Transcripts For CNBC Power Lunch 20160712

In the positive by 1. 9, a gain of more than 4 , 46. 65. We are not close to 50 yet, but lets see. Investors are selling treasuries. The yield on the benchmark 10year note hitting its highest level since the end of june. Look at that cracking a whopping 1. 5 . Bob pisani on the nyse floor with more on whats moving the markets. It doesnt get much better as this, michelle. Steady as she goes, just off the highs for the day. Look at the dow you want to look at 18,312, thats the closing high. Well above that right now. Lets put up some key metrics today because this is about as good as it gets if youre interested in stocks. Dow at a new high, crudes popping, gold is down. This is the fourth day in a row gold is down. And the dollar index has basically been flat. The 10year up just a little but not a lot. This is about as good as it gets for stock investors overall. You must think there are tons of new highs out there. There are some but not a lot. The dow is a price weighted index so bigger names tend to push around a little bit. Cisco hitting a new high. Johnson johnson, ge, proctor gamble, lets not quibble about half a percent or so. A number of big names on the dow are way, way far from new highs. Some are very high priced names. Theres the ftse 100, as you can see. Thats a sector most people thought would not be popping today. And would not be up. This is the Key International groups, International Stocks in the uk, thats unexpected thing thats happened overall. Weve seen some breakouts as well in other groups like the emerging market etf or the eem thats also breaking out to a 0 10month high. I want to get back to my point, a lot of stocks goldman one of the higher priced stocks, boeing also one of the higher priced stocks, 13 off the highs and boeing has been bucking most of the Aerospace Stocks that are sitting at new highs. Melissa, back to you. Thank you very much, bob pisani. Amazon hitting alltime highs in its Second Annual prime day. The online retailer offering deals on 100,000 products for its prime members. Take a look at shares i mentioned new high, but we did back off that high. Shares are down by about 0. 5 right now. Courtney reagan has the latest on prime day. Hi, melissa. Amazons deals are more appe appealing than last years which launched primedayfail on social media. Still 11 hours left to go for shoppers. In terms of consumer dollars spent prime day still way behind black friday. Last years prime day generated between 375 and 400 million in sales. And says this year that figure could double. Well, amazon hopes to use the deal day to gain new prime members, everyone else is doing what they can to compete. There is a measurable spillover effect. Ecommerce Advertising Firm hook logic tells cnbc retailers and its network seeing traffic up as much as three times the average for a typical day in july. But more importantly convergence or traffic that actually makes the purchase is up 21 over a typical tuesday. Slice Intelligence Data which comes from 4 million shoppers online receipts shows walmart could also get a boost. On amazons prime day last year walmart generated 3. 5 times the average daily revenue for july by touting no gimmicks with its sale prices. This year walmart is offering Free Shipping with no minimum purchase for the entire week and you dont have to be a member of anything to get that. Brian, back to you. Courtney, thank you very much. Prime day taking its place, guys, just above arbor day on list of important holidays now. Oh, come on. But invented holidays its pretty hot. Its super hot. I love the competition that walmart fights back. I think thats great. Thats the way its supposed to work. Think of the margins for these guys, compressed. What does it mean for shopko . Sorry, just got back from wisconsin. Walmart has been the better stock this year, its up about 19 , amazon up 12 . You could buy both these stocks, but i dont think that would make for a very interesting segment. So if you had to buy just one, which of those names is the best for your dollar. Making the case a longtime walmart shareholder, kevin, ill begin with you because we love to make these compete. But heres theres a huge difference between amazon and walmart. Amazon is at an alltime high. Walmart is well off its alltime high of 88 last year. Why do you still see value in walmart stock . All right. Well, i think its easier to make the case from a valuation perspective for walmart because you really dont need all that much to get the stock from valuation perspective to higher levels. If you got Something Like 2 or 3 or 4 Revenue Growth out of walmart and little improvement in the margin it would go a long way to get that stock back up towards 100 with a whole lot more beyond that. If you do the same thing for amazon, which by the way i think amazon is a fantastic business, you go and look at the valuation metrics, try to run whatever kind of cash flow model or whatever you want to run. You have to have some very lofty assumptions about growth and margins to make that math work. So for our money the way we look at it even though were very fond of amazons business, we think the Valuation Case is much better for walmart than it is for amazon. All right. Kevin and channing, sit tight, because while those Companies Sell a lot of stuff, the one thing they do not sell are bonds. But we have a news alert in the bond market where bonds are being put up for auction. Well get back to our debate in just a second. Rick santelli, professor, how did the 10year auction go . Well, i think Everybody Needs to hold their nose on this one. We gave this one a dminus, dogminus for demand straight up and shares a lot with yesterdays very weak 3year note auction youll see in a minute. The yield of these 9year 10month notes because this is the second reopening of this issue is 1. 516. Whats notable about it is the high yield in market was 1. 151. We tailed badly. 2. 33 bid to cover lowest since march of 09. Over seven years. Does that rhyme with yesterdays 3year . It certainly does. 64 is the ten auction average for indirects. This was 54. 3 weakest since january of 2015. And directs were on the light side at 7. 9, 7. 2 last auction. You have to go back about ten to get another low one. That was the good news 37. 7 of this go to primary dealers. Good luck with that. So i guess in the end heres what i hear, they didnt like threes, they didnt like tens. Thats what a 14 basis point, 15 basis point concession meaning yields have popped that much since fridays postemployment close. Tomorrow will be 30s and many on this floor thought wed get a good reption for the juicier yields. And that yield of 1. 516, the Second Lowest on record. The lowest on record of course was from july of 2012. That was around 1. 459. Many were betting we would challenge that. They were wrong. Back to you. Rick, thank you. Now lets get back to our walmart v. Amazon debate. Channing, i can run through the numbers. Im sure melissa has them on the top of her head because they talk about them all the time. 24 times pricetobook, three times price to sale, so far above any other retailer its ridiculous, why dont traditional valuation metrics seem to matter at all with amazon . Its a great point. And people have really misunderstood amazon. If you look at the last decade, amazon has been investigating in infrastructure and warehouses and their logistics. Theyve been investing in prime, web services. And what you saw last year is youre finally starting to see that bear fruit. And we expect that youre going to see earnings of 7 this year. We see 20 in earnings by 18. And then by 2020 this company could be earning 40 a share in earnings. So we think theres a big opportunity there. And how do you get there . Thats the big question a lot of people have. We assume about 275 billion, 300 billion in 2020. Apply a 10 to 13 operating margin on that, divide by share count and give it a multiple of 20, 25, 30, and the valuation doesnt seem that ridiculous. This is a company that is perfectly position ed they are the leader in north america and by far the biggest leader in cloud services. The earnings trajectory for this company is absolutely tremendous for the next five to ten years. And no one can match them. So i think what investors are underappreciating is the earnings power thats just now beginning for this company. Kevin, toipt go back to walmart and your sort of explanation of the valuation here. When you take a look at a pricetoearnings multiple, yeah, hands down walmart looks like the better buy compared to amazon. But what are you paying 16 times current p e for at this point . Because for this year the street consensus numbers are for negative growth, sales growth, and negative eps growth, and only marginal upside in the next year. I think we lost kevin. He didnt want to answer. Thats it. Hes shopping on amazon prime day right now instead of being on television with us. Another good point about, when you look at walmart, theyre really a gdp grower. And theyve been fumbling around with their strategy for many, many years, today look at what walmarts doing is defensive. What amazon is doing is going out and try to get 400 to 500,000 new prime subscribers that will help Revenue Growth for the coming years. Walmarts a one day this is defensive trying to protect a Little Market share. But they dont have a strategy. Secondly, if you look at what amazons doing internationally, what theyre doing in india, they can take this Business Model and move this to india. They can move it to emerging markets. Think about emerging market consumers, they dont follow the big box retailer concept. They have moved straight to ecommerce. Look at alibaba. So amazon is very well positioned for International Growth. And that, too, we dont think is in the stock. International grew 26 year over year last quarter. We think its just the beginning of International Growth there. All right. Channing and, kevin, if youre out there somewhere, hope hes all right. Jamie dimon says too many people are not getting a fair opportunity to get ahead. What hes doing to change that on power lunch when we return. Welcome back to power lunch everybody. Jamie dimon has written a New York Times oped and was published today about how he plans to help the economy and boost employment for the next generation. He starts by announcing a pay increase over the next three years for at least 18,000 employees. Lets bring in steve oddland, ceo of the committee for Economic Development and former ceo of office depot and auto zone. Steve, welcome, good to have you with us. It seems to me this is the way the system ought to work, where you have businesses making independent decisions about how to compensate their employees and at what level rather than having it imposed from above. Do you agree or disagree . No, i think thats exactly right, tyler. I think the situation follows the financial crisis where the banks let a lot of people go and then they held wages down for a long period of time. Now you see a systemic increase in wages. Were up about 2. 5 most recently. And the labor market is tightening a little bit. So im not surprised jamie is making this move. I think its a good move for them. Remember its not a lot of money for them. Its only about 0. 2 for their total sga. It helps retention, it helps them attract more educated and more skilled people. You know, theyre paying as little as 10 an hour for some of these Customer Service and these teller positions. And those are not unskilled positions. So it makes a lot of sense. But i think the important thing here is jamie said in that piece that this is not a blanket thing for all companies that every company should do the right thing for their company. And i think in this case we see that government intrusion was not necessary to make this happen but Companies Like j. P. Morgan and walmart before that are taking independent actions that are right for their companies and their employees. Why havent more companies done it . Yeah, well, i think that, you know, some companies needed to do it. You saw walmart take a billiondollar hit to their labor costs by raising you know, theyve got pressure from the shareholders and owners if theyre private not to do it, but i think as the labor markets tighten theyve got competition out there for this kind of employee. They also have expanded their training, which i think is really key because right now a lot of people are coming out without the proper training. And as we know Customer Service positions in particular need specialized training. So hes expanding that as well. Maybe there was no official law that they had to do this, but you dont think theres any political pressure here . Almost anybody who becomes the next president of the United States has campaigned on hating the banks. Yeah, well. And jamie dimon has suffered in the past for complaining about regulation, et cetera. I mean, the cynic out there could read this and say hes trying to curry favor here by saying hes raising his minimum wage. No, its an excellent point. And theyve been under pressure for a long time. The banks have been the whipping boy i think since 2007 at least. But, look, is it politically driven, it seems to me if it was youd wait until the new president was in rather than doing beforehand. I think its the right move. I think jamie was positioned in a way that was, you know, good for his company and good for his people. I think it was optimistic. But i really like the fact he said, look, this is the right thing for j. P. Morgan and every companys got to make the right decision for them. As i was thinking about this, its largely directed at Customer Service representatives and tellers as those are some of the lower people in their pay sort of spectrum. But between now and 2022, i suspect theyll be even fewer tellers working at banks as they automate more and more. So this may end up costing them really even less than you described, which isnt all that much. Youre probably right. And this has been happening over time. I think more and more banking is moving online. Thats what im saying, im not sure how many positions are really at going to be at 10 an hour or what theyre talking about raising it a couple dollars an hour. So it doesnt cost him that much, but i think its indicative of the fact theyre trying to make moves and hes trying to put, you know, a big bow on it. Which i would too, but look, there arent a lot of jobs that are really truly at minimum wage. Mostly in the Restaurant Industry and even thats moving today. So there arent a lot here anymore. Steve, thanks for your help today. Appreciate it. Good to see you. China just lost a major battle over the South China Sea, at least in court in the hague. Why the ruling could have a Lasting Impact around the globe. And as we head to break, take a look at the biggest dow movers this hour. Power back in two minutes. Real is touching a ray. Amazing is moving like one. Real is making new friends. Amazing is getting this close. Real is an animal rescue. Amazing is over twentyseven thousand of them. Theres only one place where real and amazing live. Book a seaworld vacation package and eat free. Hello prashant bhuyan. Cofounder of the Fintech Services startup. Hello watson. Your analysis of social media and conversations on various trading floors, helps us uncover insights. Insights that help investors predict market closes, well before markets close. You know, your analysis has helped us improve our predictive accuracy by over 500 . 550. 2, to be precise, but we can always do better. I like your attitude watson. Rebecca barlow was running a Nanny Company when her husband of 13 years suddenly passed away, leaving her to manage his failing water damage business, acme flood. She rebuilt the company from scratch which is now grossing more than 2 million a year. For more watch your business sunday mornings on msnbc. Brought to you by american express. Open. Welcome back. China lost a major court battle today related to territories in the South China Sea. Seema mody is here with the latest. Really a historic moment, michelle. The South China Sea dispute for years has been a source of anxiety. And now the United States over the past couple of months have been getting involved to protect the philippines, american ally. The concern by the International Tribune which rejected china eastertorial claims in the South China Sea will result in beijing expanding military presence around these 250 islands which experts say would dramatically increase the chance of an unintended conflict. But the former National Security Council Member james keith telling me china has to walk a fine line, exert a powerful stance in order to alleviate concerns domestically but not rock the boat too much on the international stage. It does have two important events coming up this fall, the g20 summit hosted in china and the sdr inclusion in october where its widely believed chinas currency will be officially added to the ims basket. Thats been a huge economic goal for the chinese leadership. The other topic thats been spoken about today is whether this geopolitical event will impact chinas Economic Policy. In order to preserve chinas sense of nationalism china will perhaps try to spin the news to show its citizens that its still supporting a sense of sovereignty in the South China Sea but its still unlikely china will use Economic Policy to protest this ruling. Unless of course a large conflict does erupt. On that note, a lot of Economic Data coming out over the next couple days from china, gdp, Industrial Production and retail sales. Keep that in mind. Which tend to be market movers. Absolutely. Seema, thank you so much. Seema mody. Lets bring in general wesley clark, former nato supreme allied commander. Thank you for being here. Thank you. How worried are you about what chinas response to this ruling, does that lead to an increased risk of accidents, so to speak. Unintended conflicts. Well, i think it certainly raises tensions in the area and theres uncertainty in the area now about chinas response. But i would be surprised if china takes any bold military actions as a result of this. Or even increases what its doing. I think chinas got to find a way through this. Its got domestic pressures. Obviously its not going to say, okay, we made a mistake, you can have the South China Sea back. But on the other hand it recognizes the weight of International Law, and i think china also recognizes ultimately International Law will work in its favor as it grows in its great power status. So its got to figure out a way through this thicket. It suggested that it actually doesnt believe in International Law, correct . They have consistently rejected that this court in the hague has any sovereignty over them. And in the wake of the recent brexit decision by the people of the uk who wanted to reject wanted to take back their sovereignty, so to speak, thats got a powerful argument in the world at this moment. Do the chinese have any right to reject this decision by the hague . Well, they claim they have a right to reject it. And they dont accept this as a valid tribunal, thats what they say. And theres a lot of invective out there against the United States for having behindthescenes orchestrated this in what theyve said to the public. But the truth is i think chinas leaders have a longer term and broader perspective on this. So theyve got to negotiate amongst themselves the right way through. Theyve got to discover the right way through this. They dont want to surrender their claims. They dont want to completely disavow they certainly dont want to mess up their Economic Growth by getting in a major conflict or dustup with the United States over this. So how they thread the needle on this is going to be very interesting to watch. And of course it does create uncertainty and anxiety. Sir, general, i couldnt have you here during the political season without discussing politics of course. Youve run for president on more than one occasion, there are reports now actually, hes just confirmed it with us that retired admiral James Stavridis might be a v. P. Pick for Hillary Clinton. What do you make of the political situation at the moment in the United States . With both donald trump and Hillary Clinton almost matching when it comes to their negatives. Well, i think that as the Campaign Gets Underway and the American People really start to focus on this that Donald Trumps numbers will fade away. He doesnt have the policy. He doesnt have thestature. He doesnt have the experience. And he doesnt have the ideas to deal with a lot of the issues that hes brought up in this campaign. And hillary does have the stature, the experience, and she has the ideas to deal with many of these issues. Are you concerned about the way she handled classified material . Actually, if you just think about this. There are 30 some odd thousand emails turned over and there were a hundred that had problems. And maybe she didnt recollect that a paragraph was mark ed c but shes reading hundreds of thousands of words per week. And shes working all hours of the day and night. So, yes, it would have been better if it hadnt happened, but on the other hand every secretary of state preceding hillary has had the same system. They werent investigated the same way. The nation was still safe afterwards. So i think hillarys said it right. She said she wouldnt have done it she wouldnt do it again. She made a mistake. But i think we have to move on from that issue. General clark, thanks so much for joining us. Thank you. General wesley clark joining us on the situation in the South China Sea. The final gold trades are crossing for the day. The metals close is on deck when power lunch returns after this. Every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. Im Sharon Epperson. Heres your cnbc news update for this hour. Appearing before the House Judiciary Committee attorney general Loretta Lynch declined to answer questions on the probe into Hillary Clintons emails, saying it would be inappropriate for her to comment. She was then asked why she did not recuse herself. The matter was handled like any other matter. It was reviewed through the chain by those independent career agents and prosecutors. And in considering the matter there was no connection, there was no need for a recusal or independent prosecutor. Hillary clinton is vetting James Stavridis, retired fourstar admiral served nato as possible running mate. Stavridis currently the deen at fletcher university. He oversaw operations in the middle east, afghanistan, libya and syria. Starbucks is increasing prices on some of its beverages. Select sizes of brewed coffee will rise 10 to 20 cents while espresso and tea latte will increase by 10 to 30 cents. This comes a day after it would boost the base pay of all employees in the u. S. And the running of the bulls continuing in pamplona. Some 1,000 people taking part in day six of the nineday event. No one was gored in todays run, which lasted just over two minutes. Thats the cnbc news update at this hour. Back to you, melissa. I guess its a success. Sharon epperson, thank you. Thats how they gauge it. Final gold trades crossing for the day. Lets take a check here finally in todays session as we do sit at new record highs in the dow and s p 500, were finally seeing a more decisive rotation out of the safety trades. Part of that is the drawdown that were seeing in gold 1335. 30. Taking a check on the rest of the metals complex we see declines for silver as well as platinum. But check out the pop in the price of copper. It is up by 3 right now. Ty. All right, folks, the dow and s p 500 are hitting new intraday highs today while the nasdaq has turned positive for the year. This is all because the four of us on power lunch are back together for the first time in probably a month. How much higher can we go . Joining us to discuss that mary ann montane and john canali. Welcome to both of you. John, does it get any better than this in terms of where all of the little tumblers are clicking in for the economy, for interest rates, et cetera, et cetera . It seems to be. And the fed seems to have backed off a bit, earnings season just about to start. It looks like Global Growth might be reaccelerating here. And we have hit a new alltime high. I think there are some hurdles out there right now were kind of backing off the macro thats been driving markets and focusing more on the micro with earnings season coming up. Theres plenty of micro to digest in the next couple of weeks. Mary ann, ive been musing in the past several days that here we are at alltime highs. We are clearly still in a bull market, but it doesnt feel all that good. I mean, were back where we were. Weve kind of been circling around 2100, 2130 for a couple of years. Normally when were at alltime highs like this theres a kind of euphoria. Maybe its healthier that were not feeling it. Well, maybe the euphoria is because the gains have all been in utilities and staples and not very exciting kind of stuff. Aside from bond substitutes. We think Going Forward with the good jobs number we saw on friday and follow on volume on friday although we were, you know, close to a record high then, light volume summer trading. But we think well get confirmation in the next couple of weeks with more trading and probably a rotation into the growth stocks. Rotation into growth stocks. And so where can i find some things, mariann, that are still worth buying maybe because their prices are down . Well, that would be health care. Thats one of our focuses on growth. And focusing more closely into biotechs. These are really the outsourced r d departments of the large cap pharmaceuticals. So as they make progress with the fda, they get progress payments from their partners in the large cap pharmaceuticals. And thats where you see progress in the stock prices. The two names i like in particular are alexion and omeros. All right. John, how about you . Where do you see the market at year end, higher, lower, about the same . And where are your picks residing right now . Well, here at lpl research we just published our midyear outlook, and we see some modest upside here for stocks between now and the end of the year. Maybe a couple percent. I think the real story will be on the bond side, maybe flat to down over the year for bonds. Right now favorite sectors in the growth area, technology, health care, mlps, reits also look attractive and beginning to dabble for the first time in a long time in emerging Market Equities which have been, you know, really struggling in the past six and a half years and finally now showing signs of life. John, thank you very much. Ma mariann, john, thank you. Go to powerlunch. Cnbc. Com to see what john picks. We are almost to the moment you have all patiently waited 364 days for. The naming of cnbcs 2016 top state for business. Scott cohn is in that top state, which of course he is still keeping secret even from us. But he does have the runnerup. Scott. Reporter brian, weve been doing this ten years now. There have been trends that have come and gone. Theres also been consistency. And this state falls into that latter camp. Lets continue our countdown now with state number two. Texas, the lone star state, is number two this year with 1564 points. Texas also finished second last year. This year was supposed to be a challenge for texas with oil prices at a fraction of their peak. But true to form texas barely missed a twostep beat. Growth has slowed, but the texas economy is still number one in the country. Thats because its big and diverse, home to 45 companies in the s p 500. And despite the big budget challenges brought on by low oil prices, state finances are strong. The job market is healthy too with unemployment just below the national average. But texas stumbles badly in education, a perennial weak spot coming in 40th. And quality of life drops to 37th. Texas is an unhealthy state with the largest percentage of uninsured residents. It is also among the least inclusive states in the nation, one of only five states with no antidiscrimination laws for public facilities. Texas has no individual or Corporate Income tax, just a state Franchise Tax at 0. 75 . The state and local sales tax tops out at 8. 25 . Texas largest employer is the heb supermarket chain. The largest industry is mining including oil and natural gas. Texas is the only state to finish in our top five all ten years of our study, including top state finishes in 2008, 2010 and 2012. So we have sufficiently narrowed this down. Where am i . We will give you one more diabolical hint, and that is eight is enough. Eight is enough. What could that be . Give us your guesses. Topstates. Coming up on closing bell we will reveal americas top state for business in a way you will not want to miss. Thats coming up on closing bell right here on cnbc. Brian wasnt here yet, so eight is enough. Yesterday it was one stop shopping. And then this morning i was on squawk box and you had original call and those are all about the number one state. Thats correct. Yep. We have all of these hints weve been giving out. Go onto twitter with hash tag top states, you can look at the guesses, look at what weve been hinting. You can weigh in with what you think, who should, who shouldnt be. All i can think about eight is enough, scott, is the actor, the child actor adam ridge. And he had a bowl haircut in the 70s. Is it a state that makes bowls . What . Sorry, ive been gone youre starting to get into my head now, brian. Is it micronesia. Do territories count . I cant remember the rules. Scott, well see you soon. Were thinking we should expand it to provinces. There you go. Not the United States, not the territories new finland. Yes. Six people celebrate. Thank you. Scott, well see you soon. Hes going to be breaking down thank you. All right. Yeehaw. Yesterday it was the s p 500, today it is the dow hitting record highs. But not every stock and sectors back at new highs. Some arent even close. Were going to let you know which ones are what were calling the dumpster fires of the stock market coming up. Power lunch back in two. Youve wished upon it all year, and now its finally here. The mercedesbenz summer event is back, with incredible offers on the mercedesbenz youve always longed for. But hurry, these shooting stars fly by fast. Lease the cla250 for 299 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Welcome back to power lunch. Republicans have begun their decent on cleveland. Eamon javers is there live for us. Reporter yeah, thats right. The police are certainly here, but guess who is not here . A lot of the big names from corporate america. This political season has just been so intense, a lot of names simply shying away. We polled a bunch of companies to find out those that have contributed to political conventions in past years whether they were going to do it this year or not. A lot of them gave us a whole bunch of Different Reasons why theyre not going to be here. A lot of them said their decision not to be here was in fact made before any nominee was selected. Nonetheless here is the list. Take a look at this graphic. Youll see big names, general electric, they gave 100,000 last cycle. Nothing this time around. Amgen, similar picture in 2016, nothing. J. P. Morgan chase, theyve decided not to give to the conventions this year, but they are donating to charities in the cities where the conventions are being held to help the communities there. Also, ford, Motorola Solutions and u. P. S. All giving 100,000 or more last time around, this time around zero, zero, zero across the board for all of those guys. Again, Different Reasons for each company, but ultimately a decision not to participate in the political spectacle that is a National Political convention. Most of these companies are not contributing both here at the rnc and at the dnc in two weeks in philadelphia, guys. So just a whole pullback, generally, from politics is what were seeing from corporate america. Yeah, those numbers highlight it quite starkly. Thanks. Eamon, thanks. Managing to push the Democratic Party platform further to the left, more now from cnbc contributor larry kudlow also an informal advisor to the donald trump campaign. This is my favorite part in the campaign where the two candidates in the primaries are beating each other up, Hillary Clinton said he had to retract being friends with the president , and today. Love. Theyre pals. American style to quote another 70s show. Actually, none of this is as bad as it used to be in the 19th century when they used to just kill each other. Actually, there were threats, i mean, i was around for most ofts last quarter of the 19th century. Yesterday was the anniversary of the burrhamilton there you go. Politics today is really quite tepid. This is not a shock. I dont think this is a shock. I do think what eamon is suggesting or others suggesting this really does move the Democratic Party pretty far to the left. I thought it was a foregone conclusion in the primaries. Mrs. Clinton, just looking at her stuff, is not mr. Clinton. Economic justice, workers rights, womens rights, minimum wage, family leave, environmental justice, social justice, raising the inheritance tax, raising taxes on individuals, raising taxes on corporations. We have a growth problem in the u. S. I dont care which party youre in. We have a growth statistical problem. My friend austin gools by would agree, left of center smart guys. I dont see what mrs. Clintons antidote is. I dont see her solution and i think thats going to be a bigger problem. Reports are shes vetting former nato Supreme Commander stavridis, what do you think of that . That sounds very hawkish, doesnt it . I guess, although nato is something thats going to have to be restructured. Its already getting restructured, im not sure what that does for her. The party is very, very left. Very, very antiwar. Is that the kind of person you want on the ticket . Well, i dont know. Im not sure that does much. How does it change the calculus for how trump thinks about who he picks . Very important to know that people vote for the head of the ticket. Thats really like big, big really doesnt matter. Almost doesnt matter. Vice president ial choice. There are some smart political guys that will tell you geographys something. So the home state is not unimportant during consequential. I, myself, think donald trump is looking at the midwest. Weve heard all the mike pence rumors. What about kasich . Might deliver you ohio, might deliver western pennsylvania. He doesnt want it. Hes not even going to the convention we hear, right . Im just throwing names. A lot of people say a lot of things in politics and reverse the next day. I think so. I think you have a point. As far as i know theres no communication between mr. Kasich eamon javers, who works for cnbc by the way, tweeted out earlier today that a top gop operative told him off the record without mentioning a name that a big name goper could still jump in and try to seek the nomination. Oh, for heaven sakes. Do you believe that is possible . No. I think thats just silly. Well, its technically possible, right . You could have a change in the rules committee, they could do a vote on monday. Do you know what, reince priebus, who in my opinion has played his hand just terrific during all this turmoil, has ruled that out. They dont have any votes for such a change. It is not going to happen. Put that completely out of your minds. Completely out. No way. You said v. P. Pick doesnt matter. Is that true for trump this time around . Because a lot of people have said i want to see who he puts on the number two. Well, i think thats fair. I think at the end of it, it doesnt matter. But i think positioning toward it, look, trump has openings in the midwest, which republicans havent had in quite some time. So lets put john kasich aside, although i agree with sully that would have been a very interesting pick. Mike pence who is frequently mentioned, covers a lot of that ground. Hes been an excellent governor of indiana, very well liked among conservatives and knows the legislative process in washington, d. C. But i dont want to suggest i dont know a thing more than you all know about this. Im just speculating. Newt gingrich is still in that game, though a good friend of mine, a pollster that you all very well know says theres enough excitement at the ticket already without newt. But newt is a terrific guy, hes a friend of mine. Chris christie is still in the game. I think Vice President ial choices that when they matter is when you have someone who is not whos a negative. In the negative. And when the head of the ticket is not highly experienced. And i would put into that category george w. Bush. I think the choice of cheney made a difference because he was widely regarded as an experienced guy. I think the choice of biden hit that same note. What my question sarah palin, was that a big difference . Sarah palin was a problem because she was not experienced. Exactly. And here i thought she was the solution. Wait a minute, my question is we started talking about the platforms, do platforms matter . Yes and no. Not really. Its whatever the candidate wants to become the platform. Not really. There will be some interesting press. Im hoping to cover that for us. I dont think it really matters. The trump people will do very well in the platform discussions. His basic thing, i know he makes off the cuff comments he probably wish he didnt make, i get all of that. But, but, but, on the issues he wants to deal with the recession threat, cut taxes, lower regulations, restrain spending. He said thursday, i was with him at the republican meeting in washington, d. C. He said he is for trade. He understands the benefits of trade, but you got to play by the rules. Most recent president s would have said exactly the same thing. Border security. In other words, my point, there really isnt much daylight on the issues. Theyre playing the music. Between mr. Trump and the rest of the party. Its going to be exciting next week. Youre going to be there next week . Yes, were both going. Thank you, larry. Power is back in two. Welcome back to power lunch. Rick santelli live here on the floor of the cme group. We had a real iffy auction today and yesterday. Look at the intraday of 10s, they were the protagonist or antagonist. Look at a twoday. Before brexit you can clearly see the 1. 57 yield on the left, same timeframe early june for the dollar index, whats interesting is it keeps stopping right around the same area 96. 5. Thats what you want to pay closest attention to. And if you want to hold on to the power, power lunch will return 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 all right everybody. Welcome back to power lunch. Almost 2 00 here in the east. If youre just joining us, the s p 500 and the dow both hitting alltime highs. The dow is up 115 points right now. Pretty good day overall. However, not every stock and sector is back at highs. Some arent even close. Dom, glass half empty, chu, is looking at those stocks. Im not a glass half empty guy by nature, but i know what youre trying to say. Take a look at this, there are some that are close but no gcigr yet. Look at mid cap just about half a percent below. For the small cap stocks we still got about 7 to go before we get alltime highs back in june 23rd of 2015. Then the dow transportation stocks, yes, a fourday winning streak for transports, however were still about 16 below the record highs that weve seen. So well see if those stocks can get around to it. As for the s p 500 sectors, theres still a long ways to go for some of these guys. Check out whats happening here with Telecommunications Services stocks. Back during the dot com bubble a lot of these guys were richly valued now 46 below for that sector. As for financials no explanation necessary there. Were still about 40 below record highs in 07 of february there. 31 below record highs for energy stocks. We know the story there as well falling oil prices. And then tech stocks during the dot com bubble, we hit some really big highs still 26 below from where we were there. As for some of the stocks interesting here. We kind of put a swath, i want to give you an idea of whats going on. Net app, still 83 below alltime highs for that particular stock. On the energy side transocean drilling 92 below where we were back in may of 2008. And aig, as an indicative stock rather the financial crisis, guys, remember 97 below where they were back in december of 2008. Remember, on a split adjusted basis, guys, aig shares were about 1450 per share back in december of 2006, tyler. And of course that company got the federal bailout years ago, a special situation if ever there was one. Dom, thank you very much. Lets look at where the market stands right now at highs there 18,340 for the dow industrials. It is certainly higher. The s p poking into record territo territory. And nasdaq squarely above 5,000. Lets go to steve liesman. Thank you very much. Federal reserve released minutes and six fed banks want to raise by 0. 25 in june. Two new banks, boston and st. Louis joined four whod already been there. Richmond, san francisco, cleveland and kansas city all wanted to raise by 0. 25 . Theres little parsing of this. Boston, richmond and st. Louis, they took their vote, their boards of directors voted to do this before that weak may jobs report. But three other banks, cleveland, kansas city, san francisco, they took their vote after. So they didnt care about the weak may jobs report. They still wanted to raise the discount rate. Thats the rate that banks go to the window, the feds discount window for emergency lending if needed. The fed banks who wanted that hike they expected a stronger economy and higher inflation. But the Federal Reserve board they act on these requests from the banks board of directors, they left the discount rate unchanged at 1 . And, tyler, that is a 45second story about how much the world has changed in just a month because right now we dont know how those banks would vote. Back to you. Steve liesman, thank you very much. Lets get back now to the markets and what theyre doing. Bob pisani now on what is helping to drive this market into record territory. Bob. Steady as she goes. I want to emphasize while were at big cap new highs were also the same way in the market as well, new highs on the s p, intraday high on the dow industrials remember little over 18,300 is where we want to be. 18,312 would be the closing high for the dow. But were approaching highs on broader swaths of the market. The s p mid cap and s p small cap just a few points away although not the russell 2000. My point very broad rally were seeing. Meanwhile the fade trade going on here, utilities and telecom down again today telecom just got into positive territory but down most of the day. Gold down four days in a row right now. S p is at a new high but been there all year once you factor in dividend gains of roughly 2 . Since 1988, if you just look at the price index of the s p, its up little over 700 . But if you factor in the dividends, put in those 2 roughly a year, dividends and reinvest them every year, the s p total return what youd actually have in the bank 1400, thats right, twice as much if you reinvest those dividends. And thats why we keep talking about the importance of dividends. By the way, the search for yield continues. Weve seen corporate theres the lqd, thats the big Corporate Bond etf, Investment Grade Corporate Bond, took in over a billion dollar of new funds on thursday. Thats the biggest flow ever into that. So the search for yield continues that lqd about a 3 dividend yield right now. Guys, back to you. Bob pisani, so weve been talking about that 2100 level for the last two years grinding around around it, now finally we have a breakthrough move to the upside. Can we get more . Art hogan is chief Market Strategist with wunder lick communities, can we move higher from here . Michelle, i think you can. I think youve made a very good point. This overnight success took about two years to get here. Back in february we crossed that line 26 times. Stocks are more attractive than bonds, full stop, i think some of the headwinds this market had are turning into tailwinds. So weve got the price per barrel of oil is up 30 on a yeartodate basis, doesnt look like thats going to zero. Firmness in the dollar is settling down a bit. Thats going to help multinationals. This is going to be the quarter where we see an Inflection Point in earnings. So after four quarters of negative earnings growth, the s p 500 is going to make money. Thats going to continue. I think the biggest argument you make the s p 500 yield 2. 25 percent right now and u. S. 10year yield is 1. 5. You dont fear the message in the bond market . The bond market isnt telling you something bad this way comes . I dont think im smart enough to read the New York Times or fear the bond market message. Because the message the bond markets telling us is theres not enough bonds out there and Central Banks are easy around the globe. I think theres a liquidity issue. And i think weve got Central Banks that are keeping the entire yield curve lower than it should be. So its intervention, not necessarily something wicked on the way. Hes making reference to an article in the New York Times this morning about the bond market. And mr. Lucini, what do you think . Do we have here that this market can advance materially . Materially is what i want to lever off of. I think the answer there is no. Unless were going to have earnings coming through. Art was making reference and i think thats the necessary and so far missing ingredient to this rally. Its certainly encouraging for lack of better term, there is no alternative to equities have invited investors into the bond surrogate sectors on a yeartodate basis, but a key to sustained advanced materially higher prices has to come through earnings. Last five years was about multiple expansion. Were at 17 times forward earnings at this juncture. If we see the fundamental economic underpinnings in the u. S. Economy, which i think is quite sturdy, matched by other economies, important ones and particularly well get news on china this week with regard to their gdp heres what i dont understand, do you doubt the earnings are going to come through . Or you want to wait and see the earnings do before you commit . I think the earnings will come to. We are lapping those declines in oil prices. I think we are again going to see the effects of the strength of the dollar. That combination with steady and somewhat predictable growth is going to help all sectors somewhat uniformly. Were expecting maybe modest 5 to 6 gains, not the double digits pencilled in right now by analysts, but thats enough to support equity prices with a similar kind of gain. So the s p 500 in your opinion would go where . Its at 2153 right now. On our order something 2200, 2250 not unreasonable. Take it higher than that in the chase for performance occurs in the result so many investment managements underperform. Dangerous rally if it wasnt supported by earnings and consequence wed be more decline to fade it than buy it. All right. Mixed market. Thank you. Art hogan, mark luschini. Melissa. All right. Sage therapeutics up 38 on the news Company Released positive mid danger e stage trial data. If approved this would be the first drug released to treat this condition which impacts around a 10 to 15 of new mothers. Joining us is our own meg tirrell and jeff nunes. Thank you both for being here. According to results of most Analysts Results are stunning. In laypersons terms, what does that mean . First, thanks for having me. Were very excited by these data. I think as you point out theyre remarkable. Probably the largest weve seen in this population ever with intervention or potential therapy. So what we saw in these patients, in these women, was decline in rating scale for depression went to normal within 24 hours, basically depression remitted, went away. Wow. So a question that a lot of folks have especially in depression studies is can this be replicated in a larger phase three study. You did have a Placebo Group and the difference was pretty astonishing, but ten patients. Thismarket . What we know today from this study we saw this 70 response rate, remission rate. And that we believe accounts for about 20 of the overall population of women who have post partum depression. Another 50 have moderate depression. And were about to begin a larger study looking at both of these populations both the moderate and the severe forms of depression. And so thats with this drug which is i. V. Formulation so women are treated for 60 hours with an intravenous infusion. Also developing a oil molecule. How do you anticipate these side by side programs playing out . Will they target different patient populations in terms of severity. What weve seen from data is we believe these women have acute deficiency a brain hormone lowered normally around birth and some women appear to be vulnerable to the imbalance that causes. Our drug targets what we would say normalized brain function. We believe that the molecule sage 217 which will be entering the clinic this year as well has the same faeffect. Are there applications for other forms of depression or specifically postpartum . We dont know. We believe based on the data weve seen today with the dramatic effects that weve seen that it has potential in oh other forms of depression such as bipolar disorder or panic disorder. What would be the timeline in testing those other potential depression or psychiatric indications . Our focus is still on post partum depression. Well be meeting hopefully with the fda and other regulatory authorities to understand the time course for post partum depression and from there we can prioritize the rest of our portfolio. All right, guys, thanks so much. You have an event coming up. Thats right. Want to continue this conversation with jeff, join us, tune into periscope at my twitter feed. Well be taking questions from the audience. Guys, thank you. Thanks so much. Jeff jonas, ceo of sage therapeutics. Coming up, latest numbers and warnings about the pokemon go craze. Plus, with money coming into stocks out of gold and bonds, take a look at this. Big drawdown in gold today down by 1. 7 . This is the fourth straight session of losses for the yellow metal. Look at the 10year note creeping to 1. 25 . You both have a perfect driving record. Until one of you clips a food truck. Then your rates go through the roof. Perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you twentyfour seven. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Keeping the power lines clear,my job to protect public safety, while also protecting the environment. The Natural World is a beautiful thing, the work that we do helps us protect it. Public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. We want to keep the power on for our customers. We want to keep our community safe. This is our community, this is where we live. We need to make sure that we have a beautiful place for our children to live. Together, were building a better california. Welcome back to power lunch. Largest Internet Retailer has big prime day today. You can see in mid afternoon trading did take a rather steep intraday drop. Not big on relative basis, but still chart tells the tale here. Happened after headlines came out Ecommerce Company called channel advisor. This is a company that does a lot of cloud based computing tracking cloud traffic, that sort of thing. They have said in a statement that they believe 2016 amazon prime day sales are in line with prime day from last year in the United States. Make note prime day launched at 3 00 a. M. Eastern time. Deals are scheduled for this afternoon. However, the actual headline did appear to move the stock to the sdo downside. Were talking about a stock hit record high earlier in trading today as well. And our own team here at cnbc, our retail team, courtney reagan, do say perhaps this is maybe a little too early to give a definitive answer on what prime day is supposed to be given these forecasts. Still moved the stock. Wanted to call it to your attention. Back to you guys. What theyre saying is may be in line with last year . In line with u. S. For last year. Okay. Courtney was reporting earlier it was almost double. But we also dont know. Right. Dom, thank you. Tesla failing to disclose fatal crash in may involving an autopilot car. Shares of tesla pretty flat today down about 6 so far this year. Should you own shares of tesla . Lets bring in tesla shareholder president and cio with cabot wealth management. We should be clear youve own tesla stock for quite some time and seen massive gain on those shares which you bought around 2012. So your perspective may be different than those approaching tesla today. In terms of this possible breach of securities laws, the issue here is they didnt disclose this perhaps that big secondary offering. Why dont you think this is material . The fact that a car using one of their newest technologies, which theyre using in order to entice people to buy the cars may have failed and caused this fatal accident. In this accident its really just an accident. Its an accident funfortunate, doesnt change the outlook and not material financially to the company. Didnt change the valuation a great deal when that news came out. Most of the legal team, i think, at tesla looked and said it wasnt material. So i think thats not the key thing for investors today. I think investors really need to look at the goal the company set out for 2018 and say is that achievable, is that a realistic goal. And what is amazing to me today is most analysts have not budged numbers. In fact, some have dropped their numbers. And i dont believe well, thats primarily because of their missed delivery guidance, which is a whole other issue. But in terms of whether or not this is material, does it not matter if this was the first accident or the seventh accident . I mean, the fact of the matter is this happened. This is using a new technology which the company is spearheading. Right. And it is up to the company to disclose to shareholders whether or not wall street keeps their estimates or however the stock reacts, thats not material to deciding whether somethings material. Right. Right. No, i was referring to what investors need to look at today. And i think thats really what we need to focus on. But regarding this issue, all the facts arent out yet. Sure. I read that the truck driver said the guy was watching a movie. Now, if you think you can watch a movie with the autonomous and drive down a highway, thats not whats available today. You know, whats available today is an assist to the technology. So this is still one of the most exciting companies i think on the planet today. And we are just as optimistic today as we were four years ago when we first bought it. And i think the reason is 80 million cars globally are sold. Thats a 2 trillion market. And this could be the platform for the new energy it could be, rob, its brian. Let me jump in for a second. Sure. I hear what youre aisaying about the wreck. Its tragic. When we look at the viability of tesla as massive Going Forward, two things stick out. Number one, lack of lithium. You need lithium to power these batteries. Lithium is hard to find, its expensive and in limited supply. I know theyve locked up a bunch of supply. Thats a huge concern. Talk about that. And also to your point 80 million cars, gm, ford, they havent done electric well yet, but tesla has a lot of wellfunded, wellcapitalized and very experienced competitors. The lithium my understanding is thats not going to be an issue. Theyre going to have to work to get the material, but thats not an issue. On your second point and regarding the companys overall strategy on how theyre going to produce these cars and those kinds of things, theyve actually done pretty well and hit probably 80 of their goals that theyve hit. Now, this goal of 500,000 is fairly audacious. I think its very bold. Im not expecting to hit 500. I think they could hit 400,000 potentially. And at that level the company could actually produce 28 billion in revenue. This company has a 33 billion market cap today. So i think the stock has tremendous upside from here. Right. And im not too concerned. Another factor, and ive never heard anybody say it on any of your programs is the efficiency of the electric motor versus the Combustion Engine. The Combustion Engine loses 80 of the energy when its producing its movement for the car. The electric engine only loses 20 , so its four times more efficient. I think thats the reason this is going to be a success. And i think tesla has a threeyear lead on most of the competitors. Most of the other viable vehicles out there today arent anywhere near tesla. Right. Okay. So we continue to be very optimistic on the company. Rob, thanks for your time. Great, thank you. Cabot wealth management. Speaking of hysteria, the hysteria over the pokemon go app is continuing, but there are also some warnings. Julia boorstin joins us now from los angeles with a little friend. Julia. Hello, tyler. Players are hooked on the fact that pokemon go makes them feel like these characters are in the world around them. In fact, they are so distracted by playing this game that the new york dmv today issued a warning reminding people not to play pokemon go and drive. And the Holocaust Museum in washington, d. C. Just had to ask visitors to stop playing pokemon go. Plus, there are reports of pokemon injuries as players are distracted by the game. Plus, pokemon robberies of people lured to isolated locations while playing the game. Now, nintendo shares continue to gain on this news of 55 in tokyo trading over the last week adding 9. 8 billion to nintendos market cap. Pokemon go has been downloaded more than 8 million times to u. S. , ios and android devices, thats according to data firm sensor tower. 1. 6 million daily revenue from ios devices in the u. S. Alone. Nintendo is sharing that revenue with developer niantic with Pokemon Company of which nintendo owns a third, as well as with the google play and apple app store. Both take 30 of their revenue. This apps surprise popularity could help grow mobile gaming. Right now mobile gaming is estimated to bring in 37 billion in global revenue according to a Company Called nuzu. While the game is coming to europe and asia, chinese audiences are stuck playing the copy cats to play pokemon go you need a google account which is inaccessible without circumventing chinas great fire wall. There was an outcry about that google law, again, ios users were told they were givering the game full access to all of their information. Niantic says its fixing that and it was just ann error. I have no idea what you said because ive been so distracted by that thing. Little floppy green thing. Were people playing pokemon go in the Holocaust Museum . They were. Seems like people are playing pokemon go everywhere. Central park crowds of people staring at their phones. Go pretty much anywhere. Rude. In the last four or five days people have become obsessed. Ive been gone for a week, a week ago friday, weve never mentioned ive never mentioned pokemon in ten years. No, i havent either. I come back, its all what the hell happened last week . What were you guys doing . What did you do, tyler . I did nothing. What is pokemon go . I remember pokemon did you listen to julia . I did. Thats not a real turtle, is it . No. That was a joke. Its in the game. Good stuff, julia. There we go. I know you love the fact that the dmv helpfully reminds us dont play video games while driving. Thanks, dmv. Thanks, julia. Back to reality. Back to the lab again. The dow and the s p 500 hitting alltime highs, but there are still stocks analysts think have more upside. It is called street talk, its real, its not virtual. Were going to do it coming up after the break. Romantic moments can happen spontaneously, so why pause to take a pill . Or stop to find a bathroom . Cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use. Many men arent aware their Health Insurance may cover cialis. Contact your health plan for the latest information. Highs for the dow and s p, lets show you whats leading the dow higher. Goldman sachs, dupont, nike, materials, industrials, metals, energy doing well. Financials, the defensive stocks are underperforming throughout the day here. Little change in the leadership. The bulls would like that. We will be right back. Power lunch is back in two. You both have a perfect driving record. Until one of you clips a food truck. Then your rates go through the roof. Perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you twentyfour seven. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Im Sharon Epperson and heres your cnbc news update at this hour. Defense secretary ash Carter Holding a joint News Conference with afghan president afghani. We discuss president obamas recent decision to create additional flexibility to the u. S. Commander here in afghanistan. Flexibility that will maximize the use and effectiveness of our forces that are already here in afghanistan to support afghan forces. Theresa may left her final Cabinet Meeting as interior minister a day before moving into 10 downing street as brita britains next Prime Minister. She waved before getting into an awaiting car. And she will become britains second female Prime Minister after margaret thatcher. General mills recalling cake mix because they used flour that was recalled earlier due to potential e. Coli contamination. No illnesses have been reportedtodate in connection with the cake mix. And a moment of silence called at a house hearing on capitol hill. House Judiciary Committee chairman bob good lat called for an end saying we must all come together as americans. Thats the cnbc news update at this hour. Back to you, michelle. Thank you, sharon. Energy stocks are higher because oil is higher. Its closing for the day. Its up big. Lets get to Jackie Deangelis at the nymex. Good afternoon, michelle, thats right. About a 2 pop in oil prices today. Roughly a 5 move. Four reasons here oil moved higher today, the first would be the slightly weaker dollar we were watching. And also this Strong Equity session that were seeing in stocks in record territories. Meantime, opec was out with its monthly report forecasting tighter supplies in the back half of the year. And finally, we had a twomonth low yesterday. If youre trading the range it was certainly time to buy the dip. Back to you. Got it. Thank you, jackie. All right. As we head into the final 90 minutes of trading lets get to bob pisani on the floor of the new york stock exchange. Bob. Steady as she goes. Take a look at our two major indexes at new highs. Remember dow 18,312 is what we need for the closing high. S p also at new highs as well. Number of sector indices essentially near that, lets not quibble about a few points. S p mid cap and small cap. This is a very broad rally, small, mid, large caps all moving close to new highs right now. Meantime what im calling the fade trade goipg on. Consumer names down today along with the gold names. Reynolds, kraft, walmart, smuckers, all big Leadership Groups just a few days ago now moving to the downside. Same with the other group, utilities and telecom, so your con ed and southerns that were market leaders and verizon and at t, 52week highs, theyre on the negative list right now. So dow higher, crude up, gold down. The dollars behaving, the 10year is just up fractionally. Just about goldilocks for stocks, at least for today. Back to you. Bob pisani, thank you very much. Time for our daily segment trading nation, traders do trade better together. Lets keep it very macro. Since the s p 500 and the dow are at record highs, mkm partners, eddie, im not going to discourage or dissuade our coverage, but i do need to remind our viewers that 5100 or whatever on the nasdaq back in 2000 is 7,000 today adjusted for inflation. That said, do you think well make a nominal new high on the nasdaq any time soon . I think theres a very good chance that well get that pretty soon. The nasdaq has really done well lately. Were up this will be the ninth time in ten sessions that the nasdaq closes higher. As youve mentioned other indexes have gotten new highs and the nasdaq is still trailing. But remember at one point this year the nasdaq was down 15 for the year. Its made all that up and its green now. The thing is even all these years later still the nasdaq is overwhelmingly a large cap tech index. The tech weighting in the nasdaq composite is about 40 , thats double the s p 500. So really what were going to see is as earnings season rolls out for the next few weeks, if those names like google and microsoft and apple, if they have good earnings, i dont think there will be any problem of the nasdaq bursting through to a new high. Great point, eddie, microsoft, amazon and google in the nasdaq 100 are 30 of the 100 stocks. So youre really almost betting on just four names in that index. Jonathan, lets strip the emotion out of it. Lets look at the technicals here. Do you see a new nasdaq hightechically any time soon . I think thats a pretty good bet as we head in towards the back half of this year. If we look at fridays action, we had the best breadth on the nasdaq composite that weve seen since august 2011. So theres pretty good odds that nasdaq will follow the s p and the dow to those new highs. Thats kind of looking at the rest of the year. Very short term its probably not the best entry point to jump in here. As eddie said weve been up nine of the last ten days. Its the best tenday return for the nasdaq since the 2011 lows. That really puts the nasdaq at this down trend or resistance line from the 2015 highs. So big rally into resistance. Lets let it consolidate here a little bit, let it kind of settle down from all of the hype of the new highs and then look for a better entry point. Longer term look at going back to the highs we mentioned from 2000, really the last two years have been a consolidation under those highs. Its coming to terms with that 5100 area. Ultimately if we were to take out those 2000 highs that would be a structural breakout similar to what the s p saw in 2013. And that would be very bullish. We think it probably follows. Pretty good bet technically eddie feels the same well. Although all those acronym companies, tyler, eddie and jonathan, thank you very much. For more trading nation, you can head to our website tradingnation. Cnbc. Com. The dow industrials as we noted hitting a new high today for the First Time Since last may, but which dow stock has performed the worst since the last new high . Going to bring you a higher love when we come back. And now the latest from tradingnation. Cnbc. Com and a word from our sponsor. Profits are great, but deciding when to take profits can be very stressful. So to help take the emotion out of a trade, consider scaling out of a winning position. For example, one could sell half of their position for a profit and then use a stop order on the remaining shares. All right, folks, welcome back. The dow and s p 500 have hit alltime highs today. The nasdaq not quite there, not just yet. Bertha coombs live at the nasdaq. Hi, ber tha. Yeah, that said we are seeing some outperformance here at the nasdaq. The nasdaq composite on pace to close above 5,000 for the first time this year. Still about 4 away from its alltime high a year ago. And as you take a look at a round trip here, the leadership has shifted a bit. On the way back to this level facebook and amazon are the only two of the stocks up and amazon is the only one at new highs, although it has come off of that here intraday. Microsoft, which had also rallied early in the year and provided some upside, still down about 4 yeartodate, although it is strong today. And lets not even talk about apple. As far as the standouts today, sage pharma, biotech pretty strong today. Sage on positive data for a postpartum depression drug. Still in bear territory, beaten down biotechs best gainer so far this month, sector up more than 6 . And nasdaq biggest driver hardware maker seagate surging after announcing job cuts and upping forecast. Giving a boost to hardware and storage players. The Philadelphia Semiconductor index though, the real standout, its at a new 52week high today with a number of chip names like nvidia continuing to be at historic levels. But look whos sneaking in that 52week high list, cisco. So were starting to see a little bit more, brian, a little more variety. All right, bertha at the nasdaq. Bertha coombs, thank you. It is time for street talk, our daily dive into key wall street calls of the day. We havent done this in so long. Ill see if i can remember. Ill see if i can remember how to roll my eyes. Stock one, Cognizant Technology solutions, ticker ctsh. Suntrust cutting the stock from buy to neutral. A poll they looked at showed weaker pricing especially in the mid to high end segment of i. T. Services, also concerns about currency impact and potentially lower uk europe spend ie brexit fears and analyst adding headline risk on immigration ahead of the election, cuts estimates says stock upside is limited. By the way its been limited for a year and a half. The stock has been stuck in the mid to high 50s for about 18 months. Second stock were watching, oracle, bmo upgrading. Hows this . Is that a good eye roll . Youre terrible at it. Im very, very practiced at it. Bmos upgrading oracle to outperform from market perform with 2 increase to the price target bmo thinks will Beat Estimates and generate growth in operating income which had been on the decline. Also bmo thinks oracle will continue to be aggressive with total Shareholder Capital allocation. And wont do any big deals. Again, another stock that, you know, is at 41, had a nice run off lows a year and a half ago, but its been at 41 for most of this year. So oracle, and go back to two years. Its true. Maybe we do a segment, stuck stocks. Youre welcome. Stock number three, Bb T Capital Markets love bungy. A 75 target. Notes how the soybean producer, thats their primary producer, hurting demand especially in brazil, but she believes the cycle has bottom ed earlier this year. Says shares dont accurately discount the earnings improvement she sees later this year into next year. That 75 target is about 23 upside. We dont often talk about that. Its a good one. This is one you like to talk about polaris and drive stuff. Raymond james downgrading from market perform to strong buy retail sales in the Second Quarter appear to be softer than expected with disappointing trends in the companys primary offroad vehicle segment. Polaris did provide update in june and cited challenging Business Conditions but Raymond James points out the company has faced several transitory headwinds recently including weak demand in the oil and ag markets, adverse weather and product recalls. Scott wein, hes the ceo, a friend of the show. Next time hes on im going to ask him do you see price caps. Theyre getting to be 25,000. Thats expensive. Im not kidding for an offroad buggy. Theyre cool and fast, but i wonder if theres a price point and people going in saying thats a car. Basically, absolutely. Some of the fourseaters you can go 25,000 on it easy. There you go. So well ask scott next time hes on. All right, under the radar stock of the day, pinnacle financial partners, nashville based Regional Bank with market cap just over 2 billion. Piper jaffray upgrading overweight says the company has been doing a lot of aggressive hiring particularly of veteran bankers and thinks that could drive growth. But theyve been hiring a lot of mid market Investment Bankers away from Companies Like Suntrust Robinson humphrey, they specifically named that. They believe pinnacle should gain share from that and like the integration of recent deal. Target is 60 which implies about 15 upside. The stock has a big move probably on that upgrade today. And also just general lift in the Financial Sector across the board. Speaking of general electric, lets look at where the markets stand as we are just about up record highs. Dow up 138 points, good for a gain of 0. 75 hitting alltime highs i mentioned today. Dupont, goldman sachs, nike leading the way. But which of these 30 stocks is the worst performer since the dow last made record highs in may of 2015 . I. T. T. I rolled my eyes. Well have that answer next on power lunch. Welcome back to power lunch. Well, the dow and s p are hitting record highs today. Apple is the worst performing stock on the dow since the last alltime high on the dow on may 19th of last year. So where does apple go from here . Colin gillis, jason ware apple shareholder. Guys, great to have you with us. Colin, the stock hasnt done anything, but it does have levers and does have the 7 coming out. Shouldnt those be catalysts . Actually, if you go back and look at peak tim cook, which was in february of 2015, were down 25 . This is a company thats lost over 250 billion of market cap. And if you have to ask yourself are they positioned to gain that 250 billion back or to keep sliding, right now it looks like theyre positioning to keep sliding. Seems that the iphone 7 is going to be a bust, that its not going to have any new products coming down in the pipeline. And that it wont have more Capital Allocation for shareholders. So, you know, if you think about whats happening in the dynamics for apple, youve had the ipad revenue decline nine consecutive quarters. Youve had the iphone revenue now likely to decline three consecutive quarters. The smartphone dynamics are slowing dynamics are slowing down. They havent done anything except for incremental improvements, and thats finally call up to them. Youre nearterm cautious, but longterm bullish i think a lot of investors are in your camp at this point, but in terms of longterm bullish, is that predicated on the notion or belief that apple will have a gamechanging product that will essentially replace decline in revenues were seeing right now in the iphone . Its predicated on the fact that apple is a good company with good products, and apple has continued to innovate over the past many years. They have a lot of brand equity, a new iphone lineup coming out at the end of this year. Well probably see another relaunch in a more revolutionary relaunch next year, and the stock is extremely cheap, and everybody is bearish on it. When you base it on those fundamental factors, we dont they think need to reinvented wheel or have a big hot category that something is thinking about in order for this stock to have good returns. Over the shorter run, weve been cautious. Weve been talking about nearterm realistic after fantastic 2015 on the back of iphone 6. Well have a doughnut hole here, it continues for a while. This quarter will not be great, but were looking at it further as owners of the business and we like what we see. The call mentioned, you know, started the segment by talking about how its been the worstperforming dow stock, but context matters. For mid 2013 until mid 2015, the stock went from 55 to 132. So there was a big price runup on the back of what was a big change with the largest screen iphone 6. Now were having some giveback. Thats to be expected until we get to the next launching pad for the company. We have to leave it there. Thanks for your thoughts. To see right in our core territory, dow and s p 500 hiding new intraday alltime highs. Lets bring in two nyse traders. A peerer, i would rather talk about the prospects of the Tennessee Volunteers this fall, but ill ask about stocks in that. Tell me whether the market is vulnerable. That feels to me like the next stem bling point for stocks, if there is one. I do think theres a potential for that. What im going to say is i dont think were going to see it. I think that, you know, most Companies Last quarter, you know, reached out, basically said this quarter is going to be nothing to really write home about, and i think that thats going to be an understatement. I do think the earnings will start to get better. To me i dont think its going to happen. I think it potentially could happen. There could be any sort of thing, like brexit, for example. Sure. Youre at a very, very high level, the pes are very high. Ing in thats significant could definitely affect the market, but i dont see any Major Company coming in with lighter than expected earnings and really knock anything out of the market. It might be a small move. Let me get jonathan to react to that. It feels lie the fed is out of the game. Brek able has been dealt with. Whats the next potential stumbling block the expectations of outlook. Some of the Conference Calls t. Was the oil bouncing off the lows that we sawics months ago. We do have brexit. We do have conversationses and issues with china. All these put together are still on our radar screen. It seems were in a bit of a vacuum where no one is focusing on the issues that were actually here a few months ago and are still here. When i said the fed is out of the game, i meant for this july meeting. I dont think anybody will do anything in july. Peter, great to see you, jonathan, same with you. The sizzling stocks to get you through this hot summer, next. If for some reason you are just joining us, shake on you, but if you are, you should know this. The dow and s p hitting alltime highs, nasdaq closing in, but not quite at that 5132. A big part of the story may be oil, closing up 4. 6 . That, my friends, its best oneday gain since all the way back in april. As the bigger martz hit report highs, what sectors should you be looking at that may get hot in the summertime . Larneden dowdy is counting down the top five. Yesterday was telecom, what is number four . Were surfing the sizzlers, and continue our list, looking at the top five sectors in the s p 500 during the summer over the past six over. Yesterday we revealed telecom as the fifth, so what is number four . You guessed it. Tech has dominated with the mast three summers. Andrew from open haimer says thats thanks to a lot of fall launches. And this fall apple is expected to release the iphone 7 in september. Act vision blizzard also settling up. With positive trades 83 of the sale and salesforce. Com has an average return of about 6 in the past six summers. Up about 280 . Thats a lot of sizzlers. Thank you, landon. Jeff bezos is on the cover of news week. 40 a quarter. Remember, newsweek used to be owned by the no longer owned by bezos. There was a time that kind of cover would be bad for stocks, but if a magazine cover falls in the woods, do they really hear it . I want was it really printed . I dont think its the printing. The idea that a mainstream publication is call for a top. Death of equities back in the 70s was the one on businessweek. He was called man of the year back in 2000. That was close to a top. Very close. If you would have bought amazon during that market top, you would be sitting pretty right now. You would be good. On its prime day. As far as the market up a bit today. What did you get me for prime day . We haves materials and energy the gainers. Thanks good to have you with us, michelle. Closing bell starts right now. Happy prime day. Hi, everybody. Welcome to closing bell. Aisle kelly evans at the new york stock exchange. Welcome back. Im bill griffeth. The dow on track for its highest close of all time. Were going to talk about whether there are still buys opportunities at these levels. And weve gotten steven roach joining us to discuss that and whether it could be a red flag, plus roger altman on whether the uk vote could pose risks down the road. Lets get to the market at alltime highs. Lets get to thesi