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tv   Power Lunch  CNBC  October 25, 2017 1:00pm-3:00pm EDT

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>> you guys think of it at this rate, a little yun set, this too shall pass >> yeah, i want to mention grubb hub quick. what a day for this stock, this is taking out a high i've been dead wrong on it, i thought amazon would kill it, uber kwoo kill it. >> it comes back to food all the time stocks having their worst day in two months. investors throwing cold water on the latest earnings. nike shares are spiking higher mid session. mark parker meeting with investors at this hour, we're going to have the latest headlines coming out of that meeting. and banning texting while walking. one u.s. state today making illegal to do just that, are other states going to follow suit we'll speak with the man who made the push.
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hey, you, yeah, you, right there, put the phone down. power lunch starts right now >> the dow lower, you can see it off about 1.60 ge falling again the transports as a group seeing some selling too that group don as well is this a sign of concern going-forward? viva mexico, the dollar dropping against the peso the biggest stock, now up 18% since that election. two big consumer stocks on the move state side, chipotle, dropping to its lowest level in five years, and underarmor down again, the c class, that stock trading at its lowest levels since being spun out >> here's what else is happening at this hour new home sales jumping to their
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highest level. soaring almost 19% from a year ago. durable good orders also rising 2% last month. that was well above expectations, royal caribbean says it's cruise ships are returning to two ports tyler? >> thanks very much. tyler math isen here, for our net net summit new way companies are leveraging rapid change, using technology to fuel growth joining me today, later on this hour, mark kelton. the flew way to compute the value of companies, david martin, the founder and ceo of mcam international explains. we begin with the market, stocks sitting around session lows. off about 3/4 of a%. bob pisani here. early on it had to do with a rise in interest rates bolstered by all of this good
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economic data. >> you heard them, durable goods. take a look at high yield etf, this is all above the 10 year yields there's been reports that taylor may be a favorite at the fed chair, a lot of people are debating what that will mean for the markets. there's a technical factor, look at the s&p 500, we've been relentlessly up for ages now, this morning, we broke below yesterday's lows that started selling around 10:45. about 401(k)'s back in there, there's some reports out that the 401(k) program may be on the table. not terribly helpful for the markets. another leg down there
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you look at the company's reported earnings, you say oh, my heavens, they must have been terrible what was going on with their margins. that's a big momentum name freeport, hess norfolk southern boeing. they were fine, inline or better numbers there. it's been the overall action of the market, 5,000 points in the dow jones industrial average in the last 18 months 1,000 points that creates pressure on the markets. people want to sell when you get a little bit of down in the market you can see that in the banks today guys, even with the ten year yields moving up. >> do they always cheer when you're on like this? >> oh, yeah. all the banks down today the banks hit all new highs, the momentum's been there. when you get a slow day like this, the momentum guys make some profit. >> we'll see you next hour, if not sooner. >> thanks, guys, now to washington and kevin brady
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repeating that changes to 401(k)s are still on the table the president has said there will be no changes it's congress that writes the laws, not the president. it's kevin brady who chairs the committee that writes tax laws who should we believe? >> it is called preserving option ailty brady has a tough job of trying to respond to the latest trump tweet, but also, making these numbers actually work as republicans try to hammer out the details of this tax bill one of the proposals was reducing the amount you could contribute to your 401(k) without paying those taxes they want to lower it to $2400, the current total is $18,000 i spoke to brady after this tweet came out, he was leaving the door open to at least some
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sort of change. >> bottom line is, we want americans to save more and save earlier in their life. and earlier in their incomes today they don't we've got to find a better way at the end of the day, we're taking a fresh look at the savings plans, the savings vehicles >> they have got just a week to try to hammer out these details before the plan comes out on november 1st, republicans want to try to get this passed out of the house by thanksgiving, the time line is aggressive. >> any idea where they get the 2400 level to go to 18,000 per year how do they come up with 2400 number >> that's how much the average worker actually does contribute to their 401(k), people usually put in less than that, they may not have $18,000 to spare. perhaps that's where that number
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came from, if the whole idea is to incentivize people to save for retirement, you may want to have a higher number to encourage them to put more aside. >> in the meantime, reaction from the trump administration on the latest 401(k) development. >> we'll start with the president's tweet that you heard elan talking about it seemed pretty definitive, there will be no change to your 401(k), this has always been a great and popular middle class tax break that works and it stays. i talked to a senior administration official earlier today, who said there may be a little more wiggle room in there than you heard in the president. the president's preference is that the 401(k) proposal will go away the they can't guarantee it will
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fall by the wayside. the aguessive agenda you heard. the house could vote in a long weekend session before thanksgiving break this is the best case scenario, and final passage could come december 23rd. that's the absolute best case the white house is willing to predict right now. you heard the president suggest it might happen this year or next year, whether or not they can get it done this year is all going to come down to that last day, december 23rd just ahead of the christmas break. back over to you guys. >> thank you >> one stock dragging the dow lower today, fill lebeau has all the details. >> given the run that boeing shares have had in the last year, it's not surprising eventually they would pull down a little bit, there's nothing in today's earnings call that would case they should move lower. they did beat the street by six cents. look at the commercial side of
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the business strong demand right now, they're talking about increasing 737 production beyond what they forecasted they're still pressing the bomba bombardia complaint. on the defense side, the boeing tanker program took another charge $329 million. the first ones are still scheduled to be delivered next year the increase in guidance for how much it plans to earn this year, up just a dime, primarily due to a lower tax rate the company expects to have more operating cashflow increasing that guidance by a half billion. >> i have to ask you this question about drones here president trump considering new rules for drones what's the late sneft. >> they're going to have five
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partners, and what they're looking to do is analyzing whether or not they should move forward to have drones, flights where operators no longer would have line of sight for a particular drone what's really interesting, i want to hear what airlines have to say about this. one thing that really concerns them, drones near airports i'm sure that's at the heart of what's going to be analyzes. >> thank you >> two big defense companies reporting today, they are going in opposite directions, northrup grumman up, general dynamics down, morgan brennen here to tell us why. >> i heard from phil about boeing general dynamics, the other two that are in focus today, we're going to start with general dynamics, the maker of gulfstream jets and navy ships,
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revenue missed on lower expected army sales overall margins grew shares are down more than 2% right now. on the flip side, northrup grumman trading on record highs today, also up to 2017 profit outlook, this is the third such hike this year aircraft sales are what powered that >> excuse me, morgan we have tape play back of the president speaking moments ago, let's listen to it >> the dossier >> what's your reaction to democrats -- >> well, i thinks it's very sad what they've done with this fake dossier, it was made up, and i understand they paid a tremendous amount of money and hillary clinton always denied it, the democrats always denied it, and now only because it's going to come out in a court case, they said yes, they did it, they admitted it, and they're embarrassed by it, i think it's a disgrace. it's a very sad commentary on
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politics in this country >> mr. president -- >> i don't think so. we have great unity in the republican party >> bob corker -- >> no, that's okay they have to do their thing many you look at what happened yesterday at the meeting, we had virtually every senator including john mccain, we had a great conversation yesterday, john mccain and myself, about the military i think we had a -- i called it a lovefest maybe it was a lovefest, standing ovation there is great unity, if you look at the democrats with bernie sanders and hillary clinton, that's a mess >> great unity -- >> do you -- do you worry that -- >> this country is in the gutter right now, do you agree with that, do you bear any responsibility >> well, i think it's sad. but i think to a large extent
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the media causes a lot of it fake stories are being reported, a lot of bad things are being reported that aren't true. to a certain extent maybe i can blame the media, politics is a rough business, no question about it, i will say this, i think the republican party has a pretty good unity, when i look at that room yesterday at lunch, and you know, and you reported on it very well, but i mean, you gave it a very good report, the fact is, there was tremendous unity in that room and we're really unified -- we're really unified on what we want to do, we want tax cuts for the middle class, we want tax cuts for businesses to produce jobs, there's great unity. >> do you worry about -- >> should step down in the senate >> look, look. he was against me from before he ever knew me he wrote a book about me before i ever met him, before i heard his name his poll numbers in arizona are
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so low, that he couldn't western, and i don't blame him for leaving, i think he did the right thing for himself. long before he ever knew me, during the campaign, he came out with his horrible book, i said, who is this guy. the first time i saw him on television i had not really been -- nobody knew me in terms of politics the first time i saw him on television i said i assume he's a democrat is he a democrat they said, he's a republican i said, that's impossible. his poll numbers have been terrible he's been terrible for the state of arizona he would have never won -- in the primary, he's way down in the primary, he did the smart thing for himself, this way he can get out somewhat gracefully. >> mr., do you ever apologize -- >> he's saying that, because he has nothing else to say.
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>> do you -- >> i do think this i wish him well, i really believe he's going to do the right thing for the country. he's going to vote for tax cuts, we desperately need tax cuts to put our people back to work. we need tax cuts also to be able to compete with other countries. >> would you ever apologize -- >> i hope bob, and i really believe that bob corker is going to do the right thing also >> go ahead. >> do you feel like -- >> i can't hear you. say it again >> senator -- [ inaudible >> senator flake did vote with me, i understand it was about 91 or even more than that from that standpoint, no, i think i'll be boosted in arizona, he's very unpopular, i think the fact that he did it
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the way he did it, i mean, i'm very high in arizona, i like the people, they like me, they like security at the border, all of the things, but i think i'm probably helped greatly in arizona by what happened with senator -- >> mr. president, would you -- are you concerned that flake and corker could block your agenda tax reform >> i don't think they do that? i really know they want tax cuts, they know we need it, we need it for the country, we need it for the people, the middle class, we need it for jobs i don't think they do that, i really don't i know them well enough, i don't know flake very well, i know bob corker, i think they would do it, i think they feel they have to do it for the country >> do you have any -- >> do you have any democrats who are yes votes yet. >> i think we're going to get some democrat votes. i haven't started the process, but i believe that there are certain democrats, if they don't vote for these massive tax cuts
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for business, for jobs and the middle class, they will lose their race in '18. >> could you be more civil -- >> well, i think the press makes me more uncivil than i am. people don't understand, i went to an ivy league college, i was a nice student i did very well. i'm a very intelligent person, the fact is, i think -- i really believe -- i think the press creates a different image of donald trump than the real -- >> isn't it your -- >> would you ever apologize -- >> when is it okay for you to pull your punches? >> i think it's always okay when somebody says something about you that's false i think it's always okay to counter punch or to fight back
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john [ inaudible >> i wanted to end that quickly, 401(k)s to me are very important, it's one of the great benefits to the middle class, i didn't want that to go too far, that's why i ended it very quickly. >> well, maybe it is and maybe we'll use it as negotiating, but i -- trust me, that's one of the great things, you know, there are certain elements of deals you don't want to negotiate with, 401(k)s, and kevin knows it, and i think kevin grady is fanning taftic, he knows how important 401(k)s are. >> last week, you -- iranian sales to russia was one of the stories of the decade. they're now working -- we never heard you comment on it. >> i think the uranium sale to
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russia and the way it was done, so under handed, with tremendous amounts of money being passed, i think that's watergate modern age. [ inaudible >> what do you want to know about the -- about what went wrong? >> i can't -- >> what do you want to know about the. >> we're going to look at if, we are decimating isis in the middle east. what's happening is, they'll go do parts of africa, they'll go to other places. when they get there, we meet them it's a dangerous business. i have to say -- >> did you authorize the mission? >> no, i didn't. not specifically but i have generals that are great generals, these are great fighters, these are warriors >> i gave them authority to do what's right so that we win. that's the authority they have i want to win. and we're going to win, we're
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beating isis very badly. you look at what's happened in the middle east we have done more in eight months than the previous administration has done in many years, what happens is, you decimate them. we have decimated isis in the middle east. they go to africa and they go to places, when they go there, we meet them there. that's what goes on, it's a tough business, a tough war, but we are winning it, and you know what, we're going to continue winning it with that being said, my generals and my military, they have decision making ability as far as the incident that we're talking about i've been seeing it just like you've been seeing it, i've been getting reports, they have to meet the enemy. and they meet them tough, that's what happened. >> really upset by your phone call -- >> i was extremely nice to her >> she sounds like a lovely lady, i've never seen her, never
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met her. she sounds like a lovely lady, but i was extremely nice to her, extremely courteous, as i was to everyone else. it's interesting, you folks have called many people that i spoke to, everybody has said unbelievable good things about me, but you never report that. >> we reported that. >> did you report it did you report it? thank you. what about your plea -- >> have you narrowed down the -- >> i was really nice to her. i respect her, i respect her family, i certainly respect la david, who i -- by the way, called la david right from the beginning, just so you understand, they put a chart in front, la david, it says la david johnson, right from the beginning, there's no hesitation, one of the great memories of all time, there was no hesitation, i think she's a fantastic woman, i was extremely nice to her, extremely
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respectf respectful. >> i would say, basically, we talked condolence, it's all about condolence, it's about warmth, in many cases you listen, because in so many cases, one of the families, they were saying, yes, he was a great football star, and honestly, they poured their heart out, it's the hardest call, they poush their heart out. i am always. look, you people have called many people that i have spoken to, and every one of them have said i couldn't have been nicer, now it's a rough time for 2450ez -- i mean, how tough is it there's nothing tougher. i have such respect for those families, nobody has more respect than i do. nobody >> mr. president, has any of your -- >> we have to get something for daca, we are looking at daca,
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we'll see what happens i'd love to do a daca deal, but we have to get something very substantial for it, including a wall, the security, strong border we have to stop drugs from pouring into our nation. >> gun control >> the tax plan is going to be incredible for this country. it's going to bring back jobs, cut taxes tremendously we're going to bring back $4 trillion, i think at least, from overseas, that money's going to be put back to work in our country instead of other countries. the tax cut is growing to be massive, it's going to keep companies from leaving our country. >> have any of your family members or top advisers been interviewed by the special counsel? >> not that i know of. >> have you been contacted
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>> not that i know of. and i have to say, this was the democrats coming up with an excuse for losing an election. it's an election that's very hard for the democrats to lose, the electoral college is very hard for a democrat to lose. they lose it, they lost it very badly and very easily, you look at the votes it was 306 to 223 or something, they lost it by a lot. they didn't know what to say, so they made up the whole russia hoax now it's turning out that the hoax is turned around, and you look at what's happened with russia and the uranium deal, and the fake dossier, so that's all turned around. >> mueller >> no, not at all. we have a very good relationship if you take a look at what's happened with hillary clinton and bernie sanders and the
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hatred and the division and the animosity, i'll tell you what, honestly, the republicans are very well united >> can you guarantee people's 401 -- >> we're going to have a big meeting on opiods tomorrow we're going to be doing a very important meeting, sometime in the very short -- very near future on opiods, in terms of declaring a national emergency which gives us power to two things that you can't do right now. >> can you guarantee -- >> sir -- >> john? >>. >> do you have any idea -- >> well, they say it began with the republicans, i think i would know, but i won't say, it will be determined. >> who >> who >> hillary clinton would have never announced it was them, except for this great court case that's going on, where the judge was going to reveal it, so they figured we'll do it first.
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they're very embarrassed by it, it was a disgrace. it may have started with the republicans early on in the primaries. i think i would know, but -- >> who do you think it was >> i'm sure that will come out >> i think i would have -- if i were to guess, i have one name in mind. >> who >> it will probably be revealed. >> what's the name >> say it, what? >> yes or no >> i'd rather not say, but you'll be surprised. >> can you guarantee americans their 401(k)s won't be touched >> where are you going >> we have another crew over there.
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>> he's supposed to be walking toward marine one, right >> we've been hearing some reporters in the gaggle saying, where is he going, where is he going? reportedly he's on his way to dallas texas for a trip there. he managed to stop by the press, he talked about a lot of topics. the country desperately -- the country desperately needs tax reform to put middle class people back to work. to make the country much more competitive, he believes senator corker and senator flake will do the right thing and vote for tax reforms. otherwise, they will lose races in 2018. >> he defended the 401(k), and then hedged at the same time, well, maybe that's a negotiating thing, but i really believe in it, and i've spoken with kevin brady. maybe it's a negotiating point. >> stocks seeing their worst
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losses in two months we always talk about earnings, well, up next, we'll discuss a new way to value companies, stick around hi, i'm the internet! you know what's difficult?
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. stocks having their worst day since mid-august some people wondering if this is
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a pull back? >> if you look objectively at the market, you see cautionary signs, we are investing, we're fully invested where we can find reasonable investments, but with more caution than usual. >> is he right peter is number one on cnbc's top 100 fee only wealth adviser's list great to have are you with us, what do you think is behind this market decline today >> well, i mean, just one day, i think they're looking at housing prices going up a lot, durable goods going up a lot, we would expect rates to rise, i wouldn't read a lot into -- >> the economic data is good, the fed will raise, and people are scared of higher rates, that is basically the bottom line if it you connect the dots? >> yes >> facebook is one of your top picks.
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if you take a look at bank stocks, they've been down, this on the eve of their earnings report, how do you feel about what the price action and technology is telling us particularly if we're entering a higher growth economy. >> a company like face book, where you've got the synergies from having so many users and the fact that that's where everyone wants to be, and they're able too monday ties more different ways of providing information over time, they're going to be able to create their own growth, and even though the economy's growing faster, and i'd look for those kinds of companies as well, i think facebook is attractively valued and has good growth opportunities. >> high and multiple stocks often suffer the most as a result of rising rates >> they suffer a lot but also high yield stocks suffer a lot
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yes they have high multiples, but they're going to deliver the growth that's a company like facebook, we like to talk about the gop, the administration, earnings, we don't seem to talk enough about central banks. maybe they're the juju in this is there a way to play the central bank reduction of balance sheets, particularly in the u.s., their stocks or any investments that will benefit add the fed winds down >> if you look at what the fed's doing. they're going to have to continue to pull money out of the system and continue to raise rates. we have a long way to go before that impacts where the market is the market is largely where it is because unemployment is encredibly low, it hasn't been that way for the last 10 or 15 years, i think you can play the market broadly still, while we had a long time since the
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correction in 2016, we could have one any day now it's hard to see a few rate hikes, really changing the general pageant of the market. rates can go up 4 more times, we're going to be 50% below our historical norm. >> we're going to wrap there >> down to tyler. >> thank you very much we all know the normal ways of determining a company's value, use indicators like valuation, price to earnings ratio. those are not the only ways to make a company valuable. cnbc and the financial services company worked together to create an index that measures stocks and their values differently. unlike other indexes, the cnbc iq 100 values companies according to its intellectual property and it's up 16% this year alone, and out performing
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the s&p 500. joining us to discuss this novel way of valuing companies is david martin, the ceo of mcam. we are familiar with indexes like the dow, which is a price weighted index you look at it differently, explain it briefly, how you are able to put a price on the value of intellectual property assets, intangib intangibles. as long as the market has been traded, there's a debate about whether equities reflect the underlying management of commodities or something else. what's the magic what's the secret sauce, what does a company have that allows them to take goods and services and turn it into value and we know since the late 1990s, intellectual property, brands, inning know vague, those are the things that
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differentiate commodity? >> we're talking about copyrights, trademarks, patents? >> exactly we're talking about brand value. >> exactly >> how do you value it when a patent can be overturned very quickly. a trademark can be shown to be invalid? >> intellectual property give companies not only the market price control for the product they're selling. but they also are a forward indicator of where that company intends to go. we're looking for, how do we understand what companies are doing today -- where the historical financials give us a rearview mirror. we're trying to look through the wind screen and say, what's in front of us when they move, who's moving with them the index is looking at both of those not only who's moving, but who's dragging them.
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>> let's look at how the market has done this year so far the cnbc iq 100 is up 16.4%. historically, how has this index performed against the s&p 500, working at a 400 to 600 basis point out performance. >> 4 to 6 points a year? >> that's correct. >> what we're doing in that spread is actually helping to find those breakout companies that are the ones that are going to be moving and dragging the market with them these are the companies that have figured out a formula for how to anticipate where the market is going. go to where the puck is going, not where it's been. >> it's underperforming a little bit. the dow has been an underlier all year, let's stipulate that
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what are the most valuable companies or the largest constituents in the index this year or right now. >> there are going to be companies that have a very large field effect dow dupont rises to the top, they supply goods and services and industries right across the board. you have everything from health care to automotive to defense. people use what they make. xerox, a big interface, and technology -- >> you wouldn't find that in the dow. >> you wouldn't and you should, because you actually have somebody inside of that xerox organization saying, we have a core capability of solving problems about the way in which people interface with technology xerox has looked at that question and said, how do we understand where the market needs to go, we see a future where we're not using the same technologies we were 10 years
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ago xerox is anticipating where that's going boeing is an interesting play, they're saying, what's the future without a pilot the questions of drones, the questions of defense and civilian air cover, these are companies that are looking forward, and the market needs to identify how it can see. what that forward look is, and then how to invest behind it >> we have to leave it there, david, thank you very much >> lovely to be here >> i love the stylin' bow tie. >> michelle, up to you >> thank you, tyler. you guys were just speaking about intellectual property. we're going to talk to a top technology investor about what the threat of d.c. intervention could mean for silicon valley. and we're going to continue to watch this big market selloff. at these levels it's only 2/23 of a%, we are coming off record highs. easy to analyze and take action?
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i'm sue herera, here's what's happening at this hour.
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a popular retirement tax break may be on the chopping block president trump admitting making changes to 401(k) contributions may be part of the republican plan correcting a tweet he wrote earlier this week. bergdahl pled guilty to charges of desertion and misbehavior before the enemy a senior military officer is recommending no jail time. royal caribbean's freedom of the seas ship will take 3,000 visitors to san juan on november 30th its grandeur of the seas will head to saint martin in december a czech zoo welcomed this eastern black rhino a few weeks ago, it's a female calf, part of a conservation effort to save the species, only a few hundred
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black rhinos still exist in the wild look at her go, so cute. >> you're up to date, that's the news at this hour. i've heard of market unicorns, never market rhinos, now we have one. a rare day off of the rally, not a great day, the worst day since august 17th, one of the few triple down digit days we've had this year. transports in the red as well, on pace for their worst day since august semiconductors on the move the worst performer off about 11%. it's one of the hottest topics in silicon valley, and america right now, is big technology about to face some big league regulation from washington how worried should tech and its
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investors be we'll take a closer look ahead 5 years, hmm. you ever call your broker for help? >>once, when volatility spiked... and? >>by the time they got me an answer, it was too late. td ameritrade's elite service team can handle your toughest questions right away- with volatility, it's all about your risk distribution. good to know. >>thanks, mike. we got your back kate. >>does he do that all the time? oh yeah, sometimes he pops out of the couch. help from real traders. only with td ameritrade.
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google, amazon and microsoft all reporting earnings tomorrow. josh lipton joins us from san francisco with the latest. >> we know tech has been on a tear so far this year. denny fish, who manages 4.7 billion points to an important caveat here, the increasing drum beat of political and regulatory threats targeting mega cap tech companies. the eu says the company is breaching antitrust rules by requiring manufacturers to favor google search on their devices there's been a clear shift when
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it comes to this sector. president trump goes after amazon saying if doesn't pay its fair share of taxes. mark zuckerberg is in the cross layers as well walter price, who manages 4 billion, says these tech giants all face a difficult reality he was encouraged that zuckerberg has decided to add more than 1,000 people to review ads that run on his platform >> we'll pick it up from here josh, thank you so much. >> how much should technology companies be scared about a new wave of regulation let's ask jeff schumacher. glad to have you here. >> it's coming down from everywhere, not just d.c.,
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europe and other countries they've never been all that friendly to technology how bad would it be if we start to see lots of regulation on these companies. >> it's just bad, it's going to force innovation to happen where it's not if you regulate tech, you're telling them to do their innovation elsewhere, if you think about regulation on immigration the number one innovative platform in the united states is the hh1b visa >> it's not just the united states, that's talking about -- the eu sounds even worse, china forced yahoo to hand in a dissident. what are you going to do over there? i feel like there isn't much choice except here >> it's definitely it's never a good thing, but if you're going to reduce the corporate tax rates and you -- tap into job creation, it's a good thing, you can replace the income you're losing by
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reduction. if you're going to china, it's really where the consumers are going to create the demand the next 20 unicorns are going to exist in china. that's where innovation is going to happen, if you regulate in the u.s., you're going to see more of it happen there. happene >> is there a job creation, jeff i hear what you're saying. >> we always hear small business is the job creator no they're not they just happen to be small because they're new. facebook, google and amazon hurt smaller technology firm creation >> i don't think so because if you look at google or facebook, google hasn't invented a product in ten years they bought everything they bought android. they bought nest they bought youtube. you're still going to see that small creation or the job creation happen in start-ups and we're an early-stage growth firm and i have 600 people and we're one of the largest venture firms and that's where it's going to come from and the start-ups are where it will be created.
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>> what sort of specific industry are you most concerned about in terms of stifling creativity and job creation, et cetera >> adding terrorists to technology is never a good thing. so if they're going do that, you're just going to force innovation >> tariffs such as what? >> tariffs on products produced in china and tariffs that you're creating in technology and you don't want to see that in general, regulations are bad because you're stifling creativity and stifling innovation and you're creating bureaucracy. those are never good things. >> is it possible to regulate block chain? the descriptions i get of block chain technology is the decentralized thing that nobody can control? >> the block chain is one of the biggest areas that we're investing in, and i would tell you, that said, it needs to be regulated and about 90% of it out there is garbage we're not focused on the currency side of it. we're focused on the platform and the protocols. >> 90% of what out there are
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garbage? >> i think there are a lot of people out there doing things they shouldn't be doing. we're focusing on 3.0 coming out next year and the things we're working on are platforms and asset tracking and different things we can use it for. >> exciting stuff. thanks so much for coming in jeff schumacher is the ceo of bcg digital ventures >> coming up, four analyst calls you need to know about musician fats domino died today. his "ain't that a shame," and blueberry hill, he was 89 years old. ♪ i found my thrill ♪ on blueberry hill ♪ ♪ ok, you just found out you're being audited.
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i went from being a cpa to a tax attorney because our clients needed more. call us, and let us put our 30 years of tax experience to work for you. time for street talk on the stocks you need to know about. first stock is general motors. morgan stanley cutting it after strong earnings yesterday. investor expectations are ahead of themselves and it's not an expensive stock per se, but considering where we are in the auto cycle and peer valuation, he says gm is fully valued morgan stanley is cutting forecasts to 17% below consensus next year. 25% below consensus for 2018
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biogen, it is downgraded to market perform the analyst notes he is not calling the bottom here, but he thinks concerns over the genericencery into multiple sclerosis is into biogen and they're turning their attentio to the alzheimer's, candidate and it has 20% return on bid. i caution you, this is a small-cap stock. they're getting a downgrade from raymond james. the analyst does this with sadness. those are his words, ahead of earnings on monday because he still thinks that if the hurricanes didn't hit rent-a-center's plan would continue to drive positive core comp sales, but if it does provide clarity around the hurricane impact, he could be ready to upgrade it again, but this stock has really been hit just in the past few month or so >> if you have to move and you have to rent furniture for a few months >> but if their furniture was
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destroyed. >> that's interesting. final stock, another small-cap name synopsis small-cap semiconductor softwaremaker. rbc liked it before and now they lurve it boosted their target from 100 to 90 cadence design is the other and they're poised to benefit from the internet of things and semiconductor is simply smaller and more complex this company makes the software to make the stuff smaller and less complex and that implies an 18% return michelle >> it's being called the worst queso scenario, get it chipotle, is more pain to come for this beaten down stock more d more power. and more than just unlimited data, we give you unlimited plans with hbo included for life. because you deserve more entertainment. and more spokespeople.
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the rest is up to you. call now, request your free decision guide and start gathering the information you need to help you keep rolling with confidence. go long™. ♪ >> welcome to the second hour of "power lunch." i'm michelle caruso-cabrera. here's what's on the menu. fear and wealth. those are the two reasons goldman sachs' jeff curry thinks you should buy into one particular asset class and he will join us to explain. plus the battered burrito. it appears queso was not enough to get people in the door of
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chipotle can anything save the struggling restaurant chain >> the company thinks you will and they're not the only one "power lunch" starts right ♪ ♪ ♪ >> stocks are lower as investors digest another big round of earnings and your money down for the second time in three days. uh-oh. right now the major index as you can see are down the dow is down 123 points and off its lows and earnings is the story here and here are some of the movers boeing raising guidance and company shares are down and coke also boaposting an earnings groh and americans keep on spending and those shares are up on the flip side and amd, wow what a disaster, down 11% and the forecast disappointing and ge causing investors even more pain today ge's stock, by the way, down 16% over the past 90 days, and chipotle posting a big drop, earnings miss and the dow grows
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over the success of the new cheese deep. guy adami called it on "fast money" right on the mark with the taste test he got it right. i think you told him in advance. >> no, i didn't tell him >> first, tyler down at the new york stock exchange. tyler? >> pass the guacamole. thank you, brian welcome, everybody, to the new york stock exchange where we are today for the net-net seminar where we look at the innovation and how top executives can help foster it to help their companies. we will hear later this hour from a former cia deputy director of counterintelligence. we'll ask him about the state of american cybersecurity, threats to business and threats to the personal security of people like you. we're going to ask him specifically what does he do and not do himself to keep himself safe meantime, it is a down day for the major indexes, but of course, off those session lows bob pisani here with the latest and what's happening in the last hour apart from coming back off the lows >> we've come off the lows and
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that's important we were down initially and we saw a blip up on the ten-year yields and four or five basis points and we had very good economic news this morning and we also had reports that perhaps mr. taylor might be in the lead or not and president trump in the last hour there have been reports, and the street believes and hopes it's going to be yellin is the chair or pal is the chair and taylor is the vice chair. we don't know that, but that's what the street really would like to see. the reason we were down other than the four or five basis point yields really were technicals and we were very, very overbought when you see pressure in the market and people tend to sell off and the earnings reports generally have been good and once people realize that the initial momentum traders were out, they took some profits and the market just sort of calmed down and the volume lightened up. so i think we had an initial morning where a lot of people said let's just lighten up a little bit and rightfully so with the 300-point moves. >> we've had two days of
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relative volatility, relative volatility one to the upside and today going down, but it's not really heavy volatility. >> no. >> the dow moved historically, 125 to 150 basis points every single day from the high to the low and that was typical we haven't seen this in so long that we see it one day and they say oh, my heavens, what happened i hope we get to more normal activity the way we used to have it >> bob pisani reportingfrom th floor. back to you. >> all right, tyler and bob, thank you very much. >> yes, virginia, apparently stocks are allowed to go down. today the dow posting one of the triple digit down days this year the growth expectations simply get ahead of themselves and bring in jerry caselini and peter anderson and he is chief investment officer with chief financial officer, to what do i reference a two-daydrop? we've only had a couple this entire year. >> that's correct, and i think it's a great thing because what
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this is showing us is some rationality, right if these stocks were all moving up in the face of negative news like chipotle then we'd really have a problem, but this is showing there is a two-sided market there and the skepticism is healthy and it's being reflected in stock prices right now. >> is it just that you look at boeing boeing is a perfect example, okay boeing is up, what 70% over the last 12 months and a lot of expectations and the stock beat and they raised their guidance and is it just good wasn't good enough because if it is, we can expect probably more of that, like amd today. >> yeah. you've got two things going on first, you have the actual security analysis and you also have some psychology in boeing's case, it might be more on the psychological side than the analytic side everybody is looking at some of these stocks that have moved down for really justifiable reasons, but you're catching some of the negative swell on the other stocks, but it's
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absolutely nothing to worry about, and this is a two-sided market and this is what we live for is something that's more balanced as you were saying earlier. >> peter, how concerned are you about rising rates a lot of market participants are saying -- or jerry, whoever wants to jump in here are saying it's the rise that we saw in the ten-year yield today, but also the two-year yield the two-year yield hit levels we haven't seen since '08, so is this rate dynamic creating a sort of -- you look at these stocks through different sorts of lenses because all of a sudden rates are rising and we have valuations at historic highs. >> sorry about that -- jerry, why don't you go first >> i'm sorry your point about rates is valid. obviously, with the fed chair change coming likely and with pressure from inflation and other growth sources, rates are going to be there as something we have to worry about on the other hand, right now the earnings train has left the station and it's gaining steam and you can't ignore when companies beat at the top line
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and the marginal line and the bottom line and you're going to be chasing valuations, actually lower if you don't get on this train, and i think that's going to be the real fear trade on the way up here and it's going to continue >> peter >> we have this persistent caution going on, right? we're always looking for some negativity which i think is tempering the markets, but i've been a big proponent of rates that have stayed stable, but it's about time that rates move up and whether or not you're talking the two-year or the ten-year, things are really suppressed in terms of interest rates and it's a good thing. if interest rates are moving up and no one can pay some fixed-income investors and in general that's a byproduct of healthier economy and we've been looking for this we've been talking about this since 2008 and finally, we're starting to see movement in there. so it is all mixed up and it is part of the factors of this calculous, but it's all pretty good factors, if you ask me. >> jerry and peter, we'll leave
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it there, guys thank you very much, see you again. president trump taking questions on a wide range of issues on his way to board marine one in the past hour. eamon javers is live in washington with a round-up of the questions. >> it was a very conversational president trump on his way to marine one taking questions from reporters on his way to dallas including tax and trade issues, starting with the 401(k)s. very interesting here, the president was asked about kevin brady's comment that he said that the 401(k) changes that brady would like to make are still being considered on capitol hill despite what the president had said his preference was which was don't change the 401(k) system in this country. here's what the president said on that one. >> 401(k)s to me are very important, and they're important because that's one of the great benefits to the middle class i didn't want that to go too far. that's why i ended it very quickly. maybe it is and maybe we'll use it as negotiating, but trust me, that's one of the great things
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you know, there are certain elements of deals you don't want to negotiate with. 401(k)s and kevin knows it, and i think kevin brady is fantastic, but he knows how important 401(k)s are. >> so the president there saying he wanted to nip this idea in the bud, but also raising the pr pr prospect that they'll use it as a negotiating tool saying kevin brady knows how important this is to him, as well so the president ending this conversation, but leaving wiggle room and that matches what a senior administration official told me at the white house earlier today saying that they know what the president's preference is which is not to touch the 401(k) rules and they can't guarantee that because ultimately it's the house and the senate writing the legislation. the president also talking about bob corker and jeff flake, the two senators who came out and blasted him as effectively dangerous to the country yesterday. despite that, the president was asked whether or not he thinks they would still support him on
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tax reform here's what he said there. >> i really know that they want tax cuts they know we need it we need it for the country we need it for the people. we need it for the middle class. we need it for jobs. i don't think they do that >> michelle, senior administration official here matched that language with me earlier this morning, but they said they recognized they could have a problem in corker, flake and mccain, three senators who expressed concern about the state of the american deficit over the years and they think that could be an area where they would have to monitor to see if those guys stay onboard with tax reform going into the fall >> let's start there with our next guest, director under george w. bush with special assistant to president bush. lady and gentleman, good to have you here the president was insistent and he was asked repeatedly as we had with larry kudlow yesterday, jeff flake not running for re-election. is it possible he loses those votes and threaten tax reform,
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what do you think, sarah >> i do think it's possible he loses those votes and the way he behaves toward them isn't helping had the situation. look, when you're leaving office, you're thinking about your legacy. you're not worried about the next election, and so if you're mccain and your brand has been primarily about the military and also about deficit reduction, that's on his mind right now in a way that, you know -- you know, flake and corker and these guys all of whom are not going to be in office after their next election possibilities, i don't think -- i don't think what trump is doing is very prudent >> you know, there is a lot of talk about this gop civil war, but let me flip it if you belong to a club and you're the leader of the club of 51 members and most go along with you and two don't guess what those two that don't go along with you, they're leaving and they will be replaced with
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people who will go along with you. hearing about the civil war and it seems like it might be over and trump has won. >> hi, brian i think in the short term what you see here is a situation where president trump, yeah, he's got the 49 members of the club who like him, but the reality is this club is 52 members and those two members until they leave in about a year and a half from now, they can really take everything that the rest of those members of that club want to do and throw it off the edge of a cliff, and that's where we are and that's where i agree with sarah it's not just jeff flake it's not just the john mccains of the world and it's dean heller and it's lisa murkowski they're about six or eight republicans that i've identified that at any given moment could be inclined to oppose what president trump's trying to do or be inclined to sit it out and to side with the democrats. >> ron, do you really think that given that flake and corker probably have seen that going against the president does not bode well for any re-election campaign even if you're privately
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thinking that, maybe they're realizing it may not be a good thing for them in their own re-election campaigns. and i hear your point about waiting a year, but if you have to wait a year, it took reagan three. >> it took reagan three. >> but if the president continues to go on the twitter and use those 140 characters and insult members of the united states senate, let's not forget, brian, you know this quite well. they're a very clubby group. they don't like their own being attacked even though they have their own divisions with inside of their tent and the president would be wise to let the senators deliberate on what they want to do any try to form a way to wage compromise >> what do you think of the 401(k) is this enough of a political issue that will stay in or out in wrap your head around it for us. >> i think it is a political issue. you start talking about taking away of some of the benefits in 401(k) we don't save enough in this country, so, look, i'm sensitive to where republicans are going
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here which is there is a balancing act that at some point you've got to find some things to pay for all of this reform. you've got to get bob corker and jeff flake and those members to support this and so kevin brady and others are trying to do that, but donald trump is right. this is a huge benefit to the middle class and so his instincts on this, his political instin instincts are to not touch it and he's right >> i get the political instincts, but bob pisani have the numbers. only 12% of individuals actually save the max, right? probably because most of them don't make enough money to save $18,000 in a year. so if you reduce the number and by the way, even though people are incentivized to save, ron, they don't there are incentives like crazy and they don't personally, i don't think it should be touched, but i don't think it's that much of a political loser to cut it. >> well, meshel, this is where the special interest groups in washington, d.c., would get
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geared up and say keep your hands off of middle-class security keep your hands off middle-class retirement and as sarah knows from being the former white house political director the optics are often more important than the underlying substance and if republicans are seen as taking away from the middle class. they'ral read ed under class warfare and favoring the rich with the tax cuts to begin with and then you run into the situation where you're screwing over the rich and you're screwing over the middle class and who is it supporting and the optics are damaging. >> sarah, ron, thanks so much. good to see you. the introduction of queso wasn't enough to salvage the quarter for chipotle the stock is on track for its worst one-day decline in more than five years. it misled one analyst to slash its price target and it goes down by 40 bucks to 3.30 and dropped to a market perform from outperform and let's bring in the senior analyst at telsey advisory group good to have you with us
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>> good to be here >> it was a quarter where everything that could go wrong probably went wrong in terms of one-time things that happened. avocado prices spiked and they were on the hack attack that they were on the hook for, and a virus outbreak and rodents in texas, from here -- from here, bob, why do you want to throw in the towel on the rating at these levels because if you look through one-time things and you believed the turnaround was on track, why not stick with it >> you know, i think there's the old saying a hope springs eternal. hope is fleeting, at least in my view at this point this company's business model that used to be one of the strongest in the industry, i think is somewhat of a shadow of what it used to be i think the consumer reception to the brand isn't nearly as strong the attachment to the new queso has been a fraction of what we anticipated, and while i think a lot of folks would love to say
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it's simply the queso, i think it's simply more than that there are a number of things coming together that leave me more guarded, that the outlook for next year isn't going to be nearly as rosy as expected we slashed earnings numbers from $10 and change down to $8.50, and i think the street's also there. i think the reality is the confidence in this team and the turnaround is drifting out longer and we're probably talking 2019 versus 2018 >> your price target, though, implies what a 20% upside or so from current levels in the next 12 months so what sort of multiples should chipotle now have? it trades at twice the current multiple as mcdonald's and you still see the stock up by 20%. listen, in the big scheme of things and the price target from the market-perform rated stock is as volatile as this company's earnings you know, depending on where the earnings shake out, there's likely we'll have more earnings
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revisions and we'll have more tries target revisions i think that multiple and the valuation reflects confidence, and i think at this point in time, that confidence is very fragile in this management team and ultimately the turnaround of its business. >> then it shouldn't have a multiple that's twice that of mcdonald's, a company which beat on earnings and has tremendous faith in management, correct >> i would say that if i look at mcdonald's or starbucks relative to chipotle, both have much better prospects at much more attractive valuations. >> bob, thanks bob dharrington from telsey. here's what else is coming up on "power lunch," what keeps a spy chief awake at night we'll ask in a power lunch exclusive. bunk beds and rooftop workouts and pets welcome marriott is launching a new hotel line aimed at luring millennials into its doors and we'll take you inside. the days of coming home to a stack of boxes at your front door may soon be over. we break down the battle for
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indoor delivery. lots more "power lunch" ahead. gglobal bonds, and high-dividend strategies. sure, these are investments. but they're not what people really invest in. what people really invest in, is what they hope to get out of life. but helping them get there takes a pure focus. because when you invest their money without distraction, hidden agenda or competing interests, something wonderful can happen. they might just get what they want out of life, and maybe even more.
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>> and welcome back to "power lunch," everybody, live at the new york stock exchange here for the net/net event and one of the big topics today is going to be cybersecurity. of course, we've seen massive hacks this year and the biggest being the equifax breach where million his their private data stolen by hackers. how do we better protect
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ourselves, our companies against these growing threats? joining me now is mark kelton, former deputy director of counterintelligence for the cia. mr. kelton, welcome. good to have you with us >> i am going to ask you how realistic homeland and the americans are, but i'm going to save that for the dessert portion. >> please do >> that will be for the dessert portion. >> my sense is that in counterintelligence today the social media companies are the new frontier >> right. >> am i right on that, and if they are how helpful are they to agencies like the cia, nsa or fbi? >> without commenting on the particular programs of the cia and nsa and the fbi because i really can't, the fact of the matter is that people put more things online about themselves and about their background now than they ever have in the past. when i joined cia years ago, 1981, it seems eons ago now, i tell my students there was a cold war i was in it, and at that time it was an analog world. what the world knew about you was what was put on paper.
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now people put things out on social media about their entire life, their finances and their families and their personal feelings and all of the rest and when you're in the human intelligence world and you're targeting humans, you use those things and exploit them. the goal being to exploit vulnerabilities or things you learn about people. >> can the social media profile of an individual lead you to someone like snowden or some other counterintelligence agent and tell you who they are, give you a clue, a tell tale? >> it can. with the united states, of course, when cia or fbi looks at social media, of course, it comes within the context of u.s. law which is if there is a counterintelligence being pursued, social media can tell you a lot about people and who they put online and who they interact with. if you're looking for a spy you're looking for
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communications. >> how would you characterize the relationship between domestic law enforcement and maybe intelligence agencies and the companies that are involved in social media, and you don't have to speak specifically. >> yeah. i think that would be something that's better addressed by the fbi and my experience from the counter espionage side, and the fbi has good relationships with companies, and the fact of the matter is that when you're investigating a law enforcement issue and counterintelligence and espionage in particular and someone has broken u.s. law there are legal requirements the fbi has to meet and quite rightly with those companies >> some of the hacking may be state-sponsored hacking. >> sure. >> obviously companies are deeply concerned about it and individuals are deeply concerned about it. >> some of it may be government actors and some of them may be criminals and otherwise. i want to ask you as the guy who knows the trade craft, what do you do or not do with respect to
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your personal, digital security that would be helpful for someone else here. for example, i never do that >> i frankly, don't have social media presence that's very active because my experience tells me that that can lead to bad things people put things out on social media that make them more vulnerable the best thing people can do to avoid hacking is to follow common sense security guidelines and updating passwords and things that seem mundane to people, but if you're targeting people or targeting the institutions, it is those mundaneities that make them vulnerable and failure to do those things that make them vulnerable my world, the world they came from, of course, the human espionage world. i spent my years creating insider threats and the last four finding insider threats and i always think people are the main vulnerability. >> i want to spend the whole afternoon hearing your stories and what you can tell me i promised to ask the americans and i'm obsessed with it
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i want to know whether the americans, homeland, are these realistic? >> the americans, i watch the americans pretty avidly. they are very good at giving an entertainment context to the bare bones of espionage stories. when you're talking about the americans, you are talking about -- >> they juice it up. >> they juice it up and there's a lot of sex, shootings and things and james bond is never shown with a typewriter, right so they have no idea how much writing goes into intelligence operations, but the americans, i find, that produce this show very well done the acting is superb and it does reflect some actual espionage stories. >> fascinating >> yeah. >> welcome >> thank you very much thank you. >> i'm going to listen to him all afternoon, folks melissa, back to you >> thanks. since chipotle hit its all-time high in 2015 it's lost nearly two-thirds of its value only two stocks in the s&p 500 have done worse and we'll tell
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you what they are and how to trade them marriott wants to appeal to millennials and seema modri got to see it. >> one hotel operator is flipping the script in their strategy to appeal to millennials including this rooftop which has an urban amusement rkndpa a rotating carousel the full story coming up next. if you're on medicare, remember, the open enrollment period is here.
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hi, everybody. i'm sue herera here is your cnbc news update at this hour. apple firing back on a report claiming it's reducing the accuracy of its facial recognition software for the iphone x to speed up production. in a statement to cnbc a company spokesman calls the report completely false, adding its face i.d. will become the gold standard for facial authentication sears is going old school for the holidays the retailer, which has been struggling to turn around slumping sales, is bringing back its iconic holiday catalog the 120-page gift guide will be mailed and also available online. live nation will live stream an upcoming imagine dragons
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concert on twitter the company said this friday's performance will be available to watch for free using live nation's page on the social media site ♪ ♪ ♪ i found my thrill ♪ ♪ on blueberry hill >> piano player, singer and songwriter fats domino has died at the age of 89 considered a rock in hole legend, he was known for that hit which he is seen singing there "blueberry hill. that's the news update at this hour melissa, i'll send it back to you. >> thank you, sue. sue herera millennials travel, but the chains have been losing market share to air bnb they're aiming to change that trend including the first property in new york city aimed as young travelers seema modi with that story
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seema? >> hi, melissa it may seem i'm in a hostel, i't in the times square location geared at the millennial traveler two bunk beds including four twin-size beds, perfect for a group of girlfriends that have a weekend in new york or perhaps four "power lunch" anchors we'll get to that in a second. millennials do not use closets so they took away the closet and instead you have wall pegs that you can use to hang your clothes and you still have the big tv and plus some strategic use of the storage underneath the bed if you walk this way with me, you will see you have the bathroom as well as the shower and you have the oversized rainfall shower head so elements of luxury, but at an affordable price point it starts at $139. the overall square footage 220 square feet for this specific room. when i spoke to marriott's executive vice president, he says the small size is intentional.
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>> you've seen the guest rooms, while very well appointed are quite small, but a big, big focus on the public spaces in this hotel, and when you look at economic and demographic trends for the next generation of traveler, they want to be out in public >> and for those who come here purely to grab a drink, they want to spend the night, moxi has a room called the crash pad which guests can book only from the rooftop cocktail menu for $99, but guys, the competition is fierce. marriott's main rival, hilton has launched two brands aimed at the millennial-minded, radisson's red, and starwoods aloft. and that's why travelers say differentiation is key especially when you have air bnb in the mix consumers between the ages of 25 and 34 prefer staying at an air bnb over a hotel and that's why,
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guys, social media campaigning and marketing will be really key for this younger traveler audience back to you. >> seema, thank you. seema modi >> i don't know. >> you looked at the price. >> i don't know if i looked at bad dates and random prices. the cheapest room was $379 a night. >> and four people divide it up. >> it's not bad. then you have to add another hundred in taxes because it's new york. >> it's ridiculous >> a bunk. would you sleep in a bunk bed? >> no. we're not the target audience. >> yes, clearly. clearly not. >> if it was the bunk bed or, like, a curb, i would go for the bunk bed yeah >> you'd have to go to the rooftop bar to order the crash pad. >> that's why you take the bunk bed because you started at the rooftop bar. the goldman sachs guru jeff rtf ie, we'll talk about the pa othe market he's betting on the most right now. stick around
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welcome back to "power lunch. i'm jackie deangeles we are closing slightly lower on the session, $52.18 and this is after the department of energy reported a surprise build in inventories of a little bit less
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than a million barrels keeping prices supported over the $52 mark, concerns about the tensions in iraq and also the comments from the saudi energy minister yesterday indicating that there is potential to extend that output cut brian, back to you >> jackie, thank you let's talk about oil, gold and the commodities and here for a power lunch exclusive, jeff currie good to see you. >> pleasure to be here. >> i want to get to oil in a second and first i want to start with gold because you're above the target price in gold we have the co-founder of etherium, crypto currency. is it like bitcoin and light coin are they a risk to gold? >> i would argue not you look at the overall market cap of the cryptocurrencies. $100 million and you look at the gold, 7 trillion right there in terms of the capacity, gold is a lot larger and the other issue is you have a lot of volatility in the
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cryptocurrencies that you don't have in gold the final compare enzi, and put the gold under the vault and you achieve the same thing with something with far greater liquidity. >> gold is easier. go out and buy a gold coin, put it in your pocket and it's easier to understand >> what are some of the better money-making opportunities and the base medals complex, driven by the fact that global growth is spectacular right now >> we look at the gli, the global leading indicator and the sink ronnous growth for a decade and if you look at base metals and you don't want to be short base metals. >> it's not just that the prices of the metals are going up, copper is going up because there is an economic boom and we'll
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build more stuff around the world and it's a fundamental story. >> absolutely. if you look at rate hiking cycles which we're going through one right now, and the u.s. and china going through a tightening cycle, you see that base metals rise 50% per annum during a rate hiking cycle >> haven't rate hikes in the past kill gold don't they eat gold in a certain way? >> if you look at the average returns of precious metals during rate-hiking cycles they're up 10% it goes to the piece we put out titled fear and wealth yes, fear diminishes which is the rate hike rates and the wealth component begins to rise in china and you see more buying for gold. >> caller: for the past five years, we say oil's collapsed and it's kind of important and it flat lined for the last eight months and there's a $55 target and there isn't a moneymaking
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opportunity. >> actually there is >> i should go out and buy a tanker and store stuff >> you actually write-up the curve. it has a positive carry. while yes, you will see oil trading sideways you still have a positive carry which actually is a great opportunity positive returns for a commodity. >> jeff currie, appreciate it. >> jeff currie of goldman sachs. melissa? amazon is selling a new product that would allow delivery people to enter your home, but will consumers gfoo r it that story's ahead on "power lunch. if you have medicare parts a and b and want more coverage, guess what? you could apply for a medicare supplement insurance plan whenever you want. no enrollment window.
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>> amazon introducing the key. this is a digital lock on your front door which allows delivery people to enter your home to drop off a package deidre has the story >> michelle, amazon is betting the convenience will outweigh some of the security concerns. here's how it works the courier arrives with a package, scanses a bar code which unlocks the door and tells the camera to record the delivery, the package is dropped and the door is locked to use the system you'll need the new cloud cam and an accompanying smart lock.
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packages start at $250 and it goes live on november 8th. charlie says they focused on security and content will be constantly overwritten meaning that your home video will not be stored on amazon's cloud for an extended amount of time. for pet owners worried about pettes caping or attacking a stranger amazon tells us that the courier will look out for any sign of pets and if a safe delivery can't be made, they'll leave it outside. trichler said they're focused on how to get the product into people's hands the idea that more people spend money within the amazon ecosystem once they have those devices. back over to you >> thank you now with the battle of home delivery heating up, one company is posed to take advantage walmart offers something sort of similar where they bring stuff into your house and they unpack stuff, too and put groceries in
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the refrigerator, for instance do we care who is in the lead on this is this going to be the next big thing? >> i think it's going to be a niche service to start out, at least anyway, but i think it is an important thing to own because the way e-commerce is going right now it's all about sort of speeding up the delivery mechanism or sort of taking friction out of the delivery mechanism and that's what will get people to shop more and as more people shop online, the easier way you get it is what you will choose and amazon is making that bet and walmart has started to do that, as well. it will be an important thing and it will start out small and over time, it will get sophisticated and people will get used to it >> what i thought was the security potential aspect of it that you can actually get a subscription and buy more storage where you can save more footage and it can record human movement is this sort of amazon's foray into a smart home? >> the whole smart home market is taking off.
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google is in it and with the echo they started doing that i think the real play here is as i said earlier, just a way to get you to buy more stuff. >> i saw someone tweet something funny where we were all just living in amazon's warehouse we're just paying them rent. getting people in, using -- it's sort of interesting. the other part of this whole kind of mechanism is i wouldn't be surprised if down the line you see you can return stuff this way, as well and in other words, you would schedule a pickup in your home and someone would come and unlock your door and get your package and take it away. >> i want someone to come in, repack it and put the label on it and take it away. for me, that's the next step >> just sort of leave it in your front door and just take it all away without the packaging i wouldn't be surprised if that happens. >> don't you think melissa may have a point companies like canary that have done well in terms of selling their cameras and working as a home security system, this could
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morph into a home security system >> you know, it's entirely possible that people buy it just for that purpose and not necessarily, you know, for the having people deliver it >> is there a mission creep here so to speak? >> amazon's sort of foray has always been hit or miss. echo and the kindle have been big hits and they haven't landed so again, this is another experiment amazon can take these big swings because it's amazon. i don't think it's about selling the hardware and it's about trying to get stuff to you faster >> ed, thanks. ed lee we told you earlier that since chipotle's all-time high on august 5, 2015, only two stocks in the entire s&p 500 have done worse than chipotle. here are the charts. who are they here's a hint. they're both in apparel, kind of we'll tell you the names coming up and also at the top of the hour do not miss the exclusive
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interview with greenline's david einhorn and that's here on cnbc. more "power lunch" right after this opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. so what else is new? humm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got...
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we'll listen. we'll talk. we'll plan. baird.
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chipotle shares have lost
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about two-thirds of their value since hitting it's all-time high in august at 2015. only two stocks in the entire s&p 500 index have done worse since then dom chu is here with the answers. >> it's pretty crazy the s&p 500 current members have yes, just two members that have done worse than chipotle ever since chipotle hit it's record high about ten stocks have lost at least half of their value. if you look at the chart, two-thirds drop since that time frame from the peaks that we saw back in august of 2015 have been pretty dramatic. let's bring you to mystery chart number one and show you what we're looking at here. first of all, look overall, this particular stock, mystery wise here has been a consumer-oriented stock that's down about 69% in that time frame. it's already done 40% year to date any guesses, guys on what this is going to be >> it's a consumering to we talk about it quite a bit overall. >> retailer. >> crickets. i don't know >> i know the answer because i'm
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doing the next segment which is based on this. >> there you go >> professor chu, i know call on me >> there you go. >> that's my melissa impression. let's show you what it is. >> oh, oh, oh. >> this is retailer macy's, yes, one of the worst performers and again, look at the next one here, this mystery chart, also another stock that's retail oriented as well this particular stock down 70% that chipotle was down know. this is what's going to happen with undera or it. couple stocks that have done worse than chipotle. >> thank you very much any of those beaten down names of value and discount clothing are they cheap for a reason? rich ross, mark teper, strategic partners, mark, would you buy under armor, macy's, or chipotle >> no, none of them. >> and you ain't buying them >> correct chipotle and under armor are
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just way too expensive 30 times forward earnings. they don't grow. chipotle just got way too big too fast and now they need to slow down expansion and consumers are realizing that the food isn't all that healthy under armor's growth prospect comes from the footwear line and that's not doing well because they're not doing a good job outside of basketball. really, really struggling there. >> all right so there you go. rich ross, when you look at the charts, marked fundamentally as staying away, is there any chart that looks attractive enough to you? >> yes, on the short side, brian, i would say that chipotle looks extremely attractive this is a stock that's in grave danger it looks like the chart of cmgi from 2002 which is not a compliment what you're staring at here is a stock that is broken structurally and clearly in the short term down 15% today. look at those long-term weekly moving averages, brian they cross to the upside, back
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in 2009, 2010, and that gave you a very nice buy signal clearly in 70 to 700 and after a six year run, break below the 200 week the 50 crosses below the since then i think the stuff goes to 235 in short term and there is potential downside into the low hundreds if you will, so, once again, that's really the definition of grave danl and i would be a seller of the stock. >> all right nobody buying any of these things all right. thanks guys. more trading nation, go to tradingnation.cnbc.com check please and now the latest from trading nation.cnbc doikts and a word from our sponsor.
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thanks. hmm... the award-winning geico app. download it today. big exclusive, sitting down with brian moynihan, that's tomorrow on halftime at 12:00 p.m. eastern time. check please >> we've been watching this market decline and market
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reversal because we have just about paired our losses in half, still, look at the sectors that are feeling pain in today's session. they are feeling with pain with no turn around transports are of note down 1.7% alaska air among the decliners there. and also semiconductors on the back of the earnings yesterday the earnings were okay, they did though talk about their diminished outlook for crib to currencies they think that mining aspect of using the servers is going to level off. we are seeing some impact from that >> check please. news breaking in just the last few minutes, jeep prize telling congress they're going to roll back the media ownership limits on the ownership meet pg this prevents someone from owning both a tv station and a newspaper in the same market there were a lot of markets that happens and grandfathered in we'll see what kind of impact that has deregulation definitely happening. >> mine is a little less serious, it's my dream actually, but it was accomplished by --
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>> very serious. >> random scotland woman check this out she's flying from -- >> i know, oh, oh, oh, i know. >> i knew you'd know nobody else on the plane she was the only one on the flight and they still took off. had the whole flight to herself. >> luxury. thanks for watching power. closing bell starts right now. welcome to the closing bell. i'm sarah eisen in today for kelly evans again at the new york stock exchange. >> couple more days and we're getting a lot to cover here. i'm bill griffin, two big hours of closing bell today. green light capitals david iran horn making headlines with his new letter questioning whether value investing is actually still a viable strategy. he will join us exclusively to discuss whether he thinks value investing is dead. that's in just a few

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