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tv   Power Lunch  CNBC  August 5, 2016 1:00pm-3:01pm EDT

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getting in ahead of the quarter, but it falls materially, it's time. we know this news. >> i have none so far, so i'm not proud of myself. i'm hoping for a so-so quarter, and that's when i buy p. >> great stuff. have a great weekend. all of you now. "power" begins now. ♪ welcome to "power lunch," sending stocks to record highs, what happened to all the fear of the fed? we've got all your need to know about everything that matters to your money. plus, a tail of two pharmaceutica pharmaceuticals. it is the best of times and maybe the worst of times for these two names. and as the music says, we are taking you live to rio, not sure if anybody's dancing on the sand, but the world is ready for the opening ceremony of the 31st olympi olympics. fire up that torch, "power
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lunch" starts right now. i'm melissa lee, american airlines reach an agreement with mechanics and ground workers over salaries under the deal the workers see a double digit pay increase. tropical storm earl is dumping torrential rains on mexico's coast and expected to land in mexico later tonight. brazilian soccer great skips the opening ceremony due to illness. pele was expected to light the olympic caldron. >> i'm your busboy for the our -- >> oh, no. >> we have the block buster, jobs report. there you see it at 2181 and change, sending gold in the opposite directions, bonds as well in price selling off as yields rise. precious metals dropping more than 1% at this hourment let's
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get more on the market moving higher. bob? >> and, tyler, it's a broad rally. 3-1 advancing to declining stocks. most importantly, all the indexes near new highs. this is the market stapp shot. historic highs, s&p 5 he recollects and nasdaq, approaching highs, not quibbling in the mid cap or small cap, though not in the nasdaq 2,000, the other small cap. tech's been on fire in the last few weeks, not just today, but biotech doing well. the utilities, telecom, this is market reation, and it's very healthy. today, bank stocks, not saying momentum stocks, not yet, but showing signs of responding to the slightly higher interest rate scenario seen since this morning. our old partners noticed when the nonfarm payrolls beats by a large amount, what happens on a day like today is financials, industrials, and materials out
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perform the market. they nailed it. essentially, look at sectors. financials, industrials, and materials outperform the market. tech stocks up 1%, on fire. we had good momentum in the names. microsoft up 12%. highest level since the year 2000 this afternoon. i can go over many stocks up double digits in the tech sector. this is the one to watch right now. why is this happening? why today? brian mentioned we're seeing the jobs report, and that's a factor, but on top of that, we've seen decent earnings, fewer downward revisions in the second half, crude stabilizing, and we got more talk of fiscal stimulus out there. guys, back to you. >> bob, thank you very much. well, it is payroll friday, but don't forget about that other big weekly number. the recountings. they are crossing. they are higher for the sixth week in a row, rising seven last week to a total of 381, down 289 from a year ago, but up six ore seven weeks in a row. oil down, down already, down
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1.25%, which is 50 cents which is 41.41 per barrel. melissa? >> a big story, bristol-myers having the worst day in years, failed to meet goals in a drug to treat small cell lung cancer. that sends shares of merck higher. they are developing a competing drug to treat the same cancer. let's bring in aleck covering the health care space, and minutes ago, upgrade e ed merckm an overweight to a hold. what does this mean specifically for merck in terms much future shares as well as market share in this particular space? >> it's a seismic shift. merck has front line lung cancer market, the largest market in the immune oncology all to itself for the foreseeable featu future, and they have at least
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20-30% market share. in terms of sales, we reeaised r forecast from $4 billion to $6.5 billion by 2020. higher already, alex, a in terms of price target, what adjustments are you making there? >> we increased sales from peek sales of $9 billion to $12 billion in 2026, all lung cancer. once you're established in a setting in lung cancer and front line, these are healthier patients, parties treated more aggressively, and duration of treatment is longer. finally, a significant dosing advantage, once every three weeks for 30 minutes. >> right. >> this is why we think it's all basically straight off dcf, and the eps growth changes the eps growth profile and forecast at least 14 or 15% eps growth justifying our pe valuation of 17. >> a question, alex. >> sure. >> it would -- just intuitively,
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it appears the big dropoff in bristol's stock suggests that people expected this drug to succeed. what went wrong, and is it game over for this drug? in other words, for those of us who don't know how drug trials work, can they go back and tweak the formulation, subject to another test, or is it all over ? >> this was one of the biggest surprised. they expected it to work. the drugs have shown great clinical profile. the reason we think the trial failed is because it was not enriched enough whereas merck focused on parties that are highly likely to respond, and we have to see the data, but that's why it probably failed. the drug is not dead. it's approved in second and third line cancer, and it's worked fantastic, but the major opportunity was in the first line setting, bristol will reevaluate this. they have other trials coming in first line, but they conceded the first line market to merck
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for the next couple years, and that's going to be enough to alert merck to get established. >> alex, thank you. just upgraded shares the merck. brian? >> bringing in nancy tangler, she got completely out of bristol-myers last year. merck up 5% in a year, bristol down 3%. a tremendous move by you. what did you see coming to make you make that move? >> oh, brian, we're valuation driven. we were to a point where bristol was too expensive and forced to trim and then eventually eliminate our holdings. then you, you know, we faced the down trend in pharmaceutical and biotech stocks, and it's not even today yet quite attractive enough for us, but we are looking after this event. usually, these stocks go from love to hate to disappointment and neglect. we are going to wait for settle
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valuation to set up for us, even on a technical basis, it's on a technical move down although we look at things fundamentally. >> well, okay. know that bristol-myers has the day it had with a massive drop, do you relook at bristol? not only is the price down, but the valuation metrics we look at are coming down. is ems now a valuation stock? >> yeah, it's close. i think what i'd like to do is just let kind of the people that are going to get out and growth managers usually get out darn quick, so we let them move to the side, and then we'll step in and start accumulating holdings. we are moving to a significant overweight in the group despite the political potential problems with the stocks over the next six months during campaign season and election, and the reason for that is, you know, i've lived through the last clinton administration as an investor who invested in pharmaceutical stocks, and while they underperformed initially,
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they dramatically outperformed indexes by 120%, 345% for the s&p health care index, and 113% for s&p 500. >> a flip side to brian's question. at what point does merck get too expensive after the gain seen today? >> right. so we're looking -- that's a good question, obviously, we're looking at earnings and stock on a relative price to sales ratio basis and relative yield basis. it has spiked up into our ranges. of course, you expect earnings growth to increase as to stay true to market share expanding, but i think it's getting close to being in a position where we have to start trimming and selling out of the stock to stick to our discipline. >> all right, nancy, we got to leave it there, but a great call by you for you and your clientings. have a great weekend, thank you. >> thank you. >> let's get back to the big employment report crushing, crushing expectations is the
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economy added 255,000 jobs. steve leisman, the crusher, here with the top take aways. >> he's the professor. now the crusher? >> you know, one of the big take aways from this blowout jobs report is it's hard to find anyone saying anything bad about it. no political tweets out there about it. showing 255,000 in job growth, showing the market in all important dynamics to improve. a little checklist here, job growth broad based. wages up .3%. more finding jobs, why the unemployment rate was up changed, hours worked up, and previous months revised higher. here's where the jobs were, what i mean by based job growth. leisure and hospitality up 4, 0 45,000. government up 38,000. one of the biggest two months in a e row we had of government job growth. manufacturing/construction, helping out a bit, temporary help, a sign of things to come,
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people come on temporary then made permanent, retail up 15,000. whether it's strong enough to hike as soon as september is the question. dear fed, wake up and smell the job growth. but take a look at how the market reacted so far. here's the percentage chance by meeting month of a fed rate hike, just 36% in december, 17% in december, 40% in february. not much going on there, not until there's a 50% move until we add up the december where the market is looking for that next hike. over in oxford, they say, unless other incoming information changes, the fomc will likely nudge the fund rate target at the december meeting. ubs, one or two strong labor market reports are not enough to pull forward the december hike that we expect. three factors hold the fed at bay. first, renewed decline in oil
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prices pushes down inflation. measured gdp is weak, fed needs collarly between the two numbers showing the real economy, and, third, bank of england announced more stimulus, cut rates, europe, japan, negative, fed is weary of getting too far away from its colleagues, the central bank. >> august reports are important ahead of the september meet k. expect the gains continue? anything underpining anything seasonally to make the august report just as robust? >> could be a funny month for data and jobs. you had a big seasonal adjustment, but not a bigger one than normal in the month of july. some people talk about that, doesn't make sense to me, but jackson hole communique is key. >> you'll be there in a couple weeks. >> will be. >> steve, stay with us. bill rogers, chief economist, now a a professor at rutgers. remember carnac? >> go forward. >> you follow me. he did this. put a question here on his head,
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and would open up the envelope, and he would say, oh, and the answer is -- >> oh, i'm remote today, yeah. >> the answer is not now, maybe later. what's the question, bill? >> will the fed raise rates in september? >> you got it right. what do you think? >> i don't think they will, but i do think that you'll start to hear that wonderful phrase, we've got to love and possibly hate a bit, and everything's data dependent. you know, they definitely will change their language in the statement if we get another, you know, strong report like we did today. >> so you take this strong report, you -- which is, for the month of july, you compare it with the weak print on gdp for the previous three months through june, what do you make of the u.s. economy? strong? weak? middling? good? bad? >> yeah, i think we're -- it's as my former boss labor
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secretary used to say, it's steady as you go economy. we're growing at a pace that is now in terms of the job growth numbers over the last three to four months, you know, it exceeds the number of new jobs we need to help to push unemployment down where people are coming in and getting jobs, and we saw in this report, the year over increases in wages that exceeded, you know, the growth consumer price index, and there's one area that remains, you know, my kind of focus on is that u6, unemployment rate that includes not only those actively searching, but those who want a job or those who work part-time only for economic reasons. you know, that's still, you know, just a tad below 10%, it's not returned to its, you know, level prior to beginning of the recovery. >> it did pop up. it did by a tenth this time around, bill. i think one of the questions -- >> yes --
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>> a lots of questions folks have is, can the strong growth continue? there's a narrative out there. look at the past year in job growth, we have a weakening in the spring, say, march and april, especially may. we had a really lame report. we have a chart on that. what it shows is that this looks very much like a bounceback from the two months, and so the best bet is that we return to some kind of trend in the coming months of around 150,000. bill, what's your take on that? >> i think that's about right. hopefully we get closer to 200,000, but i think that, you know, may was definitely a low. you know, you reported on some of the key industries that turned around this month and actually over the last two months now. it was leisure and the hospitality, and then, also, within that professional business service sector, temp employment. those were the two that rebounded in the last two, three months that were the, to me,
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when i looked at the data, were the major contributors to the may lull. >> brian, we have a chart here, if you're a 25-year-old, a four-year college degree, you're full employment, 2.5%, and high school dropouts have a better time, their rate from 8.5% to 6 prepondera .5%. what do you see as the hold up right now to a stronger job market in the united states, what should we do? >> i'm big on human priority expenditures, and these are expendtures the public sector makes and private sector can make, not only on human capital, but education and training, but also on social capital. where you're investing in communities, and so this goes beyond what was said this morning. he greed to wanting a pack taj
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that would focus on physical infrastructure, but we have to focus on human infrastructure. there's been a great deal of deferred, what i call deferred investment in the two areas, and those would set us up in terms of providing opportunities today, but also it's an investment in the future and improve productivity numbers seen. >> do you have a statement, steve? >> no. >> you're done. i didn't know. >> if oil and gas turns around, it's a better number. that was the only sector, again, down about a couple hundred thousand jobs, losing 6,000, so if we get mining -- mining -- oil and gas stabilized -- not even stabilized, but improve the number. >> they are cranking up rigs again. >> steve, thank you very much, bill rodgers, we appreciate you being with us. still ahead, a call to haction, why apple pays you to hack their products. what's driving netflix higher right now? first, jobs, the economy, and
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race for the white house. mark is up next when "power lunch" persons.
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welcome back to "power lunch," stellar jobs report driving stocks higher. 2 255,000 jobs added last month, more than expected, but how much a tail wind does this offer the presidential candidates? thoughts from morning, president and ceo of the national urban
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league. hi, mark. >> hi, ty, how are you? >> your colleague told us he thinks this is no occasion for a a victory lap. first quarter gdp revised down to.8%, and president obama will go down as the only president since '49 not to have one year with above 3% growth. your reaction. >> well, the president and on his watch inherited the worst economy since roosevelt with millions and millions of job losses, and on his watch , it's converted to a trend of over 200,000 jobs a month with one or two exceptions in the last several years. and i think that's important to upsz. it's not a time for a victory lap because unemployment is high in many communities. the labor force participation rate is not where it needs to be. overall growth rate is not where we'd like it to be, and question is, how staepble is this, so while i believe firmly that
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president obama maeds a substantial contribution to taking what he had and improving it substantially, there's tremendous amount of work to be done. i'm here in baltimore, and there's still, in many neighborhoods, high unemployment. >> what do you want to see done in either administration to address pockets of unemployment that you point out rightly are so intractably high? minorities, young minorities, particularly. >> important question, ty. these times call for an investment approach, and that should include fiscal spending, public spending, as well as how to realign the incentive structure so that jobs find their way to the inner cities, to the urban communities, and not abroad. i believe that there's a lot of work to do to rebuild water systems, sewer systems,
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transportation systems. it's always been a part of america to build our infrastructure for the future. i think that's job one for the next president of the united states. to give us an infrastructure based jobs initiative. secondly, i still believe strongly that a $15 national minimum wage high to inflation has the effect of stimulating wages across the board. we do have a better situation when it comes to employment in the country, but wages a stagnant and americans are not seeing a pay raise in the sense of wages increasing vis-a-vis inflation since 2000. that's important work for the next president and next congress. >> okay. thank you. good as always to see you. >> thanks, always. >> america's company looking for hackers, how to cash in when we return.
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welcome back to "power lunch," shares of weight watchers down more than 5% in today's trade. second quarter revenue fell short of analysts' estimates. the big issue is membership. the company add the members in north america, but was hurt by lower numbers in europe. the stock has lost more than half of its value so far this year, and, melissa, as you know, this is a company that brought
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in the help of media mogul oprah winfrey in october of 2015 to accelerate the turn around, but, perhaps, we have not seen the results just yet. >> thank you. house hunters international olympics edition. see the digs for the usa basketball team. setting sail for rio when "power lunch" returns. ♪ there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be.
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hello, everybody, here's your cnbc news update for this hour. the u.n.'s refugee agency says isis may have captured up to 3,000 iraqis trying to flee the terror group according to the daily report presented in gee knee that. 12 iraqis executed by isis fighters. a high speed chase in los angeles come to a pretty dramatic ending, not only does the driver slam into the palm tree, but he takes the tree out with him after crashing. the driver vendered and taken into custody, and police say the same vehicle was involved in another hit-and-run chase thursday night.
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coast guard called in to help a man suffering a head injury working off a tanker ship. he fell in a cargo hold, was air lifted to a florida hospital. brazilian soccer legend, pele, is not lighting the caldron because of ill health. pele is considered by many to be the greatest soccer player of all time. we wish him the best. that's the cnbc news update this hour. back to you guys. >> all right, sue, thank you very much. and back to the markets. stocks, as you know, getting a big boost thanks to the big job number. the s&p 500 hitting another high today, and let's chat more about this with our cnbc contributorment peter, i thought we had to be terrified at the fed, but the fed is back in play, not for september, but running out of excuses not to raise rates. what happened to the, oh, gosh, fear the fed, sell stocks trade? >> well, i think you're going to see that at some point next week. today, it's just bout the good feeling knowing that what you're
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actually seeing is you're seeing this wage growth we've only helped the economy, and when you look at it, having a blowout number like this morning and having this second or third time in three months, i mean, this is -- it's showing that the economy is starting to recover, and, you know, overall, that's going to be good for stocks. i think -- >> yeah. >> that's why you get reactions this morning. >> simple as it should be? it should be this, more people are working, the people who are working are making a little bit more money, thus, they'll purchase more products, companies make more money, and low, and behold, a stock, just a future measure of earnings, will go higher. is it literally that simple today? >> brian, i am -- i'm all about simple. i think that people make things overly complicated. it is that. i think that just as you said, with the economy getting better, people will spend money. theon thing that i have not seen is that, those numbers trading in numbers. you think with, you know, that
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good feeling, consumer confidence rising, you'd think people spend money in retail. we have not seen that yet. once you see the retail numbers get better, then the economy's on track. >> i like it. i blame the media for making things complicated. >> i don't know about that. >> i do. i do. i work in it. >> shouldn't be this complicated. >> it shouldn't. it's not today. we like that. it's a friday. thank you. >> thank you. the bond market is complica complicated, bun you understands it well is rick santelli who is at the cme. rick? >> thank you. charted twos and 30s to drive home the point two is screen on this because at least on the surface, it was a good jobs report. the 30s didn't cream because they were keeping one eye in the global economy, and we're not sure if the fed's going to tighten or not, even though some of the moves, especially the curve for it. now, if we look at the
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relationship to bunds, there's a change there. this is what you pay attention to. look at the spread between our ten-year and bunds and history of the value trade, their rates affecting ours, our uprate did not get a significant response from the upside rates in europe. this wideness is the widest since june. pay attention to that trade. if you look at the yield curve again, i picked the five-year, 30s minus fives, you see that it definitely back on the flattening mode, and, at least, we can't tell what the economic cig kaps is anymore, but at least in the here and now, that flat ping means the fed, whether they tighten p before an election or not or september, but investors are more concerned about it, and, timely, the dollar index gives you a really good read. if they tighten the dollar, index is going up. look at a chart since july 1st, it's up today, well off the highs, but about where it was in the beginning of july. draw your own conclusions.
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tyler and the gang, back to you. >> i'll take it, rick. thank you. shares taking off, and ap e apples looking for hackers. two on the radar at this hour. we have the managing editor of recode. up 4%, and, basically, it's a rumor that's being reported because the stock is moving, but there's a rumor alibaba is interested in a bid for netflix. do you buy this. >> >> i think this is very unlikely to happen for a lot of reasons. regulatory issues on both sides in both countries, frankly, right, i think it's going to be hard to pass in the u.s.frankly media and censorship, the way we think of it and the way the chinese government thinks of it, which is regulation, monitor it properly. alibaba has a deal with disney where they ahave a streaming del
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in china, that they shut down. china shuts it down. even the home grown players, it's hard, or even if the partnerships already had with u.s. companies, it's hard. again, buying netflix, i don't know that solves the problem. >> buy a stake? >> buy a stake, more likely possibility is they go on a joint venture in china where they have a joint streaming thing where netflix helps produce and ali baba kicks in money and it's a sanctioned streaming service. netflix said in the last earnings call a week or two ago, they are having troupe getting in china. >> shocker, right. >> viewing it in the wrong way, though? thinking about all china, but a push for alibaba to be in the united states and have the presence here? it has its own picture studio, a streaming offering in china, and it bought another for 4.5 billion in the fall. stacked up. for companies like this, they
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view the china market the way the u.s. views the market, room to grow. there's more to tap into. their service is not up to the standards, but they have the ambition. they are not there yet. again, because of regulatory issues and chinese government it wants to reward up to $200,000 to people to hack products and find bugs. it is a departure for apple from the past. >> it is. it is like a lot of companies, google, facebook, older ones as well, they have done it for years and years, but apple, for whatever reason, had not done it. earlier on in the pc revolution, there were more ibm clones and pcs in the market place. those are vulnerable. >> they were not bothering apple? >> right. >> that's what i always heard. >> nothing to do with the security. >> exactly. >> that's the misconception. >> they were not more secure, just left alone. now with the iphones, it's the
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most popular device with software so they get hacked. they are realizing we need help. >> we had not had a block buster from apple. when will we get one, ed? >> i don't have any reporting on that. not right now. >> take a guess. >> it's not going to be the 7. >> not going to be the 7. >> how about this? let's quantity my this as outside the iphone. >> oh, besides -- >> besides the iphone -- >> when is icloud getting better? >> i think icloud is a big opportunity for them, but -- >> it's chunky. i find it chunky. >> apple excels in making things good for consumers, meaning it's easy to use, you don't have to be a specialist, a hacker, or computer expert. these will be incremental moves. to see the big, big jumps, apple car, apple whatever, right? that kind of thing. >> is the tv the physical tv dead? >> that was something they would -- looking at for a while,
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decided, and we talked about this before, software, right? it's deals, rights, interface. it's not dr nothing to do with the hard terms of what attracts people and, actually, as we reported yesterday, that their next big push is to do better interface, a better tv guide, right? funneling all the apps, netflix and amazon, hulu telling you what's playing where. >> i want to speak to it. have my control understand. >> beyond what you do now? >> now i curse at it. >> there is voice recognition, the new apple tv has the voice recognition. i use it. >> oh? >> i have it on every one. >> it's not great. >> "blacklist," that's what i want. >> they are trying. amazon fire tv does a similar thing. it is the next wave. >> i want that. >> i find it funny the apple tv interface with all the apps is shockingly looking like television. >> yeah. >> right. >> so i don't call --
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i just call the apps channels. >> yes. they are channels. >> download the cnbc app, watch "power lunch," in any way you can. >> multiple times a day. >> twice on sunday. >> the third time is the best time. >> gets better. >> cyber security, hotel bookings, and farmville. good, bad, the ugly in today's trade. plus, what your next guest calls the stupid list of new regulations and why we may not be able to build anything even though both candidates appear to want to. we return after this.
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what's happening here? this is my new alert system for whenever anything happens in the market. but thinkorswim already lets you create custom alerts for all the things that are important to you. i guess we don't need the kid anymore. custom alerts on thinkorswim. only at td ameritrade. ed good, the bad, the ugly, everybody. welcome back to "power lunch," saddle up. first of the good, it's priceline. 1420 a share, up $60 all today.
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taking off after betting the estimate. bad is zynga under pressure after the company forecast current quarter bookings below expectations, and, finally, the downright ugly, fireeye. it is down big by 12%. the company missing revenue estimates while offering weaker than expected current quarter and full year guidance. the good, the bad, and the ugly for a friday. brian? >> all right, tyler, thank you. well, there's one thing clinton and trump seem to have in common, maybe the only thing, and that is the need to fix america's crumbling infrastructure, but there is one big problem. actually, there are hundreds of thousands of problems. the books filled with outdate the laws and regulations preventing anything from getting done anywhere. we have common good founder, american lawyer and writer, well known for work on government reform, rules for nobody, good reading for anyone. before we get in infrastructure,
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there's a stupid list, and anything called that, makes tv, by the way, you're a smart guy. things going on out there you highlight, and not all to do with infrastructure. opening a restaurant in new york city requires permits from 11 -- not 11 permits, but 11 agencies. every hour of emergency care generates an equal hour of paperwork. one school board instituted a no running policy during recess. can either candidate stop the avalanche of stupid rules we are buried under? what do you think? >> well, the answer is not unless they actually go to office with the mandate to clean it out. >> you're point, pea, if you have not read the rules for nobody, read it, but there's so many outdated old laws that are not even -- they are worthless, but if you're a good attorney, you use them as an offensive weapon to stop things like bridge projects for weird reasons, prior marly to shake people down. >> that's right, it leads to
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paralysis, so voters are angry across the country, reaching for pitch forks and all kinds of candidates, and americanings are from theed, but, it's like punching a pillow because washington is a giant -- it's a hairball of accumulated regulations that prevent everybody, even the president, from giving a permit to fix a bridge that's broken. >> people have been talking about getting rid of regulations for decades, why doesn't it happen? >> yeah. i think the narrative is about the government. >> there's always a need for water, make sure you don't -- so what happened is we create d decisions, it's like the constitution, you need a clean restaurant without having a thousand rules associated with it and rules get in the way of doing anything.
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the rules around infrastructure approval, for example, we did a study last year, show that it more than doubles the cost of infrastructure. just the process of permitting. we also found that environmental review is dramatically harmful to the environment. >> what? >> because it prolongs the baht m necks for years. you have all the traffic jams that go on for an extra six or seven years because nobody can get a permit to widen the road to fix it. >> so when you give us these examples, it's clear that something must be done, but can you tie a figure to it to say that this dampens growth by kpx amount or this could boost growth by x amount? >> you can do that in a somewhat soft way because it's hard to quantity my negatives, but basically, what we argued, we launched a social media campaign this week, one of the things we
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see is that you can basically regulate it half price. if you just go in an modernize it, okay, we want to say we want good nursing homes. what makes them work better? hard to go into any area of regulation and not find constant consequences and inefficiencies and dodd frank driving small banks into the arms of big banks because of the cost of compliance. >> i read in the note we focus on results of regulations opposed to the process and so forth. don't you think that most people who offer regulations think they are going to achieve a good result or desirable result, but there's consequences that undercut the result sought. >> our regulatory policy is completely nonadaptable, a cast iron 19th century model. we put cast iron shackles on
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everybody. they intended them to work well, but on t plus 1, there's unintended consequences. >> they have, i assume you would say, built in constituencies that want to protect them. >> right. so all of washington is not about getting new things, nobody gets any new freefrees, but hol what you got. farming sub si ssidiesubsidies, from the 1920s requiring shipping to be on u.s. carriers, raising the price of gasoline by 15 -- >> support of charleston dredging pron dredging project that started in the '90s. there was the bridge needed updated badly. it was, correct me if i'm wrong, that the truckers union sued under environmental reasons because they were holding out for a new contract.
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the truck drivers sued to halt the project or slow it down for environmental reasons so they could get -- >> game it that way. >> leverage to become a closed union shop. >> every home around it, hundreds of them, inspected individually. >> right. right. it's worse than that. the teamsters funded a so-called local environmental group to do it. >> oh. >> so people used all these -- this hairball, you know -- >> in an offensive way. >> offensive way to create things, create leverage, extort people into doing things, but by and large, it basically just hurts productivity, so to your appointment, american competitiveness would be dramatically enhanced, just dramatically, not by deregulating, but just getting rid of stuff that everybody agrees need to be gone and
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modernize regulations to focus on results. that's why bill bradley and i are launching this campaign. >> we appreciate it. author of a few things, but the rule of nobody is common reading for everybody. thank you. >> living large in rio, we are on the ground with that story. >> you heard of the olympic village, but team usa basketball travels in style. the players, coaches, officials all stay here. a luxury cruise ship docked in port where they say they can better prepare. our coverage of the olympic games continues live from rio in a moment. announcer: get caught buzzed driving, and you could do some hard time. woman: craig. knock it off! sorry, mom. announcer: it could cost you around $10,000 in fines, legal fees, and increased insurance rates, and that could set you back a few years. buzzed, busted, and broke
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because buzzed driving is drunk driving.
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welcome back, we are just a few hours away from the opening ceremonies of the rio games. carl is live at the usa's digs. >> reporter: rio's olympic village is home to over 10,000 athletes. 31 tower village was constructed at the cost of $880 million. some early arrivals reported that the accommodations were not quite ready to host.
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#iocluxurylodging trending on twitter as athletes report plumbing issues and one australian basketball player of the dallas mavericks posted a photo of himself fixing the shower curtain in his room. we caught up with some of the athletes in the village yesterday, and this is what they told us about the state of the housing. >> it's okay. it's almost finished, and everything is working out pretty well, and when some things don't work, they fix it for us. it's not as bad as stories say. the cleaning and everything like that, they didn't have time, so they -- they did it now, and everything's fine. >> honestly, our house is awesome, like, i love it. it's -- anything i could have hoped for. happy with it. >> could have. better, of course, but i would say for the stay. >> meanwhile the teams one
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staying on the luxury cruise ship. they hope the correlation breaks and games take off. >> maybe too many buffets over there. what happened to the luxury high-rise tower after the olympics? do we know yet? >> i've not heard. i mean, i will say that so-called legacy issues that we tend to see in olympics, they build something, they don't know what to do with it afterwards is less an issue here because brazil doesn't have the money to power so much concrete so you see images of more scaffolding
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rather than new buildings. >> what's your impression of readiness for tonight for the opening ceremonies and for the games? >> reporter: yeah. i think they are ready, tyler. they had a lot of time to prepare. obviously, a lot of the emphasis is on tonight, but i think next week and into the second week, you're going to get a sense of how beautiful the city is, but also how much extreme poverty just hits you in the face as you travel through the city. that's going to be very difficult to hide. quite frankly, they don't want to hide it. brazil's very intent on showing the true realities of their economic crisis right now. >> carl, thank you so much. tune in for the opening ceremonies of the opening games, 7:30 tonight on nbc. it's bad when you forget your anniversary, but today is the anniversary of people in the
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financial world prefer to forget. can you think of what it is? we'll tell you ahead on "power lunch." ♪ there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be. mapping the oceans. where we explore. protecting biodiversity. everywhere we work. defeating malaria. improving energy efficiency. developing more clean burning natural gas. my job? my job at exxonmobil? turning algae into biofuels. reducing energy poverty in the developing world. making cars go further with less. fueling the global economy.
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we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. let's get the second hour
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started, shall we? here's what's on the menu, more on strong jobs report digging into where the jobs are in america. plus, the health of the high end home market. the lathest numbers signaling. does hollywood have a dangerous addiction the second hour of "power lunch" begins right now. >> welcome, i'm tyler, and let's check the markets with two hours until closing bell of the first week of august. trading strong jobs report fuelling a rally today. the dow and s&p 500 having their best one-day gains since back on july 8th, and the s&p 500 hitting an intraday high. the nasdaq aiming for all-time closing high for the figure time in more than a year. the numbers green. the arrows are up. >> good day for the bulls. headlines at this hour, u.s. oil drillers added rigs for six
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straight weeks in a row. bristol-myers tank 16% on a fail drug story, but rival, merck, rallying. s&p 500 companies reported 70% beating estimates and 18% mised. somewhat ironically given jobs numbers, today happens to be the five-year anniversary of s&p downgrading america's credit rating. remember that move was a huge shock and many predicted it could lead to a big economic downtu downturn. we know now it did not. in fact, we have to look and listen to the stats since then. back on the august 5th, it closed at 11444, and now it's around the 18500 mark, a cool gain of 61%. if you're wondering, the best dow performer since then? home depot, surging 345%. the s&p 500 top performer has done far better than that.
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regeneron up over 800%. the overall economic picture also improves since that downgrade. the unemployment rate back then was a staggering 9.0%. now? it's nearly half that at 4.9%. a much lighter note, if you are wondering, we think you are, that number one song on august 2011? party rock anthem by lmfao, which is an acronym for lmfao. let's bring in two strategists to talk about the markets. kate, i mean, we look to the jobs number, but guess what, as we pointed out, the dow is up more than, you know, 60% since that credit rating down grade, why stocks have not soared, but not stunk either. what do you think is bind the strength today and what we seen in the last couple years? >> i certainly think strength today has been triggered by the stronger than expected job
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market reports, and the reason is that if you look back to may's report, it was weak. june's was strong. everybody was worried there'd be a weak report and the job market sputtered. instead, i think back-to-back strength in job growth says the job market continues to be solid. that powers consumer spending, good news for the economy, but looking back over that five-year period, i think it just says the downgrade was reflection of concerns, about the budget situation then, the fact the government was talking about not making payments on the debt, that didn't occur. it was very short term. overall, yes, government spending has been streamed, debt is higher, but the economy is big aend stronger now too, and that's why stocks gained over time. we think that continues powered by consumer spending and better earnings. >> fact of the matter, the downgrade didn't make a difference with borrowing costs.
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treasury yields today, not too long ago down in the o1 prepondera.3s. does it matter when it comes to u.s. debate? >> great question. we have to get a downgrade again, because it's been a nice run. >> don't push your luck. >> all right. so we -- kate brings up a lot of good points, most important, why we're up today, and the economy has grown, and you know, although we want to see faster growth, we've grown at a comfortable 2% growth rate, earnings grown. there's been a lot of share shi shrinkage, and, oh, by the way. yield at 1.5. we have an attractive asset class of stocks that is more attractive today. with the intraday high today, the yield spread between the s&p pennsylvania 00 and ten year is still 60 points. stocks look attractive here, and i think we're seeing an inflection point in the earnings cycle in the quarter, and we're
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going to see positive earnings growth, we'd have positive growth, x-energy, positive revenue growth in the quarter, second half better than the first half. >> kate, in today's market, mentioning what we see today in terms of rotation and bond markets. we see a huge spike in the regional banks, specifically, is there hope for the financials? do you think we hit the turning appointment now that we have seen sort of a light at the end of the tunnel overall for earnings growth and seems there's evidence that a hike could be actually on its way. >> well i think we hit the blow point in terms of earnings growth and expecting we're going to see positive earnings growth this year. with the dollar flattening out, those are things that led to the negative earnings on year over year basis and second half looks stronger than the first. we agree with that, a catalyst for stocks to move higher. in terms of banks, yes, the fed
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will continue to look at the data. i don't think today's report compels them to move, but it's likely that if the economic data continues to be good, that we see an interest rate increase, but it probably won't be until the end of the year. i think investors don't focus on when rates go up, but more improving environment, and even if rates stay low. >> aren't -- remind me, frankly, i forget. the debt has not been reupgraded, has it? >> tyler, great question. no, you're right. we're at the same place. >> why hasn't it been, and in light of the economic performance and the decline in the deficit, why hasn't it been, and what would happen if it was? >> the same thing that happened when it was downgraded. >> nothing? >> not a whole lot. not a whole lot. so, you know, to the extent kate reminds us they made a downgrade in the middle of the having the conversation about having a budget shut down, sequestering, and everything to deal with.
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the s&p looking at the national election coming up in november, that has them concerned. i don't know. they don't react quickly. we're in a better financial footing than five years ago, and they probably have enoughtous to take us up, but to the extent, tyler, does it matter? we proved it does not. silly it's not been taken back up? i think that, you know, that's obvious, but at the end of the day, you focus on stocks doing better as well as economic data. >> going to the credibility or perhaps lack of among some people of the rating agencies. >> that's a different segment. >> art, kate, olympics start today. we're up big. go home. pet your eagle, thanks very much. bristol myers shares falls sharply after failing a drug trial to treat small cell lung cancer. look at shares of developing
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merck developing the cancer drug. there's a hold on merck, buy on bristol-myers. it's not working out today, tony, good to see you. in terms of the stocks on either side are those with the news if. >> merck should be up, bristol should be down. that's 18% of market cap taken out. it's really been shot. the stock's been shot. i think you would believe that the story today in lung cancer or this drug would never again raise its head among cancer saying there's no hope bristol-myers would be in lung cancer in the future. my sense is that's incorrect. there's trials on going that would i think agree with the thesis. i think, melissa, it seems a little aggressive on the downside for bristol-myers.
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>> do they lose though, looking at the potential sales and market share that could be lost. leering had a figure out estimating $1.5 billion in revenues for this drug, if for particular drug could be lost in nine years. the loss in market cap today for shares of bristol myers, does that work out in your math? >> it's a great question, also. it's similar. let me explain. it's been our view that combination therapy and lung cancer will be the therapy of the future, and we're not quite there. trials run today by bristol myers and others that have combination therapy. merck as well, but they are earlier in development. if we were to take that longer term view as you alluded to, my sense is the market's going to change dramatically in favor of the combination therapy. bristol seems to be in the lead
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there. makinging an assumption the tri work, and frankly, based upon data at the recent cancer meetings in june, i argue that is high. >> you're saying buy this? >> absolutely. >> bottom line? >> absolutely buy the dip. there's more to the story that's not known, and as a reminder, we'll see more data in the european cancer meetings in october. stay tuned. >> more data, but that does mean necessarily that this drug, that that data says this drug's future is not dead? >> i'd think it will. i'll tell you why. it has to do with the full data set. what you've seen today is bristol myers used a diagnostic picking out a population of patients who have small cell lung cancers you alluded to and picked out the population of low expresse expressers, those who barely express a marker for which the diagnostic could see. they have patients who express a larger amount of that marker on
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the tumor cell much like merck has done, and the question then becomes, what would the market do then? would the market actually reverse course, or would it actually defend bristol at that point? my sense is you'll see more data. i don't know that bristol's going to be able to regain all share lost in shock today, but the other point i want to make is, and i think it's very important, certainly merck is going to gain share, certainly much more share than we thought, quite frankly, the street thought in nonsmall cell lung cancer. >> you're not changing your buy rating. what would make you do so? >> it would have to be a situation where when we look out in the future, a lot of combination therapies were to fail. combinations today with the two drugs that bristol has today that are called check point inhibitors. that's a comment to me that lung cancer bristol-myers wouldn't
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have an opportunity in that particular market. >> tony, thank you, appreciate it. tony butler. >> thanks, melissa. donald trump set to reveal an economic plan on monday, and today, he released the name of the economic team. can these guys -- >> diversity right there. >> all guys. reverse his slide in the polls? luxury real estate sales, which markets are hot, which are not? we return after this.
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zrudonald trump releases hi economic plan monday, and now we have his team. hey, john? >> reporter: donald trump's going to try to pull out of this tail spin he's in now by turning to economic policy with the speech of the detroit economic, and let's look back at trump's economic plan so far. proposed a tax cut late last year. that includes a top personal rate at 25%, top business tax rate, 15%, and he was eliminating state taxes all together, and this adds in the estimation of the tax foundation after growth, $10 trillion to the economy. now, in this new plan, we expect them to pair it back somewhat, rereleased names of the
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advisers, names like paul johnson, ham, and steve moore on the team. it's not exactly the a-team of republicans presidential economic advisers, one who was on the a-team, greg, who was the head of the council economic advisers under president george w. bush. he said donald trump will not get my vote, some of my republican friends think there's nothing worse than a return to the obama policies with hillary clinton for another four years. but they're wrong. he talked about trump's temperament, opposition so free trade which he said is disquali disqualifying. he has work to do before he wins over the mainstream of the republican economics fraternity, guys. >> thank you very much, appreciate it. another election poll shows a big lead now for hillary clinton. the wall street journal nbc poll for july shows 47% for hillary clinton and 38% for trump.
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that is a nine point lead over trump. let's get more insight on this poll from fred yang who helps design and conduct polls at hart research. good to have you with us. >> thank you. >> i wonder whether this is hillary gaining or trump losing support? there are a lot of people who believe that while the media and some people in the political establishment are being very critical of mr. trump for anything he said about the khan family and not endorsing mr. ryan monamongst other things, b there's a lot of voters that made no difference, didn't hurt him. do these polls say this is hurting him? >> a pollster answer, it's a little bit of both. clear from our polls and other polls that the democrats are a good convention, and our poll, in particular, tyler, shows that hillary clinton increased her support with democrats, so she's getting close to 90% of
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democrats so that's the how she gained. there's a part of the poll and reality where trump's had problems, and one of the interesting things from our poll are that while hillary clinton is gaining with democrats, trump is not doing as well as he should be with republican lean constituencies like republicans, like white voters, and in particular, like white college educated voters. >> tell me about the numbers there. what do white college educated voters, men and women say? >> fascinating thing, in 2012 in the exit poll, in an election that mitt romney lost by four points, mitt beat barack by 13 points of white college educated voters. in this survey, hillary clinton is beating donald trump by seven with white college educated voters. there's a 20 point gap between where trump needs to be just to be in mitt's position four years ago, and, again, mitt lost that
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election. it's not just about college educated voters, tyler. what white noneducated voters, mitt won that group by 26 points. donald trump is winning that group, but by only 13 points. i know, you know, all of us especially political professionals look at subgroups, try to parse it out, but what's going on now with trump is not just one segment. it looks like it's across the board. >> we were talking yesterday with larry, and we asked him about undecided voters. my hypothesis was there was fewer of them than normal this time because these are familiar individuals. they have been around in the popular sort of mind for decades, frankly. but there are fewer undecided. are there? >> there are. there are. the one continue knthing to thae also never had an election. mrs. clinton's ratings did improve from a month ago, but she has a 53% negative.
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never had an election in which we had two presidential nominees who are this negative with the elect electorate, and those with the undecideds, it's making this election for 2016 a little bit more unpredictable than the past. >> fred, it's brian. whatever happens in the election, it's going in history as changing campaigning. trump, the way he campaigns, win or lose, changes the game. will this election also change polling and research? has this changed everything? >> that's a great question. i would say that every election actually changes polling whether it's an election that is as unpredictle as this one. just by the sheer advance of technology of polling is always changes. what i've gone at appreciation for conducting our survey with public strategies for nbc news and the "wall street journal", and other polls is ironically,
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the more polling out there, actually, i think, sometimes it's misleading. >> all right. >> or taking down a wrong path. >> leaving it there, fred yang with hart research. have a good weekend. >> thank you, you too. okay, what's the popularity of pokemon go have to do with the job market? hopefully something because that's what our segment is oncoming up. discover how a lexus master craftsman turns an ordinary experience into an extraordinary one. get great offers at the lexus golden opportunity sales event. lease the 2016 es 350 for $329 a month for 36 months and we'll make your first month's payment. see your lexus dealer.
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welcome back. if we're taught anything, people love video games, but someone needs to create and design those games, and that's where the jobs are. kate rogers is live in salt lake city, utah. hi, kate. >> reporter: melissa, games like pokemon are fun, but they are serious business. now, industry experts say that job growth gets 10% in the years to come. that means companies like wild works where we are here in salt lake city are ready to hire. look no further than pokemon go for proof of the public's rabid appetite for gaming. it hit 71.3 billion in 2017 and hit 9 billion in 2020. this means game designers, coders, and artists are in
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demand. companies like salt lake city based wild works are part of expansion. >> there's considerable growth ahead in the gaming industry. i don't think you can discount the pc as a standard platform that continues to bear fruit, but with the advent and accessibility of smart phones and larger screens, we'll continue to see increase in the mobile market. >> with females compromising half of gamers, a growing number of game makers like wildworks are looking to hire women. not an easy task in a male-dominated industry. >> it is difficult to find programmers that are trained and have experience in the industry that are women. >> reporter: the degree is not necessarily needed but helps in salaries within the industry are very competitive. software developers need a median of $100,000 in 2015 and multimedia artists made $64,000
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a year, and also it's an industry in need of women. we'll tell you coming up on "closing bell" about an effort to get girls in the gaming industry while young. back to you. >> thank you. stocks rallying on a stronger than expected jobs report, but oil a casualty. down 1% as the dollar strengthens. we will go live for the closing trade after this. announcer: todd's a great guy. i mean, look at him. what. a. sweetheart. attaboy. wait, todd, what are you doing? how totally selfish and un-toddlike of you. come on, todd, come on, man.
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welcome back. the gains we have in the market, off the back of the stronger than expected jobs number. the dow jones higher than .90%, and on the nasdaq, that is the one we are watching closely. it if it keeps this level, it's a new all-time closing high, so 52.20 right now. merck up 8%. of course, we told you about bristol-myers woes boosting merck. doing well with the yield curve, and american express and goldman doing well. look at the bottom of the skreep here in the red. verizon as well as chevron, exxon. they are losing in today's market. oil markets closing for the day. let's go to the imax.
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>> it looks like there's a slight loss on our hands. came back from session lows, finishing under $42 a barrel, but as you mentioned, the strong jobs report this morning made oil traders would make oil rally this morning. it didn't. a rate hike, that's why commodities suffered today. the bear sentiment in the market all this week, the recounts coming out only confirmed that. we did add more rigs in the united states. for the weak oil, basically flat, the month, dropping 10%. back to you. >> thank you. let's get to sue for the headlines. sue? here's what's happening at this hour. video released today in the fatal shooting of an 18-year-old suspected car thief shows the police firing into the vehicle and cuffing the blood covered suspect in a foot chase. this is the first release of the fatal police shooting ush a new policy that calls for the video to be made public within 60
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days. carl icahn declining to join donald trump's financial council because he's focusing on developing his own pac focusing on reform. french president hollande wastes no time pushing his country as the potential 2024 olympic host. a series of private meetings for dinner with ioc president. and new york yankees' first baseman is reportedly set to announce later today that this will be his last season in baseball after a 14-year major league career, but his last couple years have been ravaged by injuries. he's completing an eight-year $180 million contract. that is the news this hour. back to you. >> and he, i, suspect, will have a nice career in broadcasting. >> absolutely. the calls already going in. >> thanks, sue. latest readings on luxury
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home prices show a small increase compared to last year and jobs beat today could push prices higher, but we know real estate is local. which cities are seeing big gains? where are we seeing big drops? we have the numbers. >> well, not only do more jobs benefit housing in general, they signal a stronger economy and stock market which really juices that luxury housing market. stock market volatility caused a drop in luxury values in q1 of this year, but prices recovered slightly in the second quarter rising 0.8% annually. they define a home as luxury if it's among the top 5% most expensive homes sold in a city. wealthier buyers are sensitive to stock swings because they are more invested in the market, and that is especially true in luxury tech markets. now, luxury home prices fell 11% in san francisco and 4% in
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bellview, washington where tech, of course, rules. wall street, luxury prices in the hamptons, new york's swankiest vacation venue fell, but sales rose 20%. that is according to miller for the report. politics, of course, play into luxury prices as the presidential election coincides with the housing market's slower season this fall. luxury prices in washington, d.c. have been softening down 4% in the second quarter. politics overseas, however, add to prices in markets favored by foreign investors. miami baeach, luxury prices soared at 22% in the quarter. back to you guys. >> stick with us as we ask the question to luxury homes lagging in san francisco, way are other markets that are seeing a boost? the president and ceo of marcus and miller joining us as well as diana. thank you for joining us.
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you make the point you look at the health of the city's office real estate market as sort of a backing as to what's going on in the residential real estate market. house -- what's what you see jive with reports in the drops we see in san francisco and seattle? >> good afternoon, thank you. as indicated. luxury home market is really a thin indication of the broader real estate picture in the united states, and it moves counter to what we see in the broader economy and broader housing market and commercial real estate because of cyclical moves and particular quarter like the stock market or the currency moves. having said that, there is definitely a correlation between job creation across the spectrum of real estate. when you look at where jobs are created, surprisingly, markets like dallas still top the list. of course, los angeles, new york, and other markets that may be surprising to the viewers are
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philadelphia. boston is still a pretty good job creator. orlando, florida has come back with a lot of strength. inland empire in southern california, not typically thought of as a luxury home market, but certainly an education of the broadening of the economy creating demand for commercial real estate as you indicated. office space, shopping centers great examples, and, of course, apartments because the rental market is so strong. >> i'm not surprised by philadelphia. our parent company based there, new yorkers move there because it's simply cheaper. to identify the one city that's going to surprise everybody over the next five to ten years, can you pick one out? >> it's really hard to pick one, but i'm going to actually go with new york because there's so much -- >> it's like winning the soccer title. go on a limb here. pick a secondary city. >> i really believe a market
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like denver, portland, oregon are great examples where you are seeing diverse economy and attraction to a lot of young adults, austin, texas, another great example, where people move in, great educational -- >> i would argue there in those markets, if i could, i would argue those markets are having a big inventory problem, and we look at places like new york city, for one, if you choose there, that's an oversupply of condos and luxury condos, and we're hearing real cracks in the manhattan luxury condo side. port land, yeah, huge demand for people moviing out of san francisco, but there's no supply in the regular market or luxury market. on all spectrums, you need to see more for any of this to move higher at least in sales. >> that's definitely true without a doubt. my comments were long eer term, and metros have such strong long term prospects for attracting people, but housing shortage you're speaking to is the chronic issue.
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companies can't find workers that can afford local housing market, in fact, look at the bay area, for example, we added 300,000 jobs within the last three years, and we've only added about 30,000 housing unites so there's a chronic shortage. the bay area just one example, so that is definitely a natural barrier across the board because we can't ask why we can't keep up with economic growth. >> thank you your joining us. >> thanks for having me on the program. facebook hoping to get in the real estate business in a big way with a proposal of 1500 apartments and hotel on a lot near the campus. according to wired magazine, facebook's landlord status is a way to help out over 6,000 new hires moving into one of the priciest and overcrowded zip codes in all the land. tech firm's proposal, 15% of the residential portfolio set aside
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for low income families. now, guys, in a point we live in corporate housing. >> corporate housing. >> company dorms. show your badge to get in. no ladies after 10:00, tyler. >> and can they track your whereabouts? >> they do now anyway. "suicide squad" opens today. the reviews? it's not great. why is hollywood addicted to superhero movies? that's next. mapping the oceans. where we explore. protecting biodiversity. everywhere we work. defeating malaria. improving energy efficiency. developing more clean burning natural gas. my job? my job at exxonmobil? turning algae into biofuels. reducing energy poverty in the developing world. making cars go further with less. fueling the global economy. and you thought we just made the gas. ♪ energy lives here.
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this weekend, "suicide squad" premiers. can it overcome all the negative reviews? we are joined from los angeles now, and, julia, there's so many of them. >> reporter: there are so many of them, and some reviews are so nasty, but "suicide squad" is off to a massive start. the film pulls in $20.5 million from thursday night's screening, so nearly double previous august record, and so far, audiences give it a 74% like it score on rotten tomatoes, and it's the top august preseller in fandango's 15-year history. despite the fact that the film has 27% critics rating on rotten
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toe natos with some reviews so bad, they prompted a fan to start a petition to shut down the rotten tomatoetomatoes' sit there's a lot riding on the movie. it's the third installment in the reboot of the comics universe with eight more films in the work between now and the year 2020 including wonder woman that launches next year. this after man of steel and batman and superman doing well in the box offices, but they fell short of the $1 billion. some compare that to the marvel series which has had for more movies, but four crossed that billion dollar milestone. now, time warner, jeff, and the time warner ceo said wednesday on the heels of reporting declining second quarter revenue and earnings, he's hopeful suicide squad has the highest opening ever. the question is whether negative reviews and potentially negative word of mouth ease into the
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film's overall take after what looks like to be a huge weekend and whether it impacts the reputation of dc comics as a whole and all those movies which it has coming down the line. back to you. >> julia, thank you very much. stay with us as we chat more about this. what is it with hollywood's obsession with heros? our senior movie analyst, good to have you here. >> great to be here. >> talk about how and why bad movies make good money and sometimes super money? >> it's about the branding. if you have a batman versus superman, that's a really irresistible con secept and "suicide squad" with will smith and margot robbie , and at comescore, we have a preact listening to the social media conversation, and for this movie, it's been off the charts for weeks. i think it's about the branding, the allure of the characters,
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but there's the flip side which is the critical take on the movie, and for this one, it's not been good, but it doesn't seem to matter. some movies are made of teflon. this is one of them. >> first two lines of wall street journt's review. in a word, "suicide squad," it's trash, in three words, it's ugly trash. no one seeing the movie is reading the journal anyway. do reviews matter at all anymore? >> only one review that matters, and that's from the peer group. >> well, rotten tomatoes got 27%. >> that's not the peer group, but it influences people. they see the score so maybe in a weird way gets people to say, i want to see what the fuss is about. if it's trash, i want to decide for myself if it really is that. by the way, i've seen the movie, i enjoyed it.
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i think when you're coming at it from a critical perspective, you are tough on the movie. the most important critics are the dpfan bios anoys and girls this up, almost 900 million at the worldwide box office so you want to make good movies. >> but you want good movies, and right now, palm, the bar is higher than ever to get people out of the house. so many options at home. >> absolutely. >> even people who don't pay for cable tv have infinite options for what they watch at home. i think that is a very reason why we see studios look so much to the comic book characters because they are familiar, there's an awareness and excitement that get people out of theaters, but i think that arguably they would have done better, would have topped a billion dollars had the reviews been a little better. clearly, opening weekend you get the fan boys and people who are curious to see whether this
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movie is as bad as reviews say and are curious to see those stars playing superhe roars, but i think that there's a question about -- >> hollywood, it seems to me is fascinating because of things they turn into franchises, right? >> that's what it's all about, having a long term plan for the brands and these characters, and, for instance, out of batman versus superman came wonder woman. the buzz on her is huge. justicely, but julia's right. if you're going to create a franchise, it better be good because, you know, marketing can buy you a great opening weekend, but a great movie buys you long term success. >> got to leave it there, guys -- >> this is what we're seeing with the franchises, though, they are more like tv series to get people invested to make sure like marvel, you see one, go back to see all the movies. >> all right, julia, thank you
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very much. >> absolutely. >> have a good weekend. >> thank you. stocks hitting the weekend with big gains. you might have heard about the jobs report thing earlier today. tyler came in much better than expected, but as stocks go up, gold has come down in a big way today, so is it the discount to gold as being the ultimate buy or sell it if you own if? we'll do that, street talk, and we're back after this.
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time for premier, starting coverage with an outperform. titled the report, quote, helping hospitals cut coroners. get it? kind of cute, actually. says the health care i.t. purchasing company helps to improve patient care and notes a recent chair in ownership of premier stock should better align the company with the customers and quote multiple growth avenues and growth of 10%. a $39 target on premier employment represents 17% upside or not. >> the title helps hospitals have better care and therefore fewer people die? >> yes. may not need -- cut coroners.
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>> yeah. second stock, u.s. steel. upgrades it to a hold from underperform. the analyst concerned that x may trade lower in peak earnings but the company deserves credit for recent cost performance and stability of longer term contracts. this is a call of some may say is late because the stock is up 232% this year. >> wow. >> up 50% in just the past month and now rated a hold. >> if you had an awards show and i think you would is this a surprise or comeback stock of the year? >> up there, definitely. >> no "suicide squad." this stock is down 30% over the last year. management gave lousy guidance last night and said they're seeking alternatives, a possible sell. they have a $64 target. yeah, the guidance cut was there and expected.
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and they note that the hedge fund eliot management is, quote, agitating inside the company and that the company hired a boutique investment bank and the analyst of needham said a sale is highly likely. however, other way downgrades it. so really this is a gamble if you believe the needham call on whether or not the company gets sold pretty much period. that's it. it's a bet. >> fourth stock, five below. i picked because brian loves pokemon. the craze is as strong as over. ubs says it helps the shares. they have accessories if you look for them. that pokemon related. they say investors don't appreciate the lift to give five below and news of a brooklyn man the first pokemon go master having caught all 142, 3 more exclusive to certain regions abroad. >> good for him. stock's still $2 above the consensus target.
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something to be aware of. bermuda based insurer, raising the price target. reiterate it is outperform. goes to 38 from 36. about 8% upside and pay 2.4% dividend yield and earnings estimates raised. up 1.7% today. with that, we wrap up. let's go to "trading nation." gold tumbling on the back of that big number. gold is down a little bit. boris, phil. boris, first to you, gold being hated on today. is it a dollar story? is it a fed story? something else? >> it's a fed story. you know, i have been unrepentant on gold a long time but today's not-farm payrolls changed the dynamics. the report was unambiguously
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positive. all the data was very good and looking at the data right now, it is not impossible to believe that the fed to consider a rate hike as early as september. certainly, the odds are now by december, a 75% hike that the bet comes up and the moment of rates going up, gold goes down. that's the dynamic. >> are you breaking, boris? is this the bachelorette and breaking up gold? >> i am taking a pause. i think gold certainly right now due for a correction and may come down to 1,300. watch the data set out of the u.s. and continues to improve and retail sales are strong, you have a much stronger number. i was only the belief to hold off because of the political situation and even that is not a case. >> pauses rarely work. are you a buyer or seller of gold today? >> no. i'm optimistic on it. i mean, the fed, although they have -- we saw the selloff cap in, we have the dollar index rally and interest rates now
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pushing up here. the vaelt that december fed hike i don't think it happens at all. too disconnected from what's going on in the global interest rate market. 13 trillion already in government at negative rates. so i think what happens next week, you've got foreign buyers come in. they start bidding up the debt again. see interest rates collapse in the u.s. and gold prices that's the way to play it. flow of funds will happen back into gold. >> okay. boris taking a buyer. you are still a buyer. thank you very much. our final thoughts, check please, coming up after the break.
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before the cmo thought to himself, ♪ ♪ "yeah, i can do that." and then thought to himself, "no, i shouldn't have done that." [ crash ] and doctors with real-time data at their fingertips asked, "how a man your age could do this to himself?" before any of this, cdw orchestrated a point of care solution using the lenovo x1 carbon yoga with intel core processors. connected health care by lenovo. orchestration by cdw. my opinion is i don't remember a summer games with less interest in the u.s. or less anticipation. london, eagerly watched. before that, china. >> beijing. >> huge, huge games. even athens back to 2004 had more interest than this. i'll predict -- you disagree?
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>> i do. rugby is back. it's the greatest olympiad ever. >> i predict they will be a big surprise hit. there will be some compelling story as there always is to come out of it. >> one of the horses in equestrian. >> women's soccer or volleyball. people will watch. >> opening ceremony tonight at 7:30 p.m. nbc. we are watching the nasdaq very closely heading into this closing bell. we recall just a couple of points, 1.5 or so, away from possibly closing at a new record high so this could be a nail biter as we head into that close as to whether or not to hit that. we have hit a new 52-week high on the naz democracy and surpassing the closing record high of 2015. >> we talk about stocks and commodities the i'll give you this. this is a good story, i guess. >> i love it. >> despite the price moves, nothing is worse than lean hog futures. over the past, seriously, 30 days, lean hogs collapsed. took hogs. >> the prices? >> they're not fine.
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they're being slaugt erlged to bacon. cheaper bacon is on the -- >> more bacon for you! >> yum. >> futures down 30%. >> yum bacon. thanks for watching "power lunch." >> and "closing bell" starts right now. have a great weekend, everybody. see you next week. hi and welcome to "the closing bell" to clez out this week. i'll kely evans at the new york stock exchange. >> i'm bill griffeth. hello there. >> hello. been a busy day. >> putting the s&p in record territory. the nasdaq's doing very well today as well. thanks to that stronger than expected july jobs report and coming up we'll tack about what the report says about the economy and whether that makes it more likely that the fed will raise rates sometime this year. >> the old debate. >> there you are. >> bristol-myers


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