tv Power Lunch CNBC December 28, 2016 1:00pm-3:01pm EST
tax rating gobbling up smaller companies. on buyers wish lists, working on drugs for cancer and rare diseases seen as more insulated from pricing pressure. so clearly a lot of uncertainty heading into 2017 for biotech. folks trying to figure out what donald trump will do if anything on drug prices. >> meg tirrell. that does it for us. "power" starts right now. >> oh, yes it does. thank you very much. welcome, everybody. i'm tyler mathisen. here is what's on the menu as the dow keeps slip sliding away from that 20,000 mark. will we get there by the new year? you know my bet. it is friday, the 30th. we'll show you what the charts are saying ahead. plus, why now could be the best time for you to cash in your chips if you own chip stocks. and zillow has just named this celebrity the absolute worst next door neighbor to have of anybody. we'll tell you who that individual is today on "power lunch," which starts right now.
>> and welcome to "power lunch." i'm melissa lee. tyler mentioned, stocks are hitting session lows now as the dow moves further away from the 20,000 mark. right now, the dow is down 73 points, but the nasdaq and s&p 500 on our radar today, showing the steepest losses of the nasdaq down by .8%. we're watching shares of kate spade, rocketing higher on reports that the company could be exploring a sale. the company says it does not comment on rumors or speculation. we'll have much more on that story straight ahead. i'm michelle caruso-cabrera. pending home sales, they fell more than expected in november. down 2.5% while economists were looking for a gain. delta canceling an order for 18 boeing 787 airliners. a large part of new england under a winter storm warning. up to a foot of snow expected in my home state of new hampshire
and also maine. brian? >> i'm brian sullivan. let's start with this market and bob pisani at the new york stock exchange. bob, about an hour ago i got many my car and drove up the fdr to make it for this fine program. the dow wasn't doing anything. what happened in the last hour or so? >> a pleasure to see you. don't see you often enough. good to see you down here. the lack of bids. the buyers have dried up and we have had no direction for now, 11 days in a row. the dow movers here, there is no particular pattern here. you got industrials like boeing and caterpillar, tech that is weaker, consumer names, health names. no pattern. just a general droop across the board here. i know this is a holiday season, volume is on the light side, we're getting exceptionally light volume. volume in the big etfs, financial, energy, is less than half of what it normally would be. that's exceptional, even on a
low volume holiday week. let's summarize where we are right now in the markets. let's call this a low volume sell-off. there is a lack of bids, no buyers out there, you get normal amounts of selling that comes in with no bids, the price dropped to attract more bidders. that's what's going on. also, vague issues floating out there about early 2017 including the extended people withholding stock for sale around tax loss selling and pension rebalancing where several pensions that may have to rebalance need to buy bonds and sell stocks because we had such a big move in stocks and move down in bonds. this is very difficult to quantify, but all this is sort of floating out there. very light volume, lack of bids. back to you. >> very quickly, bob, want to get your comment, if you have one on kate spade, melissa gave the headlines, some reports that kate spade may be up for sale or looking to sell itself. stock is up nearly 19% right now. any reaction from the nyse?
>> give en the state of retail we have been hearing about and the difficulty with the overstored environment, i think you'll hear a lot of this kind of speculation going on with many, many other companies in 2017. with that said, my wife loves kate spade. as long as it is not going away, she'll be delighted to keep the company going. >> i suspect there are a number of women out there with cute kate spade bags. we're following a developing story on the trump transition. the president-elect expected to make a, quote, positive announcement on the economy within the next two hours. this coming from the sean spicer, running communications for the white house. to chief washington correspondent john harwood with more. this is something that is supposed to be good for workers, right? >> that's what sean spicer said. we have seen that president-elect trump is doing what any smart newsmaker does on a holiday week, creating some news, filling the vacuum, building some us is pepsuspense
course of the day. on the transition call, a daily event that sean spicer holds with reporters, he said this would be an announcement related to economic development. he didn't give any details about it. said he would keep us guessing. don't know if that means a factory deal, an agreement with some company to return jobs to the united states, a price cut from boeing on the new air force one. we just don't know exactly what that is going to be. we're told that it is going to come sometime after 4:00. and we're going to be watching that all day. as far as the meetings donald trump has been having today, we saw david rubenstein, founder and philanthropist go into mar-a-lago for a meeting with president-elect trump. he's meeting today with two ceos or by phone with marcelo claret of sprint and ike perlemudder and also elsa murano.
but by teasing this announcement early in the day, he's showing some of the promotional flair and skills that got him elected to the white house in the first place. >> absolutely. he certainly does, if nothing else, know how to build suspense and interest. let's bring in larry kudlow. joining us today from up in connecticut. welcome. good to have you with us. oh, larry, larry, larry, larry. do you know what's coming here? can you tell us? >> he can't -- >> larry is not hearing us. if he were, i bet he would give us a hint about what was coming up. and if he were, i think he would say he hopes it has something to do with tax reform. >> i can give you a hint. it is very positive for the american people. >> positive for workers. >> it would be very surprising to hear a presidential candidate say he's got an announcement that is very negative for the american worker. >> that would be unusual. >> that's my insight. >> trying to get his mike fixed? in the meantime?
>> why don't we do a bond report. five year notes are up for auction. also, rick santelli, we're watching a drop on the yield on the ten year note right now. >> yes, and i'll tell you what, that is a very good point. because this morning when yields were really strong, and the old standoff to the two year we auctioned yesterday put it close and taking out briefly its high yield close for this cycle, i thought everything would be in the cross hairs for test of 20. strong dollar, rate strong. by rates backing down, and stocks backing down, i would suspect that makes it more cloudy ahead. but to this auction in particular, in clouds here. 34 billion five year notes auction. what a concession we had wall the pressure on the downside rates to the upside. investors took advantage. i gave this auction an a for the ban at the straight up 1:00 eastern dutch auction. wasn't perfect. could have been an a plus. those 34 billion garnered yield of 2.057.
it was hovering between 207, 207.5. that's powerful. bid to cover, 2.72. i have a 12 year tale on auctions. i carry all the data, i can give you the grade. it is the highest of my 12 year database, couldn't find one higher. 2.72 the bid to cover just off the charts strong. i'm sorry. take that back. 2.72 is the best since 14. it is the 71.4 indirects i couldn't find a comp for in my 12-year database and 4.1 was the only weak part of this, that was direct bidders, ten auction average 6%. so the lightest since mid-2016, june of this year. even that, this auction is just stellar. i think what it tells me is we get close to year end, investors are starting to eye maybe the rebalancing everybody has been hoping for, where we reverse the current trends which means buyers for treasuries, maybe
sellers for equities. back to you. >> rick, thank you very much. now let's bring in larry kudlow, our senior cnbc contributor. good to see you. >> thank you. >> earlier, we referenced to the big trump tease. a message is going to be released sometime after 4:00 p.m. that will be very favorable for american workers. give us a hint, larry. what is it? >> i don't know. i'm sure mr. trump is going to have something to say about these very strong confidence numbers and his overall economic growth plan, tax reform, regulatory reform, energy reform, maybe better trade deals. it is hard to say. but you can see whether it is the stock market or the confidence numbers, there is an uplifting feeling going on. a lost pessimism is dissolving. we're finishing the year on a high note. i'm sure mr. trump will make note of that too. i hope he follows through on his
policies. that's all. clean the swamp, drain the swamp, i'm for it. >> draining the swamp, we can talk about that there are those who criticize whether he's gone about draining the swamp with some of his appointments, that being said, moving back to the idea that there is much greater confidence in the country right now, economic confidence, at least on the part of consumers, do you expect that that confidence is going to translate into heightened business investment next year, which i know is one of the areas that you have lamented lately and really think is critical for the future. >> i really do. and i think that there is a key point here, that is we're all expecting these very strong corporate tax cuts, repatriation, expensing and so forth, this is great stuff. it will be a huge tonic, a huge incentive for new business investment which is the heart of the economy. also will help profits. this will translate into more consumer purchasing power.
but, but, but, but, let me raise a point here, the timing is unknown. there is a discussion of legislative strategy going on in the trump camp and the republican camp in congress. whether they're going to do health care reform first, which i think they will, and tax reform second, later in the year, or maybe somehow combine the two. let me just say this, if you delay tax reform, you're probably going to delay a lot of the expected business investment and hence the economy may not be near as strong in 2017 as would be the case. >> the stock market would fall. if they decided that would be a second priority, larry. >> it might. it is hard to predict stocks and some people are, you know, positive on earnings and so forth. but, yes, i would think all of it. look, we're at a high fevered pitch on confidence this is good. but, again, big question, what will the tax rates actually be, what will the repatriation
actually be. will you get the business expensing? when will it take place? january 1st, 2018 or later? is it going to be retroactive. will it be grandfathered? these are key points. >> delayed until 2018, then i think back to your point, that means 2017 doesn't stack up quite as strongly as a lot of people are anticipating. >> this is my concern. >> on one little point, i'll get you in here, i promise, i swear. the repatriation which i think a lot of people agree is a good idea, why are we keeping all of this american profit overseas? we're keeping it there, because it would be more highly taxable, brought back here. but should the repatriation be in some way conditioned on how that money is used once it returns to our shores? in other words, should you get one kind of treatment if you use that money to invest in your
business, but a less favorable treatment if you use that money to enrich executives, or to do stock buybacks or to simply pay dividends? how do you feel about that? >> look, i'm a free market guy. i don't want the government dictating the use of money, the flow of money, as i said before, this whole business of repatriation, which could run one, two, three trillion dollars will oxygen nature the economy, put much more blood into the economy. don't tell business how to do it. it doesn't matter. look, if you buy back shares, you're putting money into the hands of stock holders and investors. they'll make good use of it. same for dividends. if you have m&a activity, it may rev up parts of the economy. the government shouldn't be picking winners and losers and now telling us how to invest. just let the market determine how the new incentives, lower taxes and expensing and repatriation, let the market dictate where those incentives
are going to be applied. most efficient. and we can grow this economy by 4%, 5% for a number of years, not forever. so, no, do not tell companies, do not tell anybody how to spend their money. no. don't do that. don't go there. that's a command and control economy. i'm a free market guy. >> we know. >> we know. >> free market capitalism is the best -- >> thank you. >> one thing i found interesting is one of the titles, i forget whose it was, maybe it was the trade guy from california, whose name is alluding me, it had the phrase in the title, industrial policy. >> i don't like industrial policy. >> i didn't think you did. >> i don't like -- i don't want the government to pick winners and losers. i don't want the government to subsidize fuels. i don't want the energy department to be a hedge fund. i don't want more solyndra. let the marketplace work based
on relative prices and profits and incentives. >> brian quickly. >> i can answer your question to larry, i've been on the phone almost every day with key off the record, on the record senators, the question about what comes first, i can tell you now with conviction, spoken to many people in d.c., health care repeal, number one job, period. i had someone tell me the seeds of repeal could be in place by the time trump is inaugurate ei. which is a risk. if you jab the democrats, still have some power on that issue, does it make everything else more difficult? there is the take on that. >> we have to leave it there. good to see you. >> thank you. happy new year. >> happy new year to you. i probably won't see you before then. i'm off tomorrow. coming up next, the tech stocks that were hot and those that were not in 2016. and they have been on a tear, but is it time to cash in your chips on the chip stocks? that's straight ahead.
the tech sector, the sixth best performer in the s&p 500 this year. but all -- not all stocks within the sector performed equally as well. josh lipton is live with a look at best and worst tech stocks this year. >> let's start with what did not work this year and that would be sales force. which is one of the worst performing tech stocks in the s&p 500.
down some 10%. street is still worried that ceo marc benioff could pull the trigger on a big acquisition giving his flirtation with twitter earlier this year. they point to increasing competition from rivals like microsoft. still, more than 90% of analysts rate crm a buy, a customer base now exceeding 150,000. from lager to leader, the best performing tech stock is invidia, by a long shot. they surged 240%. invidia semiconductors are powering many exciting fields that investors do want exposure to, including ai, self-driving cars, and video games and bulls say this stock has more room to run. >> what is driving the near term is the hard core pc gamer. we have new toggle releases coming out for the season. so battlefield 1 is out.
that's a high performance game. those hard core pc gamers want the next generation greatest gpu, it is a higher gross margin, higher performing product. >> not everyone is such a fan, though. just this morning short seller citron research tweeted the market is disregarding head winds for invidia like increa increasing competition. >> thank you very much, josh lipton. it has been a monster year for invidia. not everybody is bullish. citron tweeting they see it heading back down to 90 bucks a share in 2017. this is driving shares down. invidia declining to comment on that twoet. andrew left joining us tonight. let's bring in ramit shaw, with a buy rating on invidia. you've been resistant on the
story for quite some time. your price target raised to 80 bucks a share november 14th and prior to that, $55. you missed the boat on this. why do you think invidia can't go higher from here? >> we upgraded the stock to a buy back in june when it was trading in the low 40s. it has run -- all the momentum in one direction. i think to your question, though, there is two answers. one is, yes, i think the stock at nearly 40 times next year's earnings is overvalued. but, two, you know, i wouldn't be selling it today in front of ces. there will be a lot of hype around artificial intelligence. typically investors tend to bid up stops like that into an event like ces. >> one of the points that andrew left at sit ron wcitron is the
seller. that's one of the biggest lines of business. do you see that competition mounting or are there offsets here because azure and google, those can help drive gains here? >> i think the competition on the gaming side has really always been there. you can argue that their business has more sustainability to it today for the reasons you mentioned. not only do they have a strong gaming business, but they're also -- they have a presence in artificial intelligence, a presence in self-driving cars. i think the bigger question for invidia is next year what is the outlook for pc gaming demand. >> and what is your outlook at this point? there are some thought that, for instance, on gaming that there is stl a lot of market share to be gained from amd, that the
margins will go higher and there is an inherent upgrade cycle that has yet to take place. >> it is hard to say what the outlook for demand will be. one thing i worry about is that if u.s. and china relations worsen from here what is going to be the impact to this group because china is the number one buyer of pcs, the number one buyer of smartphones and they're the number one buyer of automotive. and these three and markets account for a substantial portion of revenues for companies like invidia. >> bottom line here is that you're not -- you think invidia has basically had a run, you wouldn't sell in front of ces. who uh- how is it valued now? would you sell? >> the valuation is astronomical. >> so that would be a yes? that would be a sell?
>> however, i do think that ces next week and i think you've got a reporting season starting with intel on january 20th, those are going to be positive catalysts for invidia. i would not sell it today. >> we'll leave it there, thank you. dow 20,000, so close and yet so far away. like tyler is to me right now. why haven't we hit that magical mark yet. we'll look behind the fades still ahead. big pop for kate spade. reports the company possibly exploring a sale. we'll have more on this after this quick break. 'rerowning in. 'rerowning in. where, in all of this, is thetufft matters? the stakes are so high, yo finances, your future. how do you sol this? u don't. you partnenewith a fm that advises governments d thforte 500, and, can deliver insight person to pern,
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welcome back. a possible credit card breach at the intercontinental hotels group. reporting that credit and debit cards used at ihd properties across the united states, namely at holiday inns and holiday inn express locations may have been stolen. they have issued a statement saying they are aware of the report, they have launched an investigation and they are recommending the individuals who think they may have been affected to closely monitor their payment card statements. the stock is fractionally down. to break.
as a supervisor at pg&e, it's my job to protect public safety, keeping the power lines clear, while also protecting the environment. the natural world is a beautiful thing, the work that we do helps us protect it. public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. we want to keep the power on for our customers. we want to keep our community safe. this is our community, this is where we live. we need to make sure that we have a beautiful place for our children to live. together, we're building a better california. i'm scott wapner. here is your cnbc news update at this hour. iran says it warned off u.s. drones and fighter jets during a military drill that took place over the last three days. officials told local media outlets the aircraft were approaching iranian air space.
the u.s. has yet to respond or comment. when it comes to health care, americans spend more on treating diabetes than any other illness. a new study which looked at spending over a 17-year period found patients spent $101 billion on diabetes treatments. heart disease was the second most costly. the tsa wants to remind everyone what not to bring on a plane. the agency releasing these photos which include wrenches, a hammer, even a blow torch. all things passengers recently attempted to bring on a flight. and you are looking at a live nest cam from southern florida where two bald eagles are about to hatch. mother and father can be seen taking turns sitting on the eggs. that is your cnbc news update this hour. remember, no blow torches, no wrenches, and no hammers. >> what if i need to fix something? >> leave it up to the professionals. >> what are you going to do? >> really, people trying to
bring that? come on. >> thanks, scott. time for the good, the bad and the ugly in today's trade. kate spade, company exploring a possible sale. working with an investment bank to find buyers according to dow jones. 15% gain. on to the bad, gnc posting all 4400 of its stores today. it is reworking the pricing system. some of the products had four different prices at the same time. and it is an ugly day for fred's. the drugstore chain, the new york post is reporting possible regulatory concerns about its proposed takeover of 865 rite aid stores. the stock is off 4%. >> now to the technical analysis o on why the market is struggling to reach 20,000. joining us is ari wald. a tight range. >> dow 20,000, probably more psychological than significant.
now, i would suppose if there is one indicator that does suggest why there is some hesitation here, i think it is really in the sentiment indicators. one in particular that reached more cautious levels is the investor intelligence bull/bear ratios. more recent readings above three, a big swing from where it was pre-election, below 2. i would say this argues for a potential pause in the trend. it would indicate there is better opportunities. >> a contrarian indicator. >> contrarian indicator. now that everyone is bullish, who is left to buy. >> right. >> i don't think it is really a reason to be bearish, however. couple of reasons. look back in 2013, this measure stayed pretty high above 4 for much of what was a very strong rally. and to the underlying characteristics of the market are very strong right here, whether you're looking at internal breadth, credit, or leadership. here the high beta versus low volatility ratio. this is indicating which areas of the market are doing better.
this recent inflexion, that shows that the market is embracing more high beta, offensive areas of the market. this is a good thing. usually you're going to see gravitation toward lower volatility, instead we're seeing this breakout from a multiyear downtrend. to me, this indicates a bullish bias is warranted. >> risk april tide in tpetite i right now and people are bullish in general. so what does that mean in terms of levels? you technicians might pooh-pooh dow 20 ,000. what level should we be looking for come 2017? >> i think 2017, i think this is the year we have a 10% gain in the market. if you look at -- >> 10% in the whole year? >> the whole year that would point to 2500 on the s&p 500. >> that's just according to the charts. >> that's according to the charts. assume that i think february 2016, that was a major low in the market. if you look at the average gain in the second year following the
major low, 10% gain. >> ari, thank you. ari wald, michelle. that was a technical look. let's look at a fundamental look as we ask this question, dow 20,000, when will it happen? could it happen before the end of the year? joining us are nancy tangler, and scott rehn. nancy, what do you think? think we manage this in the next couple of days? does it matter? and more importantly, what do you think about next year? >> well, thanks, michelle. good to see you. you had a long day. >> yes. >> i don't think we get it before the end of the year. i think we see it -- we hit the 20,000 level sometime in january. i know that's not a terribly insightful prediction. we're very optimistic. if you look at the earnings, the consensus estimates for next year, 7.5%, and i think close to 10 for 18, and that's before we factor in any of the potential economic policies that we all
have been talking about, and their impact on earnings, not to mention the repatriation which will improve not only capex but buybacks, so we're very bullish and we think that 10% is achievable, no problem. dow 30,000 in the next four to five years. >> wow, okay. scott rehn, what do you think? dow 20,000 before the end of the year? >> i think we were going to see it this week for sure. today's action, we're running out of time, may not see it this we're year. if we don't, it will be very early in 2017, i think. certainly fundamentally i think we'll be back and forth above and below 20,000, a bunch of times over the next couple of months. and in contrast to the other analyst -- >> to nancy. >> -- yeah, to nancy. i would love to see nancy's number in the technical number come true as well. but based on our analysis, we're expecting a pretty flat year
this year after really the markets ending 2016 pretty close to where we thought it would. >> why do you think that? she said look at the earnings estimates now and that doesn't even factor in all the other expectations about what could come as a result of a trump administration, lower corporate tax rate, whether it is lower cost because of the repeal of obamacare. >> we would argue that, you know, very little of what has happened since the election is really based on trump's policies. i would argue if hillary clinton would have won, the market would be close to or at the levels we're at now. so the market might get a little worked up on what might or could happen two years down the road, the effect on the economy. but, you know, i think very little that the trump administration is going to have to do with what the economy is going to produce in 2017. >> do you agree with scott who just said that if hillary clinton -- it is academic, obviously, if hillary clinton
had won the election, the market would be roughly where it is today? >> i'm going to respectfully disagree. i don't -- i'm not arguing that it wouldn't be, because as you say, it is an academic exercise. >> it doesn't matter. >> but i do think there is plenty of potential for growth that is fundamentally driven and the policies that president-elect trump is advocating are pro growth that will very much impact -- >> president obama would have won a third term, the latest talk show meme. >> i heard he would have. i heard he would have. >> that's what he thinks. >> whatever. but let me ask both of you, nancy, maybe you go first, there is a lot of, i think, scott, you might put it this way, might be, could be, possibly can be. are we building these stock prices on a lot of hypotheticals, corporate earnings that really have to deliver or whether it is
anticipation of major policy change? nancy, you first. >> thank you, tyler. i would say we always do that. that is what we do as investors. he we take the facts as we know them and extrapolate. i will say this, having lived through multiple administrations and very different fiscal policies and monetary policies over the last 30 plus years, the formula for growth is before us. and we have turned the corner from an earnings standpoint in the third quarter, and so i with say that at the margin, from here, the news is positive for corporate america, we already talked multiple times about 1% tax cut goes to 1% earnings growth, and while we all know that, and we also know that -- we all know something, it is usually wrong, it -- there are all of the factors in place. to scott's point, some was in process. but we are being given a tailwind that i think is very much going to help corporate america. >> to nancy's point, where
always the market is always a discounting mechanism, always anticipating one thing or another, but the spirit of my question is is the market anticipating a little bit too much? >> i don't think so, ty. i think that right now based on the fundamentals that are going to be out there over the next six or 12 months, the market is where it should be. do i think that president-elect trump's proposals or progrowth absolutely. i think they're going to take a long time to refine, debate, implement and finally have an effect on the economy. and i think even though the republicans control the presidency in both houses of congress, there is lots of disagreement among republicans with trump's proposals and there is not a whole lot of them that are going to be red stamp items, rubber stamp items that just pass and immediately, you know, we're off to the races. i'm hopeful with the proposals. i think it is going to take time
to implement. i think the market will start to worry about inflation, wage inflation, fed behind the curve in 2018, and that's going to take a little steam out of the mark net 2017. >> it is going to be one very, very interesting year or two. >> absolutely. >> we'll be watching it together. nancy and scott, thank you very much. >> thank you. >> happy new year. >> we showed those eagles sitting on those eggs. the dow will not hit 20,000 until those eagle babies are born. >> hatchables. >> that's deep. >> once the eagle babies are born, new 20,000. >> let's watch it. keep the eagle cam on remote 135, please. >> picture in picture? >> yeah, picture in a picture. >> was it or wasn't it? that's the multibillion dollar noneagle question right now. will the holidays turn out to be a late boom or a big time bust for many retailers? the potential winners and losers next. one retail winner, kate spade,
that stock soaring on reports of a possible sale. is there a possible buyer? we'll get more. stick around. ony neighing at? hegary. ony neighing i'crazy ressed trying g wfigu out ts compx trade i brought in my comfort pony, warren, toelp me deal. isn't that rightarren? well, you d get support from thinkorswim'-apphat. deal. it ls you chat and share your screen directly with live peon right from the app, so you don need a comfort pony. oh, so what abt my tivationaleerkat in-app chat on thinkorswim. only at td ametrade. 3-d printing is changing how business is done and the owners of hv 3-d works in harmony, pennsylvania, are helping the car world get up to speed. they're revving up ways to apply this technology to the auto industry.
we're just noticing, the overall number on the s&p 500 is not down all that much, about two-thirds of 1%. look at all the red there. quite a while since we have seen each one of those lines is, what, 50 stocks? so what is that, about 25 stocks are positive, about 475 of the s&p 500 are negative. that's what's called bad bread, folks. >> a lot of stocks are slightly lower. >> new numbers out on just how retailers have done so far this holiday season. kate rogers is here with that story. kate? >> well, consumers seem to have been spending more in the final week of the month.
new date why a analytics founds rose 6.5% year over year, but the data from december 1st through the 26th shows sales down over 10%. one week doesn't really tell the whole story just yet. retail next data draws on responses from 1,000 retailers in the u.s. the last minute shopping surge is welcome news as spending was slower in november, falling 3.5% year over year, despite a strong jump in online sales according to the national retail federation. separate data from mastercard shows the beginning of november through december 24th and helped to push retail sales higher by 4%. official stats from government and retailers will be out next month. in the meantime, president-elect takes credit for consumer confidence an the market rally. he noted this is the highest the index climbed in more than 15
years, adding, thanks, donald. >> you specialize in -- >> i want to thank myself for that. >> we talked about small business optimism. and it has been soaring post election. maybe he's on to something. >> that's what i was going to ask you about. you take the pulse of small business, what do they say? >> they're saying that foot traffic has been pretty consistent, people are coming in stores and as we saw last year and every year that small business saturday has been around, people are excited about the idea of supporting local businesses. the one thing they do note, while foot traffic was up 112 million versus 95 million people on the small business saturday holiday this year, the spending was lower at 15 billion, compared to 16 billion last year. that number is huge because they include things like independent restaurants on the shopping holiday, which drives it very, very high. >> got it. >> people are coming in. supportive but not spending much. >> more people spend less money, it is pretty significant. average ticket fell. >> exactly. >> a lot of discount. >> brian thanks you.
>> thanks, brian. >> from one kate to other. kate spade spiking over 17% now. some reports it may try to sell itself. let's bring in mary epner. before we get to the broader holiday themes, the report, kate spade, to have a seller you need a buyer. >> good idea. >> you think anybody wants to buy kate spade. >> absolutely. it is a great brand. it is globally one of the strongest ones as far as advertising and marketing. however, we hear when customers go into stores, they're very disappointed with the product because it is very basic, and therefore ends up competing with the likes of michael kors, ralph lauren and it is a price gain to buy them. >> basically made? >> missed the boat fashionably and the quality is substandard and they're disappointed in it
for the price. >> this is not a luxury brand. it is an aspirational luxury brand. coach is also. >> coach is doing well. they have a lot of fashion. they upgraded. the quality you saw four years ago has simply gone. and now it is much better and sold very well for holiday according to our checks. very different story. >> what kind of buyer would want kate spade. it is a turn around story at this point as well. the handbags, coach is in the midst of its own turn around. michael kors having some difficulty. they're probably not in the market to buy. tory burch? >> i think that -- i'm not sure about tory burch, but i think an apparel brand might want it. they don't want to have to create their own handbags. they want a system and supply chain that is up and running and all they need to do is distribute it properly.
>> who does that suggest? >> anybody in the midtier apparel brands. could be somebody in -- >> like vf. >> vf corp. >> they buy everybody. >> g3. >> brazilians. >> exactly. so you could see -- i could see any of them doing that. i think that ralph lauren was such a strong brand, except they never had a strong handbag business. if they took the likes of that and put it together, it could be a nice combination. >> if there is a brand with a voice, kate spade has a very clear and strong voice in terms of its style, right? a lot of humor in the purses. it is very fun. you can look at it and that's a kate spade and you know it. >> right. ralph lauren is trying to update and get younger. their handbags look very dated. they look very traditional. and that's not really where the customer is right now in the
handbag sector. >> they're struggling to turn around. >> they are. but making headway because they're closing a lot of divisions. laying off people. >> who has the hot bag now? >> coach is hot. gucci is hot. and saint lauren. they're performing well. everybody else is competing on price. >> dinosaur bag, coach. >> outstanding. >> is that -- >> the dinosaur bag and it is the monogramming of it. you can do monogramming and the little stamp imprint of a sea horse or a dinosaur or something like that on the bag at the register and have it ready for christmas. it was a big seller. >> all right, mary, thank you. >> thank you. this is the statement that kate spade just sent in. the company says it does not comment on rumors or speculation. the stock is up by 18.8%. on deck, the big wall street calls you need to hear today. the infamous traitor and i know a thingor twobout t. so i trade wite*trade, e true traders trade
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we're looking at shares of avx down by 5% right now. >> thank you very much, seema mody. time for street talk. daily dive into the key wall street calls of the day. holiday week, harder and harder to find them. four of them. >> these are all the wall street calls. not the ones we like. these are all of them. >> the ones we could find. finish line, credit suisse more cautious, lowering the price target to 19 from 23. it was unable to lapse significant execution efforts last year. that means the analyst does not have conviction that exhaustion will improve in the near term, so estimates go down. >> you wonder if this is sort of a harbinger of what is to come in retail this holiday season. amazon, and -- i wonder if --
the people we have spoken to, they said they're a little worried about the season. second stock is bank of new york melon bk. ray mmond james upgrading it. the target boost to 57 from 50. they have punderperformed most banks and they believe the stock will benefit not only from a steeper yield curve and fed rate hike, but increased equity trading volume as well. big custodial bank. very optimistic view on bank of new york. >> that's what might not have reached, increased trading volume as a result of the election. have to wonder whether there will be upside to this consensus estimates. >> you wonder. >> third stock, amazon named ever core isi's top internet pick. amazon best positioned to leverage the data science trend. retail, data driven efficiencies
in addressable markets in terms of geography. amazon's ability to act on consumer insight, prime membership, evercore, 999 price target, breaks out to 671 bucks a share for retail, including cash and $320 per share for amazon web services. >> i mentioned this that this morning, is there a headline risk with donald trump? he made negative comments about amazon in the past. they'll have some trouble or something. i wonder if the market is discounting any government risk from amazon. i don't know. trump has said. we'll see. >> i think the biggest risk is the stock has not been doing much over the last few months. look at the chart there. >> final stock, avexis, small cap call of the day. 1.3 billioned market cap.
not an upgrade. but positive comments from biogen. pricing should be about $750,000 a year. he thinks that the competing avxs 101 treatment, the product that goes defense biogen, will be priced as much as $1 million per year. he's got a buy rating on vxs, $79 target, more bullish, $85 target. one of the biotech stocks that andrew left. >> that assumes that this competing drug will be as good as -- >> and improve everything. >> thanks, guys. it is said you should love thy
♪ chris martin there. welcome to the second hour of "power lunch." melissa is here. michelle is here. brian. the gang is all here. enjoy it. it won't happen for the rest of the week. >> the rest of the year. >> will not happen for the rest of this year. >> are you on bass? >> i'm on bass with this man. two hours until the closing bell. here's what we're watching right now. if you thought today was the day you probably got to think again. another bump in that road to 20,000. the dow in the red. >> that was freudian. >> freudian. >> on the way to 20,000, baby. warren buffett crushing it in 2016. making more money than anyone else in america. stock pick of the ultra rich. home flipping, it is back, it is a frenzy, rising to crisis
levels. the best and worst celebrity neighbors of 2016. brian sullivan guessed it on the first shot. we'll make you wait and guess for later. >> we'll call it the adventure of a lifetime. other market headlines on this wednesday. if you're looking to shop at a gnc store today, you're out of luck. i mean everywhere. the nutrition retailer closing all 44064 stores across america, a reset on prices and strategy. stores will reopen tell. as stocks fall you can blame real estate, materials and technology. why? they're the biggest s&p drags now. down 1%, only four of the nasdaq 100 are higher. that goes to bad bread. other winners today, coach, we talked about them, having hot bags. vf corp. and allergan. when stocks opened this morning, the dow began gaining steam and
dow 20,000 hoopla was back in vogue. and then the buying dried up. now back to bob on the floor of the nyse. is anybody give a reason? i heard concerns over china growth. maybe we'll talk about that, higher oil. what is the reason that the buyers have fled? >> we're so used to having the dow go up or going sideways that when you get a day like this, pretty nottest decline in t emo dow -- we have a simply classic low volume sell-off. extremely low volume. even for a holiday weekend. so there has not been any leadership in the dow or in the major sectors for two weeks in a row. now there is not any buying interest. that's a perfect combination for a drift lower, exactly what we're seeing today. when i say lack of leadership, put up the dow leaders here. we have no leadership with industrials like caterpillar. we don't have leadership with tech like intel, consumers like
disney haven't been doing anything. most disappointing, exxon and chevron should have moved up in the last two days as we hit new highs in oil. didn't happen. just 2% to 3% move there would have gotten us to dow 20,000. that's a disappointment. the banks haven't done anything. there is no leadership right across the board. it is not that anything is dropping that much. it is just nobody is that interested in buying. low volume etfs. i account for the fact that this is normally a low volume week. i'm saying we have -- the financials, energy, consumer staples, utilities, and materials. when the bids dry up, in a normal market, you have sellers, no bidders, price dropped to attract the bidders. let's leave it at this. lack of bids, some other broader issues out there around tax law selling and pension rebalancing at the end of the year. i think simply a lot of buyers are acting like, folks, we had a good year, done for the year. thank you. >> got it.
bob, thanks. what else is holding us back from hitting dow 20,000. what are the stocks and sectors that could push us higher. brad mcmillan, tim seymour. brad, let's start with you. what is holding us back from 20,000? >> we goltt a little ahead of ourselves. we got a little bit ahead of ourselves and now everybody is stepping back a bit and saying, i think we're good. >> should we take solace in the fact we haven't seen a sharp sell-off. today, when you're seeing as much as we have seen, the breadth it negative, and the s&p is not off by all that much. >> i think this is the dog that isn't barking. we have a very low volume day.
we have people saying okay, it is the end of the year, the holidays, i'll step back. we're within inches of the all time highs and we're not pulling back. it is not that there is weakness. it is that simply we're taking a little bit of a break. you look at the improvementing fundamentals, there is no reason for the market to drop. little bit of a break is okay. >> what is the best way to play it. this is just a break and we're going higher? >> i think if you're in, you should stay in. if you're looking to put money in, i would dollar cost average over the next couple of months. buy every two weeks or so over the next couple of months. we may see a pullback early in the year. chances are the market will move too. >> all sectors created equal? are all sectors created equal? >> no, certainly not. we're looking at financials, looking at consumer discretionary. want to bet on the american consumer, a lot of risk out there, a lot of political risk in a number of sectors.
the consumer, wage growth continues to rise. job growth is doing very well. that's where you want to see the consumer confidence, want to bet on that. >> brad, thanks so much. brad mcmillan. >> thank you. >> let's get to tim seymour on tips going to 2017. good to see you. you think january will be kind of nasty when people realize there are, in fact, head winds out there. so what can we look for in 2017? sort of a mean reversion period in january where the things that gain the most post election may fall back the most? >> i think things that were going well before the election can continue to go well. i think the move out of cash into assets that return more favors housing, pulte is the great big cap kind of discount to the pier group in that sector. m mlp, the energy sector looks alive and well. so i think industrial metals, things that are related to the inflation trade will do very
well. they already had a bit of a pause. i think despite the dollar strength, these types of both assets and correlations have done pretty well all things considered. my point is, look, we had three positive januarys in the last ten years, even though this is traditionally very decent month for allocation. you have tax selling, could be a bigger factor this january. and enormous run. i think the dynamics behind the trump trade are alive and well and i think profitability is being rewarded out there. i think companies that are going for it are going to be rewarded. i think taking risk right out of the gate just because things have gone so well isn't necessarily how you want to play this. >> do you believe in the consumer right now? we're getting a mixed bag from the retail sector now, today's session, a lot of the biggest decliners are retailers. and you like home building stocks. one would think that consumers feel good enough. >> if they have job and wage growth, the consumer will be feeling well.
there is no question this is somewhat a result of the elections. and rhetoric around tax cuts and corporates also being able to be more aggressive in hiring. some of the costs in the regulatory environment have been relieved. there is structural flaws with a lot of retailers, which are not just about the internet and e-commerce being a head wind. i think disinflation and apparel costs, you big ubiquity, inven. >> are we worried about china enough? whatever china has sneezed in the past, our stock market has gotten a cold. we're seeing the currency move. we're starting to hear some rumblings out of china about credit, growth concerns. is china worried we're not talking enough about? >> we talked too much about china in the past. this weekend -- >> that was then this is now. now we're talking about 20,000.
>> guy puts a pair of glasses on and he gets aggressive. >> i'm taking them off, big boy. >> china, in a tit for tat on the new administration, i think is something i should concerned about. i think there will be retaliation against american companies. chinese industrial growth is moving sideways and has for the last two years. 51, 51 plus on pmis. credit issues are not a good story. investor in an emerging market, china will hurt that asset class, it is the biggest wading. don't invest in the eem. pick companies, oil economies, inflation trades, places where i think even mexico which will outperform and actually might be the best trade across that spectrum. is china worse now than it was a year ago. no, we're talking more about it last year. be focused on china as a factor for markets. >> that's a great point. know what you own in terms of the china wading. thank you. as we see selling in the stock market, with he see buying
in the bond market. rick santelli is standing by. >> big, big things going on the slow day. look at the intraday of fives. notice, of course, right after the a auction yields moved down. that should be expected. here is what is fascinating. we made our high in this maturity on the 15, the day after the tightening, the 14. and the day before, the 13th, where this chart starts, it is a last time we settle under 2%, which is exactly where it is right now. 10s, look at intraday of tens. it did the same thing the fives did, thinking, wow, people like buying here. maybe this rotation, rebalancing, is happening. we're buying some treasuries, some stocks. and the same scenario. when is the last time the ten-year closed under 2.5, where it is now? the day before the tightening. the day after, when it made its cycle high. these are key levels on a key day in front of the end of the
year and looks as though things are starting to leak out with respect to the recent trends. back to you. >> rick, thank you very much. here what's coming up on "power lunch." big year for warren buffett. the ultra rich and the best and worst celebrity neighbors. we'll show you what happens when brian talked to alexa. that's coming up. all that and more on "power lunch." we're also on eagle alert. the nest cam in southern florida, two bald eagles about to hatch. hatchables. mother and father. >> different bird or rotated? >> romeo and juliet. >> maybe the bird rotated. i don't think the camera did. there we go. >> the bird just moved. >> yeah. watch that bird.
i happen to be a fan of hillary and i think she'll be the winner in the fall. >> warren buffett was wrong about the election, he still made a lot of money afterwards. his fortune grew more than any other american in 2016, according to forbes now worth $74.2 billion and the big reason, a 25% gain in shares of berkshire hathaway. you see the big move, post the election. forbes said he made $3.5 billion
just since november 8th. >> a lot of that his holdings in financials and railroads. >> ibm. >> ibm, exactly. >> that's called appreciation for donald trump, right? >> i'm sure he's thrilled. right now on our way to dow 20,000, we hit a snag, down 100 points on the dow jones industrial average. we're about half a percent,let watching the broader indices on the nasdaq that is taking on the chin down by .9%. 48 points. and the s&p 500 down by .8% here on the day. we're at session lows on the s&p 500. >> warren buffett wasn't the home billionaire, great gains in 2016. some others who did well for themselves include harold hamm. he was up 8.8 billion. jeff bezos up more than 6.6 billion. casino magnate sheldon adelson
rose 5.6. let's bring in michael sonnenfeld. we're a little confused about how -- what is tiger 21? not really a hedge fund, not a mutual fund, not a private equity fund. explain it a little bit and how i get to invest with you if i can. >> so, first of all, we're not a fund at all. we're an organization of high net worth investors that meet across north america in 30 locations, 400, and 85 of some of the best entrepreneurs. and wealth creators. and our members come together to share ideas on wealth preservation, wealth growth and legacy issues in a private can confidential setting every month and then an annual conference that sort of is a mini davos that will take place for members only in boca raton.
we're an organization of entrepreneurs that learn from one another in a peer to peer learning format. >> i see you're in jackson, wyoming, where i was this summer, one of my favorite places in america. about as beautiful as it comes. the average portfolio composition for a typical member is heavily weighted toward real estate and private equities. and among public equities, it is an awful lot of index funds. explain what these smart people see in index funds? >> when you become a wealth preserver as opposed to a wealth creator and looking over the horizon, you're trying to figure out how to have a stable portfolio and not react to every left and right turn. and so the public equity exposure of 20% with indexes is the most efficient way to expose yourself to the public markets. you were talking before about what smart people are doing. well if you just own the indexes
this year, you would have had a fantastic year. and our members generally have created wealth through companies that they owned and created or been partners in. and private equity is the big story over the last decade. it has gone from 10% of our portfolios to now 20%, 21%. for first time topping public equity, real estate remained ting at 28%. >> i see when it comes to specific stocks, alphabet, amazon, apple, microsoft. does that give me a hint as to who some of the members are since you talk about wealthy entrepreneurs, who pull -- are you pulling money when we show people assets up der management, is somebody managing them? >> no, we track our members individual choices. and we do have some tech entrepreneurs, but most of our members come from the broad base of american, from five guys hamburgers and companies built
where you roll up your shirt sleeves. once you created wealth, technology is one of the top choices today and the company you mentioned, berkshire hathaway is one of our top picks. the big transition in our portfolio is that this year for the first time the top two public exposures to the etfs on the s&p, which talks about a philosophy, rather than a sector. >> i know you said a lot your members are wealth creators, now into wealths very preservation. have you noticed a desire to go out on the risk curve after the elections? >> so obviously a number of our members remain active traders and they, in one of our groups, they talked about what do we do if trump versus hillary and they had their list and placed their orders that morning of the election. most of our members are taking a much longer term approach and they're particularly cognizant, this week in one of the groups we were talking about what
happens after the new administration takes place. it is going to be harder to govern than they think. is this a bump before the inauguration and a dump after the inauguration. for the traders in our group, the people who are actively trading, those are important considerations. for the longer term invests, they're not looking at that. they're looking at long-term asset allocation and focusing on the top three, real estate, private equity, generally, where they roll up their shirt sleeve and participate in small companies like they had created their wealth from in the first place. and then an important component with private equity. >> part of your wealth created by an infrastructure lighting, solar lighting, we have seen infrastructure stocks go nuts. is that overdone? do you believe we're going to have an unprecedented infrastructure boom? that's your world. >> so infrastructure clearly is
the most talked about issue and the trump administration is talking about some very large numbers. they're going to have to weigh that against whether that's inflationary and how it gets financed. there is no question that if you bring the jobs back, and one of the points we should point out is when we talk about the loss of jobs that fueled the trump administration, it is only 15% off shore. 85% have been lost to technology and nobody is going to unplug the robots and the computers so it is going to be entrepreneurs who are going to create these jobs and these are the people who are members of tiger 21 who talk about how they can recycle their capital to new startups, roll up their shirt sleeves and help a younger generation get the companies off the ground and create jobs for the future. >> final question, yes or no, are your members putting more money or less money. right now, 6%. more money or less money into hedge funds? >> my guess is hedge funds have been correlated to interest
rates and with low interest rates we have cut our exposure in half. if interest rates pick up, not only are the financials going to benefit, but hedge funds will once again be able to deliver better returns. so my guess is if interest rates rise, you're going to see a little more exposure in the hedge fund area. >> thank you very much. the trump team saying it will mack a major economic announcement this afternoon. we'll get the latest live from the white house. to break, another check on the dow right now, we're at session lows, down by half a percent. the s&p 500 also sitting at session lows.
hitting dow 20,000 before year end got a little harder because the dow taking legs down throughout the last hour or so. we're at session lows now. dow down 104 points. this is only the second triple digit drop for the dow since the election. we're now at 19,842. we need about 158 points to get to dow 20,000. the s&p 500 on pace for its worst day since before the election. get this, of the nasdaq 100, of which there are 100 stocks,
three are higher. i'm not a math whiz, but that says to me only 3% are higher. do you care to contradict? >> not today. >> fantastic. >> guess what's back in style? glasses. fewer than 100 stocks on the nasdaq because of mergers. guess what's back in style. flipping houses. back and better than ever. almost madness. wee face some of the same big risks this time around. we'll find out. outputs are expected to kick in. can china scuttle oil's recent run? that's next on "power lunch." tat ciis dly use treats edand thuri. your door abouur medicines, anask if your heart healthy engh for sex. doot take cialf you ke nittes fochest pain, as this y use annsafedropbloo. pulmony hypertension, do not dri alcohol in excess.
>> earlier secretary kerry defended the united states' actions and said settlements are threatening peace talks. scary moments for shoppers that the texas walmart where authorities say someone called in a bomb threat. police were on scene, customers were allowed back into the store 30 minutes later. lots of gifts means lots of returns. u.p.s. expects to deliver 1.3 million packages back to retailers, a record for the shipper. it will return 5.8 million packages by the end of january. one gift that may be going back is the hatchimals toy. parents are taking to social media claiming the interactive toy is failing to hatch from its plastic shell. which would be a bummer if you're one of the little chickies that got one. >> that's the whole point. they're supposed to hatch. >> it doesn't hatch, it is doesn't work. >> maybe the eagles are sitting
on hatchimals. do the redskins win by more than eight? >> sure hope so. >> i think so. you're in for 100. >> thanks. >> we thought today might be the day. with 90 minutes s ts to go, we still about 49 points away from dow 20,000. excuse me, 150. i'm losing track how much we're down on the dow. >> closing in on dow 19,000. now to jackie deangelis at the energy desk. >> so far we thought every day would be the day when you look at crude oil futures, higher with energy stocks weighing on the equity market. crude eeking out a subtle over $54 a barrel. some nice support at these levels. intraday session high, 54.37. there are skeptics still, but we're seeing some short covering to add some support here.
what are they skeptical about. about opec and if it will stick to that agreement. they're watching the moves that we saw on the dollar. another increase today. watching u.s. production to see what happens with rigs and what our output numbers will be in the department of energy report tomorrow. a couple of things to think about. if you want to believe we could stay here. aside from crowd oil, the rest of the energy complex was up as well. we're just under $5 now, breaking through the resistance of 375. you had expiration today and that contributes to some of the volatility. also, some weather forecasts out there, bullish for nat gas prices. we're looking at a very, very dig drawon in that inventory report tomorrow. quite a turn around in crude oil. prices are up 46% just this year. which also makes energy the best
performing s&p 500 sector, up 24% this year. will we see more gains in 2017? is energy going to go up or down next year? >> up, then down. i think it is a two-prong really take here. we'll go the beginning of the year with cuts. i think crude hits $60 in q1, but range bound, $5 to $10 range for most of '17. and the u.s. shale producers, rig count bottomed mid-may, probably go out 8.7, 8.8 million barrels a day. we peek out at 60, range bound for most of 17, wider range 50
to 06. the rising tide will not lift all boats. being be within the range there. >> the cure for high prices is high prices. do you think at 55 or 60 bucks a barrel we'll see production go up, not own here, but opec will cheat, maybe china slows down? why won't that happen this time. >> it will happen but to a degree. on the nat gas side, we're more comfortable with that. we have positive nat gas demand. strong demand for mexico. and nat gas, the production won't rise as quickly as the oil production will. doesn't come on until the back end of 17. we'll go from undersupply 1.2 million barrels a day to reaching equal lib rum and
oversupply in early 18. >> got to focus on oil. natural gas has been the gold to oil and silver. we don't talk about it. 32% in three months. will that a big moneymaker than oil? >> yes, it will. it will be a slaver less beta sector. go with nat gas more so than oil, i think, in my opinion. >> roberto, happy new year. big four was brexit. despite the big drop initially, it is up 14% for the year. >> you'll see it is also outperforming germany and france in 2016. heading into do 17, strategists
say brace before the volatility when theresa may starts the negotiations. we're access to the single market will be the key agenda item. keep an eye on the bound. down 17% against the u.s. dollar this year. that could continue to help exporters. venezuela stocks have been rallying. argentina moving on the leadership change and whether the president's policies will continue to kick start growth. higher commodity prices a big part of the story, helping brazil. mexico down 12% on track to close lower for 2016. relations will be the focus in 2017. if we look at other stock
markets to end lower. third largest lender, now seeking the help of the government. keep an eye on china. the shanghai composite is lower. relations between beijing and washington likely to be a big part of the conversation next year as well. >> that's what we're thinking about had it comes to president-elect trump becoming president trump. 2016 come to a close. today, john harwood opens the 2017 playbook with a look at what you might expect in politics. >> if the 26 campaign taught us anything, it is the unpredictability of everything. so anyone making predictions about his first year in the white house not to mention those of us who thought he would never
get there in the first place better do it with humility. in 2017, president donald trump will sign tax form into law. but won't be competencive tax reform of both the individual and corporate systems. at least one of president trump's cabinet picks will be defeated by the senate. even though republicans control more than enough votes, open siks democrats will hook for opportunities to peel off a few moderate remembers to block trump picks they consider too far out of the mainstream. tom price favors big changes to medicare and medicaid. incoming president will not rip up the nuclear deal the outgoing president struck with iran. even though he criticized it
during the campaign. mr. trump wants better relations. the new president may monitor the deal, but getting rid of it is not worth the trouble and the risk. one wild card that has arisen since i taped that piece, we had competing statements today from john kerry, u.s. secretary of state open opposite sides with benjamin netanyahu. we expect donald trump will have what his aides have called a significant announcement on the any. commitment development would benefit. we're going to be kauwatching a
we'll bring it to you. house flipping is making a big comeback. is that a good sign? which celebrity is worst to live next to. we'll have the annual poll of americans. y cole. hey! i just wanted to than for walkg me throu only it for everyone gy.tra. well, i feel pretty smar we, we're l abt educating people on optionstrategies. won't let this accomplishm we, dgo to my hea i'm ststl the same o gary. waityou forgot your fnch dictionary. get helpons tradg with thkorswim,
could 2017 be the year of the home flipper? wall street journal out with a story today titled, as home prices rise, home flippers make a comeback. that is based on a new report out from attom. let's bring in darren holmquist. good to have you here. >> nice to be here. the dollar volume is a lot when it talks about the number of loans to do this house flipping. but how many houses are actually being flipped per quarter and how does that compare to the peak of the market before the crisis? >> we're on track for 2016 to see 192,000 properties flipped.
homes flipped for 2016. that's a ten year high, the highest we have seen since 2006 but it pales in comparison. at the height of flipping we saw over 330,000 homes flipped during that year alone. >> we're still -- people think, my gosh, can we be going back to a crisis. we shouldn't be thinking about it in that crazy context? >> not quite seeing the crazy levels of flipping we saw ten years ago. but we're seeing earmark of some of the flipping things we saw going on ten years ago. >> such as. >> you look at the number of people flipping. we're on track, through the first three quarters of this year, more than 111,000 end
takes palestinianed homes and that's the most we have seen since 2007. some are trying to make a quick buck because the market is going up. >> you have a cool stat, gross profit per flip. >> yes. >> reached a high in 2005. what was it? we're back there again. we're showing the people on the screen now and hem are making how much per transpaks. >> that's what's drawing them back into the market, on average, this -- they're making 60,000, over $60,000 per flip. that's a gross profit. the difference between what they buy it for and sell it for. but if you can make that gross profit and the average time is 180 days, six months, that's a pretty attractive return for a lot of investors. >> you have to fix them up sometimes. there is costs when it comes to
the financing. where is it happening mostly and what price range? >> the decor bread and butter for the flippers are between 100 and $200,000. we're seeing more markets, middle american markets that are seeing a lot of home flipping. memphis, 11%. places like miami, tampa, orlando, las vegas, and phoenix, the places you would think of that might be on a reality tv show were showing up. some of the surprise placings where we're seeing high plofts are places like cleveland and pittsburgh and philadelphia and baltimore and new orleans. >> why? >> well, that's where you can find a flipper a discount eed inventory. in those markets, the average
flip was making a 9 5% grow return on investment in those reports. flippers that is different than ten years ago is the average age of homes being flipped in 2016 is 38 years old, think of a tom brady or peyton manning. but if you go back ten years ago, the average age of a home being flip is 21 years old. it needs more work in this flipping environment. >> got to. interesting. thanks so much. which celebrity would you like to live next door to. zillow asked people, the obamas, they got 14% of the vote.
the second most desirable neighbor that people mentioned, dwayne "the rock" johnson. there you go. >> single women? >> i don't know. who does america -- >> smell like what the rock is coming. >> and worst celebrity neighbor is justin bieber. he clashed with neighbors in the past for driving too fast on local streets and having parties like the ones you see in this video. >> you wish. >> that could make him the best -- >> the best neighbor. >> can we go back to the first one, though. >> the ebahamas. living next to any former president, doesn't matter who it is -- >> two teenagers at home, the worst. >> there is that. can you imagine living next
to -- where are you going? to the mailbox, i live here. >> yeah. i think the next president will see so much security. telecom, can the run continue into as we head out, wa look at stocks. they're hitting close to session lows right now. s&p 500 down about 18 points. the dow down 101 points. it's only the second triple-digit down since the election. "power lunch" will be right back. [vo] quickbos intrucesjeanette.o go
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take a look at the action in stocks. they are lower. the s&p 500 telecom sector doing better than the s&p 500 sectors. amy young, analyst at cory research. amy, glad to have you with us. >> thank you. >> the big unknown is whether or not neutrality will be overturned. how do you put that into a model for the universe? >> we're actually pretty bullish on telecom.
we have a table that will work for both cable and telecom stocks. i think that will help them price better for broadband. >> but you don't expect that to happen until 2018 or so? it's another year until that could happen? >> at the earliest, it will probably happen in summer of 2017, but certainly i think investors are going to start price that go into the stocks already. >> in terms of some of the combinations we could see, obviously we've got at&t, time warner that's going to happen at this point, but you see some interesting combinations between some cable companies potentially and telecom companies? >> clearly we're in an era of deregulation, and i think that bodes really well for m&m activity. this leaves open some of their strategy which could actually include charter. you could see a more horizontal immigration between comcast, charter and other cable companies including altise and
privately held ones like cox. obviously t-mobile and sprint have been big outperformers because of potential. >> do you see a cable company like comcast to be in a deal with a mobile company like t-mobile or something? i'm just curious, because after the at&t-time warner deal, you wonder what the new pipes will be, the new pipes being broadband and your phone and you've got new contacts as well. >> certainly i think there will be comcast and cable lines convergence. i think certainly comcast charter could combine ultimately with t-mobile. that is one scenario that could happen over the next few years. >> all right. thanks a lot, amy. appreciate it. happy new year. we should note that comcast is a parent company of cnbc. so what happens when brian, as in sullivan, takes control of your amazon echo remotely? >> disaster.
aln i for a non-stop, sweet trt goodness, hold o y yr tiara kind of day. aln i get 24/7 digestive support, with alig the now in kids chewables. probiotic bran we learned something, i think, fairly important on yesterday's show. we can talk to your alexa. watch this. i've just learned via the twitter machine that when we say "alexa," some people's echoes turn on. so you could do something like,
alexa, why is tyler mattis so hand some. alexa, play some billy joel. after that, this viewer sent this video as proof that his alexa acted with our voice. >> alexa, some people's echos turn on. so you could do why is tyler mathis so handsome? and play billy joel. chill, dog. alexa, order some bones. >> they were not able to answer why i'm so handsome, however. you can keep asking that question as many times as you'd like. >> i'm going to follow that guy on twitter. >> by the way, brian, the three stocks in the nasdaq 10 0100 we lower, therefore, three stocks were lower. the actual answer is 107 stocks. this according to ryan hum.
107 stocks on the nasdaq 100. >> how is that possible? >> two classes of various sessions. >> let's look at the eagle. the eagle flies. flies like a beagle. >> great shot of the eggs. excellent. >> double egg shot. more eagle shots. hello. welcome to "the closing bell," vrn. i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth. don't adjust your tv screens. the dow has stalled despite moves higher. the major averages are now on track for their first decline in three sessions with materials and re