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tv   Power Lunch  CNBC  May 12, 2010 12:00pm-2:00pm EDT

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in los angeles. the land of fruits and nuts where we await earnings of whole foods. after the bell, we will preview what is expected where shares are up a very healthy 80% in a year. we'll have that next hour. >> look forward to that very much, jane. we have a market rally today. little bit of follow through and the question is, what is the close going to look like? our bob pisani kicks off our coverage at the s&p 500. >> this is how crazy things are, we closed at 1165 last wednesday and we were exactly where we were. the difference is in between that we went to 1065 before coming back on the close here. so, the point is it's completely round trip from where we were at the close exactly one week ago. hey, gold's at a new high you all know about that. that etf and the gold stocks, well they're all up a little bit here but they have been moving up rather aggressively in the last several days. interesting little disparity
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here goldman up here today and you heard about that journal report saying federal investigators were looking into morgan stanley and whether they misled derivative deals and they know more about any kind of investigation and the point is goldman is benefiting morgan stanley's expense here and the talk is if this becomes some kind of investigation goldman will be higher because it's less vulnerable. bertha, how are we looking at the nasdaq? >> on the round trip, it's been an interesting trip back from last week. cisco at a par among the best gainers today for 39 helped bring us bac we trading $262. take a look it is one of the stronrs in the nasdaq among thealso b gainer on the y led high coar to sale google. th it out an operating battling for lagger statusrelast week. among the bigers today bidd all-timehs and told by market makers thatin today. moving well the no to the santelli
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in chicago. >> you can look at the booms ovseas becaundwere very close to 3%, but pierce the all talking having a three- es $3 mrth which is 300 million euros early was opuld be done do final numbet probably about 150 basis points lower and not that many sessi a little bit now, the big mover everybody has been to to port at a two-chart you can see it. 150 an50 t. now, let's go back to dennis. >> all right thanks rick. will the debt crisis in europe lead to lower growth on the other side of the pond and hurt our economy? steve liesman joins us with what the economists are saying about all that. >> thanks very much, dennis. play animation, roll. the scenario is being painted by economists range from bunine to double-dip recession here in the united states. but so far the most likely outcome envisioned on the street is modest at best. goldman sachs out with a record saying that the result of a one percentage point slow down in europe combine would the euro
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would knock a minuscule 5% basis points. the impact would come through trade. to europe that would accompany a slow down in the european economies. they would cheapen as the currency depreciates. but at five basis points, it is easily overcome by a slight rise in any other part of the economy. amazing to think how little exports are of total u.s. growth. in fact, goldman describes the united states as a relatively closed economy with total exports just 7.4% total gdp. canada and mexico combined would be in first place and the euro area just 1.1% of the total and the brics the fastest growing part of our experts at 0.8%. no economist report would be complete without qualifying it on the other hand. a slower europe will impact other parts of the world which could then affect the united states. if markets turn negative on the current bailout package and
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start to blow out again and impact the u.s. financial system, then the effects would be worse than the binine scenario painted by goldman. just five basis points from a one percentage point drop in europe. >> we would have 5.45 gdp growth. >> exactly. >> the markets were in such a panic. >> let's hope the contagion doesn't spread again, certainly. what about the fed and the plans to tighten policy? the global environment. how does it impact it, does it impact it? >> out with a very similar report to goldman in which they say they have three scenarios and he expects the moderate one to be the base case but he thinks on balance this may push ahead a little bit fed tightening from where he thought. he's out in mid-2011 for the fed to move in the first place. a couple months at the margin maybe. the main thing is watch the contagion and watch the market's view of the bailout. if that changes, then all bets
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are off for just your five basis points. >> so far so good today anyway. >> yes. >> let's talk more about this market because the bulls are in action, once again today. closing in on the levels that we saw right before the flash crashed just six days ago. has the fear factor gathered away a little bit. joining us now is mike holland chairman of hauldolland and company and holly list director of citi with us. welcome to both ow ff you. >> pretty amazing we moved back to the levels pre-thursday certainly. do you dip your toe into the market right now with the specter of greece and europe still out there or not? >> one fundamental factor that shifted, sue, in the last six days is the beginning of adult behavior and what i mean by that, the europeans actually did things that even last thursday they said they wouldn't do. various parts of the package. and i think that even in washington we're beginning to
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get the circus wound down and some adult behavior there. david cameron's comments in the uk yesterday, again addressing the same sort -- it's possibly a contagion that is adult behavior could be contagious, as well. >> holly it occurs to me that we investors are still having flashbacks to the near death experience that we went through over a year ago and that truly is affecting. we sometimes overreact to the new threat. >> clearly, these markets take on very much a black and white type of attitude and very little gray movement in between. we do have memory of last year. that is impacting us right now. but like mike said, the volatility has definitely come down and things seem to be subsiding. your applied volatility in ten years is approaching 10% and below 7% yields are where we were a week ago. even though you had a huge range over the past week the past month, regardless of whether you look at 2s 10s or bonds. they are subsiding and seems a
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little less volatile. >> so, mike in stocks, was that the correction? i think we keep saying we need a correction before we can rebuild again. was that it or do we still need to do that? >> nobody knows that dennis. on the one hand if the silliness that has been occurring for the last, well better part of the last year and capitals around the world is subsiding, we're getting responsible behavior and the early economic recovery, the global economic recovery is still in place, look at the earnings even through today, we probably have some further to go. we heard a second ago talking about intel having done well in the past week. intel has a big fat cash yield and a very low multiple and very bright prospect. that's an example of what's out there. >> what are you expecting in terms of demand and how is the situation in europe albeit calming down a little bit affecting demand for that issue? >> probably still is going to be some demand probably
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widespread. you can get treasury, relative value players all participating in today's auction. i would think the yields may back up a little bit more, maybe closer to 360, 355, 366 and even having said that, i think we should see a good auction. yesterday's three-year not so bad. we do have the bond tomorrow but even with the size coming out, you don't have anything then for a while on the treasury sector sector. so, i think you'll still see some demand for this given the uneasiness of what's going on overseas. it is calming but still some uncertainty and i thinkreasuries(t&háhp &hc in the safe haven. >> mike, the last time we had you on you were looking to put some exposure in a portfolio to tips because of the worry aknout inflation. do you still feel that way and is that what gold is telling us? the other thing you really liked was taiwan. is that still on the list? >> taiwan for sure yes, sue. for a number of the reason i talked about a second ago. the tips have gone a fairly long
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way and one reason i looked at the tips was not only for inflation, but you have a promise of you don't lose money with deflation. that simply has been a good bet. they actually have run pretty far. if you can get over 2% real yield on the tips, that's where i'm interested. they're not there now. i wouldn't recommend the viewers take a look at the tips right now until they get back to 2%. but taiwan for sure i think taiwan and china have had a lousy stock market. one of the worst performing markets to date and very bright prospects. i think they'll get through this global economic recovery phase and move on to lead the world. >> thank you, both. appreciate it very much. triple digit advance in the dow jones industrial average. we have it all covered for you and also going in depth on the cable television coverage. sold on gold. investors pouring into the precious metal driving prices to record high levels. can the bull run continue? what's the best way to get in on the action? tech titan smack down.
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microsoft out with new office software. google will give you a lot of the same stuff free of charge. plus, the black swan speaks. was the flash crash caused by a totally unpredictable event or not? how do we stop another one?
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yv??n9 shiren epperson here at the nymex. that is here in the u.s. in london we're looking at crude prices above $84 a barrel the discount that we're seeing at
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the nymex is the widest we've seen since february of 2009. why? because we have plenty of oil here in the u.s. particularly in the midwest and cushing, oklahoma at the key delivery point where oil supplies are at a new record. meanwhile, when we talk about gold prices here we are still in record territory. the surge we've seen in gold prices may lead to consolidation in the short run, but a lot of traders and analysts i talk to see gold prices going to 1,300 and not just the power of the precious metal but on the tear outpacing the gains that we're seeing in gold. back to you. >> thank you sharon. perfect segue because we'll talk if the bull run can continue for gold and what the best plays are with the metal sitting at record highs. let's bring in chief investment officer of u.s. global advisors and mandy joins us as well because gold is her meat. frank, i'll start with you. you think the metal has more
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room to run, but you would recommend buying the physical metal itself correct? >> i believe the best thing is have your loved one buy lots of gold jewelry. >> i agree with that. >> i think that's the first smart step in the whole process. but allocating a portion of your assets to gold is alsoways prudent prudent. >> frank, i want to pick up on that joke agout gold jewelry. it's not really a joke because driven by india and china and their seasonal demand for things like gold jewelry. at what price level do you think we're going to see demand destruction kick in? >> that's great question. any real big spike in gold and the demand for the price the price takers the jewelry buyers out of india and china, they stop buying. as soon as gold goes through any big $100 correction, all of a
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sudden these price takers come in and start buying for the gold jewelry and several factors throughout the course of the year. what's really big change taking place are the price makers. those are believed of currency destruction and the big global debt crisis that is still unraveling. they're the ones positioning in gold and you're now seeing other central banks and what was really important was india last october all of a sudden start tadiversify in gold and gold is outperforming euro terms and dollar terms since they made that purchase from the imf. these are the changes. >> why not just buy an etf? let me play devil's advocate with you. why buy bullion or gold jewelry when you can buy the etf? what are the advantages or disadvantages in your view? >> well, it's hard to get a nice kiss on the cheek from a gold etf given as a gift. but the gold jewelry is much more helpful. that's the first start. but i really think the funny
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part more serious is that the bullion etf is more helpful and a bubble into gold equity etfs and far underperform the gold money market managers. the amount of money track going into actively managed gold funds and it's nothing compared to those gold equity effs and the difference is quite substantial in perform sglns frank, overall gold, it's one thing to buy gold or copper because it will be used more as the economy rebuilds and gold is just a fear purchase and let's remember it's still roughly half of what its record high price was adjusted for inflation. like $2,065 back in 1980. >> correct. that's a thesis that over the next five years gold prices were double and that alone would be a 15% compounded gold rate and continues to decline and you're seeing that the demand continues to grow by both price takers and price makers. so, i don't think it's just a
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fear item. i think that in many countries it's basically preserved their wealth if you have unstable government policies, monetary policies. so whenever you have these three factors and you have negative interest rates deficit spending and you have running up money supply gold will perform exceptionally well in that currency and right now what we're seeing is still big deficits and negative interest rates. that is what you earn on a money market fund, treasury bill money market fund pays less than inflationary rate. this is what makes gold attractive and the reason that you have negative interest rates is because the world is fighting deflation. and this is what we've been on this huge deflationary cycle of these one bubble after another. >> thank you, frank. we should note that your world precious minerals fund up 60% versus 39% for the gold etf. we want to mention that. mandy, thank you. frank, thank you, as well. >> good to see you.
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all right, up next, big media today. people know where the money is in television, it's right here on cable on cnbc. ad revenue in cable getting healthy again. what is the next wave of growth tyler is going to be hanging out with who's who in the cable show in l.a. and he'll talk to two top analysts after the break. here's a look at the shares in some of the cable space. general electric our parent company, walt disney and time warner and discovery. back in a moment.
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(announcer) we're in the energy business. but we're also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here. we live here. these are our families.
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and our neighbors. and by changing lives we're in more than the energy business we're in the human energy business. chevron.
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it is here "power learn" live at the cable convention in los angeles and everybody in cable and programmers and the system operator. industry analysts, jessica cullen, our friend from bank of america at marijuana lynch.
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quite a show here. it's amazingx right? with the question that came up last week, that's regulation. the sec chairman will be here tomorrow talking about it and has a lot of people worried with regulation. -- >> all right technology it can work for you -- >> that's cablevision for you. satellite stuff going on in space now where one satellite is going in the path of another satellite, who knows. >> maybe that was it. we'll take a quick break and then talk more about these markets because we are up 104 points on the dow jones industrial average. matt nesto mentioning the fact that the s&p lagging behind and still not doing badly at all and greece has received the first installment of its aid package. there have been rumors that there might be some demonstrations in greece today. we're following that story for you and, up next, shares of
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morgan stanley taking a hit. reports today that federal prosecutors may be starting a probe of that bank. coming up at 12:45 eastern, getting ready for melissa lee and the gang. "power lunch" we are back in a flash.
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there you see the dow industrials doing very well. as i was saying before we were so rudely interrupted by the dpremlines in the system we're with two of the best analysts and john welcome, guys. we were starting to talk about regulation and the possible threat that the system operators, most especially might well be regulated by the fcc in an aggressive way. is this something that investors need to worry about, jessica? >> absloutly.
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uncertain uncertainty. if it depends what happens. there's a high degree of uncertainty. we hope that sec chairman can put some clarity on. it the remarks from the sec have been more benign than the market reaction. so, our view is that we're very very bullish on cable. there's ton of growth from broadbound and advertising. and a lot of opportunity. cable stocks are inexpensive. >> these are companies that would be buying services broadband. john, what do you think? is the threat of regulation much to do about nothing or much to do about something? >> i think there's always a big change of regulation it could potentially be a threat, but i think the sec is saying the right things and being industry friendly within the context and i agree with jessica, i don't think it changes it. >> one would be the cable operators. let's talk about them and which ones you like most and then the
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content companies and the network providers. jessica, which of your picks among the system operators? >> we're bullish on the top three cable operators. comcast, soon to be the parent of nbc universal. time timewarner cable and cablevision. we like them all for different reasons. >> we like timewarner cable and comcast. >> does cable win in the competition versus the telcos and the verizons? do they have the edge here? >> in my mind there is no question. in the last three quarters cable has taken 70% share of net bands in broadband and still 20 percentage points to go in that area. they are a share taker. >> you're nodding, john. >> the broadband is a very high-margin product and advertising is another high-margin product that is coming along. >> let's go and pick up from
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dennis. >> hi, jessica. for years covering this i have always been told and more it seems like distribution is king and you like, you like cablevision and time warner cable and you don't like these big players, time warner and viacom and cbs. i have an in politic question for you, jessica. is comcast overpaying for the assets of nbc universal? >> first of all, we do like a lot of the content companies. news corp disney and discovery. i don't think that comcast is overpaying at all for nbc universal. they have a great deal and their timing was incredible. they are buying nbc at the bottom of the cycle. it's at a creative low. you know, it was before retransmission fees became apparent. so, the timing and the structure of the deal is absolutely incredible and in a positive way for comcast. we think there is a lot of low hanging fruit from nbc universal. in our view, this is a great
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deal. >> great answer. we'll like that one. john, are you underestimating the impact of this sec attempt to use sensory old regulations for telephone service and apply them to the internet. if you're verizen and you just spent $23 billion getting your network ready for video and now new price controls, isn't that going to cause a problem? >> you're not being told new price controls. i think the new price controls. they have no intention of regulating price controls. >> aren't they saying one price fits all. to charge what i want for different loads of traffic? >> not at all. or usage base pricing is what you're talking about. not at all. this opens the door. >> favorite pick in the companies, jessica favorite pick? do you have one? >> right now i would say discovery has the best secular growth prospects. >> we'll talk to the new ceo of discovery's network oprah
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network and jeff bewkes in the next hour. back to you all in engelwood. >> thank you ty. cnbc has confirmed reports that morgan stanley is the focus of a federal probe to determine if the bank misled investors about certain mortgage-backed securities. morgan stanley shares getting hit hard at the open. they have recovered a bit right now. they're down just about 3%. that's off of the worst levels of the day, however. so, what exactly are the origins of that probe? cnbc kate kelly gins us with a look behind the headlines today. what have you been able to find out? >> it sounds like the u.s. attorney for the southern district of manhattan is definitely looking into morgan stanley and its role. morgan stanley famously lost more than $9 billion by misgauging how far that market would fall. but before that they were short betters on a number of subprime securities. they designed some, they marketed some and they bet against some. now, in this case, the question
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is, did morgan stanley mislead investors in any way in disclosures they made about deals they structured? two deals that were focus as of this morning. the jackson deal and the buchanan deal. the dead presidents deal. now, aapparently morgan stanley i'm told shorted those deals and the group that did the shorting was run by howie hubler who became famous because he was the guy that led to this $9 billion loss. he is now running a business that helps underwater homeowners. interestingly enough. >> have you seen the offering documents for the dead president deals and do you know goldman offering documents and on every page of the bottom it says some other part of goldman might short this exact kind of instrument. do you know whether it was disclosed? >> we don't know the full scope of all the deals being probed. they were actually not marketed by morgan stanley. the firms that marketed those were citigroup. they have no issue here ubs we haven't spoken to as of yet.
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we have reached out to them but have not gotten the response. >> this strikes me, sue, as kind of investigation by hindsight. coming in after there is a big meltdown and saying we're shocked they're not part of this firm and wall street has always done things like that and only now we decided it looks wrong. >> i don't think that's uncommon, certainly. what about morgan stanley's response to all of this. earlier this morning they were saying they had not been contacted and had no knowledge of that. has that changed at all? >> hasn't changed at beall. we were totally taken aback by it. we have no knowledge of any wrongdoing and they learned about it from "the wall street journal." the sec has been probing cdos since late 2009 and looking at a number of different wall street firms. this is a separate investigation. >> but the bar is higher is it not? >> the bar is absolutely higher because you're dealing in the criminal realm. but in terms of what prompted
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this, new book out by michael lewis talks extensively about howie hubler and it says here this is circuit 2006 2007. the only problem from the point of howie hubler's traders was finding a morgan stanley customer stupid enough to take the other side of the bet. if that dizzant get prosecutors irate, i don't know what would. >> thanks so much, kate. >> welcome, kate by the way. >> good to be here. up next, microsoft unveils its new office 2010 suite. a huge part of that company's revenue. how much of a threat does google pose? google gives that stuff away for free. >> look at the two stocks. google is down four points on the trading session and microsoft up 40 cents. back in a moment.
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microsoft takes the wraps off it software today and a not so subtle reminder that the enterprise software business and it still has a long way to go. so, we can call this the software sector smackdown. let's talk to jim goldman about it as well as heather baleeny. we are going to automatically
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assume that microsoft can sell us the stuff that google can give us for free in exchange for watching ads. >> you know, microsoft is giving away some of its own software in the process. you know google makes a big, big, big argument about how much it wants to play in the enterprise software business with google docs. the president of the microsoft business division tellsñ me hope is not a business strategy. google can hope to make some kind of end roads in this marketplace, but microsoft owns it customers have been waiting for office 2010. it's a couple weeks away. we see it today and there are huge enterprise customers that are lining up to get their hands on this thing. this is going to be a tough one for google to make some real end roads on. >> the bad news is all this, the upside is already in microsoft stock? >> actually, we would disagree. our estimates are well above consensuses for fiscal 11 which starts for them in july and we think there is still a lot of
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room for numbers to move higher. >> do you see windows 7 getting a better reception than that vista disaster. is that going to help this? >> i think most people would agree and the stats would show that windows 7, they are off to their best start with an operatorop operating system than they have been. we think they're off to a great start and we think fiscal 11 is a great year for the enterprise upgrade cycle. >> unfortunately, we have to wrap that here. thank you very much for being with us, both of you. last week's flash crash caused by a black swan, perhaps. a totally improbable event. is another one in the wings? first on cnbc, we'll talk to the big thinker who wrote the book "the black swan." no pun to say boeing is flying high. >> it is. >> okay yes, it is. but we're going to say it anyway. so, how does the company manage an incredibly global supply chain. we'll tell you.
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melissa and the gang with a fast money halftime report. see you in a few minutes.
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welcome to the fast money halftime report. gold keeps its rally rolling draw investors into safety plays. what are your best plays in the precious metals market right now. brian kelly beaks and zachary and jarrod levy of peak 6 investments. what do you make of the move higher today hitting actually session highs right now? >> well the hard currency continues to push higher towards
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1250 right now. i think what you're seeing today is commodity hedge funds are actually rotating basically making an all-end type of bet in the precious metal space moving away from oil and it is all about the precious metals. >> are things really that bad in europe that everybody will pile into the precious metal of gold? >> yeah i do think so. you're looking at a situation in europe where greece, at the very least, is caught in a death trap and everybody thinks a minor slowdown in europe. not only that numbers from china and brazil showing they may be slowing down. you have 45% of the world's economy slowing down. i would be in precious metals, as well. >> jarrod, you're nodding your head. is there a way to play this? >> first of all time buckets. gld has made a deviation move and which means in the short term it's a little overbought. here's the deal if you believe that gold is going to 1,500, if
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that's really your theory. you'll look at something that is called a risk reversal. you buy an upside call and i picked one out, actually. the 134 call versus the 134 call versus the 117 put. you can do it for 1.55 credit. if gold stays here, you make money, if it goes higher, you have potential to make money dwl. >> this is, in fact, the chart of the day. it does look like gold is hittal the double and that is bad news in the land of technical analysis. at the same time we did do our reporting here. no danger of a double top forming here. wjb says that gold versus the various currencies look strong here and no signs of a double top. where do you come out on this. >> showing me a chart is like talking to carter worth about fundamentals. i'm very glad we're doing the gartman thing.
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if you believe in long-term corilations where gold is now says that the dow is undervalued. it used to be a 10-1 spectrum. i think the gold phenomenon frankly, is more of a trader phenomenon, which means you're great when you're on the right side of it. don't go into gold, go into treasuries because gold to me is at that kind of pull back stage based on the chart and based on everything else. >> we're getting questions out there in terms of the correlation of gold and silver which doesn't make sense to me as the amateur here. when i looked at stats from the silver institute and i did look at stats 94% of the gold mine back in 2008 was used for industrial purposes, as well as coinage, metals and silverware. brian kelly, where do you stand on this in terms of the correlation historically we've seen but when it comes to the reality of how the metal is used, more correlated to the economy, which if you believe is slowing down, is not the place to be in. >> i would completely agree with
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that. you have seen the historic ratio between gold and silver 70-1. the only thing that has to do with each other is the ratio to gold to silver and the earth's crust is 70-1. silver is much more of an industrial meltal. if you want the safety you in gold if you want safety. >> where do you fall on this joe? >> they call copper dr. copper for a reason, as the drum beats for gold, that will be the same drum beat for silver as well. >> let's talk technology today. investors seeking names insulated from the world's debt issues. ibm among the biggest winners following the day, as the company says it plans to spend $20 billion in acquisitions in the next five years. very, very bullish outlook for the next five years. a buy here? too slow or steady for your tastes? >> i've held ibm for a while. i'm definitely looking at ibm here. one, i also like their sustainability in smart grid and
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energy plays. the big cap names, probably the five or six big ones we can talk about today probably have $250 billion in cash, or $200 billion amongst them. that's a lot of dry powder to be deployed in a world where, you know, these companies have an incredible efficiency edge. ibm is a leader in that. >> let's focus on another mover today, cisco. our "fast money" 3630. >> cisco is a solid company. they're hitting on all levels. ceo john chambers, people look to him for a macro outlook. emerging markets strong. if they pull the stock back on that, we would be aggressive buyers. >> right to be owned right here. stocks in the steady uptrend moved from the march low of '09 we think it's headed to 34. buy cisco.
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>> when you're looking at cisco, pricing at a modest move. right now it's completely split. people on both sides of the fence right now. either way not expecting a big move for cisco. >> let's go to the options guy, jared levy. where do you fall on this? >> i think at sisco there's strong technical support around it. sell the june 25 put. sell for 55 cents. that gives you a cost basis of 24, 45. that's a place i would be comfortable in. >> you risk being put the stocks. remember that, people. let's move on talk about american titan series. continuing with a look at the best performing name in the dow so far this year. the dreamliner delays could give you a second-guess chance at this name. let's look at the derivatives in place. we've been taking about these plays for quite some time.
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they have all pretty much been on a tear. zach? >> aerospace is near a 52-week high. from the main competitor the japanese maker, having a world of problems in terms of quality controls. and that's sort of two positive head winds behind it. i don't own it, but i'm interested in looking at it. >> joe you're in spirit? >> i've been in b.e. i like spirit. i agree with zach on his analysis. a great derivative type of play on boeing. boeing's going to hit on all cylinders. if boeing goes well these names will do well equally. >> let's quickly touch on morgan stanley. reports federal prosecutors are investigating, and you've got to wonder what it's like to be lloyd blankfein today. his stock is up by more than 2%. he's got to be thinking you know, john mack, it is your turn. brian kelly, which bank do you like the best even outside these
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two names? >> i don't like any of the banks the best. i would look -- i'm short deutsche bank. they were big in the ceo market as well. it shouldn't come as a surprise this space is being investigated. we know this is going to happen. >> the options betting on a housing recovery. we'll tell you where they're placing their bet. the fate of the tech trade lies in cisco's lap. brian kelly works the after-hours to bring you the best trades live off chambers' call. in 2003 this man correctly said a banking crisis would be railed in the u.s. economy. and tonight he tells us what's next for our country's financial future. on america's show tonight 5:00 p.m. eastern on cnbc.
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welcome back to the "halftime report." jared, you're watching lpx louisiana pacific. bullish activity here. >> looking for quick bullish activity. a buyer, 14,000 times out of the gate this morning. lp corporation, here's the benefit. lumber prices have come down sharply from the april highs. and we have paulson's bullish commentary on housing. this is kind of the second derivative of the housing recovery. this has been pummeled about 30% in the past couple weeks. >> this is also a pick of the governor, steve grasso. so i'll say it, or yepted strand board. joe, what is it? >> back around $16.80, i bought some a while ago. they're making an acquisition from the biotech space. i think longer term investors should focus on pfizer. the story is changing.
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particularly with their desire to have exposure in the biotech space. >> you know the drill jared, what do you say? >> if you hold the support that line, the s&p has been fading. be careful going into the close. >> no moderation. >> i think we're recovering from last week. we're probably going to get near where we were before we collapsed nine days ago. >> mr. kelly? >> sold. >> joe? >> buy the nasdaq. >> all right. that does it for us here on halftime. we're all over the actors. we're on the conference call and we'll get you those comments from don chambers. >> we have a terrific hour planned for you coming up on "power lunch." the results of the big $24 billion bond auction, ten-year notes, as a matter of fact, that's ahead. plus a whole lot more. did a black swan totally unpredictable event cause the flash crash?
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first on cnbc. the take on what happened and how we stop the next one. american titan, boeing shares flying more than 100% higher since the market bottomed. but delays for the 787 dreamliner presenting turbulence for boeing. plus a "power lunch" exclusive. time warner ceo jeffrey his content still king? answers from the head of one of the world's biggest media companies. the second hour of "power lunch" starts right now. you can talk about other things. that's good, because here's nasim talebb. stocks rallying right now. the dow up more than 100 points, led by ibm, dupont. gold trading near a record high. >> shares of whole foods up 43%
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year-to-date. the upscale food retailer releasing the earnings after the bell today. we're going to tell you what to expect. >> and i am tyler mathisen. i'm in los angeles. i'll talk to the ceo of oprah winfrey's latest venture. it's called the own network. and later in the hour, we'll be joined by the time warner ceo in a cnbc exclusive. i'm michelle caruso-cabrera. the dreamliner for boeing. what you see behind me, there's only four of these babies in the world. let's pull out wide so we can actually see this thing. this is number three. they're supposed to deliver one of these by the fourth quarter of this year. can they finally get it done? we have the guy in charge coming up live on "power lunch" as we look at boeing and american titan and the challenges it faces over the next ten years.
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sue, back to you. >> we have the ten-year auction coming out in just a short while. we don't have the results of them right now. but when they do come in, we will get them for you. as a matter of fact, ask and you shall receive. here's the ten-year note auction. bid to cover 2.96%. i'll get you the yield. came in at 3.548% with about 94.5% coming in at the high. rick santelli will take a look at direct bids versus indirect bids. it looks like we have indirect bids at 42%. direct bids at 25%. we were expecting some pretty decent demand for the ten-year. we thought we might need to get a few concessions out of the auction. rick santelli joins us now. >> sue you know let's cover all the dynamics of why we graded it and finally we'll end up in the grade. 41% on the indirect as you pointed out. ten auction averages 42%.
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2.96% bid to cover is a little light. so we'll call both of those roughly kind of a c. here's where we differentiate. 3.548% is a much lower yield than it was trading. we rallied right into this auction. it didn't tail off. that's an "a" there. so i think given the demand on the price side i would have to go a "b" on this auction, and direct bids, wow. 25% on directs. i don't include that in the grading. direct bidders, you know once again, it's not a bad dynamic, it's just a question of how long will it last. probably within the banking industry recycling dollars and that's something to ponder for sure. >> rick, thank you very much. you're a tough grader. so getting a "b" out of you is pretty darn good. we'll talk about the auction in just a second with our guest. many people feel that last thursday's flash crash had all the makings of a classic black swan event unforeseen highly
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improbable occurrence that blindsided pretty much everybody. but in retrospect, was it all inevitable. the man who coined the term "the black swan" was advising the hedge fund that made one of the trades that was involved in that particular incident. the "wall street journal" claims that that fund was behind the bearish options bet that initially sparked the 1,000-point decline on the dow. we are pleased to welcome nassim to "power lunch." it's been about a year since we've had a chance to talk to you. you went into self-imposed hiatus. >> yes. >> you had a year to take a look at these markets. i understand that you cannot talk about thursday's event. >> i don't want to talk about thursday's event. i had no clue about thursday's events. >> wait a second. i need to clarify, cannot talk or do not want to talk? >> both. >> both. oosk. >> that's irrelevant. i don't know anything about
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thursday's events. >> let me put it this way. given what you've written about given -- >> you know there are more important things to talk about. >> i understand. i just have one question. with what you know have seen heard reported about thursday's event, does it strike you as having the characteristics of a black swan? >> i don't have enough facts to talk about thursday's events. >> tell us what you think is far more important? >> you want to talk about the options in the government debt market. you think it's fragile. >> exactly. i spent a year away from you guys, from the world almost a year, and i'm emerging coming back because of my book is out. and i've looked at the world and realized the world is vastly more fragile than it was when i left it. you see, i thought something would be fixed. things are getting worse. the crisis in 2008 was caused by debt. okay? fragility, debt hidden risks and irresponsible risk
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management. everything i see today okay, makes me worry, because we have more debt more irresponsibility risk management particularly in the administration all right? and lower tax base and more hidden risks. when you talk about auctions i feel a tingee of worry, because we're going to talk a lot more about auction in the next ten years. >> when you say you're worried about debt levels, are you worried about global debt levels? u.s. debt levels in particular? >> let me explain, the crisis happened because we had two things taking place. number one a rise in complexity, hidden risks, less predictability, coupled with a rise in debt. okay? what governments have done over the past year and a half is convert the private risk private debt instead of letting it collapse, converting it into public debt. public debt. you know what happens when debt goes from private to public it
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stays there. and it's extremely hard to get rid of public debt. >> didn't we have to flood the market with liquidity because of the big credit freeze? >> okay. the patient had cancer here and what you do with the patient had cancer, you don't concentrate on painkillers, you focus on removing the tumor. and coming back a year and a half later, the tumor is bigger. the debt is bigger. the only drastic measure that i saw u the only hope is what they did to greece by forcing the greeks to tighten their belt. even at the cost of incurring financial -- i mean difficulties in the economy. you had to realize the culprit is debt. the culprit is not a recession. the culprit is hidden risks of debt. >> it seems though, whether they can actually adhere to the austerity measures. >> but i think that the problem -- what i saw is us it's europeans, even the europeans who are lek turk the
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greeks, are not in much better shape. i understand portugal and ireland are in bad shape. but even france, you see. so everyone is in the same boat. france had had deficits now for close to 39 years in a row. okay? we have a problem today, the problem that you cannot -- government should shoot for a surplus, because the environment is much more unpredictable than before. >> i thought they said when we were in this crisis there's no choice but to load up on debt u the hangover cure. the problem is what you do after that crisis. >> let's forget about what was done. what we need to do today is focus on removing the tumor, because it's growing every day. and when i hear you talk about auctions -- >> the ten-year we just had. >> the ten-year. i know that the government thinks that we're going to have $5 trillion to $6 trillion to borrow the next ten years. is it going to be competing with
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the european governments. you'll also be competing with corporate -- >> and the cost of debt goes up. >> one day you're going to have a bad auction. and that day will be the start of something new. to me, it's not a black swan. >> because it's inevitable. >> the bridge is very fragile. one truck is going to break that bridge. >> what is the alternative? i guess, you know i understand that your thoughts and feelings about the excess debt are shared by a number of people that we have on the air here every day on cnbc. i guess the question is, what is the alternative method to address the underlying issue that would be more effective than what is happening now? >> okay. very simple. blood, sweat and tears. i keep repeating. what we need to do is what we did to the greeks. or trying to do to the greeks. >> we do to ourselves. >> to everyone. unfortunately in a democratic environment, it doesn't work. it only works when you do it to someone else. good luck. the solution may be hyper
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inflation. of course, nobody in washington wants hyper inflation. they probably would be dreaming of a 3.25% mild inflation. you never get mild inflation when you want it. you make it deflation, okay? and then one day you will have massive panic, okay, with people buying gold or something else. >> they're doing that right now. is that what the gold market is telling us? >> what i call currency of other government. people flooding these. that will cause in turn a rise in expectations. >> i believe you said the administration is doing a bad job at risk management. did i get that right? >> yes. >> our administration. what did you mean? >> what is risk management? i have receipts i have an income. i should shoot to have surplus, because there are uncertainties in the environment. i don't know what expenses i'm going to have. the administration, they have a lot of debt. and a lot of moral liabilities. like, for example, rescuing new
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york city after one of the big firms, i will not mention its name, has difficulties. you may have the-open the administration has a liability to save new yorkers. you have a lot of liabilities. so in other words, the debt that we may incur may be a lot larger than the trillions of dollars over the next ten years. nobody seems to be worried about it. larry summers seems to be treating the u.s. economy the way he treated harvard with his bogus projections. my problem, my black swan problem comes from people making forecasts that are extremely fragile. >> i need to ask you two questions. were you at the time of thursday's market event an adviser to universa fund? >> i'm not involved in any --
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>> i'm just trying to straighten out the record. you're quoted as being so in the "wall street journal." >> i am in general adviser, risk adviser to urine versa. i don't know their position. i'm not involved with their trading. >> i understand. the second issue is if indeed we had a black swan event on thursday and i'm not asking you to comment on that because i know you can't there is a move afoot in washington to investigate and try and find out the cause, and perhaps regulate the markets in response to thursday's event. correct or not correct? >> i don't know. i have to think about it. >> i've got another one for you. a curveball. >> i think i just did. >> you made your entire career on this black swan bit. do you think it ever colors your view to the negative always to where you -- >> no, no no, you can have positive. you may have positive black swans, but to be able to capture the positive black swans, you need to be protected from the
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negative ones. and my big negative black swan isn't something like similar to thursday. my big negative black swan is a failed auction. >> that's your negative black swan. i'm going to push back on you one more time, because i've got to, it's my job. we had a 1,000-point drop in the dow jones industrial average, at the same time you had riots in greece, at the same time you had the euro collapsing, at the same time you had spreads widening out and blowing out in the government bond market and the corporate bond market, high yield and investment grade. >> yes. >> put them all together, could it possibly have been a black swan? regardless of what you know or don't know about the -- >> this is -- these events happen more frequently than we think. they may be black swans for people who are not taking them into account the possibility into account. and they would be what i call gray swans or perhaps white swans for those more prepared. the idea of a black swan depends -- the black swan depends on the observer.
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in my book i talk about the turkey and the butcher. on thanksgiving minus two days is a black swan for the turkey but not a black swan for the butcher. my idea is let's not be turkeys. prevent people from being turkeys. >> there's all kinds of mixed metaphors going on here. >> thank you very much. thanks again. see you in 11 months. thanks. >> unless we get a black swan in between there. nassim taleb his book out in bookstores today or online. stocks trading near session highs, despite all that black swan doom we just heard from a very smart gentlemen. bob pisani at the new york stock exchange to tell us why. >> we are at the highs of the days. tech airlines, industrials, at a great close. a lot of indexes have gone all the way around from the bottom on thursday, $3.65 we were last wednesday. look, we're back up here.
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above 365. we've come all the way around. so is the s&p. a lot of the sub-indices have done the exact same thing. standard and poor's used to be non-domiciled companies. they were generally excluded. they have made changes in that. lighting that up a little bit here. see that move today? that's because they're moving from bermuda to ireland. looks like they were going to be excluded. now they're going to be included. there's a nufb of other financial companies that potentially now could go into the s&p 500. like ace up 3% there. partnerre, what analysts have been talking about that may be eligible for inclusion in the s&p 500. nightcap tal, look what they're doing. they're going to be listed here at the new york stock exchange. symbol kcg, effective may 25th. dennis, back to you. up next american titans boeing, a dominant global player
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in its industry. but our partner, michelle caruso-cabrera, says there are plenty of challenges. >> you've got a spare $170 million? no? i didn't think so. if you did, you could have one of these. this is the dreamliner. this is boeing's next big event. they're trying to get one out the door by the end of this year. right after this break a guest who obfuscates a lot less. we continue to look at the challenges boeing faces over the next ten years here on cnbc throughout the day.
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s. welcome back to cnbc's "power lunch." i'm michelle caruso-cabrera, live at boeing international field in seattle, washington. we are doing a special live coverage all day of boeing as part of our american titans series on cnbc as we look at the challenges facing boeing. one of them making sure that
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they get this big old plane off the runway by the end of this year. this is the 787 dreamliner. this is the next big event for boeing. what is so impressive about it isn't just the technology inside, the other big challenge about it is they are using a global supply chain, something they haven't done before. they're getting parts from all over the world. it's led to some delays. that is the key question. despite that, though, take a look at the chart. stock year up at a 52-week high. doing extremely well along with the rest of the market. the question is, can it still move higher from here in the face of the worries about the supply chain. cnbc's aviation reporter phil lebeau has that story for us. >> reporter: for all the attention the 787 dreamliner will get for having a more comfortable cabin, flying with new technology what's most impressive and problematic is the plane's global supply chain. wings built in japan. part of the fuselage from italy. another part from south carolina. all put together in seattle.
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using partners in nearly every time zone in the world is supposed to be a more efficient and cost-effective way to build a plane. but it hasn't worked out that way. >> boeing entrusted entirely too much of the design responsibility to the suppliers. and they moved aggressively to put more of that in-house. so that they can manage the entire integration of the plane. >> reporter: for example, when vout industries was unable to meet 787 production plans boeing bought the charleston company so it could better manage dreamliner work. >> anytime you pull together a very complex system, like a commercial aircraft, you learn along the way. you refine the processes, you incorporate those learningings into the process and make it ever more efficient. that's what we're really starting to see accelerate on the 878. >> reporter: boeing mass smoothed out many of the kinks in the supply chain a chain held together by a modified 747 that transports dreamliner pieces to seattle for final
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assembly. >> when i look at this from the inside, this is really awesome. >> reporter: for bob noble this huge cargo plane is also the key to the dreamliner being a global plane. >> it's a game-changer absolutely. it allowed us to do the dreamliner. and do it just in time. >> reporter: and joining us is someone who knows about the global supply chain, and the dreamliner itself. he's the head of commercial airplanes for boeing. good to have you here. >> good morning. good to be here. >> and our aviation reporter at cnbc who has covered boeing for many years. obvious first question, the delays. are they over? is this thing getting out the door by the fourth quarter of this year? >> we're going to deliver planes this year. and i'm confident for a number of reasons. the first is it's a great airplane. so we've flown it at nearly the speed of sound. we've flown it to 43,000 feet. we've electrified it shook it baked it, and we've frozen it,
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and it's rock solid. >> you were telling me earlier about the impressive technology within it. talk to me, though, about china. where that is a huge future market. but historically, american companies have had to worry that if they actually produced anything in china, they haven't necessarily respected intellectual property. if you produce there, maybe you could sell it there more. are you going to make this plane there or no? >> we produce a tremendous amount of parts and assemblies in china. boeing's had a -- over 30-year relationship both on the customer side and the industrial side. and i foresee that going for a long time. we will compete on china, in china, based on our technology and the performance of our airplanes. >> but the most advanced technology, is that stuff that you're going to bring over there, or produce over there? >> our decisions going forward are based on that relationship. and we've had very cooperative relationships. and i see that being a positive
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environment for us years to come. >> phil? >> this is phil lebeau. michelle referenced china, but you're literally getting parts from almost every time zone in the world. if you look at how the 747 comes together, you see the key parts coming from different countries around the world. you've smoothed out a lot of the kimpgs in the supply chain. are you confident that you've got all of the major problems out of the way and you won't have production problems let's say seven months a year, two years down the road? >> well, good afternoon, phil. i'm very confident in our ability to manage the supply chain. if you look, we have a plan to get to ten airplanes a month by 2013. this is a matter of executability. really not science involved. in fact, today, the supply chain is stabilizing, and improving. what we are doing, given the different structure of this supply chain, is treating those
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factories like they're ours. we have people on site. we're now developing an interest grated schedule, so we have deep insight into all of our parts, assemblies, and the work they're doing, and we look at that every day. and what's even greater is the amount of discipline we're putting into understanding their capabilities and ensuring they have the processes that we've always had in our supply chains in the past. >> thank you so much for joining ugh. >> absolutely. >> and we'll -- >> come back when we deliver the airplane. >> that's what i'd like to do. absolutely. i got to go inside earlier. phil lebeau was, too. we'll see if the user experience is as cool as it seems. thanks for joining us. a pleasure. go to we have full coverage on our website. we've got tons of information about boeing there. and we'll see you in "street signs" with the angle a little
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bit more in-depth look with the situation with china. >> thank you very much, michelle. oprah winfrey, you know her well. she's been extremely influential in television. and of course as you also probably know, her show may have been slipping in the ratings recently. we'll talk about the future for oprah winfrey. >> her show is about to end. what is she going to do for her own network? her own network. we'll talk about that and head to the cable show interviewing the ceo. the rally continues, happily. the dow up 121 points over 1 percentage point. trying to close in on 10,009. we'll take it.
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strong market day once again with the dow jones industrial average up 119 points. the nasdaq up 39 points. s&p 12 points to the positive on the day. ty, out to you in l.a. >> sue, thank you very much. oprah winfrey will soon end her nearly 25-year run on daytime. but she is not going far. the queen of daytime is taking on cable big-time. the oprah winfrey network, own, which is a 50/50 joint venture with discovery communications, and the advertisers are already lining up to get a piece of the action. joining me now in a cnbc exclusive is the ceo of own, christina norman. good to see you. nice to have you here. >> great to be here. thank you, tyler. >> on the first of january 2011 a new network will be born and you're in charge. how much pressure do you feel? >> we feel a lot of pressure, but also so much anticipation. oprah has a huge audience.
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they're hungry for this. they're waiting for this network and we're ready to deliver for them big-time. own is a game changer. >> what's oprah going to do? >> oprah's going to do whatever she wants to because it's her network. but very specifically, the audience is going to see oprah on day one on own. we've got her first reality show, if you can believe it. oprah's opening the doors to harpo productions where she makes the oprah winfrey show. we'll follow her as she puts together that last season, that 25th and incredible season of the oprah winfrey show. >> she's going to appear across the network. this network has a lot of other programming that you're developing. some which will feature her, some that absolutely won't. tell me a little bit about it. >> think about it oprah has spent the last 25 years on the oprah winfrey show, influencing the culture and helping people see the best in themselves, live their best lives. that's what we're able to do with own, 24 hours a day 7 days a week. and it's not always in the face of oprah. there are great shows we're developing, shows that are really rooted in her best
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values. >> i want to get to a couple of numbers questions here. you've done sort of an anchor/tenant deal, $100 million in advertising with proctor & gamble. the key in our business is what you're going to be able to charge for these viewers. how are you going to be able to do that? this will be a premium price because this audience is something advertisers will want to reach. >> the audience is so valuable to these advertisers, and they know that. what they're looking for are engaged and active audiences. that's what oprah's audiences are. they're active engaged, they want to get involved, they want to live their best life embrace all the possibilities. that's a very attractive audience for advertisers. >> let's also talk about the idea of selling to the cable system operators. you're going to take over the channel space now housed by discovery health. under, i assume existing contracts. are you going to be able to go in, go back to system operators, and potentially renegotiate some
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of those contracts at a higher price? >> well, you know, it's no secret, the chairman and ceo of discovery, has been out there talking about how valuable he believes this proposition is. clearly we believe this network has an incredible valuable. that's what we're here to talk to a lot of our cable operator partners about, what is the oprah winfrey network, what is that audience, what increased value do we bring. 65 million people every month touch oprah's universe either tlur the television show, magazine, website or through her satellite radio deal. so we know we've got a big and active and engaged audience and they're really valuable to advertisers. >> dennis? >> christina, i can't really recall ever when an entire cable network has been based on a single star, a single person. and yet she can't be on all the shows on your network. there's going to be a bait and switch there, but nowhere to be seen for hours at a time. this is not as easy as it looks to get this channel up and running, is it?
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>> look, the network is not based on a single person. the network is based on what that single person stands for. and the influence that oprah has had for the last 25 years. the oprah magazine just celebrated their tenth anniversary in new york city this past weekend 6,000 attendees. oprah's on the cover throughout the magazine but there are lots of other beats that that magazine hits. people like peter walsh and suze orman, are people that we're talking to and we'd love to have them be a part of own. >> christina, thank you very much. good luck with own which debuts on january 1st of 2011. gold hitting record highs again. let's go to sharon epperson at the nymex and find out what's driving the trading there. >> reporter: the final trades are just coming in right now. we're getting ready to get in the post-close. it looks like we'll settle right
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around 12.43 for the june contract. we've been talking about it all day about this flight to safety. and we're seeing it not only in the june contract but all the way out to december. barkley's capital saying they're adding to their december futures positions, because of the little more stability in the financial markets due to the eu/imf deal. but there's also the concern of inflation down the road. that is why they are adding to those positions. meanwhile, we're looking at the volumes in the gld, the largest gold etf. they're not as strong as they were a week ago. some say that might raise a red flag here on whether this rally can continue. but so far it looks like the rally doesn't want to be stopped. back to you. >> thanks, sharon. up next we have the big board, taking the pulse of the market with steve grasso. >> should be interesting with the triple-digit advance. we're always on the lookout for outperformers. what's up 90% since the bottom?
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i'm john harwood on capitol hill. you're looking at a live picture of senator john kerry who is offering the bill that would cap carbon emissions, the senate version of cap and trade, which was such a big priority for the obama administration. that is now diminished in the
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likelihood that that bill is going to pass. the hallmark of this bill lost lindsay graham of south carolina, would be to cap emissions for power plants later phase in manufacturing have a gas tax that would help fund the transition to alternative energy as well as rebates for consumers. this is not likely to pass in its comprehensive form. we may get a slimmed-down energy bill. and i just talked to a senior republican staff aide who says republicans are likely to cooperate with democrats on the proposal that the white house outlined this morning to increase the tax per barrel for the oil spill liability fund. and raise the liability for oil companies in spills like the one bp's experiencing right now. we don't know exactly what is ultimately going to come out of the congress, but it looks like something's going to pass on that front, which is not good news for bp and other oil companies. >> john, thank you very much for that update. we appreciate it. now, for an update on the market with steve grasso down on
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the floor of the new york stock exchange. steve, in your note earlier to me, you said technicals is really what you're watching. give us the levels and tell us what you're expecting. >> right now we're at 1169 in the s&p. so 1173 is your 50-day moving average. that's what you want to keep in mind on the upday like today is. if we can't break through that, the markets should give a little bit back. i predict a lower close if we keep butting our head up against that level. >> what about the fundamentals? we have a run going on in gold, which seems to be a bit of a fear trade. either inflation or deflation trade depending on who you're talking to. but things in europe have calmed down a bit. >> things in europe have calmed down, but you have to remember guys are rotating out of the euro and they don't want to buy dollars, so they're buying gold. that trade could last a little bit longer than everyone expected. not just purely a fear trade. guys looking for the market to really break down and the lower support is 1123 in the s&p. >> ouch. >> if we remember, it seems like
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it's a world away but we remember last thursday how quick and precipitous the drop was, minus the key punch era. we can get there pretty quickly. i wouldn't start to think we're going straight up like a buck shot here, be very cautious. i think we're in a trading range at this point. >> steve thanks a million, as always. >> have a good day. >> you too. the biggest u.s. maker of plastics for water bottles, shares of the company, get this, up 250%. since the march '09 lows. first-quarter earnings leaping 50-fold, guys, from the profits a year allege. joining us now frank, with the capital markets. frank, you've got a buy on the stock and target of 82 is that right? where is it right now? >> right now, tying into your last segment dennis i think oprah would have eastman chemical on the list of favorite things, not just because of the
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shares outperformance that you alluded to but this company uses coal, in a very clean fashion to generate most of its downstream products. and compare and contrast that to most other chemical companies here in the u.s. that are using natural gas or overseas using crude oil, it really is a nice built-in advantage for eastman. >> i don't really care about the greenness of it in terms of the political crestness. does it help their bottom line mean they're more efficient or profitable than somebody using coal? >> well, it absolutely means they are more profitable than companies using natural gas or oil on a relative basis. that clearly is panning out. and with respect to the green aspect of the company, you can't talk about water wotbottles as a green product. compare and contrast to 15 years ago when the company was earning close to $7 a share, when 40% of their profits were coming from p.e.t.
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today they're actually losing money in that business and looking for somebody to buy it. >> i tha that will do it. short and sweet. thanks very much frank. >> thank you. up next matt nesto tracking the market's cautious comeback. >> investors are basically feasting on shares of whole foods. the stock up more than 230% since the bottom. earnings after the bell. will they deliver? jane wells in two minutes with a preview.
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let's take a closer look at some of today's market leaders. are they really doing as well as you think? matt nesto has done detective work and came up with rather surprising answers. >> you can't brush aside the strength of the market. but you have to look at some of the resistance. look at the closing chart of the s&p versus the dow. or the cautious comeback we can put that up as well. take a look at those moves. this is what's leading the market here today. we're looking at 2% gains for technology, materials, energy and financials all positive here. all ten sectors are on the rise. if you back this up from the april 23rd high these groups among the most battered, are going to be down anywhere from you see 4.75% for technology materials down 6.7% and the energy sector is still down 7% during that period of time. so investors clearly are not rushing in to snap up bargains. they don't necessarily see these as bargains. it's a much more cautious
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comeback, if you will. steve was talking about some of the technical levels. 1173 is the 50-day moving average, that's the next one to go. it's interesting, because we hit that 1170 level and bounced right down from it in an inner day basis. so that was one resistance level that proved to hold. i'm just showing you these stocks. these stocks are up, but they're all down 20% again, from that april high. so they're coming back, but they have a long long way to go. >> all right. thanks, matt. let's go back over to tyler at the cable show who has snagged a very big fish. tyler? >> you bet dennis. thank you very much. and the crowds are coming in. the national cable show content providers, pioneering lots of new stuff here. not only what you'll watch, but how you'll get it. technology to keep those customers paying their bills. julia boorstin is sitting right next to me. julia? >> tyler we are joined now by the ceo of time warner.
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thank you so much for joining us. >> great to be here. >> time warner has a number of cable channels, but you spun off time warner cable, the cable company a year ago. cable stocks are up a lot in the past year. do you benefit by not oeng a cable carrier? >> our content business has done great over the last couple of years. last year time warner was the only content company that had very strong growth in earnings. and this we just did a first quarter that was 60% earnings per share growth off of last year's gains. so things have worked out great for time warner's content and i'm happy to say they've worked out great for our shareholders that went into the cable business. >> there have been positive signs for the scattered advertising market. we're heading into the uptrends for next week. what is your outlook for advertising this year? >> it's strengthening. fortunately it's also strengthening in magazines. but the real growth is
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television. cable networks with turner networks, i think at the top of the heap, are looking at very strong percentage increases versus last year. >> we've seen some major standoffs between cable carriers and content providers channels being pulled off the air. are you willing to pull your channels off the air to secure higher rates? >> let's look on the bright side. people love to watch these cable channels. and consumers are getting more programming, more programming investment, and they're rewarding it with more ratings in watching. basically across the dial. and certainly for our channels. so we've put in basically modest price increases that go with inflation. sometimes a little more that reflect the viewership and the programming. i don't see a problem with kind of a partnership between cable satellite and telephone companies, that give it to the consumers, and the networks like
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ours. >> now just last week the fcc proposed some new regulations of the internet space that would potentially impact your content. how do you think these rules are going to impact you? what's best for time warner? >> well, it's early to say what will happen with those rules. a pretty complicated subject. it was kind of a court case. so it's probably going to be years before the courts and the fcc figure out what is best in terms of regulation. i would say right now, things are going very well for the content network businesses. and competition is very vibrant. today, for example, you had verizon, the telephone company, announcing tv everywhere, where it's putting all of our channels online, on video on demand for no extra charge for everybody that's got tv through verizon. that means that here you have a big telephone company joining a number of cable companies and
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both the satellite companies where everyone is offering cable channels on demand either on their television or on your broadband device for no extra charge. so there are currently 20 million homes in america that are getting this. and i think that shows a lot of innovation a lot of consumer benefits coming forward. and a pretty effective competition between satellite, cable and television. >> jeff, you've gotten out of the cable delivery business. >> yes. >> the company began as a magazine company basically. can you see yourself getting out of the magazine business? >> no, i think the magazine business is having a pretty strong resurgence right now. time magazine for example, is one of the leading apps on the new ipad. you should do a story on it. if you look at "time" magazine on ipad you'll see it come to life, including moving pictures, and you'll see "sports illustrated" and people doing
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the same thing over the next few months. i think if you take the -- >> will the ipad save magazines? >> not just the ipad. any reader device. any kind of reader. this morning you had google. and android. verizon announcing they will put out a tassel. i think when you look at the one thing that gets overlooked, which is readership for magazines is up, not down. this is not like newspapers. >> we have to -- i have to jump in because there's breaking news, jeff. i apologize for that. let's go back to headquarters. >> thank you, ty. the breaking news concerns google. jim goldman's got it. >> yes, sue, good afternoon to you. we have breaking news. htc, the smart phone maker, has now filed a countersuit against apple answering apple's suit against htc which was filed in march. htc, the smart phone maker is asking the international trade commission to now halt all sales
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of the iphone the ipod and the ipad as well. claiming that apple is the one violating htc's patents. apple, of course, claimed that htc was violating 20 of apple's patents. this action follows nokia's claims last week that expanded its patent suit against apple to include the ipad. it seems like the legal wrangling is only just beginning. >> wow. >> it sure does. that sounds like a silly case. first, the iphone came out before the google phone. tech companies have to stop going to government agencies and telling on each other. whole foods earnings out after the bell today. >> the stock of course, has been on a tear, but will the earnings send it even higher.
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i'm jane wells in los angeles. whole foods stock has been flying higher than a cage-free vegan diet fed chicken. shares up 50% in two weeks. morgan stanley said the company "has to beat consensus estimates and raise full year guidance in order to maintain that current valuation." what is the street expecting after the bell? earnings of 33 cents a share, 9 cents better than a year ago. revenues are expected to come in
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at $2.05 billion. store sales fell almost 5% expected to rise 7%. in my channel check, i can tell you there are more people milling around blocking aisles at whole floods. cash flow said the high-end shopper is back but it maintains a hold on the stock. whole foods continues to expand, opening this morning its 295th store. a massive 30,000-square-foot location. it is not alone. other similar markets are growing. also today, also in southern california, phoenix-based bratz market is opening its 13th store. the no-frills organic store. i'm tossing back to you. oh "power lunch" back in two minutes.
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blackstone ceo is here, also great taste in music. he was asked recently, name two great songs. he picked "staying alive" and "maggie may." >> and when he was 29 or 30 years old, that was the music that he listened to after he completed his first and biggest merger deal.
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and it was a big one. especially for somebody who was 29 years old. it was beatrice foods and tropicana. >> i think for somebody who doesn't comment a lot, it made him really, really a lot more human. have a great afternoon. "street signs" is next. welcome back to street soins, everyone. we're moments away from breaking news on america's debt. the release of the federal budget deficit for april crossing i hear steve muttering next to me -- >> it is the largest on record. posted surpluses in most aprils but not this time around. $799 billion versus $802 billion. i think the story here is that we have this huge improvement in
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the month of march. just in the prior month. and it looks like that improvement has stopped. we've got to look at the outlays and the revenues and see why this is continuing to the downside. $82 billion. we had a consensus of $40 billion. i have to say, i saw a bunch of economists on the street with an $85 billion figure. unclear if they knew that the consensus did not. there were two or three. jpmorgan was one of them. we continue our record of 19 straight months of deficits. april receipts 245 versus 266 a year ago. i'm guessing this is the kicking in of some of the tax cuts passed by president obama, along with the residual as expects in terms of refunds and residual aspects of the recession coming through here. i wonder how much this changes the outlook of the street whether or not there is sort of a sense that the deficit numbers have peaked and will be coming
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down from here. that was the emerging consensus after the march numbers. unclear if that's still going to be the case after we get these numbers. there's got to be some renewed concern here about the trajec
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