns for health and rio de janeiro would be a big plus for the stock and a solid growth franchise that does well in this slow growth environment we think longer term. >> i'll put on nikes and lululemons and watch this summer. probably too much information. thank you, bruce. and katie nixon. go to to see another large cap stock that bruce bets on for the summer. that is consumer clearly spending
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less money at department stores but that money is going other places like automobiles. can auto sales keep going or does a skittish consumer and endid e indebted one mean we've hit the peak? that's next. if you're going to make a statement... make sure it's an intelligent one. ♪ the all-new audi a4, with available virtual cockpit. ♪ the call just came in. she's about to arrive. and with her, a flood of potential patients. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down on-demand, this hospital can be ready. giving them the agility to be flexible & reliable. because no one knows & like at&t.
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crest - healthy, beautiful smiles for life. technology moves faster than ever. the all-new audi a4, with apple carplay integration. welcome back to "power lunch." tesla raising a couple billion dollars and increasing the production targets. it wants to make 500,000 model 3s by the end of 2018 and sooner than expected. there are questions, though, whether the suppliers can keep up. phil lebeau joins us with more details. phil? >> michelle, the production goal for 2018 is 500,000 vehicles overall including model 3, s and x. but you're correct. model 3 is bulk of the production and now we're starting to hear complaints at
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least filtered out through other media outlets of suppliers saying, not sure we're going to be able to meet the tar gets that tesla laid out. bottom line is this. a number of suppliers for the model 3 saying that this production schedule with the first ones built by july of next year is far too aggressive. essentially what you have is by the end of next month the design for it locked in. by july of 2017, that's little over 13 months from now, production will start. first deliveries in the fourth quarter of 2017. and again, the goal is 500,000 vehicles to be built at tesla's plant in fremont, california, in 2018. this year i think they're going to build maybe 95,000 vehicles and the plant has to had assembly lines to ramp up production of the model 3. shares of tesla, announced to do a secondary stock offering to fund this production increase.
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last night after the bell, priced at $215. tesla raising with the shares being sold by the company little over $1.4 billion. remember, the remaining portion will be coming from sharyls that ceo musk is selling and no doubt this is a very aggressive production schedule and tesla admitted as much announcing it in the earnings call last month. >> yep, sure is. thanks. a man really hoping that tesla meets those production numbers, nick demarco. he is the ceo of practacum promising employees a different kind of ben in it. nick says he's going to lease a tesla model 3 for every single employee. and he joins us now from raleigh. nick, good to have you here. why not just pay them more money? >> nice to be here. the tesla car is really an inspiring car. i'm fortunate to drive one and had it for about a year and a half. it's really an inspiring story.
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and i want our employees to come in every day and touch that steering wheel when they get out of the car and come in and realize they can do that same sort of amazing thing with our entry. >> why not just pay them more money? >> money isn't as inspirational as something like this. plus, everybody has to drive a car. this is a great benefit for people. >> this is -- are you having trouble hiring? do you really have to go with a perk like this? is it tough in raleigh right now to get more employees? you want to hire more people, right? >> we do. and it's very difficult to find software engineers who are extremely good and passionate people. they're in demand. it is a hot field so we, yes, we have trouble hiring software engineers specifically. >> have you done any cost benefit analysis of -- i mean, the car's not out yet, right? what do you think the lease will cost per month and per month for your company versus what you could have done with the money? >> right. so what it cost -- leases we have modeled the leases out and
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what it would cost to lease a car versus, say, a recruiter fee or versus, say, the advertising and things to do to get publicity for candidates to come to us, it's far -- we think it's far better for us to do something like this rather than try to go with the traditional channels. besides, it is different and kind of in our company's personality. >> already getting the free publicity right now. >> that's true. >> you know what it would cost buying it on cnbc? millions to get this many minutes. >> thank you. >> thanks, nick. good luck. >> i appreciate this. >> brian? we'll stay with cars, michelle. you might remember, folks, the former president and ceo of mercedes benz joined us here on this show. i asked him about record sales numbers and asked if we're at peak auto. here's what he said. >> it's at a peak. 17.5 million, very healthy peak. the question is how are the automakers responding? driving up at centers.
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propped up peak. increasing fleet sales. driving up incentive spending. all about market share. how long at this peak and how much to cost to manufacturers the hold on to it? >> all right. we are at peak but it's a healthy peak. bring back in former gm executive bob lutz and ivan fineset who was just out at tesla, as a matter of fact. bob, are we or are we not at peak auto sales? >> i describe it more as a plateau. and this time we have a kind of a differentiated market. the main battle for market share that he was talking about interestingly enough this time is among the german luxury brands who are -- primarily, primarily focused in cars and that's not where the big demand is. you know, bmw has had oversupply problems. three german luxury makes are in a constant battle of number one
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luxury seller in the united states. and that kind of competition is never good for luxury brands. but if you get to the -- look at the real market, the real market is now over 50% trucks, crossovers and sport utilities of all sizes and of course that's where the three american companies are particularly strong. >> bob, hold on. there's a school of thought in ten years, five years, 20 years that all the car makers are screwed for lack of a better term because we'll be in self driving pods. will that doom the auto industry? >> yeah. ultimately. not sure it's ten years out but, you know, when you asked about the peak, i was wondering if i should give my normal autonomous car speech and i decided, no. that's not what you're interested in because the market looks at the next year or the next 18 months. i think for the short term or short to medium term, sales are
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going to remain strong. but if you ask me will ultimately the creation of autonomous modules with no steering quheel that are totally standardized, they all have the same performance, they have much the same proportions in length so that they can blend together in a train on the freeway, et cetera, yeah. that is going to be tough for the auto industry. i mean, okay, somebody's going to have to produce the modules but who's going to want -- who's going to care whether they call up a bmw module or a chevrolet module? >> do you agree, how do you invest around what mr. lutz is saying? >> i agree with what he said. we have the look at the next one to two years. ten years is long time away. one thing about self driving cars is people love to drive, it's fun and the cars produced today by all the auto manufacturers play on that fun. people still like to drive. an at times great to have an
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auto pilot, tired or fatigue and e lemm nate those accidents. >> your job is to make money for your clients. how do you make money around the stuff we just said? do you sell short? >> i don't think we're auto? >> i agree with what bob said. we're at a plateau. i'm still bullish on the auto industry. demand will remain strong. we have penlt up demand, the average car on the road is close to ten years old. and the total cost of ownership of new cars is going way down plus the engagement. the collision avoidance systems, all the technology are also driving car sales. >> are you an owner of ford or gm? >> personally, i don't have any con fligflicts on buy. we have a strong buy on gm and neutral on tes l.a. >> bob, i put out a twitter poll saying in 25 years, what will be the primary powerer of automobiles? 34% of respond entsed is
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interesting. do you agree in 25 years electric already the number one power plant force of cars? >> yeah. i'd be interested what the so-called other might be if it's not natural gas, gasoline -- >> i made that. i had fuel cells in mind. i was also thinking of giant m hamsters. >> hamsters on a treadmill might work. you have to put a lot of pellet ntz h is in the hopper. >> electric vehicles are held back primarily by battery, energy, storage, and cost. in order to get a lot of range in a vehicle like tesla has done, it generates extremely high prices and even then, you know, tesla is still selling the things at a loss. so batteries will acleave some sort of breakthrough. energy -- every university and every klem call company and every car company is working on this. ultimately, batteries will be able at a modestly priced and
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modestly sized battery pack, they'll be able to store 350 to 400 miles. >> let's hope. >> at that point the piston engine is redunltant. >> there you go. bob lutz, thank you very much. ivan, thank you very much. all right. so we talked a lot about the consumer today and this week. we just talked about cars. has the consumer, that means you, america, really stopped spending or just changed where we are spending? around that, what retail stocks should you be buying right now if any? all that, believe it or not, coming up on "power lunch."
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check out a few names hitting all time highs to day. lowe's, assurans, nvidia and international flavor and fragrances. there they are. well, new highs until we weren't new highs with lows and iff, they're down. coming up, look at that building. look at it now because it won't be there after about 2:00 p.m. eastern time. a massive implosion of a major corporate complex coming in texas. we're going to show it to you when it happens.
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also, stores claiming discrimination at air b & b trending on social media, stories of, i should say, does the company have a race problem? we'll look at that coming up on "power lunch." there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be.
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welcome back to "power lunch." take a look at the markets here. we have green across the board with the most notable gains in the nasdaq that, vaely being led today by a huge move in the semiconductors. meantime, so far so good for friday, michelle. >> yeah. absolutely, memelissa. look at your screens. we're going to show you live pictures from ft. worth, texas. boom goes the dynamite, we thichlt literally in ft. worth. check this out. american airlines is set to implode the former headquarters in ft. worth any moment now. ceo doug parker helping to flip the switch. it is going to implode the buildings as they prepare the site for a new corporate campus in ft. worth. dallas demolition is going to use 100 pounds of dynamite. you go to the dallas demolition
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website, they say large or small, we wreck them all. implosions are always great to watch. this is amr and saber as well. and this is going to be a new headquarters eventually. it's been shuttered since 2009. they've been getting it ready. took them six months to get this thing ready for all the dynamite that's in various spots in the building. have you ever seen one of these? >> i've not seen -- usually you see a smokestack or like a stadium or something. never -- there it goes! >> look at that, man. >> and boom goes the dynamite. >> wow. simultaneously. that sim pressive, right? >> they really did it at 2:00, too. they are more on time than their flights. >> that's the first time american airlines has been on time all year. >> oh, my gosh. there he do have a tough on time rate. >> demolition one, american airlines zero. >> what is it cool about
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implosion that's we love? >> hopefully that they're controlled. poor people on the radio are wond wlaerg is going on. they blew up a giant three story huge former corporate campus. it imploded in -- they left the right side hanging. >> i notice. that i wonldered if they missed a few explosives. maybe that is by design. >> we have to leave the demolition. >> impressive nonetheless. >> it's been a packed couple of weeks for retake. walmart is showing streng njt latest results. is the consumer spending or not right now? let's bring in the ceo and chief research over at telsy advisory group and welcome back jan rogers. i'll kick it off with you. you're sitting next to me. what is your impression? clear winners and losers. they're spending on their home right now. maybe they're spending on home goods at walmart. what is your take? >> that's my impression as far as what the consumers are doing. they're buying houses and cars and stuff for the home. they're going out to eat and
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doing fun trips. that's withdraw the money is going. why did walmart do so well? because they dropped the price. you know what consumers like? a deal. it drove their business. they're also doing retailing 101 right now as well as they've ever done it. they have better instocks. the stoor is better than it was two years ago. assort dg ments are better. what really droest business, they said we're going continue to vest in price and keep investing in price. >> dana, does the consumer continue to act this way? is this a permanent change? temporary change? what is your take? >> i think overall the consumer does continue to act this way. i think they're very discerning. they have more choice on what to spend on than ever before. we were at this event earlier this week called shop talk the convergence of both digital and retail. the future is now. whether it's mobile or whether it's crm systems, sat data is powerful. that's what companies and retails have toinlt act with in order to figure out where consumers want o to spend and why. >> i'm angry and annoyed. >> why? >> not in life.
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just about this segment. i lot of fact that all the -- everyone is like this new trend of wallet share shift. do you remember two years ago i said to you and i called it the home and car indicator. my uncle owns a car dealership and my big friend runs a big retailer. this was the shift coming. i think at the time you said i was crazy. >> i think at the time i agreed with you. for two years now i've been saying there's a big problem with the shift online. there's a big problem with the fact that people are buying just as many clothes as they ever did but they're not paying as -- >> we talked about this here 18 months to 24 months ago. my question to you is now that everybody is sort of on this wallet share shift, do you think that it will now go the other way? >> i think the prices for apparel overall, it's almost like the race to the bottom. when you have number one more choice of where to buy apparel at cheaper prices and number, two the fact you don't have as many occasions to buy apparel for. what you wear to work, you wear on the weekend. what you wear on the weekend, you wear to the gym. it's all about that and wearing
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to a party. i think consumers today, they want experiences. i was at the opening last night of perch. perch is a store that sells both items for the bathroom and items for the kitchen. and that's the experience. they're making food for you so you can buy the kitchen that you want best. take a look at cosmetics, mac is doing outdoor events at malls. it's a different reality. >> how do you clothing makers excite customers? can they do the equivalent of the events that will spur interest in their new lines of sweaters or pants? >> let's pretend that half of all sales will be online in 13 1/2 years. so if you're not doing something great in your store and great in your mall, you're in trouble. let's pretend that brian's shirt is 40% cheaper than it was 13 years ago. so -- >> to make? >> to make and buy. you can buy it 40% cheaper than
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you could 13 years ago. >> really? >> you have this race to the bottom on pricing. you've got this race online which is also race to the bottom. pricing is transparent. so you better have a one fun store if you're going to get people in there. experience is going to matter a lot. >> dane yashgs you're the stock picker. when i look at nordstrom that are 50% discount where they were, they are strayeding in single digit price toerngs ratios, it's not hard to think the companies will be around. do you like eitherst names? >> i think they will figure it out. macy's and nordstrom will be able to reinvent the assortment. in orderstrom is the leader in going to digital and mobile. even buying e-commerce sites to learn. i think macy's, they have a team in place that they're looking for the next product cat gorey. they're look wlg it's buying blue mercury, putting best buy
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in shops, it's all about change. i think the companies will look different three and five years now than what they look like today. >> all right. going leave it. there thank you so much. dana telsy and jan rogers. >> all right. you think that the guys on your trading december sk have low st. what are we talking about here? low standards at the fed? >> what do you know about high standards? >> the fed this week points the markets toward the chance of a june rate hike. so how can the fed hike if the jobs reports -- here's the answer. the fed has lower standards than the market. while markets see 2900,000 mark as met sure of healthy payrolls, fed officials have a much different threshold. that is two weeks from today when the may jobs report very leased. the question is not if it's strong, it will be if it's strong enough for the fed to hike. here are various fed officials have said there are on the job growth. you keep the unemployment rate steady. where job growth quaez entrance to the wake force.
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the san francisco fed president $80,000 on average, and janet yellen was $100,000. eric rowsengren spoke about what he sees as a strong jobs report. given broad demographic trends, normal and trend payroll bloiment growth now is between will 80,000 and 100,000 a movement the difference is the fed thinks in terms of full employment and in terms of capacity. the market looks at job gains, earnings and hiring and growth. if you want to know what the fed is going to do, lower your standards and think of job growth the way the fed does. >> which is a little lower? >> so there's one number, ron insana joins us now to follow on on the conversation. job growth is one thing. inflation is another. we've been waiting for inflation to pick up, pick up, pick up. most recent number was as high as it's been in quite some time. is that going to trigger it? >> in my experience, the fed typically waited until we really
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reached the peak of the business cycle in as far as the unemployment rate overshot the fed's target. we got as low as 4% during the bush years. and now they're normalizing as opposed to tightening right now. there is a distinction given how the global economy s i think it's premature. i wrote a column about this earlier in the week. i still get readers saying either i want the foed keep rates at zero because it benefits me, not at all. i think you don't get to normalization until you get to normal times. and we're not there domestically. we know this through the politics. we're certainly not there globally which is still a consideration. >> you don't get to normal -- to full normalization, but do you begin the glide path up toward it? >> i wish someone could tell me why. is inflation a threat to economic growth? not when you look aren't world. when you look at agriculture commodities, they're in glut.
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there is three pounds of cheese for every man, woman, and child in this country. there is downward pressure on food prices. there is some upward pressure on energy. but inflation is not the type of problem that requires a response. even a preemptive one. >> here's the thing. what some fed officials will tell you, ron, is that a normal capitalist system requires there to be a cost to money. >> yes. >> and that you are distorting the system and distorting it permanently. the fed would like -- >> to the extent you have no cost. >> right. you should have a penalty, right? if you buy today rather than wait for tomorrow, you should get something back for waiting. and that's the way the system is kind of designed to work. it's very difficult and you create distortions. guys like eric rosengrand start to talk about concern about speculation and commercial real estate. that's one reason. >> there's no doubt it's. there. >> a couple other reasons i want to point out that will be the basis for hiking rates. one is the effects of the strong dollar and lower oil prices are seen coming out of the comparison figure.
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so you're going to get. this the other is you're at 16 on the core rate, hoping for two. that wla is the difference there? you can't glide this aircraft carrier to come through a little shoe box. >> we have to leave. to the extent that we run the risk of getting to inflation that's a problem, i think that is deminute mus. >> there is a difference between raising rates and taking away emergency stimulus. i think a lot of the fed want to take away some of that. >> the law firm of insana & liesman. >> michelle, back to you. >> i don't know if i want to visit that shingle. thanks, tyler. the hacking of twist. the global bank transfer service may be worse than we thought. the organization doesn't know for sure just how bad it is because the participating banks don't tell swift when they get hacked. we have more on that. >> yeah, swift is trying to do something about that today. they put thought letter to their customers.
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think of swift really as the central nervous system of the global financial system. it's the electronic mess efrpging system that banks use to authorize transer ifs of finances. sometimes millions of dollars, certainly billions of dollars a day riding on that system as the global economy churnz throus th the daily operations. swift is telling customer thez want them to tell when it they have been hacked. here what swift said in a letter to the banking customers. they said, we specifically remind all users to respect their obligations to immediately inform swift of any suspectsed fraudulent use of the institutions, twist connectivity. why is this happening? just last night we learned from a reuters report that a bank in ecuador had been hacked for about $12 million using the overall swift process. swift was also a part of the hack that was involved in the $81 million theft at the bank of bangladesh. en that is risen all the way to the attention of the new york fed bill dudley, the head of the new york fed was asked about
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this by our steve liesman who you just had there on set just yesterday. here's what dudley had to say. >> we fleed to continue to assess our internal control environment because as we see from these episodes, the threat -- the threat environment is always changing. and so we always have to ask ourselves a question. are we doing all the things that we did k. can do to make sure o system are as safe as possible? of course we're doing. that. >> he says, of course, we're doing. that we don't know publicly though what exactly the new york fed is doing to tighten up cybersecurity in the wake of this bank of bangladesh hack. remember, the money in that hack, the $81 million that was stolen, was in an account at the bank of bangladesh maintained at the new york fed at the time i was stolen by the hackers. now it's gone to places unknown and to hackers unknown. and the question here is how much of this has been going on in the global economy that we don't know about yet? that's what swift is trying to get to the bottom of today. >> we've been running a thing on the bottom of the screen that said the chairman of swift
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didn't tell swift that his bank was hacked. >> right. go back and look at that reuters storey. one of the players involved in the ecuador situation was an official with swift. swift is a global collective that is run out of brussels. it is not a central privately run corporation. it is a collective of financial institutions. a lot of people in the banking system sit on various boards and associations of swift. one of those people was involved apparently according to reuters in this hack attack and did not inform swift of the fact that it had happened. that's what swift is wrestling with. banks would rather sweep this. >> narrator: r-- under the rug and not admit it happened. >> unbelievable. okay. thanks. >> you bet. >> slamming the door. airbnb facing accusations that hosts discriminate renters by race. does the company have a race problem? that and much more ahead on "power lunch."
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air bnb slapped with a lawsuit after an african-american user claimed he was racially discriminated against on the lodging site and that his complaints were ignored about it company. this might not surprise our next guest. harvard professor -- harvard business school professor says that african-american guests are rejected more often than white guests.
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also with us is former citigroup director of diversity. she now runs her own consultancy firm and she changes her name so make sure she can book a room or a place or a mansion. welcome to "power lunch" g to you have both here. professor, this individual tried to rent a room in philadelphia for a weekend. he says he was rejected. he went back and created two other identities where he pretended to be white and he says that same person accepted those two people. you did a study, so i'm assuming this kind of situation doesn't surprise you? >> it doesn't surprise me at all. it's completely consistent with what we found in our study. >> and what did you find? >> we found that african-american guests were about 16% less likely to get a why from a host. if a black guest applies, their chance of getting a yes is lower than a white guest with everything equal about them say
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other than a name that suggests they're white or black. >> no photos, correct? >> that's right. we put a gray outline of a person with no racial characteristics, no face, nothing like that. >> so white guests, 50 persz of the time got a yes while african-american guests only got a yes 42% of the time. and you are convinced that based on the way you designed this study that it is solely due to race? >> that is what we were trying to achieve and we think we did it right. guests were both rookies on air bnb, none of them had any reviews, reputation, linked friends. the black rookies have more than the whi. >> the way did you that is based on name. for example, a white girl is named kristen. an african-american woman was named tamika, a white male would be brad and a black male would be rashid. >> we used studies to get the
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whitest and blackest names for people in their 30s today. >> i saw when you go to paris, for example, you book an air bnb, you change your name. >> yes, with a name like fatah, people believe that i'm either a muslim or i might be black, sometimes people pronounce it as fatima. so when i was going there several months back, i made sure when i created the profile so i wouldn't be discriminated against, i changed my name is jane smith and didn't have a photo up. it wasn't until i actually secured the location, paid for did it i tell the person what my real name was. >> professor, is there anything to be done about this? can you create a platform? could air bnb create a platform that would avoid this kind of situation? >> absolutely. there's no reason why a host needs to know a guest's first name, last name or photograph in order to assess whether the guest is trustworthy. if the guest has paid the money, that's a pretty good start unlike a hotel, say, which needs to worry whether you're going to pay upon departure.
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if there's a worry about the safety of the reputation of the guest, okay, then air bnb should verify a driver's license or maybe run a credit check, what you have, check that you really live where you say you live. check that ip address matches the mailing address. incidentally, they do manufacture those things and, in fact, if a black guest creates a new account in a fake name and then air bnb asks to see a scan or fax of the drooifriver's lic what then? they can't go around creating fake accounts in other people's names b half the time, air bnb will var vie them before the transaction is created. >> uber, for example, when you talk about a disruptor and online zrudisruptor, we found i new york city, for example that, it far more likely that you can get an uber where african-americans live as opposed to a taxi. so i mean in some ways, technology can be an equalizer and other ways not, necessarily. >> well, i think it also speaks to a broader issue that might be
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going on with the tech sector as a whole f we're going to talk about uber, uber has the own challenges. they have run promotions in new york that discriminate against harlem and upper manhattan. it so i'll table the uberri issue right now. can you look at air bnb that has 17% latino, 3% black, they have an internal problem and it's not just about their platform. >> all right. thank you lady and gentleman. great to you have here. we reached out to air bnb this very a blog post about this situation. discrimination based on race is plagued societies for centuries and sadly this kind of behavior takes place online and off line. they go on to say they do not support it in any way and that they tried to do things such as instant book where actually you just pay right away and there is no discussion about whether or not the place is available or not. you can check it out if you'd like to see more of air bnb's
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response. move over san francisco. there is another big west coast city that is fast becoming a hot start-up scene without those crazy real estate prices. find out where next.
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san francisco may get all the attention for the billion dollar start-up scene, but in california, san diego holding the own now ranking as a top ten start-up city two years in a row. venture capital funneleding hitting the highest level since 2007. $1.28 fwhl 2015. kate rogers live with a look at more of that city's start-up ecosystem. kate? >> hey there. we are in the other bay area of the san diego bay. it's where jeff winkler decided will he to start his business origin code academy after realizing there was only one other competing code class in the area. but he also wants the people that he hires to get jobs afterwards. so we'll go out to the big employers in the area like
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qualcomm and microsoft and ask them what kinds of skills they want in entry level hires? then he'll taylor the curriculum to fit. >> whether we had conversations with employers and really heard how frustrated they were because they couldn't find tall nent san diego because it was leaving for the bay area, that is whether we decided we had to be here. >> winkler got the idea after taking a coding class himself and realizing he didn't learn all the skill he needed to get a job. but he also wants to keep his talents from migrating up north to san francisco. so far he's taught 36 students and his job placement rate is at 100%. >> did he a really good job of preparing us and, you know, when i went into the job market, i was going led to head with computer science majors and getting jobs over them. >> origin code academy is not just accepting anyone. they have 450 or so applicants for their last class of 16. like we said, he is cautious of not growing too quickly. does he want to keep that job
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blasement rate at 100%. he also wants to make sure the talent he is helping to cultivate stays right here in san diego. back to you. >> thank you very much, kate. the winning week for oil. prices getting ready to close. we'll have the final trades there in three minutes. plus, debris from egyptair will 804 has been spotted in the mediterranean. a former ambassador to egypt tells us what this plane crash means for security in the region. t-mobile is going big for small business. you'll never get charged data overages, ever. get your own 24 / 7 dedicated business account team. and with double the lte coverage in the last year you can get more done in more places. right now get 2 lines with 10 gigs each for just a $100 bucks. and for a limited time get a hot spot free, yeah free. switch your business to t-mobile@work today.
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michelle obama announcing new nutrition fact labels at a summit in washington as part of our let's move campaign against childhood obesity. >> this label will tell you how much sugar in your snack was added during processing and how much of it comes from ingredients like fruit. you'll no longer need a microscope, a calculator or a degree in nutrition to figure out whether the food you're buying is actually good for our kids. >> striking verizon workers wearing red shirts taking part in a protest march across the
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george washington bridge. they have been on strike since last month after working without a contract. health care and pension costs, the sticking points to a new deal. russian president putin says russia is ready to offer full assistance to the world anti-doping agency. during the investigation into claims of a russian state sponsored doping scheme at the sochi olympics. he also voiced hope that the inquiry does not have any political overtones. and maroon 5 is joining the list of big name acts to cancel shows in north carolina because of that state's controversial bathroom law. the concerts were scheduled to take place in september. you're up to date. that is the news update this hour. back to you. >> all right. sue, thank you very much. well, the oil market is set to close today and for the week. prices down a little bit overall. overall, a pretty good week for crude oil bulls. prices up a little more than 3 1erz whi3% which means goss prices are going rise in your neighborhood as well. you know what else is rising this week? the dollar against major
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currencies. what is the best way to play, trade, invest this move? let's ask the "trading nation" team. chad, give yurs beus your best play a rising u.s. dollar? >> as the federal reserve raises interest rates, that puts the bid under the dollar. we recommend the long end of the treasury curve. the long end of the yield curve. we believe that global investors, especially institutions are starved for a yield. so effectively, what they're going to do is reach for perhaps the ten or 20 year treasury. on the back of that, there's also fragility that financial system and as the federal reserve raises rates and the dollar increases in value, we believe that volatility is going to increase and that's also going to ginn up demand for the treasury. >> okay. nick, a, do you agree? if not, what else would you be doing? >> that's a very solid thinking,
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particularly on the volatility side. from our perspective, we're seeing a lot of sell side interest on consumer staples, companies with a lot of internationally branded businesses. and they're going to face a head wind from the stronger dollar in terms of their operations overseas, not being able to repatriot profits of a weaker dollar. that's a head wind. even though the group up is 3.5% on the year and a gwynner weeshgs seeing some selling because i think people are looking at the potential for higher rates and worried that dividend yield stocks may not be as attractive. that's a group to really avoid right now. >> okay. there is some stronger dollar ideas from nick and chad. guys, thank you very much. we'll see new a bit online. folks, reminder, we do two additional segments online every day. can you find them online. i think i mentioned they're online. >> they are. check them out. the search continues for missing egyptair flight 804.
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the egyptian army found passenger belongings and other parts of the plane north of alexandria. they say it was possibly a terrorist attack that brought down the passenger jet. let's bring in edward walker, the former u.s. ambassador to egypt to israel and the uaeg to have you here. >> thank you. >> we don't know for sure it's terrorism yet wouchlt be surprised if that's what we find out? >> i wouldn't be surprised. the sinai has been a series of terrorist attacks against egypt. there's a the love bad blood. i would expect this is possible retaliation. >> why is egypt more of a target right now, say, compared to other parts of the world? even though, of course, we have seen paris attacks and belgium and the united states. >> we're talking about isis now. the islamist radical group. egypt has been fighting them for a long time. and they have been upgrading the
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defenses and the sinai and they cut off their tunnels which were going into israel. they cut off the trade routes for isis. they're isolating them in the sinai and they're having a full-court press. so obviously isis is not happy about this. >> is there additional potential retaliation because a member of the muslim brotherhood was lekted to lead egypt and then pushed out of the military along with the popular people that were not happy with him? >> i'm not sure that isis is enamored with the muslim brotherhood anyway. they're not on the same page. they're both islamic but at all of the same nature. i'm sure this didn't help any. and what they're trying to do is they're trying to destroy the egyptian economy. >> what needs to be done at this snoint. >> at this point, all hands on deck to try to defeat these
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people. >> what does -- >> they're not going away. >> does that mean more involvement from the united states? is that more involvement from europe? define that for me. >> all right. certainly you are going to have a lot of support for egypt in this circumstance from europe and from the united states. i'm not sure that there is much we can do at this point. i'm certainly sure the president isn't going to authorize troops nor do the egyptian need them. they have more troops than they know what to do with. so it will be a long, hard slog. and the egyptians have been at this for years now against this group out of the sinai and i think we'll do everything question to support them. but it's not going to be easy. >> tough situation. thank you so much for your insight, ambassador. >> you bet. >> ambassador walker. all right. listen up, tsa. how to solve the problem of the long security lines at the airports. we're going to speak with the ceo of the health care company that is taking its scanning
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technology from the lab to the airport
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that's what the ibm cloud is built for. . welcome back to "power lunch." i'm sue herrera with this breaking news bulletin. mexico's foreign ministry approved the extradition of el chapo guzman. since he was captured, the united states juaned him extradited back here. mexico was pushing back against that. but right now the mexican foreign ministry has indeed granted the u.s. request to extradite el chapo back here to the united states.
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we'll keep you posted. there is no date or time line yet, tye. when we get that or if we get that, we'll bring it you to. >> i expect there could be appeals involved here. he was recently moved from the prison from which he had escaped to another prison that was closer to the u.s. border maybe in preparation for just this kind eventuality. there he is today on the day of his arrest. >> you know, in this latest person that he was in, they would move him up to eight or nine times a day because they were so worried that he would be able to find some way out again because he did escape from that previous prison twice. but they kept him on the move. it looks like he's going to be extradited back to the united states, pending any appeal. >> thank you, sue. ahead of the tsa is in chicago today for a first-hand look at the long security lines at o'hare airport and they are long. phil lebeau is there as well. hi, phil. >> tyler, we should say they were long. imagine that. the tsa chief comes to chicago
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and all of the lines are remark my short and it was a quiet day here at o'hare. that did not prevent the meeting between the person that runs the tsa as well as dick durbin and rahm emanuel. they met for a half hour talking about the need to do better. all of this comes just a few days after the tsa announce second down 58 more officers will be coming to chicago airports this summer. they're adding staff to the largest airports around the country. remember, last weekend and we saw it last week as well, there were hundreds of people around the country who missed flights because they were stuck in long tsa lines. sometimes for two or three hours. the tsa blames the long lines on the system breaking down and the need to improve the situation. >> i think this summer is going to continue to be a challenge. we have passenger growth. i'm not -- i have as much staff as i need. i think we're doing everything question to mitigate that at the largest airports. my goal is -- i think you'll
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still see crowds in airports. my goal is to keep you moving. we can't have a situation like we will here in chicago again. >> one person who met with him today was american airlines ceo doug parker. he was in the meeting. we couldn't be in the meeting but we did hear him say, look, we have to do better with there system. american, by the way, has pledged $4 million to hire more people at many of their busiest hubs. those people will assist the tsa. they're not going to do security screening. they will help the tsa at those checkpoints so that hopefully people with move through quicker. again, guys, no lines at o'hare today. >> all right. phil lebeau, thank you. >> one company is working on new ways to improve the security process. that company is analogic, a leading maker of airport baggage check screening systems. jim, great to have you with us. >> thank you. good to be here. >> you've been working on ct technology for the past 40 years.
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primarily for medical imaging and then after 9/11, the government said how can we use this? you got this machine now and you say that it can cut passenger wait times in half. how? >> that's right. we started talking with airport authorities and with the tsa about eight years ago. we figured that if we could automatically detect exactly what is inside a checked bag and a half second or so on a high speed conveyor belt, we should think about how can we apply that technology at the check point? so about seven or eight years ago we started on a design process to take the technology and trial it at the checkpoint. in the u.s. we trild it around 12 different airports and trialed in various airports in europe. we recently completed trials and we recently collected a lot of data, completed trials that are now operational in london's airport. so we have hard data that suggests that we will improve -- we will reduce wait times by a factor of two. >> part of this, i mean this is
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all for the carry on luggage. part of this is that people don't have to mess around with their -- taking the liquids out and laptops out. can you leave that in the bag and the bag just sails through. >> that's exactly right. a big part of the reason why it's slow today is people have to take items out of bag. often the person scanning and looking at the x-ray machine is going to stop and start the machine and rescan and that really slows things down. with the ct scanning technology like ours, the system runs real time and it keeps running. it doesn't stop. it segments what inside the bag. we know what is in. there we can tell the operator what it s we can automatically flag if there is something we're not quite sure of the system runs dramatically more efficiently. >> the xapescanners are in operation. i wonder, you know, we've seen a video of last the long lines at all these airports especially cla chicago o'hare. have you been talking to the tsa and how much does this thing
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cost? >> we have been talking with the tsa. the tsa fairly recently started to show more interest. i think the europeans were starting to show interest earlier. they see there is a real business reason why to adopt this technology. we're -- what we're trying to do -- and today's product, we have a product today that will go into the line, into the line of commerce. it's slightly more expensive than what you do today with a multiscan x-ray machine. >> which is what they have right now, sfligt. >> that's right. that's right. the new system is going to be the same overall cost but dramatically different. half the speed, half the weight times. there is technology today. it is up in operation today. >> and you're in talks. jim, great to speak with you. thank you. >> great. thank you. >> jim green, analogic ceo. onablist is getting bullish on a bearish stock on the street and one retail stock that goldman
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sachs says could surge 30% from here. those calls and three more. "street talk" is on deck. what are you doing right now? making a cake! ayla reminds me of like a master chef and emiana reminds me of like a monster chef. uh oh. i don't see cake, i just see mess. it's like awful. it feels like i am not actually cleaning it up what's that make mommy do? (doorbell) what's that? swiffer wetjet. so much stuff coming up. this is amazing woah. wow. now i feel more like making a mess is part of growing up. stop cleaning. start swiffering.
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♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪
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we didn't forget about "street talk."
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stock number one, dish network. jeffries adding dish to the franchise picks list. the analyst says the street is overly bearish on dish and says everybody else, except for him, is underestimating the value of their spectrum holding. they like the fact that the spectrum is so-called mid ban. any other spectrum could be a positive catalyst. it's got an $80 target on dish which is 70% upside. >> yeah. and it's been a target of the short sellers of late. it came on this network to present its bear case. the stock is down 32%. >> like a $100 million short positionsome. >> something like that. it's big. >> it's big. >> next up. drexel hamilton is on an upgrade with a 152 price target. those concerns seemed to be receding after they named a
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former lougheed director. >> it's a bold call. stocks have nowhere ever been near 152. i'd have liked to vn seen it three weeks earlier. stock number three, jones lang lasalle. this is goldman upgrading it to a buy. they've got a $144 target with a 30 7 upside. much of the call has to do with the company's underperformance. the analysts say despite slowing capital managements jones lang should be able to benefit from market share gains. remember, second positive call in a few days. >> i was going to say. >> a buy at $131 target. >> exactly. >> i like to double call them. >> next up. applied materials posed well above the consensus. they say it's one of the best position companies. it's benefiting from strong near three-year term. it got exposure to foundry and
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logic demand. those segments are not that great but the segment's seem to be improving. price here, 26 bucks. >> >> two in one day. >> finally, if you're under the radar, smaller cap name, parr pacific, p-a-r-r. they're depressed and going down. they see it in their portfolio. they geesht a $21 target on par, which is a few pennies above 16, so a significant upside seen on this. >> nice one-day pop. 7%. >> with that we wrap up street talk for the day and the week as well. speaking of a-mac, chip stocks
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are rallying. they're on their best streak since february. here's the question, melissa. will the rally last and what stocks should you be buying right now? find out when "power lunch" returns. recently, a 1954 mercedes-benz grand prix race car made history when it sold for a record price of just under $30 million. and now, another mercedes-benz makes history selling at just over $30,000. ♪ and to think this one actually has a surround-sound stereo. the 2016 cla. lease the cla250 for $299 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.
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our cosmetics line was a hit. the orders were rushing in. i could feel our deadlines racing towards us. we didn't need a loan. we needed short-term funding fast. building 18 homes in 4 ½ months? that was a leap. but i knew i could rely on american express to help me buy those building materials. amex helped me buy the inventory i needed. our amex helped us fill the orders. just like that. another step on the journey. will you be ready when growth presents itself? realize your buying power at chippies rallying. the best since february. let's bring in patrick hoe. great to have you with us.
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orders hitting 15-year highs there. they're seeing growth in particular from 3-d and them. >> i think it's a broader perspective, particularly on the 3-d man side and as the technologies emerge in the industry, a lot of it relates to the smartphone processors and thing of that nature. i think it gets a lit bit more of a boost. >> a lot of the names are rallying. lg display and others. i'm wondering if you think there's still room here amongst the other players. >> oh, i think for applied materials first specifically, i think this is an area of
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sustainable growth over the next several years because i think from an industry perspective, in capacity is at the early stages and where it's applied particularly in the deposition as will as what they talked about, they have market share leadership, but from an industry perspective, i think there's a lot of other opportunities out there. >> and i know you don't cover the makes per se, but how should we take this news? did the semiequipment makers do better and then the chip makers follow or would it be a coincident rally? >> i think it's a little bit of a lead indicator because as i've always told people. you have to have the equipment in place before you actually produce the chips. so we're seeing it on the man side. that's the supply end user
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demand that's out there, particularly with data centers. the cloud. all of those stores needs are going to require it. so it does benefit companies like the intel os the world. so, yes, i think it's a bit of a lead indicator for the rest of the chip maker world to follow patrick, we're going to leave it there. thank you so much. patrick ho of stifel nicolaus. >> you know what's not up, and i owe this note to an eagle-eyed viewer who said, hey, look at mcdonald's. i know it's coming off all-time highs. it's down ten shares. by far the worst performer in the dow. i don't have any information on why. maybe we'll find out on "fast money." >> we actually are going to be talking about mcdonald's. you know what else is curious? apple's move on the week.
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it's up 5%. >> maybe the trends of eating are changing. >> what is the yield? that seems like a big underperformer. >> this has been a week in which people have been taking a hard look at the winners for the year and given the uncertainty around the fed, we saw that, for instance, with home depot. they reported a great quarter and people took profits in home depot. >> we should mark this is the week where once again, summer rate hike. >> it's reminders of all of those things. >> in the old incarnation of "street signs," we had an "f" jar. every time you said "fed," we put money in it. >> i'm all for it. that's a good idea. >> i bet we'll have $500 in it
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by the time of the fed meeting. >> i bet we will. >> and we can take it and go to mcdonald's and up their stock. >> have a great weekend, everybody. >> "closing bell" starts now. four, three, two -- hi, everybody a, and welcom to the "closing bell." i'm kelly evans. welcome to the new york stock exchange that i'm bill griffeth. the dow could close down for the fourth consecutive week, something that hasn't happened since october of 2014. a couple of years there. we'll take you through the final hours of trading. >> and a new report that tesla suppliers are getting nervous about the model 3 production target. we've got news on the expectations. >> this is like a senior thesis. you've got a very ambitious thesis planned and the deadline is coming. yo


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