tv Power Lunch CNBC May 24, 2016 1:00pm-3:01pm EDT
will surprise people. there are plenty of people that still think they won't go. >> i bought sink any financial and add it had to the "halftime" portfolio and real money and in the portfolio financial stocks. >> pete, two seconds? >> keep an eye on financials. my favorite name still, jpm. >> we'll see you tomorrow. k" "power" starts now. stocks are in rally mode this tuesday as an off-the-charts housing number sends the bulls running. right now take a look, the dow and s&p seeing their biggest gains in two weeks while the nasdaq is having its best day since march, up by 1.9%. welcome to "power lunch." along with tyler mathisen and brian sullivan i'm melissa lee. michelle caruso-cabrera has is week off but have no fear mr. wonderful, kevin ole lie is riding shotgun with us over the next two hours. great to have you with us. eric marshall, co-manager of the hodges small-cap found and david
seaberg, great to have you with us. eric, riddle me this. what has changed and why today do we feel so great of a fed rate hike? >> i have no idea. i think, you know, we're going to be in a cheap market here for the foreseeable future just because of all the uncertainty surrounding interest rates, consumer spending and political uncertainty here and in europe and while this frustrating sideways market may be difficult to navigate we're still finding opportunities in the hodges small cap fund. >> where? >> we're really looking at some areas such as some of the non-energy companies that have been beat down over the last six months by oil prices, something like a legacy texas bank share which is a bank that we think is very attractively valued here. the perception of energy exposure is not as great or the reality isn't as great as the perception in this stock and we think it's created an opportunity for investors. other areas that we like are
areas tied to infrastructure spending, like eagle materials where you're investing in cement and concrete and we see very nice tailwinds for those businesses, regardless of what happens in the broader economy. >> david, i want to bring you in here. it does seem like in today's session there's a risk dark on mentality. eric is part of the world's small caps outperforming the broader indices and seeing big gains in technology, s&p technology sector up almost 2%. do you ride on with this risk-on mentality today? >> absolutely not. i think you know my position on it and this is what it is, it's essential lit hedge funds extremely nervous right now, super nervous about underperforming and an up tape so no incremental seller. they have a feeling of being under exposed and volume is light across the board and everybody is negative and we're getting a gap up on light volume. i think it's a little overdone. nothing really compelling here
for me to step in and buy to chase this rally. >> what are you selling on this rally then? >> i mean, i think everything pretty much across the board. >> you fade this move in general is what you're saying? >> i would fade this move in general. i think the only segment of the market or sector that looks a little bit from a valuation perspective attractive is the biotech names given the fact that they have been beaten down but still there's still super negative sentiment there and look at ibbs broken up through the 50-day for the first time in a few weeks and just from an overall valuation perspective, that's one pocket of the market that you can actually argue. there's value. >> kevin o'leary, started off the segment asking a riddle why things are different today. do you see anything different today? >> optimism around europe as well. it wasn't just the domestic housing market. 1.4% in germany when everybody is expecting zero or negative was very surprise and that wave
of optimism came into our equity markets in the future so if you're long europe you're up big today, anywhere from 1% to 1.5% and it buoyed every sector. >> you are long europe and have been for some time. >> the negative you've got britain leaving, terrorism. the thing is though the stocks have had the living stuffing kicked out of them, trading at such a massive discount to the same companies ghestically. i can't help myself and i'm looking at it as a volume investor. when i talk about glaxo and roche and nestle and people on the street say these are great mesh companies. not american companies and just have 88% of their sales. >> thanks and let's go out to rick santelli in the bond market. a bond auction just took play. >> well, melissa lee, conventional wisdom a two-year know. nobody wants to own it. if the fed tightens yields are going to go up. boy, were they wrong.
this 26 billion of two-year notes gets an "a" as in apple. yield at auction 1.92. the market was trading around 94.5 and offered at 94. the low yield on the entire session was 91. this was blowout pricing, so on those 26 billion, let's go through the internals, 3.00 bid to cover. oversubscribed to by a factor of three. best since november of '15, just a few months ago. 49.8 on indirect, best since february of '16, not that long ago but here's one for the ages. the direct bidders at 32.5 was the best since october of 2012. primary dealers take 17.7% of the auction. i guess the concession built in meaning prices have fallen and years have risen since the minutes was enough to draw in investors. of course, tomorrow, five years to the tune of 34 billion.
back to you. >> rick santelli, thanks. appreciate it. now to the blowout home sales number and diana olick live in washington with the pretty big numbers. diana? >> reporter: huge numbers and a big jump in newly built homes up 6.6% for a month to a seasonally adjusted rate to 16,000 units. talk about a beat. sales up 24% from a year ago the highest pace since january of '08 but not just that headline turning heads. the median price of a newly built home sort up 9.7% year over year to the highest reading on record. the last peak was in 2006, and that's a median which means half sold at a higher price and half lower so it may speak more to the shift in buyers, that is, more high-end buyers in the market, especially since builders are basically absent from the starter home market.
now you saw that in the big beat by toll brothers today raising expectations for 2016 sales and seeing its already luxury median price head north. the average price in q2 for homes delivered $855,000, up from $17,500 according to the company release. clearly builders are benefiting from the lack of existing homes for sale from near record low mortgage rates and from an improving jobs picture. back to you guys. >> thanks. the home builders on fire in the back end of the blowout housing number. we were talking before the show, the market may be surprised by this big beat. you were not because you're in touch with these companies. who out there though among the names, specific home building stocks, is really driving these kinds of gains? >> if you're thinking about stocks to play, first off, to set the table, we got helium in the housing market because of the fed, super tight inventories
creating demand and massive job growth. a great setup for a slow and steady recovery that's going to benefit stocks like d.r. horton which caters to the first-time home builder. their numbers have been on a rampage. you saw a very expensive print to date from toll brothers and really like what's on with lennar and patty struggled a little bit last year and they turned the corner and are moving forward resolving execution issues. >> bob, sit tight for one second. we're going to jump in with more breaking news on monsanto. dom? >> we just want to call your attention to the fact that monsanto shares have reopened for trading, now up about 2% marginally higher than they were before the trading halt for news that monsanto had formally rejected that buyer takeover bid of $22 a share. also noting here as well that the takeover price that they proposed for $122 a share, the sandercock has gotten to a high
of 109.13, $109.13. not gotten to that level since the reopen and we'll keep you posted and for now that's the news on monsanto. have reopened for purchase. >> diana talked about toll brothers and the average selling price, wow. i mean, a huge jump but that stock over a year has been a dog. it's down something like 10%. why isn't toll performing with those kinds of numbers? >> toll's targeting big presence in the california market, strong tri-state, new york, new jersey, pennsylvania. a lot of concern that these markets are a little frothy right now and there's slidity to that. can they sustain the pace of growth? there's questions that need to be answered. we prefer a company like d.r. horton and lennar, much more focused on the entry level builder because that's the segment. >> used to be high end and now you're saying the entry level is the better trade. >> got to go where the puck is
going and it's going right to the first-time home buyer. i want the companies that will drive that price and growth sglvp the companies that make the stuff that goes into the homes, the eagle materials, the usg, the treks, masonites, they have done far better than the home building stocks themself. you would think they would trade the same. why is there a difference? >> big production costs, as you ramp volume you get massive market expansion and we're seeing this with market leaders lie masako, mohawk, fortune. the big three strong horses selling into home depot. massive demand and strong consumer mixed shift of higher-priced products and getting the benefits of the tailwinds. look for this to continue in the back half. year and looking for other names to invest whirl spool an
extremely well-managed company and another name which would benefit from similar trends, along with masonite. so there's still a lot of opportunity remaining after the big riots. bob, appreciate your time. thank you very much, brother. tyler? >> tudor investments will trim its fees on at least some of the funds in its stable to help keep investors on board and happy. kate kelly is with us from new york. what is my fellow uva grad paul tudor jones doing, kate? >> reporter: well, paul tuldor jones has had a tough year so far, tyler. had some redemptions and went from 13 billion at the end of last year to 11.6 and also the flagship fund is down about 2.6% through mid-may. not alone and a lot of hedge funds are underperforming and what makes it somewhat unique is the fee structure they have is higher relatively speaking than the industry standard, the sort of 2 and 20 that you hear about,
2% of expenses. so, in other words if i invest a dollar two cents goes towards the expenses and then on any upside they take a quarter of that before the investors see the rest. their funds were historically higher than that. what they have done now is reduced some of those funds but here's the catch. their fees still remain relatively high. they are still above the 2 and 20 compared to the rest of the industry even though in this case it's an inducement to make it a little bit more attractive. >> my notes, kate, tell me tudor has lowered expense fees on one of its funds to 2.25% to 3.75 and the performance fee down to 25% of gains from 27%, but that presumes kevin ollie that there are gains which apparently, as kate points out, there have not been in at least one of those funds, tudor investment down 2.6%. you're a value player. you're a value investor. you see value in hedge funds? >> hedge funds have been a problem as an asset class.
'07, '08 and '09 when we had collapses in the overall market and when it's encapsulated in a hedge fund format you got gated. in other words, they can't give you back your money. they have elephant-like memories and remember that and have a different problem of late. simply not beating the mark. the way to look at hedge funds i don't care what the fees are, 2 and 20 and it's after free performance, the way they advertise themselves. it turns out for many hedge funds, leaving individuals out of the equation or conversation anyway, they weren't hedged at all. they were levered. they weren't betting against markets. just using a tremendous amount of debt to turn the turns. when things went bad they got triple or quadruple the downside because they were using leverage. it's been a very ugly 24 months for hedge funds. there's many of them down 20%, 30%, 40%. >> right. >> and the institutional investor looks at this and says why do i need this?
a lot of volatility to my portfolio. i think. they will be under performing for quite a while. >> thing you. a bit more breaking news, i'm told. is the that correct? we'll have a little more in a bit but we're getting started here on about "power lunch." up next the one thing that could be a huge game-change for apple's investors. plus one country is seeing huge success with a six-hour work day. should we do the same? we'll debate it when "power lunch" returns. there's a place for vacationers who seek more
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welcome back to "power lunch." ale shares are climbing after a photo was leaked of what claims to be the case of an actual iphone 7 and photos emerging from a site called nowhere else. not too many major design changes on the iphone. that phone is expected to be released this fall along with a new macbook pro. with apple shares down 26% in a year could the new products turn the stock around? let's bring in tim long who has an outperform rating on bmo capital markets. tim, great to have you with us. >> thanks for having me. >> does it matter? do the pictures change your view of how successful the uptake will be for the 7? >> well, you know, a few things. first of all, obviously the product is going to be very important. what are the features and what's differentiated? we hear a lot of things, more
cameras, more speakers, obviously a stronger processor. we don't really know until we get really close to the -- to the phone launch, until we see that, but, you know, the other thing that we think is very important is to look at installed base and how much it's grown and the age of the phones which we think are very old so we think the setup into the iphone 7 is much better than it was for any previous model. the last time there was a positive setup there was the 6. of course, a new form factor for them so it was a much easier advantage for them to really upside those numbers. and we do think it's positive with 120 million phones in people's hands that are multiple years old so we do think it's a positive setup and think there's good upgrades even thought the phone is not a home run on some of the features. >> i feel like we're talking about another dow component, boeing. apple is starting to feel like we're talking about airplanes. have the 737 700 and 737 800.
>> and the planes are getting older so they have to change the planes. >> like whatever. >> and they tout these small incremental improvements, is really a 7 or 8 really going to make a difference to a consumer who is probably happy with their five or six that works just fine? >> the microsoft policy? >> yeah, this is very broad-based market. we're selling 1.5 billion esfoerns. some $50 and some are $800 so there's a very wide spectrum and a spectrum of users so there is going to be a component of the user base that wants that killer feature to upgrade. there are others that are happy waiting so generally we've seen that replacement rate extend a little bit, but, you know, at a certain point. the apps doesn't work as well and a battery goes a little bit. buttons break so, you know, over time we're going to see upgrades, but, yeah, our thesis
is the 5 when they added 4g and the 6 when they added the large screen, we're not going to replicate those type of changes to shipments or to growth or to increases in specs ever again. we think it will start to modulate a little bit more around incremental features, but i think that that's enough because the key is with the install base up 80% over the last two years, there's just more people to upgrade from there. >> yeah. >> my concern about this dialogue, particularly in the last 24 months about apple and i'll ask you about this, tim, we used to talk about apple and all the other products and high margin opportunities, all the other buses, and now the dialogue is about the feature set and processor speed of one phone. that smells like motorola or nokia did to me a decade or two decades ago. what happened to the story of the eco-sphere and the giant platform and the opportunities and the high margins and the global growth on everything else besides the phone because if
this is the story, it should have stayed left. margins can krunchltd all the features you just described are already embedded in the samsung 7 edge. it already has all that. camera, higher processing speed and all those features so what? where's the rest of apple? what happened to apple? send it home. what happened to it? >> yeah, well, look, one of the important things that we express and the subscriber base which is over 600 million iphone subscribers and a good chunk of those are now used phones where you take your phone and you give it to your son or daughter or father and they -- they, you know, start an itunes account. that service line is growing 20% this year. it's going to be over $20 billion. it's a higher margin product. it's recurring revenues and think of app store itunes and apple care and music and things like that so i think that's a very important component of the story. as far as the rest of the hardware. know tablets are in decline,
pcs, markets in decline and gaining share and don't do much. the watch was not an initial success but if we get a refresh there with a better battery life and better ampcations that can be good. it's a very large company now so i think that's one of the issues with the stock is you have the legacy of huge growth and big momentum and upside. it's just gotten so big and harder to replicate that. see that in the valuation. thanks so much. monsanto shares reopening higher after rejecting a takeover bid from bayer. more from david faber on this breaking story. >> thanks very much. the important part is the rejection itself. as i've been saying for a number of days, it was expected monsanto would reject it. how they would reject would be the key and they have done it in a way that's certainly very encouraging for bayer and that's why you're seeing the shares up again to 108.09.
the deal on the table is 122 an monsanto doesn't feel that that's adequate and they do leave the door open very substantially. let's call it wide open in terms of negotiating a deal with bayer and that's the key here because if they wanted to, they could have potentially again down a very different road, scorched earth in which perhaps they would have brought up conceivably, antitrust objections and any number of things out there. did not do that and the question, of course, is whalts ability of bayer to reach a price that monsanto feels is a fair one. certainly not 122. perhaps you get to a higher multiple to future ebitda that gets it closer to 135 or 140. that at least is what many monsanto people have been talking about. >> how strong is their hand given that it's never traded near the 1922 price? >> it's very strong though they simply can say no. bayer and their new ceo seem
very determined here and they do have a path, as we like to say, because the brechtors at monsanto is not staggered. it's up all at one time and, in fact, the window does open october 1st. that may be another reason why monsanto is negotiating here as opposed to simply saying no way. >> all right. david, thanks. >> next up, a biotech billionaire faces off with a publishing giant and much more on that big battle. these next. pa it's how you stay connected to each other and to your customers. with centurylink you get advanced technology solutions, including an industry leading broadband network, and cloud and hosting services - all with dedicated, responsive support. with centurylink as your trusted technology partner, you're free to focus on growing your business. centurylink. your link to what's next. perfect driving record. >>perfect. no tickets. no accidents... >>that is until one of you clips a food truck,
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i'm david faber. tribune publishing reflected gwyneth's 15 billion takeover price and had the same 15 million price from an l.a.-based health care expert. non-capital, 4.7 million shares, he'll become the company's largest shareholder and join its board and he now joins us. nice to have you, sir. >> pleased to be here. >> why did you do this deal? >> well, i think, you know, the "l.a. times" and the chicago tribune with national treasures for the company. the opportunity to take a publication system to the next generation of technology and innovation and bring it into a content delivery into the modern age is a really exciting opportunity for us. >> do you understand exactly what the strategy of tribune's chairman michael farrow is and
in an interview with me a couple of years ago, the power of artificial intelligence and taking some of the data they have available and making it a much more valuable experience for advertisers and plenty who say 15 bucs, come often i want to take that all day long and i don't care what his strategy is. i want the money. why do you disagree? >> well, i think the opportunity to take a platform is that, you know, there's two ways of looking at the "tribune." one is to think about it as a public trust for the community and it holds the glue of the community together, but if you take that opportunity now and truly do bring in the concept of artificial intelligence so my background as you may know is actually building artificial intelligence and trying to understand the human genome. we build toons that you call machine vision that enable us through our studio really the integration of data and bring
together the editors and reporters and creating complete news network so the opportunity to do that is real and i -- and i participated in discussions with him about that vision and i -- and i do agree. this is the opportunity to actually transform this newspaper world into this next generation for the next millennium or who wants to see the information on any device, any time, all the time. >> right. but you mention a public trust, of course, but this is a public company. you are now the second largest investor in that company and typically investors want to actually see returns. i would expect that you're amongst them. that this is simply not something to maintain as you call to the public trust. >> no, i think we can increase shareholder value by actually taking something that's been built over the last decades and years of reporters and editors who can vet and create a -- a portal for both not only interesting news but empowerment
and information and enjoyment in entertainment in a new fashion using machine learning and artificial intelligence. not some hypothetical, this idea of artificial learning and machine learning and artificial intelligence and i think the idea of actually integrating technology and taking it from a publication to a content and delivery vehicle with this amazing footprint and make it an even national system is real so i think there will really be the shareholder value inside the "tribune" that could be developed. >> right. but the dust bin of history is filled with companies in old media who have tried to transform themselves for a digital marketplace. i mean, i cannot really think of any, though there are plenty still trying who have succeeded. why is tribune going to be any different? >> well, you know, between chicago, l.a., baltimore, the -- the whole concept of creating a national footprint and taking on
a whole new model where you integrate through fiber infrastructure and through cloud computing and you centralize a -- a news network but actually take local news and bring it in on a daily realtime basis. i don't think that's really been tried at the newspaper level across this nation. >> right. >> and yes, it is an exciting experiment and i think the board has the vision to move that forward. >> and you are going to be a part of that board, and to those who say you would simply love to buy the "l.a. times," is that true? >> we've got a bigger footprint. clearly i'm an l.a. resident and also have chicago footprints in my mind. it's a bigger footprint now across the entire nation. >> sir, appreciate you joining us. thank you. >> my pleasure. >> back to you, melissa. we're coming up on 1:30 p.m. at wall street. stocks holding near session highs and for the s&p 500 this is the best two-day session since march 11th or so. take a look at the games across
the board. dow up by 1.2% and s&p 500 marking a 1% gain and those are the two outperforming sectors and there's distinctively a risk on feeling in that market israel i. financials though are leading the way in the mid-cap stocks doing quite well. 1.6% the gain there. information technologies as we mentioned, the real winner here up by 2%. brian. >> let's stay on that theme of i.t., cowan and company coming out with their public cloud industry report today and they have big calls in the top ranked stocks in this space. greg moskowitz senior research analyst joining us now. really fascinating. you guys surveyed 314 customers of the so-called public cloud space. you came out of this very, very bullish on amazon and how come? >> sure, brian, so both the data for amazon or a.w.s. were very positive and amazon is covered
by my colleague and covers all the internet names whereas i cover the software names and what we're seeing at least today is a consolidation or concentration of power, if you will, among those two providers. we're very mindful of watching google with their gcp or google cloud platform. in our view they have the potential to become a significant third player in this market but at least as it stands today again we're seeing effectively a concentration of power among those two. >> right now is it fair to say that google for all points has been left behind in this market? >> they were certainly slower to market than aws first and foremost as was i zur and now we're trying to make up for lost time. what we've seen on the azure side. we did upgrade microsoft to an outperform today and what's interesting from an azure perfective is even though again aws clearly has a lead,
phenomenal service it will get bigger and bigger as time marches on and from an azure perspective we're seeing increasing strength within tier one or two workloads and think about database and security and e-mail and disaster and recovery and what's interesting there as those workloads which are higher capacity and higher capacity equals more expenses, as those inclosingly go to the public cloud we think microsoft positioned this extremely well. >> we think about google maybe with the consumer platforms, right, the g-mails of the world and the google drives and amazon through aws, amazon web services, you upgraded microsoft today. you obviously like their story. where does microsoft fall in the cloud space? where is their sweet spot? >> sure. so we really think their sweet spot if you look at where microsoft is having success today, it really lies more with enterprises and frankly that makes sense where you have a lot of companies that are more or less heavy microsoft environments and that's a function of having been so over
the course of, you know, now a couple of decades or more in most cases, and so for them to have a natural extension in those environments and take that to the public cloud that's resonating extremely well with companies. conversely, you know, aws does have extremely strong flooding in smbs mid-market and also do have a lot of large enterprises as well but on a proportionate basis we're seeing a little more traction for microsoft within the enterprise. >> greg moskowitz, cowan and company, bullish on amazon, a little less so on google. thanks for joining us. >> thank you. so we take a lot about so-called safety investments on this network, and this summer a great safety play may be a good bug spray. a new report on the best repellant to keep you safe from zika. we'll bring you the details and the we'll test a few of these things out. we do it all here on "power lunch" and we're back after this.
against him. the 78-year-old comedian faces up to ten year in prison if convicted of sexually assaulting andrea constand who says she was drugged before the encounter. cosby is due back for arraignment on july 20th. house speaker paul ryan calling out veterans affairs secretary bob mcdonald for his comments monday in which he downplayed wait times at v.a. hospitals. >> yesterday when the v.a. secretary compared the lines at his agency to lines at an amusement park, we were dumbfounded. this is not make believe. this is not disneyland or wonderland for that matter. veterans have died waiting in line for their care. >> canadian prime minister justin trudeau arriving in tokyo ahead of the g7 meetings which begin tomorrow. he and his wife sophie visiting a popular shinto shrine where they took part in a purification ritual and watched a shinto performan
performance. an increasing number of americans are kicking the smoking habit. a new report from the cdc show smoking rates fell to a record low of 15% in 2015 and that is down 27% from 2009 and 64% from 1956 when the survey was first started. let's go over to dom chu with a market flash. hey, dom. >> sue, we're watching scarce of a semiconductor caf called xilinx, up 3% off of their highs so far this season. now the reason why the stock is up is on as of yet unconfirmed reports that the company may have been or solicited a takeover proposition. this is according to street insiders citing sources with knowledge of the matter. but, again, as of right now the traders are exercising at least a bit of skepticism for this right now and something we want to call to your attention as we
watch some of the stocks on the move this afternoon. now that's -- on the stock side of things. a check of what's happening with the bonds with rick santelli. >>y with a blow out to your note auction considering that it's been down in price and unin yield since the minute. they have backed up just a bit. look at fire under the curve in 30 years, same dynamic and though we're back to unchanged to 90 basis points and the curve is steepening a bit. now if we open the chart up to march 15th, the lightest time the two-year settle at these yields. fed meeting and the last charts, a two-day of the dollar index it didn't react much to the auction but you could clearly see it's on a run. today's high is a by the higher than yesterday's high. tyler, back for you. >> mr. santelli, thank you very much. what's a better bet, europe and
equities there, kevin ollie still with us on set? he has your view. investment central artery gist at bessemer trust and he also joins us. joe, i want to start with you and unpack your view of equities globally a little bit. you say you have reduced and you're overweight in equities to a neutral weight globally. tell me exactly what that means. does that mean is your target 60% globally you're right at 60% now or what? >> that's actually exactly what it means and it didn't so much that we don't believe will do well. as a matter of fact, we think it will end the year higher but it will be a little bit choppier. where were in the business cycle and considering all the risks around the world we just have to expect volatility is going to pick up in the months and quarters ahead and pardon of what we're doing is de-risking the portfolio so we can be best prepared for when that downturn comes. >> you say you currently have an overweight within your overall
equity holding portfolios to u.s. stocks as opposed to europe. why? >> i think if you look around the world and europe is one area where there are some opportunities. there's a story there of operational leverage to be had, but as i look at the united states and compare the fundamentals here in the u.s. compared to the rest of the world, you know, we appear to be in a much stronger place. the central bank here in the u.s. is prepared to raise interest rates yet again, possibly as early as this summer whereas you have other central banks pushing on that string. that speaks to the underlying fundamentals and what's happening with the economy and furthermore if you just take a look at what happens regionally when the global markets and the global economy enter a recession you tend to see a little bit more stability out of the united states. >> kevin, you have been a believer in europe u.s. stocks are doing well and european stocks did better. what's the argument? >> the argument is this. i'm a bick believer in what was just spoken about the domestic
economy, but you take european companies, nestle, everybody has heard about that brand and most people if you asked outside and ask them about it think it's an american company. 88% of sales are outside of switzerland. actually swiss so if you like a strong domestic market you like nestle because you can buy it for 20% cheaper than a company. >> comparable food company. >> exactly. >> so my argument is europe is a value yield play servicing our own domestic market. >> glaxosmithkline, not an american company. it's a european company. why don't you own it? i don't know. it's a great company to own. dividend yields are 40% higher and pes 20% less and servicing on domestic markets. would i have said ten years ago you don't need to leave stateside because 40% of sales in the s&p are international and these companies that we're talking about have the wind at their back because their curbsy is much less than the u.s. dollar and if we sell here they have a huge cost advantage. >> address a couple of things very quickly that joe just mentioned. one is the idea that europe is
farther behind in terms of recovery and doing more sort of pushing in terms of monetary still plus, number one. what does that imply and number two the brexit question of whether britain will stay in the european union? >> well, he's 100% right and he's right. liquidity provided during our period of recovery and the fed pouring money from the helicopters occurring now in europe. that's what the central bank there is doing which is always good for corporate earnings but, you know, the issue around britain leaving, not just, that the terrorism attacks all over europe. they have compressed and really knocked the stuffing out of these stocks. the pes in europe, the price earnings ratio as a result of this enhanced risk and there is ring. let me ask you something. a child that's eating a nestle product the day after britain leaves, you think a three-month-old gives a damn if england is leaving. >> they are going to like the food. >> and that's why i love 3-year-olds because people are buying a lot of nestle products for them.
>> and i'm going to use my espresso machine. thank you very much. >> ketch ollie, thanks to you as well. still ahead, you're going to hear from goldman sachs' top commodities person plus the companies that are making big money in the fight against zika. some brands of insecretary repellant i've never heard of but you should. power is back in two. & in a world held back by compromise, businesses need the agility to do one thing & another. only at&t has the network, people, and partners to help companies be... local & global. open & secure. because no one knows & like at&t.
♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ are you tired of the exhausting eight-hour work days and 60-hour weeks, move to sweden. some companies are moving towards a six-hour work day. the goal to cut sick time and boost productivity. is this a great move or just a socialist dream? annie perrin is a lifestyle coach for companies like google and facebook where she helps achieve better work/life balance and ketch o'leary has no doubt
strong feelings on this. what do you think of this six-hour workweek? >> we don't think about measuring work that much in terms of hours. that's only one-half. equation. the other half is the energy that you bring to those six hours of work. >> so they would say, okay, instead of an eight-hour work day, if you really work really hard for the six hours you'll be a better employee than the schlub who is surfing amazon and facebook, how do you guarantee, i'll work all six hours really hard, i promise. you can't promise that. >> we can't, but what the evidence suggests overwhelmingly is that the more organizations invest in their people the more the people will invest back into the organization. >> i think that's interesting but we're talking about the hours worked. works at six bet are than eight and why not go to four or two or how about you don't have to work at all and it gets really good. my argument is why the swedish metrix are interesting has
nothing to do with work hours, pay less corporate taxes and higher personal taxes which means the corporations are far more productive. keep more money and reinvest in people and equipment. they are better. our corporate taxes are too high. it's actually a corporate tax story, not a workweek story. i don't want to hijack this whole thing but swedes get it right. people don't move. companies do. much more better productive companies. you have to admit if it was zero working hours. >> the optimization point depending on who we're talking about, but the pulse of high performance, what really drives it is a balance between intense effort and deep renewal. >> okay. i was thinking about this story today. how about this, i'm going to tell you an idea, kevin o'leary. you've never heard that before.
>> don't quit your day job before you start. >> how about this. would you agree to go a six-hour workday if at the same time your company said we're going to block all non-essential websites from your computer at work. do you think most people would make that trade, annie? absolutely i do, yes. >> and when they go to get on facebook and it's blocked they might revolt. >> i doubt it actually because they will have more time at home for facebook. >> i think that's a very interesting premise. it will never happen? >> why not? >> because i don't think you can actually mandate that successfully. people bring their own devices in. they are addicted to social media. they don't care what they think. take your six-hour deal and still spending 90 minutes. >> take this six-hour job and shove it. >> and then all of a sudden you're firing employees. i don't think we should actually put these metrics into the market, just like minimum wage i don't believe in that. let the market set these metrics and give the best environment you can as a government, low corporate taxes and lots and lots of productivity enhanced
because the company keeps the money. our tax rate should be 15% here for corporate taxes, compete with eastern european companies, the swiss companies and swedish companies. >> esstonia, baby. >> they are socialists and they are smarter than we are. >> i'll ask the audience. vote on twitter or whatever with melissa, myself, tyler, kevin. would you go to a six-hour day if your company also blocked public access? i would like to know. >> thank you. >> thank you. a huge shake-up at the tsa and the government trying to solve the problems of long lines and angry passengers at the airports. plus, more with this guy, mr. wonderful, kevin o'leary. back in two. kevin. you pay your car insurance
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welcome back to "power lunch." nice rally on our hands and no surprise a bunch of new sticks hitting all-time highs in today's rally. a couple of themes, technology, specifically the semiconductors. nvidia making a new high of 2.3%, citi financial booking nice gains. xilam caught my interest because i wasn't sure what this was. a water company that's up 2 1s% year to date. making new highs day after day
there is a major shake-up at the tsa that has the u.s. head of secretary ousted from his position. this according to an internal tsa memo. will this help things change internally, or is it just another wasted effort by the tsa? let's talk a little bit about that with kevin o'leary? is their problem fundamentally management or people or how they are deployed? >> it's management. think about this fact. you have all the logistics you need. you know the flights and loads and when the people will be arriving at the airports. you know how many lines there are. it's a giant algorithm logistics problem. if you can't fix it you find someone who can. it's that easy. and the fact that they have had this problem particularly in chicago. i don't fly there anymore. you can't fly commercially and do business.
>> the man sittings next to you is smiling. job najarian who flies out of chicago a lot. it's a mess. >> can't do business out of chicago. wiped out. it's un-american what's happening there. you can't make your flight or do business. you have to find logistics expert and it's okay to wax somebody until you find the right guy. >> breaking news right now with steve liesman. steve? >> thanks, tyler, minutes of the fed eats april discount rate meetings are out right now and show four fed banks asked to discount the rate in april from 1% to 1.25%, up from 2 in prior minutes that we had. the new edition, san francisco and cleveland joined richmond and kansas city, just a word. these are the -- these are the bank's board of directors that make this request, but it comes at the urging. president usually or they don't go against the president so this is indicating that perhaps san francisco, john williams of san
francisco more interested in a rate hike here. they cited improved jobs and improved inflation outlook. at the end of the board of governors left this unchanged in april which we knew but talking about the improved economy. got the strong housing number and i want to update you on the second quarter tracking number. it's unchanged at 2.5% which wouldn't be news and you can see that the rebound story remains intact as new data comes in and what we see here is the economists were essentially expecting good new home sale numbers and they got it. there's the q1 tracking at 1% and the range is to 2 it.8%. who is aware of the favorite out there. bank of tokyo at 2.8 goldman sachs and followed by atlanta fed at 2.2% and morgan stanley at the bottom towards 2% so this idea of hiking rates and better economic data going together, tyler. >> consistent with what
mr. williams in san francisco and miss mester in cleveland has been saying. >> but we didn't know that their boards have supported the idea of raising the discount rate which is the emergency rate window for the fed. >> high probability in july and not so much in june at this point. >> they are not buying june. i think that's the brexit vote and other things, but, look, everybody's attitude will change and najarian was asking me earlier what's my money? doesn't matter because it's going to change on july 3rd. show me the jobs number and i'll show you what the fed is going to do. >> june 3rd. if it's a -- correcting me, thanks very much, that's fine. but issue being if it's in that 160, 150 to 200 range, i think that's a go-ahead and i think the idea is people have to lower that threshold for what a hike requires from the jobs report. >> all right, steve. thank you very much. appreciate it. >> steve liesman. >> as we mentioned stocks are in rally mode this hour and the dow is up triple-digit.
three major averages up more than 1%. tech, financials, consumer discretionary all leading at the hour. ben willis is here on set and jon najarian contributor of "fast money"'s "halftime" report. good to have you with us. >> great to be here. >> ben, do you buy the rall? what's changed aside from the housing data? >> this rally started in europe basically on the idea of short covering. this tape tells me short covering. no sellers visible throughout the day or picking their spots, so to speak and the volume is extremely light for this kind of move so while there may be -- and i think there really is a rotation finally going on the equity markets to new leadership. as you mentioned, the semis inside the tech sector. that i think is what's driving this market and i remain bullish and in the bigger picture we may still have run into some resistance back to the all-time highs that were head there had, that sideways move, but i just
think that the tape is telling us that it's time to cover your shorts because we're going to go higher. >> dr. j, does it matter if the rally starts off with short covering in terms of the rotation that we're seeing? >> no, it doesn't, right? >> and as traders always say and i'm sure ben agrees whether you're long or short, if the market is always right, so if you're on the wrong side of it it hurts, doesn't matter if they say, oh, it's a fake rally or it's a fake selloff. always real if you've got money on the table. >> real money, so i would say that, melissa what we've seen is with apple, with facebook, with amazon, we've seen a number of these tech stocks really outperforming over the past call it ten days, the buffet bottom and apple and so forth and now you look at a move like netflix today, a $4 pop to the upside pushing to 98 and maybe even threatening to go to 100 again. that's a big move, a really big move. some of these to ben's point could very well be a short covering. that would be a great candidate for it because a lot of people got in late on that short trade.
>> right. >> perhaps in apple as well with carl icahn talking about that just less than a month ago. >> ben, what's the next resistance level you're watching on the s&p? >> well, i think that i tend to go 2100 is going to be the next bandwidth that we'll need to penetrate to really get through for confirmation of this move. again, long term, i'm still bullish. i don't think this market has any real risk to the downside. we saw markets sell off on the fed becoming hawkish and it was a 1% move. i mean, these are not significant drawdowns where people are looking for 5% and 10% and i learned this game and love to be shortstop i do not want to be short this market. >> guys, leave it there. ben and dr. ja, thank you. >> thank you. >> natural gas will boom and oil is likely to stay flat and gold may be a terrible investment idea right now. three calls from goldman sachs as head jeff curry is here for a
"power lunch" exclusive. we're going to speak oil with you in a second and i want to focus on natural gas because when i look at your target prices and look at the difference between that and the current price you see 3 buck natural gas which is about 40% upside from here. why so bullish on nat gas? >> let's be careful. the forward market has priced a lot of that bullishness in and, yes, right now we have a problem. we actually have too much gas and inventory and we've seen no weather. it's actually one of the rainiest time periods in washington since 1885. >> driving everybody insane, by the way. no summer load. creates a lot of weakness in the near term and backdrop supply is coming off because of the decline in drilling and low oil prices and the key is you'll have a short market most likely if you can get some demand this winter and prices have to go back up to the level to incentivize gas drilling rigs be brought back online and production grown and inventories brought back up again. >> makes perfectly good sense.
however, the only thing i would say as you just noted natural gas is a by-product of drilling. when i look at your oil forecast of 50, let's call it basically flat, up a couple percent from where we are right now. if goes is going to go up why wouldn't oil go up a little more because they are tied at the drill bit. we think you'll go after a hainesville. >> for viewers not familiar with the certain plays around america, where is the hainesville sthal? >> in the texas area and in terms of the eagleford, a mix of oil and gas. the hainesville is a pure gas play so when you think about prices rising up to the economics of the hainesville you're just going to get gags without getting oil and that's how we think about that difference between oil and gas. >> okay. when i look at oil and we look at all the things that have gone on, right? you've got obviously nigeria, rebels attacking and stuff and canadian wiles fires and libya can't get out of the way.
why aren't we above 48 bucks? >> that's a very good question because we look at the market and the size of the disruptions historically you have $10. why not? a lot of inventory sitting in storage around the world. >> enough to xep said for all the production rows? >> a billion worth of investment and rally is putting downward pressure on oil. oil is trying to go higher and fighting against that backdrop of a strongest dollar and the time spreads have increased a lot over this time-year-old which is an indication that the market is trying to price this near term final own though the price level is not. >> this may be in the weeds but some say you've got to focus on china because there's a price
war going on there. the iranians are desperate to get into the chinese market and the are willing to undercut. what are we hearing about global priced and the race for market share? >> that's the key for the outlook in 2007 and beyond. i think we'll agree we get a drop in envy try and that's the consense yigt now so the question is what barrel of oil is going to replace the energy on some. margin. a big-risk player such as iran and hawk, and we believe the low-players are continuing from and the i like the idea of the revenge of the low-cost player in 2017. may be the name of a documentary. metals, you see 4,200 bucks a
metric ton. you see a 9% drop in silver. why seoul negative, gold, slightly remember than it was now? why so gold? >> let's go with gold aside and think about the low cost players, like the peruvians, we have a dig plug coming on line and it's the same kind of idea in oil but the demand picture is much weaker which is why there's more downside risk for metals. up of our main views is basically to be long against a short, long in energy against a short in metals and the idea here is that the demand picture particularly identity of china what we call cap "x" economies, economies you build commodities with, is not that positive going forward. anything we've learn the last several weeks is the half life of stimulus in china is getting
shortered and shorter and shorter so you can combined a weak demand outlook. it grates a pretty barrick question. i'm hosting me cha esaw. sounds like am good shape would be lock annette gas and at the same time shorting a copper. fair to say. >> absolutely. >> a. it it, buddy. here's what's on the hour for the breast of the someday. nasdaq trading above its april average. we'll be trading the qqq on trading nation coming up. plus, the future. of -- leavur phone at home. >> this guy implanted a payment check ghoo his hands we'll tell you what the best bug spray is
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welcome back to "power lunch." i'm melissa lee. stocks holding strong as we lead into the final few hours of the trading day. take a look at the gains that we're still enjoying here. dow jones industrial average up by 1.2%. s&p 500 really being powered higher today by technology. that's up by 1.3% and, of course, the tech-heavy nasdaq composite is up by almost 2%. we should note that the nasdaq
and russell 2,000 are trading above the 200-day moving average for the first time since april 28th and check out the big movers, actually to the downside. cf industries down and best buy is down by 6.25 and newm mo n mining along with the other gold miners down by 5% and anthem down by 3% today. ty? >> this may be the future of payments. listen to this story. a senior tech reporter from buzzfeed pitched his cash, his credit cards and his wallet for a month. instheead he implanted a chip i his hand. jon fortt speaking to him about the experience earlier on "squawk alley." >> pretty invisible to most people and can you see it right there. i mean, i don't notice it anymore. more like a party trick or something i can talk about and i wanted to much myself and find
what's the further problem expend and i found a guy who was chipping over in we'dien and he did it. how often do you get americanly rejected, your payments in your hand? >> you get rejected everywhere. >> so us your hands, kevin. >> i don't have anything injected. it occurs to me why didn't he explore another or physical perhaps to put this and he could simply sit on the payment reader an -- and then it would be -- >> while waving your bottom to the terminal might be hard. >> waving your what? >> bottom. >> he needs surgery every time there's an update. >> or maybe he electric accuse him self in the shower. >> how long does the battery last? >> exactly. >> and by the way, who put it in? could you go to an actual doctor? >> a tattoo guy? >> is this a new industry which
is "shark tankian" and now tattoo parlors but insertion device. >> look at the thing in his ears. >> forget it. >> implantation parlor. >> he's missed an opportunity. >> can we go back to the video. what is that called, a disc or causer, was that called. >> there's an art to and if you'ring in tattooing. >> you would like good blmpt. par of the story. >> i'm more interested in that guy's ear. >> that's the ancient. >> i'm into the stuff because i'm a liberal guy, yeah, exactly. >> pushing the boundaries here. >> how is that rose tattoo going to look when you're 80? this tattoo brought to you by roundup? >> do you know which the best
all right. one of the groups doing particularly well on this particularly good day for the stock market are the semiconductors, the semiconductor index is doing well. up 2.3% and every name in that index is up though we're still down 8% from our stocks peak one year ago. >> up 6.5% since may 12th so interesting moves there. major meeting to discuss managing the zika virus threat here in the united states. meg terrell is here. meg? >> one of the things that came out of the woodrow wilson center in weeksy is they need the federal funding in order to stimulate industry and we have an example of some of the companies already working here. a big pharma company is working to adapt their dengue vaccine technology to sika and they are already looking at that. gilad known for the hepatitis contract drugs and a potential
antiviral on their vefls and testing for ebola and potentially zika so another one working in the space. a very volatile stock and one of new genetically modified and one to wipe out the specific kind and that's been a very volatile stock. quest diagnostics, a testing company, has fda approval on an emergency basis to test for zika and a new one to talk about today and the consumer company spectrum brands which makes mosquito repellants and made one that comes out among natural brands of mosquito repellants. so that's another one to watch. >> stick with us, meg. "consumer reports," as meg mentioned, releasing its findings. top performing insect repellants against zika. let's bring in the deputy editor of health and food with "consumer reports." great to have you with us. >> thank you. >> i'm sure that many people are poring over this list because when you think about repellants most people think about deet and the dangers that deet
encompasses, that's the word i'm looking for. >> death is the one that's most familiar to people and it's most effective and there are two other effective. one is called picaridin and the oil of lemon eucalyptus is a plant-deprived pound. >> and i thought it was really interesting that you guys actually in this report, you really honed in on natural products, and as you have so many pregnant women worried about zika and wanting to go more towards natural products you had interesting findings with which natural repellants work well. >> the only natural plant-based repellant that worked is one called repel lemon oil eke luptis. the other five natural things that we tested that including rosemary oil, citronella and lemon grass, they didn't keep mosquitos away for longer than an hour soy we recommend sticking with products that contain 15% to 30% death and 20%
picaridin and 30% oil of lemon eucalyptus. >> meg just spritzed me with what was this? >> the natural lemon. >> it actually smells not bad. >> that one smells not bad by way of repellants. >> this is the picaridin, number one on "consumer reports" and this came in, smells kind of not bad. i mean -- i'll spray this. not snowed to inhale it, important to note from the "consumer reports" and the cdc guidelines but it doesn't really smell that bad. >> yeah. >> how did you actually test the efficacy of these sprays? >> it's very brave people. >> really. >> they actually put their arms in cages with some disease-free mosquitos and then they in the laboratory it's blinded so nobody knows what is being used and they count the number of mosquitos that land and bite on the person's arm? >> ouch. >> find that kind of interesting and i'm not sure that this is
something "consumer reports" looks at but on a lot of these bottles they say they specifically fight west nile mosquitos and the ticks that carry lyme disease and those are things that you focused on in the report. the mosquitos that carry west nile which we have in new york city and, of course, this is a zika-focused report as well as the egypti as well. do you think the branding hasn't caught up now that zika is the threat on everybody's mind? >> i think that's exactly what it is. haven't caught up yet and in our test the '80s mosquito that you menned, we found that the three top insect repellants protected for seven or eight hours with one application. >> thanks to the poor souls who stuck their arms into the cages. "consumer reports" ranking and, of course, our thanks to meg terrelle. >> we'll have the final trades coming up next and twitter shares hitting fresh new lows. a big callout on the stock today and that and four other calls in street talk. that's straight ahead.
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secretary of state john kerry delivering opening remarks at a white house briefing in ho chi minh city and. >> this is not about china. nothing that we did here or are doing here is focused on china. it is focused on the fastest growing marketplace in the world. it's focused on a rules-based order that we have consistently, republican and democrat president alike, held at the center of our policies. >> a bipartisan group of senators is calling on congress to take action to stop sexual assaults in the military. the group headed by senator kirsten gillibrand of new york reintroducing the military justice improvement act. the italian coast guard says italian vessels have helped rescue more than 2,600 immigrants from north africa in the last 24 hours indicating that numbers are rising as the weather warms up. more than 31,000 migrants have
been reached -- have reached italy by boat this year and slightly fewer than in 2015 and check out this guy. after repeatedly lights at a video game at a florida convenience store police say he walked out to his car, grabbed a sledgehammer and played one more time before smashing the game and then he took some change before walking out. he's still on the loose. andies that the cnbc news update at this hour. back to you, tyler. >> sharon, thank you very much. >> that was a frustrated dude. >> very. >> oil market closing for the day. let's take a look at crude at 48.64. it looks like maybe we're in that sort of trading range for a while. just after 2:30 on wall street, stocks are moving back towards their session highs and let's more on today's rally from dom chu. >> tyler, 990 minutes left to go for the trading day and we are again near those session highs but not quite there just yet and
albeit on relatively low volume. that's been the talk from a lot of traders on the floor of the exchange. elsewhere in the market about what's happening in this trade and for the past few days. hasn't been a huge surge in volume but let's take a look overall at the s&p 500, up about 1.25% so far. take a look at the map overall, a lot of green on the screen here. just about, again, every stock in the s&p 500, save maybe about 40 of them or so here in the red so a broad-based rally. if you dig down into where the sectors are you can kind of see where things are moving along that line of things. every single sector, and now if you take a look at twitter, we do want it noted because it's off its worst levels today, down by 2.25% and, still, one of those stocks that hit a record low, post ipl low of twitter and some moves there and we'll put it in the context of recent momentum stocks over the next couple of years. take a look at facebooks and amazons and netflix and googles of the world. check out these stocks because if you look at those shares.
facebook up by 1.25% and in line with the market overall and only three percentage points away rather from record highs from facebook and amazon up by the same amount and netflix and disney a part of those stories and driving those shares higher, licensing and contentite else in place and google shares up by 2% again as well so some of these real momentum names are starting to care some of the stocks higher overall and, of course, brian as we talk about the momentum names it's important to note also that many so of the big parts of the market, namely tech and financials, are helping to lead the way higher and they are very important and pull a lot of weight, bri, in the overall market. >> they will. >> and i'm glad you didn't go too much further into twitter because that's one of melissa street talk names and i don't want her coming over there. >> he doesn't either. >> she'll whoop you. >> analysts calls on the stocks you need to know b.number one, general mils. goldman sachs cutting the gis to a sell from a neutral and cut their targeted dollar to $58,
that's 6% lower than the current price and they say the tide of tailwinds for the food industry have subsided in part because commodity prices bottomed out and general mills will be a lagard, their word when it comes to productivity savings and won't be bought out any time soon. >> in fact, the analyst goes so far as to say there's m & a risk and keep in mind, too, one that is overpriced and more expensive and trading out at a 222 pe compared to the 18 or so on the s&p 500. bmo upgradinupgrading and the s higher by 2 it%ch the analyst says the upgrade may be a little bit too early but the shares have underperformed significantly since 2011. that's resulted in an underowned stock trading and they have lowered costs and output in inventory which will set the stage when crop prices
eventually rebound. >> having you have we been waiting for that? $96-buck stock. basically flat money for a year and a half. next up, equity residential. eqr. bb&t capital markets upgrading from a buy to a hold partly because of recent share weakness prompted by slowdowns in the urban side of the apartment markets. weakness last quarter and people didn't like the guidance. stocks down 10% and analysts saying the valuation is more reasonable. a 74-50 target and second upgrade, by the way. janney montgomery scott last week upgraded it to a buy. >> good follow-up on the street talk. >> this is the call we were talking about about. on twitter moffatt nathanson with a sell rating on twitter titled hope is not a strategy. the analyst says twitter is not only dealing with user fatigue but advertiser fatigue growing in line with google on a revenue basis 1/35th of the size. the path forward will not get easier. more competition, instagram,
snapchat, facebook, youtube and new initiatives like monthization, that's too little too late. >> talking about these problems for a number of years and people are skeptical. i will say this. would twitter ever consider a pay model? 15 bucks a year. one of the problems are that people aren't engaged and 15 bucks a month. monetize that and you know they are for real and you've got the real. >> none. >> develop to do somethinging. >> jack dorsey's got his hands full. >> my prediction they will not end the year as a public company and finally radar over the cloud name of the day because it's a tennessee-based air freight company. the stock down 18% over the past year and rnc capital upgrading it to an outperform and the dubai town air is complete and analyst sees margin improvement ahead and thinks the industry outlook is much better and bump their target on 52 from 50 and
nearly 20% upside. >> yeah. pretty nice run over the past three months. >> companies we never talk about. >> exactly. >> and with that we wrap up "street talk" for a tuesday. >> it's a great day for most stocks, but it's a really good day for big-cap technology. nasdaq 100 serving the 2% and let us discuss with trading nation team and larry mcdonnel with lcg analytics. larry, a lot of macro backdrop problems but, but stocks are doing well today, even in the face of the fed. how come? >> well, we put a buy on apple on the 29th four or five weeks ago and what you're better off doing is sitting around and waiting for some fear and technology and then putting money to work instead of chasing rallies. >> what do you mean by waiting for fear in technology? i mean, didn't we see that in a period of underperformance in
tech shares? y. >> well, what we've seen with google and apple and amazon the last two or three years, what happens from time to time is they have a missed quarter and there's a little bit of dislocation in terms of market expectations. so many people are on the one side of the boat playing the stocks that when they miss you get the huge downdrafts, incredible buying opportunity and then because we're in this bull market three, four, five weeks later, value -- people chase value and so, therefore, you have a resurge in a lot of these names. >> you know, dennis, listen, you look at the volatility side of things okay so you can talk about the vix being too sanguine, who knows. when you look at big cap technology though do you see a general sort of lack of fear in the market right now? >> well, i mean, there's a lot of fear in apple a few weeks ago, carl icahn liquidating his position and warren buffett came in and said he basically bought it. >> i think right now you're looking at apple, intel and microsoft. there's $1 trillion of tech
assets trading out of 12 pe so when we think tech and qqs, my age remember it being real high-flier stocks and these are stocks that are a good value down here. >> are you seeing positions in the options market, dennis, for some of these large cap slower growth stocks? >> what we're seeing there is people who are missing the market so we're -- people who maybe liquidated these are coming and buying upside calls and buying upside calls is a good way to participate in minimal risk and you spent 1% to get access and the participate in the upside on these big-cap lower pe type stocks so, yeah, upside call and buying to participate and the s&p up roughly 3% and nasdaq up 5% on the year which is not unheard of, we could rally 5% from now to the end of the year, a great
option to own on the upside. >> interesting view there from the option side and from the fundamental side, larry dennis, a pleasure both. do appreciate it. >> thank you. >> folks for more trading nation, got a one-on-one with jeremy seigle that we'll tape after the show. check that out and a bunch of other ones at tradingnation.cnbc.com. >> a big alert for all of you guys. you buy etfs, why big regulations could be coming down the pike. details ahead, and as we head out let's look at all the sectors leading the way in the market and i mean all the sectors, melissa, because it is all the sectors in the green on a solid market day unless you're short and it sticks. we're back right after this. and now the latest from tradingnation.cnbc.com and a word from our sponsor. some traders believe they need to be smarter than the market to make money. the challenges that trend is reality. it represents the collective actions of all market participants and when the broad market is heading higher or
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lunch." market value overall. we're seeing gains there, slightly better than the broader market in terms of the overall rally and the nasdaq and biotech index up near its best today, up 2% higher. amgen and ce lg ene and biogen up there on the day, trading as high as 3% overall so when it comes, guys, to what's happening with the driving of the rally, a lot of people wondering what are some of the sectors or industries that are helping to lead the way higher. biotech health care and one of the sectors today, really helping to power things and we know health care is a large component of the s&p 500. >> and you own the ibb in one of your funds. >> well, years ago, we used a stock pick and we have a portfolio of private startups which is highly risky and stroke is one of the things we focus on and i've learned over the decades is the ibb tracks a large cap, a market cap wait ed index, you have to own a basket, use an etf, what i've used and
the etf and the highly illiquid private assets i've got together give me exposure to the sector. >> you made money in the private investments? >> not yet. i've not yet had. >> haven't had a hit. >> stroke research, the company i'm involved in, is still at it. almost a decade in called no-no, the idea is you get a stroke and i want this because i've got stroke in my family. >> so do i. >> if they hit you with this in your blood within five minutes you don't get the brain damage you normally get and for me i want to support that company because i may need it one day, a remarkable technology. working now in monkeys and working in dogs and hoping in people. >> had a thought on hillary, the damage she's done in. >> she hurt me, hurt me with the sector. >> she hurt you? >> really hurt the whole sector and this kind of rhetoric makes no sense, a core asset class for the entire nation. why beat it up this way? sometimes politicians make me angry. >> yeah, down 30%. >> i mean --
>> since she made her remarks in september i believe it was. >> agnostic, trump, hillary, bernie, i don't care. won't beat up a sector. it's not good business. >> much more ahead on "power lunch." there you are. we'll head into the final hour of trading here in 15 minutes. a look at all 30 dow stocks. only two of them lower. exxon mobil and boeing.
welcome back to "power lunch." i'm melissa lee. let's take a look at the cues here. just off session highs and still up by 1.9%. a couple of leaders on the qs. chinese internet stock and well as nettie's. let's check in with courtney reagan at the nasdaq. >> good afternoon to you, melissa. kind of a risk-on rally here at the nasdaq though most of the components down here are trading in the green. the nasdaq itself actually above the 200-day moving average for the first time in a couple weeks and i would say 98 of 100 as i speak right now of the nasdaq stocks in the nasdaq 100 are higher right now. microsoft contributing to the biggest upside for the nasdaq 1 is hundred, and, of course, we know that it was upgraded today by cowan saying even though microsoft shares are down 10% year to date there's a
short-term overreaction and this is something to look at here as somewhat attractive. and so as a result microsoft shares are higher followed by apple and alphabet. semiconductor stocks also higher. take a look at etfs, they are higher, individual components and xilinx one of the components and dom prout us a wrumor, report, unsubstantiated that caused xilinx to move higher on a possible takeover bid. bring it to you, though unconfirmed, shares are moving higher there and we're seeing microsemi and lam research moving higher and semiconductors having a really nice day, tracking higher for the third straight session. this would be the first time that they have had had a three-day winning streak since about mid-march so as you can see it's fairly green across the board here but there are groups that are leading the way with some understandable reasons why. melissa, back to you? >> all right. thank you very much, courtney reagan. >> i want to point out, too, we talked a lot about xilinx,
citigroup back in november said they were likely the next big takeout target in the chips. >> mice call by citi. >> fair credit, the point is xilinx is sort of semi been in play. >> semi been in play. >> you caught in play. >> you caught it, thank you. >> that didn't knock your socks off? >> that was bad. >> let's get back to dom schu. >> gold is under pressure overall as the precious metal falls to a four-week low. this is the vanea vaneck. and other all moving lower today. these will certainly be trades to watch as we begin start to jockey for position on whether there's a possible fed rate hike
in june. all of that playing in this virtuous or not virtuous circle about the dollar, effect on commodity prices and what it is again around the fed. so gold certainly a hot trade to start the year and now pulling off quite a bit over the past few weeks. >> those are significant. look at those 5% declines. look at that. >> 5% waiting and gld. i never buy the miners. why suppose yourself to what i consider idiot manager between the -- >> what's gld? >> a way to be liquid. let's say you have a brick of gold. it's a huge hassle. you own the brick in a liquid etf. >> it's a real metal. >> well, there's a big debate. >> is it the real metal? do you feel like if everybody went to cash in their glds -- >> think about this. that's why if you really want to
own gold, you own it both ways. i like to bring the bar of gold out to the kitchen table and tell the kids. >> where did you -- >> it's a lot of fun but to sell it is a massive hassle. >> exactly. i've been a notorious gold hater for years. people krit despise you. it's like i'm saving it for the zombie apocalypse. you realize it. and if you hold it and own it, you're the first guy they're going to go see. >> think about this. you're going to need beef jerky and a can of span. but i still like to have it. the point is a little cash, too, maybe you'll use cash one day. >> i'll use the chip in my -- >> do you know there's more cash, dollars outstanding than any time in u.s. history?
>> i know that. because i talk to large institutional investors and trusts as well thachlt i don't know where to put it. >> yes it's not. >> my pocket. they're now taking aim at these funds do. they need more regulation? plus snapchat's latest fund-raising and valuing the company. getting cash isn't so easy these days. kevin o'leary weighs in next. and xilinx, we talk about it next. spiking over "power lunch." you can see where it took off. d. it's how you stay connected to each other and to your customers. with centurylink you get advanced technology solutions, including an industry leading broadband network, and cloud and hosting services - all with dedicated, responsive support. with centurylink as your trusted technology partner, you're free to focus on growing your business.
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there's no way to predict that. td ameritrade. welcome back to "power lunch." check out some of the bank etf and the spider etf. two up nearly 2% on their best day in almost a week here. financials one of the best performers. wells fargo, jpmorgan, bank of america. citigroup all moving higher tore. check out pnc, bb&t, suntrust among some of the big leaders. financials, one of the best performers. ty, back over to you. >> there are two stories i wanted the talk to kevin o'leary about. one bears on ef etfs which you w a heck of a lot about. mary said she was potentially
looking at stricter or different kinds of ways to regulate etfs based on liquidities and hitches that caused many to go dark there i guess it was last fall, last late summer. >> i'm going to speak on it. they're based around indices we work with the ftse russell on. we want transparency. the issue around etf that everybody should understand is it's a wrapper, a low cost wrapper. it's the underlying stocks or bonds they're made of you should be concerned about. it's the underliar. i prepare to take it. the average market cap waiting.
i don't have problems with that. you wouldn't move it at all. it doesn't matter. . it's when they made up of very liquid underlying stocks or bonds when we have tracking error, where we have ill liquidity. and we're okay with her providing liquidity and guidance on it. >> does it not matter how much they have or the number of shares traded per day? >> that is the most misunderstood. you can have zero under management. let's stay you have an etf with only $100. it's the liquidity of the underlying securities that matters. that's all that matters. this is a huge misconception and those trading don't really care about assets under management. they care about lid equity. >> another area you look at a lot are startups, startup companies. techs having trouble raising
capital. those numbers down year over year. is there something afoot here or is it just sort of where we are in the business cycle, what's coming to market or what's out there? >> i'm a big venture investor obviously, particularly on "shark tank." think of the deals. hundreds and hundreds. so many of the eun come companies don't want to go public because they can get free access to capital, so why would they. the problem is you have to market it to value. the snapchat company, i don't know whether it's worth $2 billion or $20 billion. i don't get to find out until the company goes public one day. >> all right. kevin, thank you very much. great to be with you as always. thanks for spending two hours with us. always great. >> thank you. >> let's take a look at the markets. the industrials up more than 215 points or 1.25%. s&p higher than 1.35%.
almost a 2% gain on the session. >> and home depot is your best performer. i'm sure we'll talk more about it on "fast money." >> thank you. in the meantime "closing bell" starts right now. hi, everybody, and welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> i won't tell them. i'm bill griffeth. a bit of rally today on wall street. the dow up more than 1%. we're just off the highs with the session now. housing stocks doing well on the back of the new home sales. tech is strong. >> speaking of tech, snapchat reportedly raising money at a valuation of $22 billion and all of the drama. we'll speak with a top venture