Transcripts For CNBC Power Lunch 20140605

Apparently to pay more than 30 billion for tmobile. What this now means for the industry and for consumers like you. First, though, lets check in with sue at the New York Stock Exchange. Sue . Good to see you, ty. Stocks are staging a bit of a rally on the back of the European Central banks move to take interestneglect territory. The dow and s p at record highs. Off our best levels but not by much. The Dow Jones Industrial average up about 95 points on the trading session. The s p is higher as well, as is the nasdaq, up about 41 points on the trading day. S p is up. 3 . The yield on the tenyear is 2. 577 . And look at the euro versus the dollar right now. And that is going to be a very interesting trade. Rick santellis going to cover that trade for us as well. Cnbc market analyst Kenny Polcari joins us. I want to turn first to whats happening at the s. E. C. Yeah. Mary jo white finally taking up the issue. What do you think . I think its great. I think its about time that somebody is going to take up that issue because listen, weve been talking about it for a long time. There have people that have been very concerned about it. The flash boys only brings it to the surface. Hes not the only person in the country that knew or thought or was frustrated with current Market Structure. So if that brought it to the surface, i think thats great. A lot of people think thats great. Register and open their being boos. Well see. To the market, the ecb did deliver. Mr. Draghi delivered nicely for the market. Why should it matter u. S. Investors . Its going to matter because if hes going to fuel that fire in europe, right, get that to finally turn around and take hold, thats good for everybody. Its good for europe. Its going to be good for us, right . Youre going to see that safety trade, money thats been piling into bonds is going to come out. Look whats happening. I said it this morning. You did. Boom, and the markets going to go higher. Where its going to go is anyones guess. Theres no resistance here at the moment. Yet i think that overall its absolutely a positive story. Would you buy into the market today, very quickly . If youre a longterm investor, i think you have to stay involved. If youre the trader type, listen, there is a chance for a pullback, but yes, this changes the game. All right. Kenny polcari, thank you very much. To Morgan Brennan for a market flash. Two retailers heading in opposite edirections. Vera bradley in the red. The handbag and accessories designer said First Quarter earnings slid 29 as sales and traffic declined. The company issuing a Second Quarter and yearly outlook that is lower than street forecasts. So the stock currently trading down just about 4 . But a different story for zumiez, the specialty retailer trading at its highest levels for the year. Thats as may samestore sales growth of 3. 6 easily beat street estimates. Zumiez trading up just over 7 . Back to you, tyler. Morgan, thank you. Deep or dive into europes historic move. Besides cutting about is rates and promising theyll stay low for a very long time, the European Central bank did something a Major Central Bank has never done before. They have imposed negative deposit rates on european banks. Its all part of an effort to kick start the eurozones economy. And it koo major implications here in the United States. Our chief International Correspondent Michelle Carusocabrera here with the implications. What exactly do we mean when we say negative Interest Rates . So just like you and i keep our money in a bank, we have a bank deposit somewhere get 0. 10 . Exactly. Banks have deposits, their central bank. Now the central bank of europe is telling all those banks, if you keep your money here, were not going to charge you to keep your money here. So what they want is for those banks to lend that money out to the consumer and the real estate economy, et cetera. Exactly. Go put it to work. Youre not going to make money. Youre going to lose money. Ecb also announcing a targeted ltros. What in the world are they . We have built a wall graphic to explain. Look at that. A tltro is, targeted longterm refinance operation. We built it on purpose. So the letters there they go. That is a really, really wonky thing. Yes, it sounds it. But the idea is very simple. The head of the ecb has created a structures, and they said okay, heres what were going to do to you banks. Were going to incentivize you to stop lending money to governments and instead lend money to Small Businesses, not for mortgages, not for municipal governments, not to financial institutions, to real businesses. And well give you better rates if you do that. I see. So another way of getting money out into the economy. Exactly. Heres the incentive to do it. Exactly. Now, finally, and maybe most importantly for american consumers, american investors. Yep. Why do we care about so much about what in the world the ecb is doing . So a couple of reasons. The european economy collectively is larger than the u. S. Economy. If it gets better, it gets bet us for us. All the stuff theyre doing as well also impacted their currency and their Interest Rates which also sometimes serves as a competition to us. The euro got weaker. It suddenly strengthened. That would start to affect our imports. Exactly. In ways that would be deleterious. Yeah, it could hurt our exporters, et cetera. Tltro. Exactly. See, less money to governments, more money to Small Businesses. Thats the impact. Thats what they hope. Thanks for the explanation. Sue, down to you. Michelle is the best at that, ive got to say. She really is. All right. So Hedge Fund Titan david tepper says the ecbs move has eased his market concerns he had. Is that a green light . Our next guest believes its time to jump into europe. Jack avlin at bmo private bank. Jack, im going to start with you. How significant is this move by europe, and how do you trade it . You know, its pivotal, sue. This is a central bank thats been all talk and no action for years. And theyve been able to get away with it. It finally came down to actually doing something. And they certainly surprised me to the upside, and i think surprised most of the market. To me, this means now that the baton of central bank easing can move from the United States, which has been pulling its weight for the last five years with the help of japan, of course. Now into europe which could allow us to extend this rally with a kind of a eurocentric International Developed focus. These markets are trading at probably a 15 discount to the u. S. And so i think thats where the next leg of this rallys going to go. Interesting. Waseef, do you agree with that . Oh, absolutely. Jack just used my apology i was going to use, a relay race and the ecb just grabbed a baton from the fed and has started running. But i think what surprised the parkt, they basically thought of the ecb as the boy who cried wolf. That theyve been saying theyre going to do some kind of a program which hadnt materialized for months on end. And now that they finally put their money where their mouth is, the markets are reacting to that. As you mentioned earlier, weve been positive on europe for almost two years. Largely because of valuations because they were so attractive for a lot of these global conglomerate type of companies that really arent necessarily tied to the european economy but the global economy. But this backdrop of further money printing just helps that perspective. And lastly, the targeted ltro is going to help on the employment picture because of the Small Business component. Thats really positive for europe as well. Jack, i noticed go ahead. What was, i think, that the european parliamentary elections where these noneuro groups got so much so many votes really sent a shot across the bow to all policymakers in europe to say, look, you can only take austerity so far before it starts tearing at the social fabric of our continent. We really do now need to, you know, to blend this austerity with some kind of monetary easing. Weve got to get this currency down to just ease the burden on a lot of these southern countries. And so i believe that fair value for the euro under a program like this is probably, you know, 120, maybe even a little bit less than that. I think the best way to play this, as were doing, is invest in europe but hedge that currency back to the u. S. Dollar because otherwise youre going to take two steps forward and then one step back with a currency thats declining. Latsif quickly as we wrap this up, youve been bullish on europe for some time now. Do you add to that position now, given what the ecb has done . Yeah, i think what were looking to do is become more selective because europe has rallied in anticipation of that over the last two years with all the rhetoric from mario draghi and the addition of ltro. So were targeting specific pockets to see where is more of the attractive value within europe . And so germany remains a strong area, although it may not be reacting as strongly today over the long course because of its exports capabilities and the banking sectors that it has. We think thats going to be beneficiary and also italy from its valuation perspective. Thanks, gentlemen. Good to see you. Ty, up to you. Soue, thank you. To General Motors, releasing its much anticipated internal report into its ignition switch problems that led to at least 13 deaths. Ceo mary barra speaking about it, Congress Planning new hearings. Cnbcs phil lebeau is live at a gm dealership in warren, michigan. Dismissals but no highlevel firings. Is that curious to you . Reporter no. When you look at the investigation. And here it is. Its hard to tell, but 315 pages, this is a massive report. It makes it clear that there is a lot of things that werent wrong at General Motors, says but it was not top executives turning a blind eye. Take a look at what mary barra said to the former u. S. Attorney who was conducting this investigation. She referred to the gm nod. She said the gm moderate is described when everyone nods in agreement to a proposed plan of action but then leaves the room with no intention to follow through, and the nod is an empty gesture. That summarizes a lot of what youll see inside this investigation. As far as the fallout from this investigation, today General Motors announced that 15 employees have been dismissed. Many of them, at least half being described as senior executives, five others have been disciplined. The main cause for why theyve been let go or disciplined, incompetency and negligence. Heres ceo mary barra. Well, clearly there were a number of safety recalls that occurred over this period. Some, you know, some fairly significant. I think if you look at the root of this issue, first off, you had a part that was released to go into production that didnt meet the performance requirements. And then, sadly, when the problems first occurred, they were misdiagnosed. They werent deemed a safety issue because engineers didnt understand the relationship between the switch and the circuitry that deploys the air bag. Reporter and because those air bags did not go off in at least 47 crashes, General Motors at this point says 13 fatalities have been linked to the defective ignition switch. However, ken feinberg who has been retained by General Motors will determine if the number of fatalities linked to this defect and the number of injuries linked to this defect actually rises. He tells us today, i have already drafted some preliminary compensation ideas and plan to share them in the confidence over the next few weeks with lawyers, Public Interest groups, gm and others interested in the compensation program. Later this summer, we will likely hear about that compensation program. By the way, as you look at shares of General Motors, a note out within the last half hour from Barclays Says there is a good start towards accelerating a culture change at General Motors. However, the note also goes on to say that the 2. 5 billion legal reserve that many on wall street are looking at saying this is how much it will cost General Motors, or 2. 5 billion, excuse me, that is too conservative based on the likelihood we are going to see the number of fatalities or injuries rise over the next couple of months. Guys, it is a massive report. You come away with the conclusion a lot of people in this company just kind of shrugged and said okay, somebody else will take responsibility. Phil lebeau, thank you very much. Phil reporting from warren, michigan. A lot in the news about the health of the American Labor market ahead of tomorrows key jobs report. The number of americans filing new unemployment claims edging higher last week, but still near a sevenyear low. New report by the Outplacement Firm Challenger Gray says job cuts in may rose to the highest level in more than a year. The tech sector being part of it. And according to data by reuters, more americans are returning to the work force. It says for the first time in six years, the share of people who either have a job or are looking for one is on the rise. In a majority of u. S. States. So what can investors expect from tomorrows big employment report . You know whos going to tell us. Steve liesman. Tyler, big week deserves to be capped off by a big piece of data. Ecb, vehicle sales, big week for stocks. And tomorrow a big week for the data. We cap it off with the jobs. Were looking for 210,000. Thats a decline from the 288,000 in the prior month. Unemployment rate ticking up to 6. 3 . Average hourly wages should improve. Adp reported on wednesday this week. It fell from the 215 reported in the prior month to 179,000. Let me put all the different indicators we have into one chart here and tell you what were seeing here. The employment components, they split. One improved, the Services Sector, the bigger Services Sector improved. Manufacture manufacturer and jobless claims improved. Adp weakened. Their jobs component, it improved as well. Lets take a look at claims here. I think thats the next chart we have. This is the ism job gauge. You can see one went up, one went down, but neither is in a very impressive level relative to where they were right in here. So not looking for gangbusters from either one of these two. And now look at claims which you can see after a very long spike, has been on its way down, reaching new lows that we havent seen since 08 or the recession began. Tyler, when i put it all together, what i come up with is we should get good job growth in that 150,000 to 200,000 range. I dont see anything in any of these indicators that suggest things are going to be flying off the handle upwards of that 250,000 range. I would not price anything in the 150,000 to 200,000 range. 150,000 would be low, wouldnt it . It would be, but weve had this longrunning 200plus range here. Theres not been a whole lot of snapback expected from the Winter Weather that we had. Even though we started some of the other data, we didnt have a big decline in the hiring. Youll be there at 8 30. Im there. Lets go down to eamon for more on this breaking story about Mary Jo White and possible new regulations or a study into fast trading. Eamon . Thats right, tyler. Mary jo white speaking as we speak. Shes in new york giving an address, and shes revealing a series of proposals here now from herself as the head of the s. E. C. For Market Structure. And in the wake of all the controversy over highfrequency trading, in the wake of the flash crash, the s. E. C. Now asking for a series of improvements. And let me go through some of the bullet points, the contents of this speech. Shes calling for what she calls an antidisruptive trading rule. The details of that to be worked out by the s. E. C. Commission staff. She wants to eliminate the exemption from finra for dealers. She wants the s. E. C. To really look inside firms algorithms and explore how theyre doing Risk Management in terms algorithmic trading. She also said Research Suggests that it may be the case that low latency tools tend to advantage certain types of prop trading strategies. Thats been a point of some controversy here. And also she says a fairness concern is the latency difference between the direct at that time data feeds and consolidated feeds, in theory for there to be an absolutely fair market, there should be no difference between the consolidated feed and the direct feeds. She also says exchanges have an obligation to provide data to the centralized feed in a way that is not unreasonably discriminatory. And she says we must consider whether the increasively expensive search for speed has passed the point of diminishing returns. So a fascinating and important sweeping speech from Mary Jo White as she unveils her thoughts on highfrequency trading and what the s. E. C. Ought to do about it. And importantly, white is not somebody who has been a leader in the efforts to reform market construct. She famously said after the Michael Lewis book came out that the markets are not rigged, after Michael Lewis said that they were rigged. So this is nonetheless a series of a fairly substantial proposals for what shed like to do to fix Market Structure going forward. Guys. Yeah, but you know, eamon, i bet it was the book and the controversy around it that sparked her interest in this. It will be interesting to see how this plays out. Thanks so much. You bet. Stocks rallying as the ecb brings out the bazooka to boost growth. Nasdaqs up 43, better than a full percent, and the s p is up 0. 6 . Was it a good move . The market seems to like it. What should our fed do in response . And the big jobs question. Our own larry kudlow waiting in the wings to give his unique take. Hes going to join me in post 9 in two minutes. Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. With know elcome back to p lunch. According to dow jones news wires, the company is among the bidders for duke energys 11 midwestern plants. Dynegy is competing against several firms that have submitted firstround bids. Dynegy trading up 2 and Duke Energy Trading up just over 1 . Sue . Thank you very much. Were going to go to bob pisani who had a chance to get to ms. White who is at that conference where we find bob talking about new rules perhaps, regulations, proposals to address dark pools and flash trading. What did she tell you, bob . Reporter well, its very interesting. Sort of comprehensive review of the current Market Structure. I did get a chance to catch up with her as she was leaving the conference. And she insisted to me that the markets are not rigged. Take a look. The clear message is the markets arent rigged. We have the strongest, most resilient markets in the world. Again, it doesnt mean theyre perfect. And we obviously are constantly working on them to make them fairer and better serve all investors and companies, to try to raise capital. Reporter do you think a more forceful statement would have been appropriate given the amount of coverage this mans comment that the markets were rigged got . Resilient in the world and not rigged and not broken and were trying to improve them at all times is pretty strong statement, i think. Thanks so much. Thank you. Reporter there you see that. The important thing is she kept insisting that investors are much better off today than they were 20 or even 30 years ago. Then she went on to say we need to still be vigilant. Shes proposing a Market Structure Advisory Committee that would give her advice on where the s. E. C. Should be giving including how to deal with highfrequency trading. She says we need to improve the technology testing. They have a rule called r echlr there. That would strengthen testing procedures for technology to make sure we have fewer trading glitches, fewer flash crashes out there. She also talked about a new idea. She calls it an antidisruptive trading rule. Basically the idea is that it would be examining the status of proprietary traders. These would include highfrequency traders, there would be potentially new rules. Shes a little vague on that. She also talked about oversight of these trading algorithms. What shes trying to signal here is that theyre going to be looking a little more carefully as the why highfrequency is occurring but more the heart of it. On dark pools, she said theyre a little concerned about the fact that about 40 of the volume is in these dark pools and that they are obviously taking away business from the lit exchanges. She thinks they should look into that. Shes a little concerned about payment for order flow. She said shes concerned about potential conflicts of interest over that. She hasnt said that before. Thats very interesting. Finally, she said she wants exchanges to do a comprehensive review of order types. These are different kinds of ways that orders can be put into trade stocks. There are hundreds of these orders. And this is one of the complaints a lot of traders out in the community have had that is very confusing. So the bottom line here, she seems to be endorsing a somewhat simplified trading structure and definitely wants a little more oversight potentially of highfrequency traders. Very interesting speech, still going through all the details. Sue, back to you. Thank you very much. That was a great rundown on everything ms. White said. Appreciate it. Larry kudlow joins me to talk about this. Whats your reaction first, larry . And second, do you think it will help address some of the doubts by the general public about the Capital Markets . Its possible, sue. I dont know. Look, ms. White said the right thing here. Michael lewis is wrong. The markets are not rigged. Thats all a lot of crap. I hope he sells a lot of books. Hes a fellow princetonnian. Its book selling. Its not accurate. Now, i am offended by front running. I always have been. I always will be offended by front running. That does hurt retail investors. It hurts a lot of people. Can you stop the technology in such a way as to stop front running . I wish i knew. Im not smart enough to know. Do i want to see a whole lot of new regulations from the s. E. C. . Nope. All right. Nope. But its a step in the right direction, i would think, in terms of providing more transparency to the markets. Im all for more transparency. I am not, however, for lots more paperwork that would be expensive. You no hknow, Financial Service frontpage stories, jobs are going down, not enough activity. The big banks will have another wave of firing. More expenses, more regulatory costs, no, i dont want that at all. Lets pinpoint, if you could do it smart, lets be smart. Swift and smart and targeted. Thats as far as id go, yeah. Im not real big on economic regulations, as you know. I do know that, having known you for 30 years. I got that message loud and clear. But i also know you believe in free markets and fair markets. No, i want fair. Legal. The rule of law is absolutely crucial. You know, let me just say that. Let me turn you to the ecb. They went negative on Interest Rates. What do you think . I think a couple things. Im hearing this word game changer going around. Gee, with all the greatest respect in the world, i dont think euros been a game changer for at least 500 years in world history. In fact, if i go back, i used to study. The last real game changer was attila the hun invading rome. I think todays ecb thing should not be fantastically overrated. And by the by, theyre not done yet because if they really want to inject more liquidity which i guess is their goal, theyll have to buy bonds and have asset purchases. So thats coming. Draghi is going very slowly. Can i say one thing, please . Yes. We all obsess about Central Banks including the fed. What about supply side fiscal policy and regulations . All right. Heres a fact. The strongest economy in europe today, the united kingdom. Right. They lowered tax rates. In fact, their Corporate Tax rate is going to 20 . They raised Capital Gains tax, didnt make any money. Rolled it right back. France, these dopes in france, these socialists, they jack up the tax rate to 75 . All right . What did the numbers say . They got half the revenues they thought they were going to get. What should they do . Slash tax rates, privatize stateowned industries, deregulate labor markets, ditto for italy, ditto for portugal. We need incentives. We need aftertax incentives to grow and invest. Its not happening in europe, and its barely happening here. Do you think it will . Because now granted mr. Draghi made some pretty what the market is interpreting as dramatic moves. And it took him a long time to do that. Its going to take a long time to reform their fiscal policy. I like draghi. I think hes doing the best he can. But hes got one hand tied behind his back. Look, germany deregulated lower tax rates. Sweden deregulated lower tax rates, okay . Denmark, england, these are the better growing countries. Theres a lesson there. So much of this is an absence of economic incentives after tax, after regulations. So whats draghi going to do, the poor guy . He cant buy up every bond in europe. Thats true. All right. Same thing here. Same thing here. Look, the greatest thing we could do for economic i agree with steve liesman, by the way. Im going to take the under on tomorrows whatever, 220,000 jobs. But the best thing we could do here is either slash or completely abolish the Corporate Tax. The Corporate Tax rate, yeah. And you though corporations dont pay taxes. People out there, im not letting them off the hook. Its the wage earner who pays the tax. Its the consumer who pays the tax. Thats what we should do. Lets bring the money home from overseas without penalties. Lets abolish the Corporate Tax system. Lets stop the health care nationalization which is a job killer. Lets ventilate. Today was the tenth anniversary of the passing of ronald reagan. Yes. My former boss showed us what lower taxes and deregulation can do to spark 4 to 5 economic growth. Would somebody please listen to what the gipper had to say . Well, they just heard it from you. We have to have you back because then weve got to get into congress and the unwillingness i want to. I want to. Well get you back. Because theres blame on both sides of the aisle. There is. Larry kudlow, good to see you. The gold markets closing now. Since we have a rally, lets see where the gold market sits right now. Its up about 9 bucks on the trading session. We have a better than 1 advance, 1. 5 advance in the silver market on the trading session. And ty, up to you. Sue, thank you very much. Nasdaq, the big winner today. Up about a percent in todays rally. Seema mody following the big movers out there. Seema . Hi, tyler. Well, the headlines out of europe are certainly providing a nice lift to stocks. The nasdaq, remember, any macroeconomic concerns whether it be ukraine or the ecb decision, typically never good for Technology Stocks which is seen as a riskaverse sector. But tech stocks in todays trade moving to the upside. In fact, amazon, the biggest mover on the nasdaq 100, the biggest winner i should say on the nasdaq 100, excitement ahead of its Product Announcement on june 18th. Speculation it may be a smartphone. Whole foods, illumina. Old tech, microsoft moving to the upside. The plans for the company, focus on cloud, windows to mobile. And then theres two individual tech movers. Siennee ciena. It got a nice boost from International Markets and analysts also talking about its recent entrance into the cybersecurity market. That stock moving in todays trade. Back to you, tyler. Seema, thank you. Dialing into a Major Telecom deal. What does it mean for the sector and consumers . Morgan brennan. Thanks, tyler. Well, more consolidation. Sprint moving forward on a bid for tmobile, but what does it mean for the rest of the Telecom Sector . Sprint will give you that after the break. Ncial noise financial noise financial noise financial noise [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. My mom works at ge. 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. Sprint and tmobile apparently one step closer to becoming a single company. A lot going on in tell lowcom. There is a lot going on in telecom. Thanks, tyler. Its not official yet, but a deal is expected to be announced this summer. Sprint would pay about 40 a share for tmobile. That would give it a valuation of more than 32 billion. And tmobile u. S. Owner Deutsche Telecom is expected to retain a 15 to 20 stake in the company. Now, for the third and fourth largest carriers in the u. S. , this deal could be a matter of survival. The companies are competing against two behemoths, verizon and at t. And those big guys account for an estimated get this twothirds of subscribers and roughly 85 of the entire industrys earnings. So we also have the highprofile communications mergers like at ts bid for directv and comcasts Time Warner Cable deal. Those are driving a massive reshaping of the industry already. So sprint and tmobile, you could say, maybe dont want to get left behind. The sprint chairman believes the deal will allow sprint to invest more in its networks. That would raise data speeds and lower prices. In other words, son argues the deal will increase competition. The big question here, of course, is will regulators agree . Analysts ive spoken with are very mixed on this topic. The fcc expressed a preference for four carriers in the market. And of course, they did turn down at ts bid for tmobile several years ago. So this could be a strike against the deal. The other thing you want to keep an eye on here is the upcoming spectrum auction next year. A proposed bid this summer, that spectrum auction and the fccs plans for it could weigh on an approval as well. All right. Morgan brennan, thank you very much for that. Well see what happens. So what do traders here in the u. S. Think of super Mario Draghis unprecedented moves . Well tell you how theyre playing it next. Plus todays power house is the eighth most populous u. S. City. Burger king is headquartered here. And its home to the Worlds Largest collection of art deco architecture. Can you name that city . She keeps you on your toes. You wouldnt have it any other way. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about experiencing cialis for daily use and a free 30tablet trial. Drivers want to go further with their electrical vehicles. But you cant take a trip from lisbon to stockholm if you cant plan and recharge along the way. The European Commission is using cloud to make this possible. Creating a single charging and Billing Network across 28 countries. So drivers can travel as far as they want to go and when they want to go. Welcome back to power lunch. Im Morgan Brennan. Lets check out the dow, near session highs and in record territory. Leading the way higher, caterpillar, bank of america, Merrill Lynch repeating its buy rating on cat. Saying 2014 expectations may be too low. Rounding out the top five, microsoft, jpmorgan, boeing and chevron. Sue, back to you. Back to the markets. Up 90 points. Here at post 9, we have cnbc market analyst Kenny Polcari with princeton securities group. I heard from kenny a little earlier, ben. I havent heard from you yet. What do you think of what the ecb did and what does it do to this market now . I think it was so anticipated, it had very little impact. And i dont think it will have much impact until further down the road, if they actually do broouf on their asset purchase program. And if there is a true effect to the market on the negative Interest Rates, forcing their lending institutions to go out and prime the pump, so to speak, by starting to lend. By the way, i heard kenny. I was in the blue room, but i could hear him. The blue room, folks, is way over there. You had to go there, right. Well, you dont think, ben, that the 9100point gain, you dont think its going to last. I dont think its because of the ecb. Real credit has to go to cnbc and the conversation with katie and mr. Tepper. The move where you had somebody who had been very cautious saying maybe thats been overlooked. You force your way through some technical levels, and basically the expectation of what the ecb was going to do, wondering if they were going going to disappoint, whether it would be another session of jawboning i think was a release to the market lace, the actual effect, i dont think. Theres a lot of places to give credit. I do think the move today with mario draghi and the fact that they opened that door to the whole qe asset purchase program. Thats going to kick it into high gear, the one that priced in. I think the temper comments certainly helped give the market a boost. We can see it. It feels good. I think people are starting to reassess. Theyre starting to rethink what this really means. And actually, i think its a game changer. Its made you much more bullish. Ben, let me turn you to Mary Jo White and the proposals that shes putting forward which would include the ability of the s. E. C. To look at the a algorithms, registration, a look at dark pools. What do you think, is that a game changer . Its a step in the right direction until we stop payment for order flow. This is all going to be just dancing around. And explain what that is very quickly. In the United States marketplace, it used to be illegal. And a guy by the name of Bernie Madoff invented this system where he would pay somebody to send them their order flow. That has since grown into this industry that is now promulgated by every exchange in the world. There was a time on the floor of the New York Stock Exchange where the leadership inside a meeting, the day we go to a make or taker model is the day we close. That didnt happen. So what happens is the exchanges now pay somebody to put their post their orders on the floor of the New York Stock Exchange or in arca on the system. The person who pays for it is the highspeed trader who now has access to faster access to the marketplace. And uses those orders that are being paid there as cannon fodder to execute their algorithms. Its a system thats based on a foundation from somebody who was obviously a criminal. Its not a system thats going to benefit the long term of the United States or the world. It needs to be eliminated and go back to a system where the idea is that you pay a fair rate of commission to somebody whos handling your order as a fiduciary and not selling your order and getting a benefit from that. Okay. Ive got to go. Thanks for your opinion, ben. Appreciate it. Kenny, thank you. Ty, up to you. All righty. Being robbed at gunpoint. This is what it looks like. The whole ordeal captured on a gopro camera. Well show you what happened next after that. The city featured in todays power house is the birthplace of Academy Awardwinning actor william h. Macy. The only u. S. City bordered by two national parks. And home to the Worlds Largest cruise ship port. Can you name that city . First day of my life by bright eyes youre not just looking for a house. Youre looking for a place for your life to happen. 800,000 hours of supercomputing time, 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. Whether its building the worlds most advanced satellite, the space station, or the next leap in unmanned systems. At boeing, one thing never changes. Our passion to make it real. Mayo . Corn dogs . You are so outta here aah [ female announcer ] the complete balanced nutrition of greattasting ensure. 24 vitamins and minerals, antioxidants, and 9 grams of protein. [ bottle ] ensure®. Nutrition in charge™. Welcome back to power lunch. Check out netflix. Theyre telling customers verizon and other internet providers are to blame for slow speeds on the internet. This as it pushes to avoid paying for foster delivery of its content. Netflix trading up about 1 . And as for verizon, its up about 0. 3 . Sue, back to you. Ill pick it up, thanks very much. If you ever wanted to know what it feels like to be robbed at gunpoint, here is your chance. A mountain biker in south africa was stopped by an armed man and two accomplices. The whole thing was captured on his gopro camera. The robbers took the mans cell phone, his car keys, his sunglasses and the bike. Thank goodness criminals are often not terribly smart. They didnt take the camera. Though at some point the gunman is seen inspecting the device. Wondering what it is. Authorities got a nice closeup of the suspect who is now in custody, as are the two other individuals. Hmm. Power house time. Weve been giving you hints as to which city were in this week. Its home to the Worlds Largest collection of art deco architecture. Can you name that city . It is miami. With us is patricia. Shes ceo of century 21 premier elite realty. Patricia, welcome. Lets give you first a quick snapshot of Miamidade County real estate. Median sale price, 243,000, up 8 year over year. Properties on the market for a pretty swift 43 days on average, up 2. 4 . And theres a 5. 5month supply of inventory. Thats 11. 4 higher than last year. Were going to focus on the very nice area that a lot of people recommend to me, and that is coral gables. Tell me first where it is and why it is so popular these days. Then well go to our first listing. Well, coral gables is known as our city beautiful. And about 1925, george merrick, our founder, said he predicted coral gables would be the gateway to latin america. And whats happened is that and so much more. Its really become a True International city, attracting buyers from all over the world. Lets move on to our first listing, it is at 233 velarde, 595,000. Only 3,800 in taxes. Im so jealous. Three bedroom, two bath, nearly 2,200 square feet. This is really a great buy. For the price youre getting a beautiful home, prime location, treelined street with beautiful close to the village of merrick shops, beautiful shops, restaurant dining minutes away. Its got vaulted ceilings, wood floors, mexican tiles, large patio for entertaining, big family room. And different areas for outdoor dining. Sounds like a bargain, patricia. It is. Sounds like a bargain, man. It is. 430 elhal hambra. This property is hot. This home is a brandnew listing. Stunning, twostory classic old spanish. It was just renovated a few years ago. High ceilings, cozy fireplace, large, wide staircase, charming guest house, walking distance to downtown coral gables. So again, a beautiful oak and gourmet kitchen, stunning master suite so you can see why this is not lasting. Save this one for me, patricia. Lets move on to our power house of the week. 600 coral way, nearly 21,000 in taxes. Four beds, 3. 5 baths. That is a big i assume its a condo, patricia . Actually, this is a beautiful residence in the sky. And you dont even feel that youre in a condo because you have a private elevator which takes you right directly to the condo which is very spacious. It feels like a home. So four bedrooms, 3. 5 baths with a huge balcony overlooking the view of all of the city of coral gables. Whats unique, you can go downstairs and right across you have the gorgeous golf course. You could walk for breakfast at the country club, walk to miracle mile or the spa. It makes a very unique coral gables lifestyle. Definitely at its best. It has 24hour security. And three Parking Spaces which is very unusual. Beautiful marble floors. Definitely another special property in coral gables. Patricia, thank you very much. We appreciate it. Youre welcome. Sue . Ty, thank you very much. So how is the bond market reacting to the ecbs unprecedented move . Well take you there coming up next. Powerful screening tools, and guaranteed 1second trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Honestly, the offseason isnt ive got a lot to do. Thats why i got my surface. Its great for watching game film and drawing up plays. Its got onenote, so i can stay on top of my todo list, which has been absolutely absurd since the big game. With skype, its just really easy to stay in touch with the kids i work with. Alright, russell you are good to go alright, fellas. Alright, russ. Back to work female announcer its sleep trains interest free for 3 event. Get three years interestfree financing on beautyrest black, stearns foster, serta icomfort; even tempurpedic. Plus, get free delivery, and sleep trains 100day low price guarantee. Youll never find an Interest Rate lower than sleep trains interest free for 3 event, on now. Sleep train your ticket to a better nights sleep narrator these are the skater kid whoa narrator that got torture tested by teenagers and cried out for help. From the surprised designers. Who came to the rescue with a brilliant fix male designer i love it narrator which created thousands of new customers for the tennis shoes that got torture tested by teenagers. The internet of everything is changing manufacturing. Is your Network Ready . Welcome back to power lunch. Im Morgan Brennan. Check out underarmour. Increasing its price target to 65 from 50, citing recent surveys that show its dominance with younger consumers and women is growing. The stock currently trading up about 1. 6 . Sue, back to you. Morgan, thanks. Lets check the bond market following europes big move this morning by mr. Draghi. Rick santelli at the cme for us and the euro moving as well. Ricky, over to you. Well, sue, the markets really speak for themselves. If you look at intraday of 10s, were now at the low yield as if they waited for us to do our spot on power lunch, we sit at 2. 57. And this is a remarkably important spot. And we are now three basis points lower on the day. Look at a boon, its three basis points lower on the day. If you look at the chart opened up to the end of january for our tenyear, the reason 2. 57s so important, ive talked about it a lot, its a key technical level from february 3rd. It was when we settled below that several weeks ago that we had most of the big buying that pushed us down below 2. 5 . To go into tomorrows big employment number at that level is very technically driven. Now, if we look at whats going on overseas, look no farther, in my opinion, than a 20year start of spanish rates. You see how they still stay low . This is a governor against a big rise in rates year, on the relative spreads. And the last chart, you asked about the euro. If you dont want to do any work trying to figure out what the ecb did, the euro did it for you. Its higher on the day. Enough said. Tyler, back to you. Rick, thanks very much. Implg lets see whats coming up on street signs. We have pimcos bill gross at the top of our show. Also, weve got a true ragstoriches story. A tech entrepreneur who arrived here with just 26 bucks in his had pocket. And imagine if you had a few billion dollars. Lets say a lot of billion dollars. Want to buy an American City . Well, weve got something fun up or sleeves for you. Do join us on street signs coming up, top of the hour. So what im saying is, people like options. When you take geico, you can call them anytime you feel like saving money. It dont matter, day or night. Use your computer, your smartphone, your tablet, whatever. The point is, you have options. Oh, how convenient. Hey. Crab cakes, what are you looking at . Geico. Fifteen minutes could save you fifteen percent or more on car insurance. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. My mom works at ge. You need to see this. Show em the curve. Do you know what this means . The greater the curvature, the bigger the difference. [scifi tractor beam sound]. Sucked me right in. Its beautiful. Gotta admit one thing. Cant beat the view. Introducing the worlds first curved Ultra High Definition Television from samsung. Drivers want to go further with their electrical vehicles. But you cant take a trip from lisbon to stockholm if you cant plan and recharge along the way. The European Commission is using cloud to make this possible. Creating a single charging and Billing Network across 28 countries. So drivers can travel as far as they want to go and when they want to go. Were off of our best levels of the day, but a pretty decent market day nonetheless. Lets take a look at the boards right now before we turn it over to our friends street signs. Dow jones industrial average up about 90 points on the trading session. The s p 500 up 11. 5. Thats about a 0. 5 gain. The nasdaqs up just about a full percent on the trading session. The midcap, the s p 400 index is up almost 13 points. And the russell 2000 is the biggest winner in terms of percentage moves on the day, up 1. 6 , almost 19 points, ty. So a strong day so far. Strong day and looks like another record day for the s p if it holds on. And now this day, for the dow as well, if it holds on. And that will pretty much do it for this edition of power lunch for a thursday. Have a great afternoon, ty, and ill see you tomorrow. Street signs bee beggins now. High for stocks but it is certainly not just another day. Because one of the most historic experiments in financial history is about to kick off. Hi, everybody. Bill gross is here with his reaction to europes incredible move. Gm in crisis. Is the Company Making a bad situation even worse . And mandy, a reallife ragstoriches story youve got to hear. It is truly inspiring. Indeed it is. The american dream. Okay. Seven. That is how many times the s p has hit an intraday record high out of the last eight sessions. So 7 out