Transcripts For CNBC Power Lunch 20160714

The markets. Jp morgan did not use brexit ate my homework as an excuse to imply lower numbers. Jp a lot of people were nervous, they did not take that bite. A great relief. Financials up right across the board. Earnings trends, only a few of them have been beat. And i want to show you whats going on here. Since these companies started reporting, this has been their stock prices. Alcoa, delta, jp morgan, every single one of them. Lets take a look at the banks. It is very traditional for banks to go up a little bit. Thats jp morgan and sell off after it. And banks are leading, up about 5 . So far just this week. The head of the Worlds Largest asset manager getting a little worried. Heres larry fink on squawk box. Here we are. Were seeing investors worldwide pausing. We have seen quite a large sum of money being pulled out of equities over the last year. And yet were at record highs. This rally in my mind is not i dont think we have enough levels to justify at this moment. Reaction now. Guys, good to have you with us. Ill start off with you. Im guessing you agree with mr. Fink. Yes, we do. We actually think whats happening right now is the world is definitely taking a pause. But were seeing additional stimulus. And that additional stimulus, why it may push money into equity, its going to put a huge bid on bonds. I think thats going to continue to be there. Within equity, we think earnings will come in at 118, and theres still going to be bright spots. But it is overvalued. The p. E. Multiple is overvalued. Rob, its interesting, because you can go through a lot of the conventional and say why should we pay two times the multiple for negative equity growth. How do you justify whether or not we deserve to be here with the market we have on hand to trade . Thats entirely the point. I think the fact is you probably dont chase Consumer Staples here. Just like you dont chase telecomm and you dont chase utilities, all of which have been bid up prior to recent market events, as people have searched for dividend yield in the absence of any real yield in the fixed income markets. So i dont think that you chase those things. I think what larry was talking about, and he is is consummate wall street insider. I think what hes really saying is theres so much obfuscation of data. Theres so much nullification of analysis, its a direct result of Central Bank Policy worldwide. Its really difficult to get at the fundamentals, the underlying fundamentals and do a traditional analytic analysis of that data and make wellreasoned investments based on that. Couldnt the same be said of bonds . Actually, bonds are even more overvalued. Which mitigating factor is going to reign . And the biggest mitigating factor is policy. And policy is creating a positive Interest Rate differential between the negative yielding japanese swiss, german, european. That puts it in incredible demand and we cannot underestimate that. So when do we see a rotation to the areas that are not overvalued at this point . If were looking for relative value here, and i use that term loosely, were looking at energy, industrials and health care. Energy still performing reasonably well even while oil quietly retraced so you think relative will be relative outperformance, but you think thats going to happen . Yeah. To the prior point, i think were sort of forced to go with that. There are central banking forces at work. They have laid out the topography of this market and theyre dictating the way we pursue it at this point. Guys, thank you so much. Gina and rob. One thing, guys, before we go on to note is it happened a few months ago, but now more than ever, for the First Time Since 1959, the average dividend yield in the s p 500 is higher than the average bond yield. You can go to ten years or 20 years. If you look across the bond spectrum, you wonder why anybody would buy bonds. At these levels. Exactly. It goes to the point of, they talked about utilities and telecomm stocks. When the safety plays are now overvalued, as many people argue utilities at 25. Where do you get safety in an unsafe world . Herbalife. Lets go to scott walker now, bill ackman sounding off on herbalife and valeant in an exclusive with scott on halftime just a few minutes ago. Hey, scott. Good to see you guys. Bill ackman rolling out his 18th video in 18 business days. On herbalife. This one a distributor for that company talking about what bill ackman calls false and misleading claims about the company. Ackman on the Halftime Report a few moments ago defending that position, still convinced that it will work out in his favor. I think this thing is going to end up with the government being a pyramid scheme, or capitulating to changes. And in either circumstances, the stock is not going to be 60 a share. Trading at 14. 5 times earnings, you get obliterated. Thats why, while weve been a patient investor here, i think this is the most attractive herbalife has been from a risk reward standpoint and thats why weve stayed short. A painful place where that investment has been for mr. Ackman, as most of you know. His break even point is in the low 30s. That stock is trading right around 60 a share. But as he clearly said, he is staying short. Herbalife, for its matter, hitting back, and hitting back pretty hard today, saying among other things, that its time yet again for bill ackman to move on. We also moved on and talked about valeant. Our scoop yesterday about that massive stock sale from the former ceo mike pearson generating a lot of headlines. Five million shares, nearly 100 million worth of proceeds. Bill ackman today calling that sad. The fact that mr. Pearson was forced to sell those shares. He did say that he anticipates valeant selling noncore assets, some at least by the end of the year to pay down some of that big debt load, more than 30 billion. Heres what bill ackman had to say about valeant. Remember, he is on the board. The stock still suffers a lot from uncertainty. On. Theres been a pretty big overhang. Big shareholders have sold out. I think theres still a lot to be clarified about the story. So i think joe will be ready for that conference call. The headline on both fronts, Standing Firm on herbalife. Thinks that it will work out in his favor. And on valeant, Standing Firm that he thinks joe s joe papa right guy. Theyll be able to sell some of these noncore assets. He may be Standing Firm. Are his investors going to stand firm with him . Thats a good question. The one i love was your question to him. What would happen if herbalife got bought, and ackman was extremely adamant. Herbalifes market cap is only 5. 5 billion. I was surprised he was so certain. Private equity firms have their own uncertainty. But thats who bill ackman is. Why would a private Equity Company go in, if there is any wif of the idea that the federal trade commission. I agree. Hiff of the idea tha federal trade commission. I agree. Hes convinced that theyre not. Could be. Speculation about herbalifes future had been much talked about for the last years, right . The idea that it could be taken private was out there and rumored about years ago. If not by now. Nothing will happen until its out of the way. Im merely saying he would be so sure that there would be no private equity buyer because he is so sure. Guys, respectfully, i would disagree with that. Risk arbitrage part of that is, maybe herbalife would be at 80 a share if it wasnt for the ftc overhang. So if somebody comes in and says, our Analysis Shows theres zero chance of the ftc doing anything, thats what risk arbitrage is. Im not saying its going to happen. I have no idea. Im just saying its one of those things i think about. As you start to think about the end of herbalife. Herbalife greenberg of pacific square. Scott, youre going to stick around to continue this conversation. I have no idea what bill was thinking when he went into valeant, because it was something i had written pretty negatively about. I fully agree with him on herbalife. I think the wild card on herbalife that nobody is talking about is it almost has nothing to do with what the Justice Department does, they get a fine. What really is possible is the government could do nothing in terms of really, you know, suing herbalife. But what they can do, and the ftc has the ability to do is tweak rules. If they tweak these rules because remember, its not just herbalife. Its an entire multilevel marketing industry. And by tweaking rules, which the government has not done, because there are, as herbalife says in its filings, no bright lines on which way they can go. I think it could have a profound effect. If that had a profound effect, thats what somebody would wait to see. That has to be cleared. Obviously the lobbyists are in there. I would suspect every day trying to make sure nothing happens. But one thing bill did is he bought a huge spotlight on this. I think the other thing people forget in this entire concept is herbalife has made a lot of changes. You have to ask yourself, why did they make all these changes in an effort to, quote unquote, clean themselves up. Did they do it because everything was fine . They dont have they dont have one point. They dont have the ability to firmly control those distributors around around the world because theyre supposed to be independent. I think herbalife would be the first ones to admit, and i believe they have. In interviews with me and in comments theyve made throughout the years, maybe some practices by some people some of the time with respect great and thats why theyve made some changes. Thats different from the government coming in in a fullfledged shutdown. You dont have to go to a shutdown. Like i said, they can tweak rules. The rules are not tweaked. Herb, the issue, though, for investors at this point, if youre looking at it from a long position or a short position, is if you even wait for those rules to be tweaked and tweaking can have a profound impact. Thats an unlimited amount of time. And whats interesting, he said something to the effect of hes going to remain short to the ends of the earth. I mean, this sounds like its an emotional position, and as you know well, it has to be at this point. Right. And emotion should not enter the picture when youre an investor, invested in other peoples money, i would think. Who was the guy who was short for so long in those mortgages . It was written up in michael lewiss book. He had to wait and he waited and he waited. Years of pain. Ackman is used to waiting. His campaign way back in the day against mbia, the morning tgage insurer, was a fiveyear fight. He endured an investigation from Eliot Spitzer and he won because ultimately he was right. Well, i dont know. When i covered mbia. I was very early on the mbia story, i was always intrigued that i could call bill up and say i dont understand something here. Theres some nuance i found somewhere. Hes like, well, if you look at footnote number ten on page 265. I think, how the hell did he know that . He knows this stuff, chapter and verse, but there is the emotions, and that gets you to valeant. Ive got to be honest with you. I said, valeant . This person went through explaining. Im surprised that bill didnt get it back in may of 2014 when mike pearson ive got to just tell you. Mike pearson went out and made claims about the company that he had to step back on about how big this company was going to be. Im just shocked that people did not understand that he was actually lined in the street back then. Weve got to let you go, but bill has been right, to your point. He was right on mba. Took him a long time. Hes down 50 on herbalife and a lot more than that on valeant. Last time i saw the cost of his position on valeant was 125 a share. The stocks at 22. Hard to be that wrong for that long. Right. Well see. See what the exclamation point is on the herbalife story. Absolutely. And well see whats next. Yeah. Time will tell. By the way, bill ackman called andrew left of sit ron a pump and dump. Weve got him on fast money to respond to those allegations. So this will continue throughout the day. There you go. I look forward to seeing that. Consumer reports famously loved teslas model f when it first came out. Then they had concerns about reliability. Then they kind of loved it again. Now theyre calling for the company to make some changes to the model s. What those are, coming up. Welcome back to power lunch. Check out shares of big blue. Ibms stock is up on the day. Working on its seventh straight day of gains. Its 11th gain in the last 12 days. Its up 33 from the market lows back on february 11th of this year. The tech giant is slated to report earnings on monday after the closing bell. On average, analysts looking for earnings of 288 per share, on sales of 20 billion. Back to you guys. Whos up in the open championship . I saw your tweets. Phil mickelson just missed a putt to shoot 62 in the first round of the british open. He shot 63. Just letting you guys know. Wow. Now for the weather. Teslas autopilot too much autonomy perhaps too soon. That is Consumer Reports headline today. They are calling for tesla to disable and rename that autopilot feature saying it gives drivers a false sense of security. Its the same Consumer Reports that awarded a 103point rating to the model s in september of last year. Lets bring in laura mccleary. Phil lebeau joining us as well. You guys loved the model s when it first came out. I think it was the highest rating any car received. Then you were concerned about reliability. What are you concerned about and what do you want tesla to do now . The truth is that from the beginning, weve been raising concerns about autopilot. When you go back, we did did give them a poor rating on the reliability factor. All the same, theres a lot of good things in the autopilot system. However, the autosteer function was connected and we dont attribute cause to a fatality, and that caused us to take another look at the data. We are calling on the company to ask them to disable the autosteer function until they can bring their vehicle in line with all the other manufacturers that have such a feature on the road by requiring drivers to keep their hands on the wheel. Okay. Im going to come in here for a second here. Sure. As tragic as it is, it is one death. Theres 30,000some vehicular deaths a year. We dont know if the driver was watching a movie or Something Else. Why this type of action off of this one tragedy . Well, were not the only once asking, obviously. The national highway Traffic Safety administration, the National Transportation and safety board and the s. E. C. Have asked tesla to be more transparent about what happened with this crash. But when Something Like this happens with an emergency technology, we do ask questions and we ask questions from a couple consumer perspective. Thats why every technology to date has always been. Its time to ask questions. Im sure theyre trying to get to the bottom of exactly what happened in that fatal crash. And theres probably my point is that so often in these cases, where systems are alleged to have failed, Something Else ultimately services that explains what went on. My main question is, when Consumer Reports does Something Like this, does it affect sales . I dont think its going to affect sales here. Consumer reports is very influential. But in this case, i dont think its going to have a huge impact for a couple of reasons. First of all, the tesla buyer generally speaking is still going to be a tesla buyer. I dont think theyre going to stand there and say look, Consumer Reports wants them to take off the autopilot feature and rename it. Im not sure im going to buy in the meantime. Can the autopilot feature be disabled . Theoretically, it could, but ill tell you what, after one incident and we dont know if there were other incidents, but if theres just one incident here, i dont think that tesla will turn it off or rename it. There is an element here of you should be aware of the technology in your vehicle. This is a choice. Consumers dont have to use it at all. Our concern is that consumers have been sold the autopilot promises on technology thats really been oversold. This is not a selfdriving car, and therefore the name autopilot wait a second. But laura, who said it was a selfdriving car . The name autopilot suggests that consumers can check out and tune off whats beginning going the road. And other manufacturers have acknowledged theres a big handsoff problem. As human beings, were bad at checking out. Absolutely. You just said it, laura, as human beings. You didnt say it was the car. You said as human beings, we have this tendency to check out. Thats why the marketing of a particular feature has to be spoton and clearly communicate the risks to consumers. So calling something autopilot overly suggests that the car can be in charge of the road. So if they just rename it, is it okay . If they say auto assist instead of autopilot . That would be a big step. Thats one of the things that were calling for them to do. We also think they need to bring their technology in line by making sure the drivers have their hands on the wheel. Only after three minutes. The car would drive itself for three minutes before giving an alarm. That is a long time at highway speed. So full disclosure, ive got to chime in, because we keep talking about so, i have looked into getting a tesla. Im going to be perfectly honest. Ive inquired about them. As a car guy, i am not going to buy the car because of autopilot. Ill just throw it out there. Its nice. It exists. Is that what attracts you . No, im a handson guy. Im a control freak. You like the styling. I have a long commute. I spend a lot on gas. But what will influence my decision is Consumer Reports overall rating. When Consumer Reports came out with a 103 rating out of like a 100 scale, i personally it piqued my interest. Sure. I agree with you, brian is it enough to persuade me or others from going in . Well, we have to say what we think about the performance, the reliability, and now the safety feature that were concerned about. So we always evaluate our positions based on what the evidence brings. Asking for a friend, how is the reliability . Well, you can check our ratings for that, certainly. Weve raised concerns. And now were saying look, theyve oversold one of the safety features. The autopilot as a package has a lot in it. Maybe a tesla salesperson is listening to. This as a potential buyer, one of my biggest concerns is, is it possible that tesla this is not about autopilot, could spring on us, if youre an owner, a multithousand dollar Software Upgrade unexpectedly somewhere down the road . Literally down the road. Anythings possible, brian. I mean, theres no way of answering that without saying its not possible. But i do want to make this point here. You brought up the possibility of them having to change the software. We dont know what investigators are going to find when they get all the records back from tesla. It could be that in the vast amount of data that they receive, the number of times there are close calls is statistically so low, that if the regulators could say this is one of those freak accidents that happen, its a tragedy. You know, we wish it didnt happen, but these things are going to happen when you have a vehicle in traffic. So its too soon to say you need to turn this off. I dont think so. Every other manufacturer that has evaluated this question has the requirement that drivers have to keep their hands on the steering wheel. Thats both a Risk Communication issue as well as a technology check. Its everyone around them on the road as well. We have to leave it there. Thank you so much. I bet well be talking about this one again. With the markets at alltime highs, the question is, where can you still find value . Weve got the alltime high playbook. Okay . Thats straight ahead. Power lunch back in two minutes. Welcome back. Rick santelli here live on the floor of the cme group. Pick a day, right before brexit vote was known. How about the 20th of june. Lets look at tenyear charts. Weve had a surge in equity prices. So look at our tenyear. Tenyear has a right side. The corrections have been small. Also the bunds very similar. Whats fascinating is when you look at the guilt. Wh the gilt. Fans, that their tenyear yields have hardly budged off the recent historic lows. I find that very fascinating. In general, rates seem to be ignoring the surge. Specifically the countries that may have the biggest economic problems. Theyre not. What does that speak to . Maybe Central Banks . Well have to wait and see for the next u. S. And ecb meetings. Thank you. Lets get a check on a company that has a great pulse on both the overall economy and the consumer. Shares of Lowes Corporation up 8 so far this year. And theyre opening up a new resort at universal orlando today. This is the fifth hotel in their partnership with comcast nbc universal, which, by the way, is our parent company. Here now for an exclusive is jonathan tisch. Treasury and coowner of the new york giants football team. Great to see you again. Nice to see you. I guess the first question is why is universal such a great partner . Im not going to ask you that. Im going to start with brian, steve. Theyre all fantastic. How about this . Youre obviously confident enough in the consumer economy to spend a lot of money building a new resort. Why . This is our fifth hotel in joint venture with comcast nbc universal. And the numbers are there. It supports the fact that here we are today opening a thousand rooms with 115,000 square feet. A thousand rooms . A thousand room. How many do you have now . This will bring us to 5,200 rooms. In orlando . Inside the resort. At universal. Because of our joint venture with nbc universal. So the numbers are there. The people are coming to the theme parks. As we see in todays economy, theyre not necessarily spending money on retail, clothing, they want an experience. Certainly, the theme park combined with great lodging opportunities is working. So youre the reason macys is struggling . Yeah. I mean that tongueincheek, but do you actually have evidence that the woes of the Retail Consumer are coming to you . The consumer does have money. They still have a bit of a dividend in energy costs being down. From gas prices being down. And they want to spend it on experiences. So not only do we opening a thousandroom hotel today, but we also have another 400 rooms under construction, or our 1,800room hotel thats going to open in march in conjunction with volcano bay opening at universal. Im going to change the tenor of the conversation. Youre involved in two businesses that are very public faces, the giants and lowes hotels. The threat of terror has to change the way you do business. What you are doing to protect your customers. Sure. And what its costing you to do that. Certainly, were aware of the world we live in. We know that events that could happen in our backyard or on the other side of the world could have an impact on peoples desire, ability, and willingness to go to sporting events or to travel. Everybody gets wanded. You go through medal detectors. And the same thing at theme parks. We have procedures in place at our hotel. We are keenly aware of the influences that may impact the safety and security of our guests and our team members. How much more have you had to spend over the last decade, lets say, at lowes hotels on personnel, surveillance, cameras, all of that . Theres no specific number, but its built a lot. Its in the cost of doing business. Its just, sadly, the world that we live in. We have to team our team members safe. When consumers hear about a terrorist attack or hear about a brexit and theyre worried, how quick are they to cancel the reservation that they have . We havent seen an Immediate Impact from brexit. Although the numbers are showing that next year, there could be 500,000 less uk residents coming to the u. S. Because of brexit. 500,000 . Yes. And the uk is the number one market for the united states. And the number one market for new york city. Well. Those are early reports for next year, for 2017. Who is providing that . The u. S. Travel association. Thats the governments no, its private sector. I am chairman emeritus. Youre too young to be an emeritus. My god, man. Ive known you that long . Its wisdom, not age. 500,000 fewer brits and their money. Because, remember, obviously the pound versus the dollar. The International Traveler is so important. They spend more and they stay more. So the bottom line is that brexit is going to be because were all listening to earnings season conference calls. Were not going to hear about it necessarily now. Exactly. That might balance. Yes. Can we quickly talk about football . Well, i want to be. Kevin durant going to the warriors. Were seeing athletes create themselves these superteams. Theyre tweeting each other, instagraming each other, getting together and saying lets form a superteam. Were seeing it with the heat, the warriors, a couple other teams. Could that ever happen in football . A little harder to do in football because of the way free agency is set up. You know when the season is over, youre losing 20 of your players. Either through trading, through free agency. Maybe they have a chance. Thats whats great about the nfl. Theyve driven it so that everybody is contending. Pokemon go. Do you look at that phenomenon and say theres an opportunity for me as a hotel to have something with pokemon and get people into my hotel . Well, if you look, universal has a relationship with nintendo. Nintendo owns pokemon. Do you think youll see a boost . I think when we work with our partners to see what we can do as we make this further commitment to universal, who knows . Shes just looking for a discount. No, no. At the pikachu suite. Im looking at the next pokemon trade. Our partners at universal are using certain i. P. Certainly in the theme parks. We look forward to those. Thank you, jonathan. Jonathan tisch. Chairman of lowes hotels. Melissa, were watching shares right now of the finish line. The board authorized a fivemillion Share Repurchase plan. Thats going to start once the current plan is finished. They kind of declared their quarterly cash dividend. Its worth around 110 million. Well have more. Keep it right here. Well see you in a bit. Tmobile covers your business in more places. So you can take your business just about anywhere. Plus, our extended range lte reaches twice as far and its 4x better in buldings. Get more done in more places. Switch your business to tmobile work today. Itslexus performance iny to streetlegal form. Taking for a limited time get great offers on our complete line of f sport performance vehicles. 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I was very pleased to receive a phone call from secretary kerry of the united states, who agreed with that analysis. And his view was that postbrexit and after the negotiations, what he really wants to see, and i think this is the right thing for the uk, is more britain abroad. A greater global profile. David samson, a key figure in the bridgegate scandal that tarnished Chris Christies administration has pled guilty to a federal charge involving a United Airlines flight. Samson resigned as Port Authority chairman as part of the probe. He faces up to two years in prison. Just days before hosting the gop national convention, cleveland is making changes to its bathroom policy. The cy council approving a measure allowing transgender people to use the bathroom of their choice. And prince harry went for an hiv test in london in an effort to encourage others to do the same. Power lunch will be right back after this quick break. 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And Brad Mcmillan, chief Investment Officer of the commonwealth financial network. Where is there still value and why . Two things. Markets are at a high. Were looking to buy growth consistency on the dips. Second, practice rational diversification. What does that mean . It means spread out. So in the stock world, spread out. Small caps, mid caps, even emerging markets. Three things in your portfolio, j and j, Bristol Myers squid, and jm schmucker. Or coffee. Which is the one they own . They bought the folgers brand. Thats the growth consistency name that were looking at. They had a great Earnings Report. Growth consistency. We like that at huntington for our customers. Mix it with a new set of diversification rules. Ta. We see the u. S. Economy continuing to grow. Weve seen this at starbucks, target, that offers some opportunities. Particularly in Consumer Staples. Theyre going to be spending it in a way in those areas, and that gives us positioning income and also upside potential. Are you worried that some of the traditional plays have gotten so highly priced that theyre not safe anymore . I certainly do. If you look in Consumer Staples, theyre a little bit expensive. In relation to growth, theyre still reasonably priced. Look at financials. I dont think anyone is really expecting the fed to raise rates. Theres a potential for an upside surprise. I want to come back to you, because youre an ohio guy. You live in columbus. This time of year, a lot of people would be talking about ohio state and whether the buckeyes were going to be any good. But now theyre all focused on the convention. Is there apprehensiveness . I dont think so. Its an opportunity for cleveland. They just came off the cavaliers, right . Its an opportunity for cleveland to shine. Then, the election usually spreads to columbus. And ohio helps in the election process for the presidency in general. So well see a lot of activity to ohio. Out of cleveland. Indians in first place, too. Good deal. Good time for cleveland. Football coming up. Six, seven weeks. All right. John, thank you. And Brad Mcmillan with the commonwealth financial network, thank you as well. Go to powerlunch. Cnbc. Com to see three other blue chips john holds right now. Getting in on the pokeconomy. My son is play it right this minute. Up in new haven. For your retirement, you wanted to celebrate the little things, before they get too big. And that is why you invest. The best returns arent just measured in dollars. Td ameritrade. 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. Time now for a pokemon power rundown. Eric, what you got . Pokemon go is officially the biggest u. S. Mobile game of all time. Being the 20 million daily active users that candy crush sought in its 2013 peak. The average user is spending almost 40 minutes a day on pokemon. Thats more than any social media app. But dont just compare it to games on social media. Its become so big that its now on the same scale as google maps. But all that success is worth only two million per day in the app, which nintendo gets a small percentage. The 12 billion jump in nintendos market cap suggests they may be expecting a lot more money out of it going forward. Hasnt even gotten in japan yet. One out of every ten smart phone owners has it. Two bedrooms, one bath, and a charmander in the backyard. Beginning to tap into the pokeconomy. Given that pokemon go is based entirely on going to locations, this is a nobrainer for real estate agents, like jay glazer. He held an open house last night. On the facebook ad, it said, im fairly certain theres a pikachu at this open house. Nobody who showed up knew much about pokemon, but they got a cnbc camera there, right . Not so bad. Glazer is not alone. Agents see it as a way of at least driving people to their ligsin listings. On the other hand, another listing in florida screams there are zero pokemon go features. Some people clearly dont think pokemon is a selling point. It may not exude the cachet on a higher end property that one seller might be looking for. Back to you guys. Thank you very much. So finally, is this hot new game enough to revive shopping malls . Courtney reagan is here with a story about if pokemon go will revive shopping. Please. Im going to show you some examples. So retailers have been exploring augmented reality. So maybe pokemon is the answer to declining store traffic. Retailers could leverage features to drive traffic to stores and malls. So pokemon go maker natanic says there could be more sponsors coming. In the game, players chase fictional characters that appear in real life thanks to augmented reality, so they sometimes end up in the stores anyway. Like nicole, who found pokemon while buying makeup in sephora. Kok wasnt intending to go into forever 21, chasing pokemon. Roxanne was in American Apparel when an employer told her theres a pokemon character to find in here if youre interested. A balbazar . Get it now . So theyre chasing them. And they end up in there. Or theyre in there anyways. Bumping into customers as they look down at their phone. Of course, the challenge is to get someone to actually buy something. To stop looking. And actually buy. The traffic is the first hurdle to get over. That is true. Then youve got to work to convert them. But youve got to get them in there first. And they need to be more theatrical. They need to embrace the eventdriven culture. When the pokemon go characters become the employees, when v. R. Takes over america, then well have some. That sounds good. Im still skeptical, but it was a great story. Theyve been looking at ways to look at augmented reality. There you go. Lets go to the mall. Embrace it. Get onboard. Up next, a big update in the race for the white house. Power lunch. Well be right back. Ter chef and emiana reminds me of like a monster chef. Uh oh. I dont see cake, i just see mess. Its like awful. It feels like i am not actually cleaning it up whats that make mommy do . doorbell whats that . Swiffer wetjet. So much stuff coming up. This is amazing woah. Wow. Now i feel more like making a mess is part of growing up. Stop cleaning. Start swiffering. Just about 2 00 in the east coast. We have a news alert in the race for the white house. Lets get to john harwood in our washington newsroom. Two senior republican sources, one within the Trump Campaign, one close to the Trump Campaign tell me that donald trump has selected mike pence of indiana, the governor, as his running mate. He has informed reince priebus. Until we hear from donald trump, given the unpredictability of this campaign. We will know it for sure when donald trump comes out and says i it. A social conservative. Someone who paul ryan praised this morning as a potential choice, is going to be Donald Trumps running mate this fall, and we should are scheduled to hear it from donald trump at 11 00 a. M. Tomorrow. Hes an establishment republican, correct . Yes. I mean, hes somebody, for example, whos been protrade. Donald trump is running as an antitrade guy. Hes somebody who gained a profile, not a favorable one, with the Lgbt Community for the indiana law, which they then backtracked on with respect to gay marriage last year. They did have a significant career in the house of representatives. Came out of conservative talk radio before that. And he has governing experience as an indiana governor. So he would have to hes running for reelection right now, hed have to leave that race tomorrow, if he is, in fact, Donald Trumps pick. But he does bring executive experience, and so to the extent that that makes him establishment, yes, hes establish emt. John harwood, just under two hours left in the trading day. The market rally, off session highs, though. The nasdaq and the s p 500 for the record. There you see, for the record, a record on the dow industrials. The nasdaq up 23 points after yesterdays swoon, or wilt in the heat of the summer. Lets get to bob pisani on the floor of the New York Stock Exchange for more on this ongoing rally. Take a look at banks right across the boorkd up about 2 . Often theyll sell off. Look what they had to deal with. Often theyll sell off. Look what they had to deal with. The brexit concerns. The lower rates. The riskoff nature of the capital markets. But it was offset. Lower expenses. Quarter after quarter. Up 3 . Loan growth. 16 year over year. Thats one of the things powering these stocks higher. By the way, weve had very big volume today. All the etfs that are in financials. Huge volume in that one today. I think a lot of relief and generally numbers this week. Great start to earnings. Thank you so much, bob pisani. Well pick up where bob left off on financials. Were going to talk about what you can expect. Lets bring in jason goldberg, the managing director at barclays. Guys, great to have you with us. Fred, you know, jp morgan really exceeded expectations. All these earnings are beating on lower expectations. Post what happened with brexit in the bond market, jp morgan did nicely on the revenue side. Definitely a nice quarter, but expectations were pretty low. A bright spot in the report for jp morgan was loan growth, which exceeded 10 double digit increases, including between residential as well as commercial loans. How much money do you think that they can continue making off these loans given what the yield curve is doing . And seems to continue to be doing since the spreads. Absolutely. Loan growth was strong in the quarter. Its been really strong the last several quarters. Broadbased by both type and geography. Marngts have been expected to continue to compress. Kets have continue to compress. We do expect it to trend higher. The Company Guided to higher income in the back half of the year. When you take a look at some of the strithings that stood oft almost seemed like one offs because rates will continue to be so low. Is that going to persist until the weak third quarter, especially when we have brexit powering that trade in the Second Quarter . The short answer is no. We always see volatility. Especially as we go into the summer months. I would say the banking side of it, the deal flow was better than expected postbrexit. I think that is a highlight. I would just comment, the loan growth was very strong. We have to wonder, though, are they reaching a bit for credit given that loan growth. All right. Jason, why dont you give me the readthrough here. Is there a readthrough . Jp morgan, they can touch a lot of different businesses, which a lot of other banks have in pieces. But whats your strongest readthrough . They tend to be a Higher Quality name than some others. I think main takeaways, you look at some of the regional banks. We talked about the positive loan growth. Thats a potential positive impact. We like to look at the readthroughs. We see the whole Banking Sector across the board. Are these the gains that were going to see through this quarters reporting season . Youre going to have a lot of volatility. Jp morgan certainly did very well. We think that quality is going to play itself out. Thank you so much. Jason goldberg and fred. Meantime, get this. A new report says that Lehman Brothers could have been saved and maybe the entire financial crisis prevented. Yeah. That story coming up next. But as we head to break, lets take a look at how some of the most widely held stocks are trading today. The dow makes a new record yet again. Alphabet, apple, jp morgan we just talked about, and microsoft. All higher. Were back right after this. Welcome back, everybody, good to see you. Even though we cant see you. I can see you, guys. The market has given back a little bit of those earlier g e gains. Procter gamble hit its highest level since january of last year. A big name there. Also, earlier today, shares of pepsico, colgatepalmolive hit records. Still outperforming the broader index. Back to you guys. Thank you very much. A new report says Lehman Brothers could have been saved. Steve liesman joins us now with that. Interesting. This is a potential blockbuster. Its a paper being presented at the in cambridge. It argues that bernanke, paulson, and geithner, they were all wrong, that Lehman Brothers could have been saved. John hopkins, a wellregarded professor. He says in a 218page paper, the government had the Legal Authority to bail out lehman and it would have worked. Hank paulson, the former treasury secretary and tim geithner said repeatedly the fed could not bail out the bank because they couldnt take loss on the loans. They insisted lehman didnt have the collateral to pay back the feds money. Not so, says the paper. They say theres no evidence that the fed did a detailed examination. That the fed arguments on Legal Authority were incorrectincor they took more risks. They said, politics, not finances, doomed lehman. The paper says the fedex plan nations rested on flawed economic and legal reasonings and dubious factual claims. Cnbc contacted paulson, bernanke, and geithner. He said, i quote, ben bernanke and i tried to work as a team and prevent a lehman failure. We could find no Legal Authority which would have been successful in saving lehman. He called it an insolvent Investment Bank in the midst of a run. On squawk box this morning, the fed governor during the crisis, he was in the room. He said ball has it all wrong. The Global Financial system, he said, was already tipping into chaos, even before lehman. I dont even believe lehman was lehman. I think by the time we got ourselves to lehman weekend, this di he had already been cas. Every conversation about the financial crisis ends in a debate over lehman. This paper is among the strongest attacks on the accounts of the big three who made the crucial decisions. What did the professor say about the financial crisis not having to be so bad . Thats just merely on the projection that if they had bailed out lehman, then therefore xyz wouldnt have happened . First of all, we could never know. But if lehman had been saved, you wouldnt have had the meltdown of the Global Financial system. To which the opponents, those who were supporting what happened say, you know what . It took eventually the federal government essentially to backstop the entire Financial System to stop the run. If you think saving lehman was all that was needed, you have the story wrong. If Frans Ferdinand would not have been assassinated, we probably would not have world war i. I understand the paper. But to melissas point, its easy to hindsight here. It is. Those of us who lived through it from the observation perspective, we werent lehman employees, obviously. You forget how fast everything happens. Four or five days. Boom can i spin it to why its relevant today . We are going to talk about this and its interesting. Did it have to be that bad . Its relevant today because it shows that the Federal Reserve, the treasury, and the congress should make very darn clear what the fed can and cannot do in the midst of a crisis so that its clear to everybody. The other thing thats clear, that all those guys, geithner, bernanke, and paulson, they wanted to bail out lehman and they couldnt. Now theyve made it harder for that to happen. What was the difference between lehman and aig . Your proponents paulson and geithner will tell you aig have operating, cash flowing subsidiaries. Those cash flows backed up the loans from the government. So theres collateral. They would point out that the first goround of loans to aig didnt work. Nor did the first goaround on loans to bear stearns. That didnt work either. So thats in their favor. He did a very detailed look at Lehman Brothers. And the four biggest banks in america are bigger than they were then. In terms of the legal dispute, though, what outlines what the fed, treasury, congress can do or not do . Why is there such a difference of opinion in terms of what they could have done . It was section 13. 3 of the Federal Reserve act, which said the fed could take such actions in extraordinary and circumstances. So everybody agreed that was satisfied. But the problem is that the Federal Reserve could not make a loan, that it knowingly would lose it money. This guy makes a point that needs to be discussed. When would they have had time to do that . Well, thats an excellent point. That i cant dispute. There were efforts to sell lehman. The market didnt value it. The market was otherwise occupied. A lot of the potential buyers had already balked. Some had. And some were clever and were waiting for the fire, which was the essential problem in the governments plan. Which is, if im whoever i was, ken lewis at the time. Or whomever, said you know what . I wait until the thing goes bankrupt. I want to add one thing. Everybody agrees that they underestimated the impact of lehman. They thought it was going to be a problem, but nobody thought it was going to be as bad as it was. And again, you threw out some latin, so im going to counter it. When we look back and we sort of make assumptions that are not true, lets go back five years before lehman. 2003. Does anybody remember this . Im sure you guys do. Franklin raines being grilled, and congress saying that fanny mae was dangerously oversized. And needed to be shrunk. And you know what happened . Fanny mae only got bigger after that hearing. So im not discounting the paper. Id love to read it. Where do we stop in the if the internet bubble hadnt burst, Interest Rates wouldnt have gone down. You know i mean . Lawrence ball is a visiting scholar at the imf. Lets get him on. Hes an associate researcher. His credentials are not in question here. By the way, bernanke in his book wrote his biggest fear was that it would come to be believed that they had the Legal Authority to bail out lehman. We called bernanke, he didnt have a comment. We emailed him. You have the paper . I have the paper. Not economic events. Events generally. Im guessing we have to go, but its so interesting how you Start Talking about those events. It always ends up in the critical debate of the lehman weekend. Could it have been saved . Should it have not been saved . On that, we will leave it. Steve, thank you. Are you missing out on potential savings for your retirement account . Coming up, a report that may make you want to make some changes. Plus, as the market continues to head higher, were looking for an opportunity for you. It is street talk. That is next. Bless you i beg your pardon, everyone. Im only in my 60s. Ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i looked at my options. Then i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. Call now and find out about an aarp Medicare Supplement insurance plan, insured by Unitedhealthcare Insurance Company. Like all standardized Medicare Supplement insurance plans, it helps pick up some of what medicare doesnt pay. And could save you in outofpocket medical costs. To me, relationships matter. Ive been with my doctor for 12 years. 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And learn more about the kinds of plans that will be here for you now and down the road. I have a lifetime of experience. So i know how important that is. Welcome back to power lunch. Shares of wynn taking a hit in trading today. The price target also cut to 94 bucks a share. It was 101 due to valuation concerns, among other things. The stock was up 32 year to date. Time now for street talk. The recommendations that you need to know about. First stock, dicks sporting goods. Rbc upgrading to an outperform. They say while they do expect the company to face sizable competitive challenges, thats you, amazon, and other normal channel cannibalization, they say the sPort Authoritys demise reduced investment spending and the potential reduction in Square Footage growth makes dicks a favorable elongated trading opportunity. That is a direct quote from the analyst note. 56 target. A lot of love. Year to date, its had a massive run. Raising the price target of 62. Its transforming to an infrastructure company, having completed the acquisition of Agl Resources and combined that with a rapid expansion of southern power. Its also recently announced a strategic venture with morgan. It does have a 21 times multiple. Theyre viewed as a safe haven area. This was a boring old you know, flip the light switch, pay the electric bill stock. Could work out. Third stock. This is a short opportunity. They call that a sell. They slice the price target to 8. Stocks at nine. So about a 10 drop. A bit of a technical call regarding technology. All flash memory of what they call their fiber channel is deflationary. But a secular change of this magnitude will create multiple pressure on the stock. Saying that brocade stock is going to help. Procter gamble. Ubs is upgrading to a buy. The Company Making positive step over the past six months, including signaling a willingness to reinvest, and need to improve agility. P and g remains underowned. At 1 to 2 organic growth over the next year. It could actually outperform even if its just to narrow the valuation gap. This is, again, another one of those sectors, Consumer Staples, yield play. You know, safety trade, quote unquote. And theyre saying, you know what . They should catch up. It was an 85 stock two and a half years ago. Its an 85 stock today. Somebody mentioned that perhaps the tide had turned at procter gamble. Todays under the radar stop is hub stop. Please. Boston based Sales Software Company Getting a double boost today. Morgan stanley more positive. Raising their target on hubs from 60 to 55. Piper jeffrey raising from 65 to 65. Piper sees another Strong Quarter coming. By the way, in the same call, Morgan Stanley boosted, but hub spot getting a double dose of analyst love today. The stocks at almost 52 up 5. 17 right now. You were doing so well until we got to street talk. I loved your comment you said the pound had become the ounce. Well, viewers out there will know what i mean. Its good for business news. Thats street talk for today. Well be back tomorrow. Oil gaining back some of the ground that it lost yesterday. We will go live to the nymex for the closg trade on oil. Or you can look at the board right now. Its up 2 . Its time to discover that in a lexus suv. Theres no such thing as adverse conditions. Come to the lexus golden opportunity sales event this is the pursuit of perfection. Weve got a news alert on former pharma executive mark shkreli. A trial date has been set. That is june 26th of next year. That is when this trial is set to begin. We will see some news updates leading toward that. But essentially, shkrelis lawyer arguing that the trial is very complex, and he has other commitments leading up to that date. Thats why he needed to set it in june. Interestingly, it sounds as if shkrelis lawyer is going to request severance of this case from shkreli and codefendant. The argument being potentially, what hes calling a reliance on counsel defense. Potentially that theyre going to say that shkreli relied on counsel in all of these charges against him. June 26th, 2017, Martin Shkreli back in court here in brooklyn. Thank you for that update. Lets get to Courtney Reagan now with your news update. Here is your cnbc news update at this hour. John kerry arriving in moscow, where he will hold talks with russian officials on the situations in syria and ukraine. Kerry is due to meet with president Vladimir Putin this evening. A judge denying the request for a restraining order from a former employee that filed a lawsuit against startup hyper loop one. He requested the order against hyperloops chief legal officer for, among other things, placing a hangmans noose on his chair. A new survey shows almost eight of ten drivers in the u. S. Have expressed some form of road rage in the last year. Most of the aggressive drivers are men between the ages of 19 to 39. Male drivers are three times more likely than female drivers to get out of a car to confront another driver. And the funeral for Philando Castile in st. Paul, minnesota. His casket was taken in a horse drawn carriage. He was killed by a Police Officer during a traffic stop on july 6th. Thats the cnbc news update at this hour. For now, back to you. Thank you very much. The oil market closing now for the day. To find out how and where, Jackie Deangelis at the nymex. Good afternoon, tyler. Thats right. Crude oil prices getting a little bit of a bounce today, recouping yesterdays losses. Getting back over 45 a barrel. Looks like we have a little bit less than a dollar gained for the day. This is typical of the pattern that weve been seeing. People happen to get in. They buy the dip here. The bullish camp seems to think that oil will go back over 50 in the latter half of the year. They still believe that rebalance is going to happen. But you have these two views out there. And theyre going to push and pull at each other. Traders continue to think that were going to see this kind of pattern continue for the next few weeks until we get a catalyst or move more into the summer and see that seasonality start to come off. But two very distinct views out there. It could go either way. Check out shares of delta. Theyre soaring right now. Delta also planning to cut its flights between the u. S. And the uk during this winter due to the brexit and the plunge. Joining us now is chris kelly, energy and airlines buy side analyst. Great to have you with us. Thank you. You say that the stock is moving higher because its guided conservatively, so it looks like you can achieve those targets . Well, i think its a mix of them not necessarily guiding conservatively, but guiding below what people expected. And in conjunction with that, adjusting the back half capacity for 2016 that should make it more achievable for them to come in, maybe not at the higher end of that range, but improve as we move into the fourth quarter, and probably more importantly as we move into 2017. Right. The commentary from delta seemed pretty negative. Domestic yields. Geopolitical uncertainty. Tell me why one should buy delta, if one should at all at this point. Well, its pretty simple. And its not just delta. Lets use delta as an example. Its six and a half times earnings. They just did a 5 Free Cash Flow yield in a quarter. Theyre going to return 3. 5 billion to shareholders this year. Theres not Many Companies in the world, specifically in industrials and transports really specifically that can do a double digit Free Cash Flow yield, trade at a mid single digit pricetoearnings ratio, and then return a ton of capital back to shareholders. So we start with valuation here. Sentiment is really bad. I agree with you 100 that the call was pretty negative. But things have been pretty negative for a year, maybe a little bit more than a year. Which sort of ironic. They theoretically had a great macroenvironment to operate under, which oil prices were down, so their costs were down, right . Theres still demand for travel out there. Yet the stocks are closer to 52week lows than they are to 52week highs for sure. This is purely a valuation since the stocks have dropped so precipito precipitously. Yeah, thats correct. People sold the stocks because, you know, pricing has been down for well over 12 months now. In hindsight, that was highly correlated with oil. But people got scared. People were afraid that we were going back to 19981999, where airlines were just going to go back to competing away all the profits that they garnered. So they took the multiples down to four, five, six times in some instances, really expecting profits i think to get eviscerated. Our view is it might be profitability. It probably is. But we dont think profits are going to zero. We dont even think theyre going to get cut in half from here. So, you know, were very favorable on the risk reward on the space. All right, chris. Great to have you with us. Thank you. Chris kelly, janice capital. The s p 500 hitting another record high. The fourth straight session that has happened. Heres the question. How much higher can stocks go, if at all . Lets ask your trading nation team. Rich ross is a technician with ever core isi. Dennis david with harvest volatility management. When you did a chart for us earlier on the s p 500, you mentioned something called a megaphone top. I know enough about Technical Analysis to know i dont know what that is. What is it and what does it mean . Yeah, brian. Look. Im a technician. And typically i like to break out to an alltime high. In this case, not so much. When you bring this up, ill show you exactly why. Not only the 9 straight shot move postbrexit. Really that megaphone or broadening top they call it the megaphone because it looks like a megaphone. When we zoom out and we look at the weekly, i think this is the chart that makes it sparkling clear for the viewers. Importantly, brian, anyone can trade at the breakout, but you have to hold the breakout. What you want to see is a friday close above that old high of 2130. In fact, we really want to see consecutive weekly closes above that level. What will kill you, brooirn, ia metaphorically speaking, the top ticking a market on 20 times earnings, to an alltime high. That would be bad. If we do get a downside reversal that breaks below that 2130, 2135 in the short term, that would call into question this move. Youre the volatility guy. Are you getting too excited or are you concerned about the lack of fear in this market . Theres a lack of fear in the market and the overall vix. One of the things thats really jumped out in the Options Market is the overwhelming buying of calls that weve seen. Buying inexpensive upside calls is a lot of the flow that weve seen. It could work out. Like people want to participate. But theyre not 100 committed. I look at the market and say its ripe for a breakout. I think you can see the dow jones get as high as 20,000 by the end of the year. Its another 8 from here. Everything seems to be priced right about it. And the Options Market is giving you that at a pretty inexpensive price. You can buy upside calls on the diamonds that represent 20,000 and the dow. And let you participate in that breakout rally, if we get it. Okay. Words of caution. Words of optimism. Megaphone tops. That section had it all. Dennis, rich, thank you very much. We do appreciate that. For more trading nation, we do two more additional online segments every day. I implore you to go to tradingnation. Cnbc. Com. Shares of the messaging app line are soaring in their market debut. Is this a sign that other Tech Companies that after some lousy ipos now finally a decent time to go public . Plus, baby versus 300pound robert. Details of what a steel Security Guard did to a 16monthold boy. Hes okay. Power lunch back after this. And now, the latest from tradingnation. Cnbc. Com and a word from our sponsor. Earnings season can spell opportunity, and using the right strategy can help you take advantage of it. However, earnings season can just as easily spell disaster if you use the wrong strategy or if your forecast is incorrect. Sometimes, what separates experienced traders from novices isnt just how they try to profit on earnings season, but also, how they attempt to limit risks. Shares of line soaring today. Its debut has investors asking which private Tech Companies will follow in the messaging apps footsteps . Josh liptons got that story. There are four Tech Companies that have filed for an ipo, but have yet to go public, according to cb insights. Talent and ping, and tabularasa health care. There are reports they have hired Investment Banks to explore an ipo. These companies declined comment, but what connects them is theyre all business to business focused. Venture capitalists say theyre more likely to boast financial metrics that Public Market investors could appreciate, such as high growth, recurring revenue, and lower cash burn. Theyre subscription businesses with proven Business Models where the revenue occurs every month, every year. And its easier for them to control their costs than many consumer companies. Reporter as for those consumer facing companies, powerhouses like uber and airbnb are in no rush to go public. Both companies can and do raise boat loads of money from private investors. Other ondemand startups might be wary of testing the markets right now because theyre still losing money on every transaction and dont have pathways to profitability. Still, vcs expect that tech ipo pipeline to pick up. Thats because more startups will have to turn to Public Markets for funding, he says, as private markets cool. And theres another reason he says investors should expect more tech ipos. His colleagues want to enjoy some actual cash returns on their investments. Guys, back to you. Josh, thanks so much. Josh lipton. Over 20 billion in venture funds have gone into Tech Startups this year, mainly unicorns. Thats an 11 spike from this time last year. But only four Tech Companies have come public this year versus 14 in 2015. So will lines success help stoke techs ipo fires . Raj, great to have you with us. Thanks for having me on. You think its going to pick up at this point . You know, im hoping that it will pick up. I think its obviously been a very slow 2016, which follows a very slow 2015 for tech ipos. What concerns me is we dont see a lot of the top tier Tech Companies wanting to ipo. Theyre very happy staying in the private markets and raising money there. But i do think that their investors are starting to feel like they want exits and they want some liquidity. So how does that pushpull work itself out . If the investors want out and the Management Team and maybe some investors dont want to go public, what happens . You know, at the end of the day, as an investor, youve got to support your Management Team. As much as we all want liquidity and we want exits eventually, i think as an investor, most of us are in this because we want to build great companies. So i think at the end of the day, its the Management Team thats going to win out and make the final decision. Therefore i think tech ipos will pick up a little bit, but not dramatically in the second half of this year. I just sent out a shot. I have a screen here with about 30 or 40 recent ipos. I just tweeted, instagramed that out so our viewers could see the returns. When you say today dont want to go public, theres probably good reason. The market has rejected most recent ipos. Fitbit, on deck, taraform, square. Down over 25 this year. Many of them are down over 50 from their ipo or first day closing price. Is the market are bankers putting troubled companies out into the Public Markets too soon . I cant understand why the market would reject these companies so summarily. I think it comes down to the fact that many of these companies dont have the profitable Business Models. They dont have the recurring revenues. And for Public Market investors, thats what theyre looking for. So i think its very important for entrepreneurs and startups to be cautious in a market like this. And private markets have been taking care of these companies. Theyre raising billions of dollars without having to go public. And thats one of the two main reasons to go public. The other is to give liquidity for your investor. I dont think investors are going to push very hard for the rest of this year. Some of these companies that have either been bought or have gone public, do they really have the Revenue Streams to justify the prices at which they were bought, like whats app . You know, its a great point. I think Companies Like whats app took a different path. They were acquired for 22 billion by facebook. They really are the number one messaging app. A billion users compared to lines 200 million. Top Tier Companies that dont want to use the Public Markets. Theyre very happy using the private markets for an exit that brought them liquidity, that brought them access to the facebook platform, and i think well continue to see that. Raj, thanks so much for your time. We appreciate it. Thank you for having me. First, they came for our jobs. Now theyre coming for our kids. 16monthold harwin chang was with his parents when he was bumped into by a replica of what youre seeing on the screen, one of the malls giant security robots. According to the boys mom, the child fell down and the 300pound robot ran over his foot. Luckily, some no broken bones, just some swelling. The robot has apparently been in use at the Shopping Center for over a year. The company says they have no previous incidents with them, but theyre investigating and im glad the boy is all right. Its a great example. Of . Get the Security Guard that used to do that. Does he now work for the Robot Company . Im serious. Like, who probably not. Not immediately. Theoretically, over time, thats what will happen. That is what has happened with every technological advance this country has seen. Theres a transition period. Those people get retrained. They learn new skills. People go to other sectors. And thats how our economy evolves. So the Security Guard is going to start designing and building robots . No, i didnt say that. I didnt say that at all. No, no, no. Theyll find Something Else to do. Something well, we hope. Hell find Something Else to do. All right. Are you missing out on a way to boost your Retirement Savings . The new plan that not enough people are taking advantage of. Well explain that right after this break. Approaching medicare eligibility . Dont put off checking out your Medicare Options until 65. Now is a good time to get the ball rolling. Medicare only covers about eighty percent of part b medical costs. The rest is up to you. Thats where aarp Medicare Supplement insurance plans insured by Unitedhealthcare Insurance Company come in. Like all standardized Medicare Supplement insurance plans, they could help save you in outofpocket medical costs. Taking informed steps really makes a difference later. Thats what it means to go long™. Call now and request this free decision guide and explore the range of aarp Medicare Supplement plans. All plans like these let you choose any doctor or hospital that accepts medicare patients. These are the only Medicare Supplement insurance plans endorsed by aarp. Call now and request your free decision guide. And start gathering the information you need to help you go long™. All right. You could be missing out on the chance to grow your savings for retirement in a bigger way. Theres a new option that Many Companies offer. Is it right for you . Our senior financial personal finance correspondent, sharon epperson, joins us now. These are roth 401 k s. More and more employers are starting to add what is called a roth 401 k . Financial advisers that weve talked to say many employees still dont know how they work. So, heres the 411 on these 401 k s. You should know this already, but were going to review. A traditional 401 k lets you fund your retirement account with pretax dollars, paying taxes when you take the money out. Now, with a roth 401 k , you pay taxes on your contributions upfront, meaning your money gets to grow taxfree and it can be withdrawn taxfree in retirement, too. That probably sounds a bit like a roth i. R. A. , right . But a roth i. R. A. Contributions are limited to just 5,500 a year or 6500 if youre 50 or older. With a roth 401 k , you can put up to 18,000 in that account this year or 24,000 if youre 50 or older. So being able to stash away a lot more money that you can then take out taxfree in retirement is one of the biggest benefits of a roth 401 k . And theres a lot more about this on cnbc. Com retirewell. What percentage of companies have these roth 401 k s . The majority. Over half of them. Large employers are now offering the employees the option. Beyond the limits on the amount you can contribute for a roth i. R. A. Or a roth 401 k , are there restrictions on income that you have to have, where you cant so heres the big difference. A roth i. R. A. Is restricted by income. A lot of people wish they could have that taxfree growth, but they make more than 194,000 if theyre a couple and more than 132,000 if they are single. With a roth 401 k , no income limit. Any difference between the matching contribution that my Company Might make to a roth versus a traditional i. R. A. . So you know, very well. You want to put in at least enough money to get that companys match contribution. Whatever it is. But what your employer puts in for you will go in pretax. So the that will automatically go into a traditional 401 k account. Which is the better deal most of the time . It really depends on your tax situation, but i think for many people who have a lot of money already in a traditional 401 k that theyre going to have to pay taxes in retirement, they may want a little pot of money that they have, thats not going to be taxed in retirement. Exactly. So it really depends on your tax situation. But its good to look at both. And you can contribute to both at the same time. As long as you stay within that 18,000 to 24,000 limit. Exactly. Sharon, thanks a lot. Coming up, our continuing countdown of the sectors that get hot during the summer. The second best performer is next on power lunch. And take a look at the markets as the dow and s p 500 make new record highs and the nasdaq squarely above 5,000. And you want to take a look at shares of valeant. This is a story well be following all afternoon, up about 7 . And this after fund manager bill ackman of persian square spoke exclusively to scott wapner on the Halftime Report earlier today, outlining what the company could possibly do to boost shares. He also commented on former ceo mike pearsons sell of his share of the stock in the company. During that interview, ackman taubt andrew left of citron research. He comes on tv, says hes short, essentially saying hes a pump and dumper. Weve got andrew left on tonight at 5 00, to defend himself. To see where he is on valeant, which, by the way, he has reinitiated as a short very recently. Thats going to be a great interview. Cant wait. Its going to be fascinating. Weve been counting down to the sectors that perform the best during the summer and today we are up to the second best performer. Landon dowdy is crunching those numbers for us zplp so far weve shown you teleconn as number five, tech as number efour, and Consumer Staples as number three. Utilities is the second best performing sector during the summer since 2010. And peter bookfar of the Lindsay Group says that dividends are the main catalysts for these sizzling stocks. All three have an average return of about 5 . Agl resources with 5. 9 returns. American waterworks with 5. 1 . And edison, with 3. 7 returns. And american waterworks, posting positive trades, 100 of the time. Take a look at the stock. Shares are up nearly 300 in the past six years. And guys, tune in tomorrow. We will reveal the Top Performing sector, that sizzles is that because people are watering their lawns in the middle of the summer . Theyre surfing. Theyre surfing. How many summers did you look at . All the way back to 2010. So technically, six summers. All the way back six summers. All the way back to 2010. Back when the internet was a crankup device with a monocle. It was hard research. All right. Tomorrows number one, right . Thats right tune in. Thats top. Number one, theres nothing above number one . What . Are there any guesses . Hes trying to throw you. Brian sullivan . hes not having any of it. Dont fall for it. Im not having it today either. Everybodys all worked up. Any minute now. Thank you, landon. Thanks, guys. Should we look at the dow and s p at record highs . Why not. By the way, talk about a summer sizzler, best performing stock this month in the s p 500 is what . I have no idea. American airlines. How interesting. When people are traveling, to find all that water landon just talked about. Traveling over the water. Thanks for watching power lunch. Closing bell starts right now. Hi, everybody. Welcome to the closing bell. Im kelly evans at the New York Stock Exchange. Happy National Ice Cream day. Theyre getting ready over there. Stocks on track for another record high today. Financials, this time, are the best performers on the back of that better than expected Earnings Report from Jpmorgan Chase this morning. Well have the details for you, coming up. Youre hearing a number of traders just gleeful about the free ice cream theyre handing out here momentarily. And then theres that ipo of messaging app line, opening to quite a big fanfare here at the exchange. What todayseb