Skip to main content

tv   Power Lunch  CNBC  April 24, 2015 1:00pm-3:01pm EDT

1:00 pm
in the taper tantrum. that was pretty ugly. it's different this time. rates are going to be controlled. fed's going to be pragmatic, and i think it's time to nibble on em. >> guys good to see you this afternoon. >> thanks again, mel. >> that does it for us here on halftime report. "power lunch" begins right now. the nasdaq surpassing the closing high and closing in on the all-time high. the index is up 22% in a year since the 2009 bottom. check that out. up 300% so time to buy or time to sell. no deal comcast, our parent company, dropping its bid for time warner cable, in the midst of a major regulatory road block. will there be other buyout targets and what's next in the m&a sector. and a big change for abercrombie & fitch, changing its look literally! hello, everybody, once again.
1:01 pm
tyler is out today, but as i mentioned, brian is live in l.a. they there, brian. >> reporter: hey, mandy. happy friday. that comcast/time warner cable deal is off, disconnected, if you will. comcast is the parent company of this network and it is ending its deal to buy time warner cable. this is following regulatory scrutiny. our ceo, brian roberts, on cnbc's "squawk box" earlier today saying it is simply time to move on. so where did it all fall apart and what now? david faber joining us with more. david? >> with its deal to be acquired by comcast no longer on the table, one of the key questions is what does time warner cable do? the company will be report earnings next week we'll see how good they look and whether or not, of course charter communications, which had pursued time warner cable so much so that it found itself in the arms of comcast eventually will come back to try to do that. charter, for its part finds itself without any of the subs
1:02 pm
it expected to be taking in. whether through its divestitures through comcast, or whether the eventual deal to acquire greatland, which was a spunoff entity was also something in the cards for charter. with none of those in place and a growth strategy dependent on growing subs through acquisitions, the expectations are that charter very much is interested in acquiring time warner cable. if it does so it's expected to make a private negotiation. it's not going to make it public as it did last time, as it tried to at least publicly solicit support for its bid amongst time warner shareholders. what i'm hearing out of the time warner camp it's very similar to what i heard previously over a year ago which is anatomically, they're interested in doing whatever they can to show shareholders they have their best interests at heart. the expectations are that a price to get charter over the top would no longer be the $160 it once was, but more than that.
1:03 pm
charter has watched its stock price go up dramatically over the last year. that will give it the ability to compete and perhaps meet those expectations. finally, we've got our parent company, comcast, which finds itself without any deal of its own. first, you've got to replace the cfo. second, you probably let the dust settle but then you get back to thinking about acquisitions. for now, brian roberts with tb company's ceo on "squawk box" earlier today indicated that buybacks may be the order of the day. >> another thing this does the deal was going to slightly increase our leverage. that's now not happening. that opens up room for further stock buybacks. and i think that's an area we're thinking about. >> there are no shortage of subjects whether it be a global acquisition of some type wireless here in the states or perhaps getting larger in
1:04 pm
content. >> thank you very much, david faber. the nasdaq just continues to march to new all-time highs right the now. it's currently sitting at 5093. mind you, the tech bubble high on march 10th, 2000 was 5132. that was the intraday all-time high. that's what we're aiming for now. the question is which stocks have powered the nasdaq since that tech bubble peaked on march 10th 2000. let's take a look at some of these incredible moves here behind me. you have for example, monster beverage, up more than 52,000%. that's what i call a monster move. and the stock just keeps on going higher it's up 30% this year alone, and it has more than doubled in the past one year. then we have keurig green mountain. it's up 28,000% since march 2000. tractor supply here in the middle, up 8,000%. gilead sciences and rally automotive up about 4,500%. eight incredible moves there. why don't we then head to the
1:05 pm
nasdaq and find out the big moves today with bertha coombs. >> mandy, they say history doesn't repeat but it rhymes. and this week big cap tech reasserting itself and certainly, yesterday, was the big juggernaut. if you take a look the nasdaq composite is up above 5,000 for the fifth straight day. fourth straight day of gains. but it's the nasdaq 100 that's really moving forward here up more than 4% for the week, powered by those big cap tech earnings. amazon is the big move. amazon having its best weekly gain since back in 1999 on the heels of that astonishing number and just how big its cloud business is. we have seen the cloud and amazon has a huge piece of it. its market cap today, topping $208 billion. it's going to make it a bigger lifter now within the nasdaq 100. the other heavy lifters today, microsoft. the old name huge name for microsoft on the back of that
1:06 pm
cloud break that the street seems to like as well. also google more discipline in its spending and apple is on deck next week. that's going to be a big mover when we see just what kind of cash apple returns to shareholders, notwithstanding the earnings and the numbers on iphones and apple watches. and then of course, we do have biotech. today, we're doing this without the help of chip stocks without the help of biotech stocks. that dance continues between mye kr krlan, perrigo and teva. a dance of unrequited drug and biotech a drag. >> a dance of unrequited love what a fantastic way to put it. we're actually going to go into more detail on that love triangle in just a second. in the meantime, morgan brennan with a news alert. >> hi mandy, that's right. we've got the weekly u.s. oil drilling rig count from baker hughes has just come out. and according to that in the u.s., oil drilling rigs are down by 31 to 703. that's a slightly faster pace than we saw last week when they
1:07 pm
declined 26. just to put that in further perspective, we are now down by 831 u.s. oil rigs from a year ago, when the rig count stood at 1,534. checking oil prices neither one really moving on this news but continuing to see the drop this rig counts. back over to you. >> all right. let's get back now to stocks and keep the focus squarely on technology. we are joined now by a couple of really smart guys who maybe feel a little bit differently than the nasdaq. we've got nasdaq bull jimmy rio, he is managing director at tjm institutional services and jeff killberg taking more of the bear stance he's ceo of kkm financial. jim, i want to go back to stock picking versus indexing i think the nasdaq run on the stats that mandy gave are incredibly important. not everyone is going to pick the kind of winning stocks that we highlighted. but look at the gains in se monster beverage 52,000%, and
1:08 pm
the triple q just get back to where it was 15 years ago, not to mention the time loss of money, it does make an argument for, if you can do it smart stock picking. >> yeah but that's hard to do brian. guys our age, i don't know anything about it, i don't even understand it. >> don't say our age, say your age. >> i'm going to swing and miss on a stock like that. microsoft, i feel a kinship to. it's as old and boring as i am. but to think that someone's going to consistently pick the monster beverages out of the whole pile to me that seems like a tall order unless you're really plugged into what those crazy kids are doing these days. >> my point is this goes it does in some cases, go toward -- i'm not bashing indexing. index, long-term, slow growth but, if you are able to find somebody that can pick stocks or do them yourself you can make
1:09 pm
the outsized gains. do you see anything like this happening down the road for the nasdaq? >> without a doubt, sully. active management stock picking, it's a much more better strategy. but this index, that is the etf that gets exposure for retail investors to this nasdaq 100. think about what is going on. everyone is getting a ribbon. every index out there has an all-time new high. so it was inevitable the nasdaq was going to do it. they did it yesterday. record close. but look at the five top holdings of the qq the apple, microsoft, google facebook and amazon. amazon, you can argue the cloud is a fantastic piece of the data, but overall, the company is still struggling to profit. i'm a little bullish right here due to the fact that we've had such tremendous growth. the italian wants to get in prp >> what we're talking about is the board of indexing. we're talking about the nasdaq which was supposed to be the anecdote for the boredom. it's not the doughw. granted, names like microsoft
1:10 pm
have grown into something different, but apple still straddle that is line, amazon straddles that line. so i don't think the nasdaq is boring. >> it's just a little overdone. it's up 25% since october 15th. up 5% in the last month. let it come back down to the 200-day moving average. >> if you had put $1,000 into last year, it would have cost you about $33,000, today it would be $380,000. i want to point that out, for the people who did it congratulations. have a great weekend. >> you miss t out on a question. i was going to ask, what happened to killer's beard. i kind of liked the beard. it's gone. let's take a look at the markets. the dow is back in positive territory for the year thanks to microsoft's stronger earnings. also, i believe, very good for mr. bowman's pocket. i think that's about what he paid for the clippers. the s&p 500 hitting a record intraday high, for the second day in a row. bob pisani joining us now from the nyse floor and you made a
1:11 pm
great point this morning, bob, when you were saying it is a great day for seattle. >> yep starbucks, microsoft, all big stars there. and that's one of the reasons consumer discretionary group is so up so much. the s&p is in a narrow range, mandy, about six points but enough for a new high if we can stay here. we didn't yet. 2118 is where we are, we need 2117 and above to get an extraordinary high. amazon and starbucks had great numbers, and they're pulling that sector up. but, look financials industrials, and energy are lagging here. you sort of need them to get any real energy in the market. speaking of energy you heard what jim was talking about. new highs and low volatility. i get complaints from the traders. they hate this rally. they say bob, choppy economic stats are a problem. we've got flat to down earnings. valuations are too high the feds raising rates. can i remind everyone i'm not happy about earnings but earnings dropped because oil fell apart and the dollar rallied big. if anybody notices, these trends are reversing. oil is sitting right near the highs for the years, right now,
1:12 pm
breaking out to the highest level since december $57, and mandy, the dollar rally that everyone's worried about is stalling. the dollar index has now stalled out, hit its highest level over six weeks ago. we're reversing the trends mandy, that caused the biggest problem for earnings in the last quarter. that could be a big tail wind for stocks in the next couple of months. >> i'm sure there are a lot of companies out there that are hoping for that bob. and the dollar got even weaker after that bad durable goods number for march. the big love triangle. it's forming in the world between myelan and perrigo. will the former big-cap drug ceo is going to weigh in. plus abercrombie & fitch dialing back on the sexy with a major image overhaul. so what is it's image now and will it be able to stand out in the crowd of teen retail space? lots of questions. we'll give you some answers, later on in the show.
1:13 pm
well, sir. after some serious consideration i'd like to put in my 15-year notice. you're quitting!? technically retiring, sir. with a little help from my state farm agent i plan to retire in 15 years. wow! you're totally blindsiding me here. who's gonna manage your accounts? this is a devastating blow i was not prepared for. well, i'm gonna finish packing my things. 15 years will really sneak up on you. jennifer with do your exit interview and adam made you a cake. red velvet. oh, thank you. i made this. take charge of your retirement. talk to a state farm agent today. the e-class has 11 intelligent driver-assist systems. it recognizes pedestrians and alerts you. warns you about incoming cross-traffic. cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing: a crash. the 2015 e-class. see your authorized dealer for exceptional offers through mercedes-benz financial services.
1:14 pm
1:15 pm
welcome back to "power lunch." check out shares of microsoft. steady climb after posting better than expected first quarter earnings and revenue. sales of its hardware and cloud computing products helped to offset a decline in the core windows business. you can see right here shares of microsoft are up nearly 10%. brian, back over to you. >> all right morgan thank you very much. get to some of your other
1:16 pm
business headlines on this friday. starbucks shares jumping to all-time highs yet again. investors loving their earnings and that 7% jump in sales. pretty much broad-based strength across the board for starbucks. credit suisse raising its target on the stock to 51. apigee joining the nasdaq today. the company will raise about $87 million for that ipo. and europe's biggest bank hsbc may be looking to move its headquarters out of england. the bank is considering a move back to its former home in hong kong. hsbc stands for hong kong shanghai bancorp. that stock is down more than 7% this year but actually higher slightly today. >> thanks, brian. here are the latest developments in the teva perrigo, love triangle. we have a love heart made out of pills. this is our love triangle. i've got the triangle. and then you have mylan, over here, which is making a formaled
1:17 pm
by for perrigo here with an offer of 60 bucks in cash and 2.2 mylan shares per perrigo share. that is after perrigo rejected an unsolicited bid on tuesday. that move also comes after teva up here at the other side of the triangle made a takeover bid for mylan, something that mylan does not want and is trying to fend off with this perrigo bid. got that? how's it all going to play out and will there be a deal? with us is fred and our expert in the field, meg terrell, who's been following that story from day one. great to have you with us. >> great to be here mandy. >> fred how does this love triangle pan out? >> very interesting. looks like something is going to happen here. we've got three shares. the most important thing is that this is a regulated history. >> right.
1:18 pm
it's going to take a lot of scrutiny from a lot of people. if it doesn't turn consensual soon, it has more chance of going through. the mylan/perrigo deal is less challenged. they have the private label things you see in walgreens, that's a little less challenge from a regulatory point of view but the mylan/teva thing is more challenged. if the two ceos can get together and have a proper discussion maybe they can go to to the regulators together and make it work. >> what do you think needs the deal more? teva or mylan? because a lot of people are speculating that mylan really just went after perrigo defensively, maybe as just a way to get thatva to raise its offer? >> both teva and mylan would like to see a deal because the business inherently is very volatile. it goes up and down based on how things happen every year with loss of products.
1:19 pm
so the more the bulk the better. especially when you have one single product at teva and mylan making a lot of the products the more you diversify, the better. i think both need the deal. i think teva might need a little bit more because they've had some management issues in the past, and they probably want to make a statement that they are not going in this direction, in a certain way, but, i think these deals do make a lot of sense, because it allows you to bulk up. it also allows you to go after margins, because you can offset your slower growth by margin grouping. >> brian item. >> hey, fred. it's brian sullivan in los angeles. you know, the interesting thing about this deal is that mylan, perrigo, and teva are all headquartered offshore. mylan's in the uk perrigo's in dublin, and teva is an israeli company. does the fact that they are now tax headquartered outside of america change anything about the potential for a deal here? >> well it doesn't matter i
1:20 pm
think, between mylan and perrigo, because both are overseas. i think the israeli situation is more complicated, was overall, i think these deals are going to work more on operational synergies and the financial synergies and less on tax synergies. >> but it doesn't really have any -- >> fred as a guy that has done many international deals in your day at schering-plough and others, can they thumb their nose at regulators a little more than others because where they are technically headquartered? >> i think regulators treat you the same everywhere. and it's not easy because these are global companies. it's only the u.s. justice department. it's the chinese regulators the regulators everywhere. and nowadays if you start getting a little concentrated it depends on how you define the market. if the market is defined broadly, then, yeah it might work. if the market is defined around say, a molecule or a cardiovascular category then it
1:21 pm
starts to become more of an issue. so i really think, if the two companies can get twogt, develop a good relationship, i think there's a good chance it'll go through. >> so you think mylan and per groe are more likely. >> because the businesses are more complimentary. >> thanks again, meg. brian, back over to you in l.a. >> good news on a friday america. no more half-naked models creeping people out at the mall. abercrombie & fitch announcing a major overhaul of its image. they are dialing back on the sexy. what's the image going to be now, that's ahead. plus how the rich fly. the most popular jet route in the world for the uber rich. can you guess what it is? "power lunch" with, back in two minutes. to feel well rested. aleve pm. the only one to combine a sleep aid... plus the 12 hour pain relieving strength of aleve. be a morning person again, with aleve pm.
1:22 pm
there's some facts about seaworld we'd like you to know. we don't collect killer whales from the wild. and haven't for 35 years. with the hightest standard of animal care in the world, our whales are healthy. they're thriving. i wouldn't work here if they weren't. and government research shows they live just as long as whales in the wild. caring for these whales, we have a great responsibility to get that right. and we take it very seriously. because we love them. and we know you love them too. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver?
1:23 pm
1:24 pm
[ male announcer ] legalzoom has helped start over 1 million businesses. if you have a business idea, we have a personalized legal solution that's right for you. with easy step-by-step guidance, we're here to help you turn your dream into a reality. start your business today with legalzoom. six-back abs and sexy looks, but enough about me. abercrombie & fitch announcing a major overhaul to its corporate image, but will it work especially in a very crowded and very, fickle teen retail space. courtney reagan is in tucson arizona, with that story. courtney you know they have those half-naked dancers outside the stores leading me and my children to usually scurry to the other side of the mall. >> reporter: yeah, exactly. and that's probably one of the reasons that abercrombie realized it needed a at least a bit of an overhaul. abercrombie and hollister are stripping out the sex when it
1:25 pm
comes to their markets as well as their dress code also revamping a hiring policy which has been widely criticized at discriminatory by many in the past. abercrombie will no longer have shirtless models or employees outside stores for events. it will also end its sexualized marketing materials by the end of july, except for the fierce cologne. that shirtless model image will stay. the they are now called brand representatives instead of models, and discontinued its look policy, which landed the retailer in a supreme court lawsuit after denying employment to a young muslim woman for wearing a head scarf. it is adopting a more lenient dress and appearance code. and it will not toll ray hiring discrimination based on physical attractiveness. the stores are also going to be adjusted for lighting for music, and for that famous wafting cologne smell. the company says it will probably take consumers a bit of
1:26 pm
time to realize the benefit of these changes. and this is seemingly a reversal of policy from longtime ceo mike jeffries, who abruptly stepped down from the retailer in december. ceo position actually still unfilled at this time but this is just one step the company is making to try to reverse course. its stock prices have fallen 40% in a year. sales have been down by double digits as well. mandy? >> i always felt sorry for those poor guys out there in the middle of winter. i bet they're really pleased that now they can maybe like you know, go indoors or just retire. >> get dressed. >> do something else. thank you very much, courtney reagan. let's go out to the bond market. rick santelli tracking the action at the cme. fortunately, he has all his clothes on. rick, how are yields looking after that lousy durable goods number? >> you know what mandy, it wasn't a terrific number. six in a row x transportation that was a negative number. but i have to always be as
1:27 pm
objective as we can. if we look at the non-seasonally adjusted data, it was a bit stronger, so of course we're going to all watch to see how it impacts next week's first look at first quarter gdp. many think it's around zero. we did some work under yesterday's lows and there's a slight bias lower. as a matter of fact, i'll pick march 17th the first day. why? because if you look at march 17th that was the last time we closed over 2%. this is the 27th session, not date, 27th session we're going to look to be closing between 186 and 199. wow, that is a tight closing yield range. let's look at a one-month chart of the high-yield barclays spread. all the talk out there in the aftermath of the energy price drop it looks awful orderly. we've seen the spreads move from 510 to 480. you can clearly see of late the dax does not like the stronger euro. brian, back to you. >> all right, rick thank you
1:28 pm
very much, and have a great weekend. well call them the four horsemen of technology. google, microsoft, amazon and apple. all of them with very different growth stories, all of them with very different stock moves. but if you had to buy just one of those four names, which one would you have bet on? that's coming up when "power lunch" returns. [intercom] drivers to your marks... go! it's chaos out there. but the m-class sees in your blind spot... pulls you back into your lane... even brakes all by itself. it's almost like it couldn't crash... even if it tried. the 2015 m-class. see your authorized dealer for exceptional offers through mercedes-benz financial services.
1:29 pm
friday night, buddy. you are gonna need a wingman. and with my cash back, you are money. forget him. my airline miles will take your game worldwide. what i'm really looking for is -- i got two words for you -- re-wards. ♪ ♪ there's got to be better cards than this. [ male announcer ] there's a better way with compare hundreds of cards from all the major banks to find the one that's right for you. it's simple. search, compare, and apply at first round's on me. who do you work for? your boss? yourself? your family? our financial advisors are free to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird.
1:30 pm
1:31 pm
hello, everyone. i'm sue herrera and here's your cnbc news update for this hour. thousands of south koreans took part in anti-government protests denouncing the labor policies of the country's president. the rallies were orchestrated by south korea's largest labor union group. demonstrators are demanding an increase in the minimum wage. several people were injured last night when a stage collapsed at an indiana high school. two dozen students were on stage at the time with about 900 people in the auditorium. state police have been brought in to help with that investigation. world leaders and families of soldiers who fought in a conflict 100 years ago arrived
1:32 pm
in turk yoi today. prince charles and turkey's president laying wreaths at a memorial for the fallen soldiers. the president of armenia marked the 100th anniversary of the 19159 ottoman massacre of armenians. the presidents of france and russia were among the international dignitaries that were in attendance there. historians estimate up to 1.5 million armenians were killed by ottoman turks. that is the cnbc news update at this hour. back to you, brian. >> all right, sue, thank you very much. let's get now to morgan brennan with a market flash. hey, brian, tyco shares are nearing session lows. right now, the fire protection and securities company cut its earnings outlook for the full year. that's thanks to headwinds from the smaller dollar. also the decline in the oil and gas end market. profit fell 19% in its latest quarter, though and earnings beat by 5 cents. that stock is down 8% year-to-date. it's down 5% today. back over to you. >> morgan thank you very much.
1:33 pm
meantime, gold prices are closing right now. let's get the closing price on gold. all right, guys let's bring that up if we can. i apologize for the slight delay. we've got a nice animation. gold is down what six bucks or so to $11.75. you've got corp., palladium, and plaid numb as well all on the move. gold really hasn't done squat in about four months and i think squat is the technical term. >> it really is. and by the way talking of gold i know that new month's mining a big gold miner, was up 5% earlier on today. freeport mackmoran moving higher as well. as you can see on the board, the nasdaq and the s&p, both hitting new highs. the s&p hitting a record intraday high for the second day in a row. let's bring in katie nixon, chief investment officer with northern trust wealth management and steven whiting, global chief strategist with citi private
1:34 pm
bank. thank you so much to both of you for joining us. bob pisani was talking about this interesting thing happening in the heart attack. in the first quarter, we have a lot of worries like the stronger dollar, weak oil prices, fears about when the fed would lift off. a lot of those seems to be dissipating in various ways. is that a theme you're working around for the second quarter and beyond? >> so some of those head winds have dissipated as we've seen the stabilization in the energy market, we've seen the dollar stabilize, and we've also seen despite the dramatic decrease in expectations on earnings you know companies are chinning a lower bar. so i think, fundamentally, things are looking okay and we certainly think some of the things that are impacting the first quarter are transitory is in nature. we were chatting about the weather earlier. certainly, we hope that we will see a brighter sunnier, warmer days ahead and we'll see the economy turn around a little bit as a result. >> even though we're sitting around record highs for the market, brian was making an excellent point early on today,
1:35 pm
even if you can't eke that much more out of an index, you have to get down to individual stocks. >> i think you said something really interesting earlier, mandy, when you mentioned a fed policy. and we happen to think, our base case is that the fed will raise rates in september, but the increases will be incredibly thoughtful very, very slow, and not linear. so monetary policy will stay very accommodative, which will be a tailwind to risk assets. >> we're suddenly seeing forecasts for q1 gdp coming down after that durable goods number. what about you stephen, i see you've reduced your overweight allocations to ecks. when did you do that? this week? >> this was yesterday. we have been in a pattern of very, very gradually de-risking portfolios in a period where this is obviously not the year of financial restraint, with most of the world's central banks easing. we're optimistic. we've taken the u.s. equity overweight from 3% to 2%.
1:36 pm
obviously, we expect good returns. and i think in particular in the near-term, you're likely to see economic strength in the data that are reported in the month of may. april will be much better. so there is a strong repeat of this pattern that we saw last year, with weather beating down the economy. but there is something more to that. i think that the pillars of u.s. outperformance in equity markets have been reduced some. i think what you saw, for example, in the orders data inform investment the u.s. has been you know, the center of the energy investment boom. and some of that is coming off. it will benefit consumers, but for many companies, that's an issue. i mean the one good thing that i think i really to emphasize, we've been hearing all this about falling earnings in the united states. i think that the end of the earnings season we will see that excluding the energy sector energies will probably have grown by about 6%. for the energy sector it's a lost year. so you don't value them for the entirety of the future on that basis. but the strong pillars of real
1:37 pm
outperformance in u.s. equities have diminished thels eded themselves. >> when you talk about earrings it's revenue that's the sticky point. when you say that you cut your overweight allocation to u.s. equities, where have you raised your allocation around the world? >> some of the underweights, the commodity producers, like australia, malaysia these are places that we've been underweight, where we have just increased on the basis of this more stable commodity price outlook. >> we've shifted some of the overweight in china, into hong kong. but i also would say that you know, when you're looking at total portfolios when you're thinking about risk you want some assets that will go up in price when equities and credit go down. all you have to do is look to october of last year and see what happened to long-term u.s. treasuries when global shares fell 10%. now you're in an environment where german bund yields are
1:38 pm
practically zero out to ten years. and many other safe haven bond markets look insignificant. we have which very slow interest rate profile in the united states, but we have the opportunity to de-risk portfolios, with increasing some weightings to u.s. bonds. >> okay, good stuff. thank you very much, for joining us, both stephen and katie. skuk get more from both of them. you can go to and see katie nixon's case for tightening in september, as she mentioned. brian, over to you in l.a. i hope it's a whole lot warmer there than it is here. >> they may get some much-needed rain. all right. happy birthday hubble telescope. 25 years ago, it blasted off into outer space and changed the way we look at stars forever. the project cost $1.5 billion at the launch, but hubble continue continues to circle the earth at an incredible rate of once every 97 minutes. it has made nearly 137,000 trips around the earth and it has captured data and images of more
1:39 pm
than 38,000 objects in space. nasa calling hubble quote with the most significant advance in aastronomy astronomy since galileo's telescope in the 1600s. if you're on the radio, i'm sorry, because what you're seeing is simply stunning. mandy? >> a good way of describing it is there to our poor radio listeners. anyway are you onboard with uber? our next guest is absolutely not. why i think he might be wrong, that is straight ahead on "power lunch." but first, a look at what you can find online at through our very special series marijuana and money. >> we founded marena, a wine club for cannabis. you sign up on our website and every month you get one of these boxes ses delivered to you. inside of it are four different strains. we try to create new and interesting assortments every month. the first thing you see when you
1:40 pm
open the box is tasting notes. i think this one has a particularly interesting fragrance to it. this is the hawaiian gold. it's one of the ones that we're using this month. we partner with a local dispensary. >> the smallest box is $95, it's a quarter ounce, and we have two other sizes that go as high as an ounce for $325. >> we're still at less than 100. we keep on signing up a couple new customers a day. it's hand delivered in the bay area. you get a text messenger when the driver is on their way and you pay the driver on delivery. for each order that we send to the dispensary retake a flat fee. that's where our revenue comes from. for these flowers, i think you would be spending $10 or $15 more if you went to the dispensary. a
1:41 pm
1:42 pm
in small business you have to work hard, know your numbers, and stay focused. i was determined to create new york city's first self-serve frozen yogurt franchise. and now you have 42 locations. the more i put into my business the more i get out of it. like 5x your rewards when you make select business purchases with your ink plus card from chase. and with ink, i choose how to redeem my points for things like cash or travel. how's the fro-yo? just peachy...literally. ink from chase. so you can. . welcome back to "power lunch." american airlines hitting session highs. the air carrier's first quarter profit nearly doubled as the company continues to benefit from lower jet fuel prices. despite the beat the strong dollar competitive capacity growth, and economic softness in
1:43 pm
latin america pulled down sales. the company also declared a ten-cent dividend. shares are up 3.5%. brian, back over to you. >> all right, morgan, thank you very much. well, uber generates a lot of strong feelings both ways. it appears you're either with them or against them. mandy uses uber all the time. uber, the savior for busy working parents. but george is not a fan. he thinks uber is smooth talking, annoying and does a major disservice to passengers by not screening drivers adequately. apparent this is some sort of a fight. let's talk about it george. what is your beef with uber? >> brian, i have three major beefs. one is their lack of safety inspections for their vehicles. the other is their lack of drug testing, random drug testing and the other is their lack of liability insurance for their cause if something goes wrong. >> let's take up the insurance
1:44 pm
thing for a second. i actually looked online and it does seem as if they do have adequate insurance. they have, for example, insurance that covers you, the passenger, for up to $1 million for either property damage or for bodily harm. it has insurance also for the driver, and also for third parties, like a pedestrian they might hit or you know, a property, or, you know a car that happens to be, you know, sideswipe sideswiped, whatever. so the insurance issue, i don't think is a valid one, george. >> well the drivers, mandy, done have adequate insurance. i asked a driver -- >> i use uber by the way, when there's no other choice. i asked a driver does he have liability insurance, which includes commercial use of the car and he didn't know what i was talking about. he said, no. i looked up my insurance in california and they said -- they said, absolutely no commercial use. if you use your car for commercial use we don't cover you. >> going back to the screening issue, how do, you know that they don't screen their people and their drivers properly? >> i was driven here by a
1:45 pm
driver, not an uber driver here to the studio and asked him if he got drug tested. last month he got drug tested at random twice in one month. and he got ten minutes to show up at the clinic. he was also breathlyzed at random, twice in a month. uber drivers do not get that kind of treatment. they do not get drug tested and the company has completely resisted doing that. i'm not saying you're a bad mother mandy, but do you want to put your child in the hands of a company that's notorious for breaking the law all around the world? and uber does that. and i do use them but -- >> here's the thing. it doesn't sit 100% comfortably with me to put my child in the back of an uber but i for having kiddy car seats in the back. maybe even have a nanny cam on the dashdashboard, that will connect
1:46 pm
your to your smartphone so you know what's going on. but i feel like it's a more controlled environment than putting my kid in a cab or letting them ride with public transportation, because can i call the driver i can follow them, right, on my smartphone make sure they get picked up and they get dropped off. it's not perfect, but it's better than the alternative. >> you know i think you have your next career ahead of you. i think that's a great idea. i saw that article you wrote, absolutely, there should be an uber uber uber. but a new york city yellow cab gets safety inspected three times a year. an uber car does not have to get safety inspected for brakes lights seat belts, all that stuff. you might be safer in a cab. >> i also have a quick question for you, brian. because, i really thought very hard about this. and i have two boys and i feel okay putting them in the back of an uber not 100% but okay. but maybe not if i had a daughter, which you do have. how would you feel about putting your daughter in the back of uber or any other ride sharing company out there?
1:47 pm
>> my daughter's 5, 6, and 11 years old and can kick some people's butts, so i've got no problem. she's awesome and tough. >> whether she's bigger taller and stronger than i am. >> but you guys are definitely talking about new york city problems. and as you know i am a suburban dweller. these are not things that i encounter. >> this is it. i don't have a car, like a lot of other new yorkers. if you're in the suburbs and have your own car, you know it's a different kettle of fish. george, thank you very much for joining us. >> thanks brian, thanks mandy. >> good to hear the otherside. when the wealthy travel they travel by -- probably not uber -- they travel by private jet. but where are they going? robert frank has a whole lot more. >> private jet routes generally follow the largest concentration of millionaires but there are a few surprises like pittsburgh and venezuela. we'll tell you the number one spot after the break. plus getting out of the rat
1:48 pm
race. coming up -- >> i was too old. >> but around age 40 this former trader put his old job to sleep. and went from the stock market to the operating room. escaping the cube, next. drivers to your marks... go! it's chaos out there. but the m-class sees in your blind spot... pulls you back into your lane... even brakes all by itself. it's almost like it couldn't crash... even if it tried. the 2015 m-class. see your authorized dealer for exceptional offers through mercedes-benz financial services. if you're running a business legalzoom has your back. over the last 10 years we've helped one million business owners get started. visit legalzoom today for the legal help you need to start and run your business. legalzoom. legal help is here.
1:49 pm
bring us your aching and sleep deprived. bring us those who want to feel well rested. aleve pm. the only one to combine a sleep aid... plus the 12 hour pain relieving strength of aleve. be a morning person again, with aleve pm. female announcer: sleep train's interest free for 3 event! is ending soon! get three years interest-free financing on beautyrest black,
1:50 pm
stearns & foster serta icomfort even tempur-pedic. plus, get free delivery, free set-up, and free removal of your old mattress and sleep train's 100-day low price guarantee. but hurry! sleep train's interest free for 3 event is ending soon. ...guaranteed! ♪ sleep train ♪ ♪ your ticket to a better night's sleep ♪
1:51 pm
when the wealthy travel they take a private jet. but where are they going? robert frank knows. what's the most popular route for these guys and gals? >> right, both. private jet setters, they're a bit like migrating birds, they follow the weather, but they also follow the money. a new study found that the route between new york and boston that was the third most popular private jet route in the u.s. coming in second no big surprise l.a. to san francisco. that corridor between all the tech guys and media guys. now, the top, new york to southern florida. that is the most popular private jet route in the u.s. and the world, in fact. now, this reflects mainly the wealth concentrations new york and florida, together account for nearly 20% of americans, worth $30 million or more. those are the folks most likely to fly private. california is an additional 20% of those multi-millionaires. those three states cot ss account for 40% of ultra-wealthy americans most likely to fly private.
1:52 pm
in europe it's also about the wealth capitals. the third most common private jet route in europe is paris to london and then it's nice france, to london. so obviously, vacations prominent there. the most popular route is between geneva and london. all those londonites going for their swiss bank accounts. the fastest growing routes are a little bit more surprising. number five houston to west palm florida. that's the fourth most popular, pittsburgh to new york coming in third. dubai to the uae, and then to london. surprisingly venezuela to miami, that was in there too. the number one fastest growing route, nice to new york. so a lot of new yorkers, nice to new york love southern -- >> russia's missing, notably. >> so moscow was in 2013 the top route in the world. now it's gone because the oligarchs are grounded. >> hard to travel if you're
1:53 pm
grounded. which we would know about when we were teenagers, brian? >> what? i was a saint, mandy. thank you. most of us are moving on. most of us would never dream about trying to become a doctor at age 40 right? 40 is almost dead. one wall street trader did just that. he didn't just dream about it, he went right after it checking to see if medical schools would actually accept somebody as old as 40. >> coming from france i said medical school is usually for people much younger. i didn't think it was even possible. possible. >> hi. i'm dr. passcalpascal i'm an anesthesiologist, but i used to work on wall street. my work in the financial services industry for close to 15 years. i started to work on the derivatives desk of banker's trust in the late 1980s. the big change really came when
1:54 pm
the world financial center on september 11th. my experience of 9/11 led me to volunteer my time. i realized that being involved in medicine was something that was really interesting to me. >> the night before i got married, my mother said to me, you do know you're marrying someone who i don't think is going to have a straight career path? i'm pascal's wife. >> i actually didn't think of going to medical school. i thought i was too old. i was about 40. >> but then i think we both kind of came to a conclusion that he needed to be a doctor. >> i think she had some questions, how are we going to do it? we had two kids at the time. so i decided, let's see if we can do it financially. working on wall street gives you the advantage, you're pretty well-paid, and i saved a lot of my bonuses. >> to be in your 30s and early 40s and suddenly you're not going to be at the top of the food chain anymore, but rather starting pretty much from the beginning. i think that pascal is a very courageous individual. i'm dr. eric shank.
1:55 pm
i'm the division chief for pediatric anesthesia here at mass general hospital. >> i did six years where you don't get paid. >> it was definitely an adventure. i think it's worked out really well. >> right now i'm an attending anesthesiologist at mass general and my other hat is i'm the interim director of the pediatric pain service. >> he's making a huge difference in the life of children here. >> every day that i get to work i now why i'm doing what i'm doing. that's a very valuable thing. >> according to the association of american medical schools, only 5% of med school applicants last year were over the age of 30. all right. a different kind of chase went down in manhattan last night. the fugitive a wiley coyote. new york city police pursued the canine. did they catch it? we'll let you know when "power lunch" returns. why pause to take a pill? and why stop what you're doing to find a bathroom?
1:56 pm
with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. why pause the moment? ask your doctor about cialis for daily use. for a free 30-tablet trial go to
1:57 pm
opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score powered by starmine, will help you execute your ideas with speed and conviction. and it's only on open an account and find more of the expertise you need to be a better investor. why do we do it? why do we spend every waking moment, thinking about people? why are we so committed to keeping you connected? why combine performance with a conscience?
1:58 pm
why innovate for a future without accidents? why do any of it? why do all of it? because if it matters to you it's everything to us. the xc60 crossover. from volvo. lease the well equiped volvo xc60 today. visit your local volvo showroom for details. you can see a lot of strange things in new york city but here's one that would make even a hardened new yorker do a double take. for the third time just this week, a coyote was spotted roaming the city streets. this video is from 10:30 last night. police followed the coyote in an attempt to coral it.
1:59 pm
but no luck apparently the coyote got away. but it could be the same coyote spotted three times. >> it absolutely could be. how would you tell the difference? they all look the same. >> ask it its name? >> ask his name. >> maybe he's got a little tag with his name on it. i don't think so. let's take a look at the markets here. you've got an intra-day high for the s&p 500, 2119 right now. this is the second day in a row, by the way, that it's hit a record high. let's get out to bob pisani who's been watching today's trading action at the new york stock exchange. how are traders feeling going into the weekend, bob? >> they want more volatility and more volume so they can trade more and make more money. but new highs, we're there, essentially. 2117 we need on the s&p. we missed it yesterday, we're there right now. we'll see if we can close above 2117 is the closing high. transports are down, but if you notice, the airlines are flying. did you look at american's number? take a look at dollar problems. record profits, but the strong dollar was a big problem for them. revenues were down in the
2:00 pm
pacific and latin america because the dollar was so strong, those revenues are going to decline in the second quarter because of the strength of the dollar. but look at these nice moves. american united delta, southwest up on a day when the rest of the transport complex are down. we're at new highs on all the major indices, but nothing is at a new high that's big except walt disney. historic high, right there. guys, back to you. >> sounding like a broken record there, bob, with all those records. that is it for the first hour. but you know what that means. brian, you've got the second hour. do not change the channel. >> all right mandy, thank you very much, and have a great weekend. appreciate it. it is now 2:00 on wall street 11:00 here in los angeles. i am still brian sullivan and stocks trying to round out what has been a great week. the s&p 500 hitting yet another intraday high but the nasdaq folks, that has been the story. it is up more than 3% in just five days. melissa lee joining us from cnbc hq today with more on some of those nasdaq movers. >> hi brian. going into earnings season the
2:01 pm
expectations were so low. here's an example of four stocks reporting better than expected earnings and helping to push the nasdaq higher right now. take a look at starbucks and amazon, both of these stocks hitting new record highs in today's session off the back of stronger than expected earnings last night. microsoft, up nearly 10%, but still under its 52-week high. and take a look at google those c-class shares are up about 129%. yes, 19% on the session, bri. >> the nasdaq hit a new nominal high, of course, but inflation adjusted, not to throw water on it, we would have to still get to around #,000 to be at the same level that the index was back in 2000. but that does not take anything away from the incredible run, nonetheless. let's dig in a little more on some of the big names. these are the so-called four horsemen of the nasdaq if you will. amazon google microsoft, and apple. now, year-to-date very different stock performances. amazon is up 43%. in fact it is the second best performer in the nasdaq 100 this
2:02 pm
year behind netflix. google up 8%. microsoft, a half of 8% and apple has done well one 17%. let's talk more about this. james, first to you. the surprise so far, at least to you, of the nasdaq this year. what is it? >> i think it's amazon. this is a stock that had been left, you know for dead for a while, with disappointing results and losses but what we saw for the last two quarters is not only the ability the to deliver profits, but do so fabulously. the thing that we did this week is we updated the stock right before the quarter, because the first time that we felt that we had a catalytic event by peeling the onion back and seeing what their amazon web sources business was doing. not only did we see that is their most profitable business but their north america core mature business is improving profitably as well. and that's the thing investors needed to see, greater conviction following the quarter. and i think, you know, you're going to continue to see numbers
2:03 pm
potentially creep higher, following last night's results. >> that is jason's top pick. are we learning something new about amazon. for about a decade everyone criticized the lack of operating margin. all of a sudden, we've got the web services that suddenly now is on everybody's minds. >> yeah we had an outperform rating on the stock for a while now, and part of this was, you know, if you dog into the web service positions, even a year ago, you could tell by talking to competitors that amazon was a real player. and while it was quote/unquote hidden in the results, you could basically parse it out. and we've looked at. ultimately two different companies of the parts, and really what drove the stock really up to yesterday, on some of the parts, if you were
2:04 pm
confident that aws that the street was not getting them >> i know your colleague covers microsoft, a lot of microsoft's story is the cloud as well who is amazon who is amazon taking market share away from? >> when you own the software it's microsoft, it's oracle it's those legacy database software, as you're moving to the cloud. part of it's two things. you have the processing right? you have the storage, and you have the software so historically, you owned your own computers, you know you had your storage, you had your processing, and you had your software. and while part of that obviously, with data centers has
2:05 pm
moved to share. and really it's sharing, basically share that cost, and what it results in you can do that. >> you're recommending clients buy amazon today. are you telling them this is because of the potential upside when it comes to the retail business, or is it all the potential of the cloud? >> it's both really. because what we saw last night, was a pathway to you know, what the longer term margin profile of this business can look like. when you have incremental margins for the retail business in the high single digits you know -- and the third party mix, which is the third party sellers, the higher margin being the fastest growing component, you know you can see a north american margin in the high single digit range, and international could scale there over time as well. and with amazon web services actually coming in i think, well ahead of our expectations as well as the rest of the
2:06 pm
street in terms of profitability, i think you can make a very solid argument there that, you know it deserves a premium multiple. so despite the run-up today, i think you can make a case for a much more even bullish case on amazon. >> guys, going to leave it there, thank you. jason and james. shares of our parent company, comcast, slightly higher on the session after dropping its bid for time warner cable. you can see time warner shares moving higher on the news. here's what comcast ceo brian roberts had to say earlier on cnbc. >> obviously, we wanted to bring the products that we've got, that we're very proud of to new markets, but it's not going to happen. we reached that conclusion, we always structured this deal in a way that would allow us to walk away if it looked like it wasn't going to happen and that's where we're at. >> so now that the comcast/time warner cable deal is not happening, can we expect other deals in the cable space? amy yellin joining us now.
2:07 pm
amy, you believe that charter communications could now go after time warner cable, but charter is literally half the size of time warner. why do you think charter would be able to pull something like that off? >> i think that's why the deal would be viewed very differently from a regulatory standpoint than let's say, comcast and time warner cable. charter has about 5,000 or 6,000 subscribers and buying time warner kab would allow it to triple or quadruple in size. you're right, they're much smaller than time warner cable, but i would also say, they have the backing of liberty media and liberty broadband, which is john malone's investment vehicle in cable. so that gives him a lot of financial firepower to pull off a deal like this. >> how much would you put the likelihood of a deal like that happening? >> very high 80 90%. i think the big question is -- >> that high -- >> go ahead. >> would that be a reason to avoid charter? even with the backing of billionaire john malone if i think a company going after
2:08 pm
someone twice as big, i'm thinking, what are they going to do dwm do? lever up with debt? is it a reason to buy or completely avoid charter? >> i think that's why charter's down. there is an embedded m and a premium and the m&a playbook did not play out the way we thought. and the question this time around does time warner cable get the premium or charter get the premium? >> when the news first crossed yesterday that the deal could potentially be off, directv jump ds ed on that news, hit a new 52-week high. it's trading and telling us that it's in play. is it? >> directv -- >> i mean, it's tied up with at&t already. >> i think at&t management team actually reaffirmed that their deal with directv would close at the end of may, but certainly, this brings up the option that perhaps dish could come in. you never know. i think investing in the space, regulation is always the number one risk.
2:09 pm
>> all right. we got a good look at my hair part as well. thank you very much. here is your power menu for the rest of the hour. much more from california and why it is not easy being green, especially when you're in the middle of the worst drought in the state's history. also, comeing your way, the war for your wrist. what app makers are scrambling to get on to the new apple watch. and a one-two punch in las vegas. it is not just mayweather/pacquiao, we'll tell you about two big-money fights going down in sin city. "power lunch," coast-to-coast, will be right back. financial noise financial noise financial noise
2:10 pm
my feet felt so heavy at the end of the day. they used to get really tired. until i started gellin'. i got dr. scholl's massaging gel insoles. when they're in my shoes my feet and legs feel less tired. it's like walking on a wave dr. scholl's massaging gel insoles, i'm a believer!
2:11 pm
2:12 pm
all right. we just finished up an interview with amy, who suggested she put it at 80 to 90% chance that charter communications could make a bid for time warner cable. literally, just a moment ago, dow jones coming out citing sources, again, this is not coming from charter or time warner cable, but dow jones citing sources that charter could approach time warner cable with a bid soon so either dow jones just watched our interview, or they have other sources that suggest a charter bid could come soon. those are obviously now stocks to watch. time warner cable and charter cable, as you can see, are on the move. all right, a few stores in america are just you can walk in and buy an apple watch right now. everyone else who pre-ordered them is going to start to receive them in the mail today. and as those apple watches arrive, a new battle is forming in tech. josh lipton is live in our san fran newsroom looking at the war for your wrist.
2:13 pm
josh? >> reporter: well, brian, excitement for this device continues to build. in fact, i was just told tom brady, patriots qb, just showed up a t the fifth avenue store to try on his watch. maybe tom brady has been listening to tim cook who's been making the strong pitch for this new watch. cook emphasizing the quality, the precision, and convenience of that time piece. but the product success will depend in large part on apple's very deep bench of developers. they now need to design engageing apps that are wearable. already, there are over 3,000 apps available for the watch. right now, a lot of the attention is focused on apps for consumers, but companies are also betting that the apple watch could play a big role in the workplace. the idea is that business apps could help professionals work more efficiently, stay better informed. >> you're a sales manager and you get a quick notification that you're about to lose a deal
2:14 pm
on price, that's the kind of thing you want to react to in five minutes. if you can't react quickly enough, you can lose deals that way. >> tech giants are taking note of this. you saw sales force, just for example, had designed an app for the watch, allowing users to get real-time alerts and view dashboards. microsoft also involved its app, users will be able to remotely control power point slide show on the iphone. of course there's going to be challenges with using the watch in the workplace. the most obvious, overloading workers with too many notification. companies feed to figure out which notifications are important enough to actually send to somebody's wrist. otherwise, of course they could just be distracted or annoyed. but workers do seem open to the idea of using a smart watch in the office. of those who plan to buy the apple watch, more than 90% do want to use that device for work functions. that's according to a recent poll conducted by mobile iron the mobile software company. brian, back to you.
2:15 pm
>> all right, josh lipton thank you very much. and by the way, this is video of the cnbc app, which you can also download to your new apple watch. it has your favorite stocks the indexes you follow headlines, you name it all on your wrist. all at the touch of the screen. melissa, we can literally sit and stare at ourselves all day long. >> you can do that brian. in the meantime let's get to sue herrera with some developing news. sue? >> melissa, we are basically following a story that continues to unfold at this point. the statue of liberty and liberty island being evacuated right now. wnbc's jonathan dienst reporting that apparently there was a dog, a bomb-sniffing dog that hit on an item in the locker area where visitors leave their belongings before they somewhere the statue. at a similar or same time someone phoned in a general bomb threat to the statue. those two factors together are what led to the precautions that are now being taken.
2:16 pm
the nypd bomb squad is en route to help with that investigation, but we should stress there's no known device at this time. but out of an abundance of caution, they are performing that evacuation. so we'll keep you posted on anymore news that comes out of that particular situation. melissa, back to you. >> thank you, sue. let's get back to the apple watch here. with me now, cnbc's eunice yuan. and the first watches are starting to arrive but already we're starting to see some knockoffs. >> like this one. the iwatch it's been out for two months. you know how josh was talking about how notifications an issue, i don't think you'll have a problem with this watch. it looks a lot like the apple watch, but -- >> does it work? >> it does but it doesn't have a touch screen -- it has very basic functions, like -- >> like the time. >> it's 2:15. but it does have a pedometer, as well. so it can, in some ways monitor your health. but overall, functions are very,
2:17 pm
very basic what do you expect though $30. >> it's $30. >> between $30 to $50, depending on how good your negotiating skills are. >> this is pretty close. >> it is. >> i mean, you've seen the actual apple watch, correct? >> yeah. >> there's very little difference. aside from the functions. >> aside from the functionality. although it is getting better and better at least that's what we're being told. this one also syncs with android phones, not an iphone. >> i see. >> and that is another main difference. >> and ai in chinese, love watch. eunice yuan, thank you. brian? >> i think apple would say nay to the ai watch. if you are -- up next damned if you do and damned if you don't. how some residents here in california are facing fines for not watering their lawn or pulling it out. that's right pulling it out. and dramatic helmet camera video
2:18 pm
inside a massive mansion fire. full details on where that happened and where, when we return.
2:19 pm
2:20 pm
you can call me shallow... but, i have a wandering eye. i mean, come on. national gives me the control to choose any car in the aisle i want. i could choose you... or i could choose her if i like her more. and i do. oh, the silent treatment. real mature. so you wanna get out of here? go national. go like a pro.
2:21 pm
dramatic video from a firefighter's helmet camera captures a massive blaze in a new jersey mansion. it took six hours and dozens of firefighters to bring the blaze under control. no injuries were reported. brian? >> well earlier this month, california governor jerry brown ordered statewide water cutbacks. that forced residents to cut their water usage by 25% if for californians like sylvia morales, it has impacted everything from washing clothes and dishes to even using the bathroom. i'm doing larger loads of laundry. we're not washing the cars at home. we've cut back on the timers on the lawn. we have taken shorter showers. even washing dishes we've cut back on that -- the water that we use. now, morales lives in the l.a. suburb of covina and says she's hoping to rip out her front lawn as soon as possible and replace it with drought-resistant
2:22 pm
landscaping. she also notices many people on her street are simply letting their lawns die. drive around southern california suburbs and you'll see a lot of brown lawns as the city threatens fines for water wasters. speaking of that, here's something that is just so very california. some residents are trying to do the right thing and rip out their lawns in favor of natural landscaping or artificial turf but get this? now some homeowners are reporting they are being fined by their homeowner's associations which sometimes require a natural lawn or ban the use of artificial turf. some lawmakers are now working on a bill that would end that. so in other words, melissa, the state is saying that you've got to cut back on water, they're even paying people to rip out their lawns, but now homeowner's associations are just fining people -- >> that's ridiculous! for the homeowners to bother going of these people when there is a drought in a state. that's all i have to say.
2:23 pm
>> you know if you belong to an hoa, which thankfully i do not, you know that some of them are just a little bit, shall we say, crazy! melissa, thank you. let's take a look at the state of big business here in los angeles. our exclusive power city indexes on the "power lunch" show which is very fine from what i understand, track the performance of the biggest publicly traded companies in 30 cities and different metro areas. on a year-to-date and 12-month basis, los angeles has, indeed been outperforming the dow jones industrial average. of the 12 stocks that are in that index, l.a.x. is up 2.5% year-to-date, and up 12% over the past year. among the year-to-date leaders here are disney it is up 16%, aecom and teledine technologies. and although it is outperforming silicon valley and the dow its sometimes hated neighbor to the south is crushing it this year. san diego's power city index, the 12 biggest companies there, up nearly 20% just this year if
2:24 pm
san fran up about 4%. l.a. up 2.5% and silicon valley up 1%. san diego getting a huge pop from its high level of biotech stocks. well when governor brown ordered that 25 pact cut in water use, he pretty much drew a bull's-eye right on the state's home builders arguably one of the biggest water uses around. our next guest says hang on a minute, we are not the enemy, we may actually be part of the solution. david heads up california building industry association and we welcome him to "power lunch." david, your reaction. first, it was the almond farmers. now it appears the builders are in the crosshairs. your reaction. >> well i certainly don't see it that way at all. we have been very pleased with the governor's measured response to this very real crisis and is calling certainly for sacrifice from all of us. one of the things we're proudest of, the building industry in this state, is the fact that for decades now, we have been on the
2:25 pm
forefront of trying to move california to a more water-efficient point. in fact, the homes that we produced today are twice as efficient in their water use than the product that was created back in 1980. and we've been a very big part of the california green building codes and moving those forward and will continue to do that. there are certainly plenty of solutions to this crisis and we want to be part of that effort. >> i'm going to show my ignorance here david, because when thing about building a home, i don't necessarily think about water use. maybe there's something about building a home that i don't understand. how much water does building a new average-sized home use? >> well today our homes average about 46,000 gallons a year in usage, that's compared with around 92,000 in 1980. so we've become twice as efficient as we were then. we've done an awful lot inside the home and in fact most experts believe we've done just
2:26 pm
about all we can do inside the building itself. the gains that will be made using forward will be in the areas of outside landscaping and we continue to push for model landscape ordinances to be adopted throughout the state and our members are certainly, again, very proactive in trying to find solutions to save even more water from an irrigation standpoint outside the home. >> so they're not necessarily coming at you guys -- i assumed it to be from a building the home perspective, maybe uses a lot of water. it sounds like they're just saying, we don't want anymore homes? >> well we think that may be part of it certainly, in the mind of some people. but again, when you realize that we're a very large part of the california economy. in fact we have done a lot to bring us back from the awful recession that we all experienced a few years ago. we contribute close to $40 billion worth of economic activity to the economy today,
2:27 pm
and that's building at a much lower capacity than what we have in the past. we're only meeting about half the demand in this state. >> all right. david, it's a pleasure to have you on "power lunch." thank you very much. >> thanks for having me. >> the final oil trades crossing for the week. we'll get to jackie deangelis live at the nymex when "power lunch" returns. stick around. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver?
2:28 pm
2:29 pm
2:30 pm
hello, everyone. i'm sue herrera and here is your cnbc news update at this hour. iraqi troops fighting militants in anbar province say they have recaptured territory and killed 250 militants. but much of that province and still under control of isis including the capital, ramadi. actress angelina jolie addressing the united nations pleading world leaders to help millions of refugees in syria. as a special envoy, jolie has made 11 trips to visit with refugees since the crisis began four years ago. elaine wynn will not return to the board of the casino hotel company she co-founded with her husband, steve wynn. that's based on preliminary votes by shareholders.
2:31 pm
and the world's first malaria vaccine could soon be approved by international regulators for use in africa. final trial data has showed it offered partial protection for up to four years. the vaccine made by glaxosmithkline is designed for use on children. that is your cnbc news update for this hour. back to you, brian. >> all right sue, thank you very much. with loretta lynch confirmed as new u.s. attorney general, eric holder preparing to depart. today marks his last day on the job. eamon javers live in washington. >> holder making some remarks here in washington, as you say, on his last day on the job. loretta lynch will be sworn in at the department of justice on monday. and we're learning today, among eric holder's last acts as attorney general was getting involved in this debate over the comcast comcast/time warner merger. i talked to a doj official earlier today, who told me a couple of weeks ago, department of justice staff went to attorney general holder with their recommendations that that comcast/time warner merger be
2:32 pm
blocked and that attorney general holder concurred with them, told them to proceed with it, and that set in a chain of events, in which department of justice staff met with comcast officials and told them where they were headed with this. they offered the dodgej tells me the opportunity to continue with a series of follow-up meetings. but at some point yesterday, comcast decided to throw in the towel, officially giving them the news they were pulling the plug at 7:30 on a conference call with justice officials. and today as we watch holder making his remarks on his last day in office, your mind kind of goes back to all of the big business decisions that he's been involved in along the way, including the big jpmorgan, $13 billion settlement over mortgage issues, and this question that has dogged him throughout his tenure, whether or not big american companies are, with quote, too big to jail. let me play a little bit of testimony from eric holder back in 2013, that has really framed
2:33 pm
this debate. here's eric holder talking on capitol hill back in 2013 asked whether or not major american companies are, in fact too big to prosecute. here's holder. >> i am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge it will have a negative impact on the world economy. and i think that is a function of the fact that some of these institutions have become too large. >> so there, brian, eric holder seeming to suggest that some institutions are too large for the dodge to go after, without repercussions. later, though he said that there are no companies that are too big to jail so to speak, in the american economy. so, holder really bringing up this debate and that's going to be one of the debates over his legacy, going forward, brian? >> all right, eamon javers.
2:34 pm
thank you very much. oil is down slightly right now, but it may close higher for a sixth week in a row. >> good afternoon, brian. it's interesting, we're used to seeing swings in either direction that show that the market is positioned one way or another. today we saw lack of conviction really. wti lower, around $57 a barrel. brent was up for most of the day. then it turned negative. it managed to finish a little bit higher as well. profit taking definitely on yesterday's gains. also some position swearing as we go into the weekend. we did get those rig count decline numbers, she meant to say, 20 straight weeks of declines, but the market shrugging that off, really because it's looking for hard data on production. it doesn't even care about the inventory numbers that much that we get on wednesdays anymore. wti, according to traders, probably going to be rangebound until the next catalyst $55 to $58. back to you. >> all right, jackie d. thank you very much. let's get on now to trading nation and take a look at
2:35 pm which is surging after earnings. jason robbins specializes in technical analysis. gena sanchez, a macrostrategist. jason, let's first look to you and the charts. do you see more upside in amazon, which has already had a red-hot year. >> it's had a red-hot year but i do see more upside brian, for one major technical reason. hopefully you have the chart up there. what i did, i connected the highs of 2011 and 2014. that's basically the supply line. so i think -- there's going to be major demand, until amazon reaches that supply line which is still 20% away if you're talking about an end-of-year target. if you look at the supply line basically, december 2015 several months from now, that's a $550 target. that means amazon i think, has at least 20 to 25% upside starting now. >> wow. more upside there. jena sanchez, fundamentally, does it go along with the bullishness that jason
2:36 pm
has technically? >> well interestingly, i think amazon's tag line should be go big or go home. that's obviously what they've been trying to do. and the market clearly focused on their outperformance on their revenue number and shrugged off the loss number. the loss is smaller than it was last year. that's a good step in the right direction. but the fact of the matter is that what's showing a tremendous amount of growth is their web services and their cloud computing segment. and that brings so much economies of scale to businesses that i do think that this is something that is very very real and could be very big for amazon and this is exactly the right move and i think investors are probably going to continue to buy this. >> and those who have bet against it have just done nothing but lose money for the last decade. jena jason, thank you so much both very much. for more trading nation you can head to our website, as always, don't forget the dots. let's look at shares of aerie
2:37 pm
pharmaceuticals. a huge hit, losing more than half of its value today. and coming up we'll hear from the ceo of coco-cola why diet sales are going flat. >> i'm matt patrick and i get paid for this. what it takes to be a geologist coming up on "power lunch." now the latest from and a word from our sponsor. >> traders should also be investors, so it's important not to actively trade your entire portfolio. instead, carve out maybe 20 to 30% of your portfolio and keep your core holdings in a well-diversified account. that way, if you go through a period of underperformance you won't put your entire portfolio at risk. ven on the go. tdd# 1-800-345-2550 open a schwab account and you could earn tdd# 1-800-345-2550 300 commission-free online trades. tdd# 1-800-345-2550 so when a market move affects one of your positions, tdd# 1-800-345-2550 schwab can help you decide what to do. tdd# 1-800-345-2550 with tools like free live-streaming cnbc tv tdd# 1-800-345-2550 that
2:38 pm
give you the latest financial news and trends. tdd# 1-800-345-2550 and bubble charts and price charts that let you see exactly tdd# 1-800-345-2550 how market activity is affecting your positions. tdd# 1-800-345-2550 so when the time comes to decide whether to scale in tdd# 1-800-345-2550 or scale out you can make your move, tdd# 1-800-345-2550 wherever you are. tdd# 1-800-345-2550 and start working on your next big idea. tdd# 1-800-345-2550 ♪ ♪ open a schwab account and you could earn tdd# 1-800-345-2550 300 commission-free online trades. tdd# 1-800-345-2550 tdd# 1-800-345-2550 call 1-877-729-2379. tdd# 1-800-345-2550 or visit tdd# 1-800-345-2550 schwab trading services. tdd# 1-800-345-2550 your go-to for trading know-how. tdd# 1-800-345-2550 ♪ ♪ [ male announcer ] eligible for medicare? that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company.
2:39 pm
like all standardized medicare supplement insurance plans they could save you in out-of-pocket medical costs. call today to request a free decision guide. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients. plus, there are no networks, and virtually no referrals needed. join the millions who have already enrolled in the only medicare supplement insurance plans endorsed by aarp... and provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. with all the good years ahead, look for the experience and commitment to go the distance with you. call now to request your free decision guide. ♪ ♪ o0
2:40 pm
if it was the pepsi stock challenge, pepsi would beat coke hands down. pepsi shares up about 11% over the past year while coke is up just half a percent. in fact, coke shares basically at the same price since mid-2012. coke executives have some big plans to turn that around. sarah eisen at coca-cola headquarters in hotlanta georgia, and talked to coke execs about declining diet sales. is it true that the term "flavor
2:41 pm
profiles" was used? >> reporter: that is true, brian. yes, that's corporate speak. diet is a big question mark especially for coke and what you're saying is trying to get back to growth calls this a transition year. diet coke is obviously its second biggest drink, but in the united states last year diet coke fell to third place in terms of u.s. sales, slipping behind regular pepsi, and just a further reflection of the decline in diet soda consumption. and pepsi coming out today, announcing it's taking aspartames a peraspartame out of diet cola and go with splenda. >> diet's going in the rest of the world. coke zero's growing, coca-cola light is growing, which is a derivative of diet coke in the rest of the world. so purely in the united states diet coke is -- has been under pressure the rate of decrease is
2:42 pm
slowing down. >> yep. >> and i think it's work in progress. >> so he says there's growth outside the united states and inside the united states a work of progress. coke came out with a statement afterwards, saying we are sticking to our ingredients, unlike pepsi, in diet coke. and in fact i also got to talk to coke's head of sparkling for north america, head of sodas, wendy clark, about this very ingredient in question. >> aspartame gets a lot of conversation and it is the most contested ingredient we use in our beverages. it's had over 200 studies, been cleared again and again by numerous regulatory bodies, and part of us is us making sure that that education and awarps is out there and reinforcing to consumers that it is perfectly safe to drink. >> so coke says it is safe and regulators, by the way say it is as well but it continues to be a debate and we'll see where the consumer goes on this brian. obviously, the two biggest beverage makers are going in very different directions.
2:43 pm
and that's why a big part of the story here at coke is also on innovation, in terms of natural sweeteners. they've put out coke life they're using stevia and also exploring other natural sweeteners. that's going to be the next race when it comes to where the consumer is going. they want natural, they don't like these artificial sweeteners. we'll see if they can get growth back when it comes to diet coke. >> and sarah, i have a challenge for you, if you will accept it. i want you to stroll around downtown atlanta drinking a 2-liter bottle of dr. pepper. are you up for that? thumb your nose at both. >> that would be sacrilegious in this town let me tell you. you only see coke here. >> all right, you do not have to take it up. sarah eisen, safe travels. we do a weekly series here on "power lunch" and profile people who have got some pretty cool jobs. but today, cool might not be the right word. take a look. >> i'm matt patrick and i get paid to be a geologist.
2:44 pm
our day-to-day really involves checking the monitoring streams from our field instruments in the office and analyzing the data, but also going out in the field and mapping the lava flows and going on helicopter overflights to get a wide view of the activity. one of the ways that we monitor the ongoing activity is to look at a composition of the lava. it involves us walking out to the active lava flow and wear protective gear, like a fire-resistant suit and using a rock hammer to dip it into the fluid lava. when you walk up to active lava it's incredibly hot. it's like being close to say, an oven. just the radiant heat can be really really intense. with volcanic activity there's a lot of gas coming out of the vents. so often, there'll be sounds of gas jetting and kind of rumbling, gas screaming sounds. the thermal camera is really useful, because it gives us a very clear indication of what's active and what's inactive. it's much easier to see that than with the naked eye and
2:45 pm
gives us a better idea of anticipateing where that lava might flow. the most important part of our job is the hazard assessment and communicating the potential hazard of a volcano to the emergency managers and the public. the thing i enjoy most is the fact that things change here every day. >> so to find out just how hot patrick's office gets, go to, melissa. >> looks a lot hotter than an oven, brian. this is why investing in biotechs can be scary. one day you've got a stock worth "x" and the next day it's worth half that much. we'll get to the bottom of today's big drop in ari pharma. have you heard of a stale home? the newest drop in the housing market when we return.
2:46 pm
am never getting married. never. psssssh. guaranteed. you picked a beautiful ring. thank you. we're never having kids. mmm-mmm. breathe. i love it here. we are never moving to the suburbs. we are never getting one of those (minivan). we are never having another kid. i'm pregnant. i am never letting go. for all the nevers in life state farm is there. [ male announcer ] legalzoom has helped start over 1 million businesses. if you have a business idea, we have a personalized legal solution that's right for you. with easy step-by-step guidance, we're here to help you turn your dream into a reality. start your business today with legalzoom.
2:47 pm
2:48 pm
well if you leave bread out for too long it goes stale, right? evidently, the same thing happens with homes. if you leave them on the market
2:49 pm
for 30 days. diana olick has a look at what stale homes are doing to the housing market. diana? >> melissa, the short answer is, they're making it even tighter than we think. we know listings are way down but not every house is the same of course. take, for example, this one. it's been on the market since late february even though inventory in this desirable, pricey d.c. neighborhood is down 24% from a year ago, and demand is very strong. now, it's been fully renovated, enlarged, pristine inside, owned by a builder who's actually flipping it so why isn't it selling? well, the realtor says it was priced ambitiously, at $1.45 million. they've just lowered the price, still, the home is what realtors now call stale. nearly three quarters, actually of the homes for sale today could be characterized as stale, on the market for more than a month, according to real estate brokage red pin. in some markets like charlotte, north carolina it's even worse. 95% of the market stale. but does a house really need to sell in 30 days? well historically no.
2:50 pm
but today, yes, because of this. umpteen apps that tell every potential buyer out there every last detail about every house, every comp every block of every neighborhood. so buyers block of every neighborhood. buyers know literally in seconds what they see and whether it's a good buy. it seems that things can get stale a lot quicker nowadays than they ever could before. if you want to hear more from the ceo of red fin on this we have it online realtycheck.cnbc. come. aerie pharmaceuticals losing more than half of their volume today after bad news about the company's key drug. that's why so many investors play in etf, like the ibb up nearly 60% in the past year. >> this particular one stock, which is really an example of why biotech investing is not for
2:51 pm
the faint of heart. aerie is working in glaucoma pressure of the eye disease which analysts say is i $4.5 billion market already. there hasn't been a new mechanism of action in almost two decades. aerie had a phase three trial. the stock had more than doubled leading into the results coming out last night. when this phase three trial read out, they missed their primary goal of the study. a subsection of patients did benefit from the drug but on the whole, the study failed. that's why you see the stock down 60% today. >> does this mean that the drug is just dead? there's no further potential or what can the company do at this point? >> they've got another phase two -- sorry, phase three in the works called rocket two. analysts are speculating on whether they could change the end points with the fda to address that subsection of patients that look to benefit. it's unclear right now. the company forging ahead.
2:52 pm
time lines are getting pushed out. >> thank you. meg tirrell. a huge brawl last night between the kansas city royals and the chicago white sox. earlier in the game each team had a batter hit by a pitch. then this play when the royals pitcher had something to say to adam eaton. the benches cleared. there was an actual punch thrown, though there was a well-timed trip. if you like that fight, there are two even bigger fights coming in las vegas. pacquiao versus mayweather. even the cheap seats, he said by the sea shore aren't cheap. there's the other fight of the century, steve wynn against his ex-wife for the battle observe their company.
2:53 pm
"power lunch" is back in two when we sell seashells by the sea shore. you can call me shallow... but, i have a wandering eye. i mean, come on. national gives me the control to choose any car in the aisle i want. i could choose you... or i could choose her if i like her more. and i do. oh, the silent treatment. real mature. so you wanna get out of here? go national. go like a pro. good. very good. you see something moving off the shelves and your first thought is to investigate the company.
2:54 pm
you are type e*. yes, investment opportunities can be anywhere... or not. but you know the difference. e*trade's bar code scanner. shorten the distance between intuition and action. e*trade opportunity is everywhere. well, a mortgage shouldn't be a problem your credit is in pretty good shape. >>pretty good? i know i have a 798 fico score thanks to the tools and help on kaboom... well, i just have a few other questions. >>chuck, the only other question you need to ask is, "what else can you do for me?" i'll just take a water... get your credit swagger on. become a member of experian credit tracker and find out your fico score powered by experian. fico scores are used in 90% of credit decisions. ♪ ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ ♪ she can print amazing things
2:55 pm
right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ ♪ my mom works at ge. ♪ ♪ you are looking at pictures of what a new football stadium in los angeles might look like if it was built. the pictures were released by the architectural company in charge by the new stadium. the plan is for los angeles to get my beloved san diego chargers -- don't go -- and the oak lane raiders to share that stadium.
2:56 pm
the proposed stadium would cost $1.7 billion. it would also be in the l.a. suburb of carson, california. and of course this is all preliminary. a lot still needs to happen for all of this to become a reality. >> divorce can be ugly. it gets nastier when millions and billions of dollars are on the line. steve wynn and his ex-wife have been fighting over her seat on the company board. >> reporter: it's a wynn/wynn battle which ended up in a loss for elaine when she was voted out of the company to help build. she said, today is the day it's all over. the board wanted to sue steve wynn's ex many individual shareholders who shared up supported her, though not all. >> i voted for elaine. i just thought -- i like the idea that she helped develop the
2:57 pm
properties. she's a keen interest in it due to the fact that she has owned so many shares. >> i pretty much voted the board recommendation. >> why? >> because i've been disappointed about the contention that's presented itself with elaine's suing of people on the board and i think it's hurting the stock price. >> now, wynn was the only woman on the board. the board is now searching for another independent director, it says who will bring diversity. >> i have a question here. there's another huge fight in las vegas, mayweather/pacquiao. the price of the tickets are re ridiculous. are you seeing any action out there. >> that fight is a real fight. behind the scenes it was a fight, too. the tickets have sold out. they're reselling, i saw the highest at six figures. the fight next weekend guarantees pacquiao 80 million,
2:58 pm
mayweather 120 million. could go higher. >> the only reason this fight happened was because you were willing to take less than half. >> yes. 60/40, agreeing what he wants. >> i never waited so long to do any fight. everything is about timing. >> all right. you can only see the fight in las vegas. if you're at an mgm property on tv. it's being blacked out everywhere. all the closed-circuit convenientvenues have sold out. what about meerkat and periscope? >> we have a team of pirate catchers sitting at desks with the way these people do it. i'm not telling you how because i don't know. they shoot down the streams. it's almost like a video game. some stream up boom they shoot it down. >> i'm not sure he ever heard the word meerkat before. we'll be previewing behind the
2:59 pm
scenes of the fight of the century. back to you. >> i have breaking news by the way. i'm sitting at your desk. and there's a -- there's a joint picture -- i >> i want that chair die clean ed -- dry cleaned. >> you have a giant picture on your desk. can i have it? >> i was at a bank robbery in palm springs in that picture. >> just where a pregnant woman should be. >> i want to sing praise. some guy on twitter said i was fat. you came to my defense. for that jane i will always love you, like celine deon. >> i love you, too. >> thank you. >> thank you, jane. tonight on "fast money," brian, we talked about the iwatch. we have the ceo of i fix it. we'll do the watch teardown and trade it. tonight at 5:00. >> we'll be out here all next week, most of next week. some amazing guests for the
3:00 pm
first couple of days for next week. i have to spend the weekend in l.a. melissa. >> don't say that. >> i know. and miss all the tuxedos in d.c. how will i survive? have a great weekend. "closing bell" starts right now. thanks for watching, everybody. hello, happy friday. welcome to the "closing bell." i'm kelly evans here at the new york stock exchange. >> i'm bob pisani. it's shaping up to shall another historic day which is on track for a closing high. the real question is whether the rally is for real or if we're facing another bubble in the tech sector. we'll talk about that shortly. >> the s&p 500 trying to match the nasdaq and close at its own new high. number to much wa there it is 2117.39. the level that's been driving


info Stream Only

Uploaded by TV Archive on