Transcripts For CNBC Power Lunch 20150313

The s p 500 and the imm, the russell 2000. There you see it is a red letter day on wall street. Volatility index spiking. That would be green, folks. That is higher by 5 today at 1625. Lets take a look at the euro. Diving once again, and there you see the euro at 105. 08 down just a bit there. The tenyear note at 2. 1 . West texas crude at 45. 17. Down 4 . Gold up a little bit, an inch at 1152. I lost the number. Well bring it back. Mandy is out getting sunshine. Sarah is in the heart of the action at the New York Stock Exchange. Its good to see you, tyler. Busy day on the floor. The dow down a little less than 200 points. At one point we were down as much as 265. Lets get straight to bob ka san any on whats moving. The euro at the center. Its a choppy week. Ending on a weak note. A little about the dollar. The euro dollar relationship. Weak euro throughout the day. That caused pressure on our markets and increased pressure on the up side of european markets. Take a look at the s p 500. Were off our lows 2041 was our lows. You see how the market moved down in tandem with the euro weakening the dollar. The opposite effect has happened in europe. All a pretty good week on the up side. You see the story here. Weak euro buy europe, sell the United States. Very simple story here. Tech stocks are getting hit rather hard here. Ibm could go all to the down side. Look at it quickly how we were on the week on these stocks. Big declines in tech because they have significant cant operations overseas. Intel, cisco, coke even all on the down side. The mover down in oil is putting additional pressure on our markets here. Were seeing oil stocks come down rather notably as well late in the day with euro lows in oil. All of the big oil names like the xop, the etf 4, go with products also on the down side. Over to you. Bob, thank you very much. You know they talk about battleground states in political races, this hour were going to look at battleground sectors. Sectors that are tugging the markets one way or the other. Our guy to do that is dominic schu chu. Hi, dom. If you look at where we are this year, its been a volatile one. Year to date flat. Down half a percent. Theres been a lot of volatility. Its led to pretty much nothing in terms of the overall move in the market. Now if you take a look at at least this particular month, right . Just in the month of march thats where weve seen a lot of this down side move happen for the overall market. This righthand side of the screen. Take a look at this. Over the past month weve seen this s p 500 drop by 2. 5 . But the financials are the best performing sector so far in march. Even though theyre down half a percent, theyre outperforming the whole index. The notable lager here is the Energy Sector. Thats down 6 as measured by the etf, the xle. Thats the one that tracks the Energy Sector. If you look at the outperformances, take a look at pnc financial. On the financial side of things. The Bank Stress Tests came out this week. We saw a lot of these banks pass with flying colors. Those shares are up 4 . One of the leading gainers in the financial index. Meanwhile, you contrast that to some of these oil services and Drilling Companies like Noble Corporation which has lost 20 in just this month alone. Financials and energy playing tug of war. Coming up in the next half hour well take a look at two other sectors that are putting that battle together here. Again, some of them have to do with Interest Rates especially in light sarah, of whats going to happen next week with the fed rate decision. Back over to you sarah. Ill pick it up dominic. To Brian Sullivan for a quick news alert. Good segue off the oil price. Baker hughes said 56 oil rigs came off line last week. We are down 595 from this time last year. This is a weekly drilling rig count. Canada had a huge drop. Canadian recount dropped to 80. Canada 1 3 taken off line last week. Future production. Current production is still at a record high 9. 4 billion barrels of oil a day. Price of crude oil down as you mentioned at the top of the show, 45. 25. Were not seeing a pop in the price of crude oil. Takes time for the cuts to work their way through lower production. Still, number of rigs. 56 oil risk taken off jobs. Couple hundred jobs on each rig i should point out. Every time a drilling rig comes off, a lot of people lose their job. West Texas Crude Oil hovering now, as brian mentioned, 45. That is the lowest level in a month or thereabouts. More than a month. Courtney reagan is covering it all from the nymex. Its nothing but its a very actually busy friday, i should say here. There are a couple of things we have in play. We have the supply glut here in the u. S. Talking to a trader. They may be taking the rigs off line. The ones they took off werent producing that much. The ones still online are really producing that oil. We have the supply to the international agency. Continues to defy expectations. Thats one issue. The other issue is the dollar strike not just today but the trend we have seen in the strong dollar. Thats why oil is just really struggling to break higher even if technically you might want to do it. That dollar is really keeping it lower. Were going to try to break below 45. I dont think were going to do it before this settles here today. Tyler, we are about 1 a day from that low close of the year which is about 44. 45 on january 28th. Sarah, back to you. Thanks very much Courtney Reagan at the nymex. Currency is wreaking havoc. You can get this used to it. This is just the beginning or at least towards the middle of what is expected to be a long and powerful dollar rally. Let me explain. The dollar index. Its already up more than 22 in the last year. It sounds like a lot and it certainly is historically but strategists at top wall street firms will tell you there is a lot of room for the dollar to run up even higher especially against the euro. Euro dollar as we can see has already plunged off a cliff. Heres why it could go even farther. The ecb, European Central bank just starting its trillion dollar stimulus program. History tells us that that tends to lower currencies throughout. At the same time the Federal Reserve is on the brink of starting to raise u. S. Interest rates for the First Time Since 2006. That tends to strengthen the dollar big time. Goldman sachs in a note said the normalization of Monetary Policy in the u. S. Is a powerful and under appreciated force for the euro to go even lower. Another big driver here that we cant forget corporations that are taking a big hit right now on overseas sales and earnings they need to start hedging more aggressively. That means selling euros. Big seller of euros. The question is how low does it go. Goldman sacks in a widely talked about note talking about parity in six months. They are talking about 80 cents by the end of 2017. You can see that means at 1 05 they have the 80 level. We are talking about another 15 to 20 move over the next two years. Fasten your seat belts, guys. Tyler, back to you. Thanks very much, sarah. Lets bring in scott wapner now who spoke a few minutes ago with the founder and chairman of Lumber Liquidators, which i always want to call liquor lumber daters. He i would say, scott, did not give an inch in your interview over the controversy surrounding that chinese laminant flooring. I think we tried to ask him all the questions people want to know. Bear in mind its the first time weve heard from tom sullivan in two weeks, right, since we saw him on tape in that 60 minutes piece. He hit back hard at both 60 minutes and the short seller, Whitney Tillson in that piece. He defended the companys testing practices and declared that his companys products are safe. Listen. From day one weve always taken care of our customers, given a good product at a good price. We dont skimp on the product and our laminate is safe. Its were definitely not going to save 2 or 3 cents on laminate and ruin the reputation of the company. Look the big challenge is fixing the reputation of the company. I thought it was interesting when i posed the question to him as to whether they would just simply discontinue the use you asked him of the chinese made laminate. Regardless of what he says about the test in the court of Public Opinion there is an issue with the chinese made laminate. Laminates a smaller part of their business. The chinese made portion of that is yet a smaller portion. So why not do that . He said we will see what the customers want. Were going to sell a safe product, good product. If customers want it well sell it. Well sell a lot of european lamb my nantz. There are certain types that are better. Id like to put up an intraday chart of Lumber Liquidators. There you see if you analyze that chart, you can see where its been in the red all day long. You can see where it started to tumble and it would be surprise surprise right in that 12 00 hour when you were interviewing him. One of the other things i thought was interesting was you asked him, the stock is down. Why arent you buying it . Theyre right out of earnings. They probably are still in a blackout period which he couldnt go ahead and do that. Remember, the earnings came out just before the 60 060 minutes piece aired which they told investors. They did. They did. However, from the research that ive done and the filings that ive looked at this is a gentleman who hasnt bought any of the companys stock in an awfully long period of time. I thought it was worth the question. He suggested, i think in his words, that theyre always in a blackout period or something to that effect which is all the the case. Youre not always in a blackout period. If they are right now, thats certainly a good explanation. They are a couple of weeks out from their earnings report. He said when he comes out of a blackout period he will quote, look at it. He said that he has been in his words, dying. Dying to buy. The shares. The real question is can yesterdays events on the Conference Call which he was not a part of can todays interview, higgs first since the 60 piece, help in any way to restore credibility to his company and its products . And that simply remains to be seen. One final thought here. He did not rule out suing cbs or Whitney Tillson. He said he was considering both. Scott wapner thank you very much. Sarah, down to you. A major cardiology meeting kicking off tomorrow. Meg terrell with the stocks to watch coming out of the conference, meg . Its a big show down in cholesterol drugs. We show you about the 10 billion new class of therapies plus more stocks that may be on the move monday. Next. 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. Dollar general says it will spend more on labor. This is coming as a reaction to the tightening in the low labor market. Following walmarts decision to raise wages. Revlon gets half of its sales outside of the u. S. The clothing retailer buckle is reporting a 4. 3 growth. Online sales up 12. 6 . Sarah . All right. A rare bright spot, tyler, in todays market. The german dax now at record highs. One way to play germanys blue chip index is through the only u. S. Listed dax tracking eps. The aptly name dax from recon capital. Since its launch last november dax aps up 8. 6 versus the index which is up way more. 33 . In the past month the german index was up 8 while the eps was down 4 . Recons kevin kelly is the man behind this aps. Welcome to power lunch. Thanks for having me. Explain the disconnect and the massive move higher in the dax that youre not capturing in your proxy for the german stock market. Sure. If weve learned anything from Central Banks printing money, its great for equity values but when you couple that with the depreciating euro that can really take an effect on u. S. Dollar denominated investment. So if you have exposure to the dollar which has strengthened since then thats going to impact returns. But what you really need to look at is that the German Economy is growing at about 2 . They have half the unemployment of the rest of central europe. Theyre at under 6 . Theyre like america, theyre a strong economy. I get it. Thats certainly one reason why the money has been flowing in. Another reason is the weaker euro and how that helps German Company earnings. Why wouldnt i just call my broker and say, can you buy me the dax and hedge my euro exposure so i dont have to be on your eps which is not capturing the Massive Gains that we could be getting going straight to the German Market . Yeah there are several ways that you can hedge your euro exposure. One of them is through several other ets. Theres euo as well as eufx and so we dont know how investors are positioned. So they may hold some other european etfs. You dont want to bundle two trades in one. If you have an etf that has dax exposure and you try to currency hedge, thats two trades in one. It naturally serves as a diversification purpose in your portfolio if you have some euro exposure. You want to diversify yourself in multiple investments. You dont want to be purely dollar denominated especially when the dollar does start to rebound and weaken against the euro currency. Talk to me kevin, a little bit about the flows that youve seen coming in with the double digit move in the dax and your oe t etf. Do you personally own it . Yes. I personally own it. We have several clients that own it. Youre starting to see a lot of asset flows transition into the german index as well as the etf, our etf. One of the reasons why is because if you look at the names. Look at the top holding, bayer, theyre going to capitalize on the export prowess. Theyll see double digit growth. An ace in the whole is they havent commented on the euro depreciating. Last year every time there was a 1 depreciation that adds to the top line of 260 million euro. Thats depreciated. Youll see a big increase in sales from firms like bayer. And bmw. Thanks for joining us, kevin. Kevin kelly of recon dax etf. Tyler, big story, germany outperforming the u. S. Stock market. Up 8. 5 in a month. Thats the kind of gain anybody can get on with. Big cardiology meeting kicking off tomorrow in san diego. The focus expected to be on new drugs for cholesterol. Mr. Lipitor will be watching. Meg terrell with the details. Lipitor is an interesting one. Theres a huge push to bring a new class of cholesterol drugs to the market. Theyre made by amgen, and regeneron and pfizer. This week amgen will present data on howell its drug does at reducing the risk of heart attacks and other risks. Regeneron and sandfi. Fooiz pfizer is competing in the space. Theyre expected to talk about rejenner rons and amgens next week. Actelion will have a drug for pulmonary hypertension. Celexopag will be on the market. The data we see over the weekend could have implications for both of those stocks. Lots of activity in both drugs and medical devices at the cardiology conference. Its clearly hard at work on our heart. No one pronounces those drugs better than you do. I stay up at night. Sarah, down to you. Got a big story coming up. Robert frank that sounds like a juicy one. Sara this has everything an arrest in monaco secret storage bunkers, Money Laundering and billionaires who say theyve been defrauded. Its tripping the art world coming up next. Welcome back to power lunch. We want to draw your attention to the market. We are taking a look at the markets. The s p down 21 points or 21 . The dow is down 1. 25 . We are trying to bounce off of session lows. Theyre opening lower in the last few minutes here. Also call your attention to shares of Investment Technology group, itg. A broker rage firm on wall street. Its spiking up 9 on the day. Is it may be of some interest to our wall street viewers. Itg operates something called a crossing network. Its a platform called posit. They cross their buy and sell orders in the stock market sara. Interesting. A 10 pop for that stock. Thanks, dom. It is the ultra rich scamming the ultra rich. Robert frank has the details on that story. Hey, robert. Hey sarah. This is likely the biggest art scandal of the year and could involve billionaire art collectors. Yves bouvier was arrested last month in monaco. The authorities are not saying much but the case involves art sold by bouvier to Dmitry Dmitry ribiliev. What he didnt know is that the Hedge Fund Billionaire sold the piece to bouvier got it for 93 million. So he made 20 million despite sales documents that showed a much smaller fee. This could go much further than beyond bouvier and ryboulivier. Rich collectors store hundreds of billions of dollars of art here. There is no custom tax for art going into these things no sales tax for art sold there. Bouvier has become a major dealer buying and selling arts. Theyre looking into Money Laundering and tax fraud. His office declining comment. In an interview in january hes solving a market need. Clengtors have a problem. They buy too much and they have more space at home for one but they buy ten. Problem wed all like to have tyler. These are like duty free vaults, right, robert . For hundreds of billions of dollars worth of art thats stored there and its all secret. No one knows whats inside. Fascinating stuff. Thank you. Bond market where there are hundreds and billions and trillions and gazillions at stake. Rick santelli is at the cme. Theyre all on balance sheets. Theyre not doing their hard lifting in the economy. Thats part of the problem. Two day chart of pims. If you think that between, what tuesday, wednesday, thursday, today, if you look at all the settlements, even though were not settled unchanged at 210, all of those settling closes have been between a yield of 2. 11 and 2. 13. Think about that. You can see an upward drift there. We had the big drop when they started qe where you had your settlement finally under 20 bases points. Theyve been in a tight range. It was the preparation leading up to it that seemed to garner the most activity. Now it seems to be relegated to some of the other sovereigns like italy, spain, some extend portugal. If we look at a two day of the euros, love two day charts. Yesterdays low brought in an entourage of selling. Down here they have a motto. Markets are going down aggressively making historic passes. Hit a bid, get a check. Theyre a bit trapped. It is friday. You want to watch that market towards the end of the day. My favorite chart continues to be comparing the euro versus dollar against the s p. This chart happens to be for two months. The white line is the euro. You can clearly see its leading. We all know why. This is a Foreign Exchange trade at the end of it. The Interest Rate differential is along for the ride. Tyler, back to you. Rick thank you very much. Down 20,000 by the end of this year. That is a bullish call. The stocks he thinks will get us there when power lunch returns in two minutes. But a red letter day today. 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 . Anyone have occasional constipation diarrhea, gas, bloating . Yes one Phillips Colon Health probiotic cap each day helps defend against these occasional digestive issues. With 3 types of good bacteria. Live the regular life. Phillips im carrera. Heres your cnbc update. China delays draft to Counter Terrorism law. President obama had raised concerns about that law directly with chinas president. A bankruptcy judge has denied the sale of atlantic citys former revel casino to a florida developer. The price tag was at 82 million. The judge said that she lacks jurisdiction to approve the purchase by glen stars polo north county country club. Microsoft working on an advanced version of its competitor to apple siri. A new version of its personal assistant, cortana, will be available with the arrival of windows 10 this fall. Later it will be available as a stand alone app used on phones powered by apples ios and googles android systems. New photographs of a Pacific Island off of tonga. The island is one mile long and as you can see, its kind of cone shaped. Thats the cnbc news update for this hour. Ty, maybe we need to take a field trip. We are going to build some condos there soon thats what were going to do. Condos there. All right. We talked to scott wapner from the fast money Halftime Report about his interview with the founder of Lumber Liquidators. That stock has taken another leg down. It is now trading lower by 12 off 4. 28 at 31. 80. Well have more on that story a little later on this program. Meanwhile, gold prices are closing right now. There you see they are up just a little bit. About. 8 of a dollar at 1152. 70. Courtney reagan at the nymex. Gold prices inactive at the settle. We saw Early Movement a leg higher but then it faded there into the settle. Gold closing marginally higher. I was just talking with a trader. He said, look when you see the prices begin to fall, theres a certain population that comes in and scoops up the physical gold. When that happens, the short sellers have to get in there and cover their positions. Watching that 1130 level trying to puncture havent been able to, which is a bits surprising with all of the action were getting from the dollar. The dollar is still guiding the long term gold trade. Regardless of Little Movement its really what theyre watching here. If you look at the rest of the metal complex, slightly higher for most of those metals there but still not a lot of movement. It looks quite like a friday here in the gold pit. Sarah, back to you. All right. Thanks very much courtney. The dollar is guiding everything right now. Lets check on stocks at the moment. The dow down about 240. At the low we were down 265. Still sharp declines. Nearly 1 moves. Down 1 for the nasdaq and s p 500. Lets get back to todays trading action. Bob ka san any here on the floor and bertha combs following it at the nasdaq. Bob, took a leg lower. Get a sense of how whacky things are with the dollar smacking around the european and the markets. Take a look at the s p 500. Saras right. Its taking another leg down youre weak again. Look at germany because basically youre going to see the exact opposite situation as the market strengthens the markets there strengthen as the euro weakens. You buy europe and sell the u. S. When the euro weakens. Now let me just show you one big currency trade. Let me show you how this is playing havoc with the world markets. The s p is down 1 germany up 3 italy up 1. 5 and japan which has a qe program, up 1. 5 . You see my point. Qe type programs are messing around with Global Stock Markets its pretty obvious right now. Meantime weve got another player. Oil was kind of moving sideways for a while. Everybody ignored it. Its back again. Were down near the january lows with oil, not far. You can see what its doing with the enb names. When you get low oil, sometimes it makes refining a much better business. Heres one of the only bright spots there, the refiners are on the up side. Finally, sara not everything is being smacked around necessarily by the dollar. Biotech is a little bit insulated from all of this. Here you can see modest moves in the biotech, xbi. Were right near historic highs in that particular area. Whats ironic is that our economy is performing better than everyone in the world and our stock market is not. Because its about qe. This is how you get distortions. Over to you bertha at the nasdaq, which was the one major index that was in the positive still for 2015 right . Still for 2015 and, actually it had been the fourth week. Its not now. Were seeing more or less the same movement here in terms of small cap and big caps today. The nasdaq 100 down 1 . The russell 2000 down 1 . Apple the big deline. On pace for the Third Straight week. What had been holding up is the chip stocks. Philadelphia semiconductor had been positive. Fractionally though. Part of the reason is nsp. The stock at a fresh alltime high as needham resumes coverage of the stock. Overall weve seen the chips come up. The other thing very interesting this week is a week that small caps did better. The nasdaq composite much stronger than the nasdaq big caps because the small caps are doing better and the small caps are now actually outperforming year to date and part of the reason why as bob mentioned are biotechs. Biotechs are up 13 year to date and some of those small cap biotech names and health care names are really whats propelling the small caps many of them up double digits year to date and big leaders today. Sara . Ill pick it up there, bertha. It has been a wild week for the volatility index up 7 . You can see the ups and down. Dominic chu tackling battleground sectors. Before we told you about the financials being the best sector month to date and energy being the worst. Two themes well see develop even more. Heres another battle with out performers and under performers. S p, year to date down. It is weaker but not a panic. 1 of a down side. If you look at some sectors, we told you about financials and energy. Take a look at some of these other ones. Namely whats happening with the s p 500 versus the Health Care Stocks like bert p bertha and bob mentioned. This is a divergence as well for these particular sectors. Now health care is outperforming helped along by larger cap biotechnology and also drug names. Bristolmyers squibb we can show you right here has been a real outperformers, up 9 . Thats this month to date alone in march. You can see scanacorp, its a South Carolina based electricity producer. Down 8 . A huge divergence here. With regard to utility and Telecom Stocks even Real Estate Investment trusts all of these yield place, dividend type stocks will be a huge focus in this coming week as the fed gets ready to announce the rate decisions and we can talk about whether theyre going to take one word outpatient, patience Something Like that. Leave it in. We dont know. All of these rate stocks are going to be sensitive as we talk about whats happening with Interest Rates to the fed. Sara, back to you. Here with more on todays big drop and where you should be putting your money amid all of this vol la timt, steve with vicars Asset Management and matrix assets management. The dow 20 k call is bold to begin with. The third down week for the dow. Another 200 plus point selloff. Still going to get there . I think it will. In fact, im kind of pleased to be on a day like this when the market is actually down. Its a little bit easier to talk about the up side. I think at these levels the market is oversold. The correction 3. 5 from march 2nd to where we are now. Pretty garden variety call back. This market cycle has been playing the corrections down dirty, ugly but also short lived. I think that will be the case in this particular downturn here. Jordan, do you agree with that premise that we need some type of healthy, i guess is what gene is describing correction to make another leg higher new record highs on the major stock indices. We do see a lot of volatility as we did towards last year. Last year there were five down market moves in 3. 5 to 4 . The market recovered and had a pretty good year. We expect there will be volatility again this year. We would use the down side volatility to pick your spot and names that you like that are now going for sale. We expect that the market by the end of the year will be up in the high digits. Gene, where exactly do you like in this market. Talk to me about sectors with the overseas exposure becoming an issue, oil back down to january lows hurting the energy stocks. Which is a safe spot for you . Well i dont think energy is at play here unless youre looking long term. The risk with energy is youll see other sectors do much better. I think the leadership is pretty well established between now and the end of the cycle. Technology, health care the industrial especially aerospace and defense, consumer discretionary, Consumer Staples and the food stocks look very interesting as well. So whats so impressive about this market it has been through much of the cycle, its so broadly diversified that the sectors that are doing well range from the most traditional cyclicals to the most defensive growth categories. I dont think this is the kind of market characteristic that you would see in the top. Jordan you disagree. You like energy here . We do like all the eke none mickically sensitive sectors. That would include energy. Plus we think the stocks are really adjusted pretty significantly. We do think that the companies that are wellpositioned in terms of their resources and are very well capitalized over time will do quite well. Maybe not necessarily this week or month, but certainly over the course of the year and into 2016. We also like the Cyclical Companies and we do like a number of the financials like american express. Neither of you have mentioned the Federal Reserve. Neither of you have mentioned the euro. Gene, would you say this is just noise or could the bears be right, that this fundamentally changes the picture and the attractiveness of u. S. Stocks especially looking relative to other places which are in full stimulus mode . All in all i think the market has coped pretty well with the rising dollar. I think the key here though is that the fed has this policy of transparency. So its unlikely that the markets going to be broad sided by a monetary event. The fed chairperson janet yellen has made clear that shes going to give ample warning before the fed does actually raise rates. Now that chatters been around. I think its kind of baked into the market. I think youre seeing that reaction kind of move like we saw, you know last year several times. And these corrections tend to act as spring boards for higher levels because liquidity is still a factor. Now earnings and very good revenues here now are really driving this market for the long haul higher in my opinion. Jordan in the notes, you mentioned utilities and staples. Interesting in light of what dom reported. The rate plays, theyve been super hot over the last year. Is this the beginning of the end heading into next weeks fed meeting of the boom in utilities and Consumer Staples which arent growing but do pay high dividends . We are attracted to dividends. Thats a consistent payment. And the issue around the utilities, you know has been adjusted somewhat by the stock price reaction over the course of the last couple of weeks, really. So we are not as bearish on utilities as we have been. Theres no growth in those businesses so why necessarily would you stick with them in a meaningful way unless youre an income investor. We Like Companies that are paying meaningful dividends but have a fair amount of growth behind them as well. Or if you think that treasury yields are going to stay very low. Gentlemen, thanks very much for your thoughts. Jordan and gene as we see the dow down 227. Be sure to go to powerlunch. Cnbc. Com now to see the key things jordan and gene are watching in the markets. Tyler. All right, sara. If you have those wood laminate floors, are they safe . How can you test them . How much does it cost . Whom do you call . Weve got answers next on power lunch. At ally bank no branches equals great rates. Its a fact. Kind of like mute buttons equal danger. That sound good . Not being on this phone call sounds good. Its not muted. Was that you jason . It was geoffrey it was jason. It couldve been brenda. Lumber liquidator stocks are down. The Company Chairman tom sullivan defended his products earlier on fast money Halftime Report. From day one weve always taken care of our customers, given a good product at a good price. We dont skimp on the product and our laminate is safe. Its were definitely not going to save 2 or 3 cents on laminate and ruin the reputation of the company. So are the floors safe . These laminate products imported from china. Joining us is will spates president of indoor Environmental Technologies whos seeing a surge in requests for formaldehyde testing. Mr. Spates welcome. Good to have you with us. You have done several tests on this laminant flooring and what did you find and what exactly did you test . Did you go into customers homes and test the air quality or what . I went in customers homes and checked the air quality. I cannot speak specifically that the flooring was the source. In the homes that i responded to last week, we found elevated levels of formaldehyde. It wasnt extremely elevated, but its unusual for every home that i test to have a positive spike for formaldehyde. How many homes did you test and you who elevated were those readings . I tested four homes last week and one home this week and the levels typically when we do formaldehyde testing, i would say one out of five homes that i test might have slightly elevated levels. These homes had slightly to moderately elevated levels of formaldehyde from the. 03 to. 05 parts per million using the draper sampling method and that is for me an indication that we need to create air exchange and dilute the indoor environment and try to get that pollutant out of there. Without wadeing in greatly into the science that you do a baseline reasonable reading would have been. 03 and you were finding them from. 03 to. 05, am i understanding that correctly . That is correct. Usually my baseline is that i find no formaldehyde in a home. Like i said only 20 of the homes that i test using this method id say would, you know indicate a positive response. How much does it cost to get to have a guy like you come out and sample the air in my home . And if i wanted to ship up a piece of the flooring drk i i assume all of these floors were lumber liquidator floors, yes . Yes, they were. They were the saint james brand. How much does it cost to have a guy like you test my house . It depends where you live. Like a local, within an hour drive, youre looking at about 400 for the site visit and 75 for sample location. If i wanted to hand you a piece of the board which you actually i think you have a sample and do a different kind of test in a more confined environment, how much would that zmost has anybody asked to you do that . The cost is were estimating about 350 with our, you know fed ex charges and sample interpretation. But to date none of the clients have asked me to do that. Very interesting. And i want to get through some stuff real quickly here mr. Spates. Would you let your children sleep in or on these wood floors . No. You would not. So you would not recommend not with not with what ive heard. Im sorry. Not with what youve heard. So you would regard this product as potentially unsafe my words, not yours, but not ones that you would want to trust your family to use. The gentleman, mr. Sullivan whos the founder of the company, drew a distinction in his mind from the tests he says cbs used which cbs said was, quote, a real world test and he said, no it was not a real world test. What cbs did, which our scott combs says the California Environmental air quality board does, is basically to disassemble the boards and test them that way. Is that a real world test . What does he mean when he says a real world test . I im not sure what he means by a real world test but an emissions test is exactly what you just described. They disassemble the board, they put it in a chamber for a prescribed period of time. They follow an established sampling meth today. There are Large Chambers and there are Small Chambers. I believe the test for the carb 2 compliance is astm 1333 which is a Large Chamber test but there are other relevant chamber tests for smaller chambers. Theres a lot more Small Chamber labs out there than there are large. Youve helped me and i think our audience tremendously here understand this. My guess here is that this only gets resolved mr. Spates once the state of california runs more tests and we learn the results of them and whether they are, in fact compliant as mr. Sullivan, the Company Founder says or not compliant with levels five six, seven times the state standard as cbs alleges, right . I would agree with you completely. Mr. Spates, thank you very much. Very fascinating story. We should point out Lumber Liquidators, the shares now down at session lows. Mr. Spates thank you very much. Lets go to dom chu for market flash. Tyler, look at valeant pharmaceuticals. This is on the heels of a report that theyre working with shareholders in order to possibly raise its bid to buy salix pharmaceuticals. Thats according to people. It could be 1a purchase. Earlier today bill ackman was on squawk box and said paying more than 170 a share for salix might be a mistake. Back to you, sara. Thank you, dom. Were going to head to a quick break with the dow down more than 200 points power lunch is back in just a minute. 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. Here are this hours power points. The price of crude oil plunging after an International Energy agency said u. S. Oil production rose 115,000 barrels a day in february. Swiss art dealer yves buovier was arrested into art fraud. He inflated the price of a painting allegedly by as much as 20 million. And the European Central bank starting its stimulus program. Also the federal reserf getve getting ready to raise its rates. Get used to it tyler. Sara stocks really taking it on the chin. The dow off 232, the nasdaq down 41. S p off 20 and russell down 8. 75. Utx, ibm and cisco leading the way there. Power comes back in two. Im only in my 60s. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i looked at my options. Then i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. Call now and find out about an aarp Medicare Supplement insurance plan, insured by unitedhealthcare Insurance Company. Like all standardized Medicare Supplement insurance plans it helps pick up some of what medicare doesnt pay. And could save you in outofpocket medical costs. To me, relationships matter. Ive been with my doctor for 12 years. Now i know ill be able to stick with him. 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I have a lifetime of experience. So i know how important that is. Another tough week for the bulls on wall street with the dow now down about 230 points. The focus, obviously, of the session is the euro down again more than 4 tyler, for the week. Its unusual but it could be just getting started. I believe i said sara on wednesday that i thought the market would be kind of direction less until the fed meeting next week. It may be direction less up one day and down 200 the next. It sure hasnt been boring. We will wait to see what happens next week when the fed meets and whether they remain patient. Sara great to be with you for this hour of power. Thats the first hour. Brian takes us through hour two. Thank you sara. Lets jump right in everybody. Everything is on the move in a big way. You have the dow down 227 points right now. Thats 1. 3 . Sara has been all over the dollar. The dollar surely closing in on parity. 1 1. 0488. This is the second fastest move. The dollar index at 100. It is up 3 4 of 1 . It is at its high for the year. So much for the oil recovery folks. Oil prices down to 45. 13. That is a more than 4 drop for crude oil. The number i want you to Pay Attention to 44. 45. That is the low for the year. That is what was hit on january 28th. Weve got about, i dont know 28 minutes left of the nymex trading session. Were going to watch oil and that number. Melissa lee joining us from the nasdaq. You have a big hour at fast money at 355 00. We have a big hour. We are selling here at the nasdaq. It is the best performer of the major three indices. The nasdaq is down by. 9 . Mylan labs pulling back. Vmpelcom and mattel rounding out the big losers. Apple down a little bit more than 1 . Amazon netflix and intel continuing the slide from yesterday. Take a look at what is helping to offset this brian. This is one of the reasons why these are three of the reasons why the nasdaq is doing the better of the three major indices. Microsoft into positive territory. Up by 1 4 . February lows for microsoft as it trades at 41. 13. Take a look at oracle ahead of earnings. Oracle is surging 1. 1 3 . Nxp on the Semiconductor Name as well as bank of america. Both positive on nxp. A 53 high up a whopping 5 . Helping the Semiconductor Index stay in the green at least at this point. Lets get to bob pisani who is tracking the action at the New York Stock Exchange. Its all about the euro. Now late in the week even about oil. Ill show you what the euro has been doing. New lows versus the dollar. 1 30 eastern time predictably the stock market was down. The s p 500 and what you see here if you look at the s p is a remarkably similar chart actually. Moving down the lows as we hit the lows in the euro and bouncing off of that. Germany, sort of the opposite situation, of course germany a big exporter that would benefit from the weak euro. If we moved it out into the futures area. You can see exactly the opposite situation. Look at the major Global Markets for the week. You can see that this patterns been continuing as weve seen a lot of countries engage in qe programs and try to weaken their currencies. Theres the s p down this week. Germanys at a historic high. Big exporter. Weak euro. Japan is doing its own qe. Thats up 1. 5 . Crude briefly broke through 45 an hour ago. Crudes been quiet the last few weeks. Now suddenly its back on everybodys radar. Here you see the big e and p companies, denbury, apache. When you get the oil moving down it helps refiners. There you see one of the few bright spots that were seeing. Brian and melissa, back to you. Oil is ready to do it again, 45. 05. Now lets get to a man jab beers with breaking news. Jack lu has issued a new letter. John boehner just out in the past couple of minutes here. In this letter treasury secretary lu says as of monday the United States will have hit its statutory debt limit. Thats when they have to begin what are known as the extraordinary measures to keep the United States from powering through that debt limit. Obviously were waiting on congress to pass some kind of a debt deal later this year. In the meantime treasury has to juggle some things including treasury secretary jack lu says on monday hes going to declare a debt issuance suspension period with respect to the Civil Service retirement and Disability Fund and suggestion spend the dalily reinvestment and the federal employees Retirement Savings plan. Those are the extraordinary measures at least at the beginning. Weve seen this in the debt cliff deals in the past where they have to go as long as they can to keep the treasury afloat. Eventually congress has to do something. This falls into a gallup poll. Whats the number one biggest problem in the United States right now . The economy and government were sort of neck in neck for a long time. The economys gotten better. It was government. The American People naming the federal government as the number one problem facing this nation right now. Can you believe that . This kind of stuff, this almost quarterly or annual letter the same thing over and over again. Yeah, i can believe it. The American People have seen the government lurching from crisis to crisis a lot of them totally selfmade here. Washington digs itself into this hole and then comes up with some way of getting out of it at the 11th hour the 12th hour in some cases as weve seen in the 13th hour after the deadline was passed. This looks like we could head into one of these big show downs here. Its the definition of insanity. Ing doing the same thing over and over and over again. Keeps things interested in washington. Job creator for journalists. Thank you very much. A big drop for oil today as we noted. Were getting back to the close of the lows of the year. Courtney reagan is at the nymex. Exactly, brian. Barely holding above it. We broke below 45 an hour ago. We have 25 minutes until the sell. Looks like we might be able to do it again. A number of traders hoping for some bullish signs, give them a reason to buy and push this higher. They cant find any. Whether its fund amountal technical, everything is pointing towards lower crude prices. International Energy Agency saying the supply glut continues to defy expectations. It came out again about a couple of hours ago. Were at a fouryear low. There are really no reasons to see why crude oil prices would move higher. If anything were probably testing that low. Well let you know what happens in about 24 minutes or so when we have that settle into the weekend be. Brian, back to you. Courtney, thank you very much. Well see you in a bit. Meantime, oils drop continuing to impact the number of new drilling risk operated. As courtney said we are following that number closely. 56 oil rigs were pulled last week. Rigs are what they put up to drill the well. Its only for future production and new wells. Current wells still pumping out the most oil per week ever in america. Just under 9. 4 billion barrels. Thank you, kate if youre out there. Sending us an email attaching it to an opec bulletin that effectively blames the United States for the Oil Market Problems because of fracking. Im summarizing. I glanced at it momentarily when courtney was talking. Opec is blaming the United States for the oil problems. Thats rich. Lets get back to the stock market if we can and bring in randy frederick, director of trading and derivatives with charles schwab. Welcome to power lunch. You have the fed meeting next week. Oil is down. Thats supposed to be good for us because we have more money in our pockets. The dollars steep move. What are you ascribing as the one or one or two reasons why the dollar has been weak. In a general sense youre right. When oil prices are down broadly, it is good. Heres what we know. Some of the data tells us that all of the money people save at the pump is not going out into the economy. Some is going to pay down personal debt some of it is going into personal savings. So we see a little bit of an impact. We also have concerns about the dollar going up. When the dollar continues to go up at the rate that its going up its no wonder the Oil Prices Keep dropping. When you add that to the supply glut its going to be very difficult for that to change. Those are causing all sorts of problems in the market. When you add to that the things that are going on at the fed, when is the next Interest Rate or when is the first Interest Rate going to happen, first Interest Rate rise you have the battle of influences of different data. I think traders dont know which way to move on this. This is the kind of stuff, randy, that drives a lot of the more passive investors absolutely nuts. The reason the fed may raise rates is that things are getting better. Were starting to see wage inflation, right . The job market is healthier. More money in peoples pockets. A lot of good news. The jobs number was good. We have weak data this week. Everyone knows the economy is getting better. Now were worried about the Federal Reserve. Shouldnt we look at why they may raise rates versus the potential impact of the rate rise . Yeah, in fact if you look at what happened to the market, friday when we got the strong jobs report the market rallied, and thats the reason. People know that the economy is better. At the same time higher Interest Rates have the potential to create a Market Correction. We havent had a Market Correction for over 40 months which is way beyond the longterm average of every 18 months. That puts the market at close to record highs with all sorts of down side potential if an Interest Rate rise does come. So people are concerned. And, again, as the dollar rises its putting the hurt on companies that export the tech sectors become a bit of a concern now for some people and at the same time we know that theres already all sorts of stress in the Energy Sector. Announced layoffs, cuts all those sorts of things. When the economy for the economy to do well you cant have two major parts of the economy, the exporters and Energy Sector struggle being. Thats what were worried about. Randy i want to hone into this, brian, you and i have been debating this for a long time the impact of the stronger dollar. Randy, since the last fed meeting dollar euro is up 6 not including todays move. While the s p 500 is basically flat. Just yesterday barclays pointing out, hewlettpackard is having a currency impact. Intel felt currency impacts. Do you think the markets are faster in the fact that perhaps estimates must come down at least for the First Quarter because the dollar euro and also dollar brazilian royale . The euro and the yen and the royale im not sure about that. Youre right. If you look at what happened to the dollar during the month of february when the market was doing well when vol r volatility came down it was moving sideways. We have a huge spike in the dollar versus other currencies. Its no wonder that it puts stress on the markets. We need to see the doll lor cam back down. How do you do that when you have massive qe programs going on in europe. You have qe programs in japan. You have other countries cutting rates. It makes it difficult. Really in some sense we have to let the dollar appreciate. Its how were going to get the rest of the world economies on track. We dont have to worry about the u. S. Staying decoupled. Well all be together. In the short term it will be difficult. Randy, thanks so much. Randy frederick with charles schwab. We keep hearing reports of millenianss ianian yals deciding to live in cities. Diana olick joins us with the story. Reporter melissa they may want to buy. The question now is can they. Sky high rents that just keep rising are pushing more young people to the tipping point. As you said about 5. 2 million or more than 12 of current renters in the nations 20 largest markets say they plan to buy a home in the next year. Thats according to a new zf illo survey. Thats a 25 jump. Also nearly 60 of renters now say they think a home is the best longterm investment that a person can make. And thats up from 57 a year ago. With younger renters driving that sentiment. Trouble is theyre phasing rising home prices and extremely tight supply. Kathryn luther is a Real Estate Agent in the boston area. She told me at a saturday open house two weeks ago on one of her listings there was so much buyer traffic that it blocked the street. Neighbors had to call the cops and they had to shut down. So they hired an off duty officer to direct traffic for the sunday open house. He then counted over 150 cars that next day. The house went under contract immediately with a dozen offers. In 31 years shes never seen anything like it. They are just desperate for new listings melissa. What a stunning change. Diana, thank you for that. Robert wheaton hall is a managing partner covering home buyers. Great to see you. Glad to be here. A lot of Home Builders have been pointing to the household formation chart which is stunning. Walk us through that. At the same time did we anticipate this . The Home Building November Seattle is up 16 since october. What we say about this is were excited by what were seeing. Were poised to have the first real spring selling season in over five years. Demand is picking up. This is a result of a much healthier labor market. Its a huge tail wind for stocks like dr horton menard. Walk us through the household formation chart because thats getting a lot of buzz. What are you seeing and why do you think that will need to gain further for new homes as opposed to existing homes . So what were starting to see is people are getting really good quality jobs and theyre making a decision to settle down and ship from being a renter in a multifamily environment to homeownership. We have a constructive take. We think household formation is going to accelerate in the near term which is a great setup on the demand side for the housing market. In terms of who is forming these households im guess that go it will be the lower end. The lower end, more entrylevel home builder would benefit . Thats right. Melissa, thats absolutely correct. Were expecting to see the entry of the firsttime home buyer back into the market as a result of the healthier labor market. Thats actually driving the strength that were starting to see in household formation. This is going to accelerate. We think from a demand perspective its a very important positive for the housing recovery. Fueling a lower end area bob, will benefit the most . Were very confident that d. R. Hortons exceptionally well positioned to benefit from the entry home buyer. We also think menard does an excellent job with the entry level buyer. Bob, great to speak with you. Thank you. Thanks again, appreciate. Were going to talk more about biotechs and the surprising cities that might benefit from it. Why disney is at an all time high and congestion on the rails. The dow is down. Crude oil at 45 points and were back at this. Conjunction, junction whats your function . Hooking up words, phrases, clauses [ male announcer ] legalzoom has helped start over 1 million businesses. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. My name is tony sartorio. Im a lineman for pg e out of the Concord Service center. I have lived here pretty much my whole life. I have been married for twelve years. I have 3 kids. I love living here and i love working in my hometown. At pg e we are always working to upgrade reliability to meet the demands of the customers. Im there to do the safest job possible not only for them, but everybody, myself included that lives in the community. Im very proud to do the work that i do and say that i am a lineman for pg e because its my hometown. Its a rewarding feeling. Before we get to our next guest, take a look at power city indexes. 30 city metro market stock indexes composed of the biggest markets in the area 11 or 12 stocks. This city has come a long way since being discovered by the germans in 1904. Were talking about san diego. Our top power city index performer over the last three months. The average return is based there nearly 20 . Falling closely behind other warm cities phoenix. Average return, 15 . That excludes the pet smart deal and Austin San Antonio with 14 . Over that same time period some of the hottest stocks in san diego. Up nearly 100 . Neurocrin up 89 . R se s resmed up 26 . Theyre all biotechs. Four names are up more than 15 in the past month. Intersept pharma inside pharma. First off before we get to some of the highlights of the pick is there any biotech bubble out there . You see it on banners and graphics. Is it there or are these returns really deserved . Its a great question and i think theres no doubt that were in the midst of a biotech boom. The question is whether were in the midst of a biotech bubble. Its tough to answer. There are a lot of things going right in the sector which the bulls can use to justify a valuation. First you have scientific progress. Really at an alltime high going back you know 20 years. The fda, which is the main regulatory body in the United States, is working with companies to get drugs approved faster rather than city setting up roadblocks and delaying the arrival of new drugs. Its just been a confluence of these sort of factors which has really cautioned this sector to explode over the last two, two and a half years. One of your techs a little too small to talk about. I want to focus on two that are big enough to get into here. First off mnk, malancrote. One of the hardest names to talk about. Sure, mallinckrodt has been on a run. Theyve built a high growth branded drug platform that we think compliments very nicely to their more stable defensive legacy specialty Pharma Business which has been recently surprising investors on the up side. Theres a scarcity value in Specialty Pharmaceuticals for, you know lower midcap type emerging rollup stories to compete with the tension from bigger names like valliant and akiva. They gain eyeballs from investors including generalists. See what i mean about being hard to pronounce. I mucked it up. Iptp. Intercept pharma. Its a biotech name. Its a late stage blockbuster drug opportunities which we think isnt priced in the stratosphere and still has room for up side on a number of near term catalysts. They cracked a very tough problem in medicine which is liver damage from obesity and poor diet. This is becoming a massive epidemic in this country. Intercept recently received break through designation from fda which as they get ready to start late stage trials validates the companys late stage trials and the fda appears to be cooperating with their a zbloech have a great weekend. Take care. Melissa. If youre sick of this song we have bad news for you. Disney is coming out with frozen 2. Thats part of the disney juggernaut thats sent the stock soaring. And youre all over the state market selloff. Take a look at how the s p 500 are selling right now. Take a look. At ally bank no branches equals great rates. Its a fact. Kind of like shopping hungry equals overshopping. 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Its not muted. Was that you jason . It was geoffrey it was jason. It couldve been brenda. Welcome back to power lunch. We want to give you a check on whats happening. Reset the markets as we head towards the last hour of trading. The s p 500 about 90 of the stocks are in the red. Negative on the session. Just around 50 of them you can see on the top row. Biotech and Technology Stocks are helping to lead the way higher. If you take a look at the sector heat mecca, as we see things develop, Health Care Stocks and Telecom Stocks the relative outperformers down only about a half to 3 4 of a percent. Industrial more cyclical or economically more specific sectors. Down 1 2 . Interesting moves. We are near session lows. Bribe, back to you. Dom, thank you very much. Coming up on street talk a big name stock that one analyst says you should sell plus a small cap. Analysts have 50 upside. We are counting down to the oil trading. Well find out in a couple minutes time. We are back after this. 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For a free 30tablet trial go to cialis. Com opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. 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 carrera. Heres the cnbc news update at this hour. A new biography reveals that tim cook offered steve jobs part of his liver when he heard he was diagnosed with cancer but the late jobs refused. The book becoming steve jobs said cook took a blood test. It two men it turned out had the same rare blood type. Lumber liquidator shares plummeting after they cut their price target saying the defense of his product left some questions unanswered. Company found jerp tom sullivan said, quote, our lamb my nantz are safe. We dont skimp on our products. End quote. The Senate Banking committee is zeerg in on the new York Federal Bank meeting. Richard shelby discussed the structure of the new york fed with fed chief janet yellen earlier this week. L. L. Bean getting ready for a major retail push that includes their first stores on the west coast. They wont be megastores along the lines of cabelas. Theyll be aiming at Smaller Stores around 15,000 square feet. Thats the cnbc news update. Back to you, brian. Get the duck boots. The duck boots. They need those in santa monica, too, sue. Courtney reagan smiling. Youre pitching the trip. I did the bean boots story. Theyre actually probably still back ordered. It was the most popular christmas gift. I digress. Im standing in the oil pit. Its closing a hair below the 45 level. Off the lows. Goodness, who knows whats going to happen from here. We have the levels that are quite a bit away from where we are. There arent a whole lot of reasons to be bullish if youre looking at the oil trades. The strength of the dollar is one thing that cannot be denied. Despite what happens day to day, overall the stronger that dollar gets, the more pressure it puts on the price of oil. Yes, we have lower rig counts according to baker hughes. It doesnt matter. We didnt see any support when that new data came out. We have the supply glut that the International Energy agency says its something that continues to defy expectations. So, too, does the price. I cant believe im looking at below 45. 44. 45 is the low for the year. January 28th. We have to close out the orders here. Courtney reagan thank you very much. 44. 93 melissa. Oil getting cheaper. It is. Disney stock taking a pull back after hitting an alltime high yesterday. The stock is up 32 in the past 52 week. Julia is live in l. A. Yesterdays move that sent shares to the all time high epitomizes what disney is doing right. Diz any announcing a frozen sequel. These are not just movies theyre valuable intellectual property. Part of bob igers strategy to build or exploit across the movie, tv Consumer Products Digital Properties and parks. The stock has tripled since he took over as ceo ten years ago today. Well see his strategy as cinderella and frozen short is expected to gross 60 million. Its going to match ma live if i sentencesse malificence. Cinderella cost half as much to produce. Its packed with 11 marvel films coming and two pixar films this year alone. Expectations are high for shanghai disney. Its scheduled to open next year. But either does face the challenges of shifting Consumer Habits and the risk of core cutting. Iger is trying to mitigate the risk. Theyre offering espn in sling tvs over the top streaming service. Iger says hes careful not to eat into disneys core business including the tv bundle while preparing for the future. We have been eagerly preparing for the street stock segment. First up carrizo oil. Up against a buy from an overweight. I thought overweight because buy. You can see its not helping the stock today. Not too much is emerging unscathed. The refiners thats where the strength is. Carrizo up 2. 5 . Sandler is cutting estimates maintaining the sell rating on the name. It cites depreciation of the euro and the brazilian royale. That will take 10 out of annual eps. Youre going to say, gas spending is down. Gas spending is down 25 year on year. Youre going to say to me brian, because i know youre a very sharp mind the price of gas is down its lower. Its not trickling into other spending because overall spending is down. I appreciate the compliments. Ive been saying this. I didnt think it was going to trickle out. Everyone said youre nuts. No offense to any of our colleagues. Youre saying its a giant tax break, it is. The visa rep said they were saving up for something else. Thank you. Redwood trust. Under the radar name of the game. 1. 5 million cap. Kbw up against and will outperform where a market performs. Their target melissa, 21, 15 higher where the stock is. The yield is so high because the share price has gone down a lot. As a repeat it is down 14 over the past 12 months. Compare that to the dow jones read index up 14 . Its a real laggard. Diageo cutting it. The analysts took a look at the drivers and growth in 2008. That includes north america, scotch, then african beers each facing structural challenges which will impair the groups profit growths. Ive been doing my part to help diageos profit growth. I can assure you that. We always talk about American Companies selling overseas. Diageo really a european company. We dont talk much about the potential benefits of them selling here. Whats the currency translation going the other way . I guess it depends where they make the liquor. Well have to go find out. Finally, our under the radar name of the day. We were going to bring it to you yesterday. Didnt have time. It is renttrak. Recent set backs aside, Good Opportunity for longterm value creation. This is why i plucked it out. Green capital thinks that rentrak could replace nielsen as the primary rater of tv viewership. A lot of people saying nielsen ratings drop these days. We should mention rentrak tracks movies at the box office. They could see business from that. Brian we have a bonus stock today. This is an update on ing. That was the under the radar stock on wednesday. Leering suspended yesterday. They announced its postponing q4. Management found certain accounting issues. They say the investigation may not involve sales but, all, you know what time to step away. Accounting issues never good. The timing is tough for the analysts. Yesterday the analysts not backing down. The analysts trying to stick by their guns. There you go. Six stocks today, bonus on friday. Coming up if you think the new jersey turnpike is bad, wait until you hear about whats happening on the rails and why Morgan Brennan is wearing a safety vest. Hey, brian. Check out this train. The cars on this train are in the process of getting punked. Thats a real term in the railroad industry. Im going to tell you more about it when power lunch returns. Il. Detect hidden threats. See the whole picture. Process critical information and put it in the hands of our defenders. Reaching constantly evolving threats before they reach us. Thats the value of performance. Northrop grumman. Anything worth pursuing requires knowledge, hard work and a plan. At baird, we approach your Wealth Management strategy the same way to create a Financial Plan built to last from generation to generation. Well listen. Well talk. Well plan. Baird. Do y ou like to travel . Im all about free travel babe. Thats what i do. [ 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. All right. Here you go. The Dow Jones Industrial average having a tough day. Down 239 to 17655. The nasdaq s p and russell 2000 are down as well. Oil is around 45 bucks a barrel. It has had a terrible week. Down about 9 . Lets bring in bob pisani on what is moving the market. My question is this being down at the New York Stock Exchange how much are people talking about the other exchange, the nymex. Is oil a big topic of discussion down there every day . Oh, yeah. Oil is weighing on the dow a little bit more. Its down a little bit more. Its basically oil went away until today when we started dropping below that little band its been in. When you got to 45 look where oil closed just above. A few cents above the january lows. Take a look at the s p. Brian is right. Oil has returned today as an issue and people have been ignoring it for a little while. If you look at the texas s p, its still a bigger factor overall this week has been the dollar. Look at the euro dollar relationship. As the euro weakens, very similar chart. Bottomed around 130 with the euro so our stock market also bottomed at that time. If you look at the sectors for today, industrials, materials, Energy Financial all down 1 . Fairly unusual to have a large swath down more than 1 . Crude settling near the lows. Energy has been an issue all throughout the day. The ent names all down. Refiners also weakened. Emerging markets are really getting killed. The eem down again this week if you look there. The only healthy emerging market right now, guys is india. Thats about it. Virtually everywhere else anywhere you look new lows back to you. Looking on my fact tip right now. I have 65 Different Oil and Gas Companies here in canada that i watch. Almost every single one of them is down today. Devon energy is up. The only green on my screen. Week today, range resources down 9 . If you think traffic is bad on the roads, check out the rales. Congestion on the rails of freight trains is causing massive delays. So much so that Railroad Companies are pouring billions of dollars into newer and bigger facilities including Norfolk Southern. Theyre trying to have a train yard in bellevue ohio. Thats where Morgan Brennan is live for us right now. Reporter thats right, brian. Well, take a look at this. This is what youd call in train speak a hump. What it means is you have a train that rolls up the hill and then the cars come down the other side individually sorted on to tracks that build new trains headed out for different destinations. Thanks to new investments, this Norfolk Southern term nal now has two of these. Currently processing around 1800 cars a day. That number will grow to 2800 3,000 cars a day. Reporter and this is just one example of the tens of billions of dollars that the freight Rail Industry is pouring into updates, upgrades new projects expanded projects to increase and build out the north American Railroad system. So according to the Association According to the association of American Railroads, this industry is forecasted to spend a record 29 billion this year. As you can see from the chart, 6 billion of that is actually going to be spent by bsnf. Its the most ever spent by an American Railroad in a single year. Its happening with that company in particular because of a disappointing 2014 due to delays. Those delays are the focus of the entire industry right now. Gridlock is the focus of the entire industry. We have seen freight rail volumes soaring. Car loads of 28. 7 million last year, the most since 2007. A quarter of that is crude oil. In addition to seeing crude surging by rail those trains carrying that move at slower speeds as much as only maxing out at 40 to 50 Miles Per Hour according to the current regulations. Yes. Reporter even so as Rail Companies are spending more money, its going into more facilities like this. All kinds of investments, and analysts do say that we are starting to see speed times, Service Times improve. Back over to you. All right. Ill take it morgan. Thanks so much for that. Lets jump back into the volatile markets. Tim seymour. Tim, ill start with you since you are here. We are pushing towards session lows. Just a point above. Whats interesting about this market is that bonds arent moving as much as you think they would and utilities are selling off as well. Were not getting a rate shock along with the dollar shock. Typically you would expect this. What i think is happening is you have found longterm rates are so compressed that youre not seeing any divergence. Central bank policy doesnt lead in. This leads to Exchange Rates being the Monetary Policy mechanism of transmission. Thats why currencies are moving the way they are. This is far from orderly as we all know. I dont think this is very good. Certainly seeing a reduction in risk assets. Belong volatility. We have breaking news. I want to go back to sue herera. We do have breaking news. It concerns oil. Reuters reporting that the u. S. Department of energy is proposing to buy up to 5 Million Barrels of oil for the Strategic Petroleum reserve. Once again, up to 5 Million Barrels of oil. We have the close on oil just a few minutes ago. It will be interesting to see whether or not that has an impact in trading at some point when they decide whether or not they will when they will do that event. The department of energy according to reuters will buy up 5 Million Barrels of oil through the Strategic Oil reserve. Thanks so much for that. You would think that they would where have they been . Exactly. They would have said that before at the end of the year, brian. Yeah listen. Its nice. Maybe theyre trying to help out taxpayers and refilling the sprs. I will remind viewers, thats almost half maybe a little more than half of one day of crude Oil Production in the United States. Were about 9. 4 Million Barrels a day just in america. So thats just over half of production of one day. Its nice. Its not going to have any impact at all in the oil market unless they wildly overpay. Thankfully the government never wildly overpays for anything. Im sure they bottom picked. We also have some data out of eia saying u. S. Production is far from falling down even though the bhi, Baker Hughes Rig counts went down. People have been rallying on that. When you hear eia say the glut is 1. 8 barrels, its grown year over year. Quite a spret with wti. Gordon lets go down to you. How does it feel going into the close with an hour left to go . The question is whether theyll hold them here. Theyve kind of since 12 00 held a level. Seems like they want to get sloppy. Not break them down hard but get sloppy. Well have to see about that. Meantime, all eyes are on the dollar. Thats been the story down here. Essentially what people are saying is you know with investors getting spooked because of what has happened particularly in emerging markets, what are the implications moving forward . Really the one thing thats been on a lot of guys minds, this is a market thats reliant on the fed. Yes. Maybe overly reliant on the fed. Theyre in a blackout period. Because there is this lack of information coming from that source, thats sort of spooking investors, too. Yes. I think a lot of this is a retracing and some momentum building. Tim, gordon brings up a good point. We havent heard from the fed. Tim in tv we like to have cute little words. Okay. Im listening. We have the taper tantrum. How much of this market move is rate rage . I think its the ecb as much as the fed. The ecb has pushed us into a level where weve gotten into where there can be systemic risk. They move to major eps head winds, look at intel, or they lead to some type of Financial Market shock. We havent seen this. Everyone knows the numbers. We havent seen this since the er in 92 and back to 1971. I think you have to blame as much of this on the fed blackout as you do with what the ecb has done in the ninth inning of qe. I worry about that. All right. Tim, gordon thanks so much. Tossing to me. When are you going to invite me down there . I like the distance. Barely breathing here. Im suffocateingsuffocating. I think absence makes the heart grow fonder. Thats not what you told me last night. All right. Lumber liquidators comeback not continuing. The stock is down by 14 . The chairman was on cnbc defending his company. We have the highlights, next. 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. Goldman sachs downgrading shares of Lumber Liquidators. The stock is getting walloped. Its down 14. 4 . The chairman and founder tom sullivan was on fast money Halftime Report today. Scott cohn monitoring the stock and the story. If tom sullivan and we appreciate him coming on the network, was hoping he was going to lift Investor Confidence it appear that is interview done by scott wapner might have done the opposite. Yeah. Its not working, brian. Tom sullivan doesnt like the test results, so hes bashing the test that 60 minutes used. Exclusively on cnbc. It doesnt evaluate the host and thats not what is required. Carb is the California Air regulation board. The man who runs one of the labs said Lumber Liquidators is skirting the regulations. Their boxes were stamped that they were carb client carb 2. The regulation is very clear. The underlying composite panels have to meet the carb standard. So which is it . Well, you have to look at the whole process. Manufacturers like Lumber Liquidators and its mills test the Raw Materials going into the flooring. If those materials meet the standard and theres some question whether their chinese product did, but if they do the box can properly be stamped carb compliant. But here is the thing, carb then does its own spot checks of the finished product using the exact same method 60 minutes employed, a method carb and 60 minutes continues to defend. If the levels are too high the company is in violation. Whether Lumber Liquidators likes it or not. Its as if you get stopped for speeding and your defense is you dont bloo he have in re darr guns. See how far that gets you in court. Great analogy. Thank you very much. Another wild week for the markets. The dow currently down 244 right now on the dow. Its been a very rough week. We have oil below 45 bucks a barrel but on deck we are going to present our standout stocks of the week and mine could be spelled weak and its a big company. Its a fact. Kind of like shopping hungry equals overshopping. At mfs, we believe in the power of active management. 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. 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. Let me talk to you about retirement. A 401 k is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable professional. Would you trust me as your Financial Advisor . I would. I would indeed. Well, lets be clear here. Im actually a dj. [ dance music plays ] [laughs] no way i have no Financial Experience at all. That really is you . If theyre not a cfp pro you just dont know. Find a certified Financial Planner professional whos thoroughly vetted at letsmakeaplan. Org. Cfp work with the highest standard. At ally bank no branches equals great rates. Its a fact. Kind of like mute buttons equal danger. That sound good . Not being on this phone call sounds good. Its not muted. Was that you jason . It was geoffrey it was jason. It couldve been brenda. Time for our stocks of the week. My pick is exxonmobil. Down 10 in under a month. It looks like it will end down today. That would be down 12 days in a row for exxon, melissa, and you may have seen them. I havent seen any analysts really come out to exxonmobils defense at all either. These are multiyear lows in fact, so its amazing. We had a guest earlier this week saying she was short exxonmobil. Weve seen a lot of decline already. Well see if it continues to decline. My stock of the week is in the restaurant space, habit restaurants. Its a casual ipos, went public recently. Posted earnings it was disappointing because they trade at a high vaution and the earnings expectations didnt come in according to what analysts were expecting. And we had shake shack that tumbled but its bounced. Its up 10 on the week. But have some faith, brian, because loco did this in its early publicly traded days and today huge pop off the back of its earnings. Look at that 12 on a down market day. El pollo loco. Grew up in california. Were going to deal with this market selloff and gas prices and why consumers arent putting their gas money into other retail moves. As i sit in traffic on the new jersey turnpike i will listen on sirius xm radio. This a great weekend, everybody. Closing bell starts right now. Thank you, brian and melissa. Welcome to the closing bell. Im kelly evans to clotionse out this tough week for stocks. Im bill griffeth. What can you say about this week . We itemized it every day, one big up day on monday a big down day on tuesday, quiet on wednesday, big up day yesterday, and today a big down. This is volatility personified. The vix right now up to about 16. 5. I think were off 1 on the major indexes. Anything could happen in the final hour. The dow is off 220, the