Transcripts For CNBC Power Lunch 20240622

Would it be a mistake right now . And we do expect big news from tesla during power lunch. It could move the stock. Mandy is off today but were happy to have melissa lee join us from the nasdaq. Well get down to her in just a moment. We begin with the big story on the American Housing market. Some really bullish new data but how bullish are they really . Diana olick in washington with the startling numbers. Di . Reporter well, tyler, its bullish depending on your take. Home construction took a big leap in june up nearly 10 from may but it was all driven by the multifamily apartment side. Renter nation rocks on. Singlefamily Housing Starts were down just under 1 in june from may, up 10 from a year ago but thats not really saying much given where we were a year ago. Multifamily is where the party is at. Starts up nearly 29 for the month, up 55 from a year ago. Thats where the good news is because weve been talking so much about skyhigh rents. More supply should help to ease that burden for renters. Bad news though is on that Single Family side we are still building far less than normal historical norms and far, far less than demand. Diana, thank you for that. So what is given those numbers that diana just sum ritz summarized for us the real Underlying Health of housing right now if you are an owner of a singlefamily home . Susan wapner from the Wharton School of business and finance. Well be joint shortly by megle morgan. Youve seen those numbers. What do they say about the Underlying Health of the Housing Market in america . It does reflect the underlying comeback of jobs which draws demand for housing. But constraints are still a problem for young homeowners. Household formation is up young are moving out of the parents home but theyre not moving to their own home theyre moving to rent. The rent isnt choice of the day. Its been so and these numbers reflect an astounding strength in the multifamily market thats likely to persist. If you are a landlord there is great news for you because rents are very supported right now by the demographics. Are the young people who are moving out of their parents homes, new household formation, are they choosing to rent because they have debt burdens from, say, student loans, or is it more that they are just choosing to rent because they saw what happened. Housing during the financial crisis and theyre afraid of it . Of course theres some of that, but it is mostly due to constraints. Young households simply dont have the wealth. They have the debt and also Capital Markets have tightened up considerably. Its very difficult to get a loan unless you have pristine credit and young people often dont. I am just hoping these millennials get it together. Because i got to cash out of my house at some point, susan well housing prices are coming back. Thats of course the good news. And rents of course are skyrocketing as weve heard. This increase in supply is likely to have some dampening effect but the rents are likely to continue to go up because of this tremendous demand from the youth for renting. Susan, thank you very much. Have a great afternoon. Lets bring in Megan Mcgrath executive director at mkm partner and senior home builder analyst. What does this mean . That builders most exposed to Apartment Building are doing the best . Not necessarily, melissa. I think if you take a deeper dive into this data it wasnt this bad. The Single Family was down 1 but on a year over year basis, take some of this monthly stuff out, were up 12 year over year. Thats slow and steady. A lot of these Public Companies dont have a lot of exposure to multifamily. Youve got lennar and toll. We like toll. Theyre pretty strong in multifamily and thats a good place to be right now. But i wouldnt count oupt the Single Family builders either. I think were growing at an okay pace. Dont count them out but at the same time as an investor do you want to be investing in the space, in the companies that specialize in where the growth is . Well yeah. I think you can do a little bit of both and i think stock picking is important right now. As you said it is not a rising tide floating all boats kind of recovery. Its pretty choppy and if you look at the data again, a little bit further you see strength in the south and strength in the west but still weakness in the midwest and the east. We Like Companies with a little bit more exposure to the west coast. We like kb home. A lot of exposure to california and thats still growing strong. Pick your stocks carefully and i think you can still do well in Single Family. Megan, thanks for your thoughts. Megle mcgrath of mkm. Now tole ledom chu with a news alert. Its rig count day. Focus on u. S. Oil rigs down seven this week to 638. U. S. Oil rigs active rigs as measured by baker hughes this week down seven. Over the past two weeks wed seen modest gains but again were back down to the down trend. To focus on this idea that bakerhughes rig counts continue to decline. Oil production still hovers near record highs though we have seen signs in the last few weeks that perhaps production is showing signs of weakness. Well keep an eye on oil prices this afternoon. Google meantime is the stock everybodys talking about today. Sharing soaring closer to 16 right. Beating apples record for the biggest market cap gain on earnings in a single day. One thing investors are learning from this latest Earnings Report is that youtube is becoming more and more important to google. Julia boorstin is here with that part of the story. Julia. Melissa, u tubes growth is a huge factor driving googles Second Quarter results higher and todays stock higher. Google announcing growth in watch time on youtube has accelerated and is now up over 60 year over year. The fastest growth rate in two years. While mobile watch time has more than doubled from a year ago. To give a sense of that scale, on mobile devices alone, youtube now reaches more 18 to 49 yearolds in the u. S. Than any u. S. Cable network. Advertisers are seizing that potential. The average spend of youtubes top 100 marketers is up over 60 year over year. And it is also a win for Youtube Content creators. The number of welcome back to power lunch. We warrant to call your attention to shares of fertilizer maker cf industries. Now dow jones is citing sources that say theyre in touch with a dutch Fertilizer Company that could be structured a tax inversion. Cf was halted for volatility just before. Its from illinois. It is up 8 in this trade after these headlines from dow jones. Dom chu, thank you. Hertz finishing restating two years of financial results. Sales of barbie dolls tanking 20 . Thats the seventh straight quarterly drop. Ge shares higher on this earningss beat. Well drill down more on the results in a few moments. Shares of fellow dow component boeing taking a hit at this hour prp the worlds biggest planemaker. Phil, is this the case of a new ceo who wants to sweep the kitchen before he moves in . I dont think so tyler. Though you never know for sure. Whenever these charges are announced the question always is why did you make that announcement now . Dennis mullenberg as recently as a year ago running the Space Division is now going to be the ceo at boeing. Hiss the news that came out of boeing this morning. This is a hefty charge. 536 million posttax. Thats 77 cents a share. Revenue and cash flow guidance from boeing however is unchanged and the cash flow guidance is important because thats really what a lot of investors are focused on with boeing. However, new fullyear earnings per share guidance will be coming next wednesday when boeing reports its 2q earnings. The kc46 tanker refueler program has been a bit of a lake for boeing and for others for a long time now. Its 179 refueling planes that boeing will be delivering to the u. S. Air force, first delivery is due in 2017. The key point, 4. 9 billion contract. It is a fixedprice contract so these cost overruns they just cant pass them off to the air force. This is the second hefty charge in the last two years thats prompted rbc Capital Markets to come out with a note today saying look, you have a he got over 1 billion in pretax charges the last couple of years. This is yet another reminder of how financially perilous it is for defense oems, basically the contract manufacturers, to take on fixedprice development contracts. Take a look at shares of boeing. Year to date. While this is bad news this stock has certainly been performing. It is up 100 this year. Keep in mind the defense business yet we had these big charges every once in a while for defense contractors is really the commercial airplane business that drives so much of the investment for the people who are out there buying shares of boeing. It is not the only thing but it is really a lot of the times what drives a lot of the investment behind this company. Fantastic, phil lebeau. Despite fears that greece about greece and the future of the eurozone europes stock markets are on fire. The ftse up 4 so far this month. The german dax and french index up 7 . Why are investors still piling into europe . Well, they think thats where the opportunity is. Where is the money going . Plus announcer coming up. Power pitch, a startup thats not your average couple of joe. It is an easy way to blend your house and coffee all in one cup. But will the panel think it up or toss it out . You didnt answer my question. I said why wont starbucks or Dunkin Donuts do their own version . Announcer stay tuned to find out. My businesses are definitely my life. My passion. This is what i was placed on the planet for. Im truly a master of multitasking. Yeah yeah. Well get it done. That momentum is constantly going. Thats what im here for. Having that same process applied to my banking is amazing. Chase technology is moving at the pace that the rest of the world is moving, allowing my momentum to kind of keep driving. Technology designed for your business. So you can easily master the way you bank. Welcome back to power lunch. Conocophillips shares are down but coming off their worst levels today saying theyre cutting spending on deepwater drilling cheaply in the mexico area where it will end a multiyear contract with a drill ship from ensco. The company is raising its Quarterly Dividend by a penny to 74 cents per share. Dom, thank you. There are smartphones, smart cars and smart water. Now meet an entrepreneur who wants to smart your coffee. Can he persuade the power pitch panel that his startup is the next big thing . Im founder and ceo of vita perk. In todays fastfaced lifestyle everyone is looking for ways to be healthy and make smart decisions. Now you can smart your coffee. Vita perk is an easy way to blend your house and coffee in one cup. Each packet has 15 vitamins and minerals that support memory heart health and nutrition. Offered for four flavors, just five calories per serving. Nutritious and delicious it is truly the only way to describe your coffee with vita perk. Market is massive. Think about it every day in the u. S. Up to 400 million cups of could of fee are coffee are consumed. We aspire to be healthy but we get busy we fall off the wagon but we never forget our coffee. Coffee and supplements. Is the the most innovative product to hit the market. Vita perk is what your coffee has been missing. Welcome to power pitch. You just watched vita perk. Now meet the panel, joining us here kelly hoey Alicia Syrett and barry nalebuff. Great to see you all. Kelly, throw out the first question to brad. Caffeine. Taking vitamins with pure coffee can interview with the ash absorption of nutrients. What did your studies and preparation tell but that . Studies indicate it that but not necessarily always does. We formulated this for 2 1 2 years so we ensure that it doesnt really affect the absorption rate. Brad, the per cost per serving is anywhere from 65 cents to 99 cents depending on how much you buy at one time. Are you expecting that consumers will spend this daily especially if theyre already spending a lot on an expensive cup of coffee . Early on weve seeing a lot of consumers use this product daily. It is not necessarily to take the place of a multivitamin. Just to clarify here for our viewers, it is 19. 99 for a months supply. Right. But 99 cents each if you just buy a single cup. Barry . I dont see how you patent adding vitamins to coffee. Why arent you just going to be a test market for starbucks or Dunkin Donuts, then they can do their own inhouse version . I talked to large companies, whether it be kraft or smuckers. Yes, they want to see some traction. I dont necessarily believe theyre in the process of trying to launch a company like this. However, there is certainly an acquisition potential down the road with one of those companies. You didnt answer my question. I said why wont starbucks or Dunkin Donuts do their own version once you show this works . It took years to get to where we are today with the formation. But we anticipate having competitors down the road which inev because it proves the notion that it is good to add nutrients to your coffee. I didnt see a lot of food in any of the founders peas ersfounders backgrounds. Why are you guys the if irs to get to this market . Its taken four years to get to where we are today. We brought on a strategic investors, chris stevens, who launched keurig. Hes one of the Founding Team members and hes been pivotal in our strategy to date. Barry . I went to your favorite coffee shop in ann arbor and asked them about carrying the product. They say coffee is like fine wine. And the idea is you would never add a vitamin pill to a fancy bordeaux, and similarly to a nice ethiopian single blend coffee. How do you respond to that . I think it is worth noting that 40 of people cant swallow pills or have difficulty doing that. This is more geared towards the plass who pass up the coffee and want to be smart. We all heard what brad had to say. Is the panel in or out . I was initially concerned with pricing and whether consumers would would pay upwards of 1 per serving to add on to their coffee expenditure but i think im okay with that because it is a premium product and it builds on the whole health and wellness trend. I like the idea that they could move into other products beyond just coffee and i do like the convenience factor that people could use it who arent really comfortable with pills. So im in. Kelly . My concern right now is id like to see more traction in getting into offices in other i want id like to see more traction so im out at the moment. I want a bottomup analysis. There are 20,000 coffee shops in the u. S. Can you sell the shops 1,000 wholesale a year . Thats 2 million a year revenue. I think this is not as big a market as we like to see and i think it is going to be a hard sell. So didnt do it for me. That sounds like an out. Okay. One in but two outs. But brad some good advice and good comments as well. Whats your reaction . Thanks for the feedback. It was great being on the show. Dont forget to smart your coffee. We can all be more smart in our daily life. Thanks to brad of vita perk. That is todays power pitch. How about you . Would you be in or out or vita perk . Tweet us your comments with the powerpitch. To find out more about that particular startup head to powerlunch. Cnbc. Com. Melissa, i dont know about putting dust in my coffee. I dont know that either. I like dummy vitamins personally. Golds under pressure falling to its lowest level since april 2010. Prices getting ready to close right now. Down by more than 1 . Across the precious metal complex, silver copper platinum all down just about a percent. To the bond market Rick Santelli is tracking all the action at the cme. Hi melissa lee. The big buzzword is the curves flattening this week so the fed is going to tighten. Listen, i get it. But taking a more macro view and it gets a whole lot more confusing. The the 2year chart of note yields theyre equal. Year to date of 10s. Basically 17 18 basis points higher in yield. Curves steeper than it was at the end of the last year though it has been flattening. If you look at a year to date of the dollar index, were up a lot. We settle around 90. Were getting close to 98. We all know why. The market potential is potentially were going to see a rate increase at a time when europe and china, their trade together most likely wont be as aggressive. Two charts we dont normally look at, dollar versus peso. Historic highs favor dollar. Last chart dollar versus south korean yuan. There is a lot of things going on with the dollar you should Pay Attention to. Rick santelli thanks to you. Europe continues to soar germanys dax almost 7 higher this month. Why investors are still piling into europe and where exactly is the money going. Plus General Electric higher on the back of its earnings. Has the Company Found the next big thing to fuel growth. Find out when power lunch comes right back. The mercedesbenz summer event is here. Now get the unmistakable thrill. And the incredible rush of the mercedesbenz youve always wanted. But you better get here fast. Yay, daddys here here you go, honey. Thank you. 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Check us out today to see how you can become one of them. Legalzoom. Legal help is here. Hello, everyone. Im sue herera and here is your cnbc news update this hour. The chattanooga gunman who killed four marines is believed to have visited the middle east between april and november of 2014. Investigators say they believe that he visited jordan and other countries in the region where he may have family. Former new york congressman Michael Grimm has been sentenced to eight months in prison for tax evasion. The Staten Island republican won reelection in november but resigned after pleading guilty. Despite the celebrations in tehran over the nuclear deal, chance of chants of death to america echoed during friday prayers in irans capital. The cleric saying irans resistance against the sanctions won the day. If saudis and arabians are for the deal, it must be good for iran. The Baltimore Harbor tunnel was closed for hours. Drivers stocked in both lanes of the tunnel as drivers picked up 20 bills. Cash was swirling around like confetti. I never end up in situations like that. Thats the cnbc news update this hour. Back to you. I hope they gave it back. I hope they gave it back too its probably all marked anyway. Very good point. Lets take a check on the markets right now. The dow and s p are mixed right now on the dow. The real drags are boeing because of the tanker charge as well as intel. The action is happening over here at the nasdaq. Nasdaq composite is up by. 5 right now but it is a record intraday high helped by the likes of facebook amazon and google which are all at new highs during the session. Lets head down to bob pisani at the New York Stock Exchange tracking action there. Not a very good day outside of tech and biotechs. 31 declining to advancing stocks. If you look at the leadership google and facebook is really masking an awful lot of weakness so tech is up but thats not a very good representation. Most tech stocks are down today. It is google and facebook kind of drag things up they have such big valuations at this point. There is a lot of money hiding out in the xlk and ibb right now. Theyre Holding Things up. This is the first day weve seen a crack in financials. Sun trust had decent earnings but these stocks normally sell off going into earnings season. Were starting to see that finally happening. The kre, this normally goes down. This week it hasnt. Held up pretty well. Now well probably see next couple days of weakness here. Honeywell illustrates a lot of the problems the big industrials have. Earnings good but revenues are core even though organic sales are good. Part of the problem is due to the currency issues that are out there. Honeywell did raise the low end of its guidance up 1. 75 . No Revenue Growth and a problem with the currency is really weighing on the multinationals. Bad combination. General electric beating imts is it morning, stock up just under 1 right now outperforming the broader markets. Mary thompson is on the case. The earnings news coming amid a restructuring into generating 90 of ges operating operates by its industrial arm by 2018. Heres Ceo Jeff Immelt on the cost. In all, were confidence enough in our performance to raise the low end of our range for industrial guidance to 1. 13 to 1. 20 eps. The 3 cent increase to the low end of the outlook followed a very muddy Second Quarter. The if irm is in the midst of selling 200 billion worth of assets from its finance arm so earnings of 31 cents a share reflect profits from the Financial Assets ge plans to keep as well as earnings from its industrial businesses like jet engines and health care. Those numbers beating estimates thanks to a 5 gain in Industrial Products during the quarter. Revenue from industrials and the future finance businesses 29. 7 billion billion. 5 of ges 7 units reported improved revenue. Only health care oil and gas posting a decline. On the call immelt saying two key deals, 17 billion purchases of french power giant as well as the sale of its appliance business to electrolux for 3. 3 billion are both expected to close by the end of the year. Both of these deals have been delayed because of government reviews. One other thing to note the firms backlog hit record numbers in the quarter while its Services Backlog hit 200 billion for the firsttime ever. Thank you, mary thompson. This was the scene on the streets of athens greece on wednesday, even before the parliament there voted yes to a new bailout deal that includes tough austerity measures. Today the German Parliament voted to back the deal. So far, all seems quiet in athens after that. I assume it is quiet in berlin where Steve Leisman was just last weekend. Steve, it has been a busy week in europe. An intreble week witheresting week. Janet yellen showing her deftness for politics. To beginning talks on a multibillion euro greek bailout package. The vote 439119. Not really close. 40 abstaining there. Locals told german lawmakers at a subtle dig at her finance minister that helping greece was not a matter of a timeout but avoiding chaos in europe. Her finance minister had called for a timeout from greece from the eurozone. Still major points of contention here but they are seeking to work themselves out. The imf insists the greek debt load be eased. But top officials telling me the imf would support other ideas to help ease greeces debt pain. The important thing is that greeces Debt Service Payments dont cripple the economy, that theyre consistent with a greece that recovers. Were open to the idea that the problem can be handled by stretching out the maturities providing long grace periods and low interest rates. Lipton added that he wants the greek Prime Minister tsipras to take more responsibility and ownership of the greek reforms that need to be enacted. Remember, tsipras said he warranted the parliament to adopt the package but said he didnt personally believe him. Watching greek banks on monday tyler, they are expected to open for limited transactions. We dont know exactly what that means. We, alas have to leave it there, Steve Leisman. Have a great weekend. Katy nixon is chief Investment Officer at Northern Trust management. Jeff kleintop joins us to talk about the weeks and months ahead. Katy, start with you. Weve been talking about the european markets a good bit today and how well theyve been performing in recent weeks. Are you guys adding money in europe . If so, why . If not, why not . Were really not adding to european equities at this point. We think the markets gotten a bid ahead of itself as fundamentals have failed to improve the a the same pace multiples have expanded. Valuations remain very high there. Judging from steves report on greece, this is a story that will stick with us for quite some time and that creates an additional layer of uncertainty around european equities. How about you, jeff . What do you say about europe . This a time to add there . Sit tight . Sell . What . Many investors have been on the sidelines as it relates to europe. Theyre very cautious about coming back to that marketplace. We think it is a good time. If youre underweight there, think about getting back in. Look, the purchasing Managers Index in europe a great indicator of overall activity has been rising since november. The whole issue around greece not really affecting that. Retail sales in europe rising to a pace we havent seen in 15 years. Economic activities looks good. Loan growth is picking up. Banks are doing very well. This quarter, Bank Earnings in europe are expected to be up 40 year over year. This is an environment you want some exposure to. Katie, you seem to be saying well, not so fast here. Talk to jeff about that. I mean your concern is that maybe investors have missed the moment to buy in. I mean certainly the market has advanced in anticipation of a lot of improvement in corporate fundamentals and Earnings Growth but we just havent seen that translate into Earnings Growth. It is interesting because there is headwinds and tailwinds. Right . We have a good tailwind for europe in terms of the weak euro improving their export ability. Bup but in the meantime we have drastically slowing Global Growth especially on the emerging markets. Some of their major customers are facing a slowdown. Youre fairly constructive on the u. S. Market katie. Jeff, let me turn to you and ask you the same question. What do you think about u. S. Stocks right now moving through to the end of the year . Some of the headwinds that we had been so preoccupied with like greece, seem to be abating. Thats true tyler. But it comes back to Earnings Growth. Thats why we see kind of a slow grind higher in the u. S. Equity markets, accompanied by higher volatility. Maybe even a bit more than we saw in the first half of this year as we deal with the number of these issues and the transition in earnings. Economic momentum in the u. S. Has not been improving as weve seen in europe. That means i think a bumpy ride as we look to the second half coupled with the potential for Rising Interest Rates from the fed. Let the record show that katie is nodding here in i assume, assent, agreement there. Go to powerlunch. Cnbc. Com right now to see what katie and jeff think are the biggest risks to the market. The market turmoil created by the chaos in greece. All of this fun flow data weve gotten from morningstar over the last month show more flows into the International Stock funds. Where is all that money going . A lot of it going towards europebased funds. Well tell you which ones next on power lunch. Keep it here. 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 . These two oil rigs look the same. Can you tell what makes them so different . Did you hear that sound . Of course you didnt. Youre not using ge Software Like the rig on the right. Its listening and learning how to prevent equipment failures, predict maintenance needs, and avoid problems before they happen. You dont even need a cerebral cortex to understand which is better. Now, two things that are exactly the same have never been more different. Ge software. Get connected. Get insights. Get optimized. It is a Great Southern day in the Northern Hemisphere but in australia it is a snow day. Even in the winter down under, they dont get a lot of snow but in queensland today they got several inches. That is where mandy drurys family is heading shortly. Really . Yes they are. Pack the snow boots. Theyre heading down there. The market turmoil being caused by developmentments ins in greece and china has not dampened the appetite for international shares. There is a bit of a lag. We know the developments have only happened in greece and china for the last couple of weeks but arguably theyve been around for a while. Morning star has fund flow data. Last month, june 22 billion of floats went into internationally oriented stock funds. 17 billion of that went into index funds and a lot of them had a particular focus on whats happening here with europe. Thats a big one. Meanwhile, 16 billion worth of withdrawals happened through u. S. Actively managed type funds. 6 billion though still went to u. S. Index funds. That kind of gives you an idea of where people are moving their money at least for the month of june. Our friends at cnbc pro took that morning star data and took a look at some of the best inflows we saw year to date. A lot of these are focused and hedged Exchange Traded funds. 14 billion worth in the wisdom tree europe, hedges equity. The second one, the Deutsche Bank xtrackers msci eafe hedged fund. Thats a lot of jargon for stocks betting on the europa europacific asia region. Ishares. And wisdom tree japan. These are some of the best inflow drivers for Exchange Traded funds. All of these funds, at least most of them here on the top four, have hedged currency exposure, something to keep an eye on for sure. Interesting take here from our friends over at cnbc pro. That story is up on cnbc pro. You can read it on powerlunch. Cnbc. Com. Two of americas biggest cities both with big uber news today. Kate rogers has the details. Lets kick it off in new york city where it is getting ugly between uber and mayor bill de blasio over a bill that would tax the growth of ride hailing startups in the city. This while the impact on the environment, Traffic Congestion and more are studied by the city and groups including the taxi and Limousine Commission through september 2016. These fvehicles are up. The app prompts users to email the mayor and city council in opposition of the bill. An uber sports person told cnbc by email the real story is campaign contributions, not congestion. Alluding to the tlcs influence over the mayors office. Some good news late thursday in los angeles, airport officials agreed to allow Ride Hailing Companies to pick up travelers. This is the largest airport in the country to allow this so far. Previously the companies could only drop off passengers. This could take effect in late august but must first be approved by the citys attorneys. Deal requires a 4 airport fee. Uber didnt respond to our request for comment but in a statement, lift told cnbc it looks forward to beginning operations at lax soon. The Weekend Getaway plans for the 1 thrown into utter chaos. Thanks to president obamas trip to new york city later today. Apparently, all private jets and helicopters grounded for the duration of his stay which means folks who are accustomed to zipping out to the hamptons via a chopper, this extravagant form of transportation, we are talking about 3,000 one way, theyre now going to have to sit in traffic on the l. I. E. Or on a commuter train just like the ret rest of us. But have no fear all you 1 ers definitely trying to get on to your second beach, third house, the nofly bubble only lasts from 6 00 p. M. Tonight to tomorrow afternoon. But thats the heart of it folks, right there. Melissa. The smallest violin in the world is playing, tyler. No pity. Shares of tesla near session highs. Big announcement coming from the company at 2 00 p. M. Were 13 minutes away from that. Well have it. Announcer coming up improffering the shape of intimate apparel. As a Technology Investor before. Escaping the cube next. 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 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 . There is an allnew american greed tonight on cnbc at 10 00. A former irs agentturnedaccountant is accused of running a 13 million fraud. He spent big with his clients money. San diegos cpa Stephen Martinez has seen millions of dollars flow through his clients ledgers as he prepares their tax returns. And he decides he wants his unfair share. He had some ownerships in an airplane. He had about a 6,000plus square foot house in ramona on almost four acres. The pool . That was something that you would expect to see at a lavish resort in las vegas. It had a swimup bar. It had a beach. It had these ornate designs that were kind of carved into the base of the pool. When the feds come after him martinez plots to murder the people who know too much. Dont miss an allnew american greed tonight 10 00 p. M. Eastern and pacific right here on cnbc. See this edition of escaping the cube. I was basically ready to take the biggest risk of my life. Hi im michelle founder of true i used to work in finance. My first job was at pricewaterhouse. I moved from toronto to seattle and i joined microsoft. Then i actually moved to boston was in the private equity world. I realized i actually wanted to stand on my own two feet and create something that was unique uniquely mine so i quit my job as a big capital venturist. What happens was i had to replace my bra and i tried on about 20 bras and the trial and error process all the while thinking, wow, every single bra makes me look like the worst i could possibly look. Why doesnt somebody do something about this . I realized maybe i could be the person to do something about it. My thinking was that how else could you pool together hundreds of millions of data points about a womans body and her life. The best way to do that is through the internet. In the u. S. Market alone it is a 12 billion opportunity. Globally it is 32 billion of bras being sold every year. So at the beginning i was actually quite undecided if i was going to sell some go it alone or actually raise money. When an investor said to me the minute you decide to build a brand to reach millions of women, you maded decision to raise money. We launched the company as a result three months later. We presented a quiz that women can answer. We use that information every day around feeding it into the development of better bras for women. We actually discovered over 6,000 different body types and boiled it down to these eight shape combinations. The day we launched our business the server started breaking out the very first day. We ran out of bras to ship because we had so much demand coming in. Theres actually no question that i made more money doing what i did before. I would say now the upside is greater around the feeling of being able to make a difference in every single womans life is pretty cool. If youve taken a risk changed careers and emerged triumphant, tell us about it. This yearss power point, shares of google skyrocketed after reporting earnings last night. The scott has retreated back below 700. Bakerhughes rig numbers shows the u. S. Lost six rigs from last week. The u. S. Oil rig count is 1,000 lower now than it was a year ago. We also learned that Single Family Home Construction remains a very low pace but construction of multifamily homes is booming big time. The debate is back. Where is your money best . With active funds or passive funds . Thats straight ahead. Plus whats behind the spike in lobster prices . Were heading live to the coast of maine to find out. Back in two minutes. 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. By the time Police Arrive on a crime scene they could have little to go on. A vague description. A single piece of evidence. A partial plate number. With an app from ibm officers can now access over a billion police documents to find hidden connections and identify potential suspects. Ibm analytics helps one hundred thousand officers work smarter every day. 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. 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. All right, america. Heres your friday lineup. We will start with tesla. Will they unveil any big new plans on their Conference Call . It starts in just moments and we are all over it. Plus housing stays hot. Yes. But there is one surprising thing that could derail the boom. Well tell you what that is ahead. And oil set to end the week weak and we have got an incredible stat on oil stocks that you have got to here. If youre long oil it is not the kind you want. Ill see you melissa. Another reminder how dangerous it can be to be a window washer. The supporter collapsed in jacksonville yesterday during a storm. The workers were left dangling before jacksonville fire and rescue got to the scene to scoop them up. Thankfully, everybody is okay. The debate is back. Where is your money best cared for . Active funds or passive funds . Jeff cox is working on that for dotcom today. See his full piece on power lunch. Lunch. Cnbc. Com. Just as heem have discovered the virtues of indexes and continue to pile money in active guys are having a great run. Its the best year that theyve had since the financial crisis. We know active managers were having such a large time in this lowvolatility environment making it tough for stock pickers to find any opportunities in there. This year about half of active managers are beating their benchmarks which is pretty good compared to last year which was less than 20 . If you look at the money flows though, investors are still betting on the index funds. In fact its been almost a 11 relationship. About 156 billion mr. In 156 billion going into actively managed funds, 150 billion going into passively managed funds. Over the long term. There is one thing you cannot over with about index funds and that is that they are very efficient from a tax standpoint and they are very low expense. Absolutely. Thats whats hurting the active managers because they dont they cant offer those things they think as you see things go on, you watch those returns. Theyre probably not going to be able to keep up. Interesting numbers. Have a great weekend. For more on the active versus passive funds, go to powerlunch. Cnbc. Com. Brian, take it away. It is now 2 00 on wall street, 11 00 a. M. In malibu california. The dow down now 72 points. Weve been losing a little steam in the market. Were off 72 and crude oil is also down. They could be related. Crude oil is off 42 cents to 50. 49. I am brian sullivan. Melissa doing double duty at the nasdaq. Happy friday, everyone. We have a lot more on oil, google, the market but we begin with tesla. Shares are higher today. Now up 23 this year. But tesla might be making a big announcement this hour. Phil lebeau monitoring teslas Conference Call. Phil . Brian, we know this Conference Call will involve the model s, what type of Product Announcement surrounding the models. Remains to be seen. We have dialed in to the Conference Call. Weve been told by operators the call will begin shortly. We know from elon musk tweeting out this morning, this will involve the models. This is the primary vehicle. Sales the majority of those 55 sales this year majority will be that model. Thats 45,000 of those. As soon as we have any news well let you know. Interesting timing phil. Just because theyre going into earnings season. So it is interesting for them to have this Conference Call ahead of that report. Do you think that it is something financial or Something Else . No. I dont think it is financial. I think a couple of things are possible here. One being that a lot of the auto pilot features that theyve been talking about over the last three to four months we know that theyre close to pushing the software or software over the air Software Update that will push that into existing vehicles and it may be that theyre saying we have tested it, we think its ready and were going to push it out to models owners. Thats one possibility regarding the possible announcement that well hear in a matter of minutes. Phil lebeau thanks. Well check back in with you a little bit later on. Oil sliding to cloels the week barely holding on to 50 a barrel. Good afternoon, melissa. 507 50. 52 is where the august contract is right now. We were bouncing between positive and negative territory earlier today. The intraday low, 50. 14, we havent seen since april 10. If we settle lower it will be the i third weekly loss for crude consecutive losses be with that is. Recount numbers out a little bit earlier, we lost seven oil rigs. That was a little supportive of prices but not enough to take us into positive territory. Well see august wti futures expire on tuesday so expect some volatility going into that. Traders also telling me theyre expecting weakness in the earlier part of the week. If we dont reach that 50 mark today doesnt look like we will into the close potentially we could see it next week. Obviously thats a very key level of support and psychological level. Quick check on gas prices 2. 76 is the National Average according to aaa. Back to you. Jackie, thank you. As with oil, so too, have gone the oil stocks. Though you may know its been bad for the group over the past month, you may not realize just how bad it has been. Listen to this. Of the 220 or so oil and gas related stocks that i monitor, only 21 are higher over the past month but almost all of those that are up are either refiners theyre almost all up because oils gone down and a couple of pipeline companies. In fact, get this there are only three nonrefinery or pipelinerelated stocks higher out of 220 in the past 30 days. They are canada sun corp. Energy up a whopping 210 . Overseas Shipholding Group and San Juan Basin royalty trust. None of the ents are up. Mike hunter oil has gone down. The stocks have been walloped. Are you out there recommending these names to your clients . If you liked them 10 ago you got to love them now. Thats true. Hey, brian. Thanks for having me. You look back at some price charts here. I remember thinking a couple months back, dang we missed it. If you look back at december 15th where these stocks bottomed out the first time then they absolutely ripped back. Pretty common to see 50 moves if not better than that. Now i think you are getting another chance. A lot of these names are retesting those december 15th lows. So were actually pretty encouraged where were standing right now. Im looking at companies, 10 billion and 12 billion market Cap Companies. Not 500 million whildildcatters. These are Major Companies that have lost 15 of their value in 30 days. Is there a bit of a capitulation story among video offers going on or is it just oils weak snes . Snesweakness . I do think going from 60 down to 50 is your first problem. I almost think we need a sacrificial lamb here in the ent space. The message has been almost too good from these Oil Companies that at 50 were not completely losing our shirts. Were drilling faster were drilling bigger wells, costs have come down. And that really has led investors to think, okay maybe 50 isnt the right stopping point, we got to go lower than that. Ill jump in on that. When you say sacrificial lamb i would assume that tell me if im wrong that you are referring to companies that are going to go away theyre going to file for bankruptcy or dissolve. Im going to throw out a couple names. Im not highlighting these as names that may go away. I have no idea. Just giving you data. Normally we dont talk about stocks unless they have a 500 million market cap. These used to. But if i look at Comstock Resources and goodrich petroleum, down 92 and 94 over the past 12 months. When i look at those kinds of companies, i think, wow, thats a problem. You said this a couple weeks ago. That it is all about the Balance Sheet now. Those are companies there where the leverage has just been and is poised to be a little bit out of control. Relative to 50 type world. Id even take it one step beyond that. I think you need one of these larger Cap Companies to say, 50 oil, our business does not work and for one of those to go into free fall and not to be supported by the market, and if thats the point where you see these things turn around. What makes me i guess from the journalistic side these ceos have been quiet. We call them all the time and you get one or two that will gustily come on the air but most of them keep their head down. Mike kelly, Global Securities have a good weekend. Those stock declines are sinking. Our exclusive houston power city index. The houston pci, down an eyepopping 11. 5 over just the past 90 days. Some are the worst are Industry Leaders apache occidental halliburton. The dow in that same amount of time is up 1. 5 . Ouch. A big jump for Housing Starts in june up 9. 8 . Building permits also rising to an eightyear high. Diana, the demand for all this housing, we need workers to build the houses. Right . Reporter yeah, we absolutely do. But we dont have enough of them. Single family Home Builders in fact are the hardest hit. Single family starts were down in june. A builder that i just interviewed in dallas blames lack of labor. He said he is taking a beating. Unemployment in the Construction Industry fell in june to the lowest level since 2001. This is because contractors are having a hard time finding enough qualified workers to meet the growing demand. The National Association of Home Builders calls labor shortages nationwide surprisingly high given the fact that Home Building has barely recovered from its 2008 crash. The shortage is now substantially higher than it was at the peak of the last housing boom. Thats an annual start from averaging around 2 million versus the current rate of 1 million million. Now the last time builders reported labor shortages were as widespread as now was just before 2001 during a prolonged period of strong gdp growth with overall unemployment as low as 4 . I spoke to another builder in columbia, South Carolina this morning. He says hes splitting crews trying to frame houses. Says a lot of workers never came back after crash but he also cites immigration laws and says South Carolina lost twothirds of its hispanic and south American Population and that, he says has a profound effect on Home Construction. More of his story is up now on cnbc. Com. I called up a guy that builds Residential Homes in the st. Louis area as well just a private company. He mirrored the same things youre just saying. He said if i need something thats going to break rocks and sweep a floor, i can do it. Skilled labor isnt there. Particularly carpenters. He called the Carpenters Hall in st. Louis. They didnt have anybody out there. I asked him why does he think that is. Listen. 2008 was telephone years ago. Seems like yesterday but its been a while. He said people are either working or theyve gotten out of the industry and theyve lost their skills and a lot of people say, listen the industrys tough. They dont want to face unemployment again. They dont want to work in the rain on a roof when its cold outside. Theyve gone on to other jobs. Other careers. Brian steelkill is the key word. The dallas builder said he actually thinks the quality of the loems that hehomes that hes able to put up now is not nearly as good as it was ten years ago because the workers dont have enough skills to do it the way they were doing it ten years ago. The guy i talked to reiterated the need for vocational education, trades trades, trades. What is on the menu for the rest of this friday hour . Lobster. Literally. Why lobster prices are so dang high this season. Well ask a maine lobsterman whose familys been in the business for more than 100 years. We all know china uses a lot of stuff. Oil, copper gold. Should we be worried about what china is doing in africa . Google, a huge day. But if you missed out on the run, is there still an opportunity to buy google at this price . Were watching shares of tesla. That press conference Conference Call is under way right now. Stock has given up its highs of the session. Phil lebeau lass the latest on tesla. Phil whats new . Reporter melissa, three announcements have been made by elon musk on this Conference Call. All of these are fairly technical here but if you are a models fan you will be interested. They offering an upgraded version of the highest range available for the models going from 85 kilowatt hours up to 90 kilowatt hours. That adds 15 miles of range to that madles. You can go up to 300 miles on a charge at highway driving at 65 Miles Per Hour according to elon musk. The second one is that the 70 kilowatt rear wheel drive models the price is being dropped down to 75,000, about 5,000 less than where it was. The allwheel drive version is at. I think this is the one that will probably get the most attention. Theyve been doing some tweaking with the highperformance version of the models. Remember the insane mode . Now theyre coming out with one that can go 0 to 60 even faster. It will be known as the ludicrous mode. 0 to 60 in 2. 8 seconds. Those are the three Product Announcements. Real quick, he also mentioned modelx and the Third Generation model 3 coming out down the road. No change in plans or guidance. Modelx still coming late this fall, early this winter. This year, loufr. Then the model 3 in to you. Whats your guess on whether or not this increases the total Addressable Market for tesla and or increases sales of the models . Maybe at the edge a little bit. I really think that im not sure that this is going to prompt somebody who was not thinking about a models to say, you know what . Thats it. Im going to go buy one now. I think if you were thinking about it, this gives you a few more options but i dont think it is going to expand the pie, so to speak. Lets forget that for a second, phil. I want to go back to something you just said. Did you just say that the tesla models can now go 0 to 60 in 2b. 82b 2. 8 seconds . That is the ludicrous mode. A fourdoor sedan, the kids in the back, youre haulin. Thats fast. Thats wow. It is fast. I think it was 2. 9 seconds, maybe 3. 0 seconds regarding insane mode. If youve been in the car for insane mode, youre like wow. So ill be interested to see what ludicrous mode is like. Again, thats only for the highperformance version of the models. At this point i should point out that a top fuel dragster can go 0 to 100 in. 8 seconds but thats not the same thing. No. Ludicrous is spelled in the conventional english webster dictionary kind of way. Right . Not the rapper. They have dmx car . Well let you jump back on to the Conference Call. It is worth taking a look at the intraday move in teslas stock because about after an hour prior to this Conference Call getting under way, tesla shares hit an intraday high up 3. 2 . Its backed off and is higher still by 1. 1 but well off the intraday session highs. Watching google meanwhile very closely. The big reason why the nasdaq has hit an intraday record. The stock hitting alltime highs after hitting earnings of top analyst expectations. Mark mahaney from rbc joins us now. In your note you said this was a rare, clean quarter and that while you like the margin stabilization, it is only two quarters now and that does not make a trend. Why has the narrative around google changed seemingly overnight . Well, two things. One is the market needed to be reminded that this is actually a very consistent revenue grower but particular in search they went out of their way to say that search growth was robust. The narrative has been that search is decelerating rapidly for google. We thought that was wrong but it was hard to get evidence one way or the other. They gave qualitative evidence last night. On the margin side it is only two quarters but this is the first time in five years that margins are actually up year over year for google. Thats an inflection point. You have a new cfo who part of the street knows pretty well and has got a reputation for knowing how to manage expenses. There is good reason to hope this trend will continue. You raise your price target to 110 off the back of this Earnings Report. Does that back in a Capital Allocation plan of some sort . Is there disappointment if there is no Capital Allocation . I think there is a rerating that could come up in google stock if they return cash to shareholders. I think that was part of the apple story the last couple of years. Look, google right now is trading at around 20 times next years earnings. They start to i mean if they start to return cash to shareholders, i think thats more of a 2016 event rather than this year. If they do that you could see that multiple go up by a couple of points. Thats a path to an 800 even 900 stock. Whats the read through the extrapolation to a facebook . Is there always going to be an embedded premium in should facebook be rerated or should google so it trades along the same multiple or what sort of metric you want to use as facebook . Well, look at these on a p ebay sis. Really adjust for the groit. It is the growth looks like it is improving at google but youre probably topping out around 20 year over year growth. The question is the market will pay 20 maybe 25 max for growth like that. Switch over to facebook. Facebooks giving you 35 40 maybe even higher Earnings Growth than that and probably for the next two or three years. Youll have a pretty large multiple gap. Read through fundamentally for facebook, what google is saying their particularly ad revenue is going strong particularly youtube. Hard to see facebook not benefiting from that. It is the weakness in the online upfronts. These two are the best beneficiaries of this trend. As everyone moves to mobile maybe using traditional Google Search less. Correct . You know thats the widespread market assumption. Ill take the other side of that. I think if you give people the search functionality in the device that you carry around with you 24 7 youll start using google more. Because my concern is if that does occur, right . That may be viewed as a negative but they also now have more than half the worlds market share on smartphone platforms with android. How does that balance out long term . So i think the real key thing to keep focused on here is i think at the end, mobile probably increased googles overall share of search queries. The real challenge has been monitorization. One thing that caused that stock to pick up even more in the aftermarket last night were the cfos comments theyre really closing the gap between desktop and mobile modification. Not just that desktop is coming down, but mobile is coming up. Thats been a fiveyear bull story that we havent seen play out yet on google. That tells you the Revenue Growth rate is more sustainable. Mark real pleasure. Thank you for coming on. We got to get right now to eamon javers with a news alert. Ucla health is saying its been the victim of what it calls a criminal cyber attack here potentially affecting up to 4. 5 million individuals. Theyre saying that this cyber attack they first detected back in october but it wasnt until may that they realized the attackers may have accessed personal information of millions of their customers. Theyre saying that theres no indication now that that data actually was stolen but they cant rule it out. So ucla health here is saying that theyre going to contact those people with advice on what they should do. Guys . Eamon javers thank you very much. As we head to break here two stocks that we have to look at. One we just talked about. One we talked about moments ago. First off, google. That is not a misprint. If you own google youre just tuning in to cnbc maybe you live in guam you just woke up google is up 16 98 a share is the gain. The price well call it an even 700. Google reclaiming its spot as the secondbiggest company in the world. Also, tesla. We just talked about it. Amounsnnouncement theyre lowering the price of the 700 kilowatt car. And a new version called the ludicrous version. That stock up 5 a share to 272. Back after this. 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. 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 . Welcome back to power lunch. Im phil lebeau. Were on the tesla Conference Call. Elon musk answering questions about three product upgrades he Just Announced for the models including the ludicrous mode which will be for the highperformance version of the models which will allow the vehicle to go from 0 to 60 in 2. 8 seconds. You might be saying to yourself well, listen, we already get the insane mode. This kind of makes sense, you are hegoing even faster. He says ludicrous mode will be offered for the upcoming modelx suv. It will be slightly slower 0 to 60 times because it is a heavier vehicle bauut he expects the 0 to 60 time in the modelx, 3. 2 seconds. Not bad. At least that phone is not rotary it could be. Give me klondike 682. Tesla shares higher by 2. 4 climbing a little bit as elon musk is starting to answer some questions from the crowd there. Musk knows how to get attention with that 2. 8 number. Copper again falling today. A little bit concerningly now down 10 in the past three months. A lot of the reason uncertainty about chinas economy and its demand for copper. Klein is the worlds biggest consumer of copper. A global economist, author and cnbc contributor, winner take all, chinas race for resources and what it means for the world. She spends a lots of time looking at chinas impact from the continent of africa because over the last decade china has aggressively been buying up properties and mine. How you doing . Thanks for joining us on power lunch. Well get right into it here. This has been going on now for a number of years. Youve called our attention to it for a long time. Is there any sign that chinas thirst and quest for Global Resources in africa is slowing at all . So first of all, i dont think it is an africa issue. This is about Global Demand and specifically about what chinas interests are. We know that theyre the largest foreign direct investor in australia. They have large interests across south america and so i think to isolate africa as a sort of unique situation is to miss the broader point. I think that people are right to be concerned about weaknesses in chinas Growth Prospects. Weve just seen them come out with a 7 print but the imf has suggested that it could be as low as 6. 8 and possibly declining throughout the year. But i think there is another side of the story which is that impairments in the mining industry, gold iron ore and copper for 2014 were about 100 billion. So you could argue that a lot of assets will be getting cheap, possibly cheaper and therefore the chinese interests could start to increase as well. Sit tight for one second. Well come right back to you but i got to get to dom chu with a news alert. The double line total return fund the Flagship Fund for Jeffrey Gundlach dow jones says morning star has not ratable designation for the second Straight Year for the double line total return fund Jeffrey Gundlachs flagship mutual fund. Dow jones says the review cites a lack of answers from gundlach and his team about due diligence, also about risk and succession planning. Interestingly enough one of the more popular highprofile bond funds, a 46 billion, 47 billion bond fund run by Jeffrey Gundlach for the second Straight Year has a notratable designation from morning star. Of course Jeffrey Gundlach has been sparring a bit with morning star. It does has five stars. Objective is five stars based ond performance. It has the star rating theyre known for but theyre unable to rate the essence the intangibles aspect. Yes. The perhaps more nuanced aspects of the fund outside of these straight numbers performance things like that. Which is why all those issues about Risk Management protocol, sucks session plan succession planning plays into that part of the rating. Okay. Lets get back to this topic. We look at this as a negative chinas taking everybodys stuff and taking it back to china. Is there a positive . Not australia but some of the countries that maybe are not as high socioeconomically, is there a benefit at all to what chinas doing building out infrastructure while doing it . Yeah, absolutely. Its quite obviously actually. Theres clear symbiosis. On one hand china neepdz the resources to power their economic growth. On the other hand many of the emerging economies, south america, africa and even across south asia have 60 to 70 of their population under the age of 25. They need jobs infrastructure and a trade. It is an obvious trade as far as im concerned to be engaging in china. I dont understand the skepticism and eyebrow raising that sometimes comes with chinas expansion. I want you to put on your economist hat. You talked about maybe going down to 6. 8 growth. We in america uk 6. 8 would be fantastic. Would would a of. 86. 8 from from china really mean to the economy . You want to grow at least 7 a yooer in order to double capital incomes in one generation. Notion that china is slipping below that is worrying. The emerging markets is incredibly weak. The top ten emerging markets are growing now at around 3 4 with a recession forecast in brazil and also very significant weakness, 1 , 2 growth in places like south africa and the other brics. So there are real concerns about the Growth Prospects and i dont think looking at klein is the only story, though china is a big contributor to the commodity picture. All right author, global traveler, economist and other stuff too long i want put it in the interview. Well see you again soon. Thank you, take care. Once again, folks, your stock story of the day is google. If you owned it before this morning, congratulations. Get a cocktail get an ice cream cone. Something. The stock is soaring on earnings. Well try to take a look at the old crystal ball to figure out what stock whos releasing earnings next week can make be next weeks google. Trading nation. Plus, you ever wonder how we get some story ideas . One of our producers got a lobster roll. A small one was 17. So we wanted to know why was lobster prices so darn high this year . Well ask a guy with more than 100 years in his family. Hit experience in lobster fishing coming you up. Got solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywher up. 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. 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. 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. Hello, everyone. Im sue herera and here is your cnbc news update this hour. The Obama Administration trying to deepen Security Cooperation with israel. White house spokesman josh earnest saying a state Department Counterterrorism official met with his israeli counterparts just last week. Nations impacted by the downing of Malaysian Airlines flight 817 paid memory to the crash. 298 people were killed onboard. A plane propeller fell from the sky and crashed into a home in new york state. The wooden propeller smashed through the roof and lodged in the bedroom ceiling leaving blaster. Fortunately, no one was in the home at the time and perhaps even more surprisingly the pilot managed to land the plane safely. President Obama Meeting with emma ditlake in the oval office. She is the world war ii veteran whos now 110 years old. She was a private during the course of her service and her decorations include the Womens Army Corps service medal. Shes believed to be the oldest living world war ii veteran. Cant even imagine the things that she has seen in her life. I need to correct you on something, sue. You called that plane a prop plane. Clearly it wasnt. Well with be thats true because it lost the prop. It was a glider. It was a glider at the end of things. Sue, have a good weekend. You, too after googles surge today, whats does that mean. And oil looks like it is going to close up a couple of cents. Still though were up 2 cents to 50. 93 a barrel. All in all, weak to date down 3. 5 . This marks the 11th straight decline for the S P Energy Sector stocks tap. Thats the most weve ever seen in a row since our day today began in 1989. Melissa, you have some stats on the nasdaq as well. Yeah. We hit a fresh intraday record high on the nasdaq. 5,202. 08. Just about a half a point lower than that. Google a big part of the move higher in todays session though it is off its session highs. What is at session highs right now, shares of fasebook. Bring in the trading nation team. Stacey gilbert and gina sanchez. Gina were not going to get another google like move next week most likely. This is stunning move. But is there any name out there reporting next week that you think, okay, has a good chance of surprising to the up side . Look. Im going to look beyond apple because weve already beaten that horse to death and im going to look for something a little spicier, though maybe it doesnt have as much potential. I still think it is worth looking at. Thats. Poet chipotle mexican grill. Revenues are up and costs are down. Ive heard there is a lot of concern around declining restaurant traffic if general but theyre really appealing to the sensibility and its trendiness is really trendy, for lack of a better word. So i actually think that that trend actually helps chipotle. What names are mentions traders getting excited about based on what you are seeing in the Options Market . What were really seeing here, a stock that i think has the potential to have a sizable move next week is amazon. From an options perspective, it is pricing in around a 10 move. Compared to the last eight quarters, thats probably in line compared to the last four quarters the average moves been around 11. 5 . It is slightly less than what weve seen over the last four quarters. Obviously this 10 implied move can be up or down. Theres not a real pound the table sentiment bullish or bearish. The sentiment is just that amazon shares have the potential to move at least 10 by next weeks Earnings Report. One other point, were talking about the comparison to google. Obviously part of the optimism in google shares price return today is the fact that they cut costs or they have lower opex. I couldnt say what the likelihood is theyll announce any cost cutting measures but i have to imagine if they did something similar to google you could see a similar size type move you are seeing with google today. Were watching amazon chipotle. Gina, stacey thank you both. Go to trading nation dot c. Well ask our expert panel about what they heard from teslas Conference Call after the break. Lobster prices this summer are way up. 1 to 2 a pound on average but that may all change in the next few weeks. Were going to the coast of maine to find out way. Thats straight ahead on power lunch. When youre living with diabetes steady is exciting. Only glucerna has carbsteady clinically proven to help minimize blood sugar spikes. So you stay steady ahead. Are you moving forward fast enough . Everywhere you look, it strategy is now business strategy. And a partnership with hp can help you accelerate down a path created by people, technology and ideas. To move your company from what it is now. To what it needs to become. Shares of tesla trading higher today. The Company Holding a Conference Call earlier this hour announcing it is lowering the price of one of its models. Also, it is introducing a new faster speed called ludicrous. James albertij and drew kupps. Between the ludicrous mode and the new battery pack will this move the needle at all whether it comes to sales . With every tesla announcement it is twoparts marketing and onepart tesla analysis. As a car geek i heard a lower accessible price point now to get into a tesla. As an analyst i heard they are sticking true to their word. The density and chemistry of the battery is improving and i heard 300 miles of range. We have to take stock in the fact that they are meeting their targets and that unto itself is a catalyst. This removal of this risk that theyre not going to meet targets. Think that often gets overlooked. Drew, what do you like about the stock at this point most . Is it the car story or the Energy Storage story . What type of company are you invested in this the long term . I think what were invested in, what i like about the stock today and yesterday and probably tomorrow is by the way, this data point today is perfectly reaffirming of this view. Its the pace of change. This is a dynamic story and this is a company that just keeps raising the bar on the competition. We can say wouldnt gm have liked to add 15 miles of range to the 38 that they offer on the volt . I mean that kind of puts it into perspective. Just how much the advantages and its in a dynamic perspective. So next month and next month another 15 miles, another 5,000 the competitive barriers are really substantial here. James, when you look at the stock, youre very bullish. Youve got a 400 price target on the stock. When it comes to increasing the range, increasing the speed, these technological advances how do you see them being implemented in future models, whether it be the modelx which elon talked about briefly and the speed and having a ludicrous mode on the x, but also the gen 3. I think the pace of advancement here is prudent. They dont want to move too quickly. Other manufacturers have made big mistakes by moving too quickly. To the point of having the 90 kilowatt battery, were focused on the speed. Car geek im focused on 0 to 60 times. But it is about eating away at that 10 headwind that already comes up from the modelx being bigger and bulkier. Theyre basically telling us theyll be able to maintain models rain in the model. X given some of the advancement in battery and chemistry and so forth. I love the pace. I think the model 3 is going to be an absolute hit. Keep in mind theyre going to be on some version, sixth or seventh generation battery chemistry development. Whatever their infotainment model will be on thats six years ahead of the competition once the model 3 comes out. Thats an incredible barier to entry, i dont care if youre audi or anyone. James, drew appreciate it. A lobster dinner has gotten way more expensive this year than last. Well go live to the coast of maine to talk to some guys in the lobster business to find out why were paying so much more this year than last. 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 . If you like to enjoy lobster, you probabley noticed lobster prices have gone up an average of 1 to 2 a pound since last year. Blame this years vicious new england winter. The waters are so cold they are molting later. Some have the harvest down about 40 overall from last year. Gary has been in the business a long time. His family more an century and they join us from scarborough, maine. Thank you very much for joining us. We know last year the price was low. How severe is the price hike this year . I dont think its too severe. I kind of enjoy it you know. To go out costs me more and more every year to go because of fuel and bait. The last few years has been a struggle. I enjoy seeing the price go up and the market getting better. Market is getting better. You are obviously holding, i assume that is not a pet. That would be up for market some time soon here. Oh yeah. How has it changed from last year when you had these incredibly low prices . I think last year the price increases started. They f good ways to ship lobsters to china and asia market. Europe has been hot. They progressed in the processing plants and processing sector and found many different ways to put lobsters into it. Gary you are a lobsterman. How international are you now . Is that a big part of your business . Thats all vinnys work there. You are doing the hard work. Yes, i am. Ill totally agree with you there. Its just something ive done all my life. Its not hard just a way of life. How about this . We talk about climate change. How has it been dealing with these extreme changes . Youve got very cold water, then last year you had very warm water which is great for you guys but bad for pricing. Now very cold water. How has that side of the business changed for a guy thats out on the water . You have to change your strategy a little bit and try fishing in different areas where you normally wouldnt. You just spread out and try different things. Do your best. Thats all you can do. Different traps, different bait. Im no expert but deeper water, as well. Maybe more hazard there. What can our viewers of cnbc and Restaurant Owners watching this program expect . Are lobster prices just going to keep climbing the next number of months . I think lobsters will stay strong. This is a Strong Economy in a lot of places. We are just a small speck here in the state of maine on it. When the lobster market is hot and going on overseas and different areas, its a real classic supply and demand. Demand is hot right now. Good night to hear demand is hot. Do you notice any economic correlation . Ironically it was served to prisoners 150 years ago. Nobody wanted it. Now its a delicacy. Do you sense the economy improving . In some ways there is a little less lobster sold than the last few months because the prices are a little bit higher but thats only in the state of maine. I think china and those places are pulling heavy on the supply we have here in the state of maine. Doing the hard work. We appreciate it. Enjoy the lobster and have a great summer. Thank you. You, too. Take care. Love it. It is a stock that is up 115 this year. No. It is not a lobster. It is also up 10 this week alone. It happens to be our stock of the week. At ally bank no branches equals great rates. Its a fact. Kind of like shopping hungry equals overshopping. If you qualify for a sittinghams card today i can offer you no interest for 24 months. Thanks to the tools and help at experian. Com, i know i have an 812 fico score, so i definitely qualify. So what else can you give me . Same day delivery. The ottoman . Thank you. Fico scores are used in 90 of credit decisions. So get your credit swagger on. Go to experian. Com become a member of experian credit tracker and take charge of your score. 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 . 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. 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. Are week we love to do stocks of the week. My is ambarella. For the year up 117 . This past week its customer gopro got an upgreatade ahead of its Earnings Report. The First Time Ever ambarella will report 10 of revenues come from drone. If you like the drone story, take a look at ambarella because drones are a huge driver of growth. My stock is microsoft. Apple is the number one performer on the dow this week. Microsoft the second. Apple gets all the love. I was surprised to look down at my screens and see microsoft up more than 4 this week. You talk to developers and read some of these blogs and windows 10 as well as their Virtual Reality product actually getting some deep respect in the market. Microsoft is my stock of the week. All right. That is a good one. We should note in terms of netflix and google big breakouts. Google higher this todays session. Tonight on fast money well have a top technician to explain why he could see a historic move in stocks. Thank you, take care. Thanks for watching. Get your power lunch to go. Closing bell starts right now. Welcome to closing bell im sara eisen in for kelly evans. Im bill griffeth. Tesla announcing options for the tesla model s. One he calls ludicrous mode. He had insane mode. Now a new battery pack. Well explain all that in a minute. Plus an analyst who says tesla is going to 335 a share. Its around