tv Power Lunch CNBC August 19, 2019 2:00pm-3:00pm EDT
a great piece, and i want to thank you for your time. great to see you >> thanks, becky always great to be with you. >> alan murray of fortune. that does it for us. let's look quickly at where the markets are right now. the dow is up by about 275 points these are big gains coming on the big gains we saw at the last two trading days of last year, so continue to watch this as we get closer to the closing bell right now, it's time for "power lunch. >> and thank you, becky. i'm melissa lee. here's what's new at 2:00 on "power lunch." stocks in rally mode the dow jumping nearly 300 points as the bond market snaps back are recession fears overblown? vanguard's strategist says not so fast. and expiring today, the first of many ipos to let early insiders sell shares. we'll tell you which names could get hurt the worst >> and great american consumer, owner of the houston rockets, tillman friteata will give us his insight on how strong wall
street really is "power lunch" starts right now and we do welcome you to "power lunch." i'm bill griffeth, we're going to look at where the markets have been standing today we have been in rally mode for the most part, but as we all know from last week's epic volatility, things can change very rapidly with any particular headline, but as you see, more than 1% gains for all three of the major averages nasdaq's wiping out last week's losses at this point the s&p, that's still 3% from record highs but you can see that some of the safety sectors have been hitting all-time highs today as bond yields rebound we have consumer staples, real estate, and utilities doing very well today that means they're expecting even lower interest rates. i would imagine, melissa >> bill, thanks. as you mentioned, stocks rebounding bond yields also bouncing bab. what's behind these moves? let's get to bob pisani at the
new york stock exchange. >> important thing here, it's been quite a rally in the last couple days. look at some of these charts the dow has moved about 800 points since the bottom on thursday afternoon here. the dow's bottom correlated exactly with the yields in the ten-year we had about 1.47% that was the low the yields came off their low, so did the overall stock market. a pretty good correlation here not surprisingly, cyclical sectors like semi-conductors, bank, and retailers have outperforms. reits and utilities have underperformed, but that's not been the pattern recently. baupd yields drifted lower in may and accelerated in august. this quarter, defensive sectors like reits and consumer staples have been rallying cyclicals, you see here, they have generally lagged behind much of this turnaround in yields can be tied to the slightly lower concerns about the possibility of a recession in 2020. a point the president's advisers repeatedly made over the weekend. we also have the huawei reprieve and there's been rumors about
german stimulus coming as well bill, back to you. >> thank you we'll see you later. >> so is the august selloff over or is there more pain to come with so much uncertainty still looming? mike vogel sang is the president and cio of boston advisers matt is vp and portfolio manager with rockland trust. at this point, it's a mugs game to try to figure out what's going to happen day to day, even hour to hour based on headlines. we have more earnings from retailers coming out this week, but in general, how do you view the market right now >> i hate to play a mug's game that's all i know. you know, look, i think the -- it's reasonable and the data is telling us to be a little more cautious as we head into the second half of the year. or sort of the fall season there's no question the economy is beginning to slow down a little bit some of the bites from europe and china are slowing things down a little. we have been very, very bullish all year to a great extent, and we're coming off that a little
bit now. i don't think it's a huge change, just a little less at the market >> yeah, matt, what do you think? >> yeah, i would agree we had this tremendous run-up here this year, and at this point, i think it's maybe time to think about doing some profit taking the central banks around the globe are going to try to fight against the slowdown that everyone is so worried about that's going to help but that's going to be -- there will be volatility trading between the tariffs on the one hand and the central banks trying to fight it off on the other hand i think it would be reasonable to take profits and put it on the safe side of the portfolio for now. >> mike, how do you account for all of the volatility we have seen i was here on wednesday for one of the worst days of the year. i was away thursday, friday. i came back today and it's like nothing happened >> ho-hum. >> exactly so in terms of all the prognostications of bond yields going down to 1.32 and possibly below 1% or even to zero, what do you make of all that, and what is the message to investors at this point?
>> i think what happens is when you are starting to get consensus that the underlying fundamentals in the economy are beginning to change, even at the margin, you start to get portfolio rotation and i think with big portfolio rotation, you start to see more volatility we had this really bipolar sense of as you pointed out, wednesday, this big rindge off day, thursday, friday, big risk on today again, big risk on that's what's going on when people are uncertain about the future and starting to change their opinion. we're beginning to sort of edge at the margin a little more conservatively i think that's what's going on i think it's not as clear cut as it used to be. >> is tech conservative in your view that's one area that you're still strong on. you feel strongly about. >> we like earnings groethd. we like revenue growth we like good, positive strong cash flow, and it's hard to disrupt the leaders in this economy right now. the market is just being dominated by the relatively select group of really, really
strong and well run companies. and hard to bet against them at this stage >> matt, you're playing defense in that you like the utilities and the telecoms are you among those who see interest rates going much lower from here? >> no, i honestly wouldn't make a prediction on interest rates other than i feel like they have run down so much so quickly that there might be a move back, which we have seen over the last few days as maybe see some of the optimism out of the stimulus packages that are going to be rolled out in and the rate cuts and what china is doing with some of their lending programs so playing defense is not a bad thing here you know, bond proxies, as bond investors look for other places to put their money, they're going to look at the telecoms and utilities which are domestic don't have to worry too much about tariffs and taxes can make those kind of safe places to put money. and i would kind of be a little more cautious than mike on the technology and global industrials bah you don't know which way things are going to swing when it comes to tariffs
and trade wars it's sort of like that game with the maze when you were a kid with the ball. you never know when you're going to fall into a hole. the landscape is shifting too quickly. it gets complicated for the companies to commit. >> before we let you go, your list of likes includes walgreens, lam research, booze allen and starbucks. that's quite an array there. is there a theme to this >> two themes. one is sort of deeper value, you know, walgreens and lam research, we think, are really strong value candidates. particularly walgreens just a matter of waiting until the cycle works. the other two are market leaders. boos allen and starbucks have done well. they're close to their all-time highs and business hitting all cylinder we look for two things one, they're working and expensive. a couple that haven't been working quite as well and give you more value >> mike vogelzang and matt, thank you for joining us president trump along with
his white house economic advisers continuing to dismiss recession fears while at the same time pressuring
the fed the president tweeting earlier that our economy is very strong despite the horrendous lack of vision by jay powell and the fed. but the democrats are trying to will the economy to be bad for purposes of the 2020 election. our dollar is so strong that it is sadly hurting other parts of the world. he goes on to say the fed rate over a fairly short period of time should be reduced by at least 100 basis points with perhaps quantitative easing as well if that happened, our economy would be even better and the world economy would be greatly and quickly enhanced good for everyone. joe davis is head of vanguard's investment strategy group and global chief economist he's getting increasingly worried about recession in 2020. joe, great to speak with you >> thanks for having me. >> do you think any of what the president is suggesting could actually stave off that recession that you fear could happen in 2020 >> well, i think first, we have to assess what are the odds of a
recession. right now, a recession is not our baseline outlook for 2019. nor for 2020 we had -- we're anticipating a sharp deceleration in the global economy. in the u.s. and china, we had that, but the line is holding in the economic data. and so, you know, i think there are an odds of roughly 1 in 3 of a recession in the next 12 months again, 1 in 3 is not above 50%, but higher than you i'd want that's why i think the fed is engaged in easing here >> do you think the fed should aggressively ease further. you want 50 basis points the last fed meeting we got 25. do you think a 50 basis point cut this time around could actually help things even if at the margins. do you think jerome powell should open the door to that with a speech in jackson hole this friday? >> well, i would now, again, we even debate internally in vanguard in terms of whether the fed should be
cutting rates given the state of the labor market at the end of the day, the fact that no one in the marketplace is stocking about upside risk to either growth or inflation tells me that policy is miscalibrated, regardless of the level of interest rate. i would go more than expected only for the surprise factor and articulate that risks are fairly balanced and then you go from there. i would try to get ahead of it, but put some line in the sand that you're not going to 100, 150 basis points in cuts if that's the case, we're already in recession >> when and if we get this downturn that you are talking about, where do you think it starts bearing in mind that right now, the consumer is doing well, the jobs market is very strong still, although it's starting to show some signs of wear and tear, and business investment has been going down anyway the last several months. so is that the beginning stages of this, or what do you see happening? >> well, again, right now, i see the line holding, and we do not have a recession as the
baseline, but the next several months are critical. we're in a critical window here because confidence is high, but rolling over investment, as you said, bill, has been weak and tepid at best. the financial markets are holding, so what i would be looking for, another shoe has to drop for a recession to become a reasonable expectation, as a mainstream forecast. i would likely focus on the trade area and those tensions because policy uncertainty today is probably one of the most somber readings of the distillation of indicators we look at. again, positively, if we can see uncertainty reduced to some extent, that would start to open the door for some upside risk to growth, at least right now myself and i think other, my peers aren't talking about >> how does your portfolio, joe, and i understand you have trillions of dollars in assets across various portfolios, but how does this reflect a 1 in 3 chance of recession next year? >> well, certainly, it would be from our active bond managers. this is an input into the risk
taken approach what's important is that our portfolio managers who are really smart because i work with them every day, they are assessing the odds that we come up with relative to the odds priced into the market even if one thinks that a recession is 1 in 3 or 1 in 4, that may not mean that we are withdrawing from the markets if anything, we're fairly constructive on certain parts of the market, but we're running portfolios i think fairly speaking, fairly close to benchmark because i don't think risk premiums and outside risk positions are going to be rewarded, at least right now >> joe, great to speak with you. thank you. joe davis. >> thank you thanks for having me and coming up, lyft's ipo lockup expires today that stock is down 27% since the ipo back in march. other big ipos are in the same situation, as a matter of fact, we'll tell you what it means coming up. plus, trade, the economy, and interest rates are behind these big market moves we have seen recently. all will be hot topics at this
week's fed summit in jackson hole, wyoming, and per tradition, cnbc will have full coverage on thursday and frida anme"perunch" is back after this what about him? let's do it. ♪ come on. this summer, add a new member to the family. hurry in and lease the glc 300 suv for just $419 a month with credit toward your first month's payment at the mercedes-benz summer event. going on now.
deirdre, let's start it off with you. >> well, melissa, given that sharp selloff we saw when lyft moved this date forward by a month, some analysts were expecting a down day, but shares have been pretty steady today. that may be a good thing for the bulls because today, as you mentioned, is the first opportunity for insiders like early employees and investors to sell shares and finally cash out their paper gains. venture capital firm andriessen horowitz bought shares at less than $5 a pop in the series c round, so even as lyft shares have tumbled nearly 30% since becoming a public company, the current price represents a more than ten-fold return on that investment but even if the cs choose to sell on the expiree, they're likely to take a look at their largest shareholders mutual funds are likely to holdong for a longer term. cofounders john zimmer and logan green and brian roberts who collectively hold 5% to 6% of
shares are not selling at the lock-up experation if lifetime prices can stay steady, that can set the tone for big ipos this year >> thank you >> deirdre bosa there in san francisco. now let's bring jay ritter in to talk about what it means for the broader ipo market i mean, first of all, are you surprised we're not seeing more downside activity for lyft today in light of the end of the lockup here? >> it is underperforming in up market today but this is fairly typical where there's not a lot of action on or after the lockupdate. >> and typically, what happens after the lockup you have research to show what happens in the week or two afterwards, right? >> yeah, this is actually relatively good time for investors to be buying since 2001, for venture capital backed ipos in the six months after the end of the lockup, they have actually outperformed
the market by several percent. >> these are all averages, though, jay, and i understand that that's what we have to take a look at, but when you look at lyft's individual case, the numbers are pretty staggering in terms of the number of shares that are qualified to be sold at this point it would be about 82% of the fully diluted float. and it's also nonprofitable company. i'm wondering if these factors play a role in whether or not this company you think might be more of an average performer post lockup expiration or an aberration >> i wish i could forecast that. you know, most companies are going to underperform. a couple will do very well but on average, the venture capital-backed ipos have tended to outperform the market by a little bit >> does the matter what the market environment is, jay >> yes in down markets, because tech ipos tend to be relatively
sensitive to market movements, they tend to underperform, but in up markets, they tend to outperform >> we'rane time seasonally when things do quiet down for the ipos before that in the sfring and early summer, we had one of the busiest ipo seasons going back to the dotcom boom here. we had big winners some big losers, see uber technologies how do you assess what we saw happen over the last three or four months? >> well, there have been a lot of biotech ipos this year. even though on average, there are only about one third as big as the tech ipos, and so they don't get as much attention. the last six years have actually had more biotech ipos than any other industry >> all right jay ritter, thank you for joining us an assessment of the ipo market here energy stocks getting a jolt today, but still down more than 7% so far in august. is today's turnaround for real
welcome back to "power lunch. we have a news alert on twitter. let's get to sue herera. >> thank you, melissa. it also has to do with protests in hong kong twitter putting out a statement saying they're disclosing what they are calling a significant state-backed information operation focused on the situation in hong kong, specifically the protest movements and their calls for political change this disclosure consists of 936 accounts originating from within the people's republic of china, prc. overall, these accounts were deliberately and specifically attempting to sow political discord in hong kong, including undermining the legitimacy and political positions of the protest movement on the ground based on our intensive investigations, we have reliable evidence to support that this is a coordinated state-backed operation. they go on to say that they
identified large clusters of accounts behaving in a coordinated manner to amplify messages related to the hong kong protests. twitter is banned in the prc, but they did say that these accounts were accessed using vpns there were some specific ip addresses that originated in mainland china that were able to use twitter, but they are disclosing at least 936 accounts state-backed operation to undermine the protesters in hong kong melissa, back to you >> thank you >> let's get to mike santoli for trading nation mike >> melissa, thank you very much. geopolitical tensions in saudi arabia sending oil spiking today, and fueling a major rally for energy stocks. so after getting hit hard in last week's selloff, is the tide turning for the worst performing s&p 500 sector this year matt milley and gina sanchez are your trading nation team today
matt, you know, we have had some false starts in this area before it's looked like the energy sector was pretty washed out to the down side, maybe they bounce, and then went to new lows how does it set up right now >> well, the setup is interesting because we're getting to this time of year where you get the last three or four months of the year that any time an underperforming group and an underowned group, the energy sector is less than 5 percent of the sop s&p, when it starts to rally, that attracts a lot of the institutional investors looking to make up performance, and the best way is an underowned group playing catchup. but this setup is better than the last few because a lot of these stocks are oversold, at least on a technical basis, and two that look particular to me are exxon and occidental petroleum. they're as oversold as they have been on three or four occasions in the last two years. and each time, both stocks rallied strongly an average of about 20%. obviously, occidental is a little more risky, with the whole anadarko situation, but
with a lot of people betting against that, they could get squeezed either way, if we can get any kind of traction in this group over the nextmonth or two, tha performance issue could bring it, give it a lot more upside than people are expecting towards the end of the year. >> gina, a lot of things have been pressuring this group obviously, persistent supply concerns for a while, and i guess the group gets caught up in a lot of the concerns about global growth, so how do you see it playing out >> well, i think the bigger concern was the supply glut meets waning demand. you're starting to see some of the supplies come off. if you look at ieia data, we're seeing global supplies start to move down and also seeing it in the united states as well. that would be beneficial what's happening right now is obviously, being driven by saudi arabia, that will be very, very short term those spikes tend to come and go with concerns like this. however, this supply issue actually will put a floor underneath oil, and analysts are already starting to forecast much higher levels than even
right now the curve is forecasting. so if you're betting that you're going to go higher than futures curves, i would say there's general bullishness on oil prices right now >> all right, gina, thank you very much, and matt, for more trading nation, head to our website or follow us on twitter, @tradingnation. back over to you >> thank you mike santoli >> ahead on "power lunch," the state of the great american consumer will the shopper keep the economy afloat >> and as today's bounceback for real or is more pain ahead the key levels to watch. plus, the latest on the crackdown on black market marijuana in california. all that and more coming up on "power lunch." >> and now, there latest from tradingnation.cnbc.com and a word from our sponsor. >> different sectors tend to do well different different periods of the economic cycle. when the economy is expanding, industrial and technology stocks have historically outperformed the broader market however, when the economy is
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here's your cnbc news update at this hour. democratic presidential candidate elizabeth warren offering apologies during a gathering of native american and tribal leaders she received warm applause after acknowledging her missteps >> i know that i have made mistakes i am sorry for harm i have caused i have listened and i have learned a lot. and i am grateful for the many conversations that we have had together >> gabe reelparker, the accused gunman in a 2018 high school shooting that killed two people in kentucky appearing in court with his hands cuffed. his attorney is hoping to get statements made by parker thrown out. arguing his fifth, sixth, and 14th amendment rights were violated after he was taken into custody. >> and dog goods usa is recalling its chef toby pig ear treats due to the potential risk of salmonella contamination.
they were dwinistributed to retailers nationwide so far, no illnesses linked to its products you're up to date. bill, back to you and see you later. >> i will see you later on nightly business report. thank you, sue let's check out where we stand with the markets all three major averages hanging on to gains. the dow moving back above 26,000 led by financials and technology and in fact, the big winner today is apple having the largest impact on the dow, up about 2%, sliding out of correction territory, it says here >> all right, bill all day here on cnbc, we're fecsing on the great american consumer and despite warning signs a recession is on the horizon, president trump is dismissing those concerns >> we're doing tremendously well our consumers are rich i gave a tremendous tax cut and they're loaded up with money they're buying, and our consumer is really, really strong it looks like they're going to be for a long time >> joining us now is a man whose
entire business empire is leveraged to the health of the consumer he owns restaurants, hotels, casinos, the houston rockets, and much more. let's welcome our billion dollar buyer, tilman fertitta, ceo of landry's and the owner of the houston rockets. great to have you back on "power lunch. good to see you. >> good to see you guys, melissa. >> what are you seeing across your businesses? should we be concerned about a recession based on what you see? >> well, we know one thing we had a great 11-year run here, and history always repeats itself, and we are going to get one. but the consumer is still out there spending money you know, retail sales are up. the casino business is good. people are buying tickets to basketball games mortgage applications was at a high this year so but then there's signs of other things you see macy's, who is your top retailer out there, who has their arms totally around the business, we're seeing some of the restaurant consumer go down
to buy down a little bit gaming is still there, but it's not as robust as it was. but remember, everybody fills their tanks. you can only buy so many new cars you can only buy so many new tvs. you can only lose so much in a casino so at some point, the consumer is full. they have used up their credit, and i think we're getting to the end. now, does that mean there's going to be a recession in 2020? absolutely not but of course not is robust. you can't have positive same-store sales every year, every year, every year >> you have seen one or two downturns yourself, you and your businesses what indicator would you look at within your business empire that would say to you, you know what, things are in fact slowing down. is there a particular line of business, a particular area where the businesses are where you say, you know what, that is going to be the lead indicator >> well, and this is what a lot of people do when there starts
to be a downturn, they start buying the business. even right now, you can see some casual dining restaurants are buying the business, because all you have to do is look at their margins. the one thing we're able to do in a retail business, and once again, it's any of my businesses, whether it's basketball or gaming or lodging or restaurants, is you can buy the business, but then look at the margins. now, we're also suffering huge margin issues because of labor prices in our business you know, the $15 minimum wage, i think, is great. it's wonderful but don't expect us to have the same margins and put as much money out there. so but you can buy business, but when you start seeing the traffic continue to drop and continue to drop, and then the margins fall, it only works for so long. and that's wi we have never been one to buy the business. >> and in fact, you have looked at various businesses in the last few years, but you have turned down the deals because, what, you think things are a
little frothy now? what's going on there? >> you know, for sure, bill. i mean, people, there's so much credit out there, and this is one of the huge things that i have always watched. when you see the credit, the corporate credit market go away, i don't pay attention to the stock market watch the corporate credit market, and when leverage finance starts to dry up, that's when the world starts collapsing and if you just watch that, you know, forget the 30-year bond. watch the leverage credit for businesses and what's happened is there's so much credit out there right now, every business is still selling at 9, 10, 11, and 12 times. and i am just one, especially at the end of a cycle, just not to pay up because i have grown my business to a multi-billion dollar business in down times when i can buy things at the right price in the right multiples right now, it is still so frothy
out there because there's still so much credit now, that can change in six months but it isn't happening next week people have got to stop paying attention to the stock market because trump is having a meeting or not a meeting or a tariff here or a tariff there. do not use the equity market as a barometer ever >> is that, though, for you, when you see the volatility in the stock market, does that make you more concerned about the consumers' impression of what's going on with the economy? when trump is talking about the need for jerome powell to cut interest rates further for there to be more stimulus, et cetera, around the world, do you think that sort of re-enforces the notion for the consumer that things are getting worse does it make you worried >> it does make you worry. and remember, there is a global issue right now. i just traveled to a lot of places in europe, and every single city and person that i talked to said our business is down around 20% this year.
there is a global problem, and we don't sit on an island here in the united states because we export so much so if there becomes a whole global economy problem, which is happening right now, it will totally affect the united states and bring it down because of all of our exports >> and how much lower then do you think interest rates go? there are those, since you're the one who follows the yields and the fixed income market, there are those who say, and alan greenspan was among them, that there is no barrier to the ten-year yield going to zero would it be that extreme, do you think, at some point >> i would hate to think that it's that extreme, but at the same time, there's more corporate data out there than ever, and so bringing interest rates down still lets us do capital, you know, projects out there. where if rates start going up, everybody is going to pull back. so trump's insisting, even though he isn't supposed to go there, that rates need to come down is good for corporate
america, because let's be honest it all comes back to corporate america. that's where everybody works, corporate america. >> so it sounds like you don't see a recession coming and yet you are not doing the deal, even though we all know that you love to do deals, but it's the end of the cycle, you're not going to do deals at the same time, you see interest rates remaining this low or going lower so how would you characterize your stance right now in terms of your business and whether or not you're expanding or engaging in cap-x >> i am -- i am, i am doing things in a very conservative way. i think most of corporate america right now is doing things in a very conservative way. and i think if you go take a big leap out there, that paddle is going to get your behind right now because there is a recession coming it might not come until '21 or '22 or '23, okay, but there is one coming history always repeats itself,
and we have had the greatest economic run ever in this world that we have seen in the last ten years. and everybody knows, just like i said, everybody's pocket can only get so much -- you can only buy so much. okay we bought every car and tv we can out there. >> we all know here at cnbc what a worrier you are, but you love your rockets this will bring a smile to your face what a crazy free agency we saw over the summertime. and of course, you landed the big fish in russell westbrook to team him up with james harden in the back court you're very much in the conversation now for the nba this season. what are your expectations, and what did you think of what happened with all of the high-profile free agents moving here and there >> i think it was exciting it's exciting for new york this year to have the guys they picked up in brooklyn. it's exciting for the clippers and the lakers
and it's exciting for the houston rockets, and lots of other teams. utah jazz. it is wide open, and this is something i have always said you cannot say i'm going to put the best team together, and i'm going to win a championship. you want to be one of the four or five best teams, and then you need some luck and who would have thought at the beginning of the year that toronto was going to win the championship they had a very good team. and they put themselves out there. and they had a little luck there at the end and that's all you can hope for. you can never plan on anything, just like in business, just like in basketball. >> quickly, there are those who say the rockets will be the best team in the west this year are you? >> of course we're going to be the best team in the west. really >> what did you think he would say, bill? >> thought i would ask we have the confirmation now from tilman fertitta thanks, tilman. >> thanks, guys. great talking to y'all >> his book, shut up and listen,
is available for preorder right now. hits shelves next month. coming up on closing bell, cnbc's special coverage of the great american consumer continues as we focus on electronics, where the picture isn't as rosy as it is for restaurants. >> meanwhile, coming up, google went public 15 years ago today how time flies where it's been, where it could go next. that's coming up plus, on the tasting menu today, bad times for baidu a bad sign for the economy, and one man who is laughing all the watohean coming up.
yes, it's true google went public 15 years agotoday, and it's been great for investors. up 2,000% over that time, but google has a spotty history as an investor itself youtube was a great buy. motorola mobility was not. what might google do next, you ask? josh lipton has that story for us josh >> so bill, 15 years later, and google rules the online ad market in part, benefitting from some big bets on acquisitions so for example, there is youtube, which the company bought for $1.7 billion back in 2006 today, it has generated an
estimated $20 billion in ad revenue, and that's per year then there was double click, which it agreed to pay over $3 billion for back in '07. that advertising platform helps power google's ad business its biggest acquisition, what you mentioned, more than $12 billion for motorola mobility in 2012 less than two years later, it sold motorola's smartphone business to lenovo, but google did get to keep most of motorola's portfolio of mobile patents. now the question, what does google buy next? analysts who cover the company say it's not going to try to make a big bet in the internet ad market. the market share is too big, and also that increasing regulatory scrutiny feeling from here and abroad they do, think, google could try to keep making relatively small to midsized bets in the cloud market as it tries to narrow the gap with industry leaders, amazon and microsoft i caught up with tech analyst patrick morehead, he does float
one name he says check out nutanix. it allows companies to run so-called private clouds it's hot technology and could help google attract more cloud customers. nutanix declining comment. >> josh, thank you a big bounceback in yields today. we'll get a check on bonds and give you the levels you need to watch and an update on the crackdown on illegal marijuana in california. a state where weed is legal and yet the black market is still thriving i like to make my life easy. ( ♪ ) romo mode. (beep)
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excuse me?! what? i don't know your phone number. aw well. he doesn't know our phone number! you have our fax number, obviously... today's xfinity service. simple. easy. awesome. i'll pass. . >> good afternoon. you know, treasury yields today seem like they really wanted to hold and move higher and for the most part they are holding. not on their best month to data note yields. the 30 year bond might be a better proxy for whether it will hold or not. because it is trying to get through the level that was most significant when it broke down and that was the all-time low close which was 210. we're hovering just below that if we trade above it, that would be a positive. and bund yields, maybe this is the epicenter of the protagonist
of a all interest rates because they seem to be leading the way after going down minus 72 basis points, germany may do some stimulus and indeed that has turned yields up a bit and that of course is quite contagious out of europe. >> hold their nose and take on some debt. thank you, rick. and we have a little more than an hour left in today's session. stocks still in rally mode with the s&p and the nasdaq be both recovering all of wednesday's losses and here to look at the next key level to watch, we bring in steven grasso. how are you? >> hey, bill, how are you? >> what levels are you watching? >> let's take a look back on the recent selloff that we've seen with the overall market. specifically this area right here so i'm going to talk the retracements right here we selloff, we bounce back to the 50 and the 618 retracement.
it is not that wonky retrace half the move that you are moving up. it failed right at that level. this is the problem is that once it failed, you traded down further from that initial point of failure what is going on now, the same sort of action here. we've traded down to this level, rallied back, and you wind up hitting that resistance again. specifically in the s&p, 2925 to 2950 that is where we are right now so if we cross over that, it is extremely bullish. then it opens up back to the levels of 3027 to break out again to new all-time highs. but it is to a large extent, it all hinges on this level right now. let's call it 2950 that is where you want to breach across that or else this is all for naught and we will trade back down on again and possibly
testing the 200 moving day average at 2800. so keep in mind 2925, a rebound rally. an oversold market now 2950 is where you really need to break out before you get sucked back into buying the market i would not be a buyer here. i'd be a seller right at these levels for the next 25 handles higher you could always rebuy it higher with all-time new highs being made, but i would sit on your hands if you are a buyer >> are you getting any volume with any of these moves? >> you have to remember when the last two weeks of the summer, so you have a lot of people not sitting at their desks technicals are reinforced by bloated volume, but they don't necessarily need it. they validate it, they confirm the move, but we don't need the volume we can just get the levels and it gives us a roadmap to guide our ship or our investment >> why do you think we bounce back i ask you this because i'm trying to figure out if the reason for the bounce back,
erasing most of wednesday's losses, is for real or if the markets are just looking ahead to the possibility of german fiscal stimulus as well as a dovish speech from powell on friday >> i think to your point markets are fickle they bounce back because we were in an oversold state you have to bill's point lightly liquidity, so you never afver s dull market, neff fight the fed. those two things going on in the last two weeks of the summer but i do think that it is more of the case of guys are reaching and traders are reaching for safety trades. and you look at what is happening in the ten year, you look at what is happening in utilities, what is happening in reits. this is not a high quiblgtsed market to go higher from here. i think it is just a rebound effect. >> steve grasso, good to see you. thanks >> good to see you guys. one of the biggest threats to the legal marijuana industry is the black market estimated at
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employees if you wabtnt to call them that, they call themselves volunteer, some get paid by hour, some get paid by tips and free weed at the end of the day. >> quite a perk. police found a generator running outside to keep the lights on of a city ciafter city officials previously turned off the power. and there was a an illegal grow operation in the back. the black market isn't going away anytime soon. a huge problem >> that is just crazy. unintended consequence of some of the regulations that they put he place tre check please, coming up next how do you gauge the greatness of an suv?
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very talented. owner of the rockets and restaurants and casinos basically saying that he is concerned that the consumers might be conservative because of when they are hearing. >> don't pay attention to the stock market >> exactly thank you for watching "power lunch. >> "closing bell" starts right now. welcome to the "closing bell." i'm scott wapner and i'm at the chevron post energy leading the market higher 59 minutes left to trade, we'll tell you wherein investors can trust this rally that is all coming up. >> and welcome, i'm sara eisen let's look at what is driving the action trade headlines document nature dominate the bullish tone and tech stocks are surging. new stimulus husbaopes from arod the world.