Transcripts For CNBC Power Lunch 20240622

The condition unknown. There may be additional victims. The mayor of chattanooga is calling it a horrific condition. Chattanooga state Community College is in lockdown. We anticipate there will be a News Conference. Some estimates have it in the next 30 minutes. Others vary on that. We dont have confirmation on when that will occur. Once again, the navy is responding to inquiries and confirming that there has been a shooptsing at ing shooting at one of its facilities. Possibly a second shootinging at another. The atf is heading to the scene and we will keep you posted. We know of one victim condition unknown. But theyre saying that there may be additional victims. Sue, i know you may not know the answer to this question. Is there a suspect . I presume no one is in custody and it is still being treated as an active shooter situation. Were not sure if it is an active shooter situation. We dont know whether anyone is in custody. So at this point because we dont know whether anyone is in custody and officials have not said anything to that extent you have to assume that there is someone either at large or that is being pursued but we do not know the identity of the alleged shooter or whether or not they have anyone in custody. Sue, thanks very much. Well update the audience as we find out more. Big day meanwhile for corporate earnings. Revenues thoi inin this round of results are expected to be down in fact for the First Time Since 2009. Worse, revenues are expected to be down in the quarters ahead. So what is behind what is being called now a possible revenue recession . Bob pisani with the details at the nyse. I am not so concerned with earnings. I am more concerned with revenues because i think there is a revenues recession. Right now this is where we are for the Second Quarter. Profits are expected to be down 3. 8 . Im not that worried about it because that will go up. It is probably going to be flat. Weve already seen bank of america, netflix, intel, Johnson Johnson beat so that number will probably go to 0 . But revenues down 4. 2 worries me because i dont see it improving, and it didnt improve much in the first quarter. It was negative as well. Now a major problem and major reason the revenues are down is because the revenues of Energy Companies are down 35 from last year. Think about that and the impact that has on the s p. In fact if you take out Energy Stocks from the s p 500, revenues would be up. Now heres the problem and why im concerned. Trends are not working in our favor in terms of improving revenue. So oil if oil went up that would help Revenue Group for energy and help the s p. But flatoil is flat and down. The dollar has been strengthening. Thats not good news for kpg that are exporting or with profits overseas. So the two big things that would help us out in the quarters ahead are not for the moment working to our advantage. Look at Energy Stocks. The xle is the energy etf. You see why people have been discouraged with the concerns on the Global Supply gut, Energy Stocks have been moving down for almost three months now. Energy and steeler stocks look at that here. Slower Global Growth is hurting a lot of Different Companies. Even audi today talked about maybe abandoning their china car sales target. Thats how serious this is. You want more on this earnings recession, go to my blog tradertalk. Cnbc. Com. Bob, thank you. Lets resume our coverage of the crisis in greece. The European Central banks boosting funds after the Greek Parliament to vote to clear that bailout deal. Steve leisman here with the details. It is hard to imagine that the banks in greece have been closed now for what . Two weeks . And will presumably remain closed for a few more days. Theyre not going to openopen. Right . Ill get to that. Let me go through the stuff weve been through. Tyler, in a remarkable order during a financial crisis the pieces of the greek bailout are falling into place pretty much as predicted. The greeces pieces were calling it falling into place. Yeah. Monday late in the evening, early in the morning, the eurozone agrees to a framework for the greek bailout. Early wednesday morning the Greek Parliament adopts their reform plan. Thursday, this morning, the ecb raises the Emergency Landing limit that allows the banks to give a little more but theyll never open to allow a complete unfettered withdrawal from the system. Europeans also will agree to a 7 billion euro for funding greece, shortterm get it through midaugust. The ecb president , mario draghi today, explaining why the central bank raised the lending limit. Several positive things have happened that justify us to increase the ela that we approve today. Incidentally, i didnt say by how much. We essentially accommodated the request put forward by the bank of greece recalibrated over one week. So the increase would be 900 million over punone week. But draghi and a senior official said the fund is under no illusion about greeces ability to actually enact these reforms. German parliament will vote on the framework . Thats expected to pass tomorrow. Then have you this actual aid package to be negotiated. Finally, they have to talk about debt relief. Then yeah greece has to actually implement some of these reform. The senior imf official said theyll insist on some form of debt relief in return for its resistance but greece faces a long and arduous reform effort in the future and if they dont comply, they will scale back the funding. So everything except actually having the reforms in place. Uber facing a big problem out in california. Thats right. Well uber taking a blow on its home turf in california where an Administrative Law judge recommended they pay a 7 million fine and be prohibited from operating in the state. They have failed to provide for those with Service Animals and wheelchairs. In a statement an uber spokesperson says the ruling and fine were deeply disappointing and added, we will appeal the decision as uber has already provided substantial amounts of data to the California Public Utilities Commission information weve provided elsewhere without complaints. Going further, risks compromising the privacy of individual riders, as well as driver partners. The decision doesnt go into effect immediately because uber is appealing and that process could take several months. Uber of course is under attack in other places too. Recently suspending its lowcost service in france over violent protests in the streets of paris. The company is awaiting a Court Decision there. Now, despite the drama, tyler, business travelers are using uber in record numbers. In the last quarter, uber sur compassed taxis as the most expenses form of Ground Transportation for the first time according to expense management system, bapssed on 28 million receipts in north america. It is really amazing. Ive used it opn travel as well. Very convenient. A president ial candidate and stock picker new disclosures showing that 90 of Donald Trumps stock picks have gone up making him millions. We will break down his portfolio. Plus five years after tougher rules were put into place to prevent another housing collapse is the American Housing market on firmer ground . What you need to know. Hi my name is tom. Im raph. My name is anne. Im one of the real live attorneys you can talk to through legalzoom. Dont let unanswered legal questions hold you up, because were here were here and weve got your back. Legalzoom. Legal help is here. Why do i take metamucil everyday . Because it helps me skip the bad stuff. Im good. Thats what i like to call the meta effect. 4in1 multihealth metamucil is clinically proven to help you feel less hungry between meals. Experience the meta effect with our multihealth wellness line. Tobacco giant Philip Morris beating international expectations. Fairchild reporting a Second Quarter loss citing lower demand in the Wireless Telecom sector. And United Health Group Reporting better than expected Second Quarter profits. It increased its full year outlook. Out to mandy at the big celebrity Golf Tournament out in lake tahoe. Mandy, hows it fabulously. You can see behind us with be thats lake tahoe. It is not a green screen. It is real and it is beautiful. Were here at lake tahoe for the American Century championship. Im with Jonathan Thomas ceo of American Century investments, which also happens to be the 17year sponsor of this fabulous event which raises a lot of money for local and National Charities as well. First, lets talk markets. Youve got over 150 billion of assets under management. We tend to get obsessed with day to day greek headlines, chinese headlines, when is the timing of the first rate hike but what are your clients really focused on . Its consistent across the entire industry. Clients are really focusing on two things. Diversification, you see that in what we call targetdate funds. Professional managed products that go into 14 Asset Classes with a specific termination date. Also at the end of the 6 1 2 year bull market we see a lot of rising interest in the alternative fields as well. Talk about the set and forget these target dates. Is there a risk of maybe being too passive in that investing style . Were told that maybe this year more than in previous years this is the year of the active manager. When an active manager really earns their money. Thats right. Since october of last year what you see in the market is correlations have gone up pardon me. Have gone down and active managers have outperformed in a positive way. Termination date funds allow you to pick your termination guide. We manage a professional glide path of 14 different yound lying Asset Classes to help you achieve the desired risk amount. You are all about impact investors, getting a good return on your investments but also contributing to the great you are good. A lot of your investments go toward medical research. Over 1 billion since 2000 have been directed to fund Life Saving Research in cancer and other genebased diseases. We see lenmillennials, then women, then men. Yes. At the moment the men are trailing. Talk about golf. Base clue you have the top 1 of sport athletes in the world. Who do you think is going to within . They all think theyre going to win. Even Charles Barkley thinks hes going to win. The leader is mark rippin. He is a strong player. Hes been practicing a lot. Hes the defendanting champ. He doesnt want to lose that crown. Best of luck out there. Jonathan thomas joins us here from American Century investments. Guys, this is going to be broadcast live. You can see it on friday thats tomorrow, at 6 00 p. M. Eastern on nbc sports networks. It is also going for the finals on saturday and sunday on your local nbc channels. Make sure you do check out the American Century championship. It is the premier Golf Tournament for celebrities here in the nation. It is going to be absolutely fantastic. But tyler, ill be back at the end of the hour with another interview with john elway. Big john. Duke of denver. Denver broncos. Ive heard of him. Thats going to be fun. Thanks, mandy. Donald trump. The donald. If he doesnt become the next president , he might just have a future on wall street. According to his personal Financial Disclosure nearly 90 of the stocks he bought went up. Eamon javers joins us now with specifics. Thats an astounding almost unbelievable record. Admittedly tyler, you want to know how he did it. I do. The Trump Campaign putting out this press release last night. They say his net worth they put it in all capital letters is 10 billion. They say that he made a lot of his money investing in stocks though thats not what hes known for. Hes known as a real estate investor. Here are some of the winners and losers from trumps own portfolio. Investment in bank of america he said he made 6. 75 million on that one. Boeing he made nearly 4 million on that investment. And facebook. Again, nearly 4 million on that investment as well. Take a look at some of the losers here for donald trump. Dr horton. He lost about 204,000. Occidental petroleum. Lost 121,000. And enbridge inc. 82,000 loss. Overall they said that he made 27 million selling stocks in 2014. They say ultimately his net his income for that year was 362 million. Thats how you get to a 10 billion net worth, i suppose. Interestingly, his gains i mean maybe he just follows let your winners run and cut your losses. His losses as reported there were very small as compared with his wins. Right. Bear in mind this is as trump is disclosing it. This is not the formal federal Election Commission data that hell have to o submit to the u. S. Government as part of his president ial campaign. We dont know for sure whats going to be on this report. This is what he put out in a press release last night. His investment portfolio overall looks like a lot of big brand name companies. Ford microsoft, volkswagen, a lot of consumer facing names that a lot of people would be familiar with. Eamon javers in washington. Thank you. United airlines is giving away millions of air miles to believe it or not hackers who uncover flaws in its Computer System. A good idea or an opening up of trouble . Didnt united have some trouble with their Computer System just a week ago . Plus five years after stricter rules were put into place to prevent another housing crash, is the Housing Market in the u. S. In better shape . Power lunch returns in two short minutes. So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep them all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberyy apple scones smell about done. Ahh, youre good. I like to bake. With at t get up to 400 dollars in total savings on tools to manage your business. A bold move by united airlines. The carrier awarding millions of frequent flyer miles to hackers who have uncovered gaps in its web security. Phil lebeau is more with more details. Phil, i dont know that i like the sound of this. Rewarding people to disrupt or worm their way in to their systems. It sounds like a safety problem, not merely a financial problem. No. I disagree tyler. This is quite common in silicon valley. You will see tech firms where they will hire basically it is a bug bounty. Theyll basically say to people lets see what problems you can find with a particular system in our company. In this case what united has done theyve made this announcement a couple of months ago, we reported on it. They basically said you alert us to what problems you find in our Security Systems or reservation systems, whatever it might be and two people so far have pointed out flaws that united has said okay were going to give you 1 million frequent flyer miles for pointing those out to us. Others have pointed out other flaws. Theyve been awarded at least 1 100,000 miles. These winners found basically what were potentially security bugs. They didnt hack into the system. They alerted united to problems within the system. One of it may be i talked with united a few minutes ago. They said one of the problems that was alerted was the ability for someone to come in and write code so that it would look like it was coming from united when in fact it was coming from somewhere else. They didnt hack into the system. They alerted united to pe tension problems there. Shares of united keep in mind what really is most important here is that united is finding out about these problems. This is what you want a company to do tyler. This is not a case of united saying come on in and hack us. It is a case of saying tell us what problems are there. In this case for a couple of people, they get 1 million frequent flyer miles. These are folks not affiliated in any formal way with united. Some guy in hits bath robe in ft. Worth whos trying to probe their defenses. Then when he gets a hit, what does he do . He calls united and says hey, i found something. Thats what bug bounty hunters do. Thats what bug bounty hunters do. If you have a tech firm and you put out an alert im not real familiar with this industry but if you put out an alert saying we are looking for people who can find potential bugs in their system and heres the reward there are people who thats their specialty. Thats what they do. In those case those people got 1 million frequent flyer miles. I know that sounds like a lot, you extrapolate that over how many flights you are going to get, you probably get 50,000 miles for a round trip flight. Maybe 12, 14 trips keydepending on where youre going. Let me ask one final question. Hasnt united been if not the airline that is known now for the most sort of disruptive computer problems . Didnt they have one a week or so ago . They did. They did. Theyve had a series of problems. And this has been a big concern within the industry that the integration between united and continental has not been a smooth one. And now you have american finally doing that integration with us airways. They know what not to do in terms of the problems that united has run into. But everybody in the industry admits this is not easy putting two airlines together. Its not been easy for united. Phil lebeau thanks very much. To housing and good news. Foreclosure activity tenyear low now. Home Builder Sentiment near a tenyear high. Five years since doddfrank has passed. There are fewer risky subprime loans but ownership is down. Partly because its harder to get a plort. Mortgage. Did the new regulations help or hurt overall the housing business . Dianic dianic. Reporter the effect of loose lending during the housing boom was abundantly clear. Nearly 8 million u. S. Homes lost to fork. The response a credit lockdown caused by new credit rules under doddfrank. Highly risky loan products were banned. Lenders must disclose all the costs involved in each loan and most importantly, lenders must verify a borrowers ability to repay. The rules fill thousands of pages but theyre really pretty simple. As we just said lenders must disclose all loans and most importantly they have to verify a borrowers ability to repay. If youre a high credit quality consumer doddfrank just made it a much bigger pain in the butt to get a loan. You got to fill out more paperwork. You got to dig out more tax returns. You got to find information related to retirement accounts stuff that was never pe asked for before. But if youre on the low end of the spectrum it has made it tougher to get that mortgage. Reporter now tight credit is blamed for a still falling Home Ownership rate now at the lowest in a quarter century. Even the Federal Reserve chair readying to raise Interest Rates said yesterday in testimony on the hill demand for housing is still being restrained by limited availability of Mortgage Loans to many potential home buyers. So are we better off . Well, new loans made today are the most pristine in history. But far fewer people can actually get them. All right, di thank you very much. Diana olick. In the bond market prices are lower at this hour and yields at least at the low end, intermediate term of the spectrum are just a little bit higher. The 10year at 2. 352 . The exception here, the 30year bond as the yield price goes up a bit there. The yield falls to 3. 11 . And that is your bond report for the 1 00 p. M. Hour. Google is higher ahead of its earnings after the bell today. The stock getting and upgrade, up more than 10 this year but flat over the past one year. Should you buy google ahead of those numbers . What you need to know before you hit the button and make the trade. We got that after this. A new season brings a new look. A chance to try something different. This summer, challenge your preconceptions and experience a cadillac for yourself. The 2015 cadillac srx. Lease this from around 339 per month, or purchase with 0 apr financing. 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 . Good afternoon, everyone. Im sue herera with breaking news on this still developing story. We told you about the situation in chattanooga, tennessee. There were shootings there. Right now we have heard from Chattanooga Police that the active shooter situation in tennessee is indeed over. At this point we know that those shootings occurred at two military installations just around the chattanooga area. We also know that the preliminary indication preliminary indication is that the shooter is dead. In addition to the shooter, we know that basically four military personnel and one Police Officer were believed wounded. The Police Officer reportedly was shot in the leg. He is also reportedly in stable condition. So the active shooter situation in chattanooga, according to police there, is over. It occurred at two military installations. We also know the preliminary indication right now is that the shooter is dead and four military personnel and one Police Officer believed wounded. We only know the condition of the Police Officer which is stable. He reportedly was shot in the leg. So ty, it is still developing. Were awaiting a News Conference that the mayor is going to hold. We dont know when that is going to happen but the active shooter situation in chattanooga, tennessee, april cording to police, is over. Thank you, sue. Well update as we get more information. The markets moving modestly higher at this hour. The industrials up by 47 points. Thats about. 25 . The s p 500 by. 66 . The nasdaq up 1. 01 . Bob pisani is at the new york stock exchange. Nice up day overall. Goldman sachs a bit of the drag on the dow industrials. But you see sideways. Germany, all of europe had a nice little bounce. Mario draghi said theyll provide additional liquidity to the greek banks. We had a nice global rally for a week now. Germanys up 9 . Shanghai 9 . Australia australia, s p up 4 . All of this largely on reports greece and china stabilizing. Overall whats not working is the Global Growth story overall. Steel industry poor. Energy poor. Industrials arent doing much either. A big multiindustry company lie dover. This is what the industrials look like these days. Theyre just drooping because they work in 30 40 50 countries and they cant get any growth. Thats what we need and we do not have it right now. Bob pisani reporting for us. Can stocks move higher from these levels . Joining us rob lutz chief Investment Officer at cabbott wealth manager and ed perks, from Franklin Equities group. Welcome, good to have you both here. Right off the top, yes or no . Will stocks move higher from here and be higher a year from now than they are today . Rob, you first. Sure. Yes. I think they can. I think we need to remember on financial markets, money goes where it is treated best. Over the last ten years or so, a lot of moneys moved into bonds and bond yields are so low today. Alternative investings been very popular but it hasnt really produced great results. I think money is now shifting back to the equity markets and thats what well see over the next year or two. That on top of very strong fundamentals. Low Interest Rates, low energy prices. You got the Capital Spending cycle starting to get going. Its been slow but it hasnt been that bad. Some sectors it is really starting to show. It is a really positive situation for the market so we think you can get to 2,375 on the s p 500. 20,000 on the dow i think is achievable in the next few months. Dow 20,000. Thats about a 12 or 15 one return if im doing my numbers right. About 13 on the s p. What do you say . Are you quite as bullish as rob is or not . Yeah. I think there are some great points. Thats maybe a little bit more bullish than we are but i think the key part of that argument is that on a relative basis, equities look more attractive than other asset class. As we sit here today we have fairly low expectations in terms of what companies can deliver relatively little revenue and Earnings Growth in the markets today. Weve got a little bit of risky situation that weve become a little bit more dependent on the back half of the year and into 2016 to deliver those gains. But were also starting to kind of anniversary on the year over year basis at least some of the real drag effects on the market. We know that Lower Energy Prices have certainly lowered revenue and Earnings Growth in the market. The stronger dollar. A lot of that move in the dollar was the latter part of last year and as we continue to move forward, that will become less a drag. Let me just ask you quickly why youre so favorably inclined to Energy Companies like dominion, et cetera . Thats in the utility space. Think thats an area where you have a he seen a pretty meaningful pullback. Clearly investors concerned about longterm increases longterm Interest Rates, i should say and the impact on utility evaluationvalueationsvaluations. When they treat that group nor broadly and uniformly, we think you can go in and make more selective opportunities. Dominion and sempra and nextera have some pretty good opportunities. We think there will be nice Dividend Growth there. Thats a key component of where you want to invest Going Forward, dividend growers. Go to powerlunch. Cnbc. Com. Go there right now do not wait a second. Right now to see rob and hed outlook on energy and how to play it. Right now were going to talk about a big day of earnings under way. Goldman sachs missing Second Quarter estimates because of Legal Expenses. On the flip side citi topping expectations by cutting their legal costs. Shares there up more than 3 today. Google reports after the bell, that stock up 2. 5 ahead of the report. Were covering it all right now with jon fortt. Hes going to do google. Thats my guess. Shocking. Kayla is going to do citi. That means youre going to do Goldman Sachs. You go first. This morning, the numbers maybe didnt surprise a lot of investors out there but there were three real points people wanted to focus on today. First what happened with Goldman Sachs and their results, bad news first. Fixed income currencies and trading. You talk about bonds, xhond tiz, currency that Trading Volume felly nearly 30 . A bad spot there. That traditionally has made up in the past a bulk amount of Goldman Sachs peas revenues. The bright spots m a. You take a look at underwriting. The debt and equity side of things are still generating a lot of Investment Banking business. The third thing is the mortgage related legal costs that they incurred. 1. 45 billion. Thats a good chunk of money. It is five times more than they reserved over the same quarter last year. The Goldman Sachs bullet points there. Kayla, citi sitting pretty . At least for a day. Beat is largely attributable to restructuring progress that the set set in motion a couple of years ago. Theyre cutting costs. They are releasing money theyd said aside to cover bad loans and theyre seeing a lot off. Progress in their bad banks since the financial crisis. For the Second Quarter in a row it turned a profit and they are very close to getting this off the books in its entirety although were not going to see the same momentum of progress down the road. But when you think about hitting these efficiency targets, cutting costs, getting these Legal Expenses out of the way, the final step is figuring out where your Revenue Growth is going to come from. Now investors are being looing at where in the core business is revenue going to come from and theyre starting to scratch their heads a little bit. Thats what city has to work on but for the time being their progress is good. They have been cutting branches like crazy in new jersey. Thats part of their strategy they want to be an international bank. International is what they really want to do. Jon, google out after the bell. What are we expecting . Three things for you to watch for and viewers, of course. One is new cfo. Ruth porat, she joined at the end of may. People wonder if shell say anything about capital insurance. Google hasnt traditionally done that but will they say anything about capital return. What will they say about cost controls and discipline. Expecting some of that out of her. Also something called mobile getting. Google basically started my or advertising mible inging mobile sites that are mobile optimized in search results. Around the end of april adobe numbers out yesterday showed that there was an impact where there were fewer clicks on ads in mobile. Higher prices for those ads but a lot fewer clicks. How will that shake out . Will revenue come down because of that or will youtube results actually have a benefit beside that. Then of course the currency headwind. A lot of things to watch for in what they talk for in these google results. Todays powerhouse is next. It is ranked the sixth largest city in the u. S. Home to more than 200 golf courses. Can you make that city . Plus we usually showcase a celebrity house but this week the house is the celebrity. You have to stick around to see what were talking about. You focus on making great burgers, or building the best houses in town. Or becoming the next highlyunlikely dotcom superstar. And us, well be right there with you helping with the questions you need answered to get your brand new business started. Were legalzoom and weve already partnered with over a million new Business Owners to do just that. Check us out today to see how you can become one of them. Legalzoom. Legal help is here. Can a business have a mind . A subconscious. 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 . 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. Time now for the powerhouse. It is home to more than 200 golf courses. We are talking about phoenix, sixthlargest city in the country. Eric jensen joins us today with the caniglia group. I need my italian soft kwlg. Median sale price, 215,000. Inventory, 19,500. Takes about 2 1 2 months to sell a house. Average days on the market there, 78. Our first listing, 540 west mariposa street unit 32. 389,000 asked. Two beds 2 1 2 baths. 1,600 square feet of living space. Why is this one a standout . This is is a great new in field project thats being built in the heart of central phoenix. Its being developed by boxwell southwest. It is a threestory modern town home. Its got the living and kitchen on the main floor, bedrooms on the secondary floor, then there pea a third bonus room upstairs and it has a 12foot sliding glass door that opened up to your private rooftop terrace. Has modern finishes throughout and it is ideally located in exto the light rail station, as well as some of the best shops and restaurants that phoenix has to offer. That sounds really so it is an intown property then. It is. Correct. Theres no the a lot of in. Field projects but phoenix is picking up and we are getting more and more of that. This is a new and exciting one. If im going to live in phoenix, i want a pool. Is there a pool there . Theres no pool there but the Phoenix Country Club is located pretty close by so you can definitely become a member there. Thanks. You think theyd have me . I think theyd take you. I dont know. I dont think so. Second listing with be 3508 east coolidge. Theyre asking 719,0 45. Three beds three baths. This is is a freestanding home. Thats correct. This is a completely remodeled home. It was remodeled in 2006 and expanded on. Its got a split floor plan. It has this luxurious master bedroom and bath with gas fireplace, large soaking tub. One of the unique features of this home is the Vaulted Ceilings which you dont find a lot in this area. Limestone floors and soap stone countertops. It is just a great, great family home. It is the neighborhood where people ride their bikes on saturday and sunday. You are walking distance to a lot of neat shops and restaurants. Great family environment. That one have a pool . That one does have a pool. It is a beautiful pebble tech pool heated with a spa. Then theres this large wraparound deck in the backyard as well. You can escape the arizona sun that way. Reserve that one for me eric. Lets go to the powerhouse of the week. 8399 east granite pass road. Listed 1. 4 million. 4,200 of taxes four bedrooms 3 1 2 baths. 4,500 scare feet of living space. This one is truly stunning. I wanted to bring you Something Special that really showed the arizona lifestyle. This home is located on over an acre of arizona desert. As you walk in youre greeted by 20feet ceilings. A massive wood truss beams and a big kinterra stone fireplace. The home was truly built for entertaining. A gourmet ditchkitchen with decor appliances. This elegant Center Courtyard with five sets of french doors leading out to it. An eightfoot tiered fountain for ambiance and lots of room for your guests. It has highend finishes throughout. It has a fivecar garage. Three of those are actually temperature controlled so your cars willnice and taken care be nice and taken care of. That is really nice eric jensen, thank you. Usually we bring you a celebrity powerhouse at this time but today wed like to share this inverted kasa. It looks like something out of a james bond movie. The infinity pool on top serves as both a glass based ceiling and a light source for a master bedroom, kitchen and mez zeen. Views of the undisturbed from every room constructed. Look at that. Casa brutale puerto rico one step closer to possibly a default after one of the commonwealths financial unite failed to make a payment. Meanwhile, we will be back in two. Its a fact. Kind of like shopping hungry equals overshopping. \ s 2 i take prilosec otc each morning for my frequent heartburn. Because it gives me. Zero heartburn prilosec otc. The number 1 doctorrecommended frequent heartburn medicine for 9 straight years. One pill each morning. 24 hours. Zero heartburn. So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep them all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberyy apple scones smell about done. Ahh, youre good. I like to bake. With at t get up to 400 dollars in total savings on tools to manage your business. At ally bank no branches equals great rates. Its a fact. Kind of like mute buttons equal danger. That sound good . Not being on this phone call sounds good. Its not muted. Was that you jason . It was geoffrey it was jason. It couldve been brenda. Some good news for automaker. Lets take a market check first. The industrials up 45 points. The s p 500 up 14. Nasdaq at 5,151. Thats up more than 1 as you see. The russell 2000 up about threefifth of a percent. Hes the general manager and executive vp of the deppnver broncos but he also knows a little bit about cars. Thats next on power lunch. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Welcome back. Tough times in the windy city. Why chicagos money problems may have just gotten worse. Plus puerto ricos former governor is here on whether that island may eventually have to file for bankruptcy. And a new investing idea on a company that near lyly no other analyst covered. Youre going to learn the name. Joe theismann with mandy in lake tahoe. Reporter tyler, i never thought youd say good news for automakers in europe. Its been years years really since weve reported steady good news for the automakers. Really the first half of this year, most people are saying were seeing a gradual uptick in here weve seen the bottom. June sales up 14. 6 for europe. The largest month over month sales increase since december of 2009 for the first sixth months of the year sales up 8. 2 . When you look at the different countries, some of these numbers are staggering. Admittedly, were coming off a very low base. When you see a gain of 23 in spain, keep in mind that the sales were so depressed over the last several years that these bumps were expected to be doubledigit when they finally kicked in. You see the strength across the board. Germany and Great Britain really have had the strongest for some time. And lets take a look at volkswagen. This stock which is an interesting one because volkswagen not only has the strength in europe but they also have the strength in china where they are number one. While theres good news for volkswagen, when the european sales are improving they dont want to see the weakness in china because thats certainly going to weigh on volkswagen. Those european numbers were not just little gains. But theyre off of really depressed levels. Good thing to point out. Phil stick around. Were going to go back out to mandy in lake tahoe whos with john elway. Mandy . Hes not just general manager of the denver broncos, he also has his own hall of fame playing career as well. But hes a total car guy. Well get to cars in a second but i want to start with yesterdays news. There is a fiveyear, 70 Million Contract just signed with demaryius thomas. Why is this kid worth 70 million . Hes a tremendous player and hes been a big part of our success over the last five years since he got there. Hes a tremendous player big, fast, he does a tremendous job with the ball after he catches it. To build a Football Team you want to be able to keep your own. Weve been trying to do that and demayor demariust has deserved. Were thrilled hes going to remain a bronco. Have you ever had discussioned with the Dallas Cowboys front office with thomas salary . No. I think our discussions are with his agents. Those collision reports are totally false. Lets move on to cars. You have a number of Car Dealerships in denver. Youve also just invested in a great news used car startup. This is a very fragmented market. You have a number of competitors in the space. Why is this one going to be the big success . You never know. When i looked at the company, looked at varoom and the people that they have they have a great internet presence and great car people coming together. We thought about can big ticket items be sold on the internet i think youll see thats going to work with the idea that vroom is doing and delivering to the front door and giving them sevenday moneyback guarantee and free nationwide. Delivery. Millennials are coming up and all the shopping they do online were hoping thats the next step. Come in here phil. John this is phil lebeau. Ive done some stories on shift and im familiar with vroom as well. Are you surprised at how rapidly Internet Sales are developing when it comes to the auto business . Gone seems to be the days of people going around to a number of dealerships, increasingly they may not even take a test drive. Well, i think what weve seen is weve seen the car business change over time. Theres so much more to service now. I think with the young people coming up and the old car buying experience is changing. I think it comes down to a service and how people get treated when they come in it. Thats a big part of it. I think what we can do online. With everything going on online with the millennials doing so much of their shopping online that could be able to deliver the car to their front door and give them a sevenday money back guarantee, this has a chance to be successful. John i think if Marcus Lamonis were here hed want me to say hello. So hello. Back to football and a story thats kind of lingered over the offseason and will certainly pick up again in a couple of weeks. I think you know what im going to ask you about and that is the deflation story involving tom brady. What do you think of that story, of the punishment that was handed out by the commissioner and also did you ever know or hear about, or yourself engage in any kind of tweaking of the gear or footballs during your entire football career . Well to answer your last question first, i played long ago enough that we never got to see the footballs until they we were in the football game. We had nothing to do with the footballs. But i think the commissioners doing obviously in a tough situation. Hes done a great job with the league. Well see as that comes down which direction the commissioner goes. But i think so far what hes done, hes done a nice job. Obviously its been something thats lingering on and im sure the commissioner as well, i know everybody in the league would like to move on from that. Hopefully that decision comes out quickly. Ive got one last question for you. Youre a california boy, right . And theres no Football Team in l. A. Are they ever going to get a team say in the next ten years . I think so. You look at where everythings going. Obviously theres the possibility of some teams moving there now. I do see a Football Team in los angeles here in the near future. Whats the near future . Next few years . Five years . I think the next couple years. But its hard to say. Im like everybody else from the outside. Even though i work in the nfl, thats something that with everything in the press that theres a possibility of those teams i think well see what happens. Good luck out there. Youve got great odds to win. I know youve come in second a number of times but see if you can make it number one this year. Ill try. Thank you. John elway. Make sure you watch the live broadcast this weekend. It is all going to be on your local nbc stations. Tyler . One of the really terrific athletes of my lifetime. Not only a Football Player he could have played for the yankees, great golfer john elway. Thanks very much mandy. That will do it for the first hour folks. Lets turn it over to my friend brian sullivan. As a lifelong san diego charger fan, if they get a team i hope it is not the chargers. It is now 2 00 on wall street. 1 00 in chicago. The dow is up about 38 points. Oil down a few cents to the low. 51 per barrel range. Welcome to the program, everybody. Happy thursday. Much more ahead with some interesting investing ideas. A stock you probably never heard of. But we have to begin in chicago because the citys money problems may have just taken a turn for the worse. Underwriters have priced about 743 million in bonds were yields of nearly 8 . Thats more than 5. 5 higher than federal government bonds and actually more than 30year bonds from brazil are yielding it all sends a strong signal that investors are concerned about chicagos ability to repay. Jimmy Jimmy Jimmy Jimmy yurio, here is the sad irony. Chicago is nearly broke so it has to borrow money to compete its obligations, which then of the coulds more because it is nearly broke causing the city to pay more on its bonds. Is chicago caught in a dangerous fiscal downward spiral here . I think you forgot the most important part of it too. Theyre borrowing long term to service shortterm obligations. Even the federal government knows that thats an awful mistake and they take away any Tax Exemption from that sort of policy because they want to discourage it. When i see Something Like that happen ive spent a lot of my career either working for banks or with banks. To see the other way going around, to me is very disconcerted. Heres the thing. Maybe a lot of 25 yearolds watching cnbc they dont care about Municipal Bonds, thats so boring. Who cares. They need to care right . Because a lot of the obligations and debt load to going to fall to the 20 and 30 yearolds now and maybe even their children. Chicagos borrowing continues on, et ceteras getting longer dated. How does this get fixed . There is a couple of ways. This is a longterm problem and it is finally coming home to roost. Weve kicked the can down the hill long enough. This is crisis management. Raise taxes. Cook county yesterday raised its sales tax 1 to 10. 75 . Chicago is in cook county. Property taxes will be going up. You start going around the drain when they diminish services enough that living in the city is bad and people start to move out. Especially young people in chicago, pay apensioning for it in your personal taxes, your property taxes, its coming. I want some clarity on going down the drain and how long it takes to go down this drain. Brian, im just curious. s not bad. Chicago has shown and cook county has shown the will to raise taxes so therefore maybe more committed to actually doing something fiscally conservative. Getting 8 . Thats why a lot of people i dont want to put puerto rico in the same sentence but thats why a lot of people are in muni bonds for that yield. A Municipal Bond you have the willingness and ability to pay. Cook countys demonstrated the willingness and ability to pay. Longer term it takes decades for a city to fall apart like detroit did. What happened to detroit was they had a fay tat lack of assessed value meaning everybody left. There was nobody left to tax. Chicagos a long way from detroit. We have a lot of businesses here. We have transportation here. I think chicagos okay. Were in a hard problem. The solution that we have has to come from the political class. Weve ignored this problem for a very long and the solution is going to come from springfield and city hall not from the capitol building. Two things. First, detroit then raised taxed that 1. 5 living in the city tax which drove more people out. So the thing tends to gather steam. The second thing you just said that the Political Leadership of chicago and cook county is going to do the right thing . Theyre completely beholden to the unions. They will not cut the pensions. Without cutting the pensions this problem should just accelerate over time. You laid out the ways to solve them. One of them is hitting the rocks. Right . Heres the thing. If you political cannot cut pensions because people rely on this to leave, youre not going to cut the place, chicago has a homicide crisis you cant cut the Fire Department or schools because you need to invest in education, whats left to cut . You must cut something. Pensions in detroit were big deal, too. They got 35 cents on the dollar. These pensioners should be stepping up and volunteering their pensions to be cut this much so theyre not cut this much. In my opinion. Jim, that would be great to get people to volunteer their economic interests. I wont do it personally. No way in hell. No way. I earned this money. It belongs to me. I agree. I agree. Why should they bear the burden . Nobodys asking them to take a haircut. The Illinois State Supreme Court affirmed that pensions can be neither diminished nor impaired according to the state constitution. Brian, you think its possible that chicago hits the rocks meaning bankruptcy a la detroit. You think that thats a possibility in the next ten years, right . I love chicago. My wife is from downtown chicago. It is a great city. You look at what happened in detroit. Im not going to make the direct comparison to puerto rico. I think we all know its out there. But i wonder does chicago have a money problem or does chicago have a political promises problem where people 25 years ago stuff that politicians know they didnt care. Theyd be out of office or dead before the stuff had to be paid. People relied on those promises. Now what . First, yeah the benefits are large and we have People Living longer. But the other problem, this isnt just city workers. The city hasnt made a pension contribution from 0 yv04 to 14. What we have to do is fix the pension plan for the guy we hire tomorrow or the day after that or the day after that. We have an actuarial problem. It took us 20 30 years to get here. It is going to solve over 20 and 30 years. It wont just be taxes and it wont just be cuts. The answer sounds like no guaranteed pension. I mean thats a thing of the past isnt it . Move to a 401 k program and guest with the times. Jim, sounds like you would not tough chicago debt with a tenfoot pole. No. The fed keeps pushing us further and further out the risk spectrum by taking away safe yield. Theyre daring us to lend chicago money. I say no. I say it could be a bad thing. 8 . Sounds i disagree. Sounds tastier than a burger nothings tastier than a burger from brants in paletine. Chicago is an unlimited general Tax Obligation bond. What is hurting us is our political leader shipshipshipleadership, not economic conditions. If we get just some fundamental structural changes, you all will be wishing youd bought chicago bonds. I want you to be right. I do. We got a big headline tomorrow. All politicians in chicago, illinois, democrat or republican, are simply paying for the monetary sins of those who came 20 or 30 years before them. Were the ones who are paying for their sins. Were the property owners. I understand crimes were committed and it is not fair. Im just talking about a practical solution in raising taxes. I dont think that it is because it will drive away business and drive away people. Longerterm but you are going to have to raise taxes. Chicago has a big judgment next week we have a judge determining whether the small change chicago made is valid or not. And Chicago Public school doesnt have a teachers contract yet. They dont have a budget with the state of illinois. A lot things will be coming out of chicago. Hang on to your hat. Best restaurant scene in america. Including brants. Jim, thank you. Lets see how chicagos doing in our power city index. This is something youll only see here on power lunch. 39th. To attract the performance of the 12 Biggest Companies in these areas, despite the money woes, chicagos pci has done pretty well this year. Perhaps reflecting more the globalized nature of the Biggest Companies in chicago. Their pci is up nearly 6 year to date let by walgreens, mondelez and cme group. If we get a little broader and look at all 53 Chicago Area Companies with market caps above 500 million, which i spent my morning doing fun for me things arent as good. The average return of those 53 companies is about onethird of the s p 500. We just delivered to you some exclusive content. Now lets deliver you some el alpha. The impact of cnbcs big conference yesterday. Starboard Value Partners jeff smith wants to break up macys. That stock popped. Its up again today. Ethan alan soared yesterday during trading. Another winner a little less well known, Keith Meister likes American Realty capital. Just like the others the stock popped when mentioned at our conference. Kate kelly live in new york to wrap up another great addition of cnbcs delivering alpha. It was really a market moving day. Real estate was the motif. Jeff smith came out swinging at macys saying his math showed at least twothirds of the companys enterprise value came from its Real Estate Holdings and that macys should consider breaking into two and better capitalizing on those assets. We believe theres an opportunity to create two leading companies, macys operating business as well as the real estate company. We believe you can accomplish this goal while maintaining the dividend and actually making it safer. And by maintaining the credit rating. Shortly after that with the stock rising nearly 8 macys itself fired back saying its committed to maximizing shareholder value and was always reviewing its real Estate Strategy but not committing to anything specific at this stage. Tom sandell recommended the Furniture Company ethan allen. He said they were a valuable real estate play too, with 50 of its market cap being due to that but that the stock had been in a slump and thanks to its relatively low debt load among other things it was a prime candidate for a private equity takeover and or a recapitalization which could generate much better shareholder returns in his opinion. And Keith Meister talked up American Realty capital. And undervalued stock that had some accounting issues and suspended its dividends for a time. New management said theyd put that lined it and the stock was a rare opportunity to buy bondlike risk with equitylike returns. Who doesnt want that . If he keeps bringing the heat well have to call him the heat meister. Hahaha. He started with the premise that fundamentally real estate has gone up in recent decades. Thats an asset that people want to own. That was certainly reflected by other panelists, including Jonathan Gray who runs the huge real Estate Practice at blackstone. Kate kelly, thank you. For more on macys cnbc contributor jan rogers nippen a Longtime Department store executive, also involved in big Department Store deals as well. Your thoughts . Macys is one of the best run retailers in america so i dont think theyre going to improve the operations. I do think however the real estate is worth a lot more relative to the operating company than its ever been worth in the 50 years ive been looking at retail. Its time for people to look really hard at valuing that retail finding out a that real estate, finding out a way to release that value and a reit is one way. Under that theory this began with sears. Everyone wants to know if sears is really a real estate play. Now this ethan allen, darden isnt every retail event just a real estate play . Well when Interest Rates are at alltime low and cap rates are as good as theyve ever been on real estate everything in fact is a real estate play. You do have to look at that. Whats never been before where real estate was worth as much as it is today versus operations. The problem, jan sorry to interrupt. The problem is if macys did that macys operating business would have to lease back the space from macys the Real Estate Division which would increase their operating expenses. Is that really in the long term is that going to improve macys . I ran this valuation 20 times when i was at the may company. We never got to the point where the two values together were worth doing the deal. Today when you look at it the two values are probably worth doing the deal. Yes, the operating company has a little harder time. But remember half of macys stores are leased already. They know how to run a business with a leased store. They know how to set up their deals so that they can control the business. They couldnt get out of receivables either until they figured out a way to do it. Real estate works the same way. Its never been worth more. You have another plan t. J. M, the parent of tj maxx should buy macys . Their market cap is nearly double that of macys. The market cap of t. J. X is bigger around the two of them are the two biggest sellers of branded product in america. If youre ralph lauren you sell more out of macys and t. J. X you could create a walmart at home. You could be a 60 billion powerhouse. When i wrote that it wasnt exactly me saying it is going to happen. I was using that as an example of how much macys real estate is worth so much in theory they could be bought and paid for by their assets and if you wanted to merge those companies, that would be a way to do it and have this enormous seller of branded product. From the form real estate reits are different now than theyve ever been. Its easy to say value can be created where you couldnt say that ten years ago. Interesting stuff. As always jan. Thanks. Netflix stock having a great day. Competition is popping up. The ceo says hes not worried. Should he be . Plus is puerto rico running out of money . Former governor is here to talk about what the options may be. And things got heated for fed chair janet yellen in congress yesterday. Today she faces the senate. Well bring you relevant headlines. A lot more to do. Stick around. 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 . Female announcer get three years interestfree financing on brand name mattress sets. Plus, get free delivery, and sleep trains 100day low price guarantee. Sleep trains interest free for 3 event is ending soon. Your ticket to a better nights sleep xco0 big day for netflix. Up 17 after reporting earnings last night. The stock is now up 130 over the past year. Julia boorstin and dominic chu join us now. Julia, Ceo Reed Hastings saying hes not worried about the competition, though seems like every single day there is a new entrant into the streaming space. Thats right, melissa. Certainly a host of new rivals. But hastings acknowledged this issue and said that amazon has seen a massive increase in streaming. And we are of course seeing a bunch of other new players. Even comcast coming into the space with these slimmed down packages of internet delivered content. What hastings theory is that the whole market is expanding and he feels like because of their original content, people are going to continue to pay for netflix even if they also add on our services. Dom chu, the stock has been a rocketship. Staggering. When julia looks a the a stock like this when i do when you do, you said yourself, about three years ago on a split adjusted basis, this was a 7. 54 stock, you saw it is 115 and change right now. Talking about a near 1,600 return over the course of just the past few years. I mean the analyst target prices were already implying a nice move higher. Theyve already adjusted a lot of those estimates today so the new target price went from 109 to 111 a share. It is even trading above that right now. This stock has been a juggernaut. The real question becomes whether or not when the Analyst Community looks at this nobody expects to stock to do anything but go up. That should scare at least some of those people out there. Melissa or julia, are you guys apple tv users . Yes. So i am as well. Dom . Yeah absolutely. Every time i log in to the apple tv theres another channel. I dont know what to call them. Smithsonian channels got one. Theres a lot more competition to click on others rather than netflix. How do they get people coming back to that netflix what do they call these things . Channels . Well thats how Reed Hastings thinks about it. In terms of in the cable universe you might subscribe to espn, showtime and hbo because they each give you different content. If netflix has the exclusive content, it will be worth the 8 or 9 a month. From his perspective it is a good deal especially when you look at the fact that an app like pbhbo, is more expensive. I still dont think we confirmed do we call those things channels or apps . Apps. Apps. Even on apple tv . Get with it brian ive had apple tv since the start. There is a cnbc app. My problem is i pay for a lot of these apps right now. You get to a point where also it becomes the same price as a cable bundle. Thats where the challenge is. My hulu costs 8. Netflix costs 8. This is the part of the program where i think i have to say our Parent Company is comcast. Thousands of air travelers stranded. You cannot fly through this. Thats what were trying to show you. Check it out. Were back after this. Hi. Hi. Hi. Hello. Hi. Hi. Hi. Hi my names josh. Kelly. My name is raph. Steve. My name is anne. Tom. Brian. Krystal. And i am definitely not a robot. Im one of the real live attorneys you can talk to through legalzoom. Whether its for your business or your personal life, dont let unanswered legal questions hold you up. Because were here. Were here were here and weve got your back. Legalzoom. Legal help is here. Thousands of travelers stranded in indonesia. Major airport had to be closed today because of volcanic ash. The volcano in east java has been evufted forrupting for a week. Today street talk we have some currency conversion thrown in as an added bonus. Just a sprinkle. You cant wait. First stock, statoil. Upgradeded to ed toto a buy. They like the management team. They note stateight is the performing big Cap Oil Company in their coverage universe over the past year. Their target 160 norwegian kronar. Im watching delta air lines. Credit suisse raising the price target to 61 from 57. Earnings growth up 20 looks very realistic in the analysts words. Oil rises back to 70 they are laying out the worst Case Scenario there. Still 20 growth in earnings. Its also less exposed than appears to the weak domestic markets. Down 9 year to date. Third stock, toyota motor trading under the ticker tm. Jeffries upgrading it from a buy to a hold. About 11 upside from here. I know the price target seems odd because it was converted from their yen price target upgrade. Over the past three months only one auto related stock is higher. It is not toyota. It is renault. Trades under rnls here. Fourth stock here dean foods. Deutsche bank upgrading to a buy. The analyst is excited about the introduction of the dairy pure milk brand later this year. Even a modest Price Premium could lift already low margins. Estimates for this year and next are higher based on improvements in volume and cost savings. Todays under the radar name is aceto. Ticker acet. A 700 million market cap maker of active farmpharmaceutical ingredient makers. The analyst, Matthew Hewitt is really the only major analyst. He may be the only one on the sell side. He notes that this company has quietly transformed from a Chemical Company into a Health Care Distributor and adds that investors really havent grasped the changed nature of the companys business. New high in the stock and nor than four times average volume traded. Very heavy volume on this one. Google trading up about 2 ahead of its earnings. And heading into the final trades for oil today, the oil close when power lunch returns. 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. Being a keen observer of the world has gotten you far but what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. Hello, everyone. Im sue herera and here is your cnbc news update at this hour. House Speaker John Boehner says it is pretty clear that a majority of the house and Senate Oppose the iran nuclear deal. Congress is expected to vote after the Labor Day Holiday early in september. Former president george h. W. Bush remains hospitalized at a maine hospital after suffering a neck fracture at his fall in kennebunkport last night. President obama called the former president to wish him a speedy recovery. A u. S. Judge certifying a Class Action Lawsuit against apple in a case brought by retail workers over bag searches at its brick and mortar stores. It is part of a 2013 lawsuit alleging apple should compensate employees for the time it takes to conduct those searches. Hbo receiving a leading 126 emmy nominations, including 24 nominations for its elaborate fantasy saga game of thrones. Other shows with most nominationed include the final season of amcs mad men and netflix house offof cards. That is the cnbc news update. Are you a game of thrones fan . A little bit. A little bit. I dont have a lot of time with three kids to be sitting there watching netflix. Career three kids . Sit in front of television, sue. I need time management. Lets head to the nymex. Jackie we settle week. We saw an initial pop on the session but selling pressure during the day down about 50 cents. The final trades are in. Wti finished at 51. 91. The culprit today the stronger dollar. Even oil bucking the trend. Bo tay ler telling kate kelly he thinks oil could go to 30 in short order so investors are mulling that today. If we break the 50 range then we are going lower from there and thats where selling pressure will intensify but it will be hard to break that support level at this point. Fed chair janet yellen and ecb president mario draghi both speaking today. For the latest gets get to cnbcs senior economics reporter receive leisman. You had a Strong Equity rally in europe today up about 1. 5 . As the pieces of greeces bailout seem to proceed at pace. Kind of unusual for the chaos thats really prevailed in europe since the financial crisis. Draghi announced that europe that the European Central bank has increased the emergencylanding to the greek banks by 900 million euros. A little bit less than had been anticipated by some officials. However, the story is that it does allow the greek banks to perhaps provide a little bit more than the 60 euro a day limit that had been out there available to average greek zints citizens and depositors. But draghi was pretty clear no matter whom you talk to there are, i would say, questions about the implementation, will and capacity. Now this positive developments in greece including the passage by the Greek Parliament of these reforms, it is welcome news to yellen. Who begins day two in front of the senate today. She had made clear yesterday that any problems with greece could cause her to kind of back off on her intentions to raise Interest Rates this year. She did say though that if the forecast proceeds as she expects, that the Federal Reserve should likely raise Interest Rates this year. Well be looking for perhaps a little tense battle with her and Senate Banking Committee Chair richard shelby. He has proposed a series of strong reform for the Federal Reserve, most of which yellen opposes. So i guess were shelbys beginning his Opening Statements right now. Well have yellens Opening Statement and well be taking it from the q a. Steve leisman, thanks. Puerto rico perhaps lurching even closer to default after one of the commonwealths financing units failed to make a 93 million debt payment. Governor, thank you very much for joining us. It is 93 million on an overall debt load of over 74 billion. It is a relatively small amount. Is there any chance this is just a really extreme and perhaps risky negotiating tactic or do you believe that even this sum of money is not there . Actual repayment is due august 4th. So it could be that this is part of the negotiation process. However, the government backed the entity that would have to make the payments has a serious liquidity issue. They have about 140 million due of their own notes august 1st. So again, they are very close to the point where they may not have the liquidity necessary so make payments but actual right now it is a technical default, i will call it that way. Actual default will be august 4th. Do you believe actual default will happen . It seems that actually if you you put it correctly. Its a small amount of money compared to the total debt. However, debt service has more than doubled in the last 2 1 2 years. At the same time theyre having a serious liquidity issue and big ques whether the will is there to do what it tax takes to address this problem. We addressed chicago at the top of the show. Is puerto rico able to come to the Capital Markets or literally have they been completely isolated . At this point access to the Capital Markets is basically shut off. Having said that however, if the conditions were there, and i would say trust is a major item thats lacking at this moment. And a political will. If those two were there, i believe there are players in the market that will be willing to back up. We think if 93 million cant be paid governor you are looking at 74 billion in obligations, this is just a small part of the story. Is a larger or major default on billions in debt going to happen . Is there a road out for puerto rico . There ought to be a road out. Actually i have to underscore theres 17 different type of credits. For example, general obligations, bonds, are guaranteed by the state constitution and there is enough money in the budget current budget, to pay those. By same token, bonds backed by the sales tax, they have enough money there. However, there are other credits, especially some public corporations, like pfcs, that actually appear to be in technical default as of yesterday that could not have the liquidity necessary to make payments. We could see differences or nuances between one or the other. Governor do you believe that the u. S. Taxpayer will ultimately be involved in a bailout of puerto rico . I dont see any way that there will be a bailout. And perhaps during the financial crisis in 08, 09 there was concern of contagion and whether or not this would have a systemic effect across the market. I dont see that and i dont sense that in washington today. So a default is coming. I would say that again, there are 17 different type of credits. I believe some credits will be paid and others will not. Youll have to check which credits youre holding, which paper youre holding. Depending on that youre either lucky or youre not. Thank you. Two very Different Companies opening up on the nasdaq here this morning. Their ipo getting strong interest from investors. Well tell you what they are straight ahead on power lunch. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage or major disaster, when you need us most, were there. State farm. Were a force of nature, too. More and more, data is visual. In fact, the number of mris has increased by ten percent a year. And a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. Because its so challenging a Research Project is teaching ibm watson to see. In the future, it could help clinicians spot key patterns quickly and precisely. Ibm watson is working to make healthcare smarter every day. Traders e sited this morning. Ollies Bargain Outlet Holding opens its doors as a discount retailer of closed out brand name merchandise in 1982. Has expanded to 187 Stores Across 15 states. The stock is up 33 right now. Pronai therapeutics specializing in clinical stage Cancer Therapy began trading today under the ticker dnai. Priced at 17 and it is up a whopping 85 . Time for trading nation because traders trade better together. Lets take a look at apple. Because after a slow few months to start the year the apple magic is apparently back. Shares are up 7 in just one week. Andy hargraves, covers the stock for pacific crest, rick ross. Andy any seeming reason for the newly refound love for apple shares this week . I dont think theres a specific reason other than it was down the week before and so it was a little bit up this week. Certainly earnings coming up should be very very good but i think everybody was anticipating that already. Were people too i dont want to say neglect difficult god forbid apple doesnt go up every day. But were maybe people overly concerned about the watch or Something Else . Or maybe theres not a catalyst and ultimately this is a catalyst stock . People are concerned about december. I think people are excited whats going to be reported for the june quarter and there is concern about december and what were probably seeing is just a little bit of jockeying around in front of that. The thing is we wont really get any data points on december until we get a little closer to that quarter and a little closer to the fresh. So right now i think were just seeing a little bit of marketbased volatility. Whats one thing . If there is one thing you had to point to and say, okay this is my biggest worry right now, what is it . My biggest worry is that the next iphone isnt good because thats where all the profit comes from. Iphones are some sort of competitive incursion is my biggest worry. Right now im not overly concerned about that. Rich ross take away all that stuff we just talked about. Leave it aside. Focus on the charts. How do the technicals of apple look . Brian the technicals look outstanding. I love the stock here. You have to be a big buyer ahead of next weeks earnings. Bring up the chart and im going to show you exactly why. First chart well look at is that year to date chart. You can see apple. We talk about jockeying for position. Youve been jockeying for six months now within this very well defined trading range. Keep your eye on those false moves, the false breakout to the up side in may, and that false break down just recently. We test 100day moving average set up for the sling shot in the other direction. If we zoom out and we look at the longer term weekly chart, this is the money chart here. Look at that very well defined multiyear trend line. Last week we established a key bullish reversal. We call this the hammer when we get the hammer on that key support, the 50week moving average, multiyear trend line. At the tail end of an 11 pullback. Thats one of our highest conviction setups. That should get us to 160 a share ultimately on apple. Obviously with the stock lower than that you want to be a buyer here today. The bullish hammer. Calling the 160 target there technically. Thank you. Appreciate your time everybody. For more trading nation, head to our nation tradingnation. Cnbc. Com. We dodditional segments. Sometimes three. Thats amazing. Google trending upward in anticipation of tonights earnings report. How is the Company Pushing for growth and boosting confidence . Thats straight ahead. Back in two. Here at td ameritrade, they work hard. Wow, that was random. Random . No its all about understanding patterns like the mail guy at 3 12 every day or jerry, getting dumped every third tuesday. This happens every third tuesday. We have Pattern Recognition Technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. For all the confidence you need. Td ameritrade. You got this. Google shares trading higher ahead of its Earnings Release ahead of the bell. Aaron kessler has an outperform on google 625 price target. Great to have you with us. Already google year to date it an outperformer. Week to date it is up more than 8 . The expectations going into this quarter are extremely high. Are you expecting them to either talk about capital return possibly . A buyback of some sort . And or lowering operating expenses which seems to be the expectation of investors at this point. I would agree investors are expecting both. Most importantly i think investors expect moderately ex Expense Growth. I think investors dentally want to hear that. Not sure well hear anything new on capital return but that could be a catalyst as well whether dividend or buyback. Thats worked for apple, that could work for google as well given googles relatively low valuation. When are you expecting wed expect an announcement as to a dividend or buyback. Google is now motivated to get their strong price higher given all the stock buy back or share dividend. In terms of the move weve seen already in the stock, are investors and analysts no longer concerned too much about Revenue Growth slowing or simply this notion of a buyback and Capital Allocation moving the stock at this point . There is an expectation growth is slowing. We are still relatively solid growth in q2, 18 . They are going to report closer to about 12 . Fx neutral is so solid. Over the next couple of years that slows to mid teens growth rate. Given google trading at roughly 17 times earnings next year attractive valuation given the growth rates. You think its trading at a fair value at this point, sounds like . Yeah. We think relatively attractive. Price target 19 times. We think there could be up side to that. If google can continue to put up mid to high teens Revenue Growth, that is attractive hire. Im sure you get calls from active traders. The setup for google going into earnings is terrible. Only because the stock price has gone up so much prior to the release. What are you anticipating in terms of the reaction in the stock and what google can deliver . I guess it comes back to what they say on the call with regards to Expense Growth Going Forward. Revenues are roughly in line investors will focus on what they say on Expense Growth or potentially a capital return to shareholders. Those maybe the bigger two issues on the call. If google is hohum when it comes to up side what is the top pick in your space . In large cap space we like facebook and priceline and linkedin. Thank you for joining us. Yellen about to take questions about the economy and future rate hikes ahead. Well carry the q a live soon as it begins. If you cant stand the heat, get off the test track. Get the mercedesbenz youve been burning for at the summer event, going on now at your authorized mercedesbenz dealer. Hurry, before this opportunity cools off. Share your summer moments in your mercedesbenz with us. Can a business have a mind . A subconscious. 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 . You focus on making great burgers, or building the best houses in town. Or becoming the next highlyunlikely dotcom superstar. And us, well be right there with you helping with the questions you need answered to get your brand new business started. Were legalzoom and weve already partnered with over a million new Business Owners to do just that. Check us out today to see how you can become one of them. Legalzoom. Legal help is here. Mandy is at the lake tahoe celebrity Golf Tournament and joins with us twotime pro bowler super bowl winning quarterback and interesting fellow joe theisman. Allaround nice guy. I want to add that. Joe theisman you are right. Great to see you once again back here with us at the American Century championship at lake tahoe. Lets talk about the nfl commissioner Roger Goodell. He could rule any day about tom bradys appeal fourgame suspension due to deflategate. What do you think Roger Goodell should do here . Take away all four games. That would be the right thing to do. I dont believe in the wells report there was enough that warranted a fourgame suspension. Roger is in a tough situation. No matter what decision he makes, it will fall back on the commissioners office. If he cuts it why did you give him that many in the beginning . If you dont cut it what did you expect . We need to get past this. Did you ever deflate a ball . We never did. We used the same ball for kicking and throwing. The balls always felt different. They werent always the same. That was the big issue. I didnt see a big difference. If you think of the game that was in question against indianapolis, offense played better in the second half with inflated balls than deflated balls. I think it was a lot toe do about nothing. What about the redskins ruling last week . Last year you told me you never met a native american offended by the name, but since admitted there are people who are offended. Last week was a federal judge who ordered the cancellation of the redskins trademark registration. There is an appeal in place. How successful do you think the appeal will be . You are taking away trademark and registration. If you take that away from the redskins as a Football Team you open it up for anyone out there to use have you taken the name out of society or turned it over to anybody . From my perspective, i auld looked at it it was a washington red skin and was proud to have worn that uniform. Ultimately, we know Daniel Schneider will make the decision. What do you think he will decide . Have no idea what he will do. None. You love stocks. You love stocks and you love banks and tanks. Lets start with tankers here. Do you like them more in the wake of the iranian deal . I do. It will free up more movement. It isnt the price of oil people get hung up on. Its you are going to have to move it anyway. The other side nat pays about 12. 5 dividend. I not only look at the stock and its performance, but what dividend am i going to get Going Forward . Tnk. Opec will increase production Going Forward. Their equities traded 23 higher and the s p is at 6 . Ive got a view on everything including politics what do you think of the iran deal . I think its a bad deal. To me it looked like there had to be a deal made. I dont think you needed to push a deal like this Going Forward. Im thinking about our children. About whats the future going to look like. Why did when we had the situation the way we wanted it and by the way, what about the four people being held there . Why werent they part of the deal . That should have been a dealbreaker. If you dont release our hostages we are off the table. Quick breaking news. Greek banks are going to reopen monday finally. Well watch for further news. Let me get back to the iranian deal. Ever think of going into politics yourself . No thank you. I enjoy watching it and being around it. I love the president ial race. Excuse me for breaking in here. Weve got janet yellen speaking live. He does not believe that federal regulation is a significant factor contributing to any liquidity issues. Interesting. Do you think federal regulation is a significant factor impacting market liquidity in any respect . And what work has the Federal Reserve done to determine the impact of regulation on liquidity, if you have in our markets . So i would say that were studying this issue very carefully. We have certainly heard the market concerns on this topic. At this point, i can give you a list of factors that may be causing this phenomenon. I should say you see this decline in liquidity in some measures, but not in others. So the extent of the decline isnt it an important issue to be watching . So there are a number of things that might be involved. First of all, there have been changes in the structure of the market. A larger share of bonds are held by buy and hold investors such as insurers and pension funds. That may do less trading. We have had higher capital