Transcripts For CNBC Power Lunch 20140911

He will join us in just a few minutes. Tylers down at the nyse. But first, breaking news. John harwood, it concerns russia. John joins us from washington. John . Sue, the white house and european union, as they signaled at last weeks nato meeting, have Just Announced deepened sanctions on the natural, energy and defense sectors on russia over the crisis in ukraine. They did that despite the ceasefire agreement that has a Peace Process under way. They indicated that if the Peace Process progresses, those sanctions can be rolled back. But russia has reacted instantly and said that this shows a lack of faith and an undermining of the Peace Process by the United States and the european union, but the United States and its allies believe they need to move forward with these. Of course, the president s got his hands full all over the world including in ukraine where whatever process is going on right now, they have not gotten the russians and the prorussian separatists to stand down in ukraine. And so this sanctioning process is continuing. Keeping the pressure on, john harwood, thank you very much. Lets talk about stocks right now. And they are trying, as they might, to claw their way back. The major averages, though, still on track for their first losing week in the past six. The s p down for a sixth time in the eighth session in a row. Theres the dow, off about 33 points. The s p 500 roughly flat at 1993, down 3. 5. The nasdaq is off 12. 5. The tenyear note at 2. 518 and the 30year bond at 3. 244 ahead of an auction. The dollar, 14month high. There you see it against the dollar index. Oil plunging, brent hitting a 14month low. Sue will have more context on that in a moment. Meantime, though, bob pisani is here at the new york stock exchange. Dominic chu looking at stocks leading the recent declines. Bob, you first. Were dealing with the effects of Slower Growth globally. That means slower demand, and thats affecting things like commodity stocks. Weve been talking about the commodity complex for a couple of days now. Take a look at exchangetraded funds. Very heavy volume today in commodity exchangetraded funds like the gold etf. The silver etf. Theres the energy etf, a basket of Energy Stocks. Even australia which is a commodityrelated country, the etf australia all to the down side. Lets show you what was going on with these commodities. Sue was talking about that multiyear, year and a halfpoint drop in oil, but weve also seen weakness in copper, in aluminum and gold as well. So put up that screen. You can see where multimonth lows on all of those major commodities right now. Also chinese stocks weak on supply demands and concerns about slower global growth. Put up some of the commodity stocks, and you can see whats going on. The important thing is overall, were seeing drops in commodities. So Companies Like freeport mcmoran, southern copper are all on the down side. Thats another group thats on the weak side. You see, look here. Down 4 for the month on the point where the s p is basically flat. So the bottom line is weve got some trouble here. Big energy and Big Oil Stocks are also weak. We talk about some of these shale plays. Big names like exxon mobil, totale are also on the weak side as well. Theres brent and theres crude. We were over 100 in brent crude just a short while ago. West texas, thats also been notably to the down side recently. Bob, well check back with you in a half hours time or so. Thanks very much. Sue, up to you. You just mentioned crude. Its worth taking another look at that chart because it is hitting a 17month low. And were down better than 0. 1 on ice brent crude. Were up on west texas intermediate. Ill tell you why in just a second. Saudi oil exports dropping to their lowest level since 2011. And the International Energy Agency Cutting its Global Oil Demand forecast, citing slowing growth, particularly in china. Both brent and west texas intermediate fell in tandem earlier this morning. But you saw that turnaround a second ago in the futures. They had a big bounce midday on comments out of russia, stating that any u. S. Air strikes against islamist militants without a u. N. Security council mandate would be considered an act of aggression. Now, thats one of the fundamental reasons why the market may have bounced, but it could also be that this market has been hit so hard, its becoming a little oversold. Oil, after all, has plunged about 12 in the last three months alone. Ty, down to you. All right, sue, thank you very much. The markets down about 1 off the most recent high. Dominic chu now with the play by play and how this market has had a kind of rhythm to it. Dom . Its been rhythmic. And we know this because stocks are still near record highs right now. But anytime there has been any kind of pullback, not even severe, investors accepted to buy it. Lets show you 2014 by the chart. This is the s p 500 behind me. And lets take you through the three significant i say that because they were at least quasisignificant pullbacks so far this year. Now, the beginning of the year, january 15th, all the way till the beginning of february, the s p you can see here dropped by about 6 . Thats as deep as it got before people jumped right back in. And then the rebound happened from then all the way to april 4th. The s p rose another 9 on the heels of that. So all of a sudden 6 pullback. A nice move higher to recover all those losses. Pullback number two. Lets check it out right here. It was between april 4th and then april 11th. So a shortterm pullback, but it was still 4 , a decentsized move for just about a week here. But then look at this. Over the course of the next few months, the middle of july, the s p 500 rose another 10 on top of that towards record highs at this point. Then we have pullback number three here which happened between july 24th and then august 7th. The s p, again, dropped around 4 , you can see here, but then rebounded from then through the next month, the beginning of this month to be up by about 6 . Now, what we see at the end is a slight pullback, but there is one sector thats a lot worse than all the others so far this month. Well have that coming up on street signs. Back over to you, sue. Dom, thank you. Can the market move higher from here . We welcome back Darren Richards at atk wealth adviser and neil hennessey, chief Investment Officer at the hennessey funds. Neil, im going to start with you because the last time you were with us on cnbc, it was july 31st. The dow was down some 300 points. But that day you said stay the course. Everythings going to be okay. And the market did rally since that low. As a matter of fact, were talking about the fact that this market proves so resilient any time it is pressured lower. So whats your outlook right now . Well, it hasnt changed, sue. If you look at companies and you look at the reality of the situation, productivitys up. Earnings per share are up. And theyre growing. Cash is growing. We have reasonable pes, reasonable price of sales ratio. You have debt thats down. Youve got, you know, shareholders that are happy. Everythings rosy right now, and well continue to be rosy because theres so much money, sue, sitting on the sidelines in either cash or fixedincome products that at some point its going to move into the market. So were calling for the next 2, 2 1 2 years the dow to be at 20,000, and thats not really, you know, stepping way out to get there. Its only about 5 a year. You know, darren, talking about bonds, youve basically really downplayed your allocation to bonds. You like some floating rate bonds. But you have an overweight position in Growth Stocks and in the tech sector. Correct, sue. Yeah, we Like Technology in particular primarily because it normally trades at about a 30 premium to the overall market. Right now its really kind of in line with the overall market so theres some Good Opportunity there if things normalize a little bit. And in the Second Quarter we saw tech kind of rebound from an earnings and revenue standpoint. Growth picked back up. For five years, companies have been cutting costs and being very careful. I think cap ex is really going to start to pick up and thats going to help technology and Consumer Sentiment is also improving. Even the more retailoriented Technology Products i think should do well. Im going to stay with you, darin. Darin, you also like emerging markets, asian emerging markets. Yet were seeing growth forecasts in asia, specifically china, being dialed back by some of the think tanks out there. Does that worry you at all . Well, theyre dialed back, but theyre starting well above everybody else. True. Its kind of a relative game. Right now, you look at global gdp, 20 of it comes from emerging asia. Yet it doesnt represent nearly that much in market capitalization. So we have a lot of growth over there. Yet its not really reflected, i think, in investments. And we like what we see. Particularly the asian consumer versus the exporter. I think china learned their lesson that you export when you have a global recession. And theyre really changing things. You look at india, up 30 , doubledigit returns in china. Its a great place to invest, sue. All right. Fooel, y neil, you get the final word. Where do i put money to work right now . Go to darins point which i think is the most prevalent. He was talking about cap ex spending. I think thats whats going to happen also. And thats going to be really, really good for not only companies but tech. But its going to be good for employment because theyre going to have to hire. Once we start to spend some of that 3 trillion thats sitting on cash on the Balance Sheets of the s p 500, youre going to see more people get hired. That means competitors are going to have to expand. And its just going to get the ball rolling. You know, theres a lot of value in the marketplace, sue. I mean, you can go from any sector except maybe the social media sector. Okay. Ive got to go, guys. Thank you very much. Appreciate it, darin, neil. Good to see you both again. Thank you, sue. Back to dominic chu. Were watching bail resorts. The stock spiking to a record high on word it is acquiring Park City Mountain resorts in park city, utah, for about 183 million. The deal ends a longrunning legal dispute between the ski resort operators together. The stock is currently up by 8 on that bit of news, sue. Back over to you. Thank you very much, dom. Arexigen, a to come so watch, that Company Getting approval for an obesity drug, a huge market. But look at the stock. Its down better than 8 . It doesnt seem to be the logical reaction. But our pharma reporter, meg terrell, knows hi. Hi, meg. Thats right. The drug is the third obesity pill to hit the u. S. Market in two years. It could be tough going. Analysts say a few things may be weighing on shares. First the fda required a number of postmarketing stutdys. It said it will run a new trial to assess the cardiovascular effects. Jpmorgan said that could cost up to 200 million. The fda is keeping a close eye on the safety of obesity drugs given fenphen which was pulled from the market. Thats one reason its been an uphill battle. So investors may be skeptical about prospects. We could be seeing a selloff into the launch. Nonetheless, orexigen is partnering. Wells fargo, jpmorgan and others all have buy ratings on the stock. Meg, thank you so much. Thank you. Appreciate it. Ty, down to you. Sue, thanks. Its a big story thats not drawn too much attention of the markets so far, at least not this week, but one major investor is quite concerned. Billionaire george soros is one of many weighing in now on scotlands proposal to break away from the united kingdom. Our chief International Correspondent Michelle Carusocabrera joins us. Uk prime minister, David Cameron, giving an impassioned speech. It seems like what took him so long . Yeah, a lot of scots are asking this. But imagine this, tyler. The royal bank of scotland would no longer be headquartered in scotland if the scots vote yes for independence. The bank shares traded higher today after it announced that the yes vote would mean redomiciling in england. Why . Too much uncertainty which could affect the banks credit rating, not to mention the legal ramifications that they face. As you mentioned, David Cameron giving that impassioned talk yesterday. Those who were there said he was close to tears. I would be heartbroken if this family of nations that weve put together and that weve done such Amazing Things together, if this family of nations was torn apart. You mentioned george soros. Well, uk celebrities are weighing in like crazy, too. Former james bond and scotsman shawn kean connery wrote that independent will allow scotland to develop and enrich its culture as well as marketing it more effective. He has scotland forever tattooed on his forearm. J. K. Rowling donated and wrote on her blog that an independent scotland will struggle to compete in a global economy. Scottishsinging sctar susan boyle has come out against its independence. Mick jagger, also a firm no. Tyler, hes fully english. All right. Thank you very much, michelle. Remembering 9 11. Lets get to Mary Thompson at the Cantor Fitzgerald Trading Floor as they honor their colleagues on this day lost 13 years ago today. Reporter tyler, there have been a stream of celebrities here to help raise money for this charity day. Weve seen sports stars like Mariano Rivera and now joined by john slattery, an actor as well as a director. Thanks so much for being here. Thank you. What brought you here . Im here on behalf of the bone marrow organization that the Relief Fund Helps out that helped people with over 70 different types of blood diseases. Reporter why are you interested in this charity . Ive had friends and family that have had various, you know, ailments. But i just think its a great i mean, i was here on 9 11. You know, it was a sad day. I just wanted to help out. Right. This is a great way to do this. Is this your first year doing this . Yeah, it is. Reporter what do you think of when you look around and you see all these people raising money for not only, you know, your charity but others . What do you think about a way of commemorating 9 11 in this manner . I think its the best of all possible ways to commemorate that. I mean, obviously, it started out helping the families of the victims of Cantor Fitzgerald, but its expanded to help people all over the world. What better way to commemorate that day. Reporter mad men is over, i think to the distress of many people. Its not over yet. Its over shooting. We still have another half season to go. Reporter on a scale of 1 to 10 with 1 being the top, you said this was the best, but whats next for you . Yeah. I have a couple of films. Im going to do a movie ant man, a new marvel movie. Reporter okay. Im going to do the sequel to ted, which shoots in boston. And i just i directed a film that came out on itunes on monday called gods pocket. Reporter well be on the lookout for it. Great. Reporter thank you so much for joining us. Weve been speaking to john slattery. Back to you. Another bombshell in that ray rice saga. Reports yesterday that police had sent the tape of ray rice punching his thenfiancee to the nfl office. Did it back in april. The nfl said it had never seen the tape. Quarterbacking the crisis. We have a big panel of experts that will weigh in including one former ravens player. Join the conversation. Should Roger Goodell, the commissioner, keep his job . Go to cnbc. Com vote. Power back in two minutes. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade, we looked for the best price, and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Welcome back to pourwer lunch. Check out blackberry shares. Its moved higher on news that its acquired movirtu as it continues to build out applications that cater to the needs of its core base, thats corporate and government users. Terms were not disclosed but its currently up by about 4 to the upside, tyler. Back over to you. Thank you very much. Should Roger Goodell keep his job as the commissioner of the National Football league . A super bowl champion says no. Thomas played for the Baltimore Ravens from 2000 to 2005 and then with the patriots from 2007 through 2009. Welcome. Good to have you with us on power lunch. Also, viewers, we want to know what you think. You can vote and let us know your opinion at cnbc. Com vote. Why are you persuaded that mr. Goodell must go . Well, based on the facts that weve received, the fact that at first there were we didnt have the tape, i have not seen the tape, no one had ever seen the tape, to now we have an investigation on. I dont have knowledge of the tape being there. The fact that if the tape was in the building and was sent to the nfl since april, why such a lag . Thats the Biggest Issue that i have. Someone that has been so harsh and so swift to deliver out punishment, embarrassing the brand, protecting the brand, it was all about the shield. And i understood that. So from a business perspective, if youve lied about something as simple as having the tape and now it comes out that you had the tape, whether you saw it or not, that is not the issue. The issue is you should have seen it by now because if tmz can get the tape, surely the nfl could have gotten the tape as well. And i think, aadalis, since Roger Goodell took charge of the nfl in 2006, he steered a pretty straight ship in terms of procedures and things like that. And if indeed the nfl did receive the tape in april, it certainly shows kind of a stunning lack of institutional discipline that the higherups wouldnt get it. I think thats kind of whats bothering people. Well, again, 78 million is what hes the amount of fines that hes given out to guys since 2006. 78 million. And a lot of it is warranted, true enough, but also, before the tape even came out, before the tape even came out, Roger Goodell said i got it wrong on this. So if you believed in your system, was it because you had had pressure from the womens group . Was it because the perception of the league . Of outsiders and women . Or was it because you had actually seen the tape and already handed out your judgment and then went back and like, okay, let me correct it and do damage control . For me, either way it goes, i think that the accountability for someone thats making 20 million a year, i dont think thats a mistake that you can blatantly and intentionally lie to the public, lie to the fans as well as your boss, as well as the nfl owners, and expect to be able to get that back. I think the trust there has been lost. Has been lost. Adalius, thank you so much for spending time with us. Thanks for having me. We appreciate it. Thanks for joining us. Joining us now from washington is Washington Post reporter cindy boren and Sports Illustrated managing editor, chris stone. Welcome to both of you. Cindy, weigh in on this. You made the point that the people who hired mr. Goodell are the people who are going to have to fire him. If indeed they do, how much support does he have from the nfl owners . Right now, everything we are being told is that they are extremely supportive. They are in his corner. However, and you know, this is a big however, if there is any whiff here that he lied and tried to cover this up, you know, with the discrepancy between what he said and the a. P. Report and whether they had the video or not, if there is any whiff of that, theyre going to cut him loose. Thats what were told. Chris, adalius seems persuaded that indeed mr. Goodell did lie. Do we really know that or not . I mean, what we do seem to know is that a Law Enforcement source said that he sent the tape to an official at the new york office of the National Football league and that that was received based on the confirmation of via voice mail from someone there. But we dont know, do we really, exactly who that was, right now, or who that person may have shared it with. Yeah. Tyler, i think theres still plenty of plausible deniability for the commissioner here. What was shared in that a. P. Report yesterday remains somewhat inconclusive. And i think the appointment of mr. Miller and the creation of the independent probe is merely just going to forestall any questions or resolution about the commissioners future. Do you agree with that, cindy . Yeah, to a degree, i play it plays for time. You know, this is going to take presumably months. I cant imagine that theyre going to get this finished any time quickly. You know, they managed last year with the bull ying in the dolphins locker room, i think that took, like, 3 1 2 months. That could be held against them, couldnt it . The public is extremely angry. Theres a group of 16 female senators from both sides of the aisle. And from both parties that sent a letter to mr. Goodell this morning saying you should have a zerotolerance policy. You know, if theres any Domestic Abuse by a player, theyre out. Yeah. Theyve been using sort of this old playbook thats worked in the past. Right. And im not sure that it will now because of the very reason you mentioned. I think that people are so angry about this. I think every time, you know, Roger Goodell shows up somewhere, hes going to be greeted with boos. I think its going to be ugly and awkward when he does go to games. Im not sure how this plays out. I just dont know. You know, and certainly theres the possibility here that hes absolutely being forthright. You know, that hes completely telling the truth. You know, maybe that comes out. You know, right now, this is just an awkward mess. And i dont think theres any way for the nfl make it go away quickly. Chris, based on what you know, do you think right now he should resign or that it is inevitable that he will . I dont think its inevitable that hes going to resign. Short of proof of a coverup, i actually think he stays because remember, he is an employee of the owners. And if you think and as cindy alluded to, theres been very little suggestion, publicly or privately, that they share the same disgust and anger that the general public does. With regard to the handling of the incident. And you know, on the same day that this a. P. Story broke, the other big story in the nfl was that the Buffalo Bills want the smallest market franchises in the nfl, sold for 1. 5 billion. What im trying to say there is that Roger Goodell delivers shareholder value to his owners. And the question is, does that mean more to the owners, you know, or do their consciences mean more here . Are we really going to see an aggressive, independent investigation into what happened . Very interesting. Time will tell, i suppose. And obviously a lot of questions remain to be answered. As you say, we may not know the answers at least for a while. So long as that investigation continues. Lets lock in the viewer vote and see what the public viewers think. Should he keep his job . 28 say yes. 72 say no. Roger goodell should go. Sue. Ty, mcdonalds shares sitting at a 52week low. The burger giant could be making a bold move, though, in its food lineup, but will it pay off . Plus, crime punishment, andrea day is on the case. Andr andrea . A bigtime football coach, his famous friends and a massive ponzi scheme. What happened when it all came crashing down . That stunning twist coming right up. The cnbc Trend Tracker live databoard is brought to you by cme group. 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So you can make owning a business even more rewarding. Ink from chase. So you can. Wait, wait, wait, its wait, wait, wait. Whoa, does she have special powers when she has the shroud . No. Guys . Its the woven one the woven one. Oh, oh that gives her invincibility. Guys . No, no, no. The scarlet king is lord victors son no dont. I told you you guys are gonna be so surprised when you watch the finale youre so lucky your car has wifi. Yeah. I am. Equinox from chevrolet. The first and only car company to bring builtin 4g lte wifi to cars, trucks and crossovers. Welcome back. Were watching shares of gogo. The stock is moving higher on news its partnering with tmobile to provide inflight texting and other Services Beginning on september 17th. That stock you can see there up by about 7. 5 for trading. As for tmobile shares, stairs up by 0. 5 on the days trade. Back over to you. Is mcdonalds about to shake up its menu . The fast food giant applying for a trademark on the term mcbrunch. Mcdonalds hasnt disclosed any new latemorning plans, but an expansion of breakfast hours could be considered with intense competition during daytime. Lululemon soaring, up 15 , comfortably beating estimates. Samestore sales did fall but not as much as analysts were forecasting. Theres also talk about a lot of short sleeves in that stock, forcing those that were short to cover those positions. And macys getting a downgrade. Cut from neutral to buy, citing a fair valuation amid slowing samestore sales. Gold prices are closing right now. And with the strength of the u. S. Dollar, golds been suffering lately. Lets see how its been doing. Its down another 6 on the session. The copper and palladium market also losing strength today as it silver on those forecasts of slower global growth. Ty, down to you. All right, thank you very much, sue. Former university of georgia football coach jim donen was accused in an 80 million ponzi scheme. That case finally wrapping up. And andrea day is here with the details. Hi, andrea. Yeah, he was so excited about that investment youre talking about, he brought in a bunch of his wealthy friends, but he had no idea what was really going on behind the scenes. Take a look. Reporter a college hall of fame football coach and espn analyst accused in an 80 million ponzi scheme. The uga legend is accused of swindling millions. He allegedly paid himself 14 million. Reporter a case that shot straight to the headlines. With a stunning turn. The excoach was retired when he first met this guy. Mr. Crabtree, where did the money go . Crabtree owns glc, a west virginiabased company that bought up liquidated merchandise he claimed he could resell at huge profits. He would buy anything from scratched appliances to televisions, excess construction building materials. Reporter he says donen was hooked, sharing the new moneymaking opportunity with wealthy friends. His lead attorney in the case, edward tolley. He might be playing golf or tennis and tell people, man, ive stumbled into this inventory deal and making a lot of money. Reporter investigators say crabtree ran the daily operations, buying anything he thought would sell. And donen worked to lure in more millions from investors. The first handful of welltodo investors were also extraordinarily successful businesspeople. One of them was the ceo of one of the nations Largest Liquor companies, and they all got in it with both feet. Reporter but the scheme was about to come crashing down. Investigators a crabtree was buying more than he sold. And merchandise began piling up in warehouses across the u. S. This guy would stack merchandise up to the ceiling. And then it would just sit there. Reporter the s. E. C. Says only about 12 of the 80 million raised from nearly 100 investors was actually used to purchase merchandise. The remaining funds were, quote, used to pay fake returns to earlier investors. Or, according to tolley, to line crabtrees pockets. He moved massive amounts of cash out of what was supposed to be the investor account. Reporter the case taken to federal court in 2013. Crabtree made a plea deal with prosecutors and agreed to testify against the excoach for less time. Donen decided to leave his fate in the hands of a jury. At trial, donens team claimed he was just one of many victims who thought crabtrees business was legit. All of these very, very sophisticated investors never looked at Balance Sheets, tax returns. They said if jims investing, it must be okay. And jim said well, if theyre investing, it must be okay. Reporter despite crabtrees testimony, the accused former university of georgia coach was found not guilty because he was also a victim of gregory crabtree. Ive always been a very positive person. You know, when i felt like we could beat a team, i felt like wed beat them. Reporter and just weeks ago, crabtree was sentenced to five years behind bars, ordered to pay 20 million in restitution. Youre now going to prison for five years. What do you have to say about that . Any comment . Reporter and right now crabtree is still out there. He should have his prison assignment any day now. You can find out much more about this story at cnbc. Com and follow the crime team on twitter. Back to you, sue. We sure will, andrea. Thank you very much. Lets check in on the bond market. We have a 30year bond auction today. And we saw yields move to their lows of the trading session shortly after the release. Right now the tenyear yield is at 2. 52 . The 30year yield is at 3. 24 . So a lot of action along the yield curve today. Ty, down to you. Sue, thanks. The future of education in america. A new method of teaching that will turn the traditional classroom on its head. If you have a child in school, as i do, and i know sue, you do, you need to listen to this. 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Wealth management at Charles Schwab welcome back to power lunch. Im steve liesman. Second quarter gdp flattered by the Quarterly Services number that came in well ahead of expectations and was revised upwards. Now, its now tracking 4. 5 . The government had reported with other changes with a range of 4. 2 to 4. 8, but i think the request number is quite a bit higher. If we go to the next screen, these are the five of our ten economists who actually incorporate this new services indicator into their tracking forecasts. The other five do not. Those who do you can see are quite a bit higher on a 4. 6, 4. 8 from morgan stanley, 4. 7 for goldman sachs. Moodys. Com at 4. 7 and hfe and barclays at 4. 6 . Those who use the new indicator are finding more growth than those who do not right now. I want to show you why. It had to do with hospital total revenue of hospitals up 10. 6 . And that, folks, is a change from the prior quarter at an annual rate. Theres been a big problem here estimating the effect of obamacare on Health Care Spending in this country. And it was estimated to be higher in the first quarter. It wasnt. It was lower. It comes roaring back in the Second Quarter. Thats why theres this volatility. Tyler, you might ask what about third quarter. Its so new that people are not incorporating it yet into the third quarter. But the general sense is it probably means another upward revision of third quarter. Ill have to follow that as it goes along. Tyler . Steve, thank you very much. Lets get to the trading action here as stocks struggle. With me at post 9, bob pisani and kenny pulcari. The market seems to be trending a little bit lower right now, but my guess is that we will see sort of wishywashy trading between now and the fed meeting next weekes. I dont see any reason why we would have anything but, right . Theres no real compelling reason. Tomorrow retail sales. Beyond that its all about what shes going to say next week. Once again, does anyone really expect anything so different . I dont think so. But yet every other day, you know, rates going up, rates going down. Tweak the language. Or just tweak the language. And yet arent you a little disturbed by these deflationary trends . Look at commodities. This isnt what was supposed to happen. The fed wants modest inflation. China even is not getting much inflation at all. Im a little worried about this. Were supposed to be getting gradually moving upwards. And were not. And were not. Therefore thats why i think people are going to wait and see if she changes her language. It is about the tweaking of the language. Like i wrote in my note, considerable time. That sent the market into a tizzy. What does considerable time mean . Six months . Six months and four days . Is it whatever. And that gets a little bit, you know, dramatic. The answer is, look, they want some modest inflation here. They want 2 . Were not getting 2 . Look whats going on with the commodities. Not with oil and metals as you pointed out a half hour ago. This is a tough situation for them to be in. Two things that will kill the stock market are one, a recession. We dont see a recession. Nobody i know sees that. Two is a sudden rapid rise in interest rates. If the tenyear goes from 2. 3 to 3. 3 in six weeks, its over. And if that happens, and i dont think it will, but if it does, the feds going to get aggressive again. Thats why youve got that ceiling under the market. Thats why you have the stock market sitting here just off the new highs. Just not really knowing what to do. Its going to just churn. Gentlemen, good to be back with you after a nice summer. Sue, up to you. Were going to talk next about the future of education. A new method of teaching that may turn the traditional classroom right on its head. Plus the city featured in todays power house is the birthplace of american cookbook author james beard. Its state is home to nike. And theres no sales tax. Can you name that city . So ally bank really has no hidden fees on savings accounts . Thats right. Its just that im worried about you know hidden things. Ok, whys that . No hidden fees, from the bank where no branches equals great rates. Whenwork with equity experts who work with regional experts who work with Portfolio Management experts thats when expertise happens. Mfs. Because there is no expertise without collaboration. Our weekly feature, heres the hit, you cannot pump your gas in this city or in this state. Just like new jersey. Its the only other one. Its portland, oregon. There it is. Brian ramsey is a principal broker with passun capital realtors. The median sales price of a house in portland, 299,000. On the market, average of 57 days. Zillow says inventory as of july, about 8600 properties. And today, brian, were going to focus on the pearl district. Our first listing is 1125 northwest 9th avenue. A studio apartment. 185,000. Taxes, just 2500 a year. One bath, 533 square feet of living space. Tell me about the apartment, brian, but also tell me about the district were talking about. Oh, sure. Well, the pearl district is one of those trendy neighborhoods that everybody wants to move to right now. And this space here is really great entrylevel apartment. Its a studio space. Its totally loaded with everything that people want. And its really conveniently located to transportation, everything that you could want to buy. And most importantly to people right now, its close to a grocery store. Yeah. Walkable, im assuming. To our second listing at 1260 northwest its either naito or naito parkway. Youll have to tell me. 449,000, taxes just under 6,000, one bedroom, 1. 5 baths. 1,071 square feet. Yeah. Naito parkway. So thats a really great street on the riverfront in the pearl district. This is a onebedroom, 1 1 2 bath, and its on the river with fantastic views. Its newer construction, really great finishes. People are loving this building. That looks lovely. Now were going to step up to a twobedroom place. At 1030 northwest 12th avenue. Its a loft. 975,000. Taxes, about 12,000, 2 beds, 2 1 2 baths and just under 2,000 square feet of living space. This is a fairly large intown space, brian. This is a large space, youre right, tyler. So youre going to have two levels on this condo. Both are the top level, so its a penthouse. And the finishes are very industrial. People love the open concrete floor plan. Bedrooms are upstairs with a beautiful deck overlooking the city. All right. Do we have any pictures of that one . I dont know that i saw any photos. I guess we dont have photos of that one. Well take your word for it. Its beautiful. That its kind of rustic. Well google them. Well find them. Brian, thank you very much. Appreciate it. Thank you very much. Sue . Check out this super power house. The Paradise Cove beach mansion in malibu, california. Talk about views. Wow its up for 24. 95 million. Its listed on californiamoves. Com. Fourbedroom, sevenbathroom home, has more than 6,000 feet of living space, beachfront, chefs kitchen, elevator, twocar garage all behind the exclusive doublegated entryway. And sunsets to die for, i bet. All day on cnb, were looking at education and what it will look like 25 years from now. We want to hear from you. Whats better for Young Students . Learning in a classroom or learning at home online . Go to cnbc. Com vote to join the conversation. Power lunch returns in two minutes. But what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. E financial noise financial noise financial noise financial noise and serta mattress sets. Save up to 300 on Sealy Posturepedic even get 24 months interestfree financing on every tempurpedic. But dont drop the ball. Mattress discounters fall kickoff sale is ending soon. Mattress discounters crocs downgraded from buckingham. Also cutting it to 13. Seaworld upgraded from outperform to neutral. The firm also increasing its price target to 25 from 21. And gogo shares spiking. The company to partner with tmobile will provide inflight texting and other services. And that will begin on september 17th, sue. We both have kids so cnbc is looking at education 25 years from now. Its a daylong focus today. We also want to hear from you. What do you think is better for Young Students . Learning in a classroom or learning at home online . Go to cnbc. Com vote to join the conversation. Sharon epperson joins us with more. I got a sneak peek at your story. I wish this could come forward. I dont want to wait 25 years. We know how it works, they use a onesizefitsall approach. The students sit in the classroom and then their homework is done at home. That may all change in 25 years. In fact, its already starting. Reporter the classroom of the future will look a lot different than the classrooms of today. Gone will be the rows of desks with teachers at the front of the class. The redesign of the classroom will look more like a working, living play space. If you think about the traditional classroom, you know, we have this image of the teacher telling the students to be quiet and waiting for their turn to talk. I think really the redesign of the classroom of the future is just the opposite. We want them to talk. Reporter with school days filled with student discussion and interaction, the teachers role will also evolve. The teacher might be sitting and observing silently. She might be working one on one with one child on the floor. She might be giving a lesson to a small group of students. Theres an ebb and flow that happens in the classroom. Reporter as for lessons, theyll be entirely virtual. To be accessed online, on demand, outside of school. The real part of the technology is to allow them to work at their own pace, to personalize education for them and then free up class time. Reporter educators are already experimenting with what is known as this flipped classroom model. Its a glimpse of whats to come and will radically change the traditional classroom experience. This trend toward more individualized learning is already happening in some classrooms around the country. But in 25 years, many experts and futurists are expecting it to be the norm, sue. You know, a lot of people talk about everything being online and virtual classrooms. This is the first time i think ive actually believed that it might happen. Because everybody says no, no, no, you can only learn in the classroom. And thats not really true. No. I mean, a lot of experts are saying and those that are doing this is that it has to work in tandem. You have a great video, the child is very engaged at home watching it and on their own time. They need to have some Parent Involvement in making sure they do that, of course. Right, of course. And then they go into the classroom and act out the concept. They master the material in the classroom. They learn and get introduced to it on their own. Yeah. Its almost the flip side of what you and i are doing every night. Were doing the homework with the kids. And theyre learning the new concepts in the classroom. You flip it upside down, its almost, to me, it sounds very logical because theyre actually theyre actually being exposed to the material twice. Once at home. Exactly. And then once in the classroom where they can ask all those questions. Instead of asking me. Dont ask me. I dont know, kids. Were not the experts. I was in a classroom last night because we know this is the week kids are going back to school. You meet the teachers. I was in that role and i thought it would have been more interesting to kind of watch what they had to say online quickly before i got there. And then see what they actually do in the classroom. Actually engage in the Chemistry Lab or Something Like that. So if this is going to happen, im all for it. So far me, too. Trust me. Up till 9 30 doing homework last night. Lets lock in the results of the poll. I know you were, too. Whats better for Young Students . Learning in the classroom or learning at home online . 51 say learning at home online. It was a close vote, though. 4952. 51. Thanks for voting, guys. Thanks, sharon. Quick point, theyre probably going to still have that classroom because a lot of working parents, we need them to be at school. This is very true. Lets go to jackie deangelis. Once again brent crude hitting a 17month low, jackie. Lets start with the dollar index, still at an 84 handle. Seeing this pretty flat today. But that 84 handle is very significant, and it is having an impact on these crude oil prices, especially brent crude. The reason for that, some people dont understand this is that when traders are going to buy crude in foreign currencies when the dollar rises, it makes it more expensive for them. And so that is why brent is sitting under 100 a barrel. 98 and change. Wti, on the other hand, seeing a little bit of a bounce today. Traders saying its buying the dip mentality. And i do want to highlight here that theres also a supply demand issue. Youve got the iea and opec cutting demand forecasts. Supply is rising. So that is probably going to push these prices lower. Back to you. Okay, jackie, thank you very much. And that does it for all of us on power lunch. Ty . Sue, they miss you down here. Well see whats coming up on street signs. Hey, mandy. Hi, guys. Energy prices dropping, yeah, its a boost for us, the consumer. What does it mean for the investment thesis for Energy Stocks . Also, what one chart tells us about how people around the world feel about their own respective economies. And will Sports Betting in new jersey give the state the revenue it sorely needs . Thats the question. Lots of things coming up. Street signs begins right after this break. For better access to talent, cutting edge research, and state of the art facilities. And you pay no taxes for ten years. From biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo. Startupny has new businesses popping up across the state. See how startupny can help your business grow at startup. Ny. Gov requires precision and anattention to detail. 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Our guests bring you investment ideas in a still unstable world. Well also talk about how new regulations on Small Business may be costing you a job or a pay raise. And why exactly are we so happy with low 90 a barrel oil, mandy . Its a mystery