Transcripts For CNBC Power Lunch 20240622

We got three reporters covering it all there. Phil lebeau on the cars and the crash tests. Housing, diana olick and the economy, steve leisman. But we do start with phil and these new crash tests on the ford f150. Give us more details, phil. Mandy this is a mixed review from the Insurance Institute for highway safety. Look at the crash test video. The good news for ford and for f150 owners they tested two versions of the truck, the super crew version which is the most popular version, all good ratings across the board. Extended cab, four good ratings but one acceptable citing injuries to the driver. Ford says it is making changes in the extended cab for 2016 to ensure that it passes all of the safety tests. But heres the negative news in this review by the iihs. It has to do with the cost of repairing the aluminum panels on the f150. They say those repair costs could be 26 more than the old repairs against a steel panel version. They say that repairing aluminum is timelier or takes more time and is costlier. Its potentially a financial issue for people who choose an aluminum bodied vehicle over steel bodied one. They may end up having to pay slightly higher insurance rates because the day that would suggest that it is going to cost more to repair their vehicle when theyre in a crash. Ford says the iihs is wrong. In a statement, the company says when you look at the real world repair costs, not staged repair costs, for the 2015 f150, they are comparable to, or less than other fullsize pickups. In fact ford cites a firm a Third Party Firm that ford pays for their data from being 869 less expensive when you repair the new f150. Whether or not you buy iihs or fords claim on the repair costs, it is an interesting test, guys because this is the most popular vehicle in the United States. Guys . Very interesting. Im sure well be following it down the road as they say. Phil, thank you. To housing now. Despite rising home prices more homeowners are falling under water on their mortgages once again. Diana olick is live with that story in washington. Reporter tyler, youd think it would be getting better. Not worse. But there are still millions of u. S. Homeowners who are seriously under water on their mortgages. That is their home is worth at least 25 less than their mortgage. Now in q2 that number was 7. 44 million, up from 7. 34 million in q q1. Though it is down from 9 million a year ago accordsing to realtycollection. How can this be when home prices are rising . The realtors reported the median home price as a record high in june. S p case schiller this week still showed price gains accelerating slightly. But it depends on how you look at the prices. Realty track said they looked at estimated values of all homes, not just homes that sold. If you think about it homeowners with more equity are more likely to be the ones who decide to sell in this market to take advantage of that equity. Homeowners who are struggling to regain their equity are less likely to list. They probably cant. So much of the home price gains are also on the very low end of the market. Medium and higher priced homes not seeing those gains, nor are they seeing the tight supply issues that plague the lower end. Another report from zillow showed theres much more supply on the high end. Lower end, none at all. Thats what keeping these homeowners under water. Thank you, diana olick. We have a news alert in the bond market. 7year notes are up for auction. Rick santelli tracking the action there. Yesterdays 5years got an a from you. What about today . Its tlurshursday, friday eve. Maybe i am in a good mood. Ill give it a cminus. The end of 90 billion in supply finishes off with 29 billion 7years. A bit of a tail going on here. The bid side was 2. 015 on the one issue offered at. 01 so we tailed a bit. Aulg the other metrics are rather in line with an average read. Just a little light of 49. 1 on indirect which had been stellar for the 2 and 5year. Maybe Foreign Central Bank stepping up. Maybe it is the market action. Maybe the fed. 12 on directs is the auction average. 2. 021. Cminus. Supply out of the way. Well have today and tomorrow to finish digesting what has been a very interesting week in the markets. Back to you. Thank you, rick. Lets look at what the stock market is doing right now. Just a moment ago all three indices turned positive. Both the dow and s p are now slightly to the negative again but keep in mind were well off the lows. The dow started out the day with a drop of 110 points at the low. Lets see whether we can keep on clawing back to the up side. Wti is also moving higher. Weve seen recently we have been tracking whats going on in Energy Shares and the price of underlying crude. Tyler, over to you. We continue now with our triptick the fed says how we invest is data dependent. Today we got key data. What do the numbers say . The government reporting today more growth in the First Quarter than originally reported. Less growth than the market expected in the Second Quarter, leading to, put it all together a bit stronger growth in the first half. Here are the numbers. 2. 3 q2 against an estimate of 2. 7 . That coming in below. First quarter 2015 however revised higher. Now it is positive 0. 6 . Originally reported minus 2 . Add those two together the actual with the estimate you get 20 basis first half growth. Not as anemic as originally reported. The gdp report coming out with more inflation than initially thought. Many economists say the combination of stronger growth than originally forecast and more inflation looks to be nearly enough to seal the deal for september rate hike from the federal reserve. I think they want to go but i think if they do go theyre going to explain to the market very clearly that this is not the beginning of a very consistent rate hike cycle. Theyre going to be again a very datadependent. Lots more data to come for that data dependent fed before it meets in september. Another gdp revision. A couple of jobs reports. And inflation reports. I think the fed is going to be making up its mind tyler. Maybe until the last week or so. Steve, you were telling me earlier that there were also some other revisions going back a while. Does this relate to one anomalies or flaws that you pointed out, especially having to do with First Quarter numbers . Yes it does. They did their normal three Year Revision they get new data they tweak the data but they also looked at the quarterly data based on our reports and other Research Reports from economists. Start on your left. From 2012 to 2015 growth now. 2 lower over that period of time. But you see the First Quarter, a little bit stronger. They brought down the Third Quarter a lot. So a little bit more even growth. They still seem to have a problem in the First Quarter and the bureau of Economic Analysis put together the gdp. They say theyve only done phase one of a threepart review of how they calculate gdp. What should investors do right now given some of the conflicting data about spending housing and the economy . We have 1 trillion worth of advice now with richard madigan, chief Investment Officer with jpmorgan bank. Imagine i pam a private buyer, im sitting down on your nice couches and saying richard, give me your best advice. What do i do now . Buy stocks. Were very much focused in Global Markets this year. People were so against anything outside of the u. S. Last year. Its been so refreshing to see that balance come back whether europe, whether japan. We should probably talk a little bit about emerging market asia because there are some opportunities there, too. I think people are overthinking the dynamic of growth. Its slower. Valuations are high but not too bubbly. Most portfolio returns are going to be driven by equity markets. You say you prefer Global Equities to domestic equities. Both. A bigger discussion on that. U. S. Equities i think weve been very focused on mid caps. M a cycle has been incredibly constructive there, believe it or not, so you pause. 92 to 93 of the deal transactions are below half a billion dollars. Thats playing very nicely to that. Youve spoken an awful lot about the dollar strength. That plays into that theme as well. Sectors, i hate to kind of hit them again but they are the same ones everyone is focused on because of e. So tech is interesting. Health cares interesting. Consumer discretionary is interesting. Consumer discretionary hits an alltime intraday high. Part of it is managing your expectations. If you expect 20 between now and the end of the year you know that, tell me because i love to know that. Wouldnt we all. Yes, we would. But with regard to relative earnings were doing okay for earnings. We should be paid for earnings. Second quarter Earnings Growth for the s p, were up 11 . Thats energy. Were up 3 with energy coming into a market that expected those earnings to be down 3 to 4 . So the momentums there. Talking of momentum and talking of energy what would you be doing with that sector now . Energy weve actually stepped back from. I dont want to be too cute in the answer on this but its been incredibly difficult to have a fundamental view on because this still remains very much gamesmanship around market share. Anyone competing for market share does not care about price. The one thing were really focused on is thats net positive on the inflation front so less pressure on the fed. Probably pass through effect to growth which is good news. The one i should push back on me a little bit, some day, consumption. Were still waiting for that. When is it going to come . Weve had record low Interest Rates for god knows how long and it still hasnt come to the degree wed like it to. Context really matters in life. I think what people lose sight of on the growth dynamic and the consumption dynamic, weve come out of a tremendous deleveraging cycle. Dev leverage isnt whats driving this recovery. Thats actually very good news. That slow and steady dynamic will keep this market we believe running two to three more years. One quick last question. Does the direction of energy dictate to i dont want to same the largest degree but to a large degree the overall direction of the market from here . It depends how much it falls. Its kind of like chinese a shares. You dont care until it falls 25 or 30 . Then you gets nervous. We are he a down 20 in energy from recent peaks. Were probably still in a trading range that broadly speaking is 10 around it. If we could gap risk dramatically down from here people are going to be concerned. But in this trading range, i think we manage through it. Got it. Thank you very much. Go to our website, powerlunch. Cnbc. Com to see why richard says china is not broken. Shoulding an ingbe an interesting it read. Wildfires continue to rage out west. More than 300 firefighters in Northern California trying to get a handle on a fastgrowing wildfire. Burning in lake county. Look at that. Heavy brush and rugged terrain making the job tougher for those folks. Approximately 500 people have been forced from their homes. From coast to coast, the hot weather is not letting up. Here is the weather channels maria la rosa. Were following two big weather stories in the northeast. We start with the heat as we see this warmth surge across the midatlantic and the northeast. Thats not just the heat but the humidity as well. You can see an area thats 5 to 15 degrees above average but this time of year that does get you back up into the 90s not to mention the humidity. Both of those are coming down eventually. The humidity definitely first here. As we get into new york tomorrow and in through the weekend, yes, temperatures into the low 90s. But without that humidity it is going to actually feel a little bit cooler than last few days. Thats good news. But it is also coming along with some showers and thunderstorms so watch out for that this be afternoon and evening. In the west it is a big story. Big area of High Pressure building. Heat building as well. Perhaps record breaking in cities like portland that could see some of their hottest weather in several years. Back to the markets and shares of tmobile are soaring. That stock up 45 this year alone. The Telecom Giant posting blowout earnings and raising its outlook, to boot. The companys cfo will join us with their forecast for growth next. Plus check out the transports this week. Rallying almost 4 . Whats this saying about the overall stock market . Are we headed higher from here . Lots of questions. Well try and get answers coming up. A mixed quarter for procter gamble. The consumer products. Giant beating profit estimates but revenue coming in just shy of expectations. Its down by 3. 6 and certainly earlier on when the dow was moving down, it was one of the reasons weighing on that index. Stanley black and decker beating on the top and bottom lines. The toolmaker also raising its fullyear forecast. Gnc soaring though the Nutritional Products retailer missing earnings estimates but gnc says it is seeing improving sales trends and profit margin growth. Those are some of the things were watching. Lets look at some of the sectors. Transports are up 4 this week so far. Its not one of the specific tps p 500 sectors, but those transports are down about 8 for the year. Theres been a literally recently. As you look at the sectors today, on what is on the surface a flat day in the market. But that doesnt tell the story because we were way down earlier and weve come back basically in the s p 500 to a flat point now as were up about a half point. But the key one to look at here maybe is Consumer Discretionary up about. 33 today. That would be folks, an alltime high for Consumer Discretionary. Lagging today would be energy. No surprise there. Consumer staples, industrials and financials also negative but not by very much today. Investors dialing into tmobile. Shares jumping on the back of stronger earnings and the company is bullish about its Growth Outlook as well. Tmobiles cfo is going to be joining us here on power lunch in a first on. Kr nbc cnbc. Tmobile absolutely crushing its eye values up more and more, data is visual. In fact, the number of mris has increased by ten percent a year. 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If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. Need to hire fast . Go to ziprecruiter. Com and post your job to over one hundred of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. And now you can use zip recruiter for free. Go to ziprecruiter. Com. Quick market check for you. We are he a currently sitting at session highs. Dow is up by just a little smidge but dont be fooled, folks. Earlier on in the session it was down by as much as 110 points. The nasdaq is also gaining by. 5 . The s p 500 also moving to the up side just ever so slightly. Weve got a gain so far 40s week for all three indices and also for the month to date. Only a couple of sessions left but for the month to date dow, s p and nasdaq have some pretty solid gains. Tmobile u. S. Posting a blowout Second Quarter. 14 Revenue Growth 2. 1 million new customers. Grand total of nearly 60 million now nationwide. The carrier also raising its guidance and right now as you are going to see in a second the shares are higher and theyve been on a tear this year. Whats behind the growth and the bullish outlook . Fresh off the Earnings Call is Braxton Carter live from tmobile headquarters out in beautiful bellevue washington. Mr. Carter welcome. Beautiful numbers here frankly. 14 Revenue Growth. 25 cash flow growth. You went from a loss of 63 63 million to a net income of 361 million. I think you should just walk off the field and retire. Why not . Because were having so much fun. First of all, it is a pleasure to be here. What a great day for tmobile. Tmobile shareholders, our employees and our customers. Definitely outstanding results and the tmobile revolution and uncarrier revolution definitely continue. When you say the uncarrier revolution, whats driving that subscriber growth which is really the envy of your business right now . Is it this contractless world that you guys are pushing . Well first and foremost the foundation is the fastest 4g lt elte in the country. Were now at 290 million pops. Were going to be at 300 Million People covered with this network by the end of this year. Thats over 1 million scare miles of additional coverage. Thats the foundation. And upon that weve applied tremendous innovation in the industry. Then applied the uncarrier strategy, which is all about sitting in the customers chair, looking at this industry and addressing how broken its been in the past. Hitting the customer pain points listening to our customers and providing tremendous innovation in the industry. I am a neophyte when it comes to my gs. My 4gs, 3gs, 10 megabytes of data sounds better than 6 megabytes of data. But my Customer Experience with all those extra gs, what does it translate to . Faster Data Download speeds . Yeah. So whats really important about 4g technology is what weve seen with the internet going mobile and all content going to the internet. By having a super fast 4g network again, we have the fastest in the country, faster than every other carrier here due to a very different trade spectrum position and a great spectrum rollout of our new lowband spectrum. But benefit of that is super fast data and the majority of the data thats on our network right now, tyler, is video. Video consumption. Youtube is so popular with our consumers. And by having the fastest 4g network, were able to provide very highquality video transmission to all of our subscribers. Very quickly, how much data carriage per month does one typically need . How much do you carry on your account, and what phone do you use . Well its really interesting. I was sitting next to john ledger. By the way he definitely gives his regards oh, thank you. You dont know if you heard this morning, we won the number one in Customer Service with j. D. Power. Again, a testament to how were focusing on our customers. Sitting next to john hes used over 140 gigabytes. Hes an outlier. Hes data hog. Well we offer unlimited. Thats where were very different traded against at t and verizon. But the average customer uses less than 10 gigabytes worth of data. 83 of our customers will useless than 10 gigabytes worth of data. So thats a really nice size plan. Certainly 5 gigabytes is a lot for several for a large percentage of our customers. But its all going to very high data usage. Thats where we excel with our network. Braxton, thank you so much. Please say hi to mr. Legend. Thats great and we appreciate it. Absolutely. Lets take a look at gold prices which are closing right now with the stronger dollar. Gold is on the back foot. Lets take a look at the numbers there for you. Currently sitting still, stuck below the 1,1 1,100. Down by. 3 . Silver palladium and platinum looks like a mixed bag. Silver and copper are lower, palladium and plat flum are highinum are higher. Lets get back to chicago and the bond market and our friend rick santelli. What else has happened . If we look at that auction that we just handicapped at a cminus, you see the intraday 7, were basically unchanged at a yield of 2. 01. Traders have to even up getting close to the weekend. I cant tell you but it seems to have stabilized in terms of the action. Lets look at a 30year. If you look at a threemonth chart, whats interesting is were hovering around 3 psychological but below the market right around 2. 88 2. 90. Pay attention. Thats where traders say yield support is. But it is all about the dollar index today. Up close to. 75 . Whether the oneday or twoday, what the fed is embarking on helped it but if you open up the chart to early july you can clearly see 98 is the next area traders are targeting. Rick needs to work on the enthusiasm part of his game. He really does. Love that man. By now, you probably heard about that florida family that found a Million Dollars worth of sunken gold coins hidden for 300 years . Who can actually cash in after you found treasure . How can you do it . Well speak with someone who does it for a living. Plus announcer todays powerhouse is home to three fortune 500 companies. It is ranked the tenth largest city in the u. S. And it is often cited as the Sports Capital of the midwest. Can you name that city . 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 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 . Hello, everybody. Im sue herera and here is your cnbc news update for this hour. The Obama Administration wants the Supreme Court to reinstate securities frauds convictions against Hedge Fund Managers todd newman and anthony chiason. They are asking the court to reverse a federal courts ability to pursue Insider Trading cases. A shell oil ice breaker retreating. Greenpeace protesters dangling from portland, oregons largest bridge blocked a ship before heading to the arctic for a drilling operation. The ship eventually returned to the dock. The victims of a fiery plane crash in milwaukee were identified as a Top Executive at a Boston Capital Investment Firm and his teenage daughter. They were traveling to the midwest for a college visit. The two died whether their plane crashed and erupted into flames. Billionaire investor john paulson donating 8. 5 million to new york citys Largest Network of charter schools. The gift to Success Academy follows paulsons 400 million donation to Harvard University in june. Thats your cnbc news update at this hour. Lets look at the markets. Were well off the session lows here recovering from earlier losses in the markets. The dow is down more than 100 points earlier. Right now sitting flat to the downside. But we are for all three averages still higher for the week. Joining us Scott Clemmons and david spiga. Thank you for joining us guys. Scott, to what degree do you feel like weve got a market thats kind of grappling, searching for direction here . Mandy, if youll allow me a preseason american football metaphor, i have referred to this market as three yards up the middle in a cloud of dust. When you look at the returns year to date theyre low single dithsz. Not much to write home about. But there is a lot of dust, a lot of price volatility around it. Typical supports for the market are beginning to wear thin and i think youre seeing that in this intraday volatility. It is a sevenyear bull market. When you that uk about wearing thin, you can certainly feel that in the market searching for that direction. David, what direction do you think the next few months is going to be . To play off the football analogy, once we see the fed raise rates you might see the quarterback go back in the shotgun and start throwing the ball over the middle because i think thats what the markets are waiting for. They want some certainty. Weve been waiting and waiting for the fed to begin normalization of rates and it hasnt happened yet. Once that occurs i think investors will take some comfort in that and will start to see stocks move a little more constructcon constructively forward. You think a rate hike in september or whatever would be cathartic for the market. Absolutely. I think everybody expects the fed to begin raising rates. Its time to do it. We no longer need emergency stimulus. Once thats done and the uncertainty of it is gone now if the fed starts raising rates dramatically and faster than we expect, that would be bad. But if it is slow and cautious and measured i think the markets will respond favorably to that. Scott, i see you do like energy. A number of people have been very burned by trying to call a bottom in energy and Energy Shares. Right . I dont personally know. What do you think and why do you like it at this stage . Price volatility and the disruption that it creates naturally leads to opportunities. The markets very good about flowing whole sectors out as they have done with energy because of the obvious change in the energy price. But that collapse in prices creates opportunities where there are companies that have competitive advantages even in a lower priced environment. Finding throws is the stock and trade of a value investor. David, what particular stocks are you looking at . One area we are intrigued by is Consumer Discretionary. We saw better Consumer Spending in the Second Quarter than we expected. We have an ideal environment for consumers with low unemployment and low oil prices and the strong dollar. We think that Consumer Spending will continue to expand from here. We see rising wages and that sets up perfectly for good performance in the Consumer Discretionary. As i was discussing earlier, Consumer Discretionary as a sector is currently at alltime highs. You arent worried about valuations . Again it is all a function of Earnings Growth. Were looking at areas of the market we think have the best opportunity for Earnings Growth and thats going to be driven by those fundamental factors and Consumer Spending looks to us to be the best position place Going Forward particularly as it concerns the u. S. Market. So that would lead to some Consumer Discretionary outperformance. But we do need to be selective. Volatility is going to pick up. It is a stock pickers market. Active managers are going to outperform. Thanks you both. 321 of the 500 companies in the s p 500 have reported their earnings this earnings season so far. It is another big day today. We got it covered now with meg tirrell on amgen, sara eisen, and Julia Boorstin. Expecting eps of 243 and revenue of 5. 32 billion. People are going to be looking at new drugs. Regeneron was just approved last week. Any common ter on that will be interesting. Their migraine drug folks will be listening to very carefully. Then any bio similar competition that can be coming down the pipeline as well. Sara. Adding to the stocks already 20 plus runup so far this year. Some highlights from the quarter. Mondelez is a cost cutting machine and investors continue to see results of the margin improvement in the latest quarter. Theyre shifting production from chicago area to mexico. Thats just one example. Results showing up. Sales were also better for the quarter and that was driven by organic growth. The story there, pricing. Mondelez is able to charge higher prices for consumers on its products instead of seeing volume growth. Thats just the sort of environment we are in. The ceo tells me the Global Consumer now is cautious saying a particular deceleration in brazil and china, and this is a company with a global footprint. 80 of its sales are outside of north america. Thats why the strong dollar is a big problem. The companys focused on marketing, innovation to fight it and as well on cost cuts. One of those innovations we talked about, oreo thins. Dont know if youve tried it but apparently they are a hit in china and the u. S. Oreo sounds good to me thin fat, any way. Julia, fill us in on linkedin. Linkedins coming out after the bell and it is expected to report a 27 increase in revenue while earnings are projected to drop to 30 cents per share, though thats 2 cents better than the companys guidance. The big question will be on the companys outlook for the rest of the year. Last quarter it was lowered expectations for the rest of the year that sent linkedin shares plummet plummeting. Linkedin has been aggressively spending on r d and expanding its sales force which the company says will position it well for 2016. Well see whether that investment could start to pay off before then. Well also be listening on the Earnings Call this evening for any updates on the impact of linkedins linda. Com acquisition and its potential expansion into china. They bought linda. They bought linda. I didnt know she was for sale. But good for her. Shares of marriott more than 4 to the up side. The company sorry, to the downside. Beating earnings estimates but trimming some of its guidance overall. Hotels in this country have never been more full and many of emthis have never been more profitable. But stock market bears are beginning to spot a weakening of some of the data points and question if we are approaching the end of the lodging cycle. Thats a good question for simon hobbs who is live with the marriott ceo, anna sorenson. Today host a big hotel owner, marriott and starward all edging down some form of estimates across the board. Lets bring in arnie sorenson. Obviously the results are solid but people are concerned as to whether or not the cycle particularly in this country where you get 77 of your profits from or your revenue from, whether that is now beginning to turn. It seems important whether everybodys edging down. Well this is one of these days when its important that you do the job you do and i do the job i do. Because i think in many respects were watching a market that has got apprehension. Im not exactly sure where that apprehension comes from but it is very disconnected i think in many respects from what we are reporting or what other industry participants are reporting today, which is another solid growth. I think good forecasts for what the rest of the year and 2016 should look like. But somehow not getting through that apprehension in the marketplace. There are many deals you do deals all the time. Lets talk about trip advisor. It is the first time that you and i have been able to talk about that since you said you put your entire inventory rolling out during the course of the year when before youve been aggressively pushing people toward marriott. Com. Why are you doing that . Is it because youve managed to broker rockbottom commissions from them or do you want to change the structure of the Online Travel agency perhaps less power for expedia and orbitz as they consolidate and presumably try and push those commissions higher . Well the partners we work with when we sell guest rooms, whether it be an Online Travel agent or a traditional travel agent or other channels that we use, were looking for a number of things. One is the cost. We want the cost to be as low as it can be. Certainly efficient. Were looking at the ability to market directly to our rewards members and customers serves within our tent and not be restrained from giving them the kind of deals wed like to give them. Third, we have to have a partner that allows us to control our inventory, hopefully yield that inventory, hopefully get Customer Data that coming through those channels. What we found with tripadvisor was a deal that was very attractive to us on all of those measures. It is competitively sensitive so im not going to talk about exact lip what our Commission Rates are but it is better than many of the deals that weve got with other Online Travel providers. I think as a consequence will be a place that we have more aligned interests and were really excited about what we can do with tripadvisor. The other big deal within technology is of course youve become the first Major Hotel Brand to start offering netflix directly to your customers on the hotel tvs. My question really there is why is the rollout so slow . Just 100 hotels in this country by the end of the year. Is that because there is resistance from the hotel owners who may be losing revenue in other ways . Well this is one of those frustrating things. The technology often seems to take longer than any of us think it should take. I think we come to this with the notion what weve all done at home, where we can change out a tv or we can change out a Wireless Connection or a cable connection quickly, and, in a sense, instantly get to the kind of connectiveity wed like. When you talk about a hotel with hundreds if not thoulzs of guest rooms with existing tvs and existing cabling in the wall and connection to those tvs, it just takes a while to get to the place where we can have that connectivity that allows customers to stream netflix on those tvs. Were moving as fast as we possibly can. Theres actually no resistance from our owners. Our owners stepped up and said goodness we can do netflix, we can be first on netflix, lets go. It is a brand that people love. It is good to see you, arne. From marriotts headquarters. Still ahead, the power rundown tick edition. Why germany said nine to facebook. Thats coming your way. Plus announcer the city in todays powerhouse is home to the north American Auto show host of the largest free jazz festival in the world, and the firstever news radio show was broadcast here. Can you name that city . Im here at the Td Ameritrade trader offices. Ahh. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place that lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim . For all the confidence you need. Td ameritrade. You got this. It is time for the powerhouse home to the International Jazz feftsstival, couple of fortune 500 companies. Detroit. Motown. Were going to look at Orion Township. Lets check out some market stats. The median sale price 288,000. Inventory of 173 properties. Listed on the market for an average of 55 days. Theyre moving pretty fast out there. Where is Orion Township compared to downtown detroit and maybe some of the suburbs i know like Bloomfield Hills or gross pointe . It is probably 45 minutes to an hour depending on road conditions. Which direction . North . Oh. Which direction . Im sorry. Its south. South of detroit. Okay. Fine. Lets go no no. Detroit is south. Detroit is south. Detroit is south. Lake orion is north. 304,000. Taxed just 4,500. Two beds two baths, 1,800 square feet of living space. Tell me about this one. I believe this is a condo polte is building these condos and there is a high demand for condos right now. It is a great condo to have sprawling ranch. Just beautiful. It looks like brandnew, beautiful kitchen, appliances nicely furnished there. That may be a model. But at any rate 304,000. Lets move on to the next one at 3747 Rolling Hills road 313,000. Taxes of 3,300. Four beds 3 1 2 baths. 3,500 square feet of living space. That looks like a big house. Its a nice house. It has a grand foyer, sprawling white kitchen. Just a great family home. The community has a pool parks, it is a great location of lake orion. You see that nicely appointed. Nice bright kitchen. Beautiful furnishings there in that one. Powerhouse of the week. 1859 north mill court. Theyre asking 399,000. Taxes of just over 4,000. Five beds, 2 1 2 baths, 3,100 square feet of living space. Is that the same one we just saw . That looks like the same one go on to that next one then. The final one. 1859 north mill. Oh okay. Thank you. Yeah. This has been remodeled. 2012. And its wide open. Beautiful granite countertops. Open floor plan. It actually backs to a county park. It is just a beautiful home. We dont expect this one to last very long. It just went on market. Thank you very much for your help today. Now for todays celebrity powerhouse. Tyler perry is lifting his 17acre atlanta estate for 25 million. That looks like tylers house here. The other tyler. Yeah. The 34,000 square foot mansion overlooks a beautiful river and includes seven bedrooms 14 bathrooms, a resortstyle Swimming Pool for 300 of your best friends, a full spa, a theater, and an underground ballroom. Underground. Wow. Wonder if at thes everhes ever taken a stroll around his property. Looks beautiful. There is something in the water in brazils olympic venues and it is not good. In fact it is reportedly making people sick. With the summer olympics only one year away we look at what is in that water and whether it will pose a risk to athletes next year. That is coming up. Youve got the dow and s p moving back to the downside just ever so slightly but nonetheless they were in positive territory. With the dow only down by 13 points, if it had been triple digits like it was earlier, that would be its sixth straight day of triple digit moves. Lets take a look at whats happening with oil prices as well because they were in positive territory. Now as we get closer and closer towards the close which would be in a halfhour, crude is down by. 5 . The Energy Sector also moving down. Whats leading in the sectors . Utilities currently up by. 7 . Shipwrecks, pearls gold coins, sounds like a scene from pirates of the caribbean. But what happens when Hidden Treasures are discovered in real life . What happens is they often go on sale at auction. One of the auctioneers will stop by with some treasures from the deep. 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. Forget the fed. Could oil be the most important thing for the stock market right now . Were going to lay out the case and you decide. Let us know what you think. Plus what happened to facebook overseas that could end up having a big impact here. And disturbing new footage of how dangerous its become in some cities to be an uber driver. Scary story ahead but a back to tyler and mandy. A rare treasure trove from a spanish galleon sunk off the coast of florida in the 1600s. Theyre going up for sale next week for guernseys auction house. Talking about a literal pirates stash of gold coins, pearls all dug up from under the oceans floor by legendary treasure hunter mel fisher. We have a sneak peek. Alan, you brought along some beautiful booty as well to keep the pirate analogy going. What kind of people bid on these items . Are they hardcore collectors or are they people looking for a good investment . Dreamers. Dreamers. Dreamers. Who dont ignore the investment potential. But people imagine this is what a little boy or girl you grow up with the Hidden Treasure you should the sea. This is the greatest discovery of all time when thisfisher the most intrepid of all hunters made the mother lode of discovery, this galleon that sank in 1621 off the coast of key west. Really 14 years after the pilgrims came to jamestown and plymouth rock. Take us through a couple of these items. These are pearls. This is the smallest sort of a 20pound solid piece of silver. Hard to see here. Oh man, that is heavy. Inscriptions all over it. One of many such ones i could have brought heavier ones. What do these things go for at auction . Hard to say. Something like this solid gold chalice . Just by its gold weight its worth perhaps 50,000. But what is its historic value . You can hand that to me mandy. Ill see you later. Worth possibly up to a half a million. Whats the risk someone, even a country, could come forward to make a claim . Due this fishers efforts, this sort of collection is free from that concern. But in general . In general, look these things dont happen all that often but each case is based on its own merits. There havent been too much successful claims. People who find this generally can keep it but are always obligations to give a portion back to the state, if it is the United States, off the coast where they found these. How about these pearls . That little thing is an emerald. An emerald. That little thing is an emerald. That could be easily several hundred thousand dollars. Maybe half a Million Dollars. Beautiful. Alan good luck with the auction. Thank you very much for bringing these beautiful pieces in. It is an underserved sale. Anything goes. When it the sale again . Next wednesday. August 5th in new york. But you can bid online. Go to guernseys. Com. That will do it for the first hour of power. The. You could be a dream weaver and i believe you can get me through the night. It is 2 00 on wall street. High noon in truth or consequences, new mexico. The dow down fractionally, as is oil. It is now exactly 2 00. We begin today with oil and specifically more pain for oil and gas workers because another big round of spending and job cuts beginning to roll through that industry. Here is your energy news today. Shell cutting more than 6,000 jobs. It also plans to cut operating costs by 4 billion and Capital Spending by 7 billion. Shell not the only one. Bp, chevron, conocophillips also either announcing job cuts or spending cuts or both. Whiting petroleum, down big today after slashing Capital Spending. The company now saying it will just run eight rigs instead of the previously announced 11. The surprise here folks, this comes just a few weeks after whiting said it was going to increase Production Guidance for the year. Shows the lack of visibility in that industry. Even if you are not an oil investor, here is why you need to care about its price. It is likely to impact your stock holdings. All of them. Look at this. A 20year chart of oil and the s p 500. Oil in blue s p in red. And you can see the longterm trend between prices very clear. Oil and stocks nearly always move in the same direction. The shortterm has been no different. According to our fantastic data team here at cnbc over the past month, oil and the dow have moved in the same direction 68 of the time. Despite lower gas prices being goods for you, the consumer at a gas pump Higher Oil Prices appear better for the stock market. Lets bring in the chief Investment Officer with bimo private bank. Lower oil costs may be great when we fill up our car but may be bad for equity investors. Absolutely brian. I cant dispute the numbers. When oil prices are down stock prices are typically down as well. But it is an odd correlation. Because the thinking on many sides goes like this. Lower gas prices means more money in our pockets which means we spend more of that money which then lifts all boats and also theoretically the stock market. Where is the Consumer Discretionary angle in all of this . Yeah. I would say longer term big picture, you are absolutely right. If you look at it instead of wall street look at it from a main street point of view. Im going to say 85 to 90 of america benefits by lower Energy Prices. And so when you get into wall street, however, its pea a different picture. The reason is because while the energy belt is a very small component of the economy, they do account for a lot of Capital Investment a lot of lending, a lot of the financial pieces that go into it and so to the extent that oil is dropping, that creates a concern about credit that could eventually translate into the bond market. Certainly we are seeing a little bit of that in the highyield bond market. Of course that filters through other Financial Markets as well. Why the disconnect this time around jack . Is it because of central bank easing thats impacting the dollar and therefore impacting oil . Whats the breakdown this time . I think well theres certainly no breakdown between oil and the Financial Markets. I think it the disconnect between oil and main street is the fact that the market is not running on the economy right now. The fact is that stock prices have kind of lost that tether back to fundamental value at the moment, and it is fueled by liquidity and it is fueled by momentum. So to the extent we are starting to see spreads widen, were starting to see perhaps a little risk aversion in highyield were starting to see concern that the fed is going to start raising Interest Rates, that is where that connection comes in to play. Certainly between oil and wall street. Quickly back to the debt side, jack. According to barclays data from last year about 15 of the 1. 3 trillion with a t trillion dollar junk bond market is energy stock related. Bmo, how much are you guys looking at the debt side of the oil story . Thats it. I think it is the debt side of the oil story, brian. There are really two elements. One, clearly oil is a barometer of the global economy. So to the extent chinas slowing, other parts of the world start to disappoint thats going to take its toll on oil prices. But ultimately the blowback is really on credit. The fact is that a lot of contracts were written, a lot of debt was struck a lot of derivatives were put in place when oil was over 100 a barrel. Now oil prices were cut in half rigs are way down. Thats creating some credit concerns. Does that mean that were completely underestimating the impact of that jack . Because were in a market where oil prices are down 50 over the past year but the financials are at sevenyear highs. Right. I think that on the edges, thats the concern. If you look at for example, highyield credit right now spreads are at near alltime low meaning that lenders are requiring a very little premium to extend money out of highquality in the lower quality. Thats starting to widen a little bit. And i think we are seeing a fair amount of growth just because of the low Energy Prices here at home. Maybe not to the full extent a lot of economists would have expected. So really i would think that leverage point is going to be credit. I think if credit starts to back up a little bit, thats going to create problems and will continue to create problems for Financial Markets, which are already pretty stretched on a valuation basis. Jack ablin, bmo, pleasure. See you soon. Well despite the drop in oil prices and many of the share prices of the Oil Companies, many of the Oil Companies are trying to hang on to their dividends. Bob pisani has more on that side of the story. Oil companies are rushing to assure investors that their juicy yields are safe. Now this morning conocophillips and royal dutch both affirmed their dividends. The dividend has become so important that conocos ceo opened the Conference Call this morning with this statement. The dividend is safe. Let me repeat. The dividend is safe. Is the dividend safe brian . Get the point . It is part of a desperate effort to remain relevant to investors. What the privates way down, big Oil Companies are trying to prevent a mass exodus in their stocks by appealing to the legions of yieldhungry investors. Big oil as a utility play. Believe it. Thats the story. Look at the dividend yields for the play jurors. Shell and conoco have yields near 6 . Are these yields safe . For the moment the answer is yes. Theyre assuring everybody its safe. Big oil can afford to fund the dividend from the cash balances they have. They also have access to the Capital Markets that they can tap as well. But in the long run im talking a couple years from now they all need oil to be higher. Were going to see whats going on with exxonmobil. Theyll be reporteding tomorrow. But everyone believes theyre going to say the same thing. The dividend is safe. Is exzonexxonmobil the best performing company. Thats 5 . Thats the problem with this argument. Amongst professional investors in energy they say youre trying to promote exxon as a utility to me . The stock is down. There may be more downside even with the 4 or 5 yield, that can get wiped out very quickly and thats the argument. If you are a yieldhungry investor it does have some points. You threaten people with penalties and tell them they have to cut and they respond. Californians reduced their water usage by over 27 in june this is the first month that the governor june was the first month the governor mandated 25 reductions or else. Californians exceeded that at over 27 despite it being the hottest june on record. This is on top of 29 reductions in may. Of course in july be including today, weve got rain. Weve got this el nino coming so there will be most likely more cuts coming in july because you dont need to water anything when you have rain. Brian, back to you. Jane wells, thank you very much. Elsewhere, the Justice Department asking the Supreme Court of the United States to weigh in on a major Insider Trading case. The doj challenging the overturned convictions of hedge fund funders. Saying it limits their ability to pursue other Insider Trading cases. Paul have the already murky requirements to prove Insider Trading been made even murkier this year . Absolutely no. Id say quite the opposite. I think the newman decision is Crystal Clear in fact that in order for there to be a benefit, a tipper has to give a tip and he has to do so for a benefit. Think back to the movie wall street from the 80s where James Spaders asked to give Corporate Information ahead so his friend can trade. He said wait a minute whats in it for me . Thats exactly where we are here, where the Supreme Court is basically saying there has to be something in it some tangible benefit or quid pro quo that the tipper gives in exchange for a tip. Rather than saying it is more murky, id say it is quite the opposite. Well find out what the Supreme Court says. We could get a ruling next year on this. Well see what it does. If the Supreme Court, paul upholds the overturned ruling if that makes sense for our audience, they uphold the overturned ruling, if they said basically with the defendants is that going to make it much more difficult for the federal prosecutors, for the doj, et cetera to go after alleged Insider Trading cases . Theres no question. Thats why were here. I think the department of justice knows full well that the newman decision has radically altered the playing field. Prior to the newman decision you could the Justice Department and the s. E. C. Would consistently bring cases in which they would allege that friendship and friendship alone was sufficient. If you want to think about murky, thats about as murky as it gets in the age of facebook where youre friends with everybody. Lets forget about cases Going Forward. Lets look backward paul. If youre sitting in a jail cell somewhere because you had an Insider Trading conviction, are you phone with your attorneys lately saying lets try to reopen this case and appeal because we would have likely been found innocent . In other words, do you think there is going to be a mass retrying or massive appeals coming in from people already previously convicted . I dont think thats going to be the case. I dont think weve seen huge case where theres massive floodgates. I do think that there have been certain instances where there have been cases overturned. Some of the highprofile cases from last year. The steinberg case for instance, it is very likely that will be overturned. But i think this parade of horribles that the department of justice and the s. E. C. Has been predicting isnt going to come to pass. Paul ryan pleasure. Thank you. Also happening today a busy day more concern over puerto ricos growing debt crisis. The big test coming in just a few days. That is when 58 million in bond payments come due, and already the government mounting is defense against the possibility it will not have the cash. Dan solender joins us now. Dan, we also want to get some bond recommendations from you. Pick your big brain. But first you used to own puerto rico bonds. Small percentage but you did. Do you still own them . Thanks for having me by the way. We do in our funds have as weve shown publicly holdings in some puerto rico bonds. We are investors in the commonwealth. It is a big part of our municipal highyield markets so it is really appropriate for some much our funds to be invested there. Why is that . Well if you look at the any continue decks of the municipal highyield market puerto rico is over 20 of the market. We never would have come close to investing 20 there but given where bond prices are today and given how large it is and given that a prospectus is targeted toward that part of the market we feel it is appropriate to be invested there. Prices are low today. Theres a lot of potential decent outcomes even where the bonds are today. Whats the bad outcome . That those bonds become worthless . Right. Well worthless is probably the small chance youd really get did to that direction. Bad outcome is kind of what were seeing in the bonds that theyre targeting for potentially not repaying this weekend. Because in that case those bonds have dropped a lot in value and theres only uncertainty Going Forward about how those bonds will be paid. Dan, it almost sounds like you would be willing to find some values out there. It sounds like you think that there is some discounts in the puerto rican muni bond market. Its a market you have to be very careful with because there are so many different issuers. With the amount of money in that parpt of the market everyone puts it all together as one investment but there are certainly different ones. Pritss on prices right now on those bonds are so low and a lot of cases for restructuring, you look through what they can do they should be able to pay a lot of the debt too. I think theyre kind of saving themselves up for a situation. When in reality you look at the sales tax bonds, those taxes are well enough to pay those bonds so it is kind of surprising theyd be challenginging in that kind of situation when they have enough revenue. Given the prices where they are trading today, given that it is a target for a highyield fund given the prospectus there is a lot of opportunity and potential up side. But theres challenges too, definitely. We promised some opportunities. Quickly, dan if you can, in the muni bond market what triple taxfree bonds are the safest and highest yielding . The typical american investor i want all return and no risk. And tax benefits. Thats the challenge. There are a wide range. If you want the highest quality youre going to get the lowest yield. So there is a range. If you look around to the different states there is a huge difference around the country. You have aaa states like North Carolina or florida that are lower yields but theyre very highquality on the aaa end of the range. Those are very safe investments. Any Municipal Bond right now has a yield if you gross up for the tax benefits theyre all very attractive versus taxable plashths markets. Theyre all good places to go. If you live in california the tax rates are very high. The income is exempt from the federal taxes, state taxes and potentially lower taxes so those gross up to very very attractive yields versus other markets. There you are getting highquality investments and good yields. Good advice there. Dan, have a great weekend. Thank you. More than halfway there. Nearly twothirds of the companies in the s p 500 have reported earnings. One of the big takeaways here the impact of the u. S. Dollar. Its been getting stronger versus the euro. Dom chu has that story. Melissa, if you look at those earnings numbers, so far we are coming just about in line with what analysts and strategists have always forecasted for some of these numbers. With 321 companies having reported in the s p 500, yes, almost 2 twotwothirds of them, 72 have beaten analyst estimates. Thats generally in line with what happens during an earnings season. 8 have met analyst estimates. That means 20 have missed. Again, the reports coming just about in line. Where it gets interesting, Earnings Growth. Where is it coming from and where are the biggest drags. First of all, if you look at some of the financial side of things right . Earnings growth is there. Up 20 . We were thinking about 15 in terms of the overall gain there. On the financial side. As for the drag it is energy. No surprise there. Energy prices continue to weigh. Commodity prices. We are looking at down 57 . Earnings growth of a contraction of 57 over the same time last year. Wheres the Revenue Growth. If everything comes to fruition and all these analyst expectations come correctly, well see Health Care Stocks have an 8 gain on their top line Revenue Growth and of course the biggest drag here energy once again. You can see here down by 34 . Now if everything guys if everything comes to fruition the 321 reports weve had, all the analyst estimates for the remaining stocks come in as expected, we can expect to see very modest Earnings Growth. A 1 growth rate if everything comes as expected. Revenues, however, still the weak part guys. If everything comes through as expected well see s p 500 Companies Post a 3. 6 loss over the same time last year. So again, Revenue Growth maybe not so hot but Earnings Growth still plugging out what could be a small gain. Guys, back over to you. Thank you. Coming up a new study shows whos hot and whos not in the trillion dollar smartphone wars. Plus new reports about the ties between Hillary Clinton and the bank ubs. Did she help the bank and get something in return . And the brazil olympics only about a year away but concerns already growing over the safety of the water. That story and much more right after this. The Gillette Mach 3 turbo still feels better after 10 shaves than a disposable on its first. Mach 3 blades have twice the coatings. For a closer shave with zero redness. Get an incredible experience shave after shave after shave. Gillette. The best a man can get. My name is jamir dixon and im a locate and Mark Fieldman for pg e. Most people in the community recognize the blue trucks as pg e. My truck is something new. Its an 811 truck. When you call 811, i come out to your house and i mark out our gas lines and our electric lines to make sure that you dont hit them when youre digging. 811 is a free service. Im passionate about it because every time i go on the street i think about my own kids. Theyre the reason that i want to protect our community and our environment, and if me driving a that truck means that somebody gets to go home safer, then ill drive it every day of the week. Together, were building a better california. Time now for the power rundown. Today it is all about technology. So, of course we brought in our tech gurus. Josh lipton out west jon fortt here in the studio. First up a new study shows smartphone shipments are beginning to slow. Joanne fort do apple, samdung and maybe some of their suppliers have a reason to be concerned . Yes, but not that much reern reason. Other smartphonemakers have reason to be concerned. Samsung said in their earnings the low and mid range they are suffering but theyre going to lower prices on the galaxy x6. But weve seen other suppliers being pressured. Sony which supplies cameras to both apple and samsung doing great. If you are a differentiated supplier theyre still doing fine. Josh lipton your take on smartphones smartphones. Are microsoft and blackberry the real odd people out . Its interesting, you look at that report. What struck me is whos bucking the trend. Right . It is tim cooks company. Apple continues to take share and sully, thats really a function of how extremely popular that 6 and 6plus still is in china. Apple just told you sales in Greater China last year surged 112 . For tim cook it is not just market share. It is also chasing profits. I was talking to an analyst from Creative Strategies longtime apple watcher and tech analyst. He estimates apple now controls 90 of the entire industrys profits. Thats a lot of the profits. Jon mentioned sony. Lets get to topic two. First quarter earnings tripled. Josh lipton Justin Timberlake claims to have brought textysexy back. Are smartphones bringing sony back . That stock has been a monster this year. Theres that interesting tension in the business because you have these commoditized business lines, televisions and smartphones, they just told you they saw that big drop in mobile phone shipments. But then they do have this competitive advantage games, music and movies. But listen it is clearly still a challenge. Look at that last report. Revenue was flat. After a 40 move in seven months you cant blame investors for wondering how much good news is actually priced in to this point. Moving on to topic three. There is a really interesting story. Germany ordering facebook to allow people to be able to sign up under a fake name. John, we know that in other social media anonymity can often lead to bullying and general nastiness. Right . Weve all found that out. If thats something thats allowed to happen in the United States, you dont have to be jon fortt. You can be whoever you want. Do you think that could damage facebook. First of all, call me doug. Doug. Nice to meet you, doug . How you been . Fantastic. First of all, i think we see that facebooks growing great overall anyway. The fact that people want to change their names in germany, not that unique. There are people here in the u. S. Who want to use different names. I got a lot of people on my facebook feed who are using a first and middle name. Bottom line facebook is the place you go where most people are acting like themselves, one way or another. The idea is that youre supposed to be under your real name so people can find you. I guess you have to give them your pseudonym. Josh whats yours . I got i think the first time i ever came on sully, you thought you should call me iced tea but i dont think you ever brought that up again after our first hit. I was kind of disappointed. I thought that was a great nickname. Because the great mandy drury took over your nickname and started calling you joshy. Joshy only works when mandy says it. Somehow, sully when you say it doesnt quite have the same but the real name policy i think let me just say one thing. I think it gets complicated. I get what facebook is saying. You use your real name. More people are going to interact with you. More interaction, more engagement. I get how that works for facebook business but it gets complicated. What if youre a Domestic Abuse victim, you are looking for some level of anonymity. What if youve obviously seen those protests at facebook headquarters, the transgender community. People use different names in different contexts. Youre back. Ipsed tea iced tea. Youre back. Jon fortt, thank you very much. New reports about Hillary Clintons reported ties to the bank ubs. Will it hurt her on the campaign trail . Well have a little politics mixed in to power lunch. Stick around. Hello, everyone. Welcome back to power lunch. Im sue herera with this news alert. The senate has voted overwhelmingly to keep federal funds flowing to road and highway projects for three more months. This was one of the issues that they had to take care of before they recessed for the rest of the summer. They have overwhelmingly voted to do that and now it goes to the president for his expected signature. Brian, back to you. Youll see you in a moment for the news update. The complicated web around Hillary Clinton getting a little thicker today. Let us bring in eamon javers now to explain that and some reported ties to the bank ubs. Eamon. Reporter brian, thats right. A significant story here from the wall street journal today. The journal reporting that back in 2009 as secretary of state, Hillary Clinton weighed in on the sensitive diplomatic negotiations over just how much ubs would be forced to turn over in terms of information on illegal u. S. Account holder at the swiss bank. The journal also reporting that in the wake of Hillary Clintons decision to do that ubs ramped up its contributions to the Hillary Clinton and bill Clinton Foundation and also paid bill clinton 1. 5 million for a series of question and answer sessions with the ubs executive. The journal saying there is no connection here necessarily or no evidence of a connection of a quid pro quo for her intervention in return for that money. Heres what the Clinton Campaign had to say about it, giving the journal this statement. Any suggestion that she was driven by anything but whats in americas best interest would be false, period. Thats what the Clinton Campaign is saying today. A few months ago i sat down with the whistleblower from inside ubs who brought the u. S. Government a lot of information that ultimately enabled the u. S. Government to make its case that ubs was enabling american tax dodgers. Heres what he had to say about politics and the culture at ubs. Indicting ubs is like indicting the swiss government. Theyre one and the same. So it is very important to understand the dynamics of what ubs is. Look at the people that they hire. They hire former politicians. Not just in the u. S. Around the world. Because those people protect their back side. Brian, i can tell you also that ubs has told us in the past that it is a much Different Bank today than it was at the time thats transgressions have occurred and theyve done a lot to clean up their act at the bank and theyre no longer in this american cross border business. Eamon javers, thank you very much. A quick stock alert for you now. Twitter which was positive today, was negative a little bit earlier, mostly positive, has now returned negative. It just turned negative a moment ago. Twtr. I know a lot of people hoping for a blounsounce after yesterdays dismal numbers. Not getting it today. Well watch twtr for you. Were also watching oil. It is just closing. Lets get back downtown to new york city to jackie deangelis. Closing negative on the day after bouncing between positive and negative territory. Whats interesting here well close around 48. 52. Probably somewhere around there will be the settle price. We had about 1s trading range so were just about at our session lows to finish the day. The downside arguments are supply is still out of whack, the stronger dollar and we still have a lot to work on in terms of our domestic demand situation which will probably fall off the end of august. On the up side people consider the production dropoff in the u. S. And the potential for saudi arabia to cut some barrels by the end of this year as maybe the first sign that this thing could turn to the up side if production starts to fall meaningfully. Expect to be in the trading range a little while longer. Coming up in street talk, well bring you a stock one analyst says could gain 80 from here. Power lunch will be right back. 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 ire. Israeli police say a man stabbed several people at a gay pride parade in jerusalem. Six people were wounded, two seriously seriously. Police say an Ultra Orthodox Jewish man charged the marchers. People are demanding justice for cecile the lion. The petition is directed at the president of zimbabwe. The u. S. Fish and Wildlife Service which is investigating the killing says it has been unable to contact Walter Palmer the minnesota dentist who hunted cecile. Mitt romney criticizing senator ted cruz for saying the Iranian Nuclear deal would make the Obama Administration of terrorism. He blasted the comment on twitter saying it went way over the line. Triple crown winner American Pharoah arrived in new jersey tuesday for his next race. He was unloaded from his personal boeing 747 and taken on to a special truck. Hell race this sunday in monmouth park. Such a beautiful horse. Back to you, brian. I hope he wins. You know youve made it as a horse when you have your own plane. Absolutely. Absolutely. Not a cloper. Erchopper. No word whether he had peanuts or pretzels. He might have allergies. It is time for trading nation because traders trade better troth. Gold moving down again. Some say it is on the potential for a september rate hike. Either way, gold down in just 90 days. Aaron, to what do you ascribe golds weakness this year . I see it as three main reasons. One with the expectation of fed rate hikes gold is less attractive compared to bonds. They dont pay interest. Youve got that asset class movement. Two, as rate hikes go up the dollars expected to go up. That makes gold more expensive to foreign investors. And the three really is we dont see any catalyst for increased demand. In fact weve seen actually a big drop in demand for the physical commodity. Investors in china and india have been buying a lot of it up until the last two quarters and we actually saw 26 drop in chinese demand last quarter. So all Things Considered looks like gold is going to continue to go down. Technically, ari, would you agree . I would agree with it. There is really two main reasons were bearish on gold. First is we think most commodities priced in u. S. Dollars like gold are going to continue to be pressured by a strong u. S. Dollar looking out the next year. Two, more importantly, to the work that we do the longterm trend is indeed lower. Gold has been making lower highs for a number of years now. 200day has sloped lower. Really the most recent breakdown is really just confirmation of whats been in the charts for some time now. So in terms of levels we would be sellers of any oversold bounce attempts. We see resistance at 108. We think gold probably needs at least a year to stabilize. Without that stabilization, we see Downside Risk 99. Wow. For the gld etf. That would be 1,000. When you said 99, im thinking thats a big drop from over 1,000. Thank you for clarifying. That is the, not the physical metal. You had some people swerving in their lanes on sirius xm channel 112. Time now for street talk. Every day we dig out Analyst Recommendations on stocks that you need to know about. Melissa, are you ready . Always ready. Oracle. Jeffries upgrading oracle to a buy boosting the target to 50 from 41 thats 25 up side from here. Saying oracle will remain relevant. They said theyre hearing better news with oracles Sales Performance in the field. They say a big driver is going to be the data product cycle. Im watching solar city. Beat on earnings beat on volume guidance. Posted record installations last night and also gave bullish commentary. Today analysts are getting more bullish. Credit suisse raises the price target by 6 which would be 80 up side from yesterdays close. The stock is down 22 over the past 12 months but intraday today, interesting price action. Opened down 3 now trading higher. Really nice price action. Maybe it has a little bit of elon muskian in. Western digital is getting a boost, upgraded from outperform to underperform. It is a twolevel jump went right through market perform. They boosted the target from 93 from 87. 17 up side. It follows earnings. Even though the forecasts disappointed overall, there were some hints that came out of the call about a potential stabilization of the pc market that supports a memorymaker. Hard drives et cetera. People found a little solace in that. People are also hoping for just rationalization in terms of production levels. This along with stx have all been getting crushed because of the slowdown in pcs. Shutterfly cut to market perform. Concerns about the slowdown in the consumer not being temporary but being a multiquarter issue. Shares are trading in line with the threeyear average. Analysts are saying it is fairly valued. Vertex Capital Partners a firm that disagreerd. Disagreed. Maybe a little activism coming. Who knows. Stock number five is always a smaller you should the radar name. Today it is rlyp a californiabased early stage biotech. Oppenheimer with an outperform. Even though they cut the target to 55 from of 60, the stocks still nearly 60 up side up big over 12 months. Five analysts cover the name with an average target of 57. 50 per share. A lot of them see up side from here. All right. How about some ipo stuff for all of you into spinning . Sole cycle, the big spinning outfit, has filed registrations with the s. E. C. For an ipo. No indication yet on ticker or what exchange it will be listed on but still having here that soulcycle, one of these Fitness Companies that invests just in spinning will prepare for an ipo. We do flow the underwriters are goldman sachs, b of a, merrill lynch, citi group, cowann and rbc Capital Markets. A ton of our viewers are fitness buffs, soulcycle files for an ipo. Well have more news on power lunch after the break. No students ever done the full hand raise in ap calc. But your stellar notebook gives you the gumption to reach for the sky. Thats that new gear feeling. All hp ink buy one get one 50 off. Office depot officemax. Gear up for school. Gear up for great. 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 . An angry mob attacking uber drivers and their cars tuesday near mexico city airport. This video shows the crowd shattering windows tearing off mirrors and throwing eggs at the vehicles. There werent reports of serious injuries to the drivers but uber has said between 10 and 12 cars were damaged in the attack. The organized taxi drivers of mexico a Union Campaigning against uber denied any involvement in the attack. Facebook a little bit lower today but the stock is up 20 in just three months. Facebook is now the 9th most valuable company in america. It is bigger than both ge and jpmorgan. Wow. But it wants to keep growing. As Julia Boorstin is here to tell us the answer may be drones . Drones. That is right, brian. Facebook is on a mission to connect the world especially the 4 billion people who are not yet online. Today a big milestone for facebooks connectivity lab. Its drone designed to provide Internet Service in remote areas is now complete and ready for flight testing. Its just too expensive to put up huge telephone poles and string large wires to an area where not being people live in a very rural farming area. When you look at that you say, hey, we can solve this by if we can build these aircraft they can fly over very large distances, very large areas and make it economical for carriers to provide Internet Access but it has to connect up to the internet somehow. The way we do that is actually by using laser based communications. So multiple planes will actually be flying using lasers pointing at each other to do highspeed communication. In an exclusive interview be with the facebook ceo tells us building drones and lasers will have a direct impact on facebooks bottom line. When you look at more people on the internet thats the adjustable market for you. This is long term. This is ten years out. This is not this year or next year. Youll be able to find more from my interview on cnbc. Com. Well also have the latest on facebooks investment in drones as well as artificial intelligence. I hope that social media as it moves toward closer reality will move closer toward real reality. Instead of just talking to you, well just go have a cocktail. You mean in person real reality is better than virtual reality. Im based in los angeles. What Mark Zuckerberg would like is for us to pretend were having a real conversation but wearing those goggles from 3,000 miles away. We can do that its called an airplane. It is a cool story, julia. Thank you. More proof of the ongoing pain in the oil patch. We have been i should say we have been remiss of bringing up shares of linn energy. I dont know how we missed this guys. Stock is down 25 . Should have highlighted it at the top of the show. 46 drop in revenues from a year ago. I know bonds are boring. Bontdz bonds are boring. They arent something you can easily see on a screen. Ive looked up linns bonds, com stock resources, the bonds told the story before the equity but this is a tough day for linn energy and its investors and employees. With the bonds the issue is the value of the assets the back of the bound. Those reserves are now worth a lot less because oils worth a lot less. Therefore a lot of these companies could be teeters. You bring up a very important point. We talked a little bit about this last week. When Companies Say weve got x billion or whatever in reservices, they base is on the Closing Price of oil. As Oil Continues to stay low we could see a wave of companies starting to have to write down the value of their reserves. Exactly. Asset backed bonds. Brian, something well continue to watch. Much more power lunch straight ahead. When Kevin Jorgeson needs light, he trusts only duracell quantum because it lasts longer in 99 of devices. What if there were only one kind of dog . Then it would be easy to know everything about that one breed. But in fact, there are over three hundred breeds of dogs. Because no one can be an expert in every one. An app powered by ibm watson will help vets tap Specialized Knowledge in the cloud for every breed. And whatever else walks, flies or slithers through the door. Ibm watson is working to make medicine smarter every day. No students ever done the full hand raise in ap calc. But your stellar notebook gives you the gumption to reach for the sky. Thats that new gear feeling. All hp ink buy one get one 50 off. Office depot officemax. Gear up for school. Gear up for great. Some headlines you might have missed. Proctor Proctor Proctor Proctor Proctor proc ter and gamble reporting higher than normal. Minnesota dentist dr. Walter palmer may be the most visible face of the controversial practice of trophy hunting right now but hes not alone. According trophy winners kill 600 lions a year. Its become a huge story in social media. Its become a huge business and a popular sport. Cecils death has some calling for its end. They paid 50,000 for the hunt in which they killed the most famous lion. He didnt know cecil was famous or the hunt was illegal. Hes one of the thousand hunters who go for the trophy hunt. South africa earns 7,004,000 a year for trophy hunts. Along with lions, trophy hunters have taken out 2,500 help he leopards. Supporters say legal trophy hunts Fund Conservation and efforts to stop illegal poaching. World life fund can help preserve some animal species. Opponents say the money only goes to land owners and the companies and the hunts deplete wildlife. There use to be 200,000 lions in africa. Theres now 30,000. Some companies are already taking action. The airlines refuses to carry any hunting trophies back to where theyre going. Apparently the dentist is getting Death Threats himself. Coming up next why so many athletes training for the olympics in brazil are falling ill. More power lunch in two. Understands the life behind it. Those who have served our nation. Have earned the very best service in return. Usaa. We know what it means to serve. Get an Auto Insurance quote and see why 92 of our members plan to stay for life. 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 . A new investigation showing the Water Quality at the real other rio olympics is so contaminated athletes are ill and possibly not able to compete. Lets bring in christina, a professor professor. Based on what you have seen how bad is the situation in rio . Ive seen initial data regarding the Water Quality in the bodies of water these athletes would compete in and these levels are as high as what ive seen in raw sewage and monitoring studies conducted world wide. Put it in laymans terms for an audience thats not olympic swimmers. They go for a swim for a day. What is likely to happen to them . Well at those levels ive seen, its likely that theyre going to be exposed to infectious viruss and the chances of them becoming ill is dependent upon their immune system, the extent of contamination and various characteristics of the organisms they come in contact with. We saw a lot of air quality concerns. Christina headed their olympics and they cut down. What can rio do to fix this situation . Its my understanding that the monitoring of these waters is going to be on going. Its just been started and i think if they routinely look at these waters over the next few months theyll have a better characterization of the quality and they could potentially identify vulnerable areas contributing to the pollution. By doing that they may be able to better protect these athletes. Without getting into the disgusting details of whats in the water, i think our audience can figure out what it is. What is the treatment . If you get ill, what do you have to do to get better . For many of the organisms its selflimiting. One criticism is that these olympians are much healthier than the general population. Depending on if its a bacterial infection, viral infection, the treatment would be different for a bacterial infection. Like i said before generally, you let these types of infections run their course. If i were an olympic athlete and i said christina, should i compete in these waters, would you tell me . Well at the initial levels ive seen i would be potentially concerned. I definitely think that more monitoring needs to be conducted throughout the summer would be my recommendation to assess if theres any fluctuation of these viruss and other organisms they may be finding. Real pleasure to have you on the program. Gross situation. When it comes to the olympics you always want to go for number one, not number two. Oh brian. I cannot believe you made that joke on national tv. I didnt say anything. Youre making a lot of assumption assumptions. Tonight on fast money, linked in, since april 20th stock down 10 . Going to be watching that with twitter down so pourly after its results. I know you know him. Raul paul going to tell us where oil is going. Shocking then. Hes a friend of mine. Take him with a grain of salt. Hes going to get a big head but hes one of the smartest people ive ever met. Great show tonight melissa, well see you then. Thanks for watching. Get your power lunch to go. A clean closing bell starts now. Thank you for that, brian sullivan. We hope its going to be a clean closing bell. Stocks at a Holding Pattern right now. That could all change. That mind set after the bell tonight. Here we go again, another flood of earnings coming out tonight. Linked in Electronic Arts expedia and fire eye. Good Cross Section of industries represented. Well have the results and the deep dive into the health and bio tech