Transcripts For CNBC Power Lunch 20150916

We start with the equity markets which is moving higher as the fed meets to decide whether or not to begin raising rates. Lets look at the numbers with the dow, the nasdaq and the s p. The nasdaq and the s p are now tracking for their second consecutive week of gains. Something that neither has done in nearly three months. But, ty, the real action here is in the oil market this hour with oil soaring. Wti crude up by 5. 3 . It could still be the biggest daily gain since august 31st when wti jumped nearly 9 . Brent crude, and weve been talking about the spread there narrowing, havent we, ty . But its up by 4 as well. Jack Jackie Deangelis is joining us from the nymex. Lots of people bringing lots of reasons to the table as to why we took off. You tell us what youre hearing. I have three main reasons that were moving higher, a spike like this today, 5. 5 . The first is that bullish eia report. A drawdown in inventories. Cushing down nearly 2 Million Barrels. Refinery runs are going up, and also u. S. Production falling closer to 9. 1 Million Barrels a day. Those imparts weorts were down. The second reason, u. S. Boots on the ground in syria. Special op forces are engaged with the kurds there. The defense officials are saying this is an advise and assist role but anytime we have conflict like that or an issue like that in the middle east, it certainly sends these prices up. Back to you, mandy. Thank you very much for that, jackie. Well keep following that big story because Energy Stocks are one of the reasons why the overall market has been keeping its gains. Dominic chu, give us a market flash. Energy stocks are leading all s p 500 sectors higher. The best of the ten up by 2. 5 so far. Near the highest levels on that jump in oil prices jackie was referring to. The sector is tracking for its best day since august but is still bear market territory. The trend has been down for Energy Stocks. Down over 30 from last years september highs. Exploration and Production Companies are helping to lead the way higher. Youve got names like apache, newfield, chesapeake on the natural gas side, anadarko, up 4 to 5 . 6 out of the top 10 performers in the s p all in the energy sector. Back over to you. Well keep following that. Lets get to bob pisani on the floor of the stock exchange. The important thing is we are continuing our trend of moving up the day before a fed meeting. Yesterday we had people front running that, happening again today. We moved up going into the european close but particularly after the Energy Reports came out, and i think thats a significant factor in why the markets moved to the upside. Everybody wants to any if the fed is going to hike or not. I dont know i just look at the market and here is what i see on this fed hike question, yes or no. Stocks are up, gold and commodities are up, the dollar is down, banks, which are Interest Rate sensitive are generally mixed but to the downside, and the vix, the volatility index is in a down trend. All this would suggest is the market is not expecting a rate hike or if it is its certainly a de minimis one. Dominick is right about oil moving things around. Continental resources, you can see right after the reports came out around 10 30, those stocks moving to the upside. Back to you. All right, bob. Thank you very much. It is, of course, t minus one day until that much anticipated decision. Policymakers kick off their meeting today. Where do the nations top money managers, investment strategists, and economists starnd on the possibility of a rate hike tomorrow . Steve liesman asked them and hes here with the results of the exclusive cnbc fed survey. Big news in this survey today. We have for the first time in the five years weve been doing this a plurality of respondents think the fed will raise in the meeting that is in the month of the survey. 49 , up changed from august, think they will hike in september. 43 say no, and you have 8 dont know. Its a very, very close call with a plurality saying, yes, it happens. Lets look at the broader time line and what you see here, thats not thats the time clock, not the time line. Theres the time line. Well done, guys. What you see when you look at this is ultimately that they have pushed back, in other words sooner, the whole policy outlook here. They said they were going to hike rates january 16. When everybody was all upset and anxious about the chinese slowdown and the market volatility. The average is november 2015, what we showed you earlier was the median of september. I guess its not really working all that great. What i can tell you is the Balance Sheet, september 2016, thats been pulled back. Decline in august, i believe. And the terminal rate over here, Third Quarter, 2018, now it is First Quarter 2018. So everybody happens a little sooner. What they had done is pushed everything ahead because of the concern. Want to show you one other chart here which is the fed funds path, and looking at 0. 37 for a fed funds rate at the end of the year. 1. 17. But when you take a wide view of this, take a look at whats happened. The original forecast for 2016 when we first asked this in august of 14 was 2 . Almost 100 basis points or 80 basis points has been dialed out of Market Expectations for the fed funds rate. Art hogan says the fed may well do the right thing, raise rates in september at the wrong time and still not move markets much as we have been pricing in this move for a while. John has been steadfast throughout says there is no justification based on the feds data dependenciy for keeping rates at zero. Mandy, all this stuff is online, the full survey and an article ive written, cnbc. Com. As a veteran fed watcher what do you personally think . I think they dont do it. I think its a close call but they would rather markets be less volatile and i dont think they kneesly laid the groundwork. Will i be surprised if they do it . No, but thats playing both sides, i know. Always good to play both sides. A brock buster deal is dealing with anheuserbusch working on a takeover for sab miller. Shares of both companies are soaring. Anheuser is up by 8 . David faber is here with details. A lot of hurdles for this still to happen though, right, david . That is true, mandy. It would, of course, be one of the largest deals of all time if it did. There has been no shortage of speculation about this possibility for years. But this morning the clock did actually begin to tick, if you will, on budweiser making this bid for sab when sab came out with a press release saying they had been contacted. Under uk takeover law, 28 days is all they have unless it is extended by sab in which to make the formal bid for the company. Budweiser has said we are only going to move ahead if we get a recommended deal. Meaning theyre not going to make a hostile bid. It will be one that the board of sab feels is appropriate, and it will move ahead after that. Now, the key for sab may be very well focused on its two largest shareholders, altri, which owns 27 and the Santa Domingo company who own 14 . They have a significant board representation as well. They may all be represented by the same banker, something of a positive sign if youre budweiser. While they have 28 years, its been years they have been thinking about this, so one would think they are able to move fairly quickly with the proposal. That said, there are no shortage of things they have to go through, including hitting the financing markets for an enormous sum of money that could approach 50 billion or 60 billion pounds. They also have to put a bid in there that sab is willing is accept and that the Santa Domingos and altrias is willing to accept. Do they want more stock in their deal to make it more taxfree. The more cash there is for bud, the more accretive the deal will be. Analysts think it will be accretive at a 70 30 or even 60 40 split. Its not just sab, its not just bud, its not just altri. Look at the tap, molson coors. 50 of a joint venture they have to sell miller in the United States is owned by sab. Under that deal there is no doubt that would have to be divested. The expectation is molson coors would buy the 50 . It does need to happen if this deal is to go forward. It doesnt mean they have to announce and get all these investments done in 28 days or 56 days, but they certainly start to have to put the wheels in motion for all of that to happen. So to your point, mandy, certainly many things that will have to occur here, but the odds of success here do appear to be higher than you might expect because bud has been at it for a long time thinking about it. The financing markets are at least in its favor right now, perhaps it wants to move before rates really move in a significant way higher. And one would expect given altrias decision to take itself out of a conference, it at least has some sense as to what the proposal will look like. It has said in the last year it would be open to potentially selling that stake in sab though it has also said its perfectly happy to remain a large shareholder in that company. Its going to be interesting 28 days or maybe a little bit more. Back to you. Plenty of beers could be downed in that time. David, thank you very much. Shares of fed ex taking a big hit right now. Lets look at the chart of fed ex. The Parcel Delivery giant missing earnings estimates. Down 4. 5 or thereabouts cutting its outlook. Why are we focusing on fed ex . Why not. Its widely seen as a barometer of the economy. Morgan brennan is here with more. It certainly is seen as a barometer of the economy. Like we have seen throughout the transport sector, fed exs business is catering to businesses doing well. First quarter earnings at fed ex increasing 20 , but it still fell short of estimates. The delivery giant also trimming its full year eps guidance on weakening conditions, and a one time expense in its ground domestic unit. Heading into the holidays, executives saying they expect another record peak season. Theyre planning to high upward of 55,000 seasonal workers, 10 more than 2014. Also discussing rate increases including a new surcharge on oversized ground packages that will take effect in november. This is executives say companies are electing to ship these packages rather than handle them in their own stores. If you look at shares of fed ex, they are down as you mentioned about 4. 5 . Down about 15 so far on the year on that earnings miss, on that lowered guidance. Take a look at shares of competitor u. P. S. , thats trading lower, down 1 in sympathy as well. Sympathy, i like that, its nice companies have that, or stocks. Two big readings on the health of housing if the fed raises rates. Will home buying take a hit . Plus, under armour shares hitting new highs. They got brady, they got spieth, they got it going on. Ceo kevin plank will join us exclusively to lay out his growth plan. Youre watching cnbc, first in business worldwide. Plus, under armour shares oh, look. We have a bunch of. Announcer babies who are talked to from the time theyre born are more likely to have a successful future. Talking and reading to children in their first years has a huge impact on what they do with the rest of their lives. The fewer words they hear, the greater their chances of dropping out of school and getting into trouble. Talk. Read. Sing. Your words have the power to shape their world. Learn more at first5california. Com parents welcome back to power lunch. Lets get a check on gold prices. Right now up by nearly 2 , 1,122 the last trade there. Coming off the highs of the day right now, but still up by about, again, that decent mark, nearly 2 on that data showing a surprise drop in u. S. Inflation last month thats helping that case here. Gold miners are rising on that bit of news, perhaps the fed doesnt raise rates. The market investigatoe if yu look at some of the components, all up. Gold miners certainly a focus but the gold miners and gold prices have been in a relative down trend. Back over to you, ty. Two important readings on the health of housing on this fed day. Diana olick has it covered for us in washington. Di . We saw a pretty steep drop in Mortgage Applications last week. Both applications to refinance and to purchase a home even though Mortgage Rates really didnt move that much. Refis took the hit the worst as they are most rate sensitive. Rates are slightly higher than they have been but not really a lot higher. We got home Builder Sentiment for september, up one point. Confidence is still gaining steadily but interesting, the one part of the survey that was down was the sales expectations over the next six months. You ask if all this changes if the fed raises rates . Well, the fed does not directly correlate to higher Mortgage Rates but it does open the door for lenders to raise rates. For Home Builders it wont be a huge issue. It could have a bigger effect on mortgage refinances which as we said are incredibly rate sensitive. More on realty check. Cnbc. Com. If the fed does raise rate, what direct impact will it have on the Housing Market whether its refinancing or new applications . Red fins chief economist Nela Richardson joins us. When we try to answer that question, first of all, have you heard any Mortgage Brokers voice concern about a potential rate rise . Have you heard potential home buyers voice concern over that . Well, whatever happens tomorrow, one thing is concern, home buyers will react differently than traders. Home buyers dont think in basis points, they think in babies. They want to start families. Thats why they purchase homes, or they want to move to a new location. What we have heard across the board is buyers will carry on and hopefully theyll find a loan. Thats the key problem. Credit availability, that they will be able to obtain a mortgage to make that home purchase. Not necessarily the rate. Whats Credit Availability looking like now . Its getting better. Its not great. Its still really hard for a lot of people to get mortgages, especially if you dont have pristine credit. Thats the thing, thats the key factor thats driving the markets now. It doesnt matter how low the Interest Rate is, if you cant get a mortgage, you cant get a mortgage. Thats what people are more concerned about rather than whether its 3. 9 or 4. 1 for the 30year fixed. Can we extrapolate what level would rates have to rise to before you would see significant restriction. We surveyed home buyers and we found that 85 of those surveyed said they would carry on with their home purchase plans even if rates topped 5 . Thats significant. It tells you what the state of the home buyer mind is. We are not talking about people who are making a trading decision in the near term. Theyre making life decisions over the long term and no bump up in rates are going to derail that for most home buyers. Nela, great to talk to you. Thank you for setting the record straight. Ty, over to you. Still ahead, under arm youre me meeting with investors today. The stock up 50 so far this year. Thats a lot better than its arch rival nikcle. Whats ahead for the athletic giant . 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Meta is clinically proven to help lower cholesterol. Try meta today. And for a tasty heart healthy snack, try a meta health bar. Stocks continue to edge higher as the fed meets to debate rates. The dow is up more than 100 points this afternoon. S p gaining as well. Now, less than 7 from its may high. Our next guest is wally walker, the president and founder of hannah road capital. Up for the year unlike a lot of long short equity funds. Wally, welcome back. Good to be here. Lets talk a little bit about the fed. Would you just like to see them do something to get it over with . I would like to put it in the Rearview Mirror. I think the markets will do what theyre going to and im set up for either reaction but i think to put it in the Rearview Mirror is the best thing. Do you think they need to raise Interest Rates . I have no idea what theyre going to do. My main concern is if anyone would Pay Attention to my fed. Maybe i have been on the other coast for too long, but the 25 basis point increase is lost on me. I know you get to go to d. C. Which is a good thing. I think the ongoing cycle and trend are much more important. Were all about fueling the sturm and drang. Lets talk about your position. Were 45 net long. What would make you change one way or another and how would you do it . Im kind of hoping for a big dislocation tomorrow. I dont know what to expect, but i will increase my exposure if we get a big selloff and do the converse if the opposite happens. Right. So lets talk a little bit about positions in your fund. You have a lot of Small Cap Companies in there. You also have big ones like the disneys and so on and so forth. Give me an example, and i know that you hold a lot of positions for a long time. You trade around the margins, but you have some that youve owned for years. Give me a classic walker position. Well, a company i just visited called atlas financial. Youre listeners wouldnt have heard of it. Its a small Insurance Company based outside of chicago. They have guided this year at 30 to 50 revenue growth. They have guided that. You dont see many of those. No. Theyre guiding to a return on equity in the high teens to low 20s. If they do that and the return on equity is in the low to mid teens, theyre going to earn somewhere 2 bucks, i think even more next year. The stock is trading 17 plus. Very cheap with a growth aspect to it. Lets talk about how more broadly speaking you see the market as set up for the remainder of this year, no matter what the fed does. Give me your thoughts there and what are the things that are on the horizon that worry you or that youll be watching in the fourth quarter. Politic this is washington are always a concern. Government shutdown. Once we get through tomorrow everyone will focus to the end of the monday and well see what happens there. I think were pretty well set up towards the end of the year because were going to have a race amongst people in my business to try to outperform, particularly if they havent yeartodate or maybe even most as you point out have not. China worries me. When jim cha knows was on cnbc recently and i know jim from 25 years ago, i think we looked about the same 25 years ago. What happened to us . What did happen . Were here though. And when he says, i know how thorough he said, however bad you think china is, its worse, that gives me pause. And the fact you cant trust the data. We dont know how bad it could be and now were more interdependent economies than weve ever been. If its worse and much worse than we think it is, it will effectwally played in the nba, time champion, ran the supersonics. I cant leave without asking your opinion. Is it lebrons years . The finals last year were among the most entertaining. Cleveland will be good but to beat the warriors who are not only great but as much fun to watch as i remember in a while, going to be very difficult. The west is very tough. Im not as current i once was. Well, you have done something else. You have done hana road capital. To the bond market now and rick santelli. Rick, whats happening today after that eyebrowraising move higher in yields yesterday . Well, traders have mores a pen look at a one and two day of 10s. Yesterday we had the pop. Today distribution mode but whats noteworthy is we havent given anything back. Its not only the long end. Look at the oneyear bill which we auctioned off yesterday, a 5year chart. This is really a telling chart as well as the market prepares for normalization. Foreign exchange, a lot of talk about the level of the dollar in the fed. It had a tie on march 13th when it starts but hasnt gone anywhere. But look at the trade weighted dollar on the chart starting the same day. You can see it shows a lot more horse power. Want to Pay Attention to both. Thank you very much, rick. Under armour meeting with investors. The stock hitting new highs this year. Soaring about 50 this year. Easily outperforming nike, so can the athletic upstart just keep on doing it . Under armour kevin plank joins us exclusively with his growth plan. That is next. Do stay with us here on power lunch. Why should over two hundred years of citi history matter to you . Well, because it tells us something powerful about progress that whether times are good or bad, innovators with great ideas will continue to drive the world forward. As log as they have someone to believe in them. For more than two centuries weve helped progress makers turn their ideas into reality. And the next great idea could be yours. Hello, im sue herera. Here is your cnbc news update at this hour. Centcom commander general lloyd austin telling the Senate Armed Services committee that special Operations Forces are on the ground in syria. He did not elaborate. Defense officials telling nbc news that u. S. Special Operations Forces are assisting Kurdish Forces in their fight against isis in northern syria. Secretary of state john kerry says russia has proposed military to military talks with the u. S. On syria. He says he is discussing with the white house and the pentagon on the next steps in order to determine the best way forward. Dozens of left wing students in the philippines hurling paint at the seal of the American Embassy in manila to protest the u. S. Military presence in that country. Riot police disbursing the students but they stormed past a Police Barricade after dawn. At least six people were arrested. And pope francis says hes looking forward to his visit to the u. S. With, quote, great hope. He made the comment during his vehic weekly audience. The pontiff will deliver only 4 of the 18 addresses in the u. S. In english. The rest will be in his native spanish. Back to you guys, ty and mandy. Thank you very much. Lets take a look at the gold prices right now which are currently closing. Brick sitting there up by 1. 5 . 1,119. We saw earlier the gold miners are rising nicely on the back of that move. Silver, copper, pa laid yum, and platinum are all moving higher as well and the dollar is on the back foot which helps. Tyler, over to you. The dow up about 95 points right now. Stocks higher generally on this fed day. Lets get todays trading action from bob pisani at the floor of the new york stock exchange. Were about to break out of an interesting range weve been in recently. August 24, 25 lows, we are now on the verge of breaking past thoughs l those lows. Right now the s p 500 up a little more than 0. 5 . Thats right in track for the regular rally we see ahead of the fomc meeting. The s p is up an average 0. 49 . Well see that move likely happen today again once again. So big discussion here about how much influence the fed has, and, guys, the important thing is 80 of annual excess stock returns in the United States occur on those eight fomc days, and this is the 24 hours before it. So, guys, very important move here and were on track for that rally. Back to you. Thank you very much. Lets go uptown to nasdaq and bertha coombs. Hi, tyler. Were also seeing the rally at the nasdaq. Whats interesting is the small caps, russell 2000 are up more than the nasdaq which is only up 0. 3 . But its really the nasdaq 100 thats doing very well. The nasdaq is up about 2 for the month, but the large cap nasdaq 100 is within half a percent of breaking even for the quarter, one of the few indexes that is. Apple is not really part of that rally, and apple has not contributed to that move when it comes to the quarterly increase. Ios 9 mobile system is being released today on time, but apple operating system update has been postponed because of a bug. Thank you very much, bertha. Lets move on and talk about what investors should be doing. Joining us, christina hooper, u. S. Investment strategist and ury landis. Christina, we were speaking with another guest and he was saying he just wants to put it in the Rearview Mirror. Even kuroda was saying it would be a good thing, it would Show Confidence in the u. S. Economy. Do you agree we just need to get this over and done with . Yes. But we also need to recognize that its been almost a decade since we raised rates and in that time its been an extraordinary set of circumstances. Weve lived through unconventional monetary policy, qe, 1, 2, and 3. So dont be surprised to see the fed move tomorrow but perhaps only move 12. 5 basis points. Just like a token, a little symbol saying were getting the process started. Were getting the process start. We dont want to rock markets but we need to move. We should have moved already and we need to. Do you think theres the potential for a little irony in play, that if they dont move and we see low rates for much longer, that maybe the market will start to think, hang on, what does that say about the Growth Outlook and that could be bad for risky assets . Absolutely. We think that the shortterm reaction to not moving might be positive but over the ensuing weeks and months could be very negative because its not a vote of confidence in the economy. Whats your view on all of this . Well, i think theyll probably raise 25 tomorrow but give an indication before they do more they really need to need more data. I dont know if well get another raise the rest of the year. They kind of know they have to do it. China gives them an excuse to be their usual dovish selves. I think we will see something but some very tame language coming out of it and i dont think markets will move much. Does it change anything in tirn terms of your zrat ji . Not really. I dont think the fed is going to do something way outside the realm of expectation and, therefore, its really going to be i think a stock pickers market the rest of the year. Just very quickly, energy is up 1. 8 as a sector today and certainly crude itself i think is up by over 5 . Do you like energy, but a lot of people have been burned trying to pick a bottom but do you think now is a reasonable time to get in . I think its a good time to get in because theres so much bad news out there. You have the opec minister saying we better get used to this for years. To me its the kind of gloom saying that goes right before buying opportunities. So, you know, you have to be a little bit bold to do it right now and be a little patient, but i think over time energy works higher. Okay. What about you sector wise . Technology. Technology is historically done well during rate hike cycles. We see more opportunity than ever before. We have solid Growth Potential there, valuations look relatively attractive. Its a good place for investors to go. Thank you very much to both of you for joining us today. And you can go to powerlunch. Cnbc. Com to see what could signal the end of the bull market. Thats all on powerlunch. Cnbc. Com. Under armour stock on the fast track so far this year, up 50 leaving nike far behind. So whats next for under armour . Well ask the man in charge. Our exclusive interview with the ceo of ua kevin plank. That is straight ahead. The cnbc Trend Tracker data board is brought to you by the cme group. Im watson. And today hundreds of companies are putting me to work. Im teaching watson to help your vet speak dog. Youre a dog, right . Im teaching watson to help you make healthy choices. Im teaching watson to help design a vacation around your personality. Dont judge. Im teaching watson to answer endless questions. How big is infinity . Where do babies come from . Why cant i have chocolate for breakfast . Im watson and im ready to work with you. We heard you got a job as a developer its official, i work for ge what . Wow. Yeah okay. Guys, ill be writing a new language for machines so planes, trains, even hospitals can work better. Oh sorry, i was trying to put it away. Got it on the cake. So youre going to work on a train . Not on a train. On trains youre not gonna develop stuff anymore . No i am. Do you know what ge is . Welcome back to power lunch. Shares of fitbit on a tear today up 9 , near its highest levels so far today. The retailer big box wise, target is offering these fitbit trackers to its 335,000 u. S. Employees. Its one of the latest corporate deals in its recent public history. Fitbit shares are up 81 and remember all of these employees are eligible for the base model or get subsidized for the fan fancier ones. Thats a nice gift. J. Pmorgan chase up grading hersey. And intracellular therapy gettingget ing a major boost. Its up by 76 . Anding ing ing a gra chemical s is up by 1 . And you arm our hosting its First Investor day in more than two years. The stock this year is up 50 , well outperforming its bigger rival, nike. Whats ahead for under armour, sara eisen joins us from baltimore with the ceo, kevin plank. Good to see you, tyler, and kevin plank, thanks for having us here on investor day. Thank you for coming to baltimore. The big news out of the conference is the 7. 5 billion in sales by 2018. Is that ambitious to almost double your revenues in a few years . Were celebrating our tenth year as a Public Company and weve averaged 30 top line, 30 bottom line growth. If you net out our targets, its a 25 growth in three years. We grew 32 last year. We said all along we are a Growth Company and we think its in line with where the opportunity is pulling us. I think maybe people will say is there more more growth available. Were going to add close to 1 billion in revenues this year, we have to manage the growth at some level but were incredibly excited, incredibly bullish about the momentum of the brand, the athletes we have, the stable, where were headed and its a great ambition. You know what the next question is, nike is almost 30 billion in revenue. How long will it be to catch up to that . The good news about our industry, its not a zero sum game. We dont need anyone else to lose for under armour to win. Weve been incredibly focused on ourselves and i think that plays through with our innovation going back to the Stephen Curry, jordan spieth, tom brady, we have a unique story. I think the consumer is making a specific choice to choose our brand. This isnt about, a it is about market expansion. You will see us do that, but were also going to take market share as well. So we may gobble up some share from some smaller competitors and we expect to take share from anybody out there as well. International you just mentioned. You were in asia for five days. Thats a huge Growth Opportunity for you specifically china which the whole world is worried about slowing down. You have a small presence but what are you seeing . Are you still looking at it in a Growth Opportunity . We are in five city this is five days. It was like a tour with Stephen Curry where we went from baltimore to oakland to tokyo to manila to beijing to shung king, 30 Million People and they know Stephen Curry. Jo and they know who Stephen Curry is. In manila it filled up a 10,000 seat arena and thousands of people outside. And we ended in shanghai with opening a new store in one of the main shopping districts. So i think its a great expression i think of the opportunity we have. You know, we Just Announced well finish the year with 12 of our revenues coming from outside the United States how much does that go to in 2018 which were looking at . How much of that revenue will be from international . Were building off our 2013 investor goals. Were a year early with reaching that milestone with the company and were listing that well continue to grow our International Business at a large clip. Well be north of 15 will come from outside the United States by 2018. With steph curry since that is one of your allstar athletes, what would you say to those though who say you cant scale. Nike still has more than 95 market share of basketball running shoes. Its so great to have such a big star, but what do you do with that . That would be loser talk if youre talking about what we cant do because of what someone else is doing. Theres people who told us we shouldnt enter basketball. I dont think anybody two years ago would have predicted we would be in the position we are now the mvp and mvp champion who has a product that did incredibly well. We are launching the curry 2 product. We will be in the signature basketball business. Steph curry is a great friend a great partner to the brand. Were going to build a billion dollar business with steph curry. That will take market share from others and hopefully expand the business. Who else are you going after . What athlete do you want next . Why would i tell you that at this point . But i think whoever it is theyre probably going to be pretty good. I think were proud of our track record and i think weve put points on the board where it matters. Whether its golf with jor dna spieth, football with tom brady, or Misty Copeland which was probably not even considered an athlete before and i think we really entertained and really opened the aperture of womens sports and women athleticism with doing that and then, of course, with steph. So weve got a great young guy in emmanuel amut yea and across every discipline. Theres new striker for the rugby player for the 49ers. Hes unbelievable, isnt he . I think he started he got his feet wet in the nfl and hell be a great story. All right. Well leave it there on the players which has been a good story for you. Kevin plank, no loser talk. No loser talk ever. Live from the under armour headquarters in baltimore. Thank you very much. Were 24 hours away from the most anticipated fed statement maybe of all time really given the amount of talk about it. Will or wont the fed raise Interest Rates . That is the big question. And whether they do nothing, it is going to be a sus senpen sus day. Awe believe active management can protect capital long term. Active management can tap global insights. Active management can take calculated risks. Active management can seek to outperform. Because active Investment Management isnt reactive. Its active. Thats the power of active management. Stocks higher ahead of the fed. The dow up 96 points but the real action is in oil with crude rallying 5 . Gold mining stocks are also on the move. Numont mining up 6 . And under armour hitting new highs. Kevin plank saying hes confident his company can achieve more than 15 International Sales growth by 2018. Right now under armour getting about 12 of sales overseas and, of course, the quote of the day i think is no loser talk. Anyway, if you missed any of the big stories, go visit powerlunch. Cnbc. Com. Ty . A number of 100 million homes have come on the market in recent months. Mine isnt one of them, but unlike last year, none are selling and some are dropping in price. Robert frank has that story. Were going to show you the most expensive homes in america, including an aspen ranch with a special oxygen theater, a long island mansion with an indoor lazy river, and a 100,000 square foot mansion. Well tell you the prices and why theyre not selling coming right up. Alaska. Finally. The search for brown bears begins. Denali highway. Low on gas. Pit stop. Fill up. Double points. Yep, thats cold. Tired. Day 2. Coffee. Eggs. Double points. Beautiful. Majestic. Nothing. Where are you, bear . Warm. Warmer. Warmer. Yes. Wherever the journey takes you, carry American Express gold. Its more than a card. Its the gear that gets it done. A number of 100 million homes have come on the market in recent months, but unlike last year, none are selling, and some are even dropping in price. Robert frank is here with that story. Youre calling them the 100 million zombie homes. Exactly. They are the ultimate bubble indicators. 100 million listings are piling up fast but while theyre getting a lot of attention, they arent attracting many buyers. Brokers estimate there are 20 homes in the u. S. Priced at 100 million or more. Last year three of them sold. This year we havent soled a single one. Most brokers say the listings are way overpriced. The latest is this one in kings point, long island. 60,000 square feet of living space, 35 bathrooms, a hair salon, wine room, indoor Racquetball Court and a private pier for your 200 foot yacht. Price tag for this, 100 billion. Bill kochs 82 acre rarnch is o the market. It has lots of cabins, outbuildings, and the ponds are stocked with trout. Thats also 100 million. Some sellers have cut their prices a little. Billionaire jeff green shaved 46 million off his Beverly Hills estate. Now its only 149 million. Thats cheap compared to the most expensive home for sale in america. Its an estate under construction over 100,000 square feet. Price there, 500 million. I want a lazy river in my house. In the house, exactly. It looked like an airport, not a house, that last one in bel air. Its going to be the biggest home in america when its done. More than 35 bathrooms . More than a bathroom every day of the month, a different bathroom. You have a going problem. Robert is going to stay right here. Justin fikelson, a luxury broker, justin, welcome. What do you make of the fact that these 100 million babies arent selling and more broadly what are you seeing in your market for highend properties . Yeah. You know, i think, first and foremost, a property is not going to sell for 100 million unless its worth 100 million. So its easy to overprice a property, but the fact is its going to sit there if its overpriced. Were still seeing Big Properties pop up. Theres an off market right now being built for 500 million is going to be the list price and thats in the belaire area. I think the volatility in the International Global markets are making foreign buyers step back. Are they going anywhere . No. And thats because investing in highend he will estate in the United States has proven in the long term to be a great investment. Does this trickle down . If we have trouble at the top does it suggest there will be trouble in the mid and lower end in time . No, i think theres a little bit of a softening of the market, but were also seeing the midrange do pretty well. A 35 million house sold in San Francisco in the last year. So, you know, i have a listing coming up in napa valley. Napa is having a surge. 12 million houses are flying off the market especially if theyre modern and done right. I dont think the luxury buyer is not there anymore. I just their its easy to overprice a property. The volatility in the Global Markets will cause a little bit of a breather, a little bit of a step back, but, again, its a great investment in the long term and i think these buyers will be back. You said theres a little softening. When you look outside of San Francisco you look at miami and new york, prices and price growth is coming down across the luxury sector and part of that is overseas but part of it may be this expectation of slightly higher Interest Rates and just a sense that assets overall are just overvalued even among the wealthy. Do you think were going to see lower prices or at least lower price growth outside of San Francisco for the rest of this year and next . Not necessarily. I think theres going to be a tiny bit of softening, but i think the main urban centers are still going to continually go up. Maybe not at the 20 rate that they have been, but maybe 10 to 15 per year. So do i think its going to topple . No. I think its going to soften and then i think we are going to see further increases continuing in the urban centers, denver, portland, San Francisco, l. A. , new york, austin, and d. C. I think sellers are inclined to forget it is not they, but buyers, who set the price of properties. My son wants me to buy the full house house in San Francisco. You know the one im talking about . Yeah. How much could i get that for, the full house house . So theres the full house house which is the postcard houses you see of San Francisco and then theres the actual house. Two different things. The actual house would probably be about 3 million. About 3 million. Which is not a mansion in San Francisco. I mean, thats a decent three bedroom family house. I was going to say you dont get much for your money for 3 plds in San Francisco. Have a great rest of the day. He appreciate it. Thank you. And that will do it for the first hour of power. Lets send it over to brian and melissa. Thank you very much. Its nearly 2 00 on wall street and the same at the Federal Reserve in washington, d. C. Where yn in just about 24 hours the Federal Reserve will announce one of its biggest policy decisions in years. Have you heard about it . Im brian sullivan. Melissa lee is at the nasdaq. The dow is higher by just over 100 points. The Federal Reserve is big and we will have much more on that. But in the past few hours weve gotten a new top story. The big move in oil and its been driven by reports of American Special forces operations helping out kurdish rebels in syria. More on that in a moment, but lets see what oil is doing. Giving up a little bit of the gains we saw earlier today but still up by 2, wti that is. This is a big story pushing oil Prices Higher. As soon as traders here u. S. Boots are on the ground in syria, of course, prices start to move up. There was some technical buying as well when we broke through that 46. 50 range. I will highlight that defense officials are saying that its an advise and assist role only at this point, but, of course, because of the migrant crisis, the News Coverage of this situation has been very severe as well. So were watching that. At the same time we had that iea bullish report this morning. I covered some of those points earlier. Thats also sending crude higher, but i have been saying for a couple days technically weve been poised for that breakout and its not surprising to see it happen at this point. This is the biggest gain for a day that weve seen since august 31st. Of course, that was the day we moved 8. 8 . Brent prices over the 50 mark. So traders are telling me the volatility continues from here. Back to you. Jackie, the outperformance of wti relative to brent, does it tell you thats the Inventory Data driving Prices Higher mar more so than geopolitical . It could be. We got the news at 10 30 and thats when we saw the first real strength in oil prices. Certainly that data is important. There were a lot of different bullish factors, not just the inventory number on its face to send us higher. Thank you very much, jackie. Lets get more now on oil and the geopolitical situation with the chief commodity strategist at rbc. When we started hearing rumors, the initial take was, wow, u. S. Soldiers are on the ground in syria. Thats not what were talking about necessarily. Were talking about reports that maybe we knew where special forces were assisting kurdish fighters against syria. What it looks like we have learned which is new today and terrifying is that those forces we did train have pretty much been wiped out. This is a terrifying story. The reports are today that only about four to five rebels weve trained, the ones that are not isis, only four to five are still fighting and only about 100 to 120 are being trained. The goal is 5,400. Were really short of the goal. Otherwise its assad or isis. Bottom line is were losing. Bottom line is or those forces are losing, the ones we helped train have been wiped out or have quit. 13 months into the Bombing Campaign against isis we are not showing significant tactical gains on the ground and thats a terrifying prospect. So far this has not been its a human story. Not on oil story. Its a humterrible human tray story. Its not an oil story. Does this become an oil story . What we say is the fastest route to 80 would be if isis decides to target middle east Energy Infrastructure. Part of the reason we had the run up in prices is isis overran mosul. When that wasnt an isis attack on a major energy facility, people said they will never attack a facility. They need the money. They need the money. What they typically do is incorporate the Energy Infrastructure as part of their empire. Isis runs an actual state but they could always change tactics. Weve seen al qaeda groups in algeria target major facilities. They have taken over certain oil facilities, especially in the northern parts of iraq, most are in the south, if we rout them or if somebody routs them in the north, could they do the scorched earth policy and just blow everything up and say the hell with you, if youre going to chase us out of here, well ruin your assets. We have seen them target key infrastructure, try to destroy a refinery. There is always a risk. I would like to saudi. There were reports of a security incident around a facility. There are plenty of exposed Energy Infrastructure in the middle east. If they decide to change their focus, that could be very significant for the oil markets. I want to know whats behind the trade today. Do you think it is because of whats going on in syria or do you think it is thee ia inventory reports and is the path to 50 or 60, does that have to include geopolitical . We think its mainly inventory numbers and the technical factors mentioned earlier. But the path to 50, 60 is signs that u. S. Production is rolling or a supply outage somewhere else. Supply got us into this, its an oversupply situation. Supply will have to get us out. I want to follow up on melissas point. We got an 8 million barrel inventory build. Thats a lot. With all due respect, i dont see how people are taking this as some sort of bullish for prices data, 8 million inventory build is a big one. They were expecting a build in terms of crude. There was a products build and then a draw by crude inventories by 2 million. They beat the expectation. Going into the data today they were expecting to be a build in the crude inventories and then you got the draw of 2 Million Barrels. And ill melissa, because you guys will probably talk about this on fast tonight, it strikes me as a corporate earnings story. You beat the street so thats good, but what if the street had come down. Im not sure why they are taking that as a good thing with the oil thing. I hear your point, brian, but its all about expectations, right . Thats what we trade off of. But the broader story which you bring up is where do you see like a fundamental change in the market . I still think you have to have the expectation of a real role in u. S. Production. You have to see this really starting to come down before people start to say on a fundamental basis we should get constructive. Appreciate it. Thank you. Thank you for coming in, especially on short notice. Thank you. Lets take a look at where we stand in the stock market right now. Stocks are higher on this fed day. Taking off with oils big move. Lets get to bob pisani with more. Just a couple points off the session highs for the s p 500. And the important thing is, lets take a look at the s p, we did move up when those when oil started moving up and whether it was the inventory levels or not, the s p moved up dragging industries and energy. Look at the e and p stocks. They all moved up 3 . They were up prior to the Oil Inventory numbers but all of them moved up 3 additionally and theyre sitting near the highs, pl highs. Fed hike, yes or no . I dont know but i look at the markets. Here is what i see. Stocks are on the upside. Gold and commodities are up, the dollar is down. And the vix is in a down trend for the last several days. Melissa and brian, that suggests to me the market is not pricing in much expectation of a fed hike or at least even a de minimis one, maybe oneeighth of a point. Thank you very much. The countdown is on. Fewer than 24 hours the fed will announce one of its biggest policy decisions in years. As you might have guessed, weve got full coverage of that decision right here on cnbc and power lunch. In the meantime, let us bring in cnbcs senior economics reporter Steve Liesman and, steve, one day ahead of the fed youve got new results from your fed survey on the outlook for the american economy. What does it say . And why is this important today . Its because the fed is going to be looking at jan outlook for the economy and making a decision based on the outlook for Interest Rates. First thing, this is the outlook for gdp. Lets go back to the call that our panel had back in december 2014. It was 3 . Like a slinky coming down the stairs, we lost that dream of 3 . Weve settled into this 2. 4 , 2. 5 for year year over year gnd percentage growth. Do we get 3 next year . Not quite. We were at 2. 8 . Settled in a little higher but not much into what looks more like a running or trend growth rate of the economy. There are a couple warning signs out there worth noting and i want to show you this running chart we have of the probability of a recession in the next 12 months. Its put at 18. 6 . Its a little hard to know unless you can maybe zoom in over here but its the first, second, third month in a row that this thing has gone up. 18. 6 . If you come across here, you have to go back three years for the last time we were this high. Not as elevated as it was back around times of concern about the sequester and other troubles weve had, 34 , and the reason we have this concern about the u. S. Economy is not so much because of the u. S. Economy when we look at the number one threats to the u. S. Economic recovery in the first place with a huge game is Global Economic weakness chosen by 45 of the 51 people who responded to the survey and thats up 16 points from the prior survey. Next is always the perennial, sometimes first place, sometimes second place, 16 , thats down 5, and i want to show you some of the other ones, an Interest Rate rise by chosen by zero as the number one threat to the u. S. Economy. Thats down 12 points. And look at europe falling off the threat map. Just 0 down 6 points from the prior survey. So when you look and take a broader look now of what really troubles the markets for the u. S. Economy, it is all global weakness. Theyre not as concerned about tax and regulatory policy. Interest rates in europe, well, those are not a big deal at all, brian. What about the possibility of a u. S. Government shutdown . Isnt that on your threat list . Its not on the threat list right now. Its not there, although i hear stuff like 5 0 50 in terms of people thinking it could happen. Steve, dont sleep tonight. I have to get some sleep because tomorrow is a big deal. I want you up all night studying. I am studying, yes. Thinking of the questions well ask. Are you going to d. C. I am. Safe travels, my friend. 2 00 eastern is that decision. It is possible although not a majority probability according to wall street that we will get an Interest Rate increase. Im in that camp. I seem to be the only one still. The decision at 2 00 p. M. Eastern. Then the big news conference, Steve Liesman will be there, 2 30 eastern time. That will all happen tomorrow on power lunch. Big day tomorrow. Keep it right here now though because up next we are talking perhaps another threat to your money, and it is likely not what you think. Bethany mclean is out with a new book and shes your guest next. Plus, the big buzz over deal talk in the beer world. Could a new beer juggernaut be on the way. And why one fed watcher says the fed is caught in a trap, a greenspan trap. What is that . Well tell you. Stick around. 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. At ally bank no branches equalsits a fact. Kind of like mute buttons equal danger. That sound good . Not being on this phone call sounds good. Its not muted. Was that you jason . It was geoffrey it was jason. It couldve been brenda. 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. What is that . My name is rene guerrero. Im a senior Field Technician for pg e here in san jose. Pg e is using new technology to improve our system, replacing pipelines throughout the city of san jose, to provide safe and reliable services. Raising a family here in the city of san jose has been a wonderful experience. My oldest son now works for pg e. When i do get a chance, an opportunity to work with him, its always a pleasure. I love my job and i care about the work i do. I know how hard our crews work for our customers. I want them to know that they do have a safe and reliable system. Together, were building a better california. Here is a list of concerns around your money right now. Steve hit a few of them just a moment ago. You got china, you got the fed, you got the middle east, maybe weak u. S. Growth, certainly those are all things to think about, but, believe it or not, some are beginning to believe a big risk may be coming from one of the big reasons we had the 2008 financial crisis. Hard to believe, but fannie mae and freddie mac. Together they control over 5 trillion in mortgage debt and what happens to them impacts everything from broader housing to the Global Economy which is why wall street and washington is locked in a battle to decide their fate and one of the reasons why noted author Bethany Mclean decided to write a book about them shaky ground is out now. Why did you decide to write about fannie and freddie . So the Silver Lining of the financial crisis was that we were going to rethink Home Ownership and we were going to rethink these two giant companies, fannie mae and freddie mac, government sponsored entire prierprisesnte we are seven years later, they still sit in the state known as conservatorship. They have, as you said, over 5 trillion in outstanding liability and because the u. S. Government has decided to sweep all of their profits and use them as a little slush fund for budget deficit reduction, they have no capital. In that a time when they talk about big banks, they need more capital. Fannie and freddie have none. I try to stay out of the political arena but i would say this, that theres been no more hypocritical issue from congress than fannie and freddie. They were making money for years, printing money, congress was taking their kitty every year. Then they collapse, congress is shocked. Calling for change, screaming about everything else. Now their profitable again, and according to your background and your research and your book, theyre back at it picking the pocket of fannie and freddie. That is exactly right. Its a fantastic example of political dysfunction. And part of the reason is exactly that. The government has become adixed to the profits these two companies are throwing off. The other part of the problem is no one in Congress Seems able to tackle difficult subjects and this idea of fannie and freddie and what we do with the Housing Market and how we should structure it is a difficult subject. I think it was 2003, franklin rains, ceo of fannie mae hauled before congress, sort of berated, everyone in Congress Standing up, we need to make fannie and freddie smaller, theyre too powerful. All they did was grow and we know what happened, then they collapsed. Theyre growing again they have grown since the financial crisis. The idea was reduce the presence of the government in the Housing Market. Instead, its bigger than its ever been. I will try to defend them a little bit, or at least congress. Are they smarter . To allow these two companies to operate with no capital . I dont think its a smart decision. You mentioned it in the answer to the first question. The treasury lifeline. Does that protect taxpayers . Because Third Quarter of 2008 i think the loss was about 20 billion for one quarter of just fannie mae, not even freddie mac. Thats a great question, does it protect taxpayers. Here is the issue, they have paid back much more than they took from taxpayers. They have paid about 240 billion but they havent been able to keep ni any of it. If theres a wrinkle in the market it will not only affect the lives of every homeowners because it could cause them to forget taxes, you net 25,000 in profit every year. You save it up like youre supposed to so if you have a problem you have money in the bank. Basically what congress is doing is all the money on top not all of it but a lot of it congress is taking so if something bad were to happen again theres nothing. The only backstop is the treasury which, of course, is a code word for the u. S. Taxpayer. It absolutely is. And there was even talk this spring of using fannie and freddies profits to fund a Highway Infrastructure bill. Why did ackman reference stalin in a discussion with you last night . You have a lot of very irate investors who did the work in 2009, 2010 and said, wait, these two companies are going to become really, really profitable really soon. Were doing to buy their stock. The u. S. Government left it outstanding, 20 of it outstanding after the financial crisis. They even said at the time this might have value one day. There might be value for the shareholders one day. Investors bought after doing the work. Then the u. S. Government comes along in the summer of 2012 and says, oh, no, were changing the rules, were taking 100 of the profits. Thats a shakedown. Its a shakedown. Investors are furious. Im not a lawyer, i dont know if theyre going to win their cases. A lot of them are suing even if you were a lawyer, im not sure anybody could understand this case. It is so convoluted. Correct. Bethany mclean, new book, shaky ground, the strange saga of the u. S. Mortgage giants. Thank you so much. I got the title right. You did. Up next, more on that big beer deal that might be brewing. Plus a super sweet stock upgrade to talk about. Its all coming up when power lunch returns. Stick around. Shares of fitbit jumping today after target announced it would begin offering the companys fitness trackers to its 335,000 associates for free. Jim cramer will speak with the ceo james park on mad money tomorrow night and check out this lineup for tants show. Cisco and sales force joining jim on a special edition of mad money from cnbcs one market in San Francisco. Do not miss the show. Will not. Shares of molson coors getting a big pop today. In fact, the company, the best performer in the s p 500 right now trading at alltime highs dating back to when coors went public in 1975. Molson and coors merged back in 2005. But that molson coors deal is peanuts or maybe beer nuts compared to one that may be in the works. Anheuserbusch in bev saying it has approached sab miller over a possible takeover. That would be budweiser buying miller and would be a company that would control more than half the worlds beer market. Caroline levy is here. Do you think this would happen actually . I definitely think it could happen. As you said, its been rumored for many, many years and a. B. Has proven that theyve got the capability of doing big unexpected deals. That was when inbev bought budweiser. This would be about 100 million probably. We are talking very big numbers but, yes, its possible. Im sure regulators would have a very big look at this because youre talking 50 to 60 of the global beer market. They may not allow it to happen. They may if it does happen, they may cut a bunch of it off. I guess what im trying to understand is why is molson coors reacting so much. Its obviously being seen as a derivative play but who might be the Interested Party . So the way this works is the definitely in the u. S. A. B. Would not be able to keep the miller coors business, and so the reason that molson coors is up today is because theyre seen as the natural buyer right of first refusal on the miller coors jv and its seen as a great opportunity for them to merge the joint Venture Partnership and to take out a lot of costs and expenses and really create value. So carolyn, in terms of getting past antitrust, what sort of extractions do you think the companies will need to make and do you like that new company . Well, first and foremost, we would have to exit the u. S. Miller coors business. Secondly, im not sure that they would have to exit the snow cre joint jen tour in chiventure ins something they might want to exit or might have to exit. There is a chance they would keep the snow assets and have north of a 30 market share possibly 40 market share in china which would be pretty remarkable, but there will be over di vestitures. It could be a very long process. Are there beneficiaries as these two companies try to navigate this merger . I think thats a great question. We certainly thing Constellation Brands stz will be a beneficiary. And if miller coors and a. B. Are distracted in discussions and potentially mergers, i think its a great opportunity for them, constellation, to keep growing their corona, modell la he is personal brands. Is there any reason to own anheuserbusch, inbev. This is really a bazillian company in many ways. We have an underperform rating and we recognize there would be some upside to the stock if they made an announcement like this because theyre seen as the ultimate cost cutters. They could strip out a lot of costs from sab if they did succeed in this transaction, but that being said, youre right, theyre big in brazil. The u. S. Has been very tricky. I think part of the reason they need to make this move now is their inherent growth rates are under a lot of pressure. Carolyn, thank you for joining us. The oil markets are about to close for the day and they look to close much higher. We are headed live back to the nymex when power lunch returns. The dow having a pretty decent day ahead of the fed. We are up and were back right after this. 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. Hi, every. Im sue herera. Here is your cnbc news update. President obama is inviting a 14yearold Muslim Student to the white house. After the texas teen was detained by police for taking a homemade clock to school. The teachers thought it looked like a bomb. He was suspended from school for three days. Police say they will not press any charges. Fire crews gaining ground against a devastating Northern California fire that has destroyed hundreds of homes. They say the blaze in lake county about 100 miles north of San Francisco is 40 contained. It has burned more than 100 square miles. Amazon announcing its prime now onehour Delivery Service is expanding to los angeles and orange county. With the addition of los angeles, prime now operates in 13 cities worldwide. And olive garden is offering another helping of unlimited pasta. Pasta pass allows people to eat as much pasta as they want for seven weeks. This time its a family affair. For 300. The promotion will allow four people to join in on the feast. The passes go on sale tomorrow afternoon on the companys website. Thats a lot of pasta. Thats the cnbc news update this hour. Back to you, brian. Thats a cornucopia of tortellini. I assume the endless salad bowl goes with it. Does a gym membership go it. It should. Or an appointment with a cardiologist. One of two. A big gain for oil today and moving higher into the close, Jackie Deangelis its a big day for oil bulls. It is a big day. We saw more strength, more buying as we headed into the close. Were going to settle over 47 a barrel. Its a 2. 50 move on the day. More than 5 . We havent seen a day like this since august 31st. That was when we moved 8. 8 in one day. Having said that, a couple reasons for this, and i will highlight the fact that u. S. Boots are on the ground in syria, yes. Theres no oil there, but, still, those kind of headlines do rile the markets. Its a psychological thing that happens. You talked about that eia report as well, a drawdown in inventories. Cushing was down 2 Million Barrels as well. Multiple bullish factor this is that report and the technic at th this. It was a perfect storm. Traders will be watching the fed as well to see what impact it has on the dollar. Dollar is a little bit weaker today supportive of crude. Thank you very much. It is now time for street talk. Five stock calls we think you should know about. Stock number one, oracle. Suntrust upgrading it to a buy. Included computing remains an opportunity. The shift to cloud may be, pardon this, clouding some investor understanding of the company. Trading 13. 5 times next years earnings making it cheaper than most of its peers. And kudos to the analysts for making this call ahead of earnings this evening. Of course, we will be covering the earnings on fast. Stock number two, general electric. Big move being added to Credit Suisse u. S. Focus list. With the deal set to close they also like more potential m a. Whats amazing, two things. The average target of the 17 analyst that cover the stock is 30 a share. But i guess whats more intriguing to me is that ge only has 17 analysts following it. Analyst has 48 analysts. Oh, how the mighty Analyst Coverage has fallen. Exactly. Third stock of the day, hershey. Jpmorgan upgrading to an overweight from neutral. They say the risk reward is attractive again. China is a much smaller part of the business. Sales are strong in the u. S. Gross margins look set to improve. The analyst see about a 14 total return by the end of the year. On the cost side, theyre being helped by falling milk prices and cocoa prices are coming off a recent high. That should help with the margins that the analyst was talking about. Next stock here cst brands. This is an operator of gas station convenience stores. We talked about stores like this before. Raymond james upgrading to an outperform with a 42 target. The analyst says cst is opening a lot of new stores with expanded food service. Didnt you do caseys last week . Yeah. Its the same thing. Do you have a mini mart obsession . I thinks the under the radar low gas price play. There you go. Its one of the Biggest Companies in our san antonio power city index. They own the nice and easy and the corner store brands. The final stock is actually the under the radar name of the day and thats web md. Its not under the radar to consumers. Every minor injury is automatically going to be something fatal but growth in the Digital Health business is the focus of the call. Starting with an jutt eoutperfo. They do 100 million. The price target implies about 30 upside on wbmd. This is an outperformer yeartodate. 4. 6 versus the s p 500. I go to those things im a total hypochondriac. And youre feeling your pulse because its like im dying. No, you have a splinter. Apple watch. That wraps up street talk. Time now for trading nation. Lets talk about fitbit. The stock jumping more than 10 of on news of a deal with target and the potential for more Corporate Sales ahead. Brad ericsson and rich ross. Brad, break down this rally. Do you think its real . Should a deal with target give it this kind of legs under the stock today . Yeah, absolutely. Obviously the 335,000 target employees that this brings on board for fitbit is very nice in the near term but what we really like about it longer term is it signifies this secular shift towards connectivity really enabling companies to engage with their employees to drive healthier life stiles and get people more productive at work as well as just allowing companies to basically show that they really care about their employees. Fitbit is an early leader in that market and we do like the fact that theyre bringing their brand exposure from the Consumer Market over to that corporate channel and we think theres potential upside opportunity. The stock is down 15 over one month. To what do you ascribe the weakness . Obviously the Company Reported its First Quarter as a Public Company, rapidly rising opportunity around wearables has a caused the company to throw a bit more spending sooner than expected. As well as the fact that, you know, as this data has emerged with apple entering the market at frankly a different price point and an adjacent category almost to fitness monitors, thats driven overdone concerns in the game. Thank you. Rich ross, how does the chart on fitbit look . Healthy . Lets keep in mind the company has only been trading now for that one quarter as the analyst alluded to. First 100 days have been pretty good for the stock but they dont tell the story going forward. I will give you a way to trade it and to invest in it. You can see here over those 100 days, stocks priced at 20 on thei po. We get that big opening stock, stock opens around 30. Has that big run up to 50. Now we come up. We test that key support. 30, thats your big support. Thats where the stock opens for trading. Publicly we put in a nice Double Bottom amidst the recent volatility in the broader market. Importantly, we take out that down trend from the high, brian, on the news of that deal. I think the stock has upside to that key resistance at about 40. Its not only the neckline of that little head and shoulders that came to life there, but also thats the average price. Stocks in around 36. I think theres upside to 40 for a trade. If you like it longer term, brian, youre not buying it for the chart, for 90 days of trading. Youre buying it because you like the stock, you like the story. Go right ahead. If youre a trader, below 30 you have to use a stop here. Facebook, the stock got cut in half in the first 90 days. Turns out to be pretty good. Twitter goes the other way. Up 50 its first 100 days. Hasnt been so good from there. Mixed results coming out of the first 100 base. I think fitbit has a chance. Below 30, not so much. Rich ross, thank you very much. Brad, appreciate it. More trading nation every day at tradingnation. Cnbc. Com. Cue the music. If you dont recognize the song, its hips dont lie by shakira. Why are we playing this song . Two reasons. Clearly this is a funky show, but two, and more importantly, this was the number one song in all of america the last time the fed raised rates in june 2006. What stocks in the s p 500 have done the best since then . Were going to let you know and more importantly, what was your wealth adviser or fund manager doing back then . Maybe they were still in college. Can they manage your money now . And we want your opinion. Should the fed raise rates tomorrow or keep waiting. Not will, should. Go to cnbc. Com vote. Were going to keep watching to see the results because hips dont lie like polls. Stick around. 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. Lease the 2015 rc 350 for 429 a month for 36 months. See your lexus dealer. A lot of things have happened since the fed last raised rates on june 29th of 2006. The dow was about 30 higher now than it was then. The companies that were in the s p 500 then and still are, because there are some better names that added late like priceline, these are the biggest movers since the last fed rate hike. Number one, apple. 1266 gain followed close lie by amazon and then a long gap to the third best performer. Con still lation brands up 387 . What was your fund manager doing back in 2006 . Theres a good chance he or she was actually still in college. Eric chemi is looking at the babyfaced fund manage whose have never run money in a rising Interest Rate environment. They have never seen seen a rate hike. If you look at the dataen owe the board, this is just since 2000. The real data from e vestment goes boack to the 60s and 70s. In the last nine years there are so many people in the industry who have never been in an environment where the fed hiked rates. They dont know how to deal with this because they dont have the experience. A lot of traders were expected more volatility. They were wondering if this will create a toxic cocktail of people who dont know what theyre doing. The Banking System are bigger, Financial Advisers, maybe 20 , 30 of them were not Financial Advisers the last time the Federal Reserve raised rates. These are we always talk about the consequences to bonds and stocks. The Human Element is a big story here. Kroo does experience matter. I would hope. A lot of old guys say it does mat irand the young guys dont know what theyre doing and will they be allowed to take the risk . Some other people thought that maybe this environment is so different than before because the intapg hcentral bank has ra assets so much maybe it wont matter. Experience should always matter. Thank you. Were going to start a cnbc vote, head to cnbc. Com vote to weigh in on this question. Do you think the fed should, not will, but should raise rates tomorrow. Voting starts now. In the meantime, lets bring in sam rimes, Portfolio Manager at chilton capital. Sam, you put out a note saying if janet yellen sticks to this dovish path at the fed she is falling into the greenspan trap. What do you mean by that . So thank you for having me. The greenspan trap is the if you think about it, you think about what greenspan was looking at. He was looking at low inflation, lower wages, and he cut Interest Rates significantly to attempt to push both of those higher, and what you ended up building was a housing bubble. Now you see china doing pretty much the same thing with its devaluation and its growth slowing down. Its transmitting deflation globlly. The question is whether the fed will fall into the greenspan trap of paying too much attention into whats going on internationally and not enough of what is going on domestically. Maybe when the fed got too aggressive in the mid to late 30s and exacerbated and extended the depression, thats probably the fear. Is the risk bigger on the keeping rates low or no for longer or raising them too soon . Well, you have to i would argue that the trajectory really matters. 25 basis point hike tomorrow with a 4. 5 trillion Balance Sheet probably doesnt have the type of effect that they did in the 1930s. The 1930s they got well ahead of themselves. The key for the fed is just not getting ahead of itself this time. You know, its taking a slow and steady path. I think in a lot of ways if you kind of delay too long, youll have to get off the slow and steady path higher and thats where you will really have a 1930s type of issue. So we have this poll running live and everybody out there listening well, if youre driving, dont do it, if youre at home go to cnbc. Com vote. Its a live poll, should the fed raise rates tomorrow. Right now, sam, 66 of our respondents say, yes, they should raise rates. What do you think of that . I think they should as well. I think your viewers are doing a good thing. When you think about it, the domestic economy is doing pretty well. You have cpi, the trim mean. Cpi came in pretty well today. Trim mean pce is hovering around 2 . They dont have much of an execution on inflation unless they decide to have an excuse on inflation. You have employment pretty close to full. The only real excuse they can go to is international threats, volatility out of ems and so on. So the key is are they going to pivot from being domestically oriented to concentrating more on the global risks and i think the global risks really raises a question for when and if theyll ever be able to raise rates. By pivoting it gets a little sticky. I was just saying that. We have to go, sam. Thank you very much. We talk about will the fed not do anything because of uncertainty. The fed may be the greatest uncertainty. They could remove a lot of uncertainty by being certain of something. Time to lock in the viewer vote. We asked do you think the fed should raise rates tomorrow . Its live voting right now. As of now, 65 of you say yes, indeed, the fed should raise rates. So, melissa, its interesting. The people are about exactly inverse of what wall street thinks will happen. Well, i mean, the question is should and what wall street thinks is what will happen. So theres a difference in the question as well. Maybe we should flip the question to will. Right, exactly. And you may get what wall street is expecting as well. All right. I cannot believe this but at this time tomorrow well know what the fed did or did not do. How should you invest your money . We have vice from a fivestar bond fund manager coming up when power lunch returns. Drivera. It recognizes pedestrians and alerts you. Warns you about incoming crosstraffic. Cameras and radar detect dangers you dont. And it can even stop by itself. Question to will. Bond fund manager coming up when a crash. The 2016 eclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. Awe believe active management can protect capital long term. Active management can tap global insights. Active management can take calculated risks. Active management can seek to outperform. Because active Investment Management isnt reactive. Its active. Thats the power of active management. Welcome back to power lunch. Im kate rogers with some news out of the ridesharing world. Two of ubers biggest rivals, lyft and chinese startup didiquati have teamed up to allow users of each app to hail apps from the other respective app when they are in other countries. According to dow jones a chinese visitor to the u. S. Can open up the d i am di app and pay for their app on lyft after which didi will remit that to lyft. D. Di has a press event kicking off. We done know what the news will be. But once again dow jones is citing one source saying that two of ubers biggest rivals have teamed up and also that lyft is in talks to potentially expand this alliance to indias ola and singapores grab taxi. The ride sharing wars definitely heating up p back over to you guys. Thank you, kate rogers. As we continue to count down to the fed decision tomorrow how should you invest your money before and after the decision in eric steins the Portfolio Manager of the short duration Strategic Income fund. He joins us now. Eric, great to have you with us. Lets say the fed hikes rates. What do you do with your bond portfolio . How do you change it . Well, look, i think in our eaton vance Strategic Income fund try to have a longterm approach. But i think if the fed does hike you want to be short the front end of the fed treasury curve, other assets that would do well in a rising rate environment is the place to be. What do you think happens to the yield curve then . Do you think we see a flattening . I think if the fed is raising rates into a decent growth but slow inflation environment the yield curve should flatten. Past couple weeks weve had actually some steepening of the yield curve, lots going on in the treasury market with china and other foreign officials money selling treasurietreasuri. Lets say they dont hike. If they dont hike, maybe you want to extend duration a little bit but i think u. S. Treasuries dont really offer that much value. So highyield bonds, we get a decent amount of carry, theres some duration you get some carry but also places like india. But also if they dont hike its very important to focus on the guidancer they going to hike in the october meeting or december meeting . Lastly what did you think is going to happen . I think its going to be very close. Either a dovish hike or a hawkish pause. If you put a gun to my head id say a dovish hike. I think theres impetus to get off the lower end. Eric stein. Coming up on power lunch, john harwood sitting down with Carly Fiorina. Asks her some tough questions. Do you believe that humans contribute to Climate Change and that government ought to do something about it . Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Daddy lets play sorry kids. Feeling dead on your feet . Ive been on my feet all day. Dr. Scholls massaging gel insoles have a unique gel wave design for outrageous comfort that helps you feel more energized. Dr. Scholls. Feel the Energy Former hp ceo Carly Fiorina will face off against donald trump and several other candidates in tonights debate. But before that she sat down at a diner for a speakeasy with our own john harwood. Do you believe that humans contribute to Climate Change and that government ought to do something about it . I believe if youre going to go to science you need to read the fine print. A single nation acting alone can make no difference at all. The only answer to this problem, according to the scientists, is a threedecade global effort coordinated and costing trillions of dollars. Its impossible. Are you kidding . A threedecade effort costing trillions of dollars coordinated with Current Technology . It will never happen. The only answer is the answer to do nothing . No. The answer is innovation. Well, for more of johns speakeasy with Carly Fiorina or the dozens of other politicians he has sat down with, you can visit cnbc. Com speakeasy. All right. Lets get a check of stocks ahead of the fed. With just over an hour to go in trading before tomorrow, the big fed day did you know there was a fed meeting tomorrow . The Dow Jones Industrial average up 108 points. The s p up. 7 of 1 . The nasdaq and russell 2000 are also higher. Melissa. This is a nice followthrough from yesterday, brian. And also take a look at some of these sectors. Xlu, the utilities, as well as eem, the emerging markets. The bid higher in both of these sectors sort of is saying that the market believes that theres going to be no hike because if there was a belief that there would be a hike people would want to take off the bond proxies as well as the riskier assets there. These are interesting trades. These are the trades to watch going into tomorrows meeting. But i loved your point, though. Wont it be nice by tomorrow night on fast money, 3578 eastern, 2 00 pacific, that well know, that all sothis speculation, the great unsirnt will be over. I guess. Unless they open the door tore mountain certainty. Do i this theyre going to go away from data dependency tomorrow . I doubt it. I had a nightmare last night. I ate a giant sandwich. But i had another nightmare also that the Federal Reserve doesnt raise rates but it doesnt indicate that it wont raise rates, that we still get stuck in this stasis where they basically say the unraised raise where its like were probably going to do something soon kind of a thing. Would that be a de facto raise . That would be a selloff in the markets. Because that would be a de facto raise, then. I dont know. I think uncertainty is terrible for the markets. Anyway, tonight what is certain, brian, tonight on fast money weve got the ceo of accord affair therapeutics. Embroiled in ongoing Patent Litigation with kyle bass the hedge fund manager. But tonight the ceos going to speak out at 5 00. Kyle spoke with david faber yesterday. A little back and forth. Well look forward to that show. The fed final decision fast money. As a reminder, that decision will break at the top of this fine hour. 2 00 eastern time. 11 00 pacific. Its going to be a big day. Well see you then. Closing bell starts right now. Hi, everybody. Welcome to the closing bell. Im kelly evans at the new york stock exchange. And im bill griffeth. Were at the stock exchange. But oil has been the story today. Crude spiking. In fact, its up 5 1 2 right now on the back of a couple of things. Bullish inventory report and news about u. S. Special forces in syria. That move driving Energy Stocks higher as well today. Look at that. In fact, look at Conoco Phillips up 4 1 4 . Conoco too has a lot