tv Power Lunch CNBC September 16, 2016 1:00pm-3:01pm EDT
>> i know. it's good. thank you for having me. have a great weekend. >> thank you. >> thank you very much. >> congrats on your success. >> appreciate it. >> keep us informed en what you're doing as well. eddie george with us. following the markets now, everybody, have a great weekend, thank you for watching the program. "power lunch" begins right now. i'm brian sullivan. buckeyes going 1-8 the rest of the season. i'm kidding. here what's on the menu. big banks under fire. wells fargo investors losing money again today as the stock slides. the question is, will other big banks also get caught up in their own scandals? twitter's touchdown, shares surging after last night's nfl streaming debut. should the rest of the tv world be afraid or a one hit wonder? speaking of touchdowns, we're talking about the new marshall plan. new york jet wide receiver brandon marshall is in the house. coming up, their big win in buffalo last night. "power lunch" kicks off right now.
and welcome to "power lunch." i'm melissa lee. we're winding down what has been a very volatile week with losses across the board. the dow and s&p 500 scratching out tiny gains on the week. for today's session, though, dow and s&p down by half a percent. the nasdaq is a standout for the week, up 2% on pace for its best week in more than two months. that's mainly thanks to apple's 11% rally so far this week, pulling back a little bit down 1% right now. we're also tracking oil down about 2% at this hour. it is at a five-week low. >> welcome, everybody. i'm tyler mathisen. here what else is happening. iphone 7 hits the shelf. it is flying off of them. ceo tim cook greeting elated customers, reports that some apple fans in hong kong have been buying the phones and then selling them for twice the price. exxon's accounting under investigation by new york's attorney general. the wall street journal says the probe focuses on why exxon is
the only oil firm not to write down the value of assets amid a price plunge. and another unicorn dies. rico reporting that mode media is shutting down. the lifestyle publisher used to be worth a billion dollars, not anymore apparently. welcome to "power lunch." profitable two hours ahead. and why do i say that? we have our friend marcus lemonis, the profit, ceo of camping world, with us for the two hours. we'll have him involved throughout. we begin with the markets. quadruple witching day on wall street. the final day we can talk about, the ten s&p 500 sectors. bob pisani. what's happening, bob? >> it is a rare event, a new sector in the s&p 500. before i get to that, let me tell you about the banks. having another tough day. tough day over in europe. take a look at the european banks, deutsche bank, u.s. authorities say they want $14 billion more in fines. that's not a typo. down 8%.
does that sound like a lot to you? $14 billion. let me show you how much it is. deutsche bank has a market capitalization of $18 billion. they're saying give us the whole company at this point. remember, though, they have set aside 5.5 billion euros to pay for that. that's only a fraction of what the u.s. authorities are look for. u.s. stocks also u.s. bank stocks also to the downside today. citigroup, downgrade over at goldman sachs. wells fargo, horrible week. you see the whole group down about 1%. back to the new sectors here, real estate investment trust reits getting a sector of their own. there is going to be an 11th sector at the close today. there is 10 on the s&p 500 including financials. reits were in financials. no more. they were 20% of the financials sector. now going to be a separate sector, an 11th sector. 3% of the s&p 500. reits have done very well this year. 6.5% on the upside. why shouldn't they be. they're beating the s&p. low long-term interest rates have helped. and the average repays a dividend of about 4%. that's worth a lot in a low
interest rate world here. so here's the weightings for the s&p. this is what it looks like after today. tech, the biggest sector far and away the s&p, 21%. that's why apple is so big now. you see the other ones going down, consumer staples about 10%. industrials are about 10%. look at everything else on the other end of it, on the lower end here, energy is only 7% now. used to be 14%. look what it has done to itself, gone down. utilities, materials, telecoms, reits, all of them equal. apple folks want to tell you something, 3% of the s&p 500, 14%, guys, of weighting in the s&p tech sector. that's why apple moved the entire index this week. >> i heard the name apple once or twice on this network this week. thank you very much. if it is friday and close to 1:00, that means the rig count numbers are out. they're out and up once again. baker hughes reporting that two net new oil rigs were added. not a lot, but, again, we have
seen this trend, week after week for about two months now, every week we see another or two or three drilling rigs added as production starts to climb back in the united states. after a summer slumber, volatility is returning to the market in a big way. next week's fed meeting could add more. the s&p 500 down about 2% over the past month. but your next guest says despite a pickup in near term risks, the bull run should remain in tact. joining us, liz saunders. everybody seems to be worried about something except for you. why ware you still off the mystic? >> there is always something to worry about. i think the bull market is in tact. but we noticed we're in a more mature phase, we'll see more frequent bouts of volatility and pullback. the reason du jour is not just
fed policy. it is the realization we're losing the efficacy of quantitative easing and it is not a global force ed ad infini. we may have to move to other sources of opportunity for both the market and the economy. i think there is something that the market has to digest. i don't think it kills the bull market. >> what about bonds? we had a lot of talk earlier this week at our conference delivering alpha about concerns about a bond bubble. where are you on that, and where do bonds play in an individual portfolio right now? >> so, my colleague kathy jones runs the fixed income side and they really haven't changed the view that this is effectively -- essentially a lower for longer type of environment. though we have been more cautious, i do believe there is probably legs to this pickup in yield, it is not the beginning of a major move higher in yield.
we don't see the growth and/or inflation risk that would suggest this is the beginning of a significant move higher. but i think we are coming up off of those extreme lows and probably will see a bit more to go on the upside. >> so yields on the long side, you say, are essentially going to be capped. when it comes to the dollar, how concerned are you about the dollar's gains because just in the past month, it is up by more than 1% on the dollar index. could that be a head wind going to the end of the year for what you say is this in tact bull market? >> so we think the dollar at this stage in the game is probably more in a trading range. i think yield -- interest rate differentials will define whether you're on the upper or low end. it is absolutely important. because moves in the dollar are at the heart of whether financial conditions are loose or tight, which the fed is keying off of. in an environment of a strengthening dollar which tends to cause credit spreads to widen out a little bit, causes problems with earnings, weakness in the equity market, higher volatility, all of which has the effect of tightening financial
conditions, which the fed backed away from certainly recently they become more dovish, the dollar sells off, financial conditions loosen, it sort of opens up the opportunity for the fed to become hawkish again and this is this, you know, policy loop that we have been in for some time and we don't think we get out of it. so where the dollar sits, even within a trading range, i agree it is important. >> liz, this is marcus lemonis, when i think about that is happening in the overall credit market today, it feels like the credit market is still pretty robust. out into the market today and tried to upsize or add-on or new offer, there is not a lot of pricing resistance, not a lot of really resistance much at all. are you seeing that same thing or am i seeing something different? >> i think we are at that point. but i do think the backup in libor is worth watching. the reasons for it happening, of course, are money market reform. nonetheless, it is circular in nature. chicken and the egg. it has crept up enough that certain corporations are going to start to be bit by that. that's the one area we're keeping a close eye on within
the credit markets is -- >> are you borrowing in your business? >> i am. i'm in the market as we speak right now. i did not see a lot of head wind in the marketplace. so even when i tried to change terms and look for no soft calls or changes in pricing or upsizing -- >> are you doing that because -- >> because the market is allowing it. >> because the market is allowing it, not because you think the market is about to turn. >> i'm doing it because the market is allowing it. when i think about corporations across the country, we're thinking about leverage today. we're thinking about what the market is allowing in terms of leverage. one thing i will tell you is that the market doesn't have amnesia when it comes to understanding where leverage should be. you're not seeing leverage back to the 5, 6, 7 times like you did five years ago. so conservative leverage with good ratings are still giving you the ability to borrow. and the spreads aren't expanding. >> this is the problem, you're doing it, and she's doing it, and tyler's doing it and i'm doing it and everybody is doing it millions of times over, when
things turn, all of a sudden, we're -- the big risk is, aren't we going to have everybody sitting on all this leverage that you cannot unwind. that seems to be the big fear. >> i don't think so. >> the fed fear -- >> i think that's wrong. we're doing it because we're choosing to grow our business and make acquisitions and open new businesses and do things of that nature. >> not just refinancing the debt? the idea is you're supposed to build something that puts people to work. that's what the feds hold gold. >> there is only two reasons people go into the credit market, to take a dividend or do it to put more cash on their balance sheet to make strategic acquisitions. if the leverage is the principle guider of whether people can do it or not, then leverage is fine. if we come back to the reality of saying three times, four times, that's the limit, you're okay. i don't know if liz is seeing that as well. >> you know, i'm not terribly worried about leverage in the system. i think our natural need to be attuned to that say function of the muscle memory of the financial crisis and, boy, we don't want to get back into that situation again. but i agree with you. and i think there has been a
rational decision on a lot of corporations part, even if they're cash risch ch to borrow. i think if we started to see that turn, i think that would be a positive next life for the economy. >> at some point, liz, i take your point that you see the lower for longer sort of reasoning. at some point, this 30 plus year bull market in bonds is going to end, isn't it? >> it can end, but it doesn't have to end with a bang. with a huge surge in yields. it can end because you don't go back to the lows that we saw, the historic lows on the ten-year. there is two different types of finales to a long bull market. >> doesn't have to end if borrowers fundamentals stay the same. if the fundamentals change, it ends. if they stay the same, why should it end? >> liz ann saunders, great to have you on the show. >> the nfl and twitter scoring
big last night. what does this mean to the future of legacy tv? should tv be worried? plus, wells fargo ceo facing ai grilling by congress over its aggressive practices. the stock lower once again today. the question here, will wells drag other banks into its mess? all that next. with this level of engineering... it's a performance machine. with this degree of intelligence... it's a supercomputer. with this grade of protection... it's a fortress. and with this standard of luxury... it's an oasis. introducing the completely redesigned e-class. it's everything you need it to be... and more. lease the e300 for $549 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. we're drowning in information. where, in all of this, is the stuff that matters?
it is about -- or even about one bank. we still have a problem on wall street where the giant financial institutions think they can make money, they can build profit models around cheating the american people. >> that was democratic senator elizabeth warren of massachusetts on "power lunch" yesterday, weighing in on wells fargo's scandal. the stock lower again today, down more than 6% on the week. the house just announcing it is calling on ceo john stumpf to testify later this month. stumpf will be grilled by the senate next tuesday. so will wells fargo drag other banks into its mess? edward mills is senior financial policy analyst at fbr capital markets. good to see you. >> thanks for having me. >> what i thought was so interesting about your note, everybody is so focused about wells fargo, the impact, the tarnishing of the reputation immediately. longer term, you think that this could actually have an implication on regulators and wells fargo's ability, for instance, to get capital plans
approved. how regulators view it and see car plans. there is all sorts of ramifications down the road for this one company. >> i think for wells fargo specifically here, one of the big things about dodd frank is a lot of the regulations are subjective, and for a reason. they didn't want to have a hard and fast rule. so you do need to make sure you have a good relationship with your regulator and wells fargo has had a bit of a special status among the too big to fail institutions out there. they were the ones that were the good guys, didn't have the capital market centric business model. next month we have to see if their living will is going to be deemed credible. next year we go through ccar, you have seen other banks that had missteps with regulators, and then just gets that much harder on the subjective side of a lot of these regulations. >> all right, let's focus on the implication on the broader industry, ed. there are a lot of calls for increased regulation, particularly surrounding ironically incentive-based
compensation. do you see that having a greater likelihood of actually passing now that this has happened? >> yeah, this scandal or this enforcement action is a political gift to regulators. we have seen a real change here in d.c., where financial products should not be sold, they should only be bought. and when you are kind of dealing with any consumer, their best interests always has to be kind of the driving force behind that. we saw that with the department of labor coming out with a fiduciary standard earlier this year. as i mentioned, regulators are working on an incentive comp rule, this is a different political reality in d.c., where best interests of the consumer has to be the driving force and you have to really look at incentives, gone are the days of the trips to hawaii, gone are the days to being able to kind of sell whatever you want in terms of financial -- >> we should make a distinction about what happened at wells fargo, a problem in the consumer
bank as opposed to wall street as -- be that as it may. always in these kinds of circumstances, mr. mills, people call for the scalp of the ceo. if the united states were japan and thank goodness it isn't, the ceo of the company probably would have resigned. i would like to get your thought on whether he needs to, or how he can show that he's got his head on this, and is contrite about it. i want to get your thought on that. >> stumpf does not need to resign. going into the hearing next week with the senate banking committee and ultimately with the house financial services committee, he really has to take personal responsibility. it might be about separating that chairman from the ceo role, announcing there is no bonus this year, similar to what jamie dimon did around the london whale, or even working for a dollar a year. he has to go into the banking committee next week and say, which executive has been fired or has been penalized, what comp has been clawed back, because if he tries to make this about rogue employees, which has been the part of the initial
response, that is not going to work because ultimately what the senators are going to try to make this about is there was a toxic culture or it is too big to manage. >> marcus, does the ceo need to go in a state like this -- a situation like this? >> in any business where there is activity that just is flat out wrong, somebody has got to go. it starts from the top. if something like that happened in my own business, i would expect to be held accountable for it. i want to go back to something that ed said where products should be sold, should be bought and not sold. and i would like some clarity, ed, on what you mean by that. are you saying that we should not be developing products in banking that add value to consumers lives or we should not have products that have commission oriented to them? >> yeah, so, that's not a personal opinion, that's more of the kind of theme that i'm picking up near d.c. >> what is your opinion? i'm curious about your opinion. >> -- in d.c. here that think that when the incentive kind of allows the person to receive a commission, acting outside the best interests of the consumer,
that is a bad product. >> so my -- i guess my opinion on that, tyler, would be that ceos responsibility to make sure there say culture of transparency and we're developing and selling products that add value to consumers. the fact that we pair employees and incentive so that everybody isn't -- >> was your first move, let's just say you were mr. stumpf. would your first move have been to go to the board and offer your resignation? >> no, my first move would have been to find out exactly what happened. and to really come back with a transparent analysis. i would probably acknowledge if i knew that there was a sales organization doing these things, of course, you have to resign. i guess you wonder why you're even there anymore. but i don't know if there has been enough swiftness in determining how did it happen. wasn't like five accounts were opened. a think a million and a half. >> jim cramer sat down with him, great interview, but stumpf was very guarded. he was going to be. on your show, the profit, sometimes you got people, maybe two partners, right?
one partner is whining about the other partner. it is his fault. i didn't -- he did -- you're, like, shut up, run the business. stumpf kind of did that with the board. well, there is a board process. well -- he said that numerous times about being a board -- like i'm not really running the company. that's how it came across to me. >> my response would have been, this is a big problem -- >> and you're the ceo. >> we deceive people, i'm the leader, i need to get to the bottom of it and if ultimately that means i have to leave, then that may be it. >> last word, ed, does a cloud hang over the financials as a group at this point in your view? >> i think for right now we're in an era where there say lot of populism, which kind of really is a cloud over financials overall, absolutely. >> all right, ed, thank you. ed mills of fbr. up next, wreaking havoc, havoc must always be wreaked, nothing else can happen with havoc, it must be wreaked, on the streets of southeast china. that's havoc. we call that havoc, right?
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34% rally over the course of the next 12 months to $19 a share. the firm believes that the rest of wall street is in underestimating the potential for the action video cameramaker to profit from the drone market. shares up for a third straight day here, gains of 15% so far week to date. but a lot of ground to make up. back over to you. >> dom, thank you. china's midautumn festival is a time to gaze at the moon, reflect, get in touch with your inner self. but some residents in southeast china given a chance to be touched by something else, that, a giant inflatable moon set up for the festival. a huge balloon. and look at this video. high winds from the typhoon sending the moon on the loose. rolls across the road, to a construction site, and then rolls over pedestrians and a car. the good -- watch out, bike lady. >> move. >> go! here is the good news, because it is a giant inflatable balloon, it was soft and fluffy and everybody was okay. >> looks ameboid.
>> smart word. >> wow. >> there you go. >> looks like an ameboid. >> managers delivering their next big ideas and fear about the economy and global markets. how concerned should you be as we head into the month of october? we'll discuss that next. they may want the latest products and services, but they demand the best shopping experiences. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations, anticipate expectations... creating new ways to engage at every imaginable touch-point. it's a new day in retail, and together, we're building the store of the future. digital works for retail. let's talk about how digital works for your business.
hi, everyone. i'm sue herera. here is your cnbc news update for this hour. at a campaign event in his new hotel in washington, d.c., donald trump finally admitting president obama was born in the united states. but he falsely accused hillary clinton of starting the birther controversy. >> hillary clinton and her campaign of 2008 started the birther controversy. i finished it. i finished it. you any whknow what i mean. president barack obama was born in the united states, period.
>> hillary clinton speaking at a black women's symposium in washington called on trump to apologize to the president and the american people. she also accused trump of offering a divisive vision of america. and the largest cruise ship to sail the northwest passage docking in new york city today. the luxury cruise liner crystal serenity is nearly three football fields long and 13 stories tall. it can carry more than a thousand passengers and 650 crew members. all you need is about $22,000 to be one of those passengers. that's the news update this hour. i bet the buffet lines are really long. >> i bet they have several on that ship. >> one would think. >> sue, thank you. >> you're welcome. a check on the markets now, after such a roller coaster week, hard to believe the markets across the board are up on the week. though we are seeing a pullback today. the dow jones industrial average down. the nasdaq, though, has been the winner for the week as technology has really helped that index out.
the nasdaq is down 16%. look at semis. we're talking about apple for the week. its stunning gain of 11%. well, for the week, semis are up 4%. look at the components, particularly the apple suppliers like sky work solutions as well as cirrus logic, each up 13% this week. >> this week's delivering alpha conference not only flush with big ideas, also showcased a bit of doom and gloom about the economy and global markets. >> you can look at the environment and i think it is very dangerous. i think it is a very dangerous time in the global economy and global financial markets. >> it has gotten extremely difficult to invest on a quarterly basis. >> there is only so much you can squeeze out of a debt cycle. and we're there globally. >> should investors fear a storm as we head into the market's scariest month which would be october. let's bring in hedge fund manager orrin cramer who thinks there is a bubble in the bond
market. he's also one of the most influential boundlers for democrats and candidate clinton. welcome. good to have you with us. >> thank you. >> let's start there, we'll get to politics in a minute, let's start with an awful lot of hedge fund managers seeing danger, danger, danger, danger. is there that much danger out there from where you sit or are they merely reacting to what has been a very challenging time in their particular businesses that charge a lot? >> so there is a thousand percent chance it is a difficult time for hedge funds, right? that's a given. in terms of markets i would say what you guys know, which is that the first principle of investing is people have to find something to do with their money. if we didn't have television, we didn't have bloomberg, we all know that with risk free rates at the lowest level in 5,000 years, we say equity valuations have to be elevated.
and then if you look at the global outlook, it is clearly anemic, the risks are to the downside, try not to be political, but, you know, donald trump said yesterday forget about his economic speech, you know. he said we're going to cut back aid to germany, to europe, to japan, to south korea. so that's a directive to them since we're not going to be providing them military umbrella anymore unless you pay for it, you should be -- that's what we call a risk factor for markets. so i can't say anything about the next few months, but it doesn't strike me as a good time for people to go out and buy equities. >> do you believe the volatility pickup in the last few days has been -- we have been attributing it mostly, not us, but our guests, to the federal reserve meeting next wednesday. it has been suggested to me by some that perhaps trump closing in on many polls is the reason for the increased volatility,
your thoughts. >> you know, i've never really been able to understand when the market does what it does, why it is doing it. i would say in terms of the politics that at least my experience is that if there is something like what would trump's presidency mean, there won't be political -- what would it mean, it tends to be something the markets don't focus on until, like, the week, two weeks before the election, before that, it is off, you know, people's screens. and it may be that people are concerned about the fed meeting. you know, when john hillsenrath writes fed insiders expect to take no action at this meeting, so whoever that wall street journal person is, i never found that person to be accurate at any point over the last 20 years, if that's that people are getting agitated about, it is --
i'm sorry. >> i was just going to say, when you have so many guys out there, at delivering alpha and other places, warning about the potential risk to the downside, saying that this is going to end very badly, there is a bond -- at that point, doesn't it sort of take the wind out of -- does it lessen the downside. it is not an unknown risk. everybody is talking about it. at that point, does it become less of a risk? >> so there may be only five things in life that paul singer and i agree on. okay. but, you know, when he said this is a bond bubble, he's not saying it is going to burst in a month or in six months. he's just saying, by the way, it can't get lower than this. and if, in fact -- >> he's shorting it. he is -- that's a stated position he's shorting the bond. so it is going to unwind. >> for the general investor, if he's wrong in his short, because rates are going to go even lower, you really don't want to be in equities in the world in
which they are providing even more monetary stimulus, if this is possible. >> you mentioned you thought it was a thousand times harder for private equity to be in business today. did i hear that right? >> it was hedge funds. >> hedge funds. why do you believe that? >> private equity, by the way, it is better. the money gets locked up for 12 years. >> black stone now and their -- >> right. >> why do you believe that for hedge funds, why do you believe it is so difficult? >> that's -- well, you can look at it two ways. one is, hedge funds were sort of this niche business until 2000, 2002. mostly just wealthy people. 2000 to 2002, people owned the internet, tech, got crushed, hedge funds avoid that, hedge funds outperformed the market during that period. you should never invest on the basis of what happened before. but for the next ten years, people were chasing hedge funds
because they outperformed during that bear market. last seven years, and they're great hedge funds out there, the last seven years in the aggregate, hedge funds have had terrible performance relative to the market. and people say, why am i paying the fees for that? and then if you have the public pension funds where there is also the politics, the hedge funds, that's called wall street. wall street is out of favor, and, by the way, underperforming and i'm getting flack. so -- >> you're saying the hedge funds are -- harder than it was before because the bar was set high for them? >> the notion that i will produce strong absolute returns in any environment was never really viable. i don't know how people believe that. but that was never viable. and now also the business changed because there is much more competition than there used to be. >> right. >> we would love to have you back to talk about public pensions in particular. an area with which you have a
tremendous amount of experience. and what low interest rates are meaning to those funds, we're a little bit out of time. i can't let you get away without asking you why you think your favored candidate, hillary clinton, is having such a hard time distancing herself from mr. trump. >> you know, there is this tendency to extrapolate, like, based on two-day trends, so it is regrettable that you got pneumonia, it is regrettable that there was in the minds of some people a conspiracy theory which is -- we know she's been unwell forever, we know that's not true, but it got -- for a couple of days she's off the trail, et cetera, trump did better over a three-day period, you know. i would say a somewhat longer view. >> you worry she'll lose? >> i've always considered it,
but the country is in a very angry mood. i've always -- i've never considered it riskless. there are people who always assumed, of course, she's going to win, and by the way, you know, she doesn't really need money. she obviously will have enough money. and, no, i think it is always been a risky proposition. >> all right. >> period. >> orrin, thank you very much. we'll have you back. orrin cramer with boston prove dent. twitter live streaming the nfl last night, delivering a little boost for that stock today. but is it about to deliver a big and maybe bad moment for the rest of tv? we're going to tackle the twitter tv conundrum when "power lunch" returns.
the stock and is cable tv having its newspaper moment? let's bring in anthony declemente. great to have you with us. >> hi, melissa, how is it going? >> the clarity on the stream was pretty amazing and amazing to think you can go to your twitter stream, not go on the internet, figure out where to access it, you can click easily, it comes up. all that is great. twitter paid, kreblcorrect, for rights to stream this? >> yes, they paid for the digital rights. >> how do they monetize this in order to offset the costs? >> it is true that they paid roughly $10 million so that works out to roughly a million dollars a game, we think. it is advertising, right? but the key avails, the ad inventory, the national feed, the spots in between the content was sold by cbs last night. so twitter did have some small advertising streams to put against the $10 million, but it was pregame, post game, and then there was some promoted accounts
promoted tweets inside of the twitter feed that was running. so your question is the right one. it is over a longer period of time, if you're twitter, youtube, yahoo! did this last season, is there enough in the way of montiization, because, remember, it is one revenue stream that is advertising and not getting the tv ads, not getting an affiliate feed stream. is there enough there? >> does this discount its core business model which counts users daily active users, monthly active users? they're saying we'll put this thing up and sell ads on a platform where you don't need to have an account on twitter. you don't need to pay for cable tv for that matter. we'll do that and compete against every other platform out there that takes in ad dollars. >> what twitter is trying to do is trying to exploit a gap in the market, a gap when it comes to live sports. many of the free users to your point, active users are sports
enthusiasts. and they're looking for those sports enthusiasts when they're outside of their home, number one, or two, they don't pay for basic cable tv. so that's a part of the market that actually benefited from twitter's game last night. i would go back to the point that the media companies have the tv rights, the broadcast rights, locked up through 2021, 2022. is it possible that twitter could go and bid for those more expensive rights, could pay for the production of the nfl games which cbs paid for last night? it is possible, but they would need a more healthy revenue stream to put against that cost. >> anthony this is marcus. i think one of the things i want to get some clarity from you on is are they ultimately just trying to show their capability? for me, it is really a way to bring users there and maybe keep them there for the night and maybe have a retention model,tw show their capability to stream live video and say to their
investors, their board, their employees, we have the ability to do this. see, we just did this. >> it is a great point. they did it. and, you know, if you're a media company, if you're disney, fox, cbs, disney who just invested in bam tech to have this capability of live streaming sports, your eyes are open this morning because twitter succeeded and executed on delivering a very clear live stream. >> that alone is worth the $10 million. >> let's point out also, twitter did not pay a penny as far as i can understand it to produce the broadcast. >> true. i just said that so -- >> huge expense to bring -- to get the signal out, so on and so forth. that's a different thing. i wonder, anthony, and marcus, who just had had a brilliant experience with the college football game at camping world sponsored a couple of weeks ago, florida state game, who is at risk here? who is threatened by what went on last night?
anthony? >> let's start with the winner here. the winner is the content owner, the nfl. they found a way to extend the value of the nfl into a pocket, to an audience that was previously unreached, right? >> somebody else they can charge for the rights to air their product. >> that's right. so, you know, is there a loser here? for there to be a loser, you have to make the successful argument that those ratings, that viewership, that eyeballs are moving from the tv broadcast of twitter to your iphone. and my view is that the sports fan, i'm a jets fan, so i had a similar experience to what eddie george just described last night, i watched it on the way home, when i got home, i put the game on cbs and watched it on tv. so i think sports fans will move to watch the game on the best available screen. >> you paid a lot of money for a 70 inch flat panel and you won't watch itt eon a four inch iphon. to tyler's point, the winner to this was everybody but twitter.
was it not? the nfl won because now you can watch it in your car. they win. right. the iphonemakers, data companies, verizon, you suck all that data as you watch -- >> we spent five minutes talking about twitter and so is the rest of the world talking about the fact they streamed the game, so for a nominal investment, we're talking about it. >> i think what twitter needs is is right now for wall street, for analysts and investors, is they need to reaccelerate the growth in the number of users, and the engagement of those users. >> will this do that? >> we actually at nomurra, we look at downlook activity of the twitter app and time spent and engagement. going into last night, there is no change. so wasn't like anybody was gearinging up for this game to watch it on twitter. i think a lot of people discovered it in the middle of the night, especially here in new york, a lot of jets fans, people found out about it last night. it wasn't a big ad campaign
around it. what is interesting is, i'll be looking at this data set, the next days and weeks to see if the press and media coverage all of us talking about it, et cetera, drives engagement back and forth. if that's the case, twitter has brought users an engagement and can leverage it for the times otherwise -- the times outside of just the nfl stream. >> okay, anthony, we got to leave it there, thanks so much. anthony declemente. let's check on the markets of the we're sitting head much at session lows, dow off by 14 point140 points. the financials took a leg lower in the past half hour. s&p financials down by 1.2% now. whether you watch the game on twitter or on tv, or a little of both, as i did, though i didn't use twitter, i used my fios app on my phone. you were probably watching brandon marshall do his thing. the new york jets wide receiver
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discussion about twitter and the nfl game and for somebody who did not watch it on twitter, for one good reason, he was on the field playing in the game and he joins us now and that's new york jets wide receiver brandon marshall. i was at the game last night. >> you were there. >> i was there last night, a friend of mine got his jersey retired, i was there. pulling for the bills. but when -- on there with the bills. >> i didn't tell you that last night. >> i only did this for you. >> when you went down, every jet fan in that building let out a groan. you got up. how is your knee? >> super sore. >> but you're okay? >> i'm okay. i'm okay. this is part of the game, man. >> a big hit. >> it is inevitable. the nfl has 100% injury rate for all players. so it was my turn. >> and you're okay now. >> i will be okay. i'm sore today. >> you're here because you're a friend of marcus. you have a business. you must be -- you think about
your career after the nfl. i assume because any injury like the one you had yesterday could be --melissa, you hit it on the head. on the way over here, i was on instagram, sending out a picture, didn't have time to put the caption in. i wanted to say, this is the reason why you don't wait until after you're done but do it while you have the platform to start the things you want. for me, it is fitness, it is mental health, and it is also a couple of other things. >> brandon and i have been dialoguing for about a year now about the importance of really taking business seriously today while they're playing, while there is an income stream. whether it is him or other people that are in the sports community, how did they invest? you own a small business in chicago, and you started that, and you reached out for some help, but you don't need it. >> no, we do. i was thinking about business and being a entrepreneur, the thing i'm learning is you never stop learning. there is always something where you can get better at -- and
what i learned is the number one thing that i've learned too surround myself with people that are smarter than me. i got to be honest, i'm still young. i don't know it all. but i'm searching. i've been in harvard business classes and courses and really helped me out a lot. so i'm just continuing to grow and taking it day by day. but we are doing good. we're profitable in our second year. >> what is the business? >> fit speed, athletic performance. we keep 20, 30 spots open for guys like you guys, our weekend warriors. >> training for a triathlon. >> athletes from ages 7 to -- >> 7. >> who connected to whom first? >> i don't remember. i just like -- i literally watched all seasons in, like, two days. and i reached out to him on twitter. and he responded. it was the greatest day of my
life. >> i want it ask you about the topic du jour in the nfl, head injuries. announcing $100 million initiative to do further research. you certainly saw the hit on cam newton a week ago. you saw some hits on tyrod taylor last night, he was taken out of the game. how dangerous is this game? can the game continue to be played at the level of intensity it has been famous for and reduce the amount of dangerous head injurys? >> i'll be honest with you. only time will tell. i know one thing, five years ago, six years ago, we didn't have this discussion. five years ago players didn't know how serious a concussion was. i remember my last year in denver, i had a concussion, but it was my contract year. and i stayed in the game. and i stayed on the -- >> because of that. >> extra three weeks when i was
spo supposed to be in bed. i stayed there because i didn't know, and, number two, i didn't want to lose money. but now if i knew that then, i would have been on the sideline. >> brian say rugby player. >> not anymore. >> you were. would the game be safer with better helmets or with no helmets because then people wouldn't -- >> tyler played, it was leather. it was leather and everybody wore gray and white. >> if we have no helmets, there wouldn't be any football, man. the technology is getting better. but you can't -- it is a collision sport. >> but to tyler's point, rugby does this, sometimes you guys are doing this. >> the thing that makes our game so -- >> i wasn't hugging you, i was trying to -- >> i was cool with it. >> i hate to use that word, it scares a lot of people, but that's the thing that makes our game great, and why we have so many viewers, the nfl had 110 million people tuning in for the
super bowl 50, a record, 120 million. >> so just to wrap it up, part of the thing i wanted people to understand is that regardless of where you are in your business career, you really have to be thinking about life after what you're doing today and i think brandon is a good example. there is plenty of other examples. we hear the horror stories about people getting big nfl contracts and blowing -- and there are those cases. i think it is people like brandon or other folks out there, eddie george is a great example of really helping change the way people think about it. >> and let me say this, this is for my fellow players out there, what i've done is i've taken the money i made off the field and invested into our companies like fit speed, invested into our nonprofit project 375. my salary is sitting in the bank. but when you get those endorsement deals on the side, take it and invest and have some fun, but do it in a way where, you know, you're learning. >> i need to apologize to you. as one viewer on twitter points
out, we should have gotten you a chair because your knee is all banged up. and we're making you stand up. i didn't want people to think -- >> thanks for coming on. >> appreciate it. >> let's take a check on the markets here. we're at session loews moments ago. off the session lows, dow down by 126 points. s&p down by .7%. we're watching the financials very carefully. if you can throw up a chart on wells fargo, that is approaching session lows here as the house is going to call ceo john stumpf to the hill to testify. much more "power lunch" straight ahead.
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i'm melissa lee. here's what's on the "power lunch" menu. a big moment for investors and the fed next week. apple cooking once again. iphone 7 fever in full effect today. has the tech giant got its mojo back? and trump's road to victory. new numbers laying out his path to the white house. the second hour of "power lunch" begins right now. welcome, everybody. glad you're with us. i'm tyler mathisen. let's get a check on the markets. one day up, one day down, stocks
lower across the board. today, we're just off the session lows. losses would be worse without intel, which is hitting a 15-year high today. the company raised the sales target thanks to stronger than expected pc demand. i'm brian sullivan. in your headlines also this hour, the house financial services committee looking into wells fargo sales practices and it will hold a hearing later on this month. hillary clinton's campaign calling donald trump's actions on the birther issue, quote, disgraceful. earlier trump said that clinton started the birther controversy herself back in 2008. and united technologies will deliver 150 pratt and whitney engines this year, down from an original goal of 200. well, it is five days left. i know you're counting. until the big fed decision. next wednesday, we get their rate call. new date wa out today on the fe and what that might mean for the economy. let's bring in steve liesman who will break it all down for us as the wall -- i won't sleep all
weekend, steve. >> seconds ticking by, 22, 21. markets sleeping these days with one eye open. while the conventional wisdom pretty well decided, the fed isn't hiking next week, investors nevertheless remaining wary that they could have it wrong. some chance that the fed surprises. how much chance? take a look. stands at a low, a near low 14.4%. not sure why that's such a long-term, should be a five-day. the contract -- the contract lukewarm data has baked out the chance that the fed acts next week. chance of a rate hike had been as high as 30%, result of the hawkish rhetoric in jackson hole, including comments by fed chair janet yellen that the rate hike is strengthening. financial stability, eric rosengrant concerned about the idea that keeping rates too low, too long, were creating bubbles, commercial real estate, pointing out we're no longer in a crisis,
we don't need crisis rates. the third quarter rebound, 2.8% in the cnbc wrap it up, data rebound in tact. you don't know you got to get out ahead of where the economy is going because there are long legs to policy. here is the case for the hole, the data has been lukewarm at best. not much inflation. we got this morning still tepid inflation numbers. the question about where is full employment, how many people can we bring from the sidelines that could still work and cause -- and not have wages spike up, and finally, it is not priced into the market as i showed you in the fed funds. what seems likely at this point is the fed that does not hike but signals more definitively it could be raising rates soon. maybe sometime this year. >> how does the fed factor in the fact that rates have climbed the long end -- rates climbed, nothing has gone on, the dollar is up 1.25% over the past month. >> i think the fed to some extent believes the ten-year has a mind of its own and the two-year behaves very closely along the lines of the fed funds
probability. those moved together. the short end came back down, 76, was as high as 84 around jackson hole, eight dips off that. the ten year has not. it remains up. you want to watch that for signs that the ten-year, if anything, is concerned about inflation is the main concern. >> there is a show, it is bravo or something, called naked and afraid. do you know that show? they send people out in the wilderness and they're naked. >> and afraid. >> that's me. i feel like i'm sitting by a slowly fading campfire and i'm naked and afraid. is anybody in my camp? >> no, the metaphor holds. you're on your own. >> naked, afraid and alone. >> all lots of mosquitos. >> i want to defend your point of view. i held it and sort of still have this one eye open idea here. if you look at the parts of the fed and the things that they have said, janet yellen saying it is strengthening, eric
rosengren saying we should be tightening. the parts don't add up to the sum. >> i held the same view. i thought they were -- i thought they were going to raise in june initially. then thought september. but i am now completely of the view that this is a fed that just simply temperamentally does not want to -- will look for any excuse not to raise interest rates. now i think it is the election. >> let's bring in tim seymour. are you naked and afraid as brian is that there is that possibility in your view perhaps that september could be it? >> i'm still trying to overcome the whole visual of brian doing that in the wild. but, look, i think what is happening with markets and my view on the long-term or the long end of the curve is that we're undoing the brexit you fora. it ended up being a risk on event and for equities it was and also for fixed income. ten year at 180 is probably where we're going in the short-term.
much of the long end of the curve is driven by the boj. we're learning that the limitations are happening in other places first, boj meets the same day as the fed next week. if they disappoint in terms of did -- maybe applause, but if they do less on qe, i think their long rates go higher. this is foreign flows out of the u.s. bond market and going back home. >> if they do less and the fed does nothing, you see 180 in -- sights to 180. >> first of all, 2% ten-year doesn't change anything. we were significantly higher at one point last year. we're unwinding a place we all thought we were going to be. >> it would imply the dollar goes up significantly. wouldn't that be a head wind. >> the dollar is sideways for 15 months now, and current account surpluses in japan and the european union and fed that i think can't do that much and downward pressure on the dollar. >> can i ask marcus the question. forget the silly rates we're talking about, what is the cost
of capital like on the street? >> low. >> it is cheap. so if i want to start a business, i can get cheap money right now. >> well, you can get it cheap if you can get it. >> it is all about getting. it is not about what the rate is. >> can you get approved for it? >> that's the question. >> that's the hard -- >> that's part of what i talk about the cost of capital. >> so my question -- >> how much equity do i have to give up, all that stuff. >> where could you borrow at today? >> me specifically? >> probably 275. libor 275. with the libor flow of about a point. >> okay. >> so would an increase in the fed funds rate of a quarter point, then another quarter point, would it materially change anything you're doing in your business now? would it change the things that the company -- your portfolio companies are doing because they might see their lines of credit
go from x plus prime to x plus plus prime. >> a business like camping world, yes, because the interest expense on the inventory is a real operating expense. not an ebitda. but the smaller businesses, no. because the amount of inventory is -- i don't want to call it minh mu minimus but it is small. >> your immediate cost of funds goes up to l plus 325 automatic. >> or l moves. >> what would be more material to the business of camping world? a material change in interest rates, the borrowing cost, the cost to carry enveinventory, or barrel increase in the price of oil that raises gasoline to 250? >> this will sound terrible, but for my earnings, it would be the rate increase, not because of the consumers, but because of my actual operating expense. gas does not effect rvs and
interest rates do not affect -- >> gas does not? >> it does not. people don't drive that much. >> this is what -- >> thank you. when gas collapsed two years ago, we were saying, hey, listen, it is not going to matter that much, you're an idiot. it just -- i'm sorry, it just -- it is not -- >> didn't you see the study? that proved you were correct? >> no. >> academic study put out showed the decline in infrastructure and investment in the oil fields almost precisely offset any increase in spending from the consumer from lower oil prices. >> okay. i need to dip that study and send it out to 100 of my closest enemies. >> that's interesting, though. >> tim, thank you. >> my pleasure. >> tim seymour, fast money trader. >> tim, go buy yourself an rv. >> first thing i'm doing i get out of the studio. on the road. >> i was only naked and afraid in a camping world mock-up in the store, a little -- >> that's even worse. >> no, you weren't. no, you weren't.
get away from my brain. >> to the bond market, rick santelli. rick, join in here, buddy. >> well, i'll tell you, if you look at the markets, it is fascinating. one day of two year, you can clearly see the hotter inflation on cpi ten months of core, 2% or higher. took a toll. one week charge shows two years aren't near the highs of the week. matter of fact, a lateral week for them basically unchanged f you look at one day of tens, though, they had the same bounce in yields on the hotter than expected data, but a one week chart clearly also shows they're not near the highs of the week. however, we are up two basis points on the week on tens. this doesn't sound like a market that necessarily is looking for near term fed activity, but it is looking for potentially ongoing activity by central banks, but maybe just not solving the problem. if we look at fed funds for december, forget percentages, keep something simple in mind. when the chart price goes up,
there is less of a chance of tightening, goes down, more of a chance. so, yes, we're going down a little bit as you see on the month to date chart, but still higher than we started them on that speaks volumes in my opinion, not to mention the stronger dollar is probably the most compelling idea that some are nervous about neither fed tightening implications. tyler, back to you. >> rick, thank you. to dom chu for a market flash. >> watching lions gate shares after getting up towards their session highs so far, about 5% of the upside. stock is rallying as the company's blair witch horror movie reboot hits theaters today. the original blair witch movie cost 60,000 bucks to make in 1999. grossed almost a quarter of a billion dollars worldwide. box office.com says it expects the later blair witch movie to bring in $20 million this weekend. shares down 5% over the past six months, down a third year to date, so if we talk about the blair witch, guys, we'll see if we can get that same kind of magic, maybe a little doubtful,
this time around. >> back over to you. >> dom, thank you very much. shares of apple pulling back slightly today, but still an amazing week. apple stock up 10% in the last four or five sessions. and today the iphone 7 officially goes on sale. can the good times for apple keep rolling? we'll talk about it when "power lunch" returns.
welcome back. time seema mody. i would like to draw your attention to the mexican peso, which just hit an all time low against the u.s. dollar. now, a couple of factors working against the mexican currency so far this year, the drop in oil prices, weak economic data and the u.s. presidential election. in fact, citigroup in august wrote shah shothat shorting thes a hedge against a trump victory. down 12% against the u.s. dollar this year. >> thank you. the iphone 7, if crew didn't he hear goes on sale today. josh lipton is in palo alto. >> it is fair to say that expectations for these new iphones were relatively tempered, but the new devices pack in a lot of new features and functions, so early this morning we did check in with fans to see what they're most excited about. >> i think the waterproof is one of the best features i'm looking forward to. and then just that they added
the other speakers since they removed the headphone jack. >> i have the first -- the first watch. and i like it so much that i am ready to get the second one, see what's new. >> make improvements to the camera, looking forward to that. particularly the low light performance, because i'm always taking pictures in the dark. >> so there is a lot of talk about that new camera, which apple does say is the best one it has designed. and then also that improved water resistance, that doesn't mean you take this new phone snorkeling, but does mean you don't need to worry about spilling some water on it. and finally that one fan saying she's here for the new watch, that also goes on sale today. remember, starting at 369 bucks. that new watch, which i'm wearing right here, is billed as faster, it is brighter, also water resistant up to 50 meters and comes with built in gps. g guys, back to you. >> he's got a 5. >> thanks, josh. >> knocking my phone. >> thank you, josh.
the apple fever over the iphone 7, a couple of versions ahead of my current phone, is a big deal. the stock is up more than 11% this week, but down slightly today as apple getting its mojo back. let's bring in edmund lee, managing editor at rico. marcus making fun of the fact i downgraded from a 6 to a 5. i think i'm only one in america. there say real reason. leg bend, in the jeans, with the bigger phone, you sit down -- >> that's an important part. >> put it in your back pocket then. >> then i'll crush it. >> okay. >> anyway, moving on. >> please. >> so we are talking about apple. >> not as it relates to you. >> let's move on. >> apple in general. >> melissa is angry. we must move on. is there actual hype around this iphone 7? do you think it will be a big seller? >> the hype was tempered. i think apple either whether by accident or design tempered expectations and they exceeded
it and that's why it is up 10%. i think it was a smart game they played. these are incremental improvements, good improvements, it is certainly a better phone, not a huge wow. >> is there -- how much of this also is, not taking away from apple, the fact there are basically -- there is two -- if there were two car companies and the one car company's car kept catching on fire, you might go to the other carmaker. >> samsung phones catching on fire helps. >> how much is that less am and more samsung's woes? >> i think that's actually less of a factor here. i think there are a few things that came into this, apple said, we're not going to give you sales figures the weekend after like we usually do. guess what, they're going to sell out, we know they're going to sell out. that's -- that was a great way to set expectations, right? at the same time, they're not making maybe quite as many phones for the weekend push as they had in the past. so all of a sudden, the word gets out, not everyone gets one right away. they're going to sell out.
of course, you know, stock -- >> now that we have the phone out, can we see the -- even if they are incremental, the incremental changes to the phone, see a glimpse of what apple see as your future. augmented reality with the great cameras, can we now see a phone down the road if it is not the 8, the 9, the 10, whatever it is, that is going to have the new features? >> yeah. i think -- i actually think next year the 8 is going to be the big, big, in terms of hardware improvements, software improvements. i think the bigger picture is they want to train apple customers into upgrading every year. they don't want you it wait for the big wow phone to come before you upgrade. they want you to upgrade every year. that's why they have the upgrade plan. you can bring in your old phone, we'll give you the new one, you pay that that plan. >> becomes annuity. >> you become a subscriber to apple. >> i think that's smart.
>> much smarter and in that way, less of a hardware company and sort of like a -- >> reoccurring cash flow model. >> more predictable, better for their business. at the same time, big picture, where is the car? where is the big vision product that we didn't know we needed before. >> a year ago, i went to sun dance, a movie filmed exclusively on an iphone and i was blown away because they didn't tell us until after. you start to see production value go up dramatically. people doing live videos and things like that. >> they changed the infrastructure of all kinds of businesses. an example i like to bring up, . would not have exited without the iphone. that's the impact apple has had. not just a piece of hardware it creating entire new economies of startups. >> what can we expect in terms of the average consumer's additional spend, their share of wallet and buying the phone. that's -- >> that's where it keeps going
up. the other part of the thing is when you upgrade your phone, you lose your phone, break your phone, not as big of a deal anymore, all your data, all your photos, presumably backed up on the cloud, the cloud costs money. that's another monthly cost. that's what they want to get you -- >> the new headphones. >> want you to be regular customers of everything apple every month. >> good discussion. thank you. >> new phone for brian next time. >> just for you. a stock losing 80% of its value today is coming up, in the good, the bad and the ugly. donald trump tries to end the birther controversy once and for all. will it work? will it help him? that's next on "power lunch."
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ah, false alarm. hey! you guys are gonna scare away the deer! idiots... providing global access for small business. fedex. all right, welcome back. it is 2:25 in the east. thank you for being with us on cnbc. the dow down just over 100 points. but it is well off session lows. now for a look at some of the individual stocks that are on the move, let's go to melissa. good, bad and downright ugly. >> what a group of stocks we have here, brian. we started off here with the good. we're just talking about intel a little bit in the apple discussion. intel is higher by 2%. this after raising its third
quarter revenue outlook to 15.6 billion from 14.9 billion. the chipmaker announcing signs of improving pc sales. that, by the way, is a 15-year high on that stock. on to the bad, deutsche bank, u.s. listed shares fell over 9%. this after the justice department asked it to pay $14 billion to settle several mortgage securities, investigations, the two parties are now negotiating over that. and it is an absolutely ugly day for nova vax plummeting 82% after a phase three vaccine trial failed to show results in prevention of a lower respiratory track disease. it still hopes to have a path forward. the week can be a very long time in presidential politics. a lot has changed since last friday. latest read on the race for the white house from top political analyst larry sabato. we'll get the closing price on oil next on power. ♪jake reese, "day to feel alive"♪
the 27 leaders are hoping to reinvigorate the eu. five dutch masterpieces dating from the 17th century were returned to the netherlands from ukraine. this follows a few months after the secret services recovered the paintings. they were stolen more than ten years ago and they are valued at about $11 million. actor mark wahlberg has ended his pursuit of a pardon for assaults committed when he was a teenager. he spent 45 days in jail for his actions. back in 2014, he submitted a pardon application met with harsh criticism. and it is the 50th anniversary of the metropolitan opera at lincoln center in new york city. it opened back in september 16th, 1966, and that night you saw lady bird johnson, she was on hand with ferdinand and imelda marcos of the philippines to see anthony and cleopatra starring price. an anniversary gala scheduled
for next may. great footage. oil market closing for the day. let's get to jackie deangelis at the nymex. is it a close below 43? >> good afternoon, melissa. i think we'll be a little bit over $43 a barrel, a decline today of a little less than a dollar. the positive sentiment here, clearly turning when it comes to oil prices. just trading the range as many expected. the big story is r bob gasoline, up 7% for the week. that's because the mark set getting concerned about a pipeline closure that brings gasline from houston through the east coast. this is certainly something to watch. the expectation is that pipeline will be up and running early next week. but if it is not, it could shoot retail gas prices up. so people are getting a little bit concerned about that. meantime this is the time we see that seasonal decline in gas prices about 10 or 15 cents. you can see it go the other way if this doesn't all pan out as the experts are expecting. back to you. jackie, thank you very much.
donald trump says hillary clinton started the birther controversy but that he finished it in his own words. and the president was indeed born in the united states of america. john harwood joining us now with more. john? >> brian, you're right. donald trump said one thing that was true and one thing that was false about the so-called obama birther movement. here they are. >> hillary clinton and her campaign of 2008 started the birther controversy. i finished it. i finished it. you know what i mean. president barack obama was born in the united states. period. now we all want to get back to making america strong and great again. >> now, the false thing was that clinton started the movement. and donald trump ended it. she never raised birther
questions and it was donald trump who used them to build his national political profile. the true thing, that barack obama was, in fact, born in the united states. specifically in hawaii. now, why is trump telling that truth now? here's why. millions of african-americans and others consider the birther movement not only a politically motivated lie, but also a racist attempt to question the legitimacy of the first african-american president. to win the election in november, donald trump's strategists know he needs to improve his image with some of those people, especially with college-educated white voters. hence what he said today, after flatly refusing to say it last night. if you look at the polls, the latest real clear politics average, the stakes are getting higher. clinton 45.7. trump, 44.2, a point and a half difference with the first debate just ten days away. >> john, we have to move on quickly. but where does mr. trump get the idea that hillary clinton had anything to do with it? he says it based on something.
>> there was conversation among some hillary clinton volunteers who had passed on an e-mail raising this question. that -- the person who did that was let go by the clinton campaign. there was also a memo from a clinton campaign strategist suggesting that hillary clinton could present herself as more american than barack obama because he had a different unconventional background, spent part of his time growing up in indonesia, kenyan father. but she never raised the question of whether barack obama was born in the united states or was an american citizen. still doesn't to this day. and, in fact, before donald trump spoke today, she demanded he apologize to president obama and, of course, donald trump did not do that. >> let's leave it there, john. thank you very much. i appreciate it. as we move on, can trump capitalize on the higher poll numbers that john harwood just
showed you? joining me now is larry sabato at the university of virginia. larry, let's go a couple of places quickly. is trump trying to put it behind him once and for all today? did he? can he? >> absolutely not. if this was designed to put it behind him, he did it in the worst possible way. he irritated every member of the press by actually having a press conference about veterans and then finally at the end of this long press conference, giving a couple of lines about the birther movement and taking no questions. not only that, tyler, this is the weekend of the congressional black caucus convention in d.c. president obama speaking at it, hillary clinton speaking at it. couldn't have picked a worst time for this. >> there are two things that stand out to me over this past week, larry. that is, number one, that donald trump's supporters are much more enthusiastic about voting for
donald trump than hillary clinton supporters are or seem to be about voting for her. that's number one. number two, what you describe is the fot, the fear of trump factor. it seemed to me that yesterday mr. trump didn't seem so fearful, didn't give people a lot of reason to fear him, and that that fear factor seems to be receding just a bit. your thoughts? >> it may be receding with some, but the democratic campaign is just starting to gear up in that direction. and while hillary clinton does need to present a positive picture of what she would do as president, i don't think she's done a good job on that, a good bit of her campaign, maybe a majority of it, has to be focusing on the question, is donald trump qualified to be president? that's the one thing all the polls agree on, a large majority of americans do not believe he's qualified for the oval office, while believing that she is qualified. >> so now, i went and looked at
a washington post little map, it is a wonderful little thing that i'm sure you got it at the center for politics as well, that looks at the electoral possibility possibilities. it began with a scenario that every state were to vote, exactly as it did in 2012. here's the scenarios i want to paint for you, larry. tell me what happens if this happens. if every state votes the way it did in 2012, except for these three, florida, michigan, and ohio, those flip from the democrat column into the republican column, you've got a tie in the electoral college. 269 votes. same thing. all the same, except ohio, florida, wisconsin, and iowa switch, you've got a tie. what happens, how crazy would that be? >> well, it certainly is possible. we speculated about this for many years on our crystal ball website. 269 to 269 tie would mean the
election would go to the house of representatives. the odds are great that the president would beat donald trump because even though republicans will lose some seats in the house, they'll maintain their majority and they are going to have the 26 votes you need to be elected president in the house. every state has just one vote, the congressman from that state determined the vote. republicans would win the presidency. >> it is an outside possibility, but it is more -- it is not impossible, it is plausible if you look at it. has the trump path to the white house become more attainable in the past three weeks electorally in the electoral college? >> because he is now clearly leading in iowa, and we're going to switch that state to him, he wasn't leading before, he's clearly leading in ohio, there have been three sound polls now that have trump leading between 3% and 5 percentage points.
ohio doesn't usually give a margin beyond that on election day to any candidate. so we're going it lean that one to trump. >> you got two to trump. >> yes. we're going to flip them. and florida is still, i think, undecided. there have been some very contradictory polls there. i'm not comfortable with that one. i'm not comfortable with north carolina. which has to be a republican state for trump to win. but that is very, very close right now. >> we talk a lot about owe ohio pennsylvania as we should. is there a third state we say we have to start watching more closely, wisconsin, maybe michigan? >> you have to look at michigan because trump has been putting resources and time there. has been having rallies. you've seen him in black churches there. he's making an effort because he realizes one of his paths to victory is to carry the rust belt. and so that means michigan, wisconsin, ohio, pennsylvania. i have to say, michigan and
pennsylvania are very tough nuts to crack for trump. >> all right, larry, always great to see you. larry sabato, university of virginia. >> thank you very much, tyler. soda stock that could bubble up another 20%, debt analysts call, and three others in our street talk segment. and kathy ireland will join us, sadly not on set, she'll be on the profit with marcus later on this month. she'll be live in two minutes. energy is a complex challenge. people want power. and power plants account for more than a third of energy-related carbon emissions. the challenge is to capture the emissions before they're released into the atmosphere. exxonmobil is a leader in carbon capture. our team is working to make this technology better, more affordable so it can reduce emissions around the world. that's what we're working on right now. ♪ energy lives here.
markets you recently taped an episode of the profits with kathy ireland who turned a successful modeling career into a multibillion dollar lifestyle industry, 17,000 branded products including apparel, pet care, jewelry, and what i know her most for, home furnishings. she opens up the annual berkshire hathaway shareholder meetings with bill gates. and she joins us now from los angeles. miss ireland, welcome. good to have you back on cnbc. >> thank you. thank you. hello to tyler, melissa, brian and, of course, marcus. hello. >> what is marcus like to work with, kathy? >> marcus is incredible. i've got to tell you, first of all, tyler, you were one of the
very first journalists to chronicle our business. and what is marcus like to work with? he's a master class in and of itself. and so i've got to question to everyone who watches "power lunch," which i love, if you're not watching marcus on the profit, why? and if you are, are you watching it as entertainment or recognizing that it truly is a master class in finance. and entrepreneurship in the way people are treated. it it had a powerful impact on kathy ireland worldwide. >> marcus is a master of psychology as you surely know. >> oh, yes. >> i've seen marcus do his in person work with individuals. he gets into the heads of business people in ways that are deeply personal. you are really out there and reveal a lot. what has he taught you, kathy? >> okay, you know, marcus can be
rough. he teaches -- yeah, you can be rough. you get bleeped from time to time. marcus teaches people, process, products, as a daughter of a labor union leader and a nurse, how people are treated, it is critical. as rough as marcus can be, he leads with his heart. and when you watch him carefully, he navigates the person as you were talking, he is a master at that to what is going to ultimately be best for them. sometimes it is difficult. sometimes it is hard. but it is brilliant. >> he is tough, also perhaps -- you -- >> tough is a compliment. >> part of the reason, tyler, and kathy, that i did bring kathy on to the show is we were working with a business owner who felt like they were not able to achieve their success because they were a woman. and she felt that being a woman was a huge impediment to her success and she had a chip on her shoulder.
what i think kathy demonstrated with other great female entrepreneurs is that male, female, doesn't matter. it is really the work that you put in, the people you surround yourself with, the relevance of your product, and that truly is what i think kathy stands for. most people don't know that she's got a $2.5 billion business. most people don't know that. there is a lot of other female entrepreneurs around the country that most people don't know about. and so i think one of the things that we're trying to do overall is not just celebrate entrepreneurship, but really highlight examples and whether that is brandon marshall investing as an nfl player or kathy doing these things, we need to celebrate those because these young people need to see it. >> marcus, thank you for that. and you teach that on the profit. and i have to reiterate, not to watch the show for pure entertainment value. it is entertaining. but it is a master class. some of the things that have impacted our business directly is how to be disruptive. on september 21st, i'll be with
cnbc's own courtney reagan, harvard business school, giving a talk on disruptive entrepreneurship. and, an example, in television, we have gone the sponsored route. i'm here on the set of worldwide business, where in over 50 countries today, in jewelry, we have a patent pending setting that sets us apart, marcus says to differentiate with intimate apparel. it has taken us his advice, has taken us from intimates to sleepwear to girls, and i don't talk numbers, but marcus says if you don't know your numbers, you don't know your business. it increased us in the triple digits. >> you really built this business methodically, slowly, you referenced the time that you and i talked some years ago. it has been a while for that. >> it has been slow. we started in north carolina with john and marilyn moretz, single pair of socks, still our
partners today, over 100 million pairs of socks later to our partners in north carolina, with marty, we're opening offices there. but there is so much information out there to learn. and just encourage people be alert and attentive. the profit, it is a powerful education. >> i always knew you had socks appeal. >> well, thank you. >> we'll cut you off there. thank you for joining us today. i appreciate it. >> thank you, marcus. thank you. >> kathy's episode of the profit will air on september 27. it airs on tuesdays at 10:00 p.m. eastern on cnbc. kathy ireland, thanks again. this stock is down 20% this year. don't sell socks. the street just making a big call on it, rallying right now. street talk on deck next. s from this shop, with handles designed here, made here, shipped from here, on this plane flown by this pilot, who owns stock in this company,
great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. time for street talk. analyst recommendations on stocks you need to know. we start off with go pro. go pro has faced a challenging 2015 and first half of 2016 but the analyst says after several months of inventory burn now product launches are around the corner. go pro is ready to make a
quote/unquote hero's comeback. >> i like the pun based on the name of the popular product. let's not forget it was a $24 ipo. >> that is true. a lot to talk about with nick woodman joining power lunch next monday. >> second stock dr. pepper, snapple. that is about 20% upside. part of a broader call. they note that dr. pepper shares and the market is under valuing. that is a company that has ten so-called entrepreneurial brands. they sell more benefits. they have the dr. pepper, the soda, not the company. >> interestingly is a preference for pepsi over coke. pepsi getting initiated. monster -- lululemon getting a
bullish call. $77 price target. operational leads to increased gross margins. saying lew should double market penetration by 2020 and at least double annual revenue. >> the stock has done okay until as of late. this is a name that almost trades as a tech stock. it is so volatile. it is almost not even a clothing company. >> your smaller call of the day is fpo the ticker, maryland-based. sun trust upgrading to a buy from a neutral. they say that the stock has had a bad run. now the risk reward is attractive. the analyst likes the valuation. 25% discount. they can get liquidation of certain things. management is ahead of schedule.
sun trust upgrading. is jessica alba about to become richer? check please is next. now that fedex has helped us simplify our e-commerce, we could focus on bigger issues, like our passive aggressive environment. we're not passive aggressive. hey, hey, hey, there are no bad suggestions here... no matter how lame they are. well said, ann. i've always admired how you just say what's in your head, without thinking. very brave. good point ted. you're living proof that looks aren't everything. thank you. welcome.
oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. part of the show where we go on what maybe motivated us. mine is on the kathie ireland
interview, jessica alba has built this honest co. it will be sold for a billion dollars. that is an example of somebody who had a brand in herself and converted it to a bigger brand. >> thedeveloped a very fully integrated consumer products company and surrounded herself with amazing brand folks and the right sourcing agents. the products are great. she really knew where to find the product. not only give the margin to herself but to the retailer. consumer products whether a phone or bottle of cleaner, the retail price is based on sourcing model. it goes from the cost of a dollar at keystone and then sells to the consumer for $4. the keystoning stayed at or below market. bad sourcing, bad retail price.
>> you know her, we didn't get to ask her because we ran out of time. she has had bids on her company. >> i suppose she has. she's got an unbelievable brand. she has a great portfolio. >> she runs it. she literally runs it. >> she has her fingers in every business. >> i tell her a little much. >> was a lot of talk in the campaign about regulation and the need to sweep away the thicket of regulation that tends to many businesses. i wonder what your perspective is. mr. trump made the case that did away with a lot of useless regulation we would grow a lot faster. do you buy that? if so how much faster? and has regulation been in your career a huge impediment to getting done what you wanted to do to being able to grow your business? >> the first thing that comes to mind when i think about
regulation is banking regulation, food and drug regulation. i don't know what regulations would need to be removed from my business. when i think about talking about removing regulation from the market place i guess there are some things i don't know what it would be. and to think that the removal of regulations will accelerate growth if you make banking easier and getting a home mortgage easier you will sell more homes. and then what are we going to do with the defaults? i don't know what regulations will get? >> i don't sense that regulation has been a major impediment to your business growth? >> i can't think of anything that is preventing from growing. i can't think of it. >> and keying off of regulation it will be a big week next week in terms of washington and the potential reach that it will have on certain industries. you have wells fargo going to the hill, speaking to the senate. ceo will testify and ceo of
mylan will answer to senate committee. >> and the fed on wednesday. >> and of course the fed on wednesday. >> and the debate. >> thank you so much. >> exactly. thank you for joining us. >> thank you for watching. >> "closing bell" starts right now. happy friday. >> tgi your f. follow me. stocks still in the red as we enter final hour of trading. major averages are slightly higher for the week. this next hour is going to be very, very volatile, a lot of moving parts and pieces which we will talk about. >> and balancing the creation of a new sector in the&p