Transcripts For CNBC Power Lunch 20240622

At 4,994, close to 5,000 obviously. At 1,249 is where you find the russell. Bob pisani is at the New York Stock Exchange. Janet yellen is giving her prepared speech in cleveland. Have we seen any kind of reaction in the stock or bond markets . It didnt have to be because the whole world gapped up at the open. I would say modest reaction but no big surprises in her commentary. Important thing is what happened overnight. Were 51 almost advancing to declining stocks. Its been that way almost the whole morning. Tech materials, consumer staples, financials, all the riskon group here everything is up 1 because the whole world went up 1 . The s p 500, we gapped up 20 points at the open. Thats really rare folks. Thats 1 right at the open. That was on greece. We surged overnight when the details on the greece talks came out and they were offering concessions, at least from the greek side. It even happened more strongly in germany. We had a 2 gap up in germany. You can see the Straight Line there but it is a 2 . Trust me. Germany gapped up. France gapped up 2 . Spain did. All of your europe gapped up basically 2 on this. So there was definitely a lot of traders caught on the wrong side. There was a lot of pessimism on greece a lot of betting in the wrong direction and people scrambling overnight. China, another story. Not quite the impact on u. S. Markets that greece had but another 4 5 today. Art cashin quote of the week rally or execute. Weve had huge volume in all the chinabased etfs. Im using ashr because thats the largest, most efficient way to get into the China Mainland market. The oneweek chart goes from 42 to 33. In two days thats a 25 drop in the Chinese Market. Then completely rallies back in two days. Think about this and how many billions and billions of dollars move in two days here back and forth, why people dont particularly trust the Chinese Market at this point. A lot of up and down. Well wait for the q a which is what everybodys waiting for on janet yellen. That may potentially be market moving. Guys back to you. Really not too much in the speech to chew on at least as far as ive read it. But we will be bringing that you q a. Greece puts forward its latest bailout proposal to creditors. You know what . Looks like the plan the greeks rejected on june 16th when Prime Minister tsipras called for a referendum on the issue. Was this whole referendum all a big waste of time . Chief International Correspondent Michelle Carusocabrera is live in athens. Our senior economics reporter Steve Leisman live in frankfurt, germany, where the pressure is on for angela merkel. Michelle, start with you. I assume that there is a demonstration going on back there. What are they yelling about now . And it aint janet. Reporter they are novoters and they are protesting that Alexis Tsipras is inside telling the parliament to vote yes for if the very same proposal that they told he told them to vote no to. You got to give him credit for at least being philosophically consistent. These are communists here and they are mad. You asked if the referendum was a waste of time . It was beyond a waste of time. It was a dangerous ploy that brought this country into the abyss. When he made that announcement late a week ago, people went into the streets to the atms. The bank runs starts. Capital controls were put into place and the economy has been in stranglehold ever since. The fear in the owners of businesses, the fear we heard in their eye saw in their eyes and heard in their voices has been tremendous. So it was beyond a waste of time tyler. It was really devastating and it remains to be seen if theyre going to be able to get out of this yet. Okay im going to get back to Steve Leisman as well if a second. In the meantime dom chu, you have breaking news on the reit count for the week. What we have here is the second straight week of gains in u. S. Oil rig counts. U. S. Oil rig counts up five to 645. Again, this weeks u. S. Oil rig counts up five to 645. Overall the total rig counts were up just one to 863. Still though this represents the second straight week of gains for active oil rigs after having no other gains so far this year. So again, the caveat to point out here despite these oil rig numbers, plus or minus, Oil Production still remains near record high levels. We did see such a slight tick down perhaps in oil prices though nothing major to speak of with regard to the rig counts. Still, interesting move here up five. Headline oil rigs for the u. S. Up five to 645. Again, the second straight week of gains for that rig count in the u. S. Oil sector. Back over to you. Wti crude is currently down by. 5 at 52. 49. Back out to Steve Leisman now in frankfurt, germany where the pressure to accept greeces proposal is on. Right, stevie . Reporter thats true mandy. I want to talk about this. As you know markets are up. Bob pisani just told you on this greek optimism. But just in the last hour or so the spanish economic minister says he advises caution, not necessarily optimism. The most important player of all in this game the germans, they really havent commented either way. So the market seems very onesided here and im wondering if thats the right call here because there remains today a considerable debate in germany about whether or not to give concessions theres very little support for that here. We talked earlier with omar from the Franklin School of management. Certainly as far as the population and such is concerned, there is no willingness finally to give in. I think as far as the Political Class in germany, the economy, the policymakers are concerned, theres certainly also a kind of fight as far as rationality is concerned saying yes, we should go on for further concessions. Reporter it will be a long and winding road this weekend to any greek bailout or perhaps ultimately a grexit. The ecb, the European Commission and the imf meeting now to determine if greece is eligible for an additional bailout. That will be followed saturday by a meeting of finance ministers. Finally at a summit in brussels. The leaders of the eu will meet to ultimately ink this. In germany this issue, the next thing that has to happen is will there be a writedown or some change in the greek debt profile thats out there. Three options on the table. Write it down. Thats the one the germans seem to hate the most. Steve, were going to get steve, were going to get straight to fed chair janet yellen now whos taking questions. Today at the city club of cleveland we are enjoying a friday forum featuring dr. Janet yellen, chair of the board of governors of the Federal Reserve. We encourage you to organize your questions for the speaker now and they should be brief and to the point. Microphones are set up on both sides of the room. We invite you to begin lining up behind those microphones. Staff can help you. If you are listening through the web stream or on the radio by our public Media Partners at idea stream please tweet your questions with the hashtag city club or hashtag yellen. Our team will do their best to work them in. The chair mentioned senator sherrod brown. Id like to extend welcome to everyone in attendance today. We welcome all of you here and those joining us via our radio broadcast and web streak. Radio and Television Broadcasts and the wekb stream are made possible by Cleveland State university and pnc. Next friday is our annual state of the great lakes address featuring betty sutton. For more information about our upcoming and past for rums visit us online at cityclub. Org. Todays forum is the sally grease forum. Thank you for your support. Also we want to acknowledge our host today, cleveland and cuyahoga countys Global Center for health innovation. Thank you for your hospitality. Indeed. And we welcome guests while they introduce chair yellen at the city club of cleveland, lets take you through the markets right now. As you can see, strong rallies for the industrials, up 219 points now at 17,769. Most of this on hopes that the situation in greece might inch closer to some resolution over the weekend. And here comes chair yellen. Lets get ready for some questions. Immigrants can oftentimes be a tremendous asset to our communities in terms of job creation. They want to hit the ground running and start their own businesses. Is there a proper representation for immigrant groups on the Community Advisory council, do you think . Well youre talking about the Federal Reserves formal Community Advisory council . Yes. So thats something that were we ended formally after doddfrank moved responsibility for a lot of consumer issues to the new Consumer Financial protection bureau. But were beginning it again, and in fact were attempting to locate suitable candidates to serve on that council, so we welcome nominations and we will of course try to achieve very broad representation in the community of groups with the potential to help us better understand the needs of local communities. So we certainly will try to achieve that representation. Dr. Yellen, thank you very much for visiting cleveland. Were very proud to have you here. Thank you. I understand that the role of the Federal Reserve is different than the role of setting fiscal policy which, of course is the responsibility of the legislature. With senator brown here today, and with your comments today, what two or three things can you suggest to our legislature that would make them take action and make your job achieving your objective easier . Boy well, i try not to go too far in giving advice to senator brown and his colleagues in congress. But there are a couple of things that i have said. First of all, for the last number of years and i mentioned this in my prepared remarks there was a period when Fiscal Consolidation really served as a significant drag on the recovery and created, especially with shortterm Interest Rates at 0 , burdens on Monetary Policy in trying to offset that drag. And of course we did the best that we could. And now im pleased, as i mentioned, that fiscal policy is essentially neutral with respect to the economy. So one piece of advice that weve routinely given to congress is to during the period when the economy was weak and we wanted to see it recover, to try to avoid doing harm to the economic recovery. Over the longer term although for the next number of years, almost a decade now, it looks like fiscal policy is on a course where the debt to u. S. Debttogdp ratio will be stable. Eventually as the population ages, as baby boomers age, and particularly if Health Care Costs rise more rapidly as they have historically in the United States, then other prices we will again face mounting budget deficits and a rising debttogdp ratio without some further fiscal actions by congress. This is a set of longterm issues thats not new. Weve known about this for at least 20 years, and it remains important for congress to address those issues. And i hope that there will be steps taken to do so. Dr. Yellen, thank you so much for your speech and thank you for your commitment to public service. Thank you. As a young person working in the field of economics, i can definitely say youre one of my personal heroes. Thank you. I appreciate that. With that being said my question is what advice do you have for young people entering the field of economics, and especially for young females entering the field of economics. Well i think theres never been a time of greater opportunity for women in the field of economics and finance. As ive looked at trends over time. Number of women and their success in the field has continued to increase and i feel that there are many, many opportunities, a rich set of opportunities that are open to women, and i see the women around me in my own organization moving up at a pace that i am pleased with and i find very encouraging. Obviously, acquiring a firstrate education and working hard at the job, looking for challenges, being willing to take them on are excreamily important. And i think we also know that mentorship is very very important. And i think thats the absence of suitable mentors is something that has held women back and in the economics profession really selfconscious efforts have been made to make sure that women have the kind of mentors that they need to see them success in the field. And i think thats important throughout otthe Business World and the world of finance, to make sure that businesses think about how to make sure that women get the kind of coaching and mentorship and support that they need to get ahead. Madam chairman glad you are in cleveland. Thank you. My question is the lack of partisanship. If there was a lack of partisanship in the congress how much more of the productivity or Economic Activity would increase if you can quantify that . Then the second part of the question is Christine Lagarde of the imf gave advice to the Federal Reserve not to raise Interest Rates until next year. How much is that part of your thinking that you take into account for her opinion . Well on the partisanship, im sorry to tell you, i cant quantify what difference its made. There have been moments when weve had a Government Shutdown and come close to debt ceiling crises when i think we have seen perhaps temporary, but nevertheless noticeable public response to the uncertainty thats caused. Let me turn to the requestquestion about Christine Lagarde and the imf. The imf undertakes reviews of all of the economies that are members of the International Monetary fund including the United States and i think thats a very valuable undertaking. There are a range of views. The imf has recently urged the United States urged the Federal Reserve, to wait until 2016 to begin normalizing policy. I think if you look at the range of views within our own committee, the members of the federal open Market Committee publish their own individual forecasts of the appropriate path of policy conditional of course on their Economic Forecasts. You will also see a range of opinion there. And so it is part of the spectrum of opinion. I think what we have in common is that the imf and most fomc participants do see an economy thats improving, has made a great deal of progress is approaching even if it hasnt quite reached maximum employment that we see inflation moving up over time and were getting if this continues reasonably close to the oint at which it would be appropriate to normal normalize policy. I guess i want to emphasize that while there is a lot of public discussion and focus on that first move because it has been more than six years than shortterm overnight Interest Rates have been very close to 0 we shouldnt overemphasize the timing of that first move. What really is going to matter is the entire path of shortterm Interest Rates over time. And as i indicated in my prepared remarks, my own view is that the headwinds that have been holding back the recovery for all these years, theyre receding and things are getting better. And conditions are improving. But thats a gradual process. And if im right, it means that it will be appropriate top continue running an accommodative Monetary Policy and only withdrawing accommodation at a gradual pace and that gradual pace of rate increases that we would see if that Economic Forecast proves right, thats really more important as a factor for Decision Making than the actual timing of a first increase. Now economic developments are uncertain. What our committee needs to do is meet on a meeting by meeting basis and assess what were seeing in the economy and try to make appropriate decisions so there are no guarantees leer. But our committee has stated that were really looking at two things. We want to see some further improvement in the labor market and with inflation running as low as it is before raising rates we want to feel reasonably confident that inflation is going to move up over a couple of years. Welcome to ohio. Thank you. My native clevelander wife wanted me to ask you, which would come first, the fed funds rate increase or a cleveland sports championship, but i would like to ask a different question. How do you balance the observation that some labor market indicators are well past the point that in the past would mean removal of accommodation if not outright tightening. Shortterm Unemployment Rate is well below its recent average and unemployment claims are plumbing generational debts. Thank you. Youve asked a great question. And its absolutely true your description of the labor market statistics statistics. We look at many different indicators of the labor market and no single indicator tells the story. If i could only have one indicator, i would probably choose the Unemployment Rate but i dont have to have only one in my talk. I mentioned job openings hiring, quits, wage developments parttime, involuntary employment laborforce participation. Were looking at all those things and you are absolutely right that by some metrics, weve gone beyond maximum sustainable employment, and by others we havent. So some judgment and analysis is required to reach a conclusion here and id say that even within the fomc participants differ in their judgments on where we stand. My own personal judgment which i offered up looking at this full range of metrics of the labor market is that theres a little bit more slack in the labor market. Theres somewhat more slack than you would think based on the Unemployment Rate alone which in june was 5. 3 . Now we also have to form judgments about what is a longer run normal rate of unemployment. And that depends. Thats a judgment that can change over time. Within our committee, most participants would judge that 50 to 52 is the range where they think that normal longerrun Unemployment Rate lies. So 5. 3 is pretty close, but at least my own judgment is that there is a little bit more slack than that. Id say the fact that wage increases have been as modest as they have and perhaps were beginning to see early hints of acceleration but not in every metric. To me its not definitive but it is consistent with the notion that there still is some slack in the labor market. But i agree with the point that you made that there are statistics that would save were further along than that. I am struck as i imagine many people who are here today, by the exactitude with which you speak. It is exactitude that touches not only on care by clarity. You want to be understood by lay people and i applaud that. I particularly think, to use your phrase for example, that accommodative Monetary Policy is a vivid way to talk about trying to keep Interest Rates really quite low. But i want to draw attention to something that i have been struck with as troubling piece of fed history, and that is the choice of the term i dont know whose ox im goring here quantitative easing. That is so o opaque as to seem to be intentionally hard to understand. I not only compliment your choice of a clearer phrase but wonder if it reflects any commitment to avoid technically opaque and completely incomprehensible phrasing and pick things that people can understand. Well, thank you. Thats a great question. And i believe the language that the Federal Reserve and my predecessor chairman bernanke used when we began purchasing assets is we called it the largescale asset purchase program. We wanted to emphasize that what we were do inging was singling out longer term, longer maturity asvets, both treasuries and mortgagebacked securities, because we thought that buying them up would put downward pressure on longerterm Interest Rates. There were countries like japan that had conducted asset purchases, and they tended to focus on shorter term maturities, at least in the early stages of what japan did. Now the name that had been given to japans program was called quantitative easing. And that misleadingly suggested that all that really matters is the quantity of assets that you purchase, not the type of assets that you purchase. We avoided using the term quantitative easing which had been applied to japan because, in our view what really mattered was that we were purchasing longer term longer maturity assets and that was really important about our program. Well although we gave it a name that we thought was clearer and more informative, we were unable to stop commentators from labeling this program qe or quantitative easing and although many of us pushed back for a number of months in the end we all succumbed and since the public called it quantitative easing weve gallon along withgone along with it, too. Chair yellen, thank you for coming to cleveland. Maybe this is not a question you can answer but i was hoping in case it is whether you could share your three greatest threats to america. And what you would like to be seen done to mitigate these risks going before before it is too late going into the future. These can be internal or external things from Campaign Finance to Cyber Security to geopolitical agents. Thank you. Well thats a hard question. Im going to if you dont mind focus it on threats that i think are most relevant to my own set of responsibilities at the Federal Reserve. And i think what id like to highlight is that the biggest challenge i think Federal Reserve faces is making sure that we have a Strong Enough and resilient enough Financial System that is well enough regulated and supervised that we do not have another financial crisis in the lifetimes of any anyone in this room and hopefully not the life times of our children either. This was really a devastating event that has taken an enormous toll on our economy and on american households and families and workers and we are very focused on promoting Financial Stability in everything we do both in the way we supervise the Financial Institutions for which we have responsibility putting in place the stronger regulations that built up capital and liquidity in the Financial System having the tools to resolve in an orderly way a firm that encounters trouble that is of systemic importance. And, more broadly, monitoring threats throughout the Financial System that go beyond the regulated portion of the Financial System. So i take as the Federal Reserves mission and our top priority coming out of this crisis new priority is to be be much more vigilant much better prepared than we were in the runup to this crisis so we dont have another one. But i will second what you said about Cyber Security. That is a huge threat as well on which were seeing daily evidence of how vulnerable we are and paying a great deal of attention to trying to shore up our defenses on that front as well. [ applause ] thank you so much. And that was the question and answer session of chair yellen at the city club of cleveland. Lots of questions. Seemingly the only person who didnt get a question if was lebron james and she wasnt even asked about lebron. But her basic points were that the fed stands ready to move on Interest Rates at the appropriate time. But i think one of the key passages as we bring back as we look at the plashthsmarkets which are roughly unchanged than they were at the beginning of her speech. We bring back Michelle Carusocabrera and Steve Leisman at their respective posts in athens and frankfurt. I thought, steve, that one of the more interesting points in her speech was that she said i currently anticipate that the appropriate pace of normalization will be gradual. Shes said that before. And that Monetary Policy will need to be highly supportive of xhiblg being a Economic Activity for quite some time. Yet again she points out whats far more important, as we should know already, that the timing of the initial Interest Rate hike whatever it is is what the path of Interest Rate likes looks like over the cycle. Thats right, tyler. I want to speak for michelle and say i think were both disappointed that she didnt talk more about greece. Not at all. And certainly about china. May be telling that she didnt bring that up. But youre right. This has been something a kick the fed has been on for a while, to get people like you, tyler, off of this focus and obsession with the first rate hike. They want to be able to do this in a way that doesnt cause a market can trump. Part of their rhetoric here is chill out, we do this first rate hike, it is going to be okay because after that it is going to be gradual, well react to the economy as it is needed. Were not on any automatic pilot when it comes it raising rates like Alan Greenspan was in 2004. This is a mantra theyve been pounding. I dont know the amount to which theyve been successful. Right now the message from yellen for what its worth is the first rate hike is not that big a deal. Its the subsequent ones and those subsequent ones will be gradual. The slope will be very gradual. Do you agree with that michelle, what steve was saying that perhaps it is telling that there wasnt discussion op concerns over greece and china . I thought she was going to say than quantitative ease something not a greek word. Sorry. Ive gone native. First, i guess im not surprised that she didnt address greece directly because i would have liked it it would have been very pertinent. But statement just as president obama told the American Public not that long ago, whether or not what happens here truly has a deep effect on the american economy, im not so sure. Im pretty sure shes far more focused on employment and what is happening there. But i would agree with your assessment overall, the message that she was trying to send and what steve said about the pace of Interest Rates. Michelle and steve, thank you very much for weighing in. Well take a very quick break here on power lunch. I leave you now with a look at the markets. We are very little changed from where we were going into the q a session with yellen. The dow is still up by 1. 16 or 203 points. We went into yellen 217 points to the up side. We will leave you with that board. Well be back in a couple minutes time. Dont go away. Here is a simple math problem. Two trains leave st. Louis for albuquerque at the same time. Same cargo, same size, same power. Which one arrives first . Hint its not the one on the left. The speedy guy on the right is part of an intelligent system that creates the optimal trip profile for all trains on the line. And the one on the left . 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If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Why pause the moment . Ask your doctor about cialis for daily use. For a free 30tablet trial go to cialis. Com welcome back. Lets look at the s p 500 for the day. Very little reaction in the markets to Janet Yellens speech or the q a. No one expected her to frontrun her testimony. It was an enormous gap up 20 points, at the open up on the s p. There may be some progress over in greece so weve held those gains 51 advancing to declining stocks and moderate volume. Sectors, the whole market moved 100 practically. Everything that really matters in the s p 500 up more than 1 right now. The other big mover was china. Another rally. About 5 . Pretty much the same as yesterday right there. However, we were looking for some indications of the impact of the slowing Chinese Market on the economy there and and the Chinese Automobile Association came out with very interesting numbers. June sales in china down 2. 3 . Those are the auto sales to the downside. Thats the weakest numbers weve seen in quite a while. Only chinese Auto Companies are down today. All the other Chinese Companies trade here in the u. S. Are on the up side. Guys, back to you. Bob, thank you. Lets bring in our billion dollar prfl manageortfolio managers mark travis and matt robby. Gentlemen, welcome. It has been one heck of a week. Everything. Greece, china, interruptions in trading on the floor of the exchange exchange, and now we have janet yellen. Mark, pick the one thing this week that has most impressed, worried, affected your view of the markets. Well tyler, as a kid growing up in florida, i really liked the miami dolphins. Their middle linebacker in particular, nick buoniconti. He had this neck roll. A weak like this you need a neck roll so your neck doesnt snap back with all the activity. But i think that i would tell viewers that prices change a lot more quickly than Business Values do. And to try to stay focused on the Business Values which is what we do with Intrepid Capital funds. If you let the latest greatest 102 swing, it will really drive you crazy. Try to focus on what you think the business is worth and what are you paying for it and mark makes a really important point there. Sometimes the best thing to do is to do nothing and to play past the noise and the headlines. I i wouldwould agree with that statement for sure. I would be looking to the Earnings Report coming out. A lot going on with the fed, greece and china. It is a lot of noise. Some of it is very important but the reality is with the earnings season coming up there will be a year over year decline. There is an expectations 4. 5 . Maybe a little bit up on earnings but the reality is were priced at a pretty high multiple and investors should be a little bit concerned about valuations versus the growth rate on earnings. If theyre looking that way they should get defensive with some sector plays looking at maybe inat sectors have havent performed as well maybe industrials going into the transportation areas, energy names like exxonmobil and oxi. Utilities have been beaten down. Most of these quality stocks thats how we invest, in quality stocks, down 10 , 15 , some cases 20 . Highest quality Balance Sheet. Most of the performance in the s p 500 is in the lowquality names. Get defensive, move forward. Matt just gave us very concrete advice. Whats your 30second pitch here for concrete advice going into the next weeks . Well its hard to find things that people dont like in an environment where the last three to five years weve had annualized s p numbers around 17 which is well above norm from my perspective. So matt mentioned the e and p space. Couple names we like are unit corp. , patterson uti. They have drilling rigs you can value. They have higher Value Electric ones which are needed now in horizontal drilling. But some of them theyre not particularly levered but theyre getting swept out with the baby just because of whats happened in that space and drilling rig counts are going down. But they wont build unless theyve got a threeyear contract to use them. We think those will work out over time. Gentlemen, thank you very much. Mark im never forget how those dolphins beat my redskins back in their perfect season. I do recall. Thanks guys. Breaking news now. Lets get back to Michelle Carusocabrera live in athens. Michelle. Reporter want to give you an update with whats going on with the protests. In front of parliament tonight we have groups from communist party, the far left party, labor unions, et cetera who are angry about whats happening in the parliament. These are no voters and they Want Parliament to vote no and they believe parliament is going to vote yes. Whats unique to greece at this point is there may be violence in this crowd. Weve seen it before in the past, in 2010 2011 during protests like this because there are such deep divisions within the communist party in the far left of greece. Right in front of the parliament where you see white flags, some more mainstream communist party. Down here in the street below us youll see a lot more individuals dressed in black. Those are. Groups of the far left. You may think the far left and the communists would be the same thing. In greece theyre not. Theres many different divisions where the guys down below us think that the guys in front of the parliament are just too right wing for them. What we have seen in the past these guys right in front of us a lot of them were carrying sticks. Theyve come prepared with gas plafks masks, et cetera. Sometimes there are altercations. But we just want to alert you to that. The crowds arent as big as weve seen in some of the worst demonstrations back in 2011 et cetera. But this could get a little messy. All right. Thanks for joining us. Power lunch will be back just after this break. Dont move. It took Tim Morehouse years to master the perfect lunge. But only one attempt to master depositing checks at chase atms. Technology designed for you. So you can easily master the way you bank. Over my shoulder is a chart of the puerto rico general Obligation Bond due in 2035. You can see the price plummeting there over the past month. On monday this upcoming monday puerto rico is set to meet with creditors. Alexandra alexandra labenthal. What should bond holders expect . What is the best and worst case of this meeting . I think you look at monday really as a starting point. Nobodys looking to come out of monday with a definitive answer. Lets just go through a couple of things. So the four major hedge funds, distressed investors have actually hired a Major Law Firm to represent them. You have a meeting taking place at citigroup which is the broker dealer thats going to work on any transaction that goes forward. They have excellent bankers there who obviously understand the credit quite well. And theres going to be an initial sitdown. What i dont think is going to happen is that people are going to come out of the meeting with a complete answer or that there will be throwing up of hands. But obviously you have two strong sides of an argument at this point. Have you government saying that they cant pay their debt and the government has taken some steps over the last couple of weeks, including passing a provision that they dont have to set aside money for debt service or redemption proceeds which is a pretty big step to take. And you have the funds that whether its the hedge funds or whether its the mutual funds saying you got to pay the bonds. If puerto rico were a company, not a commonwealth what would happen and wouldnt there be some sort of workout . Well its interesting that you say company. What i would actually say, if puerto rico were a state. Because if it were a state it could declare bankruptcy and thats something that it has been pressuring congress to do and youve now had the president ial candidates weigh in on it and the democrats are saying that it should somebody allowed to declare bankruptcy and the republicans in general are saying no that it shouldnt be and that its none of our business, et cetera et cetera. So if it were to be able to declare bankruptcy like a state can, then obviously this would be a somewhat i say a more orderly process, though nothing in a situation like this is going to be orderly. But it would be something that it could do as part of the bankruptcy process. And its going to continue to be an ongoing debate in congress and i think theyre going to have to address it. Alexandra, i hope youll join us on monday. Zbliptss. Its already on my calendar. China on move to the up side overnight following the correction we saw earlier this week. The shanghai index now up 4. 5 in overnight trade. Shenzhen shenzhen, up 4 overnight. How do you play all this vog tilt . Jonathan brodsky, good to see you again. Weve had a couple of up days in shanghai and shenzhen after a terrible rout since midjune. Number of government fixes are out there like freezing the trading of shares. But are these just shortterm fixes just a bandaid . You have to keep in mind that about 50 of the ashare market is still frozen. I want to differentiate the ashare market from the hshare market or Hong Kong Listed market. The hshare market is not really available to foreign investors. It is much more of a local market. Weve seen a lot of volatility. Weve seen an element of complicit with the government involved in the ashare market. Were not invested in the ashare market. Were concerned about the heavyhanded approach from the government. Though were not all that surprised by it. Given concerns i think that the market may be missing related to social instability, given the 90 million retail investors, 40 million or so are relatively new. This heavyhanded approach i think is as much a social issue as it is an economic issue. I think you raise an excellent point here. If you were an investor either someone from the outside wanting to invest in china or the hshares or if you are in china wanting to invest in the. Ashares, do you think your confidence in the government has been completely undermined here . Because to my view the government is completely losing face. They told everyone go out and invest in shares and now they kind of struggle to keep things stable. I think they are trying to balance the Economic Impact of their actions versus the social impact of their actions. A historian of chinese history would know that social stability will always take precedence over economic stability. So i think that there is a lot of mixed messages out there. That being said our view is that this could potentially be a bullish scenario where the government recognizes its heavyhanded approach has not worked and that it has to continue down its reform plan. It needs to bring in outside capital from the foreign markets which is why theyve opened up the Shanghai Hong Kong connect and to really fall back as a result of whats happened over the recent week or so really puts their reform agenda backwards. I think that there is the potential that you see enhanced reforms which will be beneficial over the long term. When you say beneficial over the long term during this liberalization process what do you expect the h and a share markets to do . The hshare market and Hong Kong Market is interesting certainly in the near term. You talk about a 5 rebound in the ashare market. Thats really separate lyly operating on its own given there is essentially a ban on selling securities within that market. However the hshare and Hong Kong Market really ashthed as a selling venue of last resort over the last couple days as margin calls have required the shanghaihong kong connect to bring capital back into mainland china. The result of that is a lot of attractively priced securities in hong kong. That being said the last two days weve seen a decent bounceback. But the fundamentals these companies have not moved excuse me. The fundamentals are strong and valuations have been relatively tempered visa see theavis the ashare market as a result of hong kong being much more institutional. Therefore we see a lot lfof value in that market. Wh group and also china lesso group, a leading manufacturer of plastic pipes and pipe fittings. Thank you, jonathan. Also new warnings about some of the most common overcounter painkillers the fadzda raising the risk of heart attack or stroke. Straight ahead on power lunch. [ female announcer ] who are we . We are the thinkers. The job jugglers. The up allnighters. And the ones who turn ideas into action. Weve made our passions our lifes work. We strive for the moments where we can say, i did it we are entrepreneurs who started it all. With a signature. Legalzoom has helped start over 1 million businesses, turning dreamers into business owners. And were here to help start yours. Here is your friday lineup for the next hour. A greek deal getting closer. Stocks are rallying but there is still a big hurdle out there that many arent talking about. We will. Well tell you what it is coming up ahead. Plus a rare interview with the head strategist for americas biggest asiaonly investment firm. He has some really interesting views on china youll want to hear. Robbed on camera . We have the video, plus melissa and i with our stocks of the week, guys. A big show is ahead. Back to mandy and tyler for now. Tyler, we want to bring you up to speed on whats happening with the markets. Obviously a very green day. But so far all ten sectors in the s p 500 in the green today led by technology. The biggest sector in the s p 500, also the biggest gainer today, along with whats happening with Consumer Discretionary stocks. The drags but still positive Energy Stocks and utilities. Interest rates ticking higher today bringing some of that allure of those utility stocks at least a bit off. Again, those sectors are the ones to focus on in todays nice up rally. Thank you, dom chu. Now for a story that truly affects all of us. The fda has announced plans to strengthen warning labels on ibuprofen drugs due to heightened risks of heart attack tore stroke. Assistant professor at the nyu school of medicine joins us now. Dr. Debbie for all of those listening, how concerned should we be . I think people should be concerned. Im glad the fda is allowing people to have this information so they can make more educationed decisions. But at the same time i dont know that it will change peoples behavior too much. Because a lot of this data has been compiled over the past one to two decades. For the most part doctors have been discouraging people who are at the highest risk from using these medications. The people that were at the highest risk of heart attack and strokes might have been on aspirin or plavix or other blood thinners to treat that. So they shouldnt have been on these medications to begin with because that could increase their risk of bleeding from the gut or intestines. And also if they have high Blood Pressure, it could increase their Blood Pressure as well. What are the alternatives you would consider safer . The American Heart Association has recommended tylenol or acetaminophen as an tern alternative. All the alternatives have risk. With acetaminophen youre at risk for liver damage as well. Statin medications for cholesterol with interact and affect your liver together. A lot of people in the past used to get pushed toward opioid medications, but were starting to see more of the risks of that recently. Even last week more dramatic data has come out about the risks of these addictive medications. I think that actually will push people more towards these nonsteroidal antiinflammatory medications. The real think here is consult your physician to see exactly what the risk versus benefit is. When we talk about levels of risk here what are we talking about . Are we talking about that has caused the fda to strengthen its black box warning here . It depends on the category that you fall into with your own risk. It also depends sort of what your dose of medication is that youre taking and for how long you are taking it. If youre taking a higher dose for longer you are more increased risk. Some of the older studies put you in the same risk category at diabetics or smokers for having Heart Disease but thats that might be a maximum risk. Were not exactly sure. Now the way i look at it also is that, for patients that i see who have a lot of painful disorders, lets say hip arthritis, knee arthritis, low back pain, if this he take these medications, sometimes it allows them to do physical therapy or to do exercise which actually lowers your risk of Heart Disease. When you weigh them together perhaps for certain patients these medications actually lower the risk of heart attack or stroke. It is really kind of complicated and you might need someone to weigh those risk factors and benefits. Again, seek your doctors advice. Thats it for the very first hour of power. What a crazy week the weekend is going to be very interesting. Lets toss it over to brian. I can see an adult beverage in both of your future today. Mandy and tyler. Thank you very much. See you on monday. It is now almost 2 00 on wall street. 1 00 on beale street in memphis, tennessee. Welcome to the show. The dow is in riskon rally mode. We are up nearly 200 points. Though the dow is barely changed for the overall week that does not tell the story. We actually had more than a 2,000point swing of up and down moves during the week. Melissa at the nasdaq it has certainly been quite the week. To say the least, brian. Apple a big part of that story. Apple is a big gainer right now getting back its losses for yesterday and the week thats helping to boost the nasdaq and also the s p 500. Well talk more about apple later on in the show. Netflix also on the radar. Rising nicely today. Morgan stanley raising the price target on the stock to 750 a shair. Share. The old price target was 670 exactly where it closed yesterday. One stock moving sharply lower in todays up session, barracuda networks. Internet security company. Its weak Second Quarter guidance and specifically weak billings guidance is taking the stock right now down by almost 20 . Lets get down to bob pisani for a look at some of the big movers on the nyse. Markets really gapped up on the greece news. Thats whats moving the markets. To ooha lesser extent some reverberations from china. 20 points up . That rarely happens, a gap up like that. Thats 1 . The whole markets moved 1 . Europe gapped up 2 . Germany around france gapped up 2 on the greece news. This is a broad rally. 41 advancing to declining stocks. Volume on the moderate side. You see the 1 moves. Virtually all of the major sectors. Finally next week a lot going on. The greece euro summit on sunday. Miss yellen gives her congressional testimony in the middle of next week. The ecb and bank of japan with rate decisions. Bank earnings will be out. Guys, back to you. Big week for you, too, bob. Thank you. As we said certainly its been a crazy week for stocks. Wild swings intraday from day to day. Oh, yeah nearly four hours of no trading for floor of the New York Stock Exchange on wednesday. That does not seem to be scaring investors away. Dom chu joining us again looking at mutual fund in flows. This is interesting, brian. According to Thompson Reuters lippert, they tracked flows from july 8th, we saw into equity funds 14. 1 billion flow into stock funds and etfs. Thats versus a 3 billion inflow into taxable bond funds and etfs as well. Whats interesting is where some of the action is on the stock etf front. Etfs are driving most of these inflows. Select sector spdr etf, rather the spy, you see one of the biggest beneficiaries of those particular inflows up 6. 7 billion during that time in terms of inflows. Also another one. The xlf. The Financial Sector spdr also gained about 2 billion mr. Worth of inflows as well. Financials seem to be a sector at least over the course of the last week that saw some inflows into those particular etfs. Again, tefrzetfs can be used to take long positions, or maybe hedges against other short individual stock positions. But overall, those are some areas to focus on. At least investors have been. One category here i warrant to bring up Municipal Bonds. Municipal bond mutual funds have shown their tenth straight week consecutive week of outflow. Just pointing out the fact for Municipal Bond funds the pain is still being felt there but at least some people are wading in with the Overall Index funds like the spdr and the fxlf. Believe it or not with be there are a numb berper of Municipal Bond funds, small towns across america, that own puerto rican debt. I guarantee you the citizens of those towns are going to find out pretty soon what they owe because their funds could go down dramatically. Theyll have to check their statements for sure. Now to china where all three of the major indexes are rebounding today after a selloff earlier this week. But that rebound is of the stocks that are actually trading right now. Half of shares there domestically are still frozen. The governs also taking measures to exstop is the huge recent drops weve seen in stocks. Andy, you spent 25 years living in domestic china. You speak fluent mandarin. You havent been on tv in a number of years. We are peareally happy you are here. Thanks, brian. Most of our viewers could probably not care less about the chinese stock market because they cant buy stocks but they do care about the chinese economy. You argue that the decline in chinese stocks recently should have no impact on the chinese economy. How come . Thats right. Because weve seen very little wealth effect on the way up, so were likely to see very little wealth effect on the way down. Part of the reason is very few Chinese People own stocks. There are only 50 million investors and they have very little money in those accounts. Less than 15,000 for less than twothirds of those accounts. Ill push back in that the folks in china who do own equities, if you look at the data they tend to be the higher income urban dwellers. They arent the farmer on the Far West Side of the nation. So these are the folks that presumably are doing a bulk of the Consumer Spending anyway. Thats right. So about 7 of the urban population is playing the stock market in china. Not very high. Much lower than here. Twothirds of those accounts have less than 15,000 in them. We could also see that Bank Deposits are still growing by 10 . So clearly people are not putting all their money in because they know that it is a very speculative market. This is where people our smart viewers, write in and say hey, the chinese stock market is actually up still year to date and year over year. But i think the concern is the magnitude and the repetitivetyiveness of the decline. Thats true. But the ashare index on the mainland is up 90 . The numb berp of people who have gotten killed in the market should be pretty small. Many of those folks that were buying equities are doing so on margin, on leverage. The wall street journal in an anecdote with a Restaurant Owner who borrowed 11,000 to buy stocks. I think it is the leverage and the government involve. That has people a little more nervous. Youre not. We all love anecdotes but we have to look at the numbers and see how big a deal this is. For example, margin lending is equal to. 5 of total bank loans outstanding. It is equal to about 3 of household Bank Deposits. Its not going to have an enormous effect. There will be a few people who can find those anecdotes but systematically i dont think it is going to be a big problem. I get what youre saying in terms of the limited impact on the stock market in terms of the broader chinese economy. Walk through the ripple effects. If the government uses extraordinary measures and extraordinarily liquidity measures specific tri toally to prop up the stock market to make sure this Party Remains in power, that smendpending is coming out of something else. Thats true. Primarily the communist party is concerned with staying in power. Its not a surprise. Theyve always been intervening in the stock market. I disagree with the people youve had on earlier who argue that people are going to lose faith in the party. People in china know that the stock market is not controllable by the communist party. Theyll be disappointed if they lose money but we wont see any riots in the streets over this. In 2008 the market fell much more sharply and we really didnt see a social instability problem. Melissas question, as usual, is excellent. Just the idea of the government involvement though i think sorts of freaks us out here in the United States. We can argue about the Federal Reserve and our involve. All of that stuff, blah blah blah. Talking about direct involvement. Asking companies to freeze shares. Saying you cant short or buy this or buy that. You know is there just a longterm negative bias toward investing in china because of that sort of heavy hand . Or does it provide a floor that makes it better for investors . I look at it the other way around. When i first worked in china 30 years ago the government manipulated, controlled every part of the chinese economy. There were no private companies. Today 80 of employment all the new job creations coming from private companies. The government is gradually actually rapidly removing itself from the economy but not yet in the stock market and not yet in the Financial Sector. Theres hope for the future. Bottom line, does the chinese grow 6 7 again this year . I think it will continue to grow at 6 . While im really bullish, i also think it will continue to grow more slowly on average every year. When the gdp numb berp for the Second Quarter comes out next tuesday night, look for it to be a little bit slower but still 6 plus. Thank you both. Dont make it five years before you come on cnbc again. We know youve been fighting a cold, so we appreciate you coming in. Weve all got it. Dont worry about it. Still so much to do on this fine problem. Boone pickens yesterday said oil will be at 70 or higher by years end. Well asken a oil company ceo if he agrees and give you a pretty crazy stat about Energy Stocks that you may not believe. Plus are we finally closer to a real greek debt deal . We get live reports from both athens and frankfurt ahead. How do you put out wildfires without water . Well get a look at how californias fighting fires during a drought. Stick around. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . Its not just been a wild week for stocks. It has also been a pretty busy week for crude. Crude oil down 34 cents a barrel to 52. 44 but crude down nearly 7 this week. We teased a crazy stat. Here it is if the Energy Sector closes lower this week, it will be the hetenth straight weekly decline for the Energy Sector thats never happened. Going back to 1989. Price of oil in 1989 averaged about 35 a barrel. Thats in todays dollars. Around 18 back then. One of those Energy Stocks having a tough run lately is superior energy services. Ticker spn. Shares down 13 this month but the ceo david dunlop is not hiding. He is here for a power lunch exclusive. We welcome you back to the program, david. Thank you very much. We appreciate you coming out. A lot of Oil Companies ceos are sort of bunkered down right now. You are coming out. How do you explain the recent redecline in the price of oil and whats it mean for a drilling and Services Company such as yours . Well, lots of uncertainty on oil prices. I think market by now expected for us to see an absolute decline in u. S. Production which we havent witnessed yet. The drilling rig count has dropped by over 50 during the course of the last six months. General belief is that at some point in time well begin to see u. S. Production decline. I think a lot of the market believed wed have witnessed that by now but so far the data has not indicated that. We see flat production but not necessarily that production decline. I think you put that on top of uncertainty about Global Demand growth particularly in klein,china, as well as uncertainty in iran and how those barrels may affect the market, think in general the market is a bit uncertain still as to when well see supply balanced and see oil price increases again. Not all oil regions are the same. You can make money over here and lose money over here. If Oil Prices Stay around this level or even go back to 60 a barrel in the near term what oil regions will hold up the best . Where will investment and profitability still look good . I think in the u. S. Well see activity at 60 a barrel in places like south texas and west texas and eastern new mexico, as well as in north dakota. Those will be the three places we see concentrated increases in spending once weve got a bit better commodity price. Analysts we talk to about superior say one thing you guys have a fantastic Balance Sheet. Thats a compliment to you. Are you going to use some of that Balance Sheet to either buy back stock on a corporate level or personally as the ceo, are you buying your companys stock . So ill tell you, were in great shape from a Balance Sheet standpoint and from a liquidity standpoint. That does put us in a position i believe as we begin to see companies floundering or assets floundering with other companies in this cycle. We can be an aggressor. I got to tell you, i dont know that weve been from this cycle long enough to fully understand what all those opportunities may be so my mantra with our Management Team and with investors has been were not going to swing at the first pitch. Were going to look at the full scale of opportunities that are available for ups and then execute. If we dont see m a opportunities in this cycle, if valuations dont get to a point that are compelling to us then weve got a lot of room to go buy back shares. Thats what well be doing. Are you saying perhaps in your sector there is more downside ahead . If it is not clear if there are targets out there now with much of the is ecsector down 50 the past year, where do you see your valuation . I think that were still relatively early in this down cycle. Although were all looking forward to better activity levels when Oil Prices Increase clearly we may be in this environment below 60 a barrel through yearend. A few weeks ago i believed we would see oil prices perhaps in the mid 60s by year end. I dont know. By the way u. S. Production has not declined evenwe may see a bit Lower Oil Price environment through the rest of this year. That will put some companies in a bit of distress. I think as the year goes on there will be more and more of these m a targets. Are you going to put pressure on your own stock . Our stock along with others in the sector right now are trading along with oil prices. What will cause these prices to begin to increase is Oil Prices Going up. David, youve been a big proponent of international expansion. You want to take superior against the big boys the bakerhugheses, the hall burt rniburtons of the world. If we get a deal with iran will you go . Would superior do business in iran . Well i think that there are a lot of opportunities for us to expand internationally into markets that have in my view better certainty than iran does right now. Although i think there are some companies that may take advantage of moving to iran there are probably companies that already have a very mature footprint in the i understand markets. Were still building ours out so we have choices that perhaps offer a little bit better serpty than certainty like iran. That sounds like a no in the short term. Short term for sure. Long term that could be an opportunity for us. But meantime wed like to find places that offer a little bit better stability. David dunlop a real pleasure. Thank you for coming on. I know it is a tough market out there. Our viewers and listeners appreciate your point of view. Happy to be with you. Thanks. Shares of anheiserbusch up nicely today. Moodys out with a positive outlook on that company. Not just bud the markets are a sea of green today. The s p 500 off the session lows but still up 1. 25 going into this weekend. We are looking for opportunities for you. Weve got five stocks to watch. Street talk is coming up next. Youre driving along, having a perfectly nice day, when out of nowhere a pickup truck slams into your brand new car. One second it wasnt there and the next second. Boom youve had your first accident. Now you have to make your first claim. So you talk to your Insurance Company and. Boom youre blindsided for a second time. They wont give you enough money to replace your brand new car. Dont those people know youre already shaken up . Liberty mutuals new car replacement will pay for the entire value of your car plus depreciation. Call and for drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch to Liberty Mutual insurance and you could save up to 423 dollars. Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty mutual insurance. Time now for street talk. Every day melissa and i dig out key wall Street Research just for you, dear viewer. Lets go. Stock one it is a short idea. A bet that a price will fall. Goldman sachs says to vel Virtus Investment partners. They cut the target from 135 to 115, 5 below the current price. They is a i despitesay they see increased performance pressures in their flagship emerging products market. Last year a former advisor basically admitted it misled clients about the firms performance. Seemed like Goldman Sachs is saying the trouble is far from over. Second stock, google. Credit suisse is raising the price target to 700 from 690 expecting bigger revenue from both u tube and play. The note also saying it should lead to operating margin stabilization and eventually margin expansion. Keep in mind though google has been an underperformer versus the nasdaq so far this year. Not just that. Investors may be getting frustrated. The stock is stuck at a price that it was a yearandahalf ago. Mcquarry boosting devon energy to neutral. We had devon on yesterday in street talk because fbr capital added it to a top pick. Two upgrades in two dazed forys for energy producer. Fbr yesterday said they liked the leverage to emerging areas. Oppenheimer putting costco at an outperform 160 price target calling it a rare opportunity to buy the retailer. The pe near fouryear low. Remember costco had a tough Second Quarter citing falling gas prices. Stock could use a little help. Up about 1 year to date. Many of the Big Chain Stores have done better than costco at least this year. The last stock is always the under the radar name. Today it is tdoc the ticker. Teladoc. A Video Service for doctors. You want to do a video consultation with a physician . They help enable that. They have an outpersonform with a 38 target. About 10 upside seen by cowen. Remember priced at 19 a share above the range just at the end of june. Nice up side from then. Cowen seeing more up side from here. Are we finally going to get a deal to end all the greek drama . We have both sides of that issue covered. Michelle is in athens Steve Leisman is on the ecb side in fruft. Well get to them in a moment. Were also just ploemts amoments away from the close of oil. Your final numbers for the week next. Want bladder leak underwear that moves like you do . Try always discreet underwear and wiggle, giggle swerve and curve. With soft dual leak guard barriers and a discreet fit that hugs your curves. So bladder leaks can feel like no big deal. Get your free pair and valuable coupons at always discreet. Com hello, everyone. Im sue herera and here is your cnbc news update at this hour. Federal reserve chair. Janet yellen today reaffirmed the Central Banks plan to start raising shortterm u. S. Interest rates later this year. Speaking in cleveland, yellen also pointed to tentative signs that wages are on the rise and predicted moderate Economic Growth over the course of this year. The director of the office of Personnel Management has resigned in the wake of that huge government Computer Data breach. In her letter to the president , she said that it was best for her to step aside for new leadership. Sensitive personal information of more than 21 Million People both inside and outside the government, was compromised. It is believed that that hack originated in china. Officials say as many as 10,000 people turned out to watch the Confederate Flag lowered from outside the South Carolina state house this morning. Rebel flag had flown there for 50 years. It came down to both cheers and years. The governor called for the flag to be removed following the murders of nine black churchgoers in charleston last month. Flag has been moved to a Confederate Military museum. A new report is creating quite a buzz about bees. Scientists say populations of bumble bees in north america and europe are collapsing due to climate change. The study observes 67 types of bumble bees over more than 100 years. The study concluded that bumble bee populations cannot adapt to frequent extreme climate phenomena and say conservation is needed to prevent possible exstinks. They are essential for the agriculture industry. So we better work on that. Gary shilling kind of a frequent guest on financial tv hes a hugeraiser. Hes been talking about this for years. It is really a very serious problem. Theyve been looking at it for a couple of years. I think it is starting to pick up more momentum. You wonder also where they going . Sue herera thank you very much. Oil prices are closing right now. Lets give you the view here. Jackie deangelis getting a much leaded afternoon off. Crude oil prices closing up just a little bit here. Were still seeing the same story crude oil unchanged. 52. 78. It doesnt matter today. This week another tough one for crude oil. Crude down about 6 on the week. Wow. Its time for trading nation because traders do trade better together. Today today we trade the banks. We have a deluge of Bank Earnings set to rain down on the market next week. Your trading nation team today, Curtis Holden craig johnson. Curtis should we expect on a macro level from the biggest banks good news or bad news next week . Well were not looking for real great news out of the banks with all the disruptions that youve seen in the International Market in recent months. We think theres going to be a lot of pressure there. Theres a lot of light volume in bond trading. We think thats going to hurt earnings in the banks this quarter. If you look out forward a quarter or two, we think youve got some real positives. The fact that the rise in the dollar has leveled off we think is going to be a real positive for banks and for a lot of the other multinationals and we also like the fact that were starting to see some of the savings at the gas pump starting to see consumers spend that a little more freely. Housing is looking stronger and youre seeing very strong auto Sales Numbers and that will result in better loan originations and better underwriting speeds for the banks in the coming quarters. All right, so craig, youre charting a bank etf. All this stuff is supposed to be baked in to the known information on the technicals. What do you see . Brian, we think we can take the bank to the banks at this point in time given what were seeing here with the charts. When you look at the bke index, you see a very nice big, long consolidation broke out. Now you see a little bit of a pullback. We think we should be buying this pullback to support. The reason we are seeing a little bit of a shortterm fullback here when you look at the fights index for when the fed rates are expected to rise they are getting pushed out to september to the end of the year. Thats leaving a little bit of shortterm profit taking. We think this is a great opportunity to be buying banks at this point in time. Some of the names we like things such as huntington bancorp. Citigroup. We also like opus bank out on the west coast. Another great looking bank. These are things we should be stepping up and buying today. We like it. Opus bank. Not just the character which is a penguin. Guys, thank you. For more trading nation, head to tradingnation. Cnbc. Com. Right now, stocks are up big on optimism about a greek debt deal finally being reached. But the details are still murky. There are two sides to any deal that gets done. Youve got greece and the eurozone. Ecb. Weve got a view from both. Michelle is still live in athens who has official lip moved there. Steve leisman on the ecb side in frankfurt, germany. Michelle i come in jest but youre doing a great job. Im sure you speak fluent greek. Is this just another headline head fake or do we get a deal . Reporter certainly the greeks have given far more in this term sheet than they have ever given before and it is awfully close to what they encourage the voters to say no to a week ago. So i mean certainly on their end, theyve come farther. The question is is it far enough . Remember, the economy has gone to hell in the last two weeks. Lets put it that way because of the capital controls. In theory theyre going to need to do even more fiscal measures to meet the right targets. Everybody could many kol back to them and say this was good in you have two or three weeks ago, it is not good enough any more. I dont know where that would get us. Well see. Many other publications have been coming out and talking about this every day. Do you believe on sunday the huge referendum vote was just literally worthless . You know it depends on who you talk to. The business community, absolutely. They realize that the terms were incredibly similar. You would have gotten a much lenient deal if you hadnt called the referendum, then there wouldnt have been people lining up at the atms in the middle of the night which led to the capital controls and subsequent strangling of the economy, et cetera. People on street, a lot of them dont believe the average person never believed it was possible that they were ever going to leave the euro. They thought it was a total scare tactic. Its hard to say exactly what collectively the population was thinking. Lets get to the other side of any potential deal. Steve leisman, we have noticed since that vote on sunday night, worthless or not, that the main european players have taken a more hard stance a harder line questioning. Are you sensing from your end in frankfurt, germany, where you are right now that the European Union is has gotten something from greece that it can say okay to . I think they did. The real answer i think to what you asked michelle about the sunday referendum being worthless or not depends on something thats really not in the term sheet thats being discussed. It is something that we expect to be discussed on the sideline this weekend when eu leaders and ministers meet which the issue of debt relief. The idea being greece would come forward with these reforms that theyve promised to do and on the side of that to give back to tsipras, to give back to greece would be this issue of some form of longer term debt relief than they have already. What im sensing here is italy seems to be onboard, france is onboard. Whats happening here in germany, brian, is amazing. It is glaring silence. We do not know what the germans think about the term sheet put forward by the greeks and we dont know what they think about debt relief. There was some movement on thursday where the Prime Minister minister from germany said, you know what . They do need debt relief. On the other hand, the eu cant provide it. It is a bit of a mystery going into this weekend how this is all going to end up. Right now whats going to happen is the imf, the ecb and the European Union are meeting right now to figure out if this is something that they qualify for and then the finance ministers tomorrow and the leaders on sunday. Stay tuned brian. Steve, quickly, running out of time but with all the players you mentioned, france germany, italy, the last 24 hours or so a new surprise player has sort of emerged in many reports, and that is the United States of america. What do you know if anything about the role that the u. S. Behind the scenes may have played in getting a deal done . Well, we know that jack lews been on the phone almost every day. We know obama has tushgd toalked to merkel on this issue and that really sets up Angela Merkels choice here. On one hand she has france United States here comes a siren, every time i come on here they have france germany, its like clockwork. France, and the United States and the imf all pushing germany to make concessions. On the other hand, merkel faces a public thats opposed to greek giveaways. Thats a really difficult choice shes going to have to figure out how to thread this weekend. Hey, michelle in athens steve in germany, why dont you guys meet up in budapest halfway, have a cocktail. Thanks, guys. Still ahead, why apple shares have been stalled lately and if that stock is still worth your new money. Plus emerging markets grew. The worst may be over in china sass mark moby. Hes hunting for value. A money manager weighs in. Nobody told me to expect it. Intercourse thats painful due to menopausal changes. Its not likely to go away on its own. So lets do something about it. Premarin vaginal cream can help. It provides estrogens to help rebuild vaginal tissue and make intercourse more comfortable. Premarin vaginal cream treats vaginal changes due to menopause and moderatetosevere painful intercourse caused by these changes. Dont use it if youve had unusual vaginal bleeding breast or uterine cancer, blood clots, liver problems, stroke or heart attack, are allergic to any of its ingredients or think youre pregnant. Side effects may include headache, pelvic pain, breast pain, vaginal bleeding and vaginitis. Estrogens may increase your chances of getting cancer of the uterus, strokes, blood clots, or dementia so use it for the shortest time based on goals and risks. Estrogens should not be used to prevent Heart Disease, heart attack, stroke or dementia. Ask your doctor about premarin vaginal cream. Check this out. A tv journalist robbed live on air in mexico city. He was doing a live broadcast from his car. Using a Live Streaming smartphone application. Look at that. The robbery takes place. The video shows him speaking to the camera whether a man approaches from the drivers side demands money and the phone. The journalist can be heard saying we are being robbed in spanish. Tells the robber we are live on television. It was posted online yesterday. Is he okay. Apple surging right no you, up 2. 5 . But the stock is down more than 2. 5 for the week. Go figure . Is apple allowed to go down . Apple is off more than 7 from its recent high. What is behind this drop and should you buy on this dip . Dan ives joins us on this. With any other stock, nobody would care. 2 . 7 trs . 7 . When its apple and people are used to it going up for months. For years in a row. A little jitter by investors. A lot of it is what were seeing in china. China is the highoctane fuel for apple. Thats worried that can impact some of the growth for apple. We believe this quarter you have another upside to the iphone. Apple continues especially in china to be very strong. Think at ten times next cash. Hold on for one second dan. Weep have breaking news. Well get right back to you. Dom chu has breaking news. Well keep an eye on whats happening with Lockheed Martin as well as united technologies. According to dow jones, Lockheed Martin is now in advanced talks to buy Sikorsky Aircraft from united technologies. Earlier reporting this week had both textron and Lockheed Martin as perhaps finalists in the bidding for a u in it that may fetch by some reports up to 8 billion. Sikorsky aircraft based out in connecticut is the one behind the president s helicopter marine one. Also all those blackhawk helicopters used by the military. A dow jones story citing sources Lockheed Martin is in advanced talks to buy sikorsky. It may be valued at 8 million. I believe they own cessna yeah. Glad i got that right. Dom chu, thank you. Back now to the apple story with dan ives. We had a guest on at the top of the show lived in mainland china. Mainland china for 25 years. He said the stock market drop he does not believe will impact Consumer Spending one bit. Which then would mean that apple should be okay in china. Is that your view as well . Were on the same page. Apple at this point in china we view that as the top really geographic region in two years. It is really iphones are selling like hotcakes there. I think that would be a big up side this quarter. This is a little bit more of bark worse than the bite. With the iphone product cycle as well as the watch and some of these new products in software it is a nearterm speed bump on the apple stock that ultimately lets quickly talk about the watch. Heres the problem i see with the watch and sort of this double talk that you often get, unfortunately, when talking about it. Many people said even if the watch is a hit, its not going to be big enough to move the needle. But now some of the same people i think are saying well if the watch is a flop it is going to hurt apple. If it is not big enough to be a hit, is it also then not big enough if it is a flop to do in he damage . Is it sort of irrelevant . Yeah. Either way. As an apple watch customer i can tell you its mac has won 8 of revenue since 2013. In is not about moving the needle financially speaking it is about opening up the wearable category for apple. I believe 5 million watches sold to date. To some extent a year ago skeptics were saying thats not possible. I think it is a little analysis paralysis on the watch. They do have to come out with numbers. Part of that being black box not giving numbers has added to some of the controversy around apple and the watch. Like you said not really moving the needle but it is more down the road along with apple and other players like streaming. Nothing is a hit product until melissa lee owns it. Melissa, do you own and apple watch . No i dont. I dont think i will either. Im a fit bit guy who is unfit. Zblur a want to point out as we approach the final hour of trading on a friday hitting new session lies intraday. The nasdaq just coming off of its fresh intraday high with just about an hour left to go. 1. 7 is the gain. The s p 500 is good for 28 points on the up side up by 1. 4 . The dow, 17,782. The shanghai composite has been rallying the past two days. Mark mobia says the worst is over. Joining us hayes miller. Great to have you with us. Thanks michelle. We were questioning the direction of the chinese economy. You say all right. Right now youre overweight china. How do you implement the both is right mentality. Well i know that jim has a view that is maybe a little bit more short term. I think that there is perhaps another shoe to drop here. Its been very rare in the past that a countrys been able to actually instigate some sort of management of its stock market. Im thinking of japan and the price keeping operation in the 1990s. Pakistan tried to do the same thing. In both of those cases the market continued to fall after price keeping operations were initiated. It wouldnt surprise me if the market now takes the view that the clearing price is lower than wherever we are currently simply because of the actions of the government that now everybody believes that they dont control the market as well as they would hope to. So i think that in the short term, jim maybe has a point with regards to current risks. If you take a longer term view and you look at the fundamentals, and you look at the economic story, you look at the current valuations and you look at Earnings Growth and you look at developments and productivity levels, i think that were at a price that you could call a clearing price for the market. And i would certainly agree with mark mobia that there are emerging values that you want to go searching for. Hayes, i warrant to asknt to ask you about whether or not there will be from now on a discount to any stock that trades in china and whether that is a concern for you. There should be a discount theoretically if you are to believe that the Chinese Government can come in at any moment an essentially stop half of the stock market from trading. There should be an embended discount. Therefore, we may never hit those levels that we have seen in hang high or maybe even ever again. Sure. Some markets should trade pat a discount because the shareholders are somewhat more of a disadvantage than they are in other markets. I dont deny that that is the case. I dont know that all investors are completely aware of exactly what the chinese Central Government can and cant do in this case. Obviously they can do a lot. They actually are not the ones that are stopping the trading of these shares. Companies themselves decide to stop the trading and their shares. It is just the government is compliant in that. But look. The Chinese Market is established, managed, regulated, legislated by the Central Government. And investors need to be aware of that when they are investing in china, and they need to be aware that the chinese from the china governments perspective, the market is there to allow them a vehicle to sell off assets in the great privatization of chinese assets. And the government wants higher rates higher elevated rates of pricing in the market simply because they are trying to restructure the Stateowned Enterprises to make them much more efficient. Sure. They obviously would like a higher stock market price to necessary it happens at the end of this year. Got to leave it there thanks so much. Thank you. As we head out to break, stocks at session highs. Guess whos leading the dow . Apple computer. Well the company now known as just apple. Dow up 1. 4 . Your moms got your back. Your friends have your back. Your dogs definitely got your back. But whos got your back when you need legal help . We do. Were legalzoom, and over the last 10 years, weve helped millions of people protect their families and run their businesses. We have the right people onhand to answer your questions backed by a trusted network of attorneys. So visit us today for legal help you can count on. Legalzoom. Legal help is here. It took Serena Williams years to master the two handed backhand. But only one shot to master the chase mobile app. Technology designed for you. So you can easily master the way you bank. Ah aflac . Aflac i thought you said this guy was the best . Oh, hes a horrible stylist. Gah . But hes the best at paying claims fast really. Mmhmm. Paid mine in just one day. One day . Yea. Aaaflaaaac in just one day, we approve and pay. One day pay, only from aflac. Fire season is here. Idaho got smacked last week. That video comes from canada where massive wildfires burning through wooded areas so far. California has been spared but fire officials are bracing for the rest because the golden state drought has been awful. Jane wells live in Thousand Oaks california. Reporter not spared much. This is an area where actor tom sellek has been accused of stealing water from a hydrant to water his avocado grove. This year in california we have had 50 more fires than normal so far. Very little water to fight them. So far this year cal fire says there has been 3,200 wildfires in california. There have been more lightning strikes. Thats why the chief says there have been 341 new wildfires here. We are finding reservoirs that boat ramps arent long enough to get to where the water actually is that we need to pump out for filling our engines. Depending on where a fire occurs we are seeing longer turnaround times on helicopters, which draft water with a bucket or with a pump out of a lake pond, river. Thank goodness we still have the pacific ocean. Cal fire spent 286 million fighting fires. That is 46 million more an year ago at this time when we were also in drought. Here is the weirdest thing of all. Yesterday in the sierra at the entrance to yosemite there was snow. Cal trans tweeted out this photo saying, bring your chains. In july. Finally a snow pack . Better late than ever. Back to you. Thank you jane wells. Fears about chinas plunging stock market hitting auto sales there. Gm ford and chrysler have exposure. [music] defiance is in our bones. New citracal pearls. Delicious berries and cream. Soft, chewable, calcium plus vitamin d. Only from citracal. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . Chinas redhot stock market has taken a hit and the auto market is showing signs of stalling. Phil lebeau is in chicago. This is after price cuts there, isnt it . Take a look at the june numbers. A decline of 2. 3 last month, the first drop in Monthly Sales in two years. The new estimate for 2015 seals, just over 20 million. The forecast has been dropped from up 7 to up 3 . Whats causing this pullback . Youve got consumers who not only have seen price cuts but are waiting for more price cuts. They are hesitant. Sales are limited in big cities because of congestion restrictions. Then the stock market selloff many believe you probably have some people who are being caught because of margin calls. They no longer are going to go into the auto market. When you put that all together you are looking at a country where they are still adding plants. More plants are coming online this year from a number of the major automakers. You still have gm and ford growing in china. Good news is they are growing in western china. As you take a look at shares of gm and ford yes gm has more exposure than ford keep in mind this is still a very important market. They need china. They cant afford to have it slow down too much. Phil lebeau thanks for that story. Coming up on fast money. Netflix. Analysts raising the price target. Stock is up 107 in six months. Is all this bullishness a sign to sell . Well discuss that tonight on fast at 5 00. Well look forward to that on live television. Have a great weekend. You, too. Check out the song if it dont kill you, thats my song of the week. Welcome to the closing bell, im kelly evans at the New York Stock Exchange. Im bill griffeth. We made it. Barely. We could be closing the week out with a big rally. Unlike yesterday where we had a big rally on the open then faded, no fade today. Stocks are up across the board as greece closes in. Is it possible on a potential deal . Parliament is expected to vote on the reform proposal around the table within the next couple of hours. Well take you live once again to greece and germany to