tv Street Signs CNBC July 22, 2013 2:00pm-3:01pm EDT
well, the modest advances in the dow anyway have led to a decline of about nine points. we're in the negative on the dow but the s&p, nasdaq and russell on the plus side. biggest s&p 500 winner is newmont mining. back over to you. >> that does it for this edition of "power lunch." >> "street signs" begins now. >> should you boy, sell or hold the housing market? we'll dig into the real reason home sales dropped and why it may not be a bad thing. the latest on the fight to stop detroit's bankruptcy from going forward. will it work, and the adds that another big midwestern city, chicago, could follow in detroit's path. plus, the next big thing that's already a big thing but may become a bigger thing, and what everybody is doing that has some market watchers getting a little nervous. happy monday, all it. may be a new week but the same
hot stock market. a cornucopia of new all-time highs for you and the reason is simple. people are coming back into stocks. a new report shows that investors poured a stunning $19.7 billion into stock funds last week. that is the most in six months. look at that chart, if you're on the radio it's a line that goes up. bob pisani is at the new york stock exchange. bob, we like to find fancy reasons for market moves but here's the thing. stocks rise when there are more buyers than sellers. there's been a lot of buyers but is that inflow a reason to wore? >> no, i'm not sure it's a reason to worry. i'll tell you that we have seen enormous inflows in the last week into stocks, the biggest we've seen since the beginning of january because i'm not sure there's many alternatives that are out there, brian. globally there isn't, and in the u.s. there's not a lot of other investments doing nearly as well as the stock market right now. i'll show you what's going on.
we've got mild gains, enough to put most of the major indices at highs. japan's got a clear victory for the current prime minister, the portuguese government intact. that's helping europe a little bit. earnings have been missed, and those inflows into the stock, and i think that's a major influence. last week, brian, we had the biggest inflows in the stocks and put up the next screen since early january. 28 straight weeks of inflows into the stock market. even the bond market isn't having the outflows that we thought we'd be getting and bottom line stocks are the place to be and wonder where the earnings are, i know they are not great but very good at financials and every single day since the earnings seasons started, the financial stocks have been outperforming and here's the big guys. not claim these are huge gains but on a flat market day that's pretty impressive and it's been going up almost every single day. one stock, not quite sure what's
going on. a huge move all of a sudden, traded and then all of a sudden blew up, halted because it moved so quickly and trading again right now. trying to get more information but no immediate news and still trying to figure out why the stock moved so much and get you more on that very shortly. >> brian, back to you. >> keep your eye here. back at hq. the big market head hine this hour is gold, having its best one-day gain in more than a year. joining us is frank mcgee, precious metals dealer. frank, having its best day in a year, had a nice bump off of its lows. what the heck is going on with gold? >> predominantly seeing major technical buying and a significant amount of hedge fund buying and followed through into london and into the u.s. session. nothing external and predominantly internals on the market. it's taken us up to a point where we're more fair valued
back into the technical resistance and could see the meteoric bounce show down significantly in the next session. >> how significantly? >> well, you know, as i was on before, i'm still ultimately a bear on this market. can't argument with this market where it's priced and how it decides to go there. as soon at hedge funds decide to turn, they will all turn again, they are pack animals and we can come off fairly quickly. right now we've regained, i would say, a fair valuation. we got into the lows too fast and probably come back here a little bit too fast as well. >> what's going to make you change your tune on gold? i know you're bear everyone, when do you throw in the old golden towel? >> i really don't see it until we see a true selloff in the stock market. gold's going to have a very hard time fighting against this continued rally. if we get a horrendous break in the stocks or a slowdown and this sort of exuberance in the market and right now the rallies
are something you need to ultimately sell. >> frank says sell this gold rally and time will tell if you're right. >> all right. from stocks to gold and housing. existing home sales dropped last month. diana olick, is this a reason to worry? >> reporter: no, it's not a reason to worry, but existing home sales was a dig disappoint in june and what's interesting is this story for june is already old because the june numbers are not affected by the recent spike in mortgage rates, sales fell and were revised down in may. these are closings, contracts signed in april and may before the rate spike. inventories rose under 2% month over month and down 8% from a year ago and that's nationally. supplies are even tighter in certain local markets, especially out west and in the northeast. realtors today said they were very disappointed in the drop in housing starts in june reported
last week. tight inventories are pushing prices higher. the median price of an existing home, up 13.5% year over year. much of that is because fewer distressed homes are selling and investors are moving out of market. sales of homes priced under $100,000 fell 20% and sales of homes priced over $1 million jumped 25%. investors on the low end, they are out and the moveup buyers are coming back in but that's a little bit worrisome because they are much more worried about interest rates, especially when they are in the higher rate markets. >> look at the home inventory, the number of homes up for sale, well off its highs and sellers sitting on their hands. not putting their homes on the market. let's bring in our guests.
professor, is it possible home sales are down simply because there are not homes out there that people want to buy? >> reporter: and there are not homes out there that people want to sell. people are staying in their homes. they are staying in their homes because they have to. they can't get a mortgage and because they want to. prices are going up. they see their own recovery happening. >> got people on our own show here looking to buy a home and they are depressed bus there's no good homes that we're seeing on the market. is that a reason we're seeing the drop. >> there's 1ment 3 million peoples in some type of a distressed situation. when you lock at why people aren't selling as well, there's over 56 people are not under water and less than 20% equity. after you take out real estate
commissions and everything else you don't have anything to take home. >> the one thing i do worry about is sellers are starting to fell a little better after five years of pain. maybe they are holding out and saying let's just wait a little bit when the market goes up and everybody puts the home on the market at the same time and prices tumble. is that possible? >> they won't do that. they have held on this long, they will hold on more. these are those who want to stay in their home and some looking for jobs and they will move when the jobs become available elsewhere, when prices go up, their prices are going up, and more to the point, we've got something else going on here which is the spike in interest rates which isn't in the numbers yet but will be in the numbers and there's a threat of further spikes down the loin. >> that's interesting, you know, tonya, because what the professor is important and no sense to anybody else in my
industry. these houses were brought on rates set back in april. sorry if i got that wrong but the professor is saying it could be a problem. >> i disagree. i think we offbeen accustomed to 3.5, 4 mortgage rate. you really -- it only goes up to 220 at 4%. that a good realtor should be able to negotiate so this little bit of jump-in rate is just a scare, but really, i bought my first house at 12%. affordability is at an all-time high and prices and rates still low, regardless if they go up a little bit. nobody thought the rates were going to last forever. >> you're making too much sense but people get addicted to things when they are cheap and everyone is screaming that rates might go to 5, oh, my gosh, 5%, by the way was gold a few years
ago. >> 5% is a relatively low mortgage rate, but guess what? if you have a 3.5% mortgage rate you're going to want to keep that if you're lucky enough to refinance. you want to keep that one. >> and we haven't even discussed appreciation. these homes are appreciating, still an investor's market in the housing market. tons of money to be made out there in housing, and it's a great time to buy and hold. >> tonya and susan, yes. >> last comment, poef sore. >> when interest rates spike again things will be dicy for everybody investing had gains. >> everybody will move to philadelphia. that what will happen. we do appreciate both of you. >> thank you. >> thank you. >> on deck, is detroit's bankrupts' big red flag for chicago? your next guest says the city not there yet, but it needs to watch out. he's here. plus, while mcdonald's serves up a super size the dose of pessimism we're serving up the best restaurant out there.
bankruptcy filing unconstitutional as far as the state constitution goes. but does that even matter here? >> reporter: well, brian, the short answer is we don't know yet. it's looking as though it may not matter because the federal case is going ahead. we know now that there is a hearing set for wednesday morning, and exbedieted hearing which is what the state emergency manager kevyn orr wanted. that, of course, directly at odds with friday's ruling by county circuit judge aguilar in lansing who said the state bankruptcy was unconstitutional because state pensions are guaranteed in the state constitution and judge steven rhodes is going to hear argument about that in federal court on wednesday. he's a reagan appoint iee and a
expert on ponzi law and in what will be one of the most complex bankruptcies in u.s. history and in detroit city fire fighters staged informational pickets today. they say that their pensions should be protected pointing out that as city employees they don't pay into social security so their pension is all they have got. >> that's what makes chapter 9 really so difficult. >> we may not come home one day so to lock at us as a spreadsheet is to me un-american. >> and that's part of the complication is the issue of whether the state pensions should be absolutely guaranteed as the state constitution suggests, and as these employees unions say or if given the massive amount of underfunding and the billions of dollars something has to give, and that's all ultimately, brian, going to be decided in it appears federal court scl back
to you. >> listen, you've probably had time to dig in through some. numbers yourself. i know that they are ugly, they are big and looking for an answer. it's going to be very difficult. >> that it is, and, you know, they are big numbers and one of the issues and points of contention is how underfunded city pensions are. when it comes to the pensions, we're only talking about roughly $3 billion in underfunding, that's what the unions say and that's what some of the court files say so the pensions may not be the big problem. there are broader issues in this city, brian, as you well know that they now have to lock out. >> not enough people, too much land, that's probably the biest problem that we saw. great reporting as always, buddy. we'll see you soon. your next guest penned this column in "the chicago tribune."
detroit sounds warning for chicago. let's ask our next guest whether chicago might be next. i loved the article and that's why i wanted you on. you made the case why chicago is not detroit yet, but you certainly sounded the warning alarm. how come? >> well, i mean, i think, you know, if you look -- it goes back to what hemingway used to say about bankruptcy. how did it happen? well, gradually and then all at once, and i think one of the things that you can take from what happened in detroit was it wasn't as if no one saw this company. they have been functionally on a balance sheet at a loss for years now, and so at some point unless things pick up treng tremendously and in a no way that anyone has a right to believe it will happen you have a bankruptcy situation. i think if you look at what's
happening in chicago, and it's not unique to chicago, you know, you'll see similar columns about this written in a lot of cities, one in the "new york times" this weekend, by bill keller. you look at some of the unfunded -- underfunded pensions, to the just in the city with say the cools, but the state which is phenom nalley unfunded its obligations, you are saying how is this going to paid off if you don't act now? it's only going to get worse. >> there's a couple of waysing right? love your first line, you can't outrun math and when you go into the numbers, everybody is looking for an enemy because the numbers are so big and complex. have you to almost mentally reduce it to like a movie. protagonist, good buy, bad guy, right? so people are trying to find the problem. the problem is everywhere.
>> yeah. and you've got to pick what you can solve. pittsburgh is a pretty good example in the sense, that you know, the mayor came in, luke ravenstahl, and he cut 25% of spending, and, you know, i'm not saying that's a solution for everyone, but you do need a certain amount of discipline in how you look at these numbers >> if you go through big cities the last numbers i've got, chicago's pension was 52%%, 50 cents on if the dollar funded, the lowest of any major city in the united states. not picking on the pensions, phil, but the money has to come from somewhere. the state has liest debt to gdp so the state can't even -- my wife is from chicago. i love the city, but you guys are in a heap of trouble. >> it's true, and, you know, i say it's not detroit because there are certain fundamentals here that aren't in places like
detroit. it is a more diverse economy. it has gotten through the last couple of recessions a little better, but, yeah, if you don't dealing with this stuff. it doesn't get easier to fund these things as time goes on. it will expo tensionally harter. >> and that's the lesson of detroit, i hope. >> let's hope the politicians step up because they like to kick the can to the next guy's problem. thanks for coming on. get you back on soon and speaking of cans, goldman sachs guess blamed for a lot so can we now blame it for driving up the price of soda and beer cans? one says banks like goldman can be doing just that. mary thompson is here with that story. >> reporter: a long held belief that manufacturing bottle next
is behind the rise in lump number prices even though the demand has declined. higher premiums being cost ed to an additional 3.6 billion each year. metro international offloads the minimum 3 tons required from its warehouses daily, no more, no less, whatever the demand. aluminum users say the controlled distribution lengthens delivery times and has doubled the premium on lumium over the last five years to an historic height and extended rents paid by those storing the metal along with bets made on the futures. goldman is disputing this report maintaining that warehouses can't distort prices given 5% of aluminum used in production of consumer goods is warehoused by
jorge vazquez says the metro warehouse does influence prices as it holds to what's the equivalent of annual demand in canada and the u.s. the concerns about catching regulators. they are looking to see if it's permissible for bank lending companies and they are launched an investigation into warehouse practice setting the stage for tomorrow's senate hearing on whether banks should own commodity--related businesses, power plants and the warehouses. >> for politicians who want to kick the can down the road, it will cost them more because of goldman sachs? >> you don't have to answer that. >> you know, yes. >> you're going to openly start weeping on the show. >> i'm thinking so many municipalities are obligated to meet certain requirements, not why at the end of the year you need a certain requirement for their pension funding too.
>> would they have other funding to spend on their services. >> it's a great point though. >> and by the way, a lot of questions, that does not cover state and federal pensions. private companies pay into it. >> maybe cities and states should, too. >> mary thompson, thanks very much. remember all the fear and loathing about calorie counts on menus destroying sales? well, turns out, not only does nobody care but they are actually doing something to kind of thumb their tongues, noses, at the menus. we'll tell you what that is and waiter on in the wake of the six flags roller coaster tragedy, we investigate whether america's "action 4 news"ment parks are the wild, wild west when it comes to your safety. ♪
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tomorrow morning dupont. >> remember, melissa, at our delivering awful if a conference, andrew ross sorkin asked andrew peltz whether it was true he had amassed a stake in dupont. here is what mr. peltz had to say. take a listen >> i learned literally in the past two hours that you have just amassed and are continuing to amass a very big stake in dupont. can you comment on that? >> andrew, you asked me in the green room about ten minute ago, if you say dupont, what comes to mind? you remember what i told you? i said paint. >> that's it. paint. all you're going to get out of mr. peltz. >> that's all you need to know really. >> and you're right because the stock popped on the headline hitting a new 13-year high. tomorrow analysts on revenue of 10 billion. two things on the conference call, analysts talk more about peltz and a subject close to your heart, titanium dioxide.
>> i really do. >> housing and china in china, prices come down so the streets will want to see what they say about the guidance. >> that's the substantial that makes paint whiter. >> right. >> and there's been a glut so prices have really come down and on the back of this a lot of companies have been looking to divest their businesses including huntman and dupont controls 20% of the global output so if we unlock, thinking along nelson peltz's lines, perhaps along paint line, maybe it's just a simple divestiture of the tio2 business. >> peltz and titanium dioxide tomorrow. >> not kidding about your knowledge. >> jackie, you're taking a look at ups. >> a bit of a different story, watching ups tomorrow morning. 13.95 bill crop expected on the revenue side and 113 on the eps. as you know, this company pre-announced and brought their expectations down and brought the street numbers down along
with it. had some analysts downgrading and reducing their expectations on the stock. the company also reducing its 2013 estimates for earnings as well. now, this is a company that is dependant on the global economy and so we are look not just domestically but abroad to china, et cetera. the analyst downgrades pointing out the slowing domestic economy is an issue and also overcapacity in the air freight field and competition. a lot of cheaper options when it comes to shipping so that's what we'll be watching for. the pre-announcement took the sing out it and they will be ready for what they get tomorrow. >> if you want to join the conversation, back tomorrow morning with more. "street signs" is back right after this. powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade,
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time for a sad story. a day of fun turning to tragedy. investigation continues at a six flags in dallas after a woman fell to her death from a roller coaster. jackie d'angelis with more on the call. >> well, it was a tragic accident at a six flags in texas on friday evening. a 52-year-old dallas resident was thrown from a texas ride
resulting in her death. she expressed concern about her safety before the ride began. the ride is 14 stories high with a drop of 79 degrees and it was promoted at the tallest roller coaster in the world when it opened in 1990. the park is open but the texas giant is closed as six flags investigates the matter. six flags ceo addressed this issue up front as soon as the company's earnings call started this morning. let me paraphrase for you. he said management joined the call with heavy hearts and are working through this tragic event. six flags reported its second-quarter earnings citing bad weather in the east and midwest as issues dampening attendants. some analysts expressing concern that this accident could have a chilling effect for six flags and also some of the other theme parks next quarter. now the international association of amusement parks and attractions, they say that the likelihood of being seriously injured on a ride is 1 in 24 million, but this particular park saw an accident
on a water ride that killed one person in 1999 and just this weekend at cedar point park in ohio seven people were injured when a boat flipped due to a ride malfunction, so really a lot of people wondering out there how safe the theme parks are. >> we'll talk about that right now. jackie, thank you very much. are america's amusement parks the wild, wild west when it comes to safety regulation? did you know there is no federal agency to enforce safety and at least 17 states have no regulators of their own. is it time we change that? let us ask amusement park safety expert bill avery. any of our viewers go into the elevator and sees the form it gets inspected every couple of months, every quarter, every year and yet these rides, 80, 90-mile-an-hour rides aren't being inspected in a lot of cases by anybody outside the parks themselves. is that wrong? >> you're partially correct. some of the ones that do self-inspecti self-inspections also do third-party contract inspections to have an outside set of eyes
to take a look at their operation. >> okay. but are they -- they are paid and hired by the park? >> reporter: yeah, they would be. >> so they are agents -- i'm talking about an agency that would be state, local, federal government, just once in a while coming in, third-party eyes, not getting paid by the park, to eyeball these rides. >> that's true. that doesn't happen in every state in this country that way. >> do you think there's a problem out there it the amusement park world or is this a one-off issue, an unfortunate and terrible tragedy? >> well, you know, my personal opinion is i would like to see a more consistent application of it across the board. we have national standards that are in place. they are adopted in many of the states and are law in some of the states, but to have them across the state i think could
prove to be beneficial at one level. >> all right. bill avery, do appreciate your time today. thank you very much. terrible tragedy in dallas, texas. >> on deck, street talk, plus food, not together, two separate segment. it's what restaurants could be telling us about the economy, and can you guess this mistery chart? if you're on the radio you have to chance but on tv it's a chart that shows a giant gain, an s&p stunner, a company that has made a lot of headlines. who is that? tweet me with your best guess. bill griffith, do you know what that is? >> i probably do but i won't say because i work for nbc universal so i don't qualify. see you in a bit. mcdonald's really holding the dow back today after disappointing earnings. we'll lock at what's wrong with the golden arches and what it will take for this stock to make a comeback. get this, sears is getting into the luxury business, i said sears, luxury. find out if it's a smart idea or a hail mary pass from the
struggling retailer, and then all eyes will be on netflix's earnings after the bell. instant analysis of those numbers and a lot more coming up. kelly evans is with me today. look forward to seeing you at the top of the hour for the all important last hour of the trading day on "closing bell." meantime, brian back with more "street signs" after this. ♪ ♪ ♪ ♪ [ male announcer ] if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for
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million in total domestic box office. that could be a major flop. the market rating remains a market perform. h & r block downgraded from neutral to buy. they cite valuation and say meaningful jump in growth will spark the market multiple. look at that stock chart on hrb. next stock, onyx pharmaceuticals, monster run from $20 to 130 in three years, downgraded today from hold to buy. deutsche bank raised the price target to full value in case of a deal. remember, onyx confirmed on the 16th they were actively accepting bids from potential buyers. somebody got really rich on that. congratulations to all you folks who did. and as always the final stock is your under robert kardashian radar name of the day, this is called light in the box, not sure if jack is in there.
a chinese online retailer, 16.50 target, stock is down. sullivan, why are you bringing this up as a neutral? a lot of people like to pie into chinese equities. thinking of buying this name. credit suisse says it's a neutral, pretty much where we think it should be valued. you guys are way too smart because our chart of the day was way too easy. chart of the day, you all got it, netflix. one guy said best buy. everybody else got it. tomorrow it's going to be harder. the s&p's best performer this year. it is up 184%. company also set to report their results after the bell tonight, and cnbc's julia boorstin will actually be moderating that call. she is outside the netflix hq in the cats, california. >> u.s. streaming subscriber numbers, investors want to see
that the company can continue to grow its domestic streaming subscriber base which is really the heart of its business right now. the company will report more than 29.5 paying streaming subscribers. more than suggested in the last report. analysts expect netflix to grow its revenue 21% to 1.027 billion while earnings per share are expected to more than triple from 11 cents in the year-ago period to 40 cents this quarter. with "house of cards" leading netflix to 14 emmy nominations last week the big question is whether all of that attention on netflix originals will translate to profits and we'll also be looking for details on the fourth original called "orange is the new black" which launched less than two weeks ago. now, as you mentioned, brian, after announcing its earnings, netflix will take an unusual
approach to its call hosting a google hangout co-moderated by an analyst, btig's rich greenfold and me. e-mail me questions or tweet me. we've gotten a ton of questions so far and, of course, we expect to get a lot more after that earnings report comes out and we hope to get a chance to ask all of them on the call later on today. brian? >> i have a question. i streamed "the shining" and it says other views have also viewed the sponge bob movie. why does that happy? >> what that means is other viewers have not set up a different profile for their kids. kids programming is very popular on netflix and they have invested a lot in kids' programming so they are trying to encourage people to set up one profile for the adults and one for kids so you can get customized recommendations that
don't indicate you're a big fan of sponge bob. >> good luck tonight. we'll be tuning in. >> thanks. >> netflix has more subscribers than hbo so is netflix the new hbo? let's ask quarts senior editor zach steward. what say you? how big can netflix be? is there room for the two big boys? >> room for both of them but already you see netflix surpassing hbo's subscriber base and probably has much more room to go since hbo sells as an add on to cable subscriptions whereas netflix sells at just about $8 a month. >> but hbo has more original programming and newer stuff. that's the knock on netflix generally, is that it's simply not up to date enough in a lot of things. >> absolutely. >> that's true and then the counterpoint is six months into its major foray in original programming picked up a number of emmy nomination s for "house
of cards" and that's faster than hbo did when they got into original programming. i don't think netflix is up to the level of hbo in terms of original programming but it just may be good enough. >> my industry, your industry, netflix, hbo, apple, tv, houlo, changing so rapidly. i'm honing my lawn-mowing skills. where will this end up? >> who knows what to buy. that's absolutely true which puts netflix in a really good position so the devices seem to be changing pretty rapidly but content is ultimately what people want to be viewing on their televisions or tablets? >> you think apple would be willing to buying netflix? they can afford it. >> it's a really interesting suggestion. netflix is trading 635 times earnings right now, so the price tag would be hefty, but, yeah,
that would be very interesting because apple or google, maybe even amazon trying to make a play to disrupt the cable tv industry and they need the content to do that. >> they need a splash. you never know. thanks very much, appreciate it. >> julia will be monitoring that conference call and can you watch it here live on cnbc. that's pretty goal. today's mystery number is 655,360, that's the number. acted so smart with the net. ics thing and that's your mystery number. let me know gnaw think it is, an later we'll test dive a sharknado. look at that. (announcer) at scottrade, our clients trade and invest
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possible burrito combinations you can get at chipotle. the fast-food chain originally complained there were 65,000 combos, but the business insider came up with a higher number by deconstructing the meat options but also salsa and rice choices. i think styx sang it best when they said we have too much time on our hands. how many calories in the combinations? it doesn't matter squat. americans don't care. a new study shows that even with calorie counts are posted on menus, diners not only largely ignore those numbers, a third of the study actually ordered meals that had more than 1,000 calories on them. almost like they were doing it on purpose. those findings were based off research done in new york city mcdonald's. speaking of mcd's, it's down about 2.5% after reporting earnings this morning. one driver, a warning from the ceo about weaker sales for the rest of the year. joining us from morningstar is
rj. rj, is a restaurant problem or a mcdonald's problem? >> actually, i think it's a little bit of both. there is credence to what management was talking about in terms of being a competitive landscape right now. we've seen food costs come in from a year ago. that's led to a lot more promotional activity and aggressive discounting across the board. at the same time, mcdonald's pointed to a lot of new product innovations that they said were meeting or exceeding expectations. at the same time, and they said they were gaining market share, but at the same time, the question is, are other players starting to gain more market share than mcdonald's? so it does become a question, is this something that's for the company specific? a lot of questions raised in today's results. >> it seems like the market's expecting others to gain market share. when i ran a screen this morning of pretty much every restaurant, whether it's fast-casual up to youth's chris, the single-best performing stock was wendy's. >> yeah. >> the doughnut burger or whatever they have. >> yeah, it's --
>> the pretzel burger. >> yeah, very much a consolidation. we've seen a lot of consolidation in the industry right now. we've seen fast casual, obviously, take off. that's been reflected in chipotle, panera, a number of other companies. a company like noodles coming to the market. there's a lot of demand for the fast casual space, which is higher price points in the quick-service space, but doesn't have the cost structure you find at casual dining. that's the sweet spot. at the same time, they've been largely overbid. so you have to look to the other categories and what are they doing to survive. it's a tough market right now. and i think we need to look at companies like mcdonald's to really put the pedal to the metal in terms of product innovations at this point to drive a lot of success for that company. >> we hear that all the time. when i go out to a fast casual restaurant, it's because i go there, i know what i'm going to get. >> yeah. >> right? we're talking about, we have to innovate, innovate. is that true? don't people want to have an expectation of what they're going to get generally? that's why they go there consistency? >> yeah, and that's absolutely true. there's an element of
consistency and newness. with the new concepts popping up, the fast casual space now, if you have a conduct ssuccessf and the consumers are seeing the new concepts and new cuisines, and with the quick service restaurants need to step up their game. but they don't need to get too far away from the core concepts but put something in the consumers' minds. >> i'm thinking about a mcrib right now. thank you very much for joining us. >> thank you. >> appreciate it, bud. it's not a dolphin. it's not a whale. but whatever it is, jane wells took it for a spin, it could be the most awesome thing i've seen in a long time. we'll show it to you coming up. [ male announcer ] come to the golden opportunity sales event to experience the precision handling of the lexus performance vehicles, including the gs and all-new is. ♪ this is the pursuit of perfection.
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and experience the connectivity of the available lexus enform, including the es and rx. ♪ this is the pursuit of perfection. here on skgs street signs," we love introducing you to toys with time and money. so we sent jane wells on search of the coolest thing she could find. ladies and gentlemen, we present to you the real-life "sharknado." >> reporter: it's like a jet ski. meets a submarine. and turns into a torpedo. think of it as a human-powered sharknado. what is the goal? what is the purpose of this whole adventure? >> there is really no purpose whatsoever. i mean, we -- we didn't really
envision any plan when we started this. >> reporter: new zealander rob ennis is a boat designer who has turned into the jesse james of personal water craft. >> most people when they see it, they don't think it's real. they think it's a movie prop. >> reporter: what it is is the sea breacher, that flies beneath the surface and jumps into the air thanks to an engine with as much as 300 horsepower. >> you actually force the very buoyant vessel under water, and that's why it can jump out so high and do so many freestyle tricks. >> reporter: the cost of the sea breacher can top 100 grand. each is custom made. 50 have sold so far, mostly to the middle east and asia. >> we have made them look like world war ii fighter planes. we've made them look like space shuttles. we've put demon sharks that have blood trickling out. let's do this! >> reporter: ennis hopes to do more than sell boats, he wants to create a sport. >> our goal is to evolve it and
make them faster and better and start a proper racing series. >> reporter: the hardest part has been developing a system so easy even an idiot can operate it. i'm living proof it's possible. actually, that wasn't me making that breach. my attempt was far lamer. >> more power. more power. go, go, go, go. >> reporter: but the future doesn't look lame. self-funded and unprofitable for the first few years, the business is now riding high with a waiting list of customers. oh, okay. the good news, i lived. the bad news, i aged 10 years. ennis has recently moved into a larger space so he can make more than one at a time, but he'll never mass produce them. one is on the way to manhattan to hang in the store there. >> jane, we have to go. your breech was more like a broach. that stunk. that was weak sauce. >> reporter: oh, i know. >> i'm only angry, because i'm so jealous you got to do that.
i've never been more jealous in my life. i want to totally honest about that. >> reporter: ha ha. >> who has a better job better than jane wells? who's better than jane? thank you very much. love it. thank you for watching "street signs." free seabreachers for everybody that watches the show tomorrow. not true. "closing bell" starts tomorrow. hey, welcome to "closing bell." i'm bill griffeth here at the new york stock exchange. >> i'm kelly evans in for maria bartiromo. >> happy monday. >> indeed, especially with what's happening in the markets. not huge moves on the indexes. it could still be enough for new all-time highs for the dow and for the s&p, bill. >> mcdonald's is the big drag today for the dow, taking about 19 points out of the dow with that earnings report. we'll talk more about that coming up a little later. by the way, we're on royal baby watch. >> yes, yes, we are. >> former london