Transcripts For CNBC Power Lunch 20160314

Brent lower by a dollar, back below 40, decline of 2. 6 . More on the markets in a moment. First we kick things off with tensions running high on the campaign trail politics turning violent. This weekend, the fists come at a trump rally in illinois. The gop frontrunner blaming Bernie Sanders backers. Look at that person, that foolish person. All right, get them out of here. Get them out. Send them back to bernie. Send them back. This isnt the first time violence has erupted at a trump event. Watch this attack from just last week. Secret Service Agents had to make their move to protect trump after someone tried to get on the stage. If you see somebody getting ready to throw a tomato, knock the crap out of them, would you, seriously. Just knock the i promise you, i will pay for the legal fees, i promise. I promise. Hot rhetoric on the campaign trail. Tensions rising there. And meantime we have exclusive new data on who wall street wants to see win the white house this november. Steve liesman joins us with cnbcs fed survey result. A busy week ahead for you. Lets start right here. The president ial campaign on economic outlook. The full results tomorrow, what they look for for the fed, but out of the president ial campaign, 56 saying the campaign itself is negative for the economy. 39 saying no effect. Only 5 say it is positive. As to which party they would like to see win the president ial race, 40 would like to see republicans, 18 democrats. Over here, 42 say it doesnt matter or they dont know. Thats higher than we have seen and we have done this during other president ial campaigns. A little bit of indifference out there. And now on to the candidates, which candidate would they want to see, which one is best for economic policies . Zero percent of our 42 respondents, including economists, Fund Managers and analysts say Bernie Sanders. 8 rubio. 11 cruz. 13 trump. 16 clinton. And Governor John Kasich wins here, 42 say he will have the best economic policies. How about who would be best for wall street . Another goose egg for Bernie Sanders here, coming along 35 for kasich, and 22 , clinton does a little better in there. To me, one of the things you see here is kasich is the frontrunner here and then clinton holds the number two spot. This would be who would be best for the stock market . Best for economic policy. Who are we talking to here . Who are we fixed income types, 42 the establishment. 42 someone said the establishment over there. Your mike is open, michelle. The establishment. Gallery. A heck of a peanut gallery. I was i was wondering how it broke down by party lines as an aside so we can see whether there is any overlap. Thats the next thing im going to do is do a cross reference here, cross tab. Lets look here. Cruz gets zero percent. Not a lot of support for cruz. One thing they dont like, i saw in the commentary, they dont like the fed policies of cruz and rubio. They think it is important to the federal reserve, remain wide open. I got a few comments here. Do you have the comments . We promised everybody anonymity who answered the questions. Im favoring kasich because of his willingness to work across the aisle what michelle was whispering over there, which i believe the stock market would be more comfortable with. Another saying clinton is only good for the stock market if republicans maintain control of the house. This person looking for a kind of clinton block. A paul ryan alliance, the way clinton and Newt Gingrich were together. And associating any of the candidates with the word best is difficult to do. They strike me as equally awful. Steve liesman, thank you very much. Back to you, guys. A huge show coming your way this wednesday. We should point out. Big show. Big show. Why . Because that lady, we have the fed decision on wednesday at 2 00 p. M. , and at 2 30, Steve Liesman will be there to ask questions at the fed News Conference. Well carry it all for you right here. The big shoe, power lunch. Right now, though, lets move from wall street to main street. Voters in both ohio and florida head to the polls tomorrow. They will vote in their primaries. So what candidate do some Small Businesses want to see in the white house . Lets bring in roger jarman of atlantic models, a florida based Small Business that makes model airplanes and michael stannic, Vice President of hunt imaging, a cleveland, ohiobased printing firm. You must be feeling pretty good because you heard steves piece, 42 of those surveyed on wall street said that kasich, your guy, would be the best for the economy overall. Why do you support his economic policies . We feel that not only his familiarity with how washington should work, but his ability to lead and administrate has proven him to be a very strong candidate who can bring it back to where we need to be, he has been very supportive of Small Business in ohio and while all candidates support Small Business, verbally, sort of like motherhood and apple pie, it doesnt always make it into policy. You know as a Small Business guy, every politician will promise the world. Why do you think hell be able to deliver . I think hes shown it in ohio. One thing in ohio, we start the Common Sense Initiative. He initiated it, Lieutenant Governor mary taylor runs it, and it is a program where every policy, every rule and regulation that is proposed from the state of ohio has to go through the small through the Common Sense Initiative to be reviewed for its impact on Small Business and adjustments are suggested back to the department or the legislator who is proposing it so we can make changes that limit the impact of Small Business from a time and cost perspective. So, roger, lets go to donald trump now. Do you feel like you know enough about Donald Trumps economic policies to make you feel good . Doesnt have a voting record, career record, but not a voting record. Why do you support him and Small Business side . Well, first of all, nothing worth having is worth having easy. And i look at trump and his experience, i happen to be a customer of his about six months ago for an event we had at their Doral Golf Club here in miami, and it was the difference was night and day on how they run their operation from the previous operator. And then because of that event, we happened to donate a model to the employees at the hotel, thats what we do, so we donated a trump model. And then as time went on, and we had the opportunity to meet him at the rally, i just looked back through him and i think needs to be said that before i was for trump, i was for Governor Walker. Ive been with rubio, been with jeb, but every one of them disappointed me because if you look at today, i dont see anywhere in the government where we can say this is a shining star of results and efforts. And hes obviously mr. Trump is like your third choice, just sort of the best of the rest . No, im very soundly with him, because this process started some number of months ago. And i dont believe trump was even in the market when Governor Walker was started in the race. And i think a lot of it, too, when you hear mr. Trump at the beginning, ill take this deal, you kind of have to chuckle a little bit and over time listen to him, ive tried to read up on all of the candidates, and i think of the Opposition Research that must be going on about mr. Trump right now and if they had a anything on him, you would bet that they would be all over the airwaves now. Roger, it is michelle here. What do you make of all of the violence over the weekend . Does it bother you . A theory about it . What do you think of donald trump saying you see somebody i think it is horrendous that these agitators would be allowed to come in and take his ability to present his side. Number one, i dont for instance, i respect very much president obama, Bernie Sanders, howard dean back before, because you knew where they stood and they did what they said they were going to do and they all tried to do that. The other politicians as time has gone on, have shown that they just change their core values from day to day. Mr. Trump, yes, hes a little hard to get used to, but hes a good leader, his employees love him from every exposure ive seen from him and they run a tight ship. Got it. We are going to wrap it up there tomorrow. A big day in both your states. Get out and vote. Roger, michael, thank you. Thank you for having us. Take care. On deck, more people are paying their car loans late. Is this reason for broader concern . Plus, the incredible story of how bomb sniffing dogs found two hell fire surface to air missiles on a passenger plane. Were going to bring you the latest there. And millennials may be changing the game when it comes to Money Management. Were going to talk about the continued disruption of wall street. Hey, jesse. Who are you . Im vern, the orange money retirement rabbit from voya. Orange money represents the money you put away for retirement. Over time, your money could multiply. Hello, all of you. Get organized at voya. Com. In new york state, we believe tomorrow starts today. All across the state, the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. Like in buffalo, where the largest solar gigafactory in the western hemisphere will soon energize the world. And in syracuse, where imagination is in production. Let us help grow your companys tomorrow today at business. Ny. Gov woman man yes. A newspaper . Woman its quaint. Man did you read about this latest cyber attack . Woman yeah, i read it on my watch. Man funny. Woman they took out the whole network. Man they had to hand out pens and paper. Woman yeah. Man could it happen to us . Woman no. Were okay. Man we are . Woman yeah, we brought in some new guys. Man what do they know that we dont . Woman that you cant run a country with pens and paper. Its not just security. Its defense. Bae systems. Early defaults on auto loans stoking new fears of subprime trouble. Phil lebeau joins us with more. This is getting a lot of attention because we have seen a growth in the number of sales to those who have subprime credit ratings. Some of the weakest consumers out there in terms of the ability to make their monthly auto payments. Fitch is out with a new report saying in february, 60 day delinquencies of subprime loans that are in that have been packaged together in a bond, theyre at 5. 16 . The highest rate since 1996. By the way, february dlenk win delinquencies was up. Fitch tracks auto loan bonds, bonds that are backed by auto loans where they package them together and sell them in a bond. 38 of those auto loan bonds are subprime, but heres the thing to keep in mind. Thats just the bonds that are in where theyre packaging these together. You look at overall auto loans, subprime borrowers make up 0. 78 of all auto loans, that comes out to 7. 8 billion worth of loans in a market of almost 1 trillion. The concern being, as we have seen auto sales increase at a very steady clip over the last five years, is there a concern that perhaps the subprime borrowers, these buyers, are inflating sales and that as they start to struggle with their payments, we could see auto sales fall back. Keep in mind, this is such a small, small percentage of the borrowers out there for auto loans, most do not believe it is a threat to the automakers. You look at shares of gm, ford and toyota over the last year. And one more thing to keep in mind, guys, the subprime market is so small that you really only want to be concerned about it when you see defaults in repossessions spike higher and they tend to do that when the Unemployment Rate drops. Were seeing a little bit of an increase now, but certainly not to the degree that many say there is a huge problem here. And, again, were talking about the bonds of those packaged subprime auto loans. Phil, one question, what happens to inventory, what happens to the cars should they come back on to the market. They go to dealers and that would create more cars on those lots . Now youre getting into repossession rates, which are lower than people who are in delinquency. And they eventually do go back into the market. It is so small right now that it is not going to impact the demand in the new vehicle market. Did i hear you say about when unemployment come down you see a spike in defaults . No, no, no. When unemployment goes up, when there is more people struggling to get a job, therefore they struggle to make a payment. If i said it was going down, it is wrong. It is when unemployment goes up. Far more intuitive, thank you. This is interesting, phil. My uncle owns a big car dealership. He was saying that it seemed to him like in 2008 and 2009, that a lot of he started to get a lot of calls offering credit. He was saying, who are you. Youre not my normal bank. He got the sense there was a lot of people who used to be subprime mortgage lenders who got laid off or firms shut down, had just transitioned nicely into the auto market. That doesnt surprise me. I think what you have is also the growth in buy here, pay here dealerships. If people buy a car, because they have checkered credit, at a particular dealership, they got to make their Monthly Payment at this dealership. It forces them to come in to make a payment, those people also hire on default rates. You see a lot of this at the lower end of the market where people who are looking to make money on the credit end are going to go in there because there is demand out there. Right. Phil, stand by. Lets bring in Rick Santelli here to talk about the bond part of the story. We hear subprime, you think back to the housing crisis, financial crisis. This is a little different, though, correct . I think it is. Since black swans usually dont wear name tags, i think i would look at it in the following way. This tells you more about lending and the consumer than it does anything else. Where im going with that is the car is the new house. I think many consumers after the credit crisis couldnt find access to the credit to buy a home. But they easily, as brian pointed out, and exactly right, there was a clear road for the subprime or lower credit quality with regard to cars. And i also think that when you look at Student Loans, i think the financing there is somewhat mirrors the issue. What you have is youre going to have a consumer that has a lot of issues whether it is Student Loans or auto loans and it may be even the subtext of the crowds doesnt intersect, but going to impact the future. Theyre loaded up. I dont think it is going to trigger the same thing that subprime and housing i dont imagine a lot of banks out there have when it came to mortgages, german pension funds, german banks, european banks, u. S. Banks, everybody and their mother, even like cfos of Companies Buying mortgagebacked securities filled with subprime stuff, i dont get the same sense of dispersion throughout the Financial System when it comes to auto loans or people buying cds on the auto loans. Thank god. The market isnt ready to handle it. After the subprime market, the markets were in full bloom, they could deal. They were a good transmission for the activity as ugly as it was. And im not sure i heard a difference. Is there any indication there is leverage . 10 in wall street instrument on every dollar that tyler owes on his bentley . I think there is an income issue. Unfortunately depending what side of the trade youre on, i talked to a lot of young people, the rates theyre getting on the cars, some are pretty sky high. So there is a lot of cash flow that goes on the lending side. I think theymoneyed up to deal with what the issues, but i dont think easier to repossess a car than it is to foreclose on a house. A lot of the pricing is easy to calculate. Phil, last word in. I heard you. No, not too often that rick and i agree about the state of the auto market. Im enjoying this. Two chicago guys making peace. What is this . Come to new jersey to do it. Thank you very much, Rick Santelli and phil lebeau. Tempers flared around the world. Well bring you the headlines and how it affects your money. Stick with us here at power lunch. Its more than a network. Its how you stay connected. With centurylink as your trusted technology partner, you get an industry leading Broadband Network and cloud and hosting services. Centurylink. Your link to whats next. On their Auto Insurance. Wouldnt a deal involve two parties discussing something . A little give . A little take . Because last time you checked, your rate was just, whatever they say it is. Why not give you some say in the matter . Or even better let your driving do the talking. Liberty mutual righttrack finally puts you in control of your rates. All you have to do is connect, drive and save. In fact, safe driving could save you up to 30 . With 5 off just for signing up. For righttrack. And the discount is good for the life of your policy. To get started, visit a local office or call Liberty Mutual today at take control of your rates. Visit a local office or call see Car Insurance in a whole new light. Liberty Mutual Insurance anger, fear and the threat of terror. Three big themes this weekend. Start saturday, missiles discovered on an air serbia passenger flight destined for portland, oregon. The missile shipment originated in bayrou. The lebanese say it was on the up and up. Still unclear if they were fitted with warheads designed for training or for battle. These missiles can shoot down airplanes several miles high. Sunday, german voters punished Angela Merkels party and flocked to a new antiimmigrant party pushing for closed borders in germany after she cleared the way for a million migrants, many from syria, to settle in the country. Massive protests in brazil demanding the impeachment of the president. According to the military police, more than 1 million protesters marched in the capital. Another million in rio. And a million more people across another 150 cities. There are notes out today from wall street houses saying that that sign of that level of demonstration againcranstration raises the possibility she may be impeached. Blood in the water. A very interesting summer in rio. The olympics. And zika. This. Lula getting arrested last week. Thats probably going to play out over the next several months as well. Crazy. Free trade is under fire this election season. Coming up, well talk to two of the architects of nafta, north American Free trade agreement, about what they think of this election season and also about the transpacific partnership. Thats straight ahead. Power lunch is back in two minutes. R of behavioral economics. Ive been called a lot of things. I have read all of your books. Did you learn anything . I learned that humans are complicated. Were emotional. Absentminded. And we make some really bad decisions. My tradeoff analytics can help Companies Make better decisions, but i am still learning what makes people tick. What makes you tick watson . Natural language processing, reasoning algorithms, statistical parsing. Now you are just showing off. Reasoning algorithms, statistical parsing. Testing, testing. 1, 2, 3, 4. Look out honey. Because im using technology. Aint got time to make no apologies. Soul radiation in the dead of night. Love in the middle of a fire fight. Honey gotta strike me blind. Somebody gotta save my soul. Baby penetrates my mind. [cheering] and im the worlds forgotten boy. The one whos searchin. Searchin to destroy. And honey im the worlds forgotten boy. Welcome back to power lunch. Im sue herera. Here is your cnbc news update. Turkeys Prime Minister says 11 people have been detained in connection to yesterdays deadly bomb car bombing. Turkish authorities believe kurdish rebels are behind the attack which took the lives of 37 people. The head of the European Unions Foreign Affairs says the missile test by iran does not breach the nuclear deal. Speaking from brussels, she added that no eu country kaulca for sanctions but said the move is increasing tensions in the region. Sarah palin canceled a Campaign Stop for donald trump after her husband was critically injured in a snowmobile accident. Sources tell nbc news that todd palin is hospitalized and he is in intensive care. The fda opened a criminal investigation against kellogg after a video surfaced of a man urinating on a cereal assembly line. Kellogg notified authorities after they were notified of the video. The company said it was outraged by that situation. Thats the cnbc news update at this hour. Back to you guys. To dominic chu for market flash on disney. Session highs now. One of the top performers in the overall dow today after a solid second weekend for the companys new animated film zootoopia, beating ten clover field lane. It now earned more than 440 million globally, but movies one part of the story. Espn and other cable channels a focus for a lot of investors. What a rise disney had since february 11th lows. 88 stock, 10 lower, but compare where it was last summer, before the skinny bundle comments on the conference call, what a roller coaster ride. A huge one. Given all the wild swings that we saw because of subscriber growth concerns, because of movies successes and what not, the stock is still down 6 year to date and still down about 7 over the past 12 months, so out of all of that net net, it is still negative. If you count the low prices you saw you cited at the lows this year, the stock rallied quite a bit. Again, it is going to be a huge deal if this thing can really power forward. A recent quarter when disney didnt have a single loser, like every single movie did well. Investing in hollywood has always been this you have hits and misses. Are you ever able to really institutionalize the process of reducing a hit and everybody assumed it is not possible. But disney seems to have caught a lot closer than most of the Hollywood Studios about coming up with some kind of consistent formula. Youre right. Just look at the avengers franchise, all the marvel franchises that come out of the whole disney studios concept. The real concern here, the stock book that massive hit, it was because of the Court Cutting concern. This is all overshadowed by espn. Thats one area where they seem to lately be doing phenomenally well. And were not even talking about star wars. I thought it was an average movie. Controversial. Studied up the prior weekend. You did. I you said, ive never seen star wars. All saw all the star wars in anticipation of the new star wars. The parks mean a lot for disney. Were in the media, we focus on espn, the movies. The theme parks, yeah, are a larger Revenue Source than the movies or theyre very important. Lower margin, but still, they are huge. What is the margin on the turkey legs . Huge. All right. Dom, thank you. Youre welcome, guys. Disney up more than 1 now. Gold is finishing the day down more than 1 . Some strength in the u. S. Dollar today. Lets look at how the rest of the metals complex is faring in todays session. Silver, palladium, platinum, all turning to the downside. Copper, slight gain on the session. Tyler, over to you. Melissa, stocks have rallied strongly since february 11th. And you may remember that was the day that jamie diamond said he bought 26 million worth of jpmorgan stock. Putting his money where his interests are. Can you still find opportunities in this market . Our guests will say yes, somewhere. You can invest in value or growth. Joining us, paul christopher, head Global Market strategist at Wells Fargo Investment Institute and John Hathaway, manager of the morning star, fourstar rated tocqueville gold fund, up more than 30 this year. Welcome to both of you. Paul, ill begin with you. I assume youre still seeing places of opportunity in the stock market. Not like prices have gotten really crazy. Yeah, thats right. We still see growth in the economy. And some modest growth in earnings this year. We do expect some more volatility and we expect there will be opportunities to buy on the dips. We still like those sectors that are most leveraged to the economy including Consumer Discretionary and info tech and industrials. Where do you see the valuations in the stock market now . Well turn to gold in a moment. To me it looks pretty pricey. Youre above the longterm pe ratio, earnings are headed south from everything i can tell. I would i guess i would respectfully disagree and say the market is overpriced. Do you think answer him there, answer john, why dont you, paul. Earnings certainly have not been particularly good for quite some time now. Do you see them turning around . Yes, we do. We see them turning around. There has been some weakness in the economy. Especially associated with oil. We recently took our targets down too, reflecting mostly the decline that already happened in oil. We think prices not only will stabilize in oil, but will move higher from here. That will help enormously in the comparables year on year. And, again, as the economy recovers from the manufacturing slump of late last year, First Quarter of this year, which again we expect in the second, third and fourth quarters of this year, that should help earnings. John, gold can be a great trade if you get it right, if you time it right, if youre in the right equities over the past few years, depending where you start measuring from, it either has been a painful trade, great trade, or a very painful trade. Where do you see it right now and what are you buying in that area . Looks to me like gold bottled from a fouryear decline. Time will tell, but the textbook technical things that i look at say that we made an important low and should be headed higher, having said that, we had a big runup in the first several months of this year and so i probably would be more buyer on pullbacks. Were basically investors in value creating management groups that add value in the gold mining business. So were pretty select, pretty picky, but we still find things to do. All right, gentlemen, we have to leave it there. Paul christopher with Wells Fargo Investment Institute, John Hathaway with tocqueville gold fund. We appreciate it. Go to powerlunch. Cnbc. Com to see what paul says will cause market volatility this year. That is powerlunch. Cnbc. Com. Free trade under fire from the left and right. Straight ahead, two of the architects of the north American Free trade agreement, nafta, will weigh in. Power lunch returns in two minutes. Welcome to opportunitys knocking, where selfproclaimed financial superstars pitch you investment opportunities. Ive got a fantastic deal for you gold with the right pool of investors, theres a lot of money to be made. But first, investors must ask the right questions and use the smartcheck challenge to make the right decisions. Youre not even registered; im done with you i can. I can. Savvy investors check their financial pros background by visiting smartcheck. Gov republicans and democrats dont agree on much. One issue theyre all talking tough on is trade. Foreign trade, including some fiery rhetoric from Bernie Sanders last week. The results of nafta, the results of the trade agreement with china is that this country has lost millions of decent paying jobs, communities around this country here in the midwest and ohio, michigan, illinois, have been devastated. With us now are two architects of nafta, the north American Free trade agreement, the free trade legislation now under attack, you heard from Bernie Sanders, and also from right and left and center. Joining us, Clyde Prestowitz and mickey canter, there at the end and credited for pushing nafta through under bill clinton. Good to have you here. Let me start with you. What would you say about Bernie Sanders and his criticism of nafta . A lot of heat and not much light. Bernie doesnt have any facts to back up what hes talking about. Nafta has shown a net increase in jobs every study, every study done by nonpartisan groups has shown nafta has been a net job gain for the United States. A big job gain for mexico, more important it tied our two economies together. Nafta has been a success. But mr. Canter, i think a lot of the critics would say maybe net number of jobs created would be correct. But a lot of the jobs that were lost were what were previously high paying manufacturing jobs. Those jobs are lost due to productivity, technology and globalization. Having nothing almost nothing to do with nafta. We had a change in our World Economy as clyde will tell you. What changed is that productivity has gone way up, were producing more cars today than we ever have with onethird of the workforce. Clyde, on the righthand side, there is we see just as much criticism coming from the right as well at this point, even though in theory the right is supposed to be supportive of free trade. Im sympathetic with Bernie Sanders and some complaints about trade. You are . I am sympathetic. You who worked for ronald reagan, sympathetic of Bernie Sanders . Yes, i am. Explain. Sure. Because while what mickey said about nafta is largely true, we have to recognize that nafta deal was done in the context of a large and growing u. S. Trade deficit with asia. And so we were at a situation where if the jobs didnt go to mexico, they would go to asia. It was better to have them in mexico because we had more of a supply chain with mexico and could retain more jobs than the u. S. I think the big problem has been that really since the late 1970s, the United States has had a mistaken trade policy. We havent had an Economic Strategy or a trade strategy to compare it to that, that countries like china, korea and others have. What kind of trade strategy should we have . It is my understanding when you talk to the basic economists, whether from the left or the right, that it is better to have fewer tariffs, better to have freer trade, that each country will contribute its comparative and competitive advantage, which will lead to greater productivity and higher wages in each of those countries. Thats the normal mantra. You have to remember that that mantra is based on assumptions. The Key Assumptions behind that kind of thinking are that we dont have any there is no International Flow of capital, so no cross border investment, no cross border switching of technology, we assume full employment. We assume there is no cost involved in closing down factories and workers moving to other jobs. So if you make those simplistic assumptions, then the conclusion is correct. We know those assumptions are not correct. We know it costs a lot when you use an auto factory and workers are cant really easily move to another job in computing or what have you. The way i heard it is, yeah, we know the costs exist, but those are the tradeoffs we accept because the greater benefit will the argument is that the benefits outweigh the losses. Thats debatable, but the point is that when people say the benefits outweigh the losses, theyre also saying the winners will compensate the losers. In our society, the winners dont compensate the losers. I guess it is rather curious, i guess we would rather have no trade dwreagreement and have las trade and unregulated trade rather than rules based trading system to protect intellectual property, to deal with stateowned enterprises, i guess you wouldnt want to do that, would you . I would, mickey. I think you know that. The rules the rules we have negotiated, mickey, you and i together, the rules we have negotiated say protecting intellectual property. They dont protect intellectual property. We have enormous intellectual property theft going on and you know it. Well, of course, todd, we need to enforce our trade agreements. We dont. Id like to finish, but thats okay, if you want to keep talking, go right ahead. We dont enforce our trade agreements was your point. We need to be tough about that. Clyde, you know ive been an advocate through the years. We have to be tougher and tougher. What should we do instead . We ought to enforce them and were doing it and doing it more and more. What we need is what Hillary Clinton suggested we need to trade prosecutor in the u. S. Government with enough staff to investigate and to go after these people who violate the trade agreements. Isnt that what the wto does . No, it actually doesnt. The wto complaints are long, involved procedures that companies typically shy away from. What do you think of mr. Canters idea we have a u. S. Based prosecutor that looks at whether there is dumping and violations of intellectual property. I like the idea. I think that the problem goes deeper than that. I love to have a prosecutor who had real teeth, but we had in the past, we had a thing called section 301, which was a section of the trade law called the unfair trade section underwhich u. S. The United States could just declare a country was engaging in unfair trade and impose some kind of retaliation. But we negotiated that away in the wto negotiations of the uruguay round. Thats not true. Last word, mr. Canter, go ahead. We can enforce 301, 201, all antidumping provisions which were doing. This administration has done a very good job going after china. And i think clyde would probably agree with that. I would love to know the answer to that. We have breaking news now. Im so sorry. Thanks so much. Breaking news out of russia. To sue herera with more. Very interesting turn of events. Russias president Vladimir Putin ordered his military to start the withdrawal process of the main part of russias forces from syria. Mr. Putin saying the Russian Military intervention had largely, quote, achieved its objecti objectives. He was with his defense and Foreign Ministers when he made the announcement and said the pullout should start from tuesday. He also ordered that russia intensify its role in the Peace Process to end the conflict in syria. He apparently, mr. Putin, telephoned syrian president Bashar Al Assad to inform him of the decision. In addition, he also said that he wants to intensify the Peace Process which has undergone still undergoing some changes in geneva and having a very difficult time achieving any really solid agreements on peace. In the phone call, im just reading this from reuters, all of this is being pegged on reuters, apparently president assad of syria said he hoped genevas peace talks would lead to a concrete result. So, once again, mr. Putin, president putin ordering the withdrawal of a large part of russias troops from syria. Well continue to follow this story because it certainly is an interesting turn in the particular situation. Ill believe it when i see it. Putin often says things and doesnt actually follow through with them. Exactly. Thats why were putting it on reuters and also i dont know if i believe him. Do we take this ill guess ill ask you guys, do we take this as a sign that russia feels that either assad is going to stay or maybe it stabilized in the terrible condition it is in, or feel the situation is so hopeless that theyre just leaving. That was the thing that came into my mind, either they are convinced that assad has been buttressed or they dont want to be sucked into a quagmire. Is a quagmire. Their naval base, russias naval base and the air base in syria will continue to operate as they did previously before the entire conflict started. Theyre withdrawing a large part of of the Ground Troops but interesting to note the naval base and air base will continue in syria. Sue, thank you so much. Sure. Just quickly from before we get to the market flash, no real reaction. The dow up 36, up 35 before that. Crude oil, brent and wti have not moved as well on those headlines. Now, the market flash with mr. Dominic chu. Oil related companies, brian, having a tough day so far today. Crude down more than 3. Almost 3. 5 . If you look at stocks, chesapeake energy, southwestern energy, baker hughes, other n e names down big today as well. Traders point to inventory growth and kushing, oklahoma, was heavier than expected. We talk about this idea over the past that supply concerns and even production concerns will be an issue, baker hughes with the rig reports coming out. So very muddled picture with regard to oil now. Were seeing it pull back 3. 5 and all of that, of course, is moving what is going to happen with the markets here. People have been talking so much about how crude oil, michelle, drives so much of trading these days. Second worst performing sector in the s p 500. Correlation has been strong. Thanks, dom. Up next, the surprising challenges of managing millennial money. Power lunch back in two minutes. Everhas a number. Olicy but not every Insurance Company understands the life behind it. For those whove served and the families that have 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. Its more than its multilayered security and flexibility. With centurylink you get advanced technology solutions. Including cloud and hosting services all from a trusted it partner. Centurylink. Your link to whats next. Firefighters in chicago rescue a pair of window washers stranded 15 floors above the ground. Officials say part of their rigging snapped, leaving them dangling by their harnesses. You can hear the cheers from the crowd. There you go. Well deserved. Gathered on the street. The two men are indeed pulled to safety. The millennials in this country dont own stocks, most dont have the needed 5,000 to 25,000 enough to get a Financial Adviser but it is not all bad news for the established financial institutions. Jessica rabe is a Research Associate at convergex group. It is obvious why millennials may not be participating in the they have a lot of student debt, one thing. Are they also rejecting the way Traditional Financial Services companies and you can name the names as easy as i, the way they do business . Are they just not reaching them . I started researching the relationship between millennials and Money Management industry because i realize that our experience is much different than our parents. Thats largely, like you said, because of our high levels of student debt. And youre right, banks are certainly so focused on their Current Customer base which is our parents, the baby boomers. Where the money is. Well, yeah, as opposed to catering to our demographic as well. However, disruption happens at the low end and thats what startups are doing. Theyre targeting us, they know if they can earn our loyalty now and build apps approachable and affordable, theyll have us as customers in the future when we do pay off our student debt. Executive technology. There are apps created gears toward folks like you . So true. Ill give you a perfect example. A new app called stash. And what it does is number one, low investment minimal compared to banks where you go to a major bank and they expect at least 5,000 to 25,000 minimum investment where as with stash it allows you to buy fractional shares for as low as 5. It also cure rates Investment Advice based on your financial situation to help guide millennials along in the investment process. Lastly, it uses simple terms in contrast to the banks, quite frankly they use financial language that arent understandable to the average millennial. I think one of the key differences here as a parent of a millennial, you know, is the idea that the ways people connect with any company today, basically online, basically taking the human being out of it, is how an awful lot of the businesses transact today or thats how millennials would be accustomed to connecting. The only Financial Services model, it was face to face with human beings in the dining room, at the kitchen table. Lets transition here to another sort of point of differentiation between the millennials and the rest of the world. The idea of the workplace. Companies have gone to open floor plans and the floor plans like like this. It is a lot of the Millennial Companies like a facebook or a google or, you know modern media companies. It is also supposed to foster communication, camaraderie, and also fosters distraction. There can be noise and stuff in there. Is productivity enhanced or not . In terms of open floor plan, it can, like you said, because of the noise and you can be interrupted more, it can be distracting. However, it turns out that Companies Like google and facebook are on to something in terms of incorporating games and free food into the workplace. It actually boosts productivity and also enhances collaboration among coworkers because they play games, they build a relationship. And lastly, it also boosts creativity. Free food would put me to sleep. And would not boost my productivity or my creativity. Free food because they can afford to. They have high margins at the moment. When times change, you have a million dollars, i dont think youll want to manage it on the phone. I dont. You want somebody. You want a little more than that. I hope the day arrives when you find that out. Thank you very much. I appreciate it. Up next, americas new real estate king. Power lunch returns after. This. Welcome back to power lunch. Lets look at the average price americans are paying at the pump. According to aaa, it is 1. 94 a gallon. Not too bad. Time for another edition of sectornomics. We look at refiners. The Energy Sector is outperforming, up 2, 2. 5 . There is one subsector that lagd, oil and gas refining, thats down 10 since the start of 2016. This is quite the reversal from 2015 when independent refining stocks gained more than 21 . Shares have tumbled on higher crude prices. Peak driving season is just around the corner and gasoline futures serged 36 over the past month with a shift to pricier summer blends declining inventories. So is it time to buy refiners again . Roger reed at wells fargo likes valero and pbf energy for exposure to spread between light and heavy crudes. Also, because they have a better than average gasoline yield. Bank of america recently reiterated a buy rating for a holly frontier saying it could benefit from seasonal recovery margins given the midwestern foot principled. Thats a region short product during the summer. But warns there are still a number of head winds for the subsector. We have summer driving season may not be as strong thanks to rising retail gas prices we showed. If crude recovers, this will continue to quit margins. He still likes coastal orients refiners as well. Thank you very much. Were going to look where am i going to look . Right here, right now, why not . Thats the one with the red light on it. Markets, lets look, see how theyre doing. Now over here. John the dow, i can read this now. The dow is up oh, number four. We dont need no cameras look over here. Dont watch. Here we go. The dow industrials, you can see it as well as i can, unless youre on xms sirius whatever it is, radio. Dow industrials 17,232, up. 1 . The nasdaq composite, im concentrating, 4753, up. 11 . See that, morgan . Look at that. 11 . 1 . Down. 13 for the s p 500, off 2. Big drop in the price of oil. Iranians saying not so fast with this production cap. Big gainer today, gw pharma doubling after its marijuanabased drug shows promise in treating epilepsy. We will talk to the companys ceo coming up. Brian . Best part about radio is they never know what camera youre looking at, tyler. Or that im doing this segment shirtless. Some major real estate headlines to tell you about. Chinas on Bank Insurance group agreed to a 6. 5 billion deal with the Blackstone Group to buy their Strategic Hotels and resorts portfolio. Thats a big deal. But that is not all. Earlier this morning, Starwood Hotels reportedly received an unsolicited offer from on bang. They want to buy this company too. In this deal worth 2. 8 billion. Starwood had already agreed to a deal with marriott, but enbangs offer for now is higher. Which brings us to a question that you might be asking yourself. Who the heck is enbang insurance and why are they looking to do more than 20 in deals in a 24hour period . Good question. Here you go. Enbang started off apparently in 2004 as a small car insurer. The economist magazine says the company was founded with 60 million in capital. Now it is a massive diversified conglomerate with assets of 260 billion. Two years ago, anbang agreed to buy Waldorf Astoria Hotel for 2 billion. We went from 60 million to 260 billion in 12 years. Amazing. Maybe too amazing. Pretty fast. What does this flurry of real estate activity tell us about chinese buyers here in the United States . Spencer levy is at cbre. Great to have you with us. Nice to be here. What do the number shows . It seems like theyre more active. Are they, in fact, more active . Chinese investment in the United States has been growing rapidly. Last year was a record year for Chinese Investment, 7 billion of direct investment. About double from 2014. But the real story here is its growth pattern over the last four or five years and not just growth into major markets, but different asset types. I would tell you it is not just large insurance companies, but diversified, including High Net Worth individuals, developers and corporations that are buying for their own use. What is driving it . I would imagine for individual investors it may be the desire to get the money out of china into some place safer. For institutions, what is the motive . The institutions have different motives and i would characterize two different motivations. One in the deals we saw announced the last couple of days, theyre looking for longterm stable yield. But for other institutions, large land developers, theyre looking to build here. Interestingly because it is fair to say the chinese Real Estate Investment market may be later in the stage than we are past peak. A lot of new developers are coming here to the United States to buy large land positions in order to build large mixed use developments as well. Many motivations for it, not only to get capital out, but also to use the expertise they got by building a lot of deals over in china. Do you feel like theyre overpaying . No, i dont. Does it smack you of japan 1980s . I think the japan story and the china story are different, but i dont believe theyre overpaying, im not going to speak directly to the deals were talking about. When you look at chinese capital, you look at the cost of the capital and time duration and cost of capital is low since in this instance it is coming from an Insurance Company. And time duration is long. Looking at those two factors, number one, number two, the very strong fundamentals in u. S. Commercial real estate in hotels and other Asset Classes i think a case could be made from the cap rates being paid for these and some recent deals. Can we underline the size of the deal. These two things get done, by anbang, this will be the biggest Foreign Direct Investment we had in the United States, the first one was amc, 6 billion, then the sausage deal that was ridiculously controversial for no good reason about the chinese buying a meat processor in the United States. And now this thing this is huge. This would be a new mark, wouldnt it, in terms of the level of investment . They did a large deal last year as well in joint venture, a Large Industrial deal done about 5. 5 billion. Thats smaller than amc. It is great for a lot of reasons. One reason we havent mentioned yet is given the volatility that we have seen in the Global Markets and in china in the last couple of months, some commercial Real Estate Investors had a lot of confidence of sorts of Chinese Investment coming here to the statestates. This is a real vote of confidence. To your point, we see the reports about that theyre willing to pay per square foot, you dont think theyre overpaying . I think some of these people see this money and say, well take that money and run. Well, look, i think at the end of the day, the u. S. Fundamentals are very strong and cost of capital is relatively low and longterm in nature. If you look at it from those two perspectives, you can make the case for what theyre paying. I dont know if their cost of capital is low. Anbang, they offer a 6 yield to their investors. They take money off a 6 yield, which they have to pay out every year in some of their annuity businesses. Not all of them. They need assets that will be cash generating to help pay for this. Thats the reason i was just a little skeptical when i heard the news this morning was you got this massively Fast Growing Company that has got this great investor demand. To me, im sorry if im a little old and crotch etty, a little bit of it smacks of desperation. Reeks of pete. I understand your point of view. Let me make two quick points. A savings glut in china now, their savings rate is higher than the u. S. By some meer. Over 1. 7 trillion of savings that needs to get out. Number two, a scarcity of long term yield investments across the world in bonds, real estate and other asset types. Comparing the savings glut with the ability to get longterm stable and growing yield in Something Like this makes it look like it could be a good longterm investment. Seems like youre a believer the chinese buyer is going to continue to be active here in the United States. Cbre what are you doing to ensure that china buyer comes to you . Do you have chinese speaking agents, offices in china . What are some of the steps youre taking to capitalize on this growing part of the market . We certainly do. We have agents throughout china, hong kong, head of capital markets. We have people around the world in chib chna, here in the unite states. What it comes down to is strong xheen communication between our colleagues in asia and here. We have desks in new york and in london that closely tracks chinese capital. Spencer, thank you. Thank you very much. Spencer levy with cbre. Shares of tesla are higher, hitting a twomonth high. Well tell you what analysts are saying about the stock as it moves 4 over the last two months. That gain for shares of gw pharma, doubling today, 129 higher. Promising treatment for epilepsy using marijuana. Were going talk to the companys ceo. Thats coming up on power lunch. Wow, that was random. Random . No. Its all about understanding patterns. Like the mail guy at 3 12pm every day or jerry getting dumped every third tuesday. Jerry every third tuesday. We have Pattern Recognition Technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. Td ameritrade. Woman man yes. A newspaper . Woman its quaint. Man did you read about this latest cyber attack . Woman yeah, i read it on my watch. Man funny. Woman they took out the whole network. Man they had to hand out pens and paper. Woman yeah. Man could it happen to us . Woman no. Were okay. Man we are . Woman yeah, we brought in some new guys. Man what do they know that we dont . Woman that you cant run a country with pens and paper. Its not just security. Its defense. Bae systems. The white house saying today it will not rule out new sanctions on iran following Ballistic Missile tests last week. Iran wrote threatening messages to israel on those missiles that it fired. At the u. N. , the American Ambassador expressed frustration with russia for opposition to new sanctions, but eu countries were also in the opposition camp. Johnson johnson up slightly today, getting an upgrade to neutral from sell. Goldman section says the Growth Potential is underappreciated. 3d systems soaring. The fresh market soaring it being bought by Apollo Global management for more than 1. 3 billion. Actually, that stock is negative right now. Brian . Thanks for front running street talk, tyler, throwing in an upgrade before we do the official segment. Did you see that . There is room for upgrades. Well give you six today. Here is the fresh market for you. Time for street talk, the most interesting stock calls on the street. One here today, johnson and johnson. Stock number one, cirrus logic needham starting coverage with a buy and 50 target. They think the chipmaker is poised for growth because apple may eliminate their headphone jack and new iphones in order to add an additional speaker, good for cirrus logic. They see that as a clear path to 200 million in incremental revenue with upside of 500 million. 50 target. 40 upside. They make chips that go into apple phones. So the apple events next week is going to be a big one potentially for cirrus and a lot of other suppliers out there. Tesla getting an upgrade from outperform at baird. Baird is saying that investor skepticism has increased since its downgrade. During a recent factory visit, the analyst saw dozens of model xs in production, that had been the main source, main focus of the skepticism out there. Baird thinks no capital rates will be necessary in the next few quarters. This was up 141 stock in february. It was. Can we bring up two or fiveyear chart. The point is with tesla, unless youre timing it, it hasnt it has been flat money for the last two years. But provided you some tremendous trades tremendous trades. Trades, which you can hear more about on fast money, here is the thing, the stock price is at the same absolute level. Up 483 . I think thats not bad. I think there are fvery few stocks we can pull up. The third stock, the past three weeks, would have been two years is along ti long. The kmors company, last week we said how is the titanium market doing. It is now bottoming. They think aggressive cost cutting and asset opt mization should help drive earnings momentum. People concerned about the balance sheet, from 10 to 6. The stock is above 6. Thats 50 , 50 upside. Tio 2, a huge market, makes coatings and paints and plastics whiter. Thats a key element. There was a huge glut in the market. Now there are studies saying the market will be 17 billion in 2020 compared to 13. 5 in 2014. Real turn around in the market. Star wars robots didnt make the cut. Tio 2. Fourth stock, comerica, moves rating to outperform from underperform. Down 18 . Compare that to the etf that tracks regional banks. Energy sector exposure, we heard that a lot. The oil and markets rebound giving a more constructive view. The analyst says the company could be an activist target, maybe it gets either bought out or prodded or pushed or whatever. Finally, your under the radar name of the day is quanex building products. Three catalysts yet to be recognized in the stock price. Deals to diversify the revenue base, Capital Investments and improved underlying cash flow that may help debt repayment. Their target is 23, 30 up. I looked at this chart and pulled it back to 08 and it looked like it was trading at the same levels. Why just 08 . I could pull up any period any eightyear period. I think it is a pretty important milestone in our word. Save us. Gold pulling back today, brian, but still up 17 . Which way is it headed next . The trading nation team will weigh in. The youth soccer game interrupted by a bull loose on the field. All the must see video coming up here on power lunch. Welcome back to power lunch. Im tyler mathisen. Some people say im full of bull. They would be righting. Check out this scary moment caught on camera. A youth soccer match in australia, an unexpected turn when an escaped bull invaded the field and began to charge the players. Look at that. Thats called a i told mandy to do that and cant believe she pulled it off. When you go back to australia, let a bull loose at a soccer game with your kids and she did it. They say it came out of the woods. Went back into the woods. No wild bulls in the woods of australia. They have scorpions. Everything is deadly. Here it comes again. Hes, like, very aggressive. Watching on a loop. I will say this, having played rugby against a few of them, this could be a new training technique. Toughen the kids up. Run faster. Look at that thing, man. No one was hurt here, happily, including the bull. How do we know that . Were all laughing. Time for trading nation. Today, lets look at gold. Boris schlossberg joins us now. You never have run around soccer feels. What is your view on gold . Up or down . Up. I am bullish. Can call me bullish schlossberg. I like gold. Gold had a major positive fundamental shift over the last couple of months. Primarily because the single biggest knock on gold is the cost of carriy. Gold doesnt yield anything. When cash doesnt yield anything, gold looks very, very attractive. Thats why at this point you see this very strong bid. Age old question, okay. Two questions. What is the meaning of life, we dont have the answer to that one. Number two, is it better to buy the physical asset, coins, a bar of gold in a safe, whatever, or the gld, do you care . I dont. I think it is much easier to buy the gld. Of course. Also risks to it, right . It is different. Moves up and down fast, dont have it in case of a zombie attack, et cetera. It is there to diversify as an actual asset against stock market turbulence. Not necessarily the doomsday scenario that people who buy gold assets want to have. So, to me, it is fine as an investment because i do think gold ultimately has a potential to go to 1500 an ounce at the end of this year, given the fact that yields across the world are going 1500 by the end of this year, possibly. Yeah. It is acting very well. I think it has a real chance to get there. Back on the field with the soccer playing kids. Thank you very much. For more trading nation, head to the website, tradingnation. Cnbc. Com. Coming up, the ceo of a Company Whose stock is soaring more than 100 today. Thats a double. And there is a promising medical development there to explain as well. Thats the reason the stock is up so much. Oil down. Supply continues to exceed demand. The final oil trades of the day coming up. Well have them for you here on power lunch. And now, the latest from tradingnation. Cnbc. Com and a word from our sponsor. Some people say buy and hold investing is dead, but there is nothing wrong with buy and hold as long as you dont buy and forget about it. It is important to make sure your portfolio doesnt become overconcentrated in one sector due to market appreciation. Be sure you check your portfolio at least every six to 12 months to make sure youre maintaining your intended allocation. One eye on the market, another on the campaign trail, where in north canton, ohio, mitt romney has just introduced john kasich, describing him as a man with a real track record as compared with some of the other candidates. Though he did stop short of making a formal endorsement of governor kasich. To sue herera now with a news update. Hi, ty, thank you very much. Russian president Vladimir Putin will begin pulling his troops out of syria starting tomorrow. We told you a little bit with that earlier. The announcement comes as peace talks over syrias future gets under way in geneva. Russia began air strikes in september which drew criticism from the u. S. A Severe Weather band across much of the south spawned downpours, hail and look at that, that tornado over the weekend. The funnel cloud was spotted near grady, arkansas. Meteorologists believe it is one of roughly five tornados to touch down on sunday. All good thins must come to an end including the cheap gas prices. Aaa says National Prices are on the rise thanks to the uptick in oil and the introduction of the more expensive blend to produce the summer blend that we all use during vacation time. Researchers say a hiker in israel made an ancient discovery, stumbling upon a 2,000yearold coin in the galilee region, the second of its kind ever found. Much more than a lucky penny, id say. Back to you guys. Were keeping an eye on the News Conference and michelle and ty we go there right now. To Oklahoma City where the police chief is holding a News Conference to discuss the cause of death of aubrey mcclendon. In fact they estimated at 78 Miles Per Hour, the point of impact, when his vehicle hit the bridge. The vehicle was traveling his vehicle, Aubrey Mcclendons vehicle was traveling northbound on midwest boulevard, north from 122nd. We have the data, the crash data retrieval box from the vehicle. It was in tact. So they were able to get some information off of that, showing three different things. That data box shows speed, it shows speed five seconds prior to the actual crash, it showed a speed of about 88 Miles Per Hour. Five seconds before the crash. It shows that he went left of center, approximately 189 feet, he would start to go left of center at about 189 feet prior to the point of impact on that bridge. That would be about 60, a little over 60 yards, 63 yards. Which gives me a better reference usually. The speed he maintained that speed, the data retrieval box showed he maintained that speed of approximately 88, maximum 89 between that 189 feet of crossing the center line and point of impact. It shows it also shows he tapped his brakes, tested his brakes several times at some point between that 189 feet and point of impact. Now, when i say that, and you look at your diagram, it shows it also shows track marks on your diagram. Those track marks are not skid marks, those track marks are what you and i would not be able to normally see or detect, but a trained investigator, traffic investigator can. So dont get confused on your diagram where it says track marks as skid marks, basically just wheel marks. At some point, though, between that time of 189 feet and crossing the center line and actually hitting the wall, he did brake several times, tapped his brakes several times. It was not the box shows he taps his brakes, but not enough to really consider brakage. It didnt really slow the vehicle down. As you can see, the vehicle maintained about 88 Miles Per Hour through that whole episode. Even when he was touching his brakes. He had a total of three wheels that eventually left the roadway as he went left, before hitting impact and then he actually completely let off the brake or didnt touch the brake about 31 feet prior to impacting the wall. So, you know, that box showed the speed, showed he wasnt wearing his seat belt, shows that speed at five seconds out, ranging again from 88 Miles Per Hour to the point of impact where it estimates at 78 Miles Per Hour. Shows he wasnt wearing his seat belt and thats what that shows. Again, no significant skid marks, tire marks as he went left of center. Also marks s obviously when he left the roadway in the soft soil, which may have slowed the vehicle down some also. Ill open it up to questions. [ inaudible ] yes, as far as we know, they were functioning. Some people allege d it may have been [ inaudible ] were not going to speculate. You just dont know. You dont know, one, what was going through his mind at the time. You dont know what was going on in the cabin of the vehicle. So were not going to speculate. Basically what youre getting today are the facts. There is a lot of things that could affect those things, you know. Anything is possible. You dont rule it out. We cant say it is either. So right now the investigation is continuing. This is just part of the investigation. Right now we have investigators that are going to be talking to people that try to put the pieces together from maybe the night before, to the time this happened, to find out if there would have been any reason that he may have decided to take his own life and then in all that information will be handed over to the medical Examiners Office and the medical examiner will make that final determination. To be clear, the evidence investigators saw no real attempt at trying to brake the vehicle before it hit the wall . There was no brakage. No brakage. The actual data box shows that he touched his brakes. If you touch your brakes, your taillights are going to go on, okay. But it does not show where there was actual Oklahoma City police chief detailing the details of Aubrey Mcclendons death in his car. Heres what we learned, okay. He was asked i couldnt hear the question, asked a question about whether or not he thought mcclendon took his own life. He said he couldnt answer that. Heres what we know. No seat belt, 40 miles an hour over the speed limit. The car was doing 78 miles an hour had it hit the wall and began to veer 60 yards prior to hitting the wall. Thats what they came up with. The oil market closing for the day. To jackie d. At the nymex. Settling price today, 37. 18. Todays losses due to irans plans to increase its output to those presanctions level. The market were hoping to hear more from opec hoping to hear about a date for an emergency meeting or that this freeze agreement will be reached. But clearly no consensus can be reached here. This story goes back to the one of a supply glut, which were still dealing with. Also we have numbers out of saudi arabias february production, 10. 2 million barrels, theyre still a driving force and theyre holding steady. Oil may have bottomed, stabilizing here, consensus is that the upside is limited. Still stuck in a tight range. Those gas prices that sue herera mentioned before, 194 today is the average according to aaa. Were at 170 a month ago. Moving in tandem with wti. The big stock move everyone is talking about today, gw pharma, more than doubling. It had success. Meg terrell joins us now. We want to bring in the companys ceo for a conversation. Meg, why dont you kick it off here . Thank you for joining us. A lot of folks sometimes refer to gw pharma as a pot stock. Maybe briefly explain how this is different from medical marijuana. Thank you for that opportunity. What we do is we do grow Marijuana Plants but extract from the plants a nonpsychoactive component of the plant called cbd, it does not make you high. And it is we purified it. We put it into a pharmaceutical dosage form and testing it over the last few years in Clinical Trials in Young Children with treatment resistant epilepsy. The results today, very surprising in a positive way. One thing im hearing from folks, the placebo response was a little less than may have been expected in the trial. Could you tell us how youre thinking about that and whether that would be expected to be replicated in the future studies youre performing . The results show a clear separation between our drug and the placebo, which we hoped to see. I think it bodes well for the future studies, not only do we have the study that is reporting today, but we have three additional phase three trials, one in additional one in another trial and two more in another reporting over the coming months. It bodes very well. I dont think the placebo response or lack of placebo response is that surprising. These are seizurseizures, real and tragic events for the children and their families that are involved. Overall, this is just a great outcome and for not only the company, of course, but for children and the families of those with no fda approved treatment option. And the results, they were pretty impressive in terms of the reduction of frequency of seizures, reduction of 39 versus the controlled group, 13 . I want to focus on the other drugs you have in development. The knock on a lot of Biotech Companies is you are one trick ponies, but you use cbd in other forms of treatment, for other diseases. Ive been talking to you for a period of years now and each time you tell me about all these other applications. Can you tell investors what is coming down the pipeline aside from the phase three studies you have in progress now . As you say, this is a momentous event for our company and for this product, which is the most important clinical event in our companys history. It not only reinforces the potential for cbd in the field of epilepsy, but validates the concept of medicines and their potential within modern medicine. We already have a medicine in europe that is approved to treat the symptoms of multiple sclerosis. We have been working in other neurological conditions, we have other studies in psychiatric disease and so on. I think the impact of this study and this news today is not only for the drug itself, and the promise it brings to families of children with epilepsy, but gives us strong sense there is real science and the potential for the future of our company and for cabbenoid science is strong indeed. You grow it in southern england on a farm. Is there any concern or are you ramping up in terms of the production of marijuana at these farms . Is there concern about getting the supply you need in order to make these drugs for all these different applications and diseases . No, we in anticipation of todays positive news and the prospect of filing for Regulatory Approval in the u. S. And elsewhere, subsequently hope to launch the drug, we have been scaling up our production process where comfortably at scale an i have no hesitation we can meet the demand. Justin, thank you for joining us. Appreciate your time. Justin gopher. Revolutionizing retirement, Goldman Sachs buying up a startup changing how americans save for their golden years. The ceo of that startup on his dollar joins us next. Squirrel. Were putting away acorns. You know, to show the importance of saving for the future. So youre sort of like a Spokes Person . More of a spokes metaphor. Get organized at voya. Com. Its how you stay connected. With centurylink as your trusted technology partner, you get an industry leading Broadband Network and cloud and hosting services. Centurylink. Your link to whats next. Thats why i run on quickbooks. Details. I use the payments app to accept credit cards. 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Fresh ingredients. Stepbysteprecipes. Delivered to your door. Get your first two meals free blueapron. Com cook. Welcome back. Goldman sachs buying a company call eed honest dollar. It sets up and manages Retirement Savings plans for employees. Will hurley joins us from the south by southwest event in austin. Welcome, good to have you with us. Nice to be here. Thank you very much. So tell me how this works and who you target here. I assume you are targeting Small Companies for whom a traditional 401 k program would be too expensive to set up we launched at south by almost a year to the day. And what we created is a simple automated fully digital system that allows employers and 1099 workers it easily set up Retirement Savings plans. If youre an employer, you can set it up in a couple of minutes and the employees can set it up in literally 90 seconds to a few minutes and if youre a 1099 worker, come and set it up yourself. All digital. The money goes into what is known as a simple i. R. A. Or a sep i. R. A. How much can i put in as compared with what i might be able to put in to a traditional i. R. A. Or 401 k and is the money then taken off the top so it is not taxed as it goes in . Well, actually, we do traditional and roth. One of the things a sep allows you to save up to 53,000. Our target market, there is 80 Million People with retirement plans in the us us that are 401 k based. A larger market than that and 54 million who have no plan whatsoever. In a lot of cases, these are low income wage earners, people that think they cant save. We have adopted this software methodology. So they can save does my money reduce my taxable salary and are there any income limits for that to be true . So, yes, various income limits. It calculates everything for you. The advantage to Something Like a roth i. R. A. Be, a lot of people may need to get that money back. If they need an emergency, they can get it back out too. They want people to remember this is their money, and our software is designed to make it easier and more efficient for them to manage that to their retirement and to be in charge of the control of their future. Why did you sell to Goldman Sachs . It is a great opportunity. A lot of people asked is it the money . What is the motivator . We set out on a mission with a vision to change things. We have a Retirement Savings crisis that is unimaginable in this country. What does Goldman Sachs have to do with that . They have a platform. They deep financial expertise, we are a bunch of software guys. So the marriage of the two is very powerful. It gives us an amazing platform and insight into the financial youre not worried the big guy, the biggest guy on wall street is going to change you, the little guy doing the startup from the ground up . Youre coming to us from south by southwest. Absolutely not. The question is, you know, Goldman Sachs didnt buy us to have honest dollar become Goldman Sachs. Goldman sachs acquired us to help bring all of the new technology, all of the startup stuff we do into their platform, into their environment, their family. We are going to be still a wholly owned subsidiary, we get access to a lot of capital to improve the product for our customers. We continue to operate as we have over the last year. Brian sullivan. How many people does it take to run your company . If you had 100 billion under management at honest dollar, how many employees would it take to manage that . Not a lot, i assume. Thats a great question. No, it is not. Were a software company. Most of us come from backgrounds. Tom bishop was the cto, we come at this from a system management approach. The whole idea is fewer employees, better more powerful, more pervasive software. The number of assets in that makes no difference on the number of employees we have. The only thing that matters, the number of users which would mean we need to add Customer Support people for if and when people have questions that cant be answered in the faq or through the app and they can call somebody and talk to them. Where does the money go once i invest it . Where does it go . It goes into vanguard. The money goes into vanguard. This is open market purchase. We have our own management system. Were managing the transaction, eliminating the complexities and goes into one of four Vanguard Fund and blends in between so your standard all stocks, all bonds kind of approach. Will goldman change that . Will goldman want you to put money into goldman funds and oh, by the way, goldman didnt get rich by charging, you know, nine basis points as a fee. Heres the deal. Google didnt get rich by charging any kind of assess owner fee. Were a new model for them. Will we expand on the products . Absolutely. But well stick to our core tenets and we want Asset Management fees, vanguard or any other fund, to be something reasonable for the people were serving. How much do Goldman Sachs pay for the company . I cant tell you that. Plenty. Zeros . Youre feeling good, right . Everybody get drinks . I feel this is cnbc, we like heroes of capitalism. None of us well, it is a team full of winners. It is a team sport. I cant thank everybody at the company enough. But we did an amazing thing here. Imagine a startup that started with a completely different method ology, different philosophy, were not from the finance industry, were from the Software Industry and not a fin tech company. We want you to be wealthy. Tell us youre wealthy. Tell us you made some money. Incredibly happy. Oh, good. Excellent. Honest benjamins. And drinks on will tonight. It is honest lots more of dollars. Drinkz drinks on me. Ill fly up there and have them together. Will hurley, thank you. Thats great. Thank you very much. And good luck. Used to take a lot of people to run now, a couple of dudes at a computer run a cup hundred bucks. Highs at the dow. Modest gains for blue chips. Highs for the market, up 52. Boeing, nike and mcdonalds, pfizer, biggest dow losers. Theyre winners. Theyre up theyre losers if youre short. Back right after this. Jake reese, day to feel alive jake reese, day to feel alive boy mom because weresettle settlers and thats what we do. girl but with directv and at t, you can get your tv and Wireless Service from one provider. dad are not we your providers . Do we not provide you with this succulent jackrabbit pie . This delicious graywater soup . And a single lick of the family lolli every harvest moon . vo dont be a settler, get a 100 reward card when you switch to directv. Youre an at t Small Business expert . Sure am. My staff could use your help staying in touch with customers. At t can help you stay connected. Am i seeing double . No maam. Our at t buy one get one free makes it easier for your staff to send appointment reminders to your customers. And share promotions on social media . You know it now im seeing dollar signs. You should probably get your eyes checked. Good one babe. Optometry humor. Right now get up to 650 in credits to help you switch to at t. Welcome back. We want to call your attention to whats happening with the stock market. Overall the Dow Jones Industrial average up 50some points and represents the highest level for the index. Not a huge percentage gain but still the dow up near at session high, up 50some points. If you look at boeing, also nike and mcdonalds, the biggest leaders in the terms of the Dow Jones Industrial average and the s p 500, youve got the likes of a free port up there as well and trip adviser, those shares surging today. And then if you look at the nasdaq 100, bigger cap stocks, tesla up there as well and trip adviser, among those particular names, they are whats leading the market higher although we will point out, michelle, this is all on Light Trading volume. Still a fairly quiet day and some are saying the volume is not there surging higher but still interesting we have now a positive day for the s p 500. It wasnt that way all day today. Back over to you. Thanks. Big name celebrities outed as water wasters in Beverly Hills. I bet they claim to be environmentalists too. Well name names next on power lunch. Aflac. Ohh ah ah aflac aaaaflac tadaa hes not a very good magician. He paid my claim in just one day. One day . shh how does he do it . In just one day, we process, approve and pay. One day pay, only from aflac. This just got interesting. So why pause to take a pill . And why stop to find a bathroom . 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Contact your health plan for the latest information. Some of holy woods biggest name are wasting water s beverl hills mansions. Matt stevens has the names, lights, camera action. Some people whose names are what we call bold face names on page 6 have been using too much water. Who are they and by how much . They are quite a few folks here in los angeles and Beverly Hills using the water. Some of the notable ones folks know about would be david given in los angeles and amy poehler. The comedian, amy poehler. Of course. They took well, overused water after restrictions were put in place requiring that water use be reduced by how much . Beverly hills required most of its residents to cut water use by 30 because were in a huge drought in california. How much water were they using . These violators . Sure, i mean, it varies among folks who got letters but some were using as much as 26, 27, 28,000 gallons a day. A day . And this is mostly on irrigation, i assume . Yeah, in Beverly Hills of course there are a lot of homes that have large landscapes and those require a lot of water but im not sure just how much. You have reported a 31,000 bill. That takes a fountain inside of a fountain. Your fountain has a fountain. Did you contact these people . What did they say . Did they chase you off with a hose . Not exactly. But there were lots of folks who said look, we have a leak we didnt know about and may have had multiple leaks and since fixed this problem. Look, i have a huge landscape to maintain. If i want to keep Property Values up and maintain gardens and old foliage, i need to use this water. David geffen supposed to be using only 1. 1 million gallons over the period. He used 1. 6 million, am i reading that correctly . Yes, you are. You read it well. It is a lot of water, 10 acre property mr. Geffen, i was not able to get in touch for the story but he did respond this story and points out that his property is ten acres large which is huge and he has as we noted in the story, work to reduce that water usage during the most recent bill, cut use by 54 . I would think in los angeles, there would be a certain amount of embarrassment if you had lush greens on your estate at this point. Are dry dead lawns a source of pride amongst the wealthy there . Those sorts of lawns i think there was a mantra saying brown is the new gold. But in places like Beverly Hills there are certain communities where they have been sort of insulated from that call and Beverly Hills is one of them. So has water usage come down . Yes, in fact, i think one of the points we make in the story, these fines that Beverly Hills has leveed is working. Beverly hills cut the water use by 26 in january which was more than double what they did the month before and its the best theyve done in eight months. Matt stevens, los angeles times, thank you. Thank you all for watching power lunch. Well see you tomorrow. Closing bell starts right now. Hi, everybody, welcome to the closing bell. Im not at post nine. Im in San Francisco, the bay bridge behind me. Yes, we can sort of see it. I think theres a little bit of fog there. Thats amazing in San Francisco to say. Im bill griffeth. Our top story today, china wanting to move more money into the United States, a Chinese Investment group made a play this morning for