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tv   Power Lunch  CNBC  November 15, 2016 1:00pm-3:01pm EST

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resources. but that xlf paper we talked about at the top of the show, that was massive. i think the financials still do have upside. only down 1% today. given the kind of move they already made going into this, i think there is room to the upside. >> all right, guys. thanks so much. see you back in new jersey tomorrow. that does it for us. "power lunch" begins right now. fire up the power tools. one big retailer getting hit hard despite an earnings beat. we'll drill down. warren buffett buying into something he once called a, quote, death trap for investors. the surprising move by the oracle of omaha. and the profit goes to cuba. marcus lemonis with an unprecedented look at the promise and the problems doing business in communist cuba. "power lunch" starts right now. indeed it does. welcome to "power lunch," everybody. i'm tyler mathisen. a little bit of a reversal or things turning inside out.
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the dow is lower as you see there, not by much. 32 points, about a fifth of a percent following six straight up days. now you know, remember the s&p and the nasdaq? they haven't been going quite as gangbusters as the dow, but right now they're both in the green. the nasdaq by two-thirds of a percent and the s&p by a quarter of a percent. oil, big move higher, crude is up nearly 5% on the session at 4537. more than $2 up. and the sector is flipping the script with energy leading the financials, big gangbusters. they have been lagging. michelle? >> thank you, tyler. i'm michelle caruso-cabrera. here is what else is happening at this hour. retail sales topped expectations in october. that is thanks to strong auto sales. new dloit study finds 40% of manufacturing companies were hit by cyberbreaches within the past year. aaa expects 48.7 million americans to hit the skies and the roads this thanksgiving.
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that's up 1 million travellers from last year. but, as brian mentioned at the top of the show, with us for the next two hours is marcus lemonis, so much to talk to him about, the election, the economy, and his groundbreaking documentary that airs tonight, "the profit in cuba." everybody says documentaries are groundbreaking. this one is spectacular. if you're into business and thinking about what it would be like to do business in cuba, marcus, so great to have you here. we're going to talk about your documentary throughout the show. but first, last time we saw you, one week ago today, donald trump had not won the election at that point. we thought we were looking at a locked congress, with hillary clinton in charge. what do you think? >> it was a tough night for me it was, no doubt about it. but i actually went into the day with the expectation that that was going to happen. i talked about when brian was out in ohio, i kept asking the question, what was -- what were you hearing from people in rural communities? i didn't sense that trump was
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going to have a problem. look, at the end of the day, he's my president. and i have to follow the leader and i hope that it is good for our country and know that i have to take care of my employees and my businesses, and i think that's how everybody needs to be thinking about it. >> you also said last week that what you were hearing about south florida is different from what the polls were showing? >> yes. i told you people were saying they were voting for trump. very aggressive way. >> i wish we would stop, you know, as a network saying it is a surprise. not trying to whatever. i told our production staff for weeks trump was going to win. now i'm saying he's going to win. you go around the country, i live in wisconsin for much of the summer, i drive all over the place, it is trump, trump, trump. so i like what you're saying, marcus, which is that we still got to get up -- i'm not saying you want to win, but you got to get up in the morning, take the kids to school, go to work, put eggs on the griddle and run a business. >> but more importantly -- >> the sun comes up and the
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sunsets. >> but we have a responsibility in my opinion. it was an earth shattering moment for me because i had to reflect. immigrant of this country, been given a lot of opportunity, but at the end of the day i'm responsible for a lot of people, and so all the other noise needed to just go away for a minute and get people refocused. >> we'll talk throughout the show. >> we got a big couple of hours coming up. first, to a developing story on the consumer comebacks. something marcus knows a little bit about. steve liesman with a cnbc rapid update. >> brian, thank you very much. just getting the numbers in from the wall street economists and put them together, crunch the numbers, come up with a rapid update and that strong retail sales number this morning and the upgrade to september causing an upgrade to the outlook for fourth quarter gdp, now tracking at 2.4, up by .2, the range 2% to 3.3. and the third quarter better too because of the september revision, up by a tenth, tracking 3.1%. let's look at who has got what forecast and where they are. atlanta fed, 3.3% for the fourth
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quarter. up by .2. barclays, 2.7. morgan stanley has the bottom there, up 2%. put it all together, if this 2.4% comes out, the way they forecast it, 2% growth for the entire year on average. i will say, though, these are early days. we'll be tracking this, just the october data just barely in november and december for the final quarter of the year. >> thanks very much. that sets the table for the next guest. let's drill down and put, pun intended, nail down on retail. home depot, let's bring in peter keith, he covers home depot at piper jaffray. great to have you here. >> great to be here. thank you. >> this quarter is backward looking. all this quarter is predonald trump's election. you as an analyst, does your view of the world change and your view of home depot either for the better or for the worse change as a result of the
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election? >> only modestly at this point. and i think we're still going to learn more in the coming months. so there is an argument that there is going to be a lot of stimulus put on the economy, and that will help the consumer. i think we're still waiting to see exactly how that transpires. the one thing we can notice most recently post the election is that the 30 year mortgage rate has risen about 40 basis points. gotten about 4%. we think that it bears watching, it could present a modest head wind to the overall housing and remodel space going to 2017. >> those are correlated, right? home depot, sales, correlated to home sales and home renovations. >> that's right. >> what other things are you seeing in terms of what is home depot talking about with store traffic and what are they seeing with average orders? a change in trends in either of those? >> you're not at home depot and you have to give them credit for putting together an outstanding quarter, and what has been a choppy last few months, you had
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a number of home improvement suppliers miss revenue numbers and home depot really came in across the board with solid results, they were positive at all interesting metric they give is their same store sales growth for large ticket, tickets or $900, that was up over 11% which was the strongest growth of the year. no weakness in their business at this point. >> in your analysis, what is different. what are they doing different than their competitors and why are they outpacing them in the same store numbers? >> i think there is two most identifiable things, number one, home depot tends to be more centrally located in metropolitan markets. that's where we think we have older housing stock, renovation activity is taking place. and secondly, we'll give the hats off to the management team and what has been really good execution across the board. >> so why is the stock down? the idea that the forecast isn't
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as favorable or that the comps will get tougher? how would you put your finger on that? >> we just downgraded shares two weeks ago, not a call on the quarter. but we think what you're seeing today represents our concern on the stock, just buyer fatigue on the remodel space. home depot shares have outperformed for the last eight years. they have now two quarters coming up, q 4 and q 1 that have difficult same store sales comparisons, and now with this recent mortgage rate increase, we just think buyers are pausing now to accumulate new shares. >> you mentioned that $900 ticket price. i say every time i go there, i have the rule of 300. i spend $300 every time i go there, minimum, every time i go to home depot. that's good news for them, i guess. thank you very much. >> thank you. >> appreciate it. from retail to the bond market, bonds with a monster reaction since the election. the yield on the ten year note climbing nearly 20%. that's 20%, not percentage points, since last tuesday alone. and here is what the value
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investor bill miller had to say on "squawk box" earlier today. >> in my opinion, 359-ye-year b bull market is over. it will switch somewhere and i think a large part to equities like in 2013. >> let's get the reaction from rick santelli live at the cme. is that the prevailing sentiment out there, rick? >> it absolutely is. and for a variety of reasons. i know it is really easy and it fits to some extent that we make this all post election, in doubt as you look at this chart going back to july of 2012 pause we had the double bottom at 12 in july and july of this year. so there is a lot more behind it. but there is another way to look at this as well. the catalyst was the election. so, of course, we're always focusing on the new people coming in. but let's be fair here. if you look at where we have been, we had markets that had a lot of management, thumbs on the scale, and just in generic terms
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it is not only about what we think we may be welcoming in with both chambers and the president under the same banner and getting things done without gridlock, but also i think there is a lot of issues that the markets, especially tens, they kind of jumped, because the past and the future probably are going to be with much less aggressive tendencies by central banks. and let's face it, the last administration, whether you look at -- they start out with energy secretary that wanted $10 a gallon gas. there is going to be a much more pro business environment. there is a lot of other baggage with it. in the end, we got to stop one and stop beating the wall streets. we need to move on. you can't do all these things without many of those players and i think that a lot of the money is going to end up in stocks. but i do fear that rates have a little bit of thrust here to even go higher over time. >> all right, rick, thank you very much. rick santelli. let's bring in john bella of western asset management.
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john, the other day i called bonds the vegetables of investing, kind of boring, you don't -- you need to have them in your portfolio. but like vegetables, there is all kinds, so it is hard to say the bond market. are there any particular parts of the bond market, john that you think are extremely over or extremely undervalued now. >> i certainly wouldn't call the last few days boring in the bond market. i don't know if the vegetables really works for the last few days. i think let me start by saying what has happened is we have seen more optimism on growth in the u.s. and inflation in the u.s. over the next few years. that should allow the fed to get not only a hike in december, which is fully priced, but also a few hikes next year and we'll see where it goes. i think that an environment of higher growth, higher inflation and the fed following through, you would expect to see higher yields, especially on the front end of the curve and we have seen that. >> how high? >> i think we're certainly pricing in more fed than we were a week ago. so the fed went from one hike to now closer than two.
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and we'll see where it goes. i think there is a lot of risks in terms of implementation. but i think most of that, and this is what i want to emphasize, most of that is a front end of the yield curve story. against that, i highlight two things that we think are fairly positive in the bond market. the first is credit. the surprise that we have seen as rick said was better optimism on growth, more pro business, and perhaps more regulatory relief. that should be positive for credit and so you've seen bank bo bonds, for instance, do quite well. other spread sectors do quite well. that's a real positive. the other thing i would say, you're thinking about the yield curve, that five-year yield, that could be going higher. but the back end of the curve, which reflects the more medium term prospects, slower growth over the medium term and aging populati population, not a lot of that has changed. there may be value in the long end of the curve, even as the fed -- >> maybe that one could buy at this point. bill miller has actually been saying this for some time, to say it now, this morning, after we already have seen this big
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move in rates, people think he's armchair earthquake iquarter ba delivering alpha, one was long value and short treasuries. would you do that now? >> we would not. for us, the better trade is to have those credit exposures in your portfolio and then against that, have some diversification, that long end of the yield curve. bonds and credit tend to move in opposite directions. you've seen that over the last week or so. credit higher, bond prices lower. that negative correlation is a positive tool, really important tool for portfolios, for portfolio managers. there is a trade there, where own credit, have some of the risk in the portfolio and have the diversity and interest rate risk, especially in the long end right now. >> what do you say to the individual investor who has put a lot of money into bond funds over the past five, six, seven, eight, nine, ten years, whatever. who now are seeing a different kind of market unfold in front
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of them. what do they need to do? what do they need to be ready for? because the bond market treated them pretty well. >> you know, it hasn't -- our message to -- investors, retail and not, is to go back to the fundamentals. where do you think growth is going to be, where do you think inflation is going to be. as i said, we have seen a material change in expectations over the next one or two years. growth a little faster, looser fiscal er inflation. but it is important not to just think about one or two years but where do you think growth demographics, productivity are going over the medium term. if you get comfortable with the idea, there is still a lot of head winds, we haven't fully changed regimes here, i think there is value in holding a bond position against a credit position. >> john, we'll leave it there. john bella, thank you, john. see you soon. >> thank you. folks, you won't believe the latest air or maybe you will given the airlines, the latest
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baggage restriction that will tick off a bunch of you flyers, especially in the back of the bus. the details on what united airlines announced and whether it is going to work straight ahead. we're headed back to cuba for an unprecedented look at the country, people, business opportunities, as we head to break, you're looking at a live shot of little havana in miami. not going anywhere. "power lunch" is back in dose minutos. >> very good, yes. mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of at&t, and security that senses and mitigates cyber threats, their critical data is safer than ever. giving them the agility to be
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you don't want to miss this. tonight at 10:00 p.m. eastern time, "the profit" goes to cuba. marcus takes up close and personal to look at the promises and problems of doing business in castro's communist country. >> everybody likes sugar. >> yeah. >> right? everybody likes chocolate too. but on the day i visited, there wasn't any. why don't you have the ingredients? money? >> no. because they are not available right now. >> chocolate is not available? >> the exact kind of chocolate we use, more than 40% of --
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>> it is not available. >> right now it is not. >> you cannot find it in any store? >> any store. >> that's a piece of what you'll see tonight. marcus is here for us during the entire show. those people can only buy what the government decides they're going to bring to the country. >> they have to buy it at a government store. there are certain things you can buy at a market, but not necessarily things that they would need. you can buy a papaya bigger than your head at the market. but a lot of things you can't buy. >> stuff you have to import would be subject to the controls. >> clothes, tvs, blenders, anything you can think of. a pineapple, have at it. >> how many times did you go for the documentary? >> once. a week. >> for a week. you've been there -- >> four days. >> let me ask you both, i'll ask you a question as well if you don't mind, put you on the spot, there is a lot of talk -- people say when the castros finally die, the country will open up, if fidel castro ever dies.
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>> is he alive? >> starting to sound cuban. >> he's like 116 years old. but other people say, no, the russians, ca nadians and europeans have been there for 30 years and already have the country ready to go and it is too late for americans. what do you think in. >> that's mythology. did it look ready to go for anything to you? >> no, it looked like time stopped. and what is -- >> on the back end, like they got the relationships that, you know, with the cubans who matter -- >> i asked people, if fidel passes away, will things change. they were, like, no, why is it going to change? there is raul. what happens if raul passes away? no, there will be somebody else. >> is that because they believe that or because they realize it is saying something different? >> no, because i had those conversations by myself with no cameras, no anything. >> with yourself? >> i had those conversations with them in an environment that was very safe for them to talk and they told me a number of other things. >> there has been a huge -- a lot of coverage about the slight loosening of restrictions for
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people in cuba. you used to have to work for the government. now your whole document is about 100 or 200,000 people who now can actually own their own business out of 11 million people. it is hard for them though, right? >> it is. i think the cuban government did a cash flow analysis and said, how do we get these people off of our payroll, and get them on to their own payroll, and charge them a fee? instead of money going out to them, to provide for their lifestyle, they gave them the permission to open a business, that money to open the business is coming from somewhere other than cuba, they're opening the business and paying a giant tax on that. so from a cash flow standpoint, the government is still trying to figure out how they're going to provide health care for 11 million people, how to provide education, how to fix the potholes. >> that goes to my point. where did that money come from? >> bay of pigs, he was on one of the boats doing the blockade, russians have been there for 40
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years. we say the americans, but the europeans have been going there for 30 years. they have to have an infrastructure. >> there is not a psychological infrastructure. >> business people from other countries, not us, going for 20 or 30 years. >> not to do business necessarily. >> i'm glad you bring this all up. i hear this over and over again. this is what everybody thinks. this is wrong. >> even the hotel, even the hotel environment there, there are international companies that own hotels. they don't exist there. there are international automakers that sell into there. it looks like time stopped. >> you go into the kitchen -- you go into the kitchen of the bakery, i assume the stoves and offens we ovens were -- >> from 1968. it was old. >> is there any internal domestic money that is going to get put to work. where does that money come from? i get the four seasons company goi ing in, i get the idea that
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u.s. banks and others will invest there. studebaker. >> there are certain entrepreneurs that are doing well there. i ate at a restaurant and clearly the operator is doing well. he's expanding. he's doing a lot of other things. you can see by the technology he has with the pos system, something as simple as a pos system -- >> point of sale. >> i was thinking something else. >> you can see there is technology there. you can see going into the kitchen there is technology there. there are certain entrepreneurs there that are doing well that are reinvesting -- >> because why? because they're good? >> because they figured out how to put their business in a location and serve the tourist community. >> all engineers, ph.d.s, the smartest people in society who can't make a living at what they normally do, so they go to do this? >> probably ph.d.s and focs. >> i don't know -- >> friend of castro. >> it was a depressing trip for me. growing up in miami and having one vision of what i thought it was going to be was very different. i think people would be surprised. i have gotten a lot of backlash
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from friends in miami that were upset that i went there. how could you go there and give cuba the attention. i'm not giving it attention. i didn't spend my money there. i went there to show people how oppressive it really is. >> we'll talk more about that. be sure to watch "the profit in cuba" tonight at 10:00 p.m. eastern time. also pacific. right here on cnbc. >> i thought nothing could be better than bachelor in paradise, but "profit in cuba". >> it was good. >> that does it for me. >> john boehner speaking out for first time since donald trump's victory. what the former speaker said straight ahead, and, boy, he looks like a happy man. >> relaxed. when a moment spontaneously turns romantic, why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night.
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the former speaker of the house john boehner speaking out for the first time since the election in an exclusive interview with scott wapner. he joins us now with the headlines. hi, scott. mr. boehner, i will say this, he looked relaxed, tanned, rested and ready, a happy man. >> he looks like a happy and more relaxed man. thank you very much. you can add speaker boehner to the list of those wondering what kind of president donald trump will be, how conservative he will be especially after the comments we have gotten from the president elect after the election, maybe softening his tone on obamacare and other areas of his agenda. i asked the former speaker what should be on the top of donald
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trump's list. and here is what he told me. >> donald trump is not an ideologue. he's barely a republican. he could be barely a democrat as well. nobody really knows where he's going. but made pretty clear during the campaign of what his issues are. but i would expect things like infrastructure, tax reform, and this will surprise you, but immigration reform are things that are doable in this next congress. >> it will be interesting to see what exactly happens. remember, speaker boehner references his own comment there about saying that donald trump was half a republican in the past, said he's definitely not a conservative. we'll see whether mr. trump moves more towards the right or if he continues what some say is a path towards the center. at least on a few of the major issues that are out there, guys. >> i think it is an interesting thought because he's certainly
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not a philosophical republican. he's hard to pin down. like a bubble of mercury, you press your finger on him and he goes somewhere else. i think back to the time in the 70s when nixon made the overture to china. there is an argument to be made that no one but nixon could have taken that step and maybe there is an analogous situation, with respect to immigration, that no one but as fierce a guy on immigration as trump could move the country toward an immigration reform. >> the fact of the matter is, i'm sorry, yeah, i was going to say, the fact of the matter is that nobody really knows what kind of president donald trump is going to be and that includes whether it was gary cone of goldman sachs or the speaker of the house, john boehner. the stock market has reanted positi reacted positively in the early days, but on all issues,
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immigration or tax reform or stimulus or infrastructure, whichever one you want to call it, we don't know. >> quite a few times where you ask him a question and he will say, we'll see. we'll see. he doesn't know. >> what do you say about paul ryan? >> there was more certainty as to how he feels about paul ryan and a bunch of questions out there as to whether paul ryan should remain the speaker of the house. he told me emphatically he should. here's what he said. >> absolutely. paul ryan is a really smart guy, hard worker, great family man, and, frankly, well respected by his colleagues. over this last year he had to learn a new trade. that is how to be a leader. he's grown tremendously over the last year. he's going to be overwhelmingly re-elected today as the next speaker elect. he'll be elected on the floor of the house, when the new congress opens in early january. and i think he can be donald trump's legislative partner in
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chief. >> this is going to be really the big question and pretty fascinating to see, guys, how this all plays out in the new congress, in the coming year. jim jordan of the -- he's the head of the freedom caucus, considered the second most powerful person in congress, hasn't exactly come out and emphatically said that paul ryan should remain the speaker of the house. it will set up for an interesting take and give us a pretty good insight as to where the republican party currently stands and who it wants to be is front man going forward, aside from, of course, the president of the united states. >> yeah, which is all crucial to driving the legislative agenda, she tried to say. thank you so much, scott. >> thanks, michelle. dom chu standing by with a news alert. >> so, michelle, ibm chairman and ceo jennie remetti has thoughts and suggestions for donald trump.
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among the suggestions, emphasizing more vocationally focused education paths around tech skills, including hybrid high school to college curriculums, also building smarter and secure infrastructure, utilizing things like the internet of things or iot and artificial intelligence, also using data to fight government waste and using smart computing to take better care of our veterans through the health care system. she says she supports the proposed efforts of the trump administration to enact meaningful corporate tax reform. they have been in the business to use headlines over the past few years as one of the biggest underperforming stocks but reversed course as one of the best performers, shares up 15%. a large tech employer in the u.s., biggest out there, and its ceo weighing in to this political discussion. >> all right, dom, thank you very much. to sue her rare wera for a update. >> here's what's happening at this hour. mike pence arriving at trump
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tower this morning, huddling with president elect donald trump as trump moves closer to filling out his cabinet. mayor rudy giuliani emerging as the favorite to serve as secretary of state. president obama on his last foreign trip of his presidency holding a joint news conference with greek prime minister. he said trump's election and the british vote to leave the eu reflects the need to deal with people's fears that their children will not do as well as they have. for the first time a new drug given along with cholesterol lowering statins -- in clinical trials, the drug, which is the repatha drove bad cholesterol down to levels rarely seen. a group is attempting the first swim on record across the dead sea from jordan to israel. it is to raise awareness of the water's environmental
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deterioration. the 25 swimmers from around the world began the journey at dawn today. obviously with appropriate headgear. that's the news update this hour. brian, i'll send it back to you. >> sue, thank you very much. warren buffett's big bet on airlines. if warren is buying, should you or is the airline run done? trying to get answers straight ahead. oh hey allison. i'm val, the orange money retirement squirrel from voya. val from voya? yeah, val from voya. quick question, what are voya retirement squirrels doing in my house? we're putting away acorns. you know, to show the importance of saving for the future. so you're sort of like a spokes person? no, i'm more like a metaphor. okay, a spokes-metaphor. no, i'm... you're a spokes-metaphor. yeah. ok. see how voya can help you get organized at
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warren buffett once called buying airline stocks a death trap for investors. but he had a big change of heart apparently. new filings show buffett's berkshire hathaway bought into three different airlines. united, american and delta. i made sure i put the fingers down in the right order. he also bought into southwest airlines. does that mean you should too? let's bring in chris kelly, airline analyst. who is to argue with warren buffett? certainly not us. however, i will note the airlines had a heck of a run the last four or five years. are there any value plays left? are these good bets in your mind? >> well, we think they are. we're certainly not ones to
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argue with mr. buffett either. and we find it fascinating that after three decades he's finally interested again in the space. you essentially -- >> fascinating? fast enough, fascinating, agreed, but a little -- you find it a little odd? now? >> i find that the timing is interesting. we have been invested in the space since 2008 and to your point, the stocks have done very well over a long period of time. but i think people have been sitting back and waiting and mr. buffett as well, trying to find confirmation that the industry is not the old airline industry that it was in prior decades. clearly -- >> what makes it different. what makes it different. i'm trying to understand the fundamentals, what about the investment or what about the position is attractive? i don't see the value on the balance sheet. if gas prices start to move, walk me through where the value really is. >> well, the difference from an
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industry structure standpoint is simply the consolidation that has taken place. and you now have the top four airlines with, you know, close to 90% market share domestically. from a valuation perspective, most of these stocks are still single digit pde multiples, moved up from midsingle digit to higher single digit. but still well below ten times earnings, they generate decent amounts of free cash flow at these levels. they have reduced leverage, united is under three times leveraged right now. and pricing is starting to turn the corner which has been an utter disaster over the last two years. >> so, chris, i understand that the consolidation would help on the sjna side and the customer acquisition side. when you state valuations are still nine and ten times, where do you believe the valuations should be for an airline particularly with all the different levers that can move and turn that business upside
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down pretty quickly. >> yeah. i understand what you're saying and it is a tough question to answer. i don't know what the right point valuation is. >> where do you think it is for yourself. as you think about it, i understand it is tough, but you're advocating buying it. when do you think the number is? >> right, well, we think probably somewhere between 12 and 15 times is a fair multiple. it is below a high quality industrial, but at the same time, these companies are getting 20% plus returns on capital right now. and returning a lot of capital to shareholders. it is above 10, it is probably below 15 is the fair valuation. >> which one do you like best? >> united. united is our favorite now. >> why? >> well, the management team has been totally transforr etransfo the last six months. they have a margin gap with delta that they outlined today, they think they can close.
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>> you're not worried about -- >> chris, sorry, running out of time. we have a story coming up called thunder stealing of a story we have coming up, apparently united is banning bags for people that are in group five. if you're the last group, you're not going to be able to take a carry on. does that worry you? they're going to lose customers or these regional monopolies so strong, it doesn't matter what they do to you, you have to fly them anyway. >> well, that's the ruleout of a new product, their basic economy product and to compete with frontier, with spirit, compete with allegiant. it is that basic economy fair class where you're just going to have to pay to check a bag and won't be able to bring a carry on. it is a small percentage of the seats they sell. >> i wonder if there is adverse selection here. advertise this economy program, let's get people to go somewhere else, let's leave the fairs open and get a higher dollar but still be perceived as a value oriented airline.
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>> i think it is just basic segmention and it is a way for people to choose what they want when they fly. >> okay. >> all right. >> chris, thank you very much. we appreciate your time. >> thank you. >> and the united ceo will close up on closing bell. i'm sure he'll take plenty of questions about that and more. there you see it. oscar munoz. players from the dayton flyers lady basketball team, university of dayton, unusual transport to today's game against the alabama crimson tide. one of hillary clinton's campaign planes, there it is. university charters its planes through a charter broker and apparently this is what was available, like uber. call and you get a plane. the voice of the flyers tweeted out this photo of the plane before the team boarded. we'll see if it is a good omen or bad omen. >> they'll win. >> the plane was probably
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hanging out of wright patterson air force base, secure location, the dayton flyers. >> i said the lady flyers. not sure about that. >> could have been the wright brothers first plane. that would have taken a long time. >> whose job is it to paint it? the clinton campaign? >> it is like one of those fat heads. >> vinyl wrap. >> okay. all right, coming up, what a donald trump presidency means to cuba and u.s. relations. our next guest says trump has to make a choice in cuba. what do you think trump should do next? and we're speaking with cuban small business owners here in the u.s. hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right?
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small business saturday is our day to get out and shop small. a day to support our community and show some love for the people we love. and the places we love. the stuff we can't get anywhere else and food that tastes like home. because the money we spend here can help keep our town growing. on small business saturday, let's shop small for our neighborhood, our town, our home. on november 26th, get up, (all) get together and shop small.
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♪ welcome back. u.s. cuba relations have come a long way in past few months but there could be a lot of changes under the new president elect. listen to what donald trump said about cuba in september. >> all of the concessions that barack obama has granted the castro regime were done through executive order, which means the next president can reverse them and that i will do unless the castro regime meets our demands. those demands will include religious freedom for the cuban people and the freeing of political prisoners. >> let's bring in professor ted hentgen of barute college, also in the documentary that marcus lemonis is airing tonight.
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he went down there to havana with him. >> we had a great time walking down the street and comparing the state stores to the private stores. marcus especially liked linking it to the people who ran the state stores and why aren't there more people in here, more products. it was fun. >> is the president elect trump going to undo everything that president obama did? one of his signature pieces of foreign policy and this could all go away or no? >> i think reading the tea leaves about trump's ideology, his policy, is not easy. one thing he ran as is kind of a anti-politics and anti-washington as usual. and washington as usual is the embargo. in some ways you could expect that he may do something unexpected. but he did make promises as he got down to the wire in florida to the cuban-american hard-liners, the few that are left. and that may have helped in the very narrow victory we had in florida. there could be pressure on him to perform.
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i think that framing this about concessions to the cuban regime is to me backward. i think going to cuba, acting with entrepreneurs, this is a way to engage and reach out and help empower cuban entrepreneurs. and this is something that the cuban regime tries to keep under wraps, they allowed a little space. >> you saw that? >> i did. there is an actual list of the types of professions you can get into. there is 200. >> 201. a strong word. >> you can be a palm tree trimmer. that's one of the 201. >> party clown. >> if you wanted to expand your business, the state would put a lot of pressure on preventing you from opening up another location. adding more seats at your restaurant. so we'll give you the opportunity to be entrepreneurial, but maybe this much. if we think you're doing too well, party's over. >> my argument or my advice,
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he's taking it, donald trump, president elect, why help the cuban government, you know, put regulations on cuban entrepreneurs, why not be in solidarity with these -- the drivers, the innovators, and really in some ways use capitalism, which is our calling card, and this could be something that, you know, could be very effective. >> we talked about it earlier, fidel castro has been 70 years, 40 years, what happens when raul dies, when both castros are gone, does it become free, open, what happens? >> over a long time, people say what happens when fidel dies. fidel retired and raul continued moving that ship in the same -- largely the same direction with some economic reforms. i think that right now we're looking at much more continuity than change because they have very solid institutions in cuba, they have tight control over the country. there are major economic problems and major problems with immigration, people getting out of cuba because things aren't getting better.
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a fear that the u.s. open door is going to close. >> is there a shouaoping there? >> this was hope that raul was that, but he hasn't fallen far enough from the tree of the big brother to really be that figure. more about continuity, more about keeping control of the changes so that they don't get out of hand. >> make one thing really clear. as these entrepreneurs start to experience success and experience wealth, there will be a groundswell of entrepreneurship. i don't know if that tidal wave over time can be stopped. it is really what i think going to make the biggest difference. >> a great way to set up. you got to watch the documentary tonight, 10:00. great to have you, ted. tonight, 10:00 p.m., the profit in cuba, 10:00 p.m. eastern and pacific time. "power lunch" back in two minutes.
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oh, was my son mac happy last night. that's because the new york giants won their fourth straight game. it was a nail biter, over the cincinnati bengals, who tied my redskins a couple of weeks ago.
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joining us to talk football and emojis is giants wide receiver victor cruz. welcome. you are probably my son's favorite player. you were his first favorite player. you had a couple of years where you had a lot of injuries. i'm afraid mr. beckham has now maybe ascended to that role. it was an exciting win last night. you were on the sidelines. how is your ankle? >> afrnkle is doing well, feeli better. hopefully i'll be out there on sunday ready to play against the bears. >> you're an electric flying player and good guy as well. tell us about the project you're working on called fanmojis. i gather it is with toyota. i can only wait for my son to get his finger on these things. tell us what they are, how you get them. what they enable you to do. >> you can get them in the app store on your apple device, on your iphone, but it is just a cool way to enjoy the game and
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send your friends emojis and different emojis, if your team is winning, send an emoji with a guy doing a touchdown symbol or want to, you know, ridicule someone else because their team is losing, you can send them an emoji of a crying face or they'll send you one of a crying face, their team may have lost. but it is a cool way to interact with the friends throughout the game. and have a little fun with it. toyota fan emojis, they're great. go to the app store and download it to the keyboard. >> it is like we're going back to speaking in hieroglyphics. let's talk about the giants again. i can't figure the team out. got a win last night, which is great. what are the giants? running team, passing team, running the same offense every play. what are you? >> i think we're a team -- i think we're a team that gets it done. at the end of the day, you just want to have more points than the other team.
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i think that's what our goal is. i think we're a big play outfit. i think we look for the big plays in the past game, as well as in the run game. and recent weeks the run game hasn't been as explosive. but you saw that getting started last night, and i think it is only going to improve from here, only going to get better from here. so we just want to continue that trend, but i think, you know, offensively as well as defensively we're executing at a high level and we're -- especially defensively, we're stopping people and putting pressure on the quarterback. >> i have a question for you. you had a lot of success on the field, that translates into success financially. what is the league helping you do or what training or resources are they providing for you to think about not only investing your money, but what the future looks like. >> i think the league has provided different -- throughout the course of the season, different meetings that take place here in our facility to instruct us on how our money
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works. if they want us to invest and how that works and whether you want to or not. and just what your money does for you and how -- obviously the horror stories of other guys and the negative things, bad things they have done with their money and their finances. so i think the key to being smart and being educated with your funds is having a plan. i think a lot of guys don't necessarily have a plan with what their money is doing for them long-term, a lot of guys think about it right now. and the money they have in the moment. but don't think about how that money needs to transcend time for them and last over the course of the lives. we play this game for a large amount of money for a short period of time, have to make sure we extend that so we don't, you know, obviously end up bankrupt at the end of the -- >> patterson, new jersey's, own victor cruz. see you on sunday. good luck the rest of the way. >> sounds good. thank you very much. daily anti-trump protest on
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welcome to the second hour of "power lunch." i'm michelle caruso-cabrera with tyler mathisen, brian sullivan and the profit's marcus lemonis with us too. great to have you here. two hours until the closing bell. the dow is in the red after six straight up days. look at oil, crude soaring almost 5% today, 45.52 per barrel. closing trades just ahead. never take your eyes off your money, folks. there are always big stock movers out there. here are some of today's. teva pharmaceuticals, sales guidance disappointing investors. retailer tjx down today, over 1%. yes, the owner of tjmax and home goods raised its outlook but not as much as some expected. that's why that stock is off a bit. not all bad news out there. shares of advance auto parts are booming today, the biggest gainer in the s&p 500. they are up nearly 15%. tyler?
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>> more names being floated for president elect trump's cabinet including as you may well have heard rudy giuliani for hillary clinton's old job at state. john harwood joins us now from washington. >> that transition process is grinding on, no big announcements so far today. people are still chewing over the selection of reince priebus as chief of staff, lite of praise. steve bannon as chief strategist, a lot of criticism. we know that the front-runner for treasury appears to be steven mnuchin who was the head of fund-raising for the trump campaign, he went to trump tower this morning and while he didn't comment on a potential appointment, he sounded very much like a treasury secretary in waiting. >> we're working on the economic plan of the transition, making sure we get the biggest tax bill passed, biggest tax changes since reagan. a lot of exciting things in the first 100 days of the trump presidency. >> now, rudy giuliani as we just
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heard is a front-runner to become secretary of state. he does not have experience as a diplomat, but he was talking last night at the wall street journal ceo council and said that isis, defeating isis should be the top priority for u.s. diplomacy and military activity. one potential rival to rudy giuliani's, john bolton, the very staunchly hawkish former member of the second bush administration has gotten sharply criticized by rand paul, the libertarian senator from kentucky said he would do everything he could to block it. now we had some static in the transition effort today. mike rogers withdrew from the transition in deference, he said, it mike pence who is heading up the transition team, the president elect and also members of the president's family apparently he has sideways with jared cukushner, ivanka trump's husband.
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get involved with the trump administration to try to help them. now he says stay away. they're all angry and screaming and saying you lost, it is going to get very ugly. so some bumps in the road. we do know one thing though from the house republican caucus, which just had a meeting, it looks like paul ryan and kevin mccarthy are going to be the leadership team that this new administration deals with. nominated by their colleagues to be speaker and majority leader. >> this is marcus. i have one question. is there any woman being considered for any cabinet position? >> i'm sure there are. but -- >> have you heard of any? >> well, i think there has been talk, for example, of michelle rhee for secretary of education, that's a controversial pick, a polarizing figure. but one who is very popular on the right. some people have talked about
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mitch mcconnell's wife, elaine chao, a cabinet member before, i think indicated she's not interested. but there will be more floated and people have talked about laura ingraham, the conservative commentator, for white house press secretary. not a cabinet job but a high profile job. >> i'm curious, mr. giuliani, weeks ago, sounded as though he was, quote, the leading contender in a trump administration for attorney general or homeland security. what changed? >> i think when you have a very small circle of people around a candidate, you have an inflation of ambition by people because the bigger jobs become within their reach. fewer people with a claim on donald trump's position as secretary of state. and rudy giuliani is one of the core players of the trump campaign and is able to step up and say, you know, he's a former prosecutor, former law enforcement official, he wants something that looks like that
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he's moving up and secretary of state would be one of those things. one more thing on marcus' question, linda mcmahon is also talked about as a potential commerce secretary for donald trump. >> former wwe ceo? >> that's right. >> john harwood, thank you. hillary clinton's so-called blue wall came crashing down one week ago today. traditionally dependable democratic voting states like wisconsin and pennsylvania went red this year. joining us to talk more about this trend, former pennsylvania governor and former dnc chair ed rendell and joan williams at the university of california hastings college of law. thank you. governor, you pretty much called it. before the election, you said your state was very close and you were urging those on the democratic side to get out and vote. and did not do enough. can you outline for us, i'm sure you met many of the men and women that switched from democratic to trump, can you outline who they are for us?
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>> well, it is interesting. it is tough to pick one model. one model is obvious. it is people who were frustrated by the economy. men and women who may have been earning $80,000, five, six years ago, and then now earning $40,000 or maybe even worse, have no job at all. they're frustrated, angry, they needed simple answers, someone to blame. and donald trump conveniently said trade was to blame. and trade certainly plays a part in it. but technology costs more of those jobs than trade did. but yet they were a convenient group for a good simple message delivered directly and trump did a great job delivering that message. >> that's what he did. that turned the election, and spending a lot of time in wisconsin as i do and driving all around ohio and pennsylvania and virginia, you saw the momentum and the funny thing was, i know the media, the rest of it likes to portray the trump
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voter as one person. governor rendell's good point, i met a lot of trump voter and they were shocking, surprised me. they were very -- masters degrees, whatever they might have. to what do you attribute -- is it just trade or something else? this sweeping change? >> i'm not sure it is a sweeping change and not sure it is one thing. the election was extremely close. and a lot of sexism surrounding hillary clinton definitely played a role, but a lot of class dynamics surrounding trump's candidacy also played an equally important role. in particular, that my fear as a long time democrat don't understand what i call the class culture gap. there is a really important culture gap between the white working class, and many in the democratic party who see themselves as very progressive. >> does the white working class,
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joan, respect wealth but not privilege? in other words, my sense is that they celebrate success and wealth, but a lot of them resent the elites which would be represented in the media, by lawyers, by politicians, by academics and so forth. >> well, the simple way to look at it is that many in the white working class really resent professionals. they feel professionals look down on them. condescend to them. i must say the current talk that says that trump voters are stupid, racist, sexist, misogynistic, unfortunately i fear reinforces that dynamic. but many in the white working class truly admire the rich because that's what they would like to be. not culturally similar to professionals who are different from the white working class in terms of friendship networks,
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family, food, very concrete things. they just want to be exactly the way they are with more money and that's, i think, part of the attraction to trump. >> governor rendell, six months ago, a lot of people were talking about the dissolution, the disintegration of the republican party. it was so riven as it went through the primaries and so forth. now i think the focus has to turn to the democratic party. because if you look at the electoral map, you see some blue pockets along within 50 miles of either coast and then i'll call lake erie and lake michigan coasts as well for this purpose, chicago, cleveland, and so forth, but beyond that, this country is red. and while mrs. clinton won the popular vote, it has been a trend that most of the country and most of the states and most of the governorships and most of the legislatures are now republican. >> well, i think that's true to
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a great extent. take a look at pennsylvania, michigan and wisconsin. gave the election to donald trump. i think michigan, the vote is down 13,000 margin, wisconsin, 36,000, pennsylvania, 68,000. that's not a lot of ground for democrats to make up to get back into control in the working class midwest. i think we made a mistake. the campaign. and i don't think we heeded the warnings, didn't heed my warning or other warnings, pollsters didn't see it. but i think if i -- of course, hindsight is 20/20. if i was in charge of the clinton campaign, i would have sent hillary into those white working class areas in michigan, wisconsin, pennsylvania, just as she went into west virginia during the primaries, she, you know, talked to the coal miners, made that statement they disagreed with, she had a conversation with them, she didn't change every mind and lost the primary but changed
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some. you got to relate to people. you got to ask people for their votes. we didn't ask that group for their votes. we just assumed they wouldn't vote or they were going to vote for trump. ask for people's votes. give them a reason to think that you care about them and that's what -- >> we got to go. i'll say this, i know your background, you came from humble beginnings. i'm lucky to have a good job and live in a liberal town. my mother, i call her a high school dropout, she'll send me a nasty e-mail, pulled out of high school because she had to work. first person in my family to go to college out of high school, my father was in the navy, did the gi bill when he was 30, my mother, 75, 77 years old, whatever she is, still working her butt off. and i look at my town and people portray trump voters to be backward. i'm thinking, actually, maybe they're the same and the people on the east coast have just gone like this because if you ask people to raise their hand, how many people's grandparents went to college? not many. a couple of people with bow ties living in boston, right?
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it is like i wonder if this whole arrogance of the left which is they got left behind, really? maybe the other side just went too far and too fast, what do you think? >> first of all, i'm strictly a silver spoon girl. i married in a working class family, which is why i like to think -- >> i apologize. >> i think you're right. i think the democrats feel that they're connecting with the working class and point to things like paid leave, like the minimum wage. but i think these white working class voters, they don't want to be earning $15 an hour at mcdonald's instead of $8 an hour. they want a solid job that delivers a solid middle class living in a context where that is becoming more and more difficult, but not impossible. but they don't want to go to college and become anthropologists. i think sometimes the
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progressive democrats forget that. >> yeah. >> all right, joan, governor, thank you very much. >> they're also aspirational. i think that's that it boiled down to. people want to be aspirational and made their claim with their vote. >> yes. good observation. thanks, guys. coming up, back to business in cuba. we're going to talk to a man who tries to help cuban farmers get new equipment to be better and more productive.
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fernando, a socialist to the core. i wondered how he got his new house. beautiful. it is very smart how you built it. so the breezes can cross. what did it cost to build this house? >> you are asking me difficult. i cannot tell you how it cost. >> okay. 5,000? >> maybe more. >> 10,000? >> less. >> okay. and where do you get the money to do that? do you borrow it from the government? have family send it to you from america? >> i don't like the kind of,
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say -- >> you can tell me. it is okay. >> i don't like the kind of -- >> questions? >> questions you are asking. >> does it make you uncomfortable? >> maybe. >> okay. he told me the money came from lecturing overseas. not something most cubans get a chance to do. >> that was a clip from tonight's documentary "the profit in cuba" airing here on cnbc. 10:00 p.m. eastern time. >> you got to see what happens after that. it gets -- >> he turn the tables on you. >> he does. he starts telling me, if you ask me questions, i ask you questions. how much you to make a year, are you married, who how many wives you have, how did you get here? >> not how many wives. >> this guy obviously, i don't know how you found these dudes, very successful guy, can see -- >> i found him through -- >> kind of young. >> the restaurant i ate at sourced their products from him. >> they did. lecturing overseas, a cuban farmer.
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what is he lecturing overseas about. >> he's a pioneer in agriculture and has come up with a lot of new technologies and a lot of new ways to grow his produce. >> and by default, organic, they haven't been able to import anything since the soviet union fell when it comes to trying to fertilize. cuba imports 80% of the food, so small farmers like fernando are critical to try to be more self-sustaining. enter an alabama startup hoping to be a major supplier inside cuba. first they have to clear a mountain of red tape. the founder horace clemens joins us from huntsville, alabama. good to see you again. you and i go back a long way. bring us up to date. you've been trying to be able to sell these tractors in cube why for a long time. have you gotten anywhere? >> well, making slow progress, but the key thing is that what we propose to cuba, we're one of the few people that didn't go
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down there to sell something. we went down there to try to help them figure out how to build something they could sell. it has been a complex process and i don't believe we'll get anywhere until the embargo is lifted. >> horace, this is marcus lemonis, is your goal to just manufacture products for cuba or to manufacture products that can also be sold in cuba? >> well, our goal originally was to find the best way to get an affordable tractor into hands of the 300,000 farmers in cuba. so in order to do that, we proposed to the port that we built a facility there, therefore the tractor would go in without the taxes. that was a long process, we were originally told, you know, 90 days would get an answer. we got an answer that said the technology we used in manufacturing doesn't meet their business model, so -- >> what does that mean?
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their business model? >> they're looking for very high tech manufacturing, ours is very simple fabrication, welding capabilities. so where we are now is we have to go back to the ministry of agriculture and work through to try to find a way to get the tractors in cuba. we have all of the licenses from the u.s. government. >> can we underline what happened, which is that you're an entrepreneur who is willing to risk capital, go in, and maybe you might fail, but the government has decided what kind of technology they would want, and so therefore since you -- they picked the winners and losers and therefore you're not part of their plan, right? is that a way to think about it? >> i really don't look at it that way. and i understand what they're trying to accomplish. so the role that we may play is
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going back and setting up a manufacturing facility in cuba, outside of trade free zone. the net of that is that the tractor will cost a little more. but i think the key thing that there is nothing in this that frustrates me because of what we have learned. so the cubans taught us a lot about business model that is needed. and what we found out is the things they taught us and the things we propose to them have global applicability. we're talking just seven or eight different countries, about putting facilities in. so we created a business model where we proposed to the cuban government that says, look, we're going to give you all of our technology and we're going to set it up so that within five years you can put us out of business. you can be manufacturing everything in the tractor, we believe that within five years the cost of the tractor will go from $10,000 to $5,000, because of the componentry and manufacturing and will be sourced in cuba. that model has attracted business from everywhere. so we're talking multiple
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countries, because we believe that to get a product na 80% of the people that can't afford it, you have to be willing to push all of your business into that country overtime. >> we western you tish you the with that. >> thanks. >> what i don't understand, when he's saying doing amazing stuff and the government of cuba, which has people driving around in 60-year-old studebakers is saying sorry, we're waiting for more high tech tractor, does anybody else find that bizarre? >> with an eight track cassette. >> with gips. >> if his product has merit, why is he making cuba the linchpin in launching the business? >> so i've known him for a while and it sounds like that model has changed and cuba was the starting point but now figuring out there is a lot of low income farmers in the world who could use it saying if we can't make it here, we'll go to another
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country. >> to me it feels look a stall tactic by the cuban government to say we don't know how to tax it and get our piece, so until we do, we don't care what your technology is. >> cuba is like the guy that says he can't get a date and then says i'm waiting for miss america. >> i want to send you there. it is mind blowing as you sit here, and then you get there, it is like, oh, well, yeah. you look around, like, i totally get it. >> i would be happy to go to cuba anytime. >> you can't take your rv, though. >> why does everybody got to pick on my rv? >> because you didn't buy it from me. >> oh. >> i didn't know you then. >> don't miss "the profit in cuba" tonight at 10:00 p.m. eastern and pacific here on cnbc. >> one major airline lowering fares is air lemonis, free now. wait until you hear what you've got to give up. stick around.
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time for a transportation edition of the rundown. phil lebeau joining us from chicago. are you in chicago? where are you? l.a. l.a. for the auto show.
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>> los angeles. yeah. auto show. >> fantastic. united airlines going to start selling, phil, basic economy fares. what does that mean? and what do i not get? >> you get a basic economy fare, the lowest fare that they're going to offer, but with that means you don't get to choose your seat, they'll assign it to you when you get there and you get to carry on one personal bag. that means for a woman, a purse, for a man maybe a brief case to put underneath the seat in front of them. you do not get the opportunity to put anything in the overhead compartment. you bring something that goes in the overhead compartment, it is not going there. it is getting checked, pay $25. this is united keeping up with the low cost carriers and delta, which has offered a version of its own basic economy. and we're going to see more and more carriers move this way as they try to fill up the plane and that's essentially what you're going to get with basic economy. >> how will i know whether i'm getting basic economy or not? if i book through my travel company or my travel provider at
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work, do i know? >> sure. just as you know now. if you go to a travel agent, they won't say we'll bought you a ticket. they'll say premium economy plus, business class, where are you, just basic economy? or will you be in sort of that midlevel? they'll tell you that when you book the ticket and go online, you'll be able to know. >> all right. the ceo of united will be on the closing bell today at 4:30 eastern time. we'll ask about that. and much more. a new report, phil, from ex-perrian says the default rate on car loans is up now. highest level in nearly three years. what is going on? >> right. it is not surprising. you have more auto loans out there, you'll see more people defaulting on those auto loans. what many people are not paying attention to is that when you look at the historical rate for defaults on auto loans it still below the historical average. you'll see this increase as more
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auto loans are taken out as auto sales are at a record level, but we're not anywhere close it what we saw when we had the recession back in 2008, 2009. >> one of the things i would love to know is there a part of the country where we're seeing a spike and is that a canary in the coal mine for things to come? >> it is not that we're seeing a spike, you do -- i look at this data every quarter, when it comes out from experian, you see it in the southern states, the south central states, that tens to be where you see most of the defaults. put we see it around the country as well. not as hoe it though it is only happening in those areas. >> mark fields had a warning for the president elect. we'll listen to his sound bite here and get your comment. >> in terms of 35% tariff, that would affect the entire auto sector. and that would impact not only the auto sector in the u.s., the economy in general. we have to take all the things in consideration.
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>> ford has been a particular target for moving some small car manufacturing south of the border. >> right. and they're not changing their plan. i was the person who did that interview with mark fields today and i said to him, are you changing your plan at all? he said no. we're moving our small car production down there and taking the plant where we were building small cars and we're going to put two new products in there, likely a small pickup truck and suv because those are hot sellers, we're profitable vehicles here in the united states. one thing to keep in mind, not just with ford, every auto executive i talked with said the same thing. everybody is building down there. and if you do a tariff on those ford vehicles, you're going to do it on gm, on fiat chrysler, the foreign automakers who have vehicles down there and the parts makers who build parts down there that are shipped up and put into vehicles built here in the united states. so this is not as though you have ford that would be impacted. >> phil, thank you very much. phil lebeau reporting from los angeles and the auto show.
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>> oil up sharply today, almost 6%. to jackie deangelis at the nymex with the details on why. >> we saw strength going into the close, session high today, $45.91. more than $2.50 move. it is like they woke up and said the opec meeting is 15 days away and we could get a production cut there. the range, plus or minus $2, traders say the sweet spot is still $45 until we get a little bit more certainty about what opec will or will not do. stay with "power lunch." we'll be right back.
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welcome back. the dow turned positive. now it is negative, by .003. your money is still okay. session highs i'm told for the nasdaq up more than 1%. shares of alchemy down 26%, so far this year. but since a big drop early in the year, the stock has doubled off its lows. meg tirrell is live with the company's ceo. meg? >> thank you so much. rich bobs, thank you for joining us. >> great it be here.
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>> tyler was mentioned your stock having doubled since reaching lows earlier this year. that's due to news on your depression drug. a lot of people say on the alleviation of potential pricing pressures, do you think that's an appropriate response. will we see pricing pressure? >> it seems like the stocks recovered quite a bit after the election, just veal revealed hoh the pressure the whole group was under. i hope we have an ongoing dialogue about the value of medicines and rational behind pharmaceutical pricing. >> even as the political pressure will step off a bit, we see pressure in the industry, from insurers. that seems like it will persist. >> the problem is that too many patients and families are exposed to too much expense getting the medicines they need. that doesn't mean the medicines aren't valuable. a lot has to do with the price of the medicine and the type of insurance. i think many people are realizing they don't have
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insurance that covers them when they really need it. diagnosed with serious and chronic diseases. >> we're approaching the market with your depression drug, which is responsible for a lot of -- tell me about the path forward for that drug. do you anticipate having to run a new clinical trial or could we see this on the market pretty soon? >> we have been developing this drug for the future. it is a difficult area to test in medicines. we have excellent successes. so we plan to meet with fda in the first quarter of next year and preparing to file -- >> so phase three trial, you don't think you'll have to run another one. >> we have run five placebo control studies. we have over 1500 patients. we feel we have enough data set. >> another area that you're in is sweeping the country now, the opioid epidemic with your drug vivitrol.
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how do you look at that market and make sure everybody can access it? >> i don't think of it as a market, but an epidemic. it is taking off because the opioid epidemic is still raging across the country. there is three fda approved medicines for the treatment of this disease. two of them, methadone and saboxin maintain a patient's physical dependence. this requires patients to be detoxified. so for many, it is the preferred term. but we're in the early days. people are just coming to the realization this treatment alternative exists. it is important for families and patients to know that this alternative is available to them. >> richard, thank you for joining us. >> thank you for having me. >> back to you. >> thank you very much. after a tough few days from
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the tech stocks that you probably own, is there a sign of a big time rebound for big cap tech on the way? we'll find out. trading nation is next. will your business be ready when growth presents itself? american express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next.
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the show is so packed today. we'll do a rapid fire version of street talk. me and three stocks. number one, harley-davidson, upgrade to sector perform from underperform, hardly a ringing endorsement, i know. but it is a slight turn in sentiment. rbc analyst re-evaluating citing the potential for better economic growth, price target of 56 bucks. stock number two, celenese, raising the price target. the company is, quote, roaring in the distance. analyst just met with management and is confident they can deliver 8% to 10% earnings growth. and likes the possibility of some kind of a deal, also the falling share count, raises target by 5 bucks to $85 a share. about 11% upside. and finally, transdine, smallish cap company of the day. aerospace and defense company, deutsche bank upgrades from a buy to a hold, raises the target
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from 290 to 282. the analyst says take advantage of the recent overreaction. the stock is down 10% this quarter, investor selling over a short fall in earnings. however, the analyst likes the free cash flow story. not the only recent bullish call on transdime, jeffries started coverage with a more bullish $340 target on transdime. now to your other daily segment, trading nation. let's talk big cap tech stocks. many stocks like facebook and amazon had a rough few days since the election. facebook and amazon both down 5% in just five trading days. matt male and gina sanchez. we examined every which way why they had a tough run. why do you think they have and do you expect it to end and the stocks to turn back higher? >> well, i think it comes down to donald trump's stance on net neutrality going into the election and during the election
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he was basically against net neutrality. and that would be very, very difficult for companies like amazon and netflix who require bandwidth to order their services. so we'll see how goes forward and i don't think we'll find out what happens until we find out a more definitive stance on what trump intends to do with that policy. >> all right, net neutrality one thing we haven't talked much about. matt, are they oversold, do you expect a turn? >> i think they're oversold on the downside. one of the things you get is there is so much confusion and still people uncertainty in the market. the market bounced back nicely and people seem to be positive of what a trump presidency will do for the economy. but there is still some uncertainty out there and he doesn't take office for more than two months. there has not been, i don't think, a lot of new money coming into the market. instead, a lot of rotation.
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i think these stocks which had great runs have been a source of cash to put into some of the other areas that people are seeing to be very bullish under a trump administration. don't get me wrong, what gina says is very act are tcurate an. it is artificial, overdone because of this reason. and once that flushes out, what it seems to be doing now, they could get a big bounce, especially when you think about the fundamental reasons that barons has been talking about recently about cloud computing and their exposure there and cloud computing is not going away anytime soon. >> we'll leave it there. gina, i wrote a piece on "power lunch" about maybe donald trump is more of a trust buster than we think. knocked amazon in the best. doesn't like the time warner deal. maybe he wants to go after the googles of the world. we'll find out. thank you, both, very much. for more trading nation, head to our website, "power lunch" will be back right after this. and now the latest from
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welcome back, everyone. i'm sue herera with a developing story out of oklahoma. oklahoma city airport specifically. one person has been shot, according to the local affiliate, nbc affiliate. that shooting occurred in the parking lot or in a parking garage, not inside the terminal. however, the oklahoma police at this point are stopping inbound and outbound traffic, air traffic in that particular airport. we have the confirmation from the police of one person who has been shot, we do not know the status of that person. one person shot, the local nbc affiliate saying it is in a parking garage, not in the terminal, but nonetheless, the police are asking people to stay away from that airport because inbound and outbound traffic, air traffic has been stopped. ty, back to you. >> sue, thank you very much.
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facebook and google cracking down on what is being called fake news and twitter with new efforts to stop cyberbullying. can these companies accomplish these goals without limiting their users or engaging in what some call censorship? julia boorstin joins call censorship. julia boorstin joins us now. >> the internet giants are taking a stand against abuse and spread of fake news. twitter is tackling cyber bullying upgrading to enable to meet words, phrases and conversations they don't want to see and upgrading the tool to allow users to report different types of conduct that violate twitter's policies as twitter looks to improve its user experience to grow its relatively stagnant user base. google and facebook are also making moves cracking down on which sites and apps use ad-selling software. google saying we will restrict
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ads on pages that misrepresent, misstate or conceal information about the publisher, the content or primary purpose. facebook quickly followed suit clarifying policy about the rules for audience network saying we do not integrate or display ads in apps or sites containing content that is illegal, mislee leading or deceptive. this followed a buzz feed report that renegade facebook employees formed a task force promoting fake news. >> what do you think? >> i'm glad we are in the news business because everybody will come back to us. >> quality product. >> reality is there is fake news everywhere, social media or not. i use social media a lot. it's a big tool for me to be
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able to communicate things out. i choose to not pay attention to people disseminating bad information. you have the ability to not look at it. i don't know how that isn't enough. i need to be trying to decipher it. i have trusted news sources. >> just go to them. >> mainstream media. >> urged people to resubscribe to "new york times" and "washington post." "washington post" is quickikick butt. come back to traditional media. if you want to have -- i understand this is our world. >> some people giving false news. >> a lot of people think what we and our -- [ laughter ] >> but the mainstream media [ inaudible ]. >> i don't know, i never know.
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>> i think the promise is there is news that -- >> a lot say they are not mainstream media but they are. >> in terms of facebook and twitter they are into policing content. you can understand why. but then it becomes a slippery slope which twitter has started with trying to ban trolls. i think it becomes incredibly difficult. managing editorial content here we know how hard that is. you going to do that with a bazile yn people. >> and at least this is us. >> it's going to change the user experience. a real taste of cuba on set. >> in new jersey.
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check out the cover of the new york post today of mice and hem, fashion faux pas. a woman says she found a mouse sewn into the dress. now she is suing the company and is investigating the manner. always good headlines. >> a mouse in your dress. >> disgusting. >> i have mouse phobia. >> you been to disney. >> disney is my favorite place.
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>> time for check please. >> we are going to celebrate documentary the prophet in cuba. got a little cuban power lunch including nespresso. >> they are saying the coffee is from cuba. >> there can't be very much. it is going to be small farmers. the supply would be difficult. >> cuban sandwiches. >> we have trouble finding the type of cuban food i was used to in miami. they didn't exist. i said --
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>> looked at me like dumb american. >> well -- >> we have been flooded with tweets. lynn johnson asked how did your view of the cuban people and government change if at all? >> coming from miami i knew what a loving people they were. the view of the government solidified my opinion that they are one of the most oppressive in the world. >> even though they let you in? >> good for tourism. we are talking about food and coffee and tourism. they let us in but we were very respectful in my opinion. >> do you think it goes back to the way it was in the '50s in. >> i don't know that it left. >> vibrant, booming economy. in mas everywhere. do you think they -- >> does the country open up in the next decade? >> the infrastructure i don't
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think can catch up in the next decade. >> ecstatic sandy asked what do you recommend with the cuban policy in his first year? >> that's a good question. i actually agree with donald trump in terms of his hard line with the cuban government but i think there is a people that need some opportunities to survive opening up the lines of communication and business are that opportunity. >> what makes that so hard if you want to do business, big business in a big way you have to do it with the government because it controls everything or the military so you run up right against the embargo and maybe the values of americans. >> did you feel like you could speak openly there in. >> that is a change. >> i spoke openly. what i was told is you don't have to buy your password to be able to use wifi. be careful what you text and
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e-mail. everything is being monitored. >> thanks for being with us today. >> we will. a little more than an hour you can catch up with marcus on facebook live at 4:15 eastern time on do not miss the prophet in cuba tonight on cnbc. >> thanks for watching. "closing bell." >> starts right now. welcome to "closing bell." i'm kelly evans at the new york stock exchange. >> bill griffith. i love cuban food. dow looking to lock in a seven-day winning streak. another record close energy and utility stocks leading the charge today after a roughly 6% gain in oil. wti 6%. >> people find


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