Transcripts For CNBC Power Lunch 20150910

Rental homes. Forget about foreclosures, theyre buying new. That could mean a big boost to builders. Diana olick is actually here shes in the house, excuse the pun to explain how it all works. Li, mandy. Love a good pun. Look, it was supposedly a temporary trade. Largescale investors turning foreclosures into singlefamily rentals. Then when home prices recovered, theyd sell the homes and pocket a nice profit. But investors say it is not a trade. A bunchburgeoning new asset class. Theyre now going to new Home Builders buying in bulk to rent. A californiabased publicly traded reit in Single Family rentals has already bought a few hundred homes from builders and its ceo says that is just the beginning. I spoke with him outside one of his new rental near atlanta. You have no reason to sell any of your homes. No. I actually think we are coming into the most compelling three or four years that ive seen since ive been in the business. Ryan says not only is this a promising new frontier for his company, but as this grows, it could finally bring the nations Home Builders back to normal production levels. Were starting to talk to more and more builders and starting to get baltimore and more interest in not just selling us a couple of homes in a development, but talking to bigger builders who want to set up a buying program with us. So where is all this demand coming from . Well, of the 120 million u. S. Households in this nation, just over 44 million are rentals. 27 million are apartments. 15 1 2 millions are singlefamily homes or condos. Singlefamily rentals jumped by over 2 million since the housing crash, thanks to investors buying foreclosures to rent. Over the next three years analysts project 9 million new households but only 5 million newly built homes and that leaves 4 million homes that could be rentals. Diana, thank you. Thank you very much. Lets talk about how investors other ways investors can get into home builder stocks as these rentals surge. Were joined by chief investment strategist at janney stocks. You are a bullish mark on Home Builders. Is the fact, as diana points out, that they are building now to rent not to sell is that one reason why . It certainly is. Obviously it is an incremental one and relatively new one. The fact is we knew that Institutional Investors glommed on to Single Family Residential Housing a couple years ago in the aftermath of the financial crisis, and now were starting to see players like starwood come in and actually buy directly from the Home Builders which is a new phenomenon and i think it is only going to be incrementally helpful to the story line behind the Home Builders which is there is still too little supply being put on the market to meet the demand and thats a good equation for their share prices. When i think of Home Builders and i dont mean to knock them at all i think of their stocks as very cyclical, that they can go up and down a lot with the building cycle, with the Interest Rate cycle. If i wanted to play the boom in rental housing, talk to me a little bit about alternative ways to do it. Two seem to me that maybe i want to buy a reit that owns apartment buildings. Maybe i want to buy some of the apartment large apartment operators as an alternative way in. Yeah, most definitely. Theres clearly precedent to Residential Real Estate Investment Trusts in the form of other property reits, both commercial and apartment as well. We know that vacancy rates in the rental marketplace are at multidecade lows. So the landlords have all the leverage. So participating through the increase in rents that are likely to continue to come as a consequence of household formation in the United States, thats one way to do it. This is a in youer way to do it. There are still only three or four really operators like a starwood thats in this residential singlefamily space but i think it is a nice compliment for an investor, a way to sort of diversify or round out ones portfolio so you arent purely exposed to the cyclicality of the Home Builders and get some distribution through the reit structures. Is a builder oriented etf or housing one that you favor . There are actually several out there. The one that we most like is under the symbol itb. It is an Exchange Traded fund that really is predominantly hosting pure Home Builders as opposed to housing related stocks like home depots, Home Furnishing space. Thats one we think would be best aligned to take advantage of this opportunity. Mark, thank you for the crisp answers. Lets take a look at the big wall here behind me. This is the picture right now for the markets. They are managing to move higher but it was kind of interesting earlier on in trade when we did see not only a narrow range in the first couple of hours but also movement between gains and losses. Right now were moving higher with the dow up by 82 points. If we do see a tripledigit gain though, that would be the 14th tripledigit move in 16 sessions. Hedge fund titan david tepper was on squawk box earlier today talking about this recent market volatility. You might know hes made some pretty bold calls in his time. Let me take you back, september 230 1 2010. He said the feds Asset Purchase Program would be known as the tepper rally. The s p soaring 73 since then. Then may 2013. Tepper urging the foed taed to. But in october of that year, he predicted the fed would not taper for three or four months because of the fiscal cliff budget overhanging washington. Then in may of 2014 he issued a warning to investors say he is not going short but that investors should not be too long right now. In december of last year, he emailed with the squawk gang writing, this year rhymes with 1998. Russia goes bad, easing is coming from europe, what this market called right now . Im not probably as bullish as i could be because i have problems with earnings growth. I have problems with multiples. I have problems with all kinds of problems so i cant really call myself a bull. However, i will say this if you invest today in the stock market and i think people have said, in five years even whether you invested 1,800, they grow 5 a year or Something Like that, you will make money at the end of five years. This is really an individual stock picking moment. Were going to be talking about with a stock picker later on in the show. Lets get a news alert frr sue herera. Strong demand for the 30year auction. The bid to cover ratio was 2. 54 compared to the previous auctions where they averaged about 2. 32 . The indirect bids came in at 66 versus 50 for the recent average. And the 30year direct which bi 7. 4 , little below the average. Lets look on the 10year note on the back of that auction. Lets just hang here. Look who showed up . To take a deeper dive on teppers calls, ron insana is here. Where do you stand on this . Hes been a real bellwether kind of forecaster. Great investor. Whos to quarrel . You make tens of billions of dollars in a single year . Shut up and dance. Right . Listen. I would agree with the longer run forecast for the u. S. Is still positive, that over five years youll make money in stocks. Come on in here, mandy. They send her all over the place. Almost tripped her on her way over here. Amusing would be one way to say it. Unfortunate would be another. But i dont think the market will fall as hard as mandy would have had she tripped by the cable. There is a possibility we thoroughly retest the lows of this move but the market is holding up reasonably well. Your comment earlier this week was that likelihood was thatty in your view the worse owas over, that thousandpoint day and the bungee make may have sort of been that capitulation selling event. In the last week or so we had the big down, then the big rebound. Our processes are not point in time moments. In retrospect they are but you never just sit there and try to call were down 1,000 points, okay, thats it, were all over. Technical damage has to be repaired, fundamental issues have to be resolved. The market hates uncertainty. Theres so much uncertainty still going into the fed decision next week. Do you feel like if they just got it over an done with, say look, were going for a hike, do you think the market would calm down . I think it is less of an issue for the u. S. Than it is for the rest of the world where you have these extensive carry trades undertaken by highly levered players. If rates change here granted, theyve unwound a lot of this around the world and emerging markets in china and other places. I think it exacerbates problems overseas which creates a negative feedback. You see everyone weighing in to the pboc. Larry summers this morning on cnbc saying there is really no reason to do it. I would agree. Why take the risk of restarting this vicious cycle we just went through when we are maybe about to embark on china, and japan easing as well. Tepper saying it is a good time to take some money offer the table right now. Which stocks have held up the best since the market turmoil began . Dominic chu, what have you found . We took a look at the s p 500 and looked at performance since the turmoil lows, closing lows on august 25th. We screened s p 500 members and looked at which ones had positive performance since that october 25th. It is a lot of them. The markets higher, it makes sense. 430 members are higher since august 25th. Now among those, a good chunk of them, 166, have mediumterm relative strength. Theyve held up year to date as well. Among the names, a wide variety of them. Oil refiners on the energy side very much a part of play here. They gain 10 . Since then, 31 year to date. So still gains there. Amazon. Com, up as well during that particular time period. Vulcan materials. Think asphalt, concrete, could be instruction. Up 50 year to date. Cablevision and Newfield Exploration on gas and oil side. It could be a battleground stock whether it comes to oil and gas and those stocks whether they are a buy, sell or hold. Vulcan materials, you bet your asphalt, dom. Thank you very much. Lost bags . I had one on a recent flight. Flight delays, consumer complaints. What is it really like to fly in the u. S. Right now. And the transports getting a nice bounce today. Stocks driving gains in the transports. You are watching cnbc. But you probably knew that, because we are if irs in business worldwide. My name is mark amann. Im a gas service rep for pg e in san jose. As a gas service rep we are basically the ambassador of the company. We make the most contact with the customers on a daily basis. I work handinhand with crews to make sure our gas pipes are safe. My wife and i are both from san jose. My kids and their friends live in this community. Every time i go to a customers house, their children could be friends with my children so its important to me. One of the most rewarding parts of this job is after you help a customer, seeing a smile on their face. Together, were building a better california. Welcome back to power lunch. Im Mary Thompson with breaking news concerning dow component general electric. The company says that its exploring the sale of its ge Asset Management unit to another leading investment firm. This unit has about 115 billion under management and it is separate from ge capital. Remember the finance arm that ge where ge is reducing assets. However, the company says this plan to sell ge Asset Management does align with its plans to reduce the size of its financial business. Ge in a press release saying that it is looking to integrate the Asset Management business into a premier Industry Firm with scale and competitive advantage and that the buyer will should possess considerable experience managing retirement assets. Of course which are included in this. As a note, ge says it will deposit the net sales proceeds into a ge Pension Trust and that there wont be any changes to the pension benefits received by ge pension plan participants as a result of the sale. Once the sale is complete, if it does go through, it is anticipated that the buyer will acquire not only ge Asset Managements assets but also a team of managers that already work there with the exception of a couple who will stay with ge to handle some of the primary investments there. Once again, ge continuing to reduce its financial footprint looking to sell its Asset Management unit to another investment firm. Right now ge shares, as you can see, up just about 9 cents. Now over to dominic chu for a market flash. Thanks for that, Mary Thompson. Wynn resorts, the secondworse performing stock in the s p 500. Susquehanna has cut its outlook citing underground banking and new headwinds for currency devaluation. The analysts also cut wynn and Las Vegas Sands price targets as well but raised mgm citing smaller exposure to some of the ma u coucao gaming market. Lululemon shares tanking 15 . The retailer beating earnings estimates but the companys fullyear forecast fell below expectations. Krispy kreme also getting slammed missing estimates and giving a weaker than expected outlook for the full year, maybe because of sliding international sales. Seagate cutting 1,000 jobs as part of a Restructuring Plan thats about 2 of its workforce globally. The transports get a nice pop this hour and on their way, by the way, to the best week since the end of july. The gains come on the back of some m a action in the sector earlier this week. Truckers involved there. Morgan brennan has some of the big movers. Whats going on, morgan . So transports are outperforming the broader market. This is on Xpo Logistics acquisition of conway. Conway shares are up more than 33 right now but they are not the only stock catching a bid on this news. Other trucking and Logistics Companies are soaring as well. Names like old dominion freight line. Yrc worldwide. Hub group. Echo global logistics. Universal truck load services. Even covenant, westerner enterprises and knight transportation. The conway xpo deal could shore up pricing for the overall sector and more pricing is likely to come. You would think with all of those players out there, a lot of them could eventually merge. Weve seen a number of multibillion dollar deals in that space. Thats why some of these names are up higher than they are today. Speaking of transports, new report card out on the state of the airline business. We get it pretty much every month. Which carriers are doing well, which are failing at the grade. Our phil lebeau knows whos up, whos down, phil . Tyler, it is the usual suspects who did the best in july. Thats the latest ratings coming from the department of transportation. Most ontime flights in the month of july. Hawaii once again at the top of the list as they usually are almost every single month followed by alas today, delta, american and express jet. Which airlines struggled in terms of ontime arrival performance in the month of july . Bottom of the list, spirit, only 68 of its flights on time. Frontier, southwest, united and jetblue. By the way, about 78 of the flights on time in the month of july. When you look at how the month went for travelers, generally speaking it was pretty good. You had fewer bags being mishandled by the airlines. You also had no extended tarmac delays. Though customer complaints were up 31 , but if we take a look at shares of the Airline Index which is had an interesting last two or three weeks given the fact that they were down in large part with the rest of the market, even though when you look at jet fuel prices, tyler, these guys have a great headwind. Watch the earnings coming in the third quarter. Theyre going to be really strong for the airlines. Phil, thank you very much. Growing tensions between big tech and Big Government over the encryption of data. Now the fbi has fired another salvo and well have the fallout on Silicon Valley when we return after this. Youre watching cnbc. Seems like weve hit a road block. That reminds me. Anyone have occasional constipation, diarrhea. Gas, bloating . Yes one Phillips Colon Health probiotic cap each day helps defend against occasional digestive issues. With three types of good bacteria. Live the regular life. Phillips. Hi mim raph. Tom. My name is anne. Im one of the real live attorneys you can talk to through legalzoom. Dont let unanswered legal questions hold you up, because were here, were here, and weve got your back. Legalzoom. Legal help is here. Welcome back to power lunch. Shares of discount retailer dollar tree are hitting their worst levels today down by 3 . Analysts at Credit Suisse counsel graded it from underperform from a prior neutral rating pointing to execution risks pointing to the countrys recent acquisition of rival family dollar. Shares are still down 6 so far this year as well so a lot of pain here for dollar tree shares on this particular day. Lets get a check on how oil is faring in todays trading session. Were currently up by nearly 3 at 45. 46 for wti. We did see crude paring some gains though earlier on after the eia came out with a bigger than expected increase of 2. 6 Million Barrels in crude supply last week and crude has fallen about 3 this week on continued concerns about Global Demand and the supply glut. Today though right now they are rallying. Lets also get a check on the bond market. The 10year note currently yielding 2. 217 . The 30year is 2. 976 . Thats a very quick bond report. Yields up a little, prices down a little. It is the latest salvo in the battle between the Technology Industry and uncle sam. Eamon javers is in d. C. Now to explain. Whats going on, eamon . Tyler, ever since the Edward Snowden revelations theres been real tension between Silicon Valley and the u. S. Government and u. S. Law enforcement over technology and particularly a flashpoint over encryption. Tech Companies Want to sell unbreakable encryption to their customers. The u. S. Government and Law Enforcement worries that means they wont be able to catch the bad guys as quickly. The fbi director james comey was on capitol hill today firing the latest salvo in this ongoing back and forth. He started out by expressly saying he doesnt want this to be a war of words between Silicon Valley and the government. He wants it to be a dialogue. But tlen hen he said this ta listen. There are lots of costs that come with being an american business. Right . You are not allowed to employ children. You cant pollute the environment. We impose a lot of rules on people that other countries dont which is a disadvantage to our companies. Comey would argue he was just making a point here about regulation but i can also tell you that the Silicon Valley companies are not going to like this. They wont like encryption being compared to child labor or pollution or something thats a problem that just needs to be regulated. They see encryption more like a civil right and a privacy role for them to play in the overall world economy. Was his point basically sort of get over it, we have lots of regulations in other fields so this is just analogous to that, and if you want to play business in the United States, youre going to have to go along with it . Yeah, that was. He was asked specifically about the complaint from companies who say if you are going to stop u. S. Companies from selling this encryption, asian competitors are going to sell it and well lose market share. His point is well, we require a lot of things from u. S. Companies that cause them to lose market share like eliminating child labor. Pollution regulations and other things. He sees this as a regulatory fight and that just shows you the totally different mindset that exists in washington and in Silicon Valley. It is a very, very tricky issue. Eamon javers, thanks very much. The major averages this year so nar, the dow down 9 . The s p 500 down 6 . The nasdaq just scratching out some gains. Where are the opportunities . We speak with one fivestar fund manager who is beating the broader markets. The stocks and his sectors right now. Well bring that to you. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Hello, everyone. Im sue herera. Heres your y nbc news update on this hour. The pentagons most security laboratories may have mislabeled samples of potentially infectious plague bacteria according to usa today. The cdc flagged those samples last month at an army lab in maryland. Hillary clinton complaining in ohio as policy continue to show her overall lead over rival Bernie Sanders is narrowing. She hosted supporters pat a women for hillary event. A new quinnipiac poll shows sanders is leading clinton in iowa. Duke energy and the Obama Administration say they are settling a 15yearold legal case over claims the company violated clean air laws at some of its coal fired power plants in north carolina. Duke energy will pay 975,000 fine and spend 4. 4 million in environmental projects. Overseas, british Prime Minister David Cameron welcoming his israeli counterpart benjamin netanyahu. T the two held talks on the nuclear deal with eiran and the syrian crisis. Especially in light of some of the rhetoric coming out of irans Supreme Leader in the last couple of days that he hoped to not see what he saw as a zionist state in the region. Stocks are at their highs of the day here. Lets give you a quick check there on the industrials. Nice little run there. 16,400. 1,960 is the s p 500. I remember 1960. It was a great year. The ntsasdaq composite is at 4,812. I was in first grade. Jackie deangelis is at the nymex. Good afternoon, tyler. We are seeing strength across the board in the metals today probably because of what were seeing in stocks and a little more confidence in the global market. Industrial metals specifically. But also a little bit of a weaker dollar. Having said that, gold got a slight bid today but couldnt finish over 1,110 and that was a very key level for gold. It is on track for its worst quarterly losing streak since 1977. Its been a very difficult trade. All eyes on the fed and potential for a rate hike. Gold traders dont think were going to see it in september but they do know it is coming around the corner. That will probably keep gold down. To chu, nothing but chu. Cnbc market flash. Im going to keep the green positive theme going at least for right now with shares of blackrock up by over 2 . Credit suisse analysts are upgrading the asset manager to outperform from a prior neutral weighting. A nice runup today for blackrock. Stocks at session highs, Mary Thompson at the nyse, Bertha Coombs over at nasdaq. Mary, lets start with you. Are you prepared for the whoopen my uva cavaliers are going to put on the irish on saturday in charlottesville . Theyre shaking in their boots in south bend, tyler. Yeah, should be an interesting game. My irish looked pretty good last saturday against texas. The texas team wasnt looking so good. Not so much. Well be watching of course on saturday. Right now the dow is very close to actually at its highs of the session just crossing that 16,400 mark. Weve seen about a 30, 40point rally in just the past ten minutes or so. Weve seen today a kind of continuation of light volume trading and today on slightly narrower range, about 180 points or so for the Dow Jones Industrial average. Markets are little shaky at the start. Then they picked up steam. Broadbased valley that we are seeing today in the markets as concerns about what the fed is going to do and whats happening in china continue to overshadow trading today. Quick check of the sectors. Were seeing a bid in health care today. Couple of analyst upgrades helping that group. Also biotech looking very strong. Technology getting a boost from strength that were seeing in apple after the presentation that it had yesterday about all its new products and upgrades to current products. Financials also higher as investors look ahead to the fed meeting on wednesday. Will the fed raise rates . Something that would be a positive for the banking sector. Lastly, Telecom Stocks under some pressure again because of what apple is doing as far as looking to kind of overstep some of the wireless carriers and offer financing for its new iphones. Dow movers include apple, merck and pfizer. Pfizer getting an upgrade at jeffries, its top global pick. Walmart under pressure as it says its found material weaknesses in some of its accounting specific to leasing. Markets not under pressure though, up 151 points for the dow. Now to nasdaq and Bertha Coombs. I think virginia yale would be a much better game. It would be interesting but im much more interested in tom brady being back into action tonight. Mary and i do share that, that new england girls really liking the new england team. I know mary is a fan, too. Yeah. Yeah. Mary and i both share that. The team, like the yankees now, though, the yankees and football, the Team Everybody else likes to hate. But no hating on the nasdaq today. The nasdaqs gains very much a big cap rally today fueled by apple and biotechs. Apple responsible for about a quarter of the nasdaq 100s gains today. It is up better than 1. 2 following that Product Launch yesterday. Apple chip suppliers fare mixed though. Skycorks and qualcomm have been higher most of the day but anim analog, lagging. A lot of folks are wondering whether the bond money will be used for yields. The dow and are on track for their biggest weekly gains in eight weeks. Where are the opportunities here . Joining us now, two market strategists. Girl power on the show today. Thank you very much for joining us. Im actually looking forward to next week. Why . Because i feel like it is going to, to a certain degree, settle september once and for all. Right . This is the fed meeting weve all been obsessing over for the longest time. Do you think that meeting will make the market volatility go away, calm down or heat up . I think youre going to continue to have volatility because if they go ahead and do it, maybe it will just be an eighth, maybe it will be a quarter. Then the fact is the market can start obsessing whether or not the fed made a mistake and well watch the twoyear yield to see if the treasury market believes that and if the 10year yield comes down. So in any way, it is almost as if they cant win, as if theyre in a corner around if they dont do it, the market says, well, if not now, when . And everyone knows its never a good time especially in a global economy, to raise rates. She telegraphed early on i want to do this, so she got the volatility that we would get if she surprised the plashtmarkets. Its come early. So it is not going to be easy any way but we got to get it over with because were obsessing way too much. A lot of feel feel weve got to get it over with. Nancy, thats the thing. Right . The financial markets, rightly or wrongly, have become very much the story for the fed. How much do you think they will take into account the recent volatility, not just here but around the globe into their decision making, nancy . I think theyve mandy, nice to see you. I think theyve already done that. Weve seen the financials sell off in response to the fact that the market is handicapping only a 30 chance that the fed is going to raise rates in september. I think what will probably end up happening, the markets just going to make the adjustment and in some ways already has in the bond market. Then as soon as we get through that meeting, well end up fo s focusing on earnings which we hope will be better than the first half of the year. But there are a lot of things that are bothering the market at the moment and i think the fed would be wise to Pay Attention to fed policy and what theyve set already instead of reacting to the latest crisis dujour. A lot of potential headwinds for this coming earnings season. Nancy, what kind of opportunities and individual stocks that been throw up in the recent selloffs . I think if financials, wells fargo. If you are interested in a highquality company thats not really dependent on the strong dollar, which by the way, happens to be our greatest worry which is the effects of the strong dollar on corporate earnings. I think thats an interesting place to like. Theyve raise the dividend every year since 2010. Its accompanied with a lower pe. It sold off recently. And you have the opportunity for focus on domestic earnings. 55 comes the Community Banking division which is all u. S. Based. It is families, small businesses. So i do think the consumer is in good shape. I think thats one of the benefits of low oil. I think financials are an interest i interesting sector to take a look at. Thank you both very much. To all of our viewers and listeners, go to power lunch democrat. Cnbc. Com to see what nancy is buying specifically. I think ive kind of jinxed the market in a good way. I was talking earlier about if the dow had a triple digit gain today that would be the 14th triple digit move in 16 sessions. What have we got . A nice triple digit move. Well be right back. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . This just in 50 million customers data was not compromised this morning in a Security Breach that didnt happen. Wall street. Not rattled. At all. No. Not at all. Not at all. I mean, look at the day. Sir. Sir. What went right . What went right . Everything. Thank you. With threat intelligence, behavioral analytics, and 6000 experts, ibm security will help keep you out of the news. My dads company wasnt hacked today. Cool. Rbc upgrading coach saying it is providesoised for growth. Jeffrimondelez reporting on Cost Management efforts are delivering faster than expected results. The company is also unveiling new growth plans which involve increasing spending on well known brands. Mobbed le mondelez up by 1. 5 . I can see all ten sectors on the s p and moving higher. All ten of them are green, we are near highest levels so far today. Lets dig a little bit deeper, one layer of the onion below those bigger numbers. The s p 500 on an intraday basis now up 21 points. That represents about a 1 gain for the benchmark large cap index. Climbing steady higher as the kind of mid afternoon aprocproas here. Health Care Technology financials all leading the way up by 1 . Some of these laggards are bigger dividend players. Consumer staples, utilities and telecom. Some of the bigger dividend payers, more a tilt toward the defensive nature for those sectors. The bearish case is that stocks are still struggling to find their way from those crisis turmoil, i should say, turmoil lows we saw over the past month or so but the bulls will say at least for now theyd like to see what happens happening with health care, technology and financials leading the way higher because those sectors are the wigge ebiggest in the s p 5. They represent half of all those weightings. In this city, we are talking about the town i just returned from visiting my dear friend brad goode. That would be seattle, washington. I could move to seattle tomorrow. Im telling you, Robert Mcdonald of lake and company real estate. Lets give you some stats. Green lake stats. Median sale price about 485,000. Inventory of nearly 978 Home Properties listed on the market for an average of 23 days. Theyre moving fast in green lake. 8045 interlake avenue, 494,000. Taxes, a modest 4,314. This is a movein ready house. It is in a terrific location in green lake. You can walk to the park, you can walk to all the wonderful amenities that are in this neighborhood thats in the central part of north seattle. This home has been jaap dated in many ways that make it just wonderful to live in. You have a partially finished basement, bright colors in the house, bright hardwood floors. Lovely windows bring in a lot of light from the outside of this treelined street thats out in front. Big sidewalks. Very classic green lake home built in 1940. Just beautiful. Theres lots of light in seattle, folks. You think it rains. We get more rain in new york city per year than they do in seattle. Second listing, 6527 a 4th avenue northeast. Taxes yet to be determined. Whats nice about this one . Its as a collection of newly built modern town houses. A raid yum project in green lake. These are fantastic modern homes with exquisite modern finishes to them. Hydronic heat in the floors. Rooftop decks on every single unit. It is in a good walkable location but these exemplify the style we are seeing in seattle of very nice, modern finished homes and beautiful and a tremendous value, too, in the green Lake Neighborhood. I love, love, love seattle. Lets go to the powerhouse of the week. 2. 4 million. Taxes 16,000. Seven beds, seven full and one threequarter size bathroom. Not sure what that means. Plus nearly 5,700 square feet of living space. My seattle source, robert, says that this is a very nice house priced high for the neighborhood. And you know as well as i do that the general rule of thumb is watch out for buying the swan in a flock of ducklings. What do you say . Well, this is a rare opportunity here, tyler, to own a piece of Washington State history in one of the hottest neighborhoods of seattle. This home was built in 1890 by andrew mcdonald, who went on to be the majority leader in the legislature. He built this victorian home for himself. It was completely remodeled. It has an accessory dwelling unit. What a beauty. The markets catching up to this price point and this price point is becoming much more normative in the green Lake Neighborhood tiparticularly wit historical homes like this. There arent many on green lake drive quite like this one. Robert, save one of these places for me. Im moving, man. I could see you out there on deck. I could see myself out there on the deck. Pretty nice. One Solar Company just unleashed a potential game changer in the solar wars. The stock is up 55 since its ipo this year. Who are we talking about . Well tell you what company it is when we speak with the ceo first on cnbc still ahead. As we head out, a look at some of the most widely held stocks. Apple up almost 3 right now, sitting at 112. 89. Proud of you, son. Ge a manufacturer. Well thats why i dug this out for you. Its your grandpappys hammer and he would have wanted you to have it. It meant a lot to him. Yes, ge makes powerful machines. But ill be writing the code that will allow those machines to share information with each other. Ill be changing the way the world works. interrupting you cant pick it up, can you . Go ahead. He cant lift the hammer. Its okay though youre going to change the world. The drought is affecting at pg e weve definitely put a focus on helping our agricultural customers through the drought. When they do an Energy Efficiency project and save that money they feel it right in their pocket book. Its exciting to help a customer with an Energy Efficiency project because not only are they saving energy but they are saving water. We have a lot of projects at pg e that can help them with that and thats extremely important while were in a drought. Its a win for the customer and its a win for california. Together, were building a better california. Welcome back to power lunch. Weve got some breaking news here with regard to avon products. The shares are currently halted right now for volatility. They were down about 4. 15. They spiked up to 4. 41. This on reports from dow jones citing sources that avon has attracted possibly interest for investment by private equity participants. Dow jones again citing that perhaps others are discussing a deal with avon, according to sources, and that bids for any kind of an avon stake are due out for next week. Again for those sources. Theyre discussing these stake sales with private equity firms again. You can see those shares have just now reopened for trading after about a fiveminute trading halt. Shares were down significantly, now up 3. 5 , 4 on this news. Shares are down 56 on a year to date basis and have lost about 70 of their value over the past 12 months. So apparently maybe we are seeing some private equity interest in avon products. This again is is a report from dow jones citing sources about possible private equity interest in a stake in avon. Up nearly 5 again now that they have avenue started trading again. Stocks hitting session highs this hour among the biggest s p 500 winners. The biggest dow winners apple, merck and pfizer. If you missed any of the big stories over the past hour, go visit us site of powerlunch. Cnbc. Com. Lots of info there. Still ahead, why one fivestar fund manager whos beating the market is betting big on youautos and the consume. And whats moving on the nyse right now . There are the most actives. Lets look at avon as we head out as well. I should point out, by the way, as avon spikes, that 29 of the 30 dow stocks are higher right now. The only one down walmart by just a little. Power lunch is back in two minutes. Heres whats ahead on cnbc with football kicking off tonight, are those bigmoney fantasy leagues real little worth your money or will vegas try to put them out of business . A big sports and money debate ahead. Plus, the worlds seventh biggest economy getting slammed by wall street. Why brazil may be the flash point that you need to focus on. We ask has apple lost a little bit of its wow factor. Wed love to hear your thoughts. Back down to tyler and mandy. Rally on the street right now. The dow up 150 points. Domini chu is looking at some of the bigger movers. Off its best levels, up 160plus points moments ago. The dow industrials up by about a percent. We are near the best levels of the session so far. We just heard sully talk about apple and does it still have the wow factor, today it is the best performing stock in the dow. Up 2. 33 right now. Pfizer and merck, leading the way higher. Utx and walmart are the only two decliners so far. Lets get some fivestar investing advice from someone whos betting on autos and the consumer. Brian, good to see you. I see your fund year to date is flat which doesnt sound great but it is still better than the s p and dow so far this year. Considering tepper said this morning, this is really an individual stock picking moment. What are two stocks that youve recently added to your fund . Well, i believe youre right at the hennessey focus fund, we own about 22 securities. Were very selective in the stocks we pick. Today were interested in a Company Called hexcel and brookfield Asset Management. Hexcel makes xos sicomposite the aerospace industry. We think they have a number of very positive characteristics. For one, it is an ologopolistic structure so it takes a lot of familiarity to be a participant in the Aerospace End market here and hexcel has that along with just two other global competitors. Secondly, the amount of composite content going on to new aircraft, the new boeing 787 or the airbus 350 is magnitudes more than was on the prior versions of those aircraft. So as those aircraft production ramps over the next several years, it is going to pull a lot of revenue through hexcel as hexcel supplies those large manufacturers. Your top holding in the fund is oreilly automotive. Yes. It is. Why do you like it so much . Oreilly is a name weve owned for more than ten years now in the fund and the story has not changed a whole lot over that tenyear period. It is a leading distributor of aftermarket auto parts to retail customers, as well as to commercial customers. And oreilly is the very best at getting parts to those customers in a very timely fashion. And that is a critical competitive distinction that they have versus their large competitors. And versus their small competitors, they have much more buying power. From 4,500 stores today, we think oreilly can grow to 6,500 stores, or so, over the next five or seven years. We can see on the chart there, year to date up 25 with a smooth ride to the up side. That will do it for the first hour all rightee, oreilly. Well take a watch at 1,961 on the s p. The next two hours as theyve been in recent days could be very, very interesting. It could go any way. Brian, over to you. Thank you both very much. It is nearly 2 00 in boston, 11 00 a. M. In phoenix. Good morning out west. The dow is near session highs, apple shares recovering from yesterday. Hi, everybody. No deflategate here on power lunch. We are ready for some football, both real and fantasy. More on that in a bit. But first we need to kick off with Mary Thompson on this growing stock market rally, mary. Oh, and we are looking forward to the football tonight and were also actually embracing this rally that we are seeing here on wall street, brian. Bit of a stutter step for stocks at the open. Mixed data, concerns about china and japan as well. There was weakness in the stocks overseas. What weve seen is the markets rally gained a little steam, helping out of course among sectors is the gains were seeing in Energy Stocks today. Oil is higher despite a build in inventories which is typically bearish for commodity. But the weaker dollar is giving a lift to oil prices as well as Energy Stocks today. Along with health care and technology. The rebound that weve seen in apple, remember apple was not positive yesterday so actually after investors have had some time to kind of digest the news from the presentation, its settled and helping drive tech stocks higher in todays session. Some of the leaders among the s p 500 right now, klatencor, gilead reflecting the strength in semis, as well as biotechs strong today. An aaskurant. Freeport mcmoran continues its run, right now up 4 . The dow is up 168. With us now is ari wald, and kevin curran. Kevin, it was about a month ago, it was a pretty quiet, i almost want to say boring year. But every day now in the past two, three weeks, you have tripledigit moves on dow. To what do you attribute the sudden volatility in stocks . Weve had a really long period of time where youve had very little volatility in the market, youve had a very good move the last several years in equity prices. The s p and dow near record highs. Pulled back a little bit, but ultimately this has been a good ride for investors without a lot of obstacles in the way. Suddenly weve got questions about a strength of a strong dollar which has put some pressure on commodities. Energy, one. Two, you have china and emerging markets. Concerns about global growth. Thats two. Number three, now are you coming into a period of time where the fed may or may not raise Interest Rates. Theres all kinds of uncertainty about Monetary Policy here in the United States. All of that kind of came to a head in the last month. That was the end of the period of restfulness for equity investors. Now we have a little bit of volatility to contend with. Its not really a big deal in the big history of things, the longer history. This is really somewhat normal to have a bit of volatility. Not an unhealthy thing and not to overstate the last couple of days because we are still down about 9 year to date on the dow. In fact, if the stock market closed today, if today was december 31st, this would be the third worst year for the dow since 1977. That aside, do you believe that overall investors perhaps overreacted to china and or the fed . Well, i think so. I think that the market is looking to find a price that makes sense. Here we have a market thats trading about 16 times earnings. The nice thing that we see is that some of the fundamentals here in the United States, not only employment and final demand are going strong and improving, but were also seeing earnings forecasts going higher. If you just value a dollar of earnings, the market is a little bit pricey but not excessively so. And you still have very few places to go around the world with investment dollars. Cash doesnt yield very much, bonds dont yield very much, Treasury Bonds dont kneeled very much. Then of course you look at foreign markets and their growth is suffering so the United States to us still seems to be the best bet. In terms of the market performance, you are expecting this market to be more than 2011 which could mean even if this is a normal correction within an upward trend we could be seeing more days like this, were up 1 , down 1 or 2 , until october . Thats what we think, melissa. I think volatility is here to say. There has been some damage done on this pullback. Were saying it is going to take more than two weeks to stabilize what was an eightmonth breakdown in trend. At a minimum, especially with seasonals weak and a headwind for it the market into october, i think at best this is really a 2011 scenario where we look back at historically its usually two to six months of basefilling required. 2011 was on the lower side. Two months. It only needed, if you remember, very similar to what we had this year. We peaked in may, the big dramatic selloff in august and it wasnt really until october until the market started to get going. Remember there was also that announcement of operation twist. At a minimum we want to see that few months. How are you viewing this pullback that weve seen, ari . Are you ready to see the bull market is dead or is this a normal correction to you within a bull market still . There is a lot of competing forces here. On one hand a lot of the data has swung to the more pessimistic side. I think the spacefilling does take place and we set up for some q4 strength, but i think 2,050 on the s p 500 was the breakdown point. I think were limited there. I think were going to see a lot of sellers coming in to push stocks lower at that point. Sounds like youre saying the jury is out on the bull market on whether it is still alive. You know what . Economic recession or not, it is common for the market to have a cyclical pause even if you arent making the case for an economic recession. I think we can have that indeed over the next few months. I guess, kevin, the bigger global question would be this. With china slowing down, well talk about brazil in the next segment, thats got a world of problems. Europe is still in its recovery mode. Greece not out of the woods yet. Can the u. S. Stock market and economy prosper with all that stuff going on or will it drag us down as well . Well, ultimately its going to be a question of where assets get allocated around the world. Were one of the better places to put assets. If you look at just canada, canadas had two quarters of contraction so technically canada is experiencing a recession. As you mentioned, brazil, argentina, weve got all kinds of problems. When youre allocating assets globally you look at the United States, what do you see . You see an economy thats being a accelerated a stall through q1, well probably grow 2 ish. Thats not so bad. If you look at whats happening to the dollar if you are investing in different currencies around the world, theres all kinds of volatility but the dollars kind ever been the safe haven. So yes, the u. S. Economy can benefit from inflows, investment inflows into our own economy. It could actually accelerate growth here. Thats why were staying with a bias here in the United States, not so much looking to put money overseas just yet, although i would point out that if you look at bearishness in places like emerging markets, lot of bearishness and valuations there are probably worth at least starting to build a list. Because there was few years ago that emerging markets were hot, now theyre cold. You want to start looking at where you might want to be putting some money to work there going forward. Guys, thank you very much. Do appreciate it. Speaking of brazil, that countrys Credit Rating has now fallen back into junk territory. This after s p downgraded the countrys debt rating last night. Let us bring in the chief emerging markets economist with capital economics. Neil, thanks for joining us. Weve talked extensively in this hour about brazil and its problems but heres the bigger question. It is the seventhbiggest economy in the world. It is big. Biggest in latin america. But is brazil alone big enough to cause a global contagion, or is it just itself an isolated story . Im not so sure it is an isolated story so much actually. This is all interlinked with kleins slowdown, lower demand for commodities there and what thats done to brazils export revenues and fiscal revenues. The interesting thing to me is theres nothing new in s ps decision here. Theres nothing new here the market didnt already know. We already knew brazil was in a long road of fiscal problems. The economy is pretty dire, the outlook. We look at gdps. We freaked out, the market did, for years over greece and its sovereign debt crisis. Brazils economy is much, much bigger than greeces. Does greece have the potential to become a sovereign debt crisis of its own . Im not so sure it is going to be a sovereign debt crisis insofar as brazils government defaulting. I think thats going to happen. You do or do not . I dont think it will happen with be no. But i think whats clear is that the glossers come off of not just brazil but the entire latin American Growth story. Only a few years ago people were talking about latin america rivalling asia in terms of growth. Thats not going to happen. As asia has slowed and china has slowed, Commodity Prices have come down. The wheels have really fallen off latin americas countries. It is difficult to really search around for bright spots in latin america. Michelle carusocabrera, we can dither about when this was expected or unexpected, should it have happened months ago other later. Youve been to brazil, studied their economy. They could be in their biggest Economic Contraction in 25 years. What is happening to the brazilian economy . Everything that could go wrong has gone wrong. Right . Theyre commodity dependent. You know whats happened to commodities. Theyve suffered dramatically, falling prices. They bet big on oil. Guess what . Oil prices have fallen dramatically and then theres this horrendous Corruption Scandal engulfing the statecontrolled oil company which has led to complete and political gridlock and it could be that at some point the president could face impeachment. They cant get anything done. They should cut their budget because Congress Wont do what she wants them do. The finance minister nearly resigned in embarrassment because he kept promising that they were going to have budget surplus. Guess what . New budget comes out and theyre going to have deficits instead. I mean its just a mess. Everything thats gone wrong has and they dont have a political will to fix it. In your opinion, having been there, having studied the economy, is there any way brazil can recover if commodities dont. Theyd have to do dramatic things theyd have to bring on some kind of big recession in order to deal with the spending levels that theyll just have to cut dramatically in order to deal with the budget situation as it is and to keep being able to pay their debts. It is going to be tough. They didnt get the world cup boost. Theyve got the olympics next year. Its costing them money. Thank you both very much. Regardless of the economy, brazil is very good at pfutbol but right now lets talk football. There is a lot of money on the line for not only tonights game but for the entire nfl season. I eric, is ball inflation a topic tonight or is that just a wild stab . I think they have moved on from ball inflation. Everyone knows all those psi numbers, 13 1 2, 12 1 2, 14 1 2, whatever that is. Here is a number that you probably dont know. 25 million. Thats how much draft kings spent so far in advertising in september. Thats the number one advertiser in the country. More than ford, geico, at t. Draftkings is one of the biggest players in the fantasy space. This year there is a real big Growth Opportunity to take advantage of all these new daily fantasy player. Draftkings is head kwartquarter boston. Fanduel has a big deal with dan patrick. He is a big sports personality. We spoke to him about what he things the future of the fantasy business is. This business of fantasy will be mentioned in the same breath and at least from an advertising prif in t perspective in the same way that the beef, automaticotiveautomot quick service, those genres are now being mentioned. There is a lot of optimism on how much money people are going to be spending. These are billion dollar companies. Theyre new unicorns and we dont think of them in the likes of uber. But beyond whos going to win the super bowl, it is going to be which of these two companies will end. Being the dominant player in this space. Big article in the wall street journal last night that highlights only 1. 3 of players win 90 of the money. Well see if people stay in or drop out. Eric, enjoy the tough gig at Gillette Stadium tonight. All right . Tell gisele we said hello. Eric chemi. Catch tonights pats steelers game on your local nbc station. A game where everybody will be talking about air pressure. From real football to fantasy football with real money. Dra draftkings and fanduel want your business but it seems likely vegas casinos would like to put them out of business because they are attracting huge dollars from gamers who may have gone to sin city to wager prior. A senior gaming analyst with union gaming, chris, are these fantasy sites at all a threat to Casino Companies . Today i dont think they are a threat. I think from their perspective they want to get a piece of the action in which the fantasy companies are attracting but today i dont think they have any overall threat to the Gaming Business or vegas or the sports book today. If they continue to grow, however, at the rate they are and continue to attract more and more players i think the vegasbased operators are certainly going to want a piece of the action. Chad, is there any indication that the sports book 30something, 20something dudes in these sports books at the wynn and caesars and wherever else are betting less because their money is going to draftkings or fanduel . We havent seen any of this yet but again, football is the most important sport for the sports books out in las vegas. Generally represents between 35 and 45 of their annual revenues. Out of their total revenues at the casino, it is still only 1 . It is a drop in the bucket. But football is the most important thing. They havent seen anything yet because the season kicks off tonight but well see what happens over the first couple weeks. Chris, why wouldnt the casino operators get into this business . Would they be more inclined to buy or build at this point . Do you think that they have any plans right now to sort of test the waters here . I think right now they are a little bit more concerned about the regulatory challenges around it. I think really there are some very significant similarities to this versus the online poker business was shut down by the Justice Department several years ago on black friday. Obviously operators within the draftkings will tell you this is not gaming. I think there are too many similarities in our view to make us believe that there are actually some pretty significant opportunities or potential for them to get shut down by the Justice Department. The thing is the large operators, large casino operators in vegas, dont want to put their existing gaming licenses at risk as weve seen the fallout from the online poker business, we did see sort of the bad actor in a lot of those companies that were operating, essentially getting banned from operating in north america as a result of their actions. Thats true but you got a lot of Media Companies already investing in manduel as welling a draftkings. It wouldnt take much for these casino operators to say well give you a couple Million Dollars dollars and let you advertise in draftkings to get a sports book. Again, it really comes back to the regulatory standpoint. Since the recession, weve phrased it that customers bypass the slot machines and table games and theyve gone towards the night clubs and restaurants and thats one of the reasons why were bullish on mgm resorts in las vegas. So because of the new economic model and because they are making so much from nongaming, which is about 65 of their earnings right now, we think theyre not focused on this because it would be a small piece of the business and again they dont want to risk anything from a regulatory standpoint. There is one company in the space who made a small acquisition for the Number Three Company in the face spind fspac fandual and draftkings. Draftkings ceo Jason Robbins will join me tonight on fast money at 5 00 eastern time right here on cnbc. The big game is tonight so it will be a big night for fantasy football. Yeah. I was just shocked that journal story last night that literally like 1 of people win 90 of the money. You wondz wonder if algorithmic something getting into fantasy. Interesting. Ill ask jason about that. Lot of money on the line so build a Software Program that builds your players for you. Thats going to be great. Thank you. Much more ahead, including more on this late rally in the markets. You are watching cnbc and we are first in business worldwide. First in business worldwide. No algos needed. Im one of the real live attorneys you can talk to through legalzoom. Dont let unanswered legal questions hold you up, because were here, were here, and weve got your back. Legalzoom. Legal help is here. I take prilosec otc each morning for my frequent heartburn. Because it gives me. Zero heartburn prilosec otc. The number 1 doctorrecommended frequent heartburn medicine for 9 straight years. One pill each morning. 24 hours. Zero heartburn. Everyone is looking for ways while to cut expenses. S unique, and thats where pg es Online Business Energy Checkup tool can really help. You can use it to track your Actual Energy use. Find rebates that make equipment upgrades more affordable. Even develop a Customized Energy plan for your company. Think of it as a way to take more control over your operating costs. And yet another Energy Saving opportunity from pg e. Find new ways to save energy and money with pg es Business Energy checkup. Just five months and solaredge went public. The stock is up more than 50 since then. Now the israelibased Company Claims its developed a smaller, lighter and more efficient inverter, could this be a huge leap in Solar Technology . Guy sella, the ceo and cofounder of Solaredge Technology joins us. This new technology is called hd wave and your company is billing it as the most significant leap forward in Inverter Technology in 20 years. Its Pretty Amazing stuff. It is half the weight of the older one, it is more efficient. It is mainly because you use a xlim capacitor instead of an electrolyte capacitor. I dont want to bore people with the specifics but in terms of the investor standpoint, what does this mean for margins and cost reductions for the company . So i think that at first i would like to thank you very much for having us with you. Solaredge invented seven years ago what we believe is the most significant invention in the system behavior of Solar Systems by splitting the functionality of the inverter between the optimizer and the core inverter. Our current inverter is already smaller, lighter and cheaper to produce than other inverters on the market. What we did is last three years, we invented the next generation of this technology basically by reducing the amount not only of the electronic capacitors but all the expensive heavy components replacing them by more advanced faster switching technology with much more Computing Power behind it. This will allow us once we fully ramp up this technology and replace the old generation to keep improving and keep reducing the cost of our technology making solar energy more efficient for years to come. Some analysts aren pointing out this new technology could reduce costs for you. Plus you have an automated factory in hungary that will come fully online at the end of the year. Those two things together should be able to drive margins. What sorts of margin improvements should we expect thanks to the hungary plant as well as this new technology . To ramp up such technologies as fully automated line and this type of inverter which is fully leapfrog compared to what everybodys doing today take you to the four quarters. Once we fully ramp it up, we probably can improve our margins by additional 20 maybe a little bit more, which, by the way, is what we already forecasted in our longterm models when we shared them with analysts. Youve got a lockup expiration outstanding. Have you talked to longerterm shareholders whether or not they plan to sell and whether or not this could be a pressure on the stock in the next couple of weeks . We of course cannot share this type of data but we believe that the majority of the main shareholders will either hold their shares or distributed it to their lps. I would expect that the market adopt itself to what it expected by knowing that they are already three weeks from the lockup period ending date. Guy, well leave it there. Thanks so much for joining us. We do appreciate it. Always great to speak with you, ceo the solaredge, guy sella. One analyst says that a big internet name you know is simply no longer worth your hardearned money. The name and that downgrade ahead. And well take you live to the nymex for if the final trades on oil. Stick around. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . My name is watson. Im helping doctors keep people healthy. Take ted here. Im pulling together data he shared from his wearables, Health Records and family history, so we can analyze it. Hes doing everything right. For the most part. No pain, no gain. You are a beast, ted. My name is watson. How can i help you . Here at td ameritrade, they work wow, that was random. Random . No its all about understanding patterns like the mail guy at 3 12 every day or jerry, getting dumped every third tuesday. This happens every third tuesday. We have Pattern Recognition Technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. For all the confidence you need. Td ameritrade. You got this. Though well below their highs of one year ago, government Interest Rates are up since january by about. 5 . With the fed possibly raising rates either next week or later on this year, is the most obvious path for Mortgage Rates only higher . In other words, should you lock in a low rate right now if youre thinking about it . A chief economist at redfin joins us once again. Mortgage rates are probably a little higher than months ago but some say theyre likely to go higher for here. Whats your outlook for Interest Rates . Well, theyll most certainly rise but the question is when and by how much. And the answer is, it is going to take a while for us to see rates even near 4. 5 . So theres still a substantial amount of time for people looking to lock in at a rate at a very low percentage. Help me understand the market just as a consumer and somebody with a mortgage. You get calls and they say i can offer you this mortgage at this price. I think the 10years gone up, why is that rate still so low . Why is there a lag between the movement of the bond market and Mortgage Rates . Y y you know, Mortgage Rates are decided by a lot things. Probably the least influential actor in the Mortgage Rate scheme is the Federal Reserve which is getting the most attention. But as investors fly to safety, as markets gyrate, rates fluctuate but loan rates dont move in lockstep with the 10year. They never have. There is a lot of pressure from markets, global events, domestic events keeping rates really low. Im glad the fed is not the most important thing for something. Thank goodness. What is most important to Mortgage Rates . Whats important is that they stay low. Theyve been the main factor in the decision of many homeowners to step up into the 2015 housing market. The good news, we expect them to be low for quite some time. I see Mortgage Rates as the biggest and slowest moving story of the year. People are paying allot of attention to them. At the end of the day we just wont see that much change. They wont be that much higher by the end of the year. People dont have to panic and buy a home that you dont really love. First and foremost, never buy a home that you dont really love. Mortgage, yes, should factor into your decision but the good news is they should be low for a long time. There are other factors buyers need to be concerned about. Mortgage rates just happens not to be one of them this year. The headline panic and buy a house tomorrow. Imanticipa im kidding oil bouncing back today bigtime actually despite strong inventory numbers. Jackie d. Is at the nymex. Let me explain what happened today. We just hit new session highs, 46. 04. This is after we got that inventory build. But traders shrugged that off and saw monthly production hit 9. 1 Million Barrels. Remember in june we peaked at 9 b. 6. The eia bringing down its Production Forecast saying we could get to 8. 8 Million Barrels a day by 2016. These are finally some significant numbers that we can believe in and certainly pricing in oil reflecting that. Looks like were going to close under 46. Thats a key technical level but certainly here the momentum is the up side. Also remember globally saudi arabia dropped last month as well, albeit a little bit smaller. You had a weaker dollar today and the strength that we saw in the equity session adding support to crude prices here. The next level to watch is that close over 46. We could possibly reach 48 in the year future. Our next money manager is 90 invested in energy, but he has to be. He is Portfolio Manager of the fourstar morningstar rated tortoise mlp and pipeline fund. Many people consider mlps and pipelines the same. What celebrates Spectra Energy partners from your tenthbiggest holding . We like specter energy. It is our largest natural gas holding in the tortoise mlp and pipeline funds. There is a lot of things to like about it. Number one, where the assets are located. Its got Natural Gas Pipelines that are critical to get growing sly o supply out of marcellus and utica from where we see growing demand from power plants, industrial generation and power centers. So it has nice connective between growing supply and growing demand thats a longterm bull secular story that were seeing for natural gas thats not dependent on crude prices going higher. It is an investment that can do well even if crude prices dont move higher. Again back to crude prices, we dont think they can stay as low as they are for some of the things jackie was talking about. Supply is rolling over, down half a Million Barrels a day, be expected to fall further. Going into 16. And demand is overwhelmingly strong in our country and globally so were seeing consumers respond to these lower prices. I think prices move up but these natural gas stocks can do well even in the lowprice environment. We talk oil so much. At least i do. I just talk so much about everything. But maybe we dont talk enough about natural gas. Natural gas was 12 a unit a couple of years ago. It doesnt look like theres any chance its going to go meanfully higher any time soon. What has happened to natural gas . So producers have perfected, theyve found a lot of natural gas and perfected drilling for it. Technologys gotten better, they understand reservoirs better and they can produce it much cheaper than they historically could thanks to horizontal drilling and hydraulic fracturing. And that has brought down the cost to produce. These producers can make good money at 3 gas, in particular out of marcellus and utica up in the northeast. So production up there has gone from 0 bcf per day up to 20 bcf per day making up nearly onethird of our domestic production. Thanks to low prices, were seeing demand response as well. Power plants are switching from coal to natural gas, thats cleaner burning. They need to do so thats the epa is requiring theres regulations that are requiring them to switch out coal to natural gas. Were seeing a Big Industrial response. We have a huge global advantage over the Global Petrochemical Industry because we have cheap feed stocks for plastics here thanks to low natural gas. There is a real nice bull story on natural gas that a company like Spectra Energy is benefiting from. Is there any company that we know you like spectra. Is there any company thats really in trouble . There anticipate definitely winners and losers in this low oil price environment. We have a pretty highquality approach and have a big team of analysts making sure that we understand the Balance Sheets and the financial forecast for companies and there are some that were worried about. Id rather not mention specific names. I can assure you if we were worried about it, we sold it out of our portfolios. Spectra, williams and magellan. You own magellan personally. I do. Small amounts. But yes. Thanks. Here is the news update at this hour. The white house says is a republicans in Congress Must negotiate with democrats on the countrys budget in order to avoid a government shutdown. White House Press Secretary josh ernest says it is clear they dont have the votes to pass a budget on their own. Hundreds of refugees and migrants continue to cross into macedonia from greece today facing heavy rain and cold weather. About 7,000 people were waiting to cross into macedonia in what greek police said was the singlelargest wave they have seen so far. A new 26 million Visitors Center complex was dedicated in pennsylvania today. At the site where flight 93 crashed during the 9 11 attacks 14 years ago. Flight 93 was the only plane that did not reach its intended target on that fateful day. The British Airways pilot credited with halting a burning airplane from taking off on a las vegas runway says he had only one other flight plan before his retirement. But the pilot tells nbc news it is unlikely he is going to take that flight because he is finished flying. Cant blame him for that. Thats the cnbc news update this hour. Up next gold is about to do something it hasnt done in some 18 years. Well tell you what that is when power lunch returns. Everywhere you look, it strategy is now business strategy. . And a partnership with hp can help you accelerate down a path created by people, technology and ideas. To move your company from what it is now. To what it needs to become. Want bladder leak underwear that try always discreet underwear and wiggle, giggle, swerve and curve. With soft dual leak guard barriers and a discreet fit that hugs your curves. So bladder leaks can feel like no big deal. Get your free pair and valuable coupons at always discreet. Com gold just cant seem to catch a break. It is currently set for its fifth straight down quarter. If that happens, that would be the longest losing streak for gold since 1997. Is there any hope for a turnaround . Let us ask the trading nation team. Thats rich ross today, and larry mcdonald. Larry, first to you. Golds problems. Any sign that it is just going to that these problems are going to end and were going to see gold buyers return en masse . One thing weve learned this year, and even some last year, is that anticipated fed policy is not just about following the u. S. Economy. There is a u. S. Economic component. A Global Economic component and a risk component. If you watched investing legend firstballot hall of Famer David Tepper this morning on cnbc, he this is one of the greatest investors of all time talking about the risk component to fed policy and the risk component to the world, to china and the emerging markets. That tells me there is a rising chance that the fed has to push off a rate hike. The last time the fed pushed out a rate hike the gold miners were up 25 in three months. When we pushed the most of the street was expecting a rate hike in june. They pushed it out to september. And that was very, very helpful if i hear you right, if janet yellen and company shock the world and do nothing this year forget next week do not this year, we could see a rally in gold. Thats what we saw in june. Because when we told us in march that they were going to push it out to june, we saw from march to june the gold miners were up 25 to 30 in two months. Rich ross, looking at the charts, for i dont know four, five years, been pretty ugly, longterm down trend. Any sound of that turning . No. Brian, i have no use for gold at these levels and i would remain a seller here. It is supposed to be a hedge against inflation in a world ever deflation. The socalled currency of fear, yet the vix soared above 50. Stocks are in a global correction and gold is still struggling with the 1,100 level. No, i dont want to be a buyer. Lets go to the charts and ill show you why technicals go from bad to worse. The inability to get back to above the 1900day moving average reinforces that weakness. But zooming out and looking longer term, you can see a really elegant trading strategy which once again points to lower levels here. Look at that hundredweek moving average coursing through the chart. It held from 1,000 to 1,600. The inability to get back above that 100week moving average. Quite simply, i would not buy gold unless you get above that 1,200. Gold is going to 1,000 and theres nothing in the short or longterm chart that tells me otherwise. One of my predictions last year, december 8th, whatever it was, for this year was that gold would end 2015 in triple digits before the decimal. Under 1,000. What chance do i have to be correct . I think you have an 83. 5 chance, brian. Can you be more specific . Brian, the entire street told us multiple times especially at the end of last year the same Technical Analyst told us the same message at the end of last year, and be. January from january 1st to march, the gold miners were up 20 . I agree they are in a bear market, were in a down trend but Technical Analysts have been wrong on gold many, many times. I love your verbal subtweet. A Technical Analyst. More trading nation at tradingnation dot tradingnation. Cnbc. Com. The nasdaq 100 leading this late day market surge. Among top performers, liberty global, gilead and biogen. Power lunch is coming right back, stay tuned. 7. Announcer and now the latest from tradingnation. Cnc. Com and a word from our sponsor. You totalled 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 . 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Time for our daily street talk segment where we dig through the stock recommendations on wall street so you dont have to. Lets go, melissa. Stock number one ebay. Cantor fitzgerald cut the stock to a hold. They introduced a 27 post spinoff price target. Basically no up side. They say post paypal spinoff, the rest of the company is slow growth and the rest of the markets feature is a work in progress. Weve heard this one before, blackrock. Market turmoil has provided a great entry point. Credit suisse was surprised by the magnitude of the stock decline we saw in the recent rout. Same call, hubspot and zen desk. Morgan stanley goes more bullish on both software companies. Upgraded to overweight from equal weight. The target goes to 57. 23 upside. Zendesk starting stays at 28. Pfizer getting a nice boost today. Jeffries moving it to its global top pick list expecting fundamentals and m a to drive up performance. Saying pfizer is better positioned now than ever. It is a top pick list of five. Here is a bonus, the other four. Pfenex. Working on an anthrax vaccine. Everycore says buy. Limited money spent on a deal freeing up money for other use. Pfenex your under the radar small cap name of the day. Up next, the smoke has now cleared on apples big event yesterday. Stock higher today. But has the company lost a bit of its mojo, its wow factor . Well talk about it coming up on power lunch. vo me . I dont just wait for a moment. I watch for the perfect moment. The one nobody else sees. And when i find it i go for it. announcer at scottrade, we share your passion for trading. Thats why we give you the edge, with innovative charting and trading features, plus, powerful mobile apps so youre always connected, wherever you are. Because at scottrade, our passion is to power yours. Can a a subconscious. Mind . A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . Shares of apple fell 2. 5 following wednesdays apple event unveiling new products. The event leaving some wondering if apple lost its wow factor. Dawn, great to have you with us. Some might argue the stock tells us today it doesnt matter if apple has a wow factor. What matters is the sale of the phone and new replacement phone program, its ensuring the upgrade cycle is intact. Excellent observation. Ive been thinking about this question. Apple has not always been the first to introduce a product. Remember way back in the days of the ipod . Apple was not the first to introduce an mp3 player or first to introduce a smart phone even, but what apple does really well is to advance a technology that is in early stages. I think we are beginning to see some of that with a product like apple tv. Apple tv has been out. There are other devices and sets that let you change channels with your voice and some that have applications much like this new version of apple tv has. Apple has a reputation creating a seamless experience to make the new technologies more accessible to a broader market. Maybe that will happen. What was your take of the ipad pro . It seemed like they were cannibalizing sales of macbook air. I think apple is pursuing a couple of goals here. Ipad sales have been slowing the last six quarters. It seems to me not only are people replacing these devices longer term than they might smart phones. As phones get larger and larger, be it feels the smart phones have become a replacement for the tablet. Apple is look for something that differentiate the device from the smart phones we carry every day. Apple is aiming for the enterprise market. They are hoping to get its devices deeply into business. It struck deals, partnerships it will hope to accelerate that. There is the ibm partnership and cisco partnership. A larger device with a keyboard you can buy separately seems to position apple for a market where productivity is more of an element. Lets talk about the pencil. A lot of people are making fun. When i saw it cross my twitter feed i literally thought it was a joke. In terms of the significance of the pencil. Steve jobs said who wants a stylist . He said he wouldnt go to a larger form factor phone which apple now has done. Is this symbolic of the Company Moving beyond that steve jobs er or is it just something in the media we like to pull up because its fun and interesting to see how the company has moved beyond the overwhelming shadow of steve jobs . That is a fair point. Steve jobs was famous saying well never do this. Well never put music on our phone, oh wait. It was true till it wasnt. The stylist was a fun joke for all of us. Apple is revolutionizing the pen. There is a compelling need for some people who want to draw on a device. There is a market for this. Certainly other devices have a stylist, why not . If people want it they can spend 99 and get it. Great to get your perspective. Thank you. Including apples own newton in 1993 had a stylist. The countdown is on what to expect in one week. Clock is ticking, america. Americans. Were living longer than ever. As we age, certain nutrients. Become especially important. From the makers of one a day fiftyplus. New one a day proactive sixtyfive plus. With high potency vitamin b12. And more vitamin d. Its from daddy. Sfx dads voice i love you baby girl. Duracell quantum lasts longer in 99 of devices so you can always be there. Hey hi our cloud its a platform based on awesomeization really . Can it keep our data where it needs to be no matter what country were in . Integrate with our systems to help keep transactions secure . Combine Customer Data with likes, tweets, the weather, to predict trends . That would be awesome. Tote . Now theres a cloud that understands business. Now theres the ibm cloud. The Federal Reserve will definitely raise Interest Rates next week. Dont be silly. They will definitely not raise Interest Rate next thursday for the first time in nine years. Dont be silly. Thats the debate. Here to for this morning, i see you said they will not raise camp. Why the change of heart . With we were one of the last holdouts. Ultimately what it boils down to is the meeting is a week away. There is not a level of conviction among clients and private markets that i think the fed would like to see in order to eventually raise rates. Fair enough. Sharon, whats interesting, everyone is like the stock market volatility is going to crush the fed. What about the bond market . The bond market has been surprisingly sanguine. They have been. I think they have been anticipating this rate increase for so long. Its not here. I dont think theyll move in september. Weve been in october, december camp for quite a while. Looking at the numbers that have come out recently, unemployment, volatility in the equity markets, volatility in the Global Markets gives them ample reason to wait. Will the fed come out with the iphone 7 . Wrong story. Do you think well get a move from the fed either way . I think if they dont move next week, the market is going to be disappointed. Theyve been waiting for this. They want it to happen. But i think what we are going to see is the fed saying that things are not exactly where they want them to be, especially given the lowell of inflation and the potential for deflationary pressures coming from china. They are ample reasons to wait. They still plan to raise rates in 2015. That leaves open october or december. Dan, we left you hanging with one question. Youre my best friend, sir. Ill see you again. Thank you. A love fest. Mobileye down. Well give you the trade at 5 00. Welcome to closing bell. What a show which have today. Im kelly evans at the new york stock exchange. Im bill griffeth. This is the most important hour of the trading day. I saw it on twitter today. We have a rally on our hands in equity today. The dow was up 100. Then back to neutral. Now up 90. S p is up 10. Nasdaq up 35. Oil has been an influential factor in todays trade. Wti oil finishing up,