Transcripts For CNBC Power Lunch 20140417

Since then. Were going to look back this hour at some of the highs and the lows, and well look ahead. First lets go to sarah eisen. Welcome. Thank you. Its good to be with you here on this birthday of cnbc. Were watching the markets. Stocks struggling to post four days of gains for this shortened holiday trading week. Although the s p has recovered from earlier losses and is now in positive territory. Just the dow is down just marginally here. Ibm dragging the dow down. Weve got the nasdaq also positive, up almost 0. 25 . And weve got a pair of market gurus here on the floor of the new york stock exchange. Dominic chu and kenny polcari, cnbc market analyst. So can we go 4 for 4 here . This is a crazy market. You know, it has been, but dont forget, its a short week. A lot of people that are out. Were right in the middle of earnings season. Weve got all these other headwinds. The market being a little bit psychotic. Yesterday with Janet Yellens confused is the word. Either way, right . Janet yellens conversation yesterday just lit up the computers once again because they assume she pushed it out for another year, and shes not going anywhere. So rally the market. Heres the thing. Were also forgetting theres geopolitical concerns going into a long weekend. You do not want to be that long the market if you think that things may flare up in crimea, Eastern Ukraine and russia. You never know. You may actually see the market get weaker as we get closer to 4 00 today. Were not seeing a whole lot of volume here we should mention. Whats interesting, too, is theres no real direction about cyclical versus defensive. The second worst performing group, tech, because google is weighing things down. But ibm is weighing things down. Im glad you brought that up. Its been somewhat of a mixed bag. Weve had highprofile misses, ibm, google. General electric is offsetting some of that. Right. Listen, nobody should really be surprised because weve been talking about this earnings season being weak overall, right . So im not necessarily really surprised, but i also dont think that its the beginning of this much larger correction. I think, you know, i think we have to test the 200day, thes that dak anasdaq and the russele s p didnt get there yet. I was speaking with art cashen earlier today. He says that the environment right now is constructive. It doesnt seem as though theres any kind of real downdraft. Look at the tenyear yield, at 270. That would be constructive for stocks and that seems to be the leader. You mentioned janet yellen. Right. I think everybody yesterday in her conversation, she made everybody once again feel at ease that shes going to push it out that much further which is why you saw that action yesterday. Thats why as people kind of think about it again, the markets going to come in again and reprice. Remember, a very robust philly fed. Maybe the spring thaw is catching up. Maybe traders are trying to figure out how to put that in context. Jobless claims not too bad. Goldilocks comes to mind. Well leave it there. Its been an interesting week. We are in positive territory for the s p, the nasdaq and just now the Dow Jones Industrial average. Well see how we close out the week a little bit later. Thanks very much. Well be back with you in just a few seconds. Its been called the twitter of china. There it is in graphic form today. Weibo begins trading on the nasdaq today. Right now shares are at 19. 43. And there you can see a 14 move up today. Just one of the big movers on nasdaq today. And lets check in with seema mody whos been following them all. Hi, seema. Hi, tyler. This has been the big story here at the nasdaq, and thats weibo. After a delayed open what im hearing was due to the underwriters and not due to any technical issues here at the nasdaq. It opened for trade around 12 00 eastern. Its currently trading higher after this priced at the low end of its range. Traders say thats because of the recent selloff in the tech and social media space. Bankers are being a little bit more cautious on how they price this weeks ipos. You can see shares trading higher than its offer price by around 14 to 15 . Weibo not the only ipo here at the nasdaq, tyler. Sabre, i atravel technology provider, also trading higher than its offer price in todays trade. It did cut its size of the ipo deal, selling 39. 2 million shares for 16 apiece. This ipo, by the way, being backed by private equity firms tpg and silver lake partners. Other big movers here at the nasdaq are primarily in the semiconductor space. Sandisk, the best performing stock on the nasdaq 100 after it beat expectations. Investors many times watch for earnings from these chip players to get a better understanding of demand from clients in the smartphone and tablet space. You can see sandisk earnings providing a nice lift to some of its peers in the semiconductor space. Lastly, biotech as an index is now down about 19 since early march. But today large cap biotech outperforming. Analysts saying if youre going to try to get back into biotech, look for the large caps. Tyler and sarah, back to you. All right, seema, ill pick it up. Thank you very much. Bertha coombs now with a quick market flash. Hi, tyler. United health down for a second day, among the worst performers. The Health Insurer says it spent more than 100 million to cover the price of hepatitis c treatments in the first quarter. Gileads new drug sovaldi costs 1,000 a day for a 12week treatment. Very effective but very expensive. United trading down currently, about 3. 5 . Rival Health Insurers wellpoint, etna also moving lower. This is going to be a big theme for the insurers this quarter and this year. Shares of gilead, meantime, moving higher. Reuters reporting that the National Health service in england will invest about 31 million for sovaldi treatments there saying it will benefit 500 patients who need the treatment. Sarah . An interesting setup for biotech earnings next week, Bertha Coombs, thanks very much. Turns out 83 s p 500 companies, thats about 17 , have reported earnings so far. 63 of those have actually come in above estimates. 14 were in line while 23 were below forecasts. What is this all telling us about the recent market selloff . Have we hit bottom . What is the strategy . Scott clemens with us, chief investment strategist at Brown Brothers harriman private backing and kevin mann chief Investment Officer of asset management. Good to have you both here, scott. What are you telling clients . Are you telling them to get used to this kind of bumpiness, this volatility weve seen . I think the volatility weve seen so far is going to end up characterizing the whole year. Youve got a market where earnings, even though theyre coming in a little ahead of expectations are still modest. The market is fully valued. And thats as prices overreact to news. Good or bad. You get more days like you get so far this year. Kevin, how do you add up the earnings season . We have some individual stocks stories. Im thinking google, im thinking pepsico today. Is there a general trend that you can glean when it comes to how you invest forethe rest of the year . Yeah, i think the trend is that earnings are coming pretty much in line with expectation. We have an over 60 beat rate, which is typical. We had some disappointi inearni from ge today. I think well see more periods of intermittent. Whereas the ageold adage was always sell in may and go away, i think for 2014, its going to be buy in may and be prepared to stay as were part of a bigger, cyclical bull market. Are you feeling that enthusiasm, scott sf. I think im a little more cautious than that just given the overall valuation of the market and the headwinds we have. Technology valuations or valuations in general . Valuations in general. The one part of the world where were finding more compelling valuations and exchange for the opportunity on offer is actually in emerging markets. Its a little scary, its contrarian, but we think those are probably closer to the bottom and there are more opportunities. Kev, what do you think about emerging markets . How do you do that . Buy u. S. Stocks or be looking to the foreign etfs . Yeah, were actually a little hesitant with emerging markets right now. We have not had allocations in any emerging markets in 2014. I am bullish on europe in particular. And i do think they will outpace u. S. Stock markets in 2014. Even though i believe u. S. Stock markets will be up somewhere between 6 to 9 in 2014. But i think in the u. S. Markets, you have to be a lot more selective in this type of environment. Look for garpstyle stocks whereas internationally you can look for more of the value place. Do you like the emerging markets theme . Very much so. Particularly those that sell products that are essential consumptiontype products. Consumer staples. More Consumer Staples than anything else. Which can also protect volatility. Absolutely. Thank you for the tips. Kevin, good to see you and scott as well. Back over to you, tyler. Thank you very much, sarah. And you know, they call them the smart money, i guess thats what they call the folks who deal with the high of had tech stocks and other highgrowth stocks. The smart money, the hedge funds, but it has not been a particularly smart play over the past month. Kate kelly is here with the details now. Kate . Thanks so much, tyler. You know, one Hedge Fund Manager said to me recently the market had been diabolical so far. That was when the russell 2000 gyrated wildly during a singleday session closing down overall. He said that was a case in point of what he was talking about. You know, when the market cant decide where to settle out, it seems its particularly hard to find peace with your positions understandably. And already some major hedge funds are feeling the pain. So far this month several big names have seen losses including viking global, maverick and j. A. T. Capital which saw declines of 4 , 3 and 4 . This is just for, like, the first week or ten days of the month of april. This fall is a march in which numerous funds saw a downswing due to the Technology Stock route which is continuing with high flyers like yahoo netflix and twitter imposing particular pain on their holders. While the dow and s p have been choppy but remain solid this year, its been very rocky and the losses have been more pointed in the growthier indexes. Im talking about the nasdaq composite but also the Ishares Russell 2,000 which as a small cap indicator is a particularly popular vehicle betting on growth, betting on the faster rising stock names. Both of those are down several Percentage Points in april so far and down on the year as well. You can see this trend borne out in some of the growth sectors, too. Tech certainly but also biotech and even some areas like Consumer Discretionary products which some people like to play for growth. Its all fallen so fast and hard this month that another Hedge Fund Trader i spoke to said that colleagues were joking it would take them the rest of this year to regain their losses and actually earn a paycheck. That said, tyler, we did see some relief in the market yesterday. And today, you know, when i came to the camera was looking sort of flattish or slightly up. Well see how it turns out. Thank you very much. And actually, right now, i think the s p is on track for one of its best weeks in the past eight or nine months. Happy birthday, cnbc. We turn 25 today. And we look back at some of the funny moments on power lunch. Larry kudlow will join us with his perspective and recollections about the markets and the economy since way back in 1989. And this man has been the voice of cnbc for all these years, jim birdsall. He does all of the voiceovers. He is here celebrating with us at cnbc. Were delighted to have you and actually see you in person. Jim, take it away. Well, as we head out, which were the top songs in 1989 . Madonna, like a prayer, r. E. M. , stand, and Fine Young Cannibals she drives me crazy. Power lunch is back in two. Cnbc 25. Dont go anywhere. With all the opinions about stocks out there, how do you know which ones to follow . The equity summary score consolidates the ratings of up to 10 independent Research Providers into a single score thats weighted based on how accurate theyve been in the past. Im Howard Spielberg of fidelity investments. The equity summary score is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Good evening, everyone. Welcome, im tyler mathisen, and this is cnbcs high net worth. Its now a 35 billion a year enterprise. Todays skiing industry is a far cry from the storied, simpler days of the past. Behind the familiar facade, theres a vast industry at work. Bull, the dow at its best level since july, the s p highest since august, nasdaq up four days in a row an a. P. Twitter feed has been hacked, and it partly explains the unusual activity in the dow. Come on oh, were going to be good. The gentleman at security is sound asleep. He is absolutely sound asleep. I thought it was going to be do you know who i am moments. Im tyler mathisen. Ooh, baby there you go. Before and after, mens spanx. Spanx for the memories. I will wear spanx pridefully on these shows but not today. Im not larry kudlow is here. Theres a little bit more of me than there was 25 years ago. Theres a little more here, a lot less here. Some of which was not my own. Lets point out that we are at session highs on the major averages right now. The dow, highs, 13 points higher, s p up 4 1 3, and the nasdaq up 15 points as we watch these markets sort of stumble, but happily stumble through the week here. Yeah, its tough, though. You know, if youre trying to trade, youre getting whipsawed in a ways that really we havent seen in years. Were slamming around. If you happen to have a hemg on like short the nasdaq and youre long google, youre getting killed on both sides today. Its very difficult to even set up a hedge that works in that environment like this one even though we are moving higher. Plus, youve got the march snapback in these economic reports. So far the good is beating the bad on earnings. So far. Janet yellen yesterday, i was there, total dove. Yeah, total dove, absolutely. The empress of the doves. Absolutely. We went from were going to raise months six months after the taper ends to well, maybe in a couple of years. I know were not here to talk about that, but i cant tell you how many objections i had to her testimony last night. Its not that she isnt talented and brilliant. Shes just operating from the wrong model. Yeah. And its a model that says growth is bad. Its a model that says jobs cause inflation. Its an old phillips curve model, tradeoff between inflation and unemployment. And i say to that hogwash. Hogwash. Its all completely wrong. Now, you wouldnt be surprised to hear me disagree with larry on this front. Deflation is still the feds primary concern even though it may not be a pronounced problem here. Youre looking at europe. Theyre going to go to quantitative easing, negative rates. China, bank of japan will probably be easing further all because i dont think theyre afraid of jobs or growth. I think they really believe theres more embedded Downside Risk than there is on the upside. We, in the united states, do not have any deflation. Were not even remotely close to deflation. And were not close to inflation, though, either. What we have is price stability which is a good thing. Thats a good thing. In my humble opinion, and we worked almost my entire professional career to get here. Deflation is 5 to 10 drop in prices year in and year out that we are nowhere near that. And its a straw horse to keep the fed accommodative. Lets turn back to some of those economic numbers from 1989. Theres how much the nasdaq, dow and s p 500 have gone up since cnbc began. A moment ago we looked at some of the size of the u. S. Economy from 5. 5 trillion, i guess in unadjusted terms to 16 or 17 trillion today. Mortgage rates dropping from 11 to 4 . Larry, are we better off than we were then . Yes, were better off than we were then. The only reason i pause you paused. Is that youve got two cycles here, two super cycles here. And cnbc spans both of them. You have what i call the Reagan Clinton cycle, which is essentially 1982 to 2000, which was fabulous, fabulous in every way. Job growth, economic growth, falling deficits. Stock market, wealth, reforms. Tax reform, welfare reform, Social Security reform. I mean, what a productive period. And then the Second Period that cnbc spans is 2000 to 2014. Weve had nothing. You know, the stock market in the last 14 years is up, what, 40 . I mean, in fact, you want to hear a number just to have some fun on this . Sure. We had, in the first cycle, the Reagan Clinton cycle, the average growth rate of real gdp, 3. 8 . This current cycle, 2000 to 2014, average growth, 1. 8 . They created 44 million jobs. 44 million new jobs all right, weve created x this one, i know its smaller, but its 316,000 new jobs. And the stock market, as i said earlier, which was up ninefold in the first cycle, is up hardly anything. Let me see. 40 . Larry i thises we are, but weve stalled. Weve stalled but were better off in a lot of ways. There are Higher Quality products at relatively affordable prices. Probably in many ways and in more ways than weve seen in our lifetime. When youve made an enormous transition from black and White Television when we were born to the dawn of the internet age when cnbc was starting to gear up to where we are today. There are a lot of quality improvements, but we also have a b bifurcated economy. There are a lot more people on food stamps. That would be my feeling. And the Balance Sheet we have that was the result of an enormous credit buildup is not something weve seen since the 1930s. Final quick thought. Your point, we have stalled, but what bothers me ron is right about the technological advances including energy. We have livebetter products at cheaper products. Absolutely 100 right. But the stall of the last 14 years i find very troubling. And with respect to the future, i find it very troubling. I think there are problems with our economic policy. There are problems with our leadership. Theres a loss of confidence in this country. Its almost, tyler, its almost a dmz, a demarcation point of 9 11. If you look at the numbers, 9 11 seems to have had a greater impact. We could talk about we may not have time about policies following 9 11. But many things have changed in the world of economic policy, and i dont like most of them, to tell you the truth. Very quickly on the flip side, im much more positive. I still go with my fortress america theme. We will be the superpower of the world. Gentlemen, thank you. Great to be with you for much of these 25 years. Really. If not all of them. Lets go to Bertha Coombs for a quick market flash. Thanks very much, tyler. Were watching barnes noble. The stock moving lower on news the chairman sold 3. 7 million shares of common stock, reducing his stake to 20 . He said the sale was part of his estate planning. He has no plans to sell more stock this year. Barnes noble trading right now down over 10. 5 . Sarah . Thanks very much. On barnes noble. Two big stories in technology involving apple and zynga. Josh lipton is in silicon valley. Morgan is at their headquarters in San Francisco. Josh, whats your apple story about . Yeah, sarah, apple reports in exweek, and the company could have a big surprise for shareholders. Were going to have that story for you. And morgan, whats going on in San Francisco . Reporter yeah, so social gaming, the stakes for social gaming have never been higher. Thats why one company is betting the farm on its biggest franchise. More on that after the break. 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You are feeling powerful with a 4cylinder engine. [ male announcer ] open your eyes. To the 6cylinder, 8speed lexus gs. With more standard horsepower than any of its german competitors. This is a wakeup call. Welcome back to power lunch. Walmart on the move, the retail giant says its going to launch a Domestic Money Transfer Service called walmart to walmart. It will let customers transfer money to and from more than 4,000 Walmart Stores here in the u. S. This is this direct competition with Western Union which is moving lower on the news. Moneygram as well which currently provides Money Transfer services for walmart, getting hit. Euronet worldwide which will run the new service is gaining ground on that. This is a big deal, especially for people who do a lot of remittances, sarah. Yeah, you see that in the spillover effect with some of the other transfer stocks. Thank you. The earnings parade is marching on. Apple gearing up to report results next week. Our josh lipton is out in silicon valley. No new products, josh, but maybe some use of cash. Yeah, sarah, apple bulls, of course, list their reasons for optimism, right . The stock is cheap, theyll say, exciting new products could be on the way, and apples Buyback Program could get a big boost when apple reports earnings next wednesday. The analyst at bernstein who covers apple estimates that apple has about 10 billion left in its current Buyback Program. Now, he thinks apple next week will add 30 billion to it. Apple stock could certainly have a boost here. Its been stuck in this trading range for about two months between 525 and 550. Peter missic of jeffries agrees they should buy back more stock. It currently sits on the 160 billion of cash. Missic says that is, quote, an obscene amount of money. The company should be returning, he says, to its owners. There is one outspoken investor who has urged apple to repurchase more shares. Thats carl icahn, of course, the billionaire investor over the size of the buyback. Icahn finally waved a white flag in february in his campaign to convince apple to buy back an additional 50 billion of its stock. Not every analyst on the street thinks a bigger buyback makes sense for apple. Andy hargraves thinks the current size of the buyback is appropriate for shareholders. The apple bulls are looking for a catalyst to move shares higher. A bigger buyback could move the needle in that direction at least in the near term. Sarah, back to you. Well have to see if apple announces it. Josh lipton, thanks very much. Want to take a moment to point out stocks are at session highs right now. Dominic chu is down here on the floor. Quite a reversal and even the dow which was way down by ibm is higher now. Its higher now, in the green, although maybe by just ten points. Lets pick up where josh left off. Technology a big focus. It is the biggest sector weighting the s p 500. Makes up about 19 of the index. You see the big names there. Sandisk to the upside, good earnings story for semiconductors. Ibm and google, much larger in size, have much more of a weight. Down about 3 on each of those. You flip around to financials, the second biggest sector in the s p 500, it makes up about 16 . They are showing some signs of strength thanks to Morgan Stanley and Goldman Sachs to the upside. Better earnings. Yes, a balance there. Thats why were pretty much flat even though thats session highs on the market, sarah. Interesting to see also because some of those lap cap techs were insulated from the recent selloff. Thanks very much for the quick rundown, dominic chu. Now to the bond market, Rick Santelli tracking all the action at the can cme. Higher yields today, rick. Reporter very good. Thank you much. And having a pretty wild day in treasuries. Look at a twoday chart of 10s. There was all that compression in the mid260s on yields. Well, we blew through it. Can you see the following. Part of the reason, of course, is a long holiday weekend. And the treasury market has been, to many, well bid. So were getting a little selloff. But look at the s ps over the last several days. It really seems to have turned the corner. Art cashen call it had yesterday. Thats taking its toll. Of course, these will be the highest yields closed in about two weeks. And the dollar yen on cue also seems to be rallying. They are highly correlated. Back to you. Thank you very much. We saw it with zynga, now king digital. Social Gaming Companies going public and tumbling as investors worry about them being a potential onehit wonder. What are these social Gaming Companies doing to ease those fears . Morgan brennan live now inside zyngas headquarters. Hi, morgan. Reporter hi, tyler. Yeah, so here at zynga, its still all about the flagship franchise farmville. As you can see behind me here, the San Francisco headquarters of the company are decked out. Weve got employees Walking Around in farmerlike flannel, even giving away tshirts. This is because the company is launching its firstever fully mobile farmville game. Its called farmville 2, country escape. This is the first mobile offering in an anticipated line of new mobile offerings. And it represents a shift away from the desktop and facebook games that historically made up so much of zyngas revenue. Now, the company hoping that this is going to help the stock slump that weve seen. Weve seen shares trading down about 60 from their 2011 ipo. But zynga isnt the only company trying to reinvest itself. King digital fell the first day of trading. King has its uber successful candy crush which makes up about threequarters of the companys revenues. So weve seen other Companies Selling making acquisitions of competitors. Weve seen still more just killing off games that are unsuccessful. But here at zynga, right now the immediate game plan is mobile. Were going to have to see what the farm harvests. Back to you. All right. Morgan brennan, thanks very much. At zynga headquarters. Happy birthday, 25 years ago on this day, april 17th, 1989, cnbc made its humble debut. Were looking back at the markets then and now. Plus, weve got three of the best performing stocks under 25 worth buying. And, of course, the man, the voice of cnbc, jim birdsall, what else do we have coming up . We have the home city of todays power house. Theyve hosted the olympics, home depot is based there, and media mogul Ryan Seacrest calls it his hometown. Can you name that city . The power house is coming up. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. 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Welcome back to power lunch. Netflix is at session highs. The stock moving higher after Pacific Press upgraded it to outperform from sector perform on expectations the companys International Growth will accelerate over the next 18 months. The stock had had lost a quarter of its value since hitting an alltime high at 458 last month. But looking pretty good. Tyler, did you ever think 25 years ago when you were styling with your brick mobile phone that youd be able to watch a movie in the palm of your hand . Absolutely not. I think it is the single biggest revolution isnt it . Apart from the computer revolution, but its all of a piece. Its all part of the digital revolution, bertha. It is amazing. It really is. To mark our 25th anniversary, were taking a look at the markets then and now. Brian sullivan with us to explain. Brian . Okay. Tyler, weve taken a look at a lot of stocks. Those arent the only investments out there. Many people invest in commodities. Lets see how commodities have done since cnbc began. Now, the dollar we know has been dismal. King dollar, more like a court jester. Its down 18 . Gold, up 239 . Not a bad return. But guess what . The best major commodity of all the one that you should have probably invested it in was oil. In fact, that is up 439 since cnbc kicked off. In fact, back in 89, a gallon of gas was 1. 12 a gallon. If you inflation adjust that up, its still, tyler, only about 2. 13 a gallon in todays dollar. So gasoline has gotten exponentially more expensive. What about the overall economy . Gdp much smaller than today. The u. S. Was about 5. 5 billion. Thats about the same as japan is right now. And you probably know this. Thats a compliment because you look about 33 years old, tyler. Ha, ha. But a 30year mortgage was an average rate of 11 which is funny because as we creep back towards 6 every once in a while, people scream and moan its going to destroy the housing market. Even 25 years ago, it was double, about triple the price of right now. All right. Thank you very much. Sarah, down to you. I think i was supposed to toss to sarah which is probably why i wont be here in 25 more years. Im not very good at this job, but i do appreciate the content. You will be here, brian. I was distracted. I was looking at a dollar index chart down 18 in the cnbc 25. Brian sullivan, thanks very much. And now to ring in cnbcs 25th anniversary, were looking at the top 25 performing stocks over the past year. And each of these stocks are under 25 bucks a share. Jim eurio of tjm institutional services, also contributor, picking his top three. Your first pick is bank of america. I guess youre not dissuaded by some of the legacy issues plaguing this company. No, and i definitely am, but i think now that bank stocks are more tied than ever to Interest Rates and to the yield curve, and i think were in a situation now where rates are going higher and the curve is going to steepen. Since doddfrank, they took away ways to make money. They ride the curve more than ever. Lets go to ford. Its certainly been an outperformer thanks to alan mulally. You like this one, too. I do. Particularly when you look at the american car companies, clearly fords the best. What i like about ford is theyve really focused on fuel efficiency to compete with the japanese models while still having the f150 as their bread and butter. Theyve increased their dividend. Ford is a decent stock. Plus if you truly believe the economy is getting better, and i do, then these names should do well. How about your last picture here, southwest airlines, luv, over one year, its up over 2013, it went up 84 , jim. Right. And people who follow me on twitter know that ive been riding this horse for quite a long time. Ive had this position on the whole time. Ive traded around it sometimes. And sometimes magically turned a great position into a pretty good position, but ive had it and i still do now. What i like about luv, when the economy went bad, it used that as an opportunity to gain market share and create efficiencies, and theyve done really well at that. Plus theyve put in a brilliant fuel hedge, and traders love that sort of thing. If luv trades above 24. 15 to 20ish, thats where i would increase my long position in that. Jim, thanks very much. Thank you, sarah. Brief rundown of stocks under 25. I invite you to close your eyes. I just want you to listen to the voice. No, not adam levine, not blake shelton, jim birdsall, the voice of cnbc. Close your eyes and listen. Im going to really have to sound good now. The city of todays power house hosted the super bowl twice, spike lee was born there. Its the home to u. P. S. Can you name that city . More power lunch coming up. Excuse me. Yes. Were on Live Television here. This is live . This just in. Ge is bankrupt. Sue herera. How are you . Ooh. Are we going to make hot spanish love right now . Stocks and bonds . Stocks and bonds. Are you familiar with stocks and bonds . I dont know anything. I just wet my pants. I just wet my pants. Well, hang on. I think i have some kleenex. No, i dont. Yeah. Hold on. Enough with the pleasantries. Are you sure that tom brokaw started this way . Whoyour boss . Rk for . Yourself . Your parents . Your family . At baird, what matters most to you. Matters most to us. As an Employee Owned firm, our Financial Advisors have the freedom and resources to realize a plan to fit your familys unique needs. Well listen. Well talk. Well plan. Baird. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Maestro of project management. Baron of the buildout. You need a permit. To be this awesome. 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. aaron purrrfect. vo meeeow, business pro. Meeeow. Go national. Go like a pro. Welcome back to power lunch. Look at shares of aspen insurance. The company adopting a oneyear shareshoulder Rights Program two days after rejecting a takeover bid from rival property and casualty insurers. The socalled poison pill is triggered if a person or group buys more than a 10 stake in the company. The stock currently trading down nearly 2 . Tyler . All right, bertha. Time for a little bit of real estate eye candy. Power house time. Before the break we gave you hints as to which city we are in. It has hosted the super bowl twice. Spike lee was born there. It is atlanta, georgia. A realtor with Berkshire Hathaway perimeter in atlanta. I guess that means he cant come downtown. Hes got to stay on the perimeter. Today we focus on the city of roswell which is located about 20 miles from downtown. Lets look at the stats for greater atlanta. Average sales price, 389,000, average selling price, about 245,000. 4. 7 months of inventory on the market. Properties are on the market for about 80 days right now. Welcome back. Good to see you. Thank you. Our first listing is at 510 wheatridge bluff in roswell. Asking 399,000, 5400 in taxes. A big house, 4800 square feet. Why do we like this one . Its a spectacular house. Its located in Brookfield Country Club. For the price, its actually priced very well, considering all of the other houses in that subdivision. Its large. As you said, five bedrooms, four baths. Its been renovated. That house was built in 1987, as you can look at the pictures, can you see its been renovated very nicely. Hardwoods throughout. Granite countertops. For 399,000, its a steal. Yeah, and we move on to our second listing at 1220 oakhaven drive in roswell. This one costs more, 459,700, low taxes, 2600. Maybe thats one reason why. Four bedrooms, 3 1 2 baths, 3200 square feet. Why is this one asking more for a smaller house . Great question, tyler. This house actually was completely renovated. This house was actually built in 1968. And even though its smaller, it has a lot of highend finishes. This particular country club Brookfield Country Club is very sought after. Its one of the originals here in atlanta. Although its a ranch and has a little bit smaller space because its been renovated so well, thats why you have a higher price point. Higher price point. Lets move on to our power house of the week. Were going to step it up. 1015 balmoral lane. Like balmoral castle. Balmoral. Like the castle where the royals hang out. Listing 1. 27 million. Annual taxes, a modest 10,700. 7 beds, 7. 5 baths. Tell me about this one. This is a spectacular house. Actually its more than the other houses in the subdivision, its actually a great price for the amount of house that you get. This particular house has close to about 10,000 square feet. Whoa. It also has an additional 2500 to 3,000 or so unfinished area that somebody could fin your honor and make it even bigger, as if it needs to be. This particular house has all of the highend finishes. Its an entertainers dream. It has a very unique layout. You know, they did away with the living room. The formal living room and actually made it more of an entertainment area which people love here in the city. This is an entertainment city. And it overlooks a waterfall and a lake. Its a very Beautiful House as youre looking through the pictures there. Its exquisite. Thank you very much for being with us and have a pleasant holiday weekend. To scott wapner now with some breaking news. Tyler, thank you so much. I want to pull up shares of herbali herbalife. According to my sources, the illinois attorney general has opened an investigation into herbalife over its business practices. I am told from my sources that the Attorney Generals Office in illinois has received at least a dozen complaints. And that it has been in contact with herbalife over its investigation. We have reached out to herbalife, and we are awaiting a reaction from the company. Whats interesting here is this follows a flurry of activity around this company from an investigative standpoint. Of course, there have been reports out there that new yorks attorney general had been investigating, the ftc has opened its own investigation, and all of that culminated with reports late last week that the fbi had been investigating herbalife but had had yet to turn up anything. In fact, herbalive had said at that time it was unaware of any sort of fbi investigation. But what i can tell you now from my sources is that the illinois attorney general has, in fact, opened an investigation into herbalive. And shares are reacting. They are still in positive territory, but they are down certainly from the highest levels of the day. Sarah, ill send it back to you. Yeah, you can see the reaction immediately, scott, with herbalife. All of the regulatory interests. Well, the 58 million sendoff here. Plus, are hedge funds to blame for the tech wreck . And putin and snowden chatting about russian surveillance . All of those stories in our power rundown coming up next. announcer scottrade knows our clients trade and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Drivers, tgo our marks. Its chaos out there. But the mclass sees in your blind spot. Pulls you back into your lane. Even brakes all by itself. Its almost like it couldnt crash. Even if it tried. The 2014 mclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. On brand name mattress sets. Get three years interestfree financing plus, get free delivery, and sleep trains 100day low price guarantee. Sleep trains interest free for 3 event is on now. Your ticket to a better nights sleep welcome back to pourer lunch. Shares of chipotlity hadding session lows. The company says its going to increase menu prices because of high costs for steak as well as increasingly expensive costs for avocado and cheese. Right now chipotle off more than 3 . Tyler. All right, bertha, thank you very much. Lets go to the power rundown. Sarah eisen, eamon javers. Edward snowden making a surprise appearance at Vladimir Putins q a session, asking him about his stance to mass surveillance of his citizens. Lets listen in. Id like to ask you a question about the surveillance Online Communications and the bulk collection of private records by intelligence and law enforcements. Does russia intercept, store or analyze in any way the communications of millions of individuals . Well, he kind of answered no, eamon. He said shocking that this would even be asked, right . Yeah, look, the whole thing was a shocking and extraordinary moment, tyler. Earlier this morning, a lot of questions that are unanswered as of right now. Was snowden live or on tape during that interview . Was there any coercion involved or was this snowdens idea in the first place . What Vladimir Putin said was no, the Russian Secret Services do not do mass collection, but they do go after specific individuals for collection of information with a court order. They say they dont have enough money to compete with the americans on the intelligence front. So a fascinating exchange and a whole lot we dont know about, tyler. Lets move on to bigname tech stocks falling off their highs. And blackrock Ceo Larry Fink saying its being driven in part by hedge funds rather than longterm investors. It sounds reasonable to me. Yeah. And thats what you hear down here on the floor. And thats why theres sort of some calm even though weve seen this dramatic selloff in some of the tech names. I go back to david costin, chief equity strategist at Goldman Sachs. You cant really compare this to, say, the tech bubble. Theyre so much different, far less profound influence on the broader stock market from some of these tech names. And you dont have those kind of valuations that were stretched like they were back then. The returns havent been as good. And if you step back, its sort of the larry fink idea, that the longterm investor is in it to stay. And perhaps this is just a little correction of some outofcontrol valuations. Perhaps its a healthy thing, getting rid of that irrational exuberance. Now its swim time. We all get to jump in the pool. Yahoo recently fired the coo. Ee walking away with a severance package of 58 million. He was only on the job for 15 months. For me, this is a failure of the board to supervise what is being offered in terms of the shareholders money to employees. Your thoughts, sarah . Well, yeah, failure of the board, of the ceo, marissa mayer. Interestingly enough, her pay dropped down 32 from 36. 6 earlier. All of this is thanks to alibaba and the 24 stake. Thats whats driven up the stock. They say in their defense is that the stock went up so much, basically doubled, so what . He would have then walked away with, what, 29 million instead . Tyler, what you see across the board, though, with ceo compensation is this idea that every ceo and executive wants to be paid on an aboveaverage basis. These compensation consultants figure out what the average is and then tick their guy up just a little more is everybody is in this sort of race to the top. Id love it if they paid tv reporters that way. This feels like pay for nonperformance to me. 15 months. 15 months and got disinvited. Talk to you soon. Can stocks make it 4 for 4 . Plus, the voice of cnbc next. We asked people a question, how much money do you think youll need when you retire . Then we gave each person a ribbon to show how many years that amount might last. I was trying to, like, pull it a little further. [ woman ] got me to 70 years old. Im going to have to rethink this thing. Its hard to imagine how much well need for a retirement that could last 30 years or more. So maybe we need to approach things differently, if we want to be ready for a longer retirement. If we want to be ready for a longer retirement. Save you fifteen percent or more on car insurance. D Everybody Knows that. Well, did you know pinocchio was a bad motivational speaker . I look around this room and i see nothing but untapped potential. You have potential. You have. Oh boy. Geico. Fifteen minutes could save you fifteen percent or more on car insurance. All righty. Folks, here with jim birdsall who has been the voice of cnbc for all these many years. What were you doing 25 years ago . I was doing commercial work only. No promo work. No tv promo stuff. No coming up next, none of that stuff. And now you have we are one of your main clients. Absolutely. But you also do . Well, ive been the voice of the hallmark hall of fame for 25 years. Give me a little hallmark, will you . When you care enough to send the very best. Hallmark. Well return to the hallmark hall of fame after these messages from hallmark. I just i the man could just read me the phone book, and i would just be calm, my blood would go down. You also do nfl films. Im one of the voices of nfl films. I do mainly highlight films. Greatest games series, some of the humorous pieces. Stuff that you the greatest histories. And i know that you talk about mimicking or studying the masters. And one of the great masters was john facenda. I was told by steve sabol, be jim birdsall. Its been a pleasure. A Little Market update. Every time i hear that voice. Let me give you a market check because it looks like we are at session highs and in rally mode for the dow, the s p and the nasdaq. Moving higher here as we enter the afternoon. If we do close higher, that would be four Straight Days of gains for u. S. Stocks. Were seeing treasuries in selloff mode. The japanese yen has turned weaker. All of that setting us up for a bullish close out to a shortened trading week, tyler. Thank you very much. Jim, would you take us to power lunch, please . That will do it for power lunch. Is that all i have to say . Say street signs street signs is next on cnbc. See you tomorrow. No, we wont, its good friday. That was fantastic. I cant follow that up, guys. That was awesome. No, you cant. That was amazing. Hi, everybody. The numbers of the day are 25 and 515. Cnbc is 25 years old, and in that time, the s p 500 is up 515 . Hi everybody. Obviously a big day for us here as we celebrate a milestone. Much more on that ahead including if todays stock market is even more difficult to understand than it was a quarter century ago, what it means for your money that Vladimir Putin apparently thinks its 25 years ago. And whats the better investment for the next 25 years . Is it stocks,