Transcripts For CNBC Power Lunch 20150407

Also on power lunch why your doctor is so angry and confused these days. First, though, to sarah eisen in for manned where i. Shes at the nyse. Hi sarah. Hi. Good afternoon, tyler. Were going to begin with a big deal in the transportation sector. Fedex making a major move into europe buying european rival t t. What is it this mean . Investors seem to like it. Morgan brennan outside Fedex Distribution Center in manhattan for us. Morgan. Well, thats exactly what it means. Fedex is expanding into a Market Europe that until now its had little share of. Fedex has largely focused in az wra. Instead the two dominant players in europe have been ups and dhl. By acquiring tnt express, fedex dramatically expands its presence in europe, and it does so primarily through ground operations. The chairman says there is a number of reason to do this now. The Dollar Exchange ratio was very favorable. The quantity the quantitative easing means the economy has a better outlook now than for some period of time, and we thought that the planets lined up perfectly for this move. So fedex will acquire tnt express for the equivalent of 4. 8 billion in cash and according so european laws will divest the dutch companys fleet of planes. Analyst dozen expect european regulators to ultimately approve this deal, and thats really key. Jackie deangeles. Hi, jack where i. Groo good afternoon to you. Thats right. Very significant price hike today. In the oil pits despite the fact we do have a stronger dollar. Traders telling me what we saw yesterday and today. After a huge move last Year Technology only up marginally in the First Quarter looking at the tech index. Will tech be a leader in q2 after the latest earnings season. Joining us is chairman and ceo of patriarch equity. Dan niles widely followed portfolio manager. Eric was on the halftime show today. Alpha one partners saying Technology Earnings are going to look horrible. How do they look to you . Well i think for this quarter probably up about 1. 71 over same time last year. I think going into q2 i think q2 will probably be down a point. Theres some headwinds that were facing. Clearly, one of the biggest ones is the dollar. So youve got hardware companies, Semiconductor Companies that are taking it on the chin. Intel is a good example. I also think that theres another factor at play which is the whole Cyber Security concerns and people are concerned about potentially buying u. S. Goods. The dollar is the big story, though. Eric hang on one second. We do have breaking news in the bond market right now. I gave it a cplus. It was 24 billion threeyear notes. The auction, dutch auction, added at 1 00 p. M. Eastern. The yield at auction was. 865. To me that looked like where the wi was trading. Its been at 87 basis points. The bid to cover 3. 25 close to the ten auction average. 49. 4 on indirects. If you dont look at last auction at 51. 4 on indirected this was the best number going all the way back to may of 2010. Kind of in the top two. 11. 1 on directs was a bit light. Dealers take 39. 5 . Cplus starts the first of three auctions ending with of course 30year on thursday. Tomorrow well be tenyear notes. Back to you. We know youll be with us for all of them. Joining us back on here. Eric, harm and ceo of patriarch equity talking technology. You sort of have to take technology when it comes to earnings x apple, like you have earnings x energy. How big of a deal is apple, and how everybody is talking about the watch, though. Obviously it wont be in this period. Appear the is the quarter for tech. If you took out apple, tech would likely be negative. I dont feel it will be the stellar huge hit so approximate m people are talking about. I dont think its going to be as impressive. I dont think youll see the impact for a few quarters. My opinion, though is apple this quarter and likely the next stromming every strong. Still riding off of that strong product. Upgrade from iphone 6. Were seeing Power Outages across the city in washington d. C. Our colleagues at nbc news over at the white house say that they saw a power hit over at the white house. Reuters, meanwhile, is reporting that at the state department their daily news briefing was suspended after power was lost. They have significant backup power capabilities, and i can tell you we are standing right here on capitol hill right now and we havent seen any problems with our power in this building. Scattered Power Outages throughout washington. Well keep an eye on it and tell you if theres anything more significant than just that, guys. Is there any bad weather down there thats contributing to this, eamon . No, Beautiful Day here in washington d. C. We havent seen any bad weather. A little rain overnight, but the sun is shining as i look out the window right here. Thanks very much. Reporting from d. C. Since an interim deal was reached last week over Irans Nuclear program, the Tehran Stock Exchange is up 8 . Overall this year its fallen about 3 . Dominik, why do you think iran is a good place to invest . If so what sectors . Iran is one of the biggest mismatches between perception and reality that i have ever seen in 25 years in emerging markets. Thats really what were looking for as investors. The opportunity to spot assets that are underpriced. Iran is a population of 80 Million People has the largest oil and gas reserves in the world. A hugely diverse economy. A fully functioning stock market. Those are conditions that we have never seen before in a new emerging market. Are you expecting that the sanctions will be lifted and this tieup that you have with i believe its a Company Called turquoise partners which is an in country operator will lead you to make Selective Investments there. If and when that economy or those markets open up what sectors will you be looking at first . The traditional emerging market sectors historically have been metals and mining oil and gas, telecoms and banks, and those tend to be the sectors that get investor interest first. What we have in iran though is a domestic che and a domestic stock market thats much more developed than most early stage opportunities we look at. There are going to be many more opportunities in the consumer space and in the industrial space and the manufacturing space along with the traditional sectors. In terms of where we look first, it will probably be in the banks and telecom sectors, but even there were looking at companies that are much more developed than we normally come across. Dominik, i had heard anecdotally its sarah down at the new york Stock Exchange that theres a lot of demand for investors to get in what and if the sanctions are lifted. Where is that demand coming from . Is it the u. S. . Is it all over the world . Is it investors that normally take on these kind of risks in Frontier Markets . If you look at the Tehran Stock Exchange today with the market capitalization of 160 billion and over 300 listed companies, if it was to go into the Frontier Markets global frontier market index today, it would be 25 of that index. You can be certain that every frontier market investor will want to get into iran based not only on the size of the market but also on its very very cheap valuation currently. Because there are practically zero Foreign Investors in the market right now, because Interest Rates are still very very high the market trades on a p multiple of about five times and has a dividend yield in the teens, and, again, those evaluations that frontier or emerging Market Investors cant find anywhere else in the world. The demand from Foreign Investors is going to be very much global. Okay. Dominik, let me ask perhaps uncomfortable question here. There are some people in the world who think that there is some money that just ought not to be made. How would you feel how do you feel about the idea that you would be putting money into a country whose leaders have vowed the destruction of israel whose leaders have backed terrorism in the region and around the world . Is that something that you feel comfortable with and why . I think if we were to take that route, there would be an awful lot of countries in the world that would be off limits to investment. What is clear that is that our policy as always is to follow sanctions policies follow legal policies and if the u. S. Government says yes, its okay to invest or the european government say its okay to invest then you take the view and if you speak to people locally on the ground local people are crying out for more investment. They want the money to come in because they want to rebuild effectively their country and build their country. So providing that we are doing things in compliance with International Laws i dont see that what we are doing is any different than happens in the rest of the world and will no doubt benefit the domestic population. Okay. Dominik, thank you very much for being with us. A story im sure well be following over the next months and maybe years. Dominik, a portfolio advisor with charlamayne capital in london. Go to power lunch. Cnbc. Com for more on this story. An interesting one. Late Winter Weather bringing some relief to droughtstricken california. Jen transactioning the storm for us. Were tracking the upper level low and track this through california today. Bringing rain even down into southern california. Possibilities of thunderstorms as well out here in the golden state. Were going to be watching for the rainfall to add up. Around the bay area in the first half of today already picking up more than a half inch of rain. There will be maybe one to two inches of rain in the central valley. The snowfall in the sierra thats fantastic news and there we could get more than a foot in some of the highest elevations of the see air wra. From the Weather Channel im jen carfagnu, back to you. Lets go to jane. Holding an umbrella. Looky there. Jane. Yeah. Still waiting, tyler. The rain hasnt come here to l. A. Yet. They are saying it will move in 70 chance and it could rain steadily from three to six hours. The mountains may see one inch. Look at this. Usually in a normal year whenever we used to have one of those, los angeles gets 15 inches of rain. So far weve had half that. If you look back over the last few years, golden gate weather has tallied it up. Add up all the shortfalls over four years. L. A. Is 32 inches short of the rain its used to. Now, look at this live picture outside. Our beautiful brand new San Francisco bureau. It has been raining there. Sure hope it moves down here. Their fouryear deficit in the city by the bay is worse than l. Affirmative actions. Theyre 33 inches short. While its hard to talk about cutting back when rain is in the forecast, the problem is we dont have all that many reservoirs. We havent invested in that sort of infrastructure along. The water goes right out to the ocean. As one guy in fresno joked, which is in the middle of california farm country, too often a weather front will come in, it will see fresno and go around the other way. You can say that sarah, for much of california over the last four years. Back to you. Maybe you keep your umbrella open. It will come. Jane wells, thank you for the update from california. Americans lovehate relationship with technology has made us more productive, but how is that helping us earn more money . Weve got exclusive results of our cnbc all America Survey coming up next on power lunch. It took tennis legend serena williams, fencing champion Tim Morehouse and the rockettes years to master their craft. But only moments to master paying bills at chase. Com. Depositing checks at the atm and transferring funds on the mobile app. Technology designed for you. So you can easily master the way you bank. Hello. I am here to offer sophisticated investing strategies. My technology can help you choose the right portfolio. Monitor it. And automatically rebalance it. All without charging advisory fees, account service fees or commissions. That may be hard to compute. But im a computer. So trust me. It computes. Say hello at intelligent. Schwab. Com Many Americans bring their work home with them every day. Some americans bring their homework cell phones being connected to the office made us more productive. It certainly has, but is it making us richer making us earn more money . Good question. That i am suspicious of. Do you have gizmos in your pocket . Just a car key. Thats all. In our cnbc all America Survey we asked a different question than we usually do. Among the questions we asked is peoples relationship to technology. In the last hour we talked about this issue of peoples fear of losing their job to technology and its quite palable. Especially among the poor. We asked a simple question to start with. Are we more efficient . Lets take a look at the data here. Yeah, people say that. 32 , a surprising lie high number from my time say it has no effect on how efficient they are. Sometimes i feel that way. Some people say 59 of americans, over 800 americans polled from all walks of life say it makes them more productive. Thats a good question. A better question if we move this over to the side here we ask the question, are you paid for your efficiency . Of this 59 , 61 , no, my wages are the same even though im more efficient. 3 say they went down and only 35 , many of them post grads, higher education, say their wages are actually up as a result of their efficiency. Then we asked about technology in the workplace. The stuff your boss gives you to work with. Less than 10 say its cutting edge. A smaller number about 21 , 22 say we have advanced technology. But the biggest plurality hear 48 say its only average, and 11 , tyler, say their technology is outdated. You hear that . Get a couple of computers for your folks out there. Thats right. Pay them a few extra bucks. Sfli like the rotary dial phones, man. I miss those days right . Dont you like those . Once ringy dingy, two ringy dingy. Thats going back. Thats lily tomlin. In the next hour on power is Technology Killing american jobs . The author Andrew Mcafee will join us. He has written extensively about the impact of tech on business and society. Sarah. All right, tyler. Ever heard of this . Icd10 . What exactly is it and why is it scaring the hell out of your doctor and whats it mean for you, the patient . Its going to have enormous ramifications for health care in america. Thats coming up. So whats going on today . News alert message email calendar update most of us admit to being overwhelmed by information at work. Thats why ibm created verse. It uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. It continuously learns how you work. And helps you prioritize the people and projects you need to focus on. Theres a new way to work and its made with ibm. [ female announcer ] who are we . We are the thinkers. The job jugglers. The up allnighters. And the ones who turn ideas into action. Weve made our passions our lifes work. We strive for the moments where we can say, i did it we are entrepreneurs who started it all. With a signature. Legalzoom has helped start over 1 million businesses, turning dreamers into Business Owners. And were here to help start yours. Rick santelli here. There is something important. Exactly one month ago the yield was at 114. Its currently at 84. Those 30 basis points reflect in some part an opinion of when the fed will or wont tighten. Twoday euro vertsdz dollar. The euro is getting slammed, and, of course look at the twoday dollar index. Mirror emage has dollar indexes up to a penny on the day. Back to you. Thank you very much rick santelli. Complicated system of coding and billing is coming to the United States Health Care System in the fall. It could cause your doctor to be sort of basically pulling his or her hair out. Bertha coombs has the story for us. What are the details . If you think medical billing is confusing now. Just wait. The government wants more detail on medical care and spending so its rolling out a new upgrade called icd10. Its going to mean an eightfold increase in the number of codes your doctor has to input. Dr. Andrew cl iman thinks gathering data is great, but the switch could put solo practices like his out of business. Consultants tell him to keep three months of cash on hand to deal with the inevitable glitches. We should have reserves either in a credit line or in cash of three months of income because we might not be getting any income for a while. For a small practice that could be devastating and could put some people out of business. Hospitals are worried about getting paid too. A Medical Center in kansas city has said their systems have worked well with the it provider. Theyve had to invest nearly half a Million Dollars in upgrades and training and consulting. Analysts say for smaller clinics and doctors offices, its going to be much more challenging to keep up with the changes. Doctors groups like the ama have asked the Obama Administration to come up with contingency payment plans for the october 1st rollout. For now the Administration Says no matter what the deadline wont be pushed back. Sarah, its been pushed back several years now. Yeah. Another interesting change coming along here with obama care. Thank you. Taking a look at the markets. Here the dow is up for a Third Straight trading session. Took another leg up higher. Almost up 100 points as we speak. Its also, by the way, back to being positive for the year. 2015. Which 30 stocks are driving the gains lately . Dom knows. Dom. Sarah, thats right. Were barely positive. Less than a percent right now. There are a handful of stocks that have really been doing the heavy lifting for the price weighted index here. Theyre the mega cap ones that are driving the performance trying to do their part for the bull case here. Well go through those stocks and the ones laggard snex after the break. Im Courtney Reagan and heres your cnbc update for this hour. President obama hosted an easter Prayer Breakfast in the white house with religious leaders from across the country. Vice President Biden was also in attendance. Pop and gospel singer aim where i grant office hand and performed a song for the event. Scattered outages in washington cut power to several government buildings, including the white house, state department, capital, and justice department. Oprah winfrey was on stage ket. John mccain will seek a sixth term in the senate in 2016. He told nbc news he is just Getting Started on his senate career. He will be 80 on election day in 2016. Blues musician b. B. King has been hospitalized. The 89yearold was hospitalized from dehydration caused by type ii debites. His daughter says is he doing much better. Thats a news update for this hour. Back to you. Thank you very much. A handful of the biggest stocks in the index are doing their best to keep things afloat. Dominik is here with the dow heavy lifters. We are dealing with a price weighted index that means the stocks prices are the highest. The index moved them up. It just so happens this time around the heavy lifters are mega cap companies. Those with market caps over 100 billion. Lets take a look at some of these here. Yeartodate, wise entering todays trade, the dow is relatively flat. Its up 15 so far yeartodate. Thats adding 112 points to the overall dow performance. United health group, also a strong perform ner the Health Insurance side of things. Up 17 wrerz. Praktor gamble caterpillar, American Express all down by 9 to 14 . Theyre the ones that are the biggest weights right now, sarah, on the dow. Back to you. Thanks very much. The dow and s p 500 rising Third Straight session. By the way thats something we havent seen since back in february. February 17th. Joining us now to discuss gina martinadams, from wells fargo securities, and chief global strategist at nicco asset management. It does feel resilient given that we are on the brink of what is predicted to be the most challenging earnings season since the great recession. Is it already priced in . You know i think that we went a long way to pricing in earnings weakness in the second half. To be fair were also expecting a pretty first half im sorry, but were also expecting a bounceback in the second half. I think its really a mixed view out there consistent with a consolidating market. Weve churned in this sort of sideways pattern for most of this year. You know stocks are barely up so far this year and thats consistent with where we are. What jean gentleman just said is awe bounceback in the second half. The Economic Data in the earnings are you convinced its going to turn around . Were convinced its going to bounce back in the Second Quarter and afterwards. The consumer has so much disposable income in real terms right now, and that 68 of the u. S. Economy is going to Power Forward the u. S. Economy into 2016 in our view. 2016 earnings will be much better than 2015 and the market is going to start looking forward to that. Next year should be much better. On the market for a moment, looking at some of the technical levels. Weve spoken to im other a lot over the last few years. Youve made a major shift at the end of last were. You were one of the most bearish strategists on wall street. We are trading right under that 21 day target. Are you on the brink of any other big call one way or the other directionally . Are we at an inflexion point in this market . So we have a 12month target right now of actually 2222. We see a reasonable amount of up side. The biggest market is happening at the sector level. Everyone is banking on this consumer outlook, and thats being reflected in the consumer stocks. Right . Everyone thinks the u. S. Consumer is going to do a lot better. I think there are underappreciated value in some of the areas of the index that have been beaten up this year, and thats what we think the second half of this year will be all about is some of the names exposed to europe. Some of the materials and industrial stocks. You think the second half will be a bit of recovery and the stocks have had some considerable pressure so far this year. Interesting enough, you think there is a change. You changed to underweight in europe after being overweight for six months. Why . Well that stock market area has boomed in the last six months and earnings have not. So valuations have gotten up to very, very high levels. We just want to wait and see earnings bounce back to justify the current valuations. Essentially for the s p were looking for about 2,270 at the end of the year, so were still quite positive. Weve been overweight equities for three and a half years now. Just around where ginas target is. Thank you very much, gina and john. Go to power lunch. Cnbc. Com right now to see why john also thinks that commodities are trading higher. Thats power lunch. Cnbc. Com. Tyler. All right sarah. With us now c nbsz contributor ron insana editor of insanas Market Intelligence at market fi. Com. Some economists and Interest Rate folks you have been talking to are suggesting that not only may any Interest Rate hike be put off a bit, but it might even be as they say in the nba, one and done. Yes. You buy that . Well certainly, ill writing about this on cnbc. Com today, tyler, and theres some very smart fed fund future traders that i talked to and i have known for many years now. The problem with one and more is the market may if the fed goes on a normalization spree, or a process that takes some period of time. The wreeld curve could flatten and they could have a further slowdown in the economy, and that would then again, freeze the fed in place if thats the situation. Give me the undergraduate explanation about why we need to normalize Interest Rates, raise Interest Rates at all . Why couldnt we just continue doing things the way they are right now . Well, i think we can. Given, again the strength of the dollar which an Interest Rate increase would actually foster even further. Make the dollar go up. The dollar is already slowing export growth and corporate profit growth. Where we are right now is, some say, the equivalent of 1 1 percentage point because of the strong dollar. Thats a lot in the environment which we find ourselves. I would argue that the fed doesnt have to do anything. We have the rest of the world easing still because economies abroad are still quite slow. The dollar becomes a conundrum. If the fed goes, the dollar goes with it, and it goes up. This i think is maybe the central problem, and so if you look at the way futures traders are trying to position themselves, you know, september has become june. June has become september however you want to look at it, and i think some people are beginning to bet the fed has no immediate to move quickly at all you can finding rons whole article there. Its entitled is the fed going to be one and done. Spring season means potholes folks, and another harsh winter means there are plenty of them on the roads. Ive hit a few. Im sure many of you in the east have as well. It means opportunity for some investors. Well tell you who and why when we come back in two minutes. The pursuit of healthier. It begins from the second were born. After all, healthier doesnt happen all by itself. It needs to be earned. Every day. From the smallest detail to the boldest leap. Healthier means using wellness to keep away illness. Knowing a prescription is way more than the pills. And believing that a single life can be made better by millions of others. Healthier takes somebody who can power modern health care. By connecting every single part of it. Realizing cold hard data can inspire warmth and compassion. And that when Technology Meets expertise. Everything is possible. For as long as the world keeps on searching for healthier. Were here to make healthier happen. Optum. Healthier is here. Carlisle is the biggest shareholder of xauta. That purchase gives buffett a 9 stake in the paint maker exaulta. Back to you. The buffett boost. Thanks dom. Rand paul announcing his president ial bid this afternoon. Jeff correspondent john harwood is there. Hes life in lieu ville with his chances. Rand paul has just become the major president ial candidate joaning fellow senator ted cruz. We heard familiar invocations. He said he would avoid unnecessary foreign intervery longs. He said private telephone records that government intelligence agencies have collected are none of the governments damn business and he vowed in his opening line to take washington back take america back from the special interests. Weve come to take our country back from the special interests that use washington as their personal piggy bank. The special interests that are more concerned with their personal welfare than the general welfare. The washington machine that gobbles up our freedoms and invades every nook and cranny of our lives must be stopped. If you want to know who he is talking about there, the opening one of the lines in the music video that preceded his announcement had a Country Singer intoning theyre living it up on wall street and in that new york city town and in the real world theyre shutting detroit down. This is not a wall street friendly opening to the campaign, guys. John, stay with us. Were going to bring in cnbc senior contributor larry kudlow. Larry, join in. In addition to the official candidates on the gop side there are probably a dozen rnkz and a smaller number maybe of democrats who are thinking about running in 2016. Youve got paul and cruz and walker and bush and more on the gop side. Which of these candidates that you see in santorum potentially, which of these candidates has some staying power both financially and the ability not just to be a good show horse in the early states iowa and New Hampshire but really carry the fight into florida and texas and more . Well thats a good question. Thats not an easy question because as john harwood outlined and as you have said theres a whole lot of candidates. I would say if you want to look ahead, which is a very dangerous thing right now, the staying power is going to be with jeb bush, the staying power is going to be with scott walker and my own view maybe this is a bit unorthodoxed, the staying power will be with governor rick perry. Now, regarding a ted cruz regarding a rand paul regarding a marco rubio, they may have staying power. The first debate is in august so were going to have to see, but i think, you know its awfully tough to know right now. Thats the thing. What happened to not but to paul ryan. Why is he in any of this . Has he basically selected out . Oh yes. Paul ryan wants to run the weighs and means committee, and pursue beyond this congress fundamental tax reform. Thats where he has placed his chips. On the question thaw asked, larry, look one of the challenges with a multicandidate field with so many people you just need a niche, a foot hold to stay in for a while both financially. You also have the super pacts. A single one or two donors can keep you alive. It is not clear what is going to force candidates like rand paul for example, who begins with a niche that his father carved out. He is going to try to expand it. Its still a significant niche nonetheless, and he may have some staying power to last for a while, whether he can broaden it to win the nomination i think is a very steep uphill fight for him, but he can stick around for a while. Is hillary inevitable on the democratic side . I dont know, tyler, my frebld. I just want to comment about rand paul. Very important. I know him. I admire him. Two things quickly. Rand paul very solid on free market economics, okay . He is going to run on a 15 to 20 flat tax. He is reaching out. Its the jack kemp Free Enterprise zone model. He is reaching out to minorities accident blacks, hispanics, and young people. These are all good pluses. He wants Prison Reform prison sentencing reform. These are all very good pluses. His achilles here though tyler right now is Foreign Policy. Rand paul staked out a dovish noninterventionist disengagement Foreign Policy. A year ago that looked like it might be a smart thing. Today with the isis problem, with the iran problem in the middle east with the polls showing now people favor boots on the ground to take out isis all of a sudden rand paul is way too dovish for a republican primary. If he moves to the right and becomes a hawk he loses his libertarian base. If he moves to the left he is going to lose primary voters to people like ted cruz and scott walker. Thats a huge problem for rand paul. Tyler. Yes go ahead, john. Tyler. Sure. I wanted to ask larry a question. Larry, are you offended when you hear somebody like rand paul say your friends on wall street are living it up at the expense of the rest of the country . Well, john, i dont like that class warfare talk okay and i dont think i mean wall street guys are trying to make a buck like everybody else. I dont like that kind of class warfare talk any more than i liked it four years ago when Newt Gingrich launched against mitt romney. I think thats a distraction. What we need to do is grow the economy. We need to have more takehome pay. Create more jobs. Now, i think rand paul is good on free market economics, okay . I think he is very good although theyre all going to say similar things. Youre not going to see much space between a scott walker a rick perry, a jeb bush maybe a john kasic or a ted cruz. Its this is going to be the most National Security Foreign Policy race maybe since 1980. Who has the edge there, larry . Who has the edge there . You are talking about as i hear the subtext, you seem to think that the people with staying power are the governors . Walker bush perry. I do. Youre exactly right. I think that rand paul has a problem here with the no Management Experience first term senator. In terms of the Foreign Policy issue, i tell you what probably the most underrated guy in the race right now is governor rick perry who made a big speech at the citadel yesterday. I think jeb bush can handle himself on international stuff. I think scott walker has got more work to do on international stuff. Well see. Im just making that point. Foreign policy will be very big in these republican debates. I think youre exactly right on that. Larry, john, thank you very much. We appreciate it. Sarah, down to you. Game changers, tyler. Were spotlighting new technology and innovations. Transforming the way we live today. Meet the company thats boosting productivity in the workplace. Were back in two minutes on power lunch. Financial noise financial noise financial noise 73 of americans try. To cook healthy meals. Yet up to 90 fall short in getting key nutrients from food alone. Lets do more. Add one a day 50 . Complete with key nutrients we may need. Plus it supports physical energy with b vitamins. One a day 50 positive analyst comments from Piper Jaffray now rate the Data Management and Software Company as an overweight. It was a night all. Theyve got a 77 price target saying that the recent slide in the stock has created a better rescuereward scenario. Those shares getting a nice boost today. Back to you. 5 . Thanks. Time for a special series here on power lunch called game changers. We spotlight companies and new innovations that are shaping the way we live. This hor boosting productivity at work by turning email on its head. You ask any executive when they get the twopage single space email from karen in marketing first they go oh not again. They eyeball and sift through and try to find what they need to know and, then they think to themselves couldnt she have just said that . We give executives only what they need to know nothing more. Update zen simple fiz status reporting for ceos executives, and Business Owners. Whether you are a cfo, whether you are an executive assistant, you have 250 characters to tell your boss what he absolutely needs to know. Were disrupting the way status reporting is done today, which interestingly, is done with Generic Solutions like email like spreadsheets, like powerpoints, Text Messages instant messages. There are two and a half Million Companies and organizations with under 500 people. Thats our target market. You speak to 100 ceos as you have done, and asked them what you do you use for status reporting, youll get 100 different answers. We have full disk data encryption so that wherever it is you can rest assured that its protected. We are helping the executives by taking the hatch tote their inbox. Pretty cool. For more on our game changer series, go to power lunch. Cnbc. Com. Tyler. All right, sarah. New data showing millions of americans are texting and driving and lying about it. Our own phil lebeau got behind the wheel to find out just how dangerous it is. 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Toted millions of americans are text and driving and lying about it. Cnbcs phil lebeau joins us along with cnbc. Com editor eric chemey. Welcome to both of you. Distracted driving a contributor to thousands of accidents every month, every year in this country. This is a big, big issue and a big danger. Its a huge issue. More than 3,000 fatalities if im not mistaken in the most recent data are linked with distracted driving. And this is one of those problems that has not been corrected despite the advancement of technology. I know eric has talked to a number of people who have been tracking this in terms of whether people are stopped using their devices when theyre behind the wheel. The fact of the matter is its an addiction. People are distracted behind the wheel, and look, we found out five years ago when we went out five years ago. I went out on a test course. They said try to do some texting while youre driving. They had me maneuver through some cones. I was terrible at it. Anybody is who has gone through one of these courses. Its impossible. You cannot drive and also text and drive and do it safely. There are people getting away with it, but you shouldnt be doing it. You take the handheld technology, like the one youre use thering, and you combine it with the technology thats already in the car, whether its your dvd player or your gps system, and you have a recipe for potential live very difficult situation. Maybe an accident. Maybe a tragedy. You did some research got some data. What did the data show. All the data at cnbc. Com. You can go through all the numbers. The two things that stand out when you look at jeshd, its men who pick up calls when women call them. Whether its their mom, whether its their wildfire whether its their mistress. Theyll pick up the phone. The men will pick up when the phone rings. They will pick up and not go handsfree. Women will not pick up the phone when men call them. Theres a big difference in the data when it comes to that. The other interesting thing is when you ask drivers do they text and drive . Do women pick up the phone when other women call them . Theyll pick up when other women call them but not when men call them. They wont pick up when men call them. Phil, men will pick up whenever the wife the girlfriend the mom calls, right, the daughter . Yeah. Were not very advanced creatures. I think the gender study is something a little different here. What is serious about, this phil, is there are still people picking up and texting while theyre driving. Why havent the regulators been on top of this . I know in some states its illegal. Its illegal probably in twothirds to threequarters of the states in this country. That doesnt mean that people are stopped. Look, when i drive here in chicago, you can get busted by the police and by the sheriffs patrol for texting while youre driving. I know people who have gotten tickets. They still do it. Its an addiction. People feel like they constantly have to pick up their phone and theyre like this when theyre out on the road. Unfortunately, thats the way. They are lying. Erics study, the constituted yeshg the data he has firsthand. The study is interesting because it asked drivers do you text do you pick up . They mostly say no but when you ask the passengers are you in a car where the driver is texting and the driver is calling, then they say yes. Theres a huge gap of 23 , which represents 50 Million People when you think about it over the course of the entire countrys population. This is a wonderful finding. What are the Car Companies doing about this . Do they feel pressured to make it even easier to use handsfree devices or what . Well they have new technology has made it easier so that you dont have to pick up your device. Theres debate about whether or not thats good or bad because its the distracted mind tyler. Not just that you are picking up a phone. The other thing were starting to see are more features where you can block a device from receiving messages or phone calls. This is particularly geared towards parents who want their kids, you know not to be distracted when theyre driving. That said, i know people who have some of those vehicles that have those features. They are not using them as much as they should. People still want to have that ability to talk when theyre behind the wheel. Or you forget that you havent synced it up the right way or whatever the heck it is. Lets go one more time here. Men will pick up the phone when a female calls them. Yes. Wife girlfriend mom. Even a mistress. Even a mistress. You know what tyler, maybe its just that women are more sensible and they know not to pick up the phone. Women will pick up the phone when another woman calls them. Not when a man calls them. Men pick up more correct, eric . The men always pick up when women call. Whenever women have outgoing calls, everybody picks up. Women pick up. Men pick up. Men have outgoing calls, people dont pick up as much. Women will pick up when other women call. Thats what the data say. Thats where were going to leave it to be discussed. Eric sarah, phil thank you. Thats it for the first hour. Lets get it over to brian sullivan. All right, tyler and sarah. Thank you very much. Im brian. Melissa joining us in just a moment. If you are in washington d. C. This is anything but a power lunch because in many parts of the Nations Capital the power is out. Let us get right now to eamon javers with more. How severe is the power outage in washington d. C. . Widespread Power Outages in washington. All the federal buildings as you can imagine, have back uppower, but weve seen reports of the state department being hit with a power outage. The white house briefly. The Capitol Grounds lost power, but then had power restored. Theyre warning now on the capitol that they might see further Power Outages throughout the day. Were also seeing reports now that some metro stations the subway here in washington d. C. Have been impacted by these Power Outages. Of course people will need electricity to get those escalators moving to get them into and out of those metro stations throughout the afternoon and the rush hour commute. At this point the department of Homeland Security saying theyre seeing nothing out of the ordinary here to worry about in terms of these Power Outages except for the fact of the outages themselves. Were also seeing reports now from the Associated Press and reuters that there was an explosion at a power plant in Southern Maryland. That might have been the triggering event that caused these sweeping Power Outages throughout the afternoon, and, brian, this being washington d. C. A number of events at any given time are being televised. We saw an event including Oprah Winfrey over at the Postal Service that was being televised. That was interrupted as well. We have video of that. Oprah speaking just as the power goes out. There you see the lights going out. Oprah continued on didnt break stride at all, continued with her speech about maya angelou and the new stamp over there at the Postal Service. A lot of different industries, government events being affected. Obviously our bureau, where you are standing right now, in sort of a nondescript Office Building there. Not knocking it. Just saying its not a federal government building. You do not have an independent source of power. Obviously, eamon, you have power. We do have power here. We are on capitol hill. Were just about a block from the capitol Office Building. Near union station. This area has power. Our building though i believe has backup power. No indication that thats been used here at this point, but we have power and a lot of these places where were seeing the power go out, its coming on very quickly. We were sold toeld over at the white house the power did flicker out for a brief time but was immediately restored. As can you imagine, they have reboughs backup power as well at the white house. No indication of exactly how long we can expect this to continue. Weve reached out to the local power companies, pepco and the utility in Southern Maryland for more information. Well give you that as soon as weve got it. Hassle for many but obviously very problematic if you are down in a metro station right now. Yeah definitely. Thank you very much. Youre going to keep us uptodate on that developing story from washington d. C. Lets now, though get back to our regularly scheduled programming, and we begin today with a list because we like lists. We especially like lists when they are chockfull of stock recommendations and Goldman Sachs today put out a big list of what they call their cheapest stocks. They define that as the stocks with the biggest gap between the current price and the target price of the analyst that covers that stock. Let us bring in dom. That is by itself a great list but you took it a step further because it is not just about target price gaps. Also about dividend payouts. Thats right, brian. A lot of these stocks these days that are recommended have a lot of attributes to them but in this day and age a lot of investors have focused on this idea of dividend payers. We took that list of 40 stocks that goldman put out for their recommendation list and narrowed it down to the top ten that have the highest dif depped payouts. Well go through the first five right now. First of all youve got l3 communications. You can see here over the course of the past year its up about 10 . Its respectable. Goldman analysts think this has a 20 up side potential based on their analyst target prices. And its got a 2 dividend yield. Not too bad for l 3. Another one were looking at here is union pacific. A Railroad Company you can see here. This one has an actual dividend yield you can see here up about 16 . Its got a 2 dividend yield and its up side potential based on goldmans call could be 23 . Number four is cf industries. This stock has another 2 yield in terms of its overall dividend yield. Up 12 yeartodate. It could go up by 22 if the analyst target prices arent correct on this particular stock, and then you move on to the last two that we have here for this goaround. Number sech, chesapeake energy. This one has a more than 2 dividend yield, 2. 3 to be exact. This stock is down about 42 over the last year. Analysts here think you could possibly have up side here of 55 based upon their target prices and, again with the 2. 3 dividend yield. The last one for our list right now, at least on this goaround, number six. Psx. Phillips 66. This one here pretty much flat for the year. Its got a 2. 5 dividend yield. Not too shabby. You get paid to wait there. Its a possible 20 up side given what their analyst target prices are. Those are the five were going to go through. For more go to power lunch. Cnbc. Com, and the next five that we have, the top five in terms of dividend yield on goldmans list will have in the second part of our show. Guys, back to you. You are such a tease, dom. The next coming up later in the show. What i found about chesapeake dom, was it was the absolute winner on goldmans list in terms of the up side from the analyst estimate. I mean the interesting part about this too is whether or not those analyst estimates are, again, revised. Remember, for a lot of these stocks in the energy patch, there may be some revisions that come about. Maybe not from goldman, but from others. Just based upon the outlook for things like gas, oil, prices things like that. Whether or not those things stick at a 55 up side potential, maybe that remabz to be seen. For right now it stops goldmans lists. Its a pretty big deal. And by screening for a dividend, dom, you are also screening out maybe the higher growing companies that dont pay dividends. Whats interesting here, right, the whole idea of looking at this list here if goldman has their recommendations, whether you believe them or not, those are what their experts dlaim claim to be some of the best performing stocks but in this day and age, if you feel like you want to get paid to wait, some of the stoxz will do that for you with a better than 2 yield. That means theyre all averaging what the dividend yield better than the overall s p 500. That stands right now at about 2 . All these guys yield more than the Overall Index and at the same time possibly have Growth Potential if the analysts are correct in their price targets, guys. All right dom. See you later on in the show. Some breaking news coming in on eny melon. Lets get to kate kelly with the news. Kate. The activist battle over bank of new york melon is heating up a month after Hedge Fund Manager nick mcguire took to our air to call for the resignation of the banks ceo, gerald hassell, over concerns about underperformance and a bloated cost structure. Mcguire is calling hassell and his company out once again. This time over what he regards as overly rosy statements hfd the companys april 14th annual meeting. And in response to his original critique. Contrary to recent comments that boast about increased shareholder value at the ny during his tenyear which to be fair the stock is up huge over that period of time, mcguire says on his website a better bank of new york. Com most of the share increase since hassell arrived is due to multiple expansion rather than earnings growth. He argues further that the company has missed its own performance targets and that it has misrepresented metrics like costs and margins which mcguire asertsz are up and down respectively. Well bny is the single largest holding, just for context, mercato is the 13th shareholder behind another activist hedge fund and also Brookshire Hathaway in terms of the size of its stake. Still, this company and other holdings are standing marcado in good stead even without the Business Improvement that says he is arguing for. Marcado up 4. 8 . Thats beating the benchmark on assets of about 3 billion. Back to you. All right. Thanks for that. Thank you. Listen there are some real danger zones out in the market right now. This is not high burb low. The global bond market is basically telling us this and this is why we say it. Really, folks, this is kind of incredible. Currently there are multiple trillions with a t, dollars worth of bonds, that are yielding negative real Interest Rates. Whats a negative real Interest Rate . Well, that is when you, the investor effectively have to pay to own a bond. Remember, you are supposed to get paid when you buy a bobbed. Thats the entire point. You are basically by buying the bond lending the money you need to get Something Back for your return. Well, im just going to highlight a couple of trouble spots around the world. The net are lands, france denmark, germany, switzerland. Theyve got negative yields on some of their debt under five years. You go to japan, other places. The real yield when you factor in inflation, is also a net negative. The point is this why would anybody buy any kind of a bond in todays market . Joining us now chris ryan of thornburgh Investment Management wresh focuses more on the Municipal Bond market, and, chris, im not going to ask you to comment on dutch debt. Do not worry about that. The liquidity issues that are going on here are also kind of going on in the United States as well. Im going to ask you, chris, why would anybody own any kind of a bond in this market because theyre yielding i think, the technical term is squat. If you are looking internationally, i dont think they should be owning any of those bonds. Your whole leaduntil kind of sounded like you could be a great tool bulb salesman from the 1930s. We have issues here in the United States too. The Municipal Bond market if you look at real yields a yield of a Municipal Bond adjusted for inflation, those levels are quite low. In five years in Municipal Bonds, real yields are negative. Youre not keeping up with inflation. In ten years, real yields are around 50 basis points. Longterm average is 200 basis points. Fixed income products are overvalued here also. You have to look pretty hard to find ports of value in this market. Yeah. You know because you wonder by the way, florist was my secondary occupation. Just happened to make it on television. Theres still time chris. Theres still time. You know when i look around the world, i think, mad money, if im a millionaire in europe and someone pitches me european bonds, why would i go anywhere in europe . At the minimum, if i want fixed income, the bond market im fwog do it here in the United States. Well are you still taking on a lot of currency risk. Thats going to be the transfer mechanism that will even out those differ ernls and Interest Rates. Still, if you come over here although they may look good relative to the european counterparts, our fixed income products are overvalued. You know real yields are quite low. You have to be cognizant of that. Investors have to be looking for increased volatility and stay diversified. Im not suggesting they leave the fixed income markets entirely but they have to look for parts of the market where they can find value. In the taxable market were finding some of those positions in our in the thornburgh Strategic Income fund. In the Municipal Market its more difficult to find those values. Credit spreads are extremely narrow. Were back to levels we havent seen since 2007 when 50 to 60 of the new issue Municipal Market was coming triplea ensured, although those tripleas didnt turn out to be worth much. Now thats so 10 of the market is insured. Covenants are much more looks. Municipal markets, issuers are having a great time. They dont have to come up with that Service Reserve fund or mortgages. Its a great time to be an issuer, not an investor. Thats for sure. With the negative yields particularly in europe chris, where is that causing bubbles around the world . I mean are we seeing it perhaps in the em Corporate Bond market . I mean, where should investors really be cautious . Well we Start Talking about em Corporate Bonds, and are you getting far afield of my area of expertise. I would have to defer that type of question to anybody else. Where in your world . Obviously this is causing money. Billions of dollars, right, from the Pension Funds in europe. Define places where there will be yield, not negative yield. Where is that money going and causing maybe an over valuation . Look at corporate spreads and our taxable market. Look at treasuries themselves. Weve had Central Banks keeping their foot on the front end of the yield, and thats causing some dislocations. Were at very very low levels of Interest Rates. Just, for example, a tenyear treasury bond yields billion 2 . Has about a 7 duration. If it yields 30 basis points youve lost one years worth of income. Investors have to be diversified, i said by asset class. That means owning cash. I really appreciate your candor, chris, because you are a fixed income guy, and here you are saying on cnbc that many parts of the fixed income market are overvalued. I wish every guest we had on would be as sort of honest about things as you are. We want to be trusted partners with our clients. And you are being listen you dont get a lot of people saying their market is overvalued. Heres my other question. You noted the triplea, double rated. Without getting into those things every one of our viewers knows what happened with the Rating Systems basically collapsed under its own weight. That said i was looking through a bunch of Municipal Bond offerings today. This is what we do for fun. Mount st. Helens wra and i. We go back and forth. Why then would a double a or a b rated Municipal Bond yield only 4. 5 . It appears that sort of midlevel credit Municipal Bonds are wreelding what a triplea bond used to yield, which im sorry, makes me service. It should be you should be nervous. Thank the fed. The fed has kept an accommodative policy for prolonged period of time. Zero Interest Rates were important when we were losing over 500,000 jobs a month as we were in 2008 and 2009. Right now forgetting what happened last friday were adding over 200,000 jobs a month. This is not the same type of environment, and their accommodative policy is not appropriate for this environment. They have to normalize Interest Rates. That would push base level yields up and that would allow spread product to revalue itself. What the fed has done is they have pushed investors out the risk spectrum. Jeremy stein in a 2013 speech acknowledged that. He said as long as weve done that, we dont particularly care until it becomes a memorial makt risk. Sounds like this will end badly, in your view. We believe it will. Thats why weve taken our durations to bearish range. Weve increased our cash define end badly. How about something similar to 2013 when we had the taper tantrum or maybe worse. Something that like we had in 1994 where short rates went up about 100 basis points. Long rates went up 200 basis points. All right, chris. We take this all hour. Believe me time is up and do not allow for that. Were going to get you back on soon. We appreciate your candor. Thank you very much. Chris ryan of thornberg. Heres your menu for the remainder of this fine hour. Details of what may be the most Important Development in years for smartphones and wearables if you dont believe the hype hear the story and decide for yourself if its important, and speaking of technology is it helping or is it hurting the job market . Youre going to hear from andy mcafee, author of race against the machine. He will weigh in. Plus, more on the market. Stocks higher right now. Stick with us. You are watching cnbc. The worldwide leader in business news. Doug. Youve been staring at that for awhile, huh . Listen, Td Ameritrade has former floor traders to help walk you through that complex trade. So youll be confident enough to do what you want. Ill pull up their number. Blammo. Lets get those guys on the horn. Oooo looks like it is time to upgrade your phone, douglass. For all the confidence you need. Td ameritrade. You got this. Researchers at Stanford University have invented a battery that can fully charge in as little as one minute. With the battery is made of aluminum does not lithium ion. Its safer than the ion type batteries. The battery is not in the market for a while yet, he said but in the age of mobile devices, the breakthrough in Battery Technology could be as important to the tech sector as advances in microprocessors 30 years ago. Let us bring in josh lipton. Let us bring in phil lebeau. You know josh i tell you, we talk about the apple watch. People point to its poor i dont want to say poor, but less than a day battery life. Everybody, airports huddled around the few outlets like smokers used to be but now theyre trying to plug everything in. How big of development could this end up being . I think it could be a breakthrough in the sense that you could be talking about a battery that is cheaper and its faster. You know talk to analysts, and theyll point out aluminum is stable. The chemical reactions arent as volatile. Before you break out those balloons you know the jump from a research lab to actual manufacturing involves a lot of its own challenges. Lets say youre apple and you are interested in this technology. Well, you would have to get your suppliers to build new factories or at least retro fit their existing factories. I was talking to rob enderly of the enderly group, well known tech analyst. Rob was saying these batteries come with their own set of chal ekz. For example, if you are going to suck this much power out of a charger that quickly the charger might be the size of a brick, and that comes with their own safety risks. Fire risks. That much power, again, that quickly. That potentially has its own risk. Some potential benefits here but then that jump from a research lab to actually your iphone or wearable a big one, brian. Yeah. You know phil lebeau my initial thought when i heard this was, man, if this battery could one day be big enough and powerful enough to go into say, a tesla or a bmwi3 or volt or whatever it is can you imagine being able to charge up a tesla in five minutes . That would change the game. Most people believe whether its tesla or another vehicle, you are looking at at least two before the battery component of this equation changes in a drumt fashion. They are making advancements but eli murphing even yesterday, he tweeted out there are questions about battery breakthroughs. He said you need power and energy density, and you need to know how long theyre going to last. When you are talking about propelling a vehicle of a couple of thousand pounds down the road, at least a couple of thousand pounds if not more you need a lot more than what you are seeing in this research lab right now. Doesnt mean its not an impressive breakthrough. It just means that were a long ways from seeing the type of breakthroughs that we need when it comes to the vehicles that propel electric vehicles. Phil elan musk is talking his own book. He is spending billions of tlarz building a gigafactory that will churn out lithium ion batteries. He could be on the wrong side of this. I agree its going to take a long time for this to become commercially viable but at the same time five years ago phil im curious, where were lithium ion batteries for cars . That was seven oorch eight years ago, and the advancements are significant, but were still nowhere close to where we think that the battery needs to be in order to be a real game changer when it comes to electric vehicles. It is early, guys but its still a very cool development from Stanford University. Im sure josh will be all over it in the future. Oneminute charge sounds fraet good to me. Phil and josh thank you very much. All right. Still ahead, a tale of two shippers. Why the charts are telling completely different stories about fedex and ups. Plus, one of the big banks getting a big upgrade today, so should you play the financials ahead of earnings season . Stick around. We are going to be right back. If we are not, alert the aauthorities. Thing more romantic than a spontaneous moment. So why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. 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First, we are just minutes away from the oil market closing for the day, and swraky deangeles, mother day this week where we are seeing the markets go up. Absolutely, brian. Actually it was a little bit of a head fake this morning because we had some downward pressure but then all of a sudden this rally. Were going to talk about whats impacting the crude trade here, if it will last, and, of course we have some inventory numbers coming as well but is the market going to care . Well talk about that. Stay with power lunch. Financial noise financial noise financial noise rand paul running for president. He launched his 2016 campaign with a combative message against both washington and his fellow republicans saying we have come to take our country back. Jurors have started deliberations in the trial of boston bomber swroe car tsarnaev. This is less than a week before the second anniversary of the attack that killed three and injured 260 more. The California Water boards say residents saved less water in february than any other month since the drought began. This as a rare spring storm hit parts of northern california. Though forecasters are calling for a as much as a foot of snow at Higher Elevations and rain in lower elevations. Later, the storm isnt expected to have much of an impact on the states historic drought conditions. The mayor of lou seal balls western new york town. This after the original sculpture offered to fix the statue for free. The mayor, though said no thanks. Thats the cnbc news update for this hour. Back to you. All right. Thank you very much courtney. Meantime, oils minirally is rolling on. Lets get back to jackie deangeles for the price of crude. We brought you five of the 40 stocks gold man sacks called the cheaper relative to their analyst price targets. We sorted them by dividend yields. Dom is back to count you down to the final five. Melissa, number five here is one that we all know. Cisco systems. You can see a nice run. Up 21 over the last year. This stock has a 3 dividend yield. So far against the current price. Analysts here see an up side of 24 . Overall one of their picks. Again, adjusted for dif debbed yield ash nice payout there. Number four on this list is another one we all know about. A large cap play. Swren motors. This stock, remember has a 3 dividend yield as well and analysts here think the stock could go up by around 23 from current levels. Again, another one of their top picks in terms of value. Number three, a Biotechnology Health care stock. Those shares could go up by about 25 . After a big run over the past were. A possible 25 up side and this stock has a dividend yield of around 3. 5 . Another big play. Get paid to weight a Health Care Stock there. This is one that may not jive as a dif depped play but its a somewhere ps maker. Garman. Theyre down 17 . Not a good run here but analysts still think this stock can go up by 33 if their analyst price target comes to fruition. And this stock has a 4 dividend yield. Overall a not too bad situation for garman. Number one on their list for top stock picks with the dividend yield, interesting here. This is wynn resorts. Its been much maligned. Theyve taken a huge hit. Concerns about vegas as well. Those shares down 38 . Still, analysts at goldman think that theres a possible 32 up side to these shares and if the dividend stays intact its current level payout is 4. 6 . Another stock that you get paid to wait on and has potential up side based on what goldmans targets are. Guys, interesting here that a casino stock tops their list if you sort their list by dividend yield, which we did. Goldman didnt do it on their own, but we decided to take a look at their list and pull the top ten. I think, melissa would agree with this that its good that its a casino stock because youre taking a gamble. Ah, i see what you did there. Dividends can be cut, and analysts price targets can be reduced. By the way, dividends employ up when stock prices go down which is exactly what we saw with wynn and garman right . Again, if these Dividend Payments stay static or if they hold the yield if the yields go up thats what melissa was trying to say. Many have up side price momentum over the course of the past were. A couple of them like the garman and like the wynn resorts, are on their list because the analyst target prices are still relatively high to their current levels. Whether or not they stay that way is a big issue and, of course whether or not that downward price momentum actually gets them to rethink what their capital payout policies are. Thats why theres always a risk here, like you said about many of these stock picks. Again, this is according to goldman with regard to their target prices. We just looked at them through the lens of dividends because so many investors are looking for payments to go along with some of the possible growth stories here. Good work, dom. Thank you wrfsh. Power lunch. Cnbc. Com. Do you think were going to see decent numbers out of the banks and or jpm in particular ahead of the earnings season . I think numbers will be fine. Im not super focused on the numbers right now, though. I mean i really like these things longterm. I think this is the place to put money right now. Fundamentals are totally solid. You have you know underrigt thats really helping them out tremendously. M a, of course. Hopefully well see trading volumes pick up when the fed makes a move on rates. Most importantly, its a very underowned group. I think a lot of money is gravitating here, which really important, and the fed has been leer about this had is that they raised rates very slowly. Its not about when they raised rates or if they raised rates. Its how they raised rates. Its the timeline. I think its going to be a very slow period. Theyve indicated that. Again, well have that positive sloping yield curve. We want to make sure its maintained. Look, for that reason i really think this group longterm is a buy, and i think hfd the earnings is absolutely a buy. Okay. Buy, buy, buy. Stacy gilbert, how are the Options Markets looking at the financial stocks right now . David is talking about he is not really paying attention to the numbers or he is talking about how he likes these financial stocks longer term. We look at the options, what i would say is the world tends to agree with him in the sense that theyre not really paying attention to the numbers either. Xlf, for example, the cost of an xlf option right now is in the bottom quarterile over the past year relative to the Broader Market, meaning the world, the marketplace itself is not pricing in significant risk into the financial stocks as a whole. If we look at have you had names, somewhere p morgan thats how you started the show brian. Somewhere p morgan the implied move as we head into earnings in the next two weeks is around 3 . It typically moves around 2 . Nothing owes of the realm of whats normal. I would say were seeing similar type of implied moves. Wells fargo, Goldman Sachs wrush name it. For investors who see financial volatility coming forward, i would say the options are definitely the way you could position right now because on a relative basis, theyre fairly inexpensive to the Broader Market of what they have been over the past were. Theres your options view. We got the fundamental view from david. This is why they do it both ways on trading nation. David and stacy, thank you. For more trading nation head to our website trading nation. Cnbc. Com. Sit down if you are standing. Stand up if you are sitting. 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If you talk about those for the 100,000 or more only 4 . Same split we have in education. When it comes to High School Degree or less 20 are concerned. Post grads just 6 . On the issue of are they more productive . Yeah tel technology does make them more productive. 59 say that. Are they being paid for it . No. Thats the other thing we found is that people who are more productive, see that no only 35 say their wages are up as a result of their increased productivity. Tyler. Tyler. He told me 30 seconds, and i was in a hurry anyway. Ill take that as a compliment. Tyler is not only handsome, but he is intelligent and more successful for me too. Stay right here. We have a couple of good folks to bring into this conversation. Catherine rampell and Andrew Mcafee, Research Scientist at m. I. T. Author of one of my favorite books the Second Coming of the machine age. Coauthored with eric did i say it right . No but a fur vest with an ax. He is used to it by now. Its all right. I watch vikings on the history channel. It works out. Actually, thats a good point. Lets talk about this. In your book you know that for most of Human History we were boring. We didnt do much with the exception of fire and the wheel, we didnt progress much until the last couple of hundred years. We seem to be evolving that for many may be unsustainable. Nothings has changed the course of Human History, the dmes indication of animals, empires, wars, religion. Nothing has changed the course of Human History like technological progress. Straul first of all, the Industrial Revolution and now we say the second machine age, all this amazing digital progress and innovation that were seeing. Its fundamentally fantastic news because it grows the overall pie, but what were seeing in the second machine age is that that pie is being divvied up in some weird ways. Your respondents in your survey their feelings are just about exactly right. Productivity continues to go up. Compensation has stalled out for that average American Worker for a while now. This is new, okay . When you learn economics, what you learn is a productivity is a good thing. It leads to more jobs. You also learn that your wage is your marginal productivity. Think about a jack hammer. You give a jack hammer to a worker, and they can tear up the road more quickly. Okay . Now think about a computerized machine that tears up the road and completely replace the worker. Thats whats new and thats what all the economies are trying to figure out. Technology technoligical progress has been complimentary with human skills. Theres a creative disruption thats going on. A lot of jobs are taken away but in the meantime there are new jobs created for new sets of skills that are basically made more productive or more efficient by the creation of technology. Whats different here or i mean, maybe not so different is that the people who are whose skills are speed limitary to the technology are not necessarily the same people whose skills are being displaced by technology. This is a very difficult conversation to have catherine, because what are you getting into are almost the abilities or willingness of some people to learn new skills later in life, and some people can get insulted by that and say, hey, i can learn whatever i want. The idea is very simple. Im a warehouse worker. I get replaced by a robot that picks stuff off the shelf. The idea is theoretically that i will then go work for the Robot Company either selling it or programming it. Perhaps thats not in my skill set or my desire to do so. Or youll maybe transition into an entirely new industry altogether. I mean the question is how well can you teach an old dog new tricks . How you guide people into new sets of occupations, new sets of skills. Can a construction worker who has been displaced become a nurse . How do you kind of nudge someone to the right set of retraining so that they have the same earning power that they lost . In particular, if you have to do it over and over again, if these over and over if these ways of tech displacement are coming quicker and quicker, then were asking that poor person to retrain, upskill, go find a new industry. Thats the key, which is if you think about how profound some of these step changes are. Technology over time rises 1. 5 2 rate. You talk about a single machine comes along is is able to reweld the turbo fans and keeps the engine off the plane six weeks instead of six months. Thats several decades of productivity in a single machine. It may be that the rules of economics are still in place. Sfroo go to the airport. Tablets are taking orders. Robots are making hamburgers already in japan. Its so profound that the economy cannot keep up and it will be over time, and i think what andrew is talking about this idea of waves and waves of Technological Development means it will be difficult. We have massive social issues around this. The weirdest part though is its not going up in the productivity data for the past ten years. Our productivity growth which is maybe the most important single statistic to keep our eye on. Its really been in the doldrums for a decade while people like me have been preaching about how fantastic things are. Sfroo we are out of time but there is a school of thought, catherine, which i have heard, and i cant remember, which is basically this. The Labor Force Participation rate is probably never going to go up again simply because we dont need the jobs anymore. I i think thats a falicy. Theres demographic change thats going to depress Labor Force Participation rates, but weve seen again and again throughout history that peoples jobs have been displaced by technology, but new jobs are created. I mean back in 1900 40 of the work force worked in agriculture. Everybody said, oh, no there will be no more jobs anymore now that theres so much automation and now the jobs have been displaced, and low and behold the generation later people found other post war europe in japan were the only country that could make anything for 20 years. This is true around the world, though. Everything was destroyed except for the United States. Thats why we had that postwar boom, most likely. Were they going back to farming . No because they left their farms to work in the factories for 20 years. Then had he this nothing those were new jobs that were created by technology, right . Those were jobs that did not exist . The des mated dresden and osaka and used to make other stuff. But these are new jobs that were created as old ones were being displaced . To your point, among prime age workers in the u. S. , the Labor Force Participation rate has been declining since about the year 2000. The best you could say if you squint at the data really hard for the past year or so maybe its levelled off. I kind of share your intuition which is that we may have seen the peak of Labor Force Participation. I hope so. I hope youre wrong too. We could do an hour show on this. Youll first have to prove that youre not a robot. How do we know that . Because they would never build a row about the with these ears. That is true. It would be a flaw in the system. You could be the first generation. The prototype. Am i the only person that thinks email has done more to destroy productivity than enhance it . Im not the only one. Pick up a phone. Shake a hand. Melissa lee, we cant because youre at the nasdaq. Virtual shaking its virtual shaking hands. No comment on the ears. Its like a thing you drew on your board yesterday. That was a dog yesterday. I wrote woof woof. Today i will draw you though brian, coming up later in the show. Take a check on the markets. Fairly quiet day. Weve been trading in a tight range on the s p 500, ten points or half a percent but we are firmly in the green. Well have much more on the markets when power lunch comes right back. 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. Were tracking two bearish calls. American express and oppenheimer cutting this to an underperform. Analysts saying competition has intensified including high spending customers, corporate customers, rewards, and business customers. At this point that premium the analyst says is too high. Take a look at this one, taiwan semi. Can you get any more bearish when you already have a sell rating . Apparently yes. Pacific crest says recent developments lend further support to its sell rating. There are high customer inventories, weakening demands, and nearterm risks. So we are tracking those two stocks today. Coming up next last nights duke wisconsin game just a warmup to tonight where we will unveil the champion of the fast money stock bracket madness. Well take you inside one of the most lavish mansions you have ever seen. Wait until you hear how much it costs. If youre running a business legalzoom has your back. Over the last 10 years weve helped one million Business Owners get started. Visit legalzoom today for the legal help you need to start and run your business. Legalzoom. Legal help is here. You total your brand new car. Nobodys hurt,but there will still be pain. It comes when your Insurance Company says theyll only pay threequarters of what it takes to replace it. What are you supposed to do, drive threequarters of a car . Now if you had a Liberty Mutual new car replacement, youd get your whole car back. I guess they dont want you driving around on three wheels. Smart. New car replacement is just one of the features that come standard with a base Liberty Mutual policy. And for drivers with accident forgivness,rates wont go up due to your first accident. Learn more by calling switch to Liberty Mutual and you can save up to 423. For a free quote today,call Liberty Mutual insurance at see Car Insurance in a whole new light. Liberty mutual insurance. Jacks heart attack didnt come with a warning. Today, his doctor has him on a bayer aspirin regimen to help reduce the risk of another one. If youve had a heart attack be sure to talk to your doctor before your begin an aspirin regimen. There are mansions and then there are mansions. Tonight on secret lives of the super rich were going to take you inside one of the mega mansions that is nine years in the making. It employs 100 workers per day and the doors alone have a price tag that might make your jaw drop. But lets bring in cnbc wealth editor robert frank. Weve teased this enough, it better be spectacular. It is spectacular. Its modeled after versailles and its taken almost as long to build. We take you inside the making of a mega mansion in florida. The workers on this construction site are building the most expensive home in florida. Were used to touring expensive properties, but this is a rare glimpse at what goes into building a beachfront palace thats nine years in the making. Price tag on this mega mansion, 139 million. So are we ready to lift it . And at this royal palace the dollars are in all of the handcrafted details. That forklift is Holding Doors that took one year and more than a half Million Dollars to build. They just arrived from germany. Dont break it. Very few builders can be trusted to handle a project of this caliber but tom murphy is one of them. We have done homes for over 20 billionaires. This isnt the first 11bedroom beach home hes built. Stairs alone cost 2 million bucks. It has a subterranean garage that holds 30 cars. The pool is one of the largest pool in all of florida. It will have an imax theater, the only personal home imax in the world. Cost there 2 million. All together 139 million when its finish easterlyed later this year. Can you really enjoy them . How can you find your dog . I would like to try to enjoy a mansion of that size. I will give it a whirl. Im willing to go there. Melissa, when its done we will go down and try to enjoy it. I think thats a date robert. You wont be able to find each other. It would be like hey Melissa Melissa or is there an intercom. High class problems. Rpp, rich people problem. Super rich people problems. Tune in for a new episode of secret lives for the super rich. Melissa melissa, am i going to win this bracket thing . You might. Tonight we are going to crown the winner of fast money madness and its down to two names, apple versus facebook. Lets look at where the brackets are here. What is at stake, brian . What is this . Trophy. A trophy. Those are handles. Yeah. On the trophy. Are you sure those are handles . So this is brians pick but this is very important, brian. The twitter vote determines the winner so you got to tweet. Im going to tweet you from my 62 different accounts. Go for it. Power lunch is over. Closing bell starts now. Hi and welcome to the closing bell. Im kelly evans down here at the new york Stock Exchange. And im bill griffeth. Happy National Beer day and world health day. That goes together i guess. Celebrating hand in hand. So to speak. Rallying for a Third Straight day here on wall street. The dow is up 72 points. Led higher by energy and biotech stocks today. The big elephant in the room is earnings season. A lot of Analysts Expect it to be a rough one. Coming up we have morgan