Transcripts For CNBC Power Lunch 20150513

Amtrak Train Derailment in philadelphia. At least seven people are known to be dead and dozens are injured. Our very own is in washington and has been watching whats been happening at the scene of the crash. What are you hearing thats the latest at this hour . Mandy, as you say, authorities have increased the death count to seven. Four of the dead were found in the train itself. You can see behind me they are clearing this whole area and to give you a sense of the speed this train was going, two of the people who were killed were found in the area behind me. They were clearing as we speak with cranes and machinery. They will be working throughout the morning. He will be briefing and we may get a few more answers at that time. As you guys know, this is an important corridor up and down the northeast from boston to washington. As many as 2,000 trains travel through this corridor every single day. As we can see, there is a Norfolk Southern train making its way up the tracks and they are able to get the traffic through here but the estimate is if you shut down the northeast corridor you would be looking at 100 million a day in economic impact. Meanwhile, down on capitol hill there is fighting between democrats and republicans and they were by coincidence voting on a measure to increase funding for amtrak. That measure has been rejected this morning and heated comments back and forth from democrats who wanted more funding and republicans who were worried that democrats were using this tragedy for political gain on capitol hill. A tragedy here today in philadelphia. Over the longterm we have an infrastructure problem in the northeast corridor. Economic impacts will continue. No word on when they might get Train Service fully restored. Thank you very much. Lets bring in the president of the National Safety council and former chairman of the National Transportation safety board. Welcome back. Its good to see you even though it appears we have you on these tragic occasions. It sounds that speed may have been a contributing factor in this accident. Does that sound right to you . Its too early to tell what the cause of the crash was, but i think certainly when we see the energy that is involved in a crash like this speed is going to be certainly a high priority for investigators to look at and to make sure that they understand what was going on with that operator and the equipment. Many of us this this newsroom including myself travel this corridor very frequently and was on an amtrak northbound a week ago coming back from washington. High speed trains in europe. My impression is a strong one. Those trains in europe not only move faster but they move more smoothly because the track rail beds are better. Your opinion. Have we neglected our tracks to excess here and could that be a contributing factor not just in this that we have seen . Railroading is a capital intensive industry and requires a great deal of investment. The northeast corridor they have not just track that is highly utilized but the overhead electrification that they have to take care of. Europe made very different decisions with respect to investment in transportation. They have prioritized an intermodal policy and the things that they have done. They are not very close when it comes to that investment in rail we have not done that in the United States. The addressing infrastructure is major. I understand the last crash of this magnitude along the North Eastern corridor was near baltimore in 1987 and that particular accident with safety safety reforms, what would you advocate with new safety reforms right now. For example, should people in the train wear seatbelts . That accident near baltimore, i think you are talking about chase maryland that instigated a lot of changes in the railroading industry and the Transportation Industry as a whole with respect to drug and alcohol testing. They will be being looking to learn any lessons they can from this event. That draws into sharp focus whether its an operating or infrastructure issue that they have to get on top of this. Not just to get to work but to spend time with families. Its commuter trains and thats a lifeline for the northeast. Should trains be equipped with seatbelts . Ysh . Yes or no . A lot of people say they need to be equipped with seatbelts. You have to look at the design and emergencying but in every mode of transportation we have moved to restraints and that is something that can keep people safe and many people said it was because they hit other objects, particularly hard objects within the car. That can help. You have to restrain things like luggage and other hard surfaces that need to be protected. Sounds like a qualified yes from you. Thank you very much. Appreciate it. They certainly save lives and we wear them in cars and trucks and vans. I dont see why not in trains. Lets get to a news alert. We wrapped up an auction on the 10year note. Lets get to the result. You gave us an a. A strong grade. What about today . If you were surprised yesterday, buckle up. Im a tough greater. Considering all the volatility and you can say there has been a back up in yields from the weak retail sales. No matter how you slice it the 24 billion, we pushed it out the door and it was one solid a plus auction. Yield at auction, 2. 237. The trading side which was the bid side of the market to me looked like it was around 2. 255. 2. 72 bid to cover. That all above average. If you look at indirects, they were a whopping 6. 2. The best since christmas of 2011. 21 . The primary dealers took less than 19 of the auction and this was a solid auction. Back to you. A plus sounds solid to me. Lets check out whats happening with the back of the solid 10year auction. The yield on the 10year note is yielding over 3 at 3. 022 . Ty . We are watching shares of du pont. Winning the ninemonth public battle overboard seats with the billionaire investigator, nelson. Down in wilmington mary . Tyler, did you pond has taken on icons including heinz and wendys and won. A different story in wilmington after a 45minute meeting ended a ninemonth very public battle between du pont and one of the largest shareholders. They waged a battle to spur further changes and shareholders of the company sided with management and electing all 12 nominees to the board, rejecting the four. They called the vote close and du pont ceo ellen cullman said she was pleased, but there was more work to be done. The fresh start Cost Cutting Program that they have in place. We asked if the board would consider splitting up the company, something they urged it to do. As we look at it today, that would be value destructive of the company. The higher valley is focusing on driving top line growth and Margin Expansion through innovation and efficiency in the company. During the meeting, she took credit for the changes that were taken in place. They took a stake in march of 2013 including a stock buy back program, the spin off as well as improvements to the board. He suggested he wont be selling his stake in du pont saying they are committed to du ponts longterm success. Near term its the company that can claim victory today. Back to you. Mary thompson it looks like consumers took a break last month. They said that retail sales were run changed. They expected a slight increase. Courtney reagan was with us now. It feels like they have been flat or down for four out of the last five months. You cant blame weather for april. What we had seen is the same store sales were strong and a lot of retails warned us that april may not be as strong because of the shift of the easter holiday. Its not as big as christmas, but it pulls away some spending from april, especially if you are looking at year on year comparisons. Where is the consumer . Not buying a barrel. We talked about active wear and thats popular from millennials to baby boomers every day and for working out. Some of the goods are being sold are not that appealing right now. Maybe they are drinking more. The sales at restaurants and bars was actually okay. Exactly. Maybe they like getting over the terrible weather we had over the winter and console myself. Thank you so much. Tyler. We have a big two hours of power lunch coming your way and we are just getting started. We dig in on a new report with mindboggling numbers on the cost of prescriptions. Plus, the newest battle in housing. Think your computer. More on the California Water wars. We will speak with the ceo of one company that is still bottling water in the droughtstricken state. Dont go anywhere. Power lunch is back after this break. Ameriprise asked people a simple question in retirement, will you have enough money to live life on your terms . I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. Bulldog whats this . Mattress discounters Memorial Day Sale ending . Oh boy a queen size serta mattress and box spring set for just 397. Mattress discounters has the Largest Selection of memory Foam Mattresses under one roof well ill be. Up to 300 off tempurpedic breeze. And wow get up to four years interestfree financing on the entire tempurpedic cloud collection the Memorial Day Sale is ending soon mattress discounters share of delta are getting a nice lift. Increasing diffident to 13. 5 cents a share. It is also announced a new 5 billion Share Repurchase program. Shares of go daddy beating First Quarter expectations. The company, not the shares. Also the company issuing upbeat guidance for the current quarter. Go daddy. Shares of Owens Illinois are sharply higher. The maker is buying mexicos vitro for 2. 15 billion. Thats a lot of bottles. They are the largest supplier of Glass Containers in mexico. Manned he . Who knew. A quick check on the overall markets. Lets take a look at the board behind where you have all ten sectors. So the s p itself is not doing a lot of minutes moving to the upside. Utilities are the biggest lagers and technology is the biggest gaining sector. Lets go down to bob pisani. It feels like we are in a bit of a tight range. Everyone wants to know when we will break out whether its the up or the downside. I feel like over the last six weeks, it is moving two steps forward and two steps back. Groundhog day. You heard rick talking about the tenyear. Yields moved down and that moved the stock market up and that may be the important factor. We moved 30 or 40 points or so as the bond auction came out around 1 00 eastern time. The yields moved down and the dow moved into positive territory. Interest ratesensitive stocks like telecom moving up. Telecom here on the interstay. That was nice. You heard courtney talking about macys and dillards kohls and nordstrom are putting pressure on the market. Traffic is increasing and meter inventories and job growth. We are not getting much about that. Is jcpenney after the close. Sales have been good. We will see. Thats going to be an important one after the close. Bob, thank you very much. Bob pisani. Up next, the battle brewing in housing and we are not talking about bidding wars. We will speak with the ceo who is trying to be the king of online real estate. Later we dig in on a new report with e with staggering new numbers of the cost of prescription pills. Plus up next power pitch. A start up with a sweet tooth. We deliver freshly baked goods on demand. Sorry this idea half baked . I assume you have a strategy. Unless they are doing something truly unique like partnering with a cannibis Delivery Company we will rock you anthem call 1800royal caribbean or your travel agent today its time for the power pitch. We gave one enterprise 60 seconds to convince the panel of experts that his cookie start up is the next big thing. Im daniel com way. Cofounder and ceo of dough bees. We deliver freshly baked goods on demand. Americans today consume more than 50 billion in baked goods and 21 billion in food gifts every year. They want to do this in the most convenient way possible. Whats different about what we are doing is our deep vertical integration. We do everything from production to delivery. With the heavy emphasis on Customer Experience at every touch point. This allows us to be gross margin profitable today and offer an absolutely incredible experience. People are using us every day from Team Meetings to sweet treats to gifts of all occasions. Nearly half of our orders are gifts and we are the fastest way to deliver a goods delivering in 12 minutes on average. We launched in november and have been growing 100 month or monthor beganically. The customers have given us a 77 mps score. Now im hungry. Im mandy drury and you watched to the pitch. Lets meet the panel. With us a lai n bankier is a mentor in technology and food space. They create and acquire foot companies. She advises an and invests in two dozen start ups and in the bay area is stephanie, a principal at soft tech the portfolio includes the on demand delivery service. Great to see you again. We would like to ask the first question. As the consumer i have a lot of options for freshry cooked items delivered to me. I could go to a seamless or a major pizza chain and have a dessert delivered. How are you differentiating yourself . Our biggest differentiators are focused on end to end experience. We were focussed on doing production to delivery. The most obvious way that allows us to deliver in 12 minutes on average. There is no fragmentation between the producer and deliverer. If for example it takes a long time like 40 minutes or an hour do you give a guarantee . We dont give a money back guarantee, but we are high touch customer service. If there is an issue, we provide a credit. You are gross margin profitable, but any company that is not doesnt stay in business. How are you going to scale and maintain the Gross Margins . We think that gross margin is notable because of how early we are. Right now we pay for the kitchen space on an hourly basis. The drivers are contractors. They only work for us. We can implement the same strategy. Our product is one that scales really well in a kitchen versus cooking on stove tops. We can do thousands of cookies in one oven hear hour. The on demand companies are mobile first. Not just another way to order. I assume you have a strategy to go on mobile. Can you talk to me about that . Sure. We went desk top first with mobile responsive because its where the resources lie. Desk top is not close to dead and our hours are 12 00 to 4 00 p. M. When the customers are at the desk in office. We will be raising funds to go mobile. Lets talk about potential legal risks. Why not have a quality guarantee instead of quality . We say 20 minutes or less but we will refund you if there is an issue outside of that. We havent done anything with reckless driving. We are in such dense areas and we place drivers toicater to certain areas, but they dont need to drive recklessly for those time frames. Cookies is something ta people may want to eat all the time, but there is something in their brain saying dont be eating this all the time. How will you build a business and get customers and keep satisfying them in scale and build a base. Personal consumption as well as gifting. As far as an afternoon snack, thats a sweet treat or something for the area. We offer 12 cookies for 22. Six for 12 and three for 8. We heard what daniel had to say and if the panel is in or out. Im concerned about the existing players and those coming into the market. Unless they are doing something unique like partnering with a cannibis Delivery Company, for now, im out. It will be a great business for the enterprises and they will make money at it. I dont think its a great business for the investors. Im out. What about you, steph knoway . The fact that i dont see bakers as being an everyday out, im afraid im out on this. Whats your reaction to the feedback . Its great feedback. I hope yall continue to remain customers and enjoy the cookies. Thank you very much to daniel conway. Also to our panel. That is poedss power pitch. Maybe they can change it to doobies instead of doebys. Are you in or out . You can tweet us your thoughts. Power pitch and for more visit powerlunch. Cnbc. Com. Tyler . Thank you very much. Dont go anywhere. We will talk pills and pigs. New numbers on Prescription Drug costs. That will be the pills. We will serve up a side of bacon. A look at all the pork projects that are greasing up capitol hill. That and more when power lunch returns. At chase, we celebrate Small Businesses every day through programs like mission main street grants. Last years grant recipients are achieving Amazing Things. Carving a name for myself and creating local jobs. Creating more programs for these little bookworms. Bringing a taste of louisiana to the world. At chase, were proud to support our grant recipients and Small Businesses like yours. So you can take the next big step. Strong can heal from miles away. Unite us for a common good. And turn a simple video into endless laughter. Strong can take you. All the way to the summit. Oh my so cool think what strong can do for you. Can i play too . At ts network has the nations strongest 4g lte signal. With xfinity from comcast you can manage your account anytime, anywhere on any device. Just sign into my account to pay bills manage Service Appointments and find answers to your questions. You can even check your connection status on your phone. Now its easier than ever to manage your account. Get started at xfinity. Com myaccount good afternoon, everyone. Heres your cnbc news update at this hour. The wall street journal reporting that the amtrak train involved in a fatal crash last night appears to have been traveling at more than 100 Miles Per Hour as it entered a sharp curve where it derailed outside of philadelphia. The speed limit in that section of the track drops to 50 Miles Per Hour. Seven people were killed and of the 238 persons on board, more than 200 were injured in that crash. Iraqs ministry of defense said a u. S. Led air strike killed isiss second in command. It took place the at martyrs mosque outside of mosul. We could not immediately verify iraqs claims. A navy rescued 400 migrates from the Mediterranean Sea off the coast of libya. They were alerted to four inflatable boats in potential distress. The vatican recked the state of palestine that makes clear the holy sea switched diplomatic relations to the state of palestine. Palestinian president abbas is set to meet the pope on saturday. Thats your cnbc news update this hour. Back to you. Thank you. Lets take a look at video that has just come into the newsroom. You see this for the first time. We are with you. Its security video near the scene of last nights fatal crash of that amtrak train in north philadelphia. The video dark and grainy as you see, but you see explosions flashes. Eight people now confirmed dead. More than 200 injured. The former transportation secretary joins us now on the news line. Welcome. I gather you are involved in an Infrastructure Investment company. I asked debra hirschman sometime ago over the last half hour whether she thought the tracks were in this country. Here answer was basically that we have dramatically under invested in that area compared with europe. Do you agree with that . Europe is the Gold Standard really for high speed rail and Passenger Rail. Even though in europe their trains were developed decades ago. They maintained them very well and they invested in them very well. In china and japan, they developed trains that go over 200 Miles Per Hour. Some 300 miles an hour. Its stateoftheart infrastructure. And we cant brag about that at all. We cant brag about much when it comes to infrastructure in the country right now. We are in a crisis in america when it comes to infrastructure. I dont want to suggest that we have anything approaching an epidemic of these crashes, but this is the third major fatal accident either on metro north or amtrak in recent time. One up failed to negotiate a curve. This one appears to have failed to negotiate a curve. There other accidents, one out on the west coast i believe involving a Southern California light rail train and the stories of tanker cars that have been crashing off the tracks at what seems to be an alarming rate. What does this suggest to you, mr. Secretary . If we are going to have safe Transportation Systems in america, you have to invest in them. You have to keep up with stateoftheart infrastructure. We havent done that. Congress right now is trying to figure out how to fund a limp along go along transportation infrastructure system in america. Our funding mechanisms are broke. There is no vision no leadership in washington to fix it. They are trying to put bandaids and duct tape and other things on these fixes and they simply do not work. We asked her about Something Like a simple low tech precautionary measure like mandating seatbelts for all passengers on trains might be a step that we can take to reduce the level of accidents and injury and obviously fatalities that people suffer in an accident situation like this. Do you advocate seatbelts for trains . I havent thought about it enough. I used the northeast corridor between washington and new york many, many times boarded the train and i think its something that the ntsb should look at and it has been in during their investigation and as a part of their recommendations could recommend that. Dents, our recommendation not on existing buses, but new buss that seatbelts be install and they have been on any new bus. They now have seatbelts. Its a good point that you are making and think its something that dot, the Safety Agency and they should look at. Parsec tear, nbc news confirmed based on information they received involving the trains black box that they were going in excess of 100 miles an hour in an area where the speed decelebrate rates or the posted speed is something between 50 and 55 Miles Per Hour. How does that happen . Is it as simple as the person controlling the train driving too fast as one would drive a car too fast . Why isnt speed regulated more closely. It seems in this era, that wouldnt be that hard to do. Rather than me speculate on that aspect im going to wait until the ntsb comes up with their information and i feel more comfortable on it. There certain rules and regulations that conductors and engineers use with respect to Passenger Rail and at this point i think it would only be speculation on my part to say more. Thank you so much for your help. Appreciate it. Former u. S. Secretary of transportation. Should we move on to gold prices . Why dont we. Closing right now. Lets take a look. We will mine the metals and look at gold up 25 an ounce. Among the other, silver is higher by about 4 . Copper is lower by a little bit. Basically unchanged. Palladium is higher and platinum by 1. 4 . Lets go out to rick who is tracking the bond market. Tyler, this morning we had a weak retail sales and the trashy market as you see did move lower. Its done nothing but firm up even after the volatility you see on the chart. The notion of a trading change is a bit lower. They keep coming back and pushing yields up. You think thats wild look at that twoday chart. Flirting with 140. Last time we were there, we will open up the charts. These markets keep coming back no matter what the data says. This issingo something not lost on traders. Mandy, back to you. Thank you very much. Rick santelli will change in topics. Du pont won the proxy fight and shares of du pont are down sharply today. Sources of telling us that index funds played a key role in all of the boards. He acknowledged that he lost the vote saying he has a clear interest in the longterm success of du pont. He went on to say he did not believe they would hit the 2015 earnings. You can see there, the shares are down by 6 today. Has the out come of the vote changed the outlook for investing . Lets bring in the chief strategist and with us contributor and the chief investment strategist good to see you both. Jim, do you believe this is a turning point for activists after we saw him lose its battle to gain the board seats . I dont know if there is any big statement incorporated. My only take would be that part of the reason they failed is because du pont is a stock. They havent done horribly. They outperformed in 2012. Even now its down slightly for the year in a market that is close to flat. Usually you can get them interested if the stock they own is done miserably terrible. They can vote to try to get new management. This one i think simply was not all that bad to begin with. There was not a great need and a lot of investors make a change. That was a good point. Do you own stocks that are being targeted by activists or have been targeted and what would your advice be to someone who might own a stock in that situation . One, i would ask them not to try to swallow an elephant. This one was too big and it didnt happen. Smaller companies are easier. The market being up makes it tougher, but there plenty of companies that are under manage and in general acts vichl has been winning shareholder votes and hedge funds have been doing well. The activist movement will continue. I would just shop for a little smaller elephant. A little smaller elephant. Lets turn to the bigger picture. I see you are still overweight on equities but largely international. Suddenly europe and most of asia has done better than the u. S. Has. What is your call on what will happen in light of whats happening with the yields . Mandy, i think we turned the corner in the United States. Wooer in a bit of a unique situation. I am expecting a bounce in growth about everywhere due to the drop last year in energy costs and the drop across the globe. Most places thats going to be good. For the United States its at full employment or close to it. Good news is rapidly becoming bad news for wall street. We are starting to see that with bond yields continually backing up. I think we are going to see stocks struggle with that more here in the United States. When you say strilg, do you mean a potential correction . I doyear. I think it will suffer a correction before the year is out. Maybe from somewhat higher levels. We get excited about growth in the interim move up to 2200. I wouldnt be surprised if we see 1900 again. I still like stocks longterm, but i would rather run through this period of turbulence and more so out of the United States in markets that dont face the full employment overheat pressure we are start to see in tightening and i think thats what Bond Investors have caught on to with the rising yield. The turbulence is really the feature of this market. To the first approximatation, the first thing they control is the balance sheet. The only thing it influences is asset prices that have risen faster than the earnings of companies. That has gotten people scared. Its going to come around but until then we will have rising volatility. I would rather own europe than the u. S. Other than the big negative u. S. Surprise in the last three months the buy europe and short the euro worked pretty well. Its off because the dollar has been weak recently. I think it will be back on again. I would rather own europe and short the euro. Short the euro. You are putting in money on the dollar still. Thank you very much to both of you. You think the dollar will decline. Its i different view. You can go to powerlunch. Cnbc. Com. The reason to be more bullish on china. Mortgage applications are down for the week that. One ending may 8th according to the Mortgage Bankers association. That comes after a sharp rise. The average interest on a 30year fixed mortgage increased to 4 from 3. 625 . The applications to refinance are the most sensitive have fallen 16 over the past four weeks. Who said there can be only one disruptor in real estate. When zillow acquired trulia they choired a competitor. Diana acquired a ceo who said they shouldnt on their laurels yet. Realtors midyear conference that thousands of realtors are attending. Diana . Tyler, its the Perfect Place for the first interview with the brandnew ceo of move inc. It was recently performed by the news corp. Thanks so much for joining us. Mr. O harrah . The first time. Tell us. The first time you took the reigns in january, you said you were going quicken the pace of innovation for the online portal. What have you done so far. We have been busy. I take you through a few things. We took advantage of the asset and capabilities to add a great amount of content and data to the site. If you look at realtor. Com, it was broader than four months ago. We have changed the branding and the marketing. Even if look behind me we launched today the new branding which is red and black and more impactful. It denotes what we are as trying to win the category. We added Elizabeth Banks to headline the Marketing Campaign that launches monday. We have been busy. You walked into an epic battle against zillow and trulia. The gloves have come off and they recently referred as a crappy company. How do you compete against Something Like that when you are limited by the realtors listings. You cant do for sale by owner and auctions and how do you compete against them . Would say we are competing well so far. If you look at the first four months, we grew our business 34 in the First Quarter. In april we went up 38 . So we are outpacing the growth by quite a margin and on the mobility side, we think it really works for realtor. Com and it leans for real data and information and knowledge about the market. When we push into mobile we are up 71 and they are not matching that. They cant. You are limited by the realtors and you sued zillow a couple of times. How much is that marking up the innovation if you are focused on lawsuits. We are competing well and we continue to compete. If you look at the battle its a great brand. When people go they engage more deeply. What we find when someone come they see all the things and they stay longer and dig deeper and the uniques and the reach per user is much deeper than on zillow. Another thing i point out, zillow is trying to digest trulia. We beat them in growth in the first three months of the year. We are leaping at them. Thanks so much ryan. The new ceo of move inc. Inc. The new amount that some americans are billed for prescriptions is staggering and getting even bigger. The numbers in two minutess time. Brap that among other factors is helping the shares out today. Up by 21 and lost 40 of the value since the highs last june. More up on power lunch next. Keep it here in two minutes. Blap financial noise financial noise building aircraft, the likes of which the world has never seen. This is what we do. Thats the value of performance. Northrop grumman. A new report is out saying for many of us the cost of prescriptions is staggering. Express script said the number of americans being billed more than 100,000 a year for prescriptions has tripled in the past year alone. Whats driving the cost higher. Its a new drug and special indications. They had more than 50,000 and more than 100,000 people had costs of more than 100,000. That compares with the average spend last year and the top 5 accounted for 61 of the countrys total drug spent. They found that for hockeys with 98 were covered by insurance. The government for medicare and medicate. The study told us they are primarily older men. Three out of five people in the category were baby boomers and slight slightly more than half were men. They tend to have multiple maladies. A third were being treated for at least ten conditions. Cancer and hepatitis c were overrep senlted among the highest cost group. They made efforts to curb spending where they struck a deal from the coverage plans to lower cast. It has been threatening to do the same for cholesterol or cancer. List prices can top 10,000 a month. I am reporting on the cancer conference later this month and expect moves later today. Thats coming up. Back to you. The drop in oil has been devastated for the shale economy. We will talk to the new finance minster and former Natural Resources minster about where shale oil may be headed. Our own jar har wood sitting down for a cause null conversation with Mitch Mcconnell. That interview and more ahead on power lunch. Coming up in the next hour. Was the train going too fast . Investigators were looking for answers. Dozens of companies will release the key tests of cancer drugs today and what stocks and Companies Need to watch. First with the canadian finance minster. What he has to say about oil and Energy Investment also right here in america. Back to you. The citizens against government waste releasing the 2015 congressional pig book a database of the worst appropriation bills of this past year. Half is here with that story. The big book is back. The annual salute to pork barrel spending from citizens against government waste. Think of this as a really twisted version of an earnings report. The number of earmarks down slightly from 2014 109 versus 105 and the total cost jumping by 56 from 2. 7 to 4. 2 billion. Below the record 29 billion back in the 2006 fiscal year. Here are a few of the items that escape the budget cutting act. 120 million to upgrade the 70ton tank that the army doesnt want anymore. More than 2100 of them are parked out in the california desert. 2. 6 million for the denali Infrastructure Commission in alaska a. President obama has been trying to eliminate this program for three years. There is even an inspector generals report recommending the money could be put to better use elsewhere. The report cites nearly 215 million in Medicare Fraud and abuse. The centers for medicare and medicate has the highest reported amount of improper payments of any federal program. A 12 error rate that led to the pay out in 2014 money that should not have been paid out. This last one we couldnt resist. 5 million for abstinence education. Your federal government spend nearly two million on abstinence since 1996. Proof how hard it is for congress to abstain from budgets. Even calls from some members for a return of more budget earmarks which is where this begins in the first place. Back to you. Thank you very much. We are going to hand it over in a second to Brian Sullivan because thats it for the first hour of power. It is. The second hour is starting just now. Over to you. It is 2 00 on wall street. The finance minster was coming up. The tragedy in philadelphia and disturbing reports about the speed of the train at the time of the crash. You are rolling out and we will have them for you. They were shaking off and by all accounts a lousy sales number. The dow was doing fine up 13 points right now. Keep in mind this. Du ponts big drop is a big part of why the dow is only up 13 points. They are a priceweighted index. Many stocks like microsoft and cocacola and intel are lightly higher despite the dow only being up 8 100 of 1 . The big market story recently the big move in bonds and the yield of the 10year is up 16 in one month. Trust me that is a quick move for Interest Rates and certainly, im sorry, bond people bonds can be boring. Dom is here to tell you why the stock investors need to care. Sex it up for us. Bonds, man. I dont think bonds are boring. You and i deal with the markets every day and the bond market is so much bigger. They are james and barry. A lot of stock investors are paying attention to this. Some of these dividendpaying stocks are bond proxies. They tend to move because Interest Rates move. When they move higher the relative attractiveness becomes less so. So we looked at the s p stocks that had the highest yields and maybe good prospects Going Forward to keep that yield in and grow it. We screen the s p 500 that pay above average. And have also shown positive price momentum. Maybe their capital positions are not as bat. Its not like the dividends will get cut. Yields can move if the price changes. The price goes up and the yields go down. Check this out. Fair discloser. Merck shares a big pharma company. Its up not gangbuster but 4 year to date. A 3 diffident yield for this chart. Not too shabby there. If you scroll to the next look here, about a 3. 5 yield goes to the next stock. You take a look at these too. There you go. Mcdonalds. Believe it or not, some people are not high on the stock, but up 4 year to date. Still decent it carries a 3. 5 yield. Heres another one. To mcdonalds point, many people argue if it cant turn itself around to resuming sales growth, it may have to be an annuity where the dividend goes up. You want a reason to buy the stock . It will be the yield. Its because it wont have capital appreciation. It will be whatever is happening there. Thats mcdonalds. A lot is tobacco stocks. Up about 4 year to date. Up nearly 4 . An interesting move and remember for more on the dividend story and more on the safer plays that some may be looking at, go to cnbc cnbc. Com and they screen for better cash position companies and low debt with higher dividend yields and anticipated growth over the next three years. That story is up on cnbc pro right now. I like your tease. We got three names out of you. I try. Shares of du pont are down big after the company defeated billionaire nelson in a proxy fight. Should they be . Joining us once again, they have the yale school of management and both are gentlemen. Its no secret you and nelson had your differences. They engaged in a battle recently. You are a professor now. Do you believe as hard as it is to admit, you ended up losing a proxy fight . He made a big mistake and i never had an months it. He is a philanthropic person and he is one peek younger than paul cartney was late last night. I have no malice towards him. Anyone who raised questions about him including du pont thats not a good way to go. I applaud Ellen Coleman and focus on the facts and not to get into the stories. Karl goes after a company like chesapeake energy. Why we still need nelson. We need activists out there. They under perform and dont go for the strong companies. I salute bill on the show. Thats the reason they had. They had in operations. They had the courage to stand behind a very high character. Thats the issue. Whether you look at the stocks reaction today or the course of time in which he has been involved doesnt the stock say he won this . These are the speculators and shortterm traders clearing out their position. It went up 4 and everyone thought he could get in and break up in three pieces and shut down research and create shortterm value. This is a victory for ellen and a board of directors. Ellen showed enormous courage throughout this process. Staying with it and not compromising and taking ark part the chemistry. She has done all the right things. Everything that any reasonable activist would do. Any turn around. I salute her for what she has done. I wore a green tie and it can be longterm profits. Its also a battle and a victory for all who believe as i do and jeff does in creating the longterm value for shareholders and and employees and customers and your communities. Thats what they are doing so you will see far better longterm appreciation stock thaw believe in. All the great value createors and they are not hedge funds. They invest for the longterm like apple and merck earlier. I think this was a real test for what i called the battle for the corporate america. I couldnt agree more. I know we had to take on personal attacks by being independent and objective voices on this matter. As you respond on the finances. They had 5 falls and oneday falls ten times. It soared past that suggesting that this is a buying opportunity. This could be great to get on board. Guys thank you very much. The good news is that we have an analyst on du pont right now. Is the win good for the stock . They are currently 16 holds and one sell rating. Joining us is mark conley and managing director who is overweight. You upgraded on april 27th and it sounded like it was primarily. Now that lost the vote and doesnt have the nominees to the board. Do you back off and are you concerned that it wont be the outperformer that you anticipated it would be . Our upgrade was in anticipation that they would struggle. This out come is not surprising. Did you pond said it was fantastic and the cost cutting was fantastic. If you read what they said they did a beautiful job of showing if you didnt start in 2008 when the war was ending for a lot of companies, the performance looks lousy. It is simply not real. They are taking credit for money moving from the left pact to the right pocket. This is accounting fiction. Its not quite fraud, but accounting fiction. The stock becomes attractive because they are going to get to put up a large protest vote. You may have seen that ellen did not see this. When they lost big, they were anxious to tell them how big the victory is. They refused to say what happened because my guess is it was close. Quickly, the stock gained what, 38 or so since the time they have been involved . They need to do something to keep them in. Absolutely. Ellen is on the hot seat now. She is one and put two and they will want to see results. She is going to have to deliver results. This is a terrific shareholder. Coming up the latest on the philadelphia amtrak tragedy. New reports about the possible speed of the train coming out. You will not believe this. A Congressional Committee just cutting amtraks funding today. More on both of these stories coming up in a couple of minutes. Stick around. Blap here at td ameritrade, they love innovating. And apparently, they also love stickers. Whats up with these things, victor . We decided to give ourselves stickers for each feature we release. We read about 10,000 suggestions a week to create features that as traders wed want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. Who reads all those . He does. For all the confidence you need. Td ameritrade. You got this. More than 200 injured . The crash near philadelphia. That is the security video near the site of the crash that came into the newsroom. You can see the video is dark and grainy and flashes and explosions. Investigators are looking at excessive speed as a factor. Live in philadelphia the numbers that are coming out about the possible speed of the train set of the crash are staggering. Thats right, brian. You can see from the Security Camera video the three flashes. You can see if you look at it its grainy. One of the cars are goingover the video and what they are saying is that train was going at least 100 Miles Per Hour as it curved into a section of track here in philadelphia. That train going at that speed would have been a very dangerous situation authors are saying here. They are looking at excessive speed as the cause of this. No indication as to why that might have been the case. There were seven dead and two of the people were ejected out of the train. They pulled the car up and brought in water and bulldozers. Its one of the most heavily traveled rails. Its almost 2,000 trains every day active down. Thats just from that decision alone. We have a tragedy and an infrastructure problem in this country. There has been a real fighting over how to fund for that and how to pay and the situation in washington is contenduous as ever. Back to you. Thank you. Get to john harwood with the news alert. Thats what he was referring to. The fight in washington. The House Appropriations committee, 251 million was cut from the budget. To crunch down on and even republicans have come to the conclusion that this has gone about as far as this can go. Neither the ranking democrat blasted the cut which was voted by republicans at a time when amtrak had the safety difficulties highlighted by the accident. Nobody can link this cut obviously to that accident and this is a line you are going to hear from democrats and they will try to restore and push back against the cuts that have been implemented over the last couple of years. Without getting too wonky as they point out these are subject to what they call the ryan murray caps. They come out of the deal from four years ago. From either way, the optics of this are nasty. Thats why i would expect you to see that restored in the wake of an accident like this. When something occurs in the reeld world that dramatizes a move that has been made in politics and that gets reversed if it makes it look bad. Lets get away from the politics for a second. You and i suspect we are frequent train riders. They have gone up in the last 50 . The northeast corridor which is profitable and the rest of the country when you talked to people and talk on capitol hill. Do people acknowledge the struggle that amtrak is in because of the rest of the United States and they reverse that on boston corridor that does make money. There is no question that the difficulty of amtrak as a whole to finance itself and not require subsidies has been a long ongoing issue and there is a huge difference between what happens in the northeast corridor and the rest of the country, with but i dont think that will go. The issue has been going around since you and i have been in this business. Thank you very much. Let us bring in the panel of experts. From cincinnati ctc president has 40 years of experience in the until business and joining us by phone, a railroad imagine and crash investigation expert welcome to power lunch. Reports out there that the train may have been going 100 Miles Per Hour. That would be twice as fast as the track allowed at that point north of philadelphia. Is what you are seeing with the grainy videos and the photographer consistent with the likelihood of greatly excessive speed. I havent had a chance to see the most recent videos but yes, excessive speed will throw cars off the track. Look at the metro north crash december of 2013. The crash in santiago in july of 2013. Both situations were speeding trains going off the track. And i think your other guests can probably speak to the system better but i got my start on the northeast corridor and we had them signalling then. Its supposed to shut the train down if you are overspeeding or miss a signal or whatever. The question comes down to the dollars that have been put into amtrak over the last 40 some ought years. And the money incident why we dont have the signalling system out there. Rick campbell this is your world. Speak to us about what might have happened here. How would the train get to that speed. What would have alerted the conductor or the train system about the speed . What could have been done to prevent the train going this fast around a turn . Well one of the things that we see whenever we investigate an incident like this, different factors that enter into it. Human factors that are a consideration. The system may or may not be a factor right now. Ntsb is digging into that. They are extremely competent in their investigation. Had a lot of experience working with them and know they will determine not only the issues with speed. Was the system functioning and did it function as intended. Was it able to be able to control the train speed at this point or was the system more antiquated and in need of additional upgrades and additional measures. I want to get to that infrastructure issue. I pulled it up with the Commission Report that projected the needs for fiscal years 2014 through 19. The funding needed to replace all basic infrastructure beyond their useful life between all the geographies is estimated to be 21. 1 billion. Are we at a point now where we can spend money and actually upgrade the northeast corridor to the point where things will be from an infrastructure point of view . Think we are at the point where we dont have a choice. The northeast corridor is a key corridor for the United States. Just literally thousands and thousands of people make those trips daily between boston and new york and washington. I have done it myself. I know others have. We have to ton invest in the infrastructure to be able to improve safety. Safety is paramount. The tragedies of course every time we look at cutting back funding we realize something has to suffer and the signal and train control is a very important part of safe railroad operations. This tragedy aside, i dont mean to read documents to tell us about the state of the corridor for years. Almost a decade. I was a daily commuter for my home in new jersey. Sorry about that. Every third day there was a delay, a break down and a problem and amtrak broke down and that may not open. I know i have been hammering the issue for years and delays are one thing. Deaths are an entirely different thick. Should the viewers anded the riders of not just amtrak that owns the rights to the rail and the jersey train has to run over when amtrak is running 30 minutes late, should they feel on the trains . The amount of problems i face and i am speaking for every one of the commuters, all the lines in new jersey transit. Its almost a sickening lack of seeming concern from the organization. Well, i cant really speak to that, but let me put it to you in this context. If a train gets slowed down its because there might be a problem and we put a slow order on it. We are following what penn central called rule 108. When in doubt, pursue the safe course. I would rather slow it down. Unfortunately we have to go. The mayor is starting his News Conference which you must take live. Lets go now to the News Conference in philadelphia. The search operation and there is also a full investigation going on. You saw earlier the National Transportation board whose representatives are here and the personal are on the ground. Any information i give you unless we say that it is confirmed information is still preliminary. There is an active investigation going on at the site. I am joined by pennsylvanias two senators in alphabet cal rt bob casey and senator pat toomey. Chief inspector sullivan is here on behalf of the police department. Commissioner derek sawyer is here on behalf of the fire department. Sam philipps is director of management for the city. The mayor for public safety. The director of communications. We will now announce and i know many of you reported, we will confirm that unfortunately there seven individuals who are deceased as a result of the tragedy from last nights Train Derailment. Again, we have been assisted by amtrak and certainly again i want to express appreciation to the Board Chairman as well as the board member from them. They started the process of notifying next of kin. I do not have any information on names of individuals and im not in a position to release that information in any event and i dont have it anyway. We just took another site visit with our two senators. We have given them a full briefing by all agencies at the table. Letting them know what the role and responsibility is but also we wanted them to express appreciation to both of them for being here. We wanted to make sure we saw the scene as well. First, im going to ask sam philipps to come up and we are trying to get familiess information about their loved ones who may have been on that train and reunionify them and after sam, you will hear from the senators and i will come back with closing information and as we have been doing, try to give you opportunity for questions and answers for anything that we can answer. Sam . As we have been saying all day, we are in the process of reconciling deferral collections of data points and working with the Hospital System and the ems transports. Trying to account for those who we would consider walking wounded and those who were able to walk off the scene last night. Those who did the friends and Relatives Center which was at 3400 frankford avenue and the medical Examiners Office as well. We have made really good progress. We still have folks that we would like to hear from. If you know of somebody who left the scene last night and is have them call into the 1800number. 18005239101. We want to make sure ha that we can account for everybody safely. The friends and Relatives Center has now closed. We have transitioned everything to amtraks Family Assistance Center at the marriott at 12th and market streets. That is open today. Thanks. Before i bring the senators up, let me recognize renee hughes leader of the American Red Cross in philadelphia. Again, one of the partners in any of these efforts want to thank her and American Red Cross and of course the Salvation Army which is also on the ground and very helpful and the great folk s have made contributions to the personnel with water and a variety of other necessary supplies. They are given the work they are doing. Helping them along in their work. First up is bob casey and senator pat team. I will be back. Thank you very much. We are here to offer condolences and our prayers to the families of those who lost loved ones here as well as to remember and offer prayers and support to those who are still recovering and injured. We are going to step away from the press conference from the mayor of philadelphia and others. If they bring developing stories from that we will bring them to you. The mayor did confirm that seven indeed are dead and hundreds more injured. Lets go to the scene live back in philadelphia. Brian, you can think of the investigation in two parts. Mechanical and technical part and the mayor said they recovered the black box of the train and they had a video camera on the front of the train. If that survived they may be able to tell what was going on. Thats the mechanical piece. You have the human piece of this as they try to figure out who was on this train. You know the train traveling is more casual. Were in the dark were in some cases able to get out and get to the train and the cabs and go home. They want to figure out who was on that train and make sure they have been able to account for that. I know we talked about infrastructure for years, but we dont know exactly what standing there was not even a dead leader crash. Nearly 80 killed and a couple hundred injured. This area this part of the track has been the scene of a deadly next the past. Yeah thats right. What officials here have said is the straight away into a very tight curve. There a lot of curves in the northeast corridor. We have a lot of infrastructure and warehouses and factories and residences and rivers and all that to maneuver around. There areas where the trains can go very, very fast in area where they have to slow down and take a tight curve. This is one of the areas they seem to be indicating that that might have played a in this but we just dont know. Two tragedies over the period of 50 or so years. In a similar area. Thank you very much for that. Lets get to check in on the market flash on the train. Melissa, not necessarily anything to do with whats happening with the tragedy in philadelphia. We are keeping it on the stocks because they are an area of interest. They turn around or me lays. Airline stocks are mixed, but the dows transportation is hovering near the worst levels. It is dragged down by among other things road and rail strox some on a downtrend as of late. If you look at shares of union specific and Kansas City Southern which are weaker on the day, transports because of that possibility it could be an indicator on where the marks head Going Forward. It is testing the 200 day moving average. Lets go to the headlines. Here is your cnbc update. Republicans and democrats are expected to announce the deal paving the way for the votes on controversial trade legislation according to a senior democratic aide. Riots that rocked baltimore left 9 million in damage according to the senators office. The preliminary estimate comes from a Small Business Administration Survey of 284 businesses and homes damaged in the protest. Dramatic foodage from nicaragua because of the visitors that found themselves just feet away as it spewed the dark clouds of ash into the sky. So far thankfully no reports of injuries or damage. The red carpet has been rolled out ahead of the citys 68th Film Festival that begins tonight. Locals and tourists have flocked to the city to take part in two weeks of festivities. 19 films will be competing for the top spot. That is your cnbc news update. Back to you, brian. Thank you very much. The oil markets are about to close for the day. Crude oil finishing at 60. 37 a barrel. Down from where it closed yesterday. It is time now for trading nation. Today we are talking and trading gold. Aaron gibs equity chief investment officer. Larry mcdonald and a bit of a rally today for gold. Im not going to make too much of it. Gold has been as i called it a tired old mule this year. Whats your take . The classic gold rally within a bear market. We had 16 of these i think since 2011. Whats really bizarre is the goldminers are up 20 from the march lows. Silver up 11 . The crb up 11 . You have spectacular outperformance getting up near that 200day moving average. Historically since the bear market started, this is where you want to lighten up. Can we move the miners to me. Its simple and what we talked about. Some of them paid diffidents and some of the gold doesnt pay. Exactly. The ratio between the gdx and the gld came to a rich level versus over the last couple of years. If you look at the relationship between the x and the gld, we are at an elevated level versus the last year 1 2. The minor thap gold is not earnings potential. Thats what you track. You advise to give people either the minors or the straight up back up the wheel barrow gold here. I see in the shortterm there is potential for appreciation both in gold and the minors. They are related to Interest Rates and its all about expecting the low dividend yields and they are still looking at gold and the minors as better assets versus the lowyielding bonds. The dollar has been still staying low. We dont see a lot of catalysts for the appreciations that keeps the price of gold low. I do see potential and the very shortterm. They are before september. Thats appreciation. All right, aaron gibbs. For more trading nation head to our website. It is one of the most widely watched cancer conferences in the world. A lot of news breaks and biotech stocks move. Meg terrell is looking at the names to watch after the bell today. Thats right. About 5,000 data sets are at 5 00 p. M. Ahead of this clinical oncology meeting at the end of this month in chicago. 30,000 people from the community go to this meeting. Heres what to watch. The stocks are very, very hot and they have been for years. We are looking at bristolmyers skrib, merck, astrazeneca and juneau. They could be more volatile here. We could see movers there potentially tomorrow morning. Multiple miloma with amgens drug. Should i get data on this as well. In Breast Cancer we are looking at a Small Company that analysts say is a potential take out target that could be volatile. And always pfizer just got a Breast Cancer drug approved. There should be data on that as well as lily. A lot to watch and stocks moving. Thank you so much. Lets bring in this as this data dumps at 5 00. There is so much data its hard to pick just one. They had holdings and we know the titles are already out. We know what to look for across some of our companies. To mek megs point which is juneau competitor. We are excited to see whats going to happen with a lot of things including the large pharmas. I would imagine this is for cartee. What will you be looking for and what other stock might be on the back of the fortunes . Its more juneau. They will have some, but we are looking for proof of principal that there is data that we all expect immunooncology to work in some cancers. Thats really what we will be looking for. We are looking for response rates. You are looking for bristol bristolmyers and there is a joint drug and we have gotten sort of a sneak peek at what a study has shown. It stopped early because it was prison to be effective which was great. We will get the full study. With Something Like bristolmyers, we will look at the safety side of things. We know it works, but is it safe . Also duration of treatment. The longer you can stay on the better. The longer you stay on the more expensive. We will look at the duration of treatment in terms of cost. The shorter duration of treatments, the less it costs. These are going to be an expensive type of treatment. Are these tradeable abstracts. The titles are out. Are we seeing creep in the market in terms of the stock moves . Some people are making directional bets and certainly some hedging going on. Names like puma in which we are not involved either way. I think you will see volatility there. One way or the other, its controversial. Great to see you. Brian . Thank you very much. Meantime backlash against companies bottling water in california. You are going to ask the head of Nestle Waters if his company will stop bottling water. Thats next. 18003452550 [ male announcer ] your love for trading never stops tdd 18003452550 even on the go. Tdd 18003452550 open a schwab account, and you could earn tdd 18003452550 300 commissionfree online trades. Tdd 18003452550 so if you get a trade idea schwab can help you take it on. 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Tdd 18003452550 good. Very good. You see something moving off the shelves and your first thought is to investigate the company. You are type e. Yes, Investment Opportunities can be anywhere. Or not. But you know the difference. E trades bar code scanner. Shorten the distance between intuition and action. E trade opportunity is everywhere. [ male announcer ] at northrop grumman, weve always been at the forefront of advanced electronics. Providing technology to get more detail. 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. Welcome back to power lunch. Senate leader Mitch Mcconnell announced he reached an accommodation with democrats to bring up the bill promotion authority. It represents a triumph for the alliance with president obama. We talked about it in our new speak easy. Inviting us into your hide. It sounds street. Its an extra office. Sorry that not where the shred trade deal gets. Expect that it comes from times when there was something sneaky going on. I would enjoy having kentucky bourbon with Mitch Mcconnell. It hasnt happened yet, but neither of us ruled it out. How would you assess the juice that they have with her ability to halle support against that authority. When these are so obvious is she a great politician. She an effective spokesman for a far left position. Pair think we will find out here. You can see more of the interview, both californias drought front and center not to waste a single drop. The big business of bottled water is coming under attack with many starting to question why water is being bottled at all given the shortage. Chairman of Nestle Waters your company and your industry is under attack right now. Its understandable that everything is scrutinized in a drought. We feel strongly that getting hydrated and using water in specific to hydrate is critical. Bottled water is an efficient means of hydration. The ratios of use versus what goes in your body is an excellent ratio. I can argue that water is an excellent use of hydration. We will have a water shortage in california. Get a glass out of the subboard and put it under the tab and drink the water. Great idea except that it comes out of the package. If you go to another beverage, not water or bottled water will use a lot more water to produce. Whether thats a software all of that takes more to produce. Everybody was going after the al mobt farmers and said whoa, we use a lot of farmers. The strawberry farmer and they went through the stuff about hauch is used to produce beef and how much cattle drink, etc. Other types of products and soda maybe you are not getting their share of the blame . I think the point is we have to stop blaming. For the last month, i have been going to california. You talked to the people who have been here the water experts are frustrated with the single pointing and glaming. Thats not the solutions we neat. There is infrastructure issues that have to take place. We have to redesign how we use water in california. Globally its an issue with climate change. We have to think about water in other ways. The drought brings that to the surface. Productively we have to look forward rather than try to point fingers. Jack johnson said cars on the highway and saying you have to look to Consumer Behavior versus industrial behaviors. How i read that line and im thinking as you walk around california and thats where i grew up and we experienced drought as a kid. Everybody has bottled water. You have a demand for it and how do you meet the concerns and also you are a business. You have a product and a market out there that wants your product. Anybody who touches water in california has to get more efficient. Thats what we are focused on. Looking at the process. In many little ways. Looking to get more efficient. 20 more than we were five years ago and we intend to get more Going Forward. Not just . Water bolting, but the in the food rags as well. Thank you very much for coming on. I know it has been people coming after you a little bit. I appreciate you coming on the program. Speaking of drilling how is canadas Oil Dependent economy doing . We have the first with the minster of the finance with the biggest trading partner. Coming up next. With xfinity from comcast you can manage your account anytime, anywhere on any device. Just sign into my account to pay bills manage Service Appointments and find answers to your questions. You can even check your connection status on your phone. Now its easier than ever to manage your account. Get started at xfinity. Com myaccount two Airline Stocks going very different directions. Dom chus got the market flash. A tale of two Shareholder Capital return programs. Delta first up up around 1. 5, 2 off its best levels after approved 5 billion buyback and partner. And today we had a chance to sit down for a first on cnbc interview with canadian finance minister, joe oliver. I asked by asking how important the price of oil is to the canadian budget and canadian economy. Well energy represents about 19 of our economy, 1. 8 million jobs, and clearly because were on balance and Energy Exporter it does impact on our fiscal framework. When oil fell from a high of 108 down to 44 it clearly had an impact. It affects, first, the provinces who own the resources and its skewed to a few of them, primarily alberta, saskatchewan newfoundland, but it has implications for the it reduces Energy Prices cost of gasoline at the pump which is good for consumers for savings, and it helps Manufacturing Companies and the transport sector because it reduces the cost of energy. Regionally, it results in a bit of a shift and because we have a diversified economy, it isnt devastating impact but it certainly made my budget more challenging when i attempted and succeeded in balancing it. Before you were a finance minister, you were a Natural Resources minister. Right. You knew from by you speak on oil. Were you caught off guard by the repedty in price . I was. Its surprise identifying didnt see forecasts to that effect were talking, as with any commodity, of a supply and demand, and the demand was declining because International Growth has been very disappointing. And supply has increased primarily because of the shale revolution in the United States. So it hit a crossover, and then the decision on the part of the saudis to protect market share, you know really resulted in a collapse. Some of the more bearish out there will say, this decline in the price of oils going to slam everybody but particularly canadian oil and tar sands companies, do you feel that way . Do you hear that from them . Well theres no question that it has impacted a number of employment in that sector. But you know its bounced off the bottom. Im not making predictions but it hit a low of 44. Its now 60. And you know what people will tell you is that the solution to oil low oil prices are low oil prices because it drives out the marginal producer the saudi objective, and it means that demand increases because the cost of energy is down. So that is have had a bit of an impact. You think weve seen a low . That im not going to do. But i will tell you that weve made forecasts for our budget which basically the forecasts of 15 private sector economists, we just take the average, and were using 54 as the number. You know that was based on their projects and futures market. Its gone up from there. But well see what happens. Like the u. S. Canada had a weak First Quarter and the huge debate in america is simple, quuswas the First Quarter transitory due to Different Things and well bounce back or the start of something more ominous . Whats your view on that respected to the canadian economy . We think its transitory. Well have flat growth in the First Quarter but anticipating about 2 nominal growth in the for the entire year and we certainly see the u. S. Actually stronger. So what gives you the optimism about canada and also about the American Economy snapping back . I think there were some temporary issues for, you know theres weather that was part of it. And of course the for canada the decline in the price of oil had an immediate impact. It was a bit it wasnt sharper than we thought, but it was quicker. So because it was quicker, the impact wont be as great in the following three quarters. Thats the view of the economist economists and bank of canada. Thats half of the interview. Were not going to run it all. The other half is on cnbc. Com going up very shortly. All over biotechs with the asco data dump and excluive, the stock is down 6 . Well ask him about that report. That does it for us on power lunch. Closing bell starts after this quick break. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print Amazing Things right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Its time for the your business entrepreneur of the week. Christina and her mother have always been close. So it was only natural that linda started helping christina out when she started her jewelry company. Neither guessed that linda would become the number one employ watch your business 7 30. Afternoon and welcome to closing bell. Kelly evans here at new york stock exchange. And im bill griffeth. A retail sales number that disappointed literally unchanged for the month of april, and thats about what the stock market has been much of this day as well. So were going to follow this last hour of trade here and see if we get a breakout one way or the other. 15 far we havent seen it move from the unchanged. Maybe it will be earnings that give us some catalyst. We certainly have that to look forward to in the next hour. Dow component cisco systems,