tv Power Lunch CNBC May 14, 2015 1:00pm-3:01pm EDT
get a pullback. stock still north of $80 and looks like it wants to push toward $100. >> we are setting at pretty much session highs on the s&p 500. with facebook leading the s&p 500. that does it for us here on the halftime report. i'll see you tonight at 5:00 and on "power lunch," which begins right now. halftime is over. "power lunch" and the second half of the trading day start right now. hi, everybody, and welcome. along with mandy drury i'm tyler mathisen. the dow is up about 1% right now as we look at the numbers. the s&p 500 up a little less than 1%, but the nasdaq composite up more than 1% at 5040 and change and the russell right there on the 1% line. >> with a full week average on jobless claims hitting a 15-year low. is this as good as it's going to get for hiring in the usa? i.e., have we hit a peak ty? >> and have the impact of the bird flu is in our radar today. price of eggs turkey chicken
jumping. wait until you see what's happening on the ground in iowa. meanwhile, though we begin with the markets and those 1% gains or thereabouts. let's get the trading action. bob is live at the new york stock exchange, bertha coombs following the movers at nasdaq. bob, you go first. another big story on the floor today is avon. what's going on with that one? >> we just had a wild morning here. this post was filled with almost 100 traders. they have halted three times on what's called a volatility halt. that is for unusual trading action. apparently there was an erroneous and false report that they may have had a takeover offer. now, we're trying to sort all of this out. again, it appears that it was erroneous and false but the important thing is that three times the stock was halted. the company did not make a clear statement down here so absent that, it couldn't be halted because the company had a statement to make. it could only be halted because we had circumstance breakers kick in as a result of the 2010
flash crash. those circuit breakers kicked in three times. they kick in when a stock moves 5% or more in a five-minute period. that was designed to halt this kind of volatility. bottom line, stocks reopened but only up 3%. here's two things. number one, we need regulatory power on the floor to halt stocks when there is unusual activity. not clear they have that. number two definitely need to look at how some kind of what appears to be an erroneous statement got into the edgar filings which the trading community relies on as accurate information fickparticularly on takeover offers. the s&p 500 great day overall. producer price indexes were very low and that looks very good for stocks here for the next few months. kohl's was a big disappointment. overall it's a big winner up over 20% but their guidance was not raised and a big issue is what's going on with same-store sales. kohl's only up 1.4%. j.c. penney also a bit of a
disappointment below expectations. macy's was down, that was yesterday, but we expected that to be up. the bottom line is we're not getting the same-store sales growth we were anticipating. remember, these numbers reflect april as well. this is going into the fourth month of the year. j.c. penney, you see it's down here but it had a great run so far, up 30% on the year. we'll be waiting for nordstrom's after the close. a lot of activity down here today. tyler, back to you. let's head uptown to nasdaq and bertha coombs. >> we've got the nasdaq composite about 50 points away from its all-time high close. today it's really a story about big cap tech. we have seen that momentum continue and it's starting to drag some of the other sectors that often move as traders get more bullish, so we're seeing small caps higher today and we're also seeing the biotechs starting to chime in. big time for biotech with asko coming up, lots of abstracts
released out there. meg terrell has the rundown on all of that. interestingly, although we have big cap tech, cisco is sitting out the rally. folks not impressed with cisco's outlook as cisco tries to turn around and move on to a new chief executive. but you've got the likes of facebook today trading higher on mark zuckerberg's 31st birthday. his holdings in facebook alone right now somewhere in the range of $35 billion with two days' gains. we're also seeing higher for microsoft. apple having a fairly strong day as well. even though you're seeing a big move out of retailers, traders are saying some of that is coming out of retail with all the disappointment. here at the nasdaq you've got perry ellis much better than expected numbers as it's turned around and that is at a new high today. children's place also beating and raising. not getting as big a lift ebay having a pretty good day and amazon not notwithstanding the big boeshl threat from walmart. if you watched my quiz what's
the darling? paypal, when it separates from ebay later this year, the company says it's going to relist here under the old ticker symbol pypl. guys, back to you. >> thank you very much. i wouldn't mind $35 billion on my birthday either. thank you, bertha. let's get to a news alert because we just wrapped up an auction on 30-year bond. let's get to rick santelli with the results. we've had a couple of auctions this week. on monday an "a," yesterday an a plus. what about today for the 30 years? >> when you put the three plus, d plus. i'll tell you why. first of all, the when issued market kind of where it was just before the dutch auction ended -- we priced the $16 billion in 30s at 3.044. higher yield lower price. we tailed a couple of basis points, not good. that's where the heaviest down
mark on grade goes. but everything was either light or average. 2.20 was the bid to cover. that's light for a 2.41 10 auction average. 11.1 on directs definitely light in lieu of a 10 auction average of 16. dealers take 38%. that caps off $64 billion in supply with a weak grade on the long end where all the volatility is. does this make a statement about the market? i'm not sure but the concessions looked a lot jewsuicier for 3s and 10s. mandy, back to you. >> which one of these is not like the other. d plus. let's take a look at the 10-year yield is doing right now. let's bring up a board and show you. this is the german 10-year sitting near 2015 highs. so with the 10-year right now sitting at 2.237% as we speak. we'll keep an eye on that for you as well.
in the meantime, oil under pressure. jackie deanginaeles has all of the action. >> traders are saying, look, don't read into this. this is profit taking because we moved so far so fast. you still have reasons for oil to move to the upside. the first would be the weaker dollar but also geopoliticianauloliticsgeopolitics. the saudis taking that victory lap looking like they think that they won the war over the shell producers. in their monthly reports the eia and aeu show shell production will decline but only slightly. then you have reports saying actually shell production is going to increase. i looked at the production numbers overall in the u.s. for last week. we're creeping back up towards 9.4 million barrels a day. that's record-like production. so those saudis may need to take a breather for just a moment and we'll be watching these prices for you.
back to you, mandy. >> thank you so much jackie. 2:30 eastern is the oil close. another train crash to tell you about and this time it is a freight train derailed in hazelwood, pennsylvania, just east of pittsburgh. nobody was hurt, thankfully, but 11 cars fell off the tracks. the train was also pulling dozens of tanker cars but they are safe. they did not run off the tracks. this also comes on the heels of monday night's terrible and fatal amtrak crash just outside of philadelphia. the train's engineer still isn't talking to authorities. his attorney says he doesn't remember the crash. today the death toll was raised to eight. more than 200 people were hurt. investigators are on the scene still. nbc news has confirmed the train was traveling more than 100 miles per hour when it went through a curve with a speed limit of 50 miles per hour. ty. >> weekly jobless claims fell to a 15-year low. yet the labor force participation rate continues to see a steady decline. have we reached peak demand for
jobs? let's bring in steve liesman. also with us is cnbc contributor joe la vornia. look at you two down on the floor of the exchange. nice to see both of you. joe, i would say over the past couple of weeks the economic data we've gotten is a real dog's breakfast. some of the numbers are good, some aren't. what are you thinking and what is it saying about where we really stand? >> you're right tyler the numbers have been in general pretty lousy relative to expectations. the only series that was decent but only relative to expectations was employment. jobless claims have been a bit better but retail sales have been soft we've got some ppi numbers that that were pretty weak. yes, the numbers have been soft. unfortunately we're transitioning out of what appeared to be another very harsh q1 so we'll probably enter the spring and i guess is with expectations as low as they are we'll probably be to the upside and produce a bit better growth
than what we saw in q1. >> steve are we really almost at peak demand for jobs? are we getting towards that full employment number, which i guess the fed says is right around 5% 5.2%? >> i want to say publicly i feed my dog only quality food. i don't know about joe or you but i don't want a visit from the local aspca. i think for sure tyler, we're heading towards that number. unfortunately, it's a number you cannot know essentially until you've been there. the federal reserve looked at the situation and said we've had this precipitous decline in the unemployment rate. what's happened to inflation? almost nothing. ergo the conclusion is the full employment rate must be lower so they lowered it by 0.3. i would not be surprised if they did it again. jobless claims being at or near this 13-year low that it's been that it's at right now, look at the ppi it's negative. we have another situation where we're not seeing a whole lot of wage growth, we're not seeing a
whole lot of inflation but yet the jobs numbers is pretty healthy. if we hit that 5.1 and there's no inflation, the fed may say that number is 4.9 or 4.8. it's an uncertain number. >> joe i see that facebook is just one of the large and influential companies that's gone down the minimum wage route. it's making sure that it's vendors and contractors here in the united states pay at least $15 an hour to its workers. as i say, it's just the latest company. do you feel that cumulatively this will start to show up in wage inflation? >> you would think, mandy. it's not just facebook, but starbucks, t.j. maxx a lot of municipalities have raised their wage rates that aren't tied to minimum wage but higher wages. so you would think over time. again, the aggregate data looks at the whole universe of people. as steve said, he's exactly right, it's very mixed to this point. and the fed probably, if there's not much evidence of wage inflation and we push lower
unemployment, as i believe we will, they'll probably move the goal posts again. one would think over time the anecdotes that you highlight at some point will show up in the official numbers. but it may not be this year. maybe it's a year ago. >> joe, steve, thank you very much. mandy. the bird flu outbreak keeps getting worse. one of the questions being asked is what on earth do you do with all the birds once they're infected? morgan brennan is live near ground zero. >> reporter: that's right. with more than 25 million birds just here in iowa in the process of being destroyed, that's become one of the big' questions. we have all the answers or at least how officials are looking to answer that question when "power lunch" returns.
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shares of kohl's sliding today after the department store operator reported weaker than expected same-store sales for the first quarter. the shares are off nearly 12%. apple shares are up by 2% after they raised their earnings per share estimate due to higher iphone demand. and bank of america upgrades dupont saying they will emerge from the recent proxy battle a leaner and stronger company. all righty, the bird flu outbreak keeps getting worse. one of the questions being asked is what do you do with the birds once they're infected? morgan brennan is live outside
the iowa state university veterinary medical center in ames where so many cases of avian flu are coming in, they have kept the labs running 24/7. hi morgan. >> reporter: hi tyler that's right, they have. the majority of the confirmed 50 cases and counting of bird flu here in iowa have come through these labs where the testing process begins. >> when the dead bird is sent in, once they're checked in over there, then those birds bring out to the floor. there is one of our pathologists there. she or he will look at it and then take the proper sample for the testing. >> what is the sample for the testing? >> normally it's swabs. swabs from the mouth. then they save the dead bird body for any kind of further testing in case it become negative. >> reporter: so tests here are turned the same day or following morning. then they head to the usda's
labs right down the street for final confirmation. while all of this is happening the farm is being quarantined. all product is yanked offline rand the farm is week scoured for any clues as to how the virus got in and whether biosecurity measures have been breached. once the usda confirms, the disposal process begins. with more than 25 million birds that are in the process of being destroyed here in iowa alone this has become a huge undertaking. there are many options that are involved in that process. everything from sending the birds to landfills, to call posting and putting the remains on the properties to incineration. in fact they're bringing in portabline incinerators to handle some of these birds. experts here are actually telling us that this entire process, because once the birds are destroyed the farm has to be scrubbed and then repopulation begins. experts here are telling us that this entire situation from testing to repopulation is going to take a very long time.
you're looking at anywhere from six months to more than a year for many of these facilities to come back online. so this is -- this is a long-term situation for the folks out here in iowa. guys back to you. >> thank you very much morgan brennan. well air travelers become less of a hassle for frequent flyers. yes, you heard me correctly less of a hassle. we'll tell you why in the second hour. plus shares of jack in the box are down today but up over 60% over the past year. the reason may not have much to do with the burgers. that is straight ahead. plus, today's crime and punishment. >> imagine, snapping up a bent low and ferrari in the same day. it's part of a wild spending spree after the sole heir to a family fortune was coned out of millions. that's all coming up right here on "power lunch." it took tim morehouse years to master the perfect lunge.
imagine a con so intricate it could go on for over a decade undetected by the victim, who ultimately lost millions. that's exactly what happened. and andrea day is here with the crime and the punishment. >> we're talking about a mother-daughter crime team plotting for years to steal a family fortune. in the end, the sole heir was
left with next to nothing. an elaborate fraud with the con artists burning millions on trips and fancy cars. behind the swinldsdle, a mother-daughter team, even a baby to target this man, ralph raines, jr., the sole heir to a family fortune. the assistant u.s. attorney -- >> they had amassed millions of dollars in investments. their tree farm was wort close to $15 million. >> reporter: raines had a fas takes with the paranormal. contacted her and met her here. >> from the very beginning rachel lee's plan was to build trust with this victim to get into his life and to find a way to get control of all of his assets. >> reporter: over the years she says, lee befriended raines convincing him to bring her on to care for his ailing father, to buy this million dollar home
where she moved in with her boyfriend and to let her take control of the family finances. >> her only work history had been as a psychic. she had not completed formal education beyond the third grade. >> reporter: when his father died, investigators say lee took her plan to the limit, actually creating a fake persona for raines to fall in love with. >> rachel lee knew exactly the type of woman she needed to present to mr. raines jr. >> reporter: according to prosecutors, the blonde lee introduced to raines was really her own daughter in disguise. she called herself mary marks faked a british accent and raines fell for the hoax. marks even convinced raines that he had fathered a sop. >> hi mom. giorgio and i sure miss you. >> reporter: he was so taken he had mary's name carved onto the family headstone. the lees now had total control. they began liquidating
investments and sold off the tree farm. >> they brought in $12.3 million from the sale of the tree farm properties. >> reporter: she said that's when the spending exploded. they bought a $300000 bentley and $200,000 ferrari in a single day and flying first class clas all over europe. >> we'll be in florence tomorrow. it was beautiful. >> reporter: the con went on for more than a decade. according to prosecutors began to unravel when three investigators met by chance at a scam training session. they each had some information about raines and a psychic and began piecing together a case. >> if the stars had not aligned perfectly on that day, we may have missed an opportunity to intervene in this case. >> reporter: the lees, finally busted in the same psychic shop where it all began. >> undue influence and financial exploitation, these are cons as old as time. rachel lee was skilled in executing this playbook. what she did really amounted to brainwashing over time.
>> and prosecutors say when it was all over, raines had only about $200,000 left to his name. rachel lee pleaded guilty to multiple charges and got 100 months in federal lockup. her daughter and boyfriend are also behind bars. back to you. >> great reporting. let's go to the bond market where we get some great reporting from rick santelli checking the action there at the cme. hey, ricky. >> hi mandy. you know, if we do a postmortem on $64 billion in coupon supply ending with a sloppy 30-year, look at the intraday. we could clearly see yields move up after the dutch auction buttoned up. i gave it a d plus. as far as up the chart a bit, let's open it up to november and let's look at the investment grade etf lqd. that is at the lowest level in about eight months going back to september. maybe the most interesting chart
that floor traders love to look at is the old crb index. look just before the end of last year. these are the highest levels it's been at since the end of last year. tyler, back to you. >> i'll grab it from there. thank you very much, rick. let's take a look at what's happening with gold prices. they're currently sitting around three-month highs. gold is closing at 1224. this is as of course the dollar is also on the back foot. the dollar is around three-month lows against the euro and the dxy is around four-month lows. copper and playedalladium are moving lower. just wait to hear how much money has changed hands and we still have another day to go. robert frank has the story. we'll show you the rothcos, warhols and controversial nude
hello everyone i'm sue herera and here's your cnbc news update. the fire chief says the body of an eighth victim has been found at the amtrak crash site two days after the derailment which injured over 200 peep e. house speaker john boehner got a little testy when he asked at his news briefing about possible cuts to amtrak funding. >> are you really going to ask? that's a stupid question. listen, you know they started this yesterday. it's all about funding it's all about funding. obviously it's not about funding. the train was going twice the speed limit. adequate funds were there. >> another train accident today. a pittsburgh freight train
derailed causing 13 cars to tip over. officials say the train was empty and there were no injuries. the accident was in the city's hazelwood section, which is a couple of miles east of downtown. gunfire and explosions rang out in burundi's capital. thousands had been protesting for three weeks now after the president announced that he would seek a third term which is in violation of that country's constitution. shiite women and children demonstrated in yemen's capital demanding that air strikes by saudi arabia stop. this comes two days into a five-day cease-fire which would allow food and supplies to civilians caught in the middle of the fighting. and that is your cnbc news update this hour. back to you, mandy. >> thank you very much for that sue. stocks are rallying today with a triple-digit gain for the dow. we're less than 40 points away from cracking that record again for the dow. as for the s&p at 2119, we're already above its record close.
so here we go again. you know back at record territory. well, tiaa sara malick warned there could be a 10% correction this summer. >> we think there's lots of factors. higher oil prices higher inflation, interest rates increasing and the markets becoming more volatile going forward. >> tony do you see a correction on the horizon this summer? >> thanks for having me, mandy. no, we don't see a correction on the horizon. really it's a pretty easy market in our view to figure out. there are essentially two things in order to keep this market moving. one is essentially some prospect for strong economic growth and secondly, very very low rates. we have both of those elements in spades. and so while we can never predict a correction we don't
see any reason to expect one at all. i don't agree that we have inflation in the environment. average hourly wages are quite low. we had a very low rating this morning on ppi. really on the economic side as joe pointed out, it's been a very mixed bag but overall there's clearly economic growth. >> do you think this could be a situation of good news equals bad news? you get good economic news and that can be bad news for the stock market if people start ratcheting up their expectations? >> that's why i think the jobs report last week was called the goldilocks job report. we essentially threaded the needle and have a jobs report that implied enough economic growth but not too much to stir concerns for inflation. we're seeing that in the ppi report, we're seeing that in the average hourly wages and the jobs report last week so there's not a lot of foundation to expect that the fed is going to increase rates any time before the end of the year. >> let's bring in jeff from
russell investments. great of you to join us as well. would you be happy to esee a pullback if not a correction? >> we would be happy. we wouldn't be surprised. i think a 5% pullback is obviously just the sort of volatility you do get in markets, particularly during the raise in cycle in previous cycles you've seen that sort of volatility as there is some uncertainty created about potential growth. things do look good. the goldilocks economy is here. we've seen very good economic growth numbers. yes, the retail sales numbers were disappointing but the lowest unemployment claims since 2000, which is 15 years ago. there are issues about the quality of the labor market, but net-net we're seeing good, robust employment numbers. i think the big headline issue or risk is pe ratios
replacement ratio there's a variety of metrics that make the market look fully valued if not rich. so we have been neutral u.s. equities since december and have been favoring europe and japan as alternative areas for better return prospects. >> since you mentioned europe if you want a correction, the dax is almost in that territory5seyeìáhp &hc% about 9% off its record high so maybe some opportunities to get in there. thank you very much for both of you for joining us. go to powerlunch.cnbc.com to see why jeff thinks emerging markets might be a good bet. ty. stocks are near record territory. so is art and how. christie's auction house having a block buster week. robert frank with some of those staggering numbers. >> over $2 billion of art sold in just 48 hours. this is now the highest grossing spring auction season ever and the sales aren't even over until tomorrow.
christie's wrapping up its evening sale last night with $659 million in sales. that follows their $700 million sale monday night giving them just over $1 billion in 48 hours. the headliner last night was called number 10 that went for $82 million. that was twice the estimate. huge huge price for that piece there. now, andy warhol's mona lisa went for $56 million and the controversial nude called benefit supervisor resting. it's all in the eye of the beholder went for $56 million, also above estimate. the art market is now more top heavy than ever. the top five sellers alone totaled more than a half billion dollars and all five were sold by christie's. whether christie's made much profit at all because of all the guarantees they made is a mystery because they're private. it was the most global selling
season. asians accounted for a third and christie's came from 35 countries. the buyer for the most expensive painting ever sold was a china buyer. >> benefits supervisor resting. that was top heavy. >> that was fabulous loved it. okay, some help may be on the way for california's severe drought. here is the weather channel's dr. greg postel. >> rainy times are coming courtesy ofv it has been moving on board and bringing rain with it. let's model it out going through the morning hours. you can see all the way from san francisco down through bakersfield, los angeles. there's another system coming in jurtacy of the jetstream bringing a lot of rain to essentially the southern half of california. over the next couple of days,
how much rain will fall? we think it will be several inches through parts of the southern half of the state. 1 to 2, l.a. to san diego. a little less the farther north you go. back to you. >> thank you very much. well, the on-demand economy, hot startups bringing you whatever you want whenever you want and raising a ton of money. but how hot is too hot when it comes to these valuations? plus -- >> today's powerhouse is home to one fortune 500 company. it is the fourth most bike friendly city in the u.s. and home of the first american hockey team to play in the stanley cup. can you name that city? ...and takes the wheel right from your very hands... ...this isn't that car. the first and only car with direct adaptive steering. ♪
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colleague based to that building. there is no record of pgt capital at the head quarter building they listed in london 125 broad street. the security guards had never heard of the company. there is more mystery surrounding this story than sherlock and holmes and they are both guys based in lopdndon. the very latest on this mystery bid from it looks like an increasingly fake company coming up at the 2:00 eastern time hour. >> the plot thickens. >> like gravy. >> yeah, like gravy. okay a daring daylight robbery caught on video. visitors to an oregon fish market were sent fleeing after a rogue seal decided he couldn't take the temptation anymore. he made a few false starts before gaining industry and then makes a break for a dropped bag of food. however, after realizing it was only fruit he retreats to the safety of the water, perhaps he realized there really are more fish in the sea. ty? >> that is something. look at that, man.
let's move to the powerhouse here. there's a thread here. home to the first u.s. team to play in the stanley cup. we're talking about portland, oregon. how about that? with us is brian ramsey of hassen company realtors. brian, let's check out from portland market stats. the median sale price is about $271,000 inventory 6600 homes. properties stay on the average of 83 days. our first listing 1270 southeast 14th avenue, around $400,000. 5 beds 3 baths, a spacious home. why does this stand out to you? >> this is a perfect house for the millennials. everyone that is looking to build a family is moving out to this great neighborhood. they want a house they don't have to do any work on. great public schools. they want a lot of space. let's move to the second listing in the heart of portland. 333 west 9th avenue, unit 1307.
about $800,000, taxes of 10 grand. one bedroom, two baths and 1,382 square feet of living space. this is fairly high priced for a one bedroom. >> it's in that great urban renewal area that turned into luxury condos. it does have a view all of the amenities that someone that might be an empty-nester will want. you can go downstairs, go to shops, restaurants, public transportation. not too far from the airport. hotels for friends. keeps it real simple. >> it's a beautiful place and looks like it's a very spacious despite the fact it only has one bed. now to the powerhouse of the week. 16835 greenbrier listed for $6.9 million. taxes of $38,000 annually. six beds, eight baths 8800 square feet of living space and on some water. tell bus that. >> this is the arm candy of our entire area. it's one of my most favorite properties. it is for sale. it has just under 140 linear
feet on the lake. we don't have many lakes in oregon so it's prime real estate. it has a boathouse, plenty of space to have a family, entertain. it's the most beautiful property in my opinion and it's a property that i would love to buy myself. i'm sure you would too. >> i'm sure i would. look at that. some outdoor cooking area as well. brian, thank you very much. brian ramsey from portland, oregon. >> arm candy i love it. time for our select house. this should be familiar to all of our viewers. it is the house from the 1983 classic "scarface" based in montecito, california and not miami as the movie suggests. it's got four bedrooms nine bathrooms, big mansion with a major price reduction of 50%, folks. for $17.8 million, you can own all 10,000 square feet of this iconic home just 90 miles outside of los angeles. well education nationwidely watched global school ranking
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comcast business. built for business. before the break we give you some of the top ranking countries in the world when it comes to education. so which nations are in the top five? >> according to the oecd which ranked the countries on students' average scores in math and science, taiwan comes in fifth. >> japan comes in fourth. >> south korea is in third place there is a trend here. >> hong kong coming in second. >> number one in the world, singapore. singapore. so there you see a strong tilt toward asia. where is the u.s. on this list? it came in 28th. the report claims a quarter of students in the united states have not acquired basic skills, making it the second worst high income country in the world after luxembourg. >> it's kind of interesting.
>> you spent a lot of time in asia. what do they do right? >> i lived over a decade in asia. you ask what are asian schools doing right? let's less focus on the individual. there's less focus on be creative, it's more like this is what you need to learn. the schools are strict, the parents tend to reinforce that educational strictness as well. also they invest in their toecherstoech teachers. teachers get a lot of respect in asian culture. >> this is not the first time we've seen that kind of number out of the united states. and it is a real thing that we need to invest in because the future belongs to people who do well in the s.t.e.m. disciplines. here are this hour's power points. we lenders weekly jobless rates have reached a 15-year low. next, we learned that gold prices hit three-month highs today, up 3% so far this year. the dollar on the other hand is around three hef month lows
against the euro. finally, we learned that over $2 billion worth of art has been sold in the last two weeks making this spring the highest grossing spring auction season in history. christie's head liner piece last night was by moody rothco called number 10. it was auctioned off for $82 million. >> i like the benefits manager resting. i've got to say. >> go ahead. >> no. >> if you missed any of the stories in the past hour like the benefits manager resting, go visit our website at powerlunch.c nbc.com. yahoo! finance question of the day. as stocks continue to rally, where do you think we'll go from here? 23% say stocks will be soaring, 40% say a correction is due. 36% say they will remain flat. kate rodgers now, market flash. >> well, we're looking at computer sciences spiking on a report saying the company is planning to separate its government business from its commercial information
technology division. the announcement could come as soon as next week when computer sciences posts its quarterly earnings report. while computer sciences is open to acquisitions it seize the split as the most attractive action to pursue. the on-demand economy promises whatever you want delivered right to your door and we expect it. can they deliver on their sky-high valuations? that's the question. also another derailed train in pennsylvania. this time a freight train outside of pittsburgh. we're talking to the president of the regional planning association to get his take on the state of our rails and bridges. our crumbling infrastructure, straight ahead on "power lunch." when a moment spontaneously turns romantic why pause to take a pill? and why stop what you're doing to find a bathroom?
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you just saw me ten minutes ago. i'm brian sullivan. coming up on the second hour of "power lunch" much more on that mystery surrounding avon. plus here is something you don't hear everyday. the airlines are making something less of a hassle. it sounds impossible but apparently it's true. we'll tell you what it is ahead. and must-see video about a guy, helio castroneves. right now back to tyler and mandy. a new report is out showing
investor activity in on-demand startups like uber airbnb and instacart up 5% year over year. is the on-demand economy a look into the future or a bubble-h9 ready to pop? josh joins us to break it down for us. hi, josh. >> hi, tyler. you know, the rush of capital into these private tech companies, tyler, is showing no signs of letting up. this year is on pace for a new funding report that could more than double 2014's total of $4 billion according to cb insights. uber is the clear leader. it's raised nearly 40% more funding than all other on-demand services last year combined. after that lyft air bnt, instacart and eventbrite. since 2010 the most active has
been sv angel, founded by ron conway. the next two are andreessen andreessen horowitz and first round capital. they think money will keep rushing into startups. the smartphone is helping from groceries to drugs. with instacart users can order groceries right to their door. many of these startups will go belly up and startup founders might be more complacent and less scrappy but pokorny says that is a self-correcting problem. if entrepreneurs don't execute, they won't be able to raise that next round of funding. >> thank you, josh. let's debate this. does the actual interest in on-demand warrant all the investments gross. john elson is bullish on the
on-demand market. john, do you think some of these valuations are crazy when you think about how low the barrier to entry is in this department? and even a company like uber is getting more and more competitors almost on a monthly basis? >> you know, my partner made a comment, which was there's public market sobriety and private marketin eastbound yags in eebebriation. uber has grown at a rate and no one except employees know what's going on there. it is not going away. we are not going back to the way we used to do things. i took an uber over here. i'm addicted and it's not going away. >> the question is whether the valuation of $50 billion for a taxi company is really appropriate or a sign of something different.
s sue, why are you skeptical that this instant on-demand economy has not got the staying power that some think? >> well i think that there are some sectors where there's fundamentally some type of inefficiency and i would put uber and airbnb in that bucket that they are solving some inefficiency. but when you look at businesses that are in the grocery delivery space or are in you know the food delivery space you're already talking about low margins and the opportunity to charge consumers money and make a profit on that i think is where some of the disconnect is. you know kind of in businesses where there's not fundamental ian inefficiency i think that it becomes much, much more challenging to make money in this sector. >> yeah, that's a very good point. certainly a moment ago josh was talking about how a number of on-demand companies in every sector will eventually go belly
up. john, what's going to decide which of these on-demand companies will survive? we all expect on demand we like on demand we're the consumer driving this trend. what's going to be the next level of service and opportunity for them? >> well, i think it's driven by the consumers and where consumers are demanding it and spending on it and are getting these great outcomes. that's where the businesses are going to be successful. take a big company like costco. the consumer experience at costco, you're walking around this big store. it's in a remote area. today you can use boxed order the same things and it's delivered to your door. so that's the type of company growing incredibly fast. it has high repeat rates and it's very addictive. those are the kind of companies that we're looking at. >> all right folks, thank you very much. thank you very much for being with us and enlightening us a little bit on the on-demand
economy. interesting hour we've just had and that's it for the first hour. >> another interesting hour coming your way and for that we hand it over to brian and also melissa in the house today. >> that's right, we'll do our best. thank you very much. 2:00 on wall street 1:00 in sioux falls, south dakota. and, melissa, welcome into the house today. good to see you. >> interesting that i'm here but not standing next to you brian. i wonder why. the dow is up big adding 180 points. the nasdaq also higher. the s&p 500 just a whisper off of its intraday high. facebook leading the way there. oil back below $60 a barrel and there are new developments in the fatal amtrak crash in philadelphia. we'll get to those ahead this hour. we'll get to that in moments, but we begin with a market mystery. a self-described london-based private equity firm filed an offer to buy a vaupvon for nearly three times what that stock was trading at today. or did it? the firm calling itself ptg capital has more mystery around it than sherlock and heldolmes.
the part of the filing appears to plagiarize tpg's entry. it starts with tpg as if somebody simply forget to fix the letters. if that is not odd enough. we called both attorneys listed for ptg and both calls went to odd-sounding voice mails. perhaps to seal the day, we asked a london-based colleague to go by the london address in the rain no less and that building, 125 broad street, had never heard of ptg capital. we reached out to avon. it says it has not received any offer or other communication from such an entity and has not been able to confirm that such an entity even exists. wow. all right. let's bring in bob pisani. it is becoming clear this is a fake offer fake filing. the question is why would
someone want to do this with avon? >> well there's two possible motives motives. one would be profit and one vandalism. the stock is at a 20-year low. i have no idea what could have happened. but somebody could have argued they were trying to get out of a long position they had temporarily and maybe that would move the stock up. that would be easily detectable by authorities, so that's why i'm not convinced of that. this could be people messing around with the system overall. two things bother me by this. how did somebody put up a phony entry essentially into the database. everybody down here uses that and relies on that as a reliable source of information on filings. if somebody got into that it sort of implies the s.e.c. is not vetting that properly. i think everybody down here assumes that's what they were doing. yet it was obvious after 15 minutes there was a problem. there was typos all sorts of problems with it. the other thing is the nyse does not have power to halt trading
in a stock when something weird like this happens. all they can do is wait to the halts that halted the stock three separate times. i think it would be better if all exchanges had the power the way they used to do and halt stocks because they had order imbalances. meaning we've got way too much stock to buy or sell and here halting it until we get a clear understanding of what's going on. you saw with the crazy trading that instituted. that's a matter for the regulators, brian. >> yeah, and the stock is still up. it spiked when this news came out and then everybody realized this is probably a fake and not a very good one but the stock is now still higher. >> yeah. so what happens here is you get -- trading begets trading in this crazy world. so it doesn't really matter if the story is true or not. as long as you're on the right side of the trade. if you can still make money trading incrementally and it
works for you, fine. the old saying is it doesn't matter if it's right or wrong, as long as you're on the right side of the trade. >> remember a little company called emulex and this smacks of that. >> that was a long time ago. >> that was many hairs ago. let's bring in eamon. i know you've been calling and talking to the s.e.c. how does this happen? >> bob raises all the right questions here. i called the s.e.c. and they have no comment. they're declining to comment riot now. we expect we'll get some detailed information later. some security lawyers i've been talking to says what appears to have happened is somebody registered this entity ptg capital, with the s.e.c. as an actual s.e.c. registered company. and then filed this apparently bogus press release today. looking at the filings and just judging from nothing but the filings, we do know that the s.e.c. at least in theory is supposed to go and vet these companies and check that they're
real when they register. we see that this company had a cik number that identifies corporations and individuals who have filed disclosure with the s.e.c. this company did have one of those numbers. it also had an address as you mentioned before of 125 old broad street in london. that's kind of a cheeky reference. that is the old stock exchange building in london, england. >> but eamon that is a real office building it's a nice building owned by blackstone. we had a colleague -- thank you very much, by the way. he went there to check it out. i tweeted out a picture of all the occupants in the building and they were in alphabetical order and there was no ptg there. >> the other thing we see is it's listed the state of incorporation as being in the british indian ocean territory. i've got to admit, i had to goog whael that is. it turns out it's seven atoles in the indian ocean. if you look at a world map, it's to the right of africa and the
left of india. >> diego garcia? >> on an island in the indian ocean is where this thing is registered. that's what we know from looking at the filings here but obviously a whole lot of questions, including this date of update listed in the filings. according to the s.e.c. document i'm looking at the most recent update to this filing was april 21st of 2015. that means somebody has been in there relatively recently within the past month or so changing this documentation. who that was, how this happened all of those are a big mystery. >> we've got to go okay okay but melissa, john, i know you're waiting to chime in. but can anybody please tell me why -- i'm going to register javers capital group and it's at 123 candyland lane and the phone number is 865-309-jeny. i want to see if the s.e.c. will verify that i'm at that address and that's my phone number. >> you should do that after you get off the air and see what
happens. >> or not. eamon, thank you. >> no we should. we should file something and see how easy sglits can't refile a mortgage without the bank going in and looking -- what's your child's social security number. did your child make any money from a lemonade stand? apparently you can file an investment advisory form with the s.e.c. online. >> all good questions, thanks, eamon. as we mentioned, john najarian is here with us. did you notice anything in avon. >> next to nothing. it traded a few thousand calls, almost double the number of puts versus calls and since that halt has been relieved, it's traded 40 or 50,000 options. so that's a lot of volume. but all of that is after and as bob pisani said, mel, trading begets trading. people are in there trading this thing not based on ptg taking
avon out, but rather just because there's some blood in the water and the stock is squeezing some shorts. that seems to be the main reason. >> it does smell like a short squeeze here. you noticed some actual unusual activity in u.p.s. >> yeah. this one i really liked and i jumped on it because there was strong unusual activity in the first 15 minutes of trading. it continued throughout the morning. right now it's traded, i believe, over 50000 calls as well. normal for u.p.s. is about 7800. so this would be the sort of footsteps or footprints, mel that you'd see if for instance, goldman, credit swiss, barclay's, whoever, was providing over-the-counter options to an activist so they could accumulate a large position. so these aren't the footprints are that actual activist but most likely somebody is trying to protect themselves against a trade they did over the counter. >> so amassing that position. >> it certainly smells like that. stock as well as option
accumulations are big. maybe somebody is about to file a 13-d. >> and you're in the trade? >> i'm in the trade and will probably be in for about a week. >> brian over to you. oil another big story at this hour not because of the price. oil is down slightly, by the way, back below 60. but because of saudi arabia. the ft out with a cover story today saying the saudis are, quote, claiming success over u.s. shale companies. in other words, what some suspected. the saudis are trying to drive down the price of oil purposefully to slam u.s. oil producers may be true. john, what do you make of this story? are the saudis pro claiming victory? if so, are they doing it a little too soon? >> it shows they are doing what a lot of us speculated about. yeah, they need to be careful what they wish for because the rig counting is down over 1,000 rigs, over 50% as we've talked about and yet oil production here in the u.s. actually
upticked last week. it's hovering still near our multi-decade highs and shows that they have been driven to a point of efficiency that none of us thought was quite possible with the shale producers. they are now making these wells in less time than they ever did before, getting more oil and gas out of them than ever before with less folks on the ground doing it. >> but could this end up being a game of chicken where nobody swerves out of the way? u.s. oil production is 9.3 million barrels a day. saudi arabia is 10.4 million barrels a day. the rigs are down but the production is up. this could literally be a sword fight where we stab each other and both go down. >> that's what i've been trying to say. even this $60 a barrel price is bringing in more activity where costs are probably at their lowest. so this is our point to our question, the saudis are way too early to declare victory here. >> okay. let's bring in leo mariani to talk about the possible impact.
more on some of these shale stocks. leo, are the apaches of the world, the names you cover are they going to be i hate to use the word defeated but permanently bruised from a stock price perspective by the saudis? >> yeah, that's a great question. i certainly believe it's impact from the reduction we've seen in oil prices over the last nine months here. there's no doubt that we've seen debt levels balloon up over the last several months as oil prices had made their way down. so certainly the balance sheets you know are modestly impaired compared to what they used to be at $90 to $100 oil. i don't view this as permanent damage in any way, shape or form. i believe you'll see these companies continue to grind out efficiency gains and be able to execute on their business plans to the extent we see oil prices modestly higher over the next year. >> why would we want to buy any of these stocks when saudi arabia clearly has now flexed its muscle kind of suggesting they might continue to. saudi arabia it sounds like
could drive the price of oil down any time it wants. that's a giant variable and headline risk to have hanging over your head if you're buying some of these names. >> there's certainly no doubt about that. opec certainly has the power to increase production if they decide to do that over the next several months here. to that extent if they were to make that choice then we would see likely just continued you know modest pressure on oil and probably not a lot of upside on oil which would bludgeon some of the rally that we've seen in the stocks to start the year. so that's one option they have. i personally don't think it's the best option because ultimately you're somewhat cutting off your nose to spite your face because they're heavily reliant on oil revenues. >> leo, thank you. good to see you again. >> thank you. let us set the table, so to speak, for the rest of the hour. up next, the big task of fixing america's broken infrastructure. plus some rare good news for flyers. and the real secret recipe to
one of the best-performing burger joint stocks at all. before the break, another check on stocks. another big day for the bulls. the dow is up to 18,244 a more than 1% gain. the nasdaq 1.25%. beautiful outside, beautiful on the market for everybody perhaps but avon. we're back right after this. ♪ building aircraft, the likes of which the world has never seen. this is what we do. ♪ that's the value of performance. northrop grumman.
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take a look at this. you're looking at video of another train derailment in pennsylvania. a freight train went off the rails outside of pittsburgh earlier today. thankfully the train cars were empty and no injuries were reported. this follows of course tuesday night's deadly amtrak train derailment near philadelphia. investigators are looking into why the passenger train was going dull the speed limit at the time of the crash. eight people have been confirmed dead in tuesday's crash. brian. let us stay on the topic of trains and infrastructure. every day about 1.5 billion people commute into new york city. nearly 200,000 of those come by train from new jersey. every day it grows more likely that one of the two train tunnels into manhattan may need to be closed potentially for years to make repairs on the 105-year-old tunnels. that is right. the only two train tunnels opened when william taft was president years before world war i began. tom wright is president of the
regional planning association. 90-year-old organization recently testifying in the senate before a committee. tom, without being alarmist here what would happen economically if one of those two tunnels were to close for a year or two? >> well, if we were to use one of those items for a year -- and last year the tunnels were flooded during superstorm sandy so this isn't a hypothetical question. amtrak said they'll need to take them out of service sometime over the next 10, 20 years. losing that would be a 75% reduction in capacity under the river. that's about 30,000 to 40000 people who suddenly lose their way to work every day and the northeast corridor has analyzed it would cost $100 million a day to the u.s. economy to lose the northeast corridor and the bulk the busiest part of that is under the hudson river. >> and you and i, by the way, we live in the same town. we've talked about this. i want to put this out there. you've scared the heck out of
me. what you've said is amtrak owns the right of way so if we lose one tunnel, all of us that are on new jersey transit, as i was this morning, which by the way tom, my train pulled into the wrong track and we had to back out at 6:00 this morning that was nice. >> yeah. >> everybody out there we would -- amtrak would keep their number of trains going in. new jersey transit's capability would get crushed. >> yeah. oh, if amtrak decided to keep using the tunnels the way they are and since they own them, they could then new jersey would be shut down. more likely they would go down to one train an hour and new jersey would see weekend service all week long. >> you think about the economic consequences to new york but also the economic consequences to new jersey if effectively 100,000 people suddenly have to start taking the bus or driving. we'd come to a complete standstill as we did after superstorm sandy. >> that's right. >> let's say that we do get approval to dig a new tunnel. if we put the shovel in the
ground today, when would it open? >> we'd be lucky if we had it open in less than ten years. >> ten years. >> ten years. that would be to get the planning the financing. if you could actually start digging today, maybe you could do it in five or six but you can't. you've got to put together a roughly $15 billion financing package. you've got to do engineering. you've got to figure out where it's going to go in new york. manhattan is a pretty complicated real estate. >> to summarize then, we have two 105-year-old tunnels badly in need of repair. no plan to build a new one, no money to build a new one and hundreds of thousands of people a day that rely on them to get to work, is that correct? >> the only thing i would say is amtrak has been working on plans and trying to build support for what they call the gateway project. i think that needs to move forward. a few weeks ago i did a little informal poll. i asked people whether they thought it was more likely we would build a new tunnel or have to lose one of the existing ones
for an extended period of time. 85% of the people at this event, 85% of the people who follow this on a daily basis said they believe we will lose a tunnel first. >> tom you and i might be putting our homes up for sale and moving to connecticut. >> don't do that, brian. >> good to see you. all right. up next, something you don't hear every day, praise for the airlines. we'll tell you the one thing they are doing that is making flying maybe slightly less of a hassle. indycar driver helio cast row -- castroneves gets very lucky and very upside down. at chase, we celebrate small businesses every day through programs like mission main street grants.
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washington, d.c. with some breaking news on the trade bill. >> the news brian, is that the senate is taking up that trade bill. it had been blocked by a democratic filibuster but per an agreement yesterday between republican leader mitch mcconnell and democrats in the senate that involved the reshuffling of some side measures involving currency, involving aid to africa involving trade adjustment assistance for displaced workers, the senate is now going to that trade bill and that is likely to pass the senate, although the debate is only now just beginning. it's going to spill over into next week, guys. >> all right, john harwood. john, thank you very much. meantime, here is something that you certainly don't hear often. the airlines are making something less of a hassle. i call you know whachlt phil lebeau is with us for that story. >> you may call that but that is not true. based on the latest report and this comes -- every year they survey hundreds of flights and
say how many of these flights have reward seats available that frequent flyers can then book. essentially you're getting a free flight so to speak, using your miles. they found this year a record high for them. 74% of the flights. why? one factor is that credit card competitors, you know who offer no blackout dates they're forcing the airlines to say, okay, we need to free up a few more seats. there's also the possibility that the airlines eventually may try for an ipo of their frequent flier programs. you want to fix the financials and make those far more attractive. which airlines do the best job in terms of having seats available? southwest was number one overall for a second year in a row. jetblue at 87% and alaska air had the biggest improvement among any airline in the survey up 21 points. all of this brings up the question how did they do it? well alaska said they had been freeing up seats on certain routes. take a look at shares on alaska the last year. we're comparing it with delta because the people who oversee this survey are bringing up the
question has alaska opened more reward seats in response to competition from delta. >> in seattle, alaska airlines has delta airlines breathing down its neck. and they are a giant competitor. i think alaska has reacted to this by becoming a better airline. part of the better includes better reward availability for their frequent flier program. >> by the way, i put that question to the head of marketing for reward travel at alaska last night and she said no, we're doing it because we realize it's good for the long-term results of the business. guys. >> phil, are there more seats but more restrictions in that? maybe the frequent flyers expire sooner? the points? >> are there more seats or more restrictions, i'm a little confused with your question. >> are they doing this, increasing the seats because they say you only have a certain amount of time to use these points? >> no, i don't think that that's the case. in fact when we talked about it, the number of restrictions, if you will, seemed to be about the
same. what has changed and what i think you're getting at is accrueing miles is based on how much you spend not how much you fly. that makes it much tougher for a number of people to get that status they're looking for. >> phil lebeau thank you. well, check out this mess in florida. a truck overturned spilling watermelons all over the place. the truck was going around a curve when it tipped over. this is the second time this week a watermelon truck has crashed, specifically, brian, in the state of florida. >> wow. >> what a waste. >> that is definitely a waste. let's go down to the oil pits where we find the final crude oil trades crossing for the day. jackie, i'm still thinking about giants slipping on those watermelons. >> i'm thinking about it too. those are some pretty interesting pictures, but that's right. we are watching crude oil prices under $60 a barrel. traders are trying to make sense of what's happening today and if this is really meaningful in terms of which direction we're going in. we'll talk all about it when "power lunch" comes back.
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summit has wrapped up. the white house saying it would welcome support from the gulf states for a nuclear state with iran as something that would contribute to regional security. an amtrak train caught fire in milwaukee this afternoon. a passenger said the train jolted absolutely and began to drift. he smelled smoke and became worried. crews told passengers to move towards the back of the train and then were told there was a slight engine fire. california's governor jerry brown, is proposing a record $115.3 billion budget that will send more money to public schools, set aside reserves and create a new state tax credit for the working poor. brown revised his january budget proposal upwards to reflect $6.7 billion in new revenue. an abc news anchor george stephanopolous has apologized for not notifying his bosses and viewers about two contributions totals $50,000 that he made to the clinton foundation. and that is your cnbc news
update at this hour. back to you, brian. oil falling back below $60 an hour. >> a lot of people are saying the fact we're under $60 a peril not that significant. this is profit taking because we moved so far so fast. they still see factors that could drive us up potentially, the first being geopolitical issues but also that very weak dollar. of course they're also thinking about the summer driving season that's coming up as well. that's an interesting point because they think we could hang out in the 60 to $65 dollar range as a result of that boost in demand but they think that prices could come down after that in the fall when that demand starts to fall off, so think about that. back to you. >> thanks jackie deangelis. biotech shares moving higher along with the entire market. cnbc pharma and biotech reporter meg terrell is with us. meg, let's talk about some of the big movers. it was a huge data dump
yesterday. you started seeing these moves in the after-hour session. >> 5,000 data sets came out ahead of this huge conference. we're seeing a new mover and that's clovis oncology. the stock has been climbing all day, about 13% now. it didn't rise after the data sets dropped last night. analysts are saying there wasn't a whole lot of new data that came out. it's develop drugs for lung cancer and ovarian cancer but the ceo had a call hosted by jpmorgan today. i'm hearing that he was pretty optimistic on the call, as he has been about these programs so maybe that's contributing into optimism. there's a huge short interest in the stock and could be some short covering today that's driving up clovis. you're seeing some smaller moves to the upside we're calling this the 1% club because they're all moving more than 1%. we'll start with amgen getting some positive data because a
potential competitor to its drug disappointed by some analysts' measures. cellgene moving ahead because of its gigantic drug. also looking at astra zeneca promising data there so that moving up and pfizer as well also moving about 1% to the upside. finally, there is a big decliner today. we've talked about this one, puma biotech with its breast cancer drug missing some expectations. this one had been a big takeover target. appear lists saying that its prospects may bow dampened for the near term but some of those investors may bow looking at clovis as the next takeover target. time for street talk the analysts' recommendations on the stocks that you need to talk about. we're doing this like side to side here. >> i know it's weird. >> you can hit me now. >> i know. i've been waiting for this for
so long. >> stock number one. car carmax at a buy. they believe it is the opportunity to double its footprint. i think that would be a tire print among increased supply of recent model used cars. >> now you can see me roll moi eyes when you make bad jokes. >> carmax is number one in the u.s. market. it has 1.4% share because this market is so fragmentinged. i didn't know that. next jb hunt the price target at $100. that's pretty much in line with what the s&p 500 had. >> they haven't got the benefit from cheap gas as well. diesel prices never came down that much. diesel used to have a discount to refine gasoline. it's been at a significant premium for a while. stock number three urban outfitters. upgrading the stock to an
outperform from a market perform. they cite a reasonable valuation and attractive entry point for the specialty retailer. they believe the whole sector will pick up after some of the headwinds of the first quarter, such as you guessed it, weather. >> the old excuse there. look at that chart, brian, you can see the stock hitting its highs at $47 at the ending of march. that's when there were questions about the valuation. baron had a piece saying the stock is great butover overvalued. stock number four here, upgrading from a buy to a hold. the recent comps at chili's have rebounded after weather. the price target raised 2.65. >> i hate weather also. i'll defend restaurants. they're the only ones that really lose business. if you need a pair of jeans, you'll buy them. >> and no pent-up demand for restaurants. it's not like i'm going three
times in a row. >> tuesday you're snowed in there's no taco for you. no taco for you, melissa. stock five. today's under the radar 2345i78name. it's not some small cap but it doesn't get a lot of attention. thus under the radar. spectra energy. starting coverage with a buy. they say it's well positioned to benefit from the energy infrastructure boom. about 17% from here. >> this is net gas storage and pipelines reported earnings missed analysts' estimates but the stock is pretty decent. >> are you sure? >> your big frame is blocking the chart. but since march -- >> it's all muscle. >> sure. >> what? street talk down for a thursday. it is time for trading nation our daily dose of advice, recommendations on trader topics. today let's talk about why nearly everybody has been wrong about the euro. stacy gilbert.
yens, who wasn't negative on the euro? suddenly now we said we were negative but didn't really mean negative, now we're positive on the euro. why has the euro turned around like this? >> i think there's two big things. number one the u.s. data has been pretty soft. if you go back two months we were talking about is the fed going in june. now the debate is will the fed be able to go this year, so a huge shift in sentiment in terms of what the fed will be able to do. that's number one. number two, bond markets in europe have changed direction and become incredibly volatile as well. one of the reasons why the euro is going down so much over the last 12 months was there was a steady flow of money coming out of eurozone bonds into u.s. bonds. and now the market has become so volatile that flow is stopping. those are two reasons that have really changed the direction of the euro here for the last two months. >> you know, stacy looking at the options side of things, have we really seen sentiment begin
to shift? >> brian, we have. but here's what i would say in terms of the shift that we have seen. what we've seen in the currency options is we've seen sellers of calls. these are likely investors that are closing out of some of their bullish dollar positions they put on earlier this year. we are not seeing investors take on a bearish dollar position and that's important to keep in mind. if we move to the etfs, the power shares index bullish fund we'll severe sellers of calls and puts. that's suggesting the dollar could be less volatile than what we've seen recently. it's not suggesting that the euro which is a huge chunk of that index is going to continue to rally. here's the thing that i think is most important. the currency -- one of the points i would highlight over the last couple of weeks they have been a lot more quiet as the dollar weakened. this week we've seen inflows and buyers across the board so products like hedg hedged
european funneled products like hewd and products like dbf all inflows, all buyers this week. the important point is those aren't products you buy when you think the dollar is going to decline. >> all good points jens stacey, thank you very much. a reminder for more trading nation head to our website tradingnation.cnbc.com. shares of jack in the box may be down today but they are still up more than 60% over the past year and the reason may not have much to do with burgers at all. plus scary video from indianapolis 500 practice. heel row cast rowe -- >> i'm aaron link and i get paid for this. what it takes to be a lead development engineer for general motors coming up on "power lunch." and now the latest from tradingnation.cnbc.com and a word from our sponsor.
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. we've got a rally on our hands. across the board the major indices all higher the nasdaq leading the way here. we're just about three days off of our intraday highs on the nasdaq. some big-name tech stops helping to lead this rally. facebook. jpmorgan saying there's positive april data. apple, microsoft, all up more than 2% right now. brian. some scary video from indianapolis 500 qualifying yesterday. that is helio cast row nevadaes. he spins hits the wall backward. the car loses downforce, gets airborne flips over. he was not hurt thankfully he walked away from that crash, but those cars doing 220, 230 miles an hour. that is an interesting segue to our regular weekly feature called "i get paid for this." we profile people with really
cool jobs. today meet a man whose job takes him from 0 to 60. >> i'm aaron link and i get paid to be a lead development engineer for general motors. my favorite part of the job is getting hands-on with the vehicles and being able to touch them drive them, experience them, feel how the parts go together. we end up really the most important part of the job is driving the cars as much as possible. it's a lot of art with some science. what we specifically test for are things like the ride character of the vehicle, how soft or how hard it is the handling, how well it steers, the sound of the exhaust, the comfort of the seats. i like to view the job as being able to represent the customer. we do have all sorts of equipment and data acquisition
pieces of computer and laptops in the cars that tell us data to correlate or go along with what we're feeling. we have a team of about 20 people that are based where i'm based at the milford proving ground that are the hands-on in the garage, development engineers. what i love about this job is every day is different. i come into the office and things change by the minute. >> all right now he says one of his career highlights was test driving the famous nurnburg ring in germany. he's excited for people to experience the gen 6 camaro. by the way, that newest camaro will be unveiled exclusively by gm's president right here on "power lunch" tomorrow. tomorrow on "squawk box" they're testing the new camaro at 7:30 a.m. eastern time on "squawk box" so big camaro gm day
tomorrow. very cool stuff. all right. jack in the box up bigizxç over the past year. and it may not be that the food is the reason. we're going to explain what is in the secret sauce of jack in the box. plus an alligator at a florida high school. that's pretty much all you need. alligator, florida high school. we'll show it to you coming up. yourself? your family? our financial advisors are free to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird.
check out but wheat, silent move up 6.8%, bringian. >> los angeles getting closer to a is a 15 buck an hour minimum wage. a city council committee approved it last night. the entire council votes on it next week. then an actual law would have to be written. if all that happens the new minimum wage would be phased in over the next five years. >> one restaurant not affected by the minimum wage hikes, jack in the box with higher expectations. they've outperformed competitors including mcdonald's as well as sonic. let's bring in bob derington of wonderlick securities. one might think it is kudo ba, the munchy meal menu, but you think the secret sauce is
something else. >> there's a combination of factors that have really contributed to the company's strong earnings growth and basically i think you're referring to that rental revenue stream for the company which adds an underlying level of cash flow to the company that's grown to almost 30% of its cash flow at this point. so that really enables them to not only keep their earnings relatively stable and growing as well as great cash flow to be able to return to investors either through their increased dividend or share repurchase program. >> how does this work? is it they own the land on which the franchises exist and the franchises pay them a revenue stream? >> jack's is a little bit different than a typical say mcdonald's. there's is -- i call it an asset-like program in that they control the real estate. they don't own it. so they don't have that much capital involved or tied up in that. however, they essentially charge their franchisees 9% of their sales. their underlying cost is roughly
6% so, they eventually get a spread on that. and the good news is as franchise comps increase, so too, does their revenue but their cost factor levers down as a percentage. >> is there a risk, though they have leases the lease prices get jack up and they're not able to pass it on to franchisees? >> you know, there's probably always risk, but i shouldn't say i'll guarantee but my suspicion is that the company understands and controls that lease and in their sale -- their refranchising of those restaurants, to the franchisees, any escalation clauses are covered. >> and you like jack. >> we do. especially today. it's providing us an opportunity. >> bob derington always good to see you. take a look at cal main foods, a huge gainer in the past month. morgan has more on the beef winners and luers. >> reporter: that's right.
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producer and they're getting a boost from something other chicken farmers are terrified over. morgan brennan is in iowa looking at all the stocks being impacted at the outbreak of bird flu. morgan? >> reporter: hey, brian. you're exactly right. while across the midwest egg producers are being devastated by bird flu, cal-maine's operations are being located largely in the south, they've been largely unaffected by this outbreak at least for now. you see about 8% of the u.s. layer hen population has been pulled offline and analysts say that cal-maine stands to benefit as egg prices rise. that's the reason you're seeing that stock trade at an all-time high. on the flip side, another name to check out is post holdings. that stock is down about 6% over the past month, and the reason there, post owns michael foods, which says about 20% of its egg supply has been impacted by bird flu. another name to check out, hormel foods. that stock is down about 1.5% over the past month, and that's
because it's turkey segment has also experienced a supply crunch, the reason you're seeing temporary layoffs at one of its plants. three companies that have been largely unaffected by bird flu but that you need to keep an eye on are tyson foods pilgrim's pride and sanderson farms. these companies their business is largely broiler chickens which up until now have been largely unaffected by bird flu. but as the year unfolds and this virus continues to spread to different parts of the country those names could be impacted and the other thing you'll want to keep an eye on if that happens is grain futures, particularly soy, since more dead birds would mean less demand for that commodity. >> morgan brennan thank you very much. for more on the winners and losers check out cnbc pro. you can find it at powerlunchcnbc.com powerlunchcnbc.com. i saw the sign, small animals. was that a doggie door? >> where do the big animals go? very important questions.
one-year equaling about $1.14 so what are the top investors telling us about the currency trade? sara eisen. >> stick with the dollar. that's the result of our survey where we polled wall street strategists and they're staying bullish even though it's been a tough few weeks for the bulls after a massive run-up that took the euro all the way down to $1.04. the dollar has now reversed since april, plunging to a four-month low just today surging past $1.14 euro. but the bulls are hanging in. you can see the strategists we polled expect $1.06 by june, $1.02 by the end of the year. pretty good news if you're holing out for that european vacation this year. they also see a strong dollar against the japanese yen on average. they expect that pair to run up to $1.24 by the end of the year even stronger next year. and get this more than 70% of those we surveyed say the outlook for emerging markets currencies is negative.
those currencies against the dollar. this current correction is thought to be just a bump in the road after an extremely overbought enthusiastic historic rally for the dollar. long term, guys, what we found in the survey is it is a strong dollar world driven by higher interest rates from the federal reserve. it just might not be a straight line up. >> all right. sara eisen thanks for that. that's exactly what trading nation said. >> yeah. although everybody was so on one side of the trade, it makes you realize, america, if everybody says one thing generally you're better off doing the other thing. >> go to the oh side of the boat. tonight on "fast money," we have an activist involved in children's place, which reports earnings as well, and also president obama is scheduled to give a speech or address the nation tonight. he's meeting with arab allies. this could have an impact on the oil trade in tomorrow's sessions. we'll trade those comments tonight. >> the dow is up 183 points right now, a big day for the bulls. plenty to talk about. >> got a rally on our hands. >> good having you in house.
>> good to be here. >> all right. you're back tomorrow. fantastic. >> i am. >> see you then. "the closing bell" starting right now. hi and welcome to "the closing bell," everybody. i'm kel vily evans at the new york stock exchange. >> and i'm bill griffeth. stocks rallying right now and that happened from the get-go this morning. the s&p is trying to close at its first record since back in april, april the 24th. the number to keep an eye on is on the left there, 2,117 and change. you can see we are a couple points above that right now at 2,119. the dow still has a ways to go. >> making a run at its first record close since march 2nd of this year. the number to pass 18,288, and at this point we are about 46 points shy of that level despite