Transcripts For CNBC Power Lunch 20140214

Still smarting over scott rebuffing my valentines proposal but i know his wife so i know why. I know why. We have a story about which stocks and wall street ratings are working and which arent. Love never means having to say im downgrading. We will name some names first to sue. Happy valentines day. Thank you. To you too, ty, and to everybody out there. This has been a terrible winter. We all know that. But now its really started to show up more and more in the economic models as economists are really tracking the impact and taking it more seriously. A survey by the philly fed cutting its q1 growth impact from 2. 5 to 2 . It believes q2 growth will pick up to 3 . It also believes that hiring will slow down so were watching that very carefully. Meantime, shares of orbitz taking off. Today shares are trading down just a fraction, you could actually almost call that unchanged. Is the terrible weather hurting the travel industry or in some cases, helping it . More with jane wells reporting on whether tourism is actually getting hurt by cancellations brought on by cold weather or helped by the increased business brought on by the cold weather, where they want to go to some place warm. First to phil lebeau in chicago with the airline side of the story. Reporter i know it probably doesnt feel this way in new york but things are gradually starting to improve, especially for those trying to fly out of the three main airports in new york city. Here are the latest flight cancellation numbers from flightaware. Com. Way down from yesterday, by the way. Cancellations, almost 2,000. We would like to see that much lower but thats an improvement compared to yesterday. Almost 5700 delays so far today. Express jet, which is the regional carrier for a number of airlines, is most impacted right now. I mentioned that the new york airports are improving. We are seeing more flights returning, fewer cancellations, but its really all over the place. The average is about 15 of the flights are canceled, but in some cases, jfk, only 4 of flights are canceled. Compare that with newark, where 26 of the flights are canceled. There you see a shot of one of the new york airports. Again, things are gradually improving. Dont look now, but february is on track to pass up january in terms of total cancellations. We asked the folks at flightaware to run the numbers. More than 60,000 cancellations so far this year. Delays, if you have been on a flight and havent been delayed, consider yourself lucky. Getting close to 200,000 yeartodate. Take a look at shares of the airlines over the last month. We have been talking about how for the most part, they have been holding up. Forget about american because thats really a trade on the merger between american and usair. They are feeling a little bit of pressure over the last couple weeks, but relative to whats been happening operationally, they are holding up fairly well and thats because as we said before, investors are looking through at the fundamentals for the airlines. They really are. Very good point. Thank you so much. Now to jane wells on what this cold weather means for the travel industry because its kind of a catch22. People do want to get out of the cold so they are probably willing to spend money to do that. But then their plans keep getting canceled, also due to the weather, right . Reporter well, yeah, but theyre not exactly booking to go tomorrow. They are sitting at home and looking at me right here in santa monica where its really like early summer. It will get into the 70s later today. Its just ridiculous. Usually this time of year, people start thinking like they do in the rose parade when they see that new years morning. Gee, i want to get out of my cold house and go some place warm. Now with the polar vortex, snowmageddon, they are really giving travel sites a boost in business. Searches for trips to los angeles as well as san diego are up over 80 . Luxury link which sells discount packages to high end destinations says trips to the caribbean have more than doubled and mexico is also up but in the u. S. , miami is the most popular search. Searches by east coast travelers to miami are up 87 . January is always probably the biggest month for the consumer leisure discretionary travel dollar. So we continue to see that trend be favorable, but having said that, we are even seeing exceptionally strong numbers year over year which i think indicates in part that the weather patterns are having a factor. Reporter what he is saying is very different this year. Its not just people from the northeast suddenly making the searches. Its people in the midatlantic and southerners, yes, southerners are becoming snowbirds. Back to you. This year, i actually believe that, jane. You know, i look at that beautiful picture of you in santa monica and the big weather story there is the drought. 70, 80 degrees out there is not a good thing. The president s on his way to california this afternoon. What does california need from the federal government . Reporter well, the farmers are asking him for money, of course, taxpayers money. This will be the president s first trip to california Central Valley where so much of our produce is grown. He is going to be offering over 100 million right away in taxpayer aid to help mitigate what his own science advisor is calling potentially the worst drought in half a millenium. 100 million in aid will be ready for livestock producers who need to find feed. California is the number one dairy state, the number five beef state. He will announce 50 million for food banks in droughtstricken areas where unemployment is volatile. He is offering federal facilities out here to immediately stop using unnecessary water, turn off the faucet and he will blame at least part of this on climate change. Im sure he will. We will cover that and i know you will, too. Thank you. Ty, up to you. Thank you very much. Im making my way over here. Whos on . Turn around. Im coming in. Im coming to get you. Take a look at steves shoes, will you . Take a look at steves shoes. Hes ready for winter. You always call me out on stuff like this. You heard phil talk earlier the weather. You heard all the stories about jane talking earlier. We are much better at forecasting the weather than we are weathers impact on the economy. I cant get from phils 60,000 canceled flights to some kind of economic number. But we did have this number today. Im calling this a weather wakeup call. Look at that. Take a look. These are the sorts of things you would expect to see, the feds Industrial Production number, if we had weather impacts. Thats through january. We were expecting plus 0. 3. Mining, thats Energy Extraction in there, too. And utility output, because its cold. You see all that right there and say you know what, theres a bigger and the fed said specifically its weather. This is from Macro Economic advisors, unusually cold temps in november, december, january will subtract 0. 4 Percentage Points from q1 gdp growth. Its very uncertain, they dont have the right metrics. One graphic is auto sales. You can see the downturn in december and january. Whats wrong with this picture . Why the blip in november, though . You got to ask phil about that. I think there were actually incentives that month. Anyway, its probably coming from the incentives but were missing february. This is a twoprong its why were talking so much about the weather on cnbc. One thing that happened, unusually cold month. Now you have the cold followed by the snow. We are better at modeling the effects of cold than we are on snow. Very hard because what we showed the last couple days, how much of the snow covered places where people live. So its really a population adjusted snowfall thing. Heres another thing to think about. Two inches of snow in atlanta is way more economically disruptive than 12 inches in the northeast. So the guys at Macro Advisors trying to get their brain around it, working with. 3 total because of the snapback idea in the next quarter which right now would be net about 50 billion of losses to the economy. Thank you very much. Thank you for waiting for me to get here. Thank you for pointing out my great come on, walk around with. Pivot, follow me, follow me. I know im out of the light, everybody. Dont worry. Its okay. I just want to show you, this is lou here. Lou, how are you . Good to see you. Tiffany is here. Lou is here. Come on over. We got dominic chu over there. Hes talking about stock pickers stocks. He is going to name names. What stocks you got for us . Lets talk about this. I love the tour of the newsroom but we will give you a tour of the sectors and industries that are having real discrepancies in terms of the stocks that are outperforming and underperforming. It means that right now, stocks dont have to trade up or down together like they did back in the financial crisis. Heres one industry you will love this. The machinery industry, the business. If i told you there was two stocks, one up 6 year to date and one down 6 year to date, and then i told you the one thats up 6 , interestingly enough in terms is headquartered in peoria, illinois. This one here is headquartered in moline, illinois. Check this out. Another clue for you. This one here, biggest name in construction caterpillar versus deere. Yes. Two similar companies. I didnt have to phone a friend on that. These two companies, similar but going in opposite directions. Stock pickers win if they had picked caterpillar. One more industry just for good measure, health care services. One company up 9 , the other down 3 year to date. Big discrepancy. This one here, headquartered in san francisco. This one, valley forge, pennsylvania. Heres another clue. This guy here just bought a german Drug Distribution company is that amgen . It is not. This one here is a merger back in 2001, two names coming together. Check this out. This is mckesson, and this one here, amerisource bergen. A stock pickers market means that you can make a difference in picking the right stocks in an overall i think if you had given me a letter or two, i might have gotten it. Or maybe a ticker. Maybe. Dom, thank you very much. Ali mcgraw said it best when she told ryan oneill that love means never have to say im sorry. For some wall street analysts, love means never having to say the word downgrade. Will that leave investors brokenhearted . Lets ask sheilla dharmarajan. It is all about love, love, love today. We wanted to do a little business spin on this whole love theme and found a couple stocks that are getting a whole lot of analysts love. In honor of that, the guys at the nasdaq actually gave me this pink heart. Lets get talking about the stocks. The first up is allegian. It makes Security Products for homes and businesses. 80 of the analysts who cover it are positive on the stock. I talked to a bunch of them this morning. They said as part of ingersoll, they didnt get a lot of attention so now theres renewed focus on growth now thats a standalone business and a great way to play the rebound in the real estate and construction markets. Another stock is phillips 66, stock up 100 all due to the shale boom. Analysts say there is more upside when you talk about the companys growing chemicals business. Reasons why people are liking phillips 66. You got to talk about heartbreak, too, because love also has heartbreak. Even wall street analysts can be fickle when it comes to love affairs. Some can end badly, they say. Like discount retailer family dollar. I talked to an analyst who has covered this stock for 28 years, just decided its time to break up with it. Hes negative on the stock thanks to this one, two, three punch he described. Declining market share, operating margins which he thinks have peaked and also, a valuation that is still high, no matter if the Company Misses its numbers. Lot of speculation it could be bought up. Nonetheless, hes still pressing a sell button. Little heartbreak in there as well. Thank you, sheilla. Nicely done. To dominic chu for a market flash. How about shares of gnc tanking, down nearly 13 . The company missed earnings and Sales Estimates for the quarter and the Company Estimates full year earnings will fall well below expectations. Gnc said bad weather kept shoppers out of stores in january, saw weak sales because of promotions. They did so well in the months before. We are seeing ripple effects. Elsewhe elsewhere, Vitamin Shoppe shares down overall. Bad day for Nutrition Supplement makers. No kidding. Yikes. Thank you. See you again in a few minutes. The sinkhole that ate the corvette museum. We have been on this story since the start. Today, we will find out who will pay for the cleanup. Plus, two big housing stories for us. Diana olick on mortgage relief and Kayla Tausche on mortgage help. Borrowing standards may be coming down. Is the Risky Business primarily known as sub prime making a comeback . A controversial plan to keep troubled homeowners at home comes to an end. Did the mortgage bailout work . How many people were able to take advantage and what now . vo you are a business pro. Seeker of the sublime. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. We showed you this amazing footage yesterday. Security cameras capturing a sinkhole collapse that swallowed up eight prized corvettes at the National Corvette museum in kentucky. Well, car lovers take heart, because chevrolet is stepping up. They are planning to restore all eight cars that wound up in that 40 foot wide, 20 foot deep sinkhole. The design team will manage the restoration project. Right now, experts arent sure how they will pull all those vehicles out. A chevy spokesperson says it will likely be several weeks. Ty . Thank you very much. Home loans to risky borrowers. That was of course a major factor back in the financial crisis a few years ago. Now, one of the nations biggest and really platinum banks is getting back into subprime mortgages. Kayla tausche is on the case. This is a little surprising, especially for the company thats doing it. It is, but last year around this time, ben bernanke said he actually thought the mortgage credit spectrum had tightened too far. He thought banks were doing too much to protect against some of these riskier borrowers and a lot of people werent actually able to get home loans. Now wells fargo is the first bank with the help of the department of housing and urban development as well as the fha that is starting to dip its toe back into what we would have called subprime loans. They are lowering the minimum borrowing fico score to 600. It used to be 640 which most banks see as the cutoff. Subprime is a little bit different these days. These are conforming loans so they are not giant loans. These are going to be sold back to the government and they are going to be securitized under ginnie mae. They also meet strict requirements, there are eight rules that if banks have these and a consumer defaults, the consumer can sue the bank and say you shouldnt have lent this to me in the first place. They are being very careful about this. Other subprime loans, if you are above the governments price tag for these loans or if you have a high loan to value ratio, banks will actually need to put up a lot more capital to actually underwrite that kind of loan. The rules have gotten so strict for them to actually do this. Thats why they havent been getting in there. Theyre not doing it in a huge way. Only about 1 billion a quarter in subprime mortgage originations last year. Thats compared to 625 billion in origination in all of 2005. By comparison, so theyre not really doing this in a big way. They are just starting to get back. This i think is a good thing because this has been a borrower that has been pretty much boxed out of this, refinancing, purchasing a new home in the spring selling season. Let me understand one of the things you said there. To be able to make these loans to these lesser qualified borrowers, they have to hit a bunch of tick boxes that prove that these people actually are likely to be able to pay it off, is that right . Fully underwritten, fully documented. Thats something thats different from last time around. You have to have the income that you are stating on your application. There are going to be a lot of different rules this time around. Keep in mind, 680 is the fico score the government put as the line in the sand where, if youre doing a nonconforming loan and are trying to borrow at a subprime credit score, they have to double the amount of money they are keeping on their books to back it up. Thats why banks arent doing this. Youre not in the 500 credit score range, you are only going down to 600. Its only wells fargo, the nations largest mortgage provider. Thanks very much. Lets discuss this a little more with mark calabria, director of financial regulations studies at the Cato Institute and edward pinto from American Enterprise Institutes International center on housing risk. Guys, if indeed subprime is back, what does it mean, mr. Pinto, for us taxpayers . I think you need to realize two immutable laws of lending. Lenders will lend as long as there is somebody willing to buy that loan or guarantee it. Second, politics will always act to weaken lending standards over time. You are seeing both in action here. All these loans will be guaranteed by fha and securitized with a guarantee from ginnie mae so you have the first thing in place, the loans will be guaranteed by the government. Secondly, you have the government saying we want you to do this lending down to hud would prefer they go down to 580 but in this case, they went to 600. These loans between 580 and 600 have about a one in three chance of foreclosing under stress, a stress event like we just went through in 2007. Why . They have downpayments that round to zero, very high debt ratios and of course, the credit is poor. Mr. Pinto, you sound like you dont think this is a good idea. How about you, mark . Well, its a question of a good idea for who. This is why i wouldnt necessarily criticize wells, because wells is under tremendous pressure. Fha and wells want them to go down to 580, to go down to even deeper credit score. Wells is caught in the middle here of the governments going to say, lets not forget it was little more than a year ago that wells had to do a big settlement with the department of justice under this fair treatment discrimination theory so you have the department of justice, you have fha, you have the government saying to wells youre not making the loans we want you to make. I think frankly, wells is in a rock and a hard place. For them, theres not a lot of Business Risk because they are passing this risk on to the taxpayer. Thats the problem. I think its also interesting that even with this decline, wells still has credit quality standards that are tighter than fhas. To me, the fundamental question here is we are going to see this risk passed along to the taxpayer but im not blaming wells for this. Folks, thank you very much. Sorry to have to end the discussion there. Thank you very much. Have a good weekend. It is todays Yahoo Finance question of the day, with wells fargo edging back into the subprime lending business, whats your take . How do you feel . 7 of you say its okay, banks are businesses and they need to make a profit. 48 say bad idea and dangerous for the u. S. 45 say if the terms are stricter than before the financial crisis, well, then im okay with it. Sue . That leads us to the governments mortgage bailout program, which is about to expire. For many homeowners, that means having to pay higher mortgage rates. Diana olick is live with some of the details on that. Reporter time flies in the housing recovery, right . This spring marks five years since the Obama Administration launched its housing and mortgage bailouts and the mortgage modifications had a five year limit. The program didnt help nearly as many borrowers as promised. Close to 900,000 did get permanent modifications with rates as low as 2 . Now that rate will go up one percentage point a year until it hits the current market rate. What does that mean. The median Monthly Payment of a borrower in the program whose rate at the time was over 6 was slashed in half from 1421 to 773. Now, each year, the Monthly Payment will go up by about 100. In total, around 200 higher a month when all is said and done. Thats on average. Treasury says it could be around 250. But you have to watch california, which had by far the highest number of government modifications, nearly 214,000. Thats twice florida, which is the next biggest player. California had higher home prices and bigger mortgages, and borrowers there could see resets on average over 300 a month but as high as 1700 in that Monthly Payment. Treasury officials tell me they are watching this very closely and will have a quote, dynamic response should they see more hardship than expected. Theyre not considering any potentially costly changes to the program until they have a better picture of the facts. We have plenty more online, of course. Sue . Thank you so much. A nice gain in the Dow Jones Industrial average, up 91 points. The dow and s p at session highs. The nasdaq just a fractional loss but all three major averages set to end the week up about 2 . As you know, we have been telling you, its been a wild roller coaster ride for investors so far this year. How are the hedge funds playing in this market . Wheres the money flowing . Plus, the south and northeast working through the aftermath of yesterdays big snowstorm but guess what . Yep, theres another one on the way. Later today into tomorrow. We are tracking it for you. [ sneezes, coughs ] ive got a big date, but my sinuses are acting up. Its time for advil cold and sinus. [ male announcer ] truth is that wont relieve all your symptoms. New alka seltzer plusd relieves more symptoms than any other behind the counter liquid gel. Oh what a relief it is. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. Oh, my goodness, look at that. A fairly rare snow in japan. Animals, those are a certain kind of animal, those are people animals, animals are a little confused taking cover. People pulling out umbrellas and lots of them to protect themselves. People trying to sleep it off in train stations and airports and the like. As for the u. S. , more snow is on the way for the northeast. Heres the weather channels tom niziol. We have yet another snowstorm that is going to affect parts of the east, in particular coastal new england going into the weekend. Lets see how this sets up. Tonight, we have an area of snow that cuts across the ohio valley and into the midatlantic. A wintry mix down here where its just a bit warmer. By saturday, that snow works its way up across upstate new york and interior new england and later saturday night, it is going to get into the boston area. Along coastal areas once again, warm enough for a wintry mix but tomorrow night, this thing really, really intensifies. Coastal new england from portland to bangor into parts of maine, enough snow and wind to produce blizzard conditions. Boston comes into play overnight saturday night with several inches of snow as well. Once again, another system in what seems to be an unending winter for a good part of the eastern u. S. Well send it back to you. Gee, tom, thanks so much. Sooner or later it will be march and april, right, guys . The recent market pullback putting investors on the retail side a little on edge but what about Institutional Investors . We track the big money. Deutsche Bank Securities inc. , good to see you, barry. This is an alternative Investment Survey that you did. What did you find . What was the key finding in terms of where people are putting their money to work for the big guys . Its interesting. We have done this, our twelfth year doing it. We interviewed, surveyed 400 investors, about 1. 8 trillion worth of the alternate asset space which is about 65 or 70 of the investments in this space. What we learned, it was a bullish year. Not surprisingly, we ended the year 2. 6 trillion in assets under management. 312 billion of that was performance, 64 billion in net inflows. Next year looks like another anticipated bullish year. We are targeting 3 billion in uam coming in. We think it will be about 50 50 between net inflows and performance during that period. Dominic, lets go to dominic chu for a market flash. Shares are popping up for a big Share Buyback announcement, the chain purchasing an additional 25 million shares of stock. Marriott stock ticking up 2. 5 . Overall, does this boost their existing stock buyback authorization. Thats the reason its up. Sue . Lets talk about capital flows geographically. Where is the money flowing . Is it europe, japan, the u. S. . We do both the anticipated performance as well as the anticipated capital flows and are looking at past surveys that have been predictive. Freft i we expect best performance in u. S. And canada followed by japan. Asset flows are a little different, western europe first, japan second, u. S. Third. I think thats by virtue of the fact people are already in the u. S. And have been. European story is that it feels like break of risk is a little further behind us and its a pickup story. We have had 150 rally in the s p from the march 09 lows. We have had about a 50 rally in the euro stocks. Theres a pickup opportunity there. In japan, i think its pretty straightforward monetary condition story. People believe equities will be impacted. You also found the Hedge Fund Fee structure which used to be two and 20 has changed considerably. What is it now . Its interesting. Its still probably the intellectual benchmark. People think about two and 20 and think they are getting a discount if theyre below that or premium if above that. We found the new average of the guys that responded to this, about twothirds of the industry, is 1. 7 on the Management Fee and 18. 2 on the performance fee. Driven largely by the institutions. We found this year, 75 of the people negotiated for better fees versus 71 and 13 and 51 and 12. Of that, about a third were successful, more than half the time. Interestingly, they typically wrote more than half the time a ticket for more than 100 million or more than one year lockup in exchange for that discount. So a reasonable quid pro quo. Last interesting point is people are still happy to pay for performance, happy to pay for a guy that delivers an incremental net return per unit of risk better than his benchmark, better than his sector. Get what you pay for. Thank you. Good to see you again. The gold market is closing right now. Lets get you up to date on where prices are. We will take a look at precious metal comex. Gold up 19, a 1. 5 increase. Look at the move in silver. Thats a big percentage move in silver. In terms of the copper market, little bit of upside bias there, too. To the bond market. Rick santelli is tracking the action at the cme. A twoday chart says everything you need to say. We get some volatility around markets but are hovering kind of sideways, right at and slightly under 2. 75 but its the japanese markets that gave you the right direction. Look at the year to date of the dollar yen. Dollar still going down but as the next chart shows, the nikkei versus the dow, they are going in different directions. Is it the weather . Is it japans breaking away . I cant tell you. What i can tell you is if these charts keep going in different directions, there will be a lot of very sad traders behind me. Tyler, back to you. Thank you very much. Remember yesterday we told you about how athletes at the winter games are connecting with each other using a hookup app . How are people actually getting around in sochi . Michelle carusocabrera is live in the olympic city. Reporter its not as easy as it looks. We are down at sea level but a lot of events happen up in the mountains. How do you get there, how do you get up to the sky . We will show you after this break. We know were not the center of your life, but well do our best to help you connect to what is. Where you think youre gonna go when your times all gone . [ male announcer ] live a full life. The new lexus ct hybrid with an epa estimated 42 mpg. The further you go, the more interesting it gets. Lease the 2014 ct 200h for 299 a month for 27 months. See your lexus dealer. Lets take a look at the medals count. Norway is still leading with a total of 13, four, three and six, followed by the netherlands. The u. S. Has 12. That puts it one ahead of the host country, russia. But look at germany with seven golds, two and one for a total of ten. It is 63 degrees in sochi today but thats really the temperature at the lower seaside elevation. In the mountains, the weathers a bit more winterlike. How do you go and get from the bottom there where people can swim to the top . Michelle carusocabrera found out and it isnt easy. Reporter for right now, we are at the Olympic Village at sea level. This is what the organizers call the coastal cluster. All the ice events you have been watching, figure skating, speed skating, ice hockey, that all happens at this level. We want to show you what it takes to get up to what they call the mountain cluster. All the events you have been watching, snowboarding, skiing, et cetera, they are up there. So the first stop, a train station at the end of this pedestrian bridge. So here we are at the train station. According to this map, we can take the train all the way to a new resort village where they built a lot of new hotels. Not surprisingly, you have to go through a security check. We are not allowed to show you that. The Construction Costs of this Transportation System are a matter of debate. According to the organizing committee, this train and the new highway cost a little more than 7 billion. But critics of the games say that road alone cost 9 billion. That took 50 minutes. Next, a bus. Next, we will walk over to get on the gondola. Take a look. You can see it up there. Whats also very visible up here in the mountains, lots of barbed wire. Clearly they are very worried about security. You have been on a train, a bus, now a gondola. This by far has the best view. So finally, after a ten minute walk from the gondola, we are here at the extreme park. From bottom to top, took roughly an hour and a half. I wouldnt say its hard but it wasnt easy, either. But wow, it was worth it. Look at this Beautiful Day we have. Now time to go watch an event. You may notice i was wearing this credential the entire time. That gets me free on all the transportation. Whats unique about this olympics, even the spectators now have to have a credential to get anywhere. Used to be just workers, media, athletes, et cetera but because of security, they have added that. On to a controversy thats occurring here at the games. It has to do with the men and womens Speed Skating Team which performed disastrously, well below expectations. The wall street journal citing sources familiar with the team are pointing to the suits made by under armour, some saying that the vents meant to reduce heat led to too much drag. Under armour, the maker of the suit, put out a statement, saying in part mach 39 is the most scientifically advanced and rigorously tested suit ever featured in olympic competition. While a multitude of factors ultimately determine onice success, many skaters have posted personal best sea level heat times, split times or race times this week, and we are rooting for that to translate into medals over these next couple of days. Tyler and sue, speed skating usa also put out a statement saying there is no evidence that it has anything to do with the suit but there you see the stock taking a hit, lower by a little more than 2 . Back to you. Thank you very much. That was a fun package about your adventure. Folks, do not forget cnbc is the home of curling. Its really the only place you can watch curling. Why go anywhere else . Curling is mesmerizing. Our coverage continues tonight at 5 00 p. M. Eastern time. Bring your stones, bring your sweepers and come on over and watch. Bring some beverages as well. Sue . The beverages are extremely important. Check out this guy. He is snowmobiling in colorado and then all of a sudden, from higher up on that mountain, the avalanche strikes. It is obviously pretty scary stuff. You can see his helmet camera catching all the action. Dont worry, he is fine. But wow. What an escape. Very scary. Dramatic stuff. That brings us to the fact that we have had a wicked winter through much of the country. Dominic chu is following the snowmobile stocks during this harsh winter because they have been moving. They have been. Last quarter wasnt great for the snowmobile makers. Shares are down this year after disappointing Earnings Results and forecasts but that was based on last quarter and some analysts are more bullish on the Current Quarter given the recent bad weather across much of this country. Bmo Capital Markets analyst Derek Johnson is one of them. He says Winter Weather is great for snowmobile makers since more people use them and that drives sales. Production levels are fixed so they cant just go out and make tons more snowmobiles but it does lead to full price sales without a whole lot of discounting and if dealer inventories get cleared out, johnson believes they will order a lot more for next season. He says the Winter Weather is a benefit for Big Companies like arctic cat, but that the upside is capped at least to a certain degree but certainly watch those stocks. Back to you. We will. Thank you very much. We are also watching shares of Weight Watchers because it started last night, the selloff. They are getting slammed. They are down 26 , losing a quarter of their value today. Why, you ask . Josh lipton is looking at one redhot area of tech that interestingly enough is having a major impact on that stock. Josh . Reporter yeah, sue, its wearables. Why attend a weight loss meeting if you can download a free app or get all the information you need right on your wrist. We will have that story coming up next. I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry, but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Instead of paying too much for an ipad, i got the surface 2. First of all, it comes with office and outlook. Then, with free skype calls to phones in over 60 countries, i can talk to my cousins any time. And then, i got 200 gigs of Cloud Storage free so i can get my photos and stuff almost anywhere. Others charge for that. Surface is such a great deal. I feel like i should tell somebody. Hey honestly i want to see you be brave i want to see you be brave in a we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Weight watchers down 26 , the Company Facing fierce competition from diet apps and high technical recounting gadgets. Josh lipton has the details for us. Josh . Reporter Weight Watchers helps you lose weight. Investors now trimming their positions in that stock which has lost a quarter of its value in todays trade. The company telling investors on its Conference Call that 2014 is going to be a challenging year. Part of the problem they say head winds coming from new technologies. Instead of attending weight loss meetings, people using free apps such as my fitness pal and lose it to track their weight loss and create a virtual support community. Weight watchers is also dealing with the increasing competition from wearables or Tiny Computers that track activity and calories that consumers can wear on their wrist. Theres a lot of buzz about wearables, of course. This is a market that is drawing fast. More than 17 million wearable bands will ship this year. Analysts see big opportunities specifically in wearable bands made for fitness enthusiasts. Its predicted these smart bands will reach eight million annual shipments this year and jump to 23 million by next year. The leaders in this space, fitbit, nike and jawbone, maker of the up wrist band, costs about 150. Big name investors moving into wearables. Re code reporting that jawbone is poised to complete a new 250 million round of funding, valuing the company at 3. 3 billion. Analysts telling me listen, Weight Watchers Business Model is under threat. Either they figure out social media and wearables or risk becoming obsolete. Back to you. Time for the headlines. Smucker shares down big today. It missed estimates, hurt by competitive pricing and currency related issues. Its down almost 5 . Vf corp getting hit hard. They missed profit estimates. Its 2014 forecast also falling short of expectations. The northface brand benefiting from the cold winter but being offset by weakness elsewhere. Twitter is higher in todays trading session by better than 1. 25 . The social media companys first lockup period expires tomorrow, allowing employees to sell about ten million shares. Next up, are diamonds worth the money . And under armours olympic drag. And the new way to do Airline Safety. Back in a minute. Get 36 months interestfree financing and save up to 500 on beautyrest and posturepedic. Get a sealy queen set for just 399. Even get 3 years interestfree financing on tempurpedic. But only through president s day at sleep train. Lets get you caught up on the markets. We are at session highs on the Dow Jones Industrial average, up 114 points on the dow. We are up better than eight points on the s p and the nasdaq is up almost five. It looks like we will end the week solidly positive for all three indices. Thank you very much. Power rundown time. Joining us this hour, robert frank and julia borsten. Rare diamonds, what better thing to talk about today, have gone up 20 in the past decade. Are diamonds really a good investment . For valentines day, we took a trip into the vip room at graff diamonds. They were saying they actually appreciated 20 a year for the past 20 years, particularly its the big diamonds. Heres where it gets tricky for investors. Its really the big color collectible diamonds like the 83 million diamond that sold last year that have really appreciated. Even though the diamond industry would like to tell consumers that these are great investments, its really only select few at the very top that hold or increase in value over time. Dont go to zales expecting a 2,000 ring will be worth 4,000 in a couple years. Julia, would what robert just said dampen your enthusiasm to receive a nice diamond . Heres the thing. I would be thrilled to receive a nice diamond but diamonds i think are for wearing. People dont usually get jewelry with the idea of selling it later and unless someones going to be buying a giant rock that they will be keeping in a safe somewhere, i think it would be crazy to really expect to get that kind of 20 return on investment. This is diamonds are for enjoying, not reselling. I coined a new name for this. Blingvestments. Im going to go home tonight and give my valentine, my wife, a nice share of john deere instead of a diamond. Shell love that, right . Good luck, tyler. She will really like that. Under armour defending itself after some asked whether the drag on the suits are to blame for team usas disappointing speed skating results. I hadnt heard about this controversy. What can you tell us . I think this is fascinating. Speed skating is one of these events where even just a tiny fraction of a second can make the difference between winning and losing. I looked up some of the results for the 1500 meter speed skating finals. 7 seconds separated first place from third place. The difference between silver and bronze was. 07 of one second. We are talking a tiny, tiny, tiny fraction. I have to think that having any change to the uniforms, to these suits, would have to make a difference in how fast they can go. This harkins back to controversies in the past over swimsuits and the swimsuit technology, right . Exactly. Even further back, there was an olympics, i think a few years ago, where nike was making the uniforms for speed skaters and the speed skaters actually rejected the new ones at the last minute and went back to the old ones because there was some performance issues. This is where clothing and athleticism have really merged and swimming, skating, it really makes a big difference, especially when there is such tiny increments defining the winners. Im just surprised they didnt figure this out ahead of time. You would think they would test this a ton before they headed to sochi. Im just glad and the world should be grateful i will not be wearing any of those kinds of suits. Heres one way to try to make you watch the Airline Safety videos that are so boring. Air new zealands new video has Sports Illustrated swimsuit models running through the safety procedures. Its causing a stir. We will show some video here. Come on, guys. I have to say i watched this video several times just to make sure i was prepared for this segment. Even though there are a lot of women, there are some guys in there, too. Its equal opportunity. Oh, robert, come on. Theres the pool boy. Theres the pool boy. Theres half naked canoers there. Look, theres one. I dont take offense at this. Its 100,000 people who watch. This is a safety video . Thats about women in bikinis. I think its very important to get people to pay more attention on airplanes. I fly all the time and i notice every single flight when they play the safety video, thats when people turn off and basically lean over and go to sleep for ten minutes because they figure thats their chance to tune out. I do think getting more people to Pay Attention to safety videos is important but i wonder in this situation theyre just paying attention to girls in bikinis. Theyre not actually listening. Its a good way to get you to Pay Attention about your inflation device. Thank you very much. We appreciate it. Why is this market jumping . Were at session highs heading into a long weekend. Happy valentines day, everybody. The works. Because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. Get our multipoint inspection with a a Synthetic Blend Oil change, tire rotation, Brake Inspection and more for 29. 95 or less. Get a complete vehicle checkup. Only at your ford dealer. They dont know it yet, but theyre gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, theyll find some financial folks who will talk to them about preparing early for retirement and be able to focus on other things, like each other, which isnt rocket science. Its just common sense. From td ameritrade. Lets take a look at the markets right now, because we have the dow at session highs or close to it, up 115 points. The s p is also higher. The nasdaq is on pace to close at a 13 1 2 year high right now, up four points on the trading session. Art cashan telling me that mary thompson, 70 of the time, stocks close on the upside going into a three day weekend. Right. 60 of the time they end down on valentines day. I think they are betting on the long weekend this time around. We have seen this steady drift up and also some action we have seen in the markets, weaker open and strength as we build. Some traders pointing out we have a fairly light volume day. Dont read too much into it. But the trend is your friend. It has been upward. Very strong two week period continued today. That does it for power lunch. Happy valentines day, everybody. Enjoy the long weekend. Safe travels to our friend brian sullivan. Street signs begins right now. Thank you very much, tyler. After a brief spat, the love affair with stocks appears hot and heavy once again. The dow is higher. Weve got some of the stocks, a few of the worlds biggest hedge funds have partnered up with recently. Happy friday, everybody. All that, plus even more stock picks for you from our guests. Why microsoft is picking a fight with the New York Times and as we do prepare for sochi, this happens