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tv   Power Lunch  CNBC  February 5, 2016 1:00pm-3:01pm EST

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i don't think there will be relief from earnings. if you look at the way the with days, they end up selling off the rest of the market. >> no data next week, all earnings. >> great weekend. enjoy the super bowl. "power lunch" begins now. and welcome to "power lunch." eye michelle caruso-cabrera with tyler mathisen and melissa lee. brian sullivan is out today. we have three big stories we're following for you at this hour. >> top of the list, the wall street sell-off. nasdaq getting creamed today. the tech index is down, about 2.5% right now. dow and s&p 500 falling hard. >> and then the jobs report. wages rise as unemployment falls. we'll hit the front lines of america's job market to find out, we'll hear from the people who are doing the hiring. >> and then oil outrage over the president's proposal to impose a $10 per barrel fee on every
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barrel that comes out of the ground here in the united states. supposedly it will be paid for by the oil companies, but you know how that works. we'll discuss later on. right now, we'll kick off with the markets because it is another major stock slide that we are seeing today. we have kate rogers standing by at the nasdaq and bob by sa pis the nyse. >> melissa said in the intro we're getting creamed here. potentially the lowest close here since october of 2014. big tech is what is weighing down the nasdaq since we're heavily weighted with tech companies. weak guidance from linked in and tab low software, that could be two losses in the tech space. so many of the momentum names that outperformed in 2015 are getting slammed. netflix, amazon, facebook, all among the biggest losers in the nasdaq 100. down around 5% or more. tesla and pay pal, two other
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losers, tesla down 7%. pay pal down a little more than 1. google down more than 2.5%. the russell 2000 down. the nasdaq biotech down 3% today. one bright spot, symantec reporting better than expected earnings, stock is up more than 3.5% today. back to you. >> meg, thank you very much. what is it eight of the nasdaq 100 are actually up on the day. that would mean 92 or down. let's go to the nyse where the average there is down as well. bob pisani is watching it all. >> you heard kate, the story with the tech names is there may be lower growth rates than expect to go forward and they have to bring the multiples down. that's a story playing out today. there is other weird things going on elsewhere. let me show you retail stocks. this is a completely different
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space. they're having a tough time. they're acting kind of like januarys with a terrible month, overall. it wasn't that bad. kohl's was not good yesterday. that affected a lot of the thinking of these companies. a lot of big names are down 3% to 5% today. and credit card names, visa and mastercard are notably weak today. mastercard, mc, should be mastercard there. both on the downside. and they're acting like the consumer slowing down a little bit. let me show you the travel names as well. maybe this is a little bit of concern about the zika virus overall. you see them down, but this has been around all week, that concern. these stocks are the weakest they have been in several days. also if you look at the reets, buy yield is up. some of the reits act like there
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is an eminent rate hike. i don't see it but that's what's going on. oil stocks are generally on the downside. we had hess with a big secondary offering. want to see how desperate they are, hess price is secondary. 10% below the price yesterday, and tyler and everybody, 30% below the price of their stock a year ago. they got to. that's the only way to raise money. can't go to the debt markets now. back to you. >> bob, thanks so much. more on the nasdaq side. james cakmak with us. we had tab low software talking about the sufficienter spe toug environment for its customers. and then others have given up all their post earnings gains. what are we see going on here? a broad base rerating of where we think growth should be coming from? >> sure, i think i would isolate
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linked in from the other f.a.n.g. stocks and other social stocks. with linked in, a rerating was warranted. the thesis does not hold. this is a company against sat with multiples of 20 to 40 ebitda because of the subscription visibility. we saw weaknesses in the model, inability to sustain the online self-service growth and the ability to drive new product growth really not as robust as we had thought. so essentially with linked in, the multiple being slashed in half. >> a nice way to -- let's go to the bright spot of the tech sector. good earnings from facebook and google. what happened to them? how do you explain this? it seems like investors are examining what they're paying for certain stocks. >> facebook and google i think should be viewed very favorably now. yes, it is being pressured, but the global macro, but when you think about spending in general, advertising has been 1% to 2%
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for history. and that's not something that is going to change. you think about the migration of dollars from analog to digital there is two companies that have the scale benefits and that's facebook and google. if they are underperforming relative to the market, that is an unwarranted scenario and we think that those are the only places that really dollars can continue to comfortably and confidently flow over the next year. >> and market is treating them that way, james. back to the core question, what if sentiment has shifted on these stocks and a fundamental way. that means municipali s multip compress, investors aren't willing to pay up for them like they used to. we have seen this in the past. you can't fight that tide in any way. >> multiples will compress. you have a company like google trading at 12 times next yoreea ebitda, that's the low end. facebook is a slight premium at
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15 times, but growing at twice the rate. i think multiples across the group will come down to that lower end of the historical range, ten times ebitda, but there are pockets of opportunity and right now don't think that the facebook and google moves we're seeing is unwarranted, but the linked in move warranted every cent of it. >> i'm looking at facebook down 6%. i'm also looking at amazon off about 5, almost 6%. why is that one, which is not an advertising company, unlike google and facebook, why is that one getting ahead? >> amazon, we also think is justified. this is a situation where the confidence and the cadence of investments and the upside potential has been diminished. at the same time, we have growing competition in the aws space, not to actually threaten at ws' position, but it see pricing pressure and pressuring margins lower. so that's one where the visibility has declined, we just don't know how much money will
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be spent and because of that, you know, the -- on a high multiple stock at 100 times earnings, you need that visibility. this market now misses and lack of visibility have no mercy. >> james, thank you. james cakmak. news alert from the oil patch. morgan brennan has the weekly rig count. >> that's right. so weekly rig count from baker hughes showing u.s. oil rig count down 31 over the past week to 467. this is the seventh straight week of weekly declines for the u.s. oil rig count. we're also down 673 from a year ago. that means that we have seen the rig count in the oil count in the u.s. drop by 60% over the past year. if you look at crude, west texas intermediate, it turned briefly positive, now trading up about a third. >> thank you very much, morgan. steve liesman is with us today to talk about the jobs report. we heard the president.
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you get to follow the president. >> pretty good report. one that i think people ought to get used to. the numbers we had north of 200,000, i think it is more of the aberration, this economy was probably more likely to produce jobs in the -- call it 1.25 to 1.75 than north of 200,000. the decline in the unemployment rate is interesting. more people come into the workforce, which is a good sign. maybe they came in because wages are a little higher. you had this real good pop in wages up 0.5%, which is one of the better ones we have seen. we haven't been able to put together two months of good jobs, wage growth, so looking closely at the february report. >> what does this tell us about whether or not we're headed into some downturn. >> so i think it probably bakes off the notion that we're contracting. i don't think this economy is heading for a contraction. i think the jobs number does a somewhat better job than gdp number in telling us where we're at on a immediate basis here.
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to the issue of the fed, though, i think if i'm stan fisher today, and i see a 4.9% unemployment rate and 0.5% rise in wages, i'm feeling pretty good about what i did in december. and i'm thinking, you know what, if the stars align, i would like to raise again in march, but they have to really be aligned. got to get another solid jobs report, increase in wages once again. and get this, volatility in the market to kind of calm down a little bit. >> what is your take on the market. when is your take on the market reaction today. i would have thought a bad number would be good news for the market because the fed, that would basically say, no way is the fed going to hike in march. >> well -- >> the market is down. >> the bad news is -- >> if you're telling me, i'm more likely to take my cue from you about what the market is trading on, but if you're telling me trading on the possibility of the fed being back in the game here, i think that's probably right. i know the fed. we did a story on this. they see the proper job growth number between 75 and 150, this is not a weak report to them. this is a report in line with
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the potential of the economy. but yet they see that number. the philips curve, the unemployment and inflation is not dead for janet yellen. >> if these numbers are at least modestly good, why are people so sour on the economy? why is the sentiment seemingly as bad? >> first of all, it is not, tyler. one thing that we find -- look at the consumer confidence numbers, is let's just take yourself out of your cnbc world, which i know is hard for us to do. we live and breathe this place, it was very interesting to see the recent consumer confidence numbers not pick up very much at all of the market decline. the average american is not basing his or her mood on the ups and downs of the stock market the way our friends are in the stock. >> they're looking at income, jobs, house values. >> in that order. house value the top there, being a big thing that determines it. the other thing that you find is that when people have work and have higher wages, tend to be more optimistic.
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the consumer confidence numbers held up. one thing we haven't seen, we have seen and felt all the negatives of lower oil prices. >> the anger that we observed -- the anger we observe on the campaign trail, for example, is merely reflecting the campaign trail, not reflecting the reality of america. >> without commenting politically. when some people say we had this disaster of an economy, i would get behind a weak economy, an economy weaker than potential, it is hard to get behind disaster. >> i heard -- i don't know if you heard the president's news conference now, the reporter asked him why does -- you look at the numbers, huge percentage of americans think we're on the wrong path. why do you think that? he said he is still blaming the contraction of 2008 and 2009, saying it is a hangover. >> i think there a piece of that. you see the piece in the savings rate out there, you see the piece in the willingness of people to stretch out and their unwillingness to go out and take on more debt. you see some of that.
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you also see the idea that this is a very difficult time for middle class people who have not seen wage gains. a lot of gains at the top. haven't had them necessarily in the middle. you also see the other thing the president was talking about, very true. these are changing times and nobody really feels good about that when they have that kind of uncertainty about their jobs and that's a big part of it. >> steve, thank you. still ahead, the big outrage over president obama's $10 a barrel oil tax. we'll debate it ahead. you'll hear from one five star fund manager who has been beating the market. how he does it, el tell us all about it. tons of red on the nasdaq 100. much more market coverage coming your way when "power lunch" returns. in new york state, we believe tomorrow starts today. all across the state the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. like in the hudson valley, with world class biotech.
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president obama drawing big heat for proposing a $10 per barrel tax on oil. part of his final budget proposal. the white house says the new revenues would fund clean transportation projects like high speed railways, autonomous cars and clean energy research. let's get to cnbc's eamon javers. >> the clean energy proposal, that's the important context for the $10 a barrel fee that the obama administration is proposing in their budget. they have a lot of spending, billions of dollars for transportation, autonomous cars, they need to come up with a way to pay for it. one way is the $10 per barrel fee. they say it will be paid for by the oil companies, phased in
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over five year and used to finance the billions of dollars of investment in infrastructure. beyond that, we don't have a lot of specifics about exactly what this proposal is going to look like. and whether or not it can get through congress at all as a different question. the timing, though, is interesting, a lot of eyebrows yesterday, here is what the president said just now about why he thinks that we ned to do this right now. >> it is right to do it now when gas prices are really low. and they will be low for quite some time to come, so it is not going to be a disruptive factor in terms of the economy. >> i can tell you that speaker of the house paul ryan's staff tweeted at me yesterday after i said on our air here that there is about zero chance of this passing in a republican controlled congress, and they said, eamon, we agree with you. >> who exactly would get tax? the major oil -- >> who pays it and when? >> he was talking about price per gallon. sounds like he wants to put it
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on the consumer. >> it is $10 per barrel, right. so the question is where does that tax actually get implemented in the process? upstream, downstream, where. the reporter asked the white house official on a conference call yesterday that question. is this at the well head, the pump, where does the tax apply? there was a weird moment on the conference call yesterday where they put the conference call on hold, which you don't often hear. >> never. >> and awkward pause and the announcer came on and said stand by, and they said it will not be at the well head that this tax will be paid. but we'll work with congress to work out the details on this. >> so they didn't know. they didn't know before anybody asked the question. >> looks like a lot of the fine print is still tbd. you use this in the plus column to counterbalance the spending you want to do in your budget. >> if you're on that conference call, got news is they probably won't have to worry about who is going to pay it because it ain't going to happen. >> exactly. >> tyler, your political
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analysis is dead on there, right? this is not going to happen, the republicans on the hill have said it is not going it happen. what is go on here, though, is the democrats and the obama administration are putting a marker out there in this debate about where they see the transportation going. it is legacy stuff for the president and his team. they think this is what the future should look like. and they're laying it all out there with not every bit of detail, but laying it all out there and people can debate it. >> thank you. let's bring in cnbc contributor jared bernstein, former chief economist and economic adviser to vice president joe biden. jared, jared, jared, i thought, what clear thinking economist are they possibly going to find to support this idea. you think this is a good idea ? >> sometimes they come up with the ideas to see michelle caruso-cabrera's face when she talks about them because it is incredulity. >> yes, it is. >> you had a good and rich discussion of this. my understanding, by the way, is
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that the fee would be on the oil companies, but the president did a little bit of tax analysis there, which i thought was quite well taken in the sense that he was talking not about the statutory incidents on the oil companies, but the actual incidents who pays the tax and you are right, that would be consumers at the pump. one thing that hasn't been stressed enough is that the idea phases in over five years. so given how low gas is at the pump, i think it is fair to argue that people may not notice it that much. here is the rational. i want to ask you two things. i want to have a straight conversation -- >> we're interviewing you, but go ahead. >> you have to believe the following two things to think this is a good idea. i do -- i would be interested in whether you do. one is that we should have a price on carbon. we need to put a price on carbon for environmental reasons for climate change reasons and, two, we have to have some way to support our infrastructure. right now it is based on a federal gas tax that hasn't changed in nominal turns since
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the early 1990s. >> why not raise the gas tax? >> it is closer to the users of the infrainfrastructure. >> you would never think of raising the gas tax 30%. this is -- right now, this be with a 30 or 33% increase just flat tax. >> i have argued many times, on this program, that increasing the gas tax makes sense. by the way, there is a tiny bit of bipartisan support for that, maybe more than for this. however, the idea here is they want to go beyond the gas tax and roads and bridges. they want to go into high speed rail, into innovative projects, autonomous cars. they're thinking broader. i think that's -- >> already incentivized. every check company is working on autonomous cars. you don't need to -- if they work, people will buy them, right? like john mccain said, $10 million prize for the person who comes up with the car battery that works. john mccain will be worth $100 million, a billion. >> look, that's a fair point.
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and one thing we do too much of is subsidizing things that will happen anyway. i will say back during the recovery act, when i was working for these folks, we found that especially in a tough economy, less so now, but especially in a tough economy, these kinds of incentives actually made a difference, especially when you're talking about wind, talking about sole, talking about certain technologies that actually do need a bit of a -- >> wind, solar already has the investment tax credit that was extended. so they got their own subsidy. in terms of the impact on the energy industry, i'm not going to sit here -- i'm not a -- i don't know, a pro oil kind of person, but we're talking about $30 a barrel right now. if you put a $10 a barrel tax on it, basically they have to make -- >> wait a second. we all agree that the incidents doesn't fall on the oil company, it falls on the consumer. you can't have it both ways there. i think the issue there is going
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to be how are consumers going to deal with higher gas prices. one thing we haven't talked about is that because they realize low income energy users will have a problem with this, the white house takes 15% of the revenue from this fee and rebates it in some form to low income. >> they don't either yet. >> jared. >> we spent three excellent minutes talking about something that is not going to happen. do you agree that it won't happen? >> yes. of course i do. i agree it won't happen. i think there is something to be said -- of course. but there is something to be said for setting the table. i do think that the next president, whoever he or she is, could make this be somewhat more of a reality depending who gets elected. i do think it is not unreasonable for them to stake out the priorities now. >> jared, thank you so much. one thing that happened during
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the news conference with the president is he said, and many believe and it is widely expected that gas prices are going to stay low for a long time. it is a bad sign. remember, when his press secretary said during the ukraine crisis, whatever you do, don't buy russian stocks. know what we have should have done? buy russian stocks. politicians don't get the market right. >> we spent four minutes talking about something that isn't going to happen. we're going to keep a close eye on gold prices as the final trades start to cross for the session and the week. metals five minutes away. 5:48. a super bowl pop quiz. how well does football know business and how well does business know football? jane wells tackling the burning questions for us. hi, jane. >> tyler, we change it up. not only do we ask the players about the economy, we ask those here in silicon valley when they know about football. give me your best cam newton dab when we come back. this just got interesting. so why pause to take a pill?
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♪ [ male announcer ] fedex® has solutions to enable global commerce that can help your company grow steadily and quickly. great job. (mandarin) ♪ cut it out. >>see you tomorrow. ♪ welcome back to "power lunch." the countdown on to this sunday's super bowl game between the carolina panthers and the broncos of denver. so ahead of the big game, we decided to pit the jocks against the nerds to find out how well football knows business and how well business knows football. jane wells is live in san francisco for us. hi, jane. >> down in santa clara in silicon valley. turnabout is fair play. not only did we ask the nfl players about the markets, by
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the way, you hear the plane coming in, the faa will be shutting the air space on sunday. we also went to palo alto during lunch time where silicon valley tech titans were brewing up deals and asked them about football. first of all the ballplayers. >> what is the price of oil? >> the price of oil? is this a quiz? >> last time under $30 a barrel. >> how much a barrel now? $30. >> wall street journal right there. >> about $30. >> you're absolutely right. >> who is janet yellen? >> no idea. >> janet yellen is -- sounds so familiar to me. >> next question. >> janet yellow. >> the fed director. >> yeah. nailed it. >> if you had a million dollars to invest in any company now, where would you put it? >> probably in -- i put it in real estate. >> chipotle. >> why? >> you have the e. coli scare, everyone runs away for a little
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bit, goes from $7.50 to $4.50 a sharks share, a great value . >> who is playing in the super bowl? >> denver broncos, and who is the other guys? i don't even know. >> covering the super bowl, we're testing locals' knowledge. >> super pass. >> how many downs does a team get? >> three, normally they kick the fourth time. >> you are correct. >> show me your best cam newton dab imitation? >> who says omaha? >> that's yours. >> no. >> who says -- >> say it again? >> who says omaha? >> oh, gosh, i don't know. >> all right, they thought it was warren buffett. those two guys, one was a biotech executive and the other a venture capitalist having lunch, probably cooking up some billion dollar deal and i should have gotten their names. back to you. >> i give that to the ballplayers, actually. they had the better answers.
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the guy who said i put my money into chipotle because it is down so much. >> and had exact levels. >> i will say, evan mathis is a denver bronco and what city is chipotle based in. i would say 50% of them knew the price of oil. all but one of them knew the market was down. but i found only two guys out of the whole group that i interviewed who knew who janet yellen was, but my favorite was janet yellow? >> you had two guys on, and the guy on the left would say, yeah, what he said, over and over. do you think he knew the answers or just repeating what thor guy said? >> he was the punter. >> no, the two guys i had on earlier from the panthers, brad norton and j.j. jansen, they follow the markets. they give advice. one is the punter and one is the long snapper, they're joined at the hip already. they actually advise other panthers. i was interviewing some other panthers and they said, stop talking to me, go talk to those guys and they nailed it. they really did.
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>> jane, thank you very much. jane wells in santa clara, california. we're seeing some pretty big action in the bond market today. straight to rick santelli at the cme. >> it has been a very big week for closing yields. looking at intraday of 5s. up one basis point on the day. held at 120, very significant technical level. but if you open the chart up for just one week, we're still down nine basis points on the week after settling at 133, five year biggest mover on the curve year to date in terms of its yield drop. dollar index did not have a good week. we can talk about a lot of things at the dollar index gets influenced by. managed currency issues, but really the one glaring issue that cements it all together is the change of thought on how the fed may proceed. maybe today's data will change that. but as you look at the one week chart, this close to 100 a week ago. now flirting at 97.
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that is a large move and you can see the euro strength reflecting that as merismage e ismages. lqd, the investment grade is making new lows again as you see on thei year to date chart, bac to 13. the reason i bring this is, market maze have stabilized, but the issues of supply and debt, even investment grade, will be haunting us say traders i discuss this with for most of 2016. back to you. >> what do you think of the $10 fee per barrel of oil, quick? >> i don't know if you'll like my answer, but the difference between a socialist and bernie sanders, this shows you the difference is about as small as we're about to $100 on the dollar index a week ago. >> got it. still ahead, thanks, rick,
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one five star fund manager making big bets on insulin pens and maxinistas.
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welcome back to "power lunch." i'm tyler mathisen. stocks holding in the red on this friday as we slouch towards the super bowl weekend. nasdaq taking it to heart as it is down 2.6%. there you see the numbers. the dow industrials off about a little more than 1%. but the nasdaq off 2.6%, 119 points on the day. let's look at gold. a gain of 3.7% for the week. higher by 40 cents now at 1157 and change per ounce. to morgan brennan for a news update. >> here what's happening at this hour. president obama speaking at a white house news conference about an hour ago saying the low unemployment rate is starting to translate into bigger paychecks.
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>> past six months, wages have grown at their fastest rate since the crisis. and the policies that i'll push this year are designed to give workers even more leverage to earn raises and promotions. >> the department of health and human services says nearly 13 million people signed up for health insurance ahead of the january 31st deadline. that's 1 million more than in 2015 and the agency says the number of enrollees exceeded expectations. draft kings is going international. the online fantasy sports site announcing its official launch into the united kingdom market. this as the new york attorney general tries to shut it down and accusing it of being an illegal sports betting operation. surveillance footage capturing an 8-year-old boy committing an armed robbery at a florida grocery store, according to the clerk, the young boy walked right up to the counter, pulled out a gun and demand money. the clerk managed to take the gun away and another employee prevented the boy from escaping. that's a cnbc news update at this hour. back over to you.
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>> that's pretty horrible. february getting off to a really tough note with the major averages on pace for a down week. look at the nasdaq, off 5% for the week. how do you protect your portfolio? joining us, gina martin adams at wells fargo securities and eric shownsteen of the morning star five star rated jensen quality growth fund, it has outperformed the s&p 500 so far this year. january was bad. we thought february might get better. and look at what's going on with the nasdaq today, it is back to being off 10% in the last month. in correction territory. what do you do here? you think there is more to come? >> you know, i do think technicals are pretty rough looking for the s&p 500. and the markets at large. so i think depending on your time horizon, i would have to give an answer depending on time horizon. in the short run, we are prepared for more downside on the index, but keeping that in mind, we think that these short
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term corrections are probably presenting buying opportunities for the longer term because we are starting to reach levels where valuation is appearing a little bit more attractive, particularly relative to the bond market, which rallied pretty hard over the last month, and cyclical sectors in the s&p 500 start to look a lot better. even though the nasdaq has underperformed and tech stocks have gotten hit here, tech remains one of our favorite areas of opportunity on the index when you look out 12 months and consider the broader landscape. >> how concerned are you about, for instance, what tab low software says about the soft environment for business spending? how concerned are you about linked in can be perhaps categorized as an individual store, but directionally the huge miss and linked in, your favorite sector is technology and specifically internet, specifically business software and services. how much are these bellwethers for you? >> there are other bellwethers in the group as well. the other bellwethers performed
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fairly well this earning ining. while i'm paying attention to more recent news and information, when you look at the group as a whole, it still has better fundamentals than the rest of good sensitive technology groups or the commodities sensitive rates, sensitive areas of the s&p 500. a lot of this is relative, certainly broadly we're experiencing something of a slowdown in economic growth and a lot of financial market volatility. when you take it as a whole, earnings vision momentum is better. tech was the only sector in the s&p 500 to actually post an expansion in operating margin in the second half of last year. and we're not really paying attention to that in terms of valuations. so i want to sort of take it -- take a step back and look at this from a broader view. >> your fund and your shop is known as the place where i can get good growth, but at a little
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less volatility. a little less risk than a traditional growth fund might deliver. a smoother ride. how do you do that and what are some representative stocks that help you do that? >> well, certainly, i think one of the things that benefits the idea that you were just discussing about a smoother ride really is part of our emphasis has been on this idea of a quality company. i think as the environment now predicates thinking about companies that truly have strong fundamental profiles, and if they have fundamental profiles that are strong, and they have consistency to the ability to grow earnings, grow revenues, especially in a difficult environment, like we're in, that can offer a bit of a smoother ride because they are less volatile than the overall markets, which is certainly something we have always positioned the fund to be is hopefully less volatile than the overall markets because of the
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consistency and so you start thinking about businesses with good characteristics, becton dickinson where it is needles and syringes, diagnostic tests basic to the health care concept or somebody like a tjx where, you know, consumers are still pressured regardless of whether there is wage growth in the jobs report, consumers are still feeling pressure and so an off price retailer can still offer really nice values for those that want to continue to spend and tjx has been a company that has been very, very consistent over the years. i think that's the key is good fundamentals, more consistency, that can help smooth out the volatility that a lot of investors face right now. >> we were showing investors your performance relative to the s&p 500. smoother, still down, but not as bad as it could be. gina, thank you very much, eric, you too. go to powerlunch.cnbc.com to see what gina said is a good
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short-term play. that's powerlunch.cnbc.com. the market has gotten a look at the january jobs report and apparently not liking what it sees. the dow off triple digits at this hour. 215 now. so declines steepening. we'll talk jobs, growth, the changing economy, with our small business panel. you're watching cnbc, first in business worldwide. ♪ it was always just a hobby. something you did for fun. until the day it became something much more. and that is why you invest. the best returns aren't just measured in dollars. ♪ ashley bryant, you are a teacher of small children. that's right. i have read it is the hardest job in the world. that's why i'm here. can you... i can offer advice from the accumulated knowledge of other educators...
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at ally bank, no branches equals great rates. it's a fact. kind of like grandkids equals free tech support. oh, look at you, so great to see you! none of this works. come on in. sharing economy is a growing and increasingly significant part of america's labor force. uber driver is a prime example. on demand contracted workers also make up the backbone of wsi sports, leading sports apparel firm that makes 100% of its own items. joe weans started it 25 years ago in his garage and counts the nfl and olympic ski tim eam as clients. samper hamada, a veteran tech entrepreneur is ceo and founder.
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welcome to both of you. this is an interesting concept. how do you get people to get comfortable. i want to talk about your business and how it is doing, but get comfortable with bringing someone in their home who they probably don't know at all. >> right. it is a critical facet of the on demand and sharing economy. this issue of trust and safety. so we have a very rigorous screening process for bringing in massage therapists into the company and on to the network, and we do the same with consumers, by the way. we ask consumers to i.d. verify themselves into the app through driver's licenses or social security numbers. a therapist feels coming and the could consumer feels comfortable we're doing a good job screening these people. and we provide a bio and a picture. >> a background check on both? >> essentially, yes. an i.d. check. with therapists, they're licensed professionals. every states had a really thorough background check part of the licensing process.
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>> so, joel, how is business? >> great. we had an amazing year. the cold weather faithly ki lfi in. we're loving it. we're cranking in all kinds of fun cold weather underwear. >> cold weather underwear. s they that's a big growth area at this point? you started this 25 years ago. >> yeah. the markets change. you got to continually adapt to the market, and my store, i just started off in a farm town and had a few thousand buck and mom and gram said you start sewing, they basically said, hey, you know, you need to do something with the money other than buy a four wheel. here we are today. i'm committed to making everything in the usa and we have had some really great years and this takes time to gradually build this up and make it
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happen. >> this is not your first rodeo. you've invested in other companies before, started them up. how important -- how critical is this notion of a sharing economy, not having to have full time workers to getting these businesses off the ground. >> i'm glad you asked that question. i think there is a hidden story to this morning's jobs report. that's only looking at full time w2 workers and this gig economy, which it is called, is bringing a lot of new work into the economy. in fact, the labor department will be counting this work starting in may 2017 for the first time in a long time. and millennials are benefitting in the last, i think, five years, millennials working as independent contractors have gone from 2 million to 6 million people. so it is entrepreneurial work, it is work that is very flexible. it is really great for working moms. >> doesn't provide benefits, you're so evil because you don't provide benefits. politicians think you're table
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becau terrible because abuse of people is the way they describe some situations, like the poor uber drivers. >> i think the politicians are partially right and partially wrong on this one. there are a lot of workers who want the flexible work that comes with the gig economy. if you're a working mom and want to pick up your kid at 3:00, a single mom, working as a zeal massage therapist, for example you can pick up work while the kids are at school, in the evening when 21% of our orders are after 9:00 p.m. and many of these workers are making more money per hour on the platform than they would as w2 employees, even when you factor in benefits, taxes and other factors. and, you know, i think that the world is moving in that direction. >> joel, how about you? i assume you contract a lot of your work with companies that are in the sewing and manufacturing business. right? >> that's correct. >> do you have a lot of employees of your own or not? >> yes, in our factory we cut
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all the products out and decorate within our factory. all of the sewing is done cottage industry in the homes and one of the challenges we have faced is with all the production moving overseas, the equipment, the supplies, the support, you know, the manufacturing has, you know, has been difficult, but it has given us an opportunity to come up with new innovative ways to make products here in the u.s. >> very quickly, on a great scale of a to f, how would you grade the economy now. joel, you first? >> i think we're around that c to b. >> c to b? >> we're about a b. >> about a b. >> i think the future is very bright. >> better than average. joe weans, and samer hamadah, thank you very much. >> good luck with your masseuses. nasdaq at session lows, down 3%. dow and s&p 500 not far behind. getting set for final two hours of trade next.
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welcome back to "power lunch." all three major indices ticked lower here. we're at session lows now. look at the nasdaq down by more than 3% right now.
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big pressures on the nasdaq, the biotech index down by more than 4%, and shares of tesla. let's get to seema mody for the latest en that stock. >> tesla shares hitting session lows, down over 9%. ubs cutting tesla's price target by $30 to 160, the lowest on wall street, saying deliveries could be at the low end of guidance as its model production appears to be slower than expected. that warning sending shares to a two-year low today. the stock also down over 30% so far this year. keep in mind, tesla does report earnings after the bell next wednesday. that will be one to watch next week. >> thank you very much. seema mody, january 2014 is the last time we saw tesla stock trade at these lows. really concerned about execution, specifically on the model x, they have not delivered as many as many people had
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expected originally. >> sell a lot of cars for the valuation they were getting. >> yeah. >> you had to. >> sure. adam jonas of morgan stanley one of the biggest bulls on street cutting price target to 333, high, but saying even if the mass model car which a lot of people said tesla needed to achieve that volume growth, but that would be delayed by as much as one year into the market, a year's difference in terms of launching a car, that's humge when you have gm and other automakers with their own evs hipping at their heels. >> and lowing economy. >> and look at the range of the price target. 330 a share? and this is 160. quick break, we'll be right back. ♪ there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be.
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of their kind endorsed by aarp. remember - these plans let you apply all year round. so call today. because now's the perfect time to learn more. go long. stocks are sinking at this hour following the january jobs report. the nasdaq leading declines here, almost 3%. one of the top nasdaq losers, biotech. year to date, down about 25%, so we asked the question, is this
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the time to get into biotech. jerry castellini, he's bearish. you haven't been exactly a screaming bull on the sector going to 2016, expressed concerns about head winds, about the political environment. i think the last time we talked to you probably a few week ago on "power lunch." has anything changed? the declines are sharper. huge moves in a lot of the big large cap biotech stocks. are we experiencing a rerating that makes you more bearish than the last time we talked to you? >> i'm certainly reined in a lot. it would be difficult for anyone to be a screaming bull given the overall equity environment. and earnings season was a little bit tepid for the biotech names. i don't think while anyone is trying to call a specific bottom here, i think that when you look forward and look at some of the fundamentals in valuations on pes and discounted cash flows, we're getting more of a value
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scenario for some of the large cap biotechs. not trying to call a bottom. we're reining in some bullishness. i want to balance that defense very positive innovation and fundamentals that are still well in place. >> are you surprised when you walk if and take a look at your screens and it is down 5%, basically on no news. >> i would say a couple of things. the overall equity environment is extremely tough. a lot of growth names are in an unwind mode. not just biotech, but whether it is internet names, software names getting hit hard, you know, these biotechs can continue to fall given the higher beta. it is our job to take a look and step back and say pes, discounted cash flows, valuation levels and we try to find specific levels where people get very attractive. i think we're getting close. >> at what point do you say i got to trim the price targets?
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take a look at gilead, it seems like the shots keep getting fired at gilead and now mass ag looking at sea treatment has been priced, even though it has been on the market for over a year at this point. >> yeah, yeah. look, i think you're right. i don't think we're in the uber bullish period, we'll get this type of premium valuations we were getting in a better environment last year. but that's why we're saying if you look at the growth rates, they're better than the overall market environment. if you look at the pipelines, that's why we're in biotech. all those pipelines are still alive and kicking over the next year. and those things do provide and should get premium valuation versus the market. they're not getting that. they're trading at pharma multiples, market multiples. that probably isn't right. i think it is a little irrational. >> so, jerry, this is clearly a bear market for biotechs. at what point, you're in the big on them at all, you think they keep going down. at what point do you start to
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get interested in them. >> first of all, michael pointed out, these are high beta. you have to take out in a day like today simply because they're more volatile name. what we look at and what i think is more reflective of the situation these stocks find themselves in, they were very overowned, had gone five years in a nice channel and that upchannel included a rerating of valuation. now it is more clear to us that that valuation is going to go to a much lower level and we're going to fluctuate between now and when that level is found. couple of key thins. number one, no question that the earnings growth of these companies is slowing down, particularly in 2016. won't get' lot of help on the 2016 earnings. pipelines are no longer very close to adding something new to the market this year. and number three, we just can't -- you mentioned this -- this whole situation with government looking at pricing,
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we can't today put a value on something -- that type of interference because the way it would change the economic models for the companies is more profound than we can embrace. >> you think it is a real possibility when the attorney general starts talking about it, you hear bernie sanders and hillary clinton talk about these things? it is just not political rhetoric. you think it is a real possibility. >> i'm very, very concerned that the political rhetoric itself will get much more engaged. i don't see how any politician in this election cycle can defend those businesses with the comments you heard people make all year and i'm afraid it will get worse. there will probably be a point where it is completely priced in. but i just don't think it is here today. forgetting the overall cycle in the market itself, it is just a place that needs to find its new home. >> thank you very much. look at all three major
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indices, down triple digits today. major percentage moves, especially when it comes to the nasdaq. oil stocks taking a tumble. this as president obama proposes a new $10 a barrel tax to fund an ambition new clean energy transportation plan. you seat me the major averages. talk more about the oil tax. bob mcnally is founder and president and former energied aaa adviser to president bush. >> we never really talked about this too much. we wouldn't have done something like this, michelle. >> what do you make of it? we had on jared bernstein and a really vigorous discussion about how the administration doesn't even actually really believe that this is going to happen but wants to throw this out there as some kind of marker for what they stand for. >> i think it is clearly seen as legacy burnishing. this is all about the
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president's climate agenda and wanting to exit his last year, putting down markers on climate change. let me try and be a little constructive. there is a reasonable debate to have about perhaps raising the gasoline tax to fund infrastructure, highway improvement is crumbling. reasonable people, that's a reasonable discussion, where democrats and republicans can agree. and there is a reasonable discussion about shifting the tax burden from savings investment and work on to consumption including fossil fuels. that scenario where there is precarious, but reasonable people can debate but calling for a $10 a barrel, 25, 24 cent gasoline tax to pay for more solyndras, for infrastructure spending, which the government can't do effectively, to me is not good policy. it is not good economics. and for the democrats, it is not good politics. >> so what about the idea of a gasoline tax of a few pennies that would go to improve
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bridges, roads, tunnels, et cetera. >> you know, i think that's a lot more reasonable than what congress did, to sell off strategic petroleum crude to pay for the highway trust fund. selling off our reserve against disruptions and so forth was irresponsible. would have been much more responsible to ask the user of the roads to pay a little more, to fill the potholes. i'll get excommunicated from the republican party for saying that. but i think that's more responsible than -- >> that's why i asked. not to get you excommunicated, but you indicated that reasonable people including people on the gop side of the aisle could potentially go for that. >> sure. we drive on the roads. you use the roads, crumbling, got to pay to keep it up. >> there is already gas tax and they blow it. they blow it on junk, right? should we give them more money to blow? if they would spend the money on the roads, we might actually get the roads. i looked at what we spent had that highway bill once. we spent $6 million on a movie
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about the roads of alaska. we built airports in the middle of nowhere. it doesn't -- why do you want to gift people more money? they blow it every time. >> what gives me hope is that with paul ryan at the head of the house and mitch mcconnell and republican congress, i'm pretty sure they can find a way to reform the highway trust fund spending, perhaps allocate it more to states, take away the role of the unions. but i think there is a way to get more productivity, more efish efficiency for the dollar while increasing it. i think that's reasonable. we may decide with the existing money we can do it, fine. it is at least reasonable to consider higher user fee to keep the roads from -- the bridges from collapsing. this, today, $10 a barrel yesterday, is of a whole other type of thing. >> yeah. thanks, bob. i like this idea of a user fee. charge the people who are going to use the product. >> i think that feels fair to more people. if i use it, i'll pay for it. i wonder if he's from virginia.
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rapiddan is a big river in my home state. on your menu at this hour, the nasdaq leading the sell-off. we'll come in with laser focus on the stocks when jim cramer joins us with his take. jim also has a very special guest ahead of the super bowl. one of the most electrifying players in pro football today. the seahawks' richard sherman, one of the best, he's a big investor as well. and the real read on jobs. "power lunch" back in two minutes with jim. in new york state, we believe tomorrow starts today. all across the state the economy is growing, with creative new business incentives, the lowest taxes in decades, and university partnerships, attracting the talent and companies of tomorrow. like in utica, where a new kind of workforce is being trained. and in albany, the nanotechnology capital of the world. let us help grow your company's tomorrow, today at business.ny.gov
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welcome back. big sell-off on wall street. the industrials off 243. the real story today is nasdaq. off 144 points, more than 3%. joined now by jim cramer who has a tough assignment in san francisco ahead of super bowl 50 on sunday. jim, always great to get to spend a little time with you in the middle of the day, because you're on early and then on generally later. but i'm going to -- it has been a hard week, no fun watching the markets. i hope you're having fun out there for super bowl week. >> i will because i'll be with my daughter tomorrow in oregon, that's where the fun starts. this is all work this week, i met great people. but the market made it so challenging. i know what people own. not everybody owns verizon. a lot of people own the stocks that are going down. i'm always mindful until the week is over, you got to feel the pain because people feel it. >> let's get your overall thought about the market generally this week. what does it seem to be saying,
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expressing to you. the past couple of weeks, last two weeks of january, they were okay. but this week is going to clearly end badly. and particularly some of those big dividend players you mentioned verizon, we had the cut of a dividend from a big oil company earlier this week. what is going on? >> there is a rush to safety that still gives you yield. we at kimberly clarke, yesterday clorox went down, verizon. there say company called tab low date why and li data and linked in. people felt they were great growers. tab low data takes the growth down dramatically. people say, tab low, that's cloud. that's social. that's mobile. that's big data, that's analytics. you got the five things that everybody wants to be and suddenly those five things are horrible. but maybe it is tab low data that is horrible. i see sales force.com down 9. i remember not that long ago
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when nadal was going to buy sales force, the greatest growth. maybe tab low data is having it taken to by sales force. maybe there is overreaction, maybe linked in isn't suddenly worth half of what it was worth yesterday. but when these big firms that are momentum, when they start selling, the last price you get is the lowest price. because there is brokers out there saying, listen, i'm banging it out and i got you a much better price than the close. that's how it works now. i think there is an overreaction, but it will continue monday because stock like linked in hard to value, tab low data hard to value. sales force.com will be guilty until proven innocent as is that whole cohort including alphabet, which is almost selling now at the price of an average stock in the s&p 500. >> so in terms of the carnage coming out of tab low, it sounds like you like sales force.com, seeing others, though, taking on the chin today, splonk, workday,
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declines in amazon, the cloud business through aws. what is warranted and not warranted in your view? >> i think adobe and sales force are the -- have the strongest fundamentals. but let me be very clear. if you want to buy these stocks, you must understand the selling is not done most likely because adobe has already reported, sales force hasn't reported. there is a vacuum of information. the tab low data call was a surreal experience. the company actually acted as if nothing was wrong. it is very clear that either they are getting their share taken by it, would be by adobe and sales force or the industry is slowing down. i spent a lot of time with adobe and sales force, not getting the numbers, not the type of thing you can do. but getting a sense of business and the business is very strong. and i think therefore matched against the fundamentals outrageous. facebook, frankly, is now selling at a reasonable multiple in 2017 and google now alphabet is cheap. and i say it is cheap. we just got the quarters. we know most of those companies
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are doing well. but this market wants verizon, okay. this market wants union pacific. this market wants companies like pepsico that report. they next week. right now we're dealing with oil companies that are slashing dividends, high multiple companies from people an low multiples. linked in, you can make the case it only sells at 50 times earnings. if no growth guy buys it, no momentum guy buys it, you won't get a value guy coming in. >> verizon now at 4.5%, pretty amazing at this point, right? why do you think -- >> that's a growth stock masquerading as a fixed income stock. >> interesting. the yield is so strong. high at this point. what do you think the market is selli inin ining off so much att of the year. chinese currency, slowdown there, the fed tightening, is it
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all of that? >> i think it is -- i think it is a tremendous revulsion for the asset class we spent a lot of time talking about. there is a sense that it is just a crummy no good asset class. we want to try to -- we have lots of guys that come on and say, i like it here, i like it there, i think it is tainted. i think people feel other than if you get cash from a company, nothing really matters. let's look at 3m, gave you cash, $10 billion buyback and raised the dividend. that's what people want. they don't want the streams of ethereal revenue, don't trust them. they don't trust the oils, which have been great places for fixed income. they don't trust the high multiple stocks. a strike against these and the only place that people feel safe in -- income stocks and that has to do with the fact that people don't trust the stock market. i think that's okay. this stock market isn't worthy. >> i would love to get your thoughts. we had an interesting
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conversation about biotechs. you mentioned several of the ones, cloud, big data, social, and so forth that have been taken out to the wood shed. biotech in a bear market, what's going on? >> if you listen to the politicians, if you think the democrats are going to win, then you know that they're going to push very hard from both candidates. for medicare to negotiate. if medicare negotiates, the profit margins go away. if they push to be able to make it so you can't charge the greater return for what regeneron, those are political. the president wants to put a $10 charge on a barrel of oil. when jimmy carter wanted to do full profits, they were making full profits. almost everybody i deal with is losing money. he wants to tax windfall losses. i spoke to this fellow. jason, nice guy, i like the guy, but he said stuff to me that was
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so disrespectful, it took my breath away. i'm used to being disrespected on social media it was, like, come one, come all, but he said things that smack more of fantasy than fact about the oil industry and it was, like, wow, how much do you hate the guys? they're in fossil fuel, in the doghouse, but don't lump me in. don't want fossil fuels. i'm a solar guy. but he took it out on me. that's okay. some people have bad days. >> tax them when they're down. jim, you're going to stay put. >> giving me the business. giving me the business. >> give him the business. thinking of that -- >> giving me the business that guy. he seems like a nice guy, cocktail with him anytime he wants. i'll have to have a beer. >> we learn so much from you, jim, every single time. when we come back, we'll learn more. because jim will be joined by one of my favorite players in the nfl, one of my son's favorite players, richard
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sherman of the seahawks. and tonight on "mad money", look who will be there, kevin plank of under armour, lowell mcadam of verizon, mark fields of ford and michael rapino of live nation. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
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share of netflix down by 8.5%. intraday levels we have not seen since may of 2015. keep in mind, this is a stock down a whopping 28% a year to date. back to jim cramer in san francisco. what do you make of netflix's huge decline in 2016? >> well, i mean, look, this is a market that is decided, we have to put a price on the multiple on everything. a market that says netflix was a market capitalization story, subskripgs stosu subscription story. we'll revalue amazon. does this have what campbell's soup has. when you have that kind of thing, you figure netflix out, you can't. there is no price you would want netflix in that environment. but then i say, listen to the market opportunity, i'm not telling people to buy -- this is a falling knife, a concept stock. people hate concept stocks. they're out of favor. they're, like, you know, football team that has won two games. no one wants to touch a concept
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stock. >> so you would stay away from it. you're not making a call on its business. >> you have to wait until it bottoms. no sense. big institutions selling and i don't want to touch it. right now i get the sense, people want to annihilate the stocks. you got to be on defense here. i happen to have the greatest defensive player right now in football today if you don't mind. got r. sherman. i got richard sherman here. how are you doing? >> i'm great. >> good to see you. you come in at the right time. people playing defense, people are scared. you give messages of hope. and i want to give it -- i want you to spread your optimism for a moment because people are losing in the market. >> let's see. >> just be yourself. >> just be yourself. i mean, the time is darkest before the light. >> there you go. >> there you go. things always get better. you got to hit rock bottom before you reach the top. i think that's relevant in all
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facets of life. once you hit bottom, you have nowhere to go but up. >> i want people to wait until the stocks hit bottom. you have the mojo. you are mad money bro. >> yes, sir. >> you're wearing a shirt, pokemon. how did that -- how did you get affiliated with that? some people think it is a childhood -- for children. but you've been a fan since childhood. >> since i was a child. it is 20 years for them. it has been about 19, 18 for me. and that's how i got involved with it. i choose only brands with mean something to me. pokemon meant a lot to me as a kid. it kept my mind off things i had to deal with, just playing the video game, playing the trading card game, going out there, trading cards with friends. i think it is the one thing -- one thing that transcends race. transcends gender and age. and even at stanford, there are people that played it.
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people that were about it. >> okay. look, it is super bowl week. is there some -- look, you won two years ago. you came within one play of winning last year. how does it feel to not be playing? >> it doesn't feel that crazy. because you put everything you got into it. every year. so if you don't make it, you're at peace. you knew you gave everything you had, every play, and it just wasn't good enough this time. next year we'll figure it out, correct things and go at it again. you can't dwell on the past. you can't sit there and think about what ifs and it also work in the market with people sitting there thinking, what if i got in there, what if i didn't go in there, what if i didn't jump in there when i did. you can't live of your life what if, if you did, live with the decisions and let's move forward. >> i can't -- i see you, i support your charities, i want people to know dish wa-- blanke coverage, let's go there, talk
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about what you've done. >> we helped a lot of people. we helped homeless people, we helped kids from under privile e privileged families, we helped people at christmas, we adopted 26 because there was just this amazing family, couldn't help but help. and we just try to make the world a better place and our own unique way by giving school supplies, clothes, buying gifts. and just rying e in trying to m world as good as we can with what we have. >> i covered homicide as a reporter in l.a. you're from one tough neighborhood. is it getting better? >> it is trying. there are always individuals that try to take it back to what it used to be. but there are some awesome incredible people there, and they're doing their best to make a difference. and myself, i'm doing my best to give back and make sure those kids understand there is another way, there is -- there are things they can reach for. they can be ambitious, they can have aspirations, have goals of
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being anything they want to be. and i think we're getting ms through. >> message, if you give me a -- can you give me a mad money bro. come on. >> it is mad money, bro. see? >> toss it back to you guys, tough day. i think this man has courage. maybe he needs courage to get to some of the stocks. i say wait until you hit rock bottom and then move in. thank you so much, guys. >> jim, stick around for a minute. speaking of courage, richard sherman played that super bowl last year with an arm that looked like it was about to fall off. hurt it in a prior game. who do you have on the big show tonight, a good lineup? >> well, i've got mark fields from ford, i got lowell mcadam, verizon is cooler than you really realize. michael rapino, live nation, they are the ways you get a ticket to go to the game. still got richard here, he knows, kevin plank, one of the great competitors of our time, under armour, he comes to play
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today. even though frieze baltimohe's , cam newton picked out. sacked nine times by the philadelphia eagles, next week he told me cam newton will be the super bowl. i laughed. i was yelling timber. but he did. >> that's right. jim, the lineup tonight looks great. can't wait to see it. thanks for bringing such a famous star to "power lunch." tune into "mad money" tonight. at ally bank, no branches equals great rates. it's a fact. kind of like social media equals anti-social. hey guys, i want you to meet my fiancée, denise. hey. good to meet you dennis.
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welcome back to "power lunch." we have a sell-off on wall street led by the nasdaq. it is lower by more than 3% at this point. the dow jones industrial average lower by 1.5%. the s&p lower by 2%. oil, big part of the story today. closing for the day and crude is down almost 3% as well. down 8% for the week. let's get to morgan brennan with a news update with all that tough market data. >> chicago police say the six people found dead in a home on the city's south side appear to be members of the same family. they say they know the victim's identities but won't release them until a relative has formally identified them and
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autopsies have been completed. canada says it is lifting some sanctions against iran including a broad ban on financial services, imports and exports. it allows canadian companies to be more competitive against rivals doing business in iran. and disney saying that global ticket sales for "star wars" the force awakens are expected to reach, get this, $2 billion on saturday. the movie is the third highest grossing in hollywood history between avatar and titanic. the average ticket price for this year's super bowl is $4750, 50% lower than last year's game. the most expensive ticket, $23,400. at that price, i think i'm just going to stay home and watch the game from there. that's the cnbc news update at this hour. back to you. >> thank you, morgan. semiconductor stocks getting hard today. is there more pain to come? let's ask the trading nation team.
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eddie, it is interesting that semiconductor stocks have outperformed the nasdaq so far this year. what do you anticipate happening to the sector this year? >> it just doesn't look good for the semis now. they're being squeezed on all sides. you have a rough state of the pc market, but what is really troubling is the strong dollar and particularly the weak economy in asia. we saw a similar pattern during this q 4 earnings season where a lot of the q 4 earnings were pretty good. but the outlook from intel, from idti, from many companies like that was pretty weak. until that gets better, i think people ought to steer clear of the semiconductors. >> we had a decent print, what are the options market telling you at this point about the sector? >> the options market is agreeing very much with eddie in this particular case. the sentiment continues to be pretty bearish here. couple of names i threw out there, we're seeing at the money put buyers.
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this is not typically just portfolio protection or protection of one particular stock. more aggressive in bearish nature. names like texas instrument, which has already reported, invidia expected to report in the coming weeks. and arm holdings, interesting, because of its ripple play on apple, also seeing put buyers there. overall the sentiment within the semiconductor options continues to be bearish. >> in terms of looking for the term in semis, where do you look for that clue ? >> i say don't be a hero, don't try to pick the bottom. wait to see some of those trends pushing them lower, like asia, more strength in europe. not until i see that will i be willing to go back into the semis. >> eddie and stacy, thank you very much. for more, head to our website, tradingnation.cnbc.com. did you see the democratic debate last night? they barshed wall street and pharmaceutical companies. there were candidates on the
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right bashing corporate america too. has it all gone too far? we'll show you the tape, debate it next. and now the latest from tradingnation.cnbc.com and a word from our sponsor. >> there is an investing strategy called the dow theory that says the transportation stocks can confirm or deny a broader market trend. but it is important to realize that transportation stocks can be very vulnerable to oil prices and other influences. so be sure not to rely exclusively on this strategy when making an investing decision. vo: know you have a dedicated
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the extremes of each party, far left, far right, doing well this political season. on the right, senator ted cruz, on the left, bernie sanders. here is what they said this campaign season about the topic we cover. business in america. >> business model of wall street is fraught. >> wall street's doing great. today, the top 1% are at a higher share of our income than any year since 1928. >> the greed, the recklessness and illegal behavior of wall street drove this economy to its knees. >> big government benefits the wealthy, it benefits the
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lobbyists, benefits the giant corporations and the people who are getting hammered are small businesses. >> if you think washington is going great, that we just need someone to fiddle around the edges, then i'm not your guy. >> greed brought this country into the worst economic downturn since the great depression. unacceptability of one family, the walton family, of walmart, owning more wealth than the bottom 40%. >> goldman sachs was one of those companies whose illegal activity helped destroy our economy. >> the big banks were in the room with the democrats writing dodd frank. driving the little guys out of business wasn't an unintended consequence. it was the intended outcome. >> you've seen some of the presidential candidates, namely
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sanders and cruz bashing business. are they hurting the engines of economic growth? mark morial, ceo of national urban league and former mayor of new orleans and joe watkins, former white house aid to president george h.w. bush. gentlemen, there is a lot to talk about there. i'll let you go at it, beginning with you, joe. as i watched something like that, critics on the left, on the right, bashing wall street, big banks particularly, more diffusely income inequality or wealth inequality, what is going on here and what happened to the moderates in this country? >> well, it is never fair to broad bush any group of people, not fair to do it to businesses, be they large or small, not fair to do it to wall street. what is happening here is these candidates are speaking to the same numbers we talk about every month, the jobs department, we talk about the rate of unemployment, which happily is at 4.9%, a good number.
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but all the other indicators around that number are what these people talk to. the 6 million americans who are part time workers who are economic reasons to the more than 25% of the unemployed who are long term unemployed, to the 62.6 or 7% labor force participation rate, all the folks not participating in the labor market now. they're talking to those folks and to the fears of middle class people so that they'll get on board. if you're a republican and saying, let's make america great again, that presupposes the fact that people have lost ground. not where they used to be. if you're a democrat, and you're saying it is a rigged economy, you're talking it all those people who have been affected by the economy who aren't working and aren't working at least as well as they were a few years ago. >> mayor morial? >> politics is a contact sport. bashing, smashing, crashing, hard, sharp rhetoric is part of
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democracy. what i prefer to focus on is the fact that income inequality, wage stagnation, a rising wealth gap, those are real issues insofar as they affect the average american and the average american family. i think what we're also seeing is that people want to see a vision and some concrete ideas on how this can be addressed. so while a campaign may be about finger pointing and blaming people, that's, of course, part of american politics. i think there is a group of people out there who wants to hear concrete proposals to address the fact that the american paycheck does not go as far as it went 20 years ago. that college students are carrying too much debt. >> what do you think about the fact that -- so we only played bernie sanders and ted cruz there. could have played hillary clinton too, the alleged front-runner. i'm told any day she'll be the front-runner. you listen to her last night, he
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had said to bernie, why are you so focused on one street on america. i go after the banks. i go after the pharmaceutical companies. i go after the oil companies. does any of that make the economy better and serve the issues that you're talking about? >> the issue really is whether big business and government should be accountable to the greater public interest. that's really the issue. and the sense that some americans feel that big business is not accountable to the public interest, and some americans feel that government is not accountable to the public interest. that's, i think, to a great extent what we hear. i want to hear ideas. i want to hear and the people that we represent in the urban league want to hear how the candidates will in fact address that. we may not hear that in the primary season. but i guarantee you that lots of voters are going to be ready and willing and wanting to hear that
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once the nominees are chosen and we get in a general election contest. >> i heard a lot of ideas, joe, putting people in jail, that was the idea i heard last night. >> again, not fair to scapegoat business. what you want to do if you're a president of the united states is you want to create the kind of atmosphere where businesses, especially small businesses, which employ so many americans, are able to thrive because if small businesses are thriving, they can hire more people. real simple. when you burnt small businesses with lots of regulation, overregulate them, punitive measures that make it difficult for them to do business, hire lawyers and accountants to do business, they can't hire new people, can't grow their businesses. >> let me say this, i talk to small business people, real small business people, they're not complaining about rules and regulations. their concern is access to debt. access to equity, access to sources of capital so that they
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can indeed build their businesses. that's what i hear. i don't hear -- i hear the concern about rules and regulations coming from large businesses, small businesses, it is about access to capital, and what we do need to hear from all of these candidates is a new way to provide capital, to small businesses. because the banks aren't lending. the sba isn't lending. all across the board, the main street businesses, the small family businesses, the businesses owned by people of color and women do not have access to capital and if we gave them access to capital, they will grow and create jobs. and i think that's the real issue with small business. >> mayor morial, one final question, you're from a state that knows about populism, former governor huey long who had many things written about him, he tapped into the anger of the little guy, right? >> he did. >> and so i guess my question for you is if the economy is as stable and working as well as
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the administration might want you all -- us all to believe, why are so many people seemingly so angry about it? >> i think because this is an overhang from the difficulty of the recession. the high unemployment, the foreclosures. while the economy may be getting better, the fact of the matter is that most americans deserve a pay increase. their wages have been flat. many people, we have far fewer homeowners particularly in urban communities than we had ten years ago. so balance sheets have not recovered. the after effect of this recession has left a scar, a scar on the personal balance sheets and minds. that's what we see. so it is better, but it isn't where it needs to be or where we all want it to be. >> marc, joe, thank you very much. >> thanks so much. i want to point out the chart in wti, if we pull up the intraday chart on that. in the past ten minutes or so,
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we have clung to session lows. we're down by as much as 3.4% on wti. we stabilized at just about a decline of 3% or 3077. tracking all the action here in this market sell-off when "power lunch" returns. trade trader group, they work all the time. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on 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 derivatives pricing model, honey? td ameritrade.
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dow jones industrial average lower by 1.5%. that's a decline of more than 200 points. the 200 points and s&p nearly 2% or 36 points, the nasdaq getting hit very hard, decline of more than 3% there, 140 points, you look at the s&p 500 sectors rng only two are in the green, barely. telecoms and utilities. from o'neill security live on the floor. kenny, what's going on? how much is related to the fact that oil is selling off today? that correlation back or is this something above and beyond? >> i think it is here for a while until we get that disconnect. there's always going to be a way to argue that the market is moving whichever way oil is going but today it's just more realization that the macro data is not nearly as strong as they like us to believe. in december when the fed raised
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rates, out in front because the economy was strong. for january, we've seen that is not so true. i think we've got this repricing of risk. i don't think you can blame it on one or the other. look at the momentum stocks, linkedin and data, they missed revenues -- >> throw it out of left field, hillary clinton sounded like she went far more to the left last night. is any of this sell-off related to the fact there's so much bashing of business, coming from both sides of the aisle? >> i actually think there is. none of that is in good for anybody. any time one opens up their mouths and threaten to go after whether it's a pharmaceutical, wall street, the banks, whatever, it creates angst and anxiety. i don't know what her issue was last night. shee trying to win the votes, i get it. but i don't think it's good for the country or good for the conversation and i certainly don't think it's good for market when we're in kind of a anxiety
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ridden angst market. >> surprising have been the industrials and even in today's sessions industrials are outperforming the broader markets. does this mean anything in terms of the market's mindset in the. >> i like industrials because in truth i think there is something going on in terms of the economy whether if it's the u.s. economy, global economy, it is getting better. i think people are starting to see that. there's value in these things because they have been so beaten up and that's what you're going to start to see. i like industrials overall because i do think they will be one of the leaders. >> do you have any ensight or sense of whose doing this selling? >> i've got to be honest with you, because my customers are institutional asset managers and for the most part on days like this, i'm a better buyer. people that are taking advantage
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of this weakness, it's curious to me, i don't know where they are coming from. but it's curious to see the way people are actually -- it's not that same sense of panic at all, we're down 250 pointsz on the dow and people would think it's a nutty thing, it's not, it's quiet in terms of panicky feeling. the truth is, i'm not really sure. you can say the sovereign wealth funds or whatever you want. i don't have my finger on the pulse on that answer, my questions -- i'm looking at opportunities to buy. >> which is very interesting to me. your questions are institutions and they are looking to buy. >> that's right. >> and this weakness is providing opportunity. it's very stock specific they are not with a paint brush trying to buy everything. it's very stock specific especially now, some names have gotten beaten up and taken advantage of that value. >> am i oversimplifying when i
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am saying whole world is assuming there would be a level of growth particularly in china and now there's not going to be and you have to rethink everything that you thought and readjust? >> that's exactly what you're seeing. there's a global repricing of risk going on, whether it's in europe or asia or it's here because people are now reformatting their models and putting in new data and rethinking what the future looks like and the models tell us, here's what fair value should be and that's what you're seeing going on. what's interesting, it's happening very orderly, some names for sure are getting absolutely destroyed. but others, it's just normal repricing, that's why it doesn't feel like panic to me and doesn't feel it's about to go over the edge. it just feels like a normal repricing. painful for sure but creating opportunities as well. >> kenny, we're going to leave it there. thanks forgiving us your input on what we're seeing in the markets today. right now we're just about out of session lows, s&p 500 down 2
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percentage points and nasdaq down 3.25% and dow down 256 points. it will be a wild final hour of trading here but "power lunch" is back in two. thank you, we'll call you. evening, film noir, smoke, atmosphere... bob... you're a young farmhand and e*trade is your cow. milk it. e*trade is all about seizing opportunity.
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where self-proclaimed ofinancial superstars , pitch you investment opportunities. i've got a fantastic deal for you- gold! with the right pool of investors, there's a lot of money to be made. but first, investors must ask the right questions and use the smartcheck challenge to make the right decisions. you're not even registered; i'm done with you! i can...i can... savvy investors check their financial pro's background by visiting smartcheck.gov welcome back to "power lunch." look at gold mineers up 2%, then sold off a bit and gold miners,
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all up between 4 and 8%. the boost is also helping shares of newmont mining and currently hitting session highs amid the broader market. if you look at the material sector, it's the on track to be the best performing sector for this week. >> we want to take a check on the s&p 500 versus oil. wti has tested levels we haven't seen for a while. we're down 3.4%. this is the correlation that really held for first 20 trading days. 97% correlated. take a look at the stocks we're watching under pressure, software coming out with disastrous report very soft spending environment, this is taken down its competitors and work day as well as sales force.com and really taking on the chin there and look at the high flyers we like to track, netflix, these are intraday
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levels we haven't seen since mid 2013. real radio happening right now. >> that's today, not -- >> brutal. >> trading like it's going out of business, literally. you don't see 44% decline in one day often. >> bad assumptions made by the stock. >> let's play the sound bite from president obama talking about his view of the u.s. economy. >> the basic proposition is that right now gas is 1.80 and gas prices are expected to be low for a while, foreseeable future. that overall can be a good thing for the economy. >> gas prices are going to be low for the foreseeable future. whenever i hear a politician talk about the markets in any way -- >> you don't think they can forecast correctly. >> no, no. they make an assumption.
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>> a few years ago they were forecasting they would be 150 and stay there forever and a lot of economists there by the way. we can always lose money on oil or make it. thanks for watching "power lunch". >> closing bell starts right now. >> hi, everybody, welcome to "the closing bell", i'm kelly evans. >> and i'm mike santoli. we're in front of the linkedin, the epicenter of the damage. big tech, big growth favorites in tech especially where the damage is being done. >> look at this. to see a company like linkedin down 45%, we've talked about tableau software and lion's gate is not the type of company that should be in the mix, down 35%.

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