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tv   Power Lunch  CNBC  May 25, 2016 1:00pm-3:01pm EDT

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there? netflix. >> again. >> on a terror. >> notice all of the fangs were higher today as well in this tech tape. >> they did a nice job covering. that good stuff. been good having you here. thanks for watching. going to send it to "power lunch." that show begins right now. >> and thank you, scott. it is 1:00 on wall street. stocks are shoogt higher for the second straight day to levels we haven't seen in a movement right now, take a look at. this we're a few points off the session highs in the s&p 500. 2090 is your level. we're up 152 points on the s&p 500. energy, materials leegd the gains. welcome to "power lunch," everybody. i'm melissa lee. michelle has the week off. the stocks in the midst of a two day rally, is this the beginning of a big breakdown?
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dom chu? >> as we talk about what's going on overall with the markets, talk about the idea that the investors and traders are perhaps looking at reassessing how these things, risks are setting up. a lot changed in terms of market perceptions. the risks haven't really changed. take a look at our market thermometer to see how investors and traders are gauging the level of severity that particular catalysts could have. a summer interest rate hike, yes. front and center for a lot of traders out there. so is the uk possibly leaving the european union and the u.s. election coming up this fall. the riskier aspects for the market right now, some of the ones we've seen kind of scale back a little bit. remember, last year, china was a huge part of the story. the market volatility there. trading halts, everything. china's economy is a big concern. what they're not a big part of the narrative as they were in the latter part of last year, early this year as well. oil prices, remember, we thought
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crude was going down to $20 a barrel. it is pushing $50 right now. it's still a concern but not at the forefront of the conversation. and then if you take a look at the corporate earnings picture, it's still bad but not as bad as we thought it was going to be. so perhaps more of the yellow side of things. then the market overall, you can debate this. some people will say that the u.s. economy is not going gang busters but going strong enough where the u.s. economy may be seen as a positive market factor in the scheme of -- market narrative right now. take a look at the picture that, could be one of the green lights at least for now for why things are setting up favorably for traders going forward. back to you. >> green light says dom chu. we're going to pick up that point with our senior economics reporter steve liesman. green light. what changed? >> you know, i wish we could get up the graphic that dom used. what changed is what is not at the top of the list. arab yashgs meltdown,
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armageddon, meteor, china. that is not at the red part. so we come off the boil on the fear of armageddon. that is one aspect of it, tyler. the other aspect it s. that economic data improved. let me go through some of that for you. we buy the rapid update, the most recent median forecast for tracking the forecast on the street, secretaond quarter runn. that compares to fourth quarter of 2015. that's a rebound. april retail sales, also up running about 3%. consumer did just barely 2% in the first quarter. so that's much -- considerably better. and along with better consumer spending -- >> where are the retail sales coming up? >> gas and cars were up. >> forgive me for interrupting. >> the internet stuff is up as well. the consumer spending better than he or she was. >> continue, please. >> the consumer retail sales, 3%. hourly wages up 2%.
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we've been looking to break out of the 2% doll drums for quite a while. manufacturing indices, nothing to write home about. but when we talk about coming off the boil of armageddon, we were below $50. now we're above $50 on both of those. we stabilized in one of the major weaknesses of the u.s. economy. finally, oil being $49 a barrel. it was down in the 20s when concerned about the outlook for the economy. that was both the ominous signal for demand but also there was concern about bad oil debt working throughout banking system. now they're up $49. that's come off the concern list right there. so better economic data and the worst fears. >> i couldn't come up with a better word. >> i like that. >> steve liesman, you teed up an excellent conversation that will begin. for that, we go to brian. >> before you let steve flee, i have point/comment/question. do you find it ironic or unrelated or completely related that as data has gotten better,
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it's at the same time that the price of oil has also come up? >> i think that's interesting, brian. i want to -- i find almost everything ironic. let me throw it back to you and say where is the particular irony there? >> most of the kmen tarry we heard last year and a half two years, that low gas prices, there is no down side at all for low or falling oil prices. i think it will be hypocritical to sit here and argue that you're going to see a major -- a decline in consumer spending. >> because people just drive more. >> they drive more, yeah. >> thank you. all right. a news alert right now in the bond market. five year notes are up for auction. let us get to professor
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santelli. >> here's the metrics, 34 billion five year notes found a new home a moment ago. yields at the auction, 3.195. that was the low in the high yield market. lower yield, higher price. this was definitely another good auction. let's go through the metrix, bid to cover. three times over subscribe to. this was 2.6 times oversubscribe. to the ten auction average is 2.44. 66.6 sounds ominous. that was the indirect. best since february of 16 just a couple auctions ago. directs and 11.6. best since july of 2014. dealers take 21.8%. a as in apple, two as in a row. if the seven year goes well, we'll start our own auto club, aaa. back to you. >> thank you very much.
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whether we're talking about a fed interest rate hike in june or july, why isn't there no tantrum pulling down the stock or bond market though we're higher in the dow than we were when the fed raised rates in december. the noise of earlier this year sending shock waves through many markets. so what has changed now? our chief market analyst at the lindsey group and our cnbc contributor is here. what has changed from gosh the fed can't do anything because then china will rattle. and then we'll sart of go cower in the corner wlachlt is different now? >> complete disregard for the fed. that's really what's happened. i don't know if it's a question of the fed lowsing credibility or. what but all of a sudden, the street does not believe the fed at all. in fact, what worries me is that we're setting up for the shock in june.
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watch out. that move in february may have been a warning signal. >> hold on. i want to get more into this idea, jack. i hear what you're saying. whatever. i'm not even disagreeing. everyone is entitled to their opinion, however, you can disregard the fed but you can't disregard the actual increase in interest rates. if they do it, it's like -- i can hate somebody and disregard them, but if they punch them in the face, i'm going to get hit. >> remember, if the street is not prepared for that move, chit feels like it's not, then more than likely we're going to see violent price action if and when the fed does move. it's one reason why with volatility low, this is probably a good time not to be a hero and probably put protection on in the portfolio. >> more specifically yesterday, the two year. and the two year is more pegged to what the fed is actually doing. and yet, there is great demand for that two year auction. does the fed have a credibility
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problem? >> i think they put people on notice enough to think it's a possibility. it is flat ening the yield curve. is the market saying to the fed, okay, maybe you'll do it one more time. you're not going to get away with much more than that. i think that's where the issue is. just after they raised the first time, there say belief it's one and done. now they're going to try to squeeze in a second one. i think the market thinks that's it. >> do you think the market is going to react violently if the food moves a quarter point in june? >> i don't think they're ready for it. that's the problem. look, when we hear the hawks talking two or three rate hikes before the end of the year, all of a sudden, you know, the hair on the back of my neck starts to go up. i really am worried that we are not prepared at all for. that. >> i think the market is preparing. that doesn't necessarily mean the market is not going to respond. december 1st, the s&p 500 closed to 2100. on the day the fed raised rates on december 16th, the s&p 500 is worth 2373.
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that said nothing about the 300 point decline in the s&p 500. they told you when it was going to end. the market didn't sell off until after it ended. similar thing to qe 3. just because the fed is telling us they're going to raise, i don't take comfort that the market says okay everything is fine. it's a tightening of a credit. rise in the cost of capital. and it is now a long string of tightening about it fed that i don't think the market should sob complaisant with. >> that's right. >> thanks, guys. jack and peter, appreciate it. >> long lines, short patience that, sums up what is happening in our nation's airports. it is also the name of a hearing on capitol hill. what the head of the tsa up next with the tsa is saying about the problem and one airline's solution to fix it.
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testimony on capitol hill from the head of the tsa today. the hearing was entitled long lines, short patience. at just about sums it up. >> there is unacceptable. and it is time for congress to act. administratively, the american people are angry and frustrated as we head into the busiest travel season of the year, starting this memorial day weekend and they deserve answers. >> we are providing more overtime and 768 new tsa officers. we're also converting with the help of congress in the reprogramming of our front line officers from part time to full time as necessary to increase
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immediately increase screening capacity and improve retension and morale. >> all right. we're going to get much more on the tsa. we have a news alert with dom chu. >> it involves one of the biggest energy companies inned world, common mobile n this case here, exxon shareholders have now approved a measure that could allow them something called proxy access. that is to give minority investors and shareholders in a company a voice in naming directors or nominating directors to a company's board. this is an interesting development here. this has been brought up in the past and failed a lot in the past. this time around has gone through and shareholders have made basically backed this measure there. it's also interesting here that chevron, the second biggest oil company in america approved proxy access last year. what this does do is give minority shareholders abuilt to nominate somebody who may not be as in tune or insider, part of the energy industry here.
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again, exxon and interesting move here. allowing proxy access as voted by shareholders there. we'll bring you more details. for right now, that's an interesting move in one of the biggest energy companies in the world. >> yeah, not that uncommon in corporate america. but for one of the big environment companies of the world, certainly maybe a little bit of a shock. dom chu, thank you. now let's go back to the tsa. you remember the tsa's director of security was dismissed, out offed this week after the only thing longer than a list of complaints about the tsa was the actual length of airport security lines. in an attempt to solve the problems, one airline is trying a new strat injury. phil lebeau is live in atlanta with a look at delta's quest to speed up the security line which is ironic. it is impossible to slow it down. phil? >> thank you, brian. i'm joined about it coo of dealt yachlt this is a new automated security system back here. how much will this put more people through the security system quicker?
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>> so it's first of its kind in the u.s. and day one it increased productivity 30%. but we're looking forward to double before it's overwith. >> 30%. i'm going to ask you to step aside as we zoom in and explain to people. what is the biggest difference we notice with this system? >> the current system, basically, everything happens in series. if somebody is slow to pull their cell phone out, then everybody behind is backed up. same thing if their bag needs searching, the whole system shuts down. in this innovation system, everything happens in parallel. >> so there are five stations there. >> you see five different people basically going through, taking everything out of their pacof t, et cetera. if the bag does alarm, everything continues to flow. >> so if there is a slow poke, you go around them in layman's terms? >> that's a better way to say it. >> i have to ask you, what is the holdup in security lines
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now? bags or people? >> the biggest constraint is the x-ray screening of the bag. >> so that is slowing douvenlt because we have more people doing it, i'll you have come on in here one more time. there is a hearing today on capitol hill. and you know the head of the tsa was grilled by a number of people in congress. you have a representative from louisiana. he basically suggested you guys, not just delta, but all airlines are to blame because the baggage fees you're charge having more people bringing on more bags, bigger bags, and that's the problem. >> well, i mean, my first comment is the industry had bag fees for almost a decade. nothing's changed in that regard. so the lines that we're experiencing this year are not driven by increases in bags or bag fees. but we're all committed about the solutions. so he's been a good partner to drive in that reaction. we continue to take. >> gill west, the coo of delta on the day when they debut the automated security line in
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atlanta. back to you. >> all right. phil, thank you very much. >> all right. up next, major recall for america's best-selling vehicle. if you own an f-150 pickup, you'll need to listen up.
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they ask our next ges if they have what takes to be the nest big thing. >> i'm hor say bohrquez, i have a phd in energy engineers from mit and my co-founder is a professor at harvard medical school. he look inside your muscles and measures muscle quality and fat percentage. we licensed that from harvard and mit and built the world's first personalized smart fsness trainer. you measure the muscles and the app analyzes the data and gives you exercise and nutrition plans that are catered to unique physiology. you get fit faster. elite athletes always have access to owe fis indicated equipment that get tailored guidance. we're bringing that to consumer for only $99. in a market filled with heart rate monitors, we built the first system that looks inside your body and gives you actionable advice.
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and we're expanding on that platform with products rooted in science that help improve your health and fitness. >> welcome to today's power pitch. you just saw jose's pitch. now let's meet the panel. joining us on set is a board member of the new york angels. she invests in 40 startups from the bay area, david wu, he is a general partner at maveron. he has $1 billion under management. he has more than 30 startups in the personal portfolio. and from seattle, natt burgess with corum group. they have deals with google, microsoft, and intel. jose is in the hot seat. kick it off. >> i thought that was a good overview. i like how you talk about pricing and team backgrounds. i would have liked to hear some numbers around sales metrics and how you're reaching customers. i'll give you a b. on the market front, aside from athletes and body builders, is this just a novelty or do you think it has mass market appeal?
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>> there is more than 75 million people just in the u.s. who exercise at least three times a week. so we're paelg to them by telling them we can measure the entire physiology. we can give you targeted advice through a personalized smart fitness trainer and help you get the results you're looking for. >> david? >> i really like you gave a good back story on the team and the product. but i also would like to hear more how this goes from being a niche product to being a big, important company. so i'll give the pitch a b. do you think over time this company becomes more about a suite of hardware deviceors do you see more the company becoming about attach subscription services and personalized coaching? >> we think primarily it will be the latter. so we see this as a platform where it's really the only technology that looks inside your body and sees the progress you're making. you can count how many steps you're taking, that's great. but ultimately, you want to know if you're getting results. >> the purpose of the pitch is to get them eating.
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you showed me an advice that is giving me data i never had access before. that is cool. i'm intrigued. you get the meeting. the pitch gets an a. but does it work? this magnetic technology that you're using it s. notoriously variable depending on hydration and other dynamics with the body. how accurate are your readings? >> yes. so this is actually different from what you've seen in the market before. it's the first product of its kind. this was invented by my co-found better 15 years ago out of harvard medical school. initially for looking at muscle dmn patients when there are muscular disorders. we took that lab based technology and brought it to the consumer world to help people improve their health and fitness. >> i'm willing to be the guinea pig, jose. so let's put this device to the test. >> put water on the sensors. there we go. >> just put that right. there. >> what are the results? i need to know. >> so it's about 44 -- you know,
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the muscle quality scale is between 1 and 100. >> i read through a number of reviews on amazon and a lot of people were explaining about the quality of the product. what do you say to potential customers who see those reviews and are a little reluctant to buy? >> the first product with the aim is always your hardest. everyone tells you the hardware is hard. and what you have to do is learn and fix the problem. we did. that we had issues with the battery life, for example. the battery life on the cliz will. and even on the new version is much, much better. >> okay. so we heard what jose had say. is the panel in or out? what do you say? >> so listen, i really lot of idea behind this product. there is definitely consumer demand. there i love the team backgrounds, too. but execution is everything in business. and i am a bit dismayed to read some of the negative reviews around the quality online. i think they can overcome this with a future it ragss. but for now, unfortunate lishgs i'm out. >> david? >> i think it's a really cool
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set of technology. i think it definitely will appeal to the body building and kind of card core workout community. sta at the same time, i think the ability to transform this company into more of a services company and a kind of personalized training company might require different skills that you have right now and will be harder than you think. so as much as i like it, i'm going to be out. >> and nat? >> i think there is a mass market opportunity here. people can't just rely on a bathroom scale and the mirror to figure out how they're doing healthwise. people are getting more sophisticated about. that in spite of the early challenges, the 27% one star ratings on am zorngs i'm going to give you the benefitst doubt, i'm in. >> to so two out anz one in. what is your reaction? >> thanks for the positive feedba feedback. >> i know i'm working on my forearm, jose. thank you and to our panelists. and that is today's "power pitch." >> okay. you heard what the panel had to
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say. now time to find out if you're in or out. follow the conversation on twitter using the #powerpitch. coming up next, paying dividends. why now could be the best time to double done on dividend paying stocks. but first, final gold trades are crossing for the day with gold on pace to log the sixth straight losing session. the metals close up is next when "power lunch" returns. andrea sikon. medical doctor from cleveland clinic, watson, let's review the electronic medical record of the next patient.. no problem. it's a pretty huge file. done. sorry for the wait. that was quick. as part of our research, i also compared lab results with notes about prior treatments, then cross referenced it with thousands of medical journals. and i get the benefit of much more data, and a lot more time to plan the best treatments. i stay focused 24/7 and never sleep. you sound like a lot of medical students i know. i stay focused 24/7 and never sleep. quite like the human foot. introducing the 241 horsepower lexus is 200 turbo.
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i'm sharon epperson. here is your cnbc news update. president obama holding a joint news conference with japanese prime minister shizo abe. he discussed the upcoming visit to hero sheema. >> our visit to hiroshima will honor those who were lost in world wore ii and reaffirm our shared vision of a world without nuclear weapons as well as highlight the extraordinary alliance that we have been able to forge over these many decades. >> a state department audit faulted hillary clinton and previous secretaries of state for poorly managing e-mail and
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other computer information. and slowly responding to the new cybersecurity risks. a clinton spokesman responded saying the report shows her e-mail practices were the same as her predecessors. google self driving car project will launch a senter in suburban detroit. they'll start fitting the company's driving systems into chrysler minivans. check out this huge sink hole that opened in florence, italy. no one was injured but there was a lot of damage. around 20 cars parked in the area were swallowed up by the sink hole. that's the cnbc news update at this hour. back to you. >> all right. thank you, sharon. final gold trades are crossing for the day. we're closing out the session. $1223.80 an ounce. not a surprise given the gains we're seeing on the equity side of the equation. take a look at the rest of the metals complex. we see a notable pop in copper. but check out platinum. that's where the action is, not just a 1% decline.
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there is a five week low for this metal. now let's check in on the bond market. rick santelli is tracking the action. >> after that second stellar auction of five year notes, there is what the chart looks like. you can see there is a little volatility there on the right side of the chart. but look at the long end. look at the 30 years. a big response. as a matter of fact, it's kind of a barbell day. two year yields are up, 30 year yields are up. everything in the middle is unchanged. when is the last time that five year note yields were hovering on a 1.40 basis in terms of a close? this could be the highest yield close going back to the 22nd of march. and if the fed in part is motivating this big lust for securities, maybe it's because they don't believe investors that the fed is going to tighten. i'm not sure that's good a reason as any. that would affect the dollar index. wouldn't it? let's look at it. intraday dollar index is dipping a bit. not a big day. not including today, the last five closes, four of them had been higher so it's something to pay attention.
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to tyler, back to you. >> thank you very much. stocks moving back towards session highs. rallying in a major way for a second straight day. oil closing in on $50 a barrel. something we've not seen since last october. so is risk back on and what changed for the market? it's kind of a reoccurring theme this hour on power. jason pride director of investment strategy and barry james is brez of james investment research. daddy, why is the stock market going up? >> sorey. sorry. there are a couple things going on at the same time. first oil. oil prices are up. and as we've seen lately, even though theoretically they should lower prices should help the economy that, passion through earnings season and what's happening with oil companies and the oil markets and even high yield markets has been one of the primary concerns. it's what we saw earlier this year. so we're recovering because that pressure is being removed.
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number two spem are realizing this economic expansion is still intact. it has not dropped off the cliff. having entered the almost eighth year now. that question kind of keeps bubbling up every once in a while. and number three, perhaps most importantly, earnings revisions for the underlying companies of the s&p 500 on the whole have actually drifted back into positive territory. having been in negative territory for four to five months. those things pieced together pushed this market higher. at the same time, we're still an advocate of this idea that we are in the later stages of an economic expansion that growth is going to be a little harder to come by. we are going to see more volatility. the markets will have an upper trajectory. >> barry, let me bring you in here. what should i do now with my money? should i buy with two fists? should i nibble? or should i just stick with what i got? >> well, it's a very difficult question to answer. market is a little bit like a
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sail boat right now. you can't make the wind blow from a sail boat. we're in this up and down type of market. over half the stocks that we follow are down 20% or more from the recent highs. you've got the sectors all in the jumble. half rup and half are down in the last year and last quarter. so it's made it a very difficult place to try to pick, you know, winners. we're seeing the market all upside down. we're seeing those that had done worse and been doing best. >> you like a couple of minors on your buy list. you have a couple mining companies or mining related companies. >> that's exactly right. so what we would say is you probably want some precious metals in the portfolio in this type of environment. and so we like silver wheaton. very low cost producer. and they're diversified in terms of locations. newmont mining, they cut cost business a lot recently reduced debt as well.
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we think that situation sits pretty well. and we think the oil that we've been talking about, the rebound o nil, some of the service folks like mcdermott, very small company, very low share price, but they're very well diversified. they do the marine type of development. they have a, good good background in that area. and they're prepared to go for the long haul and they're not as impacted by short term moves. >> jason, you like health care, technology, and energy. you say that it's -- you can't really succeed by just throwing money at the sector broadly. you have to be security specific here. in energy, what does that mean? what kind of companies i do want to look at? >> i think that is interesting. one thing that has been a hallmark of our approach to this environment are the late stage of economics is taking advantage of the markets mispricing of the better companies sh the better companies that had more stable businesses and more financial solitude to them and that
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financial strength, particularly in that energy sector, when oil prices are low, if they do stay somewhat low for long period of time, there are a lot of business models that were put in place over the past few years. and there is easy pickings for the big ones that have the financial fortitude to do the buyers in that environment. so we're sticking with a lot of the majors in the energy space. there is some services that are interesting. there are some exploration companies that are interesting. but on the whole, we want to be with the ones for the financial fortitude to be sitting there and picking off the week links in the area. there is a lot gf assets that will come up for grabs for those willing to sit there and play. >> all right. jason, thank you very much. jason pride with glen meade. can you go to our website right now for another large cap pick from barry. this one pays a 4% dividend. shares of alibaba taking a hit
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as you see there. down about 5% on the session. the sec now looking into the chinese e- commerce giant's accounting practices and the key people behind the report that sparked the investigation will join us ahead. plus, a chaotic scene outside of a donald trump rally in albuquerque. what sparked the violence? that straight ahead.
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take a look at this scene. protest there's turned violent. demonstrators knocking down barriers, throwing rocks. police responding with pepper spray and smoke grenades. trump campaigning in new mexico. ahead of that state's primary on june 7th. cnbc senior contributor larry kudlow and "washington post" columnist are us with. you recently wrote a column talking about the dangers implis
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it in a trade war if it comes to that in a trump presidency. explain. >> so donald trump has said initially that we need not worry about a trade war. he will intimidate our trading partners so sufficiently that they'll just cower in terror and not retaliate. more recently he said who the hell cares about a trade war? something to that effect. my response is that everyone should care. because if you look at what economists say about what would happen if we impose the kinds of terrorists that donald trump is -- >> 35% mexico, 45% on chinese goods or vice versa. >> i think it's 45 china, 35 mexico. in any case, yes. that would probably destroy those country's economies and bring ours down with them. >> larry, is trade, which has been one of the areas where you've been critical of mr. trump, it is the main one economically that you part ways with him? and do we need to worry about a
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trade war? how bad would it be? >> look, i think katherine's basic thrust in the column is correct. but i do have some add ones to it. presidential rhetoric is presidential red richetoric. the point he's trying to make is our trading part in other words, especially china and japan, are breaking the rules. and i agree with. that they are breaking the rules. now i hate tariffs. tariffs are taxes. they damage both sides. comet suffers enormously. i believe in the united states any citizen should have the access to the best quality goods at the lowest prices anywhere in the world. the point i want to raise here is presidents have used tariffs to deal with breaking rules. reagan used them. clinton used them.
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he's not outside that mainstream. reagan used them. clinton used them, obama used them and george w. bush used them. i don't like them. and i hate loose lips about trade wars. but it's out there. and one last quick point. you and i and other economists, we're losing, katherine. the public is arguing by 20 points that trade takes away jobs. economists like us are getting killed in they lection. that's all i can say. i don't like it. you don't like it. >> whether i go to the walmart in iron mountain, michigan, i have a house near there and spend a lot of time. there talk to the people. there you say why do you shop here? i have, to it's cheap. why do you care it's cheap? >> i lost my job. my salary got cut. why did it get cut snt paper plant moved out of the country. why did that happen? they got pressured for low prices. now we're trapped in a cycle. everything the economists say is absolutely 100% true, katherine.
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an element two people sa that say, you know what? screw it. i'm not winning anyway. why not try something new and maybe even potentially dangerous. >> i'm not defending it. >> i get where they're kroming from. i get how they think about this. it is true. there are mutual gains from trade that we benefit. the losses from trade are not uniformly distributed. there are people who feel that more heavily than others. ie, people who work in manufacturing in the united states. and we have not done right by those people. we have not provided enough in terms of assistance, in terms of retraining. but, you know, economies change over time. we have change over time. we used to be a primarily agrarous economy. we transition. >> you point out in your article that comment that the shopper -- if there is a 45% tariff on chinese made goods, chinese made clothing that i can buy a $3 t-shirt at walmart that, $3 t-shirt is now going to become a
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$5 t-shirt. >> it's a sales tax. >> but it's not -- but it's still only $5. >> there is interesting work going on about this point. both liberal and conservative researchers are saying, look, there are income and job problems in certain parts of the country. and we need to do something about that. unfortunately, years and years of trade adjustment assistance and job training programs have not worked. so that's one issue we have to cope w the second issue we have to cope with is what to do about the actual negotiating? now, on this point, while i disagree with mr. trump's rhetoric from time to time, what he is saying, and it's what other presidents have done, i'm going to sit down and i'm going to throw the wto out because it doesn't work, right? i'm going to have bilateral negotiations with china, japan, and elsewhere. and i'm going to make tougher deals. and if i can't make tougher
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deals, i may have to use tariffs. i don't like to -- i've suggested something else. i believe you should sit down. if you can't make a deal, then you employ sanctions, particularly on specific companies. >> specific companies. >> which i don't like but are less harmful to the economy at large. look, we've had obama and w had 100% tariffs on steel. my guy, ronald reagan, 100%terrives on cap knees tvs, computers and what not. as a negotiating tool. one last point. i don't want to monopolize. we can change our policies. if we make america as competitive as possible and you know what i'm going to say, slash the business tax rates. slash regulations and we need a g-20 deal on currency stability. because begger thy neighbor currency wars are very bad.
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we should take that out. so there is an agenda here that we could use. that's what i'm suggesting. >> katherine? >> those aren't the tools that trump has been focusing on though. i agree with you on some of those policy points. and we have some departure of agreement on some of the others. >> never. >> never. but that's not what's dominating the conversation. i think voters hear tariffs. it's a much easier concept to understand than some of the other things you were talking about like the institutional changes, for example. >> he's got big -- he has big business tax cut. it ain't perfect. and some people are tweaking it to make it better. but it's a very prominent thing that would help our competitiveness. he's also a deregulator. i know the papers haven't come out yet. but they're coming. and maybe this is a minor point. i appeal you to. currencies, look, you can't have willy-nilly currency shifts of 15, 20, 30, 40%. and by the way, you can blame
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china for currency manipulation if you want. you can blame japan for currency manipulation if you want. but i'm going to tell you, in the last 20 years, the worst currency manipulator is the u.s. >> right here, the u.s. absolutely. >> and that's why i say as implausible it may be, we need to sit down and go back to what paul voelker argued. he said we need international currency cooperation. that's what is missing from the trade talks. and that's something i want to emphasize. >> we used a weak dollar to help our export. >> i doubt the fwoed agree with that analysis. >> yeah, but no. she's right. the fed tries to walk away from this. look, under george w. bush, my friend, didn't always get it right, the dollar fell 40% against the fed's broad basket of currencies. now the dollar has come back in recent years. but that's crazy.
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you drop 406789 you go up 40. what the hell kind of policy is that? now that damages trade. it damages comparative advantages. it damages prices. so we got a lot of work to do here. i am with katherine. i don't want a trade war. i'm clean. i don't want a trade war. i do think steps have to be taken. and we have to negotiate hard. i agree with. that. >> all right. we have to leave it. there thank you. larry, katherine, good to be with you. the auto maker that is teaming up with uber. who isn't? layoffs in the tech space, brewing controversy at a beer company. the headlines next. re at the tde trader group, they work all the time. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivatives pricing model, honey?
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td ameritrade. the e-class has 11 intelligent it recognizes pedestrianss. and alerts you. warns you about incoming cross-traffic. cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing: a crash. the 2016 e-class. lease the e350 for $499 a month at your local
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welcome back. apple has the biggest positive impact on the nasdaq 100 index. 8 1/2 points on that measure followed by microsoft and amazon. april ple is 25% from the 2015 record high and down about 5.5% year today. may, apple up 6.5%. >> the buffet bottom as some
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like to call it. thank you. here are the other headlines making news today. toyota making a ride sharing partnership with uber that gives uber drivers new leasing options through the automaker. microsoft is laying off 2,000 more employees. they'll take a $950 million charge to restructure and streamline the mobile phone business it acquired from nokia in 2014. and also today, anheuser-busch being investigated by antitrust officials over a new distribution incentives. the incentives encourage distributors to sell more of the company's brands rather than competing craft beers. still ahead, why now could be best time to buy dividend paying stocks. "power lunch" is back in two.
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i have a lifetime of experience. so i know how important that is. in an interest environment, die dividend stocks are an attractive option for many. our finance professor says the rush to dividend names may be just beginning. take a listen. >> we're in the first inning of shifting to dividend paying stocks. i think even with this interest rate, investors are becoming convinced they're not going to be able to rely on cds, their bank accounts or even bonds as a
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source of income that maybe they better turn to stocks. >> you can see we're actually skyping for that interview. interviews should -- investors should not shun dividend paying stocks. let's bring in bob landry with usaa. bob, you heard what the professor said. do you agree with him or disagree and why? >> yes tlashgs , that is music ears. company that's can show the ability and willingness to pay a growing dividend is going to resonate win vestors. >> are you going to dump dividend paying stocks if and when the fed raises rates? >> no. we're expecting the fed when they do begin to raise rates and our expectations are that it probably woept be until the end of the year at the easterly i didn't remember.
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they're going to do that at a measured pace. it's going to be gradual. therefore, i think dividend growers can certainly continue to do well in that environment. as long as the fed doesn't aggressively jack up interest rates, i think dividend paying stocks should do fine. >> okay. and you have a couple of ideas specific for us here. we look down at the list of the names. what are one or two of your favorite ideas right now. give us actionable advice. >> so one name i like is cme group. of course, there is the operator of financial exchanges, focusing on financial derivatives tied to interest rate equities and commodity markets. so i think in this volatile market environment, cme should continue to do well. what i like about it is it pays an attractive dividend that is yielding about 2.5% right now. but in recent years, there have been supplementing that with a special cash dividend which boosts the yield to about twice that level to almost 5%.
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>> what else? >> and i also like texas instruments. they serve a wide variety of in markets, automotive, personal, electronics, telecommunications, et cetera. so they generate about 20 to 30% of the sales as free cash flow and they've been growing their dividend quite nicely in recent years. and we expect that to continue. and there is a good margin improvement story there at texas instruments. >> all right, bob landry, cme and texas instruments. bob, thank you very much for joining us. >> thank you, brian. >> all right. >> it is 2:00 p.m. on wall street. stocks are rising. this afternoon, major averages posting the biggest two day gain since the beginning of march. today's gains put the dow into positive territory for the month. take a look at the transports. joining the dow, s&p 500, nasdaq, russell small caps in crossing above the 200 day moving averages right now.
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all right. shares of alibaba are taking a big hit today because the chinese e- commerce giant could be firming the sec is investigating the accounting practices. that was sparked by a report from pacific square research where our former colleague and friend is the co-founder. joining us now on the cnbc news line is the other co-founder of pacific square. one of the key people behind the report. don, we heard from herb earlier today. what sparked this inquiry about it sec? was it entirely in your view because of your work? >> oh, i sincerely doubt that. there is no way to know what prompted the sec's report. but there are a number of concerns raised by others besides us. you talked to herb, he had raised similar questions about alibaba's accounting. so we're certainly i think at the forefront of it. i wouldn't want to say we're,
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you know, that it sparked by our research. >> you know, when you look at alibaba and, don, you've been sort of forensic research work, forensic accounting work for a long time. how do alibaba's financial statements compare to other well known and maybe other companies that equal size? >> well, you know, what's interesting to me about albibaba is that it's a relatively simple business model. it's similar to ebay or other firms that do online advertising and assisting others to sell their products online. so simple business model. but yet, the accounting is some of the most complex i've ever seen in 30 plus years of doing this. >> don, there are certainly a lot of, i would say, problems maybe the right word whether it comes to accounting or maybe things that are not very transparent in your view and in the sec's view. do any of the issues lead to a
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different valuation in your estimation of alibaba? does it change the trajectory that the company is on? does it throw into question, for instance, the record sales number that they had for most recent singles day? >> well, that's the question we've raised in our research. we have been able to point to a variety of situations where we know they're conducting transactions with companies they also invested in which is potentially problematic. but there's been almost no disclosure about it. investors are at a disadvantage. they don't know how much of alibaba's revenues or expenses are coming from these parties that are related. just to give you another very recent example, it's not the disclosed in the reports, by the way. they do disclose that they invested in singapore post. what they don't disclose is
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they're also doing business with singapore post. looking at the q-4 conference call held two weeks ago, they reported, you know, that was a significant issue for them. they reported that volumes are growing and nakt they were awarded the best logistics partner by alibaba's network. we don't know what the magnitude of the transactions were. >> and the research also points to wavo in which invested $1 billion. they didn't disclose the amount they spent on advertising there. >> right. >> i'm just curious though, i mean this is a company that to much fanfare, ipo'd here in the united states. i got u.s. underwriters. it presumably has u.s. accounting firmed attached it to. where does the fault lie? >> they don't actually have a u.s. accounting firm. that is price waterhouse hong kong which are auditors. and that's an interesting question you raise. one thing that caught my attention early on was the
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relatively small amount of accountants on staff and auditors working on this. at the time of the ipo, there was correspondents with the sec where they said that they have 35 people in their accounting department in hong kong which to me was astounding. i remember, you know, working in accounting departments as a young accountant and it would have taken that just to account for, say, revenues from one region of the u.s. let alone worldwide. and revenues and expenses in a highly complex accounting with all the variable interest entities and so forth. and then the audit staff was 12 people. i don't know how you could get that job done with that level of resources. >> okay. don, great work. there thank you so much for phoning in. we appreciate it. great to hear from you. >> thank you very much. >> pacific square research. >> just so you know, we did here at cnbc reach out to alibaba for
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comment and they said the financial disclosure we're prying providing to our investors, foreign companies have to file here in the united states, on page 1z 22-123, regarding revenues, net loss and balance sheet items, is exactly the kind of robust and transparent information that will address the underlying issues in the sec's inquiry. did you follow that. something like fiat chrysler or something is even longer. it's very complicated. what is the sec looking for exactly here? how long will this take? joining us now former sec enforcement lawyer. he chairs a firm's government investigations and sec enforcement practice. i guess investors, our audience that may own the alibaba shares are saying what does an investigation mean? does that mean they're going to find something or a chance they could dig around and come up with nothing?
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>> it certainly means that there is nothing -- all it means is there is an investigation. enforcement division conducts a fact finding inquiry. the company made a decision to be transparent about the existence of this investigation. there absolutely no way for anyone to conclude regardless of the research that's out, there regard lz of what people may be believing that, there is any wrongdoing. what the sec does to the confidential process is determine whether an issuer in this case is or is not following the financial reporting rules that themselves are very complicated. they can take great comfort in knowing that one of the premier if, not the premier public accounting firms in the world is involved in this process. you can be sure. can you be sure that to the extent that there are these issues that relate to
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disclosures and consolidating financial statements as the company's reported, those are the exact type of issues that issuers discussed with their auditors. >> let me ask it a different way. which is what level of prior knowledge or expectation of affirmative finding would the sec have to have to begin an investigation? you aren't just doing investigations willy-nilly i assume. >> the answer is willy-nilly is an interesting term to use. because the standard for conducting investigation is -- i don't want to say none, but it's just that an allegation is made to the staff of the sec. that causes it to believe that it is worth investigating. there are flo targets. it seems odd to the extent that they're really looking at the disclosures and practices of this one issuer, but it really is a fact finding inquiry. they could get an explanation as
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to the basis for the related party disclosures and how the company went about making those determinations. how it went about consolidating the financial statements, determining that it is consistent with the rules. and could very easily say that's it. nothing more and close the investigation. >> okay. jacob, they could come up with nothing here. we appreciate it, jacob. thank you. >> thank you. all right, so what do do you with the stock? with us is gill lauria. what should investors do? >> i think it's a really tough one. the flip side of what we're talking about this is a company that grew revenue 40% and trading at only 20 times. we don't have a lot of large cap technology stocks growing that fast that have such a strong market position. another hint, the pop ikz that herb and don have done a great job xpoedziexposing and prompti
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sec to look at are a couple problems that you face. there are underlying concerns with china. there are concerns about inflated volumes. there's concerns about the competitive situation vis-a-vis there is concerns about how much financing is a big part of their business and is pushing volumes right now. >> there are a the love questions in your mind. the disclosures about the investigation, your questions. yahoo has a 15% stake in alibaba. how does that impact them? >> there's not much they can do about it. as the shares of alibaba fluctuate. >> but what does do it to the valuation? it must have a depressing effect. there are more and more us is sementible to the fluctuations. >> we'll leave it. there thank you for your time. >> thank you. all right. voters at exxonmobil's annual meeting today approved a measure to let minority shareholders nominate outsiders for seats on
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the company's board. meaning that a climate activist could eventually become a director at the oil giant. as farfetched as that does seem. calpers pressured xpon on climate change, holdsed 1dz billion of exxon shares and ann simpson is caliper's director and thinks exxon should be free to run the business without activists, his words, int interference. welcome you to. while the proxy access item was approved today which i guess liberalizes the ability of shareholders to nominate people to the board, two other positions that you favored, one specifically to place a climate expert on the board and another to limit global warming to two degrees centigrade did not prevail. so what do you do next?
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>> the most important vote today was the consensus that the owners of the corporation need to have the ability to put forward candidates on to the ballot. that's a fundamental tenant of how capitalism is meant to work. the u.s. is very rare place in the global markets because elsewhere this is considered normal. in other words, once capital has been provided to a company, the providers of that capital are the owners of the company and they need to be able to hold the board accountable. now current policy at exxon is that directors are not even able to speak with share owners however big, however long term. so the good news about this vote is it turns the page. if we have board accountability at exxon, we see this opens the door to being able to engage with the owners on all that is relevant for the company's long term success. >> does this mean that if i own one share of exxon i could get
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nominate myself to the board and it would be on the ballot? >> well, i'm sure exxon would be thrilled if you stepped forward. but the rule is actually modelled on a vacated sec proposal which says essentially you have to be a big owner of shares, together or on your own, 3%. and that's a big number. you're talking about $10 billion of holdings to be able to even put this forward. and the second thing that is very important -- >> and not even you have that size holding. >> no. we have a modest .5%. so calpers on its own would need to work with other long term owners. now emphasis is on long term. very important. we've been very concerned about pressures on the short term on companies across the moshgt. we stood up in defensive companies where they had activists pushing them into short term measures. you have to be able to demonstrate you held the shares consistently for three years. >> jim? >> that is the minimum. thirdly, you're only allowed to
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put forth potential candidates on the ballot for up to 25% of the board. so the other thing is, this does not parra chute directors in. what it allows is a channel for the owners to propose new talent to the board. and everyone on -- with a vote would have to vote on these candidates. this does not give us the ability to put as you put it, activists. they would have to meet our standards which are that they are independent, competent, and contribute to diversity. we don't want this misrepresented. >> jim, there's top of discuss there. and let me just get your reaction to what ann simpson just said. and the basic question is why shouldn't the owners of the company bible to nominate whom ever they want or take stances regarding the management of the
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company and what the company does? >> those are two separate questions. i want to correct the record a little bit. this is a shareholder proposal. what that means is it's not binding on the board of directors. so even if a majority of shareholders support the prop e propos proposal, they still have the authority here to act. i expect that the board of exxonmobil will respond in some fashion to this majority passage or proxy access proposal. many of these have been passed against various companies. but they are not bound to do it exactly the way the proposal spells out the rules here. so they may react differently. in term of what is in the interest of shareholders here, i think -- i always try to distinguish between these corporate governance related rules. how do we elect who son the board and then the spoesocial py rules and proposals on the ballot at exxon. six of the 11 shareholders
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proposals involved environmental concerns. and those all failed to get a majority. and that's not a surprise nor is it new. we track shareholder proposals at the 250 largest publicly traded companies through our proxy monitor data base that is available online and as of this morning, over the last ten years, we've had 453 shareholder proposals introduced and zero of them passed a majority of shareholder vote. so shareholders don't agree with the policy position being pushed by calpers and some of the other public employee pension funds and social investors. >> that's the corporate democracy there if the shareholders don't agree, the companies are bound to follow. let me finish. final thought before we go to breaking news. is your beef, jim, with activists per se who may want to put members on the board and influence policy on things that have nothing to do with social or environmental issues or it is
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merely with those who would push these kinds of social stances? >> it's principally with the latter. and my reading of this is actually somewhat different from ann's. >> jim, you need correct your numbers. bp, shell -- >> jim is speaking now. >> yeah. >> you've got the wrong numbers. >> ann, i let talk for a long stretch. >> but this is important. >> ann is worried about short term investors. whereas for me, if a carl icahn or a hedge fund is putting up a lot of his own money and a lot of its own money getting 10% of the stock and trying to turn a company around, i'm less worried about that with certain constraints on behaviors than i am about the 0.5% calpers teaming up with pension funds and driving political action items by coming together. they're not going to succeed. >> i'm glad i asked that question. folks, i'm sorey. we have to leave it there for --
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>> there is about financial risk. this is not political. >> we have breaking news, folks. thank you very much. yeah, tyler, reuters is reporting now that 11 states have filed a lawsuit against the obama administration over this issue of transgender students in bathrooms at schools. remember, earlier this month the obama administration directed schools to allow transgender students to use the bathroom of their gender identity. well now 11 states are filing a lawsuit to protest. that the states include texas, alabama, wisconsin, tennessee, arizona, maine, oklahoma, louisiana, utah, georgia, west virginia. the federal lawsuit is filed in the northern district of texas. the lawsuit seconds a declaration from a judge that this bathroom policy is unlawful and the lawsuit says that u.s. officials have turned workplaces and schools into lavatories for a massive social experiment. tyler this transgender bathroom issue clearly shaping up now to be a big social wedge sh u going
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into the november elections and clearly both sides of this are trying to stake out their positions now. >> thank you very much. showdown in the valley, that's coming up. a tech billionaire engaged in a behind the scenes battle with online media. where can you live if you're unbelievably wealthy? inside some of the craziest homes you'll ever see. homes of the super rich coming up. the e-class has 11 intelligent driver-assist systems. it recognizes pedestrians and alerts you. warns you about incoming cross-traffic. cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing: a crash. the 2016 e-class. lease the e350 for $499 a month at your local mercedes-benz dealer.
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they found out who's been who? cking into our network. guess. i don't know, some kids in a basement? you watch too many movies.
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who? a small business in china. a business? they work nine to five. they take lunch hours. like a job? like a job. we tracked them. how did we do that? we have some new guys defending our network. new guys? well, they're not that new. they've been defending things for a long time. [ digital typewriting ] it's not just security. it's defense. bae systems.
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hulk hogan won a lawsuit against a private online media company. they posted a sex tape of him. now necessity claim that funding for the lawsuit came from a rather powerful and well known to our audience third party. we're live if l.a. with more on this ever twisting story, julia. >> that's right. cnbc's confirming that peter teal, co-founder of paypal and early facebook investor is secretly paying the expenses of hulk hogan's legal fight against gawk are media. he concluded with a $140 million victory for hogan in march. this dates back to 2007 when the diblgt alameda company published an article that outed thiel as gay calling them to call the site which is longer operating saying it is the equivalent of al qaeda. gawker issuing a statement
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according to the reports, a board member of facebook, and a major fundor of the committee to protect jushlists is secretly funding a legal campaign against our journalists. at the appeal trial just now, the judge denied gawker's motion for a new trial and said she won't reduce the $140 million verdict in hogan's favor. gawker expected to appeal this ruling. now we don't know if thiel will get a piece of any aregard that will get paid. >> stay with us here. let's bring in the forbes journalist who reported this storey. before we get into the details of thiel, people may not real niz this litigation funding is actually a thing. it it's kind of a business to pay for somebody else's litigation costs in hopes of getting a sliver is not that unusual. i guess it's just the name and maybe the reason that maybe unusual here. >> it does happen frequently. you are know, other cases have been out there.
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you don't often hear about them. these are deals that behind the scenes. it is certainly a thing. >> but also not involving bolt face names. people just don't care. >> that's right. >> usually it's not hulk hogan involved. >> whether you first sort of found out this information, matt, what was your reaction? did you -- i know peopler thiel a little bit. he's an interesting guy. did he react strongly? what was the reaction? >> yeah. we first got a tip on this story about a month ago that someone in the val qui had been funding this on going litigation. we were working since then to confirm that. so as soon as we were able to confirm that yesterday with multiple people who were familiar and close to the situation, we reported our story. you know, since then, there's been feedback from gawkers. you noted they sent out a statement this morning. also the committee to protect journalists sent us a statement about the case.
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>> mat, i think it's interesting we don't know the arrangement here. do you know if thiel has a financial stake or just backing hogan's suit against gawker because he thinks that gawker has done the wrong thing? >> so the motives right now are unclear. we don't know the details. all we know for certain is that peter thiel is backing this on going litigation which is just back in front of a judge in fwloer today. but as far as the details, we're still trying to figure some of that out. >> matt from forbes who first reported this very interesting story yesterday. matt, we do appreciate your time. thank you very much. >> thanks for having me. >> julia, thaub as well. let's get back to the markets. a bearish call on a well known luxury retailer. that and four other big calls that you need to know about. it's all ahead on "street talk" which is all ahead on "power lunch." stick around. ♪
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ford will recall 170,000 f-150 pickup trucks in north america. the recall is involving the brakes. the company saying the leak of brake fluid could increase the risk of a crash. the recall involves vehicles from 2013 and 2014.
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>> generally brakes are a good thing to have. >> yes. >> you do not want to have bad breaks. >> power is back in two.
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a bipartisan deal to help puerto rico manage its crippling debt cleared the first hurding from a house committee. it sets up a vote in the full house. they would create a financial control board and restructure the p $7 o billion debt. house speaker paul ryan continues to withhold his support for donald trump for president. saying he is not ready to endorse him. he told reporters he hasn't made a decision and has no timetable for doing so. >> a second day to evacuate the refugee camp on the greek border. the evacuation is expected to last several days with residents transported to newly built shelters set up by the army. and pope frances calling on the world to join him in praying for the recent victims of terrorist attacks in syria. and to act to help missing mistreated and abused children around the world. he spoke to thousands of people in st. peter's square for the weekly audience. that's the cnbc update for this
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hour. back to you. all right. sharon, thank you very much. it is just about 2:30. a little after. the oil market thus closing for the day. and crude oil closing up yet again. folks, new high for the year. $49.50. we are sort of inching, creeping, crawling back to that $50 a barrel mark. we're up on crude oil 14% over just the past month. let's talk more about this trend and we're seeing kyle cooper is joining us now and john laforge of wells fargo as well. >> kyle, it looks like 50 is inevitable. does it mean anything? >> not all that much. it certainly zshgs brian. we really had a reversal in market sentiment since that february low. the inventory numbers were slow. year to date, we're up $55 million barrels on inventories. but the last three weeks have shown total inventory draws. and that's a first time that's
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happened since october of '14. so certainly the momentum is up and now with the only being -- >> let me ask it this way. we talk all the time. does the run from $26 to $49.50, is that run justified by the supply demand data that we have right now? >> certainly i didn't think so but whether or not a near doubling is justified that, is hard to dee debate. certainly it warrants, you know, coming up from the $26 lows without a doubt. and clearly the inestability is that it is tightening and that the surpluses will get worked down such that, you know, look, we were really long at $100 crude way too much. $26 obviously getting the job done. we really don't know honest wla $45, $50 looks like from a supplies perspective three to six months from now. but things are tightening, no document we've come off from a very, very bearish inventory trends that we saw earlier this
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year. >> you know, john, as we pointed out to our viewers many, many times, if you go back and adjust for inflation, the average price of oil over the last 30 years is about $45 a barrel. can you argue a couple higher or lower depending on the contract of the month. so we're right where oil wanted to live for the better part of a quarter century. does the fact that we have come up from the lows mean that 60 and $70 are next? or do you think we can cover in this area for a long time? >> i think we're going to hover for a while, brian. i can even give you data point a little more history. $34 is the average inflation adjusted price all the way back to 1861. so even at $49, we're actually a little pricey historically speaking. but specifically to your question, i think 60 is about as high as we'll go. i think somewhere in the 50s is almost a forgone conclusion at this point. because the speculators still have their way. they still have the trend and they still have fuel to fuel it
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into the mid 50s. but beyond $60 is going to be hard. that's where you'll see the rig count climb. >> what do we have to do to get to $60 besides add $10 a barrel to the current price? >> i don't think it will be anything short of fundamentals. it's going to be the speculators in futures markets. they're net long like they haven't fwhn a couple years. but they're not net long like they were at the beginning of 2014. so a little more fuel left. i think it has less to do with the fundamentals today like rig counts, like what we talked about earlier, supply. i think it's more financial than anything else. >> all right. feeling good about my 25-year dat ain't pochlt he comes in with 130-year data point. thank you very much. we'll see you both soon. thank you. time now for "street talk," the daily dive into the key analyst calls of the day. stock number one. one that has been in the news a little bit today. computer sciences. follows the deal with hp enterprise. barclay's upgrading csc.
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they like the synergy opportunities. that is fancy talk for cost cuts. those shouldo outwaeigh the top line growth. the target boosted to $54. a lot of upside. the analyst is applying a 10% discount in the price target. melissa, for the probability or possibility that the deal will not close. >> stunning increase. you get a chance, check out hpe shares. those shares are doing really well on this news and also the better than expected earnings last night. next up, biogen, it's raising prices for three multiple sclerosis drugs. according to cowen, there could be upside to 2016 guidance. the cfo did not include the hikes in the guidance that was given in january. despite election year politics, they see u.s. pricing in the marketplace as flexible, prices can go up. and that would be a support pillar of biogen's franchises.
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>> maybe they feel they need to do something. stock is down 30% over past 12 months. >> along with biotech. >> western digital, another barclay's call. the analyst upping western digital to an overweight from equal weight. he thinks the stock has risk for a couple reasons. he believes that old style drive, hdds are not going to totally be repolilaced by the fh memory drives. he thinks the stock valuation is too low. target boosted to 60 there are from $57. >> a key driver is going to be 3 demand which acquired with the acquisition of sandisk. we heard that, remember. the earnings set the sector on fire. and specifically mentioned three d as being a strength there. a bearish note, cutting estimates and cutting the price target to $57 michael kors. data shows increased handbag discounting at the department
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stores, lower spend intent by consumers for accessories and lower core handbag prices versus piers around the world. also, pricing is trending 8% below fourth quarter levels. >> i read an article last night. i can't remember where it came from or who wrote it or anything about it. how is that for confidence? >> you remember what you read? >> yes. it was -- no, it was that of all the major retailers, kors has the highest return rate of any handbag manufacturer. they buy it, don't like it or maybe they wear it and return it. i never used it. who would do that? >> i don't know. stock five. fleet matics. this is. >> narrator: radar name of the day. we'll bring you to the old country, lads. this san irish based company. software is a services firm, pacific crest. coming to the defense of the beaten down name. i say that because the stock came down from $60 back in december. upgrading to an overweight from sector weight. analyst says they have a solid runway for growth and that they have been positively received with management transitions and
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conservative outlook for the year. they turn more positive on fleetmatics. stargt $54. 30% upside from here. still very disappointing to people that own the stock six months ago. >> good under the radar, bri. never heard of that company. >> that's what we do. we do it. tyler? >> thanks, folks. new upset of secret lives of the super rich tonight at 10:00 p.m. on cnbc. we have a preview first and l.a. mansion. >> yeah, this is a $135 million mansion. the most valuable feature in this house is not even in the house. check it out. >> we are in beverly hills. it is by far one of the most prestigious neighborhoods in the world. the current owner bought this 18,000 square foot mansion for $50 million in 2000. he spent millions more
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renovating it to look like a palace. he covered the floors in handwoven carpets imported from europe, lined the walls with crown moldings coated in gold leaf and hung 2 $1/2 million worth of chandeliers. but aaron knows that morish archways and ornate interiors are a tough sell in a hit me toll list like l.a. so what is really pushing bragging rights to the best views in touvenlt and the fact that property next door sold for a whopping $70 million only helps justify the owner's asking price. fwhauz compound is a lot bigger and aaron says it comes with way better views. so morish palace may not be your taste. >> less is more. >> exactly. but having been up, there the views, i mean, you're king of los angeles when you are on that hill top. you are just -- there is nothing above you. you see the whole city below. it's great views.
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it is $135 million. >> we have another house to look at here? >> sometimes a billionaire's taste is not your own taste. >> yeah. >> trump comes to mind. >> traps. so fingd a buyer for a $21 million house is difficult nifrment but finding a buyer for a $21 million mansion that has gold french empire everything and red velvet, that's even tougher. take a look. there's a saying that the devil is in the details. and it certainly applies to this manhattan mansion packed with embellishments that make selling it one hel of a challenge. >> it has to be someone that loves first frefrnl empire, neoclassic design. we have to go out and hunt for someone who really appreciate this is look and feel. because it's not for everyone. >> the splashy pool is covered in handmade tiles and there are hand painted murals of birds on the walls. and while flashy decore may not appeal to every billionaire
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buyer, there is one feature that just might. >> the rear of the house has a button which automatically closes off the rear windows of the house with a metal bullet proof enclosure. so if you're looking for privacy, this town house affords you some amenities that you won't find in others. >> bullet proof bedroom. now that bedroom and house was built and renovated by ukrainian fertilizer billionaire alex ander rot. he nut $18 million, put in all that gold and hand painted toilets. now they're just trying to sell it for $20 million. >> wow. finally, a tricked out van? >> what happens with you cross a private jet a van if snk traffic? take a look. it's a $400,000 vehicle called the jet van. if a private business jet had sex with a mercedes cargo van, this would be their love child.
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yoour looking at a had 400,000 state of the art luxury transport called the jet van. and for the rich and powerful, it's the perfect way to hit the road in style. the vehicle has been fully customized to include six first class seats in the finest us aindustryian leather and hand tufted designer carpeting and $30,000 remote that controls everything from the blinds to the door. and in the back, a more basic luxury. kind of electronic doors, a designer bathroom. >> wow. >> now they also, decker automotive is the company that makes the vans. they have done everything from michael jackson's ride to dr. dre did a cadillac that has all of the movie catalog from hois home in the car so he can hang out and watch movies while stuck in l.a. traffic. >> can you go in the easy pass lanes or fast lanes out there or the bus lanes?
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>> it doesn't matter. with that thing, i'd rather be in the slow lane. just hang out in the van. >> you have a satellite dish on top. it is called a kingdome. can you have mobile high speed wi fi. i know some executives, they have desks in them. that is the new limo. >> productivity is the new pleasure. >> and head room for the head. can you actually go to the bathroom -- i'm going to top stalking. >> tmi. >> thank you. >> you can finish the thought. robert frank, we'll see him tonight. "secret lives of the super rich" at 10:00 eastern time only on cnbc. the quest to upgrade your brain and incredible story on restoring your memory is next on "power lunch."
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shares of sarepta are soaring. they're going to delay a review of one of the key drugs that is being developed to treat a muscular disease. an fda advisory panel voted against accelerate add principle of law of the drug. they say the fal fda told it that it is continuing to review the drug and try to finnish a timely manner. the stock lost 45% so far this year, down 20% in the past 12 months. staying in health care, the
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centers for disease control believes 1.7 million americans suffer traumatic brain injuries every year. one of the debilitating impacts is memory loss. we're kicking off a special series, modern medicine, as researchers try new methods to help those with memory loss. >> thank you so much. you might remember a couple years ago president obama announced the brain initiative. that was a multiyear effort to do for neuroscience what the human gee nome project did for genomics. the defense advance research projects agency which you may know help intervet the internet. they're working to manipulate neuropatterns in our brains that code for everything for movement to memory. the doctor says we should think about the patterns of these millions of nurones firing essentially like a computer code of ones and zeros. >> whether it comes to human, right, and how human brains are forming and recalling memories, we don't know a whole lot about that space. and especially from that kind of single nuron level. that's why we develop
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technologies to get down into that realm. >> one of the projects they're working on, a pros spetic memory to help with traumatic brain injury. take a look at how that could work. >> declarative memory is how we store information like facts or events. grocery lists or directions, for example. those memories are formed in a region of the brain known as the hipo campus. whether someone suffers a brain injury, it can be damaged. making it hard to form or recall the declarative memories. the ram system is aimed toprost. woint september signals from nurons involved in memory formation. they then wirelessly trans mitt that information to a device worn externally. it would process the information and deliver instructions until memory is needed. stimulating certain nurons to trigger the ability to form and recall memory. it is part of the department of defense and a lot of the work
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they're doing is targeted to military and veterans. but they hope that over time as this gets developed it can be for the broader population. >> what is the time frame for this? >> a prototype should be ready in three to fivemeg, thank you. meg terrell. the dow and s&p 500 hitting highs of the day. a tough month for apple. but the stock bouncing back. we'll debate it next. e you. it's a drone you control with your brain, which controls your thumbs, which control this joystick. no, i'm actually over at the ge booth. we're creating the operating system for industry. it's called predix. it's gonna change the way the world works. ok, i'm telling my brain to tell the drone to get you a copy of my resume. umm, maybe keep your hands on the controller. look out!! ohhhhhhhhhh... you know what, i'm just gonna email it to you. yeah that's probably safer. ok, cool. perfect driving record. >>perfect. no tickets. no accidents... >>that is until one of you
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today's trading nation. let's talk about apple. yeah shares up lately but still down 25 percent for the 52 week high. i wrote in a piece yesterday i think it was that maybe version fatigue. 6, 6s. 7, whatever. it is like boeing adding a number. duke apple is ready to breakout or is just dead money from here on out? >> i think the growth is over. they really got a huge kick up and a bad comp by finally releasing a full sized series of phones. and it is going to be hard to get the bounce again.
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that said it is still a great company. i agree it is not as exciting as it used to be. >> is it exciting enough to own? >> at this price i still think so. yes. >> rick, does your charts agree? >> yeah brian it does. i think apple is a buy here. and if you brieng up the charts i'll show you why. it is a tale of two charts. the first is that daily chart, takes us back a about a year. we see a down trend. we don't love that but what we do love is that false breakdown below $90. that gives us a fast move in the opposite direction. and i think there is room to retest that down trend and the 200 day moving average up around 107, 109. if we can can zoom out and look at the weekley chart this is where the magic happens for apple. the 200 week and the 50 week on the chart. this is eerily reminiscent of
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2013. we had a 40% decline which tested and held the 200 week. we put in a nice double bottom base of support and a fantastic rally off the 200 week. fast forward to today, i think you could be set up for a similar type surge. i would be a buyer of the stock. down here on the 33% pullback to key long-term support. >> likes it technically. max likes it fundamentally. a positive view on apple. thank you very much. for more head to a lot more to do. don't go anywhere. we're back in 20 minutwo minute.
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audi pilotless vehicles have conquered highways, mountains, and racetracks. and now much of that same advanced technology is found in the new audi a4. with one notable difference... the all-new audi a4, with available traffic jam assist. & 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 &
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like at&t. with usaa is awesome. homeowners insurance life insurance automobile insurance i spent 20 years active duty they still refer to me as "gunnery sergeant" when i call being a usaa member because of my service in the military to pass that on to my kids something that makes me happy my name is roger zapata and i'm a usaa member for life. usaa. we know what it means to serve. get an insurance quote and see why 92% of our members plan to stay for life. we are holding on to gains in the final hour of trading. off session highs about four points off the highs. 2090 is the level there. the dow is looking at 151 point game so far. 17857 ,857 is your level. and the nasdaq is up about .6%.
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the surge in oil is what's leading us on. specifically oil, energies and financials those are the sectors doing the heavy lifting on the s&p 500. >> i'm focused on alibaba. it's been losing steam all session long. alibaba shares now down more than 7% on reports of that that sec investigation. >> session lows as we speak. >> session lows, i'm sure more on closing bell. i wish we could have buttoned this with o'reilly out parts so we could have had baba o'reilly. >> oh that's good. >> yahoo to baba o'reilly. that's good. we were talking about drinking games. what's the price of exxon stock right now sf you get it right you drink the whole pitcher. >> $90.09. >> beating back a couple of shareholders proposals as its meeting advance by calpers. but proving proxy access to
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allow shareholders to nominate people to the board. >> oil now, pressing ever closer to $50 a barrel. above 49. $49.65. >> probably not an accident that that and the dow have done so well. >> "closing bell" starts right now. ♪ welcome to the "closing bell" everybody. i'm kelly evans. >> and i'll bill griffith. a two day rally for stocks as you have seen. the dow powering higher. was up 177. just off those highs right now. bond king jeff gundlach says he feels this rally is nothing more than a short squeeze. we'll debate coming up here. >> weak numbers from tiffany and express hit the market this morning. but there are three retail stock market with momentum


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