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tv   Power Lunch  CNBC  October 10, 2016 1:00pm-3:01pm EDT

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they say they don't have to raise new funds in the fourth quarter. right. but they said in the filing in the s.e.c. filing last week, they may have to. what is the deal, jimmy? >> no doubt that elon musk is sincere in saying he won't have to raise capital. somehow circumstances often change in this company and i expect that in this case. >> clock ends at 13, remember that. >> i did it. >> "power lunch" starts now. i'm melissa lee. here's what's on the menu. a huge jump, instant reaction to the fresh nbc news/wall street journal poll showing hillary clinton's double digit lead over donald trump. the one tweet that has tesla investors and the stock buzzing now. and jack ma going all hollywood. we'll explain. "power lunch" starts right now. ♪ say hey, hey, hey >> happy columbus day. the nina, the pinta, and the santa maria trading higher. that would be the dow, the s&p
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and the nasdaq. the dow is up about 100 points. the nasdaq 100 hitting a new record high. your midcap names, jan bradys of the investing world, big standouts. energy stocks a big part of that, led higher by names like denver, resources, sm energy and energen. >> i'm michelle caruso-cabrera. cleanup efforts from north carolina to florida following hurricane matthew. 19 deaths have been reported here in the united states due to that storm. samsung suspending production of its galaxy note 7 phones following reports that they catch fire. oil prices are moving higher after vladimir putin said russia is ready to join opec's efforts to cap oil output. begin with politics and new polls showing that donald trump is in deepening trouble. john harwood live in washington with the numbers. this one is, what, nbc news and wall street journal, john? >> yes, this is a wall street journal nbc news national live
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interview telephone poll that was -- it is important for me to point this out, this is not reflecting anything from the debate. this was taken saturday and sunday before the debate, but after the release of that "access hollywood" tape which consumed the news of the weekend and caused so many republican elected officials to repudiate donald trump, asked him to leave the presidential race. so look at what happened in these numbers. first of all, in a four-way race, before this tape came out, our last poll in september had hillary clinton with a six-point lead, 43-37 in the two-way race. now, it is an 11-point lead, 46-35. that is a very large lead in presidential politics. in the two-way race, without gary johnson and jill stein, the lead is even bigger. it goes from seven points, 48-41 in september, to 14 points, 52-38 this weekend. now, we also saw that the
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democratic advantage in who voters want to control the congress more than doubled from 3 points in september to 7 points now. that's where republicans panicked over the weekend, they're still highly concerned and just have to wait and see whether more of them, because of either something that happened in the debate, or because of this fresh evidence of deepening trouble for them, that you're going to have more defection and more turmoil within the republican base. one additional note of caution, however, it is true that when you poll in the middle of a news event like this breaking "access hollywood" tape, you have the potential to exaggerate the impact of the effect. so it is possible that this is a temporary blip and the numbers could come back down, but certainly in this moment, it is creating a lot of fire among republicans. >> was this poll planned to go out this weekend, or was it reactive to the news of friday?
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>> i believe that we put the poll in the field saturday and sunday because of what happened friday night to try to measure the impact. >> but an important point there is that obviously there was a real magnification effect, i would think, over the weekend because of the nature of the news cycle. does the poll go into -- >> that's what i was saying. >> -- on to a state by state basis. there is the national race and there is -- but really you're looking at 50 different separate races. do we get that level of grand lair ty in this poll or not? >> absolutely not. it is smaller than our usual sample, 500 sample, slightly higher error margin than our usual polls. but there are a lot of state polls out there and everybody is going to be watching them. but, again, we have got a report this morning from the conference call that republican leaders had and you had the republican chairman of the house republican campaign committee telling members on his call, on the basis of his polling, that things are getting worse for
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republicans and we picked that up on a national basis. >> all right, thank you very much, john harwood. reporting from st. louis today. let's talk the election and your money. with us is ross, the head of global asset allocation for black rock. it is interesting because we definitely see sharp reactions in certain markets such as currency markets where the moves in the peso and the canadian dollar that were measurable. in terms of the broader stock market. not so much reaction, i'm wondering if you think it is because -- i don't want to say it doesn't mat, but doesn't matter as much on the day to day basis for the equity markets or if the 1.7ish percent rise we have seen does reflect the elections? >> well, i think that the improvement we see is more a function of better economic indicators. the thing about the election is it is not that it doesn't matter, not clear it is going to matter for the broader market. there are segments of the market, health care companies,
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energy companies, they think they will be impacted by the results of the election. but if you go back, you look at history, the occupant of the white house is not reliably driven the market and in addition, if we get the most likely outcome, which is probably somewhat of a continuation of the status quo, and you're still looking at a divided government, it may not have as much of an impact on the market, the broad level, as some suggested. >> you say impact on health care as well as energy, it is interesting because health care, it seems like both sides of the aisle are in favor of price controls to a certain extent, perhaps more regulation when it comes to energy. may be a trump win that may benefit the energy sector. how do you parse out the impact of either candidate on these lar sectors since you flagged them as the most impacted? >> health care is a really interesting example because even within health care, there are nuances. if you think about the pharma sector and biotech, they have both come under some pressure depending upon comments out of the candidates about drug
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pricing. the same time, if you believe that the election will result in the continuation of the affordable care act, that stands to benefit some service providers, some hospitals, so it is worth focusing on sectors, but within the secretary, expect some differentiation depending upon the nature of the business, and how washington affects their revenue and bottom line. >> ross, oil back above $51 a barrel. how important is energy's run? just sort of talked about the industry in general, but how important is oil's move to the overall market, if one of our viewers just owns the s&p etf, is this good news? >> i think it is neutral. it is probably helping to support the continuation of the ral rally and high yield. in january, the collapse in energy was one of the things that scared people about credit. certainly it is good for the oil companies, and very good for the u.s. based companies. where it might hurt is on the
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consumer side. one of the arguments for retail companies is you had this win fall from lower oil. we start to see it back up in gasoline, particularly at a time when wages are not ripping to the upside, that might put a little more downward pressure on retail stocks and perhaps some restaurants as well. >> ross, do you think either candidate has a particular impact on interest rates? >> well, certainly if you have hillary clinton winning, it is fair to assume there will be continuity at the fed. what is continuity at the fed? looks like more of the same, the fed is likely to go in december. but as we have been reminded again and again, this will be a very gradual and probably somewhat of a short tightening cycle which means that the terminal level you get to, when the fed stops raising rates, is going to be dramatically lower than the spin in previous cycles. >> all right, ross, we'll leave it there. thank you for your time. >> let's turn back to the political implications now, and with us is don peebles, chairman
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and ceo of the peebles corporation. always good to see you. i'm sure we'll get to who you thought won and lost the debate in a minute. but i thought that one of the interesting areas of conversation last night, an area with which of the tax code with which i'm sure you're familiar is a real estate developer has to do with mr. trump's use, maybe some would say aggressive use of net operating loss carry forwards. i don't want to bog down in the weeds here, but i'm curious what you think about his use of that tax provision, whether you draw any moral judgment about it, whether you've had to use it in your career, and how you feel about it. >> okay, well, look, first of all, there is no moral judgment here. that's the law. that's the tax code that we have today. that was the tax code in place back then when he took the losses. that tax code is designed to spur investment in businesses. so my businesses will lose money
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in certain types of entities of ours will lose money. if we couldn't offset that against the gains, we would be much less likely to take the risk. of course it is an appropriate deduction. i think that this narrative on that issue in particular is trying to take advantage of the lack of detail knowledge of the general public as a whole. but as a business person, i don't see anything wrong with it. i know most business people will -- and who wouldn't take advantage of being able to deduct an expense? the average american takes full advantage of any deduction they have as well. >> john, it is michelle here. you're a clinton supporter, right? >> no. i am an independent person right now. i would lean towards hillary clinton. but i have not made a decision to endorse either candidate. i was a barack obama supporter for both of his elections and continue to be one for him. but no, i am not -- i have not endorsed either candidate. >> to underline, you don't see
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anything then na taannefarious contacting procedure. >> he lost a huge amount of money. we got to rewind and think about what was happening to the country at that time. look, in the early 1990s, we had a banking crisis that brought down the banking industry, the savings and loan industry ended. and closed up from what we knew then to what it is today. we had a real estate crisis where values were plummeting and we had the federal government taking control of banks on an everyday basis. so there were huge losses. anyone in real estate suffered huge losses. >> did you have close to a billion dollar loss, don? >> i didn't. >> did you know anybody who has had one? >> well, look, donald trump apparently had one as well. i don't -- i think we're again focusing on the size. size is relative. if you're running a $20 billion business, and you lose a billion
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dollars, that's a 5% loss. if you run a million dollar business, and you lose $50,000, that's a 5% loss. so it has got to be relative here. i think that's the other thing. again, it is more focusing on the narrative, on the optics as opposed to the substance of it. the law of the land is he could deduct it and we should -- if people don't like it, change the tax code. >> please don't mistake me when i ask the question, was really because i was legitimately curious because you, as a real estate developer, have to be familiar with these tax provisions. i wasn't fishing for any particular answer. you gave met honest answer the way you feel. let me turn it a little bit differently there, does it in any way trouble you that an individual like mr. trump or someone else might go for many years and not pay any personal federal income tax as a result of the way the tax code is structured, that allows those business oriented net operating losses to flow through to their
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personal tax return? does it trouble you at all? >> no. >> i'm asking, not because i have a judgment of my own on it. >> the goal is to spur economic activity. and frankly the only economic activity we stimulate should not be taxes, it is job generation. it is income growth for individuals. it is spurring small businesses. it is building businesses and the like. so, no, we have to incentivize the private sector to take the risk. if you take risk and lose money and can't write it off against profitable enterprises, it just discourages people from making smart investments. that's common sense. >> i hate to use the words won or lost with the debate. there is so much nuance out there, right. it is win and lose is a statemestate of mind depending who you are. do you believe donald trump stopped the bleeding? do you think he held his ground enough last night to cease the decline in the polls that john harwood hit on about ten minutes ago? >> let me put it to you this
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way. had he had that performance in the first debate, this race would be a lot closer. i think he stopped the bleeding. i thought he finally overall, 90% of his presence on tv last night showed that he was at least remotely worthy of being on the stage to compete for the presidency of the united states. so i thought he did a far better job. if i were going to pick a winner of that, i would say he did do a better job in terms of getting his goals accomplished and talking to those voters who are still undecided. >> did he do a good enough job of explaining his use of the net operating losses as you did here? >> no, but i thought that the moderators were a bit one sided, to be candid with you. and, again, i'm predisposed to hillary clinton. but hillary can win this race without any help from the moderators. this is the second time now where the moderators don't give the opportunity for one
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candidate to answer more substanti substantively. i thought it was a bill unbalanced. setting wasn't good enough to do that. it is a more complicated question. right now, i'm talking to a business audience, and they get it. but the average american doesn't get it unless they're explained it, but the simple is that's the law of the land. >> don, thank you very much for your candor. we appreciate it. always good to hear from you. appreciate it. well, the nonverbal communication that has everybody talking today, we're going to take a closer look at both candidates' body language still ahead. first, one thing they did talk about was taxes. and a lot about where future revenues come from. here we go. i got a tax trivia for you, a test if you will on a monday. okay. what percent of households who report income of more than 200,000 a year also make less than 500,000 per year? is it 55%? 80%? 42%? or 65%. the answer on the other side of
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the break.
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we can't go back to the years of devastating cuts to public education. exactly why i urge you to vote yes on prop 55. prop 55 prevents $4 billion in new education cuts without raising taxes on anyone. and there's strict accountability in prop 55. with local control over school funding decisions.
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and mandatory annual audits guaranteeing the money goes directly to our classrooms. not to bureaucracy, not to administration. so vote yes on 55. because it helps our children thrive. here is the question we showed you before the break. tyler is out. he knows the answer. according to 2014 irs data, approximately 6.2 million homes reported income of more than $200,000 a year.
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so, what we asked you is this. what percent of those also reported income under 500? in other words, they made between 200 and 499,999 per year. >> 80. >> 80%. 94% of households making more than $200,000 reported income of under a million dollars a year. nobody is crying poverty here. 200 grand is a lot of money to make. we get that. the reason we're showing you this is to better understand the demographics of the group that continues to come up in conversation. hillary clinton last night referencing the 250. which is fine. but there is -- it seems like there is a financial obligations being put on this group and you can see from the irs data that most of the filers, 80% of them, are probably just two income professional households there, certainly not bill gates. we'll get more about that in a minute. first, let us bring in our friend steve liesman to separate fact from fiction from the tax talk.
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>> we'll talk about the middle income part of this. and we'll get back to this wealthy and the working wealthy that you bring up. there is a debate over taxes. it found a sliver of air time among the politics of personal destruction that dominated last night's meeting of the two presidential candidates. let's look at what was said and what it tells us about the candidates tax plans. >> we're cutting taxes for the middle class, and i will tell you we are cutting them big league for the middle class. and i will tell you, hillary clinton is raising your taxes, folks, look at me, she's raising your taxes, really high. and what that's going to do is a disaster for the country. >> so it is true. trump is proposing tax cuts for the middle class. however, it appears to be false that all the low and middle class will benefit. lilly batchhelder said 7.8 million will not see tax increases. some because trump would repeal personal tax exemptions, others because he would repeal head of
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household filing status. others would move up from lower to higher tax bracket under the three bracket plan. the trump campaign has not disputed this but said those families will be allowed to file under the old system, that has tax experts, i guess, counting the change they would get from a two-system tax filing status there. as for trump's claim that clinton proposes raising your taxes really high, this appears to mostly untrue if you consider the vast majority of americans. she will raise taxes on the wealthy and do so big time. in some cases quite substantially. she has said no one under 250,000 will see a tax increase. the tax policy standard did find that some people in the 90th percentile and below would see small increases but due to the changes in corporate taxes, not because of changes in income taxes. the middle income debate seems to right now favor clinton on this and partly because of the sort of complicated changes trump would make.
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>> the reason we brought up that data in part is not because we were trying to cry poverty for anybody like that. that's a lot of money. when we hear this group that the 1%, right, over 250, whatever, is going to fund this and fund that, i just wonder if there is enough people that are making enough to fund these things because we just saw 94% of the rich are under a million and you wonder if you raise taxes 5%, is that going to be enough revenue? that was the only point of that. >> that her spending -- you look at what she wants to spend money on, and people argue, there isn't enough money in that pile that she's going after and you'll have to go deeper. you have to create a new tax bracket. there is no tax bracket. >> my understanding is that the people who score these things on a static basis, not including any impacts on growth, do a pretty good job of knowing where the money is, and how much money there is, and at what tax break -- what tax break they will raise x revenue.
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so i understand what you're saying, brian. i think what your point is most valid is in this issue of how much of the burden should be born by people in this area, that you're talking about. i don't think there is a question -- >> if there is 4.9 million people making between 200 and 500 and you get an extra ten grand a year out of them, that will be -- what is the math on that? 50 billion -- >> the point is people do the math and do a good job at that math. >> the modeling -- >> where is the 1% of households begin? >> 1% expert here. >> it is around $400,000. brian makes an important point this way. we talk about 80% of those 200,000 plus make between 200 and 500. the bulk of income i bet is reversed where i bet 68% of the income is for those above a million dollars, very small group. if you look at where most of the gains of the past 20 years have gone, it is not the 1%.
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it is the .1%. the .1% has seen their share of national income nearly triple during that 20-year period. >> what is that .1%? >> fewer people, but more money. >> great question, those who make 8.5 million or more per year have gained the vast majority of the economic gains in the past 20 years. if you look at the bottom 99 of the 1%, the bottom of the 1%, they have been static in terms of their share. >> their wealth comes from income. these are probably two income households. doctor, lawyer, accountant, teacher, they're not making money because they sold a corporation 20 years ago. >> when we use these numbers for tax discussions like this, are we talking about income that is actually coming in the door or are we talking about taxable income, which is subject, obvious -- >> adjusted gross income. >> adjusted gross. >> a lot of that for the top is capital gains. i think what hillary's plan, what is interesting about it is
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we now have -- she has said there say difference between lebron james and his dentist, but they're in the same income tax bracket, there should be a difference. she's saying, if you're for higher taxes, more government, there is a $5 million cutoff, she would add an additional 4% income tax for those making $5 million or more. >> what is the biggest adjustment in adjustment? i remember one big one, called alimony, but the biggest adjustment i've had in my life. but you think about that and think about taxable incomes. my income on my w2 is one thing, gross income. my taxable income is something very, very different. >> this is reported income. that's what i gave. agi. >> not the agi. >> that's report -- people's report of their owning. >> the irs data. >> if you click through the website -- >> the other important point about hillary's plan, she would
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say, deduct -- forget about deductions, if you make moren this a million dollars, the buffett rule takes over. no one will pay less than 30% tax rate. that will probably hit charity, that will probably hit a lot of things that people currently do to lower their tax bill. >> on the marginal income above a million. >> right. >> robert, thank you very much. interesting conversation. up next, a guy who doesn't have these kinds of tax problems, really. jack ma, he's going all hollywood. we'll explain why he's going hollywood. plus, a bank walks away from a huge cash pile. it just happened. we'll tell you about the details.
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anticipate expectations... creating new ways to engage at every imaginable touch-point. it's a new day in retail, and together, we're building the store of the future. digital works for retail. let's talk about how digital works for your business. welcome back to "power lunch." i'm eamon javers in washington. a little more political drama to bring you up to speed on. you saw the conference call with paul ryan and house members earlier today. now, we have a reaction from donald trump on twitter, just about five minutes ago. donald trump tweeting out paul ryan should spend more time on balancing the budget, jobs and illegal immigration and not waste his time on fighting republican nominee. that's a tweet fro from @realdonaldtrump.
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paul ryan said members need to do what they need to do in their own individual races, that he will not continue to defend donald trump, he'll focus on maintaining republican majority in the house. that will be his campaign focus from here on out. also, giving some comments on that conference call that indicated that he was assuming now that hillary clinton would be the likely next president of the united states, and that republicans in the house need to defend against a hillary clinton agenda as president. we also have got some comments now from mike pence, the vice presidential pick for donald trump, who has been out on the campaign trail today, just said last night my running mate showed the american people what was in his heart, and then he fought back and turned the focus. i'm proud to stand with donald trump. that coming from the vice presidential running mate, mike pence. back over to you. >> thank you very much. so the republican party is at war with itself here. internal civil war. by the way, we have the rnc nevada chairwoman coming on the
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show and she says she is going to try to drive a campaign, if you're not voting for donald trump, we're not voting for you. it is getting really ugly as they start to focus on what is going on down ballot. >> back in 1996, the republicans in congress, during the dole and clinton election got to the same point, roughly the same juncture in the election. four weeks out. and they realized mr. dole was not going to win. and so they came and did what mr. ryan basically said, focus on -- i forget who the speaker was at the time, gingrich. >> how could you? >> that they were going to focus on the congressional races to hold on to the house at that time. it was basically a concession that they realized that mr. dole wasn't going to win. i'm not sure that's true this time, but who knows. everything is so different this time. >> it is weird. >> let's get to sue her err wer your news update. >> we're going to start with the pentagon, which says yeme meyem
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rebels fired missiles. rail service is trying to get back on track after a deadly train crash. as of this morning, eight out of 17 tracks were up and running, that station is a busy commuting hub into new york city and shut for nearly two weeks. and what is cuter than a polar bear cub? well, a polar bear cub playing in a pool of ice cubes, of course. this video is our first glimpse of 10-month-old nora at the oregon zoo. she'll make her public debut later this month. she just made her national debut. that's the news update this hour. >> if you're a polar bear, that is heaven right there. >> it is. it is. it is so darn cute. look at that. feels so good. >> going after the bud lights. all right, sue, thank you very
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much. >> you're welcome. jack ma going all hollywood. ma's alibaba teaming up with steven spielberg to distribute movies in china. the partnership, just the latest move by china into hollywood. china's dalian wonder group has been on a hollywood shopping spree, buying everything from amc to theater chain to its recent bid for dick clark productions. >> speaking of dalian, check out this headline from today's ft. ubs exited wanda deal over compliance. the ft says ubs was uncomfortable with the structure of a $4.4 billion deal to take one of the units private. i underline this because it is astounding for an investment banker to walk away from a big pile of money. which is what they would have gotten for doing this. what is it that they didn't -- you read the article, it suggests they were uncomfortable with the kyc laws, know your customer, where was the money coming from. but it is going to start to raise interesting questions as we see china do more and more in
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other parts of the world and have to deal with disclosure laws that are very different. >> maybe they don't know their customer. >> right. >> maybe they don't know. >> all right. >> that's deep. >> that is deep. >> the world is closely watching the race for the white house. is either candidate saying having an impact on global markets? that story is straight ahead. we're putting away acorns. you know, to show the importance of saving for the future. so you're sort of like a spokes person? more of a spokes metaphor. get organized at voya.com.
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green numbers in the markets now. let's look at the dow industrials up .6%. 109 points at 18350. the nasdaq at 5333, up abo about .75% there. and the s&p 500 up half a percent higher at 2165. some of the world's top economic thinkers and policymakers coming together at the conference on inclusive capitalism happening in new york city today. the goal is to help restore capitalism, regain public trust. john is senior managing director with black stone, joins us from the conference now. well known in financial circles. good to have you here, john. >> hello, hello. how are you? >> good. what is inclusive capitalism?
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>> well, before i answer the question, i just wanted to thank you for my having gone to bohdan college. i'm very grateful for the polar bears. that's our mascot and i'm really into polar bears so thank you. thank you, thank you. >> we were thinking of you. >> yes, exactly. >> yeah. well, you never have enough polar bears. so -- >> back to -- >> inclusive capitalism, this is a third year we had this discussion. this is the brain child of lynn rothchild, you had her on earlier today. and inclusive capitalism is trying to reach out, i'll give you my definition, a broad stake holder definition would be looking at all aspects of an economy, all aspects of a society or civilization. and making them all feel involved in the capitalist or the capital raising model.
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and that's obviously very important. you've got very much before you ask the question, you got very much what i would describe as the 1% here today, or the 1% of the 1% of the 1% here today. and, of course, we do need to talk to a broader group before we can really get our handle around what this will entail going forward. >> john, you don't have to convince me that capitalism is the economic model that lifts the most boats. but here's what's become very apparent as a result of this election. i firmly believe it was china's embrace of markets more and more over time, stumbled lately, but more and more over time that led to 400 million people in china emerging from poverty. 1 billion more to go. the 400 million people as they emerge from poverty, due to the rise of chinese manufacturing, left behind a lot of americans who made their living from manufacturing. and so while those 400 million
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people gained, the people here feel like they lost. what do you do about that? >> well, i think you grabbed the bull by the horns with that question. my focus on this is really starts with education k through 12 and introducing two more words here, skills, training, for young people, particularly people who have not gone to university and those who starred in corporations and this includes people in china teaching them skills. and retraining them as they age to embrace other types of things, whether they're in their 40s, 50s, 60s, which i think you know is very much the german model for the last 50 years. there is another thing we need to do, that is, you know, black stone has been big on this and steve swartzman is big on this, that's teaching young people or
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people around the world to become entrepreneurs. 50% of the workforce in america, 50% of the businesses in america, are in fact small businesses. >> john, great to have you. what i hear you saying is that individuals need to be armed with something that helps them on an individual level stay competitive, even in changing economies. that's super important. great to have you here, really appreciate it. >> thank you. yeah. >> elon musk's latest tweet has tesla investors all buzzed up right now. what did he say that's got everybody so fired up? we'll tell you next.
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elon musk is trying to tweet talk investors. how? is it working? tweet talk. let's bring in phil lebeau live from chicago with more. phil. are you going to tweet talk us? >> no. i am not. but this essentially comes down to a couple of tweets from elon
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musk over the weekend. and basically comes down to this. the first one that is getting a lot of attention, on wall street, is elon musk saying that essentially tesla and solar city will not be needing to do a capital raise in the fourth quarter as many people have been expecting. probably not first quarter either, which then brings up the question, well, is tesla going to have enough cash to get through the end of this year and then into next year. take a look at the numbers as of the end of the second quarter, it was sitting on $3.2 billion, we outlined some of the expenditures that tesla will face through the second half that we know of. we're still waiting on third quarter numbers. the cash cushion at the end of the third or fourth quarter is likely to be around $400 million. that's an estimate at this point. for tesla, the costs are known. they're increasing vehicle production, battery production with the giga factory. those are the expenditures over the next several quarters. also investing ahead of the launch of the model three. and that's expected to happen in
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the second half of next year. speaking of the model three, the next vehicle coming from tesla, another tweet from elon musk getting some attention is that there will be a new product that they will unveil from tesla next week. the key word here, product. doesn't mean it is a model. it could be an element of a vehicle, whether it is driver assistance system, whether it is some other type of product that goes along with tesla. but anytime elon musk says there is a new one unexpected by most, it is going to get a lot of attention. don't forget, tesla reports earnings later this month. the 26th of october. that's when we'll find out how they did in the third quarter. >> product can also equal software, phil? that's not that exciting. >> sure. >> okay. >> and melissa, to that point, there have been people who said whether is a product, they release -- you got to take these with a grain of salt until you know what they are. >> phil, stick with us.
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let's talk tesla with colin rush. great to have you with us. i want to ask about the product announcement. do you think it is going to be -- could it be a new car? >> no, we don't think so. with this sort of lead time, we think it is probably an incremental refinement of some of the existing products or evolution of what they have already offered to the market. they typically with a bigger product launch would do a very big media prep and plenty of lead time to make sure there was enough attention focused on a major announcement. we think this will be a minor announcement. >> let's get to what is moving the stock, that is the notion that tesla won't have to raise funds in the fourth quarter, even first quarter of next year. phil outlined in detail that it would leave the company with a $400 million cash cushion. is that enough? >> well, what we have seen them do is do some asset backed financing at solar city as well as with the tesla inventories,
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we think they'll continue to do that along with expanding the lease program with the model s and model x. as we go forward, that's going to ease their cash needs, but they will need to raise capital next year at the very latest to build out the cap x for the model three. >> tax credits are so important to this company. is there any political risk and i know you probably don't want to dive into the political world, but you do your analysis, is there any risk of any of the credits that really do help tesla right now going away under any scenario? >> we're happy to go into politics. it has been a cornerstone of our research franchise. and as we look at what is going on with solar city, certainly the solar tax credit in the u.s. are very much in stone through 2022. we're not concerned about that at all. in terms of the zero emissions vehicle credits, in general, you know, that's not part of our
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planning model for tesla, so it is not a concern for us as we model out the company going forward. it is nice to have in a bonus if it stays in tact where it is right now. >> colin this is phil lebeau. you outlined the fact you think they can conserve their cash to a certain extent for the remainder of this year and the first quarter, if they were as judicious as possible doing that, at some point you believe they will need to raise capital. when would you expect at the very furthest out where they would have to say, yes, we do need to go to the capital markets? >> it would be 2q. i think there would be prudence to raise capital sooner. having an extra cash cushion makes sense us to. i think stretching that out is partially just to allay some fears around the solar city acquisition and what that is going to do to the tesla balance sheet and i think the point that they get that done, i think we'll come back and hear something more from the tesla management team. >> colin, we'll leave it there. thanks so much.
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colin rush and to our own phil lebeau as well. >> still ahead -- >> someone with the temperament of donald trump is not in charge of the law in our country. >> because you'll be in jail. >> secretary clinton -- >> there were plenty of verbal jabs at last night's debate, but the nonverbal ones spoke volumes too. what the candidates didn't say, but do that has everyone talking. we'll have a body language expert weigh in next. the world's most exciting technology... ...doesn't go on your wrist. ♪ the highly advanced audi a4, with class-leading horsepower.
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welcome back. let's take a quick check of the markets here. s&p up by 12 points, leading us here. energy stocks, this is in part because oil, look at wti, up 3%. its highest level since june. >> between name calling, talking over each other, verbal punches flew all over the stage last night's presidential debate. more telling were the unspoken moments between the two candidates. sarah kauffman joins us, pulitzer prize winning dance critic of the washington post and author of "the art of grace."
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welcome to "power lunch." >> thank you so much. i'll read out the last sentence of your review, if i can call it that, from last night. trump blundered in getting too close. clinton erred in keeping her distance. let's start with donald trump. he never sat down from what i could tell. always hovering. is that what you meant? >> exactly. he, you know, the town hall format of the debate is engineered so that the candidates can move around freely in this ring-like arena, which last night took on the dimensions of a circus ring or boxing ring at times, very heated energy. and he was a dominating person and that's what we saw in the body language. in how he strode around the stage and how he seemed to be in the frame with hillary clinton when she was speaking, in his
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age sta agitated gestures often. >> a lot of people commented on that, you could see him standing the there. talk to me, you say she erred in keeping her distance. that will be less obvious to people. >> yes. yes. so that was a more subtle point. i think that given the heated nature of the debate, there were a lot of insults, a lot of back biting, it took on the dimensions of a feud. she kept control, however she missed some opportunities to connect with the audience members who were asking the questions and that's another part of this town hall format that she could have used to her benefit. >> example? >> well, the young muslim woman spoke up about islamophobia and
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she called it -- and what would the candidates do about that. hillary clinton gave a very clear reasoned response, she brought up her plans, her policies, but what i think the viewers could have enjoyed seeing her do, what we kind of longed for, was to see more of a sympathetic connection, where she could have gotten closer to this woman, maybe met her eye to eye, spent just a moment expressing that she understood this woman's concern and this woman's pain. >> so, sarah, you say you believe as i think many of us do that body language can give you a window into a person's, if not their soul, their character. right? you feel that way. >> exactly. >> so what character traits were revealed last night on both sides? >> right. the body doesn't lie. the truth comes out and that's why body language is so strong a
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form of communication. so what came through last night was the image of donald trump as dominating, as needing to dominate, as being slightly out of control, not being at ease with the pointing fingers, the hands, the arms making very forceful gestures. >> and she? >> and hillary clinton was much more under control. she kept her emotions very under wraps, considering the attacks that were coming her way. and the time limits. but she was definitely someone who was practiced at keeping her emotions under control and keeping her gestures within the frame of her body, so they're not distracting. >> sarah, thank you so much.
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>> pleasure. >> a news alert on golf. golf channel's tim rosafort saying tiger woods will not play in the safeway open. this would have been woods' first pga tournament in over a year. he was supposed to play a pro am with steph curry. you know he wanted to do this. and play side by side with his sometimes buddy, sometimes rival, phil mickelson. tiger woods out of this weekend's safeway open in california. cancer drug sending shares of this company soaring now. the name of the company straight ahead. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms
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i'm michelle caruso-cabrera. here's what's on the "power lunch" menu. trump in trouble. new poll out, little more than an hour ago, showing a dibble digit lead for clinton. we'll get the latest on the horse race ahead. samsung's exploding problem. the major wireless carrier halting sales of the galaxy 7. is samsung's pain apple's gain and what management needs to do to manage the crisis. and the single best idea.
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we'll tell you what that is. the second hour of "power lunch" begins right now. ♪ >> i'm melissa lee, let's get a check on the markets. two hours until the closing bell. stocks in the green. dow higher by 109 points. s&p is higher by 12 points right now. being held by the rise in energy stocks thanks in part to the pop in wti we're seeing at june highs. nasdaq 100 setting a record intraday high. it is all about biotech, led by mylan. more on that stock in a moment. >> also in your headlines this hour, warren buffett, firing back at donald trump over taxes. buffett revealing how much he made last year, 11.5 million in adjusted gross income and how many deductions he took last year, $5.5 million worth. he urged trump to release his taxes. consumers plan to spend $136 this holiday shopping season. that would be up 3% from last year. and get this, stock tickers matter. a new study shows the
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likability, even the pronounceability of a stock ticker impacts the value of the stock. don't invest using that as your only metric. >> you might not do worse than i do, which is not saying very much. brian, thank you. latest nbc news "wall street journal" poll out shows donald trump is in a little bit of trouble. in a four-way race, clinton leads trump by 11 points among likely voters. 46% to 35% in a two-way race taking out libertarian and green party. it is 52-38 in miss clinton's favor. of course, it is not a national race. it is a race in 50 different states. larry sab ato, welcome back. you made changes over the weekend to your electoral college map. tell us what the most important ones are and what led you to
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make them. >> i can summarize it this way, tyler, she, hillary clinton, is back up to 341. she has been as high as 348. as we have done this over the past six or seven months. donald trump is below 200 again. part of this is the sex talk tape and, of course that influenced the results of your poll that i think was taken saturday and sunday. >> yes, it was. >> so that is probably as good as it is going to get for hillary clinton and as bad as it is going to get for donald trump. >> so you're -- >> i think it is also -- >> go ahead. >> i open my e-mail from you this morning and i was surprised. you basically believe that mrs. clinton will hold on to all of the states that obama won in 2012, save for iowa, and that she will flip north carolina to her column, right? >> that's the way it is looking right now.
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i fully understand that in the next 29 days it is possible that this will get somewhat tighter. i can't imagine it getting so tight that it is unpredictable or trump going ahead. there is just too much water under the bridge for trump. >> a couple of weeks ago, larry, you were here, you had ohio leaning republican. now you have it leaning democrat. >> that is correct. because that's what the data tell us. and that's what our sources in ohio tell us. we have access to private trackings too. this has changed. not so much because hillary clinton has gone up, but because donald trump has gone down. the baggage that he's carrying, tyler, could now fill a 747. >> and without ohio is there any plausible way mr. trump can see to the 270 votes he needs? >> zero.
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absolutely zero. i would say the same thing for florida. frankly i say the same thing for north carolina because that was carried by mitt romney four years ago when romney only got 206 electoral votes. >> i spoke with a few gop folks this weekend, not officials, just people around town, friends, family, whatever, some of them were female, none of them, nobody, not one person i spoke with said they were going to switch their vote because of the tapes. they hated it. thought it was gross, but basically the theme that you gather is, yeah, i don't like trump, but i'm sort of registering a protest vote against the clintons. is there any way to sort of measure the counterfacts, yeah, trump, whatever, but how much of the vote is just because it is anybody but her? >> i think that's a big piece of trump's vote, would have been for any republican. another kind of republican, john kasich, marco rubio, others, paul ryan, if he had run for president, they could have potentially gotten the
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additional four or five, six, seven percent on top of the base necessary to win. that's donald trump's problem. i think last night he pleased his base enormously. once the sex tape effects fade, as i think they will, he'll go back into the low 40s again. but he has to get into the midor upper 40s to win and can't do it. >> two quick questions, do you think that the polls may understate trump's support. in other words, there are trump supporters who are reluctant to say they're going to vote for trump. that's question one. forgive me for a quick question two. do you think if mitt romney were running he would beat hillary clinton? >> i'll answer the second one first. i think he would have a decent to good shot. i think most mainstream republicans would. not just because it is hillary clinton, but also because it is extremely difficult to get a third consecutive term in the white house for any party. you have to have conditions like we're seeing to do it.
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now, i've already forgotten the first question. >> do you think -- do you think there are trump voters, supporters out there who are undersampled in polls? >> yes. the shy trump vote. based on the shy tory vote in great britain. everything that i can tell about this suggests that at most, i do mean at most, it is 1% to 2%. i think it is less than that. how are we looking at it? we're looking at interviewer polls, where you actually talk to a live person, versus online anonymous polls that are random sample. and there may be a point or so worth of difference. but i don't think there is nearly enough to save trump. >> larry, thanks very much. >> shares of mylan soaring now. mylan helping to fuel the ibb higher. not the only one.
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shares of tesaro on fire after news of the ovarian cancer drug, up 20% today. meg tirrell is here with the details. >> a lot of news to talk about today. mylan, the company saying late friday it reached a settlement with the justice department for $465 million. that's with the doj and other government agencies, to settle claims over the idea that it may have misclassified the epipen as to how much it was going to pay in rebates to medicate it. charged by several congressman that it wasn't paying enough in the medicaid rebates. as part of the settlement, they'll be entering a corporate integrity agreement, part of the announcement on friday. the settlement doesn't have any finding of mylan wrongdoing here. they also said friday they're going to be lowering their 2016 adjusted eps guidance, but the stock reacting positively because people thought the settlement was bigger than the $465 million they're paying. it removes a big overhang. raymond james upgrading stock today. david maris says there may be
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more to worry about here. the s.e.c. starting an investigation into the same issue. of course, there will be continued questions around the actual price of the epipen. so more to watch with mylan. on the cancer drug front, a big conference over the weekend in copenhagen called esmo, folks saying it is more influential than asko that takes place in june. merck, bristle m-- and tesaro ad clovis moving up. tesaro and clovis are working on inhibiters, on ovarian cancer, promising data there, that's drive the stocks up today. >> interesting in terms of the reaction on wall street to the mylan settlement. raymond james upgraded. but some say clarity for 2016, not too many months left, but no clarity on 2017 or beyond because we don't know what the generic epipen pricing will do. >> a lot of questions as to next year for mylan. they did reiterate $6 adjusted
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earnings eps guidance, but for 2018, that guidance for $6. what happens in between now and then. how do they get there? what will the impact be of the scrutiny on drug pricing. >> stay with us, meg. let's bring in michael yee with rbc capital markets. you don't cover mylan, but in terms of te s sentiment for the how is mylan these days, it is a big component of the ibb. >> i think there is a big picture three things going on. one is that i think that the political rhetoric and whole drug pricing thing, i think, is starting to move a little bit behind us. i know there is some debate about that. i think with the political elections and this announcement today, you're seeing an example of that. and stocks are moving higher regardless. i think the second thing that is helping us is the positive clinical data that some of the medical conferences and we always have been saying there is
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continuous huge pipelines at some of the companies reporting out great data. and that's pushing the stocks higher. lastly, m&a. that's something that has been playing a role in biotech for the last six months. i think if we continue to see that going forward. >> tesaro, a take-out candidate at this point? >> we do agree. we think tesaro is high on the m&a list in biotech with major phase three multibillion dollar clinical oncology drug. another one moving up today with good data at the conference. and these late stage or commercial stage oncology companies will be in play because all of these big pharma companies are saying they're looking for assets just like those. >> mike, it is meg tirrell. one of the biggest catalysts left that this year in the space is going to be the alzheimer's trial readout in december. you mentioned that in a note this morning. what are the impolitics for biogen and the rest of the space. do you see biogen trading based on the results and how does that go? >> great question. so i think that for investors
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out there, the biggest event, most exciting event for the space is the phase three lily alzheimer's data likely in december. i think most importantly there is probably a 30 or 40% probability i think it will be positive and the stock could be up on that. i think we all agree on that. conversely i think a lot of people are watching biogen as a derivative. they have a phase three drug that is enrolling, data will read out another year or two. and if the lily data is positive, which has a similar drug, biogen stock could be up 20%, 30% on that data. so most importantly, moving some of the stocks, but also it is going to remind investors there is huge pipeline drugs at these companies, a lot of innovation, a lot of big things brewing outside of just this political environment. and so i would advise investors to pay attention to that because that's a lot more important than just some of the rhetoric out there. >> michael, thank you.
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samsung is exploding crisis. turns out its replacement phones may be just as unsafe as the originals. and now the big carrier is halting sales of the phone. will samsung's pain be all apple's gain? what management needs to do to stop samsung's image from being destroyed. we're back. will your business be ready when growth presents itself? american express open cards can help you take on a new job, or fill a big order
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welcome back to "power lunch." it seems things are getting worse for samsung after a
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replacement phone caught on fire. sales will be halted until things are further investigated. but one person's misfortune is another person's opportunity. shares of apple moving higher, hitting a year to date high. highest level since december, up by more than 2%. so are samsung's battery problems a huge win for apple? joining us is tim long, senior analyst at bmo capital markets. great to have you with us. seems like it is not just the replacement issue, but the carriers coming out saying we will take back your samsung phone, but also allow you to choose any phone that you want that seems to be the real difference between today and last week. >> yeah, definitely. clearly a big mess up for samsung and a bad time here with the new i phoneiphone 7 coming . it is an opportunity for apple. in the near term, samsung only ships 5 million or 6 million
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notes a quarter. it is not a huge number. and a fair amount of those people make like the android platform or samsung. but certainly the brand damage at a time where apple does have a little bit of momentum probably adds further to the game in subscriber base that they have been getting, which is real important for the company. >> seems like the worst possible timing for samsung given not only apple as a new phone, but google has a new phone too that runs android. if you're an android lover, you may switch over to a new google phone. >> yeah, absolutely. as we know, the android camp is much more fragmented, so lg, sony, a lot of other companies and a lot of chinese companies as well are making phones. so on a global basis, this does really open the doors for others to crack into samsung's lead. so it is likely that a fair amount of those people will stay with the android platform.
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but part of our thesis on apple has been they are taking a good amount of market share from samsung at the high end and even from some other brands that are moving up market from the midtier to get on to eye phones, particularly with the sc earlier this year. >> we had the ford rollover crisis, a while back. the gm ignition issue, we had companies that have gone through crisis modes that have come back just fine. it is in the media. it is terrible. and then kind of passes out of the public consciousness. do you believe this will happen with samsung? is their brand strong enough? >> it is probably a top ten global brand and they're very diversified set of products from, you know, tvs to phones to, of course, semicop dunductod displays. we're talking 20 million units a year, 15 million, 20 million units a year. this is not a huge piece of their business. brand is important in this market. and in some other regions it is
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more important than others. so i think it is something that they're going to have to correct, but they have a pretty broad portfolio and this is, you know this is something that happened, pretty rare that it happens on this type of scale, but they are taking action and they'll just have to fix the problems and come back. they invented this large screen smartphone so they were the first ones to come out with it. apple caught up really well in the last two years. >> tim, thanks a lot. tim long. >> another big part of samsung's galaxy 7 nightmare is how the company's management is handling the crisis. or maybe not handling the crisis. let's bring in now vivec and john. i understand you just recently in the last couple of hours have spoken with someone fairly up high in the food chain at samsung. how would you describe their reaction to this and the mood of the person that you spoke with? >> they are really, really in
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crisis mode. all over. told me the executive team is getting hourly updates, so taking it very seriously. they know they messed up. they know they have a disaster on their hands. on the other hand, they, you know, this is a small part of the business, the company is doing overall well, but all over this. and my advice to them was to declare defeat with the note, rebrand it and announce a new product lineup that blows people away. >> i don't know -- i think it might be going too far to say this isn't a disaster for them. mainly because of what was just mentioned, the fact that google has a phone coming out, security experts i talked to say android overall tends to have a problem. but if you get an android phone and don't want security issues, go with samsung or google because they're able to push out these updates more often. and those are key to security. if you take samsung out of the picture, then a lot of people go to google. there is the frustration issue. this isn't as if it is just one call of a million units.
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we went through that already. this is replacement units having an issue. several people i know are samsung loyalists found the initial replacement process frustrating. they're not willing to go through that again. now samsung is having to try to hold on to people who aren't able to get the size, the quality phone they wanted to begin with. some of those people, you know, are willing to consider apple at this stage. at a staple where samsung needs to be picking up share. >> even though it may be -- it is not going to be detrimental overall in terms of the percentage of revenue, still phones occupying incredible mind share in the world right now. we're on them all the time. you bump into people, walking down the street, so regardless of what it represents on the balance sheet, it is a very big product. could it spill over to other stuff that samsung makes that people may not buy as a result of this? >> no, i don't think so. but you have to realize that samsung is getting amazing
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troub publicity out of this. now you can -- you hear about samsung three or four times. people are being hammered with samsung, samsung, samsung. >> you think people are more likely to buy because of this? >> not this version. this you have to abandabandon. but samsung has become a household name. this is the way it goes in marketing, you can take a disaster and turn it into a victory if you do things right. will samsung do it? i don't know if their management team is smart enough to do it but they may get there. they're not good at hype and pr management, but very competent at technology and they are listening very carefully to the market right now. >> those pictures look like overcooked kale chips, you know? of the phone there that have melted. i have a samsung 7 galaxy. it gets warm. i have to confess, i'm concerned about it. do they get back in the game with a new version of this larger size 7, the note, rebrand it, renamed, and do they have to
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cut prices dramatically to retain market share? is that one of their responses? >> yeah, i think that's what they need to do, to rethink what they are, this is a beautiful product. i tell you, when i use this, and go back to the iphone, it is like going back to an iphone 3 or 4. the iphone looks so inferior. the google phone may well be better, so that might be the real risk to samsung is google, not apple. the fact is they have to do something dramatic after this to recover. and if they do it right, then they win. if not, they basically go the way of some of -- motorola and a bunch of other brands like that. >> they missed the window is the issue. we're now approaching mid-october, q 4 holiday season is huge. they the reason why they released this phone at the time they did is to go head to head with the iphone 7 and 7 plus. now they're going to miss that. there is that premium tier where the money is made, that's what this phone is built to do, make a lot of money. that profit is now seriously in jeopardy. >> good point. thanks, guys.
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remind me when you're flying next so i -- >> is it on you? >> i'll go get it. >> we figured out why this phone, the batteries are very similar, right? aren't they all similar? why this phone? >> see if it is warm. >> the good, the bad and the ugly. stocks in today's trading, plus, the small cap call of the day, up 200% this year. why it could still double rally double digits from here. being called the single best idea in the consumer space right now. that name when we come back. what's the value of capital? what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create,
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or not in vests. sign up at etrade.com and get up to six hundred dollars. you know that music. welcome back to "power lunch." time for the good, the bad, the ugly in today's trade. the good. cal pine, that stock up big following the acquisition of noble group's us energy business. 3.71% at 1302. now to bad. after the company gave a weaker than expected outlook for the third quarter, there you see dover corp. down about 7%. that's half as much as the loss at twitter. it is an ugly day there.
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reports that potential bidders are starting to lose interest in the company. it is down 13% after some major moves up last week at $17.19. two done, one more presidential debate to go. is there still a race? we'll speak with one female republican leader coming out in support of trump, and denouncing those in her party who aren't with him. we'll be back in two minutes.
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hi, everyone. i'm sue herera. here is your cnbc news update. donald trump not mincing words in an extraordinary story that we have been following all day. tweeting paul ryan should spend more time on balancing the budget, jobs and illegal immigration and not waste his time on fighting republican nominee. that tweet is in response to ryan's earlier comments on a house republican call where he said that he would not defend or campaign with trump. new video from lumberton, north carolina, shows just how bad the flooding has been from hurricane matthew. that town was among the hardest hit after rising waters breached a nearby levee. craft heinz is voluntarily
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crawling lunchables ham and cheese crackers because they may have been mislabeled and have undeclared allergens. the affected packs have a use by date of december 25th of this year. and golf fans may have to wait a little bit longer for the return of tiger woods. the golf channel reporting woods will withdraw from this week's safeway open. he has not competed in more than 400 days. that's the news update this hour. brian, back to you. >> all right, sue, thank you very much. the oil market is closing for the day as well. another good day for the bulls. >> that's right. good afternoon, brian. we did close over $51 a barrel. session high was $51.60 where traders told me we met a little resistance and couldn't breakthrough the level. they're questioning how much more we could run really from here. remember, the two bits of news today that pushed oil higher, putin speaking at the world energy congress, saying that they would cooperate, the
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russians, with the opec players to create some sort of a deal where production would be frozen or potentially even cut, but it wasn't necessarily an agreement or any clear action that has been laid out. so- some people are skeptical. saudis are moving forward with the bond issuance. one of the reasons that the saudis may want to prop oil prices up at this time. so they are moving ahead with that. meantime, traders tell me the momentum to the upside bucking the trend of the dollar there, gives them a little bit of confidence to see that. we could see support, we could hold here. back to you. >> thank you, jackie. the latest nbc news wall street journal poll shows donald trump losing ground following the revelation of his lewd comments on that tape. this poll is done on saturday and sunday before the debate last night. in a four-way race, clinton is leading trump by 11 points among likely voters. the lead increases to 14 points in a two-way match. meanwhile, wall street is betting on a clinton win, predicted, this is a real money political prediction market, has clinton at 84 cents and trump at
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22 cents. it will cost you 22 cents to bet that donald trump will win. if he does, you get a dollar. that's how that works. joining us is tony frato. tony, tony, tony. is it safe to say you're still never trump in the wake of that tape? >> i think so. i think more people are becoming never trump too, actually. i think that's where the party is finding itself now, a tough weekend. >> tell me the implications of paul ryan and what he said today that he's not going to campaign with trump or for trump and talking about the down ballot. what does that mean logistically on the ground, when it comes to get out the vote. >> i think what you would see in a typical presidential race at this point is you would -- you would see people out looking for opportunities and most districts and most states the campaign with the party standard bearer and to try to bring, you know, bring those votes together and
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unify. and that's not what you're seeing now. you're going to see a lot of members looking to distance themselves. they realize that, yeah, i likened it to sort of you bought a ticket on a runaway train, you can't get off the train, but you can try to find some safe places on the train where you can take care of yourself. i think that's what a lot of members are doing now. focus on the district, focus on your state, focus on local issues, and go out and run your race and try to hold your -- win your seat. >> so all those republicans withdrawing their endorsement of donald trump, they're not endorsing hillary clinton. does that matter? >> no. i think they're going to distance themselves from the presidential race as much as possible. some of them are going to say they're going to vote for, you know, mike pence or write in someone else or just not going to vote in the presidential race. they have got other problems to worry about, though, to be fair to them. they're in a tough place if you're kelly ayotte in new hampshire or some of the other
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toomey or some others in the real tough battleground states. you do have a portion of your republican electorate who are true trump supporters and so you need to find a way to mollify them because you need their support if they're going to come out and vote. >> does the polling of endorsements in your view change anybody's vote? i could see some argument, i suppose, where people who are core trump supporters would say, hey, these are the establishment republicans whom we want to get away from as fast as we can. so does -- is there a curious way that this hardens his core supporters? >> yeah, here is the thing, tyler, for a republican to win the presidential race, in these battleground states, if there is a deterioration of two or three or four percent on the republican side, it is a landslide for the opposition. these races are far too close to have any deterioration at all.
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even if you -- we would say -- the lack of endorsement isn't going to make a big deal for a couple of these candidates, but a little deal, you know, a small deterioration has a pretty big impact in their race. so it really does matter. >> tony, sorry to jump, we got to go. the tweet came out from a national campaign spokeswoman for trump, like two minutes ago, i can't keep my phone charged due to the mass volume of texts from people all over the country who will vote trump but not vote down ballot. from katrina pierson. so basically that's a threat, is it not? does a trump campaign have any leverage against a gop? that's a threat. >> not a lot. >> is trump threatening the gop? >> he has threatened the gop, he has threatened -- threats are sort of his modus operandi. we'll see a lot more of that. but, yeah, i expect -- i expect there to be some loss from some of the members who cannot stand with donald trump, but they're going to lose either way, if
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they stand with donald trump, they're going to lose support. they need to gauge in their state and their district what is the bigger -- where are the bigger losses going to come from and then their conscience. if they don't like this guy, they disagree with him, they -- they find him offensive, can't stand with him. >> tony, thanks for joining us. tony fratto. let's bring in diana olick who is going to disagree i think pretty heartily with tony. you said you're not voting for any republican that is -- >> that's correct. we had part of our nevada delegation who is running withdraw their endorsement for trump and i am going on the record and withdrawing my support for them. let the chips fall where they may. >> so this is civil war in the republican party. >> it is. it is. we have been admonished all our live as republicans, especially going into a general election that you get on board, you vote
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for all the republicans up and down the ticket, you get as many republicans as you can in office. and now we're going to hold their feet to the fire with that very same advice to them, why are they not supporting the nominee who is heavily supported and nominated at the national convention? >> because of the tape on friday night. you're not upset about the friday night tape release? >> we have far more important things to be concerned about rather than some boy talk that these guys had 11 years ago. they need to get real. >> so what happens then -- are you willing to do this and then perhaps cause a loss of seats as a result? i mean, it sounds like -- >> absolutely. if we don't have trump in the white house, nothing else matters. i'm going on the record to say that if trump does not win the white house, i'm resigning my seat as national committee woman for the republican party in nevada. what difference does it make at that point as hillary would say?
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>> so why are you so convinced that having a republican in the executive office matters so much relative to getting policy done? not enough to have a strong enough opposition in the house or the senate to stop what hillary clinton wants to do? >> you know, we had a republican majority in the senate now since 2012. we had a house majority since 2010. and what have they accomplished? you don't get anything accomplished with a democrat in the white house. we need a republican in the white house. and that's not going to happen unless we get everybody supporting donald trump. he's got some great ideas for the country. he's got huge support. not only among the republican party and his supporters, but across party lines. >> quick question, if i might, diana. were you always a trump supporter, trump supporter from the moment he announced or did you change as he became the apparent nominee, that's number one. number two, how is it looking in your state? >> well, i -- i was originally a rand paul supporter. but after seeing donald trump in
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the very first debate in august of 2015, i realized that this man was going to be running one heck of a good race, and had a lot -- a lot that was so much different in his messaging to the american people. and i went on record supporting him for president in september of 2015. in the state we have huge support for donald trump. we have a huge ground game. very positive. i don't agree with a lot of what the polls are showing because i don't think they're actually polling the everyday groundswell, the grassroots. >> right. that was something we just talked about -- we just talked about that very idea, a few moments ago, with professor sabato . thank you very much. we appreciate your time. >> you're welcome. >> it is the small cap call of the day. this stock has surged 200% this year and some expect it to rally 30% from here.
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that and three other big calls in street talk next.
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time now for street talk. analyst recommendations of the stocks you need to know about. are you ready? >> yes. >> first up, ready or not, first up mkm upgrading mattel. key to the call, stabilization of mattel's two core brands, barbie and fisher-price. new products should help drive sales acceleration into 2017. price target, 36 bucks a share. >> need barbie to come back. second stock, american eagle outfitters, upgraded. a few reasons. stock's recent pullback, their outlook for a solid third quarter and momentum heading into spring. >> spring? it is not even winter yet. >> that's what's getting on the shelves there. think shorts. their field research pointing to continued product improvement and market share gains.
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$21 pargh target up from $18. >> next up, one of the big biotech movers, we talked about the stock with meg tirrell, tesaro, price target up to 120. maybe not saying too much. it does have 21% pop on the day. the stock moving on data released at the oncology meeting which shows the drug to treat ovarian cancer showed a significant three-month benefit versus a placebo. a hot class of drugs. >> melissa and i and some of the producers send e-mails about our stocks, find them ourselves. you sent this around, i thought it was the refinery. i saw the $120 target. i thought this analyst has been drinking. >> that's a good psa. tesaro. >> a pharma company. lastly, smaller cap call, acasia
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communications, optical networking company. bank of america restarts coverage with a buy rating and $130 target, about 30% upside. big data center play. analyst sees gross margins getting better, stronger than expected demand from buildouts of data centers in china. recent offering should help the balance sheet strength. the average target lower, 110. but very, very bullish on acasia communications. >> look at one-year return. >> nobody speaks like that. >> how do you like them apples? >> michelle would know. >> you can do it. do it. we'll get our producer to do the baltimore accent. >> balmer. the words could do a -- >> baltimore. >> baltimore. >> thank you. up next, a venti sized stock
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call, why morgan stanley says starbucks is the single best consumer growth stock right now. a stock with a double shot. are they right? will you get roasted by this call? we'll debate that next. [ clock ticking ]
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time. you only have so much. that's why we wanna make sure you won't have to wait on hold. and you won't have to guess when we'll turn up. because after all... we should fit into your life. [ laughing ] not the other way around.
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[ clock ticking ] last week morgan stanley's analysts called starbucks the single best growth stock right now. let's bring in two other analysts and see if they agree. i hope i got that right. i appaapologize. peter, would you agree with your colleague over there at morgan stanley. >> i would say i'm hard pressed to find a lot of names in consumer that are growing earnings 15% as consistently if not more with all product categories and global diversified base. it is a great consumer name. don't know if you want to call it the greatest consumer name out there. you are getting 15% to 20% earnings growth kiptly every
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year. >> what would be a knock on starbucks? we had to point out a hold because we are the media. what would be the biggest knock towards investing in starbucks. >> it's what you do for an encore. the company has been putting up tremendous growth, accelerating growth off of increasingly big numbers, accelerating same store sales growth. the last two years to high single digits which is sort of unheard of. it is getting harder. you get through comps and i think you are going to see the business look a bit more attractive. from our standpoint it is that. you they get harder in december. when you get through that it will be a question of transaction. how the company will go forward in the market. >> peter, i'm curious what you know about how they are doing in terms of mobile ordering because i think that is where they are
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way ahead of their competition. you order ahead of time. you show up at the store. the drink is ready. >> that's part of our thesis on the name. you are getting great growth in digital. 25% or so of transactions of just mobile payment. only about 5% of their transactions are mobile order and pay. so you can order ahead of time going pick it up, helping it helps the average check. i think there is a lot more room to go especially on the mobile order and pay and also on just literally the transaction just mobile payment in the store. i think it will come down to two things. they report a full number. if there is 4% comp in the u.s. and stock goes down modestly or 5% comp they outperform expectations and it goes up nicely this quarter. that is what it is really going to come down to. >> what has been wrong with it for the past year to date? it hasn't shown growth on a
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price basis, price appreciation basis. >> picky, picky. >> if you are going to call it growth stock. >> it's a growth stock. you can look at the multiple if you like. it hasn't had a great performance year to date although comps have been fairly strong. i think you just need to see a rel acceleration in the traffic or moderation in the traffic for this stock to continue to work. it has to grow into the multiple a little bit. great name. continuing to take market share. >> being the investigative reporter that i am i have used mobile ordering a lot. frequent issues, printer wasn't working so i couldn't see it. we don't have that in stock. can i get you something else? >> so when you get there you are disappoint disappointed. >> it's happened more often than not. >> a pleasure to have you on the show talking starbucks. do appreciate that.
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up next, we are talking tigers and bears oh my.
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it is time for check please. another look at the best videos of the day just what we want to talk about and how could we not redo. if you missed earlier from sue polar bear herrera. i thought she loved pandas.
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she breaks out the bear video daily. >> a lot of pandas. >> somebody put a bunch of ice in a pool. there is a slow motion shot. if you are on the radio i'm sorry. >> bears ranked by order of how much i love them. >> lemur. >> i want to go back to our body language segment. we are sitting here with our arms folded. what does that say? >> you are so aggressive. >> tiger woods after announcing he was going to safeway not to produce section to tournament. he says now i know that i am not yet ready to play on the pga tour or to compete at the turkish airlines event. my health is good. i feel strong. my game is vulnerable and not where it needs to be. reports are that the safeway
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open sold 28,000 extra tickets in anticipation of his appearance. i suspect they will give you credits at your local safeway for those. >> a lot of meat. >> a lot of kale chips. >> i am watching bristol-myers. we talked about positive data that was released. but feeling the pain. it has a similar drug out which didn't show similar results and a lot of analysts are saying merck will own this space. we are seeing a drop for shares. we are talking about a company that is a $92 billion company. this is a huge drop. >> my check please is in the wake of that tape where you can hear donald trump saying those very lewd comments there is now full civil war ongoing in the republican party in the united states. i'm not sure how it survives or
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how it all plays out. >> it is fascinating to watch. >> it really is. it is unbelievable to see. >> back to the polar bear video and pretend that is america right now. >> there you go. that's america. nothing more american than the polar bear. >> thanks for watching "power lunch." "closing bell" starts right now. > . hello everybody welcome to "closing bell." i'm kelly evans in the new york stock exchange. >> welcome back. in germany they call polar bears ice bears. >> do they? >> we can just play that video over and over. >> i'm bill griffith. a new poll released shows that hillary clinton has polled further ahead of donald trump but this poll was taken before last night's debate and we will look at what this market is saying about maybe who won last night's face

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