The odds of regulation ahead. We begin with the biggest ipo of the year. First data hardly budging from its ipo price as we stand right now. Is the ipo market in trouble . Bob pisani joins us from the floor of the stock exchange. I guess the answer would be, not necessarily, right, bob . Yes. And more accurately its not in trouble but its repricing and thats good news for investigators. Its buy low, sell high. Stuff is on sale, people are taking advantage. A little quiet behind me but this morning it was very, very busy. Priced at 16, opening at 16. 39. You might say they were talking 18 to 20, isnt that a disappointment . 15 haircut getting it done was the most important thing for this company. Very difficult ipo environment and they got it out. So what would be good today . Anything with a 16 handle, anything would be good and that would be perfectly acceptable to the people who are involved in this deal. Nyse ipo pricing postponed, thats why were hearing on albertsons. They did make it last night, they were going to try tonight. The word is now it will be postponed. That would be the Third Largest food and drug retailer. Well talk next week about when, if at all, theyll be coming this year. Meantime s this ipo market in trouble . I told but its about repricing. Theres been big price cuts, 13, 14 ipos since labor day. The average price, they cut it 18 below the midpoungintmidpoi. The ipo market improved. Bottom line here the market is behaving better when they got the price cuts. By the way, didnt have a chance to talk about the Bank Earnings but theyve been good enough. Everyone reporting is up today and tyler, mandy, normally banks sell off going into earnings season. Its a good sign theyre holding up well. Back to you. Thank you, bob. The heated debate over soaring drug prices heating up even more. Shares of valeant plunging more than 7 . The drugmaker has been subpoenaed over its pricing and the assistance to applies to patients to be able to afford their drugs sometimes. Cnbcs meg terrell is here with the latest. Hi, meg. Thats right. It just keeps coming from valeant, getting government increase from multiple fronts. The company saying its responded to a letter from senator Claire Mccaskill over drug pricing and access to patients. The company also saying its been subpoenaed by the attorney generals for massachusetts and southern new york over things including pricing decisions and patient access. Now, this concerns two drugs, heart drugs that valeant acquired earlier in year, which prices have been increased by 200 plus 500 plus after the Company Acquired them. Cleveland clinic alone saying these increases are going to cost them more than 8 million. Valeant isnt alone in raising prices but it has been highlighted as its part of the business model. Well see to see what happens but clearly weighing on the stock. Thank you very much for that, meg. The world of daily Fantasy Sports is also under the microscope recently. Over the years of inside information to make money. Now the fbi looking into the daily fantasy business model. Eamon javers joins us with more details. Hi, mandy. The wall street journal and the New York Times are reporting that the fbi has begun to make inquiries calling some of the most prominent Fantasy Sports players to get more detail on exactly how these operations work. The fbi will not confirm that investigation to us, but lets take a look here at exactly where we are in this question of fan duel and draft kings and potential investigations into them. The media reports are that the fbi is contacting players. Also we know the new York Attorney general is probing this question of inside information. Who inside these companies has access to information that could be very valuable for placing bets on other sites . We also have the possibility of potential hearings up on capitol hill. Democrats seem more interested in that than republicans but you do get the sense here in washington that republicans are warming to it a little bit as well. So thats something to watch for over the next coming months. Also i should just tell you as a disclaimer that Comcast Ventures and nbc Sports Ventures have stakes in fan duel, so to get that out there. We know this is a big and growing industry segment, and now its got potentially a big problem, guys. Thank you very much. In the interest of full disclosure, i have played draft kings, so there, folks. Did you win . You know, i lost the first week but i won 10 the second week. How about that . My 9yearold picks the teams. Thats how it starts. He had Marcus Mariota last week. It was a good week. So does it need to be reb lated . Lets talk darren, an attorney specializing in sports law and a contributor to forbes and joey levy is founder and cofounder and coceo of draft pot, a daily Fantasy Sports gaming site. Darren, welcome. And welcome back to you actually. Do you think these probes are ultimately going to bear fruit, and i say bear fruit in a way that might be inimical to the sites . Its very hard to determine what is going to be found from these investigations. As was mentioned, the new York State Attorney general is looking into it, so is the Massachusetts Attorney general, and you also have a federal grand jury investigation that has begun in the state of florida. So its not at all surprising that the fbi may be looking into it, investigating it, asking questions to players in these operations, but im not quite sure what theyre going to find out at the end of the day. Sure, employees were using these services and may have had, quote, unquote, Insider Information. What else is out there . Its unknown at this time. What is the nature, darren, of the quote, unquote, Insider Information that these employees are alleged to have used to their advantage on rival companys sites . Yeah. This Insider Information, again, i put it in quotes because were not really talking about security trading, but the usage of players. This type of information may have given employees a competitive advantage when theyre playing against the common user, and that goes to some of the lawsuits. Now, theres been six class action because they know where the money is going on individual players . Thats correct. So they can use that to their advantage and maybe select those players that are not being taken by the vast majority of users, players that may have value but are not being selected by others. I think of this, mr. Levy, as rather similar to paramutual betting. I know its not betting so say the people in the industry wh. E where the money goes determines the odds and the payoffs. Are you worried . Were not particularly concerned about the legality of daily Fantasy Sports. In fact, we believe its undoubtedly legal, especially as we adhere to the unlawful internet gambling enforcement act of 2006. However, our company, draft pot, is taking measures to ensure what are you doing to make sure that the game is clean yes. That all the employees there are playing by the right kinds of restrictions. How are you ensuring that your customers can have faith in the integrity of your company . So actually what we did the morning that the press or the media really took to light and our users were sort of getting worried about what could be happening within a daily Fantasy Sports operation, we issued a statement to all of our employees expressly prohibiting them from participating in any daily Fantasy Sports contests on any other website and then, in fact, we also shared that statement can they play on your site . Absolutely not. They cannot play any daily Fantasy Sports and we shared that statement with all of our users because we feel like this is a tremendous industry. We think its here to stay, but in order for this industry to survive, we need to be tra transparent. Darren, i want you to give your legal advice to joey here. I want you to tell him as the ceo of draft pot what he needs to do to make sure that nothing untoward happens to his company or on his site that would call into question the integrity of the games hes doing. I need to be careful here. Were not under retainer agreement so no official legal advice, but be transparent with your users. Let them know exactly what your policies are, what your terms of service are. Be clear and, importantly, let them know about their funds. What exists, where theyre being held, are they being commingled with the funds of the site or are they being put separately . Thats a good start. Regulations will be coming probably which will help people like joey and draft pot, but for now transparency is key. Gentlemen, thank you very much. Darren, joey, appreciate it. Mandy. Thank you very much. Lets look at the market because were currently at the highs of the day. Todays gains have put the dow back above 17,000 and put the s p above 2,000 once again. I think todays gains for all three averages are the first in three sessions. The dow is gaining by triple digits, 116 points. Lets get to seema mody for a market flash. Hereby is a stock on the move. Dec dexcom up 16 . Increasing their forecast well above estimates. This based on overwhelming demand for its Glucose Monitoring system. In addition to the upbeat outlook, a number of analysts upgrading the stock to a higher rating. According to fact set, 15 bro r brokerages rate the stock as a buy or higher. Dexcom a big winner this year. Lets go to housing and Bank Repossessions soaring in the Third Quarter. Whats going on, diana . Just more clean up from the housing crisis, specifically in states that require a judge in the foreclosure process. While newly started foreclosures are down to the lowest level since 2005, Bank Repossessions, the final stage of foreclosure, are way up, up 66 in q3 from a year ago. Thats the biggest jump realtytrac has ever recorded. States like new jersey have had not only huge backlogs of distressed homes but their time lines with judges are three to four years. Why suddenly the jumps . Banks have streamlined the legal paces and sold a lot of loans to nonbank lenders who have passed required more toria and are moving ahead with final foreclosure and home prices are higher so banks are more willing to sell the homes into todays market. In new jersey repo seths is up 351 . In florida, also a state with judges in the mix, theyre up 34 from a year ago. Same in nevada, repos up 255 . New foreclosures down. All this new inventory could throw cold water on home prices in those states, but right now supplies are so low you will likely not see too much hurt in prices. More online, realty check. Cnbc. Com. Back to you. Di, thank you very much. Silicon valleys gender problem. Women earn less than their male counterparts and the pipeline of women Computer Science majors is dropping. Stocks at session highs meantime. Youre watching cnbc, first in business worldwide. The only way to get better is to challenge yourself, and thats what were doing at xfinity. We are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Welcome back to power lunch. Im mandy drury. Stocks are currently at session hei highs. United health, the dows biggest loser earlier today despite an earnings beat and Revenue Growth of 27 inq3. It has gained back some losses but its currently still down by 2 ch 2 . And keeping track of netflix. Shares dropping like a stone after the service reported its q3 profit fell 50 compared with last year. And General Motors reporting vehicle sales fell more than 3 in q3 due to weakness in Global Markets such as south america. This despite a boom in truck and crossover sales right here in the United States of america. Silicon valley has come under a lot of criticism over the lack of diversity, especially women in the workplace. Today a major gathering is taking place to tackle that issue head on. Julia boorstin is live in houston, texas. What are you hearing . Well, mandy, im here at the grace hopper celebration of women in computing where there are over 12,000 women from hundreds of internet and tech giants here to address the persistent problem of the lack of women in the industry. Women make up just 26 of the tech workforce and earn just 81 cents for every dollar that men do in math and tech jobs. A recent fortune study of nine tech giants found women comprise just a third of their workforce on average. Ebay among the best at 42 female. Facebook and google are less than 30 female and microsoft and intel are at the bottom with 24 . The percentages get worse in senenior manager. Less than 20 is female at microsoft, intel, and google. The youtube ceo said its a matter of getting women into the pipeline and then holding onto them. Women earn over half of all bachelors degrees in america. But they eastern fewer than 20 of the Computer Science degrees. And unfortunately this problem isnt getting better. Its getting worse. This morning we spoke to the chief Technology Officer of the United States, megan smith, who said there are over half a Million Technology jobs that are open right now, so training more women is key to driving u. S. Economic growth. Back over to you. Julia, stay there and join in on this conversation because we would like to know how we solve this gender gap in tech. I have with me here tech entrepreneur heidi messer, also an angel investor, cofounder of collective i, collective intelligence, i believe. Welcome to power lunch. Great to see you. Thank you. Before we get to a fix, lets get to the root cause of this gender gap or shortage of women in tech. Is it because women arent applying or theyre not interested or are they somehow being kept out by this mail dominated culture . Its not a normal outcome to have the 50 of the population who drives the entire economy, literally 80 of all prmurchase be left out of the conversation and the growth of these companies. I have been building Enterprise Technology companies my whole life. I see a talent pool thats untapped and has to be tapped into. Why are they being left out of the conversation as you put it . Is it something that really needs to be tackled, for example, at a very young age . Do schools need to nurture women towards i. T. , toward things involved in tech . Traditionally its the sort of thing guys gravitate to. Theres certainly that, certainly getting more women interested in s. T. E. M. But thatsthe only thing. The poster children of our industry is people who dropped out of college. Its Building Powerful Networks where access to opportunities are spread among large groups of the population that have been excluded. Yulia, do you have a question . One of the things im hearing about is Venture Capital and one things both susan and megan spoke about is the idea that Venture Capital dollars are primarily going to men. Theres one statistic i heard here today that fewer than 5 of all entrepreneurs who get funding, vc funding, are women and theres a lot of questions about how to handle that . What is the way to handle that financial problem . First of all, the billion Dollar Companies that are being built like collective i and others are going to address that problem because vcs cannot ignore the economic reality that exists. But in addition to that, i think they have to realize theyre missing out on enormous innovation. If they dont actually look at their own companies, theyre going to suffer for it financially. What are some of the main fixing in the tech world, some of the tech leaders taking charge to try to change this . Theyre the people at the forefront, Sheryl Sandberg and marissa and jenny at ibm but also a lot of entrepreneurs who are building tremendous companies that are out there that people probably havent heard of yet, but they will. Companies like cloud fair and others who are going to completely disrupt the paradigm and technology is all about disruption and it takes the brave few to go out there and beat the odds. Well, good luck. Thank you very much for joining us today. Thank you so much. Heidi messer with collective i. One woman making it big in tech is Elizabeth Holmes and shes the ceo of theranos. She will be joining jim cramer tonight. The latest round of Economic Data adding fuel to the bets that the fed will not raise rates this year and that could have huge ramifications for International Markets like chinas, japans, and europes. What you need to know. As we head out, take a look at how some of the main overseas markets have performed this year. Shanghai, the nikkei, the german dax up between 2 and 3 , if you can read that squiggly line, graph. You pay your Car Insurance premium like clockwork. Month after month. Year after year. Then one night, you hydroplane into a ditch. Yeah. Surprise. Your Insurance Company tells you to pay up again. Why pay for insurance if you have to pay even more for using it . If you have Liberty Mutual deductible fund™, you could pay no deductible at all. Sign up to immediately lower your deductible by 100. And keep lowering it 100 annually, until its gone. Then continue to earn that 100 every year. Theres no limit to how much you can earn and this savings applies to every vehicle on your policy. Call to learn more. Switch to Liberty Mutual and you could save up to 509. Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty mutual insurance. Welcome back to power lunch. Stocks higher on bets the fed will delay raising Interest Rates. New york fed president William Dudley saying that recent data suggests the economy is slowing just a bit, delaying a right hike, and saying it would impact not only the United States but International Markets as well. Seema mody has been taking a look at that, and, of course, the ripple effects go far and wide. There has been an active discussion around the fed delaying the rate hike and the impact around the world. Emerging markets obviously its good for them. Lets focus in on the idea there would be a delay. Exactly. Lets focus though on europe and japan because many economists say it would be a negative for them. Lets walk you through it. If the fet dodead does decide t delay, theres a good chance the dollar would weaken further and a higher chance the euro and yen would strengthen. Thats bad news for these exportoriented economies that rely heavily on the weak currency to spur demand. As to that a drop in Commodity Prices which weve been seeing would continue to push inflation down. Weaker growth and deflationary pressures would make it more likely that europe and japan would unveil new qe measures to support their economy. Traders say, of course, further qe from europe and japan would be positive for these two stokts. In fact, the european stock market has been rallying on the prospect of further easing, and, tyler, the big focus has been on those multinationals in europe that rely on sales outside of europe for their qe, weakening of the euro, great for those companies. Youd like to borrow my tie. It would go really well with what youre wearing. Seema mody, thank you. Were all very color coordinated for a good cause. For the bond market, Rick Santelli has been watching whats happening there. What are yields doing, ricky . That last spot was spot on. Theres so many implications, but remember, when were swimming in such a small round pool with the valuations of the euro, the yen, and the dollar index and the euro centricity of the dollar index, its going to be very difficult to see how all this turns out. One thing i can tell you is that the data is at the epicenter of much of this fed questioning but todays data was a bit better than yesterdays, especially if youre looking for higher pricing pressure, and its reflected in the market. Look at a twoday of twos on the short end. Twos are up about five basis points from the 55 close. They didnt quite get up. Another couple base points to reach yesterdays high yield. Tens were up four basis points, and same dynamic. So short and long end we see that todays data mostly neutralized. If you really want to Pay Attention to the big levels, you want to watch 62, yesterdays high yield in 2s. 204 in 10s and with the dollar index, same dynamic, but back up to 95 is what technicians say is needed to reverse some weakness that crept in that big down move yesterday. Mandy, tyler, back to you. Rick, thank you very much. Big caps bouncing back over the past month, but their smaller cap rifleavals are still strugg. A bull bear debate coming up. Plus todays powerhouse is home to our nations first library. This city is the fifth largest in the country. And has over 9,000 acres of municipal parks. Can you name that city . Im here at the Td Ameritrade trader offices. Ahh. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place that lets you visualize that information municipal parks. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim . For all the confidence you need. Td ameritrade. You got this. Im Sharon Epperson and here is your cnbc news update for this hour. President obama announcing that he has ordered a slowdown in the withdrawal of u. S. Forces in afghanistan. The u. S. Will maintain 9,800 troops through next year and leave a force of about 5,500 troops in 2017. After he leaves office. An increase in violence led to his change in strategy to leave afghanistan by the end of his term. Jack lew says the government will exhaust its emergency Cash Management measured by november 3rd if the federal Borrowing Limit isnt raised by congress. That moves up the time table by two days. Authorities in costa rica arrested seven men suspected of smuggling several tons of cocaine to the u. S. The crime ring is believed to be connected to the Italian Mafia and run out of a new york pizzeria. The number two reactor at sen dye Nuclear Power plant in japan has been reacted. Its the second one to be restarted. Protesters demonstrated in front of the plant. Thats the cnbc news update at this hour. Back to you. Thank you very much, sharon. Gold turning positive for the year. Barely but squeaking through. Prices are closing. 1,1 1 1,1 1,187. Silver, copper, palladium and platinum are all moving slightly higher even though the dollar is also on the move to the upside. Ty . Thank you very much. Lets take a look at where the markets stand with nice gains, roughly 1 for the major barometers there. The dow up 136, nasdaq by 44, and the s p by 17. 5 or thereabouts. Lets check in with bob pisani and Bertha Coombs is uptown following the tech mosque emove nasdaq. Nice moves here. Were at the highs for the day and Bank Earnings are helping. Goldman sachs, bbt all moving on the upside, keycorp, u. S. Bank corp as well on the upside and thats a good sign. Were watching first data very carefully trading right behind me. What you will see is its broke below the 16 price. What happened was about 15 minutes ago fairly large amount of stock just came right on the market. You can see dropped below that price. The key thing emphasizing all day they want to close at above 16. Here, meantime, weve had heavy volume in emerging market etfs today. People are tiptoeing back in. So malaysia, south korea, india, theres the etfs for them. All have had nice volume in the last few days, continuing that today, but were not seeing a lot of interest in one emerging market, brazil. That country continuing to have a lot of problems, a lot of investor issue. Here is the etf for that. You can see down today and the problem is petro gas, they were trying to issue debt yesterday and they werent able to do it. There wasnt enough interest. Down again today about 1 . Well keep a close eye on first data. Well go to seema mody for a news alert. Reuters quoting sources is reporting its in talks with an intalayan partner to open branches in italy. Its one of the major markets starbucks does not have access to. Starbucks responded to reuters saying this is purely speculation and rumors only but yet again still something we are watching. Potential expansion into italy. Tyler, shares are basically flat on the day. Thanks very much. Over now to nasdaq and Bertha Coombs. Bertha . Imagine that, starbucks in the birth place of cappuccino. We have huge volume on the netflix selloff after the disappointing earnings. Already trading in three times average daily volume but thats being offset by gains in apple today and the rest of the f. A. N. G. Gang. A lot of their competitors when it comes to streaming. Facebook is a stand out higher on an upgrade to buy with a price target of 115. The interesting thing is, thats not the worst performer. A couple down grades for sea gaseagate technology, garmin gutted after lower guidance having a tough loss in the crowded wearables business. Biotechs interestingly are bucking the trend in Health Care Despite valeant being subpoenaed for pricing. And chips are extending their gains. Finally go pro is launching a weekly cash video award to boost its platform. The company is going to give away 5,000 a week to the best edited video, 1,000 for the best video. Theyll also give prizes for stills, up to 5 million a vote. My vote would go for that video of these people who lost their go pro in the rattlesnake den. I cant believe they went back in to get it. Its just leave the camera. Leave the camera. Right . Thanks a lot for that, bertha. Stocks may be in rally mode, but the russell 2,000 has under performed the s p 500 in the past month. Is there value in small caps . That debate now. Sandy, make the case for being a bull on small caps. I think if you go back to the Third Quarter of 2011 you saw really, really rough period. Thats as bad as its been in the past several years, and so you look at the next quarter and it was actually a very positive quarter, probably up 14 , 15 , so i think were going to the similar period where it might things may have sold off this quarter but i think as you look into the Fourth Quarter, things will be a lot better for small caps. You can see that volatility working for us on the upside as opposed to what happened in the Third Quarter. You believe things are going to get better. Would you play the other side . I would, and i think its because the difference between that time and today is the underlying backdrop of liquidity. You had a positive liquidity event occurring through the fed promising qe infinity back at that time and the operation twist which really helped the smaller relatively illiquid market such as small caps to do a lot better. Given where we are with valuations today and the lack of liquidity going forward, theres a bit of a repres on the fed rate hike but they still say theyre going to do it. Of it doesnt look like a rosy picture for small caps. It almost sounds though wasif like you wouldnt just be a bear on small caps in the United States, you would also you wouldnt just be bearish on small caps, youd also be bearish on u. S. Large caps. Is that right . Well, what we do is relative value, and so when we say were underweight or relatively negative on something, these are smaller bets we take in our portfolios. So, yes, we have a slightly a neutral to slighty underweight to u. S. Large company but a bigger underweight to u. S. Small cap because the valuations are much higher and those expectations are much higher. Sandy granted that still means that doesnt mean there isnt opportunity in those markets. We think that going into more quality Oriented Companies is the right way to play it given the expected volatility were seeing. Understood. So sandy, lets get a little more micro if you think there could be better days ahead. Which ones are you looking at . Theres a handful we like. The Smallest Company i like is taser, 1. 3 billion market cap. They make the nonlethal weapons for police and military. With all the headlines, whether its ferguson, how do we stop all this force, et cetera . With their body cameras its actually theyve done studies it lowers the use of force by about 59 and citizen complaints by 89 . So i think its going to be Companies Like this that are going to stay in vogue and do quite well. Another company i like is a railroad called genesee in wyoming thats a best in breed short line rail with 16,000 track miles founded in 1889, but i think these guys will do quite well. Its down 40 due to lower volumes in australia as well as some of their metals and coal businesses but the pendulum always swings to far in both directions. Now is the time you want to jump into genesee when its at a tenyear trough multiple and offers a lot of value. Yeartodate down about 27 as you say. Thank you very much. Wasif and sandy, joining us on small caps. Go to power luncpowerlunch. Cnbe why market volatility is something to watch until the end of the year. China has sold more than 150 billion worth of u. S. Treasury bonds, so does this spell doom for the global bond market . Ron insana has a new article up on powerlunch. Cnbc. Com and hes here to tell us what these chinese sales really signal, if anything. Hey, they may be selling, so may be others, but somebody is buying because the yields are down. And tyler, if wed had this conversation six months ago and somebody said the chinese would dump 150 billion worth of bonds and it may be middle Eastern Central banks and chicken little would have been around. Rates were going to skyrocket, stocks would plunge, but theres demand for long dated paper. That yield more than 2 which is higher than the rest of the world. So china has done this not out of a repudiation of u. S. Fiscal policy, which was everybodys assumpti assumption. Instead, theyre selling to bring cash home. We want to raise cash. Its a sign of desperation. Its not a repudiation. Theyre selling. Who isclearly institutions need buy. You have no choice from an actuarial or regulatory perspective to load up on long dated safe paper. Thats just a part of the regulatory regime. You need to own high quality paper so there are natural buyers, yield or no yield. Thats who is in there right now on the other side of the trade. The fed would ultimately buy this stuff if somebody else sold it, theyre not in the game. You wanted to talk about something you heard from Rick Santelli. Hes not here to engage. Hes not. Im sure he will find a way. Hes a resourceful fellow. Why dont you fill us in and explain why you dont see it the way he does. He was talking about Jurassic Park by Michael Crichton that was made into a series of bestselling movies. He was making the point in complex systems where the scientists messed with dinosaur dna and ultimately in created mutant animals. And then the whole thing went awry because if you look at chaos theory which Michael Crichton was focused on in the book, you cant manage a complex system. Its inherent complexity leads to instability and chaos. Thats the premise of the book. Rick used it to describe why the Federal Reserve or other Central Banks should not be trying to control the economy. Having known michael, he interviewed me for the book raising sun his younger brother was my best friend for over two decades. Michael would have objected to the creation of the derivatives and the financial experimentation that wept on prior to the crisis as being the real issue. Its likes experimenting with dinosaur dna, plugging in the frog dna and creating an inherently unstable system to which the fed had to respond. He would have been more concerned about the financial experimentation than the necessary response after the crisis. He would have argued that the crisis was predictable because we had an unstable system going in. And that was the real problem, not the response to it. To be continued. I would imagine so. At 3 00 p. M. From mr. Santelli. Two italians who disagree. The italians disagree. There may be bloodshed. Im shocked. For more of rons thoughts on china, your Jurassic Park, whatever, go to cnbc. Com. The 94 billion victim of the crude collapse. Well tell you whos that still head on power lunch. Also in our series where we feature people with really cool jobs. Meet a man whose office is born to be above the ground towing advertisement banners along the skies of new jersey. What he gets paid and the craziest banner hes ever towed. Power lunch is back in two. The city in todays pow powerhouse is home of the Wharton School of business, host of the first thanksgiving day parade and the liberty bell lives here. Can you name that city. The city in todays welcome back to power lunch. Im mandy drury. Anhueserbusch inbev planning to sell bonds worth up to 55 billion to finance the beer brewers 106 billion takeover of sab miller. Northrup grunman is consolidating four businesses into three. The defense contractor also naming a new coo. And volkswagen recalling around 8. 5 million Diesel Engine cars in the United States, that is on top of nearly 500,000 recalls in the u. S. The shares currently down by 4 . See ma, what have you got for a market flash . Check out shares of csx hitting session highs over 1 despite news that the freight rail Company Plans to cut 300 jobs in an effort to trim its tennessee operation. This the company says is a response to lower coal traffic volumes. C sx said domestic coal volumes will decline by 20 in the four 9 quarter, a trend that should continue into next year. The stock is up excuse me, down 20 . Thank you very much. Time now for our weekly feature the powerhouse. The city is home to the Wharton School of business, were looking at philadelphia, pennsylvania, one of the undiscovered gems of real estate. With us is mike mccann. Home as well to the undefeated temple owls. Lets check out some philly stats. The median sale price, 390,000. Inventory just over 1,400 properties and they are listed on the market for an average of 108 days. Mike, lets go first to our listing at 730 montrose, unit d. 450,000 is the ask. Taxes of three grand. Three beds, three baths, just about 1,500 square feet of living space. That looks very interesting. Tell me about it and tell me where it is. That is in bela vista section of philadelphia. Its a converted convent where several condos were made. Its great for the first time buyer. Its just off the italian market close to the waterfront and three bedroom, three bath with parking all on one level. Restored about seven or eight years ago. And its a former convent, so you would feel yes. Something there i would think. Yes, and the Historic Church is on the block which is incredible. The first Italian Church in america. How nice is that . Lets go to the second listing which probably doesnt have those things going for it at 107 pine. 795,000 is the ask. Taxes 10 grand, 3 bateds, 2 1 2 baths. Tell me about that neighborhood and why you like it. Thats about 150yearold historic home. Its a villagelike setting in society hill just off of head house square. Very historic district. You have lamp posts, red brick sidewalks, the horse and buggy coming down the street. You can go to the penns landing waterfront or head out to the fa fair. Just off south street. Its a gorgeous residential area right in the heart. And ready to move in. The powerhouse of the week, 528 spruce. Theyre asking 2 million, taxes 18 grand, 3 beds, 4 1 2 baths, 5,000 square feet of living space. This is a huge one. Yes. This is 22 foot wide by about 90 feet deep. Elegant restored library den, Historic Society hill also, just off of stark, Washington Square park. Its about two blocks from independence square. The details, the moldings, the pine floors, everything has been restored to todays style. So it is a grand scale home in a prime location. Beautiful and beautifully staged there. Narrow but deep, boy. Thank you, mike mccann of Berkshire Hathaway home services. Come to philadelphia, tyler. Id love it. I will be down there for the Temple Notre Dame game end of the month, halloween. Ill be wearing a costume. Thank you, mike. Thank you. That i want to see. Got to send photos out. Now time for todays celebrity house. Model, actress, shv show host and author tyra banks has listed her befer hill escape for 7. 7 million. Theres four bedrooms, five bathrooms, 6,000 square foot villa with three fireplaces, a home theater, a gym, and floor to ceiling windows with breathtaking views of beverly hills. Beautiful. Okay. Tesla showcasing its autopilot capabilities for its model s. Phil lebeau is one of the lucky few that got to take it for a spin. Well bring that you story ahead. Welcome back to power lunch. Im mandy drury. Here this hours power points. Stocks hitting session high this is hour. The dow is up 135 points. Pfizer, j and j and jpmorgan are leading the charge. Financials, health care, and utilities are the leading sectors and the worlds biggest coffee chain headed to the home of coffee. Starbucks is in talks to open branches in italy, one of the few major markets where it has yet to make an entrance. Well bring you more in the next move. It feels a little sacrilegious though. It does but i think thats where mr. Schultz got the idea, by going to some of the cafe this is italy. Walmart lower, down another 2 there right now. The retailer blames wage increases for crimping profits. Kate rogers is looking at the trend of higher wages and the impact. As the fight to hike wages intensifies, businesses big and small are navigating the issue in different ways. More on that after the break on power lunch. Im melissa lee. Still ahead, the bullish case for walmart. One investor says right now is a great time to pick up this beaten down name. Also ahead, a tale of two real estate markets. Well tell you whats happening in new york and miami. And later on, why the pentagon is declaring war on wall street. Its coming up top of the hour. First, back over to you. Well look forward to it. Walmart shares are lower again today after dropping very sharply yesterday. I think it was the biggest one day drop in 25 years on a negative outlook. The retailer blaming wage increases forkilling profits. Its a bigger trend that were seeing. Kate rogers, its a very interesting story. Its got people talking. Absolutely. And its up to each individual business here, but the trend is pressure across the board to compete as the fight to hike the minimum wage intensifies. Danny meier announced tipping would be eliminated across the 13 restaurants under his Union Square Hospitality group. He said unfortunately many of our colleagues, our cooks, reservationists and dish washers arent able to share in our guests generosity even though their contributions are just as vital to the outcome of your experience at one of our restaurants. Meyer told the New York Times the move is needed to stay competitive as new york state implemented a 15 minimum wage for fast food workers. Los angeles, seattle also raised pay. 29 states and washington, d. C. , have wages above the federal four. Retailers including walmart, target, and the gap have hiked their wages. Even some on main street have implemented a flat increase. The goal is to remain competitive and make sure the fronted and the back of the house both feel appreciated. That is interesting. Im wondering does it also retain the workers. It absolutely does because like i just said, everyone feels more appreciated. Theyre hanging on to Higher Quality workers that are not going to jump ship and go somewhere else hoping and searching for higher pay. Its interesting to see Small Businesses because you always hear main street businesses cant afford to do this. Its cool to see businesses doing it on their own. Thank you very much. Great story. Thats it for the first hour of tyler, i believe youre sticking around for the send hour. I do. Get to hang around for the second hour of power. I will be joined by melissa lee. Great to have you on the second yhour. Im melissa lee. Here is whats happening in the markets right now. Were pretty much at session highs. The dow solidly in the green up triple digits good for a gain of 146. The nasdaq and s p up about a percent. Were at session highs right now. Were all keeping an eye on whats happening to the biggest ipo of the year. Shares of first data trading unchanged right now. Bob pisani has been following their every move. He joins us with more. 16 bucks is a key level. And thats it. And all anybody wants to see right now it closes with a 16 handle. Anything above it. First data trading right behind me. 15. 99. Had a bunch of volume about a half hour ago, some stock dumped on the market and it turned red. Its been struggling. This is going to be a little bit of a thing to watch going into the close. Meantime, albertsons did not price last night. There was word theyre going to try to price tonight but were hearing and david faber has been reporting its been postponed here. Thats the Third Largest drug retailer. Neiman marcus also announced they, too, would postpone. You might think the ipo market is in trouble but my attitude is lower prices is good news for the people who are investing. Average price 18 below the midpoint for the ipos have that come since labor day, about 14 of them, and theyve had a nice pop, 10 on average. And in the following days weve had an additional 6 . My point is ipo market has actually behaved very well since they started cutting the prices on labor day. Well see how first data, biggest ipo of the year, goes. Tyler, back to you. All right, robert. Thank you very much. T minus 13 days until the fed makes its next decision on Interest Rates or not. But wall street is not betting on an october hike. Theyre not betting on a hike this year at all. Lets bring in Steve Liesman with more. And you got some very interesting charts here. Are you serious, just 13 days . Didnt we just do it . We did. All right. We were there together. Big issue whats happened over the past couple weeks, even the past month, is the market is increasingly pricing out a fed funds rate hike. This is from the cme. This is their probabilities. Folks, theres a lot of controversy in the Economics Community over the math. Im going with the standard here. You can debate these but here is where we are right now. Only a 27 probability for december of a quarter point rate hike. 5 in october. You have to go all the way into the march april period right here before you get near 50 . Where was 50 before . It was back in this december january area. So just the past the 50 odds of a rate hike have come off. Let me show you whats happened to the january fed funds future and its very instructive. We were at 60 basis points for january 2016. At the beginning of november, almost a year ago, we were at 60 basis points. You asked me how accurate it was. Its 100 accurate now for where the market thinks the fed funds rate will be. Thats just two weeks ago. It brought us below that 50 mark. A big drop down with comments from fed officials and also so this is saying where where they believe the fed funds rate will be one year hence. In january 2016. Always january 2016. This one i can show you any month ahead. We chose this one because its the one you can see its just 16. 5 for right now. Thats where it is. Take a look at some of the issues. Why this has happened. Really its the market reacting to the commentary and the commentary on the data. We come over here to jobs. The threemonth average has come down do 167,000. So in a hike or not to hike it is a there it is, folks. Nonhike. I was hoping for a sound effect there. Ill help you. Inflation, unchanged year on year. The core is up but still theyre worried about what happens happening with Commodity Prices. It is a no. No. Well done, folks. Youre getting better. Here is our cnbc wrap it up. We were im going do this over my left shoulder. Were at 1. 7 . Slowly in the Third Quarter. Depends on what happens in the Fourth Quarter but right now it is a no. There was my sound effect. This is either a triple xx thing for a tictactoe thing. This is like americas got talent. There are those who would like to see a rate hike who say Interest Rates are at emergency levels but the economy isnt. Even despite this weakness, its not at emergency level. Thats an argument made by bullard and several other people on the fomc. The story is the response to that among some people is you know what . Weve had emergency rate hikes and this is all you get. So if you can a rate cut. You can imagine if we were not at zero what the outcomes would have been. They point out if i had my foot all the way on the accelerator and all im getting is 50 miles an hour out of that car, its not going to speed things up if i take my foot off. Steve liesman, thanks very much. Melissa. Tyler, walmart shares adding to yesterdays losses after the retailer slashed earnings forecast. There might be key parts to the story that some are overlooking. Lets bring in Courtney Reagan with more. Lets face it, analyst, traders were caught offguard yesterday. But if you strip out the shock of the multiyear profit decrease, look pass the messy way walmart communicated it and look at the reasons why, it might sting less if youre a longer term investor. Walmart is investing in its workforce. 2. 7 billion over two years. Its adding department managers, adding in accountability levels. Yes, the cost is more than analysts models. Perhaps it should have been doidone sooner or gradually over time but maybe products will be more motivated and have more money to spend at walmart. Then walmart is investing in ecommerce. Roughly 35 billion in cap ex over three years. Yeah, it should have done it sooner. It didnt. Now its necessary pain for survival. Wall street is less forgiving with the Mature Company for investing than with, say, amazon, which has been investing since the beginning. This is now the cost of catch up. Less costly than extinction you could argue. Over the next three years walmart plans to generate 80 billion in cash. What does a Smart Company do with smash . Invest for the future . Check. Offer dividends . Check. Buy back stock . Check. Walmart is buying back 20 billion in stock. Shares are still down 2 today. 32 this year. But some analysts like youre about to hear think walmart is doing exactly what it needs to do even though it hurts. Melissa . In terms of the fallout though, in todays session were still seeing names like a target really being dragged down. The fear here is walmart is going to be engaging in a kotz war and thats going to be bad for margins across the board. Are we seeing it reflected on wall street today . Possibly. Again, there is part of that that is kind of unaccounted for. Walmart mentioned 25 of part of the 25 of the decrease for the 2017 earnings has to do with price investment which basically means the cost of them lowering prices. We dont know where, we dont know when, we dont know how much, but that could pinch their margins if others have to follow suit. That could be an issue across the board. So if you see names like target or some of the direct competitors falling, that could be why. Im not so sure that would be why a macys or nordstrom would have fallen crediyesterday. Im not sure everybody understood what was going on until the dust settled. Lets braing in chad morganlander, hes one of the bulls and hes here to tell us why. Chad, explain this to me because walmart is basically saying for the next couple years its earnings and revenues are going to be less than expected. Why would you stick with a stock that could be dead money for two years . Repulsed everyone is, revenues will continue to grind higher a the a rate of 2 to 4 . Free cash flow is roughly its about 19 billion and its 190 million market cap. The vaulg nluation now is cheap than it was at 2009 levels. We believe this company will continue to grow. Yes, this is transitory, theyre reinvesting back into the business. Nobody really likes to hear that. Free cash flow is ep ewe lehe b. We feel as if the overall trajectory is going to be for the stock to go over the market wlg in well in excess of 5 to 10 . I think theyre just thinking what does the stock price do in the year where its finding its way. If youre a Hedge Fund Manager and your prospects are six months to nine months, perhaps this is dead money. If youre looking three to five years, this has Dividend Growth of roughly 6 and the operating margins after this year coming up is going to start to go higher. When that happens then youre going to see everyone thats selling the stock flad book into the stock. So you have to have longterm prospects. You also own target. What caught my eye was Credit Suisse specifically said over the next 12 months its clear walmart will be engaging in a price war and lowering prices aggressively and target will follow suit because its always been a watt mart leader and that will pressure margins there. Are you concerned on the flip side of this story about target . I think that this is going to be a transitory story, and when it comes to target as well, we believe that the stock price is going to be going higher. When it comes to Revenue Growth, perhaps it will take about 1 off of the expectation for Revenue Growth for target, but we do believe that that target will over the long run beat the market. Consumption patterns in the u. S. Over the next 18 months will go higher. Theres Global Growth concerns more you believe they will be shopping more. We do. Check out shares of Valeant Pharmaceuticals after the company was subpoenaed by u. S. Prosecutors over price increases of its two heart drugs. Tim chang has a buy rating on the stock but he lowered his price target to 250 from 275 just last week. Great to have you with us. Thanks, melissa. Theres an unknown regarding what is going to happen with the subpoenas. At the same time if we were to sort of talk about this stock from fundamental standpoint, if you rolled back the price increases of those two heart drugs, what sort of impact, if any, would that have on valeants eps . It probably would only impacteimpact eps by 30 to 40 cents a share. The impact isnt really that material. Its certainly the perception. Its the media that has really been on attack on valeants business. Our view is that valeant is actually one of the most diversified Specialty Pharmaceutical Companies not only here in the u. S. But globally. 90 of their business isnt really tied to high priced products. In fact, they have a very sound business we believe. Beyond the two heart drugs though, are there other drugs that could come under scrutiny for being increased in terms of the price dramatically . Well and if you back those out, what sort of impact im just trying to figure out what the worst Case Scenario is from a financial standpoint . Its about 10 of revenues that are in legacy, older products, and thats historically where you do see higher prices. 11 billion of total revenues, if you strip that out, the earnings would probably still be around 9 to 10 a share. So our feeling is that valeant when they report next month will provide more detail as to how much that legacy business really makes up of their total profits. Okay. So we like the name. We think its a buy on weakness here. Tim, thanks for joining us. Th tim chang of btig. We have much more coming your way in the second hour of power including a tale of two real estate markets. Were going to check in on the high end in new york and in miami. Also ahead, more cranes, more pains. Thats the title of one analysts report sending a stock to a new low today. And later, the 94 billion victim of the crude collapse. Well tell you whos th s thatha when power lunch returns. [announcer] sundays your last chance to save big during sleep trains triple choice sale. For a limited time, you can choose up to 48 months interestfree financing on a huge selection of tempurpedic models. Or choose to save 300 on beautyrest and posturepedic mattress sets. You can even choose 300 in free gifts with sleep trains most popular Stearns Foster mattresses. The triple choice sale ends sunday at sleep train. Sleep train your ticket to a better nights sleep welcome back to power lunch, everybody. Im tyler mathisen. Lets talk about some real estate, specifically two big things happening right now in new yorks market. First, a big boom in luxury residential building and, second, a huge shift in commercial real estate, specifically a lot of people moving downtown. Lets talk to a man who has his hands in both of those sectors. Larry silverstein is the ceo of silver teen propertistein prope. He joins us from the floor of the iex where theyre holding a Charity Event to benefit the Muscular Dystrophy Association. Welcome and congratulations about your work with mda. We appreciate that as does everyone. Thank you very much. Lets talk about the Residential Market first. There is no shortage of new Luxury Properties in new york city, and there is seemingly no shortage of buyers and or renters. Where is all the money coming from and is there anything out there beyond the horizon that has you worried that that money could dry up or slow . Well, truth of the matter is the amount of Wealth Creation thats developed around the globe is nothing short of phenomenal. And it would seem that more than our share of that wealth is moving toward america because people want to put their money where they feel its safe and where it could produce some results for them. And so generally as the money comes to america, the first stop that people prefer is new york real estate. Hard assets in new york. And so what youve got is are people coming with significant amounts of capital and investing it in incomeproducing real estate in many cases. Their yield structures are down to returns of 2. 5 or 3 , which is not high by any standard. Its kind of relatively low. But people know that money invested here will be very safe and productive over the long term. Are you similarly im sorry to interrupt. I thought you were concluding there but you can pick up where you were leaving offer and where i interrupted you. You know, people are concerned about slowing economies or particular economic worries in china, in brazil, but do you find sort of counterintuitively that that might hasten the flow of capital from those countries to new york . Well, the one thing we can tell you is that wharf is goite going on in the world in china, the brazil, or the middle east, for example, it hasnt seemed to slow at all. If anything, its accelerated, and so the movement is there, its real, its existed now for some time. Seems to grow however with time, and the flow is constant and very real, very significant. And so it creates a pressure in the marketplace to find new product, in many cases to build new product. So one of the reasons you have this flow of the construction of new luxury condominiums in new york is because so many people are coming here with a desire to invest in those condominiums, and that creates a dynamic of its own. So the flow and theres no sign of that changing. The flow is unabated. The people are unabated and that would sense that the rise in rents is not going to abade at any point. Lets turn to the commercial side. Bring us up to date on where you stand in terms of rentals and tenants in some of the Signature Properties that we all know down at the World Trade Center and what is next in the pipeline. Take us through that quickly. Well, weve built on here several new high rise buildings, the largest of which is obviously one World Trade Center. We used to call it the Freedom Tower but its known as one and thats owned and operated by the port. We have constructed tower seven, fully rented office building. We finished that a few years back. Weve also finished tower four which is the building from which were currently broadcasting. And we have under construction tower three, which is yet larger than tower four. Tower four is a 72story building. Tower three will be an 80story building and then shortly we expect to announce the conclusion of a lease with 21 tion century fox and news corp. Which will launch construction of tower two. That will be yet a larger building, almost 100 story this is height, quite large, and the murdoch interests we expect will be leasing about half of that being, about a million and a half feet. All of that is going frooood do here. Additionally, there are a number of hotels under construction. The most significant to us is the Four Seasons Hotel here on park place and the four seasons luxury condos above it. So thats symptomatic of the level of activity down here. Whats also exciting is to recognize the flow of tenants, the flow of occupants, largescale occupants into space down here. Of course, in tower one conde nast has leased about start with a million feet, theyre up to 1,200,00 feet and that building is twothirds occupied and doing very well. As i said earlier, seven is a building with about 1,700,000 feet. Its fully leased. Now tower four which is twothirds leased, this building has 2. 2 million square feet of space in it and what is happening is you have a whole group of media tenants right, right. Technology, advertising, media, the Creative Arts coming down here in a steady flow and that flow has now grown, and so weve got group m signing on to the base of the building in tower three. Right. As ive indicated the murdoch interests we expect to lease a little bit more than 50 of a 2. 8 million square foot building in tower two. You put all that together and youre talking about 7 million square feet of commercial activity and thats moving and its moving very definitively and its very exciting thing to see. But these are companies who never were down in Lower Manhattan before. Lower manhattan used to be permeated by financial tenants. Today its very different. Its very different and its very hip both as an Office Address and also increasingly as a residential address. Mr. Silverstein, continued good luck to you and good luck with the mda the multiple Muscular Dystrophy Association event you are associated with. Later in the show well head south to miami and talk about why that city is starting to see some cracks in the luxury he will real estate market. Rein time, melissa. Still ahead, the pentagon is drawing big battle lines with wall street. The full details ahead. First, phil lebeau is kicking the tires on teslas new auto poi lot technology. Hey, melissa. Today thousands of tesla owners are getting their first taste of semi you a ton moss driving and what its all about. Theyre doing it with teslas autopilot. Well shou you the technology and see what its like when power lunch returns. Aaflac w you the t and see what its like when power lunch returns. Aaaaflaaaac. Someones sandbagging. Id be tired too. He paid my claim in one day when i got hurt. One day . Serious hustle. Serious duck. In just one day, we process, approve and pay. One day pay, only from aflac. Ah a 401 k is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable, professional. Would you trust me as your Financial Advisor . I would. I would indeed. Well, lets be clear here. Im actually a dj. [ dance music plays ] [laughs] no way i have no Financial Experience at all. That really is you . If theyre not a cfp pro, you just dont know. Find a certified Financial Planner professional whos thoroughly vetted at letsmakeaplan. Org. Cfp work with the highest standard. Welcome back. Tesla showcasing its abilities. Phil lebeau is one of the lucky few guys who get to take it for a spin. Youve taken it around the block a few times now, huh . I have. And actually i say ive driven it now probably five or six times where ive had a chance to test the tesla autopilot. Were going to put it on. This is how you do it. Hit this control switch twice. You can see that im driving handsfree. We should point out the purpose of this technology is not that you can always drive handsfree but on long drives, on the highway it stays in the lane. It will also tell you when its okay to lane change and when its not. See that car right there . It wanted to lane change, it waited until it went by. Now on its own im not doing anything, we just changed lanes. This is one of the features with tesla autopilot. It is not only keeping you in your lane, regulating your speed, and weve seen that with other automakers in terms of how they have their system set up, but it can also do lane changing, parallel parking and theres side collision avoidance. I know a lot of people are sitting there saying tesla is crazy to give people this opportunity to drive handsfree. Is this a smart whied . Even yesterday elon musk said this is an early test of this service, of this software, and listen to what he had to say about the idea of people taking it easy in terms of early on using tesla autopilot. The release of autopilot and its autopilot version one and we still think of it sort of as a public beta, so we want people to be quite careful at first with the use of autopilot. So, guys, thats elon musk yesterday. Were lane changing right now. Again, all i did was signal. The model s did the lane change completely on its own. They will remind you and it sent a little chime saying put your hands on the Steering Wheel so we know youre still here, but you can essentially go up in speed or down in speed when it comes to the model s and i know we have another camera right here. See, were going by and its all handsfree. A taste of whats to come not just with tesla but in the future with all automakers. This is semi autonomous driving. Were headed to complete autonomous driving but were a long ways from there. Theres a lot of police on the road. I know it well. How fast are you going right now . Right now we are doing 60. So its 55 miles per hour. You can go up or down in terms of speed. Very interesting. Very interesting. Will it slow you if you come up too quickly on a car in front of you . Yes, yes, it will. In fact, weve had that happen many times when weve been driving with autopilot today. It regulates your speed so that you can accelerate up to the speed that youve set or if theres a vehicle in front, it will slow you down. And, again, it sends a periodic chime as it is right now in the Instrument Panel saying hold the Steering Wheel. Thats not their way of saying you cant have it engaged. They just want to know youre paying attention behind the wheel and again i took my hands off. The point here is, tyler, this is semi autonomous driving. Not complete autonomous. Looks like were losing phil. Thats what you get for broadcasting live while autopiloting a car. Thank you, phil lebeau. We are watching shares of starbucks, meantime. They are slightly higher. The worlds biggest coffee chain is reportedly in talks to open in italy where it has yet to make an entrance. On the line is matt defrisco with a buy rating on starbucks. Thank you for phoning in. We appreciate it. This is a curious market to enter when you think of italy, you think of a lot of great coffee thats not very expensive. How big of a market could this be for starbucks . I think it could still be relatively small. I think its more of a signal to say they can go everywhere, that no place is out of reach. But if you look at Something Like germany or france, they only have a little under 300 stores in either of those countries, so a little under about 100 stores in france and about 300 stores in germany. So i dont think this is im sorry, 200 stores in germany. Its not that big of a an opportunity. I would place it in line with one of those markets. Why bother . Well, i think certainly the inspish rati inspiration came from italy. Hes saying im going back to where i was inspired and our coffee heritage and quality can match able so lets go to the birth place of he is press sew. Thank you for your analysis. Lets go to jackie deangelis. Crude prices closing lower on the day. Over 46. So off of session lows. The issue today, of course, was the report we got about the inventories. A build in crude, a large build by all accounts, even though we do expect it see moves like that seasonally at this time of year. Interesting enough, it is refinery turnaround season. This is the period when traders pardon me, the refiners are not using crude to refine product and that is why we got a draw down in gasoline. Goldmans bs curry out this morning saying he thinks oil prices will stay under 50, will go lower, but that 20 scenario not big chance of that happening anymore, tyler. Back to you. Thank you very much, up next, the 94 billion victim of the crude collapse, and we will tell you whos that when power lunch returns on cnbc, first in business worldwide. Ts why i dug this out for you. Returns on cnbc, first in business worldwide. Iwhen power returns on cnbc, first in business worldwide. Swhen power lunch returns on cnbc, first in business worldwide. When power lunch returns on cnbc, first in business worldwide. Ll be writine 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. Sup jj . Working hard . Here at the Td Ameritrade trader group, they work all the time. Working 24 7 on mobile trader, rated 1 trading app in the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of the other competitors do in desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivative pricing model, honey . For all the confidence you need. Td ameritrade. You got this. Im Sharon Epperson and here is your cnbc news update at this hour. Iraqi shiite fighters advancing on isis militants. Thick smoke could be seen billowing from iraqs largest refinery. Its strategically significant as it lies on the road to mosul which is also held by isis. Benjamin netanyahu says hes perfectly open to meeting with Mahmoud Abbas to halt a wave of Israeli Palestinian violence. Netanyahu has accused eye ba ed inciting violence. Oscar pistorius can move prison and move to house arrest next week. The double amputee olympic runner has served nearly a year of a fiveyear sentence for shooting his girlfriend to death in 2013. And yahoo is trying to phase out pass words with an update to its only application for its email service. Theres a new option called account key which allows users to sign in by pressing on a notification sent to their smartphones instead of typing in a password. Yahoo believes the new feature will become more secure. And thats cnbcs news update at this hour. Back to you. Thank you, Sharon Epperson. The fall in oil prices is good for the American Consumer but punishing for the Oil Producers of the world. Ecuador is now in the middle of a cash squeeze. Cnbcs Michelle Carusocabrera sat down with the countrys president who is struggling to fill that revenue gap. Michelle . Ecuador produces half a Million Barrels of oil a day, nearly all of it by the state, but with the precipitous drop in the price revenues are down sharply, too. According to moodys, oil revenues in the first eight months drop 55 to 1. 1 billion. Ecuadors oil basket averaged 79 a barrel. The annual budget was based on the assumption it would be 79. Government spending was increased dramatically. Now, of course, the revenue tide is turning so theyre seeking private investment to help fill the gap. I interviewed him when he was in new york recently where he also met with investors whom he was hoping to entice to ecuador. And i asked him why all that spending, he calls it investments, hadnt paid off and why he found himself in this pickle. In economics like in life and you can have good decision but bad luck. We had bad luck this year. If this progress would have been would have occurred next year, it would have been much easier. Right now we are paying for the new mega so all of this is a big turnarou turnaround. The fact hes hoping for more private and Foreign Investment shows how much he needs the money. Net Foreign Direct Investment has been pretty negligible. Less than 1 billion a year for the last few years in an economy between 94 billion and 100 billion in size. You can see more of your interview with the president at cnbc. Com. Tyler . Michelle, thank you very much. Shares of netflix meantime down today after weak results and concerns about subscriber growth. And United Health also lower after it reported results and offered weak guidance. So what should we have heard from companies so far this earnings season . Does it scare you . Plus my name is steve jordan and i get paid for this. What it takes to be a banner tow pilot coming up on power lunch. Today, were seeing new technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. Sometimes they just drop in. Always obvious. 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. So far 9 or 47 companies in the s p 500 are out with earnings in quarter. 74 have come in above estimates, 11 met, and 15 have missed. Erin gibbs says earnings expectations where plummeted in just the past week. Its great to have you with us. Certainly weve gotten a lot of data points from various sectors, jpmorgan, Goldman Sachs, netflix, all of those were earnings. Where are expectations coming down the most . Right now im seeing it info tech, staples, and energy are the big losers. Were really seeing it across the board. Previously you really just saw Energy Moving these estimates down, but for Fourth Quarter, youre seeing estimates come down in all sectors. Seems like a bad thing, erin, but on the fas, but if you really take a look at the setup, isnt it better these expectations get ratcheted down ahead of the reports to smoobt out the volatility once the companies actually report. Q3 earnings have been fairly stable. Were still expecting about a negative 5 , typically they tend to be for the s p 500 it tends to beat 4 . Theres still a possibility were flat. Whats concerning is Fourth Quarter estimates are the ones really coming down, so much so its taken down the entire 2015 annual estimates by an entire percentage point. So we were expecting 2015 to be kind of flat and lets say people beat for the next two quarters, maybe well end up with some Earnings Growth, but right now were looking at being so far down were already looking at 1 down for the year. And maybe its possible that we could actually see negative Earnings Growth for 2015 if things keep going the way they have been. Wow. Lets talk about one stock thats reporting after the bell today and thats wynn. Certainly the expectations have been ratcheted down to the floor practically when it comes to the macao casinos. What are we expecting when we see wynn shares higher going into earnings report. Like you said, its really been all about macao. Revenues are expected to be dropping by over 25 . The problem is they have seen the visitors, the number of visitors increase, but the high rollers have not been coming back. Theres still a major obviously a corruptions crackdown and china just has not seen those high rollers come in so your reef knews are still plummeting and there hasnt been a reverse in the trend even with the higher visitor numbers. On top of that, they look fairly valued. Theres not a lot of lets say low valuation even with these depressed revenues, so anything could push the stock down. Erin, thanks a lot for joining us. Erin gibbs. Speaking of wynn, it could be a big earnings mover tonight after hours. Tonight at 5 00 on fast money, well be trading and watching the reaction of wynn shares to its earnings report. Tyler . Melissa, time now for our series where we feature people with really cool jobs. Interesting ones. Today we had a man whose office is 400 feet above the ground. Youre going to want to watch this. This is cool. My name is steve jordan and i get paid to be a banner tow pilot. A typical day i will get here about an hour before we take off. Ill pull the plane out of the hangar, fill it up with fuel, check the oil level. Make sure nothing is broken. When im ready to tow a banner, well start up the airplane, get inside, taxi to the runway and take off. Theres a rope inside the cockpit that we can raise and lower. We take off with it raised and we lower it down. Come around the pattern, dive towards the ground at two pulls that have a stroung between the. When we are five feet hoff we pull the stick back, the bam swings between the poles and grabs the hope and the manner comes off the ground. The trickiest part of a run is definitely picking up the banner. We have our own Training Program where we learn how to do it. Its unlike anything else i have ever done. The best part of this job is the freedom. We take off when theyre out there doing our own thing. Its pretty peaceful. I dont know about you, but i have always wondered how they attach those banners to those planes. And now i know. Jordan tows banners from cape may all the way to sandy hook in new jersey and find out the craziest banner steve has ever towed right now on our website, powerlunch. Cnbc. Com. Melissa . I hope its a familyfriendly banner, tyler. Who knows. It is the jersey shore after all. Thats true. Coming up, is miamis hot Luxury Real Estate market starting to cool off . Were taking a trip to south beach. Before we go, take a look at how some of the most widely held stocks are trading in todays session. Alphabet, apple, microsoft, and jpmorgan higher across the board. Who knows. Stocks are trading in todays session. Alphabet, apple, microsoft, and jpmorgan higher across the board. Who knows. Stocks are trading in todays session. Alphabet, apple, microsoft, and jpmorgan higher across the board. Romantic moments can happen spontaneously, so why pause to take a pill . 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For a free 30tablet trial go to cialis. Com market in miami may be showing some signs of slow down just a little bit. Robert frank slows me now. Its all relative to miami. Sales of Luxury Real Estate in miami down 8 notice Third Quarters. Average sales prices down 5 rs and inventories up 62 . Is miami overheating . Joining us is sonata adzam. Last time you were on you were talk being 43,000 new units coming on the unit. How is this winter selling season shaping up . This winter season is going to be a season of Sustainable Growth because the frantic piece that the miami market was growing is over. What were seeing now based on the latest report is that the fundamentals are very, very strong. So we have decent amount of inventory, but dont forget, we came from the time just a crazy pace. Exactly. And we didnt as much inventory. So lets go to the hot building in miami, which is on miami beach, its called fiena house and the big numbers out this have building are amazing. All the hedge fund guys, howard lawyer, kim griffin, all these guys buying in this build. Why is this the building. It is the hottest building in miami right now and not the faint of heart. You have to be a serious baller to be the faena. Why . Is this location or design . Its a combination of things. First and foremost its actually lifestyle and location. This is not just one building. This is a billion dollar project that will comprise additional art and cultural and social facilities and two hotels. So its one of two residential towers. I see. You have Norman Foster designing it. I want to talk about the penthouse which as we reported and as has been widely reported was purchased by ken griffin for 60 million is. Penthouse all three of those levels. That is the penthouse. 12,500 square feet of living plus 9500 square feet of outdoor space so its massive. And you have a 70 foot pool on top. He has his own private pool that really is the best property. As of now he is single so it is the ultimate bachelor pad. Tyler, back over how. I will toss it over to melissa. Coming up, can defense stocks help protect your money . Power lunch will be right back. Hello, ken jennings. I havent seen you since that tv quiz show. Hello, watson. You can see now . I can recognize people, analyze images and watch movies. Well i wrote a few books, did a speaking tour, i. Ive been helping people plan for retirement. And i help doctors identify cancer treatments. Is that all . I recently learned japanese. Yeah, i was being sarcastic. I havent learned sarcasm yet. I can help with that. Every insurance policy has a number. But not every Insurance Company understands the life behind it. For those whove served and the families whove supported them, we offer our best service in return. Usaa. We know what it means to serve. Get an insurance quote and see why 92 of our members plan to stay for life. Shares of authorize tlop up 43 , one of big defense contractors buying back their own stock but thats not making the pentagons big money man happy. The underservice of defense for acquisitions. What did he have to say . The man who writes the checks at the pentagon is throwing his weight around. Even though he is constrained by what he calls this crazy sequestration thing but in this environment the big defense players have announced all these share buy backs, but since a lot of the profits buying back those shares come from the pentagon frank kindle is talking to the companies and thinks the money could be put to better use helping their number one client, the u. S. Taxpayer. They are free to do that. I would personally prefer them making capital investments, doing research and development to get ready for the next round of Defense Budget inn kreefss which is inevitably going to occur. Im concerned about the u. S. Technological superiority and as i look at china and russia i think we have cause to be concerned. We need to be taking more risk if we will be the number one military on the planet, Cutting Edge Technology that is a generation ahead of everybody else thats out there we have to take ris snook now, the Defense Companies say they are already doing r d. As for share buy backs tlor tlup tells us their priorities are investing in the business and returning excess share to our shareholders, we believe these brierts are serving our shareholders in the company well. In a half hour what he has to say about consolation. Back to you. Jane wells, thank you. Lets bring in one analyst who does not see eye to eye with the defense undersecretary. Howard rubell. Howard, great to have you with us. Should we be concerned as americans that perhaps we are not advancing technologically and perhaps other countries could be eclipsing our technology because of the lack of r d spending. Its almost two questions you have asked. Okay. The first one s sure, we should be concerned that the industry is investing enough and i think they are. And the second thing is are they doing it properly. If the pentagon doesnt give them opportunities to earn returns on that investment, then they shouldnt be spending the money and if the programs get delayed, pushed to the right or wrecked by congressional indecision then they have every right in the world to wait because they have both their employees to carry about, it would be dumb to hire smart engineers and then have them do nothing or it would be inappropriate to waste shareholders money. Management has a fiduciary responsibility. So basically you are saying that the pentagon has a hand in this as well because they are not giving these companies any sort of clear pipeline as to what the demand to be or that they are actually going to be get paid for this research. Exactly. If you want to ask for more risk change the incentive profiles so that the returns can be higher. Currently returns are typically capped as a percentage of sales at 15 , but if the Companies Lose money its an infinite loss. Of course they have to be careful. Last question, howard, and i want to switch gears a little bit it has to do with boeing, we saw a sharp sell off in yesterdays session at comments that the delta ceo made about an aircraft bubble, there are lots of wide boetsds coming off leases in the coming years. Do you agree with that notion is that there is a bubble and prices should be lower. I think the ceo of delta did a nice job of talking his own book. We found that the number of wide bodies that are for sale is modest, especially 777 relative to the market. He is hoping to get a better deal. I dont think he is going to find it. Whats your topic in this space, howard . Its boeing. Its boeing. And the second one if we had to pick it would be ratheon. There is a host of things going on in the mid east and they are using their munitions for the right things. Howard rubell of jeffreys. Tyler, i dont know if you noticed this, but we do have a rally on our hands, we are close to session highs with the nasdaq up 1. 5 , the s p 500 up by more than 1. 25 , financials a big winner on the day with the etf up more than 2 , bank of america up 4 , citi group up almost 5 . Were seeing big mofls as we enter that final hour of trading. Last hour we were a little bit below 1 gains on those markets and now above and significantly above 1 gains. Folks, thanks very much for watching. Yeah, closing bell starts right now. Welcome to the closing bell, everybody. Im kelly evans here at the new york stock exchange. And bill griffeth. Yes, look at this. A broad market rally right now. The dow up 179 points, but dow component Goldman Sachs has turned around after being down about 2 earlier in the session. Yeah, look at it up there, its the third strongest gainer in the dow, up almost 3 , jpm up more than 3 today. The pharmaceuticals and banks leading the way there. The biggest ipo of the year, though, first data is falling flat on its first