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tv   Power Lunch  CNBC  December 31, 2015 1:00pm-3:01pm EST

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>> you really did, on the way here? >> it was a jim evans on the palisade parkway. >> it was a bob evans. i'm saying it publicly. i'm getting in shape. >> happy new year, every, see you on the other side. "power lunch" begins right now. >> all right, everybody. welcome to "power lunch." i am brian sullivan. tay la tausche will join us from the new york stock exchange and lots to do on this final day of the year but it's tradition time. let's get to rick santelli for the annual new year's celebration on the floor of the chicago merc. rick? >> happy new year, rick. >> it was up there but now, jimmy, it's all on the floor. hey, listen, happy new year to all the viewers, all the investors out there. remember one thing, we still have people in chicago! yeah! 2016 will welcome you. janet yellen, we'll be watching! happy new year.
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>> all right. happy new year, rick, to you and everybody at the chicago merc. we have some serious breaking news from dubai in a scary situation. here again is sue herera. >> absolutely, brian. here is what we know. a fires a engulfed the address hotel located in downtown dubai. these pictures are coming to us from the associated press. this fire broke out just a few hours before dubai's massive fireworks display was set to go off. it is in the address hotel. it has engulfed at least 20 floors according to the associated press. we don't know the cause of that fire. we don't have any word on casualties. we do know that first responders are on the scene. once again, it is a massive fire in a tightly populated area of dubai in a very popular area of dubai i'm told, and, brian, i think you also stayed at that hotel, have you not z? >> i have been to that hotel, i have not stayed there. i have been to that region. that is the premiere shopping
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and recreation and dining destination in dudubai. i don't want to call it the times square of dubai but it's the most crowded area. there's a gigantic and high end mall connected to that hotel that really encompasses and encircles the whole thing. you see the banner running at the bottom, this is basically across the street from the world's tallest building. if there is some good news in the way it's laid out, the burj khalifa is surrounded almost completely by a manmade lake, so there is a natural water barrier between the burj khalifa, which is also surrounded by restaurants and outdoor dining and shopping and where this is happening, but the two are very, very close together. >> yes, and as you can see and once again this is a live picture coming into us right now from dubai from the associated press. the fire, as i said, brian, at least 20 floors. it looks like since the last time i did an update that it has gotten bigger and moved higher
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up the building. we just hope that we get some word on how many people are safe at this point, whether we have any casualties, and we're going to keep you posted. we do know that first responders are on the scene, but it is a massive fire. last time we checked from the associated press and reuters it was engulfing at least 20 floors of that particular hotel. so, brian, i'll turn it back to you. we'll continue to monitor what is a very serious situation in dubai. >> thank you very much, sue. it is 10:00 p.m. there in dubai, so they are ramping up obviously for the new year's celebration, and like many hotels in dubai, it's also a condo. so you have both a combination hotel and residences so there are people that live in that building full time. almost every major development in dubai is sort of a half condo, half hotel type unit. she's a very scary situation. sue, we'll get more from you in a bit. thank you very much. kayla? >> and, brian, we will continue to monitor that story, but we should also tell you what's
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happening in the markets here on this final day of 2015. not shaping up to be so exciting for the bulls. you can see the dow is down by about three-quarters of 1%. futures were negative all morning, and we were down more sharply than this at one point. the dow and the s&p have been tracking what has been a recovery in the price of oil. we'll tell you more about what is driving the price of oil a little bit later on. so far as the dow today though, what's bringing it down? verizon, boeing, microsoft, all three of those companies as well as apple. apple down more than 1.5%. so apple is going to turn in its first negative year since 2008. that year it lost 56% of its value. of course, with much of the market as the market was turning down. but this year it will finish down in about -- it is down 21% since the april high it hit earlier this year. it was 130 bucks as recently as july.
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it couldn't really recover from that china slowdown despite a few climbs in the meantime. brian? >> all right, kayla. thank you very much. just, by the way, the rig count usually comes out on friday. obviously tomorrow is a holiday. the baker hughes weekly rig count is coming out right now falling two. oil rigs down two. let's now talk about amazon.com. amazon has had a huge year this year. the stock has more than doubled in value, up 121%. amazon is a company now valued at $323 billion. wow. that's great for amazon shareholders and employees, but here is more macro question, is amazon becoming too big and simply too powerful in retail? bob pisani and retail reporter courtney reagan are with us, so is ron insana and kayla at the nyse. all of us were going back and forth on e-mail ahead of this segment. you say in 31 years of covering
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financial news, you have never seen a stock like amazon. explain. >> well, in the sense i've never seen a company like amazon where investors have been willing to give the firm the wide berth it has with respect to producing profitability. investors have been content with revenue growth, cash flow growth, massive reinvestment, but razor thin profit margins at best when they do report profits, and i guess the big idea here is that as amazon grows into this behemoth, ultimately it will begin to, as it maybe invests less or spends les, produce extraordinary profits. now, that's the guess. that's the wager here, but, again, i have never seen investors as patient with a stock as they have been with amazon, but it's worked. they're up on the capital side more than they are on the profit side and it's been a very big winner. >> courtney, you talk to all the retailers, online, offline, and that word i hate, omni channel. when you meet with them, do they complain about amazon? is anybody suggesting that
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amazon is simply too big? >> so i have to say, most of the retailers are very careful about what they say out loud when it comes to amazon, but i can almost assure you they all have amazon war rooms and they have big meetings about how they're going to tackle and competed with amazon. i agree with everything ron has said and perhaps one of the reasons investors have been so forgiving when it comes to amazon, much more so than any other retail or stock otherwise, is that it is very clear that amazon is taking share from other retailers. so perhaps it's only a matter of time until they turn on those prodiggsal spigots that investors reward retailers for. the numbers are incredible. we asked some questions on our cnbc all-america survey for the first time about amazon. 40% of americans research on amazon all or most of the time when they shop online. 40%. that's incredible. think about how many other websites are out there and the conversion rate or the amount of
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visits that actually generates a sale, 50% for amazon. if you compare that to a conversion rate in store it's maybe around 3%. so the dominance is just unbelievable. >> there are a lot of websites out there, there are a lot of other retailers, but what's the danger of creating a market where it's one key player being run by one key man and everybody else. >> there is a danger and they're growing their online share of e-commerce exponentially. i agree with ron's point about the weirdness of this, they are being rewarded. if you look at what matters for the invests, cash flow. they're going huge. they were making $4 billion in cash flow ebitda 2014. they're going to do $10 billion in cash flow this year, and that's going to eventually push down into the bottom line. and i think that's what investors are looking at. right now they have a quarter of all online commerce. it was 23% the year before, 21%. look here, the ebitda for amazon
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is blowing up this year and that's going to flow through to the bottom line. look at the online commerce percentage. it's gone up two percentage points every year since 2010. 16, 18, 22, 126% and that's wha they're investing in and now they're starting to see the cash flow blow up. >> one of the things that does not bind amazon or two of the things actually, the typical constraints that come with retailing, which is real estate and the number of stores you can build out over a period of time domestically and internationally and inventory where you can make mistakes. amazon is less inclined to make big mistakes, so they get a huge advantage that doesn't exist elsewhere in retail. >> i would argue that's because i look at amazon sometimes more as a logistics company than a retailer. they are incredible at getting you the product very quickly and giving you a wide selection of products to choose from. yeah, they create some of their own products, but really what we
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love so much as consumerings about amazon i think is the way that they deliver that good to us in the end. >> and the multiples may not be as crazy as you keep hearing. if you look at some of the 2017 numbers, as a multiple to cash flow, to ebitda, end of year number is 17 to 20. now, that's not insane numbers, so just bear in mind, you hear a lot of crazy numbers about amazon. >> so, bob, ron, courtney, guys, thank you very much. appreciate it. good discussion on amazon. another big story with implications for your money, the new battles that are shaping up into the new year in the mobile space. for example, you've got youtube sort of squaring off with t-mobile over data and now at&t dropping its two-year contract requirement. let's get caught up on all this with julia boorstin live in l.a. >> brian, the mobile carriers are pulling out all the stops to differentiate their services from each other, and now one of the extras that t-mobile is offering is bin john video service is sparking a battle
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with youtube. it gives subscribers with at least three gigs of data without counting that against their data plan. youtube is not part of the plan and takes issue with the fact that t monl caps the quality of all videos streamed for users. youtube accusing t-mobile of throttling its video streams without user consent raising red flags for the fcc's net neutrality rules banning throttling. youtube saying reducing data charges can be good for users but it doesn't justify throttling all video services especially without explicit user consent. john lejere responding saying our customers heart bing streaming video without hitting their data bucket and have complete control to turn it on and off as will. the carrier is likely to focus
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on the fact they can opt out while google would prefer for the service to opt in. at&t just announced it's eliminating its two-year contract starting next week following verizon and sprint which limited contracts a few months ago and t-mobile which did so two years ago. did the death of the mobile contracts bring transparency to consumers who are doing comparison shopping and it meanings the focus for consumers trying to figure out where to go is likely to shift to extras such as streaming video. back over to you guys. >> all right. thanks so much julia. safe to say the gloves are off in that sector. let's take a look at oil right now which had been climbing throughout the session. this morning some of that is due to storms in the north sea. right now we are up about 2.33%, $37.46. hasn't been able to break 38 bucks a barrel but certainly that's a level folks are watching. there's also big news out of iran in reaction to the
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possibility of renewed u.s. sanctions after iran tested new ballistic missiles. the country is threatening to quickly speed up its ballistic missile program. iran's president using twitter to deliver this message in response to new u.s. sanctions, i have ordered the defense minister to speed up iran's ballistic missile program. this year crude oil, take a look at the chart so far this year, it's down more than 30%. brent for its part is down 35% year-to-date, and, of course, brian flip-flopping with wti as we've been watching in just the last week. >> yeah, certainly is. kayla tausche, thank you very much. we'll have more on that iran news later in the program. let's get right now more on the developing and scary story out of dubai. sue herera. >> thank you very much, brian. you're looking now live at a picture that is coming into us from reuters. we'll probably be switching between the pictures from reuters and associated press, both of which are showing a massive fire at the address
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hotel in dubai. this fire breaking out about 90 minutes or so before a massive fireworks display was set to go off. they had 1.6 tons of fireworks scheduled to be used in the display. we don't know what the status of that is at this point, whether or not they will go on with that. i highly doubt it given the proximity of this particular hotel. it looks like it has gotten much bigger, brian, since we first went on the air with this still developing story. you can see the debris raining down from the hotel. there are first responders and firefighters on the scene, but once again the address hotel engulfed in flames in dubai. we're going to continue to follow the situation. brian, back to you. >> very, very scary video there. we're going to get the latest from you in a moment. sue herera, thank you very much. that is connected to one of the biggest malls in the middle east directly underneath that hotel. let's take a short break on cnbc. we've got the s&p and the dow down slightly. we're back right after this.
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that is connected to one of the that is connected to one of the
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welcome back. financials one of the lagging sectors of 2015 down about 3%, but the regionals are up fractionally. could a turnaround be in store for the new year. anton schutz managing two five-star rated morningstar funds. anton, it's great to see you today. >> always a pleasure. >> if investors had piled into the regionals trade this year, they wouldn't really have done
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so well, but do you think that finally the prospect of rising rates and potentially consolidation will play out better in 2016? >> well, we've seen lots of mergers this year and we've had 300 deals ta year for the last couple years. i answer that pace to accelerate. certainly all the regulations has caused costs to regulation. technology is reducing costs. finally the fed is raising rates and margins can expand in a lot of these firms as things go on but i think you have to be at least $2 billion in size in order to have scale and it's a real advantage to be under $10 billion in size, and i think a lot of con sl dation will happen. >> give us some examples of who you are looking at as potential targe targets. some of the most oft rumored companies were the ones that got bought this year. what is the new crop are targets look like? >> so when you think about
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desirable parts of the economy and this country, the southeast really comes to mind, and a lot of the bigger banks want some of the growth that comes out of the southeast. other than bb&t and suntrust and regions that are there, other guys want either more market share or they want to be there. so places like north carolina, bank of north carolina, yactkin financial, acbi in atlanta and tennessee. favorable tax structures in those states. you have inflow of people and corporations. lots of good growth, so good reasons to own them in the first place fundamentally. >> but one of the biggest risks, ant anton, with the regionals is that they have outsized exposure to the energy sector. these are the companies making a lot of loans to the smaller to midsized companies in the oil patch and in the commodity complex. how do you size up the exposure of a given financial institution and whether you should be putting money into that company? >> well, first of all, as an active manager, if you look at
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the etfs, the etfs have to own companies across the oil patch. it's been a place we've avoided, the names that you don't have exposure to the energy sector, so it's very important as a stock picker to look at where the opportunities and the risks lie. so right now i think it's too early to invest in the energy space in terms of financials that have exposure. some of the bigger financials have exposure but it's all manageable. it's the companies that are in those markets that really can be exposed and have risk. so right now i don't own any bank that is are has that are h texas. >> hence the centralization in the southeast, georgia, north carolina, we'll see how those play out. anton, happy new year. good to see you. >> happy new year. >> anton schutz. brian, up to you. >> thank you very much. let's get to seema mody with a market flash. >> with less than three hours
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left to go until the end of the trading year, brian, let's take a look at apple. it's nearing session lows and is on track to close the year down by around 4.1% tracking for its first negative year since 2008 when it lost 56.9%. analysts attributing the move we've been seeing in shares of apple to worries about its iphone growth pipeline and also earnings growth in 2016. uk you can see on the day shares down 1.8%. >> seema mody, thank you very much. we'll see you soon. by any standard this year was a pretty lousy year for pretty much every single commodity in the world. you might have heard a little story about oil. yeah, we're down 30%. gold down 10% this year. copper down nearly 25%. one other one we don't talk about much also down big. we'll give that you story and much more coming up. stick around. was a pretty lousy year for
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much more coming up.
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earlier in the show rick santelli got confetti dumped on his head. let's go back to rick santelli who has cleaned up at the cme for more on the bond market which is sort of, kind of trading today. >> well, sort of, kind of finished for futures. about another 35 minutes for the cash markets, but it has been really a very incredible year with contained rates except for the short end. look at intraday of five year, it did give some back today. high settlement of the year was yesterday at 179.
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we're at 176. the 179 goes all the way back let's put a year-to-date chart, back to september of last year. 5s, they settled at 165 last year. 10 basis points. 2 year notes are up 40 basis points. let's look at a 10-year, november 1st, boy, it's been going up and down but really very much in a range, brian, but, you know, 248 is the high yield close. we were hovering earlier in the week in the 230s. we've dipped down below that. maybe the most fascinating chart of all year-to-date of the dollar index, multinationals are not happy with the strength and you see it there. we're up about 9% roughly on the year for the dollar index and my guess is if you want to know what's going on with the dollar index in 2016, there's only one area you have to pay attention to, 100. that level on the dollar index probably could be a breakout zone to the upside should they get a solid week close above it. you want to watch traders' behavior at that time.
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sully, kayla, hope both of have you a terrific, prosperous, and happy new year. >> thank you, rick. same to you and yours. let's go back to sue herera. we have more news on that big fire in dubai. >> thank you so much. and an update for you now. we now have a civil defense official from the government in dubai saying no injuries from that hotel fire, and he also, this civil defense official from the government, says that the new year's celebrations will proceed. he was telling that to the local news media. just in case you're joining us, a massive fire broke out at the address hotel. you're looking at a live picture of that. it broke out about an hour or so ago. at last check it had engulfed at least 20 stories. it's, as brian pointed out earlier, sits above a massive mall in dubai. that's a very populated area, very dense area popular with
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tourists as well as people who live in these massive skyscrapers. but the new news that we have is that the civil defense official telling local television in dubai that so far no injuries from the dubai hotel fire and they are planning a massive fireworks display and they say that the new year's celebrations will proceed. we'll see whether or not that changes, brian, as this story continues to develop. >> it's great news about the lack of injuries -- >> absolutely. >> i find the other comment bizarre. it's 10:30. it's 90 minutes -- >> right. >> -- before the turn of the new year. you have one of the biggest and most expensive buildings in the most crowded and popular area of dubai completely engulfed in flame now. there's been no effort that we can see to put this out or at least it's not working, and they're going to go forward with a massive fireworks display in 90 minutes' time. >> that's what the civil defense official says. i would caution that that may
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change as this situation continues to develop, and that's why we're taking great pains to basically tell you that that is a civil defense official commenting to local television. nbc news has not independently confirmed that that is the case. >> it certainly could have been -- you know how these work, sue. that could have been an off-the-cuff comment, are you still going to go forward with the celebrations as the guy walks by, yes, of course, and then wanders off to do his other duties. >> exactly. >> this fire has now been burning for -- from what we can tell more than an hour. has only grown in size. the building, by the way, is 63 stories tall, and notice an area they call downtown dubai. i've been there. it's basically -- it's where the burj khalifa is, it's the world's tallest building and it's a planned shopping/hot shopping/hotel/restaurant area. they have outdoor bars and
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restaurants. >> it's very popular. >> they have the mall underground. you have a building that's been burning very hot for over an hour next to a very densely populated area. one would wonder why they would want to assure people that it's essentially okay to come out and watch at fireworks celebration. >> you know, i wonder that as well, and that's why i really think perhaps we need to monitor the situation very closely to see if nbc can independently verify those comments or whether we have other officials come out and make comments because as far as we know, this fire is not contained. you can see that it continues to burn. it's grown since we first came on the air. it's burning, as you said very aptly, brian, very hot, and we see debris has been raining down from the upper stories of this hotel. so it's a very fluid situation still, and we're awaiting more comments. i'll turn it back to you. >> okay. sue herera, the fire burning at
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the address hotel. it's what it's called, the address hotel, the giant mall underneath it. we'll get more from sue in a few minutes. we'll take a short break on cnbc. fire, big fire, burning in dubai, 10:30 p.m. local time. we're back right after this. conquer the weather. don't let it conquer you. with the capability and adaptability of lexus all-weather drive. this is the pursuit of perfection. start looking for a house? oh did you see that listing on zillow i sent you. you see that bathroom? did we just decide to buy house? i think so. yay! find your way home. zillow.
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welcome back to "power lunch." let's show you where we are on the major indexes right now as we're just 2 1/2 hours into the close. all major indexes are trading lower right now despite the fact that the s&p several times this morn morning has gone into positive territory. right now it's down a third of 1%. it's a make or break session as traders see if it can close in positive territory. the knack n-- nasdaq is down haf of a percent. joining me is bob pisani. bob, it was oil, the jobless claims, we've had a lot of news today to work with despite relatively low volume. >> and a little bit of suspension of whether we're going to be positive or negative. we rarely get this kind of suspension. oil, part of the reason we have lifted off of the lows of the
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day was oil moving up in the middle of the day. a lot of people are attributing this to the iranians. there are reports the iranian president may be expediting their missile program following u.s. sanctions. the s&p 500 moved up in lock step with that. it's come off that recently, but the pornimportant thing is 2,05 that was the old closing high. we need to get over 2,058.9 to be positive for the year. that's what we're watching. sectorwise, energy is one of the few things positive on the day here. materials fractionally positive. they have been picking at the carcasses of tremendously beaten up groups. transports are generally doing better than the overall sector. we've been telling you about a rough year, many of the railroads like kansas city have been having, csx has had a tough year, avis generally okay. ryder systems had a tough year and fed ex as well but you can see them fractionally to the
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upside. i'm not sure to what extent the reports of that fire in dubai took us a r us off the high but that's just about the time we were sitting at the high. >> we have a couple events at the exchange this afternoon. wait until the sun shines rally. >> this is a traditional day when the old-timers, the retired brokers come down on the floor. there's 50 or 60 here. there's 30 or 40 in florida that sing along. it's nice to see some of the old friends. >> they're starting to gather so we will hear that momentarily. bob pisani. thanks. brian, up to you. >> thank you. we are guessing that you would like to make money on your investments next year. well, then this is a good fit, folks, because we would like to help you do that. let's get some investment advice. john merrill, chief ne. oinvest officer at tanglewood. tell our viewers why defense will be a good place to invest in 2016. >> one of the golden rules of
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investing is follow the money. you want to invest in places where the money will flow despite the weak economy that we have, and i think you'll want to look at government. you want to look at businesses and consumers and say what will they spend on despite the weak economy. certainly defense with the rise in terrorism is one of the three areas i would focus on, and it's not just certainly here, it's in europe, it's everywhere, and it's not just about the homegrown terrorism and the type of defense spending that that creates but also defense spending, you know, around the world building navies, building armies, technology that goes with that. >> you also like technology, but that's very broad. kind of like saying i like meat. can you be more specific about what kinds of technology companies and stock you find attractive right now? >> well, i would say in the technology area, again given the weak economy, that you would want to focus on things that
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help cost control. you know, from the standpoint, one of the problems of our sluggish economy is technology is displacing more and more of the type of jobs that would have gone to middle class people in decades past. but our u.s. companies and their managements have been tremendous at keeping costs under control, and technology has been a big part of that, so i would look at the japanese, european, and american manufacturers that concentrate on the robotics and the areas that really influence that. >> and we've had some guests come on and say they are starting to buy some of the beaten up energy and oil stocks. you are not. why not? >> well, i'm here in houston so i have a direct pipeline to what's going on, but i would say i just look at saudi arabia as controlling the supply side there, and there's no incentive for them to relent and let
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prices go up at this point in time because the energy business could snap back. they're drawing down their sovereign wealth fund to such a point that time is not on their side, so i think they're going to have to press or double press down here to keep prices very low or even lower so that they break the back of the oil industry and so that it can't snap back quickly, so that people leave the industry, they're in different jobs and different industries. thes no longer want to touch the industry, they no longer want to lend to them. j >> i will be in houston. >> come on by. >> i will. are you starting to feel oil's pinch as a city, as an economy. >> we had our christmas party at a local restaurant last tuesday and they said it was the last party before christmas which is very unusual. they usually have them right up until christmas. they usually have eight events
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over december that would fill up the restaurant. they had one this year. so, yes, we're beginning to see it ripple through the economy. >> john merrill, tanglewood wealth management, happy new year. i will see you maybe in houston early next week. appreciate it. >> sounds great. >> go to powerlunch.cnbc.com to see how john is handling investments in china next year. kayla? >> thank you, brian. if you're looking for value as we head not new year, what are some of the best stocks to target? jordan posner is managing director and senior portfolio manager with matrix asset advisers, and jordan, swches we talk about the s&p limping to the finish line today, that's pretty much i guegnoring the fa that as an earnings multiple, the s&p is historically pretty rich. how do you find value in that company? >> we look at individual companies, we look for fundamentals and where we think the fair value is. we're looking for companies
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where there's a meaningful difference and there's the ability of the company to actually proactively close that gap. >> i see that you like harley-davidson, zimmer biomet and johnson controls. three very different companies. is there a thread that connects your investment thesis in each of those or are they unique prop sigs? >> we build the portfolio bottom up. we look at each of the companies separately, but there are probably a thread that runs through all of them is that there is a change that's taking place. in the case of johnson controls, new management came in about two years ago and has really been revamping the portfolio. the last part of the change in the portfolio is that they're going to spin off the low multiple, low growth, low profit auto business and going to be focusing on some higher margin, higher growth industrial businesses. similarly at zimmer, they did something different. they merged with biomet.
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created a large and dominant player in orthopedic devices. took on a lot of debt to do that but with the cash flows and profit are able to pay down that debt and you will see nice earnings accretion going forward. >> but you would need to see, jordan, a turnaround from what these companies did this year. we just showed the year-to-date charts. harley down 30%. johnson controls down 17%. zi zimmer down 10%. what is it about 2016 that makes you think each of these companies can reverse the fortunes of what happened this year? >> well, of course, we never know what's going to affect the stock price and the stock price is set by the markets so companies have little control over that, but, for example, in the case of harley, the company has recognized there's been increased competition because of foreign exchange pressure from competitors, so as a result they are reinvesting, taking cost savings to reinvest in marketing, in new product development. using their strong balance sheet to buy back stock at this lower price and between some improved
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business dynamics from changes they've made plus also increased earnings leverage from a lower share count, we think that earnings can continue to grow. the stock trades at 11 times, has a 2.5% yield. we think it's very attractive. >> jordan posner from matrix asset advisers. more "power lunch" in just two minutes. hey work all the time. sup jj? working hard? working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative pricing model, honey? for all the confidence you need. td ameritrade. you got this.
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welcome back, everyone. i'm sue herera with breaking news on the hotel fire taking place at the address hotel in dubai. we have officials making some comments saying that there are no injuries at this point and that the new year's celebrations will take place. we're waiting for more comments from the media. the fire started reportedly outside the 20th floor of the hotel. it has spread considerably since we went on the air with this story about an hour and a half ago. right now they're saying no injuries. we're waiting for further clarification on that. that comes from a civil defense
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official talking to local television there. we don't know what the source of the fire was. however, at this point it still looks to be burning quite hot. you see the debris raining down on the lower part of that hotel from the upper floors and down to the ground below. rescue workers and first responders are on the scene at this point, but right now, brian, we don't have too much of an update on this. we are trying to verify some comments from the dubai media office that says according to the dubai media office, the celebrations will continue and the fire they say -- they say, quote, the fire at the address hotel downtown originated from outside the 20th flar. they say, and this is a quote, it has not spread inside. internal fire extinguishers are preventing the spread of the fire inside the hotel. that is their official statement. that belie what is we're seeing in the video i have to say, so we are going to continue to try
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and vet these comments, get more clarification, but once again it is an intense highrise fire that has engulfed the address hotel. brian? >> those are very unusual comments. >> they are. >> from the dubai government. >> we're going to try to get some -- >> the fire has not spread to the inside of the hotel. interest anybody watching our live feed and the video right now from al arabiya, it is a major fire in a major building in a very crowded area of what they call, quote, downtown. that's actually their term for the little regions, kind of like their times square or columbus circle in a way, sue. so i hope they're right. >> of course. >> the video to your point might belie otherwise. >> we'll keep you posted, brian. >> we'll take a quick break. more "power lunch" right after this.
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i'm late for an important function. compare.com. saving humanity from high insurance rates. it's gotten squarer. over the years. brighter. bigger. it's gotten thinner. even curvier. but what's next? for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. time now for our regular "power house" segment. we're headed to lovely tampa, florida. joining us andrew duncan of remax dynamic reality. first let's quickly run down some of the stats about your real estate market. the median sale price in tampa
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about $210,000. inventory about a 3.5 month supply and properties listed on the market for an average of 43 days. stats down. let's get to the real estate good stuff and go to your listings. your first listing, 2229 bel air road. $3,500 in taxes. three bedrooms, three baths. tell us more than the numbers on this home, andrew. >> in beautiful sunny tampa bay, florida, right now if you're looking for property from up north, this is a great option for you. it is gorgeously updated. it's on a half an acre lot which is pretty uncommon for our market to have that much land and just minutes from the beaches. this home has been completely remodeled from head to toe. beautiful upgraded kitchen, beautiful outdoor space. new flooring. basically everything in the house is brand new. it's a great bargain at $3.25. >> 2912 whittington place.
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taxes just under five grand. why would your xlints want to put their hard earned money into this address. >> this is one of our best neighborhoods and this home on a third of an acre, four bedroom, three bath, over 4,200 square feet, lots of upgrades as well. beautiful curb appeal and in a great area. other parts of the country this would be a multimillion dollar property but here it's a bargain at $595,000 and so many upgrades. a beautiful kitchen and a gorgeous pool and spa area outside to enjoy the sunny, 80 degree tampa weather. >> stop bragging about the weather. it's not been terrible here either. to the powerhouse of the week, 2305 lois avenue. $750,000. $7,500 in taxes. five beds. big dollars. why is this the power house of the week, andrew? >> south tampa is like tampa
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bay's beverly hills. it's our most prestigious neighborhood. it has great high school. plant high school is one of the best academic and athletic high schools in the country. it's a new her home in 2006. in florida we have a lot of 50-plus year old homes. lots of upgrades. beautiful cabinetry. great big lanai and location, location, location. >> andrew duncan, of remax, have a happy new year. >> thank you, brian. >> more "power lunch" in two minutes.
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as 2015 draws to a close, cnbc is breaking out the 2016 playbook looking at ways you can make money in the coming year. this hour, we're examining the ipo pipeline in 2016. here is dominic chu. >> '15 generated some of the most highly anticipated public offers of stock we've seen in years and 2016 could yield a lot more of the same but it may come with the same volatility that we've seen over the last year. expect fewer ipos in 2016 and
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less cash raised by the ones that do. in the past the ipo market has mirrored the overall stock market, so with uncertainty about the domestic and global economy looming, the headwinds for ipos could be significant in 2016. ipo investors are going to demand more attractive pricing. the overall demand for initial public offerings may be softening from higher levels we've seen in the last couple of years. and that means investors will be looking for relative bargains. so look for bankers and companies to set ipo price targets and ranges at more value oriented levels to get more demand. uber and airbnb will be the most highly anticipated ipos. we've heard all about the multibillion dollar valuations for sharing companies like uber and airbnb. they will be among a handful of offerings with the power to generate investor demand regardless of market conditions.
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>> all right. so dom chu with a really interesting playbook, kayla. the conditional fofinancial wors your world. anything you would have said differently? >> i think there are going to be some questions about whether these big unicorns need to go public because they end up having hundreds of shareholders. they go up against that rule and the jobs act you can't have more than 500 shareholders. we though they love being private. they don't necessarily want the scrutiny of being a public company. the question is how long, brian, they can afford to stay that way. >> one of my predictions which is going up on the "power lunch" website later on today is that if you took twitter, gopro, and what was my third one -- i can't remember. twitter, gopro and something else -- i wrote these myself, you can tell. only one of them would be public because they want to escape the public eye. do you think that gopro, twitter, or the third mysterious
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company could vanish, go private, get bought? >> the question is at what price because silicon valley and tech companies don't like to make acquisition of companies that aren't growing. you could argue that twitter, gopro -- >> fitbit was my third. my brain needs a workout. >> i was going to say no one but you can know what that third one is. fitbit is growing and potentially turned in a very solid holiday quarter by the look of its popularity in the app store but i don't think anyone wants to buy a falling knife. it twitter and gopro can't continue growing, i don't think there's anyone that would want to be the owner of those companies. >> and i don't mean it -- when i predicted it in the predictions, i didn't say something bad will happen. i think if you're twitter every quarter because you're public you have to have people critical of your active user growth or lack thereof and all these other metrics, and maybe sometimes you just want to go back private, get bought out by somebody bigger so you can kind of, as michael dell would have i guess said, grow in peace.
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>> exactly. well, i think we can all agree that the critics will continue to be very loud, stomp their feet where these companies are concerned. >> i'm sorry to interrupt you. we have more breaking news about that fire in dubai with sue here herera. >> thank you very much. the fire at the hotel appears to be ebbing a little bit. this was earlier. this was the video earlier from either associated press or reuters. those are the official feeds that we've been taking, but a civil defense official is now being backed up by the official pr agency saying there have been no injuries from the fire which had engulfed the address hotel in downtown dubai. the civil defense official basically saying there are no injuries. they do still plan to go through with the fireworks display which will take place at midnight their time. three separate fireworks displays, 1.6 tons of fireworks will be going off apparently at midnight dubai time, but it does appear from the pictures that
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we're starting to see that maybe the fire is ebbing just a little bit, but as you can see, brian, and as we've been commenting together, it burned very hot. there's still debris raining down, brian. >> yeah. sue, to your point about it ebbing, the fire has been burning for the better part of two hours. >> exactly. >> you know, i see the firefighters are there. we're not seeing -- although it is dark. we're not seeing really many of the fire hoses you would normally see around an area like this. if the fire is ebbing, one wonders if simply because the hotel is burning itself out. it's been burning hot and long -- >> for some time. >> -- for a couple hours now. we're joined by helima kroft. she let me know she's stayed in it. i've been in the mall under it. tell us what you know about just this area from a tourist perspective. >> it's a main tourist and it's the main commercial heart of dubai. >> this is where people go when there's a celebration. >> for celebrations, they have
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the big water fountain display but also a lot of investment banks have offices right in this area. so it's the heart of commerce in dubai. >> and the road -- go back to that map if we can, because the circular road you see, the burj khalifa, you can see surrounded maybe thankfully by a manmade lake. the mall on your right is one of if not the biggest malls in the world. the address hotel, there's an underground tunnel that goes from the hotel to the mall, but that is king mohammed bin rashe rasheed boulevard that goes around it. it's the highest end area of -- i guess the way i put it to somebody here, if you're looking at sort of where people go, it would be sort of the time warner center, the columbus circle area of dubai. >> and i would argue of all of the middle east. dubai is a center of commerce for the middle east now. this is a huge incident to have right now. >> it really is. let's move on. it's about 2:01 on wall street, folks.
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8:01 tomorrow morning in auckland, new zealand. good morning if you're watching there. stocks down for what is likely to be the dow's first down year since 2008 and according to our friend greg zuckerman at the "wall street journal" the first down year for the dow, oil, and gold since 1984, the launch of the first apple mcintosh. i'm brian sullivan. melissa lee is back at the nasdaq for you today. let's begin with oil and oil stocks. but this is maybe one of the few bright spots in the market and with all due respect to quentin tarantino's new movie we're going to call this rare group the grateful eight because of the 169 nonrefinery oil and gas stocks that i track on a daily basis, just eight, eight are higher this year. that's 5%. so here they are. if you own these give yourself a pat on the back. the eight nonrefinery oil and gas names that went higher, new field exploration, valero energy partners, the mlp, not the
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refinery. diemo diamondback energy, erin energy, parsley energy, mcdermott, holly energy partners. congratulations to those eight companies for weathering the storm and to the investors who believed in them and invested in them. 8 of 169 nonrefinery stocks higher this year. wow. bad year. all right. the actual commodity oil is a little higher today. down still about 30% on the year and despite the rally in natural gas recently, we're still down big, about 17% on the year. and an interesting trend emerging in energy. corporate insiders buying energy stocks over the past few months. roberto friedlander joining us. robbed roberto, happy new year to you and your family and your friends. >> thank you very much. same to you and melissa. >> thank you. are energy executives putting their money where their mouth
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has been and buying shares of their own companies? >> ironically yes in the last couple weeks. you're seeing a big trend in the last four weeks starting to emerge. corporate insiders are viewed upon as the smart money, they're more informed about a company. they have turned around and been buying aggressively in the last three or four weeks. while this has been happening mutual fund selling has increased dramatically. last week lipper reported that mutual fund selling by the retail investor was about $10 billion a week for each of the weeks in the last month or so. so an incredible amount of selling by the retail investor while the corporate insiders are buying and you're seeing a lot of energy corporate insiders buying at the same time. the spread has whitened out so much, it's come to an extreme. the last three times we have seen such an extreme since the bull market began, call it since '09, the bull market resumed its uptrend every time it got that wide. something worth noting. >> roberto, i get what you're say being corporate insider
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buying. when you look at who is buying? are they smart buyers? i would imagine there could be a case made that these corporate insiders may have also legged into more stock of their company as oil continued to go down. >> very good point, and, you know, it's always arbitrary what's deemed smart money or not, right? but to a degree, yes. i always pay attention when insider buys going on because insiders sales can be according to a plan and you can't really make too much of that but insider buying in the oil and gas stocks, you take it with a grain of salt because, yes, there's nowhere for them to go, so in some of these stocks that we've seen buying in like xeo and hk, these are sub $2 stocks so point well taken. >> i'm guessing you get asked about a billion times a day, once at least by us every day, has the bottom been put in in oil? you're probably sick of the question but i'm asking you again. >> i think so, yes. i think the bottom was put in between $34 and $35.
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you know, keep in mind, there are a lot of headwinds going into 2016. we've got the kaudsaund saudis iranians, they're going to pump like the dickens. builds in cushing. there's not a lot of bright spots saying you have to rush in and buy this. i think the ceiling has come down where maybe you thought you could have a trading range from $35 to now $50, maybe more like $35 to $45, but that upside is there for sure, yes. >> roberto friedlander, happy new year once again. we'll see you next year. >> thank you much. now to a developing story that has the oil and financial markets a little nervous today. some tough talk from iran's president hassan rouhani ordering his defense minister to expand iran's missile program. this in response to america's threat to impose new sanctions over a missile test that iran conducted in october. rouhani tweeted earlier today, quote, in response to new u.s. sanctions planned against iran's ballistic missile program, we have ordered the defense
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minister to expedite that program. iranian media also says rouhani wrote to his defense minister that america is, quote, clearly still pursuing its hostile policies and illegal meddling. the armed forces need to quickly and significantly increase their missile capability, end quote. halima kroft joining us now. strong words from rouhani. >> very strong words considering he's the moderate, he's our man in tehran. i think that is about placating the hardliners. >> saying stuff for your own people. >> basically saying this country mean we're going to open up to the west. we're going to remain tough in the region but does it detail the nuclear deal and sanctions? probably not. they're taking down their centrifuges. they're weeks and months away from getting massive sanctions relief. >> i hear your point on the talk but it is accurate they did conduct a ballistic missile test in october which is kind of a
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single finger in the air to the peace deal. >> but here is what's interesting, brian. it violates u.n. security council sanctions in place in 2010. it doesn't violate the agreement that iran signed -- >> which is what they said. the deal we signed had nothing to do with defense capabilities. >> absolutely. and so what happens is even the white house would concede this, they're putting sanctions on the missile system, not disrupting the nuclear deal. >> so the bottom line is every barrel of oil coming onto the market from iran comes on. >> as long as they take down the centrifuges, make the modifications to the nuclear facilities. >> one of the predictions i have, i'm not going to make any predictions on oil myself because that's a fool's errand. almost everybody has been wrong but i do believe this. yes, the fundamentals suggest perhaps more downside but when i look at geopolitically saudi
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arabia, yemen, some of the stuff going on with iran, iraq, maybe libya, are we one significant headline away from a serious jump in the price of oil? i'm talking about ten bucks overnight if we get some big news out of the middle east? >> i think absolutely. the main upside risk for oil right now comes from geopolitics. when the iranians are testing those ballistic missiles, it horrifies the saudis. they have just launched an austerity budget. what if that leads to protest in the kingdom? so all these things. isis, despite what happened in ramadi, they are still active in the region. >> we have al qaeda making a come back. >> of course. >> the taliban making a come back. isis doing what it's been doing. saudi arabia and yemen going after each other. saudi arabia is nervous about iran and iran and iraq have hated each other for 100 years. the horrible situation in syria. worries about pipelines through turkey. are you shocked there's not more of a geopolitical bid already built into the price of oil? >> i have been so shocked this year considering how bad the middle east has been, how it's not at all reflected in terms of
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prices. so i do think if something happens, the market would be really surprised if you had a major incident. >> all right. well, we're going to show some video. i hate to go back to this. i know you came to talk about oil. this is the fire in dubai that's been burning. you have been there as well as i have been there. give us more about what you know about this area. just somebody who has been there and can give a little color about this region because the fire is still burning what looks to be despite the government comments out of control. >> this is the main tourist, it's the main commercial center in dubai. all the investment banks, all the international organizations and corporations, they have their offices right in this area and, again, this is where tourists go because you have the big manmade lake with the water display, the underground mall. this is the heart of the dubai story. >> 50 minutes from the turn of the new year and the fireworks celebrati celebration, the building is still burning out of control, it's a 63-story primarily a hotel.
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there are some residences in there. burning largely what looks to be out of control and the government is saying that the fireworks celebration, which as i understand it is supposed to be basically centered around this area, not like it's miles away on the other side of town, right here is going to continue to go on. sue herera has some more information on this fire that is burning in dubai. sue? >> yes, we have another official saying that they will, indeed, continue the celebrations. we also have some eyewitnesses being quoted by various news sources as saying that the fire seems to be ebbing a little bit. brian, it was interesting, i was watching our colleagues on msnbc, they were interviewing a fire official who has stayed in this particular hotel, and he pointed out that they have fireproof doors that automatically close, and if, indeed, this was his suggestion, that the fire started out in an outer hallway closer to the exterior of the hotel, that if those fireproof doors closed, the fire could still climb but it would climb up the -- closer
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to the exterior of the building which may gel with the government comment which both of you and i kind of looked askance at that the fire had not penetrated the hotel itself. we're working to confirm that and get more on those comments but it's an interesting perspective from someone who has actually stayed in that particular hotel who was there to actually look at their fire abatement program. >> hold on. so you have stayed at this hotel. did they say to you don't worry, we've got technology that no one has ever heard of that is doing to prevent anything bad -- >> i wasn't told that when i checked in, and from the standpoint of the government, i actually hope those statements they're making about the fire abating and the fireproof doors are true because it will be a major embarrassment tomorrow if it turns out not to have been the case. >> and just because we're not familiar with that technology or at least have not encountered it on things like this doesn't mean, sue, that it's not true.
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let's hope this is a new technology, a new fireproofing system that proves its worth. >> that could be. that was, again, from a fire official being interviewed on msnbc, a u.s. fire person who was going over to dubai to take a look at their fire abatement, and once again it's worth repeating the government says there are no injuries reported yet from this fire which if, indeed, that is the case, that would be extraordinary when you look at these pictures, but incredibly fortunate as well. >> listen, they're saying it, you have to assume it's true. i'm going to say something just from personal experience. you have to remember the dubai media is a closed media for the most part. there are some outside organizations, but largely this is a kingdom. the king is all powerful. this is a country that will -- does not want to be embarrassed, and we saw -- i witnessed firsthand during the financial crisis in dubai when i was there when you talk about certain things that are going on financially, there's a lot of denial even though you can see
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it very clearly from the financial. so i'm just saying to our viewers, the official word right now, i hope it's true, i hope it's accurate. the eyes of our viewers may say something different. >> we should note these are not live pictures. these are from earlier. so that fire looks extremely hot in this video, but these are not live. these are video pictures from earlier this afternoon. the fire has now been burning i think about two hours, so we are waiting for more live feeds to come in from either associated press and reuters, the two sources we have been using on this particular story. we don't have that right now, so we are showing you and we want to make sure we stress these are pictures from earlier this afternoon. brian? >> and let's hope that the fireproof door technology is working. that would be fantastic. the fire is out. everybody is safe. best case scenario heading into the new year, sue. we'll see you in a few minutes i'm sure. melissa. >> it's time for our new york stock exchange tradition when the traders sing on the floor.
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art cashin leading them in "wait till the sunshine." >> current and retired members of the new york stock exchange all get together across the street for lunch and come here to sing christmas carols. here to lead the singing, not him again but a man we've known for a long time, jimmy mcguire leading in the singing of "wait until the sun shines nelly." >> one, two, three. ♪ wait till the sunshines nelly ♪ ♪ as the clouds go drifting by ♪ we will be happy nelly ♪ ♪
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[ cheers and applause ] >> over 100 former members of the new york stock exchange here. former brokers singing "wait until the sun shines knenellie." when we come back, more on the dubai fire and whether we turn positive for the year. some suspension around that. "power lunch" continues in just a moment.
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we're always looking for ways to speed up your car insurance search. here's the latest. problem is, we haven't figured out how to reverse it. for now, just log on to compare.com... plug in some simple info and get up to 50 free quotes. choose the lowest and hit purchase. now...if you'll excuse me, i'm late for an important function. compare.com. saving humanity from high insurance rates. welcome back. i'm sue herera with breaking news on the massive fire engulfing the address hotel in
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dubai. these are videos -- this is video from earlier this afternoon. we now have a dubai person who says he's a dubai authority saying that the hotel has been evacuated and that now the blaze is 90% under control. that's a dubai authority according to routers. so they are saying now that the blaze is 90% under control. once again, we want to stress these are not live pictures. this is video from earlier when the fire was raging. it had consumed at that point at least 20 stories of the hotel which is in the downtown area of dubai. the address hotel. it is very close to the world's tallest skyscraper. as a matter of fact, if you take a look at that map, that will give you the proximity of the burj versus the address hotel. highly populated area as brian has been telling us. there is a mall, financial offices there as well. so earlier on it was a very hot fire. officials though now saying it is 90% under control, brian, and
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we are waiting for some translations on any possible injuries. we're just waiting to make sure that we have the translation on some of these comments correct and as soon as we get that translation, we will bring it to you live. back to you. >> all right, sue herera. thank you very much. not a whole lot of champagne popping on the last trading day of the year at least as far as traders go. we're down nearly 2% for the year now. the s&p negative for the year as well. john manley, chief equity strategist at wells fargo funds management, and, john, just before you came on you told me something really interesting. you said this is the first year ending in five where the dow or the s&p has fallen since -- >> 1875. >> grover cleveland was president. >> george custer was walking around last time it happened. >> since 1875. >> i looked at the numbers and it's very strange. >> people tonight at parties,
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did you know this is the first year since 1875. those are great stats. never mitigate the power of starting up a conversation. looking at the market, you also said first down year for the dow since 2008 but given everything that's gone on, it's actually kind of surprising we're not down more. does it also encourage you? >> i think it does. i've been pretty constructive but if i knew what was going to happen, i'm not so sure i would have been. when you have a flat year which is essentially what we have, what's more amazing that it didn't go up or didn't go down? i think when you look at the staccato beat of problems, it's amazing it didn't go down. >> does it give you confidence going into next year? >> it makes me think it's not overvalued. if it were overvalued sure had a lot of reasons to correct that valuation. >> is it undervalued? >> no, i think it's fairly valued but i think it can go to an overvaluation. my market is bull markets don't end until you put high
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valuations on high earnings. we have mediocre valuations on high earnings. it still could go up before it goes down. >> the overall the aergearnings comparison will be, i don't know how else to say this, crap because of oil. it will skew the whole number down x energy. do you think earnings are going to be okay? >> i think they will. part of it is energy. the thing about energy is those kind -- the multiples we put on energy earnings usually aren't as high as the multiples on things that are made from energy. what's happened so far is i think for a year the american consumer has -- just didn't believe it was going to stay down and i think as we go into 2016 -- >> we might see the benefit. we haven't yet really. >> we've got more money in our possibilities, what are pockets, what are we going to do with it? it will eventually work itself through. >> john manley with wells fargo. interesting stuff. great stats, good for parties
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tonight. have a happy new year. >> happy new year. >> take care. coming up, we're going to get the latest on the flooding in the midwest. also tell you about an impact it could have on oil. apple also falling today. it's going to be the biggest down year for apple in a couple years. in fact, the first one. much more on these markets as we continue on this final day of 2015. more "stay" per roll. more "sit" per roll. more "who's training who" per roll. bounty is two times more absorbent. so one roll of bounty can last longer than those bargain brands. so you get more "life" per roll. bounty. the long-lasting quicker picker upper. and try bounty napkins.
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check this out. this is the latest video out of missouri where record high water levels, massive flooding now disrupting train traffic in that state and illinois. union pacific says two sections of track in missouri and two in illinois are out of service because of rising waters. the city of st. louis says the flooding is causing problems with raw sewage in that city. thousands of homes are being threatened by the record high water levels. brian? >> that flooding might actually have an impact on the price of oil. here is why. enbridge, spectra energy, and kinder morgan have all had to temporarily shut down pipelines. that means oil may not be leaving the storage facility at cushing, oklahoma, where storage is at a record. if that fills up, you have to sell on the cheap. let's go back to jackie deangelis at the nymex -- we're
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going to go -- we'll get to jackie in a second. sue, my apologies. >> i'm just confirms from the dubai media office, they have just tweeted and nbc news has confirmed this is from the dubai media office that 14 people have been injured with minor injuries in the fire at this point. so minor injuries and it could have been during the evacuation process. we don't have clarity on that at this point, brian. they're also saying and it's worth repeating, they say the fire is 90% under control. this is video from earlier on, but it looks like if this is correct that they are 90% contained on what was a massive fire at the address hotel. back to you. >> all right. sue, thank you very much. now let's go to jackie deangelis at the nymex, and, jackie, what a year it's been. in a weird way it kind of makes me sad this is the final hit of the year but i guess we'll see you on monday. >> we'll see you monday and there's going to be a lot more volatility ahead, i can promise you that for sure. crude getting a bounce. looks like wti will finish over
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$37 a barrel. brent getting the bigger bounce and moving back over the wti contract today as well. the iran headlines are some of the reason for that but also we were expecting to see a little buying going into this long weekend and that's exactly what happened. remember, while crude gained a little ground and it's been all over the place this week, it's still down 30% on the year. that's a rough pill to swallow for crude oil. not enough to help the stock market either. some of the things we have to consider in 2016, supply/demand. the demand side is quiet so what's going to happen with supply. that will drive the golt around. also the fed is going to do. will we test those 2015 lows? it remains to be seen. some people still think that that's possible in january while the other side of the coin is saying, look, this is a crowded trade to the short side. wall street has gotten this wrong before, maybe they have it wrong this time. brian? >> if they got it wrong, we could see oil break in one way or another in a big way. we'll be going down to jackie
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every 30 seconds if that happens. jackie, have a help new year. >> same to you. >> thank you. take a very short break here. the dow down just a bit. we're watching that hotel fire in dubai. we're back with much more on both of those stories coming up.
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in an overall flat year for the markets, consumer focused companies have shined. well, not all, but many. what will next year bring? let's ask the "trading nation" team. eddie and craig. eddie, not all consumer companies did well. walmart was the worst performer in the dow but most did. do you believe the consumer will keep leading the way next year from an investment perspective? >> i do. i think there are a lot of really good consumer plays. companies like bed, bath, and beyond. i also like ross stores. i think they both look very good, but what we're going to see going forward as the fed hikes tra rates, we're going to see a growing divergence between the consumer stocks that are financed, more of the consumer staples i think will continue to rally on. that won't be a divide we'll see just yet but as the year goes
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on, i think that will be a theme that develops. >> okay. craig, you are charting the consumer discretionary etf. how does it look? >> the chart looks great. you know, we've been making a nice series of higher highs and higher lows over the last four and change years, but i think as you dig inside of the etf and you think about the overall consumer discretionary space, it's really been a divide between large caps, midcaps, and small caps throughout the year and from my perspective, it's still about the large cap consumer space. there's no trend change happening with these particular names. i'd point out the auto part industry group looks great, the athletic industry group looks great. these are some of the areas where we're focused in addition to hard line retailers still showing good performance and good trends inside of this space and, again, i would focus on consumer in 2016 but i would certainly be up cap in those names. >> maybe low gas prices will finally really stimulate spending. eddie, craig, thank you both very much. they both like the consumer
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discretionary space. for more "trading nation," head to tradingnation.cnbc.com. all right. coming up, we're going to have some shocking reports from belgium about what the police and military were apparently doing while brussels was under lockdown. trust me, you're going to want to hear this story. and if you thought 400 bucks a person for new year's eve at the olive garden was a lot, wait until you hear what scalpers are asking for. yes, people are scalping tickets for a dinner at olive garden, and as we head to break, here are the biggest decliners on the s&p 500. why not go to break with terrib terrible news. those are your worst performers. we have good news coming up though after the break. stick around. want bladder leak underwear that moves like you do?
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hello, everyone. i'm sue hererherera. this is from earlier today. you can see that fire burning very hot engulfing at least 20 stories of the address hotel and residence downtown dubai. officials are thousand saying that that fire is 90% contained and the dubai media office reporting 14 minor injuries. we're awaiting clarification on exactly what that means and an update if there are further injuries. the hotel was evacuated, as you can see, earlier today. once again a reminder that's video from earlier today from associated press. so at this point 90% contained. a very hot blaze. they still have debris raining down from the hotel according to reports but 14 minor injuries in this particular skyscraper fire in dubai, and once again they're
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repeating the fireworks will go on as scheduled in just a short while, brian and melissa. back to you. >> wow, good news. thank you very much. of course, i'm here in times square and outside they're busy getting ready for the big new year's eve celebration. this is probably the safest place in new york city right now. the crowds of police officers, law enforcement officials as they start to get ready. take a look at the crowds already forming. again, it's only 2:39 on the east coast. they've got about ten hours to go and yet they are gathered there to get ready to watch the ball drop, which by the way is right across the street from where i am standing right thousand. >> and will no doubt be all night. my predictions were terrible but i will make another prediction which will be 100% accurate. that walgreen's will be sold out of adult diapers. three hours. >> you are obsessed with adult diapers. i don't know why -- >> i'm just saying, those poor people. there's nowhere to go. >> we should note in times square there are a lot of
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celebrations under way at restaurants and they are absolutely capitalizing on their prime locations, selling premium tickets to tonight's festivities. olive garden sold tickets for tonight for 400 bucks a person. bubba gump, double that, $800. the ticket clowincludes open ba live deejay and unlimited food. but when something sells out, there will be scalpers, so can you imagine scalpers on craigslist, some olive gardens tickets or posted as much as $1,000. olive garden will offer bread sticks after originally saying there will not be any so maybe that $1,000 a person is worth the price. at applebee's across the way, tickets sell for $375 a person, and tonight i'll be interviewing applebee's grill and bar new york ceo. he will bring the feast that will be featured at applebee's tonight for the traders and i to
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sample on "fast money" at 5:00 eastern time. >> sounds delicious. brussels, the city, not the sprout, canceling its new year's celebration due to terror threats. new a new problem for the city. disturbing reports of what the police and military might have been doing while the city was on lockdown. kara pal mmieri is a reporter. thank you very much for joining us tonight. what is the state of your city right now? is there any celebration? >> it doesn't seem like there is much of a celebration. i know a lot of people are really disappointed because it draws about 100,000 people a year to see the fireworks, but apparently the mayor of brussels decided to cancel the event because it would just be -- it was too difficult to controlled situation if there was a terrorist attack. >> and what's been the reaction -- as somebody who lives there, what's the reaction been? is the reaction good move or,
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hey, let's not give into this? >> i think people were disappointed but at the same time i can't imagine if there was a terrorist attack planned on a certain location that people would want to go out of their way to be in that area, especially think about the fact that there are fireworks, lots of crackling and popping. even if there was some sort of attack, you might not know where it's coming from or the sounds. i think in general just knowing there was an attack planned for new year's eve, wint have gone out and i live very close to where they are lighting off the fireworks. >> very quickly here, tara, i don't know how else to say it because it's a family channel. apparently the cops were having an orgy while they were supposed to be rounding up terrorists. >> yes. yes. some very disappointing news out of brussels, especially when you had an entire city in panic under lockdown last month fearful of any sort of imminent attack and it just seemed that the cops were obviously a little blase about the situation. i actually remember walking
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around downtown brussels with chills, scared that something might happen, and seeing cops congregating around, chatting, holding shopping bags. actually one person was holding a shopping bag and he's being investigated for that. they seem to be too relaxed about the situation and so when i heard about this report, i'm not going to say i was very shocked. >> but apparently the orgy took place at a police station. >> right. and i think the excuse they gave was they were working long hours. >> how do you define work i guess is the whole basis of the article then. >> right. it was two women and eight men, so, yeah, it was shocking to say the least. >> listen, it's almost 9:00 there. go out, get off television, have a happy new year. even though the celebration is c canceled, go have a good time. thank you very much. >> thanks. >> investors not only counting
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down to new year's, bondholders are counting do you know to a default by puerto rico. shares fell sharply in yesterday's session. kate kelly is here with the latest on puerto rico's debt problems. kate? >> hey there, melissa. investors in both bonds and bond insurers were none too happy to hear yesterday that puerto rico would very likely default on even a small portion of the billion dollars it owes to creditors on monday with a deadline of midnight monday night. this time on bonds backed by taxes on rum sales as well as a small payment due on public financing corporation paper. although the all-important general obligation bonds will see their roughly $330 million in payments met, the stakes are ratcheting up for the fiscally embattled island whose governor has said he can't continue to pay creditors too much longer. restructuring talks are being held with holders of most of the dozen or more bonds in question but garcia padilla says his
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government is counting on assistance from the u.s. congress to offer some form of relief in the first quarter. that could take the form of municipal bankruptcy rights as puerto rico would probably prefer or could take the form of a bailout package although that doesn't seem to be a popular move among politicians or some of the involved parties. and the island's government has its own share of critics many of whom see monday's planned defaults as politically motivated. case in point is the payment of $120 million in christmas bonuses to government employees. that's a step that some people think surely, melissa, should have been skipped. >> all right. kate kelly, thanks so much for that. brian. >> all right. so the power city index. if a city were a stock, right, which one would have had the best year? well, we only compiled this here on "power lunch." it's 40 different metro areas. coming up, what is the single best city for the stock market this year? what city could say their companies did better than every other city or metro area in america? the answer is probably going to
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surprise you. we have it exclusively coming up on "power lunch" in just a couple minutes. stick around. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this.
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that's why i switched from u-verse to xfinity. now i can download my dvr recordings and take them anywhere. ready or not, here i come! (whispers) now hide-and-seek time can also be catch-up-on-my-shows time. here i come! can't find you anywhere! don't settle for u-verse. x1 from xfinity will change the way you experience tv. as we begin to close out the year, you too, by the way, let's look at the winners and losers of the power city index.
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what is the pcis? these are 40 different metro and city area stock indexes that we ourselves have built comprised of the 12 biggest market cap companies in 40 regions around the united states. we track them all year. so let us start with the three worst cities for the stock market in 2015 in terms of year-to-date return. the third worst, pittsburgh. the average return there among the 12 biggest companies is a loss of 12%. kansas city, close on the heels, that is down 14.7%. and the city with the worst performing stock market this year maybe no surprise, houston. down 16.3%. kinder morgan, conocophillips, apache, other big oil companies all down, dragging down the houston pci. houston, i love you, i will be there in a couple days, but you're the worst performing city for the stock market this year. now, who are the best cities for the stock market this year? let's end on a high note. coming in in third place,
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silicon valley. i put that out as a metro area. it's not just cities. it has a year-to-date return of 14.6%. ebay, facebook, netflix, all doing well. the the stock market, founded by the germans in 1901, san diego. 15.4% return for those 12 companies, biotech the king, and the top power city index, the highest return in all the land, the best city for the stock market this year is raleigh, north carolina. with a return on average of nearly 17%. really, biotech and cros, clinical research organizations, pra, health sciences, inc research holdings, sempra, another biotech, those and other companies powering up raleigh. congratulations, raleigh. a little clap for you, raleigh, north carolina, the best performing city for the stock market according to our power
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city indexes. maybe we will get down to raleigh, soon. i'm heading to cameron in a couple weeks now. >> director of 1/2 gant joining us now. tom, you are a consultant, you know the oil business well, you are a smart guy. how much real visibility do you think at this point anybody has into oil pricing at the moment. >> caller: -- >> i think there is still oversupply on the market, it's hard to go out too guard with forward forecasting. the clients we work with tend to think long-term. it comes down to survivors and those who have capital. those who can make it through this period and we still expect to see a lot of distress in 2016, will lead to a great deal of m&a activity. there are be a lot of transaction work this year so the visibility can be tactical but it's where long-term price right side and how the business
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models have driven cost owl of their structures. it's been very fast how it's fallen but very fast how quickly costs have been driven out of the business. >> that's the one thing i have talked to with all of these companies, is that, okay, the price of oil has come down but we are can you get costs out of our system. do you believe that the majority of oil companies are profitable at 35 bucks wti? >> short-term probably not, but, again, what we work with, with our clients, are going to be how they match the right-hand side of their balance sheet to commodity prices at any level. it's haves and have notes, there's $500 billion of cash on energy company balance sheets ready to go and another $100 billion in private capital firms we've met with in new york. that leads to a large buying spree. what we're looking at less than earnings, income statements and profitability is going to be the balance sheets and transaction activity in 2016, distress
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transaction activity and nondistress transaction activity. should be a bigger year in m&a than even 2015 was. >> when you say m&a, i mean, is this going to be distressed buying, tom? this is going to be the big boys who have been smart with their balance sheets and middle size companies that have been smart picking up discounts. >> it will be a mixture of both. consolidation and integration. consolidation means there are too many midstream companies, too many upstream and services company, there will be fewer. you will see that kind of activity, the big guys buying the smaller guys, but what's interesting is integration. we are seeing more and more of our clients look outside their segments, upstream companies buying midstream assets, refiners who have done well toying with production acquisitions and midstream acquisitions, plus if you look at duke piedmont and nexderra net you see power companies acquiring into natural gas. so it's going to be integration
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with the consolidation plays. >> all right. tom mcnulty. have a happy new year. thank you very much. speaking about houston and oil and gas, we are going to be live in houston on tuesday to talk about the impact not just on companies, but also home builders. banks, people, people losing their jobs by the way, restaurants. then we go off to miami for the goldman sachs energy conference, they have never had media there, at least tv, they are allowing cnbc in and we are going to have a bunch of ceos, marathon petroleum, diamond back, a couple others that we will be speaking to exclusively to give you the real deal on what is heading on oil, gas, refining in the new year. a big focus early next week. more "power lunch" coming up this year, we are not done yet. stay with us.
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welcome back, i'm sue herrera with more breaking news on the skyscraper fire in dubai, the address hotel and residence caught on fire about two and a half hours ago, it engulfed about 20 floors of the hotel. that estimate may go a little bit higher. the authorities now say that that skyscraper fire is 90% contained, that's according to a government source, and it does look -- a reminder this is video from earlier today. it does look as though when we look at some of the other pictures that have been posted, it does look as though that fire
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is ebbing a little bit, however, you can see the debris that rained down from that skyscraper earlier this afternoon. this is basically across the street -- about 1,000 yards from the baj hotel, which is the tallest skyscraper in the world and as a result of that people in the baj were tweeting about what they could see of the fire. now, authorities from dubai, the formal media department, if you will, is saying that the fire never penetrated the hotel, but rather was contained in the hallway on the 20th floor is where they say it started, however, the pictures kind of dee b belie that. it looked like that fire started lower than that but officials say it started on the 20th floor and engulfed one side of the hotel and residences. there you can see a vivid description of it in that video shot earlier today. they say that the fireworks will go on, we are less than two minutes from that at this point. that's a live picture -- we will
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show you a live picture -- there it is. dubai. that's the clock that they are projecting on one of the skyscrapers so show how much time we have doing until the fireworks. they say they will go through it. that's speculation out there that maybe that's the government trying to reassure people that things are not as bad as that video appears to show. so far a medic says about 60 injuries, the official tally is 14 minor injuries. i will bring you all into here and we can talk about that as soon as we get into the fireworks, i will toss it over to you. it does seem like they are going to go through with that, brian, melissa and sara and bill. >> sue, any word on what the cause of the blaze was? >> no. there has not been any official confirmation on what started the blaze. i was looking at skype video a couple minutes ago and i did see two explosions come from the bottom part of the hotel. that could be from gas lines or gas explosions. that's what people are speculating on, but there were two explosions at the base of
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the hotel. but once again, the government is retweeting that it is 90% contained. >> an amazing -- i mean, as bad as that fire looks, obviously -- or did at the height of the blaze, no injuries reported in all of that. they were successful in getting evacuees out and now we come down to the final few seconds before the celebration that was planned, a million people standing outside there to watch this celebration. 1.6 tons of fireworks set to go off as they celebrate the new year coming in in dubai. >> with the happy new year on the side of the world's most expensive hotel. >> right in the marina there in dubai. obviously is different -- >> guys, that's it for us on "power lunch." >> all right, brian, thanks very much. melissa, we will see you later on "fast money" as well tonight as we continue to watch for these fireworks to come off as scheduled despite the disruption that occurred two hours ago. >> it is midnight, hap

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