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tv   Power Lunch  CNBC  May 27, 2015 1:00pm-3:01pm EDT

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people know you for two sectors. three really. financials and health care and chips. are chips a place to be? >> i think they are. very cheap especially the suppliers that have any part of the chain. take a look at the chains. >> good stuff, guys. thank you for watching as well. power begins now. >> hi everybody. welcome to power lunch. one major prescription provider wants to change the way you pay for prescription cancer-fighting drugs. >> they want to pay drug companies based on cancer fighting performance. upsides business downsides and whether this is a model for the future. exposed. irs returns and how do they get inside secured servers and how to tell if you are at risk. >> the dollars move and that may make it very, very attractive.
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the express scripts and many insurers and employers and the plan to put cancer-fighting medicines in the pay for performance category. shares are up 27% over the past year. here to explain how this would work and the impact it will have on doctors, patients and maybe the stock. >> as you mentioned it sometimes referred to as pay for performance. the medicine should be reimbursed based on how well they work. i spoke about the plan and it has two parts. how well drugs have shown to work in different cancers. steve miller cites a drug as an example approved for lung cancer and pancreatic cancer. it is proven to extend lives by months for lung cancer and only by a couple of weeks for pancreatic pancreatic. the new plan would reimburse more for the first. the second part looks at how
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well they work for individual patients. they require more testing up front and monitoring patients as they receive treatment. they said they have been listed and cancer drugs. steven pearson for the clinical and economic review. millions of people have signed on. they have been the focus for attention where they can be priced at more than $10,000 a month for patients. back over to you. >> what particular companies do you think might be affected by this? outside of what you are reporting on. >> of course they could be one if they have this unique way of going after these prices. of course in cancer we are targeting the same underlying causes of cancer. it's also cited drugs from merck and bristol-myers. they could be 1 and any company working in cancer drugs could be
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affected by this. >> a good developing story. a news alert, five-year notes are up for action. tracking the action at the cme. yesterday's two-year note auction. you gave it a c plus. what's the great today? >> a b minus and we moved up about a half grade. b minus is the way it sits. 35 billion. five-year notes. that was the issue market in terms of pricing on how far back they had to go in this action. # that's a little light from 2.58 average. 58.5 and we give it a b minus and tomorrow will be seven years, 29 billion and the longer maturity will be the better of
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the strategy of investors and auction giving us clues on the day to day trade. >> bring up the board and see what's going on the benchmark. late yesterday, today we are sitting at it and we have got that today. we can show you. anyway, here it comes. the 10-year at 2.15. checking what's happening on the stock market. the dow and the s&p are moving higher. rebound going higher although not quite perhaps getting back all of what we lost yesterday. the dow is up by 108 points. we will keep on watching those for you. you have for example toll brothers and luxury home builder moving to the downside and earnings were in line with
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expectations and revenue fell a bit short. work day is down more than 10% and a weak forecast for future billings with that stock. it makes human resources and palo alto networks and the report reporting earnings after the bell. we had a problem with the boards right now. if you are listening on the radio, it makes no difference. >> you can't see it. you took us through it easily. thieves able to hack in and get information including tax returns. more than 100,000 taxpayers live in washington. tell us wa we know about who may have done this and whether the leak has been plugged or not. >> the irs is blaming cyber thieves saying it was likely criminal gangs that got into the website as posing with taxpayers. what is fascinating is they say these thieves already had a tremendous amount of information about the taxpayers before they came to the irs's website.
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they said one of the screens here for example in asking questions to prove you are who you say you are was what was your high school team mascot? the thieves knew that from scouring social media, facebook and the like according to the irs. what we are seeing is accumulation of the hacks in the past. all the data that has been stolen from the websites around the world. accessible on the black market who are then using it to get into other things. about 100,000 taxpayers impacted and they tried to get into the accounts and the irs said it will notify all of those people and provide credit monitoring for the people who have been affected. >> soccer scandal as swiss authorities arrested several from fifa. the plan is to have them face major corruption charges.
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they are accused of wide spread corruption over 20 years, including taking bribes for awarding the hosting rights and marking and broadcast deals to world cup and other major international soccer events. they outlined the charges. >> our investigation revealed what should have been an expression of international sportsmanship was used as a vehicle was lined with bribes totalling $110 million. nearly a 30 of the legitimate costs of the rights to the tournaments involved. >> now switzerland opened their own bribery investigation into the awarding of the 2018 and 2022 world cups. >> the historic flooding in texas is at the worst. houston at the stand stillment almost a foot of rain fell in a
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few hours. 19 have been kill and 14 more still missing. >> we are learning about a bug that can shut down your phone. the head of cbs is about to join us here on the show. that stock is up about 11% this year and there big changes coming to the industry. we will get his take on how they will handle it. that's coming up next. ts about seaworld we'd like you to know. we don't collect killer whales from the wild. and haven't for 35 years. with the hightest standard of animal care in the world, our whales are healthy. they're thriving. i wouldn't work here if they weren't. and government research shows they live just as long as whales in the wild. caring for these whales, we have a great responsibility to get that right. and we take it very seriously. because we love them. and we know you love them too.
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>> welcome back to power lunch. amazon hiring more than 6,000 workers at the 15 fulfillment centers. that stock is up about 1%. novartis on a ro mottic pill that is swallowed through the drugs directly into your intestinal walls. that stock is up about 14% in a year and up just today. hormel foods buying applegate farms for $775 million. the largest for the company. trying to get more into organic and healthy foods. they are up 3.5%. >> taking place in california. julia? >> thanks so much tyler. ceo of cvs, thank you for
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joining us. you mentioned you have been meeting with eddie q and will be participating in an apple service to launch this. >> it's an early discussion, but apple tv is talking to many of the broadcasters and cable companies that are making after offering and when apple calls, you always listen. everything they have done has been interesting. >> what will your role look like? what will app ep tv look like and how will they compete with the rest of your offerings. >> we are in an era where the bundles are changing. sling offered a different service. they offered a different service that may not carry 200. apple is talking about something similar in that it will be less
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than that lower price and a different offering that is digital. it is online and we think in that universe we will do better in a 15 to 17-channel universe. they will pay you more than traditional? that sounds good for css. like verizon is offering and they have been upset about. suing verizon about it. you haven't come out against them. >> once again, and espn is suing verizon for putting them not on the right tier. in the smaller offering cvs has been. conversations that we had with verizon would give us more money. we are not objecting to it. >> you are also going outside the bundle with them and working
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on a show time direct to consumer service. what can you tell us about both of those? >> a lot of people watch and get show time through traditional methods. currently a little bit over 70% of the people are watching our shows in their time period. the rest online or dvrs. they offer them an opportunity to get live streaming cvs and catch up episodes. we have an over the top new service. show time will be offering an over the top service. similar to what hbo did. you can go through and get show time without having to buy a lot of other things.
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>> the launch was good and they did it in a dramatic way. from what i have been able to get they have done well and offering their service. they have a lot of subscribers with it. they launched it together which is the number one drama over there. that was very smart. show time is terrific and it's a new way to make money. >> tyler? >> i want to talk about the transaction from time-warner and charter yesterday and specifically about the sums of money that the ceo of time-warner cable stands to make from selling his company. something like $97 million if he leaves the company over the next couple of years. that seems like a lot of money to sell a franchise. i want to ask you how you feel about that and you had a wonderful run, cvs had a wonderful run. you are handsomely compensated on the order of $57 million last
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year. making $157 million last year. i would like to get your insights on how you feel about a ceo profiting as greatly as mr. marcus stands to from selling his company. second and more broadly about where executive pay stands in the industry. >> i don't think it's appropriate for me to talk about rob marcus's compensation on this deal. everybody's contract is different. different things are used to entice the ceo including the change of control and if he is successful in selling the company. once again in terms of my compensation, a lot of it is based on how well the company has done. in terms of the charter deal everybody was looking at the time-warner comcast deal and seeing what would happen there and once that fell apart, i
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think nobody was surprised that charter stepped in and made the offer and made the deal they did quickly. if you remember they actually made an offer before comcast came in and i think they will have less regulatory challenges that comcast did for a number of reasons. i don't think anybody was surprised that the charter deal happened and once again john malone has proven that he is the smartest man in cable. >> without the consolidation and the distribution do you think we need to see consolidation and any plan for them? >> people have asked that and they said at&t directioned it together and time-warner cable is getting together with somebody. do you need to consolidate to have more power against them? i don't feel we do. they are strong and we have great assets on ourselves and i don't think there is anything we need to do or frankly any of the other major media companies need to deal with the companies.
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>> tyler? >> a question about the comments you made inside the code conference. you don't have any interest in buying cvs. once he is no longer involved in it, why would you say that? they have done so much to build. >> cvs is a public company. i don't have the resources. i'm well compensated. cvs is a great company. i love the company and i'm happy where we are in the utmost respect. >> there will be plenty of financeurs would love to see you do exactly that. you can get the money.
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>> well thank you. at the moment we are proceeding to run the company and everything is going fine. >> just a quick final question about periscope. show time is one of the distributors. periscope enabled a lot of piracy and ceo of twitter celebrated that. he is the real winner of the fight. >> he celebrated and wrote me a letter. i was not happy with what happened with periscope. there was pirating of the signal. they don't live on the idea of stealing other people's content and dick wrote me a note and we will get together and i think their idea is to share content, but not necessarily conat the present time that people had to pay for. >> you had a lot of sports deals and you don't do the soccer deals, but the fifa scandal.
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what do you think? >> i followed what i heard on the air. i found it interesting that it was the united states which has not been one of the major players in world cup soccer that it came out of the u.s. we have been hearing there was difficulties with fifa and how was being run and i guess some of them are coming to fruition. >> i wanted to ask as a follow-up to the fifa question, this man is back and would you be interested at all in bidding for the broadcast rights for fifa? >> we have the nfl and the basketball tournament. we have sec football. they are more interested this soccer than we are. >> that's a definite no? >> well that's a probable no. i never say definitely no to anything. >> do you think the news would
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make you rethink any thinking you may have had about bidding for the broadcast rights? >> mandy, truth be told i have no idea what the rights sell for. i know they are quite expensive. but i'm happy with the covers on that. years ago. 94 do i think we would. >> thank you so much. >> thank you. >> mandy, back over to you. >> thank you. >> legendary investor bill gross is out with the new outlook. he will be joining us live on power lunch and ask him how his short of a lifetime is working out. #
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>> welcome back to power lunch. jumping almost 7% after morgan stanley upgraded two notches to an overweight rating. analysts say the sharp decline created a buying opportunity about the future of the wire line telephone business model. despite the upgrade, the price was cut to $6 a share from a prior $7. >> thank you very much. if you got whiplash and today we were down and tomorrow back up.
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the s&p and the nasdaq are moving to 8/10 of 1%. best performing sectors yesterday. energy has been one of the biggest laggards however. we will keep on watching and the leadership board and the lager board changes. over to you. >> we are learning this hour of a new threat to your phone. it is a text message that can shut you down. shut off your phone in an instant. this is picking up a lot of steam online. that is next. a tale of two luxury retailers today. tiffany way up. michael kors way down. we will tell you what went right and wrong. wait until you hear how many bee this is guy is covered with. that makes me ill. when power lunch continues. ♪ ♪ ♪
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at chase, we celebrate small businesses every day through programs like mission main street grants. last years' grant recipients are achieving amazing things. carving a name for myself and creating local jobs. creating more programs for these little bookworms. bringing a taste of louisiana to the world. at chase, we're proud to support our grant recipients and small businesses like yours. so you can take the next big step. over 20 million kids everyday in our country lack access to healthy food. for the first time american kids are slated to live a shorter life span than their parents. it's a problem that we can turn around and change. revolution foods is a company we started to provide access to healthy affordable, kid-inspired chef-crafted food. we looked at what are the aspects of food that will help set up kids for success? making sure foods are made with high quality ingredients and prepared fresh everyday. our collaboration with citi has helped us really accelerate the expansion
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on any device. just sign into my account to pay bills manage service appointments and find answers to your questions. you can even check your connection status on your phone. now it's easier than ever to manage your account. get started at hi everybody. i'm sue herera. the vatican said last week's
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historic referendum in ireland that legalizes same-sex marriages defeat the humanity. he said he is deeply saddened by the results. katherine catholic doctrine considers homosexuality a sin. >> 69-year-old david kugel was sentenced to home detention and community service. hundreds of thousands of subway riders victimized by a massive theft of copper cable from the a train in queens. the cable was presumably stolen to be sold as scrap. delays will persist throughout the day. it's a mess. indy 500 winner juan pablo montoya ringing the opening bell this morning. it was the second indy win for the race driver who returned from the nascar circuit. his car was outside the new york
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stock exchange so everybody could take a look at it. that's your cnbc news update at this hour. >> take a look at it and i'm sure they were not allowed to try to ride it. >> it was inside the pen. >> go rest that voice of yours. let's look at gold prices that are closing to the downside at 1185. we don't seem to be making much headway today. platinum and silver moving lower. >> hi, rick. >> hi tyler, we had a five-year note auction. if you look at the interday of five, we moved a little lower in yields. a little buying and nothing big. you see it more pronounced on the 10-year chart and doing a sideways move today, hovering close to unchanged on the year at least for times for last
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year. the big chart has been a big chart for most of the year if you have been watching the exchanges and we broke out of that range of valor yen. it's flying close to 125. should have closed at the stratus fearic levels. a dollar would close at the best levels since 2002. if you look at the 24-hour chart, there has been head lifrs about greece. when it comes to ecb officials and talking about greece it's a kitchen filled with cooks. mandy, back to you. >> too many cooks spoil the broth. yesterday's lossy with a dow up more than 100 points. down one day and up the next. only up about 2% for the year so far. how do you make money? joining jason lily with rocklin group.
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next question, zackary. it's a sideways market. how do you make money in a sideways market? >> one of the more interesting things happening aside from the fact that the markets are not going nowhere fast is that active managers have been outperforming passive index vehicles for the first time in a long time. i probably should have the numbers, but it has been many years. in a sideways market like this there companies that are doing better than other companies. you flashed up about five minutes ago. michael kors versus tiffany's. both in the same space, but having radically divergent performance. if had been in and not the other, you would have been done well. >> do you have any brilliant ideas or names? >> not at this particular discussion other than the pact that you have a lot of divergence within sectors that means it's totally possible to make money in a sideways market.
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as people did throughout the 70s by picking names that are doing better than other names. this is a stock picker's market. you agree with that number one, if you don't, pick stocks for me. what sectors or names stand out? >> i agree with that. >> any time they increase or go down, it's good news and that has been the case in 2015. interestingly, some cyclicals. energy materials and industrials sold off more than others. i suspect that it was supportive and looking forward to the numbers in early june if we get an up tick in that they could have a nice bounce. if we think about energy or
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slumber j, that would be an interesting name to look at on the materials side. ecolab that has a healthy exposure to the eurozone. interesting name to look at on the material side. then in industrials, union pacific which i know year over year,ular ularcar loads and rail loads have been down and if that turns around and the ism numbers are better, you can see a nice bounce. >> you are watching the ism numbers and you can be clever or find someone who is clever to pick it for you or would you move offshore if you want better bang for your buck? >> in general and this is also a view we have being in equities in general is probably a better bet for this year than being in bonds, assuming you don't feel the world is about to fall apart. if the world is about to fall
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apart, it's better to be a nothing than an anything. there areas that are questionable. i give the nod about picking something like slumber j a best of breed name. it may not have another leg down as dramatic from november to april. it's not going to be a place where you do well unless you find a high-paying name whose dividend you believe will not be cut. the same with banks. areas within equities that are where one should be overweight relative to bonds. and then a lot of opportunities outside of that. >> thanks for the ideas there. i think ty is supposed to be saying that, but go to power lunch. that's at >> sorry, didn't mean to step on
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your toes. >> i stepped on yours yesterday. it's okay. >> we just mentioned them. michael kors the lowest since january 2013. meantime, other side of the coin,ative 18 with a big earnings beat. the latest quarter, 11 cents above estimates. you also have shoe retailer dsw, one of my personal favorites. the company said the latest quarter was helped by strong sales off athletic footwear. something i'm not buying. sticking with retail is more retailers are searching for big returns and an area they are trying to get into. it's a big growing trend and big bucks for them too. >> i have been for a long time. i have gotten a lot of company at the stores. it's hard to know for sure thru there seems to be a shift in buying preferences, particularly
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among those sought after millennials leaving the bushes for the cities. i'm not talking about online but off price shopping at outlets and stores like ross and t.j. maxx stores. they are leading to enviable sales it turns out. in just manhattan, tjx has gone from to five plus four marshalls stores and a home goods. higher end department stores have seen it too. they have been going as fast as possible. bloomingdales had their first urban outlet and it will be the 14th growing at a much faster clip than the full line full price stores. nordstrom opened years before and plans to double the rack stores to 300 by the year 2020. sacks too has doubled the footprint they had several years to go. on the mid-tier department
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stores, they are waiting into the off price war. macy's will open the first four back stage. kohl's in new jersey as a test. macy's doesn't think it will cannibalize the full line store sales, but that remains to be seen. a big question is, is there room for all the players and enough share to go around? they are banking on it by building out the stores. >> people say why should i pay full retail when i have so many options? you are an expert on shopping. a lot of people feel that the merchandise is like oversupply. maybe last season's stuff that didn't sell. that's not the case right? >> so it used to be. when outlets started, it was where the clearance went and things that didn't sell well or they had oversupply. a lot of retailers are having merchandise created for the store which is why often if you buy something from a j crew outlet, you can't take it back to the store. that sweater was made for the
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outlet. >> is it lower quality? >> often it is. less flair if there is sequins. they will be lower on the outlet version. that's how they can afford to sell it to you at a lower price. some people know it and don't care and others are surprised to hear that. it's important to bring up. >> it is important. change thanks for clarifying. >> i tried to return one of my sequin sweaters and it didn't go over well. one of the areas of the market and the single text that can crash your iphone and the new world record that has everyone a buzz. power lunch will be right back. i'm only in my 60's. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible
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weather is expected. >> part of the problem with texas is all of the rain that has come down this month so far since may 1st there has been so much flooding in these areas. in fact a foot to a foot and a half in these pink colors and closer to two feet where you see spots of white. the ground is saturated and can't take much more rain in it. here's an idea of in hours, how much rain it will take to cause some flash flooding. some cases just two inches of rain. if that happens in three hours, you can get an inch in an hour. more heavy rain and has the potential of heavy rain. some areas could pick up in pockets, three to five inches of
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rain. back to you. >> you know the get for setting monetary nations. they are weighing in on the policy in your home. steve liesman is here. what does it mean? >> this is a massive survey that the fed conducted. 6,000 individuals to try to see how the recovery was filtering down to the household level. people are people toing better off than they were before. there is massive stresses out of it. let's look at the top line survey. those who say their economic well being, they are better off, up almost points last year between the 2013 and 2014 survey. up to nearly 40%. those worse off down by five points. there big financial stresses. here are some of them we chronicled. 49% of part-time workers want to be working more hours. 24% say they are just getting by
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financially. 81% of renters, this is important for the real estate market. they would like to own a home but they don't have access to credit or a down payment. 31% said they went without medical care. i want to zoom in on that and take a look at what they are avoiding. 25%. they are not seeking dental care. 50% said they are not going to a doctor and on down. 6% said they are avoiding mental health care for financial reasons. >> the number of people applying for mortgages edged higher. one area is producing red hot returns. we have more on that. hi die. >> house it is risky. this house took six months to
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sell, butt risk is brick bringing in big rewards. they made a profit in q1 the highest since 2011 when they started watching the numbers. how do you do it? it costs more up front, but the buyers will pay more. for the flippers like they get, the game is getting tougher with tight fly in the market. 4% of home sales were the lowest in years. >> we look at the market and who the potential buyers are. what they are wanting in a house. that helps on the back end. she ended up getting lots of offers. where else are they getting top dollar? in tampa, pittsburgh and
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memphis. chicago, boston seattle, and again, right here in washington, d.c. one note on the houston market and one real estate agent saying that investors and flippers are on the front for those where the owners just want out and don't want to deal with the rehab process. they see a lot of flips in the near future. how to get the best on your flips? we have five important tips on line. realty check. >> thank you very much. >> a beekeeper broke the record for the heaviest weight of bees on a human body. have you wondered how much a million bees weigh? i haven't, but they weigh more than 240 pounds. the guy needed a cigarette. they coated the man's in honey and added a layer of queen bays followed a a swarm of worker bees. only his mouth and nose remained
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uncovered and that of course was to allow the man to continue to breathe. look at that. my goodness. that's an interesting pastime. up next the single text that can crash your iphone and we are mining for profits in the mold mine. stick with us. blap
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it's part adrenaline and part adventure. it's part geek and part chic. it's part relaxation and part exhilaration. it's part sports car and part suv. and the best part? the 2015 gla. it's 100% mercedes-benz.
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gentlemen, gentlemen, gentlemen. it's good to have here. if you are one of the millions with an iphone. this text allows them to crash your phone with a single text. what did i say? eli? my son is so into eli manning, i just head eli. you sunday a text message to his phone to see whether it would disable it. >> this is everywhere on the internet right now. people are doing those with iphone. they are sending a string of odd characters in an i message to their friend and it causes their friend's phone. it's like a string of unique characters and a couple of english letters in there. what it does is it causes their
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friend's phone to shut down and restart. >> so he did this to you? speaking of an odd character. >> look what he is trying to do and it worked. as soon as the message was received, the phone caught cutoff. as soon as the message is sent you will see a phone on the right shuts off. >> lock at that. >> it comes back on. we don't see any evidence of damage to the phone. it also happened to affect the apple watch as well. >> you have a watch and it turned it off? look at that. >> it worked as well. >> it turned that off. because the two were paired. >> absolutely. apple told us they are aware of the issue and they are going to issue an update in future software releases to fix the glitch. >> we have talked to apple. that's what they say. they are going to fix this glitch. was this something that they knew about or do we know that or
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was this something that someone blundered upon or what? what do we know? >> it doesn't appear that apple was aware of this odd glitch. it became discovered when a reddit user published it online late last night and it took off on the internet. >> these are only certain character this is do this. if you wanted to do this to someone to prank them i send it. >> right. you have to look up a story that features these oughtdd characters and he never saw it coming. >> he never did. you could have told him. >> i watched. >> i was the victim in this case. >> any damage to your phone? >> none that we know of. none has been reported by others? >> as of now, we don't know of any long-term damage. >> for your phone mysteriously stops and restarts. did you know it was he who sent
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the text? >> at first i didn't but i looked over and i saw him. >> the evidence tells. don't play poker with eli. mandy. >> they look like a distrustful bunch. the worst. okay. here this hour's power points. number one in the health care arena. express scripts planning to try a new way of paying for prescription cancer-fighting drugs by putting in the pay for performance category. the part-timers want to be working more and 24 percent per are getting by financially. buying and flipping a home may be a risky business. it produced big returns. they made an average gross profit of $72,450, a 5% gross profit. >> it is up ever so lightly, but
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down more than 3% over the past week. right now does it present a golden opportunity in the goldminers. you have to stick around to find out.
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. >> this was a dog gone good hour. a trade that it was good, but doing the trade was you will actually not so good. a side of the debt story you probably haven't heard elsewhere. is the snap chat ceo right or wrong about technology being in a bubble? we will talk about all of that. >> they have been moving nicely to the upside and this past week alone, the currency has been taking the high road against the euro and they are down 2%. the gold trading 2% to the downside and is there a running theme. >> why don't we take a trait. they have been taking the heat and down about 3.5%. so is the dollar pounding the gold trade and could this be a golden opportunity? let's bring in the svp of the
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institution and first your thoughts on gold. flat as a pancake. >> yeah it is. what we have seen in gold is it's risen here year to date and they came back big time and the dollar was raising and there was a coreration well, but let's keep an eye on the volatileity. when they are getting prepared to make a big dive like in 2011 and 2013 it spiked higher. it might be the end of the run to the downside for gold. there may be more downside and i think ultimately this is not the sell off that we have seen. >> what does it mean? if you look at the individual goldminers themselves new is up 42% year to date. up about 8% and many cases they are outperforming the metal themselves. >> i agree and typically when you look at the goldminers, they
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will under perform the highs and not quite hit the lows. projects are getting back up and right now cash is king. if they expect prices to go back up if the fed drags its feet and keep the dollar weaker they take it on the chin in the wake of what's happened in the gold commodity, but moving forward, it has a lot to do with what we will see financially from the federal reserve and the price of gold moving forward as much as it is about gold mining. thank you very much for joining us. >> that are will do it for the first hour. >> put your feet up. >> i will go put your feet up. >> the next hour of power lunch.
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>> almost 2:00 on wall street and almost 11:00 a.m. in pal owes verdes california. all in hopes of a debt deal. they mean it this time. maybe. melissa lee is at the nasdaq. right now let us start with stocks. we have a triple-digit loss one day and a rally the next. the dow is up and not quite triple-digits and a big part of this is the transport stocks. the trains and planes and trucks that move us around. airlines have been a bust as an investment lately. the xal airline down 10% in a month. american airlines the worst of them down 20% in just 30 days. phil is joining us now. phil what happened to the one-time high flying group the stocks? >> they have been spooked because you have an kprea that is trying to grow capacity and
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snag historically it has not done well. it really comes down to sentiment and whether or not you believe the current group of executives including doug parker can grow capacity rationally and smartly. the fear is profits will come down and what happens if jet fuel continues to move higher. it is the growth limited for the industry. something to keep in mind. someone talks about ticket prices. they have airline prices over the past five years. they took in $50 billion and there is no indication that ancillary growth slowed down. delta, southwest, and stocks over the last couple of years. all up more than 100%. people are concerned about capacity growth and the question
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is to grow the capacity without gutting profits. >> the transports at large, they are a buying opportunity. good to have you with us. i'm going to start off with you. it seemed like at first, lower oil shipments and now they have continued to face the head winds of coal and the ag trade. i see cheep natural gas. at least less and less coal shipments. when i see they are plummeting in ag exports as a host of other things we are trying to export. the strength of the dollar has been the death now. when i look at oil prices
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following, that kills pricing power. we are seeing the price per car load that railroads are able to charge significantly and weakness in short and domestic conversion from off the highway to on the rail. >> we will take a pause here and tell breaking news. >> on the technology of things we are watching shares of broad com shares that are spiking up. this on dow jones headlines, this is in advanced talks to be bought by avago technologies. they have talks on broad com. up by about 8.5%. they are up by about 5% as well. remember with the technologies they are talking about, that's a company worth about $35 billion. and brought com is about $29 billion. a pretty much an equal footing.
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certainly something you will watch. >> it could be after an xp. keep us posted. yet you do like one rail in particular. they are in the concerns that don laid out. >> don is right. they will be impacted and industrial demand is down because of fx head winds. wall street can be fickle and they are more about improving and power for the railroads. just because the fuel comes off the bottom line we do see a lot of long-term value. this is a high quality company and trading at an average
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multiple. i do think for a long-term investor, they can look at the head winds we have. this is a buying opportunity. >> you like the truckers because you think all that fuel savings will lead to consumers buying stuff. >> of the very first large cap stock we upgraded in the string of 2009 we are huge fans for five years. that outperformed and a great company. the opportunity to outperform as pass and they downgraded it. trucks on the other hand have a different story. they are much more heavily weighted. well over 75% is retail. it's procter & gamble. kimberly clark and craft and wal-mart and target.
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they are not spending as much on the commute. >> thanks for your time brandon and donald. >> the overall market is rebounding and traders and the hadded lines saying it's all on hopes of greece debt deal. does it matter that much? the portfolio energy and mike vogel sang president and cio of boston advisers. i want to begin with you and we want to show you a chart. you probably know what it looks like. the s&p 500 has doubled. in other words, all the negative commentary and guess what happened? if you didn't buy storks you missed a double. does greece to you really matter? >> not much. we are a big player. the risk in greece for investors
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and the shock waves are something that is unexpected. they start to knock over the economies of europe and asia and the united states. >> sit tight for one second and more breaking news. >> they had been halt and they are now reopened for trading up by about 14 to 15%. on the dow jones headlines. that will be bought and publicly a big, big deal. we want to bring your attention to the fact that broad com was up about 8%. about 13%. we will keep an eye on that again.
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>> the whole space has been in play. now broad com. what was a big space is smaller by the day. 14%. more on this story as it develops right now. let's go back to the topic at hand. now to you. your clients and mom and pop. don't buy stocks. greece has a debt problem. >> if there is a major concern that will be a short-term trade down three to 5% and you have a european union on a fiscal basis. you have a disunified on a political basis union. that's the troubling issue. over the next five years, we believed that growth within the european union will continue to be modest. >> you will get that it's not
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the lehman moments. >> it's not lurching from crisis to crisis to crisis. probably as long as you have been doing yours. if we keep waiting for the perfect time it's never going to come. >> i completely agree. we look at greece and europe and there is a long-term issue. in the course you have critical moments. you are seeing one of those now. the basic problem is going to be with us for a long time. this will resolve reasonably well over the next month or so and go back to normal. that's my guess. we are not great experts in it but it's difficult to your point to invest on a daily or even monthly basis. >> we leave it with you here.
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we will not drag you in without asking are if you an investment opportunity. >> i would go to health care. over the next 6 to 12 months. appreciate it. here is your power menu for the rest of the hour. a global scandal rocking sports. it has wire fraught to tax evasion. even u.s. bank involvement apparently. we will go live to zurich. well-timed, but not well executed. bill gross joins us on his big bet. are government agencies starting to act more like bankers than regulators. some say yes. you will hear why, ahead. blap the technology changes the design evolves the engineering advances. but the passion to drive a mercedes-benz
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>> take a look at the action at session highs. higher by 3.1% being fuelled by broad com in advanced talks. broad cam recently reopened for trade, trading higher by 16.2%. e-mailing and saying this deal if it happens could be the biggest tech deal year to date and also the third biggest tech deal in history. >> money laupdering and tax evasion all over 25 years.
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some of the most powerful figures under arrest today and allegedly banks are also involved. live in zurich with the scandal that rocked the world. wilfred? >> absolutely. the world of soccer rocks today. 14 people indicted most of whom were powerful figures with the governing body of world soccer. seven of the 14 were arrested here in zurich in a dawn raid at the hotel behind me last night. it is alleged that most of the pour bodies will have hem in zurich. they will hold an annual meeting over the last few days. it's $150 million this profit. most of this in the way that broadcast and commercial rights were sold for the soccer tournaments that fifa oversees.
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this corruption let down fans and players of soccer around the world. some have already pleaded guilt tow these accusations and they helped with the process of the investigation. for those arrested in the last 24 hours, they now face extradition trials in switzerland before facing the trial in the u.s. fifa responded and they have said that the annual meeting will take place as planned including an election for thement in president despite the astonishing accusations. that's the latest in zurich. >> thank you very much. david is a veteran strategist and chief marketing officer who worked with companies like benjamin more. if true think about this. this is many people at the top of fifa who for many year fist not decades, hundreds of millions of dollars in bribes and fixed boating. if there any way or reason to salvage fifa or does soccer need
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to tear it down and start over from scratch? >> it's a great question. i think they need to start over. there is no reason to say fifa. they are acting like the mob as many talked about today. the u.s.ed the stats. that's what they are acting like. no brand wants to be associated with something that is ablging like organized crime. i would get rid of fifa and you need something to regulate and bring the values of sport to life. you don't need fifa. >> you worked with visa. they are part of the sponsorship umbrella. a number of other companies. what would you advise them to do now. drop it or be a part of the
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solution? >> they can't drop it that quickly. it's a huge investment but they have to think first about the reputation. all of them are out there hedging bets. is they are deeply concern and not walking away. they support the sport. i think all of them have to continue to support the sport and support the fans. they will have to walk away. if i were talking to them i would be very, very careful about how he speaks about this but at the same time to be aggressive behind the scenes. they have to get him to step aside. you have got well-known sports figures like luis who will run for the presidency but stepped away and saying he wouldn't run for this and it's a dictatorship. when you have sports figure who is don't want to be involved. you have brands like visa and others. they have to step away.
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>> would a word like this be appropriate? >> absolutely. toxic is a good word for it. we have known about this for years. it's only bubbling up now because the united states tried to police what's happening. this has been going on for years. >> it's toxic and can cause tremendous brand reputation but they can't walk away. why can't they walk away. a lot of these sponsorships it's great for the brand, but they don't make a lot of money off of the sponsorships. for the most part they don't. >> they're don't directly but there is huge brand awareness with the number of people who watch the events. i am not saying they shouldn't walk away. they should walk away with purpose. # supporting the events and the
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fans and not this toxic governing body which is no longer governing. it's a criminal racketeering organization that is using a sport to make money. >> we have to leave it there. thank you very much. appreciate it. >> he called it the short of a time. bill gross's big bet against buns, the bond guru will join us to explain why his bet was well-timed but maybe not well-executed well-executed. bill gross is next.
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. it is the nasdaq that has seen the lift off. a new high. take a look at shares up 4%. we have the ceo on about a week ago at a new high. up 6% and the big caps. seeing nice gains in today's session. >> thank you. he calls it well-timed and not necessarily well executed. bill gross on the short of a
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lifetime trade. unconstrainted bond fund is with us now. before we get to germany or greece rather i want to talk about the other if we can. we showed the viewers a chart about how the stock market has doubled since the greek crisis began. how much should you or janice's clients across any asset class really care about greece? how much does it matter to you, bill? >> i do think it matters a lot. it's part of the eurozone and a departure from the eurozone would make a significant difference. it would discom bob ult currency and would involve defaults. to the ecb and defaults to the imf and the eu itself and place perhaps a portugal or a spain or italy next in line.
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it matters because markets interpret events and the fear of another might be the most important consideration. >> that's the huge variable in the puzzle that we do not understand. how long is the domino trail? is there a way to know what the second and third repercussions might be? >> the only way is to project economic growth 92 these countries, the countries with high debt that i just mentioned. the effectiveness of qualities. taking place in the eurozone. if these can be and if they can move ahead on an ongoing basis,
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the necessity to default probably is just not there. they are not in the same situation. it's a forecast going forward and at the moment it's not necessarily a slam dunk that they will be able to grow. >> whoever said that timing was everything has not been trading. it was timed well but not executed well. >> a lot of people accuse me and other people on programs such as this. >> i like to think of it as writing my book. when they throw out the book basically they haven't done much, but i thought it was a great idea. they said that.
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perhaps i should leave my own book. >> the message or the lesson you learned is not to do television. give us the appetizer, but not the entree. we are still going to have dinner, aren't we? >> you are always going to get it. me what i think. believe in myself as opposed to vice-versa. >> it's not a hot cross bun. i have been waiting to say that for weeks. bill gross, thank you very much. see you next time. enjoy. >> on deck are regulate ares acting like bankers? oil prices getting raze to close and close lower once again? power lunch back in a couple of minutes.
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beyond june 30th in response to a senior iranian nuclear negotiator who said the world powers might extend beyond that date if necessary. it created a working group to study mental and emotional health. the recommendations expected in six months could lead to new rules. the fbi is investigating a johnson & johnson surgical device found to spread cancer in women. it wants to know what j and j knew about it before they pulled it off the market. >> rounds have begun in the national spelling bee. 285 boys and girls are competing for $35,000 in cash and other prizes. tomorrow is the temmy finals and then the final round.
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>> oil continues to be under pressure and closing right now. wti crew down 1 half of 1%. this has been weak. let's ba go back and the fcc wants to crack down on robo calls and spam messages according to a new proposals being circulated by the fcc chairman, tom wheeler. he wants to make more regulations against the use of odd mated calls and what amounts to spam-type messages. he is putting forth proposals and it will be interesting to whether or not it gapes traction. maybe not news to most people but the number one complaint to people at the fcc is unwanted calls and text messages. back over to you. >> thanks so much. power players in the media and
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technology discuss the environment and what it ahead. ready at the code con, julia. >> melissa, i am joined by the former fcc chair and now partner at the carlisle group. thank you for talking to us. we heard headlines fromdom domdom chu about cracking down on robo calling. >> i big part of the mandate is to protect and empower consumers. i'm glad to see they continue to move forward. >> do you think there will be push back from them? >> not from the major companies. there companies that make money scamming consumers and they will focus on those. that's what this is about. >> your successor has been making a lot of headlines where he reached out to time-warner cable and charter and told them that he was not going to crack down on all sorts of mergers in
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the cable space. giving them the green light. do you think he was overreach something. >> he has been saying that the fact that the fcc blocked comcast time-warner cable doesn't mean it's no deals in the industry. why would he do something like that? it's because an action like the they took creates uncertainty in the market place. the fcc thinks and the doj thinks deals are generally good. mergers are generally good and they promote and consumers. i think you wanted to make sure the levels are set and the agency was not sdourming deals that would be in the public interest. >> there is a difference between discouraging and acting as investment banker. >> maybe. i don't know what he said in the calls. obviously he said yesterday now that the deal is announced, the deal will be reviewed very carefully and people shouldn't assume anything. the parties will have to demonstrate that it's in the
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public interest. >> if you were the chairman still, would you have done that and given a de facto blessing prior to the deal being announced. there is a world of difference between supporting deals in the industry because it's good and saying you know what you two, get together. i will okay that. . >> i think you generally try to do when you are in the roles is say the same things privately that you say publicly. the fact that it was blocked doesn't mean it shouldn't be considered. i assume he was saying the same thing. >> do you think it was the right thing? >> i don't know what he did. i couldn't say. i think the fcc has an obligation to help make sure that there is certainty and predictability in the market place so that deals get done should get done. not a lot of time is spent on them. >> do you think that comcast
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cable deal. >> sorry about that. i was trying to flag my hand and realized you couldn't see me. ladies first, please. >> just that point about deals that should get done. do you think that comcast deals should have gotten done? >> what does it tell us? there a couple of things to notice. what was thought to be a cable deal, the government looked at it as a broadband deal. cable companies not only provide paid tv but basic broadband infrastructure and in fact most of the cable companies profits come now from broadband and not cable. they think understandably that it's a very important part of the nation's economic infrastructure going forward. that's thing one. the second is that they are serious about competition and they want to see competition as the main driver of innovation and investment. they took a stand on competition
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in this deal. they are focused in particular on the limited nature of competition in most local markets for broadband access. what hasn't gotten a lot of attention in the context of this deal are a series of other initiatives to drive local competition promoting new entrants like google fiber and getting new spectrum. in a world with robust competition, it takes the heat out of the questions with the kind of combinations and attractions they are talking about. >> i don't want to get too wonky about it you have to talk about the market. what's the addressable market. >> what do you see as television's competitive market? is it the phone? is it the web? what is included this that world now? >> it's a great question. it's more because they are looking at it in broadband's
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competitive market the main focus. they seem to have looked at the comcast deal and said if you combine the two companies, they would reach significant percentage of the country's broadband customers, over 60%. they said it was too much particularly combined with the content that was inside of comcast. the nbc assets. >> when we look at the rise of broadband and the changing way consumers are watching video, do you think they will get broken up and should get broken up? >> the bundle question is getting more and more interesting. we have seen more acceleration and activity in the last six months alone than in the years before that. when you ask the question about bundle, there two things. what's going to happen to the bundle on pay and the second is how is content going to get organized over the top? it's a bunch of subscriptions.
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# they are doing what they can to ensure where a thousand flowers can bloom. that comes to net neutrality. >> the open internet rules go into effect in a couple of weeks. there is a lot of push back reclassifying broadband providers. what is going to happen? are the legal cases going to shut down. >> two things the rules of the road themselves. it's worth noting that five years ago they put in place rules of the road. net neutrality. it would end investment in infrastructures. the rules are in place for years and it was all good news. we saw a massive increase in private investment and innovation, both in applications and services that ride on the internet and in wire and wireless broadband networks. to the extend of what they have
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done, we want to keep the rules in place. that's one way to look at it. # 4rding the fcc was not that much of a choice. imposed the short point. i think that title two is more smoke than fire. we are continuing to see investment. record setting and more deals. i think that remains the uncertainty. >> certainly an area to watch. thanks so much for joining us here. appreciate it. back over to you. >> thank you very much. time now for trading nation. our daily dive in stocks bonds and options and whatever you ask for. let us look at tumbling shares of michael kors.
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equity chief investment officer. if you like the stock, it's at a discount. it's taken a hit. do you like it? >> i like it. i know it's getting hit. there is a lot of negatives around declining same-store sales. they have struggled and they are using the currenty excuse as the dog ate my homework. 16% expected growth for next fiscal year. they are still attractive trading and it's good growth with reasonable prices. just pay through to the negative announcements for this quarter. maybe declines in comps. overall long-term good holding. >> overall long-term good holding. okay. not a boost of confidence, but mild optimism. what do you think? >> the last three years or so we had many years of zero
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policy. it is creating the crowded trades in the themes that come into wall street. we were told over and over again that lower oil prices would be great for retailers and all these people crowd in and when the bad news comes out, it's student body left and right. if you have taken advantage of capitulation typically it's a winner because so many people have piled in and piled out. that creates an opportunity. we are right back after this.
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>> it's not a recommendation. we will get to that in a second. it's a two for one. on coach with a cell. concerns about the company's progress. sales compareisons continue to deteriorate deteriorate. # >> what are consumers spending their monoand accessories and buying watches. over at michael kors. spending money with the watch. bigger questions. next stock here. nimble storage. how many analysts can be confident in predictions they make. not many. last night, better than expected
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earnings, they are bullish, saying revenue is outside on 53% growth. legacy storage has less than 4% market share and there is tremendous runway in terms of gaining the market share. they are confident about share gain and growth through 2020. >> legacy storage, what is that a locker? i did a double take. the average rating is buy. that's not unusual. the average target is $35 a share. the stocks call it $26. everybody is in love with nimble. i want to say nimble again. next up ebay. a new analyst starting coverage the target is $68. 15% upside. this is interesting. while analyzing ebay ahead of the pay pal spin off acquires, the shares are under value and
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thinks that ebay is under owned by stocks like mastercard and visa. over the past 12 months or so. yahoo downgrading to the price target going down to 55. the stock not feeling too much. remember the questions about yahoo's ability to spin off. the analysts saying there is risk and upside to the stock, but it's not as much as before when it was thought they could spin off. >> how many analysts seem to know what yahoo is worth when you remove that stake. we will find out. generally we do an under the radar name. we have to show it again.
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the sock is up 4.5%. the talk about them acquiring companies. whatever. i want to give a shout out. he came out and this was ahead of the broad com headlines and said they noticed unusual activity in nvidia before the headlines. that smells like somebody might have known something. >> somebody was fishing around or it seems like it. nice gain. session highs for n vidia stock. >> it's everybody else's radar. when you speak, america listens. >> i like to think so. top states back on cnbc. we are kicking it off after the break. stay tuned. blap
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. it's that time again. i'm scott cohn in fremont, california, we are kicking off our ninth annual america's top states for business rankings. don't know our findings yet. we'll release them in june but we're already learning something. a change in the competitive landscape that frankly i haven't
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seen since we began this back in 2007 and this tesla factory, their main manufacturing plant, is a prime example. now this used to be the home of a joint manufacturing venture between gm and toyota. already a lot of auto workers and manufacturing workers in the area but it's a hop skip and jump from silicon valley. a lot of tech talent nearby as well. these days it is about the work force, so last year when tesla decided it was going to build its $5 billion battery plant in nevada it was not the company says the $1.25 billion in incentives that sealed the deal. >> a lot of the assurances we got were if you come and you invest here we'll definitely have the work force for you. we're used to building things quickly, building things fast and we have the work force available for you as far as manufacturing jobs. >> reporter: so all the states are pushing their work forces like never before and because we like to grade the states on the categories, the criteria they use to sell themselves it's
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going to change the way our study is weighted this year. these are our ten categories of competitiveness in this order. work force s cost of doing business, that always used to be the top category economy, infrastructure, quality of life technology and innovation education, business friendliness, cost of living and access to capital. read a lot more about our methodology for this year as well as the new push for work force at and, of course, we always want to hear from you, what you think. tweet us with the @topstates. our rankings our ninth annual rankings in june. >> has a northeastern state ever won number one? virginia, texas some. >> if you count virginia which isn't exactly a top state, virginia won't three times in 2007 2009 and 2011. but otherwise it's a lot of the south, texas. we were up in south dakota a couple years ago. so you just never know. >> i'll give you this shout out,
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sunday giving a commencement speech into my high school in virginia and referencing your rankings and how well virginias has done. you will get a shout out to james wood high school on saturday morning. a career-defining moment. thank you. snapchat founder talking ipo and tech bubbles. hear what he had to say and what he was wearing. automotive innovation starts... right here. with a control pad that can read your handwriting, a wide-screen multimedia center, and a head-up display for enhanced driver focus. all inside a redesigned cabin of unrivaled style and comfort. the 2015 c-class. at the very touchpoint of performance and innovation.
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. what does an ipo look like for you? you have revenues. what is the -- >> an ipo looks like a lot of things but most importantly looks like just another dot kind of in the growth of our business. >> that was snapchat ceo evan spiegel at the re/code conference today. you know herb greenberg the famous, talk about this ipo. mark clearly you don't cover snapchat but you cover alibaba and alibaba made an investment in snapchat which values snapchat at $15 billion. did alibaba overpay? >> well again, no investment opinion on snapchat but i thought there were a couple interesting data points 100 million in daily active users, 65% are engaging with the site every day, posting content, those are numbers that are equivalent to twitter and you know the market cap of twitter came out with so that's -- there was interesting data points, saw flexibility from the
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ceo and now refreshing hearing the ceo not timid about going public for a change. >> you think twitter is the comparable in this mark is this. >> i think people will look at facebook, they're going to look at maybe alibaba, at twitter those will be the two obvious comps and you will have a high gross margin business with the potential long term to have 40% ebitda margins if they execute well those would be the two obvious comps in the market. >> herb where do you stand on this? i have a feeling that this really just rubs you the wrong way, this whole $15 billion valuation thing. >> since i'm the guy who says that twitter should be a private company i think that look if the money is there, he would be silly not to take it and go public, but he risks getting a -- especially if it's in time soon indicate any time soon a really crazy valuation that will cause the stock to come back to earth. when talking about -- talking to a tech invest are investor
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before i got on air and he said he's begging -- he and his friends are begging because they need them to -- >> apparently herb is doing the interview through snapchat so mark, last question quickly to you, why do these companies need to go public? they're not building factories. why do they need to the capital? what good does that do? >> they're not making money. >> what's that? >> sorry, they're not making money. mark, you can speak to this. >> exactly. so just purely tone rich their -- >> keep in mind -- well keep in mind that facebook went public as a highly profitable company. twitter went public on the cusp of profitability and missed about free cash flow to date. profitable free cash flow quarters and some not. there's a path there to profitability profitability. hopefully snapchat, one request i would have, when they go public, there's a path to profitability, couple quarters of positive ebitda markets. you get strategic currency with which to make acquisitions early investors that want some
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sort of liquidity and then do it for your employees too and play in the big leagues, you go public. >> well said. thank you very much. appreciate it. herb greenberg is out there in tv land. >> yep. i will see you tonight at 5:00 brian. >> i'll snap it thank you melissa. >> hope so "fast money" at 5:00. "closing bell" starts right now. hi welcome to "the closing bell" i'm kellen evans at the new york stock exchange. busy day. i'm bill griff fets. the apple executive behinds the watch, just making headlines at the code conference out west in california. we will bring you his latest comments on the watch and the potential decline in smartphone demand as well. all of that coming up here in a few minutes. >> also greasing the markets. stocks on the rebound today. hopes greece is getting closer to a deal behind this one. the details on how it could impact your money. >>


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