tv Power Lunch CNBC March 4, 2016 1:00pm-3:01pm EST
new week. >> and i think most important thing for me all week was the fact it slammed volatility. if you look at the chart of that, just over the last week, call it the last two weeks, absolutely incredible. gives you great opportunity to buy protection into the weekend. >> great stuff, thanks. have a great weekend. "power" starts now. welcome to "power lunch." i'm brian sullivan. today the bans is mellas why lee melissa lee on keyboard, michelle caruso-cabrera and tyler mathisen. the dow topping 17,000 for the first time since january 6th. s&p topping 2,000 again. both indexes trying for a fourth straight day of gains. that, my friend, something we have not seen since october. three major averages up about 3% just this week. not bad, melissa. >> not bad. look at a broader context here.
you look at the gains here, the dow is up almost 7% since february 11th. the s&p 500 up more than 8% in that same time frame and the nasdaq is up 10.5% since february 11th. do you sell into the rally? david joins us. you have a bullish tendency, but i think you believe that the upside is limited here. >> yeah, absolutely limited. we talked about it last night in the show. essentially this is a fear-based trade. people underpositioned on the long side that are fearing a lot of the meetings coming up over the next several weebks. a meeting in china kicks off today. most importantly the ecb given draghi's comments about potential additional stimulus, so i look at it and say under positioned, getting long, fear of it running away from them, but most importantly, there is a big fear, big fear about being short. so all these, you know, stocks and sectors that have underperformed have been completely negative, biased on
sentiment trades, you're seeing that risk come off and seeing a tremendous amount of short covering here. >> and a lot of traders are pointing to the 20, 20, 25 level, the moving average on the s&p 500. david mentioned an unwillingness to be short. there is an unwillingness to be long. we have the defensive trades going strong. gold having its strongest weekly inflows in 16 weeks. gold has been a monster trade. it is in a bull market. so obviously what we're seeing markets go higher, we're see league lu reluctance to give up the area as well. >> as long as central bankers are smoking in the diynamite shed, you have to sell these rallies. these are wonderful opportunities to take down risk, sell these rallies, and save that drive -- dry powder for capitulation and opportunities like we had last month. >> larry, michelle here.
what is the credit market saying? we often look to the credit markets for any guidance as to whether or not you believe the rally in equities. >> high yield is catching up, so have investment grade bonds. but the problem is, high yield itself is about 190 basis points away from the tights. and ig is 35 to 40 away from the tights. what that means is equities are 4.5% away from the all time highs. and high yield bonds and investment grade bonds are nowhere near the best levels. and then scott wapner was talking about the ten year. the ten year at 190, in a real risk on, real risk on that ten-year will be up at 240, 235. >> the credit market is not suggesting as much confidence. >> not getting confirmation at all. >> if we're targeting 20, 20, or 2025 in the s&p 500, what would you be in? >> first of all, i think again we fade this rally.
you're going to see it probably continue to grind higher, it will exist until the tens when the ecb meeting begins. i think you fade a beginning next monday, let's say tuesday, wednesday. i would walk away from equities now. i would look at medium term corporate bonds, 4.75% yield, that's the best place to be in the near term, best bang for your buck. i think we come back a little bit. and you step back on the long side of the higher quality names you've been keeping your eye on, when they come back, you step in and buy them. >> you're a little farther out on the risk spectrum. you recommend it in your letter today to buy the european financials etf. why? >> well, thatly was a buy from e of weeks ago. i would sell the financials here. the bar is very, very high. >> u.s. financials. >> u.s. and europe. both europe. you've got the bar is very high
from mr. draghi. the market expectations from two inches on february 11th, right now today, to 10 feet high in terms of what draghi is expected to do. but the u.s. financials, acg analytics put out a nice report, if donald trump moves to the center, to the center on the financials in too big to fail, which we think there say decent probability he might, that's going to really shake up the u.s. financials and it is a black swan not many people are talking about. >> thank you. david seeburg and larry mcdonald. news alert, guys. friday baker hughes rig count data. down for 11 weeks in a row. the number of oil rigs falling eight. total number of rigs, 13. eight of those were oil rigs. we are not 489 oil and gas rigs in the united states, guys. if we lose one more, we will be the lowest rig count since the numbers began being tallied in 1948, that's according to
standard charter bank, 488 operating rigs in 1948, we are at 489, so we're down from the 11th straight week. all those lost oil rigs have also resulted in a big loss of jobs for the oil and gas industry. that is about the only part of the workforce not getting stronger right now. the government says last month 242,000 jobs were created, unemployment held study at 4.9%. let's dig deeper with steve liesman and bill rogers. steve, take it back to the federal reserve. does this, dare i say, put march back on the table? >> i don't think so. i think the market is all the way over to one side right now. and unless the fed has an interest in surprising the markets, and the effect of that would be to make the markets raise interest rates further than the fed would want, it wouldn't go unless there is some major speech and we have
brainerd and stan fisher, both speaking on monday, they will not redirect the market. it does put june on the table and the market had mostly priced june out and i think if we keep going, steady like this, june is a real possibility. >> fisher, correct me if i'm wrong, has been the fed official who has thrown the most specifics out. we could get some market moving fed stuff from fisher on monday. >> that's entirely possible. i would be paying very close attention. >> i have a feeling you will. >> bill rogers, i heard for months and months and months as the economy gets closer to full employment, which we either are at, i love to hear when you think we are or not, but as the labor market grows tighter, wages would start to go up. they didn't. why? >> the month over number did not go up. but if you look at the year over number, it was up around -- i think 2% or so. and it has been consistently tracking that at that for the last few years. >> what stalled in the most recent month. what stalled? >> i think we're still going to
dig through the data there. >> any idea, steve? >> look, you had a huge out of sample rise january, 0.5%, down minus .1. i get confused, i listen to the music play. i average the two months very simply. very easy. it is a little bit stronger than it was. i would not have expected strong job gains and not off the strong job gains kick now. >> the lack of income growth, which is really the story of the last generation, frankly, right? >> several decades, yes he. >> certainly the underlying story of the political campaign. >> yes. >> that's what got people angry. >> can i get at that, because the -- while the media is on to the idea that there is this all dissatisfaction out there in the economy, it is changing. and changing in an interesting way. america, in a very quiet way, has gone back to work. the rise in the civilian labor force over the past five months, we have brought in half a million, just the past three
months each. we are up 2 million year over year in terms of the size of the labor force, you had the tick up in the participation rate. it is almost like the story that everybody is on to is an older story. i don't want to say we're out of the woods and all the trouble is gone, but it is making a change and it has been quiet. it has been unremark and it suggests this issue, you ask about tight labor markets, there is a pool out there of folks who dropped out of the workforce and seem to be coming back to work. >> so you are going to love these two charts i brought. >> i got charts too. >> you knew i was coming. you're a labor department economist. so this is right up your guys' alley. you know the story, the bears out there, people negative on the market will say, the labor force participation rate, while
spiking a little last month, continues to decline and we're at 20 years low. so let's bring up this chart. this is an important lesson in timing of charts too. this is labor force participation. 1996. it looks crummy. you're, like, no one's working. now let's look at the same chart going back to 1966. a 50-year chart, and you can see that while down, we kind of erect the historical mean of where the labor force participation rate wants to be. square the debate for us. is the job market really that lousy or to steve's point, is this kind of where we want to be given the demographics? >> the job market has recovered tremendously as secretary perez said this morning, you know, this administration was handed a very, very tough hand. and so, you know, we had dramatic improvement, hasn't gotten us back to where we were at the beginning of the session, no. but we he are in historical sense at higher levels. now, the concern among macro
economists who try to forecast growth into the future is that that chart, the longer period chart you showed is one that with lower labor participation, only trending down because you're going to get the baby boomers retiring and that's going to have a lower impact on economic growth. so unless you have, you know, more kinds of productivity, types of technological changes that can enhance and expand growth, you know, you have major -- we have some problems. >> the demographic issue means that what we saw in that chart over the last ten years is the outlier part of the chart, not something we necessarily -- >> people retiring, that's a big part of it, you have women who entered the workforce in certain percentages that have decided they don't want to work and that's a personal decision. but you also have the problem part of this, which discourage workers, people that dropped out of the workforce. without that component, it would be higher and we shouldn't look at that and say it is all okay, because it is not okay, some of
it is okay. some of it is badly not okay. >> i think i would sum up this -- i don't mean to rain on what is a pretty good overall report here. more people are working, but fewer people feel like they're getting ahead. >> we have -- >> certain incomes aren't going very much. >> incomes, you talk about incomes, it is still -- we have a large number of americans who are working part time, but want to work full time. you have people who dropped out of the labor force, if offered a job, they would -- >> down .2, still higher than normal, we dropped .2 from 9.9 to 9.7%. the total aggregation of all of those disaffected workers, unemployed workers, it has been coming down. >> i didn't dispute this. but still elevated and higher then at the beginning of the recession. and then second piece is back to the participation. >> do i have a minute? very quickly? >> it is -- the star of this
report was labor force. that you see a recovery, see people -- you see people moving back. we had this debate a month or two ago, you were questioning whether or not to me whether or not these people would come back. and these -- that we had hit a structural -- structural unemployed but i think we're seeing a rebound. >> you'll discuss that during the commercial break, i'm sure. thank you so much, really appreciate it. >> i didn't have time to give my chart. >> your chart. >> sorry. >> lollipop later. tweet them out. >> all right. thanks, guys. maybe more charts with a market flash with seema mody. >> look at shares of jcpenney gaining steadily today, hitting session highs of more than 5%. the retailer was upgraded to buy from hold at ever core noticing outperformance versus peers in a very challenging and volatile environment. the stock has gained more than
70% just this year. impressive turn around for shares of jcp. >> certainly. looks like it. wow. thanks. jobs and the presidential race, employers picking up the pace of hiring, more people looking for work. wages slipping. so the wealth of the american labor market, will it decide the presidential election? we discuss, you're watching cnbc, first in business worldwide. (patrick 1) what's it like to be the boss of you? (patrick 2) pretty great. (patrick 1) how about a 10% raise? (patrick 2) how about 20? (patrick 1) how about done? (patrick 2) that's the kind of control i like... ...and that's what they give me at national car rental. i can choose any car in the aisle i want- without having to ask anyone. who better to be the boss of you... (patrick 1)than me. i mean, you...us. (vo) go national. go like a pro.
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welcome back to "power lunch." i'm tyler mathisen. better than expected employment report out today as we have been talking about, 242,000 jobs added in february. will the state of jobs decide the presidential election or will other things that they have been talking about decide it. joining us, mark morial, president and ceo of the national urban league, former mayor of new orleans and joe watkins former white house aide to george h.w. bush. let me begin, joe, with you, if i might. we just have gotten word that hillary clinton later today in a speech in michigan is going to call for a clawback of tax incentives or breaks that corporations got for basically research and development that -- for companies that then moved jobs or facilities out of the country. i know this is sort of blind siding you, but conceptually, is this a good move, in other
words, to try and get back some of the tax breaks from prior years, given to companies that then move jobs overseas? >> maybe to -- in an election year, in the presidential election year for a democratic candidate, running for the presidency, this may give her so relief. after aill she's running agains bernie sanders telling the economy it is rigged against them. this kind of move on hillary clinton's part makes sense for her. not necessarily a good thing for the economy. you don't want to punish companies. don't want to punish businesses. you want to encourage businesses to prosper and grow. but from her standpoint, politically, this is a move that she feels will help her solidify her lead over bernie. >> more for show than for dough. let me turn to the jobs report, mayor, if i might, what if any criticisms do you have of what is going on in the u.s. labor market? >> i want to comment on the earlier -- let me say this, let me say that about this. i think it is going to be a big
issue in the general election and that is how to grow jobs, and how to disincentivize what i would call the transfer of jobs abroad. so this is about aligning the incentives so american public policy incenses companies to grow by keeping jobs here in the united states. as to the jobs report, the economic growth is modest. the jobs numbers are good. but we still have too many part time workers looking for full time jobs. and still too many workers who dropped out out eped out of th. what makes it a good report is the consistency of job growth. we have to keep our eyes also on wages and wage stagnation and that's really, i think, going to be at the centerpiece of the fall election. >> that's what we were just talking about with bill rogers and steve liesman. joe, what to you make of what's going on in your party?
>> well, of course, this is a very unusual time in our party. you got a lot of angry people. the 6 million workers who are working part time for economic reasons, they're angry. the long-term unemployed, they make up 27.7% of the unemployed, they're angry. all the people who can't find work, maybe there is work in some of the sectors, maybe if you're in food services, there is work. but if you're in professional services, there isn't work. and you're angry. and so the candidacy of donald trump has spoken to that. what he's saying is that if you elect me, i'm not part of the system, but i will find a way to fix the economic system and to get you a job, get you back to work. right now you're not working. >> have you endorsed a candidate, joe? >> absolutely not. i've not endorsed anybody. we all know i work for president george h.w. bush, my daughter worked for george w. bush in the white house and so did my wife. and we like jeb bush and jeb bush no longer a candidate. i know most of the candidates
running for president. i've not endorsed anybody yet. but right now a lot of jockeying still. donald trump doesn't owe anybody anything. that's the fear for many establishment republicans, but he has the clear lead and he's on his way to being the nominee of the party if he can retain his strong lead in the upcoming weeks in these primaries. >> it is michelle here. excuse my interpretation, but i thought you looked like you had a smug mile on your face when tyler asked the question about what was happening. you have a socialist running on the ticket and giving hillary clinton a run for her money. if it is hillary versus trump, are you worried? >> no. i'm never worried about the decision of the american voters will have. >> are you worried that hillary clinton could lose? >> no one can predict the outcome of the fall election. but i think if you have a clinton/trump race, you have a clear, clear choice.
and i think clear choices mean you have high turnout, high turnout always yields, i think, a good result. what i'm more concerned about is a low turnout election with people who are discouraged from voting because maybe they're not excited about what they see. but, look, the country is at a crossroads and this is a very important election. at some point, there will be a republican nominee. and there will be a democratic nominee. and i hope -- not a name calling contest. >> mr. mayor, let me say this, the mood of the electorate is clearly anti-establishment. and if there is anybody who defines the establishment it is hillary clinton. >> and donald trump is part of the political and business establishment too. it is curious to me how people -- how people who have been -- how people who have been involved in the system, contributed to politicians, whether it is bernie sanders, donald trump, hillary clinton, they're all out here.
they're not new faces. maybe they're new faces to politics, but -- >> bernie is speaking to the people hurting now. he's saying, listen, look at me, i'm 74, i don't make an attractiattract ive candidate but i'm speaking to your heart. donald trump is saying the same thing. he's saying america was great. i'll help make it great again, i'll bring back the jobs we lost. we hear that and they say, you know he what -- >> donald trump is also pointing fingers at latinos and pointing fingers at muslims. he's introduced a level of division that goes beyond speaking to anger with constructive proposals. that's got to be said. >> we have to leave it there. marc morial and joe watkins, thank you for being with us. hillary clinton proposing the tax hit for companies. john harwood has an interview with her today at 4:00 p.m. on
the closing bell from michigan. new home sales tumbling, but existing home sales inching higher. and home flipping sky rocketing sparks concerns of another bubble. what is the real reed on real estate now. zillow's ceo tells us what he's seeing ahead. stay tuned. usiness expert? sure am. my staff could use your help staying in touch with customers. at&t can help you stay connected. am i seeing double? no ma'am. our at&t 'buy one get one free' makes it easier for your staff to send appointment reminders to your customers... ...and share promotions on social media? you know it! now i'm seeing dollar signs. you should probably get your eyes checked. good one babe. optometry humor. right now get up to $650 in credits to help you switch to at&t. came courtesy of james and patricia thompson. this tv? margaret and tom lee. the championship game ball? that was sebastian diaz. good guy.
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we lost eight rigs. 11th week in a row that rig counts have gone down. price of oil of is up. it is higher. marathon, one of the hardest hit oil companies, having a stellar day today, i'll opine, got to be short covering here, mro is the ticker, up nearly 12%. >> on from oil to housing, mixed picture. new home sales falling in january. existing home sales rose. this as flipping has surged. sparking concerns of a housing bubble in some sectors and some areas of the country. what's going on with the market? here for a "power lunch" exclusive is spencer of the zillow group. we're just now starting the spring selling season. how is it going to go? >> it is going to be very constrained inventory. it is a seller's market. just not that much on the market. a lot of the country we have 9% fewer homes for sale than a year ago.
so in denver, seattle, san francisco, dallas, that's creating home value appreciation of 10% to 15% year over year. just nothing -- >> why is there so little supply? >> it is a little cyclical. if you -- if there is nothing for sale, don't list your home. you have nowhere to go. the big issue is supply hasn't been created over the last couple of years. takes a while for new construction to come online. what is finally happening is multifamily buildings that started two or three years ago are starting to come on. some people that would have bought will shift to renting and that will help restore equilibrium. >> when we talk about the ten-year yield, falling below 1%, my initial intuition is that's great for housing. if that happens, a lot of people believe that's a company by a really bad economy. >> everything -- the whole way the yield curve is acting has broken all rules. never seen anything like this before. this is an incredible time to get a mortgage. the thing is everyone has equity
in their home and refinanced their mortgage. it is a terrific time to buy. and to break even horizon now for buying versus renting is two years nationwide. what that means is you're going to live in your home for two or more years, you should buy instead of rent. that's because of very low mortgage rates. >> where are the prices the craziest? >> bay area. >> san francisco. >> san francisco. l.a., new york, always. these are places with strong job markets and strong foreign buyers. so -- >> and no land. >> and they're physically constrained by land. >> is it just as strong that the appetite of foreign buyers as a year ago or two years ago. >> it is. interesting. the uk just enacted this tax that goes into effect in a couple of weeks where uk real estate speculators have to pay 15% tax for additional properties. that will help new york, miami and los angeles which on a dollar per square foot basis looks relatively attractive. you would think that chinese stock market coming down might reduce chinese buyer interest, but it is quite the opposite.
they see so much instability in china that they want to buy in the u.s. forei foreign buyers continue to grow. >> are you looking in the energy patch to find them? >> we have been surprised, we thought in dallas, houston and other places in the energy patch, you would see home value declines. we haven't seen that at all. you might be right. perhaps not yet. the midwest has -- it didn't have the big run-up during the credit bubble, didn't have the big decline, always slow and steady, that's where we are. >> the data hasn't been great. we can attribute that to low inventory. your stocks, because there are two, z and zg, up 28 and 26% over the past 30 days, which i'm sure you are aware of. why? we just said the real estate market is okay. but you are the real estate market. >> we're a real estate media company. we have this huge audience, 150 million people that use our websites every month and then we sell advertising. we're not directly tied to housing in the same way that
cnbc, the media company is not directly tied to the economy. people view cnbc and we have that. the reason that zillow group performed well, and the reason there is insider buyi ingbuyinge 5% of real estate related -- >> what is the term when people go into a store -- >> just browsing. >> window shopping. >> showrooming. so if there is no inventory, who is on your website? >> well, there are a lot of buyers and sellers. >> people like to peruse -- >> i do it all the time. all the time. every day. >> real estate porn. you know what i'm saying. people looking at it, but don't intend -- >> no question that street easy here in new york -- >> you own street easy. >> yes. there is a little voyeurism, no doubt. real estate porn and what not.
but serious home buyers and sellers are using our websites every day and the way we make money is by connecting them with great real estate. >> did you hear the debate last night night? >> i did. >> did you hear your name come up? >> it was hilarious. >> you haven't had to pay $35,000 for it. if you can just get that on zillow becomes a meme which is the new smackdown for, you know, for that -- that would be great. i thought that was hilarious. >> brian asked you about your stock price. your stock is still trading below your ipo price. >> no. we had a three for one split. split adjusted ipo is $7 a share. >> you just bought? >> i just bought a significant amount. >> how much do you own? >> i bought $250,000 worth but i have a significant amount of stock options on top of that i personally bought. >> are you embarrassed you have been brought up in the debate in. >> embarrassed? not at all.
that means that we are so mainstream that we're a punchline on the tonight show or -- >> increased traffic? >> we did on twitter last night. twitter went crazy when rubio lambasted trump with the zillow reference. but, no, we have so much traffic that little mentions like that don't -- >> terrific. >> they don't hurt. >> no, they don't of the all about being part of the cultural mainstream. to be mentioned in presidential debates -- >> speaking of a verb, i do notice that google, another verb, is showing more real estate on their maps. >> they do. >> does that hurt you? >> it doesn't. we get a ton of traffic from google. google has a clear strategy of not going deep into these verticals because they're too complex and difficult and require expertise from vertical specific groups like zillow. >> thank you. ceo of zillow. >> enrolling in trump university
later today. >> he he could teach. >> he could teach there. >> no thank you. >> thank you very much. where are we looking? right there. they rarely talk but they're talking to us on "power lunch." mars, $33 billion in sales. north america's ceo will talk jobs, state of the economy and we'll ask her about hillary clinton's new plan to claw back tax incentives on companies that move production and jobs overseas. black and denim co-founder took a shot when trying to brew up sales at his clothing company's new store. he started a second business, a coffee bar, in the same tampa, florida, storefront. customers can sip their joe and shop for clothes at the same time. for more, watch "your business" sunday mornings at 7:30 on m
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welcome back to "power lunch." gold prices are closing right now. higher by $8.50 per ounce. gain of two thirds of a percent. silver, copper, palladium, higher across the board, strong gains, 3% and 4% for most of them. to sue herera with the latest news headlines. >> at this hour, president obama meeting with his economic team at the white house, accusing republicans of trying to talk down the economy by painting a doomsday picture on the campaign trail. and the rhetoric was unworthy of the american people.
>> america's businesses are creating jobs at the fastest pace since the 1990s. america's workforce is growing at the fastest pace since the year 2000. it is showing the kind of strength and durability that makes america's economy right now the envy of the world. >> los angeles police are investigating a knife purportedly found sometime ago at the former home of o.j. simpson who was acquitted of murder charges in the 1994 stabbing deaths of his ex-wife nicole brown simpson and her friend ron goldman. it is being tested for dna, but police say it is possible the whole story is bogus. gop presidential front-runner donald trump in michigan to greet supporters today. the conservative political action conference says trump has dropped out of its annual event under way outside of washington. hundreds of migrants and refugees spending another day in athens, victorias square. they waited as the northern border with macedonia remained shut allowing a trickle of
people through. that's the cnbc news update this hour. ty, back to you. >> thank you very much, sue. to the bond market, rick santelli tracking the action. >> before we get to the charts, keep the following in mind. the s&p is up over 50 points on the week. it closed at 1948 last week, over 2,000 now. keep that in mind. look at intraday of 10s. yields up, not knocking in 190, having closed at the 190 door since the first day of february, as you see on that chart. open it up and what is interesting is the following. that if you look at a one year chart, what you'll notice is that on the left side, we have a lot of action right at this 190, 187 level. certainly looks like we're going to test 2% again. if you look at the dollar index, intraday, it kind of is unusual for day rates. you consider that rates are up 13 basis points and tens, look
at the week in the dollar index. it is down. remember the s&ps? the market is coming back. made the treasuries not look as interesting. so they're dumping treasurer and buying stocks, all with the overlay, think dollar index. most likely no fed. i don't know how long it will last. but if these conditions exist, the cycle starts all over again. it is going to be hard for the fed not to normalize. everybody loved the numbers. you heard the president, didn't you ? back to you. >> rick santelli, thank you. >> seema mody, market flash. >> i want to point your attention to shares of sea drill in norway. the stock is nearly doubled in one day. and a confluence of factors at play here. the rebound in oil prices forcing traders to cover their shorts. plus, top shareholder john frederickson is reportedly freeing up cash, selling shares in a different company, marine harvest, seafood company, valuing that at around $517 million, there is speculation
that he may inject that cash into sea drill and the stock is on track for the best day in seven years, sea drill, a norway offshore player. >> a thought? >> i got a note from a trader yesterday. i'm sure you -- on fast money you talked about this, i'm sure. this is a huge short squeeze. there may be money coming in. this was one of the most beaten up, a $40 stock a year ago, companies, looked like it would go under, maybe the cash infusion, i can see your sea drill and raise you a cliff's natural, not up as much. marathon, we pointed out, up 12%. i have a feeling that short squeezes may be a topic of interest on fast money 5:00 p.m. eastern. >> we have been talking about the beaten down names gaining the past month. we look at one month gains, biggest names, back it up, six months, back it up 12 months and those are the ones decimated in the market. >> we had guests who highlighted for a-long time, come on and said, listen, if you're nervous,
you buy the exxons, buy the chevrons, but if oil ever turns and from 25 to 35 is a pretty big move, it is $10, which on 25 bucks is a lot, the biggest moves you get, you want juice, you buy the riskiest names. we're seeing that play out in a lot of these. >> a thousand -- we talked about a thousand people of oil and oil stocks, 999 people, almost all of the people, we'll tell you this, $35 oil doesn't mean much more than $30 oil. if you're in trouble -- >> little less trouble, but still -- >> can stay at the levels. that makes all the difference. >> the volatility. >> how can you run at any business. if you're in the mattress store and the price goes up 5% or 6% every day you better run your business. >> you might get sprung. >> on the mattress, right. >> let's tell you what's coming up. rare look at one of america's largest privately held companies. if you haven't had a mars
product recently, i would be surprised. you probably have had it in one way or another. president of mars chocolate north america will join us next on "power lunch." she brought goodies too. ♪ today, we're seeing new technologies make healthcare more personal with patient-centric, digital innovations; from self-monitoring devices that can interpret personal data
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this is the pursuit of perfection. at ally bank, no branches equals great rates. it's a fact. kind of like social media equals anti-social. hey guys, i want you to meet my fiancée, denise. hey. good to meet you dennis. this is a new candy man ad. look at that. there is still no chocolatey mess, is there? there are more kinds of m&ms than ever before. no mean feat for 75-year-old brand. all falls on the shoulders of
the person sitting to my right. tracy massey is president of mars chocolate, part of the $33 billion mars empire, third largest perhaps of the press shy companies of america. welcome. >> thank you very much. >> i want to start with the companies. i know about the company a little bit. why has the company been so shy, to see tiff over the years and we're delighted to have you here. why are you here now? why has that been -- >> as you know, as a private company werbs don't have to do quarterly calls and things like that. it enables us to have a long-term view of the business and take the right decisions for the long-term. we haven't needed to really talk out before. the times you've heard us speak will be when we need to raise an issue for the industry. a few weeks ago we came out in support of the world health organizations sugar guidelines.
we did that publicly because other people weren't really supporting -- we thought that was important. we have spoken through our brands. what's changing is consumers who are the ones that we're really, really watching. they want to know more about the companies behind the brand. before we could talk through our brands and now they're saying, we want to know more about the company. as associates that work for them, i worked for mars for over 25 years, we're so proud of the things that the company does. now is the right time to talk about it. that's why i'm here. we can start telling millennials about the business, that helps us attract the talent and let them know what they need to know in terms of the company they're buying from. >> it is a market-based response to what you're hearing from your customers. they want to know and we all have been told this about millennials that they -- whom i detest by the way, all millennials -- >> here here. >> they want to feel good about
the companies they patronize. >> absolutely. >> that is sort of behind this. how is business? >> very good. we're pleased with the growth of the confectionery industry. it is a really good industry to be in if you think about whether times are good or bad, people still eat chocolate. they still treat themselves. no matter what is happening we do well through the ups and downs. business is good now. >> what is your most popular candy? i would think it is eminem, but i don't know. how many different sort sorts s are there now. >> it is our largest brand in the world. >> largest candy brand in the world. >> largest candy brand in the wor world. it was bought in 75 years ago, that's the video you're showing in celebration of our 75th birthday. originally invented for the military, so invented by forest mars as a way for troops to take chocolate out in battle because
it didn't melt. in a tube. that's how it was originally invented and moved -- >> the coffee ones are good. >> and started with milk chocolate, the ones that don't melt, then moved into peanut, the peanut variety, next one peanut butter. and then crispy, crispy came out next. we discontinued that after a while. the pretzel was after that. just last year, we brought back m&ms crispy as a response to social media. bring back my crispy m&ms. >> let's get into the real important, the hardest hitting question i ever asked. why the difference in taste a around the world. mandy would go home to australia and bring back products to us. they're different than what we have here. you're british, you travel around the world. and you see different chocolate tastes. how do you define americans versus the british versus india. what do we all like? really deep question. >> previous to this i was the
cfo of our global chocolate business. i had the opportunity to go to -- >> what you find is consumer tastes aren't that different. so snickers, all over the world. m&ms, all over the world. the question is how do you build that repertoire. so what you know about chocolate lovers is they like to try different things. but they always go back to their favorites. and those favorites are built over time, probably what your parents gave you, as you were growing up, what your grandparents gave you. you build a repertoire of tastes and if you bring something new in, it just takes a while to bring it in and that's why the top brands haven't changed over many, many years because you got a really come in and stick it for 10, 20 years,ed aer are t at your product well known. your brands do well wherever you go. >> the list of things that irk me about the federal government is long. but near the very top is what they do to the sugar industry, how it is propped up with price
supports, all kinds of things to make sure in the united states more expensive. we have seen candy jobs leaving country because of this. is that something that concerns you? do you manufacture anything here in the u.s. anymore? >> we manufacture everything here. and it is a big philosophy of mars. we believe in reinvesting back in the communities we're in. and that means when we do well and sell in america, we invest in american jobs. we have nine factories in the u.s., one in canada. of those ten factories, they make 99% of what we sell in the u.s., committed -- >> but overseas, you have other factories overseas, though, i assume? >> yes, mars incorporated has 400 factories. the chocolate business has 30 odd plus. but ten are here. >> do we have an issue with sugar pricing in america because of federal support? >> we have to deal with a basket of commodities so we have cocoa, sugar, dairy, it is just part of the job to manage the volatility of that basket and make sure we know what we're doing. >> in a similar vein, a lot of
food purveyors objected to being required in some cases, in some cities, like new york, to put calorie counts or salt counts on their menu or on their packaging. you, however, have really rather embraced it. i'm surprised. here is a bag of m&ms. 230 calories in this bag, right? you tell me that. you tell me all of the nutrition facts on there what's inside, fat, carbs, sugars, blah, blah, blah. good for business? >> what is good for business is making sure consumers know what they eat. one of the biggest challenges facing the food industry is overconsumption of calories, fat, sugar. the only way a consumer can manage that is if they know what they're eating. >> what's good for business is making -- >> transparency. >> transparency, then manage it. chocolate is a treat. nobody has to eat chocolate. they don't look at that and say -- >> some people do.
my wife does. >> people don't look at that pack and say, i wonder if it has sugar in it. they know it has sugar in it, they use it as a treat. it is an occasional treat. you have to make sure you can manage that. putting it on the front of the pack makes it easy. it is just one of the things that we do -- >> how many do you eat a day? >> me, probably -- you don't want to know. >> what's your favorite? >> my favorite is peanut. >> just plain straight up peanut. >> are these real or demos? chewy nut, honey nut. >> chili nut. >> they're delicious. >> spicy. spicy is in. >> thank you so much for coming. we learned a lot about chocolate, your company. we appreciate it. come back anytime and bring whatever you would like. >> don't wait another 75 years. >> i won't be here another 75 years so -- >> don't know that. science is advancing rapidly. >> thank you. >> president of mars chocolate north america. cool job. >> thank you very much. following big developing
story out of brazil. the latest straight ahead. as we head out, a look at the markets on this friday. markets are higher by 111 points. mom, dson. now that fedex has streamlined our e-commerce and helped us grow our business, i think it's time we start acting like a business. ok. -here we go... oh, look at this... ok, so number one. no personal items are permitted in the workplace... ..so those will need to come down.
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seconds before 2:00 eastern time. welcome back to "power lunch." we're following a developing story out of brazil where that nation's former president has been detained by police. this is part of a sweeping corruption investigation into brazil's state run oil company petrobas. shares are up more than 13% right now. michelle, this is a story you've been following for quite some time. what is the latest? >> it is two-year investigation that has been going on. but the former president of brazil was detand by police this morning with massive police raids at his homes and his offices, all in connection with the enormous bribery and kickback scandal roiling
petrobas. the detention hitting the country like a thunderbolt. rioting in the street s clashes between police and protesters. there is wall to wall coverage on brazilian tv, physical attacks on the news crews covering the situation. and then when released after being questioned an o.j. simpson moment for the country as helicopters with news cameras followed his car's every move. he then took to the air ways defending himself calling him his detention a media circus and saying he has nothing to fear. >> let's bring in brian winter. editor in chief of america's quarterly. just did a huge cover story for america's quarterly called the corruption busters. focusing on people like the prosecutor in brazil. thank you for joining us. >> a pleasure to be here. >> what do you make of today's events, they are dramatic in
nature is an understatement. >> it is historic. for a lot of brazilians, this was like seeing teddy roosevelt get arrested, right? lulo has not been in power but incredibly powerful in brazilian politics, more than a politician, a symbol. he was the first working class president of brazil in a country with tremendous inequality and governed by a very tiny elite. lots of emotions on both sides today. >> on the cover of your magazine you have three people, corruption busters, but dressed like the ghost busters. tell us about the individual on the cover who made such a big difference in brazil and made the detention possible. >> the one in the middle is sergio morrow, a young federal judge in his 40s, and he's the one overseeing this massive and unprecedented investigation. at petrobas.
this has been slowly unfolding for two years. started with a pretty obscure tip from a money launderer in brazil south and turned into a scandal that they investigated in a pretty sophisticated way and has now led all the way to the top of the government. >> how significant is this for brazil? do you think this is legitimate? are they truly tackling corruption? can we read anything in this in any political way, the way we -- we're very suspicious of the corruption crackdown in china or is this for real and is it meaning for brazil and latin america. >> i get that question a lot. brazil's judicial system is independent. it is not as politicized as some others in latin america and without even beginning to talk about china. it is a body called the public ministry that is like the d.a. here in the united states that has been looking at these cases, and the petrobas cause in particular for two years now.
and they at least on the other arrests and allegations they have made, the paper trail is formidable. >> if there are steps here to clean up corruption there, what is the extrapolation if there is any in terms of foreign investment in the country. does that follow? >> the probe has been disruptive to brazil's economy in the short term. so many countries including petrobas, so many companies have been paralyzed by this probe. the hope is that in the medium and long-term, this will be great for brazil's economy. because you're making it more transparent, you're removing the need for bribes, and, look, there is always going to be corruption in brazil just as there is still corruption here in the united states and a number of other places. this is showing if you bribe public officials on this scale, you will get caught and that's historic for brazil and others in latin america taking notice and pushing similar
investigations as well. >> we have seen the brazilian etf do well, maybe on this news or some optimism about it getting cleaned up or oil. you cover all of latin america. you look at latin america, leave venezuela out of it. what is the next potential bright spot in latin america? what country that has problems now may finally be ready to solve them and get their fiscal house in order? >> good question. latin america had a great decade in the 2000s. and brazil and in particular has suffered these last couple of years because it got stagnant and first and then of course the last two years have been disastrous. the worst recession in 100 years. but what you're seeing now is an anti-incumbent wave. it is -- we saw it in the argentine election last year, we saw a referendum that was denied to bolivia's president in the past 30 days and so what that should bring is a new wave of fresh thought, hopefully it will
bring some better economic policies that focus on things like productivity, and trade. and, you know, i think we'll see the whole region moving in a positive direction. i think it is too early to say that it is a free market wave or an anti-leftist wave because it is really people being more fed up with their government than embracing entrepreneurial capitalism in a way that a lot of people in new york, for example, would like them to. but we'll see where it goes. >> we sure will. we can always hope. brian, thank you for joining us. >> thank you. >> brian winter of america's quarterly. >> another global story impacting the markets is a potential slowdown in real estate, in new york city. let's bring in rafael of the de niro team. great to have you with us. and thanks for joining us here on set. in term of the slowdown that ov you've seen in new york city, which parts of the market are slowing down, which buyers are pulling out from making deals?
>> thank you for having me on. no, not in the commercial market. what i focus on is the residential market. so the slowdown i've noticed is more acute in the 10 million plus residential market. >> okay. >> have you seen any slowdown there? >> i have. i think everyone is seeing it. but to be honest with you, you know, since i've been paying attention to new york city real estate, there have been three water shed events that affected real estate in this city. first, 9/11, obviously. then september 15, '08, lehman brothers and october 2012, hurricane sandy. each of those times within nine to 18 months the market came back stronger than it was before. what that tells me is that new york city is like an alien super highway, a lot of traffic coming and going in both directions and occasional lly things slow down >> who is not buying, robert --
who was previously, and is part of it explained by massive amounts of supply at the high end coming on? >> list of people not buying anymore is getting longer bit day. got the brazilians, talk about that is happening there, the russians, they have vanished. middle eastern crowd with oil prices where they were, they're gone. and the chinese buyers are buying but at the very low end. 1 million to $5 million range as opposed to the top. >> the low end? >> what we have is a penthouse correction. >> somebody call larry flynt. >> somebody chases the top of the market. that is the area, particularly in midtown, where we are going to see a dramatic decrease in prices. >> you said, robert, basically, everybody is gone. >> not everybody. the overseas buyers are gone for
a particular type of product. >> i wouldn't say they're gone. they're just not as many as there were a year and two and three years ago. people still buying. >> i think you would agree there are still -- there say lot of capital flights still happening from these countries. and so we are broadly speaking reduction in number of buyers, but a lot of chinese buying properties in that sort of move called midmarket or lower market, but all these developers chase the very top end of the market, so lucrative, and that's a 5,000 new units expected to dump on the market this year at that high end, they're not going to -- >> define the high end. >> i would say -- five, seven, ten million plus. it is the very type -- something like 15 units for more than $20 million on the market now. those are to come down. >> people think new york city and think the financial markets, and what we have seen at least for the bank stops is they had a terrible year or so. is that having any impact?
are you seeing a slowdown from the incremental buyer maybe who used to work in that sector? how does manhattan real estate feel overall? >> we're very tied to the financial markets in new york city, either you work in finance or your business relies on people that work in finance or your friends or family work in finance. when you see the worst start to i calendar year ever, for the dow, that definitely doesn't help things. but overall i feel like things are starting to improve a bit in terms of sentiment out there. the biggest issue is that most buyers who have a lot of money to spend feel that if they wait a little while longer, they'll get whatever they want a little bit cheaper. that may or may not be true. but that seems to be the prevailing sentiment among the really high end buyers. but, again, eventually, that demand just breaks through. people are going to sit on the sidelines for a little while, they're going to eventually get tired of waiting and they're going to buy. i know in the next year to 18 months things are going to start
to move again. >> i want to see if we can show -- you have an amazing apartment for sale at 157, that tower that is probably three-quarters foreign buyer. $20 million apartment, four bedrooms. there it is. now, i understand that prices are on -- apartment in that building are selling for 30% below the ask. what do you think this is going to sell for in. >> i haven't seen 30% below the ask. but it is hard to say the hope is that we land somewhere between 2% and 5% off the ask and depending on how much time it takes, i think that's what will happen. >> the loam bcal buyers, more td the middle of the market, are they still there now? to melissa's point, the wall street buyer, the entrepreneurs, the guys that are nonforeign investors. >> right. in terms of domestic buyers for 10 million plus, we relied heavily on hedge fund managers and private equity people. and they're definitely pulling back a little bit at the moment.
but, again, i know just from watching this market so closely, doing this for the last 11, 12 years, that's going to change. >> all right, rafael, thank you so much for joining us. rafael de niro. and robert frank. >> thank you. >> would you buy a $20 million apartment if you could afford it, if it diabedn't have outdoo space? a lot of the apartments don't have a balcony. >> you pay for it, but nobody uses it. if you look at the deck and beautiful garden, you never see a person out there. >> little tiny balcony. >> you don't need fresh air. it is new york city. >> get with it. >> i'd like to get with it, a $20 million apartment. on deck, we'll meet a ceo who says he's hiring, but can he actually find people to hire. plus, a bold call on oil. you're going to want to hear it, if you think crude price goes
higher. why all you procrastinators out there caused a big stock downgrade today. we're going to explain when power lunch returns. tment manag, we believe in the power of active management. by debating our research to find the best investments. by looking at global and local insights to benefit from different points of view. and by consistently breaking apart risk to focus on long-term value. we actively manage with expertise and conviction. so you can invest with more certainty. mfs. that's the power of active management.
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together, we're building a better california. hundreds of thousands of layoffs in the energy industry. and those pink slips are expected to keep coming. but employment agency kelly services is finding an unexpected increase in jobs in one particular part of the energy industry. let's find out what that is. carl camden of kelly services
joining us now. it is a dire picture in oil and gas overall. but there is one part of that market, which is shining a bit. sales. what is that and why? >> you know, whenever commodity prices fall, let's say a real problem on the production side, it always creates an increase in demand in another space. and in the natural resource area in particular, with the falling prices for petroleum, we're seeing an increase in demand for the first generation products removed from petroleum for chemicals and plastics in particular, you're finding that the natural resource industry is having to hire a fair number of sales people and support people to support the growth and demand in those two first generation off segments. it is a growth area there, not enough to offset the decline in production personnel, but a significant -- >> i appreciate the optimism. putting a little lipstick on a pig here. how grim is it in the energy job market?
>> in spite of a tremendous growth in jobs and the united states, and around the world, in general, the job losses and the natural resource sector and the energy sector in particular are are huge. in terms of traditional production platforms, especially in petroleum and coal, you're seeing a significant reduction in demand. and demand for new jobs and that's going to continue as, you know, as oil prices drop and those companies focus even more on achieving greater production efficiency. >> let's end this with practical advice. i don't know how my colleagues feel, but i still get e-mail and tweets from people saying the job market may be good, but i can't find a job. so still people out there that -- if you're going to recommend to our listeners and viewers where in america they should go and what they should be doing, what pieces of advice would you give them? where and what? >> deeply remiss of the first piece of advice.
to be a lot more specific, there say lot of adjacent sys for engineers and technically tra trained individuals. they're willing to invest in training dollars in order to make the individuals more useful, more employable. and in particular, the transportation segment, automotive manufacturing, areas that are taking energy based engineers and helping them make that transition into other engineering spaces. >> and a little bit of a homer there, you're based in michigan, shoutout to the myrrhing renaissance. we appreciate it. thank you very much. >> thank you. from kelly services to a growing pizza business looking to do some hiring, anthony bruno, owner of anthony's coal fire pizza. dan marino was talking about it.
53 restaurants, six states, plans to open another ten locates this year. each location employs roughly how many people? >> first, great to be here. we employ 40 people each location between service, bar tenders, busboys, kitchen people. >> do you have trouble filling those jobs? >> we have been very fortunate. we do recruiting from within. we have grown from within and we pay well. we have some great benefits. and our company is fun to work for. so we have been pretty fortunate filling those jobs and being able to grow. >> not only fun to work for, but recognized by zagat as the number one pizza in america if i'm correct on that, right? >> you're absolutely correct, yeah. we have a great product. >> one very near me. i haven't been yet, but i promise to go. let me ask you just a -- >> you said that when danny was
on but you didn't go yet. >> i haven't. >> calling you out. >> he's calling me out. >> you've been doing your homework, anthony. tell me -- >> well, listen -- >> why is coal better than wood? >> it is just -- it is -- wood is also good. but the coal keeps the temperature a little more consistent in the oven. so you get a little more evenly cooked pizza. and a little coal -- a little charred flavor. >> i like that, the well done. i like the well done stuff. it is amazing. the oven is so hot, these pizzas cook it how fast? >> anywhere from 4 to 6 minutes. oven is 850 to 900 degrees. >> that's amazing. we hear an awful lot in the political discussion about how difficult it is for entrepreneurs such as you to overcome the regulatory burden in quotes to add employees in the face of health care costs and so forth.
how do you feel about that? it seemingly has not been an impediment to you. >> hasn't been easy. i've been if the restaurant business for 35 years prior to this concept. it changed so much in the last 20, 25 years. and it is difficult. it really is. and it is very difficult for somebody with a one off restaurant and great sight between insurances and the regulations that have gotten kind of absurd and the municipalities. it is not an easy thing. >> anthony, thank you very much. i promise the next time you're here i will have gone to your location in cliffton, new jersey and i hear you're opening another one. >> we're opening up in englewood. we might bring it over to you. >> yeah. >> music to my ears. anthony, continued good luck to you. >> thank you very much. >> good job, man. >> he got me. >> doing his homework. >> i love it. >> all right. coming up, time to rethink free trade?
donald trump sure thinks so. not everyone agrees, though. we debate free trade ahead. first, big analyst calls on drones. the cloud. and also your w2. ♪ he has a sharp wit. a winning smile. and no chance of getting an athletic scholarship. and that is why you invest. the best returns aren't just measured in dollars. td ameritrade.
time to help you make some money. i screwed up. remember earlier this morning, i said i'll send a fifth name later. >> never came. you let me down. >> unlike tyler going to the pizza place, i said i would send it, i never did. first up, sales for stock for you, mccory initiates coverage with a buy rating and 92 target, they believe a recent price increase at sales force recently announced will be coming a long term tailwind of revenue growth and significant opportunities internationally. the note does add that global macro slowdowns are one of the risks of the stock and the failure of new options, but bullish note, $92 target implies upside and named oracle. >> price increase, music to investors ears, that's the big
concern. there are price wars going on out there. that could really be a tailwind here. second call, ambarella, down 9%. pacific crest cutting price target from 62 to 72 after the earnings revenue is slightly above the high end of guidance, but the april outlook was weak. go pro continues to work down inventory, but a refresh should hit in october. that should help along with seasonal builds for security and drones. that will help the quarter that ends in october. one big concern is lack of visibility in china, one reason that ambarella is not updating the outlook. really taking it on. >> i think you said something important in the note, drones, everybody used this as a go pro proxy. but if drones -- excuse me, really take off, couldn't that help ambarella? >> yes. >> serious question h.
i. >> know but the pun. >> back to back because i screwed up. >> yeah, downgrade. that missed. price target gets cut to 32 from 40, slow start to tax season so far. volume for the company declining year to date. and the rate of decline, even worse, worse than last year. industry filing patterns related to fraud, preventive measures, cracking down on tax filing fraud. and delays in aca related forums. >> i've also noticed other forums, 1098s coming later on. >> true. >> you get it by the end of february. i would like to file before then. maybe they'll see an upturn in business later on. our last stock, always the smaller under the radar name. that company essex property trust, ess, 14 billion market cap. we don't talk about it much. it is a northern california based owner of apartment communities, sun trust, upgrading to buy from a neutral. and analyst says the stock is
overcompensated for a concern over slowdown in north carolina market. 7% drop in the stock this quarter makes it an attractive entry point. expect rapid growth to moderate, but lack of housing in that area should keep business stable. $257 target. that emplies 21% total return. bullish call from sun trust. >> that does it for us. four stocks because you screwed up. >> thanks. back to you. up next, bold call on oil. why one big bank says $50 crude could be here by may. speaking of oil, final trades crossing now for the week. we have the crude close coming up. when "power lunch" comes right back. black and denim co-founder roberto torres took a shot when trying to brew up sales at his
clothing company's new store. he started a second business. a coffee bar, in the same tampa, florida, storefront. customers can now sip their joe and shop for clothes at same time. for more watch your business sunday mornings at: 7:30 on msnbc. our cosmetics line was a hit. the orders were rushing in. i could feel our deadlines racing towards us. we didn't need a loan. we needed short-term funding fast. building 18 homes in 4 ½ months? that was a leap. but i knew i could rely on american express to help me buy those building materials. amex helped me buy the inventory i needed. our amex helped us fill the orders. just like that. another step on the journey. will you be ready when growth presents itself? realize your buying power at open.com professor richard thaler. you are called the father of behavioral economics. i've been called a lot of things. i have read all of your books. did you learn anything? i learned that humans are complicated. we're emotional. absent-minded.
update. >> president obama's visit to cuba will not be affected by the cancellation of plans for secretary of state john kerry to visit havana for human rights talks beforehand. kerry will travel to cuba with the president. >> trump reverses course. gop presidential candidate donald trump telling the wall street journal that he will not order the military to break international law addressing criticisms his policies regarding torture and killing the family members of terrorists would rviolate the gene nievva convention. bernie sanders tax plan -- it sayses my proposals would increase taxes over the next decade and says under that increase, mostly on the rich, everyone would end up paying more. and this is like something out of a movie. scientists from russia and south korea using the remnants of an
ice age cave land cub found in russia in an attempt to use its dna to clone the extinction creature. the remains are in a state of near perfect preservation because of the deep freeze conditions it was found in. that's the news update at this hour. back to you. >> diabedn't end well for anybo but chris pratt. 30 million well. >> exactly. >> sue, thank you very much. >> sure. >> the oil markets set to close for a tthe day. up 4%, 138. crude oil still low, but a 4% gain today. jackie is off today. that's why you're stuck with my mug doing this. where is oil going next? let us ask the trading nation team. craig johnson is a technical analyst with piper jaffray.
and steve poleless. credit suisse saying oil could, not will, but could, hit $50 a barrel. by may. so just in a couple of months. do you agree with them? >> prizes fact, you look at the charts, right now oil still making a series of lower lows and lower highs in here. the recent price action looks to me to be just a relief rally. this relief rally could carry back to 37, maybe $38. but it is going to take a close above $40, reverse long-term downtrend we have seen oil in, so this point in time, i'm skeptical, and i think at this point, this is just a relief rally and can't prove it is anything more at this point in time. there is one more final washout. this is a relief rally and maybe oil trades down to 15 to $17 in a final capitulation washout. >> there you go. nick, you don't want to pile on and say another firm is wrong. craig just said in a minnesota
nice way, that they were wrong. do you think credit suisse's call that oil could go to 50 is correct. >> there is reasons for optimism. i totally respect the technical points of view and it was very well outlined now. but at the same time, the market suffered under so much worry about global economic growth. with the jobs numbers we saw this morning, and some slightly better news coming out of china, particularly over the weekend, you could see some further interesting upside in oil and in energy stocks as well. >> to 50? that's a double -- that's a 50% gain from here. >> i think it is definitely an aspirational price target, but we get paid as much to call direction as absolute level and directionally i sympathize with that. >> nick sympathizes with that. craig johnson, short term rear leaf rally, not much more than that. for more trading nation, head to our own website, trading nation.cnbc.com. republican presidential candidate donald trump saying he
will bring back the jobs he claims the united states lost to china and mexico as a result of badly negotiated free trade agreements. so free trade helped or hurt american businesses and american workers? we'll bring you the debate. and now the latest from trading nation.cnbc.com and a word from our sponsor. >> if there is one thing that many traders struggle with, it is knowing when to sell. if you have a position reaching your price target, here is something to consider. why not sell just half? that way if the market moves lower, you'll be happy you locked in some profits. if the market moves high, you'll be happy you hung on to the rest of your position.
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i mean,our new tour manager-with real,actual money. we run on quickbooks.that's how we own it. welcome back to "power lunch." free trade a hot topic. republican presidential candidate donald trump offering his stance just yesterday at a rally in maine. >> mitt romney said we have to keep free trade. if we keep free trade the way we have it now, we won't have any companies left at all. this isn't free trade. we have to have smart trade. >> let's bring in fay lee, believes tree tra s free trade e
flawed and clyde supports free trade. fay, i'll start with you. it sounds like you and donald trump may be on the same page. are you? >> well, i think certainly donald trump has hit a chord with american people in his critiques of trade policy. i don't think he has very many solutions about where we need to go. so there is no question that our trade policies to date have failed american workers and we need to change those policies, we need to change the focus of them towards good jobs, creating good jobs at home, protecting consumer safety and the environment, lifting up workers' rights and not corporate profits, which is where our trade policies are focused. >> what do you disagree with? >> well, i think his proposals aren't viable, they're not practical. and they're hypocritical to be honest. he talks about ordering companies like nabisco to bring oreo production back from mexico to the united states. and yet he himself, you know he, produces his clothing off shore,
his campaign swag is produced off shore, so -- >> what do you think of him saying he wants to put a 45% tariff on products from china and force apple -- he thinks that will force april toll produapple to produce here in the united states instead. >> we need to make sure we're cracking down on unfair trade policies from countries like china. i think that would go a long way to making a level playing field so american businesses and american workers in the united states trying to create good jobs here wouldn't be at such a disadvantage. no question that we have a terrible disadvantage right now. because our trade policies have failed. but obviously he's talking about policies that would be outside of all of our current trade agreements and trade rules. >> you must be desperate in this. there isn't a single front-runner who likes the tpp and suddenly free trade is hated on nearly every side. >> well, i don't think it is
hated on every side. if you to look depends how the question is asked. even though we're coming out of a recession, americans are by and large in favor of free trade in terms of what it does for consumers and what it does in terms of choice. it also reduces the cost of things. it is hard to talk about donald trump and having a position on trade, doesn't really have a position on trade. he has eruptions about things. he talks -- my co-host here, dealing with, she has a position on trade. i think it is misguided. but it is an honest position. he does not. he talks about coming against ford or nabisco, as if somehow you should never directly invest abroad. if you look at what mr. trump's own record is, he's got hotels and casinos and golf courses all
over the world. if he was really honest, he would bring all those back, or sell all those and then put all his vestment -- >> do any of them have real firm positions on trade in your view? >> in terms of the -- yes, i think rubio has been pretty good. i think jeb bush before he got out was pretty good. they hedge a bit, but for my perspective, they with carry on the tradition of all the way back to reagan through bush and also currently in terms of the tpp president obama. it is mrs. clinton who is the outlier here. >> theo, unions -- >> rubio is not doing particularly well. so in terms of -- >> not because of trade. >> in the presidential race, most of the candidates are very critical of our current trade policies including the tpp for good reason. >> our president is not
critical. you think obama is somebody who would push a policy that fails the american worker? good heavens. >> the tpp -- >> we have a fundamental -- >> hold on. >> the tpp is a complex thing. i tried to look at it, my eyes glaze over. what people do understand is losing their job. two weeks ago you probably saw it as a carrier air conditioning manufacturing facility, guy gets up and says we're moving production to mexico, everybody is losing their job, but the company is going to make more money profitability the people left and like 1400 people. trump mentioned this in one of his rallies. and i know democrat -- unions go democrat, but is there any talk inside that, you know, he may resonate with unions when it comes to vote because he's saying this is bs. these guys are losing their jobs
because things are moving -- what he said was simple but powerful. >> well, he's raising an issue that people care a lot about. but i think hillary clinton has raised that issue, bernie sanders raised that issue and done so in a more systematic and intelligent way. so, you know, you have issues, you have real issues about trade policy we need to focus in on how we could use trade policy to create good jobs at home, how we need a tax policy and currency policy and infrastructure policy that are supportive of creating good jobs at home. >> those are huge issues you're talking about. and important on the macro side. but you haven't talked about the risk of some unions voting for trump because he's going out there and saying, i'm going to stop your job from moving to mexico, end of story. even if he doesn't have a laid out plan to do so, it is a powerful message. >> he supports -- donald trump
is the biggest -- >> claude, we'll trade here. >> hold on, claude. we're going to trade. thea first and then export to claude. thea, you first, then claude, you can respond. >> outsource. you're go heing to outsource to me. >> donald trump is an enormous hypocrite on this particular issue because, you know, he supports right to work policies that are terrible for working people, terrible for unions, he outsources his own production, he's in favor of outsourcing, so he is not a pro worker candidate and i think american workers if they spend more time examining all of his policies are not going to fall for that. >> claude, you sort of agree with that. >> i agree he's a hypocrite. back to the anecdote you raised about somebody saying that a particular company or particular plant was going to mexico or going wherever. the larger picture is we had $250 billion worth of foreign direct investment into the united states last year. and that we have -- a capital
account here in terms of the investment, which is huge in terms of hundreds of billions of dollars. those support u.s. workers. this is a reciprocal system we have here. when they invest abroad, it is not so much they're taking jobs away from here, they're exploiting market opportunities that you wouldn't have if you didn't go to mexico, you didn't go to china or didn't go to europe. and what clearly economic has shown is that the larger the investment is, the more the jobs are pulled back here because of supply chains. it is a reciprocal thing and you can't say as -- and trump says, that that somehow outsourcing is all bad. it is not all bad. >> thank you for joining us. we appreciate it. thea, claude. >> thanks for having us. >> a big event coming up later today on cnbc.
john harwood will have an exclusive interview with former secretary of state and democratic presidential candidate hillary clinton this afternoon 4:00 p.m. eastern time. don't miss it. earlier the s&p 500 crossed the 2000 mark for the first time since january 6th. where do we stand? 1997. the sectors, as you see, all but three health care, discretionary and telecom are up. utilities lead the way as they have for much of the year so far. more on the markets straight ahead when "power lunch" returns in two minutes. sales event is on.
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shares of valeant down 6%. the company withdrawing guidance here. tonight an "fast money", we've got the first analyst on street to put a sell rating on valeant, goes back to 2014. the acquisitions and how it was growing through acquisitions and said that business is deteriorating and you're going to get a glimpse of how this will trade and how the business will be if and when the acquisition music has stopped. what are we seeing right now? tonight at 5:00, that analyst, where he sees the stock going
next. >> on the other side of that melissa, you've got really beaten up oil names doing really well on a friday. want to end on a high note for one day because these names are still like 90% off the all time highs marathon oil the biggest hit of the big cap oil companies. that stock is up 6% today. com stock resources, up more than 20% and chesapeake -- >> i was going to ask -- >> we have the death of mcclendon still being investigated but the stock has been moving higher almost every day. the whole energy complex is up today. >> it's up 75% this week. >> it was a strong reaction to mr. mcclendon's death. >> the high yield bond market setting an 8-year high for inflows, 5.2 billion went into
our cosmetics line was a hit. the orders were rushing in. i could feel our deadlines racing towards us. we didn't need a loan. we needed short-term funding fast. building 18 homes in 4 ½ months? that was a leap. but i knew i could rely on american express to help me buy those building materials. amex helped me buy the inventory i needed. our amex helped us fill the orders. just like that. another step on the journey. will you be ready when growth presents itself? realize your buying power at open.com
welcome back. i'm melissa lee. look at this chart from bank of america of the investors pouring more than $5 million into high yield funds and that is the largest weekly inflow on record. at the same time government bond funds saw the highest outflow in four months. what we're seeing with fixed income is an increase for risk. let's bring in the head of fixed income research at u.s. bank wealth management. >> thank you. >> maybe this is not entirely a surprise given the mood in the equity markets, it is a week where the s&p is up by more than 2%. how long do you think the inflows will be sustained? >> well, i think part of the reason why you saw some of the inflows into high yield because it had been beaten up and taken to nearly crisis levels and it wasn't justified. the minute you saw stabilization in oil prices, saw the huge inflows of money in the anticipation that the energy defaults within high yield
wouldn't be as substantial as suspected. high yield is the single fixed income asset class most closely correlated. you would expect the moves somewhat in tandem. >> there are a lot of nuances, where did you see the most demand? was it in energy? >> i think across the board because of liquidity was so substantial, when we ran into issues with the energy space before, unfortunately folks were forced to sell what they could, not necessarily what they wanted to get rid of it. i think at this point you're probably seeing inflows into all sectors and energy being the one that's beat up but then you're going to see money moving into the sectors that haven't been beaten up as much that will continue to perform well. anything consumer related or leisure, travel related, you'll see positives in those sectors as well. >> i'm sure there are some investors sophisticated enough to sliver the market in different ways but i think -- i
don't know, from watching behavior in high yield over the years, my guess is that most investors are just chasing the yield, particularly at a time when there's no yield anywhere else. >> they had been chasing yield. when you're in a low interest rate for so many years, you have those not familiar with the risk associated with it and they pile into it. then you saw a lot exit the market the minute it started to struggle with performance, 18 months ago. i think now what you're seeing coming back in the -- >> i think it could be those yield chasers that are reassured that perhaps it's not going to implode or also could be institutional investors that trim back exposures until we found a floor on oil. >> do you recommend people using etf or doing a little more homework and slicing and dicing and picking something rather than piling in? >> well, i definitely do not
recommend slicing and dicing and choosing individual names in high yield. you need a diversified portfolio. but i would actually steer folks to an active manager strategy versus an etf because in an etf you're stuff with sector exposures like the 20% weight in energy. i would still to an active mutual fund manager. >> we have 20 seconds but in terms of what could derail the run in high yield, what would that be? >> number one concern is oil drops below $30 a barrel and stays there. that will have a detrimental impact on the energy sector and other sectors to provide liquidity and it will take the entire index down. my greatest concern is oil dropping below the earlier. >> thanks for joining us, we appreciate it. >> that's something we'll watch for sure. it spreads to so many different
sectors. >> right. >> which is why i'll be going back to north -- almost said north carolina. going up north next week. >> getting warmer at least. >> it's like 40. >> that's good. >> thanks for watching "power lunch." closing bell is up next. >> hi, everybody, welcome to "the closing bell." i'm kelly evans. >> tgif, i'm bill griffeth. an hour ago we would have been talking about a good rally but it has been fading i guess in spite of the stronger than expected february jobs report out this morning. that data helped to ease concerns for some and maybe the economy was heading towards a recession. we have all kinds of per mutations about that but we'll get to that. >> energy stocks helping to drive the gains led by a rally in oil prices. $36 a barrel for