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tv   Power Lunch  CNBC  June 30, 2017 1:00pm-3:01pm EDT

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have sectors like energy which will do better from a weak dollar >> global health care play nvo buying 46 calls in september i bought those stocks about 42 1/2 >> thank you for joiningous the "halftime report." "power lunch" starts right now i'm michelle caruso-cabrera. here's what's on the menu. closing out the books for the month, the quarter, the first half of the year the dow and the s&p and nasdaq posting strong gains so far. what do you do now your second half playbook straight ahead plus, trump, trade and the big threat of tariffs, along with repeal now, replace later the latest plans on america's health care. and raising the minimum wage the number of states have done it more preparing to do it this coming weekend is it really working out the way many hoped it would? "power lunch" starts right now
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if brian were here, he'd know that song i do not i'm tyler mathisen major averages in the green in this next, really, three hours left on this final trading day of the quarter and of the first half of the year the dow getting a boost from nike's rally on the backof its earnings beat out last evening check out what's moving right now. the dow industrials up a little bit. as you look at humana, becton dickinson all hitting new 52-week highs. it's also the last trading day of the first half. investors, so far this year, have seen some solid gains bob fisani is on the nyse floor. d dominic chu. >> thanks, tyler take a look at the sectors here. the key point is we're
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continuing to see mild resistance in technology for example, semiconductors are lagging a bit. biotech, which is another market leader lagging a bit a lot of talk about this rotation going on. look at the leaders in june. the big leaders have been tech, particularly semiconductor stocks utilities have done well as interest rates have stayed low overall here you can see semiconductors, biotech, utilities, all to the down side. laggards in june, the ones that have had difficult times throughout the years banks, retail and the other group overall have generally been moving on the up side banks up about 6% so far for the month of june here interestingly today, we're starting to see signs of rotation a little resistance to buying these tech names now look at the high volume etfs we've had out there recently today, we had great month for semiconductor stocks the smh high volume etfs
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that's to the down side. also heavy volume in country funds. italy, france and germany. this is happening for a simple reason we saw huge inflows into european funds in the last three months as the european economy is starting to improve today some people i think are probably starting to lighten up a little bit on that bet i still expect europe to do well, but, obviously, people have done very well on this trade and you can see people just sort of take a little bit off the table in the last day of the first half >> they might be frightened of what's happened in the european bond market as well which may have been one of the incentives for them to sell >> a great job explaining what's going on from tech to financials is it going to continue in the second half? dom? >> i started my wall street career back in the late '90s when you wanted to see both tech and financials participate in a rally as a sign of perhaps this continued move higher for the rest of the markets.
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over the last 20 years, we've seen a difference in performance on average for the second half of the year for the overall tech and financial sectors. technology, the best forming sector for the second half of the year over the last 20 years. kensho says 4.5% up side positive 75% of the time that's better than the overall mark ch mark chet is up 2.75%. and financials are up 2% on average, positive 60% of the time if you look at the sector etf, they diverge, converged overall but now you can see again financials playing a little catch-up and tech starting to roll over here the question, does that continue some of the stocks that will play into this seasonal theme, check these names out because they are some of the best performers apple, one of those stocks up 13% on average in that time span 65% positive activision blizzard. charles schwab and raymond skwams as well up 11%, 13%
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when it comes to traders and what's the biggest influence, we asked guys on the floor of the exchange this is what they said, tech or financials take a listen. >> the most important sector was last year as well as the financials >> financials will be the sector to watch >> if you can get the financials working back in, particularly if there's a hint of deregulation, i think then the whole market will pull together, and we can see new highs. >> that's the debate tech or financials a lot of floor traders say financials back to you. >> major averages have had a nice run the dow and s&p 500 up about 8%. the nasdaq up 14%. i would take that, retire, fine, good year right there. how should you position your portfolio for the second half? joining us is mike lashini and david frumpleman with riverpoint capital management let me start, mark, with you and
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what sticks out in your analysis for the second half of the year is that you think energy is going to be a much better performer than it was in the first half why do you say that? >> i think we're going to see a return to these more economically sensitive sectors as we wash out expectations here in terms of some of the punkish data we've had economically over the first half of this year. that will help to attract interest out of the defensive sectors and even tech into some of those more economically disposed sectors the second part is supply and demand i think opec plus russia -- i expect what we're going to see is firming oil prices on the back of investors realizing that that draw is not only occurring but is significant in nature and, therefore, that ought to be able to boost profits in the energy space and, of course, energy shares along with it.
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this year's worst performing sector by far. where you see the oil price. if you view that -- if your view is that production will not increase and will stay at roughly where it is, which is what i'm hearing you say >> i think production will increase, particularly u.s. shale production, but it's not going to be overcome or it will be that it overcome by demand. particularly coming out of the emerging market complex. i'm looking for mid to upper $50 a barrel >> let me turn to you and talk to you about the sector that has really led the way so far this year as opposed to mark's energy call let's talk about technology. is what we're seeing a kind of run of the mill rotation, a kind of normal and maybe even welcome pullback, or is it air coming out of a little bubble >> i would say the latter. we'd call it a welcome pullback. if you look at the fundamentals
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and technicals, technology is one of the most attractive it's up 33% over the last 12 months, and it's almost like, you know, a fine thoroughbred like secretariat at some point you're just going to see that gap filled a little bit and it's going to come back to the overall market just a tad. we would embrace that as an opportunity either to remix or add to the sector based upon the very attractive fundamentals >> you're under weight energy. respond to what you heard from mark about why he's telling investors to load up on energy >> you know, that's a really tough call we were just left of center, we did think the price of oil would probably be in a range of something like 45 to 55, maybe up to 60 this year and at the lower end of that range. and supply has been stubbornly strong and inventory stubbornly
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high and for us to get really excited, there's just better opportunity near term in a cyclical area like financials or technology near term that can shift if we start -- >> go ahead. finish your hought >> our view could shift if in the last, you know, just week or so there's news that's come out that production has been cut back that would firm prices up they've recovered a little bit we can shift the view but we're comfortable being neutral. >> so, mark and jeff, energy is a big area it embraces a lot of different kinds of players, lots of different names. i'd like to leave our viewers with either the subsectors within energy or the specific companies in energy and technology that you would be highlighting right now mark, you go first where in energy? >> sure. you want to stay domestic and focus on the unconventional drillers and emp companies
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the best, most efficient way to capture that trade is going long in etf under the symbol frak i think they are going to stand to benefit from two things one, higher oil prices which will make, obviously, drilling profitable, but in addition to that, i think it's the one space in the world in which you'll see production growth as opposed to the rest of opec and other non-opec countries cutting production >> mark says what the frak what do you say? >> no frak'ing way >> i guess i would say what the fang >> really good >> we like the fang stocks we like facebook and amazon within the social networking and internet area, but we also like, particularly, broadcom as a semiconductor stock with just a beautiful profile with regard to p/e versus growth rate
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trading at one times its eps growth rate and well positioned in 30% type of growth areas. and they are in wireless connectivity and components making various products for touch screen and blue tooth, wifi that type of thing we also like in the -- >> go ahead, tie it off. i'm sorry. please >> i was only going to say melanox is a name that is mid cappish in nature. $2 billion a contractor, too, in that hyperscale high-speed computing area you can really have a home run with a name like that. it would really matter to revenues >> mellanox. >> thank you have a great weekend, guys >> extremely appropriate if you've just been listening to this discussion. jackie de angeles. big news >> you can see that oil spiked to session highs on this news. baker hughes reported that for
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the week ended today, june 30th, recounts went down two however, this is significant because it's the first time we've seen a cut in 23 weeks that's since early january when that opec cut went into account. that's when the shale producers started adding rigs, and they just didn't seem to stop now this is interesting news because it also combines with what we saw in the eia report this wednesday that u.s. production went down 100,000 barrels. what happens here is you have the opec players that come out and announce a cut and we try to see if they stick to it and what not. but the u.s. producers, they self-regulate. they'll not tell us they'll do it they just report that they're doing it and then they manage these price fluctuations accordingly so you can see that prices maybe got low enough to create a little bit of a squeeze here, and this is when they start to act. what's interesting is if this becomes a weekly trend we see these rigs go down on a longer term basis. >> we can see when the price of oil might affect the rig count here it is
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>> right now trading 45.77 looks like we'll get a close over 45 today, which is technically significant, too >> jackie, thank you i think he rerouted his plane on that news. president trump meeting with south korean president moon at the white house today. did they find common ground on trade and north korea? there are lots of areas of contention here. >> we saw the two presidents in the rose garden giving a joint statement. not taking questions from the press but the session in the rose garden came just after a meeting in the cabinet room in which wilbur ross pressed the south korean delegation on particular, the rules on auto sales in korea by u.s. firms complaining that the quotas on those were not fair to the united states and also mentioning some other specific entities i want to play two snippets from each president back-to-back. and what struck me about this and see if it struck you in the
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same way is just how different in tone the two presidents were. the president of the united states very specific in his complaints about the trade relationship the president of south korea, however, offering a much more general open-ended kind of a statement. here's what they both said >> in addition, i have called on south korea to stop enabling the export of dumped steel these would be important steps forward in our trading relationship very important steps they have to be made not fair to the american worker if they're not and they will be >> translator: during my visit this time, president trump and i were able to forge friendship, as well as deep mutual trust as we endeavor to tackle numerous challenges ahead of uthiswill give us a solid foundation to rely on. >> so the president of south korea there not expressing the same misgivings about the trade relationship in fact, he said it was a very
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solid relationship and a good foundation we'll see from the read-out later this afternoon what, if anything, the two leaders have agreed on today. the president heading out this afternoon. he woent be staying at the white house this weekend he's going to bedminster, new jersey, up near you guys >> to add to what you are saying, the difference in tonality remember the earlier taped pl playback, the room full. president trump was clear. i want the cameras to stay and made wilbur ross make a statement about steel. made gary cohen read out a statement about how frustrated they are about steel and dumping. it was diplomatically impolite with what they did with the president of korea sitting there. >> normally you don't get to see that you see the warm opening statements and behind the scenes, an exchange of grievances and what you see is often they read out later the diplomatic speak is they had a frank
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xarchlg of vie exchange of views. today we got to see the frank exchange of views on tape, at least from the u.s. side haven't seen such frankness from the south korean side today. maybe as the day goes on, we'll get a little more from their side as to what they made of al that >> thanks, eamon repeal obamacare now replace it later the latest in a look at your second half playpook for health care plus, elon musk tweeting about the release state of the model 3. what they hope that news will be, coming up next you're watching "power lunch. on cnbc. first in business worldwide. last year, he said he was going to dig a hole to china. at&t is working with farmers to improve irrigation techniques.
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president trump calling for a repeal of the affordable care act immediately and replacing it later if republican senators are unable to pass their current bill john harwood is live in washington with the latest back to square one, john >> we saw the evolution of this new position in realtime this morning. first ben sasse, the senator of nebraska, who indicated in remarks on that fox television program that if they can't pass it in the next couple of weeks, they wanted to go to a straight repeal this was the plan republicans had at the beginning of the year that they then abandoned subsequently, after ben sasse
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said this on "fox & friends" this morning, president trump sent out a tweet saying if they can't pass their health care bill they should immediately go to repeal and do the replacement bill at a later date subsequent to that, kellyanne conway coming out in television interviews and saying this was a realistic path for republicans to first do repeal and then do replace. this is, however, not something that the senate republican leadership believes is a feasible strategy at this point. i spoke just a few moments ago to a source familiar with mitch mcconnell's thinking who said that ship has sailed earlier this year. they're down to the possibility of simply getting rid of some of the taxes that would have been repealed in the original repeal and replace bill use that money to make the medicaid cuts less severe and hope they can woo enough senators but even that is not likely >> the saga goes on. thanks, john the second quarter's best
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performing sector was health care it's a runner-up for the best performer in the entire first half of the year so far. what's ahead for the second half of the yoor aear, and will it continue to outperform let's bring in professor of health care investing. professor, good to have you with us >> thank you >> let's talk about the stocks that had benefited off the notion that perhaps there could be this bill that could actually pass the gains we saw associated with that, would they unravel if the republican goes to just simply repeal >> i'd be very surprised first, i should add, i don't see a straight repeal as a likely outcome, but even in that case, managed care, fundamentals are still fine and they're up quite a bit. most of the hmos have left the exchanges anyway you'll still see utilization for medical devices and biotech sort of is not connected to health care reform anyway >> right and that was sort of my second
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question and that is, you know, in terms of the sector rotation, it probably started even before the notion of a senate bill was in place. in particular, the biotech rally that we've seen was not underpinned by any sort of health care bill whatsoever. so you see that there's still strength, that investors still want to pour into these sectors? >> i think it's going to be hard to repeat the first half but the fundamentals are still really good, generally speaking for the sector health care, other than tech is the only game in town for any growth organics. so i don't see why people wouldn't want to come in you have to be a little selective. >> does it matter what happens in washington? you think the sectors buy it or am i oversimplifying >> demographics is destiny and regardless of what they do in washington and, to be fair, at this point the republicans are down to doing very little.
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even if they pass their bill i would say the underlying -- people are going to be sick whether the republicans repeal obamacare or not on a valuation basis and risk/reward basis, health care is in pretty good shape. you can't just throw money at it but managed care, medical devices and others >> you're beginning to go where i was hoping to lead you and that is to be selective here for us and tell us where you think the targets of opportunity are medical devices like boston scientific give us some other thoughts. >> some managed care say a united health is the bellwether that's another one that's had a terrific run this year but it's probably still a buy. we still own it. some of the under the radar companies. they handle basically the pluming of claims. health equity.
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health savings accounts. everybody, democrats and republicans like health savings accounts that looks like a good future. >> can i ask you one more question about -- i normally ask these questions about the bank stocks but i look at some of the forward p/es like health equity 93 cotivity 51, boston scientific 98 not too expensive? >> those numbers include a lot of charges and things. so it is lower i would think more look in terms of top line growth as you alluded to, they're still cheaper than the bank stocks >> les, thanks very much have a great weekend tesla shares have had a terrific run in the second quarter up 30% 70% this year so far been a lot of anticipation about the release date of the tesla model 3. a new tweet from elon musk could shed more light on that. phil lebeau is live in chicago with more.
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>> it wouldn't be a week if we didn't have a tease or two from elon musk. someone tweeted a question to him, when will we get the final unveil of the model three and he said news on sunday. they've been saying all along in july is when we'll have first deliveries, full ramp-up of production beginning of the model 3. on sunday, we'll get some details about when the final unveil takes place the production target for the model 3, theyincrease it in th months to come 5,000 per week by the end of this year. according to analysts, don't just get caught up in the model 3. look beyond that >> model 3 is important but what's more important is this bigger shift every tesla that's shipping today is going to be fully autonomous with tesla saying two years. hard to believe that i can talk about how that's possible but this is going to be a huge shift in terms of how we get around and tesla is a pioneer in this. >> that's the long-term view of
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tesla. near term? everyone wants to know what's going to be happen with deliveries we'll get the 2q sales 23,000, 24,000 vehicles delivered. that would make them fall in line with about 50,000 vehicles delivered in the first half of the year it's unlikely we'll get that when they give us the delivery sales figures which we expect them to be either this weekend or monday. that's usually when it happens at the beginning of a new quarter. shares of tesla versus the s&p 500 year to date not a whole lot of comparison there. tesla up 70% as you mentioned in the beginning this year. a lot of news coming this weekend and then in july, a lot moves to from tesla as they begin the ramp-up of production and deliveries of the model 3. >> when i heard the news was going to be out on sunday about the model 3, i immediately thought, the delivery numbers will be out this weekend, too. it would be smart for tesla to release good news along with
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some potentially bad news. >> i've heard more than a few people suggest that as well. our analysis for what it's worth, in talking to people who track it closely, they believe that tesla is likely going to be coming in at around 23,000, 24,000 vehicles delivered. combine that with 25,000 in the first quarter and they'll come in, what, maybe 49,000 or 50,000 so, look, even if it's 1,000 or two short, you know this, melissa. nobody is really focused on deliveries right now what they're focusod is what happens with the model 3 >> thanks, phil. >> cynicism, melissa >> i can't help it, sorry. the fight over minimum wage. does raising it help or hurt workers? two competing sties e udarout this week. we'll debate them next don't move you always pay
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on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance. i'm sue herera here's your cnbc news update for this hour. sergey lavrov says he hopes pragmatism will prevail at the upcoming g20 summit talks between russian president putin and president trump. he was speaking at an international conference in moscow three former tepco executives, including the chairman and two vice presidents, pleading not guilty in the first hearing over the fukushima japan nuclear disaster they are accused of negligence after the plant experienced nuclear meltdowns when it was hit by an earthquake and then a
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tidal wave in march of 2011. mazda recalling nearly 228,000 cars in the u.s. because the parking brake may not fully release or it might fail to hold the vehicles the recall covers the mazda 6 from the 2014 through 2015 model years and the mazda 3 from 2014 to 2016. birth rates dropped to a record low in the u.s. last year according to the cdc more than 3.9 million births in 2016, but that was down 1% from 2015 for the second year in a row, an increase in the number of premature births major averages right now in the green on the last day of the quarter and the first half of the year dow getting its biggest boost from nike adding about 35 points an agreement with amazon to sell a limited number of products on the site the dow and s&p remain on track but the nasdaq likely to post
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its first negative month since last october they'll all post gains for the second quarter the dow and s&p which haven't posted a quarterly loss since the third quarter in 2013. humana, cboe and c.r. bard tomorrow, oregon, maryland and washington, d.c. and 14 cities or counties will raise the minimum wage this comes on the back of two conflicting studies on the effect of raising the minimum wage and whether it's a good thing. one is from the university of washington which shows seattle's move to gradually increase the local minimum wage to $15 an hour has caused low wage workers to actually lose money because it reduced working hours there's another study from uc berkeley that says seattle's $15 an hour minimum wage law boosted pay for workers without costing jobs let's debate it now. cardinal martin is from the center of american progress. she is in favor of raising the minimum wage and michael saltsman is a research director.
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he's against it. good to have you here. i'm going to start with you. do i understand this study from the university of washington correctly which had an intriguing result which is they said companies actually chose to hire even more expensive workers instead, like $19 an hour, because they were looking for increased productivity in the workers that they had. do i understand that correctly >> i think that was one of the findings but a key takea way as you identified is that people who were supposed to see their take-home pay increase after the minimum wage went up actually ended up losing pay when employers were forced to reduce hours. they were working less hours overall. it's important for viewers to understand why there are two studies in the first place the mayor of seattle received an early copy of the university of washington report, saw the results and saw how bad they were for the city and so went to the berkeley team, which has never put out a bad study about
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the minimum wage and basically requested them to do a report to counter the other report they concocted this whole media strategy to discredit the university of washington study so i think what's really happening here is kind of an unfortunate case of study shopping and legislators n policymakers in seattle are not really wanting to be reflective about the real consequences of the policy they passed a few years ago. >> ms. martin, let me guess. you think the study out of berkeley is pretty good? >> first of all, what viewers need to understand is the university of washington study is fundamentally flawed. 48% of low-wage workers were not part of their study. their data set was incomplete. but -- first and foremost, i think that study was flawed. but we don't have to study shop. we have two decades of scholarship on the effect of minimum wage on employment we have hundreds of studies about half of them show that there's insubstantial positive effect in terms of employment.
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the other half shows an insubstantial negative effect. >> can i ask you about something. have either one of you been in seattle recently let me tell you about seattle. it's booming who makes the minimum wage there? does anyone make the minimum wage there how relevant is this topic at all? >> let's take a step back. the reason we study something like raising the minimum wage is because seattle is booming because of companies like amazon of that create a lot of high wage positions if we look at the employment of those companies and ignore what's happening underneath all of that, i think we ignore the real pain of this policy i want to point out, the idea this study is in any way fundamentally flawed, the authors of this study, it was funded by the university of seattle. they're using better data than anyone has ever used on a minimum wage study and the only reason some companies are omitted from the study is because -- >> 48% -- >> those 48%, those employers were separately surveyed bythi team of economists, and they were actually more likely to report consequences from the minimum wage than those smaller
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employers. if you engulf those people back in the study, things would be even worse >> who were the workers excluded from this survey, and why? >> they were -- the workers that were excluded were workers who work and companies that have multisites so the workers in their study were workers who work for an individual employer. so if you worked -- >> so starbucks? >> starbucks and mcdonald's were excluded bottom line is 48% of them were not in the sample size they were in the berkeley study, but then that's not the only evidence that we have regarding the impact of minimum wage as you pointed out, seattle is booming. their unemployment is 2.5% 1.5% less than the national average. now it just doesn't make sense there would be that big of an employment effect of the minimum wage change and not see any effects in the economy more broadly. >> the reason the economists have spent time studying the minimum wage over the years is because you can't just look at
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top line employment numbers and assume because an economy made of amazon workers and tech workers continues to grow that the minimum wage isn't having an impact those aren't minimum wage workers. what the university of washington team did is study minimum wage workers and found the same thing that a summary of the best minimum wage literature put out by the federal reserve bank of san francisco found a couple years ago which is that a minimum wage increase reduces employment the unfortunate thing is -- >> explain why a starbucks worker would be excluded from this study >> because they -- >> they didn't have the data >> they weren't included in the data this isn't a secret. they acknowledged this in their study. these people aren't included because they're not in the data, but we -- >> it doesn't change the fact that it changed the results of their study. >> i'm confused. >> it would make them worse. >> they were surveyed or the weren't? >> they were surveyed separately they were surveyed separately by this research team and those multichain employers were actually more likely to report
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consequences from raising the minimum wage >> but those workers are not included -- >> you said there are decades of studies proving raising the minimum widge is beneficial. things may be different this time around but perhaps are things different this time around because now employers, like a mcdonald's, who specifically, by the way, announced in the past week they are replacing human cashiers with 2500 kiosks, they have an alternative. we're going to use technology to replace jobs and that will be rewarded by shareholders for doing so on top of it. >> what we know about that panera is another one of those chain stores that just got my breakfast there this morning they are putting in kiosks in all their stores across the country. what they have found is that it increases the number of human labor hours that they need because it increases their productivity and, therefore, creates a demand for workers so that correlation between automation can be done in a way that's actually increases
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productatiivity and leads to mo work hours for workers and hopefully higher productivity leads to higher wages for workers. >> if anybody -- >> we've got to go good discussion. thanks both of you for joining us carmel and michael >> thanks for having me. >> definitive answer right there. still ahead -- serving up cocktails with an added twist. this is my kind of story here. does this start-up have what it takes to be the next big thing the power pitch is next on this holiday pre-day weekend, whatever it is first to mr. santelli with a bond report. rick >> well, thanks, tyler real quickly there may be some movement in the illinois general assembly. we all know that midnight tonight is a very significant time for what is an insolvent state in many ways we're going to keep our ears perked for any news there. looking at intraday of tens. we hit 230 intraday. we're snugging right back up to it
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settled at 2.14 last month maybe even more aggressive it may be moving higher despite some of the data we've seen and finally the dollar index it closed at 97.26 last week now well below 96. "power lunch" will return in two minutes, and you might see a twist on the martin scarelli case so stay tuned online u.s. equity trades... ♪ ...you realize the smartest investing idea, isn't just what you invest in, but who you invest with. ♪
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welcome back to "power lunch. reports that goldman sachs has sold off part of the ven zaezue bonds it bought in may all the numbers are the original face value of the bonds. they are trading at a steep discount it appears goldman made a slight premium. venezuela's opposition party saying at the time goldman was, quote, making a quick buck off the suffering of the venezuelan people by helping prop of the president. he warned a future government may not honor this debt.
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the reason they are doing it to get them trading, more liquidity which is needed if they'll be included in an index and get clearer pricing for the books. time for today's power pitch. it's all about serving up cocktails with an added twist. does this start-up have what it takes to be the next big thing >> do you know how many calories are in a margarita >> up to 800 that's a whopper with fries. >> we started b mix. it's the first all-natural and zero calorie cocktail mixer. it's as simple as one bottle with one shot of alcohol or soda water and you have the perfect cocktail or mocktail as a type 1 diabetic, i was never able to indulge in cocktails because they were full of sugar with two-thirds of americans being pre-di bettic and the rise of the conscious consumer, this goes way beyond just me. >> last quarter we double ourd same-store sales and continued
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to receive significant press coverage our product resonates with customers. it's capturing the $2 billion premium cocktail mixer market. online at www.bemixed.com. >> healthy margins above 50% we're now focused on expanding distribution so no one has to settle for a vodka soda ever again. >> welcome to today's "power pitch. you saw christina and jennifer's pitch. let's meet the panel alicia suret angel investor kelly howie and founder of the big beverage company. kick it off. >> talk to me about who you are actually target with this product? >> our target customer is anyone who cares about what they consume. we found great advocates, though in young women who are exercise aficionados, foodies part time and really love to have fun and
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socialize. >> kelly >> with a premium product, you have got to always be delivering how are you going to keep the product great as you scale >> we work really closely with the mixologist and the team of experts to make sure that the product is always tasting great and we're innovating and coming up with new flavors. >> jean? >> you have a great product n it's all about the taste so how are you going to drive trial and awareness for be mix >> we have our own brand ambassador team and once a customer tries the product, they love it. they buy it. we've also had wonderful partnerships such as soul cycle, equinox and now the four seasons in new york. and so those are other ways for customers to discover the product in unexpected ways >> we discovered the product ourselves. we had a taste test earlier today. what did you think of the product? >> i really like the cucumber one and i liked how you can drink it with or without alcohol. >> i'm with alicia on this the cucumber was my favorite >> can we expect more from you can just cocktail mixers
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>> there's a ton of opportunity for us through different seasonal flavors and form factors to really own the cocktail category. we are mission driven company and so it is about taking out sugar in convenient ways we have other product line extensions in mind >> this is a crowded space with some very big players. what's your competitive advantage? >> we have a proprietary sweetener blend and get the right balance using only natural ingredients, no preservatives. we've also been first to market with this product. we have wonderful distributor relationships, retail partnerships with club stores and other larger national retailers. >> okay. we heard from the christina and jen had to say we want to know if the panel is in or out? >> i really like the branding. i like the health focus of the product. i think they're off to a really great start. i'm going to go in >> my concerns, as you heard from the questions, were really about players in this very
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crowded market but their answers on what they've accomplished to date with partnerships, their hustle, i'm in as well >> all right, two ins. >> i was a bit worried you were pigeon holing this as an alternate to vodka soda which is so much big tharn that you straightened that out, and it tastes really fresh and clean. you're right on trend. i'm in you'll be a great success. >> clean sweep, ladies >> you all are our customers and we care most about what you think. >> that is today's "power pitch. are you in or out on be mix cocktail mixers? tweet us using #powerpitch visit powerlunch.cnbc.com for more the trail of martin shkreli taking a surprising turn meg is at the courthouse in new york hi, meg. >> hi, tyler a bizarre turn of events in the martin shkreli trial, something that's comes to characterize his
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trial on the fifth day as i arrived at the courthouse, i walked into the overflow room. the courtroom can't fit everyone who wants to listen in to the trial. i walked into that room only to see martin shkreli himself, the defend had come into the overflow room to talk to reporters, complain about their coverage, complain about the prosecution. saying that he thinks what resonated with the jury was the fact that none of his investors lost money or at least the one we heard from yesterday. that was sarah hason, who was the first witness in this trial who ended up quadrupling her money. the government isalleging that martin shkreli did commit fraud through the way he handled her investments. so that happening today. martin shkreli really doing this sort of unexpected thing in coming to talk to reporters until ben brothman, his attorney, came to pull him out the court has just gone back in session. the defense, ben brothman, is now questioning the government witness, fred hasson he's a very well known person in the pharmaceutical industry.
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he's a cnbc contributor. former ceo of schering plough. it was his daughter sarah who was testifying yesterday the way he's involved in this is that the government alleges that sarah hassan was testifying sara hassan testified yesterday that martin shkreli kept on using his name >> did you get the question from him it must be insanity? >> reporter: i did not get a question myself. our reporter was talking with him and asking him his thoughts on the case so far, he was insulting the district of new york and he was insulting the prosecutions and complaining
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reporters. >> was he calm or manic? >> reporter: no, he was very calm he had the poker face. >> has he started the tweets >> reporter: well, tyler, that's an interesting question. he's banned from twitter for harassing a female journalist. we should have asked him in the room it does appear that he's active on twitter and we have not confirmed that with him and his attorney >> got it. thank you, meg >> nike is on the move, a new
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nike's soaring they made a deal with amazon to sell directly on the site. >> bob is join us right now from new york thank you for joining us the deal of the early report they'll be selling with limited product. how much can we add on -- it could be up to 1% and global revenue at one point >> i think it is too early to put numbers on it. there is a pilot that they really want to get their hands around the opportunity but i would say the more important focus is they're paying attention to cleaning up and what's on the website as it relates to the nike brand and the presentation on the brand. >> i get they want to get rid of the third party sellers.
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can they move to ebay or some where else >> they can capture more revenues from that standpoint as they do a better job preventing the product. what we have seen over nike over the last several years they have paid more attention to the brand presentation either on the website or even in the stores, the brand does perform better overtime >> why don't i go to nike website if i want to buy it online >> i think they do >> nike has a vital website. i think this is more attention to a different alternative but also i think the consumer has migrated to amazon as a way of shopping, when you look and search and where they are, nike is going to provide the alternatives, nike.com or some limited asosortment products on
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amazon >> thank you for joining us. >> coming up, billionaire, kyle bass is telling cnbc, the relationship between u.s. and china just saw a big shift >> when you dthink of the diplomacy and manner that we handle our relationship, it is china, i think it took a major change and major step for the worst yesterday. i find the operatives to be questionable so is he right what does it mean for the u.s. we'll ask the former secretary carlos gutierrez at the co urf ow lch."send the new guy? what new guy? i hired some help. he really knows his wine. this is the new guy? hello, my name is watson. you know wine, huh? i know that you should check vineyard block 12. block 12? my analysis of satellite imagery shows it would benefit from decreased irrigation. i was wondering about that. easy boy. nice doggy.
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what do you think? not bad.
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welcome to the second hour of "power lunch," i am melissa lee, illinois is ill the state is on the brink to becoming first to be downgraded to junk status if it does not produce a budget this weekend. a crude come back, energy is the worst sector tell us why and where he's putting his money to work. and a circumstanclator staircasd retractable walls and an inside look of clive davis' new york
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city pad "power lunch" starts right now lets check the markets right now, dow and s&p 500 are on track and the nasdaq is down since october. the dow is higher by 80 points and s&p 500 is high by 8.5 home constructions are moving higher micron tech is the worst performer and lower than 4%. >> and on a second day of trading, blue apron is in the red trading at $9.25 welcome to the second hour of "power lunch." in the headlines right now,
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consumer sentiment falls the report shows uncertainty in the economy remains high >> e-trade is considering alternatives including selling themselves and hathaway is exercising warrants at bank of america applying of $700 million common shares virtual will become that bank. president trump is quote, "hail bent." >> elon with all the details >> that dramatic quote reporting on the trump administration over what to do about steel the commerce department is investigating whether steel import threaten our national security secretary ross says the findings will be released today but looks
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like he's going to miss the deadline the question is what to do about steel import the 20% are just one option. you can focus on countries and products and there are quotas only imports of a certain level would be affected. gary cone broadly criticized china earlier today during a "roundtable" at the white house. >> much of our biggest problems on trade has to do with economic relationship with china. we have maintained a very large trade deficit with china and it continues to grow. >> remember guys, back in 2002, president george bush imposed on the steel. bush was forced to lift them so we have been down this rope before back over to you >> ylan, thank you very much
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joining us now is carlos gutierrez under president george w. bush it is always good to see you >> thank you >> we heard remarks in the white house around the conference room table there this morning from there cohn and other and we heard the president speaking directly and bluntly to the south korean president and steel imports and his on sectiobjectio the 2011 trade pack. where do you come down on this and is the idea tariff have some strong support including the president, a good idea >> well, personally, i don't think so and i think we are moving at least, we are talking about manage trade if we start moving in that direction but, you know, we are focused on the objective of reducing the
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defic defici deficits >> the trade deficits. >> exactly >> the trade deficits. if you take for example, germany, they have a trade surplus of 8%. >> their economy is not growing as fast as ours. so a trade deficit and surplus is not a proxy for economic growth and what's happening is that we maybe able to reduce the deficit, the trade deficit because china may give us beef or we may get other transactions but the conditions inside the country don't change >> so totally for all of this, secretary gutierrez, can we talk about steel just a little bit more because we debate all the time of the obsession of the trade deficits that we see of the current administration and i am sure. you have been in china and every chinese economists i have met with behind closed doors, they admit china produces too much steel. they got a ton of factories they
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promised to close for nearly two decades. the regime there fears the lost of employment so they don't do anything about it. >> what do we do about that? >> by the way, i was in china two weeks ago, yes, they have excess capacity and steel, excess capacity to the point where they can serve north america, you are talking about some very big numbers. the thing is do you do that through the normal channels and do ad dumping analysis and comig up with a number and do it the right way or do you claim it is a national security threat at this point, it looks like the president will use his authority and claim that all the steel that's coming in from the china and from other countries is hurting the u.s. or is putting at risk of the national security of the country if he can justify that and i am sure he will, he can do that
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he can slap terrorist on china whether that's the way to solve the steel capacity issue is another thing. because chances are, because this national security concept is some what ambiguous, you can expect for china to do some kind of retaliations. i think it is a slippery slope and there is no doubt about it >> in what industry and what good wel >> well, radight now a big concn in china is technology they're asking company to turn over their source codes, that could be an area there are products where we don't pay tariffs and they can slap tariffs on those. i would expect in the area of technology, electronic payments and areas that are very
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interesting to u.s. companies would probably be the area but, i don't think they would standstill >> i ask you two questions, when you talk to chinese associates, what do they say about steel specifically can they see they have a vast capabilities and close the circle for me in terms of why chinese steel dumping would be a national security risk for the united states. that's the toughest question to answer on the first point, there is no question about it. every meeting, i have been to china twice this year and every meeting we have with government officials usually talks about the economy and the issue of excess capacity. they're well aware that they have an issue but that access capacity is in the ged number that we got in the past. if they do close down capacity,
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they have to lay off thousands and thousands of workers so they will talk about state on enterprise reform and it will come at its time, they know they have to deal with it, they just have not decided when to deal with it. >> they have been talking about it for a long time >> no question >> this is a huge problem. but i think what instrument do we use to get their attention. we can use a 301 or a standard anti-dumping case or subsidy case we have not really used the security argument. this was past 1960s, related to cuba and during jfk and we never really used it beyond that >> right >> this is the first time and what do other countries start using a similar argument or making a case for the national security interests
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>> i think that's the risk here. it is hard to make a case. i am sure the administration would do that. >> the president has absolute authority to do this former secretary, we appreciate it as always, it is good to see you. money pouring into the etfs creating a record of $3 trillion in management. more on that, what cab we expect >> lets take a look at the number so far, $240 billion in the first half of the year of a 10% increase that we have been seeing $2.9 $2.97 trillion, that's almost $3 trillion. positive 16 straight months of in flows why are we getting all these in flows? >> there are two reasons 3% per year. mutual funds of half a percent higher, that's a lot for the
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year so it is obvious why they are doing it and the money is getting spread all over the place by the way we have seen out flows this year by the way in june because of concerns with the whole trend around technology. nasdaq and elsewhere money is going to fix income in the united states and equity international fixed income as well >> here is an interesting thing. s&p 500 they are the same fund and same stuff in them there is a slight difference of how much they charge in a fee. 4 basis points and 5 basis points, all of that is a difference of five basis points. it is 50 cents per year for a thousand dollars investment. people are moving money into the cheaper fund out of the more
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expensive fund it is a race to the bottom is what we are seeing right now >> thank you very much, bob psani. the last trending day of june with the dow and s&p 500 down. the nasdaq at 14%. >> lets bring in our investment group. gentlemen, it is good to have you with us. you can take a look at the second quarter number, what really has happened in the past month or so is really distinct rotation we are seeing and out of technology, does this concern you? >> it does not concern us i understand technology stock led the market upward for much of this half this year, we are not worried of pull back really a lot of what's brought it down, where as the fang
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stocks only traded at 50 times. if you look at market shares, they're trading at multiples we don't see that spreading across the market. we believe rotation and financials and banking stocks should be well positioned and continued. >> ron, do you believe that? >> i think we are in the early stages of a corrected thomas hock market and technology led us on the way up but it is going to lead ounce the way down there were some concerns yesterday that if indeed they maintain the capital gains, to the ex thaent tent we are gettig rates and some sectors are over valued and there is a risk here that we have a 10% or 15%. >> ron, i heard the phrase, it is a healthy correction. >> what's wrong with healthy [ laughter ] >> at the end of the day >> what defines a healthy
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correction from an unhealthy one? is it where i don't lose money and you do >> your neighbor loses your job and depression, you do the same type of thing >> yeah, i don't know whether it is going to be healthy, i think it is going to be a correction of some sort, it should be in excess of 10%. the economy is slowing a bit that compresses market multiples. and you got no physical stimulus in the pipeline, you are running some risks in the market >> it is been 18 months since we had a correction day >> they normally come on a back of a slower economy. we are seeing synchronizing economic growth around the world. it is true the stocks are starting to look a little pricey s&p 500 have gone over 18 times earnings over the last six years. multiple expansions won't carry
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the day forward. it looks like earnings are poised to go 8% to 9%. you take that and maybe contract a little bit more normalization and tax out a 2% dividend deal, we should see 68% for the remainder of the next twelve months we see a rotation >> the other is synchronized global tightening. the potential impact of not just the rates but the bank of canada and bank of england all getting on the train at the same time, with normalization >> yes, a greater supply of bonds h bonds hitting the market you got the potential for bond sales or at least no reinvestments from the u.s. federal reserve into treasury and mortgages that's going to put an upwardpressure. we are starting to see that,
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there is long rate going down, that's now being allowed and rates are going up not only do you have difficult times getting multiple expansions because rates are going up, you have some difficulties, i think the economy is slowing a little bit. you got a double whammy soon to hit the market's triple. >> all right, ron burns, thank you very much, have a great weekend. here is what's coming up in "power lunch." illinois is drowning and facing the get a dead line of a new budget elon musk is promising news this week, what does he have up his sleeve we'll start the second hour of "power lunch." all that and more is coming up you always pay
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all right folks, the count down is on, for illinois to pass a budget deadline. >> there is still a lot that needs to happen, leslie picker irs joini is joining us now. >> reporter: that's right, no other states have gone this long without a budget no states have ever been downgraded to junk status yet. but, s & p says if the governor failed to pass the budget then illinois will become the first everywhere here in chicago and both sides of isle, we sat down with the chicago's mayor, a democrat who has some criticism
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for governor bro for the governor >> if you have gone to $3 billion to $15 billion, you are the first state to face junk status kids are leaving your university for the first time given the university of illinois is the premier in technology. i would look in the mirror and wonds wondering if you deserve to give yourself an a because everybody else is not. >> illinois powerball have stopped sales and megamillions are due to be hold tonight the state does not have enough funds to pay out the winners it will shut down road construction projects beginning today and it can cause thousands to be out of work. if illinois is downgraded to junk status, things will only get worse from here. >> nearly 25% of illinois' total
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budget goes to pension programs. that's kind of high, too >> what does illinois have to do to fix this problem? joining us now is the senior fellow from the manhattan institute on debt and institu s institutes and let me be clear here lou, i want people to understand that you manage pensions for local moneyalti mon municipalities and not for the sta states, you don't get any state funding, correct >> correct >> your pension fund is 90% funded compares to the state of illinois which is less than 40%. >> that's correct. >> you got any ideas for them?
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>> well, you know the problem in illinois has been fairly consistent that the state did not fund five pension funds and actually between 85 and 2012 the state under funded those systems by $41 billion that puts you behind the eight ball >> all right, do you have any idea of how they can make it up or what they have to do from here >> the pension is difficult to make up. when you mention $20 billion and unfunded liabilities here is the problem with that. that's not just money they promised to employees when they retire sometimes in the future that's also money that's supposed to be in the stock market right now earning returns about two-thirds of the money that they promised to people is supposed to come from stock market market returns. what's a 10% return of money
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that's not there > it is zero they have a long road up that's why you hear people -- >> so you detail the challenge that they face, steve. what is left for them to do? it does not feel like they can cut their way to solving it and there are court rulings and constitutional barriers to cutting the pensions, what do you do >> well, that's a very good question because he they're putting $8 billion which is a staggering sum for the state to put in. are they putting in another five or six billion dollars a year. >> so much money is missing. that's why people in washington and law professors are talking about congress creating a new foreign of municipal
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bankruptcies just for entities of funds >> that would mean, for example, forget the constitution, you could say all those people who thought they have a certain size of pension, is not happening that's what they are happening in greece, for example >> here is the problem, the illinois constitution says your pension is protected not just the work that you already have done but it is protected for work that you have not done. >> okay. >> that cannot save you money and it is economically irrational >> what federal law says, i earn my pension credit if i have them if my employees come in tomorrow and says to me, we have to change the system and reduce the contribution >> they can save the system. >> i don't know how you save the system >> louis, it is your turn and i
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want to hear how illinois got into this mess in the first place. is it as simple as politics wanting to make promises to workers and maintaining labor peace and at the same time wanting to tell taxpayers, you don't have to pay for them well, i think you hit the nail on the head. a good portion of what happened is the state made promises and have not gone ahead and funded those promises i think the important thing to know is we talk about the hundred billion or maybe $200 billion unfunded liabilities. all of that money is not doing payable today. you have a 25-year-old teacher who's going to be receiving benefits for 60 years into the future some of those obligations are not due in payable today a large portion of the state's budget is going to fund
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retirement benefit the state would come up with dedicated funding screens, come up with reasonable plan to satisfy that obligation and stick with it. i think there is light at the end of the tunnel. >> what about making people work longer so they're not living on their retirement benefits as long >> when i look at the stats of illinois, 60% are retiring before the age of 60 89% retiring before the age of 64 they're living on a pension for a lot longer than people anticipated. most people work in 65 >> well, that maybe true in some sort of circumstances. one of the things that makes me optimistic is that in 2010, pension reform legislation was passed and it increased the retirement ages, for example, the normal retirement age went from 60 to 67 and also put a cap
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on earnings that would be used in calculating, today that cap is about $112,000. >> that may seem like a lot. at the end of the day, that has brought down pension cause by about 40% and this was replicated through all of the retirement systems in illinois so it is not as if those early retirements and high pensions are going to be continuously paid in the future and a couple of years half of our members are going to be under the reform program and it will bring down costs. >> all right, guys, good discussions. we'll see how this unfolds with the deadline and the budget. good to have you >> energy sector is down nearly 14% this year. the worst performance group in the s&p 500. some of our guests are saying yes and elon musk asked on
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twitter and he responded silime with "news on sunday." we are talking tesla when "power lunch" returns ony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected.
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we are facing the brutal and reckless regime of north korea the regime has failed. many years it has failed and frankly that patience is over. the freeway in california shut down in both directions after a small plane crash landed on the southbound lane. it was right before the john wayne airport and koes costa mea 40 puppies were brought to houston to ohio by a rescue group. they're getting a chance at a new life animal shelters in houston are
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packed with puppies and many of thes these dogs would have been euthani euthanized they have a new leash on life. >> that's our cnbc update at that hour. >> aww >> aww >> so cute all 40 of them >> yep thank you. >> you got it. >> oil market for the day. jack si dea-- jackie. >> with that, it suffered a its worst half since 1998. going to the weekend, short coverings, u.s. production decline of 100,000 barrels a day. a weaker dollar supported as well all of this has to keep on progressing forward.
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this is just a blimp you can guess where prices going to go again. even a temporary, though we have seen this temporary pause, that does not mean production will not go up. what will we do with the extra oil? >> the trump administration says we'll be the next exporter in energy in 2020 that's three years away. president trump is playing this from a pure business perspective, we have a product, there is market share out there internationally, lets take it. make no mistake. a chess move like this have plymouth c political implications, too. for oil, we are talking like the saudis interesting power play, kyle >> thank you very much the drop hit energy stocks hard. the sector is down 14% this
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year the fumble of the second half of the year is a big turn around story for energy we should mention this year that some of those funds are under performing the sector. rob, welcome, good to have you with us. we'll get to that and why some of the funds have not lived up to your expectation in a moement what do you see as a catalyst that'll power energy for the second half of the year. >> thanks, tyler you know the energy sector has been down but it is not out. the u.s. energy sector operates some essential assets that are critical to the development of the global economy the fundamentals are set up for a second half come back, what's going to drive that? >> you are going to see crude oil inventories globally and domestically beginning to decline month after month. that'll support crude oil prices
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and boost the entire sector. >> why will those inventories going down because of higher demands and production cuts will stick and u.s. frackers won't increase production? >> the first one is opec opec has said they're going to do whatever it takes to go crude oil down we are going to see the impact of opec production for the second half of the year. the other thing is we are entering of seasonal periods and oil demands go up. we are about to enter the fourth of july holiday weekend, we are going to see a lot of driving and a lot of demand for gasoline >> prices are as low as they have been for gasoline heading into the summer driving season in year and lower than they were in january >> yep, that's a great thing, radioig right? >> the first three months of the year, people are concerned, are
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we seeing an increase in miles driven you are starting to see it now miles driven increase and while there is a reason for that, it is simply because oil prices are down and gasoline prices are low. low gasoline prices are a great thing. >> it sounds like you got a lot of faith in opec you still think they'll step back in even if they cut production once again, the fact of three years high of 10%, that does not matter. opec will win the day. >> good point melissa. >> opec does need to cut production and they're going to. >> rob, i am sorry to interrupt you. i am not sure opec matters anymore. >> opec is topped down and lets say they stuck with all their cuts they're going to do it here in
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the united states and we have a free market system and so when the price of oil rises, supply increases and price goes down, we saw it today of recount going down, opec does not seem to matter anymore it seems to me that you got to be more focus at what price levels is the u.s. profitable. when the price rises above that, we get more surprise, that's when supply goes down. is there a different way to think of the market now? >> that's a good point michelle. >> you are going to need both u.s. and opec to raise production of longer terms we have roughly half the oil supply and investing in the capital. longer term in 2018 and 2019, you are going to see more u.s. opec supply to that. that's the line where you are going to see the u.s. raise
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their production, opec will probably stay flat but $50 is really important we are still alittle way from that >> you see the impact. >> i have one last question rob. this is the question that people want to know if i have money today, would you put it in the energy equities if i am afraid it is too early to invest in oil or if i am afraid the bottom is not in for oil prices or not seeing $50 a barrel in the future >> i will say both i will answer your questions directly i would say put in your energy infrastructu infrastructure you get paid while you are waiting for higher prices. these stocks are critical and they're really important and operating essential assets and pay strong dividend yeeields rih now. putting in energy infrastructure
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are a great place to be. >> thank you, rob thummel, have a great weekend, we appreciate you being with us. elon musk teasing investors this morning saying that we should expect news on sunday >> colin at ups, it is great to have you with us all indications is pointing on what on sunday >> we know july 2nd is the initial production i think there maybe potential for them to allow customers to configure that and i think it will be the official announcement production. we'll see. i don't want to speculate on that >> of course, we'll get delivery numbers for the second quarter this weekend are you in line with the 24,000 number vehicles sold >> i don't think that's a big game changer for the stock >> what convince you colin, to get off the sideline for tesla
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you recently raised your price target to 185 which is well below where the stock is trading now. what will take us -- clearly, this company is not trading on pes, its got something going on. >> yeah, i would not say i am on the sideline, this is a very volatile stock, i think we go in the second half of the year, deliveries can be a big key here, you will see what the options for this car would look like on the interior, it could be disappointing if options are not up to expectations of $40,000 a car. next year, what competition is coming you are looking at the goals of what address the market and what shares will tesla have if we see competition names like audi or mercedes-benz will launch something and bmw later,
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we'll see -- >> that's going to be enough to cut the stock in half. >> well, right now we are pricing and we have negative earnings for the next few years and i mean right now a lot is priced in. we are looking at they're pricing in the next ten years and the next bmw, we don't think bmw and audi is going to sit on their hands. >> it is not about a car company, he's building something so much bigger, platform based on solar energy and technology and he's going to be supplying all kinds of things to you besides a car by that. >> i guess how much do you buy you are phrasing it a lot. they always deliver solid vehicles, i think we'll see for
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the rest of the industry over the next few years that'll diminish those opportunities all right, colin langan, thank you. >> you bet >> the 4th of july is a big barbecue weekend, those beef prices may take a piece out of your wlealt. "power lunch" will be right "power lunch" will be right back with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flilt by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.
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a used car,
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welcome back to "power lunch. we know earnings of nike and the story that amazon is going to be selling their products again, the start of the show, guys, the stock was up about 8% and now it is up 11.12% we are up to $36 million as of two moneys ago back over to you >> gaining momentum here before you head out to get your ground beef for the 4th of july barbecue, you may take a closer look on your price tag. aditi roy has more on this
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>> reporter: hey there this my cost more than it did over the memorial day weekend because exports tell me typically they see wholesale beef prices peeked mid to late may. they are not seeing the down shift in demand. they say the dollar have increased demand for beef x in the u.s. we are getting fewer imports for the same reason. there is some talks of beef exports in china it starts today would hype prices but most analysts telling me there is so many restrictions on the type of meat that can be exported, is not expected to have a sizable impact. it is not just ground beef affected, it is also prime state. since last month, he's noticed a side of beef is costing 30% more, right now he's eating and he hopes that his customers will
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enjoy pasta. he knows that's not going to happen when he comes to his stake house. steak house >> makes you want one. thank you. lets had our aare erin gibbh our s & p global we are seeing healthcare over technology >> look, technology in particular, these growth is super crowded. look at micron reporting at great quarter of stocks, look at it today, it is down off of solid. you can say from positioning alone, i can see the performance gap starts to close. it is heavily weighted with a lot of names not because of rates or yields
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start to get away with us. it is more of positioning the environment that we have a market that's driven off of the quantitative investors in the passive or etf investors they're not around they're driving the bus where it is going i do not think the growth is dead it takes the lower term a little lower. erin, what sort of sector would you look at? >> for us, we are looking at some what in technology as well as other financials. we are k llooking at this place between growth and value, s & p growth is under performing just for the month of june. we are seeing a shift in investor's preference. when you look at the earning growth, growth index has the earning growth for the second half of the year almost twice the rate of the value index.
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i know it diana costarakis not ma not -- i know it does not make sense. why is it named growth this is all about forward looking growth and not the past. this is what we are seeing for g the next six to 12 months. better growth as well as better valuations >> all right thanks have a great long weekend. for more market insights go to trading nation.cnbc.com. tyler. >> a major league debut one baseball player would like to forget we'll take you inside the manhattan penthouse of the music mogul clive davis. power house is next. and now the latest from trading anything.cnbc.com and a word from our sponsor. whoooo.
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stay want to highlight what's going won the ten-year yield session highs, hitting the highest levels since may 17th,
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2.3% we have got a three handle there. we are going to ask at some point whether or not there was a pivotal week when it comes to interest rates around the world because of what is happening with the ecb and the central bank here in the united states. >> interestingly we are at session highs in the s&p 500 a tight range on the day nine points up and down. time now for the power house each week we bring you inside the holes of ceos, celebrities and other industry moguls. today we bring you inside the manhattan home of one of the biggest names in the music superindustry. >> steps aafrom central park inside the ritz tower in midtown is the $7.8 million duplex of clive davis. >> he own a number of units in the building over the years. have this one was purchased for the use of his son and his family. >> reporter: he purchased the two apartments to create the residence that unfields over the
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is 13th and 14th floors. just past the living room with park avenue views is the dining room and chef's kitschen >> the most impressive part of this apartment is the circular staircase behind me. it is a piece of artwork on its own. >> down the spiral stairs are three bedrooms plus three baths including a master suite with a retractable wall that opens into the adjacent bedroom to create a mega suite in the bath behind the floor to ceiling mirror is a stealth door write mr. davis a check for $7.8 million and this manhattan duplex is always yours. >> the music mogul has lived in the penthouse of the ritz tower more than three decades. ilngug ifour other units in the budi sncluding the one you just saw up next, check please.
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check please >> time for check please a heart breaking moment in last night's yankees game dustin fowler making his major league debut in the first
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inning he goes after a fly ball and smashes into the wall. tries to take a step as you see, he goes down he ruptured his patellar tendon. i had that injury. my tendons were about 180 pounds and my body was about 2106789 at any rate, his season is over he will recover and be able to get back to the major leagues we hope sometime next year. you cannot control your lower leg when you do that injury. >> heart breaking. your first game. >> he hadn't even had at-bat yet. >> so sad. >> speedy recovery. this happened several times over the last couple of years. i ask that is this the week that rates finally turn it has turned in all the rest of the world with the ecb and what braggy said and what he unsaid and all that stuff about whether they are going the start normal aying policy
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2.3, it's not a lot on the ten-year but we are bumping up against some of the levels we've seen before. >> it is an extraordinary move in yields in five days that's key to remember four of five major central banks are getting hawkish. thanks for watching. >> closing bell starts right now. ♪ ♪ >> finally a song that we know that i start with. >> we'll make it, i swear. >> there you go. did you see u 2 was in town last night performing >> everyone has been talking about it. >> everyone i know was at the concert. >> except us >> exactly >> this talks about living on a prayer. >> yes. >> we can pick up that theme a little bit for our exchange here welcome to closing bell, everybody i'm kelly evans at the new york stock exchange. >> i'm bill griffin. we are hal

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