Transcripts For CNBC Power Lunch 20150311

A young lady at the Washington Post telling dads to maybe just hang on a second. In the meantime we begin with news on apple. The company experiencing a major server outage. Josh lipton has that story for us live from san jose. Josh, just how widespread is this . Mandy, if you are having trouble buying songs on the itunes store, then you are not alone. According to apples website, customers may be unable to make purchases from the app store, itunes store, i books store and mac app store. The problem the tech giant is experiencing major server outages. The cause at this time is not clear. What is clear is that apple is losing money. Remember, the itunes store generates a lot of cash for apple, and its last reported quarter apple says total reports of media and software from itunes clocked in at 2. 6 billion, and its not just United States. A customer in the u. K. Posted this picture of an oldfashioned credit card imprinter. We have reached out to apple, and were going to keep you posted on what we hear from the company. Tyler, back to you. Josh thank you very much. Lets get back to one of the leading stories of the day, and that is the dollar. Lets take a look at where we stand against the euro right now. The dollar inches penny by penny down towards parody with the euro. Just takes 105 to buy a euro. Fill lebeau live in wolfsberg, germ aeb at v. W. Headquarters to show how it is impacting a main maker of foreign cars bought in the United States. Take it away. Tyler, there is some impact for the automakers here in europe. Really, the biggest thing that were hearing from people is boy, we probably will see more tourists here in germany. Here at the auto this is one of the top tourist destinations in germany. This is where they deliver about 400 to 500 vehicles. Most of those going to german citizens who decide they will take delivery here at the vw headquarters. In terms of when you look at the dollar versus the euro and as we move closer to parody, the question has come up what does this mean for those european brand automobiles that are sold in the United States . Well, keep in mind the vast majority of those vehicles whether its bmw, mercedes volkswagen or any of the volkswagen brands porsche, audi, a couple of examples the vast majority are built in the United States and sold in the United States but there are about a million, about 6 of all vehicles in the u. S. That are built here in europe. Obviously, at a much lower cost because of the euro and then sold in the United States. There is some benefit. Not a huge benefit when are you talking about Companies Like volkswagen that sell more than 10 million vehicles worldwide in a year. Is there a little benefit . Yes. Is it a huge one . No. Its not something they expect to expect for long. Speaking of executives tomorrow morning on squawk box you do not want to miss this interview because we will be talking about the weakness of the euro relative to the dollar. We will be talking with the chaim and ceo of volkswagen dr. Martin vintercorn. It is an exclusive interview. He rarely does these interviews. Well be sitting down with him tomorrow morning. You dont want to miss what he has to say. Lot of that phil. When those german manufacturers repatriate their prochts, their innings from sales on vehicles that theyve sold in the United States maybe made in the United States theyre getting more euros back. Lets take a look at the other impact. Theres tremendous concern now that the stronger dollar is going to impact u. S. Manufacturers who try and sell into europe. Tell us about that. Well there is going to be some impact there, but were not going to see it as much in the Auto Industry as we are going to see in other areas of manufacturing, shipping goods over here and there is the expectation that we are going to see a drop in some of those exports from the u. S. To over here in europe. In terms of the Auto Industry that impact is going to be limited because, again, you usually sell where you build where you sill and for the u. S. Manufacturers the big three, almost all of the vehicles that theyre going to be selling here in europe are built in europe. One interesting note, tyler, check out the new jeep renegade. Talk about good timing. They build it at the fiat plants in italy, and its just coming to market in the u. S. Theyre going to be building it at low cost and selling at a high profit in the u. S. Then repatriating it back to europe. That will be very profitable. You showed us that jeep product and where its built not long ago. Phil, thank you. Mandy, over to you. Breaking news. Tenyear notes are up for auction. Whats demand looking like ricky . Ore manufacture minus is the grade i gave the man at straight up 1 00 eastern. Lets go through the internals. It was a reopening. Meaning, we originally opened up this coupon in february. The yield at auction 2. 139, which is about half a basis point through the screws meaning below where it was trading and the when issued market. Lower price, higher yield. Lower yield. Higher price. The grade is aminus. Everything else, you look at quickly, 265 bid to cover. 2. 65 of investor dollars chasing every dollar securities available. About equal to the 10 auction average. 58. 6 on indirect. Other than our last action that was a little higher indirect you have to go all the way back to christmas of 2011 to find a higher one, and we were a little bit weak on direct. 31. 2 go to dealers. Aminus. Well go back to mappedy ask tyler. Im going to toss it to david faber with breaking news. David. Thanks very much, tyler. You may have seen dom mention a number of stocks that are moving on the wall street journal story that we can now confirm. Namely that Endo Pharmaceuticals has made an offer to acquire Salix Pharmaceuticals. My source is telling me that offer was made via email with a letter attached about, lets call it an hour or so ago in which endo said it was willing to pay as much as 165 a share for salix. 25 of that consideration would come in the form of cash. The remainder would be in endo shares. Those shares are actually up since this news again was first reported by the journal a little bit ago. That letter having been sent an hour or so ago. Of course, Salix Pharmaceuticals is currently under contract to be acquired by valent. That is a stock that has gone p sharply since it announced that acquire for 158 a share. There is currently a tender offer that will be closing in the not too distant future. In fact, this deal at 158 could be closing as soon as april 1st. Now, when you have a stock that being salix thats up on the endo story above 158 well it becomes somewhat unclear whether people are going to be tendering at 158 with a stock at 168. That being said there was also a breakup fee on the current valent transaction. Roughly about, if i recall, around 300 plus million dollars. That would have to be paid by endo. It does have or is lining up financing with the likes of bank of america and credit swiss. People familiar with the situation that are involved in the auction of salix tell me that endo was involved fully and came in with a number below that of valent at the time. Since then perhaps endo and his shareholders reconsidered, participating and coming in again at a number that is above, but it remains far from clear whether theyre going to be successful in any way in wrenching this company from valent. Well be following it, tyler, as we move along. Certainly, wanted to update people on that market moving story. Back to you. Thank you very much, david faber, doing what you do best with breaking news. Lets go back to the currency story here because the euro is just getting cheaper and cheaper. Touching another nearly 12year low against the dollar as it continues its march towards parody, which, by the way, dom, was last seen in 2002. Were going to talk about those that might be thinking about taking a european trip and i wanted to throw in a personal anecdote because last february i went to austria, and the Exchange Rate was 137. I went back exactly 12 months later. This february to austria. The Exchange Rate . 113. You can bet your bottom euro yes, it was a whole lot cheaper. I tell you who were missing, the russians. Why in. The ruble has been crushed. Last year the ruble around that time i think was about 48. This year 72. A lot more expensive. Today disappeared off the alps. Whats interesting about this is the prices were held constant or were just marginally adjusted for inflation, the reason why the story is important is because it does bottom line make travel cheaper for tourists specifically in america to go to places like europe. I know that a lot of our audience is sfis indicated enough to know these numbers. Lets point out the example. If you look at the euro like you said, its off about a quarter of its value over the past year. A massive move to the down side. What this means effectively for a lot of our viewers that maybe want to take that european vacation is a fairly simple example. The euro versus the dollar. Heres whats happening. Lets say you want to go to paris for the weekend or where you want to go and the Hotel Room Costs 300 euros. A year ago like you said at around that 137 im going to call it 138. 50, thats where it was a year ago, that means the cost is 415 for that 300 euro hotel room for a nooelt night. Today that cost is 1. 06 to buy awe euro. That means that 115 hotel room now only costs 318 if it was the same 300 or or 300 euro hotel room. That currency depreciation in the euro makes travel a lot cheaper. Okay. I have a trip say, planned in a month or two from now. Im pretty happy with the rate ive got today. Yes, it may get cheap earnings but you are thinking i want to lock it in now. What do you do . If you are a seasoned traveller and somebody who is maybe a bit savvy in the financial markets, what you can do is actually buy euros. Right . Thats the way you lock it in. You say i want to own those euros right now just in case they go higher from here. If they go lower, i dont carry wresh i want to make sure i budget for this amount. If you are not in the currency markets, its professionally driven, theres one way that you can to it and thats with the currency euro etf. The fxc. This is run by Guggenheim Investments here. This etf tracks. You can see here pretty closely to the value of the euro versus the u. S. Dollar. You budgeted it out, and you have the money right now for your european vacation. What you could do is just take that 1,000 and buy this euro etf, and that lox you in. Minus some transaction fees. Sure. If the euro goes higher youre profiting on the position so you can make up for the fact that your vacation is going to cost more. If the euro goes down in value, your vacation gets cheap are, but you lose the money here. Youre hedged. You are hedged, and its a winwin, which is what the whole idea of it. Can you actually budget. We have so many more parts of the story, including what the best way to spend your money are. The whole story is up right now. Thank you very much for that dom. Taking owes a quick trip through europe. Over to you. All right, folks. Goldman sachs president chief operating officer gary cohen says the Dollar Strength will be a concern for fed chair janet yellin. Heres what he told carl cant feea this morning on quack alley. She has to deal with the real realities of the world. The realities of the world is we have a soaring dollar, and the affects on that soaring dollar are just starting to be felt. You know its going to make u. S. Exports more expensive. What does that mean for u. S. Manufacturing . What does that mean for u. S. Jobs . Its not going to be positive. Ron insana at market fi. Com. A cnbc contributor. Mr. Koen says its not going to be good for American Manufacturing or american jobs. Is it going to be good for american portfolios . Maybe not. Im concerned that the market is getting a little tired here, and weve seen some underlying technical deterioration. It might be time to hedge. Rule of thumb every 10 increase in the dollar is like a 50 basis point hike in Interest Rates. Dollar is now up 20 year over year. It shot straight up against major currencies. Its up very sharply against the your wroe. It is already, as we said before, doing some of the feds work for it and the question is does the fed respond in an appropriate manner to increase the value of the dollar. Does the fed feel because of what the dollar has done and its been a sharp move. Its been quick. Its been very fast. They raised the dollar as a factor. It should. Were importing deflation from europe. At the very least. Yeah, our inflation rates, the feds preferred measure, the pce deflateor has been below the feds target for 36 straight months. Its running at a 1. 3 annual rate, the core rate wraen way, and with Energy Prices continuing to come down that puts further downward pressure on inflation. The fed does except for unemployment doesnt really have the full bred of the its mandate being met. Real quick, you had been in a camp that said no Interest Rate hike this year. Have you reconsidered . Im having to. Every time you turn around and read the newspaper, you know you are getting a bomb in there. Today in the wall street journal saying patients out. I did write a piece that if theyre going to do it it should be a twostep process. Raise the floor first and then raise the ceiling. Raise the floor, raise the ceiling. So that because fed funds trade in a range, lift the bottom of the range off zero but dont take the top off yet. Take your time and see what the reaction function is in the marketplace. Ron, thank you very much. That was great. Meat packer stocks are taking a big hit on fires of maybe bird flu. The avia influenza. Theyre all down 5 to 9 . The us sd a is testing sample from arkansas for possible bird flu. Now, that state is a top chicken and turkey producer. Its already confirmed cases in missouri and minnesota and on the west coast as well. The government says this strain poses no health risks to humans but thats not stopping investors from taking some of those profits in these names. Tyson, pilgrims pride, Sanderson Farms down on todays session. Back to you. Massive drop. 8 and over for pilgrims pride. Well fathers chasing down trolls who threaten their daughters on social media. Curt schilling did just that but he is engaging the right thing to do . The next guest whose father did the same thing says no. That is straight ahead on power lunch. Stay with us on cnbc. Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Apple says we apologize to our customers. Apple experiencing problems with itunes and other services this morning. The cause was internal dns error at apple. Were working to make sure all the services vaebl to customers as soon as possible, and we thank everyone for their patience. Importantly, correcting previous reports that there was some kind of major server outage that was not the cause here. Services, im being told, are being gradually restored. Certainly important for apple to get these services restored as soon as possible. They are a major source of money for apple. Just last quarter, for example, itunes generated nearly 3 billion for the tech giant. Were going to bring you more headlines as they cross. Guys, back to you. Josh thank you very much. Avon products among the biggest decliner. Down 3 . The stock taking a beating on concerns a strong dollar will hurt the company. And shares of express up more than 2 . The apparel retailer reported better than expected Fourth Quarter earnings. It sees profits for the Current Quarter above analyst estimates. Now lets go back to dominik for another market flash. Tyler, shares of General Mills are negative on the day, but they are trying to reverse course. You can see right there now getting back towards flat. Its the brand behind Betty Crocker cake mixes is looking to put the green giant business up for sale. This akorgt to a report from reuters citing sources familiar. The sale process is expected to take place later on this summer so General Mills shares mandy, in focus for some investors today. Back to you. As of 2014 more men used twitter than women. Thats according to pew research. In 2014 twitter saw a significant increase in male users. Take a look at this wall. On the far left we have pinterest, instagram, and facebook. Sites with a higher percentable of women users. On the righthand side we have linknd in and twitter. Thats where men outpace women in terms of social media use. The percentage of women who use twitter was higher than the percentage of men. What exactly is going on . Well katherine grahampell is a columnist for the Washington Post, and i want to start with this, catherine, because last week this caught a lot of peoples attention because former Major League Baseball pitcher Curt Schilling made headlines defending his daughter against Cyber Bullying. Catherine, could Cyber Attacks on women be a factor in who exactly is using twitter . In other words, the women leaving twitter because of this kind of thing . I think thats absolutely the case. I think a lot of women do not feel like they are welcome on certain sections of the internet. Twitter being one of them. Actually, about a month ago a message from the twitter ceo to his employees was leaked in which he acknowledged that they were probably losing a lot of women for exactly this reason. But why did you say in your column you didnt think it was necessarily such a great idea for dad, curt to go in his daughters fence dwens . Its not that i didnt think it was such a great idea. I think its a little upsetting in its own way that there are so many women who deal with this kind of abuse every day, and when they try to fight back the attitude from the twitterverse is you are being whiney and shrill, and you probably brought it about yourself. When Curt Schilling comes to his daughters defense, as a dad would want to do he was celebrated as a hero. Theres a bit of a did hes connect here. How, catherine, would you address the issue of trolls or Cyber Bullying on twitter if youre saying hey, it was not a good idea for curt to come in and protect his baby girl which may only continue to disenfranchise women . Companies like twitter need to be faster responding to it, and maybe there should be more sort of peer to peer monitoring so its not just a fathers duty to protect his daughters honor. Its, you know human beings duty to protect, you know the sort of sense of civility on the internet, and if you see someone bullying someone else, even if they have no relation to you, whether theyre male or female, to come out bad behavior. Community policing. You know what i do sometimes if i get a really nasty tweet. I retweet it because that way you both shame the person who sent you the nasty tweet, and you get other people as you call tshg the community jumping in to your defense. We have to leave it there. Would love to talk more about it. Its a great story. Thank you, catherine. Thank you. Catherine, one of the best. Read her stuff. Its great. Were talking about a lot today about the impact of the dollar getting stronger against the euro but what happens if the same thing starts to happen with asian currencies in a big way . Well take a look at that in the second hour of power. Sdmreemplts lets take a look at the board and the s p. The dow is currently up by just 33 points. The nasdaq by two. The s p 500 by nearly three points. Ty. Watch them all stay a little flattish until the fed meets next week. Thats my bet. All right. Dollar keeps on rising but that could be a bad thing for the market. Thats the question. Straight ahead. When power returns in two. Well give you some thoughts. Hey, girl. Is it crazy that your soccer trophy is talking to you right now . It kinda is. Its as crazy as you not rolling over your old 401k. Cue the horns. Just harness the confidence it took you to win me and call td ameritrades rollover consultants. Theyll help with the hassle by guiding you through the whole process step by step. And theyll even call your old provider. Its easy. Even she could do it. Whatever, janet. For all the confidence you need td ameritrade. You got this. Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Im sue herrera, and heres your cnbc news update for this hour. Secretary of state john kerry telling the Senate Foreign Relations Committee that lawmakers cannot forred mothers day few any agreement struck between the United States and iran. He responded with utter disbelief to an open letter signed by 47 republican senators that any Nuclear Agreement would last only as long as president obama remains in office. The International Monetary fund has signed off on a fouryear 17. 5 billion loan for ukraine. Thats according to imf chief kristine lagarde. Its a big e bailout than proor previously reported, but no idea on how large the nibble payment will be or on what timetable. Private equity firms appear to be in hybernation. Dealogic has tracked that is down 53 from 2014 and the lowest amount on record since the year 2002. U. S. News and world report has released its annual reports for the best car. 2015 captured best minivan for the fifth year in a row, and General Motors led in four categories, including best family large car with its 2015 chevrolet impala. Youre uptodate. Thats the cnbc news update this hour. Back to you, mandy. Thank you very much, sue. Lets take a look at prices which are closing right now. Were sitting around threemonth lows. Were currently sitting to the down side by 9. Silver copper, puladium, platinum are the meltstals were watching. There we go. All to the down side as well. Particularly palladium. Now to the nyse. Bob, a moment ago. Ty put out his prediction. He said markets may be flat and the fomc meeting. The 17th and 18th. What do you think . Well we are flat. In fact, the nasdaq just went negative a moment ago, and dow looks like it wants to. This is about anemic a bounce as youre going to get. Didnt get much throughout the day. I just want to show you the dow industrials. Were actually not at the lows we had them earlier in the day. One of the problems we had with the dow was exxon and chevron. Ill show you what the problem is. Were essentially at threeyear lows. Exxon has been diving for several days. Most of the Energy Complex has been moving to the down side. Thats the one issue. Chevron also on the weak side. Theres exxonmobil for the last few months. You can see whats been going on here. Were having a number of Energy Stocks hit new lows today. Its not a drama one, but we have sort of gotten used to the idea that energy is bouncing, and thats still up in the air. We have a number of Companies Like novell southwestern transocean all to the down side. Earlier today were at sitting at multiyear lows. Sop, a lot of interest in trying to buy the bottom of the energy groups. I put this up many times. S p, gas exploration, etf, there have been several times in the last couple of months where we had nice bounces, and they have tried to buy those bottoms enthusiastically. Volume has gone up. The last few days weve seen that moving to the down side once again. The volume has dried up, and people have stopped trying to pick bottoms in that particular sector. Guys, back to you. Its been losing battle. Thank you very much. Bob, lets bring this chad morgan landa Portfolio Manager at steeple. Chad, do you agree that there may be a lot of sitting on the sidelines until we have clarity next week . For the next week perhaps it will be directional, but we believe, though that investors should take caution from negative Interest Rates across the globe in regard to the peripheral as well as a deceleration of fwloebl growth. How much is due to the rise of the dollar . Thats been a factor. Also when we look at the gdp numbers for 2015 were looking oot roughly about a 2. 5 growth trajectory. With a forwardlooking multiple of 17 times, this is not a cheap market. You really want to be cautious of this. Yet you know i really hate the saying tom, tina there is no alternative to u. S. Equities and, yet, that is the camp youre in. Tell us why. I think there may not be an alternative because they offer the best longterm returns. Anywhere you look in the world, the Investment Opportunities looking out five ten years, which is the time frame we try to look is much better in u. S. Equities. Much better in u. S. Equities. Better than europe . Better than fomc . Strong dollar is theres a lot of positive things from that and we prefer that investors stay in the u. S. Markets. Chad, i want to ask what you mean when you say we would be underweight u. S. Equities at this point. Does that mean youre selling heavily, or does it mean that if your no, maam position was 60 , you might be 58 . What on are we talking about here when you say that . If it was 55 , we would be taking 20 off of our equity ebbing posure. Weve been bullish our group has been bullish over the course of the last several years. Weve been overweight equities, and we have also enjoyed that ride up but i would at this point based off of the economic back drop, just not kid ourselves here. Were at a point here where the semi is decelerateing. Earnings are hard to come by. Margins are at an allteam high. The market surfed that margin improvement over the last so you would shave 20 off your normal equity position is that right . Yeah, absolutely. Also that the it will be to go into more momentum types of sectors as opposed to the high beta stock that know has enjoyed. Thats 20 , not 20 percentage points. No. Well, we do take the 60 if we were at 60 allocation we if down to 45 at this point. 25 decline. Then what we would do is also take our Bond Exposure and lift it up a bit and look towards the belly of the yield curve. We would go in the 4. 5 year kind of duration. If you still think the best place to be longer term is the United States are you actually adding right now . Well we run a 6 6040 kind of product. Were running 65 kind of stocks today. I think you can find individual securities that have good long three, five year outlooks, and thats where were going. We only own 35 names, so we can be more focused than the typical fund manager. Thats the place to go. You talk about microcaps or mids, but there are opportunities out there. Whether its Texas Pacific or kato or theyre all Good Companies that will have Earnings Growth in the next couple of years. Okay. So you named your three picks there, but there is a fourth that we put up on the board, but you didnt name. For those who are listening on the radio, its Chicago Bridge and iam. Chad, tom, great to see you. Folks, you can go to power lunch. Cnbc. Com to see a few extra stock picks from both chad and tom as we have added value on cnbc. Com. Ty. From bridge and iron to the strongest man in chicago, Rick Santelli at the cme. Hey, rick. Hi. Well, ill tell you what, were faebl seeing some iron and metal come back in the treasury market. It goes ai long time without moving sometimes. We had that aminus auction. Look at the intraday. You can definitely shave a quick four basis points off clearly motivated by the 1 00 eastern auction. Hey, if you look at the difference between our yields and boon yields, you could k see on this spread which is at a 26year high at 190, we have added 30 basis points distance between the two. Zoob listen the Auto Industries and all the different exports going back and forth between these countries is definitely something to Pay Attention to. Just look at our multinationals and their earnings scenario. Tyler, back to you. All right rick. Thank you very much. To sue herrera now with a news alert. It concerns a safety recall. Toyota is conducting safety rrls of 2,500 model year 2012 through 2014 rav ev vehicles and approximately 110,000 model year 2015 camrys, camry hybrids, highlander, highlander hybrids and the 2014 to 2015 model year rav4 vehicles. I know that sounds complicated, but theyre break it down by the different makes and models. On the rav 4 ev the electric Traction Motor Assembly may cause it to go into neutral. On the camry, the highlander camry hybrid the hybrid highlander and the rav4 vehicles, a Circuit Board for the electric Power Steering System may have been damaged during the manufacturing. It results in a loss of steering, and it increases the odds of a crash if indeed that does happen. Once again, toyota recalling quite a few cars in terms of the 2,500 model year rav 4 evs and 110,000 model year 2015 camrys and a number of other models as well. Ty, back to you. All right, sue. Thank you very much. The cliner perkins trial continues today as ellen powell seeks for alleged sex discrimination. Liz gains, Senior Editor of recode and she is outside the courthouse. Liz, welcome. Good to have you with us. This is a very interesting trial that touches on a lot of the issues that are swirling beneath the surface on Silicon Valley. For those that arent familiar with the trial and havent been reading your work give us the sort of one paragraph summary of it . Sure thing. So elin powell is a former partner at Kleiner Perkins. Its a storied capital firm. They invested in google, net scape, cisco genentech, and over the years theyve been trying to find their legacy and, unfortunately, this week their legacy is about how they may or may not descriminated against women systematically within Venture Capital. One woman, powell in particular says opportunities were lost for her after she had an affair with one of her partners and then complained about it and then eventually sued over it and then was fired. So she says the result of a fallout with a married kleinor partner, this individual basically went after her fundamentally and that that caused her advancement to be stalled. Both of them were let go by the company, both the partner with whom she had the relationship and she, is that correct . Thats correct. The chain of events is a little more complicated than that. He also later harassed another partner, and that is why he was fired. Shes alleging there was a culture there of lets just call it an old boys network, basically, or a frat boys network. Yeah. Thats exactly what its called. That kept her and other women from breaking through to partnership stad status and to getting some of the good jobs position on a board and so on and so forth. What do we know about the composition of Kleiner Perkins in terms of its diversity with respect to women, with respect to minorities, ms. Powell for example, who is an asian female. Kleinor perkins at this point now has a very small senior partnership, and it is 20 women. That is an unusually good number for a firm of this of its stature. Im sorry were tight on time stwloosh they do. I would point out that ellen powell would point out for sure that was not the case when she was employed. Theyve had a really big promotion of women partners in the last three xwreerz since she filed her lawsuit. Yeah. She left there in 2012 or thereabouts, as im recalling. Very quickly and finally, the crossexamination of her has begun by the kleiner lawyer. How is that going . It is brutal. I have to tell you. Kleiner perkins has hired a great lawyer who is crossexamining ellen and it started yesterday afternoon and continues today. Where elin with her own lawyer really presented herself well talked at length about why she wanted to have her story heard. Right. The defense lawyers really picking her apart. Female lawyer . Female . Lynn hermly. Yes. Female. We appreciate you being there for us. Quick market flash. To the tech to the financial part of the market. If you look at whats happening to the best performing sectors are the financials in this market overall. Up by about threequarters of a percent for the s p 500. Financials subsector or index. You can see there. Again, near session highs and coming off it right now. When the fed releases the latest results of the stress test and it happens during the closing bell today, 4 30 this afternoon. Well be tuned in very quickly. Mandy, back to you. Yes. Nice gains in the share prices on the board. Thank you, dom. There are more millionaires than ever living in the United States. How many more . Well, rob frank is here with that story. Robert. 500,000 more. Thats the answer mandy. That was created last year. There are now more millionaires in the u. S. Than the entire populations of new york, new jersey, or michigan. Well tell you how many made their money and where theyre investing. Its coming up. About what happens when you turn sixtyfive. But, really, its what you do before that counts. Thats thinking time when you ask yourself, how do you want this to go . See, medicare doesnt cover everything. Only about eighty percent of part b medical costs. The rest is on you. So, get started on an informed decision. [ male announcer ] consider an aarp Medicare Supplement Insurance Plan insured by Unitedhealthcare Insurance Company. Like all standardized Medicare Supplement Insurance Plans these plans could help pay for some of what medicare doesnt. That could really save you in outofpocket medical costs. So, call now and request this free decision guide. Just a little preparation could mean a lot down the road. 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So, call now request your free guide, and explore the range of aarp Medicare Supplement plans to choose from based on your needs and budget. Sixtyfive may get all the attention, but now is a good time to start thinking about how you want things to be. [ male announcer ] go long™. Welcome back. The Motion Picture association of america is reporting that Global Box Office sales grew 1 last year to 36. 4 billion, despite a 5 decline in the north american box office. The growth was driven by china where the box office surged 34 last year to 4. 8 billion, making it the first market overnight the u. S. To exceed 4 billion at the box office. The number of theater screens increased by 6 worldwide last year driven by 15 growth in the Asia Pacific Region and in february chinas box office topped the u. S. For the first time ever. The growing power of the chinese movie goers having a growing impact on Hollywood Studios production choices. We can expect an even greater focus on the kind of franchise and action films that translate particularly well overseas. Guys back to you. Thank you very much julia. There are more millionaires than ever here in the u. S. How many more . About half a million. Brand spanking new millionaires being minted in 2014. Robert frank, our expert on such matters. How did this happen, and why so fast . The u. S. Stock market is still the largest Wealth Creation machine in the world helping to create 500,000 new millionaires in 2014 hitting alltime high of 10. 1 million millionaires. Thats according to spectrum group, which defines millionaires as households with a million or more in investable assets. We have added three million millionaires since the bottom of right session, and were now to the 2007 level of 9. 2 million. Now, multimillionaires, theyre also growing. 1. 3 million households worth 5 million or more and 142,000 households worth wealth going all the way up the income chain there. Generally, millionaires are bullish on the economy and the market. Just under half plan to put their money into stocks and mutual funds over the next 12 months, and 23 plan to put their money into fixed income. Millionaires are hedging their bets bigtime, with half putting money into cash or savings. Now, if you look globally only 39 of them are investing overseas with europe. Now their favorite region thats after years that they favor china and brazil. Now, among the 25 million and up crowd, nearly half are putting their money into the alternatives like hedge fund private equities reets and private placements. Among the biggest worries overall, Interest Rates, tax rates, and Overall Economic policy. Maybe the millionaire investors are not so different from everyday investors. Its what we all worry about, right . Thank you very much. Thank you. Time for the power rundown. Lets get right to todays first topic. Were supposed to pause and listen here. Listen. Zoo whan were talking about here. Robin thicke and pharrels blurred lines. We just heard the similar track by the great marvin gaye. Right. So there you have it. I think, you know, if are you a musician modern day musician you might be trying to evoke or echo the era in the past. We have a market flash here. Go ahead. Take it away. Im not sure who were tossing to. Im going to pick it up because we are watching shares of salix and Endo International halted for trading. Again, news pending, so both endo shares endp and salix, slxp are halted for news pending. Now, remember our own david faber reporting that there is a possible bidding war erupting for shares of salix pharmaceutical that had been agreed to be acquired by Valent Pharmaceuticals and now endo may be in the running to try to top their bid. The jury never actually did what we just did and listened to the song sidebyside. They looked at sheet music and they they were taken through the sheet music by musiccologists who described the cord progressions and so on and so forth. There are only so many notes in music. This is this was really this was close. Its very clear. I think its going to face appeals. Just to my earlier point, i think if you are a musician who is trying to maybe give the impression of a past eras sound an omage. Are you expected to go through every single song from that era to just make sure that your rift does not copy somebody elses . Its an interesting case. Remember the 1980s song i come from a land down under. Sure sure sure. By the band men at work. Love that song. In 2011 they had a final court bid to throw out a case against them that they had copied that flute riff from they lost that and greg hamm committed suicide. He said i didnt copy it but, unfortunately, because so many years and years and years going through the courts he eventually just couldnt take the pressure anymore. Pharrel and robin thicke say they didnt copy it either. Theres another song out there right now. Its kind of a stadium rock song that has a cord progression in it, and i cannot dont ask me to sing it. Were going to take a quick break. Well be right back. Okay. New englanders dealt with blizzards, freezing rain, and now icebergs. Check out what is washing up on the coast of cape cod. Weve got that story and more. Polar bears are next. Polar bears on beacon street. Monitor them. And rebalance your portfolio. I can do a lot of what humans can. Except have a real conversation. If youd like that, you can always speak to someone at schwab. They arent algorithms. Try not to hold it against them. Say hello at intelligent. Schwab. Com theres nothing more romantic than a spontaneous moment. So why pause to take a pill . 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For a free 30tablet trial go to cialis. Com google opening its first brick and mortar location in london. The google shop designed to be very interactive. You might expect that. The store displays Android Devices and wearables. Two more google shops expected to open later this year. Well earlier on this hour we did a segment on offensive tweeting and fathers defending their daughters. Now, in the time since we did that segment, actually the mean angry, and nasty side of twitter shockingly. See what happened next in two minutes time. Every day, our teams collaborate around the world to actively uncover, discuss and debate Investment Opportunities. Which leads to better decisions for our clients. Its a uniquely collaborative approach you wont find anywhere else. Put our global active management expertise to work for you. Mfs. There is no expertise without collaboration. So, how do you feel about cash back . I would not say im into it. But lets see where this goes. [ buzzer ] do you like to travel . Im all about free travel, babe. Thats what i do. [ buzzer ] balance transfers you up for that . Well unh. Too soon . [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Search, compare, and apply. [ ice rattles ] cant say thank you enough. You have made my life special by being apart of it. everyone cheers glad you made it buddy. Thanks for inviting me. Thanks again my friends. For everything for all your help. Through all lifes milestones our trusted advisors are with you every step of the way. Congratulations thanks for helping me plan for my retirement. You should Come Celebrate with us. Id be honored. Plan for your goals with advisors you know and trust. So you can celebrate today and feel confident about tomorrow. Chase. So you can. Plus the surprising thing. One of googles top executives just did. Well roll out something called the tshirt ceo indicator. We made it up about an hour ago. It really shows our age, and, mandy, are you going to always for those tweets. You should. We were speaking with catherine and said there should be Community Policing of twitter trolls and Cyber Bullying. Straight after the segment, someone tweeted in to me go back to england. Your accent is to bleeping ignoring. I retweeted it and immediately the Community Rallied around and i got, like about 18 at last count people coming to my defense and telling this person that they were youre not from england. I want to give you props because it was you who originally gave me the idea. When you get a nasty tweet, retweet it. Avatar. If it has the word ear or england in it, you should automatically retweet it. Never drink before tweeting. Thats my rule. Which is why you dont tweet . Kind of. All right. Thats it for the first hour of power. Brian, take it away. That was a zinger. Nice. That was quick. That was fast. That was great. Tyler and mandy, thank you very much. Well, now were down one. 2 00. 11 00 in phoenix. Welcome to the second hour of power lunch. Im brian sullivan. Melissa lee at the nasdaq. The dow is flat. Oil making a huge move down. First up though apples itunes store and app store are also still down. Apple shares are down 1. Yeah, 1. 1 . Lets go down to josh lipton for the latest. Josh. More information on what exactly happened at apple today. Customers around the world might have had a tough time making purchases from a number of apple services. The app store, i tune store, it is mack app store have been down. In a statement to cnbc apple saying the cause was an internal dna error. What does that mean exactly . You can think of the dns as a giant address book. It tells your app where to go on the internet when you are searching. A dns failure means your app cant find the apple store. Apple says its working to make all the Services Available to customers as soon as possible. Well keep you posted on the companys progress. Back to you. You know, josh i will say this. I downloaded 8. 2, the ios last night. I was a little surprised. Im sure it has nothing to do with the story, but the Apple Watch App showed up on my phone whether or not you have an apple watch or not because theyre obviously not out yet. You cant delete it and i have noticed that a number of people out there are i dont want to say angry about it but annoyed with it. The timing does seem a little bit odd. I can understand it. Hopefully its no indicator of interest in the device. You know survey from analysts they were kind of all over the place. Some said it was going to be big. Others werent so sure. Hopefully the angry tweets you are getting arent an indication. There you go. Josh lipton all over that story. Thank you very much. Oil and obviously apple big stories, but once again, we have to begin with money. Maybe all about the benjamins. Its all about the yet again because currency moves becoming the story of the were. Shot caller and brawler, sarah eisen with more on that. Too much cleverness for. I cant handle it. Europe has been the show stopper, but asian currencies are getting hit as well. Theyre getting absolutely hammered. Some of the currencies are down almost as much as the euro and those Central Banks have been in easing mode just like the European Central bank. In fact, looking more broadly, this is the strongest threequarter move for the dollar ever pointed out by dan greenhouse, strategist at btig. Looking at the broad trade weighted dollar. In emerging markets, particularly in asia you might think thats great. They want weaker currencies. Thats certainly one reason theyre making their policies ease wrer. Helpful for exports. We know the countries, these economies like china are exporting powerhouses, and that is true but it is the speed and the severity of the move that is problematic. Think of the money that flowed into china and indonesia, into fastgrowing economies in search of higher yield. Well, now that is reversing very sharply. That money is flowing out as those rates go down, and its flowing here in to the United States. Turning out to be a pretty painful thing for some of the economies. In fact, global flows into emerging markets were cut in half. That includes portfolios mutual funds. That was the latest data out of the institute for international finance. Weve seen the stock markets. Theyre getting hit. Another big Ripple Effect of the massive dlavr dollar move. As i pointed out yesterday, stocks generally do well in a stronger dollar environment. You forgot the youre now physically threatening me. Which is fine. Tell us how rare this move is, the rapidity of a dollar move actually is . How rare is it . Its extremely rare, and thats not factored into the chart showing us a strong dollar can equal a strong stock market. Look, jeffrey mentioned this yesterday, and he said obviously the stock market is signalling it does not like the stronger dollar. The coo of gold man sacks said today it is not a positive thing to see the Dollar Strengthen to quickly. It is the second fastest appreciation of the u. S. Dollar on a broad basis in the last 40 years. As i mentioned yesterday in the financial crisis. Its time. Well, its one day since i said it. How do you invest in the stronger dollar world . Speaking of a stronger dollar is there nor opportunity for europe than in the United States . Hedge fund manager charles of flow point sold the biggest including exxon. Now the number one short in its portfolio, and were also joined by jason pride with who has 29 billion in global assets. He thinks the dollar surge is good news for foreign exporter wheres, one reason why he is bullish on europe right now. Great to have you with us. Im going start off with you. If you think its such an advantage for foreign exporters, that would i would imagine, mean the flip side is true, and that means its the disadvantage for u. S. Exporter wrshz. When you have a rising dollar the cost of your exports abroad goes up. If you are a domestic producer shipping abroad and also internally within the u. S. Economy, exports coming in are more competitive against your own goods. That goes opposite for international companies, whether theyre based in europe or japan. Any of those economies that are seeing their currencies fall relative to the dollar. Suldly their exports are more competitive, and their goods are also more competitive domestic in their own economies. You are seeing in the numbers, the exports overseas are rising. Now, the exporters inteshl to the u. S. Are falling or just not seeing the same appreciation. Jason, narrow it down for us. Away kinds of foreign exporters are looking at . What percentage of sales abroad are you looking at in terms of criteria to invest . Look, the more you get, the better off you are when you go internationally. Kwaut often youre dealing with Multinational Companies that are selling into their own International Markets as well as abroad. What you want to have is the Manufacturing Base be dom sil in those areas instead of being a European Company that happens to have 8 of their manufacturing in the u. S. You want the manufacturing actually abroad. Its building upon the costs that are embedded within those economies there, and then selling abroad. Its a little more than just looking at the revenue numbers. I want to go to you because hone in on the oil industry because inherently in this whole thing is that the oil industry is on the other side of the strong u. S. Dollar trade. Thats how you are investing. Youre actually short a couple of major integrated. The Commodity Companies are most directly impacted on the negative side of the strong dollar trade, and energy is the most obvious example of that but this goes throughout the Energy Ecosystem into industrials and into even financial services. There has been a change in the last five months since this first strengthening and thenen strength firming and then strengthening and then this unprecedented run of the dollar has unleashed a lot of Creative Construction in the u. S. Very Good Environment for long shorts. Lets get down to the shorts. Exxonmobil for one. Were seeing the stock today trade at near threeyear lows. You just put it in your portfolio as a short a week ago. Some would argue the easy money has already been made on this one. Weve seen the bulk of the decline. Why are you short at this point . Well exxon is a company in crisis, and 2007 and 2008 was the great learning experience for us trading financials at the same time. Exxon today is spending all of their cash flow on cap x di dendz and despite buying back a billion dollars a month of stock last year a key here is that credit default swaps on exxonmobil are still rising. In other words, bond holders are getting more and more nervous about getting their money back plus a little bit of interest. Ebbing quit holders need to be as concerned. The credit to equity signals were a significant learning experience in the financial crisis. All right. Going to leaf it there. Thanks, guys. Charles with flow point. Jason pride over at glen meade. Brian. Melissa, thank you very much. Well your own top story is oil. It does continue to slide. Crude oil now at 48. 22 but earlier it hit 47. 33 a barrel. Production continues to soar. Inventories continue to soar. As we take a look at our power city indexes, remember this is the 30 metropolitan areas, 12 stocks a piece we look at here only on power lunch. Houston continues to underperform. In fact, the average return of the 12 companies that we follow in h town a loss of nearly 6 this year. That is about 5 worse than the overall s p 500 in the year 2015. Another group hit hard by oil. Not just towns. The off shore oil drillers. As a group they have been hit harder than really any other energy group as a whole. Gulf mark off shore. Helix energy. Rig net. Diamond off shore. Transocean. Down big. Gulf mark down about 40 . If you believe oil will eventually turn higher are you able now to pick up some of these companies at deep did hes counts . Are they a value . Lets talk to ken, sr. Oil Field Services analyst with global hunter securities. When we see major companies, multibillion Dollar Companies losing 30 or 40 of their value within a matter of months two ways to look at it. Good Companies Trading at a deep discount to the future or companies that are in trouble and should be avoided. Which one is it . Its a combination. Unfortunately, this isnt that unusual a circumstance in the off shore drilling industry over my career which goes back into the mid 1990s. You know in context you have taken oil prices down 50 . An industry off shore drilling that relies on oil prices for its source of revenue being down 50 is not incredibly surprising. Historically these stocks can get very, very cheap. Were a little bearish on the off hor drillers as a sect o just because, you know where is oil going to bomb p out . Okay, i not probably going to stay down here but what we have proven is that at 1 had been a barrel for oil, we can out produce Global Demand in the United States. What price is going to clear the market and how much off shore activity will there be in that market . That being said this group is massively underperformed. Youve got a group of stocks here that are, you know in many cases trading at. 5 times book or what we tend to look at as gross investment capital. Very close to the same value you saw in 2008 and 2009. Maybe not as low as they got in 1997 1998 or 2001 after 9 11. Like any like any industry, ken, that suffers a serious downturn it doesnt matter if its oil, internet, whatever, there are companies that are better run, better capitalized with better balance sheets. Then a contrarian call and off shore boat sector. Its just gone through a mass i new build program. Theyre paying down debt. I like the fact that theres a lot in the gulf of mexico which we think could be a good a strong market for the off shore drillers. We do appreciate your time ken. Thanks very much. All right. Thank you. Take a look at shares of apatch where i. Down about 38 in just the past six months. Why are we mentioning apache . Well, tomorrow were going to be speaking with the new ceo of the company john right here on power lunch. Let us set the menu for the rest of the hour. Is there a brain drain at google . A major executive on the way out and doing it in a very interesting way. Plus retail taking a page out of Silicon Valleys play bobbing, and the new report on wall street bonuses is out. Who is getting paid . Who is getting left out . Why is one group really unhappy about it . All that coming up. Your dogs definitely got your back. But whos got your back when you need legal help . We do. Were legalzoom, and over the last 10 years, weve helped millions of people protect their families and run their businesses. We have the right people onhand to answer your questions backed by a trusted network of attorneys. So visit us today for legal help you can count on. Legalzoom. Legal help is here. Zimplt there has been no group hotser than the biotech and pharma sector. About an hour ago we had more news breaking on talk of a joining us now on set david faber for what is a back and forth really this was i dont want to say an on again off again, but certainly we sniffed around and didnt come back. Endo, salix, what is going on . We can tell you at this point both stocks are halted nor news peppeding. That news will be that endo has made an offer and sent to salip. Lets call it a couple of hours with an email letter attached to it saying we would like to try to buy you for between 170 and 175 a share. Our oofr would be 25 cash 75 stock. In fact, if you are a salix holder, if this deal were to happen, you would own 35 or 40 of the combination. They are saying conceivably, it would still be a creed of up to a price as high as theyre going to pay between 170 and 175. It would require a shareholder vote of endo shareholders. Remember, its an irish company, but what i understand is it would require a shareholder vote, and obviously it would take a lot longer to close. Currently valent has a deal to acquire salix for 158 a share. It is close to closing. The tender is out. They dont have the hard approval. Conceivably, it could close as early as april 1st. Why would you tender a stock thats 1 6 at 158 . Who wouldnt . Essential this will give valiant cause. Theyll probably just pause and see what develops. If you are salix board, you are going to ask, a lot of this is stock, do i want to take this much paper and take the risk and timing theyre talking the end of june at endo in terms of when they would hope to close this in this letter that is brett to be replaced. A drug thats going to be if front of the fda, and they said were going to decide bit end of may. The valent deal closes before that. Any risk that happens is valents risk if it were to get turned down, but if you are endo and you agree to do this deal and you are the salix board and you say, okay, well do the deal, but you still have a shareholder vote that comes after that fda vote, and it goes against you, then your shareholders could say we dont want to do this. You and i were talking in a commercial break about the timing of that approval because i said, well its kind of cowardly on endos part. We want to buy you, but we could back out. If you areal salix shareholders why would you go with endo even at a higher price when it is conceivable no deal would consequence mate if you fail that fda test in may . Its a great question. One the board is going to have to undertake. Endo will also have to pay a break fee. Its 350 million. That adds to the cost there. Timing is important. Again, valent will be able to close this deal. Probably within a month. Maybe it will be a bit more but unclear if this will go to the end of june and to your point, that board will be taking on the risk conceivably of that fda approval, which is something they wanted to avoid. This is a board that just wants to get out of dodge. They dont have a ceo. They suffered through an accounting problem at the company. They finally got a deal done. They want out. Endo by the way, was in the auction, brian. They were there. Maybe we should just try again. David faber, thank you. Melissa. All right, guys. Coming up, would you let your child take an uber car by him or herself . More parents are doing it. Well discuss that. Plus, reinventing fashion in new york city. Courtney rag at the nasdaq with that story. Thats right, melissa. The industry the fashion industry has long been slow to adopt technology but one project is a startup in brooklyn, and theyre using the tesla model to reinvent the high heel. Are you curious . Youll have to stick around to find out why. Qo e d8j8j8j reinvepting fashion is a tall order when it comes to technology, but one startup is looking to take on the challenge . Courtney reagan has that story here at the nasdaq . Its a fashion startup taking on the Silicon Valley model from the basic concept of the business itself to the fashion designs of then. Manufacturer new york is working towards a fashion Tech Revolution bringing the entire fashion ecosystem under one roof in brooklyn new york. Smart clothing that changes color, controlled by your smartphone. Bioleathers for the vegan conscious, and nighttime visible den i want for safety while cycling. Ideas emerging in fashion and what these designers call the big Business Opportunity of fiber science. We can create responsive fibers that do all sorts of things and interact with both the boyd and with other types of technology in ways that the public has never experienced. Manufacturer new york is the citys first fashion ink baiter aiming to encompass development, design, and production all under one roof. Which is judge shes working with an astronaut and engineer and a shoe artisan to reinvent the high heel. The interior of a high heel hasnt been reinvented since i dont know when. Ever. Thats the whole point. Youre not going to know that the inside is actually like a tesla. The new york city is encouraged by the economics behind this giving the group a 3. 5 million grant to transform the former military Storage Facility into a forwardthinking fashion ecosystem by colocating various parts of the fashion process. It will allow designers morning ideas to be turned into prototypes by the evening. I would imagine this is a way to keep the fashion business here in new york. Exactly. Rents are rising so fast in the garment district. Im excited about the high heels. Can you imagine what thats going to look like . When is that coming out . The fall. We fingers crossed. Courtney reagan thank you. Theres no more dress debates. Is it black or influence or white and gold . Its whatever we want it to be. Thank you very much. All right. On deck at street talk two analyst calls on burger stocks. Plus, an under the radar biotech name and oil is down again. Will it close at the lows of the day . Were going to find out in minutes. Stick around. 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Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Hello. Im sue herrera, and heres your cnbc news update at this hour. Dense fog hampered search efforts for the military helicopter that crashed off of a Barrier Island near pensacola, florida. Seven marines and four Army Soldiers were on board. The aircraft which was on a routine night training mission. All 11 Service Members on board are now presumed dead. A federal judge ruled facebook must face the nationwide class action suit. The federal trade Commission Filing a civil lawsuit against direct tv alleging that the satellite tv giant engablged in deceptive advertising. It accused the company of failing to adequately disclose the consumers will be charged more after its promotions expire. The pilots of the worlds first airplane flying on Solar Energy Solar impulse two, held a News Conference in india today. They are currently on the second leg of a 22,000 mile journey to show that flying long distances fueled by Renewable Energy is indeed possible. Thats your cnbc news update this hour. Back to you, brooen. All right. Sue, thank you very much. Well sfli and demand is sometimes works. Oil inventories and Oil Production still up. Oil prices down again. Its been an interesting day. Lease start by reviewing. We were up and then we went lower. A build of two million barrels. We did go down lower from there. Now it looks like were going to drop down oh only 15 he cents. 48. 13 is the current price of wti. You would think a build like this along with the big builds weve seen along with the estimates from the eia upping their projections in the u. S. This year would really send this lower, but its not. Also, the stronger dollar inching its way up to 100, the dollar index as well these are all very bearish factors. Traders telling me if we get a close in the near future under 48, they do think we could go to the down side but if we hold over that key critical level, they do think this is you know more support for the theory that we are trying to find a bottom here. Really all the signs point to moving lower, but this thing seems to want to move up in the face of all of those factors. All right. Jackie deangeles. Thank you very much. 48. 10, the price of crude oil. Melissa. Bob, pretty anemic. Not a lot of volume or bids out there right now. Put up the s p 500 on an intraday basis, and i think the important thing is theres no direction at all. Now, heres what concerns me a little bit. Put up the s p 500 earnings for the quarter here and i we have gone negative for the quarter partly because of the collapse in energy earnings. We all know that. Now the dollar surge is adding another dimension to this earnings drop because its hurting earnings overseas. Not only are we negative for the First Quarter now, but were negative for the second quarter. Look at this 1. 1 for all of 2015. Thats what were expecting. We keep getting Dollar Strength. My point is that it kind of makes the dollar surge is making the market a little bit of dead money in the shortterm and figure out exactly is the dollar going to keep going up or not at this point . Thats a little bit of a concern. Take a look at the s p 500 yeartodate. The bulls keep pointing out were right in the middle of a trading range. Were not collapsing to any new lows. Theyre right. 2,045 to the high and low that weve seen so far this year. I guess you can argue sideways on the year if we had no real gains after five years of great gains is not necessarily a bad thing right here. I guess what im trying to say, guys, is were range bound right now, and weve got to figure out where the dollar is going from here because thats really starting to put more pressure on the earnings. We didnt need it given the energy price collapse that weve had. Guys. Dmroo thank you very much. If this keeps up, trader joes wine will be 4 chuck. Right now we have brand new from dom. Dom. Speaking of higher prices were watching shares of both salix and Endo International. Both shares are halted but Endo International has confirmed that it is placing a bid to buy Salix Pharmaceuticals and the proposal is for 175 per share. Again, in salix stock and cash. The cash and stock transaction, again, valued at 175 per share based on closing prices from march 10th. Now, the company says it does believe its proposal is superior under the terms of its current agreement for salix to be acquired by valent pharmaceutical. They also note Endo International that if a negotiated transaction were to be agreed with salix endo anticipates it could close this deal in the sending quarter and its confident it would valent shares are still trading and down about 4 . Theyre off of their session lows, but, again, shares of salix and endo halted. We have confirmation salix, again, david faber has been reporting all day. Salix has received an offer or endo has made an offer to buy Salix Pharmaceuticals, 7,500. Watching those names. Thank you very much. Well does the dollar spike change what the Federal Reserve is thinking about Interest Rates . Let us bring in steve liesman. My question to you to begin, sir, is very simple. Are we putting the cart before the monetary horse . In other words, we keep saying will the dollar change fed thinking . What im thinking is the dollar moving because of fed thinking . It was, and i think thats initially the case brian, but i think weve gotten to a point with this spike in the dollar 22 yearoveryear change appreciation of the dollar that now its coming back on the fed, and it has the potential, i think, to change their thinking about Interest Rates, and for that reason i want to talk about real Interest Rates and how a spike in the dollar is actually a tightening of fed policy. You know what the real rate is. The real rate is the nominal rate minus the inflation rate. If inflation falls, what happens . The real rate actually rises. You have a lot of people who are looking at the strong dollar, which imports this inflation and Lower Oil Prices so you know what, that core rate is coming down. Inflation is going to fall. And rates remain the same. You have a rise in the real rate. The same thing as a tightening of policy. What you may have the fed do with perhaps either put off or extend the time period for when they actually end up raising Interest Rates. I love how you said imports disinflation. Would that be just a complicated way of saying we buy stuff for cheaper now . That would be yes, but we also sell stuff for cheaper. Thats another important part of it. Fwloo yes, but we are a net import versus a net export. If im an Apparel Company and im making my stuff overseas im now going to get a did hes count of bringing that in. If i sell a lot of stuff overseas, it hurts there is a drag on the export side. Essentially you will have more imports coming in. You will have fewer exports coming out. That means a bigger negative from the trade deficit. We are starting to live in very interesting times. The way you started this is right because the dollar was initially a result of the differential of Interest Rates between europe and policy between europe and the u. S. And now its come back to effect what the u. S. Fed has to be thinking with that lower inflation rate essentially being a tightening of policy. Lets not forget i called for euro dollar parody three years ago. I was only 36 months early. Did you remain liquid while the market remained irrationale . Only after 5 00. Steve, thank you. Appreciate that. Time for street talk. Five stocks five analyst calls every day. Melissa lee, lets go. Lets go. Lets start with something that reminds me of you. Beauty. Which is what . Aww. Ulta salon, starting with a buy. 165 target. About 15 up side. St been a pretty hot stock. 54 over the past month. Oppenheimer raised it is privates price target to 160 and says for earnings it expects it to at least meet the estimate. A lot of positive sentiment around this one. Meantime were watching hand it, recent burger chain. Look strong but you can see the stock is slumping. If you can look at shares of has been it. Thats because the unit growth number was not up from prior guidance. Raymond james today raising estimates reiterating the market perform rating on this. The guidance maybe a little kwfsh. This is one of the stocks, though melissa. Our guest will stevens light, wrovl not the kind of day he wants to see today, but its a long slog out there. New jerseybased company. Stock is a competitor of sorts to has been it burger. That is red robin gourmet burgers. Longbow research upgrade it from a buy to a neutral. They say business looking pretty good. Their target on red robin, 99. About 25 up side. A key part of this call brian, is lower gas prices. Material uptick in traffic. Interesting because i interviewed the ceo on fast money at the end of february. I asked him specifically about the impact on gas prices. He said that he is not seeing the impact. You know what do you believe . Sally smith of Buffalo Wild Wings said the same stuff about two months ago that they had yet maybe over time. They havent seen it yet. Stock number four five below mkm upgrade it to a buy. Price target 35. Price down 30 yeartodate versus the flat performance seen by other retailers as well as the s p 500, and kmc is a lot of growth potential. Thinks five can support 20 growth rate because the retailers are only in 21 states and have yet to enter the most populated states. Not a better story to get the slip in sides of mike and ike. Box so big you need a mroo thats what cramer does. Me too. Mike and ike. Best candy ever. In the meantime, their target is 25 times next years earnings estimates, so theyre pricing in a lot of growth for that five below call. The average target is 42. 50. Stock five as always. You are wered the radar name. We prooi try to pluck out a smaller cap stock that doesnt get a lot of attention. Today its inogen. Imgn. A portable oxygen company. The company showing the investment maturity of a company that has been public much longer than a year. Their target 45. Melissa, about 20 up side. This is a new high in the stock, and this is a bold call considering earnings are out tomorrow. Be careful. It has a 39 Short Interest and the flow is neem the number of shares traded every day is very, very thin. Only 150,000 average daily. Only if they beat earnings it could be we might see a spike after hours. It could work out another way. Im the optimistic guy. All right. Thats it for street talk. Two great pieces of video thaw need to see. A Television Reporter robbed while in front of the camera on television. And what happens moralingan brennan is live at one of the biggest shipping hubs in the country, but i dont know where that is. Where are you . We are in kansas city. Im going to tell you, train, ship, and truck, oh my. We are here to talk about the Fastest Growing business within freight transport. Were going to break that down when power lunch returns. Zoirchlgts check out this amazing video from cape cod. Icebergs are wrushing up on the shores of massachusetts. The combination of the deep winter fries and recent warmer temperatures have led to iceberglike formations. Sh residents seeing them as beautiful, but if you are a fisherman trying to make a living of course it is a pain in the, brian, hyannis. I like it. I like it. I knew you would. Poor guy trying to start the the dow transportation average is uptodate. Its had a big run over the past year. Its up nearly 18 . Like the geico commercial says Everybody Knows that. Did you know that the Smallest Company that index is also the top perform ner the year and one of the only Companies Based in honolulu hawaii. Thats right. Little old madison corp. It is a hawaiian based shipping company. It is up a cool 1 yeartodate. And it is not an accident that we mentioned transports or a shipping company because of the economy recovers, and we all buy more stuff. Companies have to ship all of that stuff we buy. Maybe seeing good times again. That is why Morgan Brennan is in kansas city at one of the biggest shipping terminals in all the nation. Morgan. One of the biggest shipping terminals. Some of the best barbecue ive had in my life. Nonetheless, if you are going to invest in translates you have got to get familiar with these containers. These are intermooedal containers, and basically they are ugt to ship their stuff inside of them shipped use aing combination of truck, train, and if its international cargo, ocean liner. Now, this has been around for decades. This concept has been around for a long time. Weve really seen it take off. Fwloo your Companies Like Norfolk Southern kansas city southern, bnsf and thats really because it has become more cost efficient to implement a combination of train and truck rather than just moving your cargo across the country exclusively by truck over the road. When you bring rail into the equation, you can actually haul more goods, more of these containers over the rail and when Energy Prices are high its a much more fuel efficient method to use train to do the majority of that haul. That being said the industrys trade association is expecting similarly strong growth for this business this year. Again, looking at potentially 5 growth, but there are three factors that analysts are watching and watching very closely to see whether that happens. To see whether fuel prices continue to come off because if fuel prices come off all of a sudden the cost of trucking becomes over longer distances becomes more attractive versus this mooed of transportation. The second all that congest wron weave seen in the west port thats had Ripple Effects throughout the country, even here in cap can city and the third is the stronger dollar. Were seeing that surge in imports, but on the flip side of that, we can see less exports moving back out across the country. Back to you. All right. Morgan brennan go enjoe that barbecue. Coming up, are flip phones really making a comeback . We will discuss that. Point, counter point. Plus the latest numbers. Wall street bonuses are coming out. Thats coming to you when power lunch roll on. 80 of the poor in africa are rural farmers. 96 of them are doing rainfed agriculture. Theyre all competing with each other; theyre all making very low margins making enough to survive but not enough to get out of poverty. So kickstart designs low cost irrigation pumps enabling them to grow high value crops throughout the year so you can make a lot of money. Its all very well to have a whole lot of small innovations but unless we can scale it up enough to where we are talking about millions of farmers, were not going to solve their biggest challenge. This is precisely where the kind of finance that citi is giving us is enabling us to scale up on a much more rapid pace. When we talk to the farmers and ask them whats the most important thing. First of all they say we can feed our families. Secondly, we can send our children to school. Its really that first step that allows them to get out of poverty and most importantly have money left over to plan for the future they want. [ male announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Criminals in south africa becoming almost impossibly brazen. Look at this video. A tv reporter in south africa was getting ready for his live report. The camera was rolling. Two men didnt care. They accosted him and they robbed him. When the reporter tried to fight off one man, the other guy pulled out a gun. They took off with the reporter and the cameramans cell phones. A very dangerous place, south africa. Shares of google down 7 while the s p is up 9 . But google may have had a bigger problem than a lagging stock price. Some top talent is leaving the company. Josh . He was once described as googles secret weapon. Patrick pichette is a well regarded cfo. Hes retiring so he and his wife can, as he put it grab your backpacks and hit the road. One problem for google there have been other highprofile executives also hitting the road lately. Remember, there was the unexpected departure last summer of nikesh arora. He left to join softbank. And then last monies alan eustace announced his departure. Financial analysts are concerned about what they say is a possible brain drain at the tech giant. These are, of course experienced executives who arent easy to replace. The departures are coming at critical times. Consumers are moving to pcs to mobile devices where advertisers pay less. The question is how ceo larry page can discourage other employees from leaving. He could announce a capital return program. It might give stock a muchneeded lift and please its employees. Google says there is no reason to worry about these executive departures. The company emphasizes its deep bench of respected talent. The question now, of course, is whether investors agree. Josh, thanks for that. Time now for point counterpoint. Let us know on twitter Melissa Lee Cnbc and sully cnbc. Are you ready, brian . Totally. The first topic is apparently more parents are using the Car Service Uber to shuttle their kids around town. Melissa, your take first, please . I think its moderately better than taking a dab butcab. The bottom line, i understand child care is very difficult, especially for working parents, but youre sending a kid unescorted into a car. Just because you can track them doesnt mean theyre safe. Outside of l. A. San francisco, boston and new york city, most of our viewers are thinking what the hell are they talking about, putting your kid in a limo . Come on this is like an fwp, first world problem, melissa. I guess so brian. Topic two, and this may surprise you. But flip phones are making a comeback for celebrities who do not want to worry about being tracked by gps. I know as a celebrity, brian, you probably dont want to be tracked by gps. Everywhere i roll i roll up the flip phone. I was skiing in colorado the past couple days. One of my buddies pulled out a flip phone. He loves the battery life. I have to say is it like a razor. I get why people are doing it. I dont think its just because of not wanting to be tracked. Twouf phones like probably a lot of viewers do. I have thought about going back for the battery life. Its cheap, and one is enough. You need to upgrade your phone. When it comes to battery life the newer phones have fantastic battery, but on a flip phone you cannot use things like yelp or i have a 6. I have a 6. All right. Okay. All right. Topic three, what im jokingly calling the tshirt indicator. Watching cnbc lately i have noticed that there are more ceos in tshirts on our network. And i thought is this like 1999 again, melissa . Are you concerned . We are showing a clip of the meerkat ceo on earlier on squawk alley. This really got us thinking. Its a cutet shirt. I dont care they can wear paper bag. If they deliver a great idea and can execute, fine. Im not knocking the sartorial choice. On the weekends at home im lucky if i wear a shirt at all. Oh please, god, wear a shirt. Jo im talking about the youth. Its all Young Technology ceos. Im just noticing a lot you sound like a curmudgeon. Is every Company Getting funded is sort of my point . Like its not what they wear. Its just that theyre young and happen to be tech and im thinking there seems to be a lot of young tech ceos on the air and we have both been doing this a long time and i got a little spooked. Thats all. I get it. That guy does not have a flip phone, by the way. Probably not. Final tally. Sullivan, 3, lee, 0. On deck the big report on wall street bonuses just came out. How much is being paid out . That is straight ahead on power lunch. In new york state, were reinventing how we do business so businesses can reinvent the world. From pharmaceuticals to 3d prototyping, biotech to clean energy. Whether your business is moving, expanding or just getting started. Only new york offers you zero taxes for 10 years with startup ny business incubators that Partner Companies with universities, and Venture Capital funding for high growth industries. See how new york can grow your business and create jobs. Visit ny. Gov business can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . E financial noise financial noise financial noise financial noise the big report on wall street bonuses just out. Here is Mary Thompson with more. Wall street bonuses rose last year at a much slower pace than 2015. According to a report the average bonus including cash and payouts or cash payouts and deferred bonuses that were cashed in rose to 172,860 from over 169,000 in 2013. The increase coming as the industrys profitability declined 4. 5 to 16 billion. Key to new york city the industry accounted for over 167,000 jobs in the big apple last year and in a positive sign, it actually expanded payrolls for the First Time Since 2011 adding 2,300 jobs. This is a positive for the city and state as wall street jobs account for 7 of city tax revenue and 19 of state tax revenue revenue. Wall street firms arent hiring the traders and bankers who receive big bonuses, but those who keep their operations in line with the law. I can tell you one area that anecdotally we keep hearing is a growth sector is compliance. So positions relating to compliance with the regulatory reforms. Now, the comptrollers data on average salaries wont be available until next year. For 2013 the average sally including bonuses 355,900. Thats five times the average salary of a city worker in new york citys private sector so nice work if you can get it. Quickly, whats on fast money tonight . Were trading the results of the bank stress tests, brian. Lots of breaking news. Thank you for watching. Get your power lunch to go on cnbc. Com. Closing bell starts right now. And welcome to the closing bell, everybody. Im kelly evans on this hump day at the new york stock exchange. Happy hump day. Were pondering that saturday is pie day but well get to that later. Im bill griffeth. Markets stabilizing a bit after whatever happened yesterday. The 300plus point decline, a fed tantrum, a strong dollar tantrum, whatever it was. It was the worst selling that weve seen in a while. It could happen again, maybe not. Well take you through the final hour of trading. David rosenberg is with us. He says this right here is a buying opportunity, and he is here to name some names of things he likes right now